January 2010

President's State of the Union Ingores MHA Failure

Posted on Thursday, January 28, 2010

What can you say about our President’s State of the Union address last night? As a real estate professional trying so hard to help so many grappling with the biggest real estate and financial crisis since the Great Depression (and in many ways far bigger than that) its sure is easy to feel left ou...

MHA Mod New Guidance From Treasury

Posted on Thursday, January 28, 2010

"The updated process requires that key documents, including proof of income, be obtained from the borrower before a borrower evaluation can begin. This more robust requirement of upfront documentation will make it easier and quicker to convert trial modifications to permanent modifications and enabl...

MHA Refinance

Posted on Wednesday, January 27, 2010

This program ends June 2010....

Making Home Affordable Q&A

Posted on Wednesday, January 27, 2010

"Feedback from the Frontline; Why Obama's Making Home Affordable plan is not working" As a Florida Supreme Court Certified Mediator I've been mediating foreclosure cases at “crisis ground zero,” Miami, Florida (you'll recall first Miami-Dade and now all judicial circuits in Florida will require l...

More on HAFA

Posted on Wednesday, January 27, 2010

Borrowers who default under a MHA HAMP mod are still eligible for a HAFA short sale or deed in lieu. Supplemental Directive 09 09 provides guidelines for lenders. Servicers can't require a cash contrib, note, or any other contingency for the deficiency. Again, this is only a guidance, but for b...

Commercial Case 85% Success Rate

Posted on Wednesday, January 27, 2010

I recently met with one of the many Florida judges handling foreclosure cases and learned: Commercial filings are going thru the roof. Bu they are seeing 80 to 85 percent success rate in mediation and are thus -happy to order mediation at any stage of case. ...

Insights on Deficiencies from a Florida Attorney

Posted on Wednesday, January 27, 2010

What if the bank won’t release you from the deficiency? This lawyer says on commercial properties do the short sale anyway and deal with the deficiency later if you have to. But if the property is your residence he says don’t agree to a short sale without some kinds of agreement about the deficien...

Short Sale Insights From a Florida Lawyer

Posted on Wednesday, January 27, 2010

At a recent Bar meeting I heard from a Florida residential foreclosure defense attorney who had the following to say about short sales; Don't pay the taxes. Why bother if the lender can deal with it during the process anyway and you’re short on cash? Don't pay the mtg. Many banks are recently ...

Federal Deficit

Posted on Tuesday, January 26, 2010

In 2007, the federal deficit stood at $161 billion, or 1.2 percent of our economy. In 2008 it was $455 billion, or 3.2 percent. In 2009, figuring in the billions spent to pull our economy out of recession and on various bailout efforts, the deficit rocketed to about $1.42 trillion, 9.9 percent of ou...

Stretegic Defaults Commercial Style

Posted on Tuesday, January 26, 2010

"Tishman Speyer and BlackRock withheld their $16.1 million payment from senior mezzanine debt holders. At the time, the two companies said it was a strategic move to try and force the special servicer to restructure the debt. Tishman and BlackRock purchased the complexes from MetLife in 2006 at t...

Home Prices

Posted on Tuesday, January 26, 2010

The latest release from Case Shiller show price down 0.2%. Thats 30% down from the '06 peak and a bit above 5% down from this time last year. But its in line with what we've been predicting, a decline of about another 5 to 10% in prices for 2010. Most of the decline will be seen between now an...

Existing Home Sales, Prices, Inventory

Posted on Tuesday, January 26, 2010

While existing home sales fell 16.7 percent to a seasonally adjusted rate of 5.45 million units in December from 6.54 million units in November, sales remained 15 percent above the 4.74 million-unit level of December 2008. There were 5,156,000 existing-home sales for all of 2009, a 4.9 percent jump ...

Generally Speaking

Posted on Monday, January 25, 2010

If a prposal does not meet this litmus test it will cause more problmes than it solves in the long run; 1. Encourage folks who cant realistically afford their home comfortably to move on and give them the tools - within reason - to do just that. 2. Reward people for living within their means i...

