Home lenders look for alternatives to repossessing homes

August 9, 2012 by · Leave a Comment
Filed under: Industry News, Real Estate News 

We should be looking at all creative areas to help homeowners go through this restructuring process with the goal of making it as least painful as reasonable possible.   At the same time we want to assist the banks in reducing their debt load.  Setting more realistic real estate prices are another effect of clearing all the delinquent inventory.  

Even allowing homeowners to temporary rent and repurchase the home at a normalized fair market plan would be an equitable option for people who still want to retain their home.  Outside of prosecuting crimes that caused this overhang, getting prices and inventory down is a priority at this point.  This is a principle that can be applied globally.  This is what I would consider real financial innovation, you need a real problem before you can truly innovate in most cases.

 

USA Today –  The number of homes that received an initial notice of default — first step in the foreclosure process — was 6% higher in July than last year, foreclosure listing firm RealtyTrac said Thursday. Filings of initial default notices have increased on an annual basis three months in a row.

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Short Sales gaining on REO sales as “Change is Afoot”

April 27, 2012 by · Leave a Comment
Filed under: REO News 

Interesting data and charts.

Mortgage News Daily – RealtyTrac said on Thursday, releasing new data which indicate, based on January’s numbers, that pre-foreclosure sales (most of which are so-called short sales) in the first quarter were the highest since the first quarter of 2009.

In theory, the company said, a short sale has long been viewed as an “elegant solution” to the nation’s foreclosure problem.  A short sale, in which the lender accepts less money than it is owed, provides a win-win-win for the buyer, bank, and even the seller.  “The buyer purchases a house they want at a price they can afford, the bank gets the best price for its distressed asset, and the seller walks away from a mountain of debt, free to get a fresh start.”

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Survey Finds Short Sales Outnumber REO in January Purchases

February 22, 2010 by · Leave a Comment
Filed under: REO News 

Short sales accounted for 15.9% of home purchases in January, surpassing the share of other distressed property activity, when real estate owned (REO) properties are measured separately, according to a monthly Campbell/Inside Mortgage Finance (IMF) survey of more than 1,500 real estate agents, conducted by Campbell Surveys.

The share purchases taken up by short sales surpassed the share of move-in-ready REO purchases (13.8%) and damaged REO (13.4%).

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SEC May Require Disclosure of Hedge Funds’ Short-Sale Positions

September 17, 2008 by · Leave a Comment
Filed under: Legal News 

Where is the manipulation? Under the rug? Under the bed? Under the desk? I guess they are in the hedge funds are the reason for this precipitous drop in the stock market….NOT! Let me put forth an alternative theory for what is happening. Maybe, just maybe it might be this huge expansion of credit in every aspect of commercial life from finance, real estate, consumer debt, autos, student loans(personally this is the only one I give a pass on) auction-rate debt etc…. and now with this last vestige of fee making frenzy the credit-default swap or CDS.

Now we are at the end, this is it if we actually want to call our markets free. These nice little unregulated and unreserved instrument is the pinnacle of our financial ingenuity, the only problem is no one actually took the time to ask the basic question “what if a bunch of parties or counter-parties fail?”. Now after my rant is complete ask yourself this question, if you don’t carry a reserve against these, your buddies don’t, every major institution participates for the fees and then let it get to the point of $1.44 quadrillion dollars worth of these and they are going default and make the contract requires performance of this corporate debt insurance……what happens? Good question, I have read quite a large amount of monetary theory from all spectrum and they all come to the same two answers which are both very very very fun.

1. Institutions fail by way of INSOLVENCY

2. You issue currency for the deficit and unless you have had productive growth for the same amount you create INFLATION

The Federal Reserve and the World have a hard question to answer and either choice has consequences that are no fun. I would suggest thinking about the precedence you are going to set and if that is the policy for the future then chose that answer. I am not being alarmist, just a realist and right now that is just what we need before we make a mistake that will be almost impossible to come back from.

SEC News:

The U.S. Securities and Exchange Commission may require hedge funds to disclose their short-sale positions and plans to subpoena the funds’ communication records in an effort to stem turmoil in stock markets.

Hedge funds and investors managing more than $100 million in securities would be “required to promptly begin public reporting of their daily short positions,” Chairman Christopher Cox said in a statement late yesterday. The agency will obtain “disclosure from significant hedge funds” regarding “past trading positions in specific securities,” Cox said.

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