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Folsom Distressed Homes November Report
Folsom is still seeing Notice of Defaults(NOD) filed on homes. In November 50 homes had NOD’s filed on them, down 23.08% from this time last year. Notice of Trustee Sales(NOT) are up 59.45% from this time last year. Folsom homes ranging in size of 1,250 to 1,500 square feet had the highest NOD’s with 10 in that category. There was a tie for the Notice of Trustee Sale sized homes, 3,000sqft and above had 6 NOT’s and so did 2,000 – 2,500sqft homes.
Folsom Defaults and Trustee Sales
Folsom Foreclosures for November 2010
Folsom Foreclosure Outcomes for November 2010
In the chart above you can see what happened to the 35 Folsom homes to be foreclosed on in November. Out of the 35 homes, 34.29% did go back to the bank. Another 42.86% of the homes that were due to be foreclosed on were canceled, possibly because they were negotiating a short sale, or loan modification. Seven homes, or 20% were sold to a third party on the court house steps.
Wells Fargo Modifying Loans For Old Wachovia & World Savings Pick-a-Pay Mortgages
Folsom Home Owners: Did you have a Wachovia or World Savings Pick-a-Pay Mortgage?
This from the Sacramento Business Journal (12/21/10)
Wells Fargo will modify loans to thousands of California homeowners with pick-a-pay loans, the controversial financing that led many consumers into bankruptcy and foreclosure — and greatly hurt the housing market.
The bank will pay $2 billion under the agreement.
Wells will also pay $32 million to thousands of homeowners who lost their homes through foreclosure with the pick-a-pay loans, which allowed borrowers to make payments at various levels, from the monthly interest and principal due to interest-only loans. Then, the loans would reset at much-higher rates, forcing homeowners deeper in debt or out of their homes.
The bad economy and double-digit jobless rate have increased the problem during the past few years, as cash-strapped homeowners get behind on their mortgages, including the Sacramento region, one of the hardest-hit markets for foreclosures in the nation.
Now, Wells Fargo did not approve or fund these loans, but Wachovia Bank and World Savings Bank did. Wachovia bought World Savings in 2006, and Wells Fargo acquired Wachovia two years later.
Under the agreement, Wells Fargo will offer affordable loan modifications to about 14,900 borrowers in the state with pick-a-pay loans approved by Wachovia or World Savings. Many of the loan modifications will include principal forgiveness, according to Attorney General officials. The agreement is expected to reach more than $2 billion.
Wells Fargo will also pay $32 million in restitution to more than 12,000 borrowers who used pick-a-pay loans and lost their homes through foreclosure. Payments will average about $2,650.
The bank has been aggressively working with homeowners who have the former Wachovia and World Savings loans, with about 577,000 modifications nationally, said Frankin Codel, chief financial officer of Wells Fargo Home Mortgage in Des Moines, Iowa. He added the banking giant will continue to work with homeowners who are experiencing problems with the pick-a-pay program.
The bank has conducted three home preservation workshops in the state, the closest was in Oakland. Wells Fargo also has opened 15 home preservations centers to help homeowners, Codel said.
California borrowers eligible for loan modifications should get a notice from Wells Fargo within the next two months, while borrowers who endured foreclosures should be contacted during the first six months of the year.
Wells Fargo customers looking for more information about the loan modification program, should call 888-565-1422.
“Customers were offered adjustable-rate loans with payments that mushroomed to amounts that ultimately thousands of borrowers could not afford,” California Attorney General Jerry Brown said in a news release Monday. “Recognizing the harm caused by these loans, Wells Fargo accepted responsibility and entered into this settlement agreement.”
Wells Fargo Home Mortgage co-president Mike Heid said the agreement Monday with the Attorney General will “assist with outreach, so that we can continue to work with as many customers as possible on the options available to them to prevent foreclosures.”
Wells Fargo is the leading bank in the four-county Sacramento region, with about $8 billion in deposits and 25 percent market share, according to the Federal Deposit Insurance Corp.
Wells Fargo has reached similar agreements in Arizona, Colorado, Florida, Illinois, Nevada, New Jersey, Texas and Washington state.
Pay Borrowers to Pay Their Mortgage? – Developments – WSJ
By Nick Timiraos
How do you get borrowers to avoid walking away from homes that are deeply underwater without encouraging more to follow by writing down principal balances? One idea: Pay them to keep paying their mortgage.
The novel approach is being touted by Loan Value Group LLC, a firm selling their idea�and ready-made application�to mortgage investors nervous about the risk of strategic default, where borrowers walk away from their homes even though they can afford to pay their mortgages.� The firm says it’s signed up an undisclosed mortgage investor to test a pilot program with a few hundred borrowers.
Here’s how the program works: The mortgage investor (possibly joining with other risk holders, such as mortgage insurers or second-mortgage holders) offers a cash reward to borrowers if they agree to keep paying their mortgage. The incentive amount varies by borrower depending on income, negative equity, geography and other risk factors�those who are more likely to cause steep losses receive a bigger carrot. The “responsible homeowner reward” grows for up to five years as the borrower makes monthly mortgage payments.
