Judge Signs $25 Billion Foreclosure Settlement

It’s finally official. The so-called $25 billion foreclosure settlement has been signed off by a federal judge.

This comes after the settlement was filed in court last month. DC District Judge Rosemary Collyer did the honors Wednesday.

I won’t rehash my thoughts about 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 into securitized trusts.

THAT is where the banks will hopefully get what’s really coming to them.

Mortgage settlement oversight begins in North Carolina

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. “

Let’s hope!

“Dramatic” 65 percent increase in Palm Beach County foreclosures

Just as I predicted! Last month I told the Palm Beach Post that banks had been given the green light to prosecute new foreclosure cases, and lo and behold, that is exactly what has happened.

The Post now reports that Palm Beach County saw a 65.4 percent increase in new foreclosure filings last month, compared to March of 2011.

Palm Beach Clerk and Comptroller Sharon Bock called the jump “dramatic”. I call it completely expected. The settlement has given banks a road map on how to proceed.

But as I have already said, with the Clerk’s Office about to have their budget significantly reduced, you will see another logjam in the court system.

Without the necessary support staff, it will be nearly impossible for the courts to keep up with the banks.

Fed lays out rules for banks to rent REOs

Another idea I’ve long advocated is beginning to see the light of day.

The Federal Reserve has laid out the groundwork on how banks can rent out foreclosed homes. There is nothing to be gained by allowing homes to remain empty, so this is an absolutely necessary step if the housing market is going to recover.

Of course there are many landlord/tenant, state and federal housing regulations that will need to be followed, and we can’t trust the banks to be good landlords on their own.

In their report the Federal Reserve says that banks “should use a framework that appropriately records the organizations’ rental decisions and transactions as they take place”

Let’s just hope that those records are better than the ones the banks kept during the robosigning era.

HA!!

Have a great Passover and Easter Holiday!

Many people may be hesitant to believe that business is booming, but there is a particular profession that is; namely, Property Preservationists for distressed properties.

As reported in the August 13^th Sun-Sentinel, foreclosures have tripled across the nation since 2005. More and more of these properties are becoming REOs, or “real estate owned,” meaning the bank holds the deed. Before hitting the market, these foreclosed properties need a visit from a Property Preservationist for a “deep cleaning.” “Property Preservationists” swoop in to handle various tasks such as removing trash, mowing the lawn, boarding up windows, even asking squatters to find a new place of residence. One such Preservationist “deep cleans” between 10 and 20 REOs in a typical week, in addition to inspecting 90 structures and securing 20 others.

“Nobody likes to see me. But when a house’s teeth go bad, who else is going to clean out the rot,” states Nick Hazel, one such Preservationist. In 2009, 1 in every 33 homes in Florida is at risk for a visit by Hazel as 3 out of 100 homes are in foreclosure. Nationally, 1 in 84 is at risk.

As I was in court the other day, I couldn’t help but laugh as condo associations are now turning the tables on the banks. You see the banks are not exactly the best kind of homeowner. They don’t like to clean their pools, maintain their property… or pay their HOA dues. The judge even commented on the irony and the trend as expressed in a related article in the WSJ last week.

In fact, the Associations have had enough and are now foreclosing out the bank’s interest by suing the banks for back assessments as well as for new assessments that the banks have incurred since the bank became the owner of the property. Interestingly, the banks thought they were so eager to own the property and now have all the “joys” of ownership.

It reminds me of the proverbial proverb to “always watch out for what you wish for.” Here the banks wanted the property… well now they got it.

If you are on the board of a condo or homeowner’s association and would like our firm to evaluate the possibility of suing the real estate owned by the banks (REO) for failure to pay their association obligations please feel free to contact us.