Mortgage foreclosures keep on, keepin’ on. Post 162

January Foreclosure Activity Continues To Be Depressed Due To Robofraud,  Judicial State REOs Plunge

RealtyTrac by Tyler Durden  02/10/2011

“Unfortunately this is less a sign of a robust housing recovery and more a sign that lenders have become bogged down in reviewing procedures, resubmitting paperwork and formulating legal arguments related to accusations of improper foreclosure processing.” What is interesting is the growing distinction between judicial and non-judicial state REO activity…

A total of 75,198 U.S. properties received default notices (NOD, LIS) in January, a 1 percent decrease from the previous month and a 27 percent decrease from January 2010 — the 12th straight month where default notices decreased on a year-over-year basis.

Not surprisingly, the pain continues to be concentrated, as just five states account for more than 50 percent of the national total:

With 67,072 properties receiving a foreclosure filing, California accounted for more than 25 percent of the national total in January. After hitting a 25-month low in November, California foreclosure activity has increased on a month-over-month basis for two straight months.

Florida foreclosure activity decreased on a month-over-month basis for the fourth straight month, but the state’s 21,671 properties receiving a foreclosure filing in January — a 42-month low — was still the second highest in the nation.

Michigan foreclosure activity increased for the second straight month, and the state posted the nation’s third highest total, with 16,716 properties receiving a foreclosure filing in January.

Arizona posted the nation’s fourth highest total, with 15,757 properties receiving a foreclosure filing, while Texas posted the nation’s fifth highest total, with 14,897 properties receiving a foreclosure filing during the month.

Other states with foreclosure activity totals among the nation’s 10 highest in January were Illinois (13,164), Georgia (12,772), Nevada (12,263), Ohio (8,924) and New Jersey (5,526).

See the complete article:  January’s foreclosure filings plunge in judicial states due to Robofraud

*******************

Coach Mitch’s REFLECTIONS™

 

Foreclosures are DOWN???

That’s the headline. However, read the article and we see that it is only bureaucratic nonsense and what has really happened is that paperwork that has clogged the system and created a backlog. The economy is not getting measurably better, at least not anytime soon.

• In Las Vegas, over 81% of all properties show negative equity.
• Phoenix is 70% negative,
• with Reno having 68% of properties with negative equity.
• Orlando is 62% negative and
• Modesto, CA is 58% underwater.

In judicial states people are fighting back

In NY, NJ, CT, MA and Ohio the courts are making life difficult for foreclosing banks; some say by 70%. Increased scrutiny of bank docs are slowing things down. A new rule requires the plaintiff’s (bank) attorneys to verify the veracity of all bank docs. No attorney firm wants to absorb the liability on a foreclosed property that went through MERS because it may have a robo-signed assignment sitting in the county clerk’s files.

This is a list of the judicial states

http://arizonarealestatehome.com/all-real-estate/robo-signing-which-23-s…

Non-Judicial states are next

Currently, bank foreclosures are decreasing in judicial states because the banks are taking the easy route and focusing on non-judicial (no judge involved) foreclosures.

The big cases involving bank fraud have happened in states WITH judicial oversight. Just imagine the level of fatal procedural errors that defense attorneys will find in states where banks knew that there was no judicial oversight. Bank hubris is overwhelming.

Non-judicial states have even more procedures to protect owners precisely because no judge is involved. Because a non-judicial foreclosure is in derogation of common law (a change to), they are held to a higher scrutiny. Some maintain that even a small procedural issue could be fatal to a foreclosure and will void all associated proceedings. Also, as procedural issues are enough, fraud need not be alleged, and no foreclosure decree need be set aside. When some cases are won, the floodgates may open.

MERS and the FED working together

• Recently, robo signatures on bank assignments make those mortgage loans not valid, said a MA court. Thank you MERS for this fateful banking policy. In the effort to save money, you have put US all in jeopardy.

• The federal government and the Federal Reserve have been helping lenders and note holders by suppressing foreclosure activity. The government regulators allowed banks to process foreclosures in an illegal manner. Lawyers for swindled homeowners are also doing their part to slow things down, particularly in judicial states, where a judge is required to oversee a foreclosure.

• The Federal Reserve also is behind the recent run-up in the stock market. The Fed http://read.bi/i6SBTY has been pumping money into the stock market for quite some time.

Tax delinquency and mortgage foreclosures

This is a shoe that still has a ways to go before it drops. States are due property taxes. States will pursue legal actions and take those properties that are behind in property taxes and the only way the banks will be able save them will be if they pay the taxes. This shadow inventory is not being spoken of by anyone – to our detriment.

When the houses fall behind in taxes for the statutorily correct amount of time, then the tax collectors will auction the properties and, if not successful, they will negotiate a sale.

Another bubble ready to burst

• This tax delinquency / auction process can often take three, four and five years. Therefore it has taken some time for this portion of the financial debacle to percolate. We should start seeing the first gurgeling’s next year.

• I predict that cash strapped counties will move aggressively and put tax delinquent properties up for auction at the earliest possible time.

• I also predict that town and county employees will raise a big stink when they have to take enforced leave, receive no raises, have their pension and medical benefits reduced – in other words, that their milking of the system is under scrutiny.

Counties will meet payroll and provide infrastructure by scheduling tax auctions of those expensive homes with big mortgages.  The counties know that those Too Big To Fail federally subsidized banks will have to pay up or lose the property. The Banks who are Too Big To Fail, already know that the government (taxpayers) will back them up. And the Chinese also know that unless they buy Treasury bonds, their portfolios will be lighter by many $350K homes selling for $150K or less at auction, without any mortgage attached.

BTW

In judicial states, the Lis Pendens or Notices of Default (NOD) is the statistic to watch in order to see trends. The LP only lags the default by a few months. The bank repossession lags the default by a much longer time, a year or more.

See Coach Mitch’s “Ridiculously Simple System…” ™ for details.

As always,

Be careful out there,