Massachusetts Surpeme Court Says No to the Banksters' Foreclosure Mill

Finally, some in this country are actually paying attention to the law. Wells Fargo and U.S. Bancorp just lost their Foreclosuregate case in Massachusetts. The Supreme Court of Massachusetts just ruled against them. The case boils down to if the bank cannot locate the paperwork, too bad, they cannot foreclose, even when they bundle these things up in derivatives and trade them like baseball cards.

Financial Times has the background on the case itself and gives one of the court rulings on securitization of mortgages with respect to foreclosures:

The Land Court then proceeded to find that (1) neither Appellant had a valid assignment of mortgage at the time of publication of the notices or at the time of the foreclosure sale, (21 the foreclosure notices failed to identify the “holder” of the mortgage, and ( 3 ) the notices were deficient under Mass. Gen. L. ch. 244, 5 14. [A592-93]. Put another way, the Land Court held that Appellants lacked authority as assignees to conduct the subject: foreclosures.

Naked Capitalism on what this ruling means:

This is the key sentence from the decision, that the use of a securitization does not alter or reduce the requirements that apply to transfers and ownership of the loans and the related property.

Continuing mortgage meltdown

The tsunami of defaults and foreclosures continue to sweep across of the American real estate market. Those investors who jumped back into the market are about to get screwed.

The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 10.06 percent of all loans outstanding as of the end of the first quarter of 2010, an increase of 59 basis points from the fourth quarter of 2009, and up 94 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate decreased 106 basis points from 10.44 percent in the fourth quarter of 2009 to 9.38 percent this quarter.
The percentage of loans on which foreclosure actions were started during the first quarter was 1.23 percent, up three basis points from last quarter but down 14 basis points from one year ago.

The Collapse of Manufacturing and the Spread of the Blight

In 2008, while the Recession was still a-brewing some of us tried in vanity and naivete to link the collapse of Manufacturing with the increase in unemployment and the Housing Crisis and then the Financial Crisis. Happily, we can move beyond the anecdotal to the empirical now for data on unemployment over the last decade. Many of us just sort of knew that when you put folks out of good jobs, they lose their houses, then they lose their Banksters.

Blog claiming BoA to increase foreclosures 600% in 2010

The blog Irvine Housing is reporting BoA plans to increase foreclosures 600% in 2010.

Bank of America is projecting a 600% increase in its already large number of monthly foreclosures.

This isn't unsubstantiated rumor; this comes straight from one of the most powerful men in Bank of America's OREO department (yes, that really is what they call it). It appears they have too many properties already.

The blog seems to be all for it!, that aside, these statistics:

1.2 million Bank of America homeowners are in default. Even if they forclosed on 45,000 a month for a full year, that is only 540,000 foreclosures.

Mortgage Delinquencies - Lying in Wait

The headlines are all abuzz with the headline that mortgage foreclosures are down to 9.47%. This is from the MBA Q4 Delinquencies Conference Call.

The delinquency rate for mortgage loans on one-to-four unit residential properties fell to a seasonally adjusted rate of 9.47 percent of all loans outstanding as of the end of the fourth quarter of 2009, down 17 basis points from the third quarter, and up 159 basis points from one year ago.

Don't you believe it. Firstly, 14.05% of all mortgages are delinquent or in foreclosure, not seasonally adjusted, 15%. Then, this from Calculated Risk:

Studies say mortgage modifications ineffective, foreclosures will continue, prices will drop

The Wall Street Journal overviews a series of studies on foreclosures, mortgage modifications and home prices.

Of 7.7 million mortgages behind in payments, they are estimating 5 million will end up in foreclosure, in spite of home mortgage modifications.

most efforts to modify loans with easier terms will delay, not prevent, the loss of homes to foreclosure

It's also fairly pocketed in certain areas. The top cities are listed below, along with their months of shadow inventory. Shadow inventory, because it's not on the actual market, can temporarily raise home prices due to less supply available. Yet that unsold inventory is waiting in the wings. It is actually being kept off the market through other means.

  • Stockton CA - 27
  • Orlando, FL - 27
  • Miami, FL - 24
  • Las Vegas, NV - 18

25% of 2007, 2008 FHA Loans in Default

If one looks over the recent SIGTARP report, the U.S. government is now propping up and owns the entire residential real estate market.

Today we have another damning statistic via this Washington Post article, Rising FHA default rate foreshadows a crush of foreclosures.

9.1% of FHA loans missed 3 mortgage payments by December 2009.

Seems the problem is loans made in 2007, 2008. But by this time, the U.S. was well into a housing collapse, so the subprime lending was curtailed...but guess what, we have another sucker, the FHA.