Dump is really the right word. Fannie Mae and Freddie Mac, says a White House fact sheet, “would be directed to use mark-to-market accounting or other alternatives to manual appraisals for any loans for which the loan-to-value cannot be determined with the GSE’s Automated Valuation Model. This will eliminate a significant barrier that will reduce cost and time for borrowers and lenders alike.”

This sounds great except that the goal of an appraisal is to protect not only borrowers and lenders, it’s also to protect mortgage investors such as pension funds and insurance companies — entities we want to attract or face far-higher interest rates.

The Need For Appraisals

It’s true that appraisals are a cost, but so are food, shoes and tires. The important point is not that appraisal are an expense, it’s that appraisals made by actual humans have value.

For some time there has been an effort to eliminate appraisers from the mortgage process with seers, soothsayers and automated processing. The pretext is that independent appraisals cost money and the computerized systems are pretty good.

Pretty good is an okay standard when you own thousands of loans, but residential borrowers typically have only one or two mortgages. To them, having a property accurately appraised is hugely important so they do not overpay whether they use conventional, FHA or VA financing. Indeed, most real estate sale agreements provide that the deal is off without penalty if the appraisal comes in below the sale price — speak with a buyer broker or attorney for specifics.

But not only home buyers are protected, with a good appraisal the lender does not lend more than it should (thus protecting shareholders) and a mortgage investor does not have excess risk (thus protecting pensions and insurance funds).

If you’re a buyer and make an offer on a property it will not get financed unless the appraiser says the home is worth at least the sale price. Without independent assurance from an appraiser — someone who is paid regardless of the valuation — no lender will provide the mortgage financing necessary to create the sale.

But it’s not just the buyer and the “lender” who are protected, if by “lender” we mean the folks who originate the loan.

Today after most loans are originated they are sold into the secondary market. Packagers gather up 5,000 or 10,000 loans and create a mortgage-backed security or MBS. Investors then purchase a portion of the MBS called a tranche.

One of the most basic protections for buyers, lenders and mortgage investors is an independent valuation of the property. The fact that a buyer and seller have agreed on a price does not mean they have accepted a price that will protect the investor if home values decline or the borrower defaults.

So, yes, let’s move ahead with new and better housing programs to reduce foreclosures and clean-up a system damaged by too many short-cuts. But while we’re at it, let’s not end a basic protection that makes the market safer for buyers, investors and mortgage insurers.

Why Obama Should Favor Mortgage Appraisals is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: appraisal, appraise, appraiser, consumer, conventional, credit ratings, enhancement, FHA, Foreclosures, insurance, loan, mbs, mortgage, mortgage backed security, mortgage investor, ratings, risk, VA

Actually, both claims are correct but the bigger issue is whether refinancing is actually worthwhile.

According to the letter my mortgage rate would drop from 4.63 percent to 4.46 percent if I refinance. That’s right, based on the APR or annual percentage rate, my rate would fall .17 percent. Not a partial .17 percent, not a fraction of .17 percent, but a full .17 percent. That’s about 1/6th of 1 percent.

But wait, there’s more.

And, yes, monthly costs would fall. For instance with a fixed-rate, 30-year $200,000 mortgage the monthly expense for principal and interest would go from $1,028.88 to $1,008.62. That’s a savings right there of $20.26 per month or $243.12 annually.

So the lender’s letter is literally true: I would have a lower interest rate and save almost $250 a year in this example.

Mortgage Rates

Despite the accuracy of the lender’s claims — which are subject to change along with the interest rate according to the letter — the offer is unacceptable to me. Here’s why.

How much would I have to spend at closing to save $250 a year? If closing costs $3,000 for transfer taxes, legal fees, title insurance and other expenses than it would take 12 years of mortgage “savings” to get back my money.

And why are mortgage rates at anywhere near 4.46 percent attractive in today’s world? The latest figures from Freddie Mac show that a typical 30-year mortgage is priced at 3.98 percent — that’s almost a half point lower than the offered rate.

Nope, I won’t be taking the lender’s offer.

But here’s the question: Why didn’t the lender simply repeat it’s last refinancing offer — an offer I took. In that case the rate went down almost a point, I saved about $200 a month and the lender paid all closing costs except prepaid taxes and insurance.

The lender and I both benefited. I got the lower monthly payment and the lender got a crisp, new loan to re-sell at a profit in the secondary market.

In other words, everybody won.

Mortgage Prepayments

The new refi offer doesn’t work because it’s one-sided — assuming the lender actually provides the terms mentioned in the letter (remember, they’re subject to change).

If I’m going to spend more money on a loan, I certainly would not pay $3,000 in closing costs to save $250 a year. Instead, I might simply increase the monthly payment by $25. While a $200,000 loan at 4.63 percent costs $1,028.88 per month, I might instead pay $1,053.88.

That would reduce the total interest bill over the loan term by nearly $10,000 — from $170,396.80 to $160,502.20 – and shorten the mortgage term by 18 months. This approach works regardless of whether the loan is an FHA, VA, or conventional fixed-rate loan. The concept also works for fixed-rate jumbo mortgages as well.

As to the lender — hey, write me again. Let’s redo the last deal at today’s rates. You know where I live.

Caution: Refinancing with Low Mortgage Rates May Not Work is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: annual percentage rate, APR, conventional, FHA, fixed rate, interest, jumbo, loan, low, mortgage, mortgage rates, prepay, prepayments, rate, refi, refinancing, savings, VA

For the third quarter of 2011 RealtyTrac reports that 20 percent of all existing home sales were bank owned or being foreclosed. This is down from 30 percent of all sales in the third quarter of 2010.

