This page has been archived and commenting is disabled.

RealtyTrac Reports Q3 Foreclosures Hit All Time Record... Just In Time For The Plunge

Tyler Durden's picture





 

Looks like someone may have had a little advance notice on October's foreclosure semi-moratorium festivities. According to RealtyTrac, September foreclosures marked a 5 month high of 347,420, jumping 3% from the previous month and 1% from September 2009, even as the 3rd quarters marked the highest foreclosure activity on record. For the first time in history, bank repossessions (REOs) surpassed 100K, hitting 102,134. Providing some much needed color on what is actually happening in the foreclosure market, James Saccio, CEO of RealtyTrac said: "Lenders foreclosed on a record number of properties in September and in the third quarter, taking a bite out of the backlog of distressed properties where the foreclosure process was delayed by foreclosure prevention efforts over the past 20 months. We expect to see a dip in those bank repossessions — and possibly earlier stages of the foreclosure process — in the fourth quarter as several major lenders have halted foreclosure sales in some states while they review irregularities in foreclosure-processing documentation that has been called into question in recent weeks." And plunge, foreclosure activity will: the 24 judicial foreclosure states most affected by the foreclosure documentation issue accounted for 40 percent of all foreclosure activity in the third quarter and 36 percent of bank repossessions, or REOs. And the worst part is precisely what Jim Cramer thought was going to represent a boost to home prices, confirming just how little the man understand basic market principles: "If the lenders can resolve the documentation issue quickly, then we would expect the temporary lull in foreclosure activity to be followed by a parallel spike in activity as many of the delayed foreclosures move forward in the foreclosure process. However, if the documentation issue cannot be quickly resolved and expands to more lenders we could see a chilling effect on the overall housing market as sales of pre-foreclosure and foreclosed properties, which account for nearly one-third of all sales, dry up and the shadow inventory of distressed properties grows — causing more uncertainty about home prices.” In other words: a complete housing market collapse.

The chart below summarizes the monthly foreclosure activity by type (NOD + LIS, NTS+NFS, and REOs):

Some more details from RealtyTrac:

Foreclosure Activity by Type

During the quarter a total of 269,647 properties received default notices (Notices of Default or Lis Pendens), a decrease of 1 percent from the previous quarter and a decrease of 21 percent from the third quarter of 2009, when default notices peaked at more than 342,000.

Foreclosure auctions were scheduled for the first time on a total of 372,445 properties during the quarter, the highest quarterly total for scheduled auctions in the history of the report. Scheduled auctions increased 5 percent from the previous quarter and were up 4 percent from the third quarter of 2009.

Bank repossessions (REOs) also hit a record high for the report in the third quarter, with a total of 288,345 properties repossessed by the lender during the quarter — an increase of 7 percent from the previous quarter and an increase of 22 percent from the third quarter of 2009.

Nevada, Arizona, Florida post top state foreclosure rates in third quarter
As it has for the past 15 quarters, Nevada continued to document the nation’s highest state foreclosure rate in the third quarter of 2010 despite a year-over-year decline in foreclosure activity. One in every 29 Nevada housing units received a foreclosure filing during the quarter, almost five times the national average. Nevada foreclosure activity increased nearly 1 percent from the previous quarter but was down nearly 20 percent from the third quarter of 2009.

Arizona posted the nation’s second highest state foreclosure rate for the fifth consecutive quarter, with one in every 55 housing units receiving a foreclosure filing, and Florida posted the nation’s third highest state foreclosure rate for the fourth consecutive quarter, with one in every 56 housing units receiving a foreclosure filing.

With one in every 70 housing units receiving a foreclosure filing during the third quarter, California documented the nation’s fourth highest foreclosure rate, followed by Idaho, with one in every 86 housing units receiving a foreclosure filing during the quarter. A total of 7,424 Idaho housing units received a foreclosure filing during the quarter, an increase of nearly 20 percent from the previous quarter and an increase of nearly 14 percent from the third quarter of 2009.

Other states with foreclosure rates ranking among the top 10 in the third quarter were Utah, Georgia, Michigan, Illinois and Hawaii.

Five states account for more than 50 percent of nation’s third quarter total
California alone accounted for 21 percent of the nation’s total foreclosure activity in the third quarter, with 191,016 properties receiving a foreclosure notice — the nation’s largest foreclosure activity total. California foreclosure activity decreased nearly 1 percent from the previous quarter and was down nearly 24 percent from the third quarter of 2009.

Florida foreclosure activity increased 12 percent from the previous quarter and was flat from a year ago, giving the state the second largest foreclosure activity total, with 157,026 properties receiving a foreclosure filing.

With 49,103 properties receiving a foreclosure filing in the third quarter, Arizona posted the nation’s third largest state foreclosure activity total. Arizona foreclosure activity increased nearly 8 percent from the previous quarter but was down 2 percent from the third quarter of 2009.

