Rockland Rogues Rugby Football Club came in second in a round robin tournament held today in New Rochelle, NY. Leading the Forwards with a try was Will Castillo. Rockland won clean ball in rucks and scrums; though losing some ground in line-outs and penalty plays. The other teams had an average player age of 20 while Rockland had an average player age of 28 with Carl Mariuz and John Schwarz tilting the average (way up).
Rockland kicks off its first season after reforming, September 11th at Tallman Mountain State Park, Tallman, NY.
Federal Reserve officials attending a Fed conference reviewed the housing crisis and called for more programs to address broader issues.
Eric Rosengren, president of the Fed’s Bank of Boston, said he is in favor of a more “holistic” approach.
“My own view is that too little focus has been on community problems because the focus has been more targeted to housing and foreclosures,” Rosengren said. “Rather than treating the symptom — the high REO problem — we need to better understand how to resolve the more general problems in communities that lead to higher concentrations of REOs and exacerbate the effects of high REOs.”
Sandra Pianalto, president of the Federal Reserve Bank of Cleveland, told attendees of the conference that the Fed feels a “great sense of urgency” to get housing back on its feet.
“A healthy housing sector is critical both to the overall economy and to a sustainable economic recovery,” Pianalto said.
Source: Reuters News (09/02/2010)
Fannie Mae says it will begin fining loan servicers who take too long to complete foreclosures once it’s been determined that delinquent borrowers don’t qualify for a loan modification or other alternatives like short sales.
The fines — or “compensatory fees” — will be assessed when loan servicers can’t provide a reasonable explanation for failing to meet timelines for completing routine foreclosures that vary from state to state, Fannie Mae said in a bulletin to servicers.
The time allotted to complete a foreclosure, starting from the referral of a loan file to an attorney or trustee until the date of a foreclosure sale, varies from as little as 60 days in Georgia, Michigan, Missouri, Tennessee, Texas, Virginia and West Virginia, to 90 days or more in Illinois, Maine, New Jersey, New York, Vermont and Wisconsin.
Will the government revive tax credits to encourage home sales? Housing experts are dubious. Even suggesting that the tax credit might be revived could have a negative effect on the market, says housing economist Tom Lawler, because it could “lead many a prospective home buyer to hold off on buying a home.” Earlier this month Richard Dugas, CEO of PulteGroup Inc., said earlier in August on an earnings call: “Almost regardless of how future demand plays out, we still believe that the tax credit had to end. We need to know the true level of demand without government stimulus distorting the market so that we can continue to properly position our business for ongoing improvement.”
Source: The Wall Street Journal, Nick Timiraos (08/30/2010)
Fannie Mae will now review the compensatory fees due to servicers in cases where the government sponsored entity feel servicers are unnecessarily delaying foreclosure.
In a letter sent to servicers, Fannie Mae said it plans to review compensation when it deems applicable, stating that loans “must not be put on hold on a blanket basis.”
Fannie Mae is clear that servicers must not jump the gun either, but rather must follow the letter of the law as it pertains to HAMP/HAFA guidelines.
In a July speech, Edward DeMarco, acting director of the Federal Housing Finance Agency, told loss mitigation servicers that, “if you have an abandoned property or a borrower not willing to discuss or work with anything, then get going [and foreclose],” he advised.
Fannie Mae allows several exceptions in the case where the property is occupied, unless “the borrower has displayed an obvious lack of concern for the mortgage obligation.”
In cases where the property is vacant or the borrower is not going to pay any of the mortgage, “servicers must expedite foreclosure proceedings under the greatest extent allowable by law.”
Read the original article here: www.housingwire.com/2010/09/02/excessively-delaying-fannie-mae-foreclosures-will-now-cost-servicers
The Federal Reserve Bank of New York may seek to require banks to buy back its holdings of faulty mortgages and other assets acquired through the rescues of Bear Stearns Cos. and American International Group Inc., a spokesman said.
“We are involved in multiple efforts related to exercising our rights as investors in non-agency RMBS or CDO securities,” New York Fed spokesman Jack Gutt wrote in an e-mail, referring to residential mortgage-backed securities and collateralized debt obligations.
Steps include “those that require originators to repurchase ineligible loans,” Gutt wrote, referring to ones that aren’t backed by federal entities and violate bond contracts. “These efforts support our primary goal of maximizing the value of these portfolios on behalf of the American taxpayer.”
The Federal Reserve, Fannie Mae, Freddie Mac and other mortgage investors are seeking to force buybacks to rid their books of bad assets amid persistent losses from soured housing loans. Debt buyers and insurers, who can rescind their coverage, are combing through loan documents for faulty appraisals, inflated borrower incomes and missing documentation that can trigger contractual agreements to repurchase ineligible assets as insurers seek ways to void coverage or recoup costs.
