It looks like you're using an Ad Blocker.

Please white-list or disable AboveTopSecret.com in your ad-blocking tool.

Thank you.

 

Some features of ATS will be disabled while you continue to use an ad-blocker.

 

Banks involved in price fixing - Foreclosures Distorting Housing Data

page: 1
2
<<   2  3 >>

log in

join
share:

posted on Aug, 27 2008 @ 09:32 PM
link   


Foreclosures May Distort Housing Data - August 26, 2008

...the record-setting surge in foreclosures could be distorting some of the closely watched housing data used to gauge the market's health.

The foreclosure glut is making listings of homes for sale a less reliable indicator, because much of the distressed inventory might be left out. In addition, fire-sale prices for such properties may also be skewing volume figures.

Some real estate analysts say this may indicate that housing conditions are worse than they now look, dampening hopes that the troubled market could soon be bottoming out.

www.courant.com...



The banks are sitting on huge inventories of foreclosed homes. They can release all thier inventory at once and crash the financial markets quickly or they can gradually release thier inventories into the real estate market and slowly collapse the financial markets.

By sitting on thier inventories and only releasing small batches at a time they are in essence involved in price fixing.

With the FDIC breathing down thier necks I'm betting that there will be a rush for the exits and a flight into gold.


[edit on 27-8-2008 by In nothing we trust]




posted on Aug, 27 2008 @ 09:46 PM
link   
reply to post by In nothing we trust
 


Actually, one of the reasons that lenders are slow to foreclose is that they may lose more money on the foreclosure than a workout solution for the troubled homeowner. In many states, due to foreclosure laws, the bank may go a year or more with no money coming in. Since many of the current foreclosures are for mortgages that are close to, or exceed current appraised value, with the downward pressure on prices, banks would rather arrange a solution that the current homeowner can meet, as far as financing is concerned. Many of the numbers that are being pushed around by the media are actually "potential" foreclosures or "pending" foreclosures.


Lenders and Foreclosure

􀂃 Lenders and investors do not make money on foreclosures. Losses range from 20 cents to 60 cents on the dollar. Lenders typically lose $50,000 or more on one foreclosure.
– Craig Focardi, CMB, Research Director, TowerGroup’s consumer lending division, cited by Dona Dezube, “Heroic Homeownership,” Mortgage Banking, (June 2006) p. 82.
􀂃 Low- and moderate-income borrowers who enter a repayment plan are 68% less likely to lose their homes.
– Dona Dezube, “Heroic Homeownership,” Mortgage Banking, (June 2006) p. 82.


[edit on 27-8-2008 by ProfEmeritus]

[edit on 27-8-2008 by ProfEmeritus]



posted on Aug, 27 2008 @ 09:49 PM
link   
reply to post by In nothing we trust
 


The objective for a bank with a foreclosed home is to sell at market prices .. but because large amounts of foreclosed homes are being sold it "saturates" the market. Because of this, Supply and Demand says the price must go down. This is why not all markets are going down, and some are still rising .. it all depends on localized economy, local wage increases, economic expansion and financial security of populations in specific regions. While foreclosures may be up everywhere, unless the amount saturates the market the demand for houses is still there..

Most foreclosed homes are sold through realtor's and looking at them for sale you would never know it's been foreclosed .. Sometimes you will see "short sale" meaning to entice borderline buyers the banks lower the price -- lowering the market prices for all homes -- typically by 20k at a time. Usually a bank will lower the price of a home once a month in smaller increments of 5-10k a month.

Banks do not (typically) sell off large blocks of homes that are in good condition .. they still aim to profit, not take a hit and have to write down profits on their books. The homes being "fire-sold" so to speak are dilapidated degenerated homes. Usually they are sold to commercial/residential developers to tear down and build something new, or contractors looking for some stock to work on. The sale of large blocks of homes is actually good for the economy and cities because it repairs dilapidated homes.

But for all intents and purposes, the homes foreclosed by banks are already on the market .. there is no "releasing" them .. once a home is foreclosed it's profile is handed over to the marketing teams at Realtor companies.

