In his address on the economy, President Obama announces a plan to offer some kind of refinancing option for homeowners with government-backed mortgages. (We covered the potential plan here and here.)
Now Jaret Seiberg, a research analyst at MF Global (a commodities and derivatives broker), published a short analysis of what the President’s options are, titled, naturally, “Mortgage Refinancing: Evaluating Obama’s Options.”
A Wall Street Journal column by Nick Timiraos does a decent job answering the question “Why is the federal government suing 17 of the largest financial institutions in the world?”
The (very) short answer: These lender sold mortgage bonds to Fannie and Freddie, but misrepresented their quality — you know, the whole ‘AAA rating on a mortgage sold to a guy without a job’ thing.
As part of a settlement with a the New York Department of Financial Services and Banking, Goldman Sachs has agreed to stop robo-signing mortgage paperwork.
As part of the deal, the Goldman subsidiary said it will stop the practice of robo-signing mortgage paperwork. Robo-signing came to light last fall when it was revealed that the largest banks had outsourced mortgage paperwork to processing companies that, in turn, hired unqualified people to sign thousands of mortgage affidavits without reviewing loan documents. The practice is illegal.
Morgan Stanley is really pushing it’s plan — called REBUILD (I’m sure it stands for something cute, but honestly I don’t think it matters) — where investors would buy big blocks of distressed homes, fix ‘em up, and rent ‘em. With something like six million such properties (either in or nearing foreclosure), that’s a lot to work with.
“We believe this framework for a solution would benefit all stakeholders at the expense of none, while being fair and sensitive to the hardships faced by all Americans,” said the company. And if you can’t trust a large global financial services firm, who can you trust?
The idea is that organizations with a large stack of REOs — the housing agencies (e.g., Fannie, Freddie, and FHA) and lenders — would agree to sell those properties in bulk to investors.
Fannie Mae and Freddie Mac have begun collecting appraisal information for any property for which they own the mortgage. Because F&F buy more than 90% of the mortgages on the market, the Uniform Appraisal Dataset will essentially become a nationwide database of property appraisals.
And the two government-sponsored enterprises haven’t decided — or at least haven’t said — what they plan to do with the information.
(As an aside, I wonder if it will be made public, and if it’s something that will eventually make its way into the Realtor Property Resource. But that’s just idle speculation.)
The basic goal is to “improve the quality and consistency of appraisal data” according to Fannie Mae. For one, combined with the forthcoming Uniform Collateral Data Portal (where appraisers will submit their work), it will standardize the terminology. For example, it will eliminate variations in numbers and measures (e.g., “1/4 acre” vs “.25 acre” vs. “10890 sq. ft.”).
You may have heard that HUD has a program to help unemployed homeowners make their mortgage payments — the Emergency Homeowners Loan Program. The EHLP had $1 billion in funding to be used to give interest-free loans of up to $50,000.
The program officially ended on July 27, but HUD found it had money left over. So it’s taking applications through September 15 through its NeighborWorks America housing counselors — until the funds run dry.
Last week we told you about an Obama Administration plan to offer a streamlined process that would allow homeowners to refinance at today’s lower interest rates.
Today (per Housing Wire), analysts at Keefe, Bruyette & Woods investment bank said that remarks made by Fed Chairman Ben Bernanke on August 26 indicate that the Fed would support such a refinance program.
Join your colleagues from the Mid-Atlantic at a Forum on Workforce Housing
Bring Workers Home will explore the nature of the workforce housing challenge in the Mid-Atlantic region and highlight some of the region’s successful housing programs and best practice efforts underway in DC, Maryland, Virginia and Pennsylvania.
The day’s agenda will include:
The FDIC says that only 6.68% of mortgages held by major banks were delinquent in the second quarter of the year — the lowest level in two years.
For the seventh consecutive quarter, the actual amount of loans between 30 days and 90 days delinquent decreased. Today only about $70 billion is in “early-stage delinquency,” the lowest level since the late 2007.
The National Flood Insurance Program expires on September 30, and no, Congress has not yet decided how it’s going to extend the program. According to this article in the Wall Street Journal, there’s unlikely to be a long-term agreement before the expiration date.
Private insurers won’t offer flood insurance to areas where flooding is likely, notably parts of Texas and Florida, so the NFIP was created to reduce reliance on federal disaster aid. The idea was that local communities would create (and enforce) laws to map flood plains and reduce the danger to new properties, and the federal government would offer flood insurance.
Unfortunately, rather than reduce the flood danger, the availability of inexpensive insurance (premiums are about $600 per year) encouraged people to move to flood zones. In 2004, the plan paid out $200 million per year just for “repetitive-loss properties.”