Dylan Ratigan: More on foreclosures and the overall incompetence of the banks

Dylan Ratigan addresses evn more on robo-signers and the manner in which banks have handled foreclosures.

Florida defense attorney Peter Ticktin talks about the poor training and qualifications of many signing agents.

Fannie Mae Offering Deals You Can't Refuse...or so they hope

Welcome to Fannie Mae, Let's Make a Deal

Diana Olick
CNBC Real Estate Reporter
9/23/10

So it seems Fannie Mae is doing all it can to unload its massive quantities of REO inventory.

When I say massive, I mean the 129,310 single family bank-owned properties — or REOs, as they're called — it held at the end of Q2, which is more than twice what it was carrying at the end of Q2 2009.

As I noted in a Tweet yesterday, every time home prices drop just 1 percent, the value of all government-sponsored enterprise (GSE) REOs fall by $287 million (thank you to John Burns of John Burns Real Estate Consulting for that math).

No surprise, then that Fannie would want to get rid of its REO as fast as possible, especially as we saw bank repossessions hit a new record in August and home prices are again weakening. How does Fannie do it? It's renewing an expired program that gives buyers of its REOs "3.5 percent of the final sales price that can be used toward closing cost assistance, including a home warranty."

And if that's not enough, Fannie is now getting those crash-weary real estate agents on its side as well. "Selling agents representing owner-occupants will receive a $1,500 bonus." Nice. The offer runs from Sept. 23, "and must close by December 31, 2010," so this is a pretty short deal.

“We continue to look for ways to stabilize neighborhoods and offer incentives to qualified buyers who will occupy these properties over the long-term and help support their communities," writes Terry Edwards, Executive VP of Fannie's Credit Portfolio Management in the press release.

So let's just do a little more math...in the first half of 2010 Fannie sold around 87,000 REOs.

If it sells half that, because it's three months not six, then Fannie will be paying out a little over $65 million just to real estate agents, not to mention the assistance back to the buyers in the 3.5% back.

I'm thinking Fannie is really worried about rising REO inventory.

GMAC Halts Evictions in 23 States...Viva Extend and Pretend

GMAC Halts Evictions in 23 States

The Bulls Will Love the ficticious Drop

in Next Month's Foreclosure Report

Extend and Pretend Lives!!

By Denise Pellegrini
Sept. 20 (Bloomberg) -- Ally Financial Inc.’s GMAC Mortgage unit told brokers and agents to halt evictions tied to foreclosures on homeowners in 23 states including Florida, Connecticut and New York.

GMAC Mortgage may “need to take corrective action in connection with some foreclosures” in the affected states, according to a two-page memo dated Sept. 17 marked “urgent.” Ally Financial spokesman James Olecki confirmed the contents of the memo. Brokers were told to immediately stop evictions, cash- for-key transactions and lockouts, according to the document, addressed to GMAC preferred agents.

The lender will also suspend sales of properties on which it has already taken possession. The letter tells brokers to notify buyers that closings will be extended 30 days. Buyers will be able to cancel their agreement to purchase and get their deposit back, according to the letter. Foreclosures won’t be suspended, according to a company statement.

GMAC Mortgage is reviewing procedures “to ensure that all foreclosure requirements have been fully met,” according to the e-mailed statement from James Olecki, an Ally spokesman. “GMAC Mortgage is committed to preserving the integrity of the foreclosure process and if any corrective actions are needed, we will take immediate steps to make sure they are implemented.”

Record Seizures

Lenders and lawmakers have been trying to slow foreclosures and keep people in their homes as U.S. seizures set records. Bank repossessions climbed 25 percent in August from a year earlier to 95,364, according to RealtyTrac Inc., the Irvine, California-based data provider. Detroit-based Ally, the auto and home lender formerly known as GMAC Inc., is 56.3 percent owned by the U.S. after more than $17 billion of taxpayer bailouts.

GMAC Mortgage ranked fourth among U.S. home-loan originators in the first six months of this year, with $26 billion of mortgages, according to Inside Mortgage Finance, an industry newsletter. Wells Fargo & Co. ranked first, with $160 billion, and Citigroup Inc. was fifth, with $25 billion.

The 23 States
Connecticut
Florida
Hawaii
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Nebraska
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Pennsylvania
South Carolina
South Dakota
Vermont
Wisconsin