“REO (Real Estate Owned) is property that institutions are forced to hold when a loan that they either issued, purchased, or became legally responsible for was foreclosed on. Generally speaking, an increasing REO inventory indicates increasing foreclosure activity. The list of institutions here is far from complete and is meant to represent only the REO and foreclosure inventory trend for a metropolitan area, not the absolute REO or foreclosure inventory in a market. To accomodate additions and deletions of institutions, an inventory index is computed (the index was set to 100 on 4/6/2007). This inventory index — not the total inventory — should be used when inferring trends. More detail can be found by clicking on a city below.”
Currently, the areas that have shown the most increase in REOs since their April 2007 starting point are:
While Honolulu is technically number one on this trend, their statistical sample started with one REOs in April 2007 and has increase by 9 properties since then. On the other hand, the Fort Lauderdale area started their index with 38 units and has added 167 since then.
It will be interesting to how the Miami market changes over the coming months. I suspect they will eventually end up with the most significant increase.
Stumble It!
9 comments:
Miami Condo At Ground Zero In Mortgage Fraud
By REUTERS
Filed at 8:34 a.m. ET
MIAMI (Reuters) - At first glance, the 43-story building in Miami's international banking district seems little different from other high-rise condominiums overlooking the turquoise waters of Biscayne Bay.
But the 643-unit condo known as the Club at Brickell is a leader in mortgage foreclosures and it appears also to stand at ground zero in a blizzard of fraud that may lie behind many of the failed loans threatening to bury the U.S. property market.
America's subprime mortgage crisis is partly due to predatory, or aggressive, lenders, hard-sell tactics by mortgage brokers and an easing of underwriting standards in the $10 trillion home-loan industry.
But fraud accounts for a sizable share of the bad bets on mortgages, according to many industry experts, and lenders may have been victimized as much as anyone else.
"The lenders are holding the bag now, that's what we're finding out," said Glenn Theobald, head of a mortgage fraud task force formed in south Florida's Miami-Dade County in September.
Mortgage scams involve a cartel of inside players -- colluding property appraisers, real-estate brokers and accountants willing to draw up fake income statements and tax returns -- who recruit people with good credit histories to serve as a decoy or "straw buyer" in a real-estate deal.
The conspirators inflate the price of the property, to get the biggest loan possible, pay the sellers the original price and then pocket the excess loan money as "cash back" at the closing of the deal.
The decoy buyer is paid off -- often with just $5,000 -- and the property is quickly abandoned to foreclosure, said Theobald, a senior official with the Miami-Dade Police Department.
'EPIDEMIC'
"It's an epidemic," said Nancy Hogan, a veteran realtor and former head of the Florida Real Estate Commission.
"The cash back, the fraud for profit, is what has been so rampant," she said.
The Club at Brickell has the highest current number of foreclosure proceedings involving any single south Florida property.
There may be other properties in the United States that hold the distinction of being riddled with more cases of apparent mortgage fraud than the Club.
But Doug Dewitt, a real estate broker contracted to work with several lenders on the valuation and disposal of foreclosed properties, said nearly 70 percent of the sales or closings at the Club over the last 18 months were questionable.
That works out to more than 200 possibly shady deals in a single building, he said.
The dubious transactions all fit a pattern that Theobald said should trigger "bells and whistles" for law enforcement anywhere -- time and time again properties that failed to sell for months when listed at around $450,000 were pulled from the market and then suddenly sold for more than $800,000.
Florida leads the nation when it comes to mortgage fraud, according to the Virginia-based Mortgage Asset Research Institute, a group that works closely with the U.S. Mortgage Bankers Association.
Many apartments could wind up being sold at auctions like one held last month for bank-owned properties in Fort Lauderdale, further depressing prices in a market suffering its biggest condo glut in decades.
"You've seen some of it already. They are actually having auctions to try and sell units," said Theobald, when asked about discount sales involving recently foreclosed properties.
"I don't know where it's going to end up," Theobald said. "I don't know when the bottom is going to be."
Ken Thomas, a Miami-based banking expert and lecturer at the Wharton School at the University of Pennsylvania in Philadelphia, said there was little surprise Florida led the country in mortgage fraud.
It stems, at least in part, in the way lenders plowed "easy money" into the local condo market before Florida's recent housing boom turned to bust, Thomas told Reuters.
"We're going to see a lot more of this fraud being exposed, especially as these units go into foreclosure," Thomas said.
