Letter From the Attorney Generals Office - Housing Specialist

Dear Rebecca: 

Thank you for contacting the Attorney General’s Office about the National Mortgage Servicing Settlement. Announced on February 9, 2012, the Settlement involves the five largest mortgage servicers in the country and includes 49 state attorneys general, including Idaho, the U.S. Department of Justice, and the U.S. Department of Housing and Urban Department.

The loan servicers—Ally/GMAC, Bank of America, Citi, JPMorgan Chase, and Wells Fargo—service approximately 60% of the national home mortgage market and hold for investment (HFI) approximately 20% of the nation’s mortgages. The Settlement provides $25 billion in financial relief to homeowners with HFI loans through restitution, mortgage modifications, reduced interest rates, principal reductions, deficiency judgment waivers, and other benefits.

The Settlement resolves state and federal allegations that the five servicers signed foreclosure-related documents outside the presence of a notary public without knowing whether the facts contained in the documents were accurate. The Settlement does not release the servicers from criminal liability, affect an individual’s private claims, or prevent federal or state regulators from investigating cases related to mortgage-backed securities or the Mortgage Electronic Registration System (MERS).

The following is a brief summary of the Settlement’s key provisions:

·         It aids homeowners needing loan modifications, including first and second lien principal reduction. The servicers are required to work off $17 billion in principal reductions and other forms of loan modification relief nationwide and more than $74 million in Idaho.

State attorneys general anticipate the settlement’s requirement for principal reduction will show other lenders that principal reduction is one effective tool in combating foreclosure and that it will not lead to widespread defaults by borrowers who really can afford to pay.

·         It aids borrowers who are current on their loans, but who also are underwater.  Borrowers will be able to refinance at today’s historically low interest rates.

·         Servicers will provide $3 billion in refinancing relief nationwide with $15 million going to Idaho’s homeowners.

·         It provides payments to borrowers who lost their homes to foreclosure with no requirement to prove financial harm and without having to release private claims against the servicers or the right to participate in the OCC review process. $1.5 billion will be distributed nationwide to 750,000 borrowers. In Idaho, approximately 5,000 eligible borrowers will receive almost $10 million in restitution.

·         It provides nationwide reforms to servicing standards. These servicing standards require single point of contact, adequate staffing levels and training, better communication with borrowers, appropriate standards for executing documents in foreclosure cases and prohibits improper fees and dual-track foreclosures.

·         Attorneys general will have oversight of national banks for the first time.  The servicers must provide regular compliance reports to an independent monitor.

·         The servicers are subject to penalties for non-compliance with the settlement, including missed deadlines.

Summary of the Settlement Implementation Process

During the next few months, the states, federal regulators, and servicers will select an Administrator to oversee the Settlement’s implementation. The Settlement Administrator, in association with the mortgage servicers, will work to identify Idahoans who are eligible for the various programs, including the restitution payments, principal reductions, and loan modifications.

Within the next nine months, many eligible borrowers will receive letters from the Settlement Administrator explaining what they need to do to obtain their benefit. Other eligible borrowers will hear directly from their loan servicers.

It is important for borrowers to be patient during the settlement process. Because the Settlement will be implemented over the period of 3 years, you will not know immediately if you are eligible for relief. A Settlement of this magnitude takes a lot of time.

 

For additional information about the Settlement, please check the Attorney General’s website at www.ag.idaho.gov on a regular basis. You may also find the link to the National Mortgage Servicing Settlement frequently asked questions helpful at http://www.ag.idaho.gov/consumerProtection/mortgageSettlement/FAQs.html.  We will provide updates as additional information becomes available. The Attorney General’s website also provides a substantial amount of information about Idaho’s foreclosure process, how to avoid foreclosure, where to find a housing counselor, and how to avoid mortgage fraud. You can also visit the National Settlement website at www.nationalforeclosuresettlement.com for current information about the Settlement.

If you have a complaint against a mortgage servicer—not just one included in the settlement—you may submit a complaint form to us, and we will review it for submission to our informal dispute resolution program. Complaint forms are available to download from our website or by calling our office at (208) 334-2424.

I hope this information is helpful to you.

Thank you,

KATHY REAM

Housing Specialist

February Market Report…It Just Gets Better And Better.

Sales in February 2012 were 439 in Ada County, an increase of 13.4% over February 2011. This is the strongest February sales we’ve had since 2007.  Year-to-date sales are 829; 13% over the first two months of 2011.

Historically, February sales outpace January by an average of 14%. February 2012 sales increased by 14% over January 2012.

Nationally we know that one job is create for every two homes sold.  So far in 2012 we have helped to create 400 jobs.  We also know that for each homes sold there is a $60,000 cash infusion to the community; based on YTD sales we have added $50Million to our valley’s economy so far this year.

Of our total sales in February… 44% were distressed….down 9% from January 2012. In February 2011, 59% of our sales were distressed. The 9% decrease in February returns us to the average that we’d been seeing over the last 8 months.   In July we were down to 42% overall.

