In several markets, Bank of America is reporting that it has picked up its pace in moving through its inventory of foreclosed homes faster than it has in the past, The Wall Street Journal reports.
Brian Moynihan, Bank of America Corp.’s chief executive, said at a press conference that in cases where banks can take ownership of the properties quickly and get them cleaned up, they are able to get them back on the market and selling the fastest.
“It moves as fast now as it’s ever moved,” Moynihan said at a press conference.
However, some areas--such as Florida, which is a judicial state for foreclosures--continue to see delays, as foreclosures inch along at a slower pace, Moynihan says.
But, overall, Moynihan says mortgage delinquencies are dropping in its portfolios and that home prices seem to be hovering at “a bottom” as the backlog of unsold homes reaches the market.
Source: “BofA: Foreclosed Homes Selling Faster,” The Wall Street Journal (Nov. 15, 2011)
Wednesday, November 23, 2011
Midwest’s Hot Land Boom: 25% Jump in Values
Farmland continues to climb in the Midwest, with some areas seeing a 25 percent increase in the past year and reaching its highest increase in 30 years, CNNMoney reports from two recent Federal Reserve surveys.
"District farmland values surged to a record high in the third quarter," according to a survey by the Kansas City Federal Reserve, released this week. "Cropland values rose more than 25 percent over the past year, and ranchland values increased 14 percent."
Nebraska alone is reporting about a 40 percent jump in farmland prices compared to last year. Iowa farmland values have soared 31 percent from last year’s third quarter. Also, farmland values in the Chicago district have seen values jump 7 percent from just the previous quarter.
“The surveys indicate that good credit conditions, successful harvests, and elevated levels of farming income helped to contribute to this large surge in an already strong agricultural property market,” CNNMoney reports.
Source: “Farmland Prices in the Midwest Soar,” CNNMoney (Nov. 16, 2011)
"District farmland values surged to a record high in the third quarter," according to a survey by the Kansas City Federal Reserve, released this week. "Cropland values rose more than 25 percent over the past year, and ranchland values increased 14 percent."
Nebraska alone is reporting about a 40 percent jump in farmland prices compared to last year. Iowa farmland values have soared 31 percent from last year’s third quarter. Also, farmland values in the Chicago district have seen values jump 7 percent from just the previous quarter.
“The surveys indicate that good credit conditions, successful harvests, and elevated levels of farming income helped to contribute to this large surge in an already strong agricultural property market,” CNNMoney reports.
Source: “Farmland Prices in the Midwest Soar,” CNNMoney (Nov. 16, 2011)
Raising the Bar on Political Advocacy
The National Association of REALTORS® has seen dramatic increases in both voluntary member investment and participation in its political advocacy efforts over the past year. At the NAR Board of Directors meeting Monday in Anaheim, Calif., several milestones were announced in political fundraising and member mobilization.
Chris Polychron, NAR’s member mobilization liaison, outlined notable successes in the Broker Involvement Program, in which brokers encourage associates’ participation in NAR calls for action.
According to Polychron, there were 1,000 organizations participating in the Broker Involvement Program three years ago. By the end of November, the number of brokers in the program will exceed 10,000. Thanks to that growth, it now accounts for about 49 percent of all responses to NAR calls for action, he said.
"We know they're making a difference in helping us communicate with Congress,” Polychron said. “We've come a long way in a short time. But in the words of Karen Carpenter, 'We've only just begun.' With your help, we're going to make grassroots history going forward."
The REALTORS® Political Action Committee also reported major achievements in 2011. Fifty-one U.S. states and territories met their fair-share fund-raising goal this year. Additionally, there was a 9 percent increase in major RPAC investors from 2010 to 2011, despite real estate being in the midst of a tough market.
Also, RPAC received more than $20,000 from NAR affiliates and nearly $50,000 from NAR staff. Leslie Rouda Smith, RPAC fund-raising chair, expressed gratitude for the commitment to RPAC among NAR members and staff. "Not only do you invest in RPAC, but you work to make RPAC a priority," she said.
This increase in awareness, involvement, and investment toward NAR advocacy is crucial at a time when home ownership incentives, such as the mortgage interest deduction, are threatened by policymakers and pundits looking for solutions to the federal government’s financial woes.
"No one speaks more for property rights and the American home owner than the National Association of REALTORS®,” RPAC Major Investor Liaison Jim Helsel said at the meeting. “It's up to us to shape the future.”
