The Perfect Storm Hits the Housing Market

A recap of recent events and how these issues impact the housing market.

Irvine Home Address … 5 PERIWINKLE Irvine, CA 92618

Resale Home Price …… $500,000

Freedom–calls my name

Serenity–keeps me sane

Happineses–it dulls the pain

Honest–to see my place

Open–to other ways

Willingness–to understand

Justice–but do not judge

Courtesy–for others' flaws

Kindness–it's not that hard

Self-restraint–of toungue and pen

Inventory–my daily friend

Analysis–let down your guard

Look in the mirror

What do you see?

The shattered fortress

That once bound me

Dream Theater — Shattered Fortress

The Walls Keep Tumbling Down: Foreclosure Flap and Other Housing Industry Woes

Published: October 13, 2010

After suspending foreclosures in order to review cases that may be flawed by procedural errors or fraud, major mortgage companies have injected new uncertainty into the already weak housing market. While few of the homeowners under scrutiny are likely to avoid foreclosure, the freeze adds additional confusion and delays recovery of the troubled housing sector, according to Wharton faculty and real estate analysts.

The foreclosure flap is the most recent of many setbacks for the troubled industry, even as a new generation of potential buyers is rethinking the traditional dream of homeownership. "Buying a home doesn't make sense for a large proportion of the population," says Wharton real estate professor Fernando Ferreira, noting that ownership reduces the flexibility to pursue work in other regions and ties up cash in a down payment that might be used for better investments. "We forgot these lessons in the housing boom. But I think the new generation is learning them — at least for the next five to 10 years."

Our government's obsession with home ownership has blinded lawmakers and bureaucrats to the advantages of renting. Real estate is not going to produce high returns over the next decade as we work off the excesses of the housing bubble, and everyone who has bought property because they think they will make a fortune on appreciation is going to be very disappointed.

After discovering that employees violated procedures while attempting to process a crush of foreclosure cases, three of the nation's leading mortgage servicers — J.P.Morgan Chase, GMAC and Bank of America — are holding off on further action in 23 states that require foreclosures to undergo judicial review. One GMAC "robo-signer" acknowledged signing off on as many as 10,000 cases a month, even though the law requires the signer to review all documents personally. Bank of America later extended its halt to foreclosures in all 50 states.

Wharton real estate professor Susan Wachter says the foreclosure freeze might temporarily buoy prices by keeping foreclosed properties off the market and could give some families another chance to come up with enough money to save their home. However, she expects that most of the now-stalled foreclosures will eventually move forward. "This will only delay the market clearing process."

The banks can't afford the write-downs associated with the market clearing process, so they actively encourage and participate in delaying foreclosures.

According to Wharton real estate professor Georgette Chapman Phillips, lenders may be guilty of shoddy paperwork, although she stops short of calling it fraud. Lengthy delays or overturning foreclosures based on improper documentation, she adds, would create new levels of moral hazard that might lead even more homeowners to stop paying their mortgages. "This is a horrible mess created by the banks and the secondary market. It's sloppiness, but the borrowers are not asserting fraud in the lending of money. We can't ignore that, at the bottom of all this, the people who were foreclosed upon didn't pay their mortgages."

All the nonsense about improper foreclosures seems to miss one basic point: the people being foreclosed on are not paying their mortgage. Banks are worried that walking away will be socially acceptable. Well, it has. People who are not paying their mortgages have now achieved victim status which will almost certainly make their ranks grow larger. The housing entitlement in this country has gotten so bad that people no longer believe they have to pay for their housing. Whatever they can move into they can keep.

The Key Driver: Jobs

The questionable cases are part of a backlog of more than 1.2 million loans that are in the process of foreclosure in the United States, according to RealtyTrac, a housing data firm based in Irvine, Calif. In addition, another 900,000 properties taken back by banks remain on lenders' books, while five million more loans are seriously delinquent. The National Association of Realtors reports that distress sales, including foreclosures, made up 34% of all existing home sales in August.

For every property in visible bank inventory, there are four that are in shadow inventory waiting for the banks to initiate foreclosure proceedings.

"The only way to clear prices is by getting rid of the foreclosure backlog, but that will take a long time to work out. It's still a multi-year process," says Wharton real estate professor Joseph Gyourko, adding that 20% to 25% of all U.S. homes are worth less than what their owners owe lenders. "Every one of them is a candidate for default and foreclosure. It will just take a while to work through."

