Wells Fargo, in a settlement with California's attorney general announced Monday, agreed to provide $2 billion worth of loan modifications to nearly 15,000 homeowners. Under the deal, the bank is also paying a total of $32 million to borrowers who lost their homes to foreclosure, according to the AG. Attorney General Jerry Brown said Wells Fargo will offer modifications to 14,900 homeowners, who have so-called "pick-a-pay" loans. "Customers were offered adjustable-rate loans, with payments that mushroomed to amounts that ultimately thousands of borrowers could not afford," said Brown, who takes over as California's governor next month. "Recognizing the harm caused by these loans -- Wells Fargo accepted responsibility and entered in this settlement with my office." Pick-a-pay loans, where the rate changes throughout the life of the loan, became notorious during the housing market crisis.
According to the AG's office, payments often started low -- at levels that were "insufficient to cover the monthly interest owed, and the unpaid interest was added to the loan balance." The loans would ultimately increase "dramatically," soaring to unaffordable heights for the homeowner and creating the risk of foreclosure. In addition to the loan modifications, Wells Fargo will pay $32 million in restitution to more than 12,000 pick-a-pay borrowers who lost their homes through foreclosure in California. The attorney general noted that the loans were not made by Wells Fargo, but by banks that it acquired: World Savings and Wachovia. Wells Fargo stated that so far it has already extended significant home payment relief options to more than 50,000 at-risk, pick-a-payment homeowners in California -- through interest rate reductions, term extensions, tax forgiveness, insurance advances and principal forgiveness. This adds to the list of pick-a-pay settlements that Wells Fargo has previously signed with attorney generals in Arizona, Colorado, Florida, Illinois, Nevada, New Jersey, Texas and Washington.
Tuesday, December 28, 2010
Monday, December 20, 2010
Force Short Sales
What could force more short sales?
"Despite a government program designed to streamline and incentivize the process, short sales have not even come close to keeping up with foreclosure sales. That may be about to change. If banks see higher losses from foreclosures than from short sales, they may put more resources into approving these deals, where the borrower is allowed to sell the home for less than the value of the loan. 'Loss severities on distressed U.S. residential mortgage loans are likely to increase an additional 5-10 percent from current levels due to higher loss mitigation and foreclosure expenses and weakening home values,' according to a report from Fitch Ratings. Fitch: The anticipated increases for each sector’s average loss severities are expected to be as follows:
- Prime loans: currently 44%, increasing to 49%-54%
- Alt-A loans: currently 59%, increasing to 64%-69%
- Subprime loans: currently 75%, increasing to 80%-85%.
We are already seeing home prices double dip in many markets, and that is expected to continue at least through the first half of 2011. One way to mitigate the losses is through short sales. 'Short sales generally experience recovery rates about 10 percent higher than foreclosure sales,' according to Fitch. Will this be enough to push the banks? Unclear. Servicers actually rake in a lot of money from fees surrounding foreclosures, and so far the government's 'Home Affordable Foreclosure Alternative,' program, which pays servicers cash incentives for doing short sales, has had pretty poor results, really still in the hundreds of loans. Second liens pose a big problem, but many big bank servicers also hold the second liens. It's all about where the math comes out. If home prices fall far enough, the equation may tip from foreclosure to short sale."
"Despite a government program designed to streamline and incentivize the process, short sales have not even come close to keeping up with foreclosure sales. That may be about to change. If banks see higher losses from foreclosures than from short sales, they may put more resources into approving these deals, where the borrower is allowed to sell the home for less than the value of the loan. 'Loss severities on distressed U.S. residential mortgage loans are likely to increase an additional 5-10 percent from current levels due to higher loss mitigation and foreclosure expenses and weakening home values,' according to a report from Fitch Ratings. Fitch: The anticipated increases for each sector’s average loss severities are expected to be as follows:
- Prime loans: currently 44%, increasing to 49%-54%
- Alt-A loans: currently 59%, increasing to 64%-69%
- Subprime loans: currently 75%, increasing to 80%-85%.
We are already seeing home prices double dip in many markets, and that is expected to continue at least through the first half of 2011. One way to mitigate the losses is through short sales. 'Short sales generally experience recovery rates about 10 percent higher than foreclosure sales,' according to Fitch. Will this be enough to push the banks? Unclear. Servicers actually rake in a lot of money from fees surrounding foreclosures, and so far the government's 'Home Affordable Foreclosure Alternative,' program, which pays servicers cash incentives for doing short sales, has had pretty poor results, really still in the hundreds of loans. Second liens pose a big problem, but many big bank servicers also hold the second liens. It's all about where the math comes out. If home prices fall far enough, the equation may tip from foreclosure to short sale."
Tuesday, December 7, 2010
Foreclosure's Froze By Banks
Foreclosure On Temporary Freeze
Like last year, Freddie Mac and Fannie Mae, the two government-controlled mortgage giants, are freezing all foreclosure evictions on mortgage loans they own or back from Dec. 20 through Jan.3. For some of the big private banks, who also usually observe a freeze during the holidays, the situation is a little different this year, thanks to moratoriums they already have in place because of the robo-signing scandal. That freeze was initiated to give the banks time to examine whether they violated any legal procedures in processing foreclosures and to correct and refile questionable documents they uncover. A spokesman for Bank of America, Rick Simon, said that made addressing this year's situation a little awkward but it would still observe its usual holiday policy.
"Bank of America's practice in recent years [is to hold off on] foreclosure sales or evictions from late December through New Year's Day on loans held in our investment portfolio or that are owned by investors who give the bank delegated authority," he said. A spokesman for Chase Mortgage, a division of J.P. Morgan Chase, said its robo-signing-connected moratorium makes an additional holiday freeze moot; it will still be several weeks before it starts to evict borrowers again. Wells Fargo's holiday freeze will run the same two week period as Fannie's and Freddie's and will, like Bank of America's, include all loans it holds in its portfolio. For the other loans it services, it will follow guidelines from investors and from the states where the properties are located. With the number of bank repossessions amounting to around 100,000 a month recently, the temporary reprieve could affect tens of thousands of borrowers in default.
Like last year, Freddie Mac and Fannie Mae, the two government-controlled mortgage giants, are freezing all foreclosure evictions on mortgage loans they own or back from Dec. 20 through Jan.3. For some of the big private banks, who also usually observe a freeze during the holidays, the situation is a little different this year, thanks to moratoriums they already have in place because of the robo-signing scandal. That freeze was initiated to give the banks time to examine whether they violated any legal procedures in processing foreclosures and to correct and refile questionable documents they uncover. A spokesman for Bank of America, Rick Simon, said that made addressing this year's situation a little awkward but it would still observe its usual holiday policy.
