Archive for February, 2011
Foreclosure listings in the Dallas-Fort Worth area rose 3% between the fourth quarter of 2010 and the first quarter of 2011, according to foreclosure data firm Foreclosure Listing Service.
For the first three months of 2011, area courthouses have recorded 16,194 foreclosure filings, making it the fourth time North Texas foreclosure filings hovered above 16,000 since the onset of the housing crisis.
The report – which compiles data from the counties of Denton, Collin, Tarrant and Dallas – already includes March data since foreclosure postings are due at courthouses a month before auction.
While quarter-over-quarter foreclosure listings grew 3%, foreclosure filings for next month's auction fell 9% from a year earlier. DFW area courthouses recorded 5,071 filings for the upcoming auction, down from 5,548 a year ago, but up 19% from March 2009 and 22% higher than March 2008.
The silver lining is foreclosure filings for the March auction fell from the previous month in all DFW counties except Collin County, which saw its foreclosure postings rise 3% between February and March. However, on a year-over-year basis, all the counties reported a drop in March foreclosure filings.
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Tags: auctions, foreclosures, residential foreclosures
Posted in Servicing/Default, Top Stories | 2 Comments »
The House Committee on Oversight and Government Reform heard testimony from scholars and trade group leaders Thursday on whether new regulations should be reviewed for their effect on employment, particularly when it comes to borrower income and the housing industry.
Unemployment fell to 9% in January, though many critics point out that number does not include the amount of workers who have had pay scaled back or even those who have given up looking. In a House subcommittee hearing Wednesday, academics said the Federal Reserve's monetary policy had done little to spur job growth.
Rep. Darrell Issa (R-Calif.), who chairs the oversight committee, wants to know if overreaching regulations are getting in the way too.
In 2010 alone, 43 major rules were passed by regulators, with 15 of them involving financial regulation, specifically stemming from Dodd-Frank, said James Gattuso, senior research fellow at The Heritage Foundation.
National Association of Realtors President Ron Phipps, who has been touring bank and regulatory offices to reduce toughened mortgage underwriting standards since the crash, said in a blog post Thursday that Congress should continue to support home sales.
"For every additional 1,000 home sales, about 500 jobs are added to the economy," Phipps claims in his post. "In the days ahead, NAR will be reaching out to Congress and the White House to emphasize the clear connection between housing, jobs and the economy."
Gattuso proposed new legislative steps to scrutinize these upcoming rules. He called for Congressional approval of major regulations, a cost analysis of all new regulatory burdens and to review old regulations that "have outlived their usefulness."
Whether or not these rules have a direct effect on employment may be left for debate, but President Obama himself said in his State of the Union speech that regulations should be examined to "help our companies compete" and to "knock down barriers that stand in the way of their success."
More is on the way. Dodd-Frank, he said, will require 243 new formal rulemakings by 11 federal agencies.
Opinions varied on whether or not regulations in this or any other sector has crippled job growth. Jay Timmons, CEO of the National Association of Manufacturers said in his testimony that it definitely has.
"Unfortunately, over the last two years, we have not seen sensible and cost- beneficial regulation being proposed by government agencies," Timmons said. "On the contrary, an aggressive federal bureaucracy has imposed unworkable and excessive regulations with little regard for their impact on job creation and the economy."
Sidney Shapiro, member scholar for the Center for Progressive Reform, said it was a lack of regulation, not too much regulation that was responsible for the collapse of the financial sector in the first place.
"The fact that regulated entities do not like regulation does not mean that it is the cause or even a contributor to our economic and unemployment woes. The evidence to back up these claims is not there," Shapiro said in testimony.
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Tags: Dodd-Frank, employment, Federal Reserve, House, Issa, regulation, unemployment
Posted in Origination/Lending, Top Stories | 3 Comments »
[Update 2: Corrects original version of story that wrongly said Fannie Mae pulled work from four law firms. Fannie Mae pulled work from the Law Offices of David J. Stern. However, Fannie Mae didn’t pull work from the offices of the Law Office of Marshall C. Watson of Fort Lauderdale, Shapiro & Fishman in Boca Raton or the Florida Default Law Group in Tampa.]
Fannie Mae has terminated its relationship with Florida-based foreclosure default law firm Ben-Ezra & Katz, P.A., according to a notice sent to mortgage servicers Thursday afternoon. The government-sponsored enterprise advised its mortgage servicers to move Fannie Mae matters to other law firms within its retained attorney network.
