Implode Explode

``The suit, filed by the state's Attorney General Eric T. Schneiderman, charges that the creation and use of a privately national electronic registration system, MERS, "has resulted in a wide range of deceptive and fraudulent foreclosure filings in New York state and federal courts, harming homeowners and undermining the integrity of the judicial foreclosure process."  Further, the lawsuit charges that the employees and agents of the three banks, Bank of America, J.P. Morgan Chase, and Wells Fargo, acting as "MERS certifying officers," have repeatedly submitted court documents containing false and misleading information that made it appear that the foreclosing party had the authority to bring a case when in fact it may not have. ''

``The Illinois court could -- and should -- have used the rationale in O'Grady and Mortgage Specialists [vs. ML-Implode] to include the TechnoBuffalo blog in Illinois' reporters' shield law. Now, it will probably be left for an appellate court to do this, which will provide judges like Marco A. Hernandez an appellate ruling to cite for the logical conclusion that shield law protect bloggers as they protect other journalists.''

Russ Winter of Winter (Economic and Market) Watch, ML-Implode.com's Aaron Krowne, and the Wall Street Examiner's Lee Adler discuss William Black's Holder & Obama's Propaganda is "Belied by a Troublesome Little Thing Called Facts", plus signs of a housing bottom, and the looming money bomb from the ECB.

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``The housing bottom, if it does indeed arrive in 2012 -- will prove disappointing for those expecting gains on their real estate investment in 2013 or 2014.''

``Deutsche Bank (DB) AG is planning a commercial-mortgage bond deal for February of about $1 billion as Wall Street seeks to reignite sales after the European debt crisis roiled markets and damped lending.''

"Record industrial demand for silver and resurging investor interest is diminishing a supply surplus, driving the metal used in everything from solar panels to batteries into its best start to a year in almost three decades."

``A federal bankruptcy judge has approved a reorganization plan for TH Properties, the Harleysville-based home builder that filed for Chapter 11 protection in April 2009... According to court documents, the reorganization plan is predicated on completion of home construction in two phases of the Northgate development in Upper Hanover Township and at the Wynstone development in New Hanover Township, both in Montgomery County.''

``But even the President can't bend Ed DeMarco. The reason, I believe, is that Mr. DeMarco has "protection". A year ago, the Administration tried to junk DeMarco. It wanted its own guy in charge of the old Agencies. It wanted Ed out of the way so that they could conduct economic policy (quietly) using F/F's $6 trillion of power... The appointment was squashed by one of the strongest hands in D.C. - Senator Richard Shelby (R. Al) put his thumbs down.''

``Everyone with a stake in the current market fears such a return to an open market because it is likely that prices would plummet once government subsidies, guarantees, and incentives were removed. Yet without such an open market, buyers can never be certain that price and risk have truly been discovered. Buyers in today's market may feel that the government has removed all risk from buying, but they might find that they "caught the falling knife;" that is, bought into a false bottom in a market that has yet to reach transparent price discovery.''

"D.R. Horton Inc. (DHI), the largest U.S. homebuilder by volume, reported a first-quarter profit that beat analyst estimates after a year-earlier loss as revenue from home sales rose."

A small PA paper is the only one that has deigned it newsworthy to look into Rick Santorums virtually open-for-all-to-see mortgage deals (as opposed to him getting "glitter-bombed").

As the article details, the sordid tale begins in 2007, when Santorum formed a trust with mortgage and development company NVR's secretary and general counsel James Sack, which then bought a property in Great Falls, Virginia for $2M. It isn't clear (and probably isn't ever going to be public) who exactly put in what capital for that purchase, but I'm going to guess NVRSack put up most or all of it (I wonder why).

Then, over the next couple years, as the property's value fell, it was used by Santorum as essentially a personal piggy bank with up to $2.5M in mortgages taken out on it at a time, from banks including American Home Bank of Lancaster, PA and behemoth ING.

The property was actually transferred from the trust to Santorum in June, 2009 (at that time, as far as we can piece together, the property had $1.5M in mortgages on a $2M sale price, or $500k of equity. How nice of NVR--er, we mean Sack).

