Top 10 Real Estate Predictions for 2012

The government refinance program, HARP, makes about as much sense as the loan modification program. We all know what a resounding success the loan modification program has been. Not. That's because it's economically ridiculous. It makes sense only to grade school kids and to those whose investment decisions are ruled by the heart and not the head.

The government refinance program doesn't solve the basic problem of over encumbrance. It does not lower the principal balance of the loan. In fact, it increases the amount owed. How does that make sense to any rational person? The government has got to reduce the principal balance or homeowners will eventually default.

Lowering a homeowner's payments provides only temporary relief. It does not solve the underlying problem that these homes are worth less than the amount borrowed. A HARP refinance is a foreclosure waiting to happen.

_{At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.}