Another Bank Gets Spanked...Wells Fargo!
Years after the fact, the hammer is continuing to fall on banks that didn’t conduct themselves well during the financial crisis. Wells Fargo (NYSE: WFC ) is to pay more than $6.5 million to settle allegations from the Securities and Exchange Commission that it didn’t adequately inform clients about the risks of some of its mortgage-backed securities. No one likes being fined but, at least this unhappy chapter is about to end for the bank and its shareholders, not to mention its clients.
Don’t trust your broker
Like many banks of that era, Wells Fargo enthusiastically recommended investments tied to mortgage-backed securities to its clients. Unfortunately, also true to the times, the company seemingly let its enthusiasm get ahead of itself. According to the SEC, it sold those goods "without fully understanding their complexity or disclosing the risks to investors."
The entire financial industry had -- and has -- egg on its face from its collective actions during the crisis, which are by no means limited to misadventures with mortgage securities. This bad behavior is indicated by the sheer amount of the fines handed down so far by the SEC, which total nearly $2.2 billion. That amount, by the way, is more than the net profit posted by more than a few big-name banks last year, not the least of which is noted SEC crisis-era miscreant Bank of America (NYSE: BAC ) .
Looked at in the scope of the overall crisis aftermath, Wells Fargo dodged a few bullets. Paying $6.5 million for a bank of its size is chump change, particularly when matched against what others were penalized. Wells allegedly failed to do its due diligence before recommending the investments. It’s not in the super bad guy category that the SEC says "concealed from investors risks, terms, and improper pricing in CDOs and other complex structured products."
Scofflaws in this group include: Citigroup (NYSE: C ) , which is alleged to have misled investors about a not-small $1 billion CDO, and is currently facing a $285 million settlement with the Feds for its conduct, on top of a $75 million slap it’s already paid for shenanigans related to subprime mortgage asset exposure; JPMorgan Chase’s (NYSE: JPM ) J.P. Morgan Securities unit, now recovering from a $154 million settlement for not being forthright with customers regarding a particular mortgage securities transaction; and Big Daddy, Goldman Sachs (NYSE: GS ) , currently swallowing a bitten bullet after it agreed to pay the Commission a record $550 million fine for effectively lying about one of its products tied to subprime mortgages.
For its relatively lighter sin of pushing mortgage-related bad stuff ignorantly, Wells Fargo lands closer to the bottom of the list in terms of penalties. Its fine -- which, by the way, is to be paid by the bank, even though it’s not admitting or denying the SEC’s allegations -- is more or less in line with companies alleged to have engaged in lesser misconduct.
Tiny drops in the bucket
The relatively light fine is likely one big reason why Wells Fargo stock wasn’t hit hard -- or much at all --by the news. Relief was probably the dominant emotion of the bank’s investors following the suit, who can now look forward instead of glancing back in worry, as the SEC breathes down their necks.
The number $6.5 million is lower than any significant item on the bank’s income statement or balance sheet. Even on the basis of its most recent quarter, the amount is dwarfed by net interest income ($11 billion) and bottom line ($4.6 billion). The penalty amount doesn’t even come close to what the company will be paying in dividends ($1.16 billion or so) for its most recent quarter.
Meanwhile, bottom line is good (although it’d be nice if revenue started growing again), the stock is teasing its two-year high, and out of the 35 analysts who track the company, 26 rate it some form of “buy.”
No shareholder likes it when their company is zapped for a penalty, and Wells Fargo needs to be more prudent and less reckless going forward. If it can do so, and keep on the clean side of the law, it might put the past behind it and enjoy a bright future.
Some argue that it’s a good time to buy into banks, now that the crisis is (hopefully) behind us. To find out what you need to know about Wells Fargo, click here for a free copy of The Motley Fool’s special report, The Only Big Bank Built to Last.
Thursday, August 23, 2012
Fannie Mae Announces New Short Sales Guidelines
Fannie Mae Announces New Short Sale Guidelines
New Guidelines Streamline Short Sale Processes to Prevent Foreclosures and Help Communities Stabalize:
WASHINGTON, DC – Fannie Mae (FNMA/OTC) announced that it will implement new short sale guidelines for servicers to follow as part of the Federal Housing Finance Agency’s Servicing Alignment Initiative. The new guidelines streamline documentation requirements, waive deficiencies for borrowers that successfully complete a short sale and set standard payments for subordinate lien holders. In addition, all servicers will have the authority to approve and complete short sales that conform to the requirements without receiving individual approval from Fannie Mae.
“Short sales have become an increasingly important tool in preventing foreclosures and stabilizing communities,” said Leslie Peeler, senior vice president, National Servicing Organization, Fannie Mae. “We want to help as many homeowners avoid foreclosure as possible. It is vital that servicers, junior lien holders and mortgage insurers step up to the plate with us. These new guidelines will open doors to help more homeowners qualify for short sales, remove barriers to completing short sales, and make the process more efficient for homeowners and servicers.”
NOTICE: Short Sale Training and designations…worth it or waste of money? Become the lender preferred short sale agent. All major lenders Bank of America, Wells Fargo, Chase, Citi.
Under the new guidelines, servicers will be permitted to approve a short sale for borrowers who have certain hardships but have not yet gone into default. Those hardships include the death of a borrower or co-borrower, divorce or legal separation, illness or disability or a distant employment transfer. In addition, Fannie Mae is significantly reducing the documentation required to complete a short sale, including requiring no documentation of a borrower’s hardship 90 days or more delinquent and have a credit score lower than 620. This will remove barriers for those homeowners who are most in danger of foreclosure and increase servicer efficiency in completing a short sale.
Fannie Mae will also limit subordinate-lien payments to $6,000. Previously, subordinate lien holders often attempted to negotiate higher payments. The servicer will be able to offer the maximum payment of $6,000 in order to facilitate the transaction. By setting a standard payout amount and a limit for every transaction, Fannie Mae is removing the guess work and standardizing the transaction to help accelerate the short sale process.
Fannie Mae has taken a number of steps to make the short sale process more efficient, including implementing a Short Sale Assistance Desk to help real estate professionals in targeted markets work out challenges in individual short sales, requiring servicers to complete short sale evaluations within 60 days and making military families who receive Permanent Change of Station orders eligible for a short sale. Fannie Mae completed 38,717 short sales through the first six months of 2012 and 70,025 in full year 2011.
