Mortgage Rates & Trends: Mortgage Blog

View the lowest rates we have to offer.
Read our RSS Feed Policy

  1. In A Reversal, More Homeowners Pay Credit Cards And Miss Mortgage Payments

    By on March 31, 2011

    pay mortgage or credit card?In a departure from traditional behavior, more homeowners continue to pay their credit card bills while falling behind on mortgage payments.

    Consumers typically paid their mortgages and missed credit card bills during financial troubles, but that pattern revered in the recent recession.
    Experts thought payment behaviors would return to normal when the recession ended. Instead, the trend became even more widespread, finds a study by TransUnion, a company providing credit and information services.

    “The latest data from our study show that the new payment hierarchy has persisted for longer than many industry experts initially believed, and provides evidence that consumers continue to adjust their payment behavior in response to their economic and personal financial environment,” said Sean Reardon, author of the study released yesterday.

    The percentage of consumers current on their credit card payments and delinquent on their mortgages first surpassed the percentage of those current on their mortgages and delinquent on credit cards in the first quarter of 2008. Continue Reading…

    Category: Housing Market

  2. Mortgage Fraud Up In Hard-Hit Housing Markets

    By on March 30, 2011

    mortgage fraud, foreclosure rescue schemes

    Mortgage fraud is increasing where foreclosures are the highest and home values have fallen the most.

    Criminals are gravitating to those distressed housing markets to employ foreclosure rescue schemes and other fraudulent plots such as “flopping” or selling homes at deflated short sale values then quickly selling it for a higher price, according to Interthinx, a California company specializing in detecting and preventing mortgage fraud.

    Mortgage fraud is way up in Nevada, as well as the Chicago area. Nevada had the same fraud risk level as California in late 2009, but since then Nevada has become much riskier. Mortgage fraud in California, meanwhile, has actually decreased, although it remains high, especially in its Central Valley region.

    “This may be due to a migration of fraudsters seeking to take advantage of the more fertile grounds for fraud in Nevada, where the proportion of foreclosure and distressed sales is by far the highest in the nation,” Interthinx states in its 2010 annual mortgage fraud risk report.

    The riskiest states are Nevada, Arizona, California, Michigan, Florida, Colorado, Minnesota, Georgia, Rhode Island and Massachusetts. The District of Columbia, Maryland, New Jersey, Tennessee, Ohio, Illinois, Oregon and Hawaii also have higher than average fraud risks.

    Employment/income and identity fraud risk both increased substantially over the past year. In those types of fraud, borrowers lie to qualify for a loan.

    Lenders and law enforcement officials have largely ignored those loans, believing they are uncommon and rarely default. Instead, they focused on sophisticated criminals trying to defraud lenders in “fraud for profit” schemes.

    However, they were the predominant form of mortgage fraud during the real estate boom, mostly through stated income and low- and no-document programs. Sometimes encouraged by mortgage professionals to lie, millions of borrowers obtained loans they could not afford to repay.

    “When these borrowers began to default en masse,” the report states, “it sparked the mortgage meltdown, which led to the failure of hundreds of financial institutions, the liquidity crisis, and, ultimately, the Great Recession.”

    Going forward, Interthinx warns, they must be identified and addressed with the same urgency as frauds for profit.

    Category: foreclosures

  3. Banks Offer Their Own Plan For Mortgage Servicing

    1 By on March 29, 2011

    Major banks are offering a counter proposal for setting mortgage servicing standards for handling loan modifications and foreclosures.bank mortgage settlement, foreclosures, loan modifications

    According to an article in The Wall Street Journal today, that bank plan includes time lines for processing loan modifications, a third-party review of foreclosures, a single point of contact for homeowners, and online portals where homeowners can check the status of their loan modification application. The proposal notably lacks mentions of mortgage principal write-downs and bank penalties for shoddy mortgage servicing.

    The servicing standards plan is a response to a proposal from the attorneys general and federal agencies. That proposal would limit bank fees, penalize banks for bad mortgage servicing practices, encourage principal writedowns, set strict schedules of loan modifications, and forbid foreclosure proceedings during loan modifications.

    That plan received plenty of criticism. Not just from the large banks, but from community lenders, House Republicans, and even some state attorneys general. Many believe principal writedowns will create a “moral hazard” that will encourage borrowers to default.