Fannie Mae said it became aware of certain document execution issues at the Ben-Ezra law firm regarding its processing of foreclosure cases on the agency's behalf.
"We have terminated the firm. It is our expectation that law firms will handle matters in strict compliance with proper procedures, ethical codes of conduct and legal requirements," a Fannie Mae spokesperson said in a statement. "In instances where we have reason to suspect that a firm may not be doing so, we will immediately engage and take appropriate action."
In the guidance issued late Thursday afternoon, Fannie Mae said any matters concerning the agency that are being handled by Ben-Ezra must be transferred to a different law firm by Feb. 15.
Fannie Mae mortgage servicers are advised to:
- refer any foreclosure matters currently held with Ben-Ezra that have not been legally enacted to another attorney firm within Fannie Mae's Retained Attorney Network in Florida
- notify Fannie Mae on the transfer location of these cases, and
- notify the new law firm of the transfer
- immediately suspend all payments outstanding to Ben-Ezra
The Ben-Ezra law firm said it is both disappointed and surprised by Fannie Mae's decision, since the issues leading to the agency's action are based on discrepancies the firm discovered internally, the firm said in a statement. The Ben-Ezra firm says it then proactively informed Fannie Mae about its plans to correct the problem, the statement said.
"There is no issue of whether the information in the affected files is correct," Ben-Ezra said in a statement. "No homeowner has been hurt because of this. These are technical paperwork issues — not a question of whether filing the foreclosure was appropriate."
Several Florida law firms have been under scrutiny since the robo-signing scandal broke in October. Late last year, Fannie Mae pulled business away from the Law Firm of David J. Stern in Plantation for alleged document process irregularities, as well.
The Florida state Attorney General's office has also said it is investigating three other law firms: the Law Office of Marshall C. Watson of Fort Lauderdale, Shapiro & Fishman in Boca Raton, and the Florida Default Law Group in Tampa. None of these firms has been accused of any wrongdoing in the investigation.
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Tags: Ben-Ezra & Katz, Fannie Mae, Florida Default Law Group, Law Firm of David J. Stern, Law Office of Marshall C. Watson, servicing guidance, Shapiro & Fishman
Posted in Servicing/Default, Top Stories | 1 Comment »
Civil rights leaders concerned about the impact housing market reforms could have on consumers are meeting in Washington D.C. next week.
With Fannie Mae and Freddie Mac expected to play a smaller role in the future of the mortgage market, the consumer and civil rights groups want to brainstorm some of the mechanisms that should be deployed in the housing system to keep it accessible to all home buyers.
The House subcommittee on capital markets and the government-sponsored enterprises heard testimony Wednesday on plans to revamp the housing finance system. Many of those plans proposed the end of Fannie Mae and Freddie Mac. A U.S. Treasury report outlining reforms for the government-sponsored enterprises, Fannie and Freddie, is expected Friday.
Representatives from the National Council of La Raza, the NAACP, the Center for Responsible Lending, the National Fair Housing Alliance, the National Coalition for Asian Pacific American Community Development and the National Urban League will be leading the forum.
“In improving our national mortgage lending system, we must ensure that all types of home loans are available to creditworthy families, no matter where they live or with whom they bank,” said Janet Murguía, president and CEO of the National Council of La Raza.
Murguía added, "The debate on housing finance reform presents a new opportunity to correct a flawed housing market that allowed too many families to fall prey to predatory and unscrupulous lenders."
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Tags: Fannie Mae, freddie mac
Posted in Origination/Lending, Top Stories | 2 Comments »
The Federal Housing Administration substantially raised its risk when it agreed to insure loans valued as high as $729,000 during the financial crisis, says a new report from the George Washington University Center for Real Estate and Urban Analysis.
“Without question, FHA played a major role in keeping the housing market afloat during the economic collapse of 2008 and 2009, and we need to be careful about cutting back too rapidly,” said Van Order, Oliver T. Carr professor of real estate and chair of CREUA.
“However, these large loan sizes are unlikely in the long run to assist FHA in reaching its historical constituencies," he added. "Our research indicates that larger loans are likely to perform worse than FHA’s traditional market, and we are concerned that the rapid increase in FHA’s market share will be hard to manage.”
Researchers who worked on the report say FHA loan limits hovered at $362,790 in 2006, about $400,000 less than today's limit.
