Foreclosure / Public Health Concerns / and if the bank owns it who's to blame...?

It seems hard to believe, but there appears to be yet one more thing for which we can blame the mortgage crisis. And this is not a financial problem; it is a public health concern.
Several cable networks have reported over the last few weeks that the hundreds of foreclosed houses covering suburban neighborhoods may be contributing to the spread of the West Nile virus.
This is particularly true in warmer areas such as California, Arizona, Florida, and Nevada where homeowners tend to have a lot of outdoor playthings, chiefly swimming pools.
The pools, even if they had been drained for the winter, are collection spots for rainwater. The pools are not used, the water is not treated, and, instead of refreshing, cool aqua spots in which kids splash and where adults gather for cookouts, they are now dirty, brackish, maybe even bright green with algae. But these pools are prime breeding spots for the West Nile transmitting mosquito.
The West Nile virus does not make most people very sick, but several dozen have died in the few years it has been reported as a threat, and there have been incidents recorded of paralysis and other permanent disabilities.
CNN reports that Orange County, California alone may have as many at 1,500 pools located on properties that have been foreclosed, and while public health authorities are not sure to what extent they are encouraging the growth of the mosquito population, it only stands to reason that there is some impact, at least from a nuisance standpoint.
Banks and real estate agents who have not utilized the energy to secure the houses or mow the lawns are certainly not going to spend time and money to drain and cover pools and, even if the West Nile threat is insignificant, the increase in shear numbers of insects will make for a miserable fall and spring.
In addition to the pools, abandoned and neglected property has other water hazards; a kiddie pool left in the backyard, fish ponds, bird baths, a vertically hung tire swing, all have the capacity to catch and hold sufficient water to cause concern.
Cities and towns that fear a possible epidemic say they have little choice but to clear and/or treat the source at taxpayer expense even though it is the responsibility of the banks. This will not be as easy as it once was, as many of the effective mosquitos and larva sides are now prohibited for use because of their own possible public health problems or will stir up such protests from the community that municipalities dare not use them.
In the 1990s when banks and the FDIC stonewalled condo associations over HOA fees on foreclosed houses, affected states did not hesitate to pass super lien laws that gave the association the ability to levy senior liens for unpaid fees on the units. These liens took precedent over all others except taxes and the financial institutions shaped up pretty quickly. It is past time that legislation is passed to allow senior liens for the costs of securing property, keeping it from further deterioration, clearing out squatters and drug dealers and so forth. If the banks do not pay the bills the towns can foreclose, wipe out the banks' mortgages, and sell the homes to residents or investors at whatever price the market will bear sufficient to recoup taxpayer's losses and get the properties up and running again.

Saved By The Bell - Trump steps up and helps a friend & gets a good deal

Things were so dire that McMahon’s listing agent flew to New York over the weekend to make a personal appeal to Trump. Ed (85 years old). Donald Trump reportedly has agreed to purchase Ed McMahon’s 7,013-square-foot mansion in the gated Summit neighborhood in the Beverly Hills, Calif. postal area, which has been in foreclosure as it has been on the market most recently for $4,600,000. The Donald made the purchase through a unit of Countrywide Financial. If you recall this home was initially listed @ $7+ million. Ed was in massive $$$ straights. Upon The Donald purchase - ED (the ailing Johnny Crason side kick) and his wife are going ot be allowed toremain in the home. We all knew someone was going to step up and help this once American Icon. The Donald owns $100,000 of millions if not close a billion dollars in real estate holdings. This appears to be a major - "with a little help form from friends."
The home is located @ inside the Beverly Hills postal area. McMahon purchased the house in 1990 for $2.6 million, according to public records, but was unable to keep the home out of foreclosure due to major $$$ hardship. Click Here

Mortgage interest rates remain FLAT.

Mortgage interest rates remain flat according to the weekly Primary Mortgage Market Survey released by Freddie Mac. The 30-year fixed-rate mortgage (FRM) averaged 6.5 percent with 0.7 point, unchanged from the previous week. The 15-year FRM averaged 6.10 percent, up 3 basis points from one week earlier. Fees and point increased from 0.6 point to 0.7 point.
Short-term rates also remained relatively unchanged. The five-year Treasury-indexed hybrid adjustable rate mortgage moved from 6.05 percent from an average 6.07 percent. Fees and points were static at 0.6 point. The one-year Treasury-indexed ARM averaged 5.22 percent compared to 5.27 percent a week earlier. Fees and points averaged 0.6 both weeks.

The one-year Treasury-indexed ARM averaged 5.22 percent compared to 5.27 percent a week earlier. Fees and points averaged 0.6 both weeks.
"The housing market is continuing to act as a drag on the economy," said Frank Nothaft, Freddie Mac vice president and chief economist. "Residential fixed investment subtracted 0.6 percentage points off second quarter growth in real GDP.
"More recently, mortgage applications for home purchases in the past few weeks fell to the slowest pace since the week ending February 21, 2003, according to the Mortgage Bankers Association. Finally, although showing some initial signs of improvement, the inventory of unsold homes remains at historically high levels."
The Mortgage Bankers Association (MBA) in results from its Weekly Mortgage Applications Survey reported substantially more movement in long term loans but the single ARM it tracks was virtually unchanged.
The average rate for 30-year FRMs increased to 6.57 percent from 6.41 percent with points, including the origination fee nudging up from 1.13 to 1.14.
The 15-year FRM (fixed rate mortgage) rate increased to 6.17 percent from 6.02 percent while points increased to 1.06 from 1.02.
The average contract interest rate for one-year ARMs decreased to 7.15 percent from 7.17 percent, with points increasing to 0.38 from 0.36.
Mortgage applications were down 1.5 percent on a seasonally adjusted basis from the previous week and 2.2 percent unadjusted. The volume was down 36.9 percent from the same week in 2007.
Refinancing as a share of all applications decrease to 35.2 percent from 35.9 percent a week earlier and the market share of ARMs increased slightly to 7.3 percent from 6.9 percent the previous week.

