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This story is spreading like wildfire in the past two days.
This could easily delay the recovery for some time.
Not that I am surprised that the same unregulated greed that got us into this mess (sub-prime/idiotic lending practices) is rearing its head again, even if it is doing so from the past.
It's so annoying that any layman with half a brain could have seen this coming, yet nobody moved to stop it.
Looks like my prediction (that short sales would also get held up by this problem) is coming to pass. I happened to talk with another attorney today who told me that they, too, have seen some of their short sales put on indefinite hold until the banks figure out this whole paperwork mess.
I just took a look at Manatee and Sarasota Counties. There are 11,777 active residential listings on the MLS. 5.1% are REO, 19% are short sales, and the rest, 75.9% are normal listings. Distressed properties are not as large a segment of the inventory as most think they are. However, in the past 90 days, there were 3071 sold residential properties in the same counties. 30.5% were REOs, 21.6% were short sales, and 47.9% were normal sales. Obviously, buyers are looking for bargains and that's why the sales are disproportionate to the inventory. The question is: will removing 5% or possibly more of the lowest priced active listings put upward pressure on the median sold price or will it put more pressure on normal properties to lower their prices to match the needs of 52% of the buyers?
I wonder, was this due to greed or incompetence?
Either way, we should have nationalized the banks when we had a chance. Why do we have this idea that private companies are always better the government agencies?
I do not mean to start a debate here. But it just irks me the private companies almost always get a pass. If this were a government agency, heads would roll.
davery, this isn't directed at you, but is a follow up to a very good question you raised. I though I would add some stimulus to your topic with touch of argumentative effect. I hope you don't mind. . . And so, . . .
Uhhh, Didn't the Government establish the regulations and the policies that the banks have to follow?
Uhhh, Didn't the Government approve the procedure for allowing the packaging of the mortgages and sales and backing of them by Fannie Mae, Freddie Mac, Indi Mac, and others in order to encourage and get people that couldn't afford housing to qualify for loans that these government institutions, and again, make it profitable for banks and mortgage companies to follow these procedures in order to rake in huge profits? And, then bail them all out when this all didn't work?
I'm not sure I agree that our government is all that great either.
Private companies are formed in order to provide a profitable function, uhhh, and some of them have done a pretty good job of it. The opportunity which was manipulated by government policies, insurance, backing, and other influences has caused the distortion of property values to falsely appear higher than they should have been. The real question is Who is Accountable? Our congress people walk away, and maybe don't get re-elected for poor performance, but who really is accountable? ? ?
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Us. :-) But, we have a magic pill, we can pass it on to our kids.
Boy aren't we lucky!
Looks like my prediction (that short sales would also get held up by this problem) is coming to pass. I happened to talk with another attorney today who told me that they, too, have seen some of their short sales put on indefinite hold until the banks figure out this whole paperwork mess.
Thats funny because today I saw this quote:
But a Sarasota real estate attorney said the reviews also could benefit strapped homeowners.
[LEFT]“The recent halt of foreclosures by some servicers will help homeowners in pursuit of foreclosure alternatives, such as a short sale,” Anne Weintraub wrote in an e-mail.
“There was a time when lenders were unable to expedite short sales. This week’s events will change that — some lenders are even pro-actively calling homeowners to find out if they can value the property in advance of an offer so they are ready if and when the offer arrives.”
This is like the whole spin of the housing market that has been going on. You get opposing statements regarding the issue and sometimes even on the same day! [/LEFT]
I received this viral email message today but it is so on the mark that I felt compelled to share it:
Charlie Reese, a retired reporter for the Orlando Sentinel has hit the nail directly on the head, defining clearly who it is that in the final analysis must assume responsibility for the judgments made that impact each one of us every day.
It's a short but good read. Worth the time. Worth remembering!
Charley Reese has been a journalist for 49 years.
545 PEOPLE--By Charlie Reese
Politicians are the only people in the world who create problems and then campaign against them..
Have you ever wondered, if both the Democrats and the Republicans are against deficits, WHY do we have deficits?
Have you ever wondered, if all the politicians are against inflation and high taxes, WHY do we have inflation and high taxes?
You and I don't propose a federal budget. The president does.
You and I don't have the Constitutional authority to vote on appropriations. The House of Representatives does.
You and I don't write the tax code, Congress does.
You and I don't set fiscal policy, Congress does.
You and I don't control monetary policy, the Federal Reserve Bank does.
One hundred senators, 435 congressmen, one president, and nine Supreme Court justices equates to 545 human beings out of the 300 million are directly, legally, morally, and individually responsible for the domestic problems that plague this country.
I excluded the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered, but private, central bank.
I excluded all the special interests and lobbyists for a sound reason. They have no legal authority They have no ability to coerce a senator, a congressman, or a president to do one cotton-picking thing. I don't care if they offer a politician $1 million dollars in cash. The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator's responsibility to determine how he votes.
Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party.
