-----Original Message----- From: [email protected] [mailto:[email protected]] On Behalf Of [email protected] Sent: Tuesday, February 23, 2010 12:43 AM To: [email protected] Cc: [email protected] Subject: EconomicWar> Delinquency Rate Down but Foreclosures at All Time High<Fwd>
-------- Original Message -------- Subject: FWD: Delinquency rate down but foreclosures at all time high Date: Mon, 22 Feb 2010 09:48:09 -0800 From: N joseph < > FYI Delinquency rate down but foreclosures at all time high On April 5, 2010, the U.S. government will implement the Home Affordable Foreclosure Alternatives Program. Part of the Home Affordable Modification Program, HAFA helps homeowners who are unable to retain their home under HAMP by simplifying and streamlining the use of short sales and deeds-in-lieu of foreclosures. Homeowners must meet certain requirements to participate and incentive payments are provided to homeowners and servicers. To help Realtors understand HAFA and its guidelines, NAR has released a brochure about the Home Affordable Foreclosure Alternatives Program and additional resources online, including government forms and guidelines, a video explaining the new federal guidelines, and frequently asked questions. Designed to help Realtors explain the new program to homeowners, NAR’s HAFA resources explain how the program aims to streamline short sales and, in the process, save more families from foreclosure. “The new guidelines and incentives as part of HAFA are a crucial step towards reducing problems with the short sale process, and Realtors are ready to help make this new program a success,” said Golder. Ex-US Treasury Secretaries Back Volcker Rule Five former Treasury secretaries - Michael Blumenthal, Nicholas Brady, Paul O'Neill, George Shultz and John Snow - urged Congress to bar banks that receive federal support from engaging in speculative activity unrelated to basic bank services. "The principle can be simply stated," the five said in a letter to The Wall Street Journal. "Banks benefiting from public support by means of access to the Federal Reserve and FDIC insurance should not engage in essentially speculative activity unrelated to essential bank services." The Treasury secretaries insisted, however, that hedge funds, private-equity firms and other organizations engaged in speculative trading should be "free to compete and innovate" but should not expect taxpayers to back up their endeavors. "They should, like other private businesses, ... be free to fail without explicit or implicit taxpayer support," said the former secretaries for both Republican and Democratic presidents. The appeal comes as Senate lawmakers are pressing ahead with efforts to produce a financial regulatory reform bill that would curb some of the practices that led to the 2008 financial crisis. The regulatory reform proposal endorsed by the five former Treasury secretaries is the so-called Volcker Rule, formulated by former Federal Reserve Chairman Paul Volcker, a top economic adviser to President Obama. Obama surprised the financial markets in late January when he announced the proposal, which calls for new limits on banks' ability to do proprietary trading, or buying and selling of investments for their own accounts unrelated to customers. Delinquency rate down but foreclosures at all time high According to the Mortgage Bankers Association’s (MBA) National Delinquency Survey, the delinquency rate for mortgage loans on one-to-four-unit residential properties fell to a seasonally adjusted rate of 9.47 percent of all loans outstanding as of the end of the fourth quarter of 2009, down 17 basis points from the third quarter of 2009, and up 159 basis points from one year ago. The non-seasonally adjusted delinquency rate increased 50 basis points from 9.94 percent in the third quarter of 2009 to 10.44 percent this quarter. The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the fourth quarter was 4.58 percent, an increase of 11 basis points from the third quarter of 2009 and 128 basis points from one year ago. The combined percentage of loans in foreclosure or at least one payment past due was 15.02 percent on a non-seasonally adjusted basis, the highest ever recorded in the MBA delinquency survey. The percentage of loans on which foreclosure actions were started during the fourth quarter was 1.20 percent, down 22 basis points from last quarter and up 12 basis points from one year ago. The percentages of loans 90 days or more past due and loans in foreclosure set new record highs. The percentage of loans 30 days past due is still below the record set in the second quarter of 1985. Jay Brinkmann, MBA’s chief economist, says, “Despite the drop in short-term delinquencies, foreclosure rates could continue to climb, however, based on the ability of borrowers 90 days or more delinquent to solve their problems. A sizable number of the loans in the 90+ day delinquent bucket are in loan modification programs. They are carried as delinquent until borrowers demonstrate they will make the payments agreed to in the plans." And we all know how well HAMP is working… Credit