Housing Update: Treasury report on Homeowner Mods from Diana Olick

Vodpod videos no longer available.
Diana Olick’s Realty Check:

“Today the Treasury Department releases its monthly status report on its Home Affordable Modification Program launched last Spring.This is the one that gives the number of trial mods offered and then lists all the servicers and shows what they are and, more importantly, are not doing for troubled borrowers. The report goes through Sept. 30th, but the Administration didn’t want to let an important milestone go by, so they had a short conference call this morning with reporters.

Treasury Secretary Timothy Geithner began: “We are announcing today that half a million families are now participating in loan modifications that are substantially reducing their mortgage costs and therefore increasing the amount of money they get to keep.” That was the figure officials targeted several months ago to get to by the end of October, and here we are only at October 8th, so a little back-slapping going on there. “It means that we’re now reaching almost half or roughly 40% of the people currently eligible for this program,” Geithner added.”

But wait a minute! The program was announced with much brouhaha about 3-4 million eligible homeowners! Are they lowering the bar?

“What’s more important than that milestone, Secretary Geithner aptly points out, is that “the number of people participating in trial modifications is now, for the first time, increasing at a rate faster than new families are becoming eligible for this program, that is, facing the risk of foreclosure.”The statement left me wondering how long that would actually hold true? First of all, we have to be clear that he said those “currently eligible for the program.” Now as one reporter on the call pointed out smartly, if the Treasury Secretary says half a million are taking part, and that’s roughly 40 percent of the people eligible, that would mean about 1.2 million are eligible, and at the start of the program, the administration said 3-4 million would be eligible.

So a “Senior Administration Official” was left to do the math.First of all, that 3-4 million is extrapolated out through next year and the year after, because as we all know the foreclosure crisis isn’t getting much better. But then you have to remove all the folks that are not eligible, which is a long list: First there are those with FHA or VA loans, who are being modified separately, then those above the jumbo-conforming loan limit, then those non-owner-occupied types (investors), then those who ditched the home and are long gone, and then those who already have an “affordable” loan but just choose not to pay it. Take those out and you get to 1.2 million.”

Mkay, what about the second dip in housing as foreclosures rise to unemployment and WTH is going on with the shadow inventory of homes the banks are not foreclosing on (they dont want to take the write downs the frakkers) Diana has the scoop, as usual!:

More after the break:

(more…)

October 8, 2009. Tags: , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics. 1 comment.

Housing: State AGs testify before Senate Banking Cmte on foreclosure fraud 2:30pm ET; securitization lobby strikes back at TARP COP report on failures

Update 7: Video added of Levitan explaining the losses must be taken, still, and the US taxpayer isnt taking them this time, no more bailouts, thus the TBTF need to eat the shxt they created. and added video of  NACA calling out Lowman of Chase. Clips courtesy of CSPAN and FDL TV

Update 6: Perfect end to this, Diana Olick, via ZeroHedge, reports the AGs are gonna kill the investigation and cut a WEAK deal to have some pitiful fund for possible restitution to ‘wronged’ homeowners, and an attempt to end the two track system wherein banks keep foreclosure proceedings open, timeline evolving, while evaluating homeowners for mods. Like I said, WEAK.  We need HOLC but we arent gonna get it. Lack of leadership.

My totally unprofessional advice: if you were reamed by servicers with fees and gouged with atty fees or forced placed insurance, or foreclosed on while in HAMP trial modification, or HAMP application process, then contact your STATE AG NOW. File a complaint with your state AG NOW.

Update 5: WSJ reports on modifications being the tool of choice for the AG settlement options and the legislators.

Update 4: Hmmm. CFO of Fannie resigns.

Update 3: Well it’s an oligarchy folks and the TBTF are in control. WASS. I disagree with David Dayen of FDL on practically everything, but he has been doing an excellent job following the foreclosure and housing crisis and the impact on the economy at large and we concur on this issue. He live blogged the hearing today here.

…Dodd says he held a summit on how to handle foreclosures with servicers in 2007. Servicers agreed to modifications, added resources to deal with the scale of delinquencies. Despite agreeing to that, the servicers simply failed to do any of this.

