It’s hard to believe that in almost 5 years since late 2007 we are still dealing with the Real Estate Bubble catastrophe. The legacy of the Bush years, mortgage deregulation (derivative madness) and Greenspan’s irrational exuberant desire to inflate the economy with his bubblemania, tech, telecom then real estate. The Bush/Greenspan team always put elephants under the rug, making it appear the economy was booming, while the country was using their homes as ATM machines – Refying, Equity lines etc etc. Well the elephants are out and they are trampling the cul de sac, and it won’t be contained for another 12-15 years at this rate. So get used to shoveling…..

(Disclaimer: This is opinion. It is for informational purposes only it is not Legal advice)

FROM MSNBC.

http://economywatch.msnbc.msn.com/_news/2012/04/12/11145443-foreclosures-slow-as-pipeline-keeps-backing-up?lite

By John W. Schoen, Senior Producer

Foreclosure activity fell in the first quarter to the lowest level in more than four years, but mainly because the process of removing people from their homes has slowed. The number of homes just beginning the foreclosure process rose in March for a third straight month, a sign that the nation’s housing problems are far from over, according to RealtyTrac, which tracks the figures.

“The low foreclosure numbers in the first quarter are not an indication that the massive reservoir of distressed properties built up over the past few years has somehow miraculously evaporated,” said Brandon Moore, chief executive officer of RealtyTrac.

He said a large backlog of bank-owned properties that has accumulated over the past few years will put added pressure on the housing market when banks eventually list them for sale.
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“The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen,” he said in a news release.

Foreclosure filings were reported on 572,928 properties during the quarter, down 2 percent from the previous quarter and 16 percent from a year earlier, for the lowest total since the fourth quarter of 2007, RealtyTrac said. A default notice, scheduled auction or bank repossession was reported on one of every 230 U.S. housing units in the quarter.

But new foreclosure filings, which indicate lenders are beginning the process of repossession, rose by 7 percent in March, the third straight monthly increase. Foreclosure starts topped 100,000 for the first time since November 2011, although they were 11 percent lower than a year ago.

The decrease in foreclosure activity was caused primarily by declining activity in the so-called non-judicial states, led by Arkansas, with a 79 percent drop, and Nevada, with a 62 percent drop. Recent legislation or court cases in those states have disrupted the normal foreclosure process, according to RealtyTrac.

Foreclosure activity also slowed in other non-judicial states including Washington (down 55 percent), Arizona (down 41 percent), Texas (down 31 percent) and California (down 21 percent).

The 26 states that typically require a judicial review of a foreclosure saw the pace of filings pick up in the first quarter.

The year-over-year pickup in filings in the first quarter was highest in Indiana (up 45 percent), Connecticut (up 38 percent), Massachusetts (up 26 percent), Florida (up 26 percent), South Carolina (up 26 percent), and Pennsylvania (up 23 percent).

States with the biggest monthly increases in foreclosure starts included Nevada (up 153 percent), Utah (up 103 percent), New Jersey (up 73 percent), Maryland (up 53 percent) and North Carolina (up 47 percent).

Nationwide, the length of time it takes to complete a foreclosure continued to rise — to an average of 370 days in the first quarter from 348 days in the previous quarter. The process is picking up in some states, though. The average time to foreclose in California was 320 days, down from 352 days in the fourth quarter of last year.

The process in some states, though, is taking considerably longer. Foreclosures are taking the longest, on average, in New York (1,056 days), New Jersey (966 days), Florida (861 days), Illinois (628 days) and Maryland.

(Disclaimer: This is informational and not legal advice)

http://money.cnn.com/2012/04/05/real_estate/buy-rent-home-prices/index.htm?hpt=hp_c1

Rents keep rising as home prices stagnate
By Les Christie @CNNMoney April 5, 2012: 4:36 PM ET

“Buying a home is more affordable than renting now in almost every part of the United States,” said Jed Kolko, chief economist for Trulia.

