In a recent hearing, called by the bipartisan Congressional Oversight Panel, which was given the responsibility of monitoring the government’s foreclosure bailout programs, Sen. Ted Kaufman (D-Del.), the panel’s chairman said “if investors lose confidence in the ability of banks to document their ownership of mortgages, the financial industry could suffer staggering losses. The possibility is especially alarming coming so soon after taxpayers spent billions of dollars to bail out these very same institutions.”
Phyllis Caldwell, head of the Treasury Department’s homeownership preservation office, noted the delay in foreclosures caused by law enforcement investigations, pending litigation and self-imposed slowdowns by lenders, saying those actions “may have both immediate and longer-term consequences.”
And in my opinion the foreclosure bailout programs are just above a waste of time, due to the fact that foreclosures are on the rise even with these so-called government foreclosure bailout programs.
Foreclosure – Causing Real Estate Prices To Plummet?
Caldwell said that because a foreclosure is taking longer this will probably force down sale prices, especially on vacant homes in the market, and sow uneasiness among buyers about whether the homes have a clear title. [If I were buying a home from foreclosure I would be wary too.]
“This would hurt homeowners and home buyers alike at a time when foreclosed homes make up 25 percent of home sales,” Caldwell said in her written testimony. “Together, these two factors may exert downward pressure on overall housing prices both in the short and long run.”
Foreclosure: Bottom Line
Caldwell also offered a glimpse at why large mortgage servicers have not helped more homeowners modify loans and why they relied on “robo-signers” and other questionable practices when churning out foreclosure filings. “They did not have the systems, staffing, operational capacity or incentives to engage with homeowners on a large scale and offer meaningful relief from unaffordable mortgages,” she said. “Moreover, the expansion of private securitizations during the housing boom left servicers in a complicated legal situation.”
Yep – you read it right. Many corporations, banks included, do not put a face to the number. Their bottom line – P R O F I T S. The foreclosure mess, here in America, is due in large part to the fact that the corporate big wigs want to fatten their pockets.
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