[SK in CV]

Oh it was wonderful. My first mortgage loan somewhere around 1978 was 14%. Refi’d at just under 12% a couple years later and I was ecstatic. Just checked Zillow and that condo is worth somewhere around $190K now. (there are somewhere around 75 identical condos, so the value is probably pretty close to accurate.) I paid just under $70K. If we see those kinds of rates again, it won’t drop down to the price I paid, but based on current rents, it probably could drop down to $100K. The good old days. When Realtors actually earned their 6% 😛

[SK in CV]

Oh it was wonderful. My first mortgage loan somewhere around 1978 was 14%. Refi’d at just under 12% a couple years later and I was ecstatic. Just checked Zillow and that condo is worth somewhere around $190K now. (there are somewhere around 75 identical condos, so the value is probably pretty close to accurate.) I paid just under $70K. If we see those kinds of rates again, it won’t drop down to the price I paid, but based on current rents, it probably could drop down to $100K. The good old days. When Realtors actually earned their 6% 😛

[SK in CV]

Oh it was wonderful. My first mortgage loan somewhere around 1978 was 14%. Refi’d at just under 12% a couple years later and I was ecstatic. Just checked Zillow and that condo is worth somewhere around $190K now. (there are somewhere around 75 identical condos, so the value is probably pretty close to accurate.) I paid just under $70K. If we see those kinds of rates again, it won’t drop down to the price I paid, but based on current rents, it probably could drop down to $100K. The good old days. When Realtors actually earned their 6% 😛

[SK in CV]

Oh it was wonderful. My first mortgage loan somewhere around 1978 was 14%. Refi’d at just under 12% a couple years later and I was ecstatic. Just checked Zillow and that condo is worth somewhere around $190K now. (there are somewhere around 75 identical condos, so the value is probably pretty close to accurate.) I paid just under $70K. If we see those kinds of rates again, it won’t drop down to the price I paid, but based on current rents, it probably could drop down to $100K. The good old days. When Realtors actually earned their 6% 😛

[SK in CV]

And one more thing. I agree entirely on the interest rate thing. 6% mortgages won’t cause a huge problem, particularly if it’s in conjunction with even mildly shrinking inventories. But 8% sure will. So the Fed will keep dancing for awhile.

[SK in CV]

And one more thing. I agree entirely on the interest rate thing. 6% mortgages won’t cause a huge problem, particularly if it’s in conjunction with even mildly shrinking inventories. But 8% sure will. So the Fed will keep dancing for awhile.

[SK in CV]

And one more thing. I agree entirely on the interest rate thing. 6% mortgages won’t cause a huge problem, particularly if it’s in conjunction with even mildly shrinking inventories. But 8% sure will. So the Fed will keep dancing for awhile.

[SK in CV]

And one more thing. I agree entirely on the interest rate thing. 6% mortgages won’t cause a huge problem, particularly if it’s in conjunction with even mildly shrinking inventories. But 8% sure will. So the Fed will keep dancing for awhile.

[SK in CV]

And one more thing. I agree entirely on the interest rate thing. 6% mortgages won’t cause a huge problem, particularly if it’s in conjunction with even mildly shrinking inventories. But 8% sure will. So the Fed will keep dancing for awhile.

[SK in CV]

[quote=SD Realtor]Well CV, I am not sure that foreclosing quickly part is or ever was part of the plan. If institutionalized foreclosures would have happened en masse then those institutions would not have been able to manipulate the books as easily as if the assets were simply not performing. Once that foreclosure is done then financially it is a different ballgame.

[/quote]

I was only referring here to the loan servicers. That’s where they make their money, collect all their fees, with a completed foreclosure. So their business interest is often at odds with their investors. They often have no skin in the game so maximizing return is sometimes incidental. But they are ill equipped to deal with distressed assets, whether it’s a delinquent loan or REO.

