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How many of the foreclosures affected people who were current on their house payment?
The waterfall of foreclosures caused the real estate values of people who were current with their payments and who were financially solvent, in many parts of the USA, to plummet. Foreclosed properties typically sell for well-below what was current market values. They push-down the 'comps' used in real estate transactions. I'm current with my mortgage. Always have been. But there have been probably 50 foreclosures on condos in the 1/4 mile square development I live in. Those foreclosures are the principal reason the market value of my unit dropped by more than half. From $325,000 to $140,000. I've been negatively impacted by the foreclosures. And tens of millions of other Americans have suffered similar declines in asset values.
The waterfall of foreclosures caused the real estate values of people who were current with their payments and who were financially solvent, in many parts of the USA, to plummet. Foreclosed properties typically sell for well-below what was current market values. They push-down the 'comps' used in real estate transactions. I'm current with my mortgage. Always have been. But there have been probably 50 foreclosures on condos in the 1/4 mile square development I live in. Those foreclosures are the principal reason the market value of my unit dropped by more than half. From $325,000 to $140,000. I've been negatively impacted by the foreclosures. And tens of millions of other Americans have suffered similar declines in asset values.
In many of those cases, the $325,000 was the high water mark. Meaning that the 140k condo in 2002 ran up to $325k by 2007....and then when the bottom fell out prices sagged back towards the 140k amount.
I mean, if you look at a map of the US where the prices were shooting through the roof and then later look at a map where the foreclosures were the worst....they match up pretty nicely.
In short, what would that unit have sold for in say....2000 or so before the big run-up? And so it's hard to lay all the blame on the foreclosures when some might call it a bubble correction.
P.S. I had friends buying condos in Chicago because they were shooting up so high so fast that they'd buy a unit for say 200k and by the time construction finished they'd turn around and sell it for 250k without ever taking possession.
Some were behind but not outside of the terms of the agreement set forth by the bank. It was the banks error of processing their payment as to why they were foreclosed upon. Thus making the issue one of the banks.
1 in 3 homeowners who were behind on their house payments didn't like the way the bank handled the demand for payment.
I'm starting this thread to discuss errors and mismanagement that lead to our current financial crisis. During the height of the Housing Crisis, 1 in 3 foreclosed homes were a result of bank error or now illegal practices.
1 in 3.
so 2 out of three were due to?????.... the home owners error
My daughter worked on one of the federally mandated audits of the main mortgage lenders. To cut a long story short, the bank's documentation was wholly deficient. In around 4 months of work they were only able to put together a small number (less than a thousand) of complete sets of documentation.
A savvy borrower would have had a very good case if they had the ability and means to employ and attorney capable of challenging the bank.
I'm starting this thread to discuss errors and mismanagement that lead to our current financial crisis. During the height of the Housing Crisis, 1 in 3 foreclosed homes were a result of bank error or now illegal practices.
The banks and many of the lenders were also bailed out after the crisis and given millions of dollars to keep their businesses afloat. The following year, many of the top executives bonused themselves...
"Nine of the financial firms that were among the largest recipients of federal bailout money paid about 5,000 of their traders and bankers bonuses of more than $1 million apiece for 2008, according to a report released Thursday by Andrew M. Cuomo, the New York attorney general."
American homeowners were left out to dry while the bankers, the ones mostly responsible for the meltdown, felt justified in bonusing themselves.
Thoughts?
Perhaps the fact that 50% of those getting refis i the first 6 months went back into foreclouse shows that to be questioned stat. One olso has to remmber that in mnay of those erros it was homebuyers who sign all those income statements that were false. Theone has to remmber that it was democratic house that refused to consider a ad usit of Fannie and Freddie even goig so far as frank to say if theyneeded bailigout they could do that. Lots of blame for the greed form mai street ;to washignton to wall street.
It wouldn't be a bank error if they had just paid their mortgage.
The banks wouldn't be open if we didn't bail them out.
In many of the cases, payments actually were made. It was the banks fault, hence bank error, as to why those payments weren't applied bringing about foreclosure.
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