Mortgage Troubles? We can help...

Renewed trust for tough times

Thu, 15 Sep 2011 20:31:05 GMT

Does it feel like trust is one of the major casualties of the economic meltdown of 2008 – followed by the “Great Recession,” the “Jobless Recovery” and now the threat of a “Double Dip Recession?”

Weren’t we assured that home values were destined to go up and up and up?

There have been lots of promises that help is on the way—and lots of warnings of scams and schemes that have only served to confuse the matter. So where’s a homeowner who’s underwater or overleveraged to turn?

Here’s the bottom line: the choices that homeowners make when they feel they are at the end of their rope will have ramifications for years to come on their ability to qualify for credit, their job prospects, their security clearance and their overall finances. When a family’s financial trajectory is rapidly heading in a negative direction, there’s no substitute for the helping hand of a knowledgeable expert who has the integrity, the experience and the training to reverse the course—someone who is tapped into regulatory initiatives and can separate fact from fiction.

It is my mission to serve as a credible source of information and perspective to homeowners who have found themselves in a tough situation and need help sorting through their options. That’s why I sought out the Certified Distressed Property (CDPE) designation—the most renowned and recognized credential in the distressed property field, and it’s why I continue to stay on top of regulatory and industry developments that impact options available to homeowners who are struggling with their current financial situations.

My message to homeowners who do not know where to turn: there is hope. Foreclosure is not inevitable and neither the government nor your bank wants to see that happen. No one expected to find themselves on the brink of foreclosure, but I have worked with countless clients who have managed to turn their financial trajectory around and get on a path of financial recovery.

It CAN be done! And it would be my privilege to help.

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Cities that weathered housing bust now suffering

Tue, 31 May 2011 22:21:10 GMT

Cities that had escaped the worst of housing bust are hurting now

Derek Kravitz and Alex Veiga, AP Business Writers, On Tuesday May 31, 2011, 5:40 pm EDT

WASHINGTON (AP) -- Even cities that weathered the housing market crash with relatively little damage are suffering now.

Severe price declines have spread to Dallas, Denver, Minneapolis and Cleveland, which had mostly withstood the bust in housing since 2006. The damage has now gone well beyond cities hit hardest by unemployment and foreclosures, such as Phoenix and Las Vegas.

"We didn't enjoy the highs and the lows like other cities," said Kay Weeks, a Realtor with Ebby Halliday in Dallas, where prices fell nearly 1 percent in March and are expected to keep falling. "But when we get bad news nationally, people take notice and cut back on spending and buying homes."

Complete article found at: http://finance.yahoo.com/news/Cities-that-weathered-housing-apf-3276336717.html?x=0

More than half of U.S. adults believe housing recovery unlikely until 2014 or later

Wed, 25 May 2011 23:51:38 GMT

An ongoing survey conducted by Harris Interactive on behalf of Trulia and RealtyTrac finds that 54 percent of U.S. adults believe recovery in the housing market will not happen until 2014 or later. In a previous survey conducted six months ago, 42 percent of American adults said they thought the market would turn around by 2012 or had already turned around. Now, only 23 percent continue to think this will happen.

According to the survey, 45 percent of American adults say the government is not doing enough to prevent foreclosures, and only 17 percent say too much is being done. Sixteen percent say the government is doing the right amount to prevent foreclosures, and 22 percent are unsure.

More than half of U.S. renters (56 percent) and 47 percent of current homeowners are at least somewhat likely to purchase a foreclosed home, according to the survey. Along with having some concerns about hidden costs, a risky buying process and loss in home value, the majority of American adults expect to pay 38 percent less for a foreclosed home than a similar home that was not in foreclosure – not too far above the average discount of 36 percent on sales of bank-owned homes (REO) compared to sales of homes not in foreclosure reported in the RealtyTrac 2010 Foreclosure Sales Report.

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Short sales called drag on Silicon Valley, Peninsula housing market

Tue, 24 May 2011 22:55:16 GMT

By Pete Carey

pcarey@mercurynews.com

Posted: 05/24/2011 02:53:25 PM PDT

Updated: 05/24/2011 06:25:47 PM PDT

There's no easy fix to the housing crisis, but many South Bay experts say one of the most promising is a "short sale" -- selling the home for less than the loan balance.

Complete article found at: http://www.mercurynews.com/business/ci_18130068

Foreclosures in Silicon Valley remain stubbornly slow

Wed, 18 May 2011 22:52:07 GMT

By Patrick May

pmay@mercurynews.com

Posted: 05/17/2011 04:44:13 PM PDT

Updated: 05/18/2011 03:37:16 PM PDT

Foreclosure activity in Silicon Valley remained stubbornly slow in April, a downward trend that may seem encouraging on the surface but actually worries industry observers, who say it could hamper the overall housing market's recovery.

Notices of default, the first step in the foreclosure process, were down almost 25 percent from March and 29.4 percent from a year ago in Santa Clara County, while corresponding figures for San Mateo County showed drops of more than 42 percent and nearly 35 percent. Other measurements, including notices of sale and foreclosure sales, reflected the same sort of declines, both in the Bay Area and beyond.

"The drop in filings, and the rise in cancellations, is surprising," said Sean O'Toole, CEO and founder of ForeclosureRadar, which released the April report. "Banks have had time to resolve robo-signing issues, so we should be seeing exactly the opposite results, with lenders starting to catch up from recent delays."

The concern among real estate agents and others who have watched the housing recovery's fits and starts the past two years is that a frustratingly high inventory of properties in foreclosure can create a drag on home prices throughout the area. And they fear that until the lenders clear up their bad-loan backlogs, the overall market will continue to suffer.

"Foreclosures are a disaster for everyone involved," said Steve Blanton, executive officer with the San Mateo County Association of Realtors. "Obviously, it's tough on those going through it, but it also hurts everyone else in the neighborhood. If you're selling your home, you're basically competing with the lowest-priced house in the surrounding market, which can put a crimp in your sales price."

The reasons behind the continued slowdown in activity are complicated and multilayered. Some lenders say the slow pace is a natural progression as banks begin to address their portfolios of troubled loans, reluctant to unload too many deeply discounted properties on the market at once. They say increased government regulation and last fall's scandal over improperly signed foreclosure documents have also prompted them to move cautiously.

"At the time of the robo-signing controversy last year, we stopped doing all foreclosures and then started reviewing them all in December," said Bank of America spokesman Rick Simon. "We're still in that resumptive process and a lot of the slowdown you see now is left over from last year. But we are in the process of getting it back up and running. And as the year goes on, you'll see foreclosures pick up as we work through the inventory."

Simon said many economists believe that "we need to get through the bulk of the foreclosure inventory to get to the bottom of the market, and that's the only way we'll ever be able to start back up again."

Despite the nagging trend in these numbers, Silicon Valley's housing market continues to fare relatively well. A report issued earlier this week showed that overall sales in each of the past three months have bested the previous month. And adjustable-rate mortgages and jumbo loans, both critical to the market's improving health, are being used in an increasing percentage of deals.

Margie and Matt Tabel recently listed their Cambrian neighborhood home in San Jose for sale for $1.25 million and have seen a lot of interest by buyers who like the area's location and good schools. Margie Tabel says "the foreclosure slowdown doesn't concern us too much because a lot of the houses being foreclosed on are in really bad shape. But a house like ours, which has been completely remodeled, can command the sort of price we're asking."

Contact Patrick May at 408-920-5689. Follow him at Twitter.com/patmaymerc.

Article found at: http://www.mercurynews.com/real-estate/ci_18081990

Foreclosures in state fall 20% from 2010

Tue, 17 May 2011 21:49:35 GMT

By Robert Lewis
rlewis@sacbee.com The Sacramento Bee
Published: Friday, May. 13, 2011 - 12:00 am | Page 6B
Last Modified: Monday, May. 16, 2011 - 12:17 pm
Foreclosure filings in California were down nearly 20 percent in April from the same month of 2010, RealtyTrac reported Thursday.

