Housing – Obama and Treasury to add principal writedowns to HAMP program & add plan for unemployed homeowners…

The principal writedowns are 3 years too late, they will be much larger now. So will losses to taxpayers.  Here at MiM we have been following the housing collapse from the epicenter here in Phoenix, and Obama’s first pathetic sellout HAMP program ‘suggestions’ to the banks has gotten us less than 200,000 mods out of a pool of 5 million, with 50 billion earmarked while they extend and pretend and play head games with families in these homes.

The thing people still seem to be having trouble grasping is that we taxpayers are ALREADY on the hook for these defaults via FANNIE FREDDIE. So IMO it would have been far better to a, use TARP for its original purpose of buying up the bad MBS products, or b, encouraging principal writedowns a la the BofA/FDIC method of ensuring a 5 yr cash flow…

We are in the double dip of the housing recession and it will bring the economy down…again…

WSJ:

The White House will announce Friday an expansion of its foreclosure-prevention efforts to include reducing the mortgage loan balances for some distressed borrowers and giving temporary help to the unemployed, people familiar with the plans said.

In the latest overhaul of the year-old mortgage-loan modification program, these people said, the White House will announce plans to allow unemployed borrowers to receive sharply reduced payments—or a break from making any payments—for at least three months and up to six months. The revamp will also require banks to consider writing down loan balances as part of the formula for lowering monthly payments under the federal Home Affordable Modification Program, or HAMP.

In addition, the administration will introduce a program that uses the Federal Housing Administration to insure new loans for borrowers who are underwater, owing more than the current values of their homes.

Under that program, investors who reduce loan balances to 96.5% of the current property value would refinance borrowers into an FHA-backed loan. Investors would have to reduce first-lien mortgages by at least 10%. For properties that have second-lien mortgages, the program is designed to reduce the total mortgage debt to no more than 115% of the estimated property value. Banks that hold second-liens will be eligible for incentive payments if they write down those loans so borrowers can qualify….

Other Resources:
Making Home Affordable Treasury Program
e.Fannie Mae.com (servicer updates)
HUD- Department of Housing & Urban Devlopment
Fannie Mae mortgage customers call Fannie Mae at  1-800-7FANNIE

( 1-800-732-6643         1-800-732-6643) or www.fanniemae.com/homeaffordable
Freddie Mac mortgage customers call Freddie Mac at  1-800-FREDDIE ( 1-800-373-3343) or www.freddiemac.com/avoidforeclosure
VA mortgage customers (thank you for your service) vall VA Financial Counselors at  1-877-827-3702 or www.homeloans.va.gov
FHA –www.fha.gov
Hope Now Alliance (Hank Paulson’s Plan)

1-888-995-4673 or www.hopenow.com

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March 25, 2010. Tags: , , , , , , , , , , , , , , , . Economy, FDIC, Finance, Foreclosures, Housing, Obama Administration, Politics, Popular Culture, TARP, Unemployment Statistics, Wall St. 2 comments.

Update: Fannie/Freddie warn of more losses; FHA Commissioner on audit results…

Update: Whoomp there it is, regular Karnak we are. WSJ has it:

Fannie Mae and Freddie Mac, already reeling in red ink, are warning they could face additional losses from the weakening condition of mortgage-insurance companies.

Fannie and Freddie together have required capital injections from the Treasury of $112 billion since the government took them over through conservatorship last year. Their need for government support would have been greater without collecting on claims from mortgage-insurance companies. Fannie and Freddie have received payouts of $2.3 billion and $658 million, respectively, from mortgage insurers through September this year.

But as conditions for mortgage insurers deteriorate, Fannie and Freddie have warned that their claims against the insurers may not be paid in full. Fannie set aside $1 billion in loss reserves to cover the possibility that mortgage-insurance companies won’t be able to pay full claims, the company said in a Securities and Exchange Commission filing.

Freddie hasn’t set aside reserves but warned in an SEC filing that “several” of its insurers are “at risk of falling out of compliance with regulatory capital requirements, which may result in regulatory actions that could threaten our ability to receive future claims payments, and negatively impact our access to mortgage insurance for high [loan-to-value] loans.”

