Occupy Wall Street and Foreclosures

If you listen to the many voices coming from the Occupy Wall Street crowd, it is difficult to identify the purpose of the protest.  The problem is that the purpose does not fit neatly into a sound bite or onto a button.  What is the overarching theme throughout all of this is that people are challenging the status quo.  A revolution in thinking.  In college they taught that the beginning of the 1900's was a similar revolution in thinking; arts, religion, agriculture, industry.

What does this have to do with Foreclosure Defense?  Up to this point people have blamed the homeowner and the homeowner blamed himself/ herself.  The homeowner truly thought that a loan modification was the Bank's attempt to help.  The homeowner fell behind, couldn't catch up, the Bank had to file foreclosure, but then the Bank came to the rescue with a modification.  People have been accustomed to having the Government solve major issues, and therefore the Government can solve this issue.

Foreclosure Defense and those practicing it should be educating the public that the way to correct the foreclosure problem is to defend the foreclosure complaint.  The Bank has no desire or incentive to work out a reasonable modification.  The homeowner and the lawyers involved cannot understand why the Bank will not work with the homeowner.  If the house goes to Sheriff's Sale the Bank will certainly receive less than what the Bank would recieve if it worked with the homeowner.  Wrong. 

In May of 2011 Ginnie Mae, our Federal Governement, issued $25.4 billion dollars in mortgage backed securities.  The thought process by the Governement is that it must keep putting money into the system to keep liquidity in the market.  The unintended result is that Banks do not have to make good business decisions.  The Government encouraged Banks to make loans without considering a business decision.  Now the Banks do not have to consider business decisions when a mortgage goes into default.  Simply foreclose, purchase the home at Sheriff's Sale and eventually make a claim on the Government guarantee of that loan.  Why wait 30 years to get paid in full when a foreclosure dramatically reduces the time.

The Federal Government will never simply stop the current system, but individuals can dramatically slow down the system by defendning the foreclosure complaint.  The Bank faced with actual litigation is more inclined to make a business decision instead of simply following the same pattern of foreclose, Sheriff's Sale, make a claim against the Federal Guarantee.

Occupy Wall Street is in part an opportunity to inform homeowners facing foreclosure that they have the means to correct the problem without waiting for the Government to correct the problem.