Tag: Subprime Mortgages

Will It Happen Again?

Just a little FYI for my readers…….

Remember back to 2007…..that was the year that the economy dropped like a rock…..and the housing market lead they way…..and we have been clawing back ever since……lots of lost money and lots of anger by the people of this country.

The president and the Congress worked hard (sorry that is the wrong word but for the sake of sanity I will let it go) to make sure that this type of crash never happens again…..do you believe that? (then I have a bridge I would like to talk about)…..

Here are some other troubling anecdotal signals on the housing market:

1. A major financial website recently ran a guide to the best cities to “flip” houses in. (I don’t want to encourage the behavior.) Real estate speculation via house “flipping” was another early sign of trouble ahead.

2. A few days later, news arrived that home prices in the Bronx had shot up by an astonishing 30% in the first quarter. Crazy advances in home values were, a decade ago, also a signal of trouble ahead.

3. Ads, then as now, were running on TV for “quick mortgages.”

All of these signals raise a serious question: Are we getting closer to another housing meltdown that will once again damage your investment portfolio?

Source: The seeds of the next housing crisis have been planted – MarketWatch – Linkis.com

Here we go again sports fans……

Is This NOT Important?

I realize that Wisconsin situation and the horrible quake and tsunami are breaking stories and the world needs to hear them….but on the same hand there are things happening in news that are just as important….if not more so…..in a couple of months the two mentioned above will be replaced by other issues and most likely other disasters…..

There are things that the media will cull out of  the story board….why?  Most media outlets are owned and operated by corporate interests and some stories are not at all flattering and in as such will be either not reported or glazed over quickly and then move on…….Newser has reported on such a story……

A trove of leaked documents apparently reveals that Bank of America may have been involved in a scheme to bilk homeowners—a claim the bank rigorously denies. Hacker group Anonymous, which leaked the documents, says that more damning information is on the way, reports Business Insider. The emails, which allegedly come from an ex-employee of BoA subsidiary Balboa Insurance, apparently show the bank, insurance providers, and mortgage brokers all knew of a scheme to cancel people’s insurance agreements, forcing homeowners to buy much more expensive mortgage insurance far above normal requirements. Often, this would also lead to home foreclosures. Anonymous put BoA in its crosshairs last December after the bank cut off contributor payments to WikiLeaks. The hacker group has created bankofamericasucks.com,and promises to post more damning leaks. Bank of America, however, called the leaked materials non-foreclosure related clerical and administrative documents, telling Reuters: “We are confident that his extravagant assertions are untrue.”

And yet, this is somehow NOT important enough to be covered in its entirety…..WHY?

The best answer is……the media, the government and the country are ruled by special interests and the people are there only to service them….for the people NOTHING!

Mortgage Plot Thickens!

If you have been listening to the news then you are aware that there is some shenanigans going on with people’s mortgages….and the game is all about the foreclosures….not the rescue of the homeowners home…..if you have a mortgage it might be a good idea to keep an eye on what is happening behind your back….

I posted these two articles on Twitter…if you dislike Twitter or just do not have it I have posted them here also….it is a bunch of reading….but if I were you and had a mortgage then I would be interested on the games that these dicks are playing with my home…

Own a home? Read this! http://bit.ly/aEGmFj

Or read this! http://huff.to/ccWxq4

There is one more mortgage thing….http://bit.ly/deFshT

Do not ignore the stories or roll your eyes….your mortgage could be next!

Foreclosure Help, Is It Coming?

Are you having a problem paying your mortgage payment?  The government is here to help.  But just how will they help the average home owner that is having problems with his mortgage?

In a vote that demonstrates the veto power exercised by Wall Street on US government policy, the Senate on Thursday rejected a measure that would have allowed bankruptcy judges to modify the terms of mortgages to help distressed homeowners avoid foreclosure. The legislation would have enabled bankruptcy courts to lower the outstanding principal as well as interest rates on some home loans.

The provision, put forward as an amendment to a broader housing bill backed by the Obama administration, was defeated in a 45 to 51 vote, with 12 Democrats joining all of the Republican senators in voting “no.” According to Democratic leaders in the Senate, the provision would have enabled 1.7 million homeowners to remain in their homes. This is only a small fraction of the estimated 8 million Americans who will be forced out of their homes by the banks over the next several years.

The opposition of the banks secured “no” votes from Democrats Max Baucus and Jon Tester of Montana, Michael Bennett of Colorado, Robert Byrd of West Virginia, Thomas Carper of Delaware, Byron Dorgan of North Dakota, Tim Johnson of South Dakota, Mary Landrieu of Louisiana, Blanche Lincoln of Arizona, Ben Nelson of Nebraska, Mark Pryor of Arkansas and Arlen Specter of Pennsylvania.

