Several banks have announced a temporary stop of home foreclosures. Mind you, only until 3/6. The wild fire of the wild foreclosures have gone unabated for more than a year. The old intent of foreclosure was to repossess a property on which a mortgage stopped being paid. The bank would sell the property, sometime with some lose, and recoup its mortgage loan. Foreclosure also served as a lesson to irresponsible buyers that non payment has consequences.
The original intend of foreclosures became invalid in today's economy. Banks cannot sell the repossessed property, in most cases, and the property loses value and integrity with time. Thus we have neighborhoods in which way too many properties are shuttered; these neighborhood become less desirable lowering even further the value of the banks property. Cut their noses to spite their faces, that is the new banks policy. For genius decision, bank managers are rewarded by million dollar bonuses.
The second part of foreclosure intend is to teach borrower responsibility. This one is a real joke. As it turns out, the irresponsible party in this case is the bank. I wonder how do we teach them a lesson?
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