Foreclosure Board Ups

Looking through the news today, I noticed many articles with blurbs about Obama’s plans to fix the economy, get millions more Americans working and provide a base for housing prices.  Mix that with blurbs from local and state politicians and their foreclosure prevention thoughts for a nice soup of conflicting thoughts and plans.

Knowing everyone involved has the best intentions, I still believe there are parts of the country that will closely resemble parts of California’s Inland Empire in the early to mid-90’s.  Prices were substantially different then, but there was a period of economic growth leading to a quick run-up in housing prices which is the way the California market seems to work.  Then, like now, the bubble burst and homes became overleveraged in a very short period of time.  So what did homeowners do?  They stopped paying the mortgage and either left of their own accord or waited for the foreclosure clock to run out.

By the mid-90’s, various tracts weren’t quite ghost towns, but it wasn’t unusual to find 1 out of 10 homes locked up with plywood sheets boarded over the windows.  These homes weren’t for sale, it was strictly inventory, sitting secured, waiting for either processing and rehab or the market to strengthen enough to justify processing and rehab.  Of course you can find areas like that all day long in the inner city or very low income areas, but these homes weren’t even ten years old at the time.  If you imagine where you live losing 10% of it’s population over a few years you’ll start to get an idea of what it was like.  Very quiet, very little traffic and a general air of neglect with a little despair thrown in for good measure.

I believe this is going to be seen again despite the intentions and efforts of those who state they are “preserving homeownership”.  It’s foreclosure triage and requires the acknowledgement that some areas aren’t going to be able to be saved from the combination of job losses, unpreventable foreclosures and a massive decline in home values.