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).
Friday, October 29, 2010
State Mandated Mortgage Mods?
According to the Center for Responsible Lending, there have been approximately 2.5 million foreclosures since the housing bust began. They estimate that another 5.7 million homeowners are at imminent risk of foreclosure. What's more, roughly 60% of borrowers who are seriously delinquent (90 days or more) are not involved in any sort of loss mitigation with their servicer.
With those overwhelming statistics in mind, the Center is advocating that State legislatures across the Country mandate loss mitigation standards for all servicers prior to foreclosure.
To be fair, the CRL is not saying that state governments should deny lenders the right to foreclosure. Rather, they are saying that lenders must consider the loan modification option seriously and document that they have done so. In conjunction with some provision for short sales, this could be a good option for the market.
To read more, click HERE.
With those overwhelming statistics in mind, the Center is advocating that State legislatures across the Country mandate loss mitigation standards for all servicers prior to foreclosure.
To be fair, the CRL is not saying that state governments should deny lenders the right to foreclosure. Rather, they are saying that lenders must consider the loan modification option seriously and document that they have done so. In conjunction with some provision for short sales, this could be a good option for the market.
To read more, click HERE.
Thursday, October 28, 2010
Wells Fargo Owns up to Errors
In an statement late yesterday, Wells Fargo announced that it will be filing amended foreclosure affidavits on approximately 55,000 properties in the 23 judicial foreclosure states.
Mike Heid, co-president of Wells Fargo Home Mortgage said, “In September 2010, borrowers who have completed foreclosure were on average 16 months delinquent on their payments. When all options have been exhausted, we believe foreclosures should not be delayed.”
Read more HERE.
Mike Heid, co-president of Wells Fargo Home Mortgage said, “In September 2010, borrowers who have completed foreclosure were on average 16 months delinquent on their payments. When all options have been exhausted, we believe foreclosures should not be delayed.”
Read more HERE.
Monday, October 25, 2010
The Folly of Banks
Bank Bailouts. You've heard about them. You're angry over them. And most of your voting next week is probably going to be heavily influenced by them.
In case you were wondering, the price tag for all those bailouts was $204,808,576,320. Just to clarify, that is over $204 BILLION dollars. Not used to seeing that many numbers stacked together? Me either. Pretty startling, huh? And if you're curious to see who received our money and how much, click HERE.
CitiGroup and Wells Fargo remain the biggest beneficiaries of the bailout with each receiving $25 billion which they have not yet paid back. Citi has parlayed that bailout into profits of $4.43 billion (Q1), $2.7 billion (Q2), and $2.15 billion (Q3).
Almost as egregious as the money sent to bailout banks has been the amount of funds drawn from the Treasury by mortgage giants Fannie Mae and Freddie Mac. That sum stands at $148 billion and could more than double in the next three years, according to the Federal Housing Finance Agency (FHFA).
Those are the facts. On their own they are probably enough to convince you of the accuracy of this blog title. But there is more. Every day, banks lose tens of thousands of dollars on each property they foreclose on if they refuse to negotiate a short sale. And they often refuse to negotiate short sales.
NOTE: According to CDPE.com, 7 out of 10 homeowners facing foreclosure never speak to a real estate professional, so it is not all the banks' fault. If you or someone you know has started to miss mortgage payments, please call me (850-251-6643).
So back to the folly of banks... Here is a case in point. I recently listed and sold a foreclosure at 3008 Huntington Woods Blvd. It was a quaint, if outdated, 1398 sq ft home with 3 bedrooms, 2 baths, and a 2 car garage. Before it went into foreclosure, the house went under contract as a short sale at $135,000. Nonetheless, the lender refused to consummate the short sale and proceeded with foreclosure anyway. Four months later, I sold the house for....
$115,000. Yup, that's right, $20,000 less than their contract price from just four months earlier. It happens every day and for those banks that took taxpayer money, it costs us. That, my friends, is the folly of banks.
In case you were wondering, the price tag for all those bailouts was $204,808,576,320. Just to clarify, that is over $204 BILLION dollars. Not used to seeing that many numbers stacked together? Me either. Pretty startling, huh? And if you're curious to see who received our money and how much, click HERE.