Illinois posted the nation’s fourth largest foreclosure activity total, with 47,802 properties receiving foreclosure filings, and Michigan posted the nation’s fifth largest foreclosure activity total, with 46,100 properties receiving foreclosure filings. Foreclosure activity in both Illinois and Michigan increased on a quarterly and annual basis in the third quarter.

Other states with foreclosure activity totals among the nation’s 10 highest were Georgia (41,231), Nevada (38,429), Ohio (36,677), Texas (34,187) and Washington (17,670)

And just like an inverse cash for clunkers, look for the mid-November update on October numbers to be a 50%+ plunge in numbers, especially in the Notice of Trustee and Foreclosure Sale categories.

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 10/14/2010 - 00:12 | Link to Comment HungrySeagull
HungrySeagull's picture

Yet more mountains of Papers which must now be rechecked for everything all over again to ensure the basic data is valid. It no longer matters if 350,000 is out of a home or one million is out of a home now does it?

There should be a new song nationwide to boost morale.

"I want my Mortgage Title Checked, and I wanted it CHECKED NOW!"

 

(Sorry Wentworth...)

 

300,000,000 singing the same song as the Tusnami of Forclosures sweep this great land from coast to coast, sea to sea should sort things out eventually.

 

What about the Commercial Properties?

 

What about the Banks themselves? One bank I know of near me is trying to lease out a second floor of a branch to bring in income and they no longer have sufficient staff to justify the use and expense of a second floor office complex.

 

Something to think on.

Thu, 10/14/2010 - 01:12 | Link to Comment midtowng
midtowng's picture

What is going to happen to the economy when the housing market completely freezes up? Let's face it: this will eventually be sorted out by the government, but we are in election season. Nothing important will be decided until mid-January at the earliest. That's three months of this thing getting gradually worse.

Double-dip? Hell, next leg down.

Thu, 10/14/2010 - 01:41 | Link to Comment Founders Keeper
Founders Keeper's picture

[Nothing important will be decided until mid-January at the earliest.]

Midtowng, I expect a great many important things will happen during Congress' lame-duck session.  A great many bad things.  Keep an eye on the quiet back door deals in D.C. made under the cover of holiday distractions.

(IMHO, we are not at the end of a recession, or at the beginning of a double dip recession.  We are in the early stages of a catastrophic depression.)

God help us to help one another.

 

Thu, 10/14/2010 - 08:10 | Link to Comment bronzie
bronzie's picture

"We are in the early stages of a catastrophic depression."

probably about the 2nd inning

Thu, 10/14/2010 - 00:15 | Link to Comment radish juice
radish juice's picture

The same govt that was trying to stall/avoid foreclosures will start measuring housing recovery by completed foreclosures in a few months, just like they are trying to create inflation now they will long for foreclosures to begin to kick start housing.

Thu, 10/14/2010 - 00:39 | Link to Comment Iuubob
Iuubob's picture

Don't blame this one on the govt, the banks own this one and it's a doozy

 

Thu, 10/14/2010 - 01:16 | Link to Comment JLee2027
JLee2027's picture

+

Thu, 10/14/2010 - 04:08 | Link to Comment EscapeKey
EscapeKey's picture

The cynical side of me wants to point out that the government is a branch of the banks.

I start to think the middle road is letting another big bank collapse. It would send the signal to the banks that they're not indespensible, and it would send a signal to the markets that the government draws a line in the sand with regards to irresponsible behaviour - all the while without actually doing anything about the deficit.

So, Citi, JPM, BoA or Wells Fargo? Or even Goldman Sachs... or more likely, Morgan Stanley. Who's up next on the chopping board?

Thu, 10/14/2010 - 05:06 | Link to Comment Moonrajah
Moonrajah's picture

Yeah, excatly who would Lehman'ed this time?

From the numbers I think it should JPM, but for all I know they could find some small-fry a'la Waddell and Reed, and leave him in the cold.

Go long popcorn, this is probably the Black Swan everyone was waiting for. Heck, it already overshadowed to Mexican Gulf fiasco.

Thu, 10/14/2010 - 06:01 | Link to Comment Bob
Bob's picture

 

If I were stockholders--or auditors--I would demand that the banks hold back all that "bonus money" ($144B) as reserves against foreseeable losses (whether from write-downs or legal settlements) that would otherwise jeapordize the very survival of the firms. They have no contractual claim for Gov bailouts. 

The news is out.  There is no way the banksters meet their fudiciary duties if they pay out that bonus money. 

Under the circumstances, it would clearly constitute looting the companies.

 

Thu, 10/14/2010 - 08:02 | Link to Comment Moonrajah
Moonrajah's picture

If I were stockholders--or auditors--I would demand that the banks hold back all that "bonus money" ($144B) as reserves against foreseeable losses

Blasphemy, I tell you!

