Foreclosures just lower cause banks are too busy foreclosing
Tuesday, May 17, 2011 at 9:04AM As anyone not working in economic leadership in Washington knows, the housing market has not stabilized and foreclosures, along with the pain they cause, remain unnecessarily high with no real signs of abatement. There remains no federal legal requirement for banks to renegotiate mortgages in a fair and quick (or any) manner, nor, sadly, will there be. As I've mentioned many times before, much of the mortgage pain could have been reduced using federal bailout money (or any of the more than $4 trillion of excess reserves, treasuries, and mortgage assets on the Fed's books) to forcibly reduce mortgages, rather than being given to sustain the banks that created them and are sitting on devalued assets (the homes) the loan risk for which, they continue to shove onto borrowers, that don't have access to 0-.25% money.
This troubling report came out yesterday from RealtyTrac. It basically states that the reason foreclosure figures are at 40 month lows, is because banks are just backed up with all their foreclosure activity, and the growing pace of delinquent mortgages that banks ultimately turn into foreclosure proceedings. In other words, they are just too busy screwing their borrowers to screw them more quickly.
"Nationwide, foreclosures completed (REOs) in the first quarter of 2011 took an average of 400 days from the initial default notice to the REO, up from 340 days in the first quarter of 2010 and more than double the average 151 days it took to foreclose in the first quarter of 2007.
The average timeframe from initial default notice to REO in New Jersey and New York was more than 900 days in the first quarter of 2011, more than three times the average timeline in the first quarter of 2007 for both states. The average foreclosure process in Florida took 619 days for foreclosures completed in the first quarter, up from 470 days in the first quarter of 2010 and nearly four times the average of 169 days it took in the first quarter of 2007. The average foreclosure process in California took 330 days for foreclosures completed in the first quarter, up from 262 days in the first quarter of 2010 and more than double the average of 134 days in took in the first quarter of 2007."
in practice, that means that people fighting foreclosures do so at greater legal costs drawn out over longer, more painful time periods. It also means banks are lying about their true conditions - but, that's nothing new. Even as investigations into mortgage practices, such as the one just announced by New York Attorney General, Eric Schneiderman, continue, the glacial pace of inspection compared to the intense devastation afflicting borrowers, provides little comfort, though hopefully some light at the end of a really arduous tunnel.
Reader Comments (6)
Foreclosure activity was roaring along this winter, more quickly than ever - until a New York Judge ruled that the Mortgage Electronic Registry Systems(MERS) did not hold the note, so could not legally foreclose. Judges in several states concurred, and in a few cases sent the homeowner plaintiff home with free and clear title. In most MERs loans, (90%of all home loans) the title no longer exists.
In March, Oregon stopped all MERS related foreclosures immediately and pulled thousands of homes off the auction block until the banks could decide how to proceed legally.
I was astounded to see the stories in the press expressing optimism over the slowdown in foreclosures. Huh? Once they get dumped back on the market, along with the new wave of ARMs due to reset higher this year - throwing more borrowers under water, the situation will be even worse! It is also amazing that the stock market has been oblivious and soaring all this time - Wall Street is only now showing a furrowed brow...
The one democratic action President Obama has actually taken (and about the only thing he's done I actually agree with) was to veto that UNANIMOUS voice vote (so it wouldn't be recorded) by the US Senate which gave the banksters a total exemption to their ciminal activities regarding fraudclosures.
(Dodd, author of that Dodd-Frank Act -- should have been called the FranenDodd Act -- was seen shouting yea on that one as well.)
But with all the extraordinary amount of reportage detailing the endless fraud perpetrated by the banks and mortgage lenders, and lender processing firms, etc, etc., people still aren't comprehending the full extent of the corruption involved.
The entire super-profit cycle, which appears to have come out of JPMorgan Chase, is the selling of those loans, their securitization, then the foreclosure -- which on FHA loans results on almost the complete recovery of the original loan by the banksters -- then once again re-selling and further securitizations.
And no one's in jail.....
I can't help wondering if there isn't a very incriminating paper trail of communication from JP Morgan Chase to set new loan policies throughout their company back in the 90's. Surely, someone had to say, "Go ahead - take the $45,000 salary and sketchy credit rating and approve the $500,000 mortgage. We're just going to sell the note, and the buyer will get their money back plus the house in a couple of years. It's a win, win, win!" Otherwise, no loan officer in his or her right mind would have approved these deals.
The combined total of theft from every incarcerated offender in the US would not touch the level of fraud from the banks and mortgage lenders. For the sake of society, it is time to file criminal charges.
I agree that foreclosures are not on the decline but just being grandfathered out in order to manipulate perception and statistics on the issue.
However “forcibly reducing mortgages” is just another plug in the leaky ship. While this would do wonders for main street stability in the short term it would fail to address the main problem. I think everyone knows that but we are all still in denial. Banks would never keep people in their homes because they know the real value and wealth is in the physical land and improvements. Reducing mortgages would also open the flood gates for deflation. If you can reduce the debt on my house… Why not my car, boat, credit cards, student loans, ect? In some situations this may be a good thing but the banks and our government are obsessed with the big number. It’s incalculable but there would be a sharp drop in M3, reducing all the big numbers like GDP, tax revue, and all the other esoteric economic indicators that are just a bunch of hot air.
As you know the main problem is the culture of banks. They are designed to consume every last vestige of wealth until it is all theirs. They are unsustainable, they dig their own graves, and they are a creation of man and man’s greed. This system will fail, it’s inevitable. No money system, measure of wealth, perception of value, or store of value is perfect. They all have to adjust to the ever changing environment around them. One hundred, five hundred, or a thousand years from now our successors will look back at these moments in history and learn from our mistakes.
I believe that it is the very creation of money as a perception of value is the real problem. Not banks, not greed, not corruption, not government, and not society. They are not the problem. Real wealth and real value will always be in things that are real. Not numbers on a computer or digits on pieces of paper. In other words our current culture has been coned into believing a false reality of security. While this may have helped and shaped progress over the past 5,000 years it has also been our achilles heel.
Humanity is better than this. The perception of money, currency, and wealth has served its purpose and will continue to do so. However it is not the final answer to the progress of our species.
In closing ask yourself this… What are you going to do when you finally dig that last ounce of gold out of the ground?
Wow. I've been reading your stuff for about a year now and this is basically the only sh*t I dont agree with. Give atleast a little credit where credit is due. Kobe got his ass kicked by this so called fluke. So what? Chill out. No one said the Rockets were the best team. zskwnm zskwnm - red bottom sole.
The average foreclosure process in California took 330 days for foreclosures completed in the first quarter, up from 262 days in the first quarter of 2010 and more than double the average of 134 days in took in the first quarter of 2007."