When subprime borrowers defaulted and lenders foreclosed, the bottom fell out of the housing market. As the distress from toxic mortgage debt worked its way up the housing ladder, each subsequent rung collapsed. Only the upper tiers remain inflated, although probably not for much longer. With the collapse of the bottom of the market, the equity vanished that is necessary to sustain the upper levels of the housing market. In order for the housing market to find a stable bottom, [Read More...]
To be underwater with a cost of ownership exceeding a comparable rental is to be trapped in a debtor’s prison. Loan owners in these circumstances have few good options. If they move and rent the house, they lose money each month until rents rise enough to allow them to break even. In a weak economy with stagnant wage growth, it may be a very long time before these owners get back to even on a payment basis. If they sell, [Read More...]
Most people who leave their houses behind under duress believe they have no liability. Even the ones who suspect they might will generally duck their lender's calls and letters and hope the problem goes away on its own. It won't. California recently passed legislation barring lenders from seeking collection on deficiencies after a short sale. Of course, this has merely contributed to the already slow pace of short sale approvals. California borrowers already had non-recourse protections on purchase-money mortgages, and [Read More...]
Most people who leave their houses behind under duress believe they have no liability. Even the ones who suspect they might will generally duck their lender’s calls and letters and hope the problem goes away on its own. It won’t. California recently passed legislation barring lenders from seeking collection on deficiencies after a short sale. Of course, this has merely contributed to the already slow pace of short sale approvals. California borrowers already had non-recourse protections on purchase-money mortgages, and [Read More...]
Foreclosure sob stories always seem to lack a few pertinent details explaining exactly how the unfortunate circumstances came to pass. Today’s featured article is written by a renting former owner who works at the newspaper. She tries to portray herself as a victim, but in reality, she is only a victim of her own poor decisions. No refuge from the mortgage crisis A homeowner tries to work with bankers to hold on to her modest but beloved house, but her [Read More...]
The Debt Star has cleared the planet….. For now fellow IHB readers we’re going to a galaxy far, far away. Circling planet Overborrow_ 92620 are the giant Star Destroyers, each packed with dastardly bankers and fearsome asset managers. The Armada, comprised mainly of BofA, Wells Fargo, Citi, and Chase, has tried their best to level the planet and reclaim it’s wealth. For now, Rebel forces have held off the Imperials believing the longer they stand and fight, the sooner will [Read More...]
Lenders really need to let go. They blew it. It’s over. Just let it die. Both the lender and the borrower pay a price — or at least they are supposed to. Instead, we bail them out, and we pay the price. Don’t forget about us who pay for their mistakes. Part of the price we pay is obvious in the accounting for the various bailouts, but much of the price we pay is hidden in higher home prices, greater public indebtedness, and [Read More...]
Astute Observations