Wednesday, November 26, 2014
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The foreclosure crisis and the unemployment crisis feed off the education crisis and the consumer (gas, etc.) crisis, and they all lead to an increase in the crime rate, another crisis.

By Yussuf J. Simmonds
Sentinel Managing Editor



According to the reporting agencies that monitor foreclosures nationally, last year there were a million recorded foreclosures with California among the states leading the pack. Los Angeles County reported the most in the state and then it boiled down to the city of Los Angeles. The foreclosure tragedy did not just happen; it has been years in the making and the experts are forecasting more this year--throughout the country.

(Generally the foreclosure process works like this: when a borrower fails to pay back the due loan amount to the lender or miss some installments then the lender will seek to foreclosure on the borrower's residence/property. The lender files a notice, the beginning of the process to take away or take back the borrower's property as per the contract/mortgage between the borrower and the lender. The lender has to inform the borrower of his intent and the process can take 90 to 120 days or more. The home/property owner can stop the foreclosure process by paying the due amount of the loan in full up until the property goes to sale--most times that does not happen).

Recently, the three major reporting agencies have stated that though the worst has passed, the process of recovery will take years for the average consumer to "make it back." The devastation that the big banks have wrought on the nation's homeowners combined with the monopolistic deregulation misconduct is a part of what cause the overall financial disaster. And it may be a case of 'the chickens are coming home to roost'.

At the beginning of April, Sixty Minutes did a report on how the major banks handled the massive number of foreclosures and the assembly-line method--via a company, doc X and an abstract signor of mortgage documents, one Linda Green--they use in the foreclosure process. It revealed a hard, cold reality for those who had already lost their homes--the biggest investment of their lives.

On the other hand, some in the real estate industry seem to believe that the banks were also victims on a massive scale. Mark Alston, president of Consolidated Realty Board stated, "The impact of foreclosures as a result of the current economic crises has decimated our communities. Every effort needs to be taken to assure that foreclosures happen only after all other alternatives are exhausted. The idea of the major depository institutions using fraudulent means to achieve an end in this environment is repulsive.

While we recognize the sheer workload as a result of the number of foreclosures, short cuts are not the answer. Are these those same short cuts that created the so called "Liar Loans" that we suffer from now? The foreclosure process needs to be a perfection process. We can't live with, "it was pretty close to right", not when families are displaced and lives are interrupted. The banks need to operate by the rule of law just like everybody else."

The Obama administration in attempting to overhaul its plan for fighting foreclosure focused on lowering rates for borrowers with subprime loans...it was of little help to unemployed folks lacking a steady income.

The administration then expanded the program by requiring lenders to give up to six months of mortgage assistance for unemployed homeowners. In addition, it also increased incentives for lenders to cut loan balances for these borrowers. All of these programs came to naught; people were still losing their homes and most were unable to find steady, dependable employment.

However, somewhere at the end of the aforementioned 60 Minutes program, one of the government regulators seemed to suggest that though the banks may have been culpable, they (the banks) are the ones that really need to be fixed ... repaired ... and made back whole ... so that they would not repeat the behavior that gave rise to the problem in the first place. But in reality, it is/was the consumer(s) who was left homeless that really needed the help.

"In light of the slap on the wrist our regulators are preparing to give 14 servicers who admitted to breaking the law, legislation to require loss mitigation prior to foreclosure which is needed now more than ever before," said Congresswoman Maxine Waters while reintroducing landmark legislation to prevent foreclosures and hold servicers accountable. "It's the only way to protect homeowners and to prevent foreclosures."

Furthermore, she added, "After the sub-prime disaster surfaced, the feds gave the banks the "stimulus" to stave off the massive foreclosures throughout the nation, but only the banks were stimulated; statistics show that 95 percent of homeowners were denied modifications (access to the stimulus dollars)."

It appeared to be the same tactic happening again: the people need help, so the government bails out the banks in order to help the people--via the modification process--but the help never trickles down to the people. The mortgage industry has stated that over 90 percent of modification applications have been denied. What happened to the money that was supposed to help the people? Stay tuned ... it's coming ... well, maybe.

Category: Local


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