October 7, 2012

One Of The Elephants In The Room

Readers suggested a topic on foreclosures. “Is the Financial Accounting Standards Board responsible for the shadow inventory? If it wasn’t for them reclassifying mark-to-market rules would it mater what the Fed or the Government does to fix the housing market. I say these guys are at the heart of the problem.”

A reply, “I’ve been watching the markets here in Tampa for years now. I would like to find a nicer house while prices are much lower than 2007, but it seems they get bought up very quickly if they are what I consider a ‘good deal.’ They barely make a listing before they are sold. But, there are many overgrown, abandoned and houses in disrepair. I have noticed a trend. The houses are left to sit until the other houses in the neighborhood, that were previously abandoned and in need of repair are marketed and sold.”

“Once they have new occupants, the latest of the abandoned properties seem to go into foreclosure and get into the market over the next few months. In other words, there are lots of vacant houses, but only a limited number come up for sale at any given time. Once occupied, some of the other vacant houses get some attention and a for sale sign. I am seeing what I consider ‘controlled releases.’ So, in addition to gaming the interest rate and terms of buying, the next market manipulation is inventory control.”

Another said, “Either they are lying about the delinquency rate or the whole pipeline is clearing out. I kind of doubt they are lying but I wouldn’t put anything past these guys. If the trend holds the distressed market will slowly clear to a more normal 4 - 5 % rate. That seems to be the trend nationally. That could form a bottom in the market. These stats are starting to look more and more like the mid-1990’s when the last big housing bear market ended and began the climb up in California. Is it time to take off the bear-suit and buy?”

The Commercial Appeal. “City crews descended on 835 Stonewall Thursday following complaints from neighbors and found live and dead animals at the site. A peek inside the one-story home in this otherwise well-manicured neighborhood revealed trash, debris, rotting furniture and animal excrement lining the floors. But city officials could have a hard time figuring out where to send the bill for the clean-up job, or who could be responsible for any civil or criminal charges or fines levied against the property.”

“That’s because mortgage companies and banks often do not formally foreclose on, or take legal possession of, properties like the one at 835 Stonewall to avoid paying any taxes or other costs associated with the properties, city officials said. ‘The mortgage companies won’t take it on so they don’t have to care for the property and have it on their books,’ said Onzie Horne, deputy director of the Public Works Division. ‘They don’t want it and they don’t want the responsibility to maintain it.’”

“There are 24,982 vacant lots in Memphis and another 43,000 properties with a vacant or abandoned structure, according to a study released in 2010.”

The Kitsap Sun. “Kitsap County home prices in September were 4 percent higher than a year ago but still below what they were in 2006, before the housing market collapsed. Inventory, the number of homes available for sale, continued to decrease to 1,552 in September, a 13 percent fall from a year ago. The number, however, can be deceiving as it does not include the several hundred homes in Kitsap County that are in foreclosure or are being held off the market by the banks.”

“The banks have slowly been releasing a fraction of the distressed homes they took back to keep prices from falling too fast, explained Mike Eliason, association executive for the Kitsap County Association of Realtors. The concern among his members is that banks could flood the market, which would force prices quickly downward.”

“Besides that elephant in the room, NMLS representatives are characterizing the upticks in price as part of the beginning of a slow recovery. Shrinking inventory, combined with modest increases in price and sales pace, have caused buyers who come forth with too-low offers to go ‘back on the street looking at their second-choice home,’ according to Frank Wilson, a member of the NMLS board and broker at John L. Scott Real Estate in Poulsbo. ‘Today we’re saying buyers who are most realistic with their offers and preapproved with a lender, and who are the most aggressive, might get the house they want.’”

The Orange County Register. “Investors and homeowners needn’t fear homes in the ’shadows’ of the housing market, a panel of experts said as the California Association of Realtors wrapped up its annual conference in Anaheim this week. The housing market’s so-called ’shadow inventory’ has long been considered a threat by unleashing an avalanche of discounted foreclosures onto the housing market. But members of CAR’s economics panel said distressed homes will continue to trickle back onto the market bit by bit.”

“Joel Singer, association CEO and former chief economist, argued that California’s foreclosure process is ranked among the most efficient in the nation, meaning that if lenders wanted to foreclose more homes, they could do it reasonably quickly. ‘I do feel good that in the California marketplace is going to give us advance warning,’ Singer said. ‘From the standpoint of there being a huge inventory coming out at a particular point in time, when somebody tells you that, you probably ought to turn and walk away.’”

