Posted on 11. June 2012 07:13 by qjustinh

For buyers, the downpayment is often the area where they have the most trouble. It can be the biggest obstacle when trying to move from renter status to homeownership. Saving for a home can feel like saving for something that's intangible because the gratification is not instantaneous.

In a world where so many things are at our finger tips–for instance, with the click of a mouse, you can buy just about anything online and have it delivered nearly instantly–a house is not one of those deliverables.

Yet, the American dream to own our own home remains alive. Overcoming the obstacle of saving for a downpayment has a lot to do with what you do daily.

It's not only about how you're saving your money but also how you're spending it that ultimately will determine how easily you can accumulate a downpayment.

Here are five tips to help you save for that downpayment starting right now. Like dieting, many people put off saving for another day. They think that one last spending spree on clothes, appliances, nicknacks, hobbies, daily coffee drinks, and...(fill in the blank)...won't matter. But those things do matter. In fact, today, matters.

The first step is starting to save. As silly as that may sound, it really is important. You probably know many people who are renters and may forever be renters because they keep putting off saving money to pay for the downpayment. Some might be looking for a financial windfall or a lucky lottery ticket to come up with the downpayment funds. For most of us, those aren't viable options, so the picture can look bleak.

Saving for a home's downpayment can seem nearly impossible, especially when you consider that salaries have shrunk and some people are working fewer hours and for less money. Plus, the ideal savings amount for a downpayment is 20 percent. Depending on where you buy, that can be a lot of cash. The task, however, doesn't have to be unreachable, nor does the process have to be incredibly painful.

Saving for a downpayment is really about forming and maintaining good financial habits. The financially-sound habits you put in place today will, hopefully, be carried with you into the land of homeownership. Once, you become a homeowner, having a nest egg is vital for many reasons including a loss of job, home repairs, and medical issues, to name a few.

Psychologists have proven that to effectively create a habit you have to change your actions and exercise will power. The problem is many people exercise their will power all day long for their job or their personal life, so their ability to be disciplined and exercise will power often diminishes as the day passes. That's why many people come home and have a few to several drinks after hours, even if they know they really should be at the gym.

Step two is to write out how you exercise will power when it comes to saving for a downpayment. Write down in detail where you plan to cut back in your spending and how much you will save from each month's income. Having a plan written down will help you to stick to it. Then, if and when, you are feeling weak, refer to your detailed savings plan to garner some strength to say no to that extra night of dining out. Also, include the amount of money you are wanting to save for your downpayment. Keep this figure in your head and in sight as much as possible.

Step three also involves a written task. This time write down your reasons for wanting to own a home. If you can't clearly see the value in homeownership, you won't make saving for a downpayment a priority. The reasons can be bullet points but the more you list them with detailed notes, the greater you will feel connection to your goal.

Step four: copy and distribute. If you're really eager to commit these reasons to memory, do the copying the old fashion way–by hand. However, making print-outs works, too. Keep copies on your desk, on your bathroom mirror, on your refrigerator, and, most important, in your wallet with your money and credit cards. Make sure every time you're about to spend money, you can see your reasons for wanting to buy a home.

Step five: read. Yes, read as much as you can about homeownership. Columns like this one and other articles will keep the idea of homeownership fresh in your mind. Saving tens of thousands of dollars will get easier if you understand the value of owning a home. If you clip articles or save links on your computer about the real estate industry, you will be inspired to reach your goal and become a homeowner, especially as you read about how people love having control of their own home to decorate as they please and live in comfort being their own “landlord”.

I realize these aren't the typical money-saving tips like get your hair cut less frequently or stop going to the coffee shop every day. Those are important tips too, but really following through and accomplishing any goal requires will power, discipline, and solid reasons why the goal is worth achieving. When you don't own a home, sometimes it's hard to see why you should. That's when these steps will help you remember and accumulate your downpayment savings.

By Phoebe Chongchua

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Posted on 11. June 2012 07:13 by qjustinh

For buyers, the downpayment is often the area where they have the most trouble. It can be the biggest obstacle when trying to move from renter status to homeownership. Saving for a home can feel like saving for something that's intangible because the gratification is not instantaneous.