So .. yes banks are forcing home prices across the country down .. but only because it's the natural cycle for them to take.. the homes where overvalued and the inventory was over demands.

This of course will also cause foreclosures to increase. If you bought a home last year for $300k and today it's worth $245k .. some people panic, and they run away from their burdens. Immature and takes advantage of the situation .. also destroys sympathy that should be given to those forced out through unemployment and inflation.

PS. The FDIC is an Insurance Corp. that deals with deposits .. while they list crisis banks their regulation is rather limited .. the real power comes from the Federal Reserve .. the FDIC however is not regulating what banks are doing with foreclosed homes. So essentially, the article and you are both wrong on all counts.



posted on Aug, 27 2008 @ 09:53 PM
link   
reply to post by ProfEmeritus
 


True indeed that MSM reports of foreclosures are "first filings" not actual foreclosures. From first filings it takes quite a while to process.

If a bank can negotiate a borrower to pay their debts in another way, or renegotiate the terms they profit more from the interest payments and fees then they do shelling out 30k on a short sale home..

The number of actual foreclosures is up of course, but if all the foreclosures reported on the media where final well .. every bank in the country would have already have collapsed is my bet.



posted on Aug, 27 2008 @ 10:11 PM
link   


The number of actual foreclosures is up of course, but if all the foreclosures reported on the media where final well .. every bank in the country would have already have collapsed is my bet.


You are 100% correct. If that happened, this would make the 1929 look like a picnic.



posted on Aug, 27 2008 @ 10:45 PM
link   

Originally posted by ProfEmeritus
Many of the numbers that are being pushed around by the media are actually "potential" foreclosures or "pending" foreclosures.


I won't disagree with you there.


Are realty foreclosures as bad as they are reported in the media? Not according to a spokesman from RealtyTrac, an Irvine, Calif.-based organization that tracks foreclosures. According to the firm, journalists sometimes misunderstand or misreport the company’s analysis.

www.businessandmedia.org...


Try and analyze the data and you get a headache. Something isn't right though. There are 26,000 bank owned properties in my county and 32,000 more that have received auction notices. For a county that has an average annual sales rate of 50 - 60K properties a year, that equates to a years supply of bank owned or potentially bank owned properties.

I only see about 1% a week going to public auction, which equates to about how many they are currently foreclosing on at the same rate. So all they are doing is maintaining thier current levels of inventory.

If they want to get ahead of the curve they need to be releasing 5% - 7% per week.

I heard a realtor on talk radio telling first time home buyers that they better buy now before all of the good deals are gone. Just a month before the rest of the 100% loans (AKA FHA) go away.



[edit on 27-8-2008 by In nothing we trust]



posted on Aug, 27 2008 @ 10:59 PM
link   


I only see about 1% a week going to public auction, which equates to about how many they are currently foreclosing on at the same rate. So all they are doing is maintaining thier current levels of inventory.


If you look at it from a supply and demand point of view, it makes sense. Imagine if all of a sudden, all of their inventory were put up for sale. Since the supply would be tremendous of houses available, the selling price would plummet, and the bank would lose even more money on each home.

I call it the "Beanie Baby" or "Cabbage Patch Kid" effect. When they were introduced, the toy manufacturers kept supply lean, so that there would be justification for running the prices up. Once there were more on the market (supply) than were desired by kids and collectors (demand), the price plummeted.



posted on Aug, 27 2008 @ 11:01 PM
link   

Originally posted by ProfEmeritus
If you look at it from a supply and demand point of view, it makes sense. Imagine if all of a sudden, all of their inventory were put up for sale. Since the supply would be tremendous of houses available, the selling price would plummet, and the bank would lose even more money on each home.


Like I said - Price fixing.


[edit on 27-8-2008 by In nothing we trust]



posted on Aug, 27 2008 @ 11:08 PM
link   

Originally posted by Rockpuck
...the demand for houses is still there...


Maybe the demand is still there, but it doesn't mean that everyone has the credit or income to qualify.

Let's see now, millions of people who did buy a house and got behind on payments now have trashed credit and since housing sales are down, economic growth is down, meaning income and savings are down.


And a retraction of liberal lending practices means that more savings are required. Kind of a catch 22 if you ask me.

