Fxcktards On Parade: Fannie & Freddie Announce Mortgage Debt forgiveness for ‘certain’ borrowers 8 years after it would have helped the economy…

housinginyourhands

8 years late and an entire fxckin’ TARP trillion short boys. This will just pxss people off.

FHFA announces Principal Reduction Modification program. Details:

The Federal Housing Finance Agency (FHFA) today announced that Fannie Mae and Freddie Mac will offer principal reduction to certain seriously delinquent, underwater borrowers who are still struggling in the aftermath of the financial crisis to help them avoid foreclosure and stay in their homes.  The new Principal Reduction Modification program is a one-time offering for borrowers whose loans are owned or guaranteed by Fannie Mae or Freddie Mac and who meet specific eligibility criteria…

FHFA.gov Fact Sheet

• Are owner-occupants.

• Are at least 90 days delinquent as of March 1, 2016.

• Have an unpaid principal balance of $250,000 or less.

• Have a mark-to-market loan-to-value ratio of more than 115% after capitalization.

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April 14, 2016. Tags: , , , , , , , , , , , , , , , . CITI, citigroup, Economy, FDIC, Finance, Foreclosures, GOP, Housing, Immigration, Labor Department, migrant crisis, Obama Administration, Politics, Popular Culture, TARP, Taxes, Trump, Uncategorized, Unemployment Statistics, Wall St. 1 comment.

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.

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April 12, 2010. Tags: , , , , , , , , , , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Hillary Clinton, Obama Administration, Politics, 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.

50 Ways to Leave Your Lender

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February 1, 2010. Tags: , , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, Popular Culture, TARP, Taxes, Unemployment Statistics, Wall St. Comments off.

More nothing on Housing: Treasury to announce minimal changes to Making Home Affordable program today, Bank of America signs on to second lien HAMP program…

Nothing on housing in SOTU despite the fact that we are about to fall off a cliff and bring the entire economy down in a double dip with collapsing prices (Obama did note the drop in home values but no plan for FAN FRED the biggest hit to taxpayers past, present and future..) Our previous posts on HAMP, FAN FRED, rising defaults and the 2MP Second Lien program here.

Sounds like ‘The Plan’ from the Administration is to waive documentation and force the initial group of trial mods to permanent status. Style over substance, again. How that helps address the imminent walkaways on 4 million more foreclosures no one can say….

ABC:

The Treasury Department on Thursday plans to unveil changes designed to streamline burdensome paperwork required for its foreclosure relief plan, according to people briefed on the matter.

The tweaks to the problem-plagued program could help more borrowers complete loan modifications. But they are unlikely to placate critics who have been calling for far more dramatic changes.

Lenders will now be required to collect two pay stubs at the start of the process, and borrowers will have to give the Internal Revenue Service permission to provide their most recent tax returns at the same time, according to the people who declined to be identified because the details were not yet final….

OMG!! They are DENSE!! People who haven’t sent in the tax return release form yet likely have lied on their income!!! What are they wasting time on this crxp for when the problem has grown so enormous on shadow inventory and ARMS about to reset just as FED pulls out of QE?!

Here is one good thing, having receipt of HAMP applications ACKNOWLEDGED. Gee what a novel idea? Gawd this entire thing has been an exercise in delaying inventory build and nothing more…

…Participating mortgage companies must acknowledge they received a borrower’s application within 10 days and approve or deny the application within 30 days. After that, borrowers will still be required to make three months of trial payments before the modification becomes permanent.

What about addressing the rising UE and the roll over effect on foreclosures? STILL NOTHING TO ANNOUNCE. STILL.

..…Treasury officials are also working on a plan to give unemployed borrowers a break on payments — possibly for six months — but those details were not expected Thursday. A Treasury spokeswoman declined to comment.

With foreclosures at record-high levels, the Obama administration’s program to attack the crisis has been a disappointment. Only about 66,500 borrowers, or 7 percent of those who signed up, had completed the program as of December…

…The $75 billion program has been such a dud that some housing advocates say the Obama administration needs to rethink its entire approach.

There is some movement on a long awaited angle, the Second Lien program (2MP) finally got someone to sign up! Bank of America on board.

BusinessWeek:

Bank of America Corp., the largest U.S. bank, agreed to modify some home-equity loans through the government’s Home Affordable Modification Program amid criticism from bond investors and consumer groups over the federal effort to limit foreclosures.Bank of America, which handles 14 million home loans including 3 million second-lien mortgages, is the first mortgage servicer to sign a contract committing it to the program, the Charlotte, North Carolina-based company said today in a statement. Chief Executive Officer Brian Moynihan made a “verbal commitment” to the program during a meeting with Treasury Secretary Timothy F. Geithner earlier this month, the bank said.

“For many homeowners facing severe financial difficulty, decreasing the payment on the first mortgage without a reduction in the payment on the second lien may not produce an affordable combined mortgage payment,” Barbara Desoer, president of Bank of America Home Loans, said in the statement…

And they continue to play head games with homeowners on whether or not they wll address the collapse in equity which is causing a negative feedback loop of walkaways. The damage is done, trying to prevent moral hazard of walkaways now is closing the door after the horses, cows, mice everyone has left the barn.

First they say, no plans for principal reduction, then 7 days later tell BusinessWeek there are plans for principal reduction:

Despite increasing pressure to take more aggressive steps to keep troubled borrowers in their homes, the Obama administration said Wednesday that it had no immediate plans to alter its foreclosure-prevention program by increasing its reliance on reducing loan balances.

The administration’s statement came as attorneys general and banking regulators in 14 states warned that policy makers needed to do more to stem the tide of foreclosures.

The Obama program, announced in February as a cornerstone of the administration’s efforts to stabilize the housing market, has been running into increasing criticism as delinquencies have mounted. The program has focused on reducing loan payments to affordable levels through interest-rate reductions and other changes in loan terms. But state officials and others say it needs to address falling home prices through principal reductions because many homes are now worth less than their mortgages.

“The failure to reduce principal jeopardizes the sustainability of loan modifications,” Mark Pearce, North Carolina’s deputy banking commissioner, said at a briefing for reporters….

Then 7 days later they are ‘working on it’, but still nothing but a bunch of noises on the walk aways:

The Obama administration’s $300 billion Hope for Homeowners program may be retooled to help the growing number of Americans who owe more than their properties are worth as current anti-foreclosure efforts fail to account for these “underwater” borrowers.The changes would be at least the third lease on life for the program, which began in October 2008 during the Bush administration and has so far helped just 96 of the 400,000 homeowners originally targeted.

The U.S. Federal Housing Administration is considering ways to make the program more effective, Commissioner David Stevens said in an interview. While he wasn’t specific about any changes, he said Hope for Homeowners could be expanded to more directly help borrowers with negative equity….

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January 28, 2010. Tags: , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Unemployment Statistics, Wall St. 1 comment.

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