Bank of America halts foreclosures in all states

[NHSparky]

Bank of America halts foreclosures in all states

By Charles Riley, staff reporterOctober 8, 2010: 11:25 AM ET

LINK

(excerpt)

NEW YORK (CNNMoney.com) -- Bank of America is halting foreclosure proceedings in all 50 states as part of a widening investigation into flaws in the process, the company announced Friday.

"Bank of America has extended our review of foreclosure documents to all fifty states," spokesman Dan Frahm said in an e-mailed statement. "We will stop foreclosure sales until our assessment has been satisfactorily completed."

"Our ongoing assessment shows the basis for our past foreclosure decisions is accurate," Frahm added. "We continue to serve the interests of our customers, investors and communities. Providing solutions for distressed homeowners remains our primary focus."

============================================================

And PNC Bank and Ally have halted foreclosures in 23 states.  I'd like to say this is a good thing, but consider that if banks aren't able to recover losses, they're not going to be giving out loans either, and title companies will be to say the least reluctant to forward without title insurance if companies aren't willing to issue said insurance.

NOT a good thing to simply throw the system into full stop.

[DumbAss Tanker]

Yeah.  Remedy may be worse than the disease.

[AllosaursRus]

What's to investigate? You don't pay your payments, you give up the house! I sure as hell didn't get any favors when I went tits up, right after 9/11! Why do these people now get a pass? Could it be because they voted for the messiah?

This sounds more to me like O'Bumbler's thugs leanin' on the banks!!! One of the reasons the Fed refused to take the money when the Banks wanted to give it back! They want to be able to hold over their heads!

[ColonialMarine0431]

Caveat emptor...

Mortgage mess thwarting Jacksonville homebuyers

Doug Clark quickly went from excitement over a Jacksonville home he was to purchase Monday to devastation when the closing was derailed at the last minute.

He was looking forward to moving into the 1,600-foot Westside home on South Janice Circle, which was a bank-owned sale by J.P Morgan Chase & Co.

"It was a decent house, it needs a lot of work, but it was going to be mine," said Clark, 50.

The sudden termination of the sale wasn't due to financing; Clark was going to pay cash for the asking price of $23,800. The house last sold for $109,300 in 2007.

Clark got ensnared in a widespread suspension of home sales after Chase, Ally Financial and Bank of America moved last week to stop all foreclosures and transactions of bank-owned properties in 23 states amid allegations of fraud and missing documents that have impacted foreclosures nationwide.

Full story here:
http://jacksonville.com/business/real-estate/2010-10-08/story/mortgage-mess-thwarting-jacksonville-homebuyers

[JohnnyReb]

Caveat emptor...

Full story here:
http://jacksonville.com/business/real-estate/2010-10-08/story/mortgage-mess-thwarting-jacksonville-homebuyers

Look on the bright side...he can probably get it for $2,300 next year.

[debk]

Too little too late for too many people that have already lost their homes.


The banks should have been working with people 2-3 years ago, and now they wouldn't be in some of the mess they(the banks) are in.  

I did a report on a house yesterday afternoon.

House is on the market for $374,900. It's priced at $149/SF. They bought it mid-2008 for $362,000. This is the second time since they bought it, that it's been on the market, it was priced $20,000 higher the last time it was on the market, over a year ago. It's been on the market, this time, for 187 days.

House next door is also on the market (with the same agent - hmmmm) for the same price per square foot( list price is $389,000), however the next door neighbors' 1400SF finished basement is not incl in that price/SF because the report does not figure it that way, though in our market we do count it. It's been on the market 344 days, originally starting at $398,000.

House across the street is on the market for  $395,000 at $132/SF. It's been on the market for 339 days, originally listed at $399,000.

One other house in subdivision is also on the market for $419,900, $129/SF and has only been listed for 50 days.

The only recent house to sell in the subdivision was back in January.  It was listed originally for $387,900, sold in 81 days at $364,000, which was $130/SF.

