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Archive for the ‘mortgage’ Category

Why Banks Are Using Bulldozers on Foreclosed Homes | The …

curiouscapitalist.blogs.time.com8/1/11

UPDATED (5:29 PM) Banks have a new remedy for America's ailing housing market: bulldozers. There are nearly 1.7 million homes in the U.S. in some state of foreclosure. Banks already own some of these homes and will …

Council to bulldoze 175 homes in Gateshead – Chronicle News …

www.chroniclelive.co.uk12/6/11

YET more families are being forced from their homes as Gateshead Council flattens a third housing estate.

The growing number of abandoned properties across the country has caused property values and tax revenues to drop substantially, which in turn has led to fewer buyers and a growing number of vacant properties.

As of March 31, about 4 million homes had been empty for at least three months, a higher figure than in 2008, and about 3% of all U.S. homes.

Many cities and States, are themselves struggling with potential bankruptcy, and they’re finding it difficult to pay the firemen and policeman who are expected to deal with the increasing number of abandoned homes.

All is not doom and gloom however, and an innovative solution is now rapidly spreading across the country which entails local governments bulldozing abandoned properties, and using the newly reclaimed land for parks and playgrounds.

It’s a seemingly win-win situation, because it not only pleases local residents, but also creates jobs, and the icing on the cake is that the federal government is funding the action.

Last summer, Congress allocated $3.9 billion in emergency funds for cities to acquire and rehabilitate foreclosed properties, and a further $2 billion was assigned after Cleveland and other cities lobbied Congress.

In fact, Cleveland, which has over 10,000 abandoned homes, says it will use more than half of its $25.5 million stabilization fund to demolish more than 1,700 houses.

In addition to Cleveland, Cincinnati, Detroit, Minneapolis and Youngstown all say they have plans to use at least one-third of their neighborhood-stabilization funds for demolition.

Housing supply presently stands at about nine months, which is almost double the historic level of around five months, and approximately one in four home-buyers is in arrears on their mortgages, both of which sadly suggest the appearance of more and more abandoned homes, but happily, more jobs and more parks and playgrounds.

Supply-Side Economics | The CERF Blog

www.clucerf.org1/10/12

As early as the 1950s, Mundell proposed an economic policy program of tight monetary policy to stabilize the value of the currency and low tax rates to stimulate economic activity. During the late … The Reagan Scenario included a sharp drop in inflation, a recession in 1982 due to tight monetary policy, passage of the Kemp Roth tax cuts and an economic boom starting in 1983. … Inflation and interest rates are much lower and tax rates are lower as well. While a high …

The hidden dangers of low interest rates | David Cay Johnston

blogs.reuters.com1/10/12

Low rates also come at a cost, cutting income to older Americans and to pension funds. This forces retirees to eat into principal, may put more pressure on welfare programs for the elderly, and … If rates return to, say, 6.64 percent, the level they were in 2000, one year's interest costs would equal the individual income taxes for all of 2011 plus the first few weeks of 2012. Last week , rates took a step in that direction. The yield on the 10-year bond, a benchmark for other …

President Obama’s recent claim to homeowners, that refinancing their mortgage loans at a lower rate, equates to a tax cut, doesn’t ring true for many tax experts.

Obama said at a recent press conference that the housing plan his administration had launched, had “already contributed to a spike in the number of homeowners who are refinancing their mortgages, which is the equivalent of another tax cut. The main message we want to send today is that there are 7 to 9 million people across the country who right now could be taking advantage of lower mortgage rates and that is money in their pocket”.

What Obama failed to mention however is that unlike the housing boom that led to the current financial crisis, this time, only borrowers with strong credit ratings and stable jobs will be able to save money if they refinance.

Obama’s announcement caused many tax analysts, including Gil Charney, who is an analyst for The Tax Institute at H&R Block to shout “foul”;

“While there could be overall savings by refinancing and lower monthly payments, there also could be reduced tax benefits as less interest is paid. Also refinancing could extend the period before the mortgage is fully paid off, so this might not be desirable for someone who wants to be mortgage-free. Therefore, someone about to make a financial decision should take their complete financial picture into account, not just their tax situation”.

In fairness to Obama, some analysts like Mark Steber, who is vice president of tax resources at Jackson Hewitt Tax Service did express a more supportive viewpoint, “While generally there is no tax advantage to refinancing at a lower rate, an individual can save on the total out of pocket costs each year over the life of the loan. Though a tax bill will actually increase after refinancing, the increase in taxes may be less than half of the total difference in interest paid, so the taxpayer may save more money than their taxes increase, therefore resulting in net savings”.