March 2010

Timelines for Recovering From Negative Equity

Posted on Tuesday, March 30, 2010

Experts are predicting that underwater homeowners will not begin to recover 2015-2016 or as long as 2020 or later for some of the harder hit. Home prices are expected to increase at 3% a year for the next decade. Specifically; Washington D.C. 2015 Atlanta, Georgia; Dallas, Texas; and River...

The Administrations Own Recap of What They've Done So Far to Help Homeowners...

Posted on Monday, March 29, 2010

Background on Housing Program Initiatives to Date The Administration has taken a broad set of actions to stabilize the housing market and help American homeowners. These efforts are having an impact on our housing markets – we are seeing signs of stabilization. Looking back to over a year ago - st...

Foreclosures Exepected to Increase

Posted on Monday, March 29, 2010

ForeclosuresAs of Q4 2009 about 14% of mortgages were non-performing. On top of that, 1/2 of the loans modified in Q1 2009 were delinquent by Q4. As of Q4 2009, home mortgage performance in general had declined for 7th quarters in a row. On the flip side, as of Q4 2009 86.4% of mortgages were ...

HAMP and FHA Enhancements

Posted on Monday, March 29, 2010

Details direct from Makinghomeaffordable.gov Making Home Affordable Program Enhancements to Offer More Help for Homeowners Today the Administration announced enhancements to the Home Affordable Modification Program (HAMP) to provide additional resources for struggling homeowners. These changes ...

Some Bullet Point Thoughts on Reform...

Posted on Thursday, March 25, 2010

Geithner Government Intent clear from conservatorship v. receivership and Christmas Eve “blank check.” No change until mod to late 2011. Want to put distance between new model and crisis Not included in budget U.S. House Committee on Financial Services; sub-committee Capital Markets, Insurance a...

What's the Administartion Going to Do With the GSEs?

Posted on Thursday, March 25, 2010

After reform, will the GSEs will exist in the same form as they did in the past? Will private gains be subsidized by public losses? Capital and underwriting standards be appropriate? Consumer protection be strengthened? Excessive risk-taking will be restrained? The two probably won't be aboli...

v. Bank of America For Not Doing Mods as Promised

Posted on Thursday, March 25, 2010

Homeowners in Washington State are suing Bank of America, alleging the nation’s largest lender is “intentionally” and “systematically” thwarting and ignoring borrowers’ requests to make reasonable mortgage modifications that would prevent homes from being foreclosed. The case, filed in a Seattle ...

Washington Decide HAMP May Not Be Working...I HAVE to Say it...DUH!!!!

Posted on Thursday, March 25, 2010

The Home Affordable Modification Program (HAMP) will fall far short of the administration’s promise to prevent foreclosure for 3 to 4 million homeowners, according to one federal watchdog. Neil Barofsky, special inspector general for the Troubled Asset Relief Program, says HAMP’s “disappointing res...

Principal Reductions? Bank of America National Homeownership Retention Program (NHRP)

Posted on Thursday, March 25, 2010

The NHRP was launched in 2008 to provide assistance to Countrywide borrowers who financed their home with certain subprime and pay-option adjustable rate mortgages. Several enhancements are now being made to the program, including the introduction of an earned principal forgiveness approach to modi...

Bank of America National Homeownership Retention Program

Posted on Thursday, March 25, 2010

Direct from the horse's mouth... Program Overview • This home retention program underscores Bank of America’s commitment to provide customers the resources and necessary help to sustain homeownership. • It is estimated that the loan modification program will result in permanent payment relief t...

The Industry Asks Itself Some Good...Tough Questions...

Posted on Thursday, March 25, 2010

Fraud in the mortgage originations world is what happens when opportunity and motivation intersect. It is far more productive to limit the opportunity to commit fraud than it is to address motivations . Are we using compensation in the form of bonuses to motivate quality decisions? • Have we ...

Protecting Tenants at Foreclosure Act (PTFA).

