It’s Time to Coin the Phrase “Foreclosure Fraud”

[midnight]

By: Cynthia Kouril Wednesday April 7, 2010 7:02 am

You know how people like to bandy around the term “mortgage fraud”? Saying that people got “liar’s loans” and bought houses they knew they could not afford and so deserve to be foreclosed upon and evicted?

Those people never talk about predatory lending. They don’t talk about mortgage brokers who encouraged people to take out higher interest rate/no document check loans, who told them if they had trouble making the higher payment when the adjustable rate suddenly shot up in year 3, they could just refinance again and get back to the low teaser rate.


Many, many people are now underwater in their mortgages and cannot refinance. And Congress and FOX want to blame it on homeowners. They don’t want to blame it on predatory lending.



http://seminal.firedoglake.com/diary/39391

Consumers seem to be under the impression that their are standards and regulations that are in place to protect them from these preditors. They do not realize that the regulations have been removed and that anything goes.....

[Lost4words]

1. People need jobs to pay mortgages!

I didnt have a loan I shouldnt have had, I lost my ability to earn. DONT blame the working class for this.

[Bonhomme Richard]

4. And relief from crazy health care bills.

The two go hand in hand.

[DCKit]

2. Did the banksters imagine they were going to cash in on forclosures?

I knew the RE market was waaaayyyyy overvalued and that these loans were going to turn out to be toxic, and I'm not even in the business. How are they going to cover their asses on these loans without another taxpayer funded bailout?

I'm thinking it would be in their best interest to either:

1) Write down the value of the loans to current market value and take the losses now.
2) Do whatever it takes to keep people in these homes until the market recovers further.

But that's me. I can't fathom their thinking process. Thinking of the banksters as vultures is a heinous disservice and patently unfair to actual vultures.

[izquierdista]

3. Wrong animal analogy

A vulture serves a purpose, by recycling carrion in the food chain. Bankers are more like lamprey eels, they attach themselves to a host and suck the life out of it, only letting go when the host is a hollowed out corpse.

[DCKit]

9. Yes, but they also serve a purpose. Mosquitoes, maybe? n/t

[mudplanet]

12. How about "parasites?"

[DCKit]

13. Good try, but a successful parasite doesn't kill it's host.

At least not quickly. Got to have time to pass it on.

These guys want to have ALL the money, RIGHT NOW, regardless of the damage they may do in the process of accumulating it.

[Froward69]

5. The Denver post has a good article today

http://www.denverpost.com/ci_14841331

How the foreclosure mess is devastating mountain communities.


http://www.denverpost.com/ci_14841331

on edit/ it blasts holes in the republican arguments.

[Lydia Leftcoast]

6. While people should have dnoe the math and realized that they couldn't afford to buy,

I myself came under such pressure to buy (because I was "wasting so much money on taxes" and because it would make me a real adult and because it would be a tangible asset and because the terms were so wonderful and all these great properties were available...) from banks, TV advertisements, friends, and even family, that it's no wonder that so many people bought what they couldn't afford.

All kinds of stupid claims were made, most notoriously the one that said that houses could only increase in value.

People made ridiculous changes to "afford" a house, including commuting 50 miles a day each way to work.

I decided that buying didn't make sense for me, that this pressure to buy a house was a typical hysterical bubble.

When I added up mortgage payments, property taxes, and repairs/maintenance or condo association fees, I had a monthly outlay 50% more than what I was paying for rent. The "building equity" argument fell apart for me when a friend, who had bought a house, put $15,000 worth of upgrades into it, became long-term unemployed soon afterward and had to sell, realizing only $18,000 in equity. Even the tax advantage argument (the one that the banksters dreamed up to appeal to Republicans) falls apart when you consider that you're paying out extra money to get back 35 cents on the dollar.

So I didn't buy, and am I ever glad.

But I fully understand why so many people were caught up in the "you MUST buy a house" hysteria.

[wolfgangmo]

7. Sure it's understandable - but its NOT really.

The brokers are professionals and as such have professional responsibilities. They have just been exempted from the laws that govern other professionals.

Can a doctor over - prescribe for acold until the patient is almost dead and get away with it? If a professional truck driver speeds, their fine is literally 100's of times higher than you or me. IF a lawyer gives bad advice they are held accountable for the cost of that advice. All of this is a good thing. Professionals, because of their higher rights as a professional, must be balanced by extra responsibility for what they do and say.


Where is the responsibility with the brokers and bankers? Where?


Of course it makes sense that everyone feels that this is OK. We have gone from "the buck stops here" - H. Truman to "mistakes were made" - R Raygun to "I've never made a mistake" - Shrub Bush. Heck the Pope, when presented with evidence that he covered up child molestation resonded by saying that anyone who talks about it is just "engaged in petty gossip."


Honest to christ, whatever happened to accepting responsibility for your actions?

[Lydia Leftcoast]

10. I totally agree that the banksters are at fault

They're the ones who are supposed to know better.

I think they envisioned acting like payday loan sharks: Get a lot of people in debt for stuff they can't afford and keep them paying forever.

Too bad THEY aren't paying for the greed.

[Dr.Phool]

8. The swindle is not over. Florida Legislature at it again.

The banks were disturbed that people could actually challenge their foreclosures in court, and demand proof that the bank actually owned the house.

Not in Florida anymore.

The banks bought off the legislature (again), and a bill is winding through, that will create "non-judicial foreclosure". They won't even have to go to court to take the house anymore. And you can bet your last dollar it will pass.

This in the state where BoA has foreclosed on houses that didn't even have mortgages, with them or anyone else!

[amborin]

11. K&R