[quote=pencilneck]”From the banks who gave out crappy loans to the buyers who bought more than they could reasonably afford. Neither side is paying the price for these stupid transactions.”
I think a whole lot of buyers who bought more than they could reasonably afford would probably disagree with you. In San Diego alone foreclosures are still nearly 1,000 a month.
And notices of default are no fun either. I’m not really defending people that buy stuff they can’t afford. But I think its a leap to say that they aren’t suffering.[/quote]
I’m not saying they’re having fun. I’m sure it’s incredibly stressful.
It’s also what they signed up for. They agreed to pay monthly payments on a mortgage in return for getting to live in a house – and if they’re lucky and stay there long enough – they’ll have a home that’s mortgage free after 30 years. If they don’t make the payments, they agreed that the house could be foreclosed. That’s the basic mortgage loan contract.
Under the current system, the foreclosure process is extended. Sure it’s stressful for the borrower to have to deal with the bank who regularly loses their paperwork… to have to submit documents to try to get a loan mod… But if they jump through the hoops – they can get a pretty long “free rent” ride. In some cases years of no mortgage payments and no rent. They benefit in a real, tangible way. This should offset some of the suffering and stress.
If they’re smart – they’re banking the money they would have put towards rent/mortgage so that they have a nest egg when they finally do get their walking papers. But we hear about the folks who a) were kicked out and b) had no savings or anyplace to go.
I feel bad for the folks who lost their jobs – and that kicked them into foreclosure. But they still should be foreclosed on if they can’t make the payments. Or they should short sell. The system where we’re supposed to feel like people living for free, for extended periods of time are victims never made sense to me.
Banks should absolutely have the right to foreclose. They also should do the proper paperwork and do it legally. And borrowers should have the right to get a few months free rent (minimum 4 months from last payment to trustee sale) if they can’t or won’t pay the mortgage.
