Government to Sue Banks - Peter Schiff

Housing Shocker: Home Prices Still Falling - MarketBeat - WSJ

The housing double dip is official: US home prices fell in the first quarter to a new recession low, according to the latest S&P/Case-Shiller price index.

“This month’s report is marked by the confirmation of a double-dip in home prices across much of the nation,” said David Blitzer, chairman of S&P’s index committee. “The National Index fell 4.2% over the first quarter alone, and is down 5.1% compared to its year-ago level. Home prices continue on their downward spiral with no relief in sight,” he added.

As we’re all about silver linings here, we’ll note that the Case-Shiller 20-city price index was down 0.8% in March, slightly better than expectations of a 1% decline. So, yay.

This news is not shocking, in any event. Stock-market futures have responded by adding to their gains. Dow futures are up 108 points, S&P up 12 points. Ten-year Treasury yields are unchanged at 3.09%.

Update: The folks at Capital Economics write in with this gloomy tidbit: “The further fall in house prices in the first quarter means that, on the Case-Shiller index, prices have now fallen by more than they did during the Great Depression.”

By their calculations, prices are now down 33% from their 2006 peak, compared with the 31% decline during the Depression.

“The remarkable thing about this downturn is that even though prices have fallen by more than in the Great Depression, the bottom has yet to be reached. We think that prices will fall by at least a further 3% this year, and perhaps even further next year.”

WSJ: 107 Months to Clear Banks’ Housing Backlog

According to Helicopter Ben the recession was officially over in May 2009 but if that is true then how come  we have almost 9 years of housing inventory that needs to be sold by the bailed out banks.

Number of the Week: 107 Months to Clear Banks’ Housing Backlog

By Mark Whitehouse

107: How many months it would take to sell banks’ current and shadow inventory of foreclosed homes.

Banks’ vast pile of foreclosed homes doesn’t appear to be diminishing. That’s a troubling sign for the future of the housing market.

Back in April, this column tallied up all the foreclosed homes sitting in banks’ inventory, as well as the “shadow” inventory of homes in the foreclosure process or on which owners had missed at least two mortgage payments. At the time, we reported that at the current rate of sales, it would take 103 months to unload it all.

Over the past six months, that number has actually risen. Banks managed to pare down the shadow inventory, but largely by taking possession of foreclosed homes. As of September, they owned nearly 994,000 foreclosed homes, up 21% from a year earlier. The shadow inventory stood at 5.2 million homes, down 7% from a year earlier. Grand total: 107 months of inventory.

The numbers aren’t exactly comparable to the April analysis, as the providers of data have changed. The inventory data now come from RealtyTrac, the shadow inventory data from LPS Applied Analytics, and the sales data from Core Logic. But no matter how you slice it, the housing market faces almost nine years of foreclosure hangover.

Over the summer, banks appeared to be making some headway. The government’s mortgage-modification program helped some people get current on their payments, taking their homes out of the foreclosure pipeline. At the same time, homebuyer tax credits helped boost sales. Combined real and shadow inventory fell to 91 months of sales in May.

Lately, though, a new wave of defaults appears to be coming in, in part related to the high rate of failures on government modifications. As of September, some 1.9 million homeowners had missed one payment on their mortgages, up 14% from March. Meanwhile, home sales have slowed sharply with the end of government stimulus.

Homeowners might reasonably hope that banks’ latest troubles with foreclosure paperwork might prop up prices by at least temporarily easing the flow of homes onto the market. So far, though, that doesn’t seem to be happening: According to housing-market consultancy Zelman & Associates, banks listed 15% more repossessed home in October than in September.

The mountain of foreclosed homes casts a long shadow.

Existing Home Sales: Read Between the Numbers - CNBC

This is why you never believe any story that excites both Wall Street and our politicians.

Existing Home Sales: Read Between the Numbers - CNBC
By: Diana Olick CNBC Real Estate Reporter

Noise.

There's an awful lot of it in today's report on September existing home sales from the National Association of Realtors.

Even the markets could hear the noise, as they didn't react all that much to the 10 percent jump in sales that completely beat expectations.

Yes, it was the biggest monthly gain in 28 years, but it was also the third worst sales month on record. This was thanks to the historic plunge in home sales in July, after what we first thought was the closing deadline for the home buyer tax credit.

September's data still has government stimulus in it, as it's showing the final closings from the tax credit. Thirty-two percent of home buyers in September were first timers and a whopping 29% paid in cash, which really gives you an idea of where the mortgage market is today. Sales were still 19 percent below September of 2009 levels, so that tempers the big gain as well. The median sales price also fell 2.4 percent year over year and is the lowest reading since March.

