So much for voluntary foreclosure abatement:

“Some mortgage companies had stopped foreclosing on borrowers as they waited for details of the Obama administration’s housing-rescue plan, announced in February, which provides incentives for mortgage companies and investors to reduce borrowers’ payments to affordable levels. Others had temporarily halted foreclosures while they put their own programs in place, or in response to changes in state laws.

Now, they have begun to determine which troubled borrowers are candidates for help, and to move the rest through the foreclosure process. The resulting increase in the supply of foreclosed homes could further depress home prices and put additional pressure on bank earnings as troubled loans are written off.

Some of the mortgage companies are themselves receiving funds under the government’s financial-sector bailout, which could make their actions politically sensitive. But mortgage companies say they are taking steps to keep borrowers in their homes, and are only resorting to foreclosure when there are no other options.”

We saw foreclosure sales drop in the second half of 2008 as banks employed all manners of accounting tricks to avoid actually reporting delinquencies. We’ve previously mentioned that the voluntary foreclosure abatements were merely kicking the can down the road. So to, were the bank gimmicks like extending the date of delinquencies from 60 to 120 to 180 days. As they run out of tricks, foreclosure-related filings increased in February 2009 almost 30% from February 2008, according to RealtyTrac.

And the backlog of “seriously delinquent loans” keeps growing . . .

>

Previously:
“Reluctant Banks” Let Defaulted Borrowers Stay in Homes (April 2008)

http://www.ritholtz.com/blog/2008/04/reluctant-banks-let-defaulted-borrowers-stay-in-homes/

Source:
Banks Ramp Up Foreclosures
RUTH SIMON
WSJ, APRIL 15, 2009

http://online.wsj.com/article/SB123975395670518941.html

Category: Credit, Legal, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

18 Responses to “Voluntary Foreclosure Abatements Ending”

  1. Bruce in Tn says:

    Barry,

    Thanks. I liked the Jim Welsh letter, too..

    I would prefer to think this might be over this year, but I can’t get my rose-colored glasses to fit any longer…I think my pinhead is shrinking..

  2. Bruce in Tn says:

    BTW…please send money to Japan….if you think we have it bad, just look at today’s numbers….

    http://www.rttnews.com/CorpInfo/EconomicCalendar.aspx

    4/15/2009 starting at midnight…

    This looks like the dismemberment of an entire country to me…

  3. danm says:

    What Japan is getting in its production, the US is getting in its black matter economy: financials. But it’s not letting us see the real numbers!

  4. Bruce N Tennessee says:

    http://money.cnn.com/2009/04/10/news/economy/retail_malls/index.htm?postversion=2009041411

    Malls shedding stores at record pace

    “Unfortunately for retailers, it’s only going to get worse, according to Reis’ forecasts….”

    I posted this at the end of the retail sales blog, but I was pretty busy all day yesterday, didn’t get to put in my two cents most of the day….

    In regards to my economics calendar post above, I notice that not just Japan, but countries like Germany with their wholesale sales numbers and other current or leading indicators look as though they are not improving…South Africa, Finland, you name it…

    It is STILL synchronous global deleveraging…good luck…

  5. Stuart says:

    “as banks employed all manners of accounting tricks to avoid” …….

    WFC, GS come to mind of late. Frankly, reports by banks, or by those in bed with banks aren’t worth the paper they’re released on. State aided and abetted fraud.

  6. Bruce N Tennessee says:

    OK…salt mine is starting but I got this from CR this morning…and this might be the ultimate irony…that the golden state takes down the US government…sorry to monopolize, but these things interested me this am….

    http://www.sacbee.com/topstories/story/1781008.html

    California asks feds to back its IOUs

    “Not everyone is enamored with the idea of federal help. In a recent position paper, Orange County Treasurer Chriss W. Street suggested federal guarantees of California’s notes could threaten the U.S. government’s own credit ratings.”…..

  7. cjcpa says:

    Bruce,
    so SRS looks to head upwards?

    Funny thing is, based on CR postings since the summer, srs should have been headed upwards 6 months straight. But the price has obviously been up and down.
    I don’t own it b/c it just looks crazy. Big disconnect between economic fundamentals…. down fast and down slow…. and the stock market prices which go way up and way down.

    As I have posted before. Some exposure to something that might give some gains is desired, but it does not appear to be easy for the part time observer. (I know, if it was easy, everybody would do it)

    cjc

  8. larster says:

    Why should taxpayers in other states support Californians who will not up their ante or cut spending to solve the financial problems? This isn’t a Michigan or Ohio situation, just people that went on scholarship with Prop 13 and want to stay on the dole. For that matter, why should other countries buy our debt, if we are unwilling to pay for our gov. This is really a thorny issue for the administration due to the size of the CA economy.

  9. Joe Cornole says:

    Hey Barry Rit… (no free pub here), some “blahggggger”. Next thing you’ll do is call for bank nationalization. Wait, you already did that. So sez me, the king of all business media, Joe Corn Kernal. I’m talkin’ irresponsible!

  10. rktbrkr says:

    Mr Mortgage site shows astounding numbers for 1Q foreclosure sales in CA. He figures only 30-40% recovery of notes after expenses and this was during a time of moritoria while banks shadow inventories built up. Lots of built up sellers demand. How low is low? If we can see this storm a brewing can Tiny Tim’s private partners be missing it?

    http://www.fieldcheckgroup.com/2009/04/15/4-15-near-real-time-ca-distressed-resi-whole-mortgage-loans-property-valuations/comment-page-1/#comment-125

  11. InvestmentAnalysis says:

    Barry,

    You should watch this video. It’s damn funny.

    http://www.youtube.com/watch?v=4Z8ojO_sTF4

    Maybe it’ seven postABLE. :)

  12. franklin411 says:

    This should give some pep to the drive for cramdown legislation, which the banks had successfully blunted in the Senate.

  13. rktbrkr says:

    Good thing the stress test proves the banks can handle this and we don’t have to worry about double digit unemployment and a tsunami of foreclosures jepordizing their profitability and Tiny Tim can always construct Treasury/fed/FDIC guarantees against cramdown losses on banks, they can just footnote it like GS orphan month.

  14. leftback says:

    Cramdowns and bondholder haircuts are ahead. It’s going to be an ugly summer.
    Whatever comes out of the stress test dog and pony show you know you can sell any rally in the XLF.
    One thing seems certain, the mall REITs are going down, there will be no bailout for CRE.
    Plenty of meat left on the bones of those stocks as well, I am sure this will be a good summer for SRS.

  15. Mannwich says:

    @leftback: Agreed. I think SRS has at least one more (maybe more) wild run to the upside in it. Wait for it. I know I am.

  16. leftback says:

    @MW: You betcha. (Minnesota joke)

  17. Paul Jones says:

    In Milwaukee, For Sale signs are popping up like dandelions.

  18. [...] far, all the foreclosure prevention plans that rely on voluntary participation from the banks have failed. If cramdown is removed from the [...]