President-elect Barack Obama’s nominee for housing secretary pledged Tuesday to mount a more aggressive response to the foreclosure crisis as he prepares to take the helm of an agency under fire for being slow to react to the housing bubble.
Shaun Donovan, the 42-year-old commissioner of New York City’s Department of Housing Preservation and Development, has received acclaim for his leadership of an effort to add 165,000 reasonably priced homes to New York’s ultra-expensive housing stock by 2013.
He will face more sweeping challenges in taking over the Department of Housing and Urban Development, which lawmakers say has failed to respond effectively to the surge of foreclosures and defaults.
“Housing is at the root of the market crisis we are now experiencing, and HUD must be part of the solution,” Donovan said, according to remarks prepared for delivery at his Senate confirmation hearing Tuesday.
Click here to read the entire article at businessweek.com
Uncategorized
foreclosure, Foreclosure Aid, Obama
Fannie Mae earlier today announced new set of National Real Estate Owned (REO) Rental Policies that that could let those renting foreclosed homes to continue living in them.
“Renters in foreclosed properties have often been a casualty of the foreclosure crisis the country is facing,” said Michael Williams, chief operating officer of Fannie Mae. “This policy will allow qualified renters to remain in Fannie Mae-owned properties should they choose to do so, mitigate the disruption of personal lives that foreclosures can cause, and help bring a measure of stability to communities impacted by high foreclosure rates.”
The new policy applies to renters occupying foreclosed properties at the time Fannie Mae acquires the property. Renters occupying any type of single-family property will be eligible including residents of two- to four-unit properties, condos, co-ops, single-family detached homes and manufactured housing. Eligible renters will be offered a new month-to-month lease with Fannie Mae or financial assistance for their transition to new housing should they choose to vacate the property. The properties must meet state laws and local code requirements for a rental property.
You can read the press release here
Uncategorized
Fannie Mae, REO
Reuters is reporting that Fox Business Network is suing the U.S. Federal Reserve in hopes of making public details on financial companies receiving federal funds.
Fox said it made an initial request on Nov. 10 last year under the Freedom of Information Act. The network asked for the identification of the financial institutions receiving funds and details on the collateral provided by these firms between August 2007 and November 2008.
The network made a second request on Nov. 18, asking for more information on financial firms that received lending from Fed programs. It also asked for the amount of collateral held by the Fed as of Nov. 14.
A Fed spokeswoman did not have a comment on the lawsuit.
To read the entire article click here
Mortgage
Feds, Fox, Sue
Legislation that will allow consumers to get a reprieve from foreclosure if they file for bankruptcy is gaining momentum on Capitol Hill. The Helping Families Save Their Homes in Bankruptcy Act, sponsored by U.S. Senator Dick Durbin (D-IL), is opposed by most lenders and industry groups. Citigroup, however, has recently agreed publicly to support the legislation, increasing the chances that it may become law.
For over a year, consumer groups have been calling for legislation that would allow bankruptcy judges to modify home loans for consumers in bankruptcy who meet strict income and expense criteria. Currently, a loan for a homeowner’s principal home cannot be modified, while those for investment properties can. The measure would treat home loans like virtually every type of personal debt, including vacation homes and family farms. It would allow borrowers up to 30 years from the original loan date to repay their mortgages, at a new fixed interest rate. When appropriate, a bankruptcy judge could “cram down” the loan balance to reflect the current property value.
Supporters of the measure point out that it requires no taxpayer funding, and will likely return more money to lenders than allowing more homes to go into foreclosure. Without aggressive action to stem foreclosures, 8.1 million foreclosures are projected in the next five years. That’s one in nine households, or one in six homes with mortgages, according to Credit Suisse research.
Senator Chris Dodd (D-CT), Chairman of the Senate Banking Committee and staunch supporter of Durbin’s proposal, has promised to include the provision in the upcoming economic recovery package.
Loan Modification
Under the settlement, Countrywide and its affiliates agree to modify loans for eligible borrowers so they are better able to keep their homes. Borrowers eligible for loan modifications are those who received either a qualifying sub-prime adjustable rate mortgage or a Pay Option adjustable rate mortgage prior to December 31, 2007 and who meet other specific requirements.
Depending on the type of loan, modifications may include an automatic freeze or reduction in interest rates conversion to fixed-rate loans, or refinancing or reduction of the principal owed. Under the modifications, first-year payments of principal, interest, taxes and insurance will be targeted to equal 34 percent of the borrower’s income.
Read the whole article at whsv.com
Loan Modification
An angry mob of investors and taxpayers is assembling, and they want to see some executives’ heads on pikes. The question for the courts will be, Who was just foolish with our money - and who was lying, cheating, and stealing?
It’s not just the Securities and Exchange Commission, New York State attorney general Andrew Cuomo, and hordes of civil plaintiffs lawyers who want to find out. According to understated disclosures in SEC filings or newspaper reports, federal criminal prosecutors in Manhattan, Brooklyn, Newark, Los Angeles, San Francisco, Seattle, and Alexandria, Va., are all poring over e-mails and other records right now trying to answer that question in regard to high-level officers at such formerly blue-chip companies as Lehman Brothers, AIG, Washington Mutual, Countrywide Financial, Fannie Mae, and Freddie Mac.
To be clear, we’re not talking here about sensational, not conceivably legal, out-and-out Ponzi schemes, like the $50 billion one that former Nasdaq chairman Bernard L. Madoff has been arrested for, or brazen forgery and criminal impersonation, like the $100 million spree that glitzy New York litigator Marc S . Dreier has been accused of. Crimes like those typically have only one of two defenses: (a) “It wasn’t me,” or (b) “Okay, it was me, but I was sleepwalking on Ambien at the time.” This article is, rather, about an entirely different category of accusation. The probes being discussed here concern statements that ultimately proved incorrect, but which reasonable, straight-faced people can, and vigorously do, contend were honest when made.
read the entire article over at money.cnn.com
Uncategorized
Wall Street
A judge on Monday allowed Bernard Madoff to remain confined to his Manhattan penthouse, rejecting a bid to jail the disgraced financier but imposing new restrictions to keep him from mailing any more valuables to family and friends.
In a ruling that provided limited satisfaction to investors wiped out in what may be the largest Ponzi scheme ever, Magistrate Judge Ronald L. Ellis ordered Madoff to take an inventory of the items in his $7 million apartment and submit his outgoing mail to security checks.
Prosecutors said they would ask another judge to jail Madoff while he awaits trial.
“There is a thirst for blood that transcends just those who have been victimized,” said attorney Stephen A. Weiss, who added that some of his several dozen Madoff investors “just want to have this guy’s head.”
Read the entire article here
Uncategorized
Jail, Madoff
ATLANTA — With home mortgage rates in Georgia now down as low as 4.5 percent for a 30-year fixed loan, for Michelle and Mike Herring that means a saving of $200 a month on a tight budget. Their interest rate will go from 5 7/8 percent, which they got just three years ago, to 4 ½ percent today.
“We’ve balanced our budget and we end up with the same amount going in as going out and we break even every month,” Herring said. “You start to analyze this bill and that bill, cut costs here and there. You can set the thermostat lower and it’s not making a big difference.”
But cutting mortgage interest is making a big impact.
Read more…
Mortgage
Mortgage Rates
