Posts tagged as Mortgages
Do Not Under (Almost) Any Circumstances Buy a Home
Bank of America is paying just $20 million for having foreclosed improperly on 160 active-duty military service personnel. (This, of course, was frequent predatory lender suit-settler Countrywide in action; Bank of America purchased Countrywide in January, 2008, for $4.1 billion in stock, and has paid for it more and more ever since, including the former CEO's SEC settlements.) But $20 million! That's nothing, in the grand scheme of the forthcoming housing disaster. For one thing, there are about half as many foreclosed houses being sold now as there were two years go: at this new pace, "it would take exactly three years to clear the current inventory of 1.9 million properties already on the banks’ books, or in foreclosure." And then there will be no houses in foreclosure! Just kidding. There'll be tons more! Both new ones, and let's not forget that litigation has stalled a huge number of foreclosures. All that will get dumped on the market, even as housing prices are down 33.1 percent from summer of 2006 and 28% of all single-family mortgages are underwater.
The Rain in Spain Something Something on the Debt-Ridded Homeless
I'm not quite sure what the Times means by "personal liability mortgages" in their fascinating story today on the insanity of foreclosures in Spain, because that phrase doesn't really exist in English. But, yow, I did have no idea that repossession wasn't the end of owing money on loans and mortgages, and that mortgage debt was excluded from bankruptcies in Spain. Maybe there are actually ways in which the U.S. looks out for individuals that is better for people than they way it is done in Europe! Huh. Still, it is hilarious to look back at this BusinessWeek article from 2007, which declares Europe's mortgage and housing and banking industries to be sound and untouchable, while now we are talking about "Spain’s giddy real estate boom" and 1.4 million people there are facing foreclosure.
The Last Mortgage Robo-Barons
For people saddled with unsustainable mortgage payments, foreclosure proceedings come with a heavy emphasis on the "closure" part-since they mean eviction, devastated credit and near-permanent status as a financial pariah. But the purveyors of the fraudulent debt instruments behind the nation's present foreclosure tsunami play, as always, by a different set of rules. For even in managing the wind-down of home loans poisoned by their own special brand of recklessly securitized debt, American banks continue hewing to the same fee-seeking, asset-stripping mode of enterprise that originally jeopardized the U.S. housing market, and much of the broader economy along with it. Now, as then, they've distorted the housing market with howlingly unprofessional and dubiously legal conduct. And now, as then, they're pursuing short-term financial incentives that have nothing to do with the actual provisions in the contracts they're legally obligated to honor. READ MORE
Graphed: U.S. Foreclosures and Home Repossessions, 2005 to 2010
It's hard to get a sense of what's going on in America with foreclosure filings, the number of homes being foreclosed on and the actual number of houses being taken back by banks. The newspapers are confusing! Are they "down"? Are they "up"? So we dug up the actual numbers for each year since 2005, up to the projected numbers for 2010. A "foreclosure filing" can be a number of things, including notice of default, auction or seizure-which is why the actual number of houses receiving these notices is a useful number to know.
"But in a market society, since when are people responsible for the economic effects of their actions? "
I wanted a little bit more reasoning and example on this "THE WAY WE LIVE NOW" piece from this upcoming New York Times mag, which says that people should abandon their underwater mortgages (true!). He writes: "Mortgage holders do sign a promissory note, which is a promise to pay. But the contract explicitly details the penalty for nonpayment – surrender of the property. The borrower isn't escaping the consequences; he is suffering them." Sure! There is of course often the complication that then, you know, people have to find somewhere else to live.
Nearly 1 in 10 U.S. Mortgages Are Delinquent
9.12% of U.S. mortgages are delinquent-excluding houses already in foreclosure. (Last December: 7.17%. Last September: 6.41%.) An additional 3.85% of U.S. homes with mortgages are already in foreclosure.
Goldman Sachs Gives 210K MA Households $238
Amazing news! Goldman Sachs just settled with the state of Massachusetts, on the claim that Goldman helped create the subprime housing crisis. So, you know, if there are 210,000 Massachusetts mortgages underwater, which the AP said in March, and Goldman Sachs just gave Mass. homeowners $50,000,00... math says that is a whopping $238.09 per household! That is like the lowest amount of food stamps you can qualify for a month.
