Wednesday, September 13, 2006

Fed Bailouts and Modern Financial Slavery

And so it begins: this saga started as early as 2002! Can you imagine how bad it is going to get moving forward? Foreclosures are increasing at an alarming rate as I write.
Antonio and Kathlene Mareno obtained a home mortgage from Dime Savings Bank. The terms of the mortgage required them to pay their property taxes directly to the local tax collector. However, if they failed to do so, the mortgage allowed the lender to pay the property taxes, add the property tax amount to the mortgage balance, and adjust the monthly mortgage payment.

The borrowers allegedly failed to pay their property taxes for 2002 and 2003. As a result, Dime Savings paid the property taxes and increased the monthly mortgage payment from $754 to $1,268. The Marenos made one payment of $754 after the increase and then stopped making any mortgage payments.

In 2004, Dime Savings filed a complaint against the Marenos to foreclose on the mortgage. The state court then granted a summary judgment allowing the foreclosure.

Then in November 2005 the Marenos sued Dime Savings in U.S. District Court, alleging the state trial court's handling of their case violated their federal due-process rights. Dime Savings argued the foreclosure issue was already decided in the state court and the homeowners don't have a right to litigate the same issue again in federal court.

The Marenos already had their right to litigate and appeal the foreclosure judgment in state courts, the judge ruled. They failed to prove a federal denial of due-process claim, so this case is dismissed for lack of jurisdiction, and the foreclosure may proceed, the judge concluded.
The Marenos are basically looking to get bailed out by the Federal government after failing with the State government. This sad story is going to be repeated over and over again in the coming months and years, only made worse by the new bankruptcy laws. Welcome to financial slavery and serfdom thanks to the housing bubble.

Can there really still be people seriously thinking about buying at the top of this bubble market?

6 Comments:

Anonymous ncbb said...

Yes there are still buyers. I failed to talk a friend out of buying a new house. He felt it was a killer deal,The builder is paying 80% of his mortgage the first year. He also cited sentimental reasons. :(

Sep 13, 2006, 6:20:00 PM  
Anonymous Anonymous said...

I second that, I have a friend with a new family, who moved to So. Cal from Canada, and is in the process of looking. Whether they buy is another story though, because they are pretty sharp people, and I think they are starting to see some of the signs.

Note to self, tell friend about these web sites... EOM

Sep 14, 2006, 12:46:00 AM  
Anonymous BHT said...

I have a friend who just bought an MV POS for 899,000.
1000 sq. feet and massive problems.
She is convinced it will make her rich.
She bought with zero down and doesn't have much put aside for retirement and safety.
I tried and tried to tell her, but her agent said I was crazy.
How long will it take for rational thought to prevail?
Isn't there any good educational resource to help people?
I'm pretty angry at the RE agents and mortgage brokers who are so uncaring and greedy.
This is one case where they really teamed up and put her into massive debt with a promise of riches to come.

To quote Peter Finch, "I'm mad as hell and I'm not going to take it anymore!"

Maybe we should put their feet to the fire.

They are f**king with our communities, our families and our chance to live within reasonable means.
All for the love of the dollar.

Don't they have to answer to anyone?

Is anybody else upset about this?

What can we do?

Sep 14, 2006, 12:50:00 AM  
Anonymous tom stone said...

speaking as someone in the business,it is hard to find good information,and you are not encouraged to question the party line.you bet there are rules and regulations,many volumes of them.they are not enforced.as you may have noticed, the rule of law is held in contempt by many who are sworn to defend it...there is plenty of blame to spread around,but the bottom line is if you do not do due diligence you will get burned.(really,i promise,it's only a cold sore)

Sep 14, 2006, 3:05:00 PM  
Anonymous Anonymous said...

Yes. i'm upset too.

watch the Senate hearings. keep on top of that.

Next week they'll be hearings on lending.

make sure that legislators don't try to prop te bubble thru any means (extending toxic mortgages, forcing interest rates low).

This crash has to be allowed to proceed in typical free market fashion. The longer the bubble lasts, the more people will get hurt.

Sep 14, 2006, 9:22:00 PM  
Blogger B. Durbin said...

I helped a friend move into her new house last week, but the caveats are that a) she plans to live there for the forseeable future, possibly "thirty years or longer" and b) she's run the numbers and she can afford it. If it were anyone else I'd be worried, but as she said, "This place is perfect and it's available now." (It's also a mobile home on property that SHE bought, so it's actually at an affordable level.)

Of course, if everybody did this there would be no bubble.

Sep 16, 2006, 2:31:00 PM  

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