In a world where so many things are at our finger tips–for instance, with the click of a mouse, you can buy just about anything online and have it delivered nearly instantly–a house is not one of those deliverables.

Yet, the American dream to own our own home remains alive. Overcoming the obstacle of saving for a downpayment has a lot to do with what you do daily.

It's not only about how you're saving your money but also how you're spending it that ultimately will determine how easily you can accumulate a downpayment.

Here are five tips to help you save for that downpayment starting right now. Like dieting, many people put off saving for another day. They think that one last spending spree on clothes, appliances, nicknacks, hobbies, daily coffee drinks, and...(fill in the blank)...won't matter. But those things do matter. In fact, today, matters.

The first step is starting to save. As silly as that may sound, it really is important. You probably know many people who are renters and may forever be renters because they keep putting off saving money to pay for the downpayment. Some might be looking for a financial windfall or a lucky lottery ticket to come up with the downpayment funds. For most of us, those aren't viable options, so the picture can look bleak.

Saving for a home's downpayment can seem nearly impossible, especially when you consider that salaries have shrunk and some people are working fewer hours and for less money. Plus, the ideal savings amount for a downpayment is 20 percent. Depending on where you buy, that can be a lot of cash. The task, however, doesn't have to be unreachable, nor does the process have to be incredibly painful.

Saving for a downpayment is really about forming and maintaining good financial habits. The financially-sound habits you put in place today will, hopefully, be carried with you into the land of homeownership. Once, you become a homeowner, having a nest egg is vital for many reasons including a loss of job, home repairs, and medical issues, to name a few.

Psychologists have proven that to effectively create a habit you have to change your actions and exercise will power. The problem is many people exercise their will power all day long for their job or their personal life, so their ability to be disciplined and exercise will power often diminishes as the day passes. That's why many people come home and have a few to several drinks after hours, even if they know they really should be at the gym.

Step two is to write out how you exercise will power when it comes to saving for a downpayment. Write down in detail where you plan to cut back in your spending and how much you will save from each month's income. Having a plan written down will help you to stick to it. Then, if and when, you are feeling weak, refer to your detailed savings plan to garner some strength to say no to that extra night of dining out. Also, include the amount of money you are wanting to save for your downpayment. Keep this figure in your head and in sight as much as possible.

Step three also involves a written task. This time write down your reasons for wanting to own a home. If you can't clearly see the value in homeownership, you won't make saving for a downpayment a priority. The reasons can be bullet points but the more you list them with detailed notes, the greater you will feel connection to your goal.

Step four: copy and distribute. If you're really eager to commit these reasons to memory, do the copying the old fashion way–by hand. However, making print-outs works, too. Keep copies on your desk, on your bathroom mirror, on your refrigerator, and, most important, in your wallet with your money and credit cards. Make sure every time you're about to spend money, you can see your reasons for wanting to buy a home.

Step five: read. Yes, read as much as you can about homeownership. Columns like this one and other articles will keep the idea of homeownership fresh in your mind. Saving tens of thousands of dollars will get easier if you understand the value of owning a home. If you clip articles or save links on your computer about the real estate industry, you will be inspired to reach your goal and become a homeowner, especially as you read about how people love having control of their own home to decorate as they please and live in comfort being their own “landlord”.

I realize these aren't the typical money-saving tips like get your hair cut less frequently or stop going to the coffee shop every day. Those are important tips too, but really following through and accomplishing any goal requires will power, discipline, and solid reasons why the goal is worth achieving. When you don't own a home, sometimes it's hard to see why you should. That's when these steps will help you remember and accumulate your downpayment savings.

By Phoebe Chongchua

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Posted on 19. May 2012 06:00 by qjustinh

An overwhelming majority of home sales in April in the Greater Milwaukee marketplace sold for less than $200,000.

52.9% of homes in Milwaukee County sold for less than $100,000, the highest proportion of any of the counties in the metropolitan area. This price point mainly consists of investors buying up homes and converting them into rental properties in the hardest hit neighborhoods.

The largest price category of home sales in Waukesha County was between $100,000 and $299,999, where 68.1% sales occurred. Click here for details.

