Shadow Foreclosures: Over 500,000 Az Homeowners Underwater

Yes, we can help at livinglies, but the numbers are so high that there is no way we have the resources to help everyone. Lawyers, accountants, analysts and others should be seeing this as a major opportunity to do well for themselves and for the owners of these homes by challenging the rights of the those collectors who are taking their money now, or demanding payment or threatening foreclosure. Arizona lawyers have been slow on the uptake here and in so doing are potentially setting themselves up for future malpractice claims for anyone, whether they aid or not, who received advice from the lawyer that was not based upon the realities of the securitization scam.

Call 520-405-1688, where you can get help in documenting the fraud, help in drafting the documents, and help in finding a lawyer. If you are a lawyer involved in foreclosure defense, bankruptcy or family law, you need to to start studying the real facts and the strategies that get traction in court.

We are planning a possible new Arizona seminar for lawyers, paralegals and sophisticated investors or homeowners. But we will only schedule it if we get enough calls to indicate that the workshop will at least pay for itself. It is a full day of information, strategy, role-playing and tactics to use in the court room.

Editor’s Analysis: Despite loosening standards for principal reductions and modifications, the foreclosure activity across the country is increasing or about to increase due to many factors.

The bizarre reason why the titans of Wall Street want these homes underwater combined with the miscalculation of the real number does not bode well for the housing market nor the economy. With median income now reported by the Wall Street Journal at 1995 levels, and the direct correlation between median income and housing prices you only need a good memory or a computer to see the level of housing prices in 1995 — which is currently where we are headed. As the situation gets worse, the foreclosure and housing problem will become a disaster beyond the proportions seen today.

Wall Street NEEDS foreclosures — not modifications, principal write-downs or settlements. The reason is simple. They have already received trillions in bailouts from the Federal Government. All of that was predicated upon the homes going into foreclosure. If the loans turn out to be capable of performing, many of those trillion of dollars ( generally reported at $17 trillion, which is more than the total principal loaned out to all borrowers during the meltdown period), the mega banks could be facing trillions of  dollars in liability as the demands are properly made for payback. The banks should not be allowed to collect the money and the houses too. Neither should they be allowed to collect the bailout money and keep the mortgages.

The “underwater” calculation is far off the mark. If selling expenses and discounts are taken into consideration, the value of homes used in that calculation is at least 10% less than what is used in the underwater calculation, which would increase the number of underwater homes by at least 15% bringing the Arizona total to nearly 600,000 people who know now that they will never see valuation even coming close to the amount owed. The prospect for strategic defaults in Arizona and elsewhere is staggering —- totaling more than 10 million homes  — or nearly twice the number of foreclosures already “completed”, albeit defectively.

As stated in the article below there is, as we have been saying for years, a huge difference between home prices and home values. Home prices can be pushed up or down based upon external factors In this case it was a flood of what looked like cheap money that is now apparent was neither cheap nor even money (because the named lender never made the loan). Home values and home prices should over the long run track each other given no manipulation of the marketplace which is exactly what Wall Street did. Home values, based upon the Case-Schiller index and thousands of other economists are based upon one simple variable — median income. Median income is now at the lowest point since 1995. That means home values are, after selling expenses and discounts, less than 90% of 1995 prices.

It is simply inevitable that people will take the hit on their credit and walk away from the homes rather than pay $200,000 for on-existent equity and that is exactly what Wall Street is counting on, forcing through its manipulation of government policy and spinning to the public media. If those homes do not go into foreclosure the mega banks’ scam will reveal itself, the assets on their balance sheet will vanish because they never existed anyway and the banks will fall. Whether they are too big to fail or not, they will fail — unless foreclosures spread out across the land.

by Kristena Hansen, http://www.bizjournals.com

Roughly 40 percent of all mortgaged homes in Arizona were under water during the second quarter of 2012, the third-highest negative equity rate in the nation, according to a report released Wednesday by CoreLogic Inc.

In raw numbers, that translates to about 521,600 homeowners statewide being under water for the quarter out of roughly 1.31 million total mortgaged homes, the report said.

Arizona’s negative equity rate was much higher than the national average of 22.3 percent (10.8 million homes) of all mortgaged homes that were underwater during the same period. That nationwide figure was also a gradual improvement from the first quarter’s 23.7 percent negative equity (11.4 million homes).

CALCULATING NEGATIVE EQUITY

Negative equity, or being under water, refers to homeowners who owe more on their mortgages than their home’s present estimated value. CoreLogic determines negative equity rates by the number of underwater homeowners versus all residential properties in a certain area with an outstanding mortgage.

CoreLogic experts say the improving negative equity landscape nationwide is largely due to the recent rebound in home prices, dwindling sales of lender-owned properties and low inventory of existing homes.

Home prices and home values, however, are distinctly different. Prices represent how much homes actually sell for, while home values are only an estimate and are therefore much harder to determine.

Michael Orr, a real estate expert at Arizona State University, said home value estimates will vary widely depending on who is making the assessment. That makes it tricky to hone in on best practices for calculating negative equity, he said.

Sam Khater, deputy chief economist for CoreLogic, explained how his firm makes its determinations.

5 Responses

  1. Carrie .. after all this time you still dont get it. They can not give Clear Title! That is the Problem! If they had the authority to file a Satisfaction of Mortgage we Wouldnt be in this Mess! You can not fix the Title without A Court order Period! Let me repeat that …. You can not fix the Title wothout a Court Order! ! YOU CAN NOT FIX THE TITLE OR CLEAR THE TITLE WITHOUT A COURT ORDER!

  2. @AZ: California Land Claims Act is implemented nationwide like a terminal cancer: http://www.pbs.org/kpbs/theborder/history/timeline/7.html

  3. @MIke

    Nothing left in my AZ neighborhood, it is one big fat foreclosure.

  4. “…Alberto Del Rio, a life insurance agent, is struggling to keep the Bernal house his parents bought in 1973.

    “If it wasn’t for the members of Occupy Bernal, I would not have known where to go,” he said. “They came to my house and told me, ‘We want to save your house.’ ”

    The group and Donaldson have gotten a foreclosure auction on his home postponed twice, while he continues to seek a loan modification, he said…”

    Read more: http://www.sfgate.com/realestate/article/Occupy-Bernal-Petaluma-zero-in-on-foreclosures-3059384.php#ixzz26NkGFD2F

    MORE “LOAN MOD” BS…

    IT DOESNT FIX THE MESS OR GIVE THEM CLEAR TITLE—JUST TEMPORARY HOUSING—IN THEIR OWN HOME…

  5. Arizona!!!!
    Start coming together in your neighborhoods as groups of homeowners to challenge your banks.
    We are doing just that in San Francisco Ca and getting results.
    Google occupy bernal in san francisco and look at the results we are getting.
    We have saved all the home of the members in our group, auctions evictions, etc.
    We even got people back into their homes after the house was sold at auction
    We stage protests at the banks offices, exectutives homes, internet is a wonderful tool to find out who is connected to these bankers, you can stage protests blast your banks execs with phone calls and emails, get some media behind you like we have, and believe me, it works
    Contact occupy bernal in san francisco if you would like a template on getting your groups together.
    You better fight before its too late and all the foreclsoures happen
    They will not take your home if you come together in groups and fight them

Leave a Reply

%d bloggers like this: