Nearly 2.2 million loans are 90 days or more delinquent but not yet in foreclosure (retailers have loved it!)

One-third of loans that are 90 days

or more delinquent have not

made a payment in a year

(well giddyup holiday retail sales)

 

JACKSONVILLE, Fla., Dec. 27, 2010 /PRNewswire/ -- The November Mortgage Monitor report released by Lender Processing Services, Inc. (NYSE: LPS) shows that the volume of loans moving to REO continued to drop as moratoria further delayed foreclosure sales. While the 90+ delinquency category has steadily declined, the number of loans moving to seriously delinquent status beyond 90 days far outpaced the number of foreclosure starts. Nearly 2.2 million loans are 90 days or more delinquent but not yet in foreclosure.

Foreclosure inventories also continued to rise for the fifth straight month as delinquent accounts are referred for foreclosure, but the sale of foreclosure properties continued to decline. When compared to January 2008 levels, the foreclosure inventory of Jumbo Prime loans is nearly seven times higher; the inventory of Agency Prime loans is nearly six times higher; and the foreclosure inventory of Option ARM loans is approaching five times the inventory in January 2008.

The report also shows that one-third of loans that are 90 days or more delinquent have not made a payment in a year; however, the number of new problem loans declined nearly 5.4 percent from October, which is opposite of the seasonality trend that typically impacts new delinquencies this time of year. Self-cures for loans one to two months delinquent increased in November to a six-month high.

In the month of November, 261,153 loans were referred to foreclosure, which represents a 0.7% month-over-month decline. The total number of delinquent loans is nearly 2.1 times historical averages – and foreclosure inventory is currently at 7.7 times historical averages.

As reported in LPS' First Look release, other key results from LPS' latest Mortgage Monitor report include:

• Total U.S. loan delinquency rate: 9.02 percent
• Total U.S. foreclosure inventory rate: 4.08 percent
• Total U.S. non-current* loan rate: 13.10 percent
• States with most non-current* loans: Florida, Nevada, Mississippi, Georgia, New Jersey
• States with fewest non-current* loans: North Dakota, South Dakota, Alaska, Wyoming, Montana

*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state. LPS Link and complete report

332,172 Foreclosure Filings in October 2010 (same as October 2009)

IRVINE, Calif. – Nov. 11, 2010 — RealtyTrac® (realtytrac.com), the leading online marketplace for foreclosure properties, today released its U.S. Foreclosure Market Report™ for October 2010, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 332,172 properties in October, a 4 percent decrease from the previous month and almost exactly the same total reported in October 2009. One in every 389 U.S. housing units received a foreclosure filing during the month.

“October marks the 20th consecutive month where over 300,000 U.S. homeowners received a foreclosure notice,” said James J. Saccacio, chief executive officer at RealtyTrac. “The numbers probably would have been higher except for the fallout from the recent 'robo-signing' controversy — which is the most likely reason for the 9 percent monthly drop in REOs we saw from September to October and which may result in further decreases in November.

Foreclosure Activity by Type

A total of 100,575 U.S. properties received default notices (NOD, LIS) in October, a 2 percent decrease from the previous month and a 19 percent decrease from October 2009 — the ninth straight month where default notices have decreased on a year-over-year basis.

Default notices were still up on a monthly basis in several states: Florida LIS were up 2 percent from the previous month; Ohio LIS were up 10 percent; and Illinois LIS were up 24 percent. Meanwhile, NODs decreased on a monthly basis in California (down 9 percent from the previous month), Nevada (down 17 percent), and Michigan (down 18 percent).

Foreclosure auctions (NTS, NFS) were scheduled for the first time on a total of 138,361 U.S. properties in October, a 3 percent decrease from the previous month but still a 6 percent increase from October 2009. Scheduled auctions decreased month-over-month in 26 states and the District of Columbia, while 16 states posted year-over-year decreases in scheduled auctions.

Lenders foreclosed on 93,236 U.S. properties in October, down 9 percent from the record high in the previous month but still up 21 percent from October 2009. Bank repossessions (REOs) decreased month-over month in 33 states and the District of Columbia, while 14 states posted year-over-year decreases in REOs. Including October, lenders have foreclosed on an average of more than 91,000 properties each month this year. Complete Report

REITS continue to launch while earnings remain in question...the usual equity market "when you wish upon a star"

Sing A Long with REITS...

