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More Foreclosure Delays

Another fishy can-kicking device being employed here – hat tip to SD Squatter for sending this in from the latimes.com:

Sales of homes in foreclosure by Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc. ground nearly to a halt after regulators revised their orders on treatment of troubled borrowers during the 60 days before they lose their homes.

The banks said they paused the sales on May 6 to make sure that their late-stage foreclosure procedures were in accordance with the guidelines. The banks wouldn’t say exactly which issues had been under scrutiny.

Bank of America Corp., by contrast, continued foreclosure sales at a normal pace, apparently confident its procedures met the revised restrictions.

“We manage our mortgage servicing operations in compliance with all laws, regulations and standards for sound business practices,” BofA said Friday in a statement.

The halted foreclosures are the latest complication stemming from a settlement between 13 large mortgage servicers and their federal overseers. Banks and regulators also have struggled to distribute billions of dollars in aid to borrowers equitably as required under the settlement.

Chase resumed a normal volume of foreclosure sales last week, saying its practices complied with the latest bulletin from the Treasury Department agency that regulates national banks, the Office of the Comptroller of the Currency, or OCC.

http://www.latimes.com/business/money/la-fi-mo-banks-foreclosure-halt-20130517,0,4350791.story

Posted by Jim the Realtor on May 20, 2013 in Foreclosures/REOs | 2 comments

More Inventory Coming?

An excerpt from HW:

Any homebuyer on the market right now will tell you the crowd of buyers and multiple offers are creating a challenge.

Those in search of distressed homes owned by the U.S. Department of Housing and Urban Development are not immune to this supply-and-demand situation. In fact, recently one HUD home in San Diego attracted 100 offers within 10 days.

“In this market, because it’s so competitive we’re seeing buyers just happy to get a house. They are being less selective on location and condition,” said Whissel, broker/owner of Whissel Realty.

But in its latest news report, RealtyTrac reported that an uptick in homes owned by HUD may create opportunities for patient buyers.

Experts project that over the next two years, as lenders steadily work through a backlog of foreclosures delayed by foreclosure-processing reviews, the supply of these HUD homes will increase significantly.

In the western part of Riverside County in California, HUD-owned home sales are increasing significantly.

“HUD sales have increased due to the hold back of bank-owned homes for robo-signing reviews, and, most recently, the Homeowner Bill of Rights,” said HUD local listing broker Nat Genis.

Genis added, “Inventory is there, just not being released during the banks/servicers review of the loan/mortgage documents.”

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For those hoping for more inventory, it’s good to see that the recent foreclosure activity around San Diego appears to have been going in the right direction over the last couple of weeks:

San Diego County Filings

Posted by Jim the Realtor on Apr 30, 2013 in Foreclosures/REOs, Frenzy, Graphs of Market Indicators | 2 comments

Redefaults Rising At Alarming Rate

An excerpt from an article in the MND:

While great efforts must be taken to avoid a future crisis and bailout the SIGTARP says, we cannot lose sight of the current TARP bailout. Wall Street may have recovered but Main Street has not. TARP was always intended as a bailout of the financial system to protect American families. Business and homeowners are still feeling the effect of the crisis and still need help from TARP.

“In its March 2013 TARP report, Treasury writes, ‘Thanks to TARP…struggling homeowners have seen relief, and credit is more available to consumers and small businesses. ‘” SIGTARP says of this, “Lost in this statement is the unfortunate reality that this improvement is only a fraction of what TARP could and should have done, and in many ways still can do.”

As of March 31, Treasury had spent less than 2 percent ($7.3 billion) of TARP funds on homeowner relief programs including HAMP and the Hardest Hit Funds while spending 75 percent to rescue financial institutions. “Treasury pulled out all the stops for the largest financial institutions, and it must do the same for homeowners.”

Treasury also has a responsibility to insure the help it does provide is sustainable.

In order to avoid foreclosure through HAMP a homeowner must remain active in a permanent mortgage modification and only 862,279 homeowners are in one, about half of which were funded with TARP money.

Now many homeowners are defaulting on these modifications, more than 312,000 to date. SIGTARP is concerned that these defaults are increasing at an alarming rate. As of March 31 the oldest modifications, done in Q3 and 4 of 2009, are defaulting at respective rates of 46.1 and 39.1 percent.