These houses are in a nice planned development with a pool and the yards are maintained by the HOA. Nice houses, 2500-4500SF, lots of hardwood flrs, granite or corian counters, custom cabinets, nice nice nice houses. ( do I sound like a realtor or what?   )

I also comped it with a house in the subdivision across the road, and one in another subdivision about 3/4's of a mile down the road.

The best I could do on pricing it for average time on the market 120-180 days....was $338,000!!! Their original mortgage amount was $332,000 - I don't have access to info that tells me the current balance after paying for 2.5 years.

After paying a realtor's commission...the homeowners may have enough to pay off their mortgage balance...provided they get about $360,000 sales price, they should have enough for closing and commission unless there are other fees. That's still at $143/SF.

If I was a buyer's agent, writing up an offer on this house....I pull past sales in the subdivision. If the last one sold  @$130/SF...that has everything and more that the subject house(one I did the report on ) does ...why would I even attempt to counsel my buyers to pay $143/SF for a similar house? Particularly in a buyer's market? And when a buyer could buy another house, of comparable quality - in the same area, same schools, etc...for around $100/SF?


Banks and lenders are going to HAVE to work with homeowners to make monthly payments more affordable, by reducing interest rates, or allowing the homeowner to pay interest only for a specific time period - minimum of 24 months, or reducing monthly payments and making up the missed $$$'s by adding on additional months to the life of the loan(30 yr note converted to 40yr note). They DO NOT have to reduce the value of the property or the amount of the mortgage!!! All the foreclosures are doing are reducing the values of everyones' property in an area and the banks are writing off the loss (amount of mortgage to amount of money obtained in the sale of the foreclosed property) monies on their bottom line to the IRS!!!!

If the banks/lenders don't do something logical for the housing industry....and do it soon...we, as a country, are not going to come out of this recession/depression!!!!  

I'm not talking about "free passes"....I'm talking about a reduction in monthly mortgage payments - not the mortgage amount itself - so the homeowner can stay in the house, or sell it, and prevent another foreclosure  coming on the market and affecting the value of everyone else's house in the neighborhood.



 

[Wretched Excess]

the housing crisis just went into extra innings.  we're now probably 2 years further away from a resolution to the than we were a month ago.  and I'll bet you a beer that there are next to zero actual substance problems with the vast majority of the foreclosure paperwork that just got kiboshed.

 

[true_blood]

What's to investigate? You don't pay your payments, you give up the house!

I thought it was that simple too!! Now that we have a socialist/marxist president, (I use the term president, VERY loosely.), he see fit to make the banks more accountable and not the people whom lied on their application loans. I really do feel for those that have worked hard, saved money and put a down payment on a house and then got laid off. BUT, for those that lied to get their "dream house", you get what you deserve. Owning a home is privilege, not a right! You work for it. No one put money in our pockets, we worked for what we want/have.
On other note, I can see this ordeal really screwing the economy in A BIG WAY!!! This is huge.

[AllosaursRus]

Too little too late for too many people that have already lost their homes.


The banks should have been working with people 2-3 years ago, and now they wouldn't be in some of the mess they(the banks) are in.  

I did a report on a house yesterday afternoon.

House is on the market for $374,900. It's priced at $149/SF. They bought it mid-2008 for $362,000. This is the second time since they bought it, that it's been on the market, it was priced $20,000 higher the last time it was on the market, over a year ago. It's been on the market, this time, for 187 days.

House next door is also on the market (with the same agent - hmmmm) for the same price per square foot( list price is $389,000), however the next door neighbors' 1400SF finished basement is not incl in that price/SF because the report does not figure it that way, though in our market we do count it. It's been on the market 344 days, originally starting at $398,000.

House across the street is on the market for  $395,000 at $132/SF. It's been on the market for 339 days, originally listed at $399,000.

One other house in subdivision is also on the market for $419,900, $129/SF and has only been listed for 50 days.

