As the consumers spend those checks now and think it's over...you're garage sale comment could not be more prescient. I wring my hands in delight thinking of the deals yet to come....
Wish the article go in more about what all these agents did to take over the bank and transfer the asset to the new banks. There seems to be a lot of paper trails that someone need to follow and how do they integrate the computer systems and records between the banks that is being taking over and the take over bank. The article is long on the circumstance and short on details...
Today's LA Times has a "foreclosure feature" on a community about an hour north of where I live. Home to many teachers, nurses, cops and firemen, Santa Maria is a bedroom community for those who make life on the over-priced south coast of the county viable. With gas above $4.30 yesterday, it's only a matter of time before absenteeism in crucial positions begins to take a toll on this lifestyle-obsessed community. In with little to lose -- but the house - Los Angeles Times
So just what types of loans were the other 204,000 foreclosures that were neither subprime or prime ARMs? Were these a combination of subprime and prime fixed loans? These non-classified foreclosures are even a bigger number than the subprime and prime ARMs, which hints that some other big trends are afoot.
We've seen several busted leveraged buyouts recently. We haven't heard as much about deals that closed. Are they in trouble?
Werbalowsky: They're under water on day one from a valuation perspective. But that doesn't mean they'll default right away because, from a cash-flow prospective, a lot of these deals have built in enough flexibility that they can survive. People [say], "You won't really have restructurings because you have toggles, you have PIKs, you have resets, you have covenant lights." And I say, "Absolutely, that's all true." But in many cases all that will do is postpone the day of reckoning. A lot of these companies have taken on too much debt because they could. It was absolutely rational for buyout firms to say, "Let's leverage up with every penny we could because we'll need it." You'll see a lot of buyout deals going bad -- even with all the covenant-lite and all the PIKs and toggles, they'll run out of money.
I know of one particular home in Thousand Oaks, CA that stopped paying the mortgage in November '07 and has yet to get an NOD.
That leads me to believe that the banks are so inundated with NODs and foreclosures that they have quite a backlog.
If mortgages that went delinquent in T.O. last year still don't have NODs, I can only assume foreclosures will continue to rise, especially considering how much the home prices have declined there.
I also heard from a local realtor there that with the increase in sales over the last couple of months they've gone from 11 months of supply to 9. Not sure how accurate their information is. Knife catchers comes to mind.
The recent (last night?) changes in how you're delivering your RSS feed are annoying. Instead of getting the full article in my reader (Mozilla Thunderbird) I now get only the first line or two. I need to open the article up in a web browser to see the whole thing.
""Prime ARMs are generally nicer homes, so the garage sales will be getting really good."
Only after they give up hope. The well-off want too much for their stuff. They paid too much, so they want too much. They refuse to come down, get stuck with it, and it ends up at Goodwill.
ichmond Federal Reserve Bank President Jeffrey Lacker said the lending to securities firms that the central bank introduced in March may lay the seeds of further financial crises.
The danger is that the effect of the recent credit extension on the incentives of financial-market participants might induce greater risk taking,'' Lacker said in a speech to the European Economics and Financial Centre in London. Thatin turn could give rise to more frequent crises,'' he said.
Fed Vice Chairman Donald Kohn said today that banks will probably report weak earnings'' andmay likely face the need to further bolster loan-loss reserves,'' in testimony to a hearing at Congress. In a speech last week, he raised the possibility of giving securities dealers permanent access to the Fed, as long as regulators toughen their supervision.
Lacker Says Fed Lending to Investment Banks Risks More Crises
Patiently Waiting I know of a home as well in the same situation. No NOD filed after 10 months of missed payments and no workout has been attemepted. How does a bank hide these?
CR,
Don't know if you saw this on Seeking Alpha or not-http://blog.metro-real-estate.com/?p=504. The guy's got some interesting data on roll rates. His thesis is that the potential loss numbers have been overstated and that the situation is improving. Don't have time right now to study it but you might want to take a look.
A similar situation with someone I know as well.....no payment of mortgage since Dec. '07 and they are renting it out...I bet the rentee has no clue about what is really going on.
Not filing the NOD is how they hide it....banks claim they are inundated with "workout solutions" however that is just code for denying "price discovery"....to put it nicely.
A little OT: XL Capital Assurance is committed to honoring the terms of the financial guarantee it provides to Jefferson County's bondholders," said Edward Hubbard, SCA Executive Vice President and President of XLCA. "The payment we are making supports the County's efforts to resolve its current circumstances."
