Entries in homeowners (18)


Rule Would Protect Banks Against Mortgage Borrower Suits

Digital Vision/Thinkstock(NEW YORK) -- A regulatory change under consideration by bureaucrats in Washington would give banks new legal protections against being sued by borrowers.  Mortgage customers, for example -- those deemed most able to repay -- would effectively be prohibited from suing to stop foreclosures.

Kathleen Day, spokesperson for The Center for Responsible Lending, a consumer group, explains that the “legal shield” being contemplated by the Consumer Financial Protection Bureau (CFPB) would serve to implement the overriding purpose of the Dodd-Frank act: to force banks to take into consideration a borrower’s ability to repay when deciding whether to issue them a mortgage.

That assessment would include, for example, a review of a prospective borrower’s employment history and other outstanding credit obligations.

If and when a borrower who had been deemed able to repay were to bring suit to stop a foreclosure of his home, the judge in the case would be compelled to rule against the borrower and in favor of the bank.

It’s easy to see why lenders want such protection.  According to a Wall Street Journal story on the new shield, the seven biggest lenders in the U.S. have had to pay in excess of $76 billion on mortgage-related litigation since the popping of the housing bubble (as estimated by Credit Suisse Group).

Day stresses that the Consumer Financial Protection Bureau has not yet drafted a proposal for the shield.

“It’s just being talked about,” she says.  “It’s something under discussion.”

The CFPB, asked for comment by ABC News, has not responded.

Copyright 2012 ABC News Radio


Mortgage Rates Hit Record Low for Second Week

Digital Vision/Thinkstock(NEW YORK) -- Mortgage rates reached an all-time low for the second consecutive week amid the Federal Reserve’s purchase of securities and “indicators of a weakening economy,” government-sponsored Freddie Mac said Thursday morning.

The weekly average for the 30-year fixed-rate mortgage in the U.S. fell to 3.36 percent for the week ending Oct. 4, down from 3.4 percent last week and 3.94 percent a year ago.

The 15-year fixed-rate mortgage dropped to 2.69 percent from 2.73 percent last week and 3.26 percent a year ago.

Last month, the Federal Reserve announced a stimulus measure of quantitative easing, saying it anticipates low interest rates through mid-2015.

“Fixed mortgage rates fell again this week to all-time record lows due to the mortgage securities purchases by the Federal Reserve and indicators of a weakening economy,” said Frank Nothaft, vice president and chief economist of Freddie Mac, in a statement.

Those economic indicators included a lower-than-expected revision of growth in GDP, down to 1.3 percent for the second quarter.

Also, personal incomes rose only 0.1 percent in August while the increase for July was revised lower.

Pending home sales in August fell 2.6 percent, “well below the market consensus forecast of a slight increase,” Nothaft said.

The low rates are causing a burst in refinancing applications.  The Mortgage Bankers Association announced Wednesday that refinancing applications are at their highest level since April 2009.

But it’s still hard to get a loan -- 40 percent of all refinancing applications fall apart, according to the Mortgage Bankers Association.  Many borrowers do not qualify for new loans because of credit scores or income.  Banks are reluctant to lend because they are worried they may be forced to buy back bad loans from Fannie Mae and Freddie Mac.

Copyright 2012 ABC News Radio


LIBOR Proposals Unlikely to Affect US Borrowers Soon

Digital Vision/Thinkstock(NEW YORK) -- A proposal to revamp the London Interbank Offered Rate, or LIBOR, could restore some confidence in the global interest rate that is widely used for bond yields and mortgage rates in the U.S., analysts say.

The British regulator, the Financial Services Authority, outlined a 10-point plan on Friday that proposed new regulation of the rate, including taking away responsibility from the British Bankers' Authority, which oversees it.

The British bank, Barclays, and other U.S. and British agencies have admitted to submitting false information that is used to set the LIBOR.  Barclays' chief executive Bob Diamond resigned as a result of the scandal that erupted earlier this year.  The bank paid a fine of $453 million to the U.S. Commodity Futures Trading Commission and British regulators.