Dodd mentions people losing their homes without having mortgages. Banks were “too quick” to call robo-signing scandal a technical problem, seem emblematic of much deeper problems with servicing practices “putting homeowners at risk.” The current servicer business model “is broken” and not equipped to deal with the current crisis. Mentions financial disincentives to modification among servicers. Could be “extensive problems” throughout the servicing process. Quotes Sarah Bloom Raskin on all the servicer fraud. “Service-driven defaults,” mentions “forced-place insurance” scandal, failure to record transfer, failure to administer HAMP, failure to meet requirements of foreclosure process, and failure to manage trusts under pooling and servicing agreements.

Mentions COP report and systemic risk.

Dodd says he created Financial Stability Oversight Council to deal with exactly this issue. That’s a big deal; the FSOC doesn’t think this is a systemic risk.

Dodd says we need more robust loan modifications with real principal forgiveness, but should expedite foreclosures where the homes are vacant. Must put an end to this housing crisis….(go read the whole live blog!)

Chase claimed they never wrongfully foreclosed, at which point Bruce Marks of NACA jumped up with around 20 supporters and he yelled Perjury! and called the Chase Suit a liar, which the Chase suit clearly is. NACA has been unable to get JPMChase to throw any modification action their way so Marks is pixxed. BofA and others get a ‘pass’ from Marks and NACA because they play ball. If you want help from NACA you sign an agreement to go ‘protest; several times a year at their request.

Consumers are so screwed. Nary a peep from the much vaunted Consumer Protection Team led by the suddenly mute Elizabeth Warren.

The economy will not recover until the American consumer can deleverage and the TBTF MUST take a hit on the books a big hit to do that. It is the simple truth, let;s see how long they can pump $ to try to make the TBTF whole, they do not get it. UE will continue and more homeowners will default.

If the incentives which securitization skewed are not realigned and I would say restored, then there is NO PROFIT MOTIVE for the TBTF Servicers to make meaningful mods the way banks did time immemorial pre MSB bullshxt.

Bank of America is responding to the securitization fiasco by proclaiming they are in HAND TO HAND COMBAT with bondholders on putbacks of Countrywide loans that failed to comply with the PSAs. Fabulous.

To fix what the TBTF geniuses did by overleveraging the world on bad MBS loans they, the TBTF must take a hit, the GLOBAL taxpayers of the industrialized world have ALREADY taken HUGE hits, time to share the pain big boyz, write down losses on HELOCS, release the dead equity off the loans, let ALL refi to 3%

Give all GIs a home loan! There are answers but since they all involve the TBTF taking huge hits and decimating their bonus pools geithner and co cannot see them as options. Frakkers.

Update 2: The complete PDF of the Congressional Oversight Panel report on the mortgage securitization/foreclosure fraud fiasco.

Update: CSPAN now has the hearing listed as 3:15pm ET. Will be carried here

The Senate Banking Committee will hear testimony from the State AGS investigating what IS SYSTEMIC FORECLOSURE FRAUD AND A FAILURE OF THE SERVICING AND SECURITIZATION PROCESS today. Bankstas will be there to whine as well.

Tuesday, November 16, 2010
02:30 PM – 05:00 PM
538 Dirksen Senate Office Building

The witnesses will be: The Honorable Tom Miller, Attorney General, State of Iowa; Ms. Barbara J. Desoer, President, Bank of America Home Loans; Mr. David Lowman, CEO, Chase Home Lending; Mr. Adam J. Levitin, Associate Professor of Law, Georgetown University Law Center; and Ms. Diane Thompson, Counsel, National Consumer Law Center. Additional witnesses may be announced at a later date.

TBTF are still fraudulently foreclosing on Americans. Regardless of your feelings on this issue you should recognize the extreme danger to property rights and rule of law if the securitization fiasco via MERS is allowed to continue to  bypass state courts. No one’s property will be safe if TBTF can manufacture documentation and take your property without due process. PEOPLE WITHOUT LOANS ARE LOSING HOMES ALREADY. HOLC FTW. Sept 28 2008 HRC in WSJ on HOLC here.

HousingWire:

The Senate Banking Committee will hear testimony Tuesday from both sides of recent foreclosure problems at the major banks.

