Monday, January 28, 2013

Why the pause in Foreclosures?

Kat23 (Telegram Comments) has it right about the prospects, why new home sales aren't about to rebound. 

Foreclosures are off because the banks are taking a drubbing in the courts and legislatures and are trying to figure a new way forward. This is because their blatantly unlawful ways are catching up with them - and because homeowners are losing their fear of them and learning how to fight back! 

At every step of the way, from their part in creating the "housing bubble" all the way through to their management of properties post eviction they have been ignoring local, state and Federal laws. From their shady and deceptive practices in selling mortgages that are bound to fail (and then betting against them) to their violation of common sense, decency and legality in their loan modification negotiations, the banks have treated their borrowers as chumps, marks and victims. 

From the dubious legality of their securitization process and all the mortgage-backed securities they've foisted on gullible investors, the sloppy and illegal way they've separated the ownership of the principal from the claim on the income flow and the claim on the fees for servicing the mortgage, and their wholesale failure to follow state laws in transferring ownership from one bank to another, to to the illegal way in which they've prepared, filed and pursued foreclosures (think rob-signing,) they've trashed our entire system of real property and treated the investors as chumps. 

Even in the conduct of the foreclosure itself they've systematically flouted the law. Now we find they have completely, systematically ignored their commitments to the Attorney General in the recent settlement to end the robo-signing. 

Now that this is catching up with them they're pausing, perhaps trying to figure out how to use their control of the Federal Government to bypass our state and local courts and laws. 

In the meantime we should take courage and congratulate each other - those stats tell us we are winning for now! 
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