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Foreclosure pact promises more trouble DAVID ROEDER droeder@suntimes.com Last Modified: Feb 12, 2012 02:25AM The foreclosure settlement involving Illinois and 48 other states is much ado about $25 billion, but for homeowners still in a heap of financial trouble, it signifies little besides more pain. The banks involved will like it, and their investors should draw comfort as well. By settling, the five large banks have indemnified themselves against civil lawsuits over robo-signing and faked paperwork. Criminal charges are possible, but hardly likely. The banks get financial certainty as opposed to the prospect of endless litigation. That should help the...

One of the largest companies that provided home foreclosure services to lenders across the nation, DocX, has been indicted on forgery charges by a Missouri grand jury — one of the few criminal actions to follow reports of widespread improprieties against homeowners. A grand jury in Boone County, Mo., handed up an indictment Friday accusing DocX of 136 counts of forgery in the preparation of documents used to evict financially strained borrowers from their homes. Lorraine O. Brown, the company’s founder and former president, was indicted on the same charges. Employees of DocX, a unit of Lender Processing Services of...

Kenneth Robinson has finally been kicked out of the $340,000 home that he had lived in since June for $16. Robinson, 51, lived on Waterford Drive in Flower Mound, Texas, but he did not own or rent the home he claimed he had a right to live in. After the owner abandoned the property, which had been in foreclosure for over a year, and the mortgage company reportedly went out of business, he submitted a $16 filing fee at the local courthouse, claiming the law of "adverse possession" gave him the right to occupy the home. However, a judge in...

It was predictable that President Barack Obama would pander again to entitlement sentiments. This time involves the misguided belief that everyone is entitled to homeownership, even at the government's – the taxpayers' – expense. But the president's audacity is a bit much to take, even for an election year. Mr. Obama wants to effectively bail out borrowers who owe more than their homes are worth by having taxpayers assume the risk of borrowers defaulting. . .

I have heard that the government has started selling lots of foreclosed homes to government approved real estate management firms or property liquidators. 1. Where is more information on this process? 2. Who is getting to bid on lots of homes, how do we find out who is awarded the properties? 3. What are the long term ramifications of this?

Obama Outlines New Housing Refinance PlanBy Mary Bruce Feb 1, 2012 12:56pm **SNIP** While the proposal faces an uphill battle in Congress, Obama said he is not waiting to take action. Announcing a new homeowners’ Bill of Rights and streamlined mortgage form, the president explained that he understands what it’s like to be stumped by all the paperwork. “I remember when Michelle and I bought our first condo, and we were both lawyers. And we’re looking through the forms, and we’re kind of holding it out reading it again: What does this phrase mean? And that’s, you know, for two...

On December 29th, 2011, the Federal Housing Finance Agency (FHFA) acting director Edward Demarco released a statement detailing the increase to the guarantee fee charged by Fannie Mae and Freddie Mac, as part of the Temporary Payroll Tax Cut Continuation Act of 2011. As part of the legislation, FHFA is increasing the guarantee fee by no less than 10 basis points (bp), effective April 1st, 2012. This increase affects all single-family residential mortgages, and the additional 10 bp in fees will be remitted to the U.S. Treasury instead of being retained by the GSEs. Additionally, the minimum initial increase shall...

According to S&P Case-Shiller, The S&P/Case-Shiller index of property values in 20 cities declined 3.7 percent from November 2010 after decreasing 3.4 percent in the year ended in October. If we look at the Case-Shiller 20 City Index (blue) and Bankrate’s 30 year mortgage average rate (orange), you can see the problem. Mortgage rates continue to fall, but housing prices continue to fall with it. Of course, foreclosed properties are still a drag on the housing market. On a month-over-month (MoM) basis, Case-Shiller 20 City index fell -0.7%, more than expected (SA). But if we look at Non Seasonally-Adjusted (NSA)...

When I happened to wake up in the middle of the night last Wednesday and caught the BBC World Service’s live relay of President Obama’s State of the Union address to Congress, two passages had me rubbing my eyes in disbelief. The first came when, to applause, the President spoke about the banking crash which coincided with his barnstorming 2008 election campaign. “The house of cards collapsed,” he recalled. “We learned that mortgages had been sold to people who couldn’t afford or understand them.” He excoriated the banks which had “made huge bets and bonuses with other people’s money”, while...

