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View Full Version : American Brace For Next Foreclosure Wave......



MMC
04-05-2012, 11:47 AM
GARFIELD HEIGHTS, Ohio (Reuters) - Half a decade into the deepest U.S. housing crisis since the 1930s, many Americans are hoping the crisis is finally nearing its end. House sales are picking up across most of the country, the plunge in prices is slowing and attempts by lenders to claim back properties from struggling borrowers dropped by more than a third in 2011, hitting a four-year low.

But a painful part two of the slump looks set to unfold: Many more U.S. homeowners face the prospect of losing their homes this year as banks pick up the pace of foreclosures.

In 2011, the "robo-signing" scandal, in which foreclosure documents were signed without properly reviewing individual cases, prompted banks to hold back on new foreclosures pending a settlement.
Five major banks eventually struck that settlement with 49 U.S. states in February. Signs are growing the pace of foreclosures is picking up again, something housing experts predict will again weigh on home prices before any sustained recovery can occur.

Mortgage servicing provider Lender Processing Services reported in early March that U.S. foreclosure starts jumped 28 percent in January.

Although foreclosure starts were 50 percent or more lower than for the same period in 2010, those begun by Deutsche Bank were up 47 percent from 2011. Those of Wells Fargo's rose 68 percent and Bank of America's, including BAC Home Loans Servicing, jumped nearly seven-fold -- 251 starts versus 37 in the same period in 2011. Bank of America said it does not comment on data provided by other sources. Wells Fargo and Deutsche Bank did not comment.

Online foreclosure marketplace RealtyTrac estimated that while foreclosures dropped slightly nationwide in February from January and from February 2011, they rose in 21 states and jumped sharply in cities like Tampa (64 percent), Chicago (43 percent) and Miami (53 percent).
Zillow expects the resurgence in foreclosures this year, combined with excess inventory of unsold, bank-owned homes will contribute to a 3.7 percent national decline in prices before the market hits bottom in 2013 and stays there until 2016.
A January report by the Neighborhood Economic Development Advocacy Project in New York found that in the first half of 2011 the number of 90-day pre-foreclosure notices in New York City outnumbered court foreclosure actions by a ratio of 14 to one, indicating that while proceedings were initiated against many homeowners, they were left incomplete.

"Now the banks have a settlement, foreclosure numbers for 2012 are going to be high," said NEDAP co-director Josh Zinner.
A recent survey by the California Reinvestment Coalition, an umbrella group of nearly 300 non-profit groups in the state, of member agencies found 75 percent of respondents expected increased demand for their foreclosure prevention services in 2012 but more than a third had to scale back services because of funding cuts.

"Until banks engage in meaningful principal reduction as a matter of course," ESOP's Seifert said after a recent protest at a Chase branch in Cleveland, "this crisis will not end.".....snip~

http://news.yahoo.com/americans-brace-next-foreclosure-wave-210253440.html
Reuters – 16 hrs ago<<<<< More Here Way More!


This morning on the Radio Am 560 they were stating Illinois has the highest Foreclosure rate in the Country. I don't know if it is true but is one of the worst.

I even had to deal with this crap and I own my home outright. We had Wells Fargo/Wachovia.....but their front company was American Servicing Corporation. So thats who was always dealt with. The one day we got a letter in the mail from the Duetsche Bank. Foreclose Notice. I was like WTF.

Came to find out Wells Frago had sold mortgages to Duetsche Bank. Duetsche Bank didn't know shiznit on paperwork or anything. Which wells Fargo Put thru American Servicing Company. Needless to say I sent the German Bank a few of my thoughts. Telling them come on and try and take myshiznit.

Anyhow they were talking about how all these foreclosures have been sitting in the courts just waiting. The Cook County Sherrifs Office or Chicago even issued statements that they were not going to even attempt to put people out of their homes unless all the paperwork from wherever was done and complete. Now they plan to hit this year with all this allegedly recovery that the MS Media is talking about.

It does have to happen tho in order to turn the market around. I think we also had a convo on what people could do to increase the value of their homes now thru this time period.

Conley
04-05-2012, 12:28 PM
It seems like foreclosures slowed down once the crackdown on robo foreclosures started. Once the states have settled and addressed that I think it will be right back to kicking people out on the streets. There hasn't been a housing recovery and there have been a lot of stalled foreclosures. Once they get started again the market is going to tumble IMO.

