US Foreclosures: Kicking the Can Down the Road…
By Barry Ritholtz - June 19th, 2011, 11:00AM
click for ginormous graphic
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Today’s WTF data point is how long it will take to work through the backlog of foreclosures at the current pace:
“In New York State, it would take lenders 62 years at their current pace, the longest time frame in the nation, to repossess the 213,000 houses now in severe default or foreclosure, according to calculations by LPS Applied Analytics, a prominent real estate data firm.
Clearing the pipeline in New Jersey, which like New York handles foreclosures through the courts, would take 49 years. In Florida, Massachusetts and Illinois, it would take a decade.
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Source:
Backlog of Cases Gives a Reprieve on Foreclosures
DAVID STREITFELD
NYT, June 19, 2011
http://www.nytimes.com/2011/06/19/business/19foreclosure.html
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June 19th, 2011 at 11:22 am
Noun 1. t-scope – scientific instrument used by psychologists; presents visual stimuli for brief exposures
tachistoscope
http://www.thefreedictionary.com/t-scope
in other Words, this has, absolutely, Nothing to do with the current state of Insolvency–enjoyed by many of our Largest Banks..
and, Shazzam!, from ~3 years ago..
You Know The Banking System Is Unsound When…
Mike “Mish” Shedlock
Jul 24, 2008
1. Paulson appears on Face The Nation and says “Our banking system is a safe and a sound one.” If the banking system was safe and sound, everyone would know it (or at least think it). There would be no need to say it.
2. Paulson says the list of troubled banks “is a very manageable situation”. The reality is there are 90 banks on the list of problem banks. Indymac was not one of them until a month before it collapsed. How many other banks will magically appear on the list a month before they collapse?…”
http://www.321gold.com/editorials/shedlock/shedlock072408.html
~~
and, related.. http://4.bp.blogspot.com/-i1psb813OZs/Teo1imGgYeI/AAAAAAAAAv8/TV9UgXhy_sQ/s1600/Dow+Gold+Chart.PNG
100% ‘Rally’ ?? hmm..must have ‘missed it’ (as if..)
June 19th, 2011 at 12:35 pm
The article states there are 213,000 houses in severe default or foreclosure in all of New York state vs 97,000 in Florida’s Dade (Miami) county alone. Wow.
June 19th, 2011 at 12:39 pm
The 62 years number sound plain incorrect. The system is not overloaded. Banks have simply stopped foreclosing.
Ignoring the very real problem that in some cases banks are not able to cure defective paper-work, Banks are now reviewing procedures and making changes. The lawyers working for the banks are no longer willing to show up in court with shoddy paper-work. I guess what I’m saying is I fully expect a spike up in foreclosures in the not too distant future.
June 19th, 2011 at 12:48 pm
“In New York State, it would take lenders 62 years at their current pace, to repossess the 213,000 houses now in severe default or foreclosure” – why the hell is anyone paying their mortgage??? What’s wrong with you, people?!
Actually, imagine what would happen if Anarchists (or ZeroHedgers) get a hold of this statistics and convince a substantial chunk of the population to stop making payments? Surely the Fed won’t be able to cover up the problem that’s 20-30x greater than the one from 2007-2009?
The way to “break” the Wall Street and its grip on Washington, DC is to stop making payments en masse.
June 19th, 2011 at 1:29 pm
http://www.youtube.com/watch?v=8Vgkn_gWBwg
June 19th, 2011 at 1:38 pm
Whatever happened to the commercial with the middle-aged dad cutting the grass on a riding lawnmower while the voiceover says “I’m in debt up to my eyeballs”? Hard to imagine it would ever stop running.
June 19th, 2011 at 1:52 pm
Just delays the pain and fools people into thinking they are getting a bargain. They aren’t. Screws renters, and honest people paying their mortgage every month as well as new buyers.
We should never have let it get this far and if we double dip, I seriously hope there’s some hell to pay ‘at the top’.
June 19th, 2011 at 2:17 pm
Yves take http://www.nakedcapitalism.com/2011/06/more-dubious-research-it-would-take-62-years-in-new-york-to-repossess-the-homes-in-severe-default-or-foreclosure-2.html
June 19th, 2011 at 2:17 pm
What is starting to get real bizarre is the lack of any chatter amongst policy makers on addressing the problems that all this securitization is causing. None, you get guys like BR, Whalen, and White who laid it out but no one who can create the political will cares.
June 19th, 2011 at 2:24 pm
Following up on sechel’s comment, reasons things are going slow is that banks aren’t moving forward and that courts are insisting on pesky details, such as that the banks must comply with law, be able to demonstrate that they actually own the loan and have the right to foreclose, etc.
