No matter where you live in OH-10, you have had it happen. A neighbor loses their job (GM, NCR, Iams, the list goes on) or a family member gets a terminal disease, or gas prices go up to $4 a gallon and begin the slow process toward foreclosure.
The banks refuse to renegotiate the loan, lower interest rates or even rent the house back to the former “owners”- they file paperwork (sometimes with a robo-signer) and ask the government to do their collections (I can’t get the sheriff to collect for me).
The homes in nicer neighborhoods (like Mike Turner’s gated community) are carefully maintained and secured. Ones in my neighborhood- are vacated and left in limbo as the looters or the speculators do their thing and the house loses value faster than my kids eat ice cream.
Because we’ve allowed loans to be sold off and traded like commodities- our communities are at the mercy of the Wall Street Casino. My loan has been sold off more times than I care to count: US Bank to GreenPoint to CountryWide to Bank of America to IBM to SETERUS where they now are trying to claim that I owe them for insurance that they bought on their own without checking with me [1] at a rate of at least 3x what my policy cost.
Foreclosure affects us if we want to sell our homes- dropping the comps that are “necessary” for the banks to lend. They have also made it a great opportunity for real estate speculators who buy and flip homes- often without doing any improvements thanks to inside connections to the banks and access to capital.
It’s time to change the discussion of who is to blame for the mess- to what are we going to do about it. The banks haven’t done a fraction of the refinances that they were told to do by Congress through the “Making Home Affordable” program. Often times after the banks kick the people out- they turn them over to a subsidiary and write off the loan, hoping to show a profit when the subsidiary flips it. It’s time to stop the madness.
Here’s my first campaign spot: Foreclosure
Once people leave, entropy sets in and the value begins to drop. Let’s make the banks think twice before they uproot our neighbors, forcing them to either rent back the property- or maintain it in the same condition as when they kicked the people out.
That way, the bank shares the pain with you, instead of foisting the burden off on you.
If you like this video- and want to see a voice in Congress that isn’t being subsidized by the banking industry, please consider donating to my campaign using the widget on the right or going to www.electesrati.com [2] and making a donation.
I want to be the candidate of the Democratic party to take on Mike Turner in OH-10. I believe my skills, both as a special operations soldier, a small business owner, a blogger and community activist and last but not least, an advertising pro, can make me the best choice to face the incredible money-raising skills of our current corporately owned congressman,
Well done, David!!!!! Yours is the voice that needs to be heard. Where are all the bigger donors who could put you over the top in this struggling economy? Maybe the people who care are kept too busy just trying to survive to do much else. Surely though, there are some in Dayton who can afford to plump up your campaign and, by doing so, give a gift to the whole community!
Awesomeness!!! I love it! Well done ;-)
@Marianne- thank you. @EBSanchez- thank you for the donation! Every donation helps. Please tell as many people as possible about the campaign and ask them to donate what they can.
Thank you.
Hey Dave…the recurring payment was tricky! lol – any clarification and i’ll sign up ;-)
I think you’re on to something here David.
David-
You nailed it. I’d love to see banks maintain those homes in the same condition. Sometimes that is still distressed, but there is no reason for it to get worse. And from where I sit (Realtor) I have to say that certain neighborhoods appear to get more attn from banks than other neighborhoods. What I would love is to see the banks quit determining which neighborhoods are worthy of attention, and which should be allowed to deteriorate, allegedly. Anyway.
You would have your work cut out for you here, God bless you, as banks fund campaigns. Pull that out of the equation first, would you?
@Teri- I’m not taking money from PACs, Special Interest Groups or Corporations- and esp. not banks. Yes, I’m well aware of how much potential money that cuts me off from.
I have to make up for it with Substance over style- and count on people like you to spread the word and donate what you can.
The Dayton Daily News had a front page story about a lull in foreclosures last year (mostly due to legal review of robosigning) and we’re still in for a ton more. http://www.daytondailynews.com/news/dayton-news/area-foreclosures-down-but-may-climb-in-2012-1311635.html
This is what I call “Hood Robbin” where the value of the neighborhood is robbed by the banks who let their properties drain the value out of all the homes thanks to our lame system of comps and appraisals. We need to start working to restore sanity and stop kicking people out- or, hold the banks accountable- one or the other. We can’t have these homes stripped bare of value after they’ve already been written off.
“Often times after the banks kick people out-they turn them over to a subsidiary and write off the loan, hoping to show a profit when a subsidiary flips it.”
Today, what incentive is there for the banks to secure and maintain the loan collateral when 96.5% of the home loans(WSJ April 30, 2010 in this country are guaranteed by federal government entities? What is there for banks to write off when Fannie, Fredddie and the FHA make them whole once they have foreclosed?
One could make the case that the government is a part of the problem. Lenders bid the principal and delinquent inerest at Sheriff’s auction to insure they will receive government insurance guarantees. These bids are generally greater than the appraised value of the Sheriff. This eliminates investors and owner occupiers (free market) from purchasing and maintaining these properties
as they sell to the plantiff above market value. The governmental entity or bank, on behalf of the entity, then lists the property for sale at a price that would have brought a free market buyer at the auction. This practice creates months of additional vacancy and neglect.
In addition, many borrowers walk away from their property prior to foreclosure. Property neglect may begin before the lender has taken title.
@Bobby I think one solution is to only allow the original loan issuer have the right to evict. Any others- bought the note and should be taking the risk- of course, we can’t implement it retroactively. We could also ban the owner of the note from buying it back if they kick the tenants out. Solves part of the problem.
Excellent. Dave, you hit it right out of the park…Damn…
“only allow the original loan issuer have the right to evict”
This would reduce liquidity, and require a greater risk premium (assuming the note is not guaranteed by the government) that would translate into significantly higher mortgage interest rates. Higher interest rates would depress the housing market even more. Fixed rate mortgages would become history.
“ban the owner of the note from buying it back if they kick the tenants out”
Banks will not be anxious to make a loan secured by real estate, have the borrower quit making payments for months or years, then be forced to rent to these same people. Is this based on the assumption that the thousands saved by not paying their mortgage will enable borrowers to pay rent?
You may want to rethink these solutions.
@Bobby- since when was the loan not to be secured by the real estate? Isn’t that the fundamental problem?
If you had to only make the banking business based on real market values- we wouldn’t have had the inflation in home values based on the ability to churn paper. It’s time to have real value.
They don’t have to rent to the people they kick out- they do have to keep the property in the same condition. The best way to do that is to have tenants.
These solutions are based on sound business practices that used to be the SOP when banks couldn’t operate across state lines, couldn’t be in the securities markets and bankers didn’t make millions or billions a year off of paper trading.
A bank president making $250K a year used to be considered a wealthy man and a pillar of the community- now, he’s a mid-level “vice president” of nothing. Wake up.
The next time you go look at raggedy properties in your area, I would like to come tour, Lynn