Meet your new thread, same as the old thread.

[Atticus Grinch]

Originally posted by SlaveNoMore
By propping up artificially high RE values - ostensibly so homeowners can continue the "American Dream" of owning a home - it's keeping countless others on the outside of the American Dream of owning a home.

Careful. I made a similar argument on the FB about the NFL, and the next thing I know Hank is posting a fantasy about the HS version of me getting wilded in the shower. Don't say I didn't warn you.

[Cletus Miller]

Originally posted by sebastian_dangerfield
Has that case where the Fed Judge dismissed a foreclosure action because the owners of the securities couldn't get the original mortgage papers caused any reverberations? I read the ruling and, after cracking up a bit, thought "Wow, what a gift for lawyers. All those billable hours tracking that stuff through the pipeline."

I hadn't seen it before. It's just a procedural issue, unless the mortgage originator has filed bankruptcy. Everyone will have their assignments in order next time.

In this case, it seems that the lawyer dug his own hole: "Plaintiff’s, “Judge, you just don’t understand how things work,” argument reveals a condescending
mindset. . .". It's never a good idea to approach a federal judge in a manner which could be percevied as condescending. Whoever represented DB is lucky they didn't get sanctioned.

[sebastian_dangerfield]

Originally posted by Cletus Miller
I hadn't seen it before. It's just a procedural issue, unless the mortgage originator has filed bankruptcy. Everyone will have their assignments in order next time.

In this case, it seems that the lawyer dug his own hole: "Plaintiff’s, “Judge, you just don’t understand how things work,” argument reveals a condescending
mindset. . .". It's never a good idea to approach a federal judge in a manner which could be percevied as condescending. Whoever represented DB is lucky they didn't get sanctioned.

Yeh, that was pretty funny. Sadly, I can't say I haven't heard something like it before, but usually at the state level. Doing that in Fed Ct is just fucking insane.

[Cletus Miller]

Originally posted by sebastian_dangerfield
Yeh, that was pretty funny. Sadly, I can't say I haven't heard something like it before, but usually at the state level. Doing that in Fed Ct is just fucking insane.

Oh, I've heard (and read) similar things out of other federal courts, but it's always a statement made out of frustration when he knows he's going to lose. It's not a good time to start complaining.

[Mmmm, Burger (C.J.)]

Originally posted by Cletus Miller
A significant percentage (perhaps most) of the foreclosures are on "investor" properties. If there's no one living in them and no hope of flipping, then there's no reason to make payments. Make no payments for 6 months and don't return calls from teh lender, what else is the lender going to do?

Isn't there also a problem with having all of the mortgages securitized, and as a result getting the various interested holders of a piece of the mortgage together to agree to work-out terms is much more difficult than if, say, a single bank owns the loan?

[sebastian_dangerfield]

Originally posted by Mmmm, Burger (C.J.)
Isn't there also a problem with having all of the mortgages securitized, and as a result getting the various interested holders of a piece of the mortgage together to agree to work-out terms is much more difficult than if, say, a single bank owns the loan?

Were they packaged like that? I thought the pools were made up of individual mortgages at their smallest component level. I didn't think any individual mortgage was sliced up.

[SlaveNoMore]

Mmmm, Burger (C.J.)
Isn't there also a problem with having all of the mortgages securitized, and as a result getting the various interested holders of a piece of the mortgage together to agree to work-out terms is much more difficult than if, say, a single bank owns the loan?

Much more a problem with commercial than resi.

[SlaveNoMore]

sebastian_dangerfield
Were they packaged like that? I thought the pools were made up of individual mortgages at their smallest component level. I didn't think any individual mortgage was sliced up.

See comment above.

[taxwonk]

Originally posted by sebastian_dangerfield
What I don't understand is why so many properties are in foreclosure so rapidly. Is this because the paper was flipped so many times? Or is everybody running to foreclose so they can sell off the properties while the discount is still modest? You'd think they;d want to be a little more open to liberal workouts from a cash flow persepctive. Maybe it's a regulatory thing.

I think it's driven by regulations requirng them to declare a loan non-performing and reserve against it at 60 days past,

[Cletus Miller]

Originally posted by Mmmm, Burger (C.J.)
Isn't there also a problem with having all of the mortgages securitized, and as a result getting the various interested holders of a piece of the mortgage together to agree to work-out terms is much more difficult than if, say, a single bank owns the loan?

The typical pooling and servicing agreement allows the servicer to do a number of things without consent. Many (I don't know RMBS structures well, so maybe it's different) provide for a special servicer with greater power to modifiy loan terms in bad circumstances.

What I've read indicates that the general thinking on the "bailout" allows for the modification of the loan terms without the consent of the holders or the need to resort to special servicing. I think that there are a lot of entities holding RMBS bonds who have no idea about anything related to the basic structure of the security, nevermind the much discussed lack of knowledge of the underlying assets. All they knew is that the interest payments were higher.

[Replaced_Texan]

Originally posted by Cletus Miller
In a lot of places, yes. There are several new condo buildings in Chicago where, a few months after the initial closings, about 30% of the units are listed for re-sale. Parts of Florida and Las Vegas are likely worse. No doubt, the foreclosures in Michigan ad Ohio aren't being driven by flippers.

Most of the forclosures in my neighborhood have been one very crappily built building that went up about three years ago.

BTW, every city should have a real estate blog like Swamplot. It's great for keeping an eye on what's going on in your community.

ETA: Recent post on swamplot about forclosures and crappy new construction. With video!

[taxwonk]

Originally posted by sebastian_dangerfield
Were they packaged like that? I thought the pools were made up of individual mortgages at their smallest component level. I didn't think any individual mortgage was sliced up.

Individual mortgages aren't sliced up. It's the owners of the trust units (or the CMO holders) with various tranches that won't release their security interests and covenant protections in a workout scenario where they know they're losing their asses unless someone pays them a consent fee.

[SlaveNoMore]

Cletus Miller
I think that there are a lot of entities holding RMBS bonds who have no idea about anything related to the basic structure of the security, nevermind the much discussed lack of knowledge of the underlying assets. All they knew is that the interest payments were higher.

Bondholders are fairly sophisticated, so I'm not sure about that. And anyone below investment grade definitely knows the structure from inside-out.

[SlaveNoMore]

taxwonk
Individual mortgages aren't sliced up. It's the owners of the trust units (or the CMO holders) with various tranches that won't release their security interests and covenant protections in a workout scenario where they know they're losing their asses unless someone pays them a consent fee.

Eh, maybe and probably.

[Cletus Miller]

Originally posted by SlaveNoMore
Bondholders are fairly sophisticated, so I'm not sure about that. And anyone below investment grade definitely knows the structure from inside-out.

Most bondholders are sophisticated. Many state and county pension funds are not so much--Orange County is holding some RMBS, for example; and the over-publicized Norsk town. But the lower tranche holders--they knew what they were buying.