Archive for August 2013

Trump’s Real Estate School Deemed a ‘Scam’ by NY Attorney General

August 28, 2013

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Does anyone find this hard to believe? However I feel that if you thought that a 3 day seminar put on by Mr. Trump constituted a “University Course” you should not even consider a career in real estate.  Please read the article below and let me know what you think.

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Donald Trump and Trump University, a real estate investment school in New York, face a lawsuit charging Trump and his school defrauded consumers of $40 million.

Trump University functioned as a real estate school, luring students with promises that they would learn Trump’s personal real estate methods and ensuring their success in real estate investment.

However, according to New York Attorney General Eric T. Schneiderman, who filed a suit against Trump Saturday, the school did not deliver on its promises.

“Mr. Trump used his celebrity status and personally appeared in commercials making false promises to convince people to spend tens of thousands of dollars they couldn’t afford for lessons they never got,” Schneiderman said in a press release Sunday.

Instead of the real estate education they were promised, Schneiderman says more than 5,000 students “got a hard lesson in bait-and-switch.”

Trump adamantly denies the charges and says he will not settle the case but instead will fight it in court “on principle.”

During a phone interview on TODAY Monday, Trump said the attorney general is a “total lightweight,” calling him “very unpopular” and accusing him of soliciting campaign funds from Trump’s staff and attorneys during the investigation into Trump University.

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Estate School Deemed a ‘Scam’

Delinquency Rate Back on Downward Course After Seasonal Increase

August 27, 2013

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This is good news for the economy as well as home owners. Please read the article below and let me know what you think.

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The national mortgage delinquency rate resumed its downward trend in July after experiencing a seasonal uptick in June, Lender Processing Services, Inc. (LPS) reported Monday.

The delinquency rate, which includes loans 30 days or more past due, slipped to 6.41 percent in July after increasing to 6.7 percent in June. The decrease represents a monthly and yearly decline of 3.96 percent and 8.76 percent, respectively.

Foreclosure inventory also fell in July, dropping to 2.82 percent, down from 3.46 percent in June. Compared to a year ago, the decrease is much steeper, at 30.76 percent.

According to LPS, the foreclosure inventory rate is at the lowest level since February 2009.

When totaling past due loans, including delinquencies and foreclosures, LPS found about 4.6 million mortgages are behind on payments.

Of that total, 3.19 million are 30 days or more past due but not in foreclosure, while 1.41 properties are in foreclosure inventory. About 1.35 million of the delinquent loans are 90 days or more past due, but not yet in foreclosure.

Florida, as usual, took the top spot for the highest percentage of past due loans. Mississippi followed, with New Jersey, New York, and Maine rounding out the top five.

Wyoming held the lowest percentage of non-current loans, followed by Montana, Alaska, South Dakota, and North Dakota.

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Delinquency Rate

Fannie Mae Update Addresses Short Sale Credit Reporting Issue

August 27, 2013

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This is something to be aware of if you are dealing with a client that has a short sale in their recent past. Please read the article below and let me know what you think.

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Earlier this year, reports surfaced of short sales that were erroneously reported as foreclosures on consumer credit reports. When the matter was investigated, the issued turned out to be a computer problem.

According to reports, the standardized computer software the credit industry was relying on lacked a specific code for short sales.

In an updated notice, Fannie Mae addressed the reporting issue, stating it “has been made aware that there are often inconsistencies in the credit data” for short sales.

Currently, lenders are having to manually underwrite loans to help borrowers become considered for a loan after the appropriate waiting period.

However, Fannie Mae is updating its automated underwriting system, known as Desktop Underwriter (DU), to allow lenders to disregard erroneous foreclosure information. More specifically, lenders will be able to input certain codes in an explanation field of the online loan application to indicate a short sale or deed-in-lieu. When DU sees the specific code, foreclosure information will be overlooked.

Fannie Mae typically requires a seven-year waiting period after a foreclosure and a two-year period for a short sale.

The changes to DU will apply to loan casefiles submitted to DU starting November 16,2013.

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Credit Reporting Issue

Time on Market Decreases in July, with Homes Receiving Multiple Offers

August 26, 2013

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This is great news for sellers and not so good for buyers. Please read the article below and let me know what you think.

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Homes are selling quickly with multiple offers and favorable prices, according to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey released Friday.

The survey tracked time on market, number of offers, and sales-to-list-price ratio for non-distressed sales in July. California performed exceptionally well in all three categories, while parts of the Midwest underperformed.

The average number of weeks a home spent on the market in the three-month period ending in July was 8.6 weeks, down from 9.2 weeks in May.

Non-distressed homes that sold in July received an average of 2.3 offers.

Sellers received close to their full asking price in July. The sales-to-list-price ratio was 98 percent for the month, up from 97.6 percent in May.