Despite the significant drop, the state still ranks as third worst in the nation for foreclosure activity with one out of every 240 homes generating a foreclosure filing.

So this is good news, right? Not necessarily, according to RealtyTrac's chief executive officer, James Saccacio. He said plenty of loans are still going bad, but lenders are taking longer to foreclose as their explore other options, such as loan modifications or short sales.

Seven of the 10 metropolitan areas with the highest foreclosure rates were in California. The four-county Sacramento region was sixth on the list, with a filing for every 166 housing units.

Article found at: http://www.sacbee.com/2011/05/13/3623780/foreclosures-in-state-fall-20.html

Home values decline at fastest pace in Q1 since 2008

Thu, 12 May 2011 00:07:30 GMT

Home values nationwide declined at a faster pace in the first quarter of 2011 than in any quarter since 2008, when the housing market experienced its worst performance, according to Zillow's first quarter Home Value Index. The Index decreased 3 percent in the first quarter compared with the fourth quarter of 2010, and declined 8.2 percent year-over-year to $169,600. Home values have declined 29.5 percent since they peaked in June 2006.

Negative equity reached a new high mark with 28.4 percent of single-family homeowners with mortgages underwater at the end of the first quarter, up from 27 percent in the fourth quarter of 2010.

Foreclosures also increased in the first quarter, as banks unfroze moratoriums and allowed foreclosures to resume. Foreclosures had fallen in late 2010 due to the slew of moratoriums brought about by the "robo-signing" controversy. In March, one out of every 1,000 homes in the country was lost to foreclosure.

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Housing Crash Is Getting Worse: Report

Tue, 10 May 2011 01:06:48 GMT

by Brett Arends
Monday, May 9, 2011

Commentary: But all this bearish news makes me bullish

If you thought the housing crisis was bad, think again.

It's worse.

New data just out from Zillow, the real-estate information company, show house prices are falling at their fastest rate since the Lehman collapse.

Average home prices are down 8% from a year ago, 3% over the quarter, and are falling at about 1% every month, according to Zillow.

And the percentage of homeowners in negative-equity positions — with a home worth less than its mortgage — has rocketed to 28%, a new crisis high.

Zillow now predicts prices will fall about 8% this year and says it no longer expects the market to bottom before 2012.

"There's no way we can get to flat, from these depreciation levels, in the last nine months of the year," says Zillow economist Stan Humphries. "Demand is a lot more anemic than we had previously thought."

When in 2012 does Zillow see the market bottoming out? Humphries won't say.

What a foolish boondoggle those tax breaks for home buyers have turned out to be. The government spent an estimated $22 billion between 2008 and 2010 on tax breaks to prop up the housing market. All it achieved was a brief suckers' rally that ended last summer.

"As we said at the time, it was a giant waste of money," says Mark Calabria, economist at the conservative Cato Institute. "None of these things really turned the housing market around. They just put off the adjustment for awhile."

It's hard to overestimate the scale of the carnage in the housing market. Zillow found prices fell in all but four U.S. metro areas.

Falling real-estate prices mean spiraling hidden losses throughout the economy, from banks to homeowners.

Remember Japan's "zombie banks"? These were the financial institutions that haunted that country's economic recovery after the 1990 crash. They staggered on with huge losses they could never repay — the walking dead.

Here in America we have "zombie homeowners." Millions of them. According to Zillow, a record 16.3 million families are upside-down on their home loans. Sixteen million! And many are a long way upside-down. Their homes may never be worth as much as their mortgage. But they are hemorrhaging cash to pay the nut every month.

Recovery? What recovery? This looks a bit like a depression to me.

What does this mean?

All the misery makes me think of a great French general, Ferdinand Foch. He's the one who defended Paris at the Battle of the Marne in World War I. During the darkest hour of the fighting, he is supposed to have looked around him and said:

"Hard pressed on my right. My center is yielding. Impossible to maneuver. Situation excellent — I attack!"

In other words, when it comes to distressed housing, I'm finding it hard not to be a contrarian bull.

Why? Am I crazy?

Well, maybe. But I'm a medium-bull for all the reasons everyone else is gloomy.

First, prices in many areas are now cheap. They have corrected a long way since the bubble began to burst five years ago. Of course, it depends on where you are. I'm still skeptical of the real-estate markets that have held up best — prime stuff like Manhattan, San Francisco or Beverly Hills. It's hard to get a deal there.

But in the places that have fallen the furthest, there are deals aplenty. Zillow found only four metro areas in America that have leveled out, or risen, lately. Notably, two of those are in stricken Florida — Fort Myers and Sarasota. Have they fallen so far they've hit bottom? Maybe.

Look at this chart. It shows Miami real-estate prices, adjusted for inflation, over the past quarter-century, using Case-Shiller data. The picture is pretty remarkable. The gigantic bubble has been completely wiped out. We're back to prices seen in the 1980s — when "Miami Vice" was on the air.

The second reason: There are tons of foreclosures and short sales on the market. And there are plenty more sitting in the wings. Banks are holding back big shadow inventories of homes. And that means you can get a great deal. They have to sell. You don't have to buy. You hold all the cards. Remember, the name of the game isn't "let's make a deal." It's "take it or leave it."

Third, in many places rental yields are terrific. It's cheaper to own than to rent. There have been some forced sales in my building in Miami. Based on my math, the latest buyers have bought condominium units for six times gross annual rents, and maybe 12 times net rents. We're talking net yields of 7% or more. And rents are rising, because so many former owners are now renters.

The fourth reason I'm bullish is that you can get a very cheap mortgage. Thirty-year conforming loans are going as low as 4.3%. Throw in the tax break on the interest, and you are talking cheap finance.

The fifth reason is that, as painful as this collapse has been, real estate has historically proven to offer very good long-term protection against inflation. Returns have typically averaged about 1% or 2% above inflation. At a time when everyone has been piling into gold, commodities and TIPS bonds to protect themselves against the possibility of inflation, it seems odd that the most popular and successful hedge, namely real estate, goes a-begging.

Thirty-year TIPS bonds are yielding just 1.6% over inflation, and shorter-term bonds offer even lower returns. Short-term TIPS are actually offering negative real yields.

The sixth reason I'm bullish is perverse, but I'm sticking by it. Everyone else is bearish. You cannot find a real-estate bull anywhere. No one wants to own this asset. No one wants to talk about it. No one wants to hear about it. Everyone seems to agree it's just going down, down, down — forever.

They said much the same about stocks in 1987, 2002 and 2009; Treasury bonds in 1982; and gold in 2000. I cannot prove this is capitulation, but it sure smells something like it.

As ever, if you aren't disciplined and patient, this probably isn't for you.

I have absolutely no idea when real estate is going to hit rock bottom. It may take several years. I suspect it will do so in different markets at different times. But there are good homes out there going really cheap. If you hunt down the bargains, you're disciplined about price, you get the right financing, and you hold on for five years or more, you'll probably do pretty well from here.

// Brett Arends is a senior columnist for MarketWatch and a personal-finance columnist for the Wall Street Journal.

Freddie Mac posts first quarterly gain in 2 years

Wed, 04 May 2011 16:59:31 GMT

Freddie Mac posts $676 million profit; seeks no additional federal aid

Derek Kravitz, AP Real Estate Writer, On Wednesday May 4, 2011, 5:12 pm

WASHINGTON (AP) -- Freddie Mac reported earning $676 million in the January-March quarter, the first time the bailed-out mortgage giant has posted a quarterly gain in nearly two years.

The government-controlled company requested no additional federal aid after receiving $13 billion over the past four quarters.

CEO Charles Haldeman attributed the net income to cost savings but did not elaborate.

The government rescued McLean, Va.-based Freddie Mac and sibling company Fannie Mae from the brink of failure in September 2008. The government estimates the bailouts will cost taxpayers as much as $259 billion.

