Financial News

[Balta1701]

Yes, but as I just said, its good that the courts and auditors and what not are now forcing the banks to prove it and do it right.

I haven't gotten the impression that the courts are forcing the banks to do that at all. A handful of AG's are trying, but they're so, so, so, so, so late to the game here.

[NorthSideSox72]

I haven't gotten the impression that the courts are forcing the banks to do that at all. A handful of AG's are trying, but they're so, so, so, so, so late to the game here.

I don't remember saying the timing was good. Also, you are dismisisng the fact that this was not such a big issue before, because the volume of foreclosures was so much lower.

 

And lots of people have gotten on the banks about this stuff, which you know because you've pointed them out: judges, AG's, auction companies, county sherriffs, mortgage holders, REO's, etc. That's a lot of pressure, and its a good thing.

 

[Balta1701]

And lots of people have gotten on the banks about this stuff, which you know because you've pointed them out: judges, AG's, auction companies, county sherriffs, mortgage holders, REO's, etc. That's a lot of pressure, and its a good thing.

I've been impressed by how little effect that pressure has had.

[NorthSideSox72]

I've been impressed by how little effect that pressure has had.

Do you actually read the news? Have you not seen all these lenders hard-halt their proceedings, then start cranking again much more slowly? Have you not see all the states and localities putting new requirements out there?

 

[southsider2k5]

Do you actually read the news? Have you not seen all these lenders hard-halt their proceedings, then start cranking again much more slowly? Have you not see all the states and localities putting new requirements out there?

 

How many states completely halted foreclosures?

[NorthSideSox72]

How many states completely halted foreclosures?

I get the impression that the only action acceptable to Balta would be to halt all foreclosures nationally and permanently.

 

Look, its not that I am not symathetic to people losing their homes. I have no doubt that experience would be terrible. But if you borrow money and you can't pay it back, the lender has to have a remedy to cut their losses. If they don't the entire system breaks down, and that's terrible for everyone.

 

[Balta1701]

I get the impression that the only action acceptable to Balta would be to halt all foreclosures nationally and permanently.

 

Look, its not that I am not symathetic to people losing their homes. I have no doubt that experience would be terrible. But if you borrow money and you can't pay it back, the lender has to have a remedy to cut their losses. If they don't the entire system breaks down, and that's terrible for everyone.

Well, I'd say it's acceptable to stop illegal foreclosures, how's that?

 

You don't think that the "foreclosure pauses" were anything but window dressing? BofA for example paused foreclosures for about 2 weeks and re-processed a couple hundred thousand "questionable" documents in that time? They've had years to sort out these documents, but a short pause and they worked everything out?

 

I also haven't seen anywhere that they've actually "slowed them down", could you offer some details on that?

[StrangeSox]

My friend works for a company that issues foreclosure notices (among other things like summons), and they have definitely slowed down the last few weeks.

[kapkomet]

My friend works for a company that issues foreclosure notices (among other things like summons), and they have definitely slowed down the last few weeks.

 

 

Because of the stopping initiated by the states?

[StrangeSox]

Because of the stopping initiated by the states?

Not sure, just know that a lot of banks have stopped the process until next year and are having lawyers review it all. They expect a flood come Jan. 1st.

[Balta1701]

[Texsox]

The whole banking thing has gotten messy. It is very easy, and I believe correct, to say no pay, no home. However, when we got in the business of helping the banks, they lost some of their absolute rights. Now we are brokering deals somewhere inbetween live in the house without paying and the banks taking homes where the homeowner is partially behind. Suchs, but that is the new cards that are being dealt.

 

So what is best for society? Banks with homes and people without? People with "free homes" and banks shuttered? We're trying to find something in the middle, maybe we will. There will be mistakes on both sides, we have to live with that.

[southsider2k5]

The whole banking thing has gotten messy. It is very easy, and I believe correct, to say no pay, no home. However, when we got in the business of helping the banks, they lost some of their absolute rights. Now we are brokering deals somewhere inbetween live in the house without paying and the banks taking homes where the homeowner is partially behind. Suchs, but that is the new cards that are being dealt.

