Wednesday, December 15, 2010
The "Foreclosure from Hell"
There is a woman in Florida who has been living in her house without making a mortgage payment for almost as long as I have been alive. Her name is Patsy Campbell. She lives in Okeechobee, and the last time she paid her mortgage was October of 1985! Read more HERE.
Friday, December 10, 2010
Fewer Foreclosures on the Horizon
One of the first bits of good news we've had in a while! Read this article.
Friday, November 26, 2010
Decrease in Nationwide Mobility Is Affecting Underwater Homeowners
The following article by RisMedia echoes a recent Time Magazine article about how homeownership decreases mobility.
An enlightening read: http://bit.ly/euqZiz
An enlightening read: http://bit.ly/euqZiz
Saturday, November 13, 2010
Robo-Signing Not Sufficient to Stop Foreclosure in FL
According to HousingWire.com:
"A Florida appeals court this week affirmed a bank’s right to foreclose even if alleged robo-signing occurred.
The ruling is good news for mortgage servicers — setting out that lack of knowledge of information in foreclosure documents isn’t sufficient reason to set aside the foreclosure. However, a trial court’s broad discretion in vacating judgments doesn’t mean that other trial judges will see these cases the same way.
In Freemon v. Deutsche Bank, Florida's Fourth District Court of Appeal ruled that an allegedly faulty affidavit didn’t constitute fraud in the case. “Freemon’s motion does not demonstrate fraud or show why any of the alleged facts would entitle her to relief sufficient to set aside a default judgment,” the court ruled this week. “Freemon nowhere contends that she did not default on her mortgage, nor does she allege that the amounts due and owing, set forth in the affidavit and incorporated in the final judgment, are incorrect.”
In November 2007, Deutsche Bank filed to foreclosure against the homeowner, Veldrin Freemon, alleging she owed more than $570,000 on the mortgage note. Freemon didn’t answer the foreclosure complaint and a default judgment was entered. She later contested the case and it was delayed for six months.
A foreclosure sale was reset for September 2009, and the property was sold back to the bank. When the bank sought to repossess the home after the sale, however, Freemon filed for relief from the judgment, alleging that an affidavit in the case was fraudulent.
The allegation of fraud was based on a deposition in another foreclosure case from a Litton Loan employee who was signing foreclosure affidavits without personal knowledge of their contents.
The court ruled that the deposition was insufficient to prove fraud and disagreed with Freemon’s characterization of the Litton Loan affidavit from Denise Bailey.
Freemon claimed that Bailey claimed personal knowledge of the matters in the affidavit yet she did not know who inputted information into the computer regarding the loan in question. “Mere lack of personal knowledge regarding the facts and figures in an affidavit will not justify vacating a judgment that has already been entered,” said the Ben-Ezra & Katz law firm, in an analysis of the court’s ruling.
Bailey attested that she had personal knowledge of the amounts and charges due, the court said in its opinion. “In her deposition in another case, she testified that she was the records custodian for Litton Loan," the court said in the ruling. "In signing the affidavits of indebtedness, she acquires her knowledge of the amounts due by inputting the mortgagor’s name into the computer, which contains all of the mortgage information."
"Bailey’s affidavit in this case is not inconsistent with her testimony in the other case. Freemon has not shown any fraud, nor has she shown that the information about this loan, i.e., the amounts due and the default, are in any way incorrect.”
In its analysis of the ruling, Ben-Ezra & Katz said the appeals court also pointed to the trial court's broad discretion in such cases.
“That means that whether a trial court decides to vacate or not vacate a judgment, its decision will stand on appeal unless the trial court abused its discretion,” the law firm wrote. “This opinion is not an instruction to trial court judges that they should deny similar motions to vacate in all cases. Rather, it is a green light for them to vacate or not vacate based on their sound exercise of judicial discretion applied to the facts of each case.”"
"A Florida appeals court this week affirmed a bank’s right to foreclose even if alleged robo-signing occurred.
The ruling is good news for mortgage servicers — setting out that lack of knowledge of information in foreclosure documents isn’t sufficient reason to set aside the foreclosure. However, a trial court’s broad discretion in vacating judgments doesn’t mean that other trial judges will see these cases the same way.
In Freemon v. Deutsche Bank, Florida's Fourth District Court of Appeal ruled that an allegedly faulty affidavit didn’t constitute fraud in the case. “Freemon’s motion does not demonstrate fraud or show why any of the alleged facts would entitle her to relief sufficient to set aside a default judgment,” the court ruled this week. “Freemon nowhere contends that she did not default on her mortgage, nor does she allege that the amounts due and owing, set forth in the affidavit and incorporated in the final judgment, are incorrect.”
In November 2007, Deutsche Bank filed to foreclosure against the homeowner, Veldrin Freemon, alleging she owed more than $570,000 on the mortgage note. Freemon didn’t answer the foreclosure complaint and a default judgment was entered. She later contested the case and it was delayed for six months.
A foreclosure sale was reset for September 2009, and the property was sold back to the bank. When the bank sought to repossess the home after the sale, however, Freemon filed for relief from the judgment, alleging that an affidavit in the case was fraudulent.
The allegation of fraud was based on a deposition in another foreclosure case from a Litton Loan employee who was signing foreclosure affidavits without personal knowledge of their contents.
The court ruled that the deposition was insufficient to prove fraud and disagreed with Freemon’s characterization of the Litton Loan affidavit from Denise Bailey.
Freemon claimed that Bailey claimed personal knowledge of the matters in the affidavit yet she did not know who inputted information into the computer regarding the loan in question. “Mere lack of personal knowledge regarding the facts and figures in an affidavit will not justify vacating a judgment that has already been entered,” said the Ben-Ezra & Katz law firm, in an analysis of the court’s ruling.
Bailey attested that she had personal knowledge of the amounts and charges due, the court said in its opinion. “In her deposition in another case, she testified that she was the records custodian for Litton Loan," the court said in the ruling. "In signing the affidavits of indebtedness, she acquires her knowledge of the amounts due by inputting the mortgagor’s name into the computer, which contains all of the mortgage information."
"Bailey’s affidavit in this case is not inconsistent with her testimony in the other case. Freemon has not shown any fraud, nor has she shown that the information about this loan, i.e., the amounts due and the default, are in any way incorrect.”
In its analysis of the ruling, Ben-Ezra & Katz said the appeals court also pointed to the trial court's broad discretion in such cases.
“That means that whether a trial court decides to vacate or not vacate a judgment, its decision will stand on appeal unless the trial court abused its discretion,” the law firm wrote. “This opinion is not an instruction to trial court judges that they should deny similar motions to vacate in all cases. Rather, it is a green light for them to vacate or not vacate based on their sound exercise of judicial discretion applied to the facts of each case.”"
Wednesday, November 10, 2010
More Foreclosures Coming...
If you thought... or hoped... or dreamed... or begged that the foreclosure crisis would be over soon, that appears to have just been wishful thinking.
According to the Federal Reserve Bank of New York, 2.7% of current mortgage balances transitioned into delinquency during the third quarter of this year.That’s up from 2.6% that became newly delinquent in the second quarter. The rise follows a full year of declines in delinquencies.
DSNews reports that "according to the New York Fed’s report, about 457,000 individuals received home foreclosure notices on their credit reports between July 1 and September 30, 2010. Officials say this represents a 5.5% decrease from the second quarter and a 6.4% drop from a year earlier." However, unless modification efforts become more successful, those figures will likely rise given the new wave of delinquencies.
All in all, we still have a long way to go until we are out of the foreclosure mess and see real estate return to normal (home values increasing by about 1-2% more than inflation). Joe Manausa thinks that we have another five years to go before values return to the levels we saw this summer. I'm inclined to agree (or maybe even be more pessimistic). What do you think?
