Mortgages and Housing: Donovan Embarassed?, NAREB $1.2b Deal, Short Sales, Strategic Defaults, Appraisers and Dodd-Frank, 20% Down, FHFA REO Progran, Consent Order Action Plans, FHA MIPs Rise, Buffett on Banks, DeMarco, LeaseRunner. BofA Wins and Loses

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Insider Says Promontory’s OCC Foreclosure Reviews for Wells are Frauds.- By Abigail Field – … U.S. Housing Secretary Shaun Donovan has embarrassed himself yet again. This time, though, he’s gone in for total humiliation. See, he praised the bank-run Office of the Comptroller of the Currency’s (OCC) foreclosure reviews as an important part of the social justice delivered by the mortgage “settlement“. But thanks to an insider working on an OCC review, we know that process is a sham. Worse, the insider’s story shows that enforcement of the settlement is likely to be similar, which is to say, meaningless. Doesn’t matter how pretty the new servicing standards are if the bankers don’t have to follow them. Let’s start with Donovan’s sales pitch for the OCC reviews … – Naked Capitalism http://www.nakedcapitalism.com/2012/02/abigail-field.html
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(details) Housing Fix: Minority Group Unveils $1.2 Billion Industry-Led Program – BY: CARRIE BAY – The National Association of Real Estate Brokers, Inc. (NAREB) announced the launch of a 25-city, $1.2 billion REO and foreclosure mitigation initiative called the Homeowner’s Assurance Program (HAP). Private and Wall Street investors are providing the $1.2 billion in initial capital for the program roll-out in 25 markets. HAP’s deployment of capital to purchase, renovate, and sell REO properties will also generate jobs and income for real estate-related small businesses in the targeted markets. – DS News

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Short Sales Bring 24% Greater Returns than Foreclosures – BY: KRISTA FRANKS BROCK – … The firm reviewed prices for short sale and foreclosure sale properties in 2010 and 2011 in Boston, Phoenix, Tuscon, Southern California, and Southwest Florida. … – DS News
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The overblown threat of strategic defaults – Michael Hiltzik – … . But here’s the bottom line, from an academic study sponsored by the Mortgage Bankers Assn.: It’s easy to count the absolute number of defaults, but "whether or not those defaults are due to an inability to pay or an unwillingness to pay is typically unobservable from market data." … – LA Times
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(another unexpected consequence?) AGA Petitions Federal Reserve, CFPB – BY: ABBY GREGORY – On Capitol Hill, the American Guild of Appraisers (AGA) is petitioning the Federal Reserve Board and the Consumer Financial Protection Bureau to overturn a recently adopted rule that stands in opposition to regulations contained in the Dodd-Frank Act. The AGA wrote the organization’s plea based on the assertion that the Fed’s new rule poses a threat to “the viability of professional appraisal practice and undermines the legitimacy of real estate appraisals.” – The M Report

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The down payment boogeyman – report finds requiring a 20 percent down payment would push out 60 percent of borrowers from qualified residential mortgages (QRMs). Those 29 to 34 acquired a mortgage for the first time in 1999 to 2001 at a 17 percent rate but that rate is now down to 9 percent. – Dr. Housing Bubble

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FHFA Announces Pilot REO Property Sales in Hardest-Hit Areas – Next Step for Investors Interested in Fannie Mae Foreclosed Properties  – … Atlanta, Chicago, Las Vegas, Los Angeles, Phoenix and parts of Florida. With this next step, prequalified investors will be able to submit applications to demonstrate their financial capacity, experience and specific plans for purchasing pools of Fannie Mae foreclosed properties with the requirement to rent the purchased properties for a specified number of years. – FHFA Press Release

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(link at bottom has action plans of consent orders) Federal Reserve Board releases action plans for supervised financial institutions to correct deficiencies in residential mortgage loan servicing and foreclosure processing  – FR Board of Governors
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FHA to raise insurance premiums in April – By Jon Prior – The Federal Housing Administration will raise mortgage insurance premiums this April in order to repair the health of its emergency fund. The FHA upfront mortgage insurance premium will increase to 1.75% from 1% of the base home loan amount. This will apply regardless of the term or loan-to-value ratio beginning in April. – Housingwire

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Buffett: Banks Victimized by Excesses of Ousted Homeowners – By Andrew Frye – (Bloomberg) – … said banks were victimized by some homeowners who refinanced their loans before getting evicted.“Large numbers of people who have ‘lost’ their house through foreclosure have actually realized a profit because they carried out refinancings earlier that gave them cash in excess of their cost,” Buffett, chairman and chief executive officer of Berkshire Hathaway Inc. (BRK/A), said Feb. 25 in his annual letter. “In these cases, the evicted homeowner was the winner, and the victim was the lender.”

