January 20, 2014

One Thing Has Not Changed From Last Year

The News Press reports from Florida. “Q: I own condominium units in both Florida and another state. I have seen in both states where banks seem to be sitting back and not pursuing foreclosures, leaving the properties and associations in limbo. Can you please advise me if there are any federal or state statutes that come into play? A: I am not aware of any federal statutes that would be relevant. As to state laws, I can only speak to Florida law. In Florida, the party that files the lawsuit (here, the bank), generally controls the timeline of the case. This has proven problematic for associations because many banks have been unwilling or unable to push foreclosure cases through the system with any degree of efficiency.”

“Associations are named as defendants in mortgage foreclosure cases because of their power to levy assessments on the titleholder. As defendants, associations have limited tools to move mortgage foreclosure cases towards a conclusion, the chief ones being the case management conference, the pretrial conference and the order to show case. The association attorney’s goal is to drag the bank’s attorney into court and get him or her, and the judge, to pay attention to this case as opposed to the thousands of others on the court’s docket.”

The Ledger. “A new report from RealtyTrac says Orlando and Tampa have some of the highest rates of ‘deeply underwater’ homes with mortgages among major U.S. metro areas. The Lakeland metro area (Polk County) isn’t faring any better, with the sixth-highest rate of deeply underwater homes among Florida metros. In the Lakeland area, a total 57,712, or 38 percent of homes with mortgages, were seriously underwater as of December. Fifty percent of area homes were deeply underwater in September, up from 46 percent of homes in May.”

“‘There’s still a lot of negative equity (in Polk) and we anticipate it will be like that for quite a while. That’s going to be a long-term issue that will have to be worked through,’ said Tyler Case, an economist with Moody’s Analytics who follows the Lakeland area. ‘(Polk) has actually made some good strides when it comes to its foreclosure rate and foreclosure inventory backlog.’”

The Herald Tribune. “Seven years into the foreclosure crisis, the court system designed to resolve these cases remains jammed. There were 11,880 active foreclosure cases in the 12th Circuit, comprising Sarasota, Manatee and DeSoto counties, as of Oct. 31, the latest data available. The region’s estimated foreclosure backlog stands at 40 months, according to the Florida State Courts Administrator. Since July 1, just 1,039 new foreclosure filings have entered the 12th Circuit. But problems persist with some older filings.”

“Of the 3,268 home defaults that were settled during that time, nearly 44 percent were dismissed without a final judgment — meaning those foreclosures will most likely cycle back into the system at some point, and further add to the backlog. The trend has played out across Florida, where 272,470 foreclosures remain pending, and 42 percent of the cases adjudicated since the start of the fiscal year in July were dismissed without a final disposition, records show.”

“In some cases, lenders voluntarily dismiss their foreclosures because they lack the proper evidence to proceed. Those cases will likely circle back to the docket later, as a new filing. Others ask for extensions. ‘An extension? This case is five years old,’ says retired Judge Robert Bennett, hired temporarily to carve away at the backlog. ‘Dismissed!’”

The Sun Sentinel. “South Florida and the state led the nation in foreclosure activity last year, topping the rankings as lenders and judges moved aggressively to reduce the backlog of cases from the housing crash. In Broward County, properties scheduled for auctions jumped by 72 percent (15,384 from 8,953) compared with 2012. In Palm Beach County, properties scheduled for auctions jumped by 55 percent (9,716 from 6,262) compared with 2012. In the county, 21,469 were in some phase of foreclosure in 2013.”

“South Florida foreclosure defense lawyer Tom Ice argues there are more foreclosures still to be filed. He said the new state law requires banks to have all their paperwork in order, which serves as a deterrent to filing cases. He added that banks also are reluctant to start the process because they no longer have control over how quickly the cases will be resolved. Ice and other lawyers said Florida courts are insisting on fast resolutions — sometimes catching homeowners and even banks flat-footed. ‘It’s trial or bust,’ Ice said.’

My Suncoast. “People who do a short sale on their home might face a much bigger tax bill. And the law that expired at the end of last year could have a huge impact on the Suncoast real estate market. Short sales, where banks allow homeowners to sell their property for less than they owe on their mortgage, have played a key role in the housing recovery we’ve had so far. ‘Oh, it’s been tremendously helpful,’ says Sarasota Realtor Lynn Robbins. ‘It’s saved some people hundreds of thousands of dollars.’”

