In case you didn’t catch it in other places…..
Bank of America’s statement about their foreclosures/REOs:
Foreclosure sales have been abnormally low since we learned of the pending implementation of the administration’s Making Home Affordable program. From that point, we delayed the initiation of foreclosure proceedings and sales for customers that may eligible for a loan modification under MHA. As a result of this policy, our foreclosure sales in recent months have been as little as half the normal pace we experienced before. Until a foreclosure is completed, Bank of America continues to exhaust every possible option to qualify customers for modification or other solutions. Now that Making Home Affordable programs are operational, we do project an increase in foreclosures as we exhaust every available option to qualify customers for modifications and other solutions. While we have very strong loan modification programs now available, unfortunately, these foreclosure projections reflect the increasing number of customers who will not qualify for loan modification because they have suffered major life events servicers can’t solve…primarily unemployment and underemployment. We do not hold foreclosed properties off the market. The vast majority of mortgages serviced by Bank of America are owned by third-party investors. We have an obligation to them to prepare foreclosed properties for market and sell them as efficiently as possible.
People still talk about the banks are holding properties off the market for accounting purposes, let’s please note the last paragraph. The banks don’t own that much of the paper.
More here at this link:
http://www.cnbc.com/id/32630317?__source=RSS*blog*&par=RSS
Hat tip to the three people who sent me the link!
The Bressi Ranch flipper listed today on the range $775,000-$825,000 (paid $595,000). Not cleaned yet though.
Let me be the 1st to call BS!! I know for a FACT (no I cant prove it and no I don’t have documentation) that BofA is sitting on over 2000 properties in San DIego county alone! I also have inside information that some of their mods are agreements with current owners to pay 1 or 2 payments and live in the property for another 10 months. Supply and demand cant work if the supply is being held back.
Welcome Joe! I erased your email address and website link to your mortgage business. I get hundreds of spams, so I don’t differentiate – I delete all mortgage guys who “comment” but are really just to try to skim business.
I left your remarks though. I don’t agree with them, however, and I have checked the tax rolls.
Here is today’s SFR and condo REO count, by owner name:
Band of America = 110
Countrywide = 3
Bank of NY = 19
Deutsche = 51
US Bank = 67
Cwabs = 15
Total = 265 properties under BofA banner
Yes there is a big backlog of NODs and NOTSs, over 20,000 in the county. Most think they are getting a good loan mod, and probably won’t. I’m guessing that the majority will opt for foreclosure.
“We have an obligation to them to prepare foreclosed properties for market and sell them as efficiently as possible.”
Not to sound like a conspiracy freak but what if the third party investors, like the banks, don’t want the market flooded with inventory? And since when did banks acquire a sense of obligation?
295 foreclosed properties under BofA is very surprising to me. I had imagined it in the thousands. Keep in mind though, this is only one bank, albeit a big one.
Didn’t the California Legislature pass a number of bills kicking this can down the road at least six months? And it is my understanding the banks are trying to get people to agree to 40-year loans, without a reduction on principle. They just want to create a huge pool of people being indentured servant to them.
40 year mortgage = indentured servitude.
Banker: How would you like to live in a pos on a 40 year loan that we modded for you so you can stay?
Person: Ugh. I thought I could flip this pos and make big money. !@#$% me!
Jim,
Not a problem with taking off the link. I have been a blog stalker of yours for a while (found you on youtube) and only recently made a comment or 2 with no intent of spamming. Hopefully the link I am using on this post is ok ;-).
There are a few things that I think are affecting our market and making a big shift right now, over 50% of loan mods are going delinquent so they are costing the banks more money than if they were to take the property back in the first place. I think because of this more short sales are going to be approved because the banks dont want to own property they want cash on hand to be able to leverage 9x again so their current book of business dosent look like the pile of festering garbage that it is. TARP money is being paid to banks for not taking porperties right now so a short term mod with a deed in lieu makes perfect sense and the person that I got that info from is very credable. The numbers that you are quoting sound like the end of the old c-wide subprime book of business and really cant include (well I guess it can but it seems unlikely) the stated A-paper , alt -a , no doc, no ratio and option arm portfolios, even full doc arms from 3 years ago are doomed. There are limited programs for any of these people to take because if nothing else values are not there. If someone bought in 06 with a 3 or 5yr interest only ARM (both were a paper product)full doc with 20% down they are upside down and cant qualify even with a 800 fico score. I think some numbers worth looking up would be how many ARMS and option Arms were written between 04 and 07 for purchase OR refinance, subtract the number that have been sold, subtract the number that have been taken back by banks, maybe take 30% off the top to be positive about the whole thing and the remaining number should be the s-ton of properties that are going to keep values down for YEARS to come.
Not sure how I got off of that tangent but thats my story and Im sticking to it.
