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Is A 90 Day "Mortgage Meltdown" Foreclosure Moratorium Imminent As The RoboSigning Scandal Goes Mainstream?
The Massive Mortgage Mess as we affectionately call it seems to be getting new names with each passing day - the latest one is, quite appropriately, RoboSigning Scandal (funny how after the stock market, "robotic" technology will soon becoming equated with the biggest mortgage scam in history). During today's Kudlow segment, CNBC's Diana Ollick who is by and far the company's best (and only) investigative reporter, confirms various so far unfounded rumors, that the government is planning to institute a 90 day foreclosure moratorium as it deals with the realization of just how big and pervasive the mortgage problem is, and even worse, will soon be. It is so bad that even a typically ebullient Larry Kudlow is forced to note that this is the "housing equivalent of the credit financial meltdown" and that "this is going to go on for ever." The biggest issue that is now developing, as we noted last week, is the fact that title insurers (firms such as Fidelity National, First American, Stewart Info and Old Republic) are refusing to insure mortgages in foreclosure or otherwise, uncertain as to who actually owns the title. And for all those who believe this will merely keep prices artificially high, we have very bad news - the problem with the title insurers walking away on fears of lawsuits is that no lender will be willing to write a mortgage without title insurance, meaning that suddenly the up-front component of home purchases will either necessarily have to surge, or home prices will have to plunge by a like amount, as there is simply not enough equity (read money) to cover the resulting debt deficiency. Alas, this mess is just starting, and as people realize how bad it is, it very well may lead to a total collapse in the housing market.
For all those hoping on a quick resolution so that Americans can go back to watching Dancing with the Stars, you may wish to reconsider. Quote Kudlow: "We're not talking just a few weeks, or a few months. This sounds like a long, drawn-out, bureaucratic, robotic process with lawyers, and oh my gosh." Another implication: a veritable bonanza for both lawyers and defaulters, the former of whom will end up making billions in legal fees (collected from the same banks which are still sucking off the ridiculously low TLGP-funded, and thus taxpayer sponsored fees), while the latter will be able to live mortgage free for years, while continuing to buy useless trinkets instead of paying what is contractually their duty.
Another important topic discussed is the fact that due to decades of faulty securitizations, suddenly no bank knows who owns what. Courtesy of several trillion in now title-undefined mortgages, which in turn form the basis for thousands of CDOs, which in turn are split up into millions of tranches, and includes the complicity of Fannie, Freddie and private label, it is the banks and their clients that have shot themselves in the foot: as other have noted, very soon, the entire MBS process can and very may grind to a halt (if that happens, goodbye Pimco).
As mentioned earlier, Ollick confirms that according to rumors, the government is going to impose "some kind of 90 day foreclosure moratorium on the banks which would melt down the housing market." In fact Congressman Merkley already indicated he is for a foreclosure moratorium.
At the end of the day: the one true loser, is the law-abiding, conscientious, tax and mortgage paying middle class American, who is now preparing for TARP 2 as the banks will all almost definitely need to run to the bailout through because of this catastrophe.
Must watch 10 minute explanation for anyone who is still confused by any aspect in this massive story.
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Republican or Democrat, does't matter. But the commitment Bush gives to the American people lays the groundwork for all the mess:
http://www.youtube.com/watch?v=kNqQx7sjoS8&feature=player_embedded
But if the securitization process itself was so flawed that title ownership cannot be determined then every single mortgage is flawed. In other words, paying one's mortgage to completion cannot result in the honest person gaining clear title to the property. The next big scandal will be concerned with home owners who have completely paid off their mortgage but are not granted full legal title to the property. The securitization process has broken the legal structure of ownership period. Fraud laced foreclosures are only the coal mine canaries, those who pay off their mortgages are the imperiled miners, the whole United States ... a mortgage fraud based toxic gas zone.
Snake, you have got it in one!
The whole fucking system of property ownership is now in peril, and just think about how many quadrillions that is going to take to fix!
Got gold yet??
Anyone with an existing mortgage, who is paying it off, is going to be fucked-over soooo badly. I cannot see anything else to do but going long CAT - the Government is going to forcibly relocate people, and bulldoze entire neighbourhoods, if not cities.......
Best of luck for the future.
This has been going on for decades. Filing the satisfaction or release is not a priority for lenders - once they have their money. States have curative laws on the books and title insurers have worked out ways to deal with this among themselves.
This hasn't been an issue - and won't be an issue in the future.
