The Conservative Cave
Current Events => Breaking News => Topic started by: NHSparky on October 08, 2010, 10:35:40 AM
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Bank of America halts foreclosures in all states
By Charles Riley, staff reporterOctober 8, 2010: 11:25 AM ET
LINK (http://money.cnn.com/2010/10/08/real_estate/bank_america_50/)
(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."
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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.
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Yeah. Remedy may be worse than the disease.
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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!
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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
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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.
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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. :censored:
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? :lmao: )
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.
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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.
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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. :censored: :censored: 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.
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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. :censored:
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? :lmao: )
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.
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Hmmm this will stop until after the election. Free house. :censored: :censored: :censored: :censored: :censored: :censored:
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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.
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These two graphs show what I was talkin' about..........
(http://mysite.verizon.net/vzeqrguz/housingbubble/united_states.png)
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.
(http://mysite.verizon.net/vzeqrguz/housingbubble/us_home_prices_vs_rents.png)
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 (http://mysite.verizon.net/vzeqrguz/housingbubble/)
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!
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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. :censored: :censored: 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.
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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.
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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!! :cheersmate: :cheersmate:
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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?
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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
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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.
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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. :(
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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!"
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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!
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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.... :(
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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.
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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?
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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. :censored:
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? :lmao: )
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.
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I've just started the pre-approval process for a VA loan, for a townhouse. It's a little complex/develpoment of them about a mile from where we live now. There's two foreclosures in that development that I know of, plus a couple of other units for sale there. Reading the thread has helped me a tad; I really need to do more homework on this. But, what it does do is piss me off, because we followed the rules and didn't do something stupid a couple of years ago. Sure, my wife would have been happy initially, because we would have been near her parents; but the stress that the home would probably have put on our marriage would have been tough to overcome.
But, we didn't do something stupid, and now, when we can do something, we get it yanked out from under us because whole boatloads of idiots did do spmething stupid, and they're being rewarded for it! :censored: :banghead:
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This doesn't just throw the chain-of-custody of foreclosures into question, pretty much ANY home that wasn't purchased as new construction or financed by a credit union or other entity that services its own mortgages is called into question now.
Then again, what should we have expected when the government held a gun to the heads of the banks and said effectively, "You WILL make these bad loans to people who don't qualify, or ELSE!"
Thanks, Billy Jeff!
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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?
I'm like you Wretched, I learned a lot from this thread alone. I do agree that forestalling these loans is a bad thing.
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History is on our side. Every time you put a certain class of people above the mainstream, it never turns out helping anyone!
Yet, DUmbasscRats, will keep doin' the same thing over and over, expecting a different outcome!
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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?
I do think that it is important to get these bad loans off the market, but I also think it is important for the banks to exercise due diligence and ensure that they aren't foreclosing on homes where the loan is NOT in default. It is my understanding that this is part of the reason that BA put their program on hold.
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I think it is a good idea for these banks to be looking at their processes, just not sure what they are doing is the best way to go about it. A friend of mine just went through a complete mess with her mortgage lender, which really says to me that the process at her bank (not sure which one) is seriously messed up. She missed one mortgage payment, in June, due to paying medical bills (a whole different conversation there), but made her payments on time ever since. Two weeks ago, she got a notice that the bank was foreclosing on the property because she "is more than 90 late on the mortgage payment due June 01, 2010." It has always been my understanding that payments are applied to the oldest payment due, but apparently that is not the case with some banks/mortgage lenders.
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I do think that it is important to get these bad loans off the market, but I also think it is important for the banks to exercise due diligence and ensure that they aren't foreclosing on homes where the loan is NOT in default. It is my understanding that this is part of the reason that BA put their program on hold.
Okay...
And when the foreclosure process is found to be legit and we have to put all those houses back onto the market... then what?
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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?
Yes and no as far as agreeing on getting "bad loans" off of the books.
There's two ways to look at those bad loans.