Ever since the mortgage crisis erupted two years ago, there have been concerns about the ability of mortgage-insurance companies to pay claims on all policies. In recent weeks, the concerns have taken on added significance as mortgage defaults continue to accelerate far beyond the subprime market into the broader prime market….

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November 12, 2009. Tags: , , , , , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Hillary Clinton, Housing, Obama Administration, Politics, Wall St. 5 comments.

The other shoe drops: Fannie Mae reports MASSIVE 3Q loss of $18.9 Billion and asks govt for another 15B bailout; Fannie Mae rolls out ‘Deed for Lease’ program renting foreclosed homes to owners…

housesforsale

Update: The other shoe just dropped. I am guessing FAN didn’t roll out this Deed for Lease program out of the goodness of their hearts, they turned around and announced a MASSIVE 3Q loss and need ANOTHER 15B from Treasury:

itrader:

The latest particular does of lunacy and economic calamity coming out of the intellectual midgets at Fannie and the FHA should be sufficient to push the market well into 1,100 territory tomorrow. FNM’s loss for Q3 is $18.9 billion, up from $14.8 billion in Q2, a time when the market was up a good 15%: ever wonder who keeps on subsidizing those gain? That’s right – you. Credit-related expenses increased to $22 billion in Q3 from $18.8 billion in Q2. Oh, and Fannie now wants another $15 billion rescue from the Treasury (which is having some troubles with getting that pesky debt ceiling raised to one googol) so it can continue with its plan of keeping shadow inventory away from the market, rent foreclosed houses to their owners at staggeringly low rates, and continue the pretense that bank’s balance sheets are well capitalized. Seriously, is the twilight zone any more palatable if one just drinks the Kool Aid or takes some crazy pill? We are ready and willing for the plunge.From the just released results by bankrupt Fannie Mae:

WASHINGTON, DC – Fannie Mae (FNM/NYSE) reported a net loss of $18.9 billion in the third quarter of 2009, compared with a loss of $14.8 billion in the second quarter of 2009. Including $883 million of dividends on our senior preferred stock held by the U.S. Department of Treasury, the net loss attributable to common stockholders was $19.8 billion, or ($3.47) per diluted share, in the third quarter of 2009, compared with a loss of $15.2 billion, or ($2.67) per diluted share, in the second quarter of 2009. Third-quarter results were largely due to $22.0 billion of credit-related expenses, reflecting the continued build of the company’s combined loss reserves and fair value losses associated with the increasing number of loans that were acquired from mortgage-backed securities trusts in order to pursue loan modifications.

The loss resulted in a net worth deficit of $15.0 billion as of September 30, 2009, taking into account unrealized gains on available-for-sale securities during the third quarter. As a result, on November 4, 2009, the Acting Director of the Federal Housing Finance Agency (FHFA) submitted a request for $15.0 billion from Treasury on the company’s behalf. FHFA has requested that Treasury provide the funds on or prior to December 31, 2009…..

Update on status of Fannie Mae’s HAMP/Making Home Affordable applications (HousingWire) :

(…) Fannie said as of the end of Q309, it had 487,000 trial modifications in progress through the Making Home Affordable Modification Plan (HAMP) and it has met the Treasury Department’s goal of 500,000 modifications in process by November 1.

Total loan workouts for Q309 totaled 49,000, including 28,000 loan modifications, compared with 41,000 workouts, including 17,000 modifications, during Q209.

“Even though the volume of trial modifications that we have initiated on Fannie Mae loans under the Home Affordable Modification Program has been substantial, a low percentage of our trial modifications had converted into completed loan modifications as of September 30, 2009,” Fannie Mae said. “One reason is that activity under the program has been increasing over time, so that many loans have not had enough time to complete the trial modification period prior to September 30, 2009.”

Also on Thursday, Fannie announced a new program that will allow new deed-in-lieu program that allows the borrower to sign a lease to rent their home from Fannie Mae in exchange for the voluntary transfer of the property back to the lender….

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November 5, 2009. Tags: , , , , , , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, Unemployment Statistics, Wall St. 7 comments.