"Bank of America's practice in recent years [is to hold off on] foreclosure sales or evictions from late December through New Year's Day on loans held in our investment portfolio or that are owned by investors who give the bank delegated authority," he said. A spokesman for Chase Mortgage, a division of J.P. Morgan Chase, said its robo-signing-connected moratorium makes an additional holiday freeze moot; it will still be several weeks before it starts to evict borrowers again. Wells Fargo's holiday freeze will run the same two week period as Fannie's and Freddie's and will, like Bank of America's, include all loans it holds in its portfolio. For the other loans it services, it will follow guidelines from investors and from the states where the properties are located. With the number of bank repossessions amounting to around 100,000 a month recently, the temporary reprieve could affect tens of thousands of borrowers in default.
Wednesday, December 1, 2010
Fannie and Freddie lift Ban
Freddie Mac and Fannie Mae lift ban
Freddie Mac and Fannie Mae have lifted the ban on the sale of foreclosed homes, frozen since the document handling fiasco that started nearly two months ago. Freddie Mac sent a memo to agents instructing them to “resume all normal sales activity” while Fannie Mae issued a memo telling agents to “proceed with scheduling and holding the closings” of foreclosed sales. Fannie Mae also instructed agents to coordinate with appropriate personnel “if a title issue arises with respect to the potential defect of an affidavit used in the underlying foreclosure.” Fannie and Freddie owned nearly 240,000 properties at the end of September, valued at nearly $24 billion. Analysts claim difficulty selling those homes could lead to higher carrying costs for the mortgage titans. Further delays also could prompt buyers that had been under contract to lower their asking prices or to walk away from deals altogether which could cause the mortgage giants to incur heavier losses.
In August, Fannie Mae told mortgage servicers that they would face fines if foreclosures became unreasonably prolonged in a bid to avoid costly delays. The Federal Housing Finance Agency (FHFA) worked with Fannie Mae to make the decision after a thorough examination of foreclosed properties which the mortgage company has acquired. “Our decision was motivated by several factors including the protection of buyers with title insurance, the negative impact lingering foreclosed properties has on neighborhoods and the cost burden that is placed on taxpayers when [bank-owned] sales are suspended,” a Fannie spokesperson said in a statement. Fannie Mae said it would resume sales for properties with loans that had been serviced by units of Ally Financial Inc., Bank of America Corp., PNC Financial Services Group Inc., J.P. Morgan Chase & Co., OneWest Bank, and Sovereign Bank.
Freddie Mac and Fannie Mae have lifted the ban on the sale of foreclosed homes, frozen since the document handling fiasco that started nearly two months ago. Freddie Mac sent a memo to agents instructing them to “resume all normal sales activity” while Fannie Mae issued a memo telling agents to “proceed with scheduling and holding the closings” of foreclosed sales. Fannie Mae also instructed agents to coordinate with appropriate personnel “if a title issue arises with respect to the potential defect of an affidavit used in the underlying foreclosure.” Fannie and Freddie owned nearly 240,000 properties at the end of September, valued at nearly $24 billion. Analysts claim difficulty selling those homes could lead to higher carrying costs for the mortgage titans. Further delays also could prompt buyers that had been under contract to lower their asking prices or to walk away from deals altogether which could cause the mortgage giants to incur heavier losses.
In August, Fannie Mae told mortgage servicers that they would face fines if foreclosures became unreasonably prolonged in a bid to avoid costly delays. The Federal Housing Finance Agency (FHFA) worked with Fannie Mae to make the decision after a thorough examination of foreclosed properties which the mortgage company has acquired. “Our decision was motivated by several factors including the protection of buyers with title insurance, the negative impact lingering foreclosed properties has on neighborhoods and the cost burden that is placed on taxpayers when [bank-owned] sales are suspended,” a Fannie spokesperson said in a statement. Fannie Mae said it would resume sales for properties with loans that had been serviced by units of Ally Financial Inc., Bank of America Corp., PNC Financial Services Group Inc., J.P. Morgan Chase & Co., OneWest Bank, and Sovereign Bank.
Tuesday, November 23, 2010
Foreclosure Options
Mess scares off Homebuyers:
The ongoing controversy surrounding foreclosures is taking its toll as homebuyers refused to look at distressed properties in October, and foreclosure sales suffered from delays, according to the latest Campbell/Inside Mortgage Finance Monthly Survey. Both the share of home purchases involving distressed properties and average prices for foreclosed properties fell last month, the survey found. News reports that major servicers were pulling REOs off the market, including some already under contract, spooked would-be homebuyers. The monthly survey found that 14% of owner-occupant homebuyers and 6% of investors refused to view foreclosed properties in October. Homebuyer fear was worse for short-sale properties where 30% of owner-occupant buyers, and 20% of investors refused to view these homes.
Servicing problems disrupted both short sales and REO sales. Survey results show that 24% of closings scheduled for October were delayed or canceled due to issues with short sales, while 12% were delayed or canceled due to REO title issues. Although distressed properties have dominated home sales for much of 2010, recent foreclosure problems helped trigger a dip in their share of the market last month, according to the survey. In October, distressed properties accounted for 44.3% of transactions tracked in the latest survey — down from 47.5% in September. "It's clear that decreased homebuyer demand for distressed properties has resulted in lower prices," said Thomas Popik, research director for Campbell Surveys. "With the foreclosure 'fraud' issue still out there, buyers are skeptical to purchase a REO. Until the fraud mess gets cleared up, most of our clients are second guessing their interest in REO properties," reported a Florida real estate agent responding in the la
test survey.
The ongoing controversy surrounding foreclosures is taking its toll as homebuyers refused to look at distressed properties in October, and foreclosure sales suffered from delays, according to the latest Campbell/Inside Mortgage Finance Monthly Survey. Both the share of home purchases involving distressed properties and average prices for foreclosed properties fell last month, the survey found. News reports that major servicers were pulling REOs off the market, including some already under contract, spooked would-be homebuyers. The monthly survey found that 14% of owner-occupant homebuyers and 6% of investors refused to view foreclosed properties in October. Homebuyer fear was worse for short-sale properties where 30% of owner-occupant buyers, and 20% of investors refused to view these homes.
