The Fed’s own holdings of MBS were unchanged again and cenbanks’ holdings of treasuries rose nicely, but agencies shrank a bit, resulting in a week that was satisfactory, but not outstanding. This week’s Reuters report1 was, as usual, based on the weekly update from the NY Fed’s H.4.1 table site.2 Here is Doom’s updated CSV version3 of the agencies and treasuries foreign central bank holdings data set. The velocity of the yellow line is only about two-thirds of last week’s, but it’s still rising fast. Treasury Debt holdings grew by $13.571 billion, not as big as the last couple of…
Read more…

Just when you thought the mortgage mess couldn’t get any slimier, American Banker is now reporting on the scam known as “force-placed insurance” When banks buy insurance on the homes of borrowers whose policies have lapsed, they get a great deal. Just not for the homeowners and investors who have to pay for it. Nominally purchased to protect the owners of mortgage-backed securities, such “force-placed” insurance can be 10 times as costly as regular policies, raising struggling homeowners’ debt loads, pushing them toward foreclosure — and worsening the loss to investors on each defaulted loan. Evidence of abuses and self-dealing…
Read more…

Once more Congress is trying to legislate the un-legislatable [It's not a word, but it ought to be.] They want to force lenders to keep borrowers in homes: [Thanks L!] WASHINGTON/CHARLOTTE, North Carolina (Reuters) – Banks under fire over their foreclosure practices face twin hearings in Congress this week, at which they will come under renewed pressure to find ways to keep borrowers in their homes. The hearings on Tuesday and Thursday will include the first appearances by executives from major lenders like Bank of America and JPMorgan Chase since the furor over sloppy foreclosure paperwork erupted in September. Banks…
Read more…

Yesterday I posted on a Market-Ticker post discussing a foreclosure case in Arizona.  According to Market Ticker, Judge Curley is requiring the Bank of New York Melon to produce the custodial records in this case, which appears to be a win for the homeowner.  After a little more digging in this case however, Andrew Bailey, the plaintiff, is appearing to be a less than sympathetic character. Mr. Bailey runs a bed and breakfast at the property in question in Cornville, AZ near Sedona. Bailey and his partner Connie Marlow describe themselves as “filmmakers, photographers and writers“. One of Bailey’s projects…
Read more…

According to a recent study by Zillow, it looks like that long anticipated “double dip” in home prices may be here: [Hat tip Freedom's Phoenix.] Zillow just released a devastating third quarter housing report. Basically every major indicator is crashing: * The decline in home values accelerated in September, dropping 0.4% month-over-month * Foreclosures reached an all-time high * A record 23.2% of mortgages are now underwater The double dip — already a rare phenomenon — is now entering an unprecedented free-fall. Zillow economist Stan Humphries says prices won’t hit bottom until next summer at the earliest, as foreclosure activity…
Read more…

The fourth time might be the charm for Andrew Bailey, who has been fighting BONY Melon over their right to foreclose: Judge Curley, the head bankruptcy judge in Arizona just ruled minutes ago that the Bank of New York-Melon must produce the custodial records in their vault in a case against an Arizona homeowner, thereby producing the note and all other docs. This is a transformational decision. As Market Ticker explains: This decision changes literally everything - at least for Arizona.  If it spreads, and it probably will, it will change everything period. If BONY doesn’t have the documentation in their…
Read more…

I have a daughter that was recently married.  I advised her and her new husband about their housing options.  I pointed out that they didn’t need the commitment, or the risk, of a mortgage at this point in their lives.  I told them to save up and wait for the market to turn.  After all, even if the housing market only dropped a point or two, they could “build more equity” by putting their funds in a savings account than in a mortgage.  Not everyone agrees with my philosophy however.  A lot of families seem very eager to get their…
Read more…

What could possibly go wrong? … CNET (11/7 ’10): Reports: Amazon to buy Diapers.com Of course neither of these companies are really what we think they are anymore, but

You don’t have to be very old to remember when foreclosure was almost a dirty word.  If it was happening to you, you didn’t want to talk about  it.  Now we are not only talking about it, you can now proudly proclaim your foreclosure with these t-shirts being marketed on Amazon: Or perhaps this one:

There are a large number of homeowners that believe that they are being foreclosed on unfairly, but can’t sue because they can’t afford an attorney.  One law firm has an idea- give their clients a second on the house: For some Florida residents, the price of getting out of foreclosure will include taking on a second mortgage — payable this time to their lawyers. The new mortgage, which takes effect only if the foreclosure is dismissed and the homeowner’s debt to the bank is reduced, is controversial among defense lawyers, some of whom call it “creepy” and “crass.” Yet even…
Read more…

Another expert has another “low risk fix” for the housing market: [But I beg to defer.] The housing market is currently stuck in a morass, and there are few signs that the situation will improve in the near term.  The chief problem is a self-reinforcing spiral of price declines, lost equity, foreclosures, and further price declines.  Credit is tight and underwriting conditions are even tighter.  Total Mortgage president and founder John Walsh has an idea that he believes will help stimulate the housing market at relatively little cost and risk to the taxpayer.  He would like to see the Fannie…
Read more…

Sorry about that, Professor Rawls.  Greed has now smashed about a thousand years of English Speaking Justice into little pieces scattered all over the floor.  Yesterday twist passed this link to me, and here’s the bit I’d like Doomers to think about this weekend. Much of the confusion over ownership has stemmed from the industry practice of registering mortgages on [MERS] with the name of the owner left blank.  This was done to ease secondary trading in the mortgage-backed securities that many of these mortgages were assigned to. …

I have two questions to ask this morning.  First, does this look like a recovery to you? Food stamp recipients ticked up in August, children consumed millions of free lunches and nearly five million low-income mothers tapped into a government nutrition program for women and young children. Some 42,389,619 Americans received food stamps in August, a 17% rise from the same time a year ago, according to the U.S. Department of Agriculture, which tracks the data. That number is up 58.5% from August 2007, before the recession began.

Nick at the WSJ reports4 that besides the unlimited support for the GSEs that expires December 31, 2012, Treasury has since set aside enough monies to fund a small war for support after that date: The government took over the troubled housing-finance giants two years ago through a legal process known as conservatorship. The Treasury has promised to inject unlimited sums through 2012 and nearly $300 billion after that in order to maintain a positive net worth and to avoid triggering liquidation. I know, I know … that doesn’t constitute explicit government support for Fannie & Freddie, and therefore agencies…
Read more…

With millions of homes going into foreclosure, you’d assume that homeownership rates were falling and more folks were renting.  Data from the U.S. Census Bureau seems to support this: National vacancy rates in the third quarter 2010 were 10.3 percent for rental housing, a decline of 0.8 percentage points lower than the rate recorded in the third quarter 2009 and 0.3 percentage points lower than last quarter. That’s a 7 percent decline in one year. The number of vacant homes has soared over the past four years from about 16 million at the start of 2006. It has been hovering…
Read more…