The latest RealtyTrac figures might be seen as good news were it not for the glum reality which makes such numbers correct: There are fewer foreclosures in large measure because lender paperwork is not accepted at face value in many courts as a result of robo-signing. Yes, courts will accept lender foreclosure claims, but in many cases only with additional assurances and reviews that delay the process — and protect homeowners from flawed foreclosure claims.

“While foreclosures continue to represent an excellent bargain-buying opportunity for many buyers and investors, foreclosure sales accounted for a smaller share of the total market in the third quarter. That trend is not too surprising given the continued ambiguity surrounding proper foreclosure procedures — and the ripple effect that has on sales of foreclosed properties that might have been improperly foreclosed,” said Brandon Moore, chief executive officer of RealtyTrac. “The sooner the market gets more clarity about accepted foreclosure procedures, primarily through the long-promised settlement between multiple states attorneys general and major lenders, the sooner the market can more efficiently dispose of these distressed properties.

“Even with the hurdles to selling foreclosures, foreclosure sales continue to represent a historically high percentage of all sales,” Moore continued. “In 2005 and 2006, foreclosure sales consistently accounted for less than 5 percent of all sales nationwide.”

Pricing

Buyers, says RealtyTrac, purchased 221,536 residential properties during the third quarter that were in some stage of foreclosure (NOD, LIS, NTS, NFS) or bank-ownship (REO) during the third quarter.

The average sales price of homes in foreclosure or bank owned was $165,322 in the third quarter, according to the company.

The average sales price of these foreclosure-related sales was 34 percent below the average sales price of homes not in foreclosure, matching the 34 percent foreclosure discount in the second quarter but below the 37 percent discount in the third quarter of 2010.

RealtyTrac also provides the following information:

Pre-foreclosure sales flat from year ago, REO sales down

A total of 92,824 pre-foreclosure homes — in default or scheduled for auction — sold to third parties in the third quarter, a decrease of 9 percent from the previous quarter and nearly identical to the 92,967 pre-foreclosure sales in the third quarter of 2010. Pre-foreclosure sales accounted for nearly 9 percent of all sales, the same as in the second quarter, but down from 12 percent of all sales in the third quarter of 2010.

Pre-foreclosure sales increased more than 30 percent on an annual basis in Michigan (up 68 percent), North Carolina (up 44 percent), Ohio (up 43 percent) and Georgia (up 35 percent). Pre-foreclosure sales outnumbered REO sales in several states in the third quarter, including Colorado, Florida, New Jersey and New York.

Pre-foreclosures, which are often sold via short sale, had an average sales price nationwide of $191,119, a discount of 24 percent below the average sales price of homes not in foreclosure. That was up from the 23 percent discount in the previous quarter and matched the 24 percent discount in the third quarter of 2010. Pre-foreclosures that sold in the third quarter took an average of 318 days to sell after receiving an initial foreclosure notice, up from an average of 245 days in the second quarter and average of 236 days in the third quarter of 2010.

A total of 128,712 bank-owned (REO) homes sold to third parties in the third quarter, down 13 percent from the second quarter and down nearly 8 percent from the third quarter of 2010. REO sales accounted for nearly 12 percent of all sales in the third quarter, down from 13 percent of all sales in the previous quarter and down from nearly 18 percent of all sales in the third quarter of 2010.

Nationally, REOs had an average sales price of $146,437 in the third quarter, a discount of nearly 42 percent below the average sales price of homes not in foreclosure. That matched a 42 percent discount on REOs in the second quarter, but was down from a 45 percent discount in the third quarter of 2010. REOs that sold in the third quarter took an average of 193 days to sell after being foreclosed on, up from 178 days in the second quarter and 161 days in the third quarter of 2010.

Nevada, California and Arizona post highest percentage of foreclosure sales

Foreclosure-related sales accounted for nearly 57 percent of all residential sales in Nevada during the third quarter, the highest percentage of any state. Third parties purchased a total of 13,992 homes in foreclosure or bank owned in Nevada during the third quarter, nearly identical to the 13,858 foreclosure-related sales in the previous quarter, but up 24 percent from the third quarter of 2010.

Third parties purchased a total of 62,583 homes in foreclosure or bank owned in California, representing nearly 44 percent of the state’s total residential property sales in the third quarter — the second highest percentage of any state. Foreclosure-related sales in California decreased nearly 7 percent from the previous quarter but were up 7 percent from the third quarter of 2010.

Arizona foreclosure-related sales accounted for 43 percent of all sales in the state, the third highest percentage of any state. Third parties purchased a total of 21,619 homes in foreclosure or bank owned in Arizona during the quarter, down nearly 14 percent from the previous quarter, but up 19 percent from the third quarter of 2010.

Other states where foreclosure-related sales accounted for at least 20 percent of all sales included Georgia (34 percent), Colorado (26 percent) and Michigan (23 percent).

Due to a nearly 30 percent decrease from the previous year, Florida foreclosure-related sales in the third quarter accounted for 19 percent of all sales in the state — down from 39 percent of all sales in the third quarter of 2010.

Metros with biggest foreclosure discounts

Among metropolitan statistical areas with at least 100 foreclosure-related sales during the third quarter, the Trenton-Ewing, N.J., metro area posted the biggest foreclosure discount. The average price of a foreclosure-related sale in the metro area was $108,302, nearly 68 percent below the average sales price of homes not in foreclosure. Foreclosure-related sales accounted for 8 percent of all sales in the Trenton-Ewing metro area during the third quarter.

