A Day of Defaults

22 NODs were recorded in Washoe County today, sort of a “normal” day sadly. One was for a time share, the rest were all homes or condos. What I find interesting and disturbing is how long it has taken the banks to issue NODs on many of these properties.

APN Loan Date Loan Amount Default Date

504-591-02 8/10/2005 224,000 5/1/2008
87-503-09 8/24/2005 253,800 9/1/2008
36-442-06 7/25/2005 197,200 11/1/2008
222-142-04 3/16/2007 650,000 12/1/2008
31-381-28 5/8/2006 215,100 2/1/2009
402-301-21 3/5/2004 333,700 5/1/2009
13-182-26 8/17/2006 304,000 9/1/2009
530-372-11 9/18/2006 332,000 10/1/2009
208-682-48 2/22/2006 497,900 1/1/2010
140-393-14 2/10/2005 235,200 3/1/2010
21-217-13 9/7/2004 192,000 12/1/2010
142-241-11 6/15/2007 624,000 12/1/2010
77-110-22 3/18/2003 169,996 1/1/2011
10-181-49 9/12/2005 272,000 3/1/2011
23-612-23 12/2/2004 230,000 5/1/2011
538-067-06 1/1/2006 607,200 5/1/2011
27-402-11 10/17/2005 180,000 5/1/2011
524-131-29 5/31/2007 233,000 5/1/2011
524-082-12 6/10/2005 388,000 5/1/2011
550-113-04 7/30/2003 155,800 5/5/2011

If things are working correctly, the NOD can be filed 3 months after a missed payment. What’s with the 2008 and 2009 missed payments just now getting a NOD? This post is also up at REreno where the chart reads more clearly.

66 comments

  1. Michael Helton

    Mike, I was actually thinking about it from an IRS perspective.

    When someone completes a shortsale or a foreclosure, then initiate an audit. If it was a legitimate action and the people are truly in hardship then move on. If they are profiting off of the transaction (which is hurting the rest of us taxpayers) then they should pay for it.

  2. MikeZ

    The practice that is ethically questionable to me is to stop payment on a property and then to essentially make a profit by staying in the home rent-free or even worse; renting it out to others. I think of this as stealing and in my opinion the people doing it should be prosecuted.

    Prosecuted … for what crime? You may call it stealing, but the law doesn’t.

  3. MikeZ

    When someone completes a short sale or a foreclosure, then initiate an audit. If it was a legitimate action and the people are truly in hardship then move on.

    Strategic default is a legitimate action!

    You know, lenders had many options to protect themselves, but they let greed set their rules: stated income loans, option ARMs, 125% LTVs … insane! And they all knew the risk. Well, they’re paying the price now.

    Just as many of you have no sympathy for those who are choosing to protect their financial future with strategic defaults, I have no sympathy for the banks who wrote these loans or their investors too greedy to see the danger.

  4. Sully

    Ah! so main street is giving Wall Street a dose of their own medicine. You guys should save these comments. Twenty years from now, during the next meltdown, you can just copy/paste these comments on the current blog. The banks will not have learned a damn thing from this crisis. 🙂

  5. Hudson

    Whats kinda shitty is that years from now…when you are hanging out on the back porch having a hot dog with the neighbors and you start having small talk about finances, retirement, putting the kids through college, etc, …there’s gonna be a bunch of people out there going ‘Ya we built our fortune squatting for 3.5 years after the housing collapse of 2007’.

    American dream….there it is…

  6. Anonymous Coward

    Re: MikeZ’s “I have no sympathy for the banks”.

    Does anyone have sympathy for the banks? The banks (and their CEO’s, and the folks on Wall St. who packaged the junk mortgages, etc. etc. etc.) are doing just fine, thank you very much. Which is why regulation is so vital, because none of the parties involved (both mortgage grantor and grantee) who were benefitting from the bogus arrangements paid enough of a price when it went sour (with the exception of Fanny and Freddie). Without the reinstatement of regulation, Sully’s prediction for the future will be right on the money.

  7. Michael Helton

    MikeZ, please reread my comments, as I am not talking about “strategic default”.

  8. MikeZ

    Which is why regulation is so vital, because none of the parties involved (both mortgage grantor and grantee) who were benefitting from the bogus arrangements paid enough of a price when it went sour (with the exception of Fanny and Freddie). Without the reinstatement of regulation, Sully’s prediction for the future will be right on the money.

    An alternative or adjunct to more regulation (which government often gets wrong) is to just let stupid, reckless lenders fail … and let their wiser, more careful and more prudent competitors pick up their business and clients when they fail.

  9. Sully

    MikeZ, to which government regulations are you referring? The rules posted by the Federal Reserve or the regulations repealed by the GLBA?