With loans valued at or above $350,000 performing worse than smaller FHA-insured loans, the research center is advocating a return to lower FHA loan limits and a renewed emphasis on first-time and minority homebuyers. Researchers who compiled the report found higher loan limits do little for minority homebuyers since 95% of the agency's African-American and Hispanic borrowers opt for loans valued under $300,000.
Write to Kerri Panchuk.
Tags: Federal Housing Administration, FHA
Posted in Origination/Lending, Top Stories | 1 Comment »
California residents who are unemployed or owe more on their mortgages than what their homes are worth now have four new state programs that will help them stay in their house and current on their mortgage.
The California Housing Finance Agency fully implemented the programs under its "Keep Your Home California" initiative, a nearly $2 billion endeavor funded by the U.S. Treasury's Hardest Hit Fund. Alabama recently jump-started a program to distribute its funds from the Treasury HHF.
“Our goal is to get the very most out of these federal dollars to assist California families,” said Steven Spears, executive director of CalHFA. “With families struggling through a number of financial hardships and the disruption in the real estate market, these programs will help those in need while stabilizing neighborhoods and communities severely impacted by foreclosures.”
Under Keep Your Home California are three programs that offer several forms of mortgage assistance and one program that provides transition assistance to borrowers in the process of a short sale of deed-in-lieu transaction.
The Unemployment Mortgage Assistance Program is designed to give unemployed homeowners up to $3,000 a month or 100% of the existing total monthly mortgage payment stay current, depending on which amount is less.
The Mortgage Reinstatement Assistance Program is intended to help homeowners who have defaulted on their mortgage payment due to a temporary change in household circumstance, such as death or serious illness. The Cali Housing Finance Agency will fund up to $15,000 per household under this program.
CalHFA is also offering a principal reduction to borrowers at risk of default because of an economic hardship coupled with a severe decline in the home's value. The Principal Reduction Program provides capital to reduce outstanding principal balances of qualifying borrowers with negative equity and most likely prelude a loan modification, the agency said.
Homeowners receive assistance with relocating under the Transition Assistance Program. The program is used in conjunction with a servicer-approved short sale or deed-in-lieu of foreclosure program.
All programs were supposed to be in effect by Nov. 1, but were delayed due to logistical issues, according to an article by the Sacramento Bee. Still, Norma Torres, a member of California's Assembly Committee on Housing and Community Development, commented that any action taken is a step in the right direction.
"No one program will solve the foreclosure crisis affecting our state, but together we hope to make a difference for as many families as possible," she said.
Write to Christine Ricciardi.
Follow her on Twitter @HWnewbieCR.
Tags: CalHFA, California Housing Finance Agency, Hardest Hit Fund, Keep Your Home California, mortgage assistance program, transition assistance, Treasury Department
Posted in Servicing/Default, Top Stories | 3 Comments »
The Mortgage Bankers Association sent a letter to the Federal Housing Finance Agency Thursday asking it to extend the Home Affordable Refinance Program and retool certain guidelines.
The FHFA is the regulator for Fannie Mae and Freddie Mac, which administer HARP. The program was launched with the Home Affordable Modification Program in March 2009 to help underwater borrowers refinance into terms with lower payments and more stable products. Refinancings through this program picked up speed at the end of 2010, but it is currently set to expire June 30.
In January, the MBA reported that refinancings, a major driver of originations with demand lacking post-homebuyer tax credit, would drop 77% by 2012. The MBA asked the FHFA in its letter to push the expiration date on HARP to Dec. 31, 2012.
Currently mortgages with a loan-to-value ratio of more than 125% are not eligible. The MBA said this cap prevents borrowers from the hardest hit regions from entering the program.
"FHFA should consider raising or removing the LTV cap on loans that the GSEs already own to allow borrowers who are in severe negative equity positions, yet are still meeting their mortgage obligations, to improve their financial position," MBA CEO John Courson wrote in the letter.
The MBA complained about the constrictive nature of the loan-level price adjustments, or LLPAs, which are conducted on loans delivered to the government-sponsored enterprises and based up on features such as credit score, occupancy, number of units and others.
The adjustments are capped at 2 percentage points, but the MBA said these fees often push borrowers deeper underwater and recommended an evaluation of the fee structure to help borrowers with the highest LTVs.
"HARP is a vital component of a lender’s tool kit to help borrowers remain in their homes," Courson wrote.
The FHFA declined to comment on the letter.
