Dodd-Frank is 2, Negative Interest Rates, Redfin, 15 Year Popular, HOAs Bite Banks, Nationalize the Street, Short Sales and 2nds, Green Homes, BofA Research, College Loans and Homeownership, Bernanke Bloated?

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(DF is 2 yrs old) Two-thirds of Dodd-Frank still not in place – By Jennifer Liberto @CNNMoney
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Monetary Insanity: ECB Considers Negative Interest Rates, Looking for Clues From Denmark; Anteaters and Hurricanes – Michael Shedlock – The ECB is now pondering monetary insanity: ECB’s Coeure says negative bank deposit rate an option – MISH’S Global Economic Trend Analysis   
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(interesting from Redfin) … By yesterday Redfin had booked as much 2012 revenue as we got all year in 2011. And weirdly for this late in the summer, new customers keep showing up at our door in greater numbers. … Redfin’s Listing Business Set to Double This Year – Some of Redfin’s growth is because of our own listing business: 41% of our June listings were under contract in less than 14 days. Every home our agents list gets promoted across our site — now for the first time the #1 brokerage site across the 19 markets we serve — and on our top-rated mobile apps. As a result, our listings get double the traffic on Redfin.com, and we’ve been selling ’em 15 days faster and for more money than the industry average. … – Redfin July 2012 Roundup

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Wanted: A 15-Year Home Loan – By AMY HOAK – Average rates on 15-year fixed-rate mortgages have been below 3% since May, leading more borrowers to consider swapping their current home loan for one with a 15-year term. Not only are interest rates on the 15-year mortgage at record lows, but the difference between the 15-year and the 30-year mortgage is unusually wide, says Freddie Mac Chief Economist Frank Nothaft. The rate on the 30-year mortgage averaged 3.53% in the week ending July 19, compared with 2.83% for the 15-year, a difference of 0.7 percentage point, according to Freddie Mac. In 2007, the spread was 0.31 percentage point. – Wall Street Journal
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(HOAs bite banks) Now It’s the Big Banks That Are Getting Foreclosed On – By: Diana Olick – CNBC Real Estate – … HOA’s, which do have the authority in many states, managed to foreclose on properties even before the banks, by using the back dues as liens. Now the homeowner associations are taking it one step further. They are going after the banks, claiming that several of the largest lenders are not paying monthly HOA/condo fees on homes they’ve repossessed and now hold as bank-owned properties (Real Estate Owned, or commonly called REO’s). …
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(nationalize them? – Chicago school) Wall Street Is Too Big to Regulate – By GAR ALPEROVITZ , OP-ED CONTRIBUTOR – NY Times
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(short sales and 2nd mortgages) Home Sales Held Hostage by Junior Lien Holders: Mortgages – By Prashant Gopal and John Gittelsohn – … Axon, working with co-investors, buys distressed U.S. home- equity loans and other junior real estate liens, often for pennies on the dollar. Investors like Axon have to be dealt with whenever a home is sold in a short sale, a transaction in which the lenders agree to accept less than what’s owed on the property. … While about 39 percent of homes that have entered the foreclosure process have more than one lien, just 4.2 percent of short sales — 5,658 transactions — completed in the first quarter were on homes with second mortgages, according to an analysis RealtyTrac performed for Bloomberg. … – Bloomberg
and
(CA) Short Sale Bill Addresses Slow Approval from 2nd Lien Holders – BY: ESTHER CHO – Rep. Jerry McNerney (D-Stockton) recently introduced a bill to speed up the short sale process by requiring subordinate mortgage lien holders to make a decision on a short sale within 45 days. McNerney’s bill proposes that if the lender does not make a decision within the given time period, the short sale will be approved on the 46th day. – DS News
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Green-certified homes sell for 9% more, study in California finds – By Kenneth R. Harney – … The study found no significant correlations between local utility rates and consumers’ willingness to pay premium prices for green-labeled homes. But it did find that in warmer parts of California, especially in the Central Valley compared with neighborhoods closer to the coast, buyers are willing to pay more for the capitalized cost savings on energy that come with a green-rated property. … – LA Times

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BofAML: Improved supply & demand healing housing market – By Justin T. Hilley – Housingwire
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(research and charts) Mortgaging your way to a college education – the burden of student debt and the impact on the starter home market. – Dr. Housing Bubble
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(running out of rope?) Bernanke May Hit Limit From Buying Too Many Treasuries
By Joshua Zumbrun  – Bloomberg

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HOEPA Primer, 7 Housing Reports, Bouncing Back, Today is 2005, FHA Net Worth Falls, AARP Report, S. FLA, Money Market Limits?, Negative Equity Data, Short Sales Rock, Eminent Domain, Suntrust, Counties Sue GSEs

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(HOEPA primer and download) Forget Plain Vanilla – How About Pickle? Proposed HOEPA Rule Threatens to Curtail Consumer Credit – by David A. Tallman, Jonathan D. Jaffe – K&L Gates

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A look at US housing reports that point to a slow and steady recovery – AP – Americans are regaining confidence in the housing market five years after it collapsed. (looks at 7 areas) – WASHINGTON POST