Servicing problems disrupted both short sales and REO sales. Survey results show that 24% of closings scheduled for October were delayed or canceled due to issues with short sales, while 12% were delayed or canceled due to REO title issues. Although distressed properties have dominated home sales for much of 2010, recent foreclosure problems helped trigger a dip in their share of the market last month, according to the survey. In October, distressed properties accounted for 44.3% of transactions tracked in the latest survey — down from 47.5% in September. "It's clear that decreased homebuyer demand for distressed properties has resulted in lower prices," said Thomas Popik, research director for Campbell Surveys. "With the foreclosure 'fraud' issue still out there, buyers are skeptical to purchase a REO. Until the fraud mess gets cleared up, most of our clients are second guessing their interest in REO properties," reported a Florida real estate agent responding in the la
test survey.
Monday, November 15, 2010
Short Sale Options
Short Sale Resolution
The availability of raw land and other forms of undeveloped property are becoming extremely attractive as prices continue to plunge and returns on water, minerals, gas rights, agricultural products and other materials rise. While raw land or undeveloped property may not be the right fit for every real estate investor, it's a good idea to remain alert to the possibility. Use this quick checklist to evaluate a potential property:
1. Is the zoning approved for the desired use? While it is possible to petition for a zoning change, don't count on approval. Instead, search for properties that provide a safe bet especially when first starting out.
2. Are there any environmental limitations? The EPA is probably not an organization you are used to doing business with but that doesn't mean they can't impact your property values. Protected wetlands, pollution zones and even required "buffer zones" are just a few considerations to keep in mind.
3. Do deed restrictions limit use? In addition to use restrictions, it's a good idea to review deed restrictions and land use limits. Certain forms of business endeavors, pollution or other concerns may preclude the use of the land for a desired endeavor.
4. Are there ancillary or additional incentives? Some parcels may present especially attractive investments due to location, agricultural exemptions, tax credits or other desirable aspects. Mineral and water rights, the ability to lease to other concerns or the promise of future expansion can enhance or limit almost any listing.
5. Multi-use property appraisals? Finding a multi-use property is one way to maximize gains and minimize risk but it can also present a unique set of challenges when obtaining an appraisal. Comparables can be difficult to come by so it's essential to work with a reputable entity capable of seeing the 'big picture".
6. Do you have staying power? Investing in raw or undeveloped land can be costly so make sure you have the cash reserves and/or connections to make it work. Even for those who simply intend to flip the property...remember that it can take more time due to a smaller pool of potential investors. Have a contingency plan in place to avoid unpleasant surprises down the line.
7. Last but not least...start small and grow from there. Don't bite off more than you are able to chew especially the first few times out. If you find a deal that is beyond your expertise, use the same techniques covered in our shortsale investing seminars to work with a "bigger fish" that is able to provide the stability and experience needed to make the deal work.
See you at the top!
The availability of raw land and other forms of undeveloped property are becoming extremely attractive as prices continue to plunge and returns on water, minerals, gas rights, agricultural products and other materials rise. While raw land or undeveloped property may not be the right fit for every real estate investor, it's a good idea to remain alert to the possibility. Use this quick checklist to evaluate a potential property:
1. Is the zoning approved for the desired use? While it is possible to petition for a zoning change, don't count on approval. Instead, search for properties that provide a safe bet especially when first starting out.
2. Are there any environmental limitations? The EPA is probably not an organization you are used to doing business with but that doesn't mean they can't impact your property values. Protected wetlands, pollution zones and even required "buffer zones" are just a few considerations to keep in mind.
3. Do deed restrictions limit use? In addition to use restrictions, it's a good idea to review deed restrictions and land use limits. Certain forms of business endeavors, pollution or other concerns may preclude the use of the land for a desired endeavor.
4. Are there ancillary or additional incentives? Some parcels may present especially attractive investments due to location, agricultural exemptions, tax credits or other desirable aspects. Mineral and water rights, the ability to lease to other concerns or the promise of future expansion can enhance or limit almost any listing.
5. Multi-use property appraisals? Finding a multi-use property is one way to maximize gains and minimize risk but it can also present a unique set of challenges when obtaining an appraisal. Comparables can be difficult to come by so it's essential to work with a reputable entity capable of seeing the 'big picture".
6. Do you have staying power? Investing in raw or undeveloped land can be costly so make sure you have the cash reserves and/or connections to make it work. Even for those who simply intend to flip the property...remember that it can take more time due to a smaller pool of potential investors. Have a contingency plan in place to avoid unpleasant surprises down the line.
7. Last but not least...start small and grow from there. Don't bite off more than you are able to chew especially the first few times out. If you find a deal that is beyond your expertise, use the same techniques covered in our shortsale investing seminars to work with a "bigger fish" that is able to provide the stability and experience needed to make the deal work.
See you at the top!
Thursday, November 11, 2010
Foreclosure Filings Down
Foreclosures fall 9% :
According to a report released by RealtyTrac, Foreclosure filings of all kinds, including notices of default, notices of auctions and notices of auction sales, dropped 4.4% during October, but it's not because fewer people are losing their homes. Instead, the market is seeing a temporary stay from banks freezing foreclose auctions to review loan documents. The drop in repossessions came after increases in four of the six previous months, topped by an all-time high in September, when 102,000 people lost their homes. In October, 93,246 homes were repossessed.
Rick S., Senior Vice President of RealtyTrac, believes there could be a further drop-off in November, because the impact of the freeze was not fully reflected in the October report. While that may result in further declines in bank repossessions, Rick expects it to take many months before overall foreclosure rates really improve. There is still a very large backlog of borrowers who stopped paying their mortgages long ago but who have not yet been served with a single foreclosure filing and so are not being counted in RealtyTrac's statistics. "Today, servicers are waiting longer and longer to put people in foreclosure," said Rick. "It's not unusual for someone in default go six to nine months without receiving a notice of default."
According to a report released by RealtyTrac, Foreclosure filings of all kinds, including notices of default, notices of auctions and notices of auction sales, dropped 4.4% during October, but it's not because fewer people are losing their homes. Instead, the market is seeing a temporary stay from banks freezing foreclose auctions to review loan documents. The drop in repossessions came after increases in four of the six previous months, topped by an all-time high in September, when 102,000 people lost their homes. In October, 93,246 homes were repossessed.
