Short Sale HUDs

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Pennsylvania First Settlement Services is a full-service title insurance agency serving the greater Pocono area of northeastern Pennsylvania.  Its services include title searches, title insurance, real estate settlements, foreclosure research, documents services and short sale assistance.  www.pafirstsettlement.com

Not There Yet - Monthly House Price Index Declined 0.3 Percent

[FEDERAL HOUSING FINANCE AGENCY - NEWS RELEASE - 3/22/11]

WASHINGTON, DC – U.S. house prices declined 0.3 percent on a seasonally adjusted basis from December to January, according to the Federal Housing Finance Agency’s monthly House Price Index. The previously reported 0.3 percent decrease in December was revised downward to a 1.0 percent decrease. For the 12 months ending in January, U.S. prices fell 3.9 percent. The U.S. index is 16.5 percent below its April 2007 peak and roughly the same as the May 2004 index level. The FHFA monthly index is calculated using purchase prices of houses backing mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac. For the nine Census Divisions, seasonally adjusted monthly price changes from December to January ranged from -1.3 percent in the Mountain and South Atlantic Divisions to +1.6 percent in the West South Central Division. Monthly index values and appreciation rate estimates for recent periods are provided in the table and graphs on the following pages. Click here for complete historical data. For detailed information concerning the monthly HPI, please see the HPI Frequently Asked Questions (FAQ). The next release will be on April 21, 2011 and will include monthly HPI data for February 2011. ###

The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks.  These government-sponsored enterprises provide more than $5.9 trillion in funding for the U.S. mortgage markets and financial institutions.

Craig Roberts, President of Pennsylvania First Settlement Services LP, is a Certified Land Title Professional (CLTP), past-President of the Pennsylvania Land Title Association, and is a licensed title agent and real estate broker in the Commonwealth of Pennsylvania.

Pennsylvania First Settlement Services is a full-service title insurance agency serving the greater Pocono area of northeastern Pennsylvania.  Its services include title searches, title insurance, real estate settlements, foreclosure research, documents services and short sale assistance.  www.pafirstsettlement.com

Much Ado about... Very Little

The February 2011 Housing Scorecard published by HUD & US Treasury tells the story.  The Obama Administration’s numbers reveal little help is being provided by the much ballyhooed Making Home Affordable federal programs currently in operation to assist distressed homeowners.  Pages of charts and statistics dress it up.  But the truth is of the over 10 million underwater home loans, only 1 in 17 homeowners have found help through HAMP permanent mortgage modifications.

What about those remaining homeowners not helped by HAMP?   Or looking at it statistically, those 16 in 17 that Making Home Affordable didn’t help?   That’s where Realtors come into the picture.  Keep working hard to make those short sales happen.  America’s homeowners need your dedicated service to forestall the avalanche of foreclosures.  Thank you for your service.

Cordially,

Craig Roberts, CLTP

PA First Settlement Services

HUD Press Release

February 2011 Housing Scorecard

“REFORMING AMERICA'S HOUSING FINANCE MARKET”

HUD recently issued a press release outlining the Obama Administration’s plan to reform US housing finance.  According to HUD the plan, entitled “Reforming America’s Housing Finance Market”, its stated objectives are the winding down Fannie Mae and Freddie Mac and help to bring private capital back to the market. 

The Administration’s plan proposes to achieve these objectives by phasing in the following changes:

• Increase Pricing at Fannie Mae and Freddie Mac
• Reduce Conforming Loan Limits
• Increase Down Payment Requirement to 10 Percent
• Return FHA to its Traditional Role

This economic approach seeks to widen the margin in which private capital companies can compete for mortgage business by tightening lending requirements and increasing costs on government loans.

The proposal signals a desire on the part of the federal government to limit public-sector risk and to increase regulation.  However, it is too early in the legislative process to reliably predict the extent to which any of these changes will be implemented.    

In coming weeks you can expect to hear more on housing finance reform as mortgage and real estate sectors perform their analyses of the proposal.

Stay tuned…   CR

Resources:

HUD Press Release

The Plan: "Reforming America's Housing Finance Market"

Major Mortgage Servicers Freeze Foreclosure Cases in 23 States

Bank of America, JP Morgan Chase and GMAC in the last two weeks have announced a moratorium on foreclosure cases pending resolution of paperwork deficiencies.

Those states affected are Connecticut, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont, Wisconsin.

This could place tens of thousands of foreclosure cases in limbo for months or years.