Like a bolt out of the blue

Fate steps in and sees you through

When you wish upon a star

Your dreams come true

By A.D. Pruitt
The Wall Street Journal
10/19/10

As earnings season gets under way for real estate investment trusts (REITS), analysts are warning it isn't going to be pretty.

High vacancy rates and low market rents are continuing to drain cash flows from office, retail and industrial buildings even as many analysts and economists predict an industry bottom will emerge this year. Hotel and apartment companies are expected to be the strongest performers given an increase in corporate and leisure travel and a growing population of renters.

"I think earnings will be weak. The idea we're going to have robust earnings is just not going to happen in most property sectors," says Mike Kirby, director of research for Green Street Advisors, a firm based in Newport Beach, Calif., that closely tracks REITs.

But the tepid earnings represent a disconnect from the performance of REIT stocks this year, which have outshone the broader market.

For instance, The Dow Jones All Equity REIT index, which tracks 155 REITs, was up 12.8% for the third quarter compared with returns of roughly 10% for the Standard & Poor's 500-stock index and the Dow Jones Industrial Average.

The reason: Investors are looking past the current weak fundamentals and into next year, where a strong recovery is expected to take root.

REITs also are benefiting from the greater availability of credit in commercial real estate and the hunger of investors for higher yields.

Most REITs pay substantial dividends because of the rule that they must pay at least 90% of their taxable income out as dividends.

But dividends at some REITs may come under pressure if rents and occupancy rates continue to fall.

Mr. Kirby anticipates weakness in both property-level earnings and funds from operations, a key profitability measure for REITs that translates into earnings before depreciation and amortization.

"In most property sectors, vacancy rates remain very high and rents are staying quite low," Mr. Kirby said. He said, in general, fundamentals are bouncing along the bottom and cash flows are still declining, albeit slightly.

The office vacancy rate was 17.6% for the third quarter, a 17-year high, according to research firm Reis Inc. The firm noted effective rents have declined 12% to $22.04 a square foot from the peak in 2008. But the rate of deterioration slowed in the third quarter in a sign the market is stabilizing.

Richard Anderson, an analyst at BMO Capital Markets, says the earnings releases for Boston Properties Inc. and Vornado Realty Trust will serve as bellwethers for the market.

"There are pockets of optimism, [but] as a general rule, the office business remains weak," Mr. Anderson says. "It remains a tenant's market for the most part. They are negotiating better deals for themselves [and] are reluctant to make long-term commitments to their space, as the economy remains in a state of flux."

For retail, the vacancy rate hit 10.9% for the third quarter, close to the historic high of 11% in 1990, and the firm projects the national warehouse vacancy rate to reach 11.7% by the end of 2010, a 0.3-percentage-point-increase from the end of 2009, according to Reis.

Earnings from hotels and apartment operators are expected to come in relatively stronger compared with other sectors, although they will likely be far from robust.

Host Hotels and Resorts Inc. last week said third-quarter funds from operations were flat on a per-share basis at 11 cents, but revenue rose 11% to $1 billion. The lodging sector, one of the hardest-hit during the economic downturn, has been on the mend as steep cuts in rates draw in more corporate and leisure travel.

Haendel St. Juste, an apartment REIT analyst at Keefe, Bruyette & Woods, said earnings by apartment operators should improve sharply because demand for rentals has surged amid the housing crisis.

"People don't want to buy, they want to rent these days," said Mr. St. Juste, referring to the wave of national foreclosures and perceived disincentives to buy new homes. He noted that every 1% decline in home ownership adds 1 million to 1.5 million new renters to the market.

His firm expects average funds from operations for apartment operators to decline about 3% during the third quarter from the same period last year.

The national apartment vacancy rate stood at 7.2% at the end of third quarter, according to Reis. That was down from the second quarter's 7.8% and 7.9% at the end of the third quarter a year ago.

Diana Olick recaps recent foreclosure activity for the month of June and REO Inventory

Diana Olick recaps recent foreclosure activity for the month of June and REO Inventory. Bank home repossessions in July clocekd in at 93,000 reflecting a 9% increase over June. Between FHA, Fannie and Freddie, 236,338 homes are in foreclosed inventory. It is estimated that current inventory of foreclosed residential properties among all public and private lenders is just under 600,000 and unfortunately, it is on the rise.

