The New Jersey superior court has cleared all lenders in the state to move forward with foreclosures. The last hurdle for GMAC and Ally Financial was lifted yesterday by Judge Mary Jacobson, who stated that the lenders have demonstrated “reliability of…processes” and are “permitted to resume prosecution of uncontested foreclosure proceedings”[1]. Other lenders whose practices were in question, such as Bank of America, JPMorgan Chase, Wells Fargo and OneWest Bank were cleared last month. Jacobson had denied Ally’s request to seal some of the documents it submitted as part of the case, which is why the decision for Ally was delayed[2]. Foreclosures in New Jersey have been suspended for major lenders for the better part of a year thanks to the review process. There was no other way, stated Judge Richard Williams, who reviewed the cases, “for courts to be able to separate assertions that were accurate from those that were not.”
Interestingly, New Jersey’s loan modification statistics are far better than those throughout the rest of the country[3]. This seems likely to be directly related to the fact that the six major lenders in the state have not had the option of foreclosure in the last 12 months. Do you think that these figures are linked?
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[1] http://www.dsnews.com/articles/new-jersey-lifts-its-final-foreclosure-ban-2011-09-14
[2] http://www.nationalmortgagenews.com/dailybriefing/2010_431/nj-lifts-ban-foreclosures-robo-signers-1026543-1.html
[3] http://www.nytimes.com/2008/12/21/realestate/21mort.html
Well, my state of New Jersey HAD it right but now they have given the banks a ‘get out of jail free’ card to continue breaking the law with impunity, very disappinting. And you are correct, what is needed to get this housing market and economy back on track is a moratorium on foreclosures and a system that rewards and encourages loan modifications at least as well as foreclosures, but sadly I don’t expect government for by and of the people to behave as though it were!
Boy, I’m sure glad I don’t have to have any of you removing my bandages. I’d be suffering in the hospital for years. The only way to get this housing market and economy back on track is for the market to clear. That means we need to hurry up and get all the foreclosures behind us. Put the properties in the hands of owners who can afford to own. Were it not for all this wishful thinking on the part of the “kick the can down the road” crowd, we’d already be in recovery. Also, it simply amazes me the kindergarten mentality of 2 wrongs make a right. OK, we get it. The banks are not perfect. But to all you deadbeats (and deadbeat sympathizers)out there: “If you do not pay, you cannot stay.”
If the property taxes in NJ where dropped somewhat I might be interested in investing. As a kid we went to the Jersey shore Spring Lake and others for 4 weeks and as I remember we really enjoyed the time there. Yet, I hear now you have to pay to even walk on the beach each day , that seems ludicrous, must be a UNION THING, or maybe the union getting behind on financing the re-election of the unions are doing great, what are you now down to 7% of the work force. I’d like to see the day when its down to .5%, just to keep you clowns around like that trumpka joke as your leader!! Just for a good laugh!!!
Here are the problems with your thinking Ken.
Each time the bank forecloses on a house instead of doing a loan modification:
1) You have one more distressed property on the market.
2) You have one more distressed sale affecting the local values.
3) You have more homes going under water due to the increased distressed sales.
4) The increased number of distressed sales makes it harder for a non-distressed house to sell.
5) The banks are making it very difficult for people to qualify to buy these houses.
6) Each time a person goes into foreclosure that is one less person who is eligable to buy a property so the pool of potential buyers keeps getting smaller while the inventory keeps getting larger.
When the bank does a modification the family keeps their home which is good for them. Their is no sale of the home so it does not increase the number of homes on market and the number of days on market. It also does not create a low sale price in the area to bring down other peoples values. All of these things are good for everyone else inlcuding the banks who have mortgages on these other houses.
The problem here is that there are incentives for the banks to turn down loan mods, turn down short sales, foreclose and then sell for less as an REO than they could have sold the property as a short sale or better yet modified the original owners mortgage terms to. I have seen it many times!
