Mortgage Settlement Is Just Another Stealth Bank Bailout

Yet Another Bailout for the Giant Banks … Homeowners Get Hosed Again

The 50-state settlement with the banks (Oklahoma didn’t sign, but supports letting the banks go scot-free) over mortgage fraud is a stealth bank bailout, according to many top observers. See this, this, this, this, this, this, this and this.

This is par for the course … All of Obama’s previous “mortgage relief” programs have really been stealth bank bailouts which screwed the homeowner. And see this.

For example:

Most independent experts say that the government’s housing programs have been a failure. That’s too bad, given that the housing slump is now … worse than during the Great Depression.

Indeed, PhD economists John Hussman and Dean Baker, fund manager and financial writer Barry Ritholtz and New York Times’ writer Gretchen Morgenson say that the only reason the government keeps giving billions to Fannie and Freddie is that it is really a huge, ongoing, back-door bailout of the big banks.

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via Mortgage Settlement Is Just Another Stealth Bank Bailout.

Mortgage deal could aid homeowners on the brink | StarTribune.com

About 1 million homeowners facing foreclosure could have their mortgage burden cut by about $20,000 each as part of a long-awaited deal taking shape among state attorneys general, federal officials and the nation’s largest mortgage servicers.

But a final agreement remained out of reach Monday despite political pressure from the White House, which has been pressing to have a deal in hand that President Obama could highlight in his State of the Union address Tuesday night.

The housing secretary, Shaun Donovan, met Monday in Chicago with Democratic attorneys general to iron out the remaining details and to persuade holdouts to agree with any eventual deal. He later held a conference call with Republican attorneys general. But as he renewed his efforts, Democrats in Congress, advocacy groups like MoveOn.org and several crucial attorneys general said the deal might be too lenient on the banks.

The agreement could be worth about $25 billion, state and federal officials with knowledge of the negotiations said, with up to $17 billion of that used to reduce principal for homeowners facing foreclosure. Another portion would be set aside for homeowners who have been the victim of improper foreclosure practices, with about 750,000 families receiving about $1,800 each. But bank officials said Monday that the total amount of principal reduction and reimbursement would depend on how many states eventually sign on.

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via Mortgage deal could aid homeowners on the brink | StarTribune.com.

JPMorgan Chase Sued For $95 Million Over Allegedly Misrepresenting Mortgage Loans

JPMorgan Chase & Co has been sued for $95 million by the trustee for securities marketed in 2005 by the former Bear Stearns Cos over alleged misrepresentations regarding the underlying mortgage loans.

US Bank NA wants to force JPMorgan to buy back the mortgage loans because of alleged breaches of representations and warranties regarding the Bear Stearns Asset Backed Securities Trust 2005-4, for which it serves as trustee.

It also said JPMorgan has refused to provide the underlying loan, as the trust documents require, so it can investigate the extent of the alleged breaches.

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via JPMorgan Chase Sued For $95 Million Over Allegedly Misrepresenting Mortgage Loans.

via JPMorgan Chase Sued For $95 Million Over Allegedly Misrepresenting Mortgage Loans.

3.5 Million Homeless and 18.5 Million Vacant Homes in the US

The National Economic and Social Rights Initiative along with Amnesty International are asking the U.S. to step up its efforts to address the foreclosure crisis, including by giving serious consideration to the growing call for a foreclosure moratorium and other forms of relief for those at risk, and establishing a housing finance system that fulfills human rights obligations.

New government census reports have revealed disturbing information that details the cold, hard numbers of Americans who have been deeply affected by the state of our economy, and bank foreclosure practices:

In the last few days, the U.S. government census figures have revealed that 1 in 2 Americans have fallen into poverty or are struggling to live on low incomes. And we know that the financial hardships faced by our neighbors, colleagues, and others in our communities will be all the more acutely felt over the holiday season.

Along with poverty and low incomes, the foreclosure rate has created its own crisis situation as the number of families removed from their homes has skyrocketed.

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via 3.5 Million Homeless and 18.5 Million Vacant Homes in the US | Occupy America.

Foreclosure sales still pummeling home prices

Nearly five years into the crisis, foreclosures are still weighing heavily on home prices.

A whopping 46% of homes sold in November were either short sales or REOs — as homes repossessed by lenders are called, according to a survey by Campbell/Inside Mortgage Finance. One problem: Distressed homes sell for a lot less than homes sold by conventional sellers. The average price for a short sale (when borrowers owe the bank more than their homes are worth) was $209,000 in November. For a regular sale, the average was about $259,000.

The numbers are even worse for REOs, which averaged about $190,000 for properties in move-in condition.

For a damaged REO, the price was just $99,000. That’s a common problem, since homeowners who’ve been foreclosed on don’t typically devote resources to upkeep.

There is no shortage of distressed properties: More than 6 million borrowers are delinquent 30 or more days, according to LPS Applied Analytics. Two million are already in the foreclosure process, and most of these homes will be repossessed or sold as short sales.

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via Foreclosure sales still pummeling home prices – Yahoo! Finance.

Bailout Payback? Realtors Double-Counted Home Sales For Last Five Years

In 2011, Forbes’ 23rd ‘Most Powerful Woman In The World’, HHS Secretary, Kathleen Sebelius was caught double-counting in the ObamaCare budget. Since then, the scandal has been ‘forgotten‘ – deep sixed.

