Foreclosure Stuffing

Back in November 2010, the robosigning scandal hit in which it was made clear that when it comes to keeping track of mortgage titles, nobody really knows what belongs to whom, except maybe for Linda Green. The immediate result of this was a complete collapse in the foreclosure process as banks no longer had leverage to evict those who don't pay their monthly mortgage bills, since the banks couldn't confirm they actually had rights to the underlying mortgage, and the total monthly foreclosure total dropped from a ~330,000 average houses/month to roughly 250,000. Then in February, to much administration fanfare, the banks, and the attorneys general, signed what we dubbed the Robo-settlement: an event which was supposed to be the "resolution" to the robosigning scandal, and which should once again unclog the foreclosure pipeline. This did not happen. Instead, as RealtyTrac has been diligently reporting month after month, the monthly foreclosure total has continued to decline, and in August hit a level of 193,508 total foreclosures. The immediately spin is that this was a 1% improvement from July's 191,925. The reality is that it was a drop of 15.1% from a year earlier. As the chart below shows, ever since the advent of fraudclosure, the average monthly foreclosure total has dropped from a 330K/month average to just 219K. And declining.

So why did the robosettlement not undo the robosigning foreclosure crunch? Simple - foreclosure stuffing.
What happened is that since the properties not entering the foreclosure pipeline are effectively kept out of inventory, even shadow inventory, and thus the distressed end market, the monthly drop in foreclosures has acted as a form of subsidy to the housing market, as month after month less inventory than otherwise should, enters the market.
As the chart above shows, there is now a 2.5 million "backlog" of properties that should be foreclosed upon based on historical trendlines, but which are being completely ignored by banks. A stuffed foreclosure channel, if you will.

http://www.zerohedge.com/news/foreclosure-stuffing

Follow up story...

Charting The 'Housing Recovery' Subsidy: Foreclosures Slide To Five Year Lows

A month ago, when RealtyTrac posted their latest US foreclosure numbers for the month of August, we presented what we called was the "Foreclosure Stuffing" thesis, explaining the explicit subsidy by the banks for the housing market, whereby the entire foreclosure process has now ground to a halt, and in doing so removing millions in inventory flow from the distressed end market, forcing limited buyers to chase what supply there is, and in the process boosting prices of existing inventory higher. In other words a traditional inventory removal-based subsidy. It is therefore not surprising that today RealtyTrac reported the latest foreclosure data, and lo and behold, just as we expected, the great foreclosure collapse has taken another leg lower, with the total number of foreclosures for the month of September sliding to 180.4K, a decrease of 7 percent from the previous month and down 16 percent from September 2011, and the lowest in five years!

http://www.zerohedge.com/news/2012-10-11/charting-housing-recovery-subsidy-foreclosures-slide-five-year-lows


Twinsdad comment:  Banks are MF's!

Moody’s expects to cut US rating without deal to lower debt/GDP ratio

• Budget negotiations likely to determine AAA rating and outlook
• If budget talks do not produce downward trend in debt-to-GDP ratio, rating likely to be lowered to AA1
• Assumes “relatively orderly” process for increasing debt limit
• The full Moody’s statement is here

For whoever wins the election, getting the votes from the public will be the easy part. Getting the votes in Congress will be painful.

http://www.forexlive.com/blog/2012/09/11/moodys-expects-to-cut-us-rating-without-deal-to-lower-debtgdp-ratio/

Well, Obama and Dingy Harry sure have made this country strong economically again haven't they?
No Budget passed in the Senate three years running.  A "stimulus" that produced so few jobs it cost "us" $45,450 per job

http://www.recovery.gov/Transparency/RecoveryData/Pages/JobSummary.aspx

$7,000,000,000/154,0159jobs) = 45,450 spent per by we the people per job.

MOST FUNDS PAID OUT BY AGENCY

Rank	State	Amount
1.	Department of Health and Human Services	$123,902,917,427
2.	Department of Education	$91,159,202,618
3.	Department of Labor	$65,999,412,061
4.	Department of Agriculture	$40,234,175,302
5.	Department of Transportation	$36,735,119,637
6.	Department of Energy	$27,323,553,884
7.	Department of the Treasury	$19,931,594,612
8.	Social Security Administration	$13,791,600,471
9.	Department of Housing and Urban Development	$12,851,119,451
10.	Environmental Protection Agency	$6,845,027,188

Total Funds Allocated:

$840 Billion

Estimated American Recovery and Reinvestment Act tax, entitlement, and contract, grant, and loan expenditures have been increased from $787B to $840B to be consistent with the President's 2012 budget and with scoring changes made by the Congressional Budget Office since the enactment of the Recovery Act in February 2009.

Largest Awards in U.S.

Contracts

Grants

Loans

Contracts

Recipient	State	Amount Awarded
1. SAVANNAH RIVER NUCLEAR SOLUTIONS LLC	SC	$720,201,615
2. CH2M HILL PLATEAU REMEDIATION COMPANY	WA	$600,418,168
3. BALFOUR BEATTY/MCCARTHY A JOINT VENTURE	TX	$539,032,415
4. SAVANNAH RIVER NUCLEAR SOLUTIONS LLC	SC	$416,711,472
5. CLARK/MCCARTHY, A JOINT VENTURE	CA	$401,438,378
6. WASHINGTON RIVER PROTECTION SOLUTIONS LLC	WA	$323,855,000
7. CH2M HILL PLATEAU REMEDIATION COMPANY	WA	$315,663,000
8. CH2M HILL PLATEAU REMEDIATION COMPANY	WA	$272,414,000
9. SAVANNAH RIVER NUCLEAR SOLUTIONS LLC	SC	$235,738,870
10. CLARK CONSTRUCTION GROUP, LLC	DC	$206,947,093

So, there have some data and some links relative to the "Stimulus"

Have fun tracking down how many of the "Contracts" went to Democratic financial backers...