Foreclosures Reach Record High in 3rd Quarter 2009
According to this CNNMoney article, Foreclosures: 'Worst three months of all time', "Despite signs of broader economic recovery, number of foreclosure filings hit a record high in the third quarter - a sign the plague is still spreading." The loan modification and foreclosure prevention programs pushed by the government are just not working. The 3rd quarter of 2009 saw foreclosures hit a record high. The article quotes Rick Sharga, spokesman for RealtyTrac, as saying July 2009 through September 2009 "were the worst three months of all time. The fastest growing area is in the 180 days late-plus category, the most seriously delinquent borrowers. It's going to be a lingering problem. It's hard to envision [the banks] putting millions of properties up for sale and cratering prices. Recovery will be slow and gradual. I don't see home prices getting much better until 2013."
According to the article, "During that time, 937,840 homes received a foreclosure letter -- whether a default notice, auction notice or bank repossession, the RealtyTrac report said. That means one in every 136 U.S. homes were in foreclosure, which is a 5% increase from the second quarter and a 23% jump over the third quarter of 2008. Nevada continued to be the worst-hit state with one filing for every 23 households. But even tranquil Vermont, where the foreclosure crisis has barely brushed the housing market, saw foreclosure filings jump nearly 170% compared with the third quarter of 2008. Still, that resulted in just one filing for every 5,023 households in the state -- the best record in the country. The RealtyTrac report also unveiled the results for September, and it found that there was slight relief from foreclosure filings. Last month, notices totaled 343,638, down 4% compared with August. Unfortunately, that total accounts for 87,821 homes that were repossessed by lenders. That deluge contributed significantly to the quarter's record 237,052 repossessions, a 21% jump from the previous three months. So far this year lenders have taken back 623,852 homes."
The article quotes James Saccacio, RealtyTrac's CEO, as saying "REO activity increased from the previous quarter in all but two states and the District of Columbia, indicating that lenders may be starting to work through some of the pent-up foreclosure inventory caused by legislative delays, loan-modification efforts and high volumes of distressed properties."
The article raises concern over these record foreclosure numbers occurring despite all the government efforts to prevent foreclosures and lenders voluntarily not foreclosing on many homeowners who are many months delinquent on their mortgage payments. In short the train is coming and there is nothing that can stop it.
The article mentions that many lenders are starting the foreclosure process, but just not following through. The article quotes Jim Rokakis, treasurer for Cuyahoga County, Ohio, which includes Cleveland, as saying the lenders will "even set the date for the sheriff's sale, but they don't file the final papers. They hold it in abeyance and let the residents stay in the house." I have seen this many times. It is insane. In many cases the homeowners cannot take the stress of the whole thing so they want the foreclosure to end, but the lenders just do nothing. That is why many homeowners simply abandon their homes.
The article quotes a study by the Chicago Booth School of Business and the Kellogg School of Management that "determined that when home price declines drop home values 10% below the mortgage balances, people start to give up their homes. When "negative equity" approaches 50%, 17% of households default, even when they can still afford their mortgage payments."
The article states "the RealtyTrac statistics may understate the depth of the foreclosure mess because lender and government actions have delayed many filings. As a result, some delinquencies have not been counted on the foreclosure tallies. That means the crisis may not end quickly." As I have been saying for a while now, this foreclosure crisis is far from over because it was caused by a housing market that was built on debt, not peoples' incomes. Until prices fall back down, the market will continue to be poor.
If you are a homeowner in Middle Tennessee who cannot pay your mortgage, or your home is already in foreclosure, please contact me to discuss your options including a loan modification or a short sale. I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I serve real estate owners, homeowners and investment property owners in Rutherford County TN, Williamson County TN, Davidson County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN and Belle Meade TN.
If you need to sell your home fast via a short sale, you can request help on my website at Get Help and Assistance from a Middle Tennessee Short Sale and Foreclosure REALTOR and Expert.
