Banks Complete Consumer Relief Obligations

Author: Colin Robins March 18, 2014 0

 

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Joseph A. Smith, Jr., monitor of the National Mortgage Settlement, filed final crediting reports with the U.S. District Court for the District of Columbia on Bank of America, Chase, Citibank, and Wells Fargo.

The reports confirmed that the banks have satisfied their consumer relief and refinancing obligations under the settlement, nearly a full year ahead of schedule.

In a press release, Smith commented, “My reports mark the end of the consumer relief portion of the Settlement. Because of the way this landmark agreement was designed, an unprecedented amount of relief has been provided to consumers quickly and efficiently.”

He continued, “Furthermore, I believe the rigorous testing process should justify public confidence that the banks have fulfilled their relief commitments and that the Settlement has played a part in helping keep struggling borrowers in their homes.”

Remunerations were called for after the banks engaged in widespread signing of foreclosure-related documents outside the presence of a notary public, and without confirmation whether the facts they contained were correct—both illegal actions.

The practice earned the futuristic-sounding sobriquet “robo-signing,” and necessitated 49 state attorneys general and the federal government to correct actions against wronged homeowners, eventually settling with the banks for an initial estimated figure of $25 billion.

Oklahoma was the lone holdout.

Smith noted that among the banks, 37 percent of total credit relief was in the form of first lien principal forgiveness, while second lien principal forgiveness made up 15 percent. Refinancing made up 17 percent of total credited relief, and other relief (including short sales and deeds in lieu of foreclosure) accounted for 31 percent of relief.

Shaun Donovan, secretary of Housing and Urban Development (HUD), commented on a conference call with the media on Tuesday that over 600,000 consumers received on average more than $79,000 in relief.

7 out of every 10 dollars of credit for consumer relief, such as refinancings and principal reductions, came in a form that kept borrowers in their homes, Donovan said on the call.

Donovan added, “This settlement delivered on what we promised.”

The tone of the call between Donovan and Iowa attorney general Tom Miller was mostly laudatory towards the banks, praising them for quick action as well as payments that exceeded initial estimates.

Miller noted that $20 billion in credits and over $50 billion in total homeowner benefits were “well in excess of what we predicted or expected.”

$5.1 billion dollars was required for first lien principal reductions in the initial settlement, but the final figure from bank’s totaled almost $7.6 billion—nearly 50 percent more than what was required.

Miller fired back at detractors of the settlement who cautioned that principal reductions would create a “moral hazard,” encouraging borrowers to default on their loans to avoid payment.

“Many people in the industry … were saying that if there was any principal reduction there would be all this moral hazard, other people would stop paying—that the whole market would be seriously harmed. Well, we’ve had substantial principal reduction, 7.6 billion dollars’ worth, and none of this has happened. None of the problems, none of the concerns, none of the catastrophes that were predicted happened, as we predicted,” Miller said.

He noted that principal reductions were “a tool in the toolkit for dealing with homeowners in default.”

Miller continued, “We knew that there was no single solution, no magic bullet, to turn around the housing market. We knew there had to be pieces, and we thought that this would be one of the pieces, and clearly it has been. This is one of the reason’s the housing market now has turned in the right direction.”

Foreclosure Inventory Down 31% in 2013, Slow Progress Expected in 2014

Author: Krista Franks-Brock January 29, 2014 0

 

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National foreclosure inventory fell 31 percent year-over-year in December, with 2.1 percent of all homes with a mortgage in some stage of foreclosure, according to CoreLogic’s December National Foreclosure Report.

Completed foreclosures also declined year-over-year in December, though at a somewhat lower rate of 14 percent, according to CoreLogic.

Despite declines, foreclosures remain elevated compared to historical norms. From 2000 through 2006, about 21,000 foreclosures were completed each month.

In December 45,000 foreclosures were completed, down from 47,000 in November and 52,000 in December 2012.

“Clearly, 2013 was a transitional year for residential property in the United States,” said Anand Nallathambi, president and CEO of CoreLogic.

“Higher home prices and lower shadow inventory levels, together with a slowly improving economy, are hopeful signals that we are turning a long-awaited corner,” Nallathambi said.

However, he anticipates “progress to remain very slow” this year.

Five states accounted for nearly half of all completed foreclosures in 2013. Those states included Florida with 119,000 foreclosures, Michigan with 53,000 foreclosures, California with 39,000 foreclosures, Texas with 39,000 foreclosures, and Georgia with 35,000 foreclosures completed over the year.

