More Lies: Housing Data



“You have to ask yourself the question “WHY?” why would banks reject modifications where borrowers would keep paying and instead foreclose and then abandon the house. Something is going on here.” — Neil F Garfield,

“The real answer is to go to the banks and stop asking for answers and start asking for the money they made while everyone else lost on the deal.” — Neil F Garfield

Editor’s Note: It’s all happening because whenever reporters, officials or investors research the housing market, they are getting data from the very people who don’t want you to know anything. Going to the Banks for mortgage and housing data is no different from asking a convicted felon (let’s say a rapist) for education on sex. You are going to hear what they want to tell you, not the facts.

As the article below points out, Banks and Realtors, as well as others who have a stake in making you believe that the housing market is (a) not that bad and (b) is getting better. Both statements are untrue. The people to ask are the city officials who are dealing with the aftermath of the holocaust caused by Wall Street mortgage manipulations, the county recorders, and the people themselves who live in neighborhoods that have been destroyed by foreclosure because most of the homes are vacant , stripped or the headquarters of the latest gang of thieves or drug dealers.

As pointed out below, the official Bank figures state that there are 5,000 vacant homes in Chicago. In a city that size, one would think that the vacancy is within reason. But the true facts are that more than 100,000 homes are vacant, with probably the same number about to be vacant as the homeowners confront mortgage servicers and banks claiming their homes but not yet doing anything about it.

These are the people who have strategically defaulted, stayed in the home, and then waited or put up a fight, lasting months or even years without payments, thus recovering part of the investment they made when they bought the house or bought the silly loan product that the “lender” pushed on them, knowing that the home would be in foreclosure.

So these people are sitting on homes that at best are worth 50% of the appraised value used when the “loan” was closed (albeit with someone other than the investor-lender). This part of the problem can be easily fixed by principal reductions or corrections to reflect market reality. Businesses do it everyday in Chapter 11 reorganizations. But the Banks bought their way into legislation that prevented bankruptcy judges from stripping residential liens down to their true value — which is the underlying value of the property.

So the only practical alternative is to walk away and let whoever wants to foreclose, go ahead and steal the property with a credit bid that comes from a party who never was a creditor in the financial transaction between the borrower and the lender. It all seems surreal but it is true.

THE RECESSION: Then you have the unemployment problem and the underemployment problem where people who had an income no longer have that income and they are running out of savings, retirement funds and credit to keep making the payments. This (a) obviously presents imminent foreclosures that are not yet on anyone’s books and (b) hides a valuation problem for homes that is sickening if you are accustomed to thinking of this problem as a cyclical problem that will fix itself.

As unemployment and underemployment rises, and wages either stagnate or go down as a result of inflation and a weak economy, median income drops. It is just a mathematical computation: arithmetic. If people don’t have the income to buy or maintain a house they are not going to own one. As the Case-Schiller index clearly shows, proven over 120 years of analysis, home valuations are so closely tied to median income that they can be considered the same thing.

The housing market stinks and it is dropping. City officials are stuck with figuring out how, on shrinking budgets, they are going to deal with so large a number of homes that are vacant with an endless supply of vacant homes in sight. Some cities are bull dozing the homes while others consider using eminent domain to ward off future foreclosures. The real answer is to go to the banks and stop asking for answers and start asking for the money they made while everyone else lost on the deal.

As intermediaries, the banks are supposed to get paid for their service in processing transactions, deposits and loans. We now have the banks entering any transaction they want as a principal without disclosure to either the borrower or the lender, and then, temporarily “owning” the loan, selling it 20-30 times. Having done that and made a fortune, they toss the “loss” over to the investor lender when there is nothing left in the investment. Pensions get slashed, retirement funds get reduced, and median income drops even further.

Very Bad Things Happen When We Depend on the same People Who Caused the Foreclosure Crisis to Track Its Destruction

Alternetnet/ by Sam Jewler, Chris Herwig

See Full article at very-bad-things-happen-when-we-depend-same-people-who-caused-foreclosure-crisis-track

12 Responses

  1. Well, have not been here for quite awhile, but every once and and a while, I will read to see if anything is new. To date, nothing has been noteworthy new. However, had to respond to this one. Neil writes — “You have to ask yourself the question “WHY?” why would banks reject modifications where borrowers would keep paying and instead foreclose and then abandon the house. Something is going on here.”

