Low 2011 Mortgage Rates Won't Stop 2012 Foreclosure Wave

NEW YORK (TheStreet) -- Mortgage rates remained amazingly low for 2011, but that won't stop a coming wave of foreclosures in 2012.

Mortgage rates finished near all-time historic lows in 2011. Freddie Mac(FMCC.OB) on Thursday released the results of its Primary Mortgage Market Survey. The 30-year fixed rate mortgage rate ended 2011 with an average 3.95% for the week ending Dec.29, 2011, up from the previous week's rate of 3.91 % but significantly lower than the 4.86% averaged in the year-ago period.

The 15-year fixed-rate mortgage averaged 3.24%, up from 3.21%, but lower than the 4.20% averaged a year earlier.

Looking ahead, Freddie Mac economist Frank Nothaft expects mortgage rates to remain very low at least through mid-2012, as the Federal Reserve has indicated that it will keep the federal funds rate near zero till as late as mid-2013.

He does expect housing prices to bottom in the later part of 2012. " Low mortgage rates and existing house prices could lead to a bump-up in sales by 3 to 5 percent in 2012 over the 2011 level," he wrote in his commentary. "While encouraging, sales volume is still low, given the strong current affordability of housing. And ample distressed sales and sluggish home-buying demand will continue to keep prices soft in many markets: We expect U.S. house-price indexes to move lower before bottoming out in 2012, with modest appreciation forestalled until 2013."

With rents climbing and housing affordability remaining at its best level in years, some economists are predicting that buyers who have stayed on the sidelines will return to the market in 2012. Hedge funds are beginning to bet on a recovery in the housing market, the Wall Street Journal reported on Thursday.

Recent housing data has sent confusing signals about the direction of the housing market. The S&P Case-Shiller Housing Price Index showed home values in the 20-city composite falling 3.4% in October on a year-on-year basis and 1.2% over September.

Meanwhile, pending home sales, a forward looking indicator of existing home-sales activity showed signs of improvement, increasing 7.3% on a monthly basis to 100.1 in November, its highest level in 19 months.

Still, the biggest overhang for the housing market remains the significant foreclosure inventory that is yet to be cleared from the market as well as "shadow" inventory- properties that will ultimately wind up in foreclosure.

One in every 579 housing units received a foreclosure filing in November 2011, according to RealtyTrac. Overall foreclosure activity dropped 3% in November from the previous month, but a new wave of foreclosures could be coming in 2012.

"Despite a seasonal slowdown similar to what we've seen in each of the past four years, November's numbers suggest a new set of incoming foreclosure waves, many of which may roll into the market as REOs or short sales sometime early next year," said James Saccacio, co-founder of RealtyTrac, in a news release.

Bank of America(BAC_),JPMorgan Chase(JPM_) and Wells Fargo(WFC_) together account for more than 60% of the first mortgages in the country.

The three are among the big mortgage servicers that have been in year-long negotiations with federal regulators and the state attorneys general to reach a settlement over alleged improper foreclosure practices including robo-signing.

The robo-signing controversy and the ongoing negotiations have stalled the foreclosure process for banks. However, analysts maintain that banks need to clear their foreclosure inventory soon for housing values to fully correct and then make a stable recovery.

Bank of America has the most troubled mortgage portfolio. Real estate owned and repossessed assets amounted to over $2.6 billion in the first 9 months of 2011.

--Written by Shanthi Bharatwaj in New York

Foreclosure counseling doubles the chance of mortgage modification

Foreclosure counseling doubles the chance of mortgage modification


Monday, December 19th, 2011, 10:17 am
Borrowers who received foreclosure counseling through a national program were twice as likely to receive a modification, according to a study released Monday.

The Urban Institute evaluated roughly 800,000 homeowners who took help from the National Foreclosure Mitigation Counseling program from January 2008 through December 2009. NeighborWorks America administers the program with federal funds.

The counselors are approved by the Department of Housing and Urban Development. They work on homeowner budgets and guide borrowers through the various options provided by the mortgage servicer to avoid foreclosure.

Those who went through the program were at least 67% more likely to remain current within nine months of receiving a modification, according to the study. Borrowers who went through the program had their payment reduced by an average of $176 per month.

Congress slashed funding for HUD housing counseling programs earlier in the year. The administration and the mortgage industry called for lawmakers to restore the money because of the more than 5 million homeowners who are at least 30 days delinquent, according to Lender Processing Services (LPS: 14.46 +1.12%).

In November, Washington restored some of the money, and HUD was allowed to grant $40 million to counselors.

Eileen Fitzgerald, CEO of NeighborWorks America, said the program and others like it help homeowners and servicers alike by reducing redefaults.

"In short, the personalized work nonprofit housing counselors do to help homeowners improve their overall financial situation had the greatest effect on a homeowner not falling behind again on their mortgages in the future," Fitzgerald said.

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Foreclosure Crisis Sparks a Script

Foreclosure Crisis Sparks a Script

Posted Dec 14, 2011 at 09:35 AM By Dennis Rodkin

Stephanie Walker lost a home to foreclosure, but in the aftermath, she found her voice. She has blogged about it and put out an e-book about it. And on Sunday, a group of actors at Victory Gardens Theater performed a staged reading of American Home, her play about it.

The play, which won a Blue Ink Award earlier this year from American Blues Theater, intertwines the personal stories behind three home foreclosures. At the same time, it looks at the larger causes and effects of the wave of foreclosures that has swept the country.

“There doesn’t seem anywhere one can go to nest without being owned by her nest,” says one character late in the play. She’s echoing a sentiment that is quite common now, not only among the foreclosed but also among the many people whose underwater mortgages are hampering their ability to move to a new house or to spend money. On Tuesday, Zillow reported that Chicago-area home values in October were down 10.4 percent from a year before, more than twice the national average. The more prices drop, the more people feel owned by their nests.


In American Home, a young couple buys a Los Angeles dream house they can just barely afford, then lose their income stream and ultimately their house. An older woman unwittingly drains all the equity out of the home she and her late husband moved into decades before the home-value boom. And a preacher who helps her moderate-income congregants take out unsupportable mortgages sees them collapse under the debt. Also tossed into the mix are a publicity-hungry woman who chains herself to the home she can no longer afford and a pair of news anchors who function as a Greek chorus, praising, probing, and ridiculing various people caught up in foreclosure.

While none of the homeowners comes out looking like a hero, it’s worth noting that the character whose tale is closest to Walker’s own is the one she depicts as the most self-indulgent and prone to denial and budgetary cluelessness. In other words, it’s not a lament about having been victimized. Walker is clear-eyed about the foreclosure she and her husband, Bob, went through. In September, she blogged that being candid about their past helped the couple land an apartment back here in her native Chicago when their credit was shot.

Sunday’s staged reading was part of the development process that American Blues is putting Walker’s script through. Eight actors read the script for an audience of about 30 (they borrowed the auditorium from a production of It’s a Wonderful Life, another tale that revolves around a financial crisis). Afterward, Walker took notes on what members of the audience thought could be strengthened. American Blues may go on to produce a full-fledged production, but if not, Walker wants to pursue getting her play produced by another company.

One person in Sunday’s audience brought up an intriguing point about Walker’s timing: Not only does her play end before you see clearly how postforeclosure life turns out, but the play itself appears while the country is in the midst of its own unresolved housing dilemma. Earlier this month, a Bank of America analyst noted that six million U.S. homes have undergone foreclosure since 2007, and she forecast that as many as eight million more may go through the process in the next four years. What’s more, said the analyst, 2013 may turn out to be the worst year yet in foreclosures. So even though Walker has completed a two-act script, we may be a long way from the end of the real-life drama.

Federal reserve report: Home flipping drove housing bubble in Nevada, California, other states

http://www.washingtonpost.com/business/markets/federal-reserve-report-home-flipping-drove-housing-bubble-in-nevada-california-other-states/2011/12/12/gIQA1W8HqO_story.html

LAS VEGAS — A new federal report shows that speculative real estate investors played a larger role than originally thought in driving the housing bubble that led to record foreclosures and sent economies plummeting in Nevada, California, Arizona, Florida and other states.

Researchers with the Federal Reserve Bank of New York found that investors who used low-down-payment, subprime credit to purchase multiple residential properties helped inflate home prices and are largely to blame for the recession. The researchers said their findings focused on an “undocumented” dimension of the housing market crisis that had been previously overlooked as officials focused on how to contain the financial crisis, not what caused it.

More than a third of all U.S. home mortgages granted in 2006 went to people who already owned at least one house, according to the report. In Arizona, California, Florida and Nevada, where average home prices more than doubled from 2000 to 2006, investors made up nearly half of all mortgage-backed purchases during the housing bubble. Buyers owning three or more properties represented the fastest-growing segment of homeowners during that time.