CitiGroup and Wells Fargo remain the biggest beneficiaries of the bailout with each receiving $25 billion which they have not yet paid back. Citi has parlayed that bailout into profits of $4.43 billion (Q1), $2.7 billion (Q2), and $2.15 billion (Q3).
Almost as egregious as the money sent to bailout banks has been the amount of funds drawn from the Treasury by mortgage giants Fannie Mae and Freddie Mac. That sum stands at $148 billion and could more than double in the next three years, according to the Federal Housing Finance Agency (FHFA).
Those are the facts. On their own they are probably enough to convince you of the accuracy of this blog title. But there is more. Every day, banks lose tens of thousands of dollars on each property they foreclose on if they refuse to negotiate a short sale. And they often refuse to negotiate short sales.
NOTE: According to CDPE.com, 7 out of 10 homeowners facing foreclosure never speak to a real estate professional, so it is not all the banks' fault. If you or someone you know has started to miss mortgage payments, please call me (850-251-6643).
So back to the folly of banks... Here is a case in point. I recently listed and sold a foreclosure at 3008 Huntington Woods Blvd. It was a quaint, if outdated, 1398 sq ft home with 3 bedrooms, 2 baths, and a 2 car garage. Before it went into foreclosure, the house went under contract as a short sale at $135,000. Nonetheless, the lender refused to consummate the short sale and proceeded with foreclosure anyway. Four months later, I sold the house for....
$115,000. Yup, that's right, $20,000 less than their contract price from just four months earlier. It happens every day and for those banks that took taxpayer money, it costs us. That, my friends, is the folly of banks.
Thursday, October 21, 2010
GMAC and BoA Moving Forward
Just three weeks after they announced a moratorium on their foreclosures in the 23 judicial states, GMAC and Bank of America are going to restart foreclosure proceedings.
James Olecki, spokesman for Ally (GMAC's parent company) said, “Our review and remediation activities related to cases involving judicial affidavits in the 23 states continues. As each of those files is reviewed, and remediated when needed, the foreclosure process resumes.”
DSNews reports that BoA says it has found no instances in which a homeowner was wrongly foreclosed upon and has begun the process of preparing 102,000 foreclosure affidavits that have been on hold for re-submission to the courts beginning next Monday.
To read more about this issue, click HERE.
James Olecki, spokesman for Ally (GMAC's parent company) said, “Our review and remediation activities related to cases involving judicial affidavits in the 23 states continues. As each of those files is reviewed, and remediated when needed, the foreclosure process resumes.”
DSNews reports that BoA says it has found no instances in which a homeowner was wrongly foreclosed upon and has begun the process of preparing 102,000 foreclosure affidavits that have been on hold for re-submission to the courts beginning next Monday.
To read more about this issue, click HERE.
Tuesday, October 19, 2010
David J. Stern, PA
David J. Stern, PA, is one of the largest foreclosure law firms in the Country. Along with Marshall Watson, PA, and other "foreclosure mills", Stern's firm is now under investigation by Florida Attorney General Bill McCollum.
Since word broke that DJSP had falsified thousands of foreclosure documents, FNMA (Stern's largest client) has stopped referring new foreclosure cases to the firm.
Now, Stern has stepped down from his position as chairman of DJSP Enterprises, and three top executives who had been with the company less than a year also resigned. Don't be surprised if executives at other firms follow suit.
To read more about this story, click HERE.
Since word broke that DJSP had falsified thousands of foreclosure documents, FNMA (Stern's largest client) has stopped referring new foreclosure cases to the firm.
Now, Stern has stepped down from his position as chairman of DJSP Enterprises, and three top executives who had been with the company less than a year also resigned. Don't be surprised if executives at other firms follow suit.
To read more about this story, click HERE.
Saturday, October 16, 2010
Great REO Opportunities
Here are a few of my listings which would make great rental property:
1474 Nashville Drive
1997 Mobile Home
1611 square feet
3 bedrooms
2 bathrooms
Only $20,100!
1972 Carp Lane
990 square feet
2 bedrooms
2 bathrooms
Carpet and tile floors
Wood-burning fireplace
$69,900
2402 Talco Hills
990 square feet
2 bedrooms
2 bathrooms
Carpet and tile floors
$69,900
(Photo is of neighboring unit)
1997 Mobile Home
1611 square feet
3 bedrooms
2 bathrooms
Only $20,100!
