We learn in part 1 that there is always a calm before the storm. In this case there was an arrogant calm fueled with artificial stimulus and fraudulent tactics inducing people to purchase and borrow against assets all across America. Equity in the amount of trillions of dollars was singled out by Wall Street and tapped into to produce incredible never before profits making tens of millions and even billions for executives and investors alike
THE PERFECT WAVE IS ABOUT TO CRASH
Meanwhile, something strange happened. Someone turned on a light switch and people were starting to see clearly that what was happening could not sustain itself if one was to assess it objectively. Further more, 17 previous Real Estate cycles have all left behind a strong history of evidence of fluctuating economic dynamics. The 911 attacks through off that cycle and this cycle we were to find out was interfered with as well but on purpose. For now, we add unemployment, lay-offs, devaluation and defaults plus panic and we have the start of a a meltdown
REALITY IS NO RESPECTER OF PERSONS
Many homeowners were now having to realize the reality of having a mortgage payment in excess of their means to pay. They also realized they could not sell their properties either. But then, where would they go anyway? The Real Estate market was now fast becoming flooded with product that no one would buy. WHY? Anything being offered was worth less as each day went on. If you wait, it gets cheaper every day.
BANKS USE OSTRICH TACTICS...THEY HIDE THEIR HEADS
The banks responded with NO RESPONSE. Instead, all they did was threaten, cajole, harass, mislead, hang-up and demand their monies while they started the foreclosure processes. Then, banks saw an opportunity to make money using the foreclosure process, government backed loans and mortgage insurance and put all their faith in those things. People or their borrowers were assessed to either be able to PAY or not. Nothing else mattered. What they didn't count on is the enormity of it and they being unprepared to handle it before, during, and after
DON'T WATCHDOGS WATCH BEFORE THE FACT?
It was during these times that the government who was a sleep was turned to and questioned as to what is going on and were presented with a scenario of a total meltdown of the economy as we understand it after the fact. The borrower was failing, the bank was failing and the insurance companies that guarantee performance when a failure kicks in were at risk of failing...
BAIL ME OUT OR WE ALL GO DOWN
Emergency measures were introduced to BAIL OUT the banks and to keep them a float at all costs. Borrowers, homeowners and associated services were treated as collateral damage, expendable and given little or no thought. Banks were now handling their delinquencies by telling people to keep paying at all costs to preserve the bank with an... or else added to it...For someone who just received help, they had short memories
LOAN MODIFICATIONS?
Then at some point, loan modifications were introduced but were so in favor of the banking industry that they made no sense at all. You were told to keep paying your mortgage, you would be considered late and you would get no guarantees during this process to modify. In fact, foreclosure procedures were not put on hold. Months and months went by..no news, no progress but foreclosure looms
PAY TAXES ON LOSSES?
Short sales were introduced which was a way to liquidate product by allowing a home to be sold for less that what it was worth. The government realized that losses would be treated as income and people who would lose their homes and be forgiven debts of hundreds of thousands of dollars by banks would also have to pay income taxes on that forgiven debt. Emergency measures were enacted to encourage people to cooperate and laws enacted to waive this ridiculous requirement were put into place
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