Friday, January 28, 2011

The End of HAMP?

I know its just January, almost February but for fiscal minded politicos, its spring time and its time to clean, a little weeding if you will.  We are seeing it here in Washington as cities like Everett and Lynnwood cut back on teachers and other staff, and even at the state level as Governor Gregoire puts the axe to under-preforming programs and asks for whole sale cut backs in expenses and personnel.   News from the other Washington (D.C.) that there are further cuts on a national level.  One in particular is HAMP.

From a professional stand point, I have been less than accepting of the program.  The Home Affordable Modification Program (HAMP) for short has been an abject failure.  Nationwide, until last summer we had seen the modification to application ratio sit at about 3.6%.  Recent news has shown that number climbing to about 7% and in particular locals where the states have implemented special hotlines and other foreclosure deferment programs like Colorado, the number has climbed to 12%.  Not exactly favorable numbers.

To be fair to HAMP, a lot of applicants cannot qualify for the modification.  The target is 31% of pre-tax income.  With the loss of jobs, loss of overtime, or any combination of decreased earning capacity will cause some homeowners to be in a situation to where they simply cannot afford to stay, even if a modification was made to meet 31%.

The issue that I take is that in many instances is that the bank essentially gets to look at the value of the current loan as a starting point for determining if it will in fact modify.  If the bank is not better off, it has not incentive to modify and won't.

Jim Jordan, Darrell Issa and Pat McHenry, all Republican congressmen have introduced a House Bill that would clean out HAMP due to its failure in meeting the projections of 3 to 4 million modifications as opposed to the 579,000 that had been accomplished through December. 

The repeal of these bills in of itself will do nothing to cure the foreclosure crisis.  In fact, for the handful of people it helped, it would be detrimental.  The problem with those bills is taht there is no private enforcement, no consumer protection act application, no provision requiring good faith action on the part of the bank.  When there is no enforcement, the bill or regulation is worth about as much as the paper it is written on. (Sorry for the dangling participle)

The beauty of the Foreclosure Mediation bills that I have commented extensively upon this week, is that there were finally some teeth.  No more paper tigers here.  The attorney could, on good facts, get a finding that the bank had acted in bad faith.  Bad Faith suits are enough to make executives soil themselves and that is why the banks and their big law lackeys have made many arguments against the passage of these bills.

Though I applaud the removal of under-preforming and broken vestiges of government, it is much like a garden with weeds.  You can pull weeds all day long, but if you don't put something good in its place, the weeds come back.  Spring clean, put things in order, but don't leave us without any tools to fight the bank, the weed will just come back.

Thursday, January 27, 2011

Money may derail Foreclosure Mediation in Washington

I don't know about you, but I used ride trains everywhere.  Of course, not in the US because our mass transit sucks, but in Japan.  Trains are cool, they are powerful, can transport enormous amounts of people and goods, and if you have a Japanese conductor, they are efficient.  The only problem is that they ride on a rail, permanently attached to the ground and if the train ever leaves that rail, well, buckle-up buttercup, cause you will be needing a personal injury attorney.

Yesterday, I attended the House and Senate hearings on the new legislation which is termed Foreclosure Mediation.  The previous posts went into detail on the legal ramifications of the bills (HB 1362 and SB 5275) and I continue to support them.  However, yesterday's Senate Hearing which was Chaired by Senator Steve Hobbs chimed an unfortunate reality, money.

Senator Hobbs pointed out that the fiscal note (link here) that this bill would cost WA taxpayers $3.3 million to implement.  Well, that said, there are some enormous issues with that number, and there is alternative financing that should make the impact to the general budget a net of zero. First of all, the fiscal note assumes that WA will see 40,000 foreclosures next year.  The number is likely accurate, or accurate enough for an estimate as the baseline that the industry experts were throwing out yesterday was somewhere in the vicinity of 30,000 and a recent Realty Track estimate had it at 50,000.  Both numbers are skewed by faulty data because they look at different measures such as the number of notices of default that are filed.  Well, in my practice I have forced one bank to file three notices of default on my one client because the bank is an abject screw up.

The second issue with the foreclosure number is that it includes all foreclosures.  Foreclosure impacts every type of property, whether it is bare land, commercial, industrial, investment, or residential owner-occupied.  The bill only targets the properties that are owner occupied.  So there will only be a percentage of the foreclosures that even qualify for the the program. Since only a percentage qualifies, the expenditures should be quite a bit lower because the government will not be looking at the entire cost for 40,000 foreclosures.

