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Entries in Foreclosures (48)

Wednesday
Mar212012

'Whistleblower' Says Mortgage Securitization Still Issue for US Homeowners

Courtesy Minh L. Pham(WASHINGTON) -- Lan Pham, an economist fired by the Congressional Budget Office two years ago, is still asking whether the watchdog agency appeared to "diminish or deny" the problem of foreclosure fraud while providing analysis to Congress.

As lawmakers enter budget season in Washington D.C., and wrangle over House Republicans' new budget blueprint, Pham is hoping to draw more attention to the housing market's woes.

"Why is one of the most powerful government agencies that can determine the direction of the nation's policies appearing to diminish or deny that the issue of mortgage securitization is a problem?" she said.  "If it is a problem, we have $7 trillion in mortgage-backed securities that has brought chaos to homeowners, whether or not they are in foreclosure."

Pham said questions like those have led attorneys general to reach the $25 billion foreclosure abuse deal announced last month, and could affect not just underwater homeowners across the country, but the entire U.S. housing market.

With a Ph.D. from the University of Minnesota, Pham worked for the Congressional Budget Office (CBO) for only two and a half months before she was fired in December 2010.  In Pham's termination letter, her supervisor, Deborah Lucas, CBO's assistant director, said "a number of performance issues are the basis for the decision."

But Pham said she was fired for providing an analysis about the banking sector and foreclosure fraud issues involving mortgage-backed securities and robosigning that she said displeased her bosses.  Pham said the main issues of foreclosure problems relate to securitization, the pooling of mortgages that collateralize mortgage-backed securities, and the Mortgage Electronic Registration System, which has electronic records of ownership on about 65 million mortgages -- about half in the country.

In her first interview since releasing a letter addressed to Sen. Chuck Grassley, R-Iowa, through the website Zero Hedge on Thursday, Pham said she is less concerned with losing her job, but rather with bringing more transparency to her former employer.

"Because you see the losses around the country from those who purchased homes with banks foreclosing on homeowners that don't have the title to the mortgage, this is an issue where financially we're talking about a $7 trillion mortgage-backed securities problem," Pham, who is looking for employment, said.  "To me, talking about my career is just beside the point."

Pham wrote a letter to Grassley, ranking member of the Senate Judiciary Committee, dated Feb. 23, 2011, asking for help and explaining her story and writing that "there is room for doubt" about the perception of the CBO as objective and non-partisan.

[CLICK HERE TO READ HER FULL LETTER]

Copyright 2012 ABC News Radio

Thursday
Mar152012

21 States See Rise in Home Foreclosures

iStockPhoto/Thinkstock(WASHINGTON) -- Although nationwide foreclosure filings dipped 2 percent in February compared to a month earlier, in 21 states foreclosure filings were on the rise, according to RealtyTrac, an online foreclosure marketplace. East Coast and Midwest cities reported sharp increases in foreclosures for the month.

Many homeowners across the United States were experiencing housing woes with one in every 637 housing units hit with a foreclosure filing, according to the report. Some 206,900 U.S. properties had foreclosure notices filed on them in February.

“February’s numbers point to a gradually rising foreclosure tide as some of the barriers that have been holding back foreclosures are removed,” said Brandon Moore, CEO of RealtyTrac said in a statement. “Although national foreclosure activity was pushed lower by decreases in a handful of larger states, 21 states posted annual increases in foreclosure activity, the most states with annual increases since November 2010.

“The foreclosure and mortgage settlement filed in court earlier this week will help pave the way to a properly functioning foreclosure process by providing a clear roadmap for necessary foreclosures,” Moore continued. “That should result in more states posting annual increases in the coming months. Not surprisingly, many of the biggest annual increases in February were in states with the more bureaucratic judicial foreclosure process, which resulted in a larger backlog of foreclosures built up over the last 18 months in those states.”

In the nation’s largest metro areas, 10 out of 20 experienced a hike in foreclosure activity year-over-year. Atlanta, Chicago, Miami, Phoenix and Riverside/San-Bernardino were the metro areas with the highest foreclosure rates.

Here’s a look at Foreclosure Rates in select metro areas:

  • Riverside-San Bernardino (one in 166 housing units)
  • Atlanta (one in 244 housing units)
  • Miami (one in 264 housing units)
  • Chicago (one in 302 housing units)
  • Tampa (one in 315 housing units)
  • Detroit (one in 332 housing units)
  • Los Angeles (one in 353 housing units)
  • Houston (one in 689 housing units)
  • Dallas (one in 724 housing units)
  • Boston (one in 1,403 housing units)
  • Baltimore (one in 1,622 housing units)
  • Minneapolis (one in 580 housing units)
  • New York (one in 3,439 housing units)
  • Philadelphia (one in 828 housing units)
  • Phoenix (one in 259 housing units)
  • Riverside-San Bernardino (one in 166 housing units)
  • San Diego (one in 342 housing units)
  • San Francisco (one in 388 housing units)
  • Seattle (one in 1,229 housing units)
  • St. Louis (one in 669 housing units)
  • Tampa (one in 315 housing units)
  • Washington (one in 1,198 housing units)

Copyright 2012 ABC News Radio

Monday
Mar122012

Florida 14-Year-Old Buys Distressed Home

Shannon Moore(PORT CHARLOTTE, Fla.) -- After Willow Tufano earned $6,000 from antiquing and selling items on Craigslist, the 14-year-old asked her mom if she could invest in half of a short sale in her home state of Florida.

