The Mess Regarding Foreclosures
Foreclosures in all 50 states are now being called on for complete reviews. Banks could have been fraudulently throwing people out of their homes, without the legal authority to do so thanks to a break in the chain of title since the mortgages were bundled into securitized products, nobody really knows, who is actually able to foreclose.
With foreclosures making up 1/3 of the home purchases in California, this could cause some serious issues regarding title insurance in the future since banks were signing off on foreclosure paperwork without the legal authority to do so. I am sure this will all get figured out appropriately but it just another way for the banks to extend things further out and pushing a recovery even further into the future. I still find it absolutely amazing that banks, which we bailed out, are able to tell Wall Street the value of a loan is its original value as opposed to what it would be on the secondary market. A bank can tell Wall Street a loan that originated in 2004 at a value of $1.5 million is still worth 1.5 million even though we all know it is probably worth more like $900K in today’s environment. Wouldn’t it be great to be able to tell people that your stock portfolio is worth the same amount it was before the stock market crash?
If you have a few minutes, watch this funny video regarding the foreclosure crisis from Jon Stewart.
By John SkinnerForeclosures – Record High Numbers and CA Investigation of Practices
This September saw a record number of homes being foreclosed upon as lenders carry on working through the distressed properties in their inventory. September foreclosures increased 3% from August and reached a high of 347,420 properties.
Arguably in response to the increasing number of homes in foreclosure and the spike in foreclosure fraud that has occurred during this real estate bust, California has joined 48 other states who are investigating foreclosure practices. California’s non-judicial foreclosure process may be to blame for lenders not complying with the law to contact homeowners to discuss other options before foreclosing. California Atty. Gen. Jerry Brown announced the investigation and explained that he wants it to be determined if lenders are in compliance.
Links to full articles from HousingWire and the LA Times: Money & Company Blog are below:
Housing Wire: Foreclosures reach record high in 3Q
Money & Company: California among 49 states to jointly investigate foreclosure practices
So Cal real estate notes to ponder
– The typical monthly mortgage payment that Southern California buyers committed themselves to paying was $1,030 last month, down from $1,074 the previous month, and down from $1,831 a year ago. Adjusted for inflation, current payments are 52.9% below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 61.4% below the current cycle’s peak in July 2007.
– Southern California’s median home price in April was $247,000, down slightly from the previous month, a real estate research firm reported.The price drop — a decline of 51% from the 2007 peak — came after three months in which the median price had held steady at $250,000, according to the data from San Diego-based MDA DataQuick.
– First American CoreLogic, which has a vast store of data on actual mortgages, reports that Los Angeles County mortgages delinquent by 90 days or more in March were up to 8.9% of the total — more than double the percentage of March last year.
Foreclosure filings, the next step in the foreclosure process, were issued on 2.3% of L.A. County mortgages in March, up from 1.9% in March 2008.
Repossessions, the final step in foreclosure, which results in a property being taken by the lender, were done on 1.6% of L.A. County mortgages in March, up from 1.2% in March 2008.
