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Loan Industry Fighting Rules on Mortgages

The mortgage industry, facing the prospect of tougher regulations for its central role in the housing crisis, has begun an intensive campaign to fight back.

As the Federal Reserve completes work on rules to root out abuses by lenders, its plan has run into a buzz saw of criticism from bankers, mortgage brokers and other parts of the housing industry. One common industry criticism is that at a time of tight credit, tighter rules could make many mortgages more expensive by creating more paperwork and potentially exposing lenders to more lawsuits.

To the chagrin of consumer groups that have complained that the proposed rules are not strong enough, the industry’s criticism has already prompted the Fed to consider narrowing the scope of the plan so it applies to fewer loans.
 
graphrix said:
Loan Industry Fighting Rules on Mortgages

The mortgage industry, facing the prospect of tougher regulations for its central role in the housing crisis, has begun an intensive campaign to fight back.

As the Federal Reserve completes work on rules to root out abuses by lenders, its plan has run into a buzz saw of criticism from bankers, mortgage brokers and other parts of the housing industry. One common industry criticism is that at a time of tight credit, tighter rules could make many mortgages more expensive by creating more paperwork and potentially exposing lenders to more lawsuits.

To the chagrin of consumer groups that have complained that the proposed rules are not strong enough, the industry’s criticism has already prompted the Fed to consider narrowing the scope of the plan so it applies to fewer loans.
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Not surprising, but irritating. Wait until they see what I am proposing in my book. Their collective heads will explode...
 
CA Bill Rquires lenders to Maintain Foreclosed Homes

Banks and mortgage companies face fines of $1,000 a day if they allow foreclosed homes to become run down and a source of neighborhood blight under a bill that passed the state Senate on Monday.

California has one of the highest foreclosure rates in the nation. Many communities, particularly in the Central Valley, are riddled with homes that have been abandoned by buyers who could not afford their mortgage payments when they reset to higher rates.

In many cases, the vacant properties are overgrown with weeds and shrubs and have become magnets for squatters and vandals. Swimming pools often become stagnant, turning into breeding grounds for mosquitoes.

Under the bill by Senate President Pro Tem Don Perata, local governments could impose the fines on lenders after giving them 14 days' notice to fix the problems.

"Senator Perata's bill not only tries to help those in danger of losing their homes, it tries to make sure property values don't go down in neighborhoods where foreclosures already are problems," Perata spokeswoman Lynda Gledhill said.

The bill, supported by consumer groups and local governments, and was sent to the Assembly on a 28-10 vote. Because it is urgency legislation, it would take effect as soon as it is signed into law.

Perata said quick action was needed because adjustable rate mortgages continue to reset to higher interest rates. He cited consumer groups' projections that as many as 400,000 California families will lose their homes in the next two years.......
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Closing HELOCs could bite banks, report says

http://mortgage.freedomblogging.com/2008/04/29/closing-helocs-could-bite-banks-report-says/

KBW said there’s an additional $1.2 trillion in outstanding debt on credit lines and home-equity loans. To put the numbers in perspective, the total of $2.2 trillion (used and unused HELOCs and home-equity loans) equates to 20 percent of outstanding first-mortgage debt and roughly 85 percent of outstanding non-mortgage consumer debt ($2.5 trillion), the report found.

“In our view, the importance of home equity lines as a source of household liquidity is a recent phenomenon and one which can have an outsized impact on the current economic cycle.
 
Can you imagine how fast Countrywide is going to get rid of their REO if they have to maintain them or be fined up to $1000 per day? A few folks in here know how to look up the number of REO that Countrywide has. How many is it?
 
awgee said:
Can you imagine how fast Countrywide is going to get rid of their REO if they have to maintain them or be fined up to $1000 per day? A few folks in here know how to look up the number of REO that Countrywide has. How many is it?
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The Coutrywide Reo is here, and the actual REO site from CW is here.