Friday, October 16, 2009
Citigroup Getting Hurt By Mortgage Defaults and Consumer Loan Delinquencies
Citigroup Getting Hurt By Mortgage Defaults and Consumer Loan Delinquencies
According to this Yahoo! News article, Citi results weighed down by failed loans, Citigroup (aka CitiBank) is being hit very hard by high rates of default on mortgages and consumer loans. The article states, Citigroup "reported a $101 million profit before accounting for $288 million in preferred stock dividends and the debt exchange offer that gave the government a 34 percent stake in the bank. Including those items, the New York-based bank reported a $3.24 billion loss. Citigroup, one of the hardest hit during the credit crisis and recession, said loan losses during the quarter came to $8 billion, down $386 million from nearly $8.4 billion in the second quarter, but a sign that many consumers continue to be overwhelmed.
Citigroup's results are a measure not only of its health after it lost nearly $19 billion in 2008 and needed a $45 billion government bailout, but also the economy's, since the bank caters to consumers."
The article quotes Bart Narter, a senior vice president at consulting firm Celent, as saying "The bank is not making money, they are losing money in credit cards and mortgages, and it's dragging down the entire bank." The article also quotes Nancy Atkinson, senior analyst at Boston-based research firm Aite Group, as saying that Citigroup "still has a number of quarters that are going to be challenging. They made very bad bets on mortgages and consumer lending. They were clearly a leader in the consumer card space, and as a result are suffering now."
According to the article, the problems at Citigroup are similar to other large banks as a result of the poor economy and high unemployment rate. The article states "more customers stop repaying loans as the economy falters and unemployment rises. Credit card defaults and mortgage losses are likely to continue to climb."
If you are a homeowner in Middle Tennessee who cannot pay your mortgage payments, or are in foreclosure, please contact me to obtain help with a loan modification. If you owe more than your home is currently worth, we can discuss a short sale. I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I serve real estate owners, homeowners and investment property owners in Rutherford County TN, Williamson County TN, Davidson County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN and Belle Meade TN.
If you need help or assistance with a loan modification, or need to sell your home via a short sale, you can request help on my website at Get Help and Assistance from a Middle Tennessee Short Sale and Foreclosure REALTOR and Expert.
According to this Yahoo! News article, Citi results weighed down by failed loans, Citigroup (aka CitiBank) is being hit very hard by high rates of default on mortgages and consumer loans. The article states, Citigroup "reported a $101 million profit before accounting for $288 million in preferred stock dividends and the debt exchange offer that gave the government a 34 percent stake in the bank. Including those items, the New York-based bank reported a $3.24 billion loss. Citigroup, one of the hardest hit during the credit crisis and recession, said loan losses during the quarter came to $8 billion, down $386 million from nearly $8.4 billion in the second quarter, but a sign that many consumers continue to be overwhelmed.
Citigroup's results are a measure not only of its health after it lost nearly $19 billion in 2008 and needed a $45 billion government bailout, but also the economy's, since the bank caters to consumers."
The article quotes Bart Narter, a senior vice president at consulting firm Celent, as saying "The bank is not making money, they are losing money in credit cards and mortgages, and it's dragging down the entire bank." The article also quotes Nancy Atkinson, senior analyst at Boston-based research firm Aite Group, as saying that Citigroup "still has a number of quarters that are going to be challenging. They made very bad bets on mortgages and consumer lending. They were clearly a leader in the consumer card space, and as a result are suffering now."
According to the article, the problems at Citigroup are similar to other large banks as a result of the poor economy and high unemployment rate. The article states "more customers stop repaying loans as the economy falters and unemployment rises. Credit card defaults and mortgage losses are likely to continue to climb."
If you are a homeowner in Middle Tennessee who cannot pay your mortgage payments, or are in foreclosure, please contact me to obtain help with a loan modification. If you owe more than your home is currently worth, we can discuss a short sale. I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I serve real estate owners, homeowners and investment property owners in Rutherford County TN, Williamson County TN, Davidson County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN and Belle Meade TN.