The Weekly Economic Indicators: Still All Looking GoodNew Deal democrat, The Bonddad BlogJanuary 29,2012First, as to the monthly reports, home sales continued poor, but consumer confidence jumped back further, completely regaining its pre-debt debacle levels. In the rear view mirror department, 4Q 2011 GDP was +2.8% although some internal components were weaker. Those few sources who thought a new recession might begin by the end of 2011 were almost certainly wrong. Turning now to the high frequency weekly indicators: Weekly employment-related data was mixed. The BLS reported that Initial jobless claims rose by 25,000 to 377,000, which is still an...

Professor Brad DeLong at University of California at Berkeley has an interesting blog entitled “Monetary Policy: The Federal Reserve Is Doing It Wrong…” He argues, like Paul Krugman and James Hamilton, that inflation is TOO LOW. Therefore, The Fed should set higher inflation targets in order to increase employment. In other words, like Madonna from the film “Dick Tracy,” they want the Fed to do “More.” But why is The Fed having difficult creating inflation as Krugman, DeLong and Hamilton would like? Do we need MORE monetary intervention or is The Fed out of ammunition? I would argue that the...

Paul Krugman had an interesting blog in his New York Times “Conscience of a Liberal” column entitled “A Tale of Two Bubbles.” In the blog, Krugman points out that there was a Clinton bubble and a Bush bubble – Clinton’s was an equity (dotcom) bubble that burst and Bush’s was a debt (housing/credit) bubble that burst. Krugman’s point is that Clinton’s bubble only harmed equity investors while Bush’s bubble harmed virtually everyone. But if we look more closely at the data, Krugman’s criticism of the Bush Administration (as if Congress had nothing to do with it!), a different Tale can...

<p>At the CNN Florida Republican Presidential debate in Jacksonville on January 26th, Governor Romney attempted to link Speaker Newt Gingrich to the 2007 Housing Crisis by questioning the Speaker’s role as a consultant at the troubled mortgage giant Freddie Mac. He made the same connection in the NBC debate on January 23rd. Governor Romney claimed in the debates that Speaker Gingrich peddled his influence in Washington D.C. to promote Freddie Mac when he should have been blowing the whistle on the government-sponsored entities' practices.</p>

New single-family home sales unexpectedly fell in December for the first time in four months and the median home price dropped, dampening some of the hopes the housing sector will boost the economy this year. The Commerce Department said on Thursday sales decreased 2.2 percent to a seasonally adjusted 307,000-unit annual rate...

New single-family home sales unexpectedly fell in December for the first time in four months and the median home price dropped, dampening some of the hopes the housing sector will boost the economy this year. The Commerce Department said on Thursday sales decreased 2.2 percent to a seasonally adjusted 307,000-unit annual rate. Economists polled by Reuters had forecast sales at a 320,000-unit rate. November's sales pace was revised slightly lower. The housing market remains constrained by high unemployment, falling prices and an oversupply of unsold homes following a bust that triggered the 2007-09 recession. Sales fell in two of the...

WASHINGTON (MarketWatch) — Matt Martin, CEO of Matt Martin Real Estate Management, is eagerly awaiting the introduction of a program that the Obama administration hopes will transform foreclosed properties into rehabilitated rental units and kick-start the economy. He says he’s not alone. “There is a large chunk of capital, billions of dollars, sitting on the sidelines waiting to see what kind of program the government comes up with,” Martin said. At issue is a Federal Housing Finance Agency push to develop a program that is expected to use government financing or guarantees to attract investors to buy up big regional...

Document Shows No Lobbying By Former Speaker ATLANTA - The Gingrich Group, LLC today announced it is releasing a contract written by Freddie Mac for consulting services it contracted with the organization. “Subject to a conversation between our counsel and Freddie Mac, we have received permission to release the attached contract,” said Nancy Desmond, Chairman and CEO of the Gingrich Group. “As noted under the scope of work section on Page 14, the contract was solely for consulting purposes and not lobbying. “Freddie Mac and The Gingrich Group have agreed that this release is limited to the contract alone and...

To pay for the two-month payroll tax cut, a small fee will be levied for a decade on all mortgages sold to Fannie Mae and Freddie Mac. That also makes it harder to overhaul the housing finance system.

