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| Louisiana Gets $16.7M To Help Foreclosures October 8, 2010 Homeowners facing the threat of losing their homes will get some much needed help from HUD. The money is part of a $1 billion emergency fund that was made law in July. The program gives $16.7M to Louisiana and lasts 24 months. Homeowners can begin sending applications at the end of the year. They have to prove some kind of hardship, such as a job loss or a long term medical condition. |
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| HUD To Provide Housing To 550 Homeless Veterans October 2, 2010 U.S. Housing and Urban Development will provide $4.3 million to local housing authorities in 19 states to provide permanent housing for 550 homeless veterans. This funding is aimed at ending long-term chronic homelessness by 2015. HUD will allocate housing vouchers to local public housing agencies which work closely with local Veterans Affairs Medical Centers. Homeless veterans will be selected based on many factors, including the proximity of a local Veterans Affairs Medical Center and income levels of the veterans. |
| Countrywide Bankruptcy Possible November 3, 2010 Bank of America might consider placing Countrywide into bankruptcy protection. Mortgages from Countrywide seem to be a constant problem. Lawsuits are piling up and the threat of buying back bad loans appears to be real. Getting rid of this problem child might be the only solution. Countrywide originated 86% of the loans that are 60 days late or worse. Here's a rough idea of some of the critical numbers. Put-backs could cost Bank of America $130 billion. The lost in market capitalization for Bank of America is $20 billion. Bank of America paid $20 billion for Countrywide. It looks like a bad investment. So the only reason not to pursue bankruptcy is the damage to the reputation of Bank of America. |
| Banks Slow In Buying Back Loans September 15, 2010 Fannie and Freddie have tried to send more than $11 billion in bad loans back to the banks. However the banks are resisting. One third of the requests have been outstanding for more than three months. Investors with questionable loans have a right to force the lenders to repurchase these loans. If there is proof of fraudulent statements on the application, it's a slamdunk. The bank has to buy back the loan. |
| 3 Mortgage Lenders Dominate October 8, 2010 The housing crisis has caused many mortgage lenders to go out of business. However, the landscape remains the same. The top 3 lenders control about 58% of the market. The latest figures for the second quarter of 2010 stacked up as follows: Wells Fargo 25.38% B of A 22.65% Chase 10.30% This scenario shows that the consumer doesn't have much choice when arranging a mortgage. The future looks better for the big three. With tighter controls and underwriting the small players will bite the dust. |
| Xmas Gift From Freddie And Fannie: No Foreclosure Evictions During Xmas Holidays! December 2, 2010 Freddie Mac and Fannie Mae will again suspend foreclosure evictions during the holiday season. From December 20th to January 3rd homeowners facing foreclosures with Freddie Mac or Fannie Mae mortgages can eat, drink and be merry...foreclosure can wait! "No family should face the prospect of being evicted during the holiday season" said Fannie Mae CEO Michael Williams. Freddie Mac owns approximately 25 percent of all single family residential mortgages in the U.S. However, Freddie has a good tract record in terms of defaults. There are only 10 percent of seriously delinquent mortgages in Freddie's portfolio. Citigroup is planning to spread this goodwill as well. Citigroup will suspend evictions from December 17th to January 18th. This is a good idea and more major lenders should follow. It takes over 400 days to foreclose on a Freddie Mac deal. The other lenders and banks are not much better. |
| Sellers Cut Prices But No Buyers July 14, 2010 We know that the tax credit brought a flood of buyers into the housing market. But now what can we do for act two? According to Trulia.com as of July 1st, 24% of sellers cut the listing price of their houses. And yet, there has been no activity. No buyers, period. Rates can't get much lower. So what is the problem? I think that people are scared to make that leap of faith into homeownership. There is still job uncertainty. According to ADP the private sector added 13,000 non-farm workers in June, bring the total to 106,917,000 workers. This is still not enough jobs. We have millions of young people graduating from colleges and universities. What choices do they have? One choice is to stay in school and add to their already high student loans. If you live in Nevada where the unemployment rate is around 14% or California (12.4%) it is a really gut wrenching decision to buy a house. It's a different story if you live in North Dakota where the jobless rate sits around 3.6%. The solution might be another first time homebuyer's tax credit. And this time make it only for the purchase of foreclosure properties. And give the purchasers one full year to get the deal done. The amount should be $6,000. |
