This whole scheme of "Deficiency Payments" years after a foreclosure is wrong. Didn't we have the government bail the banks out? WAIT.. no we didn't. That was all smoke and mirrors. I called it then. IT will never amount to anything. This is a balance sheet move.

 

 This isn't even possibly a source of funds. These deals are unrecoverable. This is designed to prop up a balance sheet. Even with a deep discount there is a substantial "asset" to show. What concerns me is that they are doing this at all. How deep is the problem in the banks anyway. And Paul.. yes kinda. It should have been a way to meliorate the "Troubled assets" these foreclosures were. Here's the real question, if you were an investor and you wanted to buy the loan from the bank in the story... how much would you pay them? The hundred grand they are trying to get from a day laborer who has zero assets. What's that loan worth? ZIP! BUT on a balance sheet... it has value. That concerns me. I work with banks in my consulting in deals like this all the time.. unfortunately it means I know too much.

Lenders seek court actions against homeowners years after foreclosure

www.washingtonpost.com

In a shock to many former owners, collectors can pursue the ‘underwater amount’ of mortgage, plus interest.