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  • BLACK MONDAY 2008: Foreclosure Apocalypse??

    For entertainment purposes only.

    ------------------------------------------------------------

    BLACK MONDAY 2008: Foreclosure Apocalypse?



    Okay. "Black Monday" already happened, in the 80’s and then also back in the 20’s according to some slang-artists, but one of the attorneys I work with gave this last Monday (July 14 2008) the name, and it seems to have stuck. You could also call it "Screw Everybody We’re Foreclosing On You All" Monday, if you’re so inclined.

    Here’s what happened, and pardon me if I sound a little frantic, but I feel a bit like Cassandra here; I’m freaking out about this but by and large, most people don’t seem to realize it happened. Most people only know one or two people involved in mortgage negotiations, so they didn’t see the coordinated collapse that I saw.

    In a nutshell, what happened is that Monday morning, all the major mortgage banks in the U.S. issued some kind of order or decree, that they would cease conducting any kind of workouts or negotiations with borrowers, and instead foreclose on every home they could.

    I know this because the nonprofit I work for is a sort of hub that helps people understand their options and take steps to avoid foreclosure. That means that I’m in regular communication with, among other people, brokers and lawyers who are trying to help people who have problems with their mortgages and need to negotiate with their mortgage companies; as well as individuals who are trying to work things out themselves.

    Mortgage negotiations are absolutely critical…

    Because mortgage problems are very, very often related to bad loans whose payments are increasing, or to properties whose values are now way under the value of the mortgage, or that have other problems like job losses or illness to deal with, helping people with mortgages often means contacting the lender and getting them to make a change to your mortgage so someone doesn’t lose their home. They may change it from an adjustable to a fixed loan; lower your interest rate; forgive a late payment or two; or something like that. These "mortgage workouts" are not only common, but they are the accepted way for borrowers to handle problems with their mortgage. Governments and banks alike have been urging borrowers to contact their lenders and "work something out" as the main way of fighting foreclosures for some time now. That’s basically what the whole "HOPE" thing the federal government "did" (if you want to call it doing anything) was. Unfortunately, the government neglected to give this solution any teeth by requiring banks to work with people, so thus far it’s been a game of incredibly one-sided negotiations, often requiring people who are already broke to get legal help (a good lawyer can negotiate better than you can) if they want to keep their houses.

    As if that wasn’t bad enough, on Monday, the banks stopped making any deals.

    Let me say that more clearly: As of 9 a.m. on Monday, ALL the major banks stopped making ANY deals whatsoever that I’m aware of. They even called off workouts that were in progress, including ones that were all done except for signing the papers. This is whether or not the borrower was actually in foreclosure yet.

    …And now they’re gone?

    A comment related to me from someone who asked the biggest foreclosure law firm in our area about it was, "We’ve been given our marching orders: No more deals. No more workouts. We play by the rules, and if we can foreclose, we foreclose." Apparently these "marching orders" came down from every major bank (at least) in the U.S. first thing Monday morning, and as of today, there still seems to be no movement away from this new "policy" of letting homes go into foreclosure en masse, with no way out whatsoever for troubled homeowners.

    One of the attorneys I work with was busy negotiating about ten cases
    for us, and his panicked phone call on Monday afternoon was what tipped
    me off. Then my company started hearing from people who were involved
    in their own negotiations, every one of them with a story about how the
    bank called them on Monday and called off the whole thing. At this
    moment, I’m not aware of a single negotiation that’s still going on,
    with the exception of two that an attorney I know managed to keep alive
    by convincing someone he knew on the other side to risk their job by
    breaking the new rules.

    That means….

    Lost your job and missed a few payments? Pay them in full, right now, or lose your home.
    Grandma got shafted into an unfair mortgage she should never have been given? Pay it on its terms (unless you can refinance by some miracle), or Grandma’s homeless.
    Interest rate about to increase, making your payments jump several hundred bucks a month, even though your home isn’t even worth the amount of your loan anymore? Tough titties.

    …And much, much more. I talk to and meet with these people every day, and up until this week, it’s been a source of great pride to be able to help at least some of them out, because almost none of them deserve to lose their homes.

