Saturday, October 24, 2009

Modern feudalism

"The number of properties on the market may be much larger than anyone thought and appears likely to swamp South Florida with more deeply discounted homes, clouding the prospects for a housing recovery. Figures from the Florida Association of Realtors released Friday show that South Florida's median home prices have stabilized over the past several months and sales are up year-over-year as the number of properties on the market shrinks. But an analysis of the so-called shadow market done for The Miami Herald suggests the number of homes and condos in the pipeline to come on the market in South Florida is nearly five times larger than all residential properties currently listed for sale by Realtors. LPS Applied Analytics, a firm that supplies loan data to the federal government, did the analysis on the shadow market, which refers to properties that will eventually be listed for sale -- because they are about to enter foreclosure, are in foreclosure or already owned by banks."

We've entered a period of modern near-feudalism - - people are tied to their property (by upside down mortgages, rather than by the local lord), and are unable to move without facing dire financial consequences.

The biggest domestic mistake of the Obama administration so far was to bail out the mortgagees (the banks) rather than the mortgagors (the upside down home owners). Who would have thought the new Democratic administration would have trusted aid to the banks to "trickle down" to the borrowers?

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