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

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Thu, 10/14/2010 - 00:12 | 648352 HungrySeagull
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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 | 648461 midtowng
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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 | 648500 Founders Keeper
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[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 | 648717 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 | 648359 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 | 648394 Iuubob
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Don't blame this one on the govt, the banks own this one and it's a doozy

 

Thu, 10/14/2010 - 01:16 | 648468 JLee2027
JLee2027's picture

+

Thu, 10/14/2010 - 04:08 | 648580 EscapeKey
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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 | 648601 Moonrajah
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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 | 648625 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 | 648711 Moonrajah
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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 | 648727 EscapeKey
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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 | 648701 TuesdayBen
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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 | 648360 buzzsaw99
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Yeah, without those foreclosures coming back on the market there will be no houses for sale. lulz

Thu, 10/14/2010 - 00:26 | 648374 BobWatNorCal
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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 | 648584 EscapeKey
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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 | 648593 BobWatNorCal
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A way will be found to say it.
It just won't be true.

Thu, 10/14/2010 - 04:38 | 648595 BobWatNorCal
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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 | 648603 Moonrajah
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do you want paper dollars or do you want a paper house?

 

There! Fixed that for you.

Thu, 10/14/2010 - 05:14 | 648605 EscapeKey
EscapeKey's picture

Who will be able to get an affordable mortgage?

Thu, 10/14/2010 - 05:40 | 648613 Winterfreak
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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 | 648362 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 | 648369 Tyler Durden
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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 | 648379 Oracle of Kypseli
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That could be a bonanza to builders. Clear title, new house, but questionable price.

Thu, 10/14/2010 - 00:46 | 648405 DarkMath
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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 | 648426 HungrySeagull
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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 | 648545 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 | 648442 Chito Campo
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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 | 648400 Iuubob
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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 | 648410 Oligarchs Gone Wild
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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 | 648439 TheMonetaryRed
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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 | 648494 TheMonetaryRed
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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 | 648570 MachoMan
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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 | 648504 HarryWanger
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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 | 648581 bob_dabolina
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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 | 648662 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 | 648367 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 | 648404 Iuubob
Iuubob's picture

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

 

Thu, 10/14/2010 - 03:56 | 648574 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 | 648371 Village Idiot
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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 | 648373 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 | 648382 LeftCoastRefugee
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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 | 648396 HungrySeagull
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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 | 648421 LostWages
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"And possibly a difficult winter" -- Kondratieff Winter that will last for years.

Thu, 10/14/2010 - 01:16 | 648465 HungrySeagull
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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 | 648576 MachoMan
MachoMan's picture

no

Thu, 10/14/2010 - 01:27 | 648481 covered
covered's picture

Not for sale.

Thu, 10/14/2010 - 00:59 | 648398 Village Idiot
Village Idiot's picture

It's going to be a slow winter.

.

Thu, 10/14/2010 - 00:46 | 648407 Iuubob
Iuubob's picture

LeftCoast is spot on!

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