1972 Carp Lane990 square feet
2 bedrooms
2 bathrooms
Carpet and tile floors
Wood-burning fireplace
$69,900
2402 Talco Hills
990 square feet
2 bedrooms
2 bathrooms
Carpet and tile floors
$69,900
(Photo is of neighboring unit)
Thursday, October 14, 2010
What Buyers Need to Know
I have found a wealth of well written and informative articles about real estate lately, so I am going to keep posting them.
This next one comes from Tara with Trulia. She is writing about the recent foreclosure moratoriums that some of the nation's largest banks (BoA, JPMorgan Chase, etc) have put in place over the past few weeks. She details what buyers need to know about buying a foreclosed property, and she is spot on.
Read what she has to say HERE.
This next one comes from Tara with Trulia. She is writing about the recent foreclosure moratoriums that some of the nation's largest banks (BoA, JPMorgan Chase, etc) have put in place over the past few weeks. She details what buyers need to know about buying a foreclosed property, and she is spot on.
Read what she has to say HERE.
Wednesday, October 13, 2010
GMAC Findings on Foreclosure Practices
GMAC released a statement yesterday that it has not yet uncovered any evidence of faulty foreclosures during its investigation of its foreclosure practices.
Though self-analysis often overlooks one's own faults, the good news is that GMAC has enlisted outside legal and accounting firms to review its practices and documentation.
“As each of those files is reviewed, and remediated when needed, the foreclosure process resumes,” GMAC said.
To read the whole story, click HERE.
Though self-analysis often overlooks one's own faults, the good news is that GMAC has enlisted outside legal and accounting firms to review its practices and documentation.
“As each of those files is reviewed, and remediated when needed, the foreclosure process resumes,” GMAC said.
To read the whole story, click HERE.
Monday, October 11, 2010
BoA Halts Foreclosures Nationwide
Bank of America announced on Friday that they will halt foreclosures in all 50 states. Previously, BoA had said that they would only halt foreclosure proceedings in the 23 judicial states (those requiring a judge's approval to complete the foreclosure process). Florida is a judicial state.
Senate Majority Leader Harry Reid praised Bank of America's action and urged that other major mortgage servicers (like GMAC and JPMorgan Chase) follow suit.
Read more HERE.
Senate Majority Leader Harry Reid praised Bank of America's action and urged that other major mortgage servicers (like GMAC and JPMorgan Chase) follow suit.
Read more HERE.
Saturday, October 9, 2010
Southwood
Southwood is one of Tallahassee's most prestigious subdivisions. However, that might not be the case for much longer.
Since 2008, Southwood has had one of the highest total number of lis pendens filings in Leon County (the lis pendens is the 1st document in the foreclosure process). There were 32 filings in Southwood in 2008 (#3 total overall) and 58 in 2009 (#1 overall).
Southwood currently has seven properties for sale that are either bank owned, in some state of foreclosure, or in position to be a short sale. That figure is set to rise dramatically as more and more properties are entering foreclosure.
Since 2008, Southwood has had one of the highest total number of lis pendens filings in Leon County (the lis pendens is the 1st document in the foreclosure process). There were 32 filings in Southwood in 2008 (#3 total overall) and 58 in 2009 (#1 overall).
Southwood currently has seven properties for sale that are either bank owned, in some state of foreclosure, or in position to be a short sale. That figure is set to rise dramatically as more and more properties are entering foreclosure.
Here are two of the best available listings in Southwood that are great deals...
3242 Belle Meade Trail listed at $360,000 (2816 sq ft)
2525 Twain Drive listed at $309,900 (2530 sq ft)
Wednesday, October 6, 2010
Foreclosure Investigation
Nancy Pelosi and several other California DNC members are petitioning the DOJ to start an investigation into the foreclosure practices of mortgage servicers.
This news comes after last week's announcements that JPMorgan Chase, Bank of America, and GMAC were all halting their foreclosure proceedings while they investigate the soundness of their procedures. Those announcements came after various bank employees testified that they signed mortgage foreclosure documents improperly (i.e. without having them properly notarized and without personal knowledge of the accuracy of the information contained in the documents).
Many experts believe that this problem is widespread throughout the mortgage industry and that more foreclosure halts may be coming. Despite the motion from Pelosi, et al, the suit would likely only delay the introduction of the massive shadow inventory already waiting in the wings.
