This page has been archived and commenting is disabled.

Are The 250,000 Foreclosure Sales From Q2 About To Be Reversed, As Fitch Prepares To Downgrade Foreclosure Fraud Companies

Tyler Durden's picture





 

Minutes ago RealtyTrac has released its Q2 summary snapshot. In summary, Q2 saw 248,534 properties in some stage of foreclosure (default, scheduled for auction or bank-owned) sold to third parties. This represented a 5% increased from Q1, and a 20% decline from Q2 of 2009. The average sales price of a foreclosure property was 26% below the average sales prices of regularly sold homes. “While foreclosure sales increased in the second quarter, non-foreclosure sales increased even more, spurred on by the homebuyer tax credit that expired during the quarter,” said James J. Saccacio, chief executive officer of RealtyTrac. “That had the net effect of lowering foreclosure sales as a percentage of total sales during the quarter, but that may be a temporary dip as the removal of the tax credit could drive more buyers back to discounted short sales and REOs.” Ah, but herein lies the rub: with pretty much everyone now halting evictions, and foreclosure themselves, all those who are looking for foreclosure bargains will be very, very disappointed. Because while the actual market is digesting the implications of what the recently announced JPMorgan moratorium on foreclosures means (very bad things), Fitch has already fired the first shot and announced it would downgrade mortgage companies engaging in foreclosure fraud. Well, that means preeeetttty much all of them. And the most troubling implication: all those who bought foreclosed properties may soon be facing a transaction unwind, once it becomes clear that there isn't a clear title owner.

From the NYT:

Fitch Ratings said that Wednesday it was asking mortgage companies about their internal processes for executing foreclosure affidavits. If it finds the processes lacking, Fitch will consider downgrading the company’s rating.

The agency also said if the issue is widespread, the resulting delays and extra costs to foreclose could increase losses related to residential mortgage-backed securities.

Bottom line is look for RealtyTrac's foreclosure numbers to take a sharp turn lower in coming months as the foreclosure fiasco hits near and far, and all those banks holdings trillions in RMBS to renew their push against the FASB's recent MTM initiatives. Because as Bruce Krasting pointed out earlier, the 1,500 or so people that are sweating like a Wall Street whore in church and have chopped their left testicle off to never, ever allow the general public to catch a glimpse of the radioactive effluvium gracing the "asset" side of their balance sheets, have just upped the ante and are now throwing the right testicle in the pot as well. The reason is simple: suddenly banks will be stuck with properties which are technically on their books, but to whose cash flows they have no  recourse, and no recourse to kick out their vagrant squatters! This means that until the foreclosure crisis is resolved, and that could take years, suddenly hundreds of billions in RMBS paper will have to be marked not at par, but at zero.

Furthermore, the 250,000 or so people who bought their foreclosed home in Q2 (not to mention the millions over the past two years) will be sweating bullets that the previous owner doesn't come back and demand a cease and decist on the transactions, as well as a full unwind and give up of all equity rights until the rightful owner of the underlying debt is identified. And since one doesn't exist, hundreds of thousands, if not millions of foreclosure transactions will suddenly become null and void, and nobody will be paying any mortgage on them, resulting in billions of incremental writedowns.

P.S. Homebuilders may well be the biggest losers in all this, as the end of foreclosures means someone will need to step in with a price point that is 26% below the prevailing one.

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 09/30/2010 - 00:37 | Link to Comment JLee2027
JLee2027's picture

FUBAR!

Thu, 09/30/2010 - 01:10 | Link to Comment SheepDog-One
SheepDog-One's picture

The banksters are now in trouble. Be very afraid hold on tight when the banksters are in deep shit thats when the bad things happen.

Thu, 09/30/2010 - 02:14 | Link to Comment Problem Is
Problem Is's picture

The fascist Roberts will step in and overturn anything that threatens the Wall Street TBTF's to this degree...

Being the corporate, fascist, treasonous worm that Roberts is...

Thu, 09/30/2010 - 06:14 | Link to Comment Bringin It
Bringin It's picture

Good point SDO, but what are they going to do?  More and more they looked backed into a corner.  I mean take the false-flag gambit for example.  Unlike past successful turns with this ploy, this time, many many people are wide awake, with their eyes open and watching.

I read GeoPols thoughts about the benefits to TPTB to the $500/barrel oil that war on Iran might cause, [everyone will need dollars] but I don't see how they make it happen.   There's already dissention on the home front.

Fascinating.  I'm just fascinated.

Peace.

Thu, 09/30/2010 - 08:07 | Link to Comment blindfaith
blindfaith's picture

au-contraire, my friend....the government has the paper remember, and we are the government.  Bad things happen to us when we don't ask questions and investigate especially when we trust thieves twice.

 

And, now lets hear a big round of applause for the winners...dada, the lawyers!  And, a wee small tear for the taxpayers....no wonder the mega rich are fighting like hell for the tax freeze.  Everyone please use their brains...taxing the upper 2% has no effect on small business, it is bull.

Thu, 09/30/2010 - 08:06 | Link to Comment Mako
Mako's picture

It's planned FUBAR.  All the lemmings have been led to the black pit.  You have been living in fiction.

1.) an attorney in court foreclosing or collecting a debt is a debt collector and has no standing

2.) a trustee, nominee, servicer, etc have no standing because they are NOT the holder in due course

3.) even if the note could be found

4.) assignments are messed up

5.) although the mortgage docs say a loan was given, no loan was given and matter of fact it would illegal for the banks to give you a loan... bank don't and can't lend their own credit

6.) banks can't show a loss because there was nothing for them to lose, they do not lend their own credit

READ the Modern Money Mechanics by the Federal Reserve

Very few debts can be reduced to judgment if you know how fiction of the system works. 

Thu, 09/30/2010 - 08:10 | Link to Comment blindfaith
blindfaith's picture

please site references for all to see...someone may need them.