Enhanced Online News. “California’s housing market will continue to recover in 2013, as home sales are forecast to increase for the third consecutive year and the median price to rise for the second straight year, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) ‘2013 California Housing Market Forecast,’ released today.”

“‘Sales would be even higher if inventory were less constrained in REO-dominated markets, particularly in the Central Valley and Inland Empire, where there is an extreme shortage of available homes,’ said said C.A.R. President LeFrancis Arnold.”

“‘The housing market momentum which began earlier this year will continue into 2013,’ said C.A.R. Chief Economist Leslie Appleton-Young. ‘Pent-up demand from first-time buyers will compete with investors and all-cash offers on lower-priced properties, while multiple offers and aggressive bidding will continue to be the norm in mid- to upper-price range homes. The actions of underwater homeowners will play an important role in housing inventory next year, with rising home prices inducing some to stay put and others to list and move forward,’ she said.”

The Daily Bulletin. “Selling prices of existing homes in the two-county San Bernardino/Riverside region increased 11 percent in August over year ago levels, while the number of homes sold dropped 5.7 percent, the California Association of Realtors reported. A shortage of properties to sell accounted for much of the housing price boost as well as the drop in total sales, analysts and real estate professionals say.”

“Daren Blomquist, VP of Realty Trac said the Inland Empire’s inventory is small for two reasons: People who are underwater on their mortgages don’t want to sell their house, because that would mean they would have to pay off the loan balance when the house sells. And lenders are not quickly processing foreclosed houses that they pick up. John Husing, a Redlands-based economist who studies the Inland Empire, said that more than 50 percent of homeowners in both counties owe more on their homes than what they can sell them for. ‘This housing market won’t be where it was for a long, long, long time,’ he said.”

“For that reason, Husing said the proposal of Mortgage Resolution Partners to help this group (underwater mortgage holders) in a proposed Joint Powers Authority ‘makes sense.’ ‘The government has been unable to bring them any sort of relief,’ he said.”

The New Zealand Herald. “The number of mortgagee sales in the first half of this year is close to figures last seen in the recession in 2009. But a property expert says the surge in forced sales is most likely banks selling off old stock and taking advantage of a lucrative seller’s market. Helen O’Sullivan, the chief executive of the Real Estate Institute, said she believed that banks were taking advantage of market conditions and selling properties they had on their books for some time.”

“‘Banks aren’t in any hurry to take a loss and it’s not in their interest to push consumers into painful forced sales,’ she said.”

“Ms O’Sullivan said there were no other factors which would suggest New Zealand was heading towards a recession similar to 2009. ‘It’s possible some of this overhang dates back to then because banks learned a lot from the late 1980s in terms of how much it hurts when you exit a lot of the stressed loans in a hurry.’”




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46 Comments »

Comment by Arizona Slim
2012-10-06 08:22:51

“Once they have new occupants, the latest of the abandoned properties seem to go into foreclosure and get into the market over the next few months. In other words, there are lots of vacant houses, but only a limited number come up for sale at any given time. Once occupied, some of the other vacant houses get some attention and a for sale sign. I am seeing what I consider ‘controlled releases.’ So, in addition to gaming the interest rate and terms of buying, the next market manipulation is inventory control.”

I’m seeing the same thing here in Tucson.

Matter of fact, there’s an unoccupied house in the next block to the east of the Arizona Slim Ranch. Owners of this house moved out in August 2011.

And there the house sits, mouldering away. No sign of a NOTS on the front door. Or a “for sale” sign in the front yard.

I notice that the property just got cleaned up. Don’t know what brought that about.

Comment by Ben Jones
2012-10-06 08:58:14

‘Don’t know what brought that about.’

Probably fear of a code violation.

I got a call from a Tucson agent a couple of days ago. (The same guy who told me there wouldn’t be any houses in Tucson under $100k by this past summer). He tells me of this new trend there; hedge funds buying hundreds of houses at a time, all over the country, for ‘40 cents on the dollar.’ They then sell the houses in each state to a state based fund type company for 50 cents on the dollar, but somewhere in the mix a 5 year deed restriction is added so the property can only be rented. He says this is Wells Fargo and the like.

Then he tells me the MLS REO’s are selling in a day or two.

