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 (more…)

News today suggests that the problems with foreclosures at GMAC all come back to one employee.  GMAC says that Jeffrey Stephan is still working for the company.

Wait a week. He is so fired.

The news could be bigger than first imagined, because it may extend to foreclosed properties serviced by GMAC on behalf of the GSEs.

According to the Washington Post, one man (“the affadavit slave“) was charged with signing off on every foreclosure. He had a staff of thirteen, but this individual was responsible for verifying the legitimacy of the documents. He was expected to have the documents notarized, as well.

It seems like a mountain of work. Stephan was charged with signing 10,000 foreclosure documents per month. That is about five hundred foreclosures for every business day in the month! Put GMAC loan document reviewer next to Calcutta sewer cleaner and Saddam Hussein food tester as one of the World’s Worst Jobs.

The upshot is that the foreclosure crisis is about to enter into the News of the Weird, and it could become one more problem for the nation’s housing markets.  Imagine if thousands and thousands of REO properties are suddenly frozen in space. They can’t be sold, and in some instances, GMAC is going to have to unwind homes that have been sold.  There are already 15 months of homes on the market, and millions more in the shadow inventory.

GMAC Mortgage, a division of Ally Financial, announced that it is suspending foreclosure actions on properties in 23 states. Today’s story, published here by the Washington Post, offers no insight into what could motivate GMAC to pursue this plan.

Could GMAC have woken up on the cool side of the pillow and decided to show some love for its delinquent borrowers?

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The latest delinquency survey from the Mortgage Bankers’ Association re-states the story that everyone has know for some time – that late payments and foreclosures are still high and that many of them are for prime loans made to borrowers that are now unemployed.

The New York Times read the report, which states the both delinquencies and foreclosures dropped by a matter of a few basis points, and concludes that “Foreclosures Fall, but Rise in Delinquencies Causes Some Concern.” True enough, there is a rise in delinquent loans relative to one year ago, but we’re off by 21 bps from last quarter.

More than a few people have told me that banks are putting off on putting loans into foreclosure. This could be attributed to a number of things. Most often, I hear that both (more…)

I am seeing more evidence that a wave of multifamily apartment buildings are about to enter foreclosure, and the prospect of that development seem very concerning.

While the peak for resets on sub-prime loans issued in the last decade has already crested, lots of commercial real estate debt is only now coming to maturation. The Washington Post reports that $1.4 trillion in commercial estate debt should roll over in the next three years. Half of those loans will be underwater by 2011, which should thwart demand for new financing.

While this is troublesome for investors and lenders working in the multifamily housing industry, it is also something that poses significant challenges for neighbors.  One issue is the loss of many affordable rental units. Another (more…)