 

So what is best for society? Banks with homes and people without? People with "free homes" and banks shuttered? We're trying to find something in the middle, maybe we will. There will be mistakes on both sides, we have to live with that.

 

Banks haven't had "absolute rights" for about 5 generations now.

[Balta1701]

So what is best for society? Banks with homes and people without? People with "free homes" and banks shuttered? We're trying to find something in the middle, maybe we will. There will be mistakes on both sides, we have to live with that.

I can offer up a couple practical options here. One of them is cram-down; letting a bankruptcy judge rewrite mortgage loans, just like a bankruptcy judge can do with every other type of loan. That way, people get their credit histories destroyed, but they get to keep their homes, the bank loses some off the top of the loan but doesn't lose the entire loan, and neighborhoods are kept somewhat in tact, rather than evacuated by foreclosures.

 

Another option would be allowing a judge the option of, instead of foreclosure, taking people who would be in foreclosure and putting them in a rental situation; turn the bank into a landlord. The people stay in the house, the house stays in use and avoids deterioration, the people aren't thrown out, and the bank continues taking in payments.

[NorthSideSox72]

I can offer up a couple practical options here. One of them is cram-down; letting a bankruptcy judge rewrite mortgage loans, just like a bankruptcy judge can do with every other type of loan. That way, people get their credit histories destroyed, but they get to keep their homes, the bank loses some off the top of the loan but doesn't lose the entire loan, and neighborhoods are kept somewhat in tact, rather than evacuated by foreclosures.

 

Another option would be allowing a judge the option of, instead of foreclosure, taking people who would be in foreclosure and putting them in a rental situation; turn the bank into a landlord. The people stay in the house, the house stays in use and avoids deterioration, the people aren't thrown out, and the bank continues taking in payments.

Allowing for cram downs may be a not bad idea, but there have to be parameters the judges must work within, or you can have judges doing all sorts of inconsistent things.

 

The owner-come-renter idea is problematic on multiple fronts. For one thing, you are forcing banks to become something they aren't, and will be really bad at, which will be bad for everyone involved. For another thing, you just pretty much told the Owner that they can now do whatever they want to with the home with nearly no reprecussions, which will have some bad endings. Also, there is huge potential for abuse by banks here against renters in that scenario.

 

[Balta1701]

The owner-come-renter idea is problematic on multiple fronts. For one thing, you are forcing banks to become something they aren't, and will be really bad at, which will be bad for everyone involved. For another thing, you just pretty much told the Owner that they can now do whatever they want to with the home with nearly no reprecussions, which will have some bad endings. Also, there is huge potential for abuse by banks here against renters in that scenario.

I understand it's problematic. But my counterpoint is...that's already all happening now. There is huge abuse by banks of homeowners happening right now. Banks are becoming landlords right now, they're just doing so with vacant houses rather than full ones. And if I trash my apartment, there are plenty of civil and criminal options available to a landlord that aren't there if the home is vacated and I break into it to strip the copper.

 

It's not a perfect option, but it's still an upgrade over where we are now. Anyway, it has zero chance of passing since the banks would say no, so at best it's an academic exercise.

[NorthSideSox72]

Retail Sales report for October came out this morning. Concensus was for up 0.7%, 0.3% excluding auto. Actual results were 1.4% up, 0.4% excluding auto. Also, September revised up to 0.7%. October YoY was up 7.3%.

 

[Balta1701]

Link

Widespread problems in how U.S. lenders documented foreclosures could spark a wave of legal challenges resulting in massive losses to banks and serious new troubles for the housing market, a federal watchdog warned on Tuesday.

 

The Congressional Oversight Panel, the overseer of the government's Wall Street bailout, in its latest report laid out a range of possible outcomes for the foreclosure paperwork mess that emerged in September.

 

In the best-case scenario, the watchdog said, concerns about the paperwork mess are "overblown" and banks would be able to proceed with foreclosures as soon as invalid court documents were replaced with proper paperwork.