    Well. As of "Black Monday", people who call me can either A) have the credit score and means to refinance (which means they can’t have missed any payments, and their mortgage can’t be more than about 80% of the new, lower value of their homes, and they have cash on hand for closing costs); or B) pack their bags.

    But WHY???

    What’s really scary, besides the fact that nobody seems to know this is happening, unless they do a job like mine; is that if they do know about it, they don’t know why.

    Since Monday, I’ve written to several blogs and called everybody I can think of short of my state representatives (who are next, if I can’t get some answers soon) to try and figure out what the hell banks are thinking. Nobody can tell me — in fact, everybody so far has been shocked to hear what I’m telling them about Black Monday. Everyone who checks up on it agrees that it’s happening — major foreclosure law-firms have their orders to cease negotiations immediately; and citizens not in foreclosure who were attempting to work a deal out themselves all got shut out completely. No explanations — even the super-huge law firms don’t seem to know why they were given these orders, or towards what purpose.

    Thinking more generally for a moment, it’s hard to see what banks can possibly gain from this behavior: They lose usually at least $20,000 on every foreclosure, which is way over the cost of working out most loans with the borrowers. I don’t know about you, but I’m used to banks at least making sense — they may be evil sometimes, but you know how they tick; they’re doing what they’re doing because of the bottom line. But no-one I’ve spoken to can tell me how forcing millions of homes to go into foreclosure helps the bottom line for anybody.

    One super scary thing that someone mentioned to me as a possibly explanation is that maybe the banks have gotten together and agreed to try a "suicide gambit" — basically threatening to eradicate themselves (which is what unchecked foreclosures would do at this point) if the government doesn’t bail them out (as it plans to for Fannie Mae and Freddie Mac). This would be the most terrifying thing I could imagine — especially for homeowners — because as we’ve learned by messing with suicide bombers, there ain’t much you can do to fight someone who’s willing to die for their cause. So, although I can’t find the slightest shred of evidence that anything other than that is going on, I’m going to keep hoping as hard as I can that that isn’t it. If it’s anything else, some weird legal or tax thing maybe, then there’s a possibility that organizations like mine can figure out a way to negotiate with the banks that takes their "concerns" into consideration.

    Hopefully I’ll have more information later in the week — I’m still trying to get permission from some of our executives to make the really heavy-dirty phone calls. But this is definitely real, and if it continues, (seriously, let’s hope like hell that it’s temporary), it could be the worst thing to happen to the U.S. — and even the world — economy yet.

    http://www.puredoxyk.com/index.php/2...re-apocalypse/

  • #2
    Forget to take your depression meds again, Stormy?
    "First of all, then we have to say the American public overwhelmingly voted for socialism when they elected President Obama." - Al Sharpton, March 21, 2010

    Comment


    • #3
      Lol Stormy... you're smarter than this man! Please stop posting this garbage.

      Comment


      • #4


        These days, there isn't much that could happen that would surprise me.... even the total collapse of the stock market with the way these banks have been lending out money to anyone and their dog. It's their own fault.... and the government's to blame as well for bailing people and companies out.

        Even so, Stormy, relax just a bit. Your blood pressure has to be through the roof (I know mine is, but usually it's because of all the morons I see who "run" this country).
        Last edited by Chit2001; 07-19-2008, 01:26 AM.
        1*

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        • #5
          Originally posted by Columbus View Post
          Lol Stormy... you're smarter than this man! Please stop posting this garbage.
          I know...I know. Everyone views this as garbage. That's the way sheeple act. No one sees the tsunami. They all see a beautiful beach.

          Comment


          • #6
            Originally posted by Chit2001 View Post


            These days, there isn't much that could happen that would surprise me.... even the total collapse of the stock market with the way these banks have been lending out money to anyone and their dog. It's their own fault.... and the government's to blame as well for bailing people and companies out.

            Even so, Stormy, relax just a bit. Your blood pressure has to be through the roof (I know mine is, but usually it's because of all the morons I see who "run" this country).
            Thanks, for the good word. Believe me, I'm relaxed, and ready.