Strategic Defaults; Some Thoughts on Brent White's Paper

Posted on Monday, January 25, 2010

Arizona Assistant Law Prof. Brent White has observed that many borrowers are not walking away and attributes that to several factors; Result of two behavioral economic emotional forces; (a) desire to avoid shame and guilt and (b) exaggerated anxiety over perceived consequences (c) actively cult...

Some Stats and Thoungts on Walking Away

Posted on Monday, January 25, 2010

4. Stats • Negative Equity ? As of June 2009 32% of all US mortgaged homes underwater. ? Expected to reach 48% by Q1 2011. ? 42% drop from peak in some markets. ? Some areas as much as 89% underwater. Miami 48%. • Impacts of Negative Home Equity ? Reduces spending ? Inhibits mobi...

Strategic Defaults

Posted on Monday, January 25, 2010

What’s the problem with strategic residential defaults? • Ethical issues; Presumably shopped for, negotiated and agreed to loan terms. Had opportunity to ask questions, understand (goes to shared responsibility for these mistakes/do we want to hold borrowers responsible for their own choices an...

Commercial v. Residential

Posted on Monday, January 25, 2010

Are commercial borrowers being treated differently as far as work outs and defaults that residential borrower? Example: The partnership that paid a record $5.4 billion for two of New York City's biggest apartment complexes is having money problems. The group led by Tishman Speyer and BlackRock R...

Existing Home Sales Down..But Don't Panic

Posted on Monday, January 25, 2010

We knew this was exactly what would happen. We're past the worst of it. Expect more dips. But don't panic. Last month existing home sales were donw 16.7%. ...

Changes at FHA

Posted on Saturday, January 23, 2010

Once again we're faced with a choice; make easily available mortgage money easily the top priority so folks will borrow, buy homes, absorb excess inventory and help stabilize housing prices. Or make prudent lending standards the top priority at the risk of knowing less folks with qualify. In an ...

The Big Picture Outcome for 2009

Posted on Saturday, January 23, 2010

In the big picture, 2009 can be credited with; Wrapping up a total 33% average home price decline for the US since the bubble burst. Prices bottoming in June '09 and inching up so far each month since. The beginning of a borader economic recovery. BUT Foreclosurses have not slowed. ...

Freddie Mac Guidelines to Servicers for HAMP

Posted on Friday, January 22, 2010

TO: All Freddie Mac Servicers April 21, 2009 SUBJECTS With this Single-Family Seller/Servicer Guide (“Guide”) Bulletin, we are announcing the following changes to the Home Affordable Modification Program (“Program”) requirements: ¦ Providing criteria for determining whether a Borrower, who is cur...

Making Home Affordable Q&A

Posted on Friday, January 22, 2010

HOUSING COUNSELOR FREQUENTLY ASKED QUESTIONS 1. What is the Making Home Affordable (MHA) Program? The Making Home Affordable Program is part of the Obama Administration’s broad, comprehensive strategy to get the economy and the housing market back on track. The key components of the Making Home...

NPA for HAMP clarified

Posted on Friday, January 22, 2010

HOME AFFORDABLE MODIFICATION PROGRAM BASE NET PRESENT VALUE (NPV)MODEL SPECIFICATIONS UPDATED: JUNE 11, 2009 Overview As a part of the Making Home Affordable Program, we are providing standardized guidance and a base net present value (NPV) model described herein that any servicer who participat...

December 8, 2009 Treasury Statement on HAMP

Posted on Friday, January 22, 2010

December 8, 2009 TG-430 Treasury Assistant Secretary for Financial Stability Herbert Allison Written Testimony before the House Financial Services Committee “The Private Sector and Government Response to the Mortgage Foreclosure Crisis” Chairman Frank, Ranking Member Bachus, and members of...

Home Affordable Modification Program Guidelines

Posted on Friday, January 22, 2010

Home Affordable Modification Program Guidelines March 4, 2009 Trial loan modifications consistent with these Guidelines may be offered to homeowners beginning on this date, March 4, 2009, and may be considered for acceptance into the Home Affordable Modification Program upon completion of the tria...

