Five-month supply of distressed homes casts shadow on market

A “shadow” supply of 1.6 million homes facing foreclosure or already owned by banks is estimated to hang over the U.S real estate market -- these are properties that typically go uncounted by most real estate listing services.

The estimate represents about five months of supply as of October 2011, and was published Wednesday by the Santa Ana real estate data firm CoreLogic. This compares with a shadow supply of about 1.9 million units in October 2010, representing about seven months' supply then.

Florida, California and Illinois account for more than one-third of these properties, which can stand in the way of a housing recovery as most will end up as either foreclosures or so-called short sales, where a bank allows a home to be sold for less than the debt on the property.

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Banks' foreclosure activity picks up

Many Americans expect to work until they're 80

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Photo: A bank-owned home for sale in Las Vegas. Credit: Robyn Beck / AFP/Getty Images

 

 

Home foreclosures jumped in third quarter, federal report says

Newly initiated home foreclosures by the large national banks increased 21.1% in the three months ending Sept. 30 as mortgage servicers lifted voluntary holds on such activity because of paperwork problems, the Office of the Comptroller of the Currency reported Wednesday.

The jump from the second quarter of the year came as the number of homeowners who were delinquent on their mortgages remained stable, although still high, the OCC said in its quarterly Mortgage Metrics Report. The report has data from eight large national banks, including Bank of America, JPMorgan Chase and Wells Fargo, as well as One West Bank federal savings association, which account for about 62% of all first mortgages in the country.

As of Sept. 30, 88% of the 32.4 million loans in the portfolios of those institutions were current and performing. Of those not current, 3% were 30-59 days delinquent, 4.9% were more than 60 days delinquent, and 4.1% were in foreclosure.

But there was some encouraging news.

The percentage of delinquent loans was down significantly from a year before. For example, the percentage of loans more than 60 days delinquent was down 13.8% from the third quarter of 2010. And newly started foreclosures also were down year over year, with an 11.8% drop.

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Nevada sues major foreclosure processing firm

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State sues for answers from Fannie Mae, Freddie Mac on housing meltdown

-- Jim Puzzanghera in Washington

Photo: Renzo Salazar maintains the yard of a foreclosed home in Miami in November. Credit: Getty Images.

California sues Fannie Mae and Freddie Mac

California Atty. Gen. Kamala D. Harris has filed suit against mortgage titans Fannie Mae and Freddie Mac for refusing to answer subpoenas issued to the companies this year.

The suits, filed Tuesday in San Francisco County Superior Court, comes after investigators with the state attorney general's office presented the two firms with questions regarding their foreclosure, lending and mortgage-related practices in the state.

SEE THE DOCUMENTS:

California Sues Fannie Mae

California Sues Freddie Mac

The subpoenas ask the government-controlled finance companies to answer questions about their activities in California, including their roles as landlords that own thousands of foreclosed properties, The Times previously reported. The attorney general's office is also seeking details of Fannie and Freddie's mortgage-servicing and home-repossession practices.

In addition, investigators want to learn more about the companies' purchases and sponsorship of mortgage-backed securities in the Golden State. According to separate suits filed by Harris against Fannie and Freddie, the two companies refused to answer the questions. The filing of the suits was reported earlier by the Wall Street Journal.

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Banks' foreclosure activity picks up

Many Americans say they will have to work until they're 80

Victims of improper foreclosure practices can submit claims

— Alejandro Lazo

Twitter.com/alejandrolazo

Photo: Atty. Gen. Kamala D. Harris in downtown Los Angeles. Credit: Al Seib / Los Angeles Times

Nevada sues major foreclosure processing firm

This post has been updated. See below for details.

Nevada has filed suit against a major player in the foreclosure business, Lender Processing Services, claiming the company is responsible for perpetrating widespread consumer fraud in the Silver State.

The lawsuit against Florida-based LPS and several of its subsidiaries alleges that the company falsified, forged or fraudulently filed “countless” documents in foreclosure cases across the Silver State, requiring employees to execute or notarize as many as 4,000 foreclosure documents a day. The company is used by many major banks to process foreclosures, and the suit said the company is responsible for more than 50% of foreclosures annually.

