Home Foreclosure Moratorium Over the Holidays again – so when is someone going to give me a moratorium on my mortgage payments?
“Some lenders have declared limited foreclosure moratoriums this year to give troubled borrowers time to catch up on their payments or work out other solutions. Those announcements continued Thursday: Mortgage titans Fannie Mae and Freddie Mac said they would suspend foreclosure evictions from Saturday to Jan. 3, and Citigroup Inc. said it would suspend some foreclosures and evictions from today to Jan. 17.”
This happened last year, and it’s happening again – banks just aren’t foreclosing like they should. Yes, I feel for my friends that made bad investments and are losing properties, but business is 
business! You make a bad business decision – you lose money/investment/house, or whatever it happens to be you invested in. It’s that simple! But once again, it is not fair to the rest of population that people who made bad business decisions, or even lied on their applications, get bailed out with our taxpayer money. We’re talking about living on the property for free for 1-2 yrs, or collecting rents for 12-24 months while the property is, or is not, being foreclosed on. It feels like for some, money does grow on trees. Especially if they got a 0% down loan originally.
Anyway, I am just venting because I lost money in my 401k’s plans and in the stock market, too, but nobody is lending me a helping hand! All of my tax money went towards bank bailouts, which are now withholding inventory (they can, thanks to the tax payer’s money), so that they can sell these properties back to me at a higher price later (did I just get wripped off twice here?). As an investor, I’ve been waiting for this recession and have been preparing for it. Unfortuntely, I can’t even pick up a decent deal these days because the prices are not where they would have been, had the government not been interfering with the economy.
By the way, the quote above is from an article on the Dr.HousingBubble blog, which is rated as one of the top 10 Business Real Estate blogs on Technorati (click here to see the other top 9 rated blogs).
So, what do you think about the latest home foreclosure moratoriums? Should the banks keep people (& investors) in their homes for free, or should they do what needs to be done?
27. December 2009 at 10:35 PM
I think you are right Angella. However, this makes me think, how come so many made so many bad decisions? was it lack of information? I am just curious why more than half of the population made the same decision to invest when they should not.
Monica Beltran -http://www.MonicaBeltran.com
Monica´s last blog ..Stop Selling Failure by Talking Yourself Out of Sucess
28. December 2009 at 1:39 PM
Angella,
Seriously? Screw the the poor guy facing foreclosure on Christmas eve? Do you have no heart? Come on!
Sure there are many people that bought at the wrong time, but what about the banks that were handing out money to people that didn’t deserve it?
You can complain about your retirement savings being lost in the Market, but there is risk in investing. And I do believe that the market has come back, currently the dow is above 10,000. So your family must have sold at the bottom, sounds like bad advice from a financial planner if you ask me…
If you want to have the banks dump all of the inventory on the markets at once, what do you think will happen? Maybe prices will drop even lower.
You seem to suffer from a belief that you should never change strategies no matter what the circumstances. I think that you should reconsider that.
All in all, I think that you are simplifying a complex problem and show a lack of understanding of what went on during the bubble, the bursting and the near collapse of the financial sytem. In short a “Jill” of all trades and a master of none.
28. December 2009 at 2:43 PM
Andy,
You need to read the article I was referencing, @ http://www.doctorhousingbubble.com/real-homes-of-genius-culver-city-housing-bubble-housing-shadow-inventory-in-action-countrywide-bank-owned-home-versus-duplex-on-same-block-foreclosure-holiday/, to get a better understanding of what I was agreeing with.
I’m in total agreement with the author of that blog post that the banks are responsible for the majority of the blame, but the other half does fall on the homeowners who signed the Notes. I’m sorry, but there are two guilty parties here, and I was just pointing out who the other guilty party is. I also do not believe that the tax payers should be bailing out either the banks or the homeowners. All of this political correctness of blaming ONLY the big corporations, and not the “little guy”, just doesn’t sit well with me. If you look on the Mortgage Notes, there’s only one signature there, and that’s of the borrower – the same borrower that defaulted on the loan and is in breach of a contract.
And yes, I lost money in the stock market, but I also recovered it by now. However, I never expected to be bailed out by anyone, and was willing to live with the consequences of NOT recovering that money. The point is that any investing is risky by definition, and if you do decide to invest – you have to deal with the consequences, good or bad. The same goes for buying real estate – it’s an investment the homeowners thought they’d be cashing in on, but the market went south instead. Well, they need to deal with it, according to the terms and conditions of the mortgage note they signed, period.
Rather than trying to drag out the foreclosure process and the eviction (and I know plenty of people who know how to work the system), and stay in the property for free at the tax payers’ expense, these homeowners need to move on. They know they can’t stay in their homes forever! They need to take the money they’ve saved by NOT paying their mortgages, rent a house, and buy another one in two years (per the shortened Fannie guidelines).