To read more on this story, click HERE.
This news comes after last week's announcements that JPMorgan Chase, Bank of America, and GMAC were all halting their foreclosure proceedings while they investigate the soundness of their procedures. Those announcements came after various bank employees testified that they signed mortgage foreclosure documents improperly (i.e. without having them properly notarized and without personal knowledge of the accuracy of the information contained in the documents).
Many experts believe that this problem is widespread throughout the mortgage industry and that more foreclosure halts may be coming. Despite the motion from Pelosi, et al, the suit would likely only delay the introduction of the massive shadow inventory already waiting in the wings.
To read more on this story, click HERE.
Saturday, October 2, 2010
More Foreclosure Stops
Amid growing public anger over U.S. home seizures, Bank of America has suspended some of its foreclosures and JPMorgan Chase has come under investigation in California and Connecticut.Bank of America said on Friday it is delaying foreclosures in 23 states to review whether it has been conducting them properly.
Two other big lenders—JPMorgan and Ally Financial's GMAC Mortgage—have already suspended foreclosures.
Also, a Maine state court judge reprimanded GMAC Mortgage for how it repossesses homes. The judge concluded that GMAC submitted a company official's affidavit to support a foreclosure "in bad faith."
Companies are scrambling to defend and where needed improve their foreclosure procedures in the face of anger among homeowners and regulators.
The issue came to the forefront last month when GMAC revealed that officials had signed thousands of affidavits supporting such proceedings without knowing their contents. Banks are expected to take over a record 1.2 million homes this year, up from about 1 million last year and just 100,000 as recently as 2005, real estate data company RealtyTrac Inc said on Thursday.
Read the rest of the CNBC article HERE.
Friday, October 1, 2010
Foreclosure Stops
According to DSnews.com...
Following in the heavy and reverse-motion steps of GMAC Mortgage, JPMorgan Chase has stopped foreclosures in 23 states to review the accuracy of its filings.
According to the bank, the cases may contain “defects” and “flawed paperwork” which could give homeowners reason to contest court-ordered evictions. JPMorgan’s foreclosure suspension affects some 56,000 borrowers.
GMAC triggered what looks like it could be a domino effect when the company announced last week that it was suspending foreclosure actions and REO sales in judicial states because of some paperwork (and human) errors in its filings.
The sheer volume of foreclosure cases materializing out of the housing crisis seems to have given rise to what’s being called the “robo-signers” – servicing execs that mechanically sign off on foreclosure actions and push them through the assembly line thousands upon thousands a month, without abiding by clearly defined laws, such as having the signature notarized and ensuring they have personal knowledge of the information’s accuracy.
Read the whole article HERE
Following in the heavy and reverse-motion steps of GMAC Mortgage, JPMorgan Chase has stopped foreclosures in 23 states to review the accuracy of its filings.
According to the bank, the cases may contain “defects” and “flawed paperwork” which could give homeowners reason to contest court-ordered evictions. JPMorgan’s foreclosure suspension affects some 56,000 borrowers.
GMAC triggered what looks like it could be a domino effect when the company announced last week that it was suspending foreclosure actions and REO sales in judicial states because of some paperwork (and human) errors in its filings.
The sheer volume of foreclosure cases materializing out of the housing crisis seems to have given rise to what’s being called the “robo-signers” – servicing execs that mechanically sign off on foreclosure actions and push them through the assembly line thousands upon thousands a month, without abiding by clearly defined laws, such as having the signature notarized and ensuring they have personal knowledge of the information’s accuracy.
Read the whole article HERE
Wednesday, September 29, 2010
Interesting Articles
Here are two very important articles with respect to the national foreclosure inventory.
Shadow inventory
Foreclosure re-financing
If you have any questions about these articles, please let me know. I would love to start a discussion on one or both of them!
Shadow inventory
Foreclosure re-financing
If you have any questions about these articles, please let me know. I would love to start a discussion on one or both of them!
Saturday, September 25, 2010
Market Saturation?
What percentage of the current Tallahassee real estate market do you think is made up of short sales and foreclosures? 10%? 20%? 50%?
