September 2019

Sun Mon Tue Wed Thu Fri Sat
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30          

« We've still got NASCAR | Main | Blackwatered »

Oct 25, 2007


Feed You can follow this conversation by subscribing to the comment feed for this post.

gabriel christou

please visit

you will see PHOTOS of WHO and WHERE Bin Laden and his NETWORKS ARE….



Hmm......the first comment has about as much credibility as the NYT's agenda journalism, and the blog owners well established POV.

What group of people benefit from this type of economic scare tactics in support of political agendas that need a recession soon to score political points?

You get three guesses, and the first two don't count.

For the record:

Is the sub-prime collapse a serious problem?

Yes, of course.

Is it as big a deal as these folks want it to be?

No, not unless they're successful into making it so in the public's mind.

Ben Stein's comments about the Chicken Sh.......err, Chicken Little hysteria are right on the money.

Dave Ribar


The mortgage mess is a financial disaster, clear and simple, and one in which the administration and its Federal Reserve enabler, Alan Greenspan were complicit.

The disaster is going to unfold relatively slowly as stressed mortgagees confront the twin problems of rising adjustable interest rates and baloon payments, which will push mortgage payments up, and falling house values, which will put people "upside down" in their loans (especially the new-fangled 100 percent and 105 percent loans). Unfortunately, we won't really see the extent of the problem until all of the mortgages that are going to default do default--until then all the lenders can do is write loans off as the defaults come in and speculate about how bad things will get.

The element that keeps this from being a fast-moving disaster is that most of the investments are people's homes. So many stressed households will strain with their current mortgages; other households will put off selling at such low prices. Unlike stocks or bonds, people get direct services from their homes. Homes are also relatively illiquid (cannot be sold instantly), so you won't observe a sudden collapse like you would in a financial market or in the 1980s savings and loan debacle. On the other hand, the slow turnover of houses also means that the drag on the economy is going to persist for a long while.

Why are the White House and Fed complicit? For the last six years they have pushed consumer spending and debt financing (both public and private) as our primary means of economic expansion. They have expanded the supply of credit far past what is reasonable. What we are seeing now is the inevitable disintegration (and fortunately not the sudden popping) of that credit bubble.

If we are lucky, we will only shave a point or so off of GDP growth and avoid a recession. However, problems like this and the oil price shocks weaken the economy and make us very vulnerable. As we saw at the end of the last decade, economic expansions don't last forever. Another problem, like the fall out from the California fires or an additional financial crisis, would push the economy over the edge. Regrettably, the White House through its fiscal irresponsibility and the Fed through its already low interest rates haven't left us with many policy levers if things do get worse.

We don't need any Chicken Littles here, but we also don't need ostriches with their heads stuck in the sand. The mortgage crisis is going to get worse.

Ed Cone

I quoted Stein's article on Sunday.

Here's what I wrote the last time you made the same argument, Bubba:

Bob, I have not seen or cited anyone saying the economy is in recession.

Paulson and Bernanke are discussing risk factors and the scope of problems in the housing and financial sector.

News of a big storm that might be heading north from Florida doesn't mean it's not partly cloudy today along the Outer Banks.

People are free in this country to say there is no storm, even as footage of rising water a few states to the south fills the TV screen. And they can repeat that it's still dry here, even as the radar tracks the storm northward.

Maybe the storm will veer out to sea before devastating a wider region. That doesn't mean there was no storm, or that preparing for it was a bad idea.

I don't want a recession, for any number of reasons.

In any case, your projections about the political motives of people who discuss this stuff aren't really relevant in the face of the data.

And your track record of assessing the data is not good.



You're wrong. You know nothing. I know everything.

End of discussion.

Dave Ribar


This is like the Star Trek "I, Mudd" episode where Kirk shuts the robots down by saying "Everything Harry tells you is a lie -- remember that! Everything Harry tells you is a lie!" and Mudd says, "Now listen to me carefully, Norman laddie; I - am - lying!"
that everything."


"I have not seen or cited anyone saying the economy is in recession."

They don't have to say it.

The one-sided "analysis" is enough to unermine consumer confidence.

"And your track record of assessing the data is not good."

In either case, you provided no evidence to the contrary.

The information I quoted was accurate.

Try again.

With your help, and that of all the eager and willing accomplices, you may yet succeed in getting that recession.

By the way, Dave Ribar: Are you still telling people that Medicare Advantage is an "add on" to Medicare?