The BBA sets the LIBOR each morning with estimates from several global banks regarding what it costs them to borrow.

The FSA's review, led by its managing director Martin Wheatley, proposed that banks should be required to provide evidence of their estimates with relevant transactions.

Other banks, including JPMorgan Chase and Citigroup Inc., have been investigated by U.S. regulators for possibly falsifying information.

The BBA said in a statement after the proposal was published that it worked "very closely with the Wheatley Review of LIBOR and believes [Friday's] report is an essential step."

"The BBA has strongly stated the need for greater regulatory oversight of LIBOR, and tougher sanctions for those who try to manipulate it.  The BBA Council has indicated it would support any recommendation that responsibility for LIBOR ... be passed to a new sponsor," the British trade group said in a statement.

Mark D. Luschini, chief investment strategist for the broker-dealer Janney Montgomery Scott, said the various regulatory authorities were trying to restore credibility to the global instrument upon which interest rates and contracts are set.  While it's possible that bankers' false estimates have affected previous interest rates for better or worse, Luschini said the most recent proposals regarding LIBOR are not likely to affect it in the near future.

"That's not likely to be disruptive to bond yields and bond convents already in place.  That would be ridiculous," he said.

If anything, the LIBOR will likely have more regulatory oversight and policing in its calculation "as opposed to the looser formula that allowed for the manipulation that inspired the investigation to begin with," Luschini said.

Copyright 2012 ABC News Radio


Five Tips for Homeowners Considering Solar Energy Systems

iStockphoto/Thinkstock(NEW YORK) -- Don't be fooled by high-profile solar U.S. companies going out of business. Solar system installations are booming and can still help you save on your heating or cooling costs.

The U.S. solar industry had its second-best quarter in history and is expected to install as much solar power in 2012 as the 10 years before 2010, the Solar Energy Industries Association reported Monday.

The industry installed 772 megawatts of solar electric capacity in the second quarter of this year, an increase of 125 percent over the same period last year.

Monique Hanis, spokeswoman for Solar Energy Industries Association, which represents 1,100 companies focused on expanding the U.S. market, said there are about 5,600 U.S. companies -- mostly small businesses -- in all 50 states that provide solar systems across.

This week, the industry is meeting in Orlando, Fla., for the Solar Energy Industries Association annual Solar Power International convention.

Solar system costs have come down dramatically over last few years -- 30 percent since last year -- in part because of the stiff global solar competition, she said.

According to research from the Solar Energy Industries Association, the average price in the second quarter for purchasing solar panels outright was $32,400 for an average-sized system.

Solar water heating systems cost $4,000 to $10,000 depending on the size and technology options.

Third-party financing programs, in major state markets like California, Arizona and Colorado, account for more than 70 percent of total 2012 installations.

Some states offer cash-back programs for installing solar systems on your home or business.  The rebates vary on territory, system size and can be based on performance over the course of five years on a fixed dollar per kilowatt-hour basis.  For residential properties, this can range from 3 cents to 30 cents per kilowatt-hour.

If you lease a solar system, you are locking in a certain rate that you are paying for your power generated by that solar system for 10 years or more.  That rate should be better than what you are currently paying for your electric bill.

Here are five tips if you are considering purchasing a solar system:

1. If you get at least five hours of unobstructed sunlight on your roof expanse each day and have high electricity rates you could be a good candidate for going solar, said Hanis.

2. There are two options for consumers: solar PV, or photovoltaic, and solar water heating.  Solar water heating is a popular choice for pool heating and the payback is often in the first couple years, Hanis said.  Consumer Reports tested solar water heaters in October 2010 and found none saved more than 32 percent over standard electric heaters.

3. Hanis said that consumers should request proposals from at least three contractors like for any home improvement project.  They should also check references and read contracts.