Even before today's number was released, analyst Mark Hanson predicted exactly what would happen:

"On a month over month basis, sales did not fall as much as usual due to tax-credit effects. The seasonal adjustments, which are minimal at best in September, and if accurate would have subtracted sales...Seasonally adjusting stimulus months has produced many a month of artificially high headline prints, which always lead to disappointment. And next month is no different. Due to the Sept. tax credit micro boost and Mortgage-Gate — the latter which jammed up the REO flow and kept 10s of thousands of foreclosure-related sales and short sales occurring — we will get a plunge, perhaps the likes of July."

If you take out the seasonal adjustments in September, there were actually 35,000 fewer home sales in September than August, or a 8.5 percent drop. We always use the seasonally adjusted numbers, because home selling is a very seasonal business, but you can't ignore the raw stats on this one. The most important number in this report, however, is that 35 percent of all sales in September were of "distressed" properties, or foreclosures and short sales. We all know a huge chunk of that goes away in October, thanks to the foreclosure servicing issues and resulting moratoria.

In a speech today before a conference on the future of housing finance, Fed Chairman Ben Bernanke said the Fed "is evaluating potential effects of these [foreclosure servicing] problems on the real estate market and financial institutions."

I think the answer to that is in today's home sales report. The housing market is looking at a rough road.

"Bottom line, the data is an improvement off a very depressed level," notes Peter Boockvar of Miller Tabak. "But with the robosigner, foreclosure moratorium taking center stage at the very end of September, which today's figure didn't capture and neither will Oct (this number measures closings), the figures towards year-end will look much different."

Why Home Price Reports are Irrelevant - CNBC

Why Home Price Reports are Irrelevant - CNBC

 

By: Diana Olick CNBC Real Estate Reporter

 

Seriously. I have reported five home price surveys in less than a week:

 

• Clear Capital: Home prices fell 5.9 percent in past two months through 10/22
• CoreLogic: Home prices fell 1.5 percent year-over-year in August
• Natl. Assoc. of Realtors: Home Prices fell 2.2 percent year-over-year in September
• S&P/Case-Shiller: Home prices rose 1.7 percent in the top 20 markets year-over-year in August, but with gains "decelerating"
• FHFA: Home prices on homes with Fannie/Freddie loans fell 2.4 percent year-over-year in August

 

Three out of five of these reports are for August, when the bulk of the home buyer tax credit was over, but the closing deadline was then extended to Sept. 30th.

 

One of them, the S&P/Case-Shiller, is a running average, so it goes even further back than August. One claims to be the most recent data, Clear Capital, and is the biggest drop, so you could suspect that's the tax credit hangover.

 

Then the NAR report, which measures September, so still under the influence of those last minute tax credit laggards, is somewhere in the middle but showing prices declining year-over-year for the first time in several months.

 

None of these reports show any of the impact of robogate/foreclosure gate/foreclosure freeze-out, whatever you choose to call it. With distressed properties running at 35 percent of all sales and foreclosures being more than two-third of those, the foreclosure freeze will negate a huge portion of the current data in the coming months.

 

Sure, it could even produce a momentary bump up in prices because you're removing all those bank-owned, discounted homes. I'm not sure I buy that theory.

 

First of all, fall/winter is the slowest season in housing, and prices reflect that. Of course there are all those "seasonal adjustments," but with so much demand pulled forward by the tax credit, and foreclosure/mortgage issues plaguing what scintilla of buyer confidence remained in the market, sales are likely to take a deep hit again.

 

We are already selling homes at the third worst pace on record, and that was including a 10 percent monthly bump up from August to September.

 

If sales plunge, inventories rise, and when inventories rise, prices fall.

 

Do they fall everywhere? No. Is all real estate local? Yes. And that's especially why I can't stand these "national" home price reports. And yes, I recognize the contradiction ... that I will continue to report these price surveys on TV several times over. It's a living.

What Is MERS and What Role Does It Have in the Foreclosure Mess? (Hint: It Holds 60% of All Mortgages, But Has ZERO Employees)

It is any wonder that the banking system is so screwed up. We allowed these highly regulated organizations to create MERS without any oversight and we will be reaping the results of their greed for years to come.

What Is MERS and What Role Does It Have in the Foreclosure Mess? (Hint: It Holds 60% of All Mortgages, But Has ZERO Employees)


Posted By Guest Author On October 25, 2010 @ 3:00 pm

Washington’s Blog [1] strives to provide real-time, well-researched and actionable information. George – the head writer at Washington’s Blog [1] – is a busy professional and a former adjunct professor.