Rick S., Senior Vice President of RealtyTrac, believes there could be a further drop-off in November, because the impact of the freeze was not fully reflected in the October report. While that may result in further declines in bank repossessions, Rick expects it to take many months before overall foreclosure rates really improve. There is still a very large backlog of borrowers who stopped paying their mortgages long ago but who have not yet been served with a single foreclosure filing and so are not being counted in RealtyTrac's statistics. "Today, servicers are waiting longer and longer to put people in foreclosure," said Rick. "It's not unusual for someone in default go six to nine months without receiving a notice of default."
Monday, November 8, 2010
BofA Fights Back
Yesterday Bank of America rebuffed claims by a lawyer for several big investors that it should buy back troubled mortgages because the loans were made improperly. A group of investors, including the Federal Reserve Bank of New York and Pimco are pressing Bank of America to buy back a portion of some $47 billion worth of mortgages. Bank of America argued that the effort would have the effect of speeding up the foreclosure process and force it to evict more homeowners. The investors’ claims have become a major worry on Wall Street as the foreclosure crisis has escalated. Bank of America said the problems stemmed from the economic downturn rather than any underlying problem with how the mortgages were sold to investors.
It called the investor claims “utterly baseless.” Signaling a much more aggressive legal stance, the bank also criticized the lawyer behind the effort, K. Patrick. It argued that a letter she wrote last month that was signed by clients was “written for an improper purpose, or in furtherance of an ulterior agenda.” Ms. Patrick did not immediately respond to calls seeking comment. “I don’t think we should be put in a position where we aren’t trying to help homeowners through this strife because people want us to foreclose faster,” said B. T. Moynihan, Bank of America’s chief executive. In addition, Mr. Moynihan said, he was caught off guard by the decision of the Federal Reserve and Freddie Mac, the government-controlled giant, as well as private investors to sign the letter.
It called the investor claims “utterly baseless.” Signaling a much more aggressive legal stance, the bank also criticized the lawyer behind the effort, K. Patrick. It argued that a letter she wrote last month that was signed by clients was “written for an improper purpose, or in furtherance of an ulterior agenda.” Ms. Patrick did not immediately respond to calls seeking comment. “I don’t think we should be put in a position where we aren’t trying to help homeowners through this strife because people want us to foreclose faster,” said B. T. Moynihan, Bank of America’s chief executive. In addition, Mr. Moynihan said, he was caught off guard by the decision of the Federal Reserve and Freddie Mac, the government-controlled giant, as well as private investors to sign the letter.
Sunday, October 24, 2010
The Cost of Falling
Fannie/Freddie will cost billions
Propping up Fannie Mae and Freddie Mac will cost taxpayers $154 billion under the most likely scenario for home prices, the mortgage giants' regulator said yesterday. But the bill could end up much greater—nearly double the $135 billion already spent—if grimmer projections prove true and the economy slides back into recession. The projections, based on the results of a home-price "stress test" by the Federal Housing Finance Agency, offered the first public estimates of the final cost of the government's rescue of the mortgage-finance firms, which is on track to become the most expensive legacy of the 2008 financial crisis. Under the regulator's most positive home-price scenario, Fannie and Freddie would lose $6 billion over the next three years and they would still have to ask the government for 11 times that amount to make dividend payments.
On its most likely projection—which assumes an end to the housing crisis is close and that home prices will stop falling soon—it will lose $19 billion in the same period. On the other hand, if the economy slides back into recession and home prices fall by another 20% to 25%, the companies could cost taxpayers an additional $124 billion, before dividend payments. Another drop in values could lead to more delinquent borrowers with fewer options to avoid foreclosure. Price declines could also lead to losses on the nearly 200,000 homes the firms have taken back through foreclosure. Fannie and Freddie own or guarantee around half of the nation's $10.6 trillion in mortgages. While the Obama administration has said the $700 billion Troubled Asset Relief Program could ultimately cost taxpayers a fraction of the initial investment, the tab for Fannie and Freddie has swelled as mortgage delinquencies have mounted. Federal policymakers have relied heavily on the firms to help,
stabilize the housing sector, which together with the FHA have backed or bought nine in ten new loans this year, according to Inside Mortgage Finance.
Thursday, October 21, 2010
Commercial NOD mixed
Commercial delinquencies mixed
According to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report, delinquency rates were mixed in the second quarter for commercial/multifamily mortgage investor groups. The delinquency rate for loans held in commercial mortgage-backed securities (CMBS) is the highest since the series began in 1997. Delinquency rates for other groups remain below levels seen in the early 1990’s, some by large margins. Between the first quarter and second quarter 2010, the 30+ day delinquency rate on loans held in CMBS rose 1.39 percentage points to 8.22%. The 60+ day delinquency rate on loans held in life company portfolios decreased 0.02 percentage points to 0.29%.
The 60+ day delinquency rate on multifamily loans held or insured by Fannie Mae rose 0.01%age points to 0.80%. The 60+ day delinquency rate on multifamily loans held or insured by Freddie Mac increased 0.03 percentage points to 0.28%. The 90+ day delinquency rate on loans held by FDIC-insured banks and thrifts remained unchanged at 4.26%. Based on the unpaid principal balance of loans (UPB), delinquency rates for each group at the end of the second quarter were as follows:
• CMBS: 8.22% (30+ days delinquent or in REO);
• Life company portfolios: 0.29% (60+days delinquent);
• Fannie Mae: 0.80% (60 or more days delinquent)
• Freddie Mac: 0.28% (60 or more days delinquent);
• Banks and thrifts: 4.26% (90 or more days delinquent or in non-accrual).
According to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report, delinquency rates were mixed in the second quarter for commercial/multifamily mortgage investor groups. The delinquency rate for loans held in commercial mortgage-backed securities (CMBS) is the highest since the series began in 1997. Delinquency rates for other groups remain below levels seen in the early 1990’s, some by large margins. Between the first quarter and second quarter 2010, the 30+ day delinquency rate on loans held in CMBS rose 1.39 percentage points to 8.22%. The 60+ day delinquency rate on loans held in life company portfolios decreased 0.02 percentage points to 0.29%.
