Negative Equity
By Esther Cho | 05/11/2012
At a time when mortgage rates have hit record-low numbers, HUD Secretary Shaun Donovan stressed urgency in getting housing refinance bills on President Barack Obama's to-do list for Congress passed. During a teleconference Friday, which preceded Obama's stop into Reno, Nevada, to boost support for the housing proposals, Donovan outlined three bills that were introduced to Congress that week. Donovan says the bills would save homeowners an average of $2,500 to $3,000 a year.
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By Carrie Bay | 05/08/2012
Bank of America began mailing out more than 200,000 letters this week targeting borrowers thought to be eligible for principal-reducing modifications under terms of the settlement reached with the federal government and 49 state attorneys general. To be eligible, a homeowner must owe more on the mortgage than the property is worth today and must have been at least 60 days behind on payments on January 31, 2012. BofA estimates average monthly savings of 30 percent for qualifying customers.
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By Carrie Bay | 04/16/2012
The head of one of the world's most powerful financial policy bodies has tossed her hat into the debate over mortgage principal reductions. Christine Lagarde, managing director of the International Monetary Fund (IMF), says "the housing problem in the U.S. is something that needs to be addressed" and it is "a matter of urgency." Lagarde tipped her hat in favor of the administration's proposal of principal reductions, but said the problem is that "the big boys and girls - Fannie and Freddie - have to be part of that equation."
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By Ryan Schuette | 04/13/2012
Eleven state attorneys general sent a letter to Edward DeMarco, Acting Director of the FHFA, urging him to allow Fannie Mae and Freddie Mac to move forward with principal reductions. Headlined by Massachusetts Attorney General Martha Coakley, the letter doubled down on the FHFA to "preserve assets and prevent unnecessary foreclosures by implementing loan modifications that include principal write-downs." State attorneys general said that new reductions "should consider all of a borrower's debts, not just the monthly mortgage debt, be uniform, transparent, and publicly disclosed."
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By Esther Cho | 03/30/2012
With numbers from a CoreLogic report revealing 22.8 percent of borrowers are underwater, principal reduction has been eyed as a key solution to keeping borrowers in their homes. The Center for American Progress has released a report detailing solutions to the "moral hazard" issue. One is to make principal reduction a one-time program open to borrowers already delinquent; another is to open the program only to current borrowers who are at-risk of default; and the third is "shared appreciation" modifications.
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By Esther Cho | 03/28/2012
States and metro areas known for being risky when it comes to mortgage fraud seem to be repeat offenders, according to the 2011 Annual Mortgage Fraud Risk report released by Interthinx.
The top six states with the highest levels of mortgage fraud risk in 2010 maintained their spots as the riskiest states into 2011, a trend also seen when looking at data for fraud in Metropolitan Statistical Areas (MSAs). Nevada, Arizona, Florida, California, Colorado, and Michigan were the six riskiest states for 2011 and 2010.
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By Carrie Bay | 03/26/2012
The commercial real estate (CRE) sector faces $362 billion in maturing debt this year, according to the latest estimates from Trepp LLC. For the five-year period of 2012 to 2016, the company's research team estimates $1.73 trillion of CRE maturities, with the largest one-year sum of $371.1 billion dropping in 2013. They also reported that nearly two-thirds of the maturities through 2016 are underwater or close to sinking underwater, which could reduce borrowers' chances for extending the loan term upon reaching the balloon date.
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By Esther Cho | 03/23/2012
In select hard-hit markets, Bank of America is introducing a program that will give some of its customers who are facing foreclosure the option to remain in their homes as a tenant rather than as a homeowner. The Charlotte, North Carolina based-bank made the announcement Thursday in a release. The program, called Mortgage to Lease, will solicit fewer than 1,000 customers who qualify; there will not be opportunities to volunteer or apply for the program.
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By Carrie Bay | 03/21/2012
An alarming number of homeowners see strategic default as a viable option should their home continue to depreciate. Almost half - 47 percent - of homeowners participating in an online poll from Housing Predictor say they will walk away from their mortgage if falling home values persist. The number of borrowers open to strategic default has risen sharply since the company last surveyed public opinion on the issue. In October 2010, 36 percent of homeowners polled said they would throw in the towel should housing prices continue to drop.
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By Esther Cho | 03/01/2012
The number of homes in negative equity, also known as underwater homes, went up for the 2011 four quarter to 11.1 million, or 22.8 percent, CoreLogic stated today in a release. Third quarter numbers showed 10.7 million properties were in negative equity, or 22.1 percent. Borrowers with less than 5 percent equity in their homes stood at 2.5 million for the fourth quarter. In total, those with negative equity and near-negative equity equaled 27.8 percent of all residential properties.
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