Foreclosure Fun

[Bonestorm]

This is a very big problem and at present, it doesn't seem to be treated as such. The Administration's HAMP program is a joke:

Feb. 19 (Bloomberg) -- A record number of Americans were in danger of losing their homes in the fourth quarter, even as new delinquencies declined, the Mortgage Bankers Association said.

Loans in foreclosure rose to 4.58 percent of all mortgages and the share more than 90 days overdue, the point at which lenders typically begin the process of seizing a property, rose to 5.09 percent, the Washington-based trade group said in a report today.

“We have a hard-core block of unemployed who have been out of jobs for a long time, and that’s keeping the long-term delinquencies high,” Jay Brinkmann, the Washington-based trade group’s chief economist, said in an interview. “New entrants to the ranks of the unemployed have been falling and that’s why we see the early delinquencies dropping.”

Government efforts to prevent foreclosures have been thwarted by the biggest employment contraction since the Great Depression. U.S. companies shed more than 7 million jobs since December 2007. The unemployment rate fell to 9.7 percent in January after hitting a 26-year high of 10.1 percent in October, according to the Bureau of Labor Statistics.

I'm not sure what it will take for the administration and Congress to realize the scope of the problem and take action to fix it. They had a chance last year to do the right thing but balked and instead Obama instituted the HAMP program which has been a colossal failure.


http://www.businessweek.com/news/20...losures-rose-to-record-in-fourth-quarter.html

 

[Damocles]

Yeah, we were talking about this yesterday. Somebody has to get it through their heads what is coming, or we'll double-dip this thing.

 

[Bonestorm]

I like this guy's solution to his bank threatening foreclosure:

MOSCOW, Ohio -- Like many people, Terry Hoskins has had troubles with his bank. But his solution to foreclosure might be unique.

Hoskins said he's been in a struggle with RiverHills Bank over his Clermont County home for nearly a decade, a struggle that was coming to an end as the bank began foreclosure proceedings on his $350,000 home.

"When I see I owe $160,000 on a home valued at $350,000, and someone decides they want to take it – no, I wasn't going to stand for that, so I took it down," Hoskins said.

[snip]

Hoskins said he'd gotten a $170,000 offer from someone to pay off the house, but the bank refused, saying they could get more from selling it in foreclosure.

Hoskins told News 5's Courtis Fuller that he issued the bank an ultimatum.

"I'll tear it down before I let you take it," Hoskins told them.

And that's exactly what Hoskins did.

http://www.wlwt.com/news/22600154/detail.html

 

[Bonestorm]

Yeah, we were talking about this yesterday. Somebody has to get it through their heads what is coming, or we'll double-dip this thing.

Congress should have passed the cramdown legislation to allow bankruptcy judges to modify home loans. The voluntary bank programs just don't work although I really don't quite understand why.

Basically, the banks seem more willing to go through the foreclosure process on a $350,000 loan to sell the property for $200,000 than they are to just modify the loan principal to $200,000 and keep the original owner in the home.

 

[Damocles]

Congress should have passed the cramdown legislation to allow bankruptcy judges to modify home loans. The voluntary bank programs just don't work although I really don't quite understand why.

Basically, the banks seem more willing to go through the foreclosure process on a $350,000 loan to sell the property for $200,000 than they are to just modify the loan principal to $200,000 and keep the original owner in the home.

The difference, for the bank, is in liquidity.

However, the guy must have put that offer for 170K to pay it off after foreclosure proceedings had already gone through. The bank would have no choice if he had offered it before the proceedings were done.