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It might not make financial sense for institutional investors to keep buying if the payoff continues to soften, but it could be different for small investors.
The policy makers in this country have spoken: There will be no assistance to those in foreclosure. We will not help Americans avoid foreclosure. We will not help to delay or stop foreclosure. Instead, we will work with the banks to throw American families into the street so that we can sell their home for pennies on the dollar to investors.
Now for the first couple months, there has been a bit of an investor frenzy with prices being bid up. But the bloom has started to fall off that onion and investors are admitting what I’ve said all along:
Investors are paying far too much for the homes they’re buying at foreclosure auctions!
The numbers they have been quoting, and the prices they have been paying do not cover the cost of holding, much less maintaining….and certainly not improving…the real estate they are buying. That means the assets they are holding will be declining in value. And once a decline starts in real estate…..that decline is very difficult to stop.
And so at some point in time we’ll all get around to asking the question….
Why won’t we modify mortgages in the same terms we will sell these homes to private investors?
FORTUNE – When the U.S. housing market crashed in 2007, millions lost their homes to foreclosure. With their finances in shambles, they picked up the pieces by renting rather than buying. Big institutional investors quickly caught on, snapping up foreclosed properties on the cheap and renting them out.
All this has helped drive the recovery we’re seeing today: Investors effectively absorbed the excess inventory of homes for sale, which in turn has helped push home prices higher. Prices for rentals have also risen rapidly, as families who either lost their homes or put off buying found rentals to live in.
While this has gone on for some time, the investor frenzy might have peaked. Rents for single-family homes have essentially flattened — rising just 0.1% in March from a year earlier, according to a report released Thursday by real estate listing website Trulia. What’s more, in some cities where investors had the biggest appetite for properties on the cheap, rents have fallen: Take Los Angeles, where rents fell 1.9%; rents in Orange County slipped down 0.7%; Las Vegas saw a 1.9% drop. And in two other key investor markets — Atlanta and Phoenix — single-family home rents remained flat, rising less than 1%.
Meanwhile, rents for apartments have continued to rise, climbing 2.9% in March from a year earlier.
.[W]hen exposed, it revealed its true corporate character by denying any obligation to correct its past transgressions and mounting a legal assault to ensure it never had to. Read more at http://www.nakedcapitalism.com/2013/04/wells-fargos-reprehensible-foreclosure-abuses-prove-incompetence-and-collusion-of-occ.html#eoiU5DEZfKx1WcDg.99
Two bankruptcy cases in Louisiana that have revealed systematic, persistent foreclosure abuses by Wells Fargo have gotten enough media attention that it is inconceivable that banking regulators don’t know about them. The lack of any intervention, or even so much as a throat-clearing by the Office of the Comptroller of the Currency is yet another proof of how the regulator apparently sees its role as fronting for banks rather than enforcing rules.
This story is back in the news thanks to an appeals court smackdown of Wells, which has engaged in a long-standing war of attrition with one of the plaintiffs, a Michael Jones. The reason for the appeal was that the bank was fighting the judge’s imposition of punitive damages of $3.1 million for Wells’ “reprehensible” conduct.
We wrote about the underlying case a year ago. Bankruptcy judge, Elizabeth Magner of the Eastern District of Louisiana, had found Wells Fargo guilty of egregious foreclosure abuses in a 2007 case, Jones v. Wells Fargo. In it, the bank admitted that the types of overcharges it made in bankruptcy cases were “part of its normal course of conduct, practiced in perhaps thousands of cases.” The judge awarded damages and recovery of attorney fees on top of repayment of the impermissible charges, and ordered the bank to fix its accounting.
Fast forward four months, and another case appears in Mangers’s court with the same sort of verboten charges, proving that Wells has not taken the required corrective measures
The Banks Do Not Want You To Discover....
The American People....Sent To Kill Around The Globe....
SICKENING VIDEO- On The Anniversary of America’s Invasion of Iraq- Compare What The German People Knew About What Was Done In Their Names…..
A chilling scene that every American needs to watch. When the US liberated Nazi concentration camps, US soldiers forced German citizens to come back and see what they had done….these citizens knew what was being done in their names. Is this any different than the US today after Iraq? Where we all just sit back and claim we didn’t know what war criminals Bush, Cheney, Brennan did in our names?
Hundreds of thousands of innocent men, women and children have been killed and continue to be killed…not because of our desire to “liberate” or spread freedom and democracy, but because, after Bush II especially, we blatantly and overtly became a nation of war profiteers, marauding killers.
The American people cannot ignore this any longer. Every voter, every man, woman and child who refuses to accept the horrifying truth of this remains complicit in these war crimes.
America did not fail when such atrocities were committed. America fails every day Americans fail to recognize this truth and accept responsibility for what we have done.
America fails as we continue to kill innocent men, women and children all across the globe….and for what? Ask yourself. And to the extent you don’t know the answer to the question, the answer is….
WE KILL TO SUPPORT THE CORPORATIONS THAT PROFIT FROM THE WAR CRIMES.
Support our soldiers and the men and women that serve. Speak out for them because they cannot. We should bring them home and care for them when the get here. This is no criticism of the men and women who serve and who served, this is a criticism of the political powers that sent them into harm’s way.
And we should always ask the question:
What if we had declared war on war, and dedicated ourselves to actually winning hearts and minds…instead of wanton, indiscriminate killing?
