Fannie Mae gets tough on 'strategic' mortgage defaults

By Stephanie Armour, USA TODAY
Borrowers who walk away from mortgages they can afford to pay — making "strategic defaults" — are running increasing risks that they'll be penalized for doing so.

Starting in October, Fannie Mae says, strategic defaulters will be disqualified for new Fannie Mae-backed loans for seven years after their foreclosures. Fannie also says it will go to court where it can to recoup outstanding mortgage debt from borrowers who strategically default.

Under a bill that's passed the House and awaits Senate action, the Federal Housing Administration would be barred from insuring mortgages for those who previously ditched a mortgage they had the ability to pay.

ECONOMY: Comparisons to the Great Depression keep popping up

Get-tough policies are forming at the same time that about a quarter of mortgage borrowers owe more than their homes are worth.

Fannie Mae buys about 40% of all mortgages and packages them for resale to investors. The FHA insures about 30% of home mortgages.

Freddie Mac, which also buys mortgages, says it is examining Fannie Mae's policy.

To determine if a borrower is in default, Fannie examines whether the homeowner still has access to credit and is paying that debt and others.

Cracking down on strategic defaulters is controversial. Some lenders say it is necessary to stem the tide of homeowners shirking their obligations.

"We need to start treating bad behavior with serious and measureable consequences so that we can get this nation back on its feet," says Daniel Smith, vice president of mortgage banking at First Place Bank in Livonia, Mich. "Washington needs to come up with a uniform law on this issue."

Others say homeowners who may appear guilty of strategically defaulting really can't afford to make mortgage payments.

"It seems like an overreaction," says Howard Banker, a founder of Fair Mortgage Collaborative, a consumer education non-profit in New York. "If you do default, it goes into foreclosure, and that's already very damaging to your credit."

Other policies may be more effective than penalizing strategic defaulters, says Mark Zandi, chief economist of Moody's Analytics. Changing bankruptcy laws to allow bankruptcy judges to reduce debtors' mortgages is an example, he says.

"I'm not a big fan of using the stick to get people to stay in their homes. There are instances where it makes no financial sense for them to stay in their homes," Zandi says. "And how do you know, really, if someone is strategically defaulting?"

Two out of five homeowners say they would consider walking away from their mortgages if their homes were worth less than what they owed, according to a survey by Trulia and RealtyTrac.

source: http://www.usatoday.com

U.S. trying to recoup some Fannie, Freddie losses

By Alan Zibel, AP Real Estate Writer
WASHINGTON — A federal regulator is taking steps that could lead to the recovery of some losses sustained by mortgage giants Fannie Mae and Freddie Mac.

The Federal Housing Finance Agency said Monday it is looking to get back money that the two government-controlled companies have lost on mortgage securities packaged and sold by Wall Street firms.


During the housing market's boom years, the two government-sponsored companies snapped up those securities, which contained some of the riskier loans made during the housing boom years. But they declined dramatically in value after the market went bust.

The regulatory agency said it has issued 64 subpoenas seeking loan files and other documents to determine whether the sellers of those securities made any false statements or omissions. Fannie and Freddie had tried to do so themselves but have faced resistance in getting the loan documents, said the agency, which was given subpoena power two years ago.

The agency said in a statement that it is "prepared to take appropriate action to ensure compliance, if necessary." Any money recovered by the government would offset losses at Fannie and Freddie, which have cost taxpayers $145 billion so far.

Many analysts agree that Fannie and Freddie fed the boom in shady mortgage lending by snapping up billions in dubious mortgage investments and by lowering standards for the mortgages they guaranteed.

"It's a shame Fannie and Freddie didn't ask these questions themselves when they were buying these securities in the first place," said Howard Glaser, a Washington mortgage industry consultant who formerly had both companies as clients. "The truth is that they never really wanted to dig too deep into true nature of the loans they were buying."

But the government's ability to recover money will depend on whether the mortgage companies that made the loans are still operating, said Scott Buchta, chief mortgage strategist with Braver Stern Securities. Many of the lenders who made the worst-performing loans have gone out of business.

"It's going to be a long process," Buchta said.

Fannie and Freddie currently hold about $255 billion of these mortgage-backed investments, known as "private label" securities. They amount to less than 5% of the $5.5 trillion in mortgage securities the companies own or guarantee and are separate from those issued by Fannie Mae and Freddie Mac themselves.

