Thursday, July 19, 2012

FHA Announces New Details for Distressed Loan Sale

During a conference call Wednesday, Acting Federal Housing Administration (FHA) Commissioner Carol Galante announced applications are now being accepted for the Distressed Asset Stabilization Program, which is scheduled to hold its next sale in September.

About 40 percent of the sale will be concentrated in four hard-hit metro areas: Chicago, Newark, Phoenix, and Tampa, where about 3,500 loans are to be sold.

Assuming this upcoming sale is successful, Galante said FHA intends to look at other geographies with significant inventory for future sales.

When the program expansion was first announced in June, an upwards of 5,000 loans were expected to be sold. Now, Galante said the national number appears to be closer to 9,000.

While the new number is an approximation for now, Galante explained much more interest has been generated for the program since the loan sales will be held on an ongoing quarterly basis.

FHA first introduced the program in 2010 as a pilot, which led to the purchase of 2,100 single-family loans. The program prevents FHA-insured loans from getting lost to foreclosure by allowing investors to purchase at-risk mortgages, then turn them into performing loans.

A servicer can place a loan into the loan pool for sale if the borrower is at least six months delinquent, all loss mitigation options have been exhausted, a foreclosure proceeding has been initiated, and if the borrower is not in bankruptcy.

The FHA-insured notes are sold to investors at a price that is generally below the outstanding principal balance.

FHA also announced new neighborhood stabilization requirements for the hard-hit metros selected. In those areas, no more than 50 percent of loans purchased within a pool can be sold as REO properties.

“These markets were chosen because of the high concentration of FHA loans in the pipeline for foreclosure and because each allows us to test this strategy under a variety of market conditions,” said Galante.

Other options must be sought such as leasing the property to the homeowner or a modification. A short sale to a private investor doesn’t qualify for neighborhood stabilization credit.

For the program, 1-4 units will also be eligible, not just single-family homes.

FHA stated in a release that eligible investors need to have experience in asset management and property management, as well as a proven track record in helping seriously delinquent borrowers find an alternative to foreclosure.

By: Esther Cho 07/18/2012

Poll: Voters Overwhemingly Favor Financial Reform Laws

Lake Research Partners released the results of an opinion poll showing that financial reforms enacted in recent years remain popular with potential voters.

In light of events leading to 2008’s financial meltdown, potential voters seem to overwhelmingly favor financial reform laws designed to prevent abuse. Nearly three-quarters (73 percent) of respondents favor the Dodd-Frank financial reforms, while only 20 percent expressed disagreement. The support for Dodd-Frank crosses party lines-Republicans were found in favor by a 20-point margin, while Independents and Democrats supported the law by margins of 50 and 83 points, respectively.

When asked about states’ rights, two-thirds of voters said they support a state’s right to pass and enforce strong consumer protections and to prevent federal law from overriding any regulations.

The majority (60 percent) of voters actually expressed favor for more government oversight, while 73 percent support tougher rules and enforcement.

“This poll shows that American voters broadly and strongly support ball Wall Street reform and the CFPB,” said David Mermin, pollster and partner at Lake Research. “And they strongly favor specific components of the CFPB. After hearing arguments in support and in opposition, voters across party lines solidly favor the reform law.”

Among other findings: More than nine in 10 (93 percent) of respondents expressed favor for the policy that established more mortgage and foreclosure protections for service members; almost the same percentage (92 percent) favor a policy that requires banks, mortgage lenders, credit card companies, and student loan and auto lenders to provide clearer explanations of rates, terms, and fees.

In addition, two-thirds of voters agreed that the Consumer Financial Protection Bureau (CFPB) is a necessary entity. When asked whether or not companies under review by CFPB should be allowed to operate without the bureau’s oversight, 63 percent of respondents said CFPB should remain in charge.

The opinion poll was commissioned by AARP, the Center for Responsible Lending (CRL), Americans for Financial Reform (AFR), and the National Council of La Raza (NCLR). CRL director of federal policy Gary Kalman said the results didn’t shock him in the least.