You’ve heard the name Mortgage Electronic Registration Systems or “MERS” mentioned in relation to the foreclosure problems in the residential real estate market.

But what is MERS?

It is the company created and owned [2] by all of the big banks to process title to property in the U.S. Approximately 60% of the nation’s residential mortgages are recorded in the name of MERS.

MERS is a shell corporation with no employees, but thousands of officers.

As the treasurer and secretary of MERS admitted [3] in a deposition:

Q Does MERS have any salaried employees?

A No.

Q Does MERS have any employees?

A Did they ever have any? I couldn’t hear you.

Q Does MERS have any employees currently?

A No.

Q In the last five years has MERS had any

employees?

A No.

Q To whom do the officers of MERS report?

A The Board of Directors.

***

A That’s correct.

Q And in what capacity would they report to you?

A As a corporate officer. I’m the secretary.

Q As a corporate officer of what?

Of MERS.

Q So you are the secretary of MERS, but are not

an employee of MERS?

A That’s correct.

***

Q How many assistant secretaries have you appointed pursuant to the April 9, 1998 resolution; how many assistant secretaries of MERS have you appointed?

A I don’t know that number.

Q Approximately?

A I wouldn’t even begin to be able to tell you right now.

Q Is it in the thousands?

A Yes.

Q Have you been doing this all around the country in every state in the country?

A Yes.

Q And all these officers I understand are unpaid officers of MERS?

A Yes.

Q And there’s no live person who is an employee of MERS that they report to, is that correct, who is an

employee?

[Objection]

A There are no employees of MERS.

(page 70, line 1 through page 72, line 8)

In another deposition, a legal assistant at a law firm initiating 4000 to 7000 foreclosures per month in Florida held herself out as “vice president” and “assistant secretary” of MERS. She testified [4]:

Q: The question was you have no job duties as an assistant secretary of MERS, correct?

A: I do not have any job duties other than signing the assignments and mortgage. Does that help?

Q: Yes. Here, I’ll try to rephrase this. Do you attend any board meetings at MERS?

A: No, sir.

Q: Do you attend any meetings at all at MERS?

A: No, sir.

Q: Do you report to the secretary of MERS?

A: No, sir.

Q: Who is the secretary of MERS?

A: I have no idea.

***

Q: Where are the MERS offices located?

A: I can’t remember.

Q: How many offices do they have?

A: I have no idea.

Q: Do you know where their headquarters are?

A: Nope.

Q: Have you ever been there?

A: No.

Q: How many employees do they have?

A: I have no idea.

(pages 11 & 12)

She further testified that her signatures on “these assignments,” which from all indications were and are at least several thousand in number, were in no way attestations that the statements contained therein were accurate or truthful. She further testified that she was the person with the most knowledge about the subject assignment.

For example, she testified:

Q: It says, ‘but effective as of the 19th day of February, 2008.” Do you see that?

A: Yes.

Q: Where did you get that date from?

A: I did not pick that date. That date was put in by the processor that prepared the assignment.

Q: And who was that?

A: Off the top-of-my-head, I do not know who actually typed this assignment.

Q: Okay. But you are signing on behalf of MERS, and you are stating here that it is effective as of the 19th day of February, 2008, correct?

A: Correct.

Q: At the time you signed this, what reason did you have, as agent for MERS, to make it effective as of the 19th day of February, 2008?

A: I did not pick that date. And I do not recall this document.

Q: Sitting here today, you have no idea why it is that it says, “effective as of the 19th day of February, 2008.” Is that correct?

A: Looking at this one particular piece of paper, I do not recall or know the answer to that question, no.

Q: Is there some general practice, of which you are aware, that would give us information as to why this particular date was inserted?

A: That information was determined by the people that review the file prior to me.

Q: And what would they base that on, as a general practice?

A: I do not know.

Q: You don’t know? Were, to your knowledge, any physical documents transferred on February 19, 2008?

A: I do not know.

Q: To your knowledge, does the 19th day of February, 2008 have any significance?

A: I do not know.

Q: Ma’am, if you signed this document on behalf of MERS, picking this date, this effective date – -

A: I did not pick the effective date.

Q: But you ratified it by signing this; didn’t you?

[objection]

Q: Didn’t you attest to the accuracy of that date by signing this document?

[objection]

A: I would say, no.

Q: Did you attest to this document, as a whole, by signing it?

[objection]

A: I do not think that in my capacity of signing these assignments, it was my position to attest. My role was to be given a document that had been reviewed by an attorney, had been reviewed by a title examiner, had instructions from the client, and I was to sign the assignment as secretary on behalf of MERS.