Perhaps a return to a service based economy and lower wages, is in order, then we could build new houses for less than existing houses.


[edit on 27-8-2008 by In nothing we trust]



posted on Aug, 27 2008 @ 11:36 PM
link   
Some people have been on to this for a while now. Just google "shadow inventory", "REO", or better yet, do it atML-Implodometer. Mr. Mortgage (aka hedgie, Mark Hansen) has been on top of this for a while now. He even seems to get access to numbers a day or two before they hit the MSM.



posted on Aug, 28 2008 @ 12:13 AM
link   
Oh no, banks in financial crises. What are we going to do.


Banks DO NOT WANT TO WORK WITH BORROWERS. Flat out. Why do you think they pitched a fit when California proposed a law requiring banks to have a face to face meeting with the borrower before initiating foreclosure? (Does anybody know what happened to that?)

It's just going to get worse and worse. Talk to average people. They realize we are in the first stages of a depression. But all the economists, etc., want to blow smoke up everyone's keister.

The bank's turns are coming. They're holding onto these properties, rubbing their greedy little hands together, while their piggy-eyes shine with avarice, thinking "All we have to do is hang on to them until the market turns around!". Little do they know what's coming down the pike. And I will laugh like a mad-man when the banks start collapsing. They've had it coming for a long, long time.

People are starting to treat banks how employees started treating employers in the middle of the 90s. No loyalty, no compromise, and with the attitudes of "Screw you, what's in it for me?". (Which, by the way, the employers had been doing to employees for a good 20 years before that.)

Look at how banks jack with ATM costs. Are any of you old enough to remember when ATMs first came out, and people didn't want to use them? "Oh, they'll be great, you'll love them, you will be able to get your money out any time you want! And guess what? This will allow us to LOWER COSTS!". Guess what mosts banks do? If you take money out of an ATM that is not theirs, the ATM machine gets a cut, and YOUR BANK gets a cut. So much for "lowering costs". See, ATMs were first put in as a way for the banks to avoid hiring tellers. Then, when they got everyone hooked on them, they had to "start charging money, because they cost so much" (sniffle, sniffle). Bull. Banks are no longer happy with a modest, conservative return on their money. No, they want more! More! MORE!

I laugh (at the banks) every time I see someone walking away from a house when the price has fallen by 30%-50%. I laugh even harder when I find out that they are holding on to it, and not putting it on the market. The banks are just now starting to find out what it's like to be used, and have your money taken. And it's about time.

Know what the latest thing is? They've been doing this one for about 5 years now, maybe a little longer. I've seen for myself a few people, and heard about quite a few more that have gotten bit on this one. Let's say you have $80 in the bank. But you THINK you have $180. So, you roll up to the ATM and tell it to give you $100 (remember, you only have $80 in the bank). It gives you the $100. So, now you are overdrawn, and they tack on a $35 service charge. So in essence, they have just now loaned you, WITHOUT YOUR AGREEING TO IT, $20, at 175% interest. LOAN SHARKS DON'T EVEN CHARGE THAT MUCH INTEREST! Quite a racket, no?

That one bit me in the butt about 5 or 6 years ago. Once I noticed what happened at the ATM, I immediately went inside. Know what they said? "You should have known how much was in your account." They removed the "overdraft" charges once I explained to them how they were in direct violation of the Federal Lending Laws, and not only could they face civil action, but there was a very real danger of them being CRIMINALLY prosecuted for bank fraud. It's amazing how quickly that "overdraft charge" was dropped once "bank fraud" was mentioned!

Here's another vile, despicable thing they do. If your checking account is running low, any checks, electronic transfers, payments, etc, that are drawn out of the account are held up until the end of the day. They don't process them in the order that they came in. Oh, no! They will take the BIGGEST outlays first. That way, they can charge even MORE "overdraft charges".

It works like this. Say you have $1,000 in your account. On this day, a $50 ATM withraw comes in, followed by a $100 debit card expenditure, then a $150 electric bill comes in, then there is a $250 check (that you forgot about), finally, the $600 house payment comes in. Ok, so if they process it in the order that it comes in, you only have one $35 overdraft charge (which is the $600 check that came in last).