According to the Federal Reserve Bank of New York, 2.7% of current mortgage balances transitioned into delinquency during the third quarter of this year.That’s up from 2.6% that became newly delinquent in the second quarter. The rise follows a full year of declines in delinquencies.
DSNews reports that "according to the New York Fed’s report, about 457,000 individuals received home foreclosure notices on their credit reports between July 1 and September 30, 2010. Officials say this represents a 5.5% decrease from the second quarter and a 6.4% drop from a year earlier." However, unless modification efforts become more successful, those figures will likely rise given the new wave of delinquencies.
All in all, we still have a long way to go until we are out of the foreclosure mess and see real estate return to normal (home values increasing by about 1-2% more than inflation). Joe Manausa thinks that we have another five years to go before values return to the levels we saw this summer. I'm inclined to agree (or maybe even be more pessimistic). What do you think?
Monday, November 8, 2010
Is Your RMBS Fungible?
Say what?! OK, let's give some quick definitions:
RMBS - Residential Mortgage Backed Security(ies)
Fungible - (esp. of goods) being of such nature or kind as to be freely exchangeable or replaceable, in whole or in part, for another of like nature or kind.
I asked this question because of its uniqueness. Before today, you probably didn't know what fungible meant (don't worry, neither did I). But in reading a very interesting article on the topic on HousingWire, I was compelled to share my findings with you all.
I would strongly encourage you to read the article, but in brief, it says that investors did not properly discern the difference in risk between different mortgage backed securities, and thus are now reaping greater losses than they otherwise would (or should) have had they demanded an appropriate return for the risk they consumed.
If you are not familiar with the securitization of assets in general, the basic principal is that assets are bundled together in a pool. The pool is then divided into different "tranches". Each tranch has a level of risk associated with it. There are senior and junior tranches. Junior tranches, as the name implies, are subordinate to senior tranches and are the first to bear losses. The junior tranches also contain the most risky part of the pool of assets. Ordinarily, investors would require higher yields for purchasing the riskier tranches.
The point of the HousingWire article is that investors failed to do so. One expert put it this way, "Good investors were priced out of the market by the quest for yield when the curve started to flatten and the galloping demand emerged from CDOs. CDOs just waved the loans in, thanks to the rating agencies' idea of limited correlation via geographic distribution. And foreign investors did not bother to become experts in the 50-state patchwork that is U.S. real estate law and bankruptcy code. Because everyone else was inhaling this shit.”
Crass, but accurate. Remember, you get what you pay for, and if you aren't adequately compensated for the risk you bear, then you may just end up holding a big pile of... well, you know.
RMBS - Residential Mortgage Backed Security(ies)
Fungible - (esp. of goods) being of such nature or kind as to be freely exchangeable or replaceable, in whole or in part, for another of like nature or kind.
I asked this question because of its uniqueness. Before today, you probably didn't know what fungible meant (don't worry, neither did I). But in reading a very interesting article on the topic on HousingWire, I was compelled to share my findings with you all.
I would strongly encourage you to read the article, but in brief, it says that investors did not properly discern the difference in risk between different mortgage backed securities, and thus are now reaping greater losses than they otherwise would (or should) have had they demanded an appropriate return for the risk they consumed.
If you are not familiar with the securitization of assets in general, the basic principal is that assets are bundled together in a pool. The pool is then divided into different "tranches". Each tranch has a level of risk associated with it. There are senior and junior tranches. Junior tranches, as the name implies, are subordinate to senior tranches and are the first to bear losses. The junior tranches also contain the most risky part of the pool of assets. Ordinarily, investors would require higher yields for purchasing the riskier tranches.
The point of the HousingWire article is that investors failed to do so. One expert put it this way, "Good investors were priced out of the market by the quest for yield when the curve started to flatten and the galloping demand emerged from CDOs. CDOs just waved the loans in, thanks to the rating agencies' idea of limited correlation via geographic distribution. And foreign investors did not bother to become experts in the 50-state patchwork that is U.S. real estate law and bankruptcy code. Because everyone else was inhaling this shit.”
