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HOUSING: Government, media are complicit

Letter by Laura B. Goggins, Fircrest on Oct. 20, 2010 at 1:58 pm with 11 Comments »
October 20, 2010 2:28 pm

So let me get this straight. Lenders take money to put huge numbers of unqualified borrowers into mortgages far beyond their ability to repay. Then, when the easily foreseen defaults come to pass, they prepare fraudulent documents and forecloses on those mortgages, taking dreams, down payments and equity with them.

And The News Tribune (editorial, 10-20) refers to those actions in terms like “skirting the rules,” “inattention to details,” and “unethical?” How about reprehensible, shameful and contemptible? What about culpable and, yes, criminal?

The corporate megaliths count on media and government’s hesitation and soft pedaling of both the scope and scale of this injustice to enable them to continue perpetrating massive fraud. The media and government, in doing so, align themselves with the corrupt and become part of the problem, whether intending to or not.

Leave a comment Comments → 11
  1. the3rdpigshouse says:

    I am yet to hear about the number of people having their homes repossessed that actually “did not miss” the number of payments that caused foreclosure!!! If you don’t meet the requirements of the contract you signed – you lose your home – period!!!!

  2. Almost all of the homes in foreclosure right now have loans that were either zero-down purchases or cash-out refinances where the owner actually put a bunch of the bank’s money in their pocket based on a value that used to be there, but isn’t anymore.

    Could somebody please explain to me how Joe Homeowner, who bought a house with no down payment in 2003 for $200,000, refinanced it in 2007 for $350,000 (putting $150,000 cash in his own pocket,) and has now been living rent-free for a year because he hasn’t made a mortgage payment for a year is getting ripped off?

    Foreclosures where someone bought a house several years ago with a down payment and never refinanced to take out equity as cash are few and far between.

  3. To Ronv and 3Pig – 2 simple words – Lost Job.

  4. Right, that happens. So you can’t afford your house anymore and you have to sell it. But wait — you can’t sell it because you owe WAY more than it’s worth because you refinanced to line your pockets with cash that wasn’t really yours.

    Check out some foreclosures on http://www.northwesttrustee.com, then look up the deeds of trust on the pierce county assessor’s site. Almost all of the houses have deeds of trust for way more than the original purchase price, which means the homeowners cashed out their equity as the houses appreciated in value. Don’t bother bringing up exceptions because I know they are there.

  5. gowenray says:

    Ms. Goggins has indeed made a most astute observation about media discrection. You don’t bite the hand that feeds you!

  6. Welcome to Vegas…A.R.M.

  7. Ever hear the term ‘supply and demand.’ In order to sell a house, one has to have a buyer (voice of experience – I’ve sold more than one house in my day). But with the loss of jobs in this country, fewer and fewer families are able to buy or keep up payments. So with more houses on the market and fewer buyers the price goes down. It also does not help that banks and other lenders are hording the money and not making loans.

  8. What are you talking about? Banks are making tons of loans. They just no longer lend to people who 1) have a history of not being able to make payments on the money they’ve borrowed, and/or 2) don’t make enough money to be able to afford the payments for the new loan.

    Why is that a problem? This whole disaster was caused by banks lending money to people who couldn’t pay it back. Now they only lend to people who can pay it back and you think that’s bad?

  9. RV:
    Yes are making some loans. But as you say only to people who can pay, which means they have a job. That is not bad. That’s what banks should do. Had the banks been doing that instead of playing russian roulette trying to hit it big on housing boom, the country would not be in the mess it is today.

  10. That’s for sure. The “experts” who all claim nobody saw it coming are big fat liars. I saw it coming.

  11. RV – lots of people did, but not enough people believed them.

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