But check this out: They rearrange the order the money is taken out of your account. First, they take out the $600, leaving you with $400. Then they will take out the $250 check, leaving you with $150. Then they will take out the $150 electric bill. Your account now stands at ZERO. So, they then take out the $100 debit card purchase, leaving you at -$100, THEN they take out the $50 ATM which puts you at -$150. Now, they get to charge you TWO $35 overdraft fees, whereas before (and if they would have removed the money as it came due) they could only charge you 1 fee!

That's never happened to me, but there have been MANY, MANY, MANY complaints about that.

So, remember all the ways that banks try to SCREW their customers, before you start shedding a tear for them because they are getting stiffed by those "immoral, juvenile people who won't live up to their word"!. The people that run banks have forgotten that you don't have to screw over your customers to make a healthy profit.

Some would even say that the banks are receiving their "just desserts". Some would say that they are "reaping what they have sown". Some would say that they are just receiving karma.

Me? I say the bankers and investors tears are so very, very sweet to the taste.


[edit on 28-8-2008 by sir_chancealot]



posted on Aug, 28 2008 @ 01:46 PM
link   
On Monday, CNBC was touting the unexpected rise in 'existing home sales' as a possible indication that the US housing market had bottomed.

What they didn't tell us....

Existing homes returning to lenders as a result of failed foreclosure auctions, get recorded in their respective counties as 'sales'. The data is collected & reported by NAR.

It might actually be a positive indicator when the "sale of existing homes" begins to decline



posted on Aug, 28 2008 @ 02:01 PM
link   
reply to post by In nothing we trust
 


Hey Nothing,

I work for RealtyTrac, as a matter of fact I'm sitting in a cubicle from their office in Irvine, replying to this...yes, understanding the data can cause a stroke if you stay at it too long.

Here is the problem with foreclosure data and the sites that aggregate this information - when a house goes into foreclosure it's because a lien holder is not getting their monthly payment (or hasn't received one for a few months - depends on the states foreclosure laws in this regard). Now, in many cases the home owner has also taken out a 2nd on the home, which adds another lien holder that can, and usually does, foreclosure as well...

This means that the actual number of foreclosures in a specific area may be quite inflated because the site mining this data counted both lien holders' demand for payment, incorrectly adding to the number of foreclosures in that area.

Hope that explains why the data is skewed at times...if the website reporting the information only takes into account the house in foreclosure, and not the number of loans in default, then the numbers are true...otherwise, the site is just padding the numbers to get your interest in their data.

And check this out...the foreclosures situation in this country is gonna get much worse before it gets better...there are a tsunami of ARM's that still need to adjust over the next 2 to 3 years. So, the prudent buyer will have ample opportunity to land a deal if they do their research correctly.



[edit on 8/28/2008 by chapter29]



posted on Aug, 28 2008 @ 06:59 PM
link   

Originally posted by chapter29

I work for RealtyTrac

Here is the problem with foreclosure data and the sites that aggregate this information - when a house goes into foreclosure it's because a lien holder is not getting their monthly payment (or hasn't received one for a few months - depends on the states foreclosure laws in this regard). Now, in many cases the home owner has also taken out a 2nd on the home, which adds another lien holder that can, and usually does, foreclosure as well...

This means that the actual number of foreclosures in a specific area may be quite inflated because the site mining this data counted both lien holders' demand for payment, incorrectly adding to the number of foreclosures in that area.


So how accurrate is the foreclosure data on realty trac?

[edit on 28-8-2008 by In nothing we trust]



posted on Aug, 28 2008 @ 07:58 PM
link   


Like I said - Price fixing

No, it is NOT price fixing to decide how much of your inventory to sell. It is a standard practice for virtually all businesses to do this. If it were price fixing, then every company in the world would be guilty of it. No regulatory agency in America can tell a company how much of it's inventory it can sell. That's why it's called FREE enterprise.



posted on Aug, 28 2008 @ 08:35 PM
link   
reply to post by In nothing we trust
 


The numbers are good to go now; we fell into the same thing about 2 years ago, but it was pointed out by a rival company and we immediately, and I do mean immediately, revamped how our outside vendors collect thier data...