The report says Treasury should work to curb redefaults, which often inflict great harm on already struggling homeowners when any amounts previously modified suddenly come due. SIGTARP recommended this month that Treasury conduct research to better understand the causes of redefaults and work with servicers to develop an early warning system so they can intervene before problems occur.

As regards Wall Street, the report says too big to fail is not just about size, it is about the interconnections the largest financial firms have to each other and to American households.

Regulators were shocked, in 2008, to find how these large institutions were tied to each other and to counterparties so that if one went down it pulled other down with it. Even the institutions themselves did not realize the extent to which they were linked. Nor did they realize their exposures to short-term funding counterparties which, as Treasury Secretary Geithner said, “can flee in a heartbeat”, bringing the system down. While the financial system is more stable now, ending too big to fail is critical to its safety.

http://www.mortgagenewsdaily.com/04242013_tarp_hamp.asp

Posted by Jim the Realtor on Apr 24, 2013 in Foreclosures/REOs, Shadow Inventory, Strategic Defaults | 5 comments

Blaming The CA HBR

Several readers have suggested that the CA Homeowners Bill of Rights has been the cause of the slowing foreclsoure activity – and now Barclays agrees. From dsnews.com:

The California Homeowner Bill of Rights (HBR) is the main driving force behind the recent slowdown in foreclosure sales and short sales in the Golden State, according to a research report from Barclays. In addition to stalling the foreclosure process, provisions in the new bill, which took effect January 1, 2013, have also led to an increase in litigation risk for servicers, analyst at Barclays found.

According the report, short sale activity and foreclosure sales have been dwindling over the past few months, as indicated by foreclosure-to-REO and foreclosure-to-liquidation roll rates. At the same time, roll rates in other states appear to be steady.

As a result of the HBR, Barclays believes “servicers have become significantly more cautious when carrying out foreclosure sales” in the state. While the bill offers several protections to homeowners, one particular provision that allows borrowers to sue servicers for “material violations” of HBR could result in additional costs for servicers.

Violations of the HBR include dual-tracking, failing to provide a single point-of-contact, and neglecting to deliver proper notice of loss mitigation options.

The report explained that prior to a foreclosure sale, homeowners can seek injunctive relief to halt the foreclosure process. If a homeowner secures an injunction, the borrower can pass all legal costs to the servicer through the HBR, even if no material violation of the HBR is proven later, the report explained.

“Our understanding is that securing an injunction may require only a declaration from the borrower that a material violation of the HBR has occurred and some reasonable justification for further investigation into the alleged breach. It is possible that multiple consumer rights attorneys will offer their services on a contingent basis to borrowers facing foreclosure, effectively providing the homeowner with a zero-cost option to pursue litigation,” the report stated.

If the request for an injunction is granted, legal costs could easily rise to the thousands as the court looks into the allegations. The process could also add another 6-12 months to the foreclosure process, according to the report.

“Furthermore, borrowers are much more incentivized to demand a copy of the promissory note, the chain of mortgage assignments, and the borrower’s payment history to collect evidence that a breach of HBR occurred, further stalling the foreclosure process,” the report explained.

Even though California is not a judicial state, analysts suspect the increase in litigation risks and the extended foreclosure timelines might cause servicers to pursue more judicial foreclosures, which are exempt from the HBR’s provisions.

http://www.dsnews.com/articles/impact-of-california-homeowner-bill-rights-on-foreclosures-2013-04-15

Posted by Jim the Realtor on Apr 16, 2013 in CA Homeowners Bill of Rights, Foreclosure Count, Foreclosures/REOs | 2 comments

McMansion With Yard

Standard bank deal these days – no frills, max money:

Posted by Jim the Realtor on Apr 10, 2013 in Bubbleinfo TV, Foreclosures/REOs, REOs | 2 comments

No State Relief Yet

A bill that would extend for one year state income tax relief provided to homeowners who receive mortgage relief from their lenders was temporarily put on hold in the Legislature on Monday.

If enacted, it would align state law with federal law, which has been extended to provide another year of tax relief.