It looks like flipping houses in Las Vegas will be a viable business plan for a while….

While housing is always highly cyclical, Gyourko says the current prospects for recovery are hampered by extremely low levels of activity throughout the market, including new housing starts and sales volume. And the current slump is different from others because it is driven not only by imbalances in the sector, but also by larger economic problems. "This recovery is different. It's slower than normal…. You won't get much pickup in housing market activity — buying and selling — until you get job growth." Wachter agrees: "The key driver in housing is still jobs."

It is ultimately about jobs, but we have a chicken and egg problem with housing. One reason growth in residential investment corresponds to the bottom of recessions is because once job growth creates housing demand, that puts people back to work in homebuilding which creates even more job growth and more housing demand. Since our current problems are centered in housing, any recovery will not get the same housing demand and homebuilding job growth that helps the recovery gain strength.

Rick Sharga, senior vice president at RealtyTrac, says the latest foreclosure problems represent a "breach of trust" but will have little effect on the final resolution of cases. "It really is more of a temporary delaying issue." The foreclosure reviews will probably add 60 to 90 days to the process, Sharga predicts. This could cause foreclosures to be delayed an additional 6 to 18 months and string out the adjustment in home prices by that amount of time, according to residential mortgage tracker Access Mortgage Research & Consulting. While Chase has disclosed that 56,000 cases are under review, the other companies have not said how many foreclosures will be delayed. Some of the states with the largest numbers of foreclosures — including California, Nevada, Arizona and Michigan — are not ones that require formal judicial review for a lender to take back possession of a property.

According to RealtyTrac, foreclosure filings — including default notices, scheduled auctions and bank repossessions — were reported on 338,836 properties in the U.S. in August, up 4% from July, but down 5% from August 2009. One in every 381 U.S. housing units received some form of a foreclosure filing during the month. Sharga suggests that 2011 will be the peak year in bank repossessions, and that "2012 will be a little better….In 2013, we could see foreclosure activity drop significantly [as] we deal with getting through the overhang of foreclosed properties."

I think he is dreaming to think foreclosure activity will see any significant decline in activity even when the economy picks up. People couldn't afford their houses in good times, so when the economy picks up, loan owners are still facing the fact that they can't afford their homes. Foreclosure activity will likely peak in 2012, but there will be a long tail as this drags on for many years.

Of the 900,000 foreclosed homes now owned by banks, only a third are on the market, he notes. Banks are carrying homes on their books because of delays in processing the volume of paperwork and also because of state laws that put a six-month hold on sales as a way of giving owners a last chance to pay back their loans. Another factor, Sharga says, is banks' unwillingness to take title to foreclosed properties because new accounting rules would require the homes to be valued at their current market price. In many cases, the amount would be less than the outstanding loan, diminishing the bank's financial statements.

While some forecasters have suggested there are as many as eight million homes in the so-called "shadow inventory" of properties waiting to come on the market, RealtyTrac estimates that the total number of distressed properties that will change hands as a result of the financial crisis will top out at 3 million to 3.5 million. According to Wachter, when homes are sold in foreclosure, they go for 40% to 50% less than in a standard transaction between homeowners.

I don't know why he thinks so many will ultimately keep their homes. I wager the number will be closer to eight million homes than three million homes.

… According to Wachter, a look at the city-by-city Case-Shiller data shows that homes in some markets are improving strongly while others are continuing to lose value. For example, the most recent data shows home prices are up in San Francisco (11.2%), San Diego (9.3%) and Los Angeles (7.5%) compared to the same month last year. At the same time, prices for the period are down in Las Vegas (4.9%), Charlotte (3.5%) and Tampa (3.2%). "Different markets are responding in different ways," Wachter notes. "The story now is that markets are bifurcating between the ones that are coming back and the markets that are very slow to recover."

The differences in the performance of various markets has largely been dictated by how much squatting the banks are allowing. In the markets doing the best, loan owners are not being foreclosed on. in the markets doing the worst, loan owners are being booted out.

Homeowners who are disappointed with their decision to buy a home are only discovering what housing economists have always known — a home should not be considered an investment, Gyourko states. Paying a mortgage can be a good way to save because it requires the discipline to make regular payments. But, he notes, a rise in the price of a home is less valuable than a rise in price for other investments, such as stocks or bonds. If a homeowner pays $100,000 for a house that appreciates in value to $200,000, the gain is not really $100,000; the homeowner would not realize the gain because he or she would still need to find a new place to live. A comparable home would also have appreciated as much, eating into the homeowner's gain. A stock that rose in value by the same amount would yield the full $100,000 gain upon sale, less taxes.

