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It's rather that banks foreclosed on houses that weren't in default for long enough to warrant forclosure. And that they skipped due process and didn't actually
by rrcaptain 9y ago
It's rather that banks foreclosed on houses that weren't in default for long enough to warrant forclosure. And that they skipped due process and didn't actually make sure they were properly forclosing.
There's the famous John Oliver sketch regarding a bank that tried to forclose on a house that didn't even have a mortgage. And then when the people tried to collect their legal fees, the bank wouldn't pay, leading them to foreclose on the bank.
In addition, many of the mortgages that were issued should never have been done so. They deliberately and knowingly issued mortgages that they knew were far more risky than they actually were.
- Ntrails 9y ago105% mortgages were given out on homes that hadn't finished being built with no money down. The lending was idiotic - but so was the borrowing. There's a distinct implication that banks are entirely responsible for managing credit risk from repayment risk. That's explicitly false _and the whole point of backing the loan with assets_. Take away the right to foreclose and the banks will simply stop lending to basically everyone except those who can trivially afford the repayments. I'd be surprised if the rate of genuinely illegal foreclosures was > 5%, maybe I'm wrong on that. In essence though I can't help but wonder when people will take responsibility for what they borrowed.