Grandpa

RealtyTrac® (http://www.realtytrac.com/), the leading online marketplace for foreclosure properties, today released its U.S. Foreclosure Market Report™ for July 2010, which shows that foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 325,229 properties in July, a nearly 4 percent increase from the previous month but a nearly 10 percent decrease from July 2009. One in every 397 U.S. housing units received a foreclosure filing during the month.

“July marked the 17th consecutive month with a foreclosure activity total exceeding 300,000,” said James J. Saccacio, chief executive officer of RealtyTrac. “Declines in new default notices, which were down on a year-over-year basis for the sixth straight month in July, have been offset by near-record levels of bank repossessions, which increased on a year-over-year basis for the eighth straight month.”

And the U.S. Government continues to throw BILLIONS at housing (an exercise in futility) while placing our grandchildren in financial harms way. The fiscal insanity continues!!

Office Vacancy Rate Keeps Climbing

By ANTON TROIANOVSKI
Wall Street Journal

Vacant office space continued to accumulate in the second quarter, the latest indication that businesses aren't planning significant hiring in the near future.

Office buildings across the U.S. lost 1.8 million square feet of occupied space in the quarter, pushing the national office vacancy rate to 17.4%, the highest level since 1993, according to New York-based research firm Reis Inc.

While the drop in occupied space was much smaller than in previous quarters, analysts said companies' continued reduction of office space meant they still lacked confidence in economic recovery.

Landlords responded to rising vacancies by reducing rents for the seventh straight quarter. Effective rent, which is rent including concessions, declined 0.9% during the second quarter to an average of $22.01 a square foot a year. Effective rent peaked at nearly $25 per square foot in the second quarter of 2008.

"The fate of office properties will depend largely on how well the U.S. economy and labor markets fare amid what appears to be a recovery that comes in fits and starts," said Reis economist Ryan Severino.

Job growth and office-space use are closely intertwined. While some major users of offices, such as federal regulatory agencies, have been expanding, big banks and corporations have lagged behind in increasing their real-estate footprint, according to some analysts. That is a sign that these larger companies have been slow to return to their pre-recession staffing levels, a contributing factor to the persistently high U.S. unemployment rate.

Across the 82 metropolitan areas tracked by Reis, the total amount of occupied office space has dropped since early 2008 by 133 million square feet—the size of 2,300 football fields.Link to complete article

U.S. Home Builders Officially Depressed, Index drops 5 points

By Rex Nutting WASHINGTON (MarketWatch) - Sentiment among U.S. home builders retreated in June after a tax break for home buyers expired, according to a monthly survey released Tuesday by the National Association of Home Builders. The housing market index dived to 17 in June from 22 in May, the NAHB reported. All three components of the index fell in June, and home builders were more discouraged in all four regions of the country. The index was lower than the 21 that was expected by economists surveyed by MarketWatch, and was the lowest since it hit 15 in March.

Grandpa: CNBC is scrambling to put a "happy face" on this report while Real Estate Investment Trusts will likely completely ignore and continue to moon launch.

25 questions to ask anyone who is delusional enough to believe that this economic recovery is real….Blacklisted News

By Michael Snyder - BLN Contributing Writer
If you listen to the mainstream media long enough, you just might be tempted to believe that the United States has emerged from the recession and is now in the middle of a full-fledged economic recovery. In fact, according to Obama administration officials, the great American economic machine has roared back to life, stronger and more vibrant than ever before. But is that really the case? Of course not. You would have to be delusional to believe that. What did happen was that all of the stimulus packages and government spending and new debt that Obama and the U.S. Congress pumped into the economy bought us a little bit of time. But they have also made our long-term economic problems far worse. The reality is that the U.S. cannot keep supporting an economy on an ocean of red ink forever. At some point the charade is going to come crashing down.

And GDP is not a really good measure of the economic health of a nation. For example, if you would have looked at the growth of GDP in the Weimar republic in the early 1930s, you may have been tempted to think that the German economy was really thriving. German citizens were spending increasingly massive amounts of money. But of course that money was becoming increasingly worthless at the same time as hyperinflation spiralled out of control.

