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Archive for the ‘Uncategorized’ Category

LPS Reports an About-Face in Delinquency and Foreclosure Movement

Wednesday, May 18th, 2011

By: Carrie Bay

Lender Processing Services (LPS) says market data it’s pulled through the end of April reveals an increase in the national mortgage delinquency rate and a drop in the industry’s foreclosure inventory.

Both stats did a complete u-turn from the trajectory they were on the prior month. At March month-end, LPS reported a sharp drop in delinquencies and a smaller, but notable increase in the foreclosure inventory.

Based on performance analysis conducted on its loan-level database of nearly 40 million mortgage loans, LPS says the ratio of mortgages 30 or more days past due but not yet in

foreclosure rose to 7.97 percent in April, an increase of 2.4 percent from March. That follows a 12 percent decline between February and March.

For April, the nation’s foreclosure inventory – which LPS defines as past dues that have been referred to an attorney but have not yet reached the final stage of foreclosure sale – dropped to 4.14 percent, down 1.6 percent from March. Pre-sale foreclosures between February and March had risen 1.4 percent.

Altogether, LPS says there were 6,388,000 mortgages 30 or more days delinquent or in foreclosure as of the end of April. That’s up from 6,333,000 at the end of March.

At April month-end 2,184,000 properties were in the midst of the foreclosure process, and 4,204,000 were at least one payment overdue but not yet referred to a foreclosure attorney. Of the latter, 1,961,000 were 90 or more days delinquent.

According to LPS’ analysis, the states with highest percentage of non-current loans – which combines foreclosures and delinquencies – are Florida, Nevada, Mississippi, New Jersey, and Georgia.

States with the lowest percentage of non-current loans include Montana, Wyoming, Alaska, South Dakota, and North Dakota.

FREE EVENT FOR ARIZONA HOMEOWNERS IN CRISIS

Wednesday, May 4th, 2011

IN-PERSON ADVICE FROM ATTORNEYS AND EXPERTS

–The Consumer Awareness Expo is free but attendance is limited, so register today–

 EVENT INFO:

Saturday May 21, 9:30am-12:30pm

Mesquite Library (4525 E. Paradise Village Parkway N., Phoenix, AZ  85032)

FREE! LIMITED seating! RSVP by May 18th to chicagotitlearizona@gmail.com

The Consumer Awareness Expo will provide homeowners with information about the full spectrum of options available if they are underwater with their mortgage, experiencing financial hardship due to job loss, medical expenses, divorce or other life events. Some of the experts available include:

  • Attorneys from Nagle Law Group and Scottsdale Law Group will assist homeowners with information and options about short sales, foreclosure and bankruptcy options
  • Attorneys from Nelson Law Firm will provide information about tax consequences of short sales or foreclosures on income taxes
  • Real Property Management North Valley will provide information about finding a rental home or apartment, including application information
  • Representatives from Nova Home Loans will be at the event to consult with homeowners who are ready to purchase again and take advantage of these low housing prices
  • Home Affordable Modification Assistance Group will be available to discuss loan modification possibilities
  • Instant Settle Consultants will discuss debt settlement and credit repair options

 “We want to provide consumers with options and answers they can live and move forward with during difficult times,” said event organizer Lisa Capes, Chicago Title Insurance Company. “This event is being held by a group of real estate professionals who are dedicated to educating the public with facts and options for underwater homeowners.”

 This EXPO is FREE to the public and the law firms and agencies are providing their expertise at no charge. Participants must register (by May 18th at http://consumerawarenessexpo.eventbrite.com

Distressed Properties Claim 40% of Existing-Home Sales

Wednesday, April 20th, 2011

By: Carrie Bay

Distressed homes – typically REOs and short sales – accounted for 40 percent of the existing homes sold in March, the National Association of Realtors (NAR) reported Wednesday.

The trade group notes that these properties generally sell at discounts in the vicinity of 20 percent. Their large market share served to dampen the median existing-home price. For all housing types, it came in at $159,600 last month, down 5.9 percent from March 2010.

Overall, sales of previously owned homes rose 3.7 percent last month as the spring buying season began to take hold. NAR described March’s reading as “continuing an uneven recovery,” following the 9.6 drop recorded in February.

Lawrence Yun, NAR’s chief economist, expects the improving sales pattern to continue.

“Existing-home sales have risen in six of the past eight months, so we’re clearly on a recovery path,” he said. “With rising jobs and excellent affordability conditions, we project moderate improvements into 2012, but not every month will show a gain – primarily because some buyers are finding it too difficult to obtain a mortgage.”

“For those fortunate enough to qualify for financing, monthly mortgage payments as a percent of income have been at record lows,” Yun added.

The March numbers put the annual sales rate at 5.10 million in March, up from a revised 4.92 million in February, but below the 5.44 million pace in March 2010.