“Bipartisan support among voters should be no surprise: Who hasn’t been hurt by the economic downturn? People get that common sense oversight could have prevented it,” he said.

By: Tory Barringer 07/18/2012

June Existing-Home Prices Rise Again

Existing-home prices continued to show gains but sales fell in June with tight supplies of affordable homes limiting first-time buyers, according to the National Association of REALTORS®.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums, and co-ops, declined 5.4 percent to a seasonally adjusted annual rate of 4.37 million in June from an upwardly revised 4.62 million in May, but are 4.5 percent higher than the 4.18 million-unit level in June 2011.

Lawrence Yun, NAR chief economist, said the bigger story is lower inventory and the recovery in home prices. “Despite the frictions related to obtaining mortgages, buyer interest remains solid. But inventory continues to shrink and that is limiting buying opportunities. This, in turn, is pushing up home prices in many markets,” he said. “The price improvement also results from fewer distressed homes in the sales mix.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 3.68 percent in June from 3.80 percent in May. The rate was 4.51 percent in June 2011; recordkeeping began in 1971.

The national median existing-home price for all housing types was $189,400 in June, up 7.9 percent from a year ago. This marks four back-to-back monthly price increases from a year earlier, which last occurred in February to May of 2006. June’s gain was the strongest since February 2006 when the median price rose 8.7 percent from a year prior.

Distressed homes — foreclosures and short sales sold at deep discounts — accounted for 25 percent of June sales (13 percent were foreclosures and 12 percent were short sales), unchanged from May but down from 30 percent in June 2011. Foreclosures sold for an average discount of 18 percent below market value in June, while short sales were discounted 15 percent. “The distressed portion of the market will further diminish because the number of seriously delinquent mortgages has been falling,” said Yun.

NAR President Moe Veissi said there’s been a steady growth in buyer interest. “Buyer traffic has virtually doubled from last fall, while seller traffic has risen only modestly,” he said. “The very favorable market conditions are helping to unleash a pent-up demand, which is why housing supplies have tightened and are supporting growth in home prices. Nonetheless, incorrectly priced homes will not attract buyers.”

Total housing inventory at the end June fell another 3.2 percent to 2.39 million existing homes available for sale, which represents a 6.6-month supply at the current sales pace, up from a 6.4-month supply in May. Listed inventory is 24.4 percent below a year ago when there was a 9.1-month supply.

First-time buyers accounted for 32 percent of purchasers in June, compared with 34 percent in May and 31 percent in June 2011. “A healthy market share of first-time buyers would be about 40 percent, so these figures show that tight inventory in the lower price ranges, along with unnecessarily tight credit standards, are holding back entry level activity,” Yun said.

All-cash sales edged up to 29 percent of transactions in June from 28 percent in May; they were 29 percent in June 2011. Investors, who account for the bulk of cash sales, purchased 19 percent of homes in June, up from 17 percent in May; they were 19 percent in June 2011.

Single-family home sales declined 5.1 percent to a seasonally adjusted annual rate of 3.90 million in June from 4.11 million in May, but are 4.8 percent above the 3.72 million-unit pace in June 2011. The median existing single-family home price was $190,100 in June, up 8.0 percent from a year ago.

Existing condominium and co-op sales fell 7.8 percent to a seasonally adjusted annual rate of 470,000 in June from 510,000 in May, but are 2.2 percent higher than the 460,000-unit level a year ago. The median existing condo price was $183,200 inJune, which is 6.9 percent above June 2011.

Regionally, existing-home sales in the Northeast dropped 11.5 percent to an annual pace of 540,000 in June but are 1.9 percent above June 2011. The median price in the Northeast was $253,700, down 1.8 percent from a year ago.

Existing-home sales in the Midwest slipped 1.9 percent in June to a level of 1.02 million but are 14.6 percent higher than a year ago. The median price in the Midwest was $157,600, up 8.4 percent from June 2011.