Source: Brian Summerfield, REALTOR® Magazine
Chris Polychron, NAR’s member mobilization liaison, outlined notable successes in the Broker Involvement Program, in which brokers encourage associates’ participation in NAR calls for action.
According to Polychron, there were 1,000 organizations participating in the Broker Involvement Program three years ago. By the end of November, the number of brokers in the program will exceed 10,000. Thanks to that growth, it now accounts for about 49 percent of all responses to NAR calls for action, he said.
"We know they're making a difference in helping us communicate with Congress,” Polychron said. “We've come a long way in a short time. But in the words of Karen Carpenter, 'We've only just begun.' With your help, we're going to make grassroots history going forward."
The REALTORS® Political Action Committee also reported major achievements in 2011. Fifty-one U.S. states and territories met their fair-share fund-raising goal this year. Additionally, there was a 9 percent increase in major RPAC investors from 2010 to 2011, despite real estate being in the midst of a tough market.
Also, RPAC received more than $20,000 from NAR affiliates and nearly $50,000 from NAR staff. Leslie Rouda Smith, RPAC fund-raising chair, expressed gratitude for the commitment to RPAC among NAR members and staff. "Not only do you invest in RPAC, but you work to make RPAC a priority," she said.
This increase in awareness, involvement, and investment toward NAR advocacy is crucial at a time when home ownership incentives, such as the mortgage interest deduction, are threatened by policymakers and pundits looking for solutions to the federal government’s financial woes.
"No one speaks more for property rights and the American home owner than the National Association of REALTORS®,” RPAC Major Investor Liaison Jim Helsel said at the meeting. “It's up to us to shape the future.”
Source: Brian Summerfield, REALTOR® Magazine
Freddie Mac Launches Winter REO Sale
HomeSteps, a Freddie Mac real estate sales unit, kicked off a sales promotion this week to unload some of its inventory of foreclosed homes in several cities.
Its Winter Sales Promotion for owner-occupant buyers includes:
Paying up to 3 percent of the final sales price toward the buyer’s closing costs for initial offers received between Nov. 15 and Jan. 31, 2012. Escrow must be closed on or before March 15, 2012, to qualify.
A $1,000 selling agent bonus is also available for offers received in that timeframe. The bonus is available in 28 states and the District of Columbia, including: Colorado, Connecticut, Delaware, Iowa, Idaho, Illinois, Indiana, Massachusetts, Maryland, Maine, Michigan, Minnesota, Montana, North Dakota, Nebraska, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, South Dakota, Utah, Virginia, Vermont, Wisconsin, West Virginia, and Wyoming.
Two-year Home Protect limited home warranty, which covers such things as the heating, air conditioning, electrical, plumbing, and other major systems and appliances. Home Protect also will offer a discount of up to 30 percent on the purchase of appliances. (For eligibility requirements, visit www.HomeSteps.com/smartbuy.)
For more information on the HomeSteps Winter Sales Promotion, visit www.HomeSteps.com.
Source: Freddie Mac
Its Winter Sales Promotion for owner-occupant buyers includes:
Paying up to 3 percent of the final sales price toward the buyer’s closing costs for initial offers received between Nov. 15 and Jan. 31, 2012. Escrow must be closed on or before March 15, 2012, to qualify.
A $1,000 selling agent bonus is also available for offers received in that timeframe. The bonus is available in 28 states and the District of Columbia, including: Colorado, Connecticut, Delaware, Iowa, Idaho, Illinois, Indiana, Massachusetts, Maryland, Maine, Michigan, Minnesota, Montana, North Dakota, Nebraska, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, South Dakota, Utah, Virginia, Vermont, Wisconsin, West Virginia, and Wyoming.
Two-year Home Protect limited home warranty, which covers such things as the heating, air conditioning, electrical, plumbing, and other major systems and appliances. Home Protect also will offer a discount of up to 30 percent on the purchase of appliances. (For eligibility requirements, visit www.HomeSteps.com/smartbuy.)
For more information on the HomeSteps Winter Sales Promotion, visit www.HomeSteps.com.
Source: Freddie Mac
New York's Baum Law Firm to Close
New York’s largest foreclosure law firm is shutting its doors. Steven J. Baum, PC has found itself embroiled in a PR firestorm, and now, after Fannie Mae and Freddie Mac instructed servicers to pull their business from the firm, it’s closing up shop.
Both GSEs issued notices earlier this month prohibiting servicers from referring new foreclosure cases to the Baum law firm. Fannie Mae followed with a directive Monday telling servicers to start transferring existing cases from Steven J. Baum to other approved firms in New York.
