BluegrassForeclosure.com

RealtyTrac is reporting that foreclosure filings dipped in October, from September both nationally and in Kentucky.  From the Courier-Journal.

“In Kentucky, there were 1,164 homes in some stage of foreclosure last month, or one in every 1,638. That was down 9.84 percent from September, but more than double the rate of a year earlier.  Statewide filings have been up and down in recent months, with 1,234 in July and 1,101 in August before rising in September and falling in October.”

As pointed out, there are several factors contributing to the decline.  Mostly, it is a combination between banks evaluating each situation and scrutinizing it to determine if there is something that can be done.  Also, states are taking actions requiring more and more lenders look at mediation before judgment can be entered and the home goes to the auction block.  Finally, more and more work-outs are being performed, as each party is looking to try and save the deal.

As you can see, these are great band-aids to be placed on the problem, but none of them addresses the underlying problem, the fact that unemployment rate continues to rise slightly and seems to be holding steady now at about 10% with more and more people taking longer and longer to find a job.

We are still losing jobs, people are not being hired, and its taking longer to get re-trained for other jobs.  Plus, many states are beginning to look at budget measures whereby more and more folks are being added to the unemployment rolls, which is going to massively strain states’ fiscal year planning which will start soon.

Having said all that, the foreclosure rate may have dipped, along with properties that have actually gone to sale, but we are certainly not anywhere out of the woods yet and probably won’t be for awhile.

More and more 3Q reports coming out suggest that the foreclosure rates are possibly declining, but still significant across the state. Community Trust reports the following:

“Nonperforming loans decreased $14.4 million during the third quarter 2009 to $45.2 million compared to $59.6 million at prior quarter end and $49.3 million at September 30, 2008. The decrease in nonperforming loans was in both the 90 day and accruing and the nonaccrual classifications. Nonperforming assets, however, increased $1.8 million from prior quarter-end, June 30, 2009, and $23.0 million from prior year quarter-end, September 30, 2008, as a result of increased other real estate owned.”

Other portions of their 3Q report suggest that they are still making loans, but not in the residential sector.

“Loan growth occurred during the quarter in the residential and consumer loan portfolios with residential loans increasing by $23.4 million and consumer loans increasing by $18.5 million.  The commercial loan portfolio declined by $19.4 million during the quarter.  Year-to-date loan growth of $54.0 million consisted of growth in the commercial loan portfolio of $12.8 million, growth in the consumer loan portfolio of $45.1 million, and a decline in the residential portfolio of $3.9 million.”

Read the full report.

More 3Q reports.  I think it is important to get a snapshot from banks to see where we are heading in the final few months of the year and for next year as well.  FHL reporting the following:

“At September 30, 2009, 98 percent of our mortgage-backed securities were issued by Fannie Mae or Freddie Mac, which we believe have the backing of the United States government. Only 2 percent ($211 million) of the holdings were in private-label mortgage-backed securities, which comprise high-quality residential mortgage loans issued and purchased in 2003 and which were rated triple-A at September 30, 2009. The underlying collateral has a de minimis level of delinquencies and foreclosures as reflected in the average serious delinquency rate (loans at least 60 days past due) of 0.54 percent of total principal, while their average credit enhancement stood at 7.5 percent. We expect to experience no credit losses on any of our mortgage-backed securities.”

They are projecting that they should be able to hold firm for now.  It will be very telling once the first time home buyer’s credit finally runs out.  All bets are off though, if Congress extends the credit and/or broadens who can use it, which is a distinct possibility.

Read FHL Bank’s full report.

• RT @LawBiz Apprenticeship for Lawyers: It’s always gratifying when one’s opinions receive outside support. Somet… http://bit.ly/rkgpd #
• legalneur#31: when you've won a hard fought or particularly contentious hearing, do not gloat, it could have been you that lost instead #
• legalneur#32: you have to advocate your client's position, but they may be the one not telling you the truth #

Powered by Twitter Tools

Many folks approach me asking for tips on going to the Master Commissioner sale in their respective county.  Consequently, I am going to work on a series of tips for individuals who want to know more about an MC sale, what to expect, and how to find that hidden gem of an investment.  So if you have specific questions about an MC sale, then please leave a comment or drop a line.  I look forward to hearing from you.  Here is tip #1:

What is the Master Commissioner?

