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: 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.

CNBC: Treasury Mortgage Modification Plan Update

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November 30, 2009. Tags: , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Unemployment Statistics, Wall St. Comments off.

Housing Update 2: ‘Shadow Inventory Dwarfs Loan Mods’; Treasury releases Making Home Affordable status report & NAR figures show median home prices dropped 11.2% y/y

Update: A-HA!! I knew it!! J’accuse Treasury!!!!! Wonder if they are having Fannie/ Freddie HOLD out on those pre-sale foreclosures to avoid asking for ANOTHER 50B right now, dammit! Who knows when the housing market will stabilize? The shadow inventory knows Muuhuuuhaaaaa. Diana Olick has it:

(…) But even more distressing was a report I received today from Lender Processing Services, which is a huge mortgage data aggregate.

Foreclosure inventories continued their upward climb. The nation’s September 2009 foreclosure rate stood at 3.12 percent – a month-over-month increase of 2.6 percent and a year-over-year increase of 88.9 percent. Among individual states, Florida posted the most troubling results with 10.4 percent of loans in foreclosure, and more than 22 percent of loans reported as non-current.

LPS’ October Mortgage Monitor also cites large “shadow” foreclosure and REO inventories. The number of loans deteriorating further into delinquent status is now more than twice the number of foreclosure starts, indicating another major wave of troubled loans in an already clogged loan pipeline. Nearly one-third of foreclosures remain in pre-sale status after 12 months – twice as many as the year prior. The six-month average deterioration ratio has risen the past two months to 300 percent, showing that for every loan that improves in status, three more deteriorate further…

LARGE grain of salt on these HAMP numbers.  PDF from Treasury of the November ‘Servicer Performance Report’ for Making Home Affordable here.

Continues after the break:

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November 10, 2009. Tags: , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Glam Metal, Hair Bands, Horror, Obama Administration, Politics, Unemployment Statistics, Wall St. 11 comments.

Housing Update: Treasury report on Homeowner Mods from Diana Olick

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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:

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

Housing Update: Median Home Price drops 16.8% y/y….MBA makes 700B downward revision to ’09 originations forecast…

Ouch: National Median Home Price at $173,000 for May, a drop of 16.8% year over year….May existing home sales up 2.4%, same as April….much lower than needed for this inventory, especially since roughly 45% of the sales are foreclosure sales to investors….dollar is extending its losses and markets are down, DOW off 40 now to 8298….10 yr yield 3.63%….Gold 918….Oil down to 67…

So taking a closer look at the incredible revisions by MBA yesterday, it appears as though the Making Home Affordable Program has been a failure to date. Not the EPIC FAIL of Hank Paulson’s original plan, but a FAIL nonetheless….

MBA dropped the hammer on the outlook yesterday:

…The Mortgage Bankers Association cut its forecast of home-mortgage lending this year by 27% amid deflating hopes for a boom in refinancing. The trade group said Monday that it now expects $2.034 trillion of originations of mortgages for one- to four-family homes in 2009, down from a forecast of $2.780 trillion in March, when falling interest rates spurred expectations for huge volumes of refinancing….

Here are the numbers, of the millions of homeowners facing foreclosure, a grand total of 13,000 loans have been modified/refi’d. Yep.

WSJ:

…Meanwhile, the MBA said, the volume of refinancing under the Obama administration’s Home Affordable Refinance Program so far has been “very low.” This program is designed to help borrowers whose loans are backed by government-owned investors Fannie Mae and Freddie Mac, the biggest providers of funding for U.S. mortgages.

“While the number of loans completed under this program is likely to increase, it is difficult to craft a scenario under which origination volumes would come anywhere close to reaching the numbers originally envisioned for the program, particularly under our higher rate environment,” the trade group said.

So how low is it? Let’s check in on the housing beat with Diana Olick of CNBC who has the real scoop:

…Today the Mortgage Bankers Association put out a revision in its 2009 originations forecast. A big revision. A $700 billion revision. “$84 billion of the drop is due to lower purchase originations and the rest is due to lower rate/term refinances and very low volumes in the Fannie Mae and Freddie Mac Home Affordable Refinance Program (HARP).”

