Rick Raw: Foreclosure Debacle Continues–Chaos Reigns

By Rick Grant Commentary rickgrant01@comcast.net

Since the economic apocalypse of 2008, foreclosure rates have continued to raise exponentially. Millions of homes in states like Florida and Nevada, specifically, Las Vegas, are sitting empty. Their former mortgage holders have just abandoned their homes because they owe much more than the house is worth.

Recently, a new scandal has log jammed the foreclosure process. Because the original mortgages were bought and sold so many times, documents have gone missing, and Federal investigators have discovered unauthorized signatures, and fraudulent loan applications. It’s a hurricane of worthless paper.

Consequently, the whole foreclosure system is overwhelmed by these problems that have exacerbated the resolution for millions of foreclosed homeowners. In other words, it may be years or never before these empty house are ready to be resold.

Meanwhile, the former owners have moved on to renting apartments or houses. Some or all of these missing mortgage documents may never be found. Some owners have just stayed in their home waiting for the ax to fall. In some case, these squatters have lived mortgage free since 2008.

Vast subdivisions are now suburban ghost towns with thousands of empty homes. They sit like abandoned movie sets. These houses could be renovated and offered to low income families to live in and maintain at reasonable rental rates.

Having people living in the houses would be preferable to letting the them decay or be targets for vandals. Yeah, but banks and financial institutions are not known for their logical thinking.
What’s worse, the banks blatant incompetence and fraudulent practices will go unpunished.

Furthermore, these chisseling, bumbling fools were rewarded with multibillion dollar bailouts at taxpayers expense. They caused the crisis and received a windfall. The middle class sank to the bottom.

Some courts have sent the banks packing, at least temporarily, and the banks themselves, such as JP Morgan Chase and Bank of America, have suspended foreclosures while they untangle the paperwork mess.

If the Federal agencies can prove that the banks that made these questionable loans can’t substantiate the signatures or find the documents, the banks face a financial tsunami of buying back tens of billions of dollars in missing or unauthorized loans.

Meanwhile, the whole culture of middle class suburban living has disappeared, scattered to the four winds as people lost their jobs and walked away from the upside down mortgages. These wastelands of empty houses stretch for hundreds of miles in Florida. Yes, and the home owners paid for this disaster with lost hopes and dreams.

The whole foreclosure debacle has continued to wreak havoc in the real estate markets, which are still severely depressed. If one thinks that the great recession of 2008 is waning, think again. It’s still raging.

Turning the millions of empty houses into immediate rental property would be a interim solution. However, the ghost subdivisions sit as a grim reminder of the lost culture of the middle class that were trampled by the greed addled banks selling bad mortgages, hastily put together with bogus signatures, then sold and resold, again and again, like commodities.