A Speacial Thanks Is In Order For Everyone

” I came into your firm with SO MANY other companies calling me about helping me.  I found your law firm from a mutual friend of mine that used you in the past.  I was originally confused and wanted to make sure I got the RIGHT help.  I realized that your law firm would provide me with ALL I needed in order to get my missed payments and monthly payment back on track.  A special thank you is in order to Joe Prince in your office.  He managed to hold my hand throughout this process.  I would call him and he would always be there to explain what ever I needed answered.  I can only say thank you and I am blessed to of found you.   I will definitely be referring more people to you!”

Pamela C.

Texas

Lack of Inventory, Not Shadow Inventory, Is the Real Concern

DS News took some time to chat with Daren Blomquist, VP of RealtyTrac, to get a reading on the current state of the foreclosure market and what is expected to come.

Although foreclosures served to strip homes of their value during the housing crisis, Blomquist says foreclosures will be seen as a welcome sign this year and act as a stimulus.

While this may seem counterintuitive, Blomquist said, “because of the severe lack of inventory available for sale, foreclosures could actually fill that inventory and provide more fuel to the fire that’s been slowly building over the past year as more sales occur.”

Though, he added, “this is assuming foreclosures are being done property,” meaning according to regulation and legislation that’s been passed to protect homeowners.

Currently, Blomquist says there are still a lot of foreclosures that need to be dealt with, but the good news is that foreclosure rates are much lower for newer loans.

RealtyTrac data shows the foreclosure rate for loans originated in 2009 is drastically lower than the rate on loans originated between 2004 and 2008.

For loans originated in 2009 and beyond, the rate is less than 1 percent, while loans between 2004 and 2008 have a foreclosure rate that sits anywhere between 2-5 percent, Blomquist explained.

Even though banks may have a buildup of foreclosures that are yet to hit the market, Blomquist waived off theories that banks are holding onto the properties deliberately and the release of the properties will cause home values to plummet.

“[Banks] are not intentionally holding back. It’s because they’re being so cautious about making sure they’re dotting all their i’s and cross their t’s,” he said.

This, he added, has slowed the process down to a complete halt in some cases and a crawl in others.

As for fears the release of foreclosures will bring down prices, Blomquist isn’t worried this will happen to the market.

“This so called shadow inventory never hit full force, so now I think we’re at a point where the pendulum has swung completely the other way and the housing market needs more inventory, so 2013 would be a serendipitous time for banks to release that inventory,” he said.

Looking ahead, Blomquist says RealtyTrac is still expecting to see around 600,000 REOs in 2013 based on the number of foreclosure starts in 2012, which hit about 1.2 million. Blomquist explained the roll rate is for about 50 percent of foreclosure starts to end up as REOs.

He also says completed short sales are expected to exceed the 2012 number, which will likely be around 1 million.

The foreclosure situation in 2013 also won’t be uniform across the country, but will be on a state-by-state basis, with judicial states dominating much of foreclosure activity in the first half of the year, according to Blomquist.

Then, in the second half of the year, and perhaps into 2014, the spotlight will be on non-judicial states.

Blomquist says this will be because new legislation as seen in California, as well as Oregon, Washington, and Nevada is starting to slow down the foreclosure flow in those areas, which he thinks will result in a backlash of foreclosure activity near the end of this year and into 2014.

First-Time Jobless Claims Up, Adding Labor Market Concerns

First-time claims for unemployment insurance jumped 20,000 to 362,000 for the week ending February 16, the Labor Department reported Thursday. Economists expected 359,000 initial unemployment claims.

The spike in filings—the largest in three weeks—marked a reversal of what had been a downward trend in layoffs. The report on claims for the week ending February 9 was revised to 342,000 from the originally reported 341,000.

The four-week moving average of first time claims increased 8,000 to 360,750, the second highest level of the year.

Continuing claims—reported on a one-week lag—rose 11,000 to 3,148,000. The prior week’s report of continuing claims was revised upward to 3,137,000 from the original report of 3,114,000. The four-week moving average of continuing claims fell 6,750 to 3,186,250, the lowest level since July 2008.

The continuing claims data series tracks the number of longer-term unemployed Americans who qualify for regular state jobless benefits and often shows large movements, depending on first-time claims 26 weeks earlier and legislative changes to state unemployment programs.

