Foreclosures Up Again: Who Will Turn The Switch Off?

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Editor’s Comment:  

With the settlement out of the way using the office of the attorney general covering all 50 states, the Banks are on the move again, and the number of new foreclosures is rising. But what is readily apparent from the data is that it never really went down and is continuing at the rate of millions of foreclosures per year.

RealtyTrac and others are spinning this as a good thing since it is clearing out the inventory and the rate of foreclosures measured month to month went down. As usual they are trying to distract us from looking at the numbers and using small changes in percentages to say that the housing market hit bottom. It hasn’t hit bottom and it didn’t hit bottom the last 27 times they said it hit bottom. But some people believe it. If you repeat a lie often enough more and more people will believe it.

 The fact is that in any given month more than 200,000 homes are in the process of foreclosure.  That means that in any given month there is an average of 500,000 people faced with foreclosure and eviction, assuming 3 people per household. The fact is that new Foreclosures are staying the course too, with small, meaningless percentage changes. More than 100,000 NEW foreclosures or auctions are being started every month which means that over the next 12 months we will see over 1.2 MILLION new foreclosures. And that is on top of the 5-6 million foreclosures we have already seen.

Compare this scene not to yesterday but to 6 years ago when foreclosures were at a minimum, although rising. If somehow the number of foreclosures shot up to 6 million all at once we would have considered it a national catastrophe, which it is. If we suddenly had 100,000 new foreclosures per month we would have been outraged. If we suddenly had over 200,000 homes in foreclosure we would immediately perceive the threat to our economy and do something about it. 

But our senses have been dulled by the drone of foreclosure and mortgage statistics. And so what was and should be unacceptable has become accepted. Somehow our country doesn’t get the new impending crisis that is hidden for the time being by printing money and the flight of investor money  to U.S. treasury bonds because they look safe compared to what is going on in Europe. And we don’t hear much about the horrendous economic crisis in Europe because politicians here don’t want us to have information that would frighten us into action — like Europe is taking action.

There was and remains only one way, one path to economic recovery. A house built on sand will continue to shift and then fall once it grows large enough. The foundation of our society and our financial system was ripped out from under us. We rewarded the wrong-doing with bailouts and permission to keep on sucking us dry. The origination of mortgages in the securitization market was wrong and illegal. We are prevented from seeking solutions to the housing crisis not because a percentage of loans are in default but rather because of all the derivatives hanging on the same tree — a bad loan, non-complying with law or lending standards that was treated in a bad way and which was funded by wrongful misrepresentations to investors. 

And the banks refuse to cooperate. Small wonder — for every actual dollar in any currency denomination in the world there are more than ten dollars of derivatives being used as cash equivalents on the balance sheets of financial institutions and other companies. This house of cards must fall. It is the Banks that MUST fail, not our society. 

The one and only path to economic recovery is principal and rate reduction. The switch is there on the wall to light up the room, but somehow the moral hazard of the threat from the banks is being hidden by some gibberish about “if you turn the light on then other people will get to see too.” Everyone should see the truth and this madness must end.

A Brand New Troubling Sign For The Housing Market

By Mamta Badkar

may foreclosure map

RealtyTrac

Despite talk of a housing bottom, new data shows that foreclosure filings jumped 9 percent from April to 205,990 according RealtyTrac’s latest foreclosure report.While the rise in foreclosure activity above the 200,000 mark is worrying, an even more worrisome sign is the rise in foreclosure starts – default notices or scheduled foreclosure auctions.

Foreclosure starts were filed on 109,051 U.S. properties and were up for the first time in 27 straight months on a year-over-year basis (YoY).

Daren Blomquist, vice president at RealtyTrac said in an email interview that the uptick in foreclosure starts is troublesome “because the real estate market has started to stabilize over the past few months, helped in part by decreasing foreclosure activity. This new batch of properties entering the foreclosure process could threaten to destabilize the market once again.”

For now Blomquist says lenders are pushing “smaller waves of distressed loans into foreclosure rather than filling the foreclosure pipeline all at once,” which should prevent a sudden drop in home prices.