…Senate Banking Committee will hear testimony on the issue from Bank of America Home Loans President Barbara Desoer and JPMorgan Chase Home Lending CEO David Lowman. Speaking first will be Iowa AG Tom Miller, who is heading up the 50-state investigation.

Diane Thompson, counsel for the National Consumer Law Center, and Adam Levitin, an associate professor of law at Georgetown University will also testify.

Those listening in can expect Desoer and Lowman to elaborate on the amount of volume the banks are facing, and the others to demand action to sure up servicing operations…..

Oh cry me a fxckin river. The poor poor TooBigToFail shxtheads that took down the global economy are whining b/c they don’t have enough staff to foreclose?

I CALL BULLSHIT! They DELIBERATELY left peeps in homes to AVOID TOO MUCH INVENTORY DRAGGING DOWN PRICES.

They DELIBERATELY used HAMP as an EXTEND AND PRETEND vehicle to DRAIN FAMILY’S LAST RESOURCES only to turn around and deny the mod when the family had nothing left.

FXCK the TBTF. And Fxck the banksta backed Obamaites like Geithner who are selling Americans PROPERTY RIGHTS and RIGHTS TO DUE PROCESS down the river to avoid WRITING DOWN BAD PAPER, AND HELOCS.

The TBTF MADE THE LOANS, the TBTF DESIGNED THE ENTIRE SECURITIZATION PROCESS.

We, taxpayers, made them whole. They have failed to do jack shxt to help families.

Obama is an utter failure. Hillary would have done HOLC, This would be BEHIND US. We would be RECOVERING.

As we have said for THREE YEARS, there will be NO ECONOMIC RECOVERY if HOUSING is not addressed. DO THE DAMNED HOLC.

Meanwhile back at the ranch the TARP Congressional Oversight Panel (TARP COP) REAMED the securitization market in a report today based on a hearing two weeks ago.

..”I’m concerned about Treasury making representations categorically that you don’t see a systemic risk,” Silvers told Treasury’s chief homeownership officer. “And let me walk you through exactly why.”

“That letter asks for $47 billion of mortgages — of mortgage- backed securities to be repurchased at par,” Silvers went on. “Do you know what those mortgages are currently carried at … the market value of those bonds today?”

Caldwell declined to comment.

Silvers continued:

“OK, fine. Let me tell you what the Fed says they’re worth. The Fed tells us they’re worth 50 cents on the dollar. So if the Fed’s request to Bank of America is honored, right, Bank of America, assuming they are carrying these bonds, assuming when they buy them back they mark them to market, Bank of America will take a $23 billion loss.

“The Federal Reserve further informs us that there is nothing particularly unique about that particular set of mortgage-backed securities — meaning they have not been chosen…because they’re particularly bad. They believe they are of a common quality with the rest of Bank of America’s underwritten mortgage-backed securities. There are $2 trillion [worth] of Bank of America’s underwritten mortgage-backed securities.

“Five such deals — five such requests, if honored to Bank of America…will amount to more than the current market capitalization of Bank of America, which is $115 billion.

“Now do you wish to retract your statement that there is no systemic risk in this situation? And the word is ‘risk’ — not ‘certainty’ — but ‘risk’? And I would urge you to do so, because these things can be embarrassing later.”…

From the report issued today:

…”Clear and uncontested property rights are the foundation of the housing market,” the report said. “If these rights fall into question, that foundation could collapse. Borrowers may be unable to determine whether they are sending their monthly payments to the right people. Judges may block any effort to foreclose, even in cases where borrowers have failed to make regular payments.”…

Better do HOLC now Bankstas NO MORE TAXPAYER BAILOUT $ FOR YOU!!!! FHA will take until 2014 to get to 2% MANDATED reserves!! Good Grief!! And ‘experts’ agree, HOUSING IS GOING DOWN AGAIN.

SIFMA the IDIOTS who designed the securitization process and who lobby for it madly have a typical it’s all lies! everything is fine! response courtesy the NYT acting as mouthpiece for Obama positions as always via Naked Capitalism:

..No Breaks for Robo-signing Computer Stamping Files“:

It doesn’t matter when mortgage assignments and endorsements are recorded because the existence of the pooling and service agreement and purchase sale agreement is proof in itself that the loan was conveyed, said Stephen Ornstein, a partner in the Washington office of SNR Denton, a law firm that represents loan servicers and lenders.

