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LOL: JPM Bank Reps Not Aware of Mortgage Settlement

“Mira Tanna, a housing advocate in Orlando, Fla., doesn’t expect everyone to know the details of the recently announced $25 billion mortgage settlement, but she was taken aback, she said, when two JPMorgan Chase employees who work directly with homeowners recently told her that they were not aware of the deal nor of their bank’s pledge to consider principal reduction for underwater borrowers.

A key provision of the national settlement, which resolves an investigation into wrongful foreclosures and other abuses in the “servicing” of home loans, requires Chase and four other big banks to write off about $10 billion in mortgage debt for underwater borrowers through principal reductions. The deal was announced about two months ago, and the banks said that principal reductions would become available beginning in March.

Two weeks ago, Tanna said she called the Chase Homeownership Center in Orlando to ask whether her client, a 75-year-old Orlando woman, might qualify for principal reduction. She needed an answer right away. The client, who asked that her name not be used in this story, had just been offered a loan modification by Chase with affordable monthly payments — about one-third of what she had been paying — but with a catch: a balloon payment of about $200,000 due when the loan matures in 2036. That’s much more than the $120,000 that the house is currently worth. The client had one week to decide whether to accept or reject the modification….”

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Refis Continue to Fall as Mortgage Rates Climb

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“If you can refinance your mortgage at a much lower rate, it’s something of a free lunch (assuming all the fees don’t end up costing you more than they’re saving you).

But rates on 30-year mortgages are rising.

According to the latest report from the Mortgage Bankers Association, refis have now fallen for 5 consecutive weeks.

From Reuters:

The decline in refinancing was driven by a 12.0 percent drop in government refinance activity, while conventional applications fell just 3.4 percent, the report said.

The refinance share of total mortgage activity slipped to its lowest level since July of last year at 71.9 percent of applications from 73.4 percent.

Fixed 30-year mortgage rates jumped to their highest level since November to average 4.23 percent, up 4 basis points from 4.19 percent.

If this continues, it’s not hard to imagine this playing into the Fed’s decision on whether to launch a further round of monetary easing with the idea of pushing down interest rates.”

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‘Best Spring in Five Years’ for Housing: Toll CEO

Margo D. Beller

There are “encouraging” signs the high-end housing market is recovering in many U.S. markets, Toll Brothers CEO Douglas Yearley told CNBC Tuesday.

It’s been the “best spring in five years,” he said. In 2012 “our orders are up significantly and continue to be up significantly. I’m optimistic right now.”

The average price of a Toll home is $575,000.

Yearley spoke the same day homebuilder Lennar reported first-quarter earnings that beat expectations, a sign to some analysts that the housing market is recovering.

The Toll Brothers CEO said that’s true for some markets but not for others. He said that “25 percent of our communities have seen a price increase since Jan 1. That’s encouraging. There are places where we don’t have pricing power (but) we’re not dropping prices. We haven’t dropped prices in over a year.”

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ROBERT SHILLER: Suburban Home Prices Will Not Rebound In Our Lifetime

” Many young people are choosing to live at home for a longer period of time instead of buying. Moreover, would-be homebuyers are settling into modern apartments and condominiums, further hindering a housing rally. Shiller says the shift toward renting and city living could mean “that we will never in our lifetime see a rebound in these prices in the suburbs.”A perpetually sluggish housing market, which Shiller believes has become “more and more political,” might push the country in a “Japan-like slump that will go on for years and years.”

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Hope he’s wrong….

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Yale’s Shiller: It’s Too Early to Say Housing Market at Turning Point

“Despite clear signs that housing is finally bottoming out, it’s too early to make the call if the sector has hit bottom and ready to turn the corner to better days ahead, says Robert Shiller, Yale economist and co-founder of the Case/Shiller Housing Index.

“What we did notice for the last four months is that prices have been falling, at the same time indicators are looking stronger — permits are up, the NAHB housing market index is up and in the economy, the confidence is up,” Shiller tells CNBC, referring to the National Association of Homebuilders/Wells Fargo Housing Market Index, which rose in January and in February and came in flat in March.

“There are signs that it could be a turnaround. I give it a chance that this could be a turning point but I’m not saying it is — I think it’s still too uncertain to call a turning point and it could continue to go down.”

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Fannie Mae and Freddie Mac Feel the Pressure by Regulators To Shield Banks From Losses

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“WASHINGTON (Reuters) – Mortgage giants Fannie Mae andFreddie Mac are being pushed to reduce borrowers’ mortgagebalances in order to shield U.S. banks from taking losses on distressed housing debt, the companies’ regulator said in a Financial Times interview published on Sunday. “If you do principal forgiveness, who is it benefiting? … Doing principal forgiveness is what would protect the big banks,” said Edward DeMarco, the acting director of the Federal Housing Finance Agency.