But even with the net income gained, Freddie Mac posted a 29-cent per share loss attributable to common stockholders. That's because the loss takes into account $1.6 million in dividend payments to the government. That compares with a loss of $1.7 billion, or 53 cents a share, in the October-December quarter.

Analysts were quick to caution that the company's one-time gain was scant when compared with years of losses. The last time Freddie Mac posted a quarterly gain was the April-June quarter of 2009. They said they don't expect Freddie to report sustained earnings this year.

"This is not necessarily a climb to ongoing profit," said Jim Vogel, a debt strategist with FTN Financial Capital Markets. "They still have a long way to go."

Fannie and Freddie own or guarantee about half of all mortgages in the U.S., or nearly 31 million home loans worth more than $5 trillion. Along with other federal agencies, they backed almost 90 percent of new mortgages over the past year.

Fannie and Freddie buy home loans from banks and other lenders, package them into bonds with a guarantee against default and sell them to investors around the world.

Bargain prices help reduce glut of foreclosures

Tue, 26 Apr 2011 21:20:31 GMT

Supply of unsold US homes shrinks in hardest hit markets as investors find bargain prices

Derek Kravitz and Janna Herron, AP Business Writers, On Tuesday April 26, 2011, 6:01 pm EDT

WASHINGTON (AP) -- A wave of foreclosures is forcing down home prices in most major U.S. cities. But economists and real estate agents are noticing what they call a key first step for any housing recovery: a drop in the glut of homes for sale in markets hit hardest by foreclosures.

Low prices are leading investors to snap up foreclosed homes in Detroit, Las Vegas, Miami, Phoenix and Tampa. Those cut-rate sales are reducing prices in the short run. Yet they're also thinning the supply of homes -- clearing the way for higher prices in the long run.

For some buyers, the deals are now too good to pass up. A studio apartment on the Las Vegas strip that cost $500,000 at the height of the housing boom is now selling for roughly one-third that price. Half the homes listed in the Tampa Bay area are selling for less than $100,000, not far from some of Florida's top Gulf Coast beaches.

Such sales have helped shrink the combined supply of unsold homes in those five cities by 13 percent over the past year, according to local listing data analyzed by The Associated Press. Home prices in each of those markets are at or below 2002 levels, according to the latest reading of the Standard & Poor's/Case Shiller 20-city home price index.

"If we were to see several consecutive months of supply getting smaller, it would point to an improving housing market," said Celia Chen, senior director at Moody's Analytics. "Even if it is investors buying them, they are renting them out in hopes that prices in the next several years will rise."

Economists caution that a second wave of foreclosures, those that have been delayed by banks and backlogged courts, could throw the housing market back into turmoil. And few see home prices rebounding before the end of this year.

Home prices fell from January to February in 19 of the 20 metro markets tracked by the Case-Shiller index. At least 10 major metro areas are at their lowest point since the housing bubble burst. The index, released Tuesday, is slightly above the level reached in April 2009, the lowest point since the downturn began.

Getting rid of foreclosures and other risky properties is necessary for the market to turn around. When foreclosures and distressed properties are sold, home prices fall.

But as the supply of cheap homes shrinks, prices stabilize. Homeowners who had put off moving because they didn't want to sell during the downturn grow confident that they can fetch a decent price. That prompts more buying and selling. Prices rise more.

Most of the current foreclosure sales involve investors: Private equity firms; foreign and out-of-state buyers seeking vacation houses; individual investors hoping to rent out or quickly sell properties for a profit.

Many are scooping up cheap homes with cash, said Andrew Duncan, a Realtor who runs a Keller Williams franchise in Tampa. In March, 35 percent of previously occupied homes sold were bought entirely in cash, according to the National Association of Realtors.

"When the bargains do hit, there's more than one buyer looking for that bargain," Duncan said. "Buyers are losing out left and right when they bid because it's just so competitive."

Foreclosures have flooded the market in Miami. Three out of five homes sold there are foreclosures or short sales. (Short sales occur when lenders allow homes to be sold for less than what's owed on the mortgage.) Such sales have helped lower the median home price by 19 percent in the past year, to $159,800 in March.

At the same time, the supply of Miami-area homes for sale has dropped nearly 24 percent. It would take just seven months to clear those homes at the current sales pace. That's down from a 17-month supply just six months ago.

In Tampa, it would take just six months to clear the supply of unsold homes off the market. That's down from about eight months a year ago and 25 months in January 2008. Detroit's inventory of homes for sale has fallen 17 percent in the last year.

In Phoenix, the number of homes for sale has dropped nearly 10 percent over the past year. The median sales price of a single-family home sold last month was $118,500 -- down more than 12 percent from a year ago.

The supply of homes in Las Vegas could be cleared in less than seven months at the current sales pace. That's down from a 26-month supply in December 2007.

"It's like a feeding frenzy when a home goes on the market now," said Mike Shannon, a Detroit real estate agent who specializes in foreclosures. "We're getting a few dozen offers on some homes in a matter of days."

The thinning supply is due, in part, to a lull in foreclosures. They've dropped more than 56 percent in Tampa and nearly 64 percent in Miami. In those areas, the number of homes receiving an initial foreclosure notice has plummeted.

That could change quickly. Many banks are revisiting thousands of foreclosure cases. They've been spurred into action by federal regulators who have ordered reviews of how foreclosures were carried out over the past two years.

The logjam has been compounded in states such as Florida, New York and New Jersey, where foreclosures must be approved by a judge.

There are 1.2 million foreclosures expected this year nationally, according to foreclosure tracker RealtyTrac Inc., and the decline in foreclosure filings is only temporary, said Mark Vitner, senior economist at Wells Fargo.

"The problems are still there," Vitner said. "There are fewer early-stage delinquencies, so we are moving in the right direction. But the slowdown in foreclosures is just drawing the process out."

Banks are foreclosing while homeowners pursue loan modifications

Thu, 21 Apr 2011 20:34:38 GMT

Lenders say “dual tracking” protects their investment if the homeowner is unable to qualify for new loan terms. But regulators seeking to ban the practice say it lulls some borrowers into thinking they won’t have their homes taken away.

Read the full story

Foreclosure filings fall, while gas, food prices inch up

Mon, 18 Apr 2011 22:17:20 GMT

Published: Sunday, Apr. 17, 2011 - 12:00 am | Page 2D
A weekly roundup of economic news

Sacramento Kings

Sacramento got a shot at convincing the NBA that the Kings should remain here. The league has pushed off until May 2 the deadline for the Kings to file for relocation to Anaheim.

Why? NBA Commissioner David Stern said the league owners were swayed by Mayor Kevin Johnson, a former NBA star, who told them corporations here have come through with $7 million in pledges of sponsorships, luxury suites and other forms of support. Stern said the NBA also needs more time to check out the Anaheim deal. Even if Sacramento does lose the Kings, billionaire grocery magnate Ronald Burkle now says he wants to bring a new team to town.

Home sales

Any optimism generated by an increase in area home sales in March is dampened by a look behind the numbers. The region's housing market continues to be dominated by investors taking advantage of falling prices and distressed properties. Research firm DataQuick said Sacramento County's 2,153 sales were up 4 percent from 2,071 in March 2010. But the median price was $160,000 – an eighth straight month of year-over-year declines – and a record 35 percent of sales went to absentee owners. Is improvement ahead? Researcher RealtyTrac said foreclosure filings in the region fell nearly 22 percent in the first quarter compared with last year.

Unemployment

The state said the jobless rate in the four-county Sacramento area rose to 12.7 percent in March, up a fraction from February's 12.6 percent. But the slight uptick was offset by job growth, as the region added 2,900 jobs between February and March. The region continues to lag behind the state, which saw its job- less rate decrease to 12 percent in March from 12.1 percent in February. A modest sign of improvement: For the week ending April 2, the latest data available, California reported the largest decrease in new unemployment claims of any state, the Labor Department said.

