Foreclosures are good.
1. They are the legal mechanism for getting a family out of a contract that requires paying a mortgage that they cannot afford. It is cruel and counter productive to let them stay in a home that is beyond their means if they are trying to pay more than they can afford and falling behind. It is immoral to keep the bank from taking the property that was pledged to a loan if the family is strategically defaulting as a choice in the hope that the bank will have no recourse.
2. Foreclosures clear out the non-performing loans and allow us to put the housing bubble and the resulting crisis behind us so that financial and real estate markets can return to normal.
3. Government interference with contract law reduces business trust in the legal mechanism for enforcing contracts, increasing uncertainty and increasing costs. Business passes these costs on to all mortgage holders rather than just to those who create those costs by buying beyond their means.
As you know, their line of reasoning is that ANYONE is entitled to what a landlord owns.
Government interferance is coming in this area because the vast majority of foreclosures are by banks that were never actually the lenders ,, they were simply a conduit/straw man for the true lenders on Wall Street. The banks foreclosing are in fact getting a “free house” that they never had an interest in. This is also why only a very small number of loan modifications are becoming permanent ,, the banks aren’t the true lender in the transaction and cannot legally modify the terms. This is one big reason why people are allowing themselves to “strategically default” ,, they know the truth and quite simply their loan docs are invalid as the true lender is not on them,, a MASSIVE TILA breach where the only remedy is recission... the worst that will happen to the informed defaulters is a few legal bills before they get the house free and clear when the bank fraud is broomed away.
Foreclosed home = affordable housing