Where the Shadow inventory might be hiding.

[gandalf]

davelj, how does this apply after the loan has been pooled, sold and securitized, with ownership of the debt instrument transferred from originating bank to whatever corporate vehicle owns the pool behind a given security? Bank servicing the loan is typically no longer the owner, just an agent of the owner, correct? If so, how do the above rules apply? Just curious if you had some insights into how this works.

[Troubled Loner]

Perhaps some of the banks are holding off, hoping and waiting for the federal bailout programs to take the homes off their hands for more than they could get in the foreclosure market.

A good friend of mine stopped making payments on his home about 10 months ago. He starting getting calls from his lender, Countrywide, harassing him almost daily to make payments. My friend kept telling them he had no money to pay them, and to go ahead and foreclose on him. He has not heard from them since, no foreclosure notices, nothing. He said he is going to stay as long as he can. I wonder how many other situations like this exist…

[Troubled Loner]

Perhaps some of the banks are holding off, hoping and waiting for the federal bailout programs to take the homes off their hands for more than they could get in the foreclosure market.

A good friend of mine stopped making payments on his home about 10 months ago. He starting getting calls from his lender, Countrywide, harassing him almost daily to make payments. My friend kept telling them he had no money to pay them, and to go ahead and foreclose on him. He has not heard from them since, no foreclosure notices, nothing. He said he is going to stay as long as he can. I wonder how many other situations like this exist…

[Troubled Loner]

Perhaps some of the banks are holding off, hoping and waiting for the federal bailout programs to take the homes off their hands for more than they could get in the foreclosure market.

A good friend of mine stopped making payments on his home about 10 months ago. He starting getting calls from his lender, Countrywide, harassing him almost daily to make payments. My friend kept telling them he had no money to pay them, and to go ahead and foreclose on him. He has not heard from them since, no foreclosure notices, nothing. He said he is going to stay as long as he can. I wonder how many other situations like this exist…

[Troubled Loner]

Perhaps some of the banks are holding off, hoping and waiting for the federal bailout programs to take the homes off their hands for more than they could get in the foreclosure market.

A good friend of mine stopped making payments on his home about 10 months ago. He starting getting calls from his lender, Countrywide, harassing him almost daily to make payments. My friend kept telling them he had no money to pay them, and to go ahead and foreclose on him. He has not heard from them since, no foreclosure notices, nothing. He said he is going to stay as long as he can. I wonder how many other situations like this exist…

[Troubled Loner]

Perhaps some of the banks are holding off, hoping and waiting for the federal bailout programs to take the homes off their hands for more than they could get in the foreclosure market.

A good friend of mine stopped making payments on his home about 10 months ago. He starting getting calls from his lender, Countrywide, harassing him almost daily to make payments. My friend kept telling them he had no money to pay them, and to go ahead and foreclose on him. He has not heard from them since, no foreclosure notices, nothing. He said he is going to stay as long as he can. I wonder how many other situations like this exist…

[Anonymous]

This is explosive stuff. If I had a tv show, I’d put this guy in shadow and disguise his voice and let everybody know what’s going on.

[Anonymous]

This is explosive stuff. If I had a tv show, I’d put this guy in shadow and disguise his voice and let everybody know what’s going on.

[Anonymous]

This is explosive stuff. If I had a tv show, I’d put this guy in shadow and disguise his voice and let everybody know what’s going on.

[Anonymous]

This is explosive stuff. If I had a tv show, I’d put this guy in shadow and disguise his voice and let everybody know what’s going on.

[Anonymous]

This is explosive stuff. If I had a tv show, I’d put this guy in shadow and disguise his voice and let everybody know what’s going on.

[davelj]

[quote=gandalf]davelj, how does this apply after the loan has been pooled, sold and securitized, with ownership of the debt instrument transferred from originating bank to whatever corporate vehicle owns the pool behind a given security? Bank servicing the loan is typically no longer the owner, just an agent of the owner, correct? If so, how do the above rules apply? Just curious if you had some insights into how this works.[/quote]

Totally different set of rules apply to securitization trusts because they’re not FDIC-insured institutions. Theoretically, the servicer has to keep accurate records for the pool – e.g., late payment history (30, 60, 90, 180 days delinquent, etc.), foreclosures, recoveries, etc. But other than servicing and record-keeping, that’s all the servicer cares about. Now, it’s possible that servicers (who are servicing the securitizations) also don’t have enough manpower to handle their REOs and/or are feeling pressure from the government to avoid foreclosing. But I don’t think they have any real economic (that is, “avoiding losses”) incentive to keep REOs from getting sold. Does that make sense?

[davelj]

[quote=gandalf]davelj, how does this apply after the loan has been pooled, sold and securitized, with ownership of the debt instrument transferred from originating bank to whatever corporate vehicle owns the pool behind a given security? Bank servicing the loan is typically no longer the owner, just an agent of the owner, correct? If so, how do the above rules apply? Just curious if you had some insights into how this works.[/quote]

Totally different set of rules apply to securitization trusts because they’re not FDIC-insured institutions. Theoretically, the servicer has to keep accurate records for the pool – e.g., late payment history (30, 60, 90, 180 days delinquent, etc.), foreclosures, recoveries, etc. But other than servicing and record-keeping, that’s all the servicer cares about. Now, it’s possible that servicers (who are servicing the securitizations) also don’t have enough manpower to handle their REOs and/or are feeling pressure from the government to avoid foreclosing. But I don’t think they have any real economic (that is, “avoiding losses”) incentive to keep REOs from getting sold. Does that make sense?

[davelj]

[quote=gandalf]davelj, how does this apply after the loan has been pooled, sold and securitized, with ownership of the debt instrument transferred from originating bank to whatever corporate vehicle owns the pool behind a given security? Bank servicing the loan is typically no longer the owner, just an agent of the owner, correct? If so, how do the above rules apply? Just curious if you had some insights into how this works.[/quote]

Totally different set of rules apply to securitization trusts because they’re not FDIC-insured institutions. Theoretically, the servicer has to keep accurate records for the pool – e.g., late payment history (30, 60, 90, 180 days delinquent, etc.), foreclosures, recoveries, etc. But other than servicing and record-keeping, that’s all the servicer cares about. Now, it’s possible that servicers (who are servicing the securitizations) also don’t have enough manpower to handle their REOs and/or are feeling pressure from the government to avoid foreclosing. But I don’t think they have any real economic (that is, “avoiding losses”) incentive to keep REOs from getting sold. Does that make sense?

[davelj]

[quote=gandalf]davelj, how does this apply after the loan has been pooled, sold and securitized, with ownership of the debt instrument transferred from originating bank to whatever corporate vehicle owns the pool behind a given security? Bank servicing the loan is typically no longer the owner, just an agent of the owner, correct? If so, how do the above rules apply? Just curious if you had some insights into how this works.[/quote]

Totally different set of rules apply to securitization trusts because they’re not FDIC-insured institutions. Theoretically, the servicer has to keep accurate records for the pool – e.g., late payment history (30, 60, 90, 180 days delinquent, etc.), foreclosures, recoveries, etc. But other than servicing and record-keeping, that’s all the servicer cares about. Now, it’s possible that servicers (who are servicing the securitizations) also don’t have enough manpower to handle their REOs and/or are feeling pressure from the government to avoid foreclosing. But I don’t think they have any real economic (that is, “avoiding losses”) incentive to keep REOs from getting sold. Does that make sense?

[Author]

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