ok, and my figure was over 3.3 million.... so even if you doubled the 3% to 6% thus nearly 7m you still have barely reached the same amount of both stimulus packages and I still feel it would have been far more productive use of the money with far less risk. It would have obviously directly helped those in the most need as well.

"This 3% is more than triple the less than 1% change over the last year of homes lost."

But according to your quote ^ the figure is less than 1 percent, not 3%.  Why did your originally say it was less than 1% of homes and why now are you saying it is over 6% of homes?

People are forgetting that the reason we're having all the forclosures is due to too many people getting loans they should not have recieved thanks to the CRA.

We had rising housing prices AND increases in the number of homeowners for the past 2 decades. When you increase it above the natural limit through artificial means, there will be problems. The govenrments and the big banks are at fault for this, as well as the stupid people that bought the houses.

I have to say this:

- It's the governments fault for promising big banks money in case people defaulted, thereby okaying predatory lending, thanks to the Community Reinvestment Act of 1995 and 1999.
- It's the banks faults for preying on people, and knowing the assets they held were toxic
- It's the people's faults for buying houses that were too big, too costly, and beyond what they could afford.

In the end, it's everyone's fault. Not just government, because people bought the houses. It's not just banks, because the government incentivized predatory lending. It's not just the people, because these problems didn't exist till government and banks decided to prey on a higher-than-natural home ownership rate.

The fact is, the governments and banks tried to subsidize stupidity. Not everyone can own a home, but they tried to allow it and it's backfired, giving way to a lot of other problems that we're now seeing in the recession.

In the end, I think that the people that bought into it are the most at fault. No one put a gun to my parents heads' and told them to buy a house they couldn't afford. Foreclosures should happen because you can't bankroll bad economic practices, which the government is doing.

If you open the source I gave it shows less than 1% change in the total amount of Vacant homes in 2008-2009. That is why I said less than 1% of homes affected. I was deducing that vacant amount was equal to newly lost homes.

However, you gave a source that said 1.5m was FIRST HALF of 2009, so I took that info and surmised that I still had that covered with 3% but, just in case (after all this is all estimation anyways) you could make it 6% of the total housing market and still be less or same as the money already spent.

While on principle you are right, in reality your reasoning will make things far worse due to the sheer number of foreclosures that have and will continue to happen.

foreclosures in the millions -> banks shutting down -> less money being driven through system -> businesses closing or shrinking by large -> job losses by multitudes of norm -> foreclosures of more homes -> repeat

Unfortunately we cannot dwell on what happened, only on what needs to happen to stop the process from getting worse. That means spending money in the best areas to support the biggest links to ensure money keeps moving and confidence is reestablished.

That's why banks that were already going down were subsidized so healthy banks could buy them and keep their people funded.

That's why the first biggest actions were to stop foreclosures even if the people/banks/government made poor financial decisions in the first place.

That's why the automotive industry is being bailed out as they are crucial point for far too many other markets/companies/people.

It make suck to those of us who did not partake in these poor financial decisions, but it is clearly affecting all of us and will only get worse if we don't help all help fix it.

Only good outcome will be to ensure we don't make the same mistakes and I'm pretty confident that this type of lending practices will not be allowed in the future.

Superchunk, vacant housing can simply be a house built with no owner yet, a multihome home owner selling or renting the home or a dozen other options but it most certainly doesn't mean actual foreclosures.

Also, I never provided any links though I'm assuming you meant NJ5.

And according to his link the first half of 2009 saw "1.5 million properties received a default or auction notice or were seized by banks" which is just an 15% increase from the previous year. Meaning that the first half of 2008 had a total of 1.3 million "properties received a default or auction notice or were seized by banks".

After some research it looks as though 2007 saw about about 2 million foreclosures, 2008 saw 3 million and 2009 could see 5 million.

2007: 2 million x $230k = $460 billion
2008: 3 million x $200k = $600 billion
2009: 5 million x $175k = $875 billion
2010: ? x ? = ?

Current tally for bailout = $1.935 trillion.

superchunk -

Here's the problem though: Why should the government prop up failing mortgages? If the government is spending money to ensure that people keep their jobs, and spending money, wouldn't it be better to do such AFTER the market has leveled out, and they can give a clear response?

Think about it this way:

We've come to this point to have this many foreclosures because prices reached a level that were unsustainable. So to alleviate the pressure, foreclosures began to spring up right and left to drive prices down to a reasonable level.

But instead of letting this take place, the government is (yet again) pumping money into a broke machine. The problem with the logic is that if homeowners made bad choices on buying houses at inflated prices, the only reasonable way to deal with this is to....*gasp* let it go! It's the same thing with the car companies - GM and Chrysler make crappy cars. They needed to go bankrupt, and reorganize, rather than have tens of billions of dollars infused into them.

Now, you may say 'but the jobs will have a trickle down effect and hurt everything else!' - And I agree with that. But we should let the restructuring happen first, BEFORE stimulus occurs. You cannot stimulate that which is dead and rotten. You need to spur growth in good areas, not bad.

That's like the government paying me to keep chain smoking so I can keep the healthcare system afloat. It's not an efficient usage of resources.

@Viper - I think you right. I was definitely not thinking about the numbers correctly. It would cost significantly more. Hmm. Well, it would be about right if it only covered the amount of money the bank/owner is losing due to the reduced value of homes. Maybe that would have been doable based on the amounts we've already spent. idk.

@mrstickball - I fully understand your logic, however, I think by letting it fall first would have been a far more negative result for the people affected and the ripple affect from that then trying to stop the gusher from happening. Obama's way GM/Chrysler still went bk and were able to reorg as needed without the loss of the entire company. Which would have been very detrimental to many other companies as well as thousands more employees that are not out of work right now.

We are funding the needed restructuring now vs waiting to see how bad it gets and then funding it. It makes more sense to do it now and potentially save thousands of jobs than do it later after too many people are on government assistance. Either way the government (i.e. us) are having to pay for a whole bowl of ish that mostly wasn't each of our direct problem. The idea is to affect as little people as possible while doing everything we can to turn around the economy.

Either way, housing prices will still fall to real levels, big corps will still reorganize and the government will still remove the bad policies and add some new ones to try and ensure this situation does not repeat. However, I strongly feel that by funding it now we are allowing far more people remain self sufficient.

Just because I told my child to stop jumping on the couch or he'll fall, doesn't mean that when he does fall I shouldn't comfort him and make it feel better. People make mistakes, unfortunately too many people are thrown into the world without proper financial sense. Buying a house you couldn't really afford once the rates jump up shouldn't mean that your punished now by having to live in your car because you lost your job as well as your house just so the the government (which is supposed to protect every citizen) can buy more F22's.

Help them out, housing prices will eventually go back up and the government will make money on the deal within 10 years.