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Tags: Fannie Mae, FHFA, freddie mac, mortgage, Mortgage Bankers Association
Posted in Servicing/Default, Top Stories | 5 Comments »
The future reform of government-sponsored enterprises Fannie Mae and Freddie Mac will take years to implement and will carry an explicit government guarantee, mortgage finance analysts are predicting.
The U.S. Treasury's white paper concerning reform of the GSEs is due out first thing Friday.
It is largely believed that the Treasury will recommend a gradual winding down of its position with the firms and away from a controlling stake.
With speculation abounding over what forms the recommendations may ultimately take, mortgage finance analysts are predicting resolution will take place over a very long timeline.
This serves a dual purpose, they say, of allowing investors to unwind their positions without disrupting the mortgage market at-large. By removing urgency from the process, it is expected that the Treasury will make it appear that immediate action is not imperative.
"We expect a long road to implementation, which will allow markets to transition to the new housing finance system and avoid a negative shock to the housing market," reads a mortgage strategy report from one of the top four banks Thursday. "This means that we should expect only short-lived volatility in the mortgage-backed securities markets as announcements related to GSE reform are made."
The note adds a window of 10 to 15 years of transition, with the creation of a Federal Deposit Insurance Corp.-like insurance fund and new private entities to guarantee the new government-backed MBS.
A note from Credit Suisse supports that claim.
"We are optimistic about a catastrophic backstop model reportedly being considered, which has the potential to share elements with our proposal," said analysts Mukul Chhabra, Qumber Hassan, and Mahesh Swaminathan. "We believe that Treasury's support for a specific plan is important to avoid investor disappointment."
They add that any perception that the government is leaning toward a private mortgage model would trigger significant spread widening.
"On the other hand an explicit backstop model should be viewed favorably by investors, in our view," they add.
Jim Vogel of FTN Financial, takes pause with calling the reform a "winding down" as the timeline is so extended that it isn't a correct way to characterize the plan.
"The goal of the GSE reform white paper is not to offer a reform plan," Vogel said. "It’s to establish a political position on housing finance that can eventually lead to a reform plan."
In the meantime, Vogel indicates that the "catastrophe fund" is the favored plan of investors and the mortgage industry.
"Although it has the fewest government votes today, it’s the de facto compromise between the other two alternatives," he said. "The idea is to improve, but perpetuate the core of the existing system."
Follow him on Twitter @JacobGaffney.
Tags: Fannie Mae, freddie mac, GSE, Treasury
Posted in Secondary Market/Investors, Top Stories | 2 Comments »
The new Consumer Financial Protection Bureau, which will have policing power over mortgage disclosures through the Truth in Lending Act, is in the crosshairs of a Texas congressman who believes the agency lacks oversight.
The CFPB, which is still seeking a director, is set to launch July 21, but Rep. Randy Neugebauer (R-TX) has introduced H.R. 557, which if passed, would merge the CFPB into the Treasury Department.
"Given the significant and perhaps over-regulating powers the CFPB has been given by the Obama administration, Congress must have a say on the appropriation of taxpayer money funding this agency’s operation," Neugebauer said.
The CFPB is currently under the purview of the Federal Reserve Board.
Neugebauer said moving the agency will allow Congress to examine the CFPB's actions and their effects on the overall market.
Write to Kerri Panchuk.
Tags: Bureau of Consumer Financial Protection, Department of Treasury, Elizabeth Warrent, Truth in Lending Act
Posted in Origination/Lending, Top Stories | 3 Comments »
John Burnett joined default management and collateral valuation company Integrated Asset Services as chief operating officer.
As an 18-year veteran of the industry, Burnett has extensive management experience in the real estate-owned, foreclosure, valuation, bankruptcy and loss mitigation divisions.
Prior to IAS, Burnett worked at IBM-Lender Business Process Services, Wilshire Credit Corp., Wells Fargo Bank (WFC: 29.3465 +1.02%) and Washington Mutual Bank, holding senior positions at each firm. For this reason, IAS President Ryan Tomazin said he is excited to have Burnett on board.
"As part of our ‘no excuses’ approach to doing business, we’re continually reinvesting in every aspect of our business, including the leadership team,” said Tomazin. “John represents the kind of proven professional we’re looking for to help us raise the bar in quality and performance for the industry.”
Write to Christine Ricciardi.
Follow her on Twitter @HWnewbieCR.
Disclosure: The author holds no relevant investments.
Tags: Integrated Asset Services, people mover
Posted in Servicing/Default, Top Stories | 2 Comments »
