Another Nasty Side To The Foreclosure Debacle
As if the foreclosures alone weren’t wreaking enough havoc on our economy, we also find out the whole process is starting to hurt our local cities in other ways we didn’t imagine:
Cincinnati wants Deutsche Bank and Wells Fargo to pay for what officials say is neglect of foreclosed-upon properties that's worsening blight in city neighborhoods.
The banks own more than 100 properties in Hamilton County.
Representatives appear often in local courts to prosecute foreclosure actions against property owners, the city says in a lawsuit, but don't show up when Cincinnati asks them to maintain abandoned properties titled to them. The city wants repayment for boarding up, demolishing and the other work done to Deutsche and Wells Fargo properties. The suit didn't specify an amount.
It really upsets me when I hear people on the right try to say the foreclosure problem is from greedy people trying to live outside of their means, and we should let them suffer. Sure there are a lot of foreclosures that are the product of people over-extending themselves, but just ignoring that leads to these costs being passed onto struggling local governments. Not only that, but it also effects the former neighbors of these foreclosed homeowners. People sit there and pay their mortgages on time, take pride in their home ownership and try to make something good out of the largest investment they will most likely ever make. In turn, they get rewarded with lower property values, because of a foreclosed house turned abandoned by the bank, now devaluing up their neighborhood.
I got a feeling the lawsuit being brought on by Cincinnati is only the start of it. We will see more cities follow suit (no pun intended) down the road as they realize how much this nightmare is costing them. Then the banks will want to recoup the costs of these lawsuits and having to actually maintain the properties they couldn’t wait to foreclose on. Of course the banks are only worried about their own well being. Why should they worry that your own property value is also being decreased, or that your local government is having to absorb some big costs associated with the foreclosures?
Pandora’s Box is just now opening, and without interaction by Congress, in the form of a homeowner bailout/rescue, we will be facing a vicious cycle that will continue for some time to come and cost all of us more than we could imagine. Until that happens, merry Christmas from the Bush/Republican economy.
(cross posted at IntoxiNation)
Save the fat cats and drown everybody else...sounds like good ole' Republicans values to me!
and it kills me to hear these fools claim to be more Christian then everyone else. Who would Jesus neglect?
Silly me, I thought we've been giving hand-outs to the banks so they'd redo the mortgages that are collapsing and ease up credit for others.
Guess we didn't give them enough, how about we all send in our first born and right arm? I mean, its for the bankers guys!
The degradation of neighborhoods due to foreclosure is no secret. But after reading the above, I feel that it could be an opportunity. The housing market and construction are in the toilet now; what better way to keep those people working than to have part of the stimulus go to maintaining (and improving) these properties.
And bill the banks too. But get people working first and keep the property tax values from crashing more.
Let's see... The banks foreclose, which means they aren't getting any payments at all. The value of the property has dropped, and is continuing to drop even more because the abandoned homes drive down the whole neighborhood. The abandoned homes are vandalized, reducing their value further. And credit has tightened up so much that nobody can get a mortgage.
And now the city is suing the banks.... SWEET!!! This disaster was brought to you by "free markets," also known as Corporate Anarchy. Maybe they'll come to realize that there is no game if there are no rules and no referees.
The Republicans are trying to blame Democrats and civil rights leaders for promoting easier credit for low income people to buy houses. But the biggest cheerleader was George W. Bush, encouraging developement of an "ownership society," believing it would lead to more stable communities.
Ding ding, today's winner!
Nicely articulated, and Meeerry Christmas from corporate America - the GOP! It's a great republican economy. Especially if your a morally challenged, millionaire-republican crony!
Rush Limbaugh is what a smart person thinks a stupid bigot sounds like.
American Heritage Foundation (Dec 5, 2003):
American Dream Downpayment Act: Fiscally Irresponsible and Redundant to Existing Homeownership Programs
Democracy is too important to be entrusted to politicians.
Rise Up!
Protest!
Well they got their wish. Welcome to the 1930’s redux.
