I said after the foreclosure settlement was announced that banks had been given the green light to rev up their foreclosures engines, and in South Florida at least, I’m being proven right.
RealtyTrac’s numbers from last month show dramatic year-over-year increases in both new foreclosure filings (85%) and repossessions (39%) in Palm Beach, Broward, and Miami-Dade counties, compared to March 2011.
In Florida overall, new foreclosure cases were up 58 percent. Nationally however, new filings dropped 12 percent from last year, however they rose 7 percent from February.
Since the sunshine state has one of the largest foreclosure backlogs in the country, it really shouldn’t surprise you that the numbers skew so heavily against Florida.
The settlement has emboldened banks to become more aggressive in seeking to foreclosure, and the numbers certainly back that up.
More back and forth this week from Edward DeMarco, who despite announcing that principal reduction could save Fannie Mae and Freddie Mac 1.7 billion dollars, seems unwilling to venture far from his previous stance on loan modifications.
He said in a speech this week that a new analysis does show writing down the value of some underwater mortgages does have the potential to lower foreclosure rate and save both GSEs substantial money, but he’s still downplaying the significance of principal reduction.
While he has eased up on his previous refusals to even entertain the idea of modifications, he still seems fixated on the risk of strategic default, which he feels could wipeout any potential savings. (more…)
Could Fannie Mae and Freddie Mac finally be willing to sign off on principal reduction as a way to keep homeowners out of foreclosure and in their homes?
Edward DeMarco, the acting head of theFederal Housing Finance Agency and de facto leader of the two GSEs has been steadfast in his opposition.
President Obama has made principal reduction priority one. It was one of the highlights of the mortgage settlement and many economists point to it as the way out of this housing mess.
But DeMarco still hasn’t budged, because he says principal reduction will cost the taxpayer money and isn’t good for Fannie and Freddie’s bottom line.
Except maybe it is.
According to NPR and ProPublica,executives at both Fannie Mae and Freddie Machave concluded that principal reduction would prevent larger losses and in fact, save the two companies money.
Their report claims that in part because of new Obama incentives, which would reimburse lenders half of what they write off, that Fannie and Freddie would benefit from principal reduction
Look I’m not saying that principal reduction comes without risk. Could everyone decide to stop paying their mortgages in order to get a write-down? Sure.
But just because you might get hit by a car doesn’t mean you don’t cross the street. The housing market will NEVER rebound if people keep getting kicked to the curb.
And I don’t care what Edward DeMarco has said, the bottom line shouldn’t be his bottom line. It shouldn’t be about what is cost effective, it should be about what keeps borrowers in their homes. Last time I checked, they are taxpayers too. (more…)
Just like Old Yeller, Freddie Mac and Fannie Mae need to be put down
There were two players conspicuously absent when last week’s $25 Billion settlement was unveiled; two players that absolutely should have been front and center.
What are their names? If you’ve followed the housing crisis as closely as we have, then you probably know.
There are millions upon millions of homeowners with mortgages controlled by Fannie Mae and Freddie Mac, yet they aren’t getting a single penny.
We’ve been advocating principal reduction as one of the best ways to help beleaguered borrowers, and we’re not alone in that assessment. That’s why it was at the center of the settlement.
Yet Edward DeMarco, the man behind both companies, still clings to the outdated notion that principal reduction would lead to a moral contagion among homeowners otherwise known as a “moral hazard”.
He’s forbidden Fannie and Freddie to even entertain the idea.
While President Obama and others, such as Massachusetts AG Martha Coakley have turned up the heat on DeMarco, he hasn’t budged.
DeMarco is more concerned about his political ideology than helping the American homeowners, who are in essence, is his clients.
He’s like that annoying relative that no one invited, yet keeps showing up every Thanksgiving. But DeMarco is far from the only problem.
When you have Freddie Mac trying to profit from securities that paid more if homeowners couldn’t refinance, that is proof that we are just too far down the rabbit hole. (more…)
Now that the holidays are behind us and we’re well into the new year, news that will impact the foreclosure market in 2012 is starting to cross our desk. So what headlines were we talking about this week?
This week we blogged about the Federal Reserve finally coming around and looking out for the homeowners, instead of the banks. A 26-page white paper released by The Fed offered up their suggestions on how to fix the broken housing market. They also finally came to the conclusion that government MUST come down harder on lenders. Some of the ideas offered up by The Fed may be tough for Congress to swallow, but we believe they have a good chance of keeping more people in their homes.
We particularly liked the idea of turning more foreclosed and vacant properties into rental homes (so much better for the neighborhoods) and the need to offer principal reduction to more homeowners. Roy Oppenheim expands on this issue in his latest “From The Trenches” video.