“This may have allowed the bubble to inflate further, which caused millions of owner-occupants to pay more if they wanted to buy a home for their family,” the researchers noted.

Investors defaulted in large numbers after home values began to drop in 2006. They accounted for more than 25 percent of seriously delinquent mortgage balances nationwide, and more than a third in Arizona, California, Florida, and Nevada from 2007 to 2009.

As a result, millions of homeowners saw their home values decline so that they were worth less than the original purchase price. Foreclosures skyrocketed as people couldn’t or refused to pay their underwater mortgages. Residential construction also languished, putting hundreds of construction workers in the hardest-hit states out of work.

The report concludes that lenders and regulators must limit speculative borrowing to avoid future housing busts. For example, in China, government officials are now requiring higher down-payments and mortgage rates on investment homes, according to the report.

In Nevada, which has the nation’s highest foreclosure rate, the housing market remains weak, with home prices continuing to fall in the Las Vegas area, where most of the state lives.

Home prices were down 7.3 percent in November compared to a year before, according to the Greater Las Vegas Association of Realtors. That means the median price dropped from $134,900 to $125,000 in one year. More than half of all home sales were purchased with cash.

Paul Bell, president of the real estate association, said amateur investors were behind the soaring home values seen during the first half of the last decade, but noted those buyers were simply taking advantage of how easy it was to buy homes at the time because of questionable lending practices and government pressure on banks to promote home ownership.

“There was blame to go around for everybody,” Bell said.

The market has now shifted so that cash investors are helping Las Vegas recover by buying multiple vacant homes, fixing them up and selling them, Bell said.

“If we did not have the serious investors in the market ... we would have many neighborhoods in a very run-down condition,” he said.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Government says Chase needs improvement in foreclosure program

Government says JPMorgan Chase needs improvement in foreclosure program

http://www.washingtonpost.com/business/industries/summary-box-government-says-jpmorgan-chase-needs-improvement-in-foreclosure-program/2011/12/07/gIQAjd3OdO_story.html


NOT DOING ENOUGH: JPMorgan Chase & Co., one of the nation’s largest mortgage lenders, is not doing enough to help Americans avoid foreclosure as part of the government’s signature foreclosure-prevention program, the Obama administration said Wednesday.

BAD MARKS: The lender has been cited for rejecting people who were eligible for mortgage modifications three separate times since June. JPMorgan said in a statement that it was “disappointed with our rating.”


OFF THE LIST: The government first criticized four lenders in June, including Bank of America Corp., Wells Fargo & Co. and Ocwen Loan Servicing. Those three companies were removed from a list of companies needing “substantial improvement” in September and December.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Snoopy House Foreclosure: Charlie Brown Christmas Moves To City Hall

http://www.huffingtonpost.com/2011/12/08/jim-jordan-snoopy-house_n_1134999.html#s528693

Snoopy House Foreclosure: Charlie Brown Christmas Moves To City Hall

When Jim Jordan found out that his house in Costa Mesa was being foreclosed upon, he was so depressed that he struggled to get out of bed. Jordan, the owner of a general contracting business, said, "I'm the guy who says, 'Suck it up and just go to work. But I just couldn't do it.'"

It wasn't losing the house that was getting Jordan down, as he explained to The Huffington Post. "It was about letting all those people down at Christmas time. Every time I thought it, I would break into tears. My heart was just broken."

As the Daily Pilot reports, Jordan has for the last 44 years elaborately decked out his front lawn at Christmas-time with Charlie Brown and Snoopy decorations, complete with Lucy in a counseling booth, Linus beneath the tree and others of the "Peanuts" crew ice skating around an artificial pond. The holiday scene, which over the years has come to include hot apple cider, carolers, music by horn players and photos with Santa, attracts thousands of guests each year, with an estimated 80,000 visitors last year.

Jordan told HuffPost that he and a few "elves," including a man who has been working with Jordan for 30 years, perfect the decorations year-round. "Some say it's a calling, some say it's a curse. Either way, it's a love and passion."

Weeks after Jordan received notice of foreclosure on his house from Wells Fargo, the city of Costa Mesa began to receive calls from community members who want to save the "Snoopy House." Bill Lobdell, communications director for the city, told HuffPost, "Everyone was despondent about it."

That's when the city's planning commissioner called Jordan and offered to host the Snoopy decorations at City Hall. Jordan, in his cheerful and humorous way, recalled, "I was really moved. I told him, 'My heart leaps for joy, and my back is aching ... It's a lot of work!'"

What came next touched Jordan further: As Lobdell told HuffPost, volunteers, including entire sports teams from neighboring schools and other community groups, have signed up to assist in transporting and setting up the elaborate Snoopy scene. The set-up will take place Friday through Monday, and the scene will be open to the public on Tuesday, Dec. 13, at 5:30 p.m.


There is a "Save the Snoopy House" Facebook page and Twitter account. In addition to donating time to set up the decorations, community members have been donating money to help Jordan in his lawsuit against Wells Fargo to save his house.

As Occupy Wall Street moves to fight foreclosures, one person has occupied the Snoopy House and set up a tent on the house's front lawn, the Daily Pilot reports. And the nearby Santa Ana Chick-fil-A has offered to display the Peanuts gallery in front of its restaurant.

Jordan said it has been a humbling experience for him to receive so much community support. He explained that, just as Charlie Brown's meaning of Christmas is to "give back," his Snoopy scene was his way of giving back. "Families come who cannot afford to have their picture taken with Santa at the mall ... and sometimes who cannot afford gifts at all," he said.

Looking back over the years, he recalled a young girl who, when the other children were asking for expensive toys, asked Santa for a new pair of socks. "We had someone run down to the drug store. Santa Claus found her and pulled brand new socks out of his sack. Her eyes lit up and she was as excited as can be."

Another memory was of a father crying as his son explored the Snoopy scene with excitement. When Jordan asked the father what was wrong, he said it was the first time his son had spoken since his mother died weeks before. Yet another heart-warmer was a mother who, after her husband left the family, came with her two sons every night to play by the decorations. To this day, Jordan says, the family tells him it was their favorite Christmas.

Reflecting on the community support he's received, Jordan said, "It has gone a long way to start to heal my broken heart."

The mayor of Costa Mesa, Gary Monahan, told HuffPost, "There will be a Christmas display after all, Charlie Brown."

To donate to Jordan's effort to save his house, send contributions to Snoopy House Trust, PO 2852, Costa Mesa, CA 92628.

To assist in the set up at Costa Mesa City Hall this Friday through Monday, call Sylvia Chalmers at (714) 754-5099.

Effect of short sale on credit scores

Effect of short sale on credit scores

Benny Kass
Housing Counsel
December 2, 2011

Q: What impact will a short sale have on my credit rating? Will it be better for me to let the property go to foreclosure?

A: That's a tough question because, to my knowledge, the various credit rating agencies have different approaches to determining ratings. More significantly, once you start falling behind on your monthly mortgage payments, your credit rating is already falling, so its difficult to separate the bad credit from the impact of a short sale.

One of the most prominent credit reporting companies that mortgage lenders rely on is Fair Isaac Corp., or FICO. In March, under the heading "Research looks at how mortgage delinquencies affect scores," FICO presented an interesting study on delinquencies and credit scores. To summarize:

There is no significant difference in score impact between a short sale, deed-in-lieu or foreclosure.

In general, the higher your score before you have financial problems, the longer it will take to fully recover.

While a score may begin to improve in the short run, it could take approximately seven to 10 years to fully recover, assuming you are current with all other debt obligations.

The full study is reported at bankinganalyticsblog.fico.com.

Q: My stepmother has Alzheimer's disease after suffering a stroke about a year ago. She is 89 years old. She lives in Arizona, and I live in New York. My father passed away nine years ago at 83. Before the stroke, my stepmother told me in a letter that when she passed away she gave instructions to her daughter on her will that the property was to be divided three ways: myself and her two daughters.

Since my stepmother's stroke, my stepsister has moved into the house with her grown son to care for her mother. My stepsister mentioned a while ago that her son would like to buy the house, but when I asked her about it several times since that conversation she doesn't answer me. The oldest sister passed away several years ago so it's just the two of us.

I feel uneasy about this situation. Where do I stand legally? I have always had a good relationship with my stepsisters and stepmother, I haven't visited them since my father passed, but I keep in touch either by phone or email. That was my father's house too. Should I be worried? Or am I making a big thing out of nothing?

A: No, you are not making a big deal out of this, but I can see from the tone of your letter that you are concerned.

First, I have to repeat what I have been telling clients for years: Children cannot — and should not — control how their parents will dispose of their real estate, their jewels or their money. Clearly, children can make sure their parents have current and updated last wills and testaments, but the substance of those documents is in the sole discretion of the maker of the will.

Having said that, I am not sure what you can do until your stepmother dies. She has had a stroke and I suspect that she is not currently capable of discussing this with you — or anyone else for that matter.