Crass, but accurate. Remember, you get what you pay for, and if you aren't adequately compensated for the risk you bear, then you may just end up holding a big pile of... well, you know.
Monday, November 1, 2010
Nearly 1 in 3 Foreclosures may be Strategic
Marcella S. Kreiter of United Press International posted the following story:
"The financial crisis and ensuing recession apparently changed the mindset of Americans toward their homes, turning what long has been the American Dream into just another financial investment. The result, strategic defaults – people walking away from the property and mortgages not because they have to, but because they can.
The key consideration is time, said Jon Maddux, of YouWalkAway.com, which helps people turn their properties back to their banks. Some experts estimate nearly a third of all mortgage defaults – 31 percent – are of the strategic variety.
RealtyTrac reported 2 million foreclosures in September and said one in 371 housing units received a foreclosure notice. Foreclosures are running 65 percent higher than last year in the third quarter.
“People who made the decision to buy at the wrong time got stuck in a house that may not recover (its value) for 10 to 15 years. Does it make sense to keep it as an asset? No. It’s throwing good money after bad when it takes so long to break even. So they decide to stop now. Their credit will recover in three or four years,” Maddux told UPI.
As the housing bubble burst, real estate values plummeted and homeowners found themselves “underwater” – owing more than their homes were worth.
Banks made the situation worse, giving people who wanted to refinance a hard time, even refusing to do anything for them at all – sometimes because the homeowners were still making payments.
The federal government has to take some of the blame. As Washington pushed banks to make homeownership easier, bankers heard “open the floodgates,” Maddux said. Banks started offering no-money- or little-money-down mortgages to people who wouldn’t be able to sustain the payments for the long-term, then bundled the mortgages into security instruments and sold them off."
The greed of these banks followed by their bailouts and subsequently their insane profits over the last year have made walking away all that much easier. But if the market is going to recover, Americans need to own up to their bad decisions and stay in their homes -- even if it's painful. (Keep in mind, I owe about $30,000 more than my townhouse is worth... and I'm still paying).
"The financial crisis and ensuing recession apparently changed the mindset of Americans toward their homes, turning what long has been the American Dream into just another financial investment. The result, strategic defaults – people walking away from the property and mortgages not because they have to, but because they can.
The key consideration is time, said Jon Maddux, of YouWalkAway.com, which helps people turn their properties back to their banks. Some experts estimate nearly a third of all mortgage defaults – 31 percent – are of the strategic variety.
RealtyTrac reported 2 million foreclosures in September and said one in 371 housing units received a foreclosure notice. Foreclosures are running 65 percent higher than last year in the third quarter.
“People who made the decision to buy at the wrong time got stuck in a house that may not recover (its value) for 10 to 15 years. Does it make sense to keep it as an asset? No. It’s throwing good money after bad when it takes so long to break even. So they decide to stop now. Their credit will recover in three or four years,” Maddux told UPI.
As the housing bubble burst, real estate values plummeted and homeowners found themselves “underwater” – owing more than their homes were worth.
Banks made the situation worse, giving people who wanted to refinance a hard time, even refusing to do anything for them at all – sometimes because the homeowners were still making payments.
The federal government has to take some of the blame. As Washington pushed banks to make homeownership easier, bankers heard “open the floodgates,” Maddux said. Banks started offering no-money- or little-money-down mortgages to people who wouldn’t be able to sustain the payments for the long-term, then bundled the mortgages into security instruments and sold them off."
The greed of these banks followed by their bailouts and subsequently their insane profits over the last year have made walking away all that much easier. But if the market is going to recover, Americans need to own up to their bad decisions and stay in their homes -- even if it's painful. (Keep in mind, I owe about $30,000 more than my townhouse is worth... and I'm still paying).
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