The only recent house to sell in the subdivision was back in January.  It was listed originally for $387,900, sold in 81 days at $364,000, which was $130/SF.

These houses are in a nice planned development with a pool and the yards are maintained by the HOA. Nice houses, 2500-4500SF, lots of hardwood flrs, granite or corian counters, custom cabinets, nice nice nice houses. ( do I sound like a realtor or what?   )

I also comped it with a house in the subdivision across the road, and one in another subdivision about 3/4's of a mile down the road.

The best I could do on pricing it for average time on the market 120-180 days....was $338,000!!! Their original mortgage amount was $332,000 - I don't have access to info that tells me the current balance after paying for 2.5 years.

After paying a realtor's commission...the homeowners may have enough to pay off their mortgage balance...provided they get about $360,000 sales price, they should have enough for closing and commission unless there are other fees. That's still at $143/SF.

If I was a buyer's agent, writing up an offer on this house....I pull past sales in the subdivision. If the last one sold  @$130/SF...that has everything and more that the subject house(one I did the report on ) does ...why would I even attempt to counsel my buyers to pay $143/SF for a similar house? Particularly in a buyer's market? And when a buyer could buy another house, of comparable quality - in the same area, same schools, etc...for around $100/SF?


Banks and lenders are going to HAVE to work with homeowners to make monthly payments more affordable, by reducing interest rates, or allowing the homeowner to pay interest only for a specific time period - minimum of 24 months, or reducing monthly payments and making up the missed $$$'s by adding on additional months to the life of the loan(30 yr note converted to 40yr note). They DO NOT have to reduce the value of the property or the amount of the mortgage!!! All the foreclosures are doing are reducing the values of everyones' property in an area and the banks are writing off the loss (amount of mortgage to amount of money obtained in the sale of the foreclosed property) monies on their bottom line to the IRS!!!!

If the banks/lenders don't do something logical for the housing industry....and do it soon...we, as a country, are not going to come out of this recession/depression!!!!  

I'm not talking about "free passes"....I'm talking about a reduction in monthly mortgage payments - not the mortgage amount itself - so the homeowner can stay in the house, or sell it, and prevent another foreclosure  coming on the market and affecting the value of everyone else's house in the neighborhood.

It seems to me these people are more victims of the housing bubble than anything else! The bottom line is, the houses just aren't worth what they paid! Thank Billy BJ and his admin for that one!

I forget where it is, but there's a study on the price of houses after the "minorities must have houses act", got shoved thru congress, and the imitation increased value since it was enacted! There's  an extremely good graph showing the separation from reality somewhere. I'll try and find it.

[cavegal]

Hmmm this will stop until after the election. Free house.  

[debk]

the housing crisis just went into extra innings.  we're now probably 2 years further away from a resolution to the than we were a month ago.  and I'll bet you a beer that there are next to zero actual substance problems with the vast majority of the foreclosure paperwork that just got kiboshed.

 

Actually, there are some issues with the foreclosure paperwork.

I got an email on some of them....

One is that some lenders....I don't know which ones specifically.....have used the mortgages that they hold as "money" traded on the stock market. I guess it would be like collateral...which is the only way that I could figure it out....because if used as collateral for something else, then the lender does not have the "right" to foreclose on one of those mortgages and then turn around and sell the house itself to someone else.

The article also said that the lender, technically, couldn't even foreclose on the property for lack of mortgage payment, because "technically" the lender didn't even own the property because it was traded.

What I didn't understand...because mortgages are sold from original lenders to others all the time....is what the difference was between selling and trading. The only thing I could figure out was that "selling the mortgage paper, itself"  to another company - whatever the company may be...means that the paper (mortgage itself) is sold to another holder, whereas "trading the mortgage paper" on the stock market, means that the ownership of the mortgage paper has come into question. I'm sure that someone who deals with the stockmarket personally, can probably explain this way better than I have.

