More on the Coming Wave of Foreclosures

In response to Mortgage Default Notices Surge 33% Nationwide, 55% in California, 200% by Bank of America; Corresponding Jump in Foreclosures Will Follow Patrick Pulatie at LFI Analytics writes ....
Hello Mish,

This is what was expected, and the timing is just about right.

Apr 13, 2011, the OCC ordered the Consent Decree affecting 16 entities, banks, servicers, & MERS. The lenders were given 60 days to present plans how meet the demands of the Decree, and 60 days to actually implement the plans, which would have been Aug 13.

The Decree covered the foreclosure process, and specifically addressed MERS and Certifying Officers. The Decree detailed what need to be done to ensure that any MERS signing and foreclosure was lawful in the particular state where the property was located.

Combine this with the MERS "order" to foreclose in the lenders name, decisions like Gomes v Countrywide in the CA Appeals Court, and now the 9th Circuit ruling supporting MERS, the lenders can begin to foreclose again with relative ease, as long as they follow the Decree.

Likely, much of the rest of the country will experience similar actions, especially since the lid has been lifted in New Jersey.

Most of the homeowner lawsuits to come will be based upon issues with loan modifications. There will still be some based upon foreclosure processes, but these will likely be on pre Aug 13, initiations. Of course, for large numbers of attorneys, they will still file actions based upon the old allegations, but such attorneys only care about the income stream.

There are 1.9 million homes over 90 days late in the US. 6.9 million are delinquent. So, we can see what is coming.

Also, I am now noticing a new trend. Homeowners who received legitimate HAMP loans in 2010 and were able to afford repayment are now re-defaulting again. This time, like before, the defaults are caused by substantial loss of income due to the economy. I expect to see much more coming.

Patrick Pulatie
One of the key rulings that will increase the rate of foreclosures comes from the 9th Circuit Court. Please see 9th Circuit Court Ruling Legitimizes MERS for details.


Pulatie pinged me with this comment
Calvo v HSBC

This case in California just clarified that there is no need for any Assignment of the Deed of Trust to be recorded prior to foreclosure.
Statute CCC 2932.5 is put to rest.

It essentially nails the coffin lid closed on foreclosure defenses that attorneys have been using, when combined with the 9th Circuit ruling and Gomes v Countrywide.
Mike "Mish" Shedlock
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