So I ask, ‘why would they sell in bulk when they could sell each one in a day or two for twice as much’? ‘I don’t know’ he replies.

It doesn’t add up. I’ll repeat this once more; you’ll know when the market has ‘hit bottom’ when the Fed isn’t having to buy MBS or force feed interest rates lower. When the private market is again making the majority of loans at rates and down payments the market sets. When lenders sell foreclosures as fast as they can, like they used to do.

And you’ll know the housing market is back to normal when the media isn’t screaming, every day, about housing markets. When there are no more house flipping reality shows. Because there was a time when housing was just housing, not a daily headline issue.

Comment by Cantankerous Intellectual Bomb Thrower™
2012-10-06 09:05:23

“I’ll repeat this once more; you’ll know when the market has ‘hit bottom’ when the Fed isn’t having to buy MBS or force feed interest rates lower. When the private market is again making the majority of loans at rates the market sets. When lenders sell foreclosures as fast as they can, like they used to do.

And you’ll know the housing market is back to normal when the media isn’t screaming, every day, about housing markets. When there are no more house flipping reality shows. Because there was a time when housing was just housing, not a daily headline issue.”

I agree with all of the above.

Sadly, I see little evidence any of the changes you mention are going to happen any time soon. Thanks to extend-and-pretend policy, the housing bubble has gone cryonic.

Comment by In Colorado
2012-10-06 13:04:59

Sadly, I see little evidence any of the changes you mention are going to happen any time soon.

At least not until inflation really gets out of control. Of course its possible that they will continue to claim that there’s no inflation and just keep on printing money.

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Comment by Pimp Watch
2012-10-07 06:02:16

“At least not until inflation really gets out of control.”

And how does that work considering wages are falling globally?

 
Comment by BetterRenter
2012-10-07 11:02:31

“And how does that work considering wages are falling globally?”

It doesn’t. Although people continue to fear it, actual hyperinflation in the United States is literally impossible to achieve. In order to bring a wheelbarrow of currency to conduct a routine shopping trip in the grocery store, you must first HAVE a wheelbarrow of currency, or at least a piece of plastic that conveys the same amount (i.e. credit). American consumers have neither, and will never have either. Americans are “wage dead”, and the means of returning to wage life are stopping permanently. After all, it all depended on cheap petroleum, which is over, FOREVER.

People remain scared of the hyperinflation boogeyman since it’s what the Inflationistas have to keep promoting to continue their debt- and petroleum-based consumer economy going. But debt and petroleum are ending as viable economic tools. So it’s all a propaganda exercise. It’s a disease, and stuff like the Housing Bubble Blog are the cure.

 
 
 
Comment by Overtaxed
2012-10-06 09:59:38

But then what will they put on HGTV? :)

Comment by Montana
2012-10-06 13:13:47

They used to have a lot of gardening shows and stuff.

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Comment by B. Durbin
2012-10-07 07:40:27

I actually work with someone who used to have a gardening show on HGTV before they started skewing towards a younger demographic. And houses without gardens, only “landscaping.”

 
Comment by Lemming with an innertube
2012-10-07 20:36:34

Was it Paul James of “The Gardener Guy”? Oh, I loved that show and miss it.

 
Comment by B. Durbin
2012-10-14 06:12:38

No, it was Fred Hoffman (and only part time, as a regular guest on somebody else’s show.)

 
 
 
 
 
Comment by Ben Jones
2012-10-06 08:32:03

‘when somebody tells you that, you probably ought to turn and walk away’

Or better yet, put your fingers in your ears, turn, run like hell and scream ‘la-la-la’ really loud.

I talk a lot with brokers. They all know what’s going on. Of course, some will find a way to turn this into some positive spin on what’s ‘good’ for the market. Others say we’ve got ten years of foreclosures ahead of us.

To me what matters is that it’s being manipulated at all! Shortages? How do these UHS get away with that? Then there’s this:

‘a panel of experts said as the California Association of Realtors wrapped up its annual conference in Anaheim…’We know that the shadow inventory exists. Will it translate into a volume of properties that will dump on the market at one time? We just don’t think so,” said Michelle Lenahan of ForeclosureRadar’

‘The number of bank-owned homes coming onto the market is trending down, she said. Seventy-five to 80 percent of foreclosure sales are being postponed. “If you’re waiting for that foreclosure wave to hit after the first of the year, I’ve been hearing that for the last four years,” she said. “I just don’t see it happening.”