Did you catch that? Home price appreciation is not the great deal everyone thinks it is. You still have to live somewhere, and if you spend the house — like everyone else did — then you still need to replace it with a house that has also gone up dramatically in price. People who buy for appreciation do not get the same advantages as a competing investment. Of course, everyone ignores those issues when prices are rallying and lenders are giving out HELOCs like crack to an addict.

In the years leading into the crisis, Gyourko says, homeowners "fooled" themselves into thinking their homes were investment vehicles, and they leveraged the value of their homes to borrow new money for vacations, cars or college educations. "But that's risky. When prices dropped, these homeowners were underwater." The only time home price appreciation counts as savings is when the homeowner trades down in the quality of their housing, or dies and no longer needs a new place to live.

Homeownership also prevents workers from relocating to get a better job if they are locked into a home that cannot easily be sold. In a paper written with Ferriera, Gyourko found that between 1985 and 2007, people with negative equity in their homes were one-third less likely to move. "A lot of people are stuck," he says.

Loan owners don't move. If there is a better job in another town, forget it.

According to Ferreira, the market is close to being stabilized, but could continue to decline over the next two years; he does not expect a pick up in prices for five or possibly even 10 years. In addition, it is difficult to even forecast prices because so few transactions are occurring. Between 1980 and 1986, he says, the U.S. housing market recorded 600,000 to 800,000 home sales per year. That figure jumped to 1.4 million in 2005-2006. Now the market is down to 350,000-400,000 home sales per year, even though the nation's population has grown more than 30% since 1980.

Yet another problem that will weigh on the market in the future are those homes owned by people who are able to make their mortgage payments, or have paid off their loans, but would still like to move to a bigger or a smaller home, to a new neighborhood or to another state. These people, Ferreira says, have been holding off on listing their homes because the market is so weak. Eventually, he adds, they will grow tired of waiting and will put their homes up for sale, adding even more supply to the market and further depressing prices. "They can stick with the investment for now, but the reality is that eventually — and that can be one, two or three years from now — a lot of people will be tired of investing in housing and will sell for any price."

He is describing market capitulation. Until everyone abandons hope and sells, the overhang of supply will keep prices from rising.

Over the long run, Ferreira predicts that housing will return no more than 3% a year, barely keeping pace with inflation. Going forward, he says, homes should be considered a place to live, not an investment. "I strongly recommend not using housing as a potential investment. Leave that for the speculators. If you buy a house, you should buy it for your own consumption. That's all you should care about."

Owner occupants should never consider home price appreciation in their purchase decision. For one, most people dramatically overestimate how much house prices will go up. When people start factoring in appreciation, they are usually just playing games with numbers to find some rationalization for an emotional decision they already made.

This neighborhood is crumbling

I have written many times about how the banks have withheld supply to artificially support prices. The neighborhood where today's featured property is located is a perfect example of what happens when the inventory gets too abundant for the available sellers to mop up.

This particular neighborhood within Oak Creek is north of Alton and adjacent to the shopping center. There are numerous three-story units and a mix of other product types. The prices for these units has been holding steady at $610,000 to $650,000 for the last 18 months. Since the expiration of the tax credits, very little has sold, and a few of the properties not mired in short-sale debt have been competing for the few remaining buyers.

The bank bought this property at auction in February, and they put in on the MLS in June. The have been steadily lowering their price, and they are still unable to find a buyer:

Date Event Price
Sep 29, 2010 Price Changed $500,000
Sep 02, 2010 Price Changed $555,000
Jul 29, 2010 Price Changed $595,000
Jun 22, 2010 Listed $625,000
Feb 16, 2010 Sold (Public Records)

This home was foreclosedForeclosure is a process that transfers the right of home ownership from the homeowner to the bank or lender. A home goes into foreclosure when the owner stops paying his mortgage loan payments. and bank-ownedShort for "real estate owned," REOs are foreclosed homes owned by banks and lenders..


Their first list price was reasonable for comps at the time. When they lowered the price below $600K, I imagine they where quite surprised the offers didn't come flooding in. Now they stand at $500,000. Where are the multiple offers over the ask? Why have they had to lower the prices 20% and they still haven't found a buyer?