In the South, existing-home sales declined 4.4 percent to an annual pace of 1.73 million in June but are 5.5 percent above June 2011. The median price in the South was $165,000, up 6.6 percent from a year ago.

Existing-home sales in the West fell 6.9 percent to an annual level of 1.08 million in June and are 3.6 percent below a year ago. The median price in the West was $233,300, up 13.3 percent from May 2011. Given tight supply in in both the low and middle price ranges in this region, sales in the West are stronger in the higher price ranges.

Win Real Money Playing The Best USA Mobile Casino Slots Games Online

Should you like  the idea of really going on your desktop plus having the ability to have fun playing  video slots  with genuine money not to mention Bitcoins, you'll be really excited to learn that there is a multitude of legal United States Of America accepted  real money casinos plus Missouri accepted downloadable casino sites and Bitcoin wagering casino houses there are actually from which to choose.

Most of them offers you a chance to contest with other on-line virtual slots  gamers for the possible opportunity to win. Not only can you get an adrenaline rush playing  typical video slot machines online, but most of the legit U.S. accepted  real money casinos & Hawaii allowed instant play real money casinos getting payments from Crypto-currency also give you usage of terrific virtual classic slot machines tourneys.

In regards to finding the optimum reputable United States accepted  real money casinos and USA friendlyApple IPad mobile casino sites accepting Bitcoin, you would like to search for one using a layout and design that appeals to you.

Next, take note of the obtainable virtual slots. Ensure they perform a good job of supplying a constant supply of classic slot games like Lucky Lightning, Shopping Spree or Cleopatra’s Gold  you would like to win money playing in. check to guarantee they've got bingo competitive events.

Additionally, authenticate they provide excellent  bonus promotions and perks for you personally to make the most of.

 Find out that customer satisfaction can be acquired in the instances when you may be on the site the most. You might want to in addition choose a licensed American friendly  real money casino sites & Las Vegas Nevada approved online real money casino sites with that accepts Bitcoins from people all over the planet, including Bitcoin gamblers from the United States of America. A lot of active members; this is how you will know there will always be entertaining games going on when you spin the wheels playing  3D slots at the top-rated legal U.S. approved  casino sites & Florida friendly Apple IPad mobile real money casino sites.

If you have chosen to join one of the best  trusted USA friendly  real money casino sites & Pennsylvania allowed downloadable casino sites accepting Bitcoins offering you the possibility to appreciate its legit American approved  real money casinos & West Virginia approved instant play real money casino sites from your phone that also accept Bitcoins, then you are assured a great time even when you have fun playing  are out of your desktop computer. Do your best to make sure the mobile version has a lot to offer before you decide that you are on the right licensed United States Of America allowed  casinos & Las Vegas Nevada friendly no download real money casinos  for your 3D slots gaming needs.

If you are UK, you will also be able to win cash playing the best mobile video slot machines for real money and Bitcoins at one of the best real money bingo rooms for Non-US  players.

 There are a lot of them to choose from and you can find many types of progressive jackpot slot machines and bingo games. You can find Real Time Gaming no download slot machines such as Mermaid Queen, Ninja Star or Samba Sunset. You can also check out the bingo games for Bitcoins such as  pattern games, letter games, shape games, blackout games, and more.

 When you are attempting to determine with of the alternatives work most effectively Australian casino websites that accepts Bitcoins from individuals all around the planet such as United Kingdom and also Usa casino gamblers, you need to look at the surroundings you adore essentially the most and definately will obtain the most out of every time you log in to win money playing  mobile 3D slot machines using actual cash and also Crypto-currency.