Fannie and Freddie have also been trying to recover money on their own securities by forcing lenders to buy loans that have gone into default.

source:http://www.usatoday.com

Foreclosure could claim more than 1 million homes in 2010

By Alex Veiga, AP Real Estate Writer
LOS ANGELES — More than 1 million U.S. households could lose their homes to foreclosure this year, as lenders work their way through a huge backlog of borrowers who have fallen behind on their loans, according to RealtyTrac, a foreclosure tracking service.

Nearly 528,000 homes were taken over by lenders in the first six months of the year, a rate that is on track to eclipse the more than 900,000 homes repossessed in 2009, RealtyTrac says.

"That would be unprecedented," said Rick Sharga, a senior vice president at RealtyTrac.

Historically, lenders have taken over about 100,000 homes a year, Sharga said.

The surge in home repossessions reflects the dynamic of a foreclosure crisis that has shown signs of leveling off in recent months, but remains a crippling drag on the housing market.

The pace of new properties entering foreclosure slowed as banks let delinquent borrowers stay longer in their homes rather than adding to the glut of foreclosed properties on the market. But at the same time, lenders have stepped up repossessions to clear out the backlog of distressed inventory on their books.

The number of households facing foreclosure in the first half of the year climbed 8% vs. the period last year, but dropped 5% from the last six months of 2009, according to RealtyTrac, which tracks notices for defaults, scheduled home auctions and home repossessions.

In all, about 1.7 million homeowners received a foreclosure-related warning between January and June. That translates to one in 78 U.S. homes.

Foreclosure notices declined in April, May and June, but Sharga cautions not to read too much into that.

"The banks are really sort of controlling or managing the dial on how fast these things get processed so they can ultimately manage the inventory of distressed assets on the market," he said.

On average, it takes about 15 months for a home loan to go from being 30 days late to the property being foreclosed and sold, according to Lender Processing Services, which tracks mortgages.

Assuming the U.S. economy doesn't worsen, aggravating the foreclosure crisis, Sharga projects it will take lenders through 2013 to resolve the backlog of distressed properties they have on their books now.

And a new wave of foreclosures could be coming in the second half of the year, especially if the unemployment rate remains high, mortgage-assistance programs fail, and the economy doesn't improve fast enough to lift home sales.

The prospect of lenders taking over more than a million homes this year is likely to push housing values down, experts say.

Foreclosed homes are typically sold at steep discounts, lowering the value of surrounding properties.

"The downward pressure from foreclosures will persist and prices will be very weak well into 2012," said Celia Chen, senior director of Moody's Economy.com.

She projects home prices will fall as much as 6% the next 12 months from where they were in the first quarter.

Economic woes, such as unemployment or reduced income, continue to be the main catalysts for foreclosures this year. Initially, lax lending standards were the culprit. Now, homeowners with good credit who took out conventional, fixed-rate loans are the fastest growing group of foreclosures.

There are more than 7.3 million home loans in some stage of delinquency, according to Lender Processing Services.

Lenders are offering to help some homeowners modify their loans. But many borrowers can't qualify or they are falling back into default. The Obama administration's $75 billion foreclosure prevention effort has made only a small dent in the problem.

More than a third of the 1.2 million borrowers who have enrolled in the government's mortgage modification program have dropped out. That compares with about 27% who have received permanent loan modifications and are making payments on time.

Among states, Nevada posted the highest foreclosure rate in the first half of the year. One in 17 households there received a foreclosure notice. However, foreclosures there are down 6% from a year earlier.

Arizona, Florida, California and Utah were next among states with the highest foreclosure rates. Rounding out the top 10 were Georgia, Michigan, Idaho, Illinois and Colorado.

Source: http://www.usatoday.com

HISTORY OF ROSSMORE AVENUE

Ida Hancock Ross named Rossmore Avenue, the western border of the Hancock Park residential area, in honor of her second husband, Judge Erskine Mayo Ross. The couple was married in 1909, a merger of an oil multimillionairess and an esteemed California judge.

She was the widow of Major Henry Hancock who had purchased claim to the title of the Rancho La Brea property in 1863. He died in 1883, leaving Ida with two sons, Allan and Bertram. She lived in a small house adjacent to the tar pits, deriving a meager income from the asphalt.

