Vice President Joe Biden said the current administration may have miscalculated the jobless problem facing America, as to how bad it would be. Another stimulus plan would mean more Treasury auctions. You know from my previous posts that Treasury auctions can take money away from bonds and increase mortgage rates. A new plan would also cause inflationary problems which would also mean higher rates.
Many Banks that held off on foreclosing on delinquent mortgages are now planning to move forward. A lot of banks held off because they signed up for Obama’s Home Stability Plan, but reports show that a large amount of the loans that have been modified by the lender are still delinquent. People are still not paying their mortgages, even after modifications go through. Not only does this clog up the modification departments for those who want help and would pay, but it tells the lenders the pograms don’t work and perhaps foreclosure is the way to go. Either way, a new wave of foreclosures is on the horizon and this will depress home values further. This is good news if you are in the market to buy.
