Banks try to clean up remaining mortgage mess

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  • terra nova Park City, UT
    Jan. 8, 2013 11:06 a.m.

    The "fraud" associated with bad foreclosures amounts to nothing more than not being able to produce the original documents (mostly because of the MERS mess). That's bad management. It fails to meet the test for fraud.

    The bank meltdown and bailout happened because of unregulated creation of derivatives that sold risk on out-dated statistical models which made them appear safer than they really were. The change in the historical models was precipitated by a Clinton-era push to get weak borrowers into homes (made possible by partial deregulation rising out of the Bush-era) and Alan Greenspan's belief (attributed Ayn Rand) that the markets should regulate itself.

    Defaults increased dramatically as the market went south and the derivatives created enormous liability. Banks deemed "too big to fail" were bailed-out. Taxpayers were left holding the bag. But without the intervention, the destruction in the US Capital markets is likely to have been so far reaching and the pain so intense that any semblance of normal commerce would have been destroyed. The bailout was the only rational approach.

    However, none of this makes buying a house a bad idea. Greed and imprudent use of credit is the problem.

  • Say No to BO Mapleton, UT
    Jan. 8, 2013 10:08 a.m.

    I suppose it would be well to present a little more foreclosure news.
    The Office of the Comptroller of the Currency was bound and determined to find trickery by those big bad banks when it came to loaning money. After taking 20 hours per file (at $250 an hour) to review them and look for fraud...well, they didn't find any. So they are going to stop looking and start using the money for relief to those who bit off more than they can chew.
    Here's the reality check: Banks don't make money when they foreclose on someone. They take a big loss. They hold on to properties so they don't glut the market. They fix up the holes people punched in the walls to show those big bad banks. They have to keep the properties up and keep squatters out.
    All the while getting ZIP on the loan that defaulted.
    But keep up the narrative. Newspapers will publish the anecdotes. Meanwhile, BOA will just charge all of us more to cover the settlement costs. That's redistribution for you.

  • My2Cents Taylorsville, UT
    Jan. 8, 2013 4:36 a.m.

    No need to worry about the unclaimed funds for bad bank debt, the banks will figure out a way to claim it so isn't returned to the tax payers.

    The banks and mortgage loans are not even attempting to any changes, they are just redistributing the losses and debts thorough other means of recovering the burp in their profits. Adding fees and services at high cost is one way they are recovering, almost criminal the way the feds have allowed banks to continue their graft.

    Home buying and ownership is such a hoax and loss for homeowner's its a shame to even call it a assets anymore. I don't know who ever coined the idea that home ownership is the amreican dream was a real flake. It has never been the american dream, its the bankers dream to have every american indebted with a home he can't pay for, even to this day of economic depression.

    When we had prosperity and growth in the mid 20th century, we also had expendable cash incomes that were not high by any standards, I mean under $100/mo expendable for car, home, gas, and food at $4.25/hr (#250,000 today)