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US housing market ready to bounce back: Freddie Mac – First Post – The US housing sector was ready to get back to work while the construction industry continued to struggle on the jobs front, said the US mortgage giant Freddie Mac in a report.
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(chart) Housing Inventory Is Now Far Below 2005 Levels – Joe Weisenthal – Bill McBride at Calculated Risk has the definitive take on today’s new home sales data. His key point: What matters is housing inventory. It’s collapsing, and that’s going to be the key driver for prices. … Here’s his key chart. Pay attention to the bright red June line, and note how far down it is from the dark blue of 2005. … – Business Insider
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(risk?) FHA Net Worth Falls To -$23.23 BILLION As Delinquencies Rise – by Donna S. Robinson – The latest analysis by Edward J. Pinto, a Resident Fellow at the American Enterprise Institute, indicates that FHA continues to fall deeper and deeper into the “red” as a result of an increase in 30 day and 60 day delinquencies. The total net worth of FHA, when estimated using … (GAAP) stands at -$23.23 billion dollars, with a capital shortfall that could go as high as $62 billion dollars. … The total delinquency rate at present is 16.61 percent of all FHA insured loans, with 9.48 percent of loans classified as seriously delinquent. (90 days or more). This is very close to an all time record … – Realty Biz News

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(link to study) AARP Finds “Disturbing” Rate of Mortgage Debt, Foreclosure Among 50+ – by Elizabeth Ecker – Reverse Mortgage Daily

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South Florida home prices rise in June – By Paul Owers – Broward County’s median price for existing homes last month was $215,000, up 8 percent from a year ago, the Greater Fort Lauderdale Realtors said Thursday. Sales rose 1 percent to 1,310. In Palm Beach County, the median price was $225,000, 7 percent higher than June 2011, according to the Realtors Association of the Palm Beaches. Sales hit 1,361 for the month, a 14 percent increase. The shrinking supply of homes for sale is frustrating buyers and giving sellers more leverage – Sun Sentinel
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(more Big Brother?) New York Fed Backs Withdrawal Limit for Money Funds – By Christopher Condon – The Federal Reserve Bank of New York said money-market fund investors should be prohibited from withdrawing all their assets at once as a way to make the $2.5 trillion industry “safer and more fair.” Money funds should set aside a portion of every investor’s balance as a “minimum balance at risk” that could only be withdrawn with a 30-day notice, the New York Fed’s staff said today in a report. The provision would reduce systemic risk and protect small investors who don’t pull out of a troubled fund quickly, according to the report. – Bloomberg Businessweek
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HomeValueForecast.com Releases Negative Equity Data – BY: SARA ORTEGA – Negative equity in eight counties in New York and California has risen significantly since 2005 according to HomeValueForcast.com’s July Lessons from Data. … According to the report, the authors concluded that negative equity was below 5 percent for all eight counties in 2005 but then began to rise rapidly, especially in the four California counties. … – DS News 
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Short sales more rewarding than REO: RealtyTrac – Posted by kpanchuk – The market is trending towards short sales as lenders lean more heavily on disposition methods that aid distressed homeowners while making it easier for lenders to resell homes that have spent less time in a state of distress, RealtyTrac vice president Daren Blomquist told HousingWire Thursday…. the average short-sale brings in about $175,000. That is much higher than the average REO resale, with average sales hovering in the $147,000 range. – Housingwire
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(lots of good points) Eminent Domain Is No Solution to Negative Equity Problem – Frank T. Pallotta – The current fascination with a recent trial balloon proposing eminent domain as a seemingly cost-free solution for the mortgage crisis ignores the reality that it won’t solve the underlying problem. – American Banker Bankthink

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Suntrust expects decline in GSE mortgage repurchase demands – By Justin T. Hilley – Loan file requests from Fannie Mae and Freddie Mac at Suntrust are shifting to mortgages that are in earlier stages of delinquency, signaling to the bank’s executives that mortgage repurchase demands will soon decline. – Housingwire
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Counties Sue GSEs (3)

(GA) Floyd County to sue Freddie Mac, Fannie Mae for taxes – by Diane Wagner – Rome News Tribune
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(WVa) Kanawha commissioners to sue Fannie Mae, Freddie Mac [Charleston Daily Mail, W.Va.] – By Paul Fallon – Equities.com
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(avoiding transfer fees) Campbell (County, TN) mayor sues Freddie Mac, Fannie Mae – By Jamie Satterfield – … "Once defendants Fannie Mae and Freddie Mac locate a buyer for a foreclosed property, they convey the property and record the deed." But what the agencies won’t do is pay a "transfer fee" required by state law, Baird alleges. The organizations, he says, insist they are exempt from the fee. Since those fees are supposed to go into county coffers, Baird argues local governments are being robbed of money. … Knoxbiz.com

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Elder Financial Abuse

POWERED BY LENDERS COMPLIANCE GROUP

 

She was already in her late nineties, a renowned and beloved philanthropist, bearing a name that symbolizes wealth and status. Her son was already a senior citizen, when he schemed to rob her of her independence, her wealth, her properties, and her dignity. She was suffering from Alzheimer’s Disease, chronic anemia, and other ailments that affect the elderly. Properties of great value were sold without the mother’s knowledge, or with her dubious consent, and then no record was kept of the distribution of the proceeds. Roberta Brooke Astor died on August 13, 2007, at the age of 105.

 

On November 27, 2007, indictments on criminal charges were announced against Mrs. Astor’s son, Anthony D. Marshall, and attorney Francis X. Morrissey Jr.