NEW YORK (CNNMoney) — Renting used to be cheaper than buying. But in many U.S. cities that’s no longer the case, as rents continue to climb and home prices stagnate.

While asking prices for homes declined 0.7% over the past 12 months through March, rents rose 5%, according to a report released Thursday by real estate listing site Trulia.

The median rent for all types of rental homes hit $1,350 a month in March, up from a median of $1,285 a month 12 months ago, Trulia reported.

“Buying a home is more affordable than renting now in almost every part of the United States,” said Jed Kolko, chief economist for Trulia.

Several metro areas recorded double-digit percentage increases in rental rates.

In Sarasota, Fla., the average rent jumped 12.9% year-over-year, the biggest increase of any of the 100 largest metro areas Trulia surveyed. Miami and San Francisco saw the next biggest increases, with rent hikes of 12.1% and 11.1%, respectively.

The metro areas that sustained the highest rent increases were a decidedly mixed bag, but obviously shared one factor: rising demand for a limited supply of rental units.
Low-ball appraisal: Mortgage denied

The national vacancy rate for apartments fell 0.3 percentage points during the first quarter to 4.9%, its lowest point since late 2001, according to a separate report from Reis Inc., a real estate research firm. With such limited availability, it has put pressure on rentals of all types.

In cities like Miami that were hit hard by the housing bust and recorded a high number of foreclosures, all of the displaced residents have to live somewhere.

“A lot of people who were owners lost their homes in the bust in these places,” said Kolko. Many of them turned to the rental market, boosting demand and driving up rents, he said.

Other cities have put constraints on the construction of new multi-family housing, thereby limiting supply. For example, in San Francisco, where the median rent is a whopping $2,625, there are few tracts of land available to develop, raising demand for housing and pushing rents there higher.

Several Rust-Belt cities also saw large rent increases in the past year, including Indianapolis, where rents went up 9.7%, and Columbus, Ohio, where they jumped 9.3%.

These cities have seen big gains in the industrial sector, which have led to a growing number of jobs and higher rents, said Kolko. As hiring levels off, he does not expect the big rent increases to continue.
Buying a home is cheaper than renting

Meanwhile, asking prices for homes nationwide crept lower over the past 12 months, according to Trulia.

That, along with record low mortgage rates, has made buying a home more affordable than it’s ever been and a bargain compared to renting. However, many Americans will not be able to seize this historic opportunity to become homeowners, said Kolko.

Unemployed, too broke to come up with a down payment or with credit scores too battered to qualify for a mortgage, many people simply cannot qualify to buy a home right now, according to Kolko

With fewer consumers able to make the leap into homeownership, rents could continue to climb higher, he said.

The below article describes how the new settlement will be overseen in California. Unfortunately there is approximately $400 billion in upside down mortgages in California and the settlement appears to be only about $8 billion. This solves about 2% of the problem. Is 2% a drop in the bucket….. pretty much.

(Disclaimer: This is for informational purposes only, it is not legal advice)

http://www.housingpredictor.com/2012/bank-settlement.html

Attorney General Appoints Monitor in Bank Settlement
By Mike Colpitts

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In an effort to protect consumers from additional fraudulent behavior by banks, the California attorney general has appointed an protest signs independent monitor to oversee the nation’s five largest banks performance in $18 billion worth of benefits that will be split up between homeowners.

Attorney General Kamala Harris announced the appointment of University of California Irvine School of Law professor Katherine Porter to the post. The decision to appoint the independent monitor comes nearly five years after consumers complained to law enforcement authorities that they were being ripped-off by banks foreclosing on their homes.

California secured $18 billion in benefits as part of a national settlement to penalize robo-signing and other bank servicing and foreclosure misconduct. The agreement comes after the state departed from the multistate negotiations last September when relief to California was estimated at $4 billion. Harris insisted on more aid for the most distressed homeowners.