Foreclosure starts increased on an annual basis in 33 of 50 states. Some of the biggest increases were seen in the judicial foreclosure states like New Jersey, where foreclosure starts were up 118 percent YoY, Pennsylvania, 93 percent. In Tennessee, a non-judicial foreclosure state, foreclosure starts were up a whopping 165 percent YoY.

Going forward, a higher percent of these foreclosure starts are likely to end up as short sales or auction sales rather thank bank repossessions according to RealtyTrac CEO Brandon Moore. Pre-foreclosure sales have less of a negative impact on home prices than bank-owned sales but they can benefit the lender since, pre-foreclosure sales sell at a higher average price point than bank-owned homes.

Here’s a chart from RealtyTrac that shows the rise in foreclosure starts:

foreclosure starts chart may

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23 Responses

  1. […] Read more… Posted in Banks, MERS, News Around The Country, States « FTC Shuts Down Forensic Audit Scam that claims: 95% of mortgages may be legally unenforceable. (Where have I heard that before?) HAWAII Foreclosure Help from Mandelman Matters – START HERE » You can leave a response, or trackback from your own site. […]

  2. […] Foreclosures Up Again: Who Will Turn The Switch Off? (livinglies.wordpress.com) […]

  3. Show me your friends and I’ll tell you who you are…

    Clean up continues worldwide. Iceland is cracking up big time on the culprits of its economic crisis, including quite a few British. Foreclosures here are only a diversion. The big picture is what we need to focus on. America doesn’t live in a vacuum. The crisis didn’t happen in a vacuum. Everything is tied up. And solutions will not come from here but from outside. So, the choice is to be afraid (and change will happen regardless) or to go with the flow and keep an open mind on what will develop. We’ve seen the worst in people and nations. We’re soon to start seeing the best.

    http://www.businessweek.com/news/2012-06-18/suicides-arrests-show-trouble-at-korean-savings-banks

    Suicides, Arrests Show Trouble at Korean Savings Banks
    By Seonjin Cha on June 19, 2012 Tweet

    On the day she was supposed to have appeared before prosecutors for questioning last month, an executive of a shuttered South Korean savings bank hanged herself with her scarf in a Seoul motel.

    The woman, identified by the police only as “Kim,” was a credit officer at Mirae Mutual Savings Bank whose chairman was caught fleeing to China in a fishing boat three weeks before. She’s the latest casualty of a scandal that has been eating at the periphery of Korea’s banking industry for more than a year.

    So far, regulators have closed Korea’s 20 weakest banks. Prosecutors have uncovered illicit lending and lax oversight, leading to indictments of nearly 200 people and at least two jail sentences. Four bank executives have committed suicide, according to police. More than 88,000 depositors and bondholders, many of them retirees, saw 1 trillion won ($857 million) of their savings in excess of insured levels vanish.

    “Everyone’s become a victim,” said Nam Joo Ha, an economics professor at Sogang University in Seoul. “Regulators lost the people’s confidence. The savings bank industry lost trust, a financial company’s most important virtue, and the people lost their money.”

    Before the closures, South Korea used to have more than 100 so-called savings banks, which are small, separately licensed provincial lenders. They have narrower business models than the country’s 18 nationwide institutions, such as Kookmin Bank and Woori Bank, which collectively are 30 times larger by assets.

    Mounting loan defaults related to property in South Korea’s sluggish real-estate market following the global financial crisis in 2008 led to capital and liquidity shortages.

    Inadequate Capital
    To survive, savings banks started selling customers subordinated bonds that had low priority for repayment in the event of default. The bonds became popular, particularly among the elderly living on interest payments. The yields, as much as 10 percent annually, were almost double the savings account rates at national banks.

    The Financial Services Commission began suspending operations of savings banks that had inadequate capital in January last year. The first closures led to bank runs at other lenders, leading to more shutdowns.

    At 6 a.m. on Sunday, May 6, Korea’s regulator announced the closing of four lenders including Korea Savings Bank (025610), whose more than 10,000 depositors included 50-year-old Je Mi Young.