“Last year, Congress finally acted in january, and made the law retroactive to cover anyone who had done a short sale. If lawmakers do nothing this year, the market will see effects. But it will still see at least some short sales, because one thing has not changed from last year, Robbins says. Most people who do them, don’t have a choice. ‘What is one to do? They don’t have the money,’ she says.”

The Guardian. “The Treasury Department launched Hardest-Hit in 2010 by allocating $7.6bn from Tarp to 18 states where the foreclosure crisis had done the most damage. The states were granted a share of the total funds and designed their own foreclosure relief programs. In Florida the idea behind the two core Hardest-Hit programs was to keep homeowners in their homes by intervening with their banks. For homeowners, the process of navigating the network of banks and advisers – and getting mixed signals from each – has been a trying one.”

“Deborah Stockhammer, an unemployed homeowner in Jupiter, Florida, is another who struggled with Hardest-Hit. She went through two rounds of the Hardest Hit Program in 2011 and 2013. Stockhammer says she initially entered the program with $3,000 due in back payments, and came out owing $7,600, still on the path to foreclosure. Stockhammer was served with foreclosure papers on New Year’s Eve.”

“Stockhammer resented that funds went to pay for Ocwen’s lawyers and other costs. (Other Hardest-Hit programs ban banks from using funds for fees, but Florida’s does not). ‘When [Hardest-Hit] gave the money to the mortgage company, they should have stated it solely went to back payments,’ she said. Her main complaint: ‘When I stop and think about the money President Obama gave to these companies, if he gave it to us homeowners we would have paid off our homes by now.’”




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55 Comments »

Comment by taxpayers
2014-01-20 04:49:50

Stockbroker. Is that you Mr banker?

Comment by taxpayers
2014-01-20 09:13:47

stockhammer =cool banker

 
 
Comment by Housing Analyst
2014-01-20 04:57:59

“I have seen in both states where banks seem to be sitting back and not pursuing foreclosures,

This is called a foreclosure moratorium; and it’s occurring in all 50 states. And worse yet, moratorium-like efforts like this exist in multiple forms in each state. And it’s been going on since 2008.

How else can 25 MILLION excess empty and defaulted houses possibly be hidden without efforts like these?

Comment by Janet Felon
2014-01-20 15:00:10

Unfortunately, they’re not exactly hidden. They’re in plain sight on seemingly every street in this country. Empty houses neither for sale nor rent, rotting away.

Comment by Housing Analyst
2014-01-20 15:49:36

All the excess inventory in the mid atlantic and new england is being maintained by service companies.

Comment by Whac-A-Bubble™
2014-01-20 17:26:53

I assume the banks who own those and keep them empty and off the market pay for upkeep, right?

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Comment by rms
2014-01-20 17:41:43

“…pay for upkeep, right?”

And the local property taxes?

 
Comment by Muggy
2014-01-20 17:57:54

Sideways bailout…

 
 
 
 
 
Comment by NH Hick
2014-01-20 06:05:41

“When I stop and think about the money President Obama gave to these companies, if he gave it to us homeowners we would have paid off our homes by now”

Yet another statement of entitlement by the “free shit society”. Also your not a “homeowner” because you haven’t paid off jack $hit.

Comment by Carl Morris
2014-01-20 22:50:01

Doesn’t mean he’s wrong, though. All the bailouts were for the banks, not the “homeowners”.

 
 
Comment by jose canusi
2014-01-20 06:45:44

“Stockhammer resented that funds went to pay for Ocwen’s lawyers and other costs. (Other Hardest-Hit programs ban banks from using funds for fees, but Florida’s does not). ‘When [Hardest-Hit] gave the money to the mortgage company, they should have stated it solely went to back payments,’ she said. Her main complaint: ‘When I stop and think about the money President Obama gave to these companies, if he gave it to us homeowners we would have paid off our homes by now.’”

That says it all.

