Delinquency rates on least-risky mortgages more than double
According to a report just released by the Office of the Comptroller of the Currency and the Office of Thrift Supervision, delinquency rates on the least-risky mortgages more than doubled in the first quarter from a year earlier as U.S. efforts to help homeowners failed to keep pace with job losses that pushed more borrowers toward foreclosure.
Prime mortgages 60 days or more past due climbed to 2.9 percent of such loans through March 31 from 1.1 percent at the same point in 2008. First-time foreclosure filings on the loans rose 22 percent from the fourth quarter.
Obama’s program, unveiled Feb. 18, aims to help as many as 4 million homeowners by modifying loans and calls for Fannie Mae and Freddie Mac to refinance mortgages for as many as 5 million borrowers who owe more than their houses are worth. Foreclosure filings surpassed 300,000 for a third straight month in May, according to RealtyTrac Inc., and the U.S. economy has shed about 6 million jobs since the recession began in 2007.
Serious delinquencies on prime loans, which account for two-thirds of all U.S. mortgages, rose to 661,914 in the first quarter from 250,986 a year earlier. Overall, mortgages 60 days or more past due rose 88 percent from last year.
Mortgages modified to help struggling borrowers stay in their homes fail within nine months more than half the time. About 53 percent of mortgages modified in the first quarter of 2008 were 30 or more days delinquent after six months; 63 percent were in default after a year.
About two-thirds of mortgage modifications by servicers used two or more techniques to make loan payments more sustainable. About 70 percent of the workouts added missed payments and penalties to the outstanding balance. About 63 percent involved interest-rate reductions and about 25 percent extended the life of the loan.
About 14 percent of loans modified were initiated by Washington-based Fannie Mae and McLean, Virginia-based Freddie Mac. Private investors accounted for 55 percent, while loans held by national banks made up 31 percent, according to the data, which includes residential mortgages serviced by national banks and federally regulated thrifts.
The data shows 5.9 percent of the 21.8 million Fannie Mae and Freddie Mac loans serviced by national banks or thrifts were at least days 30 days late, in foreclosure or subject to bankruptcy, compared with 3.2 percent a year earlier.
The report covers the performance of 34 million loans totaling $6 trillion, the agencies said.
July 16th Stockton Seminar - How to use you IRA to purchase real estate!
Take Control with a Self-Directed IRA.
Pat Holkesvig and Your Home Team are hosting two FREE seminars on the basics of Self-Directed IRA investing. The
seminars will be at 1 and 6 P.M. on July 16th. We will provide you with the opportunity to understand what you can gain through a
self-directed IRA.
Topics will include:
- What is a Self-Directed IRA?
- What Can A Self-Directed IRA Invest In?
- How do I Buy Real Estate with my IRA
- Should Everyone Do This? How do I Know it is Right for Me?
- What Types of Retirement Accounts can be Moved into Self-Directed Status?
- What Are Prohibited Transactions?
- How do I Transfer my IRA Account?
A question and answer period will follow. Seating is limited. We encourage you to reserve your seat now!
July 16th at 1 or 6 P.M.
Seating is limited. Please reserve your space by sending an email to IRA@Homes-In-Stockton.com.
Include which session you are interested in attending, 1 or 6. P.M.
Our address is:
Partners Real Estate
3461 Brookside Road, Ste B
Stockton, CA 95219
California’s 90 Day Foreclosure Moritorium is a Sham!
Our great state legislature passed a bill providing for a 90 day moratorium on foreclosures. Sounds good right? Truth is that the 90%+ of the mortgages facing foreclosure are being serviced by companies that are exempt from the bill. What was the point of the legislation? Clueless in Sacramento! A list of the exempt servicers follow:
AMERICAN HOME MORTGAGE SERVICING, INC.
AURORA LOAN SERVICES LLC
BAC HOME LOANS SERVICING, LP
BANK OF AMERICA, NA
BENEFICIAL CALIFORNIA INC.
BENEFICIAL FINANCIAL I INC.
CAPITAL FINANCIAL SERVICES, INC.
CARRINGTON MORTGAGE SERVICES, LLC
CHAMPION MORTGAGE COMPANY (NATIONSTAR MORTGAGE LLC, DBA)
CHASE HOME FINANCE LLC
CITIMORTGAGE, INC.
EMC MORTGAGE CORPORATION
FAY SERVICING, LLC
FIRST CALIFORNIA MORTGAGE COMPANY
GMAC MORTGAGE, LLC
GREEN PLANET SERVICING, LLC
H&R BLOCK BANK
HOMECOMINGS FINANCIAL, LLC
HOUSEHOLD FINANCE CORPORATION OF CALIFORNIA
HSBC CREDIT CENTER, INC.
HSBC MORTGAGE CORPORATION
HSBC MORTGAGE SERVICES INC.
HSBC MORTGAGE SERVICES INC.
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
KONDAUR CAPITAL CORPORATION
LITTON LOAN SERVICING LP
OCWEN LOAN SERVICING, LLC
PENNYMAC LOAN SERVICES, LLC
RESIDENTIAL CREDIT SOLUTIONS, INC.
SAXON MORTGAGE SERVICES, INC.
SELECT PORTFOLIO SERVICING, INC.
SELENE FINANCE LP
SPECIALIZED LOAN SERVICING LLC
U.S. BANK NATIONAL ASSOCIATION
VERICREST FINANCIAL, INC.
WALTER MORTGAGE COMPANY
WELLS FARGO BANK, N.A. WELLS FARGO HOME MORTGAGE, WELLS FARGO FINANCIAL
WELLS FARGO BANK, N.A. WELLS FARGO HOME MORTGAGE, WELLS FARGO FINANCIAL, AMERICA’S SERVICING COMPANY
New Study Suggests More Than 25% of Mortgage Defaults Are Strategic!
