Guess What Got Lost in the Loan Pool?

Bankruptcy judges are finding that institutions claiming to hold notes backing a mortgage often cannot prove it.

Source: Guess What Got Lost in the Loan Pool?

Economic Forecasting And Astrology

Probably the most succinct to the point explanation of the difference between economic forecasting and astrology was summed up when John Kenneth Galbraith said:
“The only function of economic forecasting is to make astrology look respectable.”
Since, of late, I’ve been propounding one be an expert in one’s local economics if one wants to be successful [...]

This Article is Copyright © 2004-2008 BiggerPockets, Inc. All Rights Reserved.

Economic Forecasting And Astrology

Source: Economic Forecasting And Astrology

25 People to Blame for the Financial Crisis

25 People to Blame for the Financial Crisis
TIME Magazine

Who’s at fault? The good intentions, bad managers and greed behind the financial meltdown is exposed by TIME Magazine. View the list.

HUD Secretary, Congress Debate Foreclosure Plans
Washington Post

Against a backdrop of record-low new home sales and ballooning losses from foreclosures, Housing Secretary Shaun Donovan told lawmakers Thursday that the lending industry is set to launch the Obama administration's $75 billion foreclosure prevention program next week.

Final details will be released Wednesday, but Donovan said the plan will allow borrowers with big debts from car loans, credit cards and unaffordable mortgages to have their home loans modified to lower the monthly payment, even if they are not in default.

House of Cards: The Faces Behind Foreclosures
TIME Magazine

In the one-strike economy, it's not just the subprime suckers going down. Trouble stretches beyond the province of liar loans, condo-flipping and the collateralized debt obligations that no one fully understands. A hard rain now falls on the just as well as the unjust. Consumers have stopped spending, factories have stopped operating, employers have stopped hiring — and home values continue to fall. For millions of people, the margin between getting by and getting buried is becoming as thin and as bloody as a razor blade.

Citigroup is Bailed Out Yet Again by the American Government
The Economist

In a matter of weeks the nationalization of America’s banks has gone from taboo to talking point. Politicians on both left and right accept that America’s sickest banks may need to be taken over and restructured and their good parts returned to private ownership. On Friday February 27th Citigroup and the Treasury reached a deal that took a big step towards what would in essence be partial nationalization. Through conversions of preferred stock the government will end up with up to 36% of Citigroup, though the final figure will depend on how many preferred shares private holders agree to swap.

Calif. Offers Tax Break for New-home Buyers
San Francisco Chronicle

California is offering a big carrot to people who buy brand-new homes in coming weeks: a $10,000 state tax credit for new-home buyers who close escrow starting Sunday.

With the housing sector in near-collapse and construction starts at record lows, home builders hope the credit helps them clear out inventory and kick-start their beleaguered industry.

Source: 25 People to Blame for the Financial Crisis

Hotel Industry Ravaged by Fear Stoked by Government, Pleads to Congress

I just found the advertisement above while reading a political news/opinion website, and thought it was important to share. Read the letter and make your own judgment. I know that there is a feeling that Wall Street is the enemy, and that public companies need to pinch pennies, but as the letter says, the [...]

This Article is Copyright © 2004-2008 BiggerPockets, Inc. All Rights Reserved.

Hotel Industry Ravaged by Fear Stoked by Government, Pleads to Congress

Source: Hotel Industry Ravaged by Fear Stoked by Government, Pleads to Congress

Don’t Let Judges Fix Loans

A housing plan that allows people to rework the terms of their mortgages in court is flawed it will take too long, debtors will be disappointed and it could worsen economic uncertainty.

Source: Don’t Let Judges Fix Loans

Bankruptcy Law May Be Modified

Bankruptcy Law May Be Modified
Chicago Tribune

Congress is poised to give bankruptcy judges more power to modify primary home mortgages in an attempt to halt the foreclosure crisis, a move Democrats and housing advocates have been pushing for two years in the face of stiff opposition from Republicans and the mortgage industry.

The House of Representatives is expected to pass the legislation Thursday.

The measure would temporarily remove an oddity in bankruptcy law: Judges can reduce or cram down the principle on a vacation home, car, or boat, but they cannot do it to a mortgage for a primary residence.

CA Legislature Passes 90-Day Foreclosure Moratorium
Housing Wire

The California Legislature, as part of the recently-passed budget package, approved Friday, legislation SB2X-7 and AB2X-7, which provide for a 90-day foreclosure moratorium.

The bill, introduced by Sen. Ellen Corbet (D-San Leandro), covers owner-occupied homes where the first loan was recorded between Jan. 1, 2003 and Jan. 1, 2008. “Many people in our communities are facing the terrible specter of foreclosure,” Corbett said, according to the San Francisco Chronicle. “I’m just trying to find a way to help.”

Realogy Posts $1.9-billion Annual Loss
Los Angeles Times

Buyout firm Apollo Management agreed to invest as much as $150 million in Realogy Corp. after the real estate broker reported a 2008 loss of $1.91 billion.

