March 2012 Entries
Craig Karmin and James Hagerty from the Wall Street Journal report on a trend that is spreading across the countryside. Houses with mortgages of $5M or more have seen a dramatic rise in mortgage defaults. People used to make money and could afford these gargantuan money pits but, with job cuts and a struggling economy these properties are going down the tubes, like their lower cost brethren. The article states, “In February alone, 352 homes nationwide in this category were scheduled for foreclosure auction, the final step before a bank acquisition. That is the largest monthly number of these so-called...
Bank of America will make deeper and broader cuts than other
banks, which will allow it to avoid as much as $850 million in
penalties and give more than 200,000 financially strapped
households the opportunity to sharply reduce their mortgage
balances. The side deal is unique to Bank of America, said the
Wall Street Journal, citing a senior administration official. It
added that many of the write-downs will be made on loans
originated by Countrywide Financial Corp, which Bank of America
bought in 2008, and then packaged into securities. Investors in
those securities could then be affected by the side deal. Bank of
America said on Feb. 9 that under...
A calculation by a Brookings Institution economist narrowed down
a pool of underwater homeowners to 500,000 who could qualify for
principal reduction from the $25 billion mortgage settlement.
Using the parameters of the settlement, Ted Gayer found just 5%
of the nation's 11.1 million underwater borrowers could get the
principal reduced on their mortgage, first reported by The
Washington Post. About $10 billion of the settlement, in the form
of credits, will go toward principal write-downs made by the five
banks. Only homeowners delinquent on their mortgages are
eligible. Gayer eliminated others according to underlying
requirements, including Fannie Mae or Freddie Mac loans and homes
not owner-occupied. It's a rough...