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A group of state and federal judges presiding over foreclosures are wiping away borrowers' mortgage debt, invalidating foreclosure sales and even barring some foreclosures outright. The decisions in recent months by a handful of judges in states including Massachusetts, New York and Texas mark a new phase in the judiciary's battle to stem the rising tide of foreclosures by punishing mortgage companies for paperwork mistakes and alleged mistreatment of borrowers. The number of judges taking such action remains small, and most foreclosures go through without a challenge. But the growing number of rulings against lenders' claims is raising questions among...

Our economy is about to relapse into the disease that sent us into the Great Depression: Part Deux. Subprime loans caused the initial illness. Option-ARMs will cause the relapse. In the first half of the past decade, subprime loans were king. They were cheap and easy to get approved. Along with the subprime boom came subprime adjustable-rate mortgages (ARMs), which were equally easy to afford…for a while. Of course, the “A” and the “R” in ARM meant that the interest rate borrowers pay changes, or resets. The majority of these resets occurred between the summer of 2007 and the summer...

The Second Wave Is Already Ashore By Jim Nelson 12/17/09 Baltimore, Maryland – The second wave of ARM resets and foreclosures might come sooner than you think. According to Whitney Tilson and Glenn Tongue of T2 Partners, the experts on this subject, about 80% of option ARMs are negatively amortizing. Meaning these so-called top-tier borrowers are heading further into the hole. Once their rates reset, they could be in serious trouble. And that could be happening very soon: The chart above, which should look familiar, shows the two peaks in this long-term housing conundrum. The first mountain is comprised of...

"Judge indicates lender cannot be responsible for 'deterioration of inner city'" "A federal judge has suggested that he might "cut down" an unprecedented lawsuit filed by Baltimore city against Wells Fargo. The city says the mortgage giant engaged in illegal "reverse redlining" -- targeting black neighborhoods for bad loans that resulted in mass foreclosures. U.S. District Judge J. Frederick Motz heard arguments Monday on a motion to dismiss the complaint. Wells Fargo's attorneys say the city can't prove that the company's actions caused widespread urban blight. Motz suggested that it's not plausible to claim that Wells Fargo is responsible for...

WASHINGTON – Just over 31,000 homeowners have received permanent loan modifications under the Obama administration's mortgage relief plan, a big setback for the government's embattled effort to stem the foreclosure crisis. Lenders blame the low success rate — only about 4 percent of the nearly 760,000 borrowers who have signed up — on borrowers who don't return the necessary paperwork to complete the process. Bank of America Corp., for example, had only completed 98 modifications at the end of November, far fewer than several smaller rivals. GMAC Mortgage completed 7,100, the most of any lender in the program, which was...

Most look to loan type and equity position as two of the most important factors when forecasting loan default. In fact, I believe that epidemic negative-equity is the overarching reason that the default, foreclosure and housing crisis remains in the early innings. But…negative-equity with a caveat. While negative equity is a threat in and of itself, being in an over-leveraged household debt position is the true default catalyst for most in a negative-equity position. And being over-leveraged is also the primary default catalyst for those is a positive equity position. Being in a negative-equity position with lots of top line...

Underwater? Maybe You Should Walk Away From Your Mortgage? By Ilyce Glink | Nov 30, 2009 | 7 Comments According to the latest figures, some 23 percent of Americans are underwater with their mortgage. That means their home is worth less than the amount they owe to their lender.If you have a job, and can afford your payments, being underwater may not cause anything other than a really bad headache. But if you’ve lost your job, you’re probably running through all of your available cash plus anything you can beg, borrow and perhaps steal in order to keep making your...

WASHINGTON (AP) -- With the foreclosure crisis showing no signs of relenting, the Obama administration plans to expand a program aimed at helping people remain in their homes. The goal of the announcement, expected Monday, is to increase the rate at which troubled home loans are converted into new loans with lower monthly payments, Under a $75 billion Treasury program, companies that agree to lower payments for troubled borrowers collect $1,000 initially from the government for each loan, followed by $1,000 annually for up to three years. The program has come under heavy criticism for failing to do enough to...

WASHINGTON — The foreclosure crisis likely will persist well into next year as high unemployment pushes more people out of homes, pulls down housing prices and raises concerns about the broader economic recovery. The latest evidence was a report Thursday that a rising proportion of fixed-rate home loans made to people with good credit are sinking into foreclosure. That’s a shift from last year, when riskier subprime loans drove the housing crisis. The report from the Mortgage Bankers Association also found that 14 percent of homeowners with a mortgage were either behind on payments or in foreclosure at the end...

