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Toxic Debt Returns to Fashion
Wall Street Journal (09/02/10) P. C6; Natarajan, Prabha
Heavy demand and the absence of new supply have made investors hungry for private mortgage securities backed by Alt-A and adjustable-rate loans, once deemed too risky but now offered at deep discounts that factor in the credit risks. Tempted by yields of 7 percent to 9 percent, investors pumped the price of fixed-rate, Alt-A bonds up nearly 5 percent in recent months to 78 cents on the dollar. They hope the bonds will be redeemed at face value as more borrowers refinance to take advantage of low mortgage rates.
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Foreclosure Foot-Dragging Subject to Fannie Fines
American Banker (09/02/10) P. 1; Berry, Kate; Horwitz, Jeff
Fannie Mae will begin monitoring loan servicers and imposing penalty fees on those it believes are intentionally delaying foreclosures. The growing pool of loans that are delinquent but not yet in foreclosure is widely viewed as a sign that banks and servicers are trying to avoid losses; but delays also force Fannie Mae to incur bigger losses. Vicki Vidal, a public policy official at the Mortgage Bankers Association, notes that external factors like state and local regulation and court delays are behind the delays in foreclosure.
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Most Homebuyers Have No Regrets
Realty Times (09/02/10) Perkins, Broderick
A new study from Bankrate found that 90 percent of owners do not regret buying their current home. The findings also revealed improved mortgage awareness, with only 8 percent of homeowners in the dark about what type of loan they have -- down from 26 percent two years ago. The poll of 1,001 randomly selected homeowners in August showed that 79 percent had fixed-rate financing, and this type of mortgage was used by almost 90 percent of respondents who make more than $75,000.
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Communities Get 'First Look' at Many REOs
Inman News (09/02/10)
HUD officials have reached an agreement with mortgage lenders that will give local and state governments and nonprofit organizations the first opportunity to buy real estate owned properties in certain neighborhoods so these homes can be rehabilitated, resold, rented or razed. Lenders taking part in the "National First Look Program," including Bank of America and Wells Fargo, represent about 75 percent of the REO marketplace.
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Foreclosures Can Make You Sick, Report Says
San Francisco Chronicle (09/02/10) Colliver, Victoria
The Alameda County Public Health Department recently partnered with the Causa Justa/Just Cause housing rights group to poll nearly 400 residents in two Oakland, Calif., neighborhoods hit especially hard by the foreclosure crisis. Researchers examined how people undergoing the foreclosure process experience higher levels of stress and more medical problems. The report builds on work previously done by county health officials showing that areas with the highest foreclosure rates, such as East and West Oakland, already have life expectancies about a decade less than other parts of the county.
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