4. If you lease a solar system instead of paying for permanent installation, Hanis said consumers can often breakeven on the first day if there are fewer upfront costs to the installation.  However, consumers are often locked in for 10 years or more in the lease contract.

5. If you think you may sell your home, there may be components in the contract that allow you to transfer the lease to the new owners or to buy out the system that you were previously leasing.

Copyright 2012 ABC News Radio


Homeowner Billed for Neighborhood Streetlights for 25 Years

iStockphoto/Thinkstock(HARTFORD, Conn.) -- A Connecticut woman received a five figure check from Connecticut Light & Power after being incorrectly billed for two neighborhood streetlights for 25 years.

“CL&P said it was always on the bill and up to me to inform them of the mistake,” homeowner Grace Edwards told the Hartford Courant.  “I said, ‘How could I inform you of something I didn’t know about?’”

What Grace Edwards did not know was that a previous homeowner agreed to pay for streetlights on the block.  When Edwards and her husband bought the property, the utility company continued billing the household for the 9500 Lumen HP Sodium and 300 Lumen HP Sodium lamps.

The story first appeared in the Hartford Courant.

Grace Edwards did not learn she was paying $20 a month for the street lamps that illuminated her neighborhood until a prospective buyer requested a history of utility costs, according to the paper.

Edwards was then forced to haggle with the electric company over the billing mistake before it issued a check for $10,491.  The company eventually issued an apology to Edwards.

“Mrs. Edwards received service that is below our standards and we have apologized to her for the error and the inconvenience,” Mitch Gross, a spokesman for Connecticut Light & Power wrote in a statement to ABC News.  “We have reimbursed her in the amount that she was incorrectly billed plus interest, and will be using this case as a learning experience to identify process and customer service improvements to be sure this doesn’t happen again in the future.”

Copyright 2012 ABC News Radio


Delinquent Mortgage Payments Down to Three-Year Low

Hemera Technologies/Thinkstock(NEW YORK) -- More American homeowners are staying on top of their mortgage payments, according to a new report from TransUnion.

The credit reporting firms says just over one in 20 homeowners -- 5.49 percent -- were at least 60 days behind with their mortgage payments during the spring quarter.  That marks the lowest level in three years.

The number is still well above levels seen before the housing bust, but the report is another sign of improvement this year for the struggling housing market.  

Home prices are now rising in most parts of the country.  Mortgage firm Freddie Mac says second-quarter prices rose nearly five percent compared in the first three months of this year.

Copyright 2012 ABC News Radio


Tax Lien Sales: The 'Other' Foreclosure Problem Plaguing Homeowners

iStockphoto/Thinkstock(NEW YORK) -- Homeowners with an outstanding water bill or high property taxes are increasingly discovering why some are more than eager to sell their home to property-hungry investors.

Called the "other" foreclosure crisis, property tax lien sales are enabled by state and local laws that allow the sale of a property through a tax lien foreclosure process if the owner falls behind in property taxes or other bills, like a water bill or even a dental bill.

If homeowners are behind for just a few hundred dollars, their homes can be sold to investors at a tax lien sale for simply the back taxes owed on the property.  If the owner of a $200,000 house fails to buy back the property, for example, it could be sold for as little as $1,200, and then resold for a windfall by the investor.

Annual tax lien sales total about $15 billion in the U.S. and are on the rise because of the weak job market, depressed home values, and an increase in mortgage foreclosures, according to a report released this week by the National Consumer Law Center.

John Rao, staff attorney with the law center and author of the report, "The Other Foreclosure Crisis: Property Tax Lien Sales," said the elderly are the most vulnerable to these types of sales.

"They have owned the home for long time and there's no mortgage company there that will make sure it won't be sold in a tax sale," Rao said.

Rao's main advice about people who are behind in their bills, like property taxes, is to understand the tax lien processes in your state and to seek legal advice, whether paid or pro bono.