Excerpts from article 

by David Streitfeld (10/1/2010) 

published in the New York Times:  

"The problem for all the lenders that have announced moratoriums stems directly from their attempt to deal with an unprecedented number of foreclosures.

Confronted with so many cases, the lenders tried to process them on a wholesale basis, with the goal of avoiding the expense of a full trial and instead getting summary judgments.

The tool for doing this was the so-called robo-signers, in which midlevel bank executives would sign thousands of affidavits a month attesting that they had personal knowledge that the facts of the case were as presented. The affidavits were prepared by lawyers who were paid a flat fee, which also placed a premium on volume.

When defense lawyers started deposing these robo-signers, they acknowledged that they could not possibly have knowledge of all the cases. The banks say this is a technicality and they will refile the proper affidavits. The defense lawyers say the practice calls the cases, and indeed the entire process, into question."

Vexing Prognostication from Fannie

WASHINGTON, D.C. — Fannie Mae's latest national housing survey finds that most Americans believe the housing market has reached bottom, but they are more cautious about owning a home. 


Seventy percent of Americans think it is a good time to buy a house, compared with 64 percent in a similar survey conducted in January 2010. But 33 percent — up from 30 percent — of all respondents said they would be more likely to rent their next home if they were to move.

Full Story

Fannie Mae Implements Modification Plan for Second Liens

Excerpts from Fannie’s Press Release - Tuesday, 9/21/10 6:12 PM:

“The Second Lien Modification Program (2MP), announced on September 21, 2010... is designed to work in tandem with the Home Affordable Modification Program (HAMP) to create a comprehensive solution to help borrowers achieve greater affordability by lowering payments on both first lien and second lien mortgage loans.”

“All Fannie Mae-approved servicers must participate in 2MP for all eligible Fannie Mae second lien mortgages, and are required to do so no later than January 1, 2011.”

So?!  What does a HAMP modification feature have to do with selling real estate?  Why concern ourselves with workout plans for second mortgages?  Good questions.

The answers lie in the way government works.  Government solutions usually have strings attached and the strings tend to wind in and around anything within reach.  In this instance the tentacles of control may hold a benefit to RE sales. To put this context let’s look at federal activity over the past 26 months:

Jul 2008	FDIC	Intervenes in IndyMac’s insolvency and  inherits Indy’s large portfolio of non- performing mortgages loans.
Aug 2008	FDIC	Introduces loan modification program “for  troubled Indymac borrowers who are  currently behind on their mortgage  payments.”
Oct 2008	Bush Admin	The Emergency Economic Stabilization  Act enacted in response to the sub-prime  mortgage crisis, TARP fund created.
Nov 2008	FDIC	“Mod in a Box” program announced,  based on the IndyMac loan modification  model.
Feb 2009	Obama Admin	Making Home Affordable program  (HAMP) announced, codifying the FDIC’s Mod in a Box model as mandatory for  mortgage servicers under EESA/TARP.
Mar 2009	GSEs	MI Companies delegate authority to  GSEs for approval of loan modifications  under HAMP.
May 2009	HUD	FHA implements Home Affordable  Modification Program.
Nov 2009	US Treasury	Home Affordable Foreclosure Alternatives  (HAFA) program announced, establishing  standard requirements for short sales  and deeds-in-lieu of foreclosure.
Nov 2009	GSEs	MI Companies directed to delegate short  sale approval authority to GSEs.
Sep 2010	Fannie	Second Lien Modification Program (2MP)  announced as enhancement to HAMP.

OK, so much for the history lesson.  What’s the point? 

Simply put – within the Bank-Bailout/HAMP/HAFA arena – one program affects another.  IndyMac’s insolvency leads to Mod in a Box.  Mod in a Box becomes HAMP.  HAMP leads to HAFA, MI delegation to GSEs, and now mandatory reductions of subordinate liens during mortgage modification. 

The US Treasury Department is the hammer and TARP is the anvil upon which financial institutions are drawn into mandatory concessions.  For better or for worse, that’s what is happening.

It doesn’t exist today, but recent history would seem to indicate that in the near future subordinate lienholders will be required to accept short payoffs.  HAFA already includes provision for payment of $3000 to subordinate lienholders.  What’s missing is a mechanism to require subordinate lienholders to accept short payoffs.   Coming soon...

Your thoughts? 

Email me at: croberts@pafirstsettlement.com

2MP News Release

2MP Announcement