    Je had been excited two days earlier when she received a text message from the bank saying her 10 million won deposit would mature in three days. Before the day could come, the Seoul housewife sat trembling in her pajamas that Sunday morning, as headlines streamed across her television screen delivering the news that the bank was out of business.

    ‘Bad Dream’
    Her savings would be protected by state-run Korea Deposit Insurance Corp., which guarantees as much as 50 million won at both savings banks and larger lenders. Still, the additional 40 million won bond investment she made on behalf of her mother would be wiped out.

    “I wish it were a bad dream,” said Je, pulling her trimmed black hair behind her ear while attending a KDIC meeting on claiming restitution for the savings later that week. “I always wondered what kind of stupid people put precious money into messy banks. Now, I am one of them.”

    Je recalls getting a text message in September 2010 from Korea Savings pitching five-year notes yielding 8 percent annually. It was easy, the bank promised. She invested her mother’s savings, four times as much as her own, in bonds that aren’t protected by deposit insurance.

    “How can I tell my 80-year-old mother I’ve lost the funds she lives on?” she said. “I was deluded by a couple of percentage points of interest rate. Now I can see it was only a trap.”

    Shares Plunge
    Shares of Korea Savings Bank tumbled 49 percent this year until trading of the stock was halted on May 7 following the closure. Its Jinheung Savings Bank Co. (007200) unit, which is still operational, was unchanged at 1,210 won in Seoul trading today. The stock has dropped 63 percent this year.

    Solomon Savings Bank (007800), the largest such lender, had plunged 47 percent this year by the time it was shut last month.

  4. You have to see this music video just released – it’s now my new ANTHEM !!!
    It’s “Welcome to America” by Denae Gardner, on YouTube at: http://www.youtube.com/watch?v=8rkcrxrougE
    It starts off with a pic “American dream being taken”
    That’s my fiancé’ Randy Mc Cluskey, the bass player to the left of the screen. (Kinda looks like Neil…)
    ( I made the feather ornaments hanging from his bass…)
    I lost steam in fighting Wells Fargo for my home, and then the video came out and helped me get in the fight again.

    “Welcome to America” by Denae Gardner

    Welcome to America,
    Land of milk and honey,
    Welcome to America,
    Got a new god and they call it money…
    This ol’ eagle,
    She don’t fly,
    Somebody shot her in a drive-by, so…
    Welcome to America,
    Land of milk and honey,
    Welcome to America,
    Got a new god and they call it money…
    Everyday a new crisis
    Politicians, preachers and scholars
    Think they can fix ya for a few more dollars
    Welcome to America,

    pass it on…

    Peg Butcher
    PS. it was shot here in Idaho, the music video -not the bird

  5. @Carie,

    Recall that article you posted by Matt Weidner.

    Here is what I posted here (on another page) on 6/17/12. I have had that hunch that it is the government for a long time…

    “Cheryl,

    “I have that very strange feeling that banks have been told to lay low and all those weird fringe websites appear to know something we don’t. I am absolutely convinced that banks are on their way out. The sudden push for foreclosures is something else altogether and I think it emanates from government more than banks. Something IS going on. I can feel it”

  6. “Remembering you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.”

    Steve Jobs

  7. @Carie,

    I keep saying: “When you’ve got nothing, you’ve got nothing to lose.” It can turn you into a mass murderer with an MK7 or… it can give you the emotional detachment everyone should develop. To think that Chase is… well, chasing me (pun intended) to sell me their bank account and credit card! Last year, they wanted to give me $100.00. I ignored them. By now, it’s $250.00. I got a shoe box full of those. I even have some from outfits with whom I defaulted. Capital One (I owe them $12,000) want to give me more money so I can buy their money at 16.99% (23.99% if I pay late).

    Are they for real?

  8. @Carie,

    Same here. I even got a very, very stern e-mail from Sallie Mae for my kid’s student loan (contracted under my name) threatening to take “measures” (I swear: they wrote: We will take appropriate measures.”).