The other issue that has been happening is that homeowners in trouble have called and are working with the loan department regarding redoing their mortgage and monthly payments. This department is totally separate from the loss mitigation department that does the foreclosure on a property. It is very common that not only do these two departments not communicate...often they are in different cities if not different countries!!!!

So while the homeowner thinks they are working things out with their lender, they don't realize that the lender's loss/mitigation department is proceeding with the foreclosure process. I have had to tell three different homeowners - who were in the process of redoing their mortgages AND had sent money to the lenders - that their homes had been sold on the courthouse steps!!!! None of them had a clue, because they were talking to their lenders on almost a daily basis. After the first one that I called the lender myself, I learned that it didn't do any good. The other two, I just called the attorney of record who was processing the foreclosure what I was told by the homeowner. I was told both times, that it was not the attorney's job to verify why the foreclosure procedure was being done, but to merely to process the foreclosure itself....do the posting in the paper, co-ordinate the eviction, process the sale of the property to new owner.

Those are the two main issues that I know about....what others there may be, I don't know.  

[AllosaursRus]

These two graphs show what I was talkin' about..........



The above chart estimates the market value of today's median-priced house over a 40-year period. The thick red line represents real house prices. For those unfamiliar with economic terminology, "real" prices are prices that have been adjusted for inflation. The thick blue line represents nominal house prices. The thin lines represent the pre-bubble (1970-1999) trend lines.



This graph shows the change in nominal home prices vs. the change in nominal rents since 1983. Over the long run, home prices and rents should increase at roughly the same rate.

Here's a site where someone has really done their homework:

Housing Bubble Factoids

Then, there's this, written in the winter of 2000..........

The Clinton administration has turned the Community Reinvestment Act, a once-obscure and lightly enforced banking regulation law, into one of the most powerful mandates shaping American cities—and, as Senate Banking Committee chairman Phil Gramm memorably put it, a vast extortion scheme against the nation's banks. Under its provisions, U.S. banks have committed nearly $1 trillion for inner-city and low-income mortgages and real estate development projects, most of it funneled through a nationwide network of left-wing community groups, intent, in some cases, on teaching their low-income clients that the financial system is their enemy and, implicitly, that government, rather than their own striving, is the key to their well-being.

The CRA's premise sounds unassailable: helping the poor buy and keep homes will stabilize and rebuild city neighborhoods. As enforced today, though, the law portends just the opposite, threatening to undermine the efforts of the upwardly mobile poor by saddling them with neighbors more than usually likely to depress property values by not maintaining their homes adequately or by losing them to foreclosure. The CRA's logic also helps to ensure that inner-city neighborhoods stay poor by discouraging the kinds of investment that might make them better off.

Then, in 2007, we got Bwarney Fwank and Chris "I got a good deal from my buds" Dodd!

[debk]

I thought it was that simple too!! Now that we have a socialist/marxist president, (I use the term president, VERY loosely.), he see fit to make the banks more accountable and not the people whom lied on their application loans. I really do feel for those that have worked hard, saved money and put a down payment on a house and then got laid off. BUT, for those that lied to get their "dream house", you get what you deserve. Owning a home is privilege, not a right! You work for it. No one put money in our pockets, we worked for what we want/have.
On other note, I can see this ordeal really screwing the economy in A BIG WAY!!! This is huge.

I'm doing some reports on houses that people have owned for years and years. I'm doing ones on people that I actually know....that are in businesses that have been hit hard by the economy in the last couple of years. I'm doing ones that 10-20% was put down...I can tell because I have access to the mortgage amounts.

 - before anyone panics over the type of mortgage info that available - it's mortgage amount, who the lender, the date the mortgage was recorded, the price of the house at time of sale. Occasionally the length of the mortgage is listed. All of that info is actually public record.

Most of the people who were given loans that they really didn't qualify for, were weeded out 3-4 years ago. Now the ones that are in trouble have either lost their jobs...or got new ones at a lower salary, they are in a profession that has been seriously impacted by the housing industry - a builder, an architect, roofer, electrician, etc, or they are in one that has been affected by the economy itself - car dealer, restaurant/retail owner, plant/company closing.

