Granted, new foreclosures continued to be filed — 256,000 people had a foreclosure added to their credit reports in the June quarter — but that figure was the lowest since mid-2007, the Fed said.

In stark contrast to this improving backdrop are the legal battles still being waged over wrongful foreclosure practices. The glacial progress in these cases is not surprising, given the crowded courts and combatants’ usual stalling tactics.

What is surprising is the fresh evidence these cases are turning up of cockeyed mortgage practices, during both the boom and the bust. As these matters are adjudicated, perhaps we will finally learn whether these practices were intended or accidental.

Take the problem of questionable legal fees levied on troubled borrowers. Although these costs may seem small in the scheme of things, they certainly add to the burdens of many hard-pressed Americans.

A foreclosure from Ohio highlights this problem. The facts from this matter are central to a prospective class action filed by a borrower, who contends he was charged improper court costs and legal-related fees in his foreclosure.

The case involved legal moves taken against a bank in 2007 that did not even have an interest in either of the two mortgage liens associated with the foreclosed property. Even though the bank should never have been dragged into the matter, it was — generating $775 in court costs and legal fees paid by the borrower, documents show. Only two years later, during the discovery process, did it emerge that the bank had no ownership in the underlying property.

That $775 may not sound like much. But Paul Grobman, a lawyer in New York who represents the borrower, said he believed the collection of what he called improper legal charges is rampant in foreclosures.

The case involving the $775 began in 2007 when Eugene D. Kline fell behind on the first and second mortgages on his home in Centerville, Ohio. Wells Fargo, noting that as trustee of a securitization it held the note backing the $160,000 first mortgage, sued Mr. Kline and his wife, Patricia, in state court.

Because Mr. Kline had also taken out a second mortgage, Wells Fargo sued the institution that it said owned the additional obligation. Here is where Mortgage Electronic Registration Systems comes in, the company that runs the database set up by banks in the mid-1990s to speed the transfer of mortgages nationwide and track their ownership. To save the costs of recording a mortgage’s transfer from one institution to another, MERS acts as mortgagee in county land records. But it does not own the note underlying a property.

Amid the foreclosure crisis, however, critics have contended that the registry actually served to hide the true owner of a mortgage, making it difficult for borrowers to get help in working out their loans.

The facts in Mr. Kline’s case seem to indicate another flaw with the MERS registry — that it may not even track mortgages effectively.

MERS was the nominee for WMC Mortgage, an entity that held the second lien on the Kline property, according to Wells Fargo’s court filings. Oddly, lawyers for WMC confirmed that it had an interest in the loan, whose value was around $30,000.

In 2008, Mr. Kline advised the lawyers for the banks that he would sell the house and pay off the loans, which totaled approximately $200,000. He did so, paying the legal costs associated with the suit involving the second lien.

But in 2009, documents produced in the Ohio action showed that WMC Mortgage had not, in fact, held the second mortgage when the foreclosure began. WMC had sold Mr. Kline’s loan three years earlier into a securitization trust put together by Merrill Lynch. That trust also held Mr. Kline’s first mortgage and was overseen by — you guessed it — Wells Fargo.

So, to recap: At the time of the foreclosure, Wells Fargo held both loans taken on by Mr. Kline. Nevertheless, its lawyers sued WMC, contending WMC held the smaller loan. Even though WMC did not own the loan, its lawyers represented to the court that it did. All the while court costs and other charges were billed to Mr. Kline.

Many questions arise in this case. For starters, if the MERS registry is the accurate record it claims to be, why didn’t Wells Fargo or its lawyers see that it, not WMC, held the second lien when the Kline foreclosure began?

A MERS spokeswoman declined to comment, citing the pending litigation. Elise Wilkinson, a spokeswoman for Wells Fargo, said that as trustee of the securitization, the bank “would not be in possession of any information regarding a foreclosure action.”

 “All such information would be in the possession of the mortgage loan servicer,” she said, “which is the party responsible for initiating and managing all aspects of the mortgage loan foreclosure process.” That was the HomEq Servicing Corporation, which is no longer in the business, the Wells spokeswoman said.

 Ditto for WMC. Why didn’t it recognize early on that it had sold the Kline loan years before, saving Mr. Kline legal fees? Rick DeBlasis, a lawyer handling the matter at Lerner Sampson & Rothfuss of Cincinnati, declined to comment, saying it was part of the class action.

It will be interesting to watch that case unfold. But in a unanimous ruling against MERS last month in Washington State Supreme Court, the judges described their problems with the registry. “Under the MERS system,” they wrote, “questions of authority and accountability arise, and determining who has authority to negotiate loan modifications and who is accountable for misrepresentation and fraud becomes extraordinarily difficult.”

Mr. Grobman agrees, arguing that the involvement of MERS in the Kline case allowed the law firms to charge improper fees. “Both Wells Fargo, MERS and their attorneys in this action could falsely represent that the first and second mortgage were owned by different entities,” he said, “and could pass on the legal fees and expenses purportedly incurred in the suit.”  

And what about the Klines? They now rent a home. “It’s a rental that we were blessed enough to be able to rent from a friend,” said Ms. Kline.

