Mortgages and Housing: Servicers Matter, One in Five, White House Presses FHFA, DeMarco New Info, Vacation Home Boom, New Kind of Lawsuit?, CFPB and Servicers, Seattle Apartment Glut, Reverse Mortgages, Operation Twist, Airports and Growth, Under-Funded Pensions

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(servicers matter) Guest Post: The Migratory Patterns of Yield-Hungry Investors – Isaac Gradman – Editor’s Note: in this guest post, former bond insurance insider Steve Ruterman discusses important considerations for investing in private label MBS beyond credit risk analysis, including how investors can benefit from understanding the differences in servicer behavior and business models.  Such analysis can be combined with a strategy of selecting bonds that have the potential for significant upside from the enforcement of creditor rights, such as servicer termination and/or loan put-backs, to generate even greater returns for fixed income investors.  – Subprime Shakeout

Obama Administration: One In Five Homeowners Are Underwater – by – … One in five U.S. homeowners have underwater mortgages, according to the March edition of the Obama administration’s "Housing Scorecard," jointly released by the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury.

White House Keeps Pressuring FHFA On Write-Downs – by – The Obama administration is ratcheting up the pressure on the Federal Housing Finance Agency (FHFA) to write down mortgage debt. … For his part, Donovan offered no clue on how the administration would react if DeMarco would not change his current policies. "We’ll have to look at that analysis and understand what his concerns are," Donovan said.
DeMarco Expected to Release New Mortgage Forgiveness Analysis – By Clea Benson and Cheyenne Hopkins – The acting director of the Federal Housing Finance Agency is expected to release an analysis (Tuesday) showing that payments from the Treasury Department would make it more financially feasible for Fannie Mae and Freddie Mac to forgive debt on some troubled mortgages. – Bloomberg BusinessWeek 

Vacation Home Market Booms – by Mike Wheatley – … Last week, the National Association of Realtors said that a survey, first reported in MSNBC, showed sales of vacation homes had jumped by almost 7% during 2011. Why so many second home buyers? Well, at least 33% of those who responded when questioned in the NAR survey pointed to the low cost of real estate right now. Interestingly, of those who purchased a second home, a massive 91% say they plan to rent out their new property, with 71% saying that the potential income from rent was one of the biggest motivations for buying a vacation home. …Realty Biz News 
(new kind of lawsuit?) Study Hits Banks On Foreclosure Maintenance – By Alan Zibel – A consumer-advocate group said in a report Wednesday that a study of foreclosed properties found that banks have higher standards for properties they own in wealthy, predominantly white, neighborhoods than low-income ones, raising a new civil-rights challenge against the mortgage industryWall Street Journal

CFPB considering rules for mortgage servicers – By Ylan Q. Mui – … The rules would require mortgage servicers to warn homeowners before any interest rate adjustments, provide options for delinquent borrowers to avoid foreclosure, investigate errors within 30 days and improve staff accessibility to consumers, among other things. The Consumer Financial Protection Bureau is seeking business and public comment before formally proposing the rules, which are expected to be finalized by next year. … – Washington Post

Seattle Signals Glut Risk as Apartment Construction Rises – By Hui-yong Yu – The biggest surge of Seattle-area apartment construction in a quarter century is threatening to undercut the growth in rents, a trend that’s also emerging in such U.S. cities as Washington and Houston. – Bloomberg

MetLife: Retiring Boomers Aren’t Moving; 12% Would Consider a Reverse Mortgage – by Alyssa Gerace – Reverse Mortgage Daily 

The Fed sold half its short-term notes via Operation Twist – The Fed has now sold over half of its short-term treasury note holdings (sold $269bn with $257bn remaining) as part of the Maturity Extension Program (Operation Twist). The bulk of the purchases have been in the 8-10yr and the 20-30yr buckets. … Either way, at its current pace of Operation Twist the Fed will run out of short term notes about six months from now (roughly around the one-year anniversary of the program) … – Sober Look Blog 
MAPS – America’s Most Important Airport Cities – RICHARD FLORIDA – an interesting look at how airports impact local growth – several views – hattip Susan Kulakowski – The Atlantic Cities
(who will pay? my bet is the taxpayer)

Union Pension Underfunding Time-Bomb Soars By 75% In One Year, Nears $400 Billion – Submitted by Tyler Durden – Zero Hedge

Illinois Admits $83 Billion in Pension Liabilities, $54 Billion in Retiree Health Liabilities, $9 Billion in Current Unpaid Bills; Who is to Blame? – Michael Shedlock – Illinois has combined $137 billion in pension and healthcare liabilities on top of $9 billion in current unpaid bills. Yet, Illinois legislators will not even ask 6-figure pensioners to pick up a portion of their health premiums. – MISH’S Global Economic Trend Analysis


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