card rules are here Today the CARD act goes into effect and consumers finally get some relief from such practices as "double-cycle billing" and arbitrary rate increases. As with most government meddling though, the results aren't all rosy. For starters, consumers could suddenly find themselves socked with a variety of new fees and charges. Banks and other card issuers have already been aggressively implementing new fees or raising existing ones to help make up for any potential revenue lost as a result of the CARD Act. And whereas 3% was once the standard charge for rolling over a balance from one credit card to another, issuers like JPMorgan Chase are now assessing customers a 5% fee, according to Bill Hardekopf, CEO of the card rating site LowCards.com. With the new law setting no restrictions on the types of fees issuers can implement, consumers should pay particularly close attention to the "Terms and Conditions" section of their statement so they know exactly what they are being charged for, warn experts. Credit is poised to tighten even further. As part of the CARD Act, credit card companies will be severely restricted in how they market cards to college students, potentially shrinking an important part of their business. But issuers are also expected to implement much more severe underwriting practices. Some may demand, for example, details on an applicant's income or proof of other savings. Consumers may also be increasingly unable to enjoy the fruits of their spending as a result of the new law. It wasn't that long ago where a cardholder could easily earn credit towards a free airline ticket or cash back for every dollar spent. But issuers are now quietly becoming more stingy with their rewards in an effort to save money. Things aren't all bad though. One of the biggest victories for consumers in the new law are a series of limits on how and when credit card companies can set interest rates. Whereas in the past, banks could raise your annual percentage rate just for missing a payment on your cell phone bill or without giving a consumer much advance notice, such practices will soon be outlawed. Issuers now have to alert you at least 45 days in advance before raising your rate under the CARD Act. $1.5 billion - more details Remember on Friday we reported that Obama was going to use $1.5 billion of Troubled Asset Relief Program (TARP) funds to aid homeowners in select states? We have a few more details today: Treasury Department policy adviser Sarah Apsel, in a posting on the White House blog, said the program will apply to states where house prices have fallen more than 20% from their peak. William Apgar, Housing and Urban Development senior adviser for mortgage finance adds that the states were chosen because of these “precipitous house price declines” and holding a large number of “first and second mortgages underwater.” Apgar said related mortgage-backed securities investors are willing to take write-downs on the firsts, but want borrowers with a second, as is often the case, to be able to access federal funding. The industry recently sounded a warning against these so-called “silent seconds,” as it relates to investors; “Lien priority dictates that the first mortgage cannot be written down until the second is extinguished,” Amherst Securities said in that report. “Such price declines, coupled with the effects of high unemployment, means that many working and middle-class families in these areas are facing serious challenges,” Apsel wrote. “The effort we are announcing today will provide support for state housing finance agencies (HFAs) to design programs tailored to the urgent needs of particular communities.” According to Apsel, the funds will support programs geared toward sustainable and affordable homeownership including efforts to help unemployed homeowners, borrowers in negative equity positions and borrowers pressured by second mortgages. The Treasury will announce maximum state level allocations over the next two weeks, she said. The plan will support homeowners in California, Nevada, Arizona, Florida, and Michigan. Now on to our real estate investing educational section... Great Scams & Schemes “For every complicated problem there is a solution that is simple, direct, understandable and wrong.” H.L. Mencken Once upon a time, our ancestors believed the stars and sun rotated around the Earth; after all, it made perfect sense and one had only to gaze out upon the sky for confirmation of the obvious. Of course that "common sense" observation was entirely incorrect but that didn't stop it from being the prevalent explanation for hundreds of years. Throughout history, people have believed ridiculous things...and believed them so strongly that men of science have been persecuted for suggesting otherwise. Sadly, the more things change the more they stay the same especially in the "common sense" sciences of economics and finance. Today we face yet another simple solution that appeals to the average investor because it is direct and understandable...unfortunately, it's also incorrect. As incorrect as the idea of the Earth