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Can Cities Create "Foreclosure Sanctuaries?" [Housing Tracker]

by: SA Editor Judy Weil July 24, 2008 | about stocks: BAC    
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Foreclosure Data 

City Sues Bank To Stop Foreclosures. “San Diego’s city attorney has filed a lawsuit against Bank of America (BAC) and its Countrywide unit to prevent the mortgage lenders from foreclosing on homes in the city, which he aims to make a "foreclosure sanctuary." City Attorney Michael Aguirre plans to file similar lawsuits against Washington Mutual, Wells Fargo and Wachovia in an effort to make the lenders negotiate with mortgage borrowers facing foreclosure… So far this year, 20,000 homes in San Diego County, with a population of 2.9 million, have been lost to foreclosure as borrowers fail to keep up with mortgage payments and some analysts forecast the number may rise to 40,000 by the end of the year.” (News.com.au, July 24th)

House OKs Rescue for Homeowners, Freddie, Fannie. “Rescue legislation sailed through the House on Wednesday aimed at helping 400,000 strapped homeowners avoid foreclosure and preventing the collapse of troubled mortgage companies Fannie Mae and Freddie Mac. The 272-152 vote reflected a congressional push to send election-year help to struggling borrowers and to reassure jittery financial markets about the health of two pillars of the mortgage market. Hours before the vote, President Bush dropped his opposition to the measure, which now is on track to pass the Senate and become law within days.”  (AP via Big Builder Online, July 23rd)

SE Valley Sweats Out Foreclosures. Arizona: “During June, 40% of Mesa's recorded home sales were foreclosures, 27% of Chandler's were foreclosures and 20% of Tempe's were foreclosures, said Jay Butler, director of real estate studies at Arizona State University… Butler said that the reasons for houses going into foreclosure appear to be changing: "My big concern is we're getting change from the investor-driven to properties that were owner occupied because of job losses and other factors. No one sees a quick turnaround from the economic issues that the Phoenix area has been having." He said the Arizona economy has lost 26,000 jobs on a year-to-year comparison basis.”  (AZ Central, July 22nd)

 

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This article has 10 comments:

  •  
    Jul 24 08:42 AM
    What are we becoming? Sanctuary Citites for foreclosure, payoffs to everyone who is a victim of a natural disaster, payments to victims of terrorist actions, bailouts of people who purchased homes they could not afford. What are we really doing here?

    Whatever happened to the nation our Fathers & I grew up in where you were responsible for yourself and individuals helped their neighbors when they needed it. Have you ever heard of the need for government assistance in an Amish Community? No, they take care of each other without Government intervention.

    If we continue down this path we are doomed to become the next former super power in the History books. Every day I read about the bailouts. I hear people screaming that if you eliminate 100% financing no one will ever own a home. We are a nation of debtors and we are about to file the biggest bankruptcy case in the history of the World and the people running to become the leader of this nation are the weakest and least prepared yet. Where do we go from here?
    Reply
  •  
    Jul 24 10:45 AM
    Not doomed TCornelison, more like what Great Britain went through after WWII. The new economic anchor for awhile will be Russia and the GCC and other oil producing states hostile to the USA. We will wind up having to focus much effort in rebuilding global confidence in our financial system, four to five years of purging in Washington and corporate management. We'll survive. Live in faith, not in fear. Help your neighbors out and expose the selfishness and hypocricy in Washington.
    Reply
  •  
    Jul 24 10:46 AM
    The way forward for San Diego is to buy all the properties in default, then lease them back to their current occupants along with an option to buy at the short sale price good for as long as they live there. This can be paid for with block grants to cities from the Treasury, which in turn will borrow the money abroad for periods of 7 to 30 years. As someone with 31% of his portfolio in short positions on the back side of the Treasuries curve, I think this would be an outstanding way to keep hardworking American families in their homes. Another good financing option would be for the Fed to reduce interest rates further and open the discount window to cities using the money to prevent foreclosure. They could buy the loans from the banks, put them on indefinite forebearance, then borrow against them at the Fed window to repeat the process. As someone with 29% of his portfolio in gold and silver, I am convinced that this dramatic step is essential to the stabilisation of our housing market and the protection of both the banking system and the ordinary American working man and woman and should be implemented as soon as possible.

