Posts Tagged ‘Loan modification’

Bank of America Offers Mods with a Gag Order to Buy Silence

September 24, 2012 Leave a comment

Click hear for the article…..Naked capitalism


Federal Retreat on Bigger Loans Rattles Housing

May 12, 2011 4 comments

Peter DaSilva for The New York Times

A home in Carmel Valley, Calif., priced for sale at $789,500. Homeowners in high-price areas worry that prices could tumble.

MONTEREY, Calif. — By summer’s end, buyers and sellers in some of the country’s most upscale housing markets are slated to lose one their biggest benefactors: the deep pockets of the federal government. In this seaside community of pricey homes, the dread of yet another housing shock is already spreading.


Monterey, Calif., home priced at $820,000. Mortgages in Monterey County will be guaranteed only up to $483,000.»

“We’re looking at more price drops, more foreclosures,” said Rick Del Pozzo, a loan broker. “This snowball that’s been rolling downhill is going to pick up some speed.”

For the last three years, federal agencies have backed new mortgages as large as $729,750 in desirable neighborhoods in high-cost states like California, New York, New Jersey, Connecticut and Massachusetts. Without the government covering the risk of default, many lenders would have refused to make the loans. With the economy in free fall, Congress broadened its traditionally generous support of housing to a substantial degree.

But now Democrats and Republicans agree that the taxpayer should no longer be responsible for homes valued well above the national average, and are about to turn a top slice of the housing market into a testing ground for whether the private mortgage market can once again go it alone. The result, analysts say, will be higher-cost loans and fewer potential buyers for more expensive homes.

Michael S. Barr, a former assistant Treasury secretary, said the federal government’s retrenchment would be painful for many communities. “There’s always going to be a line, and for the person just over it it’s always going to be an arbitrary line,” said Mr. Barr, who teaches at the University of Michigan Law School. “But there is no entitlement to living in a home that costs $750,000.”

As the housing market braces for more trouble, homeowners everywhere have been reduced to hoping things will someday stop getting worse. In some areas, foreclosures are the only thing selling. New home construction is nearly nonexistent. And CoreLogic, a data company, said Tuesday that house prices fell 7.5 percent over the last year.

The federal government last year backed nine out of 10 new mortgages nationwide, and losses from soured loans are still mounting. Fannie Mae, which buys mortgages from lenders and packages them for investors, said last week it needed an additional $6.2 billion in aid, bringing the cost of its rescue to nearly $100 billion.

Getting the government out of the mortgage business, however, is proving much more difficult than doling out new benefits. As regulators prepare to drop the level at which they will guarantee loans — here in Monterey County, the level will drop by a third to $483,000 — buyers and sellers are wondering why they should be punished simply for living in an expensive region.

Sellers worry that the pool of potential buyers will shrink. “I’m glad to see they’re trying to rein in Fannie Mae, but I think I’m being disproportionately penalized,” said Rayn Random, who is trying to sell her house in the hills for $849,000 so she can move to Florida.

Buyers might face less competition in the fall but are likely to see more demands from lenders, including higher credit scores and larger down payments. Steve McNally, a hotel manager from Vancouver, said he had only about 20 percent to put down on a new home in Monterey County.

If a bigger deposit were required, Mr. McNally said, “I’d wait and rent.”

Even those who bought ahead of the changes, scheduled to take effect Sept. 30, worry about the effect on values. Greg Peterson recently purchased a house in Monterey for $700,000. “That doesn’t get you a palace,” said Mr. Peterson, a flight attendant.

He qualified for government insurance, which meant he needed only a small down payment. If that option is not available in the future, he said, “home prices all around me will plummet.”

The National Association of Realtors, 8,000 of whom have gathered in Washington this week for their midyear legislative meeting, is making an extension of the loan guarantees a top lobbying priority.

“Reducing the limits will put more downward pressure on prices,” said the N.A.R. president, Ron Phipps. “I just don’t think it makes a lot of sense.” But he said that in contrast to last year, when a one-year extension of the higher limits sailed through Congress, “there’s more resistance.”

   A Federal Housing Administration spokeswoman declined to comment but pointed to the Obama administration’s position paper on reforming the housing market. “Larger loans for more expensive homes will once again be funded only through the private market,” it declares.

Brokers and agents here in Monterey said terms were much tougher for nonguaranteed loans since lenders were so wary. Borrowers are required to come up with down payments of 30 percent or more while showing greater assets, higher credit ratings and lower debt-to-income ratios.