Well of course you don’t Michelle, and that’s why you are one of the invited ‘experts’ at this little shindig. Isn’t it interesting they never have someone like me at this ‘panel of experts.’ What exactly do you expect to hear at this thing Orange County Register?

One more thing Michelle; what if you’re wrong? Will you take in these FB’s? Let them sleep in your garage? Pony up to help with the mortgage? Or will you be like the other special interests on the panel, and start telling everyone ‘we knew it couldn’t last’ kinda like Appleton-young?

Comment by RioAmericanInBrasil
2012-10-06 11:04:23

put your fingers in your ears,

Just don’t stick them in too far! :)

Comment by Ben Jones
2012-10-06 11:36:01

I don’t know how you get toilet paper stuck in your ear.

I read once about areas that have a lot of cockroaches; apparently the little ones crawl into peoples ear canal while they are asleep. Sometimes these unfortunate people end up at the emergency room.

Comment by bink
2012-10-06 12:22:57

I have heard only second hand stories of people getting a roach in their ear. Earlier this year I did have a good friend get a spider stuck in his ear, though. He’s not the cleanest of fellows.

Lucky for him there were no eggs… or at least none that have hatched yet.

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Comment by ahansen
2012-10-06 22:57:06

My little brother was 7 years old when an earwhig crawled into his ear while he was asleep one night. Dreadful creatures bite and pinch. Terrifying. Fortunately my father was an MD and was able to extract it with the help of an otoscope and forceps. Afterwards he told us about one patient, another young boy, who came to him with a pea growing out of his ear. He’d pushed it in (as children as wont to do) and it had sprouted before anyone noticed. Noses often suffer a similar fate.

BTW: Folk wisdom tells us that if a bug/fly does get caught in your ear, turn that ear to the light. The insect will either fly or crawl out to escape. If that doesn’t work, a couple of drops of olive oil will smother it and it will float out.

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Comment by Cantankerous Intellectual Bomb Thrower™
2012-10-06 08:53:04

“The banks have slowly been releasing a fraction of the distressed homes they took back to keep prices from falling too fast, explained Mike Eliason, association executive for the Kitsap County Association of Realtors. The concern among his members is that banks could flood the market, which would force prices quickly downward.”

The MSM seems to always report the banks’ slow release of inventory as though it is standard operating procedure and perfectly legal.

How does this practice differ from price fixing, which is illegal under the Sherman Antitrust Act?

Comment by Ben Jones
2012-10-06 09:21:36

‘The concern among his members is that banks could flood the market’

Notice these people are never concerned that buyers may pay too much and end up in foreclosure. No concern that the economy takes even more hits from the resulting fallout. But they’ll be the first to wipe shed crocodile tears for the ‘poor homeowners’.

Could they be any more blatant in this shameless booster-ism?

‘Today we’re saying buyers who are most realistic with their offers and preapproved with a lender, and who are the most aggressive, might get the house they want’

Comment by Diogenes (Tampa, Fl)
2012-10-06 10:35:52

‘Today we’re saying buyers who are most realistic with their offers and preapproved with a lender, and who are the most aggressive, might get the house they want’

Translation: Bid above the asking price so we can get our money out of this property and you might beat out the other guy.
We will keep the inventory off the market if we can’t recover our losses.

It’s a bad plan in the long run because nature has a way of making deterioration a costly affair, but, many houses can sit for a year or 2 without much damage provided they aren’t vandalized.

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-10-06 11:56:38

“But they’ll be the first to wipe shed crocodile tears for the ‘poor homeowners’.”

They will also be the staunchest of advocates for ‘Save Our Homes’ bailout programs and infinite-lived forbearance (aka Screw the Lender rent-free living forever)…

 
Comment by Neuromance
2012-10-06 18:05:53

Could they be any more blatant in this shameless booster-ism?

They know who pays them and why.

 
 
Comment by Diogenes (Tampa, Fl)
2012-10-06 10:31:29

“The banks have slowly been releasing a fraction of the distressed homes they took back to keep prices from falling too fast, explained Mike Eliason, association executive for the Kitsap County Association of Realtors. The concern among his members is that banks could flood the market, which would force prices quickly downward.”