MMC
04-05-2012, 12:43 PM
It seems like foreclosures slowed down once the crackdown on robo foreclosures started. Once the states have settled and addressed that I think it will be right back to kicking people out on the streets. There hasn't been a housing recovery and there have been a lot of stalled foreclosures. Once they get started again the market is going to tumble IMO.


It is bad here and like you said it will get worse. Another thing that bothered me the most was that American banks were selling these Mortgages to Duetsche Bank. Government Controlled Bank of Germany. While at the same time they were buying the NY Stock Exchange.

So here they are buying up US mortages and begin kicking people out of their homes. Which I don't think we should be selling our Mortgages to Land to Foreign Banks owned by any Governments.

Plus Bernanke has his target inflation date so rates will go up as well.

MMC
04-06-2012, 02:14 AM
Online foreclosure marketplace RealtyTrac estimated that while foreclosures dropped slightly nationwide in February from January and from February 2011, they rose in 21 states and jumped sharply in cities like Tampa (64 percent), Chicago (43 percent) and Miami (53 percent).
Zillow expects the resurgence in foreclosures this year, combined with excess inventory of unsold, bank-owned homes will contribute to a 3.7 percent national decline in prices before the market hits bottom in 2013 and stays there until 2016.
A January report by the Neighborhood Economic Development Advocacy Project in New York found that in the first half of 2011 the number of 90-day pre-foreclosure notices in New York City outnumbered court foreclosure actions by a ratio of 14 to one, indicating that while proceedings were initiated against many homeowners, they were left incomplete.....snip~

Anyone else think that our Banks should be selling US Mortagages to banks overseas owned by Foreign Governements?

Peter1469
04-06-2012, 09:47 AM
It seems like foreclosures slowed down once the crackdown on robo foreclosures started. Once the states have settled and addressed that I think it will be right back to kicking people out on the streets. There hasn't been a housing recovery and there have been a lot of stalled foreclosures. Once they get started again the market is going to tumble IMO.

The crack-down on robo signing? The settlement was an absolute joke. People should be in jail.

Conley
04-06-2012, 09:49 AM
The crack-down on robo signing? The settlement was an absolute joke. People should be in jail.

I agree. Crackdown was too strong of a term.

MMC
04-06-2012, 10:11 AM
http://ts1.mm.bing.net/images/thumbnail.aspx?q=4964411464810508&id=d0f663cdfe196c379969f0783ff5b541&url=http%3a%2f%2fwww.dreamstime.com%2fwelcome-mat-and-open-door-thumb16393313.jpg

Greetings Nemo.....Welcome to the Political Forums of the Rant. :yo2:

Peter1469
04-06-2012, 12:47 PM
What we are seeing now is the ugly face of deregulation. The current financial crisis precipitated by the subprime mortgage meltdown is the fault of deregulation. If the FDIC, FSLIC, HUD and FTC had done a proper job of regulating the banks and mortgage lenders, and if the SEC had exercised proper oversight of the sale of these mortgage-backed securities, we wouldn’t be in this mess.

Deregulation was only part of the problem. Another part was the government insisting on banks providing mortgages to people that everyone know would not be able to make payments should the costs of homes start to drop rather than rise. It was also caused by the federal reserve keeping interest rates at artificially low levels. Market rate interests would have prevented much of this malinvestment.

dadakarma
04-06-2012, 01:20 PM
Bravo, Nemo. Welcome.

Peter1469
04-06-2012, 04:53 PM
I agree about the regulatory problems. Government regulators could not even understand mortgage backed securities so they ignored them. After the S&L crisis in the 1980s just over 1000 bankers were sentenced to jail time in significant cases. Almost no person has been prosecuted since 2008- at least in a case related to the financial crisis. That ought to change.

But you are incorrect about the government (federal sate and local) not forcing banks to make weak loans. For example many banks were told by local government that they would not be able to open a new branch unless they increased the numbers of sub-prime mortgages they made or mortgages made in certain neighborhoods. There was pressure by all levels of government.

This pressure is what caused the bankers to increase the use of mortgage backed securities to such high levels. There are trillions of dollars worth of these still hidden in bank's books that are likely worthless. When those are forced into the light we will see another crash.