U.S. DEPARTMENT OF THE TREASURY Making Home Affordable Release March 2009

Posted on Friday, January 22, 2010

U.S. DEPARTMENT OF THE TREASURY Washington March 4, 2009 Making Home Affordable Summary of Guidelines Making Home Affordable will offer assistance to as many as 7 to 9 million homeowners, making their mortgages more affordable and helping to prevent the destructive impact of foreclosures on fam...

Miami Begins On-Line Foreclosure Sales

Posted on Friday, January 22, 2010

Miami Dade is now the largest County and the 12th using on-line auctions for its foreclosures. The move is expected to save the county $750,000 annually. with over 110,000 open foreclosure files and an additional 7,000 coming in each month (before the foreclosure crisis, Miami-Dade's court was r...

Legislation Likely for 2010-Appraisers

Posted on Monday, January 18, 2010

Home Valuation Code of Conduct (HVCC). Also incorporate appraisal provisions from the Mortgage Reform and Anti Predatory Lending Act to protect appraiser independence. ...

New FNMA Program Helps Florida Condos

Posted on Monday, January 18, 2010

FNMA will be making an effort to allow additional condo projects in Florida to become FNMA eligible. The “Special Approval” designation may allow more units to qualify for loans and be sold, reducing Floridas huge condo inventory which keeps driving prices down. ...

Possible FNMA Guarantee to Help Retail Sector Get Loans

Posted on Monday, January 18, 2010

Fannie Mae ran an apartment financing program for 20 years. This new idea is along those lines. A developer would go to a FNMA designated underwriter (usually a bank). The bank would then recommend a loan to FNMA. FNMA would guarantee the loan in return for an annual premium paid by the developer...

Some Other Ideas Floating Around

Posted on Monday, January 18, 2010

We’re hearing murmurs of (a) dismantling financial institutions that are too big to fail by imposing a simple asset cap of say $50 or $100 billion in assets under management (or a percentage based on GDP fo some other threshold). And (b) reinstating some form of Glass Steagall to limit proprietary ...

Pending FDIC Fee Hike

Posted on Monday, January 18, 2010

The proposed fee hike would tie the amount financial institutions pay the FDIC in deposit insurance premiums to the way they design their employee compensation structure. Those paying large bonuses to compensate short term profits will pay the most. ...

Pending Legislation to Recover Deficit Increase

Posted on Monday, January 18, 2010

The statute creating TARP requires that by 2013 the president proposed a plan that “recoups from the financial industry an amount equal to the shortfall in order to ensure that the TARP doesn’t add to the deficit or national debt.” President Obama recently proposed a “Bank Tax” essentially becau...

Extended Home Buyer Tax Credit

Posted on Monday, January 18, 2010

Extended Home Buyer Tax Credit First credit motivated 2 million buyers from February to November 2009 (some would have bought anyway). Extended credit expected to motivate another 2.4 million. Effective November 7, 2009. First time buyer credit = $8000 Existing buyer credit - $6500 (new) Requi...

Foreclosures Hit Record High in 2009

Posted on Monday, January 18, 2010

According to RealtyTrac the number hit 3,957,643 on 2,824,674 properties. That’s a 21% increase over 2008 and 120% over 2007. 1 in every 45 US housing units. In Nevada that number is 1 in every 10. Followed by Arizona and Florida and then California. These four states account for more than 50% ...

Home Prices as of November 2009 – Released December 2009

Posted on Monday, January 18, 2010

November 2009 Prices are down 4.3% for the nation compared to November 2008. But this is the smallest decrease in two years leading many to think prices have stabilized in certain areas that avoided the bubble like the Midwest. ...

Principal Write Downs

Posted on Monday, January 18, 2010

A recent fed study shows that servicers who write down principal as opposed ot just lower rates see a much lower re-default rate. Many argue the principal write down is smaller than the loss from re-default. Cutting a payment by 25% by reducing interest reduces defaults by 11% for the first ye...

December 2009 Making Home Affordabel HAMP Mod Stats

Posted on Monday, January 18, 2010

The December 2009 Servicer Performance Report for Making Home Affordable show us some interesting things. • At this point about 89% of eligible mortgage debt is covered by HAMP participating servicers. During Q4 2009 servicers agreeing to participate rose from 63 to 102. Another 2300 lenders se...

