From the SD Union-Tribune:
Category Archive: ‘Foreclosures/REOs’
Hat tip to Wendy for sending in this article on subprime vs. prime mortgages causing the crisis. The authors probably didn’t catch the fact that prime borrowers were getting neg-am loans based on FICO scores only, and those weren’t considered subprime loans:
We can draw two conclusions from this data. One is that your chances of being foreclosed upon in the past decade was more a matter of timing than anything else. If you were a subprime borrower in, for instance 2002, who bought a bigger house than a more prudent and creditworthy borrower would have bought, chances are you would have been fine. But a prime borrower who did everything right—bought a house he could easily afford, with a large downpayment—but did so in 2006 would have had a higher chance of defaulting than the subprime borrower with better timing.
Since whether you were hurt by the crisis had more to do with luck than anything else, Ferreira argues we should rethink whether doing more to help underwater homeowners would have been a good idea.
One of the most acclaimed movies from the festival circuit this year is 99 Homes, the latest from Chop Shop and Man Push Cart director Ramin Bahrani. Set in Florida in the aftermath of the 2008 subprime mortgage crisis, the suspenseful drama stars Michael Shannon as real-estate shark Rick Carver and Andrew Garfield as the man that Carver kicks out of his home and then tries to make his apprentice.
Bahrani, whom Roger Ebert called “the new great American director” and “the new director of the decade” in 2009, is known for the immersive research he does in advance of all his films, and his process making 99 Homes was no exception: The filmmaker spent weeks riding the streets with real-estate brokers as they conducted evictions, going to Florida’s “rocket docket” courts as they sped through foreclosure after foreclosure, and visiting the motels where families were living after getting torn from their homes. But though it’s grounded in realism, 99 Homes also works as a Faustian thriller, in the mode of Wall Street or Training Day.
99 Homes opens on Sept. 25, which is just in time to build Oscar buzz for Shannon—though the filmmakers surely hope it will start a larger conversation.
Hat tip to daytrip for sending this along:
Eric Mains is fulfilling a dream many Americans have had since the onset of the financial crisis seven years ago: He’s attacking fraud in the banking industry as aggressively as he can, using every possible tool under the law to achieve justice —and win some money back for himself.
Mains, a former team leader with the Federal Deposit Insurance Corporation (FDIC), has become so bitterly embroiled in a six-year dispute with his mortgage lender that he left the regulatory agency, fearing that he might have to eventually name it as a defendant in a federal lawsuit. He’s one of a small yet determined band of people still fighting foreclosure (the seizure of property) cases with obscure and sometimes arcane arguments, built on a simple yet mind-blowing premise: The true ownership of millions of mortgages issued during the housing bubble was fatally corrupted, and now it’s impossible to prove who actually legally controls those mortgages.
Recent Supreme Court precedent suggests that by rescinding his mortgage—canceling it, basically—Mains and people like him can put the onus on banks to prove they have the right to assets like his house in the first place. If Mains or his allies succeed, they would rip open a wound that virtually everyone in power has tried to stitch up and forget. But such a long-awaited victory wouldn’t make up for the years of stress and personal hardship Mains has suffered, including a failed marriage and now the end of his career in public service.
“I had to ask myself a question: Will I do this no matter if it hurts?” Mains told me. “I said yes. If I can afford to fight these suckers and bring this illegality to light, that’s why I went to law school.”
Mains has gotten divorced, lost custody of his kid, and wound up in the hospital – read the full article here:
The foreclosure rate of loans originated over the last few years has been LOW!
If the strict underwriting continues, we will only see an occasional foreclosure from now on. We’ll be telling our grandkids about how back in the day there was this guy who ran a video-cam through hundreds of them!
A certain foreclosure-subscription company is always rattling their sabre about any uptick in notices. The headline for this article is: Early Stage Foreclosure Filings up Nationwide and in Most States:
But with the banks engrossed with loan-modding anyone who can fog a mirror, the only thing that matters is how many actual foreclosures are being completed. Buried deep in the article:
The dip in total filings was due to a 10 percent reduction in bank repossessions or completed foreclosures compared to October. A total of 25,249 properties were taken into bank inventories or REO, down 17 percent from November 2013.
It was the 24th consecutive month in which completed foreclosures were lower on a year-over-year basis.
The national count of completed foreclosures has been dropping for two years straight! Bill showed how delinquencies have been tapering off too:
Regardless of how it happened, it looks like a soft landing that will last – at least as long as rates are ultra-low.
