“Judge Melvin Hoffman of the U.S. Bankruptcy Court for Massachusetts overturned the foreclosure of a property transferred through MERS earlier in the week. This case could potentially have widespread ramifications on foreclosures in Massachusetts, as well as other states.”
Mortgage Info
“What happened to the federal housing plan to help people modify their mortgages and keep their homes instead of losing them to foreclosure? An investor renting out the property likely will pay much less than what was owed on the mortgage… here’s the big glitch in the [Federal dollar-for-dollar principal reduction mod] program: Neither Fannie Mae or Freddie Mac, which were taken over by the government during the housing crash, will agree to loan modifications that include principal reductions.”
“Homebuilders have struggled for profitability as sales slumped amid low consumer confidence, tight credit, falling property values and an unemployment rate of more than 9 percent. New-home sales fell to an annual pace of 298,000 in July, the Commerce Department reported yesterday. At that rate, 2011 would be the slowest year in records dating to 1963.”
Former mortgage staffers from Bear Stearns are coming out of the woodworks to explain how Tom Marano’s mortgage group cheated their own clients out of billions. This week I reported at The Distressed Debt Report, EMC insiders say they were told to make up the classification for whole loans, packaged into mortgage securities, to get them switched out of the trust. By classifying the loans as ‘prepaid’ or having ‘subsequent recoveries’ Bear staffers were able to fool the trustee into giving them back loans they were not able to legally service. A move New York Attorney General Eric Schneiderman is actively investigating now. In my latest DealFlow story we hear from EMC staffers who describe how subprime loans, that would have been sold by Bear Stearns trader Jeff Verschleiser’s team, never had a proper servicing license in West Virginia when they were packaged into the residential mortgage backed security. In 2003 Bear/EMC put $100mn of subprime loans from West Virginia into a few RMBS transactions. EMC would service all of Bear’s RMBS after they were sold.
On this KWN podcast Rickards comments on the next likely move from the Fed, given that it has “exhausted” the zero-interest rate policy (ZIRP) and quantitative easing (QE1-2). He also comments on what the Venezuelan gold grab-back means.
“After the obscene extremes of equity valuations seen during the 2000 bubble, we have entered a long valuation bear market which should end in extreme levels of cheapness consistent with an S&P around 400.” — This basically says the US looks to be heading into a Japan-like open-ended financial malaise; what it doesn’t talk about is the distinct possibility (likelihood?) of currency crisis here (and for that matter, Japan), making a mockery of the “Ice Age” metaphor.
“Shoppers paid 4% more for a basket of 16 food items at the supermarket in May compared to February, the American Farm Bureau Federation said Thursday in its latest informal survey.” — That’s a 17% annualized rate of inflation, but don’t tell Ben Bernanke… On Thursday, J.M. Smucker, maker of Folgers coffee and Hungry Jack pancake mix, said its cost of products sold will jump 25% over the next 12 months… “Further retail price increases are likely to be the new normal as we move through 2011, especially for meats,” American Farm Bureau economist John Anderson said in a statement. Based on first quarter reports, Kraft appeared to be the only major food company that was able to raise its prices enough to cover its commodities tab.
“These cases can go on and on. Nationwide, it takes an average of 565 days to foreclose on borrowers in default from their first missed payments to the final auction. In New York, the average is 800 days and in Florida, where the “robo-signing” issue is particularly combative, it’s 807.” — Sad to say it but this serves the banksters right.
The gloves come off: “”In our opinion, the United States has already been defaulting,” Guan Jianzhong, president of Dagong Global Credit Rating Co. Ltd., the only Chinese agency that gives sovereign ratings, was quoted by the Global Times saying… Beijing cut its holdings of US Treasury securities for the fifth month in a row to $1.145 trillion in March, down $9.2 billion from February and 2.6 percent less than October’s peak of $1.175 trillion, US data showed last month.”
“Originally it was thought that Grassley’s requests for details on certain trades was because he was investigating Steve Cohen’s mammoth hedge fund, but in fact, he was investigating the SEC. SAC was being used a case study by the Senator’s office, as he is concerned with how the SEC handles insider trading probes and referrals.”