From HousingWire:
Clear Capital: Home price drop sudden and dramatic
Clear Capital said a 6%, two-month decline in home prices represents a magnitude and speed not seen since March 2009.
“Clear Capital’s latest data through Oct. 22 shows even more pronounced price declines than our most recent (Home Data Index) market report released two weeks ago,” said Alex Villacorta, senior statistician with data analytics firm. “At the national level, home prices are clearly experiencing a dramatic drop from the tax credit-induced highs, effectively wiping out all of the gains obtained during the flurry of activity just preceding the tax credit expiration.”
Prices are now at the same level as in mid-April, two weeks prior to the expiration of the federal homebuyer tax credit. The drop, in advance of typical winter housing market slowdowns, paints an ominous picture that will likely show up in other housing indices in the coming months.
If previous correlations between the Clear Capital and S&P/Case-Shiller indices continue as expected, the next two months will show a similar downward trend in S&P/Case-Shiller numbers.
From Bloomberg:
Sales of U.S. Existing Homes Probably Rose, Unemployment Limits Progress
Sales of U.S. existing homes probably climbed in September for a second month as the industry that precipitated the worst recession since the 1930s struggled to overcome mounting foreclosures, economists said before a report today.
Purchases rose to a 4.3 million annual rate, up 4.1 percent from August, according to the median of 64 estimates in a Bloomberg News survey. The readings over the past three months would be the lowest since comparable records began in 1999.
An overhang of distressed properties and a jobless rate that is hovering near 10 percent may depress home values and rob Americans of the confidence needed to commit to major purchases. Concerns over faulty foreclosure proceedings at some of the nation’s biggest banks also threaten to delay the mending process even more.
“Housing is very much a casualty of the recession,” said Robert Dye, a senior economist at PNC Financial Services Group Inc. in Pittsburgh. “Despite extremely low rates and favorable pricing, buyers are still extremely cautious. I do think we’ve hit a bottom, but that does not imply a quick turnaround.”
The National Association of Realtors is scheduled to release the sales figures at 10 a.m. in Washington. Survey estimates ranged from 4 million to 4.8 million. Comparable data, which combines single-family houses and condominiums, began in 1999.
From the NY Times:
Owners Seek to Sell at Loss as Banks Push Foreclosure
Bank of America and GMAC are firing up their formidable foreclosure machines again today, after a brief pause.
But hard-pressed homeowners like Lydia Sweetland are asking why lenders often balk at a less disruptive solution: short sales, which allow owners to sell deeply devalued homes for less than what remains on their mortgage.
Ms. Sweetland, 47, tried such a sale this summer out of desperation. She had lost her high-paying job and drained her once-flush retirement savings, and her bank, GMAC, wouldn’t modify her mortgage. After seven months of being unable to pay her mortgage, she decided that a short sale would give her more time to move out of her Phoenix home and damage her credit rating less than a foreclosure.
She owes $206,000 and found a buyer who would pay $200,000. Last Friday, GMAC rejected that offer and said it would foreclose in seven days, even though, according to Ms. Sweetland’s broker, the bank estimates it will make $19,000 less on a foreclosure than on a short sale.
…
Concerns about fraud are one of the reasons lenders are so careful about short sales. Sometimes well-off homeowners want to portray their finances as dire and cut their losses on a property. In other instances, distressed homeowners try to make a short sale to a relative, who would then sell it back to them (a practice that is illegal). A recent industry report estimates that short sale fraud occurs in at least 2 percent of sales and costs banks about $300 million annually.
…
“Banks are historically reluctant to do short sales, fearing that somehow the homeowner is getting an advantage on them,” said Diane E. Thompson, of counsel to the National Consumer Law Center. “There’s this irrational belief that if you foreclose and hold on to the property for six months, somehow prices will rebound.”
…
In half a dozen more cases examined by The New York Times, Bank of America rejected short sale offers, foreclosed and auctioned off houses at lower prices.
From the WSJ:
BofA Finds Foreclosure Document Errors
Bank of America Corp. for the first time acknowledged finding some mistakes in foreclosure files as it begins to resubmit documents in 102,000 cases.
The Charlotte, N.C., lender discovered errors in 10 to 25 out of the first several hundred foreclosure cases it examined starting last Monday. The problems included improper paperwork, lack of signatures and missing files, said people familiar with the results. In certain cases, information about the property and payment history didn’t match.
Some of the defects seem relatively minor, according to the bank, and bank officials said they haven’t uncovered any evidence of wrongful foreclosures. There was an address missing one of five digits, misspellings of borrowers’ names, a transposition of a first and last name and a missing signature on one document “underlying” an affidavit, a bank spokesman said.
But the bank uncovered these mistakes while preparing less than 1% of the first foreclosure files that it intends to resubmit to the courts in 23 states. As the nation’s largest mortgage lender, the bank is under pressure to show that its mortgage process isn’t flawed amid revelations that many banks used “robo-signers” to approve large numbers of foreclosure documents without reading them closely.
Hardy har:
http://4.bp.blogspot.com/_wkgIzuqJM0w/TMVNojA3WsI/AAAAAAAAG4E/CBOLlnDM2dc/s1600/TLV.jpg
From the WSJ:
Green Shoots for Housing Mowed Down
Winter usually casts a chill over housing markets. And this year, spring may be a long time coming.
Thank the foreclosure debacle for that. It is roiling housing just as some positive signs were emerging: Housing starts, architectural billings and home-builder sentiment have all recently risen.
The trouble won’t necessarily show up in housing reports this week—September existing-home sales come out Monday, Case-Shiller August home-price data on Tuesday and September new-home sales data on Wednesday. Economists expect sales to show a small uptick from August levels, while prices remain weak.
But these figures will reflect conditions mostly before banks temporarily halted foreclosures due to questionable affidavits. More telling may be recent declines in the weekly mortgage-applications survey from the Mortgage Bankers of America, which showed purchasing activity off nearly 40% from a year ago.
For their part, banks are moving to restart foreclosures and reassure buyers that markets are functioning. But the legal logjam mightn’t clear quickly, given what are expected to be renewed challenges from homeowners’ lawyers and skeptical judges.