Also the fact that the federal reserve forced interest rates to very low artificial levels was the match that set the fire. Without that the bubble would never have gotten big enough to cause a financial crisis.

MMC
04-07-2012, 08:09 AM
I have come to the conclusion that our approach to regulating business and finance is all wrong; it is too heavy-handed, which has a stifling effect on economic growth while being ineffective in preventing abuses. What is needed is to curb undisclosed speculation on the financial markets and provide more transparency to commercial transactions. The problem with regulating banking and the stock market can be easily solved with a single piece of legislation. Congress should repeal the safe-harbor provisions of title 11 that exempt financial derivative contracts from bankruptcy. (Derivatives are really secret liens that conceal leveraged borrowing carried "off balance sheet" - this was the lesson learned from the Lehman Brothers bankruptcy, and why AIG was "too big to fail" necessitating the government "bail-out.") Without that exemption for "anonymous creditors" the market will be forced to regulate itself. It’s really that simple.


Economics 101.....huh Nemo?

MMC
04-07-2012, 08:55 AM
Actually the solution is simple ("Economics 101"); but the mechanics of it rather complicated. Specifically, derivative contracts (forward contracts, repurchase agreements, credit default swaps, future contracts and options) are currently exempt from the automatic stay provisions under section 362(a); the rule against enforcement of ipso facto clauses under section 365(e)(1); and also protected from trustee avoidance actions for transfers that would otherwise be deemed as voidable preferences or fraudulent transfers under the Bankruptcy Code. See 11 U.S.C. §§ 546(e)-(g) and (j). To put it simply: the bankruptcy laws do not apply to derivatives. The question is whether this is a good thing. It is not, as the current financial crisis and bailout attest. (I would add to the list the like provisions that immunize leveraged buyouts "LBOs" from bankruptcy proceedings as these transactions have a high potential for fraud and abuse and consequential damage to the economy.) As I mentioned, supra, elimination of these safe-harbor provisions will provide more transparency and promote more emphasis on value over high-risk speculation - not to mention loss as witnessed in the collapse of MF Global Holdings, Ltd. The counterparties to these contracts will be forced to disclose their transactions in order to protect the priority of their security interests. The alternative is more heavy-handed, government-imposed regulation (e.g., Dodd-Frank), which will have a stifling effect on business and economic growth.


I agree with what you are saying here Nemo.....what would be the argument against the application of being applied to derivatives?

Btw Nemo sound like you are on top of this. Do you work in the field or one that is related to it? Myself I am not deep into economics but it seems the more I learn the deeper I get drawn-in. Chris is one of our Economic Guys round here as evidence in the economics Room. Thanks for giving it some indepth explanation.

MMC
04-10-2012, 07:30 AM
Did Obama get Congress to do anything about these fore-closures? I heard Congress passed some measures to try and help with this issue. Anyone else pick up on anything? The Radio was saying Congress adopted measures to help people going thru this.

MMC
04-10-2012, 09:09 AM
Most of the measures proposed were opposed by the powerful banking lobby; however the Congress did include the Federal Home Affordable Modification Program (HAMP) as part of the Financial Stability Act of 2009. The problem is that relatively few borrowers qualify, and the default rate on modified loans under the program is very high. President Obama has issued executive orders to government agencies to provide assistance; but these efforts have not proved to have any meaningful effect. Congress previously enacted the Mortgage Forgiveness Debt Relief Act of 2007 to ameliorate the tax consequences of foreclosures that may result in cancellation of indebtedness income (CODI) under I.R.C. § 61(a)(12); however it is very limited and does not apply to nonpurchase-money home loans. This law, which was extended once, is due to expire the end of 2012.

There has also been some action to amend the federal bankruptcy laws to allow for home loan modification; but this too is unlikely to pass, or survive constitutional challenge under the Contracts Clause. See Const., Art. I, sec. 10, cl. 1. The existing law does not provide for such relief. See Dewsnup v. Timm, 502 U.S. 410 (1992); Nobleman v. American Savings Bank, 508 U.S. 324 (1993). Notwithstanding these limitations, some bankruptcy courts have allowed "lien stripping" of second mortgages that are determined to be unsecured as to collateralization under section 506 of the Bankruptcy Code.

Thanks Nemo.....yeah I just put a video up with some info on the bankruptcy and LTV's in the ER. Think this is going to have any impact? Other than for handful of people?