 

The criminal charges were grand larceny, criminal possession of stolen property, forgery, scheming to defraud, falsifying business records, offering a false instrument for filing, and conspiracy in plundering Mrs. Astor’s $198 million estate. 

 

The trial of Marshall and Morrissey started March 30, 2009, and on October 8, 2009 the jury convicted Anthony D. Marshall of one of two charges of grand larceny, the most serious of a number of charges brought against him. The grand larceny conviction carries a mandatory prison sentence, meaning that Marshall could spend between 1 and 25 years in prison. Francis X. Morrissey Jr. was convicted of forgery.

 

All the money and status did not protect Brooke Astor from the depredations of her son.

 

If this happened to her, then, for most of the elderly, lacking the benefits of money and status, how may they hope to protect their financial interests from similar scurrilous plundering, when they are old and infirm?

 

The Consumer Financial Protection Bureau is involved in providing financial protection against elder abuse; indeed, it is specifically tasked with that responsibility. The Bureau’s Office of Older Americans is charged by the Dodd-Frank Act with examining certifications of financial advisors who serve elderly individuals and it plans to make recommendations to Congress on how to protect older consumers. Recently, the CFPB issued an information request regarding Senior Financial Exploitation.

 

In considering the challenges that the elderly must face in order to avoid financial abuse, the following outline of the CFPB’s recent information request should be looked upon as a set of questions, the answers to which may provide new ways and means to protect them from the snares of financial predators.

 

_________________________________________________

 

IN THIS ARTICLE

 

Announcing the Information Request

Categories

Senior Financial Advisor – Certifications and Designations

Providing Financial Advice and Planning Information

Senior Certification and Designation Information Sources

Financial Literacy

Financial Exploitation of Older Americans

Financial Exploitation of Older Veterans of the Armed Forces

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.

_________________________________________________

Rentals Are Sexy (3), Low HO Rate, BofA vs. FNMA, Eminent Domain, Realtors on Underwater, Walmart, After 50 Become A Woman, Free FC Reviews, Fed Buys Stocks?, Fed’s Next Tools

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Rental Section (3)

Rent increases pushing up housing starts but will also impact CPI – Sober Look Blog – The only positive news coming out of the US economy seems to be the housing market. Housing starts had a nice increase in spite of a slowdown across most sectors.
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Blackstone bets on housing recovery, buys 2,000-plus homes-for-rent – Ilaina Jonas – Reuters – Chicago Tribune – also – … Asset management firm TCW, which specializes in fixed-income securities and oversees $128 billion in assets, recently launched the TCW Home Place Partners fund, as an opportunity for wealthy investors to invest in the "housing turnaround" by buying foreclosed homes from banks and federal government agencies. Beazer Homes USA, Inc in early May announced Beazer Pre-Owned Rental Homes, Inc –– founded by the company and which includes an investor group led and arranged by affiliates of private equity firm Kohlberg Kravis Roberts & Co . …
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Exclusive: Ex-Goldman mortgage chief plans foreclosed home fund – By Matthew Goldstein, Jennifer Ablan and Lauren Tara LaCapra – (Reuters) – Former Goldman Sachs Group Inc. (GS.N) executive Donald Mullen, one of the architects of the subprime mortgage trade, is trying to raise at least $500 million for a fund that will buy foreclosed homes with an eye toward renting them out.
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Other News:

How low can the American homeownership rate go? – Posted by kpanchuk – The American homeownership rate fell from 69.2% in 2004 to a low of 65.4% in the first quarter of the year, but how much further does that rate have to fall? Paul Diggle, a property economist with Capital Economics, asked that question in a new research report released this morning. The future of homeownership depends a great deal on how young buyers will view homeownership in the future. – Housingwire

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BofA mortgage repurchase dispute with Fannie Mae grows to $7.9 billion in loans – By Jon Prior – Bank of America executives said Fannie Mae will either have to file litigation or agree to a settlement to resolve the dispute over mortgage repurchase claims. The bank and the government-sponsored enterprise disagree over $7.9 billion in mortgages Fannie claims BofA should buy back because of faulty origination practices, up from $3.7 billion at the end of last year. The bank said it should not have to buy back the loans because borrowers made at least 25 monthly payments on them. The claims stem from mortgages originated in 2006 and 2007 – Housingwire
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What Relief? Bank Of America Faces New Mortgage Claims Reaching $23 Billion – Halah Touryalai, Forbes  – It seems that when Bank of America puts one mortgage-related problem behind it another pops up. This time the new problem is in the form of $6.8 billion in new repurchase claims.
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Mortgage-seizing eminent domainers face Herculean task in proving public good – Posted by Justin T. Hilley – The Securities Industry and Financial Markets Association released a legal memo on Tuesday drafted by law firm O’Melveny & Myers at the request of the association that addresses what it says are legal and constitutional problems with the infamous eminent domain proposal out on the West Coast. The association then held a conference call in which it gave three reasons why it thinks the proposal does not provide an overall public good, which it must — by law: … more – Housingwire

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(realtors say underwater homeowners not a factor?) Will Underwater Homeowners Lead to Higher Prices? – BY: KRISTA FRANKS BROCK – The M Report
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Walmart’s Positive Impact On Home Prices: NBER – BY: ESTHER CHO – Despite Walmart’s ubiquity and popularity, the retailer faces local opposition when attempting to build a new store because opponents argue that the store, known for low prices, also lowers home prices in the area. A study from the National Bureau of Economic Research (NBER) explored the question of Walmart’s impact on home prices and found that the opposite appears to be true. – DS News

