bailout
Foreclosed But Back to Homeownership
Sunday, May 20th, 2012 | Bank owned, Foreclosures, Real Estate Investing, Short Sales | No Comments
More and more, Americans aren’t letting a foreclosure, bankruptcy or short sale prevent them from becoming homeowners again, and quickly. In year’s past, the only option seemed to be renting. But today, as rental prices are on the rise, they want to take advantage of low home prices.
So where is the help coming from for these Americans? The government, in the form of FHA loans. “The number of FHA-insured home loans has soared in recent years as subprime loans have disappeared and fewer Americans have qualified for conventional mortgages backed by Fannie Mae and Freddie Mac, which were rescued in 2008 by the U.S. government after loan losses.” Even Ben Bernanke, Chairman of the Federal Reserve, agreed that banks have become so restrictive that many homebuyers are being squeezed out of the market. By the close of 2011, FHA-backed loans accounted for 30% of loans for home purchases. Critics argue that the FHA loans are putting people right back at risk for default, possibly leading their second chance to yet another loss.
For the full article, click here.
Mortgage Delinquencies at Lowest Since 2008
Sunday, May 20th, 2012 | Bank owned, Foreclosures, Pre-foreclosure | No Comments
Mortgage delinquencies have hit their lowest point in 4 years, according to the Mortgage Bankers Association, down from 7.58% to 7.4%. This includes mortgage payments that are at least one payment behind, but does not include loans already somewhere in the foreclosure process.
The peak number was over 10%, during the height of the housing crisis. This ease is reflected in mortgages that are one payment behind, as well as those that are more than 90 days behind, which is considered seriously delinquent.
Read the full article here.
Fannie Mae Avoids Q1 Bailout
Sunday, May 13th, 2012 | Foreclosures, Pre-foreclosure, Real Estate Investing | No Comments
Taxpayers are getting a little breather as Fannie Mae turned a profit at $3.1 billion, passing the $2.8 billion required Treasury payment. This is the first time since going into conservatorship in 2008 that the GSE hasn’t required a draw.
Fannie’s CFO, Susan McFarland, is anticipating continued strong performance results. “Our credit performance is headed in the right direction with significant improvement since 2009, and we expect that the reserves we have built to cover future credit losses on the pre-2009 legacy book of business have reached their peak.” Fannie lowered their reserve for credit losses by $2.3 billion, and the rate of serious delinquencies continues to drop. As for new mortgages? Tighter restrictions such as a 763 FICO score and loan-to-value ratio of 70% ups the screening process.
Read the full article here.
Wells Fargo Employees Facing Pressure to Sign
Saturday, May 5th, 2012 | Bank owned, Foreclosures, Real Estate Investing | No Comments
Employees at the Wells Fargo office in Charlotte, NC, are citing increased pressure to met a daily quota of signed, sworn foreclosure documents. According to several employees who wished to remain anonymous because of feared repercussions to their jobs, these “Vice Presidents of Loan Documentation,” as the entry-level processors are titled, are being pressured to complete up to 11 foreclosures each day.
At that rate, things are being overlooked or missed, which could have serious implications for the homeowners facing foreclosure. The penalty of falling short of the quota? First a verbal warning, followed by a written one. If a second written warning is received, they lose a paycheck. Despite sweeping changes enacted after the robo-signing scandal, mistakes are likely still getting through. This gives little assurance that their files are being carefully examined before being sent to foreclosure.
Read the complete article here.
Foreclosure Starts Down, Loan Performance Up
Sunday, April 15th, 2012 | Bank owned, Foreclosures, Real Estate Investing | No Comments
According to a report released by LPS Applied Analytics, loan performance was up and foreclosure starts down compared to the previous month. Despite this, foreclosure rates are near historic high rates but delinquency rates are at the lowest point since August 2008.
Foreclosure starts are down over 15%, with foreclosure inventory at 4%. That may seem low, but compare it to December 2005, when the rate was only .5%. “The national pipeline ratios – 90-plus delinquencies and foreclosures divided by the 6-month average of foreclosure sales – continued to decline.” These rations are higher in the Northeast, specifically New York and New Jersey. Foreclosure sales dropped in both judicial and non-judicial states. The average foreclosure pipeline in judicial states is 84 months, while New York is 846 months and New Jersey 772 months. “Cure rates for all types of loans, including one-month delinquencies to foreclosure initiated loans, were higher. Additionally, repeat foreclosures decreased 8%on a month-over-month basis.”
To read more, click here.
FHFA Director Supports HAMP Principal Reductions
Sunday, April 15th, 2012 | Bank owned, Foreclosures, Real Estate Investing | No Comments
Acting Director of the Federal Housing Finance Agency Edward DeMarco released preliminary findings from an FHFA analysis earlier this week, and stated, “principal reductions done under large incentive payments from the Treasury Department would save Fannie Mae and Freddie Mac enough money to begin an umbrella write-down program,” – up to $1.7 billion.
