Delinquencies, Foreclosures, Dumbness

The Modesto California Bee is reporting Hundreds delinquent on taxes.

Modesto and Patterson this summer are preparing to speed the foreclosure process on hundreds of homes because an unusually large number of residents in six subdivisions are delinquent on their Mello Roos taxes.

About 145 homes are at risk in parts of the Village I neighborhood in east Modesto and in the Fairview Village development in southwest Modesto. In Patterson, 489 homes are delinquent on their Mello Roos taxes in the Patterson Gardens, Walker Ranch, Miraggio and Sutter Point developments.

Residents in those subdivisions could receive foreclosure notices by September because of the accelerated collections process in the special tax districts, Modesto City Manager George Britton and Patterson City Manager Cleve Morris said this week.

The Mello Roos taxes are different from the property taxes all homeowners pay. Failure to pay general property taxes would not trigger foreclosure for five years.
The Mello Roos taxes are charges the cities established to support public improvements within the subdivisions.

The concentration of delinquent taxes in those subdivisions is so great that a clause was triggered in the bonds that forces the agencies to move to collections after just one missed tax payment.

Foreclosures

Yes that is just a couple of small subdivision in one state, but the same mess is playing out in state after state. I simply do not have time to list them all. But the important point is: as go rising delinquencies, so goes foreclosures. Therefore it should be no surprise that the Nationwide Foreclosure Rate Hits Historic High.

The percentage of U.S. mortgages entering foreclosure in the first three months of the year was the highest in more than 50 years, according to the Mortgage Bankers Association.

As the association released its numbers, the Federal Reserve held a hearing to determine whether regulators could do anything to crack down on abusive lending practices, which have exacerbated the problem.

The problems weren't uniformly spread around the country. Doug Duncan, chief economist for the mortgage bankers group, said the rate of new foreclosures would have dropped had it not been for big jumps in California, Florida, Nevada and Arizona. He said high rates in Ohio, Michigan and Indiana also drove up the overall percentage of loans in foreclosure.

Dumbness

Doug Duncan, chief economist for the mortgage bankers group, said the rate of new foreclosures would have dropped had it not been for big jumps in California, Florida, Nevada and Arizona.

Now there's a silly comment for you. It's like saying "Except for the problems I have, I wouldn't have any problems".

Congress also wants in on the dumbness act as does the Fed: Federal Reserve weighs options as housing market's troubles worsen.

Proof of income from borrowers. No penalties for early mortgage payments. And a guarantee that property taxes and insurance bills are covered.

The Federal Reserve is considering these and other measures as a way to remedy the troubled market for high-risk, or subprime, mortgages. The central bank held an all-day hearing on the matter Thursday.

Lawmakers are pushing the Fed to act as late payments and new foreclosures on adjustable-rate home mortgages made to people with spotty credit climbed to all-time highs in the first three months of the year.

“We have had more than enough talk,” Sen. Sherrod Brown, D-Ohio, said in a statement. His state has been hit particularly hard by a wave of foreclosures. “The Federal Reserve should have acted long ago to stamp out the abuses we have seen in Ohio and across the country.”

“Certainly the headlines haven't been pretty,” President Bush's housing secretary, Alphonso Jackson, said in a speech at a mortgage market conference in Washington. Jackson called the current housing slump “a needed correction” of an overheated market, which still has room to grow, he said.

Foreclosure filings were up 90 percent in May compared with last year according to RealtyTrac. Congress is just acting now. As for Alphonso Jackson's "The headlines haven't been pretty" but it's “a needed correction” I have to ask: was he admitting we needed a correction a year ago? Two years ago? Somehow in the aftermath of massive delinquencies and foreclosures we find out this was "needed".

Well I agree it's needed. But also needed is for Alphonso Jackson and his entire department to be tossed.

Flashback May 18, 2005 near the very peak of the housing bubble: Should the government sell bread, orange juice, or mortgages?

Housing and Urban Development Secretary Alphonso Jackson has a message to sub-prime lenders: "We need to reach out" to African-American, Hispanic and other first-time buyers with better loan concepts, more flexible guidelines and quicker service, said Jackson in an interview. "I am absolutely emphatic about winning back our share of the market" that has slipped away to subprime lenders."

If that is not one of the dumbest things anyone in government ever said, what is? Since when is it the role of government to be "absolutely emphatic about winning back market share from subprime lenders"?


Few things can top Alphonso Jackson's statements in terms of "dumbness" but that does not stop people from trying. With thanks to Patrick.Net for sending me the following link, please check out "If you're dumb enough to buy a home builder (share), you ought to buy us"

"We do think if you're dumb enough to buy a home builder (share), you ought to buy us," Ryland Group Inc. Chairman and Chief Executive Officer R. Chad Dreier, told an investor audience at the JP Morgan Basics and Industrials Conference this week.

This post originally appeared on Minyanville.

Kevin Depew was also talking about housing today in his daily dose of Five Things.
So where are we? Somewhere Between Disaster & Denial.

Check out the chart in point number 5. The NAHB Sentiment Index (not prices) is at its lowest point since February 1991 but the Japan Topix Real Estate Index is now at its highest level since 1991.

Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/