Presently, there are 2702 active residential listings in the MLS for sale in Tallahassee. Of those, 178 (6.6%) are foreclosures and 418 (15.5%) are prospective short sales. So, in total, just over 1 in 5 (22.1%) of all the homes for sale in Leon County are "distressed" sales.
While that number may seem high, it represents only 1 in every 140 households that is affected by a short sale or foreclosure. And that is good news for our community.
Presently, there are 2702 active residential listings in the MLS for sale in Tallahassee. Of those, 178 (6.6%) are foreclosures and 418 (15.5%) are prospective short sales. So, in total, just over 1 in 5 (22.1%) of all the homes for sale in Leon County are "distressed" sales.
While that number may seem high, it represents only 1 in every 140 households that is affected by a short sale or foreclosure. And that is good news for our community.
Friday, September 24, 2010
Foreclosures vs. Short Sales
Short sales and foreclosures are often misunderstood and confused for one another. If they are differentiated, then they are usually considered to be inextricably linked together, though that is not the case. So, in this blog, I am going to compare and contrast the two.
Short sale - a short sale is a situation where 1) A property owner owes more on a piece of real estate than it is worth and 2) the owner desires to sell the property and 3) the owner does not have the means and/or desire to bring to closing the difference between the amount owed and the final sales price and costs associated with closing.
If a homeowner starts to get behind on his payments, then he may try to short sell the property before going into foreclosure (this is a good idea, although a recent report by cdpe.com showed that only 3 in 10 homeowners facing foreclosure actually speak to a real estate professional).
The biggest difference between a short sale and a foreclosure is the issue of ownership. In a short sale, the borrower still owns the home, and has the right to decide whether or not to sell. Once a property has been foreclosed upon, the borrower no longer owns the property and no longer has that right. As a bank owned property (or REO), the lender (or an agent or subsidiary) decides when and for how much to sell the property.
Foreclosure - can be a noun or a verb, "to foreclose" refers to the legal process of exercising a lender's right to take ownership of a property that was pledged as security for a now non-performing loan. A "foreclosure", as a noun, refers to a property that has been foreclosed upon and is now corporately owned (rarely, private individuals lend money that is secured by a mortgage on real estate, and they too may foreclose).
Here is a list of similarities and differences with respect to short sales and foreclosures:
Similarities Differences
1. Bank involvement 1. Bank owns a foreclosure, not a short sale
2. Additional paperwork 2. Foreclosures close more quickly
3. Longer contract time 3. Quicker foreclosure response time
4. Downward price pressure
Short sale - a short sale is a situation where 1) A property owner owes more on a piece of real estate than it is worth and 2) the owner desires to sell the property and 3) the owner does not have the means and/or desire to bring to closing the difference between the amount owed and the final sales price and costs associated with closing.
If a homeowner starts to get behind on his payments, then he may try to short sell the property before going into foreclosure (this is a good idea, although a recent report by cdpe.com showed that only 3 in 10 homeowners facing foreclosure actually speak to a real estate professional).
The biggest difference between a short sale and a foreclosure is the issue of ownership. In a short sale, the borrower still owns the home, and has the right to decide whether or not to sell. Once a property has been foreclosed upon, the borrower no longer owns the property and no longer has that right. As a bank owned property (or REO), the lender (or an agent or subsidiary) decides when and for how much to sell the property.
Foreclosure - can be a noun or a verb, "to foreclose" refers to the legal process of exercising a lender's right to take ownership of a property that was pledged as security for a now non-performing loan. A "foreclosure", as a noun, refers to a property that has been foreclosed upon and is now corporately owned (rarely, private individuals lend money that is secured by a mortgage on real estate, and they too may foreclose).
Here is a list of similarities and differences with respect to short sales and foreclosures:
Similarities Differences
1. Bank involvement 1. Bank owns a foreclosure, not a short sale
2. Additional paperwork 2. Foreclosures close more quickly
3. Longer contract time 3. Quicker foreclosure response time
4. Downward price pressure
Tuesday, September 21, 2010
Foreclosure Basics, Part 2
Yesterday we covered the idea of lien-theory and the two basic documents which detail and secure an obligation to repay in a standard financed real estate purchase (the promissory note and mortgage).
Some more important terms to know when dealing with foreclosures are:
Lis Pendens - A recorded notice of the pendency of an action.
