1. To analyze statistics and trends of mortgage company filings of:
   • Foreclosure Notices
   • Foreclosure Judgments
   • Certificates of Transfer from county auctions
2. To make assumptions about the potential ramifications of the housing crisis and open discussions about our future on:
   • the Palm Beach County real estate market
   • mortgage banks and securities
   • third parties affected by mortgage foreclosures
   • our lending industry

1. LP - Lis Pendens (for mortgage foreclosure notices)
2. JUD - Judgments (for mortgage foreclosure judgments)
3. CT - Certificates of Titles (for transfers of title on properties)

It's a long process looking up records for date periods, copying and pasting into Excel spreadsheets, uploading the data into SQL Server database, querying, sorting, manipulating, deleting duplicate data records related to the same property, eliminating records that are not "mortgage" or "mortgage investor" types like condo associations, pool contractors, individuals, small private investors, etc. I also spend a great deal of time looking at many of the foreclosed judgment party's original mortgages, and cross reference their purchase and appraisal records in the County Appraiser's property records.

Finally, I have some meaningful raw mortgage-related data to present!

It's all relatively nasty work. I've looked at a lot of filings in the last couple weeks. It sucks really, and I won't be able to do it forever. If I could somehow get a direct data feed from the county databases including even more data we can't see online, I could do wonders with it.

I have a lot of conclusions to make, and a lot of questions to ask even with just a couple months of data. But before that, let's take a look at the numbers.

Mortgage Party Related Data from Palm Beach County, FL
Summary YTD	Foreclosure Notices, Foreclosure Judgments, and Certificates of Title
Data from 1/01/2007 to 12/31/2007	Month Lis Pendens Judgments Certs of Title 01-2007 477 21 69 02-2007 381 126 33 03-2007 774 139 56 04-2007 644 138 80 05-2007 765 173 93 06-2007 842 167 144 07-2007 903 158 108 08-2007 1004 244 138 09-2007 960 176 116 10-2007 1488 295 164 11-2007 1491 233 158 12-2007 1275 318 178 YTD 11004 2188 1337
Select Month: 01-2007 02-2007 03-2007 04-2007 05-2007 06-2007 07-2007 08-2007 09-2007 10-2007 11-2007 12-2007	Mortgage Party Filings - December 2007 YTD   updating...
Select Period:   YTD Month  [Expand All Data] **DISCLAIMER** Do not rely on the Names listed here as legal representation of the true owner of record! Legal documents are complex, and the filing parties often include multiple legal names. The true owner names are buried within the actual legal court documents. In many cases you are seeing a trustee name for an underlying mortgage security or trust that is the actual legal owner.	# Name Lis Pendens Judgments Cert of Title 1 DEUTSCHE BANK NATIONAL TRUST CO TRUSTEE 595 130 199 2 U S BANK NA TRUSTEE 761 128 141 3 BANK OF NEW YORK TRUST CO TRUSTEE 558 123 89 4 FEDERAL NATIONAL MORTGAGE ASSOCIATION 4 4 72 5 WELLS FARGO BANK NA TRUSTEE 278 55 53 6 HSBC BANK NA TRUSTEE 126 25 46 7 FEDERAL HOME LOAN MORTGAGE CORPORATION 7 3 42 8 LASALLE BANK NA TRUSTEE 169 30 38 9 NOVASTAR MORTGAGE 126 57 36 10 AURORA LOAN SERVICES 316 79 28 11 DEUTSCHE BANK TRUST CO AMERICAS TRUSTEE 205 23 22 12 FREMONT INVESTMENT & LOAN 134 45 22 13 WELLS FARGO BANK NA 382 47 22 14 U S BANK NA 151 28 21 15 HSBC MORTGAGE 128 35 21 16 JP MORGAN CHASE BANK NA TRUSTEE 69 30 19 17 WASHINGTON MUTUAL BANK 371 56 19 18 MARRIOTT OWNERSHIP RESORTS 11 16 18 19 WACHOVIA BANK NA 63 20 16 20 BANK OF AMERICA NA 172 36 16   Total 4626 970 940 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ...
FAQ
Do I have names of people?	YES, but what's the point of exposing them. Any property owner can be looked up - LP, JUD, or CT with time, patience, and proper spelling.
Do I have addresses?	NO, only legal descriptions of properties. They can be looked up though.
How do I look up REOs? (lender owned properties)	Go to the Palm Beach County Property Appraiser's general search page. Click "Owner" to search by owner name and type in any bank short name (use the names from above data). Example to try: DEUTSCHE BANK. They are one of the largest trustee's for MBS mortgage-backed securities. Instead of Deed transfers, you'll see Certificates of Title received from foreclosure.

