Sunday, October 10, 2010

Shut-up Stupid Sunday: Foreclosure Based Economy

Bank of America has stopped the foreclosure process in all 50 States. The other big banks have stopped it the 28 states where a judge has to look over their paperwork before they can foreclose.

They didn’t do this out of the goodness of their hearts, they did it because in thousands of cases they didn’t even check the paperwork they were using to file the foreclosure proceedings.

Naturally all over the MSM pundits are coming forward and saying how if the banks aren’t allowed to illegally kick people out of their homes, or in one case in Florida they tried to change the locks on a ladies home while she was inside which would have locked her in, our economy is doomed.

They are allowed airtime to say if the banks can’t kick people out of their homes after they miss one payment it will doom the economy as they think we’ve hit a point where the only industry is the massive legal fees that are generated in the foreclosure process.

Another stupid argument they present is that delaying the foreclosure process will lower the incentive to strike a deal between the homeowners and the banks.

This is complete and utter bullshit, it’s not the homeowners who are keeping these homes from coming out of foreclosure it is the banks. If a home is foreclosed and the homeowner calls the bank to find out what they want to get it out of foreclosure they get the answer, “Hell if I know.”

The whole foreclosure crisis has been caused by the banks refusal to try and work out any sort of deal with the homeowners. Taking away the foreclosure option for awhile just might make them look back through these loans and actually work with the people that hit a rough patch and missed one or two payments but are wanting to pay back their mortgages and now have the ability to resume payments just getting those homeowners out of foreclosure would go a long way towards easing the foreclosure crisis.

Stopping foreclosures temporarily would also force banks to take the Obama plan seriously. The federal government offers incentives to the banks to renegotiate mortgages, so far the big banks have only been placing the very worst risks into this plan and leaving the vast majority of homeowners in a limbo state taking over a year to process the paperwork, then blaming the homeowners because the paperwork is a year out of date making them start the process all over again.

Stopping the foreclosure process would give the banks the kick in the ass they need to actually start moving this paperwork through. They could use the people they have working on the foreclosure papers to work on the Obama Plan papers and speed the process up.

So to all the people who say the economy will collapse if banks have to follow the law, I say, “Shut-up Stupid. The foreclosure process is supposed to be a last resort negative sum game. Both parties in the foreclosure are supposed to lose. The process was only to be used as a way limit losses, not make a profit.”

Update: Last week I invited Andy Barr to respond to last week’s Shut-up stupid post: Shut-up Stupid Sunday: Andy Barr so far he has refused to respond.

By Darrell B. Nelson author of Invasive Thoughts


Stephanie Barr said...

There's so much wrong with this situation, I don't even know where to start.

Greg said...

Greedy bastards that's all I have to say, they do this after the American taxpayer bailed them out...

They should have been foreclosed on!

David Miller said...

Well this recession has started thanks to these so called banks and financial institutions, next the government bails them out with the tax papers money and what do they do? Pay millions of $ in fat paychecks and let's not forget those multimillion dollars of vacation. Now they refuse to lend money to struggling small to med sized businesses so people virtually have no place to take a start to get out of financial crises. Banks were never there to serve the community; they always existed to make a profit, even if it was on the misery of other people.