Almost one-third (32%) of residential listings took more than 120-days to sell, while over half of condo listings (51.9%) took more than 4-months. A majority of those residential units are in neighborhoods beset by foreclosures. Click here for details.

Financing of housing in April was dominated by conventional 30-year, fixed rate mortgages, representing 43.5% of the residential and 48.1% of the condo market. Buyers purchasing with cash were up 29.7% and 34.9% of the residential and condo markets, respectively. Click here for details.

Time on the market shows that just about half, 48.9%, of residential listings sold within 60-days. This reinforces reports from brokers that there are low levels of inventory in the market.

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Posted on 24. April 2012 05:55 by qjustinh

The number of U.S. home short sales surpassed foreclosure deals for the first time as banks became more agreeable to selling houses for less than the amount owed on their mortgages, according to Lender Processing Services Inc. (LPS) (LPS)

Short sales accounted for 23.9 percent of home purchases in January, the most recent month available, compared with 19.7 percent for sales of foreclosed homes, data compiled by the Jacksonville, Florida-based company show. A year earlier, 16.3 percent of transactions were short sales and 24.9 percent involved foreclosures.

“It’s a fairly recent phenomenon that short sales have been increasing,” Jonathon Weiner, a vice president in the applied analytics division of Lender Processing Services, said in a telephone interview. “Short sales should be the dominant way of disposing of assets” in distress, he said.

Lenders are catching up to short sales after being slow to provide the staffing and incentives necessary to complete the deals, Weiner said. The transactions typically fetch a higher price for banks than sales of homes that have gone through foreclosure. In January, foreclosed homes sold for an average of 29 percent less than comparable non-distressed properties, compared with a 23 percent discount for short sales, according to Lender Processing Services. The gap has narrowed as short sales become more common, Weiner said.

Distressed-Property Inventory
The growing percentage of short sales, which don’t require going through the drawn-out foreclosure process, is a sign that the U.S. is making progress in working through its inventory of distressed properties, Weiner said. The increase in short sales also may help values find a floor quicker.

“Our baseline scenario is that home prices will hit a bottom at the end of this year,” he said.

The Federal Housing Finance Agency ordered loan servicers to respond to all short-sale offers within 30 days, and approve or reject them within 60 days, in an effort to expedite a process that can take months longer than conventional home sales, the agency said in a statement today.

The FHFA, which oversees mortgage companies Fannie Mae and Freddie Mac, wants to improve the short-sale process “to prevent foreclosure, keep homes occupied and help maintain stable communities,” Edward J. DeMarco, the agency’s acting director, said in the statement. Freddie Mac and Fannie Mae completed 125,456 short sales last year, the most recent period for which figures are available.

Cash Incentives
Banks including Wells Fargo & Co. (WFC) (WFC) and JPMorgan Chase & Co. (JPM) (JPM) last year began giving cash inducements as high as $35,000 to selected homeowners who agreed to a short sale as a way of speeding up the process.

Bank of America Corp. (BAC) paid $19.9 million in the first two months of this year for 22,534 homeowners to relocate after short sales and deeds in lieu of foreclosure, when borrowers agree to return the property deed in exchange for debt forgiveness, the Charlotte, North Carolina-based company said March 16. Its short sales rose 31 percent in January and February from a year earlier.

Banks have struggled to reduce losses from delinquent mortgages. Almost 4.4 percent of homes with loans had received a notice of foreclosure sale at the end of 2011, the 11th consecutive quarter the rate has been higher than 4 percent, according to the Mortgage Bankers Association.

Falling Foreclosures
Foreclosure filings, including notices of defaults and bank repossessions, fell 16 percent in the first quarter from a year earlier after lenders under legal scrutiny slowed actions against delinquent homeowners, RealtyTrac Inc. reported April 12.

Lender Processing Services, a 2008 spinoff from title- insurance company Fidelity National Financial Inc. (FNF) (FNF), counts short sales by tallying mortgage and property transfer documents filed with county recorders, Weiner said.

Other reports haven’t shown the same magnitude of short- sale growth. The National Association of Realtors reported that 13 percent of transactions were short sales and 22 percent were foreclosures in January. In February, short sales increased to 14 percent and foreclosure-related transactions declined to 20 percent, the group said March 21.

