DFW Real Estate News » Foreclosure News

Average Foreclosure Time in U.S. Sets New Record

John Jones — Thu, 01 Dec 2011 15:07:12 +0000

Florida-based Lender Processing Services reported today that the average U.S. loan in foreclosure has been delinquent a record 631 days. After-effects of the robosigning scandal coupeled with additional red tape in judicial-foreclosure states have reportedly pushed this to the highest level on record. Ineffective loan modifications were also noted as a factor contributing to both the increase in foreclosures for October of 2011 as well as the increase in length of time it takes to repossess a property.

Texas is a non-judicial foreclosure state and foreclosure times are typically way below the national average.

Article from CNBC.com

May 2011 Foreclosure Filings Down Significantly from May 2010 in D/FW Area

John Jones — Tue, 26 Apr 2011 01:35:22 +0000

Finally some good news in the area of foreclosures for the Dallas – Fort Worth area: Foreclosure postings for residential homes were reported to be the lowest in more than three years for the upcoming May auction. The new report, released by Foreclosure Listing Service, showed there to be a total of 3,719 foreclosures for the counties of Dallas, Tarrant, Denton and Collin. That’s a steep decline of more than 23% compared to May of 2010.

The record number of foreclosures for a single month was set one year ago this month (April of 2010) when the same four county area posted a whopping 6,168 residential foreclosures.

The year-to-date figures have also dropped by 8%.

Although any significant drop in foreclosure activity would appear to be good news, it’s hard to say at this point whether the drop is attributed to a decline in delinquencies or if other factors, such as government concerns about lenders’ foreclosure procedures are not at least partly to blame.

Furthermore, sales of homes in many areas of North Texas have shown declines compared to last year, so there is also some concern that some lenders may be purposely delaying foreclosure proceedings in some high-risk areas to avoid saturating the market with inventory.

Increased supply of foreclosed homes can create downward pressure on prices which could certainly magnify the losses that many lenders will take on some of these homes.

A Good Article Summarizing the Legal Issues of “ForeclosureGate”

John Jones — Fri, 22 Oct 2010 05:09:31 +0000

Although this article begins by telling the story of a man who was able to dodge making his mortgage payments for the last eight years because of the same issues coming to light on a much larger scale today, it goes on to provide a very detailed summary of the various legal issues involved in what many people are now calling “ForeclosureGate”.

The crux of the problem lies in how the MERS system was created and structured as a way for lenders to circumvent having to record the ownership of mortgage notes as they were traded though different mortgage-backed securities.

There seems to be little question that borrowers in these cases have not been making their payments and are in default of the terms of their note. The question is whether or not the foreclosing entity has legal right to do so as required by the due process of law in the Fourteenth Amendment to the US Constitution.

Because of the common-law nature of our legal system which allows the courts to set legal precedents with regards to these cases, the end result may be quite different from one state to the next. For example, judges in Kansas, Arkansas and Maine have ruled that MERS has no legal right to foreclose on homeowners since they can’t prove ownership of the mortgage note. Although Texas is a non-judicial foreclosure state, home owners could still file lawsuits to challenge a forced sale of their property.

Where this will all end is anyones’ guess at this point. Today, HUD Secretary Donovan downplayed the significance of these issues, going as far as stating, ”We are not finding any evidence of underlying structural issues that would make [mortgage] securitizations suspect or otherwise.” Bank of America and Chase also announced they did not find any significant paperwork flaws with their foreclosure processes and will be resuming foreclosure sales next week.

Big problem? Or no problem at all? I guess it depends on who you ask.

Of course, this wouldn’t be the first time the government and the banks have sounded the “all clear” when the tornado was right around the corner.

We’ll just have to wait and see.

Article from Bloomberg.com

Texas Attorney General Joins Other States in Probe Of Foreclosure Practices

John Jones — Tue, 19 Oct 2010 19:46:41 +0000

Texas attorney general Greg Abbott announced last Wednesday that he is joining attorneys general and other regulators in the probe of foreclosure practices by lenders. Despite the fact that Texas does not require judicial foreclosure, Abbott said they would be looking into both judicial and non-judicial foreclosure practices.

In Texas, a homeowner who feels they may have been wrongfully foreclosed upon by their lender via non-judicial means must effectively sue the lender to challenge the foreclosure action.

