KeNo's Housing and Economic Portal: Thursday February 17 Housing and Economic stories

Wednesday, February 16, 2011

Thursday February 17 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

National Average: 492 Days From Default to Foreclosure - (www.dailybail.com) 492 days in October 2010 versus an average of 382 days in October of last year. "In other words, people who default on their mortgages can reasonably expect, on average, to stay in their homes rent-free more than 16 months. In some states such as New York and Florida, the number is closer to 20 months." 492: The number of days since the average borrower in foreclosure last made a mortgage payment. Banks can’t foreclose fast enough to keep up with all the people defaulting on their mortgage loans. That’s a problem, because it could make stiffing the bank even more attractive to struggling borrowers. In recent months, the number of borrowers entering severe delinquency — meaning they missed their third monthly mortgage payment — has been on the decline, falling to about 700,000 in October, according to mortgage-data provider LPS Applied Analytics. But it’s still more than double the number of foreclosure processes started.

Fannie Corruption of Housing Finance Could Be Reduced - (www.nytimes.com) What can be done with Frannie? We love her and we need her. But we have to get along without her, or at least learn to live without relying on her so much. Frannie is an amalgam of Fannie Mae and Freddie Mac, the two government-sponsored enterprises that became government-run operations after the financial crisis left them insolvent. The two mortgage giants were managed differently, but the distinctions did not turn out to be very important. So I’ll combine their names and call them Frannie. The name rhymes with Grannie, which seems appropriate for the role she now plays. Whatever the sins of her younger years, now she represents loving stability, particularly to the younger members of the family. It is not at all clear that the American mortgage market could function without her.

E-mails Suggest Bear Stearns Cheated Clients Out of Billions - (www.theatlantic.com) Former Bear Stearns mortgage executives who now run mortgage divisions of Goldman Sachs, Bank of America, and Ally Financial have been accused of cheating and defrauding investors through the mortgage securities they created and sold while at Bear. According to e-mails and internal audits, JPMorgan had known about this fraud since the spring of 2008, but hid it from the public eye through legal maneuvering. Last week a lawsuit filed in 2008 by mortgage insurer Ambac Assurance Corp against Bear Stearns and JPMorgan was unsealed. The lawsuit's supporting e-mails, going back as far as 2005, highlight Bear traders telling their superiors they were selling investors like Ambac a "sack of shit." News of internal whistleblowers coming forward from Bear's mortgage servicing division, EMC, was first reported by The Atlantic in May of last year. Ex-EMC analysts admitted they were sometimes told to falsify loan-level performance data provided to the ratings agencies who blessed Bear's billion-dollar deals.

A Reservist in a New War, Against Foreclosure - (www.nytimes.com) While Sgt. James B. Hurley was away at war, he lost a heartbreaking battle at home. In violation of a law intended to protect active military personnel from creditors, agents of Deutsche Bank foreclosed on his small Michigan house, forcing Sergeant Hurley’s wife, Brandie, and her two young children to move out and find shelter elsewhere. When the sergeant returned in December 2005, he drove past the densely wooded riverfront property outside Hartford, Mich. The peaceful little home was still there — winter birds still darted over the gazebo he had built near the water’s edge — but it almost certainly would never be his again. Less than two months before his return from the war, the bank’s agents sold the property to a buyer in Chicago for $76,000. Since then, Sergeant Hurley has been on an odyssey through the legal system, with little hope of a happy ending — indeed, the foreclosure that cost him his home may also cost him his marriage. “Brandie took this very badly,” said Sergeant Hurley, 45, a plainspoken man who was disabled in Iraq and is now unemployed. “We’re trying to piece it together.”