Archive for October 2015

How Successful Has TARP Been After Seven Years?

October 7, 2015

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TARP has evolved from a dubious start into a worthwhile program that not only helped to curtail the oncoming serious financial crisis but acutely returned more money to taxpayers then was expended.

For a more detailed look at this subject – please read the article below.

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Saturday, October 3, 2015, marked the seven-year anniversary of then-President George W. Bush signing the government’s Troubled Asset Relief Program (TARP) into law in order to help stabilize financial markets and restore Americans’ confidence in the economy.

TARP became law in 2008 at the depth of the financial crisis, at a time when many Americans feared that the country was on the precipice of another Great Depression. Less than a month before TARP became law, Fannie Mae and Freddie Mac had been seized by the government and required a bailout of $187.5 billion to continue operations.

In conjunction with the seven-year anniversary of TARP, Rob Runyan and Maya Newman from the public affairs office of the U.S. Department of Treasury wrote a commentary on Treasury’s blog examining the success of the program and what it has done to achieve its main goal of stabilizing the economy.

“Beyond the taxpayers return on their investments, TARP helped to stabilize our banks, keep credit flowing to businesses and individuals, save our auto industry, and keep millions of Americans in their homes,” the authors wrote.

The economy has experienced 67 straight months of private sector job growth and the unemployment rate is at its lowest level since 2008 (5.1 percent), serving as ” proof that the broad-based federal response to the financial crisis was effective in stabilizing our economy and setting the table for sustainable growth,” the authors said.

TARP was always meant to be temporary, which is why the government began moving to exit its investments and replacing government support with private capital after putting out the immediate financial fire. And while achieving return on taxpayer investment was not the primary goal of TARP, the program did just that because prudent execution helped TARP achieve its first goal, which was stabilizing the economy, according to Runyan and Newman.

To read the complete article – please use the link below.

How Successful Has TARP Been

Compensation for Servicemembers Over Illegal Foreclosures Increased to $311 Million

October 6, 2015

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Have you heard the names JPMorgan, Wells Fargo, Citi, GMAC Mortgage and Bank of America linked to fraud and criminal activity related to the mortgage industry? This article points out just one more example of the outrageous acts these 5 “Too Big To Fail” corporations carried out on a daily basis. To date no one from these 5 enterprises has done any jail time or even been charged with a crime.

For a more detailed look at this subject – please read the article below.

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Another $186 million in compensation will be awarded to 1,461 service members and their co-borrowers over the unlawful foreclosure of their homes as part of the Department of Justice’s settlement with five of the nation’s largest mortgage servicers, according to an announcement from the DOJ.

These totals bring the amount of foreclosure-related compensation given to servicemembers by the five servicers (JPMorgan Chase, Wells Fargo, Citi, GMAC Mortgage, and Bank of America) to more than $311 million. A total of 2,413 sevicemembers and their co-borrowers are eligible to receive the compensation under protections afforded them by the Servicemembers Civil Relief Act (SCRA), according to the DOJ.

“While this compensation will provide some financial relief to more than 2,400 service members and their families, the fact is no one serving our country in the Armed Forces should ever have to worry about losing their home to an illegal foreclosure,” said Acting Associate Attorney General Stuart F. Delery.  “Through the Servicemembers and Veterans Initiative, the Department of Justice will continue to use every tool at our disposal to protect service members and their families from such unjust actions.”

The servicemembers are receiving the compensation as a result of the SCRA portion of the 2012 National Mortgage Settlement and a previous settlement with Bank of America. The foreclosures in question took place over a six-year period from January 1, 2006, to April 4, 2012. The servicers are alleged to have obtained foreclosure proceedings or default foreclosure judgments without notifying the court that the servicemember was on active duty in the military. Section 533 of the SCRA prohibits non-judicial foreclosures on servicemembers who are either in military service or within the applicable post-service period, provided the mortgages were originated prior to the beginning of their military service.

Under the terms of the NMS, each identified servicemember with a mortgage serviced by one of the five servicers named will receive $125,000, plus any lost equity in the property and any interest on the lost equity, according to the DOJ.

To read the complete article – please use the link below.

Compensation for Servicemembers

Will September’s Weak Jobs Report Slow Down Housing Growth?

October 5, 2015

This is an interesting article but please note. The federal government would like you to believe that the unemployment rate for the nation is 5.1%. while the usually unmentioned U6, or true, unemployment rate is 10%. For information the U6 rate, as defined by the bureau of Labor Statistics, is:

“Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.” and “Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule. Updated population controls are introduced annually with the release of January data.”

This means people who are not currently looking for work (discouraged workers) and people that have had their hours reduced to part time are counted in U6 and not normally reported unemployment rate.. Just one of the little games both parties play to misinform the public.

For a more detailed look at this subject – please read the article below.

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The lower-than-expected labor market gains for September brought the average monthly job growth for the year down below 200,000, which could possibly slow down the heretofore robust activity for the housing industry so far in 2015.

While the national unemployment rate held steady at 5.1 percent from August (the U6 unemployment rate, the broadest measure of unemployment, fell 3 basis points to 10 percent), September saw a gain of just 142,000 jobs, bringing the average monthly total for the first nine months of 2015 down to 198,000, according to the September  2015 Employment Summary released by the Bureau of Labor Statistics (BLS) on Friday. By comparison, average monthly job gains for the first nine months of 2014 totaled 260,000.

“We had been seeing a level of job creation closer to 3 million on a trailing 12-month basis on average for the last year, but the revisions and the relatively weak September number change that trailing 12-month trend to 2.8 million,” said Jonathan Smoke, chief economist for Realtor.com. “Job creation is a very important leading indicator of strong demand for housing. The strong employment results for the last two years created an uptick in household formation, which drives demand for home purchases and rentals. If this softening sticks, we could see less robust growth in the year ahead.”

To read the complete article – please use the link below.

Weak Jobs Report

Repeat Foreclosures Are Driving Uptick in Foreclosure Starts

October 5, 2015

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Really bad news for some homeowners is fairly good news for the housing industry.

For a more detailed look at this subject – please read the article below.

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Amid all the good news for housing lately, foreclosure starts were up by 7 percent in August—driven by a rise in the amount of repeat foreclosures, according to the August 2015 Mortgage Monitor released by Black Knight Financial Services on Monday.

Repeat foreclosures accounted for 57 percent of the 80,500 foreclosure starts reported in August, the largest share of repeat foreclosures for one month on record, according to Black Knight. While all foreclosure starts saw an increase of 7 percent month-over-month in August, the number of repeat foreclosures jumped by 13 percent.

Coinciding with the substantial increase in repeat foreclosure starts in August was an nearly equally substantial decline in the number of first time foreclosure starts. According to Black Knight, first time foreclosure starts totaled 35,000 in August, their second-lowest total for one month since the crisis began (only April 2015 was lower).

“The high incidence of repeat foreclosures is actually a testament to the lengths servicers have been going in terms of actively working with high delinquency loans and trying to find the best path to pursue with these borrowers,” said Ben Graboske, Chief Technology Officer for the Data and Analytics Division at Black Knight. “When this happens, loans move out of active foreclosure and back into 90+ days delinquent status, presumably to pursue loss mitigation efforts. If and/or when those fail, the loan is shifted back to foreclosure.”

To read the complete article – please use the link below.

Repeat Foreclosures