from the times, this story is about banks refusing to assume control of foreclosed properties. apparently, the cost of upkeep and repair is greater than the value of a large (but unspecified) number of homes. is this good or bad? on the one hand, the former owners now have outright control. from a moral point of view, that's a more palatable situation than half of american houses going on citi and bank of america's books. on the other hand, the reason for the foreclosures was, ostensibly, the insolvency of the individuals involved. handing the property over to them leaves them with cost of maintenance. the article mentions that some municipal authorities are bulldozing unforeclosed (is that even a word?) houses because of the disrepair into which they've fallen. the mortgager is also technically liable for mortgage payments. because of the difficulty in locating the actual owner of the mortgage--who knows how many times each deed has been packaged and resold?--however, there isn't anyone to make the mortgage payments to, even if it was possible to make those payments in the first place. honestly, this whole mess is just plain bizarre. we can't even establish property ownership anymore? does that, uh, mean that we're communists?
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I know in one of the many alphabet soup Geithner programs there was some attempt to systematically renegotiate mortgage rates for a lot of these loans. I don't know how far reaching or dramatic it was, but whatever the details, that particular piece of bureaucratic machinery couldn't get its cogs turning quick enough. Shit is fucked up.
ReplyDeleteThis American Life was talking a little about this problem, where the mortgager disappears but the bank refuses to foreclose. However, they were talking about it in the context of property owners stiffing their tenants - apparently the tenants can't get anyone to do maintenance because after the landlords flee the banks don't want to take over the property and the people still living there are trapped in a weird legal dead zone until someone actually claims control of the building. That's fucked up man.
ReplyDeleteThats really interesting. I read a little recently about squatters rights. It seems like your example dave would be a perfect situation in which to allow the tenants to take over the building themselves (not that they necessarily want to).
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