You indicated that your stepsister is named as the executor (personal representative) of the will. Accordingly, you will have to wait.

Once your stepmother dies, you should retain a lawyer in the state where probate will take place. If the will that your stepsister files with the court is different from what your stepmother told you, you have the right to try to challenge the validity of that document. However, your stepmother also has the right to change her mind.

benny@inman.com

Major Banks Face New Foreclosure Lawsuit

http://www.nytimes.com/2011/12/02/business/major-banks-face-new-foreclosure-suit.html

In a suit against the nation’s five largest mortgage lenders, Martha Coakley, the Massachusetts attorney general, contends that the banks used unfair and deceptive business practices.
By GRETCHEN MORGENSON
Published: December 1, 2011


Citing extensive abuses of troubled borrowers across Massachusetts, the state’s attorney general sued the nation’s five largest mortgage lenders on Thursday, seeking relief for consumers hurt by what she called unfair and deceptive business practices.

In addition to creating a new and significant legal headache for the banks named in the suit — Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and GMAC Mortgage — the Massachusetts action diminishes the likelihood of a comprehensive settlement between the banks and federal and state officials to resolve foreclosure improprieties.

Also named as a defendant in the Massachusetts suit was the electronic mortgage registry known as MERS, an entity set up by lenders to speed property transfers by circumventing local land recording officials.

The attorney general, Martha Coakley, and her investigators contend that the banks improperly foreclosed on troubled borrowers by relying on fraudulent legal documentation or by failing to provide homeowners with loan modifications after promising to do so. The suit also contends that the banks’ use of MERS “corrupted” the state’s public land recording system by not registering legal transfers properly.

“There is no question that the deceptive and unlawful conduct by Wall Street and the large banks played a central role in this crisis through predatory lending and securitization of those loans,” Ms. Coakley said at a news conference announcing the lawsuit. “The banks may think they are too big to fail or too big to care about the impact of their actions, but we believe they are not too big to have to obey the law.”

Ms. Coakley has been among the most aggressive state regulators in her pursuit of financial institutions involved in the credit crisis. In addition to her inquiry into foreclosure improprieties in Massachusetts, she has also conducted far-reaching investigations into predatory lending and securitization abuses.

Since 2009, Ms. Coakley has extracted more than $600 million in restitution and penalties from lawsuits against mortgage originators like Option One and Fremont Investment and Loan and Wall Street firms like Goldman Sachs and Morgan Stanley, which bundled loans into mortgage securities.

Officials at all of the banks issued statements saying they would fight the suit. Most of them also indicated dismay that Massachusetts had taken action during negotiations to reach a settlement over the types of practices highlighted in the case.

“We are disappointed that Massachusetts would take this action now,” said Tom Kelly, a Chase spokesman, “when negotiations are ongoing with the attorneys general and the federal government on a broader settlement that could bring immediate relief to Massachusetts borrowers rather than years of contested legal proceedings.”

Lawrence Grayson, a Bank of America spokesman, said: “We continue to believe that collaborative resolution rather than continued litigation will most quickly heal the housing market and help drive economic recovery.”

And Vickee Adams of Wells Fargo said, “Regrettably, the action announced in Massachusetts today will do little to help Massachusetts homeowners or the recovery of the housing economy in the Commonwealth.”

But as Ms. Coakley made clear during the news conference, her office had come to view as unacceptable the negotiating stance taken by the banks in the protracted settlement talks.

“When those negotiations began over a year ago, I was hopeful that we would be able to reach a strong and effective solution,” she said. “It is over a year later and I believe the banks have failed to offer meaningful relief to homeowners.”

Delaware, Nevada and New York have also objected to the direction the settlement negotiations were taking.

Kurt Eggert, a professor at Chapman University School of Law in California who is an expert in mortgages and securitization, said the Massachusetts lawsuit was a significant step because it opened the banks’ practices to far greater scrutiny than they had been subject to.

“So far the servicers have escaped any real review or punishment for their bad practices because federal regulators have by and large given them a pass on whether they followed the law in foreclosures,” Mr. Eggert said. “This lawsuit argues that they haven’t followed the law and that they can’t just fix all their problems after the fact.”

Among the misconduct cited in the Massachusetts complaint were 14 cases of foreclosures by institutions that had not shown proof that they had the legal right to seize the underlying properties when they did so. All the banks also deceived troubled borrowers, the complaint said, about the loan modification process. For example, some banks incorrectly advised borrowers that they would receive priority treatment if they were more than 90 days delinquent on their loans. Other borrowers were misled when told that they must be more than two months’ delinquent to receive a loan modification, it said.

Although Mr. Eggert said that the banks were likely to argue that a state like Massachusetts had no right to bring such a case against federally regulated institutions, he said that the Dodd-Frank legislation restricted the ability of federal authorities to bar states from acting in such cases.

“If the state can go forward and do real discovery, it will be the first time that anyone has really dug into the servicers’ files to see what they have done,” he added. “The feds conducted an investigation where they looked at very few files, and here the state could demand to see a lot.”

HOLIDAY FORECLOSURE STRESS?

The Foreclosure Defenses Network Team is NOT a mortgage modification or workout company. We know that many of you may have already tried to work with your lender.
Our focus is to dispel the many myths and inaccuracies that are circulating around the foreclosure topic. We have brought together a group of professionals that truly want to help people. They have seen the misdeeds of the banking and lending industries. Everyone that is affiliated with the network knows that with the right about of effort, knowledge and direction they can help people strategically rebuild their financial future.
Giving Hope and Peace of Mind by using Financial Management Alternatives is the networks goal.
Many, but not everyone is currently struggling to make their mortgage payments financially. Some people are wondering what if anything can be done with one simple fact:
WE OWE MORE ON THE PROPERTY THAN IT IS CURRENTLY WORTH
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Is your foreclosure eligible for review?

Step One begins in the effort to redress foreclosure abuses as independent auditors scour 14 banks' foreclosure files. Find out if yours qualifies.
By MSN Money partner on Mon, Nov 28, 2011 8:18 AM

This post comes from Marilyn Lewis at MSN Money.

Are you one of 4.5 million mortgage borrowers whose home -- it has to be your primary residence -- was in "any stage" of the foreclosure process in 2009 or 2010? If you were hurt financially by bad bank behavior, this could be your chance to tell your story and get help.

Independent auditors now are reviewing foreclosure cases covered by an April enforcement action by federal agencies against 14 banks and mortgage servicers, the companies that send borrowers their mortgage statements and collect their payments.

The Office of the Comptroller of the Currency, the Federal Reserve and other agencies are requiring banks that violated consumer protections, causing "financial injury," to fix or redress them. That apparently includes robo-signing, says MarketWatch columnist Lew Sichelman.

Are you eligible for review?
There could be a lot at stake for you, MarketWatch explains:
If the auditor identifies instances of financial injury or harm, servicers will be required to develop a remediation plan and make appropriate restitution. You may not be able to get your house back if it has already been repossessed, but you could be eligible for a monetary settlement. And the payout could be substantial.

You're eligible for the review only if:
Your bank is one of the 14 and their affiliates.
Any type of foreclosure action at all was taken against your home in that two-year period.
The independent auditors are supposed to identify "which borrowers (were) directly affected by fraudulent and messy practices," HousingWire says.

This Q&A, at the OCC site, explains the basics. Here's the Independent Foreclosure Review site, set up to help consumers.

HousingWire names the auditing companies and the banks they're assigned here.

If you're eligible, you're supposed to get a letter by mail before Dec. 31 with information, directions and a form to return. The form has to be postmarked by April 30, 2012.

Get the details
Have questions? Haven't received a letter and think your loan is covered? Unsure who your servicer is? You can call 847-356-1564



HousingWire describes how the auditors are tackling the job and what they're looking for:
The reviews will determine whether the servicer or attorney properly documented ownership of the mortgage and whether it was done under state and federal law. The consultants will determine if a foreclosure sale occurred while the borrower was in a modification or under consideration for some other loss-mitigation tool, such as a short sale. The reviews will cover any inappropriate fees charged outside of state or federal law.

Interestingly, the consultants will also check to see if guidelines for HAMP and even the banks' own proprietary program were followed correctly.

Then, the review will seek to determine if any of these errors or misrepresentations resulted in direct financial injury.

The review process is described in detail in a newly issued OCC report, "Interim Status Report: Foreclosure-Related Consent Orders,"

Industry still "profoundly" plagued
MarketWatch quotes Raj Date, "de facto head" of the new Consumer Financial Protection Bureau, as saying that the mortgage-servicing sector still is "plagued by pervasive and profound consumer protection issues."

The bureau "is working with other federal and state regulators to develop 'common sense' national mortgage servicing standards," but can't really get moving until the state attorneys general finish their separate, drawn-out negotiations with banks over foreclosure practices, MarketWatch writes.