Foreclosure-related sales accounted for nearly 13 percent of all sales in the St. Louis metro area during the third quarter and sold at an average price of $80,545, nearly 55 percent below the average price of non-foreclosure sales in the metro area — the second highest foreclosure discount among metro areas with at least 100 foreclosure-related sales.

The Milwaukee metro area documented the third highest foreclosure discount, with an average foreclosure-related sales price of $93,250 — nearly 53 percent below the average sales price of non-foreclosure properties. Foreclosure-related sales accounted for 17 percent of all sales in the Milwaukee metro area in the third quarter.

Other metro areas with a foreclosure discount of at least 50 percent were Springfield, Mass. (52 percent),Saginaw, Mich. (52 percent), New Haven-Milford, Conn. (51 percent), Memphis (51 percent), San Francisco (51 percent), Toledo, Ohio (50 percent), Bridgeport-Stamford-Norwalk, Conn. (50 percent), and Atlanta (50 percent).

Glossary of Terms

Foreclosure (FC) sale: a sale of a property that occurs while the property is actively in some stage of foreclosure (NOD, LIS, NTS, NFS or REO). This includes only sales to third-party buyers or investors not involved in the foreclosure process. It does not include property transfers from the owner in default to the foreclosing bank or lender.

REO sale: a sale of a property that occurs while the property is actively bank owned (REO).

Pre-foreclosure sale: a sale of a property that occurs while the property is actively in default (NOD, LIS) or scheduled for foreclosure auction (NTS, NFS).

Pct. of all sales: total number of Foreclosure Sales (or Pre-Foreclosure Sales or REO Sales) as a percentage of all residential sales during the quarter or year.

Avg. FC sales price: the average sales price of Foreclosure Sales (or Pre-Foreclosure Sales or REO Sales) during the quarter or year, excluding sales with no sales price.

Avg. FC discount: the percentage difference between the average sales price of foreclosure sales and the average sales price of non-foreclosure sales during the quarter or year.

Avg. REO discount: the percentage difference between the average sales price of REO sales and the average sales price of non-foreclosure sales during the quarter or year.

Avg. pre-foreclosure discount: the percentage difference between the average sales price of pre-foreclosure sales and the average sales price of non-foreclosure sales during the quarter or year.

1 in 5 Home Sales Distressed, Foreclosed or Bank Owned, Says RealtyTrac is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: 2005, 2006, 2010, 2011, 2012, annual, Arizona, bank repossessions, California, Colorado, default notices, errors, filings, Florida, foreclose, foreclosure, Georgia, Michigan, national, Nevada, paperwork, Phoenix, RealtyTrac, Reno, robo-signing, scheduled auctions

The Massachusetts official is turning over nearly 32,000 documents to state prosecutors on the grounds that they may be improper. As a result O’Brien says criminal investigations should be started.

If 32,000 documents are questionable in just one recorder’s office, then what is the total nationwide?

In considering this matter, let’s recognize that a sworn foreclosure affidavit is used by judges and courts to throw people out of their homes for not paying FHA, VA or conventional mortgages.

If the affidavit is wrong — or fraudulent — it means an innocent family can unfairly be made homeless by order of the court. This is a big deal, certainly as big as shoplifting or stealing a cow, crimes we seem to prosecute with great zeal.

The O’Brien release is below:

Saying that the time has come for a full scale criminal investigation, Southern Essex District Register of Deeds John O’Brien, today has sent some 31,897 of what he says are fraudulent documents that have been recorded in the Salem Registry to Massachusetts Attorney General Martha Coakley, U.S. Attorney General Eric Holder and U.S. Attorney Carmen Ortiz.

O’Brien said that he is asking these officials to impanel a Grand Jury to look into the evidence that he has presented.

“I am confident that these documents will show a pattern of fraud, uttering and forgery. These documents are signed by known robo or surrogate signers, whose signatures were supposedly witnessed by notary publics. In addition, these documents may contain fraudulent information in the body of the documents. I believe that a criminal investigation is the next step to hold the perpetrators responsible.”

O’Brien praised Attorney General Coakley for her aggressive pursuit of wrongdoing in her civil action but noted that other states such as California, Nevada, Illinois and Michigan have launched criminal investigations, and O’Brien is hopeful that Massachusetts will do the same.

O’Brien strongly suggests that the Grand Jury should subpoena both the past and present Chief Executive Officers (CEOs) of the Mortgage Electronic Recording Systems, Inc. (“MERS”), Bank of America, JP Morgan Chase, Citibank, Wells Fargo, Countrywide, Washington Mutual among others. In addition, he is asking that the top officials of DOCX, Nationwide Title Clearing, Inc. and LPS also be subpoenaed.

“These companies have been retained by MERS and its member-banks to produce the documents that I am alleging contain fraudulent information. It is one thing to go after these institutions with a civil action, but the only way to let them know that you are serious is to call them before a Grand Jury.” O’Brien said,

“There is no question in my mind that the officers of these banks and loan processing servicers made a conscious decision to commit fraud and participate in a scheme to deprive the public from knowing the true holder of their mortgage while at the same time avoiding paying billions of dollars in recording fees. It is my opinion that they acted as a criminal enterprise, crossing state lines to commit their crimes and in most cases using the U.S. Postal Service to send these documents to registries of deeds, thereby committing mail fraud. We need to know what they knew and when they knew it. Until the CEOs who allowed these fraudulent activities to happen under their watch are sent to jail for what they did, these types of illegal behaviors will continue.”