According to media reports, several other large mortgage servicers, such as Bank of America, have also cut the firm off from handling their foreclosure business.
The firm’s principal, Steven Baum, signaled his company was about to go dark late last week in a letter to New York Times columnist Joe Nocera.
“Mr. Nocera – You have destroyed everything and everyone related to Steven J. Baum PC. It took 40 years to build this firm and three weeks to tear down,” Baum wrote to Nocera.
Nocera received a stack of photos from an employee of the Baum law firm which were taken at the company’s 2010 Halloween party. The images depicted staff dressed as distressed homeowners down on their luck, stationed in front of elaborate scenes that “showed an appalling lack of compassion,” according to the employee.
Baum’s letter to Nocera blamed the columnist’s photo expose for the firm’s fall from grace.
But the New York attorney had bigger publicity problems than a Halloween slide show. In early October, the Baum law firm agreed to pay $2 million to end an investigation by the U.S. Department of Justice into its foreclosure practices.
The inquiry focused on whether the firm and its attorneys filed misleading pleadings, affidavits, and mortgage assignments related to foreclosure actions.
The Buffalo News reports attorneys with the Baum law firm have refused to comply with a state statute that went into effect a year ago, requiring lenders’ and servicers’ legal counsel to sign affidavits attesting to the accuracy of documentation used in foreclosure hearings.
The upstate New York publication recounted a court hearing earlier this month in which lawyers with the Baum firm petitioned the judge to declare as “unconstitutional” the state requirement that documents used in a court proceeding be valid and accurate.
The law firm of Steven J. Baum PC filed a notice with the New York State Department of Labor late last week, alerting state authorities that it will be laying off some 80-plus employees.
“There is blood on your hands for this one, Joe,” Steve Baum wrote in a second email to Nocera. “I will never, ever forgive you for this.”
Both GSEs issued notices earlier this month prohibiting servicers from referring new foreclosure cases to the Baum law firm. Fannie Mae followed with a directive Monday telling servicers to start transferring existing cases from Steven J. Baum to other approved firms in New York.
According to media reports, several other large mortgage servicers, such as Bank of America, have also cut the firm off from handling their foreclosure business.
The firm’s principal, Steven Baum, signaled his company was about to go dark late last week in a letter to New York Times columnist Joe Nocera.
“Mr. Nocera – You have destroyed everything and everyone related to Steven J. Baum PC. It took 40 years to build this firm and three weeks to tear down,” Baum wrote to Nocera.
Nocera received a stack of photos from an employee of the Baum law firm which were taken at the company’s 2010 Halloween party. The images depicted staff dressed as distressed homeowners down on their luck, stationed in front of elaborate scenes that “showed an appalling lack of compassion,” according to the employee.
Baum’s letter to Nocera blamed the columnist’s photo expose for the firm’s fall from grace.
But the New York attorney had bigger publicity problems than a Halloween slide show. In early October, the Baum law firm agreed to pay $2 million to end an investigation by the U.S. Department of Justice into its foreclosure practices.
The inquiry focused on whether the firm and its attorneys filed misleading pleadings, affidavits, and mortgage assignments related to foreclosure actions.
The Buffalo News reports attorneys with the Baum law firm have refused to comply with a state statute that went into effect a year ago, requiring lenders’ and servicers’ legal counsel to sign affidavits attesting to the accuracy of documentation used in foreclosure hearings.
The upstate New York publication recounted a court hearing earlier this month in which lawyers with the Baum firm petitioned the judge to declare as “unconstitutional” the state requirement that documents used in a court proceeding be valid and accurate.
The law firm of Steven J. Baum PC filed a notice with the New York State Department of Labor late last week, alerting state authorities that it will be laying off some 80-plus employees.
“There is blood on your hands for this one, Joe,” Steve Baum wrote in a second email to Nocera. “I will never, ever forgive you for this.”
OCC Releases Status Report on Fixing Deficient Foreclosure Practices
The Office of the Comptroller of the Currency (OCC) issued a report Tuesday on actions taken to correct deficiencies in mortgage servicing and foreclosure processing by the 12 national banks and federal savings associations it oversees.
The report outlines progress made by the companies to comply with the consent orders issued in April 2011 in response to regulators’ investigation into alleged robo-signing practices.
“Work is well under way on the actions necessary to comply with the consent orders,” the OCC said in its report. “Efforts to correct deficiencies in foreclosure processes, management oversight, and internal audit are furthest advanced.”
