Massachusetts Foreclosed Homes

Mortgage Delinquency Rates Expected to Drop in 2012

According to a recent study completed by TransUnion, a credit reporting agency, mortgage delinquency rates should see a significant drop by the end of 2012, if there are no setbacks in the economy, reported The Associative Press.

TransUnion reported that delinquency rates, the percentage of borrowers 60 or more days past due on their mortgage payments, may increase to 6 percent over the first few months of 2012 but then steadily decline over the remainder of the year. By the end of 2012, delinquency rates could be as low as 5 percent, down a good deal from the 2009 peak of 6.89 percent.

Reasons for the forecasted decline include expectations of an improved economy, improved consumer confidence, and also the fact that banks which have been slow to process foreclosures will sort out the mortgages that have been listed as delinquent for longer than they normally would have been.

Although delinquency rates are expected to drop over the next year, the number of borrowers past due on their mortgages is still far from the 1.5 to 2 percent rates seen pre-recession. 

BofA Exec. Says Foreclosures Selling Faster

Bank of America announced that it has picked up the pace in several markets in selling its inventory of foreclosed homes, REALTOR Magazine reported November 16, 2011. 

Brian Moynihan, Bank of America Corp.’s chief executive, said at a press conference recently that in cases where banks can take ownership of the properties quickly and get them cleaned up, they are able to get them back on the market and those properties are selling the fastest.

On the other hand, some states, such as Florida, which is a judicial state for foreclosures, continue to see delays, as foreclosures inch along at a slower pace, Moynihan said.

Overall, Moynihan said mortgage delinquencies are dropping in its portfolios and that home prices seem to be hovering at “a bottom” as the backlog of unsold homes reaches the market.

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MA Mortgage Delinquencies Decline January 2011

Mortgage delinquencies fell in January to 6.22 percent of all outstanding home loans in Greater Boston, a full percentage point lower than the percentage tracked a year earlier, the Boston Business Journal reported April 6, 2011.

According to a report by CoreLogic, a company that tracks financial information, the Boston-Quincy metropolitan area had a 7.27 percent mortgage-delinquency rate in January 2010. Mortgage delinquencies are defined as home loans more than 90 days past due.

Across the Commonwealth of Massachusetts, the mortgage delinquency rate fell to 5.92 percent of all home loans, a decline from 6.81 percent a year earlier.

CoreLogic said foreclosure rates increased in Greater Boston on a year-over-year basis in January, ticking up to 2.29 percent of all active home loans. The rate was 2.08 percent in January 2010.

FHA Extends Anti-flipping Waiver

The Federal Housing Administration (FHA) announced January 28, 2011 that it would temporarily extend it's waiver of anti-flipping rules.

The extension is intended to accelerate the resale of foreclosed homes in neighborhoods struggling to overcome possible property abandonment and blight.

With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days.  Early last year, FHA temporarily waived this regulation through January 31, 2011.  FHA now is extending the waiver through the remainder of 2011.  

The FHA hopes the action will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales.

SJC Upholds Land Court Judge in Ibanez Case

Massachusetts Lawyers Weekly reported January 7, 2011 that the Massachusetts Supreme Judicial Court recently upheld a Land Court judge’s decision made in the U.S. Bank v. Ibanez case, which invalidated the foreclosure sales conducted by two plaintiff banks, stating that the banks “failed to make the required showing that they were the holders of the mortgages at the time of foreclosure.”

The plaintiffs argued that they submitted “securitization documents," proving they indeed held the mortgages before the notice of sale and the foreclosure sale. The ruling stated that the documents alone did not demonstrate that the banks were holders of the mortgages, thus the banks could not have conveyed title to the subject properties.

Although the plaintiffs and the Real Estate Bar Association had pushed to have the ruling applied prospectively, the courts stated that since the decision did not significantly change the common law the ruling should be applied retroactively.

The 32-page decision is U.S. Bank National Association v. Ibanez (and a consolidated case), Lawyers Weekly No. 10-005-11. The full text of the ruling can be found on the Massachusetts Lawyers Weekly Web site.

For a detailed anaylsis of the case, read Apocalypse Now? Will The Massachusetts Ibanez Case Unravel Widespread Irregularities In The Residential Securitized Mortgage Market? on the Massachusetts Real Estate Law Blog.

U.S. Foreclosures Decline in October

The number of U.S. homes seized by banks declined by 36 percent in October after some large loan servicers imposed a moratorium on foreclosures to investigate whether the repossessions were properly conducted, Bloomberg reported November 23, 2010.

Banks took over 79,886 homes, down from a record 124,051 in September and the lowest number since May 2009. The data comes from Lender Processing Services Inc, a Jacksonville, Florida-based real estate data company.