    Community banks say it will open the door to cramdowns, or mortgage principal write downs in bankruptcy court, which lenders have long opposed. Among their other complaints, House Republicans say negotiations are trying to do what should be done through legislation.

    Republican AGs in Florida in, Texas, South Carolina, and Virginia say the settlement proposal exceeds the scope of the initial investigation into mortgage servicing practices. Some Democratic AGs are also unhappy with the talks.

    Negotiations will continue this week, the Journal reports. Maintaining a united front will be extremely difficult for the state AGs. They will probably have to drop some of the more controversial initial proposals such as principal writedowns for the talks to go forward. Whether the state AGs and federal agencies will be able to reach a comprehensive agreement is questionable.

    The Office of the Comptroller of the Currency has already broke ranks to seek its own settlement with mortgage servicers.

    Category: foreclosures

  4. Banks Warned About Trading Foreclosed Homes

    By on March 28, 2011

    REO exchanges, foreclosed home sales, REO salesAs banks grapple with growing numbers of foreclosed homes, they’re trying new exchange programs and other novel ways to dispose of foreclosed homes. The problem is that such practices may be ill-advised and even fraudulent and illegal.

    Several companies have started REO exchange programs, asking banks to exchange their foreclosed homes, or REO properties, for performing assets. The companies say their exchange programs will improve balance sheets of banks, but the Office of the Comptroller of the Currency is warning that they could make things worse.

    Banks could get poor or questionable assets in the trades, create legal and accounting problems, lose control of the property, and get stuck with significant upfront and recurring fees.

    “These programs purport to reduce nonperforming assets by exchanging OREO for an interest in another asset, which is represented to be performing,” the OCC warns. “This ‘performing asset’ is often an equity interest in the entity acquiring the OREO or a trade for a large volume of loans such as home equity lines of credit.” Continue Reading…

    Category: foreclosures

  5. Tough Mortgage Lending Criteria Hurting Home Sales

    By on March 25, 2011

    mortgage guidelines, home loan requirementsGetting a mortgage is becoming more difficult for many potential home buyers. That’s one of the reasons why investors are starting to dominate purchases of short sales and bank-owned properties, concludes a survey of real estate agents.

    Investors, typically using cash to buy homes, accounted for 23.5 percent of home purchases in February, an increase from 19.9% percent in just two months, reports the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Cash purchases of homes set a record, reaching 33.7 percent of purchases in February.

    “We are seeing investors come back into the market. One investor told me that one house he wanted came on Wednesday p.m. and had 9 offers by Thursday a.m.,” stated New Jersey real agent participating in survey.

    Mortgage application requirements may get even tougher later this year and next year as the government withdraws its support for the housing market and tougher regulations implements new regulations. For instance, the conforming loan limit for jumbo mortgages in high-cost is scheduled to retreat from $729,750 to $625,000 on Sept. 30 and new regulations will require lenders to keep a stake in riskier, or non-qualified, mortgages. Those changes will probably mean higher mortgage rates and tough qualification requirements for many borrowers. Continue Reading…

    Category: Purchase

  6. Foreclosure, Loan Modification Reform May Stall Due To Lack Of Leadership

    By on March 22, 2011

    A nationwide effort to overhaul how banks foreclose on homes and offer loan modifications may stall due to a lack of leadership. Several federal agencies and all 50 state attorneys general are involved in a potential settlement with the five largest banks that administer most mortgages in the country.

    Leading such a large group would naturally be difficult, but no one is even trying to do that, according to the American Banker.foreclosure reform, bank settlement, loan modifications

    Iowa State Attorney General Tom Miller was supposedly coordinating state and federal officials. Sort of.

    “No body is driving the bus,” Miller said at recent a press conference. “Or to put it more certainly, each agency gets an hour to drive the bus.”

    “There is just no leadership,” an unnamed source told the banking magazine. “It’s not even herding cats, because no one is trying to herd them.”

    Continue Reading…

    Category: foreclosures

  7. Foreclosures May Cost California Communities $4b in Lost Tax Revenue

    By on March 17, 2011

    There is an interesting report from the California Home Defenders League this morning that details the damage foreclosure is doing to California communities.  The report does appear to have a fair amount of bias (note the title: “Home Wreckers: How Wall Street Foreclosures Are Devastating Communities”), so the numbers in it should likely be taken with a grain of salt.  Nevertheless, I still think the report does have some merit and includes some illuminating information.