            I know this site is not very stock market oriented. It's very much public sector. But there are many here who've got investments in various investment vehicles, hoping they mature upon their retirement from their jobs. My postings of what is coming down the pike, is only my way of helping those who aren't market savvy.

            I'll shut up, if the consensus so chooses. It's not my retirement plan, which is under the gun.

            Comment


            • #7
              If this were true, it would be a sign that the banks thought that home values are increasing. Otherwise, foreclosure would not be in the banks' interest. Of course, the conspiracy theorists seem to believe that businesses work together to ensure their own demise. Rather, I think they are rational, even though they often are wrong. Not this wrong, of course.
              Facts do not cease to exist because they are ignored. -- Aldous Huxley
              Two things are infinite: the universe and human stupidity. -- Albert Einstein

              Comment


              • #8
                Originally posted by Stormy View Post
                I know...I know. Everyone views this as garbage. That's the way sheeple act. No one sees the tsunami. They all see a beautiful beach.
                I see the "flood" also, but I do think that gov't and businesses will get a handle on this ! We are in a full blown recession right now-plain and simple,and we are going to all have to do our share.we all need to spend better,make better choices,save what we can ,and be better stewards of money.gov't regulators are going to simply have to crack DOWN.Help the more responsible banks and businesses,and go after all the ones who play loosely,like companies such as countrywide as well as banks like IndyMac! Business will have to be smarter and go LESS for the "jugular" and more so for the safe and sure investment and growth. we have pockets of "greed is good" types in business and finance-hang a few of those from the light posts in middle america ( or at least toss them in a REAL hard core prison cell at "bedtime" with 6'6" 360 lb yardcrock "bubba") and the rest will get it that they need to follow the rules.We'll survive this,but with some lumps,and hopefully- it won't occur again in any of our lifetimes.....
                Last edited by DOAcop38; 07-19-2008, 04:53 PM.
                "we're americans ! We don't quit because we're wrong, we just keep doing it wrong UNTIL it turns out Right"...

                Comment


                • #9
                  Originally posted by DAL View Post
                  If this were true, it would be a sign that the banks thought that home values are increasing. Otherwise, foreclosure would not be in the banks' interest. Of course, the conspiracy theorists seem to believe that businesses work together to ensure their own demise. Rather, I think they are rational, even though they often are wrong. Not this wrong, of course.
                  Well, the fact is, this is true.

                  Banks will foreclose on the house, because they'll get the physical asset, and resell at a break-even dollar value. The homeowner still gets shackled to the mortgage payment he/she owes. It's a win-win for bankers.

                  I don't understand your bringing up 'conspiracy theorists' into this discussion. What's the point?
                  Last edited by Stormy; 07-19-2008, 10:22 PM.

                  Comment


                  • #10
                    Quote:
                    Originally Posted by Stormy View Post
                    I know...I know. Everyone views this as garbage. That's the way sheeple act. No one sees the tsunami. They all see a beautiful beach.
                    Originally posted by DOAcop38 View Post
                    I see the "flood" also, but I do think that gov't and businesses will get a handle on this !
                    Why do we wait for government and business to get a handle on this? They are the ones that got us into this mess in the first place. Why would we depend on them getting us out? Why the people, need to get us out of this mess.

                    We are in a full blown recession right now-plain and simple,and we are going to all have to do our share.we all need to spend better,make better choices,save what we can ,and be better stewards of money.gov't regulators are going to simply have to crack DOWN. Help the more responsible banks and businesses,and go after all the ones who play loosely,like companies such as countrywide as well as banks like IndyMac! Business will have to be smarter and go LESS for the "jugular" and more so for the safe and sure investment and growth. we have pockets of "greed is good" types in business and finance-hang a few of those from the light posts in middle america ( or at least toss them in a REAL hard core prison cell at "bedtime" with 6'6" 360 lb yardcrock "bubba") and the rest will get it that they need to follow the rules.We'll survive this,but with some lumps,and hopefully- it won't occur again in any of our lifetimes.....
                    It's the government and businesses that got us into this mess. Why should we bail them out? Yes, we should do our share, and that is to suffer the pains we bypassed, as we spent, spent, and spent, the money we didn't have on garbage we didn't need. Suddenly, the tsunami approaches, and running for the high ground may be too late.