Just last week, O’Brien’s Registry received 3 documents from Bank of America, all signed by a known robosigner, Linda Burton.

O’Brien said, “If they are sending them to me, of all people, it is safe to assume that they are sending them to registries across the country.”

O’Brien refuses to record any documents signed by a robo-signer on his list unless those documents are accompanied by an affidavit attesting to the signature. So far, he has not received one affidavit.

“That clearly shows me that those documents were in fact fraudulent.” O’Brien said that if he or anyone else went into one of these major banks and forged a signature on a loan document they would be arrested and sent into jail.

So it begs the question, why haven’t these CEO’S been held accountable? O’Brien cited the case of the individual who walked into a Walmart and tried to make a purchase using a fraudulent One Million Dollar bill. He was arrested and charged with attempting to obtain property by false pretence and uttering a forged instrument.

O’Brien said, “As far as I am concerned, this is what these banks have been doing for years. Make no mistake, MERS and its member-banks are taking people’s homes using fraudulent documents and that is something we do not do in America.” In addition, O’Brien is zeroing in on the major foreclosure law firms that he believes have acted as a co-conspirator in flooding the registries of deeds with these fraudulent instruments.

“These attorneys should know better. They have acted as co-conspirators in perpetrating this fraud. I am sending a letter to the Massachusetts Board of Bar Overseers asking that they conduct an independent investigation into the activities of these firms. Unlike our Massachusetts Attorney General Martha Coakley, I understand that there are other Attorneys General and other public officials across the country who would like nothing better than to sweep this matter under the rug and grant these lenders, loan servicing companies and their foreclosure-mill attorneys immunity for the damage that they have caused, not only to our
economy but to people’s property rights. They would be willing to accept pennies on the dollar, a slap on the wrist, and a promise to never do it again.

“If that should happen, it would be the biggest sellout of the American People that I have ever seen. It would send the wrong message that the big boys can get away with anything. As I have been saying all along, they may think they are too big to fail, but as far as I am concerned, they are not to big to go to jail. The top officials at MERS, its member-banks, servicers and foreclosure-mill attorneys must be prosecuted and held accountable for their fraudulent schemes that brought profits to their institutions by cutting corners, circumventing land recordation systems through fraud, uttering and forgery.”

Should Mortgage Robo-Signers Go To Jail? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: bank repossessions, conventional, default notices, errors, FHA, filings, foreclose, foreclosure, fraud, lenders, loan, loan officers, Massachsuetts, mortgage, paperwork, predatory lending, robo-signing, scheduled auctions, VA

“The investigations,” said HUD, “are in response to 22 complaints the National Community Reinvestment Coalition (NCRC) filed with HUD alleging that the loan activities of the mortgage originators showed that their home lending practices deny FHA- insured loans to African Americans and Latinos with credit scores as high as 640. Federal Housing Administration (FHA) guidelines allow mortgages to borrowers with credit scores above 580, provided the borrowers have down payments equaling 3.5 percent of the loan amount, or above 500, provided the borrowers have down payments equaling 10 percent of the loan amount.”

In the usual case lenders can set whatever terms they want to underwrite a loan. However, the FHA loan program is an important exception. Here’s why:

“This decision is arbitrary,” says John Taylor, president & CEO of the National Community Reinvestment Coalition, “because the loans are 100% guaranteed, whether the borrower’s credit score is 580 or 780. That means the loans with lower credit scores don’t pose additional risk to the company, so there’s no legitimate business defense for this across-the-board practice.”

To its credit, at least one lender — Quicken — has said it would stick with FHA credit score standards. Quicken was not among the 22 lenders named by the NCRC in its layering study.

“In an effort to make homeownership possible and more affordable for families across the country, Quicken Loans Inc, the nation’s largest online retail mortgage lender, announced they have eased the minimum credit score necessary to qualify for an FHA loan to 580. This change allows more consumers to qualify for an FHA loan, as previous guidelines required a minimum credit score of 620.”

Quicken also makes a good point regarding credit scores in general.

“There are folks who have steady incomes, and a solid payment history but were temporarily affected by the economy or a life event in some way. These challenges can lower their credit score significantly. We believe that a credit score, on its own, is not the sole arbiter of a person’s credit worthiness,” said Bob Walters, Quicken’s chief economist. “This change will open up credit to a significant group of people and allow them to again have access to purchase or refinance a home.”

Tight Credit Standards

With all the complaining about allegedly-tight loan standards — much of which is nonsense — there is simply no justification for FHA layering. FHA mortgages must conform to standards set by HUD, not artificial and arbitrary standards above and beyond what HUD requires. Lenders who simply follow HUD guidelines can be rewarded with originations, profits and 100-percent loan guarantees.

That’s not a bad deal for lenders, borrowers or the FHA. The evidence? For the third quarter of 2011 the Mortgage Bankers Association reports that the general foreclosure rate was 4.43 percent — but the foreclosure rate for FHA loans was 3.27 percent.

So do FHA mortgage borrowers still face credit score layering? The betting here is no. Expect the results of the HUD investigation in about a month.

Do FHA Mortgage Borrowers Still Face Credit Score Layering? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: FHA, HUD, investigation, layering, lenders, loan, mortgage, Mortgage Bankers Association, National Community Reinvestment Coalition, NCRC

But the new numbers tell only part of the story. What they really demonstrate is that millions of homes remain distressed and that the foreclosure process itself continues to be troubled.

It was late in 2010 that the robo-signing scandal came to light, the practice of signing foreclosure affidavits without actually verifying that the claims were true. The result is that while most foreclosures are justified by non-payment some are not. The judicial system must now figure out how to repair improper foreclosures and — going forward — how to assure that no family is thrown out of their home without cause.