This is exactly what I had suspected from my observations of the Tampa area market. I see lots of overgrown yards, a few tarped roofs, signs of vacant properties everywhere. Over time, without any indication that the house my be “on the market”, someone has moved in, the grass gets cut, the repairs are done (not necessary in order), and then another “vacancy” shows up 2 or 3 houses down the street, with the first signs being an empty driveway, no lights on, and an overgrown yard.

That condition will persist for 6 months or more, and thinking it will be foreclosed and for sale, I often watch. If a sign goes up at all, there is usually a “sold” sign on it within days. You don’t even have time to inquire the asking price or do a viewing. This has been going on here for at least 2 years. There is definitely some collusion going on with the brokers who “sell” the foreclosures, the banks and the eventual owners. The only ones that stay on the market are properties that the Investor/Owners don’t want because they simply need too much work.
It was how I managed to buy my current fixer-upper. I was already outbid, and as I explained, the Investors will usually outbid you, but have the right to “withdraw” upon inspection. I got my bid accepted after an Infestor dropped out, realizing that this sucker needed lots of work.
I still shop for a better house, but as I have noted, they are difficult to find, and if the “buyer” is financing, they will run up the price just to be able to buy one in the area. This non-market economic collusion makes it easy to “overpay”, just like the mid 2000’s, because after so many lost opportunities it becomes easy to relent and say, “that’s it, I’ll pay the extra $30,000, I can’t take another beat out”.
Market economy my ass.

 
 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-10-06 08:54:39

“But members of CAR’s economics panel said distressed homes will continue to trickle back onto the market bit by bit.”

Who coordinates the trickle of inventory, and shouldn’t they go to prison for price fixing?

Comment by Rental Watch
2012-10-06 17:08:16

Doesn’t price fixing involve collusion between sellers?

I’ve had the following situation to occur to me: I held a lot of options in one company. They were in the money, and I was looking to sell them (as opposed to exercise them). The broker told me that if I put them all on the market at once, I would move the market, since the bid sizes were far smaller than my entire holding, and they really shouldn’t trade much below a “fair value”, as defined by the arbitrage a buyer would get by buying my options, exercising, and selling the stock. So they suggested I sell a portion of them at a time as to not blow through the bid sizes and get a fair price. If I put all on with a limit, I was at risk of missing a lot of $ if the stock price rose higher (someone might get too big an arbitrage by buying my options/exercising and reselling). So I sold them more slowly as to not affect the price I would get.

Was I price fixing? Or effectively managing the sales process of my assets?

Comment by Carl Morris
2012-10-06 21:03:58

You didn’t get FASB to change the accounting rules just for you.

Comment by Rental Watch
2012-10-07 03:43:17

And FASB’s change in accounting rules has allowed bank’s balance sheets to stay strong enough to eek out their sales as opposed to collapsing, and/or getting another government bailout (which would be costing taxpayers all a bunch of $ as well).

That’s still not price fixing by the lenders unless you can show they are all colluding, which in my opinion is a tough sale…since it’s pretty obvious that selling slowly will keep values higher…they don’t need to collude to know that.

What do you call the Fed changing their accounting rules in early 2011 to change losses from reduction in value of long-dated treasuries into liabilities from the US Treasury?

The Fed is monkeying with accounting rules to allow them to stay solvent after Operation Twist…this accounting BS goes right to the top.

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Comment by Pimp Watch
2012-10-07 06:13:13

Oh give it a break. The options were your damn assets not someone elses. Nor were you a clearinghouse and toll booth operator for an entire market like CAR.

Every single word of yours is suspect. Why is that?

 
Comment by BetterRenter
2012-10-07 11:37:47

Rental Watch disingenuously said: “Doesn’t price fixing involve collusion between sellers?”

Or between sellers and brokers and regulators (and other officials responsible for oversight). It’s funny how you seemed to miss that salient fact.

The rest of your example is totally inapplicable. Your asset is really only held and regulated by you. You can sell said asset however you wish. There are no other officials or signatories to the sale on the selling side. A house held by a bank from a foreclosure has many signatories. The bank itself isn’t even unary in this thing. The bank has workers, officers and board members, and stockholders. That’s THREE distinct collaborators in one organization. Then there may be investors attached to the mortgage; 4. And state and federal regulators; 6. And I’d argue that the media is also involved; 7. Then there’s the realtor; 8. I didn’t even have to try very hard to come up with 8 distinct types of collaborators. So why couldn’t you even name TWO?!?!