The larger-than-expected increase in first-time claims was affected in part by the seasonal adjustment factors the Labor Department applies to account for exogenous events that historically affect claim filings. Those factors, as published by the Labor Department, will be unfavorable for the next six weeks.

This week’s report on initial claims covered the same week used by the Bureau of Labor Statistics (BLS) for the monthly employment situation report, which will be released March 8. From mid-February to mid-March, first-time claims for unemployment insurance increased 27,000, and the four-week average of initial claims rose by 750. Those increases will be a drag on the employment and jobs numbers, adding another hurdle for new hiring to overcome.

Claims reports in the first two months of any year are highly volatile, with seasonal adjustments moving in a wide range to attempt to normalize for layoffs that typically occur in industries that staff up at year-end. In addition, reports are affected by holidays, which delay processing of claims filed electronically.

Initial claims fell in three of the first seven weeks of 2012, dropping an average of 15,000. In the four weeks in which claims rose, the average increase was a little over 8,000. This year, claims have fallen in four of the first seven weeks with an average drop of 18,500 but the average increase in the other three weeks was 23,000 suggesting employers may have done even more short term hiring for the holiday season.

The total number of people claiming benefits in all programs for the week ending February 2 was 5,610,327, a decrease of 307,848 from the previous week. There were 7,486,681 persons claiming benefits in all programs in the comparable week in 2012.

According to the BLS, 12,332,000 persons were officially considered unemployed in January, which means that of those individuals counted as unemployed, 6.72 million were not receiving any form of government unemployment insurance, up from 6.41 million one week earlier.

The Labor Department said states reported 1,849,056 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending February 2, a decrease of 232,319 from the prior week. There were 2,903,219 persons claiming EUC in the comparable week in 2012.

States continue to borrow from the federal government to cover shortfalls in those funds which will eventually have to be repaid—unless Congress intervenes—with higher assessments on employers. Since those assessments are a percentage of payrolls, they discourage employers from adding new workers. As of February 15, 23 states had borrowed a total of $28.3 billion. One week earlier, 23 states had an aggregate $28.1 billion in outstanding loans to cover shortfalls. Five states—California, Indiana, New York, North Carolina and Ohio—owe more than $1 billion, which may require higher unemployment premiums or special assessments on employers in those states.

According to the Labor Department detail, also reported on a one-week lag, the largest increases in initial claims for the week ending February 9 were in Kansas (+2,344), Puerto Rico (+492), Virginia (+465), Indiana (+205), and Rhode Island (+176), while the largest decreases were in California (-4,830), New York (-4,401), Oregon (-2,211), Pennsylvania (-2,020), and Wisconsin (-1,670).

BofA to Offer Principal Reductions of More than $100K

Some Bank of America borrowers may be in for principal reductions in amounts exceeding $100,000, according to the latest developments in the settlement the bank and four other large servicers made with state and federal regulators.
Of the five servicers participating in the settlement, BofA is set to pay the largest portion of the total $25 billion settlement. The bank will pay $3.24 billion to the government and $8.58 billion to borrowers.

Of BofA’s total, $1 billion is part of a separate settlement regarding loan origination issues for Countrywide, which BofA acquired in 2008.

While the other four servicers in the national settlement are being required to diminish principal so underwater borrowers have loan-to-value ratios of 120 percent or less, BofA will be reducing principal for about 200,000 homeowners to fall in line with current market values.

For some deeply underwater borrowers, this may result in reductions of more than $100,000.

The expanded principal reductions may prevent BofA from paying $850 million in penalties, according to the Wall Street Journal.

Fitch Ratings responded to the news stating that the 200,000 principal reductions will be “neutral to negative for some RMBS bondholders and potentially beneficial for the bank.”

Fitch suggests the loans most likely to qualify for the extended principal reductions will be those originated between 2005 and 2007.

“Because the bank has already reserved for penalties, any reversals could help BAC’s income going forward,” Fitch stated. “While the agreement will help the bank reduce the amount of penalties it owes over time, the aggregate best case benefit is moderate from a financial perspective.”