“Foreclosures were in full delay mode in 2011, resulting in a dramatic drop in foreclosure activity for the year,” said Brandon Moore, chief executive officer of RealtyTrac. “The lack of clarity regarding many of the documentation and legal issues plaguing the foreclosure industry means that we are continuing to see a highly dysfunctional foreclosure process that is inefficiently dealing with delinquent mortgages — particularly in states with a judicial foreclosure process.

“There were strong signs in the second half of 2011 that lenders are finally beginning to push through some of the delayed foreclosures in select local markets. We expect that trend to continue this year, boosting foreclosure activity for 2012 higher than it was in 2011, though still below the peak of 2010.”

Annual Results

There are two ways to view the market: properties impacted and foreclosure filings. Each measure has value as an index of marketplace activity.

Realtytrac says in 2011 that 1,887,777 U.S. properties faced foreclosure, a 34 percent decrease when compared with 2010. Foreclosure filings themselves — default notices, scheduled auctions and bank repossessions — fell almost 30 percent.

Going back to 2005, the annual foreclosure filing totals from RealtyTrac look like this:

In the past seven years almost 18 million foreclosure filings have been sent out. However, the actual number of impacted homes is substantially lower because borrowers often receive multiple notices for a single property.

December activity hits 49-month low, scheduled auctions up in fourth quarter

Foreclosure filings were reported on 205,024 U.S. properties in December, a decrease of 9 percent from the previous month and down 20 percent from December 2010. December’s total was the lowest monthly total since November 2007 — a 49-month low.

December Default notices (NOD, LIS) decreased 19 percent from the previous month and were down 23 percent from December 2010; Scheduled foreclosure auctions (NTS, NFS) decreased 12 percent from the previous month and were down 24 percent from December 2010; and bank repossessions (REO) increased 10 percent from the previous month but were still down 12 percent from December 2010.

Foreclosure filings were reported on 586,133 U.S. properties in the fourth quarter, a 4 percent decrease from the previous quarter and down 27 percent from the fourth quarter of 2010. Fourth quarter default notices were down 6 percent from the previous quarter and down 22 percent from the fourth quarter of 2010; scheduled foreclosure auctions increased 4 percent from the previous quarter but were still down 32 percent from the fourth quarter of 2010; and REOs decreased 11 percent from the previous quarter and were down 24 percent from the fourth quarter of 2010.

Nevada, Arizona, California post top state foreclosure rates for year

More than 6 percent of Nevada housing units (one in 16) had at least one foreclosure filing in 2011, giving it the nation’s highest state foreclosure rate for the fifth consecutive year despite a 31 percent decrease in foreclosure activity from 2010. Nevada foreclosure activity dropped 35 percent from the third quarter to the fourth quarter, driven primarily by a 70 percent decrease in default notices — the result of a new law (AB 284) that took effect in October requiring lenders to file an additional affidavit before starting the foreclosure process. The new law also increases the penalties for the use of fraudulent documents in foreclosure.

Despite a 28 percent drop in foreclosure activity from November to December — caused largely by a 41 percent drop in scheduled foreclosure auctions — Arizona registered the nation’s second highest state foreclosure rate for the third year in a row, with 4.14 percent of its housing units (one in 24) with at least one foreclosure filing in 2011.

California also experienced a substantial month-over-month drop in initial foreclosure notices in December — default notices there were down 38 percent from the previous month — but the state still registered the nation’s third highest foreclosure rate for all of 2011. One in every 31 California housing units (3.19 percent) had at least one foreclosure filing during the year, down from 4.08 percent in 2010 and 4.75 percent in 2009.

Georgia posted the nation’s fourth highest state foreclosure rate, with 2.71 percent of housing units (one in 37) with at least one foreclosure filing in 2011, and Utah posted the nation’s fifth highest state foreclosure rate, with 2.32 percent of its housing units (one in 43) with a foreclosure filing during the year.

Other states with 2011 foreclosure rates ranking among the nation’s 10 highest wereMichigan (2.21 percent), Florida (2.06 percent), Illinois (1.95 percent), Colorado (1.78 percent), and Idaho (1.77 percent).

Foreclosure processing timelines continue to increase

U.S. properties foreclosed in the fourth quarter took an average of 348 days to complete the foreclosure process, up from 336 days in the third quarter and up from 305 days in the fourth quarter of 2010. The length of the average foreclosure process has increased 24 percent from 281 days in the third quarter of 2010, when lenders began to re-evaluate foreclosure procedures in earnest as the result of the so-called robo-signing controversy.

The average foreclosure process in New York has increased 37 percent during the same time period, and New York properties foreclosed in the fourth quarter took an average of 1,019 days to complete the foreclosure process — the longest of any state.

New Jersey documented the nation’s second longest average foreclosure process, at 964 days, and Florida documented the nation’s third longest average foreclosure process, at 806 days. Foreclosure activity in both these states dropped more than 60 percent from 2010 to 2011. All three states with the longest foreclosure timelines employ the judicial foreclosure process.

Texas continued to register the shortest average foreclosure process of any state, at 90 days — still an increase from 86 days in the third quarter and from 81 days in the fourth quarter of 2010. Other states with average foreclosure process among the nation’s shortest in the fourth quarter were Delaware (106 days), Kentucky (108 days), Virginia(132 days), and Louisiana (134 days).