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Edward DeMarco, housing finance head, catches heat – Andrew S. Ross – It’s safe to say that the head of the Federal Housing Finance Agency, the government body that oversees Fannie Mae and Freddie Mac, would not count California Attorney General Kamala Harris among his biggest fans. – SF Chronicle
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Why the Federal Reserve can’t fix housing – By Annalyn Censky – (CNNMoney) – Housing is still one of the biggest drags on U.S. economic growth, but don’t look to the Federal Reserve for help. The central bank may have few tools left to fix it.That’s the basic hypothesis of a paper top economists presented to a room full of monetary policy elites in Manhattan Friday.
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(looks interesting) LeaseRunner: A Landlord’s Nirvana – A Tenant’s Dream Come True – by Anita Cooper – Few individuals are fortunate enough to witness the emergence of an idea that will revolutionize the real estate industry – specifically the rental market, so it’s with great pleasure, and excitement, that I share a fabulous resource for both tenants and landlords – LeaseRunner. – Realty Biz News

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BofA   Wins One, and    Loses One  

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The Infinite Loop of Failed Serial Modifications – by Nom de Plumber

     Nom de Plumber is a Nom de Plume.

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Increasingly savvy borrowers are trained to see modifications as monetary and brick-and-mortar rewards for extended delinquency. This entices them to become delinquent again later, for more modifications. For lenders hoping for principal recovery, this poses death by a thousand paper cuts.

The infinite loop of new servicing standards. 

Wash your capital, rinse, and repeat. 

Outcomes:

1.  Serial but failing modifications, as borrowers continually play to reduce coupon and principal.
2.  Even slower foreclosure liquidations.
3.  Accumulating lender losses, via coupon and principal reductions and loss-mitigation costs.
4.  Greater contraction of private mortgage capital.

Thank you.

Mortgages and Housing: Monthly Home Prices, Sticking Freddie?, HAMP and Investment Properties, Fed Funds Predictions, Off the Cliff, Buffett on Housing, Quicken Keeps Servicing, Kamala Harris Wants FC Pause, FHFA 29 Pages, DeMarco on GSEs, Fed Mission Creep?, Fed and AIG, Reverse Mortgage Leads, Settlement Section

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(great chart) FHFA Monthly Home Prices: December 2011 – Paper Economy – A US Real Estate Bubble Blog

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Fannie Putting More Dubious New Loans Back to BofA, So BofA Will Stick Them to Freddie Instead – Yves Smith – Naked Capitalism   (you gotta love Yves)
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Treasury to cap HAMP mods to property investors – By Jon Prior – The Treasury Department will cap the amount of mortgage modifications property investors can receive under a revamped Home Affordable Modification Program, officials said this week, to no more than a handful. – Housingwire
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(Fed funds futures predict) Those believing the Fed is on hold for the next 3 years will be in for a rude awakening – Sober Look Blog 

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The Rewards of Pushing Housing off a Cliff – By JONATHAN R. LAING – Former heads of Freddie and Fannie probably won’t have to pay fines if the SEC lets them settle security-fraud cases by signing consent decrees. – Barrons 

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Buffett’s Views on Housing – by CalculatedRisk

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(on Quicken retaining servicing) Tom Walsh: Quicken jumps in where others bail out – Detroit Free Press

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Harris Wants Fannie Mae, Freddie Mac to ‘Pause’ Foreclosures – By AARON GLANTZ – Attorney General Kamala Harris wants Fannie Mae and Freddie Mac to place "a good faith pause on foreclosure sales in California" until the federal government completes "a thorough, transparent analysis" of the possibility of writing down the debt of borrowers who owe more on their homes than they are worth. Harris made the request in a letter sent Friday to Edward DeMarco, the acting director of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac. – The Bay Citizen
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(29 page report) A report to report on the report – by Craig Masters – Federal Housing Finance Agency – Office of Inspector General – …. FHFA-OIG is authorized to conduct audits, evaluations, investigations, and other activities of the programs and operations of FHFA; to recommend policies that promote economy and efficiency in the administration of such programs and operations; and to prevent and detect fraud and abuse in them. … This report is about an extensive study into the amount and use of taxpayer money being spent to both prosecute and defend the former senior executives of Fannie Mae and Freddie Mac.- Greeley Gazette

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Fannie Mae and Freddie Mac Require Investment, DeMarco Says – By Lorraine Woellert – (Bloomberg Businessweek) – With no plan from Congress or the Obama administration to shutter Fannie Mae and Freddie Mac, the companies’ regulator told Congress today it will expand its oversight with a strategic plan to develop new systems and standards for home loans.

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(Fed mission creep?) Fed’s push on housing crosses a line, critics say – By Zachary A. Goldfarb – Senior Federal Reserve officials are injecting themselves into a noisy debate over how to solve the housing crisis, drawing criticism from some lawmakers who say the Fed has no business straying from its traditional role as the U.S. central bank – Washington Post

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(read this lots of good stuff) The Fed stands to make good money on AIG assets, assuming the assets (Maiden Lane II & III) can be sold – The Fed stands to make good money if it could liquidate its holdings of the AIG rescue facilities. The table below shows what the Fed needs to get back in order to break even ("Current Senior Loan Balance") and "fair value" of assets supporting it. After the loan gets repaid, the Fed and AIG split the proceeds on the collateral sales, with the Fed keeping lion’s share of the proceeds as profit. – Sober Look Blog