Fox Business reported in October that President Obama has been trying to get the states and banks to wrap up an agreement:
People at the big banks say the Obama Administration is prodding the state AGs, led by Iowa's Tom Miller, to agree on a deal that is currently on the table that calls for fines and revised mortgage foreclosure practices -- but also limits banks' liability on legal action.

Rich Neighborhoods Riddled With Foreclosures

Victoria Gotti, the reality TV star and daughter of infamous mob don John Gotti, made headlines in 2009 as the latest high-profile homeowner facing foreclosure. According to the New York Post, Zillow.com and others, she had stopped making mortgage payments to lender JP Morgan on her Long Island, N.Y., estate, which she had put up for sale the prior year, finding no takers at an asking price of $3.9 million. The home, in the tony neighborhood of Old Westbury, originally cost close to $4.1 million. Two years later, she’s still in the house–now listed for $2.9 million with Sotheby’s International Realty.

She’s hardly alone, of course. Millions of American homeowners have faced foreclosure over the past several years and roughly 11 million more remain significantly underwater on their mortgages. About 7.7% of all mortgages nationwide are in trouble, either seriously delinquent or already in foreclosure. But somewhat surprisingly, ritzy ZIP codes like Gotti’s Old Westbury 11586 aren’t immune. Far from it. According to LPS Applied Analytics, 6.5%, or 33 out of the 516 active loans in her area are in some stage of delinquency. In nearby Great Neck, the default rate is even higher. Of the active home loans in the peninsula enclave, 7.2% are in some stage of foreclosure or pre-foreclosure.

We asked LPS Applied Analytics, a unit of Lender Processing Services that publishes the monthly Mortgage Monitor report, to pull the foreclosure statistics for the priciest neighborhoods in America. Using Forbes’ 2011 list of the Most Expensive ZIP Codes, the folks at LPS Applied Analytics calculated the number of defaulted loans against the total number of active loans – which include everything from subprime loans to conventional loans to jumbo prime loans (and even complicated nontraditional financing, which undergoes the foreclosure process the same way as a traditional mortgage) – in America’s 100 most expensive ZIP codes.


Where It’s Worst
The result? Perhaps not surprisingly, hard-hit Florida led our list. It has two higher end hoods in top spots: Fisher Island (No. 1) and Rosemary Beach (No. 3). Fisher Island, the Miami Beach multimillionaire enclave and the 43rd most expensive ZIP code in the country, has a whopping 20.5% foreclosure rate, with 38 out of 184 active loans in default. Rosemary Beach, a posh planned community in the panhandle and the 69th most expensive ZIP code, clocks in at 9.9%, with 10 out of 104 homes in default.

Record numbers of foreclosures have translated into price depreciations of 50% or more in many parts of the state, pushing yet more underwater homeowners into foreclosure. “The rates in Florida have been among the highest for a very long time now so I think it’s emblematic of that,” says Herb Blecher, vice president of LPS Applied Analytics. A number of high-profile Florida owners have been among the state’s default ranks including comedian Chris Tucker, who owes more than $4.4 million on a $6 million mansion currently assessed at $1.6 million, according to the Orlando Sentinel.

Stalled In New York
The region of the country with the largest total number of pricey neighborhoods riddled by foreclosures is the Northeast, particularly northern North Jersey and southern New York – home to the rich suburbs of New York City (like Old Westbury and Great Neck). Don’t blame the economy alone, though. The foreclosure processes in New York and New Jersey, run through the court system, are the two longest in the country. RealtyTrac, the Irvine, Calif.-based foreclosure listing site, reports that the average number of days a New York-based foreclosure takes from default to eviction is 986 days, followed by 974 days in New Jersey, versus 336 days nationwide.

These lengthy foreclosure processes, exacerbated by the robo-signing scandals of last fall, mean neighborhoods, towns and counties in these states have more foreclosure inventory on the books – including posh places. “Part of what we are seeing here could be the fact that there’s a kink in the end of the process. That’s going to potentially inflate foreclosures artificially,” says Blecher.

Walking Away
So why do the rich face foreclosures? Loss of income, of course, is the biggest reason. But analysts say they’re seeing a rise in the number of well-off property owners who stop paying their mortgages for calculated financial reasons. “Strategic defaults can be an even bigger issue with higher-end homes, where if you’re 25% underwater that could mean hundreds of thousands of dollars or more, because the borrowers may be more financially shrewd and consider it a financial decision to walk away from the home,” explains Daren Blomquist of RealtyTrac.

Blomquist says some of the country’s wealthiest counties were home to the highest numbers of foreclosure initiations in October, particularly California’s pricier coastal communities. Northern California’s Marin County clocked a 50% increase in default notices from October of 2010 to October 2011, while Orange County defaults were up 34% and Santa Barbara County defaults were up 24%. In Bergen County, N.J., where two of our list makers are located (Englewood Cliffs, No. 7 and Saddle River, No. 9), new defaults were up 30% from the second quarter of this year through the third. He also notes that foreclosures among high-end homeowners have been rising for some time: a study conducted by Realtytrac last year from January to October revealed that defaults on million dollar and higher loans has risen 335% from 2007 through 2010, compared to a 128% rise for all categories of loans at all price points. And LPS Applied Analytics data shows that trend holding steady through this year, with jumbo mortgage delinquencies remaining nearly 300% higher than 2008 rates.

Why are foreclosures ratcheting up in these expensive enclaves? When the reason is strategic default, it’s usually because wealthier people can’t necessarily qualify for a short sale or a loan modification thanks to too much income on the books, explains Chad Ruyle, co-founder of Youwalkaway.com, a Carlsbad, Calif.-based site specializing in strategic defaults. He says the company has helped a number of well-to-do clients since its inception in 2008. “Today we have had a couple celebrities that have randomly contacted us who want to foreclose,” says Ruyle, declining to disclose identities. “The stigma around default has really changed and people are starting to see it for what it is – a business transaction with the bank.”

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The Foreclosure Defenses Network Team is NOT a mortgage modification or workout company. We know that many of you may have already tried to work with your lender.
Our focus is to dispel the many myths and inaccuracies that are circulating around the foreclosure topic. We have brought together a group of professionals that truly want to help people. They have seen the misdeeds of the banking and lending industries. Everyone that is affiliated with the network knows that with the right about of effort, knowledge and direction they can help people strategically rebuild their financial future.
Giving Hope and Peace of Mind by using Financial Management Alternatives is the networks goal.
Many, but not everyone is currently struggling to make their mortgage payments financially. Some people are wondering what if anything can be done with one simple fact:
WE OWE MORE ON THE PROPERTY THAN IT IS CURRENTLY WORTH
Now what? There are MANY alternatives and strategies you can use if you know about them.
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Independent Foreclosure Review: Is It the Real Deal?

Posted: 11/22/11 10:37 AM ET

On November 1, 2011, the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency began a new initiative, requiring a review by an independent consultant to determine if errors or misrepresentations made by banks might have caused financial harm to homeowners.

Is this the real deal? I've assisted thousands of homeowners who are facing foreclosure, and I have personally witnessed untold amounts of bank errors, misrepresentations, miscalculations, and even unfamiliarity with the foreclosure process. Each of these has, no doubt, resulted in some measure of financial injury or harm to the homeowner, whether they received a loan modification and saved their home or lost their home to foreclosure.

If it's the real deal, it's huge. Four and a half million homeowners could be affected, as long as their mortgage was serviced by one of the 14 largest services (named below). Other criteria requires that the house was the homeowner's primary residence and that the foreclosure took place between January 1, 2009, and December 31, 2010. The government said that they've already begun sending out notification letters to potentially eligible homeowners -- that process is to be completed by December 31, 2011.

If you receive a notification that your foreclosure fits the initial criteria for an independent review, you must complete and return a Request for Review Form, which must be postmarked no later than April 30, 2012.

While I applaud the efforts to recognize that banks do err, resulting in great financial injury and the loss of a home to its customers, I also welcome these efforts with an ounce of caution. Simply put, I've learned that even the best intentions, coupled with stringent guidelines and government bureaucracy, can create additional problems. As I've said many times before, question authority.

If you believe you meet the eligibility requirements and were financially injured due to a wrongful foreclosure or bank error, misrepresentation, etc., that resulted in foreclosure, it's important that you follow the guidelines in your notification letter. But be aware of the potential for several problems:

1. You don't receive a notification letter, even though your loan was serviced by one of the 14 servicers subject to review. (In this case, you can call 847-356-1564 to find out if you should have been included.)

2. If you don't receive a letter, question why not. The addresses provided to the government for potentially eligible homeowners are provided by none other than their lenders. Does your lender know your current address, or are they sending your notification to your last-known address... the address for the home which was foreclosed on? Again, question authority.

