The Real Estate business is doomed for a very, very, very long time.
Banks lending today fully aware that tomorrow the loan is 5,10-50% underwater is a crime in itself.
Naked Capitalism-
“Shadow inventory,” the number of homes that are either in foreclosure or are likely to end up in foreclosure, creates substantial but hidden pressure on housing prices and potential losses to banks and investors. This is a critical figure for policymakers and financial services industry executives, since if the number is manageable, that means waiting for the market to digest the overhang might not be such a terrible option. But if shadow inventory is large, housing prices have a good bit further to go before they hit bottom, which has dire consequences for communities, homeowners, and the broader economy.
Yet estimates of shadow inventory, and even the definition of what constitutes shadow inventory property, vary widely. For example, the Wall Street Journal published a Nov. 11, 2011 article, “How Many Homes Are In Trouble?” where values varied from 1.6 million (CoreLogic), to “about 3 million” (Barclays Capital), to 4 million (LPS Applied Analytic), to 4.3 million (Capital Economics), to LPS Applied Analytics, to between 8.2 million and 10.3 million (Laurie Goodman, Amherst Securities).
Why do these numbers vary so much? Even though CoreLogic is generally considered to have one of the best databases of loans, its estimates of loan performance and odds of default are based on credit scores, which is a badly lagging indicator. Laurie Goodman is seen by many as having the most carefully though out model, even though industry insiders are keen to attack her bearsish-looking forecast.
At Naked Capitalism Michael Olenick detailed how easy it is to spot the industrialization of document creation and execution–really, evidence manufacture–by looking at where people signing the documents are. Based on his analysis of Palm Beach County records, there’s factory floors in:
“35 different states, and 101 different counties…
“…California overall notarized 815 Florida assignments, 32.6% of the total. Florida, which you’d expect, came next with 610 assignments, or 24.4% of the total, followed by Minnesota (9.3%), Texas (7.3%), Ohio (4.8%), Georgia (4.5%), Louisiana (2.8%), and Nebraska (2.6%). All other states had less than 2%.
Banks and their vendors like LPS run these knock-off document factories, producing documents that are just like those cheap purses with fake luxury labels sold in Chinatown. That is, the documents look right but couldn’t be more false.
American Banker did an outstanding, superb job with this article. Please read.
American Banker-
Some of the largest mortgage servicers are still fabricating documents that should have been signed years ago and submitting them as evidence to foreclose on homeowners.
The practice continues nearly a year after the companies were caught cutting corners in the robo-signing scandal and about six months after the industry began negotiating a settlement with state attorneys general investigating loan-servicing abuses.
Several dozen documents reviewed by American Banker show that as recently as August some of the largest U.S. banks, including Bank of America Corp., Wells Fargo & Co., Ally Financial Inc., and OneWest Financial Inc., were essentially backdating paperwork necessary to support their right to foreclose.
The evidence on the docket as well as the Notice of Mediation prove definitively that Deutsche Bank, the Law Offices of David J. Stern, Mr- Stern himself as lead attorney of the Law Offices of David J. Stern, and/or Florida Mediation Group, Inc. Intentionally and knowingly violated a court order, a crime defined by FL Crim. Stat. Sec. 3.840, Indirect Criminal- Contempt of Judge Roger Colton’s 4/1/2010 Order for Mediation to occur within 60 days at the plaintiff’s expense.
Recent Comments