Don't let this keep you up at night. There's plenty of real problems for that.
I wouldn't be surprised if the Federal Reserve announces that it will backstop title insurance.
"...and the plan is"
I am late, in mortgage payments, for 2 months and 28 days, already.
What I need, now:
-two years foreclosure moratorium.
-two more years to wait for court date.
-to delay court date by 1 year bankruptcy proceedings.
-to sell my silver after 5 years of free rent and bureaucratic mess for 400/ounce to pay off my house, at auction date.The house will cost me then 5c on $1.
Long life, comrade Obama.
Workers of the world, unite!,
Joker
http://www.youtube.com/watch?v=R1X6RQLZtoA&NR=1
Zero, an excellent summary.
I suspect that your time-zone is somewhat similar to mine, at Vladivostock hours......
Cheers, spdrdr
spdrdr,
thanks!
Actually, I am in NY. Buying another bankrupt American factory, today.
http://bidspotter.com/forms/event.php?event=11877
Bought like 10, last 12 months.
thats a rerun video you posted the same link last week or so. you need to get new material and be more creative Ø.
Stocvk market has been looking for a reason for the next leg-down.
The headlines will be screaming how Gold is surging at 1329. But once again most bugs and insects will miss that euro continues to out pace Gold. Hence wealth preservation argument is the biggest joke going for Gold.
dude, euro is just being devalued slower and there is a very nasty piig problem the likes I think will show the fault lines between club med and the "others". plus, euro leadership seems to be taking play calls from heli-ben and turbox timmah...these men...they are not the role models you want to be looking up to. so, what other strategies do you employ other than " get the fuck outta dodge cuz this bitch is rigged?"
If you think that a Dollar implosion won't drag down the Euro as well, you're either stoned or stupid!
how do u know euro is imploding when in ur face it is rallying 1.38 even with all PIIGS issue? IT IS OUT RALLYING YOUR GOLD SHIT.
It rallied from 1.3-1.38 in 10 days flat.It is headed well into 1.4 and then 1.6 later in 2011. While Gold will scratch through to 1350 and best case 1400 before an almighty crash given the new forex regime will not have anything to do with Gold. Gold has no supporters except some internet nuts like you who have naively loaded up on it in the vain dream that someone among the CBs will notice its value. Gold will be just be precious item like any other commodity but that is where it ends. No $2000 and $5000 and $10000 kind of of returns. Obviously if you wait 200 years, no one knows.
But right now euro will outpace Gold as ECB is increasingly hawkish in its stance and precious metals do not like hawkish CBs. They are petrified of them. So even the mere sight of ECB statements over the next 12 months will burn gold bugs. ECB will increase rates at the first sign of inflation which I think is around the corner. But even before ECB, China will loosen yuan float and that will be another killer for Gold.
So u nut, hope u understand Gold is nut's investment. Gold has been beaten flat by:
1. euro
2. Real Estate prices in China and India (over 60% gain in just 2010 compared to 20% for Gold)
3. Copper
So Gold is a real under performer and am waiting for the day when ZH will accept its mistake and understand that forex regime is defined by CBs and they ignore Gold crowd.
And to the argument that CBs have stopped Gold sales, that in no way has anything to do with next forex regime after dollar implosion. In fact CBs are not selling copper are they? Does that mean copper will have some value to it in the new forex regime? Gold bugs are just scouting the internet for the faintest news item which can be contrived to show Gold price rise. You see the Gold crowd needs this internet crowd to support them otherwise poor fellows get depressed. So they will write these charged article on how Gold is super commodity and how some idiot see it at 2000 and everyone will link to it.
So u nut, hope u understand Gold is nut's investment. Gold has been beaten flat by:
1. euro
2. Real Estate prices in China and India (over 60% gain in just 2010 compared to 20% for Gold)
3. Copper
So Gold is a real under performer and am waiting for the day when ZH will accept its mistake and understand that forex regime is defined by CBs and they ignore Gold crowd.
----- so you have skin in the game? This is where you're at? Or are you saying if you had any skin in the game that's what you'd be doing? lmk...I don't see much with your response..you are in copper, but you're sour on gold..if you have a position..anyhoo, sounds like you've been drinking lucazade that's been mixed with haterade..but I still value your opinion....cheers!
