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December Foreclosure Filings Slump By Biggest Annual Amount In History As Fraudclosure Clampdown Persists
RealtyTrac has reported its December foreclosure data: at a total of 257,747 default notices, foreclosure auctions and bank repossessions, total foreclosure activity dropped by 1.8% in December and 26.3% from a year earlier, "the biggest annual drop in foreclosure activity since RealtyTrac began publishing its foreclosure report in January 2005 and giving December the lowest monthly total since June 2008." Specifically, December Default notices (NOD, LIS) decreased 4 percent from the previous month and were down 35 percent from December 2009; Scheduled foreclosure auctions (NTS, NFS) decreased 3 percent from the previous month and were down 20 percent from December 2009; and bank repossessions (REO) increased nearly 4 percent from the previous month — thanks in part to substantial month-over-month increases in some states such as Nevada (71 percent increase), Arizona (52 percent increase) and California (47 percent increase) — but were still down 24 percent from December 2009. As a result total Q4 foreclosure activity was 2,871,891: an increase of 2% from 2009 and 23% from 2008.
From RealtyTrac:
“Total properties receiving foreclosure filings would have easily exceeded 3 million in 2010 had it not been for the fourth quarter drop in foreclosure activity — triggered primarily by the continuing controversy surrounding foreclosure documentation and procedures that prompted many major lenders to temporarily halt some foreclosure proceedings,” said James J. Saccacio, chief executive officer of RealtyTrac. “Even so, 2010 foreclosure activity still hit a record high for our report, and many of the foreclosure proceedings that were stopped in late 2010 — which we estimate may be as high as a quarter million — will likely be re-started and add to the numbers in early 2011.”
Not surprisingly, in the absence of a true clearing mechanism, the bubble states continue to demonstrate massive excess inventory:
Five states accounted for 51 percent of the nation’s total foreclosure activity in 2010: California, Florida, Arizona, Illinois and Michigan. Together these five states documented nearly 1.5 million properties receiving a foreclosure filing during the year despite annual decreases in the three states with the most foreclosure activity.
A total of 546,669 California properties received a foreclosure filing in 2010, a decrease of nearly 14 percent from 2009 but still the largest state total. After hitting a two-year low in November, California foreclosure activity rebounded nearly 15 percent higher in December but was still down 18 percent from December 2009.
Florida posted the nation’s second biggest total in 2010, with 485,286 properties receiving a foreclosure filing — a 6 percent decrease from 2009. Florida foreclosure activity in December hit the lowest monthly level since July 2007, down 22 percent from the previous month and down nearly 54 percent from December 2009.
A total of 155,878 Arizona properties received a foreclosure filing in 2010, a 4 percent decrease from 2009 but the third biggest state total for the third straight year. Arizona foreclosure activity in December jumped nearly 31 percent higher from a 32-month low in November, but was still down nearly 33 percent from December 2009.
Illinois posted the fourth biggest state total, with 151,304 properties receiving a foreclosure filing in 2010, and Michigan posted the fifth biggest state total, with 135,874 properties receiving a foreclosure filing during the year. Foreclosure activity in both states increased about 15 percent from 2009.
Other states with 2010 totals among the 10 biggest in the country were Georgia (130,966), Texas (118,923), Ohio (108,160), Nevada (106,160), and New Jersey (64,808).
One thing is certain: in the aftermath of the Ibanez decision, with nobody having any clue who owns what and thus has no legal claim to seek damages or reposession, look for the total number of foreclosures to continue declining, as banks are now forced to represent that things are better and just allow those who have refused to pay their mortgages to live in the home indefinitely, without commencing futile and costly legal proceedings. This would be funny if its wasn't tragic.
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Obama's new 2012 election promise will be:
FREE CARDBOARD BOXES/HOUSES FOR EVERYBODY!!
YES WE CAN, WILL AND DO!!
Instead of a chicken in every pot, pot with every chicken.
And yet, the bid/ask for BAC this morning is 15.04/15.06.
Bizarro world. I'll just turn my laptop upside down now so that I can understand the market.
the bankers have a lot of stock vesting this month, and there is a mutual agreement to prop up each others share prices. All the talk about reinstating dividends is designed to help this. All negatives will be ignored...
Time to pack a thermos and congregate upon the capital
It is possible that forclosure activity could slow down for months to come without any impact on bank balance sheets. The banks have been gifted with the ability to book phantom income from nonperforming loans. It is clear now that stopping foreclosures is NOT any problem whatsoever for the banks...if only the rest of us could do our accounting this way...we'd be rich, bitchez!!!
From Forbes Magazine:
US Banks Reporting Phantom Income on $1.4 Trillion Delinquent Mortgages Jan. 12 2011 - 8:36 am By ROBERT LENZNERThe giant US banks have been bailed out again from huge potential writeoffs by loosey-goosey accounting accepted by the accounting profession and the regulators.
They are allowed to accrue interest on non-performing mortgages ” until the actual foreclosure takes place, which on average takes about 16 months.
All the phantom interest that is not actually collected is booked as income until the actual act of foreclosure. As a resullt, many bank financial statements actually look much better than they actually are. At foreclosure all the phantom income comes off gthe books of the banks.
This means that Bank of America, Citigroup, JP Morgan and Wells Fargo, among hundreds of other smaller institutions, can report interest due them, but not paid, on an estimated $1.4 trillion of face value mortgages on the 7 million homes that are in the process of being foreclosed.
Ultimately, these banks face a potential loss of $1 trillion on nonperforming loans, suggests Madeleine Schnapp, director of macro-economic research at Trim-Tabs, an economic consulting firm 24.5% owned by Goldman Sachs.
The potential writeoffs could be even larger should home prices continue to weaken, placing more homes in the nomnperforming category on bank balance sheets.
About 6 million homes are still at risk, according to Schnapp, and at least 10% of them are 25% underwater, meaning their market value is 25% less than the mortgage– but the owners are still paying interest to their banks.
Precisely!!! No foreclosures and accompanying mortgage sales means no loss realization on banks income statements, and inflated assets on the balance sheets. This whole "mess" may also help re-ignite the construction industry as new home buyers become afraid of having clear title to existing homes.
Things that make you go hmmmmmm!
Does Wal-Mart accept phantom income as payment for HD TeeVees?
as the inventory of unsold homes grows - staying rent free in quasi foreclosed homes- is a benefit to both bank and homeowner..at least the bank has someone keeping the house up who it does not need to pay. the homeowner gets free rent.
kinda hard on homebuilders..can we get cost/sq foot down to $20.00 YES WE CAN.
Yep, bullish for the banks. They don't have to book the loses. They can claim all the phantom interest payments on the homes that aren't making payments. BTD.