    I read it and laugh so hard!!! What are they gona do? Cut my right hand, like in certain countries? Take away my 1999 car? Put a lien on a house I quit paying over 2 years ago? Seize my empty bank account?

    Ri-di-cu-lous! And pretty darn funny too.

  9. Right on, enraged…I stopped paying everything long ago…we are not “deadbeats”, but “strategic defaulters”—and our “strategy” is to not encourage or give our money to criminals ANYMORE…WE ARE DONE WITH THEM.

  10. I can’t say it any better than that. It’s been repeated over and over. What are you waiting for?

    If each one of us puts this on his/her facebook page and forwards it to 10 people, we can resolve this damn situation once and for all. What more can we say???????????

  11. Carie,

    He’r right. It was gov. from the get go. Paulson’s bailouts were the gov. Obama’s add’l bailouts were the gov. Biden’s and Schneiderman’s neutering are gov.

    And it’s going to be gov.’s downfall. Because once you uproot gov., banks can’t hold up.

  12. MATT WEIDNER | US BANK VS MILLS – THE BANKS WANT TO TAKE MY APPEAL TO THE FLORIDA SUPREME COURT!
    Posted by 4closureFraud on June 18, 2012 · Leave a Comment

    THE BANKS WANT TO TAKE MY APPEAL TO THE FLORIDA SUPREME COURT!
    The Florida Supreme Court said, “The Plaintiff Shall Verify” so that we can hold someone accountable when they are not truthful.
    The trial court affirmed, “The Plaintiff Shall Verify” .
    Florida’s Second DCA affirmed, “The Plaintiff Shall Verify”.
    But the Plaintiffs do not want to verify. They do not want to be held accountable. And, as I’m learning more and more, part of the reason is that THEY CANNOT HONESTLY AND ACCURATELY VERIFY THE COMPLAINTS.
    And that is a big part of the problem here…..the Principals are hiding behind their Agents, like thugs hiding in the alley while they send the footsoldiers out into the fight. And at the end of the day, what this really comes down to is,
    THE WIZARD BEHIND THE CURTAIN….IT’S THE FEDERAL GOVERNMENT BEHIND MOST OF THIS…

  13. ToLLe,

    Lately, I find myself quoting The Twilight Zone often. Those 20 minutes bits had some pretty good insights. Well, we’re in it and people are as dumb as before.

    Sheesh! Any good crop circle today?

  14. The idea that borrowers bought more house than they could afford and that it’s their fault is alive and well in both the GOP camp and the populace at large. Probably 20% or more of comments on mainstream media accounts of foreclosure still berate the borrowers for buying too much house, or they bring up the tired “using their house as an ATM” attack that is still as popular as ever. A favorite of both of these groups is also, “You signed a contract, didn’t you?” Lost on both camps, whether through ignorance or simply a desire to look the other way, is the fact that once simple debit/credit card agreements now contain 65 pages of Ancient Greek-like legalese sure to trip up even a crooked congressman.

    Both of these camps, the congressional reps and the yahoos spouting their groundless opinions seem to overlook the multi-million dollar underwriting departments that were evidently conned many millions of times, repeatedly – abused by the countless deadbeats across the land. Whatever is a poor banker to do?

    In a must read excerpt from his book The Price Of Inequality Joseph Stiglitz writes:

    Markets can sometimes create their own reality. If there is widespread belief that markets are efficient and that government regulations only interfere with efficiency, then it is more likely that government will strip away regulations, and this will affect how markets actually behave. In the most recent crisis what followed from deregulation was far from efficient, but even here a battle of interpretation rages. Members of the Right tried to blame the seeming market failures on government; in their mind the government effort to push people with low incomes into homeownership was the source of the problem. Widespread as this belief has become in conservative circles, virtually all serious attempts to evaluate the evidence have concluded that there is little merit in this view. But the little merit that it had was enough to convince those who believed that markets could do no evil and governments could do no good that their views were valid, another example of “confirmatory bias.”