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Reverse Mortgage Originators Look to New, Growing Referral Source – by Elizabeth Ecker – (about in-home care providers) -  Reverse Mortgage Daily
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Settlement Section

(settlement) States, Banks and the $25 Billion Mistake: How Not to Prevent Mass Foreclosures – Carl Horowitz – … Yet amid the hoopla of this “historic” agreement are some inconvenient realities. For the settlement was a product of populist enthusiasm driven by an image of rapacious, unscrupulous bankers throwing hundreds of thousands, if not millions of unsuspecting homeowners onto the streets. State and federal officials exploited the prevailing winds. Perhaps they should have listened more closely to the lone holdout, Oklahoma Republican Attorney General E. Scott Pruitt. The following are some major downsides to the agreement. (has 5) … It’s hard to see the $25 billion settlement as anything but a shakedown. The fix was in from the start. Banks were presumed guilty. The question of the settlement was never “if,” but “how much.” ... – Town Hall.com

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(screwing investors even more) Banks Win Reprieve on Home Equity Loans in Settlement: Mortgages – By Kathleen M. Howley – (Bloomberg Businessweek) — … banks that settled a nationwide probe of foreclosure practices this month will get a bonus from the deal: protection for $308 billion of home-equity loans they hold. …  will be able to share losses on their junior loans with bondholders and get credit toward the cash they pledged to spend in the settlement, … Second liens would typically be wiped out before senior-mortgage investors take a loss, said Laurie Goodman, managing director at Amherst Securities Group LP in New York. It’s “a gift to the banks, at investors’ expense,” said Goodman, a member of the Fixed Income Analysts Society’s Hall of Fame. … “A proportionate write-down of the first and second represents a reversal of normal lien priority.” 

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CFPB: Defining “Larger Participant”

Powered by Lenders Compliance Group

On July 8, 2011, we notified you that the Consumer Financial Protection Bureau (CFPB or Bureau) had issued a request for comments regarding the requirement to implement a program to supervise certain nondepository covered persons for compliance with Federal consumer financial laws. In that newsletter, we offered a synopsis and access to the comment portal.

On February 17, 2012, the Bureau published a Proposed Rule that would establish the "larger participant" rule for nonbank entities in two markets: consumer debt collection and consumer reporting.

The CFPB is required to issue an initial ”larger participant” rule not later than July 21, 2012, which will be one year after the designated transfer date to the CFPB of the enumerated laws pursuant to Dodd-Frank.
The CFPB now seeks public comments as to how best to define "larger participants" in the markets for consumer debt collection and consumer reporting.

Comments must be received on or before April 17, 2012.

_______________________________

IN THIS ARTICLE

Overview
Defining "Nonbanks"
Supervision Mandates
Thresholds
Dates and Timeframes
Submit Comments
Library

LENDERS COMPLIANCE GROUP is the first full-service, mortgage risk management firm in the United States specializing exclusively in outsourced mortgage compliance and offering a full suite of services in residential mortgage banking for banks and nonbanks.

Mortgages and Housing: Goldman Housing Chart, New Freddie Valuations, Shilling on Renters, Weakened Volcker Rule, Yves on ASF-PIMCO, Ohio Demolitions, ZIRP Effects, FN-Freddie Projections, Ocwen Makes $, NAR Credibility, Who Owns My Mortgage, Bill Gross on Boomers, Citi Whistle Blower

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(print this chart) A Quick Breakdown Of America’s 131.8 Million Homes – Joe Weisenthal – From Goldman Sachs, a very useful chart. – Money Game at Business Insider
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Freddie to adopt new way of valuing foreclosed properties – By Jon Prior – … Under the new system, the Freddie team in Dallas and in McLean, Va., will measure the variances between the original broker priced opinion ordered for the property. If the BPO comes in too low when compared to the model, Freddie will order an automated valuation or even a full-scale appraisal of the property until it is more in line with what the home should be worth, Mooney said. "We’re doing this to minimize dysfunction in the market place, by hopefully eliminating broker-appraiser coercion, and the stigma of severely undervalued REO," Mooney said. … – Housingwire
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(will hurt housing prices) GARY SHILLING: Renters Will Dominate The Housing Market For Another 4 To 5 Years – Sam Ro – Why buy a house when you can rent? This is the mentality of many Americans.  Unfortunately, this isn’t helping home prices, which continue look for a bottom. … writes economist Gary Shilling in a piece for Bloomberg. … While the home price-to-rent ratio continues to come down, they are still above the long-run average, which also doesn’t bode well for prices. – Money Game at Business Insider

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The Volcker Rule, Made Bloated and Weak – BY JESSE EISINGER, PROPUBLICA – … Yet bank lobbyists with complicit regulators and legislators took a simple concept and bloated it into a 530-page monstrosity of hopeless complexity and vagueness. They couldn’t kill the rule. Instead, they are getting Congress and regulators to render it morbidly obese and bedridden. … – NY Times Dealbook
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Tom Deutsch of American Securitization Forum Finally Gets His Comeuppance: Pimco and Likely Other Investors Quit – Yves Smith – Naked Capitalism

