By: Carrie Bay 08/18/2010

The industry has completed about 975,000 permanent loan modifications so far in 2010, according to estimates released this week by the HOPE NOW Alliance.

Of those, just over 331,000 have been processed under the umbrella of the federal government’s Home Affordable Modification Program (HAMP), while nearly 644,000 have been restructured using servicers’ own proprietary mod programs.

HOPE NOW explained that proprietary modifications follow HAMP mods in the sequence of foreclosure prevention options. When a homeowner does not qualify for the federal program, mortgage servicers determine their eligibility for a proprietary loan modification that may help them keep the home.

The latest data from the Treasury provides details on what happens to borrowers that are not accepted into HAMP.

Based on information from the eight largest HAMP participants, 45 percent of those that don’t make it into a preliminary HAMP trial receive an alternative modification from the servicer; 2.4 percent lose their home through a pre-foreclosure short sale; just over 10 percent are pushed through to foreclosure; and nearly 3 percent file for bankruptcy.

An article in Wednesday’s Wall Street Journal discusses how some distressed borrowers are finding help through unorthodox channels – such as so-called ‘vulture’ investment funds – when they aren’t able to secure a modification through their original servicer.

The Five Star Institute’s CEO Ed Delgado offered an explanation to the WSJ’s James Hagerty as to why some borrowers are receiving the assistance they need to avoid foreclosure and others are getting lost in the pipeline.

“There are obvious inconsistencies in treatment [of borrowers] depending on who owns and services the loan,” Delgado told Hagerty. To some extent, he says, “it’s the luck of the draw.”

According to HOPE NOW’s report, servicers have initiated more than 1.2 million foreclosures so far this year, and completed foreclosure sales on 583,000 homes.

The Alliance’s data, though, shows that servicers slowed the pace of foreclosures in June. Foreclosure starts dropped 7 percent compared to the previous month, and foreclosure sales were down 9 percent.

©2010 DS News. All Rights Reserved.

 
 

Home Affordable Foreclosure Alternatives (HAFA) Program

Many homeowners may feel that they can no longer afford their home, but want to avoid the negative effects of foreclosure. The Home Affordable Foreclosure Alternatives (HAFA) Program offers homeowners, their mortgage servicers, and investors an incentive for completing a short sale or deed-in-lieu of foreclosure. With these options, under HAFA, a homeowner leaves their home to transition to more affordable housing and ...

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Phoenix City info on preventing and handling foreclosure issues- Tom Simplot speaking...



For complete information from the city of Phoenix on foreclosures go to:

City of Phoenix - Foreclosure Information

“Look, we are going through the toughest time economically since the Great Depression, and it’s going to be tough,” Obama said. He reiterated that his program will save or create 2.5 million jobs and will work to spur an early rebound and long-term investments in a stronger economic foundation.<< MORE >>

Fed, Central Banks Cut Key Rates

In an unusual coordinated move, the Federal Reserve and other major central banks from around the world slashed interest rates Wednesday to keep an escalating financial crisis from becoming a global economic meltdown.

The Fed cut its key rate from 2 percent to 1.5 percent. In Europe, which also has been hard hit by the financial crisis, the Bank of England reduced its rate by half a point to 4.5 percent, and the European Central Bank sliced its rate by half a point to 3.75 percent.

The central banks of China, Canada, Sweden, and Switzerland also cut rates. The Bank of Japan said it strongly supported the actions.

"The recent intensification of the financial crisis has augmented the downside risks to growth," the Fed said in explaining the coordinated action, the latest in a series of bold moves intended to spur lending and revive the global economy.

The Fed's action will reduce borrowing costs almost immediately for U.S. bank customers whose home equity and other floating-rate loans are tied to the prime interest rate. Bank of America, Wells Fargo, and other banks cut their prime rate by half a point to 4.5 percent after the Fed announcement.

White House spokesman Tony Fratto welcomed the cooperation among the Fed and other countries' central banks to battle the crisis. "It's important and helpful that central banks are working in a coordinated way to deal with stress in the financial system," Fratto said.

