U.S. Foreclosure Rates Skyrocket Again

President Obama

Once again, due to uncooperativeness from banks, the national U.S. foreclosure rate has skyrocketed, deteriorating to record levels not previously seen in America.

Some were encouraged by a slight rise in national home sales, but it is being fuelled by homes being sold at rock bottom prices ($10,000 to $50,000) drastically dropping neighborhood property values.

It would have been better had banks kept homeowners in their homes, which contained higher property values on state tax rolls, than rush them out via foreclosure, to sell the property at less than 50-90 percent of its value.

U.S. Foreclosure Filings Set Third Record-High in Five Months

Aug. 13 (Bloomberg) -- Foreclosure filings in the U.S. climbed to a record for the third time in five months in July as falling home prices and the recession left more homeowners unable to keep up payments or refinance.

A total of 360,149 properties received a default or auction notice or were seized last month, according to data seller RealtyTrac Inc. One in 355 households got a filing, the highest monthly rate in RealtyTrac records dating to January 2005, the Irvine, California-based company said in a statement.

“We’re in a deep hole,” Diane Swonk, chief economist at Chicago-based Mesirow Financial Inc., said in an interview. “There is a whole new wave of foreclosures tied to the cyclical dynamics of the economy.”

Foreclosures increased as the U.S. recorded another 247,000 job losses in July and home prices fell, leaving an increasing number of mortgage holders owing more than their properties were worth. The median price of an existing single-family house dropped 15.6 percent to $174,100 in the second quarter, the most in records dating to 1979, the National Association of Realtors said yesterday. Almost one-quarter of U.S. mortgage holders are underwater, property data firm Zillow.com said Aug. 11...

Loan Modifications

About 235,000 troubled borrowers have begun modifying their property loans under the government’s Making Home Affordable Program, compared with a target population of 4 million, according to an Aug. 4 Treasury Department report. About 15 percent of eligible borrowers were offered loan modifications and 9 percent entered trial agreements.

Bank of America Corp. modified about 4 percent of its qualifying loans and Wells Fargo & Co. changed 6 percent, making them the two worst performers in the program among the biggest U.S. banks, Treasury said. Citigroup Inc. modified 15 percent of its eligible loans and JPMorgan Chase & Co. changed 20 percent.

“It has been more profitable to put a home in foreclosure than restructure the loan,” Swonk said. “The only thing that helps is forgiveness of principal, and there is little willingness to do that.”

http://www.bloomberg.com

Senators Dodd And Kent Conrad Cleared

Chris Dodd

U.S. Senators, Chris Dodd and Kent Conrad were cleared of impropriety in accepting discounted loans from, Enzio Mozilo, the deposed CEO of troublesome Countrywide.

Kent Conrad

Regardless of the complaint dismissal, the appearance of impropriety is there. The mere fact they accepted favors of a financial nature, from a corrupt banking CEO that helped to bring the worst mortgage crisis in history on America and by default, Britain, France, Germany, Switzerland and Iceland, who invested in Wall Street, on which he trades, was highly inappropriate.

Senators Dodd, Conrad Cleared on Ethics Complaints

Friday, August 7, 2009; 6:17 PM - The Senate Ethics Committee on Friday dismissed complaints against Sens. Christopher J. Dodd (D-Conn.) and Kent Conrad (D-N.D.) that they used their positions of power to obtain special deals on home loans from lender Countrywide Financial.

After a year-long investigation, the committee told Dodd and Conrad that it found "no substantial credible evidence" that they violated the Senate's ethics rules. The committee found that the senators' loans were processed through the special program, but that they didn't appear to profit financially from it.

But the committee also admonished the senators, saying they "should have exercised more vigilance in your dealings with Countrywide in order to avoid the appearance that you were receiving preferential treatment based on your status as Senator."

The allegations about Dodd and Conrad are part of a politically explosive controversy about whether high-profile politicians and businessmen received special deals on home loans from an exclusive Countrywide program created by former chief executive Angelo Mozilo.

