While the MERS debacle has many borrowers thinking that they may be getting a free house soon, the biggest threat to the banks/servicers comes from the investors who purchased the securities on Wall Street. Thanks to Kingside, here’s a link to a big class-action suit in the works:
While these investor lawsuits may seem far-removed from Main Street, they could be big trouble….especially for taxpayers, if another bailout is in store:
By now we’ve become comfortably numb to the sensational foreclosure headlines.
Yesterday, from RealtyTrac:
A record total of 102,134 bank repossessions were reported in September, the first time bank repossessions have surpassed the 100,000 mark in a single month.
A juicy headline, but not much help for those trying to analyze their local real estate market.
Here are the number of foreclosed SFRs, and number of MLS detached sales by quarter for North San Diego County Coastal (Carlsbad to La Jolla):
1Q
2Q
3Q
4Q
Year
F/C
MLS
F/C
MLS
F/C
MLS
F/C
MLS
2008
56
393
77
622
88
588
63
433
2009
67
337
85
561
90
681
116
642
2010
101
496
110
734
89
647
It’s not like sales have plummeted because of foreclosures. In fact, there doesn’t appear to be much relationship between the number of foreclosures, and number of MLS sales – even though foreclosures have increased since 2008.
Have the foreclosures affected pricing? While the pricing has been trending downward in the region, it is still relatively high – averaging $375/sf last quarter:
The decline from the peak of $494/sf in 3Q05 to the $375/sf last quarter is 24%. We’ve been averaging 557 sales per quarter (185/mo), which is still more than 5x the average number of foreclosures we’ve been having lately. Rather than how many foreclosures, the real question should be: Are there enough buyers to keep pricing at these levels?
Fourth-quarter prognosis? The sellers who priced right and sold already are thanking their lucky stars, because you never know when some unforeseen event could send chills through the market. Sales are dwindling, due to the shortage of quality inventory at decent prices – yet they don’t have to be giveaways, just reasonably-priced:
On August 17, 2010, attorney Susan Chana Lask filed a Federal Class Action Complaint on behalf of tens of thousands of New York State homeowners who lost their homes to an alleged foreclosure fraud orchestrated for years by a New York “foreclosure mill” attorney and major mortgage companies.
The case is filed in the US District Court, Eastern District of New York, entitled “Connie Campbell against Steven Baum, MERSCORP, Inc, et al.”, Case #10CV3800. It alleges RICO civil racketeering, RESPA, Fair Debt Collection Practices Act violations and that homeowners paid inflated foreclosure and other fees fictionalized by Mr. Baum who profited from the scheme since 2005.
The action seeks to return tens of thousands of foreclosed homes to their owners or the values thereof and hundreds of millions in punitive damages against Mr. Baum, MERSCORP and HSBC.
Attorney Susan Chana Lask discovered the alleged foreclosure scheme after her client lost her 1.7 Million Dollar Brooklyn Caroll Gardens Brownstone home to a $190,000 mortgage foreclosure filed by attorney Steven Baum for HSBC. The foreclosure court filings were false as filed in HSBC v. Cncepcion Campbell, et al, New York Supreme Court, Kings County, Index #20393/07 .
Steven Baum’s foreclosure complaint he filed was for HSBC against Ms. Campbell . It admits the loan was never assigned to HSBC, yet he sued for HSBC. A later Satisfaction of Mortgage was not filed for HSBC but for a company named MERS, admitting HSBC never owned the loan and the foreclosure complaint should have never been filed in the first place. The actual Mortgage was always in MERSCORP’s name and never assigned as required by law. Just who owns the loans Steven Baum forcloses on is a deliberate mystery and potentially tens of thousands of New York homeowners lost their homes on a mystery.
But there’s more. The documents filed in the Courts are signed by attorneys from Mr. Baum’s office under penalty of perjury that they are filing with knowledge of the transaction; however, they have no knowledge as they admit they do not have the documents they attest to in their office. In fact, in the later case filed of Concepcion Campbell v. Walendowski, et. al., New York Supreme Court, Kings County, Index # 08-3467, when Ms. Lask subpoenaed Mr. Baum’s firm for the original Note, they responded it was not needed and refused to produce it; implying they never had it yet they swear they reviewed it in their court filings “under penalty of perjury.”
Hat tip to JimG for sending this along, from theAP:
JPMorgan Chase’s CEO says the bank has stopped using the electronic mortgage tracking system used by major financial institutions.
Lawyers have argued in court proceedings that the system is unable to accurately prove ownership of mortgages. JPMorgan Chase & Co. and other banks have suspended some foreclosures following allegations of paperwork problems in thousands of cases.
The Mortgage Electronic Registration System, or MERS, acts as a trading house for millions of mortgages. Lawyers for homeowners say the system lacks the required paper trail to prove mortgage ownership in foreclosure proceedings.
Bank of America and Fidelity Title came to some “arrangement” in a half-day.
The solution has to already be in the works – scrap MERS, put a fancy name on the new and improved system, and keep foreclosing. And dodge the lawyers!
OC Renter is BACKKKKKK……….he contributes the follow-up story on the previous post.