14,220 REOs as of 4/17/08, they went down a little bit, but as you scroll down on the blog, you can see the increase in Cali and the decrease in price for Cali. I roughly counted 143 in OC on the CW site, with 3 being in Irvine, and a whole bunch in South County.
 
graphrix said:
awgee said:
Can you imagine how fast Countrywide is going to get rid of their REO if they have to maintain them or be fined up to $1000 per day? A few folks in here know how to look up the number of REO that Countrywide has. How many is it?
Click to expand...

The Coutrywide Reo is here, and the actual REO site from CW is here.

14,220 REOs as of 4/17/08, they went down a little bit, but as you scroll down on the blog, you can see the increase in Cali and the decrease in price for Cali. I roughly counted 143 in OC on the CW site, with 3 being in Irvine, and a whole bunch in South County.
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Jeesh - How do they stay in biz? 14,220 REOs? At an average loss of let's say $75,000 per REO, that is more a billion dollars in losses. With more on the way?
 
JNinWB - thanks, it's interesting to search Redfin with only the bank owned checkbox checked. Some of the prices still seem high though

Ex.http://www.redfin.com/CA/IRVINE/41-ROSE-TRELLIS-92603/home/5901063/bankOwned-2207912

http://www.oodle.com/detail/41-Rose-Trellis-Irvine-CA-92603/795576866/orangecounty/

41 Rose Trellis, Irvine, CA 92603

$1,369,900

3 BR, 3 BA

Sq feet: 2,700 Sq. Feet

Year: 2005

Property Type: Single Family

Location: Irvine, CA

Listed: 1 Month Ago

Description:

BANK OWNED ! Stunning location with ocean view and large wrap-around yard. Home has tons of upgrades. Stone flooring, one of the most stunning kitchens on the market, oversized center island, breakfast nook with dining table and chairs to match the decor, great-room for entertaining, top of the line...
 
awgee said:
Can you imagine how fast Countrywide is going to get rid of their REO if they have to maintain them or be fined up to $1000 per day? A few folks in here know how to look up the number of REO that Countrywide has. How many is it?
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Maybe, if it gets expensive enough to hold the property, they'll finally give in and do some Rsolution Trust Corporation (http://en.wikipedia.org/wiki/Resolution_Trust_Corporation) thing and just dump huge packages of it to the highest bidder. That'd be cool - then we wouldn't have to wait the painful years and years for the prices to finally come down...
 
The Road to a Jumbo Mortgage Was Supposed to Get Easier

http://www.nytimes.com/2008/04/30/business/30jumbo.html?_r=1&pagewanted=1&oref=slogin

?It’s a complete joke,” said Jose Lemus, president of Brymus Capital, a mortgage brokerage firm in Santa Ana, Calif. He said a buyer in Southern California looking to borrow $417,000 would pay an interest rate of 5.75 percent, while someone borrowing slightly more for a conforming jumbo loan would pay an interest rate of 6.99 percent.

For a jumbo loan that is not conforming, the rate could be as low as 7.35 percent for someone with excellent credit, Mr. Lemus said, but the rate for someone with average credit could be as high as 9 percent. “It’s getting harder by the day,” Mr. Lemus said.

Because the rates have not fallen as Mr. Lemus and his customers had hoped, he has not processed a single loan under the new rules.
 
awgee said:
Jeesh - How do they stay in biz? 14,220 REOs? At an average loss of let's say $75,000 per REO, that is more a billion dollars in losses. With more on the way?
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That's why they reserved $1.5 billion for future losses and wrote off $600MM in their most recent earnings report. They're in big trouble, and I can't believe B of A is still buying them...
 
skeptic said:
Even Jose Canseco knows when to walk away. Maybe he's been reading IHB?

Baseball star Canseco loses home to foreclosure
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Ah... man... you beat me to it. He has said some stupid things in his life time. But this is the smartest thing he has ever said...

"I do have a judgment on my home and it to me is very strange because it didn't make financial sense for me to keep paying a mortgage on a home that was basically owned by someone else," he said.
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He's said some stupid things, but for the most part (with some hyperbole thrown in for effect, of course) he's been bashed for telling it like it is... steroids, womanizing, gambling, and now debt. Having written that last sentence, come to think of it, I think he'd fit in nicely here.
 
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