    The housing market in California is in pretty dire straits.  Approximately one third of California homeowners with mortgages have negative home equity (owe more on their mortgage than their home is worth).  One in five foreclosures in the United States is located in California.

    The first revelation in the report is that foreclosures will cause a decline in home values of $631 billion in California through 2012 ($207 billion in losses for foreclosed homes, and $424 billion in losses for homes near foreclosures).  The estimate is based upon the projection of 2 million foreclosures in California through 2012 (thusfar there have been 1.2 million foreclosures).  The $632 billion estimate is based upon numbers from RealtyTrac that say the average foreclosed house loses 22% of its value, and that houses within 1/8 mile of a foreclosure lose approximately 1% of their value.

    Continue Reading…

    Category: Mortgage Rates

  8. FTC Cracks Down On Foreclosure Fraud Operation

    By on March 16, 2011

    foreclosure scams, loan modification frausAs many homeowners continue to have trouble meeting their mortgage payments, foreclosure scams have proliferated.

    Saying it is cracking down on foreclosure scams, the Federal Trade Commission (FTC) broke up a national operation based in Florida that it says targeted financially distressed consumers using direct mail, the Internet, and telemarketing.  These borrowers were falsely promised loan modifications.

    Giving an idea of how pervasive these foreclosure scams are, the state of Florida foreclosure prevention website, the Hardest Hit Fund, begins by warning about copycat websites. Website visitors, the Hardest Hit Fund website warns, should verify that the website is the official site before providing personal information. Application for and participation in the program is free.

    According to the FTC, the scam operation promised loan modifications even to homeowners whose lenders had already denied their modifications or who had already received foreclosure notices. The scam artists charged up to $2,600, typically ask for half of the fee up-front, claiming a success rate of up to 100 percent. Continue Reading…

    Category: foreclosures

  9. Both Small And Large Banks Blast Foreclosure Settlement From State AGs

    By on March 14, 2011

    banks criticize foreclosure prevention proposalA proposed foreclosure settlement from state attorneys general is drawing attacks from different quarters, including both small and large banks and House Republicans.

    Community banks are blasting the proposal from state AGs and federal regulators as stealth cramdown legislation.

    Prompted by investigations into shoddy foreclosure practices, the “term sheet” would define how major banks offer foreclosure alternatives and complete foreclosures. Among other actions, it would require banks to cut mortgage balances as a first option and open the door to mortgage balances to be reduced in bankruptcies.

    The settlement “will likely cause additional upheaval and confusion,” according to the Independent Community Bankers of America, a trade group representing small banks. “In fact, the term sheet appears to be de facto regulation done outside of both the Congress and the established rule making process thus opening a back door to cramdown.”

    In a cramdown, a bankruptcy judge forces the lender to write down the borrower’s mortgage balance. Continue Reading…

    Category: foreclosures

  10. Mortgage Writedowns Will Make Housing Markets Worse, Argues Bank of America Chief

    2 By on March 9, 2011

    Writing down the principal mortgage balances of troubled homeowners as proposed by state attorneys general is a bad idea and would make matters worse, said Bank of America CEO Brian T. Moynihan. Reducing principal balances for some borrowers would be unfair to homeowners who continue to pay their mortgages despite having mortgages larger than their home values, Moynihan said in an article in The New York Times. It would also encourage homeowners now paying their bills to default on their mortgages, he said. That would cause home values to fall even more.

    Mortgage writedowns are just one aspect of the proposed settlement between state attorneys general and the five largest banks that would change everything how banks handle home foreclosures and loan modifications. As American Banker magazine noted, the settlement, “if implemented as proposed, “would fundamentally change the relationship between servicers, investors and borrowers.”

    Imagine faxing your loan modification to the bank from Wal-Mart for free. Or tracking your loan modification through an online portal. Those are just some of the services and requirements the “term sheet” proposes.

    Banks are not obligated to accept the proposal, but they probably prefer reaching one settlement rather than working with all 50 states plus numerous federal agencies. In addition, they probably wish to put the foreclosure scandal behind them. Negotiations will continue over the coming months, and the outcome will probably be less stringent on banks. Iowa Attorney General Tom Miller, who leading the talks, said he hopes an agreement will be reached in a couple of months. Continue Reading…

    Category: foreclosures

LOOKING TO BUY OR REFINANCE?

Or Call us at 877-868-2503