There will be no bottom to this until all this paper gets unravelled and until the interventions, the bailouts, and easy money policies at the Fed come to an end.
This only deepens and widens as long as they try to prop it up with moratoriums, special lending...We will have to see more banks fail and more homeowners lose their homes to foreclosure to get to the end of this.
bookmark
Obama and the Dems view it very important to bail out the big bankers, least they have to pay for their bad investment decisions, like us little people do.
And to give trillions of tax payer money to the task of keeping housing unaffordable.
“But now faced with the specter of losing foreclosure, there’s a chance policy makers will wake up to the stark reality that only through repossession, through the efficient reallocation of REO properties back into the market, can the housing truly heal.”
Excellent conclusion, imo, although I know others disagree.
The bank’s problem is not foreclosed property, they are delaying the process to find out if they are legally in hot water (fines, prison, loss of license) for the sloppy paperwork that borders on perjury and fraud. That is why the bankers are delaying the process so they can tally up the legal costs for breaking the laws vs the foreclosure costs. It would be interesting to see how the numbers stack up. What will happen if the fines and legal costs exceed the cost of foreclosure??? Will the banks end up keeping all the REO’s on the books till they get a government bailout???? Hate to be a banker in the US today. White collar criminals getting tangled in their own web.
JMO but I think the banks are so hell bent on forclosing quickly so they can send the paper back to Freddie and Fannie and get paid for the loan at the higher prices. What a racket. The MERS thing will come back to bite them in the butt. All to save recording fees.
Somehow, I have a feeling that after all of the subterfuge is settled that this will turn out to be a back door way to forgive the mortgage debt to those homeowners who are in default.
pingydingy for later
This scares me more than any doomsday or horror movie I’ve ever seen.
Bank of America Downgraded by Bond Market on Foreclosures: Credit Markets
http://www.nytimes.com/2010/10/15/business/15bank.html?_r=2&src=twt&twt=nytimesbusiness
We are in the market to buy and I am finding this to be a blessing. Banks now have significant motivation to get rid of their REO holdings. The faster they do the less likely they will have a problem with the property. Investors also are looking hard at bank holdings and seeing them as even greater liabilities to the banks than ever before. So, banks have every incentive to dump these properties before even more problems arise.
Ok, I am going to jump into this with different ideas to why the foreclosures being stalled...
1. the banks are seeing less foreclosed homes being bought by investors and are getting to close to the “red” line.
Money sitting doesn’t make money.
2. The winter will create huge problems for homes sitting with now heat. Using heat to keep them warm cost MONEY banks don’t want to spend. So better to have someone in the home than empty.
Now this paper work.. any one ever been through the paper work to buy a home? The Banks KNOW to cross the “T”s and dot the “I”s. Sounds like a lot of smoke and mirrors to me.
IF they found a mistake on some “paper” they would change the “paper” and continue on with the foreclosures.
Wouldn’t this mean that people who got their mortgages through unaffected banks or credit unions will have a better time (even in a bad market) of it selling selling their home, or buying their home from someone with a mortgage through one of the financial institutions that didn’t participate in this fiasco now that these affected homes are basically off the market and in limbo?