Q: Right. And when you signed it as secretary on behalf of MERS, were you approving and agreeing with the terms contained therein for MERS?

A: I believe I was approving and agreeing to the fact that the mortgage needed to be assigned from MERS to another entity.

(pages 13 and 14)

In other words, assignments of title were never actually created, notarized and recorded, as required by state law. The “vice president” and “assistant secretary” MERS signing sworn statements under penalty perjury was simply making it up and doing what she was told.

In that light, Yves Smith’s report [5] that “no one in the industry transferred the paper” makes perfect sense.

Why MERS?

But why was MERS created in the first place?

MERS, the banks and the mainstream financial press [6] all say that it was simply to save fees by digitizing mortgage electronic.

But as Ellen Brown notes [7], there is in reality a very different reason that the big banks created MERS:

The rating agencies required that the conduit be “bankruptcy remote,” which meant it could hold title to nothing ….

Indeed, the secretary and treasurer of MERS admitted [3] this in a deposition, stating:

As a requirement for mortgages that were securing loans or promissory notes that were sold to securitize trust, the rating agencies would only allow mortgages MERS — well let me step back. They required that a bankruptcy remote single purpose entity be created in order for transactions holding loans secured by MERS, by mortgages MERS served as mortgagee to be in those pools and receive a rating, an investment grade rating without any changes to the credit enhancement. They required that to be a bankruptcy remote single purpose subsidiary of MERS, of Merscorp.

(page 32, lines 9-20)

Indeed, many commercial mortgages may be held by MERS as well [8], and for the same reason [9].

And as a a forthcoming article in the Real Property, Trust and Estate Law Journal notes [10], saving fees was another motivation for the giant banks in running mortgages through MERS, but in a way which is shadier than routine cost-cutting efforts.

You can find the rest of the post here.

 

Frightful Housing Forecast- April Charney, a senior staff attorney for Legal Aid in Jacksonville, Fla., tells CNBC housing losses could total a trillion dollars

The banks have really screwed this country up and if this attorney is right we have a whole lot more pain ahead of us rather than behind us.



In other news it looks like some of the bank's investors on Wall Street, including the NY Federal Reserve are saying its time to pay the piper for their misdeeds. Today, PIMCO, BlackRock Inc. and the Federal Reserve Bank of New York as well as 4 other investors are seeking to force Bank of America Corp. to repurchase soured mortgages packaged into $47 billion of bonds by its Countrywide Financial Corp. unit.
 
I guess we will be seeing further write downs by Bank of America in the next quarterly report. Ouch. I expect that the other mortgage lenders will also be getting similar notices from their investors for the other worthless bonds peddled by the banksters during the housing boom.

Lew Rockwell - The Second Leg Down of America’s Death Spiral

Great article on the problems facing America thanks to the bankers. I just hope this guy isn't 100% right because if he is we are so screwed.

The Second Leg Down of America’s Death Spiral
by Gonzalo Lira

I swear to God Almighty: Mortgage Backed Securities are America’s Herpes – the gift that keeps on oozing.

Last Friday, Bank of America announced that it was suspending all foreclosure proceedings, presumably until further notice. Other banks have already suspended foreclosures in a whole truckload of states. A nationwide moratorium on foreclosures might soon happen – which would be a big deal: Global Financial Crisis, Part II – Longer, Wider and Uncut.

But the mainstream media – surprise-surprise – has downplayed the whole shebang. They’re throwing terms out there into the ether, but devoid of context or explanation: “Robo-signings,” “foreclosure mills,” forged signatures, “double booking,” MERS – it’s confusing as all get-out.

So the mainstream media just mentions it casually – “and in other news tonight . . .” – like it’s no big deal: A couple-three lines, lots of complicated, unfamiliar terms, an attitude like it’s a brouhaha over paperwork of all things! – and then zappo-presto-change-o!: They’re showing video footage of a cute koala nursing in the arms of a San Diego zookeeper.

But even the koalas know that something awful is heading America’s way. Smart little critters, they’re heading for the treetops, to get away from this mess.

So what the hell is going on with the God forsaken mortgage mess in the United States?

It’s got a lot of bells and whistles, but it’s basically quite simple: It’s all about the fucking Mortgage Backed Securities (MBS). Again.

So this is what happened, more or less – the short version:

In the crazed frenzy to get as many mortgages securitized during the Oughts, banks took shortcuts with the paperwork necessary for the Mortgage Backed Securities. The reason was because everyone in the chain of this securitization mania got a little piece of the action – a little slice of the MBS pie in the shape of commissions.