Showing an ‘Uptick’
The Realtors collect their data from transactions on the Multiple Listing Service, a database of homes on the market, and a survey of about 3,000 members, said Walter Molony, a spokesman for the association.

“The February data is showing a bit of an uptick,” he said in an e-mail from Washington. “We’re hearing the process is going a bit more smoothly now, so that comes as no surprise.”

The U.S. Department of Housing and Urban Development reported a preliminary 19,600 short sales in January, compared with the Lender Processing Services tally of 48,721. An April 6 HUD report showed that the number of short sales rose 4.3 percent from a year earlier as the number of real estate owned, or REO, sales -- another name for foreclosure sales -- fell 39 percent.

By John Gittelsohn

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Posted on 24. April 2012 05:45 by qjustinh

Short sales are rising sharply, offering many struggling homeowners a better alternative to foreclosure in many of the nation's hardest hit states.

In short sale deals, the sale price of the home is less than what the seller owes. Often, the bank that holds the mortgage takes so long to approve the sale that the deal falls through. But in recent months, the pace of short sales has increased, a trend that should gain momentum, according to RealtyTrac.

In January, short sales rose 33% compared with 12 months earlier, the company reported.

During the month, 32 states saw year-over-year percentage increases in short sales. Even more encouraging, short sale deals outnumbered foreclosures in 12 states, including some of the hardest hit like California, Arizona and Florida.

January's numbers look to be just the beginning. "[W]e believe 2012 could be a record year for short sales," said Daren Blomquist, vice president at RealtyTrac.

Banks are showing signs of being more open and willing to approve the deals -- even if it means accepting less money. The average sales price for a short sale was $174,120 in January, down 4% from December and 10% year-over-year.

Typically, banks get about 20% less for a foreclosed home. Foreclosure can also take years to unload, during which expenses, like property taxes, insurance and other expenses, mount up.

Short sale process to speed up. One of the biggest roadblocks for short sales has been the time it takes to get deals approved. That time shrunk slightly during the first quarter -- to 306 days from 308 days the previous quarter -- but many deals still fall through because the buyer eventually walks away.

However, that could all change come June 1 when a set of new rules are put in place that will require lenders to make a decision about short sale requests within 60 days.

Earlier this week, the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae (FNMA, Fortune 500) and Freddie Mac (FRE), announced the new guidelines, which will also require lenders to review and respond to short sale requests within 30 days and provide weekly status updates to the borrower if the offer is still under review after that time.

Also helping to speed things along is the government's Home Affordable Foreclosure Alternative program, which launched in late 2009, according to Charlie Engel, a spokesman for RealtyTrac,
The program pays incentives to those who sell their home in a short sale rather than let it fall into foreclosure. 

By Les Christie

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Posted on 19. April 2012 06:05 by qjustinh

The Federal Housing Finance Agency laid out new rules aimed at speeding up the short sale process, a move that could keep many homes from falling into foreclosure.

In a short sale, the bank that holds the mortgage must agree to accept a price for the home that is less than what is owed. Even though short sales are considered a better alternative to foreclosure, banks often take so long to review and approve short sales that the deal falls apart and homes get repossessed.

"Delays in approving short sale requests remain a significant challenge for realtors and consumers and often results in canceled contracts and the property going into foreclosure," said Moe Veissi, president of the National Association of Realtors.

In California, which accounts for a disproportionate number of the nation's short sales, 60% of short sale offers failed to result in a closed sale last year, according to a California Association of Realtors member survey

The organization attributed much of the closing problems to extended lender response times. Some agents said that lenders even foreclosed on the homes before a short sale could close.

To help avoid the trend from continuing, the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, laid out rules that will require lenders to review and respond to short sale requests within 30 days and make a final decision within 60 days. The lender is also required to provide weekly status updates to the borrower if the offer is still under review after 30 days.

The new guidelines, which go into effect on June 1, can prove to be beneficial for all of the parties involved.

For lenders, it could mean saving a distressed property from falling into foreclosure, saving them tens of thousands of dollars in lost property value and costs.