So you have listened to the late night infomercials and are wondering how to get into investing through foreclosure sales.  But you are not sure what goes on here in Kentucky and how foreclosed property gets sold.  Here you go.

Kentucky is what’s called a “judicial” state, meaning the bank or other financial institution must go through the court system, file a foreclosure action, and get a judgment along with an order of sale, to be able to have the property transferred back to them.  As many of you know, the note you sign when you buy a house or real property is the actual contract that obligates you to pay back the bank.  The mortgage, on the other hand, is simply a lien against that house, building or real property, in favor of the bank as collateral if you should default on your note.  That’s why sometimes only one spouse has to sign the note, but both spouses must sign off on the mortgage.  We can go over that in another posting.

So, back to the foreclosure process here in the Kentucky.  Once a judgment and order of sale has been entered by the court, a separate order gets entered which directs the Master Commissioner of the county to sell the property.  Many of you have heard of sheriff’s sale, which is the entity in many states that is authorized by statute to sell foreclosed property.  Here in Kentucky, the authorized entity with power to convey foreclosed property is called the Master Commissioner.

Each county has one and only one.  (Except maybe Robertson, which may not have one since it is so small).  The Master Commissioner is essentially a political animal.  He or she is an attorney and member of the local bar.  They are appointed by the circuit judge of the county, so they are usually well connected.  It’s usually good to be the Master Commissioner and he or she is authorized by statute to convey foreclosed property from a debtor who has defaulted back to the bank or possibly some other third party entity.

I hope this helps to begin explaining the process.  Again, send me an email or leave a comment to this post I will be happy to answer your questions.  I look forward to hearing from you.

For those of you wondering what the largest Kentucky Based banks are, here is the top ten as listed by www.iBanknet.com in order of their asset holdings:

1.  Community Trust Bank, Inc.

2.  Republic Bank & Trust Company

3.  Stock Yards Bank & Trust Company

4.  PBI Bank

5.  Central Bank & Trust Company

6.  Whitaker Bank Inc.

7.  The Bank of Kentucky, Inc.

8.  First Federal Savings Bank of Elizabethtown

9.  Forcht Bank, National Association

10.  Traditional Bank, Inc.

More banking reports from around the Commonwealth.  Huntington Bank is not locally based, but has quite a few local banks has this to report on its mortgage portfolio:

“Demand for home equity loans remained weak, reflecting the impact of the economic environment and depressed home values. The decline in residential mortgages reflected the impact of lower market interest rates, the related increase in fixed-rate refinancing activity, and our practice of selling virtually all of our longer-term fixed-rate production. It also reflected the more conservative position on loss recognition, active loss mitigation and troubled debt restructuring efforts, as well as the sale of some underperforming loans.”

See their complete report here.

More reports coming out for the third quarter, including Kentucky based bank, Community Trust.  The full report is here.  However, here is the excerpt concerning their foreclosed property.

“Foreclosed properties increased during the third quarter 2009 to $36.6 million from the $20.1 million at June 30, 2009 and the $9.4 million at September 30, 2008, as problem real estate loans are slowly moving through the legal system, which remains strained due to current economic conditions, and CTBI continues working through a prolonged foreclosure process. Sales of foreclosed properties for the nine months ended September 30, 2009 totaled $3.9 million while new foreclosed properties totaled $29.1 million. Our nonperforming loans and foreclosed properties remain primarily concentrated in our Central Kentucky Region.”

If you know of any Kentucky based banks that issued their earnings reports, let us know and we’ll check them out.

Here are some highlights of the Federal Economic Survey broken down by various regions.  It’s an interesting snap shot of what’s going on around the country.  For the most part, it appears that the economy is moving, but very sluggishly.  Click here to check it out.