    Discipline and hard work are unpopular and unpopular things are not done in leaderless political democracies. We will not soon, if ever, return to our founding principles. Instead we will have one bailout after another. The way to profit from this is to make aggressive naked bets against American strength, as shown above, then during a lull between a round of debilitating regulation and the next round of stifling oppression, convert your winnings to gold, put it in a backpack, and GTFO of Dodge.
    Reply
  •  
    Jul 24 12:09 PM
    Unfortunately for the "lefties", a contract is a contract. Only to Clinton is there a question of what is, is. The simple answer to the question asked is NO. These lawsuits are merely another waste of taxpayers money and more boondoggles for the shysters that call themselves "lawyers"
    Reply
  •  
    Jul 24 12:18 PM
    Michael Aguirre is a joke, this is another attempt by him to garner press and try to bolster his campaign for re-election. If we re-elect him in November, we're fools.
    Reply
  •  
    Jul 24 12:55 PM
    As sharksm and gwinner have indicated, this is nothing more than a publicity stunt to garner support for Aquirre and a frivolous lawsuit doomed to be tossed out of court. In many if not all of the contracts the signatory was dishonest, knowing full well he/she did not have the resources to fulfill the terms. The judge, liberal or conservative, has no choice in the matter, as the law is the law. Failure to uphold the law will result in a reversal by the appellate level of the court and the judge could face removal from the bench.
    Reply
  •  
    Jul 24 01:45 PM
    This is all very troubling stuff and I think it puts the financial industry
    in an even more precarious position.

    We really have nanny state government at both local and federal levels. In the long run I don't think this is going to end well.
    Reply
  •  
    Jul 24 02:38 PM
    To: bearfund and iThinkBig: God love yas! Nice posts!

    To:unimpressedpragmati... The judge "has no choice". Don't be a FOOL, fool! You only have to look at the recent gay marriage law in SF, to see how the judges "have no choice". To refresh your memory, the people of SF (that LIBERAL town) voted 71%-29% AGAINST the legalization of same sex marriages, and the judges said: No, its not the people's way, its OUR way! So, in SF the people don't govern, its the judges who make the rules! Wise up!
    Reply
  •  
    Jul 24 05:06 PM
    bearfund - great idea except SD is a couple billion dollars in debt and are close to filing bankruptcy if they haven't already.
    And I'm sure there won't be too many lenders willing to lend anything if their collateral will be held captive by the gov't.
    Reply
  •  
    Jul 25 01:04 AM
    Folks, stop asking questions about what's happening here and go listen to Ron Paul if you want answers. Sorry if he's telling the truth about our money, our banking system and the hard time ahead of us no matter who we elect from the demogops. Sorry if you don't think he "looks" presidential or has a "presidential sounding" voice. The USA needs to get over its love affair with the fascade and start caring more about substance. If you are a patriot you will get behind Ron Paul and help him throw the bums out. You will demand that we return to hard, honest money and eliminate the federal reserve and get rid of fractional reserve banking.

    If you aren't smart enough to do any of the above then please just keep quiet because you just sound like everyone else who is asking for a fix without even caring what the real problem is. The REAL problem is spoilt Americans who think they are the center of the universe and entitled to "something for nothing" 24/7. And this is a fellow American telling you this. Write your congressmen. Tell them to stop selling the USA down the river. Organize yourselves and vote out all the incumbants. Educate yourself and stop hoping for a quick fix to a problem that Ron Paul has warned you was coming for 30 years. One final thing: Lenin said "Fascism is capitalism in decline". Look around at the police state forming and PUSH BACK through every nonviolent means possible (Martin Luther had it RIGHT). Get a clue, and fast, before it's too late for this once great country.
    Reply
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