They want to go back to Charles Dicken's Victorian England, with a landed aristocracy of never-taxed inherited wealth for them, and class-based poverty, poor houses and debtor's prisons for the rest of us.
That's what the death tax was really all about, ensuring that they could acquire and keep extreme wealth through inheritance without taxation.
And they have almost achieved their goal.
need to rise up, demand justice, and obtain justice by any means necessary.
Meantime, best holiday wishes to all here.
We already do this with drug cases. Just have the city/local government confiscate the boarded up homes and auction them off. At least that way people who want to live in them get to live in them.
..there's a restriction that a bidder owns no other properties.
If a city can take a house from someone to build a strip mail because it of more value to the city(taxes), then why not take a house that's been abandoned by a bank and will have to be torn down on the cities dime after random people strip the guts of the house out. Give it back to the family that was living there or to another family for a sane 30 years mortgage to the city. Save the neighborhood and the cities tax base.
Once you have to tare down a house it worth less then nothing, it costs money.
Aye and the rub is
We'll be paying boosh $600,000.00 a year for the rest of his life.
Diabolus est Deus Inversus
Isn't that socialism? Living off the taxpayer?
Rush Limbaugh is what a smart person thinks a stupid bigot sounds like.
No, that's Soylent Green.
http://www.youtube.com/watch?v=uBPUvsudXmE&fe...
Diabolus est Deus Inversus
if Bush had been impeached. Thank you, Congressional Dems.
another reason to convict the war criminal
I'm not saying they shouldn't do it, but if they do, do a home owner bailout... Where do you draw the line? How far back do you go? What happens to the people that bought foreclosed homes?
Not an issue - a homeowner bailout would do nothing for people that have already lost their homes, and have no affect on the legal status of the foreclosed properties.
This problem has been know for a while. If you want a good report to watch on this subject, watch this.... It was aired back in July on PBS.
http://www.pbs.org/moyers/journal/07182008/wa...
Meanwhile, who is paying the property taxes on these houses? There are repo'd houses near me that have a $1000-a-month property tax liability. If the banks don't pay it, will the cities and towns end up owning these properties for tax leins? If the banks DO pay it, shouldn't they be asking themselves if it wouldn't be less expensive just to let the (former) owners keep their houses until they can afford the payments?
In addition to the taxes, we should make them pay the upkeep.
The more the banks have to pay to maintain an empty house, the more likely they are to keep people in them - even if it means forgiving some payments or refinancing. They won't do it because they're nice, but they'll do it if it saves them money.
If the owner is the bank, the bank must pay all taxes and tax liens before title can be conveyed to a new owner. If the bank takes back the house with back-taxes owing, they can try and add the amount of back taxes to the debt owed by the ex-owner, but they have little chance of collecting from the foreclosed-on ex-owner, and they cannot resell the house with outstanding taxes, because ownership cannot be legally transferred, or conveyed, if there are liens, or 'clouds' on the title.
And, believe me, banks aren't looking at whether it would be less expensive to let owners stay in their homes. In fact, they seem to be operating from the opposite principal: no matter how harmful it is to communities and country, they don't care, they'd rather foreclose. They aren't here to help us. They're going to take the bail-out cash and still write off all their losses.
Trust me, someone is coming out of this richer, and it won't be us.
Now the scum come out of the woodwork from the IMF to tell us just how serious things are? Where the hell were they a year ago in December 2007 when the recession actually started? Do we really require another stuffed suit telling us how bad things are or how much more worse they are going to get? Obama has already tipped his had, reading the tea leafs by proclaiming it's going to get a lot worse before it gets better.
But no matter how bad it gets, in order to lay claime that your a true blue American, you'll have to pay a price for that previlage. The cost? Help those from Washington to Wall Street who bankrupted us by allowing them to enjoy the holidays and giving them their year end bonuses.