In Latin, this means literally "suit pending". The lis pendens is the first document filed in the foreclosure process. It names the parties in the suit (the lender as plaintiff and the borrower as defendant) and expresses the lender's desire to foreclose. It used to be that the lis pendens was filed almost immediately after the second or third missed payment and the foreclosure could be consummated within 6 months. Today, however, the lis pendens may not be filed for 6-12 months after the first missed payment with the foreclosure not being consummated for an additional year to year and a half.
Final Summary Judgment of Foreclosure - A judicial decision finally disposing of a foreclosure suit.
The final summary judgment (FSJ) is a judge's decision that the plaintiff (lender) has shown sufficient grounds to foreclosure, and he grants the lender the right to take back the property. The FSJ will contain an itemization of the outstanding principal balance as of the time the foreclosure suit was filed, the accrued interest charges, attorney's fees, insurance and taxes that were paid by the lender, and so on.
After the FSJ is issued, it normally takes about a month or two to schedule the property for a courthouse sale. At the courthouse sale, the public has an opportunity to purchase the property. If a bidder's offer is insufficient to cover all, or most (at the bank's discretion), of the bank's money in the property, then the bank will outbid those bidder's and take the property back. Most often, the bank takes the property back with no contesting bids.
Ten days after the courthouse sale is finished, a Certificate of Title (CoT) will be filed to transfer title to the bank/lender/institution (securitization has made all of this a bit more complicated). Once the CoT is filed, then the bank legally owns the property.
Certificate of Title - Certified statement as to land ownership based upon examination of record title.
NOTE: Florida is not a redemption state, so the borrower (former owner) does not have the right or ability to get the property back after the final summary judgment is filed unless he can prove that the suit was filed improperly (that is the reason for the ten days between the courthouse sale and the recording of the CoT).
That lays a great framework upon which we can build our future discussions on foreclosures. Please let me know if you have any questions.
P.S. Remember, while I am a very successful real estate agent with a thorough knowledge of real estate law, I am not a real estate attorney, and do not and cannot practice law. For legal advice regarding real estate, please call Blake Hayward or John Grant of Hayward & Grant at (850) 386-4400.
Some more important terms to know when dealing with foreclosures are:
Lis Pendens - A recorded notice of the pendency of an action.
In Latin, this means literally "suit pending". The lis pendens is the first document filed in the foreclosure process. It names the parties in the suit (the lender as plaintiff and the borrower as defendant) and expresses the lender's desire to foreclose. It used to be that the lis pendens was filed almost immediately after the second or third missed payment and the foreclosure could be consummated within 6 months. Today, however, the lis pendens may not be filed for 6-12 months after the first missed payment with the foreclosure not being consummated for an additional year to year and a half.
Final Summary Judgment of Foreclosure - A judicial decision finally disposing of a foreclosure suit.
The final summary judgment (FSJ) is a judge's decision that the plaintiff (lender) has shown sufficient grounds to foreclosure, and he grants the lender the right to take back the property. The FSJ will contain an itemization of the outstanding principal balance as of the time the foreclosure suit was filed, the accrued interest charges, attorney's fees, insurance and taxes that were paid by the lender, and so on.
After the FSJ is issued, it normally takes about a month or two to schedule the property for a courthouse sale. At the courthouse sale, the public has an opportunity to purchase the property. If a bidder's offer is insufficient to cover all, or most (at the bank's discretion), of the bank's money in the property, then the bank will outbid those bidder's and take the property back. Most often, the bank takes the property back with no contesting bids.
Ten days after the courthouse sale is finished, a Certificate of Title (CoT) will be filed to transfer title to the bank/lender/institution (securitization has made all of this a bit more complicated). Once the CoT is filed, then the bank legally owns the property.
Certificate of Title - Certified statement as to land ownership based upon examination of record title.
NOTE: Florida is not a redemption state, so the borrower (former owner) does not have the right or ability to get the property back after the final summary judgment is filed unless he can prove that the suit was filed improperly (that is the reason for the ten days between the courthouse sale and the recording of the CoT).
That lays a great framework upon which we can build our future discussions on foreclosures. Please let me know if you have any questions.
P.S. Remember, while I am a very successful real estate agent with a thorough knowledge of real estate law, I am not a real estate attorney, and do not and cannot practice law. For legal advice regarding real estate, please call Blake Hayward or John Grant of Hayward & Grant at (850) 386-4400.