…
Moreover, once the legal problems clear, a backlog of discounted properties will flood the market. Economists at Wells Fargo Securities noted last week that there are two million homes in the process of foreclosure and another two million with mortgages 90 days past due. They expect home prices to fall an additional 5% to 8% next year.
Falling prices and legal uncertainty, meanwhile, may lead “to even more conservative appraisals and even tighter underwriting standards,” the Wells Fargo economists reckon.
That, in turn, could blunt the benefit from superlow mortgage rates, currently around 4.2% for 30-year loans. It could also prompt the Federal Reserve to try to drive borrowing rates even lower. While a housing rebound mightn’t be a must for an economic recovery, a renewed housing downturn almost certainly will undermine one.
Another round of tax credits coming? Or will nature take it’s course?
So if I am reading the above correctly, prices are going down and demand is going up? So much for economics.
What happens when inflation returns and mtg rates go up? Even if we are 12 – 18 mos from this, no way job situation or housing mkt will recover by then – strong runup in inflation means doomsday for housing mkt.
The perfect storm.
From Law.com:
Bank of America Sued in Class Action Over Flouting of Foreclosure Rules
Bank of America has been hit with a class action on behalf of homeowners seeking damages for alleged disregard of foreclosure process rules.
The suit, filed Wednesday in federal court in Newark, N.J., accuses Bank of America and two subsidiaries, LaSalle Bank and BAC Home Loans Servicing, of “an undisciplined rush to seize homes” through “pervasive and willful disregard of knowledge, facts and statutes.”
Bank of America has filed foreclosure proceedings on many mortgages in New Jersey without holding the necessary rights as the mortgagee or assignee at the time of foreclosure, the suit says.
“Many thousands of foreclosures are plainly void under statute and settled New Jersey case law. Many borrowers never obtain statutorily required notices, and many foreclosure suits are filed entirely based in inaccurate recitations concerning ownership of the mortgage, the note, or the assignment,” the suit says.
The putative class in the suit, Beals v. Bank of America, N.A., 10-cv-05427, consists of all named defendants in pending New Jersey foreclosure actions initiated by Bank of America or its affiliates. The complaint includes counts of common-law fraud, breach of the covenant of good faith and fair dealing and violations of the New Jersey Fair Foreclosure Act and Consumer Fraud Act.
So, looks like the spring selling season will be the time to buy? Grim,
From the NY Times:
The Elusive Small-House Utopia
Every year, in conjunction with a big trade show, the magazine Builder creates something it calls its “concept home.” The house is an exhibition on a theme — the 2004 edition, for example, was called the Ultimate Family Home — but also a commercial venture. Attendees of the International Builders’ Show can walk through a model, and when the show is over, the concept is quite literally put to a test when the finished house is offered up for sale on the open market. During the last decade’s real estate boom, the annual demonstration kept up with the times: designs abounded with baronial features like colonnades, cathedral ceilings and observation towers, and they sometimes topped 6,000 square feet. But then the crash came, wiping out credit lines and shaking the industry’s confidence. For this year’s show, Boyce Thompson, the editorial director of Builder, wanted a look more attuned to curtailed appetites, so he came up with a concept that he called a Home for the New Economy.
The most salient specification of the house was its modest proportions. At around 1,700 square feet, it was the size of the average American home built in 1980. Since then, new houses have on average grown by more than 40 percent, as dens have expanded into great rooms, and tubs and sinks have multiplied. “Houses got too big, because people were chasing investment gains and there was cheap money, and the industry responded by building houses that were too large,” Thompson says. “So we really wanted to focus people’s attention on doing smaller, better homes.” He points to Census statistics that show a slight decline in the size of homes built over the past two years and to a much larger drop in the square footage of those that have just started construction, and suggests that the market may be headed toward a more austere norm.
That’s certainly debatable. If dissecting the causes of the housing market’s crash is a task for economists, predicting its future is a fuzzier matter of sociology. Will Americans re-evaluate cultural assumptions that equate ever-larger houses with success and stability? Or will they invest more in their lived environments, figuring that with the demise of the quick flip, they are now in for the long term? In the absence of much real market activity, imaginations are free to run wild. The Home for the New Economy is one such exercise in speculation, a proposal that the future lies in denser, more walkable, modestly scaled communities. Marianne Cusato, who designed the Home for the New Economy, sees it as a rebuke to the ethic of the McMansion. “We’re not going to go back to 2005,” she says. “What was built then is not going to come back, and this is not a bad thing. What we were building was so unsustainable, and it didn’t really meet our needs.”
Grim, Would like to put one of those houses on this lot. http://cnj.craigslist.org/reb/2022756701.html
nomad (7)-
Whatever the worst possible outcome could be…that’s the one the idiots in charge will engineer.
Simply incredible: allow the same people who have just about destroyed America to try and fix it all, using the same ideas and practices that blew everything up.
The new trend in US housing will be living in refrigerator boxes.
Save on energy costs: warm yourself near a trash barrel fire.
CIDqAc smldklvnpiry, [url=http://omnsffxfzfpq.com/]omnsffxfzfpq[/url], [link=http://aawpivsqdrjq.com/]aawpivsqdrjq[/link], http://cigyezraqfvy.com/
And here is where some of those NJ property taxes go:
What NJ school employees get for 1.5% of their base salary:
http://www.state.nj.us/treasury/pensions/hb_open_enrollment_2010/hb-0798-local-ed-comparison-booklet.pdf
What local school districts pay for the coverage:
http://www.state.nj.us/treasury/pensions/hb_open_enrollment_2010/fh-0278-0279-dental-local-ed.pdf
What towns will pay for their police and fire pensions in 2011:
http://www.state.nj.us/treasury/pensions/epbam/exhibits/pdf/2011-pfrs-billing.pdf
What towns will pay for their other public employees pensions in 2011:
http://www.state.nj.us/treasury/pensions/epbam/exhibits/pdf/2011-pers-billing.pdf
Reading the housing and economic news each day reminds me of animal house.
“Thank you sir may I have another”!
Another glorious day in the markets. The world promises fair trade and alas, everything is OK. Too bad no one believes Turbo Timmay and once again the dollar gets thrown under the bus.
