They think that they have us right where they want us, making us believe that foreclosures will be flooding the streets any minute. When it doesn’t happen, they expect frustration and anxiety will set in, and buyers will eventually pay more as a result.
But is the bankers’ unwillingness to foreclose breeding indifference, instead of contempt?
Hat tip to MB for the article also seen on CR:
Rich are ‘More Ruthless’
I think what we’re seeing here is the new “normal”.
We’re entering the second dip of the double dip recession. Personally, I don’t think we got out of the first dip.
Anyway, all of our fundamentals are wrong. The stuff with the banks is just a slow dance that at some point is going to give way-collapse.
We’ve just got way, way too many people under water in their homes-basically home renters. We’ve got too many people losing their jobs or fearful of losing their jobs. We have way, way too much debt of all kinds and at all levels that will never be repaid in our lifetime. So defaults, strategic defaults, much more of this is coming.
Home sales will continue, but if you step back and look at the big picture, all of this is a line that’s going down. The whole question is how quickly.
22 postponed foreclosures = BS!
Let’s say on average mortgages cost around 2000 per month. (I’m sure this number is debateable)
Then let say on average the mortgages bring in $1500 per month to the banks. (Newer mortgages bring in more $$$)
$1500 x 22 = 33,000 per month in lost interest revenue for the banks. AND THIS IS JUST ONE CITY!
Banks are willing to take this loss becasue the taxpayer (through programs like TARP) GIVE them money at near zero percent interest.
When is this kind of thing going to piss you off?
Jim,
Was it karma that caused you to drive up on the car accident? A metaphor for our crashed economy?
“I’m Jim The Realtor” That’s funny. Good stuff.
Let me share with you the actual insanity down in the rabbit hole.
Through some digging, I find out who the “investor” is on a $1.15m option ARM mortgage that has been in default since February 2009 and that has had the trustee sale postponed for 9 months now. I write to tell them of a bidder ready to make a full credit bid at the trustee sale or who is prepared to buy the note at full face value. I summarize the history and explain why the investors interest is best served by liquidating the asset at auction or selling the note.
A guy from the major bank that is the “investor” calls me back to say that they’re just the trustee for the bondholders, and THEY DON”T MAKE DECISIONS OR APPROVE MODIFICATION, SHORT SALES OR ANYTHING. According to him, the servicer makes all those decisions and he’s not really sure at whose behest they make such decisions. His best guess is that they defer to the . . . wait for it . . . BORROWER!
Friends, my only stunned response is WTF? Is the system of securitized mortgages so badly organized that no one represents the interests of the actual owners of these nonperforming loans? Why would a servicer, who is supposed to just be an agent of the investor, be making decisions on whether or how to modify the loan or dispose of the asset backing the loan?
I am starting to realize that no one but the deadbeat borrowers seem to have any skin in this game, which is why the deadbeat borrowers are winning the war so far.
Totally, totally FUBAR.
My BIL is divorcing and the co-owned house is worth double the loan amount. The loan is not being paid. The bank started to foreclose immediately after the loan went into default. Profit is all the banks care about.
JTR,
1040 Sagebrush Rd
Carlsbad, CA 92011
Bought 06 paid 1.8m
Sold on 06/29/10 1.1m
Is this a real deal?
Could be some great deals coming up.
Maybe it’s just that people are finally losing the perception that buying a home is a “wealth building investment” and thinking of potential purchases in terms of what living experience they’d be getting for what they’d have to spend.
It seems to me that the population here is more heavily weighted toward investors than the population at large.
The losses on housing are so spread out (via CDO’s sold around the world), that likely no one instituion is taking that much of a loss. Also, by “extend and pretend”, this can go on for five years or more, so the writeoffs are only say 15% per year. With banks (and other financial institutions) borowing from the government at essentially zero, and loaning (to at least some borrowers),the profit margins are really pretty good. Add in all the “bank fees” these days, and I can see why the banks are in no hurry.
Time is also on their side – with almost no new houses being built, and the US population still growing, there could even be a housing shortage in 5 years. . .wouldn’t take much more than a 2% drop in unemployment to get things really hot again. Just my 2 cents.
Loved this video. I was wondering what the fsbo was going for, but never bothered to stop by and ask.
I wonder how long the big house, the one I it seemed like you wanted to stop by, will sit there rotting. There must be something wrong with it, or people really don’t want to live next to DMH road. I have seen lesser houses sell for more.
Your line at the end made me lol and wake my gf up.