DeMarco argued that writing down the principal on first mortgageswould amount to a transfer of taxpayer wealth to the biggest U.S. lenders, whose “second mortgages” are normally subordinate to the primary mortgages backed by Fannie Mae or Freddie Mac.

Some officials in the Obama administration, the Federal Reserve and Congress have called on Fannie Mae and Freddie Mac to write down the value of mortgages they own or guarantee as part of an effort to help the U.S. housing market recover from a deep slump that saw one third of property values wiped out since 2006.

DeMarco has previously resisted those calls, citing concerns it would increase losses at the two companies and undermine his mission of keeping a lid on the costs of their taxpayer-funded bailout. “Certainly the environment of the last number of months have shown substantial attempt to influence or direct an independent regulator,” he told the business newspaper. Fannie and Freddie provide funding for the bulk of U.S. home loans by buying mortgages from banks and repackaging them as securities for investors, which they then guarantee. The Obama administration has proposed using TARP funds to lessen the cost to Fannie and Freddie of doing writedowns. DeMarco is now considering whether the new money the Obama administration is laying on the table changes the equation. Freddie Mac and Fannie Mae were taken over by the government in 2008 after massive mortgage losses at the housing giants threatened the global financial system. Since then, the U.S. government has funneled more than $150 billion in taxpayer funds into Freddie and Fannie, in part to ensure that credit remains available for homebuyers.”

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On Housing & Homebuilders: How ETFs and or Indexes Implicate Fake Moves in the Market Place

An ETF of home builder stocks is trouncing the broader market. But that may not necessarily mean housing has bottomed. Many of the stocks in the ETF are NOT builders.An ETF of home builder stocks is trouncing the broader market. But that may not necessarily mean housing has bottomed. Many of the stocks in the ETF are NOT builders.

NEW YORK (CNNMoney) — When is a homebuilder not a homebuilder? When it’s in an index of homebuilder stocks, of course!

The SPDR S&P Homebuilders (XHB) exchange traded fund has surged this year, leading many to speculate that the housing market has really, honestly, we’re not fooling around this time, cross our hearts and hope to die, bottomed.

The builders ETF is up a stunning 26% already this year. But here’s the thing. A big chunk of the companies in the fund that are doing well are not really builders.

Shares of Select Comfort (SCSS), manufacturer of the popular Sleep Number beds, is up more than 50% this year. It makes up 3.3% of the fund’s assets.

The ETF, which tracks the S&P Homebuilders Select Industry index, also includes many companies that have ties to the housing market, but whose fortunes may be improving for reasons beyond what’s going on with real estate in the U.S.

Consider Whirlpool (WHR,Fortune 500). The appliance manufacturer makes up about 3.5% of the ETF’s weighting. Shares are up more than 60% this year. But is it really because of optimism about the U.S. housing market? ”

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Subprime Makes a Comeback in the U.K.

“Subprime mortgages that helped fuel the U.K. housing boom are making a comeback in thebond market even with Prime Minister David Cameron cutting spending by the most since World War II and the jobless rate at a 16-year high.

Credit Suisse Group AG (CSGN) sold bonds backed by more than 340 million pounds ($540.8 million) of non-conforming home loans last week in the first deal of its type since May, according to data compiled by Bloomberg. Apollo Global Management LLC, which acquired the mortgages in 2010, is using its servicing business Lapithus Group to help collect on the loans and will keep the riskiest part of the transaction, meaning it’s in line for the highest possible returns, according to an investor presentation….”

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Democrats trying to pressure Fannie, Freddie into loan forgiveness

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A top regulator’s unbending refusal to use troubled mortgage giants Fannie Mae and Freddie Mac to rescue underwater homeowners is whipping up a growing protest from liberal lawmakers and advocacy groups — some of whom are now calling on President Obama to fire him.

The little-known Washington official, Edward DeMarco, is under pressure by the left to reduce mortgage principals for struggling borrowers. Nearly 20 Democrats in Congress along with groups like MoveOn.org have launched somewhat of a campaign against the head of the Federal Housing Finance Agency.

Their solution would presumably help thousands of families, but at taxpayer expense.

And DeMarco has suggested it just wouldn’t be fair to use government-backed Fannie Mae and Freddie Mac to clear the way for a multi-billion-dollar homeowner bailout. In a recent letter, he said foreclosure prevention programs have already added to American taxpayer loss and destabilized neighborhoods.

But the lawmakers and advocacy groups allege he’s standing in the way of a robust housing recovery, and want him to either relent to their demands or step down. Absent that, some are calling on Obama to fire him.

Rep. Barney Frank, D-Mass., the top Democrat on the House Financial Service Committee, recently joined the ranks of those calling on DeMarco to step down.

The lawmakers specifically want DeMarco to agree to write down principal amounts for struggling homeowners. The Van Jones-backed Rebuild the Dream, which is circulating a petition supposedly signed by 90,000 people, calls DeMarco the “number one obstacle to solutions for struggling homeowners” and a “right-wing ideologue” who sides with Wall Street.

