The Consumer Financial Protection Bureau this week will unveil a prototype for a new monthly mortgage statement for consumers designed to clearly show important information from their servicer.

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http://www.latimes.com/business/money/la-fi-mo-mortgage-statement-20120213,0,5870776.story

On Thursday, federal and state officials announced a $26 billion foreclosure settlement with five of the largest home lenders.  California is expected to receive approximately $12 billion in principal write-downs, including through short sales, over the next three years, according to the state attorney general’s office.

Making sense of the story

• The deal settles potential state charges about allegations of improper foreclosures based on robo-signing, seizures made without proper paperwork.
• The settlement sets up a federal monitor to oversee the process and try to prevent the challenges that tripped up many homeowners seeking help in earlier programs designed to address the housing crisis.
• Most of the relief will go to those who are underwater on their homes.  That relief will come over the course of the next three years, with banks having incentives to provide most of the relief in the next 12 months.
• At least $17 billion will go to reducing the principal owed by homeowners who are underwater and behind on their mortgages.
• Up to 750,000 other underwater homeowners who are current on their mortgages will be able to refinance their current loans at lower rates.  They will not receive a reduction in principal, but with mortgage rates near record lows, they could receive substantial savings on their monthly payments.
• Approximately $1.5 billion will go to homeowners who had their homes foreclosed upon between Jan. 1, 2008 and Dec. 31, 2011, and who meet other criteria.  They will receive up to $2,000 each.
• The five mortgage servicers that are parties to the settlement include Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, and Ally Financial (formerly GMAC).

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http://money.cnn.com/2012/02/09/news/economy/mortgage_settlement/index.htm?hpt=hp_t1

C.A.R. understands that some cities across the country may benefit from the bulk sale of REO properties, however, the Association feels that housing regulators have not appropriately analyzed proposed pilot cities.  Los Angeles and the Southern California region have been named as a potential pilot program location. However, these areas are experiencing an inventory shortage and many homes for sale, especially distressed properties, are receiving multiple bids.  Removing REO inventory through a bulk sale and rental program would hurt these communities.  In addition, taxpayers will lose because these REOs will be sold for less money in bulk sale than if sold as individual units.

While the nation continues to face its most difficult housing crisis since the Great Depression, C.A.R. hopes FHFA and HUD will withhold or delay the release of their REO bulk sale initiative in California’s housing market.

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The American Guild of Appraisers is digging into a federal rule it says has driven down the quality of home valuations, negatively affecting appraiser wages along with borrowers trying to get mortgages or refinances.
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http://www.utsandiego.com/news/2012/jan/26/appraisers-say-feds-rule-has-hurt-their-pay-homeow/

Calif. Pending Home Sales Index: December 2011: 91.6, an increase from the revised 82.5 recorded in December 2010

Calif. Traditional Housing Affordability Index: Third quarter 2011: 52 percent (Source: C.A.R.)

Mortgage rates: Week ending 1/26/2012 30-yr. fixed: 3.98% fees/points: 0.7% 15-yr. fixed: 3.24 fees/points: 0.8% 1-yr. adjustable: 2.74% Fees/points: 0.6% (Source: Freddie Mac)

An estimated 611,900 housing units were authorized by building permits in 2011. This is 1.2 percent above the 2010 figure of 604,600.  Approximately 606,900 housing units were started in 2011. This is 3.4 percent above the 2010 figure of 586,900.

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Interest rates are the lowest in decades, enticing many borrowers to shop for a loan.  Mortgage lenders adjust their rates based on perceptions of risk, so unless the borrower can show they’re a low-risk individual, the borrower is unlikely to qualify for a rate that matches those seen in recent advertisements and headlines.

Making sense of the story

• The rates quoted are averages drawn from a variety of financial institutions, and lenders use varied approaches to set them.  Consumers who want to try for the lowest rates available need to consider basic factors, such as credit score, points, property type, down payment, and length of the loan.
• Credit score: The ideal borrower has a FICO score of 740 or higher, which puts the individual in the best place for pricing.
• Points: The lowest rates usually are decreased by paying a fee called a point, or 1 percent of the loan amount.  Borrowers may buy points in order to get the best rates at many banks.  Points might make sense depending on the borrower’s financial situation and how long they expect to stay in the home.
• Property type: Borrowers planning to buy a duplex or a four-unit build likely will have a higher interest rate.  Condominiums also may have a rate premium rate, especially if they are newer or the down payment is less than 25 percent.  Lenders also may charge more if the borrower is not planning to live in the home.
• Down payment: Borrowers who put down at least 25 percent are more likely to obtain the best interest rates.  Lenders offer different breaks on rates if equity in the property is higher, so borrowers should ask what is available.
• Length of loan: Borrowers who are likely to move in a few years may want to look into an adjustable-rate loan with a low interest rate fixed for a few years, and adjusted afterword.

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http://www.nytimes.com/2012/01/15/realestate/mortgages-shopping-for-the-best-rates.html?_r=1&ref=realestate

The number of loan servicers taking part in a state mortgage-aid program continues to grow roughly one year after its launch.  The Keep Your Home California program now has 55 participating mortgage servicers, up from 21 in June.
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http://utsandiego.com/news/2012/jan/10/more-lenders-added-calif-mortgage-aid-program/

Numerous people are receiving unsolicited email informing them that a $9,390.55 IRS tax refund is due to them if they complete a tax refund request form. The email code will be forged to appear as if it originated from a trusted source, usually the IRS or an IRS tax preparer, but viewing the “message header” or “message source” will reveal its origin to be something else, and the link will not lead to a trusted domain, but one controlled by identity theft criminals.

If you file a tax return and a refund is due, you will automatically receive your refund. You will never be contacted by the IRS, and there is no tax refund request form. Never disclose personal information to any unsolicited inquiry, as compelling as the story may be.

If you have questions or concerns about any IRS tax refund you may have due, you should access the official IRS “Where’s My Refund” online application at the following destination: http://www.irs.gov/individuals/article/0,,id=96596,00.html.