Thu, 09/30/2010 - 09:04 | Link to Comment Mako
Mako's picture

http://law.onecle.com/ussc/514/514us291.html

Heintz v. Jenkins, 514 U.S. 291 (1995)

An attorney who regularly collects a debt is a debt collector and can be sued if they do not comply with Fair Debt Collection Practices Act.   A bank is a fiction and has to be represented but an attorney is a debt collector.  You can actually sue the attorney declaration and damages if the attorney does not follow the act.   I don't know how an attorney can serve you motions when you can tell them to stop contacting via the Act.

Standing is fundamental Law, party A can't sue on behave of party C.   Only the holder in due course can sue. 

Holder in due course can't convert a non-payment on a contract into damages, the holder must prove damages.  No damages were cause because banks don't lend their own credit. 

Read the Modern Money Mechanics.  The easiest way to fight all this is challenging standing first and foremost. 

1.) no party that has standing

2.) attorney is a debt collector and has no standing and can be sued via the FDCPA.

3.) possibly missing note or incomplete assignment and recording of assignment

4.) even if they get by all that, no loan was given

5.) you can't simply convert a non-payment into damages, no damages will be found because a bank does not lend it's own credit

If they start foreclosure you can move in a few different fronts,  1.) show plantiff and attorney have no standing 2.) move an action in USDC as to the status of the plantiffs as debt collector and/or 3.) if the county court is rubber stamping foreclosures, file for bankruptcy and when the planitiff comes there make them prove standing that they don't have

Thu, 09/30/2010 - 00:57 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Please, everyone keep moving, nothing to see here..

http://www.youtube.com/watch?v=rSjK2Oqrgic

Price slide likely to continue as shadow inventory comes to light

For Cook, DeKalb, DuPage, Grundy, Kane, Kendall, McHenry and Will counties, the shadow inventory number translates to 22 months of distressed housing supply. The combined shadow inventory for Lake County and Kenosha County, Wis., where the delinquency rate is 18.4 percent, is more than 22,000 homes, or a 23-month supply.

"A fifth of people (in the Chicago area) aren't paying their mortgage," said Wayne Yamano, a vice president at John Burns. "Next year is when you're going to have the most competition in the market and the proportion of distressed sales will be the highest."

Some snapshots:

•In Evanston's 60202 ZIP code, for example, only 0.55 percent of homes were foreclosed upon and reclaimed by lenders in June. However, almost 7 percent of mortgages were at least 90 days delinquent, putting the future of those homes at risk.

•In Chicago's 60611 ZIP code, part of Chicago's affluent Streeterville and Gold Coast neighborhood, only 0.52 percent of properties were bank-owned in June, but 5.31 percent of homeowners hadn't paid their mortgages for 90 days.

•In Montgomery in June, less than 1 percent of properties were bank-owned, but almost 13 percent of mortgages were seriously delinquent.

Overall in Illinois, the drumbeat of foreclosures has continued. In August, according to RealtyTrac, foreclosure proceedings were initiated on 6,912 homes; 5,412 homes went to court-ordered foreclosure sale; and 4,484 homes were taken back by lenders. One in every 314 homes with a mortgage received some sort of foreclosure filing in Illinois in August.

http://www.chicagotribune.com/business/ct-biz-0930-distressed-properties...

Thu, 09/30/2010 - 06:54 | Link to Comment euclidean
euclidean's picture

Look, the whole thing is just another hoax. The NYT article is obviously fabricating another story. Since when would Fitch be doing any background checks for instance? It's 3 years too late!!

But I do like the fact it helps sell a higher USD, what with all those other positive indicators spewing out of well founded research. I'm still waiting for GS to go long the EU. Wait ... f**k! I've got my charts upside down.

Thu, 09/30/2010 - 00:42 | Link to Comment Double down
Double down's picture

Now that is nice, no longer a need for MTM.  What is the definition of an asset, had something to do with control? 

Thu, 09/30/2010 - 07:45 | Link to Comment Moonrajah
Moonrajah's picture

Asset, my ass!

Thu, 09/30/2010 - 00:44 | Link to Comment TheManagement
TheManagement's picture

We are asking that you not reinforce the negative stereotypes regarding the ongoing challenges to the mortgage industry -- remember, now is a great time to buy.

Signed,

TheManagement

Thu, 09/30/2010 - 00:59 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

In Miami, Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors, predicted that a limited supply of land coupled with demand from baby boomers and foreigners would prolong the boom indefinitely.

"South Florida," he said, "is working off of a totally new economic model than any of us have ever experienced in the past" according to a realtor who predicted that a land shortage will support higher prices indefinitely."

"Trading Places: Real Estate Instead of Dot-Coms", in the NYT.

March 29, 2005
Thu, 09/30/2010 - 01:32 | Link to Comment Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

Mommy, what's a realtor?

That's like someone who sells cars when there's no more gas left.

Thu, 09/30/2010 - 09:41 | Link to Comment bronzie
bronzie's picture

"Mommy, what's a realtor?

That's like someone who sells cars when there's no more gas left."

~

that's subtle, SWD - I like it!

realtors are far worse than used car salespeople

what's the worst a slimy car salesman can do to you?  sell you a lemon?  cost you a few thousand bucks?

a realtor pushes you to enter into a transaction that can lead to:

> being a debt-slave to a declining asset for the rest of your life

> being tied to an illiquid asset with high transaction costs

> bankruptcy

> foreclosure

> loss of significant-other and children (significant % of divorces occur over financial matters)

realtors are the lowest of the low

Thu, 09/30/2010 - 00:44 | Link to Comment davidsmith
davidsmith's picture

Well, the sales may be unwound for title issues, but they will certainly be unwound for conversion, and that will be based on title problems, but also fraud and conspiracy.

 

Let's just hope the idiot lawyers are smart enough to sue for fraud and conspiracy (and RICO!!) and make sure the United States is a defendant. 

 

Or will that scum cave out of cowardice, greed and simple ignorance of the law.  We'll see!!

Thu, 09/30/2010 - 06:16 | Link to Comment Bringin It
Bringin It's picture

RICo!!! I want perp walks.

