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May 20, 2015

The appetite on Wall Street for foreclosures is very high. But there are fewer and fewer foreclosure filings. The smartest guys in the room have a new idea: buy non-performing loans before they go into foreclosure and then transform them into rentals.

January 6, 2014

An unfortunately collision of several troubling financial trends means that many churches are struggling to pay their bills. For banks that aggressively sought to make church loans in the last decade this situation presents something of a public relations nightmare. For the congregations and for the communities that they serve, the prospect represents one more

September 25, 2013

A recent paper out of Georgia Tech makes some revealing points about how investors are faring in their attempts to capitalize on the foreclosure crisis. 

The main takeaway, in my opinion, is that Wall Street (private equity, institutional investors, hedgies) is not

April 10, 2013

In 2011, regulators reach a settlement with some of the country's largest servicers over improper foreclosures. It was well-deserved justice for banks that wrongfully foreclosed on borrowers - either through

April 14, 2011

60 Minutes has an incredible story detailing how a mortgage document processing company is putting hundreds of thousands of homes in a limbo.

The story describes how one document mill in Alpharetta, Georgia attempted to duplicate lost affidavits of assignment after the originals were lost. Lost documents was a systemic problem. It is a natural problem of non-

December 15, 2010

It turns out that investors are amenable to loan modifications when they are on the borrowing side.

A Boston real estate firm got out of a $2.7 billion loan this week after it couldn't make payments on a portfolio of office buildings in Seattle and Washington, DC. Beacon Capital, an international real estate investment group based in Boston, has been unable to service the debt on a large commercial real estate deal.

Beacon bought a portfolio of office buildings in Seattle and Washington, DC. The 2007 deal was

October 11, 2010

It isn't just that people think that the document problem might become a problem. At this point, it is hard to find anyone with a professional role in the housing sector that doesn't imagine that this will upend the sale of homes. It is a question of when, and not "if," according to many experts. This morning, Karl Case (of Case-Shiller) reversed his earlier expectations for a near-term recovery and declared that he sees more gloom and doom for more than a year. Mark Zandi says it could several years. Realtors are bemoaning how they have deals that are suddenly in flux. We're not at the point where we can say "if it wasn't for distressed sales, then we'd have no sales at all," but it is true that distressed sales make up almost half of all transactions and that their share of home sales now accounts for almost six times more volume than historical norms.

Saying that it Isn't So

It is like Gertude told Hamlet:  "The lady doth protest too much, methinks."

October 7, 2010

An under-the-radar bill passed out of Congress this week that could give servicers a chance to escape from liability for the mortgage affadavit crisis.

The bill sidesteps the authority of state judiciaries to impose standards for the notarization of documents. That would upend the recent actions of state attorneys general to make servicers produce adequate documentation before they can go forward with foreclosure proceedings. It is a legitimate requirement, because recent reports show that administrators at GMAC and JP Morgan Chase, among others, were signing documents without without verifying their authenticity.

In 23 states, foreclosure proceedings have been disrupted because of news that many servicers were not using proper procedure for documenting their affadavits.   Those states are ones that insist upon judicial review in the foreclosure process.

Those requirements would be undermined by this bill. It sets up the possibility of a case where a

October 6, 2010

The affadavit problems that banks, state regulators, and even the OCC are uncovering could change how the US housing market corrects itself.

If so, then what?

Servicers are going to take it on the chin. That is as it should be. Their incompetence is what led to this mess. Although they may experience some loss to their public image, the real cost is going to be felt in the hundreds of thousands of mortgage payments that they have to make to investors. Servicers have to make payments to investors even if they can't collect payments from borrowers.  Foreclosure eliminates that obligation. That had been one of the hurdles to loan modifications - investors were

October 4, 2010

The affidavit armageddon continues to spread. Today the Office of the Comptroller of the Currency notified seven servicers that it would be visiting their offices in order to verify that their foreclosure procedures were legitimate. This follows voluntary annoucements by GMAC, JP Morgan Chase, and Bank of America that they were going to suspend current foreclosures in process while they review documents.

The banks are getting plenty of heat. Imagine how bad this probelm is going to be, and imagine how long