Consumer prices

Labor Department data confirmed what shoppers' pocketbooks have been telling them: Prices for food and gas are going up. Consumer prices were up 0.5 percent in March, almost entirely because of increases in those two essential items. So far, economists said, the higher prices are not derailing the country's recovery from recession. But they're certainly not helping.

Green energy

Gov. Jerry Brown signed a bill requiring utilities to get more of their electricity from wind, solar and other green energy sources. Opponents say to expect higher electricity prices. Proponents tout thousands of new jobs, investment in new technology and cleaner air. Time will tell, but in a job-starved state, that sounds like a good list.

BofA finds it hard to shake off mortgage troubles

Fri, 15 Apr 2011 22:31:07 GMT

Pallavi Gogoi, AP Business Writer, On Friday April 15, 2011, 4:09 pm EDT

NEW YORK (AP) -- Bank of America Corp. is still trying to shake off troubles arising from mortgages written during the housing bubble.

Higher fees from battling lawsuits and costs related to its mortgage business led to a 39 percent decline in BofA's first-quarter earnings, the bank announced Friday. It wasn't what investors wanted to hear, since just three months ago the bank announced several big charges and settlements that seemed to resolve many of its mortgage problems.

"It seems like some of the mortgage-related issues that they said were behind them are actually not behind them yet," said Paul Miller, a bank analyst at FBR Capital Markets.

The bank is fighting lawsuits from investors and insurers who say that during the housing bubble they were duped into buying loans that were based on fraudulent documents. Bank of America set aside $1 billion to repurchase those mortgages and also added $352 million to its legal expenses in the first quarter. The bank had already taken a $4.1 billion expense in the previous quarter for mortgage repurchase claims and $1.5 billion for litigation expenses.

"The numbers are getting worse and nobody seems to have a handle on how bad this could be," said Miller.

BofA's stock fell 2.4 percent to $12.82. Bank of America has lost 34 percent of its value over the past year, making it the laggard among major banks.

The Charlotte, N.C. bank earned $1.7 billion, or 17 cents per share, compared with $2.8 billion, or 28 cents a share in the first quarter of last year. Revenue fell to $26.9 billion from $32 billion in the same period last year.

Most banks will likely have to pay more fees and fines in the future for investigations on other mortgage-related issues. Bank of America and other banks are waiting for a decision from the attorneys general of all 50 states who are investigating allegations that the banks bungled foreclosure documents, and a separate decision from the Securities and Exchange Commission on its probe into misleading mortgage-backed investments.

On Wednesday, Bank of America was among 16 of the nation's largest mortgage lenders who were directed by the Federal Reserve and other federal banking regulators to reimburse homeowners who were improperly foreclosed upon. The Fed warned of more fines in the future.

Separately, Bank of America paid $1.1 billion in cash to Assured Guaranty Ltd., an insurer that also said the bank should repurchase its shoddy mortgages. The bank also entered into an agreement worth $470 million to share losses on insuring additional mortgages. Assured Guaranty's stock jumped 24 percent to $17.60 after the news came out.

Much of Bank of America's mortgage-related woes stem from its 2008 acquisition of Countrywide Financial Corp., once the largest U.S. mortgage lender, which was facing bankruptcy after payment defaults and foreclosures.

Last month, Bank of America suffered another setback when it became the only one of the four largest U.S. banks that wasn't allowed by the Federal Reserve to increase its dividends. Moynihan had promised investors that he would increase dividends in the second half of the year.

Along with the 19 largest banks in the country, Bank of America was subjected to a "stress test" by the Federal Reserve to see if they were strong enough to stand up to another economic downturn. Only banks that passed the test were allowed to increase dividends. The Fed has asked the bank to submit a revised plan.

Brian Moynihan, CEO of Bank of America, tried to cast his bank's results in a positive light. "All the businesses have moved back to profitability except our mortgage business," he said in a conference call with analysts. BofA's Merrill Lynch division set records for revenue, asset management fees and brokerage income.

As the largest U.S. bank serving about half of the nation's households, Bank of America also provides a snapshot for the health of the American consumer and the overall economy. The bank said the number of customers who were late on their credit card payments by 30 days or more fell to near all-time lows in the first quarter. It was the sixth straight quarterly decline.

The bank set aside a total of $3.8 billion to cover losses from loans in the quarter, down sharply from $9.8 billion in the same period a year ago. That reflects an improving economy and fewer BofA customers falling behind on their debts.

The nation's largest bank by assets also announced that its chief risk officer, Bruce Thompson, will become chief financial officer, replacing Chuck Noski, who was named vice chairman. Noski couldn't relocate to Charlotte to fulfill his CFO duties because of an illness of a close family member, the bank said in a statement.

Southern California's military towns have taken a crushing blow in real estate collapse

Mon, 11 Apr 2011 22:08:08 GMT

By Marisa Agha
Special to The Bee
Published: Monday, Apr. 11, 2011 - 12:00 am | Page 3A
Last Modified: Monday, Apr. 11, 2011 - 7:10 am
SAN DIEGO – Empty homes, for-sale signs and the term "short sale" have become commonplace in this military town since the collapse of the real estate market. The foreclosure crisis has hit Southern California hard, having a particularly profound effect on the region's military families.

Foreclosures rose 32 percent in ZIP codes near military towns over the last three years, from 2008 to 2010, compared with 23 percent nationwide, said Rick Sharga, senior vice president of RealtyTrac in Irvine.

Eight Southern California cities ranked among the top 20 towns near military bases with the highest foreclosure rates in the nation in 2010, according to RealtyTrac. Half of those – Murrieta, San Diego, Oceanside and Fallbrook – are by Camp Pendleton.

Young soldiers who may have been first-time homebuyers were vulnerable in recent years, especially since many military families bought homes at the peak of the real estate bubble, Sharga said. California, and several of the towns where soldiers bought, lead the nation in overall foreclosures, he said.

Terese Gibney, 28, knows firsthand how the downturn in the real estate market affected the sale of property. She and her husband, who is in the Navy, bought a condominium in San Diego's hip Hillcrest neighborhood in 2007. A few months later, her husband received a new assignment. When the market fell, the couple were unable to sell or rent the property. Soon, Gibney said the condominium was worth well below the roughly $365,000 price they had agreed to pay for it. They have been trying to stave off foreclosure ever since.

"We were doing everything we possibly could to save ourselves and to save the property," said Gibney, who now lives in Texas while her husband is about to be deployed again. "We maxed out probably three credit cards. We just got to a point where we said we can't do it anymore. We're tapped out."

Realtor Jeffrey Kayle, who is working with Gibney to arrange a short sale of the property, said her family's situation is typical of a lot of military couples who bought property in San Diego as an investment before the recession. He said he constantly calls the bank to prevent foreclosure on the property.

"These are responsible people," he said. "They're trying to do the right thing."

Active military got caught in a wave of foreclosures that swept the region, Sharga said.

"Clearly, whatever safeguards are in place aren't working as they should," he said.

The Servicemembers' Civil Relief Act is federal legislation that protects active military against judicial and administrative proceedings that may affect them during their service. Some say the law has not always been honored.

"It's tough enough being in the military, serving the country and trying to keep your family together, much less having to go through a foreclosure process," Sharga said.

Katie Savant, government relations deputy director of the National Military Family Association in Washington, D.C., questions the methodology of using ZIP codes to establish the connection to military families owning homes. Active military move more frequently and rent homes more than own, she said.

Some military families, like civilians, may have taken on more of a financial risk during the height of the real estate bubble, forcing tough choices, she said.

"They can't ride out the market because they may have orders to move," Savant said, adding that active military have to decide whether to rent out their homes at market value or take a loss.

Camp Pendleton offers a variety of financial planning and assistance for Marines and sailors, including free legal advice regarding loans and consumer, debt and credit problems, said 2nd Lt. Ryan Welsh, base spokesman. Additionally, the base offers one-on-one training, group classes and unit training with a focus on financial education, consumer awareness, credit information and investments.

