Judicial Branch saves US Private Property Rights, MASS Supreme Court throws out ‘securitized servicer foreclosures’ by Wells and US Bank in Ibanez, LaRace cases
Update: Full ruling here. And some appropriate theme music from Judas Priest~
Update 2: From the ruling:
Focusing first on the Ibanez mortgage, U.S. Bank argues that it was assigned the mortgage under the trust agreement described in the PPM, but it did not submit a copy of this trust agreement to the judge. The PPM, however, described the trust agreement as an agreement to be executed in the future, so it only furnished evidence of an intent to assign mortgages to U.S. Bank, not proof of their actual assignment. Even if there were an executed trust agreement with language of present assignment, U.S. Bank did not produce the schedule of loans and mortgages that was an exhibit to that agreement, so it failed to show that the Ibanez mortgage was among the mortgages to be assigned by that agreement. Finally, even if there were an executed trust agreement with the required schedule, U.S. Bank failed to furnish any evidence that the entity assigning the mortgage–Structured Asset Securities Corporation–ever held the mortgage to be assigned. The last assignment of the mortgage on record was from Rose Mortgage to Option One; nothing was submitted to the judge indicating that Option One ever assigned the mortgage to anyone before the foreclosure sale. [FN19] Thus, based on the documents submitted to the judge, Option One, not U.S. Bank, was the mortgage holder at the time of the foreclosure, and U.S. Bank did not have the authority to foreclose the mortgage.
Continues after the break:
More nothing on Housing: Treasury to announce minimal changes to Making Home Affordable program today, Bank of America signs on to second lien HAMP program…
Nothing on housing in SOTU despite the fact that we are about to fall off a cliff and bring the entire economy down in a double dip with collapsing prices (Obama did note the drop in home values but no plan for FAN FRED the biggest hit to taxpayers past, present and future..) Our previous posts on HAMP, FAN FRED, rising defaults and the 2MP Second Lien program here.
Sounds like ‘The Plan’ from the Administration is to waive documentation and force the initial group of trial mods to permanent status. Style over substance, again. How that helps address the imminent walkaways on 4 million more foreclosures no one can say….
The Treasury Department on Thursday plans to unveil changes designed to streamline burdensome paperwork required for its foreclosure relief plan, according to people briefed on the matter.
The tweaks to the problem-plagued program could help more borrowers complete loan modifications. But they are unlikely to placate critics who have been calling for far more dramatic changes.
Lenders will now be required to collect two pay stubs at the start of the process, and borrowers will have to give the Internal Revenue Service permission to provide their most recent tax returns at the same time, according to the people who declined to be identified because the details were not yet final….
OMG!! They are DENSE!! People who haven’t sent in the tax return release form yet likely have lied on their income!!! What are they wasting time on this crxp for when the problem has grown so enormous on shadow inventory and ARMS about to reset just as FED pulls out of QE?!
Here is one good thing, having receipt of HAMP applications ACKNOWLEDGED. Gee what a novel idea? Gawd this entire thing has been an exercise in delaying inventory build and nothing more…
…Participating mortgage companies must acknowledge they received a borrower’s application within 10 days and approve or deny the application within 30 days. After that, borrowers will still be required to make three months of trial payments before the modification becomes permanent.
What about addressing the rising UE and the roll over effect on foreclosures? STILL NOTHING TO ANNOUNCE. STILL.
..…Treasury officials are also working on a plan to give unemployed borrowers a break on payments — possibly for six months — but those details were not expected Thursday. A Treasury spokeswoman declined to comment.
With foreclosures at record-high levels, the Obama administration’s program to attack the crisis has been a disappointment. Only about 66,500 borrowers, or 7 percent of those who signed up, had completed the program as of December…
…The $75 billion program has been such a dud that some housing advocates say the Obama administration needs to rethink its entire approach.
There is some movement on a long awaited angle, the Second Lien program (2MP) finally got someone to sign up! Bank of America on board.
Bank of America Corp., the largest U.S. bank, agreed to modify some home-equity loans through the government’s Home Affordable Modification Program amid criticism from bond investors and consumer groups over the federal effort to limit foreclosures.Bank of America, which handles 14 million home loans including 3 million second-lien mortgages, is the first mortgage servicer to sign a contract committing it to the program, the Charlotte, North Carolina-based company said today in a statement. Chief Executive Officer Brian Moynihan made a “verbal commitment” to the program during a meeting with Treasury Secretary Timothy F. Geithner earlier this month, the bank said.