I am long Gold from 1263 and exited at 1324. It is a pure trade game for me and do I love this. The real joy will be when i can make money shorting Gold. Waiting for more opportunity. But here is the think I will go short this piece of shit at the first signal from my model. And am fully cognizant that Gold has no future in forex regimes. So all my posts are targetted to the gold insects who preach the $2000 and above prices. Am not targeting the positional trader who can unequivocally go long and short Gold.
interesting...idk. no one really knows what's going to happen. most get the sense that whatever it is it won't be pretty at all. You have to realize though that in U.S. most if not all do not look to diversify wealth (real assets). They just figure USD, im in america, greatest country on earth..nothing bad can happen..this is america and will go ahead and stick my head in the sand ostrich style. I have NEVER heard of any plain jane middle america dweller holding a mix bag of currencies...Depending on where you are, that's totally asinine to you..well, me too. Au is okay, but I'm more interested in Ag at the moment...well, honestly..always have. Thing about those two is that they can serve different purposes. don't think it's crowded yet though. Honestly, I fear that most in America don't have a pot to piss and/or are more concerned with prime time tv schedules..too demoralized and destabilized to know or care that they are being taken to the cleaners. I do agree with you that you have to be ready to change direction at a moments notice..how do you feel that it's come down to this?
So Johnny, you had honor to not show up as Johnny again or Master Bates. Since you had your numbers so fucking wrong you have given yourself room to grow to 2000. Ain't that cute!
Wrong tactics
Dude,
look at 10 yr Euro/gold
and burn your half:
http://www.youtube.com/watch?v=HqcbgSpHMFs
ur investments and dreams are as foolish as the movie.
that's a rerun video that you linked to a couple of weeks ago. your lame.
that's a rerun video that you linked to a couple of weeks ago. your lame.
that's a rerun video that you linked to a couple of weeks ago. your lame.
Let go of Trichet's "little Napoleon", frere Fresno Bee.
To compare gold to fiat so lightly belies ignorance willful or otherwise.
I'm thinking willful.
Ultimately - Biological Fitness is what matters. It is distressing that young adults are no longer procreating - too stressed out, no McMansion, no fancy job etc etc. This is the rock bottom - and sheer stupidity. There are humans ( and animals) who have much much less - who procreate. Once a civilization stops making babies - its destined to die off. The tragedy is if it happens for reasons other than mass starvation ( which I dont believe is the case in the US of A).
My new definition of a successful culture is - a culture that makes its young adults comfortable enough ( socially, psychologically) - to procreate - given the current state of physical reality - whatever that may be.
Cultures that are too narcissistic/hubristic to allow procreation unless extremely high thresholds of wealth are crossed - will ( just by operation of arithmetic) - die off.
Raise the bar a bit, brother.
How about a successful culture allows for young adults to raise successful children (for some metric including education, self-sufficiency, and ability to form stable relationships to repeat the cycle)?
The US fails on this front at present for more than half of its citizens.
Exactly. There are countries with a per capita income of $3/day - where young adults fell more - umm - normal. Normal enough to do normal things. have kids and do the best for them. $3/day.
So - my point was that the US suffers from some kind of narcissistic power trip. After all we are so superior to the rest of the human race that unless there is a McMansion with a Jacuzzi in the master bathroom - well - whats the point of having kids?
When a country gets education, birth control, and no longer needs the young to take care of the land and take care of parents in old age, population goes down. Pop going down is a good thing. I don't think it can happen organically, fast enough.
I was rather punchy on Monday. but I've mellowed out quite a bit. This world is crazy and I think deep down I'm quite sane. Much bigger fish to fry...like the " I need a win dixie paper bag full-o-fun-bux right now" fish.
I don't think we even get credit (pun!) for the McMans...the histo plot of income in society, once convolved, demonstrates that is was more dream than American after all.
I think we used to have class mobility in this country (myself being born just after Nixon closed the gold window and having achieved economic escape velocity despite double-wide trailer origins), but we've made education expensive, manual labor counterproductive, and closed the gap with plastic cards, HELOCs, and the affectation of wealth; better to look good at your bankruptcy hearing than put up with last year's SUV, Martha.
We are a country of hard-working, talented craftsmen when it comes down to it, whether you're talking about lathing parts for a Chevy Corvette or launching 6kg masses into space. It's the FIRE sector's grip on our existential balls and the siren-song of Mammon that has dragged this country down since the 80s.
"If the country has a massive debt the politicians tend to get rid of it by inflating the currency. The losers with saving accounts see their money buying power fade. The problem with the USA was that folks used to carry a lot of personal debt (which also loses value during hyperinflation). So for the Feds to get rid of the national debt they have to make the folks save first.