Mortgage servicers under the OCC’s jurisdiction include: Aurora Bank, Bank of America, Citibank, EverBank, HSBC, JPMorgan Chase, MetLife Bank, OneWest Bank, PNC, Sovereign Bank, U.S. Bank, and Wells Fargo.
The Federal Reserve has supervisory responsibility over the two other servicers subject to the April regulatory consent orders – Ally Financial and SunTrust.
A key component of the consent orders involves independent reviews of any case subject to foreclosure during the 2009 and 2010 calendar years. Servicers submitted their engagement letters for independent consultants, as well as action plans to the OCC in July. The OCC has reviewed and accepted proposals submitted by all 12 of its wards, and made the engagement letters public on its website.
OCC officials note that during the selection process, regulators rejected some proposed consultants and law firms to avoid potential conflicts of interest.
The independent consultants for each servicer are:
AllonHill for Aurora Bank
Clayton Services for EverBank
Deloitte & Touche for JPMorgan Chase
Ernst & Young for HSBC and MetLife
Navigant Consulting for OneWest
PricewaterhouseCoopers for Citibank and US Bank
Promontory Financial Group for BofA, PNC, and Wells Fargo
Treliant Risk Advisors for Sovereign Bank
The engagement letters describe how the independent consultants will conduct their file reviews and claims processes to identify borrowers who suffered financial injury as a result of procedural deficiencies.
The letters include language stipulating that consultants will take direction from the OCC and specifically prohibiting servicers from overseeing, directing, or supervising the reviews. The OCC says it is working to ensure a consistent process for all servicers.
An integrated claims processor has already begun mailing letters to more than 4 million borrowers who were in foreclosure at any point during the 2009-2010 timeframe. Those mailings will continue through the end of the year. IndependentForeclosureReview.com and a toll-free phone number (1-888-952-9105) were also launched on November 1st to provide information about the reviews and claims process.
Borrowers who believe they were hurt financially as a result of servicer errors or deficiencies in the foreclosure processes may request a review of their case. Requests for review must be received by April 30, 2012.
In addition to the coordinated, integrated claims process, independent consultants began reviewing certain files in October based on criteria outlined in their engagement letters and accepted by the OCC.
The federal regulator says reviews are expected to take several months to complete.
Under the consent orders, servicers are also required to correct what regulators describe as “deficient and unsafe or unsound practices” in their mortgage servicing activities, as well as institute stronger management procedures for third-party service providers, and implement tighter controls over activities related to the electronic registry MERS.
The OCC says each servicer has already established policies and procedures for providing single points of contact (SPOC) to assist borrowers throughout the loan modification and foreclosure processes. All servicers have also implemented controls to prevent “dual-tracking” of loans to ensure no foreclosure occurs when a borrower’s loan has been approved for modification on a trial or permanent basis.
According to the OCC, much of the work to correct identified weaknesses in foreclosure policies, procedures, controls, and audit processes will be “substantially complete” in the first part of 2012, but other longer term initiatives will continue through the balance of 2012.
The report outlines progress made by the companies to comply with the consent orders issued in April 2011 in response to regulators’ investigation into alleged robo-signing practices.
“Work is well under way on the actions necessary to comply with the consent orders,” the OCC said in its report. “Efforts to correct deficiencies in foreclosure processes, management oversight, and internal audit are furthest advanced.”
Mortgage servicers under the OCC’s jurisdiction include: Aurora Bank, Bank of America, Citibank, EverBank, HSBC, JPMorgan Chase, MetLife Bank, OneWest Bank, PNC, Sovereign Bank, U.S. Bank, and Wells Fargo.
The Federal Reserve has supervisory responsibility over the two other servicers subject to the April regulatory consent orders – Ally Financial and SunTrust.
A key component of the consent orders involves independent reviews of any case subject to foreclosure during the 2009 and 2010 calendar years. Servicers submitted their engagement letters for independent consultants, as well as action plans to the OCC in July. The OCC has reviewed and accepted proposals submitted by all 12 of its wards, and made the engagement letters public on its website.
OCC officials note that during the selection process, regulators rejected some proposed consultants and law firms to avoid potential conflicts of interest.
The independent consultants for each servicer are:
AllonHill for Aurora Bank
Clayton Services for EverBank
Deloitte & Touche for JPMorgan Chase
Ernst & Young for HSBC and MetLife
Navigant Consulting for OneWest
PricewaterhouseCoopers for Citibank and US Bank
Promontory Financial Group for BofA, PNC, and Wells Fargo
Treliant Risk Advisors for Sovereign Bank
The engagement letters describe how the independent consultants will conduct their file reviews and claims processes to identify borrowers who suffered financial injury as a result of procedural deficiencies.