"We were the poster child of the housing bubble ... maybe we should have expected more of this."
(Editing by Michael Christie and Eddie Evans)
It is obvious that the Miami market has been propped by fraud. Look out below!
Check this link out. We could be in for a hard landing.
http://www.rgemonitor.com/blog/roubini/
I'm so proud of us :sniffles:
Without the fraud, the loonies, the "you know they're not making any more land" & the "buy now or be priced forever" - none of this could be possible.
Here's something else I've been wondering about. Perhaps someone can weigh in on this. Of the ~1264 foreclosures in PB county year-to-date, 59 were by HOAs. I did the research and it seems that the HOAs take the properties only to have them foreclosed later by Mortgage holders.
This doesn't seem to me like a rational thing to do. I am certain that the HOAs incur expenses in the process. Are they not smart enough to check to see if outstanding debt on a property exceeds it's current value. If so then no one will bid at auction.
Am I missing something?
Good one Duck,
Makes you wonder how much of this cash out at closing fraud drove the market in the last 2 years when sales were lagging, but there were still unbelievably high sale prices.
I'm thinking of a LHP canal front on NE 24 Ave, now REO at $866k originally sold a year ago for $1.3mil.
Nonetheless, that sale fueled the greed of sellers all around, causing them to believe their waterfront shacks were gold plated as well.
It's going to get real interesting as these investigations become public.
My wife used to work in corporate for a huge Jewelry Corp that owns hundred or possibly thousands of jewelry stores across the US.
She was telling me about a scam called the Asian Bustout where Asians would establish credit with jewelry stores, run up tens of thousands of dollars in debts and disappear from the face of the planet. The losses would often mount into $50-100k, and was all too common.
Sounds very similar to these mortgages. I wonder how many of the "foreign" buyers with pockets full of money driving prices up these past years will turn out to be scams.
Just downloaded the tax roll from Palm Beach County today. Ran a query on the data to see how many bank-owned properties there were. 355 counted as of early Sep 2007 (the data lags a couple of months). So, those numbers posted in the article are old by now.
Figure at least another hundred or so added just in the last couple months, plus hundreds more in some stage of foreclosure.
Here is a breakdown of the banks with REOS (with Parcel IDs), if anyone is interested. Looks like Deutsch Bank is the winner, so far:
ACCREDITED HOME LENDERS INC
00-43-42-06-01-000-0240
04-37-44-06-01-000-0660
36-43-42-20-01-040-0021
72-41-44-01-03-001-1100
73-41-44-09-01-010-0020
73-41-44-09-04-000-0870
74-42-43-12-27-008-1020
74-43-43-16-02-033-0010
ACCU FUNDING CORPORATION
00-42-45-09-09-000-0190
ACE SECURITIES CORP HOME EQUITY
00-42-47-30-04-014-0140
74-43-43-17-31-024-0038
AMERICAN HOME MORTGAGE SERVICING INC
00-41-41-10-00-000-1520
00-41-44-36-04-000-0900
08-43-45-16-01-033-0110
08-43-45-16-01-042-0020
18-42-44-27-28-007-0020
24-43-46-28-47-001-1060
72-41-44-01-12-035-3190
73-41-44-03-11-001-0190
73-41-44-24-05-000-3210