Still-Looking: Thanks for hosting the party the other night and it was a pleasure to meet all the bloggers who attended. Still waiting to meet Clot,,,,,
How about this hypothetical question:
Suppose we never had exotic mortgs the last 20+ years (pick your time frame if you like) and basically is was 30 / 15 yr fixed and perhaps a 7/23 or 5/25 and you had to have a min of 10% down and 20% if you wanted to avoid PMI insurance –
We would not have seen the run up in housing, sizes of homes would have remained smaller, etc.
Without the run up in housing prices, homes would not have been used as ATMs and as a result, consumption would have declined. No big housing mess, but the consumer driven economic growth would not have taken place to the degree it has –
so then, based on if the above would have happened, where would we be today? Std of living “lower: ie- less material things, more stable US and global economy?
Thoughts anyone?
ya7xQp yzroymatdcjv, [url=http://kfqfnaxnbktu.com/]kfqfnaxnbktu[/url], [link=http://cvepkzabctwv.com/]cvepkzabctwv[/link], http://isncjyhkceyi.com/
Anyone get the # exiting home sales?
18 – IMO – that’s like asking “what if China didn’t exist for the last 20 years or so…” Cheap goods with no labor cost is something that is hard to pull out of the psychological mass pursuit of consumption. Subsequently, the tremendous trade deficits that resulted from that activity, added to the already huge petroleum-based deficit, led to foreign nations searching for a place to dump trillions of dollars for a decent return. Mortgages were just one instrument corrupted for this purpose, but the collateral damage appears to be huge. And the underlying problem is still unresolved, and would remain so even if property was appropriately “repriced” to conform to historically-based trendlines.
Existing home sales jump. I’ll let Grim opine on this.
Damn. Shiny bounces hard off the bottom. Knew I shoulda got back in.
I know. Coulda woulda shoulda, yadda yadda.
So China bought our mtg pools?
[18] nomad
interesting hypo, but I think that what it did was hasten the inevitable, and probably made the drop sharper sooner than otherwise.
At this point, I am still wondering if Obama will be able to get to use the only tool left that will make a systemic change: Protectionism. I sense that the admin is waiting for an opportune time, a crisis, if you will, but so far they have taken baby steps and will get pushback from the rest of the world if they try to debase the currency more, slap tariffs, or squeeze the entry ports.
FWIW, I predict more tariff slapping and WTO disputes. I expect that we will become quite disputatious in the WTO.
US Existing Home Sales (MoM) up 10%; annualized 4.53M
China’s sovereign wealth funds invest in the banks/institutions that made MBSs; their massive growth meant that other funds had to compete with China for returns – the biggest ones being oil money from the Middle East. The oil funds also are big purchasers of asset-backed securities, including real estate. But they all bought heavily into bonds, lending money to financial institutions like citi, morgan stanley, merrill – these companies suddenly had a ton of cash that needed something to buy and MBSs and CDOs were one way to do it – regulations were lax and calculated returns were high for subprime, and all you needed to make a market was a warm body that could be sold on a bigger, better home.
Nomad 18 –
Consider that areas of Europe also had large run-ups in house prices. My guess is that the expansion of markets in Eastern Europe, South America and Asian in the 1990s and 2000s increased the supply of money that had to find a place to accrue interest. Hence the reason why a peasant in Eastern Europe, a construction worker in Ireland and a day laborer in California all found ways to borrow large sums of money. So wasn’t the increase in money supply going to lift consumption regardless? The parts of the country that have lots of space and laws against predatory lending – Texas believe it or not – had a lower run up in prices (and fewer refis) but I would still guess that the average Texan consumed more goods and services.
Does the nickname for Edward get you moderated? It’s an abbrev for education, honest.
Out of Stater….probably yes, because it is also an abbreviation for a condition involving commercials showing older couples taking romantic walks on the beach.
#31 That’s what I thought. Can’t change it though – it’s in a link to the NJ Dept of the Treasury.
#18 so then, based on if the above would have happened, where would we be today? Std of living “lower: ie- less material things, more stable US and global economy?
The economy would have gone down.GDP growth ,American lifestyle,unemployment will be like today.Remember,income of 90% of Americans have been flat the last 30 years.GDP growth due to producing something ,tech bubble was last seen before Clinton stepped down. GDP growth due to the credit bubble is what held the US economy.Without credit Americans would have not been able to afford the toys an lifestyle of the housing bubble era.Hence,not much good job created.The 1.2 trillion dollar economy the housing bubble created will not be there.Tech and manufacturing jobs were sent abroad.No way we would have had a stable US economy.Trade and budget deficit will be growing the same,just like it has been growing under all the Republican Presidents.Wars will still have cost us trillions of dollars.Greenspan just kicked the can.
Sean “Consider that areas of Europe also had large run-ups in house prices.”
I spent couple of weeks in businesstrip in Europe and took a look at the house prices there. Holy sh!t!
NJ prices actually look cheap compared to Euro-houses. Now I understand why so many europeans came here with moneybags buying condos left and right. In the suburbs of two big cities (not London/Paris/Berlin, but the next tier major cities with vibrant economy), decent houses were in the range of 700-800k euros. That’s easily more than 1M timmy-dollars. Euro-salaries are about half of US salaries and taxes are higher. How they can afford the houses is beyond me.
On the other hand, property taxes are reasonable, 1.5k/year. Rule of law is applied there too, so direct comparison to the US is difficult.
Less for Self More for Others Enough for All
Stater 31
yes you can, “tiny URL” it
http://tinyurl.com/
Just had a nice chat with the Tax Court Management staff in Trenton. I was following up because they have not cashed our check which they received almost 3 weeks ago. They are so backlogged there they are now just entering filings that were received back in mid-September. I guess the populace is getting litigous.
MERS fun in dixie (Georgia)
Alovely class action suit in Georgia
http://www.scribd.com/doc/40033390/Dustin-Rollins-v-Mers-Class-Action-Suit
This is impressive, B of A managed to FULLY review 102,000 foreclosure cases, including all associate paper work in 5 days? Yeah right!
On Monday October 25, 2010, 1:04 am EDT
(Reuters) – Bank of America Corp (NYSE:BAC – News) acknowledged some mistakes in foreclosure files as it begins to resubmit documents in 102,000 cases, the Wall Street Journal said.