Many of those who have houses in the mid-price range (here it's $200-500,000) are stuck with them, because they can't sell them!! There are not enough buyers out there for the number of properties on the market, and the homeowner ends up losing the house because they can't make the payment anymore and they can't sell it either at all or for what they owe on it.

[Wretched Excess]

Actually, there are some issues with the foreclosure paperwork.

[quite relevant comments snipped]

of course there are.  the question is whether the frequency and severity of the legitimate issues are worth throwing an anchor around the entire economy and throwing it back in the lake.   the housing crisis, and probably the recession in general, will absolutely not go away until the inventory of foreclosed houses is depleted.  if we are rolling the dice on the timing of the recovery on a shit load of clerical issues, or we are jeopardizing the future because of a bunch of policy/procedure issues, then we deserve what is about to happen to us.
 

[true_blood]

I'm doing some reports on houses that people have owned for years and years. I'm doing ones on people that I actually know....that are in businesses that have been hit hard by the economy in the last couple of years. I'm doing ones that 10-20% was put down...I can tell because I have access to the mortgage amounts.

 - before anyone panics over the type of mortgage info that available - it's mortgage amount, who the lender, the date the mortgage was recorded, the price of the house at time of sale. Occasionally the length of the mortgage is listed. All of that info is actually public record.

Most of the people who were given loans that they really didn't qualify for, were weeded out 3-4 years ago. Now the ones that are in trouble have either lost their jobs...or got new ones at a lower salary, they are in a profession that has been seriously impacted by the housing industry - a builder, an architect, roofer, electrician, etc, or they are in one that has been affected by the economy itself - car dealer, restaurant/retail owner, plant/company closing.

Many of those who have houses in the mid-price range (here it's $200-500,000) are stuck with them, because they can't sell them!! There are not enough buyers out there for the number of properties on the market, and the homeowner ends up losing the house because they can't make the payment anymore and they can't sell it either at all or for what they owe on it.

Excellent point Deb. I didn't think of that. That's why you're the realtor!!

[AllosaursRus]

Like I said, no one gave me a break after 9/11! I managed to pull myself outa the mess, why shouldn't everyone else?

[NHSparky]

What's to investigate? You don't pay your payments, you give up the house! I sure as hell didn't get any favors when I went tits up, right after 9/11! Why do these people now get a pass? Could it be because they voted for the messiah?

This sounds more to me like O'Bumbler's thugs leanin' on the banks!!! One of the reasons the Fed refused to take the money when the Banks wanted to give it back! They want to be able to hold over their heads!

Problem is, in far too many cases, the mortgage is up to date.  I saw a case not long ago where a bank tried to foreclose on a house, but there was just one problem--

THERE WAS NO MORTGAGE ON THE HOUSE.  The homeowner owned it free and clear.

And this has happened repeatedly:

http://www.kcra.com/r/23688124/detail.html

http://articles.moneycentral.msn.com/SmartSpending/blog/page.aspx?post=1628429&_blg=1,1628429

http://www2.tbo.com/content/2010/sep/23/231621/florida-mans-owned-home-but-bank-tried-to-foreclos/

http://jonathanturley.org/2010/01/12/bank-of-america-allegedly-forecloses-on-wrong-house-cuts-off-power-and-locks-out-couple-but-insists-lawsuit-has-no-merit/

http://www.floydcountytimes.com/pages/full_story/push?article-Man+sues+after+bank+takes+wrong+house%20&id=4217211&instance=lead_story_left_column

[vesta111]

Problem is, in far too many cases, the mortgage is up to date.  I saw a case not long ago where a bank tried to foreclose on a house, but there was just one problem--

THERE WAS NO MORTGAGE ON THE HOUSE.  The homeowner owned it free and clear.