Thu, 09/30/2010 - 07:53 | Link to Comment Careless Whisper
Careless Whisper's picture

apparently perjury is not a crime for banksters and lawyers in duval county, florida. if you're roger clemens, well sorry.

http://www.sportsgrid.com/mlb/roger-clemens-perjury-new-york-post-cover/

 

Thu, 09/30/2010 - 00:45 | Link to Comment Everyman
Everyman's picture

The banks will also have to reveal what crap they have on their balance sheets.

THIS IS THE BLACK SWAN!!!

 

This decimates the REITS, and ALL the banks holding the paper.  I cannot comprehend the costs in BILLIONS just to verify the paper.

The only thing that scares me about this is a "FIX" by CONgress which would go something like:  "It is easier to do away with property rights because everything is fouled up so much, and these bankers can't be allowed to fail."

I think this is going to go to shooting.

Thu, 09/30/2010 - 00:50 | Link to Comment Conrad Murray
Conrad Murray's picture

The riots were on in Europe again today.  Your congressional fix scenario could quite possibly be the one thing that would get Americans in the streets.

Thu, 09/30/2010 - 00:58 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The big bad one is a comin', and all of Europe knows it.

Thu, 09/30/2010 - 01:30 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Wait till joe six pack watches inside job' in a few days ... extra butter with that popcorn.!

 

UPDATE~ What is FAZ trading at?I know vxx is set for liftoff.

Thu, 09/30/2010 - 04:47 | Link to Comment StychoKiller
StychoKiller's picture

If the general public even knew/read what's in "The Big Short", pitchforks would have already been deployed!  "Inside Job" looks like what 60-minutes should have been doing for the last three years!

Thu, 09/30/2010 - 06:19 | Link to Comment Bringin It
Bringin It's picture

What's "Inside Job"?  Is it about 9/11??  Or some other inside job?

Thu, 09/30/2010 - 01:02 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Full GM-style nationalization might be on the table: bondholder haircut, loan foregiveness, then issue stock on "First American Realty"

Thu, 09/30/2010 - 02:21 | Link to Comment Problem Is
Problem Is's picture

Obummer-nomics: No Banker Left Behind (NBLB)

  1. Bondholders made whole; (Think Gross in the WH)...
  2. Geithner announces new HUMP program to help the "little people";
  3. Record Wall Street bonuses;
  4. Tax payers eat another giant shit sandwich and austerity...
Thu, 09/30/2010 - 03:13 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture


 

Moody's rates servicers on a scale of SQ1 as the strongest, to SQ5 as weakest. Currently, the JPMorgan Bank primary servicer rating is at SQ1 on residential and subprime loans. Its primary servicing portfolio totaled roughly 6.8 million loans for an unpaid principal balance of roughly $1.2 trillion as of June 30.


Moody's will assess delinquency transition rates, foreclosure timelines, loan cure rates, recoveries, loan resolution outcomes and REO management of both JPMorgan Chase and Ally. All factors are potentially affected by the foreclosure suspensions.

 

 


http://www.housingwire.com/2010/09/29/moodys-to-review-jpmorgan-chase-se...

Thu, 09/30/2010 - 09:42 | Link to Comment bronzie
bronzie's picture

"Think Gross in the WH"

that's gross!!!

Thu, 09/30/2010 - 15:03 | Link to Comment vachon
vachon's picture

 I was a title searcher for a title insurance comapny in Florida for 10 years and people like me verified foreclosure docs and chain of title requirements.  When the market fell apart, I and 90% of my fellow title insurance workers were laid off.  I subsequently went to work for a very large title chop-shop in Tampa.  What I saw was so horrifying, I quit after a month.  

So like, yeah, I'm shocked...shocked.  Right.

Thu, 09/30/2010 - 00:50 | Link to Comment Number 156
Number 156's picture

I dont know.. I think this will only support housing prices for some time, due to the fact that many homes will be taken out of inventory. 

Thu, 09/30/2010 - 01:05 | Link to Comment bob_dabolina
bob_dabolina's picture

Bank balance sheets will suffer...no new loans = lower prices

This also means lower M2/3, which means, gold prices will get hammered, however relative to other assets it's still the best investment.

Thu, 09/30/2010 - 01:30 | Link to Comment Number 156
Number 156's picture

What about the title insurance companies?

Will they provide a back door bailout to the banks ala AIG?

 

 

Market Share 2007

FAMILY                                   SHARE

First American Corporation    30.04%

Fidelity National Financial      26.40%

LandAmerica                         19.34%

Stewart                                11.73%

Old Republic International    05.48%

Other Regional Companies   07.01%

TOTAL 100.00%

Source: American Land Title Assn

Thu, 09/30/2010 - 04:49 | Link to Comment StychoKiller
StychoKiller's picture

Short'em! Short'em all!

Thu, 09/30/2010 - 00:59 | Link to Comment traderjoe
traderjoe's picture

Can't wait to see CNBC spin this as positive for consumer spending. iGadgets to the max!

Oh, Nakedcapitalism.com has had some good articles on this as well...

Thu, 09/30/2010 - 00:54 | Link to Comment bob_dabolina
bob_dabolina's picture

Yeah...

This is gona be a problem...BIG TIME

I am pulling the remaining funds I have from my bank in the A.M.

I am depositing into a well researched credit union. Enough is enough.

Thu, 09/30/2010 - 00:55 | Link to Comment Clampit
Clampit's picture

Man I LOVE my short sale ... ;-)

Thu, 09/30/2010 - 00:56 | Link to Comment Caviar Emptor
Caviar Emptor's picture

With foreclosures frozen and people not paying mortgages, the next step in the progression will be renting and subletting parts of homes by deadbeat borrowers. That will keep the 99-week crowd afloat, lower neighborhood rents and reduce demand for housing. It's "House Pooling" and it sure can be fun. 

Thu, 09/30/2010 - 01:01 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I thought this would start years ago, but pride has a way of messin' with people.  No one wants anyone else to know that they're foreclosing.  They would rather wilt and go bankrupt.

Thu, 09/30/2010 - 01:05 | Link to Comment Caviar Emptor
Caviar Emptor's picture

But starting today they never need to tell anyone because of the foreclosure moratorium. Deadbeats can now be landlords and make income while living rent free. 

