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Banning Home Foreclosures?
Tweet Share on Facebook April 3, 2008 CommentHere's a legislative stab at ending the housing crisis that's sure to be more controversial than most:
"Rep. Maxine Waters, the chairwoman of the House Financial Services housing subcommittee, introduced a bill Wednesday that would ban foreclosures unless lenders and services made 'reasonable' efforts to modify mortgages," The American Banker reports. "The California Democrat said the legislation is necessary because current industry efforts, including those by the Hope Now alliance, are not moving quickly enough."
"The fundamental problem is that the mortgage servicers have no legal obligation to make a reasonable effort to keep a borrower in delinquency in his or her home, even where that borrower may have been the victim of a predatory, unaffordable loan," Rep. Waters said in a press release. "The time has come to add a stick to the carrots being offered to mortgage servicers to do what it takes to stem this crisis now."
Full article is here.
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Moving Closer to Housing Consensus
Tweet Share on Facebook April 2, 2008 CommentAfter flatly rejecting proposals from Democratic lawmakers for a government-financed rescue of struggling home buyers, Treasury Secretary Henry Paulson has recently made comments that represent the strongest indication to date that the Bush administration could now be open to such a deal.
"Treasury Secretary Henry Paulson indicated the Bush administration is willing to consider congressional plans to stem foreclosures by expanding government guarantees for mortgages," Bloomberg reports. "'I think you will continue to see flexibility as we learn and go forward,' Paulson said in an interview."
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Where Are the Problem Loans?
Tweet Share on Facebook April 2, 2008 Comment (1)Wondering exactly where all those problem loans are you've been hearing about? Check out this new interactive map the New York Federal Reserve just put together:
The maps show the following information for subprime and alt-A loans for each state and most of the counties and zip codes in the United States:
- Loans per 1,000 housing units
- Loans in foreclosure per 1,000 housing units
- Loans real estate owned (REO) per 1,000 housing units
- Share of loans that are adjustable rate mortgages (ARMs)
- Share of loans for which payments are current
- Share of loans that are 90-plus days delinquent
- Share of loans in foreclosure
- Median combined loan-to-value ratio (LTV) at origination
- Share of loans with low credit score (FICO) and high LTV at origination
- Share of loans with low- or no documentation
- Share of ARMs with initial reset in the next 12 months
- Share of loans with a late payment in the past 12 months
Accompanying data tables report further statistics for states. The maps and data are drawn from the FirstAmerican CoreLogic, LoanPerformance Loan Level Data Set. For more details, see the website's technical appendices to the map and the data tables.
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Hope Now Under Fire
Tweet Share on Facebook April 2, 2008 CommentAlthough more than 4,500 people every day call Hope Now—one of the White House's key weapons in battling the housing crisis—few seem to be getting much help, the New York Times reports. "One reason is that the financial powers behind Hope Now—mortgage lenders, loan servicers and big investors—are reluctant to change loan terms substantially if doing so hurts them," the newspaper says.
"Hope Now is a failure," an executive director at one counseling agency told the New York Times. "It's industry-dominated."
But there could be other reasons for the apparently lackluster results:
But only a fraction of all callers—about 4 percent—ends up talking in person with a housing counselor, according to the Homeownership Preservation Foundation, a nonprofit group at the center of Hope Now that also has ties to the mortgage industry.
The full article is here.
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Mortgage Applications Drop
Tweet Share on Facebook April 2, 2008 Comment (1)The most recent survey from the Mortgage Bankers Association showed a roughly 29 percent week-over-week decline in the number of mortgage applications filed. "Refinancing decreased 38 percent following an 82 percent surge a week earlier, and the purchases index dropped to a five-year low," Bloomberg reports.
The press release is here.
The full article is here.
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Handicapping the Blueprint
Tweet Share on Facebook April 1, 2008 CommentWhile it would be nearly impossible for all aspects of Treasury Secretary Hank Paulson's ambitious "Blueprint for Regulatory Reform" to be enacted, it's certain that some of them will. So which parts of the plan are most likely to make the cut?
From today's American Banker:
In interviews with analysts, academics, regulators, bankers, and other industry representatives, there was widespread agreement that there is likely to be increased oversight of the mortgage market, including nonbank originators and brokers, in the near term. Looking further ahead, many saw growing momentum for an expansion of the Federal Reserve Board's powers to handle systemic market risks, a drive to merge the bank and thrift charters, and some limited regulatory consolidation.
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A New Snag for Housing’s Recovery
Tweet Share on Facebook April 1, 2008 CommentAs the Bush administration struggles to resolve the worst housing crisis in decades, it will now have to find a new boss for an agency on the front lines of the battle. Alphonso Jackson, secretary of the Department of Housing and Urban Development, capitulated to pressure from Democratic lawmakers and stepped down Monday.
"Secretary Jackson has repeatedly demonstrated that he is not in the position to provide the type of leadership that is necessary during these trying and difficult times," Sen. Chris Dodd, a Connecticut Democrat, said in a March 21 press release. "Now, more than ever, we need a HUD Secretary who can devote his full energy to solving our nation's housing crisis."
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Bailouts Won’t Work, Peter Schiff Says
Tweet Share on Facebook April 1, 2008 Comment (3)The L.A. Times , smack in the epicenter of the housing crisis, has published another opinion article opposing a government bailout of the housing market—this one by Peter Schiff, president of Euro Pacific Capital and a financial commentator:
At current levels, the average American still can't afford the average house. Despite the creativity of its new policies, Washington can't alter that math. The only mechanism to restore balance and get the credit flowing is for prices to fall steeply to a true market level, and for losses (for consumers and corporations) to be recognized and absorbed.
The full article is here.
Or, via L.A. Land post, here.
