Obama Says 9 Million Americans Can Reduce Mortgage Payments
2009/04/09, 2:47 pm
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WASHINGTON — President Barack Obama said Thursday that up to 9 million Americans can reduce their mortgage payments by refinancing using government programs. Speaking at the beginning of a White House roundtable about housing finance, Obama said mortgage rates are at historic lows and a typical homeowner can now save about $2,000 a year by refinancing. “The programs that have been put in place can help responsible folks,” Obama said.


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FHA uses special teams to check on lenders
2009/04/06, 6:42 pm
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The FHA’s Special Work Assessment Teams have been reactivated to conduct unannounced, onsite reviews of problem lenders, according to HUD Secretary Shaun Donovan and Federal Housing Commissioner Brian Montgomery.

There currently are 36,000 FHA-approved brokers, up from 16,000 in mid-2007, and 3,300 FHA-approved lenders, up 525 percent over the last three years.

In response to rising FHA delinquency rates, HUD’s proposed 2010 budget includes funds to hire more staff to handle lender approvals and monitoring.

Source: American Banker, Paul Muolo and Brian Collins (04/06/09)

5 tips for homebuyers seeking a mortgage
2009/02/18, 5:49 pm
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5 Tips for Homebuyers Seeking a Mortgage
Here’s a warning for potential borrowers: Nervous lenders have tough new rules and are paperwork crazy.

“Borrowers are going to have to prove they are the borrower they say they are,” says Keith Gumbinger, vice president of HSH Associates, a mortgage-industry publisher in Pompton Plains, N.J.

Gumbinger says homebuyers should consider these things before they apply for a loan.

1. Down payments are critical. Borrowers should expect to put down at least 10 percent for a “conforming loan” – a mortgage that Fannie Mae and Freddie Mac will purchase.

2. Credit scores count. A 720 on the 850-point FICO rating scale will get a borrower access to the best rates. Rich Bira, branch manager of FCM Direct Lender in Chicago, says: “A score between 720 and 739 gets 0.125 percent added to the rate, a score between 700 and 719 gets 0.375 percent added to the rate, and a score between 680 and 699 gets 0.5 percent added to the rate.”

3. Consider VA and FHA. Borrowers without down payments or with less than stellar credit scores should consider these government-insured loans offered through the Federal Housing Administration of the Veterans Administration.

4. Unearth the records. Before applying, borrowers should organize tax, banking and other records that prove income, savings and debts. They should also expect to be patient about what may seem to be endless requests for information.

5. Get rid of debts. Limiting debts, including what borrowers expect to pay for the mortgage, to less than 43 percent of gross income is important.

Source: Chicago Tribune, Mary Umberger (02/15/09)

Top Mortgage Servicers Control 66% of Market
2009/02/17, 7:09 pm
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National Mortgage News and the Quarterly Data Report indicate a jump in market share of the top five residential servicing firms to 66.94 percent at the end of 2008 from 55.93 percent at the end of 2007, indicating an increase in industry consolidation.

Servicing rights among the firms jumped 27 percent to $6.513 million. Bank of America’s acquisition of Countrywide Financial made it the top servicer, with a market share of 21.13 percent.

Source: National Mortgage News, Paul Muolo (02/16/09

Banks halt foreclosures
2009/02/16, 5:06 pm
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By Alan Zibel, AP Real Estate Writer
WASHINGTON — The biggest players in the mortgage industry are halting home foreclosures while the Obama administration develops its plan to help struggling homeowners.
The White House said Friday that President Barack Obama will outline his much-anticipated plan to spend at least $50 billion to prevent foreclosures in a speech Wednesday in Arizona, one of the states hardest hit by the foreclosure crisis.

“It’s not intended to be measured by one day’s market scorekeeping, but instead to ensure that the 10,000 Americans each day that have their homes foreclosed on, and the millions more that are barely getting by, are protected,” White House press secretary Robert Gibbs said Friday without providing other details.

Treasury Secretary Timothy Geithner announced a revised effort to stabilize the financial system on Monday. It contained outlines of a foreclosure-relief effort, but few details.

Though lenders have beefed up their efforts to aid borrowers over the past year, their action hasn’t kept up with the worst housing recession in decades.

More than 2.3 million homeowners faced foreclosure proceedings last year, an 81% increase from 2007, and analysts say that number could soar as high as 10 million in the coming years, depending on the severity of the recession.

JPMorgan Chase, Morgan Stanley and Bank of America said Friday they are halting foreclosures through March 6. And Citigroup said its halt will extend until the administration has completed the details of the loan modification program or March 12, whichever is earlier. Citi’s action expands on a similar effort that it started in November.

The banks’ pledges apply to owner-occupied homes, not those owned by investors.

