Wednesday, October 13, 2010

Debates regarding foreclosure issues, part 2

Press Release

Release Date: October 11, 2010

Contact: Katrina Cavalli, (212) 313-1181, kcavalli@sifma.org



SIFMA Calls System Wide Moratorium on All Foreclosures ‘Catastrophic’

New York, NY, October 11, 2010—The Securities Industry and Financial Markets Association (SIFMA) today issued the following statement from Tim Ryan, president and CEO, on the foreclosure moratorium related to issues in foreclosure processing:

“It would be catastrophic to impose a system wide moratorium on all foreclosures and such actions could do damage to the housing market and the economy. It must be recognized that the mortgage market, investors and the health of the economy are all inter-related. Investors in the housing market—including American workers with pension funds, 401k plans, and mutual funds—would unjustly suffer losses in their savings from these actions. Increased uncertainty in the securitization market would further constrain consumer credit and spending, dampening our already unhealthy economic situation. If mistakes have been made in relation to foreclosure processing, SIFMA firmly believes such mistakes should be corrected. It is imperative, however, that care be taken in addressing these issues to ensure that no unnecessary damage is done to an already weak housing market and, in turn, that there is no further negative impact on the economy.”

Debates regarding foreclosure issues, part 1

Wall Street Journal, Oct. 10, 2010. The foreclosure problem isn’t about whether some home owners had their homes wrongly foreclosed upon (there’s been no evidence of that to date) but to what extent banks were taking short cuts on foreclosure procedures in states requiring judicial foreclosures. Banks need to conduct their reviews and correct their processing mistakes, but talk in Congress about imposing a national foreclosure moratorium would unnecessarily disrupt the housing market at a time when it needs to find its bottom and move on.

Tuesday, October 12, 2010

A copied and pasted article, and EXACTLY why stalling foreclosures is a BAD THING!