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Record Mortgage Settlement Greatly Reduces Likelihood of FHA Bailout – by Elizabeth Ecker – An independent audit of the Federal Housing Administration’s Mutual Mortgage Insurance Fund found in November that the fund was, at 0.24%, well below its mandated capital reserve ratio of 2%. … According to the budget proposal, FHA was on the verge of needing roughly $688 million from the Treasury. That is, until the historic mortgage settlement was signed just days earlier, providing FHA with a near-$1 billion windfall.  … Reverse Mortgage Daily

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Ohio Designates $75M for Demolition; Should It Go to Borrowers? – BY: KRISTA FRANKS BROCK – DS News
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(study this chart for ZIRP effects) The current housing bust is much worse than the Great Depression – fed credit crunch – Edward Harrison – (hattip NDP) – Credit Writedowns
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Fannie, Freddie See Progress for Economy in 2012 – RYAN SCHUETTE – Despite the risk posed by more economic and political shock globally, the U.S. economy and housing market appear to be recovering, with more warmth expected for the latter in 2012, chief economists with Fannie Mae and Freddie Mac said this week. Doug Duncan, VP and chief economist with Fannie, and Frank Nothaft, with Freddie, each released separate forecasts in February for the year. – The M Report

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Ocwen absorbs Litton Loan acquisition costs in 4Q – By Kerry Curry – Ocwen Financial Corp. reported net income was down slightly in the fourth quarter of 2011, as it absorbed costs of the Litton Loan acqusition, but for the full year the mortgage servicer saw its income rise more than 100%. – Housingwire
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NAr reaffirms they have no credibility by reporting false increases in sales – ochousingnews.com 
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(good consumer piece) Mortgages likely to change hands – By Alan J. Heavens, The Philadelphia Inquirer – "Who owns my mortgage?" It’s a frequently asked question, and the reason is always the same: A change is needed. Someone is trying to refinance the mortgage, or is trying to save a house from foreclosure, among possible scenarios. Finding the answer to this question has become extremely important to many homeowners, but especially those in financial trouble. The many programs designed to stem the record tide of foreclosures have different requirements, depending on where your mortgage ended up after you signed that huge stack of papers at settlement. – Chicago Tribune
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(Boomers want certainty) Bill Gross On Why The Giant Wave Of Aging Retirees Makes US Debt Even More Attractive – Joe Weisenthal – …" Boomers, from the standpoint of individual investors, are the same way. They’re beginning to get older and require more certainty. Do they find appeal in a Johnson and Johnson at 3.5% dividend yield with growth potential? Sure they do, but they also believe they want that money back, and if there is a 2008-2009 scenario, perhaps they won’t.  So there are demographic tradeoffs here that have to be considered." … Money Game at Business Insider
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Citigroup Whistle-Blower to Rake in $31 Million for Providing Evidence Citigroup "Defrauded" Fannie, Freddie – Michael Shedlock – Sherry Hunt, a Citigroup quality-assurance vice president turned in evidence of purposeful fraud against Fannie Mae and Freddie Mac and now stands to gain as much as $31 million as her share of the fine. – MISH’S Global Economic Trend Analysis

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Mortgages and Housing: Jumbo Strategic Defaults, NAFCU on Multiple Regs, UK Home Ownership, Rates Lower?, PIMCO Quits ASF, HAMP Credits, 6mm in Default, Register of Deeds, Wells SPOC Bonuses, Tozer on GN Backing, NY to Speed Up, VA’s Positive Example

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High-end loan owners strategically defaulting in large numbers – OC Housing News

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(red tape concerns) NAFCU’s Comments to CFPB on Republication of Regulation Z – … NAFCU understands that some changes are required by statute.  We also believe some of the issues the agency is working on – the Know Before You Owe project, for example – will prove successful.  Nonetheless, credit unions are understandably concerned that one set of major revisions to Regulation Z may be followed soon after by a second, and possibly even third set, of major changes affecting the same provisions. … – CU Insights
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UK Homeownership Levels Hit Their Lowest Point since the 80s – by Allison Halliday – Realty Biz News

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(thoughtful) Why Renters Rule U.S. Housing Market (Part 1): A. Gary Shilling – Bloomberg

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Should Mortgage Rates Even Be Lower? – by MATT PHILLIPS – … For months, a key interest rate on mortgage-backed securities—known as the current coupon yield—has tumbled faster than average U.S. 30-year mortgage rates. In recent weeks, the difference between the two has flirted with levels seen in the aftermath of the financial crisis. Some say the wide spread shows the large banks that dominate the mortgage market are flexing their muscle by keeping prices relatively high. Others argue the gap reflects increased regulatory costs, risks and new realities of mortgage making. Either way, the spread is wide. Tuesday afternoon, it was 0.96 percentage points—almost double its average over almost 30 years. … – Wall Street Journal
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Pimco Said to Quit Trade Group After Foreclosure-Deal Silence – By Bradley Keoun and Jody Shenn – Pacific Investment Management Co. is quitting the American Securitization Forum after the trade group declined to issue a statement about investors’ views on the nationwide foreclosure settlement this month by five banks, two people with knowledge of the matter said. … The episode underscored Pimco’s concern that the trade group doesn’t advocate for debt buyers as well as banks that underwrite mortgages, the people said. … – Bloomberg Businessweek

