Thursday, October 21, 2010

The Spreading Mortgage Foreclosure Mess

Things has certainly gotten out of hand in the mortgage foreclosure processing mess, haven't they?

With the NY Fed weighing in on a lawsuit against BofA, things have escalated to an unprecedented level.

Yet, at root, it continues to appear to be much ado about nothing. A tempest in a proverbial teapot.

According to a Wall Street Journal editorial which ran yesterday, the number of inappropriate foreclosures they could find numbered no more than dozen, in a nation of over 300 million people.

So the bottom line is that almost nobody who has not been delinquent on their mortgage is being foreclosed.

Meanwhile, I listened to a Fox News report yesterday which included an interview with the owner of a home with a modified mortgage. I won't get the numbers exactly right, but the woman's mortgage declined from about $1,800/month to something in the neighborhood of $700/month after modification.

Talk about injustice! This is why so many people resent those who made unwise home purchases, then receive generous modifications which leave them in homes they can't actually afford. Rather than putting those homes on the market at the market-clearing, lower prices which others could afford.

To me, the allegations of robo-signed foreclosures is a red herring. The real issue remains that politicians have been improperly leaning on and coercing banks to suspend legitimate foreclosures since the presidential primaries of 2008.

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