“The combined percentage of loans in foreclosure or at least one payment past due was 14.41 percent on a non-seasonally adjusted basis, the highest ever recorded in the MBA delinquency survey.”

Delinquencies Continue to Climb in Latest MBA National Delinquency Survey
MBA – 11/19/2009

Hi Paul,

Can I give the house back and not lender come after me for judgements issue. House is Florida and no longer live there.

Kim (more…)

Yahoo News – Can’t pay the mortgage? You still might be able to stay in your home. Government-controlled mortgage company Fannie Mae is going to give borrowers on the verge of foreclosure the option of renting their homes for a year.

The change announced Thursday could give a temporary break to thousands of homeowners, but critics question whether it will only add to the mushrooming losses at the company, which has received billions in taxpayer money.

The new “Deed for Lease” program will allow homeowners to transfer title to Fannie Mae and sign a one-year lease, with potential month-to-month extensions after that. It also helps save money because the lender does not need to complete the often lengthy and time-consuming foreclosure process.

The program helps “eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities,” Jay Ryan, a Fannie Mae vice president, said in a statement.

It also does less harm to the borrower’s credit record.

“It shows that you put your best effort to work out a solution,” said Gabe del Rio, director of homeownership at Community HousingWorks of San Diego.

However, Mike Himes, director of homeownership services at NeighborWorks Sacramento, said the industry should push harder to modify loans at lower monthly payments. “The preferred option is allowing people to retain ownership,” he said.

Fannie Mae executives said the rental program is designed to help delinquent homeowners who don’t qualify for a loan modification, but still want to stay in their homes.

To qualify, homeowners have to live in the home as the primary residence and prove that they can afford the market rent, which will be established by the management company running the program. Rents are based on current market rates.

The plan is expected to be particularly attractive in places like Phoenix or Orange County, Calif., where homeowners are stuck paying large mortgage bills on properties that are now worth far less than they originally paid. At the same time, rents have been falling in those areas. So by renting the same house, former homeowners could wind up paying far less every month.

In Orange County, for example, the average monthly rent for all apartments was about $1,450 in September, down nearly 8 percent from a year earlier, according to research firm MPF Research. In Phoenix, the average renter paid about $720, also down about 8 percent from last year.

Still, the effort is likely to attract a relatively small number of homeowners.

In the first nine months of the year, Fannie Mae took ownership of nearly 2,000 properties through a process known as a deed-in-lieu of foreclosure. That pales in comparison to the 90,000 foreclosed properties the company repossessed in the period.

Deed-in-lieu works like the new program, allowing homeowners to turn over title to Fannie Mae, but rather than renting, the owners simply walk away.

While Fannie Mae executives say the company’s motives are community-minded, critics say the company is simply gambling that the properties will eventually sell for a higher price. That’s folly, says Peter Schiff, president of Euro Pacific Capital in Darien, Conn., and a longtime bearish investor.

“Taxpayers are now going to own all these houses that (Fannie Mae) should have unloaded,” he said. “It’s going to cost a fortune.”

The announcement came as Fannie Mae asked for an additional $15 billion in government aid after posting another big loss in the third quarter. The mortgage finance company, seized by federal regulators in September 2008, posted a quarterly loss of $19.8 billion, including $883 million in dividends paid to the Treasury Department.

Pessimists like Schiff say the recent stability in the housing market is just temporary, and argue that there is a huge backlog of foreclosed homes that haven’t gone on the market. Refusing to sell those homes, they say, only prolongs the problem.

But other experts say that Fannie Mae’s new policy could make sense, even if prices don’t rebound quickly. The company will get rental income while avoiding costly foreclosure expenses.

It will also help to safeguard the homes, which are less likely to be vandalized when occupied.

“There are a whole lot of costs you avoid,” said Thomas Lawler, a former Fannie Mae economist. “You don’t necessarily have to believe that home prices a year from now will be higher than today.”

Fannie Mae’s sibling company, Freddie Mac, launched a similar effort in March. That policy, however, requires the foreclosure to be completed and only allows month-to-month leases. Freddie Mac declined to detail how many borrowers have participated.