By the way I’m not in any way bashing BofA or C-wide. I have used both in the past to get financing and still use BofA for certain products, I think the only thing that C-wide was guilty of was dominating a market place that crashed in a serious way.
Wait, isn’t this a bit of a technicality? First they say they delayed foreclosures, then they say they don’t hold foreclosed properties off the market. Wouldn’t it be fair to say they are holding what would be foreclosure properties off the market by delaying the foreclosure proceedings? If that’s not “holding properties off the market for accounting purposes” it sounds kissing close.
I guess I’m unclear on whether people mean “foreclosed houses held off the market” or “houses with people in them paying no mortgage yet have not been foreclosed on” when they talk about shadow inventory.
But kudos if they get off the can and initiate foreclosure proceedings, and sell those.
I don’t know why we keep splitting hairs, it sounds very simple to me: BofA says “yes, we’ve been waiting to see if these mods stick, so many foreclosures have been either delayed or averted” and “no, once we do foreclose, there is no point in keeping empty REOs around forever, so we move them fast”. Frankly, this story makes perfect sense and it fits with what we’ve seen happening.
I think you nailed it dwip. I think the free renters aren’t “foreclosures,” simply because the bank hasn’t foreclosed on them yet. That is my understanding.
It’s like a burger joint saying they’re out of fries when there’s a mountain of potatoes in back.
Um, no contradictions here. BoA’s statements are 100% consistent with all the comments so far. In fact, they go through the trouble of explaining them.
In case you skipped over the important part:
# From that point, we delayed the initiation of foreclosure proceedings and sales for customers that may eligible for a loan modification under MHA. As a result of this policy, our foreclosure sales in recent months have been as little as half the normal pace we experienced before.
# Until a foreclosure is completed, Bank of America continues to exhaust every possible option to qualify customers for modification or other solutions.
A 40 year mortgage option is charity. They should be kicking people out ASAP. It’s like giving a homeless guy 50 cents and him calling you cheap and asking for a dollar. Ironic that deadbeats of the same nature live in homes too.
When you lie on a loan to get into a house, by definition you’ve taken the place of someone else who should have gotten it instead. The fact that you can’t pay what you promised and lied to do is your problem, not society’s.
Amen, sdbri.
Yes, I think the banks/servicers have avoided even issuing NODs. IMHO, they are trying to hide the elephant under the rug by pretending that these homes are not in the “foreclosure process.”
At some point, one would think the servicers/lenders would want their money, no? Or, are we taxpayers making them whole via the various bankers’ bailout programs?
With 4 million homes 60+ days delinquent, what are the odds that they will cure, either on their own or through a loan mod?
What percentage are delinquent due to job loss or simply not being able to keep up with rising payments?
What percentage is not paying in hopes of getting a loan mod? Of that group, how many will get a loan mod that they are willing to accept, and of those that do accept it, how many will re-default later?
Whether it’s a tsunami or a slow,steady flow, there will be many more foreclosures to come.
http://www.calculatedriskblog.com/2009/08/hope-now-mortgage-loss-mitigation.html
There are now more than 3 million mortgage loans 60+ delinquent based on the Hope Now statistics.
The Hope Now program covers approximately 73% of the total industry, so the total delinquent is probably over 4 million now.
If someone could compile the delinquency numbers ala CR for SD County then you could have a very dependable position on the future of REO’s. CR claims 4M are 60 days or more delinquent, I think even the most optimistic bull would have to agree that once the owner is 90 days out he/she is not going to make it and the inevitable is foreclosure.
After these people get use to free rent, it’s more addictive than heroin, and the chances of re habitation are less likely.
I think we need to take a step back and look more broadly at this issue.
1. If banks wouldn’t have been given TARP they wouldn’t have been able to let people live for free in properties.
2. Deadbeats are a burden on society and should not be rewarded for their own stupidity.
Eventually government is going to wake up and realize all the “let people live in houses for free” programs hurt them more then they help. Sure you can buy votes by giving out free cheese but if the votes your buying don’t pay taxes there’s no free cheese to give out.
What about those stated income folks who need a loan modification?Lets say their business is way down but they are able to make lower payments from savings shouldn’t they be able to get a loan mod?Does it really matter where the money comes from to make lower payments?What if the borrower was going to borrow money from family to make payments or even charge it on a credit card.I am just not sure about the way they are allowing loan mods or not.
Eventually the government is going to wake up and realize all the “let people live in houses for free” programs hurt them more then they help.
Shashdash is an optimist! Who wudda thought?? 😉
“Does it really matter where the money comes from to make lower payments?”
Extending a loan modification to someone without income in economic hard times… Depending on how you look at it, that seems either cynical and shortsighted, or optimistic and naive.