“Of course the Fed should pursue ‘efforts to exercise our rights as investors,’” said Chris Kotowski, a bank analyst at Oppenheimer & Co. in New York. “The only real question is, what took them so long?”
Maiden Lane
Regulators of Fannie Mae and Freddie Mae last month issued 64 subpoenas to loan servicers and mortgage-bond trustees. Investigators are seeking loan files that may prove the two government-supported companies bought securities backed by loans that sellers should buy back because they misrepresented their quality.
The New York Fed holds $69.1 billion of assets that were placed in three holding companies that it established to bail out AIG and Bear Stearns in 2008. Maiden Lane LLC, named for the street bordering the New York Fed’s Manhattan headquarters, acquired about $30 billion of Bear Stearns assets that JPMorgan Chase & Co. didn’t want when it bought the company. Maiden Lane II and III, which were involved in AIG’s rescue, hold the remaining assets.
Issuers of so-called non-agency mortgage securities held by the three Maiden Lane companies include Countrywide Financial Corp., which was bought by Bank of America Corp., Bear Stearns, Goldman Sachs Group Inc. and UBS AG, as well as defunct lenders such as New Century Financial Corp., according to Fed disclosures.
$5 Billion
Any potential losses won’t hit bank earnings for some time to come, said Scott Buchta, a mortgage-bond strategist at Braver Stern Securities in Chicago.
“As far as making actual recoveries goes, this process just begins with the Fed receiving loan files,” Buchta said. “They then need to comb through all of the files and try to find the breaches.”
Many of the assets in the Fed’s portfolio are distressed. About 78 percent of the assets backing Maiden Lane II, valued at $16.2 billion on the Fed’s balance sheet as of July 28, were considered junk bonds at the end of the first quarter, compared with 65 percent a year earlier, according to the Fed.
Violations of so-called representations and warrantees of loans sold directly to or insured by Fannie Mae and Freddie Mac cost the four biggest U.S. lenders about $5 billion last year.
The statement by the New York Fed, which is being advised by BlackRock Inc. on the portfolios, comes as investors in the almost $1.5 trillion non-agency mortgage bond market, which doesn’t have government backing, escalate efforts to minimize their losses.
More Efforts
A group of investors holding more than $500 billion of the debt last month sent letters to trustees seeking their help in getting more bad loans bought back, according to Dallas lawyer Talcott Franklin. Franklin wouldn’t name the investors, and declined to comment today on whether they included the Fed.
Investors suspect that loan servicers — who are responsible for pursuing repurchases and handling billing, collections and loan modifications — may not be seeking as many as possible, in part because other units of their companies would be the ones required to take back the debt, according to the letters.
Investors who are sharing information and coordinating through Talcott Franklin PC collectively own bonds giving them 25 percent of “voting rights” in about 2,300 deals, and more in a smaller number, the lawyer said in a July 22 interview. Those levels exceed thresholds that allow them to force actions such as declaring loan servicers in default of their contracts, requiring them to share loan files, and replacing trustees, with details varying by the deal, he said.
Read the original article:
Why seek loan modification?
There are several reasons for any debtor to seek loan modification with help of an attorney. Some of these reasons are as follows.
The reasons for seeking home loan modification may vary from person to person depending upon the financial situation of the debtor.
Ways to get seek loan modification:
There are two ways of seeking home affordable modification program, one is seeking it personally and the other is seeking it through an attorney.
Benefits of getting the services of an Attorney
Home prices in New York and elsewhere scream bargain, and mortgage rates haven’t been this low for decades. Yet houses are sitting on the market. Sales of previously occupied homes in the metropolitan area 14 percent in July. Potential buyers are hesitating because they think home prices still have further to fall. – support for the theory that we are in a deflationary cycle. Most sellers are reluctant to lower their prices. The problem is – if all buyers perceive that home prices are coming down, then they will stop making offers — and home prices will come down.
While the standoff plays out, home sales are plummeting.
The Spring 2010, government tax credits helped drive sales, especially among first-time buyers of less expensive homes. But those tax credits have expired now, and many people rushed to lock in sales before they did.
The wave of foreclosures appears to be subsiding slightly. According to data from Mortgage Bankers Association’s National Delinquency Survey:
• The percentage of loans on which foreclosure action were started during the second quarter was 1.11 percent, down 12 basis points from last quarter and down 25 basis points from one year ago.
• The percentage of loans in the foreclosure process at the end of the second quarter was 4.57 percent, a decrease of six basis points from the first quarter of 2010, but an increase of 27 basis points from one year ago.
• Loans that were 90 days or more past due or in the process of foreclosure was 9.11 percent, a decrease of 43 basis points from first quarter, but an increase of 114 basis points compared to the second quarter of last year.