The two companies purchase loans from banks and sell them to investors. Together, they own or guarantee almost 31 million home loans worth about $5.5 trillion, about half of all U.S. mortgages. They have been badly hurt by the housing bust and have required $111 billion in federal aid since being seized by government regulators 14 months ago.

___

To find out whether your home loan is owned by Fannie Mae or Freddie Mac, try these Web sites:

Fannie Mae http://loanlookup.fanniemae.com/loanlookup/

Freddie Mac: http://www.freddiemac.com/mymortgage

I own 3 rental properties which I included in a recent bankruptcy.  The debts were discharged and the lenders received permission to foreclose.  Although I am not liable for the debts, I still own the properties and the lenders have first mortgage liens on them.  There is also a sizable tax lien on them from the IRS. 

It appears that the lenders are content to sit on the liens and the community still requires me, the owner, to upkeep the properties, which is as it should be. I doubt these properties would sell at sheriff’s sale due to the large tax lien which would still be in place even if the 1st mortgages were paid .  The mortgages are for much more than the appraisal values due to the bubble bursting. 

All the properties have PMI on them.  I would think the lenders would simply walk away, release the liens and collect from the PMI company.  Is there any way I can force the lenders to move ahead with whatever action they chose to take?  I have even offered to let them rewrite the loans for a smaller amount and I would still accept the tax liens which I will have to resolve anyway. 

My income is way more than enough to qualify for the mortgages.  I have no other debt due to the discharge.  It seems to me that this would be a good answer for me and the lenders.  They would cut their losses and I would get my properties back at lower principals.  I don’t understand their failure to accept this deal when they are looking at a loss which is much higher.  Can you suggest any resolution or tell me why they may be reluctant to rewrite the loans?

Mel (more…)

I have a Satisfaction of Mortgage recorded in Palm Beach Florida by MERS in conjunction with a short sale of my property. The language reads as follows:

Know all men by these presents: MERS is the owner of and holder of a certain mortgage deed executed by My_Name to MERS bearing Date 01/01/2005 recorded on 01/13/2005 in Official Records Book OR XXX234, Page 999, Instrument # XXX2228899 in the office of the Clerk of the Circuit Court of Palm Beach County State of Florida, securing a certain note in the principal sum of $300,000.00 Dollars, and certain promises and obligations set forth in said mortgage deed, upon the property situated in said State and County hereby acknowledge full payment and satisfaction of said note and mortgage deed, and surrenders the same as canceled, and hereby directs the Clerk of the said Circuit Court to cancel the same of record.

Witnessed sealed notarized etc. and recorded.

Is this a release of my note as well as the mortgage? I have no cancelled note, and have not yet received a 1099C from my “lender”. They reserved the right to pursue a deficiency judgement in their short sale letter. This sure looks like MERS recorded the note as paid in full and satisfied along with the mortgage.

Thanks
Jeff (more…)

I and two others purchased an undeveloped lot in the Florida Panhandle in 2005.  When the loan came up for a balloon payment in 2008, I found my co-owners were unable to pay and one had transferred his interest to the other.

To clear the air, I paid my 1/3rd ($127,500) to the lender and was given a full release from the note in the amount of $382,500 but no certificate of satisfaction or partial release from the mortgage. 

My remaining co-owner entered into a modification agreement with the lender with a new unpaid balance of $255,000 on the note and security instrument which reflects my payment. 

In view of lender’s refusal to cooperate, is it possible to infer a partial release by virtue of the lenders acceptance of my payment and their having released me from the entire note. My question is in anticipation of foreclosure and due to my payment I feel I should share in the foreclosure proceeds. 

Rodney (more…)

National Mortgage News – The business of brokering residential loans has enjoyed a good run — about 25 years by most measurements — but now there are increasing signs that not only are these third-party salesman facing a bleak future, but that they have no future at all.

