Foreclosures: 'April was a shocker'

Source: CNN

NEW YORK (CNNMoney.com) -- Foreclosures in April exceeded even March's blistering pace with a record 342,000 homes receiving notices of default, auction notices or undergoing bank repossessions, according to a regular industry report.

One of every 374 U.S. homes received a filing during the month, the highest monthly rate that RealtyTrac, an online marketer of foreclosed properties, has recorded in four-plus years of record keeping.

"April was a shocker," said Rick Sharga, a spokesman for RealtyTrac. "I would have bet on a dip because March foreclosures were so high.

Instead, filings inched up 1% from March and rose 32% compared with April 2008.

Read more: http://money.cnn.com/2009/05/13/real_estate/April_foreclosure_stats/?postversion=2009051306

They started predicting it would end sooner rather than later.

Charles Schwab Investment Strategist Says Recession Over

http://www.thedenverchannel.com/news/19445013/detail.html

National Financial Analyst: Recession is Over

http://www.wqow.com/Global/story.asp?S=10350487

They have a huge tit they can suck on for ever and ever so there is no recession for them..For the Average American though I predict some suffering yet ahead.

There is a Leveling of the bad news

or some other bull shit like that

...that it ended a couple months ago.

would end in a DEPRESSION!

have declared the recession over, as stupid as that may seem.

I guess I just don't get what's going on here. We all know the recession is going to go on for awhile.

I'm not saying I believe anything the comes from the MSM regarding the economy.

There is no more reliable bellwether on major developments than Cramer. Whatever it is, the real expectation is the opposite. Because in case there's anyone who hasn't figured it out left, his job is to be wrong. He touts junk that friends need to dump on suckers. Period.

and he's crowing all about it, which means we're screwed.

the recession/depression is far from over. the fat lady hasnt sung. only the very wealthy bankers are sitting pretty.

Why should they? It hasn't been mandated by congress. It was given to the banks as an option and it's an option they choose to decline. Why do they refuse to work with the homeowner yet take possession of the home and sell it for a fraction of what is owed? I think they're double dipping. They're getting government funds, they're being paid by the mortgage insurance companies when the loans go into default. Then they're making money selling the property to strangers. Hell, the banks win all the way around. In my estimation, foreclosures are gong to continue to increase until working with the homeowner is mandated by congress.

inventory of homes in possession of distressed homeowners has been reduced to a 'free market' level.

Because if you think Congress is going to help the American people, I have a bridge to sell you.

So my attitude has become, "fuck the banks." I don't blame anyone for walking away from their financial obligations if it makes good business sense. If they have no moral obligation to help, then I have no moral obligation to pay.

essentially, the American people are not 'helping' the banks - they are being robbed, basically.

So fine, what can we do, but then don't you banks dare lecture me or any other American about personal responsibility or 'moral financial obligations'.

I just won't listen to such talk anymore.

Wrong on so many accounts. First of all, the majority of what you are talking about are mortgage servicers and not banks. Second, how would intentionally foreclosing to sell for a fraction of what is owed ever be profitable?

they auction for. So no incentive of any kind to seek any real value or deal with a late payer.

System is rigged toward lenders. Surprised?

I’d like to know the name of this swap that exists for foreclosures b/c I’ve never heard of it

It does not exist.

http://en.wikipedia.org/wiki/Credit_default_swap

"Credit default swaps are often used to manage the credit risk (i.e. the risk of default) which arises from holding debt. Typically, the holder of, for example, a corporate bond may hedge their exposure by entering into a CDS contract as the buyer of protection. If the bond goes into default, the proceeds from the CDS contract will cancel out the losses on the underlying bond."

One possible example.

now you've heard of it.

therefore it exists.

I've heard of credit swaps! But there is not one that exists for foreclosures. There may be a swap for a mortgage security bond, but a property going into foreclosure is not going to activate a swap. Also, a swap won't guarantee against 100% of a loss and their coverage percentage varies greatly. It cracks me up that some believe that a mortgage servicer does not lose their shirt through a foreclosure.