Federal Bankruptcy Judge Warns Consumers- Don’t Ignore State Court Foreclosures, Bankruptcy Protections Have Limits!
I very much encourage everyone swimming in these fraudclosure waters to read the recent article that appeared in the St. Petersburg Times. It is especially critical that members of The Bar and Officers of the court read the words of this federal judge carefully to understand both what the words mean and the impact and implications of the words.
The fact of the matter is our state’s federal bankruptcy courts are having dramatic success in forcing borrowers and lenders to work together to forge solutions to the foreclosure problems that are being faced. A critical difference between state court meditations and the meditations that occur in federal court is that the federal courts are placing very important requirements on both the borrowers and the lenders to go into meditations with all documents in hand, with all considerations reviewed ahead of time so that a mediation can occur with real information in possession of both parties.
We must all work together to solve these problems, and in Florida’s Middle District Bankruptcy Courts, they are doing just that…..and consumers and banks benefit from this…From the article:
More and more frequently, bankruptcy court judges see cases in which the debtors misapprehend the ability of the bankruptcy court to undo the effect of state court judgments of foreclosure. These debtors believe, erroneously, that the bankruptcy court can vacate those judgments, revisit unsuccessful defenses and counterclaims, and sit as a quasi-appellate court in review of the propriety of the judgment.
It is true that the Bankruptcy Code provides means to save a home when a mortgage loan is delinquent, such as in a Chapter 11 (reorganization for a debtor with a large amount of debt), Chapter 12 (family farmer or fisherman) or Chapter 13 case (debt adjustments for a person with regular income and debts within certain limits).
See that image up there….it’s Themis, the pictoral symbol of our nation’s legal system. She sits out in front of many courtrooms and her image is plastered all about courtrooms and papers all across this nation. Now, conceptually at least our nation does not have two legal or judicial systems. Themis does not stare down only in “major” cases or “real” cases. She does not sit only in felony trial courtrooms…leaving misdemeanor courtrooms to some other God, some other standard. She is not absent from small claims or family law courtrooms, cedeing those courtrooms to some inferior Goddess….
At least in theory.
But what we see, all across this country, is a judicial system all too willing to quickly cede the high ground of a judicial system that was thousands of the years in the making for the political and economic expediency of criminal enterprises commonly known as, “The Banks”. The Banks committed crimes. Forgery, fraud, perjury and worse. But rather than be held to account, they have gotten away with their crime spree. And in so many areas not only do we have a judicial system that fails to hold them accountable, we have a judicial system that is failing to fulfill its sacred duties.
When we have judges who are intently focused on “moving these cases along” or “clearing the docket”, we risk losing our justice system. We risk trading it for some grossly out of control administrative process goverened not by law but by numbers on an excel spreadsheet. For those that think, “It’s only foreclosure” and “What difference does it make, they haven’t paid their mortgage!”, I ask you to consider,
“What happens to our court system when the next crisis comes along? What happens when there is a family law crisis or a crisis involving or nation’s military or criminal justice system? Remember, conceptually at least, our nation has only one justice system. And if we are all so willing to stand aside and toss this system into the dustbin of history just to fulfill some perceived short term necessity, what will happen the next time there is some real crisis or tragedy?”
I’m proud to say I practice in an area of this state that does not suffer from these failings. The citizens and voters here in West Central Florida should be quite proud and supportive of the good judges who preside over courtrooms and cases with exactly the same standard of care, strict adherence to laws and rules and eyes and minds firmly focused on the essential principals embodied in the very real symbology of Themis. Our area, with good and dedicated Officers of The Court….Bank Attorneys, Defense Attorneys, Judges and Staff..are working through this, “crisis” in a way that strengthens our communities, forges compromise and resolution but most importantly it protects and strengthens our area’s legal system….
And now for the other side of the story:
(But before you read the story, there’s one aspect that after reflection, I believe deserves commentary. Who are the proponents and antagonists in this story? Note that there are no representatives from the banks or from Fannie Mae or Freddie Mac or the Wizards that all of this is being done on behalf of. Instead, we have…on one side of a debate the dedicated advocates for homeowners and consumers…and on the other side, court officials who have adopted very adamant and strident positions that advocate policies that can only be read to be quite opposed to those interests of the consumers, citizens, the litigants against whom the awesome power of our nation’s court system is being directed.. Keep that in mind as you read the story….)
Florida’s foreclosure courts have made almost no progress in clearing an overwhelming backlog of cases from their dockets despite a $4 million stipend awarded by lawmakers this year.
As of Oct. 31, there were 377,272 pending foreclosures in Florida’s 20 circuit courts, a net reduction of just 435 cases since the money became available in July, according to the state courts administrator.
Judges say new foreclosure filings have nearly outpaced the number of cases they’ve been able to close as banks work on clearing defaulted loans on hold since the robo-signing freezes and pending the National Mortgage settlement, which was finalized in March.
While the $4 million has helped courts statewide close 69,513 cases in four months, 69,078 new cases were added during the same time period.
“Obviously, we hoped to make a bigger dent, but it seems like we’re just treading water at this point,” said Palm Beach County Chief Judge Peter Blanc, who has 32,434 pending foreclosure cases in the 15th Circuit. “I’m disappointed in the numbers, but the reason for them is pretty clear.”