XLCA insures payment of scheduled debt service on the County's sewer warrants that are backed by a pledge of all the County's net sewer revenues. The County is required under the covenants of the indenture governing the warrants to set sewer rates at a level sufficient to generate net sewer revenues that will allow it to meet all of the County's sewer debts.
SCA Subsidiary XL Capital Assurance Inc. Expects to Make $10.6 Million Payment HAMILTON, Bermuda, June 2
WMT hitting a 52 week high on stimulus check spending. Guess record and increasing foreclosures aren't expected to put a crimp on consumer spending going forward. It's almost like consumers are behaving like hedge funds now - a rapidly deteriorating balance sheet leads to increasingly reckless behavior - spend that windfall and run up some more credit card debt to boot.
Prime ARM garage sales? Yeah, but also storage auctions. A couple weeks Michael Panzer's Financial Armageddon talked about what's happening in rental storage units. That's where you'll get the good stuff. Financial Armageddon: May 2008
Turbo wrote: spend that windfall and run up some more credit card debt to boot
I've been seeing more and more of this. Usually when people get more in debt they spend less, but if they pass the point of no return then they'll spend money without limit until all sources of credit evaporate.
Through the opaque lens of modern accounting the credit card companies think they are sitting pretty: money lent is going up exponentially but the loss ratios are being extrapolated linearly. Some day it will come as a complete surprise that this debt will never be repaid. Whocouldanode.
"WMT hitting a 52 week high on stimulus check spending. Guess record and increasing foreclosures aren't expected to put a crimp on consumer spending going forward."
possibly. another explanation is that people are trading down.
going to WMT instead of Target
going to McDonalds instead of fast-casual dining.
I'd also be interested to see what WMT is selling. are their numbers up across the board (flat screens, grills etc) or is it especially high in necessities (food, toilet paper, clothes)
WMT's numbers have been, for the last year or so, nothing more than a "celebration" of higher food and energy costs. But we are supposed to believe that it is solely trading down.....
How does anyone know what house prices are? In my neighborhood there are 8 houses for sale but no sold comps in the past 6 months. Sale prices are being lowered but nothing moves. This is N. LA County. How different can it be elsewhere?
No surprise, the increase in foreclosures is dominated by California and Florida: "Taking California, Florida, Arizona and Nevada together, the four states represented 62 percent of all foreclosures started on prime ARM loans, and 84 percent of the increase in prime ARM foreclosure." (borrowerd from Housing Wire). I grew up in California. I used to hear jokes about how happy the rest of the country would be if a large earthquake caused California to separte from the rest of the US and disappear into the sea. If we could just get rid of California (and Florida too while we're at it), the nation would hardly have a "housing crisis" at all!
"Nearly 1 in 10 American homeowners with a mortgage faced foreclosure or fell behind in their payments in the first three months of the year, according to a report released Thursday, a figure that offers a look into the toll caused by the collapse of the housing market."
caused by the collapse of the housing market??? I know I know delinquencies and foreclosures happen when lower prices translate into not being able to sell your way out of trouble, but seriously, this level of foreclosures is not "caused" by the collapse of the bubble, it's caused by the unaffordability of house prices during the bubble. Get it straight people!!!
Hopefully after the presidential election people will stop calling this the housing crisis and start calling it by it's real name the housing affordability boom!
Scanning property records in some areas in may look like banks are dumping REOs, but if you look at their quarterly reports, bank REO portfolios are still increasing very quickly.
A lot of REOs are also not showing up on MLS and inventory data.
If 25 Million homes have 100% equity (no loan) and the total equity of all 75 Million homes is 46%, then the equity of the remaining 50 Million homes with loans is about 19%.
Fiiiierst!
To be followed by record foreclosures in Q2,Q3.........
I'm new to this blog. Can anyone tell me what am ARM is? Also, if I track foreclosures as a job, do I really need an MBA?
Prime ARMs are generally nicer homes, so the garage sales will be getting really good.
WAY TO GO!!! Another record broken.
Elvis-
As the consumers spend those checks now and think it's over...you're garage sale comment could not be more prescient. I wring my hands in delight thinking of the deals yet to come....