When oil was discovered on the property, Ida and her son G. Allan Hancock granted a 20-year lease to the Salt Lake Oil Company for 1,000 acres of Rancho La Brea. Between 1901 and 1915, 350 wells had been drilled on the property.

With her newfound riches, Ida took trips to Europe where she purchased antiques to furnish the mansion she was building at Vermont Ave. and Wilshire Blvd. Modeled after the Villa Medici in Florence, the mansion’s music room was the scene of concerts and recitals.

Her husband, Judge Erskine M. Ross, had served as a Confederate officer in the Civil War. He came to Los Angeles in the mid-1800s, and joined the law office of his uncle, Cameron E. Thom, a former state senator who would later serve as mayor of Los Angeles.

In 1888, Ross was elected to the Supreme Court of California, and later was nominated to a newly created position on the United States District Court for the Southern District of California by President Grover Cleveland. One of Glendale’s earliest founding fathers, he developed a section of Glendale which he named Rossmoyne.

Ida Ross died in 1913, and her husband died in 1928.

Rossmore begins at Wilshire Blvd. and ends at Melrose Ave., where it is named Vine St.

Jackson Barnett, a wealthy eccentric oilman form Oklahoma, lived in a mansion at the northeast corner of Rossmore and Wilshire, in the 1930s. He lived to direct traffic on the busy boulevard, some say as a hobby.


MARLBOROUGH SCHOOL, equestrian club circa 1916.

The address of Marlborough School since 1916 when it moved from downtown Los Angeles to the northeast corner of Third St. and Rossmore, the street has been home to well known residents.


EL ROYALE has been home to numerous celebrities.

The El Royale apartments have been home to Huell Howser, Nicholas Cage, Cameron Diaz and, at the Ravenswood apartments, Mae West. An apartment at The Mauritania was home for a few weeks to President John F. Kennedy during the 1960 Democratic Convention in Los Angeles.

It was in 1920 that Wilshire Country Club opened on Rossmore Ave. and Beverly Blvd. on property leased from G. Allan Hancock.

The avenue also serves as the eastern boundary of Hancock Park.

Preferred parking in Hancock Park?:

Curbed L.A. and the Larchmont Chronicle report that Hancock Park residents are frustrated by too many people parking in their neighborhood when they pick up food orders from Mozza 2 Go. From Curbed:

The Hancock Park homeowners wants a preferred parking district for the homeowners, but the broke city has a hefty backlog of such requests and can't consider the application for a while.

Drainage Issues?

As many of you have no doubt heard me preach repeatedly, water is far and away the number one enemy of foundations in terms of the cumulative damage that it indiscriminately does to so many homes.

The photo above is a fine illustration of how much effect Mother Nature can create under a house. In this particular home, and this is all too common, the expansive quality of the soil has heaved up when wet and contracted when dry and in so doing, left a large enough gap for a hand to easily fit into. This is meant to be a load bearing structural support and yet it is simply hanging in the air. With the soil in the currently dry condition, this would be an appropriate time to adjust this support to fill the gap. However, one must also then take care of whatever drainage issues led to the expansion and contraction in the first place.

If the walls of your house are cracking, it’s not “because they’re old”, they’re cracking because there is some moisture related issue still creating effect in the foundation area. Our interest is in protecting your foundation well into the future and for that reason, this reminder comes to you to be sure that you follow through with any needed drainage corrections in order to accomplish that. We can recommend companies who perform such services or you can locate a competent one of your choosing, either way your house will thank you!

Feel free to forward this along to anyone who may find it of interest.
We’ve included a link to our web-site for added convenience!
www.thefoundationworks.com
323-663-4841
Flourish and prosper,
Tom Pelletier, Owner
The Foundation Works

Best Place to Live America's best small city

1. Eden Prairie, MN
Eden Prairie
WINNER
Top 100 rank: 1
Population: 64,000
Unemployment: 5.1%
Compare Eden Prairie to Top 10 Best Places
Why is Eden Prairie No. 1 this year? Not only is it family-friendly, it has a dynamite economy too.

At 5.1%, its unemployment rate is nearly one percentage point below the county rate and more than four points below the national average. It helps when you've got 50,000 jobs right in town.