There are two main reasons soldiers and their families have been facing foreclosure notices, said Shad Meshad, president and founder of the National Veterans Foundation in Los Angeles.

"They're young. Youth and ignorance, and they're the best people to prey on," said Meshad, a Vietnam War veteran.

About 40 percent of calls to the foundation's Lifeline for Veterans Call Center in Los Angeles from January to September in 2010 had to do with a veteran asking for some sort of financial help on a housing issue – either a mortgage payment or rent or foreclosure, said Tyrone Ballesteros, office manager for the foundation's call center in Los Angeles. That is about a 5 percent increase over the same period in 2009, he said.

Ballesteros said he receives the largest number of calls relating to foreclosures from Los Angeles to San Diego compared with other parts of the state.

Predatory lending was a factor, he said.

"They make it easy to get on a property, and they don't care whether you can make the payment or not," Ballesteros said. "These guys are young and they want a place for their family. Sure, they jump all over it. … They want the American dream."

Foreclosures have large slice of market, but narrow range of buyers

Thu, 07 Apr 2011 23:33:42 GMT

By ALAN J. HEAVENS
The Philadelphia Inquirer
Published: Thursday, Apr. 7, 2011 - 5:11 am
PHILADELPHIA -- Foreclosures, sad to say, are a fact of life in today's housing market.

The number of U.S. homes in various stages of mortgage delinquency, though not growing as quickly as in the past three years, now stands at 1.8 million, according to CoreLogic, a business-services and -information company.

This "shadow inventory" - about nine months' supply - includes 470,000 houses already repossessed by lenders.

Last year, 28 percent of all homes sold in the United States were properties repossessed by lenders, said Rick Sharga, chief economist at RealtyTrac, a California firm that tracks foreclosures. In a normal year, he said, distressed homes would have been just 5 percent of the sales.

In much of the country - especially Florida, Arizona, and Nevada, the states hardest hit by foreclosures - the chief buyers of repossessed houses are either investors able to put down all cash or the 25 percent that lenders typically require, or first-time purchasers using mortgages insured by the Federal Housing Administration.

Nationally, investors gobble up more than half of the bank-repossessed properties.

"Most are rehabbing and renting them quickly to obtain a positive cash flow, then refinancing the property and taking the cash to buy another one," Sharga said.

They are looking at three- to five-year investments, he said, "so the current short-term depreciation of real estate values isn't a big deal."

Other investors are doing wholesale flipping, Sharga said, buying "the most absolutely discounted properties, doing minor repairs and flipping to another investor, buying 20 cents on the dollar of the last sale price and selling for 50 cents."

But in the Philadelphia region, especially the northern and western suburbs, where Prudential Fox & Roach agent Donald Sepety works, 85 percent of his primary buyers include first-timers and "pharmaceutical-company employees in the higher end of the market, who are going to fix up these houses anyway."

The first-time buyers Sepety sees are acquiring houses in the $130,000- to-$330,000 price range - which, in the geographic areas where he works, has been less affected by delinquencies and defaults.

In the past year, he has sold about 25 repossessed houses, from one in Malvern, Pa., for $579,000 to one in West Norriton, Pa., for $130,000.

"I handle two a month," Sepety said. Having to deal with the banks and the legal system, "that's all I have time for."

It can take 30 days or more for a county to record a deed after a sheriff's sale, for example, so "settlements are always being delayed," he said.

Just because sales here and elsewhere tend to be all-cash or FHA-insured doesn't mean conventional lenders, including the ones who foreclosed, won't provide mortgages.

"A number of lenders are willing to give preferred financing on their repossessions, letting them turn a loss into an asset," Sharga said. "The real issue the lenders have is risk, because no one can agree on the actual valuation of these properties, so lenders want a bigger down payment."

If you're looking for a vacation-home bargain in the foreclosure-hammered Florida or Arizona markets, he said, the biggest mistake you can make is "paying the sticker (list) price and not looking for the discount for repossessions on top of that."

In these parts, however, which were not hammered as badly as other areas of the country, sale prices so far "have been pretty close to fair-market value for the condition of the home," Sepety said.

Emphasis on "condition.

"The biggest job I have dealing with prospective buyers is getting them to understand that they are acquiring the property "as is,' " Sepety said. "The lender is going to do nothing to bring the house up to township code, for example, and the buyer has 60 to 90 days to have the necessary work done" to get a certificate of occupancy before moving in.

Inspections before buying are critical, Sharga and Sepety said. They allow buyers to negotiate with lenders to lower the homes' prices, Sepety said.

For example, Fannie Mae, which had repossessed a Malvern house Sepety was selling, lowered the price $18,000 after it was made aware of the extent of the repairs needed.

A common mistake is to "underestimate the time and expense to get the house in good condition," Sharga said. He urges prospective buyers to "take along a contractor when doing the inspection."

He recommended the FHA 203(k) loan, which "lets you build repair costs right into the mortgage of owner-occupied properties."

Some repossessed houses, after being on a bank's books for a year or more, have been empty a long time, Sharga said.

Some homeowners don't tell lenders when they vacate their properties, "so the banks can get in and have the house winterized," Sepety said. One repossession in Telford "had 18 pipes that burst when they froze and then thawed, because the heat hadn't been turned on."

In addition, a lot of people "had enough trouble paying the mortgage in the last few years, so they had to let things go," he said.

"If you have no money to spare, you aren't going to fix a broken window."

REPOSSESSION BUYER'S GUIDE:

RealtyTrac offers these tips:

-Find properties before they're listed, which ensures the bank a short sales cycle and saves it the expense of listing and marketing. Contact a lender and ask for the asset-management department or the person in charge of such properties. (If a property you're interested in is already listed, contact the sales agent or have your agent do so.)

-Delay making an offer. Get as much information as possible. Are there inspection reports? Is the property being sold "as is," or does the bank plan repairs? How should offers be presented? How long will it take for the bank to review and accept an offer?

-Know the bottom line. The lender wants to recoup the amount it is owed, plus foreclosure-related expenses, to avoid a loss on the books. This information is available in public-foreclosure documents and will help in negotiation.

-Be ready to haggle about price. The lender will likely make a higher counteroffer, but more than likely will accept a lower offer. Be patient and chip away slowly, to avoid paying more than market value.

The foreclosure mess isn’t going away

Mon, 04 Apr 2011 22:17:15 GMT

By Zachary Roth zachary Roth – Mon Apr 4, 11:30 am ET

We've told you before about how big banks cut corners on paperwork over the last few years in order to speed struggling homeowners into foreclosure. And a "60 Minutes" report that aired last night offers fresh anecdotal reporting on just how irresponsible--and potentially fraudulent--the banks' practices were. Meanwhile, compelling video of a grandmother being evicted from her home by a SWAT team last week suggests the banks aren't slowing down their rush to foreclosure and eviction.

Banks profit by processing a vast number of homes into foreclosure as quickly as possible. But as "60 Minutes" details, many of the mortgages at issue were bundled and sold from one Wall Street investor to another during the housing boom, with scant attention paid among financial players to the actual underlying ownership documents. And as the foreclosures unwind in a slew of court proceedings nationwide, many banks have produced dubiously rendered legal documents that seek to shore up the ownership paperwork long after the original mortgage transactions were on the books. In some cases, financial institutions paid contract companies who employed an army of "robo-signers"—office workers who forged signatures on mortgage documents that were then used to initiate foreclosures.

You can watch the full 14-minute report here:

Scott Pelley of "60 Minutes" spoke with one former robo-signer, Chris Pendley, a man who had been paid to sign the name "Linda Green" thousands of times over the course of an average workday on mortgage documents.

"When you came in to Docx on your first day, what did they tell you your job was gonna be?" Pelley asked.

"They told me that I was gonna be signing documents for using someone else's name," Pendley remembered.

"Did you think there was something strange about that in the beginning?" Pelley asked.

Yeah, it seemed a little strange. But they told us and they repeatedly told us that everything was above board and it was legal," Pendley said.