Recently, David Olson of Wholesale Access made headlines in the industry press when he predicted that by yearend there would be just 15,000 brokerage firms in existence. Mr. Olson, who has made a good living the past two decades studying brokers, cites a number of reasons: restrictions on yield-spread premium payments, new national registration requirements and licensing costs, and a general lack of interest on the largest remaining wholesalers in growing their broker channels. (A few mortgage insurance firms have said they either won’t accept broker loans or put bans on condominium mortgages sourced through them.)

“Chase?” asked Mr. Olson. “They don’t like brokers and are out that channel. Bank of America and Wells are seeing their TPO (third-party origination) volumes going down, down, down.” He added, “Everyone is writing brokers off.”

Three years ago there were 54,000 brokerage firms in existence, which means if Mr. Olson’s prediction comes true, the peak-to-trough decline translates into 72% of the industry going bust over three years, not a pretty picture. Keep in mind, though, that many brokerage firms are small “mom and pops” that employed less than five people. Some were sole proprietor operations.

Every month or so Wholesale Access would hear from 1,000 brokers, picking their brains about the state of the market and reselling that research to some of the largest wholesalers, as well as Fannie Mae and Freddie Mac. But today, Mr. Olson says he’s talking to just a handful of brokers each month and many are “looking for something to do.” Some he said are selling car insurance on the side or doing loss mitigation work.

Yet, Mr. Olson sees a ray of hope in the industry’s future. The chief reason is costs. He and many other mortgage veterans know that it can get expensive keeping full-time loan officers on their books, especially when origination volumes begin to swoon. “Brokering is a form of outsourcing,” he said. “It has to be viewed that way.”

In other words, if a loan doesn’t close, a broker doesn’t get paid by the wholesaler. And because a broker is really just an outsourced employee, it costs the wholesaler nothing in terms of fixed salary costs. Banks and thrifts have to maintain retail branches — another fixed cost.

As for how long it will take the brokerage sector to revive, Mr. Olson is uncertain. There have been scattered reports of regional banks launching small, targeted wholesale divisions, a positive sign for the industry. And recently, Michael Ashley, chief business strategist at Lend America, Melville, N.Y., started to lay the groundwork for a new wholesale channel.

According to Mr. Ashley, there “are still plenty of brokers around that would want to do business if they had a source [of funding].” He said he believes the declining numbers in the Wholesale Access report reflect a “survival of the fittest” dynamic among brokers. In many cases he believes those remaining “know how to responsibly and ethically originate a loan.”

In other words, perhaps all the sector’s “bad actors” have left the building and only the cream of the crop are left. We shall see.

Washington Post – The Federal Housing Administration has been hit so hard by the mortgage crisis that for the first time, the agency’s cash reserves will drop below the minimum level set by Congress, FHA officials said.

The FHA guaranteed about a quarter of all U.S. home loans made this year, and the reserves are meant as a financial cushion to ensure that the agency can cover unexpected losses.

“It’s very serious,” FHA Commissioner David H. Stevens said in an interview. “There’s nothing more serious that we’re addressing right now, outside the housing crisis in general, than this issue.”

Until now, government officials have warned that the agency could be forced to ask Congress for billions of dollars in emergency aid or charge borrowers more for taking out FHA-insured loans if the reserves fell below the required level, equal to 2 percent of all loans guaranteed by the agency.

Both options are politically unpalatable. Congress and the public are weary of bailouts after the government spent hundreds of billions of dollars rescuing banks; insurance companies; automakers; and the mortgage finance giants, Fannie Mae and Freddie Mac. Raising premiums for borrowers could increase the cost of buying a home just as a wounded housing market is showing signs of life.

Stevens said that such drastic actions are not needed. He said he is planning to announce Friday several measures that should help the reserves rebound quickly.

The FHA, which is part of the Department of Housing and Urban Development, insures home mortgages against losses, thus helping prospective borrowers obtain loans. It uses the insurance premiums paid by these borrowers to pay for mortgage defaults. Since its creation in 1934, it has never used taxpayer money to cover losses at its flagship home-buying program. But rapidly rising defaults have burned through the agency’s reserves, raising the prospect that it would have to take dramatic action.

