Thursday, February 11, 2010

"Pilot" Foreclosure Program

WSJ: Mortgage lenders are trying to arrange smoother departures for distressed homeowners who can’t be saved by loan modifications [my translation: "can't be sold 20% more debt so the taxpayers insure the banks gambling losses"] — and discourage them from trashing the homes on their way out.

The CitiMortgage pilot program provides incentives for more borrowers to use a procedure known as a “deed in lieu of foreclosure,” in which the borrower voluntarily transfers ownership of the home to the lender, which then cancels the mortgage debt.
I think it was May 2007 when I suggested on Market Watch that mortgage lenders take a page out of the Great Depression Playbook and let foreclosees stay in the house for modest rent payments, after a peaceful transfer of ownership to the bank. It took ten thousand bank closures to figure out something so simple.

There is nothing new under the Sun.

The fact that today's "highly educated" bankers don't know or understand anything about the history and lessons of their own profession, is also old news.

Overall, we are the most educated, and as a result, likely the dumbest generation of humans ever to roam the planet.


  1. They are not even requiring rent in many cases. The bank's would much rather have "owners" occupying the properties for upkeep. Forclosed non renters. Squatters in other words.

    Add these to the "shadow" inventory and we have a recipe for furthur deflation.

    Sure am glad I divulged my rentals four years ago : )

  2. Yes, you are correct. We have replaced common sense with "higher education." I wonder how lawyers and doctors have lost their savings by placing their trust in so called financial experts.

    What's your take on yesterday's 30y auction?

    Thanks fdr.

  3. I just bought several 18-packs of Michelob Light (bottles) for 10.99 each at Harris Teeter. Not a cheap store. I loves me some deflation.


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