The New York Times
The offers seem like answers to the prayers of a struggling homeowner: A promise of legal tactics to stall foreclosure, reduce mortgage balances and interest rates, or restore credit. But these so-called mass joinder lawsuits being advertising in mailings are fraudulent – sent out by companies purporting to be law firms, according to a consumer alert by the Federal Trade Commission’s (F.T.C.) website.
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- Consumers can lose valuable time to these dishonest players – not to mention money. The nonprofit Lawyers Committee for Civil Rights Under Law estimates that homeowners nationwide who reported scams to its database have lost more than $60 million in the last two years alone.
- There are many credible law firms around to help homeowners. But some businesses might be promoting themselves as providers of legal services, they might have only one lawyer on retainer, as a way around F.T.C. rules that allow only lawyers to collect upfront fees on mortgage aid.
- Such firms, and people posing as lawyers, are fueling a 60 percent jump in complaints about mortgage scams this year, according to a report by the homeownership Preservation Foundation, which helps distressed homeowners.
- When speaking with a lawyer, consumers might ask about the lawyer’s track record, including documentation of successes via media reports or signed court documents awarding borrowers money or relief.
- Consumers should beware of promises. According to the Homeownership Preservation Foundation, “legitimate lawyers don’t make guarantees, just like doctors don’t.”
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This week, C.A.R. sent letters to members of Congress sharing its concerns about the disposition of Enterprise/FHA REO assets. In the letter, C.A.R. President LeFrancis Arnold states that if the program is implemented improperly, it will have a negative impact throughout California and set back the housing market.
C.A.R. understands that some cities across the country may benefit from the bulk sale of REO properties, however, the Association feels that housing regulators have not appropriately analyzed proposed pilot cities. Los Angeles and the Southern California region have been named as a potential pilot program location. However, these areas are experiencing an inventory shortage and many homes for sale, especially distressed properties, are receiving multiple bids. Removing REO inventory through a bulk sale and rental program would hurt these communities. In addition, taxpayers will lose because these REOs will be sold for less money in bulk sale than if sold as individual units.
While the nation continues to face its most difficult housing crisis since the Great Depression, C.A.R. hopes FHFA and HUD will withhold or delay the release of their REO bulk sale initiative in California’s housing market.
Read the letter
The Federal Housing Finance Agency (FHFA) today announced the first step of a Real-Estate Owned (REO) Initiative targeted at the hardest-hit metropolitan areas announced in August 2011. Investors interested in participating may “pre-qualify” to establish eligibility to bid on transactions in the initial pilot phase as well as subsequent phases.
The REO Initiative will allow qualified investors to purchase pools of foreclosed properties with the requirement to rent the purchased properties for a specified number of years. This rental period could provide relief for local housing markets that continue to be depressed by the volume of foreclosed properties, and provide additional rental options to certain markets. Prequalification ensures investors will have the financial capacity and operational expertise to manage properties in a way that is conducive to the stabilization of communities hard hit by the housing downturn.
During the pilot phase, Fannie Mae will offer for sale pools of various types of assets including rental properties, vacant properties and non-performing loans with a focus on the hardest-hit areas. The first transaction will be announced in the near-term.
California’s housing market is unique. California has an extremely low REO inventory where REO sales are getting top dollar in multiple offer situations. On average, REOs are sold are sold in less than 60 days. Bulk sales in California not only would have a negative impact on home prices, but would also push down home values for existing homeowners in those communities. C.A.R. is asking that the Federal Housing Finance Agency, Dept. of Treasury, and Dept. of Housing and Urban Development consider this program only in areas where REO inventory is abundant and selling in bulk makes sense.
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The Wall Street Journal
Converting home equity into cash has been a challenge for homeowners since the real-estate downturn, but a growing number of lenders are quietly reviving a loan for seniors that does just that: The reverse mortgage.
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http://online.wsj.com/article/SB10001424052970204542404577158990079313270.html?mod=WSJ_RealEstate_LeftTopNews
HUD and the U.S. Dept. of the Treasury released the December edition of the Obama Administration’s Housing Scorecard this week. Data in the Scorecard show some subtle improvements in the market over the past year, but underscore fragility as the overall outlook remains mixed. For example, new and existing home sales rose compared with the prior month and remain higher than a year ago, and homes are more affordable than they have been since 1971. Median-income families today have nearly double the funds needed to cover the cost of the average home. However, home prices showed a slight dip from the prior month and remain below year ago levels.
The December Housing Scorecard features key data on the health of the housing market and the impact of the Administration’s foreclosure prevention programs, including:
- More than 5.5 million modification arrangements were started between April 2009 and the end of November 2011 – including more than 1.7 million HAMP trial modification starts and more than 1.1 million FHA loss mitigation and early delinquency interventions.
- Nearly 910,000 homeowners have received a HAMP permanent modification to date, saving an estimated $9.9 billion in monthly mortgage payments. The Administration’s programs continue to encourage improved standards and processes in the industry, with HOPE Now lenders offering families and individuals more than 2.6 million proprietary mortgage modifications through November.
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USA Today
The Obama administration’s initial foreclosure-prevention programs were intended to help 7 million to 9 million people. So far, they’ve aided about 2 million, and not all of those are out of foreclosure danger.
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http://www.usatoday.com/money/economy/housing/story/2011-12-11/foreclosure-aid-program-what-went-wrong/51815400/1