A $25 billion settlement worked out with the nation’s largest five banks, including Bank of America, Wells Fargo, CitiGroup and JP Morgan Chase in the U.S. robo-signing scandal is separate from California’s settlement. Federal regulators are auditing as many as 4.5 million foreclosures that may have been part of bank servicing company forgeries committed following the real estate bubble.

Harris will be responsible for holding banks accountable for their commitments to the state of California to work with mortgage borrowers to modify troubled mortgages, and settle with homeowners who were wrongfully foreclosed from their homes.

“Hundreds of thousands of California homeowners will benefit from the commitments of up to $18 billion extracted from mortgage lenders,” said Harris. “We must enforce full and timely compliance with these commitments, and the appointment of Professor Porter as our California monitor is central to that enforcement.”

“I will work hard to make sure banks hold up their promises to change troubling practices so that families and communities across California see the benefits of the settlement,” said Porter, who will work with other attorneys to oversee the plans implementation. “Part of repairing the damage of the mortgage crisis is restoring public confidence that our largest financial institutions will treat consumers fairly and follow the law.”

Porter is a professor at University of California, Irvine School of Law, specializing in commercial and consumer law, including mortgage foreclosures and bankruptcy. Porter has worked with other government entities, including the Federal Trade Commission and the Consumer Financial Protection Bureau on issues relating to mortgage servicing problems.

Published March 19, 2012

(Disclaimer: This is for informational purposes only, it is not legal advice)

The recent settlement with the Department of Justice and the major lenders may be a drop in the bucket of the problem, but it may be a turning point in the banks willingness to provide real support for their borrowers.

This 2nd tier regulation may also show some benefit to homeowners long term.

Foreclosures may be slowed down some….

http://www.msnbc.msn.com/id/46920384/ns/business-us_business/#.T3kac46reyY

By JESSICA SILVER-GREENBERG
updated 4/1/2012 5:58:38 PM ET

Federal regulators are poised to crack down on eight financial firms that are not part of the recent government settlement over home foreclosure practices involving sloppy, inaccurate or forged documents.

Last week, a senior Federal Reserve official recommended fines for these additional financial institutions, raising questions about how deep foreclosure problems run through the banking industry.

In addition, judges, lawyers and advocates for homeowners say that people are still losing their homes despite improper documentation and other flaws in the foreclosure process often involving these firms.

The eight firms cited by the Federal Reserve — HSBC’s United States bank division, SunTrust Bank, MetLife, U.S. Bancorp, PNC Financial Services, EverBank, OneWest and Goldman Sachs — should be fined for “unsafe and unsound practices in their loan servicing and foreclosure processing,” Suzanne G. Killian, a senior associate director of the Federal Reserve’s Division of Consumer and Community Affairs, told lawmakers last month in a House Oversight Committee hearing in Brooklyn.

The recommendation is the culmination of an investigation begun nearly two years ago over accusations that bank representatives had been churning through hundreds of documents a day in foreclosure proceedings without reviewing them for accuracy, a practice known as robo-signing.

Some see the Fed’s recommendation as an attempt to push these firms to agree to the terms of the broader mortgage settlement involving the state attorneys general and federal officials. During those settlement talks, federal regulators contacted other institutions in hopes that they would also agree to the terms, according to people briefed on the negotiations.

Much of the foreclosure attention has focused on the five largest mortgage servicers — Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and Ally Financial — which agreed to the $25 billion settlement this year without admitting wrongdoing.

Despite the pledges of the giant servicers to amend their practices, there are signs that foreclosure cases with other companies remain problematic. An examination of dozens of court cases by The New York Times found questionable documents involving some of the eight institutions cited by the Fed.

Arthur M. Schack, a New York State Supreme Court judge in Brooklyn, has cracked down on fraudulent documentation and said he was concerned that foreclosures moving through the courts continued to be flawed. Even after mortgage servicers have been excoriated by a judge in one state, they still use similar documents in other cases in other states, according to the examination.

For example, last December, Judge Schack tossed out a foreclosure lawsuit filed by U.S. Bancorp after determining that a bank employee, Kim Stewart, had identified herself in two conflicting ways in documents throughout the lawsuit.

