> I don't get this whole foreclosure brouhaha. Shouldn't these deadbeats be foreclosed on anyway?

wrote:

Seems like they are just getting off on a technicality.

It's kind of a grey area.
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wrote:

Seems like they are just getting off on a technicality.

First sane response

Basically, you have a couple things in play here.

First is that Americans have have property rights. That means that the bank has to go through a certain procedure to foreclose on your house and evict you, even though they are they title holder.

When you look at some of the frightening property nightmares that happen in other countries, you can see why this is a good thing.


But beyond that, the lender has mortgage insurance. If you stop paying, it's more profitable to them to just let the house sit there for a year or more until the insurance runs out, THEN resell it. This is why people frequently get to stay in foreclosed homes.

Second, there is a debt collection process that must be followed. If a collector can't prove that you owe them the money, they can't collect it. And in cases where your mortgage has been sold and bundled many times over until you're just a number in thousands, it can be impossible.


Third, I have no sympathy for dumbasses who believed they could get a $500K house on a $20K salary for no money down no doc ARM.


However, a lot of people who were trying to honestly live within their means were sold loans that they THOUGHT were what they needed, only to find out later that they had been duped.


I bought a home just before the boom, and already they were trying to offer interest only loans and all that bullshyt, Plying us with thousands in upgrades if we took anything but a straight loan. We refused. It's very easy to get confused when you're dealing with such a huge purchase, and the lenders refusal to modify has only made it worse.