Is it any wonder that housing is a trainwreck?
Here on RR, we’ve talked about how banks ran amuck with mortgage paperwork, causing grief to thousands of families.
They even foreclosed on homes that were completely paid off!
Taxpayers bailed out banks, only to find that the banks are now raking in huge profits – while refusing to write mortgages for qualified families that need them.
In my book – Fanny and Freddie are “Incestuous Incompetents”. Those knuckleheads are costing taxpayers billions in losses each year with no end in sight.
Look, you didn’t have to be clairvoyant to see the bubble coming in 2008. What really bothers me is that these “highly compensated, highly educated men and women” certainly knew the what they were doing. They recognized the consequences of their action and they didn’t give a rat’s behind as long as their highly compensated status continued unabated. It’s all about the “bonuses”, baby!
Robo-signing scandals turned foreclosures on their ear.
Robo-signing is exactly what you think it is – some poor slob just signing paper after paper (usually for someone else) , without looking at (or verifying) the contents.
Banks seldom have the original paperwork that defines WHO actually owns your home.
“My lawyer asked my bank to produce an affidavit that entitled them to foreclose,” said a client of Brown’s, who lives in Harlem and also asked to remain anonymous. “They couldn’t do it.”
The case was dismissed (many of these are) without prejudice – although the lender can (and will) try again — if and when it finds the right paperwork.
These delays and “legal tricks of the trade” are harming the housing market – a market that is already operating on fumes. Everyone loses. In many cases, people who stay in homes undergoing foreclosure for years often don’t maintain the properties, because they no longer own (or have any intention of owning) the property, lowering property values in the surrounding neighborhoods.
There’s no doubt that we need banking reform. The system HAS derailed…
It’s not just the banks, folks. Three things happened simultaneously:
- a housing bubble,
- a collapse in lending standards, and
- a global liquidity panic when markets lost trust in the solvency of financial institutions.
We still don’t have consistent and coherent stabilization of the financial sector or anything resembling a fix of its bad incentives.
And please don’t kid yourself into believing the media hype that that all the lawsuits we’re seeing now are the beginning of a “reform effort”.
It’s just a sideshow, crafted by “Congressional Carnival Barkers” looking for votes…
But it doesn’t stop there.
The face of America is changing, from hard-working middle class families…
… into people taking advantage of loopholes in order to get a free ride.
There are lot’s of reasons that people aren’t paying their mortgages;
- They lost their jobs,
- They’re underwater in their mortgage as property values plummet,
- They bought more home than they could afford,
They know that they can play the system and live in a nice home, for free.
Case in point:
Did you know that nationally, the average time it takes to process a foreclosure — from the first missed payment to the final foreclosure auction — has climbed to 674 days from 253 days just four years ago?
This is backed up by statistics compiled by LPS Applied Analytics.
The AVERAGE Foreclosure can take 1.8 YEARS after payments stop getting made on a home.
It takes much longer than that in Florida, where the process averages 1,027 days, nearly 3 years. In D.C., foreclosure averages 1,053 days and delinquent borrowers in New York often stay in their homes for an average of 906 days.
Many of these homeowners are staying in their homes based on a loophole, a legal trick or a technicality.
“There is rarely any dispute over whether or not they have stopped paying their mortgage…”
… said David Dunn, a partner at law firm Hogan Lovells in New York, who represents banks and other financial institutions in foreclosure cases.
“In my experience, they never say, ‘I’m not delinquent’ or ‘I want to pay my bill but I’m confused over who to send it to,’ or ‘Oh my God, you mean I didn’t pay my mortgage?’ They’re not in technical default. They’re in default because they’re not paying,” he said.
In “everyday America”, it’s become acceptable not to pay your bills, simply “because you don’t want to”…
In fact I hear people cheering each other on and sharing tips about how to skate.
“I have an out… I found a loophole! Stick it to the man…”
I recently read this, from some jerk named “Gerald” bragging about HOW he was screwing the banks and all of US:
This has been a real boom for myself and my family. I stopped paying on my primary residence, as well as two apartment buildings that I own. My tenants have continued paying the rent, with a couple of exceptions that I was able to chase out..(Note that while he’s a willing deadbeat, he’s quick to get rid of renters doing likewise…).With the money I saved, I was able to purchase 2 other rental properties that were distressed sales. Because of the nature of the sales, I was able to pay in full for the properties with cash..At this point, I really don’t care if they foreclose on my original properties. This whole situation has really been a blessing to my family. The rent checks I receive now go directly into a college fund for my children, as well as a nice winter vacation for my wife and I in Florida..Life is good!
They seem to forget that ultimately, Congress doesn’t take responsibility for anything. They just shift the load to the taxpayer’s backs… backs that are already strained.
Um… Isn’t that part of HOW America found itself in the sorry predicament it’s in?
I’m getting email from families that want to build ISBU homes that have stopped paying their mortgages… simply because they no longer feel like “it’s required”…
“Why should I pay? My property values are falling. My neighbors aren’t paying their mortgages either!”
I send them away.
If their ethics allow them to turn their backs on their own honor, I don’t want to reward them for it by helping them build an ISBU home. Sure, they get mad. So what? If we’re measured by our friends, I want to know that mine are at least reliable.
And don’t get me started on “sniffing the rotten apple of Moral Leadership”.
People emulate what they see…
… and what we’re seeing coming out of the Beltway is “people scrambling to put a good spin on broken eggs served up with a side of broken promises”.
As this New Year dawns, I ask each of you to think about where you live, HOW you live, and how it’s reflected on (or AT) by your neighbors.
Even IF you are doing everything right – being responsible and reliable, even accountable – your neighbors can cause you grief and there’s not a thing that you can do about it.
Yet another reason to think strongly about building that Corten Castle in the foothills, mortgage free and ready to stand the test of time.
As Americans prepare for the 2012 elections, we don’t know WHAT is on the horizon.
Many of our RR families are building homes to allow them more independence, more safety and more peace of mind, as the economy, unemployment, inflation and hardship embrace America in icy clutches.
Anyone who says that they can predict the future… is probably nuts. That ranks right up there with people who claim they’re building “hurricane-proof homes”…
But what we do know is that our responsibility is to keep our families safe from harm…
As we begin the New Year, let’s be careful out there…