The letters include language stipulating that consultants will take direction from the OCC and specifically prohibiting servicers from overseeing, directing, or supervising the reviews. The OCC says it is working to ensure a consistent process for all servicers.
An integrated claims processor has already begun mailing letters to more than 4 million borrowers who were in foreclosure at any point during the 2009-2010 timeframe. Those mailings will continue through the end of the year. IndependentForeclosureReview.com and a toll-free phone number (1-888-952-9105) were also launched on November 1st to provide information about the reviews and claims process.
Borrowers who believe they were hurt financially as a result of servicer errors or deficiencies in the foreclosure processes may request a review of their case. Requests for review must be received by April 30, 2012.
In addition to the coordinated, integrated claims process, independent consultants began reviewing certain files in October based on criteria outlined in their engagement letters and accepted by the OCC.
The federal regulator says reviews are expected to take several months to complete.
Under the consent orders, servicers are also required to correct what regulators describe as “deficient and unsafe or unsound practices” in their mortgage servicing activities, as well as institute stronger management procedures for third-party service providers, and implement tighter controls over activities related to the electronic registry MERS.
The OCC says each servicer has already established policies and procedures for providing single points of contact (SPOC) to assist borrowers throughout the loan modification and foreclosure processes. All servicers have also implemented controls to prevent “dual-tracking” of loans to ensure no foreclosure occurs when a borrower’s loan has been approved for modification on a trial or permanent basis.
According to the OCC, much of the work to correct identified weaknesses in foreclosure policies, procedures, controls, and audit processes will be “substantially complete” in the first part of 2012, but other longer term initiatives will continue through the balance of 2012.
Mortgage-Related Jobs Are on the Rise: Report
The third quarter of 2011 saw a net increase of 2,738 mortgage-related jobs, according to recent industry data. This increase is the first recorded in five quarters.
The recent increase in refinances – encouraged by remarkably low interest rates – sparked a demand for loan originators and processors, while continuing high levels of delinquencies and foreclosures bolstered the need for servicing staff.
The third quarter saw 2,502 layoffs countered by 5,240 hirings, according to the Third-Quarter 2011 Mortgage Employment Index released by MortgageDaily.com.
The 2,738 gain compares to a net loss of 464 jobs in the previous quarter and a loss of 936 jobs a year ago.
JPMorgan Chase was a major source of the rise in hirings in the third quarter with 3,314 hirings of its own.
MetLife added 351 jobs, and CashCall Mortgage added 230.
Wells Fargo (-686), CoreLogic (-600), and Bank of America (-364) all lost jobs during the quarter.
California-based CoreLogic anticipates about 1,000 layoffs during the second half of 2011, according to MortgageDaily.com.
With an increase of 699 mortgage-related jobs, Texas posted the largest increase, and according to the index, “[t]he Dallas area has become a Mecca for mortgage servicers.”
Iowa, on the other hand, saw a decrease of 159 positions, largely due to Wells Fargo’s downsizing.
So far, the fourth quarter is seeing more hirings than layoffs.
The recent increase in refinances – encouraged by remarkably low interest rates – sparked a demand for loan originators and processors, while continuing high levels of delinquencies and foreclosures bolstered the need for servicing staff.
The third quarter saw 2,502 layoffs countered by 5,240 hirings, according to the Third-Quarter 2011 Mortgage Employment Index released by MortgageDaily.com.
The 2,738 gain compares to a net loss of 464 jobs in the previous quarter and a loss of 936 jobs a year ago.
JPMorgan Chase was a major source of the rise in hirings in the third quarter with 3,314 hirings of its own.
MetLife added 351 jobs, and CashCall Mortgage added 230.
Wells Fargo (-686), CoreLogic (-600), and Bank of America (-364) all lost jobs during the quarter.
California-based CoreLogic anticipates about 1,000 layoffs during the second half of 2011, according to MortgageDaily.com.
With an increase of 699 mortgage-related jobs, Texas posted the largest increase, and according to the index, “[t]he Dallas area has become a Mecca for mortgage servicers.”
Iowa, on the other hand, saw a decrease of 159 positions, largely due to Wells Fargo’s downsizing.
So far, the fourth quarter is seeing more hirings than layoffs.
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