Canadians Top List of Foreign Buyers of U.S. Property, NAR Says

Canadians are flocking to snatch up property in the U.S. as a result of affordable house prices and attractive exchange rates, the National Association of Realtors says.
Since May 2007, NAR estimates that between 150,000 and 190,000 homes in the U.S. were bought by foreign nationals.
This year, Canada replaced Mexico as the country with the largest share of foreign buyers in the U.S., with the percentage of Canadian buyers doubling to 23.5% from 11% last year, NAR said in its 2008 Profile of International Home Buying Activity survey. The UK came in behind Canada, followed by Mexico, China, India and Germany.
"Many international buyers recognize that real estate is an excellent investment and are drawn today by abundant inventory, low interest rates and a softer dollar," said NAR president Richard F. Gaylord. "These conditions allow them to own their own piece of the American dream."
Gaylord said foreign exchange rates have helped make U.S. homes more affordable for foreigners, particularly in Florida and Arizona. He noted that the euro has surged in value 24% against the U.S. dollar over the past two years.
Single-family vacation homes at an average price of $297,400 were the most popular purchase for international buyers. The most popular states for purchases were Florida, California, Texas, New York, Washington and Nevada, NAR said.
The NAR survey found four in 10 foreign buyers paid for their purchases in cash, compared to 7% of domestic U.S. buyers. It also found that the average international buyer stayed at their U.S. property for 2.6 months during the year.
Purchases by international buyers also tended to be more expensive, with 14% of properties sold valued at $750,000 or more.
The 2008 NAR Profile of International Home Buying Activity survey is based on responses from approximately 4,000 Realtors who serve foreign buyers.

Hovnanian CEO Interview MortgageNewsDaily.com Video News CNBC Aug 6, 2008. 7:38 AM EST Discussing the current housing market condition and outlook, with Ara Honanian, Hovnanian Enterprises CEO.

Protect Your Equity - More so if its your one chance...

$450,000 to construct. When they were done, the home dwarfed all the ranch and split-level structures in neighboring lots.

That was not all. Beazer Homes' employees and company partners raised a quarter-million dollars in contributions for the family. The sum included scholarships for the three Harper children and a home maintenance fund.
The Harpers, whom ABC chose from among 15,000 "Extreme Makeover" applicants, spent the week in Disneyland while 1,800 people swarmed about the site. The family returned to a new home, plus contributions worth about $200,000.

Click Here for more info

"Housing and Economic Recovery Act of 2008"

LOS ANGELES, Jul 30, 2008 (BUSINESS WIRE) -- The CALIFORNIA ASSOCIATION OF REALTORS(R) (C.A.R.) applauds President Bush's decision to sign H.R. 3221 into law. For the past several years, C.A.R. and the NATIONAL ASSOCIATION OF REALTORS(R) have aggressively lobbied for Congress to pass numerous provisions found in this historic bill.
The legislation, called the Housing and Economic Recovery Act of 2008, will assist an estimated 400,000 homeowners facing foreclosure, many of whom reside in California, by allowing them to refinance their current mortgages with a Federal Housing Administration (FHA)-backed loan. The bill also will permanently increase FHA, Fannie Mae, and Freddie Mac loan limits in high-cost areas.
"This federal housing bill is a significant move in the right direction for California homeowners," said C.A.R. President William E. Brown. "It will aid in stabilizing our economy and help stem foreclosures, while also providing support to first-time homeowners."
The bill permanently increases the conforming loan limit to $625,500. C.A.R. has long advocated for higher conforming loan limits. In February, the Economic Stimulus Act of 2008 was signed, temporarily raising the conforming loan limit in high-cost areas to $729,750 from $417,000 until December 31, 2008.
"Although we would have liked Congress to make permanent the current $729,750 loan limit, C.A.R. is pleased with the new permanent loan limit of $625,500. It will allow California homeowners to refinance their loans into safe affordable loan products and allow first-time home buyers to enter the market," said Brown.
The new loan limits for Fannie Mae and Freddie Mac are the greater of either $417,000 or 115 percent of an area's median home price, up to $625,500. The new FHA loan limit will be the greater of $271,050 or 115 percent of an area's median home price, up to $625,500. Both new loan limits will be effective at the expiration of the economic stimulus limits on December 31, 2008.
C.A.R. also supports the following bill provisions:
-- A temporary increase in mortgage revenue bonds to refinance subprime mortgages.
-- New regulator for Government Sponsored Enterprises to restore investor confidence in GSE loans and help the market and economy stabilize.
-- First-time home buyer tax credit, which allows first-time home buyers to receive a tax refund worth up to 10 percent of a home's purchase price, up to a maximum of $7,500. The refund serves as an interest-free loan and the homeowner is required to repay it in equal installments over 15 years.
-- Temporary raise in the loan limit for the Veterans Affairs home loan guarantee program to the same level as the economic stimulus limits until the end of 2008.
-- Adjustment to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA), allowing sellers to provide the non-foreign affidavit to a qualified closing entity and not just the buyer.
-- The setting of minimum requirements for mortgage originators, which mandates fingerprinting of loan originators and establishes a nationwide loan originator licensing and registration system. The requirements do not apply to those only performing real estate brokerage activities unless they are compensated by a lender, mortgage broker, or other loan originator. States will have the ability to implement more stringent laws.
-- The creation of a National Affordable Housing Trust Fund to help cover the cost of the FHA rescue plan for the first five years and develop affordable housing in subsequent years.
Other provisions in the legislation include:
-- The Treasury Department's proposal to create a federal backstop program to ensure the financial well-being of Fannie Mae and Freddie Mac.
-- The FHA's inability to insure loans that utilize a seller-funded down-payment assistance program. Down-payment assistance from family, employers and other nonprofits is still allowed.
-- The Community Development Block Grant Programs' $4 billion allotment for communities to purchase and refurbish foreclosed homes.
Leading the way...(R) in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS(R) ( www.car.org) is one of the largest state trade organizations in the United States, with nearly 175,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