“If the assignment is missing, you can create it by having the old assignee reassign it to you,” Ornstein said.

I’ve heard this argument before, and none of the five experts who advise New York state on trust matters (and virtually all mortgage securitizations use New York trusts) accept that point of view. New York trusts can accept assets only as stipulated in their governing agreement. The pooling and servicing agreement made very specific provisions as to how the notes (the borrower IOUs) were to be endorsed and further required that the process be completed by specific dates, typically no later than 90 days after the trust was closed, with only very limited exceptions. And the trustee, on behalf of the trust, was required to provide multiple certifications that all these steps had been taken.

Let’s put it another way: the industry position is that the underlying contract, the pooling and servicing agreement, can just be ignored if the industry screws up on a grand enough scale. Would any servicer tolerate this argument if someone, say Treasury, tried to cut their fees? Funny how the “sanctity of contract” argument is nowhere to be found when adherence to contracts might crimp industry profits….

The soopergeniuses in D.C. and on Wall St have tried everything EXCEPT meaningful mods, helping homeowners, principal writedowns-HOLC. Nothing is working. DO THE DAMNED HOLC ALREADY.

EVEN CATO IS NOW BEHIND HOLC!!

November 16, 2010. Tags: , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, Popular Culture, TARP, Unemployment Statistics, Wall St. 1 comment.

Housing – Details on FHA Refi program launching next month

Another update, courtesy of CR and Diana Olick, HUD says no talks underway for another FTHB tax credit. Good, it is useless:

Diana Olick at CNBC contacted HUD today: Another Home Buyer Tax Credit?

[A] HUD spokesperson … responded: “No news here…there are no discussions underway to revive the credit.”

Here’s a song for anyone suffering through HAMP or HousingHell-

Above the post update- from Sunday:

HENRY: But in May, you said we are beginning to turn the corner (on housing). Can you still say that? Are we still turning the corner when these numbers are so awful?

DONOVAN: Ed, compared to where we were — and I am talking about where we have been for the last 18 months, the housing market, no question was significantly better. The issue now and what we are focused on is the future.

Shaun Donovan, HUD Chief, was telling America Sunday that HAMP worked just fine! I cannot even laugh at that having been in the Eighth Circle of Hell known as the HAMP application process.

So 500,000 people were strung along, paid on time, and were then kicked off the program and out of their houses much worse off financially and emotionally, and that was fine, right Donovan? the important thing was to protect TBTF from taking  hit on inventory flooding markets right ? Man these folks pixx me off. And just how did that work out? WE ARE IN THE EXACT SAME POSITION!

In fact, it is worse. NOW homeowners no longer TRUST these half axxed Govt programs, they KNOW we are being strung along, so now WALK AWAY is in the minds of the middle class, FAIR GAME. You MORONS are BREAKING the PARADIGM!

Continuing the ‘doing everything but the right thing’  meme, HUD is rolling out another iteration of help for homeowners that shovels tax $ to TBTF without actually, you know, HELPING the actual homeowners.

Maybe this will be done as the MS White Paper suggested which I think makes sense. If not, it is a drop in the bucket of overflowing programs that just prop up TBTF and do nothing to address the underlying issue: consumer balance sheets MUST be fixed to get the economy growing again, period.

HousingWire:

According to a mortgagee letter sent out today, the new program would provide additional refinancing options to underwater homeowners starting Sept. 7. To be eligible for the new loan, the homeowner must be underwater but still current on the mortgage. A credit score of 500 or better is required, and once refinanced and insured by the FHA. The new refinanced loan must have a loan-to-value ratio of no more than 97.75%.

The borrower’s existing first-lien holder must agree to write at least 10% of the unpaid principal balance, and it must bring the borrower’s combined loan-to-value ratio on that first mortgage to no more than 115%. The existing refinanced loan cannot be an FHA-insured one.

Over the last 18 months, the Federal Housing Administration (FHA) has insured 30% of purchases and 20% of refinances in the housing market. During that time, FHA also helped 1.1m homeowners refinance and insured 1.4m mortgages. More than 80% of those were for first-time homebuyers.