Here is how the local San Diego County numbers look:
I hope the headline porn grabbed you! 😆
REO listings have increased lately around NSDCC, though they are still a small fraction of the overall marketplace (there have been 2,238 detached-home sales closed this year between Carlsbad and La Jolla).
The short-sale listings coming to market haven’t changed much all year, which would be the first place you would see the effect of mortgage servicers getting tougher with deadbeats:
|Type of Listing|
This guy borrowed $3.75 million to do a spectacular remodel on this Del Mar home (the house with the glass-bottom pool), but he wasn’t going to give it away. The original list price was $6,750,000 in October, 2013, and dropped to $5,950,000 before getting foreclosed in June. The bank promptly listed for $5,495,000, and sold it for $5,210,000 last month:
There is some hope that lenders and servicers are increasing the flow now that prices are so much higher than before, and it would make sense that they would cherry-pick the properties on which they could make a profit.
But no flood of notices yet:
Reader elbarcosr noted that the latest default list was the longest in recent memory, and wondered if the foreclosure market might be coming back to life.
Let’s hope so!
If the NAR would have been looking out for realtors, they would have insisted that the foreclosure process be allowed to run its course, and clear the market. Instead, they lobbied for foreclosure-rescue programs from the government, and now we have a mushy unknown distressed market – again.
Auction.com is one of the culprits, and we just don’t know what to expect from them, other than mis-direction. Back in June, we saw them try to auction a tenant-occupied home that Chase has owned since 2011:
It never closed escrow, and has never been on the MLS – instead, it’s another bank-owned property sent to foreclosure purgatory.
Auction.com is also known for conducting price discovery for NationStar on their short sales. Auction.com will market the home and conduct online bidding even though the seller has a written contract with a buyer. Nationstar has a right to sell their short sales for top dollar, and this process helps to expose any shady dealings by the listing agent, but it doesn’t help the reputation of Auction.com.
Though auction.com is the most visible player in the foreclosure market, we can’t judge the trend by their advertising. What matters most is whether the lenders and servicers are going to liquidate any remaining defaulted properties, especially now that prices are up?
Has Nationstar or other servicers been ramping up production in light of the higher prices? Not really – here are the notices issued over the last 12 months in San Diego County:
The foreclosure market has been rife with speculation and intrigue, but we always seem to end up with a nothing-burger. But I’m giving it another chance – I signed up to be a Zillow foreclosure specialist, figuring it can only get better from here. 😆
I’ll be on flood watch!
This guy only sees negative in the real estate world. He called me once trying to get me to bash the market, and when I refused, he hung up. Even today he is still ranting:
Real estate analyst Keith Jurow, author of the Capital Preservation Real Estate Report, is warning that the real estate market is not as strong as it seems.
Says Jurow: “I never bought into the idea that we had a recovery at all.” His research leads him to conclude that home prices will be heading lower.
His research? Because the Case-Shiller Index is still rising, just not as fast – that means prices will be heading lower? There are plenty of reasons you could use to justify the doomer position (wars, unemployment, unaffordability, earthquakes, etc.), but smaller increases are a weak excuse.
He also thinks we will still have a surge of foreclosed properties to come, just because their are so many people delinquent. But once you miss a few payments and ruin your credit, the delinquent homeowners might as well ride it out until they get the boot.
How are the San Diego foreclosures?
Some said they dropped off because of the Homeowners Bill of Rights, which was released two years ago and became law on January 1, 2013. The bansk have had plenty of time to adjust – here’s how they are doing:
It’s hard to believe that people just go back to making their payments, whether they get a loan mod or not. The banks will wait until they can make money by foreclosing, which around the coastal markets, should be after another 10% appreciation or so. Until then, why foreclose and lose money?
The decline in foreclosures continues, but the pundits and media don’t really look into it much further. Here is the best quote they could come up with in this article, linked below (hat tip to Stormin’):
“We have now registered two and a half years of continuous decreases in the number of homeowners who are in some stage of the foreclosure process. This consistent decline means fewer Americans are experiencing the distress of delinquency and default,” said Anand Nallathambi, president and CEO of CoreLogic.
The foreclosure notices and the number of properties actually foreclosed have dropped considerably in San Diego County.
We have had 1,500 to 2,207 notices sent out per quarter over the last 12 months, but only 450-610 properties foreclosed per quarter. The big gap makes you think that the banks/servicers are still throwing loan mods at anyone who wants one, and cancelling any notices soon thereafter.