Pendley told Pelley he had no previous experience in banking, in legal documents, and that there were no requirements for the job.

"You had to be able to hold a pen?" Pelley remarked.

"Hold a pen," he agreed.

Asked if he understood what these documents were, Pendley said, "Not really" . . . .

Pendley showed us how he signed mortgage documents as "Linda Green." He told us Docx employees had to sign at least 350 an hour. Pendley estimates that he alone did 4,000 a day.

There was an actual Linda Green, Pendley discovered, but she was no bank president either; she is a former shipping clerk for an auto parts store who was also hired on as a robo-signer at Docx. One plaintiff in a pending lawsuit discovered that Green is named as a vice president for 20 different banks in different mortgage documents, all bearing strikingly different renditions of her signature. She didn't agree to an on-camera interview, but she told Pelley that the company selected her name because it was short and easy to sign rapidly on the doctored ownership documents.

All 50 state attorneys general are currently conducting an investigation into the foreclosure mess--including cases that involve forged documents like these. And Shelia Bair, head of the Federal Deposit Insurance Corporation, told CBS she thinks the banks should have to pay billions to set up a compensation fund for those who are being forced to accept foreclosure without proper documentation.

But if you thought all this might have chilled the banks' zeal to push struggling borrowers from their homes, think again.

The footage below from a local news station shows Catherine Lennon, a grandmother from Rochester, New York being forcibly evicted from her home by a SWAT team.

Lennon has said that though she missed some mortgage payments after her husband died in 2008, she subsequently began making payments again. But because it was her husband's name, not hers, on the official mortgage documents, Fannie Mae wouldn't accept her money, and moved her house into foreclosure.

Federal lawmakers intervened, and Lennon may soon get her house back--she's been staying in a homeless shelter lately. But countless other Americans who are in similar positions may not be as lucky.

(AP Photo/David J. Phillip)

Most units in Sacramento's upscale L Street Lofts project face foreclosure

Sat, 02 Apr 2011 11:58:10 GMT

By Robert Lewis and Bob Shallit
rlewis@sacbee.com
Published: Wednesday, Mar. 30, 2011 - 12:00 am | Page 1B
When developer Sotiris Kolokotronis opened his sleek, mixed-use loft project at 18th and L streets, it was a physical announcement that Sacramento had arrived.

The new lofts – paired with an apartment, restaurant and retail complex Kolokotronis had already built across the street – transformed the once-deserted corner into an epicenter of midtown's new, hip scene. Former Kings star Kevin Martin bought a $1.3 million penthouse in 2008. Mayor Kevin Johnson lived here for a time.

But in yet another reminder of how hard the recession devastated the local economy, the unsold portion of Kolokotronis' L Street Lofts – about three-quarters of the seven-story, 92-unit condominium development at 1818 L St. – is scheduled to be sold on the courthouse steps next month as part of a foreclosure auction.

The sale notice was recorded March 18 after L Street Lofts LLC defaulted on a $33 million loan held by OneWest Bank. A OneWest Bank spokeswoman declined to comment.

Kolokotronis did not return calls for comment.

Money problems and legal woes have dogged the L Street Lofts project and developer Kolokotronis for years. One of the project's investors, Resmark Equity Partners LLC, sued Kolokotronis' development partnership in 2008 alleging cost overruns and lower-than-expected sales of units at 1818 L St. Around the same time, Otto Construction – the builder – sued the development partnership for alleged breach of contract, claiming the company owed $1.2 million.

Kolokotronis reached a settlement with Resmark. The developer has not, however, been able to reach an agreement with the bank. A notice of default was originally filed in 2008 on behalf of La Jolla Bank, which later transferred the loan to OneWest. Another notice was filed in August 2010 showing that L Street Lofts LLC owed $3.8 million in delinquent loan payments.

The property is set for foreclosure auction at 1:30 p.m. April 13.

The ongoing foreclosure proceedings have helped keep occupancy in the building low, according to several current residents and Donald Stitt, the Coldwell Banker real estate agent trying to sell Martin's old unit in a short sale. It was recently priced at $899,000.

As a result of the default, OneWest has some control over sales, and the bank has helped nix several deals, Stitt said. Records show 70 of the 92 units are unsold and in foreclosure.

The ongoing money troubles haven't affected loft residents on a day-to-day level "except maybe there are fewer neighbors you run into," said Jeff Goldman, head of the residents' homeowners association.

Current loft residents expressed conflicting views about the pending foreclosure sale of much of their building.

A sale might not be a bad thing if it means a new owner will come in and sell the vacant units, said Rob Miller, the chief executive officer of PeopleFinders.com. Miller bought two penthouse units in 2007 primarily for entertaining and fundraising events.

But he and other owners worry that values will plummet if "somebody comes in and sells them for 50 cents on the dollar on the courthouse steps. That can't be a good thing."

Valerie Holcomb, who bought a loft with her husband in August 2008, also worried values could drop if a new owner turns the units into rentals.

"This is our home but it's also an investment," Holcomb said.

Goldman called the building "iconic, one of a kind," and said it is still a cornerstone for midtown.

"I doubt we'll see a tower like this again soon," Goldman said.

Summary Box: Construction spending falls

Sat, 02 Apr 2011 03:53:47 GMT

<h2 id="story_subheadline"> </h2> <div class="share upper"><style type="text/css"> #scsharelink { background: url(http://media.sacbee.com/static/sacconnect/images/share-icon.png) no-repeat left center; padding-left: 20px; }</style> <div class="facebook_like_small" style="margin-top: 6px"><span class="source-org vcard"><span class="org fn">The Associated Press</span></span></div> </div> <div class="pubdates" style="padding-bottom: 1.5em"> <div class="published" title="2011-04-01T13:43:38-0700" style="padding-bottom: 0px">Published: Friday, Apr. 1, 2011 - 1:43 pm</div> </div>  <div id="articlebody" class="lingo_region entry-content"> <p>BUILDING DOWN: <a class=" lingo_link" rel="nofollow" _old_href="http%3A%2F%2Ftopics.sacbee.com%2FConstruction%2Bspending%2F" style="font-style: normal; display: inline; font-family: Georgia, "Times New Roman", Times, serif; font-size: 15px; cursor: pointer; font-weight: 400" href="http://topics.sacbee.com/Construction+spending/"><font color="#0066cc" face="">Construction spending</font></a> fell for a third month in February, dropping to the lowest level since 1999.</p> <p>HOUSING DOWN: Spending for both single-family homes and apartments dropped in February. The <a class=" lingo_link" rel="nofollow" _old_href="http%3A%2F%2Ftopics.sacbee.com%2Fhousing%2Bmarket%2F" style="font-style: normal; display: inline; font-family: Georgia, "Times New Roman", Times, serif; font-size: 15px; cursor: pointer; font-weight: 400" href="http://topics.sacbee.com/housing+market/"><font color="#0066cc" face="">housing market</font></a> continues to struggle with record levels of foreclosures.</p> <p>OUTLOOK: The prolonged weakness has pushed total <a class=" lingo_link" rel="nofollow" _old_href="http%3A%2F%2Ftopics.sacbee.com%2Fconstruction%2Bactivity%2F" style="font-style: normal; display: inline; font-family: Georgia, "Times New Roman", Times, serif; font-size: 15px; cursor: pointer; font-weight: 400" href="http://topics.sacbee.com/construction+activity/"><font color="#0066cc" face="">construction activity</font></a> down to a seasonally adjusted annual rate of $760.6 billion, about half of the $1.5 trillion rate economists view as a healthy pace. They say it take four years for the industry to fully recover.</p> </div>

Dismal housing numbers lend urgency to new mortgage rules

Tue, 29 Mar 2011 19:22:24 GMT

By Kevin G. Hall and David Lightman
McClatchy Newspapers
Published: Tuesday, Mar. 29, 2011 - 2:57 pm
WASHINGTON — U.S. home prices continue falling, new data showed Tuesday, giving urgency to important fixes taking shape this week aimed at fixing specific causes of the U.S. financial meltdown.