The 60+ day delinquency rate on multifamily loans held or insured by Fannie Mae rose 0.01%age points to 0.80%. The 60+ day delinquency rate on multifamily loans held or insured by Freddie Mac increased 0.03 percentage points to 0.28%. The 90+ day delinquency rate on loans held by FDIC-insured banks and thrifts remained unchanged at 4.26%. Based on the unpaid principal balance of loans (UPB), delinquency rates for each group at the end of the second quarter were as follows:
• CMBS: 8.22% (30+ days delinquent or in REO);
• Life company portfolios: 0.29% (60+days delinquent);
• Fannie Mae: 0.80% (60 or more days delinquent)
• Freddie Mac: 0.28% (60 or more days delinquent);
• Banks and thrifts: 4.26% (90 or more days delinquent or in non-accrual).
Monday, October 18, 2010
7 Million Mortgages: late
~ 7 million mortgages past due ~
There are 7,018,000 mortgages in the United States that are 30 or more days delinquent or in the process of foreclosure, according to new data from Lender Processing Services (LPS). The Florida-based analytics and technology firm offered the media a preview Friday of its September month-end mortgage performance figures, derived from the company’s loan-level database of nearly 40 million mortgage loans. Of the more than 7 million home loans in the country currently going unpaid, 2,055,000 have already commenced foreclosure proceedings. LPS reports that 4,963,000 are in the pre-foreclosure default stages, with nearly half of these falling into the 90-plus-days delinquent bucket. LPS’ measurement of the U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure) rose to 9.27 percent as of the end of September. That’s a 0.6 percent increase over the previous month, but down 7.8 percent compared to last September.
The nation’s pre-sale foreclosure inventory rate stands at 3.84
percent, according to LPS’ market data – up 1.1 percent from the August reading and 3.6 percent above a year earlier. LPS says the states with the highest percentage of non-current loans (defined as the total number of foreclosures and delinquencies as a percent of all active loans in that state) include: Florida, Nevada, Mississippi, Georgia, and Louisiana. The lowest percentage of non-current loans can be found in: Montana, Wyoming, Arkansas, South Dakota, and North Dakota.
There are 7,018,000 mortgages in the United States that are 30 or more days delinquent or in the process of foreclosure, according to new data from Lender Processing Services (LPS). The Florida-based analytics and technology firm offered the media a preview Friday of its September month-end mortgage performance figures, derived from the company’s loan-level database of nearly 40 million mortgage loans. Of the more than 7 million home loans in the country currently going unpaid, 2,055,000 have already commenced foreclosure proceedings. LPS reports that 4,963,000 are in the pre-foreclosure default stages, with nearly half of these falling into the 90-plus-days delinquent bucket. LPS’ measurement of the U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure) rose to 9.27 percent as of the end of September. That’s a 0.6 percent increase over the previous month, but down 7.8 percent compared to last September.
The nation’s pre-sale foreclosure inventory rate stands at 3.84
percent, according to LPS’ market data – up 1.1 percent from the August reading and 3.6 percent above a year earlier. LPS says the states with the highest percentage of non-current loans (defined as the total number of foreclosures and delinquencies as a percent of all active loans in that state) include: Florida, Nevada, Mississippi, Georgia, and Louisiana. The lowest percentage of non-current loans can be found in: Montana, Wyoming, Arkansas, South Dakota, and North Dakota.
Sunday, October 17, 2010
Freddie Mac- Mortgage Rates
Freddie Mac - mortgage rate hits new record [low as they GO]
The 30-year, fixed-rate mortgage hit its lowest point in more than 50 years. The Freddie Mac Primary Mortgage Market Survey reported the average rate for a 30-year, fixed-rate mortgage at 4.19% with an average 0.8 origination point for the week ending Oct. 14, down from last week's average of 4.27%. A year ago the average was 4.92%. This is the lowest rate the survey has recorded since its inception in 1971. Mortgage rates were last at this level in April 1951, according to Freddie Mac. The Bankrate survey of large banks and thrifts reported the average rate for a 30-year, fixed mortgage is 4.47% with a 0.32 origination point, slightly above the 25-year-old survey's record low of 4.45% posted last month. Rates for 15-year FRMs are falling steeply, setting a new low for Freddie Mac.
The GSE said the rate was down to 3.62% with an average origination point of 0.8. The rate for a 15-year FRM was 4.37% a year earlier. Bankrate said the average rate for 15-year, FRMs of 3.85% is a new record low and down from 3.87% a week earlier. Frank Nothaft, vice president and chief economist at Freddie Mac, attributed the declining rates to the loss of 95,000 nonfarm payroll jobs in September. The GSE said the average for a 5-year, adjustable-rate mortgage is 3.47% with an average 0.6 origination point, down from 4.38% a year ago. The average remained flat with last week. Bankrate reported the average rate for a 5-year, ARM fell last week to 3.62% from 3.64% previously. The one-year Treasury-indexed ARM averaged 3.43% with an average 0.7 point up slightly from 3.4%. At this time last year, the one-year ARM averaged 4.6%.
The 30-year, fixed-rate mortgage hit its lowest point in more than 50 years. The Freddie Mac Primary Mortgage Market Survey reported the average rate for a 30-year, fixed-rate mortgage at 4.19% with an average 0.8 origination point for the week ending Oct. 14, down from last week's average of 4.27%. A year ago the average was 4.92%. This is the lowest rate the survey has recorded since its inception in 1971. Mortgage rates were last at this level in April 1951, according to Freddie Mac. The Bankrate survey of large banks and thrifts reported the average rate for a 30-year, fixed mortgage is 4.47% with a 0.32 origination point, slightly above the 25-year-old survey's record low of 4.45% posted last month. Rates for 15-year FRMs are falling steeply, setting a new low for Freddie Mac.
The GSE said the rate was down to 3.62% with an average origination point of 0.8. The rate for a 15-year FRM was 4.37% a year earlier. Bankrate said the average rate for 15-year, FRMs of 3.85% is a new record low and down from 3.87% a week earlier. Frank Nothaft, vice president and chief economist at Freddie Mac, attributed the declining rates to the loss of 95,000 nonfarm payroll jobs in September. The GSE said the average for a 5-year, adjustable-rate mortgage is 3.47% with an average 0.6 origination point, down from 4.38% a year ago. The average remained flat with last week. Bankrate reported the average rate for a 5-year, ARM fell last week to 3.62% from 3.64% previously. The one-year Treasury-indexed ARM averaged 3.43% with an average 0.7 point up slightly from 3.4%. At this time last year, the one-year ARM averaged 4.6%.
