You want stimulus? Well, how ’bout the chance to go almost 15 months without a house payment?
Thanks to cottony-soft (and FedGov encouraged) accounting standards, banks are loathe to foreclose on underwater properties. As a bank, realizing five- and six-digit losses is no fun. It tends to leave ouchies on your balance sheet, and more importantly, has a negative effect on management bonuses.
Cause, meet effect:
Four hundred days with no house payment? A fellow could save up quite a stash in his piggy bank, going that long without sending a check to the mortgage company.
In any case, that tantalizing little snippet comes from an article at AmericanBanker.com.
And speaking of homeowner savings, just imagine all the dutiful home care and maintenance being performed by all these “living free for now” borrowers — borrowers who know that one day the bank will be coming to throw their La-Z-Boy on the lawn and Master Lock all the doors. The question isn’t if, but when.
Oh, I’m sure that leaky roof will get fixed. Any day now.
Yes, indeed. Delaying foreclosures (most econ-types refer to it as “extend and pretend”) with schemes like relaxed accounting standards and FedGov-initiated can-kickings (HAMP much?) should work out just fine.