At the other end of the spectrum, the five states with the fewest foreclosures completed in 2013 were the District of Columbia with 63 foreclosures, North Dakota with 417 foreclosures, Hawaii with 493 foreclosures, West Virginia with 505 foreclosures, and Wyoming with 759 foreclosures.

The states ranking highest for the percentage of foreclosure inventory as of year-end is not consistent with the list of states with the highest numbers of completed foreclosures over the year, except that Florida ranked highest in both categories.

In Florida, 6.7 percent of all homes with a mortgage are in some stage of foreclosure.

Florida is followed by New Jersey (6.5 percent), New York (4.9 percent), Connecticut (3.6 percent), and Maine (3.6 percent).

States with the smallest foreclosure inventory rates in December were Wyoming (0.4 percent), Alaska (0.5 percent), North Dakota (0.6 percent), Colorado (0.6 percent), and Nebraska (0.6 percent).

In total, 4.8 million foreclosures have been completed since the start of the housing crisis in September 2008, according to CoreLogic.

California Homeowner Bill of Rights Signed Into Law

California Attorney General Kamala Harris announced Wednesday that Governor Edmund G. Brown signed two provisions of the much-debated Homeowner Bill of Rights into law.

The Homeowner Bill of Rights so far consists of a series of related bills containing provisions that prohibit certain practices by lenders that have been attributed to the state’s foreclosure crisis. Chief among the banned practices are robo-signing (signing of fraudulent mortgage documents without review) and dual-track foreclosure (starting foreclosure proceedings while the homeowner is in negotiations to save the home). The bill imposes civil penalties on perpetrators of these activities. In addition, it guarantees struggling homeowners a single point of contact at their lender who has knowledge of their loan and direct access to decision makers.

“Californians should not have to suffer the abusive tactics of those who would push foreclosure behind the back of an unsuspecting homeowner,” said Brown. “These new rules make the foreclosure process more transparent so that loan servicers cannot promise one thing while doing the exact opposite.”

The laws will go into effect at the start of 2013. Borrowers can access courts to enforce their rights under the legislation.

The Homeowner Bill of Rights also contains a number of bills currently outside of the conference committee process. These other bills enhance law enforcement responses to mortgage and foreclosure-related crime. In addition, some bills are designed to help communities fight neighborhood blight resulting from foreclosures and provide enhanced protection for tenants in foreclosed homes.

The bill, unveiled by Harris in February, builds upon reforms negotiated in the national mortgage settlement between leading lenders and 49 states. Harris secured up to $18 billion for California homeowners in the agreement, some of which was used to establish a Mortgage Fraud Strike Force intended to investigate crime and fraud associate with mortgages and foreclosures.

“The California Homeowner Bill of Rights will give struggling homeowners a fighting shot to keep their home,” said Harris. “This legislation will make the mortgage and foreclosure process more fair and transparent, which will benefit homeowners, their community, and the housing market as a whole.”

 

Mortgage applications soar to highest level since spring 2009

By Kerri Panchuk

• June 13, 2012 • 6:00am

With interest rates well below 4% for the week ending June 8, total mortgage applications soared 18% from the previous week, an industry trade group said Tuesday.

The Mortgage Bankers Association noted that the refinance index increased more than 19% from the previous week, reaching its highest level since April of 2009. The seasonally adjusted purchase index rose about 13% from a week earlier — reaching its highest level in more than six months.

“Mortgage application volume increased sharply last week,” said Michael Fratantoni, MBA’s vice president of research and economics. “The increase was accentuated due to the comparison to the week including Memorial Day, but the level of refinance and total market activity is the highest since the spring of 2009.”

He attributed the surge, in part, to increased refinancing volume as borrowers locked in at rates well below 4%.

“HARP volume has been steady in recent weeks at about 28% of refinance applications,” he added, referriing to the government’s Home Affordable Refinance Program.

The refinance share of mortgage activity grew to 79% of total applications from 78% the previous week.

The average loan size of a home purchased in the U.S. hit $243,733 in May, up from $238,135 in April. The average loan size on a refinancing grew from $219,664 in April to $226,576 in May.

The average interest rate on a 30-year, fixed-rate mortgage with a jumbo loan balance declined from 4.13% to 4.12%, while the average FRM backed by the Federal Housing Administrationincreased from 3.7% to 3.71%.

