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news: Phoenix mini-bubble: (more) market manipulation - 07/21/09 10:12 AM
AP put out a story yesterday about "bidding wars" that are affecting home values in the greater Phoenix area. The article states that in several markets throughout the country, prices on bank-owned homes are being inflated by a combination of investors keen on getting a deal, regular home buyers (many of them first time buyers), but mainly by the fact that lenders are not putting homes on the market as fast as they are taking them back in foreclosure. The proof: for each of the last four months (March through June 2009), over 300,000 foreclosures were reported by RealtyTrac. That's over … (4 comments)
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news: California "foreclosure moratorium": will lenders even care? - 06/16/09 09:24 AM
I've been receiving many calls and emails about California's so-called foreclosure moratorium, which went into effect yesterday. Frankly, I doubt it will actually do anything meaningful for struggling homeowners. Here's why:
Loan servicers can qualify for an exemption simply by filing a form with the state that claims the loan servicer has a modification program intended to keep people in their homes. Nothing in the law requires loan servicers to actually implement the programs (you know, where borrowers actually get their loans modified in a meaningful way), and there's no real mechanism in place to confirm that loan servicers are actually … (4 comments)
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news: Has the foreclosure crisis hit bottom? Don't bet on it - 05/27/09 08:30 AM
So it seems we have a variety of opinions regarding the proverbial bottom of the market: folks with vested interests in a thriving real estate market, like Zillow.com and commercial real estate mogul Sam Zell, claim that there are signs the market will improve in the next few months. Well, actually, Zillow did an opinion poll of users and reported that a majority of respondents think the market has hit bottom...wishful thinking, perhaps?
Meanwhile, economists familiar with the details of the actual economy - you know, employment, consumer purchases, home sales, default rates - have a sobering, and ultimately more accurate … (6 comments)
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news: Senate, White House sell out the American people - cram down cave in - 05/01/09 08:42 AM
Well, the banking lobby's millions have carried the day, and the Obama Administration left over 8 million American families twisting in the wind by failing to back up an Obama campaign promise.
On Thursday, the Senate failed to pass the cram down bill. The final vote was 45 in favor to 51 against. A dozen Democrats, including Democrat of convenience Arlen Specter of Pennsylvania, voted against the measure.
This is such a shame for the American people, as well as the economy.
As I've previously written, ending the cram down exclusion on primary residence loans would have: (1) forced lenders to … (3 comments)
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news: Senate screws the little guy: the cram down may be dead for now - 04/24/09 08:47 AM
After spending millions on lobbying (despite the lobbying ban in place for banks who received bailout money), it looks like the banking industry has spent and lied its way into delaying Senator Durbin's cram down bill.
I am shocked, dismayed, and disgusted that in Washington, it's business as usual when it comes to regular people getting a break against powerful interests who throw money (including taxpayer money) at politicians.
According to today's Wall Street Journal, Senate Republicans are continuing their campaign of "no" and walking in lock step to kowtow to the banking industry. The end result: banks probably get the … (1 comments)
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news: More nail-biting as the Senate works to pass the cram down bill - 04/16/09 10:24 AM
The Senate is officially in recess until Monday, April 20, but many senators are hard at work, trying to make - or break - the bankruptcy cram down reform bill.
At stake for banks: increased FDIC insurance, perhaps lower FDIC premiums (banks have to pay for FDIC insurance, and because of the many bank failures over the past year, rates are set to skyrocket). But for the rest of us, the American people, the stakes are much greater.
According to a few news reports, a deal may be in the works to get the banking industry to call off its dogs … (3 comments)
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news: Video about the bankruptcy cram down process - 04/10/09 01:57 PM
This is a clip from "A Day in the Neighborhood," a local San Francisco a public affairs program I appeared on back in February. We discuss how bankruptcy cram downs would work under the proposed legislation (which is still working its way through the Senate). Special thanks to Myrna Lim, the host of the program, and also to Ben Menor, the other panel member.
