2011 was supposed to be the year that the housing market finally bottomed out and the foreclosure “tsunami” worked its way through the banking system and into the open market. It was supposed to be a year of new beginnings. However, thanks to massive uncertainty in the lending industry about paperwork and procedures, it looks like the shadow market may remain just that far longer than experts and analysts originally predicted.
Nationwide, foreclosure filings fell 17 percent (year over year) in January 2011, with only 260,000 foreclosures being filed that month[1]. While that might sound like a good thing, in reality it is indicative not necessarily of an improvement in homeowners’ ability to pay, but rather lenders opting to “put the brakes” on their foreclosure systems while they investigate and review their own processes for faulty paperwork, robo-signers and other liabilities.
Should the lenders stall the process? If they think that they have a problem, then absolutely. If they are wrongfully foreclosing, then the flaw in the system must be repaired or lenders not only face ethical issues but also in some states, like Florida, they could face criminal charges. Note: In Florida foreclosure filings fell 54 percent in light of this new consideration.
Unfortunately, this slowdown may not actually be a sign of improvement but rather just a symptom of coming market doldrums, say experts. In reality, however, no one really knows what is coming next. Pending legislation in many states could change the foreclosure process permanently, adding in mandatory negotiation periods that might make loan modifications more “user-friendly” or that could provide homeowners with longer windows of opportunity to sell homes, negotiate short sales or finagle other foreclosure options.
How do you think that this situation should be handled? How can the massive volume of legal issues stemming from ForeclosureGate be realistically resolved in a way that helps rather than hinders housing recovery?
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[1] http://www.washingtonpost.com/wp-dyn/content/article/2011/02/10/AR2011021006634.html
They need to do what was done with my grandfather in the depression. He had a home in Pennsylvania and his mortgage payment was $48 a month. He lost his job, like just about everyone, and was more worried about feeding his family than a payment he could not make. His bank was taken over by the government along with 14,000 other banks. He finally got a call from an individual at the bank in receivership. They ask he his current status, and then ask him what could he honestly pay a month. He told then $5 a month. They agreed to this, and for the next seven years he paid $5 a month. Finally, the depression was over, and he got a job. The bank then wrote a new 30 year mortgage, and thirty years later, my grandfather paid it off. This house is still in my family due to this sane solution.
The first step is to dismantle these banks that have been bankrupt for years, including BofA. Quit pretending and extending the inevitable collapse of these empty shells. Once this happens, and they put in mark to market rules again that Henry Paulsen and his Goldman Sachs buddies threw out, our day of reckoning will have arrived, and them we ALL can push the reset button, and start re-building the economy. Come on they have been allowed to Steal an incredible amount of money in this collapse.
Some home owners like to stay in their homes if only the government can bail out the difference and give them a new loan based from the current value of their home. The only reason why the quit paying or just walk out is because they are forced to continue paying their mortgage that is worth less i.e the loan value is higher than the property value. Why pay a loan amount of $500.000.00 and the current value of the property is now $250.000.00 ??? Is it worth paying a $500.000.00 loan that i signed in 2005 /2006 and the value of the same property is now $250.000.00?? Is there a way to resolve this case?