Quote:
Originally Posted by The Sheepdog
The part that I don't understand the most about all of this is the fact that the banks will generally lose money on repossessions. In the past, the financial institutions would actually wait until the last minute before repossessing property because they knew they would have to sell it at a loss. Now their losses are even greater due to the market being flooded with so many properties.
One would think the banks would rather re-adjust the mortgage and keep an owner paying a smaller note for a longer time rather than seize the property and just let it sit there.
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There are people who were given mortgages (by government pressure) who had no jobs and no income, or who falsified income for the mortgage docs.
There are also people who are so far upside down that they have no hope of ever recouping their investments who just want to walk away.
The majority of the people who have gotten mortgage concessions have failed to make those payments as well. I would not count on them suddenly catching up and making those payments for the future. How long should you be able to live rent free in a home before the owner can take action?
Unless you think they are entitled to continue living in homes and making no payments on them, the system has got to purge these people and their mortgages out of the system to restore balance and confidence.
Furthermore, we need to ensure that the government no longer tampers with lending to provide home ownership experience to otherwise unqualified individuals. A 20% down payment, steady, adequate income, and a decent LTV ratio is not unreasonable for homebuyers. Lending institutions and investment firms also need to take action to fix their problems as well.
TR