Tufano earned the money from finding free items or deals online or at antique auctions and leftover furniture from foreclosed homes. She re-sells the items or gives them away on the “free” list on Craigslist.  She says she could not have thrived in that business without the support of her parents and grandparents, who drive her around to pick up items.

With her saved money, she didn’t want to buy or barter for another skateboard or Xbox.  Instead she set her sights on a three-bedroom short sale of $12,000 that reportedly was worth about $100,000 at the peak of the housing market.

“If there’s one thing I want people to know, it’s that your age does not matter,” Tufalo told ABC News. "If I can inspire another person my age, younger, that would mean the world. Whether it’s buying a house, buying a car, or whatever. If you really work for it and put your mind to it you can do what you want to do.”

Tufano’s mother, Shannon Moore, is a broker who owns several rental properties with her husband. When Tufano heard that her mother was considering purchasing the home, she asked her mom if she could buy half of it with the hope of buying the other half eventually. Florida requires a minimum age of 18 to own property.

“She’s always thinking, ‘How can I skin the cat differently?’” her mother said. Tufano helped her mom fix up the home in Port Charlotte, Fla., and even helped the new tenants find a free bed and mattress. Tufano is splitting the proceeds from the rental income with her mom and says she will use that to buy out her mom’s share.

Asked if she was considering a career in real estate, Tufano said she preferred investing. “I’m not so sure about real estate,” she said. “But investing is really cool. You get to see a property that was a mess before and afterward see that it’s beautiful. I suppose with real estate you can connect with people more, but I would probably prefer investing.”

Tufano, who is home-schooled, said her favorite subject is American history, but dislikes algebra because she is “really, really bad at math.”

Copyright 2012 ABC News Radio

Thursday
Feb162012

Foreclosure Filings Jump 3% in January

iStockPhoto/Thinkstock(IRVINE, Calif.) -- The number of U.S. households that received a foreclosure notice rose in January but was down from a year ago, according to the latest report from RealtyTrac.

The foreclosure tracking firm said Thursday that 210,941 properties were hit with foreclosure filings last month, up 3 percent from December.

Despite the increase, foreclosure activity was still down 19 percent from January 2011.  RealtyTrac Vice President Daren Blomquist says that downward trend is likely to continue nationally, citing the recent rise on delayed proceedings.

"We are definitely seeing increases in foreclosure activity in some of the states and we believe that's the result of, of lenders finally beginning to push through some of the backlog of foreclosures that have built up over the last year and a half," he says.

"Taking care of this backlog of distressed properties and foreclosures is something that's necessary to really see home prices start trending back higher; as long as we have that shadow inventory of distressed properties hanging over the market, we're not gonna see home prices start trending back upward for the long term," he adds.

Copyright 2012 ABC News Radio

Friday
Feb102012

What the $25B Foreclosure Settlement Means For You

iStockPhoto/Thinkstock(WASHINGTON) -- While the $25 billion foreclosure settlement announced on Thursday is a landmark multi-state deal, it is just a "drop in the bucket" that will help residents of some states more than others, housing advocates say.

The five biggest mortgage servicers, JPMorgan Chase, Citi, Ally Financial, Wells Fargo and Bank of America, have settled, but more lenders could potentially join later.  Under the deal, signed by 49 state attorney generals, 750,000 people could receive checks under the plan and another one million could see the size of their mortgages reduced.

President Obama said the deal could strengthen the overall economy but "by itself will not entirely heal the housing market."

"But this settlement is a start," the president continued.

Gordon Whitman, policy director for PICO National Network of faith-based community organizations, said the deal is "'too small."  The $10 billion in principal reduction compared to $700 billion in negative equity in the U.S. with an outstanding mortgage debt of $8.8 trillion is a "small drop in the bucket of what really needs to be done."

"It needs and will lead to much more significant principle reduction for American homeowners," he said.  "There are a lot of people talking about closure. From our perspective, it's much more logical to think of this as a first step."

The size of the deals per state thus far reflect the commitment of each attorney general, Whitman said.  Homeowners can check the website NationalMortgageSettlement.com for more information by state, except for residents in Oklahoma.

