Archive for February, 2010

Foreclosure is Preferred Choice for Banks to Quiet Title

February 21, 2010

In the Page entitled “Foreclosure Profits Deter Loan Mod” last week I suggested three possible motivators for banks to foreclose in preference to short sale or loan modification.  Then I went to a seminar by attorney Michael T. Pines and another light bulb lit up brightly.  Given the muddled situation with respect to rights and interests in loans that have undergone the securitization process, foreclosure is the quickest way to clean up the mess and consolidate profits with clear title to the asset underlying the mountain of paperwork.  After all, the home is the only thing of real value in all this.  In addition, the trail back to ill begotten profits that were pocketed during the course of previous loan cycling is erased and there’s a clear slate for renewed pillaging of the home when it gets back into the marketplace.

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Bank Profits – One West $1.6B

February 21, 2010

One West Bank recorded a profit last year of $1.6 billion [see LA Times Business 02/20/2010].  The FDIC stands to lose $11 billion.  This one year of profits was more than OWB paid to buy predecessor Indy Mac from the FDIC in March of 2009.   OWB’s feeding frenzy is being fueled by rampant foreclosures and turning loan modifications into a farce.  Your personal experience by way of comment would help document.

Loan Modifications Jump. Is This Progress?

February 18, 2010

The stated goal of the Home Affordable Mortgage Program is to modify 3 to 4 million mortgages by 2012.  At a pace above 110,000 per month, nearly double last month, it could be that the program is on track by number of mortgages.  But in dollar terms, $2.2 billion allegedly saved by homeowners doesn’t compute.  Over what period of time?  Total funding is $75 billion, so where, when and how is that money being spent?

Why do Banks Prefer Foreclosure?

February 16, 2010

A video appeared February 8, 2010 by a group called “Think Big, Work Small”.   The subject matter of the video is a case history of borrowers  who, by virtue of a series of agreements between One West Bank and the FDIC that were entered into when the failed IndyMac Bank was taken over by OWB last year, completed a short sale that resulted in an estimated 34% profit for OWB.  To add insult to injury, the borrowers had to sign a promissory note to OWB for an additional $75,000.  I studied the situation and wrote an article summarizing the highlights (see companion Page on this blog “Foreclosure Profits Beat Loan Mod”.  It does appear that the loss sharing arrangement between FDIC and OWB facilitates quick, easy and virtually guaranteed profit maximization by foreclosure.  What do you think?