We’ve written relentlessly about servicer abuses, but we’ve almost always contextualized these abuses through their effect on borrowers. Staring through data, especially data at this scale, complexity, and with strong economic ramifications, is like looking through a dirty window. But as we wipe away layer after layer of schmutz the picture is becoming clearer. Yes, servicers continue to prey upon ordinary Americans. But evidence suggests that they’re also preying on investors. Individual American families do not deserve to suffer these behaviors, that increase the losses while delaying the uncertainty, and neither do pension funds, European villages, municipalities, or other unsuspecting entities who actually funded these loans...Read the whole thing. And plan accordingly.
There is a strong argument that campaign donations are at work, but given the lopsided donations from the financial services industry to Republicans one would think Obama would send a message by taking firm control over the FHFA, the FDIC, the SEC, the OCC, the Treasury, the Justice Department, and strong-arming the Federal Reserve into offering substantive help to borrowers and investors. Yet, at every level, the President has failed ordinary Americans. Even the most egregious behavior results in dead silence .. we don’t even get a yawn. Every program has been an unmitigated disaster, especially HAMP. When Administration figures do intervene their influence is overtly skewed in favor of the banks.
Thursday, January 12, 2012
Bubble Fallout
A sobering post at Naked Capitalism, estimating that there are 9,800,000 houses in shadow inventory nationwide.
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Shhh--you aren't supposed to bring up these problems until the Great One is elected again.
ReplyDeleteOnly in the theater does Shylock get cheated out of his pound of flesh. In the real world, the bondsman is always paid.
ReplyDeleteThe deadbeats currently occupying houses that they cannot afford will eventually be booted into the street, and their debt will be liquidated by the sale of the property. It is just a matter of time and how the losses will be apportioned. But one thing you may be sure of is that if the bondsman suffers a loss on his loan, he will pass it on to other borrowers in the form of higher rates and fees.
Either the debtor pays or someone else pays, but the debt is always paid.
Here is real Hope and Change: Obama turns homeowners into renters, and the 1% are laughing all the way to the bank. --Max
ReplyDelete///
Bloomberg News -- Private equity firms are jumping into distressed housing as the U.S. government plans to market 200,000 foreclosed homes as rentals to speed up the economic recovery.
GTIS Partners will spend $1 billion by 2016 acquiring single-family homes to manage as rentals, Thomas Shapiro, the fund’s founder said. That followed announcements this month that GI Partners, a Menlo Park private equity fund, expects to invest $1 billion, and Los Angeles-based Oaktree Capital Management LP will spend $450 million on similar housing.
“It’s a massive market,” Shapiro said in a telephone interview from New York. “We’re starting to see this as a billion dollar opportunity to buy rental housing.”
Creating more single-family rental properties is one of a series of programs introduced by President Barack Obama’s administration aimed at reviving the housing market.
Saw that.
ReplyDeleteNext: Section 8.
Headline today: “Foreclosure abuse settlement a big win for Obama?”
ReplyDeleteYour Government at Work: Create a housing bubble through massive subsidy programs and easy money policies, blame the collapse of the bubble on the banks, bail out the banks with more subsidies, then sue the banks and take the money back.
Oh yeah, Section 8 rental units: The government sprinkles cancerous cells throughout the good neighborhoods, then wonders why they wither and die.