Tag Archives: Foreclosure

Investors Join Forces With Borrowers Against the Banks

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If you thought banks were in trouble by fighting with the home owners, you ain’t seen nothing yet.  The homeowners have lost their homes to foreclosure and most go meekly on their way.  What else could they do?  A few stand and fight, valiantly, and occasionally they prevail.

But, now the situation has changed.  The investors have joined the fray.

The investors were typically institutions, such as insurance companies, pension funds and other very large financial entities.  The investors usually tried to keep a low profile, even when they lost some money through a foreclosure.  They took their lums and stayed out of sight.

Well, it appears their silence is coming to an end and they are joining forces with other investors to fight the banks.  Ther belief is that the banks were complicit in promoting loans that were way over leveraged and that there was little or no hope in them ever being paid back.

The investors aren’t so likely to surrender.  They are joining on the borrowers side.

Read more here.

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Massachusetts Supreme Court Rules against Wells Fargo in Foreclosure Case

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If you have been following the MERS involvement in the foreclosure crisis you are well aware of MERS and the robo-signer stories.  Courts have been ruling against MERS and the banks.  They have dismal record keeping procedures and the courts have ruled in favor of the homeowners.

The situation may have just come to a head in a case involving U.S. Bancorp and another involving Wells Fargo.  Neither of these cases involved MERS.  The Massachusetts Supreme Court, in a unanimous decision, ruled that neither Wells Fargo nor U.S. Bancorp have standing and consequently have no right to foreclose because they failed to show that they were holders of the mortgages at the time of foreclosure.

Justice Robert Cordy, in a concurring opinion, blasted the “utter carelessness” the banks demonstrated in documenting their right to own the properties.

This ruling is expected to slow down the foreclosures significantly and consequently significantly affect the entire home loan process and market place.

Massachusetts, like Nevada is a non-judicial foreclosure state.  If the banks were playing fast and loose in Massachusetts, what is the likelihood that they would have operated differently here in Nevada?

Do we face the prospect of having foreclosures overturned here too?



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Mapping Census Demographics and Economics

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The New York Times has a page called, “Mapping America.”  It is full of interesting data taken from the U.S. Census Bureau.  The map has demographic and economic data for each census tract.

Income Distribution for the Reno-Sparks area

The colors represent different income levels.

See the rest here.

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Bank of America Sued Over HAMP

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Bank of America is facing a blizzard of lawsuits because of its foreclosure policies.  One of these is a class action lawsuit claiming that B of A refused to participate in various foreclosure prevention programs even though they had agreed to do so when they took federal money.  Similar claims were also filed by the Attorney Generals of both Nevada and Arizona.

Do you remember the TARP program, where the government set out to “jump-start” the economy?

Well, one of the recipients of TARP fund was Bank of America.  They received $25 billion of US taxpayer money.  Yeah, I know the government claims it was their money but let’s not quibble.  As a condition to getting these 25 big ones, Bank of America signed a contract with the U.S. Treasury on April 17, 2009 agreeing to comply with the Home Affordable Modification Program (HAMP) to perform loan modifications and other foreclosure prevention services.

But, B of A has apparently resisted and avoided the actual participation in the HAMP program.  And the avoidance was, again, apparently to the degree that B of A is now facing several class action lawsuits claiming that B of A reneged on the deal and that the taxpayers and the losing home owners both suffered.

Now apparently, the servicers of these mortgages get paid $1000 each HAMP loan modification.  But, they make a whole lot more by simply continuing to “service” the loan.  So, why would they even remotely consider loan modifications?

Read more here.

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Shadow Inventory, Cooked Books; Spain’s 2011 Real Estate Funding Crisis

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The economic problems in Spain seem so far away, so why should we be concerned?  The world has discovered Spain and has found a major economic basket case.  What if Spain is but a preview of what could happen here on the US, and more specifically here in Nevada?

This article describes Spain’s dire situation and says the party is about to end.

In Spain, huge projects are completely empty and bad debts mounts as the Spanish banks play extend-and-pretend with developers. That game is about to end.

Developer loans are coming due. Yet, there is no way for developers to make interest payments let alone pay any principal. When developers collapse in 2011, banks will be stuck with a vast amount of undeveloped land at overvalued prices as well as ghost towns so far outside of major towns that no one will live in them.

