Experts: Foreclosures Have Hit Bottom, Let’s Bail Out the Borrowers
According to an article in The New York Times, foreclosures are near or at the bottom in the United States. Oh, just one thing: it’s a 1992 article. Some very interesting parallels between then and now:
“The foreclosures reflect the mortgage policy of the mid-80′s. They were allowed to liberally get large mortgages, but now the economic pressures for many, brought on by the recession—such as loss of jobs, loss of income—make it impossible for a lot of them to come up with their mortgage payments,” Roger H. Sirlin, a lawyer in Mamaroneck who represented the lenders in the foreclosures, told the Times.
Sound familiar?
“Many banks are now willing to avoid foreclosure,” he said, “by restructuring mortgages that had originated at a much higher interest rate and by attaching amounts in arrears to the end of the mortgage.” (So why can’t they do this now—attach the amount in arrears to the end of the mortgage? Or is that being done and I just haven’t read about it?)
‘Lenders are more than willing to work with delinquents,” Mr. Sirlin said, “because the last thing they want is to own residential real estate.” When possible, they favor work-outs, which means loans tailored to individual needs. It’s in the banks’ interest to help borrowers avoid foreclosure.
If this is the case, smart readers, why are so many of you indignant about such arrangements? Isn’t it better for the economy? Help me out here. (Photo: Mike Licht.)