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Treasury shields HAMP dollars away from AG settlement – By Jon Prior – Mortgage servicers will not be able to use principal reduction tax dollars under the Home Affordable Modification Program as "credits" toward the foreclosure settlement with the attorneys general, a Treasury official said. – Housingwire
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Overdue Mortgages Number 6,082,000 – BY: CARRIE BAY – New data from Lender Processing Services (LPS) shows that as of the end of January, there were 6,082,000 mortgages in the U.S. going unpaid. That tally includes loans that are 30 or more days delinquent and loans in foreclosure. LPS’ mortgage performance statistics are derived from its loan-level database of nearly 40 million mortgage loans. – DS News
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(read what he says) John O’Brien: Mortgage Settlement Fails to Address Banking Criminal Enterprise – Yves Smith – comments by John O’Brien, register of deeds of South Essex County, Massachusettes – Naked Capitalism 

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Wells Fargo pays employee incentives for mortgage workouts – By Jon Prior – Wells Fargo installed an incentive program that pays its single-point-of-contact employees more if they reach some sort of workout in lieu of foreclosure. – Housingwire

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Tozer: Ginnie Mae backs nearly all FHA, VA mortgages – By Andrew Scoggin – The head of Ginnie Mae said the government corporation has increased its role in the mortgage market since the housing bust, backing virtually every new loan guaranteed or insured by the major federal housing authorities. Ted Tozer, Ginnie’s president, said the corporation guarantees 99% of mortgages insured by the Federal Housing Administration, Veterans Affairs and the Department of Agriculture. That’s compared with roughly 90% before the crisis, he said. Ginnie reported record profits of about $1.2 billion in 2011 – Housingwire

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New York Courts to Intensify Efforts to Prevent Foreclosures – By WILLIAM GLABERSON – hattip NDP – New York State’s courts, frustrated by delays in thousands of foreclosure cases, are planning to speed them along in a new program that would give judges added control and require banks to send officials who have the power to alter loans to keep people in their homes. … The New York plan includes an unusual agreement by four banks to send representatives to court who can approve loan modifications. – NY Times
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What Can The Industry Learn From The VA Mortgage Program? – by Andrew Peters – … So here is our new puzzle: If we cannot rely on FICO scores to make satisfactory judgments, what strategy can we pursue? One possible approach might require taking a new look at one of the most efficient federal government housing offerings: the mortgage program administered by the U.S. Department of Veterans Affairs (VA). … So how does the VA achieve these positive results? The fundamental difference between a conventional FICO-based scoring model and the VA credit assessment boils down to a single factor: The VA loan considers the residual or disposable income of a potential borrower, whereas a FICO-score-driven approach focuses on payment history. … – MortgageOrb

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B of A to Fannie Mae: Drop Dead – 4 posts

in honor of the infamous Gerald Ford non-quote at NY Daily News:

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BofA Squeezes Mortgage Pipeline to Fannie as Dispute Escalates – By Hugh Son – (Bloomberg Businessweek) – Bank of America Corp., the second-biggest U.S. lender by assets, is stopping the sale of new home loans to government-owned Fannie Mae as a dispute over who should bear the costs for defective mortgages escalates. … “Bank of America may be saying, ‘It’s too risky to do business with Fannie’ because of what it considers to be a stricter loan-recourse policy,” said David Felt, a former deputy general counsel at the Federal Housing Finance Agency, Fannie Mae’s regulator. “I don’t know if Fannie really cares; it’s the largest mortgage purchaser in the world, and if Bank of America turns to Freddie Mac instead, that’s like a different subsidiary of the same company.” … Bank of America will sell new loans to Freddie Mac, the other U.S.-controlled mortgage-finance firm, and Ginnie Mae, a company that packages loans backed by the Federal Housing Administration, said a person with direct knowledge of the lender’s plans. The lender also may keep some loans on the balance sheet, said the person, who spoke on condition of anonymity because the plans aren’t public.  
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BofA Ends Sales of Certain Mortgages to Fannie – By DAVID BENOIT And NICK TIMIRAOS – … The decision to sharply curtail loan deliveries to Fannie is significant because "to my knowledge, no lender large or small has ever taken that step," said Guy Cecala, publisher of Inside Mortgage Finance. "Let’s face it: this is a pretty big piece of artillery BofA is using." … – Wall Street Journal