The housing bubble worked for the Feds like a charm. Every foreclosure means one giant personal debt less. Banks were loaded with a lot of hard assets (those are very valuable during hyperinflation).
In the panic people with savings will do anything and pay any price to get rid of the paper and buy something they can touch or eat. Selling real estate during hyperinflation and using the cash to cover old loans and debt can do miracles. You can get rid of a lot of personal debt if you act fast, before the central banks start adjusting the rates.
Of course the US government bought a lot of bad mortgages. Those will cover a nice chunk of the national debt if hyperinflation strikes.
Even spookier: the banks stopped the foreclosure procedures half way. They don’t want the houses sold. The paper may be worthless. What good are those dollars? The banks will be better off with the real estate in their assets. In case of hyperinflation those houses will turn golden.
Did the housing bubble provide enough real estate stock-piled to encourage the crush of the dollar and getting rid of the national debt through hyperinflation?"
full article:
http://www.bigbureaucracy.com/?p=1808
Also this:
Texas Attorney General's office called for a halt on all foreclosures today
http://blogs.chron.com/primeproperty/2010/10/ag_attempts_to_stop_foreclosur.html ^
Good catch! The plot thickens........
"the bailout through"
that's TROUGH.
(it is pronounced "troff" as in "peaks and troughs" or "the water trough." It's related to the word Tree or Trog in deutsche.)
Good grief - how can any one site have so many typos?!
You need a capital 'D' and should drop the 'e' on Deutsch, Herr Spelling Police.
BTW, have you hauled your Fat Ass down to the library yet?
Cookie, unbake thyself!
Why don't they just foreclose on homes and holdover cash proceeds from sales in escrow. Give a 180 day period to make claim on proceeds. List out CUISP numbers and let some really great databasing nerds make a lot of money linking foreclosures back to rightful owners.
If they can partially figure out medical claims and coding, this can be solved as well.
From NBF Economics:
This morning’s report showed an increase of 4.3% in the pending home sales index in August after a 4.5% increase in July. This follows a more than 32% cumulative drop two months before, in the aftermath of the homebuyer tax credit. Hence, existing home sales experienced on average a serious double-dip in the Q2-Q3 period. With the housing sector dropping at least by 20% in Q3, the level of real activity would be, by our calculations, below $300 billions, a first occurrence since the second quarter of 1983. As today’s Hot Charts shows, there is a case to think that the third quarter of 2010 could be the bottom of existing home sales in the current cycle. Apart from housing investment falling below 2.5% of GDP, the ratio of existing homes qualifying income (only 36K) to median sales price just hit an all-time low of 20.1%. This should provide, over time, a greater incentive for renters to enter the market and support a progressive increase in demand, providing that private employment continues to register positive gains.
LEO,
WHO THE FUCK WOULD BUY A HOUSE WITH THE TITLE OF ALMOST ALL OF THEM IN SOME QUESTION? NOT ME.
Tell me you are mocking this!
Pending, Leo. How many see the far side of Escrow?
I put some serious @#$%^&* doubt on the prospects of that occurring. It sounds nice though. :|
I think that several commentators are missing one major point.
A bigger issue than who owns the foreclosed houses (although that will keep millions of parasites--i.e. lawyers-- in caviar for decades) is the fraud behind the MBS that were sold to investors.
Admittedly, the FED will probably not kick about the ones they own (1+ trillion $ worth) since the FED is owned by the same bankers (probably) that issued the fraudulent securities. However, when it becomes apparent that the MBS were not securitized properly and tax is owed (by the current owners) on all the income generated by these securities (back to their original issue date), not to mention the money lost due to difficulty recovering anything through foreclosure, I think that the MBS owners are going to sue every MBS issuer for their entire net worth (plus a multiple). Homeowners are doing that now (see Market Ticker for RICO suit details) but I don't see their legal standing on that issue but the MBS owners seem to have a slam dunk case.
Now, seeing how GM bondholders were screwed by Obama and his thugs, they may try to do the same thing to the MBS owners but I don't know if they can do that without a violent response that will scare the Congress critters enough to cause them to take the MBS owners side against the Fascists.
I agree that the issue of who owns the mortgages will eventually be settled. However, I wonder if Citi, UBS, JP Morgan, etc. can survive the suits over the fraudulent issuing of MBS securities. If they can, it is because the fed govt has been completely captured by the banks (similar to unions).