Thu, 09/30/2010 - 01:00 | Link to Comment Arkadaba
Arkadaba's picture

No idea how this will play out but I'm guessing yeah could be big. Stockpiling popcorn!

Thu, 09/30/2010 - 01:04 | Link to Comment Mentaliusanything
Mentaliusanything's picture


“Oh what a tangled web we weave, When first we practice to deceive” Sir Walter Scott

I have to write it, i just have to.

Freeze bitcheez

snowballs chance in hell of winding this web of lies and deception. 

Thu, 09/30/2010 - 01:09 | Link to Comment frankTHE COIN
frankTHE COIN's picture

The MERS system, plus the fraud, could result in 65 million home owners, having their once pre, or  forclosed home, free and clear. The other side that THINKS they have title is fucked.

Thu, 09/30/2010 - 08:38 | Link to Comment csmith
csmith's picture

short FNF NOW!

Thu, 09/30/2010 - 01:12 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Clearly, moving from over-regulation to under-regulation to massive over-regulation will have such effects.

I remember, when I first landed in America, in 1995, I thought I'd landed in paradise. Coming from a chaotic India, everything seemed so smooth and effortless. And of course I believed the rhetoric of the US being the least corrupt nation on earth.

Fast forward to 2006 (when I left), the wool had been pulled firmly from my eyes. Stints in upper management of one of the largest Defense(Ha!) contractors, a wild ride up and down the .con revolution, a close-up and personal view of the housing fiasco, where a broke and actually illegal (shhhhhhh!) me could land a million dollar Ninja loan. In Kullyfornia of course.

Ahhhhhh.....the slow, painful shedding of inner-eye cataracts, one at a time. Painful but I'm grateful.

Feeling nostalgic!
Hmmmmm......

ORI

http://aadivaahan.wordpress.com

Thu, 09/30/2010 - 01:31 | Link to Comment JLee2027
JLee2027's picture

Corruption is a side effect of fiat currency..it's gotten progressively worse...try us again after the system flushes...you'll be amazed.

Thu, 09/30/2010 - 07:13 | Link to Comment Oh regional Indian
Oh regional Indian's picture

I hear you JLee. It's never the people. 

Awesome people, awesome land. 

Totally screwed governance and of course the web of deceit, now openly unraveling.

If I ever dream of being back there, it is with the good memories.

ORI

Thu, 09/30/2010 - 04:56 | Link to Comment anonnn
anonnn's picture

Thanks your fine post.

The .con revolution. Precious viewpoint  and probably not typo.

The.con BlackSwan

 

Thu, 09/30/2010 - 07:15 | Link to Comment Oh regional Indian
Oh regional Indian's picture

.con indeed! No typo there!

:-)

Thu, 09/30/2010 - 01:12 | Link to Comment SheepDog-One
SheepDog-One's picture

Man Id love to see that sudden 2,000 point down day just to record the CNBC personalities in wide eyed panic, make sure to burn it to DVD.

Thu, 09/30/2010 - 01:28 | Link to Comment Fearless Rick
Fearless Rick's picture

As a proud resident of a home in foreclosure, I guess I should say something, but I'm too stunned at my good luck. The home isn't even mine, never was. I inherited it from my father last year along with the horribly fraudulent Cuntrywide mortgage.

In the immortal words of Diane Keaton, from "Annie Hall", La dee da...

Hey, you bankers over at BofA, where's da note, bitchez?

Thu, 09/30/2010 - 01:32 | Link to Comment Everyman
Everyman's picture

Title, Bitchez!

Thu, 09/30/2010 - 01:40 | Link to Comment macktheknife
macktheknife's picture

OK, sorry in advance, I am responding to a Mscreant and Slauwys post from a week ago, but no way anyone will go back that far.   I wanted to thank Mscreant and Slauwys for a post last week

Wow Mscreant and Slauwys.  Both of you have made a step towards regaining my faith in humanity.  I am so happy that people take the time to follow a response thru.  I can't belioeve that I actually went all the way back to this thread, just to see if anyone had thrown down some breadcrumbs.   Likely no one will come back to this- but the thought is appreciated.  My participation on this site is kind of hit and run, but what I put down here is heartfelt, and I hope to get others to see the questions I see.  For the record, Mscreant, that comment I wrote a few weeks ago about doing awful things in Mogadishu -was, of course, just made up- it saddened me that it saddened you.  It was like people who read Hannibal Lecter books, suddenly believed that the author had actually done those things.  I guess I should be happy that my skills of fiction are good enough that it was believed.  Anyway,  over my first months on ZH, I was reminded os overnight horse camp, Winnimac NH, 1972.  I noticed after my first few posts, that Turd and Hulk and Rocky and Crockett,  kind of went out of their way to respond to me - it felt like those older, bigger campers choosing a younger kid to kind of protect - it was an amazing feeling back at camp- and it is such a rare feeling to experience now-  but that is how I feel now on ZH- and I thank the wiser kids for standing a little behind me, so I am not the first to get hit with water balloon.  You know, also,  as much as I am annoyed by Johheny Bravo and Kathy C -  they are somehow required in this mix- they really are-  if everyone always speaks clearly and correctly, they offer no fodder for our zealous responses.  Anyway, I have been following this site closely for 4 months, and I can see who the grownups are, and thanks goes out to Mscreant and Turd, and Roccky and Crokett; and I miss Chumbawumba.

Thu, 09/30/2010 - 01:42 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Nikkei down 150 1.5%

Dow Future down 27, tomorrow could get ugly,fast.

Thu, 09/30/2010 - 01:50 | Link to Comment Irrational Exub...
Irrational Exuberance's picture

You're Wrong!

There's a FED POMO on Thursday!  Market may be down in the morning, but will close even or in the green.  Thursday is easy free money!  However...I wouldn't hold any positions overnight!

Thu, 09/30/2010 - 02:19 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

I think the mortgage fraud story and how it plays out across the globe will over run pomo~

Pomo is a fraud also, heavy volume selling will trump pomo tomorrow, book it ...

I thinky dow down 100 before the bell, heavy selling all day.

