“Mish” Shedlock: California’s 90-Day Foreclosure Moratorium Will Accomplish Nothing… Supporters Disagree.
Today, the State of California imposes a 90-day moratorium on housing foreclosures under a controversial new law that many say, with the school year having ended and summer already upon us, has been put into place just in the nick of time. Others, however, are convinced that the new law is ill conceived and will accomplish nothing.
For example, Mike “Mish” Shedlock, a very well respected investment advisor who delivers economic analysis to tens of thousands through his well-known blog, Global Economic Analysis, says “this bill is no more likely to work than a bill declaring poverty to be illegal or the sky to be green.”
According to Mish:
“Home prices will bottom when they bottom, unemployment will bottom when it bottoms, and foreclosures will stop when they stop. Those are simple economic facts. The 90-day extension gives anyone sitting on the edge of walking away, as well as those wanting a reduction in principle, an incentive to stop paying their mortgage, safe and secure in the fact they cannot be thrown out of their house for another 90 days. This bill is pure idiocy and will not stop a single foreclosure. Instead, the bill will increase late pays and foreclosures. It’s an exercise of sheer stupidity.”
Others disagree completely. After reading what Mish had to say about the new law, Southern California surf legend, The Duke Vuarnet said: “Dude, just relax. You’re going to blow out your squeaker.”
“It’s a very righteous law,” says The Duke. “Summer’s here and Californians are tired of thinking about how they’re gonna’ come up with the Dead Presidents they need to stop a foreclosure. All they want is some cool waves and some tasty buds. It’s summertime bro’. You’ve got to have your priorities in order.”
Still, many in Sacramento acknowledge that the California Foreclosure Prevention Act won’t stop thousands of foreclosures from eventually happening. Since 2007, there have been more than 365,000 foreclosures in California, with many more on the horizon. Under the new law, lenders are prohibited from foreclosing on a property unless they can prove that they tried to modify the delinquent loan before foreclosing.
“Enough, Dude,” replies The Duke. “You’re starting to ruin my morning buzz. Look, 90 days from now we can all get back to being office-white and wrapped up in our economic problems, but right now, I’m headed to the ‘Bu’ (read: Malibu) where you’ll find me hangin’ at the shack and hangin’ ten out front.”
One California elected official, who asked not to be named in this article, said The Duke actually has the right take on this issue. “You have to understand, this is California in the summertime. The legislature recognizes that stopping foreclosures is important to the state’s economy and all, but that’s no reason to miss an entire summer getting tubular. The rest of the country might not understand how things are out here, but for those that remain core, this law is welcome relief.”
Bucky Moore, who is known to legions of surf groupies as “BM3,” and is the lead singer/piano player for the Balboa Blues Band, says he likes the new law well enough, but thinks it could have gone further to protect the state’s traditional summertime surfin’ safari. “I think it’s cool,” Bucky says. “But what’s up with it being only 90 days? Couldn’t they have made it cover all three months? Summer’s a lot longer than 90 days you know.”
To those who say the new law won’t accomplish anything, Greg Waddell, or G-Money to his buds in the surf club known as The Soggy Bottom Boyz, says it can’t fail. “How can it not accomplish what it’s intended to do?” says Money. “Our elected officials wanted to pass a law that would ensure that people who are going to lose their homes, don’t lose their summer at the beach too. How can that be a bad thing?”
Personally, I didn’t see the point of the new law initially, and was ready to agree with Mish that the law is beyond useless, but I have to say that I’ve come around to the surfer’s point of view.
My reasons are simple, but I do understand how some may not see the intent of the law as clearly as others. Perhaps if everybody had an ocean, across the USA. Then everybody would be surfin’, the California way. You’d see them wearing their baggies… Huarachi sandals too… tell the banks we’re surfin’… and they’ll just have to let our late payments accrue.
Fair enough? Alrighty then. Surf’s up, Dude!