Ciao
MS
Wish the article go in more about what all these agents did to take over the bank and transfer the asset to the new banks. There seems to be a lot of paper trails that someone need to follow and how do they integrate the computer systems and records between the banks that is being taking over and the take over bank. The article is long on the circumstance and short on details...
Today's LA Times has a "foreclosure feature" on a community about an hour north of where I live. Home to many teachers, nurses, cops and firemen, Santa Maria is a bedroom community for those who make life on the over-priced south coast of the county viable. With gas above $4.30 yesterday, it's only a matter of time before absenteeism in crucial positions begins to take a toll on this lifestyle-obsessed community.
In with little to lose -- but the house - Los Angeles Times
So just what types of loans were the other 204,000 foreclosures that were neither subprime or prime ARMs? Were these a combination of subprime and prime fixed loans? These non-classified foreclosures are even a bigger number than the subprime and prime ARMs, which hints that some other big trends are afoot.
Q&A with Houlihan Lokey execs: Good news, bad news
Q&A with Houlihan Lokey execs: Good news, bad news (Dealscape - Dealmakers)
We've seen several busted leveraged buyouts recently. We haven't heard as much about deals that closed. Are they in trouble?
Werbalowsky: They're under water on day one from a valuation perspective. But that doesn't mean they'll default right away because, from a cash-flow prospective, a lot of these deals have built in enough flexibility that they can survive. People [say], "You won't really have restructurings because you have toggles, you have PIKs, you have resets, you have covenant lights." And I say, "Absolutely, that's all true." But in many cases all that will do is postpone the day of reckoning. A lot of these companies have taken on too much debt because they could. It was absolutely rational for buyout firms to say, "Let's leverage up with every penny we could because we'll need it." You'll see a lot of buyout deals going bad -- even with all the covenant-lite and all the PIKs and toggles, they'll run out of money.
I know of one particular home in Thousand Oaks, CA that stopped paying the mortgage in November '07 and has yet to get an NOD.
That leads me to believe that the banks are so inundated with NODs and foreclosures that they have quite a backlog.
If mortgages that went delinquent in T.O. last year still don't have NODs, I can only assume foreclosures will continue to rise, especially considering how much the home prices have declined there.
I also heard from a local realtor there that with the increase in sales over the last couple of months they've gone from 11 months of supply to 9. Not sure how accurate their information is. Knife catchers comes to mind.
The recent (last night?) changes in how you're delivering your RSS feed are annoying. Instead of getting the full article in my reader (Mozilla Thunderbird) I now get only the first line or two. I need to open the article up in a web browser to see the whole thing.
""Prime ARMs are generally nicer homes, so the garage sales will be getting really good."
Only after they give up hope. The well-off want too much for their stuff. They paid too much, so they want too much. They refuse to come down, get stuck with it, and it ends up at Goodwill.
The danger is that the effect of the recent credit extension on the incentives of financial-market participants might induce greater risk taking,'' Lacker said in a speech to the European Economics and Financial Centre in London. Thatin turn could give rise to more frequent crises,'' he said.
Lacker Says Fed Lending to Investment Banks Risks More Crises
Fed's Lacker Says Risks to U.S. Economy `Diminished' (Update3) - Bloomberg.com
Patiently Waiting I know of a home as well in the same situation. No NOD filed after 10 months of missed payments and no workout has been attemepted. How does a bank hide these?
CR,
Don't know if you saw this on Seeking Alpha or not-http://blog.metro-real-estate.com/?p=504. The guy's got some interesting data on roll rates. His thesis is that the potential loss numbers have been overstated and that the situation is improving. Don't have time right now to study it but you might want to take a look.
Oops, gave you the wrong link. Try this Latest Data Supports Our Claim: Subprime Mortgage Loss Estimates Are Too High -- Seeking Alpha
Pat. Waiting and Min of truth-
A similar situation with someone I know as well.....no payment of mortgage since Dec. '07 and they are renting it out...I bet the rentee has no clue about what is really going on.
Not filing the NOD is how they hide it....banks claim they are inundated with "workout solutions" however that is just code for denying "price discovery"....to put it nicely.
Ciao
MS
A little OT: XL Capital Assurance is committed to honoring the terms of the financial guarantee it provides to Jefferson County's bondholders," said Edward Hubbard, SCA Executive Vice President and President of XLCA. "The payment we are making supports the County's efforts to resolve its current circumstances."
