Daily Real Estate News |
Tuesday, May 29, 2012
The short-sale process is expected to get shorter starting June 15.
New guidelines issued under the Federal Housing Finance Agency will
require Fannie Mae and Freddie Mac to give home buyers of short sales
notice of their final decision within 60 days. The new guidelines also
will require the mortgage giants to respond to initial short-sale
requests within 30 days of receiving an offer from a potential buyer.
The speedier process is expected to be a boost to the housing market,
Michael McHugh, president of the Empire State Mortgage Bankers
Association, told the New York Times. Home buyers and sellers often have
to wait months before they receive a decision from a lender on an offer
for a short sale. Some deals fall apart just from the long wait alone.
Short sales have been increasing in recent months, as many lenders
find them more appealing than foreclosures, which can be much more
costly and take longer to remove from their books.
Short sales now outpace foreclosure sales in many parts of the
country. Short sales represent more than 14 percent of existing-home
sales, according to CoreLogic housing data from March, the most recent
month available.
McHugh says that a faster short-sale process may be particularly
helpful in speeding the recovery in judicial states, where foreclosures
must go through the courts before they are approved. For example, in New
York, judicial foreclosures can take a year or longer to be approved.
Now short sales may be viewed by defaulting home owners as more of an
option in avoiding foreclosure.
“There should be a significant improvement in the turnaround,” McHugh
said regarding housing markets with judicial foreclosure processes.
Source: “Speeding Up Short Sales,” The New York Times (May 24, 2012)
Tuesday, May 29, 2012
Thursday, May 10, 2012
Mortgage Giant Offers Another Sign of Stabilizing Market
Daily Real Estate News |
Thursday, May 10, 2012
Fannie Mae, which backs the most loans in the country, announced that it would not need taxpayer aid to cover losses for the first time since the federal government took control over the mortgage giant in 2008.
Fannie posted a profit in the first quarter of the year, reporting a net income of $2.7 billion compared to a $6.5 billion loss they reported in the first quarter of 2011.
“We expect our financial results for 2012 to be significantly better than 2011,” says Susan McFarland, Fannie Mae’s chief financial officer. “As our serious delinquency rate declines and home prices stabilize, we expect to reduce our reserves, which combined with revenue from our high-quality new book of business, will drive our future results.”
Several analysts say there are signs of the housing market stabilizing: The decline in home prices is slowing, more Americans are buying homes than a year ago, and housing starts have climbed in the last year.
Freddie Mac, also a government-sponsored enterprise and mortgage giant, recently reported a profit as well — a $577 million quarterly net income for the first quarter.
Source: “Fannie Mae Profit Signals a Stabilizing Housing Market,” The New York Times (May 9, 2012)
Fannie Mae, which backs the most loans in the country, announced that it would not need taxpayer aid to cover losses for the first time since the federal government took control over the mortgage giant in 2008.
Fannie posted a profit in the first quarter of the year, reporting a net income of $2.7 billion compared to a $6.5 billion loss they reported in the first quarter of 2011.
“We expect our financial results for 2012 to be significantly better than 2011,” says Susan McFarland, Fannie Mae’s chief financial officer. “As our serious delinquency rate declines and home prices stabilize, we expect to reduce our reserves, which combined with revenue from our high-quality new book of business, will drive our future results.”
Several analysts say there are signs of the housing market stabilizing: The decline in home prices is slowing, more Americans are buying homes than a year ago, and housing starts have climbed in the last year.
Freddie Mac, also a government-sponsored enterprise and mortgage giant, recently reported a profit as well — a $577 million quarterly net income for the first quarter.
Source: “Fannie Mae Profit Signals a Stabilizing Housing Market,” The New York Times (May 9, 2012)
Tuesday, May 8, 2012
B of A Starts Writing Off Borrowers Mortgage Debt
More than 200,000 underwater home
owners with mortgages through Bank of America may be eligible to have a
reduction in the amount they owe on their loan, which could possibly
trim their monthly payments by up to 35 percent.
Bank of America has sent letters to home owners who may be eligible to take part in a program to write-off a portion of underwater home owners’ mortgage principal, reducing it by, on average, $150,000 each.