#1 is the "party line -government way". Government gave out loans to people who couldn't afford them....ever. Ok, yes there are those loans still out there, but the majority of them have already been foreclosed on. I've been doing foreclosures since early in the 2000's and I was doing a lot of the ones who never should have gotten a loan in 2005-2007. Some are still straggling in....not so much because people couldn't afford them at the time, but they can't now because of job loss - many of those loans were given to people who weren't much above minimum wage type jobs (not necessarily hourly, but salaried) and those people were in jobs where they have either been laid off or the company has shut down due to the general economy.
#2 is today's reality of those so called bad loans. The Obama government wants the public to believe that its so-called "bad loans" that are bringing the housing industry to it's knees and it isn't. It's all those people who have lost one or both incomes, or have had to take jobs at much lower salaries....or they were small business owners who have lost their business. Or they are in large businesses that have either folded or closed the business in a specific area.
Example. My sister in law lost her job at Allstate back in August after 14 yrs....and was making well into 6 figures. My brother called me Friday and told me his company had been sold. He's pretty sure that he has a job for the next 3 months....he's well into 6 figures also...does not know if he will after the sale goes through, or if his customers will stay with the new company. Some have already said that they won't, some have said they would give the new company a chance. They bought a $750,000+ house in the Chicago 'burbs a year ago, and put $250,000 down. They just refinanced and besides lowering their interest rate about 3%, they put another $50K down. They certainly were not a "bad risk" by any stretch of the imagination a year ago when they got their loan!! Fortunately, my brother is tight as a tick, and they purchased the house based on his income alone - did not purchase the max that their lender qualified them for , and stashed most of hers, because he was worried about losing his job (he's in a tech industry), so they have money to make payments for quite some time. But they are NOT the norm!
The "norm" is that most homeowners, if they are a two-income family, purchase their homes based on both incomes - particularly if they are through having children. Whether or not, buyers use one or both incomes to qualify, most will purchase on or near the max amount a lender qualifies them for, unless the max is an outrageous amount of money (for the area- here, spending $1M when $750K is a fabulous house!!) Most people are going to buy what a lender tells them they can afford.
Those of you that are homeowners, did you buy in the price range, you lender qualified you for? Or did you spend more? Or did you say, not going to spend that much money and spent 10's of thousands less? If you bought in your "qualified" price range, does that mean you were given a "bad" loan?
If you lost your job tomorrow....God forbid, and I pray that it doesn't happen to any of you.....could you still make your house payment? Or if you bought your house by including your spouse's income, could you make it with just one of the incomes? Even if it was the smaller income that was lost? What about the larger income?
If you answer no to any of the questions in the last paragraph....YOU could become a "deadbeat" homeowner!!
What if you - or an immediate family member, even a parent - became ill or in an accident and were on disability for 6 months? Could you make your house payment?
What if you and your spouse got a divorce? Would your house have to be sold in the settlement? Could the house payment be paid until it sold?
What if you got a job transfer? Would your company buy your house for you - either the old one so you could buy a new one, or the new one until your old one sold? Could you make 2 house payments ( or a house payment and a rent payment) until your house sold?
If you could not make your house payment under any of those circumstances....congrats - you just became a "deadbeat" homeowner!!!
Which is just ridiculous!! NONE of the scenarios I gave would make anyone of us a "deadbeat" homeowner!!!
But it's exactly what the Obama admin is putting out there!
God forbid, that the Obama admin would publicly admit that homes are going on the foreclosure block because homeowners are losing their jobs!!!
Or because there are too damn many houses on the market for a seller to sell their home - in stellar condition or not - at a reasonable fair market value and be able to pay back the existing mortgage.
Or because there are 11 million homes on the market across the country, that are foreclosed homes that are priced at least 80% or below the going fair market rate, for the area within a mile or two of the home's specific location!!! And are selling for thousands upon thousands of dollars less than any fair market priced home within that mile or two radius. Which in turn, devalues almost if not every, house in that same radius.
It's real easy to say that it's all the fault of those "deadbeats" out there who didn't pay their mortgage and lost their house, that are causing the housing/mortgage/banking problems that the country is experiencing.
It's real easy to say that "I'm making MY payment, why can't everybody else?"