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(great charts) After 50: Get A Job, Work Longer, And Become A Woman – Submitted by Tyler Durden – Zero Hedge

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Borrowers wary of free foreclosure reviews – Lily Leung – Imagine trying to move on from a foreclosure, and years later, getting a letter asking if you’d consider a free review of that painful event. Would you take it or leave it? It appears few are saying yes to those offers, which lenders were required to send out under government order. Of the 4 million people who may be eligible for reviews, only 5.3 percent have actually submitted for one – UT San Diego

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ROUBINI: If Everything Goes Wrong, The Fed Will Start Buying Stocks – Matthew Boesler    – … The NYU economist – known as "Dr. Doom" and the forecaster of the "global perfect storm" for the world economy in 2013 – told Reuters’ Chrystia Freeland in an interview that the Fed may not be able to prevent the next stock market plunge. … – Business Insider

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(has 6) FOMC’s New Tools – By Walter Kurtz – Speculation on the Fed’s future tactics for economic recovery. – Minyanville

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Repurchase Demands, 2015, Refis Peaking?, QE to Infinity, LPS HPI, Homebuilder confidence, Ocwen Shared Appreciation, Eminent Domain (4), HARP Constraints, Free Market Jumbos, Delinquencies Flatten

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(good summary about GSE repurchase demands) U.S. banks haunted by mortgage demons that won’t go away – By Rick Rothacker – Reuters
* Banks under increasing pressure to buy back bad loans
* Banks say Freddie Mac and Fannie Mae getting more aggressive
* Bank of America faces biggest possible losses
 
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Foreclosures dominance of housing market projected to end in 2015 or 2016 – …. But when will that happen? Based on the most recent data from Lender Processing Services, I have extrapolated recent trends to attempt to answer that question. But first, we need to understand where we are in the process. … – OC Housing News
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Refinancing Seen Peaking Without More Capacity: Mortgages – By Jody Shenn – Mortgage-bond investors are betting the U.S. refinancing boom has little growth left, even with rates at record lows and President Barack Obama’s administration taking steps to widen access. Government-backed mortgage securities reached a record 108.6 cents on the dollar this week. Anyone bidding more than face value risks taking a loss if too many of the underlying mortgages get paid off early, so the willingness of buyers to pay those prices shows they expect restrained refinancings.  – Bloomberg Businessweek

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(we are a junkie – QE to infinity) Bernanke Sees Range Of Options For Additional Fed Easing – By Joshua Zumbrun and Craig Torres – Federal Reserve Chairman Ben S. Bernanke said policy makers are studying options for further easing that could be deployed in case economic growth remains too feeble to produce a lasting decline in unemployment.  – Bloomberg
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(lots of stats) LPS: Home Price Index Increasing at Fastest Rate Since 2005 – BY: TORY BARRINGER – … “Home prices have risen 2.5 percent so far this year, indicating an exceptionally strong spring,” said Raj Dosaj, VP of LPS Applied Analytics. “While prices typically see a boost in the spring, the magnitude and speed of this increase and its consistency across the nation have not been seen since October 2005.” … – DS News

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Homebuilder confidence highest in a decade – By Kerri Ann Panchuk – Homebuilder confidence increased by the fastest rate in nearly a decade, new data from the National Association of Home Builders shows. The key housing market index gained six points in July, increasing to 35. This is the largest one-month gain recorded by the index in nearly a decade, and brings the HMI to its highest point since March of 2007. – Housingwire

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Ocwen shared appreciation program slashes average mortgage by $75k+ – By Jon Prior – Ocwen Financial Corp.  reduced principal for 18,924 mortgage borrowers as of May as part of its shared appreciation program launched one year ago. The average monthly payment on principal and interest shrank to $624 from $1,270 before the modification was granted. Ocwen reduced an average $75,500 per loan. Fewer than 10% of the modified loans went 60 days or more delinquent six months after the workout, according to data provided to HousingWire. … Ocwen will write down qualified mortgages to 95% of the underlying property’s market value. The amount written down is forgiven in one-third increments over three years as long as the homeowner remains current. When the house is later sold or refinanced, the borrower will be required to share 25% of the appreciated value with the investor … – Housingwire
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(eminent domain will screw up the TBA market) Mortgage Seizure Fight Poised to Raise Agency-Backed Loan Rates – Jody Shenn – (Bloomberg) – A change in rules for the most liquid part of the agency mortgage-bond market as Wall Street fights municipal seizures would make even government-backed loans costlier for certain borrowers, according to JPMorgan Chase & Co. analysts. (SIFMA) has discussed with its members who set guidelines for To-Be- Announced, or TBA, trading of the debt whether to exclude loans from areas that use eminent domain powers to buy “underwater” mortgages, said Kenneth Bentsen, an executive vice president at the New York-based group. San Bernardino County, California, last month created an authority to consider the action.
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SIFMA Fires Shot, Excludes Mortgages in Localities that Adopt Condemnation From To-Be-Announced Market – Yves Smith – (money quote) … I want to be clear: I’m no fan of SIFMA or banks. But in this beauty contest between Cinderella’s ugly sisters, MRP is not coming out the winner. If the MRP people had the foggiest understanding of the mortgage market, or bothered to talk to anyone in it, they’d know that the SIFMA sabre-rattling is silly because 10 basis points is rounding error to borrowers. The fact that they’ve fallen for this close to empty threat shows what rubes they are. That alone should give San Bernardino officials considerable pause about getting into bed with them. … – Naked Capitalism