The bank’s move stems from the $25 billion settlement, which it and four other of the nation’s largest lenders reached earlier this year with federal and state officials over past foreclosure mishandlings. Bank of America agreed to reduce some home owners’ mortgage principles as part of the settlement.
Home owners eligible for the principal write-offs must be “underwater” (owing more on their mortgage than their property is currently worth), have a loan owned or serviced by Bank of America, and be at least 60 days behind on their mortgage payments as of the end of January. In order for the mortgage reductions to be made permanent, home owners must make at least three on-time payments.
“To the extent principal reduction and other modification tools help us turn mortgages headed for possible foreclosure into long-term performing loans, it will be positive for home owners, mortgage investors and communities,” says Ron Sturzenegger, a legacy asset servicing executive.
Source: “Bank of America Starts Mortgage Reduction Effort,” The New York Times (May 7, 2012) and Bank of America
Bank of America has sent letters to home owners who may be eligible to take part in a program to write-off a portion of underwater home owners’ mortgage principal, reducing it by, on average, $150,000 each.
The bank’s move stems from the $25 billion settlement, which it and four other of the nation’s largest lenders reached earlier this year with federal and state officials over past foreclosure mishandlings. Bank of America agreed to reduce some home owners’ mortgage principles as part of the settlement.
Home owners eligible for the principal write-offs must be “underwater” (owing more on their mortgage than their property is currently worth), have a loan owned or serviced by Bank of America, and be at least 60 days behind on their mortgage payments as of the end of January. In order for the mortgage reductions to be made permanent, home owners must make at least three on-time payments.
“To the extent principal reduction and other modification tools help us turn mortgages headed for possible foreclosure into long-term performing loans, it will be positive for home owners, mortgage investors and communities,” says Ron Sturzenegger, a legacy asset servicing executive.
Source: “Bank of America Starts Mortgage Reduction Effort,” The New York Times (May 7, 2012) and Bank of America
Thursday, April 26, 2012
Costco Sells Mortgages to Shoppers
Add to your shopping list: Get a mortgage.
Costco shoppers will now find that they not only can buy their groceries in bulk at the warehouse retailer, but they can also shop for a mortgage too.
Costco announced that it will offer a full-service mortgage lending program on its Web site with First Choice Bank and 10 other lenders. The site gathers quotes from various lenders.
The warehouse retailer has been testing out offering mortgages for a year in some of its locations. Its lending partners have issued more than 10,000 mortgages to Costco members so far.
"I went in to buy some bottled water, big bags of chips, cereal, and some Nutri-Grain bars that I eat on my route," one Georgia shopper told CNNMoney. "I saw a home loan brochure on my way out and picked it up."
The shopper said he went onto the Costco site and was able to get mortgage rates from four lenders, as well as estimated closing costs and terms. He was able to refinance his mortgage and lower his monthly payments by $500 per month.
"We've always known that our members wanted more financial services," says Lauren Kutschka, Costco's manager of financial services, who adds the warehouse retailer also offers health and auto insurance and stock brokerage services. Costco next plans to add auto and student loans to its mix.
Source: “Now on Sale at Costco: Mortgages,” CNNMoney (April 26, 2012)
Costco shoppers will now find that they not only can buy their groceries in bulk at the warehouse retailer, but they can also shop for a mortgage too.
Costco announced that it will offer a full-service mortgage lending program on its Web site with First Choice Bank and 10 other lenders. The site gathers quotes from various lenders.
The warehouse retailer has been testing out offering mortgages for a year in some of its locations. Its lending partners have issued more than 10,000 mortgages to Costco members so far.
"I went in to buy some bottled water, big bags of chips, cereal, and some Nutri-Grain bars that I eat on my route," one Georgia shopper told CNNMoney. "I saw a home loan brochure on my way out and picked it up."
The shopper said he went onto the Costco site and was able to get mortgage rates from four lenders, as well as estimated closing costs and terms. He was able to refinance his mortgage and lower his monthly payments by $500 per month.
