Mortgage foreclosure settlement – a solution?

Sarah Portlock writing in The Star-Ledger reports on the settlement of the New Jersey Supreme Court’s involvement in the mortgage foreclosure crisis. The settlement “will require six of the country’s biggest mortgage lenders to disclose the specifics of how they foreclose on homeowners has been” court approved.

“Under the agreement, retired Judge Richard Williams will review the lenders’ foreclosure processes to ensure all filed documents are based on personal knowledge and accurate business records. He also has the power to periodically review a sample of future foreclosures.”

Nonsense. Can anyone define “personal knowledge” in the day of e-commerce where everything, absolutely everything is compiled, kept and disseminated electronically? We no longer live in the days of bookkeepers wearing eyeshades sitting hunchbacked over ledger books.

“The settlement was made public two weeks ago, and comes four months after Chief Justice Stuart Rabner issued a three-part initiative to investigate what could be rogue foreclosure filings, noting a staggering increase in caseload and concerns judges had inadvertently "rubber stamped" files that had inadequate or inaccurate paperwork. In response, the banks argued they had already revised their foreclosure procedures.”

Read - Judge approves settlement to review mortgage foreclosure process

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

Sphere: Related Content

Federal Housing Finance Agency extends the Home Affordable Refinance Program for one year

On March 11, 2011, the Federal Housing Finance Agency (FHFA) announced a one year extension of the Home Affordable Refinance Program (HARP) to June 30, 2012. The program expands access to refinancing for qualified individuals and families who are current on their mortgage payment and who have loans owned or guaranteed by Fannie Mae or Freddie Mac with loan-to-value ratios of between 80 percent and 125 percent. Since the beginning of the program in 2009, Fannie Mae and Freddie Mac have purchased or guaranteed 621,803 loans under HARP (190,180 in 2009 and 431,623 in 2010).

Read FHFA press release.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

Sphere: Related Content

Are you tough enough to buy at a foreclosure auction?

Bankrate.com has a wonderful article, “Hassles of buying foreclosures at auction,” written by Clark Palmer.

We get calls from time to time from prospective foreclosure property bidders who just can’t pass up a bargain. The article will set you straight.

Highlights:

• The process has plenty of snags to snare the unwary foreclosure buyer.
• The condition of a foreclosed home is a mystery; it could be plumbing-free.
• Consider the time and expense of repairing a handyman's special.

“An expert's single word of advice for folks who dream of buying a foreclosed house at auction: Don't.”

"’I caution anyone who isn't in the (real estate) business: Buying (at auction) can be one of the worst decisions you'll ever make," says Jim Hamilton, a Realtor in Los Gatos, Calif. Another bit of counsel from Hamilton: If you want to buy foreclosures at auction, plan on making that your full-time job.”

If you consider that “buying a house is like navigating an obstacle course, then buying a foreclosure is like crossing a minefield.”

Traps for the unwary.

First of all, you have to pay cash.

“And you're paying for all of the loans, back interest, taxes and attorney's fees on the property. So if the house is worth $300,000, the opening bid could actually be $400,000. By the time you outbid everyone, you could be paying a lot more than that.”

If the homeowner files bankruptcy on the day of the auction, or, in New Jersey, within 10 days of the sale, you won’t get your deed and will have to wait for return of your deposit.

A perfect house for stargazers.  Even if you work out those issues, you don't know the condition of the property.

People could still be living there. The house could be gutted -- missing copper and plumbing fixtures, or even roofless, Weintraub says.

Finally, “the bank isn't going to tell you all that much about the house.” Inspect on your own if you can.

And, if you find them, who will fix the problems?

Ask yourself if you have the money, time, patience and support from the people around you to repair any problems with the house. "You need to be realistic about those questions. If the answers to any of those questions is 'no,' this probably isn't the house you're looking for," Hamilton says.

Read the full article.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

Sphere: Related Content

Adjustable Rate Mortgages becoming popular again?

The New York Times Lynnley Browning reports on the move back to the once despised adjustable rate mortgage.