Long shot, I know… but it’s as if Kathleen Sebelius, Goldman Sachs, GE, GM, Solyndra, Verizon, Toyota, National Association of Realtors and so many others knew all along there would be zero penalty for cooking the books.

Try double-counting your tax write-off’s…

The good news is, we know for sure that reported US Unemployment and National Debt figures are spot on.

Bailout Payback? Realtors Double-Count Home Sales For Five Years

(CNBC) Data on sales of previously owned U.S. homes from 2007 through October this year will be revised down next week because of double counting, indicating a much weaker housing market than previously thought.

The National Association of Realtors said a benchmarking exercise had revealed that some properties were listed more than once, and in some instances, new home sales were also captured.

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via Bailout Payback? Realtors Double-Counted Home Sales For Last Five Years.

Re-Defaults Flood Foreclosure Inventory

Nearly half, 45 percent, of October foreclosure starts were redefaults—mortgages which had previously defaulted and were modified unsuccessfully either by the lender or the federal government. About 105,000 redefaults increased total foreclosure starts in October to 232,865, 11.5 percent more than the level of a year ago.

These double losers are flooding the foreclosure inventory at a time when foreclosure sales are so slow that starts outnumber sales by a factor of three to one. The national foreclosure inventory hit an all-time high at the end of October of 4.29 percent of all active mortgages. Some 3.9 million loans are delinquent 90 days or more or in foreclosure, according to Lender Processing Services’ November Mortgage Monitor. LPS also reported that processing has slowed to point that the average foreclosure takes 632 days to process and sell.

The result is a huge inventory of empty homes that is still growing faster than it can be absorbed by the marketplace despite fewer defaults. The very existing of this glut of foreclosed properties, even if they are not yet listed for sale, depresses local home values and delays the housing recovery. Even as overall defaults have declined by about 30 percent, redefaults have increased this year, from about 32 percent of all defaults in January, increasing the foreclosure inventory with modification failures.

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via Two-time Losers Flood Foreclosure Inventory – UPI.com.

You Want to See a Sobering Real Estate Chart?

For most people, Friday’s just the day before the weekend. Here at Wall Street Daily, though, it’s much more.

It’s the day I sum up the week’s most important economic and investment news. And I do it without all the claptrap. Instead, I let some carefully selected graphics do most of the talking for me.

This week, we have a sobering reminder that the U.S. residential real estate market still stinks. (Don’t kill the messenger.) But before we get to such a depressing note, let’s start with an interesting observation about the never-ending debt crisis in Europe…

The Euro Crisis That Never Ends

This is the crisis that doesn’t end,

Yes, it goes on and on my friend,

Some people are worrying how bad Europe’s debt problem was

And they’ll keep worrying about it forever just because.

You’ve got to be just as tired of it as me. Every financial newscast, blog, newsletter, magazine, newspaper and conversation with friends is dominated by the dreaded debt crisis in Europe.

I get it. Fear sells. People are really worried. Not to mention, stocks are getting whipsawed back and forth on each new development.

But you know what almost no one’s talking about? That stocks in the beloved BRIC countries – Brazil, Russia, India, China – are getting clobbered, too.

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via You Want to See a Sobering Real Estate Chart? | Wall Street Daily.

via You Want to See a Sobering Real Estate Chart?.

And You Thought the Real Estate Bust Was Over

by John Rubino on November 7, 2011

This week all eyes are on Greece and Italy, which is reasonable since they’re likely to be pretty entertaining. But as incredible as it sounds, PIIGS country sovereign debt might not even be the biggest banking-system threat on the immediate horizon. It turns out that the largest European banks have held onto — and apparently failed to mark down — a mountain of crappy paper from the housing bubble:

Old Debts Dog Europe’s Banks

European banks are sitting on heaps of exotic mortgage products and other risky assets that predate the financial crisis, adding to pressure on lenders that also are holding large quantities of euro-zone government debt.

Four years after instruments like “collateralized debt obligations” and “leveraged loans” became dirty words because of the massive losses they inflicted on holders, European banks still own tens of billions of euros of such assets. They also have sizable portfolios of U.S. commercial real-estate loans and subprime mortgages that could remain under pressure until the global economy recovers.

While the assets largely originated in the U.S. financial system, top American banks have moved faster than their European counterparts to rid themselves of the majority of such detritus.

Sixteen top European banks are holding a total of about €386 billion ($532 billion) of potentially suspect credit-market and real-estate assets, according to a recent report by Credit Suisse analysts. That’s more than the €339 billion of Greek, Irish, Italian, Portuguese and Spanish government debt that those same banks were holding at the end of last year, according to European “stress test” data.

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via And You Thought the Real Estate Bust Was Over — DollarCollapse.com.

Home prices heading for triple-dip – Oct. 31, 2011

NEW YORK (CNNMoney) — The besieged housing market has even further to fall before home prices really hit rock bottom.

According to Fiserv (FISV), a financial analytics company, home values are expected to fall another 3.6% by next June, pushing them to a new low of 35% below the peak reached in early 2006 and marking a triple dip in prices.

Several factors will be working against the housing market in the upcoming months, including an increase in foreclosure activity and sustained high unemployment, explained David Stiff, Fiserv’s chief economist.

Should home values meet Fiserv’s expectations, it would make it the third (and lowest) trough for home prices since the housing bubble burst.

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via Home prices heading for triple-dip – Oct. 31, 2011.