“The robo-signing crisis in Nevada has been fueled by two main problems: chaos and speed,” Atty. Gen. Catherine Cortez Masto said in a statement. “We will protect the integrity of the foreclosure process. This lawsuit is the next, logical step in holding the key players in the foreclosure fraud crisis accountable.”

The suit also alleges that the company fraudulently notarized documents and forged signatures and hid the scope of the problem by “misrepresenting” that the problems were clerical errors. The suit also alleges that LPS imposed “inappropriate and arbitrary” deadlines on foreclosure attorneys working for them, leading to errors in the foreclosure process.

The suit also alleges the company blocked communication between those attorneys and their clients and demanded improper referral fees from those attorneys.

[Updated at 1:25 p.m., Dec.16: LPS, in a statement, said it had been cooperating with Masto’s office for more than 14 months, and that it would defend itself against the suit “vigorously.”

The company also accused Masto’s office of violating Nevada law by using a Washington firm, Cohen Milstein Sellers & Toll, to investigate the company. The company said that it has discovered problems with its past document practices, but added, "The company is not aware of any person who was wrongfully foreclosed upon as a result of a potential error in the processes used by our employees."]

RELATED:

Banks' foreclosure activity picks up

Many Americans say they will have to work until they're 80

Victims of improper foreclosure practices can submit claims

— Alejandro Lazo
Twitter.com/alejandrolazo

Photo: A bank-owned home for sale in Las Vegas. Credit: Robyn Beck / AFP/Getty Images

 

 

 

California's home sales up 4% in November

California's housing market showed some signs of luster in November with sales picking up over the same month last year, but prices declined and foreclosures remained prevalent.

Sales fell 4.2% from October, although they commonly decline from October to November, and compared with November 2010, they were up 4%, according to real estate research firm DataQuick. A total of 32,669 homes sold last month, which is about 18% below the average for November since 1988, when DataQuick's statistics begin.

The state's median home price was $244,000, up 1.7% from October and down 4.3% from November 2010.

“These days, buyers and sellers have to contend with two sets of problems, which sometimes play into each other and sometimes conflict with each other," DataQuick President John Walsh said in a statement. "The first is the lousy economy and the opportunities it presents, for better or worse. The second is the dysfunctional mortgage-finance system. Interest rates may be at record lows, but the types of mortgages that are available have been drastically reduced and qualifying is a true grind.”

The state's median price, which is the point at which half the homes in the state sold for more and half for less, has declined year-over-year for 14 consecutive months. The most recent low in the median was hit in April 2009, at the height of the financial crisis. After that, the housing market began showing some signs of strength as a tax credit mostly aimed at first-time buyers helped fuel a buying spree. The market has been weak ever since that credit expired in April 2010.

Foreclosures are a big part of that weakness, as those homes and other so-called distressed properties tend to sell at a discount. Of the previously owned homes that sold last month, about 1 in 3 were foreclosures and about 1 in 5 were short sales, in which the home is sold for less than the outstanding debt on the property.

In Southern California, sales rose 0.3% from October and 4.2% from November 2010 with 16,884 homes bought across the six-county region. The median home price for the region was $275,000 in November, up 1.9% from October but down 4.2% from November 2010.

The Bay Area's housing market picked up a bit of steam last month. A total of 6,317 homes sold in the nine-county region, down 2.0% from October and up 3.4% from November 2010. The Bay Area's median home price was $363,500, up 3.9% from October and down 4.3% from November 2010.

RELATED:

Banks' foreclosure activity picks up

Many Americans say they will have to work until they're 80

Victims of improper foreclosure practices can submit claims

-- Alejandro Lazo
Twitter.com/alejandrolazo

Photo: For-sale signs in Palo Alto. Credit: Paul Sakuma / Associated Press

Southern California home sales increase in November with low prices

Low prices for starter homes spurred some bargain hunting among home shoppers in Southern California last month, sending sales up slightly over last year. But higher-priced neighborhoods did not fare as well.

Overall, November sales were up 0.3% from October and 4.3% from November 2010 with 16,884 homes bought across the region, according to real estate research firm DataQuick of San Diego. Sales of newly built homes continued to suffer, declining 15.2% from the same period a year earlier, falling to the lowest level on record for a November.

