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BofA in side deal with US govt on mortgage foreclosures

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Bank of America will make deeper and broader cuts than other
banks, which will allow it to avoid as much as $850 million in
penalties and give more than 200,000 financially strapped
households the opportunity to sharply reduce their mortgage
balances. The side deal is unique to Bank of America, said the
Wall Street Journal, citing a senior administration official. It
added that many of the write-downs will be made on loans
originated by Countrywide Financial Corp, which Bank of America
bought in 2008, and then packaged into securities. Investors in
those securities could then be affected by the side deal. Bank of
America said on Feb. 9 that under the government settlement,
write-downs will be made on loans originated by Countrywide
Financial Corp prior to and for a period following the bank’s
acquisition of that lender. The other banks accused of abusive
mortgage practices that settled with the government were Wells
Fargo & Co, JPMorgan Chase & Co, Citigroup Inc and Ally Financial
Inc.

Restructuring bails out Greece

Greece’s private sector creditors agreed to a historic
restructuring of the government’s debt early Friday, setting the
stage for the nation to secure more bailout money and skirt a
messy default. Investors agreed to restructure €172 billion
worth of Greek bonds, which represents 85.5% of the total €206
billion held by the private sector, said the Greek finance
ministry. Another 69% of investors that own Greek bonds not
issued under Greek law agreed to restructure roughly €20
billion. Greek Finance Minister Evangelos Venizelos welcomed the
agreement, saying the restructuring will help Greece get out of
debt and revive its ailing economy. Greece is widely expected to
activate so-called collective action clauses, which the
government retroactively added to its bond contracts a few weeks
ago, to make the restructuring binding for all holders of Greek
bonds issued under domestic law. The use of the clauses should
bring the total participation rate in the restructuring to more
than 90%, the threshold Greece needs to cross in order to meet
all the conditions of its second €130 billion bailout from the
European Union and International Monetary Fund. Euro area finance
ministers are expected to discuss the restructuring during a
conference call later Friday, when they could approve the final
portion of the bailout.

Banks foreclosing on churches in record numbers

Banks are foreclosing on America’s churches in record numbers as
lenders increasingly lose patience with religious facilities that
have defaulted on their mortgages, according to new data. The
surge in church foreclosures represents a new wave of distressed
property seizures triggered by the 2008 financial crash, analysts
say, with many banks no longer willing to grant struggling
religious organizations forbearance. Since 2010, 270 churches
have been sold after defaulting on their loans, with 90 percent
of those sales coming after a lender-triggered foreclosure,
according to the real estate information company CoStar Group. In
2011, 138 churches were sold by banks, an annual record, with no
sign that these religious foreclosures are abating, according to
CoStar. That compares to just 24 sales in 2008 and only a handful
in the decade before. The church foreclosures have hit all
denominations across America, black and white, but with small to
medium size houses of worship the worst. Most of these
institutions have ended up being purchased by other churches. The
highest percentage have occurred in some of the states hardest
hit by the home foreclosure crisis: California, Georgia, Florida
and Michigan. “Churches are among the final institutions to get
foreclosed upon because banks have not wanted to look like they
are being heavy handed with the churches,” said Scott Rolfs,
managing director of Religious and Education finance at the
investment bank Ziegler. Church defaults differ from residential
foreclosures. Most of the loans in question are not 30-year
mortgages but rather commercial loans that typically mature after
just five years when the full balance becomes due immediately.

Unemployment holds in February

Hiring remained strong in February, but the overall job market is
not out of the woods yet. Employers added 227,000 jobs in
February, the Labor Department reported Friday, a pinch slower
than in January, when the economy added 284,000 jobs. Meanwhile,
the unemployment rate remained at 8.3%, in line with
expectations. Private businesses were the main driver of job
growth, and have been adding jobs consistently since March 2010.
In February, they added 233,000 jobs. But government job losses
have been offsetting some the private sector gains, with most of
the bleeding at the state and local level. Last month, 6,000 were
lost. The American economy lost 8.8 million jobs in the financial
crisis.

Freddie asks for $146M in aid

Government-controlled mortgage giant Freddie Mac has requested
just $146 million in additional aid after posting a smaller loss
in the fourth quarter. That’s far less than in the third quarter,
when Freddie received $6 billion from the government. It received
$7.6 billion for all of 2011. Freddie Mac says it lost $1
billion, or 32 cents per share, in the October-December quarter.
That compares with a loss of $1.72 billion, or 53 cents a share,
in the same quarter of 2010.

