Archive for category Housing Market
Quarter in U.S. foreclosure plan late on payments
Posted by admin in Housing Market on December 5th, 2009
by Lisa Richwine - Dec. 5, 2009 5:13pm EST
Reuters.com
WASHINGTON (Reuters) - More than one-quarter of homeowners receiving help under a U.S. government foreclosure prevention plan are behind on their new mortgage payments, a Treasury Department survey has found.
Some 650,000 borrowers are participating in the trial phase of the Obama administration’s Home Affordable Modification Program, a $75 billion taxpayer-financed program launched this year.
Most home loan modifications result in lower monthly payments, although some lead to reduced principal on mortgages.
Trial modifications were initially for three months, but the Treasury added 60 days, effectively making them last five months.
Homeowners must submit more detailed documentation before they can have their loan modifications made permanent.
A Treasury Department survey of large mortgage servicers found “over 73 percent of borrowers are current in their trial plan payments,” Assistant Treasury Secretary Herbert Allison told a congressional oversight panel.
That leaves about 27 percent who are delinquent on the payments.
Allison provided written answers to questions raised at an October hearing before the Congressional Oversight Panel, which monitors the government’s foreclosure prevention plan and other financial rescue efforts.
Allison said that “while not all eligible borrowers will convert to permanent modifications, it is too early to estimate a failure rate, diagnose causes and predict future success rates.”
Experts say the conversion rate to permanent loans is the key to determining the program’s ultimate success or failure.
The Treasury has not published figures on how many trial loan modifications have been made permanent, but it said it will start doing so this month.
The next monthly report on the program will be released next week, Treasury Department spokeswoman Meg Reilly said.
This week Treasury officials threatened to fine mortgage lenders unless they speed efforts to give hard-pressed homeowners a permanent break on monthly payments.
According to a report from the congressional oversight panel, only 1,711 permanent mortgage modifications had been offered as of September 1, an indication of how reluctant banks seemed to move beyond trial offers.
(Reporting by Lisa Richwine; Editing by Xavier Briand)
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FHA considers tighter lending rules
Posted by admin in Financial Market, Housing Market on December 1st, 2009
Dec. 1, 2009
By Market Mix Up
In other news… it has been brought to many people’s attention that FHA is considering tighter lending rules. They say the percentage of delinquencies on new loans this year is on the rise. How much worse is it going to get before we hit the bottom???
This clearly isn’t a good sign!!!!!
Check out the full article from USA Today.
Permanent mortgage relief?
Posted by admin in Housing Market, Mix Up TV on November 30th, 2009
U.S. steps up pressure on lenders to modify more mortgages
Posted by admin in Housing Market on November 30th, 2009
By Renae Merie - Dec. 1, 2009
The Washington Post
The Obama administration on Monday promised tougher scrutiny of lenders participating in its marquee foreclosure-prevention effort and threatened to penalize companies that don’t do enough to help struggling homeowners.
The move is aimed at breaking a bottleneck in the Making Home Affordable program, which was launched in March but has been slow to reach many borrowers. Most of the 650,000 homeowners enrolled in the program are stuck in its initial phase and still must prove that they qualify for reduced mortgage payments. Moving those borrowers from trial modifications into permanent ones is a key test of the effort’s effectiveness.
Treasury Department officials would not say Monday how many loans have been permanently modified. But a recent report by the Congressional Oversight Panel, which is monitoring the government’s Troubled Assets Relief Program, found that only about 1 percent of borrowers had moved from a trial modification into a permanent one.
“In our judgment, servicers, to date, have not done a good enough job of bringing people a permanent modification solution,” Assistant Treasury Secretary Michael Barr said during a conference call with reporters.
Under the program, eligible homeowners can have their loans modified to reduce their mortgage payments to 31 percent of their income. To qualify for a permanent modification, borrowers must provide extensive documentation and make three consecutive payments to prove they can afford the new loan.
To prod lenders to move more borrowers into permanent loan modifications, Treasury officials said they would use a combination of public shame and monetary penalties. Lenders’ performance will be tracked in report cards that show how many loans have been permanently modified, and teams of officials from the Treasury and Fannie Mae will visit major banks to monitor their progress.
Lenders that fail to perform will be “subject to consequences which could include monetary penalties and sanctions,” according to a Treasury statement. Officials declined Monday to detail what those penalties could be. Lenders are not paid under the program until a loan modification is made permanent, and it was unclear what additional recourse the government might have under its contracts with participating companies.
Continued frustration
The announcement, however, failed to satisfy housing advocates, who expressed continued frustration with what they consider slow progress on loan modifications and urged the administration to take more aggressive action.
“The lack of conversion of these loans is at dismal levels, which means the program has been a failure,” said John Taylor, president of the National Community Reinvestment Coalition. “The government needs to take the gloves off and do something much more proactive, and I don’t think penalizing is enough.”
Owners see success with mortgage modifications
Posted by admin in Business, Housing Market on November 30th, 2009
by Russ Wiles - Nov. 29, 2009 06:56 PM
The Arizona Republic
It took a while for mortgage-modification programs to gain any lift. For the first several months, they resembled those early flying contraptions that would bounce along the ground before crashing in a tangle of wood, metal and canvas.
