Saturday, February 14th, 2009 at 5:39 AM
Foreclosure Train Stops Again
DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- JPMorgan Chase & Co. (JPM), Citigroup Inc. (C), Bank of America Corp. (BAC) and Wells Fargo & Co. (WFC) have committed to temporary moratoriums on foreclosures as the government works on a financial stability plan slated to include billions of dollars aimed at keeping people in their homes.
“We will not add to the foreclosure process any new owner-occupied residential loans that are owned and serviced by JPMorgan Chase,” the company’s chief executive, Jamie Dimon, said in a letter Thursday to Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee.
The moratorium on new foreclosure actions will remain in effect through March 6 and is similar to a 90-day foreclosure freeze JPMorgan announced Oct. 31.
“We believe three weeks is adequate time for the Treasury to announce – and for us to implement – a new plan,” Dimon said.
Citigroup in a statement issued Friday said it will place a moratorium on foreclosures for all Citi-owned first mortgage loans that are on principal residences and on loans for which understandings with investors have been reached. The moratorium is scheduled to last until March 12 unless the government finalizes a loan-modification program before that date.
Bank of America on Friday said it will delay foreclosure sales on owner- occupied properties whose mortgage loans are owned and serviced by it or Countrywide Financial Corp. through March 6. Bank of America acquired Countrywide in July.
“If the program’s development is not complete in three weeks, we will consider a possible extension,” a Bank of America spokeswoman said.
Wells Fargo, which recently acquired Wachovia Corp., has imposed a moratorium on foreclosures for loans it holds, company spokesman Kevin Waetke said Friday. That moratorium is expected to remain in place until the government’s foreclosure prevention plan is announced.
The majority of Wells Fargo’s mortgage loans, however, are serviced by it and owned by other investors. The company is “working with these investors and related contractual commitments to determine how we will support the moratorium request,” it said in a statement issued Friday.
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Here are the current counts of bank-owned SFRs and condos in San Diego County – these ought to be enough to tide us over for a month, but get the train back on the tracks soon!
Citigroup – 168
Morgan Stanley – 205
JP Morgan Chase – 265
WFB/Wachovia – 417
Bank of America – 1,725
Total – 2,780
We know that there are over 10,000 bank-owned properties currently in the county, so I doubt that I picked up every one owned by these four lenders. The BofA count includes Countrywide, Bank of New York, Deutsche, and US Bank, plus the private-label CWabs.
Posted on Saturday, February 14th, 2009 at 5:39 AM in Foreclosure Count, Foreclosures/REOs | 34 Comments » | 
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“owner-occupied residential loans that are owned and serviced by JPMorgan Chase”
Isn’t that a rather small group? Most of the mortgages JPMorgan Chase and their subsidiaries originated have already been packaged up and resold to various investment funds, haven’t they?
Johan Larson | February 14th, 2009 at 6:31 amYes, very small group owned by MorganChase, but they have probably retained the servicing (collecting of monthly payments) for most mortgages sold to investors.
There is some real money in servicing, if the note rate is 6.375% the servicers gets the .375% and investor gets the 6%. Plus the servicer charges foreclosure fees too for the loans that don’t make it.
Jim the Realtor | February 14th, 2009 at 6:42 amOh cwap – My company shut down and I have just joined the recent ranks of the unemployed. We are with Chase, but I read that they are only stopping foreclosures from the Citi side. What about our mortgage? ‘A paper’, 7/1 ARM resetting in 2013. If I go out to the open market, I’m going to get a one point non conforming refi at 5 – 6% (both FICO well above 700), but I’m going to have to sink another 117K into the house to get the LTV to 80%. My wife still works and prior to my company shutting down, our debt to income was WELL BELOW 30%. Now that I’m not working it is at 46% including property taxes. We are now at zero equity since the area dropped 10 – 12% (not bad thus far ehhh). The good part, is we can sit for two years paying our mortgage while I twiddle my thumbs. But there is no way I’m going to waste my emergency funds in this economy. Am I a candidate for a mortgage mod at 30 year fixed at like 4%? I hear they will reduce the balance and payment to where it matches a debt to income of 31 – 38%. I need to take advantage of my hardship situation to figure this out before I get a job and our DI drops to below 30%. Believe it or not with my unemployement, we are back to 31%. Can a couple who did ‘things’ right get their cake and eat it too?
3clicks from da Beach | February 14th, 2009 at 7:46 amI think you’re one of the candidates they’re hoping to help, but I’m not sure if any of the gov’t programs are working for anyone.
Do what the banks are doing – wait for the government to rollout the next greatest fix to solve the world’s problems!
Jim the Realtor | February 14th, 2009 at 7:51 amI don’t care how many foreclosures are listed or even how many are waiting to be listed. I want to know how many mortgages Countrywide/BofA are carrying that should be foreclosed but aren’t.