"We've always known that our members wanted more financial services," says Lauren Kutschka, Costco's manager of financial services, who adds the warehouse retailer also offers health and auto insurance and stock brokerage services. Costco next plans to add auto and student loans to its mix.
Source: “Now on Sale at Costco: Mortgages,” CNNMoney (April 26, 2012)
Thursday, April 19, 2012
Storm Chasers Scammers Prey on Homeowners
Following a violent storm or
tornado, home owners are left to pick up the pieces and find ways to put
their homes back together. And insurance executives and legislators are
warning storm victims to beware of contractors who try to get home
owners to sign costly contracts before the insurance adjusters arrive.
These insurance executives are being dubbed “storm chasers” or “storm scammers,” who offer quick, costly deals to desperate home owners, USA Today reports.
Several states are considering or already have passed legislation to prevent these “storm scammers” from duping vulnerable home owners following a storm. For example, Iowa lawmakers are considering a bill that would “void repair contracts signed when the contractor represents himself as working for an insurance company, promises to rebate a deductible, or fails to give customers a disclosure about how to cancel the contract,” the USA Today reports. Lawmakers also recently added a provision for consideration to make it so that such contractors can be prosecuted under consumer fraud law. Minnesota, Nebraska, Illinois, Missouri, and South Dakota have already passed similar bills to protect home owners after storms.
"There are some very good contractors who set up their businesses to be able to respond to storms, but there are good ways to do it and bad ways to do it," Bill Good, executive vice president of the National Roofing Contractors Association, told USA Today.
To help safeguard against being scammed, home owners need to make sure the contractor is licensed in the state (if it’s required in their state) and not sign any documents that authorize a contractor to negotiate directly with their insurance company, Good says.
Source: “States Fight Back on Shady ‘Storm Chaser’ Contractors,” USA Today (April 16, 2012)
These insurance executives are being dubbed “storm chasers” or “storm scammers,” who offer quick, costly deals to desperate home owners, USA Today reports.
Several states are considering or already have passed legislation to prevent these “storm scammers” from duping vulnerable home owners following a storm. For example, Iowa lawmakers are considering a bill that would “void repair contracts signed when the contractor represents himself as working for an insurance company, promises to rebate a deductible, or fails to give customers a disclosure about how to cancel the contract,” the USA Today reports. Lawmakers also recently added a provision for consideration to make it so that such contractors can be prosecuted under consumer fraud law. Minnesota, Nebraska, Illinois, Missouri, and South Dakota have already passed similar bills to protect home owners after storms.
"There are some very good contractors who set up their businesses to be able to respond to storms, but there are good ways to do it and bad ways to do it," Bill Good, executive vice president of the National Roofing Contractors Association, told USA Today.
To help safeguard against being scammed, home owners need to make sure the contractor is licensed in the state (if it’s required in their state) and not sign any documents that authorize a contractor to negotiate directly with their insurance company, Good says.
Source: “States Fight Back on Shady ‘Storm Chaser’ Contractors,” USA Today (April 16, 2012)
Tuesday, April 17, 2012
Foreclosure Scams Rise Nearly 60%
Mortgage foreclosure scams — which
seek to dupe struggling home owners with offers to save them from
financial troubles — have soared nearly 60 percent this year. Scammers
are increasingly using federal programs, like refinance programs such as
HARP and HAMP, to try to trick home owners, reports the Homeownership
Preservation Foundation (HPF), a nonprofit group that helps home owners
avoid foreclosure.
“Every new government initiative spawns a slew of foreclosure avoidance scams, often from the same cast of characters doing business under various names to avoid easy detection and identification,” says Colleen Hernandez, CEO of HPF. “Most of these scams involve individuals supposedly offering mortgage foreclosure avoidance assistance that trained HPF counselors provide at no cost. Sadly, with most scams, no meaningful services are ever provided.”
About half of the reported scams to HPF tend to involve claims of specialized “legal services” from attorneys or individuals to help home owners avoid foreclosure.
The HPF warns that scammers also are using the HPF logo and brand to try to dupe home owners in foreclosure rescue scams.
“The only way distressed home owners can be certain they are dealing with a trained HPF counselor is by calling 888-995-HOPE,” Hernandez says.