At the time, it looked like a sweet deal for the banks. The fines were paltry compared with the damage done to homeowners and the economy. And much of the relief the banks were obliged to provide could be met by continuing more or less with business as usual.

It still looks like a sweet deal.

The Office of Mortgage Settlement Oversight, the monitor of the settlement, released a preliminary report last week showing that 138,000 homeowners had received some form of relief from March 1 through June 30. That is roughly the number that would have been expected under various aid programs in effect before the settlement. Worse, with some three million borrowers now in or near foreclosure, according to Moody’s Analytics, it is nowhere near the level of relief needed to fix the housing market.

The type of relief provided — mostly short sales, in which a bank allows a homeowner to sell for less than is owed on the mortgage — had become increasingly common before the settlement.

Short sales are better than foreclosures, in part because they prevent vacancies that depress house values. But they are not punishment for wrongdoing in any meaningful sense; rather, they allow banks to get higher prices for underwater properties than they could have gotten in foreclosure sales.

Nor do they fulfill the settlement’s main purpose: to keep underwater borrowers in their homes by reducing the principal on their mortgage loans. According to the monitor’s report, $8.7 billion of debt has been written off in short sales versus only $750 million of principal reduction from loan modifications.

The settlement was not, of course, intended as a cure for the housing bust. And future progress reports will no doubt show many more homeowners receiving big loan modifications. But, based on the banks’ performance so far, it also seems likely they will be able to structure the required relief in ways designed to tidy up their balance sheets, rather than to save as many homes as possible.

Even the relief that is provided may turn out to be less than meets the eye. That’s because much of the debt forgiven in short sales and loan modifications will be counted as taxable income to the borrowers, creating huge tax bills they will not be able to pay.

Mortgage debt that is forgiven is exempt from taxation under current law, but only if the debt was used to buy or improve the house. The law does not exempt debt forgiven on many home equity loans, even though the foreclosure settlement envisions billions of dollars in modifications to such loans.

Several bills in Congress call for extending the law, which is set to expire at the end of the year. But what is obviously needed is a broader law shielding all forgiven mortgage debt from tax.

Meanwhile, an investigation into the mortgage abuses that led to the financial crisis, promised by President Obama in January, has been slow to produce results. The settlement left open the possibility of civil and criminal suits on mortgage securitizations and other practices that inflated the bubble. The aim is to produce deeper accountability and larger fines with which to provide even more mortgage relief, but no suits have yet been filed.

The economy will not recover and justice will not be done unless and until the mortgage mess is resolved.

Last week Zillow released its second quarter Negative Equity Report. The report shows that nationally the negative equity rate had fallen to 30.9 percent from 31.4 percent in the first quarter and that half of all borrowers under 40 were underwater on their home loan.

Today Zillow is reporting the percentage of homeowners under 40 years old who are underwater on their mortgage for the 100 largest metro areas covered by the report (chart below).

This is an important number to consider when looking at the pipeline of sales. As Stan Humphries, Zillow’s chief economist, put it in a recent interview, “homeowners under 40 who are stuck in negative equity are gumming up the treadmill. They can’t move into larger homes, and those looking for entry level homes have little inventory to choose from.”

Of course, renting is always an option for homeowners who are unable to sell, and Zillow has tools for people in that situation. You can check out median rents (going up in most places) on the Zillow Real Estate Market Reports, as well as your home’s own Rent Zestimate, to help you price your home for rent, then post your home for rent, for free, on Zillow.

But, if renting out your home is not something you’re interested in, you should at least consider refinancing, especially if your current rate for a 30-year fixed mortgage is above 4.5 percent. And yes, in most instances you can refinance your underwater home loan. Zillow Mortgage Marketplace can now quote for HARP 2.0 and FHA Streamline Refinance (underwater loan program) so be sure to check it out.

In the meantime, take a look at the alphabetical list of the percentage of homeowners under 40 who are underwater on their mortgage. The list ranges from 23.3 percent in the Rochester, NY metro area all of the way up to 81.4 percent in the Las Vegas, NV metro.

 

Last week Zillow released its second quarter Negative Equity Report. The report shows that nationally the negative equity rate had fallen to 30.9 percent from 31.4 percent in the first quarter and that half of all borrowers under 40 were underwater on their home loan.

Today Zillow is reporting the percentage of homeowners under 40 years old who are underwater on their mortgage for the 100 largest metro areas covered by the report (chart below).

This is an important number to consider when looking at the pipeline of sales. As Stan Humphries, Zillow’s chief economist, put it in a recent interview, “homeowners under 40 who are stuck in negative equity are gumming up the treadmill. They can’t move into larger homes, and those looking for entry level homes have little inventory to choose from.”

Of course, renting is always an option for homeowners who are unable to sell, and Zillow has tools for people in that situation. You can check out median rents (going up in most places) on the Zillow Real Estate Market Reports, as well as your home’s own Rent Zestimate, to help you price your home for rent, then post your home for rent, for free, on Zillow.

