Thursday, October 14, 2010
To secure title insurance on REO sales, Bank of America has agreed to indemnify a major insurer if the title is challenged due to robo-signings and other improper foreclosure processing practices.

"Bank of America and Fidelity National Financial have reached an agreement confirming that Fidelity will provide title insurance on the sale of foreclosed properties," said B of A spokesman Dan Frahm.

Under the agreement, Fidelity will defend the new homeowner in court if a foreclosed owner challenges the title. B of A will cover the costs and, if necessary, any damages awarded to the previous owner.

"Bank of America and Fidelity National are taking this step to facilitate the continued availability of title insurance that is vital to the marketability of foreclosed properties," Frahm said.

The giant bank is seeking similar agreements with other title insurers.

American Land Title Association chief executive Kurt Pfotenhauer welcomed the B of A/Fidelity agreement.

“Title insurers are looking to lenders to provide appropriate indemnities," he said. ALTA also has approached the GSE regulator about title indemnifications.

"We will continue to work with federal and state regulators, Fannie Mae, Freddie Mac and lenders to bring certainty to the marketplace," Pfotenhauer said.

Published in News Blog
Friday, 15 October 2010 00:13

Foreclosure Auctions Hit New Record

RealtyTrac says 372,445 foreclosure auctions were scheduled in July, August and September, while 288,345 properties were repossessed by lenders over the same time period. Overall foreclosure filings edged up to 930,437 in the third quarter, a 4% increase from the previous quarter. One in every 139 homeowners received a foreclosure filing during those three months. Bank repossessions, or REOs, also are on the rise. In September, a record 102,134 homes were taken back by banks. It's the first time repos have topped 100,000 in a single month. The uptick is not expected to last, RealtyTrac CEO James Saccacio said in a statement, because several major loan servicers have halted foreclosure sales pending a review of documents. Nevada had the nation's highest foreclosure rate, up 1% from earlier, for the 15th quarter in a row.

One in every 29 Nevada homes received a foreclosure filing during the third quarter. Looking at total numbers of foreclosures, neighboring California was worst, with 191,016, followed by Florida, Arizona, Illinois and Michigan. Combined, the five states accounted for half of all foreclosures last quarter. Of course, once the moratorium ends, we can expect a new tidal wave of foreclosures. John McGeough, a broker, said that the current foreclosure freeze may give distressed homeowners extra time to do a short sale and avoid having their homes repossessed by the banks. "Foreclosure should be the last resort."

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Published in News Blog
Wednesday, 13 October 2010 18:08

Mortgage Fiasco ...the latest

Ally Financial, previously known as GMAC, the finance arm of General Motors, said Tuesday it has hired outside accounting and legal firms to examine its foreclosure procedures in all 50 states. That effort will not look at individual cases. Ally also said it would review pending foreclosure sales to ensure that all documents are accurate. In addition, Ally had previously announced that it was temporarily suspending evictions and post-foreclosure closings in the 23 states in which judges must sign off before someone loses their home. The company will continue its internal review in those 23 states. Ally Financial said it has found no evidence of any inappropriate foreclosures. Separately, both Wells Fargo and Litton Loan Servicing said Tuesday they were modifying their foreclosure processes. A spokesman for Wells Fargo, one of the nation's largest loan servicers, said the bank is conducting additional reviews of documents, but is not freezing foreclosures. Litton said in a statement that it "has suspended foreclosure proceedings in certain cases while it completes a review of its procedures."
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Published in News Blog
Friday, 16 July 2010 06:00

Voluntary Foreclosure: Pros & Cons

CBS MoneyWatch.com’s Jill Schlesinger discussed the pros and cons of voluntary foreclosure.

Published in News Blog
Wednesday, 28 July 2010 16:23

More Homeowners Selling Short

'Distressed' Property Homeowner?
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The 30-year, fixed-rate mortgage hit its lowest point in more than 50 years. The Freddie Mac Primary Mortgage Market Survey reported the average rate for a 30-year, fixed-rate mortgage at 4.19% with an average 0.8 origination point for the week ending Oct. 14, down from last week's average of 4.27%. A year ago the average was 4.92%. This is the lowest rate the survey has recorded since its inception in 1971. Mortgage rates were last at this level in April 1951, according to Freddie Mac. The Bankrate survey of large banks and thrifts reported the average rate for a 30-year, fixed mortgage is 4.47% with a 0.32 origination point, slightly above the 25-year-old survey's record low of 4.45% posted last month. Rates for 15-year FRMs are falling steeply, setting a new low for Freddie Mac.