… (2 comments)
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news: More news on the cram down bill - Senate edition - 04/02/09 04:38 PM
I just read that the cram down bill, which already passed the House of Representatives, is facing stiff opposition in the Senate from...Senate Democrats?
Senate Majority Leader Harry Reid (D-NV) has recently commented that he may have to pull the provision from the Senate banking bill, because of opposition from lender-friendly Democrats in the Senate, led by Senator Evan Bayh (D-IN). Bayh, claiming to be acting as a "centrist," is threatening to side with Republicans in opposing the Senate version of the bill, as well as the Senate Democrats' efforts to add the bill to the budget bill.
Incidentally, is it … (3 comments)
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news: Loan Modification Madness - 12/03/08 07:55 AM
Now that the election results have begun to sink in, and economists have decreed that our economy is officially in recession (actually, the recession started a year ago), lenders are starting to see the writing on the wall. If lenders don't do more to work with homeowners to fix bad loans, then the new Congress and incoming Obama Administration will likely pass legislation that will force lenders to do things that the lenders will not like.
As a result, lenders have been announcing new and improved loan modification programs at a blistering pace. The problem is, there are too many new … (4 comments)
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news: Banking meltdown highlights absurdley weak federal oversight - 10/11/08 08:24 AM
Remember how, after the September 11 attacks, Congress moved swiftly to eliminate law enforcement "turf wars" over sharing information and cooperating to catch evildoers? In light of recent events in the financial world, it's time for bank regulators to work together for the common good and stop the current practice of pissing contests and flat out refusal to hold bad lenders accountable. There's a great article on the issue from The Seattle Post-Intelligencer.
Here's what's been going on to date: literally dozens of state Attorneys General have attempted to take large, nationally chartered lenders like Washington Mutual and National City Bank … (0 comments)
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news: "Cash for trash" set to include help for homeowners - 09/25/08 07:10 AM
It's 4:42 AM.
I've been up since 4:00, scouring Google News for the latest headlines on the bank bailout bill.
Here's the latest:
Everyone hates investment bank executives, so executive pay will get clipped in some way under the plan. Mr. Paulson, the Treasury Secretary, will not get the blank check he asked for over the weekend. Rather, he will have to answer to Congress on how he spends taxpayer money. The government will take debt and equity positions in banks it bails out. This means that Mr. Paulson will buy mortgage backed bonds, as well as stock and "warrants" (special … (6 comments)
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news: The new biggest junk debt buyer: you - 09/20/08 11:06 AM
Awhile back, I wrote a post warning about the impact that junk debt buyers could have on the housing crisis. The business model is as simple as it is brutal: buy delinquent loans for as little as 20 cents on the dollar, foreclose on the homeowners, sell the properties at 50 cents on the dollar, and double your money after costs. Never mind that the activity wrecks home values and destabilizes communities - this is business, after all.
Don't you love how it's "business" when common people get screwed, but it magically becomes "a confidence crisis" once the fat cats start … (4 comments)
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news: MA Attorney General: lenders refusing voluntary loan mods - 09/19/08 09:11 AM
In the midst of this week's market turmoil, Congress was taking testimony about the new FHA refinance program set to start on October 1. The testimony was a study in contrasts.
On the one hand, representatives from major lenders were grumbling about the prospect of mandatory principal writedowns under the FHA program. Most banks stated that they prefer to try their own approaches to loan modifications before resorting to the FHA plan.
On the other hand, the Attorney General of Massachusetts, Martha Coakley, pulled the curtain back to shine some light on what lenders have really been doing - NOTHING.
In … (1 comments)
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news: Another foreclosure scam cautionary tale - 09/14/08 12:16 PM
I found this news item about two Bay Area foreclosure scammers recently sentenced to prison for their crimes.
