Maybe you weren’t convinced the first time I told you the era of the short sale was finally upon us.
I can’t blame you for thinking that banks were acting irrationally when it comes to the foreclosure process.
But Lender Processing Services just offered up the most convincing numbers to date that short sales are no longer just some pie-in-the-sky dream for distressed underwater borrowers.
In January short sales made up 23.9 percent of home sales, while foreclosure sales made up 19.7 percent of all home purchases.
Of course that means that over half of all real estate closings are for distressed homes.
A year before, the percentages were skewered in the opposite direction. In January 2011, 16.3 percent of home purchases came through short sales, and 24.9 percent were foreclosures.
Why are the banks now convinced, as I was long ago, that going through the long and harrowing process of a foreclosure is not their best option?
The proof is once again in the numbers. On average, foreclosed homes sold for 29 percent less than non-distressed properties in January.
Homes sold via short sale? They went for 23 percent less. Here in Florida, LPS says short sales have outnumbered foreclosures since July.
That means short sales are a better deal for the banks, plain and simple.
The truth is banks don’t want to own these properties, they certainly can’t handle maintaining these homes, and they just end up laying waste to neighborhoods by hanging on to them. (more…)
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…)
This comes after the settlement was filed in court last month. DC District Judge Rosemary Collyer did the honors Wednesday.
I won’trehash my thoughtsabout what’s good and what’s bad about this settlement. Everything that needs to be said about it has been said.
You and I know that the banks will get more of a pass than they are entitled to for all of their robosigning shenanigans. In reality they are really only paying out about $5 billion in actual money, and I’ve still haven’t seen a single banking officer jailed.
Just remember this fight ain’t over yet!. This settlement was a necessary step, in order for the feds to move on to their investigation intosecuritized trusts.
THAT is where the banks will hopefully get what’s really coming to them.
Now that the settlement is official, the new government agency that will be watching the banks is now open for business.
North Carolina Banking Commissioner Joseph Smith is going to oversee the office and how the banks will receive “credits” towards the settlement for providing homeowners mortgage relief.
Relief, unfortunately, will often come in the form of transactions, such as short sales, that the banks were already doing before the settlement was announced.
“By itself, this settlement will not remedy every problem that system faces. But trust in our mortgage system can move forward if we use this opportunity to show fairness, transparency and accountability,” Smith said. “ (more…)
How else can you explain your half-hearted apology over JP Morgan’spart in the robosigning scandal?
The CEO of JP Morgan Chase made some efforts towards reconciliation in his annual letter to shareholders, which is now out for all to see.
But it’s clear that Jamie Dimon is still delusional and suffers a full blown case of pass-the-buck disease, for which, apparently, there is no cure.
In the section titled “The Mortgage Business — The Good, The Bad and The Ugly”(He should have just left out the first two) Dimon admits to JP Morgan Chase’s shareholders that his companies ‘servicing operations left a lot to be desired’
He adds his company ‘made too many mistakes’ and that the it was ‘not our finest hour’.
What’s sarcasm!
Let’s be honest, it was your worst hour and your lasting legacy.
Here’s the problem Mr. Dimon. You didn’t just make a mistake. If I forget to buy milk on the way home, that’s a mistake. Your company, your officers and your top executives all suborned fraud forgery and perjury, all federal crimes.
Robosigning was more that just, as you put it, ‘paperwork errors’.
Everyone from the tippy-top of your company on down, encouraged this kind of illegal activity to happen, in fact it became part of the operating procedures of your company! You just farmed it out.
Why not just own up to the homeowners, the taxpayers and your shareholders. You’ve been caught with your hand in the cookie jar, I can still see the bruise. (more…)
That’s because the Mortgage Debt Relief Act, which was passed in 2007, is set to expire at the end of this year. If that happens you’ll have to pay taxes on any forgiven debt that comes out of a short sale.
I remain skeptical that Congress, in this election year, will come through and extend the MDRA, but at least some Congressmen haven’t forgotten how important this legislation is. Then again, in an election year anything is possible.
U.S. Reps. Jim McDermott, D-Wash., Shelley Berkley, D-Nev., and John Larson, D-Conn., have introduced the Homeowners Tax Fairness Act. It would extend the Mortgage Debt Relief Act for another three years.
Let’s hope Congress gets their act together and passes this bill.
It remains to be seen if a foreclosure dismissal will have an impact here in Florida, but none the less it has the chance to be a real game changer.
The case is OneWest Bank, FSC vs Galli. OneWest had tried for a partial summary judgement against the Gallis, but the judge in the case denied it and instead ruled in favor of Mr. and Mrs. Galli.
As I’ve always said, you have to make the banks prove they own the note, but in reality it’s more than that. I could pick up a note off the street and say I owned it, but it wouldn’t necessarily be true. (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…)
Banking officials, as a general rule, are old school. They are very resistant to change, and usually refuse to think outside of the box.
Over the years I’ve seen the banks hold little to no regard for the customers they serve. Their philosophy has essentially been ‘You can’t pay your mortgage, then out on your butt you go!’
Forget that they’ve screwed people, or caused the worst recession in 80 years.
Forget that homeowners often have good reasons for not being able to pay. Banks have had very little heart and even less common sense.
So I was blown away by Bank of America’s new test program, called “Mortgage to Lease”, which was unveiled this week. In a few select markets, BofA will give about 1,000 customers facing foreclosure the chance to stay in their homes by turning them into renters.
Bank of America will offer these borrowers the opportunity to have their mortgage debts forgiven, and instead of kicking them to the curb, BofA will lease these homes back to the borrower for up to 3 years for less than the market rental rate.
No more mortgage, no more property taxes or homeowners insurance! And people can stay in their homes! Imagine that!
Turning foreclosure properties into rentals is an idea I’ve long advocated. It only took Bank of America a few years to listen to me!
I was wondering why now, what finally turned Bank of America over to my way of thinking?
I could tell you that Bank of America’s small heart grew three sizes like the Grinch’s, but we all know that’s not true. (more…)
Maybe you weren’t convinced the first time I told you the era of the short sale was finally upon us.