Never part a lioness from her cub,

Never part a woman from her illusions,

And never EVER even think about parting a banker and his hard-earned bonus!

Thu, 10/14/2010 - 08:14 | Link to Comment EscapeKey
EscapeKey's picture

What a ridiculous thought - that would mean all the "talent" would leave one bankrupt bank, and go to another - also bankrupt - bank. We can't have that without civilization collapsing.

Thu, 10/14/2010 - 07:53 | Link to Comment TuesdayBen
TuesdayBen's picture

Had Barney and his Gubmint buddies not pushed into housing sector via Fan  and Fred, there would have been no bubble.

Thu, 10/14/2010 - 00:18 | Link to Comment buzzsaw99
buzzsaw99's picture

Yeah, without those foreclosures coming back on the market there will be no houses for sale. lulz

Thu, 10/14/2010 - 00:26 | Link to Comment BobWatNorCal
BobWatNorCal's picture

So you're saying average prices per sale will rise?
I expect that will be spun as an improvement.

Thu, 10/14/2010 - 04:13 | Link to Comment EscapeKey
EscapeKey's picture

Who on earth would want to buy a house given the current state of turmoil? There is no way this is bullish.

Thu, 10/14/2010 - 04:36 | Link to Comment BobWatNorCal
BobWatNorCal's picture

A way will be found to say it.
It just won't be true.

Thu, 10/14/2010 - 04:38 | Link to Comment BobWatNorCal
BobWatNorCal's picture

Still, at a certain point, you may face the question, "do you want paper dollars or do you want a house?".

It feels closer to an endgame.
Who wants to be holding dollars?

Thu, 10/14/2010 - 05:08 | Link to Comment Moonrajah
Moonrajah's picture

do you want paper dollars or do you want a paper house?

 

There! Fixed that for you.

Thu, 10/14/2010 - 05:14 | Link to Comment EscapeKey
EscapeKey's picture

Who will be able to get an affordable mortgage?

Thu, 10/14/2010 - 05:40 | Link to Comment Winterfreak
Winterfreak's picture

What happens when a fraud-closed property was purchased but that buyer is now selling - but the original foreclosuree's (if that is a word) find out it wasn't done correctly?

How far down the chain will it go?!

Thu, 10/14/2010 - 00:20 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

Hang on, isn't the robosigning scandal good for housing (right up until that moment it is decidedly not good)?

I mean, simple arithmetic: fewer foreclosures, less available inventory. 

And won't new housing (thus without title problems) should benefit, no?

Sure, we're keeping a massive unforeclosed inventory out there, but so what? The marks don't move on the banks' books (I mean, until they do, quickly). 

Meanwhile, homeowners reliquify - we hope. 

 

 

Thu, 10/14/2010 - 00:23 | Link to Comment Tyler Durden
Tyler Durden's picture

No: less supply needs at least flat demand for a rising price. Problem is, and this is what Cramer can't grasp, is that even if supply drops it will be irrelevant, as demand goes to zero on complete and total uncertainty, especially if title insurers refuse to come back.

Thu, 10/14/2010 - 00:28 | Link to Comment Oracle of Kypseli
Oracle of Kypseli's picture

That could be a bonanza to builders. Clear title, new house, but questionable price.

Thu, 10/14/2010 - 00:46 | Link to Comment DarkMath
DarkMath's picture

Why build a house now if you strongly suspect you'll be able to take your pick in a couple of years. In other words demand has dropped for more reasons than just fear of a faulty title. Demand is dropping because potential buyers are seeing blood in the water and don't want come in too early because there's chance prices will fall from here. If a bank is desparate to sell now then they're going to be really desparate to sell next year when they have a year of what were to have been already foreclosed houses on their books.

Plus the Fed through QE2 is virtually guaranteeing it will try to lower rates EVEN FURTHER. I've heard a 30 year mortgage could get as low as %2.5. That's what they are in Japan these days.

So if I'm a potential home buyer there's a lot of reasons to suck it up and spend another year in an incredibly cheap rental.

Thu, 10/14/2010 - 00:56 | Link to Comment HungrySeagull
HungrySeagull's picture

If you have a nice quiet place somewhere that is a wee bit too far to walk from any major urban area, you dont need concern yourself with selling. Your rotting wood shingles can be replaced with a bit of labor and some good hard wood trees. Your Plumbing can be installed for rather cheap because there are dozens of hungry plumbers ready to take your call. You can keep the outhouse ready until really hard times hit. And the food? Well, If you can buy Lead Organ Pipes or such hardware that is being discarded by Churches desperate to stay out of foreclosure you might have a supply sufficient to make your own ammunition for a long time to come.

 

If the rooms are drafty? Have all your family come and live with you. They can do whatever they need to do quickly to make themselves (And you) comfortable.

If you prosper with this, not only you will own a home, but you will now be overseeing a Plantation with much self sufficiency as it used to be in this great Country centuries ago.

