FORECLOSURES ARE MAKING THE MAJORITY HOME SALES
Dr. Laurie Roth
February 5, 2010
We were told that the hundreds of billions of stimulus dollars that went to banks was to stimulate the economy and help hold off in part, the out of control numbers of foreclosures on homes. In Obama’s first year as President, we have seen record unemployment at over 10%, record foreclosures and bankruptcies as well. However, the economy has just gotten worse and worse as more and more stimulus money has been spent. Naturally, it is all Bush’s fault.
Foreclosures were at record highs in 2009, 21% higher than 2008 and 120% higher than 2007.
So, what is causing all the foreclosures? Are the banks the victims with so many being encouraged to get bad loans who couldn’t afford homes?
There are historical landmarks of idiot decisions that almost crushed the economy and banking system. Remember the days of Bill Clinton who thought he was being the messiah and put forth the Community Reinvestment Act, which pressured the banks to give all kinds of home loans to minorities and poor people. They weren’t to ask questions regarding their payment qualifications or ability to pay on a loan, that would have been racist and un American. We know the rest by now. Thanks to this act and the Vegas like loans that ensued, the mortgage industry and banking health started spiraling down the toilet.
Why didn’t the several hundred billion stimulus money help stop the foreclosures now?
This week I heard from several folks who had applied for the American Recovery and Reinvestment Act, also called the Affordability and Stability Plan. There were responsible families who were desperately trying to pay their mortgages, but with rough times and lost jobs they were praying for a lower mortgage payment so they applied.
The first person I talked with, Jean Cohoon, shared a story about how her and her husband applied over the phone through their bank, Citibank. They were told that their monthly payment of $1100 would be dropped to $700 a month. They were thrilled. They had not been late one month in 9 years of mortgage payments but could barely make it now. Jean had been doing extra jobs to help pay the bills.
In 3 months, they were told that a mistake had been made and they now owed $1500 a month because they had to pay the difference. They were also told the mistake was their fault and they were now behind on their mortgage. Now, they are really afraid they will loose their home. Just think about it. They were badly struggling with $1100 a month, now a forced $1500 a month with threatening phone calls placing the blame on them. Of course, isn’t it precious that Citibank and this program accepted their 3 months of checks? No one at the bank will work with them or even consider a compromised payment plan.
Another horror story from a listener
Ron Tarwater contacted me the day after he heard about Jean. He and his wife Joanne had also applied for a redo on a loan with the American Recovery and Reinvestment Act. Their bank was IndyMac Bank and they also granted them a much needed home loan. It was not fixed and was scheduled to start payments at $875 a month then in one year bumped to $1200 a month. They had just moved to Arizona and had been in the banking world working as husband and wife for 40 years. They didn’t think it would be so hard to find work, but they couldn’t. Ron shared how he could only find 3 part time jobs to help pay the mortgage payment, but without permanent employment when the payment bumped to $1200 they were in a nightmare.
They approached the bank for help or a modification. They even found a separate loan mediation company they hired to help come up with a better payment with Indy Mac Bank. Two payments were talked about, then one, then none. The bank, foreclosed on their home after Ron and Joanne endured contradictory messages left on their phone about when a Trustee Sale was going to happen. The bottom line was, yet again, here was another family who had a track record of paying their bills but needed adjustment and help from a bank and didn’t get it. They finally had to file bankruptcy, lose their credit, home and now he does part time work in another state and lives with his sister in law. Shame on those running that Indy Bank and this program. They should be fined off the planet and have their stimulus money yanked.
Ron also shared on air that his ailing sister also had a horrible response and was turned down for help due to her getting laid off her job and her health problems. I thought endless stimulus money and programs were actually supposed to help people, apparently not those who are disabled and laid off.
I’m sure glad Obama and our leftist congress gave out untold billions to the banks so they could screw people, show no compassion and basically steal property to resell.
I was looking at some of the manipulated home sales stats that could make you think home sales are moving again in various states, WRONG. In Phoenix alone, 52.2% of houses and condos that had been resold HAD BEEN FORECLOSED ON IN THE PREVIOUS 12 MONTHS! Just imagine the faulty and lying stats of increases in home sales all across the country when the increase has to do with the greed, fraud and thievery of America’s banks who foreclosed to acquire an asset and get a debt off their books.
There should have been zero stimulus money given to banks anyway, BUT, if they dared receive the money there should have been a bonus offer or requirement that they could only keep the money, pending thorough and independent review of how many home loans they had been able to keep and work through. Every mortgage that failed, they should have had chunks of money taken from them.
It is shocking and most sad to even think that we should need a new law or regulations controlling the greed and aggressive push by banks these days to foreclosures, but we do. It used to be that there actually was customer service. Banks used to fight for success and would work with a client who was trying to pay where they could.
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Now, we have millions of people who really are unemployed, doing 3 part time jobs, struggling to survive and keep their home for their family. If they are paying something each month to a bank and communicating, it should be a crime to foreclose on their home and at the very least, be a huge and harsh penalty to the bank or company who refuses to work with them.
© 2010 Dr. Laurie Roth - All Rights Reserved