The average foreclosure during the last three months of 2012 sold for $149,686, while short sales averaged $184,221, according to RealtyTrac. And foreclosures also pile up higher expenses with lenders paying for property taxes, heating and maintenance costs.

Home sellers, too, would be better off because they often will take just a one-time hit to their credit score for a short sale rather than the multiple delinquencies associated with a foreclosure.

And buyers get homes in better condition, typically because the sellers have been living there and keeping the homes in good condition.

By Les Christie

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Posted on 18. April 2012 05:51 by qjustinh

Several factors have increased the recent precedence of mothers-in-law suites across the nation. Namely, harsh economic conditions. As many families struggle to make ends meet they find that they are better equipped to hold on to their houses if multiple generations call them home.

Another prime factor in the mother-in-law suite game is the growing size of today's home. In the 1950's the average size home was just over 1,000 square feet. Home today are double that size, coming in at over 2,300 square feet. There's simply more room for multiple generations.

In many cultures and other countries it is commonplace to have multiple generations of one family living under the same roof. Assisted and senior living communities are all but unheard of. This hasn't been the case in the United States. In addition to a society that puts youth above all else, to the detriment of the old and wise, our mobile society means families are spread out across many cities, states, and regions.

Families choose to keep older loved ones close for a couple different reasons. Some are simply close-knit families that don't want to hide away an aged family member. Others, though, are having to make tough financial decision. Recent reports have indicated that while baby boomers may have seen decades of booming economy, their children and younger generations will make less. Where will the money for housing come from?

How will your family pay for rising healthcare and housing costs? Will there be funds to pay for nursing or assisted living communities? Should you consider investing in a home with a mother-in-law suite or renovating your own home to include one?

First, what is an mother-in-law suite? In general these are first floor master bedroom suites that include their own sitting area as well as handicap accessible bathrooms. Many of these suites even have their own kitchens. Some families have detached apartments on their property, while others have the suite in the main living area.

These suites can be a great solution to both the financial and emotional health of a family.

Having multiple generations move into one home, though, can present a myriad of "problems." In our independent society we are used to having autonomy in our own space. What sort of relationship do you have with your aged family member? Will your home still be your sanctuary or are you inviting a war zone into your own home?

How much care will this family member require? Some elderly remain mobile and practically self-sufficient well into their 90's or older. Others require more daily help that many assisted living communities provide. Are you able to help bathe, feed, and properly administer medication?

Next, what is the loved one expecting? They may be giving up living independently or living in a home they've spent their entire adult live in. This can be a tough time. Make sure to have open dialogue about what each party is expecting out of this arrangement.

In terms of home value be sure to consider resale of your home before making renovations. Don't renovate past your competition. Most buyers aren't looking for handicap accessible bathrooms or homes and might even see these as things that need replaced. This could severely affect your asking price.

On the flip side, having a mother-in-law suite is like having two master bedrooms or (if zoning allows) even a rentable apartment later on.

A good question to ask before making any major renovations is if this is a temporary situation or if your in-law will be living with you permanently. This may help dictate what sort of improvements you make to your home.

If you are in the market to buy a home with a mother-in-law suite then all the same rules for buying a home apply. Do you have at least 20 percent to put down? Do you have at least an 8-month emergency cash fund? The bottom line should always be if you can afford the home you are wanting to buy.

As our country continues to age the question of where aged family members will live will become a bigger and bigger issue. Be sure to consider all the pros and cons of a mother-in-law suite before deciding if this solution is right for you.

By Carla Hill

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Posted on 12. April 2012 04:49 by qjustinh

A federal-state program aimed at helping homeowners in states hardest hit by the mortgage crisis is falling far short of its goals, a federal watchdog said in a report released Thursday.

In the report, the Special Inspector General for the Troubled Asset Relief Program (TARP) said that just 3% of $7.6 billion available in the Hardest Hit Housing Markets program -- available for 18 states and the District of Columbia -- had been tapped as of Dec. 31.

The money has gone to help 30,640 homeowners, or about 7% of the 458,000 homeowners officials estimated would be helped by the end of the program in 2017, according to the watchdog.