Thu, 10/14/2010 - 02:44 | Link to Comment Conrad Murray
Conrad Murray's picture

Using a church's desperation brought on by financial hardship to reap lead organs at fire sale prices in order to make ammunition?  Priceless.

Thu, 10/14/2010 - 01:03 | Link to Comment Chito Campo
Chito Campo's picture

I dare say if you're buying a house to live in for 5-10 years then short-term (relatively) depreciation isn't a huge concern.  Not everybody is looking to flip their house in two years - people buy for purely emotional reasons, because they want a home, or they might be completely ignorant about what's going on in the market.

I'm not saying you're incorrect about the general dynamic as I'm sure things will play out this way but I doubt the dip will be as pronounced as the prognositcations are calling for since necessity, ignorance, and the female nesting instinct will continue to drive sales. 

Thu, 10/14/2010 - 00:42 | Link to Comment Iuubob
Iuubob's picture

Spot on, this morass simply exacerbates the problem.  Why is that a mystery to folks.  Further, the cost of sorting out this mess will come at a high price for banks.

Thu, 10/14/2010 - 00:48 | Link to Comment Oligarchs Gone Wild
Oligarchs Gone Wild's picture

What is happening to real estate is what is happening to equities. 

What we have here is not a lack of demand, it is a vote of no confidence consummated through the constant parade of fraud by those who should be in charge.

Thu, 10/14/2010 - 01:01 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

Agreed on one point: The words "Title Insurance" just went from being two of the most-boring to two of the most-exciting words in America. 

JPM has cracked MERS. If title insurers crack, it's gonna be a bumpy ride. 

Thu, 10/14/2010 - 01:34 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

Saw that, but, strangely, also saw this:

http://www.prnewswire.com/news-releases/fidelity-national-financial-comments-on-recent-announcements-regarding-the-foreclosure-process-104164658.html

from FNF. 

I still don't know what to make of it. 

Are title guys scared or aren't they?

Thu, 10/14/2010 - 03:53 | Link to Comment MachoMan
MachoMan's picture

The title insurance guys were the ones that did the title searches/abstracting for the insurance on the foreclosure sales...  and for the original homeowner's purchase...  whatever defects in title there should have been, were there for title companies to see...  can't get that genie back in the bottle though...  prospectively, they can limit exposure...  retrospectively, they need to lube up.

Thu, 10/14/2010 - 01:46 | Link to Comment HarryWanger
HarryWanger's picture

as demand goes to zero on complete and total uncertainty...

That's an assumption. I really can't see how this would affect demand too much. REO's are being bought by speculators and, yes, flippers. Regular Joe is buying, not very many albeit, regular homes for sale. Might add some uncertainty but I can't see it creating a situation where demand "goes to zero". That seems a bit extreme.

Thu, 10/14/2010 - 04:12 | Link to Comment bob_dabolina
bob_dabolina's picture

Demand going to zero only requires a loss of faith in the system.

Would you buy a foreclosure if you thought the previous owner was also entitled to the same property? No.

This could create a problem with title insurance. If (big if) refuse to insure titles because of fraud by banks than mortgage issuance stops (as in dead in it's tracks)

Now, if we have a problem with foreclosures that happened under fradulent pre-tenses than we have a complete different problem. The people who thought they had a home, might not have a home, and the previous owners might be entitled to moving back in. 

The litigation alone could last for years.

Thu, 10/14/2010 - 07:05 | Link to Comment reading
reading's picture

Just about everything is an assumption Harry.  The vast majority of homes in inventory are bank owned -- regular joe has most certainly been buying them and now that two of the 5 title insurers have said no thanks to bank owned properties that will make it additionally difficult to move properties.  And let us not forget, that even if they can get the process re-started in a "short time" (read: few months?) everyone currently in the process will be re-starting -- requalifying (already difficult and credit scores change rapidly for people and not up in many cases), wading through all the paperwork, etc.  This has already started impacting demand -- just ask around.

 

Thu, 10/14/2010 - 00:22 | Link to Comment techperson
techperson's picture

If the dollar falls fast enough, and foreclosuregate delays legal proceedings long enough, house "values" in depreciating dollars will go high enough to turn the underlying equity positive, maybe big time.  Then you'll see a REAL war as it actually becomes profitable for the banks to foreclose and resell the house, instead of having to take a loss as they now do.  This is going to happen fast.  http://www.youtube.com/watch?v=0pZ2eqEBCVI

Thu, 10/14/2010 - 00:45 | Link to Comment Iuubob
Iuubob's picture

I am befuddled by your comment.  It quite simply , makes no sense.

 

Thu, 10/14/2010 - 03:56 | Link to Comment MachoMan
MachoMan's picture

I think he missed the whole bi-flation memo/easy observations out his window...  where debt laden assets are decreasing in price...  and will continue to do so regardless of the value of the dollar...