So in the name of “improved efficiencies” (and how many horror stories are we finding out, carried out in the name of “improved efficiencies”), banks digitized the mortgage notes – they didn’t physically endorse them, like they were supposed to by the various state and Federal laws.

Plus – once the wave of foreclosures broke, and the holes in this bureaucratic paperwork became evident and relevant – some of the big law firms handling the foreclosures for the banks started doing some document fabrication and signature forgery, in order to cover up the mistakes – which is definitely illegal.

Long story short (since this is the short version): A lot of the foreclosed properties might not have been foreclosed legally. The people evicted might still have a right to their old houses. The new buyers might not actually own the REO’s they bought off the banks. The banks could be on the hook for trillions of dollars, and in the sights of literally millions of lawsuits.

In short: This could become another massive oozing sore, complete with yellow-green pus drip-drip-dripping out of some unmentionable places on the Body Economic.

Now – the long version:

Homeowners can only be foreclosed and evicted from their homes by the person or institution who actually has the loan paper – only the note-holder has legal standing to ask a court to foreclose and evict. Not the mortgage – the note, which is the actual IOU that people sign, promising to pay back the mortgage loan.

Before Mortgage Backed Securities, most mortgage loans were issued by the local Savings & Loan. So the note usually didn’t go anywhere: It stayed in the offices of the S&L down the street.

But once mortgage loan securitization happened, things got sloppy – they got sloppy by the very nature of Mortgage Backed Securities.

The whole purpose of MBS’s was for different investors to have their different risk appetites satiated with different bonds. Some bond customers wanted super-safe bonds with low returns, some others wanted riskier bonds with therefore higher rates of return.

Therefore, as everyone knows, the loans were “bundled” into REMIC’s (Real-Estate Mortgage Investment Conduits, a special vehicle designed to hold the loans for tax purposes), and then “sliced & diced” – split up and put into tranches, according to their likelihood of default, their interest rates, and other characteristics.

This slicing and dicing created “senior tranches,” where the loans would likely be paid in full, if past history of mortgage loan statistics was to be believed. And it also created “junior tranches,” where the loans might well default, again according to past history and statistics. (A whole range of tranches were created, of course, but for purposes of this discussion, we can ignore all those countless other variations.)

These various tranches were sold to different investors, according to their risk appetite. That’s why some of the MBS bonds were rated as safe as Treasury bonds, and others were rated by the ratings agencies as risky as junk bonds.

But here’s the key issue: When an MBS was first created, all the mortgages were pristine – none had defaulted yet, because they were all brand new loans. Statistically, some would default and some others would be paid back in full – but which ones specifically would default? No one knew, of course. If I toss a coin 1,000 times, statistically, 500 tosses the coin will land heads – but what will the result be of, say, the 723rd toss specifically? I dunno.

Same with mortgages.

So in fact, it wasn’t that the riskier loans were in junior tranches and the safer mortgage loans were in the senior tranches: Rather, all the loans were in all the tranches, and if and when a mortgage in a given bundle of mortgages defaulted, the junior tranche holders would take the losses first, and the senior tranche holder take the loss last.

But who was the owner of the junior tranche bond and the senior tranche bond? Two different people. Therefore, the mortgage note was not actually signed over to the bond holder. In fact, it couldn’t be signed over. Because, again, since no one knew which mortgage would default first, it was impossible to assign a specific mortgage to a specific bond.

Therefore, how to make sure the safe mortgage loan stayed with the safe MBS tranche, and the risky and/or defaulting mortgage went to the riskier MBS tranche?

Enter stage right, the famed MERS – the Mortgage Electronic Registration System.

MERS was the repository of these digitized mortgage notes that the banks originated from the actual mortgage loans signed by homebuyers. MERS was jointly owned by Fannie Mae and Freddie Mac (yes, those two, again, I know, I know: Like the chlamydia and the gonorrhea of the financial world – you cure ‘em, but they just keep coming back).

The purpose of MERS was to help in the securitization process. Basically, MERS directed defaulting mortgages to the appropriate tranches of mortgage bonds. MERS was essentially the operating table where the digitized mortgage notes were sliced and diced and rearranged so as to create the Mortgage Backed Securities. Think of MERS as Dr. Frankenstein’s operating table, where the beast got put together.

However, legally – and this is the important part – MERS didn’t hold any mortgage note: The true owner of the mortgage notes should have been the REMIC’s.