The most glaring example is AIG. AIG pays out $400 million in bonuses with taxpayer money. The Company defends this as necessary to keep top talent? Top talent? What the hell are they talking about? This is the "top talent" that created the multi-hundred billion dollar catastrophe that Henry Paulson is using taxpayer money to monetize, fraudulently I would argue. And make no mistake about this, I have looked at the publicly available numbers for AIG and have concluded that AIG will require at least $1 trillion to keep it alive. Others are finally somewhat agreeing as I've seen recent media published estimates of $400-500 billion. Eventually they'll come my way. AIG is being kept alive with taxpayer money in order to defend the massive counterparty deriviatives risk exposure of Goldman Sachs, JP Morgan and Morgan Stanley, among others. This is the ONLY reason and taxpayers are subsidizing the nice Christmas that will be had by AIG and Hank Paulson all the other Wall Street crooks who are looting our system. I ask again, where the hell is the outrage?
Hope all enjoy the holidays as best they can. While the crowds from Wall Street to Washington dine on caviar and champaign compliments of the US tax payer and Congress, what's left of the middle class gets to enjoy spam and Mountain Dew.
The outrage is right here, for one.
Here is my most recent comment on AIG buying CDOs for the which they had written CDS.
I am still looking for hard numbers on mezzanine and other synthetic CDOs in the system.
These crooks should be in a docket. Instead we just pass the money out by the truckload.
statusquObama, change you can only pretend in
The news just seems to get worse and worse. I hope Obama can turn this around...meanwhile, on a lighetr note, we can laugh our way to the poorhouse here:
http://tv1.com/playlists/104
I don't know what to make of this. Home ownership is the American Dream. Having your own home is such a huge issue with so many people.
Is it wrong for them to take a shot when the loaning institutions are willing to loan them the money?
The topic( for me anyway) is qualifying for the loan.period.
No matter how you look at it, you still have to qualify.
If you don't qualify, you need to figure how too.
I don't want to sound like a cold hearted bastard on this.
But, if you can't qualify, the bank will and should turn you down.
That's the business they're in.
Everyone has the right to try though. So I don't see this as being a buyers consequence. It falls on the people who approved these loans.
I don't fault the people who over extended themselves. All they did was try to fulfill a dream. They saw an opportunity, and they jumped at the chance. This is America. The land of opportunity.
Too me, it was greed that screwed this whole thing up.
People were buying homes to flip them and turn a (huge) profit.
But when the house of cards came crashing down, they had nothing to back up their investment. Those people took a wild chance, and lost.
They can go to hell as far as I'm concerned.
But this is affecting people who do pay their bills on time. And who are not late on payments. They deserve a little help. They've earned it. (Provided they can prove that they've been consistently on time with their payments)
Other than that, the banks and loaning institutions can take it in the shorts.
I really don't know what the remedy is to this.
But I do think that there should be more people going to jail.
What is your conceptual, continuity?
I have been studying this intently, at some point I will say what the greatest villain, to me, has been.
Right now, the leading candidate was the ability of loan originators to sell the loans without retaining any link in liability.
Maybe there were some who still acted responsibly but many did not.
The ones who did not pumped up prices, they got appraisers to go along, and they ignored lack of qualifications, in fact they may even have encouraged them, because they were going to sell the loan and the all it meant to them was a quick inflated fee.
Loans can still be sold but there is no market, it is dead, for now.
Now anyone originating a loan is going to be on the hook for the loss, they are being extraordinarily careful.
They should have been all the while but the repeal of Glass Steagall in 1999 gave them the legal means for the folly that ensued.
statusquObama, change you can only pretend in
But right now, I can't recall who is responsible for repealing the Glass Steagall Act. Gramm?
What is your conceptual, continuity?
Graham-Leach-Bliley Act 1999 aka Financial Services Modernization Act - FSMA - Repealed Glass Steagall 1933 - This allowed Commercial, Investment banks and Insurance companies to merge and sell mortgages and most anything else to other banks as investments. Mortgages, credit card debt, auto loans, you can pretty much name it, it became a security.
The Commodity Futures Modernization Act of 2000 - CFMA - kept Credit Default Swaps from being regulated as futures contracts, among other things.