Thu, 10/14/2010 - 00:28 | Link to Comment Village Idiot
Village Idiot's picture

I remember Cramer telling his audience that he wanted to buy in Palm Springs, but missed the boat as the market was already turning - as evidenced by the limited number of "For Sale" signs - compared to his previous visit.  That show ran more than a year ago. Jim is a RE guru.

Thu, 10/14/2010 - 00:25 | Link to Comment gwar5
gwar5's picture

Oh, so that sound we've been hearing getting louder and louder is the actual sound of the SHTF. 

Thu, 10/14/2010 - 00:30 | Link to Comment LeftCoastRefugee
LeftCoastRefugee's picture

As someone who works REO daily (not at a bank) the buyers have plenty to pick from and are still not buying as the uncertainty of the shadow inventory on future values is causing serious concern before the current fraudclosure. As Tyler stated, this will amplify the concern. It's going to be a slow winter.

Thu, 10/14/2010 - 00:39 | Link to Comment HungrySeagull
HungrySeagull's picture

And possibly a difficult winter as said buyer sleeps on a warm mound of money ready to buy a home, but only there are no homes with clear title and no encumberances of any kind.

Surely among the thousands of rotting homes there must be one or two good priced homes to sell to this buyer so that you may eat this coming winter.

Oh where, oh where are the good homes without the paperwork bull and fraud?

Thu, 10/14/2010 - 00:54 | Link to Comment LostWages
LostWages's picture

"And possibly a difficult winter" -- Kondratieff Winter that will last for years.

Thu, 10/14/2010 - 01:16 | Link to Comment HungrySeagull
HungrySeagull's picture

I wonder for a moment if Land will get so cheap that Developers will now build nice small homes in the manner that the People would be pleased to own and live in knowing that these homes are fresh built, clean inside and out and so forth.

 

Even though we are going through a winter, I think there is going to be a one hell of a Spring if enough home builders buy the right land and accumulate the materials needed to make this happen.

 

I hear talk of China make stake in our Oil and Gas down by Antonio way in the heart of Texas. I wonder if China will now use her riches to buy land and ship cheap labor and materials over and build our homes for us, as they once built the railroads.

Titles and paperwork would not be a problem. It will be a single document pledging allegiance to the Dragon along with your revenue.

Thu, 10/14/2010 - 03:58 | Link to Comment MachoMan
MachoMan's picture

no

Thu, 10/14/2010 - 01:27 | Link to Comment covered
covered's picture

Not for sale.

Thu, 10/14/2010 - 00:59 | Link to Comment Village Idiot
Village Idiot's picture

It's going to be a slow winter.

.

Thu, 10/14/2010 - 00:46 | Link to Comment Iuubob
Iuubob's picture

LeftCoast is spot on!

Thu, 10/14/2010 - 01:49 | Link to Comment gwar5
gwar5's picture

I feel like a rescued Chilean miner being told that we have to go back down now

 

 

Thu, 10/14/2010 - 02:07 | Link to Comment PhattyBuoy
PhattyBuoy's picture

Only a fool bought a house in the past 2 years ... and with the fraudclosure inventory piling up in the background, the prices will collapse (again) when that inventory floodgate is opened.

Thu, 10/14/2010 - 00:43 | Link to Comment williambanzai7
williambanzai7's picture

Thu, 10/14/2010 - 00:57 | Link to Comment rocker
rocker's picture

A picture is worth a thousand words.

Thu, 10/14/2010 - 01:00 | Link to Comment Oligarchs Gone Wild
Oligarchs Gone Wild's picture

Or a few trillion $'s.

Thu, 10/14/2010 - 01:05 | Link to Comment williambanzai7
williambanzai7's picture

That is old Charlie Brass Balls Munger in the lower left...the roughest, toughest, bandito West of the Pikeys. 

Thu, 10/14/2010 - 01:25 | Link to Comment JLee2027
JLee2027's picture

Black Bart was my favorite. He never hurt anyone, never fired his weapon and only stole from Wells Fargo.

 


"I've labored long and hard for bread,
For honor, and for riches,
But on my corns too long you've tread,
You fine-haired sons of bitches."[5]

- Black Bart, 1877

Thu, 10/14/2010 - 01:34 | Link to Comment williambanzai7
williambanzai7's picture

Thank you very much for providing me with this!

Thu, 10/14/2010 - 01:58 | Link to Comment gwar5
gwar5's picture

Would recognize Charlie anywhere...... whatever became of him?  {snort}

 

Thu, 10/14/2010 - 01:05 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Gold ain't getting robosigned.  Nope.  It is gettin' right outta dodge.

Thu, 10/14/2010 - 01:43 | Link to Comment Misstrial
Misstrial's picture

Well you know what?

I'm thinking that my framed degrees hanging on the wall have been robosigned.

The University of California has thousands of grads every June, much less the ones who finish at the end of Fall, Winter quarters.