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Bank of America Breaks With Fannie Mae – By NELSON D. SCHWARTZ – Bank of America said Thursday that it would no longer sell new mortgages to Fannie Mae, underscoring tensions in a fight between giants of the home loan market over billions in losses in the housing bubble. The latest move represents a major escalation in a protracted legal battle over how many defaulted mortgages Bank of America will have to buy back from Fannie because the original loans had not conformed to proper underwriting standards, market experts said. – NY Times
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Still awash in mortgage woes, BofA bashes loan buyer Fannie Mae – By E. Scott Reckard – Maybe you thought Bank of America Corp.’s disputes over imploded Countrywide Financial Corp. mortgages were — just possibly — beginning to ebb. Think again. Bank of America said Thursday that it would no longer provide new mortgages to Fannie Mae, the giant loan buyer that needed a taxpayer bailout because of enormous losses on loans from Countrywide and other dark stars of the housing boom. … In its 10-K annual report to securities regulators, BofA said Fannie’s demands for buybacks or compensation have gone far beyond its “historical claims experience.” Indeed, it said, so unprecedented are the demands of Fannie and Freddie that it can no longer estimate how high the costs could go. … – LA Times

Mortgages and Housing: White Paper on first Loss Slice, Who Owns My Loan?, FHA Insolvent?, Volcker Rule Not Panacea, Settlement Not End-All, Fed Behind Closed Doors, Corelogic Tool, RMBS Working Group, FHFA Strategic Plan, Rent vs. Buy, Scammed?

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(white paper on selling off first loss slice) New pooled mortgage strategy touted for institutional investors – Based on ‘safe’ loans, securities would carry government guarantee – BY ARLEEN JACOBIUS – Pensions and Investments
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(who owns my loan?) Homeowners get runaround about who holds loans – Carolyn Said – SF Chronicle

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Obama’s Housing Market Refi Program Won’t Work Because the FHA is Insolvent – By: Money_Morning at Marlet Oracle – … The president’s plan is to have the FHA insure all "eligible" borrowers’ loans so lenders have a guarantee that refinanced mortgages will be paid back. That incentivizes lenders to make loans they otherwise wouldn’t make. …
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Home Ownership – A Losing Proposition? – by Anita Cooper – … Arzaga, after reviewing 250 properties across the country and examining the finances of nearly 40 client files, determined that “100 percent of the time it was better to rent, than to own.”Arzaga’s reasoning? The carrying costs, i.e. taxes, insurance, maintenance, repairs, financing, etc. consume finances better spent on investments offering far greater returns. Obviously, when renting a home the landlord takes care of those costs which allows an individual the freedom of putting their money towards investments which have a greater return on investment. … – Realty Biz News

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The Volcker Rule is not going to bring your house back – Sober Look Blog – … Ultimately the answer to the banking crisis is in the improved overall capitalization and strengthened bank liquidity positions. The Volcker Rule, particularly in its current form is not the answer, because it has never been about market making. So before writing another hate mail on how you lost your house and how the Volcker Rule would have prevented it, read the paper. A little bit of knowledge will go a long way. …  – Sober Look Blog
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Some Doubt a Settlement Will End Mortgage Ills New York Times (hat tip Lambert). – By NELSON D. SCHWARTZ – NY Times

and
from Naked Capitalism – Yves Smith says: We said from the get go that a single point of contact was impossible in a call center type environment. You actually do NOT need a single point of contact, you need decent record keeping, which (as we have also discussed at some length) seems to be beyond servicers’ capabilities (in part due to horrible systems). But this proves a bigger point: the servicers cannot live up to their servicing standards (at least without losing boatloads of money) and hence never will.   l
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(Fed knows best?) Fed Writes Sweeping Rules From Behind Closed Doors – By VICTORIA MCGRANE And JON HILSENRATH – The Federal Reserve has operated almost entirely behind closed doors as it rewrites the rule book governing the U.S. financial system, a stark contrast with its push for transparency in its interest-rate policies and emergency-lending programs. … Since the Dodd-Frank financial overhaul became law in July 2010, the Fed has held 47 separate votes on financial regulations, and scores more are coming. … The Fed is making these sweeping changes—the most dramatic since the Great Depression—almost completely without public meetings … – Wall Street Journal

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CoreLogic tool helps default servicers track loans – By Kerri Panchuk – … CoreLogic to unveil its new default servicing platform, DefaultView, … The Web-based platform allows servicers to access and keep track of every stage and development in the default servicing life cycle. The tool has nine different modules that are all interconnected, allowing users across a servicing shop to see the full transaction history. The platform provides users with workflow steps, specific data on loans, results on previous steps taken and needed documents as well as important messages. … – Housingwire
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Experts: RMBS Working Group May Dampen Recovery – RYAN SCHUETTE    – … The unit – later described by officials as the Residential Mortgage-Backed Securities Working Group –  … it represents state attorneys general and federal agencies, including U.S. Attorney General Eric Holder, HUD Secretary Shaun Donovan, and Securities and Exchange Commission (SEC) enforcement director Robert Khuzami, among many others. Included agencies and departments: The Consumer Financial Protection Bureau, Federal Bureau of Investigation, Justice Department, HUD, Internal Revenue Service, and SEC. … Says Ed Pinto, a former Fannie Mae executive and research fellow with the conservative-leaning American Enterprise Institute: “I think government officials are looking for people to pin blame on when they really should look in the mirror. … – The M Report
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FHFA Sends Congress Strategic Plan for Conservatorships of Fannie Mae and Freddie Mac – FHFA Press Release