The answer is simple: the tax credit pulled all the demand forward, and there are no buyers ready, willing, and able to pay the previous price equilibrium. I must admit, I am surprised by how far the banks and the flippers have had to lower prices to get out of these properties. When some of these properties close, the comps are going to be crushed, and a big drop will become reality.

Hat tip to Shevy for pointing out this neighborhood's activity.

A refi they will regret

The previous owner of today's featured property paid $695,000 on 6/28/2004. They used a $556,000 first mortgage and a $139,000 down payment. The wend into default in mid 2009, and the bank bought it at foreclosure for $617,971 which is the total of the note, missed payments, various fees, and so on — BTW, that means many of the bank losses I show are actually much larger.

The owners refinanced their first mortgage for $562,500 on 6/15/2007. They only took out $6,500 which probably covered their origination fees plus gave them a few dollars. The refinance cost them their non-recourse protections. When the bank finally disposes of the REO, they may go after this couple for the shortfall. The previous owners already lost $139,000 and their good credit, and later the bank may come back for another pound of flesh.

Irvine Home Address … 5 PERIWINKLE Irvine, CA 92618

Resale Home Price … $500,000

Home Purchase Price … $617,971

Home Purchase Date …. 2/16/10

Net Gain (Loss) ………. $(147,971)

Percent Change ………. -23.9%

Annual Appreciation … -31.4%

Cost of Ownership


$500,000 ………. Asking Price

$17,500 ………. 3.5% Down FHA Financing

4.25% …………… Mortgage Interest Rate

$482,500 ………. 30-Year Mortgage

$94,874 ………. Income Requirement

$2,374 ………. Monthly Mortgage Payment

$433 ………. Property Tax

$160 ………. Special Taxes and Levies (Mello Roos)

$42 ………. Homeowners Insurance

$43 ………. Homeowners Association Fees


$3,052 ………. Monthly Cash Outlays

-$375 ………. Tax Savings (% of Interest and Property Tax)

-$665 ………. Equity Hidden in Payment

$27 ………. Lost Income to Down Payment (net of taxes)

$63 ………. Maintenance and Replacement Reserves


$2,101 ………. Monthly Cost of Ownership

Cash Acquisition Demands


$5,000 ………. Furnishing and Move In @1%

$5,000 ………. Closing Costs @1%

$4,825 ………… Interest Points @1% of Loan

$17,500 ………. Down Payment


$32,325 ………. Total Cash Costs

$32,200 ………… Emergency Cash Reserves


$64,525 ………. Total Savings Needed

Property Details for 5 PERIWINKLE Irvine, CA 92618


Beds: 2

Baths: 3 baths

Home size: 1,750 sq ft

($286 / sq ft)

Lot Size: 2,000 sq ft

Year Built: 2001

Days on Market: 117

Listing Updated: 40457

MLS Number: U10002802

Property Type: Condominium, Residential

Community: Oak Creek

Tract: Othr


According to the listing agent, this listing is a bank owned (foreclosed) property.


37 thoughts on “The Perfect Storm Hits the Housing Market

  1. winstongator

    The other thing impacting how prices have changed recently in one city vs another is how far they fell. Sure San Diego is up 9% from this point 2009, but it is still 34% off peak, while Charlotte, while down 3% from 2009, is only down 14% from peak. Note how they put Tampa with Charlotte – Tampa is down 42% from peak.

    Also, the ability for foreclosures coming on the market to cause price declines is dependent on the foreclosure rate in an area, which is very geographically dependent. New foreclosure actions in CA are 1/178 units, while in NC it is only 1/984. This points to continued declines in the bubble regions.

    This is also a problem because every state has similar legal throughput capability for foreclosures, so the high foreclosure areas are swamped, and were also the areas with the weakest underwriting, either related to capacity to pay or collateral.

  2. lowrydr310


    Which part of the OC lifestyle, the $3,052 Monthly payment (for a 2BR)?


    1. gepetoh

      They’re not shouting, they’re just super enthusiastic about the house. Like those Car salesmen on TV on Sunday mornings.

  3. jimmyJ

    They aint making anymore land!!!!!!!!

    Buy NOW, and get priced IN FOREVER.