The housing market dropped off a cliff in October, as the original Nov. 30th expiration date for the first-time home buyers tax credit approached, according to the Housing Market Monitor of the Center for Economic and Policy Research. Add to that the 6.25% 60-day delinquency rate in the third quarter -- 58% above the level of one year ago -- and you've got a recipe for housing disaster: more foreclosures, slower sales and ultimately a greater decline in house prices. "With unemployment virtually certain to remain high well into next year, there is little prospect for any sizable drop in...

Eight months ago, the Obama administration launched a plan to help troubled homeowners avoid foreclosure by providing $75 billion in taxpayer funds to banks and mortgage servicers. The money was intended to help three to four million homeowners by lowering their monthly payments, largely by cutting their interest rates. The next day, a Yale economist and a colleague penned a New York Times op-ed arguing for a different approach. Rather than cut interest rates, John D. Geanakoplos and Susan P. Koniak wrote, the government should reduce the overall amount owed on the mortgage -- the principal. "The plan announced by...

NEW YORK (CNNMoney.com) -- Could the foreclosure plague be ending? Foreclosure filings were down 3% in October, the third consecutive month-over-month dip, according to RealtyTrac, the online seller of foreclosed homes. To be sure, foreclosure rates are still elevated from a year ago: They're up 18% compared with October 2008. But the month-over-month decrease followed a 4% drop in filings during September and a 1% fall in August. "Three consecutive monthly declines is unprecedented for our report, and, on first blush, an indication that the foreclosure tide may be turning," said James Saccacio, RealtyTrac's CEO, in a prepared statement. He...

States Growing Hair On Their PairThe Market TickerTuesday, November 3. 2009 States Growing Hair On Their PairIt's about damn time: Frustrated by the banks’ inability or unwillingness to stop an avalanche of foreclosures, the states are considering lawsuits over the creation and marketing of millions of bad loans as well as the dismal pace of mortgage modifications. Good. As I have repeatedly opined, there is more than enough fertile ground here for lots of lawsuits to spring up and take root. Indeed, let's go down the list of what I believe are the grounds for such suits: * Most of...

Just about everyone has become familiar with America’s foreclosure capitals – metropolitan areas like Las Vegas with the nation’s highest rate of foreclosed properties (1 in 20) or No. 2 Merced, Calif., (1 in 27). But the problem is expanding to new cities. In fact, as the subprime-mortgage crisis eases for some of the top metro areas, like Merced and No. 3 Cape Coral-Fort Myers, Fla., economic pressures are creating new foreclosure capitals. One of them, Reno-Sparks, Nev., broke into the Top 10 foreclosure metros in the third quarter, according to a RealtyTrac report released Thursday. And others are gaining...

With the US government now having taken over the functions of such pristine subprime lenders as New Century, with the provision that it not only is not checking borrowers' credit scores, income potential, or other "facts" that the mortgage lenders at least pretended to care about, but also giving away massive incentives to promote housing bubble V2, it was only a matter of time before the taxpayer's balance sheet would start looking like an Angelo Mozilo wet dream. Today, Freddie Mac released its September Monthly Volume Summary and, as expected, it is beginning to look just like the subprime debacle...

Despite some tentative signs of recovery, the U.S. housing market remains vulnerable to further price drops—especially in areas where large numbers of mortgages are headed toward foreclosure over the next few years. The Wall Street Journal's quarterly survey of housing-market data in 28 major metro areas shows sharp drops in the number of homes listed for sale across the country. But the potential supply of homes is far larger because banks are likely to acquire significant numbers of foreclosed homes in some areas, notably Las Vegas, Atlanta, Detroit, Phoenix, Miami and other parts of Florida, and Sacramento, Calif., over the...

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...

Thousands At Cow Palace Seeking Mortgage HelpA Carolyn Said, Chronicle Staff Writer Saturday, October 17, 2009 Armed with sleeping bags or folding chairs, many spent a chilly night on the pavement outside the Daly City event center. "I'm just trying to keep my house," said Gerasim Karapetian of Yorba Linda (Orange County), as he waited in the bleachers to meet with a loan counselor. "I drove eight hours, got here at 2 a.m., and waited outside all night. The line wrapped around the whole parking lot." He was among more than 4,000 people from around California and neighboring states who...