The last issue is that there is a funding mechanism of a $30 surcharge being attached to each notice of default filed with the state.  This fee alone should pay for the project, but that is not all.  Each mediation will cost $400, to be split by the parties.  To enhance the overall effectiveness, a lobby from coalition of 20 mediation clinics in the state said that they were already equipped to handle the mediation and have alternate funding sources already accounted for in the State budgets.  Thus no additional cost.

There was some testimony that County Auditors believe that this $30 fee is not a recording fee, but in actuality a tax which is not properly apportioned, can anyone say Health Care Reform?  This is a valid point which will likely be litigated at some point, but I believe the fee is limited in scope and in actuality is a fee.  I am sure that some Big Law lackey will take up the put-upon bank's sob story and dog and pony show it in front of the court but I believe it is a losing argument.

So the action item from this post, is let Senator Hobbs know that the budget office got it wrong, that the bill is right and good, and don't let tactical delay from the big banks derail good legislation.

Wednesday, January 26, 2011

Update on the HB 1362 Hearing this morning...

I wanted to capture some of the information and my observations from today’s House Judiciary Committee Meeting on HB 1362. A committee staff person took the first few minutes to flesh out the bill and I would like to recap a lot of what was stated, of course with my own added commentary.

First, the bill is designed to strengthen the “meet and confer” provisions that already exist in the bill.  As it stands now, RCW 61.24.031, which expires December 31, 2012 and only applies to Deeds of Trust that were signed between 2003 and 2007, requires the lender to contact the homeowner by phone and mail and have an initial conversation with the homeowner owning the right to a subsequent meeting with the lender to discuss the homeowner’s financial ability to repay the debt.  The problem with this section is that there is a compliance section that allows the lender to send a letter and document three phone calls, whether the homeowner answers or not is of no consequence, and then the lender has “acted in good faith in complying with the law.

From what I have seen, there is a log recorded on the Notice of Default which lists the day the letter was sent and the days and times the lender tried to make the required phone call.  The problem is that it is impossible to distinguish the calls simply seeking payment and the calls that are actually trying to comply with the statute.  The lender will say its one in the same.   Just to be sure, it is not one in the same.

This bill would extend the provision to all owner occupied properties, regardless of the date of the DOT, remove the sunset date at the end of 2012, and would also disallow the meeting to occur by phone, but would require an in person meeting  The bill proposes to change the language from may to must in many instances giving more teeth to the legislation.
The second and maybe the most significant and certainly the most controversial aspect of the bill is the issue of Mediation.  The bill would require that a homeowner that requests a mediation after the NOD has posted and before the NOT is posted, be given a chance to have a third party mediator sit down with the homeowner and a decision maker from the bank.

The mediation requirements have some teeth to them and that is why it is so controversial.  The bill would require the bank to act in good faith and negotiate as such.  The legislation goes to illustrate good faith by including the beneficiary to provide accurate statements of loan balances, copies of original loan documents, proof that the entity claiming to be the beneficiary is the owner of the promissory note, and itemized lists of arrears and fees, an affordable loan modification calculation, and net present values of the modification versus proceeds from an anticipated foreclosure.

The Washington Bankers Association and United Trustees Association and some lawyers from Davis Wright and Tremain presented over 25 minutes of counters to these requirements.  The representative from WBA presented a three part defense.  First, the WBA has already agreed to strengthen “Meet and Confer” without further legislation; second, WBA has pledged to fund additional Housing Counselors; and Third, provide an alternative legislation based off the Colorado model.

The lawyer from Davis Wright Tremain, a respected law firm in Seattle, and let’s be honest and call the firm (and not its attorneys) what they are, corporate whores, called the mediation not mediation, but mandatory arbitration.  This is because of the Consumer Protection Act which I will detail later, would add teeth to failures to negotiate in good faith.  The incentive in other wards is more of a stick than a carrot which the banks object to being prodded with during foreclosure.

