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17 Aug 09 Mortgage Delinquency Rate Climbs to All Time High

The delinquency rate on U.S. home loans reached an all-time high in the second quarter.  However the pace of growth for the mortgage delinquency rate slowed and some industry analysts see this as a possible sign the mortgage crisis may be beginning to turn the corner.  Data provided by credit reporting agency Trans Union shows the ratio of mortgage holders who are 60 days or more behind on their payments increased for the 10th straight quarter, to 5.81% nationwide for the three months ended June 30.  That’s up 65%, from 3.53%, in the 2008 second quarter.  Delinquency of 60 days is considered a forecasting sign to foreclosure, because of the difficulty homeowners would have coming up with two back payments to bring themselves current.

While the delinquency rate hit a new high, however, the increase from the 1st quarter to the 2nd was 11.3%. In the two prior quarters, the delinquency rate spiked almost 16%.  That slowdown may be a good sign, said FJ Guarrera, vice president of Trans Union’s financial services division. “We have reason to be cautiously optimistic,” he said.  While there’s no way to know exactly why the pace of growth is slowing, Guarrera said, it appears that loan modification programs aimed at helping distressed homeowners from both the FHA mortgage and conventional lenders are beginning to help. In addition, he said, consumers are being more careful with their spending.  Read the original article written by EILEEN AJ CONNELLY >

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15 Jan 09 Foreclosure Rates Climb 81% in 2008

RealtyTrac released a disturbing foreclosure report indicating that 2.3 million American homeowners faced foreclosure proceedings last year, an 81% increase from 2007, with the worst yet to come as consumers grapple with layoffs, shrinking investment portfolios and falling home prices.  This foreclosure report arrives as President-elect Barack Obama, pushes forth plans to use up to $100 billion of the remaining $350 billion in financial bailout money in an effort to stem the foreclosure crisis from getting worse. 

The 4 states with the highest foreclosure rates last year were Nevada, Florida, Arizona and California.  More than 1.1 million properties in those four states received a foreclosure notice, almost half the national total. And more than one in five of those households were in California, which is coping with massive job losses in the housing and mortgage industries as well as a rapid decline in home prices.

Foreclosure news continues to shock real estate insiders across the country.  In December, more than 303,000 properties nationwide received at least one foreclosure notice, up more than 40% from a year earlier and up 17 % from November, according to RealtyTrac.  Nearly 79,000 properties were taken over by lenders in December, a 61% increase over a year ago.
New state laws, specifically in California, Massachusetts and Maryland, that mandated that homeowners be given advance notice of foreclosure proceedings, lowered filings in several states. But the effect of those laws has worn off and mortgage lenders appear to be going ahead with foreclosure, rather than provide loan modification agreements as promised. 

FDIC Chief: Foreclosure Plan Needed

Loan modification programs continue to show some light as FDIC Chairman, Sheila Bair endorsed a federal  loan modification plan for IndyMac cutomers seeking mortgage relief.
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06 Jan 09 Mortgage Lender Saves Home with H4H

Long Island-based Lend America announced Tuesday it had not only successfully saved a borrower’s home from foreclosure as the California-area authority stood at the door ready to evict the residents, but the mortgage bank had made a hefty new year’s resolution for 2009 — saving 10,000 U.S. homes from foreclosure. A recently enacted Hope for Homeowners awareness program at the bank is slated to do much of the heroics, and has already saved at least one California home from foreclosure.

“Terry and Susan Cook initially owed their lender $491,000 and we refinanced them for $240,000,” mortgage specialist Clyde Ward in a press statement. Lend America stopped foreclosure on the Cook’s home — and eventually saved them $250,000 off the principal balance — when a California authority knocked on the door ready to evict on a misunderstanding. “I was able to get on the phone with them and let them know that the house was refinanced and that they should check with their superiors and verify what I was telling them,” Ward told HW in an interview.  The H4H loan was already in process at the time of the event and the paperwork had simply been misplaced at the office of the authority that came to evict the Cooks. “From beginning to end, we probably closed the loan in 20 days,” Ward said. 

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With a short but sketchy history, the Hope for Homeowners loans program (H4H) was passed in July and initially praised as a surefire method of promoting homeownership affordability and rescuing troubled borrowers. With fewer than 100 applications for Federal Housing Administration loans through Hope for Homeowners since the program’s effective start date of Oct. 1, it was clear by mid-November that some “meaningful changes” were needed. The U.S. Housing and Urban Development secretary Steve Preston on Nov. 19 announced that the Hope for Homeowners (H4H) Board of Directors had approved changes to the program to help more distressed borrowers refinance into affordable, government-back mortgages.  “Clearly, meaningful changes were needed,” Preston said. “These modifications should increase lender participation and help more families who are having difficulty paying their existing mortgages, but can afford a new affordable loan insured by HUD’s Federal Housing Administration.”

The changes included increasing the loan to value ratio (LTV) from 90 to 96.5 % for some H4H loans; for borrowers whose mortgage payments represent no more than 31% of their monthly gross income and household debt no more than 43 %. Raising the LTV ratio reduces the gap between the existing loan balances and the new H4H loan and decrease losses to the existing primary lien holders, according to a HUD press release regarding the announcement. Another change to the program involved simplifying the process to remove subordinate liens by permitting upfront payments to lien holders in exchange for releasing their liens, to permit more borrowers access to the program. The last change would allow lenders to extend mortgage terms from 30 to 40 years, possibly reducing borrowers’ monthly payments enough to make it possible for them to qualify for the plan and save their homes.  The article was written by DIANA GOLOBAY.  Read the complete H4H article online>

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