Despite this, DeMarco stressed that strategic defaults could quickly erase any benefit. When looking at 700,000 borrowers, it’s predicted that Freddie and Fannie could lose $63.7 billion if the loans aren’t modified. “With the tripled incentive payments to reduce principal under HAMP, the losses would be $53.7 billion if some principal is forgiven.” Reducing the principal would save the GSE’s $1.7 billion, at a cost of $2.1 billion to taxpayers for the program.
Read the complete article here.
It Pays To Be A Freddie, Fannie Exec
Monday, April 4th, 2011 | Bank owned, Foreclosures | No Comments
Did you see the latest report on the salaries paid to the heads of Freddie Mac and Fannie Mae in 2009 and 2010? You’re not going to believe this one.
“The heads of bailed-out mortgage finance giants Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) were paid fat salaries without proper written procedures or analysis, according to a report published by the Inspector General of the Federal Housing Finance Agency (FHFA-OIG). Also, the housing regulator Federal Housing Finance Agency (FHFA) has not considered the factors that might have possibly resulted in reduced executive compensation costs, the review report said.
The heads of Fannie Mae and Freddie Mac were paid a total of $17.1 million in 2009 and 2010 — the two full years of government ownership. The top six executives at the housing giants were paid $35.4 million over the two years, according to the report that was posted on the agency’s website.
Read more here.
House Votes to Terminate FHA’s Short Refi Program
Friday, March 11th, 2011 | Foreclosures, Real Estate Investing | No Comments
Check out this quick update I found today:
The U.S. House of Representatives has passed legislation to end the Federal Housing Administration’s (FHA) Short Refi Program aimed at helping homeowners who owe more on the mortgage than their home is worth obtain a new FHA-insured loan with a reduced principal.
In a 256 to 171 vote Thursday evening, the House approved the FHA Refinance Program Termination Act (H.R. 830). The vote was mostly split along party lines, with only one Republican departing from the majority and casting a nay, but 18 Democrats throwing their support behind ending the program.
It’s the first of four bills targeting federal foreclosure mitigation programs. Three others are also up for floor votes before the full House in the coming days – the Emergency Mortgage Relief Program for unemployed homeowners, the Home Affordable Modification Program (HAMP), and HUD’s Neighborhood Stabilization Program.
The bills are expected to meet strong resistance in the Democratic-controlled Senate, and will likely invoke a presidential veto if they land on Obama’s desk, according to a statement from the White House.
Bill Would Force Lenders to Decide on Short Sale in 45 Days
Monday, September 20th, 2010 | Bank owned, Pre-foreclosure, Real Estate Investing, Real estate short sales, Short Sales | 1 Comment
There’s some encouraging news on the horizon for homeowners hoping to sell their homes via a short sale – in the form of a new bill being introduced into the U.S. House. The bipartisan Prompt Decision for Qualification of Short Sale Act of 2010 would impose a deadline on lenders to respond to short sale requests with an answer within 45 days. The bill is sponsored by Reps. Robert Andrews (D – New Jersey) and Tom Rooney (R – Florida). This bill is in reaction to the flack lenders are receiving for dragging out short sale timelines. In many cases, home sales have fallen through because lenders were too slow to respond to short sale offers – neither getting a yes or a no. This bill would help short sales close much more quickly. With the number of potential short sale properties rising across the country, Congress is being urged to pass the bill quickly. In many cases now, it can take 90 days or more to receive a decision on a short sale request from a lender, and in some cases, the answer never comes! For millions hoping to avoid foreclosure, a short sale can help relieve them of the overwhelming stress of their mortgage.
Fannie Mae Selling Foreclosed Homes with Subprime Terms
Wednesday, September 15th, 2010 | Bank owned, Foreclosures, Real Estate Investing | No Comments
Through their new HomePath program, troubled GSE giant Fannie Mae is offering their foreclosed homes for sale with as little as 3% down. What’s more, that 3% can be a gift from a family member of third party, or a loan from a non-profit, state or local government. Doesn’t this remind you of the “deals” that got us in this housing mess in the first place? There’s a difference. To qualify for those terms, a purchaser must choose one of Fannie Mae’s foreclosed homes, and then buy it “as is.” If the ideal home is found and renovations are needed, a buyer may qualify for the HomePath Renovation Mortgage, which will fund both the home purchase and minor renovations. This is the only time an appraisal would be required. Here’s what a potential buyer can expect, otherwise:
- Low down-payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only).
- You may qualify even if your credit is less than perfect, as low as 660, when most lenders want a minimum of 700.
- You can qualify as an investor or owner-occupant.
- Down payment must be at least 3% for an owner-occupant, but it must be funded by your own savings or by a gift, a grant or a loan from an employer, a nonprofit organization, or a state or local government. Investors must come up with 10% down.
- No appraisal is required.
- No mortgage insurance is required, but the terms of the loan may not be as favorable.
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