The bank found errors in 10 to 25 out of the first several hundred foreclosure it examined starting last Monday, the newspaper said.
AGood read from Bill Black
Foreclose on the Foreclosure Fraudsters, Part 2: Spurious Arguments Against Holding the Fraudsters Accountable
Our call for closing down control frauds and stopping the foreclosure frauds typically meets with three objections. First, it is claimed that while there were some bad apple lenders, much of the fraud was committed by borrowers. Our proposal would let fraudulent borrowers remain in homes to which they are not entitled, punishing the banks that were duped. Second, the biggest banks are too important to foreclose. And third, it is not possible to resolve a “too big to fail” institution.
Who is Guilty?
Let us deal with the “borrower fraud” argument first because it is the area containing the most erroneous assumptions. There was fraud at every step in the home finance food chain: the appraisers were paid to overvalue real estate; mortgage brokers were paid to induce borrowers to accept loan terms they could not possibly afford; loan applications overstated the borrowers’ incomes; speculators lied when they claimed that six different homes were their principal dwelling; mortgage securitizers made false reps and warranties about the quality of the packaged loans; credit ratings agencies were overpaid to overrate the securities sold on to investors; and investment banks stuffed collateralized debt obligations with toxic securities that were handpicked by hedge fund managers to ensure they would self destruct.
That homeowners would default on the nonprime mortgages was a foregone conclusion throughout the industry — indeed, it was the desired outcome. This was something the lending side knew, but which few on the borrowing side could have realized.
http://www.huffingtonpost.com/william-k-black/post_1115_b_772820.html
Moose,
Black even has a comment for you:
Using Black’s logic, Bin Laden and Al Queda are innocent since all the terrorists died in the plane crashes.
Ket,
As long as the county clerk has a mortgage recorded in the County Seat, the person occupying the property (not so much a homeowner) has a problem and will neber be able to sell, even if the court does not allow a debtholder to foreclose. No?
(41)
Where did you get that from the Bill Black article?
Joyce
http://www.huffingtonpost.com/william-k-black/post_1115_b_772820.html
Shore,
As i understand the matter, that is the million $ question. From what i have read it appears the answer would be likely to vary depending on the state laws and the exact circumstances surrounding the title. Barring the federal government running completely roughshod over the states and forcing some sort of federal property statutes, it appears that there is no easy answer.
The best guesses i have seen so far are that depending on exactly how the title was handled, the homeowner could end up with the house free and clear assuming you actually followed black letter law (hurray for banking “innovation”), or the homeowner would end up debt free but without a house, with the house reverting to the bank after the trust had sued the bank and forced them to buy it back at par. Of course the bank is probably bankrupt at that point and would need to sell off the homes that were forced back on them as quickly as possible.
This all assumes that due process and established law were actually followed in our little banana republic. If you are fettered by those pesky matters then there are any number of other “creative” solutions.
From blacks article
That homeowners would default on the nonprime mortgages was a foregone conclusion throughout the industry — indeed, it was the desired outcome. This was something the lending side knew, but which few on the borrowing side could have realized.
Now we do have a few state and federal laws addressing this very issue, but the application of the existing laws would happen to implode the banks ( they cant legally collect on loans that were made in bad fair or fraudulently) which isnt politically acceptable. If the only politically acceptable actions are ones that continue the ponzi as opposed to the actions laid down by established law, then the only question is do we end up like Russia in 1998 or Argentina in 2001.
Joyce 43,
sorry, i misread your post (regarding your post at 44)
If you aren’t fettered by those pesky matters then there are any number of other “creative” solutions.
(45) no worries
I should have said “how did you get that…”
NEW YORK (MarketWatch) — The Treasury Department sold $10 billion in 5-year Treasury Inflation Protected Securities on Monday at a yield of negative 0.55%, the first time the yield on the maturity has come in below zero. The negative real yield for the coupon indicates investors expect enough inflation to make the protection worthwhile. Bidders offered to buy $2.84 for each $1 of debt sold, compared to an average of $2.58 at the last four comparable auctions. Indirect bidders, a group that includes foreign central banks, bought 39.4% of the sale versus 34.6% on average. Direct bidders, which includes domestic money managers, purchased another 3.2%, compared to an average of 2.12%. After the auction, yields on 10-year notes /quotes/comstock/31*!ust10y (UST10Y 2.52, -0.04, -1.68%) , which move inversely to prices, stayed down by 4 basis points at 2.52%
if we are going to go down the banana republic road, can we atleast get a presidente with a little flair, or perhaps a bad ass rep!!! Corrupt community organizer just isnt very impressive in todays world of maniacal leaders. How are we going to get any respect?!?!
Citibank’s former chief underwriter has testified under oath that he, and the rest of management, knew that 60% of production was bogus in 2006 and 80% in 2007
I guess we dont need to have that imaginary Attorney General, Eric Holder look into this at all? Noting to see here move along…..
A couple of days ago, one of the articles mentioned that this foreclosure mess of robo-signing is a form vs. substance debate meaning no matter how sleazy everyone was in this whole mess, ultimately the buyer signed on to the contract. So now we have a buyer not paying up to what he’s owed. From here, I understand the jingle mail and the buyer walks away and leaves the house back to the bank. I can even understand a buyer staying in the house until the sheriff kicks him out but I can’t see how anyone can suggest that the buyer gets away free and clear without paying the debt suggested by Black by suggesting “gee, we would save a lot of time by not going after each individual buyer but just the banks”. I guess we too should just have said, oh well ,the terrorists are all dead. No one to bring this up with.
Regrettably, I have to disclose that I work for one of these institutions but since I’ve never named it before, I’m not going to now. It wasn’t by choice, my company was bought by them and my line of work brings me nowhere even close to the housing field.
Dan – apples and oranges we are not at war with the borrowers or the banks, also fraud is fraud they are all guilty. I say lock em all up (borrowers and bankers) and let them, sort it out in prison.
Hyde,
Any suggestions? How about Ray Lewis?
