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Category Archive: ‘Foreclosures’

Results of Bank Settlement

Kamala Harris, who has been dubbed the ‘female Obama’, is likely to run for president of the United States – possibly as soon as 2020.  This is a long article on her performance in public office:

LINK

This excerpt summarizes the impact from her $20 billion foreclosure settlement – another example of how the bankers got a slap on the wrist:

The deal Harris got for California was ultimately much better. It provided $18.4 billion in debt relief and $2 billion in other financial assistance, as well as incentives for relief to center on the hardest hit counties. This is particularly impressive when one considers the banks had originally only offered California, the state hardest hit by the housing crisis and fraud, $2-4 billion.

Nonetheless, the settlement was woefully inadequate. For one, while the $20 billion total sounds good, it was a fraction of what the banks would have had to pay to compensate for all of their malfeasance. For instance, investors had won $8.5 billion in a settlement with Bank of America over mortgage securities backed by faulty loans.

Secondly, the banks themselves paid very little — only around $5 billion, with most of the settlement involving the banks modifying loans owned by others, such as pension funds, who had nothing to do with the misconduct that necessitated the deal. In terms of direct financial relief, underwater homeowners — weighed down by average debt of close to $65,000 each — received around $1,500 to $2,000 each. One called it “a slap in the face for a lot of us.”

Moreover, more than half of the $9.2 billion in principal loan forgiveness in the state went to second mortgages, and many of those were already delinquent. While it did benefit homeowners, it also meant, as one economist told the LA Times, that in practice the banks “were writing off loans that were essentially dead.” A year later, only one-fifth of the aid went to first-mortgage principal forgiveness. And even at the end of this, just 84,102 California families had any mortgage debt forgiven — far short of the 250,000 originally predicted.

Read More

Posted by on Aug 11, 2017 in CA Homeowners Bill of Rights, Foreclosures, Jim's Take on the Market | 0 comments

Expiring Loan Mods

An employee of the Bank of America recently told me that they are not extending any of the loan modifications that have been issued over the years, to which I chuckled.

“What are they going to do, foreclose?”

“Yes” was the response, which got a chortle out of me.  After all the taxpayer support and bending of the foreclosure rules, now you’re going to tell people to start making their payments…or else?

Lo and behold, it looks like it, at least for this one example:

This was the house mentioned HERE that had been in foreclosure since 2011.  Yesterday, the lender finally foreclosed on the ‘homeowner’ who probably wasn’t making many, if any, payments over the last six years.

Up until now the properties being foreclosed were those that had sufficient equity where the lenders weren’t taking much of a loss.  It was good to see the opening bid here come out well below what was owned – though it was all interest accrued from non-payment.

No takers at the trustee sale though, in spite of Property Radar’s guesstimate of value was over $1,600,000, which was way off.

I can’t imagine there being a flood of these after all we’ve been through, and you can bet the eventual list prices of these will be full retail.

But it’s good to see the deadbeats getting challenged.

Posted by on Jul 8, 2017 in Foreclosures, Jim's Take on the Market, No-Foreclosure as Banking Policy, REOs | 2 comments

Mortgage Payments Are Optional

It’s been well-documented that Ben Bernanke and others told mortgage lenders in 2011 to not do anything to disrupt the economy, which was gov-speak for lay off the foreclosures.

Kamala Harris virtually outlawed foreclosures in California with the Homeowners’ Bill of Rights.  Lenders now have to offer a loan modification first to anyone in default, and it seems that you have to really not want your house to get foreclosed these days.

Here’s a borrower who has been in foreclosure since 2011, and by the looks of how the loan balance has risen, the neg-am has been accuring AND they haven’t made a payment.  The balance on the first mortgage has gone up $489,860!

I just received notice that the foreclosure process just got CANCELLED too.  Either the lender gave him a loan-mod, or they gave up altogether?

The lenders might foreclose if there is enough equity that they won’t lose money.  If it’s close, they let it ride, and hope some payments trickle in.