INVENTORY AS OF NOVEMBER 2009 – Released December 2009

Posted on Monday, January 18, 2010

Inventory is down to 6.5 months but can be expected to increase, perhaps to around 8 months supply, as foreclosures flood the market and sales slow as the credit ends in June and interest rates increase. ...

November Home Sales Stats – Released December 2009

Posted on Monday, January 18, 2010

Sales in November 2009 were up 44% over November 2008. More than half of the sales were to first time home buyers, probably due to the rush to close under the tax credit before anyone knew it would be extended. 33% of the sales involved distressed properties and 19% were cash deals, more than twic...

Commercial Number Update - Year End 2009

Posted on Monday, January 18, 2010

At small banks with less than $1 billion in assets, commercial mortgages comprise an average of 32.5% of that total. This is 6 times higher than banks with $50 billion or more in assets. As of September, commercial delinquency reached 5.59%, up from 3.51% six months earlier. According to some co...

Pending Home Sales as of January 5, 2010

Posted on Monday, January 18, 2010

Pending Home Sales, a forward looking indicator based on contracts signed in November 2009, fell 16% from October but is still 15.5% higher than November 2008. PHS dropped 25.7% in the NE but is 14.7% up YOY. On the South PHS fell 15% but is 14.7% up YOY. In the West PHS dropped 2.7% but is 21.4...

Florida Mandatory Mediation Process

Posted on Wednesday, January 13, 2010

Administrative Order No. 09-08 established mandatory Homestead mediation in Miami Dade (11th Circuit), referred to as the CHAMP program. In summary the Order provides for appointment of a Mediator as follows; (1) Within 10 days of the order of referral, the parties may agree upon a Stipulation...

How Bailout Attempts Back Fire

Posted on Tuesday, January 05, 2010

Some of the ways our housing has been artificially held up are starting to haunt us... Interest rates have been kept too low for too long FNMA and Freddie have been bailed out one too many times. FHA has been making low downpayment loan for too long. Government has been handing out freeb...

The FDIC Between a Rock and a Hard Place

Posted on Tuesday, January 05, 2010

As of today the FDIC has over a negative $8.2 billion balance sheet. Over 140 banks have been taken over, leaving the agency with around $30 billion is real estate debt it would like to sell, double the amount last year. Many banks, particularly smaller ones have still not written down their lo...

Government Uses “Teaser Rates” Just Like Everyone Else Did

Posted on Tuesday, January 05, 2010

The US has to refinance about $1.6 trillion of maturing debt this coming year. The country wil spend about $400 billion in interest to service our national debt which has about doubled in the last 2 years. This may exceed $700 billion by 2019. $4500 billion annual debt service is more than the en...

The US Deficit

Posted on Tuesday, January 05, 2010

Expect a $1.6 trillion deficit for 2010, over 10% of GDP (some are estimating $2 trillion closer to 15% of GDP). Since 2007 the US balance sheet has tripled. Without including SS or Medi, national debt is over $12 trillion. The spending has a price tag of its own. The US will have to borrow ...

Delinquencies Rise into 2010

Posted on Tuesday, January 05, 2010

Delinquencies Will Mount in 2010; already the number of loans defaulting a more than double the number of foreclosures being started, And a third of foreclosure case are still at the presale stage a year later. What does this mean? There’s a ton of housing inventory coming down the pike in 2010. ...

Why Mods Arent Working

Posted on Tuesday, January 05, 2010

We were originally promised MHA HAMP would save 5 million homes (this was lowered to a promise that 500K applications would be processed by November - no mention of any homes actuallybeing saved). So far about 50K people have recevied permaant mods. Of those, as many as 50% may redefault, making th...

The Idea of Principal Write Downs

Posted on Monday, January 25, 2010

Hate it. Would principal reductions solve the problem to residential strategic defaults? Yes. Clearly if borrowers are walking solely because they are upside down and you make it so that they are no longer upside down, they will no longer walk. But this would cause bigger problems than it s...

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