If you need help or assistance with a loan modification, or need to sell your home via a short sale, you can request help on my website at Get Help and Assistance from a Middle Tennessee Short Sale and Foreclosure REALTOR and Expert.
Thursday, October 15, 2009
Legal Loophole May Help Homeowners Delay or Stop a Foreclosure
Legal Loophole May Help Homeowners Delay or Stop a Foreclosure
According to this RISMedia article, Op-Ed: 60 Million Mortgages May Have Fatal Flaws, issues with the way mortgages were sold in the secondary market and the way the ways they were recorded in the local county offices may prevent many mortgage companies (or mortgage servicing companies) from foreclosing on delinquent homeowners. The problem apparently is due to a company called MERS (Mortgage Electronic Registration Systems, Inc.) which is a company that records the mortgages against the properties in the local county offices where the properties are located. While that is normal procedure, the problem is that MERS is basically an exchange where mortgage lenders can buy and sell mortgage loans without having to re-record the ownership of the mortgage notes. In other words, although MERS shows up as the mortgage lien holder on the public records, MERS does not actually own the mortgage loans. Since it is established case law that the mortgage loan holder (i.e. the note holder) must be identified and must produce the mortgage note (the mortgage note and the mortgage lien are 2 separate documents - the note is the borrower's promise to pay and the mortgage is the document that pledges the property as collateral in the event that the borrower does not pay), MERS, due to not being the actual note owner, cannot foreclose. The other problem is that the actual note holder does not own the mortgage lien since MERS owns that. The obvious solution to this problem is for the actual note owner to have the mortgage assigned to them by MERS (and pay the normal recording fees, etc.) or to just join in the foreclosure action and then proceed with the foreclosure. The problem is that MERS seems unable to find many of the actual notes which they hold on behalf of the note owners. There have already been court rulings in the Kansas Supreme Court and the U.S. Bankruptcy Court for the District of Nevada in which the judges ruled that MERS had no legal standing to forecloses since they did not own the note and could not produce the actual note showing who the note owner is. This could become a huge problem for mortgage lenders if more homeowners and attorneys become aware of this legal snafu.
According to the article, "As a registered security, the Note is a negotiable instrument, like money or a cashier’s check, and under securities law that Note must be given to the investor. In this case, mortgage backed securities, (MBS) were bundled together in a pool and shipped to…well, we don’t really know. One of the impediments to an MBS is the need to file assignments for the beneficiaries in each county each time the mortgage is resold. And apparently, no one holds them for very long because most have been passed around several times. In order to avoid the logistical nightmare of trying to maintain a public chain of title, the biggest lenders joined MERS, Mortgage Electronic Registration Systems, Inc. MERS was created with the sole intent of evading the recording fees due to the county in which the security is located. In so doing, in my opinion, they also destroyed the age-old practice of making a public record of information concerning real property in general, and legal interest specifically. The chain of title is a vital record produced to resolve many a dispute. Now, that’s gone. I believe, erased simply so they themselves, MERS, could siphon off the recording fees for themselves. They sold their business model to lenders as a better way to track mortgages that were being sold and resold all over the world. But, as there often is with a BIG IDEA, there were also unintended consequences. Only now are they coming to light. Until MERS was challenged in a foreclosure proceeding, no one had taken a look at the law. The law, according to a Nevada Judge, is that for purposes of foreclosure, both the Note and the Deed of Trust must be assigned. When the Note is split from the Deed of Trust, the Note becomes unsecured. A person holding only a Note lacks the power to foreclose because it lacks the security. MERS lost track of the Notes. In some cases, according to my research, they deliberately destroyed them."