But the REMIC’s didn’t own the note either, because of a fluke of the ratings agencies: The REMIC’s had to be “bankruptcy remote,” in order to get the precious ratings needed to peddle Mortgage Backed Securities to institutional investors.

So somewhere between the REMIC’s and the MERS, the chain of title was broken.

Now, what does “broken chain of title” mean? Simple: When a homebuyer signs a mortgage, the key document is the note. As I said before, it’s the actual IOU. In order for the mortgage note to be sold or transferred to someone else (and therefore turned into a Mortgage Backed Security), this document has to be physically endorsed to the next person. All of these signatures on the note are called the “chain of title.”

Read the rest of the article

WSJ- Foreclosure Mess Could Be Taxing for Mortgage Investors

More bad news on the housing front.

Foreclosure Mess Could Be Taxing for Mortgage Investors

 By DAVID REILLY

The foreclosure mess has raised plenty of legal questions around banks' handling of defaulted mortgages. But the scandal may also create tax problems for mortgage-backed securities.

These securities were usually issued by real-estate mortgage investment conduits, or remics. They take in mortgage income and pass it through to investors without paying corporate tax.

To qualify as a Remic, assets have to be transferred or formally assigned to the vehicle usually within 90 days of its creation. The assets have to be qualifying mortgages. And they have to be secured by the property being mortgaged.

Now, flawed affidavits have led many banks to halt foreclosures; on Wednesday, 49 of 50 state attorneys general said they were launching a joint investigation into the mortgage industry. Separately, J.P. Morgan Chase in announcing third-quarter earnings on Wednesday said it was setting aside an additional $1.5 billion for potential litigation expenses. Part of this cost will likely be due to mortgage-related legal action, although Chief Executive James Dimon said it wasn't directly linked to the affidavit issue.

The affidavit imbroglio has called into question whether vehicles such as remics actually hold promissory notes—a borrower's IOU—or proof they received them. If these notes weren't properly transferred, the debts mightn't qualify for inclusion in a remic. If improperly included loans exceed 1% of a remic's assets, it could jeopardize the tax-free status.

One possible out is that tax law tends to look to the beneficial ownership of an asset, not just the paperwork. So there is a chance the Internal Revenue Service would say a remic held the burden and benefit of ownership.

But another issue may arise due to the role of Mortgage Electronic Registration Systems. This firm helped speed the packaging and sale of mortgages by acting as holder of the mortgage, which is the actual lien on a property.

While MERS would often be listed in government records as the mortgage holder, the promissory note would be passed among investors. This meant the mortgage didn't have to be re-recorded each time the note was sold.

But this suggests MERS was often the official mortgage holder, not the remic. In that case, some remic loans wouldn't have been properly secured by a property, a condition for their tax-free status. At least one class-action lawsuit has attempted to make this point.

Unfortunately, it may take some time to figure out the issues. That is due to the complexity of tax and real-estate law and the chance that outcomes could vary in different states.

Until then, mortgage investors have an uneasy wait.

Bloomberg - Florida's 30-Second Foreclosure Dash Hits Wall of Fraud Claims

Sounds like that 41 month shadow inventory of houses is going to take even longer to sell off.

Florida's 30-Second Foreclosure Dash Hits Wall of Fraud Claims
By David McLaughlin

Home to more foreclosures than 47 U.S. states, Florida sought to clear out its backlog with a system of special court hearings that dispensed with cases quickly, sometimes in less than a minute.

Homeowners like Nicole West now threaten to slow that system, Florida’s so-called rocket docket, to a crawl. West, who has been fighting to save her Jensen Beach house from foreclosure, has leveled a new allegation in her three-year battle: the entire process is based on fraud.

West said her case is rife with the kind of flawed mortgage documents that have caused lenders including Bank of America Corp. and JPMorgan Chase & Co. to stop the process of foreclosures and evictions across the country. The banks said they are investigating homeowner charges like West’s that signatures were forged and documents were backdated.

“It’s not right,” said West, 40, who lives about an hour’s drive north of West Palm Beach. “It’s like lying to the judge. It’s like lying about what’s really going on.”

The bank moratoriums are already thwarting the initiative by Florida officials to clear jammed court dockets. Now, efforts by homeowners such as West to bring claims of fraud to the attention of judges are further prolonging evictions, and in turn slowing purchases of foreclosed properties.

NPR's Toxic Asset Has Died

Weren't we told by Bush, Bernanke and Paulson that TARP would purchase these toxic mortgage securities  from the Banks and that by doing so we would save the economy. Guess what though they changed their minds after getting their hands on our money and the majority of these assets remain on the banks ledgers. The only thing that changed is that the banks got a new accounting rule, which allowed them to stop marking to market mortgage securities but based on this video its clear that these assets are worthless.

