(This post begins with a video interview (length just under 4 1/2 minutes) with Ex-Ginnie Mae CEO Joseph Murin on housing and illegal foreclosures which is well worth the time.)
[The interview continues an] Excellent [level of] detail. Murin says he expects foreclosure delays of between 6-18 months due to the moratorium, which is much longer than most current estimates of 30-90 days.
Here’s the nightmare scenario for banks — more homeowners start to challenge the ownership of their mortgage, and choose to stop paying in the interim, destroying bank profits and balance sheets while they wait for resolution from Congress or the courts. Could get ugly. Quickly.
Both Janet Tavakoli and Chris Whalen said Thursday it could necessitate a 2nd-round of bank bailouts. The outcry from taxpayers would be deafening….
Read it all and please follow the links to the Tavakoli and Whalen comments.
Sorry, I would rather this would all go away, but this foreclosure scandal is a big deal, and one on which most of the media who should know better have dropped the ball.
Ah, here is a money quote for sure, “The result of which would create a new solvency crisis for banks, and this time it could very possibly be for real”. Fool me once shame on you, fool me twice shame on me.
Who, outside the beltway and off Wall Street, is going to cry over a bunch of banks getting wacked? And when might the media go after the real story which was Fannie and Freddie buying paper to drive mortgages to anyone with a pulse? Won’t happen because that would really be a most “Incovenient Truth” for liberals and Progressives who have driven the “equal outcomes” housing mindset.
If it is fraud that we want to learn about, it isn’t in the back rooms of the banks, hint: Fannie, Freddie, Barney, Maxine, and Chris.
And let those of us in the “religion business” consider the corrosive effect on society if people just decide to quit paying on mortgages because “everyone else is doing it” or “those banks screwed people, so we’ll pay them back”.
3. Capt. Deacon Warren,
I think it is worse than that. It isn’t just that “everyone else” will have quit paying their mortgages. Those that saved, did the right things concerning accruing debt, and have been paying their own mortgages all along are also being taxed to fund bailouts for these banks, (thus paying for their neighbor’s McMansions and profligate lifestyle – punishment for being fiscally responsible).
If there is no moral hazard for the negligent lenders and fraudulent borrowers, one will be created for them by the rest of us, rather than continuing to be perpetual suckers. We got surprised and panicked into the first gravy train bailout. We won’t let that happen again. No bailouts for the banks. No bailouts for the underwater mortgage payers. If they try, we will all quit paying. We aren’t going to keep paying for everyone else’s mistakes and frauds. The gravy train is over.
Hey S&T: with all this mortgage mess I guess the real fools are people like me who worked hard, followed the rules, and sacrificed to pay off our house. If I had just waited and been patient, I too could have given Countrywide the single-finger salute. Not really, still have a conscience [and annoying it can be!].