and
Mortgage bond investors fear eminent domain will contaminate TBA market – By Jon Prior – … Should municipalities such as San Bernadino use eminent domain and survive the legal challenges sure to come, the proposal would affect less than 1.5% of private-label security loans in the affected areas, according to researchers at Nomura Securities. … lots more – Housingwire
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Obama Home Refinancing Effort Hits Banks’ Risk, Capacity Limits – By Clea Benson – White House efforts to push widespread refinancing of mortgages for homeowners who owe more than their properties are worth may be limited by banks’ stretched capacity to originate loans and their concerns that the borrowers are too risky. … “There’s a huge subset of the exact borrowers they originally wanted to reach who they just haven’t been able to reach largely because the banks are not incentivized to take on these loans,” Isaac Boltansky, Washington policy analyst at Compass Point Research & Trading LLC, said in an interview. … – Bloomberg Businessweek
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(free markets work) Jumbo-loan surprise: The rich don’t need a subsidy – by Greg David – A little over a year ago, residential real estate brokers and analysts were sure the sky was about to fall in New York. The reason for the panic? Fannie Mae and Freddie Mac were planning to reduce the size of the mortgages they would buy to $625,000 from $730,000, cutting off government support to a crucial part of the city’s housing market. … They were wrong, and in that fact lies an important lesson about markets (and whining). … – hattip Ira Artman – Crain’s New York

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No better or worse: Mortgage borrowers falling behind flattens out – By Jon Prior – The amount of mortgage borrowers falling behind on payments flattened out since dropping earlier in the year. The rate of borrowers moving from current to delinquent status stayed at roughly 2.5% in June, roughly half the rate seen at the peak of the foreclosure crisis. Indeed, the rate is at its lowest level since the housing bust began. – Housingwire
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PNC Repurchase Demands, QE3 on Aug 1?, MBA on QM, Credit Bureau Oversight, Boomers vs. Young, Zuckerberg’s 1%, Rates and Housing, Eminent Domain, FNMA and SPOC, HARP, Home Equity Shocks, HO Costs Drop, Liborgate

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(GSE repurchase demands) PNC Profit Falls 40% on Costs Tied to Mortgage Putback – Bloomberg – … Net income fell to $546 million, or 98 cents a share, from $912 million, or $1.67, a year earlier, the Pittsburgh-based bank said today in a statement. … – National Mortgage News

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(gives 3 reasons why) August 1st QE3 Departure Date? – by Bill McBride – … By my count, if Bernanke decides that QE3 is appropriate, he will have 10 or 11 votes on August 1st. Maybe the FOMC will wait for more data, but I think QE3 is likely very soon. … – Calculated Risk
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MBA Warns QM Rule Could Unduly Impede Lending – By: Krista Franks Brock – … “How it is finalized – what it contains and how it is structured – will determine how many consumers have access to safe, affordable and sustainable mortgage credit for generations to come,” the trade group stated in its letter to the CFPB. The MBA warned that “without lending, the economy will not recover,” and the ability to repay/qualified mortgage (QM) rule has the potential to substantially restrict lending. … – The M Report
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U.S. Consumer Watchdog to Oversee Credit Bureaus – By VICKIE ELMER – The Consumer Financial Protection Bureau is set to announce on Monday that it will begin supervising the leading credit bureaus, the companies that collect financial details of everyone’s life. The credit bureaus join mortgage brokers, payday lenders and credit card companies among the institutions beyond banks that the bureau regulates. – NY Times Dealbook
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The twin lost decades in housing and stocks – baby boomers selling homes to a less affluent young American population. The impact of baby boomers on the housing market. – Dr. Housing Bubble

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Zuckerberg’s Loan Gives New Meaning to the 1% – By John Gittelsohn and Dakin Campbell  – …The Facebook Inc. (FB) founder refinanced a $5.95 million mortgage on his Palo Alto, California, home with a 30-year adjustable-rate loan starting at 1.05 percent, according to public records for the property. While almost all lending rates have reached historical lows this year, the borrowing costs available to high-net-worth individuals are even lower if the person is willing to bear the risk of monthly interest rate adjustments, said Greg McBride, senior financial analyst with Bankrate Inc. … “When you can borrow at a rate below inflation, you’re borrowing for free,” McBride said in an e-mail. “This is the concept of using other people’s money and it preserves financial flexibility for the borrower.” … – Bloomberg

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(interesting charts and commentary) Low Mortgage Rates Stimulate Housing – David Sims – Seeking Alpha

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SIFMA Statement On the JPA’s Proposed Use of Eminent Domain to Take Mortgage Loans – SIFMA Press Release