 

But in the worst-case scenario, it warned that banks could face billions of dollars in losses.

In the worst-case scenario, the panel said banks may be unable to prove that they own the mortgage loans they claim to own, legal challenges could call into question the validity of 33 million mortgage loans — many of which were then securitized and sold to investors — and banks could face billions of dollars in unexpected losses.

 

"If such problems were to arise on a large scale, the housing market could experience even greater disruptions than have already occurred, resulting in significant harm to major financial institutions," the 125-page report said. "At present, the reach of these irregularities is unknown."

 

The panel, created to oversee the $700 billion bank rescue approved by Congress in 2008, also said banks could end up losing $52 billion from so-called mortgage put-backs, or loans that were sold to other investors but would have to be bought back due to problems that have turned up.

And 1 more bit:

The panel said Treasury should undertake an investigation into whether paperwork errors could undermine HAMP, and report back to Congress and the public

Yes they absolutely f***ing should be looking into the mess that is HAMP.

[Balta1701]

One bit from the actual report...here's a discussion of how the system may well have set itself up so that foreclosures became cheaper than keeping people in their homes.

Another concern involves how HAMP servicers have been calculating the costs of foreclosure under the program‟s NPV test. Foreclosures carry significant costs leading up to the acquisition of a property‟s title. If, by cutting corners in the foreclosure process, servicers were able to lower the cost of foreclosure artificially, their own internal cost comparison analysis might have differed from the official NPV analysis. In such instances, servicers would have an incentive to lose paperwork or otherwise deny modifications that they would be compelled to make under the program standards.

 

Conversely, foreclosure irregularities could have the perverse effect of encouraging

servicers to modify more loans through HAMP. If foreclosure irregularities lead to additional litigation and delays in foreclosure proceedings, they will increase the costs of foreclosure. Treasury may then update the HAMP NPV model to reflect these new realities. With the costs of foreclosure higher, the NPV model will find more modifications to be NPV-positive, resulting in more HAMP modifications.

[BigSqwert]

Thought I'd see a lot more discussion of GM's IPO in here.

[Balta1701]

Thought I'd see a lot more discussion of GM's IPO in here.

Go back a page or two, we already had that fight.

[NorthSideSox72]

UE claims stay low again at 439k, beating expecations. 4 week moving average now at 443k, part of a 6 week downward trend, and 4 of the past 5 weeks have been below 440k. 425k seems to be the threshold where they start to consider it serious steam in the market, and things seem headed that direction.

 

CB leading indicator index went up 0.5% again in October, just as in September, indicating further growth ahead.

 

Current-loop UE rools shrunk again as people went to the extended segment and weren't replaced as quickly by new ones. That's another good sign.

 

[Balta1701]

Not that anyone should really be surprised, but the House failed to pass a 90-day extension of unemployment benefits a little bit ago. It could come back under different rules in a bit, but getting through the Senate is of course, significantly murkier.

 

Somewhere in the neighborhood of 2 million people will have their unemployment benefits end at right at the end of Christmas, if the Congress takes no action.

[jasonxctf]

Not that anyone should really be surprised, but the House failed to pass a 90-day extension of unemployment benefits a little bit ago. It could come back under different rules in a bit, but getting through the Senate is of course, significantly murkier.

 

Somewhere in the neighborhood of 2 million people will have their unemployment benefits end at right at the end of Christmas, if the Congress takes no action.

 

is this for the 99'ers?

 

If it is, I'll break with my party affiliation and say, let them lose benefits.

 

If you can't find an acceptable job in 2 years, you're not looking hard enough or maybe your standards are a bit too high.

[Balta1701]

is this for the 99'ers?

 

If it is, I'll break with my party affiliation and say, let them lose benefits.

 

If you can't find an acceptable job in 2 years, you're not looking hard enough or maybe your standards are a bit too high.

Yes, this would be for the 99ers.

 

I'll admit, I'm conflicted on this one. Frankly, you're somewhat right on the latter. On the other hand...damnit, there aren't enough jobs open even at cash registers to absorb 2 million+ people right now.