Monday, March 30, 2009

Mortgage Banks Abandoning Homes

In a disturbing new trend, banks and mortgage holders are simply walking away from properties they had meant to foreclose on. It's simply not economically viable for them to follow through.

The whole purpose of foreclosing on a home or property is to take possession of it and get what they can for it, usually at a sheriff's sale. They typically take a loss, but the move accomplishes two things - they get the property off their books, and at least they get some of their money back.

Why has it happened? It works like this: when the adjustable rate mortgage kicks in or the occupant becomes unemployed, the foreclosure machine begins to roll. The occupants are evicted, the home is evaluated and basic home repairs are made, and then it's sold.

In the days before the economic meltdown, this was all just another day at the office. But there are so many homes going unoccupied that the system gets overrun. Houses that had some resale value when the eviction happened often become victim to crackheads and the home gets trashed.

Municipalities are strapped for cash, so the police force can't keep up. And the banks see a big fat zero and walk away.

But here's the rub; the mortgage is still in limbo and so often the previous occupant is still liable for making the monthly note. Fat chance.

And ironically, when the democrats in power (the Barney Frank, Nancy Pelosi machine) were assuring us that Fannie Mae and Freddie Mac were "just fine", and McCain was calling for their reform, these evicted folks were paying tax money to bail out the banks that are now throwing them under the bus.

But they're not bothering to evict the gangbangers and crackheads.

The road to hades is paved with good intentions and no good deed goes unpunished.

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