• The Bank of New York as Successor in Interest to JPMorgan Chase Bank, N.A. as Trustee for CWABS, Inc., Revolving Home Equity Loan Asset Backed Notes Series 2004-T

County records will list this twice as "Bank of New York" and "JP Morgan Chase Bank". The legal owner of the mortgage is "CWABS, Inc., Revolving Home Equity Loan Asset Backed Notes Series 2004-T"  (Note: CWABS is short for Countrywide Asset Backed Securities)

• US Bank, NA Successor-In-Interest to Wachovia Bank, NA as Indenture Trustee for JP Morgan 2005-A3

There's a lot of name changing going on too:

• New Stream Secured Capital, LLC F/K/A Porter Secured Capital Partners, L.P.
• Nationstar Mortgage F/K/A Centex Home Equity Company, LLC

You cannot assume a bank owns the property. Most are part of securities pools. If we only had access to the raw data that contains nothing but legal owners, I could tell you which securities are being affected by the defaults!

• US Bank National Association, as Trustee for Securitized Asset Backed Receivables LLC Trust, 2006-NC1

Flagrant fraud:  One poor gal's foreclosure judgment was on a $496k loan to someone who had stolen her identity and purchased a 4300 sq. ft. PGA National home for $620k with nothing down in April 2005. There are notes of the identity theft in the court document! The imposter took both 1st and 2nd loans totaling the full purchase price of $620k. Could it really be possible someone lived in the home for free for two years without being noticed nor making a payment? The real gal will have legal problems for a long time.

Strange?: In another judgment for $90k, the lender made a first loan of $90k, and also a second loan of $149k both at the same time in April 2006, totaling $239k. The purchase price of the home was $239k - a nothing down transaction. There are no documents filed yet about a default on the larger second loan. This baffles me, especially if the mortages were possibly sold off and securitized into different investment pools.

Speculation: One women bought six new luxury properties with nothing down ($415k, $307k, $699k, $512k, $331k, $460k) between Aug 2004 and Nov 2005 now with a current status of ($415k-refinanced to $593k and LP 12/29/06, $307-SOLD, $699k-FORECLOSED 6/29/07, $512k-LP 1/11/07, $331k-LP 12/30/06, $460k-LP 11/27/06). Out of all six properties, she only sold one and all the rest are in foreclosure status. One woman - $2.7 million in potential defaults. I wonder what her real occupation and income is! By the way, the woman purchased three of the homes all in a one month period, so the lenders probably didn't know the real deal. 

Suspicious: In the above woman's case, there was some unusual pricing activity on the $699k home. It was fishy, because the prior owner Quit Claimed for $329k on a home that was sold brand new $390k only seven months earlier. She buys it 15 months later for $699 (a hefty $370 profit). The market was hot, but not that hot. In 2005 this house was appraised at $358 in county records! Excuse me lenders, you really dropped the ball financing this woman 100% on a severely overpriced home! This purchase reeks of a "cash-back" payment deal. While digging deeper through the records of all the parties involved, it was easy to spot more suspicious buy/sell practices including name misspellings on legal records, investment companies, and buy-sell-buyback type transactions. I eventually just came to the conclusion that some investment groups can cover up money trails by utilizing multiple property transactions. Note to all the system cheaters out there - what goes around comes around, and so will the IRS!

No such thing as equity: Many mortgage companies would often issue both first and second mortgages for the total purchase price on home. Forget the 90% LTV thing. I saw way too many 100% finance deals nicely disguised in a two mortgage "piggy-back" package. I wonder if these deals are to avoid PMI (mortgage insurance) or to "qualify" a borrower where they would not normally qualify? Seems either way is poor lending practice.

Never made a payment: In many cases based on the judgments, it appears the buyers never made a payment. It was hard to believe, case after case, until I came to the conclusion the loans must have been interest-only.

Mortgage brokers: A lot of foreclosure judgments are for less desirable loans made by a lot of mortgage brokers via the Mortgage Electronic Registration Services (MERS) system. I need to research more on MERS system. At website face value, it looks like it's way too easy for mortgage brokers to join. That combined with our state-regulated mortgage broker licencing system could be the problem child our legislators interested in lending reform should look at. According to MortgageNewsDaily.com there are over 67,000 licensed mortage brokers in Florida alone. What for and why so many? Think about it.

Needle in the haystack: A 1997 built 2270 sq. ft Egret Landing home in Jupiter appraised at $405k, with guy defaulting on one mortgage loan with a foreclosure judgment of $82k and some small leins! The foreclosure buyers were probably drooling. No Certificate of Transfer was recorded, so he probably saved his home before the county auction.

• Most defaulted loans are owned by mortgage-backed securities.
• Not all were "sub-prime" like they focus on in the media.
• High percentage were made on (now) overpriced properties bought during the peak period 2004-2006.
• Many defaults occurred even before the first ARM reset.
• Lots of bad loans with bad terms originated by questionable mortgage companies to people who wanted to buy property bad, but didn't know they couldn't afford it.
• The investors (speculators and flippers) with multiple properties purchased during the boom are going down like sinking ships.
• Many people were first time buyers. Such a shame.
• Nothing is selling at auction, because the defaulted loans are more than the property is worth.
• Too many came from purchases that used both 1st and 2nd loans totaling 100% LTV or close.
• A lot came from people who either bought during the gold rush (2004-2006) or refinanced for ridiculously large amounts.
• All price ranges of homes are represented. Many are located in luxurious community developments all across Palm Beach County. This crisis is not isolated to just the low-income bracket. That guy wearing Gucci shoes, driving a Mercedes, and living in the gated community may very well be foreclosing right now. You never know.