January home prices fell 1 percent from a month earlier and 3.1 percent from January 2010, as measured by the S&P/Case-Shiller index, a composite of sales prices in 20 major U.S. housing markets. National prices have slumped for six straight months and home prices are down 31.8 percent from their 2006 peak.

"The bottom line is we just have a boatload of loans sitting in foreclosure or close, and we have to work through those loans before we can find a bottom," said Mark Zandi, the chief economist for forecaster Moody's Analytics.

The dismal numbers reflect the deep damage done by a financial crisis that began with problems in mortgage finance. This week may prove a pivotal one for fixing some of what went wrong.

The Federal Deposit Insurance Corp. approved Tuesday a rule that would force Wall Street to retain an ownership share when issuing complex bundles of mortgages that poisoned the global financial system.

Lack of "skin in the game" allowed Wall Street firms to take millions of shoddy U.S. mortgages and profitably bundle them into complex bonds in a secondary market, where they were dumped on unsuspecting investors. The FDIC measure, backed by other regulators, is designed to restore investor trust in this secondary market, which is vital to mortgage lending.

Separately, the Federal Reserve imposes new rules on Friday that'll end the practice of allowing mortgage brokers to receive a bonus from lenders — a legalized kickback — when they get a borrower into a loan with a higher interest rate than the rate for which they qualified. During the housing boom, lenders rewarded brokers for getting borrowers into ill-suited and often predatory loans.

"I think the importance of what you're seeing as you group the pieces together is the remaking of the mortgage system after the crisis ... It is very, very important," said Barry Zigas, the director of housing policy for the Consumer Federation of America.

Last year's broad overhaul of financial regulation also created a new Bureau of Consumer Financial Protection, which opens for business on July 1, to better police mortgage lending.

Congressional Republicans are trying to defund and defang the new bureau, and Tuesday, they unveiled eight bills designed to put to death mortgage finance titans Fannie Mae and Freddie Mac. The two have been in government hands since September 2008.

The measures don't provide a timetable, but would progressively lower the limit of how many mortgage bonds the two could own over a five-year period, getting government almost completely out of mortgage finance.

"Today marks the start of a process," said Rep. Scott Garrett, R-N.J., the chairman of a subcommittee that deals with the agencies. "The culmination of our efforts will ... return our housing system to the private marketplace."

Fannie and Freddie buy loans from lenders and bundle them into bonds sold to investors, a process called securitization. Wall Street took much of their bonds during the housing boom, before weak lending standards brought down the entire system of mortgage finance. Today Fannie and Freddie do about 90 percent of the pooling of new mortgages.

The FDIC's proposed rule seeks to have Wall Street bundlers of complex bonds retain 5 percent of any loan that isn't considered a Qualified Residential Mortgage. The FDIC defined Qualified Residential Mortgage as a loan that has a 20 percent down payment from the borrower, whose credit history is free from late payments and whose monthly mortgage payment won't exceed 31 percent of pre-tax income. Government-backed loans and those placed with Fannie and Freddie also would be exempt.

Critics complain that this effectively would reward 1980s-type underwriting by lenders.

"That's back to what the underwriting guidelines were before the drive to make credit accessible for people of low income," Zigas said.

John Taylor, the president of the liberal National Community Reinvestment Coalition, charged in a statement that Congress and the Obama administration "would like to limit homeownership to the well-heeled." That's a reference to the administration's Feb. 11 White Paper, which called for down payments of at least 10 percent for government-backed mortgages, higher than the traditional 3 percent.

Wall Street warned that attempts to improve the quality of credit could limit its extension to borrowers.

"Such a step could further delay the housing-market recovery and have far-reaching negative implications to the public and investors, as well as for the broader economy," Richard Dorfman, a managing director of the Securities Industry and Financial Market Association, said in a statement.

C.A.R. to launch short sale website

Fri, 25 Mar 2011 00:34:45 GMT

With fewer than three of five short sales closing in California, C.A.R. is well aware of the complexity and difficulty of navigating lenders’ and servicers’ short-sale procedures. To assist both REALTORS® and consumers, C.A.R. will launch a website specifically focused on short sales.

On the new site, which launches Friday, visitors will find information ranging from short sale news, foreclosure timelines, and red flags to watch for, to legal Q&As, a short-sale glossary, and much more.

Additionally, consumers can find a REALTOR® to assist with their short-sale transaction, what to expect as a buyer or seller of a short-sale property, and whether they qualify for government programs to keep their home.

For additional information, and to get the URL for the short sale website, check the homepage of car.org on Friday, March 25.

Freddie Mac Turns to Youtube to Dispel common Foreclosure Myths

Wed, 23 Mar 2011 01:34:22 GMT

Freddie Mac Turns to YouTube to Dispel Common Foreclosure Myths

By Freddie Mac

Published: Monday, Mar. 21, 2011 - 9:11 am
MCLEAN, Va., March 21, 2011 -- /PRNewswire/ -- Freddie Mac (OTC Bulletin Board: FMCC) is helping consumers separate foreclosure fact from fiction in a new video series launched today on its YouTube Channel (http://www.youtube.com/FreddieMac). Each 90- to 120-second video dispels one of five common myths that could prevent people from keeping their homes if they face foreclosure. It is based on content from the Freddie Mac Get the Facts on Homeownership education and outreach materials.

News Facts

•Myth 1: If my house is foreclosed, I can never buy a house again -- the foreclosure will stay on my record forever.
•Truth 1: Foreclosure can have a devastating effect on your finances and you personally, but you can recover. Use the time after foreclosure to prepare yourself for successful homeownership the second time around by creating a spending and savings plan and rebuilding your credit.

•Myth 2: I should stop paying my mortgage so I can get assistance with my mortgage payments.
•Truth 2: Stopping payment on your mortgage only hurts your situation and can expose you to foreclosure and credit difficulties that could require years to rebuild.

•Myth 3: If I'm late on my monthly payments, I'll lose my house.
•Truth 3: If you have a financial hardship and fall behind, it's possible to keep your house and get back on track if you contact your lender as soon as possible to discuss your options. You can also contact a HUD-approved housing counselor by calling the Homeowner's HOPE Hotline at 888-995-HOPE (4673).

•Myth 4: I am getting many offers for help from a variety of people. They are probably all scams.
•Truth 4: Scam artists often target homeowners who are struggling to meet their mortgage commitment or anxious to sell their home. It's important to always open and respond to communications from your lender, particularly if you've already missed a mortgage payment. In addition, if you are in a financial crisis or facing foreclosure, make sure you work with your lender or a HUD-approved counseling agency to avoid common scams.

•Myth 5: My lender is not responding to my inquiries, so I should just give up and face foreclosure.
•Truth 5: Whatever you do, don't walk away, and don't give up. It may take several attempts to reach your lender because their call volume can be very high.

Quotes

Dwight Robinson, Freddie Mac senior vice president of Corporate Relations and Housing Outreach

•"Individuals are worried about scams and fraud, and don't know who to safely turn to for help."
•"The videos provide information and resources that just might keep individuals from losing their home."
•"This is another way we are trying to make a difference in communities across the nation."
•"Housing counselors and lenders have traditionally delivered the Get the Facts messages to consumers. Today we are utilizing a popular and powerful tool --YouTube -- to deliver this pertinent information to consumers."

Calif home prices, sales fall in Feb from year ago

Sat, 19 Mar 2011 12:26:22 GMT

The Associated Press
Published: Thursday, Mar. 17, 2011 - 2:40 pm
Last Modified: Thursday, Mar. 17, 2011 - 3:32 pm
LOS ANGELES -- Home prices and sales dipped in California from year-ago levels as "short sales" and sales of foreclosed homes accounted for more than half of home resales in the state, a tracking firm reported Thursday.