Comment by Pimp Watch
2012-10-07 13:14:18

So why couldn’t you even name TWO?!?!

Because “Rental Watch” is a goddamn liar and has been lying to everyone on this blog for years.

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Comment by alpha-sloth
2012-10-07 16:47:18

A house held by a bank from a foreclosure has many signatories. The bank itself isn’t even unary in this thing.

Doesn’t a bank have a fiduciary responsibility to get as much as reasonably possible for the property they foreclosed on? That would preclude them from dumping all the properties on the market at once, without necessarily proving any collusion between the banks.

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Comment by Pimp Watch
2012-10-07 17:32:49

We’re talking about NAR/CAR. Do keep up.

 
Comment by BetterRenter
2012-10-07 20:09:42

Alpha-sloth, a bank isn’t setup to be a property management company. That’s unlike the situation with paper assets, which just sit there and don’t invoke maintenance issues. And if a bank pays to get its properties managed, well, there go profits down the tubes.

A bank naturally has to dump real estate… unless the feds are propping them up with funny money.

 
Comment by Ben Jones
2012-10-07 20:20:56

‘unless the feds are propping them up’

And the regulations were ignored to allow this. Funny how those who go on about the need for regulation are the first to make apologies for its absence.

 
Comment by alpha-sloth
2012-10-08 05:16:57

Alpha-sloth, a bank isn’t setup to be a property management company.

Really? I rented an apartment for years from the trust dept of a bank. They were possibly the best landlord I’ve ever had- very courteous and problems were fixed quickly by professionals.

A bank naturally has to dump real estate… unless the feds are propping them up with funny money.

Or unless they’re just servicers for other owners, which is the usual situation.

 
 
 
 
 
Comment by Advisor
2012-10-06 10:14:49

“California’s housing market will continue to recover in 2013, as home sales are forecast to increase for the third consecutive year and the median price to rise for the second straight year, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) ‘2013 California Housing Market Forecast,’ released today.”

I believe it is fair to say, without exaggeration and in all seriousness, that CAR is the most corrupt organization in the country.

The public needs to know this.

 
Comment by In Colorado
2012-10-06 13:00:59

“‘Banks aren’t in any hurry to take a loss and it’s not in their interest to push consumers into painful forced sales,’ she said.”

Interesting to see that Banksters down under have the same game plan as ours. Of course, when you think about it, they are probably one and the same.

It will be trickier to pull of in Kiwiland. I took a quick looksie at interest rates there. 12 month CDs pay 4-5% interest. Perhaps a little ZIRP lies in their future as well?

 
Comment by Cantankerous Intellectual Bomb Thrower™
2012-10-06 16:11:40

Real Estate
Homeowners recover 13.5 Percent of lost equity through Q3
Published: Oct. 5, 2012 at 5:09 PM
By Real Estate Economy Watch
Advertisement

Homeowner equity jumped $406 billion, or 5.9 percent, to $7,275 billion in the second quarter of 2012, according to the Obama Administration’s September Housing Scorecard.

After a sharp first quarter rise, total equity has grown to $863 billion, or 13.5 percent, since the end of 2011. The number of underwater borrowers has declined by 11 percent since the end of last year, from 12.1 million in the 4th quarter of 2011 to 10.8 million in the second quarter of 2012.

Nearly 1.3 million homeowner assistance actions have taken place through the Making Home Affordable Program, while the Federal Housing Administration (FHA) has offered more than 1.4 million loss mitigation and early delinquency interventions. The Administration’s programs continue to encourage improved standards and processes in the industry, with HOPE Now lenders offering families and individuals more than three million proprietary mortgage modifications through July.

As of August, more than one million homeowners have received a permanent HAMP modification, saving approximately $539 apiece on their mortgage payments each month, and an estimated $15 billion to date. In August, 81 percent of homeowners with eligible non-GSE mortgages benefitted from principal reduction with their HAMP modification. Eighty-seven percent of homeowners entering the program in the last two years have received a permanent modification.

“As the September housing scorecard indicates, our housing market is showing important signs of recovery - with homeowner equity at a four-year high and summer sales of existing homes at the strongest pace in two years,” said HUD Acting Assistant Secretary Erika Poethig. “The Administration’s efforts to keep housing affordable and refinances strong are critical with so many households still struggling to make ends meet. That is why we continue to ask Congress to approve the President’s refinancing proposal so that more homeowners can secure the help they need.”

