Being the nice guys that they are, Fannie is giving homeowners a few
more days before they get tossed on the street. I have not seen that
the other D.C mortgage lenders have followed Fannie’s lead, but I am
sure they will. Freddie Mac, FHA, FDIC and the Federal Home Loan banks
are also “nice” guys who are also in the foreclosure business.
I agree with this decision. What’s the sense of chucking people out in
the cold over the holidays? We are supposed to be a compassionate
people with a compassionate government. I am not sure that those who
get this two-week reprieve will really be enjoying the Christmas
spirit. Waiting for the axe to fall does not fit in with the plum
pudding and presents thing.
Assume that all of the lenders followed Fannie’s lead and suspended
foreclosures from the 19th to the 3rd. That would be a pretty big deal.
The number of foreclosure has now reached a level of 11,000 per day. So
this break in the action by the lenders would defer as many as 160,000
homes from foreclosure. But that is only for two weeks. It just means
the January/February numbers will have a bulge.
The 2009 foreclosure will come in around 4mm. Up from 2.2mm in 2008. In
the period 1950-2000 the foreclosure rate averaged less than 1% of all
mortgages. In 2010 foreclosures could be 7%. There is nothing normal
about our current conditions.
It is certain that there is more bad news in front of us on this issue.
Washington has introduced the HAMP and HARP programs in the last year
to combat the tide of foreclosures. There has also been pressure by
regulators and even the White House on the private sector lenders to
avoid foreclosures. These efforts have reduced the numbers, but the
real impact is to pass the trash to a future period. We know that 60%
of restructured mortgages re-default in less than one year. There is no
second chance at this. That 60% is going to hit a wall sometime in 2010.
By any account the US is the wealthiest country in the world. We are
also the most indebted. Two years ago I would have thought it
impossible that we could come to this. A two-week moratorium on
foreclosures is the best we can do. Possibly we are not as wealthy as
we think we are.
Keep your money safe in your mattress.
Price rollbacks to 1930s levels coming...
It's a delaying tactic to keep from having to declare a loss on a forclosure.
I predict there will be Valentine's day, Easter, MLK, etc. moritoriums (OK, not actually, but effectively).
Bingo!
How else can 4th & 1st quarter financial earnings come in "better than expected?"
Surprise!
And the game continues.
Jim
And what good does it do to kick the people out. Put the property up for sale and have it torn up by vandals as they TRY to refuse letting prices reset to incomes and savings.
The way that congress and the senate are acting against the will of the people and enabling/ignoring/participating in the corruption, I hope soon many abled payers quit paying their taxes and mortguages as a silent revolt against a tyranical government.
I hope soon many abled payers quit paying their taxes and mortguages as a silent revolt against a tyranical government.
+10
The banks, big business and the government have been fucking us for years, why not fuck them back? Short of an armed revolution, which will never happen imo, this is a viable way for J6P to stand up to them.
Another tool we have is to stage loud protests, to spread word and realistic sense of uncertainty into the local and global news. This should cause further pullback from foreigners purchasing Treasuries.
we are drowning in moral hazard...if you have taken out a mortgage you got to pay it..its that simple...no "banks are at blame bs"..how irresponsible are some of the comments..lets just be a communist country..not pay our debts, expropriate the banks and all will be solved..Have you heard of Rome and how it fell down? We are Romans without the togas..
Im taking the Chumbawumba Challenge, maxing out the credit cards on physical Gold now.
What is moral hazard when we are playing with fake paper money that a private bank (the FED) gets to print?
Its irresponsible to let a private bank (the FED) and a hijacked Federal Government make a fake paper money system and then force you to use it, and pay taxes into it and make contracts in it.
And Im not a Roman, Doucher! Im a free Sovereign person that is done with being a slave to this fake paper money system!
Buy Gold, and default on the fake system!!!!
I say whats good for the goose is good for the gander! Let the banks be foreclosed also - since they can't pay the debt they owe to the depositors/investors.
Apart from drowning in moral hazard, why not make banks hold off on foreclosures until the property market would allow them to actually re-sell or otherwise benefit from the collateral? If the asset is nonperforming anyway, is it any better to have it empty and uncared for than to have it occupied by nonpaying "owners" as de facto authorized squatters?
The banks really need to get smarter about this. Having all the houses sit empty will not benefit them, and in fact probably hurt them as drug dealers, arsonists, or squatters with no prior legitimate claim to the property move in and damage it.
