The Foreclosure Events of today

PALM CITYS HORSE TALK

Foreclosure wheels begin to turn again for Bank of America, GMAC

NEW YORK – Oct. 19, 2010 – Bank of America and Ally Financial’s GMAC Mortgage have begun to lift their freezes on more than 100,000 foreclosure cases in Florida and other states, saying they’re not finding flaws in their paperwork.

Late Monday, Bank of America issued a statement saying that it expects to begin going back next week to courts in the 23 states where foreclosures are a judicial process, including Florida. A statement from spokesman Dan Frahm said the lender is preparing to re-submit documents in 102,000 foreclosure cases already underway.

Also Monday, Ally Financial spokesman James Olecki confirmed that GMAC is re-submitting documents in some foreclosure cases including at least one in Florida “as each of those files is reviewed and remediated when needed.”

Among major lenders, Bank of America had called a halt to all foreclosure sales nationwide. It also, along with GMAC, JPMorgan Chase and PNC Financial Services, initiated reviews in the 23 judicial foreclosure states. Bank of America later extended its review nationwide. Wells Fargo did not undertake a review of its procedures.

Major lenders in September began announcing halts to all or parts of their foreclosure processes, after revelations – in sworn statements submitted in lawsuits in which homeowners are fighting foreclosures – showing that employees or representatives failed to verify mortgage paperwork before submitting foreclosure cases to courts.

The so-called “robo-signers” said, under oath, that they handled thousands of documents each month without knowing whether they were accurate, as required by court procedure.

The GMAC and Chase documents surfaced in Palm Beach County cases that are still going through the courts.

On Monday, Bank of America said its “initial assessment findings” have shown “the basis for our foreclosure decisions is accurate.”

GMAC’s Olecki wrote in an e-mail, “Again, we have been in the midst of a review for approximately two months and have found no evidence of any inappropriate foreclosures to date.”

A spokesman for PNC Financial said the lender hasn’t changed its position on reviewing foreclosure documents. A spokesman for JPMorgan Chase repeated the bank’s intention to review about 115,000 foreclosure files and delay foreclosure sales.

Monday’s developments won’t speed the foreclosure process in Florida’s overburdened courts, said Alexander Fernandez, director of homeownership preservation for Neighborhood Housing Services of South Florida. He noted there are more than 50,000 cases in Broward County alone that are still pending. And renewed cases, he said, would probably go to the back of the line.

Foreclosure defense attorneys questioned how the process can be re-started. “Do they simply get to resubmit the document and go on like nothing happened?” said Matthew Weidner, a St. Petersburg foreclosure defense attorney.

Beyond Florida, Bank of America said it would continue its halt of foreclosure sales in the 27 states that do not handle foreclosures through the judicial system.

Copyright © 2010 Sun Sentinel, Fort Lauderdale, Fla., Harriet Johnson Brackey. Distributed by McClatchy-Tribune Information Services.

Our Week In Review

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PALM CITYS HORSE TALK. Our Week In Review

OVERVIEW ~ April 26 through April 30, 2010 ~ The stock and bond indices worked hard to hold their own with several powerful forces buffeting them all week. The stock and credit markets, lacking a strong sense of direction, moved up and down with each day’s predominant economic news story.

FOCUS ~ Perhaps most telling regarding the certainty about where the economy is headed was the weak reaction in the markets to Friday’s announcement that the Gross Domestic Product (GDP) had grown by 3.2% in the first quarter of this year. Let’s look deeper.

The good news in the GDP data was that consumer spending was up markedly, growing at a 3.6% rate, and spending by businesses was up, while inflation remained very low. (All of these aspects of economic growth are considered and included in the GDP, all of which has an effect on the mood of investors.)

Though inventory rebuilding was down relative to the prior quarter in the GDP report, as expected, it still made up half of the most recent quarter’s 3.2% economic growth. In the last quarter of 2009, the effect of inventory building was one of the largest factors driving the overall GDP growth rate higher (to a strong 5.6%). Inventory rebuilding is an inevitable component of an economic recovery as businesses prepare for more sales. Analysts expected this quarter’s inventory growth rate to decline, since so much inventory rebuilding had already been accomplished in the prior quarter. But inventory rebuilding remained a surprisingly important factor in the most recent GDP report.

This is not bad, but may not be sustainable. Surely, it will be a far smaller factor in second quarter growth, which leaves us uncertain about the amount of growth our economy may be able to muster from April through June of this year with less growth from inventory rebuilding. The GDP report, in other words, really doesn’t supply the clues needed to forecast short-term economic growth (or, should it occur, contraction).

This uncertainty increases the markets’ vulnerability each day as investors seek a trend or a trend-making force and settle on one issue or news story one day, and another on the next day. A strong, sustained real estate (and overall economic) recovery will depend on more certainty and confidence regarding employment growth and consumption, among other indications of recovery. Without that, the markets may remain very volatile, lacking clear direction so long as growth in the near-term future remains so uncertain.