The Pig in the Python

The Pig in the Python
Copyright (c) 2012, Deanna & Jim's GOLD Team

Politicians and shareholders dislike pain. So do homeowners.

So first the banks foreclosed on as much as they could as fast as they could (2007-2008) to liquidate unperforming assets before their values fell further.

Then the financial world fell apart. And there were "Foreclosure Moratoria".

And Protection of Tenants at Foreclosure requiring new REO owners to honor leases.

And extensions to the foreclosure moratoria.

And HAMP but the loan mods didn't work too well. So we got 2MP to help with the seconds.

And then we got HAFA.

And then we got HARP.

And FHFA rolled out Deed for Lease enabling the non-paying owner to trade their deed for a lease.

And there were some Public/Private Partnerships.

And after 12-13 months Fannie or Freddie gave the former-owners-now-tenants notice that they needed to move.

And some of the owners petitioned to get the lease extended.

And Fannie/Freddie extended them month-by-month.

And then Fannie/Freddie started bundling up bunches of the extended rentals on the new month by month leases and selling them to new servicers.

But these servicers only have to honor the current (month-by-month!) lease, so they can just give the occupants 60 days notice and evict them! And then, since they bought the home from Fannie/Freddie who already did the foreclosure a year or two ago they can now sell it as just a resale.

And the rumors of "A New Wave of Foreclosures" continue.

But no REO agent I know is willing to hold their breath.

Oh yes, there's another election this fall.

Keep inhaling and exhaling.

The least politically painful solution to this problem has been and will continue to be to kick the can further down the road and continue to allow inflation to reduce the size of the dollars being used to pay back the dollar-denominated debt. It's a good thing mortgage loans are not demoninated in barrels of oil, or ounces of gold!

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