The Foreclosure Wave” — Now a Tsunami of Sorts
Over the past two days, the popular foreclosure reporting firms released their monthly numbers and the takeaway was that the foreclosure crisis is getting worse. Indeed, the foreclosure crisis is worsening, but July’s actual foreclosure numbers do not pose much additional risk to the housing market because most of the worsening was seen in the pre-foreclosure pipeline (notice-of-default & notice-of-trustee sale). Based upon July’s results, the players that will feel most of the additional reported foreclosure pressure are the banks, mbs holders, insurers, and servicers.
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It is important to always remember that when one person gets a ‘good deal’ on a house, orders of magnitude more are thrown into a negative-equity (or deeper negative equity) position exponentially increasing their likelihood of loan default. Loan default leads to foreclosure and another ‘good deal’ on a house and so on and so on.
Phi Beta Iota Editorial Comment:In October 2008, in the author’s preface to ELECTION 2008: Lipstick on the Pig, we decried the planned bail-out of Wall Street and suggested instead a moratorium on foreclosures and evictions, a 10% interest rate cap across the board, and federal intervention at the INDIVIDUAL level of need. BOTH Presidential candidates, representing as they do the two-party tyranny that has been bought by and is directed by Wall Street and Goldman Sachs in particular, demonstrated their subservience and their lack of both intelligence (in the informed sense) and integrity (in the independence sense). Both of them–and both of the two parties now still allowing Goldman Sachs to steal FUTURE FUNDS form the U.S. Treasury–are in breach of the public trust.