The average interest rate for a 15-year FRM increased from 3.2% to 3.23%, while the average contract rate for 5/1 adjustable-rate mortgages remained unchanged at 2.78%.

Prices Show Strongest Year-to-Year Gain in 6 Years: NAR

Existing-home sales rose to 4.62 million (seasonally adjusted annualized rate) in April from a downwardly revised March rate of 4.47 million, the National Association of Realtors (NAR) reported Tuesday. Economists had forecast the April sales pace would be 4.66 million.

The median price of an existing home climbed 10.1 percent to $177,400 from $161,100 in April 2011, the strongest year-to-year gain since January 2006. The median price in April reached its highest level since July 2010 when it was $182,100.

The inventory of homes for sale in April rose to 2.54 million, the highest level since last November, bringing the months’ supply of homes on the market to 6.6.

The 10.0 percent year-to-year gain in the sales rate was the strongest since October when sales were up 14.0 percent year-over year.

Distressed homes – foreclosures and short sales sold at deep discounts – accounted for 28 percent of April sales (17 percent were foreclosures and 11 percent were short sales), down from 29 percent in March and 37 percent in April 2011, the NAR said. Foreclosures sold for an average discount of 21 percent below market value in April (compared with an average discount of 19 percent in March), while short sales were discounted 14 percent in April compared with 16 percent in March.

The months’ supply of existing homes for sale remains well below the July 2010 cyclical peak of 12.4 which had been the highest level since 1982. Inventories as tracked by the NAR are 20.3 percent below their year ago level however anecdotal evidence though suggests there is still a large “shadow” inventory of homes available for sale, especially bank-owned properties.

Regionally, existing-home sales rose in April in every region of the country led by a 5.1 percent month-to-month increase in the Northeast where sales were up19.2 percent over April 2011. Sales rose 4.4 percent over March in the West (a 7.3 percent year-year gain), 3.5 percent in the South (6.5 percent year-year) and 1.0 percent in the Midwest (14.4 percent year over year).

The median price of an existing home rose month-month and year-year in all four regions. At $256,600, the median price of an existing home reached its highest level since August 2010. The median price of an existing home in the South rose to $153,400, the highest level since July 2010 and the median price of an existing home in the West rose to $221,700, also the highest since July 2010.

The year-to-year price gain in the West, 15.9 percent, was the strongest since November 2005. The year-to-year price increase in the Northeast was the first since last June.

California Sees Fewer Homes Going into and Getting Lost to Foreclosure

By Esther Cho

California may have some rough patches in it, but overall, with the worst part of the housing crises appearing to be over, the state is seeing fewer delinquencies and losing a smaller number of homes to foreclosure, according to a San Diego-based real estate data provider.

 

A total of 56,258 Notices of Default (NODs) were recorded at county recorders offices in California during the first quarter of 2012, the lowest level since the second quarter of 2007 when 53,943 NODs were recorded, according to DataQuick.

NOD filings peaked in the first quarter of 2009 at 135,431.

The number of NODs also decreased by 8.5 percent from the previous quarter, and by 17.6 percent from the first quarter a year ago, according to DataQuick.

“Foreclosure activity goes up when property values decline, and the worst of that decline was happening three years ago. Right now, property values in many areas appear flat,” said John Walsh, DataQuick president.

NOD filings were more concentrated in zip codes with median sale prices below $200,000. Those areas saw 8.9 NODs filed for every 1,000 homes, while zip codes with a median sales price from $200,000 to $800,000 had 5.6 NODs filed per 1,000 homes. For zip codes with even higher sale prices – above $800,000 – 2.3 NODs were filed for every 1,000 homes.

Fewer homes were lost to foreclosure, too, with the Trustees Deeds (TD) recorded totaling 30,261 during the first quarter, down 29.7 percent from the 43,052 TDs in the first quarter a year ago.

This year’s first quarter also recorded the lowest level of TDs since 2007.

“[R]emarkably, whole batches of presumed ‘toxic’ mortgages continue to perform,” said Walsh. “There’s no doubt that housing, especially negative equity, is one of the biggest drags on a struggling economy, but it’s not necessarily playing out the way some pundits thought.”

TDs were also concentrated in more affordable neighborhoods. In areas where the sales price was below $200,000, 5.9 homes were lost for every 1,000 compared to zip codes with $800,000-plus median prices that had 0.8 foreclosures per 1,000 homes.