Additionally, and DWT is not alone, the issue of governmental interference with a private contract, which is unconstitutional, was brought up as a potential problem.  The Executive Committee of the Real Property and Probate Section of the Washington State Bar addressed the same issue and supposedly sent out an email to that effect yesterday, I still haven’t seen it.  My reading of the bill shows that there is tremendous wiggle room here for the banks and that this is a bit of hyperbole because let’s face it, some people, no matter how much you cut the payments down, cannot afford the houses they are living in now.  Modification must be discussed, but not all will qualify.  However, if the Net Present Value (NPV) of the payments under modification will gross more than a foreclosure sale, to turn down that option when you are comparing on a dollar to dollar basis seems like bad faith.  That was the point of one gentleman who claimed that due to the governmental deals through the FDIC, foreclosure and a guarantee of losses makes foreclosure too profitable. I cannot speak directly to that theory, but there is evidence to suggest that such deals were made and exist.

Finally, the Consumer Protection Act (CPA) would be applied to the mediation component.  The CPA would allow the State Attorney General to step in and regulate some of the bad actors that we have come to loathe over the last few years, and yes Aurora Loan Services, I include you in that group.  What is of note here, is that Mr. Jim Sugarman of the AG’s office came out and stated that his office “was in favor of the CPA being applicable to the entire Deed of Trust Act.”  That is significant, because that would mean that it wouldn’t be so damn hard for me to attach it to violations by banks.  I support Rob McKenna in making that a reality.

 So what does this mean for us.  Nothing.  This is proposed legislation, it isn’t worth the paper it is written on until it is enacted.  So what can you do, call you state senator and legislative representatives.  Tell them you support this bill.  The banks have basically given a finger to “meet and confer” for the last three years and there isn’t any way in hell that I believe they will voluntarily act on the proclamation that they will strengthen this.

Additionally, we don’t need more housing counselors.  The ones we have don’t have the tools necessary to do anything.  This legislation would give housing counselors, private parties, and their attorneys real weapons to help homeowners out.  Call your legislators and tell them you support the bill.  Let’s get this one passed.

Tuesday, January 25, 2011

As I Testify... can I get a Hallelujah?

As some of you know, I did a little work as a preacher.  I had my fair share of chances to testify, but I never got a chance to get a hallelujah.  Well tomorrow, I am hoping for my chance because I will hopefully be testifying on behalf of consumers on a subject that is important to my clients.

It has been a crazy two weeks since my last post and part of the craziness is what I want to write about.  On January 19th, two bills were read on the congressional floors here in Washington (that is the state in the Northwest.)  The House read HB 1362, and the Senate read SB 5275.  These two companion bills are proposals for foreclosure mediation.  A good friend of mine, summed up the bills as such:
  • Adds provisions for foreclosure mediation if the borrower elects mediation
  • The beneficiary must conduct a good faith review of the borrower's financial situation and offer a loan modification or other option if the borrower is eligible.  A good faith review means that the beneficiary: (1) evaluates the borrower's eligibility for all loan modification programs; and (2) participate in foreclosure mediation, if the borrower elects mediation. Sharing information, negotiating willingly, cooperating with the mediator and keeping agreements are indications of good faith.   If the beneficiary fails to conduct a good faith review, it is a defense to foreclosure.
  • Extends the ‘meet and confer’ requirements to all loans (not just those made between 2003-2007)
  • Requires banks to pay a surcharge on every foreclosure filing that will fund the program and additional housing counselors
  • Makes it a Consumer Protection Act violation for any person to violate the duty of good faith in the mediation requirement  
Tomorrow, I will be attending hearings in Olympia in both chambers and hopefully testifying on behalf of consumers.  I have been told that these meeting usually only have a handful of consumer advocates and the rest are taking money from the banks.  Well, I guess I technically take money from banks too, but that usually doesn't happen in a willing transaction between business partners.  Its more like me acting like the school bully and the banks are giving up milk money.  For a kid that used to have to give up his milk money, that feels good.  Can I get a Hallelujah? 

Wednesday, January 12, 2011

Lovable Losers! Housing falls for 53 straight months

How many of you have that person in your family that can't win for trying?  I know that I have a few, in fact I seem to collect them as friends and relatives.  I guess I have a soft spot for the underdog.  When I was in my undergrad, I studied stocks and bonds, not a really exciting course of discussion for some, but when you are dealing with companies, there is a lot of personality to many of them, not unlike the lovable losers in our own lives. Think of Apple and its feud with Microsoft or Geico's Cavemen and the many other brands that live in Americana today that have taken on personas all their own.  Well, in investing, sometimes investors get attached to things because of the sexiness of the brand, or its perceived value regardless of its economic value.

