Foreclosures on the Rise

By Varney and Co

Third quarter foreclosures shot up 19% in California, and despite multiple bailout plans, nothing seems to be working for the Golden State. It’s the first time California has logged an increase in foreclosures since hitting a peak early last year. The failure of government programs are beginning to pile up, leaving Americans with limited options. Wealth Manager Ed Butowsky joined Varney & Co. this morning to share his opinion.

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“A lot of people right now are looking for deals,” said Butowsky. “They’re always looking for deals and the old saying in real estate is ‘you make your money when you buy.’” Some Americans looking to buy homes are holding off, waiting for the real estate market to hit rock bottom, although there’s no telling when that will be. A total of 83,261 default notices were filed against California properties in the third quarter.

“What I do not understand is why in the world the [government] is not changing certain policies,” said Butowsky. “We talk about more bailouts and more bailouts, why don’t we change something, like cut taxes and stimulate the economy. That gets more jobs, and when you get more jobs, there’s more money. Then we have fewer foreclosures and real estate prices will go up again.”

It’s too early to tell whether the third quarter increase represents a further decline in a homeowner’s ability to pay mortgages, but Americans are taking the news with caution and questioning the government’s role in the market. Whether the country will see less foreclosures and higher real estate prices in the near future is up for debate.

Ed Butowsky’s advice on how to turn the economy around: “I completely favor a free market, and to what level and to what the situations are, I completely believe, and so do my clients, you have to let the market be free. Otherwise, what have we become?”