Foreclosures were in steep decline across the country in 2011, including a 67 percent drop here in Broward County, according to RealtyTrac. Thanks to the ‘robo-signer’ scandal, lenders were suddenly much more careful about bringing foreclosure cases to the courts. While that is likely to continue in 2012, Roy Oppenheim told the Sun-Sentinel that things could start to pick up.
“It’s going to pick up, but it’s not going to be insane like it was,” he explained.
Palm Beach County also saw a significant drop last year, 58 percent, while Florida was down 63 percent, RealtyTrac reported. (more…)
The Oppenheim Law editorial team found this ironic: A drug dealer has more constitutional rights to protection from the government in his home than your average homeowner in foreclosure.
In a case being appealed to the United States Supreme Court, the Florida Supreme Court recently held that because the “home” has a long standing history of receiving additional constitutional protect
Interestingly enough, the U.S. government, through Freddie Mac and Fannie Mae, is the single largest investor of residential mortgages. So what this really means is that the government can steal your house through bad loan paperwork and fraudulent foreclosure practices, but the local drug dealer is safe from a sniff by Franky the Drug Sniffing Dog.ions, using a drug sniffing dog outside the front door of a drug dealer’s house constituted an illegal search and seizure under the Fourth Amendment. Yet this same court has allowed banks and investors to use the lower courts in Florida as their own private collection agency.
This is yet one more example of the absurd turn that this country has taken during the real estate crash and subsequent foreclosure crisis, putting the government into the position of protecting the sanctity of a home owned by a drug dealer violating criminal laws, while stripping the same protections from one who is just down on his financial luck, in part due to the banks themselves.
The English belief that “every man’s house is his castle” formed the basis of the Fourth Amendment, and yet now has been convoluted to only protect criminals from prosecution, while leaving homeowners in foreclosure high and dry against a system that steamrolls their constitutional rights in the interest of protecting big banks, Wall Street, and now Uncle Sam. (more…)
The Florida Foreclosure Defense Headlines via Oppenheim Law
Notary behind robo-signing scandal found dead
A whistle-blower who brought a massive case to light was found dead inside her Nevada home.
Officers found the body of Tracy Lawrence, 43, after she failed to show up for a 8:30 a.m. court appearance, Las Vegas station KSNV reported. She was supposed to be sentenced for her role in the fraud case, but she never arrived and her lawyer said he was concerned for her well-being, so the judge dispatched officers to her home.
Detectives have ruled out homicide, KNSV reported, but it’s not known if Lawrence died of natural causes or if she took her own life.
The week before, she pled guilty one criminal charge of notary fraud, after she admitted that she had notarized around 25,000 fraudulent documents as part of a foreclosure fraud scheme.
Prosecutors allege title officers Gary Trafford and Geraldine Sheppard of California are behind the scheme that involved Lawrence, both were indicted on more than 600 charges in a 439-page indictment filed on November 16. Both are still at-large.
Homeowners join OWS movement
Last week 60 Minutes shined a harsh light on the homeless problem in Florida, that one third of the homeless families in America are from the Sunshine State. And two-thirds of homeless families are living on the streets. For them ‘Occupy Wall Street’ has literally become ‘Occupy The Street’.
If there is any positive to be had from this difficult news, it’s that the social stigma attached to losing your home is now gone, Oppenheim Law reports. For some underwater homeowners, foreclosure has become a form of protest, not unlike the OWS movement. But some are walking away willingly and protesting from their living rooms, while others are forced into their cars. (more…)
Taking a cue from Oppenheim Law, the Obama Administration is mulling over plans to reduce the number of foreclosed homes on the market by renting them out, according to the Wall Street Journal.
As the large inventory of distressed homes on the market continues to push a reduction in home prices as well as an increase in rental prices, the government is thinking about renting the homes owned by Fannie and Freddie.
The proposal has two benefits:
Reducing the amount of distressed homes for sale
Clearing the surplus of homes currently unoccupied.
These benefits would be the keys to a successful housing market recovery. Increasing the amount of rental properties available can also stabilize rent prices, which have been going up as foreclosed families wait before buying another home.
While the benefits of the proposal are obvious, it is still just a proposal. It’s too bad the Administration did not listen to Oppenheim Law back in 2009 when we advocated using the inventory of foreclosed homes to benefit communities, instead of just letting them sit unoccupied and cause suburban blight.
The Government could easily enact the proposal by ordering Fannie and Freddie to sell their foreclosed homes to investors who promise to rent them out. The investors could then hire management companies to look after the houses. If the Administration decides to follow through with the plan, the Government might actually make money on the deal and help the housing recovery at precisely the right time for it: before the next wave of foreclosures hit. That way, the market can be more resilient when the next hit comes and absorb more losses.
Foreclosures, repos up from last year in South Florida