 

 

 

UPDATE Nikkei now down 2% on bad news.

Japan output drop adds pressure on BOJ to ease

* Aug industrial output dips 0.3 pct vs forecast 1.1 pct rise

* Manufacturers see Sept output off 0.1 pct, Oct down 2.9 pct

* Export slowdown, strong yen bode ill as stimulus fades

* Grim manufacturing outlook adds pressure for policy easing

TOKYO, Sept 30 (Reuters) - Japan's industrial output unexpectedly fell in August as a slowdown in export growth begins to weigh down Japan's fragile economic recovery, boosting chances of easing by the Bank of Japan at next week's policy meeting.

The output slide, which extended to its third month with August's 0.3 percent drop, is expected to worsen later this year, manufacturers surveyed by the industry ministry.

It adds to bad news from a separate survey showing Japanese manufacturing activity in September shrank for the first time in 15 months, while a key central bank survey of corporate sentiment on Wednesday showed big manufacturers expected the outlook to worsen for the first time 2008.

"It's very negative," said Seiji Adachi, senior economist at Deutsche Securities in Tokyo, of the industrial output data.

Thu, 09/30/2010 - 02:31 | Link to Comment Problem Is
Problem Is's picture

"There's a FED POMO on Thursday! "

Is the FED like Tulane Univ., IrrEx?
The Green Wave?

Thu, 09/30/2010 - 06:37 | Link to Comment papaswamp
papaswamp's picture

depends on how UE and GDP plays out at 8:30. The foreclosure business is very slow to creap into people's minds and complicated for the average person. What will turn this is the first family to be kicked out of their home because the bank they bought it from didn't have the legal right to take the property from the previous owner. House across the street was foreclosed on and previous occupants kicked out. Now a new family has moved in. What happens to them? The potential mess is massive.

Thu, 09/30/2010 - 08:21 | Link to Comment sumo
sumo's picture

Managed money might sell off financials after the POMO pump.

Thu, 09/30/2010 - 01:52 | Link to Comment traderjoe
traderjoe's picture

Jobless claims, which I think will miss, will set the tone. A weak Chicago PMI might tip the market that Manufacturing PMI on Friday will miss (which means they lower expectations so it won't 'miss'). A bailout of the other Irish bank this morning in Europe would be a negative. Ireland is teetering.

But tomorrow is a POMO day, FYI. I don't have the numbers, but I think only one POMO day has been negative...

Thu, 09/30/2010 - 01:58 | Link to Comment Arkadaba
Arkadaba's picture

Would be interesting to look at Market correlations with POMO days - I don't have the data either (or the bandwidth to pull it together) - maybe someone else will? Would like to see that graph.

Thu, 09/30/2010 - 02:51 | Link to Comment decon
decon's picture

15 POMO days, 8 up, 7 down, but high correlation to XAU on an hourly chart.

Thu, 09/30/2010 - 03:11 | Link to Comment Arkadaba
Arkadaba's picture

thanks!

Thu, 09/30/2010 - 05:43 | Link to Comment Iam Rich
Iam Rich's picture

How many down days started out 2.2% down then finished down 0.2%?  Seems a few times out there bad news was somehow just washed away.

Thu, 09/30/2010 - 06:27 | Link to Comment Bringin It
Bringin It's picture

Thanks.

Thu, 09/30/2010 - 05:47 | Link to Comment nmewn
Thu, 09/30/2010 - 01:57 | Link to Comment foofoojin
foofoojin's picture

so what your telling me is:

* That the banks are in trouble.

* Right before the election one major financial institution gonna wake up dead( ala Lehman Brothers 2.0)

* Two days later fed intervenes at another financial institution because " systemic risk"

* Guaranteed disaster. end of the financial system as we know it.

* Tarp 2.0.

Am I close? do i win the booby prize?

Thu, 09/30/2010 - 04:56 | Link to Comment StychoKiller
StychoKiller's picture

Re:  TARP 2.0 -- how many Decepticrats or Republicons are gonna get anywhere near that 100,000V power line in an election season?  Bernanke and Giethner would have to strip naked and offer all kinds of degrading sex acts to any Congress critter stupid enough to get close to them!

Thu, 09/30/2010 - 06:38 | Link to Comment papaswamp
papaswamp's picture

TARP 2 is a lame duck action and would take place after the election.

Fri, 10/01/2010 - 17:09 | Link to Comment Geoff-UK
Geoff-UK's picture

QE2 and TARP 2 are a virtual LOCK to happen during lame-duck congress.

They'll have nothing to lose.

Thu, 09/30/2010 - 02:01 | Link to Comment LostWages
LostWages's picture

I do residental property valuations for the banks here in Las Vegas.  I do about 200 per month and have been for 3 years. 

Two days ago I got about a dozen orders to value Wells Fargo properties and noticed they are all rented out.  The tax records show WFC foreclosed on them in 2008 and early 2009 and were never re-sold.  WFC is the owner of record still.

WFC has been holding them on their books and renting them out.  I have not come across this before.  I thought once they foreclosed, they had to get them off their books and sell them.

This didn't turn out too good for WFC either, the values are all down another 30-40% since they foreclosed....so holding them and renting them out backfired on them.

More fraud?

Thu, 09/30/2010 - 06:51 | Link to Comment Freewheelin Franklin
Freewheelin Franklin's picture

I think it's better to have people in the houses, even if they have been foreclosed. Empty houses degrade much quicker. Eventually, their values will drop to what the cost of demolition is.

Thu, 09/30/2010 - 02:43 | Link to Comment Squid-puppets a...
Squid-puppets a-go-go's picture

Not only is this a win for the little guy, but if I surmise it correctly (certainly no guarantees there) we are talking about a spoke in the wheel of deflation

Thu, 09/30/2010 - 06:30 | Link to Comment Bringin It
Bringin It's picture

Looks like a win for everybody in insane-econoland.  The little guy gets to stay put and the banks can do away with MTM.  Party on Wayne!  Party on Garth!

Thu, 09/30/2010 - 06:44 | Link to Comment Mercury
Mercury's picture

I guarantee you it won't be a win for the taxpayer.