Foreclosure activity in Texas remains strong despite the ongoing investigations. It’s estimated that foreclosure filings are only down about 10-12% for next month.

Article from Dallas Morning News

SEC Looking Into Foreclosure Practices of Some Companies

John Jones — Sun, 17 Oct 2010 19:53:39 +0000

A source with the Securities and Exchange Commission told Reuters that the agency is looking into the practices of some of the nations mortgage servicers to see if any securities laws were violated. At this point, they have stopped short of calling it an “investigation” and also said that they are not targeting any specific company.

At the heart of this speculation may be whether some companies engaged in multiple securitizations of the same mortgage notes. The fact that many servicers were apparently not following the required protocol for recording legal ownership of some mortgage notes certainly opens up the possibility that some type of securities fraud may have occured. But at this point, we’ll have to wait and see if this inquiry will develop into a full-blown investigation with possible criminal indictments. It can take the SEC years to gather the evidence to put a case together, so there may not be any additional news to report on this for a while even if evidence exists that some servicers may have violated securities laws.

Article from CNBC

New Foreclosure Crisis Could Give Some Borrowers Leverage in Negotiating Lower Payments Via Modifications

John Jones — Thu, 14 Oct 2010 18:53:40 +0000

Revelations that some lenders may have used “robo-signers” and possibly committed other acts of fraud related to due process of foreclosure may give some borrowers leverage in trying to negotiate options to save their homes, including loan modifications.

It’s important to note that foreclosure in Texas is non-judicial, which means it is essentially a private matter and it’s unclear what the implications of these alleged actions by some mortgage servicers and their agents may mean for Texas homeowners.

Texas homeowners faced with foreclosure should contact an attorney who specializes in foreclosure litigation to review their options.

Article from MSNBC

MERS Issues Press Release Clarifying Its Role In Tracking Ownership of Notes

John Jones — Wed, 13 Oct 2010 18:49:33 +0000

MERS, the electronic registration system that tracks the ownership of mortgage notes nationwide, issued a statement attempting to clarify its function in the registration of mortgage documents.

Article from Nasdaq.com

Foreclosure Mills at Heart of New Foreclosure Crisis

John Jones — Tue, 12 Oct 2010 18:32:12 +0000

Among many of the revelations to surface from the new foreclosure crisis are allegations of foreclosure mills, companies that allegedly forged and backdated documents related to the processing of foreclosure paperwork.

In addition to the obvious issue of fraud, this brings to light possible legal issues with regards to the due process of law, which is guaranteed to all Americans in Section 1 of the Fourteenth Amendment to the Constitution. In states like Texas where the foreclosure process is handled out of court because the deed of trust grants the trustee the authority to force a sale, this may not be as much of an issue as it will be in the 23 states where court action is required.

Article from Blacklistednews.com

White House Official Questions the Need for a National Foreclosure Halt

John Jones — Mon, 11 Oct 2010 18:48:04 +0000

A top White House official questioned the need for a nationwide moratorium on foreclosures because there are undoubtedly cases where borrowers have legally defaulted on their notes and should lose their homes.

It remains to be seen just how widespread the alleged fruad exists with regards to paperwork used to evict homeowners delinquent on their mortgages. But this will certainly pick up steam as the midterm elections draw closer.

Article from Huffingtonpost.com

Bank of America Halts Foreclosures in All 50 States

John Jones — Fri, 08 Oct 2010 17:38:21 +0000

Bank of America announced just a short time ago that they were halting foreclosures in all 50 states. According to a story from Fox Business, this applies to both foreclosure proceedings and the sale of previously foreclosed homes to new buyers.

Buyers who are under contract to purchase a Bank of America foreclosure should consult with their real estate agent as to how this may affect their closing.

Last week, Bank of America halted foreclosures in the 23 states that require judicial action as potential flaws in foreclosure paperwork were revealed with a number of large mortgage servicers.

This new foreclosure scandal is rapidly unfolding by the hour. New developments will likely occur over the coming days and weeks concerning issues that may affect lenders’ ability to lawfully foreclose on homes. In addition to the shoddy foreclosure paperwork practices known as “robo-signing”, issues with the legality of how securitized mortgage notes were being transferred between owners without proper recording methods are also being questioned.

In short, the “New Foreclosure Crisis”, as many are now calling it, appears to involve multiple complex issues that are not yet fully understood. As a result, the repercussions that will result from this are also not fully known.

Article from Yahoo