Foreclosure freeze conspiracy theory

[davelj]

There is a certain irony in this situation. In an effort to appease the blow-out-the-foreclosures faction (who understandably want more and rapid foreclosures so that prices decline), among others, the servicers pushed harder than they were operationally able and cut corners to, well, blow out the foreclosures. Now the cutting of those corners has led to the legal system forcing them to slow down the foreclosure machine. Now, clearly this is principally the servicers’ fault (as opposed to the lenders, although sometimes they are one and the same) and a good example of what I’ve discussed here many times previously: the servicers are over-loaded and don’t have the manpower (due to lack of financial resources) to process all of these foreclosures. So they cut corners and here we are. I’m not saying this isn’t the servicers’ fault – it most certainly is. They should bite the bullet, forgo profits, and hire and train enough people to do the job properly. I imagine, however, that this would result in such large losses that it’s not even possible. But, in any case, it’s ironic that the groups pressuring the servicers to speed up the process and blow out foreclosures have achieved the exact opposite: now this process will be going on for an even longer period of time. This is the legal system officially, albeit unintentionally, supporting extend-and-pretend (to the extent that it occurs) for the banks with exposure to these loans. The banks and servicers couldn’t have planned things any better if they tried. File under: Be careful what you wish for.

[WTF]

Well put davelj. You have me thinking now that this isn’t a conspiracy, but rather a case of big time irony as you said: foreclosure blow out inadvertently entrenching extend and pretend with no chance of it being reversed. At least, I don’t see how it can change now that they have to look at these one by one.

I think this is a watershed moment in the bubble burst saga. What about the 2nd part of my theory, that this will lead to write downs? It’s either that or take forever to work through these. Conspiracy or not, I wonder if that will be the outcome.

Acetia—I’m not in the business, this is my first post. I picked an obvious handle that’s already taken. I’ll pick another one if I post again.

[WTF]

Well put davelj. You have me thinking now that this isn’t a conspiracy, but rather a case of big time irony as you said: foreclosure blow out inadvertently entrenching extend and pretend with no chance of it being reversed. At least, I don’t see how it can change now that they have to look at these one by one.

I think this is a watershed moment in the bubble burst saga. What about the 2nd part of my theory, that this will lead to write downs? It’s either that or take forever to work through these. Conspiracy or not, I wonder if that will be the outcome.

Acetia—I’m not in the business, this is my first post. I picked an obvious handle that’s already taken. I’ll pick another one if I post again.

[WTF]

Well put davelj. You have me thinking now that this isn’t a conspiracy, but rather a case of big time irony as you said: foreclosure blow out inadvertently entrenching extend and pretend with no chance of it being reversed. At least, I don’t see how it can change now that they have to look at these one by one.

I think this is a watershed moment in the bubble burst saga. What about the 2nd part of my theory, that this will lead to write downs? It’s either that or take forever to work through these. Conspiracy or not, I wonder if that will be the outcome.

Acetia—I’m not in the business, this is my first post. I picked an obvious handle that’s already taken. I’ll pick another one if I post again.

[WTF]

Well put davelj. You have me thinking now that this isn’t a conspiracy, but rather a case of big time irony as you said: foreclosure blow out inadvertently entrenching extend and pretend with no chance of it being reversed. At least, I don’t see how it can change now that they have to look at these one by one.

I think this is a watershed moment in the bubble burst saga. What about the 2nd part of my theory, that this will lead to write downs? It’s either that or take forever to work through these. Conspiracy or not, I wonder if that will be the outcome.

Acetia—I’m not in the business, this is my first post. I picked an obvious handle that’s already taken. I’ll pick another one if I post again.

[WTF]

Well put davelj. You have me thinking now that this isn’t a conspiracy, but rather a case of big time irony as you said: foreclosure blow out inadvertently entrenching extend and pretend with no chance of it being reversed. At least, I don’t see how it can change now that they have to look at these one by one.

I think this is a watershed moment in the bubble burst saga. What about the 2nd part of my theory, that this will lead to write downs? It’s either that or take forever to work through these. Conspiracy or not, I wonder if that will be the outcome.

Acetia—I’m not in the business, this is my first post. I picked an obvious handle that’s already taken. I’ll pick another one if I post again.