Posted by on May 22, 2017 in Foreclosures, Jim's Take on the Market, No-Foreclosure as Banking Policy | 5 comments

Foreclosure Mop-Up

foreclosure-history

The latest foreclosure numbers are out, and we’re down to less than 1% of all mortgages being in foreclosure:

The national foreclosure inventory – the number of loans in the foreclosure process – fell 29.6 percent year over year in August 2016, according to the latest CoreLogic Foreclosure Report. The foreclosure inventory has fallen on a year-over-year basis every month since November 2011 (Figure 1), and in August 2016 it was 77.5 percent below the January 2011 peak.

The foreclosure rate – the share of all loans in the foreclosure process – fell to 0.9 percent in August 2016, down from 1.3 percent in August 2015. While the foreclosure rate is back to 2007 levels, it is still above the pre-housing-crisis average foreclosure rate of 0.6 percent between 2000 and 2006.

But it still bugs me that NONE of the national real estate players or national media ever questions how or why foreclosures stopped.  After 2+ years of 60% or more growth of foreclosures AND serious delinquencies, all of a sudden BOTH dropped off a cliff at the end of 2009.

Our federal government and the banking industry obviously conspired to stem the losses, and then funded community activist groups who buy mortgages at a discount.  Here is an example:

Nevada’s distressed home loans are still caught in economic quicksand, but not for lack of trying to combat banker haste with consumer-oriented ideas. The National Council of La Raza (NCLR), for example, has invested significant donor funds in efforts to bail out underwater borrowers when banks won’t negotiate fairly.

“You want to keep families in place if possible, so foreclosure is the absolute last choice that we want, if we’re involved in the transaction,” NCLR Vice President for Housing and Community Development Lot Diaz told ThinkProgress.

Diaz’s colleagues at an affiliated non-profit called Hogar Hispano purchase distressed mortgages and then return the homes to the owners at a fair market price that restores their chances of building up equity in the property. Hogar Hispano did 463 of these distressed debt acquisitions in 2013 alone, and saw a favorable outcome for the original homeowner in 316 of those cases.

Hogar Hispano also buys up houses that have already been taken over by the bank, known as REO properties, and then finds a buyer for them or converts them into rental units targeted at low- and moderate-income families. The group says its REO work has created close to 900 new homeowners and turned bank-owned homes into occupied housing more than 1,100 times, in Nevada and elsewhere. (LINK)

The whole mess just got swept under the carpet, which gave the insiders a fantastic opportunity to profit!  What a country!

Posted by on Oct 12, 2016 in Foreclosures, Foreclosures/REOs, Jim's Take on the Market, No-Foreclosure as Banking Policy | 3 comments

Foreclosure Throwback

bp

Homes that were foreclosed back in the day have been re-selling – and someone you know just happens to have an extensive video library!

The original purchase price for this McMansion in Chula Vista was $1,301,500 in 2007, but got foreclosed 20 months later.  The bank listed it for $585,900, and it closed for $630,000 in March, 2009.

This is how it looked then:

It resold again for $965,000 a year ago, and then it closed for $1,275,000 this month.  Here is how it looked:

http://www.realtor.com/realestateandhomes-detail/361-Bryan-Point-Dr_Chula-Vista_CA_91914_M22586-80814

Posted by on Sep 27, 2016 in Bubbleinfo TV, Foreclosures, Foreclosures/REOs, Jim's Take on the Market, Sellers Waiting For Comeback | 4 comments

California Mortgage-Debt Tax Relief

jb

California used to lead the nation in exempting mortgage-debt relief from taxation.  But the latest extension of that law was defeated, leaving short-sellers and those being foreclosed in a prickly position – do they hang in there now?

The reason the bill died is because Jerry Brown and other state politicians want to reap the additional tax – but these beleaguered folks can’t or won’t pay it and will have to hang on to their over-encumbered properties.

Senate Bill 907, which had won unanimous approval of the state Senate, died in just a few seconds last week, and that angers Peggy Spatz.

She and her husband, George, took out a $150,000 second mortgage on their modest suburban Sacramento home 11 years ago, only to see home values and their retirement investments crash in the Great Recession that struck shortly thereafter.

They, like millions of other Californians with underwater homes, eventually negotiated a settlement with their lender to write down the loan, only to learn that the canceled debt was what’s called “a taxable event.”

Congress had declared that loan write-downs, short sales and other forms of mortgage relief would be free of federal income taxes. The California Legislature and then-Gov. Arnold Schwarzenegger followed suit for several years, extending relief through 2013.

