Robo-Signing Leads To Negative Equity, Among Other Problems
Just when you thought that you had a handle on the scope of the problems presented by 2010’s robo-signer debacle and subsequent ForeclosureGate, turns out that the paperwork fiasco is also contributing to the growth of negative equity around the country[1]. According to a report from Zillow, “Accelerating home value declines, as well as a slowdown in the nation’s foreclosure rate following the late-2010 robo-signing controversy, contributed to an increase in negative equity.” Basically, when foreclosure delays started to pile up, more and more borrowers went “underwater” instead of ending up in foreclosure. Since the entire process stalled, those homes were not liquidated during the foreclosure process and the negative equity nationwide piled up. Should foreclosures start to increase in 2011, then this may cause negative equity to fall.
However, according to recent reports on January numbers, fewer homes in the United States entered the foreclosure process in January than at any time in the past three years[2]. Additionally, scheduled foreclosure auctions have hit a two-year low. Do you think that the extension of the foreclosure process – deliberate or otherwise – is a good thing for homeowners in the long run? How about for the housing market?
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[1] http://www.dsnews.com/articles/dip-in-home-values-and-robo-signing-pushes-more-borrowers-underwater-2011-02-10
[2] http://www.businessweek.com/ap/financialnews/D9L9NE9O0.htm
1) The only way for housing, and the economy, to rebound or recover is for the fraud to be rooted out and for those responsible to be held accountable (read that as prosecuted, and if guilty, to be convicted and punished accordingly).
2) Because courts have consistently denied due process to homeowners, both procedural and substantive, applied the rules of procedure and the rules of evidence inequitably, and ruled in conflict with the facts and law, the only way I can envision addressing #1 in a substantive and meaningful way is for the entire process to slow down, or be slowed down, so that the awareness and behavior of the courts can catch up with the facts.
I am aware, through 3 years of intensive research, that the robo-signing, robo-forging and robo-perjuring are far from the only bad deeds and fraud involved in this mortgage mess.
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