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« Must See Washington Post Infographic On Bush Tax Cut Expiration (Not Just The Rich Could Take A Hit) | Main | The Unbearable Lightness of the Bank Accounting Cover Up »
Tuesday
Aug312010

It Pays BIG To Stop Paying Your Mortgage -- You Aren't going To Believe This Statistic

Here's the question:

Defaulted borrowers spend an average of how many days in their homes after ceasing to make payments?  This is a nationwide average.  Answer on the inside.

##

 

From the above article comes this relatively shocking statistic:

Moreover, Freddie says a good 14% of homes that are seriously delinquent are vacant. In such circumstances, eventual recovery values rapidly deteriorate.

Defaulted borrowers were spending an average of 469 days in their home after ceasing to make payments as of July 31, so the financial attraction of strategic defaults increases.

There's much more from the story:

Ever since the housing collapse began, market seers have warned of a coming wave of foreclosures that would make the already heightened activity look like a trickle.

The dam would break when moratoriums ended, teaser rates expired, modifications failed and banks finally trained the army of specialists needed to process the volume.

But the flood hasn't happened. The simple reason is that servicers are not initiating or processing foreclosures at the pace they could be.

By postponing the date at which they lock in losses, banks and other investors positioned themselves to benefit from the slow mending of the real estate market. But now industry executives are questioning whether delaying foreclosures — a strategy contrary to the industry adage that "the first loss is the best loss" — is about to backfire. With home prices expected to fall as much as 10% further, the refusal to foreclose quickly on and sell distressed homes at inventory-clearing prices may be contributing to the stall of the overall market seen in July sales data. It also may increase the likelihood of more strategic defaults.

It is becoming harder to blame legal or logistical bottlenecks, foreclosure analysts said.

"All the excuses have been used up. This is blatant," said Sean O'Toole, CEO of ForeclosureRadar.com, a Discovery Bay, Calif., company that has been documenting the slowdown in Western markets.

"The industry as a whole got into a panic mode and was worried about all these loans going into foreclosure and driving prices down, so they got all these programs, started Hamp and internal mods and short sales," said John Marecki, vice president of East Coast foreclosure operations for Prommis Solutions, an Atlanta company that provides foreclosure processing services. Until recently, he was senior vice president of default administration at Flagstar Bank in Troy, Mich. "Now they're looking at this, how they held off and they're getting to the point where maybe they made a mistake in that realm."

 

Continue reading at American Banker

 

Hat tip to Patrick.net

##

 

Now chek out this story:

Strategic Default & Living For Free: Josh Bartlett Hasn't Made A Mortgage Payment In 32 Months And He Hasn't Been Kicked Out Yet (PBS VIDEO)

 



 

 

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Reader Comments (8)

Mortgages exceed home values across the Central Valley, with more than six out of ten homes in Stockton, for example, underwater, according to new reports Thursday from real estate information company CoreLogic Inc. of Santa Ana.

While Stockton is the deepest underwater market reported by CoreLogic, it has plenty of company.

• In Modesto, 59.6 percent, or 58,892, of all residential properties with a mortgage were in negative equity for second quarter 2010. An additional 4.9 percent, or 4,875, were in near negative equity in Modesto.

• In Stockton, 62.4 percent, or 80,505, of all residential properties with a mortgage were in negative equity for second quarter 2010. That’s nearly three times the national average. An additional 4.1 percent, or 5,257 homes, were in near negative equity in Stockton.

• In Fresno, 46.8 percent, or 71,850, of all residential properties with a mortgage were in negative equity for second quarter 2010. An additional 4.6 percent, or 6,985, were in near negative equity in Fresno.

• In metropolitan Sacramento, 43.4 percent, or 214,468, of all residential properties with a mortgage were in negative equity for second quarter 2010. An additional 4.6 percent, or 22,726, were in near negative equity in Sacramento--Arden-Arcade--Roseville.

• In Visalia-Porterville, 44.8 percent, or 31,027, of all residential properties with a mortgage were in negative equity for second quarter 2010. An additional 4.8 percent, or 3,346, were in near negative equity in Visalia-Porterville.

• In Bakersfield-Delano, 52.0 percent, or 79,891, of all residential properties with a mortgage were in negative equity for second quarter 2010. An additional 4.8 percent, or 7,298, were in near negative equity in Bakersfield-Delano.

http://www.centralvalleybusinesstimes.com/stories/001/?source=patrick.net&ID=16117
Aug 30, 2010 at 2:26 PM | Registered CommenterDailyBail
Aug 30, 2010 at 2:27 PM | Registered CommenterDailyBail
Norway 'bomb plot' underscores al-Qaida pitfalls

http://news.yahoo.com/s/ap/eu_norway_terror_plot
Aug 30, 2010 at 2:30 PM | Registered CommenterDailyBail
NEW ORLEANS – President Barack Obama said Sunday he isn't worried about a recent poll showing that nearly one-fifth of Americans believe he is a Muslim. "The facts are the facts," said Obama, who is a Christian. In an interview broadcast on "NBC Nightly News," the president blamed the confusion over his religious beliefs on "a network of misinformation that in a new media era can get churned out there constantly."

http://news.yahoo.com/s/ap/20100829/ap_on_re_us/us_obama_religion
Aug 30, 2010 at 2:30 PM | Registered CommenterDailyBail
"They are not just eating our grapes, they are raiding our kitchens and ripping the thatch off the roofs. They are becoming increasingly bold and destructive," said Jean Naude, general manager at the vineyard, which is celebrating its 325th birthday this year. Guards banging sticks and waving plastic snakes have been deployed with only limited success, and not even a blast of a vuvuzela, the plastic horn made famous at the World Cup, seems to frighten them.

http://www.telegraph.co.uk/news/worldnews/africaandindianocean/southafrica/7969313/Drunk-baboons-plague-Cape-Towns-exclusive-suburbs.html
Aug 30, 2010 at 2:32 PM | Registered CommenterDailyBail
http://news.yahoo.com/s/ap/bbo_clemens_steroids

Clemens arrives at federal court for arraignment
Aug 30, 2010 at 2:35 PM | Registered CommenterDailyBail
I am going to have to go with Jim Rogers again here and say that the big six are all insolvent if they were forced to own their bad debt.

Bernanke keeps buying it and putting it on the Feds balance sheet.

It must be time for another big fat bonus and some more hookers for the bankers.
Aug 31, 2010 at 7:56 PM | Unregistered CommenterZ
You are correct z...they are all insolvent...and by a mile..it's not even close...assets marked at par that aren't worth 50 cents..now multiply that over the entire asset base...it's a grand illusion...
Sep 1, 2010 at 10:33 PM | Registered CommenterDailyBail

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