Could it be that Pete Wilson signed each and every one that year? Or....

*sighs*

~Misstrial

Thu, 10/14/2010 - 04:04 | Link to Comment MachoMan
MachoMan's picture

colleges have printing presses too...  the temptation is always too strong...  all nonprofits act to merely expand their fixed costs and infrastructure...  to the point where they can grow revenue no more and have no reserves for a harsh winter.

if they want to actually fix education, the first step is to sit little johnny down and tell him he's too fucking stupid to ever wander into field X...  he's not going to be an astronaut...  and he might as well get used to saying, paper or plastic.  This stops little johnny from going to college, taking on more debt than the job market can sustain, and having a debt noose around his neck for the remainder of his days.  This also flushes the system of many complete hacks, frauds, and otherwise worthless teachers (but dont tell them that since they're "sacrificing" for us).

Thu, 10/14/2010 - 02:29 | Link to Comment Arthur
Arthur's picture

Exactly why are folks concerned about title insurance and title companies?

 

Title transfers should be considered legally sound even if the underlying morgage that was paid off at the sale could be challanged.

Bottom line, a court of law sanctioned each and every forclosure actionThe title companies are safe.  Assuming there is a subsequent ruling that the forclosure was the result of fraud, the bank, if it still held title, might be required to return the property but if it was sold to an innocent  3rd party the former owner is only going to get cash from the bank.

If the court order itself was fabricated than title insurance might have to pay but the orders were real, it was just the robo signers committing purjury in validating documents that may or may not have been legitimate.

Everyone seems to overlook that the foreclosed homeowners failed to pay the intended beneficiary - the holder of the mortgage.   Clearly the parties whom the lenders thought were supposed to get paid were getting paid until the default.  There was no unjust enrichment, the money was flowing to the indented and presumed holders of teh mortgage, whether the paper work kept up with how the mortgages were sliced and diced is a diffrent issue and one which goes to proving to a court exactly who has standing to foreclose.  

The real question is how much will it now cost the big morgage holders to establish ownership in a legally sufficient manner?   Folks with no income and still living in a house just caught a big break,  anyone in default with a job and a high interest loan may soon be able to refi at a good rate and maybe even a reduction in the principal owed.   It will be intresting but I am not worried about title insurance companies just yet.

Thu, 10/14/2010 - 04:12 | Link to Comment MachoMan
MachoMan's picture

Not all foreclosures end up seeing a court (nonjudicial states).  Sometimes, states allow the foreclosing party to proceed without court order when the mortgage document allows the party to do so.

Further, the BFP/third-party purchaser of a foreclosed home (purchasing title insurance on the property), will have a claim against the title company to defend the action, at least, and as a co-defendant with the bank, at worst.  The title company should have a lawsuit against the bank for failing to follow through with the necessary formalities/botching the sale, but the problem also is that the title company was fully capable of doing its own research into the chain of title...  (and probably provided this to the bank in the first place).  I can't foresee the title company getting a lot of sympathy from courts.

Thu, 10/14/2010 - 08:15 | Link to Comment hidingfromhelis
hidingfromhelis's picture

Remember though, your title insurance is only as good as the title insurer.  Someone is going to be without a chair when the music stops, and I don't think the title insurance companies have spent enough lobbying and campaign contribution dollars to have a reserved seat.

Fri, 10/15/2010 - 02:29 | Link to Comment MachoMan
MachoMan's picture

Agreed.  The same concept applies to sovereigns...  you can only insure what you can pay for in the event of a total/universal claim...  unfortunately, the hole is deeper than our solvency/ability to fill it.

Thu, 10/14/2010 - 04:13 | Link to Comment gwar5
gwar5's picture

Buyers can't get a loan if their lender can't get title insurance

 

 

Thu, 10/14/2010 - 02:37 | Link to Comment Conrad Murray
Conrad Murray's picture

Gerri Willis interviewing the President of MERS:

http://www.foxbusiness.com/on-air/willis-report/index.html#/v/4371083/th...

Thu, 10/14/2010 - 04:49 | Link to Comment skippy
skippy's picture

ummm....he better file for protective segregation now!

 

Skippy...I hear its got a long waiting list...

Thu, 10/14/2010 - 03:57 | Link to Comment fuu
fuu's picture

In the still of the night silver approaches $25 and Gold sits at $1384.80. Finally FUD is working for me!

Thu, 10/14/2010 - 04:16 | Link to Comment plocequ1
plocequ1's picture

Truely a sad morning for America. Yes, Us Gold buffs are happy, But the $$ is getting crushed, Used and wipped like Connie Corleone getting her ass wipped by Carlo. Somethings gotta give. The 52 week low for Buckey is in the 74s. Im actually getting scared.

Thu, 10/14/2010 - 07:11 | Link to Comment reading
reading's picture

I'd agree with that...the downside of knowing more than the average person about what is going on is how depressing it is to realize that while the market soars daily your "wealth" in dollars continues to plunge. It really makes you wonder what happens some day when you wake up.

