Disturbing Trend in Foreclosures

Banks are not actually taking possession of the property:

City officials and housing advocates here and in cities as varied as Buffalo, Kansas City, Mo., and Jacksonville, Fla., say they are seeing an unsettling development: Banks are quietly declining to take possession of properties at the end of the foreclosure process, most often because the cost of the ordeal — from legal fees to maintenance — exceeds the diminishing value of the real estate.

The so-called bank walkaways rarely mean relief for the property owners, caught unaware months after the fact, and often mean additional financial burdens and bureaucratic headaches. Technically, they still owe on the mortgage, but as a practicality, rarely would a mortgage holder receive any more payments on the loan. The way mortgages are bundled and resold, it can be enormously time-consuming just trying to determine what company holds the loan on a property thought to be in foreclosure.

In Ms. James’s case, the company that was most recently servicing her loan is now defunct. Its parent company filed for bankruptcy and dissolved. And the original bank that sold her the loan said it could not find a record of it.

“It is what some of us think is the next wave of the crisis,” said Kermit Lind, a clinical professor at the Cleveland-Marshall College of Law and an expert on foreclosure law.

First reaction: pass laws which state that if a financial institution refuses to take possession of a foreclosed property, it immediately becomes the free and clear property of the foreclosed debtor. And I mean, make it mere hours before such a forfeiture occurs. We can’t play these games – I, for one, note about 8 properties in my neighborhood which appear foreclosed (run down, over grown yards, and the like) but no attempt being made to sell…now I wonder if we’ve got abandoned properties? I found it odd that in May a realtor advised 34,000 homes on the Vegas market, and then a different realtor say 17,000 homes on the market in June…we didn’t sell 17,000 houses in June in Las Vegas. Are the banks just bagging it? This article makes me think they might.

Longer reaction: As I’ve said for some time now, we need what amounts to a bankruptcy reorganization of our national housing market. It will take some primo number crunchers to work it out, but mortgage amounts – by zip code – will have to be reduced to match current market values, and then the loans re-worked based upon the current value of the house. Its a lose/lose situation for everyone (for instance, I’d lose the approximately $130,000 I’ve paid for this house to date, the bank would lose a great deal of future interest as my mortgage amount would have to drop by 50% or so to bring it in line with current market values). Its lousy, but I can’t think of any way to really get us out of this mess – we have so many millions of houses “upside down” in relation of loan balance to house value that the temptation will become massive for people in that situation to just walk away…in which case, the banks would get even less than they’d get with a “cram down” on existing loans.

Inescapable truth: any effort to prop up this situation in the hopes that housing values will recover is the most asinine of wishful thinking. It is not foreseeable that housing prices will reach back to their 2005 level over the next ten years, and may be 20. We have to think anew and act anew.

64, 25, 3

The number of bank failures, respectively, in 2009, 2008 and 2007:

Regulators on Friday shut six banks in Georgia and a small bank in New York state, raising to 64 the number of federally insured banks to fail this year…

…With the latest closings, 16 Georgia banks have failed this year, more than in any other state. Most of the failures have involved banks in the Atlanta area, where the collapse of the real estate market brought economic dislocation.

The 64 bank failures nationwide this year compare with 25 last year and three in 2007.

For those keeping score at home, 2009 still has more than 5 months left to run. For most of the last 20 years, bank failures have been in trivial numbers. The record is more than 500, but that was when we essentially shut down the S&L system in 1988 and 1989. We are, on the other hand, rapidly approaching 1932 levels of bank failures.

Obama Goes in to Full Fledged Damage Control

Not too often that a President has to make this sort of effort:

Trying to tamp down an uproar over race, President Barack Obama said Friday he used an unfortunate choice of words in commenting on the arrest of black scholar Henry Louis Gates Jr. and could have “calibrated those words differently.”

The president said he had telephoned the white policeman who arrested Gates, and he said the conversation confirmed his belief that the officer was a good man and an outstanding officer.

Then again, its not too often that a President makes such a bone-headed remark. The answer to the question, Mr. President, was “while I’m concerned about any incident which may be the result of racial profiling, I believe we should all suspend judgment on the Gates case until all the facts are known”. If your cracker-jack White House staff finds itself incapable of providing you with such answers, I suggest firing them all. In the interests of patriotism, I will volunteer, as need arises, to help you figure out answers to the really, really simple questions.

The Un-Exploded Economic Bomb

Municipal bankruptcy - via Mish’s Global:

Detroit’s financial picture is grim, but Mayor Dave Bing says a complete overhaul of city government by 2010 could help the city avoid the appointment of an emergency financial manager or the filing of municipal bankruptcy.

Bing said Thursday there are no more creative moves to make — those budgetary tricks were all tapped by previous administrations — and the city is up against a wall financially. The only answer, he said, is to change how the city functions.

