{"id":361,"date":"2010-10-03T15:40:24","date_gmt":"2010-10-03T22:40:24","guid":{"rendered":"http:\/\/privatemoneysource.com\/blog\/?p=361"},"modified":"2010-10-03T15:40:24","modified_gmt":"2010-10-03T22:40:24","slug":"what-does-this-mean-to-us","status":"publish","type":"post","link":"https:\/\/privatemoneysource.com\/blog\/?p=361","title":{"rendered":"What does this mean to us?"},"content":{"rendered":"

Clay Sparkman<\/em><\/p>\n

Okay, I don\u2019t know about you, but whenever I read news about some new development in the real estate market, my first instinct is to say, \u201cWhat does this mean to me?\u201d\u00a0 Hey I\u2019m not proud of it, but that\u2019s just how I\u2019m wired.<\/p>\n

This past two weeks we read that:<\/p>\n

(1) \u00a0GMAC and JPMorgan Chase are being challenged with regard to the legitimacy of their batch judicial foreclosures, and are in the process of reevaluating their foreclosures for possible irregularities.<\/p>\n

(2) \u00a0Old Republic National Title said this week that it would not issue policies on GMAC foreclosures until further notice.<\/p>\n

(3) \u00a0Bank of America, the country\u2019s largest mortgage lender (by assets), went a step further, saying on Friday that they would freeze all their judicial foreclosure actions pending a review for irregularities.<\/p>\n

(4) \u00a0Richard Blumenthal, the Connecticut attorney general, asked judges in his state to put a halt to all foreclosures for 60 days so the \u201csituation\u201d can be further evaluated.<\/p>\n

(5) \u00a0California\u2019s attorney general, Jerry Brown, said that Chase should stop any foreclosures in the state until it proved that it was following proper legal practice.<\/p>\n

(6) Chase said that they have now frozen 56,000 foreclosure cases.<\/p>\n

So as I scratch my head and try to make sense of all this, the question is floating in the ether: What does this mean to us?\u00a0 And by us, I mean those of us who are involved, directly or indirectly, in investing in private money loans.<\/p>\n

Here is what I have come up with thus far.<\/p>\n

(1) We are very happy that we are not title companies.\u00a0 They are in a tough spot.\u00a0 If they insure polices for these properties, they may end up paying enormous amounts in claims at some point, and if they don\u2019t insure these properties, they will be turning away a great deal of business, and revenues will take a serious hit.\u00a0 (Fidelity National Financial shares fell more than 4% and FATCO shares fell on the order of 3%.)<\/p>\n

(2) \u00a0I think this is primarily impacting judicial foreclosures, so those of us who lend more on the west coast and generally in non-judicial foreclosure states, may not have too much to worry about, as far as any direct impact may go.\u00a0 (Though it is not clear to me what is up with Chase in California, California being a non-judicial foreclosure state.)<\/p>\n

(3) \u00a0If you are a private money lender, you probably aren\u2019t doing large batch foreclosures and so again the problem may have very little direct impact on you.\u00a0 The issue with regard to the judicial foreclosures is primarily related to large batch foreclosure processes involving thousands of loans at a time.\u00a0 Apparently the issue involved inappropriately filing for summary judgments across the board and \u201crobo-signers\u201d in which mid-level executives would sign thousands of affidavits per month attesting that they had personal knowledge of the facts of the case.<\/p>\n

(4) \u00a0With regard to the economy, this may actually be a good thing.\u00a0 I was talking to my dear friend and wise attorney Jeff Hill on Friday and he said that he felt that this may be a sign that, though it is going to be messy, things are beginning to come to a head.\u00a0 I\u2019ll take that idea one step further and suggest that this might actually serve as a sort of damper or shock absorber, slowing down the resolution process just enough to allow a more gentle transition to occur.\u00a0 (Of course, you could see this either way.\u00a0 Maybe it would be best to have it all come undone and be done with it\u2014the sooner the better.\u00a0 The corrections must eventually take place.)<\/p>\n

(5) \u00a0I think this may open some real opportunities for those looking to buy short sale properties.\u00a0 Banks are going to be screaming to get these properties off their books.\u00a0 And of course that opens up opportunities for private money lenders looking for quality loans.<\/p>\n

(6) \u00a0Certainly this is good for home owners who are in foreclosure or on the brink of foreclosure.\u00a0 They may have gained 1-2 years in their homes.<\/p>\n

(7) \u00a0And of course, as always, this will be good for the lawyers.\u00a0 Any distressed homeowner who doesn\u2019t go out and retain a defense lawyer immediately is probably missing the boat.<\/p>\n

I guess I am being fairly optimistic here.\u00a0 It is certainly going to be a messy situation and it is difficult to know how it is going to all play out.\u00a0 It certainly won\u2019t be good for the banks.\u00a0 And yet do we really care anymore what is good for the banks?<\/p>\n

I\u2019d love to hear from some readers out there.\u00a0 What unforeseen impacts do you anticipate or see coming about as a result of this fiasco?<\/p>\n

— Clay (clay@privatemoneysource.com, 503-476-2909 or 800-971-1858)<\/p>\n

Clay is Vice President of Fairfield Financial, a primary source for private money loans since 1964.\u00a0 Fairfield works with a broad range of private money investors, in a broker capacity, finding, underwriting, presenting, closing, servicing, and when necessary, assisting in the workout of difficult loans.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Clay Sparkman Okay, I don\u2019t know about you, but whenever I read news about some new development in the real estate market, my first instinct is to say, \u201cWhat does this mean to me?\u201d\u00a0 Hey I\u2019m not proud of it, but that\u2019s just how I\u2019m wired. This past two weeks we read that: (1) \u00a0GMAC […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_s2mail":""},"categories":[2,19,21,22,23,31],"tags":[33,35,37,39,40,41,42,43,49,50,51,53,54,56,57,58,59,60],"_links":{"self":[{"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/361"}],"collection":[{"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=361"}],"version-history":[{"count":0,"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/361\/revisions"}],"wp:attachment":[{"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=361"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=361"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=361"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}