Wednesday, October 13, 2010
Foreclosures and short sales at 26% discount
Foreclosures and short sales at 26% discount
According to RealtyTrac, nearly 250,000 residential properties in some stage of foreclosure changed hands during the second quarter. They sold for about 26% less than non-foreclosed homes, compared to 35% less in the first quarter. A little more than half of these deals were of properties repossessed by banks, and the remainder came from short sales. There was regional variation in the foreclosure sales data. Rust Belt states like Ohio and Michigan had moderately or high levels of foreclosure sales, but the former bubble states is where foreclosures really dominate. In Nevada, they accounted for 56% of all transactions, the highest percentage in the nation. Arizona (47%) and California (43%) also had very high levels. Foreclosure sales were much rarer in Iowa (4.4%), the District of Columbia (5.6%), Montana (6.4%) and New York (7.5%). The best foreclosure deals were to be found in Ohio, where foreclosure properties sold for 43% less than non-foreclosed homes. Kentucky's
discount was 41%, and California's 39%.
According to RealtyTrac, nearly 250,000 residential properties in some stage of foreclosure changed hands during the second quarter. They sold for about 26% less than non-foreclosed homes, compared to 35% less in the first quarter. A little more than half of these deals were of properties repossessed by banks, and the remainder came from short sales. There was regional variation in the foreclosure sales data. Rust Belt states like Ohio and Michigan had moderately or high levels of foreclosure sales, but the former bubble states is where foreclosures really dominate. In Nevada, they accounted for 56% of all transactions, the highest percentage in the nation. Arizona (47%) and California (43%) also had very high levels. Foreclosure sales were much rarer in Iowa (4.4%), the District of Columbia (5.6%), Montana (6.4%) and New York (7.5%). The best foreclosure deals were to be found in Ohio, where foreclosure properties sold for 43% less than non-foreclosed homes. Kentucky's
discount was 41%, and California's 39%.
Foreclosures and short sales at 26% discount
Foreclosures and short sales at 26% discount
According to RealtyTrac, nearly 250,000 residential properties in some stage of foreclosure changed hands during the second quarter. They sold for about 26% less than non-foreclosed homes, compared to 35% less in the first quarter. A little more than half of these deals were of properties repossessed by banks, and the remainder came from short sales. There was regional variation in the foreclosure sales data. Rust Belt states like Ohio and Michigan had moderately or high levels of foreclosure sales, but the former bubble states is where foreclosures really dominate. In Nevada, they accounted for 56% of all transactions, the highest percentage in the nation. Arizona (47%) and California (43%) also had very high levels. Foreclosure sales were much rarer in Iowa (4.4%), the District of Columbia (5.6%), Montana (6.4%) and New York (7.5%). The best foreclosure deals were to be found in Ohio, where foreclosure properties sold for 43% less than non-foreclosed homes. Kentucky's
discount was 41%, and California's 39%.
According to RealtyTrac, nearly 250,000 residential properties in some stage of foreclosure changed hands during the second quarter. They sold for about 26% less than non-foreclosed homes, compared to 35% less in the first quarter. A little more than half of these deals were of properties repossessed by banks, and the remainder came from short sales. There was regional variation in the foreclosure sales data. Rust Belt states like Ohio and Michigan had moderately or high levels of foreclosure sales, but the former bubble states is where foreclosures really dominate. In Nevada, they accounted for 56% of all transactions, the highest percentage in the nation. Arizona (47%) and California (43%) also had very high levels. Foreclosure sales were much rarer in Iowa (4.4%), the District of Columbia (5.6%), Montana (6.4%) and New York (7.5%). The best foreclosure deals were to be found in Ohio, where foreclosure properties sold for 43% less than non-foreclosed homes. Kentucky's
discount was 41%, and California's 39%.
Saturday, October 9, 2010
Condo , San Clemente
3BR/2+1BA Townhouse offered at $435,000
Year Built 2004
Sq Footage 1,634
Bedrooms 3
Bathrooms 2 full, 1 partial
Floors 2
Parking 2 Car garage
Lot Size 3,800 sqft
HOA/Maint $174 per month
DESCRIPTION
Property available now with instant equity! Not on MLS; Standard sale. Priced to sell fast! Beautiful San Clemente – Talega 3 bdrm townhouse in awesome location. Move–in condition! Two units just sold for ~$20k more. Great deal! Contact me if interested.
click on thumbnail to enlarge
Year Built 2004
Sq Footage 1,634
Bedrooms 3
Bathrooms 2 full, 1 partial
Floors 2
Parking 2 Car garage
Lot Size 3,800 sqft
HOA/Maint $174 per month
DESCRIPTION
Property available now with instant equity! Not on MLS; Standard sale. Priced to sell fast! Beautiful San Clemente – Talega 3 bdrm townhouse in awesome location. Move–in condition! Two units just sold for ~$20k more. Great deal! Contact me if interested.
click on thumbnail to enlarge
Tuesday, August 10, 2010
Foreclosures to persist
Foreclosures to persist
According to authors at the Federal Reserve Bank of Cleveland, the nation’s high foreclosure rate is likely to persist. The Fed article looks at the changes in foreclosure and unemployment rates across states, noting the differences in the timing of the movements. The conjecture that the high foreclosure rate will persist is based in part on the observation that states that experienced boom-bust housing cycles in the past (Texas, Oklahoma, Massachusetts and California) had elevated foreclosure starts for years after the peak in foreclosure starts and inventory. These previous boom-bust cycles “were small in comparison to the current cycle,” the article said. While the recession has left deep scars in the housing and labor markets — with the unemployment rate doubling and the foreclosure start rate roughly tripling — the timing of the movements differs over the cycle, according to the abstract, written by the vice president at the Federal Reserve Bank of Cleveland, and K.F., a research assistant.
In So-Cal every Wednesday morning there is a short sale workshop open to the public, allowing homeowners, agents, brokers or investors the opportunity to see and participate in how and why this has been changing communities across our nation. Join us this week or any week for a fulfilling chance at making a difference in the lives of others.
According to authors at the Federal Reserve Bank of Cleveland, the nation’s high foreclosure rate is likely to persist. The Fed article looks at the changes in foreclosure and unemployment rates across states, noting the differences in the timing of the movements. The conjecture that the high foreclosure rate will persist is based in part on the observation that states that experienced boom-bust housing cycles in the past (Texas, Oklahoma, Massachusetts and California) had elevated foreclosure starts for years after the peak in foreclosure starts and inventory. These previous boom-bust cycles “were small in comparison to the current cycle,” the article said. While the recession has left deep scars in the housing and labor markets — with the unemployment rate doubling and the foreclosure start rate roughly tripling — the timing of the movements differs over the cycle, according to the abstract, written by the vice president at the Federal Reserve Bank of Cleveland, and K.F., a research assistant.