| Foreclosures increased in 75% of the top U.S. cities July 29, 2010 Foreclosures continue to plague the housing market. The Midyear 2010 Metropolitan Foreclosure Market Report, published by RealtyTrac, shows that 154 of the 206 U.S. metropolitan areas with a population of 200,000 or more posted a year over year increase in foreclosure activity. As if to add insult to injury, bank repossessions increased 5% in the second quarter of 2010. The hardest hit cities have not changed much. Las Vegas had the highest rate at 6.6% of homes receiving foreclosure notices. The cities with the highest foreclosure rates tend to match the cities with the highest unemployment figures. Unemployment in Las Vegas stands at 14.4%. The national average is 9.6%. When we look at the top 20 metropolitan cities for foreclosure, eight were in California and nine were in Florida. A decline in manufacturing and construction jobs in these major cities has made the housing recovery almost impossible. |
| Purchase Applications Increased 03.10.2010 The weekly application survey by the Mortgage Bankers Association (MBA) showed that for the week ending March 5, 2010, the Market Composite Index increased 0.5% from the previous week. This index measures the loan application volume in the US. The same survey indicated that the Refinance Index decreased 1.5% from the week before. The refinance share of applications is at its lowest since October 2009 when it was at 66.1%. The latest figures had it at 67.2%. ARMs were up in the survey to 5.1% of the total applications. This was the highest ARM share since November 2009. The MBA is the national association representing the real estate finance industry. |
| Drop In Foreclosures 03.11.2010 A report issued by RealtyTrac, showed that foreclosures in February declined, when compared to January. This is the second straight month that we saw a drop in foreclosures. There were 308,524 properties that received a foreclosure notice. According to the report Nevada had the highest foreclosure rate for the 38th consecutive month. One in every 102 properties in the state received a foreclosure notice. Foreclosures seem to be slowing, however the housing crisis is not in recovery yet. Homeowners who choose strategic default as their option are on the increase. What choices do they have? If you have lost 40% equity in your house, do you want to wait for another 10 to 15 years to get back to where you were 20 years ago? Strategic defaults will possibly be the next tidal wave to hit the US housing market. |
| 5 States Get $600m From Hardest Hit Fund...Is Your State Included? August 4, 2010 The Obama Administration has shifted $600 from the HAMP budget to the Hardest Hit Fund. This fund will help distressed homeowners in 5 states with foreclosure mitigation. The states are Ohio, North Carolina, South Carolina, Oregon and Rhode Island. Unemployment in these states hovered around 12 percent. In February the Federal Government gave $1.5 billion to 5 other States where house prices had declined drastically. Those states were California, Nevada, Arizona, Florida and Michigan. This money was badly needed in these states as the foreclosure rates, which are around 14%, continue to devastate families. Some states, such as Ohio, will help unemployed workers keep current with their mortgage payments beyond the national program limits of 3 months. Ohio will receive $172 million. Other states will use the money in short sales programs to help homeowners avoid the stigma of foreclosure. The money can also be used to reduce the principal of the mortgage. |
| National Flood Insurance Program Extended temporarily The U.S. Senate voted to extend the National Flood Insurance Program until September 30th. Timing couldn't have been better. Hurricane Alex is wreaking havoc along the Gulf Coast. This is a huge relief to residents in flood prone locations. The legislation was passed unanimously and simply has to get the President's signature. It would be retroactive to June 1st. |
| Purchase Applications Increased 03.10.2010 The weekly application survey by the Mortgage Bankers Association (MBA) showed that for the week ending March 5, 2010, the Market Composite Index increased 0.5% from the previous week. This index measures the loan application volume in the US. The same survey indicated that the Refinance Index decreased 1.5% from the week before. The refinance share of applications is at its lowest since October 2009 when it was at 66.1%. The latest figures had it at 67.2%. ARMs were up in the survey to 5.1% of the total applications. This was the highest ARM share since November 2009. The MBA is the national association representing the real estate finance industry. |
| Unemployed Borrowers Get Help August 11, 2010 So many mortgage programs to fix the housing crisis, when will we get ONE that does the complete, total job? There will be $1 billion going to unemployed homeowners to help them pay their mortgages. The program complements the Hardest Hit Fund, which is currently at $4 billion. The program offers a loan of $50,000 for 2 years and zero percent interest. |
| Housing supply at 12.5 months. Why build more? August 27, 2010 July supply of existing homes stood at 12.5 months worth, or 3.98 million houses. In other words it would take over a full year to sell every house on the market without having to build one single house. This is alarming news. The record number for homes for sales was 4.58 million in July 2008. This level of unsold inventory puts downward pressure on house prices. |
| Home Loan Delinquencies Rise July 7, 2010 According to Lender Processing Services there are currently more than 7.3 million loans in some stage of delinquency or REO. The delinquency rate in May increased to 9.2%. The report also showed that it is taking longer for banks to evict delinquent homeowners. It is now at an all time high of 449 days. This leads to an increased number of 'shadow inventory' houses. What does all this mean for someone looking to buy a house? Look for a good foreclosure house and make an offer. Rates are in your favor. |