Thu, 10/14/2010 - 08:21 | Link to Comment bronzie
bronzie's picture

"the $$ is getting crushed"

every fiat currency in the history of the world has failed

to think that the US dollar will be the exception is just silly

average lifetime of a fiat currency is less than 40 years

US dollar has been pure fiat since Nixon closed the gold window in 1971 - ie, 39 years

get used to it

Thu, 10/14/2010 - 04:38 | Link to Comment skippy
skippy's picture

cut and paste, don't give a shite...

 

Pulled off CNBC NetNet comments see:

izziets | Oct 9, 2010 03:22 PM ET

Real life illustration of securitization (this case is being appealed to Supreme Judicial Court of Massachusettes:

Rose Mortgage Inc.- Originator sells to
Option One Mortgage corp-. who then sells to
Lehman Brothers Holdings Inc.- who sells to
Structured Asset Securities Corp.- who sells to
Structured Asset Securities Corp. Mortgage Pass Through Certificates SASC 2006-Z Trust who issues MBS certificates sold to investors.

US Bank National Association is the trustee of SASC 2006-Z Trust,

Option One Mortgage Corporation is the Servicer

Questions:
Who is the proper party to foreclose and receive the proceeds? Who owns the underlying Note? Who can sign off on a modification?

Isn’t it great that six different financial corporations can make money on one loan? What a system!

P.S. The default rate for SASC 2006-Z was 35.7% as of 3/25/09 and 41.73% as of 6/29/09. (Can you say credit default swap heaven?)

Terms of initial loan: $103,500 2/28 Libor Indexed, initial rate 9.5%, margin of 6.99%
(Can you say designed to fail?)

Skippy…remember only the really smart folks cough…banksters can understand this stuff, we must lisen to them, their here to help!

Reply
  • razzz42 says: October 14, 2010 at 1:14 am

    http://jsmineset.com/wp-content/uploads/2010/10/VO-SECURITIZATION-FLOW-CHART.pdf

    Reply
    • Skippy says: October 14, 2010 at 2:19 am

      I never thought I would see the day…proof…that money does grow on trees.

      All ye need is some one (proof they exist or can pay back…unnecessary) to apply for a Mortgage or Loan and BINGO PAY DAY!!!

      PAY DAY…hay I just had an epiphany who wants to help start a business….collateralising and scrutinizing PAY DAY LOANS… WE have the technology…cough obfuscation device….first in best dressed / kid on the block…you know. By the time anyone gets wise…were long gone, deniability up the wazoooooo….layers upon layers of low payed suckers to throw under the bus.

      Skippy…ringing the Prez, Timmah, Beaner, Alxrude et al right now, say yes say yes say yes!!!!

      Reply
  • Thu, 10/14/2010 - 04:53 | Link to Comment alpha60
    alpha60's picture

    so, foreclosures are down for aug and sept 2010 year on year, though at a 5-month high for this year. from your own chart, its seasonal, and it has dropped yoy. still you claim 1) conspiracy 2) complete collapse.

    can we get some fact back in our rants, pls?

    Thu, 10/14/2010 - 05:29 | Link to Comment Hephasteus
    Hephasteus's picture

    Persia currencies are doing porn with the dollar this morning.

    Thu, 10/14/2010 - 07:33 | Link to Comment Bob
    Bob's picture

    Seems to me that the banks' continued foreclosures in the non-judicial states when they had already halted them in judicial states demonstrates clear intention of fraud, since the latter were due to known problems with their documentation.  They continued in the non-judicial states only because they knew they could get away with it. 

    This, imo, provides further evidence supporting RICO actions. 

    Thu, 10/14/2010 - 06:26 | Link to Comment papaswamp
    papaswamp's picture

    I guess what amazes me is the market completely ignoring the situation. All it wants to see (and is getting) is a declining dollar which falsely pushes up stocks. All those MBS out there that are probably worthless. I guess they all know that the printing press will come to the rescue....Zimbabwe here we come.

    Thu, 10/14/2010 - 07:08 | Link to Comment Cdad
    Cdad's picture

    Here here...

    And when this is all said and done, and considering what the FED is planning to do next, it would seem to me that the future of the Federal Reserve Bank is now uncertain.

    For nothing has angered Average Joe more than these constant bailouts.  It is the looting of the national treasury.

    In our lifetime, the Federal Bank falls.  And we will be a better nation for it.

    Thu, 10/14/2010 - 07:16 | Link to Comment reading
    reading's picture

    They ignored the first housing crisis for a long time.  The bear funds blew up in june 07, Countrywide (the #1 lender on volume at that point) lost access to their funding lines in August 07 (just two examples of clear indicators trouble was coming) yet the market did finally start falling for several months after that and really didn't "get it" for a bit longer.  It will come.

