I have been a developer of residential housing for well over a decade now and it’s my personal belief that even after two years we’ve still yet to witness the full scope of the fallout.  Hi, I’m Isaac Toussie, and I would like to use this space on your screen to share some of the views I have come to possess, a perspective not always shared by many in the mainstream media.  But first, you should know that I have written this article in the interests of airing some of my very personal opinions on an industry that has buttered my bread for several years.  Nothing, however, should be construed as professional advice of any kind.  Readers should consult the relevant professionals when making any important decisions.

Now as concerns mortgage delinquency, you should know that according to a recent industry survey, the rate at which mortgage payments have fallen behind has slowed down a little during the fourth quarter of 2009.  This was surprising to many because delinquency traditionally rises during the last three months of the year on account of all the expenses brought about by winter and the holidays.  I certainly hope that this unexpected development means that the foreclosure crisis may be finally coming around to an end, but it’s doubtful because  the overall picture is still quite dire and there are still record numbers of homeowners in financial distress.  Many economists say that foreclosures could reach their highest levels ever by year’s end, especially if unemployment rates peak in the middle of the year.  Even worse, foreclosure rates are expected to remain at just those higher levels as borrowers continue to struggle in those regions afflicted by the kind of drastic price declines that render homes worth less than the money owed on them.

In recognition, the government has again stepped in on behalf of those with little or no equity in their homes.  It has recently announced an additional five and a half billion dollars in aid, with funds directed to states such as California and Florida, which data show to be where the majority of the troubled loans were made.  But because this merely extends an existing refinancing program that has reported little progress in over a year, many experts are skeptical.  In fact, it’s been well over two years after the economic debacle and still there is no evidence that a recovery is around the corner.  Indeed, many borrowers have problematic situations that do not easily lend themselves to tidy remedies.  The core issue concerns cases where at least three payments have been missed, for these involve precisely those people who are least served by the broad range of mortgage relief programs available.  These are the ones most likely to go into foreclosure in the near future.  For many of these people, refinancing costs can eat away at any savings made on lower interest rates, making the whole effort not very worthwhile, particularly when the borrower is at risk of further financial difficulties such as being laid off.