I told you so...

I get about 100 to 150 e-mails a day asking me about these services that charge to help stop foreclosure. I've heard from $1500 to $6500 dollars - and each time I tell them we do it at NO COST - I get this response as if - the other guys must be better since they are charging me - wrong. Your the SUCKER (I need to drive the point home - no disrespect) and I told you that in your e-mails. In real estate deals - monies are earned upon fullfilment and not simply - TRYING. I know foreclosure must be a very streeful time but know that good people still exist in the world and those people are compensated by the BANK . If I can be of any help michael@valleyfinance.com


Freddie Mac today told mortgage servicers it was doubling the amount of money it pays for each workout that keeps a delinquent borrower with a Freddie Mac-owned mortgage out of foreclosure.
Freddie Mac also announced it will start reimbursing servicers for the cost of door-to-door outreach programs, give servicers more time to negotiate workouts in states with fast foreclosure processes, and make administrative changes intended to streamline the workout process.
"We are taking these steps because we want to reinforce the tremendous importance of workouts and reward their use," said Freddie Mac Vice President of Servicing and Asset Management Ingrid Beckles. "Giving our servicers more time and greater compensation to help troubled borrowers is fundamental to preserving homeownership and maximizing our efforts to minimize foreclosures." According to Beckles, starting August 1, 2008, compensation for repayment plans will rise from $250 to $500 while loan modification compensation will increase from $400 to $800. For short sales or pre-foreclosure sales, where Freddie Mac agrees to accept less than the full amount owed on a borrower's loan, compensation will go from $1,100 to $2,200. (The higher amount recognizes the greater servicer staff time involved when negotiating property sales.)
Freddie Mac also said it will now reimburse the cost of leaving a door hanger up to $15 per mortgage and up to $50 per mortgage for a door knocking that results in the borrower contacting their servicer. Freddie Mac will also reimburse servicers up to $200 for additional fees paid to vendors for door knocking that results in successful alternatives to foreclosure. This policy is effective from August 1, 2008, through March 31, 2009.
To qualify for the reimbursement, the servicer must show that the mortgage was at least 90 days delinquent, the servicer had no prior contact with the borrower, and that the outreach was done by an independent third party vendor.
Freddie Mac also announced it is extending the time for foreclosures so servicers will have more time, if needed, to negotiate workouts with delinquent borrowers in Washington, DC, and 20 states with relatively fast foreclosure processes.
In addition to Washington, DC, the affected states include Alabama, Alaska, Arizona, Arkansas, California, Georgia, Hawaii, Maryland, Michigan, Minnesota, Mississippi, Missouri, New Hampshire, North Carolina, Rhode Island, Tennessee, Texas, Virginia, West Virginia and Wyoming.
Specifically, starting August 1, 2008, servicers are allowed up to 300 days (10 months) from the due date of the last payment to the foreclosure sale in these states to seek aggressive and sustainable workout solutions for the borrowers and still meet the standards set in Freddie Mac's Servicer Performance Profiles. The company uses the Servicer Performance Profiles to measure and reward the quality of a servicers' investor reporting and default management.
Even though the laws in these states permit a lender to foreclose in less than 300 days, this announcement means Freddie Mac will permit its servicers more time to complete foreclosures. The new policy won't affect borrowers in states where the foreclosure process already exceeds 300 days.