However, when Jerry Brown returned to the governorship, facing an immense budget deficit, he refused to continue the tax exemption for any relief actions since 2013, last year vetoing a bill that would have added two years to the window. It created, a Senate staff analysis said, “a fine mess.”

Brown said the state budget “has remained precariously balanced (and) I cannot support providing additional credits that will make balancing the state’s budget even more difficult.”

SB 907, carried by Sen. Cathleen Galgiani, D-Manteca, would have extended the tax break through 2016. She represents a region hardest hit by the housing meltdown and during one hearing cited her own underwater mortgage.

“Many years later, it still isn’t worth what I paid for it,” said Galgiani, adding that many Californians are in the same situation and “for us to hit them a second time is unconscionable.”

The Spatzes hoped that with the Senate’s passage and a heavyweight list of supporters, including Attorney General Kamala Harris and real estate and banking lobbies, it would at least get to Brown’s desk.

In anticipation, they wrote a letter to Brown, laying out their experience and concluding, “This letter is written by two people, but there are hundreds of thousands of us. Please don’t turn your back on us.”

SB 907 never made it to Brown. Although it also won unanimous support in the Assembly Revenue and Taxation Committee, it was placed on the Assembly Appropriation Committee’s “suspense file” because of its cost – an estimated $95 million in lost revenue during its first year and $57 million in the next two years.

Last week, the appropriations chairwoman, Lorena Gonzalez, announced the fate of dozens of Senate bills, spending just a few seconds on each. SB 907, she said, would not be sent to the Assembly floor.

As is the custom, no reason for its demise was offered. But it probably had something to do with its heavy cost, more than 10 percent of the total for bills on the suspense file, and the strong likelihood that Brown would have vetoed it, as he had done in 2015.

“The thing that breaks my heart is that people aren’t marching in the street,” Peggy Spatz said after learning of Gonzalez’s decree. “I’m a bitter person at this point.”

http://www.sacbee.com/news/politics-government/politics-columns-blogs/dan-walters/article95999242.html

Posted by on Aug 18, 2016 in Foreclosures, Jim's Take on the Market, Short Sales, Short Selling | 4 comments

Jim TV

Just one more rerun before Kayla introduces our new listing tomorrow night.

This is the 7th most-watched video on Bubbleinfo TV, and is a greatest-hits tour through the REO-listing days.  In April, 2008, the Bank of America had dumped twenty of their REOs in my lap, and over the next 12 months the JtR foreclosure extravaganza ensued.

A month after this video premiered here on the blog (March, 2009), I was on the front page of the L.A. Times, which led to the spot on ABC News Nightline:

Posted by on May 10, 2016 in Bubbleinfo TV, Foreclosures, Foreclosures/REOs, Jim TV, Jim's Take on the Market, REOs, REOs for sale | 0 comments

Wrongful Foreclosure Lawsuits in CA

freecheese

Those who were wrongly foreclosed won’t get their house back, but the courts might make the banks throw around some more free money.

http://www.latimes.com/business/la-fi-foreclosure-ruling-20160302-story.html

Excerpts:

During the bust that followed last decade’s housing boom, hundreds of thousands of Californians lost their homes to foreclosure. It was a process later found to be rife with problems, such as overwhelmed bank employees who sometimes didn’t even read the foreclosure documents in front of them.

But challenging foreclosures on the basis of paperwork problems proved to be mostly futile, given California courts had ruled that borrowers who weren’t paying their mortgages didn’t suffer financial harm.

Now, a recent decision by the California Supreme Court will allow some of those former homeowners to pursue lawsuits and possibly win damages for wrongful foreclosure even if they were in default.

“They opened the courthouse doors,” said Katherine Porter, a law professor at UC Irvine and a former monitor for a national settlement over foreclosure abuses.

A statute of limitations of four years might mean that the decision won’t help most of the nearly 1 million California homeowners who were foreclosed upon from 2007 to 2012, according to real estate data provider CoreLogic.

Still, Porter estimated there may be tens of thousands of Californians who could conceivably argue for damages given inconsistencies in documents that transferred their loans.

Others are more skeptical.