I think the whole “manipulate the books” thing is overblown. To the extent the loans are owned by private label MBS, they have no incentive, none at all. Banks that are subject to FDIC, Treasury, OTS and SEC regulation and supervision? They have incentive, but given the scrutiny they’re under, and the market for the last few years, it would seem unlikely there’s widespread continued manipulation. They were mostly pretty conservative in setting aside loan loss reserves a couple years ago in order to get bad business behind them. Are the GSE’s hiding losses? Maybe. Eh…probably. How much is anyone’s guess, but they make up maybe a 1/3 of the outstanding mortgage market.

As to who forecloses…well it is the servicer. They get the ball rolling, nobody else. The servicers, on behalf of the beneficiary control that process.

[SK in CV]

[quote=SD Realtor]Well CV, I am not sure that foreclosing quickly part is or ever was part of the plan. If institutionalized foreclosures would have happened en masse then those institutions would not have been able to manipulate the books as easily as if the assets were simply not performing. Once that foreclosure is done then financially it is a different ballgame.

[/quote]

I was only referring here to the loan servicers. That’s where they make their money, collect all their fees, with a completed foreclosure. So their business interest is often at odds with their investors. They often have no skin in the game so maximizing return is sometimes incidental. But they are ill equipped to deal with distressed assets, whether it’s a delinquent loan or REO.

I think the whole “manipulate the books” thing is overblown. To the extent the loans are owned by private label MBS, they have no incentive, none at all. Banks that are subject to FDIC, Treasury, OTS and SEC regulation and supervision? They have incentive, but given the scrutiny they’re under, and the market for the last few years, it would seem unlikely there’s widespread continued manipulation. They were mostly pretty conservative in setting aside loan loss reserves a couple years ago in order to get bad business behind them. Are the GSE’s hiding losses? Maybe. Eh…probably. How much is anyone’s guess, but they make up maybe a 1/3 of the outstanding mortgage market.

As to who forecloses…well it is the servicer. They get the ball rolling, nobody else. The servicers, on behalf of the beneficiary control that process.

[SK in CV]

[quote=SD Realtor]Well CV, I am not sure that foreclosing quickly part is or ever was part of the plan. If institutionalized foreclosures would have happened en masse then those institutions would not have been able to manipulate the books as easily as if the assets were simply not performing. Once that foreclosure is done then financially it is a different ballgame.

[/quote]

I was only referring here to the loan servicers. That’s where they make their money, collect all their fees, with a completed foreclosure. So their business interest is often at odds with their investors. They often have no skin in the game so maximizing return is sometimes incidental. But they are ill equipped to deal with distressed assets, whether it’s a delinquent loan or REO.

I think the whole “manipulate the books” thing is overblown. To the extent the loans are owned by private label MBS, they have no incentive, none at all. Banks that are subject to FDIC, Treasury, OTS and SEC regulation and supervision? They have incentive, but given the scrutiny they’re under, and the market for the last few years, it would seem unlikely there’s widespread continued manipulation. They were mostly pretty conservative in setting aside loan loss reserves a couple years ago in order to get bad business behind them. Are the GSE’s hiding losses? Maybe. Eh…probably. How much is anyone’s guess, but they make up maybe a 1/3 of the outstanding mortgage market.

As to who forecloses…well it is the servicer. They get the ball rolling, nobody else. The servicers, on behalf of the beneficiary control that process.

[SK in CV]

[quote=SD Realtor]Well CV, I am not sure that foreclosing quickly part is or ever was part of the plan. If institutionalized foreclosures would have happened en masse then those institutions would not have been able to manipulate the books as easily as if the assets were simply not performing. Once that foreclosure is done then financially it is a different ballgame.

[/quote]

I was only referring here to the loan servicers. That’s where they make their money, collect all their fees, with a completed foreclosure. So their business interest is often at odds with their investors. They often have no skin in the game so maximizing return is sometimes incidental. But they are ill equipped to deal with distressed assets, whether it’s a delinquent loan or REO.

