[LesBaer45]

Apparently the servicers don’t want the properties, at least not yet.

Higher Losses Help Explain Foreclosure Drop
Copyright © Dow Jones & Company, Inc. All Rights Reserved. solutions.dowjones.com/tnt

Financial companies aren’t foreclosing on home mortgages nearly as quickly as they used to, and there is a simple, if not immediately obvious, reason why.

Data released last week by the Federal Reserve shows that homeowners who have gone more than three months without paying their mortgage were about half as likely to be put into foreclosure in May (the latest data available) as they were at the beginning of the crisis in 2007.

Servicers, which handle interactions with homeowners, cite various reasons for this slowdown, including state foreclosure moratoriums, overworked servicers and the government’s mortgage modification program. However, part of the reason may be that for servicers with any skin in the game – which would include banks and some independent servicers – now is a terrible time to foreclose.

Aside from the obvious political considerations, it just doesn’t make sense on the bottom line. The Fed’s data also showed that the loss severity – the loss on a foreclosed home with an Alt-A, or non-conventional, mortgage after it is resold – has jumped from the low single digits at the beginning of 2007 to closer to 60%, roughly mirroring the decline in foreclosures.

Faced with those kinds of losses, it might be better for a servicer to just stick its head in the sand.

This might explain some very odd anecdotal servicer behavior.

San Diego lawyer Greg Weston tells the story of a client who bought a single-family home in San Diego in 2005. He lost his job last year and stopped making payments on his home in October 2008.

A few months later he found a new job and moved his family to Colorado – mailing the keys of his San Diego house to the servicer, jingle mail.

The servicer, however, has refused to recognize that anything has changed.

“We offered to reduce the bank’s costs by doing a short sale or deed in lieu of foreclosure, but they will not communicate with me other than sending demands for payment or partial payment,” Weston said. “So the first lender could have taken title to the property months ago, but hasn’t.”

Weston acknowledges this is an extreme example, but the general pattern, he says, is quite common.

[LesBaer45]

[quote=Eugene]Always remember about taxes … if it’s a retirement account, you’re okay … if it’s not, you’ll pay 35-40% in taxes on any gains you make. And, if you bought a house or intend to buy a house this year, capital gains due to the sale might just be enough to kick your AGI above the $8000 tax credit eligibility threshold. You should always do the math.

If you’re investing outside 401k/IRA, it may be more profitable to wait out a small correction long stocks till you lock in the LTCG status, than to bail at the first sign of danger.

On the subject of feelings, I fully understand your feelings, but my rational side tells me that the stock market has enough strength left for one more rally. Maybe I’ll exit in October.[/quote]

I’m not selling a house, just trying to pay it off. It was bought way back in ’96 and this one set me back way more than the pittance I made on the previous one.

I’m with you on trying to stretch it to the LTCG threshold. I’ve been burned trying to do that in the past however, sometimes it’s better to take the tax hit than watch any gains and your principal go down the tubes. BTDT the T shirt fell apart already.

I think I still have some previous losses I can carry over to help anyway.

I’m with Eugene on the possibility of a fall rebound. A lot of maybes have to happen but reality doesn’t seem to apply anymore so I’ll just decline to fight that trend and see if I can milk it for all it’s worth.

Who’s running the odds on a major drop because no one will hold over the long Labor Day weekend?

I’m figuring it’s 3-1 right now.

[LesBaer45]

[quote=Eugene]Always remember about taxes … if it’s a retirement account, you’re okay … if it’s not, you’ll pay 35-40% in taxes on any gains you make. And, if you bought a house or intend to buy a house this year, capital gains due to the sale might just be enough to kick your AGI above the $8000 tax credit eligibility threshold. You should always do the math.

If you’re investing outside 401k/IRA, it may be more profitable to wait out a small correction long stocks till you lock in the LTCG status, than to bail at the first sign of danger.

On the subject of feelings, I fully understand your feelings, but my rational side tells me that the stock market has enough strength left for one more rally. Maybe I’ll exit in October.[/quote]

I’m not selling a house, just trying to pay it off. It was bought way back in ’96 and this one set me back way more than the pittance I made on the previous one.

I’m with you on trying to stretch it to the LTCG threshold. I’ve been burned trying to do that in the past however, sometimes it’s better to take the tax hit than watch any gains and your principal go down the tubes. BTDT the T shirt fell apart already.

I think I still have some previous losses I can carry over to help anyway.

I’m with Eugene on the possibility of a fall rebound. A lot of maybes have to happen but reality doesn’t seem to apply anymore so I’ll just decline to fight that trend and see if I can milk it for all it’s worth.

