Mortgages and Housing: 5 Ways to Hurt Housing, $25 Billion Who Pays?, 8 More Banks fined, FN REO Sales, 3.25% Choke Point, Small Home Builders, Overpriced FCs, Second Liens, Edward Pinto, Homebuilder Charts, HARP on DU, 1.1mm Mods

BillCoppedge_26Nov2011original content selection by MortgageNewsClips.com

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(must read) How To Cripple the Real Estate Market in Five Easy Steps – Charles Hugh Smith – Of Two Minds

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Guest Post: Who Is Really Paying The $25 Billion TBTF Mortgage Settlement – … The major question you should be asking yourself, and the overall premise of this article, is why are non-agency mortgage investors who did no harm being asked to foot the bill for the sins of the TBTF robo-signers?  If you were a bank holding a loan at par, would you rather modify a given loan and take a dollar for dollar capital hit to get a credit towards the $20bil bogey, or modify twice as much of a MBS holders loan that you service (taking no capital hit yourself) and get the same credit?  … – Zero Hedge

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(8 more) 8 US banks for alleged foreclosure abuse – Derek Kravitz, AP Real Estate Writer – The Federal Reserve said Monday that it plans to fine eight additional U.S. bank holding companies for improperly foreclosing on homeowners. The financial firms — EverBank, Goldman Sachs Group, HSBC Holdings PLC, PNC Financial Services Group, MetLife, OneWest Bank, SunTrust Banks and U.S. Bancorp — were not part of last month’s settlement over alleged foreclosure abuses. – Boston.com

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Fannie Mae’s property sales generate investor interest: WSJ – (Reuters) – Some big investors have shown interest in buying foreclosed properties being sold in bulk by Fannie Mae (FNMA.OB), the largest U.S. home funding source, the Wall Street Journal said citing people familiar with the process. … The Journal named New York-based broker-dealer Amherst Securities Group and a fund run by mortgage-bond pioneer Lewis Ranieri as interested bidders. Hedge-fund manager Paulson & Co and private-equity investors Colony Capital LLC are also considering bids, the Journal said. …

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(3.25% choke point) GUNDLACH: Rates Will Keep Rising, But Then They’ll Start Killing The Recovery – Joe Weisenthal – In a Reuters piece, bond god Jeff Gundlach weighs in on the latest interest rates surge. … Now that Treasuries have broken out to higher yields after six months of mind-numbingly low volatility, it is logical to expect the move to higher rates to last more than one week," Gundlach said. "The way things look today I think a move toward 3.25 percent would weaken the economy noticeably." … – Business Insider

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Smaller homebuilders seeing signs of rebound - Wires / AP – Philadelphia Inquirer 

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Fed Study: Overpriced Foreclosures Hiking REO Carrying Costs – BY: CARRIE BAY – Appraisers, lenders, and investors appear to be routinely overestimating the values of homes prior to foreclosure, especially in the weakest housing markets, according to two economists with the Federal Reserve Bank of Cleveland. The Cleveland Fed’s Thomas Fitzpatrick and Stephan Whitaker suggest that more accurate pricing could speed the clearing of REO inventories, save lenders money by reducing the carrying costs associated with bank-owned homes, and bring greater stability to housing markets across the country. – DS News

also this
Banks Worsening Foreclosure Crisis By Overvaluing Homes: StudyThe Huffington Post – By Alexander Eichler

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(contract abrogation) First and Second Lien Holders to Share Losses Through Settlement – BY: ESTHER CHO – Details of the $25 billion settlement involving state and federal officials and the five largest servicers will change how liens are prioritized, and in turn, opponents say, will benefit banks but hurt investors. Typically, in cases involving delinquent loans, the second liens are written off before a first lien takes any losses. Under the settlement, first and second liens will share in the losses equally, with both getting written down proportionally instead of wiping out the second lien, which tends to yield a higher return since it includes a higher risk. – DS News
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Housing policy impedes mortgage market recovery: Edward Pinto – By Kerri Panchuk – Policy makers who built a housing market based on lax underwriting for political purposes are now stalling a housing recovery with aggressive legislation and a failure to let the housing market clean itself up, according to Edward Pinto, resident fellow at the American Enterprise Institute. …  "Much of this effort has focused on rewarding millions of borrowers who overleveraged their homes. Neither massive amounts of government spending nor innumerable government interventions have led to robust economic growth or hastened a housing market recovery. In fact evidence is mounting that a recovery has been impeded." – Housingwire

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(great charts) Homebuilder Blues: NAHB/Wells Fargo Home Builder Ratings March 2012 – … (NAHB) released their latest Housing Market Index (HMI) showing a flattening of most measures in March with the composite HMI index remaining unchanged at 28 while the "buyer traffic" index stayed put at 22. While all indicators have made notable increases as of late, it’s important to note that conditions still remain distressed by historic standards though, the last few months results appears to indicate a major change in the builder sentiment. The new home market will likely not resume any significant form of healthy function until the considerable overhang of inventory is cleared – Paper Money – A US Real Estate Bubble Blog 

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HARP Update: Fannie Mae updates Desktop Underwriter® (DU) – by CalculatedRisk – This is significant … Back in October, the FHFA announced some changes to HARP to allow homeowners with GSE loans and with negative or near negative equity – and who are current on their mortgages – to refinance into lower interest rate loans. The key to this program for the lenders was that the lender was not responsible for any of the representations and warranties associated with the original loan (this is huge for the lenders). The elimination of Reps and warrants for the original loans applies to the automated Desktop Underwriter® (DU) (see Selling Guide Announcement SEL-2011-12) According to Fannie Mae, the updates to Desktop Underwriter® were completed Sunday.

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Permanent Modifications on Fannie Mae and Freddie Mac – Loans Reach 1.1 Million; Loan Mod Performance ImprovesFHFA Press Release

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