The Servicing Guide Announcement implementing the changes to Fannie Mae’s short sale guidelines will be distributed to servicers and posted to www.efanniemae.com on Wednesday, August 22. Homeowners can learn more about short sales, modifications and other foreclosure alternatives at www.knowyouroptions.com.
Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America’s secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America.
New Guidelines Streamline Short Sale Processes to Prevent Foreclosures and Help Communities Stabalize:
WASHINGTON, DC – Fannie Mae (FNMA/OTC) announced that it will implement new short sale guidelines for servicers to follow as part of the Federal Housing Finance Agency’s Servicing Alignment Initiative. The new guidelines streamline documentation requirements, waive deficiencies for borrowers that successfully complete a short sale and set standard payments for subordinate lien holders. In addition, all servicers will have the authority to approve and complete short sales that conform to the requirements without receiving individual approval from Fannie Mae.
“Short sales have become an increasingly important tool in preventing foreclosures and stabilizing communities,” said Leslie Peeler, senior vice president, National Servicing Organization, Fannie Mae. “We want to help as many homeowners avoid foreclosure as possible. It is vital that servicers, junior lien holders and mortgage insurers step up to the plate with us. These new guidelines will open doors to help more homeowners qualify for short sales, remove barriers to completing short sales, and make the process more efficient for homeowners and servicers.”
NOTICE: Short Sale Training and designations…worth it or waste of money? Become the lender preferred short sale agent. All major lenders Bank of America, Wells Fargo, Chase, Citi.
Under the new guidelines, servicers will be permitted to approve a short sale for borrowers who have certain hardships but have not yet gone into default. Those hardships include the death of a borrower or co-borrower, divorce or legal separation, illness or disability or a distant employment transfer. In addition, Fannie Mae is significantly reducing the documentation required to complete a short sale, including requiring no documentation of a borrower’s hardship 90 days or more delinquent and have a credit score lower than 620. This will remove barriers for those homeowners who are most in danger of foreclosure and increase servicer efficiency in completing a short sale.
Fannie Mae will also limit subordinate-lien payments to $6,000. Previously, subordinate lien holders often attempted to negotiate higher payments. The servicer will be able to offer the maximum payment of $6,000 in order to facilitate the transaction. By setting a standard payout amount and a limit for every transaction, Fannie Mae is removing the guess work and standardizing the transaction to help accelerate the short sale process.
Fannie Mae has taken a number of steps to make the short sale process more efficient, including implementing a Short Sale Assistance Desk to help real estate professionals in targeted markets work out challenges in individual short sales, requiring servicers to complete short sale evaluations within 60 days and making military families who receive Permanent Change of Station orders eligible for a short sale. Fannie Mae completed 38,717 short sales through the first six months of 2012 and 70,025 in full year 2011.
The Servicing Guide Announcement implementing the changes to Fannie Mae’s short sale guidelines will be distributed to servicers and posted to www.efanniemae.com on Wednesday, August 22. Homeowners can learn more about short sales, modifications and other foreclosure alternatives at www.knowyouroptions.com.
Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America’s secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America.
Fannie Mae Announces New Short Sale Guidelines
New Guidelines Streamline Short Sale Processes to Prevent Foreclosures and Help Communities Stabilize
WASHINGTON, DC – Fannie Mae (FNMA/OTC) announced that it will implement new short sale guidelines for servicers to follow as part of the Federal Housing Finance Agency’s Servicing Alignment Initiative. The new guidelines streamline documentation requirements, waive deficiencies for borrowers that successfully complete a short sale and set standard payments for subordinate lien holders. In addition, all servicers will have the authority to approve and complete short sales that conform to the requirements without receiving individual approval from Fannie Mae.
“Short sales have become an increasingly important tool in preventing foreclosures and stabilizing communities,” said Leslie Peeler, senior vice president, National Servicing Organization, Fannie Mae. “We want to help as many homeowners avoid foreclosure as possible. It is vital that servicers, junior lien holders and mortgage insurers step up to the plate with us. These new guidelines will open doors to help more homeowners qualify for short sales, remove barriers to completing short sales, and make the process more efficient for homeowners and servicers.”
NOTICE: Short Sale Training and designations…worth it or waste of money? Become the lender preferred short sale agent. All major lenders Bank of America, Wells Fargo, Chase, Citi.
Under the new guidelines, servicers will be permitted to approve a short sale for borrowers who have certain hardships but have not yet gone into default. Those hardships include the death of a borrower or co-borrower, divorce or legal separation, illness or disability or a distant employment transfer. In addition, Fannie Mae is significantly reducing the documentation required to complete a short sale, including requiring no documentation of a borrower’s hardship 90 days or more delinquent and have a credit score lower than 620. This will remove barriers for those homeowners who are most in danger of foreclosure and increase servicer efficiency in completing a short sale.
Fannie Mae will also limit subordinate-lien payments to $6,000. Previously, subordinate lien holders often attempted to negotiate higher payments. The servicer will be able to offer the maximum payment of $6,000 in order to facilitate the transaction. By setting a standard payout amount and a limit for every transaction, Fannie Mae is removing the guess work and standardizing the transaction to help accelerate the short sale process.
Fannie Mae has taken a number of steps to make the short sale process more efficient, including implementing a Short Sale Assistance Desk to help real estate professionals in targeted markets work out challenges in individual short sales, requiring servicers to complete short sale evaluations within 60 days and making military families who receive Permanent Change of Station orders eligible for a short sale. Fannie Mae completed 38,717 short sales through the first six months of 2012 and 70,025 in full year 2011.
The Servicing Guide Announcement implementing the changes to Fannie Mae’s short sale guidelines will be distributed to servicers and posted to www.efanniemae.com on Wednesday, August 22. Homeowners can learn more about short sales, modifications and other foreclosure alternatives at www.knowyouroptions.com.
Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America’s secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America.
Monday, July 16, 2012
Technology for Realtors
Simple tools make smartphone videos shine
SEATTLE – July 16, 2012 – With more than 365 million Apple mobile devices (iPhone, iPad and iPod Touch) and 350 million Android devices in consumers’ hands, it’s easy to say that more folks have access to a video camera than ever before.
But how to take advantage of the surprisingly robust video features offered by the mobile devices? It’s a question many are grappling with, as they produce shaky videos with poor sound that don’t look as polished as some of the best work on YouTube and Facebook.
Solutions are easy!
In a nutshell, steady the image and improve the sound, and you’re halfway home. The good news: You don’t need a big video camera anymore to get great videos. The cameras in smartphones have so improved that with a little thought and some tools, you can make great-looking work.
Here’s what you need:
Stabilizers
Studio Neat Glif ($20) connects your smartphone to a tripod. If you don’t have a tripod, you can skip that step and pay $40 for Joby’s Gorrillamobile. The phone fits directly onto the portable tripod with bendable legs. You could put the unit on a table, for instance, or bend it onto the back of a chair. A bracket can also help – try the $10 Heavy Duty L-bracket from photo retailer Adorama. With this, you can add a light as well.
Musicians have turned to IK Multimedia’s $40 iKlip as a way to hold their iPad on microphone stands, to easily turn the pages of their sheet music at gigs when performing. The iKlip also works great for video: Place the iPad into the unit and start recording high-def video without having to worry about shaky images.
Tip: A word of caution for all three devices – remember to shoot in horizontal mode. When you flip the screens vertically, you only record part of the image – which looks OK for photos but terrible for video.
Sound
The audio from the internal microphones on the iPhone, iPad and iPod Touch is terrible. There are simple solutions to dramatically improve your audio, and while they’re not cheap, they will make a huge difference in your videos.
You have three options: a microphone, a cable to connect the mike to the iPhone or an audio recorder.
• Mike cables. Action Life Media has a $29.99 cable that will hook a microphone with a connection directly into the iPhone, iPod Touch or iPad’s headphone input. The company also sells cable connectors for higher-end mikes with XLR inputs.
• Microphones. If you’re looking to do an interview with Grandma about her early days or a chat with your son about this weekend’s soccer game, you could buy the same kind of mike you see folks wearing every day on TV – a lavaliere mike that hangs on their lapel. Mikes aren’t cheap, but you could start with an entry-level model from the likes of RadioShack, which offers one for just $39.99. Another option: IK Multimedia’s iRig Cast is a small $39.99 mike that plugs directly into the iPhone, iPod Touch or iPad. It will do wonders in relatively quiet rooms, but in a crowd – such as a party or bar – it won’t make much of a difference.
• Audio recorder. My favorite go-to device is the $299 Zoom H4n audio recorder. You can plug two microphones directly into it (great for interviews) and also make use of its two, excellent internal microphones as well, which, if they’re placed close enough to you in a quiet room, will sound just as good as the lavaliere mike. (The audio won’t go directly to the camera – you’ll have to marry it with your video file when you start editing. The easiest way is to make your own “Clapper,” the tool that’s been used at the beginning of movies since the Charlie Chaplin era. Just clap your hands when you start recording – or use an app, as described at right.) If $299 is too steep, consider Zoom’s entry-level model. The H1 sells for about $100 and has one mike input and one internal mike.
SEATTLE – July 16, 2012 – With more than 365 million Apple mobile devices (iPhone, iPad and iPod Touch) and 350 million Android devices in consumers’ hands, it’s easy to say that more folks have access to a video camera than ever before.
But how to take advantage of the surprisingly robust video features offered by the mobile devices? It’s a question many are grappling with, as they produce shaky videos with poor sound that don’t look as polished as some of the best work on YouTube and Facebook.
Solutions are easy!
In a nutshell, steady the image and improve the sound, and you’re halfway home. The good news: You don’t need a big video camera anymore to get great videos. The cameras in smartphones have so improved that with a little thought and some tools, you can make great-looking work.
Here’s what you need:
Stabilizers
Studio Neat Glif ($20) connects your smartphone to a tripod. If you don’t have a tripod, you can skip that step and pay $40 for Joby’s Gorrillamobile. The phone fits directly onto the portable tripod with bendable legs. You could put the unit on a table, for instance, or bend it onto the back of a chair. A bracket can also help – try the $10 Heavy Duty L-bracket from photo retailer Adorama. With this, you can add a light as well.
Musicians have turned to IK Multimedia’s $40 iKlip as a way to hold their iPad on microphone stands, to easily turn the pages of their sheet music at gigs when performing. The iKlip also works great for video: Place the iPad into the unit and start recording high-def video without having to worry about shaky images.
Tip: A word of caution for all three devices – remember to shoot in horizontal mode. When you flip the screens vertically, you only record part of the image – which looks OK for photos but terrible for video.
Sound
The audio from the internal microphones on the iPhone, iPad and iPod Touch is terrible. There are simple solutions to dramatically improve your audio, and while they’re not cheap, they will make a huge difference in your videos.
You have three options: a microphone, a cable to connect the mike to the iPhone or an audio recorder.
• Mike cables. Action Life Media has a $29.99 cable that will hook a microphone with a connection directly into the iPhone, iPod Touch or iPad’s headphone input. The company also sells cable connectors for higher-end mikes with XLR inputs.
• Microphones. If you’re looking to do an interview with Grandma about her early days or a chat with your son about this weekend’s soccer game, you could buy the same kind of mike you see folks wearing every day on TV – a lavaliere mike that hangs on their lapel. Mikes aren’t cheap, but you could start with an entry-level model from the likes of RadioShack, which offers one for just $39.99. Another option: IK Multimedia’s iRig Cast is a small $39.99 mike that plugs directly into the iPhone, iPod Touch or iPad. It will do wonders in relatively quiet rooms, but in a crowd – such as a party or bar – it won’t make much of a difference.
• Audio recorder. My favorite go-to device is the $299 Zoom H4n audio recorder. You can plug two microphones directly into it (great for interviews) and also make use of its two, excellent internal microphones as well, which, if they’re placed close enough to you in a quiet room, will sound just as good as the lavaliere mike. (The audio won’t go directly to the camera – you’ll have to marry it with your video file when you start editing. The easiest way is to make your own “Clapper,” the tool that’s been used at the beginning of movies since the Charlie Chaplin era. Just clap your hands when you start recording – or use an app, as described at right.) If $299 is too steep, consider Zoom’s entry-level model. The H1 sells for about $100 and has one mike input and one internal mike.
Insurance Tips for home buyers!
CHICAGO – July 16, 2012 – Property insurance is confusing. At a minimum, new buyers should understand the levels and types of coverage, and take a few additional steps to protect themselves.
1. Know the difference between replacement cost and market value. Rebuilding a home is usually cheaper than buying an existing structure, unless the property was a foreclosure. The key: Accurately determine the cost of rebuilding when finalizing the details on a homeowners insurance policy.