What separates a politician from a normal human being is an excessive amount of gall. No normal human being would have the gall of a Speaker, who stood up and criticized the President for creating deficits.... . The president can only propose a budget. He cannot force the Congress to accept it.
The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes.
It seems inconceivable to me that a nation of 300 million can not replace
545 people who stand convicted -- by present facts -- of incompetence and irresponsibility. I can't think of a single domestic problem that is not traceable directly to those 545 people. When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist.
If the tax code is unfair, it's because they want it unfair.
If the budget is in the red, it's because they want it in the red ..
If the Army & Marines are in IRAQ , it's because they want them in IRAQ If they do not receive social security but are on an elite retirement plan not available to the people, it's because they want it that way.
There are no insoluble government problems.
Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take this power. Above all, do not let them con you into the belief that there exists disembodied mystical forces like "the economy," "inflation," or "politics" that prevent them from doing what they take an oath to do.
Those 545 people, and they alone, are responsible.
They, and they alone, have the power..
They, and they alone, should be held accountable by the people who are their bosses.
Provided the voters have the gumption to manage their own employees...
We should vote all of them out of office and clean up their mess!
davery, this isn't directed at you, but is a follow up to a very good question you raised. I though I would add some stimulus to your topic with touch of argumentative effect. I hope you don't mind. . . And so, . . .
Uhhh, Didn't the Government establish the regulations and the policies that the banks have to follow?
Uhhh, Didn't the Government approve the procedure for allowing the packaging of the mortgages and sales and backing of them by Fannie Mae, Freddie Mac, Indi Mac, and others in order to encourage and get people that couldn't afford housing to qualify for loans that these government institutions, and again, make it profitable for banks and mortgage companies to follow these procedures in order to rake in huge profits? And, then bail them all out when this all didn't work?
I'm not sure I agree that our government is all that great either.
Private companies are formed in order to provide a profitable function, uhhh, and some of them have done a pretty good job of it. The opportunity which was manipulated by government policies, insurance, backing, and other influences has caused the distortion of property values to falsely appear higher than they should have been. The real question is Who is Accountable? Our congress people walk away, and maybe don't get re-elected for poor performance, but who really is accountable? ? ?
V
V
V
V
V
V
V
V
V
V
V
V
V
Us. :-) But, we have a magic pill, we can pass it on to our kids.
Boy aren't we lucky!
In most of the articles that I have read it seems that people are trying to apply for the federal mortgage assistance program. But it seems in a lot of cases the banks actually flip the borrowers over to other programs. In many situations, the borrowers monthly payments do not go down and their principal increases. Banks know they can make more money if they foreclose, rather than modify the mortgage.
Accountability is something we see very little of today. Unless, of course, you are a teacher. I have been saying this for years. Who was accountable for the false info that led to the Iraq war? Who lost their job? No one. Which big bank CEO lost their job due to the meltdown in which they caused? None that I know of. Of course, if my students do not meet average yearly progress, as defined by some politician, then they are holding me accountable. Nevermind the fact that as a country we are 50th in education expenditures as a percentage of GDP. It seems that a 20th ranking in math scores may not be so bad when you consider our investment.
Anyway, the point I'm trying to make is that the people that actually make the choices very rarely suffer the consequences. They have virtually no accountability. The banks will not be held accountable for this latest mess, as they were not held accountable for the previous mess. As I said, half in jest. We should have nationalized the banks when we had the chance
Not to derail, but "nationalizing the banks" would touch off a political firestorm far worse than the current infinite recession. Think there is partisanship now? Jeez. NOTHING would ever get done in Washington again.
I understand your point though. You're essentially saying we shouldn't have stuck our heads in the sand while the meteor was heading for us, and that is VERY true.
What we needed to do was to realize there is NO investment ANYWHERE that always appreciates, and that it would have been far better for the many ancillary industries attached to the real estate industry to take a bit of a hit than the entire worldwide economy to be set in tailspin. No regulatory body worth calling "regulatory" could possibly not have seen the leaks and cracks in the structure.
Not to derail, but "nationalizing the banks" would touch off a political firestorm far worse than the current infinite recession. Think there is partisanship now? Jeez. NOTHING would ever get done in Washington again.
I understand your point though. You're essentially saying we shouldn't have stuck our heads in the sand while the meteor was heading for us, and that is VERY true.
What we needed to do was to realize there is NO investment ANYWHERE that always appreciates, and that it would have been far better for the many ancillary industries attached to the real estate industry to take a bit of a hit than the entire worldwide economy to be set in tailspin. No regulatory body worth calling "regulatory" could possibly not have seen the leaks and cracks in the structure.
(/derail)
I think that all the bankers should be held accountable, as well as the mortgage companies, and the teachers that taught them should all be added to the firing squad! Just Kidding - but I also don't think that nationalizing the banks is what is necessary. But, better education certainly wouldn't hurt - would it!
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Just Kidding - but I also don't think that nationalizing the banks is what is necessary. But, better education certainly wouldn't hurt - would it! 