“For many homeowners facing severe financial difficulty, decreasing the payment on the first mortgage without a reduction in the payment on the second lien may not produce an affordable combined mortgage payment,” Barbara Desoer, president of Bank of America Home Loans, said in the statement…
And they continue to play head games with homeowners on whether or not they wll address the collapse in equity which is causing a negative feedback loop of walkaways. The damage is done, trying to prevent moral hazard of walkaways now is closing the door after the horses, cows, mice everyone has left the barn.
First they say, no plans for principal reduction, then 7 days later tell BusinessWeek there are plans for principal reduction:
Despite increasing pressure to take more aggressive steps to keep troubled borrowers in their homes, the Obama administration said Wednesday that it had no immediate plans to alter its foreclosure-prevention program by increasing its reliance on reducing loan balances.
The administration’s statement came as attorneys general and banking regulators in 14 states warned that policy makers needed to do more to stem the tide of foreclosures.
The Obama program, announced in February as a cornerstone of the administration’s efforts to stabilize the housing market, has been running into increasing criticism as delinquencies have mounted. The program has focused on reducing loan payments to affordable levels through interest-rate reductions and other changes in loan terms. But state officials and others say it needs to address falling home prices through principal reductions because many homes are now worth less than their mortgages.
“The failure to reduce principal jeopardizes the sustainability of loan modifications,” Mark Pearce, North Carolina’s deputy banking commissioner, said at a briefing for reporters….
Then 7 days later they are ‘working on it’, but still nothing but a bunch of noises on the walk aways:
The Obama administration’s $300 billion Hope for Homeowners program may be retooled to help the growing number of Americans who owe more than their properties are worth as current anti-foreclosure efforts fail to account for these “underwater” borrowers.The changes would be at least the third lease on life for the program, which began in October 2008 during the Bush administration and has so far helped just 96 of the 400,000 homeowners originally targeted.
The U.S. Federal Housing Administration is considering ways to make the program more effective, Commissioner David Stevens said in an interview. While he wasn’t specific about any changes, he said Hope for Homeowners could be expanded to more directly help borrowers with negative equity….
Courtesy of WSJ:
The foreclosure crisis is far from over, according to RealtyTrac’s Rick Sharga. The company will release its year-end report on Thursday showing foreclosures rose 20% over the previous year. He talks with Dawn Wotapka about some trouble spots and the outlook for 2010.
From the radical to the sublime, or the sublimely stupid. Are we in the Twilight Zone or what? I dunno anymore. If these yahoos cannot get the servicers to do meaningful mods, then at this point why the hell not pay people to leave their homes and pay servicers to do their fiduciary DUTY by allowing a short sale@@?!!@@ Off The Rails. And they think servicers will do MORE mods when they can get paid another fee to do short sales where they already make money?
What a clusterfxck this whole thing has been and continues to be. HOLC DAMMIT! We would have bought these houses ONCE. Now we are paying and paying and paying. When FAN FRED FHA have to write these loans down taxpayers will pay yet again for these same houses.
I mean talk about moral hazard. It is a moral hazard to buy the loans directly through HOLC once, when we own FAN FRED anyway, but it is not moral hazard to pay people to leave their homes and loans? And to keep interfering in the market so it does not correct? If we bought them, once, we would be done in one fell swoop. This endless tinkering is what leads to market uncertainty and lack of capital investment.
But by all means let’s BS around the sanctity of the contract. Who are they kidding? No contract has been protected since Chrysler bondholders got screwed and we all know it. We are paying for these losses ANYWAY as all these loans are now owned by FANNIE and FREDDIE and increasingly, FHA.
WE the taxpayers are ALREADY the damned owners. When the short sales go through WE the taxpayers will take the loss via FAN FRED and have to send them MORE money. Why not leave the people in their houses if we have to pay for losses anyway? But nooooo then the banks.servicers couldn’t get nice fees right? frakkers. sigh.
Under the plan, borrowers will receive $1,500 from the government if they sell their homes for less than the amount of their mortgages. Mortgage-servicing companies will also receive $1,000 for each completed short sale. The program is open to borrowers who may be eligible for the government’s loan-modification program, but don’t end up qualifying, or are delinquent on their modification, or request a short sale or deed-in-lieu transaction.
The short-sale program is the latest addition to the Obama administration’s $75 billion foreclosure-prevention plan, which includes incentives for mortgage companies and investors to rework troubled loans. The government first said in May that it would include short sales in the program, but it has taken months to finalize the details.
Under the new guidelines, second-mortgage holders can receive up to $3,000 of the sales proceeds in exchange for releasing their liens. Investors who hold the first mortgages, meanwhile, can collect up to $1,000 from the government for allowing such payments.