I promise, this is going to tie in nicely with housing in a minute, but if you will allow me one story.  I grew up a fan of comic books and when I was studying stocks, one of our projects was to take an imaginary amount of $5M and invest it in a diversified portfolio and make daily transactions, the guy with the most money at the end of the semester wins.  One of my stock picks was Marvel.  The stock was going gangbusters for me, but then there was a falling out between Stan Lee and the rest of his board and there was a big suit over movie profits and the stock price tanked.  Guess who held on out of a misplaced sense of nostalgia?  That's right, me.  I did really well in that class, but that failure taught me a very important thing.   Emotional attachment to things, can cause you to lose in the endgame.

An interesting article was posted on CNBC today and it used the word "Depression."  Though our overall economy is not in a depression, if we look at housing prices overall for the US, we have lost value for 53 consecutive months.  That is over 4 and 1/2 years.  You may have children that started college and have never been able to study a single month of rising housing prices in a college career dedicated to finance without cracking open a historical chart.

The issue that I have with this, and this is partly the fault of media, partly the fault of nostalgia, partly the fault of fear, a myriad of factors that have lead us to hold on to a losing economic asset.  We love our homes, it is where we brought home our first child, raised the kids, had Christmas parties, proposed to spouses, and felt safe from a turbulent world.  There is so much emotional attachment to those four walls that many have or will lose the endgame because they cannot let go.

When we deal with foreclosure, strategic default, efficient breach, or whatever term you like to use, the simple fact is that in order to take action, rather than letting the economy dictate to us what is going to happen, we have to shed some of the emotional baggage. Yes it is your home, but as cliche as it may sound, home is where you heart is and that should be your family, not the four walls that are acting like an economic prison dragging us further into depression.

Look at the lovable losers in your life, give them a hug, because family and friends are the important parts of our life, and then look at the loser economic asset, take a picture and let it go.  Whether its a stock that is attached to a childhood memory or a house that you just can't afford to see drop in value one more month and let it go. Depression doesn't have to hold us, we can fight back and come out economic winners.

Friday, January 7, 2011

If this were only a hand slap...Banks lose in court and stock market

Today, the Massachusetts Supreme Judicial Court issued an opinion on a case involving mortgage backed securities, trust funds, foreclosure, lying, fraud, coercion, and all around baddy-bad-bad badness.

Two banks, US Bank and Wells Fargo, were the banks that purportedly held the mortgages on two homes belonging to the Ibanez family and the LaRace family.  The problem on the Ibanez home, which is the headliner property in the opinion that can be found as a slip opinion here, U.S. BANK NATIONAL ASSOCIATION, trustee  vs. Antonio IBANEZ, is that US Bank didn't finish most of its documentation of owning the home until after the foreclosure process had occurred.  In fact, if it hadn't been for Mr. Ibanez being a service member, this case may have never even happened because Massachusetts is a nonjudicial foreclosure state like Washington.

Because Mr. Ibanez was a service member, the foreclosure had to proceed through the courts, and a challenge was issued against US Bank as to its ownership.  See, the note had passed from an originator to Option One Morgtgage Corp, a record holder, to Lehman Brothers Bank, FSB (now defunct) to Lehman Brothers Holdings Inc. who sold it to structured Asset Securiteis Corporation which deposited the note with US Bank National Association as the trustee for a MBS trust.  If you lost count, that was 8 different entities holding the note, supposedly.  The note was usually passed
"in blank" which means that the new holder's information wasn't filled out.  Crazy!

US Bank bought the Ibanez property for well below market value and also well below par value of the loan and asked the court to quiet title.  The court ruled against the Bank and held that the foreclosure sale was invalid because the mortgage had not been properly assigned. A motion to vacate the judgment was denied and the decision was appealed.

The bank had the authority to exercise the power of sale contained in the Ibanez and LaRace mortgages only if they were the assignees of the mortgages at the time of the notice of sale and the subsequent foreclosure sale. However, mortgage loans that are pooled together in a trust and converted into mortgage-backed securities, the underlying promissory notes serve as financial instruments generating a potential income stream for investors, but the mortgages securing these notes are still legal title to someone's home or farm and had to be treated as such.
U.S. Bank argued that it was assigned the mortgage under the trust agreement described in the PPM, but it did not submit a copy of this trust agreement to the judge. The PPM, however, described the trust agreement as an agreement to be executed in the future, so it only furnished evidence of an intent to assign mortgages to U.S. Bank, not proof of their actual assignment. Even if there were an executed trust agreement with language of present assignment, U.S. Bank did not produce the schedule of loans and mortgages that was an exhibit to that agreement, so it failed to show that the Ibanez mortgage was among the mortgages to be assigned by that agreement.