And this has happened repeatedly:

http://www.kcra.com/r/23688124/detail.html

http://articles.moneycentral.msn.com/SmartSpending/blog/page.aspx?post=1628429&_blg=1,1628429

http://www2.tbo.com/content/2010/sep/23/231621/florida-mans-owned-home-but-bank-tried-to-foreclos/

http://jonathanturley.org/2010/01/12/bank-of-america-allegedly-forecloses-on-wrong-house-cuts-off-power-and-locks-out-couple-but-insists-lawsuit-has-no-merit/

http://www.floydcountytimes.com/pages/full_story/push?article-Man+sues+after+bank+takes+wrong+house%20&id=4217211&instance=lead_story_left_column

What the Hell sparky, this is akin to buying a car for cash and having it repossessed by some bank you never heard of.  By the time you get your papers in order, 2 days, your brand new $20,000 car has been sold for $5,000 bucks.

What happend to possession is 9/10 of the law.?

I am beginning to wonder why people feel the need to buy a home in the first place.  Houses are money pits, land is a responsibility.

I have owned 3 homes in my life.  All became an albatross around my neck.

It is true that the home I bought 15 years ago has by the tax code gone up in value by $20,000 BUT, we have had to pour more money into this place then we will ever get out if we sell.

People down scale as the kids leave home and they become older, but the taxes keep going up, utilities raise, and before one knows it the 4 bedroom home they sold to buy a 2 bedroom home is close to the same expense.

It makes no sense to me that a bank one has never dealt with can forclose on property that is bought and paid for from an individual or other bank.

Don't people get a title to land and home that is paid for.?    The old mortgage burning of the past comes to mind.

I do remember years ago that there was a kink in the VA loan program.   If one bought a home and the new buyers defaulted on the loan the seller was now responsible for the morgage---something like that, it was brought up when we bought a home and my Hubby had formally sold a home he had bought under the VA system.

Never did understand that system unless it was to keep the military from buying up a load of homes and renting them out.



 

[debk]

I do remember years ago that there was a kink in the VA loan program.   If one bought a home and the new buyers defaulted on the loan the seller was now responsible for the morgage---something like that, it was brought up when we bought a home and my Hubby had formally sold a home he had bought under the VA system.

Never did understand that system unless it was to keep the military from buying up a load of homes and renting them out.

If an AD military person or a Vet - who qualifies - purchases a home with a VA loan....they may not rent the property to another individual.

It may have changed in the last couple of years due to the fact that this is "wartime", but if it has, I am not aware of it. However, I have rarely had a buyer purchase a home using a VA loan, and have not had one do so in years....as I primarily sell foreclosure properties to investors, and VA loans will not work on a foreclosure unless the property is in excellent condition, passing all VA guidelines, as a bank will not make any repairs required to conform to a VA loan.

An individual may sell their home with the VA loan assumable by the new buyer, but if they do so, the Vet will lose their opportunity to obtain another VA loan certificate.

Like FHA loans, VA loans are funded by the federal government. They are also quite difficult to get on a property that is in less than stellar condition, or the seller must do all the repairs found on a home inspection and also by a VA approved loan apprasier...which can sometimes be more expensive and extensive than a seller is willing to do to sell the property using VA funding.

Also like FHA loans, VA loans require that a seller pay certain items of the buyer's closing costs. The costs are more expensive to a seller on a VA loan than an FHA loan. While they are not usually outrageous amounts, they do increase the sellers' closing costs and sometimes a seller just does not have the extra monies to pay the required items.

I have had sales fall through because a seller would not pay those required costs on an FHA loan. I have also had sales price increased by the seller to cover those costs, because those costs can not show up on a HUD statement (closing statement) as paid by the buyer.

It used to be that if a seller sold their VA funded house to a buyer under an assumable mortgage contract....the buyer takes over the existing mortgage and the seller loses their VA loan certificate...if the buyer defaults on the loan, the government would go back to the Vet who originally owned the home because it was the Vet's certificate that the loan was based.