Source: Associated Press, Jeannine Aversa (10/8/08)

Greenspan: Housing Stabilizing Soon

Former Federal Reserve Chair Alan Greenspan in an interview with the Wall Street Journal this week says he expects U.S. home prices to stabilize in the first half of 2009.

"Stable home prices will clarify the level of equity in homes, the ultimate collateral support for much of the financial world's mortgage-backed securities. We won't really know the market value of the asset side of the banking system's balance sheet – and hence banks' capital – until then," he said.

Greenspan had a one-word description for the government’s response to Fannie Mae and Freddie Mac’s problems – “Bad.”

“[Congress] should have wiped out the shareholders, nationalized the institutions with legislation that they are to be reconstituted – with necessary taxpayer support to make them financially viable – as five or 10 individual privately held units," which the government would eventually auction off to private investors, he said.

Source: The Wall Street Journal, David Wessel (08/13/2008)

 

The "American Housing Rescue and Foreclosure Prevention Act of 2008" The "American Housing Rescue and Foreclosure Prevention Act of 2008" (H.R. 3221) was signed by President Bush on July 30, 2008. This measure provides mechanisms to help the troubled housing market as well as tighten lending practices and reform financial institutions.
New Homebuyer Tax Credit - For qualifying home purchases after April 11, 2008 and before July 1, 2009, the Act provides eligible first-time homebuyers a refundable tax credit equal to the lesser of 10% of the purchase price of a principal residence or $7,500 ($3,750 for married individuals filing separately). The credit phases out for individual taxpayers with modified adjusted gross income between $75,000 and $95,000 ($150,000-$170,000 for joint filers) for the year of the purchase. A taxpayer is considered a first-time homebuyer if he (or spouse, if married) had no ownership interest in a principal residence during the 3 year period before the purchase of the home to which the credit applies.

Reduced Principal Residence Exclusion for Non-qualified Use Periods - For sales after December 31, 2008, the principal residence exclusion will not apply to the extent gain is allocable to non-qualified use. Non-qualified use includes a period during which the residence is not used as a principal residence by the taxpayer or spouse. In general, the seller will be required to reduce the exclusion amount by a ratio the numerator of which is the period of non-qualified use and the denominator of which is the period the property was owned. Certain periods of non-qualified use are not counted including any period before January 1, 2009, any non-qualified use arising after a period of qualified use, and certain temporary absences. This new rule will further limit the ability of an investor/owner to convert an investment property into a principal residence and qualify for the full Section 121 exclusion.
Government Sponsored Enterprise (GSE) Reform – This provision creates an independent regulator to oversee the GSEs and increases conforming loan limits to the greater of $417,000 or 115% local area median home price (capped at $625,500). The increased loan limits will be applicable to loans originated after December 31, 2008.
Federal Housing Administration (FHA) Reform – Increases permanent FHA loan limits to the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlines processing for FHA condos; reforms the Home Equity Conversion Mortgage (HECM) program and the FHA manufactured housing program. The down payment requirement on FHA loans will go up to 3.5% (from 3%). The effective date is immediate upon enactment, but the new loan limits will be effective on December 31, 2008.
FHA Foreclosure Rescue – Develops a refinance program for homebuyers with problematic subprime loans. Lenders who elect to participate will write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. This program is effective on October 1, 2008.
Seller-Funded Down Payment Assistance – This codifies an existing FHA proposal to prohibit the use of down payment assistance programs funded by those who have a financial interest in the sale; does not prohibit other assistance programs provided by non-profits funded by other sources, churches, employers, or family members. This prohibition is effective on October 1, 2008.
Veterans Affairs (VA) Loan Limits – Temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.
Risk-Based Pricing – Puts a one year moratorium on the Federal Housing Authority using risk-based pricing. This provision is effective from October 1, 2008 through September 30, 2009.
GSE Stabilization – Authorizes the Treasury to, make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae will not fail.
Mortgage Revenue Bond Authority – Authorizes $10 billion in mortgage revenue bonds to refinance subprime mortgages.
National Affordable Housing Trust Fund – Develops a Trust Fund funded by a percentage of profits from the GSEs. In its first years, the Trust Fund would cover costs of defaulted loans in FHA foreclosure program. In later years, the Trust Fund will be used for the development of affordable housing.
Community Development Block Grant (CDBG) Funding – Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes.
Low Income Housing Tax Credit – Changes the Low Income Housing Tax Credit program to make it more efficient.
Loan Originator Requirements – Strengthens the existing state-run nationwide mortgage originator licensing and registration system and requires a parallel HUD system for states that fail to participate. Federal bank regulators will establish a parallel registration system for FDIC-insured banks. The purpose is to prevent fraud and require minimum licensing and education requirements.
These are highlights of portions of the "American Housing Rescue and Foreclosure Prevention Act of 2008." To view the entire text of H.R. 3221, click here: H.R. 3221