A flood of inventory awaits a dearth of buyers. Moreover, a huge amount of shadow-inventory is waiting on deck, hoping for better prices so the owners can bail. Unfortunately there is no one to bail to. Spain’s official unemployment rate is 20%, and it’s quite likely the real unemployment rate is higher.

Can you see any parallels with Reno, our unemployment rate, perhaps?  I recognize that it is not quite 20%, officially, that is.  Can you see any signs that things are about to change?  The local media have stories that we are about to turn the corner.  Who would you want to trust?

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HAMP Program Dismal Failure

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HAMP (Home Affordable Modification Program)  is a dismal failure.  Is the AP finally beginning to realize it?

This article, published in the RGJ shows that more people are dropping out of the program than are continuing.

Even the Huffington Post agrees with ‘It’s Just A Scam And The Banks Are Getting Everything’.

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Too Big To Fail

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Too Big to Fail performed by the Austin Lounge Lizards.

Enjoy.

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FTC Issues Ruling on Mortgage Scams

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The FTC recently issued a news release on Mortgage Assistance Relief Services, MARS, proclaiming:

FTC Issues Final Rule to Protect Struggling Homeowners from Mortgage Relief Scams

The ruling was a mere 54 pages published in the Federal Register and can be found here should you care to read the whole thing.  Personally, I passed, thank you very much.
The news release explains the ruling and it does it in only one page.

In essence, it addressed the fact that there were some scammers taking advantage of peoples foreclosure plight.

It prohibits charging any advance fees until the homeowner is completely satisfied with the written offer of mortgage relief from the lender.

The mortgage relief companies must disclose that:

  • they are not associated with the government, and their services have not been approved by the government or the consumer’s lender;
  • the lender may not agree to change the consumer’s loan; and
  • if companies tell consumers to stop paying their mortgage, they must also tell them that they could lose their home and damage their credit rating.

The rule prohibits the mortgage relief companies from making false or misleading claims.

But, perhaps the most interesting part is who the ruling does NOT apply to.  The list includes attorneys and:

The Final Rule applies only to entities within the FTC’s jurisdiction under the Federal Trade Commission Act, which excludes, among others, banks, savings and loans, federal credit unions, common carriers, and entities engaged in the business of insurance.

See it here.

Hat Tip: Ron Ballard

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Zillow: U.S. Housing Value Dropped 1.7 Trillion in 2010

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Zillow estimates that US housing values experienced substantial gains earlier in the year, they have dropped approximately $1.7 trillion this year. The drop is 63% greater that the $1.0 trillion drop in 2009. Zillow further estimates that US housing has lost more that $9 trillion since the peak in 2006. Some of the gains early in the year were due to the tax credit and are no longer available.

Even though this is the nationwide averages, some areas have fared better, or worse than other areas. For example, Boston and San Diego have seen a price increase this year. I do not have the statistics for Reno or Nevada at this time. Also different market segments tend to move at different times.

The Reno economy has been extremely hard hit. Jobs are scarce. No matter what the government would want you to believe.  Foreclosures and short sales are pervasive.  Many over-encumbered homeowners are simply walking away. The homeowners that would normally want to upgrade have little or no equity remaining and can’t move.

Zillow thinks that we will finally hit bottom sometime in 2011 and that it may take 3 to 5 years before we see normal appreciation again.

Read the rest here.

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Large Increase in Foreclosure Class action Lawsuits

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Banks have been trying to get out from under problems caused by the robo-signers and fraudulent documents filed in foreclosure proceedings.  It appears, however that they might have moved too slowly.

The race is on for the banks to keep the scandal from metastasizing. Crisis management specialists are working around the clock to help banking executives stem the financial and public relations disaster. Shares of Bank of America, the biggest U.S. lender, are already down 21 percent for the year, making it the biggest laggard in the 30 stocks that make up the Dow Jones industrial average.

Now they are facing a blizzard of lawsuits seeking damages for homeowners that believe they were foreclosed illegally.

The class actions, which could be expanded nationally, seek damages for homeowners whose properties were illegally foreclosed upon by banks using fraudulent documents. Suits have been filed in Maryland, New Jersey and Massachusetts that target Bank of America Corp., Wells Fargo & Co., HSBC PLC and JPMorgan Chase & Co. In Florida and Maine, Ally Financial, formerly known as GMAC Mortgage, is also being targeted.

Congress is also beginning to stick its nose into the situation thinking they may find some votes.  The problem is due to get much worse.

Read more here: http://www.msnbc.msn.com/id/40241849/ns/business-us_business

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