The article states that in reviewing the judicial rulings the author has concluded the following:
If you are a homeowner in Middle Tennessee and your home is in foreclosure you should contact a real estate attorney and discuss the legal loophole described above to see if it can delay or even stop the foreclosure action against you. If that is not successful, or only helps you delay the foreclosure process you should contact me to discuss a short sale if (1) you have lost your job or have seen your income decline, and (2) your home is worth less than your mortgage balance. I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I serve real estate owners, homeowners and investment property owners in Rutherford County TN, Williamson County TN, Davidson County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN and Belle Meade TN.
If you need to sell your home fast via a short sale you can request help on my website at Get Help and Assistance from a Middle Tennessee Short Sale and Foreclosure REALTOR and Expert.
According to this RISMedia article, Op-Ed: 60 Million Mortgages May Have Fatal Flaws, issues with the way mortgages were sold in the secondary market and the way the ways they were recorded in the local county offices may prevent many mortgage companies (or mortgage servicing companies) from foreclosing on delinquent homeowners. The problem apparently is due to a company called MERS (Mortgage Electronic Registration Systems, Inc.) which is a company that records the mortgages against the properties in the local county offices where the properties are located. While that is normal procedure, the problem is that MERS is basically an exchange where mortgage lenders can buy and sell mortgage loans without having to re-record the ownership of the mortgage notes. In other words, although MERS shows up as the mortgage lien holder on the public records, MERS does not actually own the mortgage loans. Since it is established case law that the mortgage loan holder (i.e. the note holder) must be identified and must produce the mortgage note (the mortgage note and the mortgage lien are 2 separate documents - the note is the borrower's promise to pay and the mortgage is the document that pledges the property as collateral in the event that the borrower does not pay), MERS, due to not being the actual note owner, cannot foreclose. The other problem is that the actual note holder does not own the mortgage lien since MERS owns that. The obvious solution to this problem is for the actual note owner to have the mortgage assigned to them by MERS (and pay the normal recording fees, etc.) or to just join in the foreclosure action and then proceed with the foreclosure. The problem is that MERS seems unable to find many of the actual notes which they hold on behalf of the note owners. There have already been court rulings in the Kansas Supreme Court and the U.S. Bankruptcy Court for the District of Nevada in which the judges ruled that MERS had no legal standing to forecloses since they did not own the note and could not produce the actual note showing who the note owner is. This could become a huge problem for mortgage lenders if more homeowners and attorneys become aware of this legal snafu.
According to the article, "As a registered security, the Note is a negotiable instrument, like money or a cashier’s check, and under securities law that Note must be given to the investor. In this case, mortgage backed securities, (MBS) were bundled together in a pool and shipped to…well, we don’t really know. One of the impediments to an MBS is the need to file assignments for the beneficiaries in each county each time the mortgage is resold. And apparently, no one holds them for very long because most have been passed around several times. In order to avoid the logistical nightmare of trying to maintain a public chain of title, the biggest lenders joined MERS, Mortgage Electronic Registration Systems, Inc. MERS was created with the sole intent of evading the recording fees due to the county in which the security is located. In so doing, in my opinion, they also destroyed the age-old practice of making a public record of information concerning real property in general, and legal interest specifically. The chain of title is a vital record produced to resolve many a dispute. Now, that’s gone. I believe, erased simply so they themselves, MERS, could siphon off the recording fees for themselves. They sold their business model to lenders as a better way to track mortgages that were being sold and resold all over the world. But, as there often is with a BIG IDEA, there were also unintended consequences. Only now are they coming to light. Until MERS was challenged in a foreclosure proceeding, no one had taken a look at the law. The law, according to a Nevada Judge, is that for purposes of foreclosure, both the Note and the Deed of Trust must be assigned. When the Note is split from the Deed of Trust, the Note becomes unsecured. A person holding only a Note lacks the power to foreclose because it lacks the security. MERS lost track of the Notes. In some cases, according to my research, they deliberately destroyed them."