Foreclosures hit another all-time high in Q3 with almost 938,000 homeowners filing, according to Realty Trac. This rose at a substantial 5% clip from Q2. If you're aren't feeling the pain, perhaps you don't live in one of the six states that accounted for 62% of nationwide foreclosures alone: California - down 1.5% Florida - -0.7% Arizona - +5% Nevada - +9.8% Illinois - +13.7% Michigan - +9.5%

A real estate judge is refusing to reverse a landmark ruling that opens the door to voiding tens of thousands of Bay State foreclosures dating as far back as 1989. “The foreclosure sales (in question are) invalid because they failed to meet the requirements of (Massachusetts law),” Land Court Judge Keith Long wrote yesterday in reaffirming a decision he originally reached in March. Long denied a request from Wells Fargo and U.S. Bank to reinstate two Springfield foreclosures he invalidated in March because of flawed paperwork. As the Herald first reported in June, the case centers on documents that banks...

The number of Americans receiving a foreclosure notice in the third quarter continued to grow, according to a new report, despite government programs intended to attack the problem.

Mortgage Loan Modification is the only solution to save your home and stop foreclosure. As of last month, lenders had sent out more than 571,000 offers to reduce borrowers' monthly payments, the Treasury Department said Wednesday. Treasury says 48 mortgage companies are now involved in the program, up from 38 in July. The companies have requested financial information from almost two-thirds of eligible borrowers and say they are on track to have 500,000 loan modifications in place by Nov. 1. What is Obama's Mortgage Relief Program & How do you qualify?

New data suggest that foreclosures are rising in more expensive housing markets. About 30% of foreclosures in June involved homes in the top third of local housing values, up from 16% when the foreclosure crisis began three years ago, according to new data from real-estate Web site Zillow.com. The bottom one-third of housing markets, by home value, now account for 35% of foreclosures, down from 55% in 2006. The report shows that foreclosures, after declining earlier this year, began to accelerate in the late spring and that more expensive homes have more recently accounted for a growing share of all...

The Congressional Oversight Panel's October oversight report, "An Assessment of Foreclosure Mitigation Efforts after Six Months," expresses concern about the limited scope and scale of the Making Home Affordable program and questions whether Treasury's strategy will lead to permanent mortgage modifications for many homeowners. Rising unemployment, weak home prices, and impending mortgage rate resets still threaten to cast millions of Americans out of their homes, with devastating effects on families, local communities, and the broader economy. One in eight mortgages is currently in foreclosure or default, and this crisis is estimated to produce 10 to 12 million foreclosures. While Treasury...

WASHINGTON – The Obama administration's effort to help homeowners avoid foreclosure may not achieve its goal of helping 3 million to 4 million borrowers and may simply delay mortgage defaults for many, a government watchdog group says. The Congressional Oversight Panel, charged with making regular assessments of the $700 billion financial rescue fund enacted last year, said the Treasury Department should consider whether to improve the current $50 billion program or adopt new programs to meet an expected rise in foreclosures fed by increased unemployment. The panel's report is scheduled to be made public Friday. It comes a day after...

Troubled homeowners may be losing a major lifeline: so-called short sales. To get bad loans off their books and spur home sales, lenders have been forgiving the difference between the outstanding mortgage balance and the purchase price. Banks were never eager participants in short sales, and now financial firms—even those that can offload losses to the government—are balking at such transactions. Some lenders are forcing the sellers to pay extra money at closing. Others want a promissory note for part of the amount due. The situation could be a setback for the already wobbly housing recovery. A record one-third of...

Millions of adjustable-rate mortgages are going to reset in the coming years, possibly to higher interest rates, creating the prospect of a new round of foreclosures.

WASHINGTON — The federal government is engaged in a massive mortgage modification program that's on track to send billions in tax dollars to many of the very companies that judges or regulators have cited in recent years for abusive mortgage practices. The firms, called mortgage servicers, have been cited for badgering, manipulating or lying to their customers; sticking them with bogus fees, or improperly foreclosing on them. Mortgage servicers are the middlemen between homeowners and the investors that hold their mortgages, collecting homeowners' checks and disbursing payments for the mortgages, property tax and insurance. They're a necessary player for any...

SEPTEMBER 30, 2009 Foreclosures, Delinquencies Continue to Rise By JESSICA HOLZER WASHINGTON -- Lenders stepped up efforts to help strapped borrowers during the second quarter of 2009, but their actions weren't enough to stem rising mortgage delinquencies and foreclosures, a federal banking regulator reported Wednesday. Since the first quarter of 2009, actions to rescue borrowers from foreclosure increased nearly 75%, as lenders ramped up their participation in the government's loan modification program, the Office of the Comptroller of the Currency said. Such actions, which totaled 440,000 during the quarter, once again climbed more quickly than new foreclosures. However, the poor...

