Drop in foreclosures called ‘very scary’

[Joseph Burkeson, CMI]

Drop in foreclosures called ‘very scary’
Lenders’ actions show they think properties are not worth pursuing.

Nobody is sure exactly how many bank walkaways are occurring. For various reasons, they can’t be identified in searches of public real estate and court data without individually pulling case files, experts say.

But nobody questions that they are on the increase.

David Rothstein, a researcher with Policy Matters Ohio, summarized the way they occur like this:

• The lender files a foreclosure, gets the foreclosure judgment in court, takes the property to sheriff’s auction but doesn’t bid on it if no one else does.
• The lender files as above, gets the judgment, sets the sheriff’s auction, then cancels the sale at the last minute.
• The lender files as above but then never requests a sheriff’s auction.
• The lender doesn’t even bother to file foreclosure.

All of these actions leave the foreclosed property in the hands of the original owner who, in many cases, has moved out and is unaware the lender hasn’t taken it.

One indicator of the trend in walkaways is the gap between the number of foreclosure filings by lenders and the number of properties actually sold at sheriff’s auction.

A Dayton Daily News analysis of Montgomery County records found that, through September, foreclosure filings are on a pace this year to decrease by 8 percent. Meanwhile, foreclosed properties sold at sheriff’s sale will be down more than 21 percent. Over the three years an average of 2,500 foreclosure filings have not made it to sale at auction.

Excerpt: http://www.daytondailynews.com/news/...ry-352689.html

[John Onofrey]

Sounds like a new opportunity for the Great American Squatter. Obama should claim credit for this as soon as possible.

[Joseph A. Ferry]

I read Joe's post about 5 times. And I can't make head or tail of this secured lender strategy.

And . . . it's not even after 5 on the right coast!!

[John Onofrey]

Originally Posted by jferry1

I read Joe's post about 5 times. And I can't make head or tail of this secured lender strategy.

And . . . it's not even after 5 on the right coast!!

Write off the bad debt, get bucks from Uncle Sam, no need to screw with expense of selling the place?

[Michael Larson]

Originally Posted by jonofrey

Write off the bad debt, get bucks from Uncle Sam, no need to screw with expense of selling the place?

And hold assets than on paper are worth much more than they are in the real world.

In other words, many of these banks that are doing this are really insolvent but you can't tell because they are not honestly reporting the true value of their assets.

It's illegal but .gov is looking the other way and is therefore complicit.

Welcome to the banana republic of Amerikaa

[Joseph Burkeson, CMI]

Originally Posted by mlarson

And hold assets than on paper are worth much more than they are in the real world.

In other words, many of these banks that are doing this are really insolvent but you can't tell because they are not honestly reporting the true value of their assets.

It's illegal but .gov is looking the other way and is therefore complicit.

Welcome to the banana republic of Amerikaa

It would appear that some things just ain't fixable, not even by government. I guess it would be good to look back to the Great Depression and see how these inconsistencies were handled and how long it took just to get an idea on where we are in the cycle.

[Michael Larson]

Originally Posted by jburkeson1

It would appear that some things just ain't fixable, not even by government. I guess it would be good to look back to the Great Depression and see how these inconsistencies were handled and how long it took just to get an idea on where we are in the cycle.

If we are not a nation of law then we are nothing special.

The laws exist enforcement is AWOL.

There are many win .gov and wall street that belong in jail.

[Joseph Burkeson, CMI]

Originally Posted by mlarson

If we are not a nation of law then we are nothing special.

The laws exist enforcement is AWOL.

There are many win .gov and wall street that belong in jail.

I am not following how banks who refuse to foreclose on a property are breaking the law, can you elaborate?

[Joseph A. Ferry]

Originally Posted by jburkeson1

I am not following how banks who refuse to foreclose on a property are breaking the law, can you elaborate?

I'm still trying to get my head around why they are refusing to foreclose. In the absence of the property's being a Superfund site, I don't get it.

[Michael Larson]

Originally Posted by jburkeson1

I am not following how banks who refuse to foreclose on a property are breaking the law, can you elaborate?

Example:

The bank holds a mortgage on a property for whch $500,000 is still owed.

The owner has not paid his mortgage payment for months.

The bank threatens foreclosure but never proceeds through to the sheriffs sale and the property actually changing ownership.

The bank is able to say it has a $500,000 dollar asset on its books but in reality the current market only gives the property a value of $300,000.

As long as they don't proceed to the sale of the property they naver have to realize the $200,000 actual loss.

Now multiply that by the number of mortgages that many banks hold that are in default and you can see why they are not solvent.

The lie continues and and the regulators, .gov and the politicians look the other way.

[Michael Larson]

Originally Posted by jferry1

I'm still trying to get my head around why they are refusing to foreclose. In the absence of the property's being a Superfund site, I don't get it.

Becaue they would immediately be considered bankrupt themselves. See above example.

[Joseph A. Ferry]

Originally Posted by mlarson

Becaue they would immediately be considered bankrupt themselves. See above example.

Well, that is definitely whistling past the graveyard. Or postponing the inevitable. Choose one of the above.

[Michael Larson]

Originally Posted by jferry1

Well, that is definitely whistling past the graveyard. Or postponing the inevitable. Choose one of the above.

Here is guy specializing in buying beaten up banks.

He's not buying.

[Joseph A. Ferry]

Originally Posted by mlarson

Here is guy specializing in buying beaten up banks.

He's not buying.

That's what's known as fire discipline.

[Joseph A. Ferry]

Originally Posted by mlarson

Here is guy specializing in buying beaten up banks.

He's not buying.

That's what's known as fire discipline.