Well, today the purchasing power of our dollar is rapidly eroding as the price of food and other necessities continues to increase. So just because Americans are spending a little bit more money than before really doesn’t mean much of anything. As you will see below, there are a whole bunch of other signs that the U.S. economy is in very, very serious trouble.

Any “recovery” that the U.S. economy is experiencing is illusory and will be quite temporary. The entire financial system of the United States is falling apart, and the powers that be can try to patch it up and prop it up for a while, but in the end this thing is going to come crashing down.

But as obvious as that may seem to most of us, there are still quite a few people out there that are absolutely convinced that the U.S. economy will fully recover and will soon be stronger than ever.

So the following are 25 questions to ask anyone who is delusional enough to believe that this economic recovery is real….

#1) In what universe is an economy with 39.68 million Americans on food stamps considered to be a healthy, recovering economy? In fact, the U.S. Department of Agriculture forecasts that enrollment in the food stamp program will exceed 43 million Americans in 2011. Is a rapidly increasing number of Americans on food stamps a good sign or a bad sign for the economy?

#2) According to RealtyTrac, foreclosure filings were reported on 367,056 properties in the month of March. This was an increase of almost 19 percent from February, and it was the highest monthly total since RealtyTrac began issuing its report back in January 2005. So can you please explain again how the U.S. real estate market is getting better?

#3) The Mortgage Bankers Association just announced that more than 10 percent of U.S. homeowners with a mortgage had missed at least one payment in the January-March period. That was a record high and up from 9.1 percent a year ago. Do you think that is an indication that the U.S. housing market is recovering?

#4) How can the U.S. real estate market be considered healthy when, for the first time in modern history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together?

#5) With the U.S. Congress planning to quadruple oil taxes, what do you think that is going to do to the price of gasoline in the United States and how do you think that will affect the U.S. economy?

#6) Do you think that it is a good sign that Arnold Schwarzenegger, the governor of the state of California, says that “terrible cuts” are urgently needed in order to avoid a complete financial disaster in his state?

#7) But it just isn’t California that is in trouble. Dozens of U.S. states are in such bad financial shape that they are getting ready for their biggest budget cuts in decades. What do you think all of those budget cuts will do to the economy?

#8) In March, the U.S. trade deficit widened to its highest level since December 2008. Month after month after month we buy much more from the rest of the world than they buy from us. Wealth is draining out of the United States at an unprecedented rate. So is the fact that the gigantic U.S. trade deficit is actually getting bigger a good sign or a bad sign for the U.S. economy?

#9) Considering the fact that the U.S. government is projected to have a 1.6 trillion dollar deficit in 2010, and considering the fact that if you went out and spent one dollar every single second it would take you more than 31,000 years to spend a trillion dollars, how can anyone in their right mind claim that the U.S. economy is getting healthier when we are getting into so much debt?

#10) The U.S. Treasury Department recently announced that the U.S. government suffered a wider-than-expected budget deficit of 82.69 billion dollars in April. So is the fact that the red ink of the U.S. government is actually worse than projected a good sign or a bad sign?
Link to remaining questions

Grandpa has nothing else to offer at this time however the truth is out there..
 
 

April Existing Homes: 82% of total were 1st time buyers and distressed properties

Washington, D.C., May 24, 2010
WASHINGTON (May 24, 2010) – Existing-home sales rose again in April with buyers motivated by the tax credit, improving consumer confidence and favorable affordability conditions, according to the National Association of Realtors®.

Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 7.6 percent to a seasonally adjusted annual rate of 5.77 million units in April from an upwardly revised 5.36 million in March, and are 22.8 percent higher than the 4.70 million-unit pace in April 2009. Monthly sales rose 7.0 percent in March.

Lawrence Yun, NAR chief economist, said the gain was widely anticipated. “The upswing in April existing-home sales was expected because of the tax credit inducement, and no doubt there will be some temporary fallback in the months immediately after it expires, but other factors also are supporting the market,” he said. “For people who were on the sidelines, there’s been a return of buyer confidence with stabilizing home prices, an improving economy and mortgage interest rates that remain historically low.”

Total housing inventory at the end of April rose 11.5 percent to 4.04 million existing homes available for sale, which represents an 8.4-month supply at the current sales pace, up from an 8.1-month supply in March. Raw unsold inventory is 2.7 percent above a year ago, but remains 11.6 percent below the record of 4.58 million in July 2008.