I believe the reason they are being held back is the holders of the notes CDS MBS refuse to negotiate,think CHINA saying FU.Market Ticker has a piece on the Chinese now refusing to honor contracts on swaps in the commodity markets as we screwed them on mortgage swaps.Not to mention if the banks marked all the losses the first TARP would be a drop in the bucket as the banks would close down without trillions of dollars of new bailout money.
“Not to mention if the banks marked all the losses the first TARP would be a drop in the bucket as the banks would close down without trillions of dollars of new bailout money.”
Yes…
This is what SHOULD happen. When you reward (through the free TARP taxpayer money giveaway) foolish actions. You get more foolish actions. When you force banks to stand on their own excepting the fallout from poor business decisions. Banks will be more responsible and less foolish with the money they lend out. It really is this simple.
What banks want to do is…
Privatize Profits, and Socialize Debt
Our representatives should never let this happen.
Privatize Profits, and Socialize Debt
Yes the reality is that is what they always do,it isn’t right but it is what it is.Invest accordingly!
shadash-If the banks hadn’t been given the TARP money the entire economy would have collapsed. That TARP money has little to do with a bank’s foreclosure policies. Now, other governmental rules, like the MHA, do have an effect, but the TARP doesn’t.
http://www.cnn.com/2009/POLITICS/08/31/homeowners.mortgage/index.html
When the recession hit, the Arizona couple’s income plummeted. They tried everything they could think of to hold on to their house: They drained their savings account, sold their 401(k), changed jobs.
It wasn’t enough, and foreclosure is set to begin in a week.
The Kollars thought they had one last hope: the Making Home Affordable program, which should have reduced their monthly mortgage to affordable payments. In theory, it’d be a win-win: The Kollars and their two children keep their home, and the nation avoids one more foreclosure.
The problem? The bank hasn’t been playing along, and the Kollars have no place to turn.
****
A CNN investigation revealed that the Kollars are far from alone. Housing counselors, homeowners and consumer advocates tell endless stories of banks giving homeowners the runaround: declining apparently eligible applicants; pressuring them into loans they can’t afford; placing homes in foreclosure while the owners are being considered for a modified loan; lenders telling homeowners to waive their legal rights, even though the program prohibits it; or banks telling homeowners that they have to be in default to qualify, which isn’t true.
****
According to the Treasury Department’s most recent report, only 230,000 of the up to 4 million eligible homeowners have new mortgages under the program.
Treasury Secretary Timothy Geithner has told bankers that he’s not happy with the pace. Banks say that it took 90 days to get the program’s rules and procedures and that they’re still training staff members to handle it.
****
The bank plans to watch his earnings for a few more months before it moves ahead “with consideration of a trial modification offer.” Simon said the bank is offering the Kollars a temporary new mortgage payment while it watches their earnings.
“Bank of America is committed to the success of the Making Home Affordable program and helping homeowners avoid foreclosure whenever a borrower has the ability to make a reasonable mortgage payment,” Simon said.
“If the banks hadn’t been given the TARP money the entire economy would have collapsed. That TARP money has little to do with a bank’s foreclosure policies.”
Just because the media says so doesn’t make it true…
The truth is many banks didn’t participate in the lending orgy. The the statement that the economy would have collapsed is BS. Maybe a large number of poorly invested banks would have failed but the smaller banks that are well capitalized would have picked up the slack.
From http://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program
A review of investor presentations and conference calls by executives of some two dozen US-based banks by the New York Times found that “few [banks] cited lending as a priority. An overwhelming majority saw the program as a no-strings-attached windfall that could be used to pay down debt, acquire other businesses or invest for the future.” The article cited several bank chairmen as stating that they had no intention of changing their lending practices to “accommodate the needs of the public sector” and that they viewed the money as available for strategic acquisitions in the future.
Amen, on all your posts, shadash.
The economy would not have collapsed. The FDIC, SIPC, and PBGC should have been backstopped, but everything else that **should have** failed, should have been dropped off a cliff, IMHO.
It is not the taxpayers’ responsibility to bail out deadbeat borrowers, and the equally foolish lenders. That’s how valuable lessons are learned.
If we wanted to “keep credit markets open,” then we could easily have backstopped existing banks that were prudent during the boom. Bailing out the mighty behemoths — who caused all the problems in the first place — was one of the most disastrous policies ever. We will end up paying the costs for these actions many decades from now, IMHO. What would have been a sharp, quick downturn will now end up being a very long, drawn-out recession/depression that will likely last for 10 or more years.
On the bank bailout, we the people effectively bankrolled the worst offenders.
If we let the banks fail, those banks which were responsible would simply acquire the assets of the risky foolish banks.
Would the world have ended? Probably not but who knows. Does Goldman deserve to keep its 3 billion in profit?
When do people steal? When you’re not looking.