(Reuters) - The number of U.S. homes that received a foreclosure filing fell to a four-year low in 2011 as a slowdown in processing hit the market, RealtyTrac said in a report on Thursday. Foreclosure filings, which include default notices, scheduled auctions and bank repossessions, slid by 34 percent in 2011, the lowest level since 2007, just as the housing market was starting to crumble. RealtyTrac said there were filings on 1,887,777 homes last year. Bank seizures of homes fell to 804,423 from 1,050,500 in 2010, also marking the lowest level in four years. "A big part that is inflating...

(Iselin, NJ) -- Two Federal Reserve officials are telegraphing support for more action to invigorate the nation's economy. The president of the New York Federal Reserve Bank wants moves to help the housing market.

Media propagandists continue to advance the Democratic Party line. On December 21, Bloomberg News breathlessly reported, "The leading Republican candidates for president have embraced an explanation of the financial crisis that has been rejected by the chairman of the Federal Reserve, many economists and even three of the four Republicans on the government commission that investigated the meltdown." Reporter David J. Lynch further explained, "Both former House Speaker Newt Gingrich and former Massachusetts Governor Mitt Romney lay much of the blame on U.S. government housing policies, saying they led to the real estate crash that almost brought down the banking...

The U.S. government-run mortgage finance firms Fannie Mae and Freddie Mac could play a bigger role in turning around the battered U.S. housing market, the Federal Reserve told Congress, a call that looks set to run into stiff political opposition. The Fed, in a paper sent to lawmakers on Wednesday, outlined an array of steps that could be taken to help the housing sector, including allowing Fannie and Freddie to provide cheaper mortgages to a broader pool of homeowners. The two companies, the biggest sources of U.S. mortgage funding, were seized by the government in 2008 when they were on...

A white paper (via @carney) sent from Ben Bernanke to the chairs of the Senate and House committees of banking and financial services and released today is not just a subtle nudge at Congress to do something to address lingering weakness in the housing industry. For the generally tight-lipped Federal Reserve, this sounds a lot like a call to action. In the release, the Fed suggests that the government find a way to convert a significant segment of the stock of real estate owned properties (REOs)—essentially, properties held by banks or other institutions after foreclosure—into rentals. While it refrains from...

Call it the Big Selloff—America is headed toward a future in which fewer people own the spaces they call home. The effective homeownership rate, which excludes borrowers whose homes are underwater, stands at 62 percent, down from 69 percent in 2006, according to a 2010 report by the New York Federal Reserve. As more people move from owning to renting, apartment vacancy rates have fallen fast, from 8 percent in 2009 to 5.6 percent in third quarter 2011. That’s pushed up rents in all markets by 2.5 percent, including apartments and single-family homes, to an average of $846 nationwide, according...

Thank you - and your colleagues Edward Lotterman, Frederick Melo and Ruben Rosario - for shedding light on the city of St. Paul/Ramsey County real estate tax "system." That system puzzles me. Should I conclude that it is broken? Perhaps even a less than artful attempt, like mine below, might add to your helpful analysis. Compare the real estate tax system to the "progressive'' income tax. A published schedule indicates the basic tax burden that a particular amount of income will bear. Or, compare the real estate tax to the "regressive'' sales tax. A product purchase price leads to a...

Economy Gaining Momentum, Housing Shows A Pulse By Lucia Mutikani, ReutersDecember 29, 2011 WASHINGTON (Reuters) - New U.S. claims for jobless benefits rose last week but the underlying trend pointed to an improving labor market, while regional factory data showed the economy gaining momentum as the year ended. The growth picture was brightened by other data on Thursday showing pending sales of previously owned homes jumped to a 1-1/2 year high in November, adding to signs of a tentative recovery in the housing market. Indications the economy was wrapping up the year on a much firmer footing than had been...

U.S. home prices fell in most major cities for the second straight month, further evidence that the housing recovery will be bumpy. The Standard & Poor's/Case-Shiller index shows prices dropped in October from September in 19 of the 20 cities tracked. Prices in a majority of cities declined for the second straight month.