In California homes spent about 4.5 weeks on the market, received an average of 4.1 offers, and sold on average for more than their asking price – about 101.8 percent.

In contrast, markets in the Midwest lagged the national averages.

The Industrial Midwest—Missouri, Illinois, Indiana, Ohio, and Michigan—performed worst in terms of time on market. Homes in these states averaged 11.3 weeks on the market.

Homes in the Farmbelt states—North Dakota, South Dakota, Nebraska, Kansas, Minnesota, Iowa, and Wisconsin—received the lowest numbers of offers in July—about 1.4 offers per home.

When it came to prices, Florida earned the lowest ranking. Non-distressed homes sold for 95 percent of their asking price in July, in comparison to California’s 101.8 percent.

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Time on Market Decreases

Commentary: Déjà vu All Over Again

August 26, 2013

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This makes a whole lot of sense. When you mix the government cutting back it’s pumping billions into the housing market it could be worse than ‘05. Please read the article below and let me know what you think.

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In the spring and early summer, more lenders, as surveyed by the Federal Reserve, said they were easing standards for mortgage loans than were tightening.

In the spring and earlier summer, the median price of an existing-single family home was increasing by an average of 1.8 percent per month as sales increased about 0.5 percent per month. Personal income, according to the Bureau of Economic Analysis, was increasing at about 0.5 percent per month.

In the spring and early summer, the Case-Shiller Home Price Index was increasing by an average of 1.5 percent per month

In the spring and earlier summer, the nation added about 230,000 jobs per month, about one quarter to one half of them retail and leisure and hospitality them retail and leisure and hospitality, the two lowest wage industry sectors tracked by the Bureau of Labor Statistics.

That was 2005, the year before the housing bubble burst brought the economy down with it.

In 2013, numbers look eerily similar:

According to the latest Federal Reserve Senior Loan Officer Survey, an average of 4.6 percent of lenders surveyed acknowledged easing lending standards for prime residential loans and 16 percent of lenders surveyed reported an increase in demand for loans to subprime borrowers.

So far this year, the median price of an existing-home has increased an average of 2.5 percent per month and sales are increasing an average of 1.4 percent per month.

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Commentary

Report: FHFA Needs Guidelines for Compensatory Fees, MSR Transfers

August 25, 2013

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These changes are long overdue. Please read the article below and let me know what you think.

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The Federal Housing Finance Agency Office of Inspector General overall approves of Fannie Mae’s $11.6 billion settlement earlier this year, though it does raise some questions regarding FHFA’s treatment of compensatory fees and servicing transfers.

After more than a year of negotiating, Fannie Mae reached an $11.6 billion settlement with Bank of America regarding losses the GSE incurred from Bank of America and Countrywide loans. Bank of America acquired Countrywide in 2008.

FHFA, per a recommendation from the OIG, issued new guidance for repurchase settlement agreements in June of last year.

The Bank of America settlement was OIG’s first chance to review the implementation of the new guidance.

“FHFA, to its credit, adhered to its established policy in reviewing the representation and warranty settlement between Fannie Mae and Bank of America,” the OIG stated.

“Its policy did not apply, however, to the resolution of compensatory fees and the transfer of mortgage servicing,” the OIG continued.

FHFA OIG believes FHFA needs to establish set guidance for compensatory fees.

Another concern the OIG labeled is the transfer of servicing rights to specialty servicers.

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FHFA Needs Guidelines

Winning Bidder in Loan Auction Sues Nationstar for Refusing Sale

August 25, 2013

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When the US Government stops dumping billions of dollars it the housing market look for a decline in the price rise trend. Please read the article below and let me know what you think.

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Home prices in the second quarter continued to see strong upward momentum, according to the Federal Housing Finance Agency’s (FHFA) House Price Index (HPI).

The purchase-only, seasonally adjusted HPI—calculated using home sales price information from mortgages sold to or guaranteed by the GSEs—rose 2.1 percent quarter-over-quarter, marking the eight consecutive quarterly increase. In June alone, the index was up 0.7 percent month-over-month.

“The housing market experienced one of its strongest quarters since the boom in the middle of the last decade,” said FHFA principal economist Andrew Leventis.

Compared with the same quarter last year, home prices increased 7.2 percent, while prices of other goods and services inched up only 1.0 percent. According to FHFA, the inflation-adjusted price of homes rose approximately 6.2 percent over the latest year.

Of the nine census divisions, the Pacific region posted the strongest increase in the most recent quarter, seeing a 4.6 percent quarterly gain. Prices were weakest in the East South Central division, increasing only 0.9 percent quarter-over-quarter.

FHFA’s expanded-data HPI—a metric introduced in August 2011 that adds transaction information from county recorder offices and the Federal Housing Administration—rose 2.4 percent over the latest quarter. Over the last four quarters, that index has risen 7.5 percent.

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Winning Bidder in Loan