The reserves are meant to ensure that the agency remains solvent and can continue helping people get mortgages, which in turn supports the housing market and wider economy.

An independent audit due out this fall will show that the agency’s reserves will drop below the 2 percent level as of Oct. 1, the start of the new fiscal year, Stevens said.

Although the reserves had remained well above the minimum required level during the housing boom, the audit last year showed they had shrunk to 3 percent as of Sept. 30, compared with 6.4 percent a year earlier. The fund’s value was estimated at $12.9 billion, down from $21.2 billion the previous year.

‘Not Going to Congress’

Earlier this year, HUD Inspector General Kenneth Donohue told a Senate panel that falling below the reserve’s minimum threshold would require an “increase in premiums or congressional appropriation intervention to make up the shortfall.”

But Stevens, who became FHA commissioner in July, said these options are not on the table. “We are absolutely not going to Congress and asking for money for FHA,” he said. “We’re not going to need a special subsidy or special funding of any kind.”

He stressed that the agency plans to take other steps that will help beef up the reserves. Some of these measures address fraudulent loans that can contribute to FHA’s losses.

For one, he will propose that banks and other lenders that do business with the FHA have at least $1 million in capital they can use to repay the agency for losses if they were involved in fraud. Now, they are required only to hold $250,000. Second, he will propose that lenders also take responsibility for any losses due to fraud committed by the mortgage brokers with whom they work.

In an effort to reduce the risks faced by the agency — and thus the potential for losses — Stevens said he plans to hire a chief risk officer by the end of the year. The agency has never had one in its 75-year-history.

Though these changes were in the works before the FHA reviewed the new audit, he said the steps should help fatten up the FHA’s loss reserves faster than projected.

The new audit shows that even without any new measures, the reserves will rebound to the required level within two or three years largely as the result of the recovery in the housing market, Stevens said. This calculation is based on projections of future home prices, interest rates and the volume and credit quality of FHA’s business.

Agency’s Financial Health

The audit appears especially dire because it offers a snapshot of the agency’s financial standing at the depths of a severe recession, and it does not take into account the new loans FHA will insure and the new premiums it will collect, Stevens said. The borrowers receiving recent FHA-backed loans have, on balance, been more creditworthy than those the agency is used to catering to, he said.

And while the reserves are at a historic low, Stevens noted that they represent only part of the money the agency maintains to cover losses on insured mortgages. The agency, on an ongoing basis, pays for losses directly out of a second fund. The reserve fund is intended as a backup should losses exceed forecasts. In total, these two funds had $30.4 billion as of June 30, up from $28.3 billion on Sept. 30, 2008, according to Stevens.

The FHA’s financial health is in the spotlight in part because of its key role in buoying the housing market.

The agency lost much of its relevance during the housing boom when home prices soared and borrowers raced to aggressive subprime lenders. But after the subprime market collapsed, borrowers flocked back to the FHA, the only option for those who lack stellar credit or hefty down payments. Its historic role in backing loans is more crucial now than ever.

The agency does not lend money; it insures lenders against losses. It has captured 23 percent of all new loans made so far this year, up from just 3 percent in 2006.

But the agency’s sudden popularity has alarmed some lawmakers, who regularly question whether the FHA has the resources and expertise to handle its increased workload and avert an avalanche of new defaults.

I got a third on my property right before I refinanced my loan. The first and second were paid but not the third. Would this put that 3rd in first position since it wasn’t paid off?

It was signed and notarized but not recorded until after the refi. (not sure if that makes a difference)

I’d really appreciate your opinion. Thanks!

Carol (more…)

I had hired a company in March Paid them $1500.00 to get a loan modification. Then in June they went out of business. This guy said he would take our loan with him to another firm.

So another attorney filed the papers with Bank of America for the loan modifiction. Basically that was all he did. He told us we could check with Bank of America ourselves. So far there has been nothing.

We went to see a bankruptcy attorney and he said that we need to get this loan modified.

I talked to my Father and he asked me to find out if it was possible if the Bank would settle the loan for 50% of what is owed. Will they do this?

Thanks for any and all help.

Noelle (more…)