…The MBA had raised its forecast by over $800 billion in March following the drop in interest rates associated with the Fed’s announcement on the Treasury bond and mortgage-backed securities purchases programs as well as the implementation of the HARP….

……The refi’s dropped off for two reasons, one being the interest rate rise, and the second being the poor results on the HARP….While generally accepted estimates were that around 1.5 to 2 million borrowers might avail themselves of this program, with many more potentially eligible, to date only about 13,000 loans have been completed, notes the MBA’s chief economist, Jay Brinkmann.

Did anyone else catch Larry Kudlow get curt and rather harsh with Diana on The Call last week? Diana makes it clear in this blog report her position and reporting on the housing market is based on the facts, not the ‘Goldilocks wannabe green shoots’ scenario we all know Larry wants to find…..the harsh  reality of our housing market, and it is pretty damned harsh here in AZ lemme tell ya:

A lot of folks out there contend that I am overly bearish on the beat I cover. Some go so far as to call me “miserable,” while others claim I choose to see the glass half empty. I am and do neither. I’m not a bear; I’m a realist. It’s your right to have an opinion, but it’s not my job. My job is to gather for you and funnel to you the facts: The numbers, the trends, the industry forecasts and the experts’ analyses. I have no agenda and frankly gain nothing from being either a bull or a bear. If anything, I’d be better off personally as a housing bull. CNBC doesn’t allow me to own stock, but I can own a house, and I do. If you think housing has bottomed, that’s your opinion, but that’s just what it is: Opinion.

June 23, 2009. Tags: , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Music. Comments off.

Obama’s Housing Plan – CNBC.com

Diana Olick reports hilights

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March 4, 2009. Tags: , , , , , , . Economy, FDIC, Foreclosures, Housing, Obama Administration, Politics, Uncategorized. Comments off.

Video Update: New Home Sales Figures Released….

Video Update: CNBC Diana Olick on Deeds in Lieu of Foreclosure increases (jingle mail) and David Faber earlier this month on pending ‘wave’ of foreclosures:

both clips courtesy of RealDealNews:

CNBC’s Diana Olick, Susan Wachter of Wharton Business School, Carl Horowitz of the National Legal and Policy Center and CNBC’s Tyler Mathisen last week discussed the fact that banks and homeowners are increasingly choosing not to go through the foreclosure process. Instead, homeowners are voluntarily giving their homes to the bank. Horowitz said that allowing homeowners to avoid the foreclosure process implies that there are no negative consequences to not paying a mortgage. Wachter said mortgage servicers receive incentives for allowing some mortgages to fall into foreclosure

On CNBC this week, housing analyst Ivy Zelman, CEO of Zelman and Associates, said there is a “tsunami of foreclosures and short sales still to come” over the next several years because of Alt-A and Option ARM loans. Zelman said that the housing market in 2009 will be worse than 2008 because of an oversupply of distressed inventory with home values dropping between 20 and 30 percent

And the beat beating in housing goes on….AWFUL NUMBERS!

CNBC Diana Olick reporting…read her excellent blog here on the housing beat…

New Home Sales PLUNGED 14.7% in December compared to a drop of 4.4% in November…a record low

Inventory-14.7 12.9 months supply, up from 12 months supply in November..

December Median New Home Sale Price $206,500 DOWN 9.3% FROM $227,000 A YEAR EARLIER!!!!! see the drop-off is escalating …WE NEED HOLC!!

Diana sums up PRICES GOING DOWN, INVENTORY GOING UP..why can’t they sell the homes, she asks..FORECLOSURES she says, WORD DIANA WORD!

PS new jobless claims came out and we are now averaging a loss of over a half million jobs a week..but don’t worry Congress is going to RAISE OUR UTILITY PRICES to help us, maroons!

housinginyourhands

January 29, 2009. Tags: , , , , , , , , , , . Hillary Clinton, Housing, Labor Department, Obama Administration, Politics, TARP, Unemployment Statistics, Wall St. 2 comments.

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