Banks own bundles of mortgage debt & take out CDS's to hedge.

Get it?

"hypothesis." And I use that term loosely. You can hedge all you want, but it no hedge will ever cover servicing and foreclosure costs. You may get 40% of your UPB if you were really lucky, but you'd still be losing a ton of money.

If I'm so wrong, then how about you telling my why the banks are refusing to work with people. And I know for a fact they are refusing to work with people. I have the letters to prove it.

I went to a foreclosure prevention counselor. He works for the county I live in. I was told that I qualify for a rework under the current administrations plan. I sent my hardship letter, my proof of income, and proof that 1/2 of my income was being eliminated. I provided proof of my expenses (I have no debt outside of my home). All of the required information was provided and verified by the counselor. The first thing my mortgage company told me was that they received no paper work. Well if they received no paperwork, how did they know that I was requesting help? It was all attached to the letter I wrote them. I resent the paperwork and this time requested that they actually put it in my file. I did this at the beginning of April. I got a letter yesterday telling me that under their guidelines, my application for assistance in their hardship program was denied because it falls outside the required guidelines set forth in their program. I can't even get these people on the telephone to explain to me what their guidelines are. They have conveniently closed all their offices in the state where I live, so it's not like I can go to an office and speak to someone face to face.

Look, the taxpayers have bailed out the banks. They've lost nothing. The mortgage insurance pays the lender if the homeowner defaults. That's double dipping. When they sell the home at a fraction of what was owed by the person... well, that's just gravy.

I owe 124,000 on a 137,000 dollar mortgage at almost 12% interest. I wasn't asking them to take anything off the principal. If they would just lower my userous interest rate to a reasonable level, I would be able to stay in my home and make the payment. They won't refinance because they tell me the house is no longer worth what I owe on it.

I am resigned to losing my home and I can guarantee you that they won't get 40,000 when they resell it. So I guess that's just too bad, so sad for me.


I anxiously await your answer in regards to how wrong I am.

I haven't worked in that industry for a few years but I stil have a few contacts. Let's start here.

By "foreclosure prevention counselor" do you mean someone outside the mortgage servicer that claims to "assist" people with their mortgage help app? If so, I would point out that they are a scam that they tell people they qualify in order to collect a fee. They then blame the mortgage company for the denial. Truth is the mortgage company is bound by strict gross income and DTI requirements designed by B's own treasury dept.

This is a good rundown of the Obama mortgage plan.

http://www.motherjones.com/mojo/2009/02/nitty-gritty-obamas-mortgage-plan

Some more good info for you.

http://www.makinghomeaffordable.gov/modification_eligibility.html


http://www.makinghomeaffordable.gov/beware.html

edited to add links.

I know what I'm living with every day. thanks for your non-answer.

I gave you copious information if you read any of those links.

Do you meet the Obama criteria? Did the counselor go over all of the criteria? There are even more requirements than the initial one's listed to the public on Obama's site.

I guess an easy place to start would be what interest rate would you need to bring your DTI to 38%?

I asked you to tell me how I am wrong about the banks. You didn't. I am familiar with Obama's program and I do qualify. However, it is an option for the banks to work with the homeowner, not a mandate. If they choose not to, then they don't, and my bank isn't!

It is actually a mandate at this point if they've taken TARP money.

So you know better than the people who have been given jobs to help people and you don't even work in the industry? I know my situation, the housing counselor knows my situation and said I did qualify for a rework.

I think you're full of baloney and that's putting it politely.

I also asked a simple question. What would your interest rate have to be to bring you DTI down to 38%? Obviously, I do not want to got into too much detail on your debt load. I am also curious why you signed a loan with 11% interest. Is that one loan or a 1st and a 2nd?

