Foreclosure freeze conspiracy theory

[davelj]

[quote=CA renter][quote=permabear]Back on the original topic, it definitely sounds like the banks themselves have thrown the game.

Related to the “Wells will dump soon” thread, it’s the GSE’s that are supposedly cracking down on delinquent loans:

http://www.dsnews.com/articles/wells-fargo-puts-stop-to-short-sale-extensions-2010-10-01
http://www.dsnews.com/articles/fannie-mae-says-foreclosure-delays-represent-breach-by-servicer-2010-09-02

This would mean an end to the 2+ year squatters that have become the norm – an end to “extend and pretend”. Banks would have to write down losses.

But how to stop this? Call the entire foreclosure process itself into question.[/quote]

Yep. Every time it looks like things might finally be getting back to normal (pre-bubble prices), a wrench is thrown in the works. Extend and pretend, at all costs.[/quote]

I’m curious… What does the “GSEs cracking down on delinquent loans” have to do with banks having to write down losses?

[permabear]

[quote=davelj]I’m curious… What does the “GSEs cracking down on delinquent loans” have to do with banks having to write down losses?[/quote]

Are you being serious? I ask because the chain of events is very straightforward. Delinquent, foreclosed, sold at auction, any loss written down. Once the property is marked to market, the loss is made real – hence the current “extend and pretend”. The GSEs are now explicitly saying that delinquent loans MUST be foreclosed and sold at auction w/i 60 days, rather than at the banks’ leisure as it has been so far.

Since foreclosures just hit a new record in August, AND the banks are already sitting on tons of delinquencies (squatters) that they have neglected to foreclose on, this new scrutiny could cause banks to suddenly have to write down large losses.

[permabear]

[quote=davelj]I’m curious… What does the “GSEs cracking down on delinquent loans” have to do with banks having to write down losses?[/quote]

Are you being serious? I ask because the chain of events is very straightforward. Delinquent, foreclosed, sold at auction, any loss written down. Once the property is marked to market, the loss is made real – hence the current “extend and pretend”. The GSEs are now explicitly saying that delinquent loans MUST be foreclosed and sold at auction w/i 60 days, rather than at the banks’ leisure as it has been so far.

Since foreclosures just hit a new record in August, AND the banks are already sitting on tons of delinquencies (squatters) that they have neglected to foreclose on, this new scrutiny could cause banks to suddenly have to write down large losses.

[permabear]

[quote=davelj]I’m curious… What does the “GSEs cracking down on delinquent loans” have to do with banks having to write down losses?[/quote]

Are you being serious? I ask because the chain of events is very straightforward. Delinquent, foreclosed, sold at auction, any loss written down. Once the property is marked to market, the loss is made real – hence the current “extend and pretend”. The GSEs are now explicitly saying that delinquent loans MUST be foreclosed and sold at auction w/i 60 days, rather than at the banks’ leisure as it has been so far.

Since foreclosures just hit a new record in August, AND the banks are already sitting on tons of delinquencies (squatters) that they have neglected to foreclose on, this new scrutiny could cause banks to suddenly have to write down large losses.

[permabear]

[quote=davelj]I’m curious… What does the “GSEs cracking down on delinquent loans” have to do with banks having to write down losses?[/quote]

Are you being serious? I ask because the chain of events is very straightforward. Delinquent, foreclosed, sold at auction, any loss written down. Once the property is marked to market, the loss is made real – hence the current “extend and pretend”. The GSEs are now explicitly saying that delinquent loans MUST be foreclosed and sold at auction w/i 60 days, rather than at the banks’ leisure as it has been so far.

Since foreclosures just hit a new record in August, AND the banks are already sitting on tons of delinquencies (squatters) that they have neglected to foreclose on, this new scrutiny could cause banks to suddenly have to write down large losses.

[permabear]

[quote=davelj]I’m curious… What does the “GSEs cracking down on delinquent loans” have to do with banks having to write down losses?[/quote]

Are you being serious? I ask because the chain of events is very straightforward. Delinquent, foreclosed, sold at auction, any loss written down. Once the property is marked to market, the loss is made real – hence the current “extend and pretend”. The GSEs are now explicitly saying that delinquent loans MUST be foreclosed and sold at auction w/i 60 days, rather than at the banks’ leisure as it has been so far.