The court concluded that  the banks were not holders of the mortgages at the time of foreclosure and thus did not obtain title at the foreclosure sale.  What does this mean for the homeowners.  Well, a person that gives a mortgage is called a mortgagor and holds superior title to everyone except the mortgagee (the person receiving the mortgage and usually the one lending money), so the houses must revert to the Mortgagor, the homeowner.

There is no question that the homeowner defaulted.  The issue really was whether the banks had the right to do what they did.  In a concurring opinion, Judge Cordy stated "what is surprising about these cases is not the statement of principles... but rather the utter carelessness with with the plaintiff banks documented the titles to their assets."  This carelessness is where homeowners can forestall the process because the banks have to prove that their title is superior and they have the right to foreclose.  The unfortunate issue though, is that the only way to do that is to get into a legal battle in nonjudicial foreclosure states like Washington.

My offices are preparing a number of complaints against MBS  trust held mortgages as an effort to restrain a nonjudicial foreclosure.  Certainly there is risk in this activity, but at the same time, the ability to hold title to your property and live in it until the bank can establish its superior title is very powerful.

What does this mean for the overall economy?  Well, this could be catastrophic.  In a Reuter's article that I read, the ticker down the side showed the major banks shedding percentage points today on the news. The banks are going to the cleaners over this, the only way to prevent this type of opinion from destroying our title system is to have a legislative forgiveness passed on the MBS community.  The only way for that to come about though is for some chaotic repentance in the courts first.

Tuesday, January 4, 2011

Leading indicators: Statistics, lies, and half truths

There are a number of issues that I have with media, and the simple fact that I am writing this is going to perpetuate the problem.  What I am writing is not news.  Its my opinion, based on the facts as I see them, and I am going to spin the facts to convince you of the conclusions that I have already independently reached.  Media does the same thing, even though we call them "news" outlets that should be reporting truth that we then interpret for ourselves.

This last week I had a conversation with a good friend about our outlooks on the market in 2011.  He is bullish based on an economic forecast of strengthening job markets and I am bearish based on a weakening housing market. We are both getting our information from the media about these two very different sectors of our macro-economy but ones that have significant impact on our financial futures.  Both are related in certain respects, the higher the wages, and the more people employed, the higher demand for homes, the higher the prices for homes, requiring ever increasing wages to buy the homes.  You can see how those two indicators can spiral each other upwards and if you look at the inverse how they could spiral each other right down the toilet.

So in order to understand his position, I had to take some time to research his side.  At the same time I am going to look at some information that is contrary to his position and something that I think some pundits are neither including nor required to include but the exclusion of such information skews the outlook.

My primary example is a small but growing town here in Washington.  Lynnwood.  Now, Lynnwood has a growing retail market, although some recent tax changes may alter that, but as a typical American town, I will use it as an example.  In September, the city announced to its workforce or nearly 400 that in 2011, nearly 1/4 of its employees could be laid off. Then, this last week it was announced that Lynnwood laid off 24 individuals and 7 open positions would not be filled.  This was done in order to help fill a $20 million dollar budget short fall.

Last month, Olympia announced that Washington state is suffering from a budget shortfall that has ballooned to over $5 billion. That wasn't really news.  Any person that has resided in Washington for the past 4 years could tell you that budget shortfalls have been a part of the last two gubernatorial races.  So, if we go back to September we see notices from DSHS showing cuts of 6.3 percent, mostly through layoffs.  A quote from that news flash is instructive, "Secretary Dreyfus...emphasized that this will not be the end of budget reductions for the Department or the state. 'Our budget staff are already working on further reductions that will be required to balance the 2011-13 Biennial Budget to be developed by the Governor and the Legislature this winter.'" That quote was from when the projected budget shortfall was only $3 billion.

If you will excuse me for extrapolating, but you have a city with a budget shortfall of $20 million, with an "M" cutting 24 jobs.  Now you have a state that has a $5 billion, with a "B."  That is a bigger short fall by a a factor of 250.  So, if the state were able to trim its budget in the same manner as the city, which is quite a logical leap, but bear with me, then the State would cut 6000 jobs.

