Comedy gold from the WaPo.
Comedy gold from the WaPo.
I am seeing this *all of the time* now that I am looking for a new home.
So many of the houses are short sales where the residents have not paid in over a year. It is comical (infuriating) that I (we) am paying for this.
But it gets worse. I have been looking at homes where they took 2nd and 3rd mortgages on the house, clearly blew the cash on hookers and blow, and now they are living rent free. They made off like bandits. Put down 100k for a 1M+ house (maybe less), then as the price rises get more money from the bank, enjoy the hookers, and then fight the forclosure since it is "their house, where they have had such good memories".
That's kind of bad.
OTOH, I'm not crying any tears for the banks or the investors. Nor really for the taxpayers, who kept electing the politicians who allowed this mess to happen. None of the parties involved covered themselves with glory in this cluster.
To bring reality into this discussion, most of these houses take forever to foreclose because the loan holder doesn't want to foreclose. If they do that, they have to revalue the house at the new, accurate, collapsed price which screws their balance sheet.
The Maryland processing time is fairly ridiculous, however.
A guy I know rents his apartment from somebody who was foreclosed on. Apparently this has been going on for a year or more. He gets various scary notices plastered on his door all the time. But he likes it because he doesn't have to worry about getting his rent raised because nobody would want to move into such a place.
I admit I'm a bit biased in this, since I have friends who have been foreclosed on for far less than what these folks have done, but it seems to me that some sort of maximum time for the banks for foreclose (in order to finally deal with the reality of their balance sheets) would help with this situation. If the bank isn't willing to foreclose, give the property to the state to sell at auction.
I think this says it all:
There's plenty of blame to spread around in the mortgage crisis & financial collapse, but I have zero sympathy for these guys. Maybe I should put in a bid on the house ... nah, too long of a commute.According to federal prosecutors and court records, Ritter bought real estate and then put the properties in the names of family members. When he fell behind on mortgage payments, he filed for bankruptcy protection in his relatives’ names in various jurisdictions to stop foreclosure proceedings. Then he tried to get the bankruptcy filings dismissed without telling the mortgage lenders. He pleaded guilty in 2000 to bankruptcy fraud and was sentenced to 15 months in federal prison in Petersburg, Va.
Hmm, for the heck of it, I've been perusing some local foreclosres to see if I could get a bigger house for a decent bargain and happened to notice alot of very large local houses that have been in pre-forclosure for quite a while.
The only people preyed upon were the bond holders.
I wish I had gotten in on this scam, free hooker and blow. That.sounds.awesome.
I didn't say they were preyed upon, just that a substantial number of homes stay in that foreclosure limbo because the banks really, really don't want to take the balance sheet hit.
When I was looking at houses last year the other fucking problem we ran into was the fact that the first loan might take the short sale but the 2nd and 3rds said to go fuck off and in two cases actually told us that if we really wanted the house we would have to come up with extra cash to pay down those other loans. Ha fuck that shit.
So is this threatening to become the new "welfare mothers" meme?
I think it's less about a specifically anti-Democratic message like "welfare queens," and more about Republicans channelizing (conservatives') frustration and anger at the financial/property farce at someone, anyone other than the rentier class they serve the interests of.
Like I was saying.
Forced by the harsh realities of the real-estate market, lenders are increasingly likely to allow defaulting owners to remain in their homes — a change in attitude and strategy that is helping to buoy some neighborhoods while further slowing the nation's foreclosure process.
Some lenders are now willing to make deals with owners to let them stay after defaulting, offering to pay home insurance, for example, while the resident pays for utilities.
Other lenders simply look the other way, quietly putting off foreclosure sale dates, knowing that the costs of the ordeal probably exceed the diminishing value of the properties.
They don't pay on their mortgage for 5 years, and I pay cash for my house, out of my hard earned savings, because a bank wouldn't give me a loan (because I'm self employed).
These people are scum. That is all.
Seriously, people generally try to get the best deal that they can. Blaming them for that is irrational. Try to determine why this is happening and what can be changed to stop it.
A clear example is the regulations protecting against foreclosures -- pitched to mush heads these laws need to die in a fire. Also accounting practices probably need to be changed.
Actually, it seems to me that the problem isn't (or certainly isn't just) the regulations protecting against foreclosures. The banks don't want to foreclose on a lot of these houses because it would force them to ... I don't know the formal language, but reevaluate the value of the properties and put the loss on paper.
They really, really don't want to do that. So even in cases where they can foreclose, they're not.
I don't know if that's a healthy thing to allow. Sure, superficially it's good - it's Pareto-optimal for the two parties involved - but I feel like it's verging on fraudulent. Maybe one of the actual economists can weigh in here? The impact of having a system that can be defrauded like that is totally beyond my capability to analyze.
No, hate the people. It's pretty clear from the article that they lack any kind of shame or integrity. If someone pulled this shit my family, they would be looked down on and ostracized, instead of helping their relatives commit various acts of chicanery and deceit. Good lesson they are teaching their kids, too, if they have any.
Why can't we call scum out anymore? It's like anyone can justify any action or course of actions these days by explaining it away as circumstance.
One thing that's interesting about this is that (unless I'm misunderstanding) it's kind of an implementation of the most naive solution to market crashes / panics: what if everybody just pretends it's still worth more than it is, until the market stabilizes a bit. In this case, everybody has a motivation to just stay the course, and by not selling, they're preventing an even deeper drop in prices of other houses by restraining supply. It's kind of a win-win. Note that I'm talking about when the banks voluntary decide not to foreclose, rather than regulations preventing it, which are probably somewhat distortionary influences on the market.
As for whether mark-to-market is a good idea in general, there's good arguments for both sides, and I'm not sure where I sit on the issue.
In conservative land, economic collapse is due to individual personal moral failings. You also totally shouldn't use the perfectly legal routes available to you if it looks bad.
The only liberal on this board who'd agree with that is probably Dawn Falcon.