Zillow forecasts home values will be on the decline through December 2012, but the decrease will be smaller than in 2011.
Home values in the U.S. fell in the fourth quarter, with the Zillow Home Value Index (ZHVI) sinking 1.1 percent after a less significant decline for the two previous quarters.
The Seattle-based company’s forecast also predicts that hardest hit cities such as Los Angeles; Riverside, California; and Phoenix, Arizona, will reach bottom and then stabilize or increase in value in 2012. Baltimore and Washington D.C. are also expected to reach bottom and see an increase or remain flat in 2012.
In the fourth quarter, the rate of homes foreclosed on increased slightly to 8.2 out of every 10,000 in December, compared to 8 out of every 10,000 homes in November. The rate was lower than the end of the third quarter, when it was 8.6 out of every 10,000 homes. Foreclosure re-sales made up 19.1 percent of all December sales, which is an increase from August, when 17.1 percent of all sales were foreclosure re-sales.
Showing posts with label sale. Show all posts
Showing posts with label sale. Show all posts
Monday, February 13, 2012
U.S. Resolves Claims Against BofA Through $1 Billion Settlement
Bank of America will pay $1 billion to settle on the largest False Claims Act relating to mortgage fraud.
As part of the $25 billion settlement, Loretta E. Lynch, U.S. attorney for the Eastern District of New York, announced that the government will resolve its claims against Bank of
America, Countrywide, and certain Countrywide subsidiaries and affiliates for underwriting and origination mortgage fraud.
Since 2009, the U.S. attorney’s office has been investigating lending practices from Countrywide, which BofA acquired in 2008. The results of the investigation led to allegations that the bank created loans insured by the Federal Housing Authority (FHA) to unqualified home buyers. BofA was also accused of originating loans based on inflated appraisals and failing to identify homeowners who could participate in the government’s Home Affordable Modification Program.
Of the $1 billion, $500 million will provide recovery to the FHA, which was said to have incurred hundreds of millions of dollars in damages due to loan origination practices from Countrywide. The remaining $500 million will fund a modification program for affected Countrywide borrowers with underwater mortgages. BofA is required to solicit potential borrowers who are eligible for the program.
As part of the $25 billion settlement, Loretta E. Lynch, U.S. attorney for the Eastern District of New York, announced that the government will resolve its claims against Bank of
America, Countrywide, and certain Countrywide subsidiaries and affiliates for underwriting and origination mortgage fraud.
Since 2009, the U.S. attorney’s office has been investigating lending practices from Countrywide, which BofA acquired in 2008. The results of the investigation led to allegations that the bank created loans insured by the Federal Housing Authority (FHA) to unqualified home buyers. BofA was also accused of originating loans based on inflated appraisals and failing to identify homeowners who could participate in the government’s Home Affordable Modification Program.
Of the $1 billion, $500 million will provide recovery to the FHA, which was said to have incurred hundreds of millions of dollars in damages due to loan origination practices from Countrywide. The remaining $500 million will fund a modification program for affected Countrywide borrowers with underwater mortgages. BofA is required to solicit potential borrowers who are eligible for the program.
Senate's Housing Chairman Pushes for More Principal Writedowns
Sen. Robert Menendez (D-New Jersey) says the $25 billion settlement struck between federal and state officials and the nation’s five largest mortgage servicers “helps homeowners but it’s a long way from healing the grievous wounds left by the crisis.”
Those wounds have been made deeper by the continuing decline in home prices that has put millions of homeowners in the hole on their mortgage, owing far more on their loan than the home is now worth.
Menendez, who is chairman of the Senate’s housing subcommittee, has introduced a bill that he describes as “innovative,” which would encourage lenders to reduce principal for underwater borrowers with a shared-appreciation modification.
Menendez’s Preserving American Homeownership Act would establish a program through which banks would write down the principal balance of the mortgage to 95 percent of the re-assessed value of the home. This reduction would take place over a three-year period in
one-third increments per year, provided the homeowner remains current on their payments.
In exchange, the bank would receive a fixed share – not to exceed 50 percent – of the increase in the home’s value when the home is sold or later refinanced. The percentage of shared appreciation would depend on how much the bank reduces the principal. For example, if the bank reduced the principal by 20 percent, they would receive a 20 percent share of any later increase in the home price.
