I’m sure you’ve heard the talk by now that five or six major banks in our nation are going to be giving $2k to persons who lost their homes due to foreclosure. Interesting topic. Even more interesting is the response to this news.
I’m not aware of all the facts. This is what I do know. There have been several class-action lawsuits filed against the above mentioned banks due to their “neglect” in the foreclosure process, i.e. “robo-signing”, etc. And the other thing I know is: I heard the president state that it was the government’s job to ensure that the banks “do the right thing” by those who were foreclosed on.
Here are my thoughts and questions on the whole deal (and perhaps an opinion or two thrown in).
Are the banks being forced into this action, or is this the settlement they have decided upon to put an end to the lawsuits? I’m not sure, but if so, the banks are probably getting off cheap.
Did the banks err in the foreclosure process? Dunno.
Is it the government’s job to ensure that the banks “do the right thing?” No. Not. Ever. Leave the private sector alone. The lenders knew the risks they were taking when making the loans. They also minimize the risk factor by that little clause that entitles them to take posession of the property if payments are missed, providing they do so by following the proper channels.
Were borrowers tricked, coerced, or forced to take the loans they couldn’t afford, or shouldn’t have applied for? Nope.
Here’s what I really don’t get and the main purpose for this post. Why are people who are in good standing with the banks concerning their mortgages so up in arms about it all? I’ve heard comments like, “Why should those of us who pay our mortgages be punished for doing so, and those who don’t be rewarded?” Seriously?
If they are so concerned with that problem then here’s a suggestion. Stop paying your mortgage and let the bank take your house. You too can get a check. (Actually, you can’t because I think it only focuses on foreclosures between 2008 and 2011. But that’s beside the point.)
Bottom line is a lot of people have lost their homes for various reasons, and all the time and money they invested. I would venture to say that probably 95% of those folks would much rather have their homes back than the $2000 check from the bank.
Is it fair? Nah.
It reminds me of the story in th Bible where the owner of the vineyard hired laborers to work in the fields. He paid them all the same amount, those who worked all day and those who came along the last hour. Those who had worked the entire day complained to the owner that it wasn’t fair, even though they had agreed to the terms.
On a more personal note, we lost several houses during that time period, including our personal residence. I don’t want or need the $2000 check from the bank. It will neither make or break me. Given a choice, I’d like a do-over. I’d take my house over the check any day.