Landmark Decision Promises Massive Relief for Homeowners and Trouble for Banks
A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark Natioal Bank v. Kesler,  2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership. The significance of the holding is that if MERS has no standing to foreclose, then nobody has standing to foreclose -- on 60 million mortgages. That is the number of American mortgages currently reported to be held by MERS. Over half of all new U.S. residential mortgage loans are registered with MERS and recorded in its name. Holdings of the Kansas Supreme Court are not binding on the rest of the country, but they are dicta of which other courts take note; and the reasoning behind the decision is sound.

Delayed Foreclosures Stalk Market
Debra and Arthur Scriven were served notice in June 2008 that their mortgage lender, a unit of Citigroup Inc., was preparing to foreclose on their home. Fifteen months later, the Scrivens are still in their home near Columbia, S.C., and battling to stay there, even though a dispute with the lender over how much they owe prompted them to stop making regular payments last year... Legal snarls, bureaucracy and well-meaning efforts to keep families in their homes are slowing the flow of properties headed toward foreclosure sales, even when borrowers are in deep distress. While that buys time for families to work out their problems, some analysts believe the delays are prolonging the mortgage crisis and creating a growing "shadow" inventory of pent-up supply that will eventually hit the market.

"Option" mortgages to explode, officials warn
The federal government and states are girding themselves for the next foreclosure crisis in the country's housing downturn: payment option adjustable rate mortgages that are beginning to reset."Payment option ARMs are about to explode," Iowa Attorney General Tom Miller said after a Thursday meeting with members of President Barack Obama's administration to discuss ways to combat mortgage scams. "That's the next round of potential foreclosures in our country," he said.

Adolfo Pesquera: Gaming the finance system: breaking down the Housing Jungle
When housing construction was going full throttle --- hmmm? --- how was quality control keeping up? Simple answer: what quality control? In fact, many good craftsmen left the housing industry during its peak, because they took pride in their work, and wanted a pay grade subcontractors were not willing to pay...For builders and lenders, it's all about eliminating risk during the process of making a profit. Less risk equals more profit. No risk equals piles of ill-gotten profit. Homebuilders were, still are, masters of eliminating risk. Warranties written on homes are designed by homebuilders...five years ago...for every four homes sold each month, one house was going into foreclosure.

CNBC The House of Cards
CNBC presents the definitive report on the defining story of our time. CNBC correspondent David Faber investigates the origins of the global economic crisis, with first person accounts from home buyers, mortgage brokers, investment bankers and investors – most of whom let greed blind them, leading to the greatest financial collapse since the Great Depression....Collapse"Let's hope we are all wealthy and retired by the time this house of cards falters." Preview * Origins of the Financial Crisis "Then and Now" WATCH THE FULL SHOW 

Eviction patrol heats up on U.S. foreclosures
ANAHEIM, California (Reuters) - It's home to Disneyland -- "the happiest place on earth" -- but deputies enforcing home evictions in Anaheim find mold, backed-up plumbing, marijuana crops, abandoned grandparents and the occasional suicide... One common task these days is serving eviction notices to people who have done nothing wrong -- who rent properties that have fallen into foreclosure, or are repossessed to recover unpaid debts.

Behind FHA Strains, a Push to Lift Housing
As it tried to help shore up the ailing housing market during the past year, the Federal Housing Administration increased its exposure, particularly to mortgages in high-cost states that have also seen some of the sharpest price declines.  Now concerns are mounting that the agency -- and the U.S. taxpayer -- may have to pay the price.  The FHA insures loans secured with down payments as low as 3.5%. But values in many markets in which it has been increasing its activity have fallen far more than that in the past year. The result: A growing number of homeowners with FHA-backed loans owe more than their homes are worth and are more likely to default...Congress allowed the agency to make much larger loans, up to $729,750...

Judges’ Frustration Grows With Mortgage Servicers
Bobbi Giguere had no luck in securing a loan modification from her mortgage servicer, Wells Fargo. For months, she had sent the bank the financial documents it requested to process her modification. But each time she called to check on the request, she was told to send her paperwork again...On Thursday, something happened. She questioned a Wells Fargo official about the bank’s lack of response — under oath.

So Many Foreclosures, So Little Logic
LAST week, the stock market tumbled on news that housing foreclosures and delinquencies rose again in the first quarter. The Office of the Comptroller of the Currency said that among the 34 million loans it tracks, foreclosures in progress rose 22 percent, to 844,389. That figure was 73 percent higher than in the same period last year. Foreclosures remain one of the great financial ills for the economy. The Bush administration largely overlooked foreclosures affecting average homeowners, focusing instead on propping up elite, troubled financial institutions with taxpayer funds. The Obama administration has said it wants to wrestle the foreclosure issue to the ground by encouraging mortgage loan modifications, but its efforts have gotten little traction...But the most fascinating, and frightening, figures in the data detail how much money is lost when foreclosed homes are sold. In June, the data show almost 32,000 liquidation sales; the average loss on those was 64.7 percent of the original loan balance.

Grassroots Resistance to Housing Foreclosures Spreads
"This is a crowd that won't scatter," James Steele wrote in the pages of The Nation some seventy-five years ago. Early one morning in July 1933, the police had evicted John Sparanga and his family from a home on Cleveland's east side... A grassroots "home defense" organization, which had managed to forestall the eviction on three occasions, put out the call, and 10,000 people--mainly working-class immigrants from Southern and Central Europe--soon gathered, withstanding wave after wave of police tear gas, clubbings and bullets, "vowing not to leave until John Sparanga [was] back in his home." ...By the end of the 1930s, farmers' and home-owners' struggles had pushed the legislatures of no fewer than twenty-seven states to pass moratoriums on foreclosures.  In the early months of 2007, as the first of the subprime lenders began to declare bankruptcy, Bautista started contacting major lenders, asking them to stop foreclosures and take part in a "massive loan-modification program"--dropping interest rates, writing down principals and donating executive bonuses to a fund for borrowers at risk of default. ...At the time, almost one-fourth of Countrywide's subprime loans were delinquent. The meeting, Bautista says, was fruitless: "Eyes are closed, ears are closed." Over the next few months, she met three more times with Countrywide management, getting nowhere