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Archive for Sunday, November 28, 2010

Number of foreclosures in Douglas County still rising

November 28, 2010

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Map of foreclosures in Douglas County

View an interactive map of foreclosures in Douglas County from 2006 to 2010.

Recently mortgage paperwork from a national bank crossed the desk of Lawrence attorney Jonathan Becker.

It came with a signature Becker recognized: M. Matthews.

Becker receives information from an electronic mailing list that tracks the employees of national mortgage companies who have allegedly signed off on an enormous number of mortgage documents without checking the detailed information that they contained.

Those employees have been dubbed robo signers — and M. Matthews is among them.

“We know it is a false affidavit,” Becker said about the paperwork.

The day after Becker spied the questionable signature, banks and federal regulators were testifying before Congress on the faulty paperwork practices that threatened to worsen the nation’s housing crisis.

The Kansas Attorney General’s Office is among the 50 attorneys general who are investigating the process.

“Part of what we are doing is creating a framework to identify how many Kansas homeowners might have been affected by this,” said Gavin Young, spokesman for the Kansas Attorney General’s Office. “There is just no way of knowing.”

Young couldn’t say much else, noting that the attorney general’s office considers the matter an ongoing investigation.

Foreclosures rising

Foreclosures in Douglas County have continued to climb. So far this year, the Douglas County Sheriff’s Office has auctioned 204 homes that have gone into foreclosure. That’s a 62 percent increase from the number of total sheriff’s sales in 2009 and a 143 percent increase from 2007, the year before the economy tanked.

Business at Housing and Credit Counseling Inc. has remained brisk.

At the start of the economic downturn, the nonprofit agency mainly counseled clients who had taken out bad loans or had mortgages that were beyond what their salaries could cover, said Robert Baker, director of education. Now, it’s people who’ve been laid off.

“What you are a seeing now are more folks who had decent jobs and could afford the mortgage, but now in an economic downturn it is not affordable,” Baker said.

As foreclosures rise, Becker sees more people willing to walk away from their homes.

“I’m seeing people come in and you can look at them for 35 seconds and you can tell this guy is struggling and depressed. And the reason he is depressed is because he is facing a no-win situation. He is trying to put a roof over his wife and kids,” Becker said. “You tell him you can walk away and not have pay on your mortgage, you can just see the anxiety just literally shedding off of him.”

If banks know homeowners are ready to surrender their home, Becker said, they have become more willing to work out a loan modification.

Both Becker and Baker said working with banks to modify mortgages is taking longer and has become more complicated. Instead of automatically sending homes into foreclosure, banks are more willing to hire attorneys to litigate the cases, something Becker said actually can be beneficial for his clients.

At HCCI, counselors can spend up to 40 hours on a single case.

“And I know there are exceptional cases that took a lot longer than 40 hours,” Baker said.

A messy paper trail

There’s no question in Becker’s mind that local residents are among those holding mortgages that are being called into question by Congress.

At the root of the problem was the continuous buying and selling of mortgages once the homeowner signed the dotted line. To help process those transactions, the banking industry in 1997 created the Mortgage Electronic Registration Systems (MERS) to help track those loans. According to the Associated Press, three out of every five mortgages on the market are registered through MERS. MERS doesn’t actually hold the promissory note to the home, just the mortgage records.

“We are seeing this over and over again,” Becker said. “Either the promissory note and mortgage get separated at birth or they get separated somewhere down the line so you end up with someone holding a promissory note that is no better than a signature note that you get at your local bank. And a mortgage that they can’t foreclose on because they don’t have the promissory note.”

The court then has to make a determination on who owns the property.

For those going into foreclosure, the lost trail of paperwork can buy homeowners more time.

One of Becker’s clients is a couple who have been able to stay in their house for four and half years while the banks straightened out the paperwork.

“If a homeowner stands up and raises the slightest question about the paperwork, it grinds it all to a halt,” Becker said.

Google Map

Foreclosures in Douglas County

View a larger version of this map.

Comments

HopeAndChange 3 years, 4 months ago

Chris Dodd in collusion with the Banking Queen are 80% to blame for this mess. Giving mortgages to people with no down payment, no credit history and no job. Their politically correct social experiment has failed and this is the result. Just like welfare, the Democrats have failed in their attempt to help the stupid, lazy and oversexed. Greedy mortgage brokers trying to make a quick buck are to blame as well. Fannie and Freddie are bankrupt. Now the Republicans will now have to clean up this monumental cluster. Hope and change. Yes we can.