3. If you don't receive a letter, what criteria and parameters are being used? Does the government have the final determination over who receives an independent foreclosure review, or does the lender? Whose figures will they use in determining error or financial loss? These questions alone prompt further investigation.

4. I should point out that the independent foreclosure reviews are not being done by the government -- the government is only requiring them to be completed. So who is performing the reviews? "Independent" reviewers who are hired by your mortgage servicer will be reviewing your foreclosure to see if the bank who hired them made a mistake. This raises red flags and the potential for possible conflicts of interest and bias on the part of the reviewer.

5. As with any government incentive, too little is known about the independent foreclosure review process. There is only a smattering of examples of what and who qualifies, with very little offered to define "financial injury" or how people will be compensated for it. While some may get nothing, others may get a mere few dollars for overpayment of fees. Will those who are entitled to larger compensations be justly awarded the full amount of the loss they suffered due to bank error? After all, these are the same banks that made the mistake in the first place -- the possibility for more mistakes certainly exists today. And what about those who suffered the greatest loss -- the loss of their home? How will they be compensated?

6. Among the foreclosed homeowners who will receive financial compensation for their losses, how and when will they be paid? How long does the process take, and will it be fair to all involved?

While I agree wholeheartedly with an independent review of foreclosures in an effort to right the wrongs that may have been committed by lenders, I also am skeptical. There are too many gray areas which can affect homeowners, and I can see room for even more error. This might be the real deal, but it might also require diligence, perseverance, and a little determination and sweat equity on your part to find out if it is. You, not the government, the bank, or an independent reviewer, will always be your own best advocate. Trust no one, do your own homework and research and question authority.

*The 14 lenders subject to the independent foreclosure review regulation are (in alphabetical order): Ally's GMAC Mortgage, Aurora Bank, Bank of America, Citibank, EverBank, HSBC, JPMorgan Chase, MetLife, OneWest, PNC, Sovereign Bank, SunTrust, U.S. Bank, and Wells Fargo. If you believe that you are eligible for an independent review, call 1-847-356-1564.

Nearby foreclosures limit seller options

Nearby foreclosures limit seller options

Ilyce Glink
Real Estate Matters
November 14, 2011

Q. I need guidance on what to do with my house. My wife, my preschooler, my infant and I are living in a house that we owe $90,000 on and that we bought eight years ago for about $100,000. Comps in our neighborhood put the current value of our house at about $50,000.

Three foreclosures recently resold for about $40,000 to $50,000 in my neighborhood in the last year. Those houses were very much like mine in size, age, condition and lot dimensions. We have an adjustable rate mortgage with a current interest rate of 3.7 percent. The "margin" on our loan is 3.5 percent, which is fantastic, and the loan is tied to the one-year Treasury Note.

This is not our forever house. We live about 45 minutes from where we want to establish long-term roots (different county, resources and opportunities for the kids). We bought this house as our first home and planned on living here five to seven years.

We can afford the house without a problem. There is no issue there. What concerns me is being tied to the house until such a time that we can sell it and at least break even. At a yearly appreciation of 3 percent, that would take 25 years. I don't know how this is going to shake out, but I am certain of where I am currently. I can buy houses in my area, right now, just like mine, for half of what I currently owe.

I can't see paying for a house that is worth half of what I owe and will take so long to recoup to get back to where I started eight years ago. What questions should I be asking myself to help me make a decision about what to do? What are my most responsible options?

A. You're already asking the right questions. Now you have to consider the consequences of the answers.

You're right: it may be years before the value of your home recovers to where it was when you bought it. Fortunately, you have the ability and the means to pay your debts and keep your home. You even have other options available to you.

When property values were increasing rapidly, people never questioned selling their current home and buying another one for quite a bit more money. It was not uncommon to see a person sell a home for $200,000 and buy a new one for $400,000.

The current market may have similarities but with different emotions. That home that was worth $200,000 may be worth $100,000, and the $400,000 house may be worth $200,000. If you purchased the home for $200,000, you may feel terrible that the home is now worth half of what it was worth, but if you are planning to trade up to another that may be your long-term home, this may be the time to take the loss but see it as a gain.

While losing $50,000 on the sale of your current home will feel terrible, you might be able to afford your next home at today's historically low interest rates and purchase a home that is now within your budget that can meet your needs as your family grows up.

You've done the math correctly. But it doesn't seem that you will want or be in a position to remain in this home for more than a couple of years. If you otherwise would be thinking of buying in this market and moving to a home that suits your needs, it may be time to bite the bullet, get what you can from your current home and move on.

However, if you make that leap, you'll owe money when you sell your current home. Some home sellers have savings they can use to pay off the bank and can use what's left for a down payment on the new home.

Your current adjustable rate is great. With the one-year treasury rate at about 0.02 percent and your margin of about 3.5 percent, those two numbers combined result in your new interest rate. You will probably see that low interest rate for at least another year or two.

Nevertheless, interest rates will rise at some point and so will your home mortgage interest rate. If you planned to stay in your current home for 20 years or so, this would be the time for you to refinance. But your home is underwater. You owe more on your loan that what your home is worth. It will be difficult for you to refinance now unless you get lucky and somehow qualify for the new Home Affordable Refinance Program (HARP). However, don't count on it.

Everything comes down to whether you have extra cash that would enable you to move on. If you sell the property in a short sale (where the lender accepts less than what you owe), you won't be able to buy a home for three to five years. And you may be required to agree to pay back the missing money to the lender (known as the deficiency) over the years. Moreover, if you don't pay the loan in full, you should be aware that the short sale will hurt your credit score and credit history.

A final option is to purchase a new property and rent your existing home. If you can do that, you may be able to take advantage of lower prices in your neighborhood of choice and hold out while the foreclosure market in your existing home settles.

Chicago-based real estate attorney Samuel J. Tamkin contributed to this column. thinkglink.com; Twitter @glink
Copyright © 2011, Tribune Media Services

Oklahoma mortgage bill comes with chest pain, courtesy of Wells Fargo | NewsOK.com

Oklahoma mortgage bill comes with chest pain, courtesy of Wells Fargo | NewsOK.com

Oklahoma mortgage bill comes with chest pain, courtesy of Wells Fargo
A missing digit caused a series of house payments to be applied backward, instead of forward, until the lender fired off a notice of default. Or did it?

For want of a zero, could a house be lost?
One digit missing from my checking account number, either because I remembered it wrong, or punched it in wrong, or said it wrong, or someone on the receiving end heard it wrong or typed it in wrong, caused our house payment not to be paid in July.


That caused the payment made in August to be applied to the bill due in July, and so on until the payment made the other day was applied to the bill due in October — and then it caused Wells Fargo Home Mortgage to cough out this heart attack on letterhead, which came in the mail:
“YOUR MORTGAGE LOAN IS IN DEFAULT. CALL IMMEDIATELY TO RESOLVE THIS VERY IMPORTANT LETTER.”
Ignoring the chest pain, I called Wells Fargo, then talked to my wife, then called the credit union, then called Wells Fargo again, then talked to my wife again, then called the credit union again, and then pieced together what happened.
My wife made the payment by phone, using my checking account number, which I'd written down for her. Somewhere along the line that zero fell out of my seven-digit account number. So, when Wells Fargo tried to electronically access my account, it wasn't actually my account, or anybody else's, so the credit union answered back with the electronic version of “You have the wrong number.”
And so began the series of payments applied backward instead of forward, and because life is messy and busy and my personal bookkeeping habits and skills are not the best, the mistake went undetected until Wells Fargo saw fit to send me a heart attack via the U.S. mail.
It's dealt with, but what a mess — and the thing is I like Wells Fargo.
Right here, on April 16, 2000, as Wells Fargo was taking down the Norwest Mortgage sign after buying the company, and our home loan, I waxed historic about “the dusty, sepia-toned image of those first Wells Fargo cross-country stagecoaches that comes to mind when someone says ‘Wells Fargo.'”
And I ended with: “Nowadays, Wells Fargo Co. is a diversified company providing banking, insurance, investments, mortgage and consumer finance. But the name will always conjure images of spreading civilization and stability in a wild country. And that's not a bad notion to have when you sit down to write out a house payment.”
How ironic. But I still have no complaints other than over this headache. My wife was ready to hang somebody from a tall oak tree, but the fact is I'm not sure where that zero fell out.
And I am sure that if my bookkeeping skills followed Generally Accepted Accounting Principles rather than my current approach, Write Debit Charges on Scraps of Paper and Stick Them in a Pocket Spanish-English Dictionary, which I've carried in my hip pocket in self-defense for a year now, this ordeal would have been caught before Wells Fargo went trigger-happy.
Two points, though:
I asked one of the people I talked to with Wells Fargo if there was a way to note the nature of the mistake, that we tried in good faith to make the payment and it just didn't “take,” and she mumbled something that included “it's all a numbers game.” That means “a racket,” although I'm sure she meant that nothing — NOTHING — matters but the numbers.
No wonder so many people are just walking away from their houses and house payments.
And, at one point, the other person with Wells Fargo said, emphatically, “Your loan isn't actually in default.” Well, right here on this Wells Fargo letterhead, in big, all-capitalized letters, it emphatically says: “YOUR MORTGAGE LOAN IS IN DEFAULT.”
So either the person or the letter was dishonest. That is no way to treat any customer, especially a good one. And it makes me doubt even more any statistics from anywhere that claim to assess the mortgage, default and foreclosure situation in this country.


