Posted on 10/08/2010 3:28:48 PM PDT by Palter
What do you think will happen?
It is more hue and series than we can imagine.
http://mattweidnerlaw.com/blog/2010/10/the-answer-to-floridas-foreclosure-crisis-florida-statute-69-021/
http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0000-0099/0069/0069.html
Atlas begins to shrug. I love it.
The FSA and farm lenders did the same thing coming out of the ag collapse in the mid-80’s.
There are solutions, tried and true, out there. We’ve been down this road before. There are other nations that have been down this road before.
The only thing holding us back from implementing these solutions is that they all require ONE thing in common:
The bankers lose.
We need to amend your statement: “in a non-recourse state.”
In states that are “recourse” states, the bank can still come after you for the portion of the mortgage that isn’t satisfied by selling the property.
I don’t think the bankers have much choice ,, lose legitimately in court based on their incompetence in maintaining a chain of ownership ,,, or mass civil disobedience ,, nobody pays.
Just as a curious sidenote ... you may wonder how all the famous bank robbers in the midwest survived without being caught for so many years ,, John Dillinger , Bonnie and Clyde and others.. the answer was civil disobedience ,, their neighbors all cheered them on ... you see they not only stole cash from the banks but demanded the mortgages from the vault... they carried the notes out of town and burned them.. You didn’t dare stop someone that was about to give you your farm free and clear... People today are getting to that same point.. I for one would have no qualms about hanging Lloyd Blankfein at a major entrance to Manhattan for all to see.
In states that are “recourse” states, the bank can still come after you for the portion of the mortgage that isn’t satisfied by selling the property.
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The fun thing in that case would be to get discovery to see what insurance / swap / secondary yield spread ,,, etc. etc... they pocketed that could be credited to your “shortfall”.
In all the cases I’m talking about, the bankers lost as a result of their own incompetence and the legal system. In Sweden, the government basically said “OK, you need the government to backstop your liabilities and deposits. We will do this. There is a price: We take you over.”
And the Swedes proceeded to kick out the old management, gave the shareholders nothing, gave the bondholders a haircut, then they waded into the banks’ accounting, pulled out the crap loans into a crap company that was selling speculative debt, put all the good debt back into the banks and re-privatized them.
People in the US, and especially conservatives, are loathe to even consider such a plan, but right now, what we have is the worst of all possible worlds: socialization of losses and liabilities, and private capture of the gains.
There should be a hard-and-fast rule about bailing out bankers, which goes back to Bagehot’s principle of central banks of “last reserve” and backstopping banks in trouble: “Lend freely, at punitive rates.” In other words, when the bankers got into trouble, if they needed a quick infusion of cash from the Fed, the Fed should have charged them, oh, 10% minimum. Instead the interest being charged is so low as to be trivial. Even Buffett bailed out Goldman for only 10% yield. If I had been in Buffett’s position, I would have asked for at least 15%. The federal reserve and treasury were not even approaching the level of profit required by Buffett.
Well, if we’re not going to ask for a hefty profit on backstopping the banks, then we should demand control. And the way to get control is “OK, you screwed up. You need us to step in. That means you step *out*. We’re going to install some adult supervision now.”
The one wrinkle in this plan is that government and banking are both infested with Ivy League graduates, all of whom are as thick as thieves and all perfectly happy to screw the common man and woman in the US.
As for the times of the 30’s: Yes, that was true. In short order, I expect the banks will have painted themselves into a political corner so tightly that there will be no way out for them in the future.
I think we must demand adherence to the Constitution for the United States of America without fail.
"Banks have done more injury to the religion, morality, tranquility, prosperity, and even wealth of the nation than they can have done or ever will do good."
John Adams (1735-1826) Founding Father, 2nd US President
(misinformed "Deadbeat" advocate, Acorn mouthpiece, and CRA sponsor??)
The one wrinkle in this plan is that government and banking are both infested with Ivy League graduates, all of whom are as thick as thieves and all perfectly happy to screw the common man and woman in the US.
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The solution may come from the courts but it will be fought all the way by the administration for the reason you noted. Obama certainly has fed the banksters a sizable banquet and he needs them on board for a Chavez style full takeover... he won’t give them up easily.
The three major lenders involved in this foreclosure documentation mess are ALSO involved in this loan modification mess:
Obama Mortgage Modification Bailout Distorts Housing Market:
Because loan modifications can be lucrative for lenders, HAMP has created a new pattern of aggressive - and at times ethically-challenged - behavior among banks, any number of whom themselves have been TARP beneficiaries. And it may explain why many of the trial modifications have “failed.”
Lawsuits seeking class-action status recently have been filed against mortgage servicers Bank of America, JPMorgan Chase and Wells Fargo, alleging these lenders broke the terms of trial modification agreements by not upgrading them to permanent status, despite the fact that the homeowners presumably had been making timely payments. “This litigation is spreading all across the country,” remarks Kevin Costello, a lawyer with the Boston firm of Roddy Klein & Ryan representing certain plaintiffs. “People have been relying on a promise all along, and then they get a denial. Then they find themselves in that much worse of a hole.”
That doesn’t even include a rash of allegedly fraudulent foreclosures occurring around the nation, especially in Florida, even without the benefit of HAMP. The blitz of paperwork is an invitation to a no-win situation for the homeowner.
Oh, and the article adds:
Adding to the litigation possibilities is race. Given that a disproportionate number of defaults during the mortgage meltdown occurred among black and Hispanic homeowners, HAMP now must reach these “underserved” groups. The program’s new guidebook mandates that mortgage servicers identify all mortgage applicants by race even if customers don’t volunteer such information. Should a borrower decline to identify his or her racial affiliation, “the servicer should...provide the information based on visual observation, information learned from the borrower or surname.” One only can wonder about the legal consequences of “too many” black or Hispanic homeowners dropping out of the program.
38 posted on Monday, October 04, 2010 2:43:39 PM by fightinJAG (Step away from the toilet. Let the housing market flush.)
http://www.freerepublic.com/focus/f-news/2601355/posts
Thanks
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