I don't think it's been that way for a long time. I know though that back in 1979 when the ex and I purchased our first home in Durham NC...we assumed the VA loan of the seller, and it was like that back then. I also know that when we sold the house, to a Vet with a new VA loan....we had to pay 8 points - which was 8% of the buyer's loan amount which was a 100% loan - in order for the Vet to purchase our house. Between the 8 points and the closing costs, we were lucky to pay off the existing loan. 

[Evil_Conservative]

I haven't read this whole thread yet, so if I address something already covered, please ignore.

If these banks stop the foreclosures for "investigating", that would take homes off the market, correct?  And that would then make the housing market seem to "improve"... but then once those foreclosed homes go back into foreclosure, it would up the inventory and screw with market prices....


Which would could make the housing prices go from $130,000 (average in Las Vegas) down to like $90,000... right?  Or is that wrong?

I'm obviously not an economist.

Oh, and this reminds me of that one woman... "I don't gots to pay my mortgage!"

[AllosaursRus]

If an AD military person or a Vet - who qualifies - purchases a home with a VA loan....they may not rent the property to another individual.

It hasn't changed! This is where a whole lotta people got in trouble! Most loans you get from the Feds, state exactly that! And there's plenty of "slip and falls" to hold them to it when a renter falls behind!

[debk]

It hasn't changed! This is where a whole lotta people got in trouble! Most loans you get from the Feds, state exactly that! And there's plenty of "slip and falls" to hold them to it when a renter falls behind!

FHA loans allow the homeowner to rent the property after 3 years, and it's been that way for a long time.

I had thought that VA may allow AD personnel to rent out their homes these days, if they are sent overseas. They should be allowed to....

[debk]

I haven't read this whole thread yet, so if I address something already covered, please ignore.

If these banks stop the foreclosures for "investigating", that would take homes off the market, correct?  And that would then make the housing market seem to "improve"... but then once those foreclosed homes go back into foreclosure, it would up the inventory and screw with market prices....


Which would could make the housing prices go from $130,000 (average in Las Vegas) down to like $90,000... right?  Or is that wrong?

I'm obviously not an economist.

Oh, and this reminds me of that one woman... "I don't gots to pay my mortgage!"

Not exactly.

A house that has already been foreclosed....stays foreclosed.

What they are doing is stopping any future foreclosures....obviously, only on the homes that have mortgages with these three companies.

However, there's still Citi and Wells Fargo, which are HUGE mortgage holders, then there are many more that are smaller, relatively speaking....

I believe they may also be halting the marketing of foreclosure properties. In other words, any house currently on the market, that was previously foreclosed, is coming off of the market, until they ascertain that the foreclosure was accurately and legally done.

It's hard to say, what exactly this will do to housing prices.

It should decrease the overall number of foreclosure resales on the market, which will definitely help any fair market seller. IF and that's a very big IF....there are buyers out there who can get mortgages and who can afford one.

If there are 30 houses on the market at $130,000 - but only 5 buyers out there who are qualified to purchase a $130,000 house, there are still 25 houses that the sellers will either have to hope they can sell the house at the current list price within a reasonable amount of time, or they have enough equity in the house to continue to drop the price until someone buys it. Even so, out of those 25 who are trying to figure out how to sell their home...if the seller has lost their job, or has a lower paying job - or something that prevents the seller from being able to make the payments on time every month ....it really won't make a difference if the lender temporarily halts foreclosures or not....ultimately, the seller will still lose their home...simply because - for whatever reason - they are no longer able to make the loan payment.

Unless the lender works with the homeowner to establish new loan terms, eventually the houses will still end up in foreclosure.

The bank/lenders are halting the process ONLY to make sure that the bank has the legal right to foreclose on the property. It will take them some time to sift through all the thousands upon thousands of properties that are in the foreclosure process, and those that have already been foreclosed and are now on the market with the bank as the seller.

