More 'Workouts', But Will They Stem Foreclosure Tide? [Housing Tracker]
Quotes of the Day
"Right now, the banks seem to be willing to make deals.” - Bonita Holmes, loan counseling director for New Jersey Citizen Action, on the rising number of “workouts” in New Jersey. (NJ.com, Aug. 25)
“This family really did love him.” – Michelle Frier, an animal adoption specialist at the Wildlife Care Center, referring to the pig Moogy, whose family had to give him up when they went in to foreclosure. The Florida Wildlife Care Center said they admit up to 120 orphaned, abandon or displaced animals per day. (NBC6, Aug. 22)
Foreclosure Data
On The Eve Of Foreclosure, A Mother Finds Help In The System.“RealtyTrac: New Jersey foreclosures are up 140% over last year… But loan modifications also appear to be surging. Sometimes known as "workouts," modifications involve banks negotiating new terms -- often lower interest rates or longer terms -- with borrowers who otherwise would lose their homes. America's largest home loan provider, Bank of America (BAC), which recently acquired troubled lender Countrywide, has announced a goal of modifying at least $40 billion in mortgages by the end of 2009, helping roughly 250K families… New Jersey Citizen Action, a nonprofit group that helped 290 customers out of foreclosure in H1’08…is on pace to triple last year's numbers.” (NJ.com, Aug. 25)
As Parents Toil To Make Ends Meet, Teens' Carefree Days Meet An End. “A new report submits that more than 130,500 Florida children will lose their homes this year and next because of the foreclosure crisis.” (Palm Beach Post, Aug. 24)
A 'Green Lien' On Vacant Homes. California: “Foreclosed homes have plenty of issues, among which is blighted landscaping. The Elsinore Valley Municipal Water District hopes to rectify that problem. In an effort to keep those lawns from turning brown and further decreasing property values, it has proposed implementing a voluntary "green lien" on the abandoned homes. The lenders or other owners of the repossessed homes who participate in the program would allow the water board to keep the water meters running until the vacant homes are bought. The buyers will pay off the lien to the water board as part of the purchase deal.” (LA Times, Aug. 24)
Idaho Mulls State's Share Of Subprime Relief Bill. “Idaho's share of federal cash meant to alleviate pain from the nation's subprime mortgage crisis could top $140 million, with the bulk going to provide funding for low- and moderate-income… or adjustable rate borrowers… Idaho Housing and Finance Association: In March, 16.5% of Idaho's subprime adjustable-rate mortgages were past due, while the figure was nearly 20% nationwide. By comparison, only 1.6% of conventional loans in Idaho were delinquent, lower than the 2.5% national average. Even so… Idaho unemployment, including out-of-work roofers, plumbers, drywallers and masons rose to 4.1% in July following 37 months under the 4% mark.” (Seattle Post Intelligencer, Aug. 24)
L.A. Times Media Group In New Foreclosure Auction Venture. California: "On Monday, Times Media Group and other partners will launch ZetaBid, a business that will auction foreclosed homes and other properties… [with] a website where the properties could be viewed. The other partners are London-based GoIndustry-DoveBid, an auction specialist, and CataList Homes of Hermosa Beach, a real estate brokerage. The partners will share fees paid by the buyer on each home sold.” Times Editor Russ Stanton: "The Los Angeles Times is part of Times Media Group but has no connection to the new venture. We will treat ZetaBid like any other real estate entity from a coverage standpoint.” (LA Times, Aug. 23)
In The Ruins Of The Housing Bust. “Merced, California: In the [last] three years… [Merced’s] median sales price has fallen by 50%. There are thousands of foreclosures on the market... But almost no homeowner can afford to sell. If you cannot go as low as “the foreclosure price” — the cost of a comparable bank-owned house — real estate agents say you might as well not even bother listing your home. And so most people do not… DataQuick Information Systems: Three out of four existing-home sales in Merced County are now foreclosures… The foreclosure price is becoming the rule in many areas. In Los Angeles County… a third of the sales are foreclosures… Merced County had 523 foreclosures in July, quadruple the rate of a year earlier.” (NY Times, Aug. 23)
County Figures Show 9% Jump Since June. California: “MDA DataQuick: 2,004 San Diego County homes went into foreclosure in July, a 9% increase over the previous month and [up] 213% over last year… It was the county's 40th consecutive month of year-over-year increases in both foreclosures and notices of default, the start of the foreclosure process. Default notices totaled 3,006 last month, a drop of 2.5% from June, but an increase of 81% from a year earlier… In July, there were 1,259 foreclosure property sales, compared with the 2,004 new foreclosures. Forty-one percent of all resale homes sold in July had been foreclosed on within the previous 12 months.” (Sign on San Diego, Aug. 22)
Ed Mcmahon Finds Home Buyer, Avoids Foreclosure. California: “Television celebrity Ed McMahon has found a buyer for his multimillion-dollar Beverly Hills mansion, avoiding a foreclosure that would have made him among the most high-profile victims of the U.S. housing slump. The buyer of the six-bedroom, five-bathroom home was not disclosed, but McMahon spokesman Howard Bragman said on Friday it was not billionaire Donald Trump. The New York developer had said last week he was in discussions to buy the house and lease it back to McMahon after widespread publicity about the celebrity's default on his $4.8 million mortgage.” (Reuters, Aug. 22)