DataQuick Information Systems said the median price paid in the state last month was $244,000, down 2 percent from $249,000 in February 2010, although the median was up 2.1 percent from $239,000 in January.

Home sales in February declined 2.8 percent to 27,320 from 28,111 in the year-ago period and fell 1.4 percent from 27,706 in January.

The firm said both the percentages of absentee investors buying homes and buyers paying all cash are the highest on record.

DataQuick President John Walsh said traditional homebuyers are waiting to see whether prices have bottomed out. At the same time, he cautioned that home sales in January and February are not typically good indicators of what will happen in the near future.

"Over the next few months we'll begin to see how much of the pent-up demand will play out during the traditional spring-summer home-buying season," Walsh said. "Our sense is that we could see sales jump significantly from today's subpar levels if the economic outlook improves."

This winter, investors and cash-only buyers have gone bargain-hunting for distressed homes.

Sales of homes foreclosed on over the past year accounted for 40.1 percent of last month's sales in February. Short sales, where lenders allow homes to be sold for less than what is owed on them, made up 18.9 percent of resales.

In a nine-county region of Northern California, total home sales dipped 0.9 percent to 4,991 in February from a year earlier. In the six-county region of Southern California, sales dropped 6.4 percent to 14,369.

The median home price in Northern California fell 4.7 percent to $337,250 last month from $354,000 in February 2010. In Southern California, the median home price was $275,000, unchanged from a year ago.

Banks drag feet on short sales, survey finds

Mon, 14 Mar 2011 21:27:17 GMT

The CALIFORNIA ASSOCIATION OF REALTOR® (C.A.R.) published its findings of a survey this week, which show that tedious lender requirements and poor communication hamper short sales.

MAKING SENSE OF THE STORY

Fewer than three of five short sales close in California, illustrating the complexity and difficulty of navigating lenders’ and servicers’ short sale procedures, according to C.A.R.’s survey, which gauged REALTORS®’ experience in working with short sale transactions – transactions in which the lender or lenders agree to accept less than the mortgage amount owed by the current homeowner.
Although not every homeowner or mortgage is eligible for a short sale, those who are able to finalize a short sale avoid a foreclosure on their credit record and can move on with their lives.
Banks are taking much longer to respond to short sale offers than those specified in government guidelines for banks. Nearly two-thirds of survey respondents said banks took longer than 60 days to respond to short sale offers. Often, this results in buyers walking away from the transaction.
“Increasing the number of successful short sale transactions is one important way we can help California families avoid foreclosure and move our economy closer to recovery,” said C.A.R. President Beth L. Peerce.
C.A.R. is asking government agencies, such as the U.S. Dept. of the Treasury, to force banks to complete all short sales following HAFA guidelines and to comply with the program’s time frames.

Read the full story

C.A.R. issues open letter on short sales

Wed, 09 Mar 2011 23:00:12 GMT

On Thursday, March 10, C.A.R. is running an open letter in several newspapers statewide, addressing the numerous challenges associated with short sales.

The open letter addresses the following topics: The benefits of doing a short sale rather than a foreclosure; the inconsistencies with short sale processes at banks; the challenges of working with multiple lien holders; and the slow and/or nonexistent communication by banks and servicers to REALTORS®, homeowners, and buyers.

The letter closes by calling on regulators, elected officials, nonprofits, business organizations, companies, and individuals with a stake in California’s economic future to resolve the short sale issue and other issues that get in the way of an economic and housing recovery.

The letter will be published in the Bakersfield Californian, Fresno Bee, Los Angeles Times, Mercury News, Sacramento Bee, San Diego Union-Tribune, and San Francisco Chronicle.

Read the letter

House Republicans: Failing mortgage-aid programs should go

Tue, 08 Mar 2011 23:46:34 GMT

By Barbara Barrett
McClatchy Newspapers
Published: Tuesday, Mar. 8, 2011 - 2:46 pm
Last Modified: Tuesday, Mar. 8, 2011 - 3:07 pm
WASHINGTON — A handful of foreclosure prevention measures run by the Obama administration are so ineffectual, inefficient and complicated that, according to Republicans in the House of Representatives, the programs should be killed outright.

The House is scheduled to vote this week on getting rid of a refinance program for Federal Housing Administration loans and another program, scheduled to begin next month, that would help homeowners with delinquent payments.

The House Financial Services Committee is expected to vote Wednesday morning on ending two other measures: One of them is a massive effort that was designed to adjust up to 4 million mortgages but so far has tackled just half a million successfully. The other is the Neighborhood Stabilization Program, which steers money to communities hit hard by foreclosures.

The Treasury Department and many Democrats argue, though, that the programs — though flawed — are fixable, and consumer advocates say the measures offer the last, best hope for many struggling families.

"It's all we have," said Hazel Mack-Hilliard, the director of the mortgage foreclosure project with Legal Aid of North Carolina. "To have nothing and just say let the lenders do it, that's worse than nothing."

The bills' chances of becoming law are slight, because Democrats control the Senate and the Obama administration supports the programs. But Republicans say their effort will shine a light on inefficient programs that they say aren't working and, in the worst cases, do more harm than good.

Altogether, killing the programs could save the federal government a few billion dollars. But the real problem, said Rep. Patrick McHenry, R-N.C., is that families sometimes are hurt more than they're helped. McHenry will read from constituents' stories at Wednesday's committee meeting, telling of how homeowners were strung out on the hope of receiving mortgage modifications only to be told eventually that they didn't qualify.

In the meantime, he said, they've exhausted their savings, killed their credit and lost places to live.

"It's just heartbreaking stuff," McHenry said. He's sponsored the HAMP Termination Act, which aims to kill the Home Affordable Modification Program.

Through that program, the government pays banks and other servicers to adjust mortgages voluntarily. But of nearly $30 billion allocated to HAMP, only $1 billion has been spent.

Neil Barofsky, the special inspector general for the modification programs through the Troubled Asset Relief Program, told Congress last week that "HAMP has been beset by problems from the outset and, despite frequent retooling, continues to fall woefully short of meeting its original expectations."

He blamed the Treasury Department for refusing to adopt "meaningful goals and benchmarks" for the program, but he stopped short of saying the Home Affordable Modification Program should be shuttered altogether.

Treasury Secretary Timothy Geithner told Congress in separate testimony last week that he wants to keep the program.

The mortgage crisis isn't going away. Despite other signs of economic recovery, foreclosure filings across the country continue at a record pace. RealtyTrac, which tracks foreclosures around the U.S., predicts that filings will increase another 20 percent this year, topping 3 million, according to Barofsky's testimony.

Republicans' efforts to kill the assistance programs come as mortgage servicers are under congressional investigation for what Democrats describe as foreclosure fraud, robo-signing and other abuses.

At a hearing Tuesday in his home city of Baltimore, Rep. Elijah Cummings, the top Democrat on the House oversight committee, described the foreclosure crisis as a "wrecking ball" through the nation's communities.

Cummings said he was seeking documents from 10 mortgage-servicing companies: Bank of America, Wells Fargo & Co., JPMorgan Chase & Co., CitiMortgage Inc., Ally Bank/Residential Capital LLC, U.S. Bank Home Mortgage, SunTrust Bank, PHH Mortgage, PNC Mortgage/National City and MetLife Home Loans.

A report last month from the Congressional Research Service said servicers often had financial incentives to move ahead with foreclosures rather than modify mortgages, even when it wasn't in the best interests of the investors in the mortgages.

On Wednesday, the House is scheduled to begin debate on two measures: to kill the FHA Refinance Program and the Emergency Mortgage Relief Program.

The first, designed to refinance homes purchased under FHA loans, has resulted in the refinancings of just 22 homes as of the end of December, according to the Congressional Research Service. The second, meant to help homeowners who face delinquent payments, is scheduled to begin next month.

Votes in the full House are expected by the end of the week.

The other two bills — the HAMP Termination Act and the National Stabilization Program Termination Act — are expected to pass committee votes Wednesday. They could come to the House floor within a month.