Top metro foreclosure rates

With 7.38 percent of its housing units (one in 14) with at least one foreclosure filing in 2011, Las Vegas posted the nation’s top foreclosure rate for the year among metropolitan statistical areas with a population of 200,000 or more.

Ten out of the top 20 metro foreclosure rates in 2011 were in California cities, led by Stockton at No. 2, with 5.43 percent of housing units (one in 18) with at least one foreclosure filing during the year. Other California cities in the top 10 were Modesto at No. 3 (5.29 percent), Vallejo-Fairfield at No. 4 (5.20 percent), Riverside-San Bernardino at No. 5 (5.16 percent), Merced at No. 7 (4.40 percent), Bakersfield at No. 9 (4.31 percent), Sacramento at No. 10 (4.17 percent), Fresno at No. 11 (3.82 percent), Visalia at No. 13 (3.67 percent), and Ventura at No. 16 (3.27 percent).

Other metro areas with foreclosure rates ranking among the top 20 were Phoenix at No. 6 (5.10 percent); Reno, Nev., at No. 8 (4.37 percent); Atlanta at No. 12 (3.69 percent); Prescott, Ariz., at No. 14 (3.50 percent); Cape Coral-Fort Myers, Fla., at No. 15 (3.29 percent); Greeley, Colo., at No. 17 (2.97 percent); Detroit at No. 18 (2.94 percent); Boise, Idaho, at No. 19 (2.85 percent); and Salt Lake City at No. 20 (2.81 percent).

All top 20 metro areas showed a decrease in foreclosure activity from 2010, and all butAtlanta posted a decrease from 2009. Atlanta metro foreclosure activity in 2011 was up 2 percent from 2009.

Foreclosure Filings Off Nearly 30%, RealtyTrac is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, annual, Arizona, bank repossessions, California, Colorado, default notices, errors, filings, Florida, foreclose, foreclosure, Georgia, Michigan, national, Nevada, paperwork, Phoenix, RealtyTrac, Reno, robo-signing, scheduled auctions

This, as the expression goes, should be interesting.

Teutul is likely to be a strong competitor because — whether a fan or not — he’s an actual, real-life entrepreneur, someone who started with nothing and went on to create several working businesses as well as a TV franchise. His American Chopper series on Discovery has been a major cable TV hit and ended the season strongly with a three-way bike build-off between Jesse James, son Paul Jr. and himself. In the end, Paul Sr. and his Orange County Choppers finished a distant third in the motorcycle design contest with the winner being his son and PJD Designs

Teutul has also known his share of adversity, including an impoverished and difficult childhood, as a mortgage borrower who faced the foreclosure of his headquarters building by the lender, and as a father who has been publicly estranged from his sons Dan, Paul, Jr., and Mikey.

As much as his successes, it’s probably his faults and failures which make Teutul interesting — and human.

Each of the contestants vies not only for Trump’s adoration but also for a charity. Teutul will use his winnings to support the Make-A-Wish Foundation, an organization which provides grants to support the wishes of children with life-threatening medical conditions.

Questions

Having Paul Sr. on Celebrity Apprentice raises several questions.

First, did the Celebrity Apprentice get the right Teutul? There’s an argument to be made that Paul Jr. would have been the better contestant because of his popularity and success.

Second, does the appearance on the Trump program signal that Paul Sr. will have a different role on the next edition of American Chopper; that is, will the program be more focused on his son? Will there be an expanded role for Jesse James or no role?

Third, which program benefits more — American Chopper or Celebrity Apprentice — from the appearance of Paul Sr?

Fourth, can anyone see a Trump cycle in the future? Even better, can anyone imagine Trump riding down Fifth Avenue on such a creation, hair blowing in the wind….

Fifth, what happens if Trump gets involved in a contentious political debate? How will that impact Celebrity Apprentice? Will there be higher instant ratings but less long-term appeal?

Contestants

For the 2012 edition of the show, NBC Entertainment says the new cast will be the largest ever with 18 contestants waiting to hear who will be fired by Trump on each segment.

The men are: late-night legend Arsenio Hall, pop star Clay Aiken, radio host Adam Carolla, the “Incredible Hulk” Lou Ferrigno, magician/comedian Penn Jillette, rock star Dee Snider, actor George Takei, IndyCar legend Michael Andretti, and star of “American Chopper,” Paul Teutul, Sr.

The women are: supermodel Cheryl Tiegs, pop star Debbie Gibson, actress and multi-Grammy winner Tia Carrere, author and reality star Victoria Gotti, comedienne Lisa Lampanelli, former Miss Universe Dayana Mendoza, singer and actress Aubrey O’Day, actress and model Patricia Velasquez, and star of “Real Housewives of New Jersey,” Teresa Giudice.

American Chopper’s Paul Sr. To Join Trump’s Celebrity Apprentice is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: American Chopper, bike, bikes, builders, building, Celebrity Apprentice, chopper, cure, custom, Donald Trump, foreclosure, headquarters, Jesse, Jesse James, junior, lender, loan, Mikey, mortgage, motorcycle, OCC, Orange County Chopper, Paul, Paul Jr., Paul Sr., payments, PJD, president, presidential, Rick, rightsizing, senior, short sale, son, Teutel, Trump

Think of it as a back-door tax increase. While the public was watching the payroll debate in Washington Congress was actually increasing the cost to finance or refinance a home.

The Temporary Payroll Tax Cut Continuation Act of 2011 was widely applauded because it prevented the Social Security withholding from increasing to 6.2 percent from 4.2 percent of wages. However, the extension is only for two months and is set to end as of February 29, 2012. In other words, the payroll tax debate will be renewed once Congress returns from the mid-winter recess.

