The US housing market continues its inexorable crawl back from the bottom of the pit. The best news of late is that California experienced a double digit percentage increase in home prices recently. However, there are at least three reasons for concern in my view:
- The homebuyer tax credit expires April 30th if a buyer doesn’t have a signed contract on a new home and June 30th if the purchase is not closed. There’s no indication that another extension of the tax credit is being considered and a lot of indication that the last extension didn’t help much.
- The Federal Reserve will end its $1.25 trillion mortgage backed security purchase program this week.
- And finally, my reason for this post. The WSJ has run a couple of articles about Bank fo America’s accidental takings of two homes. In one case, a contractor for the bank that secures and maintains homes that go into foreclosures entered a home, changed the locks and took the absent owner’s pet parrot. The only problem was that the house wasn’t in foreclosure or headed that way. The scene was repeated shortly, thereafter, at another home that had been previously foreclosed by BofA but resold to a new owner who was preparing the home for move-in. What surprised me was this paragraph from the WSJ article:
“A BofA spokesman said such errors are rare, “particularly when considering we now inspect and maintain more than one million homes and secure about 16,000 properties each month.” But, he said, “we believe no errors is the only acceptable goal.” The bank is “working aggressively to improve our process through formal training, enhanced checklists and improved communication,” the spokesman said.”
BofA owns over 1 million homes! If that’s not a big hurdle standing in the way of a housing recovery, I don’t know what is.