KeNo's Housing and Economic Portal: Monday November 1 Housing and Economic stories

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'Foreclosure Mill' Employees Got Gifts For Altering Documents - (www.huffingtonpost.com) At a large Florida "foreclosure mill," a manager signed up to 1,000 documents a day without reading them and employees were given gifts to speed up foreclosure paperwork, according to depositions released today by the Florida Attorney General's Office. The news, also reported by Tampa Bay Online, comes as Bank of America, the nation's largest bank by assets, announcement that it would resume more than 100,000 foreclosures in 23 states after an internal investigation of its practices. Florida authorities are investigating the law offices of David J. Stern over how it handled foreclosure paperwork. As the AP notes, Cheryl Salmons, an office manager at the law offices of David Stern, "would sign 500 files in the morning and another 500 files in the afternoon without reviewing them and with no witnesses," according to Kelly Scott, a former assistant at the firm. The perks for good performance were considerable, according to Scott's statement.Tampa Bay Online notes office employees were lavished with gifts:

From $1.5 million down to $630,000 in Huntington Beach, CA - (www.doctorhousingbubble.com) Huntington Beach is a fun city to be in. But like most Southern California cities, is still largely overvalued. The root of this housing crisis is based on massively overpriced real estate being leveraged with toxic mortgages. It seems like the toxic mortgages have wilted away because of Wall Street’s lack of appetite and their desire to steal money from taxpayers (a much easier source of income) yet prices in many areas still act as if thetoxic mortgage market was still in place. It is not. In California option ARMs have been removed from the repertoire of purchasing a home. Even in places that once were seen as “housing bubble proof” the correction is hitting fiercely even with “beach” in the title of your city name. Huntington Beach is the third largest city in Orange County with over 200,000 residents. Let us take a look at why prices are still too high in this beach city.

Mortgage Buybacks May Cost Lenders $120 Billion - (www.businessweek.com) Forced repurchases of soured U.S. mortgages may be the “biggest issue facing banks” even as errors in the foreclosure process draw attention to other industry risks, according to JPMorgan Chase & Co. analysts. Future losses from repurchases of home loans whose quality failed to meet sellers’ promises will likely total $55 billion to $120 billion, or potentially $10 billion to $25 billion for the next five years, the New York-based mortgage-bond analysts led by John Sim and Ed Reardon wrote in a Oct. 15 report. While a “firestorm of news” sparked by some loan servicers’ decisions to halt action on defaulted loans is drawing renewed attention to banks’ mortgage-repurchase risks, the foreclosure issues themselves are mostly “process-oriented problems that can be fixed,” the analysts wrote.

Pimco, NY Fed Said to Seek BofA Repurchase of Mortgages - (www.bloomberg.com) Pacific Investment Management Co., BlackRock Inc. and the Federal Reserve Bank of New York are seeking to force Bank of America Corp. to repurchase soured mortgages packaged into $47 billion of bonds by its Countrywide Financial Corp. unit, people familiar with the matter said. A group of bondholders wrote a letter to Bank of America and Bank of New York Mellon Corp., the debt’s trustee, citing alleged failures by Countrywide to service loans properly, their lawyer said yesterday in a statement that didn’t name the firms. The New York Fed acquired mortgage debt through its 2008 rescues of Bear Stearns Cos. and American International Group Inc. Investors are stepping up efforts to recoup losses on mortgage bonds, which plummeted in value amid the worst slump in home prices since the 1930s. Last month, BNY Mellon declined to investigate mortgage files in response to a demand from the bondholder group, which has since expanded. Countrywide’s servicing failures, including insufficient record keeping, may open the door for investors to seek repurchases by bypassing the trustee, said Kathy Patrick, their lawyer at Gibbs & Bruns LLP.

Why should we pay taxes if borrowers don't pay mortgages? - (www.globalresearch.ca) Wall Street has raised its voice against any government moratorium on foreclosures, even as evidence mounts that banks systematically and illegally falsified documents in order to expedite hundreds of thousands, or even millions, of foreclosures. Documented examples of abuse include banks hiring contractors and what one Goldman Sachs executive referred to as “Burger King kids” to process thousands of foreclosure documents per week, all the while declaring to courts they were familiar with the cases. Lenders also falsified signatures, notary stamps, and tossed legal documents into the garbage. Every major bank is implicated in the widening scandal. Yet to the barons of Wall Street these examples of law breaking—what a number of state attorneys general have called a “fraud on the court”—are immaterial, and those who were evicted deserved their fate. Jamie Dimon, CEO of JP Morgan Chase, whose bank is implicated in the scandal, said this week in a conference call that there have been no accidental evictions. “We’re not evicting people who deserve to stay in their house,” the multimillionaire banker declared. “If you didn’t pay your mortgage, you shouldn’t be in your house. Period,” Walter Todd of the investment advisory firm Greenwood Capital Associates, told Reuters. “Everyone’s responsible for following the law. If we all don’t have to pay our mortgage, should we just stop paying taxes, too?” said Anton Schutz, president of Mendon Capital Advisers. Everyone has to follow the law except the banks, that is. Schutz added, “Your mortgage didn’t get to a robo-signer by accident, it’s because you’re not paying.... Krugman attempts to distinguish these claims by Wall Street with the position of the Obama administration, whose opposition to a moratorium on foreclosures the Times columnist suggests is a policy mistake. In fact, the White House is of one mind with the banks. In spite of mounting popular anger toward Wall Street—and the upcoming off-year elections—the Obama administration this week categorically ruled out any national moratorium on foreclosures, instead encouraging banks to review their own practices and carry through with foreclosures “as quickly as possible,” according to the Washington Post.