George Lefcoe, a professor at the USC Gould School of Law, said it will be very difficult for borrowers to prove that the ownership of their loans was so muddled that the foreclosure process was fatally flawed.

And even if borrowers do win the argument, it’s unclear what damages they may receive, if any.

Read the full article here:

http://www.latimes.com/business/la-fi-foreclosure-ruling-20160302-story.html

Posted by on Mar 3, 2016 in Foreclosures, Jim's Take on the Market, Mortgage Lawsuits, Mortgage News | 0 comments

No More Doom

govt loves bubbles

As a new year begins, there has to be people wondering how much longer the market can stay buoyant.  Even with rates staying low, home buying is out of reach for many, if not most San Diego residents, and wages don’t seem to be going up much.

Is the bubble going to pop again?

This guy has been our perpetual doomer, and is one of the only four ‘experts’ out of 108 who said that prices could go down in the next five years. He has summarized all the reasons of possible doom here:

http://mhanson.com/archives/1968

The thing he ignores is that the government is totally supportive of housing.  They bailed us out last time, and it left an indelible mark.

The turning point for The Big Bailout was in 2011 when Bernanke literally told the banking industry to ‘not do anything to harm the economy’, which was code for ‘Stop Foreclosing’:

http://www.bubbleinfo.com/2014/03/03/bernanke-stopped-the-flood/

Since then, the number of  foreclosures have dropped like a rock, and after Kamala passed the California Homeowners’ Bill of Rights, lenders are required to coddle defaulting homeowners for as long as possible.

The result is a very soft landing for any borrower who doesn’t feel like making their payments.  The banks can stretch out any necessary foreclosure activity for months or years, and spread them around evenly so they don’t ‘harm the economy’.

If you are a potential home buyer who is concerned about future foreclosures causing home prices to drop, I hope that relieves any fears.  Buy a house you can comfortably afford, and stay forever.

For those who want to check for foreclosures, see below:

Posted by on Jan 5, 2016 in Foreclosures, Jim's Take on the Market, Market Buzz, Market Conditions, Thinking of Buying? | 2 comments

99 Homes

The foreclosure movie ’99 Homes’ is out – here is the review from Variety:

http://variety.com/2014/film/festivals/venice-film-review-99-homes-1201293206/

Here is what the sfgate.com had to say:

“99 Homes,” a gripping, intelligent thriller set amid the bursting of the nation’s housing bubble, zeroes in on the ruination of the American dream and the morally bankrupt characters who profited from the carnage. Like “The Grapes of Wrath,” it’s a classic example of how to take a social issue and turn it into riveting cinema.

The story opens in an Orlando, Fla., bathroom, where a family man has just killed himself to avoid the specter of being thrown out of his foreclosed home. Not long after the yellow police tape has been set up, real estate broker Rick Carver (the incomparable Michael Shannon) is prowling the premises, with an e-cigarette in his mouth, a cell phone in his ear and a gun attached to his ankle. Carver needs to make sure that the dead man’s grieving wife and kids are shooed off the grounds, so he can keep his banker clients happy.

Then it’s off to another residence, where Carver’s next victim awaits: down-on-his-luck construction worker Dennis Nash (Andrew Garfield, back in top form after his “Spider-Man” foray), his mother (the always reliable Laura Dern) and his son. It’s the first of many evictions in this movie, and director Ramin Bahraini imbues all of them with a palpable sense of terror, anguish and heartbreak.

As it turns out, Carver sees a lot of leadership potential in the handyman Nash, who ends up striking a Faustian deal in which he helps the ruthless broker with evictions in exchange for financial help. Because of Garfield’s skill, and the strength of the script, we sympathize with the desperate Nash and his love for his home, even as he forecloses on his moral values.

Likewise, Shannon provides interesting shadings to Carver. On the surface, he’s Gordon Gekko with a “Miami Vice” outfit, but it’s clear that Carver doesn’t enjoy what he’s doing or view it simply as a way to get rich. Instead, he sees himself as a player trying to survive in a game that’s been rigged against 99 percent of the population. Shannon manages to convey an inner loneliness, a quiet desperation that he’s gone too far but can’t turn back.

The movie trailer:

Posted by on Sep 30, 2015 in Foreclosures, Jim's Take on the Market, Local Flavor, Real Estate Investing | 1 comment