My question is whether the middle class will fight back (either with guns, votes, protests, tax revolt, whatever) so violently against our Fascist (meaning corporations, unions, ruling elites alliance) government that it must either set up concentration camps or fall?
Ultimately, this all depends which side (middle class or Fascists) do the law enforcement and military take? It seems unbelievable that an American who ever think this question, much less ask it. But to me, it is the most important question out there. My guess is law enforcement and military generals go with the Fascists but what about the colonels. Remember that all military revolts are lead not by generals (too invested in, and part of ruling class) but by colonels (high enough up to run a successful coup but young enough that they haven't completely sold out). Interesting times--God help us!
I suspect that the big guns are already working in the background to carve up every single mortgage and give it a new owner. Once they have agreed the split amongst themselves, they will come riding into court on white chargers, promising to 'save the system'. (whilst of course saving their own necks).
Now how are you going to stop them?
Time will eventually sort all this out. If the mortgage goes for seven years without foreclosure, my understanding (someone please correct me) is that it becomes unenforceable, thus the home becomes the occupant's free and clear. (Never mind that this whole mess also means its unclear who should be getting paid by the signee.)
see? that is what gives ZH and T-bone such credibility...is they give props when needed....in this case Diane O. from CNBC which everyone agrees with T bone that she is the one and only good reporter on the fucking station!
That is what seperates this site from a message board more/less...credit where credit is due....
well rounded.
Toot toot.
I'm a real estate investor/flipper who sometimes ends up with houses that I get from unpaid tax deeds. These titles are clouded and historically difficult to insure. The new owner can file a "quiet title" action or buy more expensive title insurance from a specialty insurer. The latter is cheaper by quite a bit.
This makes me wonder if foreclosing lenders will be forced to buy the more expensive title insurance to cover the increased risk of legal action on foreclosure properties with sloppy paperwork. This may not be the end of the world. It might just be an increased foreclosure expense to provide more expensive title insurance.
Insurance is based on actuarial risk. Methinks premiums may go up a tad as of now.
In Colorado our underwriters (and I worked with four of the largest) wouldn't insure a tax sale until 9 years had passed from issuance of the tax deed without a quiet title. No exceptions. You were lucky to have someone that would insure yours.
You can bet that Old Republic looked at the current foreclosure risk really hard - and said 'no f'n way'.
Maybe someone will take on this foreclosure risk, for a price. Hasn't Goldman proven that you can always find some dumbass to take the other side of a deal?
One thing's for sure - I'm glad I got out of the title insurance business in 2005!
Out of curiousity, (since I have not read a title policy in years), don't they also have a 'fraud' clause somewhere within? ie., fraudulent conduct by the seller voids/makes voidable the title policy?
Let's look at who benefits and their relative power positions:
Those who benefit from fixing this quickly: (1) All banks; (2) All institutions banks owe money to; (3) The US government, who needs banks to buy treasuries; (4) All investors (including PIMCO) who hold assets securitized by mortgages; (5) Federal and State politicians clinging to power. Tons of power, tons of money, ability to pass laws, ability to send guys with uniforms and guns around to do stuff for them.
Those who benefit from fixing this quickly: Folks in homes who have NOT defaulted on mortgages. They want to sell or more immediately refinance one of their two major assets they have taken 20 years to build. Considerable power because they are very likely voters.
Those who benefit from fixing this slowly, but not too slowly: (1) Lawyers; (2) CPA's. They act on behalf of those in the first paragraph. So lots of power.
Those who benefit from fixing this very slowly: Defaulting homeowners who are still in their houses. No power.
Does everyone really think this is not going to get fixed reasonably quickly? I practiced law for 25 years. Lawyers can fix a lot of huge paper problems if they have a sense of urgency and get paid a lot of money. I'm thinking the bankruptcy of your biggest bank client and a huge bucket of money will supply all necessary ingredients.
My IQ is 143 and I dropped out of college - a long time ago.
I live in a foreclosed-upon property that isn't mine.
Adverse possession, bitchez! 10 years in NY, your mileage WILL vary.
I had to wait a while to be approved for commenting, but I'm happily back. I'm a bit surprised that Durden, normally quite reasonable, would make a comment like "while the latter will be able to live mortgage free for years, while continuing to buy useless trinkets instead of paying what is contractually their duty," especially since I now regrettably link quite a few of his relatively good posts at www.shamethebanks.org and may have even quoted him at HuffPost. This comment however shows an unfortunate misunderstanding of the homeowner's situation.
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