The Collected Works of Author and Blogger Larry Roberts

Archive for 2011

Say goodnight to jumbo loans. The borrowers are going to default. Many jumbo loan holders have been hanging on despite the oversized payments because values have not fallen a great deal on higher priced properties. With the support from below being removed, the absence of a move-up market is causing higher priced properties to drift ever lower. This slow descent will continue, and as it does, more and more jumbo loan owners will see the futility in making huge payments and strategically default. Look out Irvine, this impacts you. Jumbo mortgage holders pose highest risk of strategic default A high number of jumbo mortgage owners — many located in high-cost markets hit by real estate deflation over the last several…[READ MORE]

Each year during the holidays, lenders are faced with the unenviable choice to allow more squatting or take away the family home at Christmas. With the bad public relations that go along with holiday foreclosures, most lenders hold off until the new year. Banks will hold off on some holiday foreclosures Andrew S. Ross, Chronicle Columnist Friday, November 25, 2011 Season of sharing, take 1. Got an e-mail from Wells Fargo responding to my column this week suggesting that banks consider a moratorium on home foreclosure activities, at least during the holiday season. "Wells Fargo is suspending eviction actions from Nov. 23 to Nov. 25, and again from Dec. 19 to Jan. 2, 2012. We will not physically evict or…[READ MORE]

The banks finally are getting serious about foreclosing on the delinquent mortgage squatters living in shadow inventory. Even though delinquencies are declining, they are still elevated well above historic norms, and they have been so high for so long that the banks have a huge backlog they must work through. Fewer mortgages going bad but foreclosures expected to increase The Mortgage Bankers Assn. says it could take three or four years to return to a normal pattern of delinquencies and foreclosures. November 18, 2011 --  By E. Scott Reckard, Los Angeles Times Fewer home loans are in trouble these days, but despite some improvements, the nation is not even halfway through cleaning up the foreclosure mess, industry experts said. It…[READ MORE]

The legions of hopelessly underwater loan owners are all praying for a write down on their mortgage. It's a false hope, but with falling prices and little prospect of a recovery any time soon, false hope is all many of these borrowers has left. US House Democrats press for mortgage write-downs Reuters -- WASHINGTON | Tue Nov 22, 2011 4:33pm EST Nov 22 (Reuters) - More than 20 Democrats in the U.S. House of Representatives on Tuesday called on the regulator of Fannie Mae and Freddie Mac to help underwater borrowers by allowing their loan principal to be reduced. The regulator has faced increasing pressure to permit the write-down of principal by the two government-controlled mortgage finance providers as a…[READ MORE]

Borrowers who quit paying thier mortgages is nothing new. Historically, delinquency rates on mortgages have hovered between 3.5% and 5.5% in good times and in bad. What is new and unprecedented is the 11% delinquency rate we saw during the collapse of the housing bubble. For the last two years, this rate has been slowly declining, but it is still elevated well above historic norms. Personally, I was not surprised to see the delinquency rate go back up as prices resumed their downward spiral. The weak economy was bound to cause an increase in delinquency, and coupled with strategic default from falling prices, higher delinquency rates are to be expected. Apparently, other economists completely missed these obvious signs. Mortgage payments…[READ MORE]

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