71% of Borrowers Do Qualify for a Purchase Loan, by Rosemary Rugnetta, Freerateupdate.com


(FreeRateUpdate.com) – As the economic crisis continues to slowly heal its wounds, the reports of the effects on our society is in the media every day. The housing market and mortgage market seem to be the hardest hit in this down turn that appears to be dragging on for months. While this solemn state of affairs engulfs each one of us into a state of depression, there is good news on the forefront. According to these new statistics, there are a large number of borrowers that still have acceptable credits scores. In fact, 71% of borrowers do qualify for a purchase loan.

As reported by Zillow, according to Fair Isaac Corporation, the creator of the FICO score, 29.3% of today’s borrowers have a credit score below 620 which makes them unable to borrower money for a purchase mortgage. Anyone with a credit score below 620 is very unlikely to be able to obtain financing. Even if this group of people had a large down payment, they would most likely not be able to obtain a mortgage. On the other hand, the good news is that 47% of today’s borrowers have scores above 720 and a total of 71% are able to borrow. Higher credit scores are awarded with the best interest rates available.

Due to tight credit standards and stricter underwriting guidelines, many borrowers today are being turned away from obtaining a mortgage. Years ago, these same borrowers were turning to sub-prime mortgage products as their only financing option. At that time, many of these same borrowers would have qualified for FHA loans but opted for sub-prime instead. In fact, prior to the introduction of sub-prime, there were only FHA loans available to these borrowers. Now, with FHAs exposure in the mortgage market so pronounced, they, too, are further tightening their lending guidelines making it difficult for this 29.3% group of people to obtain a mortgage.

More people have been choosing to clean up their credit and pay off credit cards as credit card interest rates have increased. This is a positive move in an effort to increase their credit scores and make them more eligible to buy a home. Although people have been cutting back other spending while doing this and growth of the economy has suffered, they are becoming responsible spenders. As this movement continues, the percentage of borrowers that are credit worthy and able to buy should increase over time. Just as it took many years for this turmoil to occur, it will take time for the benefits of these actions to be seen.

Although the number of borrowers that are unable to obtain a mortgage may seem high, earlier studies show that nearly 20% of the population had FICO scores below 620 in 2002 when the unemployment rate averaged around 5.7%. Considering the fact that we have just gone through the Great Recession followed by a very slow economic recovery and a very high unemployment rate, this new percentage of 29.3% is not so frightening. Reflecting on the fact that 71% of borrowers do qualify for a new home loan, things may just improve when borrowers realize that they are in this category and able to take advantage of historically low interest rates.

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Chase Halts Foreclosures In Process, by Thetruthaboutmortgage.com


JP Morgan Chase has halted foreclosures until a review of its document-filing process is completed, according to the WSJ.

The New York City-based bank said the move affects roughly 56,000 home loans in some stage of the foreclosure process.

Chase spokesman Tom Kelly announced that there were cases where employees may have signed affidavits about loan documents on the basis of file reviews done by other personnel.

As a result, the bank and mortgage lender must now re-examine documents tied to loans already in foreclosure to verify if they “meet the standard of personal knowledge or review” where required.

Back in May, law firm Ice Legal LP dropped Chase document-signer Beth Ann Cottrell after it became known that she signed off on roughly 18,000 foreclosure affidavits and other documents each month without actually reviewing the files.

And last week, GMAC Mortgage told brokers and agents to immediately stop evictions, cash-for-keys transactions, and lockouts in 23 states after the company warned it could need to take corrective action in connection with some foreclosures.

Sign of the times…a year ago it was all about foreclosure moratoriums to help borrowers in need, and now it’s all about lenders making sure they don’t get into hot water over their suspect loss mitigation activities.

Housing Finance Needs U.S. Backstop, Executives Tell Lawmakers, by Lorraine Woellert, Bloomberg.com


Congress must preserve some form of U.S. guarantee on mortgages to attract private capital to the housing-finance system and stabilize a market recovering from the credit crisis, industry executives told lawmakers.

Private capital must play a bigger role in housing finance as policy makers replace the current system, which is dependent on guarantees from government-backed Fannie Mae andFreddie Mac, the executives said today in testimony prepared for a House Financial Services Committee hearing. U.S. support will still be needed to keep loans flowing to borrowers and preserve products such as 30-year, fixed-rate mortgages, they said.

Without a government backstop, there wouldn’t be enough private capital to support the $8 trillion in home loans that are funded by investors, said Michael Farrell, chief executive officer ofAnnaly Capital Management Inc., a New York real estate investment trust that owns or manages $90 billion of mortgage-backed securities.

The House panel called Farrell and other housing-industry executives to testify as they seek ways to overhaul a finance system that collapsed in 2008 amid losses on securities linked to subprime mortgages. Some economists and lawmakers have urged that any new system rely solely on private capital and be priced to reflect the risks.

“Recommendations to completely privatize miss the necessity of a government backstop to ensure consistent functioning of mortgage-backed securities markets under all economic conditions,” said Michael Heid, co-president of home mortgages for Wells Fargo & Co.