H.R. 3221

You can make a big difference in just 5 minutes. That's all it will take to learn the issues and send an email to your elected officials. The actions of our government have an enormous impact on the lives of you and your family, and we hope you'll use this site to learn about things that matter to you.
Please take the following actions: 1. Join our Action Network and we'll send you important updates regarding our issues and how you can speak out on important issues.
2. Send an email to your elected officials and tell them to pass important legislation that you can follow right here.
FEATURED ALERT
Housing Bill Shuts Down Non-Profit Downpayment Assistance Programs on October 1, 2008.
Take Action Today to Save Downpayment Assistance!
Nehemiah Corporation of America, a national non-profit organization, has helped over 300,000 families who would have otherwise been locked out of homeownership due to lack of downpayment funds. Both the House and Senate passed H.R. 3221, Housing and Economic Recovery Act of 2008, a comprehensive piece of legislation that addresses a variety of housing related issues. The bill contains a provision (SEC. 2113) that forbids FHA from insuring mortgages in which the borrower’s downpayment comes from a private downpayment assistance provider, beginning October 1, 2008. As of this date, the minimum downpayment will be increased from 3% to 3.5%. ...The bill is headed for the President’s desk where his prompt signature is expected. With the stroke of the President’s pen, downpayment assistance will be shut down in the United States on October 1, 2008.The consequences will be devastating! By FHA's own estimates, DPA comprises nearly 40% of FHA's volume. This means more than 300,000 working class families will be locked out of homeownership in the next year alone. Communities across America will take the brunt of the $50 billion in lost real estate sales, not to mention the indirect impact on the real estate, mortgage and building sectors that will be forced to shed tens of thousands of jobs due to this dangerous legislation.Act Now! Contact your elected officials and urge them to introduce and pass a bill that allows downpayment assistance to endure. Failure to act now will ensure the death of all private downpayment assistance programs.Preserve private downpayment assistance programs for families who are credit-worthy, but lack the savings necessary to fulfill their homeownership goals, protect the already fragile economy, improve the current housing market, and save jobs.Take Action Today to Save Downpayment Assistance! In order to save downpayment Assistance, we need to come together NOW to convince Congress to introduce and pass a bill that allows downpayment assistance to continue indefinitely.

Attention Fence Sitters

(Light at the end of the tunnel - slowly approaching) -

My advice to anyone looking to get into the market - sooner then later. No one can tell what the bottom looks like, but it sure looks like it. I see banks streamlining their short sale and REO process. This progress enables the process to be more efficient. Stagnation of process and procedure killed the market in the midst of our crisis. I also see inventory moving fatser and I also see the down payment assistant programs going away. This means buyers will need to pony up with real cold hard cash. This is nothing new nor a surprise to everyone. The loan programs issued at the direction of Wall Street are giving way to [market correction forces at work] more conventional [safe-er] loans. This will cool us from the rapid market run ups. Real Estate has always been a safe long term investment and I can't imagine a better time for buying. I still believe my company offers the best loan in the business. Don't let all the doom and gloom keep you on the fence. Smart money buys low and sells high (remember that as cardinal rule 1). It may run counter intuitive for some people; and that is why only some people or currently not hurt by our present market condition. If I can be of any help to you michael@valleyfinance.com I am also facilitating Bank Homes to Market so I can help you access to inventory not yet to market plus other benefits only a private banker can offer. Click here to read more about the NEW HOUSING BILL.

New homes sold at an annualized pace of 530,000, exceeding the median forecast of 503,000 in a Bloomberg News survey – 07/25/2008. The report went on to add:The number of properties on the market dropped by the most in four decades, indicating builders are making some headway in clearing out inventories. The median sales prices last month decreased 2 percent from June 2007 to $230,900. These figures can be influenced by changes in the mix of sales at the regional level. For that reason, economists prefer price measures that track the same home over time. The supply of homes at the current sales rate fell to 10 months' worth from 10.4 months in May. There were 426,000 homes for sale at the end of June at an annual pace, the fewest since December 2004. The figure was down 5.3 percent from the prior month, the biggest decline since November 1963. A report yesterday from the National Association of Realtors showed existing home sales fell 2.6 percent to a 4.86 million annual rate, the lowest level in a decade. The median home price dropped 6.1 percent from June of last year. Concern over the ability of Fannie Mae and Freddie Mac, the largest U.S. purchasers of mortgages, to survive the meltdown in subprime lending has heightened the credit crisis and may push up mortgage rates and further curtail access to loans. U.S. foreclosure filings more than doubled in the second quarter from a year earlier as falling home prices left borrowers owing more on mortgages than their properties were worth.

[Keep in mind the correction has began and with the inventory shrinking its a good sign of price stabilization we are currently seeing in some markets]

Say - UNCLE

San Diego City Attorney MICHAEL J. AGUIRRE
NEWS RELEASE
FOR IMMEDIATE RELEASE: July 23, 2008 Contact: Communications Division (619) 235-5725
CITY ATTORNEY FILES LAWSUIT AGAINST COUNTRYWIDE;AGUIRRE ALLEGES CONSUMER LENDING FRAUD ANDSEEKS COURT ACTION TO STOP LENDER FORECLOSURES
San Diego, CA—San Diego City Attorney Michael Aguirre filed a civil complaint this morning in San Diego Superior Court against Countrywide Financial Corporation alleging that the lending institution engaged in a “pattern of unlawful, fraudulent or unfair predatory real estate lending practices” that has caused numerous City of San Diego residents “to be in jeopardy of losing their homes through foreclosures.” The legal action also calls for injunctive relief and civil penalties.
“We are asking a court to prevent Countrywide from initiating or advancing any foreclosure on any residential sub-prime mortgages involving properties which are owner occupied in the City of San Diego,” said City Attorney Michael Aguirre. “We believe these borrowers are victims of fraud and were roped into unconventional sub-prime loans when they probably could have qualified for a conventional fixed-rate mortgage.”
The civil lawsuit was filed by the Consumer and Environmental Protection Unit of the San Diego City Attorney’s Office. The complaint alleges that Countrywide’s unlawful lending practices directed against San Diego home purchasers and homeowners involved one of the following elements:
a. Making loans based predominantly on the foreclosure or liquidation value of a borrower’s collateral rather than on the borrower’s ability to repay the mortgage according to its terms; b. Inducing the borrower to repeatedly refinance a loan in order to charge high points and fees each time the loan is refinanced (“loan flipping”); or c. Engaging in fraud or deception to conceal the true nature of the mortgage loan obligation. The lawsuit further alleges that the goal of Countrywide’s unlawful, fraudulent, or unfair “predatory” lending practices was to increase the Company’s share of the national mortgage market by mass producing loans for sale on the secondary market. Countrywide originated loans with little or no regard for the borrowers’ financial ability to afford the loans or to sustain homeownership.
(MORE)
Recent City Attorney media releases can be accessed on the San Diego City Attorney’s home page located on the Internet at http://www.sandiegocityattorney.org/
1200 Third Avenue, Suite 1620, San Diego, California 92101-4188 (619) 236-6220
Page 2
The lawsuit contends that Countrywide was motivated to engage in the unlawful lending practices for the personal financial benefit of several named defendants whose profit exceeded $800 million. To view the lawsuit against Countrywide, visit http://www.sandiegocityattorney.org/, click “Significant Reports
and Legal Documents.”