The decline in foreclosures led to an increase in the number of mortgages with late payments for the first time since May. Delinquencies climbed 0.4 percent to 7.04 million. It took an average 492 days for banks to foreclose on homes, up from 484 days in September and 382 days in October 2009.

Lenders including Bank of America Corp., JPMorgan Chase & Co. and Ally Financial Inc. began suspending some foreclosures in September after reports that employees may have improperly processed paperwork for foreclosures. The suspensions led to investigations by attorneys general in all 50 states and congressional hearings.

More Help For Underwater Homeowners

The following video discusses a relatively new program to help homeowners whose homes are worth less the balance of their mortgage.

Are these programs a good idea? Please give me your comments below.

 

Bank of America Stops Foreclosures

If America's foreclosure crisis wasn't bad enough, Bank of America said October 8, 2010 that it would stop foreclosure proceedings in all 50 states, as it sorts out allegations bank executives cut corners on legal paperwork.

The video below is from NECN.

Last week, the Bank of America halted foreclosures in 23 states, including Maine, Vermont and Connecticut. These were states where lenders have to go to court to get permission to seize homes from delinquent borrowers. The bank has now extended the foreclosure freeze to the rest of New England and America.

Other banks, including JP Morgan Chase and GMAC stopped foreclosures last week.

 

JP Morgan Chase to Hault 56,000 Foreclosures

JP Morgan Chase said it will delay more than 56,000 foreclosure proceedings due to paperwork that was signed, "without the signer personally having reviewed those files," CNBC reported September 29, 2010.

JP Morgan Chase isn't the only mortgage servicer facing this problem. GMAC halted foreclosures and evictions in 23 states for roughly the same reason.

The delay in these foreclosures could result in a surge in foreclosures at some future date.

Loan Modification Programs Plagued With Problems

Three New York residents recently filed lawsuits against J.P. Morgan Chase & Co. alleging that the company misled them into false hopes of receiving long-term mortgage modifications under the Obama Administration's Home Affordable Modification Program (HAMP), the Wall Street Journal reported May 4, 2010.

Under HAMP borrowers who make all of their payments under a trial modification period expect to be offered permanent help; however, the federal program has been considered largely a failure by most in the industry.

The three individuals paid their monthly mortgage payments under trial loan modifications with the impression that their mortgage loans would soon be permanently modified to a more affordable cost, but permanent relief never came.
 
It was not until after months of trial payments that J.P. Morgan Chase & Co. notified the individuals that they were not eligible for permanent help due to their incomes being too low. The US Treasury has recently told banks to document incomes before trials are offered.  Instead of having false hopes of permanent modifications the individuals could have gone through with the foreclosure process and possibly set out to find less expensive housing options.
 
This was not the first time a lawsuit has been filed against a bank that failed to comply with the HAMP regulations. A non-profit group in Boston, The National Consumer Law Center, recently filed suits for four Massachusetts residents who claimed similar issues of trial HAMP modifications not converting to permanent modifications.
 

"J.P. Morgan and other big banks regularly say they are making extraordinary efforts to help borrowers. But Treasury Secretary Timothy Geithner told a Senate subcommittee last week that banks aren't 'doing enough to help homeowners—not doing enough to help them navigate the difficult and often frightening process of avoiding foreclosure.' He threatened to crack down on banks that don't 'hold up their end of the bargain' in providing HAMP modifications to those who are eligible."

Grants Available to First-time Home Buyers to Repair Foreclosed Homes in Haverhill, MA

First-time home buyers in Haverhill, MA may be eligible for grant money to make repairs to foreclosed homes, as a result of a partnership announced between MassHousing, the City of Haverhill and Haverhill Bank announced April 15, 2010.

Qualified home buyers who obtain a MassHousing Mortgage through Haverhill Bank will be eligible for a second loan to assist in rehabilitating the foreclosed property. The second loan will be funded through the Neighborhood Stabilization Program (NSP), which was created in federal economic recovery legislation.

The rehabilitation loan could be forgiven depending on how long the home buyer lives in the home and the total amount of NSP funds used.

The city of Haverhill is the first city in Massachusetts to partner with MassHousing in the NSP program and Haverhill Bank is the first MassHousing-approved lender to participate in the program.

“I congratulate Mayor Fiorentini and Haverhill Bank for proactively addressing the issue of abandoned and foreclosed homes,” said MassHousing Executive Director Thomas R. Gleason. “The NSP program will make money available to help home buyers renovate foreclosed homes that are at risk of becoming blighted.” Homebuyers must be deemed eligible for the NSP program by the Haverhill Department of Community Development. There are no limits to the NSP rehabilitation grants but the cost of renovation must be deemed reasonable by the city.

“I’m pleased to be able to develop a way to leverage our federal funds to rehabilitate foreclosed housing across the city through private investors and first-time home buyers,” said Mayor Fiorentini. “Foreclosed, run-down and abandoned properties can destroy home values in a neighborhood. This innovative program can help eliminate this problem.”