In the Federal Reserve’s quarterly survey of lenders, released last week, only two of the 53 banks said their credit standards for prime residential mortgages had eased. Another two said they had tightened. The other 49 said their standards were the same — tough.

The Mortgage Bankers Association has opposed letting the limits drop, although a spokesman said its members were studying the issue.

“I don’t want to sugarcoat this,” said Mr. Barr, the former Treasury official. “The housing finance system of the future will be one in which borrowers pay more.”

The loan limits were $417,000 everywhere in the country before the economy swooned in 2008. The new limits will be determined by various formulas, including the median price in the county, but will not fall back to their precrisis levels. In many affected counties, the loan limit will fall about 15 percent, to $625,500.

Monterey County, however, will see a much greater drop. The county is really two housing markets: the farming city of Salinas and the more affluent Monterey and Carmel.

Real estate records show that 462 loans were made in Monterey County between the current limit and the new ceiling since the beginning of 2009, according to the research firm DataQuick. That was only about 1 percent of the loans made in the county. But it was a much higher percentage for Monterey and Carmel — about a quarter of their sales.

Heidi Daunt, with Treehouse Mortgage, said loans too large for a government guarantee currently carried interest rates of at least 6 percent, more than a point higher than government-backed loans.

“That can definitely blow a lot of people out of the water,” Ms. Daunt said.

Dave & David Warner


California Mortgage Defaults Drop Again

April 25, 2011 1 comment

The number of financially distressed California
homeowners who were dragged into the formal foreclosure process declined
again last quarter, the result of turmoil and policy changes within the
mortgage industry as well as shifts in the economy, a real estate
information service reported.

A total of 68,239 Notices of Default (NoDs) were recorded at county
recorders offices during the January-to-March period. That was down 2.2
percent from 69,799 for the prior quarter, and down 15.8 percent from
81,054 in first-quarter 2010, according to San Diego-based DataQuick.

Last quarter’s activity was the lowest since 53,493 NoDs were recorded
in the second quarter of 2007. It was just over half the record 135,431
default notices recorded in the first quarter of 2009.

“Lenders and servicers have put various temporary holds on foreclosure
filings while they work on procedural issues and respond to regulatory
and legal challenges. It’s unclear how much of last quarter’s decline
can be attributed to market factors and strategic decisions, and how
much can be attributed to the formalities of the foreclosure process,”
said John Walsh, DataQuick president.

Most of the loans going into default are from the 2005-2007 period: the
median origination quarter for defaulted loans is still third-quarter
2006. That has been the case for two years, indicating that weak
underwriting standards peaked then.

Thank you , Arnold Nieto

Dave & David Warner


The Foreclosure Report – 2010 Annual Summary

January 19, 2011 Leave a comment

From Foreclosure Radar

Dave & David Warner


The first half of 2010 saw relatively good news for most participants in the foreclosure market. Foreclosure cancellations rose as homeowners saw more short sales and loan modifications approved. Investors quickly flipped their foreclosure purchases for solid profits as buyers hurried to take advantage of tax credits. As the tax credits expired, however, the market began to slow. Foreclosure cancellations also began to drop as the government push for loan modifications waned and short sales slowed with the rest of the housing market. Finally, in the beginning of the third quarter, the robo-signing scandal led to dramatically lower foreclosure sales, including a complete halt by Bank of America for nearly two months.

Foreclosure Starts 2007-2010
For the first time since the foreclosure crisis began, Arizona, California, and Nevada saw a drop in the filing of new foreclosure actions. Oregon and Washington, however, continued to climb, but with much lower percentage increases than the prior 2 years.

Foreclosure Starts represent: Notice of Default filings in CA, NV and OR; Notice of Trustee Sale filings in AZ and WA.

Foreclosure Sales 2007-2010
Foreclosure sales dropped in 2010 for the first time in Arizona and Nevada. California dropped for the second year in a row, while Oregon and Washington both saw increased foreclosure sales.

Foreclosure Sales is based on auction sales either back to the bank or to a 3rd party. Numbers based on auction results except for 2007 to 2009 for states other than CA where we counted the filing of trustees deeds.

