REGION: Foreclosure scam busted, officials say : North County Times - Californian

The attorney general's office started investigating Hutchings and his companies ---- he also used the business names of Federal Land Grant Co., Land Grant Services and KBS Resources ---- after receiving a tip from a real estate agent, according to the affidavit.

Hutchings and his associates explained to homeowners facing foreclosure during seminars that if they acquired a federal land grant, it would supersede the bank's grant deed and keep them from foreclosure, county officials said.

No such land grant program is known to be legitimate, according to the affidavit.

"I can tell you the moon is made of cheese. And if I say it enough, some people will believe it," said Stephen Robinson, deputy district attorney. "There is no federal land grant program."

When officials served one of the search warrants, Martinez and Gil were presenting a seminar to more than 50 people, officials said.

Many of the victims were Latino, and Hutchings' seminars were translated into Spanish, officials said.

Foreclosure Rates still hitting records

Based on my san diego real estate practice in which I do short sales, deeds in lieu and walk away plans, the situation is gettting worse and not anywhere near the bottom.

Many upside down home owners have been attempting to short sales only to find out that the holders of second loans are not cooperating in the short sale process. They are quite concerned when they find out the seconds can come after them for the deficiecy (if the loan was refinanced.)

Bank of America is suggesting borrowers must sign notes for 85 to 100 percent of the loan balance. Other lenders are holding out for money even though the borrowers have non recourse loans.



CNN Money || Foreclosure filings hit record in April

May 14 2008: 08:08 AM EDT

NEW YORK (CNNMoney.com)
U.S. foreclosure filings reached a record high in April, rising almost 65% over the previous year and putting municipalities at risk by cutting into the value of taxed property, according to a study released Wednesday.

Some 243,353 households, nearly one in 519, received a foreclosure filing during April, according to the U.S. Foreclosure Market Report from RealtyTrac, an online marketplace that tracks foreclosed properties. That was up 4% from March, and surpassed the record of 239,851 set in August 2007.

It's "the highest monthly total we've seen since we began issuing the report in January 2005," said chief executive James J. Saccacio in a statement.

RealtyTrac's measure of foreclosure filings includes notices of default, auction sales and bank repossessions. According to the report, 54,574 were fully repossessed by banks in April.

Property tax plunge: The record number of foreclosures added their weight to an already saturated real estate market, pulling down home prices. Plunging home values reduce the money that cities, villages and towns collect in property taxes.

In particular jeopardy are parts of Nevada, California, Arizona and Florida, whose states maintained the highest foreclosure rates, according to RealtyTrac.

"For example, the city council in Vallejo, Calif. - part of a metropolitan area with a foreclosure rate that ranked sixth highest in the nation in April - last week voted to have the city file for bankruptcy," said Saccacio.

The state of California had the second-highest foreclosure rate in the nation, up 112% over the previous year and affecting about one in 204 households. The top spot among states was held by Nevada, which maintained a foreclosure rate 3.6 times the national average, affecting about one in 146 homes.

California Walk Away Plans and foreclosures

In mortgage market, ‘walkaway’ homeowners may be urban myth - Los Angeles Times

In mortgage market, ‘walkaway’ homeowners may be urban myth
Foreclosures

This article is an interesting. The title is deceptive. I would say 80% of my calls are from people who would walk away if they were not concerned about their credit. Of course when they learn about their exposure to deficiency judgments (for California real estate see - sold out juniors or judicial foreclosures) they become interested in short sales and deed in lieus.

The concept is also deceptive because my law partner found some stats which showed a very strong relationship between negative equity and foreclosures. And these stats were assembled prior to the current foreclosure "crisis".

Doubts Raised on Big Backers of Mortgages - New York Times

Doubts Raised on Big Backers of Mortgages - New York Times: "“It’s not irrational to be thinking about a bailout,” said that person, who requested anonymity, fearing dismissal.

Fannie and Freddie do not lend directly to home buyers. Rather, they buy mortgages from banks and other lenders, and thereby provide fresh capital for home loans. The companies keep some of the mortgages they buy, hoping to profit from them, and sell the rest to investors with a guarantee to pay off the loan if the borrower defaults.

Because of the widespread perception that the government would intervene if either company failed, they can borrow money at lower interest rates than their competitors. As a result, they have earned enormous profits that have enriched shareholders and managers alike: from 1990 to 2000, each company’s stock grew more than 500 percent and top executives were paid tens of millions of dollars."


These companies are holding up prices. If these companies were not supporting the market - prices would return to where they should be sooner.

What ever happens I suspect the government will get it wrong.

The question is should the bubble burst or should you let the air out slowly and burden the tax payers.

I suspect Real estate prices in the bubble markets like san diego and sarasota and bradenton florida are far from the bottom

The Associated Press: Fannie Mae loses $2.2B in 1Q, warns of severe weakness

The Associated Press: Fannie Mae loses $2.2B in 1Q, warns of severe weakness: "Fannie Mae reported losses of $2.2 billion in the first quarter and the nation's largest buyer of home loans said Tuesday it would cut its dividend and raise $6 billion in new capital, with expectations that the housing slump will persist into next year.

Home prices fell faster in the first quarter than Fannie Mae had expected, the government-sponsored company said, and it will open a $4 billion share offering immediately, with the remainder being offered in the 'very near future.'

Following the stock sale, Fannie Mae's federal regulator, the Office of Federal Housing Enterprise Oversight, will cut the capital surplus cushion the company has to maintain by 5 percentage points to 15 percent, with another five-point cut in September, provided there is 'no material adverse change' in the company's regulatory compliance."

Right now fannie mae and perhaps freddie are breathing a little life into San Diego Real estate. What happens when they keep losing billions of dollars a quarter.

Short sales san diego - the real story behind short sales

Here is a link to an article which may explain why some of these large banks can't seem to review a short sale offer in timely manner. (without threats from an attorney).



Bloomberg.com: News: "itigroup, Wells Fargo May Loan Less After Downgrades (Update3)

By Mark Pittman, Alan Katz and David Mildenberg"

I have suspected all along Wells and BofA are pains in the ass because they do not want to have to acknowlege how truly screw up their books are.

In my opinion the short sale process seems to be designed to let the air out of the market as slowly as possible. It is quite possible if short sales were easier, prices would be lower and the banks would all be upside down.

Deed in Lieu of Foreclosure

We have had a few deeds in lieu of foreclosure accepted in the last few weeks. Interestingly, the lenders seem to acknowledge they should release the sellers from a deficiency without us having to do a lot of new legal work. I have found on short sales I frequently have to contact the banks to get things straightened out.

The California deeds in lieu were well done and we only suggested a few changes for clarity. The Florida deed in lieu paperwork was a mess. In my opinion the the paperwork misidentified the parties and did not address the release of liability from the note to my complete satisfaction. However, since my client had been and investor in the florida property we did not want to push the issue very hard.

I will say the Deed in Lieu paperwork can be pretty detailed and you definitely need to make sure all the parties are properly identified. Some lenders seem to have trouble identifying the parties clearly because there are so many involved.