But lately, some loans have gotten reworked, helping certain cash-strapped owners stay in their homes and convincing others to try again.
For example, the government’s Making Home Affordable program seems to be gaining traction, with 650,000 modifications in the works, including more than 34,000 in Arizona, the third-busiest state, according to the Treasury Department. Plus, some homeowners are getting mortgage help in other ways, without resorting to the federal program.
Mortgage counselors still caution that most troubled homeowners won’t qualify for a better loan deal, either because their finances aren’t solid enough or their lender isn’t willing to deal. But enough success stories are emerging to provide glimmers of hope.
Janet Davis of Mesa is one, having received a principal deferral on her main loan that she doesn’t have to pay until she moves or the home is sold. Davis said she also was able to settle a second mortgage on the property for 10.5 cents on the dollar.
“My payments are down to what they were on the original first mortgage, and I now have no second at all,” said Davis, who works in sales support for an electronics-infrastructure firm.
Cindy Frugé is another success story. With the help of a mortgage counselor, she obtained a reduction in the interest rate on her mortgage to a new rate of 3 1/8 percent.
“He contacted my mortgage company and negotiated a decrease in the rate by half,” said Frugé, a school teacher who lives in Coolidge.
Neither woman went through the Making Home Affordable program, but both got assistance from Take Charge America, a not-for-profit Phoenix credit-counseling entity that traditionally has focused on helping consumers with credit-card debts. The firm recently added a mortgage-modification unit after obtaining certification from HUD, the Department of Housing and Urban Development.
“Quite a few of our clients are going through the (government) program,” said Matt Harvey, a mortgage-counseling supervisor at the firm, which is hosting a free open house at its Phoenix offices on Saturday to explain the loan-modification process.
Speed up your Short Sale
Posted by admin in Housing Market on November 29th, 2009
Nov. 29, 2009 - 1:45 AM
By Market Mix Up - Short Sale Tips
As a buyer in today’s real estate market. Trying to understand why short sales take so much time to get an approval is nearly impossible. That’s why we decided to give our readers some tips and advise on how short sales work, and what to expect when submitting docs/offer for an approval.
A Short Sale is a sale of real estate in which the sale proceeds fall short of the balance owed potentially allowing the borrower the option to avoid foreclosure. But in today’s short sale market, most buyers end up walking due to long waits. Or the seller gets so impatient, they end up walking from the home causing them a foreclosure.
Here are some tips for the seller on how to get a speedy short sale:
1. Stay on top of getting all docs requested for an approval. Like a refinance/purchase; the same docs are typically required to submit for an approval with Underwriting. With that said, you will have to provide a hardship letter, pay stubs, bank statements, purchase contract, credit report, etc. Since banks are very bitter about the significant losses. Most lenders will quickly close files with either missing docs or no offer/purchase contract.
2. Borrowers have the option of hiring an attorney, 3rd party, or have their lender handle all negotiation of the short sale. While we feel the best option is to use their current lender. Some try using a 3rd party, and end up having to pay fees with no guarantee that the bank will approve their short sale.
3. Make sure you have an experienced Real Estate Agent that knows the market, and is knowledgeable in short sales. It is common for agents to either give up without any notice, or just quit because they’re tired of working commission only with no paycheck.
4. Last, but not least… understand that banks have a lot on their plate and are constantly trying to come up with new guidelines, which will only speed up the process. Even though some may experience Mortgage Insurance and second lien approval issues. One must be understanding that this is the beginning of a long downturn, which is expected to only get worse once the Commercial Market starts to default.
Good luck with your short sale! We wish you the best, and hope this information will be of some help with your short sale experience.
Illegal housing bidding on rise
Posted by admin in Housing Market on November 22nd, 2009
by Catherine Reagor - Nov. 22, 2009 12:00 AM
The Arizona Republic
When foreclosure homes come up for public auction in Phoenix, a minimum opening bid is set and bidding is open to anyone.
At least that is the way it’s supposed to work.
But a Republic investigation into the daily public auctions held on the Maricopa County Courthouse steps and at some local law offices suggests a growing number of homes are sold for less than the posted opening bid.
Prices on some foreclosure homes are being dropped below the opening bid just hours or even minutes before the auction. Buyers aware of the “drop bids” scoop up the houses before other bidders know about the price drops.
Drop bids violate the state’s foreclosure-sale laws, say the state’s leading court-appointed foreclosure-trustee attorneys.
This illegal practice comes at a time when it’s normal for 4,000 Valley homes to be foreclosed on and put up for auction each month. Until a few months ago, most of the homes failed to sell at auction and went back to the lenders.
But last month, a record 1,000 foreclosure homes sold through public auctions, five times the number sold at auction in January.
Real estate market watchers and unsuccessful bidders at the auctions say drop bids are driving the record number of auction sales.
The minimum opening bid at foreclosure auctions traditionally was the amount owed on the home.
Then the housing-market crash drove home prices down dramatically - a 50 percent drop since 2007. Now, investors who bid on homes won’t pay prices based only on what a homeowner owes on a mortgage, a figure that can be higher than the home is worth. There would be no profit reselling it.
Lenders would rather cut prices than continue to carry the foreclosed homes on their books, observers say. Why lenders would drop prices at the last minute, instead of posting a lower opening bid the day before as required by law, is unclear.