Who’s running the odds on a major drop because no one will hold over the long Labor Day weekend?

I’m figuring it’s 3-1 right now.

[LesBaer45]

[quote=Eugene]Always remember about taxes … if it’s a retirement account, you’re okay … if it’s not, you’ll pay 35-40% in taxes on any gains you make. And, if you bought a house or intend to buy a house this year, capital gains due to the sale might just be enough to kick your AGI above the $8000 tax credit eligibility threshold. You should always do the math.

If you’re investing outside 401k/IRA, it may be more profitable to wait out a small correction long stocks till you lock in the LTCG status, than to bail at the first sign of danger.

On the subject of feelings, I fully understand your feelings, but my rational side tells me that the stock market has enough strength left for one more rally. Maybe I’ll exit in October.[/quote]

I’m not selling a house, just trying to pay it off. It was bought way back in ’96 and this one set me back way more than the pittance I made on the previous one.

I’m with you on trying to stretch it to the LTCG threshold. I’ve been burned trying to do that in the past however, sometimes it’s better to take the tax hit than watch any gains and your principal go down the tubes. BTDT the T shirt fell apart already.

I think I still have some previous losses I can carry over to help anyway.

I’m with Eugene on the possibility of a fall rebound. A lot of maybes have to happen but reality doesn’t seem to apply anymore so I’ll just decline to fight that trend and see if I can milk it for all it’s worth.

Who’s running the odds on a major drop because no one will hold over the long Labor Day weekend?

I’m figuring it’s 3-1 right now.

[LesBaer45]

[quote=Eugene]Always remember about taxes … if it’s a retirement account, you’re okay … if it’s not, you’ll pay 35-40% in taxes on any gains you make. And, if you bought a house or intend to buy a house this year, capital gains due to the sale might just be enough to kick your AGI above the $8000 tax credit eligibility threshold. You should always do the math.

If you’re investing outside 401k/IRA, it may be more profitable to wait out a small correction long stocks till you lock in the LTCG status, than to bail at the first sign of danger.

On the subject of feelings, I fully understand your feelings, but my rational side tells me that the stock market has enough strength left for one more rally. Maybe I’ll exit in October.[/quote]

I’m not selling a house, just trying to pay it off. It was bought way back in ’96 and this one set me back way more than the pittance I made on the previous one.

I’m with you on trying to stretch it to the LTCG threshold. I’ve been burned trying to do that in the past however, sometimes it’s better to take the tax hit than watch any gains and your principal go down the tubes. BTDT the T shirt fell apart already.

I think I still have some previous losses I can carry over to help anyway.

I’m with Eugene on the possibility of a fall rebound. A lot of maybes have to happen but reality doesn’t seem to apply anymore so I’ll just decline to fight that trend and see if I can milk it for all it’s worth.

Who’s running the odds on a major drop because no one will hold over the long Labor Day weekend?

I’m figuring it’s 3-1 right now.

[LesBaer45]

[quote=Eugene]Always remember about taxes … if it’s a retirement account, you’re okay … if it’s not, you’ll pay 35-40% in taxes on any gains you make. And, if you bought a house or intend to buy a house this year, capital gains due to the sale might just be enough to kick your AGI above the $8000 tax credit eligibility threshold. You should always do the math.

If you’re investing outside 401k/IRA, it may be more profitable to wait out a small correction long stocks till you lock in the LTCG status, than to bail at the first sign of danger.

On the subject of feelings, I fully understand your feelings, but my rational side tells me that the stock market has enough strength left for one more rally. Maybe I’ll exit in October.[/quote]

I’m not selling a house, just trying to pay it off. It was bought way back in ’96 and this one set me back way more than the pittance I made on the previous one.

I’m with you on trying to stretch it to the LTCG threshold. I’ve been burned trying to do that in the past however, sometimes it’s better to take the tax hit than watch any gains and your principal go down the tubes. BTDT the T shirt fell apart already.

I think I still have some previous losses I can carry over to help anyway.

I’m with Eugene on the possibility of a fall rebound. A lot of maybes have to happen but reality doesn’t seem to apply anymore so I’ll just decline to fight that trend and see if I can milk it for all it’s worth.

Who’s running the odds on a major drop because no one will hold over the long Labor Day weekend?

I’m figuring it’s 3-1 right now.

[LesBaer45]

Well it is stupid but don’t buy into that price exactly.

There was a 20:1 reverse split. That sorta has something to do with it. Not all but some.

[LesBaer45]

Well it is stupid but don’t buy into that price exactly.

There was a 20:1 reverse split. That sorta has something to do with it. Not all but some.

[LesBaer45]

Well it is stupid but don’t buy into that price exactly.