Rob Dawg | February 14th, 2009 at 8:35 amThe banks can do WHATEVER they want to. They are not legally bound to foreclose in the case of borrower default. If they feel that not foreclosing would be less of a loss than foreclosing would be, then they can choose that method–I am sure they calculate it as the “lesser of two evils”–will it prolong things, probably, but it is still their choice.
Local Boy | February 14th, 2009 at 9:08 amEvery time I see a new news story about how we f’d up, I can’t help but sing “America, F@#$ Yeah!”
ChrisL | February 14th, 2009 at 9:31 amAh, another round of fighting between The Four Big Banks and the Fundamental Market Forces.
My bet is that Fundamental Market Forces win. Perhaps they don’t win every single round, but they always win in the long run.
greenlander | February 14th, 2009 at 9:40 amThe banks can do WHATEVER they want to. They are not legally bound to foreclose in the case of borrower default. If they feel that not foreclosing would be less of a loss than foreclosing would be, then they can choose that method–I am sure they calculate it as the “lesser of two evils”–will it prolong things, probably, but it is still their choice.
Not “whatever” but close despite our effectively owning the banks. I made no value judgment, I only pointed out that IMO the real market overhang isn’t even being counted. WFC has changed their own reporting of what “delinquent” means at least twice in the last two years, extending the days late for but one example.
The banks’ decisions to not exercise FC has proven an epic disaster for both the lost equity and moral hazard. I think it is time to bring the obligations of fiduciary duty to the forefront.
Rob Dawg | February 14th, 2009 at 10:07 amThe banks are waiting to see what is to come from the $50 billion mortgage relief program that is in the works. They will be more than happy to dump these mortgages on the taxpayers.
no bubble here | February 14th, 2009 at 10:36 amWhen will people start paying attention. THE BANK IS NOT YOUR FRIEND! The last thing anybody should be waiting for is a program where banks and government come to the rescue. What a mess that will be. This moratorium will only prolong the inevitable. Economic malingering, that is what this is. Sort through the inventory. Push the foreclosure process and get er done. Its like kissing a frog, the longer you wait the more agonizing and the sooner you do it the easier it is. Kiss the frog and move on.
BigWaveDave | February 14th, 2009 at 11:10 amBanks are free to do whatever they want with THEIR money. But now that they’ve excepted government bailout money the decision is no longer theirs.
shadash | February 14th, 2009 at 11:14 amI’m not sure that’s a good thing. On their own, the banks’ management will put off taking the loss on paper for as long as they can, but eventually will have to face reality and foreclose. Government pressure is currently to do the opposite, and government has the ability to drag this mess out a lot longer than the banks do.
GeneK | February 14th, 2009 at 12:17 pmI have heard banks are going to get even more aggressive in modifications their loans– lowering principal amounts by as much as 50%, and interest rates as low as 3.5% fixed for a certain period. Again, I am sure they see this as the “lesser of two evils” and they want to cut their losses.
Local Boy | February 14th, 2009 at 1:36 pmRamona hits Y2K pricing — and nice properties are not moving even at that price.
link
W.C. Varones | February 14th, 2009 at 2:26 pmI have heard banks are going to get even more aggressive in modifications their loans– lowering principal amounts by as much as 50%, and interest rates as low as 3.5% fixed for a certain period. Again, I am sure they see this as the “lesser of two evils” and they want to cut their losses.
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What shadash said.
The banks can do whatever they want with **their** money. Once they start using our (taxpayers’) money, they lose their rights to do “whatever they want.”
CA renter | February 14th, 2009 at 3:40 pmI have heard banks are going to get even more aggressive in modifications their loans– lowering principal amounts by as much as 50%, and interest rates as low as 3.5% fixed for a certain period. Again, I am sure they see this as the “lesser of two evils” and they want to cut their losses.
Problem is that it’s contagious. Sure, it’s better to take 50% on a particular loan if the borrower is going to walk. But the problem is then all of his neighbors are going to want 50% off and they all threaten to walk.
W.C. Varones | February 14th, 2009 at 3:54 pmWhat’s funny about this whole situation is if house prices were allowed to fall and properties were put on the market sales would go through the roof.
Banks and government are a pair made in hell.
shadash | February 14th, 2009 at 4:00 pmPublic opinion has settled on the side of “stop the evil banks from taking peoples’ homes,” regardless of whether those homes ought to be taken. In past downturns it was not unusual to see news reports about people losing their homes because of massive job losses and extended unemployment, and it was a sad thing to see. But when you see people who are losing their homes because they signed up to buy overpriced homes with loans they could never afford to pay off and their chickens came home to roost saying with a straight face that it’s all someone else’s fault and someone else should bail them out, and the response from the general public is to take their side, you know that mass hysteria has set in and all hope for sanity is lost.
GeneK | February 14th, 2009 at 4:42 pmNo bootouts til March 6th….