Ever Consider H.U.D homes?

What is a HUD Home?A HUD home is a 1 to 4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.

Who can buy a HUD Home?Almost anyone! If you have the cash or can qualify for a loan (subject to certain restrictions) you may buy a HUD Home. HUD Homes are initially offered to owner-occupant purchasers (people who are buying the home as their primary residence). Following the priority period for owner occupants, unsold properties are available to all buyers, including investors.

What about financing?Although HUD does not offer financing directly, some of our homes qualify for FHA-insured loans. Contcat me directly michael@valleyfinance.com

To search for H.U.D homes click here and here and if you need money to make it all happen michael@valleyfinance.com

What Down Market? What Unemployment?

I suppose if you have a hankerin' to live in sunny California your going to pay more - a lot more. Check out a few of these towns. Check this link for other low cost options.

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(Wichita, Kansas)
Wichita is one of the most affordable places in the study, and has some of the best numbers for employment and job growth, thanks to a boom in agriculture and ethanol.
Houses are appreciating in value, even in today's tough economy. And commute times are blessedly short. The downtown area is being revitalized with new restaurants, shopping centers and parks. Arts and entertainment facilities are stronger than one might expect for a city this size, and the community feel is strong. And there's a new convention center along the Arkansas River. It's fairly isolated, with Tulsa and Kansas City each nearly 200 miles away. The flat landscape lacks breathtaking natural scenery. Its climate can swing to extremes, with hot, humid summers, short periods of extreme cold in winter and a lot of rain in between.

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I'm more of an South East person. I like the slow pace of life, the sense of community, low cost of living, the wonderful weather and college sports. You can still live the halcyon days in the south east. The mid west is nice, but the winters can be brutal (for me - I've lived in Hawaii, California, Charlotte, Milwaukee, Va. ) and I can say one thing for sure - those Wisonsin winters are nice if you don't have to get on the road and drive.

When you start to wonder if life has anything ealse waiting for you - consider picking up and discovering the rest of this great country.

I have done that a few times and it has made me appreciate this country a lot more.

Fannie and Freddie Tid Bits You May or May Not Now

"Fannie Mae is a private, shareholder-owned company that works to make sure mortgage money is available for people in communities all across America. We do not lend money directly to home buyers. Instead, we work with lenders to make sure they don't run out of mortgage funds, so more people can achieve the dream of homeownership."
Fannie Mae is "the country's second largest corporation, in terms of assets, and the nation's largest source of financing for home mortgages. We are one of the largest financial services corporations in the world."
"Fannie Mae stock (FNM) is actively traded on the New York Stock Exchange and other exchanges and is part of the Standard & Poor's 500 Composite Stock Price Index.
In 1938, the Federal government established Fannie Mae to expand the flow of mortgage money by creating a secondary market. Fannie Mae was authorized to buy Federal Housing Administration (FHA)-insured mortgages, thereby replenishing the supply of lendable money.
In 1968, Fannie Mae became a private company operating with private capital on a self-sustaining basis. Its role was expanded to buy mortgages beyond traditional government loan limits, reaching out to a broader cross-section of Americans."
According to their web site, "Freddie Mac is a stockholder-owned corporation chartered by Congress in 1970 to keep money flowing to mortgage lenders in support of homeownership and rental housing. Freddie Mac purchases single-family and multifamily residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage pass through securities and debt instruments in the capital markets. By doing so, we ultimately help homeowners and renters get lower housing costs and better access to home financing."
The Subcommittee on Capital Markets, Securities and Government Sponsored Enterprises, chaired by Rep Richard H. Baker, holds oversight hearings on the Federal National Mortgage Corporation (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). The committee: "..watches over the U.S. capital markets, securities and insurance industries and government-sponsored enterprises, such as Fannie Mae and Freddie Mac. It oversees the Securities and Exchange Commission as well as the self-regulatory organizations that police the securities markets."
According to the Committee "The hearings explore the potential risks posed by the enterprises to the taxpayers through their implied Government guarantee. Representatives from Fannie Mae, Freddie Mac and the Office of Federal Housing Enterprise Oversight (OFHEO) comment on reports produced by GAO, CBO, HUD, and Treasury as mandated by section 1355 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992."
The popular perception is that Fannie and Freddie have greatly increased home mortgage opportunities for Americans in general and for minority and low-to-moderate income Americans in particular.