Testimony from Richard Bowen, Senior Vice President and Chief Underwriter for Correspondent and Acquisitions for Citifinancial Mortgage
“On November 3, 2007, I sent an email to Mr. Robert Rubin and three other members of Corporate Management… In this email I outlined the business practices that I had witnessed and attempted to address. I specifically warned about the extreme risks that existed within the Consumer Lending Group. And I warned that there were ‘resulting significant but possibly unrecognized financial losses existing within Citigroup.'”
http://fcic.gov/hearings/pdfs/2010-0407-Bowen.pdf
#38
Come one now. B of A is an easy enough target. Your article quote clearly says they review several hundered forclosures, not 102,000.
Dan,
The banks are responsible for initiating a large % of the existing loans in bad fair if not out right fraudulently. In such cases the loans are not recoverable by the banks
That homeowners would default on the nonprime mortgages was a foregone conclusion throughout the industry — indeed, it was the desired outcome. This was something the lending side knew, but which few on the borrowing side could have realized.
There are both state and federal laws that cover this. As to someone getting ahome for free, if we followed black letter law then it is likely that some people will end up with a free house. Corruption sucks and is laced with unintended consequences. prosecute the lot of them and C’est la vie. This beast is of our own (as in us as a nation) making and now we mush deal with the consequences.
The MERS debacle appears to have sidestepped so many state laws that there are probably cases where the securitization process combined with the MERS process had landed the current home owner with a clear title.
Life isnt fair, enforce the laws for all and let the chips fall where they may. Someone getting a free house is besides the point and irrelevant to the question of whether or not we should enforce the existing laws.
Whats an even bigger mess is the large % of title that will end up clouded because of the fabulous financial innovation utilized.
Hyde [40];
The elites and the sheeple still beleive the foreclosures are the problem. The bubble was the problem, the foreclosures are the solution.
I agree the process should be carried out with integrity. But I moreso believe that its more important that it be carried out timely. Call it a top-down management bias: its more important to have swift and certain action (CO on the field makes the call, and the troops march on it) than every single decision be analyzed and agonized over in pursuit of infalabilty.
Look at it this way – the affidavit (upon penalty of perjury) is meant to lend creedance to the statements made in it, beyond what would ordinarily be given any ordinary out-of-court written statement (the hearsay rule – which has its exceptions, one of which is ordinary business records, but that gets into the weeds). We now have reason to beleive that the affidavit made by the robo-signer is worthless, which means that the statement is hearsay like any other.
1) The court can decide to admit the hearsay anyway, even if it is given less weight that it otherwise might have been; and
2) The other side is free (as it always was) to present its own evidence that the contents of the hearsay/affidavit are innacurate, and given the devalued credibilty of the hearsay, ANY contrary evidence is likely to be believed. The only probem for the deadbeats is that the underlying statements – amount of mortgage; amount of deficiency/arrearage; no mortgage owed, etc. – are proabbly spot on.
The sad fact is that the deadbeats have no defense other than “HE LIED ABOUT REVIEWING THE FILE!” Robo-signer may have lied about reviewing the file, but the underlying facts in the affidavit are largely unassailable (or they would have been assailed).
bad fair = bad faith
Hyde [40];
Also, that quote discusses the allocation of resources for criminal prosecution (for example criminal fraud). That’s a very different matter from crafting a rule to be applied between private parties in a civil action to collect on a mortgage note.
More pitchforks and torches for BAC this time coming from Europe.
http://blogs.forbes.com/schifrin/2010/10/25/a-european-lynch-mob-is-coming-for-bank-of-america/
Moose,
forget the deadbeats, that is a contractual issue. The question is rule of law. The banks issues hundreds of thousands of FALSE affidavits. That alone should have the associated banks shut down and broken up.
there is also the small issue that in general the process used means that the only party that has standing to foreclose is the trust which it just so happens never actually took possession of the note yet paid the banks for the notes. The banks and the servicers in general have no consideration involved (each was paid already) and hence no standing to foreclose. Black letter law forbids the notes being transferred into the trusts/REMIC after the fact and hence the only way for the banks to have standing to foreclose is for the trusts to sue the banks and force the banks to buy back the mortgages at face value ( KABOOM got the banks).
Now lets not forget about the little issue of state property laws. Diffeerent states have different legal requirements on how you transfer a title in a transaction. Any title handled by MERS bypasses virtually all state laws and just opened a whole other pandoras box.
The banks are openly and brazenly looting the nation and all your concerned about is someone not paying a mortgage???? I understand the distaste, but you re more worried about the shoplifter then you are about the guy raping your wife.
Moose,
That’s a very different matter from crafting a rule to be applied between private parties in a civil action to collect on a mortgage note.
Do you honestly believe it is in anyway credible to allow existing foreclosures to continue without a wet ink note given that we now have testimony from bank employees in which they personally were responsable for hundreds of thousands of acts of perjury?
The only defense that should be needed at this point is to point out that the party attempting to foreclose doesnt have the original note.
I think that you might be running roughshod over your own analogy. What Black essentially said was that the banks were the masterminds behind this fraud.
If we take your analogy of terrorism and terrorist organizations to bank customers and banks to its logical conclusion I think that you will see what Black is trying to say.
Bank (terrorist organizations) recruited bank customers (terrorists) to purchase homes with fraudulent appraisals and incomes with the intent that at some point they would default (crash planes) so that they could make money on the servicing fees (terrorize people).
Black doesn’t like that bank customers (terrorists) are going free but the reality is that we don’t have the resources to find and correct every bad apple. Black proposes that we go after the banks (terrorist organizations) for promoting a culture of failure in which they get rewarded. This action in turn will reduce the number of failing bank customers (terrorists).
If you look at it this way, we aim to change the way things work by reducing the number of failed mortgages by putting the onus on the banks to make good mortgages. We assumed that banks were doing by default, and they were historically, but things changed and they stopped holding their own products. We either need regulators, lawmakers, or the courts to return sanity to the banks perhaps we need all three.
Hyde – The SEC is in possession of a Memo from Angelo Mozillo in which he called Countrywide subprime loans toxic, yet the SEC so far as we know have not recommended Mozillo to the DOJ for prosecution. They just took his 23 million fine and settled. Countrywide originated $1.4 trillion in mortgages from 2005 to 2007 alone, all the while Mozillo as dumping stock, he said these loans were toxic yet did not tell shareholders. They have him dead to rights and it’s been over 2 years now, he should be cuffed and perp walked at least by now.
re: William Black – He is basically saying Washington DC has been captured by the special interest lobbyists and we don’t have the stones to do what was done back in the 80s, no perp walks and no show trials. At least if the government is going to give away taxpayer money in bailouts we could at least have a few show trials.