Since foreclosures just hit a new record in August, AND the banks are already sitting on tons of delinquencies (squatters) that they have neglected to foreclose on, this new scrutiny could cause banks to suddenly have to write down large losses.

[davelj]

[quote=permabear][quote=davelj]I’m curious… What does the “GSEs cracking down on delinquent loans” have to do with banks having to write down losses?[/quote]

Are you being serious? I ask because the chain of events is very straightforward. Delinquent, foreclosed, sold at auction, any loss written down. Once the property is marked to market, the loss is made real – hence the current “extend and pretend”. The GSEs are now explicitly saying that delinquent loans MUST be foreclosed and sold at auction w/i 60 days, rather than at the banks’ leisure as it has been so far.

Since foreclosures just hit a new record in August, AND the banks are already sitting on tons of delinquencies (squatters) that they have neglected to foreclose on, this new scrutiny could cause banks to suddenly have to write down large losses.[/quote]

Yes, I’m being completely serious.

I think you’re confused as to the relationship between the GSEs and “the banks.” The GSEs INSURE all of the mortgages they underwrite and securitize. And the GSEs are now owned by the U.S. Government – that is, the American Taxpayers. When a servicer forecloses on a loan that’s held within an MBS insured by a GSE, the GSE – that is, We the People – is on the hook for the loss. NOT the servicer. And NOT the financial institution that holds the MBS being insured by the GSE. Consequently, “the banks leisure” has nothing at all to do with the GSEs. When the GSEs “crack down” and take losses in foreclosure, the holders of the MBS could care less – it’s We the People who are taking the loss.

So, having explained that, I’ll ask you again: What does the “GSEs cracking down on delinquent loans” have to do with banks having to write down losses? If the “chain of events is very straightforward” then you should have no problem explaining it to me.

[davelj]

[quote=permabear][quote=davelj]I’m curious… What does the “GSEs cracking down on delinquent loans” have to do with banks having to write down losses?[/quote]

Are you being serious? I ask because the chain of events is very straightforward. Delinquent, foreclosed, sold at auction, any loss written down. Once the property is marked to market, the loss is made real – hence the current “extend and pretend”. The GSEs are now explicitly saying that delinquent loans MUST be foreclosed and sold at auction w/i 60 days, rather than at the banks’ leisure as it has been so far.

Since foreclosures just hit a new record in August, AND the banks are already sitting on tons of delinquencies (squatters) that they have neglected to foreclose on, this new scrutiny could cause banks to suddenly have to write down large losses.[/quote]

Yes, I’m being completely serious.

I think you’re confused as to the relationship between the GSEs and “the banks.” The GSEs INSURE all of the mortgages they underwrite and securitize. And the GSEs are now owned by the U.S. Government – that is, the American Taxpayers. When a servicer forecloses on a loan that’s held within an MBS insured by a GSE, the GSE – that is, We the People – is on the hook for the loss. NOT the servicer. And NOT the financial institution that holds the MBS being insured by the GSE. Consequently, “the banks leisure” has nothing at all to do with the GSEs. When the GSEs “crack down” and take losses in foreclosure, the holders of the MBS could care less – it’s We the People who are taking the loss.

So, having explained that, I’ll ask you again: What does the “GSEs cracking down on delinquent loans” have to do with banks having to write down losses? If the “chain of events is very straightforward” then you should have no problem explaining it to me.

[davelj]

[quote=permabear][quote=davelj]I’m curious… What does the “GSEs cracking down on delinquent loans” have to do with banks having to write down losses?[/quote]

Are you being serious? I ask because the chain of events is very straightforward. Delinquent, foreclosed, sold at auction, any loss written down. Once the property is marked to market, the loss is made real – hence the current “extend and pretend”. The GSEs are now explicitly saying that delinquent loans MUST be foreclosed and sold at auction w/i 60 days, rather than at the banks’ leisure as it has been so far.

Since foreclosures just hit a new record in August, AND the banks are already sitting on tons of delinquencies (squatters) that they have neglected to foreclose on, this new scrutiny could cause banks to suddenly have to write down large losses.[/quote]

Yes, I’m being completely serious.