"We think the continued advocacy by the attorney generals is the critical factor to make sure this is just a down payment on a full and fair settlement," Whitman said.

Scott Brown, chief economist with Raymond James, said the one million homeowners who may restructure their mortgages comprise only 10 percent of those underwater. Brown said the deal will not have a large impact on the U.S. economy or consumers.

"Every little bit helps and it will be significant for those restructuring, but it's not going to have a huge impact on the housing sector overall," he said. 

Payments of about $2,000 will be made to about three-quarters of a million households that were foreclosed on through abusive practices, distributed over three years.

"That will be good for those receiving checks, but the impact on overall consumer spending is likely to be relatively small," he said.

Copyright 2012 ABC News Radio

Thursday
Feb092012

Obama: Mortgage Deal Turns the Page on 'Era of Recklessness'

(WASHINGTON) -- President Obama on Thursday said the “landmark” $26 billion settlement between the nation’s largest banks and states would speed relief to homeowners harmed by “plainly irresponsible” mortgage practices and begins, “to turn the page on an era of recklessness that has left so much damage in its wake.”

“Under the terms of this settlement, America’s biggest banks, banks that were rescued by taxpayer dollars, will be required to right these wrongs,” the president said. “These banks will put billions of dollars towards relief for families across the nation. They'll provide refinancing for borrowers that are stuck in high-interest-rate mortgages, they'll reduce loans for families who owe more on their homes than they're worth, and they will deliver some measure of justice for families that have already been victims of abusive practices.”

The president stressed that the deal with the five largest mortgage providers is not enough to restore the housing market.  “I want to be clear: No compensation, no amount of money, no measure of justice is enough to make it right for a family who's had their piece of the American dream wrongly taken from them. And no action, no matter how meaningful, is going to by itself entirely heal the housing market,” he said. “But this settlement is a start.”

The president urged Congress to act on his latest proposal to revive the housing market, which is intended to help homeowners refinance at today’s low mortgage interest rates, even if they owe more than their homes are worth.

“Even with this settlement, there are still millions of responsible homeowners who are out there doing their best, and they need us to do more to help them get back on their feet. We've still got to stoke the fires of our economic recovery, so now is not the time to pull back,” Obama warned.

Copyright 2012 ABC News Radio

Thursday
Feb092012

Feds Announce $25B Foreclosure Abuse Deal

Office of the Maine Attorney General(WASHINGTON) -- Government officials announced on Thursday a record $25 billion settlement with the five biggest banks related to foreclosure abuses, including "robo-signing" of documents.

Among the money allocated will be $1.5 billion distributed nationwide to about 750,000 borrowers who lost their homes to foreclosure. The deal is the largest multi-state settlement since the Tobacco Settlement in 1998, the Department of Justice said.

Five banks -- Wells Fargo, Bank of America, Citigroup, JPMorgan Chase and Ally Financial -- will also have to "work off up to $17 billion in principal reduction and other forms of loan modification relief nationwide," and "provide up to $3 billion in refinancing relief nationwide," according to the settlement.

Attorney General Eric Holder said the deal by 49 state attorneys general, who worked late into the hours of Wednesday night, does not preclude states from pursuing their own suits against the banks.

Holder announced further terms of the deal would be on a website, NationalMortgageSettlement.com, and residents of the states involved should visit the sites of their respective attorneys general.

Department of Housing and Urban Development Secretary Shaun Donovan said the settlement holds banks accountable for abuses against homeowners, which "continued long after people got the keys to their new home."

"No more lost paperwork, no more excuses, no more rhetoric," Donovan continued.

Donovan said the investigation comprised at least 15,000 hours of reviewing thousands of files of Federal Housing Administration insured loans.

Copyright 2012 ABC News Radio

Tuesday
Feb072012

States Agree on $25B Foreclosure 'Robo-Signing' Deal

iStockPhoto/Thinkstock(NEW YORK) -- Officials from more than 40 states have signed a record $25 billion settlement with the five biggest banks related to foreclosure abuses, including "robo-signing" of documents. The practice involves the mass signing of forclosure documents without verifying the acccuracy of the paperwork.

For the past year, President Obama has advocated for a mortgage relief plan with the five biggest mortgage servicers -- Bank of America, JPMorgan Chase, Wells Fargo and Ally Financial --  to settle an investigation of foreclosure abuses.  Evidence of robo-signing foreclosure documents began to show in 2010 during a record national wave of foreclosed homes.

"This enables us to move forward into the very final stages of remaining work.  Federal and state officials, as well as representatives from the banks, continue to address matters that they must complete before finalizing any settlement," Iowa Attorney General Tom Miller said in a statement late Monday.

Several states had previously agreed to a $19 billion settlement that would be used for national mortgage relief. The deal was reported to designate $17 billion to pay for principal reductions and other relief for up to one million borrowers who are behind in payments but owe more than their houses are currently worth, The New York Times reported. The deal would also provide checks of about $2,000 to roughly $750,000 to people who lost homes to forclosure.