The FBI used are numbers in a foreclosure scam study they conducted last year and MSN and Yahoo use us as well.

The best data out there in my opinion, as far as loan positioning goes, is Orange County Records Research...they dont have a fancy website and they dont offer a lot of soft data such as does the house have a pool, how many fire places, ect...but they provide every loan attached to the property and put it in its correct position.

But we have lots of tools, bells and whistles on our site, so we attract more traffic; and OCRR only serves a very limited number of areas.

The next big thing, which is already in place on a very small number of sites, is online Auctioning...get ready for that bad boy! It's gonna be all the rage in the on-line R.E. world...

Peace



posted on Aug, 28 2008 @ 08:50 PM
link   
I despise your company and your website.


(and they already do online auctioning..)



posted on Aug, 28 2008 @ 09:04 PM
link   
reply to post by Rockpuck
 


Thank you for not including me in that comment; unless you feel like starting $hit with someone that is only commenting on the OP's topic...

And I did mention that auctions are already online...attention to detail, huh?

You want to go ahead and get me 60k job at another comapny within about 20 - 40 (see, I even gave a high mileage 'cause I'd love to see what you can come up with since you have a stance and opinion that everyone else must here) within Irvine, and I'll go interview...

But if I'm to stand trial for working at a company that DOES generate revenue off the misery of others, than this conversation is over...and BTW instead of hiding behind the anonymity of a forum, why don't you pull that soap box out and start taking a stance on the street?

Rookie comment man...



posted on Aug, 28 2008 @ 09:37 PM
link   

Originally posted by chapter29

The numbers are good to go now; we fell into the same thing about 2 years ago, but it was pointed out by a rival company and we immediately, and I do mean immediately, revamped how our outside vendors collect thier data...

The best data out there in my opinion


Oh good, that's where I got my data from.


So when your company's site says that there are 32,000 properties at auction that means that there are 32,000 separate properties that have received a default notice or that there were 32,000 default notices sent out to ???? many properties?

And 26,000 bank owned properties is accurate. How often is it updated?

[edit on 28-8-2008 by In nothing we trust]



posted on Aug, 29 2008 @ 12:35 PM
link   
reply to post by chapter29
 


Not sure why your being all defensive, I never said anything about you.. but since you apparently wanted it:

I love it when a Corporate Stooge gets his panties in a bunch when someone criticizes the company he WORKS for. I could understand it being your own company but eh .. you sit in a cubicle.



And I did mention that auctions are already online...attention to detail, huh?


Ya, they have been around for a while and I have taken part in a few. Most where through private channels.. for instance a broker establishes some investors and holds a web conference to discuss in detail each property. All in all live auctions are better.



You want to go ahead and get me 60k job at another company within about 20 - 40 (see, I even gave a high mileage 'cause I'd love to see what you can come up with since you have a stance and opinion that everyone else must here)


While I may be arrogant, I am not so much that I have to wag my little pecker about for all to see. 60k a year? I make much more then that, and I don't work for a corporation. And since we are playing the "whos got the bigger dick" here I also have a nice office, not a cubicle. Not that what your pay grade is effects how cheap your company is.

Realtytrac's main source of income is enticing average joe to sign up on the site for a "free listings" of foreclosures.. then they charge them an obscene amount of money the second it goes over. Why would anyone pay for foreclosure listings? It's free information, it is PUBLIC records. Find a damn agent to pick up listings for you. Realtytrac is nothing more then an online scam. But as long as they hire fools and pay them decent money to sit in a cubicle and explain to average joe why they can't get a refund for their shoddy services, then I s'pose it's ok.



and BTW instead of hiding behind the anonymity of a forum, why don't you pull that soap box out and start taking a stance on the street?


I advise anyone looking for a foreclosure to use an agent. I used an agent and thankfully he advises all his clients to stay away from online scams.

Hope this doesn't ruin that hardon you got for your company. Your CEO ought to give you a medal for such devout admiration.

PS. Welcome to ATS.




top topics



 
2
<<   2  3 >>

log in

join