12312

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This is my debut on Dave Lykken’s radio program. He has  124,000 people registered, and gets 5000+ downloads per week. BC

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Welcome to Under the Radar and thanks to Dave Lykken for the opportunity to share neglected mortgage news with you.

My name is Bill Coppedge. I am a Senior Managing Director at Fay Servicing in Chicago, and the force behind Mortgage News Clips, a mortgage news aggregation blog that has been around for 15 years.

My blog showcases news stories that affect the professional mortgage practitioner. I find  mortgage news you might otherwise miss.

This segment of Dave’s program will showcase two mortgage news items you might not have seen.

Item 1: Rental buyers and the Lease to Own market

Developing a Lease-to-Own Market – by JACK GUTTENTAG   – The Mortgage Professor
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Reasons people buy homes and reasons people rent, including the bad ones – OC Housing News 
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(read this outstanding) Bulk Investors And The Real-Estate ‘Recovery’ – Submitted by Tyler Durden – Via Pater Tenebrarum of Acting-Man blog – Zero Hedge 
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Item 2:  Some loan modifications are not working! Loans that have been modified are defaulting again – at what appears to be an accelerating pace.

(Non-agency) Modified-Mortgage Defaults Soar 24% in Looming Housing Challenge – By Jody Shenn – (Bloomberg) — New delinquencies on reworked mortgages held by bonds without government backing jumped in September, a sign that some of the fuel for housing’s recovery isn’t sustainable, according to JPMorgan Chase & Co. – has stats – Bloomberg Businessweek   
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(charts and comments) Borrowers with modified mortgages re-default as homes re-enter shadow inventory – Sober Look Blog – … We think we are now seeing a wave of re-defaults from the modifications over the last two years that failed. This wave should last through 2013, and a greater share of current-to-30 rolls will come from re-defaults going forward. …  
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Loan modification defaults soar 24%, can-kicking fails – …  When a borrower has gone Ponzi, the “rough patch” is when they are cut off from more Ponzi borrowing.  … – OC Housing News http://ochousingnews.com/news/loan-modification-defaults-soar-24-can-kicking-fails

Possible reasons mods in private label deals are re-defaulting more (thanks James D!) :
1. Private label deals pay 25-50 bp in servicing fees, with no requirements for special servicing, which costs more. The existing servicing staff, ill equipped to handle mods is forced to do them with few resources to follow-up.
2. Some mod programs were available, not taking into account how underwater the borrower was. Some mods were done for political expediency, which in effect kicked thee can down the road. The can has stopped rolling, and re-defaults have risen.

It will be interesting to see if this re-default up trend continues

My employer, Fay Servicing has some of the lowest re-defaults in the industry, just under 10% six months after modification.

To get further details about today’s stories, my blog, and Fay Servicing  go to this special weblink  http://mortgagenewsclips.com/12312

Thanks for listening today and see you next week. This is Bill Coppedge 

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