Total 2011 Foreclosure Filings Reach 2.7 Million – Expect 2012 To Be Worse

Fed Chairman Ben Bernanke must be talking to himself by now.  Despite driving interest rates to zero and the expenditure of trillions of dollars to prop up the housing market, home prices declined again in 2011. The most recent data on foreclosure activity makes it clear that the Fed’s efforts to date have accomplished next […]

Mortgage Default Is A Financial Bonanza For Many Homeowners As Foreclosure Crisis Continues

The Office of the Comptroller of the Currency (OCC) painted a gloomy picture for the housing markets with its release of the OCC Mortgage Metrics Report for the third quarter of 2011.  Mortgage delinquencies remain at high levels and foreclosures increased by double digits. The OCC report covers mortgages serviced by federal savings associations and […]

Housing Market On Critical List As Sales Plunge and Strategic Defaults Loom

The latest news on housing remains distressing and points to continued depreciation in home values. New Home Sales Plunge Again – The Census Bureau and the Department of Housing and Urban Development released figures showing that the number of new homes sold in 2010 totaled only 321,000 – the lowest reading in 47 years.  The […]

Big Banks Say Mortgage Crisis Is Over

The latest financial results from the banking industry point to a resolution of the mortgage crisis that nearly resulted in the nationalization of the country’s biggest banks three years ago. In a dramatic turnaround the country’s largest banks have repaid government loans, often with large profits to the government.  Billions of dollars in new capital […]

Court Ruling Against Bank Foreclosures Could Spiral Into Full Blown Financial Crisis

The recent Massachusetts Supreme Court ruling against Wells Fargo and U.S. Bancorp is likely to bring foreclosures to a crawl, resulting in a further destabilizing of housing markets.  The Court ruling is a major win for debtors and a severe blow for creditors trying to clear a backlog of millions of defaulted mortgages. The Massachusetts […]

The Compelling Case For A New Wave Of Mortgage Defaults And Bank Failures

Two new reports make a compelling case that the markets have not fully discounted the probability of another flood of residential foreclosures precipitated by the continuing decline in home values.  The potential impact of price depreciation on the quality of loan portfolios casts serious doubt on the notion of a long term profit recovery for […]

Banks May Be Facing A Tidal Wave Of Mortgage Defaults

Although bank stocks have rallied recently, it may be premature to expect a recovery for the banking industry.   There are multiple indicators that a housing recovery is little more than a distant dream and current trends suggest that mortgage defaults may increase substantially.   With banks currently holding approximately $3 trillion dollars in residential mortgages, […]

FDIC’s Bair Says Real Estate Crucial To Entire Economy – $3.5 Trillion In Mortgages At Risk Of Default

October 13, 2010 – Can the economy improve without a recovery in real estate values?  This question was addressed today by FDIC Chairman Sheila Bair, in a speech to the Urban Land Institute in Washington, D.C.   Despite optimistic forecasts by various analysts, Ms. Bair cited the daunting challenges that must be overcome in order to […]

Can The Banking Industry Survive Another Five Years Of Declining Housing Values?

The banking industry came close to collapse in 2008 as loan defaults surged and property values collapsed.  Government intervention and successful efforts to raise additional capital by major banks have since stabilized the banking industry, despite a record high level of delinquencies (see Consumers Delinquent on $1.3 Trillion Of Debt). Where we go from here […]

Negative Equity Causes Half Of All Mortgage Defaults

June 29, 2010 – Anecdotal evidence has been suggesting for some time that many mortgage borrowers will deliberately chose to default when the mortgage exceeds the value of the property.   Empirical research released by the Federal Reserve Board now shows exactly how big a problem strategic mortgage defaults have become for the banking industry. The […]