Homes eligible under the program must be foreclosed or abandoned one-, two- or three-family properties.
Borrowers must be eligible for a MassHousing mortgage, meet income and purchase price guidelines, have a minimum 3 percent down payment for one- or two-family homes and 5 percent down payment for three-family homes, and complete a home buyer education course.

For more information, you can contact an exclusive buyer agent located in Haverhill, MA.

You also can get free foreclosure listings.

Short Sale Tutorial [Video]

The following video contains a basic tutorial on short sales in Massachusetts. It is presented by real estate broker and lawyer Dave Kres, who is the co-owner of Buyers Brokers Only, LLC. Many short sales are in pre-foreclosure status, and completing a short-sale transaction typically takes from two to six months. Buying a short sale requires a great deal of patience.

Mortgage Bailout Plan To Include Short Sales

The U.S. Treasury is set to announce a plan to expand mortgage relief efforts to include short sales by providing a closing cost incentive to homeowners and lenders, the Realty Times reported October 22, 2009.

Now that sounds like a complete waste of taxpayer money.

A short sale occurs when the bank allows the sale of a home for less than the existing mortgage balance.

It's a strategy to avoid foreclosure, but banks have been more likely to let a home go into foreclosure, rather than short sell it, even if it means holding the property during moratoriums set by some jurisdictions, such as Massachusetts.

Why you ask? It's because short sale offers often come in well below the last appraisal or any reasonable amount, real estate agents don't want the extra work and time involved and buyers fear a four-to-five month transaction period that could end in the bank refusing to accept the short sale.

My office has had some success closing short sales, but deals that fall apart usually end with unhappy clients, and the result simply isn't our fault. Sometimes it is easier to just avoid the problem altogether.

To help move more distressed properties through to closing, the Treasury, under the Making Home Affordable's Home Affordable Modification Program, is expected to announce a $1,500 closing cost incentive for those who agree to short sales or deed-in-lieu deals, which is when the deed is transferred to the lender, avoiding the more costly foreclosure proceeding.

The U.S. Treasury will also pay the lender $1,000 for accepting a short sale or deed-in-lieu deal. Haven't the taxpayers done enough for banks?

A better approach would be a law that requires lenders to accept or reject all short sale offers within 30 days. In addition, if the property sells after foreclosure for less than any rejected short sale offer, a lender should be barred from pursuing the borrower for any short fall between the sale price and the balance of the mortgage.

Earlier this year when the plan was first considered, there was also a provision to pay second lien holders up to $1,000 to waive their claim in such transactions.

U.S. Regulators Fight Mortgage Scams

Federal regulators, looking to take away a common tool used in mortgage frauds, are considering a nationwide ban on companies' charging upfront fees for helping homeowners modify loans to avoid foreclosures, the Los Angeles Times reported September 18, 2009.

The move comes as federal and state officials plan to expand a crackdown on mortgage-related scams and other schemes that prey on debt-ridden consumers trying to stay financially afloat due to a poor economy, unemployment, falling home prices and exotic mortgages.

While foreclosures remain near record levels, the only way many consumers can stay in their homes is by reducing their mortgage payments. As often happens during economic downturns, scam artists have tried to cash in on other people's misfortune, this time by asking for large upfront payments for help seeking mortgage modifications.

I heard a radio ad just a few days ago by a "loan modification company" that suggested homeowners didn't need help from the government or lawyers, but should contact them directly to get help with a loan modification.

Lenders Fail To Modify, So Foreclosures Continue

President Obama's $75 billion plan to reduce the number of foreclosures sweeping the nation has been plagued with backlogs and delays, USA Today Reported June 19, 2009.

Many struggling homeowners have complained about phone calls not returned and inaccurate information from lenders, and others have said they were denied help for reasons that weren't clear.

The Obama plan's goal was to prevent up to 4 million foreclosures by having banks modify loans into more affordable monthly payments; however, since its debut, the plan has led to offers of more than 190,000 mortgage modifications with lower monthly payments, according to Treasury Department numbers. During that same period, lenders either have started or advanced foreclosure proceedings against more than 1 million homes.

"Homeowners who apply for mortgage modifications are finding that banks typically are taking 45 to 60 days to respond to inquiries, according to a report this month by NeighborWorks America, a provider of foreclosure-prevention counseling.

"Some homeowners who applied for mortgage modifications five months ago still have no answer on whether they will be able to arrange smaller monthly payments, leaving them uncertain whether they'll keep their homes or lose them shortly."

Some lenders blame the Obama administration for not outlining the details of the plan until March. These lenders now claim they are beefing up staffing to process modification requests.

"Bank of America reports that it modified about 232,000 mortgages last year. During the first four months of this year, it has completed about 157,000 modifications — all before the Obama housing rescue plan went into effect."

Read The USA Today Article

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