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Double Dip In Housing Largely Caused By Failure to Prosecute Mortgage Fraud
There's a double-dip in housing prices (and see this).
As CNN points out:
U.S. home prices fell 2% in the third quarter after having gained steadily since early 2009.
The
S&P Case-Shiller Home Price Index has recorded gains in four of
the previous five quarters, including a 4.7% jump between April and
June 2010. That leaves national home prices down 1.5% year over year
and off 2% compared to the second quarter, according to the Index,
which was released Tuesday.***
The
inventory of homes is high with nearly 3.9 million on the market in
October, according to the National Association of Realtors. That means
it would take 10.5 months to sell through all of the current inventory.
In a normal market, there is usually a six-month supply.
Plus,
there's a massive shadow inventory of homes waiting in the wings.
These are homes that are deeply in the foreclosure process or even
repossessed by banks but not yet put back on the market.
Much of the massive shadow inventory of homes is due to the fraud involved with mortgage documents.
As CNN notes in a second article:
Big
banks are having trouble restarting the foreclosure process after this
fall's "robo-signing" scandal, and the once booming market for
foreclosed homes has been hit hard as a result.
According
to ForeclosureRadar, the number of properties coming to auction in
hard-hit western states -- Arizona, California and Nevada -- has dropped
more than 30%.***
Investors had
been doing brisk business, buying distressed properties on the cheap,
sprucing them up and flipping them. But now they are being far more
cautious.
"Their concern is that
homeowners will be more aggressive in fighting foreclosures even after
the auction sale," said Sean O'Toole, CEO of ForeclosureRadar.
For vulture investors, speed is essential -- they do not want to tie up investments for months while attorneys argue.
They are also worried about being able to unload the property.***
Pressure
on the market for distressed properties could last if delinquent
borrowers are less likely to give up on their homes, according to Duane
LeGate, CEO of Georgia-based House Buyer Network.
***LeGate
says his business dropped more than 30% the week after news of the
robo-signing scandal broke, and has stayed down since. His theory:
homeowners think the bank will have a tough time kicking them out in
this environment, and that they can live for free for a while. He says
he's got two friends who intend to do just that.
Reuters reports: Shadow inventory is seen as one of the chief threats to the fragile housing market that is showing new signs of weakening. *** Adding The *** What's more, buyers of distressed The poll found
And Zack's Investment Research writes:
to the problems are errors in processing tens of thousands of
foreclosure cases at Bank of America Corp, the largest U.S. mortgage
servicer, and other financial institutions.
massive failure to provide proper documentation in court has resulted
in delays to an already lengthy processes of repossessing homes,
leading to a backlog in paperwork and repossessions as the companies
fix their procedures. The banks are also facing a nationwide probe by
state attorneys general.
properties have become gun shy due to the foreclosure processing
problems, according to a Campbell/Inside Mortgage Finance survey of
real estate agents.
14 percent of owner-occupant homebuyers and 6 percent of investors
refused to view foreclosed properties in October.
Foreclosures have slowed recently, but that is only because of the fraudclosure
scandal, where the banks have proved to be exceptionally incompetent
in handling the paperwork related to securitized mortgages. Basically,
they can’t really prove that they hold the mortgage, and thus don’t
have the right to foreclose.It remains to be seen just how big a
problem that will prove to be. It could just be a technical glitch
that will gum up the works for a few months, or it could be a HUGE
problem that once again undermines the solvency of the entire banking
system.***
What is clear is that what [Bank of America,
Wells Fargo and other big banks] were doing was illegal and at least
technically constituted fraud and misrepresentation to the courts.There
should be more than a handful of bankers who end up with long terms in
prison as a result. Just because there should, however, does not mean
that there will be. White-collar crime is simply not taken seriously in
this country relative to blue collar or street crime, even though the
amount stolen with a pen far exceeds the amount stolen with a gun.
For those who doubt that fraud is rampant in the mortgage paperwork mess, see this, this, this, this, this and this .
There are obviously other factors
responsible for the softening housing market, such as the end of
government stimulus programs regarding housing, and poor employment
conditions. But as I've pointed out early and often, these problems are
all interrelated. See Another Nobel Economist Says We Have to Prosecute Fraud Or Else the Economy Won't Recover.
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We haven't even seen the major correction in housing yet. Eventually, the fundamentals will take over. How much house can the average American afford @interest rates of 8%, 25% down, and only 30% total debt? Me thinks not so much.
Don't worry.
Eric "Place" Holder is on the case.
Correct. If none of those who committed fraud, nation wide, were black then Eric Holder is on the case. Don't worry.
I think if anything this is delaying the double-dip - banks are afraid to put foreclosures on the market thereby keeping supply down.
Well, at least we're way into prosecuting Assange, if we don't kill him first.
I am still putting my money on Wikileaks being an intelligence agency operation ... and Assange either being part of it or a dupe that will be offered up in a sacrificial killing to try to prevent people from seeking freedoms... due to fear.
