Wednesday, July 27, 2011

Robert Shiller: Buy Houses If the US Defaults on Their Debt (NYSE:IYR, NYSE:XHB) | Wall St. Cheat Sheet

Robert Shiller: Buy Houses If the US Defaults on Their Debt (NYSE:IYR, NYSE:XHB) | Wall St. Cheat Sheet It would be easy to think Shiller was going to have confidence in house prices after this comment but the reality is that he thinks interest rates will jump much higher if the US defaults on its debt. With an interest rate rise, prices will drop significantly on houses and Shiller is saying that the prices may be in a range that is a great buying opportunity. However, the price decline might gain even more momentum as interest rates go up. Higher rates will mean less people qualify and less people will be part of the purchasing pool. Besides it really is jobs that is impacting the housing market now and even as it stands, the interest rates are artificially low due to the federal government and as soon as the economy would turn, rates will jump much higher and prices will stagnate or drop. The debt ceiling fiasco is just a distraction for how bad the economy really is even after several years of recession. There was a little bit of news yesterday about the treasury looking to start a program that would lead to principal reduction on housing but by the time they get around to it 75 % of the country might be underwater. They have had over 4 years to do what was right but they have catered to big money and the banks while screwing the home owners. Shiller is just looking for something different to say since the data still says clearly that the housing market sucks and it will for a long time.

{Case-Shiller Index co-author Robert Shiller spoke with FOX Business Network about the state of the housing market (NYSE:IYR) and the United States debt (NYSE:TLT) crisis. Shiller discussed the possibility of a U.S. default and therefore a sudden spike in interest rates and said it’s “absolutely a concern” but that “this might be a buying opportunity for houses.” He also said, “oddly though, we don’t see that many people thinking that because confidence is down.”

On if he worries about a sudden spike in interest rates if the United States defaults:

“That’s absolutely a concern, so this sounds funny coming from me, but this might be a buying opportunity for houses. If we’re gonna see a spike in interest rates, home prices are gonna come down a lot, it could be a good time to buy. Oddly though, we don’t see that many people thinking that because confidence is down.”}

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Massachusetts Attorney General Signals Likelihood of Nixing “50 State” Mortgage Settlement « naked capitalism

Massachusetts Attorney General Signals Likelihood of Nixing “50 State” Mortgage Settlement « naked capitalism Make big money in penny stocks today

Quelle Surprise! Banks Don’t Want to be in IRA Business if They Can’t Treat Customers as Stuffees « naked capitalism

Quelle Surprise! Banks Don’t Want to be in IRA Business if They Can’t Treat Customers as Stuffees « naked capitalism Make big money in penny stocks today

Tuesday, July 26, 2011

Treasury reviewing proposal to aid distressed homeowners

Treasury is currently reviewing a proposal to aid distressed homeowners by allowing a short sale of mortgage notes from mortgage-backed securities (MBS) trusts to new investors.

Read the Full Article here 

Lets just hope they do the right thing this time and stop driving the economy further into a black hole.  They need to work on principal forgiveness and to do so quickly or the downward spiral will last much longer.

The proposal was set forth by Jordan D. Dorchuck, Esq., CMB, EVP, chief legal officer, and secretary of American Home Mortgage Servicing, Inc., based in Coppell, Texas, and written in collaboration with executives from WL Ross & Co. and Mortgage Banking Initiatives Inc.
Dorchuck says this strategy could be key to unlocking principal reduction modifications for struggling homeowners.
An estimated 3 million loans have been foreclosed in the last three years, and some analysts predict another 5 million to 7 million more foreclosures by the end of 2012.
As of February 2011, about 634,000 loans had been modified through HAMP.

Here is  a very important section of the article that states that the only real solution to the housing crisis is loan modifications with principal reductions.   Something that we have been saying for years as has Yves Smith at Naked Capitalism

