- Prison Planet.com - http://www.prisonplanet.com -
Mortgage Settlement Will Plunge Real Estate Values
Posted By admin On February 13, 2012 @ 4:25 am In Money Watch | Comments Disabled
USA Watchdog 
February 13, 2012
It is official. State and federal governments have condoned forgery, perjury and fraud in what’s been called the “robo-signing” foreclosure debacle. Last week, the five biggest banks in America signed on to a $26 billion deal that, basically, lets them off with a slap on the wrist for fraudulently foreclosing on homes in the last few years. I am not going to go on and on about how unfair and unjust this deal was or how the rule of law has been thrown down the stairs. I am going to focus on the fallout of this morally corrupt deal.
There is $700 billion in negative home equity with nearly half (11 million) of all houses underwater. Meaning, more is owed on the mortgage than the home is worth. This settlement may help a few folks, but it is a drop in an ocean of debt. Now that the deal is done, look for the pace of foreclosures to pick up speed and home values to take another cliff dive. If you thought the negative equity problem was at the bottom–forget it. The plunge in real estate prices is far from over, and it’s not going to turn positive anytime soon. Consider the latest Case-Shiller report where year-over-year declines in home values averaged 3.7% nationwide. This is despite 30-year mortgage rates at or below 4% and a big slowdown in foreclosures because federal and state governments were negotiating a deal for the past 16 months.
Banks are desperate for cash, and they are going to unlock all they can as fast as they can. After all, people can’t live in a house forever without paying. The banks are not going to enter a new age of morality when they just got a “get out of jail free” card from prosecutors. Rolling Stone’s Matt Taibbi wrote last week, “The only acceptable foreclosure deal had to bring about a complete end to robosigning and the other similar corrupt practices that grew up around it (like for instance gutter service, the practice of process servers simply signing affidavits saying they delivered summonses, instead of really doing it). But this deal not only doesn’t end robosigning, it officially makes getting caught for it inexpensive.” (Click here for the complete Taibbi post.) 
Article printed from Prison Planet.com: http://www.prisonplanet.com
URL to article: http://www.prisonplanet.com/mortgage-settlement-will-plunge-real-estate-values.html
URLs in this post:
 USA Watchdog: http://usawatchdog.com/mortgage-settlement-will-plunge-real-estate-values/
 Case-Shiller report : http://www.standardandpoors.com/spf/docs/case-shiller/CSHomePrice_Release_013118.pdf
 (Click here for the complete Taibbi post.): http://www.rollingstone.com/politics/blogs/taibblog/why-the-foreclosure-deal-may-not-be-so-hot-after-all-20120209
 Mortgage Settlement Is Just Another Stealth Bank Bailout: http://www.prisonplanet.com/mortgage-settlement-is-just-another-stealth-bank-bailout.html
 Don’t Buy A House In 2011 Before You Read These 20 Wacky Statistics About The U.S. Real Estate Crisis: http://www.prisonplanet.com/don%e2%80%99t-buy-a-house-in-2011-before-you-read-these-20-wacky-statistics-about-the-u-s-real-estate-crisis.html
 Goldman Real Estate Fund Lost 98 Cents on the Dollar: http://www.prisonplanet.com/goldman-real-estate-fund-lost-98-cents-on-the-dollar.html
 The Coming U.S. Real Estate Crash: http://www.prisonplanet.com/the-coming-u-s-real-estate-crash.html
 Home values to lose well over $2 trillion during 2008: Zillow: http://www.prisonplanet.com/home-values-to-lose-well-over-2-trillion-during-2008-zillow.html
Copyright © 2013 PrisonPlanet.com. All rights reserved.