In 2008, Ms. Stewart signed an assignment of mortgage — which gives the mortgage servicer the right to foreclose — to U.S. Bancorp, identifying herself as assistant secretary of Mortgage Electronic Registration Systems. Yet in 2009, Ms. Stewart signed a separate document in the lawsuit as vice president of U.S. Bancorp, court records show.

The judge, in a derisive tone, suggested that perhaps the bank and its law firm “do not want the court to confront the conflicted Ms. Stewart,” according to a court transcript. U.S. Bancorp strongly disagreed with the judge’s ruling and plans to appeal the decision, said Teri Charest, a spokeswoman for the bank. She added that Ms. Stewart was an officer of the bank and had “signed all documents appropriately.”

George Babcock, a lawyer in Pawtucket, R.I., who represents homeowners, estimated that roughly 300 of his clients were being threatened with foreclosures that include documents signed by Ms. Stewart.

A similar problem has cropped up on the West Coast, where an employee of a mortgage servicing firm whose signature appeared in a lawsuit filed by one of the eight firms had already been flagged as problematic.

Phillip Bennett, a retired schoolteacher in California, was evicted from the home he shared with his wife in Rancho Cucamonga last month.

Mr. Bennett said he thought he might be able to save his home, despite falling behind on his loan payments, because the mortgage assignment was signed by a mortgage company employee, Marti Noriega, who was previously involved in a foreclosure that had been halted.

In October 2010, Garr M. King, a senior judge with the United States District Court in Oregon, blocked a foreclosure after spotting a suspicious document from Ms. Noriega. In that lawsuit, Ms. Noriega, acting as vice president of Mortgage Electronic Registration Systems, signed an assignment of mortgage.

The problem, court records show, was with the date. Ms. Noriega’s signature transferring the mortgage from Mortgage Lenders Network USA to LaSalle National Bank (now part of Bank of America) was dated 15 months after Mortgage Lenders Network halted its operations.

Some foreclosures include documents from people who have testified to being robo-signers in other courts.

In July 2010, Erica Johnson-Seck, whose signatures appeared in foreclosure cases filed by OneWest, acknowledged, in a deposition in state court in Palm Beach County in Florida, having signed 750 mortgage documents a week, usually with only a cursory review.

Yet Carla Duncan, a social worker, is fighting a lawsuit over the foreclosure on her three-bedroom home in Cleveland Heights, Ohio. The lawsuit, which was filed in March 2010 in Ohio state court, includes a document signed by Ms. Johnson-Seck.
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“It’s so totally unfair,” said Ms. Duncan.

A spokesman for OneWest declined to comment on Ms. Duncan’s lawsuit.

Last November, federal banking regulators forced the nation’s largest servicers, including the eight cited by the Fed, to comb through foreclosure records and to rectify any problems.

As part of that process, consumers who believe that they have suffered “financial injury” have until July 31 to request an independent review of their foreclosure and potentially receive compensation.

But Matt Englett, a lawyer in Orlando, Fla., who defends struggling homeowners, said that many people who had already lost their homes were focusing on simply staying afloat and did not realize they can ask for an independent review.

So far, more than 128,000 people have requested a review, according to the Office of the Comptroller of the Currency.

“These are the forgotten homeowners,” Mr. Englett said.

The story, “Federal Reserve Seeks to Fine Firms Over Foreclosures,” originally appeared in The New York Times.

(Disclaimer: This is not legal advice for informational purposes only)

The article below shows the split. A DROP IN THE BUCKET! of the real problem.

But its better to be in line fighting to get some than not. So get your requests in and maybe you might get some of the crumbs being offered here.

Breaking Down the Mortgage Settlement: How Far Does $26 Billion Go?

by Cora Currier
ProPublica, March 19, 2012, 11:52 a.m.

The big bank settlement over mortgage servicing abuses was finalized last week, detailing the agreement’s actual terms.