“IN the years since the financial crisis, adjustable-rate mortgages, or ARMs, with their low initial interest rates that changed over time, have been considered riskier than fixed-rate loans and shunned by most buyers. But these days more people are being persuaded to give the loans a try.”

However, the mortgage seems to have learned one lesson of the mortgage melt down.

“This time around, lenders are rolling out more conservative ARM products — without the gimmicky extra-low “teaser” rates that adjust every six months, or the “pick-a-pay” and “option” features that allow borrowers to pay less than the monthly interest, only to be hit with a huge bill down the road.”

“Those ARMs were hallmarks of the subprime mortgage boom that fueled the soaring rate of mortgage defaults and home foreclosures nationwide.”

Lenders ranging from Equity Now in New York to Bank of America are increasing the number of ARM transactions.

“Mortgage brokers and lenders say the loans most in demand are the “5/1” and “7/1,” in which the initial interest rate is fixed for the first five or seven years — after which many homeowners typically think about selling or refinancing anyway — then adjusted annually at a capped rate toward a maximum level.”

While many have railed against the risk inherent in changes of interest rates over time, I believe history reveals that ARMs were safe due to caps on increase amounts at each step and over the lifetime of the loan. For a homeowner who plans on selling within a few years, the ARM may give her a nice discount in rate.

Starting rates are usually one to one and a half percentage points below those of 30-year fixed-rate loans.

“But one catch is that getting an ARM may now be harder.

“Last summer Fannie Mae, the government buyer of home loans, said lenders must qualify borrowers on either the initial rate plus two percentage points, or on the full index rate to which the initial rate is tied, whichever is greater.”

While ARMs may be attractive to some, it’s doubtful that the number of ARM transactions will approach the 1994 high of about 70 percent of all home purchases.

Read the full report More Borrowers Are Opting for Adjustable-Rate Mortgages

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

Sphere: Related Content

Soldiers foreclosed. How could it happen?

The New York Times reports,

“The Justice Department is investigating allegations that a mortgage subsidiary of Morgan Stanley foreclosed on almost two dozen military families from 2006 to 2008 in violation of a longstanding law aimed at preventing such action.”

It seems that

“Saxon Mortgage Services, is one of several mortgage and lending companies being investigated by its civil rights division. The inquiry is focused on possible violations of a federal law that bars lenders from foreclosing on active-duty service members without a court hearing.“

“[A]s many as 23 military foreclosures were under scrutiny in the Justice Department investigation.”

Federal, and many state, laws have what’s called a “civil relief act” designed to protect active duty service men and women from being foreclosed. Federal law requires a judge to

“hold a hearing at which the service member is represented before granting a lender the right to foreclose on the service member’s home, even in states where a court order is not required for civilian foreclosures. As early as 2005, advocates for military families were complaining that banks and other lenders were frequently violating the law.”

Read the full article U.S. Inquiry on Military Family Foreclosures

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

Sphere: Related Content

F.H.A. promises underwater homeowners some oxygen

The New York Times reports on underwater properties. As we’ve previously written, these underwater properties are not burdened by spring storms but by depressed property values. In other words, the property is now worth less than the homeower’s mortgage.

“STRUGGLING homeowners who owe more on their mortgages than their properties are worth have had few options to restructure their loans, but that may soon be changing for a few of them.

“Six months after the Federal Housing Administration announced an $11 billion refinancing initiative for these “underwater” borrowers, nearly two dozen lenders have agreed to take part in a new loan modification program.“

Unfortunately, Fannie Mae and Freddie Mac will not participate.

“The F.H.A. program — called Short Refi — requires major concessions from lenders, which must agree to write off at least 10 percent of the principal balance, and from investors, who, if they own the mortgage, must also agree to the deal.“

How does a homeowner qualify?

To qualify, homeowners must be current on their monthly mortgage payments and not already have an F.H.A. loan.

Loan to value cannot exceed “97.75 percent of the current value of the property; refinanced loans for homeowners whose properties carry second liens cannot exceed 15 percent of the property value.”