Fannie, Freddie

Fannie Mae and Freddie Mac, which own or guarantee more than half of the $11 trillion U.S. mortgage market, relied on an implied government guarantee to pool and sell mortgage-backed securities, which generated cash that could be channeled back into additional loans. The federal government seized the two companies amid soaring losses in September 2008 and promised to stand by the debt.

Since then, Washington-based Fannie Mae and Freddie Mac, based in McLean, Virginia, have survived on a promise of unlimited aid from the U.S. Treasury Department. The companies lost $166 billion on their guarantees of single-family mortgages from the end of 2007 and the second quarter of this year and have drawn almost $150 billion so far. Treasury Secretary Timothy F. Geithner has promised to deliver a plan for overhauling the housing-finance system in January.

One challenge for policy makers is how to keep money flowing into the system without the kind of open-ended commitment that left taxpayers responsible for catastrophic losses at the government-sponsored enterprises.

“The GSEs clearly did not operate with enough capital to buffer the risks they assumed,” Christopher Papagianis, managing director of non-profit research group Economics21, told lawmakers. “Policy makers should recognize that bailouts in the housing sector are inevitable if the key institutions in the space do not hold sufficient capital,” said Papagianis, an adviser to former President George W. Bush.

To contact the reporter on this story: Lorraine Woellert in Washington atlwoellert@bloomberg.net;

To contact the editor responsible for this story: Lawrence Roberts at lroberts13@bloomberg.net.

Oregon Real Estate Wanted Updated With New Buyers Listings.


OregonRealEstateWanted.com (ORW) has been updated with new listings.   ORW is a web site that lists buyers that are looking to invest or lease  real estate in the state of Oregon .  If you have a property on the market for purchase, lease or auction you should visit the site often and see if there is a buyer that is looking for what you have to offer.

OregonRealEstateWanted.com
http://oregonrealestatewanted.com

Loan Modifications Are Getting Better, thetruthaboutmortgage.com


It appears as if more recently completed loan modifications are performing better than their predecessors, according to the latest Mortgage Metrics Report from the OCC.

More than 90 percent of loan modifications implemented during the second quarter of 2010 reduced borrowers’ monthly principal and interest payments, while 56 percent reduced payments by more than 20 percent.

And that focus on sustainable and affordable monthly mortgage payments resulted in lower post-modification delinquency rates (much lower than that 75 percent re-default rate we we’re worried about).

Six months after modification, roughly 32 percent of the modifications made in 2009 were seriously delinquent or in somewhere in the foreclosure process, compared with more than 45 percent of loan mods made in 2008.

And the performance of modifications made this year suggests the trend is continuing.

At three months after modification, just 11 percent of the 2010 modifications were seriously delinquent, compared with 20 percent of modifications made last year and 32 percent of 2008 modifications.

HAMP Modifications Outperforming Other Loan Mods

Nearly all modifications made under the Making Home Affordable program (HAMP) reduced borrower principal and interest payments, and 78.9 percent reduced monthly payments by 20 percent or more

HAMP modifications made during the quarter reduced monthly mortgage payments by an average of $608, while other loan mods reduced payments by just $307 on average.

As a result, HAMP modifications implemented through the first quarter of 2010 had fewer re-default rates than other modifications implemented during the same period.

At six months after modification, 10.8 percent of HAMP modifications made in the fourth quarter of 2009 were 60 or more days delinquent, compared with 22.4 percent of other modifications made during that quarter.

Similarly, 10.5 percent of HAMP modifications made in the first quarter of 2010 were 60 or more days delinquent three months after modification, compared with 11.6 percent of other modifications.

So perhaps HAMP ain’t so bad after all…and maybe loan modifications actually do work.

Multnomahforeclosures.com: Updated Notice of Default Lists and Books for the Week of September 24th, 2010


Multnomahforeclosures.com was updated today with the largest list of Notice Defaults to date. With Notice of Default records dating back nearly 2 years. Multnomahforeclosures.com idocuments the fall of the great real estate bust of the 21st century.

All listings are in PDF and Excel Spread Sheet format.

Multnomah County Foreclosures
http://multnomahforeclosures.com

JPMorgan Based Foreclosures on Faulty Documents, Lawyers Claim, by Lorraine Woellert and Dakin Campbell, Bloomberg.com


JPMorgan Chase & Co. faces a legal challenge next month that could cast doubt on thousands of foreclosures after a mortgage executive at the bank said she didn’t verify documents used to justify home seizures.

Lawyers for a Palm Beach County, Florida, homeowner asked a judge to throw out a foreclosure as a penalty for misleading the court, according to attorney Tom Ice of Ice Legal PA. They’re citing a May 17 deposition in which the JPMorgan executive said she signed thousands of affidavits and documents supporting the New York-based bank’s claims without personally checking loan records. The court is scheduled to hear arguments Oct. 19.