Donovan said the refinance program will target the growing number of underwater borrowers, who owe more on their mortgage than their home is worth…

God Bless America. I hope this saves some homes for some families. TBTF does not need anymore of our tax $ they are sitting on over a trillion already.

Update: Oh look, Trez has decided GSE backed mortgages, will NOT be aLLOWED TO PARTICIPATE IN THE PROGRAM! tHE EXACT OPPOSITE OF WHAT needs to happen, sorry damned caplock! I dont have time to fix it, here you go:

KBW said the FHA refi program is unlikely to have “any meaningful impact” on agency MBS, because only 8% of Freddie Mac and 14% of Fannie Mae mortgages have LTVs in excess of 100%. Additionally, the firm noted the Treasury Department has said the government would not consider allowing the GSEs to write-down underwater mortgages.

So IOW it is another BS head fake program to slow inventory. They wont be happy until housing takes the economy down again, it is already happening. The stupid it burns!

August 30, 2010. Tags: , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, Popular Culture, TARP, Taxes, Unemployment Statistics, Wall St. Comments off.

Housing Update: It begins – BofA announces principal reduction program…

Update 3: Ahhh BofA was facing the MASS AG Suit when they found religion. This is limited to the worst products in the Countrywide portfolio:

…The bank’s program is limited to Countrywide borrowers whose loan balance is at least 120% of the estimated home value, who are at least 60 days overdue, and who can show that financial hardship makes them unable to meet current payments. The bank estimated that 45,000 customers will qualify for principal reductions averaging more than $60,000.

Only the riskiest loans will be eligible. They include subprime loans; “option adjustable-rate” mortgages entailing minimal payments now but big increases later; and certain loans that have a fixed rate for two years and then adjust annually.

The bank’s move is part of an agreement to settle claims over certain high-risk loans made by Countrywide Financial, which the bank acquired in mid-2008. The Massachusetts Attorney General’s office, which was negotiating with the bank, said it was prepared to file suit had the agreement not included principal reductions….

Update 2: Some details from Reuters by way of CalculatedRisk:

From Reuters: BofA to start reducing mortgage principal-sources

Bank of America will … announce plans to start forgiving mortgage loan principal for troubled homeowners who owe more than 120 percent of their home’s value or are battling ever-expanding “negative amortization” loans.

According to a summary of the program obtained by Reuters, Bank of America pledged to offer an “earned principal forgiveness” of up to 30 percent in two stages. The lender will first offer an interest-free forbearance of principal that the homeowner can turn into forgiven principal annually over five years, provided they stay current on their payments….

Update: In an amazing coinkydink the IG just issued a report ripping the Obama Housing Plan to shreds just as these ‘voluntary’ principal reduction programs are announced, heh:

A government watchdog agency criticized the Obama administration’s $50 billion campaign to avert foreclosures by reducing mortgage payments for millions of distressed borrowers.

A report by the inspector general of the federal Troubled Asset Relief Program, or TARP, said results of the loan-modification program so far have been disappointing. The report, released Tuesday evening, also said that the U.S. Treasury has failed to measure results properly for the Home Affordable Modification Program, known as HAMP, and that it may merely delay foreclosures in too many cases.

When President Obama launched HAMP in early 2009, the government said it would help as many as three million to four million homeowners avoid foreclosure. So far, however, about 169,000 households have successfully completed trial periods and been given long-term payment relief…

I know this is unpopular. However, if we had done what Hillary proposed in 2007 (HOLC like FDR did) or what MAC proposed in 2008 (every homeowner getting a reduction to market rates, not forgiven, but the principal being non interest bearing and tacked onto end of loan), then IMO the housing markewould have cleared already.

Instead President Credit Suisse-UBS has continued with the EPIC fails of HARP, HAMP, extend and pretend, and we STILL face 5-6 million foreclosures in the year ahead.

Now Bank of America is doing what Sheila Bair at FDIC has been proposing for two years, they are writing down principle on underwater loans. ThThey are approaching it in a manner which ties the homeowner to the home, it can be done. So you ‘earn’ the forgiveness over a 5 year period of payments. This way underwater homeowners stay and the cash flow is assured for 5 years. Good deal.