More than 75% of the program funds has gone to prop up state unemployment programs that pay mortgages of the unemployed -- not efforts such as mortgage modifications or principal reductions that would force banks to take a hit, according to the report.

Christy Romero, the Special Inspector General for the Troubled Asset Relief Program, said the hardest hit fund has largely served to help the unemployed.

"It was supposed to be an innovative program intended to reach the unemployed and underwater homes," Romero said in an interview with CNNMoney. "It is important to reach the unemployed, but it's not reaching underwater homes like it was intended."

Treasury defended the hardest hit program. The program gives states the opportunity to "leverage their unique understanding of the conditions in their communities to create effective, locally tailored programs," Assistant Secretary for Financial Stability Timothy Massad said in a letter to Romero.

TARP is the $700 billion bailout program that Congress passed at the height of the financial crisis in the fall of 2008. In addition to keeping the big banks afloat, TARP gave money to programs to help struggling homeowners.

Other larger TARP-funded housing programs, including the Home Affordable Modification Program, have weathered criticism, especially from the special inspector general, for falling short in its goal of easing the national foreclosure crisis.

This new watchdog report focused on a different, smaller program, the Hardest Hit Housing Markets program. The hardest hit program was targeted to states with the largest numbers of homeowners drowning in negative equity and unemployment.

The money was supposed to give state housing officials incentives to come up with new and different ways to address the housing crisis in their states. But most states just used the money for programs that pay the mortgages, insurance and property taxes of the unemployed.

So far, the hardest hit program has kept up with mortgage payments for some 26,100 unemployed homeowners. These programs don't hit mortgage servicers or banks' bottom lines, Romero said.

When it comes to relieving housing woes, so far, only 436 homeowners in the program got the principal owed on their mortgage reduced. Another 170 homeowners got their second lien reduced.

A big problem, which the federal government faced with all its housing programs, was getting servicers on board, according to the watchdog. The states have far less leverage than the federal government in getting servicers to work with them on programs.

Treasury also took eight months to get the federal government-backed guarantors Freddie Mac and Fannie Mae to support the program, according to the SIGTARP report.

"Treasury failed to recognize the lack of bargaining power that states had for recruiting servicers," the report said.

Treasury's Massad disagreed with SIGTARP's conclusion, saying Treasury "actively and consistently engaged with servicers" and the government-backed housing guarantors in the earliest stage of the program.

Rep. Darrell Issa, a California Republican, asked the watchdog to review the hardest hit program.

By Jennifer Liberto

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A TARP program that aims to help the nation's most struggling homeowners is falling short,
said a special inspector general for the bailout program.

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Posted on 10. April 2012 04:31 by qjustinh

The Consumer Financial Protection Bureau announced Tuesday that it's considering new rules aimed at mortgage servicers to help protect consumers against "costly surprises."

The bureau's new rules will require servicers to issue mortgage statements that are more clear, as well as better disclosures about any fees or changes in a loan's interest rate.

"We want to make sure that at all times consumers know how much they owe, what they are paying, and how their payments are being applied," said Richard Cordray, director of the consumer bureau in a Tuesday speech.

This would be the federal government's first major move to crack down on the entire mortgage servicing industry, including big banks that service mortgages, since the housing bust and resulting financial crisis.

The new rules coincide with new standards set forth by a large settlement deal between states attorneys general and the five largest mortgage servicing banks. Those standards only impact the five largest banks and are aimed at halting robosigning and other improper foreclosure practices on homeowners who are late with payments.

The Consumer Financial Protection Bureau's rules would ask all servicers to ensure better transparency for all borrowers -- not just those whose loans are delinquent. The rules would take effect next January, according to the bureau.

The bureau is considering a rule to require all mortgage servicers to spell out more details in monthly statements such as a breakdown of mortgage payments by principal, interest and fees. Servicers would also have to itemize fees and charges, and warn about possible late fees.

Another rule would target interest rate changes. Servicers would have to explain how a new rate is calculated and when it will kick in, while warning of future interest rate changes and penalty fees on mortgages paid off early.

The rules would also tackle so called "force-placed" insurance, which is property insurance that the bank takes out for homeowners who either miss an insurance payment, allow their property insurance to lapse or just don't have as much insurance as the bank would like.