  10. MikeZ

    Sully, I was speaking generally, but in the back of mind was Sarbanes-Oxley, which I consider a poster child for reactive and excessive business regulation.

  11. Sully

    MikeZ, in that regard Sarbanes and Dodd-Frank are nothing more than pesky rules that will eventually prove to accomplish nothing. At least Glass-Steagall acted to limit exposure to a specific sector. The S&L crisis was contained within that sector and did minimal damage to the financial sector as a whole. There is no way to keep banks from finding new ways to lose money and now with GLBA there is no way to contain their damage! As long as Congress is involved – things will get progressively worse.

  12. inclinejj

    40 NOD’s filed

  13. Zen

    Without the reinstatement of regulation, Sully’s prediction for the future will be right on the money.

    Sully’s prediction for the future will happen regardless of whether or not regulations are reinstated. The regulations that we had were put in place by well meaning people who had learned their lessons and didn’t want too see history repeat itself, but history repeated itself anyway. Go ahead and put in all the new regulations you want, it may delay the inevitable, but ultimately a new generation of bankers, lobbyists, and politicians will repeal the regulations and steer the ship back off course. In a free market, booms and busts are going to happen. They are a side affect of the system. Regulations might be able to reduce the frequency of them, but ultimately generations go by and they forget the lessons of the past and repeat the same mistakes. I guess the real lesson that needs to be learned is that this will happen again, just like we’ll see a lot of people loose their shirts in gold when it finally bursts its bubble, just as it did before, but if you can learn to recognize it when it’s happening you should be able to stay away. As much as the boom and bust can hurt, for the most part I’d still take a free market over some overly governed system where you don’t get to live with your mistakes, or successes.

  14. Anonymous Coward

    Zen: I don’t quite follow your argument.

    In your 3rd sentence, you seem to be arguing that regulations don’t work because they will get repealed. Which is probably true, but not really an argument against regulations.

    In your last sentence, I don’t quite understand what you mean by “take a free market over some overly governed system”. I don’t think there’s ever been a viable “totally free” free market. It’s just a question of what degree of regulation you want. The claim I was trying to make was that we’d have been better off if a lot of the mortgage deregulation that happened through the 80’s and 90’s didn’t happen, and going into the future, we’d be better off if went back to the prior levels of regulation.

    The reason I feel this way is that I don’t buy into your premise that we can practically implement a system where you “live with your mistakes, or successes.” It’s beautiful in theory, but to my eye history has consistently shown that the folks who engineer these things (Goldman Sachs, etc etc) engineer it so that they profit from the success, but don’t eat it when it goes south.

  15. Zen

    Anonymous,

    My point in saying that I’d “take a free market over some overly governed system”, is kind of like the old saying, “Democracy is the worst possible form of government, except for all the rest.” I’d rather live in a free market system regardless of all of its faults than live in a communist/totalitarian state where every bit of the market is governed to the degree where individuals have no financial freedom. Still, I completely agree with your point that it would be good to return to the banking environment prior to all the deregulation that caused all of this. Regulations definitely have their place in a free market system. Remember though, much of the reason the deregulation took place, was because low income households were “unfairly” being kept from owning homes, due to the fact that they did not have access to loans. They could not possibly qualify, so in Washington’s infinite wisdom they made it a whole lot easier to borrow money. Which in turn helped the price of housing go through the roof, due to the new found demand, which in turn made it so that low income households either got priced out of the market, or had to mortgage their financial future away to get their piece of the American dream, or should I say nightmare. No good deed goes unpunished.

    Now I know their is more to the story than that, but all the players in this game did their part for one reason or another to turn what had been a fairly stable banking environment, minus the savings and loan debacle in the 80’s, and turn it on its head. My point is this, history will repeat itself. All of this has happened before and will happen again. Maybe not in the exact same way, but it will find a way to happen again somehow. It’s not just in the financial market, it’s in all kinds of investments. Market bubbles have happened, are happening and will happen again and again. I’ve come to accept it. I hope I will have the sense to recognize it and avoid it, and live with my successes, but if not, then I will have to live with my mistakes.

    As for the Goldman Sachs of this world, well stopping their kind is like fighting the war on drugs, crime, poverty, totalitarianism, etc… The war never ends. They are not going away. Even if we put all of the people who helped engineer this thing in jail, and I hope we do, more scumbags just like them will step in and take their place. Does that mean we give in? No! You fight it where you can, but just keep in mind that ultimately, that old pendulum will continue to swing back and forth and back and forth. I hope that makes my point a little clearer.

  16. Anonymous Coward

    @Zen: Thanks for the clarification; I think we mostly agree.

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