“The good news is that foreclosure starts are down, and the inventory of homes anywhere in the process of foreclosure fell for the first time since 2006 and had the largest drop since 2005,” says Jay Brinkmann, MBA’s chief economist.
The bad news is that the percent of loans one payment behind had peaked in the first quarter of 2009 at 3.77 percent and fell to 3.31 percent by the end of 2009. Now that rate has risen to 3.51 percent.
“Only when we see a consistent increase in employment will we see an increase in sales and starts, and a sustained improvement in the delinquency numbers,” Brinkmann adds.
The Treasury Department’s plan to help struggling homeowners has been failing miserably for months. The program is poorly designed, has been poorly implemented and only a tiny percentage of borrowers eligible for help have actually received any meaningful assistance. The initiative lowers monthly payments for borrowers, but fails to reduce their overall debt burden, often increasing that burden, funneling money to banks that borrowers could have saved by simply renting a different home. But according to recent startling admissions from top Treasury officials, the mortgage plan was actually not really about helping borrowers at all. Instead, it was simply one element of a broader effort to pump money into big banks and shield them from losses on bad loans. That’s right: Treasury openly admitted that its only serious program purporting to help ordinary citizens was actually a cynical move to help Wall Street megabanks.
Treasury Secretary Timothy Geithner has long made it clear his financial repair plan was based on allowing large banks to “earn” their way back to health. By creating conditions where banks could make easy profits, Getithner and top officials at the Federal Reserve hoped to limit the amount of money taxpayers would have to directly inject into the banks. This was never the best strategy for fixing the financial sector, but it wasn’t outright predation, either. But now the Treasury Department is making explicit that it was—and remains—willing to let those so-called “earnings” come directly at the expense of people hit hardest by the recession: struggling borrowers trying to stay in their homes.
Here’s how Geithner’s Home Affordability Modification Program (HAMP) works, or rather, doesn’t work. Troubled borrowers can apply to their banks for relief on monthly mortgage payments. Banks who agree to participate in HAMP also agree to do a bunch of things to reduce the monthly payments for borrowers, from lowering interest rates to extending the term of the loan. This is good for the bank, because they get to keep accepting payments from borrowers without taking a big loss on the loan.
But the deal is not so good for homeowners. Banks don’t actually have to reduce how much borrowers actually owe them—only how much they have to pay out every month. For borrowers who owe tens of thousands of dollars more than their home is worth, the deal just means that they’ll be pissing away their money to the bank more slowly than they were before. If a homeowner spends $3,000 a month on her mortgage, HAMP might help her get that payment down to $2,500. But if she still owes $200,000 on a house that is worth $150,000, the plan hasn’t actually helped her. Even if the borrower gets through HAMP’s three-month trial period, the plan has done nothing but convince her to funnel another $7,500 to a bank that doesn’t deserve it.
Most borrowers go into the program expecting real relief. After the trial period, most realize that it doesn’t actually help them, and end up walking away from the mortgage anyway. These borrowers would have been much better off riding the mortgage foreclosure process out to it’s very end, then finding a new place to rent. This example is a good case, one where the bank doesn’t jack up the borrower’s long-term debt burden in exchange for lowering monthly payments
But the benefit to banks goes much deeper. On any given mortgage, it’s almost always in a bank’s best interest to cut a deal with borrowers. Losses from foreclosure are very high, and if a bank agrees to reduce a borrower’s debt burden, it will take an upfront hit, but one much lower than what it would ultimately take from foreclosure.
That logic changes dramatically when hundreds of thousands of loans are defaulting at once. Under those circumstances, bank balance sheets are so fragile they literally cannot afford to absorb lots of losses all at once. But if those foreclosures unravel slowly, over time, the bank can still stay afloat, even if it has to bear greater costs further down the line.
If, a big mortgage bank had taken a $20 billion hit on its mortgage book in February 2009, it very well could have failed. But losing a few billion dollars here and there over the course of three or four years means that the bank can stay in business and keep paying out bonuses, even if it ultimately sees losses of $25 or $30 billion on its bad loans.
HAMP is doing a great job if all you care about is the solvency of Wall Street banks. There were always other options for dealing with the banks and preventing foreclosures. Putting big, faltering banks into receivership—also known as “nationalization”—has been a powerful policy tool used by every administration from Franklin Delano Roosevelt to Ronald Reagan. When the government takes over a bank, it forces it to take those big losses upfront, wiping out shareholders in the process. Investors lose a lot of money (and they should, since they made a lousy investment), but the bank is cleaned up quickly and can start lending again. No silly games with borrowers, and no funky accounting gimmicks.
Most of the blame for the refusal to nationalize failing Wall Street titans lies with the Bush administration, although Obama had the opportunity to make a move early in his tenure, and Obama’s Treasury Secretary, Geithner, was a major bailout decision-maker on the Bush team as president of the New York Fed.