For a frame of reference during William Black’s time as a regulator, during the S&L crisis the economy and the banking industry were actually in much worse shape heading into the S&L crisis, with the prime rate having recently been at 21.5%, unemployment near 11%. The real estate, energy and agriculture sectors depressed, the thrift industry insolvent and money-center banks loaded with Third World debt.
They still managed to fix the mess and prosecute thousands for fraud.
It’s time to clean up this mess already..
Dan 54
I could go for Ray Lewis!
Nicholas,
Enjoyable reading. Thank you.
Hyde,
Regarding unintended consequences, will we start seeing people enter contracts not for the purpose of fulfilling them but instead trying to get away with paying nothing due to a technicality? Would another unintended consequence be the end of mortages to buy houses?
If the current bank can not prove ownership of title and the current mortgagor don’t have the title.The last title holder will be the clear holder not the mortgagee.If the homeowner moving back in, claiming ownership of a house with no title is trespassing.The clear owner will be the last owner of the title listed on the deed.
Nicholas,
Quick bank defense would be that the government told them to make loans they didn’t want to under the threat of losing the right to do so (The Jamil/Janet Reno defense)
Yome
last title holder will be the clear holder not the mortgagee
My understanding is that in many cases of loans that have been securitized the last holder of the title was already paid for it so has no further consideration in the matter. In the case of a securitized loan, the bank paid the previous owner for the title and the trust paid the bank for the title, yet the bank never transferred the title and cannot legally transfer the title after the trust was formed. In some states this may result int he current homeowner holding a clear title and the trust with an unsecured instrument which it would have to sue the bank for.
Dan,
Enforce the laws and cut out the crap. If banks were held to the letter of the law, then much of the securitization that took place appears to have been fraudulent and should have been stopped long ago under existing laws. Force banks to hold the loans they issues similar to before the repeal of glass-steagal, then the banks will make damn sure that they only hand out performing loans and not designed to fail NINJA loans. Its probably too late to run out and get a home loan just for the purpose of gaming it
Dan,
When I argue with my dad about the MBS issue and subprime lending, he always says that congress made the banks make the loans. How they forced the banks to do this is the unanswered question. Me thinks congress said they would like to see less qualified people in homes, but the banks were so blinded by the short-term profits and bonuses that they ignored the reality that occurs when you loan to those who can’t afford it. They also forgot how a subprime issue would eventually cause it spread to prime.
So when people argue that it’s the borrower who is to blame…I say it was the banks responsibility to not make loans to people with no skin in the game. The borrower was actually smarter than the bank in this case.
Hyde,
And the VP would be Eric Ogbogu, the “WE MUST PROTECT THIS HOUSE!!!!” Under Armour guy.
Present homeowner is scam by the bank that don’t have right on property.The title holder will be the previous owner (Seller)that got paid big bucks,now have the right to the property.
Dan
Regarding unintended consequences, will we start seeing people enter contracts not for the purpose of fulfilling them but instead trying to get away with paying nothing due to a technicality?
This isnt new, it occurs in business all the time. Each party usually has a qualified attorney involved so as to cover their respective interests. Buyer Beware.
Dan 72
I dont know, how about some ex special forces guy with all kinds of tattoo’s who smokes cigars constantly?
Hyde 75, Not sure about for VP but definitely a Cabinet position, if not speaker of da houz.
Dan,
I agree that the government told them to make loans. I graduated in 2003 from the University of Maryland and the graduation speaker was the CEO of Fannie Mae. He was talking about what he has done for minority and disadvantaged lending and all the good he was doing.
I believe that he was doing so under the direction of those in government giving him the green light to provide fair access to capital for minorities. The easiest way to do this is to loosen lending standards for everyone.
While the government may have asked them to make more loans to minorities they certainly didn’t tell them to commit wholesale fraud and then lie to cover up the fraud all while knowing that the products were toxic.
Lets take the argument to another more familiar territory. Lets say you are a serving member of the military and a superior officer gives you an order to commit a crime. Are you responsible? The answer is that if you knew what you were doing was a criminal act, then yes, you committed a crime and are punishable under law.
I don’t care if the banks were doing the bidding of the government, if the laws were such that they were committing punishable acts then they still are liable, government or no government.
#65 – Juice –
As I said a week or two ago, campaign finance reform would change things significantly. Would not eliminate all the ills but certainly take a chunk away.
Does not matter if you are a Dem, Rep, Indep or Teabagger, the cost to run a campaign is so great now that the only way to win under the current environment is to raise big $$ and the big contributions come from special interests for the most part.
Perhaps someone can figure out the magic to run a Gorilla campaign similar to a start up company that runs advertising and marketing on a shoestring budget.
last holder of the title was already paid for it so has no further consideration in the matter
This is what the banks are trying to prove,if they have clear title to the property.In this case the one that can prove clear title will own the property.And who has it?
Last holder of the title may not have been the last homeowner but merely the last bank who held the mortgage of the last homeowner.
#80
That is true! In litigation,the one with the clear title will own the property
81: That’s great. My house is probably owned by a dead guy’s estate.
Yome,
Lets see the banks prove chain of custody of the title wihtout using fraudulent documents. In many cases its more likely to snow in hell.
Hyde [62, 63];
I really can’t get exercised about the robo-signer issue. The banks created a process by which paplegals did the leg work. However, many states required that a coporate officer of certain title sign the affidavits. Well, there simply weren’t enough “undersecretaries to the corporate vice-deputy director” in existance (by a factor of 10 or more) to personally do all the leg work and sign. So one person signed for the work of others. That person believed in the system, and therefore believed that the information they were signing was accurate. The court can give that belief as much or as little creedance as it will. I really don’t think that jailing a first-line supervisor in Florida who took the promotion for the princely sum of $40k/yr salary and a better parking spot teaches anybody a lesson.