| Tax Credit Extended Until Sept 30th President Obama has won another victory for homeowners. They have until September 30th to take advantage of the first time homebuyers tax credit. The U.S. House of Representatives approved the plan to give homebuyers more time to get their closings completed. This is a relief for thousands of buyers who had contracts signed by the April 30 deadline. Industry experts had said all along that more time was required due to the backlog of paperwork at the lenders and also at the closing agents. |
| IRS and Homebuyer Tax Credit...What a mess? September 10, 2010 The IRS may wrongly ask taxpayers to repay the Homebuyer Tax Credit. If you took advantage of this $8,000 gift from our government, make sure you do not pay it back by mistake. At issue is the closing date. The IRS has registered, by error, the closing date for about 60,000 buyers as 2008. It should have been 2009. Taxpayer accounts were not properly coded to show that they purchased their homes in 2009. Some were not coded at all. Officials at the IRS sight the several amendments and extensions to the program as the reason why the dates were mixed up. Originally, Congress created the program in 2008 as a tax free loan of $7.500 to be repaid over 15 years. In 2009 this was changed to a $8,000 tax credit. If you get a notice from the IRS asking for payment check your records before writing a check. |
| Refinancing Home Volume 81% Of All Mortgage Applications August 18, 2010 This was fueled by a surge in refinancing activity. However, purchase application remain the lowest in over a decade. Refinance applications were up 17.1%. You would think that all those who can refinance, had done so by now. But there are still a large number of homeowners sitting on the fence and waiting for rates to drop even further. I believe that the 30 year fixed rate will go as low as 3.99% by the end of 2010. There have to be some stimulus to move the real estate inventory that accumulated over the last 4 years. Another $8,000 from Washington is out of the question. So lower rates will have to be the savior. |
| Are Mortgage Brokers Needed? Not Really. October 6, 2010 Many major lenders including Bank of America and JP Morgan Chase have stopped taking business from mortgage brokers. This leaves Wells Fargo as the only major bank dealing with mortgage brokers. Loans originated by brokers were 50% more likely to be delinquent than those originated by the banks. Many consumer advocates are of the opinion that borrowers will have fewer choices when looking for a mortgage. And even when they get a mortgage the rates will be much higher. |
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| Housing Starts at 4 Month High September 21, 2010 The housing market has started to stabilize if we believe the recent numbers. In August, housing starts rose 10.5% to a seasonally adjusted annual rate of 598,000 units. Even with this good news, homebuilder confidence remain at a 18-month low in September. High unemployment and an oversupply of housing is still pulling the sector downwards. |
| Home Ownership Remains Low Home ownership in America has remained low due to rising foreclosures and a weak demand for housing. The Census Bureau said that home ownership stood at 66.9% in the third quarter. This figure is unchanged from the previous quarter. The home ownership rate hit a high of 69% during the housing boom in 2004. The rate has been gradually since then. |
| HUD Inspector General probes mortgage companies with significant claim rates: Subpoenas were served to the corporate offices of 15 mortgage companies demanding documents and data related to loans which resulted in claims paid out by the FHA mortgage insurance fund. The point was emphasized that no was found with the companies. The goal of the investigation is to determine why so many loans failed, and why they failed so early in the life of the mortgage. The origination and underwriting stages of the mortgages will be examined very carefully. This probe is a new type of approach where HUD is focused on corporate offices rather that individual branch offices. Inspector General Donohue stated that each loan on this list will be thoroughly examined, and once it is determined why the loans failed, there would be further review and remedial action taken. We can expect a clear message from HUD to the mortgage lenders community that HUD is poised to take action against bad performers. List of the 15 mortgage companies under probe: First Tennesee Bank N.A., Memphis, TN Alethes LLC, Lakeway,TX Security Atlantic Mortgage Co., Edison, NJ Pine State Mortgage Corporation, Atlanta, GA Birmingham Bancorp Mortgage Corporation, West Bloomfield, MI Alacrity Financial Services, LLC, Southlake, TX Assurity Financial Services, LLC, Englewood, CO D and R Mortgage Corporation, Farmington, MI Webster Bank, Chestire, CT Mac-Clair Mortgage Corporation, Flint, MI Americare Investment Group Inc., Arlington, TX 1st Advantage Mortgage, Lombard, IL American Sterling Bank, Independence, MO Sterling National Mortgage Company, Great Neck, NY Dell Franklin Financial LLC, Columbia, MD |
| Refinance Mortgage Volume Drops 3.1% September 8, 2010 Refinance activity was carrying the housing market for the last 2 years. However, we had a dip last week. The refinance share of mortgages was 81.9% last week compared to 82.9% the week before. Applications to buy a house rose 6.3% last week. Record low rates was responsible for this surge. Can we build on this enthusiasm? I doubt it. Overall loan demand is still weak, decreasing 1.5% from the earlier week. Many experts believe that we have another 18 months before the housing sector returns to good health. Purchase activity is about 39% below its year ago level. Homebuyers are watching the sitting at 9.6%, not many buyers are ready to jump on the bandwagon. |