However, those settlements would change depending on the number of homeowners between Jan. 1, 2008, and Dec. 31, 2011 who accepted the offer.  Homeowners who participate in the settlement would still have the right to sue the banks, according to Patrick Madigan, the Iowa assistant attorney general, The New York Times reported.

California and New York had expressed interest in joining the deal but were the last major holdouts. 

New York State's attorney general Eric Schneiderman and California's attorney general Kamala Harris had previously said the settlement terms were not adequate. Schneiderman reportedly hopes to investigate the root causes of the financial collapse, and Harris wants stronger measures to benefit individual homeowners.

Copyright 2012 ABC News Radio

Thursday
Jan262012

US Foreclosure Sales Dip Slightly in 3rd Quarter of 2011; Still High

iStockPhoto/Thinkstock(IRVINE, Calif.) -- The percentage of U.S. sales that involved residential homes in some stage of foreclosure dropped in the third quarter of 2011, according to the latest report by RealtyTrac.

The foreclosure tracking firm said Thursday that foreclosure sales fell by 2 percent from the second quarter, from 22 percent to 20 percent.  Compared to the third quarter of 2010, when they accounted for 30 percent of all sales, foreclosure sales were also down.

More than 221,000 homes nationwide were found to be in some stage of foreclosure during the third quarter of last year.  And while that number was down 11 percent from the second quarter and down five percent from the third quarter of 2010, foreclosure sales are still accounting for a large share of the market.

"That 221,000 represents 20 percent of all sales. And so, that's a high level.  In a normal, healthy market we would expect to see 5 percent of all sales be foreclosure-related," said RealtyTrac Vice President Daren Blomquist.

Western states were among the worst hit.

"The top three states in terms of percent of market-share that were foreclosure sales were, number one: Nevada, with 57 percent of all sales there were foreclosure-related.  Number two is California, with 44 percent of all sales being foreclosure-related.  And number three was Arizona, with 43 percent," he said.

But in what may be a promising sign, the average sales price of homes in foreclosure or bank-owned in the third quarter -- $165,322 -- was up 1 percent from the previous quarter.

"That is an indication that we may be getting close to a bottom, in terms of home prices with these foreclosures, which are the properties that are kind of  dragging down the rest of the housing market," Blomquist said.

It is worth noting, however, that the average sales price was down 3 percent from the same time period in 2010.

Copyright 2012 ABC News Radio

Friday
Jan062012

Fed Disagrees with GOP Candidates on Foreclosure Crisis

iStockPhoto/Thinkstock(WASHINGTON) -- Mitt Romney has said the government should let the foreclosure crisis run its course, but that wouldn't help the economy recover, according to a new report by the Federal Reserve that calls on policymakers to take action on the housing front.

“There is scope for policymakers to take action along three dimensions that could ease some of the pressures afflicting the housing market,” the Fed said in a report on the U.S. housing market.

This would involve measures such as, “devising policies that could help facilitate the conversion of foreclosed properties to rental properties -- or supporting a housing finance regime that is less restrictive than today’s, while steering clear of the lax standards that emerged during the last decade.”

The report warns that in the absence of such policies, the downward pressure on the housing market could be prolonged, essentially dragging down the economy.

The housing market remains dismal three years after it crashed. Currently, 12 million mortgages worth $700 billion are underwater.  Since its peak in 2006, housing prices on average have fallen 33 percent, resulting in a loss of $7 trillion to U.S. households.

Yet, there has been little talk of the housing market or how to resolve the ongoing crisis on the campaign trail.

Romney has presented the most talked-about solution thus far: let them “hit the bottom.”

In an interview with the Las Vegas Review Journal in October, the front-runner suggested to not, “try and stop the foreclosure process. Let it run its course and hit the bottom.  Allow investors to buy homes, put renters in them, fix the homes up, and let it turn around and come back up.”

At a debate in Nevada later, he added: “The idea of the federal government running around and saying, 'Hey, we’re going to give you some money for trading in your old car, or we’re going to give you a few thousand bucks for buying a new house, or we’re going to keep banks from foreclosing if you can’t make your payments,' these kind of actions on the part of government haven’t worked.”

Ron Paul advocates a similar hands-off approach.

One point the Federal Reserve makes that may ring better with conservatives: Let Fannie Mae and Freddie Mac take some losses for the betterment of taxpayers.

“Because of their outsized market presence, the GSEs’ [government-sponsored enterprises] actions affect not only their own portfolios, but also the housing market overall,” the report stated. “Some actions that cause greater losses to be sustained by the GSEs in the near term might be in the interest of taxpayers to pursue if those actions result in a quicker and more vigorous economic recovery.”

Copyright 2012 ABC News Radio







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