The Big Question Is That Has Foreclosures Finally Peaked

Posted in Foreclosures, December 20th, 2007 |

Statistics is pouring in. Analysis varies Foreclosure numbers fell in November from what it was in October making many opine that the peak has been reached and the process of climbing down has begun. Has the market found something to stand on? According to predictions ‘about $500 billion in adjustable-rate-mortgages are due to reset at higher levels in 2008’.

Perhaps it is too early to be optimistic. This fourth quarter is going to be a trial for many what with fuel prices rising and house prices falling. Some consumers have tricked the gloomy predictions of the economists and somehow managed to save their houses. People are thinking before splurging. According to figures households earning less than $50,000 are not spending as much as they used to during Christmas in previous years. Only those with incomes above $100,000 are keepings sales counters running. But the majority of those in the sub-prime cannot cut enough to survive and yet save their houses.

If the study reports are that foreclosures are falling because of people saving then too it is not good news for all. It means a fall in sale of cars and spending with the credit card. That would now have negative impact on the general economy. A slowing down of consumer activity would help the foreclosure front but disable the GDP on another point. There is not much of a choice between skipping Christmas and keeping the house!

These questions keep going round and round.. For those facing foreclosures, for those having faced it and living in cramped quarters or state homes, for those surrounded by abandoned houses there is no time to wait for answers to come in for tomorrow’s solution. The ship is sinking and the positive point is that all are going down and therefore the lenders too are bestirring themselves to do something. The same holds true for the government that looks aghast at the disgruntled electorate rising by the numbers. Nothing will happen overnight. The soil of a land scorched by fires gets rejuvenated and rich to bring forth a new rich harvest. So too perhaps the nation and the world needed this lesson that thrift pays. The debt culture has been the curse. It has brought about a complete change in values. Economy is not plastic money or facts and figures – it is the people; people with values.