The question for the newly above water borrower: to sell or not to sell

 NEWS
Mar 162013
 
The question for the newly above water borrower: to sell or not to sell

The increase of home values have pushed some 1.4 million underwater borrowers into positive equity territory. The Federal Reserve have engineered ultra low mortgage rates and banks have suppressed the shadow inventory into “cloud inventory‘” Meaning many homeowners will receive loan modification after loan modification leading to a false sense of confidence, but in the long term most will end up losing their homes. However, for these newly above water borrowers threats still remain to push them underwater again. Whether its market risk, balloon payment shock, mortgage rate increases, tax law changes or even demographic changes in their neighborhood it’s [Read More...]

Government and lender solutions focus on loan modifications and short sales

 ANAHEIM, NEWS
Nov 132012
 
Government and lender solutions focus on loan modifications and short sales

Based on their recent behavior, it’s safe to conclude the government and the banking cartel believe they can resolve all their ills through loan modifications and short sales. Despite a huge shadow inventory of delinquent loans, lenders have slowed their foreclosure processing, and they show no signs of picking up the pace despite the recent increase in delinquencies likely caused by people opting for a free ride. I believe lenders will ultimately be forced to push out committed squatters in a foreclosure, but I also believe that lenders will also try and fail at every other alternative first. The push [Read More...]

Delinquent mortgage squatters will miss the recovery rally

 NEWS, NORTH TUSTIN
Oct 232012
 
Delinquent mortgage squatters will miss the recovery rally

If there is any justice in our financial system, delinquent mortgage squatters will face negative consequences for receiving their free ride. Right now, millions of people are not paying their mortgages, and the banks are not foreclosing on them. I paid my rent for the last five years and many loanowners struggled to pay their bloated mortgages, but after milking their properties of all the equity, many Ponzis quit making their mortgage payments and have been living payment-free ever since. It’s not fair to those who pay for their housing to subsidize those that do not. Delinquent mortgage squatters have [Read More...]

Banks cannot force a short sale

 FULLERTON, NEWS
May 312012
 
Banks cannot force a short sale

Banks cannot force a short sale. So what, you say? Well, this simple fact has eluded the banks and the pundits who believe banks can simply shift their liquidation efforts from REOs to short sales. The major banks in the settlement deal want to complete more short sales to reach their write-off quotas. Short sales count toward their settlement amount, and foreclosures do not. This explains much of the recent dramatic shift away from foreclosures. However, foreclosures are within the control of banks; they can force foreclosures. Short sales are not within the banks control. Sure, they can approve more [Read More...]

Is the banking cartel in violation of the Sherman Antitrust Act?

 LAKE FOREST, NEWS
May 292012
 
Is the banking cartel in violation of the Sherman Antitrust Act?

Unfettered capitalism has its drawbacks. The two most notable among them are key issues in the housing bubble and bust: Ponzi schemes, and monopoly price fixing. Ponzi schemes are destructive because they create artificial demand for goods and services based on unsustainable growth in investment or debt. A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation. The Ponzi scheme usually entices new investors by offering higher returns than other investments, in [Read More...]

California bank repossessions continue to plummet, squatters rejoice

 NEWS, SANTA ANA
May 232012
 
California bank repossessions continue to plummet, squatters rejoice

Like any business, banks adjust their business plans quarterly based on both internal and external forces. Internally, banks respond their need for additional capital to fund operations. Externally, they cope with a declining housing market, recent regulatory changes, and new conditions imposed by the bank settlement. When banks adjust their business plans, it may have sudden and dramatic effect on their policies. In the first quarter of 2012, the major banks which control most California REO dramatically reduced the number of properties they purchased at auction. The precipitous declines in REO were not due to improving borrower delinquency. Far too [Read More...]

Delinquent mortgage squatting ends in 2012

 COTO DE CAZA, NEWS
Mar 122012
 
Delinquent mortgage squatting ends in 2012

The lending Ponzi scheme that inflated the housing bubble popped in August of 2007 with a credit crunch. Lenders realized their collective folly and abruptly stopped lending to prevent further losses. Without the lender air needed to sustain the bubble, house prices abruptly collapsed, and millions of borrowers who never could afford their payments gave up trying. The surge in mortgage delinquencies far outpaced the ability of lenders to process foreclosures and absorb them in the resale market. Rather than accumulate 10 million REO or push house prices back to 1990s levels through an MLS fire sale, lenders decided to [Read More...]

Grifters for God: fraudulently occupying a $1.3M home for five years

 BREA, NEWS
Mar 062012
 
Grifters for God: fraudulently occupying a $1.3M home for five years

One of the cartoons I post when appropriate is called the National Squatters Entitlement. It speaks to a truth about people’s attitudes toward home ownership. People convince themselves they own property even if they have no equity claim. Their names may be on title, but all they really own is their loan. I discussed this at length in Money rentership: housing and the new American dream: The mortgage encumbrance gets to the core of the unnoticed change in people’s concept of property ownership; people who have little or no equity stake in a property have no ownership despite what legal [Read More...]