The median home price for the region was $275,000 in November, up 1.9% from October but down 4.2% from November. The median is the price at which half the homes sold for more and half for less. It is heavily influenced by changes in the type of homes selling.

Short sales and foreclosures accounted for 51.3% of the market last month, DataQuick said.

RELATED:

Banks' foreclosure activity picks up

Many Americans say they will have to work until they're 80

Victims of improper foreclosure practices can submit claims

-- Alejandro Lazo
Twitter.com/alejandrolazo

Photo: A sign showing a property for sale. Credit: Images_of_Money via Flickr 

California, Nevada team up to investigate foreclosure fraud

California and Nevada, two states at the heart of the nation’s housing crisis, will join forces to investigate allegations of foreclosure fraud and other types of mortgage improprieties.

The agreement to share resources and work jointly is the latest sign that the nation’s state attorneys general want to be out front in cracking down on bank practices the housing crisis — from the selling of mortgage-backed securities to the handling of foreclosures.

At a joint news conference in Los Angeles on Tuesday, California Atty. Gen. Kamala D. Harris and Nevada Atty Gen. Catherine Cortez Masto said their offices would share litigation strategies and evidence would link their offices' civil and criminal teams.

The announcement comes less than a week after Massachusetts said it was suing the nation’s five largest mortgage servicers over alleged foreclosure illegalities. The move marked the first such litigation to be filed by a state.

Harris' office has opened a number of its own probes of the mortgage business. Investigators have subpoenaed information from Fannie Mae and Freddie Mac as part of a wide-ranging inquiry into lending and foreclosure practices in the state, The Times has previously reported. Her office also is investigating Bank of America and its mortgage arm Countrywide Financial, along with Citibank, seeking information on their sale of mortgaged-backed securities in California.

The new alliance between Harris and Masto comes as banks are working to strike a deal with a coalition of attorneys general who are working to seek relief for consumers allegedly wronged by faulty mortgage servicing and foreclosure practices.

Harris formally withdrew from those talks earlier this year. Masto has said Nevada officials would evaluate any proposal the talks might produce but would also push ahead with their own work. New York, Delaware, Kentucky and Minnesota also have signaled they are unhappy with the direction of the talks with the banks. All of those states have expressed concern that the banks could be let off too easily.

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-- Alejandro Lazo

Photo: California Atty. Gen. Kamala D. Harris. Credit: Brian van der Brug/Los Angeles Times

Occupy movement's next stop? Foreclosed homes.

 

After being evicted from parks and public spaces, the Occupy movement is set to move into foreclosed homes.

Organizers said Tuesday that they plan to help families across America fight foreclosure and eviction next week by "occupying" those properties. Some of the families will be moving back into their vacant properties, while others will resist eviction, said Peter Kuhns, an organizer with the Alliance of Californians for Community Empowerment, which is organizing some of the actions in Southern California.

“The original intent of Occupy Wall Street was to protest the excess of the big banks and Wall Street banks, so it seems like a pretty natural step for people to protest foreclosed properties,” Kuhns said. “Foreclosures are one of the biggest aspects of the economic crisis created by Wall Street bankers.”

Protesters also plan to disrupt foreclosure auctions across the country, where troubled homes are sold to investors and other cash buyers or repossessed by lenders. A website for the actions has been created, detailing in videos the histories of some homeowners facing foreclosure.

More than 30 foreclosed properties will be declared as "occupied" Tuesday, Kuhns said.

At least two of the homes will be in Southern California -- one in Los Angeles County and another in the Inland Empire, Kuhns said.

This is not the first incident of homeowners resisting foreclosure led by the group. Rose Gudiel, a homeowner in La Puente, refused to leave her property in September despite an eviction order, insisting she qualified for a loan modification. She ultimately won that modification.

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Banks' foreclosure activity picks up

Many Americans say they will have to work until they're 80

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— Alejandro Lazo
Twitter.com/alejandrolazo

Photo: Rose Gudiel, who purchased a home in 2005 in La Puente, fought eviction with family members. Credit: Michael Robinson Chavez / Los Angeles Times

Notary in Las Vegas foreclosure fraud case found dead

A notary who was set to be sentenced for her part in a massive foreclosure fraud investigation was found dead in her Las Vegas home Monday.