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BigPrune 3 years, 4 months ago

The foreclosed properties I've seen are not priced cheap enough. Some have even been higher than neighboring properrties. I saw a rule of thumb 10% discount but the house needed that 10% to be brought back up to snuff. What I think was done with the bailout money, is it propped up the banks so they wouldn't have to take as large of a loss. It also propped up everyone else's house so the tax man could commeth to keep taxing the property what it is not worth anymore.

I read an article awhile ago regarding Citibank. They had over 100,000 people try to get their loans modified and only approved 1,400. Where else would our tax money go, other than keeping the banks in business?

The bailout was a fraud sold as a rescue for the common folk in the big hurts, when in reality it bailed out the fat cats.

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oneeye_wilbur 3 years, 4 months ago

A good story for the Journal World is to tell how many foreclosures ;had loans held locally? The next go round will be commercial property foreclosures. wilbur foretold this foreclosure stuff sometime ago about Douglas County but the heads of the powers to be and the Chamber folks didn't want to hear about it.

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Paul R Getto 3 years, 4 months ago

"Godot (anonymous) replies… Hopefully some executives will go to jail; at the least, what they have been doing could be called racketeering." ==== Godot: Don't hold your breath. Executives steal with briefcases in the millions/billions of dollars. Street criminals use a gun, get a few hundred bucks and go to jail. As the Sainted Leona once said about taxes. "WE don't pay taxes; little people pay taxes." Little crooks also go to jail; generally, not the big ones.

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tbaker 3 years, 4 months ago

Equity is a thing of the past. Yikes! So Monkey: What do you think about someone buying investment property in Lawrence and owning a few rentals? Conventional wisdom says now is the time to do that? What say you?

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gphawk89 3 years, 4 months ago

Still? Not tapering off, not flat, but still rising? After almost two hopey-changey years??

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Steve Jacob 3 years, 4 months ago

Everyone seems to be off point. I think we have about cleared out the "balloon" payment foreclosures. I think the 2010 and 2011 foreclosures are more due to losing jobs. Hard to make a house payment on with no job. What hurting this town is those houses are going for cheap, and the people wanting to move can't get what they want.

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beaujackson 3 years, 4 months ago

All that "Hopy - Change" is finally coming true...

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George Lippencott 3 years, 4 months ago

Alceste (anonymous) replies… Moderate:

I think your post is demonstrative of an individual who is envious of those who understand how to manipulate the tax code better than you could even imagine.....particularly when it comes to the depreciation of rental properties.....

You support what is going on?? I find this subject more complex than what seems to be addressed here. AS for those taking advantage of the tax code. well it is legal - why be envious??

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macon47 3 years, 4 months ago

so i guess the folks that signed the mortage are just dupes alot of them knew they couldnt afford it, but wanted to keep up with the jones, then you have the sad sacks that got a second or refinanced bought two new cars, and found out they were in the dumper i guess we can blame the greedly lenders on that one too does anyone accept responsibility for thier actions or is it always someone elses fault??

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bobberboy 3 years, 4 months ago

again - people buying property they could'nt afford in the first place - really dumb.

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kernal 3 years, 4 months ago

Thank you Countrywide and the rest of the irresponsible lenders who made fraudulent real estate loans and gave money to unqualified buyers. Twenty per cent of you should be in jail, sixty percent of you were greedy and the other twenty percent were probably just stupid, or ignorant, of traditionally responsible lending practices. I don't think we saw enough accountibility for that.

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Godot 3 years, 4 months ago

"The industry is seeking legislation that would effectively affirm MERS's legality and block any bill that would call into question what MERS does. MERS has spent more than $1 million in lobbying since fall 2008, when lower courts around the country began to rule against it......... If successful on Capitol Hill, the industry could in one quick swoop make all lawsuits related to MERS across the country moot and remove one of the key uncertainties dangling over the mortgage industry................Consumer advocates say such legislation would retroactively bless all mortgage transfers made through MERS - and eliminate one of the strongest legal arguments that homeowners in foreclosure are using to challenge their cases. .......... Some of the advocates are referring to the idea as the "great MERS whitewash bill."

http://www.washingtonpost.com/wp-dyn/content/article/2010/11/18/AR2010111806137.html

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Clevercowgirl 3 years, 4 months ago

Use your phone book, George. It's the homeowners that are mostly in default. Landlords are not having trouble renting, due to the large number of foreclosures.

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George Lippencott 3 years, 4 months ago

Author

Any idea how many of these are rentals being dumped and how many are owner occupied reflecting true hurt.