HUD Program Sells Investors Pools of Troubled Loans

The U.S. Department of Housing and Urban Development is accepting applications from investors who want to buy pools of loans headed for foreclosure, which were formerly insured by the Federal Housing Administration. HUD’s Distressed Asset Stabilization Program sets out to help more home owners avoid foreclosure.
Here’s how the program works: The loans are usually sold to an investor for below the principal balance. Once the loan is purchased, foreclosure is delayed for at least six months. This allows the servicer time to find a workout with the home owner to stay in their home. If no solution can be found, the investor — or purchaser of the loan — may be able to help the home owner sell the property as a short sale.
About 3,500 loans in the HUD program will be sold in four metros hit hard by the foreclosure crisis: Chicago; Newark, N.J.; Phoenix; and Tampa, Fla.
“The housing market has momentum not seen since before the crisis,” says HUD Secretary Shaun Donovan. “But some metro areas are still under pressure and some FHA borrowers remain seriously behind on their loans and stand to lose their homes in a matter of months. ... Providing the opportunity for borrowers to potentially stay in their home under a new sustainable mortgage or other meaningful help not only benefits that home owner but reduces the costs to FHA and ultimately benefits the entire community.”

Luxury Homes Linger Longer Than Lower-Priced Houses

While the market for lower-priced and entry-level homes is showing signs of momentum, the luxury-home market seems to be stagnant.

The average days on the market for luxury homes — houses selling for more than half a million dollars — is 186 days, according to the Institute for Luxury Home Marketing’s weekly report. On the other hand, the national median for all homes dropped to 84 days in June, according to MLS data.

Inventories of for-sale homes in the luxury market as well as median asking prices have mostly stayed stable since November, according to the ILHM.

Meanwhile, lower-priced homes are seeing falling inventories and list prices increase.

The dropping inventories in lower-priced homes may be helping to drive most of the momentum. For example, Sam Khater, a CoreLogic economist, estimates that lower-priced homes are appreciating three times faster than more expensive homes due to the lower inventories and higher buyer demand.

Tuesday, July 17, 2012

Win Money Playing Downloadable Classic Slot Machines Using Actual Chips From Home

Win Money Playing  Downloadable Classic Slot Machines Using Actual Chips From Home

Should you like the thought of being at your home and also any time a person have fun playing video slot machines for actual cash through your personal pc or cellphone, then you will end up glad to understand that one could spin the wheels playing no download slots with real money. The trusted USA accepted casinos and New Hampshire approved instant play real money casinos possess a lot to supply whenever you join along with spin the reels playing.

You might gain access to spin the wheels playing various kinds of instant play slot games, and also access to other types of well-liked progressive jackpot slot machines and also chances. You are doing want to educate yourself on what to try to find inside the legit United States approved casino sites & New Hampshire accepted online casinos to be sure you are becoming a member of the only one that’s will make you the most wonderful.

Have a look at the buzz involving the licensed U.S. accepted real money casinos and Vermont allowed Apple IPad mobile real money casino sites before you join and examine all the ratings plus the ranks.

When you are considering starting to enjoy playing classic slot machines at on the list of trusted USA accepted casino sites and California friendly no download real money casino sites , you want to check to see whether or not it is a popular video slot machines with other players.

If it is, then this tells you that many others have found it to be one of the best licensed US approved casinos and Idaho friendly online casino sites, one of the best dependable US friendly casinos & Missouri allowed Apple IPhone mobile casino sites for them to invest their time for.

When you join a common reputable U.S. friendly casinos and Mayland allowed Apple IPhone mobile real money casinos, in addition, you know that you're going to have access to far more progressive jackpot slot machines likePayDirt to spin the wheels playing, great competitiveness, and more than likely bigger prizes. The popular reputable USA approved casinos & Louisiana allowed cyber casinos also tend to have more tournaments with virtual slot machines likeNinja Star   going on.
Join in on the tournaments withInternet slots likeWhite Rhino    to win guaranteed cash prizes. The legal US friendly real money casino sites plus Michigan accepted no download real money casinos tend to do a great job of having a lot of slots tournaments with video slot games likeBig Bopper happening on a regular basis. The online slots tournaments last longer than the regular no download slot games likeNinja Star and this means you can enjoy a lot of fun when you are playing in the no download slot machines like PayDirt .

The video slots tournaments can provide having access to cash payouts such as family vacations, purchasing sprees, and also technology.