In January of last year, Microsoft announced it would lay off 5000 but in May it still had some further possible cuts..  At least with those announcements, there was a hint of silver lining in that Microsoft was moving more assets into high growth areas and would be expanding workforce in those profit centers by 2 to 3 thousand.  The State government doesn't have any high growth centers, at least not in the same terms.

In addition to the lagging data from the government, this week's paper had a note in regard to unemployment actually being up in November in most major metropolitan areas despite the claim that retail was making a comeback.  Read the link here.  Private sector jobs showed a vast increase in December, but the data seems to be a statistical anomaly.  In the post, a man is quoted as saying "If we add 200,000 jobs a month, it would still take 42 months" to recover those losses.  Additionally, a Gallup Poll on unemployment and underemployment showed that in actuallity, unemployment and underemployment increased by the end of December and that the report on private sector jobs is tempered substantially by the public sector layoffs.

The problem is that coupled with our mounting personal debt as Americans, an increased number of jobless is only going to speed the process of foreclosure.  In a recent post, it was noted that Americans will shed some $1 Trillion of housing debt this year.  That is in no small part due to lost wages.  These things are connected and both have to be fixed to get us out.

There may be those that say that the recession is over, there is nothing but birds singing and blue skies ahead, but there are heavy indications that there is still quite a bit of stuff to come.  I am not saying it won't get better, I'm just bearish on housing, and I don't believe jobs will overcome that any time soon.

Deleveraging the Housing Teeter-Totter

When I was in school, I hated teeter-totters.  Mainly because I was really small and the big kids would stick me up in the air and not let me down.  Any of you homeowners feeling the same way?  Well, a number of years later while I was studying in college, the teeter-totter came back in the form of leverage, how the use of debt could multiply the financial decisions of companies, for good or bad.  If a deal was good, it was better with leverage, if it was bad, it was worse.  How much better or worse, depended largely on where the fulcrum was placed and the fulcrum was governed by time, interest rates, and percentages of debt.

Last week or maybe two, I took a hiatus from the unpleasant to enjoy the holidays, but now we must all face the facts of the new year, there was an article on how the US economy was going to deleverage, or get rid of leveraging devices, such as loans that have proven to be magnifying the downside.

The article speculated that households would deleverage about $1 Trillion, mostly through foreclosure.  The government and media love to throw out that trillion figure, and they have to because of the size of our economy, but it is nearly impossible to put into perspective.  Most of us have never seen a million dollars in one place but a friend of mine put together a slide show of a man standing next to a pallet of brief cases as tall as the man, each case holding a million dollars.  The final slide, the man isn't even visible, and pallets fill more than a football field of space.  That is a trillion dollars.

My curiosity, in reading the article asked, how many households would have to foreclose to make that number?  Census statistics showed the following amounts for housing prices the last six years before and including the recession:

Average Housing Prices
Period Ending Median Average
Dec-03 $196,000 $253,900
Dec-04 $229,600 $284,300
Dec-05 $238,600 $290,200
Dec-06 $244,700 $301,900
Dec-07 $227,700 $284,400
Dec-08 $229,600 $263,100
Running Average $227,700 $279,633

 If we take the running average of those years as the amount of debt each household took on to purchase the home, assuming 100% financing, then it would take on the low end average, 3,576,112 houses going into foreclosure, and on the high median side, 4,391,744 houses going into foreclosure.

Those number would likely be meaningless to you as well, but if we take the Pacific Northwest consisting of Washington, Oregon, and Idaho and the 2009 housing units and ownership percentages, every homeowner in that tri-state footprint would have to foreclose their homes and we would still not make the trillion dollar mark.

Housing units Ownership Owned
Washington 2,813,372 64.6% 1,817,438
Oregon 1,638,583 64.3% 1,053,609
Idaho 647,502 72.4% 468,791

What this tells me is that we are not on an upswing as many of the trade publications would have us believe.  I believe that it was Mark Twain who said there are three kinds of lies, lies, damned lies, and statistics, and certainly we can manipulate the data or pick and choose which data we are going to look at.  However, if there is still to be over a trillion dollars of houing to be deleveraged and it would take more than every homeowner in three states to go into foreclosure, then we are looking at a lot of people up in the air on the wrong side of the teeter-totter while the bank laughs at us from below.