It is funny how they have tried everything else but do something like this that would actually get to the root of the problem and it would stop the massive increase in housing inventory.  They have done everything except help the home owner.  Maybe now they will get it right. 
“Without changes, the volume of foreclosures will continue to outpace the number of loan modifications,” Dorchuck said in his white paper.
Dorchuck believes principal reduction modifications have the potential to reduce losses for both MBS investors and underwater homeowners.
“We note, too, that banks holding mortgage loans in bank-owned portfolios have been actively achieving this result by principal forgiveness,” he states in the white paper.
Dorchuck does consider the risk of creating incentives for strategic default through principal reduction modifications. He believes these modifications should be designed with investor and servicer considerations in mind and not allow consumer-driven demand.
However, “[f]rom the MBS investor perspective, market prices of their securities already reflect large foreclosure losses,” the white paper notes.
“Short sales of mortgage loans should reduce those expected losses and achieve ‘finality,’ quickly,” it states. “Hundreds of thousands of homeowners could potentially be helped with affordable loan modifications if they included responsible principal reduction components.”
According to the white paper, the plan lowers the risk of re-default and reduces foreclosure losses for MBS investors, while also benefiting borrowers by offering them a sustainable solution and a chance to stay in their homes.
“The Plan would create a win-win scenario,” Dorchuck writes in the white paper.
Dorchuck’s proposal is not the only plan currently being considered as an option to improve the housing market.
The Wall Street Journal recently reported that the Obama administration is considering several housing policy changes, including requiring Fannie Mae and Freddie Mac to loosen their stringent requirements for investors.
The possibility of the GSEs renting some of their REOs was also mentioned as a way to help stabilize prices.
Ed Delgado, former Wells Fargo executive and current CEO of the Five Star Institute told The Wall Street Journal that renting is “riddled with risk.”
“Essentially you’re converting the [firms] from providing liquidity to a glorified national landlord for distressed assets,” he told the Journal.

 Try a New Portable Scanner and get organized today. 

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Friday, July 22, 2011

Matt Stoller: Dodd-Frank Made No Structural Changes to Banking System « naked capitalism

Matt Stoller: Dodd-Frank Made No Structural Changes to Banking System « naked capitalism

After the immediate crisis was contained, losses were socialized, and profits returned to financial executives, Congress had to put together a “solution”. It would have a giant bite at the apple in restructuring our regulatory apparatus. But in order to perpetrate the oligarchic banking structure, it would be important that no structural changes to the industry be implemented. Not one regulator was fired for his or her part in the crisis. The Justice Department adopted a posture of legalizing financial control fraud by refusing to prosecute anyone involved in the meltdown, and continues to allow millions of cases of foreclosure fraud to continue. Ben Bernanke was renominated, and the administration fought a bitter below-the-radar battle to secure his confirmation. With a few modest exceptions, the risk-taking and leverage in our financial markets continues apace, and the deregulatory neoliberal mindset is still dominant. The Federal Reserve has been audited, but the system is now accountability-free for high level operatives in finance and politics. And now that Elizabeth Warren has been thrown overboard by the administration, the lockdown of the financial system is nearly complete.


And mostly, that’s what Dodd-Frank accomplished. It rearranged regulatory offices and delivered a new set of mandates, but effected no structural changes to our banking system. Congress never asked what happened, or why, or even, what kind of banking system do we want? And that’s because Obama’s Treasury Secretary already had the answers to these questions.

The one dangling thread, and this is what worries the administration, is the housing market. But we’ll save that problem for another day
read the full article here












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Federal Home Loan Banks Challenge BofA Settlement, Say They May Be Owed a Lot More « naked capitalism

Federal Home Loan Banks Challenge BofA Settlement, Say They May Be Owed a Lot More « naked capitalism Make big money in penny stocks today

Supreme Court of Nevada opinions compel foreclosing parties in Nevada to produce material documentation as the chain of title to the note and the deed of trust

Original Article from Foreclosure Defense Nationwide
Supreme Court of Nevada issued two opinions on July 7 2011 which finally compel foreclosing parties in Nevada to produce material documentation as the chain of title to the note and the deed of trust in order to permit a foreclosure action when mediation is requested.


Just having possesion of the original title is not considered enough to claim a proper chain of title.   
This could be very significant to homeowners trying to negotiate with the banks. It will prevent the banks from claiming proper chain of title just because they claim they have ownership of the note and mortgage. NOW they will be required to show proof of chain of title with proper documentations and signatures. The banks must now provide endorsement and assignment




Separately, the Supreme Court of Nevada issued two opinions on July 7, 2011 which finally compel foreclosing parties in Nevada to produce material documentation as to chain of title to the Note and Deed of Trust in order to be permitted to continue with a foreclosure action when mediation is requested. in Leyva v. National Default Servicing et al., No. 55216, 127 Nev. Advance Opinion 40, the Supreme Court held that strict compliance is required with Nevada statutes governing the production of certain documents including any assignment of the Deed of Trust; that a foreclosing party’s failure to do so “is a sanctionable offense; and the district court is prohibited from allowing the foreclosure process to proceed”. Wells Fargo was also the culprit in this case.

Significantly, in discussing the transfer of the Note, the Supreme Court of Nevada cited to the recent In Re Veal decision from the 9th Circuit Bankruptcy Appeals Panel (which was previously discussed on this website), holding that the borrower “has the right to know the identity of the entity that is ‘entitled to enforce’ the mortgage note under Article 3 (of the Uniform Commercial Code).” The Court concluded that Article 3 “clearly requires Wells Fargo to demonstrate more than mere possession of the original note to be able to enforce a negotiable instrument”. The court found that there was no endorsement and no assignment, and reversed the District Court.