Bank of America, Citigroup, Ally Financial (formerly GMAC) and JPMorgan Chase are on the hook for billions, which will be divvied up among penalties paid to the federal and state governments, direct payments to homeowners wrongfully foreclosed upon, and credits to the banks for providing “consumer relief.” (Read the government’s complaint and the banks’ consent judgment.)
The State of the Government’s Loan Modification Program

See the performance of all the mortgage servicers.
ProPublica’s Foreclosure Facebook Page

Ask questions, share your experiences, and connect with fellow homeowners on ProPublica’s new foreclosure Facebook page.
Resources

Our FAQ on the Foreclosure Reviews

Answers to homeowners’ questions about the Independent Foreclosure Review.

Making Home Affordable.gov

The administration’s website for the foreclosure prevention program. Provides an FAQ, homeowner examples, and other tools to see whether you might qualify for the program.

Foreclosure Avoidance Counselors

A list of HUD-approved housing counseling agencies nationwide.

FTC Tips for Mortgage Servicing Consumers

Tips for homeowners from the Federal Trade Commission.

Program Guidelines for Mortgage Servicers

These rules lay out how mortgage servicers are supposed to conduct the program.

Calculated Risk

A finance and economics blog that provides news and metrics on the state of the housing market.
Did Your Bank Wrongfully Seek to Foreclose on You?

We’d like to hear from current and former homeowners who wrongfully faced foreclosure in the last couple of years.
Do You Work in Mortgage Servicing or as a Foreclosure File Reviewer?

If you’ve worked for a servicer or on the Independent Foreclosure Review, contact our lead reporter.

Here’s a breakdown of key settlement numbers, showing where the money is going and how much help it will really provide for homeowners.

$1.4 billion: total direct payments from the settlement to homeowners who were wrongfully foreclosed upon between 2008 and 2011.

750,000: foreclosed homeowners expected to qualify.

$2,000: estimated average payout.

3.8 million: total foreclosures between 2008 and 2011.

25 percent: expected increase in foreclosures in 2012. That would mean about 1 million foreclosures, up from 804,000 last year, partly as a result of banks clearing a backlog held up by the settlement proceedings.

$3 billion: total for which banks can be credited for offering refinancing to underwater homeowners who owe more than their homes are worth. (There are questions about exactly how the credits will work and why the banks are being given incentives rather than punishment.)

$17 billion: total from the settlement that banks can be credited for offering loan modification ($10 billion) and other forms of “consumer relief” ($7 billion) for underwater borrowers — counted separately from the refinancing incentives.

11.1 million: underwater mortgages in the U.S.

$717 billion: negative equity from those underwater mortgages.

3 million: estimated underwater mortgages owned or guaranteed by government-controlled Fannie Mae or Freddie Mac, which are not covered by the settlement.

5 percent: portion of the country’s underwater mortgages that might qualify for modification under the settlement, according to a Brookings Institute estimate. (Officials have put the number closer to 10 percent.)

$10.9 billion: Bank of America’s total outlay in the settlement, more than any other bank.

$2 billion: Bank of America’s fourth-quarter 2011 profit.

$1 billion: settlement of allegations that Bank of America passed bad loans on to the Federal Housing Administration to insure. A government audit, made public with the settlement, showed similar patterns at other banks.

$6 billion: amount that the FHA paid in insurance claims on defaulted mortgages handled by the five banks between 2008 and 2010.

60-200: documents signed daily by different individual loan processors working for Bank of America, according to the government audit.

12-18 inches: height of the stacks of documents one Bank of America employee signed “without a review.”

$1 million: fine to be levied on the banks for each violation of the terms of the overall settlement, escalating to $5 million for repeat violations. (Exactly how fines will be tallied is still unclear.)

(Diclaimer: This is not legal advice it is for informational purposes only)

There is still a lot of volatility out there. As long as 1. mortgage rates stay as low as they are and people are 2. Earning more and working off their debt and improving their FICO scores and 3. banks start lending more then prices will improve. But if any one of these legs in this three legged stool wobble then home values will further drop. Its a precarious time for values and it is also very regional. Areas with more stable and growing industries will see sooner growth in values.

