BOA admits "hundreds of thousands" mortgage defaults not foreclosed.

"Bank of America's top mortgage executive, testifying today before Congress, will release sobering details of home-loan delinquencies, including that "hundreds of thousands of customers" haven't made a payment in more than a year."
So for more than a year, they are still in their homes???????
Apparently the rumors of banks not foreclosing are true.
And when you remember that BOA and Citibank own about 80% of the mortgages by now....

"Almost 500,000 struggling loan customers have not supplied information or taken other basic steps to qualify for mortgage help. About half of them have not made a payment for more than a year, or owe more than 50 percent of the value of their homes."

Now why are the banks NOT foreclosing?
One reason might be is because any 2nd mortgage will become worthless on balance sheets if the first
mortgage is foreclosed on. That is a lot of dead paper to cover up on the books.

Gee, Bernanke was reporting today that consumer spending is up, therefore "recovery is on the way".
Is it possible consumers in the "free" non-foreclosed housing are buying food and other essentials with the mortgage money?
And what happens when that cannot be done any longer?

So wonders Denninger in this column:

http://market-ticker.denninger.net/archives/2194-Oh,-So-The-Recovery-Is-About-Delinquency.html

They try to sell it, but wont get the price they want, so they allow it to float. Till better times, I guess.

and banks did much the same thing in the Depression for much the same reason.

Empty housing that cannot be sold in a bad market with high unemployment is a magnet for vagrants, vandals, and vermin. Often after a few years of standing empty, it's beyond ever being occupied again and is a total loss.

Families who are allowed to stay in that housing while the bank looks the other way will keep it habitable. As the market improves and houses begin to sell, they can either be offered new payment terms, rental terms, or can be foreclosed at that time.

Until or unless that happens, keeping properties occupied, even at a loss, is the best bet.

homes from plummeting in price during the depression though. There are empty houses on my way to work that have been that way for more than three years. And lots of empty store fronts. I hope things turn around soon.

but it will keep housing stock habitable and salable when the bottom is reached, rather than being a total loss that has to be bulldozed.

Problem is..They haven't!

Nor have they been willing to take the writedowns on the HELOC's/seconds that have about the same value as used toilet paper.

Instead they continue to fight accounting and consumer protection reforms, while taking bonuses on profits that simply don't exist.

I other words, That dog don't hunt.

They'll just quietly do it the way BoA is doing it, leaving people in their homes but under the constant threat of eviction.

They'll fight all those reforms because they don't want to change the way they do business. The next bubble is right around the corner and it'll be fat city any day now, you know.

They especially don't want to write down any of those worthless loans they made to people who obviously could never pay them off. That would admit that their balance sheets are junk.

Sometimes I like his columns. Sometimes I think he's just an unfeeling libertarian ass pressing his own bs agenda. Of course I'd say the same about zerohedge as well.

But it's interesting that this tidbit was officially floated by BofA. So they have hundreds of thousands of non performing loans? First and sometimes second mortgages?

Why would anyone invest in BofA or want to do their banking there knowing this?

His access to ahead of the curve/MSM information and his take on below the surface behavior around the economy make him a good resource for me.
On other topics, I could throw a rock his way sometimes.

I have no clue as why anyone would want to bank or invest in the big banks, other than the fact they seem to be writing all the rules, making all the money and getting away scot free with a lot of behaviors that landed Enron and others in jail.
Perhaps the "investors" have as little scruples as the banks?

mutual and hedge fund managers advice? Maximize investment return, foolish not to, everyone else is on-board?

BOA stalled on their request for modification, now the modification has been approved, BOA wants to foreclose on the owed balance


nuts


it has been a crazy ride

When you're talking Skank of America (or ShittyBank), it's all the same.

So in effect, the "improved" economy might be on the backs of the people who are not making that
1,000 or so monthly payment. Not to mention housing insurance payments.

With the change in accounting rules last year mortgage holders are allowed to keep these properties on
their books at a "mark-to-myth" price, not at the real market price today. That allows them to show
x dollars as their capitalization. If they actually went out and foreclosed the properties would have
to be revalued at today's real market price and, as someone else pointed out, seconds would be worthless.

Which makes the coming peak in refinance of 5 year arms, charts of which I see everywhere as peaking around
Sept through Jan of this coming winter, even more interesting. That is a lot of dead weight hanging on the
tree....

I ran across this the other day - a report that BOA has plans to increase it's foreclosure rate byt 600%

http://www.irvinehousingblog.com/blog/comments/bank-of-america-to-increase-foreclosure-rate-by-600-in-2010/?source=patrick.net

any talk of a "recovery" is simply bullshit.

into the Big Casino Capitalism scheme. To get the music going again, confidence.