Delinquencies and foreclosures and inventory are all rising. But the current market is controlled by the banking cartel who is hoping to limit available inventory to force you to over pay for a home.
Irvine Home Address … 133 DANBROOK Irvine, CA 92603
Resale Home Price …… Listed at: $320,000
Ooo and it's alright and it's comin' 'long
We got to get right back to where we started from
Love is good, love can be strong
We got to get right back to where we started from
Maxine Nightingale — Right Back Where We Started From
The last year has been a complete waste of time and resources as the government and the banking cartel conspired to prop up prices through taxpayer incentives and the Federal Reserve printing a lot of money. Delinquencies and foreclosures are rising, inventory is creeping up, and resale volume is low. Together these circumstances provide the market an illusion of stability and prosperity.
All our efforts have really accomplished is to delay the losses lenders must take before clearing the market at affordable prices, and in the process, we have cajoled many people into overpriced real estate and a lifetime of debt service. Our government puts the interests of bankers above the interests of the citizens of the United States.
By RUTH SIMON
In another encouraging sign for the U.S. housing market, mortgage delinquencies fell in March for the second month in a row, according to new data.
The number of mortgage loans that were at least 30 days past due or in foreclosure declined 8.6% in March, according to LPS Applied Analytics, which tracks loan performance. The biggest slide came in loans that were 30 days past due. Such loans fell by a record 342,000 to roughly 1.45 million, a level not seen since spring 2008.
Delinquencies nearly always fall in February and March as evidenced by the last five years shown in the related chart below. The monthly drops aren't reason to celebrate.
The graphic does show a decline in the percentage of loans in default, but this is a direct result of HAMP loan modifications, most of which are doomed to fail.
Ignoring the misleading headlines about declining delinquencies, what is the truth of the situation?
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
Back to Mortgage Delinquencies Decline Again:
… There is still plenty of pain left in the mortgage sector. More than 320,000 loans that started the year current were at least 60 days past due at the end of March, according to LPS. More than 3.6 million homes will be lost from 2010 to 2012 because borrowers can't make their loan payments, Moody's Economy.com estimates.
Among other reasons for caution, mortgage delinquencies typically fall in February and March as borrowers get their tax refunds, said Lou Tisler, executive director of Neighborhood Housing Services of Greater Cleveland, which works with financially troubled homeowners. In the Cleveland area, foreclosure filings are on pace to equal the highs of 2008.
So the reporter comes back to the fact that negates her rosy headline later in the article.
Have you noticed that pattern before? Reporters start with a few rosy statistics, often taken out of context, then they proceed to fill in the story with the gory details of a deteriorating picture. Here we are in April 2010, and the reality of the housing market hasn't changed. It was like the market was encased in amber in early 2009, and we have been waiting for the collective incompetence on Wall Street and in Washington to get out of the way and let the market clear.
The number of borrowers seeking aid also continues to rise. At Consumer Credit Counseling Service of Greater Atlanta, foreclosure-prevention counseling sessions were up 4.7% through March compared with a year earlier. "We're probably seeing, at mortgage-counseling programs across the country, 5,000 to 7,000 new people a week," says Douglas Robinson, a spokesman for NeighborWorks America, which administers the government's national foreclosure-mitigation-counseling program.
Some borrowers are being helped by the Obama administration's foreclosure-prevention program and other modification efforts. Irma Bravo, the owner of a cleaning service in San Diego, recently received a loan workout that lowers the monthly payment on her $522,000 mortgage to $1,736 from nearly $5,000.
"It's a big, big relief," Ms. Bravo says.
No kidding! Of course, this borrower is now paying on a government sponsored Option ARM, but they have put off foreclosure for a few years.
Through March, more than 230,000 borrowers have received permanent modifications through the government program, according to the Treasury Department. It isn't clear how many borrowers will remain current once their loan is modified. [LOL! very few will remain current]
But getting a loan workout remains difficult. "There are still a huge number of cases in the pipeline or on hold," said Gabe del Rio, a senior vice president with Community HousingWorks in San Diego, which counsels borrowers facing foreclosure.
Yes, there is a substantial pipeline of new delinquencies and foreclosures. When will they release them for sale? We have been tracking the success rate at auction recently, and in many markets, more than 90% of properties scheduled for auction are postponed at the last minute. Lenders keep playing the music.
