Housing Values Drop, Sting Bank Stocks

The steep losses on sales of foreclosed homes are painful for banks and investors in the short run but should help clear the backlog. That would allow for an eventual recovery of the housing market and clean up the banks' balance sheets.

One example of the deep price cuts on foreclosures: A 1,230-square-foot home in Corona, Calif., was sold by a unit of investment bank Credit Suisse in June for $198,000, down from $450,000 when the property sold in a regular transaction in December 2006.

"I do not think this is the time to be holding onto [foreclosed homes] and hoping for a better day," Daniel Mudd, chief executive of Fannie Mae, said during a conference call Friday.

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Comments

[JoeBlough]

Correct me if I'm wrong, but wasn't it de-regulation that allowed housing prices to shoot up so high, so fast? I didn't hear people complaining when they were making vast sums of money over sales.

[aBr1t]

as left said the problem is the price was to high due to greed..

We have the same problem in the UK our houses are so high no one can buy one or even get on the ladder, its about time the prices came down.

hope the greedy men are full !! and very skint :p

avrage price for a house in the uk is 180k... very silly

[JoeBlough]

The current steep losses balance out the previous steep gains. All is right with the world. It will even out.

[leftLibertarian]

This is good news. Houses are vastly overpriced in most parts of America.

[darthdarcy]

The Republican fetish to deregulate every aspect of our economy is the cause of all this financial disaster our nation is suffering under..!

Until we reestablish regulations there will be no confidence in America's financial system and solvency from Oil and Gas prices to our banking and we shall see our dollar ever more worthless..!

The Republicans have brought so much harm to our great nation and now they may bring us to devastation saber rattling with Russia and pushing us closer and closer to another needless wasteful and possibly fatal War..!

Our failure to Impeach Bush and Cheney and uphold the rule of law and Constitution may very well be our demise...!

[leftLibertarian]

It takes two to bring about this mess so add the Democrats to your list.

[Stretchumall]

This begs the question, Do you keep paying on your over priced home or, do you let it go and buy a cheaper forclosed home that is comparable to your current home?
Either way it would appear the situation will get worse.

Stretchumall