The folks from Simi Valley who are trespassing in their former home have an interesting hobby.
Every holiday season they produce a massive light show in the front yard of the house. If you feel like getting into the holiday spirit, here’s a link to her set of eight videos: Link to her website or enjoy the one below, complete with music from Disney’s Epcot:
Hat tip to jp for sending this along, excerpts from Housingwatch’sarticle:
The Earls, who admit to having fallen behind on their mortgage at one point due to a loss of income in Danielle’s business, say that they were working with the bank to catch up on their payments. However, she says, whenever they made a payment it was not being reflected on statements, even a $12,500 catch-up payment was not credited to the balance due. Ultimately, there was a $25,000 discrepancy between what they thought they still owed in arrears and what the bank said they owed.
The Earls originally purchased the house for $500,000 in March 2001. Due to some refinances to take out equity, they owed at least $880,000 on a no-interest mortgage loan by the time of foreclosure.
Garvin was not only the listing agent but also the acquisition and sales partner for his client, Conejo Capital Partners, the investors. He says that he purchased the home in good faith for $697,000 in January on behalf of his client, at an auction on the courthouse steps.
After gaining possession from the Earls through eviction in July, his clients spent $40,000 rehabbing the home. Carpets were replaced, appliances updated, and granite countertops added. “The living condition was disgusting,” he says. But once cleaned up, it went under contract to new buyers for $800,000.
Danielle Earl (pictured) says that she and her husband have been foster parents to 43 children over the years and they currently home-school most of their school-age children (six of whom are adopted). So she admits that the walls were probably a bit scuffed and in need of a paint job, and some of the carpet was worn. But, she says, she and her family only had a day to collect their things and have movers haul it away, so it’s not like they were leaving the home in a show-ready state. About arriving back home Saturday, she says: “It was such an emotional moment. Everyone started hugging each other and crying.”
Since possession doesn’t necessarily mean ownership, the Earls still have a battle on their hands, says Pines, who says they were denied a trial by jury to argue why they never should have been foreclosed upon — and their eviction from the 2000-built home was unwarranted.
“The bank used the usual fabricated and forged documents to foreclose,” the Earls wrote in their court petition, in which they describe signatures by bank personnel that do not match, from document to document — an indication to them that documents were not properly reviewed and were fabricated.
“We needed to get back in before the investor and the real estate broker moved in a new family,” says Pines. “I didn’t want to allow the situation to become worse, and we show up and we have to try to throw them out. Danielle and Jim would not have wanted to throw them out.”
The Register asked for 10 ideas of what life would be like in 10 years.
The future of housing from Marji Knitter, president of real estate planners The Moote Group in Santa Ana …
1. You’ll buy your next home at Costco, Lowe’s or Home Depot. Prefabricated homes make a comeback, shipped from warehouse constructed in days.
2. Goodbye to 5,000-square foot McMansions. Hello to cozy, two-story 2,000-square foot houses — affordable and energy efficient.
3. High-tech marijuana grow rooms – legal in California for anyone with a doctor’s recommendation for medicinal marijuana — will be offered as options in some new homes.
4. Cruise industry finds new niche market – assisted living facilities. Seniors will call a cruise cabin “home” with meals, specialty physicians and therapists.
5. Planting of grasses, mosses, vegetables and herbs on the roofs of homes to save on energy costs and reduce your carbon footprint.
6. In a state where 86% of adults do not smoke, expect smoking bans to extend to condo, townhome and even single-family home communities.
7. Solar panels will be offered by most homebuilders, including opaque solar glass that can generate enough electricity through your window.
8. Rather than renting, single women who expect to remain that way — whether by choice or default — will buy large houses together with a shared kitchen.
9. Backyard windmills – so Dutch! Residential wind generator will supplement your utility service.
10. Your home theater might be your only theater. Look for more people to stay home and make their own (better) popcorn.
Five major lenders made announcements last week that they would be suspending certain foreclosure activities in various states. These lenders included Ally (GMAC), JPMorgan Chase, Bank of America, Litton and PNC.
While this report is primarily focused on September foreclosure activity, it is important to note that we have yet to see any impact to foreclosure sales within our coverage area through Friday, October 8, 2010 by these lenders.
“We regularly see lenders make minor mistakes in foreclosure filings” says Sean O’Toole, CEO and Founder of ForeclosureRadar.com. “But the reality is that far more homeowners are behind on their mortgage payments than are even in foreclosure. The clear problem in the housing market today is not foreclosures, but negative equity; and as long as the focus remains on the symptom rather than the disease we will see little progress towards real solutions and this crisis will drag on for years to come.”
I’m imagining that the cheapest unit will have to be an apartment-style, 2br/2ba and about 850sf in the back of the complex where you’ll get trucks rumbling below, and the trains behind you? For around the mid-$300,000s?
I think there will be takers at that price point, as long as the fees are under $400/mo.
But shouldn’t that be it?
If they are reasonable on pricing, they could sell out quick, with the lack of inventory in downtown Encinitas. They’d be better off, because they’ll need to close more than 50% of them concurrently to qualify for Fannie/Freddie financing – if they learn the lesson from the builders of Vantage Point:
