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Housing News: October 28, 2009 October 28, 2009

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We take a “closer” look on real estate and mortgage news!

http://www.biggerpockets.com/renewsblog/2009/10/27/housing-market-overheating/

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The Battle in Loan Modification October 13, 2009

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Since the beginning of the year, the Making Home Affordable Program and programs alike have been met with both progressive support and glaring criticism. Supporters believe that the loan-mod programs are ebbing the tide of mounting foreclosures, while critics question the success rate and amount of effort pur forth by banks in these programs. What is certain is that Mortgage Assistance Programs are vital to a recovery in the economy and the housing market. Real estate is Cylclical, Seasonal and Emotional.

 An example of promise is the recent news of the HAMP program achieving 500,000 loan-mods ahead of schedule. Increased pressure has forced banks to speedily follow through with loan-mods with the Administration issuing progress reports periodically. Also, news of banks getting better at processing foreclosures is the silver lining in an otherwise dark cloud.

However, criticism about these programs is mounting; some banks are far behind on the amount of mortgage relief being provided while some borrowers face default even after mortgage assistance. Slow turnaround of paperwork by banks is one of the criticisms about these programs.

With foreclosures mounting and unemployment on the rise, the final outcome on these programs is yet to be seen.

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Mortgage Industry Faces Looming Concerns October 9, 2009

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Heading into the 4th Quarter of this tumultuous economic year, the mortgage industry faces growing problems ahead. While news of Obama’s HAMP program reaching its 500,000 goal of helping homeowners faster than expected is promising, concerns on possible bailouts and underperforming programs continues to threaten the vision of recovery in the housing market. Mortgage Assistance Programs are needed to curtail these concerns before problems become “too big to fail.” We must always remember that Real estate is Cyclical Seasonal and Emotional.

Will the FHA Need a Taxpayer Bailout?

The question about a possible Federal Housing Administration bailout in the near future is the story circulating news desks today. F.H.A. commissioner David H. Stevens sought to dispel concerns about the mortgage giant’s looming problems.

“Absent any catastrophic home price decline, F.H.A. will not need to ask Congress and the American taxpayer for extraordinary assistance – we will not need a bailout,” Mr. Stevens said in a prepared testimony on Capitol Hill Thursday.

Providing lenders with protection against losses as the result of homeowners defaulting on their mortgage loans, the FHA now insures more than 25% of mortgages in the country, up from 3% in 2006. Critics argue that a future FHA bailout is almost inevitable, as the agency’s capital is dangerously close to dipping below the mandated level of 2%. Independent financial consultant Edward Pinto concurs,

“It appears destined for a taxpayer bailout in the next 24 to 36 months,” Edward said. He estimates that the agency faces losses of $70 billion on loans it has already made, short of its current reserves by $40 billion.

Fed Preparing for Commercial Real Estate Mortgage Crisis?

An unpublished Federal Reserve Report leaked in a recent Wall Street Journal article reporting rising defaults in the commercial real estate sector. The unpublished report concludes that U.S. banks are slow to take losses on their commercial real estate loans. Specific servicers reported having only 11 cents in reserves for every $1 in bad loans in the second quarter. 

The NuWire Investor had this to say; “I don’t know what’s worse, the banks skimping on reserves and holding off on reporting losses in hope of revival or the Fed for knowing about the problem and trying to keep it a secret. Someone at the Fed must feel the same way because the report somehow found its way to the media.”

TARP Oversight Group Says Treasury Mortgage Plan Not Effective

The TARP group indicates that the government needs to increase its efforts to help struggling homeowners in this article. There is doubt that the $50 billion loan-modification program will provide the necessary relief to all homeowners it intended at the start of the program. With rising factors of unemployment, and decreasing property values the task becomes more daunting.

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Housing News: 10/9/09 October 9, 2009

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For statistical reports on property data from public records and property valuation click here.

FHA Won’t Need a Bailout says David Stevens

Real Estate is: Cyclical, Seasonal and Emotional

HAMP Reaches 500,000 Modification Milestone

Housing in Crisis

Leaked Document Shows Fed Preparing For Next Mortgage Crisis

Square Footage and Median Price Differentials

New Thinking Needed to Rebuild Housing Market

Mortgage Assistance Program

New Housing Bill Will Force Loan Modification

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Firms Getting Federal Funds Have Spotty Records October 5, 2009

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It is well documented that many borrowers now seeking loan-modifications are facing continuous roadblocks dealing with the mortgage firms they were borrowing from. Much of the inefficiencies in President Obama’s Home Affordable Modification Program deal with lenders’ unresponsiveness to customers. Improvements to the program have increased transparency in lenders’ efforts to borrowers. But stricter guidelines will not ultimately force lenders to play it straight, which is why alternative Mortgage Assistance Programs should be viewed and taken into consideration.