and

FHFA submits plan to build new secondary mortgage market – By Jacob Gaffney – … "No private sector infrastructure exists today that is capable of securitizing the $100 billion per month in new mortgages being originated," said DeMarco in a letter to Congress. "Simply shutting down the enterprises would drive up interest rates and limit mortgage availability." … "The absence of any meaningful secondary mortgage market mechanisms beyond the enterprises and Ginnie Mae is a dilemma for policymakers expecting to replace the (GSEs)," the letter states. "Without an alternative market infrastructure that investors could rely on, new mortgages would have been largely unavailable if the Enterprises suddenly had been shut down." This new market should be entirely transparent, the FHFA states … – Housingwire

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(quick and dirty rent vs. buy calculation) A case scenario in renting versus buying in Culver City – Rent a home for $2,800 or buy it for $600,000?  – Dr. Housing Bubble
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The Sophisticated and the Scammed – MBS Trusts Keeping Assets on the Books Long After they are Liquidated – Submitted by 4closureFraud – Zero Hedge

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Mortgages and Housing: Mod Stats by Servicer, Obama Wants More, Fear of Maxine Waters, Scary Housing Chart, Taxpayers on hook, Settlement Winners and Losers, Cleveland Demolishes Homes, FCs Hurt Prices, MA Note Case, FHA Insolvent, Builder confidence, HUD’s Donovan

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Propublica has mortgage modification stats by servicer name. – hattip susan Kulakowski 

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Obama: We Need To Expand Federal Housing Policy – by President Barack Obama – MortgageOrb

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(The new Barney? Are they afraid of Maxine?) Six House Members Recuse Themselves From Maxine Waters Ethics Case – by MortgageOrb.com
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The Scariest Housing Market Chart Ever – A brand new one we hadn’t seen before. – … Anyway, the Obama administration is out with a new economic report for Congress, and we came across this chart, which we hadn’t seen before. … – Money Game at Business Insider

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DEAR TAXPAYERS: You Might Be On The Hook For Way More Of The $40 Billion Mortgage Settlement Than You Thought – Ben Walsh – (HAMP funds. i.e. taxpayer money will pay) – Clusterstock at Business Insider
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The $26 Billion Foreclosure Settlement: Who Won? Who Lost? – Jonah Trenton – (start at part titled "Winners and Losers") – Realty Biz News
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Cleveland To Use National Mortgage Settlement Money To Demolish Homes, Still Wants Banks To Pay – Janell Ross – … About $72 million of the $335 million Ohio is slated to receive as part of the deal will be used to pay for demolishing foreclosed and vacant homes. But Cleveland officials fear the city will still be left with a sizable vacant home bill. Cleveland and the surrounding Cuyahoga County are home to about 23,000 vacant houses. … – The Huffington Post

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Michael Olenick: Shocking Economic Insight – Mass Foreclosures Will Drive Down Home Prices – Naked Capitalism
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New York, Delaware Pursue Mortgage Securitization Investigation – BY: KRISTA FRANKS BROCK – Reluctant attorneys general for New York and Delaware both signed on to the multi-state $25 billion settlement last week with the nation’s largest servicers, … The two attorneys general were lured back to the settlement in its final days when they were assured the settlement would not impede further investigation into additional civil and criminal claims at the five mortgage servicers … – DS News
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(ugh look at %’s) San Francisco’s Foreclosure Audit Turns Up Irregularities, Illegal Activity – BY: CARRIE BAY – An audit of San Francisco foreclosures conducted by county officials revealed documentation errors were evident in nearly all of the cases examined. Auditors reviewed 382 case files that resulted in a foreclosure sale between January 2009 and October 2011. They identified one or more irregularities in 99 percent of the loans and one or more clear violations of state law in 84 percent. – DS News

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Massachusetts Home Seizures Threatened in Loan Case: Mortgages – (Bloomberg Businessweek) – The highest court in Massachusetts is poised to rule as soon as this month on a foreclosure case that could lead to a surge in claims from home owners seeking to overturn seizures. The justices are deciding whether to uphold a lower court ruling that gave a Boston home back to Henrietta Eaton after Sam Levine, a 25-year-old Harvard Law School student, argued in front of the nation’s oldest appellate court that the loan servicer made mistakes when it foreclosed because it didn’t hold the note proving she was obliged to pay the mortgage. “If the Massachusetts court says this defense works, that would have a huge ripple effect across the country,” said Kurt Eggert, a professor at Chapman University School of Law in Orange, California. A ruling in favor of Eaton would show how a $25 billion settlement reached this month with state and federal officials still leaves banks exposed to liabilities tied to home repossessions.