Read more: http://newsok.com/oklahoma-mortgage-bill-comes-with-chest-pain-courtesy-of-wells-fargo/article/3624484#ixzz1eAsowe00

Don't forget our free workshop!!!

If your mortgage is more than $25,000 upside down, or you have received a notice of default letter from your bank, you MUST attend this seminar.

DON'T LOSE YOUR HOME!!!

Counselors will be on hand for one on one sessions as well.


Don't forget to register for the seminar!!!
Free Seminar / Workshop Location: Gurnee Community Center, Gurnee, IL

-Sunday November 20, 2011 at 2:00 PM

seminar registration line 847-356-1564 You will receive your registration confirmation number Please be prepared when calling: 1. Paper/Pen for Seminar Address and Room Number 2. Defendants Name(s) 3. Case Number if available 4. Return Phone Number (and / or) Email
Foreclosure Defenses Network

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Apartments a bright spot in shaky housing market

As potential homebuyers remain leery, developers find success with rentals

It was a no-brainer. Laura Palmer knew she wanted to rent.

The 28-year-old who raises money for Drake University moved into an apartment in Sherman Hill in August.

Despite her stable job and roots here, Palmer likes the flexibility of renting — “I could move to L.A. tomorrow” — and the freedom from maintenance — “if something breaks, I don’t have to fix it.”

In the hunkered-down uncertainty of the American economy, people increasingly don’t want to buy a home. Apartment vacancy in metro Des Moines is lower than it has been since 2002, and has fallen from 6.6 percent at the end of 2009 to 3.7 percent at the end of September, according to data from Reis, a firm that tracks real estate.

Lenders have picked up on the trend and started investing — both in renovation projects and new construction.

“The multifamily housing market has been the top-performing sector of the real estate market in the Des Moines metro area during 2011,” said Jeni Cooper, a senior lending officer at Bankers Trust.

Bankers Trust, the largest Iowa-based bank, has helped finance 37 multifamily projects in the first half of 2011, Cooper said. Banks across the metro, and even credit unions, have gotten involved.

Hubbell Realty is working on four apartment projects, including 120 new units in Grimes, and it’s contemplating converting the Mitchell Tranmission building at the corner of Locust and 15th streets looking across the west end of the sculpture garden. Conlin Properties, which manages 7,000 rental units in the metro area, is renovating three apartment projects and plans to break ground on a new one this spring.

The banks
West Bank, Community State Bank, Valley Bank, Bank of the West and Iowa State Bank are all investing, developers say, and Wells Fargo and the University of Iowa Credit Union have gotten involved.

“It’s a positive sign that we’re seeing some new construction,” said Dave Nelson, president of West Bank.

“When you see cranes and bulldozers out working, that’s always a good thing.”

West Bank is financing Hubbell’s 120-unit Meadowlark Place in Grimes, a project that’s notable because it will be brand new, and the apartments will rent at market rates, without income requirements.

Nelson says lending for apartment projects still does not approach the investment his bank makes in single-family dwellings, and he’s not ready to announce a shift in the way people live or the ways banks in central Iowa lend.

Dave Mackaman, who manages business banking in central Iowa for Wells Fargo, also takes a measured tone.

“We have seen a slight uptick in demand when it comes to apartment financing,” Mackaman said. “Locally, this is a healthy segment of the economy. Occupancy rates are high, property values are stable, and project cash flows are relatively strong.”

Some of the lending for apartments is refinancing old mortgages, Nelson said.

“Most apartment projects are not debt-free,” he said.

The market
Bankers and developers now say openly what many unlucky first-time homebuyers already know: Condos aren’t selling.

“We haven’t made any money on them, so we quit doing them,” said Jim Conlin, CEO of Conlin Properties Inc.

Conlin has three tax credit-funded apartment building renovations under way — one downtown and two in south Des Moines. In return for the tax credits, developers must offer lower-income tenants below-market rents.

The company is wrapping up a new exercise center at its 176-unit Chapel Ridge apartments in West Des Moines, a project funded by Bankers Trust.

Conlin plans to break ground on a new rental-unit project in the spring of 2012. He has narrowed plans down to three sites — one on the east side, one downtown and one in West Des Moines. He hopes to have the land purchased by month’s end.

Part of the reason for the demand for apartments is the weakness of the single-family housing market, both nationally and in Iowa.

“There’s no question about it,” Conlin said. “Single-family dwellings have depreciated on average 30 percent across the United States. If you put 20 percent down, pretty soon that’s wiped out.”

Hubbell reported last month that sales to first-time buyers were down 30 percent in 2011. Buying a house since the financial crisis has become more daunting, and Steve Niebuhr, a senior vice president at Hubbell Realty, said it won’t get easier soon.

It’s harder to qualify for a mortgage. Credit scores have to be higher, down payments are heftier.

“It’s hard to get into homeownership, which helps the rental,” Niebuhr said. “A lot of the young people coming out of college are maybe not enamored with home ownership like they used to be.”

The economy
Officials at Conlin and Hubbell both believe the housing and foreclosure crisis will continue for years, and the rental market will grow as a result.

“You’ve got 20 million people in this country transitioning from ownership to rental,” Conlin said.

He attended a national conference in Chicago with other developers and housing experts recently.

“No one there thought that the problems in the residential industry were going to be solved in seven years,” he said. “I think we’re in a little better position in Des Moines and in Iowa, because we have a little lower unemployment rate.”

Rents haven’t risen enough for developers to build projects willy-nilly without the help of tax credits. Conlin said all his projects involve tax credits because that’s the only way to make them work.

But rents have risen 1.1 percent in the metro in the past year, said Rick Krause, a vice president at CBRE/Hubbell Commercial.

Landlords are no longer offering perks to potential renters, like free TVs, which is another way rental prices have risen, Krause said.

Average rent in the metro is $715 per month, Krause said, and rents will continue to rise until enough units are built to meet demand. There’s a direct link between that demand and the decline in home ownership that’s happening across the United States, he said. While 69.2 percent of Americans owned a home at the peak of the market, now only 66 percent do.

“The American dream of owning your own home has become a nightmare for some,” Krause said. “Until homes start going up in price, people aren’t going to be willing to take the risk.”

For Palmer, buying a home never really seemed like an option, and many of her friends, both married and unmarried, are thinking the same way.

“I have many friends who are Realtors, so I’m sure they would have been happy to sell me a home,” Palmer said.

“I’ve been in Des Moines for six years, and the whole time I’ve rented.”

http://www.desmoinesregister.com/article/20111117/BUSINESS/311170036/-1/SPORTS13/Apartments-bright-spot-shaky-housing-market

Fewer mortgages going bad but foreclosures expected to increase

Fewer mortgages going bad but foreclosures expected to increase

Fewer mortgages going bad but foreclosures expected to increase

By E. Scott Reckard, Los Angeles Times
November 18, 2011
Fewer home loans are in trouble these days, but despite some improvements, the nation is not even halfway through cleaning up the foreclosure mess, industry experts said.

It could take three or four years to return to a typical pattern of delinquencies and foreclosures, the Mortgage Bankers Assn. said in releasing its quarterly delinquency report Thursday.

An economist for the trade group declined to estimate how many households had lost their homes since the mortgage meltdown four years ago, or how many more foreclosures were to come.

But the Center for Responsible Lending, a nonpartisan advocacy group that accurately predicted a foreclosure tidal wave in 2006, issued its own assessment Thursday: 2.7 million American households had lost their homes as of February, with an even greater number to come.

The advocacy group, which analyzed 27 million home loans made from 2004 through 2008, estimated that an additional 3.6 million mortgages were in foreclosure or likely to fail.

"That means the nation is not yet midway through a foreclosure crisis that mires the economy," the Durham, N.C., group said in releasing its study.

The mortgage industry stopped funding high-interest subprime mortgages and other risky loans in 2007, when the meltdown made it impossible to sell them. But the backlog of soured mortgages from that era was enormous and has been compounded by lingering unemployment of about 9% nationally and about 12% in California.

Things are slowly improving, said Mike Fratantoni, the mortgage bankers' economist. The number of borrowers who had missed at least one payment but were not yet in foreclosure dropped below 8% for the first time since the fourth quarter of 2008. Just a year ago, it was 9.13%.