Cross-Reference Dream: Imagine if I had the time to cross-reference all foreclosure judgments against the Palm Beach County Property Appraiser records? I did look at enough properties to determine when these people purchased, and what they paid for them. When I thought I may be bringing the County records website down (it's overloaded with too many people researching) I came to the realization that looking up every foreclosure judgment document would be just futile. If I had the comprehensive data records from BOTH the County Clerk and the Property Apprasier in one database, I could pull statistics that tell everything about the state of real estate in Palm Beach County! I could probably put together enough information to forecast who, where, how many, and when the next defaults are coming from in the future. I could tell you about the Buyers, Investors, Lenders, REOs, Brokers, Taxes, Neighborhoods, Builders, Appreciation, Depreciation, and so on. I could even find the unusual transactions - the kind the tax folks would love to know about. Alas, I'm dreaming. Someone needs to hire me for an important project like this.

Resetting ARM Loans: Today's news articles focus on foreclosures due to ARM mortgages resetting at higher rates and payments. While that is probably true, records showed a lot of defaults that never made it to an ARM reset date.  Implication: watch for massive foreclosure increase when the 2005-2006 vintage 2/28 loans do reset! While many people will be able to refinance, many will not anymore.

Waterfall Effect: Judgments on first mortgages do not show the whole picture. What about the defaults on second mortgages, homeowner association fees, property taxes, insurance, costs to the new property owner (the REO lender or investment security), etc. The financial damage is much bigger than one foreclosure summary judgment ladened up with interest, penalities, and legal fees.

REO Properties: Are the mortgage-backed securities turning into hybrid REO (property owned by a lender) real estate equity trusts? All these foreclosed properties reverting back to lenders and investors are going to have tremendous expenses. They may be put on the market for sale, but nothing is selling. Prices are still too high. Are the banks or trusts that now own these properties paying for insurance? That's a hefty sum in South Florida. What if the hurricanes come again? Who will protect these homes and/or cleanup the damage? The cost of owning and holding these properties could strain MBS securities reserves, eventually forcing the investment securities to liquidate. Then what - slaughter auctions, less desirable mortgage securities investment markets, even less mortgage money to lend?

Our legal and administrative systems must be bursting at the seems processing these foreclosures. It takes a lot of legal, administrative, accounting, payment processing, and real estate services if and when these properties ever get liquidated (sold). Say one couple defaults and forecloses. They've now tied up dozens upon dozens of people (lawyers, judges, lenders, servicers, investment underwriters, government admin, etc.) all performing jobs to process the massive paperwork for the legal mortgage status change and property transfer for this one couple's mortgage default. It's a waste of human productivity and financial resources far above the original loan amount. Imagine when there are two mortgage companies forecosing at the same time on the same property? Or how about three parties - 1st mortgage, a HELOC, and a homeowner's assocation? The court judges must need a stiff scotch after a day of foreclosure judgments.

Condo and Homeowner's Associations are not going to meet budgets with so many defaults. Although I am eliminating them from my statistics for this project, the defaults on HOA fees were pretty dreadful. Does this mean more losses for mortgage investors when the dust finally settles and these back fees get paid? What about if the HOA forces the budget shortfall on all the other residents and raises fees? The damage from three hurricanes in Palm Beach eventually caused everyone's HOA fees to increase. Are defaults going to cause them to increase again? Imagine getting a letter from your HOA stating "due to a 20% default on our neighborhood HOA fees with so many homes in foreclosure, we are issuing a special assessment of $,$$$ to cover our budget shortfall on our community utilities, maintenance, and security."

Auction Forecast: Look for large blocks of REO homes going to private auction in Sept-October, before the November real estate taxes are due. Sale prices should drop like a rock due to both paltry demand and (new) increased lending requirements more lenders are finally starting to practice.

Selling Your Home: Good luck! This is not a seller's market. As of 7/28/2007, Realtor.com shows 39,222 properties for sale in the 20 mile area surrounding West Palm Beach. There are another 9,900 properties listed for rent and that doesn't include the rentals on craigslist.org. These real estate statistics must be record-setting!  If you must sell, you will have to drop your price (possibly drastically) or somehow make your house look better than anyone else's in your entire neighborhood.  You might have to resort to other methods like holding open house barbeques with free food and cocktails.

Real Estate Agents: Hang in there. Keep working. Try not to starve. We need you now more than ever. Agents have so many listings it must be maddening. Finding buyers is the key to income in this market.

Investment Securities: Do you own any bond fund investments? How about bond or fixed-income mutual funds in your 401k or other investment portfolios?  You may actually own a piece of this crumbling mortgage market - subprime or not. Check your mutual fund prices now, and scour the investment portfolio in their reports.

Make sure you look at the data report for Mortgage Filings above and choose YTD, then click on "Expand All Data" options for a large sampling of names.