Wells Fargo and Ally Financial, formerly known as G.M.A.C., have created test programs for the new F.H.A. program. Bank of America, Citibank and JPMorgan Chase are not participating in the program because Fannie Mae and Freddie Mac are not.

“HUD estimated that 500,000 to 1.5 million borrowers could be eligible for the program.“

But the program may be short-lived as the House has voted to repeal the program. But good news may be out there.

“One mortgage expert, John DiIorio, the owner of 1st Alliance Lending, said that big banks were taking part behind the scenes, by referring homeowners to third-party lenders that could restructure their mortgages. He added that 1st Alliance had “several hundred F.H.A. Short Refi” loans in the pipeline.“

“But he said lenders and investors had agreed to reduce principal for only half of the loans he had worked on.”

Underwater loans have been the bane of homeowners throughout New Jersey. Maybe this program will give them some relief.

Read the full article More Loan-Modification Options for the ‘Underwater’.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

Sphere: Related Content

More problems in getting a mortgage.

Marc Santora of The New York Times writes about “New Worries for Buyers Seeking Mortgages.” Frankly, there are horror stories out there about getting mortgages.
For one prospective apartment buyer,

“the moment she stepped into the two-bedroom apartment at 59th Street and First Avenue, with its oversized windows and sweeping views of the Queensboro Bridge, she just knew.”

And her offer was accepted.

“That was in August. But it was only in February, nearly six months later, that she finally closed on the $1.15 million apartment.

“In the intervening months, as she battled through a computer glitch and reams of documentation, Ms. Herman underwent a crash course in the complexities of navigating the mortgage market — which itself continues to undergo profound change.”

“The dread of not finding a lender after the market collapsed in 2009 has been replaced by uncertainty, confusion and frustration. According to brokers and lenders, the list of demands that stand between finding a place to buy and signing on the dotted line simply never stops morphing.“

And it looks as though more change are coming to the mortgage market as the Obama administration plans to reduce the role of the federal government in the mortgage market by, for instance, lowering the limit on loan amounts for loans to be bought by Fannie Mae and Freddie Mac as well as reducing loan amounts for FHA and VA loans.

“And let’s not forget the federal government’s proposal to eliminate the mortgage interest tax deduction for high-income earners; the changes in the way brokers will be compensated because of new regulations; and the fact that banks — despite recent profits — are still leery of lending. Taken together, all these elements create a situation that can paralyze potential buyers.“

The result of all this is that

“confusion and uncertainty can have the same impact as fear, unfortunately,” said David S. Marinoff, a mortgage broker and managing director of the Guard Hill Financial Corporation.“

Summing up the problems facing the market is this from Jonathan J. Miller, the president of the appraisal firm Miller Samuel and a market analyst for Prudential Douglas Elliman,

“housing does not truly recover until lending does. It is currently dysfunctional.”

Once again the crystal ball goes dim.

Read the full story.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

Sphere: Related Content

MERS – Who’s to blame?

The New York Times lays part of the blame for the mortgage collapse at the feed of the Mortgage Electronic Registration System, Inc., we all know as MERS. In a report headlined “MERS? It May Have Swallowed Your Loan” By Michael Powell and Gretchen Morgenson.

“Never heard of MERS? That’s fine with the mortgage banking industry—as MERS is starting to overheat and sputter. If its many detractors are correct, this private corporation, with a full-time staff of fewer than 50 employees, could turn out to be a very public problem for the mortgage industry.”

“Judges, lawmakers, lawyers and housing experts are raising piercing questions about MERS, which stands for Mortgage Electronic Registration Systems, whose private mortgage registry has all but replaced the nation’s public land ownership records. Most questions boil down to this:

“How can MERS claim title to those mortgages, and foreclose on homeowners, when it has not invested a dollar in a single loan?

“And, more fundamentally: Given the evidence that many banks have cut corners and made colossal foreclosure mistakes, does anyone know who owns what or owes what to whom anymore?”

