Thursday, November 21, 2024
Hawai'i Free Press

Current Articles | Archives

Monday, September 26, 2016
Hawaii #1 State for long-term delinquent mortgage squatting
By Selected News Articles @ 11:25 PM :: 5566 Views :: Hawaii Statistics, Cost of Living

Top 10 states for long-term delinquent mortgage squatting

HAWAII TOPS THE LIST OF THE STATES WITH THE HIGHEST PERCENTAGE OF BORROWERS WHO REFUSE TO PAY THEIR MORTGAGES FOR THREE YEARS OR MORE. A FREE HOUSE IN HAWAII HANDSOMELY REWARDS BAD BEHAVIOR, DOESN’T IT?

by Larry Roberts, OC Housing News, September 23, 2016 (excerpt)

Millions of Americans borrowed money under unstable loan terms during the housing mania of the 00s. When these loans reset or recast to higher payments, millions of borrowers stopped paying, which precipitated the 2008 recession, causing millions more to stop paying their mortgages. The downward spiral lead to over six million foreclosures nationally.

Once these borrowers failed to make payments, banks foreclosed on them — at least at first. By late 2008, it became apparent that foreclosing on all these delinquent loans at once and reselling the properties on the open market would push prices down so far that lenders wouldn’t recover their original loan capital. Lenders responded by offering loan modifications, but many borrowers refused to pay even with more generous terms. Since lenders weren’t in a position to foreclose, and since borrowers refused to pay, millions of borrowers simply lived in the property without paying anything: they became delinquent mortgage squatters.

When faced with the prospect of living without any housing costs indefinitely or moving out to a less-comfortable rental and spending money on housing, it should surprise no one that many people chose to squat and live for free. The lingering uncertainty as to when the lender would eventually foreclose causes people emotional distress, but eliminating a monthly bill that consumes 30% to 50% of a family’s income more than makes up for it.

Most borrowers in default don’t move into a rental and move on with their lives. Those borrowers game the system for as long as possible to obtain free housing. These delinquent mortgage squatters are the legacy of stupid lending in The Great Housing Bubble.

Top 10 states for long-term delinquent mortgage squatting

So how bad is this problem? Are we talking about a few isolated cases, or is this a systemic rot? Last year I reported that 362,000 American delinquent mortgage squatters refuse loan modifications. These are the most hardcore. Black Knight reports that 2,836,000 borrowers are 30 days or more behind on their mortgages.

When Edward DeMarco ran the GSEs for the FHFA, he foreclosed on delinquent borrowers, so very few delinquent squatters’ loans pollute the residential mortgage-backed securities of agency loans. The private-label RMBSs are a different story. These loans reside on the books of investors and major banks, and this is where mortgage squatters find safe haven because the values of their properties haven’t risen enough for lenders to foreclose and recover their capital.

Keith Jurow provided me the chart below showing this is not an isolated problem.

shocking-new-stats

Borrowers in Hawaii who refuse to pay their mortgages enjoy a free Hawaiian vacation. A shocking 76% of delinquent mortgage squatters enjoyed a free house for more than three years, 61% enjoyed a free house for more than five years. Wouldn’t you appreciate a free Hawaiian house in perpetuity? I would. In fact, I would list the property on AirBnB and travel the world while someone else pays to rent my free house….

read … Squatters

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

MentalIllnessPolicy.org

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii

Obookiah

OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

RailRipoff.com

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

SenatorFong.com

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii