About Me 0125: foreclosure defense

Even though banks piously insist that every one of their foreclosure actions is fully justified, evidence in the court system continues to prove that claim to be false. We pointed out this sorry development in October, that of banks entering and changing the locks on homes they had not foreclosed upon. Per a report from the Sarasota Herald Tribune:

The process of banks hiring people to break into homes, even when occupied, is just the latest oddity of the messy foreclosure crisis in Florida.

Some property owners are reporting the break-ins to law enforcement as burglaries. Yet investigators consider the disputes a civil matter because the contractors do not display criminal intent.

That essentially leaves the property owners without recourse…

“It is vastly underreported; it is happening in counties all across the state,” said St. Petersburg foreclosure defense attorney Matt Weidner. “The more this occurs, the more prevalent it’s going to become.”

The lack of willingness of the local police to deem destroying property and unauthorized entry as criminal acts leaves wronged parties with litigation as their only recourse. And some are filing suits.

Note that these suits likely represent only a small fraction of the actual cases of bank miscreance, since few of the victims are likely to have the financial wherewithall and intestinal fortitude to sue a bank. Per the New York Times:

When Mimi Ash arrived at her mountain chalet here for a weekend ski trip, she discovered that someone had broken into the home and changed the locks.

When she finally got into the house, it was empty. All of her possessions were gone: furniture, her son’s ski medals, winter clothes and family photos. Also missing was a wooden box, its top inscribed with the words “Together Forever,” that contained the ashes of her late husband, Robert.

The culprit, Ms. Ash soon learned, was not a burglar but her bank. According to a federal lawsuit filed in October by Ms. Ash, Bank of America had wrongfully foreclosed on her house and thrown out her belongings, without alerting Ms. Ash beforehand….

Identifying the number of homeowners who were locked out illegally is difficult. But banks and their representatives insist that situations like Ms. Ash’s represent just a tiny percentage of foreclosures.

This, as the British would say, is bollocks. The traditional procedures around the transfer of title made the old system virtually fail-safe. Any number above zero is unacceptably high. And “a tiny percentage” across the huge numbers of foreclosures happening across the US adds up to meaningful numbers in real terms.

The examples in the NY Times story are all from middle to upper income homeowners. For someone of lesser means, the consequences of wrongful action can be devastating. If possessions are removed, or worse, put out on the street, the losses can be significant.

This is the banks’ excuse:

A clause in most mortgages allows banks that service the loan to enter a home and secure it if it is in default, meaning if the mortgage payment is 45 to 60 days late, and if the house has been abandoned, authorities said.

First, some of the homes broken into have been current on payments. Second, “abandoned” seems to be interpreted as “no one at home when the contractor showed up” which would be true during the business day for most working families.

This pattern again proves what we know all two well, namely, that we have a two-tier system of law in the US: one for the banks, one for the rest of us.

“So being the Government is again wasting taxpayer money assisting the banks with Hamp rather then those for whom it was intended, why are people in the USA not upset?”

Maybe we are accustomed to this? Personally, I would like the government to STOP trying to take the lead. Half of their attempts are expensive boondoggles, the other half make things even worse. HAMP was about politics and buying votes, as most political ’solutions’ are.

“The heads in the sand applies to those people as well, because your economy is too attached to the mortgage industry to settle until it does. The Governemnt lying and saying your recession has ended referred to wallstreet only. There is much more to come. My New Year’s prediction is 8 nore years on the roller coaster.”

I personally believe that is backwards. You CANNOT have a healthy economy driven by the financial sector. Any attempt to do so is essentially a Ponzi scheme. Witness the past decade for a perfect example.

Absolutely agree that there are many more years “on the roller coaster”. The big question, of course, is what effect the trillions of dollars of fiscal and monetary stimulus will have on the markets. We know they won’t do much to help the real economy — again, you CANNOT have an economy driven by the financial sector. But at this point they seem likely to produce an inflationary recession rather than a deflationary recession. (And even if the actions already taken are insufficient, the people in charge have expressed a willingness to continue new initiatives until they succeed.)

“you make your own fate and luck…”

I try to assume bad luck and prepare for that. If it is likely that our income will drop by 20% in a recession, then I prepare for a 40% drop (with a large margin of safety). The flip side of that is running multiple jobs and businesses in distinct sectors, any one of which can be ramped up if the others run into trouble. A total of ~100 hrs/week employment during the school year, of which we need to maintain about 60 hrs/week to meet our budget.

That’s the way my grandparents (who lived through the Great Depression) lived their lives. I can’t think of any other way to deal with the uncertainty in our economy today.

How many of the people who are in trouble on their mortgages left themselves that kind of leeway? I absolutely sympathize for those who have fought for every inch of progress, emigrating to the US, working their way to solid employment while saving pennies, buying a low-end house or apartment, and then losing income or suffering a medical/financial disaster.

I have far less sympathy for people who had six-figure incomes, who splurged on a 2500+ sq ft McMansion that cost $400k, who borrowed against their equity to fund luxury vacations, and somehow believed that the gravy train would never end. If you’ve chosen to live an above-median lifestyle, then there is no excuse for failing to take precautions to protect yourself against a downturn. Especially since you would think the 2000-2002 recession would have dropped a few hints of how rapidly the outlook can turn from “rosy” to “bleak”. (Except, of course, I forgot. Real estate NEVER declines in value, right?)

From your link:

“You could say the Kaharas have only themselves to blame. They entered into a complex, interest-only loan when they purchased their two-bedroom house for nearly $300,000 in 2004.”

Let’s see… They were 26 and 28 when they leveraged themselves to the hilt to buy an ultra-expensive property in a posh community that I would never be able to afford. The article goes on to explain how their construction business seemed to be doing well at the time, so they figured they could take the risk. They took the risk, they wiped out. That happens. NOTHING you will say is going to make me feel sorry for somebody who takes stupid and unnecessary risks like that.

I don’t want to excuse or justify the bank’s actions, but it is entirely possible to have a conflict with NO sympathetic characters involved. To me, this is one of those times.

I bet they lost less than I did on my first house. Doesn’t sound like they had much of downpayment. The bankruptcy will clear most of their debts and (in time) they can start anew.

“The Kaharas will rebuild their lives.”

Hopefully making more careful spending decisions in the future. Live and learn.

Does that help explain my viewpoint? My seeming lack of sympathy for some of these situations? I believe we have a responsibility to do our best to avoid being a burden to society. Find jobs that contribute (rather than simply scamming money as so many Wall Street traders do). Take responsibility for your own education and personal finances, so the cash flows ONE WAY ONLY from your earnings into the public purse. Make whatever sacrifices needed to plan ahead, so you don’t have to ever ask for financial aid.

Plenty of people live lives like that, not all making high incomes either, and for the most part they don’t end up profiled in foreclosure stories.

bench craft company reviews bench craft company reviews

Thursday, January 13, 2011

foreclosure defense

No comments:

Post a Comment