I think the whole “manipulate the books” thing is overblown. To the extent the loans are owned by private label MBS, they have no incentive, none at all. Banks that are subject to FDIC, Treasury, OTS and SEC regulation and supervision? They have incentive, but given the scrutiny they’re under, and the market for the last few years, it would seem unlikely there’s widespread continued manipulation. They were mostly pretty conservative in setting aside loan loss reserves a couple years ago in order to get bad business behind them. Are the GSE’s hiding losses? Maybe. Eh…probably. How much is anyone’s guess, but they make up maybe a 1/3 of the outstanding mortgage market.

As to who forecloses…well it is the servicer. They get the ball rolling, nobody else. The servicers, on behalf of the beneficiary control that process.

[SK in CV]

[quote=SD Realtor]Well CV, I am not sure that foreclosing quickly part is or ever was part of the plan. If institutionalized foreclosures would have happened en masse then those institutions would not have been able to manipulate the books as easily as if the assets were simply not performing. Once that foreclosure is done then financially it is a different ballgame.

[/quote]

I was only referring here to the loan servicers. That’s where they make their money, collect all their fees, with a completed foreclosure. So their business interest is often at odds with their investors. They often have no skin in the game so maximizing return is sometimes incidental. But they are ill equipped to deal with distressed assets, whether it’s a delinquent loan or REO.

I think the whole “manipulate the books” thing is overblown. To the extent the loans are owned by private label MBS, they have no incentive, none at all. Banks that are subject to FDIC, Treasury, OTS and SEC regulation and supervision? They have incentive, but given the scrutiny they’re under, and the market for the last few years, it would seem unlikely there’s widespread continued manipulation. They were mostly pretty conservative in setting aside loan loss reserves a couple years ago in order to get bad business behind them. Are the GSE’s hiding losses? Maybe. Eh…probably. How much is anyone’s guess, but they make up maybe a 1/3 of the outstanding mortgage market.

As to who forecloses…well it is the servicer. They get the ball rolling, nobody else. The servicers, on behalf of the beneficiary control that process.

[SK in CV]

[quote=SD Realtor]I think it is an illustration of success from the perspective of the banks and govt. They implemented a plan using taxpayer money that consisted of a slower methodical manner in which to liquidate highly depreciated assets without totally cratering the bubbled market they created. The plan is by no means complete however it seems to be chugging along just fine. What you are seeing is simply the next phase of it. It is not that hard at all to get delinquent homeowners out of homes. If you look at the chronology, if someone has been in a home a year or two without paying, taking an extra couple of months to get them out is a piece of cake.

Sorry folks, no tsunami.[/quote]

Great comment. Though I disagree with you that it was all part of a plan. I think it was, at least in part, the motivation of Treasury, probably the Fed, to a lesser extent the FDIC, and maybe the GSE’s. But not on the part of the loan servicers, which I believe control close to 80% of the market.

Their motivation was/is the complete opposite. Foreclose, as quickly as possible, whether legal, appropriate, or financially beneficial is there motivation. But as they have proven time and time again, in every RE bubble, they are simply incompetent to do it right. Both at the beginning of the process, and once the REO is in their portfolio.

Ultimately, I think it has been nothing more than a major clusterfuck, but all the stars were properly aligned and it worked. Government action (HAMP and other non-mandatory mod programs, tax credits, most all of which were, IMNHO, both ill conceived and/or poorly implememnted.) helped the process. With unemployment ticking down, I think you are exactly right. The first stage has been a humungous success in mantaining some stability in the markets. With probably close to another eighteen months to two years of high delinquencies and foreclosures, there will still be high downward pressure on prices. Countered by slightly increased demand as a result of more consumers with paychecks, lower non-mortgage debt, improving credit.

It’s still going to be a delicate tightrope act. But if we have less than a 10% swing in prices (up or down) over the next two years, it will have to be considered an unmitigated success. Disorganized, improbable, accidental. But it might work.

Biggest threat to it failing miserably? Substantially increased housing starts in the next six months. Last thing the residential RE market needs is more inventory before the overhang is absorbed. Contra-intuitive to the economy as a whole. But still.

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