Foreclosure Watch: California Defaults Redline*

*This chart gives "redline" a whole new meaning.

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Comments

[Dan Underhill]

I read somewhere that during the last great depression citizens would come en masse and prevent evictions from happening. I might be ready join such a movement. This video on the subject is interesting.

http://www.brasschecktv.com/page/550.html

[Scotty]

A more appropriate analogy would be someone asking you to install some kind of gold-plated kitchen that they couldn't afford, Mr. Underhill. It's not really your job to determine where and how someone spends their money, just as it's not a realtor's job to tell someone how much to spend on a house. We live in a society where each individual has the freedom to determine where to waste their money, thank goodness -- at least until people like yourself are able to give the nanny state more control of our free will.

[Lionel Emde]

"Maybe you should clarify again that a notice of default is not a forclosure. These numbers do not match the numbers of actual foreclosures."

Sue, that's true, but the most recent figures for San Mateo County indicate that about 80% of default notices resulted in foreclosures.
We have fewer foreclosures than other Bay Area counties but it's still a stunning number.

[Dan Underhill]

"Signing up for a mortgage that you cannot afford is not "being conned". It's being just as greedy as the other players in this spectacle about which you are complaining." Says Scotty.

So, if I, as a plumbing contractor, when proposing to change out a plumbing fixture, include in my offer products that I know will fall apart as soon as their check clears, I am under no obligation to mention that it is a bad choice and will cause them to have to have the same job done over again soon?
The fact that they have no experience with plumbing fixtures and choose a bad one is their own fault?

[Scotty]

Signing up for a mortgage that you cannot afford is not "being conned". It's being just as greedy as the other players in this spectacle about which you are complaining.

[Dan Underhill]

What deregulation is about is to insure that honest businesspeople don't have any undue advantage over con artists and shysters. It has worked very well to that end. Also I'm sure you know that it has been proven often throughout history that reading and believing yourself to understand a contract is no guarantee that you aren't being conned. The stock market should be about financing business and betting on outcomes should be relegated to casinos.

[Scotty]

You're right, Dan. People who admittedly sign contracts that they don't understand should be protected from themselves. At a minimum, they should be made to wear helmets at all times and should have little corks placed on the tines of their forks so they don't hurt themselves.

I'm sorry that some people don't understand what a contract is, or that they need to read it, or that they should hire an attorney to explain it to them if they can't understand it. That doesn't excuse them from their responsibilities, though.

[Dan Underhill]

Excuse me Scotty but there are certain areas where the vast majority of citizens are necessarily reliant on the expert professionals they are doing business with and on the government regulation of said professionals. Mortgage agreements are one good example of this as they are often the size of novels and written in language that those of us without a law degree are unlikely to truly understand. The Let-The-Buyer-Be Damned deregulation that started in the Reagan Era and hasn't stopped yet is an important part of the problem. I think that the primary problem is that we keep kidding ourselves that American style capitalism can possibly work. What we have is an unnatural "socialism" for the benefit of wealthy individuals and corporations wherein some kind of scam, be it the S&L debacle, or the dot-com boom and bust or this m0ortgage crisis. The perpetrators get out in time or amazingly get bailed out by the taxpayers they are foreclosing upon. Our system is actually socialism but only for the rich. What the working class in other socialist countries get, universal health care, well funded education etc. are things that the rich don't need so those of us who suggest such things are quite out of step. Since corporations were declares "natural persons" under the Fourteenth Amendment our government has become a tool in their hands and unless we, the human population, take the country back the United States of America is all over and we might just as well pledge our allegiance to Monsanto, and Bechtel, and Colgate, and Halliburton, and etc.
Yes, Those home buyers should have seen this coming.
Yes, we should all be more savvy than we are. J. Krishnamurti points out that "should" is a totally unnecessary word as what "should be" is yet another way of saying something "isn't" happening.

[Scotty]

To take the tired bubble analogy even further, who do you think inflated that bubble? It was people irresponsibly betting that their housing prices would forever increase. I'm not saying that the mortgage, real estate, and financial industries didn't contribute tremendously to the problem, but I think we should recognize that personal responsibility enters into the mix at some point too.

[Frank Siciliano]

A residential housing bubble isn't a sustainable economy. It's a bubble, and they have a tendency to inflate quickly and then pop even more quickly. When the dot-com bubble burst, it got replaced with a much larger housing bubble. Still no good.

Blame is correctly affixed to those who perpetuated the bubble-- which in this case means the Republican administration, the Fed, and , yes, the real estate sales, development, and mortgage brokerage industries.

[Scotty]

I suppose that it's comforting during stressful times to attribute all our ills to some kind of "boogey man", and for a certain population of Pacificans, I guess the knee-jerk reaction is always to point at business and development. This is simplistic thinking, though. There is plenty of blame to go around, and people who took out ridiculous loans that they could not afford deserve their share.

PS -- How did Greenspan get rich on this again?

[Summer Rhodes]

Let's pay close attention to what caused this:

1) easy credit: the past Federal Reserve Chairman, Alan Greenspan, lowered lending rates many times.

2) lack of due diligence: credit rating agencies, brokers did not do due diligence on 'buyers' ability to pay.

3) law was changed so that it was not required to qualify individuals for a house loan: anyone can 'buy'!

A total recipe for disaster, and who suffered no real ill effects? Those who got personally rich(er) from this: brokers, agencies, the fed chairman (who should have known a lot better, given his intellect, education and training.)

[Sue Vaterlaus]

Maybe you should clarify again that a notice of default is not a forclosure. These numbers do not match the numbers of actual foreclosures.