Next theyll have a new “fact sheet” talking about how foreclosures are down, thanks to the “stimulus package”…
Im still waiting for the right time to buy.
bobfather99 | February 14th, 2009 at 5:02 pmI’m not going to walk away, but I’m going (to try to) modify my mortgage. If my bank who is servicing my loan can agree with the investor a reduced rate of return. Good. I can handle a 30 yr fixed and pay down principal on the back end. Those who simply can’t afford a home should lose it.
3clicks from da Beach | February 14th, 2009 at 5:33 pmI can handle a 30 yr fixed and pay down principal on the back end. Those who simply can’t afford a home should lose it.
Um … if by “afford” 3clicks means “can afford the interest” then we are back to funny money days. I can afford the house of my dreams if I only count the interest. I cannot afford it if we are talking actually paying the amortized cost. The reason I cannot — even with a good job — is that prices are inflated. I feel for 3clicks and anyone else who faces losing their home, but then again it is not a right to live in a nice place and there are cheaper homes elsewhere. I played by the rules, acted responsibly and yet am denied the fruits of my patience and saving because government is playing favorites. Where is my bailout?
Every time we “save” a homeowner, we sacrifice a buyer.
Rational expectations | February 14th, 2009 at 6:21 pmEvery time we “save” a homeowner, we sacrifice a buyer.
Rational expectations | February 14th, 2009 at 6:21 pm
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Very well said!
JAP | February 14th, 2009 at 6:58 pmVery well said!
I second that emotion. I’m a wannabe buyer too, and those a-holes in Washington are keeping homes unaffordable.
W.C. Varones | February 14th, 2009 at 7:36 pmI agree with expectations and very well stated…
“every time we save a “homeowner” we sacriface a buyer”
shadash | February 14th, 2009 at 7:57 pmNothing can save the unemployed, and that’s where a lot of foreclosures are going to come from.
sdbri | February 14th, 2009 at 10:16 pmThis summer, the market will be very interesting when all 3-6 months of delay foreclosure houses hitting the market at the same time.
Eric Chang | February 14th, 2009 at 11:49 pmThen I think the 3rd wave of bailouts will start in Aug.
I don’t mind if the loan principal is lowered for distressed home owners, but, ONLY if this is reported as a sale at the new loan amount!
To lower principals without letting the market know of this, is UNACCEPTABLE!!!
Let me just add that I’m starting to get really upset about all of OUR tax money going to these bailouts!!!
Just wait, they will be asking for another $1 trillion in 6 months to a year.
Actually, we should make a bet on how long it will take before the gov’t asks for another $1 trillion in funds from us taxpayers.
Just wait till 2010, inflation and devaluation of the dollar will be rampant.
Blue Streak | February 15th, 2009 at 12:33 amThe winner on betting how long before Obama and Congress ask for another $1 trillion bailout should get a free, roundtrip ticket to Washington D.C. to protest!
Blue Streak | February 15th, 2009 at 12:36 amWe are the forgotten class. We can pay mortgage for three years without me working. We did the right think and have an emergency fund, additional savings and very low outflows (no debt). I can find a job and situation normal. However, if people who did not ‘do the right thing’ are going to get bailed out, we are going to have our cake and eat it too. This is the problem – the state or the gov’t is willing to enact tough love. I can walk away, but I’m not going to.
3clicks from da Beach | February 15th, 2009 at 8:06 amIf you guys aren’t paying attention to this morning’s events in Sacramento, you should be. They are apparently one vote short of the number required for huge tax increases, and Sen. Abel Maldonado has fled the capitol in violation of a lockdown.
W.C. Varones | February 15th, 2009 at 10:04 amIt’s the same with tax cuts. Anyone who paid attention to Economics 101 should know that a tax cut that isn’t accompanied by a matching reduction in government spending does nothing to improve the economy and enlarges the deficit, but even people who think they’re a bad idea aren’t going to refuse the check.
In your case, though, my guess is you will have to make the concious decision to step over the line into deadbeat land, i.e., stop making mortgage payments and start getting NODs, before you’ll be able to take advantage of any bailouts. As you said, people who can actually afford their mortgages and make all their payments regardless of their circumstances are the forgotten class.
GeneK | February 15th, 2009 at 10:07 amWC – thanks for the update. I’m tuning in now. BTW, JTR turned me on to your blog. I’m a frequent visitor.
3clicks from da Beach | February 15th, 2009 at 10:29 amOne of the reasons that the banks are holding back is for their balance sheet. If these properties do not show up as foreclusures on the balance sheet, they pass their”stress test” and their stock is safe. It is for the interest of the bank… never the homeowner. They never do anything unless it benefits them. Do you think that the moratorium was out of the goodness of their hearts. There is no transparency here. It is just another devious practice.
Irene | April 15th, 2009 at 2:14 pm