Tag Archives: Foreclosure Moratorium

Based on its database, YouWalkAway.com foresees an inevitable decrease in property values due to backlog and delays in processing foreclosures. In Florida, 45 percent of YouWalkAway.com clients are in pre-foreclosure status, and on average, they are 17 months past due and still have not received their first formal foreclosure notice. In California, 59 percent of the agency's clients are in pre-foreclosure status, and on average, they are 15 months behind and still haven't received a foreclosure notice. ""This data points to significant backlog, eventual foreclosure activity and predicts a drop in value for home prices,"" said YouWalkAway.com CEO Jon Maddux.

The most significant impact of the $25 billion robo-signing settlement has been the clarification of foreclosure standards for servicers, which has led to a higher number of initiated foreclosures, Fitch Ratings said in a note. Foreclosure initiation rates rose to roughly 12 percent in June, the highest figure since first half-2009, according to Fitch. While there has been an increase in principal reductions, Fitch said the growing use of principal reduction may be a continuation of an earlier trend, not a result of the settlement. In February, state and federal officials reached a landmark settlement with five of the largest servicers - Bank of America, JPMorgan Chase, Wells Fargo, Citi, and Ally over foreclosure practices.

The number of completed foreclosures in May decreased yearly and increase slightly from the previous month, CoreLogic reported Friday. The number of completed foreclosures last month totaled 63,000 compared to 77,000 in May 2011 and 62,000 in April 2012. Since the financial crisis began in September 2008, 3.6 million homes have been lost to foreclosure. May also saw a yearly drop in the number of homes sitting in foreclosure inventory with about 1.4 million homes, or 3.4 percent, in foreclosure compared to 1.5 million, or 3.5 percent a year ago.

The drop in existing home sales reported by the National Association of Realtors (NAR) Thursday likely stemmed from a lack of distressed properties on the market, according to IHS Global Insight. In May, existing-home sales made a fall of 1.5 percent from the month before. The share of investor purchases also declined, which IHS economist Patrick Newport said is likely due to a drop in the number of distressed homes. According to the NAR report, investor purchases made up 17 percent of homes sales in May, down from 20 percent in April and 19 percent in May 2011.

If fraudulent documents are found in a foreclosure case, should banks be able to voluntarily dismiss the foreclosure then re-file the case after fixing the error? The answer to this question is currently being decided by the Florida Supreme Court, which heard arguments May 10 for a case titled Roman Pino v. Bank of New York Mellon. If the court does rule in favor of Pino, this would mean servicers would no longer be able to fix documents and refile foreclosures, which would stall or lead to the dismissal of foreclosure cases and make it even more difficult for the judicial state to proceed with foreclosures. While a decision has not been made, Moody's Analytics said the ruling is not likely to fall in favor of the defendant Pino, who is the homeowner the bank tried to foreclose on using a fraudulent assignment of mortgage.

Even though Radar Logic reported a monthly increase in home prices for March, the analytics company expects prices to fall and gave credit to temporary market forces for recent strengths seen in the housing market. According to Radar Logic, the RPX Composite price, which tracks home prices in 25 major metropolitan areas, showed a 1.8 percent increase on a monthly basis, but decreased by 0.87 percent year-over-year in March. With distressed homes remaining a significant portion of home sales transactions, Radar Logic dismissed the monthly increase and said significant discounts for distressed properties in relation to non-distressed means a further fall in prices.

Fannie Mae and Freddie Mac announced temporary eviction moratoriums on all single-family homes and two-to-four unit properties over the holidays. Both companies will enforce the moratorium from December 19 through January 2. The suspension will not affect the pre- or post-foreclosure processes. Servicers may continue the administrative processes involved in foreclosures, but evictions will be delayed until after the start of the new year.

Two California divisions of the Occupy Wall Street movement -- Occupy LA and Occupy Santa Cruz -- are beginning to focus their efforts on halting foreclosures. Mario Brito, leader of Occupy LA, announced a plan this week to pressure both banks and government officials to impose a foreclosure moratorium. Also this week, Occupy Santa Cruz sent a letter to its County Board of Supervisors calling on board members to invoke a foreclosure moratorium and set up a task force to study foreclosure practices.

Banks held about 476,000 homes that they repossessed from delinquent mortgage borrowers as of the end of July, according to Barclays Capital. That tally represents a 17 percent contraction from 574,000 REOs on the books just 10 months earlier, in September of 2010, just as the robo-signing scandal began grabbing headlines. According to Barclays' analysis, the average number of months a loan has spent in foreclosure has climbed from around 10 months just before October of last year to more than 12 months today.

New Jersey's Superior Court has lifted the last of six injunctions handed down late last year, giving Ally Financial and its GMAC Mortgage unit the go-ahead to resume foreclosure actions in the state. The Superior Court judge issued an order this week stating that GMAC had demonstrated the ""reliability of its processes"" and is ""permitted to resume prosecution of uncontested foreclosure proceedings."" Five other servicers were given the green light to begin the regular order of processing foreclosures in the state last month.