Over leveraged “irrational exuberant” areas will take much longer to recover.

The below article describes much of the current volatility in the market.

http://economywatch.msnbc.msn.com/_news/2012/03/21/10792662-home-sales-dipped-last-month-but-prices-held-firm

By msnbc.com staff and wires

The pace of home sales dipped a bit last month but the housing market is heading into spring in better shape that it was last year.

Sales of existing-home sales slipped 0.9 percent in February to a seasonally adjusted annual rate of 4.6 million, according to the National Association of Realtors. That pace is 8.8 percent higher than a year ago.

Home prices held steady, according to the NAR data. The median price of all housing types – including single-family homes, townhomes, condominiums and co-ops – was $156,600 in February, up 0.3 percent from a year ago. But prices have fallen roughly 10 percent since last June.

Sales last month were mixed, declining sharply in the Northeast and West. Sales were up in the Midwest and South.

Though the housing market is heading into the spring selling season somewhat stronger than last year, some economists caution that the damage from the housing bust is deep and the industry is years away from fully recovering. The February sales figures from the real estate trade group fell short of expectations for economists, who were looking for sales to rise to a 4.62 million-unit annual rate, according to Reuters.

“It may modestly dent the narrative we’ve been seeing over the past couple of weeks of bettering U.S. economic data,” said John Doyle, currency strategist at Tempus Consulting in Washington.

Fewer first-time buyers, who are critical to a housing recovery, are in the market for a home. They made up roughly one-third of sales last year. In healthy markets, the percentage is at least 40 percent.

Many can’t qualify for loans or meet higher down-payment requirements. Even those with excellent credit and stable jobs are holding off because they fear that home prices will keep falling.

“We’re not seeing any pricing power, which suggests it’s still a weak market,” said Gary Thayer, chief macro strategist at Wells Fargo Advisers in St. Louis. “But prices are not dropping as sharply as they were several years ago. We are seeing some signs of stability in pricing.”

Some deals have been scuttled before the closing after banks declined mortgage applications, home inspectors found problems, appraisals showed a home was worth less than the bid, or a buyer lost a job. (Sales are recorded when buyers close on homes.)

Though sales are stronger than a year ago, Even after the gains, the pace is far below the 6 million that economists equate with healthy markets. And the makeup of those sales still signals a troubled market.

Homes at risk of foreclosure made up 34 percent of sales, down only slightly from 35 percent in January. In more stable markets, foreclosures make up less than 10 percent of sales. The high foreclosures rate has pushed the price of an existing home lower than a new one, which now sells for about 30 percent more that one that’s been occupied before. That’s twice the normal markup.

About 33 percent of pending contracts to buy a house were canceled, the NAR said. Investors bought 23 percent of homes last month, with first-time buyers accounting for about third of the transactions.

Data on Tuesday showed permits to build homes rose to a near 3-1/2 year high in February. However, the housing market continues to be choked by a glut of unsold properties, which are weighing down prices.

The inventory of unsold homes on the market increased 4.3 percent to 2.43 million units last month. At February’s sales pace, that represented 6.4 months’ supply, up from 6.0 months in January. A supply of six months generally is considered ideal.

Distressed properties, foreclosures and short sales, which typically occur at deep discounts, made up a third of overall sales last month.

(Disclaimer: This article is for informational purposes only it is not legal advice)

The below article details allegations that B of A is intentionally making efforts to wrongfully deny files that would qualify for HAMP underwriting. The litigation and investigations continue into B of A and the number of issues in the loan divisions.

http://www.newsmax.com/StreetTalk/Whistleblower-Bank-america-Defraud/2012/03/08/id/431871

The complaint unsealed Wednesday was filed by whistleblower Gregory Mackler, a Colorado resident who said he worked alongside Bank of America executives while an employee at Urban Lending Solutions, a company to which Bank of America contracted some of its HAMP work.