Obama had declared his support for what is known in Washington circles as the “cramdown” provision when he announced his “Homeowner Affordability and Stability Plan” in February. That plan, presented as a boon to homeowners hit by declining home values, the loss of their jobs, and adjustable mortgage rates that had shot up, was, in fact, tailored to serve the interests of the banks, mortgage servicers and big investors.The banks remained opposed and shifted their efforts to kill the measure to the Senate. At that point, the Obama administration caved in and tacitly dropped its support for the provision.

Stripped of the mortgage cramdown “stick,” all that remains in Obama’s “Homeowner Affordability and Stability Plan,” which the Senate is expected to pass next week, are a series of “carrots” for the banks.

One provision inserted into the bill at the bidding of the banks will reduce a proposed premium owed by the banks to the Federal Deposit Insurance Corporation, in return for hundreds of billions of dollars in FDIC guarantees on the banks’ bond issuances, by more than 50 percent. This will save the banks an estimated $7.7 billion.

A second provision will make permanent the temporary increase in bank deposits guaranteed by the FDIC to $250,000 from $100,000.

The bill also includes a safe harbor provision for mortgage servicers—firms that manage loans for investors and lenders—from lawsuits related to loan modifications. This provision, in fact, will provide legal protection for banks that have engaged in lending practices that skirt or violate the law.

I was afraid that the bill in its original form would have a problem in the Senate.  Appears that the banks still have their juice in Washington.  The homeowner in trouble will remain in trouble and only those with prefect credit will be the only ones receiving help.

Things Are Not As Bad As They Seem

Are things at Freddie Mac that bad?

David Kellermann was recently promoted to the chief finanacial officer of Freddie Mac.  Mr. Kellermann, 41, began working nonstop, sometimes returning home only to change clothes, colleagues say. He was losing weight and telling friends that it seemed impossible to appease everyone — regulators, lawmakers, investors and other executives — given their competing demands. Someone was always angry with him, he told one friend. And no matter how many hours everyone worked, it seemed as if the economy and homeowners were still slipping farther into the abyss.

Early on Wednesday, Mr. Kellermann went to the basement of his brick home and hanged himself, according to people familiar with the situation who were not authorized to speak. His body was removed five hours later, through a throng of neighbors, television crews and others.

The roots and causes of suicide are often unclear. It is not known if Mr. Kellermann succumbed to the pressures of his job. But in the aftermath of his death, it is plain that at Freddie Mac, as at many of the companies in the center of this economic storm, there are forces so strong they can overwhelm almost anyone.

I have the feeling that when this crisis is over, there will most likely be even more such stories.

Is The Government Here To Help?

Good damn question!  So far they do not seem to be helping anyone that is truly in harm’s way other than Wall Street.  The new plan to save people from foreclosure is not really all that much help either……the people that need the help the most are the ones that will be screwed in the long run……not much change there, huh?

The Obama administration’s housing plan is intended to help 9 million struggling homeowners avoid foreclosure, but it leaves out tens of thousands of borrowers in the most battered housing markets who won’t qualify because their homes have lost too much value.

The program detailed Wednesday offers refinanced mortgages or modified loans with lower monthly payments. Yet its refinancing plan is limited to borrowers who owe up to 5 percent more than their home’s current value. Loan modifications, supported by $75 billion in federal funding, are unlikely for severely “underwater” borrowers.

The plan doesn’t help homeowners in states “that are at the epicenter of the housing debacle,” said Greg McBride, a senior financial analyst at Bankrate.com.

The ineligible households are concentrated in California, Florida, Nevada and Arizona, but can also be found in struggling cities such as Detroit and Grand Rapids, Mich. Even houses in the outlying suburbs of the nation’s capital, where the economy is relatively healthy, have dropped substantially in value.

Government officials acknowledge that the initiatives are only a partial fix for a sweeping problem that has helped plunge the U.S. economy into the worst recession in decades.

Of the nearly 52 million U.S. homeowners with a mortgage, almost 14 million, or nearly 27 percent, owe more on their mortgage than their house is now worth, according to Moody’s Economy.com.

The program has two parts: one to work with lenders to modify the loan terms for up to 4 million homeowners, the second to refinance up to 5 million homeowners into more affordable fixed-rate loans.

For the modification program, which runs through 2012, borrowers who are eligible will have to provide their most recent tax return and two pay stubs, as well as an “affidavit of financial hardship” to qualify. In the affidavit, applicants will have to cite the reasons behind their financial woes, such as job loss or a drop in income. The government will then take steps to verify the information.

Borrowers are only allowed to have their loans modified once, and the program applies for loans made on Jan. 1, 2009, or earlier. Mortgages for single-family properties that are worth more than $729,750 are excluded.

Lenders could reduce a borrower’s interest rate to as low as 2 percent for five years. Rates would then rise to about 5 percent until the mortgage is repaid.

In case you are interested……this plan will help about 11% of those with mortgage problems…now there is a plan that we should get behind (sarcasm intended).