Fannie Mae said it was suspending all foreclosure sales and evictions for occupied properties, while Freddie Mac said its suspension would apply to properties with up to four units and noted that the ban would not apply to vacant properties.

Both Fannie and Freddie had suspended foreclosure sales during the winter holidays and halted evictions from foreclosed properties through the end of this month. Together, they own or guarantee around half of U.S. home loans.

Obama’s announcement next week is expected to include details about how the administration plans to prod the mortgage industry to do a better job of modifying the terms of home loans so borrowers have lower monthly payments.

Testifying before House lawmakers this week, Geithner said the government would provide incentives to “try to induce economically sensible restructuring of mortgages,” but offered no specifics. A Treasury spokeswoman declined further comment Friday.

A Democratic Senate aide said the plan is likely to include hefty payments designed to encourage the lending industry to lower mortgage rates or reduce the total principal amount owed by borrowers. The idea has become attractive to Obama officials, the aide said Friday, because it is expected to be far less expensive than having the government buy up loans out of mortgage-linked securities.

It was unclear whether those government subsidies would be paid to companies that collect payments for mortgage investors up front, or whether they would stretch out over several years.

Howard Glaser, a mortgage industry consultant who served in the Clinton administration, said if 2 million borrowers’ payments were lowered by $500 a month, it would cost the government and lenders $6 billion each per year — assuming lenders match half the cost.

Unlike previous loan modification plans, borrowers would not have to be in default to qualify, according to people briefed on the plan.

Still, figuring out who would qualify would be a challenge, especially as foreclosures continue to soar. More than 274,000 U.S. households received at least one foreclosure-related notice last month, according to RealtyTrac, a foreclosure listing service.

Government-controlled mortgage finance companies Fannie Mae and Freddie Mac have developed systems to analyze millions of loans and determine which ones need to be modified. But to qualify for those programs, borrowers have to be at least three months behind on their home loans.

At the White House, Gibbs cautioned about the dangers of erroneous information leaking out about the foreclosure plan because he did not want to see “an unreasonable series of expectations based on leaks from God knows where.”

Still, the administration is widely expected to back a push in Congress — but opposed by the mortgage industry — to let bankruptcy judges alter the terms of primary home loans. Earlier this week, Obama said it “makes no sense” that judges are not allowed to do so.

The hope is that, rather than being dragged into bankruptcy court, lenders would prefer to modify loans. The mortgage industry argues that this prohibition allows lenders to charge lower rates.

The top executives of Bank of America, and Citi announced their intention to halt foreclosures under questioning from House lawmakers on Wednesday.

Jamie Dimon, JPMorgan’s chief executive, detailed his plans in a letter to Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee, who released it on Friday.

“We stand ready to work with you to put the appropriate processes in place, including a national modification standard, to reduce the incidence of foreclosure and to encourage long-term, sustainable home mortgages,” Dimon wrote.

Gibbs said he thought the banks’ action was “consistent with what the president believes is at least part of something that would be likely seen in a housing policy that protects the American people.”

Fannie Mae and Freddie Mac suspended foreclosure sales during the winter holidays and have halted evictions from foreclosed properties until next month. And earlier this week, John Reich, director of the Office of Thrift Supervision, urged the more than 800 thrift institutions nationwide to do the same.

Associated Press Writers Ben Feller, Christopher S. Rugaber and Madlen Read contributed to this report.

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Subprime lender becomes Appraisal Management Company
2009/02/13, 5:27 pm
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This is very interesting?!?!?!
Here is a fascinating article from Business Week, revealing how a former Subprime Lender went bust and then transformed itself into an AMC:

Take NovaStar Financial (NFI) in Kansas City, Mo. A large subprime lender during the housing boom, NovaStar was disciplined by three states—Massachusetts, Nevada, and Washington—for such infractions as employing unlicensed brokers and charging unlawful fees. Without admitting wrongdoing, the company paid $5.1 million in 2007 to settle similar allegations in a class action brought on behalf of borrowers. After its mortgage business collapsed, NovaStar morphed into an AMC last year by acquiring another company and renaming it StreetLinks National Appraisal Services.
Steve Haslam, NovaStar’s former chief of retail lending, is now CEO of StreetLinks. He defends NovaStar’s past lending as legitimate, noting that the company avoided bankruptcy proceedings, unlike many of its rivals. “We have gone through the fire and come out better for it,” he says. His 100-employee AMC will contract with independent appraisers, Haslam says, paying them generous fees, and will issue a “Certificate of Noninfluence” with every appraisal. “This assures Wall Street and lenders that this appraisal was conducted in an independent fashion,” Haslam says.

Fair pay and no pressure; seems almost too good to be true?