Irresponsible lending responsible for Miami’s foreclosure crisis — NOT irresponsible borrowing
When it comes to the top reasons why the real estate market and the economy imploded, irresponsible borrowing by homeowners does not even make the list. As our Miami mortgage foreclosure defense lawyers frequently report, the blame rests with Wall Street and the greed of those running the nation’s largest banks and mortgage companies.
It is the same greed that those looking to prevent foreclosure in Miami are now battling. To save their homes. Their credit ratings. And the future financial well-being of their families. If you are dealing with foreclosure in South Florida, please consult with an experienced attorney to protect your rights. You cannot count on being treated fairly by the very same banks responsible for the worst economic collapse since the Great Depression.
The Top 5 Reasons for the Economic Implosion, according to the “Chain of Blame”:
-Wall Street’s insatiable demand for loans led to lax underwriting standards. As Wall Street packaged more and more loans during the boom, they needed more and more to continue to impress stockholders. In an industry where every player was driven by ever-increasing bonuses, this led to pressure on loan processors to approve suspect loans.
-Any due-diligence was poorly performed and done by those who had incentives to approve loans no matter what.
-Everyone relied on flawed delinquency projections and past performance. This point is rather charitable to those in charge. In reality, we aren’t sure they cared much about delinquency. They figured to make it up in volume. And they were getting paid regardless. The outcome of this scenario is as old and foregone as putting the fox in charge of guarding the hen house.
-Ratings agency fees were paid by the issuer. What this means is the agencies in charge of certifying the risk of a particular batch of securities was being paid by the seller. And guess who got the most business? You guessed it: The agencies known for handing out the most favorable ratings.
-Housing prices tanked: Ultimately, they had nowhere to go but down as a result of the relentless onslaught of greed.
And who paid? The homeowners. Both those who are still paying underwater mortgages in Miami and those who have been forced to throw in the towel. The homeowner is footing the bill and will be for years to come. But please don’t say it is the result of irresponsible borrowing.
If you are dealing with bad real estate debt in Miami, don’t trust your bank. Talk to an experienced attorney and negotiate from strength.
If you need help with foreclosure issues in Miami or the surrounding areas, including short sales, deficiency judgments, strategic defaults or other help for Miami homeowners, contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991.
Securitization SOS Feb 2011 ppt.pdf