Borrowers who complete a short sale under the program must be “fully released” from future liability for the debt, according to the guidelines…
That ‘fully released’ is key. In recourse states homeowners are liable for the difference between the short sale and the loan balance on the mortgage. But this guideline will release people from that debt. Also the IRS has a nifty habit of coming after people for taxable income on that difference. However there is a loophole there…
The Internal Revenue Service counts debt forgiveness–the difference between the home’s sale price and the amount owed on the mortgage–as regular income, although there are exceptions for bankruptcy, insolvency, forgiven deductible mortgage interest and seller-financed debt. You also cannot deduct losses from price declines, or expenses you incur for real estate brokers, attorneys or others involved in the sale. Primary homeowners, however, get a break from being taxed on the shortfall, at least until December 31, 2012, thanks to the Mortgage Forgiveness Debt Relief Act of 2007…
Golden Slacks to make a profit?? Housing Update: All About Fannie Mae – Delinquency rate explodes, book of business now at $3.242 trillion
Golden Slacks update moved to end of post
Oh shxt! I feel like Butch Cassidy and the Sundance Kid looking at that hockey stick cliff of a chart on FANNIE default rates, can’t we just face the Bolivian Army instead?! Maybe they WILL surrender to us!
From DirectorBlue, courtesy of Tyler Durden @ ZeroHedge h/t Instapundit. And the ABSOLUTE LOONS in Congress think extending a homebuyer tax credit is the way to spend money in housing when FAN FRED defaults are rising this way? Good Gawd Almighty. The Tarp Congressional Oversight Panel agrees, the Treasury housing plan IS NOT WORKING.
The [Fannie Mae] “seriously delinquent” rate has gone parabolic, increasing by roughly 5% sequentially and just under 300% YoY [year-over-year]. As mere text will simply not do this metric justice, please enjoy this chart of the dataset from Blytic. It tells you all you need to know about the Fed’s containment of the housing problem
The August seriously delinquent single-family number comprised of a 2.87% non-credit enhanced delinquencies and a very bothersome 11.52%, consisting of credit enhanced loans… The deterioration of FNM’s book however did not stop it from increasing the size of its book [loans]. In September Fannie’s total book of business hit $3.242 trillion, up from $3.229 trillion in August and $3.079 trillion in the prior year…
…This trend should bother you, dear taxpayer, because it is your money on the hook here, which is not only massively mismanaged by Bernanke & Co., LLC, but which sees another $80 billion of free funding every month courtesy of the dollar printing press to onboard even more toxic garbage onto your balance sheet….
We have been covering the housing mess extensively, not least because we are in the middle of it here in Phoenix. We discussed the impending FHA bailout (which they still deny they need) here. Our coverage of the impending second collapse in housing courtesy of UBS’ think tank here. Some highlights:
Aloha. Please take a second to click the poll below. A few emails have come in requesting an in-depth drilldown of details and expanded coverage of the Making Home Affordable Modification program and I have spent weeks researching for my own interests but before I dive in to more posts on the subject I want to get an idea of how many people want/need the additional info. Gracias.
Housing: Foreclosures still rising – RealtyTrac confirms earlier UBS’ forecast- won’t peak until 2010…
Here is our post on the UBS forecast for housing foreclosures and mortgage defaults
RealtyTrac concurred with UBS’ position today:
Team TOTUS needs to get the programs that they have already announced properly implemented (HAMP, HASP, PPIP) and either a. working or b. scrap them, cut off the funds, and try something else as far as housing is concerned or we will hit that second leg down in conjunction with a rising tax environment a la Congress and the consumer will go down for a generation IMO…
and don’t even think about anything in the Middle East happening to hit oil prices cuz then we will get another 2 years of TOTUS blaming THAT for his economic failure just as he stops blaming Boooosh!
..The second-most powerful Democrat in the Senate called the Obama administration’s mortgage modification program“a waste of time” Wednesday, hours after the White House released disappointing new data about the program’s effectiveness…
…Mr. Frank has been arguing that if the administration’s loan modification efforts, which rely on voluntary participation by mortgage servicers, don’t improve, then the political winds will move in his favor—and against the banks. “Let me put it this way,” he said at Wednesday’s hearing. “The best lobbyists we have for getting bankruptcy legislation passed are the servicers who are not doing a very good job of modifying mortgages. And if they do not improve their performance, then they improve the chances of that legislation.”…
Meredith Whitney mentioned on CNBC this morning that the banks have increased their MBS holdings of all things, are they buying each other’s properties to avoid taking writedowns after 90 days on foreclosed props??