Pending sales at the end of February were 975; an increase of 14% from the end of January. In general pending sales increase in February compared to January; and should continue to increase all the way through April or May. The percentage of pending sales in distress decreased 6% from January, totaling 41% overall. We are now at ten consecutive months below 50%.

At the end of February, we had 14% more sales pending than at the end of January 2011.

February median home price was 158,000; up 5.6% from February 2011; and up 14% from January 2012.

New Homes median price for January was $209,000; a decrease of 1% from January 2011.

The number of houses available continues to decrease. At the end of February our total active inventory was 1,932 homes. This is down 1% from December and 27% less than last year at this time.

At the same time, the percentage of distressed active inventory dipped 1% to 34%. We have been hovering between 33% and 36% since May. We remain well below the 40% levels set last spring….when we were on the increase.

In Ada County we have 4.4 months of inventory on hand.

The price category in shortest supply is <$119,000 with 2.5 months. In the range of $120,000 to $159,999 we have 3.7 months. All price points up to $200,000 have less than 5 months supply. We have benefited all year from inventory levels much lower than national average. Now, however, we are starting to see some slowdown in sales as the inventory continues to fall. Multiple offers are much more prevalent than any time since 2005.

Based on February sold data, our most desirable price point is <$120,000 at 28% of all sales.  The next largest price point sold is $120,000 to $160,000 which accounted for 23% of total sales.  The biggest increase was in sales between $200,000 and $250,000; which were up 100% from January 2012 to 14% overall.

There is no longer any doubt that, in Ada County, we are in full recovery mode.

The challenge to our continued recovery is available product.

There continues to be broad speculation on the impact of REO properties coming onto our market in a way that would upset our continued recovery.   The level of consumer demand, and the nearly bare cupboards of home inventory suggest that we will be able to withstand the impact.

Helping Responsible Homeowners And Healing The Market – Part 3

In everybody’s book, the cost of this program is in the billions.  Who’s going to write that check?

Today; Part Three -  ”How the heck are we going to pay for this?”

Refinancing Plan Will Be Fully Paid For By a Portion of Fee on Largest Financial Institutions: The Administration estimates the cost of its refinancing plan will be in the range of $5 to $10 billion, depending on exact parameters and take-up. This cost will be fully offset by using a portion of the President’s proposed Financial Crisis Responsibility Fee, which imposes a fee on the largest financial institutions based on their size and the riskiness of their activities – ensuring that the program does not add a dime to the deficit

Fully Streamlining Refinancing for All GSE Borrowers: The Administration has worked with the FHFA to streamline the GSEs’ refinancing program for all responsible, current GSE borrowers. The FHFA has made important progress to-date, including eliminating the restriction on allowing deeply underwater borrowers to access refinancing, lowering fees associated with refinancing, and making it easier to access refinancing with lower closing costs.

To build on this progress, the Administration is calling on Congress to enact additional changes that will benefit homeowners and save taxpayers money by reducing the number of defaults on GSE loans. We believe these steps are within the existing authority of the FHFA. However, to date, the GSEs have not acted, so the Administration is calling on Congress to do what is in the taxpayer’s interest, by:

a. Eliminating appraisal costs for all borrowers: Borrowers who happen to live in communities without a significant number of recent home sales often have to get a manual appraisal to determine whether they are eligible for refinancing into a GSE guaranteed loan, even under the HARP program. Under the Administration’s proposal, the GSEs would be directed to use mark-to-market accounting or other alternatives to manual appraisals for any loans for which the loan-to-value cannot be determined with the GSE’s Automated Valuation Model. This will eliminate a significant barrier that will reduce cost and time for borrowers and lenders alike.

b. Increasing competition so borrowers get the best possible deal: Today, lenders looking to compete with the current servicer of a borrower’s loan for that borrower’s refinancing business continue to face barriers to participating in HARP. This lack of competition means higher prices and less favorable terms for the borrower. The President’s legislative plan would direct the GSEs to require the same streamlined underwriting for new servicers as they do for current servicers, leveling the playing field and unlocking competition between banks for borrowers’ business.

c. Extending streamlined refinancing for all GSE borrowers: The President’s plan would extend these steps to streamline refinancing for homeowners to all GSE borrowers. Those who have significant equity in their home – and thus present less credit risk – should benefit fully from all streamlining, including lower fees and fewer barriers. This will allow more borrowers to take advantage of a program that provides streamlined, low-cost access to today’s low interest rates – and make it easier and more automatic for servicers to market and promote this program for all GSE borrowers.

Giving Borrowers the Chance to Rebuild Equity in their Homes Through Refinancing: All underwater borrowers who decide to participate in either HARP or the refinancing program through the FHA outlined above will have a choice: they can take the benefit of the reduced interest rate in the form of lower monthly payments, or they can apply that savings to rebuilding equity in their homes. The latter course, when combined with a shorter loan term of 20 years, will give the majority of underwater borrowers the chance to get back above water within five years, or less.