The key issue IMO is with continued UE we cannot sustain the underwater walkaways, resets in pick a pay horror products AND the natural loss of homes to UE. Something needs to be done to clear it out before it continuesto snowball. We have entered the double dip in housing already, see sidebar for HousingWire and CalculatedRisk pieces.

Also recall please that the ENTIRE BASIS OF TARP was HOUSING. The way it was sold by Paulson was that it was a vehicle to purchase MBS and CDS b and free the banks from the problem. Had they done this they could have done HOLC like FDR, bought the loans and written them down in one fell swoop (and anyone who thinks taxpayers arent already backing these collapsing loans hasnt been paying attention- FAN FRED which now have an UNCAPPED TAXPAYER GUARANTEE from treasury, are backing ALL the remaining loans being writtern today). See our piece this week on FAN FRED .

Diana Olick reported it on CNBC this morning, PS MiM are BofA shareholders) when the video comes up we will post!

forgive typos, on the go with the netpad EEEPC which is kewt but doesnt show the whole box I am typing in right now, arrgle!

March 24, 2010. Tags: , , , , , , , , , , , . Economy, FDIC, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Taxes, Unemployment Statistics. Comments off.

Meredith Whitney & Jamie Dimon on principal forbearance in the JPMorgan Chase earnings call PLUS Are JPMC, BofA, Citi taking kickbacks for second liens on short sales?! & HAMP/MHA assisted a whopping 7% of those eligible last year..

Update:  Short Sale Kickback video added

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In other great news, Diana Olick is breaking a HUGE story now on CNBC that the big servicers, JPMorgan Chase, Bank of America and Citi have demanded off-HUD, off ClosingStmt payments to release second liens they hold in short sales (against RESPA law).

Treasury told Diana they were unaware of this and will look into it. Good grief. and they wonder why the servicers dont want to do mods? THEY ARE GETTING KICKBACKS ON SHORT SALES! Plus they get an INCENTIVE PAYMENT to do short sales from Treasury (we the taxpayers) now. My Lord this is unreal.

Again this is the fault of the WH and Treasury.  Treasury actually RAISED the cap on the ‘incentive fees’ the servicers can earn by doing their damn job as servicers today to 35 billion. Banks will do exactly what they can and no more. Sheila Bair at FDIC is the only one moving on principal forbearance, as usual she is ahead of the curve.

Plus the AP isn’t buying the BS spin anymore in its reporting of the much vaunted numbers Treasury is spinning today on their newly permanent mods (which they told the servicers to waive documentation for to achieve, the only thing the trial mods can be disqualified for now is ‘property’ disqualification, nice eh?):

The Obama administration’s mortgage relief plan provided help to only 7 percent of borrowers who signed up last year, another black mark for the struggling program.

Ouch that’ll leave a mark.

About 900,000 borrowers have enrolled in the $75 billion program since it launched in March, the Treasury Department said Friday. But as of last month, only about 66,500 homeowners had received permanent relief. Another 46,000 have been approved and should be finalized soon.The plan aims to make borrowers’ mortgages more affordable by reducing the mortgage interest rate to as low as 2 percent. They receive temporary modifications, which are supposed to become permanent after borrowers make three payments on time and complete necessary paperwork, including proof of income and a letter explaining the reason for their financial hardship.

The Treasury Department is pressing the 102 mortgage companies that are participating in the program to do a better job….

This is a great back and forth. I think we can confirm Treasury is doing exactly JACK SHXT about meaningful mods after hearing this discussion, so much for Obama being tough on those fat cats:

CalculatedRisk:

Here is an exchange between Meredith Whitney and Jamie Dimon on the JPMorgan conference call this morning (ht Brian):

Whitney: [W]e’re reaching a critical point in terms of all of the loan modification efforts and this is an industry question but then how it specifically affects your Company, given the fact that the industry feedback and statistics on the loan modification efforts are not good, so you question what’s the next initiative and the issue of principal forbearance. How much momentum do you think that has, can you comment on what stage we are in terms of obviously the extension ends [soon] with the last slug is over in February, so where do you think we are in terms of the government’s efforts to influence banks to do certain things?