Only two ways to control people.
a) hope
b) fear
Pushing the agenda any earlier than absolutely necessary would not properly serve their interests.
But I really don't care who Assange "really is." It's on.
The mortgage paperwork mess has little to do with the double dip. The tax credits and artificial liquidity courtesy the Fed arrested home price declines, preventing them from reaching their true market price provided a temporary uptick in prices. Now that those programs have run their course, price trends are reverting to their natural trends. (Government sponsored lending, FHA, Fannie, Freddie, et al continue distorting the market, however) The foreclosure "fraud" issue is just a side show.
And frankly, who gives a sh*t if the bank goofs some paperwork where someone that isn't paying their mortgage because they bought a house they couldn't afford. I have no love for the banks that made bad loans, but I don't have any love for the fool making $40K that bid up the 2 bedroom condo to $750K.
Fraudclosure isn't the only reason for the buildup in shadow inventory. The banks simply can't fire sale the inventory in large numbers. If they did, there goes the neighborhood as many others will go more steeply underwater. Those still stuck with gimmick financing will have even more incentive to walk.
Sales in Southern California have tanked the past 2 months.
Los Angeles and Orange County homes are still massively overvalued. This is where the shadow inventory thrives. The sheer volume of bad paper is too big for the banks to digest in big gulps......fraudclosure effect or not.
www.doctorhousingbubble.com
Let's take justice into our own hands and just start shooting the fuckers....(I want to see if my rants get me on the FBI's terrorist watchlist!)
Unfairness causes chaos.
It really is that simple.
Does that mean banksters will buy even more IYR ?
Got to disagree with the premise that failure to prosecute the fraud is largely to blame for a ‘double dip.’ Residential real estate is doomed for many years to come (With possibly the exception of the criminal capital-D.C.) whether the fraud is prosecuted or not. A phony blip ‘up’ here and again does not signify price recovery. The legacy banks still have tons of dough to extract from foreclosing on millions of loans they insured against and they intend to do it one way or another. In 2006 both Jim Tucker and Daniel Estulin reported that their sources inside Bilderberg stated the global syndicate was planning to use a rigged mortgage crisis to bring down the western financial system. Nobody paid much heed. Time to face the tune…the U.S. government has been overthrown!
Correction....ALL governments have been overthrown, save one global clandestine government.
Elite humans gathering to formulate and execute strategies to increase their power and wealth under the guise of merely friendly discussions. No news here...been happening for centuries. The only difference now is that it is truly global, but will have to be contained to this planet...at least for now.
Crap! That's the one explanation that makes sense to me. I saw the same thing happen in Spain: the banks were completely unwilling to work for a mutaul solution.
My question is: how do the banksters expect to withstand a popular backlash?
tired1 - My question is: how do the banksters expect to withstand a popular backlash?
By using a variety of methods… They control most mass media. They control the army and the U.S. Army is in the process of illegally nationalizing most state and local police through the stationing of active duty army officers in the civilian structures. (See also Fusion Centers) By dumbing down the population and conditioning them to accept tyranny and the destruction of their rights. (Just check out the dog training and humiliation the American people are being put through by the TSA in the name of the Fed’s phony War on Terrorism.) By putting brain damaging chemicals in processed food and soft drinks. (As well as in the municipal water supply to dumb people down so they are more easily managed under the auspices of “fighting tooth decay.”) And, just announced by the Federal government; their intention to ‘mandate’ lithium in the water supply “to reduce suicide.” By using psychotronic weapons to tranquilize the public as was announced by the Pentagon to be in the experimental stages in 2001 which I am confident is already being implemented in many areas. By building FEMA Camps for the incarceration or elimination those who would speak up. By the top criminals building huge underground complexes (with our money) to retreat to if they have to stage a war or monstrous event to get rid of us….that’s how (IMO)
Funny you should ask:
http://www.youtube.com/watch?v=5QsmfKHQJrM
It's no longer a hypothetical question.
I think I'd call the housing market a "continued crash" rather than a "double dip." I don't call what we've seen any kind of "recovery."
Honestly, I don't think we can anticipate where housing will end up until we know how high interest rates and how low employment/incomes stabilize... If they do stabilize. For me that's the big question.
...and the POO/PMs/10yrT/interest rates keep going up...
"There are obviously other factors responsible for the softening housing market," ... like Martin Armstrong's cycle work indicating that the bottom of the current housing downturn won't happen until 2032 ...
You still bother with Case Shiller? It has no credibility. Read Reggie Middleton on the uselessness of this index.
The "cloud financing" (i.e., fraud--too big to understand), was designed to keep houses off the market. Can't have the facts revealed to suburbia. They would stop trudging off to the cubicles. I mean, have you actually met any suburbanites lately? Don't you realize how unstable they are mentally?
Okay Bubba1231, here's another GW post to shill all over. Bet you think he's "short" the housing market as well as BP now too!
paging bubba1231...
conflicting info here. pressure to force land prices down even further but, the scavengers are taking over already. where will the prices go?
http://covert2.wordpress.com