[Aaron Q]

Originally Posted by lvoc

Where on earth are you getting your statistics. NYC and LV delinquencies are in the low teens. There are not enough foreclosures to have any substantial impact. If you dumped all the "zombie" homes at the same time you might get a hiccough but they would all be gone in weeks. They are generally cheap and flippable.

Any non biased real estate professional should be able to find those numbers, you just have to look for them.
How could the delinquency rate of these huge banks be more than three times the CoreLogic figure LVOC?

Let me explain.
First, the delinquency rate for these banks is based on the total outstanding balance of their mortgage portfolio. So 13.7% of the outstanding mortgage balance of Wells Fargo’s portfolio is delinquent. The same is true for the other two banks. CoreLogic data is completely different. Their delinquency rate of 3.9% is based on the number of loans. So 3.9% of the outstanding loans in CoreLogic’s massive database were delinquent. It has nothing to do with outstanding balance.

Why is this important? The vast majority of outstanding mortgage loans are relatively small loans originated in smaller towns, cities or metros that never experienced a housing bubble. You can see this in the size of the average loan guaranteed by Fannie Mae – $159,000.
The housing bubble was not nationwide. It was highly concentrated in roughly 25 larger metros in California, Florida, Arizona, Nevada, and the Northeast. It is in these metros where speculation was rampant, prices skyrocketed in 2004-2006 and the bulk of jumbo mortgages were originated.

Banks and mortgage servicers have been reluctant to foreclose on the large loans that were shoveled out in these bubble metros. But they have had no problem foreclosing on smaller loans.
Large bubble-era jumbo loans make up the bulk of the delinquent inventory of the too-big-to-fail banks today.

30% homeowners who have jumbo loans in Las Vegas are delinquent. These are sitting on the balance sheets of numerous mortgage REITs and to big to fail banks.

[Aaron Q]

Originally Posted by NDJeff

I imagine from the bank's point of view it's better to have the house occupied than empty where it would be a target for squatters.

What I don't understand is why most of you are siding with the banks? Banks hold most responsibility for the global collapse in 2008. Why are you supporting those banks?

The only thing holding up the numbers in housing today is Fannie and Freddie's new NINJA under 5% down home loans which sets the economy up for another misguided crash putting taxpayers at risk. Fannie and Freddie should be disbanded and taxpayers should never be put at risk for home buying. The reason why there are no free market participants to replace Fannie and Freddie is because they are lending at loss with taxpayer backing and they know it.

This is a socialist system. Of course housing will collapse with this system just like before. All socialist systems that don't follow the market do this.

[NDJeff]

Originally Posted by BBMW

In 2009-10 yes. Now they'd probably be able to sell the house if they could get it back.

Yeah probably, and I imagine as the selling prices go up more of them will start doing that. Maybe my guess is wrong and the reason is pure incompetence rather than a calculated risk? Banks aren't property managers, they are large corporations and all those assets are nothing but numbers on a balance sheet. A small local bank might make more logical decisions but the big banks are immune to consequences from bad decisions.

[lvoc]

Originally Posted by Aaron Q

Any non biased real estate professional should be able to find those numbers, you just have to look for them.
How could the delinquency rate of these huge banks be more than three times the CoreLogic figure LVOC?

Let me explain.
First, the delinquency rate for these banks is based on the total outstanding balance of their mortgage portfolio. So 13.7% of the outstanding mortgage balance of Wells Fargo’s portfolio is delinquent. The same is true for the other two banks. CoreLogic data is completely different. Their delinquency rate of 3.9% is based on the number of loans. So 3.9% of the outstanding loans in CoreLogic’s massive database were delinquent. It has nothing to do with outstanding balance.

Why is this important? The vast majority of outstanding mortgage loans are relatively small loans originated in smaller towns, cities or metros that never experienced a housing bubble. You can see this in the size of the average loan guaranteed by Fannie Mae – $159,000.
The housing bubble was not nationwide. It was highly concentrated in roughly 25 larger metros in California, Florida, Arizona, Nevada, and the Northeast. It is in these metros where speculation was rampant, prices skyrocketed in 2004-2006 and the bulk of jumbo mortgages were originated.

Banks and mortgage servicers have been reluctant to foreclose on the large loans that were shoveled out in these bubble metros. But they have had no problem foreclosing on smaller loans.
Large bubble-era jumbo loans make up the bulk of the delinquent inventory of the too-big-to-fail banks today.

30% homeowners who have jumbo loans in Las Vegas are delinquent. These are sitting on the balance sheets of numerous mortgage REITs and to big to fail banks.

This is simple stuff. You assert that 30% of the Las Vegas jumbos are delinquent. Quote a source for your statistic.

It is absurd. You would realize if you had been here that those were the first people who walked away...And know banks are not sitting for 5 or 6 years on non-performing jumbos. We did 3 or 4 of those in the early years. And there were lots more. See virtually none now.

[BBMW]

You're missing the point that I made before. They're likely not foreclosing because they lack the necessary paperwork to prove they have a right to foreclose. In the beginning of the 2008 collapse, they tried doing this fast and loose (remember the robosigning scandal?) But they got found out, and the rules were tightened. With the tightened rules and missing paperwork, they're in a bad place if they try and foreclose. Likely by now the mortgage has been written off.

If I was in one of these houses, I'd might fight to have the title legally cleared, based on the fact that the bank can't legally prove they have a lien.

Originally Posted by NDJeff

Yeah probably, and I imagine as the selling prices go up more of them will start doing that. Maybe my guess is wrong and the reason is pure incompetence rather than a calculated risk? Banks aren't property managers, they are large corporations and all those assets are nothing but numbers on a balance sheet. A small local bank might make more logical decisions but the big banks are immune to consequences from bad decisions.