US Subprime Crisis: All Aboard The Foreclosure Bus. Centreville, Virginia: Tommy Burch, a real estate agent who with his wife has been conducting three-hour "Foreclosure Bus Tours" every weekend for the past four months… "A lot of these foreclosures don't even have signs up saying that they are foreclosures, and they are gone in a day," Tommy Burch said.” (AFP, Aug. 22)
County Sees Spike In Foreclosures. Oregon: “RealtyTrac: Lane County saw more than double the number of home foreclosures in July, compared with July 2007… In July, there were foreclosure filings on 135 Lane County homes, compared with 62 in July a year ago… Foreclosures add to the unsold inventory of houses, which reached 2,632 last month… In July, one in every 1,096 Lane County homes was in foreclosure. That’s about 20% better than the Oregon rate of one home in every 812 homes, and Oregon is doing more than twice as well as the nation as a whole, which had a rate of one foreclosure per 464 homes last month.” (Register Guard, Aug. 21)
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This article has 5 comments:
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ArnoldCountry
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65 Comments
Aug 25 09:43 AMFirst, the lender is not interested in helping the consumer really but interested in securing financial information and craft the workout that extracts the most amount of cash from the consumer that minimizes their currently way under water loan they have. It makes more sense for them to lower the interest rate on their 300k loan on a property that is worth 200k and turn that 100k loss into a performing asset which is not a loss.
Second, if they discover the consumer did not tell the truth at application, even though they do a loan mod, they are required by law to report the consumer with a SAR (suspicious activity report) which could trigger criminal charges down the road for the consumer.
Finally, it fails to address the legal remedies, even solves them in some cases, that the consumer could take against the lender. Lien stripping of jr. loans, rescission issues, unfair business practices, etc.
In effect, while the media and government has been pushing this, going for help to the person who contributed to your woes is like asking for help from the guy that robbed you.
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billddrummer
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538 Comments
Aug 25 11:07 AMThe article about the foreclosure bus says one or two contracts are signed after each tour.
I wonder how many of them result in sales? It's true that banks are more willing to deal than they were a few months ago, but around here it still takes 6 weeks or more to get an answer back from the lender. It's particularly difficult if the lender has changed hands (circa Countrywide/BAC), because new people get the files and aren't familiar with processes of the new organization.
I know of one realtor who has been trying to get a short sale completed since March. The buyers still want the house, but the lender has shuffled the file to at least 6 different people. And all of them want to recreate the documentation from the beginning.
It's doubly frustrating for the buyers, because they have to continually reproduce a loan package. I admire their patience but at some point I think they'll find another home to purchase.
I think the upshot will be more homes sitting on the market, waiting to be sold. Which will just add to the already bloated inventory in the marketplace.
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neeb??
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97 Comments
Aug 25 11:12 AM-
JasonC
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367 Comments
Aug 25 02:11 PMTo Arnold - the robbers are the deadbeat borrowers who aren't paying current the paper they signed. Period.
On the original article - the foreclosure prices are the prices. Everyone else is in a fantasy-land of denial. The fair price of anything is the *clearing* price, where the number of buyers and the number of sellers are *equal*. There are tons more who want to sell than who want to buy, even at the foreclosure prices. Ergo, the clearing, that is the *fair*, price for these things, is lower than even the current market.
If you bought at the wrong price, then it sucks to be you, but you lost, not any of the rest of us. Take the hit or mail in the keys.
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Did U Think The Ponzi Scheme Wo...
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230 Comments
Aug 26 04:08 AMBut buyers should really be worried about the jingle mail law which allows a tax holiday for the forgiven part of any loan that was jingle mailed on. This law expires Dec 31 2009 and you can bet there are a lot of homeowners standing by to jingle mail before that deadline if things don't get better because after a big bubble pops like this you can bet reflating it will take decades, not quarters to accomplish. It simply is not worth the risk of staying in a house that you are underwater 50 or 100 or 200k in if you can bail on it without paying the normal tax hit. That's a gift from the IRS plain and simple.