Flawed Foreclosure Documents Thwart Home Sales
Richard Clark, left, with his agent, Kevin Corasio, is trying to buy a foreclosed home in Florida.
Chip Litherland for The New York Times
OCALA, Fla. — Amanda Ducksworth was supposed to move in to her new home this week, a three-bedroom steal here in central Florida with a horse farm across the road. Instead, she is camped out with her 7-year-old son at her boss’s house.
Richard Clark had a deal to buy this home in North Fort Myers, but it has been suspended.
Like many buyers across the country, Ms. Ducksworth was about to complete the purchase of a foreclosed house when it suddenly went off the market. Fannie Mae, the giant mortgage holding company that buys loans from commercial lenders, is pulling back sales of homes that might have been foreclosed in bad faith.
“I gave up my rental thinking I would have a house,” said Ms. Ducksworth, a 28-year-old catering assistant. “Now I’m sharing a room with my son. What the hell is up with that?”
With home sales this past summer at the lowest level in more than a decade, real estate is ill-prepared to suffer another blow. But as a scandal unfolds over mortgage lenders’ shoddy preparation of foreclosure documents, the fallout is beginning to hammer the housing market, especially in states like Florida where distressed properties are abundant.
“This crisis takes a situation that’s already bad and kind of cements it into place,” said Joshua Shapiro, chief United States economist for MFR Inc., an economic consulting firm.
Three major mortgage lenders — Bank of America, GMAC Mortgage and JPMorgan Chase — have said they are suspending foreclosures in the 23 states where they first need a judge’s approval. They are also waving off Fannie Mae from selling any of the foreclosed homes whose loans they sold to Fannie.
The companies say they are reviewing their operations after disclosures that employees signed documents without determining the accuracy of the material, as is required by law.
Those reviews are throwing into limbo hundreds of thousands of foreclosures and pending home sales, analysts estimate, though the lenders and Fannie Mae have been mostly silent about precise numbers and other specifics.
More broadly, the revelations about the sloppy paperwork are emboldening homeowners and law enforcement officials in many states to question whether lenders rightfully hold the notes underlying foreclosed properties — further chilling the housing market.
Distressed properties, many of which are in foreclosure, make up about a third of all home sales. “Foreclosures are going to slow to a crawl,” said Guy D. Cecala, publisher of the trade magazine Inside Mortgage Finance.
Of the 23 states where foreclosures need court approval, Florida has by far the most trouble — about a half-million cases clog its courts — and the moratoriums are having a noticeable effect.
Because most lenders sold their mortgages to Fannie Mae, it is largely that company that has been sending e-mails to real estate agents about putting off deals and removing
houses from the market. In most cases, the agents are being told the freeze will last 30 to 90 days, but agents say there is no way to know for sure.
A snapshot of the problems can be seen at the real estate agency that sold Ms. Ducksworth her home, Marc Joseph Realty, based in Fort Myers.
The agency had 35 deals that were supposed to close this month. As of Thursday, Fannie had postponed 11 of them. Another handful of homes that did not have offers or were being prepared for market had also been withdrawn.
“If this wipes out half my inventory, that’s a scary thing,” said Bill Mitchell, the agency’s closing coordinator.
As he spoke, his computer pinged and another message from Fannie came through about withdrawing a house. It had the subject line, “Unable to Market Notice.”
Another client of the agency, Richard Clark, is caught in the foreclosure vise on both ends.
A delivery truck driver, Mr. Clark has gone through several rough years: his wife lost her banking job and they eventually separated; a vending business did not succeed; he fell behind on his home payments; and CitiMortgage rebuffed his efforts to restructure the mortgage.
With the prospect of being tossed out of his house in a foreclosure of his own, Mr. Clark, 62, cobbled together $58,000 — most of it from his parents — and successfully bid on a house in North Fort Myers that was in foreclosure. His offer on the house, with three bedrooms and two baths, a Jacuzzi tub in the master bedroom and a Key lime tree in the backyard, was finally approved on Oct. 1.
“It’s been a rocky two years,” Mr. Clark, a stocky man with a short pony tail, wire-rim glasses and a gold hoop earring, said while touring the rambling one-story home. “It’s a dream house for me.”
Multimedia
At least, it was. On Tuesday, Fannie suspended the deal. Mr. Clark said he did not know what to do. “I’m kind of hoping I have a place to live,” he said. “Now, who knows?”
It is possible the foreclosure on his current house in nearby Cape Coral — he has a court hearing on Dec. 7 — will also become caught up in the current problems, but Mr. Clark said he was not pleased by the prospect of staying there any longer.
“I’d rather just get on with it, get on with my life,” he said.
In the states far from Florida where foreclosures are an equally large problem but there is no judicial review — Nevada, Arizona and California — there were early signs this week
that the document crisis was spreading. The only time a foreclosure in those states enters a courtroom is when the borrower sues the lender, something few of those in default have the money or the will to do.
In a telephone interview on Wednesday, Gary Kent, a foreclosure specialist in San Diego who has 80 listings, said he had not heard from Fannie or any lender about withdrawing a property. All his deals were on track, Mr. Kent said.
But a few hours later, Mr. Kent said he had received an e-mail about removing a home that was under contract.
The message was from his title insurer, who said that Pittsburgh-based PNC Bank was imposing a 30-day moratorium on all foreclosure sales. (PNC declined to comment to a reporter.)
Mr. Kent’s confidence was shaken. “My buyer’s upset, my agent’s upset and I’m a little nervous,” he said.
Several factors are likely to delay many more foreclosed houses from reaching the market and finding new owners.
Law enforcement officials in several states, including Texas, Maryland and Connecticut, are demanding a suspension of foreclosures until lenders can prove they are using legal methods.
It is unclear how many lenders will go along.
In a move that sets up a potential showdown in Texas, one major lender, CitiMortgage, is arguing that it is being considered guilty until proven innocent by the state attorney general.
“We have no reason to believe our employees are not following our process, and therefore have no reason to stop foreclosures,” a Citi spokesman said.
Another factor is the reaction of the title insurers, who defend homeowners in disputes over a home’s ownership. Lenders require title insurance before approving a mortgage.
The crisis took many title insurers by surprise, said Kurt Pfotenhauer, the chief executive of the industry’s trade group, the American Land Title Association.
One possibility the title insurers are discussing is obtaining warranties from lenders against errors in their foreclosures. Every title insurer, Mr. Pfotenhauer said, “understands there is a brand new risk that has to be evaluated. It’s not at all clear that courts across the country are going to be reversing their earlier decisions on foreclosures. But we don’t know.”
In the meantime, buyers like Ms. Ducksworth here in Ocala are at a loss for answers.
“She’s in a mess, actually,” said Jim Haston, Ms. Ducksworth’s agent.
“I really don’t know what to tell her,” he said.
Chip Litherland for The New York Times

Let's talk about these banks STOPPING foreclosures!!

Last week I talked about this on Facebook and the opinions varied greatly. I am 100% SURE there are some cases where people were wrongly foreclosed upon, but the majority, without a doubt were done fair and square. You see, the person signing the affidavit has to swear they have personal knowledge as to the accuracy of the documents. Now, the clever people out there have figured out that when these employees are signing hundreds of these affidavits every day, there is NO way they can personally know this to be true.