NOT TO BEAT A DEAD HORSE....But here is a question for you: WHAT IS GOING ON HERE???
In july of 2010, I wrote a post that got little or no attention---a handful of comments but a huge number of hits....I think I got 25 comments on the post.
So I dropped the matter--until the other day when I posted "SUDDENLY, LAST SUNDAY" here and got more than a hundred comments--it got featured and the re-blogged and the short URL was used 40 times!!!
Some felt that this was a subject never mentioned here on ActiveRain, so, I had to re-post this--just remember, I did not know the whole story then--not like I do now. Please keep in mind that I was unaware of the major bank fraud that took place--until now. Please read on:
WHAT IS GOING ON HERE???..WHY DOES THE FEDERAL GOVERNMENT NOT SEE WHAT THE BANKS ARE DOING?? ......Maybe they do?
I had to do it! I had write this after I saw Lenn Harley's post yesterday:FANNIE MAE SET TO COLLECT ON DEFICIENCY JUDGMENTS CAUSED BY STRATEGIC DEFAULTS. The message has got to get out there....Who will do IT??? Will it be the government? Will it be a lone wolf out there?...a Congressman perhaps who suddenly has an "AHA" moment and speaks up???
WHAT IS GOING ON HERE???
This is a question that we all have in the back of our heads..is it not??? Don't you wonder the same thing? Don't you ask yourself: "What is going on here?"....I have; I have asked as homeowners here in the Hamptons are being affected as never before by this massive failure of the housing market. I watch as solid citizens are threatened by foreclosure. This only reinforces the feeling I have that the banks have no intention to help homeowners keep their homes. How Many Homeowners Losing Their Homes Will It Take??? Why does the Federal Government Not See What the Banks Are Doing?...Or Is It That They Just Don't Care???
It has been recognized in this market that the banks, who got money from the Feds to help out withthe underwater mortgages have no desire to help out the troubled homeowners with modifications--too bad since the properties here have a better chance to regain their former value and since houses are starting to sell at a decent rate again; because prices have dropped to levels we have not seen since 2006!!!
However, the banks do not see the benefit to their bottom line and are, as a result, forcing the homeowners to short sell sooner rather than later and it is counter productive to the banks to act quickly to modify; instead they sell short, collect the subsidies from the government and then go after the homeowner for what they were behind in missed payments --- they can see a greater return on their efforts from that than from a good solid re-working of the original loans in order to keep the person in their home!!! The old "boot" of the property owner is the goal here and it is clear there is no genuine intention to really help anyone but themselves---it is shameful to watch retired people, elderly and young families all, to be so impacted by what the banks did in the first place.
Let's take a look at what happened: (please keep in mind that I am not a banker so this may seem naive; it is basically what happened as I watched it unfold)
- In their efforts to make the idea that home ownership was a possibility for all Americans the government made it a requirement through the Community Re-investment Act of 1992 that all banks were required to give loans out to any and all who had an income and in some cases, some who did not.
- The banks provided these loans as required but then had to create a way of selling these "questionable loans". So they packaged them with good loans into blocks of investment paper known as Mortgage Backed Securities. In other words, they literally "hid" the bad with the good and then sold them, in pieces called derivatives to investors from accross the globe. Fortunes were made on these investments.
- Then Hedge Fund's started betting on these derivates, betting that they would fail; buying them short--betting that they would lose value--just as the whole idea was beginning to unravel; this pushed the MBS to the bottom of the list of desirable investments at a very critical time....and just as the whole financial world started to recognize the fragility of the entire derivative concept...the bottom dropped out from under all the funds that were made up of this investment paper...WHY? This is why:
- Most of these loans were sold as Adjustable Rate Mortgages in order for the buyer to be able to afford the payments--the adjustment periods being 1 to 5 years on most of these loans. As these loans began adjusting, we saw the first layer of loan failures happen. More and more began to adjust as time went on and it snowballed into what we now see as a total collapse of the entire housing market at ALL price levels; that in combination with the money market fund "breaking" the dollar for the first time in history, then the Lehman Bros. failure and the stock market crashing...
NOW it is all crashing down around us.......and it is getting worse!!! Through the tricky and risky business of MBS and Derivitives that are now known to be total failures in the housing arena, Someone has to pay...someone has to be held responsible for what took place!
TARGET?....THE HOMEOWNER! MAKE A FORTUNE ON THE BACKS OF THE INDIVIDUAL HOMEOWNER WHO HAS NO POWER TO FIGHT BACK!!! Banks are going after the homeowner to get them out of the mess THEY created!
And there you have it!!! That is a shortened version of just how it unfolded; so, who is to blame you ask??? I think it is clear that the Government and the banks share the blame on this one. THEY should be the parties held responsible, not the homeowner! It never should have happened in the first place--but it did and therefore it is my opinion that this is the reason that we are all affected now; We all must be concerned about property values, even if we are not in a position to lose our own homes!
**ALL INFORMATION AND CONTENT IN THIS BLOG IS ORIGINAL TO PAULA I. HATHAWAY. The views expressed herein are my personal views and do not reflect the views of Douglas Elliman Real Estate
Paula I. Hathaway, Senior Broker Associate, Douglas Elliman Real Estate
Southamtpon Village Real Estate Specialist since 1995; Also Specializes in North Sea, Noyac, Water Mill and Bridgehampton, New York
Diamond , Gold and Chairman's Circle Awards; Top Producer since 2005
Click here to see my Hampton's website to see all my listings; please email me or call me for all your real estate needs in Southampton, Bridgehampton and Watermill: http://www.elliman.com/paulahathaway
MY REAL ESTATE SHOWS: