PENDING HOME SALES DOWN AND PROSPECTS BLEAK

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EDITOR’S NOTE: This Reuters report is no news to many who are trying to sell a home. Buyers are scarce and when they show up they low-ball their offers because the realtors are confessing that it is possible — even probable — that a house being sold today for $300,000 might not fetch a gross of $275,000 this time next year.

So Sellers are contending with nick-picking. Buyers are doing inspections and other things and finding what they can to demand lowing the price the price below the contract amount. And of course there is the title problem. How can the Buyer get clear title when there is or was a loan on the property that was subject to a securitization claim? Whose to know if the right party is properly representing itself as the creditor or servicer for the creditor in the absence of a chain of documents establishing that fact?

The facts are clear: title is at best clouded and at worst incurably defective. Based upon interviews with people in the title industry whose living depends upon making a correct assessment of the status of title, along with my own analysis, my opinion is that out of the 6 million foreclosures processed so far in this mortgage mess, 99% are fatally defective. That same figure should be applied without foreclosure if there was a loan in the chain of title that was or is subject to a claim of securitization.

It all comes down to the comment of a Hedge fund manager I was speaking with some months back. He said that he and his colleagues would leap at the chance to bet against the validity of the mortgages if such a vehicle existed. The marketplace has decided: there is a growing demand for documentation and other instruments that will hedge against the probability that title is clear and a growing demand for a hedge instrument that presumes that title is completely messed up, courtesy of the Banks.

American Homeowners Cooperative is working on an answer — a vehicle that will provide either cash to those who have given up the fight or a level playing field for those who want to modify their mortgages regardless of whether they are behind in payments. But more on that later.

The main point is that without stopping these foreclosures and without restoring clear title on the foreclosures that have already been improperly processed, there won’t be a solution to the housing market, the mortgage mess or the prospects for economic recovery. The same analysis applies to al the other homes that have or think they have mortgages and payments due where the homeowners is dutifully paying monthly. The cold reality is that they could be foreclosed anyway, as we have already seen, and that when it comes time to sell, they won’t be able to give a warranty deed without exposing themselves to enormous liability that title insurance won’t cover.

This enormous problem is dragging down the entire economy, employment prospects the value of our currency and making our prospects bleak at best. The current obstacle to a resolution is (1) the banks and servicers that pretend to serve as middlemen for investors and borrowers while they screw both sides and (2) the ignorance of cooperation (or both) of government that refuses to accept the reality and thus permits continuing losses to pile up for investors who advanced the money in the first place and borrowers who borrowed it under false pretenses of Banks who hid the real terms of the transaction from both investors and borrowers.

September pending home sales down for third month

(Reuters) – Pending sales of existing U.S. homes dropped for a third successive month during September, a real estate industry group reported on Thursday, though a sales index was above year-ago levels.

The National Association of Realtors (NAR) Pending Home Sales Index, based on contracts signed in September, was down 4.6 percent to 84.5.

Economists polled by Reuters ahead of the report were expecting sales to edge up 0.1 percent rather than to decline.

Lawrence Yun, the NAR’s chief economist, noted the index was still above its level in September 2010 of 79.4 but said the housing market was constrained by numerous factors.

“A combination of weak consumer confidence and continuing tight lending criteria held back home buyers, even though the private sector added nearly two million net new jobs in the past 12 months,” Yun said.

Pending home sales in September fell in every region of the country from August levels.

(Reporting by Glenn Somerville, Editing by Andrea Ricci)

Tags: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND
Posted in bubble, Corruption, Eviction, securities fraud |