NAR notes that sales were at elevated levels from March through June of 2010 in response to the federal homebuyer tax credit. Immediately following its expiration, existing-home sales bottomed last July, and been on a slow but fairly steady path ever since.

“Although home sales are coming back without a federal stimulus, sales would be notably stronger if mortgage lending would return to the normal, safe standards that were in place a decade ago – before the loose lending practices that created the unprecedented boom and bust cycle,” Yun said.

He says given that the Federal Housing Administration (FHA) and Veterans Affairs (VA) government-backed loan programs turned a modest profit over to Treasury last year, and have never required a taxpayer bailout, low down payment loans should continue to be made available for consumers who have demonstrated financial responsibility.

A parallel NAR practitioner survey shows first-time buyers purchased 33 percent of homes in March, compared with 34 percent in February. They were 44 percent in March 2010.

All-cash sales were at a record market share of 35 percent last month, up from 33 percent in February and 27 percent in March 2010.

Investors accounted for 22 percent of sales activity in March, up from 19 percent both the month before and a year earlier.

Fannie, Freddie get ‘robo signing’ orders

Thursday, October 14th, 2010
Loan servicers must double-check foreclosure, REO filings
By Inman News, Thursday, October 14, 2010.

Fannie Mae and Freddie Mac’s federal regulator says loan servicers working for the companies must review affidavits filed in foreclosure proceedings before proceeding to judgment or selling foreclosed properties.

Guidance issued by the Federal Housing Finance Agency on Thursday directs Fannie and Freddie to require that all loan servicers working for the companies take steps similar to those already implemented by lenders implicated in the “robo signing” scandal.

Mortgage servicers working for Fannie and Freddie must not only review their foreclosure processes and remediate any problems they find, but recheck affidavits filed in ongoing foreclosure actions and on “real estate owned” (also known as bank-owned or REO) properties in Fannie’s and Freddie’s inventories before those properties can be sold.

The four-point policy framework “envisions an orderly and expeditious resolution of foreclosure process issues,” providing greater certainty to homeowners, lenders and investors, FHFA said in releasing the guidelines.

It’s unclear whether Fannie and Freddie’s marching orders will have much of an impact, since many loan servicers have already implemented similar measures.

At least five loan servicers — Bank of America, GMAC Mortgage, JP Morgan Chase, PNC Financial Services Group Inc. and Litton Loan Servicing — have temporarily suspended or curtailed foreclosure proceedings and sales of foreclosed properties in 23 states where courts have jurisdiction over the foreclosure process.

The loan servicers say they are reviewing their foreclosure procedures in the wake of allegations that employees handling court filings for some of the companies signed affidavits that contained information they had not personally verified.

Bank of America and GMAC Mortgage have expanded their reviews to non-judicial foreclosure states, and Bank of America has temporarily halted foreclosure sales in all 50 states.

So far, Bank of America and other loan servicers say their reviews haven’t turned up evidence that borrowers were foreclosured on improperly.

A Wells Fargo & Co. employee has testified in a Florida lawsuit that she signed hundreds of foreclosure affidavits a day without verifying the information in them, the Wall Street Journal reports. Wells Fargo says it has no plans to initiate a foreclosure moratorium, and that its affidavit procedures and daily auditing “demonstrate that our foreclosure affidavits are accurate.”

In the past, when lawyers for homeowners have fought foreclosures on such procedural grounds, they have mostly succeeded in delaying, rather than stopping, foreclosures.

But the “robo signing” scandal has raised the specter of a new onslaught of lawsuits, slowing the flow of foreclosed properties into REO inventories.

Attorneys general in all 50 states have formed a bipartisan group to investigate affidavits and other documents loan servicers have prepared in foreclosing on homeowners.

Some title insurers are balking at insuring title on foreclosed and REO properties. Bank of America has agreed to provide warranties to the nation’s largest title insurance underwriter, Fidelity National Financial Inc., and other companies are seeking similar assurances from other lenders.

The American Land Title Association, which has been working with FHFA, Fannie Mae, Freddie Mac, lenders and other stakeholders on the issue, said it supports the guidance issued by FHFA to Fannie and Freddie, but continues to look to lenders to provide “appropriate indemnities.”

Administration Officials Reject Idea of National Foreclosure Moratorium

Tuesday, October 12th, 2010

By Carrie Bay:

Evidence of several major servicers mishandling foreclosure paperwork and in some instances, breaking the law in their rush to work through the still-growing backlog of cases has cast a cloud of doubt over the entire industry and servicing procedures across the board.

Consumer advocacy groups and a number of state attorneys general have demanded a nationwide moratorium on foreclosures. But a senior White House official has indicated that the Obama administration will not support an all-out foreclosure freeze.

David Axelrod, one of President Obama’s top advisors, appeared on CBS’ Face the Nation this weekend, and the foreclosure paperwork debacle was Bob Schieffer’s topic of choice.