[BigGovernmentIsGood]

People who are even slightly under water should stop paying their mortgage. You can win two ways. First, you may never get foreclosed on. Second, you might be able to beat the forecloser in court. Either way, there’s a decent chance that you could wind up never making another payment on your house again.

Edit: Another way you can win: You get to live for free for some period of time. It may take a few years to work through these things, so maybe you get 2-3 years of no mortgage or rent payment.

Also, why would any of these homewoners agree to write-downs to fair value? I’d be looking for a write-down at least 30% below fair value because the banks and servicers are basically over a barrel.

[BigGovernmentIsGood]

People who are even slightly under water should stop paying their mortgage. You can win two ways. First, you may never get foreclosed on. Second, you might be able to beat the forecloser in court. Either way, there’s a decent chance that you could wind up never making another payment on your house again.

Edit: Another way you can win: You get to live for free for some period of time. It may take a few years to work through these things, so maybe you get 2-3 years of no mortgage or rent payment.

Also, why would any of these homewoners agree to write-downs to fair value? I’d be looking for a write-down at least 30% below fair value because the banks and servicers are basically over a barrel.

[BigGovernmentIsGood]

People who are even slightly under water should stop paying their mortgage. You can win two ways. First, you may never get foreclosed on. Second, you might be able to beat the forecloser in court. Either way, there’s a decent chance that you could wind up never making another payment on your house again.

Edit: Another way you can win: You get to live for free for some period of time. It may take a few years to work through these things, so maybe you get 2-3 years of no mortgage or rent payment.

Also, why would any of these homewoners agree to write-downs to fair value? I’d be looking for a write-down at least 30% below fair value because the banks and servicers are basically over a barrel.

[BigGovernmentIsGood]

People who are even slightly under water should stop paying their mortgage. You can win two ways. First, you may never get foreclosed on. Second, you might be able to beat the forecloser in court. Either way, there’s a decent chance that you could wind up never making another payment on your house again.

Edit: Another way you can win: You get to live for free for some period of time. It may take a few years to work through these things, so maybe you get 2-3 years of no mortgage or rent payment.

Also, why would any of these homewoners agree to write-downs to fair value? I’d be looking for a write-down at least 30% below fair value because the banks and servicers are basically over a barrel.

[BigGovernmentIsGood]

People who are even slightly under water should stop paying their mortgage. You can win two ways. First, you may never get foreclosed on. Second, you might be able to beat the forecloser in court. Either way, there’s a decent chance that you could wind up never making another payment on your house again.

Edit: Another way you can win: You get to live for free for some period of time. It may take a few years to work through these things, so maybe you get 2-3 years of no mortgage or rent payment.

Also, why would any of these homewoners agree to write-downs to fair value? I’d be looking for a write-down at least 30% below fair value because the banks and servicers are basically over a barrel.

[Aecetia]

List of States where BOA is delaying foreclosures:

“In some states, lenders can foreclose quickly on delinquent mortgage borrowers. By contrast, the 23 states in which Bank of America is delaying foreclosures use a lengthy court process. They require documents to verify information on the mortgage, including who owns it.Those states are:
Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont and Wisconsin.”

http://apnews.excite.com/article/20101002/D9IJFSU80.html

[Aecetia]

List of States where BOA is delaying foreclosures:

“In some states, lenders can foreclose quickly on delinquent mortgage borrowers. By contrast, the 23 states in which Bank of America is delaying foreclosures use a lengthy court process. They require documents to verify information on the mortgage, including who owns it.Those states are:
Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont and Wisconsin.”

http://apnews.excite.com/article/20101002/D9IJFSU80.html

[Aecetia]

List of States where BOA is delaying foreclosures:

“In some states, lenders can foreclose quickly on delinquent mortgage borrowers. By contrast, the 23 states in which Bank of America is delaying foreclosures use a lengthy court process. They require documents to verify information on the mortgage, including who owns it.Those states are:
Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont and Wisconsin.”

http://apnews.excite.com/article/20101002/D9IJFSU80.html

[Aecetia]

List of States where BOA is delaying foreclosures:

“In some states, lenders can foreclose quickly on delinquent mortgage borrowers. By contrast, the 23 states in which Bank of America is delaying foreclosures use a lengthy court process. They require documents to verify information on the mortgage, including who owns it.Those states are:
Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont and Wisconsin.”

http://apnews.excite.com/article/20101002/D9IJFSU80.html

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