When the bank doesn’t give a damn what the house ends up selling for because they are going to get theirs anyway then they do not have any incentive to do the right thing for the rest of the people affected by their choices. That not only includes the “deadbeat homeowner” as you put it but also the neighbors, the local governments and the underlying investor or Mortgage insurance company who is losing out because of the foreclosure.
When decisions are made purely based on greed without consideration to the affects that those decisions have on the rest of society then you are like a parasite that sucks the life out of your host until they are dead. It is very short sighted and usually comes back on you in the end.
When a bank forecloses on a house and sells it for $165K after turning down short sale offers much more than that and refusing to modify the original owners mortgage in the amount of over $300K you can see what I am talking about. When the original owner could have afforded the house had they lowered it to $275K with the current market rates why would the banks choose to take $165K instead? It is because they are being made whole and they don’t care who else is hurt by their decisions.
None of the bandaids proposed by the administration and the congress are worth a dime and neither is the modification process worth a penny.
How can they expect people to make payments on properties that were appraised for 350k and now are worth 70k?
The only solution is to make loans based on ability to pay and let all the homeowners get new loans without credit score mambo jumbo. If you can afford a mortgage then you should be able to refinance it at the current value of the property. In this solution we don’t have to foreclose millions of properties. Essentially we will be doing a short sale to the owner of the property with a new loan.
This solution is easy to implement since most of the investors are doing the same. Getting properties for pennies on the dollar and turning around putting much higher mortgage on the property via FHA loan with 3.5 % down. I doubt if that is a better solution, I seriously doubt it.
There is no surprise here. In the near future, all the other states will follow suit – was there ever any doubt? A court’s decision does not mean justice was done. Amerikkka is neck deep in corruption – the courts included. In this country, you are nothing without assets or investments. This attitude is typified by two of the comments above. The person who calls others ‘deadbeats”, and the Unified Investment guy who blames everything on the unions, two people I am glad I do not know.
I would ask them, whose fault is it that my house is now worth half of what it was? Is it the “deadbeats,” the unions, or the bank’s fault? I would also ask them, whose fault is it that we have almost 10% unemployment with many of those unemployed unable to make payments on their now over-priced homes. Was it the “deadbeats,” the unions or the investment bankers that basically destroyed the economy?
Many people, especially investors, have bought into the propaganda of the banks that it is the fault of the people (homeowners) for this calamity. I would like to point something out to these very short sighted people, I do not control the economy, you do not control the economy and it is for sure the “deadbeats” have little to do with it. Try checking out all those greedy people on Wall Street.
The investor crowd cares little about justice, they just want things to resume so they can start feeding their greed again, no matter who gets hurt just as long as it isn’t them. It is also unfortunate that all the economic advisors in the Whitehouse are the very same people who helped to create this problem. It is very obvious to me the people are going to lose big time on this one. The working man, and the unemployed will bear the brunt of the gangster bankers’ crimes. We will be put into a bind while the corporate criminals put their multi-million dollar bonuses in offshore accounts. What do we learn from all of this? Not to become a homeowner? Work hard and you will get ahead? No. What I learn from this is, if you are going to commit a crime, make sure you wear a suit and tie and that it was planned in a boardroom — you will be richly rewarded.
There is plenty of blame to go around for this economy, however, I do have an answer to the question “Whose fault is it that my house is now worth half what it was?” It’s your fault. It’s your fault because your house was never worth what you paid for it in the first place. Deep down inside, you know that’s true. It was a ridiculously inflated over-priced deal from the get-go and you knew it then. But in a bubble, people think they can unload at a profit to some greater fool down the road. So next time any of you contemplate paying more than 100 times the monthly rent for a home, ask yourself, “Am I buying shelter, or speculating on future appreciation?”.
It will be quite interesting to see if the banks realize the benefits of keeping modified borrowers in the home after seeing the effects first hand. The other option is that they will not consider the unitended benefits of the moratorium and move quickly to take back all of those properties on the list. They have many ready to go, they have just been frequently postponed with the county Sheriff’s offices.