A House aide with the Progressive Caucus, whose members are pressuring DeMarco, told FoxNews.com that the strategy is to get him to “write down the loans or get out of the way.”

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China Stocks Fall The Most in Three Months as Wen States Housing Curbs Need to Bring Prices Down Further

China’s stocks fell, dragging the benchmark index down the most in more than three months, after Premier Wen Jiabao said home prices are still far from reasonable levels.

The Shanghai Composite Index (SHCOMP) slumped 2.6 percent at the close, reversing an earlier 0.8 percent gain. A relaxation of curbs on the property market would lead to “chaos,” Wen said at a press conference in Beijing today. A gauge tracking property stocks sank 3.7 percent, led by Poly Real Estate Group Co., while Anhui Conch Cement Co. paced losses by building- material companies.

“Wen’s speech has raised concern that property curbs may be kept in place for longer than previously expected,” said Zhang Ling, general manager at Shanghai River Fund Management Co. “Property accounts for a significant part of the economy.”

The Shanghai Composite had rallied 12 percent in 2012 through yesterday following two years of losses on speculation the central bank would add to a Feb. 18 cut in lenders’ reserve requirements to bolster economic growth. The government’s two- year effort to control the property market helped spur a 26 percent drop in home sales in the first two months of the year.

The Shanghai stock gauge closed 64.57 points lower at 2,391.23, the biggest loss since Nov. 30. The CSI 300 Index (SHSZ300) retreated 2.8 percent to 2,605.11. The Bloomberg China-US 55 Index, the measure of the most-traded U.S.-listed Chinese companies, added 2.1 percent in New York yesterday…”

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Private Equity’s Foreclosures for Rentals Net 8%: Mortgages

By Edward Robinson – Mar 13, 2012 12:47 PM ET
Bloomberg Markets Magazine

Ken Major climbs the steps of a county courthouse in a San Francisco suburb with $500,000 in cashier’s checks in one hand and a list of addresses in the other. Major is a buyer for Waypoint Real Estate Group LLC, an Oakland-based investment firm that’s scooping up foreclosed homes in California.

On this December afternoon, he joins a dozen house flippers as an auctioneer starts hawking the latest batch of defaulted properties to hit the market. Major bids on a three-bedroom house in Antioch, and after other buyers counter, he wins at $147,600.

March 13 (Bloomberg) — Colin Wiel, co-founder of Waypoint Real Estate Group LLC, talks about the rental market for single-family homes in California and technology that allows Waypoint to manage home rentals in a similar way to multi-family apartment units. He spoke on Feb. 9 in San Francisco. This topic will be in the April issue of Bloomberg Markets magazine. (Source: Bloomberg)

“We got it,” he mutters into a mobile-phone mic dangling from his ear. The house was valued at more than $400,000 in 2006, Bloomberg Markets magazine reports in its April issue.

Waypoint, a private-equity real-estate fund with $150 million in assets, is pioneering a new approach to making money from the housing crash. Since 2007, investors have been trolling the cratered suburbs stretching from California to Florida (SPCSMIA) for cheap houses to flip. And firms such as PennyMac Mortgage Investment Trust have sought value in subprime-mortgage-backed securities.

Waypoint, which owns 1,100 houses and is buying five more a day, is betting that converting foreclosures into rentals is a better way to make a profit. Other firms, such as Landsmith LP in San Francisco, are now cropping up and pursuing the same strategy in Arizona, California and Nevada.

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Foreclosures Flood The Market; The Tidal Wave is Yet to Come

“Foreclosures and other distressed properties account for more than a third of all home sales, and data released today suggests that figure may soon grow even bigger.

Lenders in January took back nearly 91,100 distressed properties, which includes foreclosures and short sales, up 29% from the previous month, according to data released this morning by LPS Applied Analytics, which tracks mortgage performance.  In the next few months, experts say those homes will make their way back to the market to join the already high percentage of distressed homes being snatched up by buyers.

That addition of distressed properties will likely lead to further drops in home prices, says Tom Popik, research director at Campbell Surveys, a real estate research firm. Foreclosures and short sales accounted for roughly 35% of total existing home sales in January — up 16% from June, according to the National Association of Realtors. Over that period, the median home price fell 8.5% to $154,700. “Prices are going to continue to go down for a long time,” says Popik….”

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CoreLogic: Third of All Mortgage Holders Are ‘Underwater’

“About one-third of all homeowners with a mortgage owe more on their homes than they’re worth or are close to it, according to a report from CoreLogic, a data analysis company.

CoreLogic research finds that 1.1 million, or 22.8 percent, of all residential properties with a mortgage were in negative equity at the end of the fourth quarter of 2011, up from, 22.1 percent in the previous quarter, CNBC reports.

Another 2.5 million borrowers that have less than five percent equity, referred to as near-negative equity, in the fourth quarter….”

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