I think you’re confused as to the relationship between the GSEs and “the banks.” The GSEs INSURE all of the mortgages they underwrite and securitize. And the GSEs are now owned by the U.S. Government – that is, the American Taxpayers. When a servicer forecloses on a loan that’s held within an MBS insured by a GSE, the GSE – that is, We the People – is on the hook for the loss. NOT the servicer. And NOT the financial institution that holds the MBS being insured by the GSE. Consequently, “the banks leisure” has nothing at all to do with the GSEs. When the GSEs “crack down” and take losses in foreclosure, the holders of the MBS could care less – it’s We the People who are taking the loss.

So, having explained that, I’ll ask you again: What does the “GSEs cracking down on delinquent loans” have to do with banks having to write down losses? If the “chain of events is very straightforward” then you should have no problem explaining it to me.

[davelj]

[quote=permabear][quote=davelj]I’m curious… What does the “GSEs cracking down on delinquent loans” have to do with banks having to write down losses?[/quote]

Are you being serious? I ask because the chain of events is very straightforward. Delinquent, foreclosed, sold at auction, any loss written down. Once the property is marked to market, the loss is made real – hence the current “extend and pretend”. The GSEs are now explicitly saying that delinquent loans MUST be foreclosed and sold at auction w/i 60 days, rather than at the banks’ leisure as it has been so far.

Since foreclosures just hit a new record in August, AND the banks are already sitting on tons of delinquencies (squatters) that they have neglected to foreclose on, this new scrutiny could cause banks to suddenly have to write down large losses.[/quote]

Yes, I’m being completely serious.

I think you’re confused as to the relationship between the GSEs and “the banks.” The GSEs INSURE all of the mortgages they underwrite and securitize. And the GSEs are now owned by the U.S. Government – that is, the American Taxpayers. When a servicer forecloses on a loan that’s held within an MBS insured by a GSE, the GSE – that is, We the People – is on the hook for the loss. NOT the servicer. And NOT the financial institution that holds the MBS being insured by the GSE. Consequently, “the banks leisure” has nothing at all to do with the GSEs. When the GSEs “crack down” and take losses in foreclosure, the holders of the MBS could care less – it’s We the People who are taking the loss.

So, having explained that, I’ll ask you again: What does the “GSEs cracking down on delinquent loans” have to do with banks having to write down losses? If the “chain of events is very straightforward” then you should have no problem explaining it to me.

[davelj]

[quote=permabear][quote=davelj]I’m curious… What does the “GSEs cracking down on delinquent loans” have to do with banks having to write down losses?[/quote]

Are you being serious? I ask because the chain of events is very straightforward. Delinquent, foreclosed, sold at auction, any loss written down. Once the property is marked to market, the loss is made real – hence the current “extend and pretend”. The GSEs are now explicitly saying that delinquent loans MUST be foreclosed and sold at auction w/i 60 days, rather than at the banks’ leisure as it has been so far.

Since foreclosures just hit a new record in August, AND the banks are already sitting on tons of delinquencies (squatters) that they have neglected to foreclose on, this new scrutiny could cause banks to suddenly have to write down large losses.[/quote]

Yes, I’m being completely serious.

I think you’re confused as to the relationship between the GSEs and “the banks.” The GSEs INSURE all of the mortgages they underwrite and securitize. And the GSEs are now owned by the U.S. Government – that is, the American Taxpayers. When a servicer forecloses on a loan that’s held within an MBS insured by a GSE, the GSE – that is, We the People – is on the hook for the loss. NOT the servicer. And NOT the financial institution that holds the MBS being insured by the GSE. Consequently, “the banks leisure” has nothing at all to do with the GSEs. When the GSEs “crack down” and take losses in foreclosure, the holders of the MBS could care less – it’s We the People who are taking the loss.

So, having explained that, I’ll ask you again: What does the “GSEs cracking down on delinquent loans” have to do with banks having to write down losses? If the “chain of events is very straightforward” then you should have no problem explaining it to me.

[permabear]

Sound reasoning. But you forgot second mortgages.