The article states that in reviewing the judicial rulings the author has concluded the following:
- MERS is not the beneficiary of the Notes and has no skin in the game. It did not lend any money, collect any payments or do anything more than track the sale of the securities.
- Judicial procedure requires that parties identify themselves and prove their standing.
- Splitting the Note and Trust Deed leaves no party with standing to foreclose. The true holder of the Note, the security, paid the lender so the lender is covered. The true holder of the Note was insured by AIG so they are covered. AIG and the banks were bailed out by taxpayers. So, unless the American tax payer can produce a “blue-ink” original Note, no one has standing to foreclose.
- Allowing a foreclosure to proceed without the original Note places the homeowner in double jeopardy. If the original Note were to surface, the holder of the Note would be entitled to payment, but from whom? The borrower is still on the hook.
- MERS currently holds 50 to 60 million loans so this is no small matter. And, just because they have lost repeatedly doesn’t mean they will give up. They will keep right on foreclosing in hopes that the homeowner won’t fight back and, in most cases, they won’t be stopped.
If you are a homeowner in Middle Tennessee and your home is in foreclosure you should contact a real estate attorney and discuss the legal loophole described above to see if it can delay or even stop the foreclosure action against you. If that is not successful, or only helps you delay the foreclosure process you should contact me to discuss a short sale if (1) you have lost your job or have seen your income decline, and (2) your home is worth less than your mortgage balance. I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I serve real estate owners, homeowners and investment property owners in Rutherford County TN, Williamson County TN, Davidson County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN and Belle Meade TN.
If you need to sell your home fast via a short sale you can request help on my website at Get Help and Assistance from a Middle Tennessee Short Sale and Foreclosure REALTOR and Expert.
Middle Tennessee Foreclosure Prevention and Loan Modification Help and Assistance
Middle Tennessee Foreclosure Prevention and Loan Modification Help and Assistance
According to this Tennessean article, Loan modification can forestall foreclosure, you can obtain help with a loan modification from your local United Way office through their affiliations with local agencies. The article conveys the story of one Franklin Tennessee (Williamson County TN) family went through difficult financial times after a job loss. It is truly sad to see so many hard working people suffer due to the poor job market. In this case, the family depicted in the article eventually lost their home when the bank foreclosed on them.
If you are a homeowner in Middle Tennessee who has lost your job, have seen your income decline or are in foreclosure, please contact me to obtain free help and assistance on how to stop the foreclosure proceedings. You should also contact a real estate attorney. If your home is worth less than your mortgage balance, I can help you with a short sale. I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I serve real estate owners, homeowners and investment property owners in Rutherford County TN, Williamson County TN, Davidson County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN and Belle Meade TN.
If you need to sell your home fast via a short sale you can my request help on my website at Get Help and Assistance from a Middle Tennessee Short Sale and Foreclosure REALTOR and Expert.
According to this Tennessean article, Loan modification can forestall foreclosure, you can obtain help with a loan modification from your local United Way office through their affiliations with local agencies. The article conveys the story of one Franklin Tennessee (Williamson County TN) family went through difficult financial times after a job loss. It is truly sad to see so many hard working people suffer due to the poor job market. In this case, the family depicted in the article eventually lost their home when the bank foreclosed on them.
If you are a homeowner in Middle Tennessee who has lost your job, have seen your income decline or are in foreclosure, please contact me to obtain free help and assistance on how to stop the foreclosure proceedings. You should also contact a real estate attorney. If your home is worth less than your mortgage balance, I can help you with a short sale. I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I serve real estate owners, homeowners and investment property owners in Rutherford County TN, Williamson County TN, Davidson County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN and Belle Meade TN.
If you need to sell your home fast via a short sale you can my request help on my website at Get Help and Assistance from a Middle Tennessee Short Sale and Foreclosure REALTOR and Expert.