Famed for building homes for the poor from scratch, Habitat for Humanity sees a silver lining to thousands of foreclosed homes available for a pittance. ___ Shanta Brown, a nursing assistant in Charlotte, N.C., walked through her soon-to-be home in August, pointing out favorite features — the living room's vaulted ceiling, two full baths and new black countertops she chose for durability. In a few minutes, Brown would stand outside the front door and cut a ribbon, dedicating the first house in Habitat for Humanity Charlotte's ambitious new effort to rehab homes in neighborhoods decimated by foreclosures. Across the country,...

Americans have tamed their wanderlust during this recession, according to the latest data released by the U.S. Census Bureau. Only about 2.4% of Americans moved from state to state in 2008, down from 2.5% the previous year. "The mobility rate is lower than it has been in years," said Robert Lang, a demographer with Virginia Tech University. "There's a recession and a housing bust. People can't sell their homes in California and move to Las Vegas or sell their condo in Florida and move to North Carolina." "People are hunkering down, trying to hold on to what they have," added...

Frances Louis last week lugged her belongings into an empty and unlocked three-story townhouse in Roxbury that she does not own nor rent, intent on taking over the bank-owned property and making a statement. She claims to have a “moral’’ right to live in the newly renovated building on Cobden Street, a four-bedroom unit seized in June by a Wisconsin bank because the owner failed to make mortgage payments. It’s one of many foreclosed and vacant properties in the neighborhood. “Now is the time for banks to step up and help families instead of putting them out,’’ said Louis, 41,...

Could half of all U.S. mortgages -- some 60 million -- be protected from foreclosure? That's how some are interpreting a ruling from the Kansas Supreme Court. Ellen Brown/Huffington Post: A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that...

"Some things are worth fighting for, and I think your family and your home are two of those things." -Baltimore ACORN Foreclosure Fighters Co-Chair Louis Beverly The foreclosure crisis lies at the very heart of the broader economic collapse. The glut of foreclosed properties on the market forced housing prices into a tailspin, and banks loaded up with mortgage-backed securities and complex derivatives, unable to value or sell these assets, stopped lending to each other and the credit markets froze up, triggering the broader economic morass. A broad and successful economic recovery is impossible without directly addressing the record foreclosure...

A study shows that people who abruptly and intentionally abandon their mortgages often have high credit scores, in stark contrast with most financially distressed borrowers. Who is more likely to walk away from a house and a mortgage -- a person with super-prime credit scores or someone with lower scores? Research using a massive sample of 24 million individual credit files has found that homeowners with high scores when they apply for a loan are 50% more likely to "strategically default" -- abruptly and intentionally pull the plug and abandon the mortgage -- compared with lower-scoring borrowers. National credit bureau...

The federal government and states are girding themselves for the next foreclosure crisis in the country's housing downturn: payment option adjustable rate mortgages that are beginning to reset. "Payment option ARMs are about to explode," Iowa Attorney General Tom Miller said after a Thursday meeting with members of President Barack Obama's administration to discuss ways to combat mortgage scams. "That's the next round of potential foreclosures in our country," he said.

NEW YORK (Reuters) - U.S. mortgage foreclosure filings in August hovered near July's record high despite broad efforts to keep borrowers in their homes and will probably rise for another year, according to a report released on Thursday. Filings -- including notices of default, auction and bank repossession -- dipped 1 percent last month from July's all-time high and were up 18 percent in August from the same month a year earlier, real estate data firm RealtyTrac said. "The pipeline of early stage foreclosures and delinquent loans is still probably going to overwhelm the system's ability to quickly modify" terms...

Edward and Maria Moller are worried about losing their house — not now, but in 2013. That is when the suburban San Diego schoolteachers will see their mortgage payments jump, most likely beyond their ability to pay. Like millions of buyers during the boom, the Mollers leveraged their way into a house they could not otherwise afford by taking out a loan that required them to make only interest payments at first, putting off payments on the principal for several years.

Treasury: Millions More Foreclosures Coming Official says a strong housing market is crucial for the economy Sept. 9, 2009 WASHINGTON - Only 12 percent of U.S. homeowners eligible for loan modifications under the Obama administration's housing rescue plan have had their mortgages reworked, and millions more foreclosures are coming, the Treasury Department said on Wednesday. A Treasury report showed 360,165 people had their monthly payments reduced through August, up from 235,247 through July, but a senior Treasury official conceded much more must be done to soften the impact of a severe and prolonged housing crisis. Treasury has begun releasing monthly...