New Borrower Costs

Buried in the payroll compromise are new costs for borrowers. Specifically, these new costs come in two forms.

First, Congress has directed Fannie Mae and Freddie Mac to increase the fees lenders pay by ten basis points or .10 percent. This new cost — called the g-fee — will begin April 1, 2012.

This increase is substantial. According to Market Watch, lender fees now amount to .26 percent of the loan amount. The congressional increase will cost borrowers with a $200,000 mortgage an additional $5,400 over a 30-year loan term.

Second, Congress has directed the FHA to increase its annual mortgage insurance premium or MIP by .10 percent.

The FHA, which is an insurance program, has two borrower charges.

• There is an up-front mortgage insurance premium which is now equal to 1 percent of the mortgage amount.
• There’s also an annual mortgage insurance premium which in 2011 was increased to 1.15 percent for most borrowers. It will now rise to 1.25 percent.

The annual MIP increase will be costly to borrowers. The expense of a $200,000 mortgage will grow by about $4,200 over the life of the loan.

Taken together, the two increases created in the payroll tax bill will raise the cost of a $200,000 mortgage by roughly $9,600 over the life of the loan.

Impact

The result of the congressionally-mandated increases is that FHA loans will be artificially less attractive.

So is the MIP increase necessary?

The purpose of the MIP is to collect money from FHA borrowers which is placed in a reserve called the Mutual Mortgage Insurance Fund. This fund is supposed to equal 2 percent of the FHA loans outstanding but is now below the required level.

However, HUD has reported to Congress that under the current MIP structure the reserve fund will grow to the required 2 percent by 2014.

Moreover, the policies and programs which created problems for the FHA loan system — policies and programs and put in place by the Bush Administration prior to 2009 — have been changed. For instance, the required down payment has been raised, the mortgage insurance premium schedule has been changed, “seller-funded downpayment assistance loans” have been eliminated and lender standards have been tightened. The results are plainly visible when looking at the FHA’s book of business

Lenders will pass through the new charges, raising home financing costs nationwide at a time when the housing market remains stalled. Higher mortgage costs mean borrowers will qualify for less financing so they will have less ability to pay higher prices. Home sellers will thus feel part of the fee increase in the form of less buyer demand and reduced pressure to raise prices.

The net result of the congressional action is that borrowers will needlessly pay more for FHA financing and home sales will suffer. Various politicians will no doubt explain how the legislation made the FHA reserve fund “more secure” when, in fact, it was becoming more secure without a further increase in borrower costs.

FHA Mortgage Insurance Premium To Rise In 2012 is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: 2-month, 2012, 2014, assisted, borrower, Congress, Fannie Me, fee, FHA, Freddie Mac, g-fee, g-feee, HUD, loan, MIP, mortgage, mortgage insurance premium, Mutual Mortgage Insurance Fund, payroll, reserve, seller, seller-funded downpayment assistance loans, tax, tax increase, temporary

And more hard news: on average folks who work in financial services make 52 percent more than you do.

“Corporate profits with inventory valuation and capital consumption adjustments) increased $32.5 billion in the third quarter,” said the BEA. So if company profits are on the rise should that not mean the government will collect more tax revenue and reduce the deficit? Er, no, said the BEA:

“Taxes on corporate income decreased $9.1 billion in the third quarter, compared with a decrease of $1.8 billion in the second.”

Well wait a minute. There must be some accounting in there which shows that for some reason corporate profits are down and therefore taxes should be lower.

Nope. That’s not it.

The domestic profits of financial corporations — banks, financial holding companies, etc. — increased $9.2 billion in the third quarter. Non-financial corporations saw profits grow by $17.9 billion.

You’ll Earn More In Banking

Notice that profits rose by $27.1 billion — of which 34 percent was earned by banks and financial companies.

In terms of income, the Bureau of Labor Statistics says the median wage of someone in the financial services field is $67,690 versus the general wage of $44,410. That’s a 52% premium.

Income, of course, is very important. The more you earn the more likely you are to get a good FHA, VA or conventional mortgage at a good rate — and the less likely you are to be foreclosed.

For the past few weeks the government has been debating the issue of whether to raise the payroll tax by 2 percent — but there has been little or no debate regarding an increase in effective corporate taxes. For all the yelling and screaming of those who claim that business is over-regulated and over-taxed, the plain fact is that while corporate revenues are rising corporate taxes are not — meaning Uncle Sam has less money from the very businesses it nurtures and protects until they are large enough to take jobs overseas, buy back their own stock and lay-off workers within our borders.

Today the top marginal tax rate is 35 percent for individuals. Under President Reagan the top marginal rate was 69% and it was 92% under President Eisenhower, 91% under Kennedy, 77% under Nixon and Johnson, and 39.6% under Clinton.

Deficit Interest

The real cost of the deficit lies ahead. Right now Uncle Sam has a mountain of debt but pays virtually no interest. As one example, Treasury inflation-protected securities, or TIPS, reached a record yield of minus 0.877% in mid-December.

Imagine the deficit if interest rates increase…and then try to imagine a world where interest rates will not go up at some point….

Happy New Year: Corporate Profits Up, Taxes Down is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: corporate, deficit, FHA, financial, financial services, foreclosure, income, jobs, mortgage, nonfinancial, payroll, profits, sector, taxes, VA. conventional, wages

“It’s now been more than 150 years since Professor Charles Minnigerode decorated Williamsburg’s first Christmas tree,” says Robert C. Wilburn, president of the Colonial Williamsburg Foundation.