    I cant phathom how many marriages/relationships have been totally destroyed (or in the process of being destroyed) over this housing mess…

  4. Jiji

    Everyone working needs to get a 50% raise, and the Gov can’t figure out how to do it.

    That’s where we are.

    The real truth.

    1. Anonymous

      Re: “The Gov can’t figure out how to do it”
      Sure they can. It’s called “Quantivative Easing”.

      1. lowrydr310

        Unfortunately it’s not working out the way it’s supposed to. The top 10% are getting the 50% raise. The other 90% are getting salary cuts, no raises, or losing their jobs completely.

        1. mikeyD

          Huh? I am in the top 1% of income yet have not seen a raise in 3 years so that makes me part of “the other 90%”….I think your vision of reality is a bit, lets say…contradictory.

          1. Gray

            You must be doing something wrong. Statistics show you’re the seldom exception from the rule. What happened? No bonus for you, or did your specualtions turn out bad?

  5. Perspective

    “…Home price appreciation is not the great deal everyone thinks it is…”

    True, but this cuts both ways, no? Home price depreciation isn’t the horrible thing people think it is.

    If you financed < 2.5x your income to purchase a home and stuck to traditional standards and terms, it's not too big a deal when you hear that your neigbor's home sold for 10% less last week. Unfortunately, the conservative people are being screwed by their profligate neighbors. Always the way...

    1. Swiller

      ROFLMFAO!!! Conservatives are heroes. Wait, wait wait, you conservatives voted for all these people into office. Trickle down Theory is in FULL EFFECT!!! That was the god of conservatives…Ronald Reagan. Tax cuts for the RICH have never been better or kinder, yet these rich elite are just over-flowing with compassion to their fellow american by opening business’s in China and other countries that routinely employ human slave labor and degrade humans by denying them simple basic universal rights.

      Those conservatives sure are getting screwed! Two conservative wars, backing conservative oil companies, eradicating civil rights based on morals. Yup, those darn conservatives SUFFER under the heavy hand of liberalism.

      1. no worries

        Holy Crap Swiller.

        I believe she meant “conservative” as the word really means (cautious: avoiding excess), not as a political faction.

        1. Swiller

          Yes, sorry about the over-reaction, I’m just tired of all the political signs, comments, news radio’s, talk shows, etc etc. I’m not happy with the LIBERALS either, hence the reason I vote libertarian and not for either of the two major parties.

          If I see one more Scott Voight – CONSERVATIVE sign in Lake Forest, I think I’ll get out on vomit on it. Not too mention the fact this bozo is putting signs in places that are illegal

      2. Perspective

        Whoa… Yes, I definitely meant conservative “financially” speaking.

        After you’re finished ROFLMFAOing, it’s time to take your medication…

        1. Swiller

          Unlike most americans, I do not look down on people that require medication for mental issues. Would you mock and make fun of someone who is missing their limbs or colon?

          The arrogant attitude and superiority complex of americans, not too mention the pure hypocrisy, is remarkable.

          Perhaps to you, people with medical conditions that effect the mind and not the body are inferior to the so called “normal” people. Why?

          1. Perspective

            You’re right. We’re all equal. Nobody should be treated differently for any reason whatsoever.

            Oh, and we should all earn the same amount of money…

          2. Laura Louzader

            Thank you for this post.

            I have been close to people with crippling mental illness and have watched as a couple of them, very dear people, committed suicide. One of them managed to kill herself piece by piece over a number of years.

            Our attitudes toward mental illness are appallingly medieval and punitive.

            Severe mental illness seems to be congenital, and there is nothing in the world that blights a person’s life more. You might be able to cope with a serious physical handicap if your brain is intact, but what do you do when your mental hard wiring was hopelessly tangled at birth? This is the case with those who suffer the most crippling forms of mental illness.

            It is horrible to see these people, such a small subset of the population, let to be beaten, raped, and starve on the streets while we dispense mucho welfare of every sort to almost every other population in this country. There was a time when these people were at least cared for in a minimal way, but a country bent on subsidizing every middle class indulgence, not to mention supporting a lower class of welfare dependents who are perfectly capable of working, and our Corporate Welfare class, has no money left for these people who truly cannot take care of themselves.

  6. Anonymous

    Interestingly, the whole foreclosure HELOC mess doesn’t seem to have hurt the IUSD scores at all – in fact they went up. Higher than Palos Verdes now.