Source: Homeownership Preservation Foundation
“Every new government initiative spawns a slew of foreclosure avoidance scams, often from the same cast of characters doing business under various names to avoid easy detection and identification,” says Colleen Hernandez, CEO of HPF. “Most of these scams involve individuals supposedly offering mortgage foreclosure avoidance assistance that trained HPF counselors provide at no cost. Sadly, with most scams, no meaningful services are ever provided.”
About half of the reported scams to HPF tend to involve claims of specialized “legal services” from attorneys or individuals to help home owners avoid foreclosure.
The HPF warns that scammers also are using the HPF logo and brand to try to dupe home owners in foreclosure rescue scams.
“The only way distressed home owners can be certain they are dealing with a trained HPF counselor is by calling 888-995-HOPE,” Hernandez says.
Source: Homeownership Preservation Foundation
Monday, April 9, 2012
Judge OK's $26B Foreclosure Settlement
A federal judge granted final
approval to a landmark $26 billion settlement over foreclosure
processing errors, clearing the way for the nation’s five largest
lenders to begin unraveling aid to home owners. The settlement includes
guidelines for banks in compensating home owners who may have been
wrongfully foreclosed upon as well as mortgage modifications — including
principal write-downs — of up to 1 million home owners.
The settlement was first announced more than a month ago but awaited a judge’s final approval. The settlement is between the nation’s five largest mortgage lenders and the attorneys general of 49 states and the District of Columbia. The five lenders part of the settlement are Bank of America, Citibank, JPMorgan Chase, Wells Fargo, and Ally Financial.
Here's a breakdown of how the settlement money will be allocated:
As long as the banks abide by the terms of the settlement, they will have immunity from future claims by the state governments for wrongdoings in the processing of foreclosures.
Oklahoma is the only state that did not participate in the settlement agreement. In early February, the state reached a separate agreement with the nation’s five largest lenders for an $18.6 million settlement.
Watch this video to get more info on the mortgage settlement.
Source: “Court Approves $26 Billion Foreclosure Settlement,” CNNMoney (April 6, 2012)
The settlement was first announced more than a month ago but awaited a judge’s final approval. The settlement is between the nation’s five largest mortgage lenders and the attorneys general of 49 states and the District of Columbia. The five lenders part of the settlement are Bank of America, Citibank, JPMorgan Chase, Wells Fargo, and Ally Financial.
Here's a breakdown of how the settlement money will be allocated:
- At least $17 billion will go toward modifying mortgages of delinquent borrowers. The modifications may include principal reductions to mortgages of up to $100,000 or more for 1 million home owners who are underwater or delinquent on their loans.
- About $3.7 billion will go toward refinancing mortgages for home owners who are current on their payments. This aid is estimated to help about 750,000 home owners.
- $5 billion will go toward banks’ paying fines to the states and federal government for the foreclosure errors. A portion of that will go to funding compensation to home owners who lost their homes to foreclosure due to errors. They stand to receive payments of $1,500 to $2,000.
As long as the banks abide by the terms of the settlement, they will have immunity from future claims by the state governments for wrongdoings in the processing of foreclosures.
Oklahoma is the only state that did not participate in the settlement agreement. In early February, the state reached a separate agreement with the nation’s five largest lenders for an $18.6 million settlement.
Watch this video to get more info on the mortgage settlement.
Source: “Court Approves $26 Billion Foreclosure Settlement,” CNNMoney (April 6, 2012)
Wednesday, March 28, 2012
Bank of America Outlines Limited Pilot Test of Mortgage to LeaseTM Program
Preselected Customers May Turn Over Deed, Eliminate Mortgage Obligation, but Remain in Their Homes as Renters
Bank of America Press Release
CALABASAS,
Calif. – Beginning this week in targeted hard-hit markets, Bank of
America will offer a limited number of mortgage customers who are facing
foreclosure an opportunity to remain in their homes, but transition to
tenant status, through a pilot program called “Mortgage to Lease.”