    Thu, 10/14/2010 - 07:21 | Link to Comment firstdivision
    firstdivision's picture

    Sorry for going off topic, but the USDJPY is about to punch through 81 and BOJ seems to be MIA.  Someone tell Masaaki Shirakawa how to boot up FXPro on Window7. 

    Thu, 10/14/2010 - 07:28 | Link to Comment George Costanza
    George Costanza's picture

    Oil near $85 per barrel is a further dent in the housing recovery.  As potential home buyers see higher fuel prices, that removes confidence to make any kind of new investment in a house.

    Fed moves are inflating Oil, what they hell are they thinking they can get away with ?     They are one dimensional thinkers in a multi dimensional complex world.   No way the Fed can get it right

    Thu, 10/14/2010 - 07:49 | Link to Comment the not so migh...
    the not so mighty maximiza's picture

    Because of the high unemployment rate this real estate thing is not getting better.  They have to create 150,000 jobs per month just to break even, they are never going to do that, or rather wall street can never create that many jobs.   Maybe bankers can buy a house for each family member with their bonus, its the American thing to do.

    Thu, 10/14/2010 - 08:03 | Link to Comment johngaltfla
    johngaltfla's picture

    Even IF the banksters could resolve their illegal behavior, oops, excuse me I forgot banks can not do anything "illegal" and it must be called "administrative boo-boos", there are not enough personnel in local sheriff's offices and inside the court system to process the avalanche that is still tied up before the foreclosure fiasco was exposed. The issues go far beyond forging paperwork and lying about who holds the titles to the property. There are non-owner squatters to be evicted, liens to be satisified from municipalities and counties, and of course, tens of thousands of dollars of repairs to be done in a lot of the homes sitting vacant for a year or more.

    Too bad the idiots in charge do not understand the cure to the housing crisis is not more government financing or "extend and pretend"...it's bulldozers and lots of them.

    Thu, 10/14/2010 - 08:24 | Link to Comment bronzie
    bronzie's picture

    "bulldozers and lots of them"

    Flint, Michigan is scraping about 40% of the town - have to consolidate so they can continue to provide little things like police and fire coverage ...

    Thu, 10/14/2010 - 10:10 | Link to Comment Thunder Dome
    Thunder Dome's picture

    Don't forget that in every case now the owner will file a motion requesting plaintiff produce note which will cause further delays.

    Thu, 10/14/2010 - 08:08 | Link to Comment bronzie
    bronzie's picture

    "as sales of pre-foreclosure and foreclosed properties, which account for nearly one-third of all sales, dry up and the shadow inventory of distressed properties grows"

    to think that a moratorium on foreclosures is going to limit supply and therefore help support prices is just silly - especially when we are going into fall and winter, the traditionally slow time time of the year anyway

    Thu, 10/14/2010 - 08:20 | Link to Comment lead salad
    lead salad's picture

    This should be good for +50 on the djia today.

    Thu, 10/14/2010 - 08:47 | Link to Comment TheJudge2012
    TheJudge2012's picture

    I'd think homes that can show clear title will sell at a premium.

    Fri, 10/15/2010 - 00:01 | Link to Comment HungrySeagull
    HungrySeagull's picture

    We already had one sold almost instantly. The only delay is fax machine and paper/ink issues. A unencumbered title with free and clear home that has no liens or problems will sell so fast....

    I wonder for a moment if some home owners will wake up one day and put a for sale sign outside and sell it the same week for some imaginary inflated figure as cash.

     

    And these buyers sick to the stomach and fed up with spending months and years slogging through house after house with problems will see it and come flocking like seagulls (Pun intended) after some thing interesting is tossed onto the market.

    Thu, 10/14/2010 - 10:07 | Link to Comment Thunder Dome
    Thunder Dome's picture

    Of course the TBTFs want to halt foreclosures.  The pipeline is so clogged its about to burst.

    Tue, 11/16/2010 - 10:41 | Link to Comment daniel
    daniel's picture

    Really this is a great post from an expert and thank you very much for sharing this valuable information with us.
    cheap vps
    windows vps
    forex vps
    ucvhost

    Fri, 02/25/2011 - 01:03 | Link to Comment george22
    george22's picture

    colleges have printing presses too... the temptation is always too strong... all nonprofits act to merely expand their fixed costs and infrastructure... to the point where they can grow revenue no more and have no reserves for a harsh winter.

    if they want to actually fix education, the first step is to sit little johnny down and tell him he's too fucking stupid to ever wander into field X... he's not going to be an astronaut... and he might as well get used to saying, paper or plastic. This stops little johnny from going to college, taking on more debt than the job market can sustain, and having a debt noose around his neck for the remainder of his days. This also flushes the system of many complete hacks, frauds, and otherwise worthless teachers (but dont tell them that since they're "sacrificing" for us).
    black dice watch|000-977|642-982|links of london bracelet

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