RISMEDIA, August 5, 2008-At the top of the most frequently asked questions’ list is, “How will we know when the market has ‘bottomed out’ and we should buy a home?”

Historically, two major indicators that a market has bottomed out are: a decline in the number of listings and an increase in listing and sold prices. Obviously the key here is making your move at the right time-which would be right before these two items begin to manifest in the market.

Based on sales data provided by MLSs, it appears that we are beginning to realize a slight decline in listing volume. I say “appears” because with the factors affecting the market today-and the foreseeable future-this may be a seasonal issue or being caused by any number of things.

Tracking the listing volume over the next several months will provide additional information regarding this question. In regard to sold prices, this is more difficult. Real estate-owned property or property in some stage of the foreclosure process has been driving the price point for real estate for some time now.

With a significant volume of lending institution-owned property on the market selling at what historically, could be viewed as discounted prices, we do not anticipate seeing an increase in sales prices in the near future.

With sales showing increases compared to last year in most areas and declines in listing volume, it would appear that the market is slowly changing from the buyer’s market we have experienced for the past several years.

A large listing inventory remains, however, and problems in the job sector-coupled with rising fuel costs and the overall economic state in the country-will undoubtedly prolong the market conditions we are currently experiencing.

During this time, we are also seeing a plethora of innovations and new ideas coming forward. We all need to do something that differentiates us from our competition. New services and products have continued to be introduced over the past few years, only to fail shortly thereafter or morph into something entirely different.

However, a point to keep in mind is that self respect and common sense should remain at the top of everyone’s list. This has been-and remains to be-the basis of business success.

Walt Baczkowski is president of the Metropolitan Consolidated Association of REALTORS®.

To contact him, please e-mail walt@mcaronline.com.

Freddie’s Got to Sell some Debt!

Washington D.C.

In a stunning resurgence of government intervention, the Treasury Department on Saturday, took the unusual step of ensuring that 3 billion worth of securities were going to be sold as previously planned this week.  An unusual act, this being another occasion where Uncle Sam demonstrates willingness to prop up the seriously ill, wayward child… this lender to the lenders, and his older half sister Fannie Mae.   

Treasury department officials were working the telephones Saturday to make sure that Freddie Mac one of the nation’s two troubled mortgage giants will be able to sell three billion of its securities Monday in a previously scheduled sale and has now become a crucial test of investor confidence.

As a backup plan officials were also heard to be in the ready, if come this week, investor confidence is so low as to make the sale unsuccessful, Freddie’s rich Uncle himself  would step up and buy them.   Another plan will allow New York’s Reserve bank buy them and resell the money thru private brokers, or even ask private firms to buy the debt while giving assurances that Uncle Sam (that’s you BTW LOL) will back them up.  Who’s running this joint anyway?  Oh yeah it will be up to George Bush if these benchmarks of Western finance should actually fail.  It will be for him to step in then pump in bunches o billions, take direct control of, and (hopefully) restructure and appropriately regulate to prevent such a catastrophe as the one we are in.