 
Comment by 2banana
2012-10-06 17:38:40

I do not understand this.

Around here - If the taxes are not paid for a certain period of time - the house will be taken by the city/locality and sold at auction for back taxes.

They even advertise these auction in the local paper. Usually the owner shows up and pays the taxes before the auction.

Some cities may wait until a house is sold and then force the buyer to pay the back taxes in order to take possession.

Have the cities start taking houses from the banks for back taxes. Maybe then we will see movement of the backlog of foreclosures…

Comment by 2banana
2012-10-06 18:55:15

Forgot the quote

“That’s because mortgage companies and banks often do not formally foreclose on, or take legal possession of, properties like the one at 835 Stonewall to avoid paying any taxes or other costs associated with the properties, city officials said. ‘The mortgage companies won’t take it on so they don’t have to care for the property and have it on their books,’ said Onzie Horne, deputy director of the Public Works Division. ‘They don’t want it and they don’t want the responsibility to maintain it.’”

Comment by Blue Skye
2012-10-07 14:42:17

The bank will pay the taxes for years without foreclosing in some cases. They can’t show themselves to be insolvent, all at once.

 
 
Comment by BetterRenter
2012-10-07 11:26:30

2banana, the good thing about this housing bubble is that it’s becoming more and more obvious that the rules don’t apply to the people and organizations with money and power. The bad thing that will probably follow, is that the common American will end up impoverished and demoralized, and then refuse to change the political process (so that rules would go back to being at least somewhat applicable to the rich and powerful again).

We’ve setup a society so that people stop being citizens. They are either consumers (meaning they are occupied with working and spending and managing their debts) or they are desperate or on welfare (meaning they are occupied with survival). Either way, the only people who have time to be real citizens tend to be those who prefer the corrupt status quo.

 
 
Comment by Mugsy
2012-10-07 04:13:46

“‘The housing market momentum which began earlier this year will continue into 2013,’ said C.A.R. Chief Economist Leslie Appleton-Young.

As a longtime reader of this site, I wouldn’t believe one iota of what this woman says. However she’s only #2 on the hit-list of housing liars because David Lereah will always be #1 in my book!

Comment by Cantankerous Intellectual Bomb Thrower™
2012-10-07 13:09:13

Gary “In the Bag” Watts remains high on my list, even though we never heard from him again once prices in The OC started to dive…

Comment by Cantankerous Intellectual Bomb Thrower™
2012-10-07 13:12:54

Orange County Real Estate update – Gary Watts speaks to YPN
Posted on January 23, 2012. Filed under: First Time Buyer help

Gary Watts is one of Orange County’s most well known real estate forecasters, and the Young Professionals Network was lucky enough to have him speak at our Lunch & Learn recently. Gary’s always full of stats – whether we like them or not! It’s no secret 2011 was another tough year in real estate – lots of foreclosures and unemployment loomed over Orange County. 29,451 homes sold in OC during 2011, while 2010 only had 30k homes sold. Long story short, 2011 was Orange County’s 3rd lowest year for volume behind ’92 and 93′.

Comment by Cantankerous Intellectual Bomb Thrower™
2012-10-07 15:47:20

And then in ‘94, The OC went bankrupt

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Comment by Cantankerous Intellectual Bomb Thrower™
2012-10-07 20:51:46

ASIA MARKETS
Updated October 7, 2012, 10:46 p.m. ET

Europe Woes Weigh Asian Stocks
By DANIEL INMAN

Asian markets were lower Monday, as continued concerns over Europe’s debt troubles offset strong U.S. jobs data, while markets in mainland China were in focus as they opened after a long holiday.

In China, the Shanghai Composite Index was 0.5% lower in choppy trade, after closing for a weeklong public holiday, giving investors on the mainland their first chance to react to last week’s manufacturing data, which remained weak.

The Shanghai Composite had hit a fresh multiyear low at the end of September, before bouncing back strongly in the last few days of September.

Hong Kong’s Hang Seng Index was 0.6% lower as retailers and telecoms companies led the declines. Esprit Holdings (0330.HK -0.93%) was down 0.8% and China Mobile (0941.HK -1.11%) dropped 1.0%.
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Any positive sentiment stemming from Friday’s U.S. jobs data was outweighed by continued uncertainty over Europe—especially in relation with whether Spain will seek a bailout.

 
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