Tip:
Highlight text to annotate it
X
>> ALL RIGHT.
PEOPLE SAID IT COULD HAPPEN AND
APPARENTLY IT IS.
IN CERTAIN PARTS OF AMERICA.
HOME OWNERS WHO ARE ABLE TO PAY
THEIR MORTGAGE, BUT PURPOSELY
MISSING MORTGAGE PAYMENTS,
TRYING TO MAYBE GET A LITTLE BIT
OF THAT BAILOUT MONEY OR FORCE A
MORTGAGE RESTRUCTURING.
LET'S TALK MORE ABOUT IT WITH
GEORGE, THE REAL ESTATE
PROFESSOR AND RISK MEDIA.COM
COLUMBIAIST.
GEORGE WELCOME TO FOX BUSINESS.
IS THIS REALLY HAPPENING?
>> WELL, GOOD MORNING, BRIAN,
THANK YOU.
I WASN'T SURE AND THAT'S WHY I
WROTE AN ARTICLE SORT OF POSING
THE QUESTION.
ARE PEOPLE DELIBERATELY
WITHHOLDING THEIR MORTGAGE
PAYMENTS.
BUT THE STORY TIPS BECAUSE I'VE
HAD SEVERAL RESPONSES TO THAT
ARTICLE, SOME COMING IN AS
RECENTLY AS YESTERDAY.
PEOPLE TELLING ME THAT'S OUR
SITUATION, THAT'S WHAT WE'RE
WONDERING ABOUT, I HEARD FROM A
LOT OF REAL ESTATE AND MORTGAGE
PRACTITIONERS WHO TELL ME THAT
THAT'S THE NUMBER ONE QUESTION
THAT PEOPLE ARE ASKING THEM
TODAY, WHAT WOULD BE THE
CONSEQUENCES IF WE SKIPPED A
MORTGAGE PAYMENT OR TWO OR
THREE, AT WHAT POINT WOULD IT
REALLY BECOME PROBLEMATIC FOR
US?
I EVEN GOT AN E-MAIL FROM AN
INDIVIDUAL WHO IS PURPORTING TO
START A SOCIAL MEDIA WEBSITE IN
WHICH HE WOULD HAVE PRO BONO
ATTORNEYS AT THE READY TO HELP
HOME OWNERS WHO SIDE THAT
THEY'RE SIMPLY GOING TO WITHHOLD
THEIR MORTGAGE PAYMENTS AND WAIT
AND SEE WHAT HAPPENS TO THE
ECONOMY.
>> I MEAN, YOU KNOW, YOU HEAR
ABOUT IT AND YOU SEE--
AND PEOPLE OF COURSE, WHEN THE
BAILOUT HAPPENS, EVERYBODY IS
ANGRY AND THEY'RE MARCHING
AROUND SAYING I'M NOT GOING TO
PAY MY MORTGAGE AND YOU THINK
ABOUT THE CREDIT IMPLICATIONS
AND YOU KNOW, CAN YOU REALLY GET
THIS DN, BECAUSE THE GOVERNMENT
AS THEY COME IN THE BANKS, THEY
ARE GOING TO SAY, HEY,
MR. SMITH, YOU KNOW, YOU MAKE
PLENTY OF MONEY, PAY YOUR
MORTGAGE AND BY THE WAY YOU OWE
US INTEREST ON THE LATE
PAYMENTS.
>> WELL, AND THAT MAY VERY WELL
HAPPEN.
I THINK WHAT'S DRIVING THIS IS A
HIGH LEVEL OF UNCERTAINTY, IF
YOU'RE EMPLOYED TODAY, YOU
REALLY DON'T KNOW FOR SURE
YOU'RE GOING TO HAVE A JOB
TOMORROW.
PEOPLE HAVE START TODAY THINK
ABOUT THE BASICS, WHAT DO WE
REALLY NEED IF WE HAVE TO GO
SEVERAL MONTHS WITHOUT INCOME.
BUT WHAT REALLY STARTED MY
RESEARCH INTO THIS, IS I WAS IN
THE PROCESS OF COLLECTING
INFORMATION TO WRITE AN ARTICLE
HOW THE SAN DIEGO COUNTY
MARKETPLACE WAS SHOWING SIGNS IT
WAS ABOUT READY TO IMPROVE.
AND STABILIZE AND MAYBE SEE SOME
RETURN TO VALUE.
AND WHAT REALLY GOT MY ATTENTION
WAS WHEN I STARTED TO LOOK AT
THE FORECLOSURES.
THIS IS PUBLIC RECORD
INFORMATION IN THE TAX ROLES,
THEY'RE DIVIDED UP ACCORDING TO
PRE-FORECLOSURE AUCTION, THOSE
PROPERTIES THAT ARE ACTUALLY
GOING TO SALE, AND THEN BANK
OWNED PROPERTIES WHICH HAVE
ALREADY BEEN FORECLOSED ON, AND
I WAS VERY SURPRISED WHEN I
LOOKED AT COMMUNITIES THAT HAD
BEEN SELLING NEW HOMES IN 2005,
2006, 2007, REALLY BEFORE THE
CRASH CAME, AND I THOUGHT THESE
WOULD BE AREAS WHERE THEY WOULD
BE A LOT OF PRE-FORECLOSURES, A
LOT OF BANK OWNED PROPERTIES AND
I WAS REALLY SURPRISED TO
DISCOVER THAT THERE WERE VERY
FEW PROPERTIES CLOSE TO THE
AUCTION STAGE.
VERY FEW PROPERTIES THAT WERE
ALREADY BANK-OWNED AND IT ALSO
OCCURRED TO ME THAT BANKS
THEMSELVES MIGHT BE WITHHOLDING
NOT FILING ORIGINAL NOTICES OF
DEFAULT SO AS NOT TO ALERT
REGULATORS TO THE TRUE NATURE OF
THE PROBLEM.
SO, IT BECOMES THE GREAT UNKNOWN
IN WHETHER OR NOT WE'RE ABOUT TO
EXPERIENCE A RECOVERY.
WE DON'T KNOW THE DEPTH OF THE
FORECLOSURE PROBLEM.
>> Brian: AND GEORGE, KEEP ON
IT AND COME BACK SOON.
I TELL YOU WHAT, YOU LOOK AT
STATES LIKE ARIZONA ONE OF THE
HIGHEST FORECLOSURE RATES IN
AMERICA, BUT THEY'RE NOT AT THE
TOP OF THE UNEMPLOYMENT LIST.
YOU KNOW, SO JOB LOSS AND
FORECLOSURES GO HAND IN HANDMENT
IF A STATE'S GOT A DECENT JOB
MARKET AND SUPER HIGH
FORECLOSURES, SOMETHING IS
FISHY.
GEORGE--
>> WELL, BUT.
>> Brian: FINISH, WE'VE GOT TO
BAIL.
>> I WAS GOING TO SAY WE DON'T
REALLY KNOW AND THAT'S THE
PROBLEM WE DON'T KNOW THE DEPTH
OF THIS UNTIL WE SEE THE
RECORDINGS COME ON-LINE.
>> Brian: ALL RIGHT.
HEY, THAT WAS QUICK.
REAL ESTATE PROFESSOR, AUTHOR