As soon as the lender establishes a clear line from the ownership of the mortgage paper (not the ownership of the house itself ) to the "endangered" property itself....the lender will still foreclose if the homeowner is still unable to make the monthly payment.

[Wretched Excess]

I have to say, debk, that I have learned more about mortgages and real estate in this thread in the past two days than I thought was learnable.

but, in macroeconomic terms, the forestalling of foreclosures is a bad thing.

as an economy, we need to move these bad loans off the books.

do we agree on that?

[formerlurker]

Too little too late for too many people that have already lost their homes.


The banks should have been working with people 2-3 years ago, and now they wouldn't be in some of the mess they(the banks) are in.  

I did a report on a house yesterday afternoon.

House is on the market for $374,900. It's priced at $149/SF. They bought it mid-2008 for $362,000. This is the second time since they bought it, that it's been on the market, it was priced $20,000 higher the last time it was on the market, over a year ago. It's been on the market, this time, for 187 days.

House next door is also on the market (with the same agent - hmmmm) for the same price per square foot( list price is $389,000), however the next door neighbors' 1400SF finished basement is not incl in that price/SF because the report does not figure it that way, though in our market we do count it. It's been on the market 344 days, originally starting at $398,000.

House across the street is on the market for  $395,000 at $132/SF. It's been on the market for 339 days, originally listed at $399,000.

One other house in subdivision is also on the market for $419,900, $129/SF and has only been listed for 50 days.

The only recent house to sell in the subdivision was back in January.  It was listed originally for $387,900, sold in 81 days at $364,000, which was $130/SF.

These houses are in a nice planned development with a pool and the yards are maintained by the HOA. Nice houses, 2500-4500SF, lots of hardwood flrs, granite or corian counters, custom cabinets, nice nice nice houses. ( do I sound like a realtor or what?   )

I also comped it with a house in the subdivision across the road, and one in another subdivision about 3/4's of a mile down the road.

The best I could do on pricing it for average time on the market 120-180 days....was $338,000!!! Their original mortgage amount was $332,000 - I don't have access to info that tells me the current balance after paying for 2.5 years.

After paying a realtor's commission...the homeowners may have enough to pay off their mortgage balance...provided they get about $360,000 sales price, they should have enough for closing and commission unless there are other fees. That's still at $143/SF.

If I was a buyer's agent, writing up an offer on this house....I pull past sales in the subdivision. If the last one sold  @$130/SF...that has everything and more that the subject house(one I did the report on ) does ...why would I even attempt to counsel my buyers to pay $143/SF for a similar house? Particularly in a buyer's market? And when a buyer could buy another house, of comparable quality - in the same area, same schools, etc...for around $100/SF?


Banks and lenders are going to HAVE to work with homeowners to make monthly payments more affordable, by reducing interest rates, or allowing the homeowner to pay interest only for a specific time period - minimum of 24 months, or reducing monthly payments and making up the missed $$$'s by adding on additional months to the life of the loan(30 yr note converted to 40yr note). They DO NOT have to reduce the value of the property or the amount of the mortgage!!! All the foreclosures are doing are reducing the values of everyones' property in an area and the banks are writing off the loss (amount of mortgage to amount of money obtained in the sale of the foreclosed property) monies on their bottom line to the IRS!!!!

If the banks/lenders don't do something logical for the housing industry....and do it soon...we, as a country, are not going to come out of this recession/depression!!!!  

I'm not talking about "free passes"....I'm talking about a reduction in monthly mortgage payments - not the mortgage amount itself - so the homeowner can stay in the house, or sell it, and prevent another foreclosure  coming on the market and affecting the value of everyone else's house in the neighborhood.



 

4,500 sq ft house for under $400k?   damn that is cheap.   The housing market in MA is funny, some areas you would never know there is a housing crisis -- houses are selling.   Others (like Worcester, Boston), you can see the houses just sit with lots of foreclosures.