Many borrowers in default stay put as lenders delay evictions

Despite being months behind, many strapped residents are hanging on to their homes, essentially living rent-free. Pressure on banks to modify loans and a glut of inventory are driving the trend.

http://www.latimes.com/business/la-fi-squatters27-2010feb27,0,3096300.story

 

The only factor that drives the action of banks is money. The real estate market is so bad in some areas that the banks lose even more money if they foreclose. They know that the tenant will either trash (or bulldoze) the house and there will be a lot of expense involved in cleaning it up and trying to sell it. Plus, the more foreclosed homes on the market, the harder it is for them to sell other bank-owned homes. For now, it is less costly to let people live in their homes for free.

The banks are waiting for some new government program to infuse cash or for the market to improve. If real estate does not rebound, they will be forced to negotiate with tenants and write off past mortgage payments.

Maybe those financial advisors who said that paying off your house is not a wise financial decision were right after all.

 

Yes, when someone doesn’t pay their bills and stays, they are a loser. We are living “on pins and needles.” Yeah, right. Well, you should be. If they had some integrity, they would have moved. The only problem is the government thinking they are helping things by dragging out the process while also deciding contracts don’t really need to be honored. Maybe they should pay everyone’s bills while we are at it. Are things tough? Sure. But that doesn’t make the truth any different. The housing market will never heal if we keep enabling those who are a drain on the system to stay put. Sooner or latter all these homes will come onto the market. Maybe the government will pay my mortgage as well. As usual, we only reward bad behavior instead of good behavior.

Housing recovery? Yeah, right. Just more examples of how clueless the government is. These people and those like them are a disgrace. Of course they don’t see it that way, “it is not my fault.” Is it any wonder we are in such bad shape?

Good trading

TM

 

I used to think it was the borrowers fault, but now i think the government have an equal hand in it. They are the ones that mess with rates and make us use their currency that is not backed by anything. If there was no federal reserve and we used gold & silver, a 3bd 2ba house would cost about the same today as it did 100 years ago if kept in the exact same condition and the neighborhood stayed the same. If house prices didnt go up, people wouldnt speculate. People would buy homes to live in and your house would only go down in value if you didnt take care of your property.

Yes some of us saw this happening and were able to sell our houses for a huge profit, and some people were not smart enough and basically were duped into buying a house thinking of it as an investment. But a house is not an investment and people should not be penalized the same way as if they lost money in stocks when it comes to their house. Now...if the banks want to screw with interest rates and mess with the money supply, then the gamble should be 100% theirs.

I look at it like this...forget about market value for a second. A guy gets a mortgage on a house after putting 3% down. A year later he cant pay (or wont pay). He gives the house back to the bank in the same condition as he got it. That should even things out. He made his payments for a year,he put money down, so he is out those payments and the 3% and bank gets the exact same house back. A product was sold, a contract for deed was drawn up, Party A broke the contract, so the bank gets the house back. Its not his fault the home went down in value...its the banks fault.

Now...if the bank wants to "resell" the house back to the guy (we will call that "loan modification") then thats ok too. But the not too bright little guy should not be taking the hit for what the ivy league graduates created in the first place.

 

I bought my house in 2005 with about 10% down. I thought that would give me enough cushion if the market started going down. What I was not aware of was that my bank and other banks were financing my neighbors knowing that they would not be able to pay as agreed. Fast forward five years and all of the other town homes in my unit except mine and one other have been in forclosure. Now my unit is about 200k upside down.

As of now, I have continued to pay. When my mortgage resets in the fall, I might decide to mail in the keys.

Is that fair? Well, no. From the banks side, they think all borrowers should be forced to repay. From my side, I think the bank should have disclosed that they were intentionally undermining the value of the home I was purchasing by making reckless loans. Add to that the fact that I am now paying taxes to bail out the banks who undermined my property value AND to bail out other borrowers.

 

If you live in a recourse state, you can be forced to pay. But most of the people in bad trouble don't have the assets to pay anyway.

 

Yes, they could sue me. I am not too worried about that. Worst case in my opinion is that there would be a small settlement. I'm renting the house but the rent falls short about 20k a year as it is. The reason I have continued paying is because I am trying to do the right thing (and I think inflation is on the horizon). If my payment doubles in the fall, I wont continue to pay.

 

That is unfortunate your situation but no one forced anyone to get a loan. Perfect victim and it is not my fault attitude qwiktrade. Mailing in your keys will really show them (lol) but it is you who will ultimately pay in the long run. Please explain to us how your bank was encouraged to give loans they knew would default and how you know. If you say you can afford it and then decide you can’t it is your fault and no one else’s. The fact is your neighbors got loans they couldn’t afford but wanted to be homeowners anyway because they “deserve it.” If you can’t afford a loan, don’t sign the docs and get a loan. Pretty simple in a non-victim world.

If you got an adjustable rate mortgage when the rates are the lowest in the history of lending and didn’t expect them to eventually reset and have a higher payment, then you have no one to blame but yourself. If you couldn’t afford a higher payment after reset, you overbought your means. Again, pretty simple in an adult world. Get a fixed rate loan if you don’t want to take that risk. I know, that would be taking responsibility for your actions. Sorry, I know these days we can’t expect you to do that.

Of course in today’s society, it is always someone else’s fault for my/our/your problems. Grow up and take responsibility. It is unfortunate that this is not encouraged these days. Thanks for outing yourself as someone else who deserves to be on my ignore list. Just another example of what is wrong with the US today.

BM

 

Just about everyone can agree that banks are ruthless and sneaky. They brought all this on themselves. They take our deposits and loan them back to us at interest. What a rigged game. I will never borrow from a bank again. I will pay off my home and stay here till the end.


Just keep in mind you may not be able to buy another home for a while.

 

What are you a spokes person for the national bankers association.

So the average citizen should be held accountable for his bad behavior, but congress and the big financial institutions get a pass.

The example starts at the top, how dare you question the little guy when the most powerful men running this country in reality have bankrupted the nation.