It's easy, IF .... one's job, or whatever source that pays the mortgage payment, is still present and the circumstances that allowed the purchase of said home, have not changed enough through this economic nightmare, to alter those circumstances.
So far. Today.
Tomorrow? Who knows.
I'm not sure that anyone is completely "safe" these days.
("you" does not refer to any one specific person....please do not take it personally as it isn't meant that way. )
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Okay...
And when the foreclosure process is found to be legit and we have to put all those houses back onto the market... then what?
Good question. I don't work in the housing/mortgage arena and never have. I freely admit that I am ignorant on the various ins and outs of the arena.
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Outstanding post debk.
H5.
Those of you that are homeowners, did you buy in the price range, you lender qualified you for? Or did you spend more? Or did you say, not going to spend that much money and spent 10's of thousands less? If you bought in your "qualified" price range, does that mean you were given a "bad" loan?
We had our current home built for just slightly less than what we qualified for. We used both of our incomes when we applied for the loan.
If you lost your job tomorrow....God forbid, and I pray that it doesn't happen to any of you.....could you still make your house payment? Or if you bought your house by including your spouse's income, could you make it with just one of the incomes? Even if it was the smaller income that was lost? What about the larger income?
When I got laid off in Jan of 09, we were in the one-income situation. Mine was the larger income. I was getting unemployment insurance, but it was a hell of a lot less than my salary. We kept the bills paid, but it wasn't easy.
I was unemployed for about 10 months. I got a short term contract job that lasted 5 months that gave us a little breathing room (I socked as much of that $ into savings as I could). I was then unemployed for another 5 months. We still kept the bills paid, but were getting to the point that we would soon have to put the house up for sale.
If you answer no to any of the questions in the last paragraph....YOU could become a "deadbeat" homeowner!!
I came closer than I like to think about.
What if you - or an immediate family member, even a parent - became ill or in an accident and were on disability for 6 months? Could you make your house payment?
For 6 months? Yes. But not much past that.
What if you and your spouse got a divorce? Would your house have to be sold in the settlement? Could the house payment be paid until it sold?
Probably. But that would depend on how long it took to sell.
What if you got a job transfer? Would your company buy your house for you - either the old one so you could buy a new one, or the new one until your old one sold? Could you make 2 house payments ( or a house payment and a rent payment) until your house sold?
I'd be pretty much screwed right now if forced into a job transfer. Might be able to keep the existing mortage up to date for 4-6 months, but it would be really tough to do.
I work in the telecommunications arena and have for over 25 years. I saw the writing on the wall several years ago and busted my ass to become debt free except the mortgage. Once I had my credit cards and what-not paid off, I started putting as much money in my savings account as possible.
Having that cash buffer was the only thing that saved our asses during my period of unemployment.
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Outstanding post debk.
H5.
I just read her post and though the same thing. Nice write up Deb! :hi5:
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Good question. I don't work in the housing/mortgage arena and never have. I freely admit that I am ignorant on the various ins and outs of the arena.
I'm not an expert in the housing market. We can leave that to debk. lol
Halting all foreclosures and taking them off the market for now makes me nervous. Yeah, it takes the bad loans (or whatever you want to call them) off the market, but it's not going to end well when all of those houses are legitimately in foreclosure and have to go back on the market to be sold to me or you.
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Both of the extremes piss me off - banks that pull the trigger on foreclosure when both parties would be much better served by renegotiation based on current real circumstances on one hand, and home-occupants who decide the bill they can most easily blow off is the mortgage rather than sacrifice their amenities like expensive cars or credit card balances. I do have to say that in most markets a seller who really, honestly thinks his home has gone up in value by six grand in the past year and a half should put down the crack pipe.
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Deb can put in her analogy of this, but, how 'bout the banks regenotiate the "worth" of the property since the total collapse in the market in some areas, and go from there.
I realize someone, more then likely the bank, is goin' to lose "some" money on the loan. Wouldn't that be better than foreclosing, having the homeowner trash the house because he thinks he got screwed and the bank sellin' it for less anyway? Usually, much less!!!
Isn't that what BamBam gave them the money for, in the first place?