A parallel NAR practitioner survey shows first-time buyers purchased 49 percent of homes in April, up from 44 percent in March. Investors accounted for 15 percent of transactions in April, down from 19 percent in March; the remaining sales were to repeat buyers. All-cash sales stood at 26 percent in April; they were 27 percent in March.
Link to NAR Press Release


Distressed sales accounted for 33% of all sales in April. The combined distressed sales and first time buyers accounted for 82% of all April sales.

The government's tax credit program ended 4/30/10 so "look out below" when the June, July and August existing home sales figures are released. Sit back and enjoy the show as grandpa is expecting CNBC and the White House to fabricate a positive spin on how 82% of existing homes sales represented by first time buyers and distressed sales is a positive sign that our economy is booming and a bottom has been reached in the housing market.

The only bottoms witnessed in 2010 are the "bottom of the barrel" politicians in D.C. and the BP black hole at the "bottom" of the Gulf.

Homebuyer tax credit-8 days remain for repeat buyers to stick it to grandchildren

Grandchildren everywhere are celebrating the end of the government's program to reward repeat buyers with a $6,500 gift at the expense of grandchildren. 8 days remain and grandkids everywhere are begging our congressional spenders will not extend or expand the U.S. Government sweepstakes program.

Our government has piled up historical levels of debt and yet continues to hand out tax credits like confetti at a ticker tape parade. This is America, the land of bailouts and entitlement. Simply spend today and let the grandchildren carry the burden.

The $6,500 Move-Up / Repeat Home Buyer Tax Credit at a Glance
To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.

The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.

The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.

The tax credit applies only to homes priced at $800,000 or less.

The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.

Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

Winning photo on the Federal Housing Tax Credit website

Granpda's photo entry (it did not even place)

Paulson and Company is now bullish on housing...well good for him!!!

John Paulson held a conference call today with his investors and noted he was he was concerned earlier this year about a potential double-dip recession. Might you have a thought or two Mr. Bigshot regarding the millions of American's still on the unemployment lines?

"I'm not concerned about that at all today," he said. It's more likely there could be a V-shaped recovery". Of course you are not worried John, you raked in about $12 billion of net worth! House prices have stabilized and could climb 8% to 10% nationwide in 2011". Do you know for a fact John, that there is no "shadow inventory"?

After sipping more kool-aid, he stated that corporate earnings are coming in ahead of expectations, the stock market is stronger and there's a "vibrant" credit market. With the "final leg" of a rising housing market, "the outlook for 2011 could be very strong".  

He confidently announced that Greece's problems are much better understood now and are being dealt with. Much better understood????

He also stated that Paulson and Company covered, or closed, many of its short positions recently and that showed up in stronger returns in April, the fund manager noted. The firm has been "much more aggressive" in positioning its Advantage funds to "participate in a stronger economic recovery".

John is also bullish about credit markets and said he isn't worried about the massive amount of corporate debt that needs to be refinanced in the next three years or so. "That is a concern to some investors. It's not at all a concern to me," he said. "There's so much demand for debt." Whenever debt matures, lenders get cash back that has to be redeployed and that drives demand, he explained. There's a "voracious appetite for credit," Paulson commented, noting that offerings are "vastly" oversubscribed.

Companies beating expectations is a surprise? Analysts play the same games as you John, of course companies beat expectations. It appears as though you would have us believe the banks have marked their book to a realistic market value. Oh wait, they do not have to thanks to the lobbying efforts of Wall Street on Congress and then Congress taking the 2x4 to FASB.

Was turning bullish a condition of the SEC not bringing charges against Paulson and Company? You bet against the housing market and shorted banks and now all is well with the credit markets and housing is in a "V" shaped recovery. You are a classic manipulative Wall Street thug Paulson.

For some strange reason, grandpa suspects you may have an ulterior motive. What goes around...

Diana Olick and Heather Fernandez (Trulia) on home seller reductions and Dennis Kneale tries so hard to sound intelligent

Diana Olick and Heather Fernandez discuss the current number of home sellers reducing their initial selling price as compared to a year ago. Diana also notes 50% of the recent existing home sales were distressed properties.