                    Comment


                    • #11
                      I'll shut up, if the consensus so chooses
                      I vote Yey!

                      No offense Stormy, but you are the new master of cutting and pasting random news articles. I appreciate the discussion, that SOME of your stuff starts, but most of us read the news as well and don't have a big urge to contribute to articles. Now if you post an article and follow with an argument for or against, it would get fun. You're kind of like a really random Drudgereport search device.

                      Or I guess you could start a thread for "Stormy's random news clipping"

                      M-11
                      “All men dream...... But not equally..
                      Those who dream by night in the dusty recesses of their minds wake in the day to find it is vanity;
                      but the dreamers of the day are dangerous men,
                      for they act their dreams with open eyes to make it possible.....”

                      TE Lawrence

                      Comment


                      • #12
                        Originally posted by M-11 View Post
                        I vote Yey!

                        No offense Stormy, but you are the new master of cutting and pasting random news articles. I appreciate the discussion, that SOME of your stuff starts, but most of us read the news as well and don't have a big urge to contribute to articles. Now if you post an article and follow with an argument for or against, it would get fun. You're kind of like a really random Drudgereport search device.

                        Or I guess you could start a thread for "Stormy's random news clipping"

                        M-11
                        No offense taken. Your comment is one vote against my posting news of interest.

                        I disagree that you search out and read the articles I post. No way. This is a very conservative forum. The articles I post are very....well.....not conservative, but eye-openers, and, especially for the conservatives with an open mind, and an interest in various topics. It may be an interesting read for them.

                        Although I've made little remarks with most all of my posts, I'll take your advice to give you my complete opinion of the articles. Fair enough?

                        Comment


                        • #13
                          The problem is that this type of blogosphere crap is seldom fairminded or evenhanded. Anyone can bitch up a Storm (hint hint) on the internet. Where's the criticism of all the house flippers that tried to get rich quick or the people buying homes well above their means or living year to year on the edge of bankruptcy?

                          Comment


                          • #14
                            Originally posted by JasperST4 View Post
                            The problem is that this type of blogosphere crap is seldom fairminded or evenhanded. Anyone can bitch up a Storm (hint hint) on the internet. Where's the criticism of all the house flippers that tried to get rich quick or the people buying homes well above their means or living year to year on the edge of bankruptcy?
                            No offense taken, Jasper. I'll take your comment as a 'Yey' vote, and place it next to M-11. One more 'Yey', and I'll stop posting.

                            Comment


                            • #15
                              Originally posted by Stormy View Post
                              Well, the fact is, this is true.

                              Banks will foreclose on the house, because they'll get the physical asset, and resell at a break-even dollar value. The homeowner still gets shackled to the mortgage payment he/she owes. It's a win-win for bankers.
                              There has been extensive publicity about the fact that houses (the collateral for the loans) are worth less than the amount of the mortgage much if not most of the time. Moreover, there is a huge inventory of unsold homes. If a bank forecloses, it will have collateral that is worth less than the loan principal, and will take an immediate loss. It will also have to pay to maintain the house while trying to sell it. The bank usually would be better off accepting a reduced income stream while waiting for the housing market to improve. In a "hot" housing market where there is a shortage of homes and prices are appreciating, I could see banks refusing to negotiate, but such markets, if there are any, likely would be limited to boom areas where oil and gas production is ramping up.

                              In many states, foreclosure releases the homeowner from his mortgage obligations. Furthermore, even if it does not, bankruptcy will release the obligation. Beyond that, the debt would be extremely difficult to collect anyway.

                              Any one bank would not always find foreclosure to be the most profitable (least unprofitable) option, and the prospect that all banks would conclude that foreclosure was always the most profitable option is about zero. And why would they all reach that same conclusion at exactly the same time, unless there was some agreement among the banks because they were trying to achieve some ulterior objective?



                              This simply makes no financial sense.
                              Facts do not cease to exist because they are ignored. -- Aldous Huxley
                              Two things are infinite: the universe and human stupidity. -- Albert Einstein

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