Freddie’s losses are decreasing because of a drop in the number
of homeowners paying less interest as they refinance at lower
mortgage rates. The government rescued McLean, Va.-based Freddie
Mac and sibling company Fannie Mae in September 2008 after
massive losses on risky mortgages threatened to topple them.

Economy faces years of reforms – Timothy Geithner
At home and abroad, Treasury Secretary Timothy Geithner said the
economy is on the mend but faces years of painstaking reforms. He
pushed a new highway bill making its way through the Senate that
would invest in infrastructure and streamline the approval
process. Geithner called the bill “employment intensive.” One of
the major headwinds, Europe, seems to be gaining progressive and
positive momentum. A Greek debt-swap program made major progress
Thursday, which would grant the sovereign access to a second
bailout package. He praised foreign officials and the European
Central Bank for setting aside politics in favor of “preventing
the equivalent of lighting the continent on fire.” Averting
disaster will cost years of reform. Geithner said there is a need
to streamline regulatory changes in the U.S.

See you at the top!
Chris McLaughlin

**************

Copyright Loss Mitigation Institute LLC 2011.
All Rights Reserved.

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Mortgage Applications Fall 1.2%

Mortgage applications decreased 1.2 percent from one week
earlier, according to data from the Mortgage Bankers
Association’s (MBA) Weekly Mortgage Applications Survey for the
week ending March 2, 2012. The Market Composite Index, a measure
of mortgage loan application volume, decreased 1.2 percent on a
seasonally adjusted basis from one week earlier.  On an
unadjusted basis, the Index increased 10.2 percent compared with
the previous week.  The Refinance Index decreased 2.0 percent
from the previous week.  The seasonally adjusted Purchase Index
increased 2.1 percent from one week earlier. The unadjusted
Purchase Index increased 14.7 percent compared with the previous
week and was 7.8 percent lower than the same week one year ago.
Last week’s results included an adjustment for the Presidents
Day holiday. The four week moving average for the seasonally
adjusted Market Index is down 1.77 percent.  The four week moving
average is down 0.47 percent for the seasonally adjusted Purchase
Index, while this average is down 2.04 percent for the Refinance
Index. During the month of February, the investor share of
applications for home purchase was at 6.1 percent, a decrease
from 6.4 percent in January.  This change was led by a decline in
the New England region.  In addition, the share of purchase
mortgages for second homes decreased to 5.8 percent in February
from 5.9 percent in January.

Gas prices on a rise

Drivers are paying more at the pump than they were just a few
days ago. The U.S. government reported that the average price of
a gallon of regular gasoline rose more than seven cents to $3.79
during the past week. The price has climbed nearly 50 cents since
Jan. 2. Some analysts worry that rising energy prices could
undermine the economic recovery. Economists say if the price
stays high for a good part of the year, it could stall the
creation of jobs. And higher fuel prices could eventually start
to have an unwelcome side effect: spiraling inflation. “This rise
in fuel price is a negative for the economy,” says John Silvia,
chief economist at Wells Fargo Securities in Charlotte, N.C. “The
reality is transportation gets hit and the cost of goods goes
up.”  The hardest hit are the drivers who live in the poorest
states and those who travel the longest distances.  However, the
price of gasoline has probably risen fastest in California. Since
Jan. 1, the price of regular gasoline in the Golden State is up
61 cents a gallon. For the nation as a whole, some economists now
anticipate the price of gasoline at the pump will exceed $4 a
gallon by Memorial Day, the official start of the summer driving
season.  Mr. Mark Zandi, Chief Economist at Moody’s Analytics
says this could result in the loss of 500,000 jobs. “It basically
means we don’t make any progress on reducing unemployment this
year,” he says.

Housing Affordability Index Hits Record High

According to the National Association of Realtors, the housing
affordability conditions have reached the highest level since
recordkeeping began in 1970. NAR’s Housing Affordability Index
rose to a record high 206.1 in January, based on the relationship
between median home price, median family income and average
mortgage interest rate. An index of 100 is defined as the point
where a median-income household has exactly enough income to
qualify for the purchase of a median-priced existing
single-family home, assuming a 20 percent down payment and 25
percent of gross income devoted to mortgage principal and
interest payments. “This is the first time the housing
affordability index has broken the two hundred mark, meaning the
typical family has roughly double the income needed to purchase a
median-priced home,” he said. “For buyers who can qualify for
a mortgage, now is a very good time to become a homeowner,”
said NAR President Moe Veissi.

