Posts filed under “Foreclosures”

Looming Foreclosures = House-Price Obstacle

Click to enlarge:



David Wilson of Bloomberg takes a crack at the Housing turnaround story:

Persistently high foreclosure rates show the U.S. housing industry is “bouncing along the bottom” even though sale prices are recovering.

The chart above, via strategist Pierre Lapointe of Brockhouse & Cooper, shows the percentage of foreclosed home loans little changed from the 4.3% average for 2009. (Data source: Mortgage Bankers Association).

A spate of recent positive data following the usual seasonal pattern continues to give false hope to homeowners, banks and REO buyers. The front page of the NYT today was the latest to declare the recovery was at hand.

The problem is that the Banks had voluntarily stopped their foreclosures while negotiating the robo-signing settlement. They are now poised “to flood the market with foreclosed homes.” Their distressed sales are likely to pressure prices.

A meaningful and sustained increase in house prices is still several years away. In other words, it is still too early to get excited.”



Foreclosures Loom as U.S. House-Price Obstacle: Chart of the Day
David Wilson
Bloomberg, June 28,2012

Category: Foreclosures, Real Estate

WaPo: Foreclosure Machinery Creaks Back to Life

> My Sunday Washington Post Business Section column is out. This morning, we look at how the Foreclosure machinery is creaking back to life. The basic concept is that after a year plus of voluntary foreclosure abatements, the banks are now returning to normal foreclosure processing. Here’s an excerpt from the column: “With all that…Read More

Category: Apprenticed Investor, Foreclosures

Foreclosure Machinery Creaks Back to Life

Ever since the Robo-Signing scandal erupted in October 2010, banks slowly come to realize that their practices were under ever increasing scrutiny. (I know that’s a Duh! observation for most people, but these are bankers we are discussing).

By early 2011, many of the major money center banks had slowed down their normal foreclosure machinery in a belated attempt to figure out just WTF they were doing internally. There was an attempt to identify the normal processing of defaulted mortgages and see if there was any illegal chicanery going on.

They should have asked the question in the opposite way, as in “Are we doing anything legally?”

As it turned out, an army of outside law firms and 3rd party vendors had by and large run roughshod over the existing laws and legal practices. This did not insulate the banks from the fraud; subcontracting business to felons does not insulate your organization from their illegal behavior.

Regardless, I suspect when some smart bank executive somewhere learned how rampant illegal foreclosures had become, they decided to halt the foreclosure machines altogether to clean up their own house. Contrary to appearances, not every banker is an idiot. As it turns out, its mostly the ones in positions of authority.

Fast forward to the national robo-signer giveaway settlement. With that now behind them, the voluntary foreclosure abatements have come to an end. Thee was an 18 month period where banks had stopped actively processing these properties. That ended earlier this year. As the creaky, wheezy, inadequate machinery of processing defaulted mortgages rumbles back to life, you would expect to see signs of increasing foreclosures and distressed sales begin any day now.

Cue the RealtyTrac report:

Foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 205,990 U.S. properties in May, an increase of 9 percent from April but still down 4 percent from May 2011.

The details:

-There have been an average of 1.6 million nationwide foreclosure starts per year for the past five years.

-Foreclosure activity rose back up above the 200,000 level in May after two consecutive months below 200,000.

-Foreclosure starts nationwide increased on an annual basis after 27 consecutive months of year-over-year declines.

-Bank repossessions are still down 18% year over year. Voluntary foreclosure freezes and increasing preforeclosure sales are the primary factors reasons.

-Judicial states combined posted a 26% year-over-year increase in overall foreclosure activity while non-judicial states combined posted a 20% year-over-year decrease in foreclosure activity.

-Foreclosure starts increased on a year-over-year basis in 17 of the 26 judicial states and in 16 of the 24 non-judicial states.

Banks seem to be getting religion about doing more distressed/short sales than outright foreclosures, as they generate higher priced sales — meaning a greater recovery for the lender, and less of a writedown:

-Higher percentages of new foreclosures are likely end up as short sales or auction sales to third parties (rather than bank repossessions).

-Pre-foreclosure sales have less of a negative impact on home values than bank-owned sales, they still represent a discounted sale where a distressed homeowner is losing his or her home

-Average price of a pre-foreclosure home was more than $27,000 higher than the average price of a bank-owned home.

One last surprising factoid:  Georgia now leads the nation with the highest state foreclosure rate (per capita) versus the next 4 states: Arizona, Florida, California and Nevada. Georgia’s foreclosure rate has not ranked highest in the country February 2006.

click for larger chart

more graphics after the jump


U.S. Foreclosure Activity Increases 9 Percent in May
RealtyTrac June 14, 2012

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Category: Data Analysis, Foreclosures, Real Estate

Foreclosures: A Decade Long Overhang (Part 4 of 5)

All this week, we are looking at the Housing Recovery theme, challenging assumptions that make up the bullish argument. Monday, we began with Debunking the Housing Recovery Story, starting with Shadow inventory. On Tuesday, it was Reality Check on Home Affordability. Yesterday, we looked at the Problem With Home Prices. Today in part 4, we…Read More

Category: Foreclosures, Real Estate

CoreLogic: 860,000 Completed Foreclosures

Interesting data points from CoreLogic: • The five states with the largest number of completed foreclosures for the twelve months ending in January 2012 were: California (155,000), Florida (86,000), Arizona (65,000), Michigan (65,000) and Texas (57,000). These five states account for 49.7 percent of all completed foreclosures nationally. • The percent of homeowners nationally who…Read More

Category: Foreclosures

Dissecting the Mortgage Fraud Settlement Agreement

FT Alphaville gives us the Cliff note version of the national mortgage fraud bank settlement — available in easy to follow graphic or text form: > > Here is the breakdown: Under the agreement, the five servicers have agreed to a $25 billion penalty under a joint state-national settlement structure. Nationally: • Servicers commit a…Read More

Category: Bailouts, Foreclosures, Legal

DOX Criminally Indicted for Robo-Signing

A major foreclosure services company is indicted for “robo-signing,” even as a multibillion-dollar deal to provide relief to struggling homeowners offers limited legal protection for financial firms.

Category: Foreclosures, Legal, Video

Investing in Foreclosures: How One Company Does It

Buying foreclosures to turn them into rental properties is tricky business. Mack Companies, a Chicago real-estate firm, invests in about one out of every 40 homes it inspects. MarketWatch’s Amy Hoak looks at why some make the cut and others don’t.

Feb. 3, 2012

Category: Foreclosures, Investing, Real Estate, Video

A modern Pecora Commission could right Wall Street wrongs

A modern Pecora Commission could right Wall Street wrongs Barry Ritholtz January 28 2012 ~~~ What shall we make of this surprise pronouncement in President Obama’s State of the Union address? A belated investigation has been launched into the role of fraud in the financial crisis. This much is clear: Despite rampant illegalities, bank fraud…Read More

Category: Apprenticed Investor, Foreclosures, Legal


A.G. SCHNEIDERMAN ANNOUNCES MAJOR LAWSUIT AGAINST NATION’S LARGEST BANKS FOR DECEPTIVE & FRAUDULENT USE OF ELECTRONIC MORTGAGE REGISTRY Complaint Charges Use Of MERS By Bank Of America, J.P. Morgan Chase, And Wells Fargo Resulted In Fraudulent Foreclosure Filings Servicers And MERS Filed Improper Foreclosure Actions Where Authority To Sue Was Questionable Schneiderman: MERS And Servicers…Read More

Category: Foreclosures, Legal, Real Estate, Think Tank