The fragility of ‘the system’ is that we can’t possibly police it adequately in the face of rampant non-compliance. Ans that’s exacly what’s coming if the deadbeats get two (going on three and no end in sight) years of rent-free living while sticking their thumb in the eye of their lenders. If there are no practical consequences to default, then defaults will abound. The consequences need to be so severe that ordinary law-abiding people don’t even want to contemplate the risk of enduring them.
Likewise there need to be consequences to the bad decisions made short of default (like no systematic write-downs for those who bought at the top of the bubble but just don’t feel like paying anymore), or they will proliferate as well.
On the bank side of the ‘house’, the MERS issue can be resolved by the court simply ignoring MERS and looking up the chain of title to the last holder of the note. That holder will have foregone the benefits of recording by choosing to participate in MERS. Maybe the deadbeats get wise and start selling quit-claim deeds to who will give them a quick 5 figures for them. Then those speculators can record their deeds and fight it out in court with the remains of the defunct mortgage originators who wrote the note and sold it to MERS.
JJ,
“Anyone who owns stocks in banks with relatively large MBS exposure is not investing, they are gambling that the losses will not be more than management is telling them. There will be no bailouts (at least I hope not) this time around. Fool me once, shame on you; fool me twice, shame on me. There will be little sympathy for shareholders or bondholders this time, if it comes to that.”
http://www.minyanville.com/businessmarkets/articles/subprime-mortgages-putbacks-bank-of-america/10/25/2010/id/30739?page=full
Hey guys,
Look what I read online just now. I find this mildly humorous since my father read newspapers every day and I don’t recall ever reading one in my adult life.
http://finance.yahoo.com/news/US-newspaper-circulation-down-apf-3067049743.html?x=0
NEW YORK (AP) — Circulation is still dropping at U.S. newspapers.
Figures released Monday by the Audit Bureau of Circulations show average daily circulation fell 5 percent in the April-September period, compared with the same period a year earlier.
The latest decline was not as steep as the 8.7 percent drop seen in the previous reporting period, which ran from October 2009 through March of this year.
Sunday circulation fell 4.5 percent in the April-September period. That smaller than the 6.5 percent decline in the six months before that.
Several trends factor in the decline. There’s the rise of free news on the Web. And publishers have been looking to offset losses in advertising revenue by raising newsstand and subscription prices. Some newspapers have reduced delivery to unprofitable areas.
US newspaper circulation down 5 percent
hype (17)-
You don’t want to meet me. I’m not very pleasant to be around.
84: Moose,
Just buy a house already.
How quaint. A whole thread, discussing this antiquated “rule of law” concept.
Wait ’til after the election. The banks are gonna blitz DC with so much payola, you’ll see BAC, WFC, C and JPM foreclosing summarily and using goon squads to toss people out in the street.
Our only choice at that point will be whether to submit to our bankster overlords or begin an Argentine-style sacking of the country.
* BAIR: LITIGATION FROM SERVICER ISSUES COULD BE `VERY DAMAGING’
* BAIR SAYS FORECLOSURE PROBLEMS WILL REQUIRE `GLOBAL SOLUTION’
* BAIR: CRISIS REQUIRES `DECISIVE’ ACTION FOR MORTGAGE SYSTEM
* BAIR: FDIC SECURITIZATION RULES `CONSISTENT’ WITH DODD-FRANK
* BAIR SAYS CRISIS REVEALED `CRITICAL FLAWS’ IN MORTGAGE FINANCE
* BAIR SAYS GOVERNMENT SUPPORT MUST BE EXPLICIT IF OFFERED
* BAIR SAYS `MORE PROBLEMS’ WILL ARISE IN MORTGAGE SERVICING
http://www.zerohedge.com/article/bofa-takes-out-lows-sheila-bair-says-servicers-issues-could-be-very-damaging-require-decisiv
relo (88)-
Hardy har. Let’s see Moose get title insurance on whatever 450K short sale hovel catches his fancy.
Lets not forget that it now appears that a personal Bankruptcy could wipe out their Mortgage Debt and leave them with the house due to their mortgage being an unsecured debt. (varies from state to state based on bankruptcy laws).
Where some of NJ’s property taxes go:
What NJ school employees get for 1.5% of their base salary:
http://tinyurl.com/2wl4tm
What local school districts pay for the coverage:
http://tinyurl.com/25mjrh9
What towns will pay into their police and fire pensions in 2011:
http://www.state.nj.us/treasury/pensions/epbam/exhibits/pdf/2011-pfrs-billing.pdf
What towns will pay into their other public employee pensions in 2011:
http://www.state.nj.us/treasury/pensions/epbam/exhibits/pdf/2011-pers-billing.pdf
(Thanks, Hyde!!)
Ocuh, thats going to leave a mark!
First Arizona Savings of Arizona Fails – FDIC Finds No Buyer and Depositors Lose $6 Million
By Michael Zielinski on October 22nd, 2010
October 22, 2010- There are likely to be some shell shocked depositors tonight at First Arizona Savings, A FSB, Scottsdale, Arizona, who stand to lose $5.8 million in uninsured deposits. After the Office of Thrift Supervision closed First Arizona and appointed the FDIC as receiver, the FDIC was unable to find a buyer for failed First Arizona.
Hyde [92];
Not likely. BK court most likely to impute an equitable mortgage on the property.
Relo [88];
You got one to sell? I’ll give you $50k for it.
[38] hyde
It’s possible if you put enough bodies on it. I suspect my former employer in DC is making a boatload off of BofA over this.
[86] nicholas
well, of course. I, for one, am apparently not fluent in the NYT sections. Apparently, they are written in a language that commoners cannot comprehend (though, for some reason, I can read all of it quite well. Guess having graduated h.s. before the teachers all started lowering standards wholesale probably had something to do with that).
I love the NYT ad where the dork says “I’m fluent in three sections, actually.” Gee pal, I am fluent in all of them. I speak English.
Moose,
Take a look-see:
<i.The Motion was filed by MERS “as nominee [for] HSBC Bank USA, National Association, as Indenture Trustee of the Fieldstone Mortgage Investment Trust Series 2006-3.” Even assuming that MERS as a “nominee” had sufficient rights and ability as an agent to advance its principal’s stay relief request, there remains an insuperable problem. The Motion provides no explanation, much less documentation or other evidence, to show that the Fieldstone Mortgage Investment Trust Series 2006-3 (as an entity) or HSBC Bank USA (as that entity’s “indenture trustee”) has any interest in the subject Note or the subject Deed of Trust.13
http://market-ticker.org/akcs-www?singlepost=2226231
I’m working on getting my medical bills. Keep in mind, this is the first medical claim of my adult life. Every prior was covered by league insurance and I didn’t do a darn thing.