The GSE said the rate was down to 3.62% with an average origination point of 0.8. The rate for a 15-year FRM was 4.37% a year earlier. Bankrate said the average rate for 15-year, FRMs of 3.85% is a new record low and down from 3.87% a week earlier. Frank Nothaft, vice president and chief economist at Freddie Mac, attributed the declining rates to the loss of 95,000 nonfarm payroll jobs in September. The GSE said the average for a 5-year, adjustable-rate mortgage is 3.47% with an average 0.6 origination point, down from 4.38% a year ago. The average remained flat with last week. Bankrate reported the average rate for a 5-year, ARM fell last week to 3.62% from 3.64% previously. The one-year Treasury-indexed ARM averaged 3.43% with an average 0.7 point up slightly from 3.4%. At this time last year, the one-year ARM averaged 4.6%.

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Published in News Blog
Friday, 15 October 2010 20:03

WSJ - Foreclosure Disaster Hits Banks

The mortgage-foreclosure crisis spilled into the financial markets on Thursday, driving down bank stocks and weighing on mortgage bonds as investors took a grim view of the potential costs. Shares of U.S. banks fell, while the broader stock market was essentially flat. Bank of America Corp., potentially among the most affected, dropped more than 5%. Bank bonds also fell, and the cost of buying protection against a possible debt default by banks climbed. "The level of uncertainty in the economy is at extraordinarily high levels to begin with," said Jack Scott, chief investment officer at BlackHawk Capital Management, a Charlotte, N.C., money manager that owns mortgage securities. "The foreclosure problem adds another layer of acute uncertainty."

So far, the foreclosure crisis hasn't affected consumer mortgage rates, which remain near record lows. They are closely linked to rates on U.S. Treasurys, which have tumbled in recent months. Until recently, investors hadn't fled financial stocks. If the issues raised about foreclosure practices in recent days are easily resolved technical glitches, with most foreclosures resuming after brief delays, then the impact on most investors would be small. "The [mortgage] market seems to be functioning relatively well, but that could change depending on how we see this play out," said BlackRock Inc. portfolio manager John Vibert. But some fear that it may be difficult to do any foreclosures for a while.

The risk is that foreclosure flaws are so widespread, or the political furor so heated, that the entire process grinds to a halt, as Citigroup analyst Joshua Levin said in a conference call this week. In some cases, that would choke off much of the cash flow used to pay mortgage bondholders. Another concern is that banks could be forced to modify billions of dollars in loans, including reducing principal, which could leave bondholders as big losers. Banks, meanwhile, could be hit with investor lawsuits, and foreclosure delays could bring short-term losses. Some investors are pushing for banks to take back nonperforming mortgages in cases of faulty documentation.

Published in News Blog

(Bloomberg) -- Foreclosure filings in the U.S. rose 16 percent in the first quarter from a year earlier and bank seizures hit a record as lenders stepped up action against delinquent homeowners, according to RealtyTrac Inc.

A total of 932,234 homes, or one out of every 138 households, received a default or auction notice, or were repossessed by banks, the Irvine, California-based firm said today. In March, filings rose 8 percent to the most in any month since RealtyTrac began publishing reports in January 2005.

“The banks are finally working through it,” Rick Sharga, RealtyTrac’s executive vice president for marketing, said in a telephone interview. “We’re seeing a resolution for properties that were in foreclosure but where seizure was delayed.”

Unemployed and “underwater” homeowners, or those who owe more than their property is worth, are driving foreclosures. The U.S. jobless rate was 9.7 percent in March, unchanged for a third month, the Labor Department reported April 2. More than a fifth of mortgaged homes were underwater in the fourth quarter, according to real estate data firm Zillow.com.

Bank repossessions climbed to 257,944 in the quarter. Scheduled auctions totaled 369,491, also the most since RealtyTrac began releasing data.

Published in News Blog
Tuesday, 12 October 2010 23:03

JPMorgan Expanding Mortgage Review

In September, Chase announced a review of 56,000 foreclosure cases in 23 states that require a judge to sign off on a foreclosure. The recent move expands the inspection to states that do not require judicial approval. Under the latest expansion, the foreclosure process will continue while documents are being examined, expected to take a few weeks. In the initial review, Chase requested that the courts not enter judgments until completion of the audit. Without a judgment from a court, those homes cannot be sold. The initial review was announced after the lender discovered that its employees may have signed affidavits on the basis of reviews done by other personnel.

In those 56,000 cases, JPMorgan Chase has asked its local foreclosure attorneys to communicate to courts, affected homeowners and their lawyers. The notification process is underway, a company spokesman said. Banks have come under increasing pressure from lawmakers in recent weeks to review foreclosures or to expand existing reviews. On Friday, Bank of America announced it was halting foreclosure sales in all 50 states as part of a widening investigation into flaws in the process. The bank said the foreclosure process on delinquent borrowers will continue, but it will not proceed to judgment or a foreclosure sale. Ally Financial, previously known as GMAC, the finance arm of General Motors, has said it is temporarily suspending evictions and post-foreclosure closings in states that require judicial review while it conducts a review of documents.
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Published in News Blog
Monday, 11 October 2010 11:23

No Relief For Homeowners

Harry Smith spoke with economics correspondent Rebecca Jarvis about the government program designed to help struggling homeowners.

Published in News Blog
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