    The rest of the excerpt goes on to validate what javagold said concerning frogs feeling the heat. When it comes to these banksters and their friends on the Hill selling out the entire world for their place at the trough, I’m reminded of the classic Twilight Zone episode where an alien comes to earth with a document describing their agenda towards humankind. Earthlings are impressed with their new galactic neighbor and his treatise entitled “To Serve Man”, until it’s too late to realize that it’s not about befriending, it’s a recipe.

    Stiglitz:

    http://www.salon.com/2012/06/14/weve_been_brainwashed/singleton/

  15. @Gwenn,

    “…And the investors get paid off what was owed them, why are there foreclosures at all?”

    Gwenn, the settlement (about which Beau Biden was speaking yesterday on C-span in an effort to push Obama’s candidature on poor schlemiels about to lose it all) is not coming out of banks’ pockets. Whatever cash (les than 5 billions, if i recall) was taken out of investors’ money placed in trusts with them.

    Investors are like homeowners: they can be squeezed out of every penny they have (had). And when that happens, they say: “Thank you. I want more.” It’s going to blow.

  16. here’s my question and I do real estate as well as work in this area. If there are settlements with the AG’s and the banks and the investors. And the investors get paid off what was owed them, why are there foreclosures at all? If the investors are paid, the notes should be paid off. You don’t get to collect twice on the notes so the investors are not getting the money. So are the banks foreclosing when they have no right to do so. If the investor was paid the only reason to clear the properties is to try to collect monies to offset what was paid to the investors. Is this allowable under these settlements with the investors–if so why???

  17. Foreclosures Up Again: Who Will Turn The Switch Off?

    Well, and for those who wonder, we already know who won’t. Obama won’t. Romney won’t. Congress won’t. Schneiderman and Beau Biden have been neutered and Bill Black is nearing the heart attack from yelling so loud.

    It’s up to us, guys. And as long as people keep money flowing into government and banks, nothing will change. Closed your bank account yet? Stopped paying your bills, yet? Still too much to lose to take action? Well, then. Wait a little longer, until things have gone so far that it takes a full blown revolution.

  18. QWRs & RICO are an effective when used before default, they bring the banks to a complete halt. This I know to be true, …. If only.. If only.. homeowners not in default would check this out …. before the stroke of that pen ….. then HAMP 2 would fail without any doubt. Just sayin … I’m not a Lawyer (I never technically went to law school) but Knowledge and Experience says it all. Blessings come in many sizes both big and small.

  19. Kris said: “Just me, looks like a transfer of real property on a GRAND scale.”

    Not just you–this is the descent into naked, undisguised feudalism.

  20. @Java,

    It is. It worries me that Americans are waiting so long to blow their top. Europeans blow it right off the bat and things get resolved fast. Americans wait and wait and wait and by the time they do, it becomes so frickin’ bloody!!!

  21. In the same line of thought… Why buy the cow if the milk is free?

    http://www.huffingtonpost.com/2012/06/18/big-banks-harp-20_n_1605307.html

    Big Banks Could Rake In Up To $12 Billion Because Of HARP 2.0

    “A government program meant to help struggling homeowners will at minimum help some struggling banks.

    Big banks could rake in as much as $12 billion in revenue by refinancing the mortgages of homeowners that owe more on their homes than they are worth, according to an analysis by Nomura, a Japanese bank, cited by the Wall Street Journal”.

  22. Having read thousands of property deeds and files the “more house than one could afford” is gone. The foreclosure data I have personally viewed ranges from $18,000-$535,000 homes, some owned since 1975…making these foreclosures second mortgages (loss of income or sickness), ages 45-84 y/o and first mortgages with equity and more than 20% down…how’s that for ACTUAL figures. The more house than one can afford….gone, now the middle class and low-income earners…all related to external factors out of one’s control. Check the data, the harsh reality is stunning.

    Just me, looks like a transfer of real property on a GRAND scale.

  23. With food stamps, living rent free and 99 weeks of UE checks most people still do not realize they are frogs in a pot. But the temperature is now boiling.

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