AMERICAN TRUST LLC
00-42-44-12-16-000-0050
00-42-44-13-20-007-0040
00-42-44-27-18-000-2090
00-42-44-41-03-000-0080
00-42-46-22-13-007-3180
00-42-47-08-13-007-2650
00-43-45-09-10-011-0260
18-42-44-26-14-223-0041
56-43-42-28-26-030-0110
56-43-42-33-09-000-0620
56-43-42-33-09-000-0690
56-43-42-33-11-000-2550
74-43-43-09-07-014-0380
ARGENT MORTGAGE SECURITIES
00-42-44-37-03-002-0970
00-43-45-06-02-036-0160
30-42-40-34-06-000-0690
56-42-42-36-06-000-2120
73-41-44-02-03-012-0032
73-41-44-10-26-000-1390
74-43-43-28-05-000-0340
74-43-44-04-08-003-0380
BANK OF AMERICA
00-42-43-27-28-001-0070
00-42-45-21-09-001-1200
00-42-47-17-01-000-0680
06-43-47-07-09-002-2310
08-43-45-18-22-006-0280
12-43-46-16-20-156-0112
12-43-46-21-08-005-0260
36-43-42-19-21-000-0020
38-43-44-21-15-100-0160
52-42-42-15-03-000-2560
60-43-40-30-52-000-0010
62-43-44-35-27-000-5040
72-41-43-15-11-006-0140
72-41-44-01-10-003-0000
74-42-43-15-09-000-1030
74-43-44-04-04-003-0090
BANK OF NEW YORK
00-40-42-24-00-000-5230
00-42-40-25-11-001-0150
00-42-41-17-00-000-2090
00-42-43-27-15-011-0010
00-42-43-28-07-002-2180
00-42-43-33-06-000-0540
00-42-44-01-25-000-0492
00-42-44-25-02-000-0011
00-42-44-34-36-000-3880
00-42-44-35-03-000-5880
00-42-45-08-01-000-0130
00-42-45-08-09-000-1460
00-42-45-10-16-002-1020
00-42-45-35-14-000-0250
00-42-46-16-19-000-0140
00-43-41-29-12-000-0080
00-43-43-30-13-002-0070
00-43-43-30-15-008-0040
08-43-45-07-15-000-0310
08-43-45-07-21-003-3130
08-43-45-07-21-016-1633
08-43-45-08-09-015-0020
18-42-44-26-10-105-0011
30-42-41-10-11-000-0272
30-42-41-12-06-000-0140
30-42-41-14-05-000-2700
30-43-41-05-20-000-3905
36-43-42-21-03-137-0150
38-43-44-21-15-154-0270
38-43-44-33-09-001-0170
52-43-42-18-03-001-0290
56-43-42-29-01-000-0370
56-43-42-30-29-002-1090
56-43-42-32-16-007-0120
70-43-44-17-04-000-0340
72-41-43-26-27-000-3010
72-41-43-27-16-000-0140
72-41-44-01-01-003-0260
73-41-44-10-07-000-0160
73-41-44-22-01-000-0850
73-41-44-23-07-000-0170
74-42-43-15-10-013-1030
74-43-43-20-07-005-0120
BANKUNITED
40-43-44-34-43-007-0150
74-43-43-21-23-003-3100
DEUTSCH BANK
00-40-42-13-00-000-7690
00-40-43-11-00-000-4140
00-41-41-16-00-000-1090
00-41-42-14-09-000-0670
00-41-42-19-00-000-3230
00-41-42-29-00-000-5690
00-41-43-10-00-000-1300
00-41-43-36-00-000-7101
00-41-44-24-01-000-1300
00-41-46-36-02-000-0450
00-41-47-02-08-000-0280
00-41-47-02-11-000-1940
00-41-47-02-11-000-3180
00-41-47-25-17-000-0480
00-42-41-18-00-000-1390
00-42-43-13-06-947-0041
00-42-43-26-09-000-0110
00-42-43-29-21-014-3050
00-42-43-35-14-007-0100
00-42-44-11-11-006-0030
00-42-44-11-19-007-0320
00-42-44-13-15-002-0080
00-42-44-24-00-000-5760
00-42-44-24-10-000-3840
00-42-44-24-18-000-0230
00-42-44-27-15-050-0502
00-42-44-40-02-002-0220
00-42-45-18-09-000-0540
00-42-46-26-06-000-2230
00-42-47-06-04-001-0110
00-42-47-08-05-015-5950
00-42-47-18-03-001-0080
00-42-47-18-09-008-0020
00-42-47-19-32-000-0320
00-42-47-29-11-000-1202
00-42-47-30-12-007-3160
00-42-47-32-10-000-0750
00-43-45-05-01-017-0120
06-42-47-23-13-001-0490
06-43-47-30-40-001-0190
08-43-45-18-17-000-0980
08-43-45-20-13-000-0230
08-43-45-30-28-003-3070
08-43-45-33-11-000-0021
12-42-46-24-08-001-0080
12-43-46-28-42-000-0020
12-43-46-29-16-003-3211
12-43-46-29-44-020-2009
18-42-44-10-27-000-0050