By: Krista Franks Brock

Treasury Reinstates HAMP Incentives as Servicers Show Improvement

The Treasury Department says servicers participating in the Home Affordable Modification Program (HAMP) are getting better at evaluating homeowners for the program, including noticeable improvement in assessing borrower income to determine program eligibility and calculate the amount of their modified payments.

Treasury reported Friday that during the fourth quarter of 2011, seven of the largest participating servicers were found to be in need of “moderate improvement” and two servicers were found to need only “minor improvement” with respect to the specific performance metrics tested. No servicer was found in need of substantial improvement last quarter.

OneWest Bank and Select Portfolio Servicing performed at the highest level, needing only minor improvement. The seven servicers deemed to need moderate improvement include: America Home Mortgage Servicing, Bank of America, CitiMortgage, GMAC Mortgage, JPMorgan Chase, Ocwen, and Wells Fargo.

HAMP performance reviews evaluate servicers based on three categories: identifying and contacting homeowners; homeowner evaluation and assistance; and program reporting, management, and governance.

Treasury singled out JPMorgan and BofA in its latest report, noting that both servicers had improved their practices over the last quarter. Treasury had been withholding HAMP incentive payments from the two companies because prior servicer assessments found them to be in need of “substantial improvement.”

Bank of America was found to have remedied essentially all areas previously identified as needing improvement and continued to demonstrate improved processes generally, Treasury said.

JPMorgan Chase showed marked progress in remedying a number of outstanding issues from previous quarters, according to the report, including improving the speed at which it processes eligible homeowners for permanent HAMP modifications and strengthening its internal quality assurance processes around the program.

Treasury said it agreed to release withheld incentives for past deficiencies as part of the $25 billion federal-state mortgage servicing settlement announced last month, but officials stress that they retain the right to withhold incentives in the future should the results of HAMP compliance reviews warrant such remedial action.

As of the end of January, participating servicers had granted 951,319 permanent HAMP modifications to distressed borrowers. There are an additional 76,343 HAMP trials currently in active status.

By: Carrie Bay

Bill to streamline foreclosures clears key state Senate committee

A quickie foreclosure bill that would require a homeowner to present a sound defense or face an immediate judgment in some cases moved closer to a full legislative hearing Monday with the blessing of the Senate Judiciary Committee.

Monday’s vote marked the farthest a proposal to streamline Florida’s strained foreclosure process has advanced in the Legislature since the housing collapse, but it’s in no way a done deal, lawmakers and lobbyists say.

The 5-2 approval of Senate Bill 1890 came with hesitation from some committee members and firm opposition from homeowners and foreclosure defense attorneys. One man, who called the sponsors of the bill a “disgrace” during public comment, brought blown-up images of his own foreclosure documents that he said show evidence of fraud.

The plan, which contains some consumer protection language, such as reducing the time a bank could pursue a homeowner for unpaid mortgage debt from five years to one year, has earned support from the Real Property Probate and Trust Law section of the Florida Bar.

But the Florida Bankers Association has yet to take a position, and it is flatly opposed by the Florida Consumer Action Network.

“We cannot support this bill because it places too much of the burden of repairing the foreclosure problem on the backs of homeowners and (community) associations,” said Alice Vickers, a network attorney.

House sponsor Rep. Kathleen Passidomo, R-Naples, and Senate sponsor Jack Latvala, R-St. Petersburg, said Monday that they will work through constituent concerns this week to get matching bills. They are seeking approval in the plan’s two remaining Senate committee stops. The House version of the bill (HB 213) has one committee stop left.

“This bill won’t solve everything overnight,” Passidomo said. “It will take a while for these things to sort themselves through, but if we do nothing, how many years will we be in this situation?”

The House and Senate foreclosure proposals aim to streamline foreclosures by allowing any lienholder to hasten a foreclosure case if a property is abandoned or the homeowner does not respond with a defense within 20 days of being served.

Currently, only the bank that owns the primary lien can file for what is called a “show cause” order in which a homeowner must show why the bank doesn’t have a foolproof case. If a judge sides with the bank, a final foreclosure judgment can be issued immediately.

In most cases, even a weak defense is enough to have a judge stop the show cause proceeding and force the traditional foreclosure process to occur, said Pete Dunbar, legislative counsel for the Real Property, Probate and Trust Law section of the Florida Bar.