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Obama’s Housing Market Refi Program Won’t Work Because the FHA is Insolvent – By: Money_Morning at Marlet Oracle – … The president’s plan is to have the FHA insure all "eligible" borrowers’ loans so lenders have a guarantee that refinanced mortgages will be paid back. That incentivizes lenders to make loans they otherwise wouldn’t make. …

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How can builder confidence improve, single family starts increase sharply, and new home sales be unchanged? – by CalculatedRisk
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HUD’s Donovan: latest dumbass to embrace principal forgiveness – Anyone who has read my writing before knows I don’t think principal forgiveness is a good idea. I believe principal forgiveness is the worst policy option because foreclosure Is a superior form of principal reduction. I don’t think I am being cynical when I say that the Obama administration is pushing principal forgiveness in an attempt to buy votes. Any economic benefit the policy may have is outweighed by the moral hazard it creates and the unfairness of the distribution of benefits. The most irresponsible borrowers obtain the greatest benefit from this policy. By rewarding them and buying their votes, we are letting the Ponzis take over. – OC Housing News

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Mortgages and Housing: FCs and House Prices, Great Deals, Meet Homeward Residential, RE Buyer Items, Bulk REOs (3), Red Tape, $300k New Normal, Low Mortgage Payments, Payroll Tax Cut & G-fees, FC Settlement Who Pays?

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So, You Think Foreclosures Lower House Prices? I Can’t Find Data to Support This – Mark Hanson -  … Not so fast. As you know I think this is bullsh*t. (tells why) … The next phase to the US housing crisis is house price compression…the upper price bands compressing on the lower. It’s already happening. The data we watch closely every day are clear. This adds an entirely new dimension to the US housing crisis, one that pushes out an ultimate “recovery” a lot further into the future than anybody is forecasting, or can model.

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(slide show) 10 States Where You Can Get Incredible Deals On Foreclosed Homes – Mamta Badkar – Business Insider 

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Wilbur Ross’ AHMSI changes name, adds correspondent lending – By Kerri Panchuk – WL Ross & Co.-owned mortgage servicer American Home Mortgage Servicing Inc. is changing its name to Homeward Residential to reflect the company’s entrance into the orrespondent and warehouse lending market. – Housingwire

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(has 6) Things to Know before Investing in Real Estate – by Mike Wheatley – … With that in mind, a recent post by Zillow in the latest edition of Forbes points out a number of items that investors should pay attention to if they don’t want to end up getting burned. … – Realty Biz News
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Bulk Sales Of REO Properties From The Investors Perspective, (part 2) – by Donna Robinson – If you have not already read part 1 of this article, here is the link.  – Realty Biz News

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(cherry pick plus creative financing?) Freddie Mac pitches REO plan to mortgage-bond investors – By Adam Tempkin – (IFR) – … Freddie Mac is making efforts to fast-track its own version   … is likely to differ from Fannie’s in important ways, particularly in how qualified investors may be able to procure financing to buy the pools of foreclosed single-family homes. … Not only is the GSE close to obtaining approval for a new single-family rental investor-loan product to help investors to finance their REO purchases at appropriately low leverage levels, but this product may eventually be securitized in the same way that the GSEs currently securitize multi-family (apartment-complex) loans. … – Reuters
ansd
Morgan Stanley predicts REO rental program will create 1.8 million jobs – By Justin T. Hilley – … One of the greatest effects of it, the bank’s analysts say, is job creation, with the possibility of creating more than 1 million jobs in the hard-hit construction and real estate industries. The jobs could be created by private capital without the use of taxpayer dollars. – Housingwire
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(on Dodd-Frank and America in general) Americans more and more entangled in red tape – BY THE ECONOMIST – … Dodd-Frank is part of a wider trend. Governments of both parties keep adding stacks of rules, few of which are ever rescinded. …Barack Obama’s health-care reform of 2010 had many virtues, … But it does little to reduce the system’s staggering and increasing complexity. Every hour spent treating a patient in America creates at least 30 minutes of paperwork, and often a whole hour. … – Chronicle Herald.ca

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Why $200K To $300K Is The New Normal For Home Builders, Even In The West – Rick Palacios Jr. – Since new home prices peaked in 2007, new single-family sales of over $500K have been more than cut in half, … In fact, sales of homes priced under $300K now account for roughly 75% of all new single-family transactions.  – John Burns RE Consulting

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A $983 mortgage payment in Southern California is now typical? Buyers commit to lowest mortgage payment in January of 2012 since May of 1999. What does this say about the current makeup of real estate sales? – Dr. Housing Bubble
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This Time, Payroll Tax Cut Spares Mortgage, FHA Fees – (this means debating debt ceiling will happen before presidential election) – eCreditDaily
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U.S. Debt Ceiling Expected to be Reached Before 2013 – … according to a new warning from Treasury Secretary Timothy F. Geithner. The announcement, some predict, is sure to set the stage for a showdown over the borrowing limit immediately after–if not during–the 2012 presidential election. Debt Ceiling to Surpass $16.4 Billion by Year End – GoBankingRates

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Mortgage Foreclosure Settlement: Who Pays? – Mark Gongloff and Ben Hallman – Huffington Post 

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For Rob Chrisman’s latest daily post, click here.

To subscribe to Joe Garrett’s news letter, send an email to  jgarrett at garrettwatts  dot  com