I found another chart very revealing: the cure ratio is still lopsided which means more loans are going bad than are getting better. The more loans we modify the more behind we get.
At least it is getting better, right?
This next chart is really disturbing. A third of all delinquent borrowers have been squatting for over a year.
For every delinquent borrower in California not in foreclosure — that means they stopped paying and no notices have been filed — thirty six percent have not made a payment in over twelve months. That is shadow inventory, a squatter's paradise. The banks have not begun foreclosure proceedings against these people, and as you can see from the data, it is not a phenomenon isolated to California.
At least the economy is seeing some benefit from all this squatting. $10 Billion a Month Freed up Each Month from People not paying their Mortgage. $1.9 Billion of That is in California so People can continue Leasing their SUV Mercedes and Getting Tans. Thanks Bailouts!
For those worried about taxpayer losses, this next chart will cause you to lose sleep.
FHA loan performance is slightly better than subprime, option ARM and Alt-A. Hurray! We as taxpayers are going to lose a great deal of money.
Very interesting data. Check out the PDF of the full report for yourself.
The banking cartel
Does the housing bubble seem like it is resolved? Can we celebrate the bottom and the return to prosperity? Can the government sponsored banking cartel hold together and keep prices high through supply restriction? Is that a good thing?
The supply constriction cartel arrangement is particularly maddening. Does anyone remember gas lines in the 1970s? How do you feel about OPEC?
There is really no difference between OPEC and the banking cartel withholding our housing inventory. For their own enrichment both cartels act to control the supply of a resource we cannot do without. If houses are made scarce enough, the few desperate buyers will bid higher than they otherwise would. That is the goal of the cartel.
Not just is our government permitting this injustice, they are actively encouraging it.
- Your government wants you to overpay for housing.
- Your government wants you to either settle for less housing or pledge all your income to their lending overlords.
- Your government wants existing debtors to overpay for housing and stay trapped underwater in debt servitude for a lifetime.
- Your government wants to screw you in order to enrich stupid greedy bankers.
An example of the cartel in action….
807 Days on the Market
Irvine Home Address … 133 DANBROOK Irvine, CA 92603
Resale Home Price … $320,000
Home Purchase Price … $445,000
Home Purchase Date …. 3/25/2005
Net Gain (Loss) ………. $(144,200)
Percent Change ………. -28.1%
Annual Appreciation … -5.3%
Cost of Ownership
$320,000 ………. Asking Price
$11,200 ………. 3.5% Down FHA Financing
5.16% …………… Mortgage Interest Rate
$308,800 ………. 30-Year Mortgage
$67,471 ………. Income Requirement
$1,688 ………. Monthly Mortgage Payment
$277 ………. Property Tax
$0 ………. Special Taxes and Levies (Mello Roos)
$27 ………. Homeowners Insurance
$80 ………. Homeowners Association Fees
$2,072 ………. Monthly Cash Outlays
-$161 ………. Tax Savings (% of Interest and Property Tax)
-$360 ………. Equity Hidden in Payment
$23 ………. Lost Income to Down Payment (net of taxes)
$40 ………. Maintenance and Replacement Reserves
$1,614 ………. Monthly Cost of Ownership
Cash Acquisition Demands
$3,200 ………. Furnishing and Move In @1%
$3,200 ………. Closing Costs @1%
$3,088 ………… Interest Points @1% of Loan
$11,200 ………. Down Payment
$20,688 ………. Total Cash Costs
$24,700 ………… Emergency Cash Reserves
$45,388 ………. Total Savings Needed
Baths: 1 bath
Home size: 822 sq ft
($389 / sq ft)
Lot Size: n/a
Year Built: 2004
Days on Market: 807
MLS Number: S521349
Property Type: Condominium, Residential
Community: Turtle Ridge
According to the listing agent, this listing may be a pre-foreclosure or short sale.
This property is in backup or contingent offer status.
Best deal in Turtle Ridge! Better then a model, granite counters, designer paint, berber carpet, upgraded bathroom, and much more. There is a garage with direct access, a fireplace, and air conditioning. This is a primo location with access to Newport Beach, Fashion Island, The Spectrum and the Beach! There is a really nice community pool and spa with clubhouse and nearby walking trails. only way to be in the area for this price! Only one of a few 1 bedrooms every built!
Inspired by Soylent Green Is People….