The conversation up to this point is actually rather intelligent and Dennis (Gomer Pyle) Kneale takes the opportunity to share his vast knowledge regarding the volume of foreclosures. He states Heather, "there is less supply of foreclosure properties selling at firesale prices.......". Heather (clearly the smarter one) states that there continues to be an increase in the number of foreclosed properties hitting the market.

Back to your dish Dennis.

Diana Olick: Mortgage applications down 9.6% this past week, How about a Ginsu Knife?

17 days left for the U.S. government's $8,000 first time homebuyer tax credit and yikes, mortgage applications are down 9.6%. Interest rates actually ticked down to 5.17% from 5.31% and yet the volume is dropping. What could it be?

Maybe the pool of buyers has yet to find a job, maybe it’s because those that are working are not experiencing a wage increase? Maybe the potential buyers are concerned about keeping their job? Maybe the buyers are concerned about home prices have yet to truly "firm up"? Maybe many potential buyers simply moved in with mom and dad given the cheap rent as mom and dad are not making their mortgage payment and when they complete the short sale, they agreed to split the $1,500?

No, it is none of those crazy fundamental reasons, grandpa has it figured out; there is a lack of meaningful incentive. Clearly a 5% rate is not enough and no one is fretful about losing their job as if they do, congress and the administration will simply create another bailout program. The lacking incentive….

I WANT A SET OF KNIVES!!

"But wait, there's more..."

Another whiney bank executive; WAMU “unfairly seized” and other tales from the crypt

Whining before congressional panels continues and this week’s all star whiner line up included former Washington Mutual (WAMU) CEO Kerry Killinger. Yes, WAMU holds bragging rights as the single largest bank failure in U.S. history.

One could surmise that poor risk management practices, greed, incompetent management and more greed created a failure of this magnitude ($19 billion). Not so fast buckaroos, as Kerry “killjoy” Killinger delivered another cryptic perspective on the massive failure.

Granpda is not making this up, the following is a cut and paste from his prepared testimony:

“As CEO, I accept responsibility for our performance and am deeply saddened by what happened.” And now, let the whining commence...

I believe that Washington Mutual’s seizure was unnecessary, and the Company should have been given a chance to work its way through the crisis. I also believe it was unfair that Washington Mutual was not given the benefits extended to and actions taken on behalf of other financial services companies within days of the Company’s seizure.

The unfair treatment of Washington Mutual did not begin with its unnecessary seizure. In July 2008, Washington Mutual was excluded from the “do not short” list, which protected large Wall Street banks from abusive short selling. The Company was similarly excluded from hundreds of meetings and telephone calls between Wall Street executives and policy leaders that ultimately determined the winners and losers in this financial crisis. For those that were part of the inner circle and were “too clubby to fail,” the benefits were obvious. For those outside of the club, the penalty was severe.

In my view, the actions taken by policymakers reflect a vision of a banking industry dominated by large Wall Street banks. Consumer-based banks like Washington Mutual were not included in this vision, and consequently were not extended the same protections. I believe this was a mistake. I fear that consumers will ultimately pay the price of this vision through less competition, higher fees, and lower interest rates on their deposits.

Unfortunately, policy leaders were slow to recognize the deterioration in the housing and credit markets in 2007. In March of 2007, the Chairman of the Federal Reserve said that “the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained.” And in June of that year, Treasury Secretary Paulson predicted that the crisis in the mortgage markets “will not affect the overall economy.”

With the benefit of hindsight, there are many things Washington Mutual and the financial services industry could have done to better prepare for the worst economic downturn since the Great Depression. Washington Mutual aggressively reduced lending, raised new capital and cut operating expenses. But had we known that housing price declines of 40% or more would occur in the Company’s key markets, we would have taken even more draconian measures.

Thank you for your time, and I hope this statement and my oral testimony will contribute to the Subcommittee’s work.

Foreclosure Rates At Record High

LPS’ Mortgage Monitor Report Shows Total Delinquent Loans 21.3 Percent Higher Than Last Year; Foreclosure Rates At Record High

Report Includes Data as of February 2010 Month-End

JACKSONVILLE, Fla. – April 12, 2010 – The latest Mortgage Monitor report released by Lender Processing Services, Inc. (NYSE: LPS), a leading provider of mortgage performance data and analytics, shows that the total number of delinquent loans was 21.3 percent higher than the same period last year. Although the data showed a small 1.45 percent seasonal decline in delinquencies from January 2010 to February 2010 month-end, the national delinquency rate still stood at 10.2 percent. The report is based on data as of February 2010 month-end.