“When
homeowners are struggling to make payments, owe more on their mortgage
than their home is worth and face certain foreclosure, one of their
greatest anxieties is the transition process they face in moving from
their home,” noted Ron Sturzenegger, Legacy Asset Servicing executive of
Bank of America. “This pilot will help determine whether conversion
from homeownership to rental is something our customers, the community
and investors will support. This program may have the potential to
further round out the broad set of solutions we offer our customers in
need of assistance.”
To
maintain test controls, the Mortgage to Lease pilot will be conducted
strictly on a solicitation basis; there will not be any opportunity for
customers to volunteer or apply for consideration. Fewer than 1,000
customers will be invited to participate in the first phase of the
pilot. Initial outreach has begun to preselected customers in test
markets in Arizona, Nevada and New York, three states hit hard in the
housing downturn. The pilot population will include customers who meet
all of these requirements:
· Have loans owned by Bank of America.
· Are delinquent for more than 60 days.
· Have
exhausted modification solutions or have not responded to alternatives
to foreclosure, including short sale and deed-in-lieu.
· Have high loan balances in relation to their current property value.
· Face considerable risk of ultimate foreclosure.
· Have no junior liens.
· Are still occupying the home.
· Have adequate income to make an affordable rent payment.
Pilot
participants will transfer title to their properties to the bank and
have their outstanding mortgage debt forgiven. In exchange, they may
lease their home for up to three years at or below the current market
rental rate. The rental payment will be less than the existing mortgage
payment, and the customer will be relieved from certain other homeowner
financial obligations, including property taxes and hazard insurance.
Initially,
Bank of America will retain ownership of the properties, working with
property management companies to oversee the rental properties.
Properties in the pilot program will be transitioned to investor
ownership. If the Mortgage to Lease program proves viable, it may lead
to a broader program, potentially involving selected real estate
investors who would purchase properties that meet their predetermined
specifications and keep the previous homeowners in place as tenants.
“Our
priority is designing a solution that helps our customer,” said
Sturzenegger. “If this evolves from a pilot into a more broadly based
program, we also see potential benefits from helping to stabilize
housing prices in the surrounding community and curtail neighborhood
blight by keeping a portion of distressed properties off the market.”
Friday, March 16, 2012
Mortgage Settlement Could Lead to More Scams
Daily Real Estate News | Friday, March 16, 2012
The recent announcement of the $25 million mortgage settlement between five major banks and state and federal government officials was probably welcome news to many people in the real estate business. But it has at least one downside: It will probably cause a rise in scams targeting borrowers seeking assistance.
Currently, between $4 billion and $6 billion is lost each year due to borrower-assistance swindles, says Joanne Kerstetter, vice president of education and community relations for Money Management International, a credit counseling service based in Sugar Land, Texas. Those numbers could go up over the next few years as scammers take advantage of the mortgage deal in their schemes.
“They’ll use government terms,” Kerstetter says. “They’re going to sound very official, as if they’re part of the settlement.”
Also, some of these scammers will guarantee access to borrower assistance funds. That’s a major red flag, she says. “Generally speaking, the advertisements that say, ‘Call us to get money,’ are not representing organizations officially involved with the settlement,” Kerstetter says.
In general, consumers should be wary of any company that reaches out to them with unsolicited offers of assistance. If they need help, they should contact their lenders or a financial counseling agency certified by HUD, Kerstetter says.
“The important thing is not to release any contact information to anyone who approaches you,” she explains. “Don’t sign anything unless you’re clear about what you’re signing and that your mortgage lender is involved in the process. If you’re making payments, make sure they’re going to the loan servicer or mortgage provider.”
By Brian Summerfield, REALTOR® Magazine
The recent announcement of the $25 million mortgage settlement between five major banks and state and federal government officials was probably welcome news to many people in the real estate business. But it has at least one downside: It will probably cause a rise in scams targeting borrowers seeking assistance.
Currently, between $4 billion and $6 billion is lost each year due to borrower-assistance swindles, says Joanne Kerstetter, vice president of education and community relations for Money Management International, a credit counseling service based in Sugar Land, Texas. Those numbers could go up over the next few years as scammers take advantage of the mortgage deal in their schemes.