Axelrod acknowledged that the allegations of faulty foreclosure documentation are a “serious problem” and “thrown a lot of uncertainty into the housing market.”

But he quickly added, “I’m not sure about a national moratorium because there are, in fact, valid foreclosures that probably should go forward and where the documentation and paperwork is proper.”

“We are working closely with these institutions to make sure that they expedite the process of going back and reconstructing these and throwing out those that don’t work,” Axelrod said, noting that the administration’s hope is that the process will “move rapidly and get unwound very, very quickly.”

In an email to the Washington Post, David Stevens, commissioner of the Federal Housing Administration (FHA), echoed Axelrod’s stance.

“We believe freezing foreclosures for all banks in all states, whether we have reason to believe them to be in error or not, is simply not the prudent step to take in this fragile

housing market,” Stevens wrote to the Post. “While we understand the eagerness to make sure that no American is foreclosed upon in error, we must be careful not to over-reach and apply a remedy that will make the underlying problem of foreclosures worse.”

So far, five companies have announced voluntary foreclosure suspensions because of potential deficiencies in the legal paperwork.

GMAC Mortgage was the first to halt foreclosures in 23 judicial states.

JPMorgan Chase and Bank of America followed suit two weeks later. On Friday, BofA announced that it is expanding its moratorium to include all 50 states.

PNC Financial and Goldman Sachs’ Litton Loan Servicing have also called for a stop to foreclosures in certain states.

The servicers contend that any errors made are procedural and have stated that they expect only minor and temporary delays in foreclosure timelines due to the suspensions, but others say the latest developments are sure to disrupt the already tenuous balance of the housing correction.

Mark Zandi, chief economist for Moody’s Analytics, told the Associated Press that the foreclosure paperwork scandal could prolong housing’s slump for at least several more years. A mere month ago, before the documentation mistakes came to light, Zandi was predicting that an upturn would be well under way by this time next year.

The Mortgage Bankers Association (MBA), along with several other industry trade groups, sent a letter to members of Congress on Friday expressing concern over the additional damage a blanket national moratorium would bring.

The letter stated, “It is important to note…that these are document process reviews; in almost all cases there are no factual disputes about whether the mortgage is delinquent, the amount of the arrears or whether foreclosure is proper. In the overwhelming majority of cases, we believe the facts presented to the courts in foreclosure proceedings about the debt amounts and delinquencies have been accurate.”

According to MBA’s letter, “A foreclosure moratorium would not change the ultimate outcome for borrowers impacted by this situation,” but only cause further harm to communities at risk, the unstable housing market, and the fragile economy.

Wells Fargo Puts a Stop to Short Sale Extensions

Friday, October 1st, 2010

By: Carrie Bay

Wells Fargo will no longer delay foreclosure proceedings in hopes that a short sale deal will come through.

According to an American Banker report, the bank has stopped granting extensions for distressed homeowners to complete short sales.

The paper, citing a memo Wells emailed to short sale vendors, said the lender will no longer postpone foreclosure sales for borrowers who do not close on short sales by the date quoted in their approval letter.

The move will allow the bank’s foreclosure proceedings to advance, even if a short sale is already in negotiation. Wells says it changed its policy at the request of investors it services mortgages for, including the GSEs, according to American Banker.

Last month, Fannie Mae announced an initiative to crack down on servicers for letting delinquent loans languish too long without action.

The GSE issued a notice alerting servicers that it is monitoring all delinquent loans in its portfolio and mortgage-backed securities (MBS) pools, and will conduct on-site reviews and assess fines for poor servicer performance when it comes to completing foreclosures in a timely manner.

Housing Market Stumbles

Friday, July 23rd, 2010

by Nick Timiraos and Robbie Whelan
Wednesday, July 21, 2010

Construction slows, inventories build amid weak job growth, tax-credit end.

The housing market, whose collapse pulled the economy into recession in late 2007, is stalling again.

In major markets across the country, home sales are deteriorating, inventories of unsold homes are piling up and builders are scaling back construction plans. The expiration of a federal home-buyers tax credit at the end of April is weighing on the market.

On Tuesday, the U.S. Census Bureau said single-family housing starts in June fell by 0.7%, to a seasonally adjusted annual rate of 454,000. The U.S. started 1.47 million homes in 2006, before the housing bubble popped.

Future construction looks even weaker. Permits for single-family starts fell 3% in June, following big declines in both May and April. “We’re hovering at post-World War II lows,” said Ivy Zelman, president of Zelman & Associates, a research firm.

Economists aren’t singling out one reason for the stalling housing market. A variety of factors have led to flagging confidence, they say, including sluggish labor markets, global economic turmoil and falling stock prices.