The percentage of home loans mired in the foreclosure process was up slightly from a year earlier at 4.43%, compared with the 1% that once had been considered normal, Fratantoni said.

The backlog remains high in part because lenders eased up on foreclosures for much of 2011 after revelations that they had mishandled legal paperwork and procedures when repossessing homes in the past.

The regulatory pressures on home lenders include a lengthy investigation by a task force of state and federal officials. California Atty. Gen. Kamala D. Harris is also pursuing a separate probe in hopes of forcing more write-downs of principal for troubled California borrowers.

Longtime industry observer Guy Cecala, publisher of Inside Mortgage Finance, said he believes it will take at least two more years to resolve the crisis.

"A lot depends on how fast banks … can clear out defaulted mortgages and foreclosed properties," he said.

Fratantoni said that with the industry more confident that it has fixed its foreclosure procedures, "a couple of big servicers" he didn't identify had recently stepped up foreclosures. Many of those, he said, involved boom-era subprime loans that had been modified at least once but fell back into delinquency.

Reflecting this push, the percentage of loans on which foreclosure actions were started during the third quarter was 1.08%, up from 0.96% in the second quarter. California had the nation's fifth-highest rate of new foreclosures: nearly 1.5% in the latest quarter.

The statistics also reflected a much higher backlog of unresolved foreclosures in states where they are handled in the courts, compared with states like California that do not normally require court approval.

The rate of homes in foreclosure was highest in Eastern and Midwestern states that route all home repossessions through the courts, with Florida at more than 14% and New Jersey at 8%.

California, which for years had one of the highest rates of loans in foreclosure, fell to 19th on the list at a bit over 4%. Of states that handle foreclosures without court procedures, Nevada was the only one high on the total foreclosure-rate list, with nearly 8% of its mortgages in foreclosure.

In a separate report Thursday, mortgage finance giant Freddie Mac said the typical rate on a 30-year fixed-rate home loan this week was an even 4%, a statistically insignificant rise from 3.99% a week earlier. The 15-year fixed loan rates rose to 3.31% from 3.30%.

Expressing some optimism about the business, Frank Nothaft, a Freddie Mac economist, said the economy "is showing potential for further gains in the near term" as the near-record-low mortgage rates persist.

Retail sales rose for the fifth straight month in October, consumer confidence rose for the third straight month in early November, and home builder confidence rose this month to the strongest level since May 2010, Nothaft noted.

scott.reckard@latimes.com

Before you hand the keys to your lender, know the costs

Before you hand the keys to your lender, know the costs

Ilyce Glink
Real Estate Matters
November 17, 2011

Q. Let's say I stop paying my mortgage each month. And let's say there is some time before the house is foreclosed. Who continues to cover insurance, utilities and such? Also, what impact does a deed-in-lieu of foreclosure have on my credit rating?

A. You may be a bit confused about what a foreclosure is and how the process works.

Let's start at the top: You are responsible to pay your lender the amount you owe under your loan. You are also responsible for paying your property taxes, utility bills and insurance premiums.

If you stop paying your lender, your lender may decide to pay the homeowner's insurance premium and the real estate taxes due on the home. But it would be paying those expenses on your behalf, and it would have the right to come after you for those payments in the future.

If the home does go into foreclosure and is sold, the lender gets to use the money from that sale to reimburse itself for any amounts it is owed. If there are not enough funds to pay off the lender, it has the right in most states to sue a borrower for the deficiency and to collect whatever it can get, even after the home is sold.

If you stop paying your lender, if you live in a state that allows deficiency judgments, the lender can pursue you for years to come. Worse, the lender can sell the debt you owe to a collection agency, which can pursue you for years -- unless you file for bankruptcy and get the debt dismissed.

Finally, please understand that when you stop making mortgage payments, your credit history will be severely damaged. Going into foreclosure is even worse for your credit. Your credit score might take a hit of anywhere from 150 to 250 points, leaving you with a credit score in the low 500s after the foreclosure sale.

A deed-in-lieu of foreclosure is a little better for your credit history, but not much.

Q. I have applied for a deed-in-lieu of foreclosure on a vacation beach home I own, on which I can no longer make the payments. I'm 72 years old and semiretired, with a mortgage on my primary home. If the bank doesn't grant the foreclosure and I discontinue payments, will it just issue a standard foreclosure?

A. A deed-in-lieu of foreclosure is a process that a bank and a borrower take that speeds up the foreclosure process.

Instead of the bank going to court, obtaining a judgment against you, and then selling the home through a sheriff's sale authorized by the court, you and the bank agree to transfer ownership of the home to the bank.

The process is relatively simple and avoids the costs and expenses involved in the court foreclosure process. A deed-in-lieu of foreclosure is a voluntary process, and the lender is under no obligation to go that route. The bank can decide to proceed through normal channels to get money to satisfy the debt you owe.

If the bank is unwilling to work with you in a deed-in-lieu arrangement and you fail to sell the home through a short sale, and then you stop paying your mortgage, the lender can and will proceed to foreclose the home through the court system.

The bank can (and probably will) go after you personally for any shortage in the amount that it gets from the foreclosure sale. That shortage is called a deficiency, and the judgment a bank gets to collect the shortage is called a deficiency judgment.

In most states, lenders can get a deficiency judgment against a homeowner for an investment property or second home. Some states limit deficiency judgments on primary residences, but since the property in question here is a vacation home, you should expect your lender not to let you off the hook for the amount you may still owe on the loan.

There is also a tax implication: Through 2013, the IRS will not consider deficiencies on primary residences as taxable personal income. But for a vacation home, rental property or a second home, a deficiency would be treated as personal income and you will owe federal and possibly state taxes on it as well.

During the process of negotiating your deed-in-lieu of foreclosure, you should work with your lender to determine if it would be willing to waive any deficiency judgment against you. That is to say, the lender would take the property and agree that they won't go after you for anything else later.

Beware: your lender may remain quiet on the issue of whether its collection department will go after you for any amount you owe arising from your loan. And you should also know that your lender may decide to sell off the deficiency to a collection agency, and you may find yourself facing calls from a collection agency for years to come.

Chicago-based real estate attorney Samuel J. Tamkin contributed to this column. thinkglink.com; Twitter @glink
Copyright © 2011, Tribune Media Services

Home foreclosures starting to rise again - Nov. 17, 2011

Home foreclosures starting to rise again - Nov. 17, 2011

Home foreclosures starting to rise again

NEW YORK (CNNMoney) -- Home foreclosure filings rose in the third quarter, as recent declines in the rate of new foreclosures came to an end, according to an industry trade group.
The Mortgage Bankers Association reported that foreclosures started for 1.08% of outstanding home loans, up from 0.96% in the second quarter.

The jump in foreclosures came even as the rate of homeowners who are delinquent on their mortgages fell. Those only 30 days late making payments improved to 3.19%, the lowest level since the second quarter of 2007. And those 60 and 90 days or more late in making payments also declined, bringing the percentage of delinquent loans not in foreclosure to under 8%.
But the MBA said increased foreclosure filings by several big lenders led to the upturn in homes in foreclosure.
"While the delinquency picture changed for the better in the third quarter, the foreclosure data indicated that we are not out of the woods yet," said Michael Fratantoni, MBA's vice president of research and economics.
Fratantoni said he couldn't speculate on what caused the turn by those major servicers. But other experts said some of the increase could be due to lenders working through problems with their loan documentation that had put a brake on some foreclosures.
The recent foreclosure increases are a sign that filings are "coming out of the rain delay we've been in for the past year as lenders corrected foreclosure paperwork and processing problems," said James Saccacio, CEO of RealtyTrac, a private service that also tracks foreclosure activity.
A year ago, several major banks and mortgage servicers -- including Ally, Bank of America (BAC, Fortune 500), and JPMorgan Chase (JPM, Fortune 500) -- acknowledged problems with paperwork they were using to file foreclosure actions against delinquent homeowners. They announced various changes in practices and temporary moratoriums in new filings while they worked through the problems.
But Fratantoni said the moratoriums tended to slow foreclosure sales being completed more than it slowed new filings.

t's also possible that some lenders are seeing some improvement in the housing market, ironically giving them greater incentive to start the foreclosure process.
For example, some experts say there have been new signs of life recently in the Las Vegas real estate market. Nevada had the highest rate of foreclosure filings in the quarter, and one of the biggest increases, as new filings hit nearly 2.5% of loans there.
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First Published: November 17, 2011: 10:03 AM ET

“Robo-Signing Mistakes STILL found in IL, Often great defense for Homeowners.

Winnebago County recorder still finds instances of 'robo-signing'

By Alex Gary
BUSINESSROCKFORD.COM
Posted Nov 15, 2011 @ 09:18 PM

ROCKFORD — In late 2010, the furor over “robo-signers” revealed the complicated — and occasionally sloppy, if not entirely negligent — mountains of paperwork that accompany mortgages and the process of foreclosure.