While working at Urban Lending, Mackler said he saw BofA and its loan servicing subsidiary, BAC Homes Loans Servicing LP, implement “business practices designed to intentionally prevent scores of eligible homeowners from becoming eligible or staying eligible for permanent HAMP modification.”

The bank and its agents routinely pretended to have lost homeowners’ documents, failed to credit payments during trial modifications and intentionally misled homeowners about their eligibility for the program, the complaint alleged.

BoA let through just enough HAMP modifications to avert suspicion and allay congressional critics, while not enough to incur any substantial losses to its own bottom line, according to the complaint.

“In other words, BoA has had it both ways. BoA has continued to maximize the value of its mortgage portfolio with anti-HAMP modification practices and managed to make money by committing fraud on homeowner,” the lawsuit said.

A lawyer for Mackler could neither confirm nor deny that the complaint was tied to the settlement. A spokesman for the U.S. attorney’s office and a representative for Bank of America declined to comment.

(Disclaimer: This article is for informational purposes it is not legal advice)

The below article describes a new principal reduction program being offered at BofA to possibly 200,000 of their notes.

- Possibly more than $100,000 of reduction.
- Must be BofA or Privately held notes, not Fannie, Freddie or FHA.
- Must be more than 60 days late as of Jan 31st. No new lates – strategic defaults.
- Will happen through the Loan Modification Process.

GA Law has been in the area of Loan Modifications for many years and it has been the wild west as far as lender guidelines and changes. Literally every month there is a new program or a new system in place at BofA, Chase, Wells, Citibank, Aurora, Ocwen etc.

This has been in the pipeline for quite awhile. It will be a flash in the pan, but those who do get deals will get a great deal. It’s better to try than to not try for it. BofA probably has 2-3 million upside down notes. This deal will go very quickly. If you have a BofA note you need to be in the pipeline immediately.

LOS ANGELES TIMES ARTICLE

By Jim Puzzanghera

March 9, 2012, 9:08 a.m.
Reporting from Washington—

Bank of America said Friday it would reduce by about $100,000 the amount owed by as many as 200,000 underwater homeowners as part of the recently announced government foreclosure settlement with top mortgage servicers.

BofA made the commitment as part of a $1-billion side deal to the $25-billion foreclosure settlement, said bank spokesman Richard Simon.

The principal reductions could eliminate the entire underwater portion of some mortgages that the bank services, with the average reduction expected to be more than $100,000, he said.

By cutting the amount owed on the mortgages, Bank of America could reduce the $3.25 billion in penalties it faces from the foreclosure settlement by $850 million. The details of the principal-reduction agreement were first reported by the Wall Street Journal.

Underwater homeowners are eligible if they have a loan serviced by Bank of America and were at least 60 days delinquent on their mortgages as of Jan. 31.

Only loans owned by Bank of America or private investors are eligible, and those include mortgages originated by Countrywide Financial Corp. The Calabasas, Calif.-based subprime lender was acquired by Bank of America in 2008.

Loans owned or backed by Fannie Mae, Freddie Mac, the Federal Housing Administration or the Veterans Administration are not eligible, Simon said.

Bank of America estimated about 200,000 homeowners will be eligible, though it does not anticipate all will take part in the program, Simon said.

The bank will begin reaching out to homeowners next month. It has three years to complete the principal reductions, but the settlement offers incentives for them to be completed within a year of the settlement’s completion, so Simon anticipated the process would move “fairly quickly.”

(Disclaimer: This article is for informational purposes only, it is not legal advice)

When should I short sale and when should I try to get a modification is a good question and there isn’t always a right answer. This is a moving target of constantly changing lender and federal guidelines, economic volatility, real estate value changes.

If you want your house you should fight to keep it. Many factors go into wanting to keep a house. It was in the family for more than a generation, it is in a great school district, you love your neighborhood etc.

