Things at Ocwen just went from bad to much, much worse

Things at Ocwen just went from bad to much, much worse

Embattled company hit with an avalanche of bad news

Pending home sales surge to highest level in 18 months

Buyer demand boosts sales

Foreclosure: The Movie… (finally!) coming to a screen near you

In new film, neighborhood of foreclosed homes drives man insane

MBA: Proposed Cramdown Legislation Could Add Two Points to Mortgage Rates

MBA chairman-elect David G. Kittle testified earlier this week in front of the House Judiciary Committee's Subcommittee on Commercial and Administrative Law, and said that proposed changes to Federal bankruptcy law designed to help subprime borrowers would end up hurting all borrowers. In his testimony, Kittle told the committee that proposed legislation to reform the bankruptcy code and allow judges to "cramdown" debt on primary residential mortgages will impose significant costs on consumers by restricting the flow of capital into the mortgage market and increasing the price tag on all mortgages. "If you chip away at the security created on home mortgages–and this bill is not a small chip, it is a sledgehammer attack—you chip away at the entire core of the mortgage finance system," said Kittle. "In order to account for the added risk you will add significant costs to obtaining a mortgage. If this bill becomes law, we believe mortgage rates would jump significantly, going up 1½ to 2 points for everyone taking out a loan." I'd noted in some highly-read commentary published here at HW in early October that I thought the proposed bill (H.R. 3609) would end up being a misdirected legislative ploy that would hurt consumers. Read more about the proposed bill here. Update: Full testimony published on the Judiciary's Web site shows that Mark Zandi, chief economist at Moody's, is in favor of the proposed legislation. "Properly designed, the legislation could reduce the number of foreclosures through early 2009 by at least 500,000," Zandi said in his testimony. Others echoed Zandi, with Richard Levin, Esq. -- representing the National Bankruptcy Council -- saying that "fears that allowing home mortgage debt modification in chapter 13 cases will upset mortgage markets or the availability of mortgage funding are completely unwarranted and unsubstantiated." I personally read through Kittle's full testimony; it's worth reading for the discussion of uninsured losses and repurchase risk, which would change the game dramatically for anyone servicing FHA or VA loans.

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