Imagine, if you would, that you lost your home to foreclosure, but you later learned that the entity that seized your property likely had no right to take it. It sounds unbelievable, right? Well, a recently initiated investigation involving GMAC indicates that may be exactly what has happened in tens of thousands of foreclosure cases across the country.

The investigation, undertaken by the Florida Attorney General, is examining three law firms for allegedly providing fraudulent affidavits that identify who holds the original mortgage note in foreclosure cases. According to a report from NPR, this action has caused GMAC to suspend pending eviction and foreclosure activities.

Continue reading GMAC Investigation Signals Possible Next Meltdown

GMAC Investigation Signals Possible Next Meltdown originally appeared on BloggingStocks on Tue, 21 Sep 2010 14:30:00 EST. Please see our terms for use of feeds.

Continue reading New Foreclosure Hurdles

New Foreclosure Hurdles originally appeared on BloggingStocks on Tue, 23 Feb 2010 14:20:00 EST. Please see our terms for use of feeds.

The loans that got us into this mess were generally the first to fall. Variable rate mortgages written without documentation for people with sketchy credit histories shocked nobody as their slide became an avalanche. But, the good stuff is starting to follow. An increasing amount of fixed rate mortgages offered to borrowers with solid credit histories are feeling their ways to foreclosure. Blame unemployment for this one. When people can't work, it gets pretty hard to pay the mortgage.

Fixed rate, high quality mortgages had a foreclosure a year ago. Last quarter, it jumped to 33%, according to a Mortgage Bankers Association report. As this happened, the amount of homeowners behind on their payments or in foreclosure just set another record high ... for the ninth month in a row. Subprime mortgages are headed in the other direction. Low quality adjustable rate mortgages are now 16% of new foreclosures -- compared to 35% last year. And, more than 18% of Federal Housing Administration loans are anywhere from one payment behind to in foreclosure, with California, Nevada, Arizona and Florida worst off: together, they accounted for 44% of new foreclosures.

Continue reading Even the good die young? High-quality mortgages approaching foreclosure

Even the good die young? High-quality mortgages approaching foreclosure originally appeared on BloggingStocks on Fri, 20 Nov 2009 14:30:00 EST. Please see our terms for use of feeds.

Fannie Mae (NYSE: FNM) has initiated a new Deed to Lease program in which homeowners facing foreclosure will be able to stay in their homes as renters.

During the first half of the year, Fannie Mae has acquired 57,000 homes through foreclosure. These are owners who do not qualify for mortgage restructuring. They must demonstrate that they could not pay their mortgage but can pay rent. The rents paid are lower than their previous mortgage payment.

Continue reading Fannie Mae will rent to owners in foreclosure

Fannie Mae will rent to owners in foreclosure originally appeared on BloggingStocks on Fri, 06 Nov 2009 11:00:00 EST. Please see our terms for use of feeds.

Some of the jobs that have disappeared through this recession are gone forever, it seems. Even when the market turns, and even gains momentum, we could be stuck with a fairly weak employment market for a while. The recovery will take longer than we'd like, putting more distance between now and the top of the next market run. We've lost 7.2 million jobs since December 2007, and the predictions of some economists that we'll get them back by 2014 may actually seem optimistic.

Why is the recovery going to be such a grind? Check out the four major reasons after the jump.

Continue reading Four reasons we're stuck with high unemployment for a while

Four reasons we're stuck with high unemployment for a while originally appeared on BloggingStocks on Tue, 20 Oct 2009 15:00:00 EST. Please see our terms for use of feeds.

Which way is the stock market headed, up or down? That question is on the minds of many investors these days.

We've a 50% run up since the January lows. Nouriel Roubini said: "Markets have gone up too much, too fast." I see the risk of a correction, especially when the markets now realize that the recovery is not rapid and V-shaped, but more like U-shaped.

Continue reading Roubini: Markets are up 'too much, too fast'

Roubini: Markets are up 'too much, too fast' originally appeared on BloggingStocks on Mon, 05 Oct 2009 11:00:00 EST. Please see our terms for use of feeds.

Home foreclosure filings in the United States hit a record 1.9 million in the first half of 2009, according to RealtyTrac --- on more than 1.5 million properties. Again, unemployment is one of the primary culprits, as a lack of income makes it pretty tough to bring a loan at risk of default up to date. The number of filings is up 9% from the second half of 2008 and up almost 15% from the same period last year.

Last month, foreclosure filings were up 5% relative to May and up 33% from June 2008. The month's action was the third highest on record, and it was the fourth month in a row in which there were filings on more than 300,000 properties.

Continue reading Gov't aid can't prevent H1 foreclosure record

Gov't aid can't prevent H1 foreclosure record originally appeared on BloggingStocks on Thu, 16 Jul 2009 13:30:00 EST. Please see our terms for use of feeds.