Monday, September 20, 2010
Foreclosure Basics, Part 1
If you are interested in foreclosures, then we must start with some basic terms which provide a framework for our discussion. A solid understanding of these terms will help us navigate the foreclosure waters and will help me to better help you.
Below are some of the most important real estate terms relating to foreclosures (taken from the Chicago Title Real Estate Dictionary). I have included some explanatory notes.
Lien-Theory State - A lien-theory state is a state in which a lien is placed on a property to secure a debt. The borrower takes title to the property. By contrast, title-theory states are those states where the lender becomes the title owner and the borrower only takes title to the property once the debt (loan) is paid off.
Florida is a lien-theory state.
Promissory Note - An unconditional written promise, signed by maker, to pay, absolutely, a sum certain in money, either to the bearer or to a person therein designated or his/her order.
The note will contain the initial principal amount of the loan (the amount borrowed) along with the term (length) of the loan (typically 15 or 30 years), the interest rate, whether or not there is a pre-payment penalty associated with the loan, and some other legal basics.
Mortgage - A two party security instrument pledging land as security for the performance of an obligation.
When purchasing real estate in Florida, the buyer/borrower gives a mortgage to the lender. The buyer is called the mortgagor and the lender is the mortgagee (the -or ending denotes giving, the -ee ending denotes receiving). The mortgage creates a lien against the real property (land and improvements, if any) and pledges the real property as collateral for the loan. The mortgage outlines the terms under which the mortgagee may rightly foreclosure.
The most common reason for foreclosure is for non-payment or payment not in keeping with the terms of the promissory note, although not maintaining insurance or letting the property become dilapidated are also reasons why a lender might rightly foreclosure (not common at all).
Check back tomorrow for more important real estate terms relating to foreclosures.
Below are some of the most important real estate terms relating to foreclosures (taken from the Chicago Title Real Estate Dictionary). I have included some explanatory notes.
Lien-Theory State - A lien-theory state is a state in which a lien is placed on a property to secure a debt. The borrower takes title to the property. By contrast, title-theory states are those states where the lender becomes the title owner and the borrower only takes title to the property once the debt (loan) is paid off.
Florida is a lien-theory state.
Promissory Note - An unconditional written promise, signed by maker, to pay, absolutely, a sum certain in money, either to the bearer or to a person therein designated or his/her order.
The note will contain the initial principal amount of the loan (the amount borrowed) along with the term (length) of the loan (typically 15 or 30 years), the interest rate, whether or not there is a pre-payment penalty associated with the loan, and some other legal basics.
Mortgage - A two party security instrument pledging land as security for the performance of an obligation.
When purchasing real estate in Florida, the buyer/borrower gives a mortgage to the lender. The buyer is called the mortgagor and the lender is the mortgagee (the -or ending denotes giving, the -ee ending denotes receiving). The mortgage creates a lien against the real property (land and improvements, if any) and pledges the real property as collateral for the loan. The mortgage outlines the terms under which the mortgagee may rightly foreclosure.
The most common reason for foreclosure is for non-payment or payment not in keeping with the terms of the promissory note, although not maintaining insurance or letting the property become dilapidated are also reasons why a lender might rightly foreclosure (not common at all).
Check back tomorrow for more important real estate terms relating to foreclosures.
Friday, September 17, 2010
Foreclosure News Coming...
In desiring to provide the Tallahassee community with important and timely information about the real estate market, I have decided to start a second blog that specifically features foreclosures.
For more general information about the market, please subscribe to my first blog at http://www.realestatetallahassee.blogspot.com/. To learn more about foreclosures specifically (new listings, tips on avoiding foreclosure or purchasing a foreclosure, etc), please visit this blog regularly.
I'll start posting information next week. If you have any questions in the meantime, please call or email me at 850-251-6643 or jasonpicht@gmail.com.
For more general information about the market, please subscribe to my first blog at http://www.realestatetallahassee.blogspot.com/. To learn more about foreclosures specifically (new listings, tips on avoiding foreclosure or purchasing a foreclosure, etc), please visit this blog regularly.
I'll start posting information next week. If you have any questions in the meantime, please call or email me at 850-251-6643 or jasonpicht@gmail.com.
Subscribe to:
Posts (Atom)