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While the housing downturn dragged the economy into a recession nearly three years ago, now it is the economy that is pulling down housing, says economist Patrick Newport at IHS Global Insight. Without sustained job growth, the housing market likely won’t improve. That in turn will ricochet across manufacturing, retail and other trades heavily dependent on home building and consumer spending.

The Wall Street Journal’s quarterly survey of housing-market conditions in 28 major metropolitan areas shows that inventory levels have grown in many markets. But inventory fell in some of the weakest ones, including several Florida markets, Atlanta, and Charlotte, N.C.

At the end of June, inventory was up 33% from year-ago levels in San Diego, and by 19% and 15% in Los Angeles and Orange County, Calif., respectively, according to data compiled by John Burns Real Estate Consulting. Rising inventory can lead to price declines later.

Jeff Gans, a 45-year-old engineer from Baltimore who designs software for car manufacturers, has contemplated buying a house or condo for more than a year. But concerns about job stability have kept him on the sidelines.

Even falling interest rates aren’t enough to whet consumer appetites for housing. Last week, the average rate on a 30-year fixed-rate mortgage was quoted at 4.57%, according to Freddie Mac, the lowest since its survey began in 1971. But demand for home-purchase mortgages sits near 14-year lows, according to the Mortgage Bankers Association, down 44% over the past two months.

The government last fall extended tax credits worth up to $8,000 to home buyers who signed contracts by April 30, causing sales to surge early this year. Those buyers had until June 30 to close their sales until Congress, concerned that the backlog of sales wouldn’t close in time, extended the deadline through September.

Analysts long expected the withdrawal of a federal tax credit, which had juiced sales, to lead to a slower-than-usual summer.

“It’s the magnitude that’s been the issue,” says Douglas Duncan, chief economist at Fannie Mae. “The drop-off in activity has surpassed expectations.”

Reports should show that completed transactions of home sales held up through June. But newly signed contracts in May and June have plunged.

To be sure, some housing markets show signs of healing. Home-sales activity in New York, Washington, D.C., and parts of California continue to improve. But other markets, including Tampa, Fla., and Chicago, face rising foreclosures and weak job growth.

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Low mortgage rates and falling prices have made homes more affordable in many markets than at any time in the past decade. But those affordability gains have been offset for many buyers by tighter lending standards, particularly for “jumbo” loans that are too large for government backing. Banks are requiring down payments of 20% and more and strong credit scores because they must hold jumbo loans in their portfolios.

More broadly, the housing market faces two big problems: too many homes and falling demand. More than seven million borrowers are 30 days or more past due on their mortgage payments or in some stage of foreclosure. Rising foreclosures will keep pressure on prices as banks put more homes on the market.

Last month, nearly 39,000 borrowers received government-backed loan modifications, but more than 90,000 borrowers fell out of the program, the Obama administration said on Tuesday.

Moreover, the pool of potential buyers remains constrained by the unprecedented number of homeowners who are underwater, or who owe more than their homes are worth.

That’s making it particularly hard for traditional “trade up” homeowners like Maria Billis to pull the trigger on a home purchase. Ms. Billis can’t sell her townhouse in Boynton Beach, Fla., because its value has fallen by a quarter. That puts it below the $160,000 that she owes the bank.

The 31-year-old human resources consultant, who married last month and wants to start a family, found a half-dozen homes in her price range but doesn’t want to sell her current home for less than the amount owed. She has considered buying the new home and renting the townhouse, but concedes, “It’s a big risk.”

Mortgage-finance giants Fannie Mae and Freddie Mac also are starting to push more repossessed homes onto the market. The companies owned 164,000 homes at the end of March, up 80% from a year ago.

Another reason inventory is rising: “Unrealistic sellers have flooded the market” after reports of bidding wars and home-price increases earlier in the year, says Steven Thomas, president of Altera Real Estate, a brokerage in Orange County. The amount of time that homes there have sat on the market there has swelled to 3.78 months, up from 2.35 months in April.

“The sellers think the market’s coming back. They’ve tacked on an extra 5 to 10 to 15%. The buyers aren’t going for it,” says Jim Klinge, a real-estate agent in Carlsbad, Calif. Over the next six months, “it’s going to feel like a double-dip because sellers are going to have to lower their prices.”

Not all sellers will take that step. Jerry Anderson has listed his four-bedroom home in Dana Point, Calif., on and off the market for the last two years. He’s cut the price to $1.25 million, down from $1.75 million, but hasn’t had any offers on the home, which has three fireplaces and ocean views.

Mr. Anderson, who bought the home in 1987, says he’ll take it off the market in December if it doesn’t sell rather than cut the price.

Matt Carney listed his Moreno Valley, Calif., home for $337,000 in February, and lowered the price on Tuesday for the third time, to $297,000. He says he can’t go any lower because he owes $274,000 on the home and doesn’t want to dip into savings to pay for transaction costs.

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