I have no debt outside of my house. My car is paid for. I have mortgage, gas, electric, cable, water, homeowners and car insurance and property taxes. My interest rate is nearly 12%. my income declined from 3500.00 a month to 2100.00 per month. I am not an expert and dont know what your acronyms mean. I also told you that I would need my mortgage payment of 1435.00 cut in half to be able to continue making it and be able to pay the rest of my bills. You do do the fricken math! I'm taking a walk.

I gave you a link with a step by step checklist showing you how to calculate if you qualify under Obama's plan. You seem to not WANT to use the resources available. It is not a big surprise that you ended up with a 12% interest rate given your aversion to math.

DTI = Debt to income. It is detailed all throughout Obama's plan.

I've just been writing the check the last 5 years since. Thank you for insulting my intelligence though, you seem to be a real gem of a guy.

For your own benefit.

I have no debt outside of my house. My car is paid for. I have mortgage, gas, electric, cable, water, homeowners and car insurance and property taxes. My interest rate is nearly 12%. my income declined from 3500.00 a month to 2100.00 per month. I am not an expert and dont know what your acronyms mean. I also told you that I would need my mortgage payment of 1435.00 cut in half to be able to continue making it and be able to pay the rest of my bills. You do do the fricken math! I'm taking a walk.

I am sorry for your troubles, especially for the loss of your spouse. It must be highly disturbing to be dealing with all of this.

The reason the bank is not working with you, according to the figures you gave me, is that there is little chance that you can keep the house over the long term. You say you need your mortgage payment cut in half to keep the house, and 38% of $2,100 is $798. Half of $1,435 is $717.50.

Taking your $124,000 mortgage down to 6% would yield a P&I payment of about $743 on a remaining term of 30 years, using your principal figure of $124,000. Then add taxes and property insurance plus MI. At 6%, your mortgage payment would be significantly above the level you think you can afford.

It's a very bad loan. The chances that you could continue to pay it are very low. What would happen when you needed a new car, for example? And would you be able to maintain this house? Because there is no chance that you could get a home equity loan on it to repaint, fix the roof, etc.

You yourself say that the bank won't clear 40K if they foreclose and sell. Maybe so, but one of the problems keeping borrowers staggering onwards in mortgages they will not be able to pay over the long haul is that when you do finally foreclose, the property is run down and the mortgageholder takes even a bigger loss.

Again, I am very sorry for your troubles, but if there is so little residual equity in the home (original balance $137,000, current balance $124,000, you think current resale 40K), aren't you better off over the long term getting out of this? If you want to stay and can make an additional principal payment, you could try that. It sounds like if you could modify the risk picture you might qualify for a rework.

Your local housing counselor seems to have misled you a bit if you were told that cutting the interest rate to 6% would get you where you needed to be.

The servicer is bound by fiduciary duty to whoever owns the mortgage. The obligation is to rework where possible, but reworks can't be done in all circumstances.

(it isn't enough to pay the mortgage and I figure why try to keep on keeping on only to lose it in the end?) and finding another place to live. As I said in an earlier post, I'm resolved to losing my home.

But I think you are wise.

You clearly aren't a spendthrift because of your low bills. I don't think you should be throwing more money into something that is likely to lose you money over the long run. It's just that it is particularly hard to lose the home you shared with a deceased spouse, and I can entirely understand why you have been struggling to keep it.

An awful lot of people are having to make very difficult choices these days.

I hope for you that finding a new place will end up being the road to having more control over your future. If you can see it that way, it may hurt less.

In the hope that this may help you to see it that way, let me tell you that I am probably going to be paying for a prescription for a man whom I don't know that well. He was a neighbor of my mother's, and she thought well of him. He lost his wife. Then he lost his home to a tax lien when he lost his job. He now has a job, but he is not yet eligible for Medicare. He has a place to live right now. He has no car. I have seen him walking places a few times and stopped and picked him up. Last week I stopped to just say hello, and I found out he had collapsed on the job and been taken to the hospital the previous week. It turned out he has a bleeding ulcer. However he can't afford to fill one of the prescriptions he was given.