Major employers include Fortune 500 trucking company C.H. Robinson, hearing-aid maker Starkey Labs, and the Minnesota Vikings, whose practice facility and front office are here. As for fiscal strength, Moody's gives the town a perfect AAA bond rating.

While it doesn't have much of a downtown, there's plenty of outer beauty: from gently rolling hills to 17 lakes that residents flock to year-round for swimming and ice skating. Town parks are laced with 125 miles of running, hiking, and biking trails.

No wonder residents rank among the healthiest people in the nation. Add in top-notch schools and safe streets and you've got a place that's tough to beat. --Ismat Mangla

Ashley Dupre studying to become real estate broker

Ashley Dupre, the woman who was at the centre of the Eliot Spitzer prostitution scandal, has enrolled in a real estate course at NYU.

Dupre, 25, who is a sex columnist, took the course to apply for a New York broker's license.

"I recently moved back to New York from Los Angeles. Since being home, I took and passed the accelerated Real Estate Salesperson Course at NYU," the New York Post quoted her as saying.

"New York City real estate has always been an interest of mine. It's just something that I wanted to do. Where this goes is yet to be determined. I am so excited to be back - there's no place like New York.

"Music has always been my passion and will remain that always. Right now my focus is on my column, Ask Ashley, every Sunday in The Post," she added.

California Dreamin'

The California real estate market appears to be making a comeback, as home sales and pending sales rebound from staggering losses.

In fact, one real estate guru says luxury real estate in Beverly Hills and surrounding communities such as West Hollywood, Bel Air, Century City, Santa Monica and Malibu is hotter than ever.

Ikem Chukumerije is a top-producing celebrity real estate broker specializing in residential luxury sales, leasing, and financing in Beverly Hills.

His clientele includes corporate executives, professional athletes, entertainers and first time homebuyers in places like Beverly Hills, Hollywood Hills, Malibu, Bel Air and Santa Monica.

"The economy has definitely impacted my business, but in a great way," says Chukumerije. One of his past listings in Beverly Hills was available for $1,395,000 and sold within 27 days for 1,495,000 with multiple offers.

The average price per square foot for Santa Monica is currently $614, an increase of 1.2 per cent compared to the same period last year. In Malibu, the average is $815 per square foot, up 16.6 per cent from the same period last year, while the per-square-foot price average in Los Angeles is lower at $266, up 7.7 per cent - the same period last year.
© Copyright (c) The Calgary Herald

Read more: http://www.calgaryherald.com/business/California+Dreamin/3260733/story.html#ixzz0tJSiQVdc

Stephanopoulos Buys a $6.5 Million Manhattan Apartment

Political correspondent George Stephanopoulos seems to have rebounded just fine since getting shortchanged on his Georgetown mansion, which sold for $1 million less than its asking price a few weeks ago for $5.45 million. He's now landed a full-floor residence in New York City's well-to-do Upper East Side neighborhood for $6.5 million, reports The New York Observer.

Stephanopoulos, who is the relatively new face of ABC News' "Good Morning America, has relocated with his family, actress wife Alexandra Wentworth and the couple's two daughters, to New York City to take over the post formerly held by Diane Sawyer.

So, after spending about a million more for his move to the Big Apple, did the Stephanopoulos clan trade up in their move to Manhattan?


Back in their old hometown of Washington, D.C., Stephanopoulos and his family lived in a 5,652-square-foot Georgian-style brick mansion. The estate had an 11-foot ceiling and crown moldings on the inside and has been described as looking like a small liberal arts university from the exterior.

Well, in New York City, the Stephanopouloses certainly didn't trade up for more space.

Compared to their six-bedroom and 6.5-bathroom townhouse in Georgetown, the new co-op, situated at 30 East 72nd St., is a much smaller, prewar three-bedroom. (Another one-bedroom currently on the market in this high-rise is only 1,100-square-feet).

The 16-story doorman building has 27 units in total, and reports say the place comes with a private elevator vestibule, a wet bar, walk-in closets, a wood-burning fireplace, and a kitchen with double ovens and a six-burner stove.
Stephanopoulos upgrades to a $6.5 million New York City home
And it's in a prestigious location -- between Madison and Park Avenues and about a block-and-a-half from Central Park -- in the 10021 zipcode, where the median sales price of a home is $1.5 million, according to the real estate search website, Trulia.com.