Democrats have spent years arguing that private lenders created the housing boom and bust, and that Fannie Mae and Freddie Mac merely came along for the ride. This was always a politically convenient fiction, and now thanks to the unlikely source of the Securities and Exchange Commission we have a trail of evidence showing how the failed mortgage giants turbocharged the crisis. That's the story revealed Friday by the SEC's civil lawsuits against six former Fannie and Freddie executives, including a pair of CEOs. The SEC says the companies defrauded investors because they "knew and approved of misleading statements" about...

“I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes,” President Obama, September 12, 2008 Beginning January 1, 2013, ObamaCare imposes a 3.8% Medicare tax on unearned income of “high-income” taxpayers which could apply to proceeds from the sale of single family homes, townhouses, co-ops, condominiums, and even rental income, depending on your individual circumstances and any capital gains tax exclusions. Importantly, the “high income” thresholds are not...

The headlines were spewing optimism. Reuters: “Jump in U.S. housing starts points to recovery.” Todays announcement of a rally in housing starts (1 unit) of New Privately Owned Housing Units Started – 1 Unit NSA – of up 2.29% in November is grossly misleading. Why? It’s that darned seasonal adjustment again! If we use non-seasonally adjusted data (aka, raw data not tampered with), we find that 1 unit housing starts actually FELL -11.25% in November. Declining 1 unit housing starts signals a recovery?

30 percent of home owners "under water". Home values will drop another 3-5 percent and stay at that level the next few years.

Fortress CEO Mudd among those named in complaintBy Matt Andrejczak, MarketWatch SAN FRANCISCO (MarketWatch) — The Securities and Exchange Commission on Friday accused six former executives at government-backed mortgage giants Fannie Mae and Freddie Mac with securities fraud for their role in understating subprime loan exposure. The SEC alleges they “knew and approved of misleading statements” that claimed the companies had minimal exposure to higher-risk mortgage loans, including subprime loans, at the height of the home mortgage bubble. In separate civil lawsuits against both Fannie /quotes/zigman/226360 FNMA -0.40%  and Freddie /quotes/zigman/226335 FMCC +0.50% , the SEC claims the former executives...

Single-family originations will likely dip in 2012 because of fewer refinances, according to Frank Nothaft, chief economist at Freddie Mac. The market will see a refinance burnout, Nothaft said, with a dwindling pool of eligible borrowers and higher mortgage rates by the second half of 2012. Nothaft projects $1.3 trillion in single-family mortgage originations in 2011, compared to $1.14 trillion in 2012 and $1.07 trillion in 2013. The Freddie Mac projections for 2012 come as a Pew Research Center study showed a record-low number of adults married in the U.S. About 51% of all adults were married as of 2010,...

Data on sales of previously owned U.S. homes from 2007 through October this year will be revised down next week because of double counting, indicating a much weaker housing market than previously thought. The National Association of Realtors said a benchmarking exercise had revealed that some properties were listed more than once, and in some instances, new home sales were also captured. "All the sales and inventory data that have been reported since January 2007 are being downwardly revised. Sales were weaker than people thought," NAR spokesman Walter Malony told Reuters.

Home prices and sales plunge after China's government intentionally slams on the brakes. Some recent buyers stage demonstrations, destroy real estate offices and demand refunds of up to 40%. Falling home values. Debt-strapped borrowers. Real estate woes dogging the economy. It's old news in the United States, but now the air has started to leak from another great housing bubble — in China. Home prices nationwide declined in November for the third straight month, according to an index of values in 100 major cities compiled by the China Index Academy, an independent real estate firm. Average prices in the Shanghai...

The Federal Housing Finance Agency is looking into contracts between the government-sponsored enterprises and mortgage servicers to determine the best step to take when a servicer fails to perform well. In the third quarter, Fannie Mae bought back mortgage servicing rights from Bank of America covering $74 billion in unpaid principal balance, according to its third-quarter financial statement. It was 11% of the Fannie loans being serviced by BofA.

A Georgia Republican is set to introduce on Thursday a bill that would replace Fannie Mae and Freddie Mac with a government-owned corporation that could one day be sold off to the private sector. The proposal from Sen. Johnny Isakson, a former Realtor, is the latest in a series of competing measures to address the fate of the mortgage-finance giants whose government takeover has cost taxpayers $151 billion. (snip) To take the place of Fannie and Freddie, the bill would create a new government agency that would provide guarantees on securities comprised of mortgages that meet designated standards. Unlike Fannie...