Homeowners would be eligible for the program no matter how far underwater they are. Homeowners who are in default or foreclosure would also be eligible, but they would be required to make timely payments on the modified mortgage going forward or the principal reduction would be retracted. Only primary residences would qualify for assistance under the program.
“When you owe more than your house is worth through no fault of your own, relief can be hard to come by,” said Sen. Menendez.
“More and more people are choosing to walk away, since they feel that’s their only viable option, which only exacerbates the problem. My bill aims to break this cycle and give homeowners the relief they are looking for by working with banks to find acceptable solutions for everyone,” Menendez added.
The number of homeowners underwater on their mortgage is currently estimated to be more than 10 million, or approximately 22 percent of all homeowners. On average, these homeowners owe anywhere from $40,000 to $65,000 more than their home is currently worth.
Those wounds have been made deeper by the continuing decline in home prices that has put millions of homeowners in the hole on their mortgage, owing far more on their loan than the home is now worth.
Menendez, who is chairman of the Senate’s housing subcommittee, has introduced a bill that he describes as “innovative,” which would encourage lenders to reduce principal for underwater borrowers with a shared-appreciation modification.
Menendez’s Preserving American Homeownership Act would establish a program through which banks would write down the principal balance of the mortgage to 95 percent of the re-assessed value of the home. This reduction would take place over a three-year period in
one-third increments per year, provided the homeowner remains current on their payments.
In exchange, the bank would receive a fixed share – not to exceed 50 percent – of the increase in the home’s value when the home is sold or later refinanced. The percentage of shared appreciation would depend on how much the bank reduces the principal. For example, if the bank reduced the principal by 20 percent, they would receive a 20 percent share of any later increase in the home price.
Homeowners would be eligible for the program no matter how far underwater they are. Homeowners who are in default or foreclosure would also be eligible, but they would be required to make timely payments on the modified mortgage going forward or the principal reduction would be retracted. Only primary residences would qualify for assistance under the program.
“When you owe more than your house is worth through no fault of your own, relief can be hard to come by,” said Sen. Menendez.
“More and more people are choosing to walk away, since they feel that’s their only viable option, which only exacerbates the problem. My bill aims to break this cycle and give homeowners the relief they are looking for by working with banks to find acceptable solutions for everyone,” Menendez added.
The number of homeowners underwater on their mortgage is currently estimated to be more than 10 million, or approximately 22 percent of all homeowners. On average, these homeowners owe anywhere from $40,000 to $65,000 more than their home is currently worth.
Banks Respond to Robo-Signing Settlement
While the $25 billion settlement between five of the nation’s largest servicers and 49 of the state attorneys general awaits approval from a judge, there is some relief in the industry that the 16 months of investigation and negotiation has come to a close.
“The best thing about the mortgage settlement is that it’s done,” said Stan Humphries, Zillow’s chief economist on the company’s website.
“The agreement brings closure to these issues and enables the company to move forward in our ongoing efforts to help borrowers find affordable and sustainable payment relief whenever possible,” Ally stated Thursday afternoon.
However, while federal and state officials are congratulating themselves, the settlement’s impact on the broader market remains questionable. “It will be a good thing for many individuals,” Humphries admits, but “[a]s far as helping the housing market as a whole, it’s a drop in the bucket.”
Nonetheless, Mike Heid, president of Wells Fargo Home Mortgage suggests the settlement will have some positive impact. “Today’s agreement represents a very important step toward restoring confidence in mortgage servicing and stability in the housing market,” he stated Thursday after the settlement announcement.
Wells Fargo has agreed to pay $1.01 billion to the government and $4.34 billion in borrower relief.
The bank stated Thursday that it will begin an expanded refinance program and borrower relief program at the start of March.
JPMorgan Chase will pay $1.08 billion to the government and has designated $4.21 billion in borrower aid.
In a brief statement responding to the settlement, a JPMorgan Chase spokesperson said Thursday, “We have worked very hard with the Federal Government and State Attorneys General over the past year to address a variety of challenging and complex issues to reach this settlement.”