State 2007 2008 2009 2010
Arizona # Starts 45,225 109,086 145,423 119,790
% Change n/a +141% +33% -18%
California # Starts 280,095 442,612 504,425 338,999
% Change n/a +58% +14% -33%
Nevada # Starts 38,690 75,814 106,425 86,010
% Change n/a +96% +40% -19%
Oregon # Starts 8,176 14,371 22,302 24,574
% Change n/a +76% +55% +10%
Washington # Starts 14,844 27,966 36,947 42,161
% Change n/a +88% +32% +14%
State 2007 2008 2009 2010
Arizona # Sales 18,775 66,685 94,979 70,588
% Change n/a +255% +42% -26%
California # Sales 96,901 251,544 202,215 189,810
% Change n/a +160% -20% -6%
Nevada # Sales 11,242 37,637 45,420 42,828
% Change n/a +235% 21% -6%
Oregon # Sales 1,809 6,129 12,056 16,781
% Change n/a +239% +97% +39%
Washington # Sales 4,724 11,810 22,699 25,920
% Change n/a +150% +92% +14%

Foreclosure Crisis Milestones

February 2005 Fed Chairman Alan Greenspan tells the US House Financial Services Committes that: “I don’t expect that we will run into anything resembling a collapsing [housing] bubble.”
February 2006 Fed Chairman Ben Bernanke says, “Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise, but not at the pace that they had been rising.”
May 2007 Fed Chairman Ben Bernanke says, “We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.”
July 2008 The Housing Economic Recovery Act is signed into law. Clearly too little, too late.
September 2008 Fannie Mae and Freddie Mac are put into conservatorship by the US Treasury as concerns about their ability to raise capital and debt threaten to disrupt the US housing and financial markets.
September 2008 Treasury Secretary Henry Paulson announces the Troubled Assets Relief Program (TARP). Though in the end troubled assets were largely purchased by the Fed rather than through TARP, it signaled the beginning of significant government intervention into the foreclosure market.
September 2008 CA Senate Bill 1137 goes into affect. While intended to slow foreclosures and increase loan modifications, it accomplished little more than foreclosure delays.
February 2009 The American Recovery and Reinvestment Act offers tax credit for first-time homebuyers, which is later extended to April 2010 and expanded to include repeat buyers. Like cash-for-clunkers it provides short-term stimulus to the housing market.
March 2009 Obama Administration announces “Making Home Affordable” loan modification program (HAMP), creating the most exotic mortgage ever offered, and lawmakers request a voluntary foreclosure moratorium pending implementation.
April 2009 Financial Accounting Standards Board approves mark-to-model for mortgage-backed securities creating incentives for lenders to sit on bad loans rather than foreclose or approve short sales or loan modifications.
May 2009 The “Helping Families Save Their Homes Act of 2009” provides renters impacted by foreclosure with additional protections.
December 2009 Nationwide campaign to push the The Home Affordable Modification Program (HAMP) continues an artificial delay of foreclosures, but ultimately helps only a few.
April 2010 Home Affordable Foreclosure Alternatives (HAFA) promotes short sales and deeds-in-lieu of foreclosure, but has little impact beyond delaying the inevitable.
October 2010 Robo-signing scandal over documentation issues in judicial foreclosure filings leads to nationwide delays in foreclosure sales.

Mortgage Rates – December 16, 2010

December 18, 2010 Leave a comment
30-Year Fixed Rate Mortgages
Average 4.83 4.83 4.82 4.82 4.84 4.82
Fees & Points 0.7 0.6 0.7 0.6 0.7 0.8

Northeast: NY, NJ, PA, DE, MD, DC, VA, WV, ME, NH, VT, MA, RI, CT
Southeast: NC, SC, TN, KY, GA, AL, FL, MS, PR, VI
North Central: OH, IN, IL, MI, WI, MN, IA, ND, SD
Southwest: TX, LA, NM, OK, AR, MO, KS, CO, NE, WY
West: CA, AZ, NV, OR, WA, UT, ID, MT, HI, AK, GU

These numbers are averages from mortgage brokers through out the US. 

From Freddie Mac

Dave & David Warner

Wells Fargo Annual Economic Outlook 2011

December 14, 2010 2 comments


Wells Fargo Annual Economic Outlook 2011

Thank you,  Mike Harper

Dave & David Warner

Weekly Primary Mortgage Rates

December 9, 2010 Leave a comment
December 9, 2010 30-Yr FRM 15-Yr FRM 5/1-Yr ARM 1-Yr ARM
Average Rates 4.61 % 3.96 % 3.60 % 3.27 %
Fees & Points 0.7 0.7 0.6 0.6

From Freddie Mac

Dave & David Warner

Real Estate