by Calculated Risk on 2/20/2010 07:46:00 AM

Jeff Collins, at the O.C. Register, has a Q&A with Wayne Yamano, vice president at John Burns Real Estate Consulting: Loan mods won’t halt foreclosures, study shows

Register: Your study says that five million of the 7.7 million delinquent homes will go through foreclosure or a “foreclosure-related procedure.” How is this likely to occur?

Wayne: Most shadow inventory will get out onto the market as an REO or short sale. In any event, it results in the homeowner losing their home, and that home being added to the supply of homes available for sale.

Register: Do the remaining 2.7 million borrowers get their loan payments caught up?

Wayne: Of the 7.7 million delinquent homeowners, we actually think that only about 1.6 million will be able avoid losing their homes, and that the remaining 6.1 million will lose their homes. We say that there is 5 million units of shadow inventory because we estimate that about 1.1 million delinquent homeowners already have their homes listed for sale, and we would not classify those homes as “shadow.”

Register: When will this wave of foreclosures hit, and how will this shadow inventory affect home prices?

Wayne: We don’t believe that the shadow inventory will be dumped onto the market all at once. Although we don’t believe modification efforts will truly save a lot of homeowners from losing their homes, we do believe that these programs are effective in delaying foreclosures and pushing out the additional supply to later years.

Burns Consulting doesn't think there will be flood of homes hitting the market - they expect these homes will be lost over a few years - so in their view there will not be "another leg down in pricing".

by Calculated Risk on 2/19/2010 10:49:00 PM

Note: Two different stories with a theme ...

First, from an article in the Arizona Daily Star: Chandler man arrested for gutting foreclosed home (ht Mellanie)

Police say 35-year-old Daniel I. Clark was booked on suspicion of defrauding a secured creditor and criminal damage. Police say a neighbor of Clark's stopped an officer on patrol and reported that Clark was "deconstructing" his house.

And here is the video of the bulldozer guy in Cincinnati featured on WKRP, uh, WLWT.com:

by Calculated Risk on 2/19/2010 08:05:00 PM

Not the Delaware
Washington Bank crossed over
But the Rubicon

The La Jolla Bank
A name sounding so happy
New mood: not jolly
by Soylent Green is People
From the FDIC: FirstMerit Bank, National Association, Akron, Ohio, Assumes All of the Deposits of George Washington Savings Bank, Orland Park, Illinois

George Washington Savings Bank, Orland Park, Illinois, was closed today by the Illinois Department of Financial Professional Regulation – Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. ...

As of December 31, 2009, George Washington Savings Bank had approximately $412.8 million in total assets and $397.0 million in total deposits. ...

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $141.4 million. ... George Washington Savings Bank is the 19th FDIC-insured institution to fail in the nation this year, and the second in Illinois. The last FDIC-insured institution closed in the state was Town Community Bank and Trust, Antioch, on January 15, 2010.

From the FDIC: OneWest Bank, FSB, Pasadena, California, Assumes All of the Deposits of La Jolla Bank, FSB, La Jolla, California

La Jolla Bank, FSB, La Jolla, California, was closed today by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. ...

As of December 31, 2009, La Jolla Bank, FSB had approximately $3.6 billion in total assets and $2.8 billion in total deposits. ...

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $882.3 million. ... La Jolla Bank, FSB is the 20th FDIC-insured institution to fail in the nation this year, and the second in California. The last FDIC-insured institution closed in the state was First Regional Bank, Los Angeles, on January 29, 2010.

La Jolla Bank is a pretty good size failure. That makes four today ... hey, OneWest ... get out your tinfoil hats!

by Calculated Risk on 2/19/2010 07:05:00 PM

La Coste in Texas
Alligator shirt emblem?
A penniless bank
by Soylent Green is People
From the FDIC: Community National Bank, Hondo, Texas, Assumes All of the Deposits of the La Coste National Bank, La Coste, Texas

The La Coste National Bank, La Coste, Texas, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. ...

As of December 31, 2009, The La Coste National Bank had approximately $53.9 million in total assets and $49.3 million in total deposits....

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $3.7 million. ... The La Coste National Bank is the 18th FDIC-insured institution to fail in the nation this year, and the first in Texas. The last FDIC-insured institution closed in the state was Madisonville State Bank, Madisonville, on October 30, 2009.

Another small bank ...

by Calculated Risk on 2/19/2010 05:42:00 PM

Bad debt drowns one more
Marco Community fails
Mutual absorbs.
by Soylent Green is People
From the FDIC: Mutual of Omaha Bank, Omaha, Nebraska, Assumes All of the Deposits of Marco Community Bank, Marco Island, Florida

Marco Community Bank, Marco Island, Florida, was closed today by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. ...

As of December 31, 2009, Marco Community Bank had approximately $119.6 million in total assets and $117.1 million in total deposits. ..

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $38.1 million. ... Marco Community Bank is the 17th FDIC-insured institution to fail in the nation this year, and the third in Florida. The last FDIC-insured institution closed in the state was Florida Community Bank, Immokalee, on January 29, 2010.

It is Friday.