Just because a homeowner doesn't legally owe mortgage payments to the bank that is trying to foreclose on his property doesn't mean that he doesn't owe money to someone.  So he lucks out and essentially defaults with no consequence. Who do you think is ultimately going to pick up the tab for that default?

Thu, 09/30/2010 - 07:54 | Link to Comment Bringin It
Bringin It's picture

Merc - /sarcasm-off

 

Ok, carry on.

Thu, 09/30/2010 - 08:50 | Link to Comment AbbeBrel
AbbeBrel's picture

Keep in mind that part of the tab is property taxes.   Rationally (but not ethically) it makes sense to not pay your mortgage or your property taxes.   Therefore at property tax time we can expect a drop in $rev for the states.

My guess is we can expect a whole new layer of Fedster-units in a shiny new bureau dedicated to figuring out who owns what, thus pulling more power from the states.   Keep in mind that mortgage recording has historically been a local phenomenon.   The Feds won't pass up a chance to consolidate more power in controlling the private property market to help out the poor bankrupt Statesies.   This is going to be a fascinating political horse-trading process : compare the conversation with California (whining for Fedster help) and Texas (who will likely say "Get Lost, Fedsters").   Entertaining.   I guess one positive note - at least something is written down for who owns the note - compared to Greece (referencing the vastly entertaining Vanity Fair article:

Beware of Greeks Bearing Bonds

) - where it appears that nobody writes anything down nowhow anywhere about property transactions.

Thu, 09/30/2010 - 09:36 | Link to Comment Mercury
Mercury's picture

Rationally (but not ethically) it makes sense to not pay your mortgage or your property taxes.

Your local municipality doesn't need to know or care about who actually owns your mortgage.  If you don't pay your property taxes, they will, quite legally,  take your property.

I can also imagine a situation where some third party shows up and starts paying your property taxes in arrears and the (likely financially desperate) municipality decides (perhaps not so legally) to help smooth the way toward that third party taking legal possession of your property.

Thu, 09/30/2010 - 17:21 | Link to Comment theprofromdover
theprofromdover's picture

".. My guess is we can expect a whole new layer of Fedster-units in a shiny new bureau.."

That would be already in progress, camouflaged as loads of new staff and facilities for that great misnomer Homeland Security.


Thu, 09/30/2010 - 02:56 | Link to Comment Arkadaba
Arkadaba's picture

+1000 (or collect - I guess time will tell ;)

Thu, 09/30/2010 - 03:04 | Link to Comment Marc45
Marc45's picture

You would think that if there's a title problem, then it would get caught prior to signing docs.  Otherwise, the title company gets hit.

It seems like a gray area if the forclosure is started by a non-title holder but then title is still passed on after a sale.  Or what if the title holder says they're ok with the forclosure and sale even though it wasn't done by them.  I also wonder if the servicers have some sort of lein built into their deal with the banks.  That would make them eligible to forclose.

This is all a moot point if the idea is really to stop the avalanche of soon-to-happen forclosures at all cost.

Thu, 09/30/2010 - 06:32 | Link to Comment Bringin It
Bringin It's picture

You would think ... it would get caught prior to signing docs.

From personal experience, I can say do not underestimate the title company's potential for sleaze.

Thu, 09/30/2010 - 03:15 | Link to Comment sushi
sushi's picture

I thought this was an example of US financial innovation - being able to sell the sane property twice, levy multiple fees on both transactions while at the same time providing no-cost social housing and assuring lawyers of full employment.

It's America - Yes, We Can!! - Even when it's fraudulent.

Thu, 09/30/2010 - 06:35 | Link to Comment Bringin It
Bringin It's picture

And you can sell MBS (Mortgage Backed Securities) to the Euros and Asians that are not backed by anything.  I mean it's like a license to print money.  Brilliant!!

Thu, 09/30/2010 - 04:39 | Link to Comment mophead
mophead's picture

WILSON v. BANK OF AMERICA CORPORATION, N.A.

September 27, 2010.

...

This matter is before the Court on defendants' motion to dismiss plaintiffs' complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6).

...

From the complaint it would appear this suit involves loans taken out on three residential properties located at: 480 Speyer Place, Saint Charles, MO 63303; 4127 Juniata, Saint Louis, MO 63116; and 4100 Wyoming, Saint Louis, MO 63116. Plaintiffs Anita R. Wilson and Alexis Wilson, have filed a three-count complaint against defendants Bank of America Corporation, N.A. ("Bank of America"), Brian T. Moynihan, Neil A. Cotty, and Barbara J. Desoer[ 1 ] with respect to these three properties. Plaintiffs, who are proceeding pro so, allege fraud in the inducement, fraud in fact, and material misrepresentation. Plaintiffs may also be attempting to bring claims under 42 U.S.C. §1983, and various other federal statutes. For relief, plaintiffs ask the Court to discharge all of their mortgage debt, release all of the liens and deeds on the properties, and remove all negative items from all major credit bureaus. Plaintiffs also demand $367,000.00 in punitive damages.

$367K in addition to keeping the properties!?? Talk about overdoing your welcome.

In response to plaintiffs' complaint, defendants filed a motion to dismiss. Defendants argue plaintiffs' complaint is devoid of the necessary facts required to support their claims, and that it merely contains general conclusions, legal allegations, and inflammatory statements. Defendants also argue that the complaint is plead in such a manner that they are unable to understand what plaintiffs' claims are or the grounds upon which their claims rest.

...

Accordingly,

IT IS HEREBY ORDERED that defendants' motion to dismiss [Doc. 9] is GRANTED, and plaintiffs' complaint is DISMISSED with prejudice. An appropriate Order of Dismissal will accompany this Memorandum and Order.

IT IS FURTHER ORDERED that plaintiffs' motion to compel discovery, motion to produce documents, and motion for a jury trial are DENIED as moot.

 

I have to side with the judge. Two wrongs don't make a right. Banks may be the root of all evil, but there's no excuse for trying to work the system in this kind of way. If you disagree, then you should consider who ends up covering the losses? Hint: it's not the banks.