That’s why most properties affected by the proposals would be abandoned or ones where the homeowner doesn’t respond to the foreclosure, Dunbar said.

“We’re dealing with a statute that was written decades ago and that never contemplated the situation we face today,” Dunbar said about current foreclosure law.

Consumer advocates, however, have several concerns with the bill, including a restriction that would allow a homeowner only monetary restitution if property was taken fraudulently. Passidomo said the provision is to protect future owners of the home from having to defend their claim to title.

Also, the bill requires the lender to prove on the front end their right to file for foreclosure – a rule already on the books, but not enforced, lawyers said Monday.

Lynn Drysdale, an attorney with the Jacksonville-based Legal Aid Society, said the banks also already have the power to foreclose more quickly, but choose not to.

Sen. David Simmons, R-Altamonte Springs, said he’s heard similar concerns.

“The judges are saying that they can easily move these cases along but when they come in the attorneys aren’t prepared,” said Simmons, a member of the Senate Judiciary Committee who voted to approve the bill. “It’s the attorneys the banks hired that aren’t doing the jobs they need to do to move the cases along.”

ByKimberly Miller

Report Reveals Delinquency and Foreclosure Rates Down for 4th Quarter

A recent Mortgage Bankers Association (MBA) report revealed that overall, delinquencies and foreclosures are on a decline, and when gauging where the U.S. housing market stands in terms of recovery, Jay Brinkmann, MBA’s chief economist and SVP for research and education, said we are about halfway to the pre-recession days.

The MBA released its 2011 4th quarter national delinquency survey results Thursday. Delinquency in the report is defined as loans that are at least one payment past due but not in the process of foreclosure.

Overall, the delinquency rate for mortgage loans on one-to-four unit residential properties decreased to 7.58 percent, compared to 7.99 percent for the third quarter, and 8.25 percent a year ago during the fourth quarter in 2010.

“The total delinquency rate peaked at 10.1 percent in the first quarter of 2010. It now stands at 7.6 percent, about half way to the longer-term pre-recession average of roughly 5 percent,” Brinkmann.

With the exception of the 30-day bucket, which increased from 3.19 percent last quarter to 3.22 percent this quarter, all delinquencies were down. More notably, loans delinquent 90 or more days decreased from 3.50 percent last quarter to 3.11 percent, a 39 point decrease.

Capital Economics said the fall of borrowers in the more severe stages is encouraging if it means that more borrowers are becoming current again, and the lack of improvement for 30 day delinquencies could be the severe delinquencies falling.

Brinkmann said the improvement in mortgage performance reflects the improvements seen in the job market and broader economy, and added that the mortgage delinquency rate is actually falling faster than the unemployment rate is declining.

Delinquency rates for problematic loans had significant decreases, with prime ARM loans at  9.22 percent this quarter, compared to 10.73 percent last quarter, and subprime loans dropping 157 points, ending at 19.67 percent, compared to 21.24 percent last quarter.

The exception to this downward trend were FHA loans,
which saw an increase in delinquency rates at 12.36 percent this quarter, compared to 12.09 percent last quarter.

“Part of the reason is that the FHA book of business has shown rapid growth, and purchase loans originated in 2008 and 2009 are only now entering the peaks of a normal delinquency curve,” said Brinkmann.

Another exception to the notable trends seen in the report is the percentage of loans in foreclosure inventory. While the percentage is down this quarter at 4.38 percent compared to 4.43 percent last quarter, it is still far from the halfway mark on the road to recovery.

Brinkmann said the longer-term average is roughly 1.2 percent for foreclosure inventory.

Foreclosure starts, loans on which foreclosure actions were initiated, were down at 0.99 percent, compared to 1.08 percent for the third quarter, and 1.27 percent a year ago. Seriously delinquent loans – loans that are 90 days or more past due or in foreclosure – were at 7.73 percent this quarter compared to 7.89 percent last quarter, and 8.60 percent a year ago.

Foreclosure inventory in judicial states actually increased and was significantly higher at 6.80 percent, compared to inventory in non-judicial states, which was at 2.79 percent and saw a decrease over time. Data also revealed that foreclosure starts for both types of states were relatively similar.