2. Take a home inventory to determine the proper amount of personal property protection. Generally, policies cover 50-75 percent of the replacement value of the house. However, this may not be enough to cover certain valuables, such as jewelry, fine art, collections, electronics and other expensive items. A separate rider may be needed and should be discussed with an insurance agent.
3. Have enough liability protection. Liability coverage protects a homeowner if they’re sued for an injury that takes place on their property. Many policies will even cover a policyholder if an incident happened away from the house. Depending on their assets, some homeowners might want an additional umbrella policy if they’re worried about being sued for more than the liability coverage offered in their basic policy.
4. Know what isn’t covered. Carefully study the exclusions section of a homeowners insurance policy. If anything raises a red flag, consider additional coverage. One example: Almost no insurance policy covers flooding. If a homeowner lives in an area prone to flooding, he or she might want to consider flood insurance too.
5. Consider additional living expenses if forced from the house. If a house becomes unlivable due to a flood, earthquake, fire or other disasters, a family will need to pay for living accommodations; and they may need additional money for food, transportation and other expenses. This coverage is “additional living expenses” (ALE) and a benefit that’s usually worth about 20 percent of a home’s replacement value. Be aware of the specific policy’s benefits, limitations and exclusion.
When shopping for home insurance quotes, find a company that is financially stable and has a high customer satisfaction rating. Two resources to check these qualities are A.M. Best for financial strength ratings and J.D. Power and Associates for their annual customer service rankings, according to HomeownersInsurance.net, a website that connects homeowners with agents.
© 2012 Florida Realtors®
1. Know the difference between replacement cost and market value. Rebuilding a home is usually cheaper than buying an existing structure, unless the property was a foreclosure. The key: Accurately determine the cost of rebuilding when finalizing the details on a homeowners insurance policy.
2. Take a home inventory to determine the proper amount of personal property protection. Generally, policies cover 50-75 percent of the replacement value of the house. However, this may not be enough to cover certain valuables, such as jewelry, fine art, collections, electronics and other expensive items. A separate rider may be needed and should be discussed with an insurance agent.
3. Have enough liability protection. Liability coverage protects a homeowner if they’re sued for an injury that takes place on their property. Many policies will even cover a policyholder if an incident happened away from the house. Depending on their assets, some homeowners might want an additional umbrella policy if they’re worried about being sued for more than the liability coverage offered in their basic policy.
4. Know what isn’t covered. Carefully study the exclusions section of a homeowners insurance policy. If anything raises a red flag, consider additional coverage. One example: Almost no insurance policy covers flooding. If a homeowner lives in an area prone to flooding, he or she might want to consider flood insurance too.
5. Consider additional living expenses if forced from the house. If a house becomes unlivable due to a flood, earthquake, fire or other disasters, a family will need to pay for living accommodations; and they may need additional money for food, transportation and other expenses. This coverage is “additional living expenses” (ALE) and a benefit that’s usually worth about 20 percent of a home’s replacement value. Be aware of the specific policy’s benefits, limitations and exclusion.
When shopping for home insurance quotes, find a company that is financially stable and has a high customer satisfaction rating. Two resources to check these qualities are A.M. Best for financial strength ratings and J.D. Power and Associates for their annual customer service rankings, according to HomeownersInsurance.net, a website that connects homeowners with agents.
© 2012 Florida Realtors®
Eminent Domaine
FONTANA, Calif. In the foreclosure-battered inland stretches of California, local government officials desperate for change are weighing a controversial but inventive way to fix troubled mortgages: Condemn them.
Officials from San Bernardino County and two of its cities have formed a local agency to consider the plan. But investors who stand to lose money on their mortgage investments have been quick to register their displeasure.
Discussion of the idea is taking place in one of the epicenters of the housing crisis, a working-class region east of Los Angeles where housing prices have plummeted. Last week brought another sharp reminder of the crisis when the 210,000-strong city of San Bernardino, struggling after shrunken home prices walloped local tax revenues, announced it would seek bankruptcy protection.
Now – and amid skepticism on many fronts – officials from the surrounding county of San Bernardino and cities of Fontana and Ontario have created a joint powers authority to consider what role local governments could take to stem the crisis. The goal is to keep homeowners saddled by large mortgage payments from losing their homes – which are now valued at a fraction of what they were once worth.
“We just have too much pain and misery in this county to call off a public discussion like this,” said David Wert, a county spokesman.
The idea was broached by a group of West Coast financiers who suggest using the power of eminent domain, which lets the government seize private property for public use. In this case, they would condemn troubled mortgages so they could seize them from the investors who own them. Then the mortgages would be rewritten so the borrowers would have significantly lower monthly payments.
Steven Gluckstern, chairman of the newly formed San Francisco-based Mortgage Resolution Partners, says his main concern is to help the economy, which is being held back by the mortgage crisis.
“This is not a bunch of Wall Street guys sitting around saying, ‘How do we make money?’” he said. “This was a bunch of Wall Street guys sitting around saying, ‘How do you solve this problem?’”
Typically, eminent domain has been used to clear property for infrastructure projects like highways, schools and sewage plants. But supporters say that giving help to struggling borrowers is also a legitimate use of eminent domain, because it’s in the public interest.
Under the proposal, a city or county would sign on as a client of Mortgage Resolution Partners, then condemn certain mortgages. The mortgages are typically owned by private investors like hedge funds and pension funds.
Under eminent domain, the city or county would be required to pay those investors “fair value” for the seized mortgages. So Mortgage Resolution Partners would find private investors to fund that.
Mortgage Resolution Partners will focus on mortgages where the borrowers are current on their payments but are “under water,” meaning their mortgage costs more than the home is worth. After being condemned and seized, the mortgages would be rewritten based on the homes’ current values. The borrowers would get to stay, but with cheaper monthly payments. The city or county would resell the loans to other private investors, so it could pay back the investors who funded the seizure and pay a flat fee to Mortgage Resolution Partners.
The company says that overall, all parties will be happy. The homeowners, for obvious reasons. The cities, for stemming economic blight without using taxpayer bailouts. And even the investors whose mortgage investments are seized. Mortgage Resolution Partners figures they should be glad to unload a risky asset.
Rick Rayl, an eminent domain lawyer in Irvine, Calif., who is not connected to the company, isn’t so sure.
“The lenders are going to be livid,” he said. He thinks the plan could have unintended consequences, like discouraging banks and other lenders from making new mortgage loans in an area.