| New Mortgage Rules Approved By Senate July 16, 2010 The financial reform bill was passed yesterday by the U.S. Senate. The bill was previously approved by the House. The bill will give consumers and investors extra protection. Part of the bill will establish a consumer financial protection agency with authority over mortgages and credit cards. The bill will eliminate "liar loans". Borrowers will have to fully document their incomes before a mortgage loan can be issued. In addition, a $1 billion fund will be established to provide low-interest loans to unemployed homeowners with good credit. This program will help avoid foreclosures among homeowners in this group. The cherry on this bill is a simplified mortgage loan disclosure form. Such a form is long overdue. And finally, the bill requires lenders to provide a copy of the borrower's credit score to the borrower free of charge. |
| Foreclosures Set Record In September October 14, 2010 The banks foreclosed on 102,134 houses in September. There were a total of 347,420 foreclosure filings for the month. To understand the gravity of the situation, banks took over about 100,000 homes in 2005. This was just before the housing crisis took hold. Banking experts say that this amount of foreclosures will come to a trickle because of the foreclosure mess. The states that have the most foreclosures are Nevada, Arizona, Florida, California and Idaho. |
| Fannie Mae Gets Tough With Defaulters Homeowners who simply walk away from their mortgages will be punished. Fannie Fannie Mae will increase penalties for borrowers Fannie Mae will increase penalties for borrowers who simply walk away from their mortgages. Fannie Mae would like to see more borrowers work with their lender and loan servicers. If you can pay the mortgage and refuses to do so, then you will be ineligible for a Fannie Mae mortgage for a period of seven years. Fannie Mae will also seek legal action to recover some of the outstanding mortgage balances in jurisdictions that allow deficiency judgments. If a homeowner works with the lender and there is no solution and ends up losing the house, he or she will be eligible for a Fannie Mae mortgage in about 2 to 3 years. Fannie Mae had to say something to deter homeowners who are underwater with their mortgages. Strategic defaults are increasing. The question is "will Fannie Mae be around in 7 years?". The company is on a crumbling foundation |
| Inmates File Fraudulent Tax Credit Claims The $8,000 first time home buyer tax credit was designed to boost the housing market and more importantly, to help Americans buy their first home. So, how is it that inmates, behind bars, in prison, were able to receive checks? Apparently the cons found loopholes in the system and took advantage of the situation. A report prepared by a Treasury Inspector General, estimated that 1,295 prisoners filed fraudulent claims. The claims totaled about $9.1 million. More than 2.6 million home buyers were able to benefits from tax credit program. However, if one criminal benefited from the program, it's one to many. The IRS is taking steps to recover the money, and hopefully gather some information on just how this scam was done. The report also discovered that the IRS approved several claims that were filed on the same house. Initially, in the early days of the program,the IRS did not require documentation to prove that a person actually purchased a house. In credit to the IRS over 400,000 questionable claims were denied. The savings to the American taxpayers was more than $4 billion. According to the National Association of Realtors (NAR) an estimated 44% of buyers would not have closed their transactions without this tax credit. |
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| HARP Extended To June 2012 HARP (Home Affordable Refinance Program) has been extended for one more year. The program was scheduled to finish June 30, 2011. Fannie Mae and Freddie Mac will continue to insure borrowers who are underwater on their mortgages. A great benefit for the borrowers is that no additional private Mortgage Insurance (PMI) will be needed. HARP has enabled over 623,000 homeowners to refinance their mortgage. In 2009 there were 190,180 refinances completed by HARP. The use of HARP more than tripled in 2010. The program allows refinancing up to 125% of the market value of the property. The majority of loans closed to date are around 105% loan to value. |
| Refinance Demand Up January 20, 2011 The Mortgage Bankers Association released a survey giving us a look at how the mortgage market is performing. The refinance sector seem to be recovering slowly. The refinance index increased by 7.7% from the previous week. This was the third consecutive week that we saw an increase in refinance applications. |
| Mortgage Rates Hit New 2011 Lows August 4, 2011 Weak job numbers have pushed mortgage rates even lower. The national average for a 30 year fixed stands at 4.39%. While the 15 year fixed is at a respectable 3.54%. If you are comfortable with an ARM, the rate is 3.18%. For borrowers who qualify for FHA or VA loans, you can negotiate 4.25% from most lenders. The economy grew 1.3% in the second quarter of the year. The third quarter estimates are not that good. So we can expect rates to remain low for another quarter. These numbers are dismal. However, housing seems to be picking up speed. CoreLogic reported that the National Home Price Index rose for the third consecutive month in June. |