Anyway, someone who’s in foreclosure has known what’s coming up for at least a year, so you can’t tell me that they couldn’t have prepared for the inevitable, and would be surprised to be evicted during the Holidays. The process of foreclosing in itself takes almost a year. An eviction can take up to another year, and I know a number of families who have been foreclosed upon almost a year ago, and the eviction hasn’t even begun yet. That’s almost two years total! So how can somebody be unprepared for an eviction, or be totally broke, if they’ve known about it for at least a year and haven’t paid a penny in rents?
Although I have to admit – if I were the one in default, I would take every advantage of the situation myself. It would be silly not to! It’s no different than what’s going on with the families that stay on Welfare for generations – why get a job if someone just gives you a handout. It’s the system that needs to be changed so that it does not allow for such a waste of taxpayers’ money. I cannot blame the people for taking advantage of the system, but my point is that they should not be allowed to do it, period!
Your response is welcome,
Angella Raisian
Note: New Fannie Mae guidelines for purchasing a home two (2) years after a foreclosure are outlined here: http://angellaraisian.com/wp-content/uploads/Fannie-Mae-Guidelines.pdf. FHA guidelines require a three (3) year waiting period. http://AngellaRaisian.com
28. December 2009 at 4:15 PM
Angella:
This really is a double edged sword, you had some people buying things they couldn\’t afford and unscrupulous bankers and mortgage companies helping them do it.
We are definately see this gotta have it now attitude of our society come into play.
I see people every day with ballon notes, interest only loans, ARM\’s that they didn\’t understand but were sold them any way. I do agree that both parties need to be help accountable, but unfortunatley here in the United States accountablitity for ones actions isn\’t all that important.
I do believe that our mortgage industry needs to be revamped, you have to be able to prove you can pay the money back in order to get the loan. We also need to coach people that they can in live in smaller homes, take out 15 year fixed rate mortgages and pay them back early if possible. People need to realize that the sole purpose of a bank is to keep you in debt, they are not there to show you how to get out of it.
Financial education is severly lacking in this country and there will always be educated people preying on the uneducated.
This needs to change.
Mike
28. December 2009 at 4:52 PM
Mike,
I’m in total agreement with you – a lot of unscrupulous mortgage brokers and lenders were contributing to the problem in a major way. Also, the banks were funding loans before the contingencies were met, telling the loan brokers to just close the file and move on to the next one. It was pretty crazy! But most of all, we need some major regulations in the industry where people make the biggest purchases of their lives.
Sadly, a lot of the mortgage and real estate agents actually believed in the product they were selling, and ended up in the same predicament as their clients.
Also, in the good ol’ days, the fixed rate loans were regulated and had pretty strict qualifying guidelines, but the adjustable rate loans weren’t getting as much scrutiny. The fact that they would allow people to qualify based on a 6-12 month teaser rate was ridiculous in itself. Then the sub-prime loans came into play, and anyone, and I mean anyone, could get a loan. Same concept as I discussed before – somebody is handing you something, why not take it? However, as a responsible adult whose family’s future is at stake, and who’s making the biggest purchase of a lifetime – how can someone complete the transaction without understanding what they’re doing? Honestly, I just don’t get it.
I have encountered clients and buyers who tell me that they trust me, and will purchase whatever I recommend to them. I always tell them that they should not trust ANYONE, period. It’s their money on the line, and they need to make that final analysis and/or decision. I will explain the transaction and my understanding of it to them, but they should make that final decision a 100% on their own.
So yes, there should definitely be government oversight and regulation in the mortgage industry, like there was before anyone know what sub-prime loans were, and even more so. I hope that we have all learned from this last RE cycle, and that there will be stricter mortgage industry regulations implemented in the future. The sad thing is that the mortgage industry has so over-corrected itself, that even a perfect candidate can’t get a loan these days. Hopefully, it’s only a temporary situation
Angella
29. December 2009 at 9:48 AM
Angela, WOW!
You really know how to show a heart during the holiday season!
While I absolutely agree that the commercial side should get foreclosed upon when it is time, I have to say that I am not an advocate of the massive home foreclosures that are continuing across the United States.
While, yes, there were a number of persons that bought into homes that they could never have afforded (these guys have already been weeded out), the new foreclosures (and those in the foreseeable future) are the hard-working stiffs that may have seen their wages massively reduced and/or found themselves out of work for a period of time.
The “grow up” and “suck it in” to live on the streets while your home is auctioned off at the court house mentality seems a bit narrow in understanding the scope of what the implications are for all of us and all of our houses VALUE (or, as this trend continues, lack thereof).