The company says that focusing on borrowers who are current on their loans is a smart way to do business, rewarding those who are already working hard to keep their homes. But, Rayl pointed out, those are also the exact mortgages that investors are eager to keep.
Already, the outcry was heard at the first meeting of the joint powers authority on Friday, even as chairman and San Bernardino County chief executive Greg Devereaux said the entity – which was inspired by Mortgage Resolution Partners’ proposal – has not yet decided on a specific course of action.
Timothy Cameron, managing director of the Securities Industry and Financial Markets Association’s asset managers group, told the authority that residents of the region would find it harder to get loans and investors – including pensioners – would suffer losses. He also said such a move would invite costly litigation.
“The use of eminent domain will do more harm than good,” he said. “We need mortgage investors and lenders to come back to these fragile markets – but this plan will force both groups to avoid them.”
But Robert Hockett, a Cornell University law professor who serves as an unpaid adviser to Mortgage Resolution Partners, was unsympathetic. He likes how the plan forces the hand of uncooperative investors, who have sometimes stifled plans to reduce mortgage payments.
“It’s kind of like saying a loan shark objects to anti-predatory lending laws,” Hockett said.
Theodore Woodard, a 62-year-old retired air conditioner installer, said he’d welcome the help on his five-bedroom home in Fontana. So far, he and his wife have kept up with monthly $3,100 payments, plus taxes and insurance, but it hasn’t been easy, and they have watched several neighbors in the well-manicured neighborhood some 50 miles east of Los Angeles lose their homes to foreclosure.
“We’ve been making our monthly payments, barely making them, but we just pay them and try to survive off what’s left,” said Woodard, who estimates his house has lost a third of its value since 2004.
In San Bernardino County, the problem is clear. The median home price has plunged to $150,000 from $370,000 in five years. The combined San Bernardino-Riverside metro area has the highest foreclosure rate of any large metro area in the country, at four times the national average, according to RealtyTrac, which tracks foreclosure properties.
– July 16, 2012 –
Officials from San Bernardino County and two of its cities have formed a local agency to consider the plan. But investors who stand to lose money on their mortgage investments have been quick to register their displeasure.
Discussion of the idea is taking place in one of the epicenters of the housing crisis, a working-class region east of Los Angeles where housing prices have plummeted. Last week brought another sharp reminder of the crisis when the 210,000-strong city of San Bernardino, struggling after shrunken home prices walloped local tax revenues, announced it would seek bankruptcy protection.
Now – and amid skepticism on many fronts – officials from the surrounding county of San Bernardino and cities of Fontana and Ontario have created a joint powers authority to consider what role local governments could take to stem the crisis. The goal is to keep homeowners saddled by large mortgage payments from losing their homes – which are now valued at a fraction of what they were once worth.
“We just have too much pain and misery in this county to call off a public discussion like this,” said David Wert, a county spokesman.
The idea was broached by a group of West Coast financiers who suggest using the power of eminent domain, which lets the government seize private property for public use. In this case, they would condemn troubled mortgages so they could seize them from the investors who own them. Then the mortgages would be rewritten so the borrowers would have significantly lower monthly payments.
Steven Gluckstern, chairman of the newly formed San Francisco-based Mortgage Resolution Partners, says his main concern is to help the economy, which is being held back by the mortgage crisis.
“This is not a bunch of Wall Street guys sitting around saying, ‘How do we make money?’” he said. “This was a bunch of Wall Street guys sitting around saying, ‘How do you solve this problem?’”
Typically, eminent domain has been used to clear property for infrastructure projects like highways, schools and sewage plants. But supporters say that giving help to struggling borrowers is also a legitimate use of eminent domain, because it’s in the public interest.
Under the proposal, a city or county would sign on as a client of Mortgage Resolution Partners, then condemn certain mortgages. The mortgages are typically owned by private investors like hedge funds and pension funds.
Under eminent domain, the city or county would be required to pay those investors “fair value” for the seized mortgages. So Mortgage Resolution Partners would find private investors to fund that.
Mortgage Resolution Partners will focus on mortgages where the borrowers are current on their payments but are “under water,” meaning their mortgage costs more than the home is worth. After being condemned and seized, the mortgages would be rewritten based on the homes’ current values. The borrowers would get to stay, but with cheaper monthly payments. The city or county would resell the loans to other private investors, so it could pay back the investors who funded the seizure and pay a flat fee to Mortgage Resolution Partners.
The company says that overall, all parties will be happy. The homeowners, for obvious reasons. The cities, for stemming economic blight without using taxpayer bailouts. And even the investors whose mortgage investments are seized. Mortgage Resolution Partners figures they should be glad to unload a risky asset.
Rick Rayl, an eminent domain lawyer in Irvine, Calif., who is not connected to the company, isn’t so sure.
“The lenders are going to be livid,” he said. He thinks the plan could have unintended consequences, like discouraging banks and other lenders from making new mortgage loans in an area.
The company says that focusing on borrowers who are current on their loans is a smart way to do business, rewarding those who are already working hard to keep their homes. But, Rayl pointed out, those are also the exact mortgages that investors are eager to keep.
Already, the outcry was heard at the first meeting of the joint powers authority on Friday, even as chairman and San Bernardino County chief executive Greg Devereaux said the entity – which was inspired by Mortgage Resolution Partners’ proposal – has not yet decided on a specific course of action.
Timothy Cameron, managing director of the Securities Industry and Financial Markets Association’s asset managers group, told the authority that residents of the region would find it harder to get loans and investors – including pensioners – would suffer losses. He also said such a move would invite costly litigation.
“The use of eminent domain will do more harm than good,” he said. “We need mortgage investors and lenders to come back to these fragile markets – but this plan will force both groups to avoid them.”
But Robert Hockett, a Cornell University law professor who serves as an unpaid adviser to Mortgage Resolution Partners, was unsympathetic. He likes how the plan forces the hand of uncooperative investors, who have sometimes stifled plans to reduce mortgage payments.
“It’s kind of like saying a loan shark objects to anti-predatory lending laws,” Hockett said.
Theodore Woodard, a 62-year-old retired air conditioner installer, said he’d welcome the help on his five-bedroom home in Fontana. So far, he and his wife have kept up with monthly $3,100 payments, plus taxes and insurance, but it hasn’t been easy, and they have watched several neighbors in the well-manicured neighborhood some 50 miles east of Los Angeles lose their homes to foreclosure.