Only 12 percent of U.S. homeowners eligible for loan modifications under the Obama administration's housing rescue plan have had their mortgages reworked, and millions more foreclosures are coming, the Treasury Department said on Wednesday. A Treasury report showed 360,165 people had their monthly payments reduced through August, up from 235,247 through July, but a senior Treasury official conceded much more must be done to soften the impact of a severe and prolonged housing crisis.

Every week, the nation’s mightiest banks come to his court seeking to take the homes of New Yorkers who cannot pay their mortgages. And nearly as often, the judge says, they file foreclosure papers speckled with errors. He plucks out one motion and leafs through: a Deutsche Bank representative signed an affidavit claiming to be the vice president of two different banks. His office was in Kansas City, Mo., but the signature was notarized in Texas. And the bank did not even

When it comes to foreclosures, there is no such thing as a "safe state". Even states that did not engage in widespread use of liar loans and other silly mortgage lending practices are struggling with foreclosures. The issue is jobs, and unemployment is rising everywhere. Please consider Foreclosure Woes Spread To Areas Once Thought Safe. Amid record levels of home foreclosures nationwide, there are worrying signs that the foreclosure crisis could be spreading to parts of the country that had previously been relatively unscathed. Last month, for example, RealtyTrac, a private firm that tracks foreclosure data, recorded sharp spikes in...

In the second quarter, the number of homeowners behind on payments or in foreclosure rose along with the jobless rate, with California among states leading the way. Widespread joblessness is causing more Americans to fall behind on their house payments, triggering a new round of foreclosures that some analysts fear could delay the nation's economic recovery. A mortgage trade group reported Thursday that more than 13% of the nation's mortgage holders were delinquent on their mortgages or in the process of having their homes repossessed during the second quarter of this year. That's the highest figure since tracking began...

The recent uptick in home sales, green shoots of new housing starts and rebounding stock market may suggest that the long-awaited turn in the U.S. economy is here.But is this daylight at the end of the tunnel or the beam of an oncoming locomotive of commercial real estate insolvency coming down the tracks on a collision course with a shaky economy? Commercial real estate (CRE), valued at $3.5 trillion in the U.S., has experienced a 39% decline in prices from the peak only two years ago, according to the MIT Center for Real Estate. This drop is greater than the...

<p>The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 9.24 percent of all loans outstanding as of the end of the second quarter of 2009, up 12 basis points from the first quarter of 2009, and up 283 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate increased 64 basis points from 8.22 percent in the first quarter of 2009 to 8.86 percent this quarter, the Mortgage Bankers Association is reporting.</p>

Mortgage lenders say the flood of foreclosures has not yet crested. Highwater mark should come this fall.

Foreclosure rates in the U.S. remain near record highs. More than 13% of American homeowners with a mortgage are either behind on their payments or in foreclosure. The latest report from the Mortgage Bankers Association, released today, shows the percentage of loans that entered the foreclosure process dipped slightly to 1.36%, down from an all-time high of 1.37% in the first quarter. However, that number may soon rise again as mortgage delinquency rates continued to climb in the second quarter. That news is no surprise to Karen Weaver of Deutsche Bank. She startled everyone a few weeks ago when she...

The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 9.24 percent of all loans outstanding as of the end of the second quarter of 2009, up 12 basis points from the first quarter of 2009, and up 283 basis points from one year ago, according to the Mortgage Bankers Association's (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate increased 64 basis points from 8.22 percent in the first quarter of 2009 to 8.86 percent this quarter.

Debt problems are hurting commercial real estate. And commercial real estate is hurting banks. So we’re in a vicious cycle. That’s what this Fox Business report looks at. This report calls commercial real estate "the next financial tsunami" and says that almost every deal financed between 2005 and 2008 will not be able to be re-financed without additional equity.

A summary of Second Quarter 2009 Negative Equity Data from First American CoreLogic shows that Nearly One-Third Of All Mortgages Are Underwater. • More than 15.2 million U.S. mortgages, or 32.2 percent of all mortgaged properties, were in negative equity position as of June 30, 2009 according to newly released data from First American CoreLogic. As of June 2009, there were an additional 2.5 million mortgaged properties that were approaching negative equity. Negative equity and near negative equity mortgages combined account for nearly 38 percent of all residential properties with a mortgage nationwide.