“A German native, the College of William and Mary professor brought the festive tradition with him to the United States. When Nathaniel Beverley Tucker invited Professor Minnigerode to celebrate the holiday season at the St. George Tucker House, he trimmed a tree with candles and fancy paper decoration as a present for Tucker’s children.”

Beverley Randolph Tucker, a descendant, says “regular sized candles were cut down and fastened on the tree, nuts were gilded, and other ornaments made. Presents were probably not distributed at this time, but there were songs, games, and refreshments.” (See: Tales of the Tuckers, Dietz Printing Co., Richmond, VA, 1942).

From that humble beginning (and no doubt similar celebrations with other immigrants), evolved what is now a tradition observed in millions of American homes.

The St. George Tucker House

As to the St. George Tucker house, it was donated to Williamsburg in 1993 after more than 200 years of family ownership. Used now as a donor hospitality center, the home is one of the most unusual examples of original colonial architecture to be found.

St. George Tucker was born in Bermuda in 1752 and came to the colonies to study law at William and Mary under George Wythe, whom he later succeeded. He was a member of the collegiate Flat Hat Society — a fraternity that evolved into what we today know as Phi Beta Kappa.

In 1788, Tucker bought three lots on the green in Williamsburg near the governor’s palace. This was once the site of the first theater in America (Levingstone’s) as well a small house. Tucker then built a home on the property which was expanded, wing after wing, until he decided to try something different: the house was pushed forward with the result that a visitor now finds parlors that have windows looking over the Williamsburg green as well as windows which look into the home’s central hallway. (Today there is actually a modern version designed in the style of original house.)

Such expansion was a necessity because Tucker had nine children and five stepchildren from two wives. While not all lived to adulthood, a family dinner could include Tucker as well as three children who served in the Congress at the same time: Beverley Tucker, Henry St. George Tucker and John Randolph (a stepson). His brother, Thomas T. Tucker, a physician, was appointed Treasurer of the United States by Jefferson and served from 1801 to 1828.

(A third brother, Henry Tucker, was President of the Bermuda Governor’s Council. Today the Tucker House in St. George’s Bermuda is a national museum while in Hamilton the famous Bermuda Underwater Exploration Institute was founded by a family descendant, Teddy Tucker. Teddy Tucker, in turn, was the basis for Peter Benchley’s book, The Deep.)

The Revolution

“When he was in his early twenties,” writes Beverly Randolph Tucker of St. George Tucker, “he happened to be in Richmond during the meeting of the Assembly at St. John’s Church and to have been sitting in the gallery when Patrick Henry made his famous ‘Give me Liberty or Give me Death‘ speech and immediately afterward St. George Tucker wrote what we know of the speech today.”

When the Revolution began, the British seized the Williamsburg magazine to deprive the colonialists of ammunition and powder. Believing that fair is fair, Tucker sailed to Bermuda, “liberated” the British magazine, and brought tons of arms and ammo back to the colonialists.

Legacy

After the revolution, Tucker taught law at William and Mary, became a judge, and in 1803 published an Americanized edition of Blackstone’s Commentaries. This five-volume set is one of the foundations of our legal system and today is still in print.

St. George Tucker held a number of opinions which are at the core of American law and custom.

On religion he wrote, “liberty of conscience in matters of religion consists in the absolute and unrestrained exercise of our religious opinions, and duties, in that mode which our own reason and conviction dictate, without the control or intervention of any human power or authority whatsoever.”

Tucker was also a strong believer in the concept of a free press.

“Liberty of speech and of discussion in all speculative matters, consists in the absolute and uncontrollable right of speaking, writing, and publishing, our opinions concerning any subject, whether religious, philosophical, or political….”

Perhaps most remarkably, in a state and a society where the ownership of slaves was equated with wealth and status, and where Tucker was among the wealthiest people in Virginia, he wrote in 1796 — more than 60 years before the start of the Civil War — an essay entitled A Dissertation on Slavery: With a Proposal for the Gradual Abolition of It in the State of Virginia.

“Whilst America hath been the land of promise to Europeans, and their descendants, it hath been the vale of death to millions of the wretched sons of Africa,” he wrote. “The genial light of liberty, which hath here shone with unrivalled lustre on the former, hath yielded no comfort to the latter, but to them hath proved a pillar of darkness, whilst it hath conducted the former to the most enviable state of human existence. Whilst we were offering up vows at the shrine of Liberty, and sacrificing hecatombs upon her altars; whilst we swore irreconcilable hostility to her enemies, and hurled defiance in their faces; whilst we adjured the God of Hosts to witness our resolution to live free, or die, and imprecated curses on their heads who refused to unite with us in establishing the empire of freedom; we were imposing upon our fellow men, who differ in complexion from us, a slavery, ten thousand times more cruel than the utmost extremity of those grievances and oppressions, of which we complained.”

Tucker died in 1827, and it was his son, Nathaniel Beverley Tucker, also a judge and professor of law at William and Mary, who hosted the famous tree in 1842.

No doubt if Mr. Tucker were with us today he would extend to one and all the very best wishes for this holiday season and the coming New Year.

————————
Published originally by Realty Times on December 25, 2005, posted with permission and expanded from the original. This post is re-published annually and with good wishes to all.

How America got its first Christmas tree is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: Bermuda, Blackstone, Christmas, first, Flat Hat Society, free, freedom, Law, Patrick Henry, Phi Beta Kappa, press, professor, Randolph, religious, rich, slavery, St. George, Treasurer, tress, Tucker, wealth, William and Mary, Williamsburg