Dimon: Well remember we do modifications of our own and we do the government modifications and I do think they’re kind of new, it was complex, and I think people will get better at it over time, Meredith. We have not thought of a better way to do it than loan by loan, which is does the person want to live there, can they afford to live there, and we really think that the payment, how much you’re paying is more important than principal. Even if you are going to do something on principal, to do it right you have to do it loan by loan and it effectively comes a similar kind of thing. The difficulty is the loan by loan part and we’ve asked the government and I think they tried to streamline a little bit to have programs because there’s too much paperwork involved in it so a lot of the reasons we’re not getting to final modifications half the time we don’t finish the paperwork, so they need the lower payments but they weren’t finishing the paperwork so we’re trying to get better at it, honestly, we rack our brains to figure out if there’s a better way to do it and you can do it more macro than loan by loan but once you start talking about macro, you’re going to get involved in a lot of issues about whether the people live there, whether they have the ability to pay, whether they were honest when they first told people how much their incomes were, so we’re working through it.

Whitney: Okay, do you get a sense that there’s something right behind HAMP, that there’s another solution for the government or is it more your efforts?

Dimon: We’re trying to do this, look, we’re trying to have ideas and they are trying to have ideas but if we had a brilliant one we would be very supportive of doing it. We want to do the right thing for the people.

Whitney: Okay, so a point of clarification on your answer, issue of principal forbearance is not something that people should be overly concerned about with respect to reserves and capital for the bank?

Dimon: No, I think if there’s a macro government force on something like that you could have a fairly significant effect on loan loss reserves and losses, etc.

Whitney: But is that a real, any momentum?

Dimon: Honestly Meredith you probably know as well as we do.

Whitney: I don’t know. I can’t help myself on that one.

Neither can we!

January 15, 2010. Tags: , , , , , , , , , , , , , , , , , , . Economy, FDIC, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Taxes, Unemployment Statistics, Wall St. Comments off.

Housing: Treasury HAMP/Making Home Affordable Modification Servicer Status Report: just 31,000 mods made permanent

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EPIC fail. Will have video up shortly. Diana Olick broke it down, of the 3 million delinquent mortgage pool in the report,  1 million eligible, then down to 700,000 made trial mods then 30,000 of those FAILED trial mods and 31,000 passed into permanent mod status.

The % they are reaching is laughable (in an hysterical crying and screaming sort of way). The program was supposed to help 4 MILLION HOMEOWNERS. They have helped 31,000. THIS MORNING Geithner was claiming they were making meaningful progress. Gawd help us.

CNBC:

So far the 78 banks and servicers in the HAMP, which represent 85 percent of the total mortgage market, have just over 3 million loans on their books that are at least 60 days past due. So they sent out notices to those 3 million borrowers requesting more information.

A lot of those borrowers (as high as 50 percent) didn’t respond, according to the banks. Some don’t even live in the houses anymore. Gone. Of those that did respond, just over a million had at least the verbally stated income to qualify for a modification under the program. Others were either not owner-occupants, didn’t have the income level, or were unemployed. So 1,032,837 were offered modifications. But only 759,058 modifications were started. Why? Because a lot of the borrowers just didn’t want them. They would rather try to sell the house or go into foreclosure and walk away. Remember, some borrowers are so underwater on their loans, that they will never see equity again, so why bother making any modification payment, even if it is affordable.

Of the 759,058 modifications started, 697,026 are still in the three month trial phase. That’s when you’re supposedly making your monthly payment and gathering all the necessary documentation for the modification. Since the program really kicked into gear over the summer, we didn’t have any numbers on how many succeeded in the trial period and went permanent, until today.

Treasury reports that 31,382 trial modifications are now permanent. It also reports, well I had to do the math because they didn’t put it on the report, but a spokesperson did independently confirm, that 30,650 modifications were disqualified.

Presumably, the vast majority were either determined ineligible when all their paperwork came in at the end of three months, or they weren’t current on their payments,” the Treasury spokesperson told me….

December 10, 2009. Tags: , , , , , , , , , , , , , , . Cabinet, Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Unemployment Statistics, Wall St. 1 comment.