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Standard & Poor’s released the latest Case-Shiller data on house prices on Tuesday, and the results weren’t pretty. In the past five years, house prices have declined to 2003 levels, and the average home declined in price by 3.9 percent over the last year alone. National politicians are scrambling to reverse the trend. But the remedy lies in state houses and town halls. Two weeks ago, both Republicans and Democrats in Congress cited the struggling housing market as their reason for extending an “emergency” subsidy for homebuyers. The taxpayer-backed Federal Housing Administration will continue to guarantee mortgages on houses worth...

NEW YORK (CNNMoney) -- Another trading day and another low for Bank of America's stock. Shares of Bank of America dropped more than 3% Tuesday, hitting a new 52-week low of $5.03 -- its lowest level since March 12, 2009. After the close of trading Tuesday, Bank of America was one of 37 financial institutions downgraded by S&P. Beyond the S&P downgrade, trading could become even more complicated in Bank of America's stock, if it falls below $5. Under that threshold, many broker-dealers will not allow investors to buy or short a stock on margin, according to a spokesperson for...

Imagine that you are in the business of lending money. At one time, the business model was simple; money was lent to people who had a high probability of repaying it. The rules were then changed by federal government in the interest of "fairness," with laws passed such as the Community Reinvestment Act (CRA) and federal agencies like Housing & Urban Development (HUD) activated. To stay in business, you must follow the government's dictates. Then the government changes the rules again by changing the percentage of loans that go to certain types of borrowers in the interest of "fairness." Just...

Local lawmakers believe more federal demolition funds must be found to stop the dramatic drop in northeast Ohio property values. Former Cuyahoga County Treasurer Jim Rokakis said he believes the number of condemned homes and buildings in northeast Ohio has ballooned to 30,000. Rokakis blamed foreclosures and irresponsible banks, investment firms and individuals who have walked away or ignored their distressed properties. The growth in vacant houses comes at a time when federal neighborhood stabilization funds, used to demolish these homes, will soon run dry. Rokakis said vacant homes are one of the leading causes of a dramatic drop in...

Webster City, Iowa (CNN) - As Newt Gingrich denies he was paid to lobby Republicans for mortgage giant Freddie Mac, fellow Republican presidential candidate Michele Bachmann on Wednesday challenged Gingrich's denial. "Whether former Speaker Gingrich made $300,000 or whether he made $2 million, the point is that he took money to also influence senior Republicans to be favorable toward Fannie and Freddie," Bachmann said after a campaign event in Webster City, Iowa.

(snip) ...the candidate says he isn't worried his association with the now government-controlled firm makes him look like a Washington "insider" -- if anything, he said Wednesday on CBS News radio, he embraces the label. "There's no question when you serve 20 years in the House and as speaker of the House for four years, you know a fair amount about Washington," Gingrich told CBS News radio correspondent Dan Raviv. "We just tried an amateur for the last three years, and it didn't work very well... The country would be better off with someone determined to change Washington and who...

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We Americans think of ourselves as problem-solvers, but the housing collapse has so far eluded all solutions. Perhaps 10 million homes have gone into foreclosure since 2006; millions more will follow. From their peaks during the real-estate bubble, home prices are down 30 percent, new housing construction has dropped 75 percent and existing home sales are off almost 30 percent. Housing's collapse is one reason the economic recovery is so weak. Construction remains depressed, as are the appliance and furniture sales spurred by home buying. It may be that patience is the only cure. Home prices have to find bottom;...

Concerns are rising that the Federal Housing Administration could run out money if the economy doesn't recover soon, raising the risk the agency would seek a taxpayer bailout for the first time in its 77-year history. Since the mortgage crisis erupted five years ago, the FHA has played a critical role in housing finance as private lenders retreated. It backs about a third of all new mortgages originated for home purchases, up from around 5% in 2006. But, as the FHA prepares to release its annual financial report next week, a forthcoming study by Joseph Gyourko, a real estate and...

WASHINGTON (AP) -- Home prices dropped in nearly three quarters of U.S. cities over the summer, dragged down by a decline in buyer interest and a high number of foreclosures. The National Association of Realtors said Wednesday that the median price for previously occupied homes fell in the July-September quarter in 111 out of 150 metropolitan areas tracked by the group. Prices are compared with the same quarter from the previous year. Fourteen cities had double-digit declines.