“The settlement includes far reaching relief that will help many of our customers and complement our already extensive efforts to improve our borrower assistance efforts and servicing processes,” the spokesperson continued.
Citigroup will pay $4.15 million to the government and $1.79 billion in borrower aid.
“The monetary component of Citi’s portion of the settlement amount is to be paid in three parts: a payment in cash upon final settlement; customer relief payments; and refinancing concessions, for a total value of approximately $2.2 billion,” Citigroup stated Thursday.
Answering any concerns from investors, the bank also stated that it anticipates it has enough in reserves to cover its customer relief obligations “and all but a small portion” of its obligation to the government under the settlement.
Like Citigroup, Ally does not expect its commitment under the settlement will harm the bank. “Ally expects that the financial impact of the agreement will not be material on financial results for the first quarter of 2012 and future periods,” Ally stated.
Ally has agreed to pay $110 million to the government and $200 million in aid to borrowers.
Bank of America will pay $3.24 billion to the government and $8.58 billion in relief to borrowers.
A portion of BofA’s government payment – $1 billion – will be paid to settle a separate claim on behalf of Countrywide for loan originations issues.
“We believe this settlement will help provide additional support for homeowners who need assistance, brings more certainty to the housing market and aligns to our ongoing commitment to help rebuild our neighborhoods and get the housing market back on track,” Dan Frahm, a BofA spokesperson stated Thursday.
“The best thing about the mortgage settlement is that it’s done,” said Stan Humphries, Zillow’s chief economist on the company’s website.
“The agreement brings closure to these issues and enables the company to move forward in our ongoing efforts to help borrowers find affordable and sustainable payment relief whenever possible,” Ally stated Thursday afternoon.
However, while federal and state officials are congratulating themselves, the settlement’s impact on the broader market remains questionable. “It will be a good thing for many individuals,” Humphries admits, but “[a]s far as helping the housing market as a whole, it’s a drop in the bucket.”
Nonetheless, Mike Heid, president of Wells Fargo Home Mortgage suggests the settlement will have some positive impact. “Today’s agreement represents a very important step toward restoring confidence in mortgage servicing and stability in the housing market,” he stated Thursday after the settlement announcement.
Wells Fargo has agreed to pay $1.01 billion to the government and $4.34 billion in borrower relief.
The bank stated Thursday that it will begin an expanded refinance program and borrower relief program at the start of March.
JPMorgan Chase will pay $1.08 billion to the government and has designated $4.21 billion in borrower aid.
In a brief statement responding to the settlement, a JPMorgan Chase spokesperson said Thursday, “We have worked very hard with the Federal Government and State Attorneys General over the past year to address a variety of challenging and complex issues to reach this settlement.”
“The settlement includes far reaching relief that will help many of our customers and complement our already extensive efforts to improve our borrower assistance efforts and servicing processes,” the spokesperson continued.
Citigroup will pay $4.15 million to the government and $1.79 billion in borrower aid.
“The monetary component of Citi’s portion of the settlement amount is to be paid in three parts: a payment in cash upon final settlement; customer relief payments; and refinancing concessions, for a total value of approximately $2.2 billion,” Citigroup stated Thursday.
Answering any concerns from investors, the bank also stated that it anticipates it has enough in reserves to cover its customer relief obligations “and all but a small portion” of its obligation to the government under the settlement.
Like Citigroup, Ally does not expect its commitment under the settlement will harm the bank. “Ally expects that the financial impact of the agreement will not be material on financial results for the first quarter of 2012 and future periods,” Ally stated.
Ally has agreed to pay $110 million to the government and $200 million in aid to borrowers.
Bank of America will pay $3.24 billion to the government and $8.58 billion in relief to borrowers.
A portion of BofA’s government payment – $1 billion – will be paid to settle a separate claim on behalf of Countrywide for loan originations issues.
“We believe this settlement will help provide additional support for homeowners who need assistance, brings more certainty to the housing market and aligns to our ongoing commitment to help rebuild our neighborhoods and get the housing market back on track,” Dan Frahm, a BofA spokesperson stated Thursday.
Friday, February 10, 2012
Clarification Sought for Discrimination Protections
A new measure is seeking clarification to the National Association of REALTORS’® Code of Ethics that would specifically extend discrimination protections to include gender identity.