Among other things, the servicer would be required to ask homeowners for proof of insurance before charging for force-placed insurance.

Last week, New York Financial Services Superintendent Benjamin Lawsky said he is looking into whether forced-place policies cost more than they should.

By Jennifer Liberto

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Richard Cordray, director of the Consumer Financial Protection Bureau,
is set to announce new rules are under consideration for mortgage servicers.

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Posted on 7. April 2012 06:56 by qjustinh

Half a decade into the deepest U.S. housing crisis since the 1930s, many Americans are hoping the crisis is finally nearing its end. House sales are picking up across most of the country, the plunge in prices is slowing and attempts by lenders to claim back properties from struggling borrowers dropped by more than a third in 2011, hitting a four-year low.

But a painful part two of the slump looks set to unfold: Many more U.S. homeowners face the prospect of losing their homes this year as banks pick up the pace of foreclosures.

"We are right back where we were two years ago. I would put money on 2012 being a bigger year for foreclosures than 2010," said Mark Seifert, executive director of Empowering & Strengthening Ohio's People (ESOP), a counseling group with 10 offices in Ohio.

"Last year was an anomaly, and not in a good way," he said.

In 2011, the "robo-signing" scandal, in which foreclosure documents were signed without properly reviewing individual cases, prompted banks to hold back on new foreclosures pending a settlement.

Five major banks eventually struck that settlement with 49 U.S. states in February. Signs are growing the pace of foreclosures is picking up again, something housing experts predict will again weigh on home prices before any sustained recovery can occur.

Mortgage servicing provider Lender Processing Services reported in early March that U.S. foreclosure starts jumped 28 percent in January.

More conclusive national data is not yet available. But watchdog group, 4closurefraud.org which helped uncover the "robo-signing" scandal, says it has turned up evidence of a large rise in new foreclosures between March 1 and 24 by three big banks in Palm Beach County in Florida, one of the states hit hardest by the housing crash

Although foreclosure starts were 50 percent or more lower than for the same period in 2010, those begun by Deutsche Bank were up 47 percent from 2011. Those of Wells Fargo's rose 68 percent and Bank of America's, including BAC Home Loans Servicing, jumped nearly seven-fold -- 251 starts versus 37 in the same period in 2011. Bank of America said it does not comment on data provided by other sources. Wells Fargo and Deutsche Bank did not comment.

Housing experts say localized warning signs of a new wave of foreclosure are likely to be replicated across much of the United States.

Online foreclosure marketplace RealtyTrac estimated that while foreclosures dropped slightly nationwide in February from January and from February 2011, they rose in 21 states and jumped sharply in cities like Tampa (64 percent), Chicago (43 percent) and Miami (53 percent).

RealtyTrac CEO Brandon Moore said the "numbers point to a gradually rising foreclosure tide as some of the barriers that have been holding back foreclosures are removed."

One big difference to the early years of the housing crisis, which was dominated by Americans saddled with the most toxic subprime products -- with high interest rates where banks asked for no money down or no proof of income -- is that today it's mostly Americans with ordinary mortgages whose ability to meet payment have been hit by the hard economic times.

"The subprime stuff is long gone," said Michael Redman, founder of 4closurefraud.org. "Now the folks being affected are hardworking, everyday Americans struggling because of the economy."

"HARD TO CATCH UP"

Until December 2010, Daniel Burns, 52, had spent his working life in the trucking industry as a long-haul driver and manager. When daily loads at the small family business where he worked tailed off, he lost his job.

Unable to cover his mortgage, Burns received a grant from a government fund using money repaid from the 2008 bank bailout. That grant is due to expire in early 2013 and Burns is holding out on hopeful comments from his former employer that he might get his job back if the economy recovers.

"If things don't pick up, I will be out on the street," he said, staring from his living room window at two abandoned houses over the road in the middle-class Cleveland suburb of Garfield Heights, the noise of traffic from a nearby Interstate highway filling the street.

Underscoring the uncertainty of his situation, Burns' cell phone rings and a pre-recorded message announces that his unemployment benefits are due to be cut off in April.