    Glad you are finally asking this question, Neil. Why? Because these are NOT mortgage loans. Largely, foreclosures remain the remnants of the subprime mortgage fraud. This subprime market, however, never consisted of actual and legal mortgages, which is why the derived securities and swaps are also bogus. This is the biggest oversight by defenders of foreclosure victims. Hope that this might be the start of regrouping on this site.

    As time has passed, fewer and fewer homeowners are coming forward to defend their homes. Why? There is no equity left for them, and they cannot pay for “upkeep” or property town taxes — on a home that is worthless to them. What is left? A middle class/lower class that has nothing. Nothing left to support the upper class who, by Federal Reserve maneuvering, continues to gain by an artificially propped stock market. Ultimately, upper class will not survive without the middle/lower classes.

    Does anyone want to keep a house anymore?? No. Does anyone want to buy a house anymore? No (except those who can afford cash payment).

    Will the fraud in the subprime market ever be exposed? Yes. But, not with the old ideas that have promulgated to date. People have to be angry enough. Angry enough to come forward and fight what was really done to them. This is not happening.

    Again, to answer Neil’s question — WHY?
    Yes, something is going on here. What we have is nothing more than debt collection. Debt collection concealed by deregulation. Debt collection on modifications ALREADY executed on ALREADY classified default debt. Default debt, before you even refinanced. Default debt on subprime new purchases, before you even knew you were classified as a default debt. Default debt collection. Not regulated. Not a mortgage. Not a refinance. Not a valid and legal loan. And, why will they not modify these false default debts — AGAIN?? Because it is simply not profitable. And, they can get away with it, because they are not regulated.,

    Yes, Neil, something is going here. But, no one seems to care anymore.


  2. @davies (so far) how is a GSE mbst remic-compliant if it fails to identify the / a creditor? Not my thing, don’t ya know, but still….
    If the certificate holders are in fact creditors, doesn’t look like it’s of the borrowers, looks like it would be of the guarantors…..?
    Now remember please that patience is a virtue!


  3. @davies – this better be good! Just moved it to No. 1 in my tomes of stuff to read. thanks


  4. The home is not stolen if you sold your home from the start ….you sold it—it was never stolen . Trust me. There is one significant document noone brings to court to confirm this
    see “Emergency Economic Stabilization Act”


  5. Neil, do you mean that the loan has been sold to multiple investors and that they each believe they own it or that it has been sold and re-sold multi…etc

    economic goodwill. this guy just dont listen. He just wont listen


  6. Rite-on Neil. This is just like 9/11 morons pushing for answers and investigations from same cabal who engineered it:


  7. @JL

    The only accounting they would give me after repeated demands was payments to servicer only…that’s it. They will never show you any ledgers or balance sheets regarding anything else…because that would reveal the fraud. That’s why Fannie/Freddie will not open their books.


  8. Neil, do you mean that the loan has been sold to multiple investors and that they each believe they own it or that it has been sold and re-sold multiple times so that it’s hard to know who still owns it? The first would be illegal, akin to selling the same artifact to multiple people. The other is just accounting. Has anyone actually received an accounting in discovery?


  9. @BSE

    Exactly. It’s a no-win situation for the homeowner—and they know it.

    “…DeMarco has held the line because he cares more about the principle — in this case, the supposedly sacred obligation of debt repayment — than about the societal consequences of too much principal. As I have written here before, DeMarco is a bleeding-cash conservative, an ideologue so keen on punishing those he views as morally derelict — people who can no longer pay their bills — that he is willing to squander taxpayer dollars toward ensuring that they suffer the ultimate penalty: relinquishing their homes…”


  10. BSE,

    Very accurate assessment of what’s going on in the BK Courts.


  11. Even in BK court the home owner will get beat up. Every one else wins. The home owner may strip the second and still be under water on the first and never recover. Still it takes 5 yrs to dissolve the second. In the mean time, payments go to the trustee. In the end, it may still be best to walk away and save the BK payment. There are few tools to help home owners in this situation. The banks and government know, it is a loosing deal for the home owner. Both want and will continue to kick families to the curb. .


  12. If you want to understand more lies of Fannie Mae see simplifications of Fannie Mae I wrote.

    They are stealing more homes with little oversight. They should be a target of lawsuits.


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