 Should you want the idea of playing slot machine games with your actual money at one of many legit American allowed casino sites & Virginia approved no download casino sites.

 then you definitely may like the thought of being able to spinning the wheels playing classic slot games like PayDirt   for legitimate coins while enjoying the accessibility other styles of cash incentives.

 If you would like get an adrenaline rush virtual slot games through your cell phone, you'll find a large number of with the classic slot machines like Mr. Vegas sizes also offer this opportunity to take pleasure in the legitimiate United States accepted casino sites and Massachusetts accepted Apple IPad mobile real money casinos from the comfort of your current cellphone while you're also faraway from your house.


Home Owner Insurance Deductibles on the Rise

Home owners beware: “Your home owner’s insurance now probably covers less while costing more,” The Wall Street Journal reports.

Home owner deductibles have been rising the last few years, as home owners who may have once seen $250 to $500 a claim soar to $1,000 to $2,500 a claim in recent years.

There’s been a move by the industry to go to percentage-based deductibles, which have caused prices to rise. For example, home owners may have once had a $500 to $1,000 deductible but now have a form of a deductible of 2 percent of the insured value of a home for items like wind and hail damage. That could mean that insurance may only cover half the cost of a roof replacement.

What’s more, more insurance companies are issuing more limits on what all they will pay for in replacing a home.

Texas home owners pay the highest insurance premiums in the country, but a consumer group in the state found that newer policies are covering less, like limiting coverage on plumbing leaks or damage to foundations.

With insurance policies squeezing more home owners’ budgets, housing experts say home owners need to take an active role in reviewing their policy to find out what all is covered. Also, they say that home owners need to think twice before making several claims.

“One large claim will affect you less than multiple small ones,” The Wall Street Journal article notes. “Of course, you buy insurance to be covered, so you are always free to file a claim. But you should know that insurers keep close track of claims and will penalize you for making too many, even if you just happen to hit a string of bad luck.”

Source: “Insurance Deductibles Soar,” The Wall Street Journal (July 13, 2012)

New Gov't Agency to Regulate Credit Score Companies

Americans' credit scores are an important piece of information that banks use to determine if you can get a mortgage or not. As such, the Consumer Financial Protection Bureau says the companies that provide such details about Americans' credit histories require more scrutiny.
The consumer watchdog group announced Monday it will provide greater oversight of the industry, including the big three credit agency firms: Experian, Equifax and TransUnion.
Consumers often complain about inaccurate information on their credit reports, but many are unsuccessful in getting the credit reporting agencies to correct the information. The credit scores from the credit agencies are an important piece that lenders use to decide if a borrower should be issued a mortgage or other type of loan or credit cards. The three major credit reporting agency have files of the credit history and financial information of more than 200 million Americans.
The CFPB may soon clarify what the Fair Credit Reporting Act requires of credit bureaus, including investigations when a borrower calls into question information on their credit report, Jon Ulzheimer, president of consumer education at, told The Associated Press. For example, when a consumer challenges their credit score, what constitutes a reasonable investigation as dictated by the Fair Credit Reporting Act?
Typically, Ulzheimer says that credit bureaus double-check their number, but “there’s really no quote-unquote ‘investigation.’”
CFPB will officially begin regulating the industry on Sept. 30.
Source: “Consumer Bureau to Police Credit Reporting Bureaus,” The Associated Press (July 16, 2012)

Inventory of For-Sale Homes Continues to Plummet

Inventory of for-sale single-family homes, condos, townhouses, and co-ops dropped more than 19 percent in June compared to a year ago, reports in its analysis of 146 markets nationwide.
Of the 146 markets across the U.S. that analyzed, only three markets did not see inventory levels fall year-over-year, including Denver, Philadelphia, and Shreveport-Bossier City, La.
Meanwhile, the median national list price rose 2.68 percent in June compared to June 2011, reports.
“Low inventories, combined with steadily rising list prices are positive signs that the overall market is gaining traction and is entering a recovery mode,” noted in a statement on the housing data.
California cities are seeing the largest drops in inventory levels, and the tightened supply of homes for-sale is sparking higher demand among home buyers. The following markets posted the largest inventory drops in June compared to June 2011, according to the housing data:

Monday, July 16, 2012

3 Top Home Buyer Deal Killers

Recent surveys have shown that more Americans have a thirst for buying real estate, with home affordability at record highs and mortgage rates at record lows. In fact, real estate buyer agents report a 59 percent increase in buyer inquiries this year compared to last year, according to a recent survey conducted by the Real Estate Buyer’s Agent Council.
So what’s preventing some buyers from making it all the way to the closing table?
REBAC surveyed its buyer agent members to determine the top issues preventing home buyers in their local markets from completing a home purchase. The top three obstacles identified in its 2012 survey are:
1.Economic insecurity 2.Difficulties in obtaining financing 3.Problems selling current home The number of home buyers citing difficulties obtaining financing has fallen markedly in the last few years. In 2011, 65 percent of home buyers cited this as a big hurdle to purchasing, and 61 percent cited it in 2010. This year that number has dropped to 49 percent, as economic insecurity overtakes it in having the biggest effect on stalling home sales, according to the survey.
In 2011, the top three issues cited by buyers were difficulties obtaining financing, problems selling a current home, and holding out for lower prices, according to the survey.
Source: “Trend-Spotting for Real Estate Agents: Where Do We Stand Today?” RISMedia (July 7, 2012)

Top-Ranking State for Housing Affordability

Texas ranks top as the most affordable housing market in the country, and record low interest rates on loans in recent weeks has pushed affordability even higher in the Lone Star State.
According to the Real Estate Center at Texas A&M University, a home buyer making $37,351 a year could likely qualify to buy a $150,000 home with a 30-year, 80 percent loan with a 4 percent interest rate. The monthly payments would be $572.90. In 1991, however, a home owner would have needed an annual income of $49,023 to qualify for the same loan, which would have carried an average interest rate of 9.64 percent.
“The home purchasing power of a dollar in income increases dramatically as interest rates fall,” says James Gaines, research economist with the Texas A&M Real Estate Center. “With an 80 percent loan at 10 percent interest, $1 of income buys about $3 of housing. At 7 percent, it buys $4 of housing. At 4 percent, it buys nearly $5.50.”
But while Texas ranks as the most affordable market now, housing experts say other states are gradually narrowing that gap. The national median home price dropped 25 percent from 2006 and 2011, according to Gaines. Meanwhile, Texas’ median home prices increased 4 percent in that period. Gaines says that Texas may see a decrease in its affordability as home prices begin to rise faster than incomes in some areas.
Source: Real Estate Center at Texas A&M University

Play Instant Play Mobile Casino Slot Games For Real Money

In the event you like the thought of being at your house plus when you get an adrenaline rush playing no download slot machines with real coins from a personal pc or smart phone, then you'll be glad to find out that you can have fun playing instant play slots using real cash. Typically the legitimiate USA friendly casinos plus Delaware allowed Apple IPhone mobile real money casino sites possess a lot to offer once you join along with enjoy playing.

You might have access to spin the reels playing various kinds of classic slot machines, along with having access to other designs of popular video slot machines and chances. You are doing desire to learn onwhat to look for in the trusted USA accepted casino sites & DE friendly no download real money casinos to be positive you are signing up for usually the one that’s going to make anyone the most happy.

Take a look at the buzz associated with the legal American allowed casinos plus Texas accepted instant play real money casino sites before you even join as well as read the many reviews and also the ranks.

When you are considering starting to spin the wheels playing progressive jackpot slots at one of many trusted United States accepted casinos & Massachusetts approved Android mobile real money casinos , you want to check to see whether or not it is a popular instant play slot machines with other players.

If it is, then this tells you that many others have found it to be one of the best legit United States friendly real money casinos plus Kentucky friendly Apple IPhone mobile casino sites, the best reputable United States Of America friendly casinos plus California friendly downloadable casino sites for these to invest their time on.

