More Sub-Prime Scallawaggery
To follow-up on a previous posting (in re “I can’t pay my mortgage and I won’t move out“) I note the newest wrinkle: banks bribing squatters not to trash the house during an eviction.
To review the bidding, socio-politico-economic forces led us into a situation where pretty much everyone was happy with people buying homes they couldn’t afford, at terms they couldn’t meet, for properties that were carried on the books at more than they were worth [speculators, flippers, builders, race hustlers, municipalities, and regulators all joined in the fun].
This went on for several years, and everyone was happy. People got to live in better houses than they could afford, and pay very little for them. Builders sold properties (and built even more!). Banks and mortgage companies shifted risk into the future, secured by value that didn’t exist. Borrowers who wouldn’t normally get loans did. TV shows actually showed us how to buy homes on “interest only” notes as long as we could sell them before the ARM ballooned and make money on the artificial value increases. Prioperty tax revenues flowed into municipalities like rivers of milk and honey. Fund categories were created to continue the illusion; look, The Share Price Just Went Up!
The problem (as with *all* pyramid schemes) is that eventually we run out of new suckers to buy into the scam. At that point, the underlying value of what is being traded becomes important. If the “paper” value of the assets greatly exceeds the “actual” value of the assets (hmmm what happens to the value of a product when supply outstrips demand?). After decades of overbuilding, the “air was let out of the balloon” in many markets.
The same people who “made” $$$ all of a sudden “lost” $$$.
So here we are.
1. Experts are urging people to live in their foreclosed properties for up to a year and “slow roll” the eviction process [note: At least 8 months is possible in just about every state. Apparently, the key is to just stop making payments to your lender, and not acknowledge that anything is amiss. You don’t even need a laywer in every case. It takes that long before someone with a gun actually shows up at your door.] ; and
2. An alarming trend of ex-homeowners trashing the homes on their way out has developed. Recent WSJ article noted that several banks/mortgage lenders are now hiring agents to go from home to home offering thousands of dollars to tenants to not trash the property while leaving.
So you simply sieze the property for up to a year and then demand a bribe so as to not reduce it’s value further.
AND WE WANT TO GIVE A BAILOUT TO THESE PEOPLE?!?!
the other steve