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White House Skeptical of Plan to Seize Mortgages by Eminent Domain – WSJ Economy Stream – The Obama administration has concerns with a proposal—backed by a one-time major fundraiser to President Barack Obama—that would use eminent domain to seize and restructure mortgages.
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Fannie Mae to train mortgage servicer single points of contact – By Jon Prior – Fannie Mae opened training to call center employees at mortgage servicing shops around the country. A total of 18 servicers adopted the Know Your Options Customer Care program over the last year, … Fannie will provide scripting for receiving calls from homeowners and help installing other quality controls. Servicers with at least 1,000 delinquent Fannie loans will be asked to join the program, which will be free of charge … – Housingwire
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More underwater borrowers shorten mortgage under HARP – By Jon Prior – More Fannie Mae and Freddie Mac borrowers who owe more on their mortgage than their home is worth chose to refinance into shorter-term loans in order to rebuild equity faster, according to the Federal Housing Finance Agency. Roughly 19% of homeowners who are more than 5% underwater chose 15- and 20-year terms when offered a workout under the Home Affordable Refinance Program. That percentage is more than double the average in 2011, according to the FHFA report. – Housingwire

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FHFA: HARP Represents 20% Of Refinance Market – by MortgageOrb.com – Loans connected to the Home Affordable Refinance Program (HARP) represented 20% of total refinance volume in May, the largest increase since the program was launched in 2009, according to new data from the Federal Housing Finance Agency (FHFA). … During the first five months of this year, more than 78,000 refinances were completed, exceeding the total HARP refinances during all of 2011. In May, borrowers with greater than 105% LTV accounted for nearly one-third of HARP volume.
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(payment shocks coming) Here Comes the Catch in Home Equity Loans – By GRETCHEN MORGENSON – … During the initial years of home equity credit lines, borrowers must pay only interest. … What’s known as the initial draw period for home equity lines of credit is coming to an end for many borrowers. Soon, they will have to pay principal as well. … While $11 billion in home equity lines are starting to require principal and interest payments this year, the amount jumps to $29 billion by 2014, the office said. That is followed by a surge to $53 billion in 2015 and $73 billion in 2017. For 2018 and beyond, it’s $111 billion. … – NY Times

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(lower rates is why – charts and tables) Monthly cost of home ownership down over 50% from 2006 – OC Housing News

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Liborgate Section: 3 more

(endless lawsuits continued) Analysis: Wall Street may face Libor legal threat from small banks – By Tom Hals – (Reuters) – The thousands of community banks have often said their much larger counterparts have trampled on them. Now some hope the latest Wall Street scandal could give them ammunition to strike back.

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New York Fed to Barclays: ‘Mm hmm’ – If Libor-fixing is such a great scandal, why did Geithner and other regulators do so little? – Wall Street Journal

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House panel to probe LIBOR scandal; CalPERS might seek damages – By Jim Puzzanghera and Marc Lifsher – A House committee is launching a bipartisan investigation into allegations that large banks rigged a key interest rate and plans to question Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Timothy F. Geithner at upcoming hearings. At the same time, officials at the country’s largest public pension fund, the California Public Employees’ Retirement System, said Monday they were examining the impact of the rate-fixing scandal and might seek damages if they could be calculated. – LA Times

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Zero-Rate Policy as a Depressant, Not Simulant, of Economic Growth–Nom de Plumber’s Thought of the Day

  Nom de Plumber is a Nom de Plume

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Report from HSBC: Living With Negative Yields:    http://av.r.ftdata.co.uk/files/2012/07/Living-with-negative-yields.pdf

NDP says: With zero or even negative interest rates, consumers will retreat if their motivation is sustainable future consumption (retirement) rather than debt-financed current consumption.  

Thank you.

FHA to Sell 9k DQ Mortgages, Demographics, HOPE Hotline Calls, Freddie on Rates, FC Risks, Credit Worthiness, CFPB Rules Wave Coming, Underwater and Shadow Inventory, UBS Next?, Low Rate Chats, David Rosenburg, REO Held Off Market

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FHA readies sale of 9,000 delinquent mortgages – By Jon Prior – The Federal Housing Administration began qualifying investors to bid on 9,000 delinquent loans. Roughly 3,5000 of the mortgages underlie properties in Chicago, Phoenix, Tampa and Newark, N.J., according to details on the loan pool released Wednesday. Investors buying these loans can only push half of them through foreclosure and resell the homes as REO. – Housingwire

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(disability payments are why – many charts) Demographic Time Bomb in Pictures and Dollar Amounts; Ratio of Social Security Beneficiaries to Private Employment Now Exceeds 50% – Michael Shedlock – MISH’S Global Economic Trend Analysis

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Increase in Calls to HOPE Hotline Could Signal Next Foreclosure Wave – BY: SARA ORTEGA -  A surge in increased calls to the Homeowners HOPE Hotline, which helps distressed homeowners navigate financial challenges, could signal a possible new wave of foreclosures according to a report released by the Homeownership Preservation Foundation (HPF). … … calls to the hotline from homeowners who are current with their mortgages are up 70 percent this year. Of those counseled, half stated that “mounting instability” to continue payments could cause them to default. – DS News

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Freddie Mac economist says recession could drive mortgage rates even lower – By Hudson Sangree –Sacramento Bee

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(foreclosure risk) Has Your Bank Advised You To Skip Mortgage Payments? – by Donna S. Robinson – … If you do receive this kind of advice from your lender or loan servicer, the rub is it’s probably true, but it may also result in foreclosure. Most folks don’t realize that the department talking to you about your loan is not the same department that will handle foreclosing on you. In fact, they may not even be in the same state, and they may even work for different companies. These departments do not communicate closely, and often “the right hand does not know what the left hand is doing” so to speak. … – Realty Biz News

