The other month I attended a foreclosure auction on the steps of a Maryland courthouse. The property, a small townhouse just over 4 years old had been vacated by the owner who just handed his keys in & walked away. The original mortgage holder, Countrywide, was then stuck with the original cost of the home, the missed interest payments, and all legal fees etc.
Meanwhile, Countrywide had gone out of business and was acquired by Bank of America. A recipient of $45 billion in taxpayer TARP funds which it has since paid back with low-interest loans from the same government but which come with far fewer strings attached -" a slight of hand that appears to go over the heads of our "lamestream' media.
Anyway, it was fascinating to watch the foreclosure auction as the bids went up to well over the fair market price of the property and local first-home buyers were effectively locked out of the process.
A couple of weeks later I decided to do a little investigating & asked the Clerk of the Courts to see the documentation & follow the details of the foreclosure process.
(flickr image by BasicGov
The original purchase price paid by the first owner was $212,900, including a mortgage for $170,000. By the time the owner was in default in June of 2009 the outstanding balance owed was still $168,501. By July 2010 this had racked up to $189,993 including missing interest payments, Escrow debits, and unspecified but very lucrative 'corporate advances'.
Now remember, this property may have been owned by Bank of America but that is basically YOU, the taxpayer. They put the home up for auction and not only got all their original loan back, they got enough money to cover all the missed mortgage payments, all their legal fees and made about $20,000 on the original deal!
"Well, isn't that good news for the bank, and ultimately us the taxpayer?' I hear you say. Not so fast folks -" the winning bid that paid well over the current market price for this home & effectively locked out local people who wanted to get a foot on the property ladder was non other than Freddie Mac -" the government-owned (read taxpayer-funded ) mortgage quango which with its twin Fannie Mae looks like costing us about $154 billion before the current crisis is over.
Months later the property remains empty & deteriorating, despite local people who if it wasn't for this government-funded racket could have moved into a home of their own
Months after the foreclosure auction and a check with the County Property Assessments Office reveals that the taxes are up to date but still in the name of the previous owner, now living at a new address. The name of the real new owner, Federal National Mortgage Association, appears nowhere.
You've got to hand it to our financial elites, when it come to screwing taxpayers like you and me they are in a class of their own but isn't the symmetry of it all just wonderful?