by Thom Nadeau
Those so thoroughly snookered in the many bank borrowing scams that jacked up, looted and then laid waste to home “values” continue to refuse to come to grips with the home value decline.
Oh, more and more of them have tumbled to the fact that they are upside-down on their home value v. house payments ratio, but they are dealing with them in the wrong way.
They simply stop making their mortgage payments, sock away the “savings” for get-away money and then camp out in their unpaid-for homes waiting for the chickens to come home to roost before moving on. Two years of no-payments is not an unusual grace period these days, news reports indicate.
Things got even more complicated when those banks that have moved to foreclose now have had their actions challenged.
Major US banks systematically faked documents in order to speed up foreclosures for hundreds of thousands of homeowners, a mounting body of evidence shows. It appears likely that federal and state laws were broken in the process.
The scandal speaks both to the dimensions of the social crisis and the criminality of the big banks. The immediate cause of the mortgage lenders’ rampant cheating on foreclosure paperwork is the tidal wave of families ruined by the economic crisis—a crisis itself set into motion by the banks’ predatory lending practices. The goal was to get people out of their homes as efficiently and ruthlessly as possible, skating over legal requirements relating to documentation.
Politicians have responded with calls for investigations and temporary suspensions of foreclosures. Speaker of the House Nancy Pelosi and 30 other California representatives this week demanded a federal investigation into the mortgage lending industry in a letter sent to the Justice Department. Democratic Senators Al Franken of Minnesota and Robert Menendez of New Jersey on Tuesday requested an investigation from the Government Accountability Office into the role of government regulatory agencies in allowing the abuses to take place. Attorneys general in a number of states have launched investigations, and foreclosures have been temporarily stopped in a few.
This pre-election concern for embattled homeowners is dishonest to the core. In fact, the entire process of dispossessing Americans from their homes has been facilitated by politicians of both parties, and in particular President Obama, whose bogus “housing rescue” of 2009 did nothing to address the root cause of the disaster: the fact that mortgages are vastly overvalued and not at all symmetrical to the incomes of US workers. This has left millions of homeowners “underwater”—owing more to banks on their homes than the market value.
Real estate savvy buyers and disgruntled renters are now saying, “First, prove you actually own this home you’re trying to foreclose on, or trying to make me pay for.”
That’s something many banks cannot now do because they are finding themselves locked into the limbo – Or should that be purgatory? – their own scams concocted: bundle, doctor, securitize and sell off in bunches of worthless documents.
Couple this with the vicious one-two punch currently going on right now of lower pay and rising prices and you have a problem on with only one solution: commensurately lower house prices and lower rents.
The looters and scammers who rode the upswing now have to take the downward hit they were warned over and over and over again was coming whether they wanted to believe it or not.
As it is, the looter scammers think they can solve their problems by charging others more even as the resources of the “others” are plunging.
It can’t be done; foolish even to think it might be.
The cry-baby banks and landlords that are so noisily complaining that they have their backs to the wall and want others to fork up the money to get them out of their problems have to realize that’s not going to happen.
Not now. Not soon. Not eventually. But never. They have to come to grips with it.
The property moguls have to realize they have a very limited range of options.
They can 1): Continue to charge what they have been, even raise prices as “push” closes in on “shove.” Yes, they can continue to can continue to follow that strategy until the occupants have abandoned the property and moved on to cheaper regions, leaving that over-priced property to rot until it is totally worthless.
Or, they can 2): Adjust their greed downwards. Charge less. Keep the property occupied biding its time for better days. If the better times never come, at least it will still be worth something instead of nothing, as it surely will be soon enough, if the property owners stick with their current thinking.
Meanwhile, here are some living cheap and growing food links to help those still struggling to hold on to their properties, those who are squatting on the properties waiting for the two or three years it will take for the courts to sort out who actually owns them, and, for the few forward-looking landlord magnates now plunging into penury.
For those who want to live cheaper and eat healthier, here is the 10-in-10 diet