The nation’s foreclosure inventories reached record highs. February’s foreclosure rate of 3.31 percent represented a 51.1 percent year-over-year increase. The percentage of new problem loans also remains at a five-year high. The total number of non-current first-lien mortgages and REO properties is now more than 7.9 million loans. Furthermore, the percentage of new problem loans is also at its highest level in five years. More than 1.1 million loans that were current at the beginning of January 2010 were already at least 30 days delinquent or in foreclosure by February 2010 month-end.

As a result of the federal government’s Home Affordable Modification Program (HAMP), delinquent loans that were modified and that remained current through HAMP’s three-month trial period – called “cures-to-current” – have increased. Advanced delinquency rolls, however, remain elevated from a historical perspective.

Other key results from LPS’ latest Mortgage Monitor report include:
Total U.S. loan delinquency rate: 10.2 percent
Total U.S. foreclosure inventory rate: 3.3 percent
Total U.S. non-current* loan rate: 13.5 percent
States with most non-current* loans: Florida, Nevada, Arizona, Mississippi, California, New Jersey, Georgia, Illinois, Ohio and Indiana

States with fewest non-current* loans: North Dakota, South Dakota, Alaska, Wyoming, Nebraska, Montana, Vermont, Colorado, Washington and Minnesota

*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.

Note: Totals based on LPS Applied Analytics’ loan-level database of mortgage assets.


Link to Complete Report and Presentation

 

Not a complicated formula: Foreclosures increase equals decreasing home prices

Diana Olick notes the increase in foreclosure activity is having a direct impact on home values. Yes, White House Administration...she told you so! Real Estate Owned (REO) accounts for 28.9% of nationwide sales.

Of course this data had no negative impact on today's equity market as once again, the Robots merely ignored fundamental data and sent the market higher. Oh silly grandpa, today's market increase was all about the record setting retail sales....more on this in a follow up post.

Chuck Prince Gets Grilled: $13 billion or $55 billion Chuck?

Thanks to Huffington Post:
Commission chairman Phil Angelides grilled Rubin and Prince about Citigroup's holdings of toxic securities related to the subprime market. In the below clip, Angelides questions Prince about Citi's exposure in the fall of 2007.

At issue is whether or not Citi told analysts that the bank's exposure to subprime mortgage market was actually much smaller than it was admitting internally.

Analysts were told that Citi had $13 billion in subprime exposure -- but an Citi's board and audit committee were told that the bank's exposure was more than $50 billion, Angelides said.

Prince's response, if you can call it that, was essentially non-committal and evasive.

Diana Olick Real Estate Update: New Wave of Foreclosures

Diana Olick lays it out there like it is. Unfortunately, once again the viewer is forced to listen to the dribble of "I was on Baywatch" Tyler Mathisen and "put her back in the Barbie Box" Julia Boorstin. At least Diana's content is worth the listen.

Changes to federal foreclosure program announced-Government relaxing rules

Associated Press
Tamara Lush, Associated Press Writer, On Friday April 2, 2010, 4:09 pm EDT

ST. PETERSBURG, Fla. (AP) -- The federal government announced Friday that it is relaxing some rules to make it easier for communities to spend funds on redeveloping abandoned and foreclosed properties.

The changes, effective immediately, will allow cities, counties and states to buy properties in mortgage default and uninhabitable homes with lingering code violations through the $4 billion Neighborhood Stabilization Program.

The program was started in the midst of the nation's foreclosure crisis, but a year later about a third of more than 300 local governments that got grants have barely made a dent in them, according to a recent report from the U.S. Department of Housing and Urban Development.

Some city, state and county officials say they have had trouble spending the grant money because federal rules are confusing and cash investors have often outbid them for residential properties.

"It became clear to us that the Neighborhood Stabilization Program as originally designed was too restrictive and limited the ability of our local partners to put this funding to work quickly, Mercedes Marquez, HUD's assistant secretary for community planning and development, said in a statement. "We need to be more flexible so our local partners can respond to market conditions and reverse the effects of foreclosure in these neighborhoods as quickly as possible."

