The Financial Crimes Enforcement Network has released its full year 2011 update of mortgage loan fraud reported suspicious activity reports (MLF SARs), which shows financial institutions submitted 92,028 MLF SARs last year, a 31 percent increase compared with the 70,472 submitted in 2010. The increase can be primarily attributed to mortgage repurchase demands.
Financial institutions submitted 17,050 MLF SARs in the 2011 fourth quarter, a 9 percent decrease in filings compared with the same period in 2010 when financial institutions filed 18,759 MLF SARs. While too soon to call a trend, the fourth quarter of 2011 was the first time since the fourth quarter of 2010, when filings of MLF SARs had fallen from the previous year. FinCEN also updated its SAR data sets used in the report.
CNNMoney
The Federal Housing Finance Agency will decide this month whether Fannie Mae and Freddie Mac should allow write downs on the balances of borrowers who owe more than their homes are worth.
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http://money.cnn.com/2012/04/09/news/economy/mortgages-principal-reduction/index.htm?iid=HP_LN
New York Times
Banks often approve real estate transactions that do nothing to prevent foreclosure. But beginning this month, they can count such activities as part of their new commitment to help people stay in their homes.
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http://www.nytimes.com/2012/03/28/business/foreclosure-deal-gives-banks-credit-for-routine-activities.html?_r=1&ref=realestate
Calif. median home price: January 2012: $268,280 (Source: C.A.R.)
Calif. highest median home price by region/county January 2012: Marin, $694,440 (Source: C.A.R.)
Calif. lowest median home price by region/county January 2012: Tehama, $110,000 (Source: C.A.R.)
Calif. Pending Home Sales Index: January 2012: 102.4, an increase from the revised 93.1 recorded in January 2011
Calif. Traditional Housing Affordability Index: Fourth quarter 2011: 55 percent (Source: C.A.R.)
Mortgage rates: Week ending 3/8/2012 30-yr. fixed: 3.88% fees/points: 0.8% 15-yr. fixed: 3.13 fees/points: 0.8% 1-yr. adjustable: 2.73% Fees/points: 0.6% (Source: Freddie Mac)
Sales to third parties, typically investors, rose significantly in January, according to a report by ForeclosureRadar. California saw the most activity, with investors purchasing 3,964 properties for $766.2 million. This is the fourth largest month on record in California, and the busiest since March of 2011.
Despite what appears to be significant percentage increases in foreclosure starts in California, Nevada and Washington, these increases barely offset the declines seen over the holidays. Compared with January one year ago, foreclosure starts are significantly lower.
“January’s numbers should put to rest any notion that we will see a wave of foreclosures in 2012, at least in the western states that we cover,” stated Sean O’Toole, founder and CEO of ForeclosureRadar. “Foreclosure Starts remain near record low levels, significantly lower than a year ago, when many banks still had self-imposed moratoriums in place due to the robo-signing scandal. Add to that a foreclosure timeframe of more than 8 months, and there is little chance of a wave this year even if all the banks started the foreclosure process en masse tomorrow.”
In January, foreclosure starts in California rose 15.5 percent and foreclosure sales increased 14.6 percent.
San Diego Union-Tribune
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/
Los Angeles Times
The mortgage market told a sad story throughout 2011: Record low rates, but few people taking advantage of them to buy homes. The likely scenario in the new year, according to many analysts, is more of the same.
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http://www.latimes.com/business/la-fi-mortgage-rates-20120103,0,2240865.story
This week, NAR issued revised estimates for existing-home sales going back five years, saying the formula it had been using to adjust the sales data it collects from multiple listing services had drifted and was overestimating sales.
The benchmark revisions to existing-home sales data show fewer homes changed hands than NAR had previously reported. However, the revisions show little change in previously reported trends in home sales, and no change in median home price, NAR said.
Also, because NAR is making a comparable downward adjustment to unsold inventory, the revisions won’t change the months’ supply of homes for sale — a critical measure of the balance between supply and demand. Many housing analysts consider a six-month supply of homes for sale to be a healthy balance between supply and demand.
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Faced with finicky lenders, would-be home buyers are increasingly turning to family members, friends, and even strangers they meet online. While this is understandable, given the abundant bargains on the market, they also present significant risks.
Making sense of the story
- So-called peer-to-peer lending sites, such as Prosper and Lending Club, say demand for home-related financing is on the rise. In September, Weemba, a social-networking site, launched a platform to connect lenders directly with prospective home buyers and other borrowers.
- Despite historically low mortgage rates, traditional lenders remain reluctant to provide mortgages to anyone with less than stellar credit. And, in certain markets, lenders are requiring down payments of more than 20 percent of the home’s purchase price.
- Borrowers taking loans from family members – so-called intrafamily loans – save on interest since family members are likely to charge less than the banks. Additionally, parent lenders can earn a higher return from their child’s interest payments than they would on a certificate of deposit or money-market fund. Under federal law, on a loan of more than nine years, parents must charge at least roughly 2.8 percent, in most cases.
- Consumers who prefer to look for loans beyond the family can apply at peer-to-peer lending sites. If approved for a loan after a screening by the companies, applicants may then receive money from investors.
- However, these alternative routes to financing can be expensive for borrowers. Rates at Lending Club run from around 7 percent to 28 percent. At Prosper, rates run roughly 7 percent to 35 percent. The companies say these rates, which are fixed, are higher than traditional mortgage rates in part because their loans are unsecured.
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http://online.wsj.com/article/SB10001424052970203518404577094371355763672.html?mod=WSJ_RealEstate_LeftTopNews
One out of three builders reported losing signed sales contracts during the preceding six months because appraisals on their homes were less than the contract sales price, according to a survey by the National Association of Home Builders (NAHB).
Builders claim that due to faulty appraisal practices, brand new homes with upgrades get compared to distressed properties that have been sitting vacant and in disrepair. The result, in many cases, has been that the new house gets appraised at less than the cost of construction.
According to the NAHB survey, 60 percent of respondents reported they were experiencing appraisals coming in below their contract sales price. Of those reporting that they had encountered this problem, 53 percent said the appraisal amount was actually less than the cost of building the home.
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