Wednesday, January 13, 2010

Foreclosures down? Don't bet on it

So the recent news is foreclosures are down in California, one of the bubble markets hurt worst by the collapse of the bubble. But is that good news? Well, not really.

The primary reason why foreclosures are down is because even though California is a civil foreclosure state, foreclosure actions are clogging up the legal system. Lenders' lawyers simply can't process foreclosures fast enough to clear them, local sheriffs can't hold sheriffs' sales fast enough, once foreclosures happen the unlawful detainer actions needed to evict the residents are taking up to six months to happen because there aren't enough process servers and skip tracers to track down and serve the former owners of the home, and even after the unlawful detainer notice is served, I notice on the Stanislaus County Superior Court docket that unlawful detainers filed in December have their case management conferences scheduled for March or April. Quite frankly, the whole system is completely clogged up in a way that hasn't happened since the Great Depression, it was not built for this sort of volume and it doesn't help that the Governator has judges working four-day weeks in order to save money, that's caused a backlog in all cases. In one case I have personal knowledge of, the lawsuit was filed in July, the summons was served in December, and the case management conference is in March! That's just plain nuts, no so-called "justice" system can operate like that and still be credible.

We could have had a "Day Zero" reset of the entire mortgage market -- basically, reset all mortgages to current market rates with freshly printed Fed money monetizing the difference -- but that would have "rewarded misbehavior" and thus been "wrong". So clogging up the entire legal system with this bullshit so that people can't handle their normal legal business in a timely manner is wrong? I pity landlords with deadbeat tenants, they can't even get the deadbeats out of their properties so they can rent to non-deadbeats because unlawful detainers are taking six months! If that isn't "rewarding misbehavior", I don't know what the fuck is... but deal is, not only is it rewarding misbehavior (deadbeat tenants who don't leave once lawfully evicted with 30 days notice), it's also punishing the innocent! At least monetizing the bubble would have not punished the innocent.

But whoa, I keep forgetting, America is all about lose-lose propositions. If everybody doesn't lose, then it's bad. That's our whole approach to *any* societal problem in America today, find a solution where everybody loses, because if someone wins, that person is "unfairly" benefiting from the solution. Siiiiiiigh! What a spiteful vicious buncha motherfuckers we Americans are, eh?

-- Badtux the Housing Penguin


  1. I like your "Day Zero" reset idea, 'Tux, it's definitely outside-the-buns thinking. And no one can fairly accuse the bastards who perpetrated this mess of being sane, 'cuz clearly they're not.

    I guess lose/lose becomes the norm when everyone knows the country is heading into the crapper and they just want to get it over with.

  2. And lose/lose creates so many "winners" of their debts?

    Thanks for the reporting.


  3. BT
    Once had my corp lawyer tell me that the only equitable outcome in a business transaction gone bad enough to involve lawyers was with both parties upset with the outcome. His reasoning was as follows:
    1. If one side is happy then there is not equality.
    2. If both sides are happy then lawyers were not needed for the negotiation.
    3. Therefore both side needed to be unhappy with the results.
    He was logically correct.
    So it strikes me that we maybe shouldn't have built and run a legal system and a country that creates inequities at most every level. Or maybe that's human nature and we're all just fucked.

  4. On the other hand, I've seen situations where the threat of lawyers -- indeed, just a letter on a lawyer's letterhead -- was enough to break one side or another away from being a total intransigent dunderhead and be willing to negotiate and find a solution that made everybody happy.

    I'm sure that the *lawyers* prefer lose-lose situations, since that's what gets them the biggest fees, just as Republicans prefer lose-lose situations, since Republicans are all losers anyhow (their whole philosophy is based upon the notion that everybody is losers, just some are bigger losers than others) and this brings everybody else down to their level. But what lawyers prefer, and what actually happens in reality, are often two different things.

    - Badtux the Law Penguin

  5. The creation of inequities at all levels is a result of deregulation. Regulations were put into place because of the lessons learned in the Great Depression.

    But, since the 80's this country has been drinking Reagan/Friedman (Milton, not Tom the ass-hole)/Greenspan/Ron Paul deregulation Koolaide.

    In words of one syllable: We are SO fucked.


  6. As I understand it you rent so it shouldn't be any big deal to you.

  7. So let me get this straight. If shit is going fuck-all to hell in this country, as long as I got mine, I shouldn't be nattering about it? Dude. You're so fucking egocentric that you ought to be the poster child for the Wikipedia entry on the topic. So if it doesn't affect you, you don't give a shit? Well fuck you too, asswipe.

    - Badtux the Gives-a-shit Penguin


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