    IUSD posts an API score of 916, moves to the top of the list of state’s large school districts

    If you look at the other top district (San Ramon Valley Unified near San Francisco) in Redfin, the house prices look just as elevated as Irvine!lat=37.81265702510516&long=-121.99171140511459&market=sanfrancisco&region_id=39176&region_type=2&sf=1,2&uipt=3,2,1&v=6&zoomLevel=15

    I guess you get what you pay for.

  7. FreedomCM

    I’m still, after all these years, unbelieving that anyone can think the “way below comp” price of $500k for this 2br with dirty carpets and pergo, where you don’t own the land individually, is a deal.

    If you make $100k, you are probably taking home $5k/month. Then you pay your $2800 plus a $200 hoa/month (that may go up as more co-residents default) for the privilege of going up and down three flights?

    its going to be irrational longer than I care to wait.

    1. AZDavidPhx

      You are assuming a single income household. The way these folks stretch it is by having two people slave away to pay for it and gamble that the next 30 years will be bigger than the present.

  8. Ren

    The typical “blame the homeowner” BS that the banks are pushing and you spout in your post ignores the fact that a significant number of people who have been foreclosed on have been victims of outright fraud from the banks.


    The banks have royally f-upped the system in their pursuit of enriching themselves and screwing over the rest of the country. Not sure how letting them steal property they don’t own will fix the problem.

    1. gepetoh

      Those cases are few and far in between, even the article acknowledges that MOST foreclosures are due to payment delinquencies. To NOT blame the homeowners categorically based on what will likely amount to 1 in several thousand cases would be to grossly misstate where the fault lies. Fact of the matter is that many parties brought this on themselves, INCLUDING the homeowners. Blaming them is not BS, to NOT blame them would be.

      1. Gray

        The point is to balme BOTH sides. The squatter which live rent free without paying a buck for their mortgages, and the banks who totally screwed up the legal process by engaging in illegal shortcuts, just to save a few bucks. This whole system has to be overhauled, and brought back to the proper proceedings that were in place before deregulation and MERS made a mess of it!

    2. JDSoCal

      What a dopey claim. 99.99% of these people were properly defaulted on. Stop with the inductive, anecdotal onsense.

  9. phil

    “The owners refinanced their first mortgage for $562,500 on 6/15/2007. They only took out $6,500 which probably covered their origination fees plus gave them a few dollars. The refinance cost them their non-recourse protections. When the bank finally disposes of the REO, they may go after this couple for the shortfall. The previous owners already lost $139,000 and their good credit, and later the bank may come back for another pound of flesh.”

    I thought the one-action rule would still protect these people despite losing the purchase money protection?

  10. Jerry

    Irvine renter,

    how do you expect the price in 2011, 2012,2013 and so on?

    I saw your prediction was pretty close in 2007. As everyone talking about inflation, will that make the home price much higher if we have 10% inflation per year?

  11. ozajh

    “When some of these properties close, the comps are going to be crushed”

    But are these sales going to be included in the comps??

    (I have heard on various blogs that more and more categories of forced sales are being excluded from the calculations.)

  12. theyenguy

    Tyler Durden reports news in the linked Zero Hedge article that Fitch Places Bank Of America, All US Banks On Rating Watch Negative.

    I believe that the Financial Regulator, that is the Secretary of the US Treasury, as having broad discretionary authority under the Dodd-Frank Legislation, will one day soon, call for leasing of REO and shadow inventory properties as a solution to the large number of people living payment free in mortgaged property, and as a banking quagmire and deflationary economic collapse emerges.

    Furthermore, I see the day coming very soon where a liquidity crisis will occur in the stock and bond markets, and then soon thereafter the US Government will be the sole provider of credit to America; and that credit will be primarily for the strategic needs of the North American Governments, including Canada and Mexico.

  13. Gray

    “All the nonsense about improper foreclosures seems to miss one basic point: the people being foreclosed on are not paying their mortgage.”

    No, imho the basic point is that only the REAL owner of the mortgage has the legal right to foreclosure! Those banks who fraudulently foreclosure homes STEAL the property from the real owners. There’s no way to ethically defend this. That some house owners now exploit the illegal shortcuts taken by the banks as a way for delaying their eviction even longer is morally questionable, too, of course. But this still doesn’t justify the behaviour of the banks. There are lots of crooks on both sides, that’s the issue. And who’s gonna tell which side has the more dirty hands?

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