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(interesting logic) Reader Questions on "Credit-Worthiness": Did Banks Give Mortgages to Non-Creditworthy Borrowers? – Michael Shedlock – MISH’S Global Economic Trend Analysis 

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(mortgage rules coming) Consumer bureau poised to unleash rules – Kathleen Pender- … Beneath the surface, the bureau – which turns 1 Saturday – has been feverishly laying the groundwork for a flood of new regulations and enforcement actions. It already has more than 900 people including about 20 in San Francisco. "Things are about to reach a crescendo. Between now and Jan. 21 you will see an avalanche of regulations dealing with mortgage lending," says Alan Kaplinsky, a partner with law firm Ballard Spahr who represents financial companies. "Once that gets out of the way, they will turn to other product classes." … – SF Chronicle

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10 Million Underwater Mortgages And Shadow Inventory Worth $246B Mean Housing Trouble – Agustino Fontevecchia, Forbes  – … Despite the first monthly increase in home prices in 7 months, as the Case-Shiller indexes showed on Tuesday, there are still more than 10 million properties with underwater mortgages, and a shadow inventory of 1.5 million, or four months supply.  Negative equity will continue to take its toll on consumption, while the shadow inventory, worth about $246 billion according to CoreLogic, will constrict lending and probably affect banks’ earnings. …

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(Liborgate – UBS next?) U.S. Is Building Criminal Cases in Rate-Fixing – BY BEN PROTESS AND MARK SCOTT – NY Times Dealbook

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(low rates around the world 7 charts) The Entire World Is Experiencing The Opposite Of A Sovereign Debt Crisis – Joe Weisenthal – Business Insider – None of this is actually "good" news. … What this essentially means is that there’s a lot of money out there that sees no productive investments in the real world,  … It’s about a growth-deficient world, governments being the one place that can absorb all this money. …

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David Rosenberg’s Brilliant Demographics Chart That Explains Why Treasuries Are Surging And Stocks Are Going Nowhere – Joe Weisenthal – Business Insider
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‘Shadow REO’: As Many as 90% of Foreclosed Properties Held Off the Market – By Teke Wiggin – The Street.com
and
RealtyTrac, CoreLogic Confirm Housing Bear Thesis: 85-90% of REO Being Held Off Market, Meaning “Tight” Inventories Are Bogus – Yves Smith – Naked Capitalism

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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 garrettmcauley dot  com

Disclosure Integration, High Cost, and Counseling

POWERED BY LENDERS COMPLIANCE GROUP

 

On July 9, 2012, the CFPB issued its proposed integration of RESPA and TILA disclosures into the "integrated" forms, entitled "Loan Estimate" and "Closing Disclosure". These new forms are derived from the Good Faith Estimate (GFE), the Truth-in-Lending (TIL) Disclosure, and the HUD-1/1A Settlement Statement. This assemblage has been duly dubbed with the euphemism "integration".

 

Excluded from the forthcoming integration are reverse mortgages, home equity lines of credit (HELOCs), chattel dwelling loans, and de minimis originations consisting of loans made by creditors who make five or fewer otherwise covered loans per year.

 

I have covered the process of constructing these forms in several newsletters and articles, including HERE, and HERE.*

 

The CFPB is not expecting to finalize the integration before the end of this year. Comments are due November 6, 2012.

 

However, there is a comment deadline of September 7, 2012 – which will lead to rulemaking before January 2013 – regarding the extent to which the rule applies to loans previously exempted from RESPA or TILA and the further redefining of the term “finance charge” to include most costs associated with residential mortgage loans.

 

By its own admission, the CFPB has stated that the proposal to "broaden" the definition of a "finance charge" by adopting certain adjustments or accommodations in its HOEPA implementing regulations under Regulation Z, would "cause more loans to exceed the APR and points and fees triggers and be classified as high-cost mortgages under HOEPA."

 

The CFPB has also set forth proposed rules to implement Dodd-Frank amendments regarding high-cost mortgages and also to provide homeownership counseling provisions that would affect mortgage lending generally (with no exclusion for HELOCs).

 

The implications of these rules, taken together, are far reaching. I would suggest that you visit our Library for further information.

 

___________________________________________________

IN THIS ARTICLE

“Loan Estimate” and “Closing Disclosure”

Integration

High-Cost Mortgages

Homeownership Counseling

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.

 

*Jonathan Foxx is the President & Managing Director of Lenders Compliance Group

5yr UST Rates Record Low, 3 Proposed Bills on Refi, CA FCs, MERS and AG Biden, Banks Resume FCs, FA Defaults, CFPB on DTI and QM, HO Fraud, Annaly Commentary, WSJ: Home Bust Over, New FICO Borrower Score, Wells Broker Exit, Private MBS Market, Eminent Domain Section

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(affects arms – chart too) The 5yr treasury yield hits a record low – Sober Look Blog – The recent compression in US treasury yields has been nothing short of extraordinary. Driven by the full realization that we are in a global slowdown, the 5-year hit a record low today of just under 0.6%, following a decline that has been ongoing for decades.