Michael Fratantoni, MBA’s VP of research and economics, explained that the issue is not the rates at which non-judicial versus judicial states enter into foreclosure, but the rates at which these loans exit out of foreclosure.

Data from the report also revealed that top five states with the highest share of loans in foreclosure were judicial, with the exception of California. The five states – Florida  (24.2 percent), California (10.2 percent), Illinois (6.6 percent), New York (6.2 percent), and New Jersey (5.4 percent), make up 52.6 percent of the share of loans in foreclosure.

Though, Fratantoni noted that California is turning around more quickly than other states.

California, which held 12.8 percent of the share of loans in foreclosure last year, dropped 2.6 percent this quarter, compared to the 0.8 and 1 percent drop for the other four states over the year.

When asked about the impact of the AG settlement on the foreclosure process during a conference call, Brinkmann, said that he thinks we will see a drop in foreclosure inventory numbers, and when moving into foreclosure sale or REO, we might see some speed up eventually.

Capital Economics also said that data from RealtyTrac shows a slight rise in foreclosure filings in January, which could mean foreclosures are being processed more quickly, added with the recent settlement which may speed up the foreclosure process.

By: Esther Cho

Obama’s Budget Calls for $61B from Banks

President Obama’s budget proposal continues to receive a barrage of criticism, especially from Republican lawmakers.

Obama specifically targets banks through a Financial Crisis Responsibility Fee, through which he intends to raise $61 billion from the nation’s largest banks.

The money is intended to “compensate the American people for the extraordinary assistance they provided to Wall Street, as well as to discourage excessive risk-taking,” according to the budget proposal.

A portion of the fees collected from the big-bank tax would be used to fund the mass refinance program outlined in the president’s State of the Union address. The fee would be assessed against firms with assets of more than $50 billion and would be paid over a 10-year period, starting next year.

“The Administration continues to actively implement ongoing Troubled Asset Relief Program (TARP) activities targeted to assist homeowners threatened by foreclosure, including unemployed homeowners and those with negative home equity,” Obama goes on to declare in the budget proposal.

He specifically mentions the $10 billion in savings brought to American homeowners through HAMP, although after

three years this program still falls short of its original goal of reaching 3 million to 4 million homeowners in its first two years.

As of December, about 910,000 loans had been permanently modified through HAMP.

The Financial Executives International, an industry organization for senior-level financial executives, released a statement this week expressing concerns about the budget’s increased taxes on American businesses and “American job creators.”

“Unfortunately, aspects of the President’s proposals to increase revenue would harm American job creators as well,” states the group’s president and CEO, Marie Hollein.

“FEI observes with concern that the budget proposes roughly $450 billion in tax increases on American businesses over the next 10 years,” states a press release from Financial Executives International.

House Budget Committee Chairman Rep. Paul Ryan (R-Wisconsin) has also been outspoken about Obama’s tax increases and calls attention to the budget’s net increase in spending.

“So we’re going to tax our most successful job creators, where most – more than half our jobs come from in America – at about 45 percent next year?” he asked on CNBC’s Kudlow Report.

Ryan says that while the budget may call for deficit reduction in some areas, overall it requires a net increase in spending.

Furthermore, he says the budget’s $1.9 trillion tax increases “will make it harder for businesses to create jobs and for workers to spur economic growth.”

Like other Republican congressmen, Ryan commented on the show, “This is really more of a campaign document than a credible fiscal solution to our big budget problems.”