Mortgage Employment - The Job Market

DALLAS -- (July 2008) / Second-quarter jobs losses in the real estate finance sector fell by more than half from the prior quarter and the prior year, according to mortgage employment data tracked by http From April 1 to June 30, there were 5,889 mortgage-related layoffs tracked. During that same period, 100 jobs were added, bringing the net job loss to 5,789.Hiring and layoffs that are tracted generally involve at least 50 people.The latest figures compare to revised net job losses of 14,405 in the first quarter 2008 and approximately 12,752 in the second quarter 2007.Government data indicate that mortgage employment has gone from 360,700 on March 31, 2008, to 357,800 as of May 31, 2008.


2nd Quarter 2008

Estimated Mortgage Job Losses Top 5 States Rank

State Net Job Losses

1.Washington -2,000
2.California -542
3.Florida -244
4.Pennsylvania -217
5.Michigan -125
---
TOTAL U.S. -5,789


Top 5 Companies
Rank Company Net Job Losses
1. Washington Mutual* -4,000
2. Accredited Home Lenders Inc.* -700
3.Wilmington Finance Inc. -335
4. Quicken Loans Inc. -250
5. First Collateral Services Inc. -142



Chase Home Lending, HSBC Mortgage Services and Residential Capital LLC each reported layoffs during the second quarter that will not occur until later this year.
IBM Lender Business Process Services and MidFirst Bank reported second-quarter job additions, while Mortgage Network Inc., Residential Finance Corp. and Fidelity Reverse Mortgage disclosed plans to add more employees subsequent to the second quarter."We have seen mortgage-related layoffs decline each quarter since the third quarter 2007, when there were around 50,000 layoffs," Industry insider said. "Pockets of growth are emerging in FHA lending, reverse lending and businesses that support back-office functions. We also expect to see future growth in commercial mortgage lending and loan servicing."

Very Nice Bank Repo

Just a single view point from Mike

"We got a thousand points of light For the homeless man We got a kinder, gentler,Machine gun hand.."

Rockin' In The Free World
Lyrics by Neil Young

* * *
Let me get this straight, government regulation is hap hazard at best. They have been the regulators to this point and look what a fab job its done to the market place. I honestly believe in markets, and I know in my heart of hearts that moving forward the market will regulate itself in ways the government regulators only dreamed they could achieve. I know this because I am knee deep in this business. The most inefficient dealings I have come with government agencies in respect to finance. Billions of dollars are at play and don't think for a second the crooked practices in this past market will be tolerated by the mortgage industry moving forward. The truth of the matter is markets go up and down and it just so happened this past market was molested by crazy actions of many people on all sides of the fence; and some say due to the government regulation. We see how well the government officials manage the city, state and national finances and we are to think THEY could do better then experts in the very field of area of concentration. Loan programs have changed, qualifying is much more in line with home ownership responsibility. I'd also like to add - what's the news still doing promoting the negative aspect of this housing crisis. As I said earlier I am knee deep in all aspects of this business and see with my very own eyes a lot of action in certain price ranges. I see price stabilization in a lot of areas, and believe it or not; daily on the MLS you see a few more price increases. Some people are getting fantastic opportunity for home ownership - steer renters to ownership. Buy low - and it is as low as it is going to go for the greater central California area. This fear that is shadowing over many people on the fence to buy is wacky - almost - and I say almost - as wacky as people climbing all over each other to buy at the top of the market in areas that are not land locked.

I still believe the innovation of the market place is still being led by programs such as the one my company offers http://mikesforsalebyowner.blogspot.com/2008/05/my-co-offers-best-home-loan-peirod.html to clients looking to take advantage of a down market.


Proposed measure (s)

One measure, SB 1137 by Senate President Pro Tem Don Perata (D-Oakland), requires lenders to repeatedly try to contact homeowners who may be in danger of defaulting to stave off a foreclosure. The bill also provides renters living in foreclosed properties more time to find a new home.

Folks - do our tax dollars need to be spent on matters like this? It may come to no surprise that this is Standard Operating Procedure for most lenders.

AB 2740 by Assemblywoman Julia Brownley (D-Santa Monica), a bill aimed at loan-servicing abuses such as failing to properly apply payments or post them in a timely manner.

Another matter that is standard operating procedure for most loan servicing. This crooked practice happens in many industrys and is a very bad thing, but to spend time, money and resources.


The percentage of all mortgages at least 30 days past due rose to 6.35% in the first quarter from 5.82% in the fourth quarter of 2007, according to the Mortgage Bankers Assn.


I understand the panic, the stress, the worry - but government regulation is not the answer. How about do what your suppose to do with the current regulation and not make new regulation to hide the faults and short comings of this go around.....