Attorneys representing homeowners in several states uncovered the fact that many banks, or the companies the banks used to process paperwork, were authorizing documents without checking their accuracy or even giving them more than a cursory glance. In some cases, these “robo-signers” fraudulently signed the names of bank officials, attorneys and notaries.

Several of the largest banks, including Wells Fargo, JPMorgan Chase and Bank of America, halted foreclosures for several months in states that don’t use the court system in order to check the accuracy of the documents in their foreclosure pipeline.

In Illinois, foreclosures are processed through the courts so the foreclosure wave continued unabated. And Winnebago County Recorder Nancy McPherson believes she has found evidence that “robo-signing” is still rampant here in the Rock River Valley.

McPherson is one of 12 county recorders collecting evidence of mortgage document fraud for Illinois Attorney General Lisa Madigan.

She joined the wave of state attorneys general investigating foreclosures in May when she issued subpoenas against Lender Processing Services and Nationwide Title Clearing, two Florida-based companies that provide “document preparation services” for mortgage lenders to use against borrowers who are in default, foreclosure or bankruptcy.

McPherson’s office sampled a small number of foreclosure documents in her office and found hundreds of apparent forgeries.

“‘Linda Green’ is on documents as vice president of Wells Fargo. She’s (on other documents as) vice president of (Mortgage Electronic Registration Systems Inc.). She is vice president of Optical Mortgage Co. as well, and all of the signatures are completely different,” McPherson said. “Another name to take notice of is ‘Pat Kingston.’ She or he has several different titles. Lately, (the lenders or document providers) haven’t been using ‘Linda Green’ as much. There’s a new set of fake names. ‘Brian Blaine’ is the vice president of Chase Mortgage Bank. He is vice president of Washington Mutual Bank. He is vice president of Nations Credit Financial Services Corp. He’s vice president and attorney in fact for IndyMac Federal Bank.”

Not surprisingly, McPherson is opposed to settling with major lending institutions.

“We’re telling the attorney general not to settle. They haven’t fixed the problem yet,” McPherson said.

Reportedly, the nation’s 50 attorneys general are close to announcing a $20 billion settlement with major lenders that would give those lenders legal immunity.

Robin Ziegler, a spokesman for Madigan’s office, said the “investigation and the negotiations with the banks are both ongoing.”

“It is the goal of the attorney general that any settlement must require significant, meaningful reform and provide immediate relief for homeowners across the country,” Ziegler said in an email.

Recently, McPherson has noticed a greater number of mortgage modification documents — a change from past practice, because major mortgage lenders have been criticized for being unwilling to modify loans to help struggling homeowners.

On Saturday, McPherson will join Madigan’s staff at the Hilton Garden Inn for a five-hour seminar to help homeowners avoid foreclosure rescue scams and explore available state programs.

“The number of modifications we’re seeing is a lot higher,” she said. “If this investigation finally pushes banks to do more modifications, then it’s a very good thing for neighborhoods and taxpayers.”

Reach Assistant Business Editor Alex Gary at agary@rrstar.com or 815-987-1339.

Copyright 2011 Rockford Register Star. Some rights reserved

The Foreclosure Defenses Network

The Foreclosure Defenses Network Team is NOT a mortgage modification or workout company. We know that you may have already tried to work with your lender.
Our focus is to help you protect yourself, your home, your credit and your assets by Giving Hope and Peace of Mind by using Financial Management Alternatives.
Many, but not everyone is struggling to make their mortgage payments financially. Some people are wondering what if anything can be done with one simple fact:
WE OWE MORE ON THE PROPERTY THAN IT IS CURRENTLY WORTH
Now what? There are many alternatives. The team looks at your entire situation, rather than focusing on one aspect of your picture. Usually people talk to a specialized professional and then are surprised when miraculously the ONLY way for you to get help is that one specialty.
There are MANY alternatives and strategies you can use if you know about them. As a team, your file is reviewed before any alternatives or strategies are suggested.
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The network is comprised of not just one field of expertise, but many.

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Zillow 286 of Homeowners With Mortgages Underwater | Mortgage Rates & Trends: Mortgage Blog

Zillow 286 of Homeowners With Mortgages Underwater | Mortgage Rates & Trends: Mortgage Blog

Zillow Chief Economist Dr. Stan Humphries commented:

“While we still have a ways to go in terms of home value depreciation, the pace at which home values are falling has declined considerably during the course of the year. This slower pace signals that a stabilization is on the horizon”.

That home prices continue to fall means that the number of homeowners who are underwater will likely continue to increase. Home prices are still falling due to to a fundamental imbalance in supply and demand. There is a lack of demand for homes as a result of unemployment, consumer uncertainty, tight credit, and lack of household formation. At the same time there is a glut of unsold homes (on the market and off the market) because of foreclosure and lack of home sales.

In Phoenix, Atlanta, Tampa, and Sacramento more than 50% of all mortgaged homes are underwater. Miami, Cleveland, Chicago, and Denver all have underwater rates of over 38%. If nothing is done, it will be years, if not decades, before these markets recover.

There is more than $700 billion of negative equity in the housing market. This negative equity makes it exceedingly difficult for the housing market, and thus the U.S. economy to recover. Negative equity keeps people from selling their homes, from moving to find a new job, and from spending money. Georgetown Law Professor Adam Levitin has an excellent post that details the problems that this huge amount of negative equity is causing. The Professor says that any housing plan that doesn’t do something to address this problem is woefully inadequate. I agree with him 100%. Current housing policy has done a horrific job in solving the problems that are bogging down the housing market.

At some point or another, I suspect policy-makers will realize that one way or another, principal write-downs are necessary to heal the housing market. Whether this comes through bankruptcy reform or in some alternate way, it is going to have to happen.

REGISTER ONLINE FOR THE NOVEMBER 17th and NOVEMBER 20th SEMINARS

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Free Seminar / Workshop Location: Gurnee Community Center, Gurnee, IL
-Thursday November 17, 2011 at 7:00 PM
-Sunday November 20, 2011 at 2:00 PM

seminar registration line 847-356-1564 You will receive your registration confirmation number Please be prepared when calling: 1. Paper/Pen for Seminar Address and Room Number 2. Defendants Name(s) 3. Case Number if available 4. Return Phone Number (and / or) Email
Foreclosure Defenses Network

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Don't forget to register for the seminar!!!

Free Seminar / Workshop Location: Gurnee Community Center, Gurnee, IL
-Thursday November 17, 2011 at 7:00 PM
-Sunday November 20, 2011 at 2:00 PM

seminar registration line 847-356-1564 You will receive your registration confirmation number Please be prepared when calling: 1. Paper/Pen for Seminar Address and Room Number 2. Defendants Name(s) 3. Case Number if available 4. Return Phone Number (and / or) Email
Foreclosure Defenses Network

WE CAN HELP!!!!

Morgan Stanley To Reform Foreclosure Practices

Morgan Stanley (NYSE:MS) became the second largest bank after The Goldman Sachs Group Inc. (NYSE:GS) to adopt new foreclosure procedures in an effort to stop unlawful and troublesome foreclosure practices. Morgan Stanley has reached an agreement with the New York’s Department of Financial Services about the new set of standards.

Morgan Stanley, along with two other mortgage servicers – American Home Mortgage Servicing Inc. and Vericrest Financial Inc. – have assented to the mortgage servicing changes, the Department of Financial Services said in a statement on Thursday. Morgan Stanley’s mortgage-servicing unit Saxon Mortgage Services Inc., which the company sold to Ocwen Financial Corp. (NYSE:OCN) in October, is also a part of the deal.

This is definitely good news for the industry amid volatile economic conditions. However, the agreement does not reduce the chances of investigations and legal actions against these companies.

The mortgage servicing deal with Morgan Stanley eliminates use of ‘robo-signing’, providing single point of contact. This will also end the practice of referring a borrower to foreclosure while the request is for a loan modification. The deal also includes evaluation of borrowers’ credentials more comprehensively, revise the way fees are charged, upgrade lenders’ employee-training programs and supervise lawyers involved in foreclosures.

It all started in October 2010, when JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corporation (NYSE:BAC) and Ally Finance Inc. temporarily suspended foreclosures across the country, following the detection of faulty foreclosure paperwork. Due to this, the U.S. bank regulators, along with the state attorney generals (AGs), geared up to take actions against mortgage servicers.

Actually, the present settlement deal of Morgan Stanley will act as a guideline for other mortgage providers and set a standard for processing loans and foreclosures. The agreement would also help homeowners to protect their properties from wrongly foreclosed.

Furthermore, we expect that if the abovementioned corrective measures are implemented properly, it would surely save us from yet another foreclosure crisis.

Morgan Stanley currently retains a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating.