Friday, October 1, 2010
Foreclosures Slow as Document Flaws Emerge
Comments due for grade on 10/8/2010. What long-run economic repercussions are evident when mortgage companies and banks mishandle foreclosures? (Look at the big picture in this evaluation) Use cause and effect analysis.
Subscribe to:
Post Comments (Atom)
Mortgage companies and banks are handling foreclosures quickly and carelessly. As Thomas Cox said, "They tried to manufacture foreclosures the way you'd manufacture cars, on an assembly line". Families are beginning to figure out the problem and hiring lawyers to fix it. This leads to mortgage companies and banks being sued which ruins their reputations. Furthermore, mortgage companies and banks are fixing their mistakes due to the amount of complaints. Foreclosure actions have now been halted in 23 states. In addition, lending companies ,with no known problems, are being more careful now. This probably means that in the future, companies will be more careful and there will be less mistakes. Also, this means that the real estate could recover due to mortgage companies and lenders being more careful in the future.
ReplyDeleteThe long term repercussions of the mishandling of mortgages for the banks and mortgage companies are as large as they are subtle. When the banks mishandle mortgages they loose in the long run. With improperly filed or nonexistent paperwork they risk losing in a court battle against the homeowner (or the occupant of the home) because of technicalities. Thus the "freeloaders" if you will are living rent free, tieing up the property for liquidation by the bank or in other words consumption by people looking into purchasing homes. This weakens the state of the bank and gives more and more people who face foreclosure hope that they can fight and eventually win a foreclosure battle hurting the bank further. Also the more and more is broadcast by the banks mishandling of foreclosure proceedings has me an investor wondering, "if my bank cannot collect money effectively then how can i trust this bank to be fiscally responsible" thus further hurting the bank. Thus the effects of banks mishandling import and documents only hurts them in the long run. Zachary Lee
ReplyDeleteI don't really understand how someone could mishandle a foreclosure, if someone reneges on a mortgage contract and can't pay it, its simple as that. If they can't pay, they can't pay, theres no defense against that, its sad that your losing your home but again its all in the fine print. Its not like the lenders didn't write down that the consequence of not paying is losing your home. When it comes to hundreds of thousands of dollars of money, its caveat emptor. If the company lived up to its end of the deal and told the buyer the risks then it is the buyers fault. Its not like they gave them defective homes. If these people hired a lawyer or even a competent financial advisor before signing on the dotted line they wouldn't need to hire a defense lawyer now. The banks and lenders are also to blame but again, no one made these borrowers take the money. By making these banks wait longer to collect outstanding assets we only prolong this crisis.
ReplyDeleteBanks handle foreclosures very precariously. They sometimes arrive to a conclusion at such a rapid rate, that they don't even realize the harm they are doing against the homeowner,the property and themselves. Officials should mange the rate of foreclosures that the banks are approving, and set a regulation that suspends the banks from taking such swift actions and by forcing them to process the decision more rationally. By adhering to this method, homeowners and banks will have the ability to readily improve their individual conditions.
ReplyDeletewhen mortgage companies mishandle foreclosures it puts the owner in a precarious position, basically the banks might not realize that the person might be able to pay it off soon. and this makes the homeowner not only lose their home but possibly unfairly and it puts the whole family at a huge disadvantage. however, everything is written out, you just have to be very meticulous and read the fine print.
ReplyDeleteAs the grandson of a retired Broward County circuit judge, it is no surprise to me that these massive lending companies tried to cut corners to eliminate their backlog. What does surprise me is how long it took the legal system to catch on to them. My grandfather is currently an impromptu foreclosure judge who sees upward of thirty cases a day. He is, as the article so aptly phrases it, an "assembly line" (see article http://www.nytimes.com/2010/09/05/business/05house.html?ref=florida)
ReplyDeleteMishandeling a foreclosure may be about the worst thing I can think of for a bank to do to its business. Because of the nature of a foreclosure, where those in debt will lose their homes, it is more than purely a monetary issue and should thus be handled with care.
ReplyDeleteThis new issue with rushed foreclosures seems nothing more than an extenuation of the morgage crisis. The botched jobs on the foreclosure documents may only serve to bring further to light the corruption of the corporate banks to the eyes of the average American.
The long-run economic repercussions of mishandling foreclosures is ultimately a massive change mortgage handlers. Now that their shortcuts have been put out in the open, the common homeowner is watching them with a magnifying glass. They are starting to hire lawyers to protect their homes and the companies that have no known problems are having to become more careful to not step out of line.