James Miller, spokesman for the Florida Department of Community Affairs, which got $91 million to distribute to 24 cities and counties, called Friday's announcement wonderful news.

"It just broadens the pool of available properties that local governments can target," he said. "This opens up more possibilities for them."

Buying a foreclosed home can be complicated, and the new rules will make it easier for communities by giving them a broader pool to work from.

Now a community can buy a property that is at least 60 days delinquent on its mortgage if the owner has been notified, or if the property owner is 90 days or more delinquent on tax payments.

HUD also expanded the definition of an abandoned property to include homes where no mortgage or tax payments have been made for at least 90 days or a code enforcement inspection has determined that the property is not habitable and the owner has taken no corrective action.


Common sense news flash forMercedes Marquez: Continuing to throw money at programs with nominal to no returns only further damages the future of our children and grandchildren. Do you honestly believe saying you will "reverse the effects of foreclosure" will make it happen? The staggering debt level of this country continues to mount and Mr. Miller deems the announcement "wonderful news".

Freddie Mac Delinquencies Nearly double from February 2009

Freddie Mac released their mortgage delinquency figures today and they nearly doubled from February 2009. Their reported mortgage delinquency rate for February 2010 is 4.08%. This is an increase from January's 4.03% rate. For February 2009, Freddie Mac reported a delinquency rate of 2.13%.

On the multi-family loans, the delinquency rate was 0.17 percent of the portfolio, up from 0.15 percent the prior two months and more than double the 0.08 percent in February of last year.

Freddie Mac announced yesterday that they were relaxing their lending standards on Florida condominiums. Freddie Mac will back mortgages on units in financially troubled condo developments as long as the seller's loan is already owned or securitized by the mortgage finance company. GRANDPA: say what? Your delinquency rate has doubled in a year and you are relaxing lending standards!

The equity market will simply roll with the delinquency punches as the Quant robots will not let a  doubling of delinquencies slow down their mandate to fill the bubble. The following is a classic market disconnect from reality or more commonly referred to as "good old fashioned market manipulation".

Popular REIT ETF's (while delinquency rates have doubled...):
IYR is 2% from it's 52 week high and up 96% since 3/31/09
RWR is 2.7% from it's 52 week high and up 104% since 3/31/09
REZ is 3% from it's 52 week high and up 83% since 3/31/09

Fannie Mae Serious Delinquencies 5.52% in January 2010 A RECORD

Fannie Mae continues to set records. Their serious delinqeuncies (single family conventional mortgages) for the month of January 2010 hit 5.52%. This is up from 5.38% for December 2009 and a double from January 2009 (2.77%). Their delinquencies continue to rise and yet Turbo Tax Timmy will spend every last cent to keep the sinking ship afloat.

Tim Geithner on Fannie and Freddie (CNBC 3-30-10):
I WILL SAY WHAT I SAID IN THE HEARING AND I WILL NEVER CHANGE THIS THE BASIC VIEW. WE HAVE MADE IT CLEAR, WILL PROVIDE WHATEVER CAPITAL IS NECESSARY TO MAKE SURE THAT THOSE TWO INSTITUTIONS CAN MEET THEIR OBLIGATIONS PAST AND FUTURE. THAT IS A VERY IMPORTANT COMMITMENT, AND I'M GOING TO STICK TO THAT.

BARTIROMO: SO YOU ARE EXPLICITLY GUARANTEEING THE COMBINED 1.6 TRILLION DOLLARS IN DEBT AND 5 TRILLION DOLLARS IN MORTGAGE BACKED SECURITIES THEN?

GEITHNER: I WILL SAY IT EXACTLY THE WAY I SAID IT. I'M GOING TO MAKE SURE THAT PEOPLE UNDERSTAND THAT WE WILL PROVIDE WHATEVER CAPITAL IS NECESSARY TO THOSE INSTITUTIONS TO MEET THE OBLIGATIONS PAST AND FUTURE. AND THAT'S AN IMPORTANT THING TO DO AGAIN, BECAUSE THEY ARE SO IMPORTANT NOW TO MAKE SURE THAT AMERICANS HAVE ACCESS TO AFFORDABLE MORTGAGES ACROSS THE COUNTRY.

When will you give our children and grandchildren a break Tim??????

Insanity: doing the same thing over and over again and

expecting different results