Ed Cone

Why do Paulson and Bernanke hate America?


Hi Bubba,

How about explaining why the sub-prime and perhaps prime problems along with falling existing prices, decreased housing starts...therefore decreased employment from same sector is not a reason for economists to predict recession.

So much of the new everythings have been financed with home equity loans, refinances..etc. that moving forward I see this as being a potential for a whopping big problem that is far greater than housing. Folks that had equity will no longer qualify for equity lines, 2nd mortgages and so on to buy cars, appliances and such.

I don't see this as a political issue first and a economic issue second. I see the reverse....economic first and politics taking advantage for their own reasons second.

Thanks and appreciate your response,



'We are currently doing well, according to Bernanke. We have had some recent troubles in which the Fed responded to promptly. Bernanke did mention that it is the job of the Federal Reserve to prevent financial crisis. He stated',

"Indeed, a principal motivation for the founding of the Federal Reserve nearly a century ago was the expectation that it would reduce the incidence of financial crises by providing liquidity as needed."

'The chairman once again stood by the recent decisions of the Fed to cut rates. "The Federal Reserve’s efforts to provide liquidity appear to have been helpful on the whole…Fortunately, the financial system entered the episode of the past few months with strong capital positions and a robust infrastructure. The banking system is healthy."

Robert Steel (Treasury Undersecretary for Domestic Finance":

"Well, the financial markets have been improving in all kinds of ways. This was just one area, specific area of the credit market that was returning to a more normal trading conditions a bit more slowly. In terms of the economy itself, Secretary Paulson has said continually that there has been a penalty to growth from the challenges in the credit markets and in housing over the course of this year. But despite that penalty to growth, the economy we're comfortable is still growing. It's strong in lots of other ways and so hopefully the growth will continue later this year. And so that's our expectation."


"The credit markets appeared to be slowly recovering from the panic of early August."


"How about explaining why the sub-prime and perhaps prime problems along with falling existing prices, decreased housing starts...therefore decreased employment from same sector is not a reason for economists to predict recession."

Do you actually think that those factors alone would cause recession?

If that's the case, we would already have seen negative GDP growth numbers.

This segment from an MSNBC report is on target:

"Still, while consumers say they are more worried, they seem to have kept spending in August. Car sales showed surprising strength, and sales also held up relatively well at big chain stores like Wal-Mart. As long as job and wage growth continue to provide the cash to keep consumers spending, say many economists, the drop in housing prices won’t necessarily bring a wider pullback."

All the signals say the housing/credit/subprime segmented recession won't cause an overall recession.....unless those who consistently like to talk gloom and doom are successful in undermining consumer confidence.

Ed Cone

The Treasury Secretary and the Fed chief are assessing the damage done and the risks to the larger economy.

The press is reporting news (enormous write-offs at ML, big losses and layoffs and numerous companies, resets and foreclosures, costs higher than the S&L mess, etc.)

My particular interest is the opacity of markets and the financial engineering, which are important to understand not only in the current situation but in hopes of improving markets in the future.

I'm pretty sure Paulson and Bernanke don't want a recession. I know I don't. Neither they, nor I, have said we are in a recession, or doomed to enter one. There are people who've been right about a lot of this stuff who do foresee a recession; let's hope they're wrong.

But hoping doesn't mean ignoring the facts, and paying attention to the facts doesn't mean one hopes things get worse.

Dave Ribar


I can't recall anyone asking recently. If they did, I would repeat the administering agency's description (as I did for you) that "Medicare Advantage Plans are health plan options that are part of the Medicare program. ... To join a Medicare Advantage Plan, you must have Medicare Part A and Part B. You will have to pay your monthly Medicare Part B premium to Medicare. In addition, you might have to pay a monthly premium to your Medicare Advantage Plan for the extra benefits that they offer."

The term "add on" doesn't sound too far off the mark when you consider

  • The default is Medicaid Parts A & B, and you can only get Medicaid Advantage (Part C) if you are eligible for Parts A & B.
  • Participation in Medicaid Advantage is optional.
  • Most people don't have to pay anything for Part A because it's already covered by own or spouse's previous payroll taxes; however, some (many) Medicaid Advantage plans includes up-front premiums.
  • Medicaid Advantage plans usually require payments into Part B.
  • Medicaid Advantage plans were introduced (added) into the system after Parts A & B, and finally,
  • Medicaid Advantage plans cost the federal government MORE on an average per-enrollee basis than the default Part A & B plans.