Tracy Lawrence, 43, had pleaded guilty to one count of notarizing the signature of an individual not in her presence, a misdemeanor with a potential prison sentence of up to one year, as well as a fine of up to $2,000.

Lawrence had pleaded guilty to participating in an alleged scheme being investigated by the Nevada attorney general’s office in which tens of thousands of fraudulent documents were filed between 2005 and 2008 with the Clark County Recorder's Office. Two Orange County residents have been indicted in that investigation, accused of directing the operation.

Lawrence was scheduled to appear before a judge at 8:30 a.m. Monday. When she did not appear, investigators with the attorney general's office visited her home and found her dead, said Jennifer Lopez, a spokeswoman with the office of Nevada Atty. Gen. Catherine Cortez Masto.

Officer Jacinto Rivera, a Las Vegas Metropolitan Police Department spokesman, said that Lawrence's death was not being investigated as a homicide.

RELATED:

Banks' foreclosure activity picks up

Many Americans say they will have to work until they're 80

Victims of improper foreclosure practices can submit claims

— Alejandro Lazo
Twitter.com/alejandrolazo

Photo: A bank-owned home for sale in Las Vegas. Credit: Robyn Beck / AFP / Getty Images

 

One in five American homes 'underwater'

More than one in five American home mortgages are underwater.

An estimated 10.7-million households, or 22.1% of all homes with mortgages, had more debt on the properties than they were worth in the third quarter, according to Santa Ana research firm CoreLogic. This is a slight decline from the 10.9 million properties that were underwater in the second quarter.

"Although slightly down, negative equity remains very high and renders many borrowers vulnerable when negative economic shocks occur, such as job loss or illness,” CoreLogic chief economist Mark Fleming said in a statement. “The nearly $700-billion mortgage debt overhang has touched many corners of the market, and this overhang is holding back the recovery of the housing market and broader economy."

Nevada had the highest negative-equity percentage with 58% of mortgaged homes underwater, followed by Arizona, 47%; Florida, 44%; Michigan, 35% and Georgia, 30%. This was the first quarter that Georgia made the top five, ousting from the group California, which had been among the top spots since the firm began tracking the data in 2009.

In the Los Angeles Metro area, 353,427 homes, or 23% of all mortgaged properties, were in negative equity at the end of the third quarter, a decline from 356,677. Negative equity can decline when foreclosures increase as the repossession process extinguishes underwater loans.

RELATED:

Banks' foreclosure activity picks up

Many Americans say they will have to work until they're 80

Victims of improper foreclosure practices can submit claims

— Alejandro Lazo
Twitter.com/alejandrolazo

Photo: A bank-owned home for sale in Las Vegas. Credit: Robyn Beck / AFP / Getty Image 

 

Home price index: Nation, California see slip in September

Home prices in the nation's largest cities fell from August to September, according to a closely watched index, renewing a decline in values with the end of the busy spring and summer months.

The Standard & Poor's/Case-Shiller index of 20 American cities, a key measure that is closely watched by economists, fell 0.6% from August to September and 3.6% from September 2010.

"Any chance for a sustained recovery will probably need a stronger economy," David Blitzer, chairman of the S&P index committee, said in a release announcing the new data Tuesday.

All of the California cities in the index posted declines from the prior month. Los Angeles and San Diego were down 0.8% and San Francisco fell 1.5%. A drop in sales and weakening in values is common from August to September, as many families tend to close their purchases and complete their moves before the start of the school year.

Home prices in the California cities are comparatively healthy despite the state's high unemployment rate, because the markets tracked by the index are close to key job centers such as Hollywood and Silicon Valley and are also near the ocean -- where overbuilding was relatively constrained. The index does not track prices in California's Central Valley or the Inland Empire, where housing is still weak.

The Case-Shiller index also includes adjusted data, but the experts who publish these numbers have cautioned that the large number of foreclosures on the market have distorted the statistics. The adjusted data showed the 20-city index fell the same amount from August to September.

RELATED:

Banks' foreclosure activity picks up

Many Americans say they will have to work until they're 80

Victims of improper foreclosure practices can submit claims

-- Alejandro Lazo
Twitter.com/alejandrolazo

Photo: A sign showing a property for sale. Credit: Images_of_Money via Flickr