Delinquent mortgage squatters predominate high-end properties

 COSTA MESA, NEWS
Mar 022012
 
Delinquent mortgage squatters predominate high-end properties

The housing bust began when subprime borrowers were unable to make payments on their 2/28 loans. Subprime borrowers have less resources than other borrowers, so when they experience any financial distress, they immediately implode. The collapse of subprime in 2007 led to a large number of foreclosures in 2008, and housing began its death spiral. I have been bearish on high end properties since the beginning of the housing bust. So far, reality has not met up with my most dire predictions. Despite this fact, my basic analysis of the situation hasn’t changed. The high end is going to come [Read More...]

Mortgage delinquencies at major banks still more than 12 times normal

 NEWS, WESTMINSTER
Jan 022012
 
Mortgage delinquencies at major banks still more than 12 times normal

A new study from Office of the Comptroller of the Currency showed mortgage delinquencies at major banks at 12% when it is normally less than 1%. Many of these mortgages are shadow inventory where banks have been allowing delinquent mortgage squatters to stay rent-free for years. Also, foreclosures are increasing rapidly as the banks are finally accepting rising prices will not bail them out, so they are going to have to clear out the delinquent borrowers on their own. Amend, extend, pretend is dead. Mortgage Default Is A Financial Bonanza For Many Homeowners As Foreclosure Crisis Continues December 22, 2011 [Read More...]

Delinquent mortgage squatters: the legacy of the housing bubble

 NEWS
Jun 212011
 
Delinquent mortgage squatters: the legacy of the housing bubble

Strategic default is often the wisest course of action for a family to take. Lenders are hoping to escape disaster while borrowers and attorneys partner to leave their mark on lender’s balance sheets. In the future, the threat of strategic default should make lenders more reluctant to make stupid loans with payments greatly exceeding comparable rents (more on that soon). However, after a strategic default, what is the borrower to do? I think they should get out and move on with their lives because once they quit paying, it is only a matter of time before they must leave. This [Read More...]

Delinquent mortgage squatters provide $50 billion economic stimulus

 NEWS
May 102011
 
Delinquent mortgage squatters provide $50 billion economic stimulus

Recently I wrote about The real Ponzis and posers of Irvine. Peggy Tanous of the Real Housewives of OC made a conscious decision to get a boob job rather than pay her rent. She is not alone. The plastic surgeon undoubtedly appreciated the money, and any other provider of goods and services that received the Tanous’s money did the same. The combined economic stimulus of all the delinquent mortgage squatters is estimated at $50 billion this year alone. Back in June of last year, I reported Strategic Default: The $10,000,000,000 Monthly Economic Stimulus. The case could be made that our [Read More...]

Profiles in Squatting: Ladera Ranch, California

 NEWS
Dec 142010
 
Profiles in Squatting: Ladera Ranch, California

Is shadow inventory all in your head? Is it real? Are there really debt zombies roaming the shopping malls spending the money they should be putting toward their mortgage? Home ownership in California means you gorge on HELOCs when times are good, and squat in luxury when your creditors cut you off. Its a great system for Californians. They get to spend as they please and pass the bills off to the rest of America in taxpayer bailouts. I see no reason to believe it will not happen again soon. Welcome to Zombieland: Ladera Ranch, California By Pat Regnier, assistant [Read More...]

After Eight Years of Squatting, Who Absorbs the Losses?

 NEWS
Nov 012010
 
After Eight Years of Squatting, Who Absorbs the Losses?

Mortgage Mess: Shredding the Dream The foreclosure crisis isn’t just about lost documents. It’s about trust—and a clash over who gets stuck with $1.1 trillion in losses October 21, 2010 — Peter Coy, Paul M. Barrett and Chad Terhune In 2002, a Boca Raton (Fla.) accountant named Joseph Lents was accused of securities law violations by the Securities and Exchange Commission. Lents, who was chief executive officer of a now-defunct voice-recognition software company, had sold shares in the publicly traded company without filing the proper forms. Facing a little over $100,000 in fines and fees, and with his assets frozen [Read More...]

Squatting Among the Rich and Famous

 NEWS
Sep 242010
 
Squatting Among the Rich and Famous

I recently wrote that squatting is becoming a way of life for many delinquent borrowers. Of course, this doesn’t meet the technical definition of squatting which is possession of real estate without the owner’s permission. In this instance, the squatters are technically still the owners of property, so there is nothing illegal going on, but these owners are generally hopelessly underwater and failing to make their mortgage payments. They are in possession of real estate that can be called to auction at the discretion of their lender at any time. Ultimately, they will lose their homes. Today, we are going to look [Read More...]

From Squatting to Renting: Another Solution to Stabilize Housing

 NEWS
Sep 152010
 
From Squatting to Renting: Another Solution to Stabilize Housing

Some housing markets need a tournequet to stop the profuse bleeding of home equity. In the most beaten down markets, prices have overshot fundamentals to the downside. In Monday’s post I discussed Another Dumb Idea to Shift Private Mortgage Losses to Taxpayers. Today, I am going to look at a much better proposal for dealing with the reality of millions of foreclosures owned by the US government. GSEs to Lose Tens of Millions Lisa Marquis Jackson — John Burns Real Estate Consulting August 28, 2010 While officials were gearing up for the August 17, 2010 meeting on GSE reform, the [Read More...]

 Older Entries