    The only way in which these plans are not "add ons" are that you elect to participate in Part C, you can't participate in Parts A & B. That is, you get services through one mechanism or another, but not both. I'm not sure, though, how any of this arcane information is relevant to the mortgage crisis.

    BTW, please add CNNMoney to your list of accomplices regarding the country's housing woes.

  • Bubba

    We've been through this before, Dave.

    Medicare Advantage TAKES THE PLACE of traditional Medicare, as the chart from the 2007 CMS booklet clearly indicated.

    The expenses of a Medicare Advantage plan participant are PAID BY THE INSURANCE COMPANY, not by Medicare, as is the case in a traditional plan.

    It's an either/or proposition, not an "add on".

    If you were to use your description to a senior who wanted information, you would be misrepresenting the program.

    If you actually had a NC license as a Medicare Supplement agent, you could be subject to disciplinary proceedings for doing so.


    "I'm not sure, though, how any of this arcane information is relevant to the mortgage crisis."

    It speaks to your credibility.

    Dave Ribar


    I'll stand by my uninformed, non-credible statement above.

    I hope that you are not telling your Medical Advantage clients that all of their expenses are paid by the insurance company. Most participants still have to pay Plan B premiums, and many still have co-pays or other out-of-pocket expenses. The annual payments can range into the thousands of dollars, even after premiums are paid. Misleading your clients about their actual expenses seems like much stronger grounds for losing a license than my post above.

    Also, even after you factor in the company and subscribee payments, all of these plans are heavily subsidized by the Federal government. So, from a public finance standpoint the plans aren't covering all of their own expenses.


    "I hope that you are not telling your Medical Advantage clients that all of their expenses are paid by the insurance company. Most participants still have to pay Plan B premiums."

    Of course not.

    Unlike you, I'm not interested in giving out inaccurate information.


    And by the way, my use of "expenses" was clearly in reference to amounts payable to medical sources.

    Leave it to you to try to obfuscate what was actually said.

    I remember that tactic well from the days when the academic snobs with whom I was associated in school refused to admit an obvious error, in a vain attempt at saving face.


    OK...I will go on record saying that I believe we are closer to a recession than another 10% rise in our markets.

    I believe when the sub-prime and prime ARMS adjust over the next few months we will start to slide. My real guess is that between now and April we are in for a downward ride in our equity markets.

    I think our fed leaders would be hard pressed to ever predict a recession for the very reason that Bubba need to talk us into one..... One should ask....why did the fed feel the need to cut rates and where would we be had they not?

    I further believe that the dollar being weak is in no way helping the middle class and lower paid households...which in it's on odd way is inflationary.

    Dave Ribar


    Clearly it's my lack of expertise, but I don't see a misrepresentation of the program in my explanation or how the explanation would disadvantage a senior. It's also hard to see how quoting material directly from the Centers for Medicare and Medicaid Services could possibly be a bad description.

    To reiterate, though, this whole discussion seems to have taken us far off the point of the economic impact of the housing crunch or the transparency concerns regarding Merrill Lynch and other large investment houses.


    "To reiterate, though, this whole discussion seems to have taken us far off the point of the economic impact of the housing crunch or the transparency concerns regarding Merrill Lynch and other large investment houses."

    Then you should have answered my original question, directed to you as an aside, with a simple "yes" or "no" answer instead of the long winded, pedantic, and incorrect comment you chose to make.


    Merrill getting closer to NC?


    "OK...I will go on record saying that I believe we are closer to a recession than another 10% rise in our markets."

    The indicators are not pointing to that at this point.

    Some time ago, you mentioned you had moved to a cash position. I think you jumped WAY too quickly.

    A question for you, assuming you are still in a cash position: At what point do you move out of a cash position? How do you judge your timing for the best effect of such a move?

    By moving to a cash position too quickly, I would imagine you will also move to slowly to get back in.

    Even assuming a recession is inevitable, the overall result of such a strategy would probably put you in a worse position than if you had stayed in the game and made prudent and basic readjustments.


    Regarding talking the economy into recession:

    "Okay, watching the mainstream media break the pom-poms and root, root, root for a recession is hardly new. More or less, the media has been using the “R” word ever since President Bush took office.