Both were championed by Phil Gramm and signed by President Willy Wonka.
These were the leading legislative villains IMHO.
As John Kenneth Galbraith said:
'Once the last of those that got us out of the Great Depression pass from the scene, those that follow will figure out a way to have another one.'
They were right on cue.
statusquObama, change you can only pretend in
That's what I thought. But, wasn't it called the Gramm Billehm Act ? or is that something different?
Anyway, Thanks for getting me back up to speed.
My Bro in Law is a staunch GOPer. He blames Jimmy Carter.
Don't ask, All I could do was laugh out loud.
I'm going to cut and paste your comment and mail it to him.
Rest assured, It's gonna send him through the roof.:)
What is your conceptual, continuity?
Here it is correctly referred to as Gramm-Leach-Bliley Act of 1999.
Elsewhere it is shown as Graham-Leach-Bliley, my incorrect assumption had been that it was Lindsay Graham.
Carter and CRA - Community Reinvestment Act have been the favorite targets of the right wing.
Here is a speech by Randall S. Kroszner at a Federal Reserve Board of Governors meeting in which he addressed the very issue of the CRA and default rates.
The Federal Reserve Board of Governors is about as far from a group of flaming liberals as you will get.
Tell your Bro in law that Carter and CRA didn't have anything to do with it, those were Commercial banks following Federal Loan regulations. The default rate has been low but everyone, even upper middle class have been hit by falling property values with corresponding increased default rates.
The subprime lenders were unregulated and their loans were the first to go down but there is an entire other set coming down the pike right now.
Alt A and option ARM mortgages that will be about 1.5 times the amount of the subprime.
We are a long ways from being out of the woods. Here is 60 minutes.
Tell your Bro there is loads of blame to go around.
Wall Street Greed is at the helm. Both parties are bought and paid for with Wall Street cash. It is the best government that Wall Street can buy.
statusquObama, change you can only pretend in
Simple solution: enact a local bylaw that says the city can seize property from non-resident owners of foreclosed properties if the houses are not maintained up to standards within 30 days of notification.
Then let the cities sell the houses (which it obtained for nothing) at a profit, with the former mortgage holder given the first right to bid at 25% of the home's value. It's good for the city regardless of what happens, good for the mortgage holders, and good for the neighborhoods.
Here's what else you don't know about this: many of the banks are expecting the real estate agents to pick up the tab for utilities, repairs and maintenance of these foreclosed homes while they're for sale.
Agents are dropping out of the business because they can't survive in this market, but banks expect them to pay for this stuff up front if they want the listings. Then they try to cut the agent's commissions at the closing table or threaten to not do the deal.
The banks are also making it almost impossible to sell these homes when they are short sales. Short sales are homes that are not yet foreclosed on but cannot sell for what is owed and the owner can no longer pay the mortgage, usually because it has adjusted up dramatically. (I have a client now, an older disabled woman, whose Countrywide mortgage doubled in less than 18 months.)
And the same banks that begged for the bail-out act as if they do NOT want to sell these homes. They put them on the market at a certain price and then either turn down full-price offers or drag the process out for months until the buyers give up. Then the homes become bank-owned foreclosures and sit for a year or so, neglected and abandoned.
There should be an investigation into the massive fraud and negligence these banks are perpetrating. I personally know of many homes that could have sold to new owners but have not because of the direct actions, or non-actions, of banks and mortgage companies.
And it has gotten worse since they got their $700 billion bail-out.
Someone is waiting in the wings to scoop up massive amounts of properties when they finally are selling for pennies on the dollar - and, no, we aren't there yet. But when - if - prices do drop that low, a new generation of slum landlords are waiting in the wings to buy, buy, buy. And the banks will write off all the losses they deliberately generated and we'll be expected to pick up that tab too.
"Not only that, but it also effects the former neighbors of these foreclosed homeowners."
AFFECT, not EFFECT. You can affect (cause) a change but you feel the effects (results) of the change.
pet peeve...
The sheriff department could stop refusing to provide services for evicting homeowners.
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