Archive for January, 2010
The CML has today published its formal Mortgage Market Review response, as well as a separate detailed report on the outlook for mortgage funding in the UK between 2010 and 2015.
The trade body has argued that with some of its proposals the regulator is overreacting without evidence to justify their actions.
It cites the requirement for income verification and the resulting ban on fast-track as an example of the FSA’s overreaction.
A record share of U.S. homeowners cut their loan principal when refinancing in the fourth quarter rather than tap their home's equity for cash, home funding company Freddie Mac said on Thursday.
Record low mortgage rates in the fourth quarter and a relative dearth of equity build-up after home prices fell about 30 percent on average from 2006 peaks drove consumers to pare debt.
One-third of those who refinanced shaved their loan balance, saving billions of dollars, Freddie Mac said.
Morgan Stanley, UBS and Barclays were among banks sued by Federal Home Loan Bank of Seattle, which seeks to recoup more than $2 billion it paid for certificates backed by faulty mortgages.
The banks made misleading statements about the asset-backed securities and the credit quality of the mortgage loans that backed them when they sold them to Federal Home Loan, according to six complaints filed in state court in Seattle last month and transferred to federal court starting Jan. 22.
The Seattle bank, one of 12 Federal Home Loan Banks in the US, wants to recover at least a portion of the purchase price, plus interest, of certificates purchased since 2005.
U.K. mortgage lender Paragon Group of Cos. PLC (PAG.LN) Thursday said overdue borrower payments dropped in the three months to Dec. 31, as low interest rates kept its buy-to-let mortgages affordable, and that it hopes to start making new loans soon if securitization markets ease further.
At 0915 GMT, shares in Paragon were up 5 pence, or 3.8% at 140 pence, outpacing broader gains in financial shares. The stock is nearly triple its price a year ago, when the outlook for the financial system and broader economy was…
When John King stopped making payments on his home in Coral Gables, Florida, two years ago, he assumed the foreclosure ended his mortgage contract, he said. Last month, a Miami-Dade County court gave collectors permission to pursue him for $44,000 stemming from the default.
King is among a rising number of borrowers who are learning that they can be on the hook for years after losing their homes. Amid a crisis that stripped $6.4 trillion, or 28 percent, from the value of U.S. residential real estate since the 2006 peak, lenders are exercising their rights to pursue unpaid mortgage balances. To get their money, they can seize wages, tap bank accounts and put liens on other assets held by debtors.
Joseph Azrack helped Citigroup Inc. build a $13 billion portfolio of commercial real estate that has plummeted in value since his departure from the bank in June 2008. The portfolio may soon be taken over by Apollo Global Management LP. Its prospective manager: Joseph Azrack.
Apollo and Australia's Macquarie Group are the finalists in the bidding to take over Citigroup's real-estate investment unit, known as Citi Property Investors, according to people familiar with the matter.
Citigroup is selling its real-estate investment unit as it seeks to focus on core businesses such as retail banking and investment banking. The unit raised money from pension plans, wealthy individuals, and Citigroup itself to build and buy property around the world.
Vladimir Bien-Aime is the CEO of Global DMS
Vladimir Bien-Aime is the CEO and co-founder of Global DMS. Prior to that, Bien-Aime consulted on special technology projects that involved the analysis, design and implementation of large-scale technology systems for several of the industry’s leading corporations, including CitiGroup, Juniper Bank, First USA, WingSpanBank/Bank One and Standard & Poor's. But these days there's a line in the sand called the Home Valuation Code of Conduct, and players in the industry are taking sides. For this installment of In This Corner he explains why HVCC needs to stay.
There's talk about Congress doing away with HVCC. What is your verdict on that regulation? Should it stay or should it go?
I feel that HVCC should stay. Before HVCC, let’s face it, the door was wide open to loans containing inflated appraised values. In order to avoid the problems of the past decade, we need to do everything we can to protect the integrity of collateral valuations. HVCC isn’t without its difficulties, but doing away with the guidelines altogether would be throwing the baby out with the bath water. Is HVCC perfect? No. Is it necessary? Absolutely. The primary complaint about HVCC seems to be low appraised values, which are actually not a result of HVCC, but rather a function of market conditions.
HUD postponed new rules over appraisals for February 15, 2010. Are these new guidelines going to clean up the appraisal process or simply slow it down?
I think they’re going to clean it up. HUD did a really good job of taking the best of HVCC and incorporating that into its existing appraisal protocol. There is one minor issue, however, that’s causing a bit of confusion. The new guidelines addresses the issue of appraiser compensation, but state only that they need to be paid what’s customary and reasonable. Without a clear definition of what “reasonable and customary” means, a lot of lenders will be left wondering if their appraisal process complies in this area.
What sort of adjustments are appraisal management companies (AMCs) going to make?
AMCs or appraisal management companies will need to ensure that their appraisers are on the FHA roster. A lot of people think that simply being licensed is enough, but it’s not. All appraisers must be certified for FHA.
Also, there’s some language that implies that lenders will need to disclose the fees they’re charging for the appraisal and the fee that the actual appraiser is being paid. While the language is a bit vague, lenders and brokers should be prepared to report their margins, in the event that the investor requires disclosure.
At a time when housing prices are on the decline, how can an appraiser feel good about a value he or she puts on a property?
A legitimate appraiser will not care what the value of a property is, and will feel neither good nor bad when it comes to the current value of a property. What he or she will be concerned with is determining a true and accurate assessment of the value of the subject property according to current conditions. The role of an appraiser is to be completely objective, without a vested interest in the outcome of the appraisal. That’s the only way we can ensure an unbiased evaluation. This is why appraisal objectivity is so important to the process.
Editor's Note: HousingWire is currently putting together its first supplement for subscribers that explores ultimately whether HVCC is a good for the mortgage finance business.
