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  1. #1
    Senior Member AirborneSapper7's Avatar
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    I-Banks the Newest Breed of Slumlord

    I-Banks the Newest Breed of Slumlord

    Monday, March 10, 2008 5:30 p.m. EDT

    The cost of maintaining foreclosed properties abandoned by lenders and investors may reach as much as $50 billion this year – and taxpayers will foot the bill.

    By walking away from the properties on which they have foreclosed, lenders are forcing local governments to assume their responsibilities, making investment banks the newest breed of slumlord, says Peter Sepp, vice president of the National Taxpayers Union

    For instance, Boston taxpayers spent $10,120 last year maintaining just one abandoned, foreclosed condominium on Hendry Street.

    According to public records, one of the three apartments belongs to Morgan Stanley. Another one belongs to Lone Star Funds, a Dallas leveraged buyout firm.

    Unfortunately, determining precisely who owns defaulted mortgages — and is therefore responsible for the foreclosed property — is proving difficult. That’s because mortgage notes put in securitization pools typically appear as data transfers rather than actual legal transfers.
    If the mortgage note in question has not been legally transferred and assigned to the securitization trust, there is no legal standing to foreclose, a problem that has led judges in five states to halt foreclosure proceedings.

    Consequently, as foreclosures increase and the value of property subsequently drops more companies are simply walking away from their responsibilities to take care of foreclosed properties.

    That leaves cities and towns – and their taxpaying residents – holding the bag, just as tax revenues, which are based on property values, begin to drop, too.

    Since every foreclosed reduces the worth of surrounding properties, the increase in foreclosures and the decline in real estate values may lower the tax base for cities and towns by as much as $356 billion in 2008 and 2009.

    Almost 1 million U.S. homes were seized last year, the highest ever and more than double the number seized in 2006, according to foreclosure data company RealtyTrac. Mark Zandi of Economy.com estimates another 1 million will be foreclosed upon this year.

    Federal Deposit Corporation figures show that U.S. banks owned $12.1 billion of foreclosed real estate at the end of last year, double the year-earlier amount.

    "Our kids and our grandkids are going to be paying to take care of these properties, because the cost, at least at the federal level, will have to have to be financed through borrowing,â€
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  2. #2
    Senior Member azwreath's Avatar
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    It's too bad that the next step can't be holding the builders and developers responsible for maintaining these properties. Let them pay for their part.....their very big part.....in creating this fiasco.
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  3. #3
    Senior Member tencz57's Avatar
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    I don't know much bout High end Big Finance . But thinking bout this problem . I don't think THEY do either !
    Now WHY should the taxpayer be bailing those crooks out ? Some one explain this to me please . They Re-pro a House it's on there books not mine. It's there lost not mine . I'm Fed-up with Dubya & Corp America
    Nam vet 1967/1970 Skull & Bones can KMA .Bless our Brothers that gave their all ..It also gives me the right to Vote for Chuck Baldwin 2008 POTUS . NOW or never*
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