Just got through reading an interesting post over at Counterpunch. Written by Marshall Auerback, he brings to the fore an interesting notion worth expounding on.
Read his article here, it's fairly brief. http://www.counterpunch.org/...
In a way, it's kind of a nice followup to my last post, commenting as it was to a good judge finally compelling the Boyz on Wall St. to do something against their wishes.
My case simply put is that neither party is going to do what really needs to be done. I'm glad there is at least one judge with 'nads. They're in short supply over at the Capitol and it looks like Mr. Friendly's all boxed up by his buddy, Mr. Chucky G, our fave Pug from Ioway.
I digress. What Mr. Auerback is forecasting is the possible beginnings of debt repudiation from mortgagees across our fair nation. He brings as an example Argentina calling the IMF's bluff a few years ago. The point being, that no one seems to want to work with those saddled with suddenly enormous debt to asset ratios.
I've learned somewhere, (don't ask me to source it) that the ratio is now passing 125% on 48% of those who don't own their homes outright. In other words, the house ain't worth nearly what the contract (note) demands you send in every month. Now, there's been some rumblings a short time ago about cramdowns, (a Pug term, if there ever was one) whereby a judge could reduce the principle on your mortgage to more accurately reflect fair market. Yeah, well the banks about shit and the MSM has been totally mum on that. Besides, they're too busy covering the mouth breathers with their town hells.
You might remember some people have begun squatting in their own homes. Big thing down in Florida. Got endorsed by no less than a mayor. Also, there is this little thing called "Show me the Note" which also isn't getting diddly for airplay. Neat scheme, this. Since most of the recent mortgage notes have been sliced, diced and bundled, there's a question of who actually has the note and the bigger question of whether an institution can produce it.
It's really hard to foreclose on a property if you can't prove you're the mortgager. This is something they didn't teach us in real estate school, but anyone that's run title at the courthouse will tell you that's a BIG problem now. Just food for thought...
In actuality, if Obama's Wall street loving advisers don't get the boot pretty soon, then the next fashionable trend might just be show the note parties, and/or class action demands for those "cramdowns" that Wall street finds so abhorrent. Or, most ominous, debt repudiation. More and more folks might just stop paying. At all.
BTW, Remember how they talked about the "sanctity of the contract"? Well, how sacred was that when union wages at the car plants was being discussed? Suddenly, the line guys are supposed to work for air pudding, courtesy of our Mr. Ears over in 'Bama and to hell with the UAW contract. So shit only flows one way.
I drew a little comfort from Marshall's column and highly recommend it. Even if you're not in dire staits and have to choose between clipping that coupon for the worthless house or going to Kroger's, it's a compelling read.