Economy

Everyone knows that home values are plummeting all over the nation, foreclosure rates have skyrocketed and people are walking away from their homes as a result. People are choosing to hand over the keys on their over-priced homes - especially when they're underwater mortgages - and leaving banks to clean up the mess and take the losses. And it's not just homes in middle-class or lower-middle class neighborhoods, either - decaying foreclosed homes are now a common sight in those expensive exurb developments that sprouted up in just about every state in the nation. But what most people don't realize is that now even the banks are walking away from foreclosed homes, because they've lost so much value that they're simply not interested in repossessing them and trying to resell them at losses. Instead, banks are canceling foreclosed home auctions and handing the keys back to surprised owners.

Bank walkaways are nothing new, but have always been exceedingly rare. Nowadays, however, the bottom just keeps falling out on the housing market in many parts of the nation, especially in older, poorer neighborhoods which saw home values rise somewhat with the speculative bubble, but were the first to plummet when the bubble burst. In fact, the decline in property values in these communities predates the current real estate collapse, and in hindsight might even be seen as early warning signs that the boom times were about to come to a crashing halt.

When a mortgage holder can't make their payments anymore, the banks foreclose on the home, notify the owner that he or she must leave, and then take possession of the foreclosed home in order to sell it and recoup some of their losses on the bad loan. Owners can either leave or refinance their underwater mortgage. That's the way things are normally done, at least. When the bank forecloses on the home and then walks away, the owner is left holding the bag again - and by the time the abandoned property comes back to them it's almost always a wreck. In some cases, the only thing left to do with it is demolish it - and the bill for that will be given to the homeowner too.They are also typically responsible for maintenance fees. To combat banks walking away and leaving homes vandalized and decrepit, cities are suing banks to clean up their properties and are winning. Cities are arguing that if people cannot afford to pay their mortgages, they of course will not be able to pay for the upkeep of the property. When homes are turned over to the banks, it's their responsibility.

Foreclosures are by definition unfortunate events, but they also represent opportunities for people who are looking for great bargains. Is there a high rate of foreclosures in your area, and if so, are people moving quickly to take advantage of them? .

Two of America's biggest auto manufacturers have been told in no uncertain terms that they must make massive structural changes in the way they do business if they are to continue receiving government support. General Motors and Chrysler, which together employ millions of Americans, are both in severe financial trouble and have had to come to Washington for loans in order to stay afloat. Considered "too big to fail," these companies have received billions of dollars in government support while they come up with plans to restructure themselves into solvency and profitability. On Monday, March 30, President Barack Obama informed GM and Chrysler that their restructuring plans were inadequate, and that they had 60 days and 30 days, respectively, to come up with new plans or face the loss of federal support, which would effectively force them into bankruptcy. In a related move that surprised many with its suddenness, President Obama also insisted that GM CEO Rick Wagoner step down.

Big 3 in Decline for Years

Many analysts believe that the American auto industry has been in decline for years, and all its inefficiencies and lack of creative vision have finally caught up to the manufacturers. The Big Three - GM, Ford and Chrysler - have all reported drops in automobile sales that are so steep and so severe that they won't be able to survive without government intervention.

Why the American Auto Manufacturing Failed

Is it the long-held view that American cars are inferior in quality to their foreign equivalents? Have auto union workers demanded too much, and saddled their employers with unsustainable costs? Is the overall management mentality in Detroit archaic, uncreative, backward-thinking, and just not cutting-edge enough? Or is the economic crisis so severe that people are either unwilling to buy new cars, or unable to do so even if they wanted to, now that there is practically no credit anywhere? A forensic analysis of what killed the American automobile industry - if it does indeed die - won't be possible for a few years to come, of course, but the culprit could be one or all of the oft-heard complaints listed above.

Best Auto Deals Ever

If find yourself in a position of personal liquidity, in contrast to Detroit, now would be the best time to purchase a vehicle. Dealerships across the nation are offering unprecedented discounts, assurances, incentives, and auto financing options for qualified buyers. The government has also offered tax incentives for new car buyers, including hybrids, in order to spur new car sales. There are deals to be had across all makes and models, including luxury makes and exotics.

Are you looking to purchase a car soon? How has the dealership experience been for you?

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