Continue reading New home construction jumps in May

New home construction jumps in May originally appeared on BloggingStocks on Tue, 16 Jun 2009 18:00:00 EST. Please see our terms for use of feeds.

Continue reading Foreclosures continue to mount

Foreclosures continue to mount originally appeared on BloggingStocks on Thu, 11 Jun 2009 14:00:00 EST. Please see our terms for use of feeds.

Are you in foreclosure proceedings? If so, you can stay in your house longer than you might have thought. All you have to do is tell the bank to hand you a copy of the mortgage contract that proves you are on the hook to pay and specifies the terms of the foreclosure. As long as the bank cannot deliver you that contract, you can stay in the house.

I am not a lawyer; nor am I going to play one here. But if you tell the bank to "produce the note," it must deliver you the paper copy of the contract. And thanks to the way the mortgage market has changed in the last few decades, that simple request could be difficult to fulfill. That's because most mortgages used to get sold to investment banks who packaged them into mortgage-backed securities and sold them to investors around the world.

Continue reading Three words to stall foreclosure: 'Produce the note'

Three words to stall foreclosure: 'Produce the note' originally appeared on BloggingStocks on Fri, 27 Feb 2009 13:50:00 EST. Please see our terms for use of feeds.

The deflation drumbeat continues. As prices drop, businesses produce less and they cut the people doing the producing. With the exception of stocks and oil, it seems that nowhere are prices falling faster than in houses -- slashing $10 trillion in consumer wealth. And the spike in foreclosures adds more supply to the market for houses, just as demand keeps falling.

The foreclosure forecasts and initial unemployment claims figures released today are indeed sobering. The spike in foreclosures is expected to come from Pay Option mortgages, which let borrowers pay less than they owe each month and add that amount into the principal. But the Pay Option resets the rate upward when the new principal rises above 110% of the original amount.

Thanks in part to a 63% -- or $1,053 -- monthly increase in the current $1,672 average payment, foreclosures are expected to rise 125% to 3.6 million by 2010 over the three million that have occurred since 2006. Meanwhile, initial applications for jobless benefits rose to 573,000 in the week ending December 6 -- 9% more than the expected 525,000 -- from 515,000 the week before.

If this is what an Ownership Society is all about, maybe it's time to forget about Ownership and create an Affordership Society where people live within their means instead of borrowing to buy things they can't really afford.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Foreclosures to rise 125% by 2010; jobless claims at 26-year high originally appeared on BloggingStocks on Thu, 11 Dec 2008 09:55:00 EST. Please see our terms for use of feeds.

Freddie Mac (NYSE: FRE) said today that it received a notice from the New York Stock Exchange (NYSE), warning that the mortgage firm could be delisted due to its rock-bottom share price. FRE has been trading below $1 for more than 30 days now, and must notify the exchange by December 2 whether it intends to rectify the problem.

If Freddie does decide to meet the NYSE's listing requirements, it will have until mid-May to address the share-price issue; if not, its common stock and preferred stock are subject to suspension and delisting. In a statement, Freddie Mac said it's "currently working with its conservator, the Federal Housing Finance Agency, to explore options relating to this deficiency and has not yet determined its response."

Earlier this week, Freddie's sister Fannie Mae (NYSE: FNM) received an identical warning from the NYSE. The troubled siblings hit the headlines for somewhat more respectable reasons earlier this morning, when the pair announced they would temporarily halt foreclosures during the holiday season.

After opening broadly higher this morning, FRE has fallen to a 6% loss at 46 cents per share. Sibling Fannie is faring better today; that stock is up roughly 9% at last check -- though today's gain takes the per-share price only as high as 36 cents.

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.

Freddie Mac warned of possible delisting by NYSE originally appeared on BloggingStocks on Fri, 21 Nov 2008 12:40:00 EST. Please see our terms for use of feeds.

Simple California law cuts foreclosures 50% in Los Angeles originally appeared on BloggingStocks on Tue, 04 Nov 2008 14:40:00 EST. Please see our terms for use of feeds.

Continue reading Existing home sales jump, but are we out of the woods just yet?

Existing home sales jump, but are we out of the woods just yet? originally appeared on BloggingStocks on Mon, 25 Aug 2008 14:03:00 EST. Please see our terms for use of feeds.

Donald Trump bails Ed McMahon out of foreclosure mess originally appeared on BloggingStocks on Fri, 15 Aug 2008 12:44:00 EST. Please see our terms for use of feeds.

Continue reading Dumb Money Move No. 10: Buy a home in foreclosure

Dumb Money Move No. 10: Buy a home in foreclosure originally appeared on BloggingStocks on Sat, 09 Aug 2008 08:30:00 EST. Please see our terms for use of feeds.