Ally (GMAC) Mortgage Halts Home Foreclosures in 23 States

My question is why? I have two hypothesises. The first is that GMAC realized that they don't even own the properties because the mortgage was sold off to another party when it was securitized. My second hypothesis is that Obama called them up and told them to stop foreclosing on houses until after the election or he would demand the $17 Billion government loan due in full.

Either way there is no more this story than first meets the eye.

GMAC Mortgage Halts Foreclosures

Ally Financial Inc.’s GMAC Mortgage unit told brokers and agents to halt foreclosures on homeowners in 23 states including Florida, Connecticut and New York.

GMAC Mortgage may “need to take corrective action in connection with some foreclosures” in the affected states, according to a two-page memo dated Sept. 17 and obtained by Bloomberg News. Ally Financial spokesman James Olecki confirmed the contents of the memo. Brokers were told to stop evictions, cash-for-key transactions and lockouts, regardless of occupant type, with immediate effect, according to the document, addressed to GMAC preferred agents.

The company will also suspend sales of properties on which it has already foreclosed. The letter tells brokers to notify buyers that the company will extend the closing date on all sales by 30 days. Buyers will be able to cancel their agreement to purchase and get their deposit back, according to the letter.

Banks Hold Off On Foreclosure Notices - CNBC

Banks Hold Off On Foreclosure Notices - CNBC

I'm sure you've all seen the headlines from RealtyTrac today that show a new record for bank repossessions.

In some of the news reports today, I've also heard TV anchors make mention of some bright news in the report, that Notices of Defaults (NOD's) are down 30 percent from a year ago.

NOD's are the first stage in the foreclosure process. So that should mean that while there are still a lot of borrowers working through the system, at least the number of newly troubled borrowers entering the system is improving, right? Wrong.

According to Rick Sharga at RealtyTrac, the NOD number is down only because banks are not sending out NOD's to borrowers who are seriously delinquent.

Frankenstein real estate market $3.5 trillion in commercial real estate debt and $10.3 trillion in residential real estate debt. Will we reach a 50 percent underwater market where 25 million Americans sit in homes worth less than their mortgage?

Interesting post about the housing crisis.

Frankenstein real estate market – $3.5 trillion in commercial real estate debt and $10.3 trillion in residential real estate debt. Will we reach a 50 percent underwater market where 25 million Americans sit in homes worth less than their mortgage?

Mortgage Foreclosures Hit Record as Job Losses Strain Budgets

But things are getting better, right Ben?

By Kathleen M. Howley
May 19 (Bloomberg) -- A record share of U.S. mortgages were in foreclosure in the first quarter as job losses caused homebuyers to fall behind on monthly payments, thwarting government efforts to stem property seizures.

The inventory of homes in foreclosure rose to 4.63 percent from 4.58 percent in the fourth quarter, the Mortgage Bankers Association said in a report today. The combined share of foreclosures and mortgage delinquencies was 14 percent, or about one in every seven U.S. mortgages.

Job losses have strained budgets, making it difficult for households to pay monthly bills, said Jay Brinkmann, the Washington-based trade group’s chief economist. U.S. unemployment in the second half of 2009 -- when people now in foreclosure would have first fallen behind on their payments -- reached the highest levels since 1983, according to the Bureau of Labor Statistics. The unemployment rate declined to 9.7 percent in the first quarter of this year from 10 percent in the last three months of 2009.

“The unemployment rate is the major factor driving the numbers,” Brinkmann said today in an interview. “We’re seeing the states with the biggest unemployment problem, like Ohio, Illinois and Michigan, showing the biggest increases.”

Ten percent of U.S. mortgage holders had payments 30 days or more overdue, on a seasonally adjusted basis, up from 9.47 percent in the previous quarter, Brinkmann said. On a non- adjusted basis, the rate fell to 9.38 percent from 10 percent, possibly an early sign of improvement as job losses abated, he said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ahBIgAgVMwdg&pos=6

More bad news about the housing market-

I don't agree with the author's premise that the government needs to provide more money to bailout the hosuing market but the facts he cites are very sobering. January’s new home sales plunged by more than 11 per cent month-on-month to an annual rate of 309,000 units, the weakest on record. Based upon January's rate it will take 21 years to selloff the current inventory before the "shadow inventory" of 7.7 million gets added in.