As an economic matter, we’re better off with fewer foreclosures, because it means some have more money to spend, stimulating a sluggish economy. However, the prudent among us feel that that would be rewarding profligacy, which would be unfair. Basically the trade-off is between a justified feeling of injustice and having more money in our pockets as a result of a stronger economy.
June 19th, 2011 at 3:12 pm
Arizona looks pretty good for a change.
June 19th, 2011 at 7:28 pm
Whenever I see comments about nobody cares, nobody is doing anything, etc, it brings to mind that the entire system is built on a foundation of sand (debt). To change the capitalist system we have is like trying to change, well mother nature. The system is so big, so entrenched so unmovable, it seems impossible to me to change and certainly any changes will be long and painful. Here’s several reasons I don’t see much meaningful change coming:
-Entire groups of very rich folks with lots of money are in control, they are not going to give up control.
Reminds me of the saying; he has the gold makes the rules. The gold is increasingly finding its way to the top 2%.
-Our Supreme Court is the most business friendly in history according to Fortune. Re the recent Supreme Court decisions that endorsed corporations as people with all of the rights but none of the responsibilities. We are truly a corporateocracey. (I’m sure that is what the founders had in mind when they wrote the Constitution, NOT)
-A political class that is beholden to the rich folks
-Mass communication that is owned and controlled by very rich, very conservative people
-Debt in the US that is beyond anything that will ever be paid back
-Unregulated derivatives with trillions (some $600 trillion world wide) in face value, securitization, high frequency trading, insider dealing, insane compensation
-We are moving at increasing rates into the land of extremistan (read Taleb’s BLACK SWAN) and believe me it isn’t a good place for the vast majority of people to live
-A tremendous war machine that is very expensive and very much a drain on our country
-Limitations on new country to open and with resulting limits on the natural resources to be exploited
So for a lot of reasons, I don’t see things really improving. When the financial mess hit the fan in 2007/2008 I said then I hoped the people in charge are a lot smarter than I am, because I saw no quick or easy way out of the mess (a mess defined by huge amounts of debt that couldn’t be repaid) . I think my fears are coming to pass, nobody has a clue. We will jerk from one thing (inflate and devalue) to cut the budget to the bone. The result I’m afraid will be infamous Clang bird scenario, where the bird flies in ever decreasing circle until it flies up its own ass with a resounding clang.
June 19th, 2011 at 8:06 pm
Residential RE in a macro sense will turn around eventually. Some are saying 2032-33, so we’ve got that going for us…that and total consciousness.
June 19th, 2011 at 8:16 pm
Is this the same LPS that’s being served with criminal investigation subpoenas around the country relating to mortgage fraud and unauthorized legal fee splitting? Or do I have them confused with someone else?
June 19th, 2011 at 8:59 pm
I can’t believe that the lack of foreclosures in NYC is just because of legal paperwork. The pace is way too glacial to be explained by paperwork. No, the banks aren’t foreclosing because they don’t want to foreclose, and/or the courts won’t let them. Real Estate prices in NYC are very high. The banks can currently carry the loans at full value. There has to be a conspiracy to prop up the market by keeping the rate of foreclosures to a trickle. There are probably only a few big banks that do business in NYC real estate, given the unique nature of property law in that city. It would be easy for a few big banks to make a deal with the real estate industry and city government to keep foreclosures down. Alternatively, the government could have told the courts to deliberately slow-walk the foreclosures in order to prevent a major collapse of major NY banks. Both explanations could be true.
June 19th, 2011 at 10:16 pm
I’m wondering how property taxes fit into the future sale prices .. I believe taxes will be tacked onto the total sale .. but are the accrued taxes at the last sale price or the new just arrived price .. are taxing bodies taking all this in stride? This fact should have a time limiting effect. Beyond that the tax sum will be getting measurable to many.
June 19th, 2011 at 11:58 pm
what turns irony into tragedy is ignorance. ignorance of course is defined as “having the knowledge but choosing to ignore it” and not what most people would call simply “being an idiot.” housing not being solved is “due to ignorance” and is inexcusable. we’ve had the resolution trust authority with the 80′s variant so we know the value of clearing the markets and we know exactly what needs to be done. the irony of course is “the folks that got cleared were the loudest complainers when the market soared” after that amazing success. HELLO–CAN YOU SAY GREED IS ALWAYS THE ISSUE? the bank of course was Continental Illinois “and it was nothing” but “still it was something” to get ride of it and they complained the loudest when upon rising above the greed the market “moved higher and then some.” Here “we have nothing” so we cannot even have something. Say hello double dip. it is exactly the courageousness we should expect is it not from people that treat our interests…well, in such a disinterested fashion i guess.