    With continued economic growth, a strong stock market and jobs market, and solid corporate earnings over the past six years, it’s been fun watching the naysayers twist themselves into pretzels trying to explain how they got it all wrong, time and time again.

    And they’ll be wrong again. As the old saying goes, the experts in the media and in academia have correctly called nine of the last three recessions.

    So take news reports like this with a grain of salt."

    Ed Cone

    Bob, you've made your point that the overall economy has not yet foundered and may weather this storm. But the fact is that people like the Treasury Secretary and Fed chief are warning that the very real bad news may continue. It seems prudent to acknowledge that reality. It also seems wise to consider the factors that led to these problems, and try to avoid future issues of opacity and gaming the system.

    Dave Ribar

    Here's a copy of the Fed's most recent (Oct. 17) "Beige Book" report and a copy of the previous report from just before the last Open Market Committee meeting in which the Fed dropped the federal funds rate by 1/2 percent.

    The Beige Book is the Fed's summary of "current" (actually slightly lagged) economic conditions in its different districts. The August report and the OMC statement both cited economic softening and threats to economic growth. The most recent report indicates that the economy was still growing but that "the pace of growth was continuing to decelerate" and that growth had slowed from the previous report. The Oct. report also stated that "Contacts in a number of industries indicated a higher-than-usual degree of uncertainty about the outlook for economic activity."

    There's little doubt or disagreement that the economy is in a rough patch. Whether that rough patch actually leads to recession (an actual, prolonged decline in economic activity) rather than sluggish growth or possibly a one-quarter dip is still up in the air. The economy does, however, look to be more vulnerable right now than at any time since 2001. The advance numbers on 3rd quarter GDP will come out next Wednesday. Hopefully the numbers will be more positive than expected.


    Yep...moved to cash some time ago.

    quick recap-- I moved to cash in Oct. 2000, reentered with 100% the week following 9-11-2001, moved back to cash within 30 days, ....a little fuzzy memory next--went back in for a few months in 2003, back in a little in 2005 and have been in cash mostly since. For sure back out for most of 2007. My expected rate of return will be around 4% this year.

    I make no claim to getting it right or predicting the future just enjoy speculating and being very conservative with my investing.

    I feel like what kept us from a deep recession a few years ago was the Fed cutting rates to unrealistic low levels (one trick pony), which triggered the housing boom in construction and value, which created a rebounding economy. I wonder if the same that pulled us out of the last will lead us into the next slow down. Add a war to the above and you have a strong economy. Raise rates and end our participation in the war and I believe we will slip into a downward spiral.

    Timeframe---now to 24 months.


    "Bob, you've made your point that the overall economy has not yet foundered and may weather this storm. But the fact is that people like the Treasury Secretary and Fed chief are warning that the very real bad news may continue. It seems prudent to acknowledge that reality."

    That reality has been acknowledged.......time after time after time after time after time after time after time.

    To continue to wring one's hands about the "misery sure to come" leads to a self-fulfilling prophecy, or the achievement of a political/social/economic agenda talking point.

    Since the Fed rate cut, the odds of a recession have been lowered from a one in three chance. However, the effects of the rate cut for the overall economy are not instantly noticeable, and take longer to reach full effect.

    The economy (and markets) are likely to remain sluggish until the full effect is reached. Until that time, the continuous Chicken Little wailings, and constant reminders of "how bad it is, and how bad it's gonna get" have the effect of causing people to lose confidence and to panic.

    Does that mean those who have financial interests to protect should ignore all this?

    Of course not.

    A strategy of owning quality investments, maintaining a long term perspective, and properly diversifying your holdings is always a wise course to follow.

    Panic or impulsive decision making is never wise.

    One thing is for certain: the excessive drum-beating of negativity we've been forced to endure recently is totally counter-productive, and from some of the sources, it's actually insidious.

    Ed Cone

    Bob, you are the one who brought up the topic of recession in reaction to this post, which is about the specifics of the housing/credit market.

    The housing/credit story itself is well worth covering, no matter the ultimate damage to the larger economy. It's a huge business story, with implications for millions of people, and implications as well for financial markets into the future.

    New information and analysis continues to come out, as discussed in the post. If you wish to respond to such information by repeating that the economy is not in recession and you don't think it will be, fine, have at it.

    Jim Caserta

    I thought I would have beaten 4% with a mix of small/mid/large cap index funds & 2 actively managed funds, but ... "Personal Rate of Return from 01/01/2007 to 10/25/2007 is 4.1%".

