Matt’s Take on the News November 10, 2011 What is Veterans Day? Tomorrow is Veterans Day. Many people equate Veterans Day to a day off of work, a day at the beach, an opportunity to throw a party…..everything that Veterans Day DOESN’T represent! Wikipedia defines Veterans Day as, “an annual United States holiday honoring military [...]
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Matt’s Take on the News
November 8, 2011
Same Old Same Old!
Gretchen Morgenson form the New York Times reports on the proposed “settlement” between the robo signers (I mean banks!) and our illustrious government. It is being touted as a $25B settlement that is supposed to slap the guilty lenders silly. As Ms. Morgenson points out, one must really read between the lines to understand the mechanics of the deal.
The actual cash outlay from the banks will be in the neighborhood of $3.5B – $5B. The balance of the funds, “….would consist of credits to banks that agree to reduce a predetermined dollar amount of principal owed on mortgages that they own or service for private investors. How many credits would accrue to a bank is unclear, but the amount would be based on a formula agreed to by the negotiators. A bank that writes down a second lien, for example, would receive a different amount from one that writes down a first lien.” Ms. Morgenson points out that, “Sure, $5 billion in cash isn’t nada. But government officials have held out this deal as the penalty for years of what they saw as unlawful foreclosure practices. A few billion spread among a dozen or so institutions wouldn’t seem a heavy burden, especially when considering the harm that was done.
I would encourage you to read the article. Gretchen points out where the $3.5-$5 B will go (you will be surprised)…..she also points out that the folks at MERS will be given a free pass after the settlement (not surprised!). She also points out that the program may not apply to notes owned by Fannie and Freddie (this will affect the high percentage of the notes that are out there).
What I’m looking forward to is the new acronym that the government will think up. HAMP is taken…HAFA has been used…HARP is the new kid on the block….any guesses as to what the government will call this one!??
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Matt’s Take on the News
November 3, 2011
News Rewind: Waiver OK’d on flipping houses
Original Date: 1/18/2011
Leslie Berkman from the Press Enterprise reports on a recent development with the FHA. Effective February 1, 2010 (with a tentative end date of February 1, 2011), the FHA has eliminated the 90 day seasoning requirement for people that purchase homes that are financed with FHA mortgages. Prior to the change, individuals who purchased homes, could not sell them to buyers with FHA mortgages for 90 days. This effectively shut out many a home owner from purchasing properties that were acquired by investors.
The 90 day seasoning requirement discouraged people from purchasing properties in areas that were typically funded by FHA mortgages. Why? When a person purchases something (whether it be a house, a car or grandfather clock) they want the right and the flexibility to sell it when they want. Pure and simple. So, don’t be a hater! If it helps the economy and helps people, support it! Who knows, maybe Bank of America will get a clue!
Matt’s Take on the News
November 1, 2011
Triple Dip?
No we are not talking about ice cream! As the article below states, Barclays expects a continuation of the recession with a corresponding drop in home prices. While this may be old news to everyone, the most interesting part of the article touches on the effect of REO’s and the shadow inventory which is lurking…..you guessed it …..In the shadows!
Some very telling quotes from the article include, “Barclay’s notes that delays associated with foreclosures have, for the moment, prevented an overcorrection in home prices by limiting the amount of REO inventory on the market…….As foreclosure to REO roll rates improve, the number of distressed homes placed on the market will increase. Barclays says although REO supply and demand are currently evenly matched, the glut of foreclosed homes in the pipeline should eventually cause REO supply to far exceed REO demand.
This supply-demand imbalance could remain well into 2013 and 2014, according to the research firm.
Barclays says price gains will be constrained by the amount of REO supply that will be placed on the market in the next few years.”
Read between the lines.
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Matt’s Take on the News
October 27, 2011
Let’s Be Hopeful!