Posted on Thursday, March 25, 2010

The Protecting Tenants at Foreclosure Act (PTFA) was passed last May. Frustrated with problmes getting modificatins and short sale approvals, many don't realize just how many things lendrs have been grappling with off of our radar screen. Since the passage of PTFA servicers and lenders have...

1 in 200 Loans

Posted on Wednesday, March 24, 2010

Nationwide, one in every 200 residential loans funded last year, totaling $14 billion, involved fraud, according to First American CoreLogic. States where the highest number of fraudulent loans were found included California, Florida, Georgia, North Carolina, and South Carolina. Based on First...

Big Drops and Still Sliding

Posted on Wednesday, March 24, 2010

Home prices in extremely overvalued U.S. metropolitan areas declined nearly 37 percent on average between 2005, the peak of the real estate bubble, and the fourth quarter 2009 when prices stabilized, according to the House Prices in America update released by IHS Global Insight Friday. At the pea...

HAFA Update

Posted on Wednesday, March 24, 2010

On March 12, 2010, the Treasury Department posted Frequently Asked Questions (FAQs) and two revised forms for the Home Affordable Foreclosure Alternatives Program (HAFA). HAFA takes effect on April 5, 2010, but servicers may implement early (apparently none have done so, to date). 1. Of particular ...

Reform

Posted on Monday, March 22, 2010

House Financial Service Committee Republican goals; GOALS AND PRINCIPLES FOR GSE REFORM March 19, 2010 Goals ? Reestablish a housing finance market that has long-term stability in which private capital is the primary source of mortgage financing. ? Restore stability and liquidity to the seco...

More Paper...proposed "Restoring American Financial Stability Act of 2010"

Posted on Tuesday, March 16, 2010

Here is a link to a PDF of Sen. Dodd new 1,336-page version of the proposed "Restoring American Financial Stability Act of 2010," announced this afternoon. http://banking.senate.gov/public/_files/ChairmansMark31510AYO10306_xmlFinancialReformLegislationBill.pdf ...

Dodd's Bill

Posted on Tuesday, March 16, 2010

The long-awaited reform bill calls for the creation of a Consumer Financial Protection Bureau – a watchdog group that Dodd calls “new” and “independent,” although it will be housed within and funded by the Federal Reserve. This agency would have the sole responsibility of protecting American consume...

Bundled Sales to Investors

Posted on Tuesday, March 16, 2010

Another problematical component are current REOs held by banks and at what rate will banks dispose of those properties. Experts state that many of the REOs in high-demand areas (such as California) are being "bundled" in hundreds and sold to investors. However, these transactions are not reflected i...

Pending Home Sales

Posted on Tuesday, March 16, 2010

The Pending Home Sales Index based on contracts signed in January, fell 7.6% from December, but remains 12.3% higher than January 2009. The Northeast fell 8.7% in January but is 20.5% higher than January 2009. The Midwest dropped 8.9% but is 11.8% above a year ago. The South slipped 2.1%...

Option ARM Resets Expected

Posted on Tuesday, March 16, 2010

"Option ARMs" resets are anticipated to occur between the second half of 2010 and 2012. The largest share of Option ARMs (60%)is concentrated in California. Other areas with high concentration of Option ARMs are those states also reporting the highest foreclosure rates: Florida, Nevada, and Ari...

Shadow Inventory

Posted on Tuesday, March 16, 2010

Estimates of shadow inventory have ranged anywhere between 1.7 million properties to 7 million. The reason for this wide range of estimates stems largely from varying perceptions of what exactly shadow inventory means. Those whose definition of shadow inventory refers to seriously delinquent loans (...

FHA Reforms

Posted on Monday, March 15, 2010

Best guesstimates are FHA would insure 300,000 fewer home loans per year if the mandatory down payment was raised from 3.5% to 5% as is being suggested. But the real question is how many of THOSE loans would default anyway? In other words, how many GOOD loans would not be done, how many QUALIFIED b...