    My question for Merrill is did you more accurately re-price the assets in the 2 weeks between the $5bln write-down and the additional $2.9 billion, or did they know about the full $7.9 bln and let the information out in two separate statements. The real value of the assets they wrote down did not change in price within 2 weeks, they are just marginally liquid assets without a constantly traded market like stocks. For markets to work you need accurate information. From what I've read, the packaging of mortgages has made valuation more difficult, and more difficult to rework the terms of individual mortgages also.

    And we stockholders and taxpayers foot the bill, of course. But even this is not the worst part: there are still lots of people who can say with a straight face that the world of finance is overregulated, that we should trust the power players to do the right thing, that if we put finance under a microscope, or allow financial miscreants to be sued for misconduct, America will be harmed. There are still people, and I know many of them well, who believe that old myth that you can trust the markets to fix everything — that old magical thinking that some thieves will stop other thieves from robbing the sheep like us. That’s the really sad part. Some babies never learn.

    Excerpt from Jim Caserta's Ben Stein/NYT link:

    "And really, the whole story about the economy, credit, morality and rescues is about perspective. Start with the good news about perspective: The economy is basically in fine shape. Not perfect, but darned good. Almost all mortgages are not in default. Almost all workers in the labor force who care to work are not unemployed. The largest percentage ever of American household units, what were called “families” in the old days, own their own homes.

    The stock market, in both absolute terms (the number on the Dow) and relative terms (the relationship of price to earnings), reflects optimism and an extraordinary, robust level of profits."

    "NOW, let me go back to my role as Little Benjy Sunshine. None of this will sink our glorious economy. The losses are nothing compared with the losses in the tech debacle. They will be nothing like the numbers bandied about in the fear-mongering media. If there is a questionable $200 billion pool of loans, that means a small percent will be lost, not all of it. This big, strong economy will sail on through."

    It's pretty clear that this whole thing is way overcoverd and way hyped beyond the actual depth of the problem.

    The "new information and analysis" you're talking about hasn't changed that fact.

    To give it much more attention than it needs speaks to a underlying and unspoken reason for the continued hype.

    In your case, it's your standard operating procedure for an issue you want to keep talking about, despite having nothing of value to add after the first several times you worked it.

    Jim Caserta

    Ed, were you this doom & gloom back in 1999-2000? Wasn't it just hype that rocked the NASDAQ and tech stocks in general? Why did people continue that hype? Didn't we enter a "new economy" then just like we entered a "less volatile era" today?

    Upon reading about Merrill's $5Bln write-down/loss people probably asked "how bad it is [for Merrill], and how bad it's gonna get [for Merrill]". Obviously it got worse with the additional $2.9Bln write-down. You have Countrywide predicting a return to profit 4Q08, but remember they were saying there was no problem to begin with. Companies have an incentive to only let out bad information when they are required to, and often they try to avoid that.

    Urging caution and a thorough investigation into problems does not cause problems, it usually just finds them a little quicker. I saw lots of people lose lots of money and jobs in the tech business in 2000-2001. I saw a lot of money going places it shouldn't have: into dot-coms, and unsustainable telecom infrastructure. Not everyone wanted to acknowledge a problem then, until they had to. Optimism didn't help when their $100k in Lucent became $5k.

    Ed Cone

    Jim, a very quick Nexis search turned up a review-the-predictions column from July 1, 1999, which refers to a March, 1999 column I wrote discussing "the grisly end awaiting the Internet stock bubble."

    I talked a lot in those days about the unsustainable valuations of net stocks, but I don't think I foresaw the related collapse of the much larger and better-established telecoms that really punished the broader economy -- one reason I find the spread of problems from housing to finance so interesting today.

    Another fun one from that same mid-'99 review: " the end of '98 [...] I wrote that the Y2K problem, then emerging as a mainstream media staple, was being overblown by consultants, lawyers, journalists, clergymen and long-shelf-life food salesmen eager to profit from the scare. A real and costly business issue, yes, but not a reason to move to the mountains with a stockpile of batteries and ammo. This one still looks like a good call."


    My concern for housing is the loss of wealth and borrowing power in home values.
    Many have come to expect using their equity for many purchases. Without the growing values in their homes..then their purchasing power drops..etc.

    Ed, Those were great calls in the late 90's and y2k. Write more about this stuff when you have time.