When you enroll in a common dependable American accepted casino sites plus Wisconsin friendly instant play casinos, you also know that you're going to have access to more virtual slots likeThe Slotfather to spin the wheels playing, superior competitiveness, and more than likely bigger prizes. The popular licensed US allowed casino sites plus Las Vegas allowed downloadable real money casino sites also tend to have more tournaments with virtual slots likeMid-Life-Crisis   going on.
Join in on the tournaments withno download slot games likeCash Bandits    to win guaranteed cash prizes. The legitimiate United States Of America accepted real money casino sites plus Massachusetts friendly no download casinos tend to do a great job of having a lot of slots tournaments with no download slot machines likeShopping Spree happening on a regular basis. The online slots bonuses and tournaments last longer than the regular progressive jackpot slot machines like Shopping Spree and this means you can enjoy a lot of fun when you are get an adrenaline rush spinning the wheels playing in the classic slot games like Orc vs. Elf .

The virtual slots tournaments can provide you with having access to payouts including vacation trips, buying sprees, and consumer electronics.

 If you'd prefer the concept of win cash playing slots with your legitimate chips at one of many legit USA friendly casinos plus Las Vegas allowed online casinos.

 then you definitely may like the thought of having the ability to spinning the wheels playing virtual slot games like T-Rex   with your legitimate money while experiencing the accessibility to the other styles of cash payouts.

 If you want to win bitcoin playing 3D slot games from your cell phone, you'll find that many from the progressive jackpot slot machines like Count Spectacular sizes also provide you the opportunity to take advantage of the licensed United States allowed real money casino sites & New Mexico accepted cyber casinos directly from the smartphone while you're also outside of your own property.

The Next Big Threat to Home Owners Looms

While the housing market is showing signs of picking up across the country, housing experts warn of a new concern for home owners: resetting home equity lines of credit.
Home equity lines of credit often require low payments in the initial years as home owners only pay the interest on these loans at the onset. But later on, these loans reset with higher payments when home owners have to start paying down the principal.
About 44 percent of home owners with home equity lines of credit through Wells Fargo have paid only the minimum amount due on these loans, reports The New York Times.
Many borrowers may soon see their home equity lines of credit reset with higher payments and those higher payments may be too much for some borrowers.
The Office of the Comptroller of the Currency recently warned of the danger these resetting payments could pose for many home owners across the country. The OCC warned that nearly 60 percent of all home equity line balances would require payments of both principal and interest between 2014 and 2017.
The report highlights three main threats home equity borrowers face: Rising payments as they begin to pay back the principal and not just the interest on these loans; the risk of rising interest rates (many of these loans have adjustable rates); and refinancing challenges “because collateral values have declined significantly since these loans originated.”
Many of the home owners have seen their property values decrease since they first took out the home equity loans.
“These are among the riskiest loans in any bank’s portfolio,” The New York Times reports. “As borrowers are pressed to pay principal and interest, write-offs are almost certain to rise.”
Source: “Here Comes the Catch in Home Equity Loans,” The New York Times (July 14, 2012)

Wells Fargo Posts Profits on Housing Gains

Wells Fargo is seeing its profits rise, attributing the increase to its growing mortgage business. In the second quarter, the nation’s largest mortgage lender saw its profits rise 17 percent from a year earlier.
"Residential mortgages, new home equity, commercial real estate—it's great, bring it on," Chief Financial Officer Timothy Sloan told The Wall Street Journal.
Wells Fargo Chief Executive John Stumpf says the bank has seen an “increased strength in the overall housing market.” Wells Fargo’s revenue from its mortgage banking has increased nearly 80 percent from a year earlier and mortgage originations have increased 1.6 percent.
The bank says its profits have risen recently from an increase in demand from consumer car loans and commercial loans as well.
Source: “Wells Fargo Profit Up 17% on Strong Mortgage Income,” The Wall Street Journal (July 13, 2012)