To encourage borrowers to make the decision to rebuild equity in their homes, we are proposing that the legislation provide for the GSEs and FHA to cover the closing costs of borrowers who chose this option – a benefit averaging about $3,000 per homeowner. To be eligible, a participant in either program must agree to refinance into a loan with a no more than 20 year term with monthly payments roughly equal to those they make under their current loan. For those who agree to these terms, the lender will receive payment for all closing costs directly from the GSEs or the FHA, depending on the entity involved.

EXAMPLE: How Rebuilding Equity Can Benefit a Borrower

 A borrower has a 6.5 percent $214,000 30-year mortgage originated in 2006. It now has an outstanding balance of $200,000, but the house is worth $160,000 (a loan-to-value ratio of 125). The monthly payment on this mortgage is $1,350.

 While this borrower is responsibly paying her monthly mortgage, she is locked out of refinancing.

 By refinancing into a 4.25 percent 30-year mortgage loan, this borrower will reduce her monthly payment by $370. However, after five years her mortgage balance will remain at $182,000.

 Under the rebuilding equity program, the borrower would refinance into a 20-year mortgage at 3.75 percent and commit her monthly savings to paying down principal. After five years, her mortgage balance would decline to $152,000, bringing the borrower above water.

 If the borrower took this option, the GSEs or FHA would also cover her closing costs –potentially saving her about $3,000.

Streamlined Refinancing for Rural America: The Agriculture Department, which supports mortgage financing for thousands of rural families a year, is taking steps to further streamline its USDA-to-USDA refinancing program. This program is designed to provide those who currently have loans insured by the Department of Agriculture with a low-cost, streamlined process for refinancing into today’s low rates. The Administration is announcing that the Agriculture Department will further streamline this program by eliminating the requirement for a new appraisal, a new credit report and other documentation normally required in a refinancing. To be eligible, a borrower need only demonstrate that he or she has been current on their loan.

Streamlined Refinancing for FHA Borrowers: Like the Agriculture Department, the Federal Housing Authority is taking steps to make it easier for borrowers with loans insured by their agency to obtain access to low-cost, streamlined refinancing. The current FHA-to-FHA streamlined refinance program allows FHA borrowers who are current on their mortgage to refinance into a new FHA-insured loan at today’s lower interest rates without requiring a full re-underwrite of the loan, thereby providing a simple way for borrowers to reduce their mortgage payments.

However, some borrowers who would be eligible for low-cost refinancing through this program are being denied by lenders reticent to make loans that may compromise their status as FHA-approved lenders. To resolve this issue, the FHA is removing these loans from their “Compare Ratio”, the process by which the performance of these lenders is reviewed. This will open the program up to many more families with FHA-insured loans.

Charles is a Happy Guy!

Charles Barkell is one HAPPY Guy.  He just purchased a 2000+ square foot home with a 1000 square foot shop in Boise.  For $85,000.  I think he got a best buy in Boise, Idaho.   Yep he sure did, with my help!   It was a bank owned property and it involved a lot of hair pulling, nail biting agony on my part to get the job done.  They make the art of crossing the t's and dotting the I's brutal. But did I mention I got the job done?  Yup, I did.  Cathy Stringer at Fidelity Title was awesome to work with, good job Cathy.   And congratulations Charles on getting a best buy in Boise.    Are you looking for a best buy?  Call me, I do good work.

Modification, Refinance, and Short Sale Program Enhancements

This came from the Bank of America Web Site, I keep watching for the program to kick in, perhaps it has and I just don't know.....

Modification, Refinance, and Short Sale Program Enhancements

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February 9, 2012

Bank of America agrees in principle to settlement with federal and state officials

On February 9, 2012, the U.S. Department of Justice and the State Attorneys General announced an agreement in principle to the terms of a global settlement with the largest mortgage servicers, including Bank of America. This government agreement in principle extends our ongoing commitment to help homeowners who are struggling to make their mortgage payments.

Under the agreement in principle, we would develop a new modification program that will offer principal reduction to qualified customers. For mortgages that are owned by Bank of America, we would expand refinancing opportunities or lower interest rates to provide reduced payments for eligible homeowners who are current on their payments but who owe more than the current value of their homes. Under this agreement in principle, we will also continue to help customers who are pursuing short sales and may offer additional assistance programs, such as deed in lieu of foreclosure and/or financial assistance to help those who are transitioning out of their properties.

At Bank of America, we are committed to making government and proprietary home loan assistance solutions available as quickly as possible. Once the agreement is finalized and the program details are in place, we will begin offering these enhanced loan assistance solutions, including the new mortgage modification program that will include principal reduction, to qualified customers.

Please keep checking back here for complete details about when these enhanced programs will be available, eligibility requirements and how to take advantage of these solutions.

In the meantime, if you are experiencing a financial hardship and are struggling to make your mortgage payments, help may already be available. Please contact us right away at 1.800.846.2222 to update us on your current financial situation. The sooner we understand your situation, the sooner we can explore all of the options that may be available to you.