To those of you that agree with the writer of this article, I simply shake my head and thank whatever power is out there that I am not in the residential real estate field.
29. December 2009 at 1:45 PM
Where do you get off calling an out of work Homebuilding executive making $250K+ who put $250k down on a $650k home, lost his job 2 years ago because wall street went crazy with no controls, someone who simply made a bad business decision and now needs to suck it up(loose his home and move out onto the street.
Girl, you need to wake up. This world does not revolve around you making money.
29. December 2009 at 2:50 PM
I agree with Angela that foreclosures need to continue to clear the market, but rather than more regulation of the industry, we need to get the federal government out of the industry. It was not evil rotten banks that decided to make loans that borrowers cound not afford. It was the federal government that required such loans be “created” and made. FNMA and FHLMC (i.e. the Federal Government) were the vehicles to make that happen. When they agreed to insure against default any loan written, including those written in order to satisfy the Fed’s dictate of “affordable” loans to lower income individuals, the money became free and the lender/mortgage brokers had nothing to lose and everything to gain by making any loan, regardless of how unlikely it was to be repaid. All of our financial and real estate problems can be traced back to the Federal Government sticking its nose into the market and requiring parties to do something they otherwise would not have done. It’s the law of unintended consequences. The government acts to right a “wrong” or make people feel good about what they are doing, and the unintended consequences screw us. Then the government comes along, blames the market players, and proposes a new fix to the problem. We’ve seen this show so many times before that you’d think we would learn not to let the government tinker with the markets, but we voters have short, short memories.
To “Out of Work” – the world may not revolve around Angela making money, but the economy of the world does revolve around people making money, and for the government to chose who wins and who loses, rather than the market, it a travesty of justice under the Constitution of the United States. The government should not be picking homeowners, banks, the auto industry or any other sector of the population to be the winners, while using all taxpayers’ money to make them winners.
To “Mike” – the industry doesn’t need to be revamped, it needs to go back to the way it had been. Lenders make loans that they are willing to own, rather than loans that they peddle to the Federal Government (or the Feds insure it against default), and get paid whether the loan is paid back or not.
TFA
29. December 2009 at 6:08 PM
You guys are really clueless, Good Luck!
30. December 2009 at 12:24 PM
Mayer Amchel Rothchild (1743-1812)
Let me issue and control a nations money, and I care not who writes its laws.
— Meyer Rothschild (Original Central Banker / Fed Chairman)
Thomas Jefferson SAID ; First thru Inflation-Next by Deflation
The American Bankers -If ,every given a Central Bank / or Fed
would ROB the Americans of everything the Founders built and destroy the Country
And ,Last but not Least the Bankers were a BIGGER threat than a Standing Army.
People who do not know their \"History\" are prisoners of it.
Too many Short Memories-!!!!!!!!!!
30. December 2009 at 4:28 PM
To “Out Of Work” – A lot of things need to change, and there are so many different facets to what caused our current economic downturn that we’ll never be able to cover them in this forum. However, just because we disagree, or our points of views overlap – that is no reason to be uncivil to each other.
Just state your opinion and let’s agree to disagree. There’s no reason to get personal.
Happy New Year everyone, and thanks for your input.
1. January 2010 at 9:24 AM
This is becoming a realty:
“If the American people ever allow private banks to control the issuance of their currency, first by inflation, and then by deflation, the banks and the corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their father’s conquered … I believe that banking institutions are more dangerous to our liberties than standing armies … The issuing power should be taken from the banks and restored to the Government, to whom it properly belongs.”
“The Colonies would gladly have borne the little tax on tea and other matters had it not been the poverty caused by the bad influence of the English bankers on the Parliament, which has caused in the Colonies hatred of England and the Revolutionary War.”
Taxation has been a red herring issue to disguise the corruption of the banking system and the impact of banks on the government.
1. January 2010 at 2:04 PM
Why is Barny in charge??
1. January 2010 at 2:12 PM
Because the same people who elected him, elected the rest of the Dems, like Maxine Waters. Her comment was: “Why are we trying to fix something if it ain’t broke”.
1. January 2010 at 2:32 PM
It was a rhetorical question lol
1. January 2010 at 2:36 PM
… And a good leading question for a video I didn’t want to post previously, because it was a little too biased as opposed to being more “neutral”. But what the heck, you started it John… LOL
1. January 2010 at 2:39 PM
We make a good team don’t we…. I setum up and you knockem down;-) Like George and Gracie
5. January 2010 at 6:43 PM
Here’s 60 more comments, in response to this post, on LinkedIn: http://www.linkedin.com/newsArticle?viewDiscussion=&articleID=99072852&gid=87042&split_page=3#comment_52