The most active banks in the formal foreclosure process for the 2012 first quarter were Bank of America (10,419), Wells Fargo (7,577), Bank of New York (5,380), and JP Morgan (5,343).

The trustees who pursued the highest number of defaults last quarter were ReconTrust Co (mostly for Bank of America and Bank of New York), Quality Loan Service Corp (Bank of America), NDEx West (Wells Fargo), and Cal-Western Reconveyance Corp (Wells Fargo).

DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

Other report highlights

• When the lender filed a Notice of Default, homeowners in California were a median nine months behind on their primary mortgage.
• The borrowers owed a median $17,897 on a median $319,418 mortgage.
• Mortgages least likely to go into default were in Marin, San Francisco, and San Mateo counties.
• Probability of going into default was highest in Tulare, Sacramento, and San Joaquin counties.
• Out of 8.7 million homes and condos in California, 1.45 million have received a foreclosure proceeding over the past five years, but 835,000, or 9.6 percent, have actually been lost to foreclosure.
• Foreclosure re-sales accounted for 33.5 percent of California resale activity
• Foreclosure resales varied greatly by county, from 9 percent in San Francisco County to 55.2 percent in Yuba County.
• Short sales made up an estimated 20.2 percent of the state’s resale activity.
• It took about 8.5 months for foreclosed homes to make their way through the foreclosure process in the first quarter of 2012, compared to 9.7 months for the previous quarter.
• At formal foreclosure auctions last quarter, an estimated 33.4 percent buyers were investors, up from 23.2 percent a year ago.

 

Proposed Bill to Speed Up Short Sale Process and Prevent Foreclosure

To avoid losing homes to foreclosure due to long response times for short sale transactions, three senators introduced legislation to speed up the short sale process.

Senators Lisa Murkowski (R-Arkansas), Scott Brown (R-Massachusetts), and Sherrod Brown (D-Ohio) proposed the bill addressing the issue of short sales timelines on February 17. A short sale is a real estate transaction where the homeowner sells the property for less than the unpaid balance with the lender’s approval.

“There are neighborhoods across the country full of empty homes and underwater owners that have legitimate offers, but unresponsive banks,” said Murkowski. “What we have here is a failure to communicate. Why don’t we make it easier for Americans trying to participate in the housing market, regardless of whether the answer is ‘yes,’ ‘no’ or ‘maybe?’”

The legislation, also known as the Prompt Notification of Short Sale Act, will require a written response from a lender no later than 75 days after receipt of the written request from the buyer.

Mortgage Faud Runs Rampant In California

Mortgage fraud activity slowed overall in the third quarter, but California ranks first in home loan fraud, with the state seeing as much as $204.2 million in losses on deceptive mortgage activity.

That’s according to a new report from MortgageDaily, which found that lenders victimized by fraud faced inflated appraisals and fraudulent documentation. California was followed by New York, which experienced $199.6 million in losses from nefarious activities in mortgage finance.

Foreclosure Sales Slow on the West cost

With the holiday season approaching, the research and tracking firm ForeclosureRadar is seeing declines in the number of completed foreclosures in four of the five states it monitors along the country’s West Coast.

ForeclosureRadar’s coverage area includes Arizona, California, Nevada, Oregon, and Washington. Only Arizona saw foreclosure sales rise in November, up 25 percent from October. The company notes, however, that Arizona’s increase last month simply offset the 20 percent drop seen in October and is still well below the state’s average monthly sales for the year.

“It’s great to see the banks slow down foreclosures and evictions for the holidays,” said Sean O’Toole, CEO and founder of ForeclosureRadar. “We expect that the numbers will drop even further in December.”

House bill proposes 1-year limit on foreclosure deficiencies

A bill introduced in the U.S. House of Representatives would limit the time frame for deficiency judgments against single-family homes and give protection to low-income households.

House Resolution 3566, also known as the Fairness in Foreclosures Act of 2011, would put a one-year limit on any judgment except in states that have shorter restrictions. Existing law would take precedence in those states.

Rep. Ed Towns, D-N.Y., introduced H.R. 3566 on the House floor Tuesday.

“A deficiency judgment after foreclosure seems to be one of the greatest injustices that occur to homeowners after they have gone through the arduous foreclosure process,” Towns said in a release. “Not only are they behind by thousands of dollars on their mortgage payments and facing public auction of their houses, the ordeal may continue indefinitely.”

The bill would also prohibit deficiency judgments against a borrower in a “low-income family,” and any deficiency would not be reported to credit agencies.

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