Reply #4: The only winners in a foreclosure are the vultures. [View All]

But all your plan does is make foreclosure slightly more expensive to the mortgage issuer.

So an investor should just foreclose, leaving properties sit empty indefinitely because he/she/they/it feels like it?

No, banks don't foreclose because they "feel like it." They foreclose when payments on the mortgage are not met. So to avoid foreclosure a way of ensuring the payments are met must be found. This could mean restructuring, or it could mean direct aid of some form to those facing foreclosure. Unfortunately, there's little way of restructuring a lot of the bad subprime loans because there's simply no way of making the house affordable on the salary of the owner. That's a huge part of the problem, and nothing you've said changes that. Again, foreclosure is VERY expensive for the lending institution, and all your idea does is make it slightly more expensive.

It might provide some incentive to negotiate a sensible solution

I am all for trying to prevent foreclosures, but I'd favor direct assistance to those facing foreclosure, rather than this roundabout route.


And yes, I'd apply it to the buyer of a foreclosed property which sits empty just the same. It's just like "late fees", just the cost of doing business in that context.


Why in the name of a crippled, half-mad Jesus would I buy a foreclosed property if I was going to have to pay a ridiculous $5000 per month fine? What you're suggesting would simply destroy the market for foreclosed properties. Given that it's difficult to impossible even for people with good credit to get a mortgage right now, this simply exacerbates the situation and drives down the value of property further. Your suggestions would actually make the situation worse, not better.