Foreclosures Moving Like Frozen Molasses
Numbers that make you go “wow” (via the NYT: Backlog of Cases Gives a Reprieve on Foreclosures):
In New York State, it would take lenders 62 years at their current pace, the longest time frame in the nation, to repossess the 213,000 houses now in severe default or foreclosure, according to calculations by LPS Applied Analytics, a prominent real estate data firm.
Clearing the pipeline in New Jersey, which like New York handles foreclosures through the courts, would take 49 years. In Florida, Massachusetts and Illinois, it would take a decade.
In the 27 states where the courts play no role in foreclosures, the pace is much more brisk — three years in California, two years in Nevada and Colorado — but the dynamic is the same: the foreclosure system is bogged down by the volume of cases, borrowers are fighting to keep their houses and many lenders seem to be in no hurry to add repossessed houses to their books.
The irony is that had stimulus been offered to debtors rather than creditors, not only would we have gotten a lot more bang for the buck, we would have avoided most of this foreclosure mess
Yes, but the banks would have lost even more money than they are losing on this boondoggle because they wouldn’t have gotten the skazillion buck of “too big to fail” money. Try to stay focused: rich bankers, good–poor homeowners, bad.
Real estate values have dropped $6 trillion since the bubble popped.
Stimulus wasn’t pointed at that, and even if it had been, it would not have been enough to fill the hole.
Bank bailout money wasn’t pointed at it, exactly, either. But again, it was much less than $6 trillion.
The foreclosure mess is a result of the house-price mania that preceded it. THAT is what made the $6 trillion dollar hole in the first place.