In So-Cal every Wednesday morning there is a short sale workshop open to the public, allowing homeowners, agents, brokers or investors the opportunity to see and participate in how and why this has been changing communities across our nation. Join us this week or any week for a fulfilling chance at making a difference in the lives of others.
Thursday, August 5, 2010
Stop Foreclosure's
20 million underwater mortgages by 2012?
More than 14 million borrowers were underwater as of Q110, and with a further 10.8% decline in house prices expected relative to Q409 levels, another 6 million borrowers are likely fall into negative equity by the end of 2011, according to commentary today by Deutsche Bank. The presence of negative equity goes hand-in-hand with an increased likelihood of strategic default, as borrowers may sometimes not be willing to pay the mortgage when the house has lost substantial amounts of value. The firm noted that, even when strategic default makes economic sense, many borrowers resist on moral and social grounds, as well as from fear of legal consequences. The existence of recourse — when a lender is able to pursue a borrower's other assets — also acts as a disincentive against strategic default.
Deutsche Bank noted 11 states are considered non-recourse — though not all explicitly forbid deficiency judgments on homes or on purchase loans. Underwater borrowers are more likely to default in non-recourse states. The greater the negative equity, the higher the cumulative default rate. "Walk away or strategic default from a house with negative equity makes economic sense, especially in locations that have less expensive rentals," Deutsche Bank researchers said. "Many existing academic studies model homeowners' default decision based on the theoretical hypothesis that a borrower would exercise a default when it is in-the-money, i.e., when the borrower's house has negative equity. Therefore, a homeowner with negative equity would default even though they can still afford to make their mortgage payments.
We will assist anyone in fighting off the foreclosure process, let's change the perception of this current financial environment!
More than 14 million borrowers were underwater as of Q110, and with a further 10.8% decline in house prices expected relative to Q409 levels, another 6 million borrowers are likely fall into negative equity by the end of 2011, according to commentary today by Deutsche Bank. The presence of negative equity goes hand-in-hand with an increased likelihood of strategic default, as borrowers may sometimes not be willing to pay the mortgage when the house has lost substantial amounts of value. The firm noted that, even when strategic default makes economic sense, many borrowers resist on moral and social grounds, as well as from fear of legal consequences. The existence of recourse — when a lender is able to pursue a borrower's other assets — also acts as a disincentive against strategic default.
Deutsche Bank noted 11 states are considered non-recourse — though not all explicitly forbid deficiency judgments on homes or on purchase loans. Underwater borrowers are more likely to default in non-recourse states. The greater the negative equity, the higher the cumulative default rate. "Walk away or strategic default from a house with negative equity makes economic sense, especially in locations that have less expensive rentals," Deutsche Bank researchers said. "Many existing academic studies model homeowners' default decision based on the theoretical hypothesis that a borrower would exercise a default when it is in-the-money, i.e., when the borrower's house has negative equity. Therefore, a homeowner with negative equity would default even though they can still afford to make their mortgage payments.
We will assist anyone in fighting off the foreclosure process, let's change the perception of this current financial environment!
Saturday, July 31, 2010
Housing Down
The Commerce Department says housing starts dropped 5.0% to a seasonally adjusted annual rate of 549,000 units, the lowest level since October. It was the second straight month of decline in activity and was well below market expectations for a 580,000-unit rate. May's housing starts were previously reported as a 10.0% drop, but are now revised down to show a 14.9% decline. Compared to June last year, starts were down 5.8%, the biggest decline since November. Driving the June decline was a more than 20% drop in the volatile condominium and apartment market. Construction of single-family homes, the biggest part of the market, was down slightly by 0.7%. The only positive sign in the report was an unexpected 2.1% rise in applications for building permits to a 586,000-unit pace in June.
That followed a 5.9% drop in May and compared to analysts' expectations for a slip to 570,000 units. Still, the slumping job market and competition from foreclosed properties have forced builders to limit construction, especially after tax credits that spurred sales expired at the end of April. "Despite record low mortgage rates, housing is at risk of a double dip unless job growth strengthens soon," said Sal Guatieri, senior economist at BMO Capital Markets. Economists had had predicted that construction would fall to a rate of 580,000 and had projected that building permits would sink to a rate of 570,000, according to Thomson Reuters. In a typical economic recovery, the construction sector provides much of the fuel. But not this time. While developers have cut back on construction and the number of new homes on the market has fallen dramatically, they still must compete against foreclosed homes selling at deep discounts.
That followed a 5.9% drop in May and compared to analysts' expectations for a slip to 570,000 units. Still, the slumping job market and competition from foreclosed properties have forced builders to limit construction, especially after tax credits that spurred sales expired at the end of April. "Despite record low mortgage rates, housing is at risk of a double dip unless job growth strengthens soon," said Sal Guatieri, senior economist at BMO Capital Markets. Economists had had predicted that construction would fall to a rate of 580,000 and had projected that building permits would sink to a rate of 570,000, according to Thomson Reuters. In a typical economic recovery, the construction sector provides much of the fuel. But not this time. While developers have cut back on construction and the number of new homes on the market has fallen dramatically, they still must compete against foreclosed homes selling at deep discounts.
Thursday, July 29, 2010
Obama’s mortgage plan in troubled waters
A new government report released Monday shows that more troubled homeowners have fallen out of trial mortgage modifications than have received long-term help The administration's signature housing-rescue plan, Home Affordable Modification Program, known as HAMP saw a surge of people leave the initiative in May. More than 152,000 have had their trial adjustments cancelled since the program started, mainly because they could not document their income or because they earned too much to qualify for assistance, officials said. Nearly 430,000 borrowers have had their trials cancelled -- more than one-third of the total started. Servicers place troubled borrowers in trial modifications for several months to verify their income and see whether they can make the lowered payments. More than 70% of those cancelled this month had been in trial for at least six months.