There was a 20:1 reverse split. That sorta has something to do with it. Not all but some.

[LesBaer45]

Well it is stupid but don’t buy into that price exactly.

There was a 20:1 reverse split. That sorta has something to do with it. Not all but some.

[LesBaer45]

Well it is stupid but don’t buy into that price exactly.

There was a 20:1 reverse split. That sorta has something to do with it. Not all but some.

[LesBaer45]

Meh. I’m thinking about bailing since I went all in March 18th. I’m still thinking it’ll be a sideways market for a while, with a little up & down action just to keep things churning.

I’m still guessing an e-o-y rally will happen. It’s Jan 2010 I’m worried about crash & burn city.

I’d really like to sneak in under the 1 year long term capital tax gain but I’m afraid I’ll be caught out buck naked again if it goes into the dumper before then.

Guess I need to bump up the stops again tonight or at least check on them. Most of the equities I’m holding haven’t exactly been going up the last two weeks.

I’m counting on the funds for the final payoff of my mortgage, I can’t screw this up. %-/

Assuming I hold till 2010, I’m unloading everything I can outside of 401K/IRA before 10/2010. I’ll move the 401K/IRA into cash options at least.

I need to take advantage of the “Booooosh” tax cuts before they expire. Besides I figure the wheels will come off sometime around 12/2010 early 2011.

This of course guarantees there will be a post election cycle bull market, and I’ll be kicking myself relentlessly for months. 🙁

[LesBaer45]

Meh. I’m thinking about bailing since I went all in March 18th. I’m still thinking it’ll be a sideways market for a while, with a little up & down action just to keep things churning.

I’m still guessing an e-o-y rally will happen. It’s Jan 2010 I’m worried about crash & burn city.

I’d really like to sneak in under the 1 year long term capital tax gain but I’m afraid I’ll be caught out buck naked again if it goes into the dumper before then.

Guess I need to bump up the stops again tonight or at least check on them. Most of the equities I’m holding haven’t exactly been going up the last two weeks.

I’m counting on the funds for the final payoff of my mortgage, I can’t screw this up. %-/

Assuming I hold till 2010, I’m unloading everything I can outside of 401K/IRA before 10/2010. I’ll move the 401K/IRA into cash options at least.

I need to take advantage of the “Booooosh” tax cuts before they expire. Besides I figure the wheels will come off sometime around 12/2010 early 2011.

This of course guarantees there will be a post election cycle bull market, and I’ll be kicking myself relentlessly for months. 🙁

[LesBaer45]

Meh. I’m thinking about bailing since I went all in March 18th. I’m still thinking it’ll be a sideways market for a while, with a little up & down action just to keep things churning.

I’m still guessing an e-o-y rally will happen. It’s Jan 2010 I’m worried about crash & burn city.

I’d really like to sneak in under the 1 year long term capital tax gain but I’m afraid I’ll be caught out buck naked again if it goes into the dumper before then.

Guess I need to bump up the stops again tonight or at least check on them. Most of the equities I’m holding haven’t exactly been going up the last two weeks.

I’m counting on the funds for the final payoff of my mortgage, I can’t screw this up. %-/

Assuming I hold till 2010, I’m unloading everything I can outside of 401K/IRA before 10/2010. I’ll move the 401K/IRA into cash options at least.

I need to take advantage of the “Booooosh” tax cuts before they expire. Besides I figure the wheels will come off sometime around 12/2010 early 2011.

This of course guarantees there will be a post election cycle bull market, and I’ll be kicking myself relentlessly for months. 🙁

[LesBaer45]

Meh. I’m thinking about bailing since I went all in March 18th. I’m still thinking it’ll be a sideways market for a while, with a little up & down action just to keep things churning.

I’m still guessing an e-o-y rally will happen. It’s Jan 2010 I’m worried about crash & burn city.

I’d really like to sneak in under the 1 year long term capital tax gain but I’m afraid I’ll be caught out buck naked again if it goes into the dumper before then.

Guess I need to bump up the stops again tonight or at least check on them. Most of the equities I’m holding haven’t exactly been going up the last two weeks.

I’m counting on the funds for the final payoff of my mortgage, I can’t screw this up. %-/

Assuming I hold till 2010, I’m unloading everything I can outside of 401K/IRA before 10/2010. I’ll move the 401K/IRA into cash options at least.

I need to take advantage of the “Booooosh” tax cuts before they expire. Besides I figure the wheels will come off sometime around 12/2010 early 2011.

This of course guarantees there will be a post election cycle bull market, and I’ll be kicking myself relentlessly for months. 🙁

[Author]

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