Friday, October 15, 2010

Two brief thoughts on the foreclosure mess

My response to this money quote from a piece in the NY Observer worthy of reading in its entirety:

"The problem is they don't deserve to be in that place. They probably deserve to be there less than they used to," the source continued, referring to incomes lower now than they'd been when the loans were made in the first place. "You do need to foreclose, and you need to go back to people living in houses that are consistent with their income levels."
 - Dontcha love how responsibility is allocated here, without even a second thought of any joint culpability for those who made the loans and those who made the loans possible?
 - That last bit, where the people should live in houses that are consistent with their income levels, might be easier to achieve than before: without a clean title to permit unproblematic future transfers or indeed any purchase with mortgage (because no bank will lend without title insurance, and title insurance are getting out of this mess as fast as they can) the house isn't worth very much at all - and pretty soon the market-clearing price of the homes going through foreclosure will be pretty well in line with the people who are currently living in them.

One other little parting thought: I would encourage those whose houses are going through this messy and lengthy process to stay in their homes until all legal options are exhausted. The amount of time it'll take to sort through the mess, you might just be able to establish a clean title by adverse possession. In Florida, that would be take a mere 7 years.

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