Realogy, owner of the Century 21 and Coldwell Banker brands, said that Apollo would provide the "equity infusion" only if necessary and that it might not need the full amount. Realogy said it remained in compliance with debt agreements, according to a regulatory filing Wednesday.

New-Home Sales in U.S. Plunge to Record-Low — $309,000
Bloomberg

Sales of new homes in the U.S. plunged in January to a record low as soaring unemployment and mounting foreclosures drove buyers away.

Purchases dropped 10 percent to an annual pace of 309,000, the lowest level since data began in 1963, the Commerce Department said today in Washington. The median price decreased 13.5 percent, the most in almost four decades.

Moody’s May Downgrade More Subprime-Mortgage Debt
Bloomberg

Moody's Investors Service raised its loss estimates for $680 billion in U.S. subprime residential mortgage-backed securities issued between 2005 and 2007 and put them on risk for possible downgrade, the latest hit to the ailing financial system.

The ratings agency also said by the end of the year, one-third of subprime borrowers who are currently paying on their mortgages will become delinquent and eventually default, representing 19% of outstanding loans.

Source: Bankruptcy Law May Be Modified

I Quit

I Quit.
I quit listening to the media and how bad things are.
I quit believing there is not enough money.
I quit believing in a power outside of me.
If you focus on “no money, no money, no money,” Guess what you get? The answer seems pretty simple when asked like that! No Money!

We need [...]

This Article is Copyright © 2004-2008 BiggerPockets, Inc. All Rights Reserved.

I Quit

Source: I Quit

Mr. Obama’s Foreclosure Plan

President Obama’s anti-foreclosure plan does not do enough to help the some 13.6 million homeowners who have mortgage balances higher than the value of their properties.

Source: Mr. Obama’s Foreclosure Plan

HOPE NOW: Deal or No Deal?

Today's MBA Newslink featured a story titled HOPE NOW Enlists Celebrities to Target At-Risk Homeowners. The story describes how this new program, called Bringing Hope Home, is intended to raise awareness of HOPE NOW by featuring celebrities such as Queen Latifah, Wyclef Jean and NYC radio personality Angie Martinez in educational videos, radio spots and direct mail campaigns which will encourage distressed homeowners to contact their loan servicer and seek foreclosure prevention counseling.

While I salute the effort - anything that can help a homeowner avoid foreclosure is worth trying - it strikes me that they've picked the wrong celebrities. We really should be seeing Howie Mandel, or, for older homeowners, Monte Hall and Bob Barker. In fact, maybe HOPE NOW should consider putting someone like Howie, Monty or Bob in charge of the entire loan modification program, because they have a much better track record of making a deal work out.

HOPE NOW claims to have prevented 2.2 million foreclosures between July 2007 and November 2008, and to have modified 950,000 loans during that period. Unfortunately, according to the U.S. Comptroller's Office, some 53% of borrowers with loans modified in the first three months of 2008 and 51% of those with loans modified in the second quarter could not keep up with payments within six months. And, as anyone familiar with RealtyTrac U.S. Foreclosure Report already knows, foreclosure activity spiked by 81% from 2007 to 2008, when over 2.4 million households received at least one foreclosure notice. Obviously, the loan modifications, loan workouts and other deals being made with at-risk borrowers aren't working as planned. In fact, many borrowers complain that their monthly payments have actually gone UP after the loan modification process, which defies all logic, but is perfectly in synch with the level of dysfunction in the financial markets today. Other borrowers complain that they've tried desperately to reach their loan servicer to discuss short sale offers or re-work loan terms only to give up in frustration after either not being able to get in touch with anyone, or having their pleas fall on deaf ears.

Using celebrities to generate awareness and stimulate participation in the program is a good idea. But getting the deals right - modifying loans in a way that makes the monthly payments affordable and the principle balances more in line with current market prices - is what HOPE NOW member organizations really need to focus on if the initiative is going to succeed. Getting the deals right mean keeping borrowers in homes, keeping distressed properties out of inventory, and helping the financial industries clean up their balance sheets. Bad deals result in more foreclosures, more carnage in the real estate market and more of the economic devastation we're currently wading through.

I'll trade Queen Latifah for the loan restructuring program behind door number two, Monty. Deal, or no deal?

Source: HOPE NOW: Deal or No Deal?

Obama’s Not-State of the Union Speech; Comes As Home Prices Plunge; Consumer Confidence Falls Off Cliff

It was a State of the Union speech–even though it wasn’t a State of the Union speech.

It just looked, sounded and felt like a State of the Union speech. That’s probably because it was in all but name only a State of the Union speech, even though the Constitution requires a State of the Union [...]

This Article is Copyright © 2004-2008 BiggerPockets, Inc. All Rights Reserved.

Obama’s Not-State of the Union Speech; Comes As Home Prices Plunge; Consumer Confidence Falls Off Cliff

Source: Obama’s Not-State of the Union Speech; Comes As Home Prices Plunge; Consumer Confidence Falls Off Cliff