Raising the Borrowing Bar; FHA and FNMA Requirements

Posted on Monday, March 15, 2010

The big tug of war now is between easing standards to get more folks in the market and absorb inventory verses raising the standards to where we all know they should be to reduce the chnace that we're only creating new loans that will default. I'm all for what's best for our country and each of us ...

FHA Reforms/Increasing Down Payment Requirements

Posted on Monday, March 15, 2010

The policy changes already proposed by the agency include raising minimum downpayments to 10% or borrowers with FICO scores below 580, but the increase would affect only those homebuyers that the agency has found are a greater default risk. Borrowers with FICO scores above 580 would still be eligibl...

Requiring Banks to Write Down or Write off Second Mortgages

Posted on Monday, March 15, 2010

This alone could be enouhg to push many lenders over the edge. Accounting rules allow them to carry seconds at original face value, obviously high compared to our current reality. Writing them down could wreck havoc on lender balance sheets. Fannie Mae and Freddie Mac or other investors in mortg...

Homeowner Associations Fight Back

Posted on Monday, March 15, 2010

Condominium and home owners associations desperate for money are experimenting with a tactic called “reverse foreclosure” to force banks to pay association fees. The process works like this: When a borrower stops paying the mortgage, banks often delay taking the property into foreclosure. When ba...

Q$ 2009 Delinquency Rates

Posted on Monday, March 15, 2010

During the last three months of 2009 commercial loans didnt do so bad...relatively speaking; Commercial and industrial loans had delinquency rates of 4.39% Commercial mortgages 5.06%. Construction loans are another story at 18.56% SF mortgages, already in the news for a long time now, ...

HAMP Feb 2010 Report Card

Posted on Monday, March 15, 2010

Even with a 45% increase since January, only 170,000 folks have seen permanent modifications. Even Treasury's estimate that 1.8 million of the borrowers behind on their payments are eligible for the program is frustrating given the original promise to help 3 to 4 million. February's HAMP report...

Second Lien Fall out

Posted on Monday, March 15, 2010

Based on their fourth quarter 2009 filings with the Securities and Exchange Commission (SEC),4 banks own more than $400 billion of the total $1 trillion second lien mortgage market. BofA $149 billion Citi $54 billion JPMorgan $101 billion Wells Fargo $115 billion. 1/2 of non-agency homeow...

Extention of Leasehold Improvement Depreciation/FIRPAT Reform

Posted on Monday, March 15, 2010

The Senate approved a $140 billion measure that includes $31 billion in tax "extenders," including a provisions to extend 15-year leasehold improvement depreciation and brownfields expensing. 15-year depreciation for leasehold, or tenant, improvements will help free up capital for job creation...

FDIC Loss Share Agreements

Posted on Friday, March 12, 2010

Prevent banks from diong REO or workout deals that would benefit the borrower or guarantorsd, which makes sense. But one potential impact of this is that a guarnator may be willing do buy the property at a short sale for a higher price than an unrelated buyer is willing to pay, but the bank cant do...

Investors

Posted on Friday, March 12, 2010

Private equity investors at the moment seem to be looking for deals with a 1 year to 18 month hold period and 25% IRR. Banks on the other hand are looking for investor slooking for deals with a 5 year hold period and 15% IRR. Hence there are not to many deals getting done...

Sale of Property By Receiver

Posted on Friday, March 12, 2010

An interested dilemma that has come out of out current situation arises when a property owner - borrower "disappears" (ie does not repond to service, can't be served, cant be found). In many cases this is because the borrower has decided to simply walk away. But as you can imagine there may be othe...

CULTURAL ENTITLEMENT, CREDIT,

Posted on Thursday, March 11, 2010

Welcome to our foreclosure nation. This may be the first time you've realized you're a resident of the nation, even if you never personality bought into the current real estate, mortgage, and financial Market mess, and that can be a bit of a shock. Understanding what a foreclosure nation is is easie...

From Realty Trac...

