Because in America, it's far more shameful to owe money than it is to steal it.

The lenders will all take the hit but they are reporting large profits.....and, no, the cost will not be passed on to other consumers as the interest rates are at rock bottom now.

Why shouldn't the little guy consumer get a windfall for a change?  The big money people  and funds usually get all the breaks and undeserved money.

That some people who don't "deserve" help might benefit from a HOLC program, or from judges having to make the debt go away because those who knew what the rules were failed to observe and comply with them, is pretty much the equivalent for me of a very important principle: "better that 10 guilty men go free than that one innocent man be convicted."

It's a principle that our president does not apparently live by, at least if it's a choice between the savvy businessmen bankers on the one hand, and some schlub of a homeowner on the other.

There's a glimmer of hope ahead.

Up until now the banks have been "regulated" by the Federal Government. And because of that, and the fact that our Federal Government has been corrupted beyond redemption, they been allowed to expand and mutate into the killing machines they've become. But the laws regulating real estate and land use are State functions so now the State Attorneys General have gotten into the action.

That's a very good development as the State A.G's are closer to "the people" and generally have a more benevolent and consumer-friendly attitude towards home owners.

Anyway, the A.G's have gotten into this thing with a vengeance, forming an organization that all 50 A.G. have signed onto. You'll be hearing much more of this because, first, they're not beholden to the banks, and second, they're elected and thus, answerable to "the people."

(One reason I'm excited is that they issued a statement which basically said they believe fraud was involved and, as such, criminal, not merely civil, charges will be filed. Finally!)

Stay tuned......

We bloody worked out GM and a small mortgage we have no capacity.  

A Bank can record a Notice of Default if a borrower is late.  90 days after an NOD is recorded, the bank can record Notice of Sale, which must give at least 21 days notice of the auction.  A borrower can cure and reinstate the loan on the old payment schedule merely by paying the past due amounts--and can make this cure up to 5 business days before the auction.

If there is a problem in the paperwork etc, a borrower can sue in court to enjoin the sale.

The trade off for non-judicial foreclosures is that the bank cannot come after the borrower for the difference in unpaid debt and what the house realizes at the sale.  So, people can walk away from their mortgages without incurring any personal liability.

During the last real estate downturn in the early 90s, there were a lot of people who made hundreds of millions of dollars buying distressed loans and foreclosing.  They would buy the loans (this was during the S&L crisis) at pennies on the dollar, and then work the bad debt by foreclosing or engaging in collection efforts.  It was "Cash for Trash."

Back then, however, the loans had not been securititzed and were part of a larger portfolio that the originating bank or perhaps successor bank held, or often a portfolio held by the original S&L.  So, this business of phony transfer documents did not exist....

I thought the early 90s was really, really bad and would never be replicated.  People in SoCal called in a Real Estate Depression.  But this current situation is far worse.   There is another wave of foreclosures on the horizon....