Update 2: Program not on hold- in ‘finalization’; Treasury reports program ‘suspended’; Housing: HAMP – 2MP (Second Lien) Modification Program Guidelines issued…

Update 2: 1/9/10 – See HousingWire: Treasury pushes back, says 2MP program is being ‘ramped up’ and will be rolled out:

.”.I recently gave a hopeful thumb up to Calculated Risk’s evidence that the Treasury Department’s $75 billion Housing Affordable Modification Program (HAMP) had abandoned its ill-advised scheme to guarantee modifications on second-lien mortgages.

HousingWire quotes Treasury spokeswoman Meg Reilly as saying, “That rumor is wrong.”

And in an email to Calculated Risk, Reilly also says that the progress ramp-up to systematization will soon lead to finalizement:

The Second Lien program is moving forward. Treasury has been working to create program infrastructure and technology, including a new platform that matches second liens to first liens modified under HAMP. Because there has not been a systematic method of notification to second lien holders when a first lien on the same property is modified, ramp up has taken some time. We have made enormous progress and continue to move forward with innovative technological development and program implementation and expect to finalize servicer contracts soon….”

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August 28, 2009. Tags: , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, Unemployment Statistics. 6 comments.

The Housing Bubble Always Pops Thrice…

…or something.

We’ve been Through the Looking Glass for so long now I forget how many times we’ve bumped the fake bottom in 07.  Shedlock has the awesome charts, here we are in Housing starts in ’11-

housing starts CR

Someone should have played the Frozen soundtrack for Bernanke and Yellen and we would’ve been on the plateau end of a nice recovery by now. Let it Fxckin’ Go already. Instead we have miles to go to bottom out housing prices.

Importantly, extra requirements were added so well documented citizens have to jump through hoops, and if you have good credit they don’t want you-

…New government rules have mortgage lenders checking, and double-checking, the income status of borrowers. Now more than ever, lenders want to ensure that home buyers have the ability to repay their loan obligations…

Personally I think all that was needed was removing the high risk low underwriting loans backed by tax dollars. Jamie Dimon wants to lend to everyone with a pulse? Great, but not on my back jack. But instead we got extra regs and the undocumented applications got bumped up and okayed increasing the risks of another national bubble and accompanying collapse even more likely, while hampering the middle class ability to function (as does everything Ive seen DC do since 1999):

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April 7, 2016. Tags: , , , , , , , , , , , , , , . CITI, citigroup, Economy, FDIC, Finance, Foreclosures, Housing, Immigration, Labor Department, migrant crisis, Obama Administration, Politics, Popular Culture, refugee, TARP, Taxes, Wall St. 2 comments.

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/FinReg: $1B for Federal Bridge loans for unemployed homeowners – HEMAP

We covered the HEMAP plan and Barney Frank’s push for it. It was added  to the FinReg bill. It is absolutely the case that unemployment is driving housing defaults now and that the HAMP program does not help the unemployed, despite UE lasting for close to 99 weeks in most cases, the debt levels of those in default are just too high.

Barney Frank and Team Obama’s larger housing vision seems to be centred on a transition to Section 8 status for a majority of the foreclosures FAN FRED FHA are taking onto their books.

It began with FAN Deed4Lease program under which homeowners rent their homes back from Uncle Sam. And the Section 8 roll out is already underway and by the time we get 6 months into ’11 when Timmeh claims we will have an outline for their plan for FAN FRED FHA, it will be a fait accompli.

The problem I have with all these plans is the  g-d lenders who brought this tumbling down skate away with the taxpayers forced to eat the FAN FRED FHA losses which, don’t kid yourselves will be $1trillion easily IMO.

The $400B dollar scribble- It was DEMOCRATS who went apoplectic yesterday when the big banks called them wailing over GOP Rep Jeb Hensarling having penciled in FAN FRED as ‘financial institutions’ under the FinReg draft on banks paying to wind down big financials that fail. They FREAKED OUT at the THOUGHT of having to pay for the GIANT SMOKING CRATER THEY CREATED. And the Democrats ran to help them avoid that fate, leaving it ALL on US, the taxpayers.