The Chase Home Finance operation supervisor, Beth Ann Cottrell, said in May she was among eight managers who together sign about 18,000 documents a month, according to a transcriptof her sworn deposition provided by Ice. Asked how they were prepared, she said she relied on other people at the firm.

“My review is more or less signing the document unless it’s questionable,” she said. That means, “somebody has a question and brings it to me and says, ‘Beth, can you take a look at this?’”

Inaccurate statements by banks in foreclosure documents may give borrowers who have lost their homes a legal basis to challenge the seizures, derailing resales and casting doubts on property titles. A Florida court sanctioned Ally Financial Inc.’s GMAC Mortgage unit for faulty affidavits in 2006, and the firm suspended evictions in 23 states this month after finding employees still signing affidavits without checking the data.

Titles in Doubt

JPMorgan spokesman Tom Kelly declined requests for comment. Cottrell didn’t return phone calls to her office requesting comment. A lawyer representing her at the deposition, Joseph Mancilla of the Florida Default Law Group PL, didn’t return calls. Cottrell isn’t named as a defendant.

Cottrell signed the affidavit at issue in the case, dated June 2009, while at her previous employer, an outside servicing firm working for JPMorgan, according to court documents. When signing documents there for the JPMorgan unit, she used the title “assistant secretary and vice president” of Chase Home Finance, according to the transcript. She became a JPMorgan employee about three months after signing the affidavit. Document signers sometimes endorse affidavits on behalf of other firms as a way to streamline the foreclosure process, said Dustin Zacks, an attorney at Ice’s firm.

JPMorgan was the third-largest U.S. servicer of home mortgages as of June 30, with $1.35 trillion or almost 13 percent of the market, according to industry newsletter Inside Mortgage Finance. Ally is the fifth-biggest mortgage servicer, with $349.1 billion. The other three in the top five are Bank of America Corp., Wells Fargo & Co., and Citigroup Inc.

Foreclosures Averted

Servicers perform billing and collections on home loans. When borrowers default, the firms handle the foreclosure process. Affidavits lay the legal foundation for a foreclosure by attesting that the borrower is delinquent and that the lender is entitled to seize the home. Details of the JPMorgan case were reported earlier last week by the Financial Times.

Lawyers in Florida and New York, among other states, have halted foreclosures and evictions by showing affidavits were faulty. Attorneys general in Texas, Iowa and Illinois have started investigations into mortgage practices at GMAC Mortgage following last week’s revelations. California has ordered the company to prove its foreclosures are legal or halt them.

If the documents are shown to be false after a home has already been resold by a bank, that casts doubt on who is the rightful owner, said O. Max Gardner III, an attorney at law firmGardner & Gardner PLLC in Shelby, North Carolina, who has represented homeowners in fighting foreclosures and has cases pending against JPMorgan.

Title Insurers

“I’m sure a lot of title insurance companies are concerned about the potential liability right now,” as borrowers challenge how banks made statements, he said. “The judges could absolutely hold the bank and attorneys in contempt.”

U.S. home seizures reached a record for the third time in five months in August as lenders completed the foreclosure process for thousands of delinquent owners, according to RealtyTrac Inc.

Ice, the founding partner of his foreclosure-defense law firm in Royal Palm Beach, Florida, said some lenders are accepting voluntary dismissal of their cases.

During the deposition, Cottrell said a staff of in-house specialists scrutinize loan documents and prepare affidavits, the transcript shows. If they have difficulties or questions, they come to her. She signs in a notary’s presence, she said.

‘No Knowledge’

During questioning by Ice lawyer Zacks, Cottrell said she had worked at Chase Home Finance for about eight months, according to the transcript.

“As to everything in the affidavit, did you have personal knowledge?” Zacks asked.

“My own personal knowledge, no,” Cottrell answered.

“You stated ‘That plaintiff is entitled to enforce the note and mortgage,’” Zacks said. “Again, did you have personal knowledge of that?”

“No knowledge,” she answered.

Florida Attorney General William McCollum is investigating three law firms that represent loan servicers in foreclosures, and are alleged to have submitted fraudulent documents to the courts, according to an Aug. 10 statement. The firms handled about 80 percent of foreclosure cases in the state, according to a letter from U.S. Representative Alan Grayson, a Florida Democrat.

Judges overseeing foreclosures in the wake of the housing crisis are growing skeptical of banks, said Christopher L. Peterson, a professor at the University of Utah’s S.J. Quinney College of Law. A surge in proceedings has helped expose a variety of paperwork lapses, he said in an interview.

“Early in the process the judges were very cavalier and they just took the financiers’ word,” Peterson said. “Now there are enough disputes out there about ownership of loans that the judges are starting to feel like they need to hold the financial institutions to the basic rules of evidence.”

To contact the reporters on this story: Lorraine Woellert in Washington atlwoellert@bloomberg.netDakin Campbell in San Francisco at dcampbell27@bloomberg.net

To contact the editor responsible for this story: Lawrence Roberts at lroberts13@bloomberg.net.