What do the statistics tell us about the big picture for our economy now?
That there will be more bankruptcies in Detroit, and everywhere else in Michigan, and the U.S.
Foreclosure sales are declining, but in judicial foreclosure states, which Michigan is not, and one third of the homes in foreclosure in those states are more than two YEARS behind in payments.
And foreclosures in the judicial foreclosure states have increased twice as fast as the non-judicial states in the last year.
The scariest sentence in the story on mortgage servicer LPS statistics:
“Overall, when compared to historical norms, delinquencies are almost double, and foreclosures are eight times higher.”
More foreclosures, more homes for sale, depressing prices further, more homes underwater, more foreclosures, the vicious circle continues, leading to more bankruptcies.
Although, if your home is worth less than what is owed on the first mortgage, you can file Chapter 13 bankruptcy and get rid of that second mortgage, which is good for homeowners.
Those stuck with the securities stuffed with bad mortgages are starting to sue for, of course, fraud, and getting some recoveries.
Regions Financial investors lost $1.5 billion in five mutual funds it sold, some as investment grade debt, but filled with crap mortgages.
They settled the mortgage fraud claims for $210 million.
Sounds like $1.3 billion still missing.
Business Week has a story on, and had the debt discharged.
If this happens to you, I can help if you cannot get your bankruptcy lawyer to handle it.
What happens is, bottom feeding debt buying companies buy bad debts by the thousands.
No paperwork, just a computer screen, stating how much you owe and maybe a couple other things.
They could “scrub” the accounts, checking for bankruptcy filings, but, hey, that cost money.
Of course, debts discharged in bankruptcy do not exist and should not have been bought and sold to begin with.