“They’ll use government terms,” Kerstetter says. “They’re going to sound very official, as if they’re part of the settlement.”
Also, some of these scammers will guarantee access to borrower assistance funds. That’s a major red flag, she says. “Generally speaking, the advertisements that say, ‘Call us to get money,’ are not representing organizations officially involved with the settlement,” Kerstetter says.
In general, consumers should be wary of any company that reaches out to them with unsolicited offers of assistance. If they need help, they should contact their lenders or a financial counseling agency certified by HUD, Kerstetter says.
“The important thing is not to release any contact information to anyone who approaches you,” she explains. “Don’t sign anything unless you’re clear about what you’re signing and that your mortgage lender is involved in the process. If you’re making payments, make sure they’re going to the loan servicer or mortgage provider.”
By Brian Summerfield, REALTOR® Magazine
Tuesday, March 13, 2012
More Details Emerge in $25B Mortgage Deal
The government vows to closely
monitor that the nation’s five largest banks fulfill the aid to home
owners outlined in a $25 billion mortgage settlement over foreclosure
allegations.
More details emerged in court filings on Monday of the landmark settlement among the nation’s five largest banks and state and federal government officials. The settlement, first announced last month, stems from allegations over banks’ foreclosure practices, although as part of the settlement the banks do not have to admit to any wrongdoing.
Among some of the aid outlined in the $25 billion settlement for home owners:
The banks part of the settlement are Bank of America, Citigroup, JPMorgan, Chase, Wells Fargo, and Ally Financial.
Some banks have negotiated separate requirements so they won’t have to pay as much in penalties to federal and state officials. For example, in return to a reduction in penalties, Ally Financial has agreed to cut the mortgage principal for struggling home owners by 105 percent of the home’s value. Bank of America says it will trim the mortgage principal of more than 200,000 struggling borrowers.
The settlement still must be approved by a judge to be final.
Source: “Feds Promise Tough Oversight in Mortgage Deal,” Reuters (March 12, 2012) and “Gov’t Files $25B Mortgage Settlement; Banks to Provide Relief Without Admitting Wrongdoing,” Associated Press (March 12, 2012)
More details emerged in court filings on Monday of the landmark settlement among the nation’s five largest banks and state and federal government officials. The settlement, first announced last month, stems from allegations over banks’ foreclosure practices, although as part of the settlement the banks do not have to admit to any wrongdoing.
Among some of the aid outlined in the $25 billion settlement for home owners:
- Banks have agreed to pay about $20 billion to help home owners avoid foreclosure. The majority of that money will be allocated to reducing the mortgage principal and modifying loans for about 1 million underwater home owners.
- Banks have agreed to pay $5 billion to federal and state government officials, with a portion of that money going to compensate about 750,000 Americans who have been found to be wrongfully foreclosed upon from 2008 through 2011. Affected home owners will receive $2,000 checks.
- Banks will be required to adopt new processing standards for foreclosure. For example, banks will be unable to pursue a foreclosure when home owners are being considered for a loan modification.
- Banks must comply with the terms of the settlement or face stiff penalties. Banks are required to complete all loan relief requirements as part of the settlement within three years; 75 percent of it is to be fulfilled within two years. Any bank that violates the agreement will be fined $1 million for each violation, capped at $5 million for repeat violations.
- The settlement does not free banks from criminal action. Federal and state officials can still pursue criminal action action against banks for any wrongdoing over foreclosures.
The banks part of the settlement are Bank of America, Citigroup, JPMorgan, Chase, Wells Fargo, and Ally Financial.
Some banks have negotiated separate requirements so they won’t have to pay as much in penalties to federal and state officials. For example, in return to a reduction in penalties, Ally Financial has agreed to cut the mortgage principal for struggling home owners by 105 percent of the home’s value. Bank of America says it will trim the mortgage principal of more than 200,000 struggling borrowers.
The settlement still must be approved by a judge to be final.
Source: “Feds Promise Tough Oversight in Mortgage Deal,” Reuters (March 12, 2012) and “Gov’t Files $25B Mortgage Settlement; Banks to Provide Relief Without Admitting Wrongdoing,” Associated Press (March 12, 2012)
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