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| Defective Loans Still A Problem For Citigroup January 20, 2011 Citigroup, the bank that received $45 billion in a government bail out because it was perceived as too big to fail, has a strange way of repaying the favor. Citigroup continued to sell flawed and defective mortgages to Freddie Mac as recent as last year. Fifteen percent of the loans that Citigroup sold to Freddie Mac were not acceptable quality based on a sample of 375 loans from 2009 to 2010. Important documents were missing. A defect rate of 5 percent is acceptable in the industry. The review by Freddie Mac also examined 682 loans from Citigroup that ended in default. About 61% of the loans violated Freddie Mac's quality standards. Last April, Richard Bowen, a former underwriter at Citigroup, testified before the Financial Crisis Inquiry Commission. He said that he discovered in mid-2006 that more than 60 percent of the loans bought by Citigroup from third parties and later resold to Freddie Mac were defective. By 2007 the rate had increased to 80 percent. |
| Wells Fargo Dismisses Foreclosures In Maryland January 20, 2011 Wells Fargo is dismissing several foreclosures. The bank will correct the documents and refile the foreclosure papers. This comes a month before lawyers for Maryland homeowners are set to ask a judge to dismiss foreclosure cases where fraudulent documents were presented to the courts. There is also a class action lawsuit brought by Susan Saidman. Ms. Saidman is seeking to have all foreclosures dismissed where the affidavit was signed by Xee Moua, a Wells Fargo employee. |
| New Foreclosures In California Fall In 4th Qtr 2010 January 26, 2011 Actual losses of homes to foreclosure fell 30.6% when compared to the 4th quarter of 2010. There were 69.799 Notices Of Default filed in the 4th quarter of 2010. But don't let the numbers fool you. Foreclosure in California is still a major problem. Lenders backed off after courts across the nation disallowed foreclosures where it was found that the documents were not accurate. The banks went back to the drawing board and are preparing new documentation. There will be a flood of foreclosures in the second quarter of 2011. |
| Bank Forecloses On Military Families By Mistake January 26, 2011 JP Morgan Chase has done it again. The bank has wrongfully foreclosed on 14 active service military families. An internal audit discovered the mistakes. The audit, which was started a year ago, also showed that the bank overcharged the families thousands of dollars. The Servicemembers Civil Relief Act protects our service men and women while they are away defending our country. The maximum loan rate is set at 6%. In addition, a lender can not foreclose under the standard foreclosure laws. The bank ought to know these facts. The 14 families will have their foreclosures reversed. JP Morgan Chase said that it will also mail checks totaling $2 million to 4,000 military servicemembers that were overcharged on their mortgages. Jonathon Rowles, a marine pilot, says that he is still going forward with his lawsuit against the bank. While on active duty he was harassed with phone calls after hours. This was after he provided proof to the bank that he was on active duty flying missions in South Korea. JP Morgan Chase admitted their mistakes and will be training mortgage specialists to deal with military personnel. |
| Bank of America Sets Up Unit To Handle Loan Modifications February 6,2011 A special unit of Bank of America was set up to process thousands of loan modifications. Legacy Asset Servicing will be responsible for not only servicing the loans that were modified, but also discontinued mortgage products and investor issues, such as the repurchasing of bad loans that were sold to investors. The bulk of the mortgages will be about 1.3 million loans that were obtained via the Countrywide purchase. Hopefully this new division will make the loan modification process run a lot smoother. A second new division will be established to handle healthy mortgages. These are loans that are current and in good standing. To clean up its image, the bank has promised to participate in more consumer events, such as home rescue fairs. These fairs are popular with homeowners facing foreclosure. They offer the bank and the borrower to sit down face to face and work out a solution. |
| Foreclosure Filings Fall 17% February 10, 2011 Foreclosure filings fell 17% in January compared to January last year. Before you get too excited, read between the lines and understand why these numbers were expected. According to RealtyTrac we have seen 3 straight months where the foreclosure filings were less than 300,000. This followed 20 straight months of foreclosure filings above 300,000. In January there were 261,333 houses that received foreclosure notices. The primary reason for the decrease is the fallout from the robo-signing fiasco. Lenders put a halt to foreclosure proceedings in November last year. Thousands of homes were being illegally seized and foreclosed by the banks and lenders. Many courts were tossing out the lenders' claims. I would expect the foreclosure filings to exceed 300,000 in February. Lenders are getting back on track. They are resubmitting documentation to the courts after making the necessary corrections. |