The two women were running a scam where they have homeowners deed an interest to a shell company so the scammers could stall a foreclosure by filing a phony bankruptcy in the name of the shell company. Usually, the scammer will tell the homeowner that the deeded interest is required because then the scammer can negotiate with the bank as an owner on title. Lenders usually get out of the phony bankruptcy and proceed to foreclose on the property.
The two convicted scammers … (0 comments)
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news: Worst of the worst: beware of foreclosure rescue scams - 09/11/08 08:03 AM
I just read yet another account of a common foreclosure scam. The article is a transcript from a story broadcast on the radio program Marketplace.
The moral of the story is twofold. First, if it sounds too good to br true, it probably is. Second, homeowners in distress are easy to take advantage of because of the real psychological despair that comes with serious financial problems.
If you are a homeowner in trouble, or if you know a homeowner in trouble, there are real options available other than falling for some scam. And if you think you are the victim of … (1 comments)
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news: 4 million homeowners delinquent or in foreclosure - 09/05/08 10:27 PM
Now it's official: the Mortgage Bankers Association, a major banking industry interest group, has released a report that confirms what many (myself included) have feared for the past several months.
Four million American homeowners with a mortgage were either delinquent on their payments or in some stage of foreclosure for the quarter ending June 30, 2008. That's nine percent of all homeowners with a mortgage.
What's worse, it's not just subprime loans that are going belly-up. An increasing number of homeowners are being caught short by a combination of resetting loan rates and declining home values. Many people with good credit … (3 comments)
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news: Homeowner beware: primer on foreclosure scams - 08/21/08 08:16 AM
In my law practice, I get more calls than I should from desparate homeowners in foreclosure who paid a lot of money - often many times (like 10 to 20 times) what I charge for actual legal services from a real live lawyer - to some company who sent them direct mail or cold called them.
The story goes like this: homeowner in default gets an unsolicited contact, is told what they want to hear: their house can be saved, etc., homeowner forks over thousands of dollars up front, which they have because the lender stopped taking their payments when they … (0 comments)
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news: More data on foreclosures tanking home values - 08/21/08 07:47 AM
Recent data from DataQuick bear out the negative impact foreclosures are having on home values.
In July 2008, REOs accounted for one third of all sales in the San Francisco Bay Area, compared to just 4.2% of sales in July 2007. In some areas, like Solano County (where I happen to live), as much as two thirds of all sales were foreclosures. The median sale price in the Bay Area is down nearly 30%, pushing home values back to what they were 53 months ago.
Some people see a silver lining: sales were up 2.2% compared to July 2007. In Solano … (2 comments)
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news: California foreclosure figures for July 2008 - 08/15/08 09:03 AM
July 2008 may be looked upon as a study in contrasts. On the one hand, it was the month that Congress and the White House put aside their differences to enact sweeping legislation aimed at stemming off foreclosures and propping up Fannie Mae and Freddie Mac.
And then there's the bloodletting on the ground.
In July, the rate of foreclosures in California was estimated at a staggering 1,300 per business day. That's triple the estimate from a year ago. California's foreclosure rate was up 22.5% from June 2008.
The most depressing news: Notices of Trustee's Sale are recording at a rate … (1 comments)
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news: New Fannie Mae loan workout incentives - 08/13/08 04:00 PM
Fannie Mae has announced new loan servicer incentives, designed encourage loan workouts instead of foreclosures.
Here's a link to a PDF of the announcement.
Some highlights:
A "HomeSaver Advance" loan program, to provide unsecured loans to homeowners as part of a workout Increased payments for loan workouts ($700), the unsecured loans described above (up to $700), repayment plans ($400), short sale approvals (from $1000 to $1500), and deeds in lieu of foreclosure ($1000) The incentives are limited to loans that Fannie Mae has to cover the risk of investor losses for nonperformance.
This is certainly welcome news for struggling owners. The … (0 comments)
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Jason Buckingham
Benicia,
CA
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Office Phone: (707) 745-2200
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