A bit further up the shore of Lake Erie, Cristal Fell, who works night shifts entering data for a trucking company in Toledo, has fallen behind on her mortgage a second time because her ex-husband lost his job and her overtime was cut.

"Once you get behind it's so hard to catch up," she said.

Fell, a mother of four, hopes the economy will gather enough speed to help her avoid any risk of losing her home. Her ex-husband has found a new job and she is getting more overtime, so she hopes she can catch up on her mortgage by the fall.

Burns and Fell are the new face of the U.S. housing crisis: Middle class, suburban or rural with a conventional 30-year fixed mortgage at a reasonable interest rate, but unemployed or underemployed. Although the national unemployment rate has fallen to 8.3 percent from its peak of 10 percent in October 2009, nearly 13 million Americans remain jobless, meaning many are struggling to keep up with their mortgage payments.

Real estate company Zillow Inc says more than one in four American homeowners were "under water" or owed more than their homes were worth in the fourth quarter of 2011. The crisis has wiped out some $7 trillion in U.S. household wealth.

"We're seeing more people coming through who have good loans with reasonable interest rates," said Ed Jacob, executive director of non-profit lender Neighborhood Housing Services of Chicago Inc, which provides foreclosure counseling. "But in many households only one person works now instead of two, or they had their hours cut."

"The answer to the housing crisis now is job creation."

EARLY SIGNS OF UPTICK?

Zillow expects the resurgence in foreclosures this year, combined with excess inventory of unsold, bank-owned homes will contribute to a 3.7 percent national decline in prices before the market hits bottom in 2013 and stays there until 2016.

"The hangover from this crisis will far outlast the party of the boom years," said Zillow chief economist Stan Humphries.

Getting through the remaining foreclosures and dealing with the resulting flood of homes on the market in the wake of the bank settlement is a necessary part of the healing process for the U.S. housing market, he added.

According to leading broker dealer Amherst Securities, some 9.5 million homes are still at risk of default and in February it said it expected to see the uptick in foreclosures start to hit in March and April.

There is other evidence that many of the foreclosures that did not happen in 2011 will happen this year.

A January report by the Neighborhood Economic Development Advocacy Project in New York found that in the first half of 2011 the number of 90-day pre-foreclosure notices in New York City outnumbered court foreclosure actions by a ratio of 14 to one, indicating that while proceedings were initiated against many homeowners, they were left incomplete.

"Now the banks have a settlement, foreclosure numbers for 2012 are going to be high," said NEDAP co-director Josh Zinner.

A recent survey by the California Reinvestment Coalition, an umbrella group of nearly 300 non-profit groups in the state, of member agencies found 75 percent of respondents expected increased demand for their foreclosure prevention services in 2012 but more than a third had to scale back services because of funding cuts.

"Funding is a major concern given what our members expect for this year," said associate director Kevin Stein.

All this has non-profits intensifying calls for the Federal Housing Finance Agency to drop its opposition to allowing the government-backed mortgage giants Fannie Mae and Freddie Mac it regulates to reduce principal for underwater homeowners.

Principal reduction involves reducing the amount borrowers owe in order to make a loan modification affordable for struggling homeowners. Republicans and the FHFA oppose principal reduction because of the risk of "moral hazard"- that homeowners who do not need help will seek to abuse largesse and have their mortgages reduced too.

ESOP in Ohio engages in "hits" on Chase branches -- they say Chase is the least accommodating major bank when it comes to working with struggling homeowners -- where they try to hand letters to bank mangers calling on chief executive Jamie Dimon to lobby FHFA head Edward DeMarco for principal reductions. A Chase spokeswoman said the bank has made "extensive efforts" to work with homeowners, helping 775,000 borrowers stay in their homes since early 2009, avoiding foreclosure "more than twice as often as we have had to foreclose." Housing groups like ESOP maintain, as they have throughout the housing crisis, that unless the FHFA embraces widespread principal reduction, many more under water borrowers face losing their homes.

"Until banks engage in meaningful principal reduction as a matter of course," ESOP's Seifert said after a recent protest at a Chase branch in Cleveland, "this crisis will not end."

By Nick Carey

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