My lord is it a mess! Not only do the invoices and explanation of benefits rarely match up, but when you call these medical providers to pay them, they have all outsourced their billing to clueless call centers. Of the four providers in the emergency room, the ER physician billed the insurance company properly and the insurance company and the hospital sent me a bill. Same with the company the hospital contracts to provide me with the crutches, although they can’t provide proof of payment. The radiation techs billed me directly and did not contact my insurance company and the radiologist who examines the x rays has not yet billed either of us. The Short Hills Surgical Center do seem to have their ducks in a row as they both billed me properly and I received their bills and the insurance OK before any of the emergency room bills. What a complete and utter joke. It took me nearly three and a half hours on the phone (on hold from people who want me to pay them promptly) to get to this point.
I just don’t get it how it can be this complicated. And of course, the amount the providers try to obtain from the insurers is mind boggling. The surgery center asked for 20K for a half an hour procedure. They still got $3700 from the insurance company and $1300 from me. No wonder they could afford to do their bills promptly.
And why aren’t HSAs connected to your health care insurer. Again, it’s a complete joke.
On the bright side though, I only owe one copay on the physical therapy and then I’m good through Feb. 1st. I will make sure I go to the doctors for every possible test between now and Feb. 1st since I’m due and I’ve maxed out all of my out-of pocket expenses. Anyone need any drugs???
Moose
In this case the mortgage is an unsecured loan and if the state has string homestead laws then it could be possible for them to get the title free and clear.
http://www.scribd.com/doc/39890166/Sheridan-Decision-Idaho-Bkr-j-Myers
[71] libtard
“How they forced the banks to do this is the unanswered question.”
Since you asked. Here is an excerpt from an order approving an application by PNC under Section 3 of the Bank Holding Company Act:
“The CRA requires the federal financial supervisory agencies to encourage insured depository institutions to help meet the credit needs of the local communities in which they operate, consistent with their safe and sound operation, and requires the appropriate federal financial supervisory agency to take into account a relevant depository institution’s record of meeting the credit needs of its entire community, including low- and moderate-income (“LMI”) neighborhoods, in evaluating bank expansionary proposals.”
Now, how do you think a regulator “encourages” such lending? In the case of an application for approval by a regulator, the bank had better have a “high satisfactory” rating under CRA. If it doesn’t, it better be prepared to tell the regulator how much money it plans to give to poor people.
Also, google around for comment letters from groups like Greenlining Institute, NCRC, and my old nemesis, Matthew Lee at Inner City Press/Community on the Move. That will give you a flavor of how this battle gets fought.
plume (97)-
I would pay big money for someone to track down that NYT ad loser so I can beat the crap out of him.
lib (99)-
Yeah, but I don’t think you can get a script for Hald0l for an Achilles tendon injury.
“Anyone need any drugs???”
The funny thing about this fraudclosure thing is that the guys pounding the table about rule of law can only invoke “fairness” as a reason to let banks essentially flout the law and do whatever the hell they want in order to seize collateral.
I wish one of the doofs would just come out and say that some animals are more equal than others (Moose?).
At least we’ll know who’s who and what’s what at that point.
Lamar,
When the banks start to buy table dances in DC to speed up foreclosures, just who the hell is going to be buying all the empty houses with titles no one can find? Gonna drive down values –
Libtard – 99
how would you like to be a senior citizen with a couple of trips to the hospital for big surgery and have to wade through that pile.
FYI – your health insurer in their contract will indicate the provider has a specified amount of time to do the billing properly. Note that if a claim is rejected, they should have documentation of this because sometimes, years after the fact, the billing entity sends an unpaid to a collection agency and if the biller / service provider has not acted within the guise of the contract, they are SOL.
Ever wonder if the OR operates (no pun) in a manner that is as mucked up as the billing dept? Kind of frightening eh.
disregard typos, too lazy to address them today
Lamar [104];
I’ll be the first to admit that anyone can get as much justice as they can afford.
I have a proposal – triage. Let’s line up all the forclosure ‘victims’ who HAVEN’T defaulted on their payments and deal with those cases first. Bring copies of your cancelled checks. Should be able to bang that out in less than a day.
The next day, we can look at the other 99.999% of foreclosure actions where the borrower has in fact defaulted and figure out who is entitled to the spoils after the proceeds from the Sheriff’s auction are depositied with the court.
Lawyers’ Utopia:
http://www.ritholtz.com/blog/2010/10/full-text-of-letter-to-bofa-from-ny-fed-maiden-lane-freddie-mac-pimco-western-asset-mgmt-neuberger-berman-kore-advisors/
JJ,
Here’s a good one for you:
http://www.businessinsider.com/bank-of-america-mortgage-report-2010-10#-14
Do you see JPM anywhere on there?
95: Moose,
Want to move to FL? You can take your pick for that price.
105: Nomad,
Moose is going to buy them all with his paper route money.
Yawn…..
A bunch of lottery ticket buyers disguised as mail order lawyers filing class actions for a few hundred dollars and a couple dozen hours work on papers…..yeah, a lot going to come of that.
The HuffPost ‘legal analysis’ concluding houses ought to be given to the deadbeat…errrr…underprivileged who have had their rights trampled upon by the Man. Yeah, big surprise there, too.
Moose nailed it. You pay, you keeps. You don’t, you’re out. And let God sort ’em out.
At least we’ve been able to avoid so far the frequent comparisons to Vornado, et.a l.
‘How come no one is up in arms when they walk away from their obligations?’
Because, Einstein, they are actually walking away, meaning not simultaneously repudiating the debt and trying to keep the asset. Think I recall something from early childhood about cake and eating it too that may be relevant here….especially since that is the approximate grade level of the debate.
Just remember none of the the HuffPost, the class action crowd, nor the AGs are bidding for YOU.
oops, ‘is’ bidding…
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