By: Krista Franks Brock

Securing a mortgage even when you have good credit

If you ask Kaitlin and Joey Riceputo how they ended up in their three bedroom,  two bath, one-story home, you’d better have a lot of time. “We were  going to find something quickly, we were going to get a steal. We learned that  was not true,” said Kaitlin Riceputo. Married in 2009, they rented  while they searched. Walk-throughs, paperwork and negotiating led them  to three separate dream homes. But each was stolen away by cash-buyers  who didn’t need to win the trust of a lender. “They’d have a cash  offer, and that would be that,” said Joey Riceputo. But in December,  they made an offer on a house off of Northlake Blvd. They were  practically measuring the drapes when the bank called. Stellar credit  and steady work was not enough to get an agreement. “The bank wanted  their tax returns and an explanation of something on their tax return,” said  their realtor, Bob Grave of Illustrated Properties, who is also Kaitlyn  Riceputo’s father. “It pushed us back a couple of weeks. We wanted to  have Christmas here,” said Joey Riceputo. Why are banks being so  careful? “They’re scared. Look at all the foreclosures we have here,”  said Polyana da Costa, a mortgage reporter at Bankrate.com. Da Costa  says lenders that follow tighter post-collapse guidelines from the Federal  Housing Administration win two benefits: -The FHA will insure their  loan -The bank can sell the loan to Fannie Mae and Freddie Mac.
“Very few lenders are going to want to take the risk of holding loans in  their books right now,” said da Costa. Da Costa says lenders will ask  for tax returns, pay stubs and for minimum credit scores; anything to determine  whether a first-time buyer is a worthy risk. The Riceputos say the bank  was smart to invest in them, and that they were smart to invest in a home.
“We really wanted something that we could call our own, come in and really  feel like this is where we belong,” said Kaitlyn Riceputo. There are  some tips that realtors and mortgage experts have: 1. Get pre-approved 2. Have ALL your paperwork so that when a lender asks for more information,  you don’t waste time where a competitor can swoop in 3. Be flexible with  time-frame
Read more: http://www.wptv.com/dpp/news/local_news/special_reports/impact-5-securing-a-mortgage-even-when-you-have-good-credit#ixzz1mXzxRQsj

By: Evan Axelbank

After Two-Year Lull, Delinquencies Rise for Second Straight Quarter

The national mortgage delinquency rate rose during the fourth quarter of 2011, TransUnion reported Tuesday, marking only the second time since the end of 2009 the Chicago-based credit bureau has recorded an increase in its quarterly assessment of past due mortgage payments.

The first was during the third quarter of 2011, with the succession signaling what could be a troubling trend in the making.

TransUnion calculates the mortgage delinquency rate as the percentage of borrowers 60 or more days behind on their payments, excluding those that are already in foreclosure.

The rate increased from 5.88 percent at the end of the third quarter to 6.01 percent as of the end of the fourth.

Between the third and fourth quarters of 2011, all but 13 states experienced increases in their mortgage delinquency rates, according to TransUnion’s study.

On a more granular level, 64 percent of metropolitan areas saw increases in mortgage delinquencies during the final three months of last year. The previous three months also had the distinction of increases in 64 percent of metros. That’s up from only 21 percent during the second quarter of 2011.

“To see that, quarter over quarter, fewer homeowners were able to make their mortgage payments is not welcome news. However, it was not unexpected,” said Tim

Martin, group vice president of U.S. housing in TransUnion’s financial services business unit.

Martin explained that there tends to be a natural seasonality – which was evident well before the recession – of higher delinquencies during the fourth quarter period of any year, perhaps because borrowers must balance holiday spending versus debt payments.

More intrinsic to the current conditions, Martin noted that on top of the seasonal flux, home prices continued to deteriorate in the fourth quarter of 2011 and unemployment remained stubbornly high.

“This combination leads to more negative equity in homes and reduced real personal income that can affect borrowers’ ability and willingness to pay their mortgages,” he said.

Martin does see some “more encouraging news” behind the numbers in TransUnion’s latest report – when looking at the data year-over-year, more homeowners are now making their mortgage payments on time, as evidenced by the 6 percent drop in the national delinquency rate since the fourth quarter of 2010.

“While it is certainly good to see the rate dropping, at this pace it will take a very long time for mortgage delinquencies to get back to normal,” Martin said.

The highest mortgage delinquency rates during the fourth quarter were found in Florida (14.27%), Nevada (12.08%), New Jersey (8.32%), and Arizona (7.50%).

States with the lowest mortgage delinquency rates included North Dakota (1.50%), South Dakota (2.45%), Nebraska (2.57%), and Alaska (2.77%).

TransUnion’s forecast calls for mortgage delinquency rates to drift downward marginally in 2012 as the economic environment begins to modestly improve.

In the meantime, however, the agency says the industry may see a quarter or two more of slightly elevated nonpayment rates as some consumers are not able to, or decide not to, repay their mortgage debt obligations in light of the uncertain economic outlook.

By: Carrie Bay