I told him my family could help with the prescription, and I talked to my family and we will probably title him over an old car we have and don't need. He's reluctant to accept the help, but everyone needs help sometimes. None of this is his fault. He just kept getting hit with the punches.

It can get worse, and I'd hate for you to end up in this type of situation. I am very sorry, again, for your loss.

The CDS insurance against foreclosures means that the CDS insurance companies take the losses.

who have just recently "given up" and are now waiting it out the 6 months or so it takes to foreclose.

One guy (he is not a friend, so don't flame me) has just decided this last week. He decided that he will never get out from under his mortages, so he's just stopping paying. Right after he decided this, he ran out and bought a big diesel pickup and toy-hauler for his dirt bikes. He wanted to get them while his credit was still good. He figures as long as he's going to have to live with relatives, he wants to be able to get away for the weekends.

:eyes:

It's people like him that give the families that are really hurting a bad name.

And the economic mess is still not cleaned up.

http://www.chron.com/disp/story.mpl/front/6421238.html

This is going to start happening all around the country. Taxpayer money being used to buy foreclosed properties at market value, say $60,000, as opposed to appraised value, say $100,000, and then flipped to homebuyers, most of them not realizing the reality, for the market value but kept on the tax rolls at the appraised value which results in an artificially overvalued market which of course preserves the tax base since of course everyone who knows their house is only worth $60,000 will be told, no, it's worth $100,000.

Everyone but the taxpayers is getting "stimulated" unless you consider being told to "bend over" being "stimulated."

Eventually everything will collapse anyway. All Obama and Congress has done is add trillions of dollars of debt that we, our children, and our grandchildren will have to cover through taxes.

But the rich? They will continue to live quite well. And with the usual loopholes will pay little in taxes. As will their children and grandchildren.

At 40% which some predict is what the average tax rate will be in a couple of years, the family that pulls in $50,000 will have $30,000 net income, less other taxes of course. The family that pulls in $1,000,000 will have $600,000, less other taxes of course. But even with the other taxes the family with $600,000 is going to do much better than the famly with $30,000. One family will be able to afford single-payer health insurance, for instance. The other family will not.

Change? Just more of the same. Although perhaps there is change. The rich are still getting richer. The poor, however, are not getting poorer. The poor are headed for the freeway underpasses.

You say:

"At 40% which some predict is what the average tax rate will be in a couple of years, the family that pulls in $50,000 will have $30,000 net income, less other taxes of course. The family that pulls in $1,000,000 will have $600,000, less other taxes of course. But even with the other taxes the family with $600,000 is going to do much better than the famly with $30,000. One family will be able to afford single-payer health insurance, for instance. The other family will not."

Which is a fairly typical presentation. But, unless you're predicting a 40% flat rate, your numbers are really quite badly off. Under a graduated rate system, which is all we've ever had, you don't pay the highest marginal rate on all your income. So $50K with a top marginal rate of 40% doesn't equal $30K net, nor does $1M get you to $600K.

Just for the sake of accuracy. Your point is otherwise valid and well-taken.

as opposed to repossessions or auction notices?

The devil is in the details.

The banks will come crawling to the American taxpayer for more cash.

n/t

Foreclosures are going to increase each month for at least the next year. Wouldn't surprise me if it went two years.

Nobody remembers the S&L mess of the 80s at all?

Still, this far into the deflation of the bubble, they are "surprised" or "shocked." This is a major correction occurring, and at the end of it, there will be much more affordable housing. The smart thing is to walk away from these houses.

And also- a shout out to Obama, who sat back and said almost nothing to get the cramdown measure passed. Heck of job!

That really says everything about how little these people understand. "Wow, we really had a lot last month, I just can't believe won't be better this month!"

Anybody who has looked at the ARM reset forecasts would be completely unsurprised by what's happening. But apparently that's too much information for a realtor on foreclosed properties.

each month, this should come as a surprise to no one.

:dunce:

Is total ignorance the requirement to be a spokesman, or what?

Corrupt SOBs.