By now, everyone has probably heard about Bank of America’s trial short sale program. if you haven’t, Mark Puente from the St. Petersburg Times does a nice job of laying out the specifics behind the program. What is confusing is that their is no method to who BOA chooses for this program. If the program helps even one person, its a step in the right direction I would suggest that you read the article.
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Matt’s Take on the News
October 25, 2011
The Long Sale
I liked the headline so much I had to borrow it from the author of the article, Greta Guest from the Detroit Free Press. While the article points out the obvious that short sales can and do take a tremendous amount of time to complete, the article also points out the role the private mortgage insurance plays in further delaying short sale approvals. Be aware if PMI is included on loans that you are currently involved with. Ms. Guest also points out the need to involve an attorney in this process…why wouldn’t you?
Also, a reputable investor that is involved in a short sale transaction can also minimize the time to close. Call me and ask me how.
The following quote from the article is a bit misleading (no fault of the person quoted), “Klorinda Hibbert, a real estate agent at Michigan brokerage Re/Max in the Hills, spends most of her day working on short sales and has 14 in progress now. She’s noticed changes in the past year — and they aren’t for the better.
She said lenders and servicers are requesting more than one broker’s price opinion. The lender works with real estate brokers who put together a valuation on the property based on what similar properties are selling for. They’re also requesting formal appraisals. They are good for only 90 days.
“The banks are willing to go into foreclosure rather than do a short sale,” Hibbert said. “They want to get paid in full.”
The reason I say it is misleading is due to the use of the word banks. The reality is that 90% (give or take) of mortgage notes are being serviced by the “banks”. What that means is that the longer they can draw out the short sale process, the more they get paid. If the servicers drive the property into foreclosure, guess what? They get paid.
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Matt’s Take On the News
June 7, 2011
Who Says Politicians Can’t Be Bought!
Massimo Calabresi from Time reports on how Iowa’s Attorney General Tom Miller recently accepted $15,000 in campaign contributions from (2) individuals who have vested interest in the government and the attorney generals NOT coming down on lenders for their bad deeds. You might ask who Miller is. Miller, “…. took the lead on the investigation by all 50 state attorneys general into the “robo-signing” foreclosure scandal, where several big banks allegedly approved taking away people’s homes without adequately verifying the facts in court, as required by law in some states.”
Instead of recognizing the conflict of interest, Miller made excuses justifying the contributions. Why wouldn’t he simply return the money?
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Matt’s Take on the News
October 18, 2011
News Rewind: Helping Out Our Military!
Matt’s Take on the News
As most of you know, I am a big supporter of our military. Without them, you wouldn’t have been able to complain about that cold cup of coffee that you returned to Starbucks yesterday! While I typically provide commentary on articles, this article is one that you will want to read if you have a friend, family member or client that is active duty military and in danger of losing their home. Freddie Mac has made arrangements to delay foreclosure proceedings for active duty military. For more details, read the entire article.
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Matt’s Take On the News
October 13, 2011
Life After Modifications
This an interesting article with a simple twist. The article points out that a high volume of people that are denied loan modifications are being offered short sales and or deed in lieu. On the outside, it would appear that the bank is making an effort to help homeowners by offering alternatives to foreclosure. For those that can’t afford the house (no matter what modification amount is), short sales can make sense. Rarely, will a deed in lieu help (which is one of the many reasons why foreclosure defense attorneys are essential for seller representation………if the fine print in deed in lieu is not read correctly, it functions as a foreclosure…it’s just cheaper than a foreclosure for the bank).
The twist involves people that can actually afford their house if their mortgage is modified. A deed in lieu or a short sale won’t help these folks. Instead of focusing on solutions that don’t work, why don’t lenders focus on solutions that do work?
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Matt’s Take On the News
October 11, 2011
Protesting Foreclosure
What effect will a protest have on Fannie Mae’s ability to foreclose? Not much (as the article points out). What it does do is add a voice to those who feel that their home was taken away in an unjust fashion.
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