A recent Yahoo article sheds light on the guilty practices of some mortgage firms now involved in the Treasury’s program to modify troubled mortgages. The article mentions guilty of inexcusable practices dating ar far back as 2007, many with a no comment response. Instances of missed calls, shuffled or lost paperwork, unattainable payments and unfair late fees to customers mirror the problems facing Obama’s HAMP program today.

So what have we learned?

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New Bill to Help Homeowners with Foreclosures October 1, 2009

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“Voluntary efforts to keep families in their homes have failed,” said Senator Dick Durbin (D-IL).

Mortgage delinquencies are rising and the voluntary HAMP program implemented so far is slow to repair the damage. Mortgage Assistance Programs have been created to weather the mortgage storm, but little remains resolved. The Preserving Homes and Communities Act of 2009, headed by Senator Jack Reed (D-RI), aims to aggressively curtail this situation threatening a recovery.

The Bill: (from Bloomberg.com)

  • Require lenders to evaluate all borrowers for affordable loan-mods. before initiating foreclosure
  • Require banks to offer and approve a loan-mod if the restructured mortgage returns more money (net-present value) to investor than would foreclosure
  • Establish new penalties and would let borrowers overturn foreclosures if lenders fail to comply
  • Place limits on fees charged in foreclosure

The Mortgage Bankers Association and others have many concerns with the bill, as making modifications mandatory could be problematic for market recovery. What’s important here is that people are coming together, sharing ideas, making plans and devising solutions for this housing crisis. As we move into recovery, it will take the collective thought and desire for resolution to witness a turn in the housing market.

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News: Mortgage Edition September 30, 2009

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For statistical reports on property data from public records and property valuation click here.

Many still can’t make payments after mortgage modifications

Mortgage Assistance Program

Fannie and Freddie Delinquencies Move into Uncharted Territory

MBA: Mortgage Rates Hold Below 5.00%. Loan Demand Falls

21st Century Lend-Lease Plan

Freddie Doing Loan Mods Door-to-Door

Mortgage Modifications Could Mean a 396% Marginal Tax Rate

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Mortgage Delinquencies Rising September 30, 2009

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The housing market needs mortgage assistance. As we push towards recovery, the rising delinquency rates from borrowers remains the elephant in the room. Today’s news of Fannie and Freddie Delinquencies Moving into Uncharted Territory highlights this point. According to the article, the delinquency rate in single-family home loans backed or held by Fannie Mae crossed over 4% in July for the first time. Freddie Mac reported a rise to 3.13% in August. As loans approach recasting for many borrowers – especially borrowers with “Alt-A” loans – potential recovery in the market will dampen.

This Mortgage Assistance Program looks to curtail rising foreclosure rates by keeping homeowners in their homes. If structured correctly, homeowners can sustain a monthly mortgage payment. Here is an example of how it can work:

• Mr. and Mrs. Z have a mortgage payment of $1,170 ($200,000 loan with 30 year payout at 5.75% interest).

• The Z’s lose their job and can only pay $470, so the government pays the difference of $700

• The Z’s remain homeowners and work through their problem. It takes the Z’s 10 months to get back on their feet, the government paid out $7,000 and now the Z’s owe the government.

• But the government says okay, you can start paying us back in seven years and the payment will be over 10 years at an interest rate of 3%.

See the rest of the Program here. While there are some obstacles to overcome with this program, it can be done.

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Housing Market News: 9/25/09 September 25, 2009

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For statistical reports, property data from public records and property valuation click here.

Shadow Market Part II: Banks Avoid Acquiring Foreclosed Homes

Housing In Crisis Report

Especially Bad Housing Numbers and Taxpayers as Mouse Models

Real Estate is: Cyclical, Seasonal and Emotional

Housing Crash to Resume on 7 Million Foreclosures

Mortgage Assistance Program for Homeowners

Seeking Real Estate Bargains? Try Looking at the High End

Square Footage Matters and Median Price Differentials

Investors are Skittish Over Slowing Home Sales

Square Footage Matters: Large Homes Indicate Stable Values

No Sign That Bank Bailout Will Expire at Year’s End

Alphainventions.com

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Housing Market News: September 21, 2009

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For statistical analysis, and property data from public records click here

Credit Policies Still Threaten Recovery

Stability for the Manhattan Market in Fruition

FHA New Lending Standards for Mortgages and Home Refinances

The Cyclical, Seasonal and Emotional Aspects of Real Estate

Low Expectations for Mortgage Help Program

Mortgage Assistance Program for Homewoners

Debate Ranges About Real Estate’s Future

Housing in Crisis: What Happened?

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