"There's a point where you really can lose your house," Rao said.  "If you can afford [legal help], you should do it."

To insure yourself against a tax lien sale, you can ask your mortgager to set up an escrow account for taxes and insurance, so that you will have a monthly payment over time instead of a large tax bill.

Copyright 2012 ABC News Radio


Housing Revival: Fewer Homes Underwater

Creatas/Thinkstock(NEW YORK) -- For the first time since the deep slump began more than five years ago, a new report from the business information and analytics firm Core Logic says fewer Americans have negative equity in their homes.

In the first three months of the year, 11.4 million homeowners, or 23.7 percent of all residential properties with a mortgage, had negative equity.  That compares with 12.1 million properties -- 25.2 percent -- in the fourth quarter of 2011.

Mark Fleming, chief economist at Core Logic, says, “More than 700,000 households have regained buoyancy.”  They’re no longer underwater, and “one of the main reasons why we’ve seen the improvement in negative equity is that house prices have risen.”

Core Logic finds prices have increased most in some deeply distressed housing markets in the West and South, including parts of Florida, Arizona and Nevada.

“In the first quarter of 2012, rebounding home prices, a healthier balance of real estate supply and demand, and a slowing share of distressed sales activity helped to reduce the negative equity share,” says Fleming.

Copyright 2012 ABC News Radio


Mortgage Rates Plummet to New Records

Digital Vision/Thinkstock(NEW YORK) -- If you can get a new mortgage or refinance an existing one, interest rates have fallen to incredible new lows.

For the first time ever, interest on a 15-year loan has dropped below 3 percent, according to data from Freddie Mac.  The rate is down to 2.97 percent this week from 3.04 percent last week.

The average rate on the 30-year loan also hit a new low, falling to 3.75 percent from last week's 3.78 percent.  The figure is the lowest since long-term mortgages began six decades ago.

If the economy doesn’t fall apart in other ways, these low rates may help the housing market as we are now in buying season.

Copyright 2012 ABC News Radio


Obama Heads to Nevada to Claim Progress on Housing

Creatas/Thinkstock(LOS ANGELES) -- President Obama on Friday will visit a Reno, Nev., neighborhood hit hard by the housing crisis to hail a success story in his efforts to turn things around.

Six months ago, from the porch of a Las Vegas home 400 miles away, Obama announced administrative changes to federally-backed mortgage programs to help some struggling homeowners refinance at historic low rates.

The administration now says the move has had a “significant impact on responsible homeowners looking to refinance,” citing a huge influx in refinancing applications and savings on monthly payments for those who are approved. 

In Nevada, where 60 percent of homes are underwater -- more than any other state in the country -- refinancing applications are up 236 percent since the changes Obama implemented in October, according to the Mortgage Bankers Association, which tracks the data. 

Nationwide, the number of applications by homeowners seeking to refinance their mortgages is up 50 percent over the period, the group says.

Obama will meet personally with two homeowners who have been part of the trend -- Val and Paul Keller of Reno -- whose underwater mortgage had previously not been eligible for refinancing, despite their keeping up with monthly payments on a $168,000 mortgage they’d held for 14 years. 

Thanks to changes implemented by the administration, the Kellers were able to refinance last year, saving them $240 a month.

“One of the most effective things that we can do to help more homeowners get back above water -- which can boost our economy and create jobs -- is to help them accelerate the pay-down of their mortgage through a new lower interest rate,” said Housing and Urban Development Secretary Shaun Donovan.  

It’s unclear, however, whether the influx in refinancing applications Obama plans to hail is directly attributable to actions by his administration.  Equally uncertain is whether the majority of those applications are even approved by the lender to result in savings for homeowners.

Neither the administration nor the Mortgage Bankers Association could say how many homeowners have been able to refinance under the new rules as the Kellers have.  And experts conceded that more applications do not necessarily translate to lower rates.

Copyright 2012 ABC News Radio

ABC News Radio