Meanwhile, we’ve got two zombie homes right here in my nabe. Just sitting there. Every once in a while the banks’ contractors stop by to check on them. The fact that these houses haven’t been put up for sale enables the owners of two other houses in the nabe to list theirs for bubble style prices. What a joke.

Comment by Ben Jones
2014-01-20 08:50:36

Jeebus, it’s been laid out for anyone paying attention:

‘Barofsky shows how HAMP’s faulty design led to all sorts of problems like this, with trapped borrowers, extended trial payments, no-doc modifications, and eventually unnecessary foreclosures. Barofsky mused that Treasury didn’t care about the suffering of borrowers under HAMP, and the issue came up in a meeting with the Treasury Secretary, which was also attended by Elizabeth Warren, then the head of the Congressional Oversight Panel, another TARP watchdog.’

‘Warren asked Geithner repeatedly about HAMP. After several evasions, Geithner said about the banks, “We estimate that they can handle ten million foreclosures, over time… this program will help foam the runway for them.”

‘This is a revelatory moment for Barofsky in the book, and should be for everyone reading. Geithner’s concern, first of all, was with how the banks would respond to the program, not how homeowners would respond to it. In fact, homeowners are quite besides the point. Regardless of their situation, they will be one of the 10 million foreclosures, in Geithner’s construction. His goal was merely to space out the foreclosures and give the banks time to earn their way back to health, mostly through the other parts of the bailout, that enabled them to earn profits.’

Comment by Blue Skye
2014-01-20 12:03:04

That 10 million foreclosures probably assumes the housing market will not also tank. The plane might overshoot the foamed part of the runway.

 
Comment by Janet Felon
2014-01-20 15:04:06

Everything was ALWAYS for the banks or, more specifically, the wealthy elites. These foreclosure moratoriums, etc. were never designed to help ordinary people. Sure, they threw a few crumbs here and there, but it’s all about the wealthy elite, and don’t you ever forget it.

 
 
 
Comment by Whac-A-Bubble™
2014-01-20 07:42:46

“This has proven problematic for associations because many banks have been unwilling or unable to push foreclosure cases through the system with any degree of efficiency.”

Would changing the accounting treatment so that banks have to recognize the losses on limbo houses and the laws so that banks couldn’t drag their feet indefinitely to push foreclosure cases through the system change the picture?

I’m thinking eminent domain; i.e. if a bank doesn’t take responsibility for a foreclosure after some period of time, the local municipal government can take possession of the home.

Comment by Whac-A-Bubble™
2014-01-20 07:46:50

Business Day
Eminent Domain: A Long Shot Against Blight

By SHAILA DEWAN
JAN. 11, 2014
The mayor’s plan would buy and refinance underwater mortgages in an attempt to save the city from more boarded-up houses. Jim Wilson/The New York Times

You can’t fight city hall, the saying goes. But Gayle McLaughlin, the mayor of Richmond, Calif., a city of 100,000 souls, would tell you that fighting Wall Street is harder. Even for city hall.

Ms. McLaughlin has a plan to help the many Richmond residents who owe more money on their houses than their houses are worth, but it’s one that banks like Wells Fargo, large asset managers like Pimco and BlackRock, real estate interests and even Fannie Mae and Freddie Mac, the mortgage finance giants, have tried to quash. Her idea involves a novel use of the power of eminent domain to bail out homeowners by buying up and then forgiving mortgage debt.

But the financial institutions have warned that mortgage lending would halt in any city that tried eminent domain — and they have lobbied Congress to ensure that the threat is not an empty one. Opponents have filed federal lawsuits, while real estate interests have made robocalls to residents and sent mass mailers warning that the plan would allow “slick, politically connected” investors to “take houses on the cheap.” (The idea is actually to buy mortgages, not houses.)

Comment by Whac-A-Bubble™
2014-01-20 09:48:16

You certainly have to admire Richmond, CA mayor Gayle McLaughlin for having the moxie to challenge the likes of Wells Fargo, Pimco, BlackRock, Fannie Mae and Freddie Mac. I wish her all success, if for no other reason than I rather enjoy witnessing David slay Goliath every so often. Long live the Lilliputians!

Comment by "Uncle Fed, why won't you love ME?"
2014-01-20 10:48:11

I think this would be hard for Gayle to defend.