If your home is more than 25% underwater. You owe banks more than 25% of the actual value of your house from a financial position its likely a loser for you.

If you haven’t gone late yet and you have good credit – don’t. You need to first explore all of your non-late options. Those may include HARP (Home affordability refinance program). You may also explore short sale without lates – minimal credit damage.

If you are already late and you want to buy time, you should put your modification package in with a competent law firm (GA LAW GROUP comes to mind) for submission to your lender. In any case it is important to put the package in as this tends to slow the foreclosure process down. You never know you might get a killer deal including principal reduction (however extremely rare).

If you want to resolve matters quickly then you need to short sale, modifications are a very slow paper intensive process usually taking from 6-10 months minimum. Short Sales are taking from 2-4 months currently. There are no two scenarios that are the same so please call for a free consultation (818) 884 4454

(Disclaimer: The following information is for informational purposes only it is not legal advice)

So we are at 2002 pricing now down from the 2006 peak according to the CNN Money article below. In Southern California we are down about 40% from the highs.

I think we are going to see another 4-8% decrease this year into 2013 before it finally bottoms out.

There are some areas now that seem to have stopped falling. These are in desirable school districts and stable low turnover cities. The outlying areas and less desirable areas of Southern California are still suffering from decline. There’s much discussion of commercial properties falling in value as well. Leasing is very competitive for surviving weak businesses. Leasing value competition is ongoing. Companies downsizing their square footage leases per month, or closing their doors completely, is causing building owners to be more competitive.

SFR Investors are making up a huge portion of the buying these days almost 40%. It makes sense to buy if the properties can be rented at a profit. But this exuberant investor competition may be a little too enthusiastic, unless they are getting exceptionally low interest long term loans.

Buy and hold is smart if it is at or near the bottom of the market and there is sufficient rental demand to fill the numerous rental houses coming on the market in most areas.

http://money.cnn.com/2012/02/28/real_estate/home_prices/index.htm?hpt=hp_t3

NEW YORK (CNNMoney) — National home prices fell 4% in the fourth quarter of 2011, putting them back at levels last seen in mid-2002.

That’s the fifth consecutive annual loss and the biggest decline since 2008, when markets were in free fall and prices plummeted more than 18%.

Prices have been falling since they topped out in 2006, and are down 33.8% from their peak, according to the S&P/Case-Shiller national home price index.

“The housing market ended 2011 on a very disappointing note,” said David Blitzer, spokesman for S&P. “While we thought we saw some signs of stabilization in the middle of 2011, it appears that neither the economy nor consumer confidence was strong enough to move the market in a positive direction as the year ended.”

After prices fell sharply in 2007 and 2008, declines over the past three years have been more modest. Many analysts thought markets were bottoming out and would soon stabilize, and even pick up. The last quarter of 2011, when national index prices fell a steep 3.8% from the third quarter, may have dashed those hopes.

“While we thought we saw some signs of stabilization in the middle of 2011, it appears that neither the economy nor consumer confidence was strong enough to move the market in a positive direction as the year ended,” said Blitzer.

The S&P/Case-Shiller 20- and 10-city indexes recorded similar sharp declines during the quarter. Among individual cities, Atlanta recorded a 12.8% year-over-year fall, the worst of any city.

Other big losers were Las Vegas, down 8.8%, Chicago which fell 6.5% and Seattle, which declined 5.6%. Detroit, where prices crept up 0.5% for the year, was the only city in the 20-city index to register a gain.
Multi-million dollar foreclosures

In the past five months prices have declined at an annualized rate of more than 6%, according to Dean Baker, director with the Center for Economic and Policy Research, a trend he said is especially troubling. He cites some reasons for hope, however.

“Case-Shiller is a lagging indicator and most of the contracts reflected in this report were signed in August and September,” he said. “The latest economic data shows a much brighter picture.”

Industrial production has been up and unemployment has dropped.

“The economy is stronger now than in the first half of 2011 and that will filter down to home prices,” said Baker.