| Changes Coming To Freddie Mac Refinance February 16, 2011 There will be major changes to Freddie Mac backed mortgages on May 1, 2011. So if you are planning on refinancing do it now. There are a few concerns for borrowers. Streamlined refinances will be discontinued. Loan to value was as high as 95%, now this is gone. Purchased mortgages can not be refinanced immediately. You will have to wait 120 days before you can refinance. This means that if you took a mortgage just to close the deal, you have to wait. You can choose your own mortgage lender. If you are nor happy with your current lender you can choose another. However, you will have to qualify using Freddie Mac's Loan Prospector underwriting software. The political issues surrounding the role of Freddie Mac will not change the new rules. |
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| Company Pays Your Mortgage April 10, 2011 You can get your house painted for free, plus get your mortgage paid. Well, what's the catch? The company, Adzookie, will make your house into a billboard. Adzookie is a mobile advertising company and this is one way of promoting its services. So far there have been over 3,000 homeowners applying for this promotion. You need to own your house and it helps your case if you are located on a high traffic street. The contract runs for a minimum of three months, and can be extended to 12 months. |
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| Class Action Lawsuit Filed Against Consumerinfo.com April 12, 2011 Goldman Scarlato & Karon, P.C. has filed a class action lawsuit against Consumerinfo.com claiming that the company sold consumers reports with credit scores that were not used by lenders. The reports are sold on the website "FreeCreditReport.com". The company, a subsidiary of Experian, is accused of giving consumers the impression that lenders will be using the same credit report. This is not the case. Lenders use the FICO. This is the score developed by Fair Isaac Company. In the lending industry the FICO is the standard. If a consumer can get a copy of his FICO, then he can make better decisions regarding his loan application. He pays for and gets a report but it doesn't carry the "punch" of a FICO. |
| Consumer Alert: New Foreclosure Scam April 15,2011 The newest foreclosure scam has started in California and is spreading across the nation. A company advertises for homeowners to join a class action lawsuit. There are promises of reclaiming houses loss to foreclosure, of getting the bank to stop the foreclosure process. Some homeowners are promised principal reduction and even mortgage payment reduction. Homeowners are asked to pay a non-refundable fee upfront in order to join the litigation. The fee ranges from $3,000 to $9,000. The litigation is fake and the homeowners receive nothing for their money. If it sounds too good to be true, run as fast as you can. |
| You Might Need 20% Down To Buy A Home April 17,2011 If a new rule becomes law, homebuyers will require to put down 20% when buying a house in order to get the lowest mortgage rate. The new rule is called the Qualified Residential Mortgage exemption (QRM) and it is being criticized by industry experts. Many say that it will raise interest rates by about 4% for homebuyers who have less than the 20% down. Others believe that potential buyers will need several more years to accumulate this amount of money. Under the QRM proposal minorities, the middle class and first time homebuyers will suffer the most. In the short term this policy will affect house prices. Sales and prices will decrease. However, in the long term it will be business as usual. Fannie Mae, Freddie Mac and FHA are exempt from the proposal. These three GSEs are responsible for about 80% of house sales. |
| Distressed Properties 40% Of Existing Home Sales April 20, 2011 March saw some positive gains for distressed properties. Their large market share brings the price of existing homes downward. Distressed properties are generally discounted by about 25%. As a result of these factors the median price of existing homes dropped to $158,600. This is a decrease of 5.9% from March of 2010. Investors accounted for 22% of sales activity in March. First time buyer are still looking but tight credit is still a problem. |
| Colorado AG Fines Two Mortgage Brokers $2M April 24, 2011 Two mortgage brokers were fined almost $1million each for deceptive advertising and fraudulent loan origination practices. The court found that between January 2004 and June 2007 Leo Shifrin steered potential homeowners into adjustable rate mortgages. The defendants advertised heavily in newspapers and lured borrowers to their offices. The borrowers were not informed of the disclosures regarding the mortgages. Furthermore the borrowers were not made aware of the risks of adjustable rate mortgages. The advertisements featured low teaser rates. These teaser rates lasted about a month or two, not years. The other defendant Jerry Johnson who worked with Mr. Shifrin reached a deal with the Attorney General before the trial. This is the way to handle mortgage fraud. We can only hope that more AGs follow suit. |
| 100% Mortgage Limited Time Offer May 2, 2011 NASA Federal Credit Union is offering 100% financing for a house purchase or a refinance. The bonus of this mortgage product is that mortgage insurance is not required. The offer is good in Maryland, Virginia and the District of Columbia. The house must be the primary residence and the maximum amount is $650,000. This is a unique loan that is not being offered by other lenders. |
| Foreclosures Stopped For Southern Storm Victims May 2, 2011 FHA, HUD and Freddie Mac will give some relief to homeowners in the south who were affected by the recent storms and tornadoes. Homeowners will be given forbearance on their mortgage payments for up to one year. Late fees and penalties will be waived, and Freddie Mac is also asking loan servicers not to report the forbearance on credit reports. HUD will be granting a 90 day moratorium on foreclosures and loans backed by the FHA. President Obama has declared many counties a disaster area. |