Compassionate?.... my take on this is that the guys actually doin the "chucking out" want a bit of a holiday too ,like everybody else at this time of the year, and to get them to work then would just cost the foreclosing parties extra....so no dice....spin it "compassionate".
That is the first thing I thought when I read this. The money-power would just assume take the rest of the year off at this point. March spring break is a ways off and they need some time to enjoy some of the bonus money that is rolling in.
There are a couple of other reasons for this act of compassion. The sooner the property is forclosed upon, the sooner the bank has to move it into the shadow inventory or otherwise hide the true value to keep all the massive ponzi fraud balls in the air. Lest we forget, forclosure is a form of price discovery and no one in this government or the fin services industry wants anything to do with actual price discovery. And as a sort of added bonus, they don't have to pay any worker overtime to throw people out on the street on Christmas day.
my take on this is that the guys actually doin the "chucking out" want a bit of a holiday too ,like everybody else at this time of the year, and to get them to work then would just cost the foreclosing parties extra...
+1
the only good that i can see in this is that the bastards who remove the furniture and other personal posessions that the poor evictee is forced to leave behind, (and proceed to add insult to injury by charging them a 'storage fee' equal to a monthly mortgage payment in some areas) may find themselves laid off for a while if there is any justice in the universe. Couldn't happen to a nicer bunch!
True. The deputies who'd be serving the papers will be probably busy responding to the increased number of holiday season domestic violence calls, intensified by the stresss at these same properties ...
One of the foundations of this nation's success is the inviolate nature of contracts, as guaranteed by Article I, section 10, clause 1 of the US Constitution. If people freely agreed to pay their mortgage every month, and that if they don't, their house may be foreclosed upon with them evicted, then there is nothing wrong with these contracts being honored. Indeed, there would be something wrong if the government stepped in and said that the foreclosure could no longer happen. It is a nice gesture what Fannie Mae is doing, albeit for fear of a publicity disaster if the news trucks showed up to a family being evicted on Christmas Eve. The problem isn't in the foreclosures; it's in the fact that residential mortgages can be securitized and resold immediately and that Fannie and other mortgage GSEs exist in the first place. What would really help avoid the same crisis is a requirement for the originating bank to hold onto the mortgage for at least 2-3 years before earning the right to sell it securitized or as part of a large portfolio.
One of the foundations of this nation's success is the inviolate nature of contracts, as guaranteed by Article I, section 10, clause 1 of the US Constitution. If people freely agreed to pay their mortgage every month, and that if they don't, their house may be foreclosed upon with them evicted, then there is nothing wrong with these contracts being honored. Indeed, there would be something wrong if the government stepped in and said that the foreclosure could no longer happen. It is a nice gesture what Fannie Mae is doing, albeit for fear of a publicity disaster if the news trucks showed up to a family being evicted on Christmas Eve. The problem isn't in the foreclosures; it's in the fact that residential mortgages can be securitized and resold immediately and that Fannie and other mortgage GSEs exist in the first place. What would really help avoid the same crisis is a requirement for the originating bank to hold onto the mortgage for at least 2-3 years before earning the right to sell it securitized or as part of a large portfolio.
Constitutional Gold clause contracts were
unilaterally declared null and void by FDR
and his Courts...
Sepmier. The problem with your post on your blog is that the answer is correct but the logic is totally moronic and media driven. You do not help the cause. Stop blogging.
RRR
I actually found your reply quite moronic. You sound a lot like a skin head with a 3rd grade education. The US government is currently doing the moral financial equivalent of helping drug dealers procure their drugs only to arrest and imprison the end user.
this has been happening with the big banks for months in my area. i am in nw indiana and 90% of all homes set to be auction are cancelled the morning of the sale. last month wells fargo had 75 set to go and they cancelled all of the the morning of the scheduled auction even the vacant ones.
such has been commonplace for many moons now. DB is the single most egregious practitioner while Wells stands out simply bc they wrote / continued to write the lions share of shitty stubs.
at the end of the day, price discovery remains a MAJOR no-no.
Tks for this very interesting info.
bk
Perhaps real proof of the wealth of this nation will be when people step up and pay their neighbor's mortgage directly without ownership transfer or another side deal instead of bloviating about how taxpayers should foot the bill.