18-42-44-23-15-002-0060
18-42-44-25-19-005-0120
18-42-44-27-30-000-0960
30-42-40-34-08-000-0550
30-42-41-03-17-006-0070
38-43-44-15-16-037-0130
38-43-44-21-15-338-0030
52-42-42-12-04-054-0040
52-43-41-29-26-000-0700
52-43-42-08-09-000-0210
56-42-42-36-13-000-3090
72-41-43-14-02-007-0150
72-41-43-14-05-000-0044
72-41-43-23-22-000-0140
72-41-43-26-27-000-3040
72-41-43-36-07-000-3680
73-41-44-11-02-002-0300
73-41-44-12-07-000-0040
73-41-44-12-11-000-1630
73-41-44-14-46-005-3050
73-41-44-26-01-000-0320
73-42-44-17-02-001-2050
74-42-43-01-16-000-0462
74-42-43-12-24-000-0430
74-42-43-13-14-000-0324
74-42-43-15-06-000-0690
74-42-43-15-09-000-1590
74-42-43-15-11-000-3190
74-43-43-07-04-000-0322
74-43-43-16-15-006-0190
FEDERAL HOME LOAN MRTG CORP
00-41-43-03-00-000-1030
00-41-47-36-05-001-2060
00-41-47-36-09-000-2050
00-42-43-13-12-117-0062
00-42-43-27-09-000-0180
00-42-44-12-14-000-0030
00-42-45-10-11-000-1080
00-42-45-10-16-010-2020
06-42-47-24-02-007-0010
08-43-45-32-03-010-0070
12-43-46-07-04-020-0010
30-42-41-15-01-037-0150
56-42-42-36-35-020-1400
56-43-42-30-29-002-0390
60-42-40-25-25-000-1620
72-41-44-01-01-004-0600
73-42-44-07-03-000-4870
74-42-43-15-05-000-0380
FEDERAL NATIONAL MORTGAGE ASSN
00-41-43-11-00-000-3240
00-41-47-22-04-000-0310
00-42-43-26-03-000-0282
00-42-44-21-20-000-4120
00-42-46-15-10-001-0010
00-42-46-22-09-013-5850
00-43-43-30-15-011-0260
00-43-45-19-03-016-0110
08-43-45-18-01-106-0020
12-42-46-13-24-017-0040
12-43-46-07-05-006-0010
30-43-40-31-17-009-0010
40-43-44-33-27-000-0120
40-43-45-03-09-000-0620
52-42-41-36-05-012-0010
72-41-43-26-07-002-0640
72-41-43-26-09-002-0290
73-41-44-10-05-004-0053
73-41-44-10-29-000-0760
74-42-43-12-27-013-1050
HSBC
00-41-42-17-00-000-7190
00-41-47-27-07-000-0760
00-42-43-13-06-954-0031
00-42-43-23-06-002-0270
00-42-44-01-25-000-0622
00-42-44-07-01-000-0370
00-42-44-14-58-000-0970
00-42-44-25-14-003-0260
00-42-44-35-02-000-7820
00-42-45-02-10-000-1920
00-42-45-24-18-013-2090
00-42-47-29-11-000-0273
00-43-42-05-06-000-0531
00-43-45-05-06-001-0130
00-43-45-18-09-000-0164
06-43-47-30-05-002-0120
12-42-46-12-13-001-0050
18-42-44-27-16-425-0011
22-42-43-35-05-025-0020
26-43-45-10-04-000-0570
30-42-41-12-06-000-0560
38-43-44-16-37-000-0240
38-43-44-21-15-192-0170
38-43-44-21-15-295-0070
38-43-44-34-28-000-0020
52-42-41-25-03-001-0470
56-43-42-30-29-002-2250
70-42-44-13-30-000-2570
73-41-43-32-03-019-0020
73-41-44-09-02-037-0090
73-41-44-11-09-000-0320
73-41-44-26-02-000-0710
74-42-43-12-27-008-1080
74-42-43-13-08-001-0071
74-42-43-19-15-009-9205
74-43-43-07-04-000-0403
74-43-43-09-05-007-0190
74-43-43-09-05-030-0080
74-43-43-33-29-002-0100
74-43-44-10-22-000-0940
JPMORGAN CHASE
00-41-43-11-00-000-8100
00-42-41-09-00-000-3670
00-42-46-22-08-003-1390
00-42-47-30-02-013-0040
00-42-47-31-13-045-0452
24-43-46-28-47-001-1020
30-42-41-14-05-000-2320
30-42-41-23-07-000-0132
30-42-41-23-07-000-0373
U S BANK
00-40-42-23-00-000-5990
00-40-43-14-00-000-7450
00-41-41-16-00-000-8170
00-41-42-19-00-000-4050
00-41-42-28-00-000-4120
00-41-43-04-00-000-7220
00-41-47-01-22-000-0240
00-41-47-22-17-000-0460
00-42-41-17-00-000-1400
00-42-44-10-03-005-2100
00-42-44-11-22-013-0040
00-42-44-12-27-000-0472
00-42-45-01-16-008-1390
00-42-45-04-11-000-1510
00-42-45-09-21-000-1650