“We’ve been making our monthly payments, barely making them, but we just pay them and try to survive off what’s left,” said Woodard, who estimates his house has lost a third of its value since 2004.
In San Bernardino County, the problem is clear. The median home price has plunged to $150,000 from $370,000 in five years. The combined San Bernardino-Riverside metro area has the highest foreclosure rate of any large metro area in the country, at four times the national average, according to RealtyTrac, which tracks foreclosure properties.
– July 16, 2012 –
Tuesday, May 29, 2012
Our market continues with an upswing...great Return on Investment!
NAPLES —The Naples real estate market is seeing several signs of further improvement as the inventory of homes continues to decrease and median prices increased for the fifth consecutive month, the Naples Area Board of Realtors announced Friday. Brenda Fioretti, The NABOR media relations committee chairwoman, said Realtors are excited about the five consecutive months of median price increases. “That is definitely showing a steady trend upward,” Fioretti said.
The median price increased 22 percent overall from $185,000 in April 2011 to $226,000 in April 2012, according to a prepared statement from NABOR. Statewide, median prices for homes rose in April. The statewide median sales price for single-family existing homes in April was $144,350, up 10.2 percent from the year-ago figure. The statewide median for townhome-condo properties was $108,000, up 16.1 percent over April 2011. Nationally, median prices increased by 1.9 percent.
The median is the price at which half the homes sell for more and half for less.
In the Naples area, the total number of sales of single-family homes and condos was down slightly from the same month last year — 960, compared to 967 in April 2011, according to the NABOR report. Jack McCabe, a Deerfield Beach-based real estate analyst and CEO of McCabe Research & Consulting LLC, said the real estate market is seeing some positive indicators in pricing and sales during the past 12 months. “However, we have to look at the housing market and how it relates to other economic indicators,” McCabe said. “My concerns are that the eurozone debt crisis that may head Europe into a recession will have a negative effect in our housing market because so many sales in the last 12 months have been to foreign nationals.”
Fioretti said the short sales — sales for less than market value — and distressed property sales are below 25 percent of the transactions, which is a healthy sign. At one point short sales and foreclosures made up more than 60 percent of the market, she said.“It means distressed properties are checking out,” Fioretti said. Overall inventory dropped by 13 percent to 7,130, down from 8,214 in April 2011, according to the report. As existing home inventory continues to decline, Fioretti said, construction of new homes will start to increase the local inventory. However, McCabe said, the market is far from back to normal. “While Naples’ total inventory is down to 7,130 units, the number of open foreclosure cases and mortgage loans that are 90 days or more past due dwarfs the Realtors’ listed inventory,” McCabe said. “It’s my opinion that over the next year we are gong to see fewer foreign buyers and an increasing number of distressed properties for sale that will have a negative impact in housing prices.”
According to the NABOR report, overall pending sales increased 20 percent in the $500,000 to $1 million price category from 895 pending sales to 1,070 pending sales for the 12-month period ending April 2012. Pending and closed single-family homes sales in the $1 million to $2 million price range also showed a slight increase from the same month last year. The monthly and quarterly reports track Realtor sales made through the Sunshine Multiple Listing Service (MLS) in Collier County, excluding Marco Island.
Earlier
The Naples real estate market is seeing several signs of further improvement as the inventory of homes continues to decrease and overall median prices have increased for the fifth consecutive month, the Naples Area Board of Realtors announced Friday. Brenda Fioretti, the NABOR media relations chairwoman said Realtors are excited about the five consecutive months of median price increases. "That is definitely showing a steady trend upward," Fioretti said. The median price increased 22 percent overall from $185,000 in April 2011 to $226,000 in April 2012, according to a prepared statement that NABOR released Friday.
The median price increased 22 percent overall from $185,000 in April 2011 to $226,000 in April 2012, according to a prepared statement from NABOR. Statewide, median prices for homes rose in April. The statewide median sales price for single-family existing homes in April was $144,350, up 10.2 percent from the year-ago figure. The statewide median for townhome-condo properties was $108,000, up 16.1 percent over April 2011. Nationally, median prices increased by 1.9 percent.
The median is the price at which half the homes sell for more and half for less.
In the Naples area, the total number of sales of single-family homes and condos was down slightly from the same month last year — 960, compared to 967 in April 2011, according to the NABOR report. Jack McCabe, a Deerfield Beach-based real estate analyst and CEO of McCabe Research & Consulting LLC, said the real estate market is seeing some positive indicators in pricing and sales during the past 12 months. “However, we have to look at the housing market and how it relates to other economic indicators,” McCabe said. “My concerns are that the eurozone debt crisis that may head Europe into a recession will have a negative effect in our housing market because so many sales in the last 12 months have been to foreign nationals.”
Fioretti said the short sales — sales for less than market value — and distressed property sales are below 25 percent of the transactions, which is a healthy sign. At one point short sales and foreclosures made up more than 60 percent of the market, she said.“It means distressed properties are checking out,” Fioretti said. Overall inventory dropped by 13 percent to 7,130, down from 8,214 in April 2011, according to the report. As existing home inventory continues to decline, Fioretti said, construction of new homes will start to increase the local inventory. However, McCabe said, the market is far from back to normal. “While Naples’ total inventory is down to 7,130 units, the number of open foreclosure cases and mortgage loans that are 90 days or more past due dwarfs the Realtors’ listed inventory,” McCabe said. “It’s my opinion that over the next year we are gong to see fewer foreign buyers and an increasing number of distressed properties for sale that will have a negative impact in housing prices.”
According to the NABOR report, overall pending sales increased 20 percent in the $500,000 to $1 million price category from 895 pending sales to 1,070 pending sales for the 12-month period ending April 2012. Pending and closed single-family homes sales in the $1 million to $2 million price range also showed a slight increase from the same month last year. The monthly and quarterly reports track Realtor sales made through the Sunshine Multiple Listing Service (MLS) in Collier County, excluding Marco Island.
Earlier
The Naples real estate market is seeing several signs of further improvement as the inventory of homes continues to decrease and overall median prices have increased for the fifth consecutive month, the Naples Area Board of Realtors announced Friday. Brenda Fioretti, the NABOR media relations chairwoman said Realtors are excited about the five consecutive months of median price increases. "That is definitely showing a steady trend upward," Fioretti said. The median price increased 22 percent overall from $185,000 in April 2011 to $226,000 in April 2012, according to a prepared statement that NABOR released Friday.
Wednesday, May 16, 2012
Fannie Mae, Freddie Mac to make short sales faster
The guidelines, required by the Federal Housing Finance Agency and effective June 15, would require servicers of mortgages backed by Freddie and Fannie to review and respond to requests for short sales within 30 calendar days of receipt of a buyer’s offer.
A short sale is a transaction in which a lender agrees to accept less than the amount owed on the mortgage. It is a “strategic default,” designed to get a borrower out of financial trouble without having to go through the drawn-out legal tangle of the foreclosure process.
A short sale does affect the seller’s credit score, reducing it as much as a foreclosure would, according to Fair Isaac Corp., which developed the system.
On average, according to recent data from foreclosure search engine RealtyTrac, short sales are taking 306 days from start to finish, compared with 113 days in 2006 as the housing market started to unravel.
Area real estate agents who handle such transactions have acknowledged that they do take a long time to complete, and that delays often result in loss of the sale.
But lenders are becoming more accommodating, though they have issues with short sales because unscrupulous investors and others have abused them, perhaps to the tune of $375 million in annual losses nationwide.
In January, there were more than 35,000 short sales nationwide, on pace for more than 105,000 pre-foreclosure sales for the first quarter. That would be the highest quarterly total since the first three months of 2009.
This is not the first time the government has acted to accelerate the short-sale process. In late 2009, the Treasury Department proposed financial incentives and simplified the procedures for completing them. That included a $1,000 payment to servicers and a maximum of $1,000 to go to investors who signed off on payments to subordinate lienholders, the Treasury said. Borrowers were to receive $1,500 in relocation expenses.
The rules, which took effect in April 2010, were supposed to reduce the short-sale process to 10 days, but didn’t.
The pending Fannie Mae/Freddie Mac guidelines will mandate weekly status updates to the borrower if the short sale remains under review after 30 calendar days.
Servicers also will be required to make and then inform borrowers of final decisions within 60 calendar days of receipt of an offer.
By the end of the year, Fannie and Freddie will announce other “enhancements” to the short-sale process, including borrower-eligibility evaluation, simplified documents, and payments to subordinate lienholders. Let's hope this becomes a reality!
Friday, May 11, 2012
The 15 Happiest Seaside Towns in the USA...Naples, FL is #2
The 15 'Happiest Seaside Towns' in the USA
By Kitty Bean Yancey, USA TODAY
By Squire Fox for Coastal Living
2012
Well, it's Kiawah Island, S.C., according to Coastal Living Magazine's new rankings.
The list was compiled using a complicated formula involving editors' picks, the Gallup Healthways Well-Being Index, sunny days, beach quality, low crime, commute time, education of residents and other factors. The other waterfront places where life is supposedly a smiley face:
2. Naples, Fla.
3. Sausalito, Calif.
4. Lake Bluff, Ill.
5. Tiburon, Calif.
6. Laguna Beach, Calif.
7. Half Moon Bay, Calif.
8. Chatham, Mass.
9. Jupiter, Fla.
10. Lahaina, Hawaii
11. Marblehead, Mass.
12. Stinson Beach, Calif.
13. Cohasset, Mass.
14. Duxbury, Mass.
15. Solomons Island, Md.
You can read about why each town is so blissful in
Coastal Living's June issue or on its website.
Fannie Mae: Confidence in Economy and Home Values Increasing
05/07/2012 By: Esther Cho 
Americans continue to expect home prices to go up, with the projection averaging 1.3 percent over the next 12 months, the highest value recorded.
At 71 percent, a high percentage of Americans still say it is a good time to buy while the percentage who said it is a good time to sell was 15 percent, a 1 point increase from March.
“Overall, consumer views of housing market conditions have become more supportive of home purchases, and sustained healthy hiring is required to help realize these improved expectations,” said Doug Duncan, Fannie Mae chief economist.
Americans continue to expect home prices to go up, with the projection averaging 1.3 percent over the next 12 months, the highest value recorded.
At 71 percent, a high percentage of Americans still say it is a good time to buy while the percentage who said it is a good time to sell was 15 percent, a 1 point increase from March.
“Overall, consumer views of housing market conditions have become more supportive of home purchases, and sustained healthy hiring is required to help realize these improved expectations,” said Doug Duncan, Fannie Mae chief economist.
Duncan also mentioned the recent figures on employment in April, which showed a decline in job growth.
“Friday’s report of a second consecutive setback in job creation supports the view that the housing recovery will remain uneven this year,” said Duncan.
The expectation for average rental prices decreased slightly to 3.6 percent; in March, respondents expected rent to go up by 4.1 percent over the next 12 months.
If respondents were to move, 32 percent said say they would rent while 64 percent said they would buy. The percentage of those who said they would rent increased 2 points and reached the highest level since November 2011.
The percentage of Americans who believe the economy is on the right track rose to 37 percent, a 2 point increase from the previous month and the highest level in the survey’s two-year history. Still, an even greater 56 percent believe the economy is moving in the wrong direction.
Also, 23 percent of Americans reported their household income is significantly higher than it was a year ago, while 36 percent said their household expenses are significantly higher since the same time period. Both categories rose 2 percentage points compared to March.
The percentage of those who think their financial situation will decline was unchanged from the previous two months at 12 percent, the lowest value recorded in over a year.
The Fannie Mae survey polled a nationally representative sample of 1,000 respondents aged 18 and older between April 4, 2011 and April 27, 2012.
“Friday’s report of a second consecutive setback in job creation supports the view that the housing recovery will remain uneven this year,” said Duncan.
The expectation for average rental prices decreased slightly to 3.6 percent; in March, respondents expected rent to go up by 4.1 percent over the next 12 months.
If respondents were to move, 32 percent said say they would rent while 64 percent said they would buy. The percentage of those who said they would rent increased 2 points and reached the highest level since November 2011.
The percentage of Americans who believe the economy is on the right track rose to 37 percent, a 2 point increase from the previous month and the highest level in the survey’s two-year history. Still, an even greater 56 percent believe the economy is moving in the wrong direction.
Also, 23 percent of Americans reported their household income is significantly higher than it was a year ago, while 36 percent said their household expenses are significantly higher since the same time period. Both categories rose 2 percentage points compared to March.
The percentage of those who think their financial situation will decline was unchanged from the previous two months at 12 percent, the lowest value recorded in over a year.
The Fannie Mae survey polled a nationally representative sample of 1,000 respondents aged 18 and older between April 4, 2011 and April 27, 2012.
CNN Money feels this is the time to buy...
By Les Christie
Buying a home may never get any cheaper than this. Several housing experts are predicting that this year will be the last chance for bargain hunters to cash in on the best deals of the weak housing market.
With home prices down 34% nationally since 2006 and mortgage rates at historic lows, homes have never been more affordable -- but it won't stay this way for much longer.
Stuart Hoffman, chief economist for PNC Financial Services, said he expects home prices to flatten out by the third quarter and start climbing by next year.
A number of factors will help bolster the housing market, he said, including a decline in the number of foreclosures and continued job growth. In addition, homebuyers will have better access to mortgages as they get their finances in order and improve their credit scores.
"This is a strong indicator that we will start seeing home price indexes, like the S&P/Case-Shiller, start to report home price increases this summer," he said.
Prospective homebuyers who've been sitting on the fence shouldn't worry if they aren't quite ready to make the leap. Analysts are predicting that the initial price gains will be modest, at least, in most markets.
Read more at CNNMoney.
Market's Stabilizing
Prices for single-family homes climbed in half of U.S. cities in the first quarter as real estate markets stabilized.
The median sales price increased from a year earlier in 74 of 146 metropolitan areas measured, the National Association of Realtors said in a report today. In the fourth quarter, only 29 areas had gains.
The U.S. housing market is showing signs of bottoming as improving employment and record-low mortgage rates boost demand while inventories of available properties tighten. At the end of March, 2.37 million previously owned homes were available for sale, 22 percent fewer than a year earlier, the Realtors said.
“The housing market is still depressed but it had a good quarter,” Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts, said in a telephone interview today. “We’re on the mend but it’s still something that will take two or three years before we’re back to normal.”
The national median existing single-family home price was $158,100 in the first quarter, down 0.4 percent from the first three months of 2011, according to the Realtors group.
The best-performing metro area was Cape Coral, Florida, where prices increased 28.1 percent from a year earlier. Prices rose 19 percent in Grand Rapids, Michigan; 16.9 percent in Palm Bay, Florida; and 16.6 percent in Erie, Pennsylvania.
The median selling price is influenced by the mix of homes on the market and probably was boosted by a smaller share of transactions involving distressed properties. Those homes, which sell at discounts, accounted for 32 percent of first-quarter sales, down from 38 percent a year earlier.
Prices are more volatile than normal because they are affected by the prevalence of distressed sales and “sudden upswings” in buyer interest in some areas, said Lawrence Yun, the group’s chief economist.
Sales of previously owned homes rose 5.3 percent in the first quarter from a year earlier, according to the report. Purchases climbed 11.7 percent in the Midwest, 6.6 percent in the Northeast, 4.1 percent in the South, and 1.4 percent in the West.
Fannie Mae, the nation’s biggest mortgage-finance company, today reported a $2.7 billion first-quarter profit after a $6.5 billion loss a year earlier, citing smaller declines in home prices as one of the reasons for improvement. The Washington-based company said that it won’t need Treasury Department aid to balance its books for the first time since it was seized by federal regulators in 2008.
The median sales price increased from a year earlier in 74 of 146 metropolitan areas measured, the National Association of Realtors said in a report today. In the fourth quarter, only 29 areas had gains.
May 7 (Bloomberg) -- Michelle Meyer, a senior economist at Bank of America Merrill Lynch, talks about the U.S. economy and real estate market.
“The housing market is still depressed but it had a good quarter,” Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts, said in a telephone interview today. “We’re on the mend but it’s still something that will take two or three years before we’re back to normal.”
The national median existing single-family home price was $158,100 in the first quarter, down 0.4 percent from the first three months of 2011, according to the Realtors group.
The best-performing metro area was Cape Coral, Florida, where prices increased 28.1 percent from a year earlier. Prices rose 19 percent in Grand Rapids, Michigan; 16.9 percent in Palm Bay, Florida; and 16.6 percent in Erie, Pennsylvania.
Biggest Declines
Kingston, New York, had the biggest decline, with the median selling price tumbling 22 percent in the quarter. It was followed by Stamford, Connecticut, with an 18 percent decline; Mobile, Alabama, at 14.7 percent; and Atlanta at 12 percent.The median selling price is influenced by the mix of homes on the market and probably was boosted by a smaller share of transactions involving distressed properties. Those homes, which sell at discounts, accounted for 32 percent of first-quarter sales, down from 38 percent a year earlier.
Prices are more volatile than normal because they are affected by the prevalence of distressed sales and “sudden upswings” in buyer interest in some areas, said Lawrence Yun, the group’s chief economist.
‘Broad Shortages’
“We have broad shortages of lower-priced homes in much of the country, with very tight supply in Western states for homes through the middle price ranges,” Yun said in the report.“This is good news for many sellers who wish to list now, or for those waiting for prices to improve.”Sales of previously owned homes rose 5.3 percent in the first quarter from a year earlier, according to the report. Purchases climbed 11.7 percent in the Midwest, 6.6 percent in the Northeast, 4.1 percent in the South, and 1.4 percent in the West.
Fannie Mae, the nation’s biggest mortgage-finance company, today reported a $2.7 billion first-quarter profit after a $6.5 billion loss a year earlier, citing smaller declines in home prices as one of the reasons for improvement. The Washington-based company said that it won’t need Treasury Department aid to balance its books for the first time since it was seized by federal regulators in 2008.
Friday, February 24, 2012
Housing Crisis to End in 2012 as Banks Loosen Credit Standards
Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.
The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.
Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.
The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.
Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.
However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability. Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings. Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV. While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan. Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generation actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.
Credits: Krista Franks via LinkedIn
Credits: Krista Franks via LinkedIn
Saturday, February 18, 2012
Tuesday, February 14, 2012
Our forecast....I like it warm.... :)
Naples, FL 34102
Today 75° Partly Cloudy | Wed 81° Partly Sunny | Thu 81° Partly Sunny | Fri 81° 30% Chance Rain Shower | Sat 80° Partly Cloudy | Sun 81° 30% ChanceRain Shower | Mon 78° Partly Cloudy |
|---|---|---|---|---|---|---|
Tonight 63° Partly Cloudy | Wed Night 65° Partly Cloudy | Thu Night 66° Partly Cloudy | Fri Night 66° 30% Chance Rain Shower | Sat Night 68° Partly Cloudy | Sun Night 65° Partly Cloudy |
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