Through “short sales,” lenders agree to let borrowers sell their homes at a price lower than the amount owed on their mortgage. They then forgive the difference between the sales price and the amount owed. Historically, such loan forgiveness has been treated as income for tax purposes.

The federal Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure or short sale of a primary residence up to $2 million, qualifies for the relief.

The state law providing more limited relief than the federal act. It excluded from taxable income up to $500,000 in debt forgiveness.

AB 42 by Assemblyman Henry Perea, D-Fresno, would extend the state law for a year. The Franchise Tax Board estimates its enactment would reduce state tax revenue by $50 million this year.

The bill was presented to the Assembly Committee on Revenue and Taxation on Monday. As it routinely does with measures that would significantly affect state revenue, the panel delayed taking action until the details of next year’s budget projections become clearer.

Posted by Jim the Realtor on Apr 2, 2013 in Foreclosures/REOs, Short Sales, Short Selling | 0 comments

More Foreclosure Lawsuits Expected

California’s Homeowners Bill of Rights will add an estimated $30,000 of legal exposure into each and every non-judicial foreclosure, according to a white paper released by Robert L. Jackson and Associates.

Intended to educate loan servicing professionals and the financial institutions that hire them, the white paper states that the new law will change long-standing legal doctrines in the state.

The new law will also make compliance with its provisions nothing more than a very expensive defense to borrower claims of wrongful foreclosure, the white paper stated, while encouraging such claims through its private right of action.

“The industry’s focus on procedurally complying with the Homeowners Bill of Rights is misplaced,” said Scott J. Jackson, executive vice president of the firm.

The white paper concludes that the Homeowners Bill of Rights “effectively kills” the non-judicial foreclosure process it originally intended to reform. The paper states that the new law makes judicial foreclosures a cost-effective and time-efficient alternative.

“The new law strips away protective legal doctrines that an entire generation of servicing professionals have come to rely on, making it much more difficult and significantly more expensive to resolve claims brought under the new law,” Jackson said.

http://www.housingwire.com/fastnews/2013/03/06/california-homeowner-bill-rights-creates-30k-legal-exposure

Posted by Jim the Realtor on Mar 6, 2013 in CA Homeowners Bill of Rights, Foreclosures/REOs, Mortgage News | 2 comments

Have Banks Stopped Foreclosing?

There are several articles out today commenting on the decline on foreclosure activity.

The ivory-tower types are quick to give credit to the CA Homeowners Bill of Rights, or to short sales being the preferred method of liquidation, instead of foreclosure.

Here are excerpts from this latimes.com article entitled, “California’s Housing Recovery May Gain Momentum, experts say”:

forweclosureactivity While dramatic, the drop is part of a general decline in foreclosure actions over the last year as banks look toward short sales and loan modifications as alternatives to seizing homes.

“You will see a continued decline in defaults from regulator activity, new laws and from the economy,” said Dustin Hobbs, a spokesman for the California Mortgage Bankers Assn. “As long as the economy, and especially the housing market, continues to slowly heal itself, you will see fewer and fewer defaults.”

Madeline Schnapp, director of economic research for ForeclosureRadar, believes the low levels of foreclosures will continue.

“The plethora of anti-foreclosure laws have been very effective in reducing foreclosure activity to what you are seeing today,” she said.

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We are being led to believe that people have stopped defaulting, and anyone in trouble is taking the friendlier short-sale exit.

But short-sales and REO sales have both dropped off substantially:

NSDCC Detached-Home Closed Sales Jan 1 – Feb 7th

Year	Short-Sales	REO Sales	Non SS/REO
2011	29	18	133
2012	42	20	130
2013	23	4	180

Looking at this chart, it looks like the banks ramped up cancellations in September or everyone just started making their payments:

San Diego County Trustee-Sale Results

How can any of the “experts”, or the media look at the data and not wonder if lenders have deliberately stopped foreclosing? The banks have us right where they want us – feeling good about buying homes again, and the media is blindly pushing the new drug.

San Diego County Filings

Posted by Jim the Realtor on Feb 14, 2013 in Foreclosures/REOs, Market Conditions, Short Sales | 31 comments

Not-Foreclosing As A Strategy

Bank of America Corp. has amassed $64 billion of mortgages that are at least six months delinquent and have yet to enter foreclosure, more than twice the amount held by its four largest competitors combined.