From Wikipedia:

“Just compensation”[edit]The last two words of the amendment promise “just compensation” for takings by the government. In United States v. 50 Acres of Land (1984), the Supreme Court wrote that “The Court has repeatedly held that just compensation normally is to be measured by “the market value of the property at the time of the taking contemporaneously paid in money.” Olson v. United States, 292 U.S. 246 (1934) … Deviation from this measure of just compensation has been required only “when market value has been too difficult to find, or when its application would result in manifest injustice to owner or public.” United States v. Commodities Trading Corp., 339 U.S. 121, 123 (1950).

The banks will use statements and actions from the Federal Reserve and many high-profile politicians and “economists” to argue that market value has been difficult to find. They will also use the disparity between the owed amount and the eminent amount to demonstrate manifest injustice to themselves and their investors.

Given that the Supreme Court has showed an appalling deference to corporations ever since I’ve been alive, I doubt they will suddenly do a turn-about and decide against Megabank this time.

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Comment by Neuromance
2014-01-20 12:27:32

market value has been difficult to find

Market value is trivial to find, it seems to me. Most of the economy does it continuously and efficiently, every day. They just don’t like the number.

It would be like a grocery store trying to sell a loaf of bread for fifty dollars. And upon finding no buyers, claiming an illiquid and non-functioning market.

 
Comment by Whac-A-Bubble™
2014-01-20 17:29:46

It’s more like market value is difficult to hide, especially when you can quickly go online and look up the last sale price of almost any U.S. home with an address.

Eddie Murphy’s former home is a great example: Everyone and his dog knows that it last sold for $6 million or so, Zillow now sez it is worth $4.2 million, and some flipper is trying to find a sucker who is willing to pay $12 million. It took me five minutes to figure that out!

 
 
 
 
Comment by "Uncle Fed, why won't you love ME?"
2014-01-20 10:34:15

But if the bank doesn’t foreclose, then the borrower still owns it.

 
 
Comment by Ben Jones
2014-01-20 08:13:40

‘As the housing market continues to evolve in post-recession Palm Beach, some properties that entered the market a while ago are finally making their exit. That’s especially true when buyers view an asking price as a true reflection of what today’s market will bear.’

‘The price has to be right — or at least in the ballpark. That seems to have been the case in the recent sale of 240 Bahama Lane, a four-bedroom Bermuda-style house with 4,350 square feet of living space, inside and out. With direct views of the Palm Beach Country Club’s golf course, it was built in 1996 but updated a decade later. Among its amenities are a full-house generator, a glass elevator and a lap pool.’

‘The property has been on the market since October 2010, and in 2011 carried a price tag of $4.495 million, later reduced by $1 million, according to records’. Broker John O. Pickett III of Barrett Wells Property Group acquired the listing last June and asked an even lower price — $3.249 million.’

‘The house sold last month for close to that amount — $2.91 million. The seller — Palm Beach Pooh LLC of New York City — had paid $3.35 million for the house in June 2005.’

Comment by Housing Analyst
2014-01-20 08:16:53

So let me guess…. this re-minted default in the making will hit the market again in 18-24 months as a default at $500k…… and still overpriced at that level.

 
Comment by Whac-A-Bubble™
2014-01-20 09:54:44

“The property has been on the market since October 2010, and in 2011 carried a price tag of $4.495 million, later reduced by $1 million, according to records’. Broker John O. Pickett III of Barrett Wells Property Group acquired the listing last June and asked an even lower price — $3.249 million. The house sold last month for close to that amount — $2.91 million.”

Going, going, gone!

We had a rather heated discussion recently about the usefulness of list price as an indicator of market value. The above example vividly demonstrates the relevance. Unless prices are going bubbly due to a massive infusion of housing market stimulus, the list price can be interpreted as an upper bound on market value, as sellers don’t want to just give away their properties. Once a bubble runup in prices runs out of steam, many sellers will be seen to start off with a list price greatly in excess of market value, and end up settling on a sale process that looks like a Dutch auction when viewed through the lens of the rear-view mirror. (Watch what happens to Eddie Murphy’s home in Sacramento from here on out if you want another example.)

