Foreclosures Way Down in Manhattan

By HerbertRickman on 08/05/2010 at 6:36pm
NY Banks, particularly Citi and JPMChase have decided not to do anything in response to the foreclosures they have in process and limbo. They are going to do what a lot of owners are doing, try to wait the market. At this point with 23-42% exposure on 90-95 origination ltvs who can blame them as long as the Fed will float them forever apparently.
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to make sure this guy is wrong and the article right what we need to know is the pipeline of defaults. anybody has data on that?

http://calculatedriskimages.blogspot.com/2010/08/fannie-freddie-fha-reo-inventory-q2.html

From now on most of the foreclosures will come from the 3 Fs, so it's the fringe areas the ones that are going to be affected by FC the most (queens, bronxs, parts of brooklyn, harlem and up in manhattan).

Look at the volume of FHA, the crappiest lender of the 3. Their lending volume skyrocketed after the end of 2008. FHA should end up being a key source of FC in fringe areas of NYC by 2011/2012. This is much later than it should have been as many of FHA taxpayer backed crappy loans default right away, within a few months of origination. The delay is thanks to Obama's "extend and pretend" Hope for Homeowers plans: change we can believe in!

http://seekingalpha.com/article/219561-fha-insured-mortgages-a-disaster-in-the-making-part-2?source=dashboard_macro-view

Currently, there are 555,000 FHA-insured homes which are delinquent 90 days or more. This figure has been rising steadily for three years. Loan Performance tracks the cure rate for delinquent mortgages in its massive loan database. The cure rate for seriously delinquent mortgages has plunged to roughly 1%. This means that 99% of these delinquent mortgages are headed for default and then either foreclosure or short sale.
By the beginning of 2011, US taxpayers will be fully at risk for more than $1 trillion in FHA insured mortgages. Sooner or later, the banks will have to foreclose and convey to the FHA the 550,000 homes that are currently seriously delinquent. These houses will be then be added to the 44,000+ homes now in the FHA’s inventory. Within a year, the number of FHA-insured homes in default or in its inventory could exceed 700,000.

One final mind-boggling figure is the high percentage of “cash-out” FHA refinancings. In FY 2009, the FHA provided nearly 469,000 refinancings which converted a conventional loan into an FHA insured one. In 50% of these refinancings, the FHA authorized the borrower to take cash out. Sounds like the good old days of 2004-2006, doesn’t it?

But this is the post-collapse housing market. How many homeowners have enough equity to be able to take cash out of the new mortgage? My hunch is that there are not very many. Does this look like appraisal inflation and potential fraud to you? By the way, in the current fiscal year the FHA was still approving cash-outs in one-third of all these refinancings.

By the beginning of 2011, US taxpayers will be fully at risk for more than $1 trillion in FHA insured mortgages.

Go you! Parse the data. Smithers is a tool.

The foreclosures that never existed in Manhattan are suddenly down? Interesting.