While the government is here to help…more and more home owners who were crapped on by the unscrupulous lenders will continue to lose their homes…how is this helping those of us on Main Street?

Extension Of The No-Eviction

Government-controlled mortgage finance company Fannie Mae said Friday it is extending a halt to evictions on foreclosed properties through the end of this month as it implements pieces of the Obama administration’s plan to help struggling homeowners.

Fannie Mae’s extension comes two weeks after the company announced its moratorium on foreclosure-related evictions, which initially was to run through Friday.

Fannie Mae on Friday also issued foreclosure sale requirements in response to Obama’s Making Home Affordable program, intended to help 9 million struggling homeowners avoid foreclosure. A foreclosure sale may not occur on any Fannie Mae loan until the loan servicer verifies that the borrower is ineligible for loan-modification criteria set in Obama’s plan, and other foreclosure prevention alternatives have been exhausted, Fannie Mae said.

More than 2.3 million homeowners faced foreclosure proceedings last year, an 81 percent increase from 2007, and analysts say that number could soar as high as 10 million in the coming years, depending on the severity of the recession.

Will You Stay in Your Home?

The administration, launching what it calls the “Making Home Affordable” initiative, said that borrowers will have to provide their most recent tax return and two pay stubs, as well as an “affidavit of financial hardship” to qualify for the $75 billion loan modification program, which runs through 2012.

Borrowers are only allowed to have their loans modified once, and the program only applies for loans made on Jan. 1 2009 or earlier. Up to 4 million borrowers are expected to qualify. Mortgages for single-family properties that are worth more than $729,750 are excluded.

Separately, up to 5 million borrowers who have mortgages held by government controlled mortgage finance giants Fannie Mae and Freddie Mac should be eligible to refinance through June 2010.

House Democrats, under pressure from a group of moderates in their ranks and the banking lobby, agreed Tuesday to narrow legislation that gives bankruptcy judges the power to force lenders to lower the mortgage interest rate or principal balance.

Under the terms of the agreement, judges would have to consider whether a homeowner had been offered a reasonable deal by the bank to rework his or her home loan before seeking help in bankruptcy court. Borrowers also would have a responsibility to prove that they tried to modify their mortgages.

“It is imperative that we continue to move with speed to help make housing more affordable and help arrest the damaging spiral in our housing markets,” Treasury Secretary Timothy Geithner said in a statement.

And How Has That Worked Out So Far?

After about the spending of $350 billion to bailout banks and financial instiutions to help stop the slide of the economy into the dark abyss, but how has that worked out so far?

The rate of U.S. home mortgage borrowers defaulting after their loans are modified is rising and may worsen as the economy deteriorates, U.S. banking regulators said on Monday.

After six months, nearly 37 percent of mortgage loans modified in the first quarter were 60 or more days delinquent, according to a joint report by the Comptroller of the Currency and the Office of Thrift Supervision. Both are banking regulation agencies within the U.S. Treasury Department. After three months, 19 percent were 60 or more days delinquent or in the process of foreclosure.

According to the government’s data, the number of delinquencies rose across all loan categories, although subprime loans had the highest default rates. At the same time, nine out of 10 mortgages remain current.

To answer my own question, not worth a crap!

Are Home Owners Beyond Help?

THis story was found in CNN Money:

More than half of delinquent homeowners whose mortgages were modified earlier this year ended up redefaulting within six months, a top bank regulator said Monday.

Some 53% of borrowers with loans modified in the first three months of 2008 and 51% of those with loans modified in the second quarter could not keep up with payments within six months, according to U.S. Comptroller John Dugan, who spoke at a housing conference.

The report, which will be released in full next week, covers nearly 35 million loans worth a total of $6 trillion — or 60% of all primary mortgages in the United States.

The high redefault rate raises concerns about the long-term effectiveness of loan modifications, which many are pushing as a key solution to the nation’s financial crisis.

A record 1.35 million homes are in foreclosure, while the number of borrowers who have fallen behind on their payments soared to a record 6.99%, the Mortgage Bankers Association said last week.

Meanwhile, 1.7 million homeowners have been helped in 2008 through the Hope Now Alliance, a coalition of lenders, servicers, investors and counselors working with delinquent borrowers on modifications and repayment plans.

Other regulators speaking at the conference questioned the quality of the loan modifications, saying that early efforts to restructure loans were not very effective. Many simply tacked on the missed payments and penalties to the end of the loan.

To entice servicers and investors to participate, Bair’s plan calls for the government would share up to 50% of losses should the loan redefault. But that guarantee only kicks in after the borrower has made six monthly payments to better ensure the mortgage modification is sustainable long-term. It would cost $24.4 billion, which Bair has said could come from the rescue funds.

This basically, saying that maybe nothing is going to stop the foreclosures no matter the help that is given.