Innovation in self regulation will be the strongest ally to the consumer. I know that runs counter intuitive for a lot of people; but let's enforce the current regulation and laws vs. adding more regulation and laws to off set the non enforcement of current rules and regulation.
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How can we keep the "mortgage crisis" from happening again? Those who study mortgage trends have said that there has been a pretty consistent pattern of a "bust" in mortgages about every 18 years since World War II. We've seen problems like this before and we will survive this "crisis." If you're looking for a mortgage right now, rates are still very good. The world is not ending (as the politicians who are itching to "help" would have us believe). In my opinion, the best way to prevent this from happening again, is for the Free Market system to be allowed to punish bad decisions and reward good decisions (as it always does). Government regulation is just something politicians and anti-business people like to propose because it makes them feel good. In reality, the mortgage industry is already highly regulated... and yet the "mortgage crisis" occurred. One of the many regulations that the government has is to disclose VERY clearly and plainly the interest rate of the loan and any adjustments to the interest rate... and yet borrowers claimed that they "didn't understand what they were signing." Now to your question... In summary, EVERYONE involved played a part in the "bust" to some extent or another. BORROWERS -- Rather than living within their means, many borrowers decided that they wanted to have a bigger, more expensive house than they could afford. In order to afford these houses, they often turned to loan products such as "Interest Only" loans. With IO loans, you basically pay the minimum amount possible every month and the principal is never reduced. To complicate matters, some loans featured "zero down" where the borrower had absolutely NO equity in the property. Here is an illustration of a typical problem: A property is worth $800,000 at the time of purchase. The borrower takes out an Interest Only loan for $800,000 (putting nothing down). Then the property value drops to $700,000. Now the borrower has a loan for $800,000 for a property that is only worth $700,000. The borrower has ZERO equity in the property so guess what... they walk away from the property and the lender ends up taking the loss. MORTGAGE COMPANIES (BAD OR POOR UNDERWRITING GUIDELINES) -- In an effort to make as many loans as possible (and to sell these loans to foolishly eager investors), many mortgage companies relaxed their guidelines beyond reason. Some loans had a Loan-to-Value (LTV) ratio of 100 (or higher on rare occasion!). If the property was worth $100,000, then an LTV meant that $100,000 was loaned to the borrower (as stated before, no equity). The lower the LTV, the less risky (and more desirable) the loan is. Another arguably stupid mortgage product was the "80-20" loan. A loan with an LTV of 80 or lower is not considered risky in the mortgage business. Therefore, Mortgage Insurance (MI) is not required for loans with an LTV of 80% or less. (If a borrower has an LTV of 85 and pays it down to 80, then they can drop the MI from the loan.) MI is basically insurance against borrower default. For example, if a borrower defaults on his loan and the lender forecloses and sells the property and loses $2000 in the process, then the MI company will cut a check to the lender for $2000 to make the lender "whole." Rather than requiring borrowers to carry MI on their loans (which would have mitigated risk), the mortgage companies allowed the borrowers to take out a second loan on the same property (a "second lien" or Home Equity Line of Credit or HELOC). This HELOC money was then used as the "money down" on the first loan so that MI could be avoided. For example, if the property is worth $100,000, the borrower might get a HELOC for $20,000 and put that money down on the first loan, thereby lowering the LTV to 80 (thereby exempting them from MI). Another popular loan was an Adjustable Rate Mortgage (ARM) or "Fixed-Adjustable" (where the Interest Rate is fixed for a few years and then starts to adjust (up or down) based on a financial instrument). Borrowers were allegedly given a low "teaser rate" and then (because they bought too much house) couldn't make the payments with the higher interest rate when the rate adjusted. (It seems hard for me to believe that an interest rate adjustment would be so severe that it would prevent someone from making their payments, but that's what the borrowers allegedly claim.) Maybe this is too many detailed examples, but suffice it to say that a lot of stupid mortgage products were offered by mortgage companies (and accepted by borrowers). INVESTORS -- In their quest to make a "fast buck", investors bought up tons of these mortgages since these riskier "sub-prime" loans brought higher returns (higher interest rates). These investors should have performed a "due diligence" on the loans they bought; but they didn't. When investors purchase loans, there is usually (if not always) a "buyback" provision. This means that if a loan goes bad and the investor finds that there was some irregularity in the underwriting (the loan decisioning process) that the mortgage company who sold them the loan is required to "buy back" the loan. The problem is that most mortgage companies are "cash poor" (meaning that they borrow the cash that they lend from a "warehouse lender" temporarily until they can sell the loan to an investor and pay back their warehouse lender). So when these loans started going bad (hundreds of millions of dollars worth!), the investors demanded the mortgage companies buy back the loans (according to their agreement). So mortgage companies were now looking at buying millions and millions of dollars worth of loans back when they had little or no money of their own! So what happened? Countless mortgage companies declared bankruptcy. With all of the hullaballoo around bad mortgages, investors decided to stop buying sub-prime mortgages. Since there was nobody buying these mortgages and since mortgage companies don't have their own cash, mortgage companies found that they could no longer make these sub-prime loans. The sub-prime market dried up almost instantly. RATING AGENCIES -- The job of rating agencies is to investigate the creditworthiness of investments (many of which included mortgage debt). These agencies did not do their due diligence and ended up giving these investments an artificially high rating. So investors thought the investments were less risky than they were. Investors will always buy investments that have a high return and low risk (but obviously they weren't low risk). THE GOVERNMENT -- The government has always put pressure on mortgage companies to make loans to poor and/or minority borrowers. Because these borrowers typically have worse credit and/or less income and/or greater debt, they had to go to the "sub-prime" market to get a mortgage loan. Is it so hard to imagine that a borrower with less income, more debt and bad payment habits will default on a loan (especially when they've put little or no money down)? Of course not. But the government continues to "wish away" laws of basic economics and common sense. In order to "do right" by poor people and minorities, the government expected mortgage companies suspend their normal sound underwriting guidelines and business sense. (Obviously, the sub-prime problem goes beyond just poor borrowers, but my point is that the government contributed to the crisis to some extent.) The government is now poised and ready to exacerbate the crisis beyond what it is now by "freezing" interest rate adjustments. Here is an illustration of the problem: Let's say you have $5000 in cash. I'm a bank and I tell you that if you deposit your $5000 with me that I will pay you 1% during the first 2 years but then I will pay you 7% after those 2 years. So you deposit your money at the low rate of interest. After two years (when you're about to get your higher interest rate), the government comes in and says, "Sorry. You're not getting your 7% as promised. In fact, you can't take your money out of that bank; you must leave it there and only collect 1% for another 10 years." What will happen when you have another $5000 to deposit? Will you put it in my bank? Absolutely not. Why? Because you don't know if you'll really get the return you agreed upon. In the same way, if the government steps in and says to the investor/lender, "Sorry... you're not getting the return on your money that you negotiated... and you can't take back your money; you've got to leave it at the low rate," then guess what the investor is going to do. He will never invest in mortgages again! He will take his money to China or municipal bonds or any other vehicle in which he can get a RELIABLE return on his money. If he DOES decide to put money into mortgage debt again, he will demand a higher return to compensate for the greater risk that the government will step in and "help" again. (In other words, Interest Rates on mortgages will go up for EVERYONE!) Thank you Big Government Democrats and George Bush! REGIONAL PROBLEMS -- Some regions in the USA had events that made the mortgage problems particularly bad. For example, inflated property values in California started deflating. Condos in Florida didn't sell as thought and many sit vacant. Companies providing jobs in the "rust belt" (such as Michigan) have moved or gone under; thereby leaving the local homeowners with no income with which to make their mortgage payments.