XLCA insures payment of scheduled debt service on the County's sewer warrants that are backed by a pledge of all the County's net sewer revenues. The County is required under the covenants of the indenture governing the warrants to set sewer rates at a level sufficient to generate net sewer revenues that will allow it to meet all of the County's sewer debts.
SCA Subsidiary XL Capital Assurance Inc. Expects to Make $10.6 Million Payment HAMILTON, Bermuda, June 2
WMT hitting a 52 week high on stimulus check spending. Guess record and increasing foreclosures aren't expected to put a crimp on consumer spending going forward. It's almost like consumers are behaving like hedge funds now - a rapidly deteriorating balance sheet leads to increasingly reckless behavior - spend that windfall and run up some more credit card debt to boot.
Prime ARM garage sales? Yeah, but also storage auctions. A couple weeks Michael Panzer's Financial Armageddon talked about what's happening in rental storage units. That's where you'll get the good stuff. Financial Armageddon: May 2008
Turbo wrote:
spend that windfall and run up some more credit card debt to boot
I've been seeing more and more of this. Usually when people get more in debt they spend less, but if they pass the point of no return then they'll spend money without limit until all sources of credit evaporate.
Through the opaque lens of modern accounting the credit card companies think they are sitting pretty: money lent is going up exponentially but the loss ratios are being extrapolated linearly. Some day it will come as a complete surprise that this debt will never be repaid. Whocouldanode.
"WMT hitting a 52 week high on stimulus check spending. Guess record and increasing foreclosures aren't expected to put a crimp on consumer spending going forward."
possibly. another explanation is that people are trading down.
going to WMT instead of Target
going to McDonalds instead of fast-casual dining.
I'd also be interested to see what WMT is selling. are their numbers up across the board (flat screens, grills etc) or is it especially high in necessities (food, toilet paper, clothes)
WMT's numbers have been, for the last year or so, nothing more than a "celebration" of higher food and energy costs. But we are supposed to believe that it is solely trading down.....
Not a chance that drives the entire metric.
Ciao
MS
i guess this is just not the type of information that would keep the market from still going up, huh?
nope, guesss not
turbo, above, puts it well....
How does anyone know what house prices are? In my neighborhood there are 8 houses for sale but no sold comps in the past 6 months. Sale prices are being lowered but nothing moves. This is N. LA County. How different can it be elsewhere?
No surprise, the increase in foreclosures is dominated by California and Florida: "Taking California, Florida, Arizona and Nevada together, the four states represented 62 percent of all foreclosures started on prime ARM loans, and 84 percent of the increase in prime ARM foreclosure." (borrowerd from Housing Wire). I grew up in California. I used to hear jokes about how happy the rest of the country would be if a large earthquake caused California to separte from the rest of the US and disappear into the sea. If we could just get rid of California (and Florida too while we're at it), the nation would hardly have a "housing crisis" at all!
If we could just get rid of California (and Florida too while we're at it), the nation would hardly have a "housing crisis" at all!
On the other hand we'd be much poorer and hungrier.
From the NYTimes article on the same:
"Nearly 1 in 10 American homeowners with a mortgage faced foreclosure or fell behind in their payments in the first three months of the year, according to a report released Thursday, a figure that offers a look into the toll caused by the collapse of the housing market."
caused by the collapse of the housing market??? I know I know delinquencies and foreclosures happen when lower prices translate into not being able to sell your way out of trouble, but seriously, this level of foreclosures is not "caused" by the collapse of the bubble, it's caused by the unaffordability of house prices during the bubble. Get it straight people!!!
Hopefully after the presidential election people will stop calling this the housing crisis and start calling it by it's real name the housing affordability boom!
(says a bitter waiting renter)
Emma Anne writes:
If we could just get rid of California (and Florida too while we're at it), the nation would hardly have a "housing crisis" at all!
On the other hand we'd be much poorer and hungrier.
Emma Anne | 06.05.08 - 2:34 pm | #
and less entertained..
Scanning property records in some areas in may look like banks are dumping REOs, but if you look at their quarterly reports, bank REO portfolios are still increasing very quickly.
A lot of REOs are also not showing up on MLS and inventory data.
A quick calculation reveals that....
If 25 Million homes have 100% equity (no loan) and the total equity of all 75 Million homes is 46%, then the equity of the remaining 50 Million homes with loans is about 19%.
Sheesh. No much of a cushion there.