In this series, we take a look at the 25 stocks on the S&P 500 Index (SPX) that have turned in the worst performance during the past decade -- what went wrong, and what happens next.

Seattle-based Washington Mutual, Inc. (NYSE: WM) was doing just fine on the charts, thank you, until the entire financial-services sector was upended in 2007 by the twin evils of caustic subprime loans and the ensuing credit crunch.

While it's an honor it would probably just as soon not claim, WaMu is a prime example of an otherwise decent stock that got slammed by a macroeconomic stealth bomb.

What went wrong? At No. 9 on our list of SPX stragglers, WM shed 83% of its value during the 10-year period that concluded on June 30, 2008. Prior to June 2007, the stock was trending higher along support from its 50-month moving average. Double-top resistance near $46 proved difficult to surmount, but WM was holding up respectably ... that is, until the first shock waves of the credit crunch hit in spring 2007.

Following news of massive subprime-related losses at hedge funds owned by Bear Stearns, Wall Street's attention was suddenly riveted to mortgage loans and the banks that carried them on their balance sheets. During WaMu's first-quarter report, chairman and CEO Kerry Killinger attempted to reassure anxious investors with the optimistic statement, "Over the past 12 months, we have taken a number of prudent actions to reduce our exposure to the subprime mortgage industry ... [which] limited our exposure to the mortgage market's downturn and position us well to expand and grow as market conditions improve."

Continue reading Worst 10-year performers: Washington Mutual buried by bad-mortgage baggage

Worst 10-year performers: Washington Mutual buried by bad-mortgage baggage originally appeared on BloggingStocks on Wed, 30 Jul 2008 13:27:00 EST. Please see our terms for use of feeds.

In this series, we take a look at the 25 stocks on the S&P 500 Index (SPX) that have turned in the worst performance during the past decade -- what went wrong, and what happens next.

Is it just me, or were Ohio-based regional banks a particular target of the market's wrath during our focus decade? KeyCorp (NYSE: KEY) of Cleveland and Fifth Third Bancorp (NASDAQ: FITB) of Cincinnati have already made cameos on our list of losers -- and I'm not going to give it away, but there's at least one more Buckeye State banker further down the line-up. And, of course, how could we forget Columbus-based Huntington Bancshares (NASDAQ: HBAN)?

What went wrong? At number 14 on our list of SPX laggards, HBAN shed 77% of its value from June 30, 1998 through June 30, 2008. At the end of June 1998, the shares were perched just narrowly atop $25 -- a region that would later switch roles to provide impenetrable resistance from July 2004 through the end of 2006. Now, in the wake of a precipitous price plunge, HBAN is wallowing some 72% below this formerly critical level.

Unlike some other regional banks, HBAN started to feel the pain of subprime-gone-wrong as soon as July 2007. At the time, the bank warned that its second-quarter earnings would fall 11 cents short of analysts' expectations. CEO Thomas Hoaglin admitted, "These results were below our expectations and resulted primarily from difficult and deteriorating residential real estate markets." This admission paved the way for an all-out plunge; from its July 2007 peak to its July 2008 low, the stock shed 81%.

Continue reading Worst 10-year performers: Bad real-estate bets punish Huntington Bancshares

Worst 10-year performers: Bad real-estate bets punish Huntington Bancshares originally appeared on BloggingStocks on Mon, 28 Jul 2008 17:41:00 EST. Please see our terms for use of feeds.

Bloomberg News reports that the 8,500 banks and S&Ls in the U.S. hold $8.56 billion worth of foreclosed homes on their balance sheets. And most of those $6.9 billion, are held by two companies -- Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE). They hold 81% of the foreclosed properties but 50% of the mortgages -- more evidence that Fannie and Freddie financed far more bad loans than their standards should have permitted.

This inventory of foreclosed homes weighs down the entire housing market. Generally, such homes sell for a 20% discount -- and that's not good for the prices in the neighborhood. Bloomberg reports that the prices received for foreclosed properties have declined -- from 93% in 2005 to 74% of the unpaid mortgage principal. Moreover, unless the bank pays to cut the grass and otherwise maintain the foreclosed home, its poor curb appeal taints the neighborhood a bit for potential buyers.

Continue reading $8.6 billion in foreclosed homes weigh down bank balance sheets

$8.6 billion in foreclosed homes weigh down bank balance sheets originally appeared on BloggingStocks on Wed, 23 Jul 2008 10:48:00 EST. Please see our terms for use of feeds.

Countrywide fined $325,000 for ripping off consumers originally appeared on BloggingStocks on Wed, 16 Jul 2008 10:35:00 EST. Please see our terms for use of feeds.