The time frame is pressing — Bing said the city could run out of money by the start of the second quarter, Oct. 1 — if a $20-million to $25-million hole is not plugged.

“There’s a reality that we all have to live with, and the reality of the City of Detroit is that we are broke and we are in a financial crisis,” Bing told the Free Press on Thursday.

What is clear to Mayor Bing, among other things, is that the government workforce is going to have to shrink – either in numbers, pay or a combination of these two things. The unions, of course, are mindlessly opposed to this – I guess figuring that Obama will come to the rescue, when push comes to shove. This should not be counted on – a very large number of America’s municipalities are on the brink of financial disaster. Shrinking tax bases and rapidly rising costs of government employees (especially in the areas of health care and pensions) are putting cities, as Mayor Bing says, up against a wall. Obama will not be able to get a generalized State and local government bail out through Congress – there might be a one-time shot for some places, but most are going to have to sink or swim on their own…and a lot of them will sink.

The real problem here – for the economy and Obama – is that a very large proportion of the new jobs we have are in government or government-subsidized entities. Obama, naturally, will not cut off the spigot for federal jobs, but what the Obama gives with one hand, economic reality will take away with the other. Very rapidly now, government employees around the nation – high paid and living pretty good lives – are going to suffer pay cuts and/or job losses. With that will go the very last prop to home sales, car sales and investment. Expect another rise in foreclosures, another financial collapse as financial institutions have not put aside sufficient reserves for this sort of thing and, as it were, the “second dip” of our “double dip” recession (we’re still in the “first dip” – we might have allegedly positive growth in the fourth and first quarters which will officially end the recession; and just watch as the Obamaniacs proclaim their man a sheer genius over this…but such celebrations will be very short lived).

Our liberals will say that I’m just talking down the economy and hoping for disaster. I’ve reviewed this and come to the conclusion that I’d rather not have this happen – I work for a bank and am not prepared, at this moment, for a career shift. I’d like to keep this job at least in to 2010…but as time goes on, I think there might be a rather nasty lump of corporate coal in my stocking this upcoming holiday season. So, I’d rather we avoided this – but liberal polices up and down the line are tailor made for it. In fact, if you wanted to deliberately sabotage an economy, just following the Obama model would do the trick. Its going to happen, sure as night follows day.

Phrase of the Day

The answer to the “if you don’t want Obamacare, you want people to die” sort of liberal argument:

Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. – Frederic Bastiat

MoveOn Hijacked

Wonderful:

Local MoveOn.org members had penciled in on today’s schedule a protest in front of Senator John Cornyn’s Spring Valley Road office, during which they had hoped to pressure the senator to support President Barack Obama’s public health care legislation. But when Paula Anderson, a MoveOn.org member and spokeswoman, showed up at 11:30 a.m., she found another contingent had beat her to the proverbial punch: A large number of Dallas Tea Party members were already set up, voicing their opposition to the proposal.

Anderson was stunned: “We really did not expect them to show up.” She estimated the crowd at about 130. “From our perspective we took names of everyone there, and we had about 30 people,” she told Unfair Park. “And I would assume they maybe had 100.” As it turned out, according to Jessica Sandlin, Cornyn’s Texas press secretary, Tea Party-hearties also showed up to health-care legislation rallies in Austin and in San Antonio…

The TEA Party movement will be in the driver’s seat at least through 2010, and perhaps all the way in to 2012. Ignore it at your peril – and that goes for both left and right politicians who wish to ignore it.

What Media Bias? Part 154

In the form of an AFP report on Honduras – adjustments to make it a true story are in italics:

Honduras’s de facto government has shot down a last-gasp deal to resolve the country’s global left’s political crisis, insisting ousted President Manuel Zelaya cannot return to office.

The return of Mr Zelaya as president was impossible, interim foreign minister Carlos Lopez Contreras said on CNN’s Spanish station, effectively killing hopes of a settlement an outsider-enforced coup.

Crisis mediator and Costa Rican President Oscar Arias has proposed a fresh plan for Zelaya’s return Wednesday, with concessions for the interim government, which backed ordered the army’s June 28 expulsion of the Honduran leader.

Arias’s plan called for Zelaya’s return to the country as president in a national unity government, until his term ended in January.

In return, the current de facto leadership would see sanctions against the country lifted, a limited amnesty for political Zelaya’s crimes and a bar on Zelaya seeking constitutional reforms designed to let him seek another term in office.

But negotiators for the de facto government returned to Honduras saying the deal presented in Costa Rica would not be signed by their leader President Roberto Micheletti.

“As I see it, it will be difficult for him to sign up,” spokesman Mauricio Villeda said…

… Hondurans remain deeply split over opposed to the possibility of his return. Many fear it are certain would provoke more violence after Zelaya’s spectacular first attempt left at least one protester dead in clashes with soldiers.

