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.

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.

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.

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.

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.

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)

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.

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.

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.

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.

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)

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.

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.

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