 
 
Comment by Ben Jones
2014-01-20 08:16:38

‘David Cassidy’s struggles continue. The former “Partridge Family” star has reduced the price on his home in Fort Lauderdale, according to Zillow. He’s now asking $3.9 million after listing the 7,000-square-foot property last year for about $4.5 million.’

‘Zillow also pointed out, via the Gossipextra website, that Cassidy previously cut ties to a Fort Lauderdale condo rather than lose it in foreclosure.’

Comment by taxpayers
2014-01-20 09:17:05

and his dad was a architect

 
Comment by oxide
2014-01-20 10:22:00

“Cut ties” to a condo? How? Oh:

“Cassidy, who starred in the 1970s musical sitcom The Partridge Family, agreed to surrender his $1.35 million Las Olas condo to the bank within three months. In exchange, the Miami Lakes bank agreed to forget about the $920,000 or so that Cassidy owes.” — gossipextra

Comment by oxide
2014-01-20 10:24:42

I guess I should expand. Looks like Cassidy walked. But isn’t that the same as losing it in foreclosure?

 
Comment by "Uncle Fed, why won't you love ME?"
2014-01-20 10:25:39

I think that’s a deed in lieu of foreclosure. Why would anyone pay $1.35MM for a glorified apartment?

Comment by Housing Analyst
2014-01-20 10:28:43

Or for any shelter…..

There isn’t a house on the planet worth half that amount.

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Comment by Ben Jones
2014-01-20 08:21:53

‘Tampa Bay, which had more than 43,000 pending foreclosures, posted the sixth-highest foreclosure rate in the country, alongside many Sunshine State neighbors: Miami (No. 1), Jacksonville (No. 2), Orlando (No. 3), Palm Bay (No. 4), Port St. Lucie (No. 5), Ocala (No. 7) and Sarasota (No. 10).’

‘Those cases have created a long-term clog in the courts. Foreclosures in Florida, RealtyTrac data shows, took a staggering 944 days to complete, longer than every state but New York and New Jersey.’

Comment by Rental Watch
2014-01-20 12:05:41

A major re-bubble risk is the Fed setting policy with judicial states providing a distorted view of the overall foreclosure pipeline in the country.

If there was a “Central Bank of California” or “Central Bank of Arizona”, they would already be increasing interest rates citing bubble risks….at least in my dreams they would.

I guess more likely if there were such Central Banks, they would just claim there is no evidence of a recurring bubble…sigh.

 
 
Comment by Housing Analyst
 
Comment by Ben Jones
2014-01-20 08:26:20

‘It’s deja vu all over again for struggling Florida homeowners: The massive tax break that saved them tens of thousands of dollars has once again expired. Realtors short-sold 6,700 Tampa Bay homes, townhomes and condos last year, listing data show, and more than 1,500 are now listed for short sale.’

‘Up to $2 million of a homeowner’s forgiven debt qualifies for the tax break. The extension last year saved taxpayers across the country $1.3 billion, federal data show.’

‘Housing advocates said the expired tax break will hurt those least able to afford more in taxes. Agents for some distressed homeowners attempted to rush through short sales last year to dodge the “phantom income” tax bill.’

‘Many distressed homeowners can dodge the mortgage debt taxes if they prove to the IRS they are insolvent, owing more in debts than what they own in assets. That can be a saving grace for short sellers today who are in deep financial trouble.’

“Most people who are doing (short sales) now aren’t the strategic defaulters,” said Keller Williams agent Steve Capen. “They have true hardships, and they usually will be insolvent at the time of closing.”

What the heck is a “housing advocate”?

Comment by taxpayers
2014-01-20 09:19:11

“strategic defaulter”

 
Comment by rms
2014-01-20 09:36:50

“It’s deja vu all over again for struggling Florida homeowners: The massive tax break that saved them tens of thousands of dollars has once again expired. Realtors short-sold 6,700 Tampa Bay homes, townhomes and condos last year, listing data show, and more than 1,500 are now listed for short sale.”

Certainly the higher flood insurance premiums play a role in the “deja vu” defaults too. Bottom line, home prices have to drop before the rest of the added costs become sustainable.

