The Laws and Averages

The average American household refinances their mortgage, once every five years. But what does that tell you? Does the average home in America really refinance once every five years? Heck no.... something more like 1% of American homes actually refinance once every five years. Half of America does not refinance their mortgage. The other half (the half that is in trouble) refinances on average once every two to three years. Again, that's the average, not exactly what is happening.

Try to understand this, because it is the truth. Half of America is losing their homes. Our currency is played out, our global corporations have had their way with globalization, and the sad truth is this; half of America does not make near enough wages to really support their home. To support a home, you have to be able to pay the mortgage with one quarter of your real income. That's the truth. Every mortgage banker knows that. But, today, half of America needs 45%, 50% or more of their real household income to cover their mortgage; this is what has been happening to us over the past 25 years and it has come to a head and the foreclosure puss is spewing out big time.

Did you know that every mortgage written in America has a clause that permits the bank to foreclose the property if the tenant is late on the first payment? Why do you suppose home owners are termed "tenants" by mortgage and title documents? You do realize that a tenant rents, while owners are supposedly endued with a bundle of rights and entitlement to the exclusive use of the land? You see, just like the currency, the sanctity of home ownership has waned in value. The banks have become predatory in nature, they don't really want to work out hard times with "owners" ... they don't even view the tenants as the true owners... the culture has changed, Loan-To-Value for half of America now averages 80%-85%, the cold hard truth is this; today, banks feel like they are the true owners of half of American homes.... And foreclosure is just a legal method for them to claim what they rightfully own. It is a temporary insanity. Medieval nobles understood the need to have surfs work their land. Modern mortgages are modeled after that relationship. But corporate banks have lost their mind, or as it were, do not possess a single mind, and things have run terribly amok. Do you know who is kicking half of America out of their homes? I'll tell you exactly who is doing this.... Computers are doing it. Humans are told by the computers what to do, we call that doing our job, and the computers are programmed to run the high LTV "tenants" out of their homes, using the laws of the land.

Do you know why Bank of America bought Countrywide? But let Washington Mutual fail? Do you know how Countrywide shot from 8th largest Lender in America past #1 Washington Mutual in just four years time? What did Countrywide build that made it so big and valuable? The answer is simple; Countrywide created the far and away largest foreclosure unit in the world. When banks, rather, when bank computers decide to kick a mortgage into foreclosure, the paper gets sold to Countrywide. Countrywide foreclosure unit does not even talk to home owners, they just prosecute the foreclosure. It is a big machine, one that I have been all through as a loan officer, and this is how it works.... They simply do one thing; they foreclose homes.

So when you read that only 8%-9% of Americans have exercised their new government option to rework the mortgage payments, you should quickly deduce that Americans simply do not care that they are losing their homes. It is no big deal, America, cuz you don't even try to hold onto your homes, over 90% of you don't even rework the payments as provided by the government, obviously you want to be tossed in the street. And that's about all you will be told by the stories that get printed in our mass media. They don't dig into the story to discover why the government program is not working; they just blame it on the people losing their homes... or maybe sort of make it look that way, without any further explanation. It's funny because I met with homeowners who were in the process of foreclosure, and I don't remember any of them acting like it was no big deal. They all were plum sick over the matter, as I recall. But you know how it is, the boss gives you a story to write by five o'clock, you hunt down the numbers, call some industry insiders for a couple quotes and whip off the story... it isn't vey often that they get assigned to spend weeks interviewing people in the actual foreclosure process... and then they have no clue how the laws work or what is the foreclosure industry in America. I'll bet, prior to reading this post, you didn't even realize that foreclosure is considered an industry in America. Wouldn't it be interesting to discover what percent of the GDP is foreclosure related? Maybe "interesting" was the wrong word; maybe instead, I should have used "terrifying".