"The administration's housing policies, combined with actions of the Fed, have lowered mortgage interest rates, helped stabilize home prices and reduced the rate of foreclosures, repairing some of the damage caused by the financial crisis to the financial security of millions and millions of American families," said Treasury Secretary Tim Geithner. But a deeper look at the scorecard shows that dark clouds remain over the housing market. Completed foreclosures soared to 93,800 in May, up from 65,000 a year earlier, while delinquency rates for borrowers with the best credit history jumped a full point to 5.9% in the first quarter. Borrowers who owe more than their house is worth rose to 11.3 million in the first quarter, up from 10.2 million a year earlier. The number of vacant homes held off the market rose to 3.6 million in the first quarter, up from 3.5 million a year earlier. The number of mortgages refinanced in the first quarter fell to 1.17 million, from 1.31 million during the same period in 2009.
A new government report released Monday shows that more troubled homeowners have fallen out of trial mortgage modifications than have received long-term help The administration's signature housing-rescue plan, Home Affordable Modification Program, known as HAMP saw a surge of people leave the initiative in May. More than 152,000 have had their trial adjustments cancelled since the program started, mainly because they could not document their income or because they earned too much to qualify for assistance, officials said. Nearly 430,000 borrowers have had their trials cancelled -- more than one-third of the total started. Servicers place troubled borrowers in trial modifications for several months to verify their income and see whether they can make the lowered payments. More than 70% of those cancelled this month had been in trial for at least six months.
"The administration's housing policies, combined with actions of the Fed, have lowered mortgage interest rates, helped stabilize home prices and reduced the rate of foreclosures, repairing some of the damage caused by the financial crisis to the financial security of millions and millions of American families," said Treasury Secretary Tim Geithner. But a deeper look at the scorecard shows that dark clouds remain over the housing market. Completed foreclosures soared to 93,800 in May, up from 65,000 a year earlier, while delinquency rates for borrowers with the best credit history jumped a full point to 5.9% in the first quarter. Borrowers who owe more than their house is worth rose to 11.3 million in the first quarter, up from 10.2 million a year earlier. The number of vacant homes held off the market rose to 3.6 million in the first quarter, up from 3.5 million a year earlier. The number of mortgages refinanced in the first quarter fell to 1.17 million, from 1.31 million during the same period in 2009.
Drop in Home Sales
Is Drop in Home Sales Good News? Only if you want to thrive!
“For all of you out there who accuse me of perpetual bearishness, here's a twist: What if the drop in existing home sales in May is a good thing? Try to follow me on this: Everyone expected home sales to surge in May because this Realtor's survey is based on closings in May from contracts signed in March and April. The May and June numbers should reflect the surge from the now-expired home buyer tax credit. Well today's report showed a drop of 2.2 percent in existing home sales, leading us to believe that this last government stimulus really didn't do the trick. So what if it didn't? Last fall the tax credit really juiced the market, pulling demand forward, so that we saw a huge drop-off in the months following what we thought was the end of the credit, which was then of course extended and expanded.
So now we're not seeing the same juice, but the numbers aren't terrible either. Perhaps there was no big rush, so perhaps there will be no big drop-off. Here's what we do know: (a) First-time homebuyers accounted for 46% of sales in May (49% in April) (b) Investors accounted for 14% of sales in May (15% in April) (c) All cash accounted for 25% of sales in May (26% in April). So first time buyers actually fell in numbers, but investors and all cash (which are often investors) remained pretty steady. Investors, at least for distressed properties, are what we need right now to soak up all the excess inventory. Don't get me wrong, I'm pretty certain we're going to see a drop-off in sales. A lot of sellers probably got caught up in the idea that the stimulus would create lasting recovery, and so decided to jump in. Tomorrow we get the report on sales of new construction in May. That report is based on contracts signed in May, not closings, so it will give us an idea of just how bad the post credit hangover will be.”
“For all of you out there who accuse me of perpetual bearishness, here's a twist: What if the drop in existing home sales in May is a good thing? Try to follow me on this: Everyone expected home sales to surge in May because this Realtor's survey is based on closings in May from contracts signed in March and April. The May and June numbers should reflect the surge from the now-expired home buyer tax credit. Well today's report showed a drop of 2.2 percent in existing home sales, leading us to believe that this last government stimulus really didn't do the trick. So what if it didn't? Last fall the tax credit really juiced the market, pulling demand forward, so that we saw a huge drop-off in the months following what we thought was the end of the credit, which was then of course extended and expanded.
So now we're not seeing the same juice, but the numbers aren't terrible either. Perhaps there was no big rush, so perhaps there will be no big drop-off. Here's what we do know: (a) First-time homebuyers accounted for 46% of sales in May (49% in April) (b) Investors accounted for 14% of sales in May (15% in April) (c) All cash accounted for 25% of sales in May (26% in April). So first time buyers actually fell in numbers, but investors and all cash (which are often investors) remained pretty steady. Investors, at least for distressed properties, are what we need right now to soak up all the excess inventory. Don't get me wrong, I'm pretty certain we're going to see a drop-off in sales. A lot of sellers probably got caught up in the idea that the stimulus would create lasting recovery, and so decided to jump in. Tomorrow we get the report on sales of new construction in May. That report is based on contracts signed in May, not closings, so it will give us an idea of just how bad the post credit hangover will be.”
Wednesday, July 28, 2010
foreclosures vs short sale
Depending on the State, an NOD (notice of default) gets filed by the lender or bank in public records dept. This notice refers to the owner of the mortgage note is 90 days late and the foreclosure process ensues, the bank shells out all the admin costs and among other things the home owner now is required to pay in full plus penalties or risk the loss of their home, and in most cases takes a 7 year hit on their credit report. During this time knowing any day that an eviction notice gets pinned to the door or a knock on the door has the new buyer at auction, calling to claim their property.
Short Sales change the dynamic entirely in a positive direction. An Investor or Agent negotiates a lesser balance payoff to the mortgage note, the lender wipes this non performing asset off their books, the homeowner leaves with no costs and little damage to their credit, hence allowing quicker recovery time for their status. The Realtor or Broker gets a home to list with instant equity and faster turnover rate. The State, County starts their tax basis recovery and a new family finds their dream home while the bank or lender gets back to loaning money, all in one transaction
Short Sales change the dynamic entirely in a positive direction. An Investor or Agent negotiates a lesser balance payoff to the mortgage note, the lender wipes this non performing asset off their books, the homeowner leaves with no costs and little damage to their credit, hence allowing quicker recovery time for their status. The Realtor or Broker gets a home to list with instant equity and faster turnover rate. The State, County starts their tax basis recovery and a new family finds their dream home while the bank or lender gets back to loaning money, all in one transaction
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