Linky:

http://www.leagle.com/unsecure/page.htm?shortname=infdco20100927926

 

 

 

Thu, 09/30/2010 - 07:39 | Link to Comment Bob
Bob's picture

Not every defrauded homeowner is gonna bring actions "pro so" [sic].  When highly motivated and skilled lawyers start bringing these cases, look for different outcomes. 

Thu, 09/30/2010 - 09:04 | Link to Comment kayl
kayl's picture

You've got a paper bag over your head. The Bank has no security interest and defrauded the plaintiffs by failure to disclose the material terms and conditions of the mortgage contract. The defendants withheld the plaintiffs' credit and probably did not file their 1099OID paying for the tax on the credit they created. They should have sent a letter of complaint to the Office of the Comptroller of the Currency.

Pro se doesn't go well if you don't bond up your own case and file the SF23, 24, 25 forms yourself with the court clerk.

I think it is easier to discharge the debt on paper and show the courts you have attempted to discharge three times. The bank's refusal to accept discharge is an offense against the currency laws, and the debtor/creditor can claim restitution.

Thu, 09/30/2010 - 10:00 | Link to Comment JLee2027
JLee2027's picture

You've got a paper bag over your head.

Kinda funny you said that considering your icon...

Fri, 10/01/2010 - 08:47 | Link to Comment kayl
kayl's picture

Sweet irony... :)

But you are the one who hasn't read Modern Money Mechanics posted at the Federal Reserve.

Thu, 09/30/2010 - 04:52 | Link to Comment Zerohedge fan
Zerohedge fan's picture

...give me back my house, you scam bankster. You never even owned it.

http://www.youtube.com/watch?v=iicB80Mwz8w&feature=related

Thu, 09/30/2010 - 04:57 | Link to Comment MarketTruth
MarketTruth's picture

FLASH FORWARD TO MID OCTOBER 2010

And CNBC will spin this lack of foreclosures as "A great improvement in the market as fewer homes are foreclosed on. The market must be going higher due to these great results just released. The recovery is moving forward right into the expected greatly improved holiday season for retailers."

Everything is just great. Great great great great.

 

Thu, 09/30/2010 - 05:32 | Link to Comment John McCloy
John McCloy's picture

   Another large implication is that the stall may turn out to be a flat out brick wall in foreclosure sales. The banks will not waste their time selling until if ever this paperwork is tracked down and consumers will be reluctant to purchase since I would suspect we will have 2-3 months worth of foreclosure horror stories.

Thu, 09/30/2010 - 07:17 | Link to Comment Mercury
Mercury's picture

Great, if the stock market "flash-crashes" or something else irregular happens the NASD may step in and arbitrarily unwind your trades.  If you buy residential RE, well that might end up  in "redo" status too.  Other than that (and HFT, ZIRP etc.) America's capital markets are a national treasure...

Thu, 09/30/2010 - 06:59 | Link to Comment Buttcathead
Buttcathead's picture

I still aint buy'n nuttin...  it's a scam.

Thu, 09/30/2010 - 07:57 | Link to Comment Bringin It
Bringin It's picture

Buttcathead - I remember you.  Welcome welcome to the show.

[disclaimer  I think I copied you consonant dropping thing.]

Thu, 09/30/2010 - 07:12 | Link to Comment doggis
doggis's picture

TD - can we please go after SECRETARY TIM GEITHNER please - as usual his fingerprints are all over this FRAUD! Christmas eve of 2009 he announces that the government will cover COMPLETELY AND INFINITELY, THE LOSSES OF FREDDIE AND FANNIE......WHY!!!!???? Did he participate in this scam! DID HE CREATE THIS SCAM in order to keep RMBS from collapsing.....i was always wondering where the flow of funds came from to keep paying the RMBS and here it is....The government covers up this FRAUD with tax payer money on the back end and covers the losses, and the banks keep the ill gotten gains continue the RMBS 'kick the can into the future game' and pay interest out, and  the people yet again F####D!!!!!.... TD PLEEEEAAASSE expose TIM for what his is!!!!

Thu, 09/30/2010 - 07:29 | Link to Comment Instant Karma
Instant Karma's picture

Weird stuff. With all the securitization of the mortgage, it's unclear who, really, holds it. Because only the holder of the mortgage is entitled (a pun) to foreclose on said property. And people gobbling up foreclosed properties from banks may have purchased properties from an entity not in true ownership of said property. Like me selling you the Empire State building. Interesting. I wouldn't bet on the banks losing, however, unless it fits with the political ambitions of the fascists in power.

Thu, 09/30/2010 - 07:38 | Link to Comment economicmorphine
economicmorphine's picture

Transaction unwinds?  Bullshit.  This is very easy to fix.  Simply pass the "Mortgage Rewind Title's In the Mail Act of 2010" which makes selling without a title just fine.  I mean, if we could abandon mark to market and screw the Indiana bondholders, this one's a piece of cake.  All my bill needs is a sponsor.  Barney?  Harry?  Donde estamos?

Thu, 09/30/2010 - 11:20 | Link to Comment macholatte
macholatte's picture

..... the ghouls will come out during the lame duck session and make a lot of changes.   

This situation, as you have correctly pointed out, will be a simple fix buried in the middle of the "Screw Amerika Again Act" totally bought and paid for by the banksters with borrowed money, printed by the Fed and guaranteed by the tax payor and endorsed by the MSM as the right thing to do. 

 

Be extremely subtle, even to the point of formlessness. Be extremely mysterious, even to the point of soundlessness. Thereby you can be the director of the opponent's fate.
Sun Tzu

 

 

Thu, 09/30/2010 - 07:42 | Link to Comment Bob
Bob's picture

Interesting that a rating agency is getting right on the stick all of a sudden.  Given that the MBS ponzi could never have happened without their active support from the get go, me wonders if they're scrambling for some plausible deniability. 

Thu, 09/30/2010 - 08:00 | Link to Comment Mako
Mako's picture

It's planned FUBAR.