It seems to be the end of the residential housing market as we jave known it. Frank is constantly stressing his affordable rental housing schtick nowadays.

If this helps some families get past the transition, it seems overall a small price to pay at $1B, the $85b in HAMP seems to have done absolutely nothing, worse than nothing the extend and pretend has been a PAINFULLY slow tearing off of the band aid, and we are only halfway through the process.But families be cautious, don’t put yourselves Back on the Chain Gang before next year, housing prices are still cratering and when Uncle Sam is done I don’t know what value the homes we are holding may be worth.

Who the hell knows. And IMAGINE what this will do to RENTAL HOUSING PRICES. Landlords will be competing with Uncle Sam setting ‘fair rental rates’ GOOD GAWD!

And that assumes we get some spending restraint and just restraint in general from the Congress and a new POTUS in ’10 and ’12. Let’s hope there is a housing market left to rehabilitate when we get there.

The shxtty part is again they added a tax to pay for this newest $1b program. Had they done HOLC but noooooo. Credit Suisse couldn’t have that! frakkers.

Why the hell not use the $$$ sitting in the HAMP TARP fund? That is how the funding was originally proposed. Frank tried also to use repaid TARP funds for this. Now it is funded by a bank tax IOW passed on to us in fees, shxt! Good Gawd Almighty what don’t they understand about no money left in the till..

WSJ:

Unemployed homeowners will be able to tap $1 billion in federal bridge loans to pay their mortgages, under a deal worked out by congressional negotiators in financial-overhaul legislation.Under the program, people who cannot make their mortgage payments because they are ill or out of work would get a stopgap loan from the government.

House members fought for $3 billion in such loans, but ultimately settled for $1 billion as negotiations ground on into Friday morning. Both chambers of Congress must now approve the deal worked out by the negotiators.

Joblessness has eclipsed risky mortgages as the biggest driver of U.S. foreclosures. Meanwhile, the rules of the Obama administration’s foreclosure-prevention effort make it difficult for the unemployed to get loan modifications under the program….

June 25, 2010. Tags: , , , , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Taxes, Unemployment Statistics, Wall St. 2 comments.

HOUSING UPDATE – Financial Services Cmte asking for your experiences with JPMorgan Chase ahead of hearing tomorrow…

Update: There is another hearing tomorrow, see today’s hearing here:

April 13th from prepared testimony reads more like a PR show by the banks.
April 14th will be the regulators the National Law Center and those pro HAMP vs The Bankers Assoc and others

Both will be broadcast live

More info:
Barriers to Principal Reduction
April 13: House Financial Services Committee

The Recently Announced Revisions to HAMP
April 14: House Financial Services Committee

RE: Congressional Hearing in Washington DC, Tuesday 4/13/10, 10am with the Financial Committee.

MiM has been covering the many moods of the HAMP program since its inception.

Okay peeps, if you have a HAMP experience you would like to relate to the House Fin Svcs Cmte ahead of the hearing tomorrow on HAMP and servicers please contact as follows with your experience:

From loansafe.org Chase HAMP thread:

Just had a phone call from Brendan Woodbury – who is also handling tomorrow’s House Financial Services Committee hearing

He said for me to asap FAX over all I have – I asked him if it would be ok to have others do the same – he said by all means.

brendan.woodbury@mail.house.gov

FAX ASAP what you have gone through to
Congressman Barney Frank
MARK URGENT – PERTAINS TO FINANCIAL MEETING 4/13/10
FAX to (202) 225-0182

The head of mortgage lending for JP Morgan Chase David Lowman entered testimony suggesting a Quick turn around and assistance for any homeowner trying to stay in their home.

More info here including David Lowman’s prepared testimony (click on the link to his name).
House Financial Services Committee

Any HAMP applicant, after either introducing you to their friend..RALPH!,  or laughing deliriously in response, will happily hand over evidence of, in most cases, 15+ months of fruitless attempts to work with the servicers on HAMP.

HAMP is all voluntary. HAMP to date, is extend and pretend to keep homes off the market until the deluded banks think prices will come back. Forecasts suggest 15 YEARS before prices are back in sand states.