Current housing policy is attempting to address the needs of home owners facing a cash crunch. Not being addressed however are the homeowners who now are 40 - 60% underwater with their existing mortgages. These homeowners may be able to afford the payment but some are making an economic decision not to. Many have not made a payment for 16 months and have not heard from their lender! Think of the discretionary income! No wonder restaurants and stores still have customers. Consider what will happen once these folks are forced to pay some type of housing expense each month. Could be bad for the local economy. If they decide to do a short sale they may be able to buy again in 2 years. Walk away from 100k -300k in mortgage debt now and still be able to capitalize on the housing turnaround. Great idea from a purely economic standpoint!
Loan Delinquencies Increase in May
According to Lender Processing Services Inc.’s (LPS) Monthly Mortgage Monitor, the spread between loans that are improving and loans that are deteriorating grew to the widest it’s been since November 2008. The deterioration ratio, which compares deteriorating loans against improving loans, stood at 277%. The highest deterioration rates occurred in Nevada, Arizona, Hawaii and California.
The LPS report also shows that servicers are targeting loss mitigation action on those loans that require the most urgent attention. Almost 90% of modifications happened on loans that are at least 90 days past due but that have not been referred to an attorney for foreclosure. The percentage of modifications for 30- and 60-day buckets has remained fairly static since December 2008. Servicers are reluctant to foreclose, as foreclosure starts increased but foreclosure sales remained low, despite the expiration of mortatoria.
Mortgage rates are on the rise
The benchmark 30-year fixed-rate mortgage rose 30 basis points to 5.95%, according to Bankrate.com, while the 15-year fixed-rate rose 31 basis points to 5.37%. In the last 3 weeks the 30-year fixed-rate mortgages have increased from 5.29% to an average 5.59% with an average 0.7 point for the week ending June 11. The 15-year fixed-rate mortgage averaged 5.06 this week, up from last week’s 4.79% average, but still well below the 5.93% average last year at this time. Freddie Mac’s vice president and chief economist says higher mortgage rates are slowing refinancing activity; however, the demand for home purchases hasn’t eased. Adjustable-rate mortgages are also on the rise, now sitting above five percent. Five-year ARMs averaged 5.17% this week, compared to last week’s 4.85% average. One-year ARMs rose from 4.81% to 5.04% this week. All those borrowers waiting for rates to fall even farther, may have missed the window of opportunity.
Are housing prices starting to stablize?
According to the President of Integrated Asset Services, “It’s too soon to call this a turn in the housing market, particularly given all the political and regulatory uncertainties, I think that we’re still in for some difficult spells ahead, but we are seeing a certain kind of pricing equilibrium in several important markets. That’s encouraging for the long term.”
San Diego, Boston, Chicago, and Denver now show price increases in home prices.
In April, the California counties of Monterey, San Bernadino, Ventura, Riverside, Sacramento, Sonoma and King, reported increased home prices. Even San Diego with one of the largest percentage drops since the height of the market, is now reporting stable prices.
However, if interest rates continue to rise this could contribute to foreclosure numbers and the market could decline again.
Obama plan has small impact on US mortgage prepays
It seems that the combination of President Obama’s housing program to boost mortgage modifications and refinancing accompanied by rock-bottom loan rates wasn’t enough to create the desired mortgage bond repayment wave in May.
Wall Street has predicted for months that prepayments would surge as the Obama plan kicked in and mortgage rates hit record lows.
“These prepayment rates were below our expectations,” wrote JPMorgan analysts Thursday night. “We had looked for a greater degree of reactivity, given low rates in March/April and the implementation of the Obama plan. Clearly, the plan is having little impact so far.”
With average 30-year fixed home loan rates at 4.86 percent in May and 4.81 percent in April.
“Credit-impaired borrowers continue to be subject to the tight underwriting standards that the Obama plan is supposed to have eased,” JPMorgan said.
U.S. 30-year loan rates shot up to a nearly six-month high of 5.29 percent in the past week, Freddie Mac said on Thursday, reducing any incentive for many homeowners to refinance.
“We estimate that just 40 percent of the universe has refinancing incentive greater than 50 basis points, down from 70 percent two weeks ago,” JPMorgan said.
“Those anxiously waiting for the first signs of a response to the Home Affordable Refinance Program must be disappointed,” wrote Barclays analysts late Thursday. “With a mere 13 percent pick-up, Fannie Mae 30-year collateral showed no sign of any HARP effect on prepayments.”
FTC Seeks Public Comment on Mortgage Rescue Practices
Now is the chance to have your voice be heard. The Federal Trade Commission (FTC), has announced it is seeking public comment relating to the fairness of loan modification and foreclosure rescue practices.
Public comment will allow the FTC to assess whether rules would be useful in protecting consumers of these services, and the commission is interested in receiving comment on the costs and benefits of prohibiting or restricting the payment of advance fees for loan modification and foreclosure rescue services.
The Mortgage Assistance Relief Services Advance Notice of Proposed Rulemaking has a 45-day public-comment period ending Wednesday, July 15.
In addition, the FTC is seeking comment on a second rule making, the Mortgage Acts and Practices rule making, which addresses activities that occur throughout the life cycle of a mortgage loan: advertising and marketing; origination, including underwriting, loan terms and disclosures; appraisals; and servicing.
The FTC is interested in receiving comments about mortgage servicing, the commission says. The Mortgage Acts and Practices Advance Notice of Proposed Rulemaking has a 60-day public-comment period ending Thursday, July 30.
