http://www.nytimes.com/2009/03/30/us/30walkaway.html?_r=1&ref=business "City officials and housing advocates here and in cities as varied as Buffalo, Kansas City, Mo., and Jacksonville, Fla., say they are seeing an unsettling development: Banks are quietly declining to take possession of properties at the end of the foreclosure process, most often because the cost of the ordeal â from legal fees to maintenance â exceeds the diminishing value of the real estate. The so-called bank walkaways rarely mean relief for the property owners, caught unaware months after the fact, and often mean additional financial burdens and bureaucratic headaches. Technically, they still owe on the mortgage, but as a practicality, rarely would a mortgage holder receive any more payments on the loan. The way mortgages are bundled and resold, it can be enormously time-consuming just trying to determine what company holds the loan on a property thought to be in foreclosure. " Especially when the bank can't find your loan anywhere
That amazes me... I have read of foreclosure cases that are dragging on as long a nine years to date.. the defendant simply asks the lender to prove that the defendant owes the money and they can't produce the documents.. you would think they would protect their own interests better than that... lawyers are advertising on radio stations in the LA area inviting people to bring their loan docs in and they will hit up the bank to see if the lender can defend their position at all.. it's a thriving business.... probably the lenders settle pretty quickly..
This is not suprising. Most of the "Banks" that were caugh in the sub-prime mess are insovent. Including BAC and CITI. What they are carrying on their balance sheet is pure bullshit. The next show to drop will be, what was just posted. Banks walking away from property......which brings their toxic waste to 100% loss. The current Depression, which will soon be inflationary, is in its adolence's. It took 4 years after the first Depression for unemployment to reach 24%. We are on our way, nice and steady. We need to Crash and burn in order to rebuild. WallStreet is finished as we know it, Investment Banking is gone, and so is the "Lending" end of things. Rules soon to be passed for basic credit cards is a sign of "Panic" and actually smart rules. (Do some research on what is about to be passed). Hard assets, LAND, GOLD, (Physical) OIL (physical not futures), FOODS (Physicals not futures or paper)...are what will survive. Anything "PAPER" will soon be destroyed in Value...much like the "PAPER" traded in the markets....from 14500 to 7400 or so right now. Pull up charts, clear your head and really think about what has happen in the last 7 months. For those of you who have money and are smart, Im sure you preparing for the worst. The rest, well get ready to Loot your way through society...if you don't get shot in the process of taking from those that have. Uncle Obama Isn't gona save you, the stock market or this country. Read up on RON PAUL.....his most recent statments say it all in a nutshell.
You can get stats from the Weimar Republic and do some back of the envelope calculations to see that stocks are going to be horrible in that scenario. They inflated much less than the currency which made them not toilet paper but... maybe they were good for wrapping fish in..... that is the bad news, worse for many of us is that futures will be right up there with stocks... That is one scenario, personally I'm all good to go in that scenario, but I can't see that trading financial instruments is going to be viable, maybe currencies.... I stopped telling people about it decades ago, it's like trying to get somebody to think about what they eat... all you are going to do is make enemies The other scenario is that we have a normal recession, a little longer than typical [it already is] a little deeper than typical [ditto], but Obama pulls it off, then we have to put up with European Socialism... or rather Obama trying to force it on the US where it really does not fit at all... I used to play poker with a lady from Sweden, she had a brush factory, I was curious what it was like having a business in a country where the income tax had been known to exceed annual income... she never said much, I guess she was able to make it go somehow and she had money for travel and poker... we'll have to learn to do the same thing.. I think it will make us all semi-criminals in the long run, socialism is theft of money from one party via threat of force and incarceration and giving it to another party... that makes a whole culture thieves or jailbirds I suppose...
Just another reason why this banking plan will never work. The banks are in complete denial or at least deception mode. The Geithner plan will lead to price discovery. The price discovery will finally show that the banks are insolvent. The fact that Treasury thinks it can turn dirt into gold is beyond stupidity.
There was another article today, that owners of expensive boats are abandoning them all over the place. Maybe I can find something in a nice 60 footer and live in it
Banks starting to walk away on foreclosures --------------- Imo, this is a good thing. In the respect that we need to toss out the rule book. But we need rules and we had good rules. No one played by the rules, what good is the rule book? Rules are made to be broken. Individually the rules have merit, collectively the rules had unintended consequences. We, I am sure are we all in agrement, there'll be a new set of rules to improve upon the last set of rules. Imo, Congress can write rules which ultimately are settled in court because they do not care and write sloppy law, OTH, the same Congress writes financial rules and they are settled in the market place.
what happens when the banks walk away from properties? an owner who forecloses his home is still liable for the mortgage payments? assuming that he doesn't pay, who eats all the shit at the end? This isn't making much sense to me....can someone clarify? regarding C BAC.....they probably have $100B loss on paper at this point........
I hear this argument quite frequently, but I still don't see the logic of it. There were absolutely no inflationary forces at play during the great depression, and I simply cannot see how anyone can make the case for an "inflationary depression". The definition of inflation is an expansion of cash and credit supply within an economy. The effect of inflation people have their eye on is an associated rise in the dollar-denominated cost of goods and services within the economy due to this dilution. The rate that consumer debt is being defaulted at is accelerating at an astounding pace. the underlying securities are branded toxic BECAUSE of this, and they continue to deteriorate at an aggravated pace as well. As a consequence, the government is seeking to prevent fair market price discovery of these "assets" at any cost to taxpayers. The banks are swallowing up as much cash as they can, as fast as they can, lest their balance sheets instantly cave in and they find themselves in a position of having to officially declare their insolvency. These balance sheets are black holes. No matter how much cash is printed or stolen from future productivity, it's instantly vaporized when it touches the banks' books. By law of supply and demand, absent manipulation, currency-denominated prices will only rise when the amount of cash / credit chasing the underlying goods / services rises first. Now I'm no economist, but anyone can see that society is getting poorer, and uncle sam doesn't seem to be interested in doling out cash to consumers like it has been doing to the banks. Consumers don't have access to the credit that drove the inflation of the so-called "credit boom". The banks cannot, should not, and will not lend until the leveraged debt clogging the world's economy is DEFAULTED ON and buried for good. This is going to take a long time, I think. How we will see prices rise through the latter stages of this depression is simply beyond me. rt