ReplyDeleteThe mishandling of mortgages by banks can have severe reprecussions. Banks are now being sued over technical legalities. This in turn creates a great distrust in banks and tarnishes their reputation due to their carelessness.
ReplyDeleteThe precarious nature of the bank's handling of mortgages can siginificantly hurt families through the loss of their homes. Banks also lose some of their customers.
ReplyDeleteWhen companies mishandle forclosures, many problems arise and long term repercussions are visible. The companies reputation will be lowered and many families who are being forclosed will seek legal aid to determine whether their house were repossessed legally or illegally. Since these mishandling are published and people are aware of the company's action then this will cause people to be more careful in the future.
ReplyDeleteWhen banks mishandle foreclosures the long-run economic repercussions come back to them as well as homeowners. The banks are now distrusted and their every moved is being watched, and the homeowners now have a statement on their history that says their home was foreclosed on making anything related to money difficult for them to get.
ReplyDeleteThe failing at the root of most systems is corruption. When a corporation, ie a bank is so concerned with profit, they will be inclined to offer mortgages to anyone and everyone, even if they can not pay off such a mortgage. And when this system failed, as we saw with the bank bail-out a while back, the result to more corruption to cut corners and reposes these home to try to recoup their deserved losses.
ReplyDeleteAlso, as it mentioned in the article, the act of all banks doing this (skipping corners on foreclosures) floods the market will cheap housing, making the housing market unstable.
When banks mishandle foreclosures it does not only affect the families that live in those houses but it also backfires on the bank. Many banks loose customers and investors as their trust level declines with more and more secrets exposed. The number of bank related lawsuits also are increasing, and paperwork seems to "disappear." A bank reposes the home to try to regain their losses from lack of payment from the owner, however it also just adds an additional loss.
ReplyDeleteWhen banks mishandle their foreclosures it affects the banks and the homeowners themselves, the banks are put into a bad position. And the people then have trouble getting loans and getting a new place to live, which is one less person that the bank won't loan to.
ReplyDeleteWhen foreclosures are mishandled by banks it causes families to lose their homes and banks to be put in "the hot seat." Here they are questioned by the media and must account for their mistakes. There is no benefit for any party in this situation because both party's reputations are knocked down a level because the bank overlooked or cut a corner and the family has to uproot and find another place to live.
ReplyDeleteWhen mortgage companies and banks mishandle foreclosures, it leads to many banks losing trust from customers and also themselves losing money. Also, the long term effect of this problem would be that it makes the real estate market very unstable because houses are now being foreclosed in massive amounts which would lead to the decrease in the price of the homes.
ReplyDeleteObviously, the problem of mishandled foreclosures is a huge one. The repercussions affect the homeowners, the banks, and the overall economy in general. Banks are being seen as "bad guys" and will eventually lose the trust of the people. The homeowners are losing homes, sometimes unfairly. And the overall economy is being taken off balance because of the high numbers of foreclosured homes that are going on the market at minimal prices.
ReplyDeleteEveryone suffers when the mortgage companies and banks mishandle foreclosures. They are essentially being careless and not dedicating the necessary time for each foreclosure. Families that could have possibly raised enough money to prevent foreclosure were denied the opportunity. Banks and mortgaging companies now have a bad reputation which only hurts the economy because consumers don't have faith in these institutions.
ReplyDeleteEarly foreclosure caused many families to lose their houses and that was unfortunate because if given enough time, the families could have gathered enough money to pay the mortgages. Now those agencies are getting bad reputations and are facing many law suits. I'm surprised that it took this long for the legal system to catch these agencies.
ReplyDeleteThe obvious repercussion is more families are left without a home or credit rating, which brings down the economy. Families that could have paid and avoided foreclosure do not have that chance, and it has become so common that the legal system has so many cases that they become impersonal and not given the proper amount of time. People are losing trust in the court system and obviously banks. The lack of trust in banks leads to less people investing which doesn't help the economy in the least because there is no consumer trust.
ReplyDeleteBanks are handling the situation poorly, and as I see it, they're digging themselves into a ditch that keeps getting deeper.
Foreclosures is not something that should be looked upon lightly. Once done, it leaves a family without a home and with credit ruined. Rushing foreclosures for people who may have the chance to pay the money back if allotted just a little bit more time seems unjust. Also, with so many corners being cut, consumers will start to question the banks and lose trust in them. With no trust in the banks, our economy will surely suffer.
ReplyDelete