Meredith Whitney on Markets and Financials

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Meredith was guest host on Squawk this morning. She is still bearish and sees no fundamentals to support the financials rise. She notes the consumer is still hurt and there is nothing to suggest we (consumers) are coming back soon.

Joe Kiernan was a real axx, challenging her at every turn on how outside financials is not her ‘thing’ and what does she really know about them. What an utter tool he is. Well Joe, Meredith is the most highly regarded financial analyst on the street AND has expanded her ‘knitting’ in her role as head of her own firm. AND financials touch it all Joe.

Joe challenges her on her stmt that BofA reports >60% of trial mods may default. Meanwhile it was the HEADLINE on the CNBC home page from Diana Olick yesterday. What a jackass he is. Go back to your microbiology degree Joe you moron.

more about “Meredith Whitney on Markets“, posted with vodpod

December 8, 2009. Tags: , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, Unemployment Statistics, Wall St. Comments off.

Housing: FINALLY! Some data on the trial mods! Treasury reports more than 27% of homeowners in trial modification are delinquent…

They were forced to answer the inquiry on status of the 600,000+ trial mods finally, and it ain’t good. Not good at all. What IS good is that we are getting some data. Just last week HUD Treasury was claiming no one was late on these payments. On tv in fact, in an interview with Diana Olick which we posted here.

The real shxtstorm is gonna hit us when FANNIE and FHA run out of money. Their book is over 3 TRILLION at FAN alone now and their delinquency rate is EXPLODING. A month after saying they Absolutely Positively did not need a bailout, the FHA is raising it’s premiums, cuz guess what? They need a frakkin bailout…

When will these fools stop trying everything BUT the damned HOLC!!!?!? AARRRGLE! This Admin is so frakking enamored of everything ELSE FDR did why not this? Oh yeah HRC suggested it in 2007 and 2008, thus Obama won’t do it. Frakkers. Their next ingenius plan will be the HEMAP model so taxpayers can LOAN homeowners their mortgage payments. Again padding servicers pockets and not addressing the underlying issue. Via FAN FRED we OWN THE DAMNED HOUSES ALREADY!! Why not buy them outright under HOLC and cut a deal with the homeowners directly with the government. It would be less ongoing intervention and cost less dammit. This is yet ANOTHER example of an actual CRISIS that Team Obama has FAILED to address successfully, while they focus all their attention on health care, housing is falling off a cliff and it WILL drag the entire economy down with it…again.

ABCNews:

More than one-quarter of homeowners receiving help under a U.S. government foreclosure prevention plan are behind on their new mortgage payments, a Treasury Department survey has found. Some 650,000 borrowers are participating in the trial phase of the Obama administration’s Home Affordable Modification Program, a $75 billion taxpayer-financed program launched this year….

…A Treasury Department survey of large mortgage servicers found “over 73 percent of borrowers are current in their trial plan payments,” Assistant Treasury Secretary Herbert Allison told a congressional oversight panel.

That leaves about 27 percent who are delinquent on the payments.

Allison provided written answers to questions raised at an October hearing before the Congressional Oversight Panel, which monitors the government’s foreclosure prevention plan and other financial rescue efforts.

Allison said that “while not all eligible borrowers will convert to permanent modifications, it is too early to estimate a failure rate, diagnose causes and predict future success rates.”

Let me give them a hand. The diagnosis of the underlying cause is UNEMPLOYMENT. The failure rate is TOO LARGE. The future success rate will FALL as UE rises. DO THE DAMNED HOLC! (Read HRC WSJ OPED on the HOLC from September 24, 2008 at link)

Experts say the conversion rate to permanent loans is the key to determining the program’s ultimate success or failure.

The Treasury has not published figures on how many trial loan modifications have been made permanent, but it said it will start doing so this month.

The next monthly report on the program will be released next week, Treasury Department spokeswoman Meg Reilly said.

This week Treasury officials threatened to fine mortgage lenders unless they speed efforts to give hard-pressed homeowners a permanent break on monthly payments….

December 6, 2009. Tags: , , , , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Hillary Clinton, Housing, Obama Administration, Politics, TARP, Unemployment Statistics, Wall St. Comments off.

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