The next wave of foreclosures
Letter to the Editor
By Inman News, Friday, October 30, 2009.Re: 'California official warns of loan resets' (Oct. 30)
Dear Editor:
The number of option ARMs (adjustable-rate mortgages) ready to reset is amazing in California. Not only did the balance go sky high but they are so underwater. Some are paying the negative amortization payment because it's affordable. Some are choosing to walk.
If the servicers do nothing, there is going to be a huge -- and I mean huge -- wave of foreclosures. People seem not to care anymore. They seem to be saying, "Pay me to keep this house that is underwater by $200,000."
I can go rent a house for less than my house payment, and a bigger one at that. So why keep it?
GOOD LUCK to the servicers and investors who are holding out.
Karen Nierhake
Muir West Realty
Martinez, Calif.
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Submitted by Sean OToole on November 2, 2009 - 8:22am.
A wave of foreclosures is highly unlikely.
We simply don't have the political will to do it. Last year as foreclosures began to ramp, federal, state and even local governments all swung into action to stop servicers from foreclosing. Despite the majority of the moratoriums and laws having run their course lenders have not ramped back up... not surprising with threats of bankruptcy cramdowns on one hand, and the mark-to-model incentives to not foreclose on the other.
At the same time we also don't have the political will to bail homeowners out. It's fine to give GM billions, but don't you dare give my neighbor $100k.
With millions not making their payment and millions more underwater we appear to have chosen limbo - don't bail them out AND don't foreclose.
See Waiting to catch a wave? Surge of REO listings is unlikely
Sean O'Toole
Founder / CEO
ForeclosureRadar.com
ForeclosureTruth.com
Submitted by Alvaro Ramirez on November 8, 2009 - 3:53pm.
The reality of things are that we will see an increase in foreclosures for the reasons everyone knows already and this doesn't even take into account the baby boomer retirement group that will need to dump real estate to maintain their current life style.
With approximately 500,000 trial mods and only 1,700 permanent mods (5yrs)done this according to the US Treasury - HAMP isn't working. We should know the government won't do anything to keep people in their homes. Treasury’s job is to help revive the economy not to keep you and in our homes. How did my contact at Treasury say it? Oh yeah "Alvaro I could care less if some keeps his home or not. Our job is to bring back the economy... Don't get me wrong, we would like to help, it is just not what we do". I say fair enough and so where does that leave us.
As a homeowner I can say it makes sense for them to lower my principal down to market value but I also want an interest below market rate because I may still now be able to keep my home without it. The question then is will that ever happen as an industry standard? ASF put out its white paper on what think about principal reduction. Now we just have to wait and see if the servicers will do it. As much as investors know they will have to do it they will not tell the servicers to do so. Investors will not want to free the servicer of any responsibility or liability.
Remember Bill Frey? The investor who suit BofA for modifying his loans and not purchasing back as dictated in their contract. The court's decision was in his favor. So why would an investor or a bond holder - remember too if you have a retirement account, you may be invested in Mortgage Securities and forgiving principal could your retirement could go down in value also.
On an MBA report, it was said servicers and investors alike expect the market to continue to decline until December of 2011 and 20 years for property values to come back to where they were prior to this meltdown. Everyone can have their opinions as to when it will turn or that it already has. I am more interested in the mortgage investor who is worried about how much more he will lose and how long it will take to recover some of his money. Wouldn't you? Unless you are the one who seats down and has a beer with his cousin and does market forecast and investment advice.
Submitted by Danny C. Flucke Jr. on November 11, 2009 - 9:05am.
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"Today one out of every eight American homeowners with a mortgage (12.5 percent) are either in foreclosure or delinquent in their payments.
The nation's September 2009 foreclosure rate rose to 3.12 percent. (Month-over-month increase of 2.6 percent and a year-over-year increase of 88.9 percent.)
Total U.S. loan delinquency rate: 9.37 percent
Total U.S. foreclosure inventory rate: 3.12 percent
Total U.S. non-current* loan rate: 12.49 percent
States with most non-current loans: Florida, Nevada, Mississippi, Arizona, Georgia, California, Michigan, Indiana, Ohio and Illinois.
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Thank you,
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