The Observation Deck

James,

I hear what you are saying and I too know people that have cleaned up with great deals and I am happy for them.

But I question what that is doing to property value. When a normally $200,000 home sells at auction for $100,000 which is what the bank needs to recoup their cost, why would anyone pay the $200,000 for the home down the block? The person down the block who is selling their home has to drop the price, okay maybe not to $100,000 but lower than 200,000. That causes the property value to drop.

If residents are smart - which I contend they are - they will eventually ask the county to lower their property value on which they pay tax. So the city and schools wil start to feel the pinch as the county is forced to lower property values.

For most of us, our home is our most important investment. Keeping the property value up is important. This is another good reason to try to help the home owner to work with the bank to save their home.

Lynn,

In my personal case, I did not petition the county to lower my property value. I felt that the county appraisal value gave me a nice nest egg of equity if I ever needed it. I understand what you are saying though, and I am sure many people are having the valued lower. On the other side, as a realtor when I do a compartive market analysis for a buyer or a seller on the home they are going to sell or buy, I throw out all the bank owned homes because they are not comparable. I know most realtors do the same. I do think property values have fallen, but I am not sure it is because of all the foreclosures solely, but because of how much inventory is available.

I agree that Banks should make an attempt to work with owners of homes that want to be worked with. My fear is that most people don't want to work and fight for their home, they would rather trash it and move on. Again, I would encourage anyone to take a look a 10 bank owned homes and see the condition the former owner left the home in.

James,

I think you may be right when people are upside down on their mortgagaes, but that isn't the case here in Lakewood. That is more the problem in California.

Imagine someone that has made payments for 20 years, have the equity built up in their homes and now are missing a payment. That person should be fighting hard for the equity in their home - that is their nest egg. I'm not sure if people know how to fight - or if they are waiting to fight until it is too late. But it doesn't help if we shorten the window that they have to solve the problem.

You indicate that you didn't petition. But doesn't the county automatically adjust to the sales price? I know it does when the price goes up. Maybe not immediately - but soon. And don't banks utilize real estate agents so that it would look just like a regular sale to the county?

You may be throwing out the comparables in sales - but the market isn't completely. Lots of people are waiting for the way below market foreclosures which is one factor in why homes aren't moving quickly.

Just more to think about.

James Mullen wrote: My fear is that most people don't want to work and fight for their home, they would rather trash it and move on. Again, I would encourage anyone to take a look a 10 bank owned homes and see the condition the former owner left the home in.

You hit the nail on the head.

Most foreclosures happen because people no longer want the house. In most cases they are making the right economic decision. Why own a house that is worth less than what you owe? Especially since we all know that two or three years from now anyone that walked away from a mortgage will have no trouble at all in getting a mortgage.

Can you imagine any politician stating "If you lost a house due to a foreclosure you are just going to have fix your credit, pay your debts and save for the future. It's not the governments job to help you buy a house. "?

As to the condition of bank owned homes: I've seen plenty and in most cases they are an absolute disgrace. And the bank didn't do the damage. The "poor" homeowner did the damage. If not through malice then through neglect. Not everyone should own a home. The first clue someone shouldn't own a house? The house they "own" is in foreclosure.

And anyway, most homes in foreclosure aren't owned by the "homeowner". In this case the word homeowner is a misnomer. The proper term is more like renttoowner, or sharecropper, or lessee
or whatever but not homeowner.

For everyone statement you made about the foreclosed homes, some of us know that this is not always the case. Each case is unique.

I can take you to two right now that were left in much better shape then when the owner, not sharecropper, first acquired the property.

There are a million stories in the naked city.

Bill,

I often agree with you. I actually am a big believer in the free market system. I am kind of a compassionate libertarian . So if that is the case, The market would punish the company's that made bad loans and they would learn and not do it again. But that isn't what is happening.

We are bailing out the banks, lowering interest and screwing up the American dollar for this. But the banks aren't making the credit available. Congressman Franks is looking into this.

In the meantime we are punishing the consumer. I hear Jim say, we have to bail out Bear Sterns. They are too big. Perhaps he is right. But then so are the hundreds of thousands of people across the country who will be losing their homes. Individually they may only be significant to their families - but combined they are huge.

Ben Bernacke isn't a politician and I do believe he knows a great deal more about economics and has seen more models of the economic problems if we speed up the foreclosures than our council has. Maybe he knows more about this problem than the Lakewood City Council does.

I disagree with you that the majority of people want foreclosed on. Maybe there are people with upside down mortgages in California, maybe even a few here in Lakewood, but that isn't the case to the same degree in Lakewood.

Sharon is right. Of course there are a few people who are better off walking away from a bad loan. But I would venture to say there are more in Lakewood who want to save their home but don't know how. Of course there are people who have been ticked off about losing their homes and have trashed them. But there are people who haven't as well.

Maybe this needs to be handled on an individual basis - but that is a little hard when the banker is located in China or Saudi Arabia or wherever our bankers are located these days, since fewer and fewer are located in our country any more - but that is a different problem.

I'm not saying there aren't problems here that need to be resolved - there are lots of them. I just question why of all things that Lakewood wants to buck the national trend and speed up foreclosures when the rest of the nation is trying to solve the problem and come up with workable solutions for many of these people.

Seems to me that we can leave those problems to the economic experts who are addressing the problem nationally.

Maybe we could focus on Lakewood specific problems, which council is uniquely qualified to do. And I think they are doing quite well.