Posted on Thursday, March 11, 2010

RealtyTrac just released its February 2010 U.S. Foreclosure Market Report™, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 308,524 U.S. properties during the month, a decrease of 2 percent from the previous month but still 6 percent ab...

Mortgage Insurance Companies v. Banks

Posted on Thursday, March 11, 2010

Godzilla v. the Blob? We all know banks are struggling with loan buy backs, delinquencies, defaults and foreclosure, government interventions including reserve requirements, stress tests, regulators, executive comp restrictions, and pressure to lend. But you may not be aware of the on-going batt...

Most Done By Mortgage Brokers?

Posted on Thursday, March 11, 2010

According to the Center for Responsible Lending, according to the FBI, Most Mortgage Fraud Comes from Lenders, Not Borrowers. Homeowners and home buyers are responsible for only a small share of mortgage-related fraud -- about 80% is perpetrated by brokers or other professionals. This point and many...

HAFA

Posted on Wednesday, March 10, 2010

2.5 million people were foreclosed last year. Even more are expected to be foreclosed this year – 3 million. The pattern is expected to continue in 2011. These numbers do not include another 7 million loans currently delinquent but not yet in foreclosure, 28 million expected to be underwate...

FDIC Loss Share Agreements

Posted on Tuesday, March 09, 2010

...Allow 7 years for bank taking over failed institution to sell commercail REO and 12 year for residential. Reimburse for 80% of loss. This is going to last a long time.......

Strategic Defaults; Why Do Companies Get to Walk But Homeowners Dont?

Posted on Tuesday, March 09, 2010

Correct companies make decisions like this based for the most part on the financial aspect. Homowners tend to be more emotional decision makers since their home is often more than just an "investment." But incorrect in that companies don't get to just "walk away." If there are guarantors on the lo...

Thoughts on HAFA Short Sale and Deed in Lieu Program

Posted on Monday, March 08, 2010

This is the Home Affordable Foreclosure Alternative program (HAFA) Actually part of the original Making Home Affordable program Obama announced last February (3 parts to that program – HAMP modifications, HARP refinances, HAFA short sales and deeds in lieu). 2010 will be the year of the short sale ...

HARP Receives a One-Year Extension

Posted on Monday, March 08, 2010

The federal government's Home Affordable Refinance Program, aimed at borrowers with little or no equity in their homes, will now expire in June of 2011. ...

Move-Up Tax Credit Having Little Impact

Posted on Monday, March 08, 2010

Industry experts are criticizing the $6,500 move-up tax credit for having little influence on sales as January to February numbers remain stagnant. ...

Buy Backs

Posted on Monday, March 08, 2010

So far Babk of America has been asked to buyer back $1.5 billion compared to $448 million is 2008. JP Morgan $1.7 billion compared to 2008 $1.1 million. And Wells Fargo $1.3 billion compared to 2008 $426 million. Clearly buy backs will have a big impact this year on bank health. The total buy ...

Acting Ways and Means Chairman Continues to Press for Carried Interest Changes

Posted on Monday, March 08, 2010

Under current law, the carried interests of general partners in real estate partnerships are taxed at capital gains rates (currently 15%). In 2008 and 2009, the House passed legislation that changed the rule so that carried interests in real estate partnerships (and many other investment arrangeme...

National Community Stabilization Trust

Posted on Thursday, March 04, 2010

About the National Community Stabilization Trust The National Community Stabilization Trust has established a framework to manage, rehabilitate and deliver Real Estate Owned (REO) properties to new owners and renters. At the heart of this framework is collaboration. The Stabilization Trust works...

RESPA

Posted on Wednesday, March 03, 2010

Here's an interesting dual standard. Washington spent the last two years revising the Real Estate Settlement Procedure Act to, among other things, require mortgage brokers and title companies/closing agents, to disclose some additional information, but mostly disclose the same old stuff differently...

Principal Write Downs

Posted on Wednesday, March 03, 2010

For the many people asking about principal write downs and how often those are being given... Q3 2009 13% of mortgage modifications Q2 2009 10% Q1 2009 3% ...

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