The opinion in Leyva cited to the Court’s opinion in Pasillas v. HSBC Bank as Trustee, No. 56393, 127 Nev. Advance Opinion 39 (also decided July 7, 2011), which also reversed the District Court and also cited to Veal , setting forth the requirements for production of evidence of chain of title to the note and Deed of Trust in a foreclosure.

The multiple citations to Veal, which is a Federal Bankruptcy appellate court opinion, by the state Supreme Court of Nevada, is more than important. It demonstrates that simply because a foreclosure issue is decided by a Bankruptcy court does not mean that it is not applicable to a non-Bankruptcy (or non-Federal) foreclosure case. Time and again, when we argue that an issue in a state foreclosure case has already been decided by a Bankruptcy court in the foreclosure context, attorneys representing foreclosing “lenders” and servicers argue “Well, Judge, that was a Bankruptcy case, and we are not in Bankruptcy Court”. Leyva and Pasillas have now put that argument to bed. If a Federal Bankruptcy decision is good enough for the Supreme Court of Nevada in two separate opinions, it should be good enough for any state court.

Is Bank of America At Risk of a Death Spiral? « naked capitalism

Bank of America is getting into a deeper hole by their recent activity. They reported massive losses not long after requesting to get approval for a dividend increase, refused to modify loans and misled the public over their situation, to just name of few of their transgressions. Here is an article that asked the question about the future of B of A and whether or not they may be soon be in a black hole with no way out. Is Bank of America At Risk of a Death Spiral? « naked capitalism

Tuesday, July 19, 2011

Basel Committee Says 28 Systemic Banks Would Qualify for Capital Surcharge - Bloomberg

Basel Committee Says 28 Systemic Banks Would Qualify for Capital Surcharge - Bloomberg Make big money in penny stocks today

Video - Protect Your Pooch From Overheating During the Dog Days of Summer - WSJ.com

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Life on MERS: Archive is at center of mortgage mess | Reuters

Life on MERS: Archive is at center of mortgage mess | Reuters
A little-known institution in Reston, Virginia, has done much to help loan servicers produce foreclosure documents of questionable legitimacy, according to multiple recent court rulings and deposition testimony.

Mortgage Electronic Registration Systems, or MERS, has only about 50 full time employees. Yet it claims to own about half of all mortgages in the United States, roughly 60 million loans, and is involved in about 60 percent of new mortgages issued.

Fannie Mae, Freddie Mac and several large banks established MERS in 1995, as a registry meant to speed up the recording and transfer of mortgages. Until then, this had to be done in individual county clerks offices and the process was glacial. The founders went ahead even though no state laws authorized them to bypass the required filing with clerks.
read the rest here



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David Dayen FDL | Miller, Franken Assail Banks for Continuing Robo-Signing | Foreclosure Fraud - Fighting Foreclosure Fraud by Sharing the Knowledge

David Dayen FDL | Miller, Franken Assail Banks for Continuing Robo-Signing | Foreclosure Fraud - Fighting Foreclosure Fraud by Sharing the Knowledge Make big money in penny stocks today

Analysis: Doubts raised on OCC foreclosure estimate | Reuters

Analysis: Doubts raised on OCC foreclosure estimate | Reuters

OCC spokesman Robert Garsson confirmed that the conclusion that there had been only a small number of wrongful foreclosures was based on a sample of only 2,800 foreclosure files. In 2010 there were just over one million foreclosures, according to real estate data firm RealtyTrac.

The OCC declined to disclose the criteria used to select the files. But a footnote in Walsh's prepared testimony for his February 17 appearance before the Senate Banking Committee states that the sample included "in-process" foreclosures as well as completed ones.

For "in-process" foreclosures -- ones still pending with no final action -- no foreclosure sale would have taken place. So including those in the sample would have skewed downward the proportion of wrongful sales.

Garsson declined requests to provide the criteria used to select the cases examined, the definition used to determine erroneous sales, and the number of "in-process" foreclosures included in the sample.

He said that the OCC is withholding the information because the "foreclosure review of the largest servicers is not yet complete."

Walsh's statement that only a small number of wrongful foreclosures had occurred has been quoted widely by opponents of harsh sanctions on the bank.

It was cited by The Securities Industry and Financial Markets Association (SIFMA), the leading securities industry trade organization; individual banks; and in a Washington Post editorial arguing against costly sanctions and stringent terms for loan modifications.

In a recent appearance at the Reuters Future Face of Finance Summit, Walsh said that while the sample showed only a very small proportion of erroneous foreclosures, the absolute numbers -- when the percentage is applied to the total number of foreclosure sales -- could turn out to be "in the tens of thousands."