The ethics committee investigation found that participants in the Countrywide program "were often offered quicker, more efficient loan processing and some discounts."

http://www.washingtonpost.com

Banks Still Not Helping Homeowners

The Economic Numbers Confirm It

As I have stated for months, banks are not doing enough to help distressed homeowners and it is driving up the foreclosure rate in America to record highs.

Government data released yesterday, affirms what I have been writing for months regarding the aforementioned matter, as it has been revealed this week, via national figures, only 9% of eligible homeowners have been helped by the billions in bank bailouts, funded by U.S. taxpayer money, which is a disgrace.

Banks are holding on to the money, investing it in other endeavors and not helping the American people, whose homes are at stake. Hence the higher foreclosure rates.

Had the banks held up their end of the bargain, in accepting enormous sums of taxpayer money and actually used it for what the funds where earmarked for, the economy would have experienced a better quarter.

As I have also stated for months, the government cannot play nice with a lot of these banks, as they do not understand that sort of language and conduct, interpreting it as weakness.

We see the end result of that this week, as the numbers confirm, banks have been audaciously hording taxpayer money. It is the equivalent of one's car breaking down, sending an assistant to buy a container of gas, they return with the gas purchased with your money and state, "I'm only going to give you 9% of the gas in this full container, bought with your money. It really won't get you very far, but that's your problem."

Side Bar: If I were head of state anywhere in this world and had to deal with an unruly banking sector, when I called them together in the aforementioned meeting Obama convened a few months ago, I would have let them talk their butts off then simply stated, "Thank you for coming here today. Let's cut to the chase. If I don't see a massive drop in fraud, a sizeable reduction in unjustifiable bonuses and more legitimate consumer loan modifications of a fair and sustainable nature, I'm going to start locking your employees up and I cannot guarantee it won't reach your personal executive office."

Then, I would offer them some coffee, as business people like that after they've been given soul shaking news. It aids in calming their nerves and temporarily helps them not to think about the human lion that's about to figuratively maul them, if they run amok at the taxpayers' expense (grin).

RELATED ARTICLES

The State Of The U.S. Housing Market

Obama Considering Homeowner Rental Plan

Obama To Address Foreclosures

U.S. Effort Aids Only 9% of Eligible Homeowners

Published: August 4, 2009 - WASHINGTON — The Treasury Department said on Tuesday that only a small number of homeowners — 235,247, or 9 percent of those eligible — had been helped by the latest government program created to modify home loans and prevent foreclosures.

A report released by Treasury officials identified lenders who had made slow progress in offering more affordable mortgages, naming Bank of America and Wells Fargo as among those failing to reach large numbers of eligible borrowers.

While 15 percent of eligible homeowners have been offered help through the mortgage modification program, the low rate of actual mortgage reductions has frustrated administration officials.

Michael S. Barr, the assistant secretary for financial institutions, said in a news conference that there were “significant variations” in performance and that some institutions had made “an infinitesimally small amount” of progress.

“I think it’s safe to say we’re disappointed in the performance of some of the servicers,” Mr. Barr said. “We expect them to do more.”

The release of data showing the progress of individual institutions is part of a Treasury effort to push banks to modify loans faster.

Under the $75 billion program, homeowners whose monthly mortgage payments are more than 31 percent of their gross income are eligible for modified loans, with interest rates as low as 2 percent.

Bank of America has modified only 4 percent of the eligible mortgages, and Wells Fargo has modified 6 percent.

Citimortgage, a unit of Citigroup, fared better at 15 percent, while JPMorgan Chase was among the most successful, modifying loans for 20 percent of eligible borrowers. All four institutions received federal bailout money...

http://www.nytimes.com

Stocks Slide on Worse-Than-Expected Jobs Report

On Wednesday the focus was on a report showing that the number of private-sector jobs fell by 371,000 in July, according to payroll company Automatic Data Processing and Macroeconomic Advisers. That was slightly worse than analysts were expecting and indicated that employers continue to slash jobs, though at a lower rate than earlier this year.

The data "suggest the unemployment rate continues to rocket and household cash flows continue to fall. Not a great outlook for spending, we'd say," said Ian Shepherdson, an economist for High Frequency Economics.

http://www.washingtonpost.com