 
Comment by "Uncle Fed, why won't you love ME?"
2014-01-20 10:22:11

Of course they will be insolvent at the time of closing. They merely need to hide all their cash in a safe under the bed, and make sure it’s all hidden before the time of closing. After living rent-free for over five years, no one is insolvent.

 
Comment by Puggs
2014-01-20 16:55:36

I’m so glad we were able to prop up the strategic defaulters before closing the barn door.

 
 
Comment by Housing Analyst
 
Comment by Housing Analyst
2014-01-20 08:56:26

Tampa FL Housing Prices Slide 6% YoY; Price Reductions Skyrocket 331%

http://www.movoto.com/tampa-fl/market-trends/

 
Comment by "Uncle Fed, why won't you love ME?"
2014-01-20 09:39:08

The biggest mistake I ever made was not buying an overpriced house in Florida. How would you like to buy a house with no money down, receive cash back upon closing, not pay your mortgage for five years, and then watch the judge dismiss the foreclosure case? Can you imagine how much MONEY these “FBs” have accumulated by now? They have no house payment, and it will apparently be this way forever!

Comment by Lenderoflastresort
2014-01-20 19:28:08

My sentiments exactly.

 
 
Comment by Whac-A-Bubble™
2014-01-20 09:40:15

“Last year, Congress finally acted in january, and made the law retroactive to cover anyone who had done a short sale. If lawmakers do nothing this year, the market will see effects. But it will still see at least some short sales, because one thing has not changed from last year, Robbins says. Most people who do them, don’t have a choice. ‘What is one to do? They don’t have the money,’ she says.”

I saw my SIL’s ex-husband over the holidays. He shared how he was able to get out from under a short sale of their underwater home, whose mortgage went into default when he was unemployed, without any tax liability.

He further opined that it was a certainty that the law would be renewed into the indefinite future. Thoughts?

Comment by "Uncle Fed, why won't you love ME?"
2014-01-20 09:58:49

Of course it will be renewed! You don’t have to pay taxes on the imputed income from living in the nonforeclosed house for free for over five years. Why should you have to pay taxes on the imputed income from the short sale?

Comment by Whac-A-Bubble™
2014-01-20 10:10:34

True. That would hardly be fair to the hardest hit homeowners, would it?

 
Comment by oxide
2014-01-20 10:28:26

This is the stuff that rankles me. When I was unemployed I had to fly to a job interview. I didn’t get the job, but a year later the company 1099′ed me for the travel. Good thing I had found a different job by then.

Comment by Whac-A-Bubble™
2014-01-20 10:37:42

When I was unemployed back in the early 1990s, we were able to keep making the mortgage payments, as I had a cash cushion of savings plus some part-time income to supplement my wife’s, and (most importantly) the payments were not insanely high.

In the high housing price / high mortgage payment / low savings rate / dismal employment prospects era, continuing to make payments is not an option unless you are either sufficiently prudent or wealthy to have accumulated savings. I’m guessing the share of homeowners in this category is quite minuscule.

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Comment by In Colorado
2014-01-20 14:38:02

I had to fly to a job interview

I did that a couple of times in the 1980’s and 90’s on the interviewer’s dime. I don’t think anyone does that anymore, at least not for individual contributors in my industry.

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Comment by "Uncle Fed, why won't you love ME?"
2014-01-20 09:55:51

I’m mad because Barack Obama didn’t buy me a house.

Comment by taxpayers
2014-01-20 10:18:38

maybe hitlery will

 
Comment by AmazingRuss
2014-01-20 13:42:42

You missed the Bush ownership society?

Comment by taxpayers
2014-01-20 14:07:05

did quite well, tx

 
 
 
Comment by AmazingRuss
2014-01-20 11:29:57

‘When I stop and think about the money President Obama gave to these companies, if he gave it to us homeowners we would have paid off our homes by now.’

Silly woman! Did she pay to retain lobbyists? Did she grease congressmen with massive campaign donations? Why should she reap the benefits of the banks’ shrewd investments?

 
Comment by Housing Analyst
2014-01-20 17:12:50

Springfield, VA Housing Inventory Up 74% On Falling Prices

http://www.movoto.com/springfield-va/market-trends/

Comment by Muggy
2014-01-20 17:59:11

You know it.

Crater.All.Day.Long.

 
 
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