The loans are monitored as part of February’s $25 billion settlement between the top five U.S. lenders and state attorneys general over allegations of abusive foreclosure practices. Bank of America’s stockpile of deteriorating debt is mostly from its 2008 acquisition of Countrywide Financial Corp., once the nation’s largest mortgage provider. Wells Fargo & Co., the biggest U.S. servicer, has $15.3 billion of such unpaid loans.

The data, published last month by the monitor of the settlement, highlight Bank of America’s vast backlog of delinquencies, and the years it will take to work through them as borrowers fall further behind and losses mount for investors in mortgage-backed securities. While the Charlotte, North Carolina-based bank has begun modifications for many of its 275,000 homeowners at least 180 days behind as of Sept. 30, some will join the already clogged U.S. foreclosure pipeline.

“There’s just a long tail to work out all of these loans, which are severely delinquent at this point,” said Marty Mosby, an analyst with Guggenheim Securities LLC in Memphis, Tennessee.“It just shows the amount of work that’s still left to do.”

Delays in processing the loans add to the expenses borne by investors because maintenance, property taxes and other costs add up. While rising prices may make the mortgage-backed securities more valuable, servicers can be forced to come up with cash to cover interest payments from the delinquent loans and modifications become more difficult to accomplish as the borrower’s unpaid debt grows.

Bank of America’s portfolio of loans that are at least six months old and not in foreclosure accounts for 3.3 percent of all of the mortgages it services. Citigroup Inc. has 1.1 percent of its loans in that category and Ally Financial Inc., Wells Fargo and JPMorgan Chase & Co. each have less than 1 percent.

Bank of America has about 930,000 loans that are at least 60 days delinquent, down from 1.5 million from the peak in January 2010, Chief Executive Officer Brian Moynihan, 53, said during a Dec. 14 event at the Brookings Institution in Washington.

Posted by Jim the Realtor on Dec 20, 2012 in Foreclosures/REOs, Loan Mods, Market Conditions, Mortgage News, Principal Reductions | 2 comments

‘Mission Accomplished’

With the strategy of not-foreclosing working so well for the banks, you can probably say that REO and short-sale listings are winding down. How did we do?

While it is likely that REO and short-sale listings will continue for years, the media keeps touting how the distressed-property numbers are in decline. Lenders should be pursuing defaulters and liquidating their portfolios while the market is hot, but don’t be surprised if you see them do what most regular sellers are doing – waiting for prices go higher.

Here are the grand totals of NSDCC detached-home sales since 2008, when the MLS first started marking the REO and short sales separately:

Town or Area	REOs#	$/sf	Shorts#	$/sf	Non-REOSS#	$/sf	Non % of Total
Carlsbad	349	$242/sf	483	$243/sf	3,986	$283/sf	83%
Encinitas/Cdf	147	$295/sf	166	$306/sf	1,859	$401/sf	86%
RSF	65	$332/sf	54	$356/sf	771	$482/sf	87%
La Jolla	63	$484/sf	71	$487/sf	1,117	$675/sf	90%
Carmel Vly	75	$302/sf	130	$301/sf	1,851	$342/sf	90%
Del Mar/SB	43	$411/sf	40	$458/sf	943	$653/sf	92%
Totals	742	$296/sf	944	$296/sf	10,587	$405/sf	86%

We really didn’t get hit like the subprime-loan areas did, and NSDCC could withstand further foreclosure activity – in fact, homebuyers would welcome it!

Comparing the average $/sf of REO vs. short-sales helps to debunk the myth that short sales are better for the lenders than foreclosures.

Posted by Jim the Realtor on Dec 20, 2012 in Foreclosure Count, Foreclosures/REOs, North County Coastal | 3 comments

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Category Archive: ‘Foreclosures/REOs’

More Foreclosure Delays

More Inventory Coming?

Redefaults Rising At Alarming Rate

Blaming The CA HBR

McMansion With Yard

No State Relief Yet

More Foreclosure Lawsuits Expected

Have Banks Stopped Foreclosing?

Not-Foreclosing As A Strategy

‘Mission Accomplished’

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