The Obama administration will extend mortgage assistance for the first time to investors who bought multiple homes before the market imploded. Landlords can qualify for up to four federally-subsidized loan workouts starting around May, as long as they rent out each house or have plans to fill them. This will be done under HAMP and it will pay banks to reduce monthly payments by cutting interest rates, stretching terms, and forgiving principal.
The Federal Reserve Bank of New York posted a report on their website recently regarding student loans. The following is some of their findings:
- About $85 billion in US student loan debt, or 10 percent of the outstanding balance, was delinquent in the third quarter of 2011.
- Of the 37 million borrowers who have student-loan balances, 14%, or about 5.4 million people, have at least one past due student-loan account.
It has been five years since the housing market first began to crash and with many middle and working class Americans still facing foreclosure; you might be surprised to know they’re not alone. Over 36,000 homes valued at $1,000,000 or more have been foreclosed on in 2011 alone. While this accounts for less than 2% of the foreclosures nationwide, it represents a historically huge increase in “upper class” foreclosures.
Rules have been proposed by the Consumer Financial Protection Bureau to supervise large debt collectors and credit reporting agencies. The rule covers consumer debt collectors, including law firms, earning more than $10 million from the activity. This works out to 4 percent of consumer debt collectors but about 63 percent of annual receipts from the debt collection market. Consumer credit reporting agencies with more than $7 million in annual receipts are subject to supervision under the rule.
The banks that settled a nationwide probe of foreclosure practices last month will get a bonus from the deal: protection for $308 billion of home-equity loans they hold. The banks that service about half the nation’s mortgages on behalf of investors will be able to share losses on their junior loans with bondholders and get credit toward the cash they pledged to spend in the settlement.
A bill to streamline Florida’s mortgage foreclosure process has advanced in the House, although consumer critics said the measure might not leave homeowners time to respond to a foreclosure notice before it goes before a judge. A major concern with the bill deals with abandonment of property. Homeowners who work two or three jobs and who let their yards get messy could have their homes wrongly considered abandoned if process servers can’t catch them at home.
Mortgage servicers said that they anticipate hardships from the $25 billion foreclosure settlement. The main problem for loan servicers is the discrepancy between the tight timeline that Fannie Mae and Freddie Mac set for servicers to foreclose on a loan and the now required additional time to negotiate loan modifications. If a servicer doesn’t foreclose within the mandated time frame, Fannie Mae and Freddie Mac can charge penalties that increase every day the loan remains delinquent.
Florida courts will allow clerical mistakes, such as an incorrect party name, to be corrected when the interests of justice require it. In the case of Lake Charleston Homeowners Association, Inc. v. Haswell, the attorney for the HOA named the wrong entity. In response, the association’s attorney took the position that that the incorrect name resulted from a clerical error and asked the court to correct it for purposes of the lawsuit.
As outstanding student debt approaches $1 trillion, it’s one more reason record-low interest rates aren’t doing more to boost housing. The tighter lending standards that have emerged in the wake of the recession weigh particularly on younger, first-time home buyers. 9 percent of 29 to 34 year olds got a first-time mortgage between 2009 and 2011, compared with 17 percent 10 years earlier.
The $25 billion settlement with banks over foreclosure abuses may result in a wave of home seizures, inflicting short-term pain on delinquent U.S. borrowers while making a long-term housing recovery more likely. Lenders slowed the pace of foreclosures as they negotiate the $25 billion settlement. With an agreement reached, banks are likely to resume property seizures.
A surge of home seizures may drive down values, at least for a while, in a fragile market.