America must do more to help its homeowners

By Mort Zuckerman
Published: March 4 2010 20:12
Last updated: March 4 2010 20:12

America’s housing crisis has not gone away. If anything, it is getting more severe. Today, median single family house prices nationwide are down by slightly more than 30 per cent from their early 2006 peak. Fusion IQ, the research group, estimates that excess inventories will push prices down by a further 10 per cent. This is a critical issue because home equity was for years the largest asset on the balance sheet of the average American family.

http://www.ft.com/cms/s/0/4582f4b6-27c5-11df-863d-00144feabdc0.html

More Bad News on The Housing Front

February 24, 2010
From Bloomberg BusinessWeek

Anna Piretti, BNP Paribas

U.S. new home sales plunged by 11.2% month-over-month in January to 309,000 annualized units, falling well below a previous historical low of 329,000 reached at the beginning of 2009. After showing some signs of life in the spring of 2009, new home sales steadily worsened over the second half of last year, dropping five times over the past six months. The dreadful January report appears somewhat at odds with the recent mild improvement recorded by the National Association of Home Builders Housing Market Index, suggesting the minor firming in sentiment did not translate into a pickup in the hard data.

Gary Bigg, Bank of America Merrill Lynch

Mortgage applications have now fallen for three consecutive weeks. After declining 1.2% and 2.1% in the prior two weeks, mortgage loan applications dropped 8.5% for the week ended Feb. 19. No doubt [major February snowstorms] had an adverse impact on applications. Applications for refinancing fell 8.9% in the latest week. Purchase applications have now fallen for three consecutive weeks. After posting declines of 7.0% and 4.0% in the prior two weeks, mortgage applications for purchase tumbled 7.3% in the latest week.


The index for purchase applications has now fallen to 1997 levels. The contract rate for a 30-year fixed rate mortgage rose 9 basis points to 5.03%.

http://www.businessweek.com/investor/content/feb2010/pi20100224_872977.htm

Friday Debt Dump, Part 1: Shhh -- Fannie Mae Lost $72 Bil in 2009, Needs Another $15.3 Bil in Cash | NewsBusters.org

Friday Debt Dump, Part 1: Shhh -- Fannie Mae Lost $72 Bil in 2009, Needs Another $15.3 Bil in Cash | NewsBusters.org

IndyMac Deal Screws the Taxpayer Everytime It Forecloses On A House

If you aren't pissed after seeing this video its time to check to see if you're still alive.




This is the link to the followup video which responds to the FDIC's criticism of the original video.

Video Marketing and Mortgage News Designed for Mortgage and Real Estate Sales

Hearing urged on bailout for Fannie, Freddie

We are getting so screwed by the politicians and you want to know something most people are completely unaware of it.

Politicians created this housing depression through regulations which pushed a Utopian (i.e. communist) policy that all Americans should be homeowners. I'm sorry but if you make $25K you shouldn't be buying a $500k house. Now rather than fixing the problem we are going to bail out the problem.

In case you missed it, which would not be surprising because they intentional announced it while the whole country was distracted by Santa, on Christmas Eve the Treasury agreed to remove caps on spending for both Fannie and Freddie. Taxpayers already have provided $110.6 billion of direct support to Fannie and Freddie, while the Treasury and Federal Reserve have provided an additional $1.2 trillion of assistance through purchases of the mortgage giant's debt and mortgage-backed securities in the last year. Now thanks to the Treasury they have an unlimited line of credit.

So how is the US is ever going to pay off our $12 Trillion debt which will soon become $14 Trillion http://voices.washingtonpost.com/44/2010/01/senate-discussing-a-raise-in-n.html?wprss=44 and is mere pennies compared to the $107 Trillion in unfunded liabilities we owe for Medicare and Social Security http://www.ncpa.org/pub/ba662 ? The answer is rather simple real estate. I truly believe that if we ever default on our debt to the Chinese and Saudis that the US will simply begin securing the debt with our homes. Land has value just like gold and silver and the US has alot of land. Plus now that Fannie and Freddie hold over 50% of the mortgages in this country and as of December 2009 they are financing 75% of all mortgages through loans by the Federal Reserve which pass through the US Treasury it is possible. You see just like a bank the government can now sell off your loan to a foreign nation and if you default well they own your land. Welcome to the new securitized mortgage derivative market owned and controlled by Goldman Sachs. Don't think it can happen. If I had told you 18 months ago that the government would be the owner of two car companies, two mortgage companies and an insurance company I would have been crazy right.
Hearing urged on bailout for Fannie, Freddie

In other news, banks are now openly violating the law and no one is doing a damn thing about it:



Finally, in case you don't think the housing market could get any worst, well check out the latest predictions from RealtyTrac: