Monday, December 29, 2008
Mortgage Modifications
Thursday, December 18, 2008
Mortgage Rates
Friday, December 12, 2008
Foreclosure rates are down
Foreclosure filings dropped 7% from October to November, according a report released Thursday. But don't break out the bubbly. The tide of foreclosures may be slow now, but the flood isn't over yet. November foreclosure filings fell to 259,085, or one for every 488 households in the nation, according to the latest report from RealtyTrac, the online marketer of foreclosure properties. That was down from October, but up 28% from November of 2007. A total of 78,179 families lost their homes during the month, down 8% from October when 84,868 homes were repossessed by lenders. A total of 1,014,618 homes have been lost to foreclosure since the housing crisis hit back in August 2007. November's decline in foreclosure filings is deceiving, according to Rick Sharga, RealtyTrac's vice president of marketing, because much of it is attributable to temporary foreclosure prevention efforts. The reduction is because Fannie Mae and Freddie Mac both announced moratoriums on foreclosures, while major lenders also put the brakes on foreclosure proceedings. The economic climate is rapidly deteriorating and job losses are soaring - factors that are sure to exacerbate the housing crisis. And various forward-looking indicators show more trouble ahead. For instance, the number of homeowners who fell behind on their mortgages hit a record 6.99% in the third quarter, up from 5.59% a year ago, according to the Mortgage Bankers Association. Last week, Credit Suisse issued a report forecasting 8.1 million foreclosures by the end of 2012, accounting for 16% of all U.S. mortgages. Meanwhile, evidence is mounting that current foreclosure-prevention efforts are falling well short of the mark. A Dec. 8 report from the Office of Comptroller of the Currency stated that more than half of the borrowers who had their mortgages modified in the first half of 2008 are already delinquent again. Many of these delinquencies will turn into foreclosures in the coming months. To be viable, most modifications will require lenders to make a significant principal reduction. And for the most part, that's not happening. The former boom states mostly in the Sun Belt, as well as Midwestern industrial states hit hard by job losses, continue to bear the brunt of the foreclosure crisis. Nevada had the highest rate of foreclosures. One of every 76 homes there received some kind of foreclosure filing - notice of default, notice of foreclosure sale, bank repossession, etc. - during November. Florida was second with one filing for every 173 homes and Arizona had one for every 198. California had the highest total number of filings with 60,491, and the fourth highest rate; one for every 218 households. Michigan was the hardest-hit state outside of the Sun Belt, with one filing for every 309 households. Among cities, Cape Coral-Ft. Myers, Fla., posted the highest rate of foreclosure filings with one for every 59 households. Las Vegas had the second highest rate with one for every 61 homes.
Thursday, December 4, 2008
Feds to Lower Interest Rate to 4.5%
Experts see both pros and cons
Experts, however, had mixed views on how much a new Treasury initiative would help homeowners and the economy. Some felt lower rates would help stabilize the housing market by bringing in new buyers and would give those who refinance more money to spend. This program is clearly designed to bring buyers into the marketplace and soak the inventory of unsold homes. But others questioned whether rates would remain low and, even if they did, only a narrow slice of credit-worthy borrowers would benefit. Rates are already inching up, hitting 5.75% on Wednesday. Several government attempts to lower mortgage rates this year have failed to have a lasting effect. Also, the proposal would do little to help troubled borrowers who have fallen behind on their payments, have no equity in their homes or have lost their jobs. With credit standards still high, these homeowners would not be able to refinance and take advantage of the lower rates.Finally, super-low rates could keep private investors out of the mortgage-backed securities market, forcing the government to remain the primary buyer of such investments. Rates have not fallen below 5.37% in more than 45 years.
Monday, December 1, 2008
Mortageg Market News
In the first, called repayment plans, lenders grant delinquent borrowers extra time to make up missed bill. Borrowers may be allowed to pay more each month for a set number of months, for example, or payments can be added to the end of the loan's term. Of the 225,000 workouts arranged in October, 122,000 were of this type.
The second kind of workout is called a mortgage modification because the actual terms of the contract have to be rewritten. Changes can include freezing or lowering interest rates, extending the life of the loan - say from 30 years to 40 years - or even forgiving some of the balance owed.
Critics say this is a much more viable solution to payment problems because it can lower payments enough to make them affordable. The number of modifications accomplished over the past three months through October increased 24% over the previous three months while repayment plans were up only 9.8%. The U.S. economy is still troubled and that means that changing the terms of a loan is an increasingly appropriate way to keep more homeowners in their homes. Hope Now members are likely to continue to consider them as long as the broader economy continues to struggle. One sign that these efforts may be starting to pay off came in the data for the number of people who lost their homes during the month. That totaled a bit more than 77,000, an approximately 10% improvement over September when nearly 86,000 people had their homes repossessed. Many lenders have expanded their mortgage modification efforts over the past few months. In August, the Federal Deposit Insurance Corp. announced it would modify many of the loans it is administrated since its takeover of IndyMac Bank. The FDIC said it would lower payments to no more than 38% of gross income for at-risk borrowers by lowering mortgage rates, extending terms or deferring some of the principal. That was followed by similar announcements of added help for, among others, Countrywide-Bank of America , Chase Mortgage and Citibank borrowers, as well as a new mortgage rescue plan for borrowers of Fannie Mae and Freddie Mac backed loans.
Monday, November 24, 2008
Suspended Foreclosures
Monday, November 17, 2008
Housing Fix
Tuesday, November 11, 2008
Homeowners Bailout
Monday, November 10, 2008
Job Loss vs Foreclosure
In addition to defaults due to bad mortgages these days banks are seeing more foreclosure filings due to job losses. For years, bad loans and their aftershocks have been sending homeowners into foreclosure. Now it's lost jobs that are putting troubled borrowers over the edge. As the economy tanks, unemployment is the major factor driving a much larger proportion of foreclosures now than in the earlier stages of the mortgage meltdown. In June, 45.5% of all delinquencies reported by Freddie Mac were due to unemployment or the loss of income, according to the company. That's an increase from 36.3% in 2006.And that's a situation that more and more people are finding themselves in. Nearly one million Americans have lost their jobs in 2008. 159,000 private sector jobs were lost in September. The rise in job losses will increase and extend the delinquency trend. Of course the housing crisis is driving unemployment, which in turn has exacerbated the housing crisis - particularly in bubble states like
As our economy continues to tank we are going to see more and more foreclosure fillings. I can guarantee that none of those people would like to loose their homes, but if you have a job that doesn’t pay enough you have no other choice. People have countless bills and the money that they make is not even enough to cover those much less to cover their mortgage, the only option they have is to stop paying for their mortgage. I heard rumors about the companies that negotiate with lenders to modify the existing mortgages to new terms, I could bet that every single homeowner facing financial hardship would be more than willing to accept the modified deal where it would become affordable for hima to have a mortgage in today’s economy. Let’s hope that we see more of these deals for the people that really need it.
Thursday, November 6, 2008
Housing Prices
So if the home prices keep plumetting in the bubble markets that means we are ending upside down on our mortgages. Ability and willingness to pay is going to lack which will as a result have more homes on the market. How long is it going to take for the economy to recover and stabilize housing prices, we can't tell. Our focus should remain in the areas that were not affected by housing bubble and consequently are not suffering decline in home values. Banks would be more willing to loan money in such areas and our life could be easier.
Monday, November 3, 2008
Lending Market Update
How is all this going to play out affects, every one of us. The loss of credit availability will definitely affect our plans for success as well as our ability to reach our financial goals. Instead of kicking back and “enjoying the ride” we should get up and grab every opportunity while we still have it.
Friday, October 31, 2008
Bailout Plan
Monday, October 27, 2008
What to do with Upside Down Real Estate Investments?
We are also looking for input from our readers and investors. Any ideas?
Please feel free to post them. Thanks
The Housing Market
The solution for existing housing market troubles is nowhere in the sight. It seems to be getting worse as the time goes on. We see daily that the government is trying to solve the crisis that we are in.
The feds are considering guaranteeing payments on some troubled mortgages. The move would aim to reduce foreclosures by pushing investors and lenders to agree to restructure loans.While such an outcome would no doubt keep some residents in their homes, it's worth noting that the government has yet to put forth any proposal that approaches what it has done in the financial sector. Government support for homeowners has been limited to a few modest foreclosure-reduction and mortgage-refinancing plans. But with tens of thousands of jobs being lost every month, the decline of values in the housing market - the biggest source of Americans' personal wealth - is weighing even more heavily on the economy. House prices have fallen 17% over the past year. Foreclosure filings rose 71% from a year ago in the third quarter. The government's failure to act pre-emptively and decisively on the housing crunch has only added to the problem. The comments Thursday by FDIC chief Bair suggest that the government's first priority is to speed the restructuring of troubled loans. But there are numerous hurdles to loan workouts, not the least of which is that some borrowers may simply have bought houses they couldn't afford no matter the terms of their loan.
Still, given the scale of the crisis, a piecemeal approach to restructuring mortgages may not be enough. Millions of homeowners could end up in trouble in a deep recession, because they bought houses during a decade when prices essentially doubled even as incomes were flat. Now, prices are moving back into their historic relationship with rents, which will leave many borrowers owing more than their houses are worth. It's tough to devise a housing rescue plan in large part because there's no consensus on how the burden of falling house prices should be shared. Should lenders and investors have to take substantial losses, as envisioned in, for instance, the FHA Secure refinancing plan that was enacted earlier this year? Or should the government consider an approach that would guarantee mortgage payments across the board, and then leave taxpayers on the hook for losses taken in any mortgage restructurings?
Which way all this is going to go the time will show.