Wednesday, October 14, 2009
Bank of America Increases Loan Modifications
Bank of America Increases Loan Modifications
According to this CNBC article, Bank of America Ups Its Foreclosure Prevention Efforts, Bank of America "increased the number of customers with a trial mortgage modification by 62% in September to 95,000" and "increased the total number of modification offers under the Home Affordable Modification Program to 156,000 last month, versus 125,338 in August" which is an increase of nearly 25%.
According to the article, "Data on success rates at this point is limited and in a way lagging. The program is barely six months old and its terms require that a modified loan stay current for three months to be considered a success." Personally, I do not think being current for 3 months is successful at all.
The article quotes a Bank of America document as saying "With sustained high unemployment, even the most aggressive loan modification program will not help where there is no income." In my opinion, this is the real issue: unemployment.
The article states "The government program also includes a refinancing component, which is meant to decrease the number of potential defaults. BofA says that as of September it has taken more than 144,000 applications in that category and funded some 60 percent of them. According to August Treasury data, the bank has the largest number of loans that are 60 days or more past due (836,000)—a key benchmark of delinquency and foreclosure barometer. Foreclosures continue to run at a record rate, despite a multitude of government and private programs. The problem has spread well beyond its original flash point, the subprime sector. The program is designed to help homeowners already in trouble (the loans have become delinquent) and those who may be heeded for it. Loan services receive a fee of $1,000 per loan modification. In addition, they receive a $1000 a year for three years if the modified loan stays current. The program also covers underwater borrowers. The loan-to-value ratio, which started out at 105 percent, is now 125 percent, meaning a homeowner with a $250,000 loan on a property valued at $200,000 is eligible for refinancing aid."
There are a few reasons why these increased loan modifications will still fail:
If you need to sell your home fast via a short sale you can my request help on my website at Get Help and Assistance from a Middle Tennessee Short Sale and Foreclosure Expert and REALTOR.
According to this CNBC article, Bank of America Ups Its Foreclosure Prevention Efforts, Bank of America "increased the number of customers with a trial mortgage modification by 62% in September to 95,000" and "increased the total number of modification offers under the Home Affordable Modification Program to 156,000 last month, versus 125,338 in August" which is an increase of nearly 25%.
According to the article, "Data on success rates at this point is limited and in a way lagging. The program is barely six months old and its terms require that a modified loan stay current for three months to be considered a success." Personally, I do not think being current for 3 months is successful at all.
The article quotes a Bank of America document as saying "With sustained high unemployment, even the most aggressive loan modification program will not help where there is no income." In my opinion, this is the real issue: unemployment.
The article states "The government program also includes a refinancing component, which is meant to decrease the number of potential defaults. BofA says that as of September it has taken more than 144,000 applications in that category and funded some 60 percent of them. According to August Treasury data, the bank has the largest number of loans that are 60 days or more past due (836,000)—a key benchmark of delinquency and foreclosure barometer. Foreclosures continue to run at a record rate, despite a multitude of government and private programs. The problem has spread well beyond its original flash point, the subprime sector. The program is designed to help homeowners already in trouble (the loans have become delinquent) and those who may be heeded for it. Loan services receive a fee of $1,000 per loan modification. In addition, they receive a $1000 a year for three years if the modified loan stays current. The program also covers underwater borrowers. The loan-to-value ratio, which started out at 105 percent, is now 125 percent, meaning a homeowner with a $250,000 loan on a property valued at $200,000 is eligible for refinancing aid."
There are a few reasons why these increased loan modifications will still fail:
- Job Losses - You cannot pay your mortgage if you do not have a job.
- Number of Foreclosures - The number of foreclosures far exceeds any loan modification efforts.
- Underwater Homeowners - Even if the bank lowers their payments by a few hundred dollars per month many homeowners will still default due to owing far more than their home is worth.
If you need to sell your home fast via a short sale you can my request help on my website at Get Help and Assistance from a Middle Tennessee Short Sale and Foreclosure Expert and REALTOR.
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