But, if renting out your home is not something you’re interested in, you should at least consider refinancing, especially if your current rate for a 30-year fixed mortgage is above 4.5 percent. And yes, in most instances you can refinance your underwater home loan. Zillow Mortgage Marketplace can now quote for HARP 2.0 and FHA Streamline Refinance (underwater loan program) so be sure to check it out.

In the meantime, take a look at the alphabetical list of the percentage of homeowners under 40 who are underwater on their mortgage. The list ranges from 23.3 percent in the Rochester, NY metro area all of the way up to 81.4 percent in the Las Vegas, NV metro.

 

Being a landlord isn’t easy. On top of property maintenance, collecting rent, marketing vacancies and keeping a good relationship with your renters, there are lots of responsibilities that come along with the job. If your schedule doesn’t allow you to do it all (and do it well), or you keep rental properties as a secondary income, it might be time to hire a professional property manager to take care of your property.

Before you hire a property manager, you want to interview them to make sure they’re a professional in their field and will treat your property like their own. They should be familiar with the compliance laws in your state and know the industry well. To get started, here are a few questions you need to ask a potential property manager during the interview process.

What kind of services do you offer?

Different property management companies offer difference services. How all-encompassing and involved do you need your managers to be? Go into the discussion with a list of services that are necessary for your rental business, and see if the candidate can supply them. The last thing you want is to hire a property manager, only to find out they don’t provide a 24-hour call service.

How long have you been working in property management?

You want a manager who knows what they’re doing, not someone who’s going to figure everything out on the job. An experienced professional will know how to deal with angry tenants and emergency maintenance issues on top of being organized and efficient on the job. Ask for references so you can ensure the candidate is experienced and dependable.

Do you have any certificates or licenses?

Make sure the candidate is qualified and knowledgeable about property management. The job doesn’t only involve collecting rent and filling vacancies: Property managers need to know the ins and outs of discrimination, fair housing and eviction laws. You’re holding the property manager accountable for the bulk of your rental business, so make sure they know how to do it right.

How do you advertise properties?

You don’t want a property manager who will publish a listing in the paper and be done with it. Find out their marketing process, ask for samples of property listings they’ve written, or creative techniques for advertising. Anyone can post a rental listing. The trick knowing how to do it effectively.

How responsive is your customer service?

A property manager who is careless about customer service risks causing damages and lost profit to your property. A professional service will make sure your renters’ needs are covered at all times, especially since you won’t be there to take care of it. You don’t want your tenants to be neglected when they request maintenance service. Ask about their procedure and timeline for responding and taking care of repair requests.

How do you screen tenants?

The property manager will be the gatekeeper to your property. You need to make sure they will be fair and non-discriminatory during the tenant selection process so you won’t have a lawsuit on your hands. Ask about their screening process to make sure they will be selecting qualified tenants to live on your property.

Back in May, Curbed reported that actor Matt Damon potentially had his eye on a resort-like Pacific Palisades home. A few months later, and we’re reporting that the home indeed has sold, and according to property records, it looks like it now belongs to the A-lister.

Last listed for $15.95 million, records show that Damon picked up the home for $15 million. Described as the “best house in Pacific Palisades,” the home is on a half-acre, private, corner lot with lush landscaping. A koi pond, pool and spa pavilion are also in the yard.

The home itself offers 8,890 square feet, 6 bedrooms and 8 bathrooms. The zen-inspired retreat has 35-foot mahogany vaulted ceilings, disappearing walls of glass and an open floor plan.Three levels of living space are connected by an open atrium and floating staircase. The home also features an office, maids’ rooms as well as a large gym.

Best known for his starring roles in the “Bourne” films, Damon also owns a several-parcel compound in Miami Beach.

How enchanting was the Parnussas real estate market home in San Francisco owned by writer Armistead Maupin?

Enchanting enough, apparently, to fetch nearly half a million more than its list price.

Talk about bestseller!

According to Herth Sales, which held the listing for the picture-perfect home at 27 Belmont Ave, San Francisco, CA 94117, the 3-bedroom, 2-bathroom, 1,600-square-foot gem sold for $1.64 million on July 27. The list price had been $1.198 million when the home hit the market on July 19.

The home has views of downtown San Francisco, the bay and Marin County — exactly the kind of inspirational eye candy that helped Maupin create his iconic “Tales of the City” series, which not only includes some of the most beloved books among the literary set but also was turned into a critically-acclaimed television mini series.

“Tales of the City” is an 8-part series. SOURCE: Amazon.com

According to Curbed, Maupin and his husband, Christopher Turner, are moving to Santa Fe, NM. That prompted the sale of the craftsman/Edwardian home, which Maupin picked up in 1993 for $615,000.

The home figured prominently in his work, and his novel “The Night Listener” is largely set there:

Out of habit I approached the house from the sidewalk across the street, where I could see it in context: three narrow stories noticed into the wooden slope. Its new cedar shingles were still too pallid for its dark green trim, but another season or two of rain would turn them into tarnished silver. I’d be eagerly awaiting that. I’d wanted the place to look ancestral, as if we had lived there forever.”

Well, now that phase of Maupin’s life is done. We’ll wait for what comes next from him down in Santa Fe. Maybe something along the lines of “Tales of The Desert”?