Today the big servicers are opposing the principal writedown approach Treasury is finally coming around to.

In written testimony prepared for a hearing in Washington Tuesday of the House Financial Services Committee, some of the nation’s top mortgage lenders warned of the risks of relying heavily on forgiving principal as a means of averting foreclosures and argued for concentrating mainly on other methods, such as reducing interest rates….

These banks forget TARP, its entire purpose as written was to buy bad home loans and relieve the foreclosure crisis that led to the financial collapse. Instead they got a free ride, FED continues to give them free money, they have rates so low savers are punished, they continue to devalue our dollar so we have less purchasing power, and they won’t fix the damn housing issue which is back with a vengeance.

If they will not work out the loans to resolve the issue, then the House needs to go ahead and do the cram down bill instead, which we have been opposed to until now. The banks need to share the economic pain they brought upon us all.

If we had LET THEM FAIL, they would’ve done write downs themselves to keep afloat. Our interference with TARP let them avoid the principal writedowns to begin with.

One more time – FAN FRED FHA back all these loans anyway, the TAXPAYERS are ALREADY on the hook. Not working through mods quickly with writedowns means walkaways continue apace. They are accelerating and the recent FAN home attitudes survey showed fully 15% of those surveyed agreed it was ok to walk away if facing financial difficulty making payments.

…When asked if financial distress makes stopping payments on an underwater mortgage acceptable, 15 percent of respondents said yes in Fannie Mae’s National Housing Survey, a remarkable level of public acceptance for homeowners who walk away from their mortgages in light of the growing number of defaults in Fannie Mae’s portfolio.

Both delinquent mortgage borrowers and those current on their mortgage payments are more than twice as likely to have seriously considered stopping their payments if they know someone who has already defaulted, according to the survey released today.

Underwater borrowers were more than twice as likely to be behind on their mortgage payments and were more than twice as likely to believe stopping payments was acceptable than borrowers who were not underwater. Only 33 percent of respondents cited their moral qualms as a factor motivating them to pay their mortgage…

Even conservatives are FINALLY accepting HOLC (HomeOwnersLoanCorporation like in Depression)- CATO INSTITUTE!

…The omission of recourse has been a major flaw of the Obama loan modification plans. If the taxpayer is putting something on the table, then borrowers should be expected to do the same. During the Great Depression, FDR recognized as much.

The primary New Deal vehicle for addressing foreclosures was the Home Owners Loan Corporation. The HOLC required recourse and practiced it. In fact, approximately a third of HOLC revenues were from deficiency judgments against delinquent borrowers, including wage garnishment. Perhaps there are some parallels to today, as the HOLC found the second most common reason for foreclosure to be “obstinate refusal to pay.”

FDR recognized that many delinquent borrowers could afford neither their mortgage nor a deficiency judgment; we must recognize the same today. Recourse is not a cure to stop every foreclosure. It is, however, a proven method for reducing some foreclosures…

and now admit it would have been better in 08. Gee who said that? Hillary that’s wh0.

…First, we must address the skyrocketing rates of mortgage defaults and foreclosures that have buffeted the economy and ignited the credit crisis. Two million homeowners carry mortgages worth more than their homes. They hold $3 trillion in mortgage debt. Nearly three million adjustable-rate mortgages are scheduled for a rate increase in the next two years. Another wave of foreclosures looms.I’ve proposed a new Home Owners’ Loan Corporation (HOLC), to launch a national effort to help homeowners refinance their mortgages. The original HOLC, launched in 1933, bought mortgages from failed banks and modified the terms so families could make affordable payments while keeping their homes. The original HOLC returned a profit to the Treasury and saved one million homes. We can save roughly three times that many today. We should also put in place a temporary moratorium on foreclosures and freeze rate hikes in adjustable-rate mortgages. We’ve got to stem the tide of failing mortgages and give the markets time to recover.

(more…)

April 12, 2010. Tags: , , , , , , , , , , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Hillary Clinton, Obama Administration, Politics, TARP, Taxes, Unemployment Statistics, Wall St. Comments off.

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