John Burns stopped by last week to talk to The Real Story about some of the issues that just don’t seem to go away in this prolonged recession…from consumer debt to FICO scores to foreclosures in the pipeline to the pleasure of purchasing a new home.
Where to start? John jumped right in on the subject of consumer debt, which he has charted as being as high as 50 to 60 percent of some consumers’ gross salaries, as a result, he says of Americans applying “the right to buy whatever the heck we want”. Consumers aren’t alone in their profligate spending, he reminds us—they have the government and business leaders to model themselves after.
He shared a shocking statistic—that currently approximately 5 million Americans are living in homes that they have not made a payment on in the last 90 days. Whether that number is an indicator of how slowly the foreclosure process is moving, how many people are playing the system, or how frustrated folks are at not being able to hear back from their lender, it is a whopping number of mortgage delinquencies that are yet to be dealt with.
John also defends Fannie Mae and Freddie Mac’s performance. He points out that since Fannie Mae was created in the 1930’s to create mortgage liquidity during THAT economic crisis, it is actually doing what is was supposed to do. He opines that had Fannie Mae had not been lending so aggressively, home prices could have fallen even further.
More from John today and every day this week, available on iTunes.