Tag Archives: Foreclosure

Fidelity Agrees to Insure Title on Foreclosed Homes

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So many stories have appeared about the robo-signers and other foreclosure problems that it was hard to keep up.  The banks have stepped in it, bi time.  We have even seen stories that at least one of the title insurance companied was no longer willing to provide title insurance to foreclosed properties.

This seemed to bring the home sales to a near standstill.  After all, who would want to spend money on a home if they could not be sure that their title was guaranteed?  The buyers would not be willing to buy and the banks would not be willing to lend.  Thus, there would be no real estate market.

News now comes that Fidelity National Financial, Inc. and Bank of America have reached an agreement that will allow sales of foreclosed properties to proceed.  Fidelity expects  B of A to cover any losses due to failure to comply with the laws.

Jacksonville, Fla.-based Fidelity National said Bank of America Corp. will be required to show that all documentation and procedures related to the foreclosure of a property comply with state law and local practice. The Charlotte, N.C., bank will also cover any losses Fidelity National faces that are directly related to its failure to comply with laws on transactions in which foreclosure has already occurred or will take place.

Read more here.

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Housing Prices to Fall by 30% More?

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Richard Suttmeier from Niagra International Capital predicts that home prices will fall 30% by 2014.

http://www.youtube.com/watch?v=dyPM1rK0GvA&feature=player_embedded

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MERS loses again in California Bankruptcy Case

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A ruling issued by the United States Bankruptcy Court for the Eastern District of California found that, as a matter of law, MERS could not have transferred the note to Citibank from the original lender, Bayrock Mortgage Corp.  The Court’s opinion states that MERS and Citibank are not the real parties in interest.

The court found that MERS acted “only as a nominee” for Bayrock under the Deed of Trust and there was no evidence that the note was transferred.  The opinion also noted that “several courts have found that MERS is not the owner of the underlying note and therefore could not transfer the note, the beneficial interest in the deed of trust, or foreclose on the property secured by the deed”.

The opinion states: “Since no evidence of MERS’ ownership of the underlying note has been offered, and other courts have concluded that MERS does not own the underlying notes, this court is convinced that MERS had no interest it could transfer to Citibank. Since MERS did not own the underlying note, it could not transfer the beneficial interest of the Deed of Trust to another.  Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.”

The bottom line is that MERS cannot assign what it does NOT own.

For more see here.

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Investors File Suit Against Lenders

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The foreclosure drama takes another turn.  Investors have begun suing the lenders claiming that the lenders misrepresented the value of loan packages, thereby causing them to lose money on their investments.  The claim is that the lenders committed appraisal fraud.

It is central to the issue of appraisal fraud. Anyone who moved into a new development knows that the developer was raising prices like crazy to create a a sense of urgency on the part of borrowers. Those prices from the developers were used an excuse to inflate the appraisals on a continual basis, so that a house of exactly the same model and features would be appraised one month for $350,000 and then a month later for $375,000 or more.

Read more here and here.

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The Thirteen Housing Markets That Will Newver Recover

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Check out this story:  The Thirteen Housing Markets That Will Never Recover.

More specifically, see # 8.

Now, I don’t know what information they are privy to, but I thought it might be interesting to view.

I post this without comment.


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Lawsuit Could cost Mers Billions

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A Reno law firm recently filed suits against MERS, (Mortgage Electronic Registration Systems) in both Nevada and California.  The suits allege that MERS and dozens of lenders associated with MERS have defrauded the government of recording and filing fees.   Courts have repeatedly ruled against MERS , finding that it has no standing in the foreclosure proceedings because they have no particular interest in the outcome of any particular case.  (MERS does not benefit if the loan gets paid off.)  Consequently, they are involved, merely to facilitate the lenders in avoiding recording and filing fees.

MERS was originally created to assist the lenders with their record keeping but has evolved as the main entity pursuing foreclosures.  the majority of trust deeds show MERS as one of the beneficiaries of the mortgage.

This has previously been discussed here, here and here.

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Has the Reno Sparks Foreclosure Situation Begun to Level Off?

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There are some indications that we have hit the bottom in the Reno/Sparks real estate market.  Perhaps it’s only wishful thinking, but there are still signs.

First, Jason Hidalgo, at the RGJ notices that the number of foreclosures has dropped for May.  He suggests that the lenders are finally working through their backlog of foreclosures.

And Terry Leighton suggests in this report that the foreclosure seems to be easing.

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New Trend in Flipping: Maybe Not

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This Nevada Appeal article suggests that there is a new trend in house flipping.  The article suggests that the new trend is rehabbing.

I can tell you that rehabbing has going on for a long,  long time.  As anyone that has followed the distressed property market can tell you is that when a homeowner is in some sort of financial distress, the maintenance on the property is one of the first things to go.  An experienced investor can spot a distressed property while just driving down the street.

For example, in Northern Nevada, a dead lawn, or landscaping is a sure sign that the homeowner lacked the finances to pay for the water.  There are others but, for now, this will suffice.

Now, I will agree that some new players have entered the marketplace.  They may now have all the information to make wise decisions. and consequently may bid more than the house is worth.  This tends to drive the prices higher than the knowledgeable buyers wold be willing to go.  The banks are also tightening up in what they will accept to sell the property.

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Chinese Drywall: GSEs Plan Mortgage Forbearances

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Fannie Mae and Freddie Mac will institure a new policy in July to not include those houses built with Chinese drywall to impact the foreclosure process.

The drywall was used mainly in the southeast, i.e. Florida, Lousiana and Virginia and was imported folllowing hurricane Katrina. Nevada is not expected to be affected.

A CPSC-led task force studying the impact of the drywall said it is responsible for emitting a sulfur smell, corrodes metal pipes and makes some residents ill. The task force has further found that the only effective remediation of the drywall is complete removal and replacement of the drywall and the affected household components. That’s forcing homeowners to find alternative housing — at their own expense — while their homes are repaired.

“This relief is intended to help borrowers who need payment flexibility as they take steps to mitigate … problem drywall,” said Terry Edwards, executive vice president. “The issue potentially affects thousands of homeowners in a number of states, and we want to support those who are responsibly trying to honor their mortgage obligation in good faith while correcting the problem and protecting the health and safety of their families.”

So, will this affect the actual foreclosure prices?

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