[quote=ucodegen][quote=CA renter][quote=ucodegen]The banks ‘delaying’ foreclosures were for two other reasons as well.
They were overloaded and were unprepared for this many.
Once the bank forecloses, they have to realize the mortgage/loan at the actual value that they can get from the property they have foreclosed upon, and therefore book the actual loss versus using the ‘paper’ value on the loan. Could make many more banks insolvent.[/quote]
Agreed, though I believe that they did know about the looming foreclosure crisis. They just had to pretend that “NOBODY could have seen it coming!” in order to make the bailouts more palatable to Joe Sixpack.[/quote]I have seen too many ‘banker’ types that don’t have a clue. All their ‘models’ are momentum based. Reversals happen so fast that momentum models can’t catch it until most of it is over or it is too late.[/quote]
You don’t need “models” to tell you that people who make $36,000/year can’t afford a $700K house. And you don’t need “models” to tell you that a typical maid and a gardener couple are NOT bringing in $250K/year, no matter how many times they write it down on their “no-doc” loan application. This isn’t rocket science. I do not believe for a second that the financial gurus truly didn’t know what they were doing. If this were true, then we should all be very, very afraid because these are the people running our economy, and they are being paid handsomely (the most overpaid people in our society) for doing so.