O. Max Gardner III, a lawyer and expert on foreclosure cases handled in bankruptcy courts, said that the OCC must have used an unfairly narrow definition of a wrongful sale.

He said that in most of the hundreds of cases he has handled, banks misstated the amounts homeowners actually owed, failed to record or properly allocate mortgage payments, and tacked on thousands of dollars in unauthorized and excessive fees.

"We see a problem with the dollars and cents in almost every single bankruptcy case that I file," Gardner said.

The OCC's examinations took place from October 2010 through January, Garsson said.

They also included examiners from the Federal Reserve and the Office of Thrift Supervision. The banks examined were Bank of America (BAC.N), Citibank (C.N), GMAC/Ally Bank, JPMorgan Chase (JPM.N), Wells Fargo (WFC.N), HSBC (HSBA.L), MetLife (MET.N), Aurora Bank, EverBank, OneWest, PNC Financial Services (PNC.N), Sovereign Bank, SunTrust (STI.N) and US Bank (USB.N).

In his banking committee testimony, Walsh also said the examinations showed that the loan servicers had proper documentation to foreclose and that the investor trusts they represented had legitimate ownership of the mortgages.

The conclusion appears to conflict with a recent series of court decisions in which foreclosure cases were thrown out after rulings that the investor trusts that had filed for foreclosure did not own the mortgages and had no right to foreclose.

Records examined by Reuters and interviews with legal aid lawyers indicate that many thousands of fraudulent mortgage assignments were used as evidence to justify foreclosures.

These assignments, meant to prove transfer of ownership of a mortgage, were signed by individuals who had no relation to the banks that had issued the mortgages, and they were dated years after the legal deadlines for making such assignments.

Joe Klein, an attorney with Legal Aid of Collier County, Florida, who specializes in representing indigent homeowners in foreclosures, said that almost without exception the foreclosure cases filed against his clients contained false documents.

"They're always frauds and forgeries," he contends.

Gardner said that in all of the cases he has handled, "I've never seen a complete chain of transfers and of the (mortgage promissory) note" to the trusts that had filed to foreclose.

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bank fraud and abuses continues well beyond robo signing

 More from Reuters

By Scot J. Paltrow
(Reuters) - Why have sketchy mortgage procedures been so difficult to root out? Some lawyers blame misguided efforts to cut costs. Most foreclosures are uncontested, they note. And so servicers save money by avoiding costly searches for missing original documents or hiring additional staff to deal with the surge in foreclosures.
There are signs, however, that servicers resort to doubtful documents because they have no choice if they are determined to foreclose: To a great extent, originals simply don't exist.
It's one of the overlooked legacies of the housing boom.
In the rush to make new home loans and sell them off as fast as possible to investors on Wall Street, the original lenders --big banks as well as now defunct makers of subprime loans --destroyed original documents, or never turned them over as required to the ownership pools that scooped them up. From 2004 through the end of the housing boom in 2006, more than half of all new mortgages were securitized and sold to such pools, known as mortgage-securitization trusts, according to the Securities Industry and Financial Markets Association.
So, banks and intermediaries in many cases never turned over the two essential documents underpinning a home loan -- promissory notes and mortgages -- that would convey ownership to the investor trusts. That means many pension funds, insurance companies and hedge funds that invested in the trusts never got formal title to mortgages they had paid for.
Sheila Bair, who recently stepped down as Federal Deposit Insurance Corp. chairman, in Congressional testimony has called for a wide-ranging audit of the problem. But other regulators so far haven't backed the idea, possibly fearing that if the extent of the problem became known the housing market might worsen.
One example: Public records in foreclosure cases indicate that New Century Mortgage, the nation's second-largest subprime lender until it collapsed in 2007, almost never endorsed promissory notes or assigned mortgages to trusts that bought its mortgages.
A Reuters sampling of 50 foreclosure cases filed in Duval County, Florida, involving New Century mortgages found that none of the promissory notes filed in the cases had any endorsements at all on them. Records show that similar large-scale lapses occurred with other big lenders.
The result is that trusts may be out many billions of dollars, says Matthew Weidner, a lawyer who specializes in mortgage litigation. If proper procedures are followed now, foreclosures could slow to a trickle. And a cloud would hang over title to millions of homes, potentially further depressing the housing market.





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KABOOM | Reuters SPECIAL REPORT: Banks Still Robo-signing, Filing Doubtful Foreclosure Documents | Foreclosure Fraud - Fighting Foreclosure Fraud by Sharing the Knowledge

KABOOM | Reuters SPECIAL REPORT: Banks Still Robo-signing, Filing Doubtful Foreclosure Documents | Foreclosure Fraud - Fighting Foreclosure Fraud by Sharing the Knowledge Make big money in penny stocks today