1.) an attorney in court foreclosing or collecting a debt is a debt collector and has no standing

2.) a trustee, nominee, servicer, etc have no standing because they are NOT the holder in due course

3.) even if the note could be found

4.) assignments are messed up

5.) although the mortgage docs say a loan was given, no loan was given and matter of fact it would illegal for the banks to give you a loan... bank don't and can't lend their own credit

6.) banks can't show a loss because there was nothing for them to lose, they do not lend their own credit

READ the Modern Money Mechanics by the Federal Reserve

 

Thu, 09/30/2010 - 08:00 | Link to Comment Quinvarius
Quinvarius's picture

I get the feeling that the US taxpayer is about to pay for all these houses a second time.

Thu, 09/30/2010 - 09:55 | Link to Comment Zerohedge fan
Zerohedge fan's picture

upps!

double penetration

Thu, 09/30/2010 - 08:05 | Link to Comment MsCreant
MsCreant's picture

Uhhhh, is it as hard to determine the title on commercial real estate? It got spliced, tranched, packaged, sold, resold, repackaged, a few times too. Could some of the same shenanigans have gone on there? Document fraud? Wrong entity foreclosing?

Heh, heh, heh. Heh, heh, heh.

Thu, 09/30/2010 - 08:13 | Link to Comment poorold
poorold's picture

I'm surprised that the conventional wisdom being spouted that short sales or bank-owned properties are sold at lower average prices than "regular" sales has not been challenged or dispelled.

Properties sell for what a buyer is willing to pay.

Soes anyone really think because Mr. & Mrs. Smith are listing their house for $200,000 and Wells Farg is listing the identical house down the street for $150,000...that a buyer is going to pay Mr. & Mrs. Smith $200,000 because the Smith's own the home.

 

What a joke.  The local municipalities use this ruse to label sales as "distressed" and value the property higher than the sales price for tax purposes.

Thu, 09/30/2010 - 08:47 | Link to Comment kayl
kayl's picture

Mako, rock on!

We know exactly who those houses belong to: the holder in due course and the CREDITOR with a security interest. File your UCC 1 Financing statements and make sure to include that you own all LIENS placed against your DEBTOR.

Also send your 1099OID with the amount of the mortgage to the "so called" lender. You are the individual who owns the debt and the house. File a 1099C form indicating the bank abandoned the funds.

Screw the banks.

Thu, 09/30/2010 - 09:06 | Link to Comment Waterfallsparkles
Waterfallsparkles's picture

Interesting that the Government is now selling its stake in AIG and C now. 

Thu, 09/30/2010 - 09:19 | Link to Comment curbyourrisk
curbyourrisk's picture

"Marked not at PAR, but at ZERO"

 

I call bullshit on this Tyler.  You know as well as anyone out here.  THE BANKS MAKE THE LAWS.  A simple wave of the pen and all will be resolved.  New laws....banks saved.....government now owns the real estate.....  WE ARE FUCKED AGAIN!!!

Thu, 09/30/2010 - 09:42 | Link to Comment Fearless Rick
Fearless Rick's picture

No mainstream media reporting on this whatsoever, which means TPTB are scared to death. The defeaning silence you (don't) hear is that of mortgage bankers scrambling to get their personal belingings out of their desks while trying to book a flight out of the country.

If the banks truly do not own the properties or the paperwork is all FUBAR - it is - this is the end. Smart homeowners have been strategically defaulting or challenging foreclosures for the past two years. It's an ongoing story which will take years to play out in the courts. If bad title becomes a well-known norm, the snowball effect will suck the US economy into a black hole.

Prepare for a false flag event in October. Already there are reports of Al Queda planning mass assaults in europe and the US, and whenever reports of possible terrorist strikes are announced, you can be pretty certain there's going to be one soon. With the election coming, it makes perfect sense, especially if you're a repub-teabagger douche bag, with the scenario being, see, Obama and the Dems are soft on terrorism. Dump 'em, they can't protect us.

Fear and loathing everywhere. Cover-up the obvious bank failures, inpose martial law so that nobody feels safe in their own home, whether they own it or not.

Doomsday is approaching quicker than I can buy enough silver and gold to tide me over. Get out and buy some bottled water and canned goods. It may be a long slog.

Thu, 09/30/2010 - 12:39 | Link to Comment Common_Cents22
Common_Cents22's picture

Does anyone really thing CONgress will sit there and let the banks hold the RE bag?

 

Fear mongering and too big to fail people.

Fri, 10/01/2010 - 17:19 | Link to Comment Geoff-UK
Geoff-UK's picture

Uncle Obama declares all mortgages are hereby paid by him (mortgage-holders rejoice!),

Tim and Ben print money and mail it to banks as payment (bankers rejoice!),

gold flies to $15,000 (I explode in my pants with excitement!),

everybody wins!

 

P.S.  Please do not ask about future taxes re: above plan--OMB doesn't have those numbers yet.

Sat, 10/09/2010 - 09:41 | Link to Comment senthil456
senthil456's picture

There are certainly a lot of details like that to take into consideration.I read and understand the entire article and I really enjoyed it to be honest.
cheap vps | windows vps | forex vps

Fri, 02/25/2011 - 07:16 | Link to Comment george22
george22's picture

No mainstream media reporting on this whatsoever, which means TPTB are scared to death. The defeaning silence you (don't) hear is that of mortgage bankers scrambling to get their personal belingings out of their desks while trying to book a flight out of the country. If the banks truly do not own the properties or the paperwork is all FUBAR - it is - this is the end. Smart homeowners have been strategically defaulting or challenging foreclosures for the past two years. It's an ongoing story which will take years to play out in the courts. If bad title becomes a well-known norm, the snowball effect will suck the US economy into a black hole. breguet watch|646-656|642-533|jewelry

Sat, 03/05/2011 - 05:47 | Link to Comment shawnlee
shawnlee's picture

If the banks truly do not own the properties or the paperwork is all FUBAR - it is - this is the end. Smart homeowners have been strategically defaulting or challenging foreclosures for the past two years. It's an ongoing story which will take years to play out in the courts. If bad title becomes a well-known norm, the snowball effect will suck the US economy into a black hole.links of london

Do NOT follow this link or you will be banned from the site!