Get The Bad Apples Out and Let The Rest Of Us Do Our Jobs

More than 2/3 of Indiana's Mortgage Brokers will have Licenses Revoked Under New Law
Secretary of State Todd Rokita announces August 5, 2008, effective date for 600+ revoked licenses; date will allow industry 'last chance' to comply with new testing requirements

Indianapolis (July 7) - Indiana Secretary of State Todd Rokita announced today that a majority of Indiana's mortgage brokerage industry has failed to comply with a phase-in period of a 2007 law and therefore will be unable to continue doing business in Indiana as of August 5, 2008, unless compliance is achieved prior to that date.
Responding to a need to reform the mortgage brokerage industry even before the bulk of the sub-prime mortgage crisis hit, Rokita worked with leaders in the General Assembly to pass a law requiring each licensed mortgage office doing business in the state to employ a Principal Manager to supervise the business affairs of the office and the staff. A Principal Manager is a mortgage professional with at least three years experience in the industry. Furthermore, these the 21st century business and lending practice reforms now mandate that each principal manager take and pass a practice standards examination (Principal Manager Assessment) that is based on Federal regulation, Indiana statute and industry best practices.
Despite the July 1, 2008, effective date for the Principal Manager requirement, roughly 70 percent of Indiana's licensed mortgage brokers are being operated by leaders who have not even attempted to take the state's Principal Manager Assessment. The Secretary of State's Securities Division is, therefore, notifying more than 600 loan broker companies that their licenses are being revoked effective August 5, 2008, should the office continue to operate on that date without a properly credentialed Principal Manager in place. Some of these companies are located outside of Indiana, but are licensed to offer mortgage to Indiana homebuyers.
"Mortgage brokers are being held to a higher standard, and they need to understand the importance of the new requirements they face" said Rokita. "The mortgage and real estate industries are facing unprecedented and deserved scrutiny, and I intend to make sure Indiana homeowners have the opportunity to hire professionals that can do a competent job."
Soon after the law passed in 2007, Rokita's office sent notice of the required test to all loan brokers licensed in Indiana in June of 2007. Another notice advising of the July 1, 2008 deadline was sent in May of 2008. The Secretary of State's office also led town hall meetings in the spring of 2008 in several Indiana cities to discuss the new law with industry professionals.
In announcing the August 5th effective date of the revoked licenses, Secretary Rokita encouraged mortgage professionals to take advantage of a series of preparation courses to be conducted by the Indiana Association of Mortgage Brokers in several cities around the state. The courses are specifically tailored to help prepare mortgage professionals for the Principal Manager Assessment.
"The Indiana Association of Mortgage Brokers developed the test questions for this Principal Manager Assessment that its industry leaders are expected to pass to do business in Indiana," said Rokita. "Mortgage professionals should welcome the additional time they have to comply with this law and should use the time to demonstrate their ability to serve Indiana's homeowners competently."
Secretary Rokita also explained how Indiana consumers can search for loan brokers in a database found on the Secretary of State's Web page - www.in.gov/sos - to determine if the company has a registered Principal Manager in place. After August 5, 2008, records for loan brokers who have not complied with the Principal Manager requirement will no longer be available on the database.
"We believe the Principal Manager Assessment is a fair assessment of the competency of a Principal Manager with three years experience," said Mike Monaco, president of the Indiana Association of Mortgage Brokers. "As an association, we stand by the decisions Secretary Rokita, as our regulator, has made to raise the level of professionalism in the mortgage broker industry in Indiana." Click here if your an Indiana Broker.