[quote]One of the barriers to liquidation is the write downs required by “solvent” banks (we all know most of them are not solvent). A huge problem within the GSE portfolios is that the servicers of delinquent loans are intentionally delaying foreclosure when the parent bank holds the second mortgage.

For example, let’s say that Bank of America is the servicer on a delinquent first mortgage. Their servicer agreement with the GSEs lays out a procedure to mitigate losses for the GSE portfolio. If there is no second mortgage, servicers will generally follow these procedures to the letter, and in the end, most properties end up in foreclosure. However, if Bank of America is the servicer, and they also hold the second mortgage, they do not follow standard procedure because the resulting foreclosure will cause them to lose most or all of the value in the second mortgage.[/quote]

Links:

http://www.irvinehousingblog.com/blog/comments/government-expedites-foreclosures-threatens-banking-cartel/

GSEs Announce A Policy Of Loss Mitigation Which Imperils The Banking Industry’s Shadow Inventory Of Homes And The Squatters Entitlement Of Payment Free Living

[permabear]

Sound reasoning. But you forgot second mortgages.

[quote]One of the barriers to liquidation is the write downs required by “solvent” banks (we all know most of them are not solvent). A huge problem within the GSE portfolios is that the servicers of delinquent loans are intentionally delaying foreclosure when the parent bank holds the second mortgage.

For example, let’s say that Bank of America is the servicer on a delinquent first mortgage. Their servicer agreement with the GSEs lays out a procedure to mitigate losses for the GSE portfolio. If there is no second mortgage, servicers will generally follow these procedures to the letter, and in the end, most properties end up in foreclosure. However, if Bank of America is the servicer, and they also hold the second mortgage, they do not follow standard procedure because the resulting foreclosure will cause them to lose most or all of the value in the second mortgage.[/quote]

Links:

http://www.irvinehousingblog.com/blog/comments/government-expedites-foreclosures-threatens-banking-cartel/

GSEs Announce A Policy Of Loss Mitigation Which Imperils The Banking Industry’s Shadow Inventory Of Homes And The Squatters Entitlement Of Payment Free Living

[permabear]

Sound reasoning. But you forgot second mortgages.

[quote]One of the barriers to liquidation is the write downs required by “solvent” banks (we all know most of them are not solvent). A huge problem within the GSE portfolios is that the servicers of delinquent loans are intentionally delaying foreclosure when the parent bank holds the second mortgage.

For example, let’s say that Bank of America is the servicer on a delinquent first mortgage. Their servicer agreement with the GSEs lays out a procedure to mitigate losses for the GSE portfolio. If there is no second mortgage, servicers will generally follow these procedures to the letter, and in the end, most properties end up in foreclosure. However, if Bank of America is the servicer, and they also hold the second mortgage, they do not follow standard procedure because the resulting foreclosure will cause them to lose most or all of the value in the second mortgage.[/quote]

Links:

http://www.irvinehousingblog.com/blog/comments/government-expedites-foreclosures-threatens-banking-cartel/

GSEs Announce A Policy Of Loss Mitigation Which Imperils The Banking Industry’s Shadow Inventory Of Homes And The Squatters Entitlement Of Payment Free Living

[permabear]

Sound reasoning. But you forgot second mortgages.

[quote]One of the barriers to liquidation is the write downs required by “solvent” banks (we all know most of them are not solvent). A huge problem within the GSE portfolios is that the servicers of delinquent loans are intentionally delaying foreclosure when the parent bank holds the second mortgage.

For example, let’s say that Bank of America is the servicer on a delinquent first mortgage. Their servicer agreement with the GSEs lays out a procedure to mitigate losses for the GSE portfolio. If there is no second mortgage, servicers will generally follow these procedures to the letter, and in the end, most properties end up in foreclosure. However, if Bank of America is the servicer, and they also hold the second mortgage, they do not follow standard procedure because the resulting foreclosure will cause them to lose most or all of the value in the second mortgage.[/quote]

Links:

http://www.irvinehousingblog.com/blog/comments/government-expedites-foreclosures-threatens-banking-cartel/

GSEs Announce A Policy Of Loss Mitigation Which Imperils The Banking Industry’s Shadow Inventory Of Homes And The Squatters Entitlement Of Payment Free Living

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