NAR’s Board of Directors passed an amendment to the Code of Ethics in November 2010 prohibiting members from discriminating on the basis of sexual orientation. Gender identification was not completely addressed in that Code change, says Eric Kodner, a NAR Diversity Committee member and REALTOR® with offices in the Twin Cities and Madeline Island, Wis.
HUD extended its discrimination protections to include gender identity and sexual orientation in a new rule announced Jan. 24. “We’re looking for the Professional Standards Committee to re-evaluate what we passed last year,” said Kodner. “When the Article 10 amendment was submitted, it was supposed to be all-encompassing. We’re really just bringing the NAR policy in line with the HUD policy. It’s more definitional clarification than a new addition to the Code of Ethics.”
Kodner, who is also currently serving as president of the National Association of Gay & Lesbian Real Estate Professionals (NAGLREP), is championing the clarification, which was proposed during the NAR Diversity Committee meeting on Nov. 11, 2011, in Anaheim, Calif.
The Wisconsin REALTORS® Association’s Cultural Diversity in Housing Committee officially endorsed the effort to bring the Code of Ethics in line with HUD policy, as has the Council of Residential Specialists.
“This is something CRS should do for the benefit of our members and the consumer,” says Toni Sherman, director of business relations at CRS. “Amending the NAR Code of Ethics to align with HUD’s new policy that includes protections based on gender identity as well as sexual orientation is only taking Article 10 to a crystal-clear completion.”
Kodner says he is encouraged by the supportive response he has received on the proposed revision. “It’s an issue we clearly had to get in front of because there should be no exclusions,” he says.
“He is tireless in going after a goal that will benefit the members of NAGLREP, but more importantly, this will have far-reaching positive affects across the nation,” Sherman says. “Eric is the kind of member we want at [CRS] — someone who is bright, aware of current issues affecting the consumer and NAR members, and enthusiastically following through until the job is done.”
The revision is expected to be discussed at the Diversity Committee at the Midyear Meetings in Washington, D.C., this spring.
- By Erica Christoffer, REALTOR® Magazine
NAR’s Board of Directors passed an amendment to the Code of Ethics in November 2010 prohibiting members from discriminating on the basis of sexual orientation. Gender identification was not completely addressed in that Code change, says Eric Kodner, a NAR Diversity Committee member and REALTOR® with offices in the Twin Cities and Madeline Island, Wis.
HUD extended its discrimination protections to include gender identity and sexual orientation in a new rule announced Jan. 24. “We’re looking for the Professional Standards Committee to re-evaluate what we passed last year,” said Kodner. “When the Article 10 amendment was submitted, it was supposed to be all-encompassing. We’re really just bringing the NAR policy in line with the HUD policy. It’s more definitional clarification than a new addition to the Code of Ethics.”
Kodner, who is also currently serving as president of the National Association of Gay & Lesbian Real Estate Professionals (NAGLREP), is championing the clarification, which was proposed during the NAR Diversity Committee meeting on Nov. 11, 2011, in Anaheim, Calif.
The Wisconsin REALTORS® Association’s Cultural Diversity in Housing Committee officially endorsed the effort to bring the Code of Ethics in line with HUD policy, as has the Council of Residential Specialists.
“This is something CRS should do for the benefit of our members and the consumer,” says Toni Sherman, director of business relations at CRS. “Amending the NAR Code of Ethics to align with HUD’s new policy that includes protections based on gender identity as well as sexual orientation is only taking Article 10 to a crystal-clear completion.”
Kodner says he is encouraged by the supportive response he has received on the proposed revision. “It’s an issue we clearly had to get in front of because there should be no exclusions,” he says.
“He is tireless in going after a goal that will benefit the members of NAGLREP, but more importantly, this will have far-reaching positive affects across the nation,” Sherman says. “Eric is the kind of member we want at [CRS] — someone who is bright, aware of current issues affecting the consumer and NAR members, and enthusiastically following through until the job is done.”
The revision is expected to be discussed at the Diversity Committee at the Midyear Meetings in Washington, D.C., this spring.
- By Erica Christoffer, REALTOR® Magazine
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