Friday, October 08, 2010

Foreclosure Halt Creates Problems for Buyers

The fallout from the crackdown on mortgage lenders’ handling of paperwork is affecting buyers' ability to close.

Distressed properties make up about a third of home sales. About half of states are particularly affected by the problem. Two factors in various states are causing numerous delays are:

1. Officials in several states — including Texas, Maryland, and Connecticut — are seeking a suspension of all foreclosures until lenders prove what they are doing is legal.

2. Title insurers are refusing to sell title insurance when they can’t be sure there is a clean title.

When will the problem be resolved? Right now, it appears to be anybody’s guess, but until it is resolved, buyers, sellers, and real estate practitioners will be caught in the middle.

Source: The New York Times, Andrew Martin and David Streitfeld (10/07/2010)

Thursday, October 07, 2010

Wells Fargo Settles Pick-a-Payment Charges

Wells Fargo announced Wednesday that it had agreed to pay $24 million to end an investigation by eight states probing whether the company used deceptive tactics to sell "pick-a-payment" adjustable-rate mortgages without telling consumers the risks.

The $24 million will be used to help states assist customers who took out such loans. Wells Fargo also agreed to offer more than $770 million in its own loan assistance to borrowers.

The company signed agreements with attorneys general in Arizona, Colorado, Florida, Illinois, Nevada, New Jersey, Texas and Washington State.

Wells Fargo admitted no wrongdoing.

Source: The Associated Press, Alan Zibel (10/06/2010)

Foreclosure Reviews Could Lead to Costly Delays

House Speaker Nancy Pelosi has called for a federal investigation of foreclosure sales and evictions.

Observers say that if the government gets further involved and millions of foreclosures need to be re-processed, it is unclear how long the job will take and how costs will be allocated.

Lenders are rushing to review their own situations. At GMAC Mortgage, a unit of Ally Financial Inc., a spokeswoman said, “The vast majority of these affidavits will be resolved in the coming weeks and before the end of the year,” And a spokesman for J.P. Morgan Chase & Co. said the company's review process is expected to take "a few weeks."

But fixing the problems won’t be that simple if the reviews uncover missing documentation or other serious problems that are likely to trigger more legal challenges.

The bottom line is: "It's very hard to see how the servicers can avoid reimbursing the trusts for losses caused by taking short cuts," said David J. Grais, an attorney in New York who represents investors.

Source: The Wall Street Journal, Robbie Whelan and Ruth Simon (10/06/2010)

Wednesday, October 06, 2010

HUD Has Loans for Out-of-Work Borrowers

The U.S. Department of Housing and Urban Development announced Tuesday that it will offer $50,000 loans to unemployed borrowers who are at least three months behind in their payments, but who have a reasonable likelihood of being able to resume regular payments within two years.

The property must be the borrower’s principal residence and they cannot own a second home. They must have suffered at least a 15 percent decline in income.

The loan is available in 32 states not receiving assistance through the Hardest Hit Fund, which gave 18 states more than $4 billion to devise programs to help the unemployed and underwater borrowers.

Source:, Tami Luhby (01/05/2010)

Tuesday, October 05, 2010

Photo ©Teresa Butler 2010. All rights reserved.
Photography Spending Pays Off

No shocker here: Sales listings taken by higher-end single-lens-reflex cameras (SLR), preferred by professionals, garner higher prices than those properties whose sellers use point-and-shoot cameras, according to Redfin Corp., a Seattle-area real estate firm.

Redfin analyzed listings in Boston and Long Island and determined that houses with better photos sold for anywhere from $934 to $116,076 more compared to listings using photos from point-and-click cameras. The data also showed that properties with better photos got more online views.

Only about 15 percent of sellers use professional photographers and better cameras. Redfin says that about half of $1 million-plus listings were shot with cheaper point-and-shoot cameras.

Source: The Wall Street Journal, Emily Peck (10/04/2010)

Fed Chair: Government May Buy More Debt

Federal Reserve Chair Ben Bernanke hinted Monday that the Fed is likely to buy more government debt, a move that could further drive down rates on mortgages, corporate financing, and other loans.

"I do think the additional purchases, although we don't have the precise numbers for how big the effects are, I do think they have the ability to ease financial conditions," Bernanke said at a meeting with college students after his presentation at the Rhode Island Public Expenditure Council.

Bernanke also defended the TARP program, saying that the downturn would have been much worse without it.

Source: Reuters News (10/4/2010)

Monday, October 04, 2010

Regulators to Banks: Review Foreclosures

Improper foreclosure procedures are throwing another curve ball at the troubled mortgage industry.

Regulators from the Office of the Comptroller of the Currency have told seven major banks to review their foreclosure procedures after Bank of America and Wells Fargo joined JPMorgan and GMAC (now known as Ally Financial) in freezing their foreclosure processes.

Banks that regulators contacted include HSBC, Citigroup Inc., PNC Financial Services Group Inc., and U.S. Bankcorp (USB).

Simultaneously, title insurer Old Republic National said Friday it would stop insuring the sales of homes foreclosed by JPMorgan Chase & Co. or GMAC Mortgage until questions about documentation are cleared. An inability to get title insurance could bring home sales to a halt.

Source: The Wall Street Journal (10/01/2010) and Reuters News (10/03/2010)

Friday, October 01, 2010

90-Day Delinquencies Fall Again

More evidence that the housing crisis is easing: Fannie Mae said Thursday that delinquencies of 90 days or longer on single-family mortgages declined in July for the fifth-straight month.

The overall delinquency rate fell to 4.82 percent in July, down from 4.99 percent in June. This was a 10-month low.

Source: The Wall Street Journal, Nathan Becker (09/30/2010)