Olick: Huge Spike in Repeat Foreclosures

Thousands of foreclosures that were stuck in process due to
delays over the so-called “Robo-signing” paperwork scandal are
working their way through a revamped banking system and heading
toward final bank repossession. Foreclosure starts surged 28
percent in January from December, according to a new report from
Lender Processing Services. More than 230,000 loans began the
foreclosure process in January. Even more indicative of this new
surge in processing is that repeat foreclosures hit an all-time
high in January, representing 47 percent of all starts, according
to LPS. Repeat foreclosures are either failed loan modifications,
or loans that banks were attempting to modify but couldn’t. “This
large amount of foreclosures that have been sitting out there,
with borrowers not making payments for an extended period of
time, this may be coming to an end,” says LPS’ Herb Blecher.
“This is what the market is looking for.” That’s because while
painful to housing in the short term, moving the huge pipeline of
delinquent loans to their inevitable end will help the overall
market in the long term. There are nearly 4 million loans now in
some stage of delinquency which have not even entered the
foreclosure process. Banks are modifying loans more aggressively
now, but many of these mortgages simply cannot be saved, and the
sooner they are processed and new buyers are found for the
properties, the sooner overall home prices can recover.  The new
surge in foreclosure starts consequently created an equal surge
in foreclosure sales. Foreclosure sales rose 29 percent month to
month in January, indicating that there will be a new surge of
distressed properties coming to the housing market in the next
few months, as banks try to sell these homes. While new mortgage
delinquencies are falling, the backlog of distress is large. More
than 40 percent of loans in foreclosure are more than two years
past due, and judicial states have 63 months of foreclosure
inventory to work through.

FHFA, Freddie faulted for overlooking mortgage servicers

Freddie Mac and its conservator the Federal Housing Finance
Agency avoided implementing stronger oversight of mortgage
servicers when they had the chance, according to an FHFA Office
of Inspector General report. Freddie contracts with more than
1,400 servicers, but the largest banks handle the majority of its
$1.8 trillion portfolio. In 2010, evidence surfaced of mishandled
foreclosures, lost paperwork and improper signatures at the big
servicing firms. The top five servicers agreed to a $25 billion
settlement with the state attorneys general in February. Freddie
did not install its servicing scorecard program until July 2011
and rated the overall performance as below standard or
unacceptable, according to its most recent report. Documentation
the government-sponsored enterprise provided to the Inspector
General shows weak servicer oversight and risk management played
a significant role in the subpar performance. n a letter to the
inspector general, FHFA Deputy Director of Enterprise Regulation
Jon Greenlee wrote on the supervision of Freddie that “a
dedicated examination staff to monitor and coordinate oversight
activities would enhance the agency’s overall efficiency and
effectiveness.”

DSnews: Foreclosures spike in January

Data through the end of January shows significant movement in
both foreclosure starts and sales, and it has some market
watchers saying the lull in foreclosure activity seen over the
past year-and-a-half may very well be coming to an end. Lender
Processing Services’ (LPS) latest market report says
foreclosure starts jumped 28 percent between December and
January, and foreclosure sales soared 29 percent. “While one
month of data does not necessarily indicate a trend, this surge
could suggest the backlogged foreclosure pipeline is beginning to
move,” LPS said in its report. The January data also shows that
the percentage of repeat foreclosures hit a new all-time high,
with 47 percent of all foreclosure starts during the month
involving a mortgage that had been delinquent before, cured, and
then fell back into foreclosure again.

Home prices at levels of 10 years ago: CoreLogic

Home prices in January declined for the sixth consecutive month
in a row, according to the latest data from CoreLogic. The Santa
Ana, Calif.-based analytics firm says home prices, including
those on distressed sales, fell 3.1% in January from a year
earlier and dipped 1% from December. When excluding distressed
home sales, prices fell 0.9% in January compared to a year
earlier. “Home prices are down to nearly the same levels as 10
years ago,” said Mark Fleming, chief economist for CoreLogic. The
five states with the highest price appreciation in January
included South Dakota, where prices rose 5.7%, North Dakota (up
4%), West Virginia (up 4%), Montana (up 3.6%) and Michigan (up
3%). States with the deepest price depreciation included Illinois
with a drop of 8.7%, Nevada (down 8%), Delaware (7.9%), Alabama
(7.7%), and Georgia (7.5%). When evaluating home price
depreciation from peak levels of April 2006 to January 2012, the
drop is a steep 34% and 24.2% when excluding distressed assets.

See you at the top!
Chris McLaughlin

**************

Copyright Loss Mitigation Institute LLC 2011.
All Rights Reserved.

http://www.shortsalesriches.com
http://www.shortsalescoach.com
http://www.sixfigurebpo.com
http://www.reomillionaireclub.com
http://www.youtube.com/shortsalesriches
http://www.smartrealestatenews.com