The borrower can’t collect that cash payment until the mortgage is paid off (though investors could allow the reward to be used towards paying off the mortgage in a sale or refinancing if the reward amount is enough to close the transaction).
The main goal of the program is to avoid the moral hazard and upfront costs to the investor associated with writing down borrowers loans. “When you make it so a borrower doesn’t have to do anything negative to get the reward, you remove moral hazard,” says Frank Pallotta, a founder of Loan Value Group who previously led mortgage banking teams at Morgan Stanley and Credit Suisse.
The size of the reward isn’t going to make up for the borrower’s entire negative equity whole, but Mr. Pallotta says the incentive payments are designed to present enough of a “shock-and-awe number upfront” to change the borrower’s psychology. Instead of thinking about how much debt they’re getting out of by walking away, maybe some borrowers will think about the cash bonus they’ll get if they stay current and are able to recover their equity if home prices stabilize and recover.
At the same time, investors don’t have to consider writing down the principal of the loan, which can often require the investor to mark-to-market the restructured loan and recognize an immediate loss.
The program isn’t designed to help borrowers who can’t afford their mortgage, though mortgage-holders certainly could offer the program to at-risk borrowers who’ve already received a modification in their monthly payments through the government’s Home Affordable Modification Program.
To be sure, the program raises plenty of questions: will investors want to put up cash for borrowers who might pay anyway? Mr. Pallotta says the program is liable to pay for itself if it only convinces a small fraction of borrowers to avoid walking away, given the significantly higher costs of foreclosure. If strategic defaults are as serious a problem as some housing analysts and studies show, it will certainly be worth watching to see if such a program catches on with other investors.
Follow Nick on Twitter for more housing and mortgage news: twitter.com/NickTimiraos
This is an interesting idea. I will let you know if I hear it come available in our area.
Lenders Get the Christmas Spirit
Its that time of year, warm fuzzy feelings, good cheer, etc. Some lenders are putting a freeze on foreclosures until after the holidays. Citimortage will not foreclosure from 12/13 to 1/17/10, if they own the loan. Fannie Mae is holding off on foreclosures from 12/19 through 1/3/10. I am sure more will announce later today.
Obviously this is a good thing for families that are waiting for the foreclosure and eviction notice. But, most of these lenders know bad press when they see it. It does look bad to have their name in the press evicting a family during the holidays.
Perhaps a better present would be a quick and realistic loan mod?
Posted via web from Folsom Foreclosures
HAMP Report: Few Loan Modifications Made Permanent
From MND Newswire:
HAMP Report: Few Loan Modifications Made Permanent
Posted to: MND NewsWire
Thursday, December 10, 2009 4:52 PM
The Treasury Department released data Thursday on activity in its Making Home Affordable (HAMP) program during the month of November. As expected from earlier comments made by Treasury officials, borrowers continued to enter the program under trial modifications, but the rate of permanent modifications remains well below expectations.
Cumulative figures for the program by the end of November show participating servicers had sent a total of 3,137,548 requests for financial information to borrowers thought eligible for the foreclosure prevention program and had extended 1,032,827 invitations to participate in a trial modification program, up from 920,000 in October.
There are currently 728,408 borrowers actively participating in loan modifications, however, only 4.3 percent of those modifications, or 31,382, have been converted to permanent status.
The HAMP program involves 78 servicers who manage approximately 85 percent of eligible mortgage debt in the country. These servicers are paid an incentive by the Treasury Department for enrolling troubled borrowers in the program and completing loan modifications. The workouts must lower borrower payments to a maximum of 31 percent of the borrowers’ monthly income. It is estimated that homeowners who are enrolled in the program have saved an average of $550 per month on their mortgage payments.
GMAC has been the most successful servicer in converting trials to permanent modification status with 7,111 completions. J.P. Morgan Chase and Ocwen Financial have each converted around 4,300 loans. Some servicers have completed no conversions and one or two have not enrolled even one borrower in trial programs.
The number of trial modifications in November rose nearly 11 percent over October’s figure of almost 660,000 but 30,650 of the modifications started in the seven months since the program got off the ground are no longer active. This is roughly the same number as have moved into permanent status.
In a written report to the House Financial Services Committee earlier this week, Assistant Treasury Secretary Herbert Allison warned that performance figures would be disappointing. He said that, while most borrowers in trial programs are current on their payments, servicers blame the lack of conversions on missing documentation from borrowers while the borrowers and mortgage counselors assisting them are complaining that servicers are mishandling and losing data that is submitted He told the committee that Treasury is moving to improve the conversion figures by working more closely with servicers, withholding incentive payments until conversions are complete, and improving the HAMP website to make it easier for borrowers to comply with program requirements.
Posted via email from Mechelle Gooch’s Real Estate Bits
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