As courts have stepped in to protect defaulting homeowners from the specter of foreclosure, every angle to stick it to the banking industry (and thereby the rest of the consuming public.)

We in the title industry were introduced to MERS as a convenient way to insert a nominee in the chain of title to a mortgage. Gone would be the days of lost assignments of mortgage and deeds of trust—something that gave us many a nightmare.

Instead, this admitted convenience to lenders and the real estate industry has now jumped up and bit the banking industry in the butt.

Examples:

“The Arkansas Supreme Court ruled last year that MERS could no longer file foreclosure proceedings there, because it does not actually make or service any loans. Last month in Utah, a local judge made the no-less-striking decision to let a homeowner rip up his mortgage and walk away debt-free. MERS had claimed ownership of the mortgage, but the judge did not recognize its legal standing.”

“And, on Long Island, a federal bankruptcy judge ruled in February that MERS could no longer act as an “agent” for the owners of mortgage notes. He acknowledged that his decision could erode the foundation of the mortgage business.”

MERS was designed to streamline the ownership system in the days of mortgage securitization “but critics say the MERS system made it far more difficult for homeowners to contest foreclosures, as ownership was harder to ascertain.”

Challenges to MERS were raised by county clerks around the country. After all, they would be cut out of a lucrative source of income raised from recording assignments of mortgage, but they lost in light of the nation’s desire to speed up the mortgage process.

“We lost our revenue stream, and Americans lost the ability to immediately know who owned a piece of property,” said Mark Monacelli, the St. Louis County recorder in Duluth, Minn.” (Oh please.)

“Some experts in corporate governance say the legal furor over MERS is overstated. Others describe it as a useful corporation nearly drowning in a flood tide of mortgage foreclosures. But not even the mortgage giant Fannie Mae, an investor in MERS, depends on it these days.”

In any event, MERS is being made the whipping post for a larger problem—greed of lenders and borrowers.

Read the full article at MERS? It May Have Swallowed Your Loan

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

Sphere: Related Content

Is the bad news about the housing market coming to an end?

Simon Constable writing in the Wall Street Journal thinks

“There might finally be some good news this year about the nation's dismal housing market. Or, at least, the bad news could stop.”

“Either way, it will be welcome relief for current homeowners as well as for potential real-estate investors. Reasons to be optimistic have been sadly lacking since the housing bubble burst in 2006.”

Constable points to the continuing decline in the S&P/Case-Shiller home-price index that fell again for the fifth month.

What are the signs that the bottom is close?

“Houses Are a Good Deal. Housing is the most affordable it has been in decades, according to analysts at Moody's Analytics. They don't just look at house prices. They also look at incomes.”

“Nationally, the cost of a house is the equivalent of about 19 months of total pay for an average family, the lowest level in 35 years. Prices usually average close to two years' pay, although that varies nationally.”

“Investors Stepping Up. Here's another sign the market is nearing a bottom: Investors have started to buy up houses and condos, in some instances paying entirely in cash. That's a far cry from the heady bubble days when borrowed money seemed the key to riches. The bubble-era speculators who got burned tended to buy at the peak and borrowed heavily to do so. When the crash came, they quickly saw their wealth erased.”

“Plan to Stay Put. Buy and hold. While the good news is that the worst of the housing crash might be over, the bad news is that the fast gains of the glory days of 2005 and 2006 won't be back any time soon. So to cover the costs of buying and selling, and what could be a prolonged recovery, plan to own for more than 10 years, explains Jack Ablin, chief investment officer at Chicago-based Harris Bank.”

“Home Buying Without a House. There are other ways to benefit from a real-estate rebound than directly buying a house. Such investments include stocks, mutual funds or exchange-traded funds. Unlike homes, which typically cost tens of thousands of dollars, these financial investments can be made in smaller amounts and typically are easy to sell.”

Is this the light at the end of the tunnel or a locomotive bearing down on us.  Time will tell.

Read the full article.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

Sphere: Related Content