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The backup was already there. A lot of the "backup" is in the courts. The bank has to go to court FIRST before they can foreclose. In Miami the court calendar is backed up SIX MONTHS with forclosure hearings.
And when you stop foreclosures from taking place for three months, and then open them all to up proceed, you blackup the court systems even more.
Quote:
Originally Posted by Austin13
Additionally, some home owners go into bankruptcy in order to save their homes, and that puts a stay on any foreclosure proceedings in state court. The trustees and debtor's attorney try to work out a Chapter 13 plan of payment over five years so that the debtor can get a fresh start. Homesteads are exempt. However, if the debtor cannot come up with an acceptable bankruptcy payment plan, then the bankruptcy gets dismissed, the bank gets stay relief from the bankruptcy court, and then the forclosure goes back to state court for a hearing on the foreclosure.
I wish they would just let the idiots be foreclosed on and let them lose their homes and businesses. I am sick of anyone at all being bailed out of their bad choices.
I think what would happen if the banks stopped getting bailouts, is they would negotiate their own deals with their borrowers.
By constantly giving taxpayer money to the corrupt banks that made poor choices in lending, gave big mortgages to people who they should have known could never repay them, the government makes it possible for them to never have to work with their borrowers who are now getting way behind.
They could think of creative ways to keep people in those homes - and would if they didn't count on billions of dollars of bailouts.
I read the article. However, the banks also have to get (from the courts) a date for a foreclosure sale. There have to be legal notices, etc. For sure the banks are sitting on a lot of foreclosures, however, there are all these legal proceedings which have to be undertaken to get possession of the homes and for a foreclosure sale to even be scheduled, plus, of course, many of those homes are in bad condition, yet some of the time it is taking to get those properties "moving" is the time spent in court, which allows even more time for the property to deteriorate.
"I think banks are dragging their rears about doing just about everything," she said. "They have so much going on, and there's so much red tape and the people don't care, nothing gets done." (court time / red tape)
What happens is, you put a three month moratorium on foreclosures, property prices temporary level because foreclosures are not hitting the market for three months, and then when you open the system up to foreclose, banks then have to go through the legal steps to foreclose four months worth of properties (the original month, plus three month moratorium). When they complete the steps of going through all of these foreclosures at once, they hae no choice but to unload them in bulk, or on the open market which pushes the price downward.
Overall, this puts 4 times the quantity on the market at one time further depressing the economy.
Do not worry though Consumer Consfidence is Soaring!
Consumer Confidence Sees Biggest Jump in 6 Years - Economy * US * News * Story - CNBC.com (http://www.cnbc.com/id/30941591 - broken link)
This is a load of garbage. It is more like consumers are numb by now. The realization has set in that consumerism is dead as we knew it just 2 years ago.
I wish they would just let the idiots be foreclosed on and let them lose their homes and businesses. I am sick of anyone at all being bailed out of their bad choices.
Yeh those damn entreprenuers employing people and generating the movement of goods and services.
Maybe if the bankers proceeded and dumped all the houses the markets would do what markets are supposed to do which is set a price that clears the market of the goods for sale. All of this bailout nonsense is to prevent the market from setting a clearing price and delays are designed to keep the prices up. As letting “free” markets set prices in one of the founding “truths” of conservative economics I have to wonder why so many businesses are fighting to receive bailout money. Perhaps because survival is more important than market purity.
If all the defunct mortgages were to hit the market the banks might convert some mortgages to rental agreements or just extend the credit to infinity. They could also sell the house for far less than remains of the original speculative mortgage. That is what happens when the buyer and the lender are both speculating. Eventually some win and a lot lose.
I would not mind seeing a collapse of housing prices because then I might be able to purchase a house or two and rent out my condo and one of the houses to pay for them. Hell, I might actually be able to live on my pension. Imagine that.
I wish they would just let the idiots be foreclosed on and let them lose their homes and businesses. I am sick of anyone at all being bailed out of their bad choices.
I agree. Besides, it is no coincidence that the states with the highest foreclosure rates are the same ones where ACORN has been the most active, and run by Democrats - Nevada, Michigan, Colorado, Ohio, Illinois, etc. States with the lowest foreclosure rates (South Dakota, Vermont, Maine, West Virgina, Wyoming, etc) are where ACORN has no presence, and run by Republicans.
here's the real problem: People expected buying a house to multiply their money.
If housing prices increased minimally (1-2%) per year at most, do you think this foreclosure mess would have happened?
The root of the problem is that people expect money to multiply itself, whether in the form of stocks or housing or whatever. Perhaps we should just get over this culture of investing and get back to actually waking up, go to work, do a useful job, and get paid a fair wage for what we do based on risk of harm and skill.
In my neck of the woods, it takes about one year for the banks to list a house on the MLS. Some have been empty for as long as 2 YEARS before being listed. Since surrounding homes have already lost 50+% of their value, most of these homes will be foreclosed on too. It will be decades until values come up to where selling any of these homes is possible.
I hate to sound all gloom and doom, but I see no light at the end of this tunnel right now. So many people are underwater, foreclosure is inevitable unless they stay in their current homes for the majority of their lives, which is not even an option for most folks these days.
It's difficult to pinpoint why the banks are just sitting on so many houses and doing nothing to get them off the books. I tend to agree that they are staggering the inventory to try to convince people that "now is the time to buy" because the market has started to stabilize. Unfortunately, as I see it, they are just painting a sunken ship. Hang on, things are going to get worse before they get better.
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