being the center of the known universe. The same hubris that caused man to assume the entire universe revolved around him seems to have struck the modern American who believes the entire financial world revolves around their ability to buy, sell and spend their way out of debt. Yet more and more people are beginning to suspect the true situation...the American economy may just be one of the largest Ponzi schemes' ever perpetuated on society. Take for instance Social Security - surely one of the most popular Ponzi Scheme's in existence - whereby workers pay into a system for years under the assumption they will have a nice little nest egg to fall back on during their retirement years. Unfortunately there isn't a savings account set aside since the funds taken from working employees are used to pay benefits for current retirees. As the number of retirees continues to climb, and the number of workers continues to decline...the Social Security system is fast approaching the Day of Reckoning that tears apart most Ponzi schemes...the inability to continue to raise funds fast enough to pay for current outlay. Or what about the bond market? It's not just America but the entire Western economic system that is drowning in debt, running huge budget deficits and printing more money than ever before in history....savvy investors should wonder who is willing to buy all this bad debt especially at such low interest rates? Make no mistake about it, the central banks are taking up the slack to purchase what "real" investors are not by using direct purchasing power from the Federal Reserve. So, what is a savvy investor to do in order to protect their purchasing power? Well first of all forget long term bonds; with a return of 3-4% these will be difficult (at best) to get rid of once interest rates begin to rise. Unless you believe we are in for an extended period of deflation...as in a long term depression...a mere three to four percent return on long term bonds is a sure-fire way to lock in real losses. As the economy slowly but surely begins to pick-up, most experts believe interest rates will have to increase at which point only real assets - like those of real estate - can protect the purchasing power of your portfolio. Given the policy actions of the past 18 months, most experts agree the risk of inflation continues to grow disproportionate to the ability of an average portfolio to keep pace. That is why savvy investors must learn to look beyond the "simple" solutions proposed by traditional financial advisors and instead, turn to new methods like short sale real estate that provide absolute rates of return without cause of concern related to inflation, market risk or other trends. The fast turn-around time combined with high leverage allow investors to realize extraordinary gains with minimal risk. Add in tax advantages, flexible individual and/or corporate structure plus the ability to generate full-time income with only a few hours of work each week and you have a non-common recipe for investment success. No schemes, no scams...we leave that to the bankers and bail-out guru's to manage...just results. See you at the top! Chris McLaughlin ************** Copyright Loss Mitigation Institute LLC 2009. All Rights Reserved. http://www.shortsalesriches.com <http://www.shortsalesriches.com/> http://www.shortsalescoach.com <http://www.shortsalescoach.com/> http://www.sixfigurebpo.com <http://www.sixfigurebpo.com/> http://www.reomillionaireclub.com <http://www.reomillionaireclub.com/> http://www.youtube.com/shortsalesriches http://www.smartrealestatenews.com <http://www.smartrealestatenews.com/> (subscribe to this newsletter) ************************************************* Finally, a blog for Real Estate professionals that want up-to-the-minute news, & how it impacts us and our market... http://www.shortsalesriches.com/blog ************************************************* About the author: Chris McLaughlin is widely known as America’s top Real Estate Attorney and Investment Consultant. * As the top Florida foreclosure and pre- foreclosure expert, he oversees more than 100 short sale & REO closings each month * Long-time authority on real estate investing and rapid reselling of distressed homes. Owns portfolio of nearly 100 high-value, high-profit properties * Owner of one of Florida's largest Real Estate firms, running 4 different offices, supporting over 400 agents, uniquely positioning him to help thousands of investors make money in the biggest market opportunity ever! * Highly sought-after speaker, consultant, and seminar leader for current trends and hot topics in Real Estate Investing, Entrepreneurship, and Wealth Building * Follow me on Twitter: http://twitter.com/mclaughlinchris * Join my Facebook Fan Page: http://www.mclaughlinchris.com <http://www.mclaughlinchris.com/> -- Loss Mitigation Training Institute LLC 206 E. Pine Street Lakeland, FL 33801 US *** exposing the hidden truth for further educational research only *** CAVEAT LECTOR *** In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. 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