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(3 bills proposed – details) (Shaun) Donovan: Expanding refinancing programs will be ‘a real fight’ – By Jon Prior – Housingwire

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Foreclosure Report: California "Homebuyers should brace themselves for significantly less inventory next year"- by Bill McBride – (links and comment on both)
1. RealtyTrac released their midyear foreclosure report this morning: 1 Million Properties With Foreclosure Filings in First Half of 2012
2.  .. And from Foreclosure Radar (just a few states): Foreclosure Inventory Continues To Decline … – Calculated Risk

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(slap on wrist? – read comments) DELAWARE AG BIDEN SETTLES WITH MORTGAGE ELECTRONIC REGISTRATION SYSTEMS (MERS) – Posted by 4closureFraud

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Housing Rebound Signaled As Banks Resume Foreclosures: Mortgages – By Prashant Gopal – U.S. lenders are notifying more delinquent homeowners they face foreclosure, a step toward clearing a backlog of properties and helping to accelerate a housing recovery. Initial notices of foreclosure, the start of the process, jumped 6 percent in the second quarter from a year earlier, the first annual increase since 2009, according to RealtyTrac Inc., a seller of housing market data. Banks at the same time found alternatives to the final step of seizing the home, either by working with the borrower or by agreeing to sell properties for less than what was owed, with repossessions falling 22 percent. – Bloomberg

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FHA bailout inches closer – FHA defaults surge 26 percent while upping mortgage insurance premiums to make loans more expensive. Foreclosure starts outnumber foreclosure sales 3 to 1. – Dr. Housing Bubble

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CFPB considering alternative to 43% DTI ratio under QM – Jon Prior – … Eric Stein, senior vice president at the Center for Responsible Lending, took part in a clearinghouse that developed some of the alternatives and pitched them to the CFPB. "We set a backend DTI as the baseline at 43%, which is (the Federal Housing Administration’s) manual underwriting. Anybody under 43% would be QM but we recognized that there are a lot of borrowers who can afford a 43% DTI and should be the safe type of home loan," Stein told the committee. "So we added a lot of other factors that lenders have used historically, … If any of those are true you could also become a QM." … – Housingwire

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Homeowner fraud outpaces mortgage origination fraud: LexisNexis – By Justin T. Hilley – For the first time in recent history, distressed homeowner fraud has displaced loan origination fraud, according to findings in a report by LexisNexis Risk Solutions. – Housingwire
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Annaly Capital Management Releases Market Commentary for the Second Quarter 2012 – Company Release – Mortgages mentioned

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WSJ: The U.S. Housing Bust Is Over – by Bill McBride – Something I’ve been saying for months, from the WSJ: The U.S. Housing Bust Is Over – Calculated Risk
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New Credit Score System Finds Many Borrowers Less Risky – By Karen Weise  – … We always knew that most people have decent credit. It turns out, about 44 percent of the U.S. population has crazy good credit. That’s according to a new way to model credit risk from Fair Isaac Corp. (FICO) and the data firm CoreLogic (CLGX). On July 10 the companies launched a new credit score that combines the data that credit bureaus typically track, such as mortgages and credit cards, with outside data CoreLogic mined from public records, like property records and liens, and from its proprietary sources, such as short-term installment loans for used cars and rental information. “By having that added visibility, we are able to get a more precise score and picture of the borrower,” … – Bloomberg Businessweek
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(tells why?) What Wells Fargo’s Broker Exit Means for Borrowers – By Nick Timiraos – … Wells Fargo & Co. announced that it would stop buying loans from mortgage brokers, … just 5% of its originations … (why) Wells made the announcement on the same day that it agreed to a $175 million settlement over allegations that the company discriminated against black and Hispanic borrowers during the housing boom. … Many of those loans had been sold by independent brokers, … – Wall Street Journal
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(don’t hold your beath) Will Stable Home Prices Make Investors Buy Mortgage Securities? – By: Stephanie Dhue, CNBC – … “The biggest challenge to reviving the private mortgage market is the radically underpriced government guarantees that the GSE’s provide, which makes private competition impossible with taxpayer funded support,” says Tom Deutsch, who heads the American Securitization Forum, which represents market participants. …

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Eminent Domain Section:

No Wonder Eminent Domain Mortgage Seizures Scare Wall Street – (Congressman) Rep. Brad Miller – American Banker
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Bondholders See Eminent Domain as State Attack: Mortgages – By Jody Shenn and John Gittelsohn – Bond investors who will be needed to reduce taxpayers’ role in U.S. mortgage lending have a new reason to stay away: the threat of outright confiscation by local governments. A plan under consideration in San Bernardino County, California, would use a local government’s eminent domain authority to confiscate and write down mortgages for borrowers who are underwater on their loans, meaning they owe more than their houses are worth. The plan would raise borrowing costs and deter private lenders from returning to the $10 trillion mortgage market, according to bond buyers such as Pacific Investment Management Co. and AllianceBernstein LP. – Bloomberg Businessweek
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Eminent Domain Is Bad Mortgage Fix: Rep. Schweikert – GOP Congressman from Arizona – … Eminent domain will dry up whatever private capital has been enterprising enough to reenter the mortgage market since the housing crash. With credit drying up, bond yields will rise, driving up borrowing rates for homebuyers. It will be a perfect storm of escalation, borne by a well-intentioned but shortsighted attempt to rectify the housing market crisis. … – CNBC.com

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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 garrettmcauley dot  com