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Jimo 3 years, 4 months ago

So, we're to assume that the new AG - funded by the financial industry - will throw the book at these companies for perpetrating a fraud on the courts? My guess is that, if it's not just all swept under the rug, that they'll just be allowed to refile. Ooopsies! Sorry that our sworn statements were revealed to be false representations. Happens to everybody.

A fair result would be (at minimum) the refusal of the courts to recognize a legal mortgage, transmitting these into equitable claims, subject to adjustment or discharge in bankruptcy (rather than undischargeable debts).

But like much else in this massive eruption of fraud expect criminal prosecution to be rare if at all.

Why is it that the Republican's buddies on Wall Street never have to live with the consequences of their actions but the average Joe has to live with consequences he never caused at all? Could it be: Bribery in the form of secret corporate campaign contributions?

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Godot 3 years, 4 months ago

MERS was created by the investment banks in order to make it easier for them to securitize mortgages, bypassing the states' property registration processes and procedures, those that protect property owners and the chain of title. It also saved the mega banks millions upon millions of dollars in mortgage registration fees.

Ms. Metz, please ask the Douglas County Registrar of Deeds how many properties in Douglas County have MERS listed as mortgagee or mortgage servicer. Then multiply that number by the mortgage registration fee (j$70 or so?) That will tell you how much the Douglas County taxpayers have been gouged by the big banks just for unpaid mortgage registration fees.

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Alceste 3 years, 4 months ago

sunny (anonymous) says… What has happened to all of the billions of dollars Obomba took from our grandchildren to create jobs? +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ I think you meant to put in RaYGunBushBush didn't you? Let's not leave out LewPerkins, either....

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CorkyHundley 3 years, 4 months ago

The Dude needs to spread more wealth. Silly me... This is part of the "Transformation" he has been telling the nation about. The Dude is so transparent. I think the homes should be confiscated and given to the homeless. To heck with neighborhood covenents. merrill can mow the grass.

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Sigmund 3 years, 4 months ago

But we raised sales taxes to pay for buses, increased property taxes to pay for a new library, paid end of the year bonuses to City employees, and even raised parking fees downtown. This simply can not be true!

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Tom Shewmon 3 years, 4 months ago

Think it's bad now (foreclosures), wait until next year.

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toe 3 years, 4 months ago

Lower housing prices ahead. Farm land prices are going to pop soon, too.

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sunny 3 years, 4 months ago

What has happened to all of the billions of dollars Obomba took from our grandchildren to create jobs?

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Clevercowgirl 3 years, 4 months ago

Douglas6280: This is sadly true. You simply have to follow the foreclosures (legal notices) in the paper every day to see what is happening in Douglas County. The prices of real estate are still spiraling downward. Until the mortgage mess is straightened out, the construction and real estate industry will be at a standstill. As a backlash to the mortgage fiasco described above, it has almost impossible for an average borrower to get a loan. Not to mention the fact that even the responsible real estate investors/contractors, who have never defaulted on any loan, can't get a loan now. Until the feds lighten up on the "credit freeze" the prices on real estate will continue to tank because basically, only cash buyers can come to the table. How pathetic that the mortgage industry was able to operate in such a fast and loose manner, and the backlash is so severe, that we can't seem to work our way out.

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Alceste 3 years, 4 months ago

Does it make people "feel" important to use non-sensical terms like "downturn"? "Shortfall"?

Why don't we just call it like it is instead of trying to fluff it all up like it isn't something horribly bad?

It's funny as all get out when I hear words like "budget shortfall". I don't know what that is....I do know what bad management is; what bad accounting is; what bad projections are....funny how government likes that phrase "budget shortfall". The bean counters aren't very good at their jobs and are "optimistic" instead of being pragmatic. I've found pragmatic to be most effective in my personal finances.....; simpletons who actually bought into the stupidity "I'll be making more money every year because I am so good....". HAHAHAHAHAHHA!

Same with "downturn". Funny, funny, funny......

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douglas6280 3 years, 4 months ago

This cannot be true especially after the "recovery summer"...

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douglas6280 3 years, 4 months ago

This cannot be true especially after the 'recovery summer"...

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christopherhess 3 years, 4 months ago

Based on the title of the article, it seems like the second section "Foreclosures are rising" should be the lead content since it contains statistics and trends supporting the title. In fact, the other two sections might best be suited in another article on improper foreclosure processes. Whether some (or even many) foreclosures are associated with the robo-signing phenomena, local economic distress such as job losses leading to unaffordable mortgages is the point to explore.

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