We looked at the timeline and pieced together the following interesting milestones:

• Feb. 2010 - The Santorums take out another $1M loan on the property, making about $2.5M total outstanding, on a property that sold for $2M. They are at least $500k in the hole at this point.
• March, 2010 - The Santorums pay back the $1.5M loan, making $1M outstanding -- but now the property appraises at only $1.4M (thus, they were really more like $1M-$1.1M in the hole above, yet somehow got a $1M loan).
• July, 2010 - The Santorums are able to take out another $1M loan, for about $2M total outstanding. But now the property appraises for only $1.2M, so they are $800k underwater.

Keep in mind this is all going on as underwriting standards are as strict as ever. How did he get an additional $1M loan that put the underlying property $800k in the hole? We have to wonder how many more loans Santorum can take out of this already-underwater property, which he was "gifted" from a trust formed with someone from a major developer and mortgage company.

All of this is to say nothing of Santorum's questionable residency and other property/mortgage deals, which the Charter's Valley Patch briefs.

Bank of America has stopped originating cash-out home-refinance loans. The new policy went into effect last week. And the Charlotte, N.C.-based bank has suspended all mortgage refinancing activity that allows homeowners to convert equity in their homes to cash.

...

BofA spokesman Terry Francisco confirmed the policy when contacted by the Charlotte Business Journal, a sister publication of The Business Review. However, he says the change is only temporary. He says the bank has seen a "tremendous surge" in refi applications since a new federal policy took effect Jan. 17. That policy allows banks to refinance homes more than 125 percent underwater and still receive a government guarantee on the loan.

Francisco says the increased volume of applications stemming from that issue forced BofA to temporarily suspend cash-out refis so closing times for other loan types didn't suffer.

"We hope to reinstate them as soon as possible," he says.

"About 302,000 new homes were sold last year. That's less than the 323,000 sold in 2010, making last year's sales the worst on records dating back to 1963. And it coincides with a report last week that said 2011 was the weakest year for single-family home construction on record."

" Republican presidential contenders Newt Gingrich and Mitt Romney are blaming each other for the staggering rate of home foreclosures in Florida and elsewhere in the United States ahead of Tuesday's Florida primary."

"Sales of new U.S. homes unexpectedly declined in December for the first time in four months, capping the slowest year on record for builders"

``The ideas coming out of Washington aren't new but mainly extensions or continuations of previous efforts to help homeowners, especially those with underwater mortgages, and to keep mortgage rates low to attract new buyers.''

"It turns out California's redevelopment agencies--which, I just love to keep saying, will be abolished in a week--have produced something beside corruption, poverty, and blight: The RDAs have also run up nearly $30 billion in debt that must be serviced by Golden State taxpayers. "

"New York developers Simon Elias and Izak Senbahar may lose two boutique hotels in midtown Manhattan after a state judge cleared an investor group to proceed with foreclosure on the properties."

``KBW analysts believe the plan might look something like an extension of the current HARP plan to include private mortgages. Still, they too seem to doubt the likelihood of the plan getting approval and called the proposal to pay for refinancing package with a bank tax a "poison pill."''

This nails it. Jesus Christ Obama, you are one weak, two-faced bank shill. Principal cram-downs should be "paid for" by forcing banks to pay for the fraud they committed in issuing the mortgages -- there can be no legitimate "philosophical" objection to that. Or even better, just push for a repeal of the bankruptcy "reform" act of 2005, and let the chips fall where they may. If the people of this country are not allowed to settle their mortgage debt to a level of burden they can actually bear, this economy is going to be as doomed as Greece's, and for essentially the same reasons.

`` Fannie Mae today announced that the company issued $7.2 billion multifamily MBS(1) in the fourth quarter of 2011, the highest quarterly issuance since Fannie Mae began reinvigorating its multifamily MBS business in 2009. '' -- Fannie isn't "reinvigorating" anything -- there's just more multifamily demand because the exurbs are dying and demand is shifting to condos and other non-standalone units.