| US Government Sues Deutsche Bank For $1B May 4, 2011 Default mortgages are still a concern for investors, banks and governments. The United States has sued Deutsche Bank and subsidiary, MortgageIT, over faulty mortgages. The lawsuit claims that the defendants repeatedly provided false certification to HUD. MortgageIT is alleged to have wrongfully endorsed mortgages to be insured when they were ineligible and did not follow HUD guidelines. To date the FHA has paid out over $386 million in insurance claims on mortgages from MortgageIT. The lawsuit is filed under the False Claims Act and the US government is seeking triple damages and penalties. |
| Citizens Bank Settles Redlining Claim With Government May 6, 2011 The US Justice Department has reached an agreement with Citizens Bank over discriminatory lending practices in the African American community. Citizens Republic Bancorp Inc., (CRBC), a subsidiary of Citizens Bank, and the successor to Republic Bank, allegedly violated the Fair Housing Act and Equal Credit Opportunity Act with its lending in Detroit. CRBC and Citizens bank will invest $1.625 million in a partnership with the city of Detroit. The goal is to further neighborhood stabilization. The program will provide matching grants of up to $5,000 to homeowners to help them renovate the exterior of their homes. Additionally, the bank will make an extra $1.5 million available to African American borrowers in Wayne county. The bank's executives still insist that they did nothing wrong. |
| HUD To Re-Foreclose On Homes In Michigan June 5, 2011 Because of problems with MERS, HUD will be re-foreclosing on thousands of houses in Michigan. In April the Michigan Court of Appeals ruled that MERS does not meet the requirements under state statute to act as the foreclosing agent in non-judicial proceedings. The reason given was that MERS does not have any interest in the mortgage debt and furthermore, MERS is not the servicer of the loan. HUD has informed mortgagees that title insurance companies are no longer underwriting policies for repossessed homes in Michigan that involve MERS and non-judicial proceedings. |
| HAFA Short Sales Rocket To 73% In April June 12, 2011 HAFA is working if we go by the numbers. Servicers completed 1,666 short sales and deeds-in-lieu in April. In March the number was 959 transactions. HAFA has been in existence since April of 2010 and as of April 2011 there were 7,113 transactions that were completed. There are another 7,780 deals in the pipeline according to the Treasury Department. This means that agreements have been reached between the servicers and the homeowners. |
| Closing Costs Up 8.8% July 18, 2011 This came as a surprise...closing costs jumps, as house prices fall, and mortgage rates drop even further. The average closing costs on a $250,000 house purchase, with a 20% down payment, was $4,070. A recent survey by Bankrate found that nationally closing costs increased over the same period last year. New York state again led the nation at $6,183. Texas came in second. Are lenders trying to squeeze homebuyers and pad their bottomlines? Lenders are saying that the new, stricter regulations have driven closing costs up. In other words, the homeowner is paying for the lender to do what the lender should have been doing. Lenders have long been saying that getting a mortgage was going to be more expensive. But you do not have to take whatever is thrown at you. Shop around and negotiate. Make sure you get a Good Faith Estimate from at least four banks and three mortgage brokers. By law they have to give you a GFE when you apply for a mortgage. |
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| MERS Is Out Of The Foreclosure Business July 28,2011 Mortgage Electronic Registration Systems (MERS) has issued a policy update to its members stating that no foreclosure proceedings may be initiated in the name of MERS. Also that no legal documents may be filed in a bankruptcy in its name. The policy change is effective July 22, 2011. Due to the robo-signing fiasco of recent months, MERS was forced to make a change. Many of the foreclosure were dismiss by judges across the country. It was difficult to tell if a homeowner would lose his home or if the judge would rule against the lender. Judges in New York, Kansas and Michigan ruled against MERS. While in California, Massachusetts and Minnesota the verdict was in favor of MERS. Fannie Mae, Freddie Mac and several large servicers have already stopped foreclosures in the name of MERS. |
| NAREB And Wall Street Team Up To Fight Foreclosures August 16, 2011 The National Association Of Real Estate Brokers has joined forces with Wall Street investors to tackle the housing crisis in low-income communities. Homeowner's Assurance Program (HAP) will have $800 million in funding. It will bring foreclosure relief to minority families. The trade group was formed in 1947 by African-American real estate agents and is the oldest minority trade group in the United States. |
| Mortgage Applications Up 10.3% November 9, 2011 Mortgage applications shot up 10.3% this past week. With mortgage rates at record lows, many homeowners took the opportunity to refinance, and new buyers jumped off the fence and bought homes. Refinancing activity accounted for 78.6% of total mortgage applications. The growing tension in Europe over the possibility that many countries will not meet their debt obligations should push interest rates lower in the US. Unemployment at 9.0% is also good news for the housing market. |