Underwater
By Esther Cho | 05/09/2012
After declining during the 2012 first quarter, the national mortgage delinquency rate is at its lowest level since the first quarter of 2009 and finally dropped after two consecutive quarterly increases. TransUnion reported Wednesday that the national delinquency rate, which includes borrowers 60 or more days past due, is 5.78 percent for the first quarter of 2012, a quarterly and yearly drop when the rates were 6.01 percent and 6.19 percent, respectively.
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By Ryan Schuette | 05/08/2012
Solvency issues re-emerged for the Federal Housing Administration in a hearing convened Tuesday by the Senate Banking Committee, with HUD Secretary Shaun Donovan calling for lower loan-to-value thresholds and more servicer competition to expand refinance opportunities. The hearing quickly turned to servicer competition, which the HUD official said is lacking in part because of strict underwriting guidelines under Fannie Mae and Freddie Mac, inflating home prices and keeping refinance opportunities out of reach for many homeowners.
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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 | 05/03/2012
Freddie Mac reported net income of $577 million for the first quarter of 2012. That combined with $1.21 billion in unrealized gains on securities investments resulted in comprehensive income of $1.79 billion. The GSE's finances didn't sit in the black for very long, however. After a $1.8 billion dividend payment to its primary shareholder, the U.S. Treasury, Freddie's net worth was a deficit of $18 million. Looking at the GSE's loss mitigation numbers, short sales almost equaled the number of loan modifications during the first quarter.
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By Esther Cho | 05/02/2012
Based on documents Reps. Elijah Cummings (D-Maryland.) and John Tierney (D-Massachusetts) received, Acting Director Edward DeMarco's reason for not allowing principal reduction appears to be based on ideology, not analysis, according to a May 1 letter they wrote to the director. The letter states beginning in 2009, Fannie Mae officials worked with Citibank to develop a "shared equity" principal reduction pilot program that was "suddenly suspended" in July 2010. In the letter, the representatives stated that on February 8, a former Fannie Mae employee informed them the pilot program on principal reduction was terminated by officials who were "philosophically opposed to writing down principal balances."
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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 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 Krista Franks Brock | 03/22/2012
Last year was a good year for home bargain-hunters, according to the latest data from Radar Logic. The firm's January report revealed a 5.42 percent decline in prices from January 2011 to January 2012 and a simultaneous 7.7 percent increase in transactions. The 5.42 percent price decline over the year brought Radar Logic's composite to its lowest rate since July 2002.
Radar Logic predicts prices will remain flat this year and next before increasing "at an accelerating pace" in 2014 and 2015.
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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 Krista Franks Brock | 03/13/2012
According to documents filed in federal court Monday, Ally Financial formerly GMAC will offer principal reductions beyond what is required of the majority of the five banks in $25 billion the national mortgage settlement. While the general rule for principal reductions required through the settlement is to lower principal to no more than 120 percent of a home's value, Ally will offer reductions of as low as 85 percent in some cases where borrowers are considered likely to default. Other homeowners with high-risk loans may receive reductions bringing their loan to 105 percent or 100 percent of their homes' current values.
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