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Posted by on Jun 20, 2014 in No-Foreclosure as Banking Policy | 11 comments | Print Print

No-Foreclosure Policy

sd county foreclosures

I spoke with a long-time REO listing agent this week who agreed completely with my theory that banks have stopped foreclosing.

Banks like Wells Fargo keep laying off workers:

The latest round of layoffs is “the result of continuing market changes, including improvements in delinquency and foreclosure rates and reduced demand for mortgage financing,” said Wells Fargo spokeswoman Mariana Phipps in Oakland.

http://www.bizjournals.com/sanfrancisco/blog/2014/06/wells-fargo-mortgage-layoffs-housing-outlook-wfc.html

(bold added)

But the improvements in delinquency and foreclosure rates are due to the banks not pursuing foreclosures. My friend mentioned how hard it is to get several owners of  mortgage tranches to agree on principal reductions and loan modifications, and instead the servicers just let defaulters ride.

The accounting standards were suspended long ago and Helicopter Ben said himself that he told the banks to not do anything to harm the economy – so not foreclosing is a great solution.  Banks can then cite the ‘improvements’, and layoff workers to pump earnings further.

No foreclosures = everyone is happy!

11 Comments

  1. What you’re seeing is a direct result of the banking bailout. The USD was devalued by X amount by printing money. This was given to banks so they wouldn’t need to foreclose to stay in business.

    Notice how the price of goods like Meat, Gas, etc are going up. This is inflation caused by the amount of printed money the fed is creating to bail out banks.

    Here’s how it works…

    If there’s only 100 units of cash in an economy to buy products. Buyers and sellers will agree to buy some random item for say 10 units of cash. But say we expand the number of units of cash from 100 to 10000 units of cash in the economy. Assuming no population increases the that same item that originally buyers purchased for 10 units would now cost 1000 units if cash.

    People feel richer but they’re not because it costs more to buy everything across the board.

  2. “No foreclosures = everyone is happy!”

    I see one “typo” in your sentence, JtR…

    Everyone, “except” homeowners who are paying their mortgages on time and in full–and see a neighbor(s) in their own neighborhood that hasn’t been paying and living “mortgage free”for months or years. Just my 2 cents and you know what that’s worth today…

  3. I hope the laid off Wells Fargo workers secured loans through Wells Fargo who will then stop paying their mortgage and live rent free.

  4. The moment they suspended mark to market, the die was cast.

  5. Agreed .

    We should all stop paying and see how they like that.

  6. We should all stop paying taxes. Just print money, that seems to work just fine.

  7. “Agreed. We should all stop paying and see how they like that” -JtR

    Why didn’t I think of that, Jim? *Grin* I’ll go first, and take one for the team…

  8. Must be an election year? No wonder PMI is so expensive.

  9. A question: Who is paying the property taxes on these homes? The banks who are then throwing good money after bad, or the homeowners, or no one? If no one, how long does it take the county to put a property up for tax sale in SD County? And of course there is an advantage to the buyer at a tax sale, the deed is better. The county also does not need to produce a note: So how soon will the free rent program terminate, if the banks truly decide to walk away and stop paying the taxes?

  10. Shadash hit the nail on the head. Pretty much sums it all up for the average Joe.

    Banks aren’t foreclosing unless they really, really, really have to. My buddy in Vegas, who is now on his ninth attempt to get a Ocwen Loan Mod, Just got another Letter from Ocwen- :Dear Sir please remit the $167565 to catch up in your loan payments”

    lol. His last payment was march of 2009. He could care less too. Ocwen just tells him to keep re applying for loan mods as they cant foreclose on him while he is pursuing a loan mod(homeowner bill of rights law).

    Myself? well I also have a transferred Ocwen loan. Lets just say this – they give me a 75k principle reduction every year for three years as long as my new payment (was $4500 ,now $2200) is on time.

    Something isn’t right about this, but that is the way of the world these days.

  11. And is Ocwen still paying the taxes and adding them on to the balance? If so they are bigger fools then they look. Since they have effectively written the mortgage off, let them stop paying the taxes, and let the county have a tax sale. That extinguishes the lien in the process. I guess Ocwen does not want to finally take the writeoff so they extend and pretend.

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