00-42-45-22-02-032-0010
00-42-46-15-06-023-2050
00-42-47-32-05-000-1860
00-43-42-18-07-000-0201
00-43-42-19-04-000-0362
06-43-47-07-11-000-0160
06-43-47-17-06-009-0340
08-43-45-18-17-000-0970
08-43-45-21-14-000-2460
12-42-46-24-16-003-1100
12-43-46-09-78-000-0970
12-43-46-30-19-000-4060
18-42-44-15-48-000-0060
18-42-44-23-01-038-0040
18-42-44-35-18-000-2380
26-43-45-10-24-001-0020
36-43-42-20-01-031-0410
38-43-44-21-15-030-0140
38-43-44-21-15-127-0070
38-43-44-27-01-035-0070
52-42-42-11-10-002-0018
56-43-42-28-53-000-4070
68-43-42-09-13-000-2050
68-43-42-16-04-032-0070
72-41-43-15-02-016-0380
72-41-43-36-03-000-1740
73-41-44-16-10-000-0070
73-41-44-22-01-000-1130
73-42-44-17-05-000-3790
74-42-43-13-17-000-0450
74-43-43-07-02-028-2050
74-43-43-17-28-002-2090
74-43-43-28-07-000-0180
WASHINGTON MUTUAL BANK
00-41-43-09-00-000-7700
00-42-44-21-05-010-6440
00-42-44-34-32-000-2050
00-42-45-15-20-000-0540
00-42-47-31-13-042-0423
08-43-45-18-22-007-0340
38-43-44-15-16-037-0030
38-43-44-21-15-125-0160
WELLS FARGO
00-40-42-24-00-000-3210
00-40-42-25-00-000-3810
00-41-41-03-00-000-5540
00-41-41-09-00-000-1180
00-41-41-09-00-000-1340
00-41-43-03-00-000-1320
00-41-47-27-03-002-0130
00-42-40-27-05-002-0160
00-42-43-22-19-458-2030
00-42-44-37-03-002-0770
00-42-47-09-43-000-5091
00-42-47-30-15-002-1050
02-42-44-36-28-030-0010
06-43-46-32-30-001-0470
06-43-47-04-47-000-0040
08-43-45-18-22-008-0320
12-42-46-12-03-007-0110
12-42-46-24-10-003-0170
12-43-46-04-21-011-0140
18-42-44-15-25-000-0030
18-42-44-23-01-038-0220
30-42-41-10-06-000-0030
36-43-42-20-01-069-0280
36-43-42-20-06-003-0060
38-43-44-21-15-046-0190
38-43-44-21-15-111-0110
38-43-44-33-06-000-0140
52-42-41-36-05-008-0020
56-43-42-29-10-004-0040
68-43-42-17-35-000-0280
73-41-44-22-01-000-0490
Does the fact that the banks are now "writing down" huge losses on foreclosures preclude them going to REO?
In other words, will we likely see a spike in them going from "short sales" to actual bank owned status?
It seems they have been stalling foreclosures by doing short sales, buying time before the inevitable collapse.
Does anyone have any insight to this?
Sometimes the REO comes on the market quickly (within a month), and sometimes it takes 4 months or more.
I don't know what takes these banks so long to get their REOs on the market, but if I were them, I'd want to get rid of these things immediately.
I think it's obvious banks weren't anticipating such a huge wave of foreclosures, so they're probably swamped trying to process all these things.
Plus, how many times has real estate taken such a sudden dive in terms of price? Not very often--I'm sure the reality is now setting in and banks are realizing that they MUST dump these things or lose more money.
For every current REO, there must be another 20+ houses with liens or final judgements on it. These will all show up as REOs eventually.
I think the real wave in foreclosures is just building up right now. With rates resetting over the next year, people finally realizing that stopping their mortgage payments is actually a smart thing to do, and the big lag time between the first lien and courthouse sale, I'm sure those REO lists will grow exponentially.
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