Is that why people are making market offers and getting turned down by the banks? When will the banks get a CLUE that in THIS political environment their best interest is not served by artificially inflating asset values and failing to make MEANINGFUL modifications with the Federal incentive payments and taking a tiny profit, rather than not doing so and being TOTALLY rolled by Frank and Durbin and thereby starting a cycle of bad loans to people who cannot afford the homes all over again???? Hmmmnnn? Memo to banks suck it up, take the hit, walk it off like consumers do before you get reamed by Team TOTUS’ machine…
Hey let’s put on some Ritz MiM style, the grand chief poohbah high muckety mucks of the ivy league intelligentsia Feldstein, Stiglitz, Krugman, Gross you know their names…and they all loved them some Obama…Well now Stiglitz is the latest to go on record echoing MiM’s position which we took here on the blog lo these many moons ago…the flat L leading to the double dip….
Nobel laureate economist Joseph Stiglitz on Thursday gave a gloomy assessment of a rebound in the U.S. economy, saying he does not see a resurgence in the strong consumer spending that has been a key driver of growth.
…But Stiglitz said the U.S. economy faces the possibility of low economic growth over a long-term period or the possibility of a “double-dip” recession whereby a recovery is not sustained.
“It is not possible to predict whether we have a malaise or a W (shaped growth pattern). But there is a significant chance of a W,” he said. “It is not as if the second dip is going to be as bad as the first dip,” he said. Instead, it could mean the economy rotates through a process of low growth followed by contraction.
“We are not seeing a recovery of sustained consumption,” in the United States, said Stiglitz, who said he has been consulted on an informal basis by the Obama Administration to talk about the major economic issues….
Gee I wonder why, ‘we are not seeing a recovery of SUSTAINED CONSUMPTION’?? Could it be because THE FRAKKIN IDIOTS IN DC ARE SCARING THE EVER LOVIN CRXP OUT OF WE CONSUMERS WITH THEIR HARE BRAINED SPENDING AND TAX PLANS??!! HMMMMNNN? Could be rabbit, could be!!! Is TOTUS doing bugs? Would I add this gigantic spending plan if the economy was about to collapse in a second leg down? You might TOTUS you might!
Have said it before, will say it again- What a bunch of maroons. For a group of the ‘Smartest People Evah’ they are awfully dense about how their ‘visionary changes’ impact real world consumers. Their pie in the sky ideas of de-industrializing the US and slowing population growth and greening everything and the greater good, cap and trade, change housing codes nationwide, pay cash for clunkers, take over car companies, then health care, they are really SHOCKED that 21 Century Americans do not want to go all ‘neo socialist Luddite’ with them…
They can claim anything they want, but they pixxed away 800 billion in ways that do not help the consumer feel safe and spend, have jobs and spend, pay off some debt and spend. There is no THERE there in that spendulus. All it did was ADD to consumers low expectations and high deficit concerns. The S & P financials are headed for a second crash IMO, commercial RE is about to hit the FDIC in a wave of bank failures and the end of 2010-11 will see a tripling of the current residential foreclosure wave as we have discussed here before.
They are SOL in the 2010 elections, they simply don’t have the money to fix what they have done with the spent bullets of the spendulus and TARP bazooka, they are out of ammo, the FED is making noises that they are split on continued quantitative easing and MBS purchases. Bill Gross at PIMCO says they will have to stay loose and keep buying to keep rates low or send housing off the second cliff. This is precisely why Krugman was suddenly pro giant deficit and Gross is making noises about the end of stimulus being a problem.
News flash geniuses Americans will not support ANY MORE GIANT SPENDULUS bills. That ship sailed baby, and sunk. It was overloaded with ‘interest group’ payoffs…I heard an analyst on Caterpillar CAT today talking about how the spendulus was less than 3% infrastructure and CAT will not have a bump in 2010. Remember TOTUS in Elkhart and talking with CAT workers? How awful. And now Pete Stark D-outoftouch is talking about laying a tax on all Wall St stock transactions to pay for billions in what? You guessed it INFRASTRUCTURE. Fuggedaboudit.
Treasury is out talking up additional mortgage help for homeowners as they see all this coming, and yet in the face of all this Team TOTUS is STILL going to attempt a 1 trillion dollar health care bill? The Administration needs to find religion and go moderate or 2/3 of Congress can go home in 2010…
Young Frankenstein courtesy of cristiancd
Bugs Bunny courtesy of chrispdx