On that occasion, troops had blocked the runway of the airport where he tried to land.

Hundreds Tens of thousands of white-clad demonstrators on Wednesday protested against Zelaya’s return in the capital, where the situation has become increasingly polarized clear that Zelaya is not wanted.

“We don’t like you, Mel,” one banner read in Wednesday’s demonstration, using Zelaya’s nickname.

Liberal Fascists Strike Again

Of course, they are also acting like fraidy-cats:

Democrats are preventing Republican House Members from sending their constituents a mailing that is critical of the majority’s health care reform plan, blocking the mailing by alleging that it is inaccurate.

House Republicans are crying foul and claiming that the Democrats are using their majority to prevent GOP Members from communicating with their constituents.

The dispute centers on a chart created by Rep. Kevin Brady (R-Texas) and Republican staff of the Joint Economic Committee to illustrate the organization of the Democratic health care plan.

At first glance, Brady’s chart resembles a board game: a colorful collection of shapes and images with a web of lines connecting them.

But a closer look at the image reveals a complicated menagerie of government offices and programs that Republicans say will be created if the leading Democratic health care plan becomes law.

In a memo sent Monday to Republicans on the House franking commission, Democrats argue that sending the chart to constituents as official mail would violate House rules because the information is misleading.

Democrats are scared to death that something other than pro-Obamacare propaganda will get out there. If they are so confident the GOP chart is bogus, then let us see their version of the chart, so that we can peruse it for accuracy.

This desperate desire to stifle debate on the part of our liberal fascists will be a large part of their undoing – “if ye be afraid to hear the worst, then let the worst unheralded fall on your head”. Democrats are heading for a fall, and it will come as a shock to them.

Obama Slanders Police Officers

Last night, Barack Obama took a question regarding the incident at Harvard University involving black scholar Henry Louis Gates Jr., who was seen byneighbors trying to force his way into his home and then initially refused to provide to responding officers who arrived on the scene in response. My thoughts on Obama’s irresponsible comments are posted here.

UPDATE, by Mark Noonan: We can all be pretty certain the the professor was an Obama voter, but given that Cambridge gave 40,876 votes to Obama and 4,697 votes to McCain, it is very likely that everyone involved voted for Obama…this is just a very stupid move by Obama, mindlessly playing the race card from the bottom of the deck when even a cursory examination would show the chances of race playing a role here are nil.

Dr. Obama Experiments With America

Expect to hear that word, “experiment”, a lot more often:

With one word Monday, Republican National Committee Chairman Michael Steele helped the GOP get back in the fight over health care and the entire Obama agenda. The word was “experiment.”

“Candidate Obama promised change,” Steele said in a speech at the National Press Club. “President Obama is conducting an experiment.” Steele went on to accuse Barack Obama of carrying out dangerous experiments with the nation’s health care, with the economy, with taxpayers’ dollars.

“Experiment” didn’t come from nowhere. “The term bubbled up from a set of focus groups we did with swing voters, independents, soft Republicans and soft Democrats,” says one strategist involved in an extensive RNC research effort nationwide and in key states like Virginia, Colorado and Florida. “It’s something that a vast majority of voters believe is true, that Obama is running what amounts to an experiment with our future.”

I’ve never seen so many people so incensed over a President’s plans – I’m getting calls out of the blue from friends who want to find out just what this man, Obama, is really up to. People are frightened that Obama plans to ram-rod through a series of changes where all the details will be worked out by him, behind closed doors, after the laws are in place…and we’ll then only have the Democrat-controlled Congress to call him on it (ha!).

Don’t think that the outrage over the mere thought of a 1,000+ page piece of legislation has died away…its simmering out there and eating away at the government’s credibility like acid. The closest analogy I’ve got to this is the way “global test” ensured that Kerry would never be elected President…in and of itself, it wasn’t that big a statement, but it ate away at his credibility relentlessly…so, too, are Obama’s actions eroding his credibility. If he doesn’t change course soon, he’ll be permanently down to “knee-jerk” Democrat support for the remainder of his term.

The final key to stopping Obama has been, of course, the GOP getting its act together. Steele’s statement is a good start, but its only a start and we still have a very large number of Beltway Barnacles in our party who really think that the people don’t matter – these people will try mighty hard to bail Obama out because, in the end, they prefer an elitist like Obama to the regular folks out there with their TEA Parties and unrealistic expectations of personal liberty, etc.

We can whack ‘em, good people – the entire elite class, of all stripes. We can take our country back – in the end, Obama might be the best thing that happened to us. As was said in ages past, “the knowledge you are to be hanged in a fortnight concentrates the mind wonderfully”. Obama and the elites are building the gallows of American exceptionalism, and I think our minds are very concentrated, indeed.