    Ed Cone

    Meb, see the second article linked here for other possible ripples.

    Funny thing about the .com stocks and Y2K: they weren't hard calls to make, if one looked at the data.

    Here's my last column of the old millennium on Y2K, published just before the allegedly-fateful hour; I still have one of the classic Rhino Times fear-Y2K editions somewhere in my office:

    News & Record (Greensboro, NC)

    December 2, 1999, ALL EDITIONS



    With just a few weeks left until the dreaded Y2K, I have mapped out my own personal preparedness strategy: an aspirin and a glass of water before bed to mitigate that nasty New Year's Day hangover.

    Yes, I will be drinking on New Year's Eve, if only to forget the Y2K hype that continues to percolate in the popular culture. As this column has been saying since last December, the world will not end at the stroke of midnight, although if you've put your life savings into canned goods, you might wish it had.

    A much-overlooked fact here is that there won't even be a single, dramatic ''stroke of midnight'' to usher in Y2K. That only happens in the fairy-tale world inhabited by Cinderella and, to judge by its wacky Y2K coverage, the Rhinoceros Times. By the time the ball drops in Times Square, midnight will have come and gone in much of the (real) world, including most of the anticipated trouble spots.

    Here's a plan for the faint of heart: Before you go out on New Year's Eve, turn on CNN. If you see footage of Tokyo in flames or mobs looting the capitals of Europe, tell the baby-sitter you'll be home a little early. Otherwise, relax.

    I blame a lot of the fear over Y2K on the stroke-of-midnight angle, which blends so perfectly with well-established superstitions. Throw in the sci-fi nickname and a generalized ignorance of how computers actually work, and you've got a scare story with legs.

    There will be computer errors associated with the Y2K problem. In fact, they've already begun. Several prospective jurors in Philadelphia, for example, recently received notices relieving them of jury duty in 1900. This, the republic can survive.

    Still worried? Here's an experiment that may help calm you down. Take out your wallet. Look at your credit card. The year in the expiration date almost certainly starts with a ''0.'' It's already 2000 in the financial world and has been for a while, but my Visa bill keeps coming right on schedule, and I bet yours does, too.

    Seriously, fixing this problem has cost businesses and governments hundreds of billions of dollars, and there may be further economic consequences as bugs crop up in the first quarter of the new year. There will also be economic benefits to be reaped from the modernized computer systems at hundreds of companies and the freeing-up of talent that has been focused on the problem. Somebody will sue somebody, I'm pretty sure of that.

    None of which is to say that we can't anticipate some unanticipated disasters. I mean, who knew how awful that Y2K movie on NBC was going to be? And Will Smith's sappy ''W2K'' rap - that certainly qualifies as a threat to, well, something. But as chilling as these horror stories may be, they don't add up to a global blackout.

    Nevertheless, the Y2K alarmists don't give up easily. For some, it's a matter of economics. Take the WorldNetDaily Web site, a well-trafficked paranoia mill that this week ran a big, disaster-in-the-making headline on Y2K. The headline, although unsubstantiated by the accompanying story, provided a dandy segue to the next headline, an advertisement for a how-to-survive-a-Y2K-disaster video. Imagine being stuck with a warehouse full of those on Jan. 1.

    No matter what happens, you know the disaster crowd will claim vindication if so much as a streetlight fails to operate on schedule. Most people will probably notice that they are not freezing in the dark, though, so paranoia will have to find a new bogeyman in the new millennium. Early candidates include the World Trade Organization, China, and Sen. Hillary Rodham Clinton.

    And hey, Y3K is not as far away as you think.


    I suspect you would maintain your leading edge by making sense out of the housing market and implications for our equity markets and general economy.

    Ed Cone

    Making sense of the housing market isn't too hard. It's the other two items on your list that will make and break people...


    Although it may seem as though the bank would actively want to pursue the foreclosure and get it off the books, so to speak, many large lenders are working on hundreds or thousands of foreclosed properties. Many of the owners will simply give up on the home or be too frightened to ask for more time. The ones that are seriously looking into ways to stop foreclosure, though, will be able to convince the bank that they deserve more time. The bank would willingly offer more time to solve the problem, and it is easy enough to postpone the foreclosure auction. The extra fees and interest will just be added to the balance in the end, anyway, and be counted as an even larger tax deduction for the lender.

    The comments to this entry are closed.