February 2010 Entries
Like many things in life, some things are too good to be true. Amy Hoak from the Wall Street Journal (MarketWatch) brings to us a very interesting article about a “double dip” in property values. Several major markets had experienced reasonable gains during the 4th quarter of 2009, only to see the gains wiped out by further price erosion. Ms Hoak reports that, “Nationwide, home values fell 5% in the fourth quarter compared with the fourth quarter a year earlier. Values fell 0.5% from the third quarter of 2009.”
Stan Humphries, Zillow's chief economist, said, “What we saw in...
According to DSNews.com a new study released by First American CoreLogic
Tuesday, more than 11.3 million residential properties were in negative equity
at the end of 2009. That equates to 24 percent of all homes in the United States
with mortgages, up from 23 percent, or 10.7 million homes, at the end of last
year’s third quarter. All told, the nation’s homeowners are a combined $801
billion underwater. First American says an additional 2.3 million mortgages were
approaching negative equity at the end of last year, meaning they had less than
five percent equity. Together, negative equity and near-negative equity...
On April 5, 2010, the U.S. government will implement the Home Affordable
Foreclosure Alternatives Program. Part of the Home Affordable Modification
Program, HAFA helps homeowners who are unable to retain their home under HAMP by
simplifying and streamlining the use of short sales and deeds-in-lieu of
foreclosures. Homeowners must meet certain requirements to participate and
incentive payments are provided to homeowners and servicers. To help Realtors
understand HAFA and its guidelines, NAR has released a brochure about the Home
Affordable Foreclosure Alternatives Program and additional resources online,
including government forms and guidelines, a video explaining the new federal
What is one of the biggest businesses out there in the real estate spectrum? Loan modifications. What real estate business is fraught with fraud? Loan modifications! Paul Elias from the Associated Press reports about a growing trend of “people” that are victimizing homeowners. He focuses on rogue attorneys who are comfortable in taking peoples money without delivering any service.
An important word in my rant is “rogue”. If a home owner wants to do a loan modification, a QUALIFIED attorney is a great place to start. That said, there are many people (attorneys or not) that are scamming people...
The Financial Crimes Enforcement Network (FinCEN), an overseeer of financial
activities for the US Treasury, says it received hundreds of suspicious activity
reports (SARs) regarding foreclosure and modification scams. In the third
quarter of 2009, depository institution filers submitted 15,697 mortgage loan
fraud SARs, a 7.5% increase over the same period in 2008. The primary
suspicious activity surrounding loan modifications deal with occupancy
misrepresentation, social security number discrepancies, and altered or forged
documentation, the government agency said. “Subjects of these reports primarily
have been borrowers, though filers also reported industry insiders as subjects,
including loan officers, underwriters, and purported loan...
For those of you that feel sorry for the poor banks when they accept less than what is owed by approving a short sale, I dare you to click on the link below and watch the video. If after viewing the video you feel the same way, you are a better person than I!
Your fiduciary duty is to the homeowner, not the bank!
Renae Merle from the Washington Post brings us a very interesting article that discusses what lenders are trying to do to stem the avalanche of foreclosures. She discussed some solutions that I have already commented on i.e.. Fannie and Freddie doing rent backs to the home owners after they have been foreclosed on – you remember...the Government can do this but us common folk cant!! The article discusses this program in more detail. What is new is a program that Citi is going to Pilot.
According to the article,...
Two separate studies by John Burns Real Estate Consulting Inc. and Standard &
Poor's Financial Services LLC, both conclude that most efforts to modify loans
with easier terms will delay, not prevent, the loss of homes to foreclosure.
The John Burns study estimates that five million houses and condominiums will go
through foreclosure or related procedures that put them on the market over the
next few years. That would represent the bulk of the estimated 7.7 million
households behind on their mortgage payments. The problem is concentrated in
Arizona, California, Florida and Nevada. The shadow inventory is equivalent to
Federal and mortgage industry officials are increasingly looking for ways to get
distressed borrowers to leave their homes voluntarily, without going through the
expensive foreclosure process or a messy eviction. Citigroup, for instance,
plans to announce a pilot program on Thursday that would allow delinquent
borrowers who don't qualify for or decline mortgage relief the opportunity to
stay in their homes without making payments for up to six months before turning
over the keys, in return for keeping the property in good condition. Other
initiatives have also emerged for borrowers likely to lose their homes. Fannie
Mae and Freddie Mac,...
The Congressional Oversight Panel said in a report that mounting commercial real
estate losses could endanger the banking system and thwart economic recovery. A
total of $1.4 trillion in commercial real estate loans will require refinancing
in the next four years, and more than half of those loans are underwater,
written for properties whose value has dropped like a rock. The expected losses
when loans go bad could hit between $200 billion to $300 billion and threaten
3,000 small and mid-size banks with a disproportionate share of commercial real
estate assets on their books, according to the panel. The report...
Delinquencies on prime jumbo loans continue to climb, and Fitch Ratings says
they could reach 10 percent as early as next month. Loan performance among
high-end mortgages within private residential mortgage-backed securities (RMBS)
showed further weakness in January, as serious delinquencies rose for the 32nd
consecutive month, Fitch said. According to Fitch’s data, overall, prime jumbo
RMBS at least 60 days past due swelled to 9.6 percent in January, up from 9.2
percent in December 2009. The prime sector of the jumbo market was the only one
in which new delinquencies increased from a year ago, Fitch said. Although
prime jumbo delinquencies began to rise in the second...
Real estate website Zillow.com says one of every five U.S. home owners owed more
on their mortgage than their home was worth in the fourth quarter. The
percentage of American single-family homes with mortgages in negative equity
rose to 21.4% in the fourth quarter from 21% in the third quarter, according to
the Zillow Real Estate Market Reports. U.S. home values declined again in the
fourth quarter, as the Zillow Home Value Index fell 5% year-over-year and down
0.5% quarter-over-quarter, to $186,200. It was the 12th consecutive quarter of
year-over-year declines, the reports showed. "The prevalence of markets in or...
According to a report from Barclays Capital, modification rates picked up over
December and January as servicers converted more trials into permanent
modifications under the Home Affordable Modification Program (HAMP). According
to the latest HAMP progress report from the Treasury, servicers provided more
than 66,000 permanent modifications through December. Participating servicers
receive more than $35 billion in total capped incentives, but the program could
reach as high as $50 billion. Modification rates “turned a corner” in October
2009, according to BarCap analysts, congruent with the rise in HAMP permanent
conversion rates. The Treasury recently changed document guidelines for the
With a glut of foreclosures plaguing the nation, the Federal Housing Authority
(FHA) is temporarily removing restrictions on investors who buy and sell homes
within 90 days. "FHA borrowers, because of the restrictions we are now lifting,
have often been shut out from buying affordable properties," FHA Commissioner
David Stevens wrote in a statement last month. "This action will enable our
borrowers, especially first-time buyers, to take advantage of this opportunity."
The FHA is only lifting the ban for one year and there are rules. You can't
flip the property for more than a 20 percent profit without getting two
appraisals in most cases and the transaction...