Posts (RSS)Bank Owned Foreclosure Property Burdens Lenders
Major banks managed most home loans that became bank owned foreclosure property in Wisconsin. Last May, one in every 731 houses in the state was in some kind of foreclosure proceeding. In 2008, the state?s foreclosure rate rose to 25,547 or 21 percent.
In Brown County, majority of mortgage loans were owned by investors since last year, with the trusts managed by major banks. The most number of bank owned foreclosure property is reported by Wells Fargo Bank.
According to data released by Green Bay Press-Gazette Review, 69 out of the total 498 foreclosure homes in 2008 were made by Wells Fargo. The national bank is followed by Deutsche Bank in terms of the most number of foreclosure properties, reporting 38 houses and 33 for US Bank.
However, industry experts pointed out that most likely, these banks did not initiate many loans that were foreclosed. For example, Deutsche Bank did not sign any mortgage documents with homebuyers who reside in Green Bay. The bank most likely held the loans as part of investors? trusts.
In the case of Wells Fargo, the bank did not also issue loans but held them in trusts for investors. This means that the bank legally hold the loans but did not underwrite or initiate them. This is because most major banks are in the trust business and not lending.
Jason Wenke of Wells Fargo said that its bank foreclosure property rate is about 1.77 percent of mortgage loans which is lower compared to the 2.3 percent national average.
Meanwhile, research data showed that community banks in Wisconsin only have a handful of bank foreclosure property. Furthermore, Community Bankers of Wisconsin said that 280 community banks in the state reported combined 5.3 percent foreclosures last year. Denmark State Bank and Nicolet Bank each had 5 repossessions in 2008, 7 for Associated Bank and four for Baylake Bank.
Community Bankers of Wisconsin Chief Executive Officer Daryll Lund said that the low number of foreclosure properties on community banks? inventory only showed that they have developed a good working relationship with their customers.
On the other hand, out-of-state bankers accounted for about 63.2 percent of the total bank foreclosure property in the state.
Foreclosure filings in Wells Fargo took a share of 10.7 percent, 9.9 percent in US Bank, 8.2 percent in Deutsche Bank, 7.3 percent in Countrywide and 5.4 percent in JP Morgan Chase Bank.