Over the past month, nearby homes have sold in the price range of $2.8 million to $3.8 million, the site also reveals.

Los Angeles Real Estate News: How the City Stacks Up

Los Angeles is one of America's largest cities and this week we got stats on how the L.A. area compares to others around the world in terms of retail rents, and how the federal home-buyer tax credit helped L.A. in comparison to other U.S. cities.

We also learned about some noteworthy L.A. citizens, from the richest to the "Best" (there was no overlap). And how you can get in on planning and building in Santa Monica.

Here's what happened in L.A. real estate news last week:

* U.S. home sales jump 7.6 percent in April over the prior month. Likely reason: the expiration of the home buyer tax credit. However, this didn't affect California's home sales, which dipped slightly from the prior month, according to the Los Angeles Times. It's expected that many who took advantage of the credit will be counted in May or June, so we'll see how those numbers pan out.
* Los Angeles was rated no. 12 in the most expensive retail rents in the world, according to CB Richard Ellis.
* We wrote last week about Los Feliz homes suffering with the rest of real estate, but the L.A. Times is doing its part to help "Loss Feliz," profiling a $2.45 million dollar 1929 house.
* If you want to get in on Santa Monica development for the next two decades, the Santa Monica Daily Press tells about the Planning Commission's next workshop. These are held before decisions are adopted to work on the final plan.
* Los Angeles Business Journal's annual list of the 50 "Wealthiest Angelenos" came out: A biotech engineer tops the list, with the rest of the top 10 including many Hollywood moguls and a supermarket magnate. With their net worth up to $93 billion this year, they can afford to buy some good real estate, non?
* Interior Designer and HGTV Design Star winner Antonio Ballatore is one of those profiled in LA Weekly's "Best of People" issue for 2010. No wonder he is the self-proclaimed "Lady Gaga of Interior Design" -- he used to be a set designer for Annie Leibovitz and David LaChappelle.

Josh Safran, Ted Alexandre buy Hancock Park house

The 1929 English country-style home has a formal dining room, den with fireplace, updated kitchen and four bedrooms.

"Gossip Girl" writer and executive producer Josh Safran and his husband, producer Ted Alexandre, have purchased a Hancock Park area property for $2.75 million.

The English country-style house, built in 1929, includes a formal dining room, a den with a fireplace, a breakfast room, an updated kitchen, four bedrooms and 3 1/2 bathrooms in about 4,200 square feet.

SONGS ON A SUMMER BREEZE IN HANCOCK PARK

FELLOW ALTOS, Catherine Schuster and Nancy Reinisch are also on the board of the Metropolitan Master Chorale.

Enjoy an evening of songs by 12 members of the Metropolitan Master Chorale in a private Hancock Park garden on Sun., July 11 from 5 to 7 p.m. Songs on a Summer Breeze is a fundraiser for the one-year old chorale at the home of John and Nancy Reinisch. Nancy is coordinating the event with fellow singer Catherine Schuster.

Mezzo soprano Patricia Schuman, who hails from the Met, Teatro all Scall and Vienna State Opera, will also be featured at the event.

Selections include “Summertime” from “Porgy and Bess” as well as works from “Carmen” and “West Side Story” as well as other songs from the group’s six-century repertoire.

Nancy and Catherine are also on the board of the 50-member choir, who range in age from 21 to near 70. They are under the innovative tutelage of artistic director Glenn Carlos. Director of chorale activities at Los Angeles Valley College, he is also a consultant for the Grammys. “He is an amazing music teacher. He inspires me,” says Catherine. Nancy equally raved about her conductor.

The altos met about five years ago while members of the Hollywood Master Chorale. They have since fine-tuned their vocals, practicing weekly at Wilshire Presbyterian Church, and brushed up on music theory as well as learning to read all four voices: soprano, alto, tenor and bass. "That way you hear the chord you’re making when singing, "says Nancy.

A licensed clinical social worker in private practice, Nancy also works with children at Heart of Los Angeles (HOLA). It is among groups the Chorale involves in its community outreach.

She sang in high school and college, and then returned to voice about 11 years ago. “I decided I wanted to sing again,” she says.

Catherine played guitar and was inspired by Joan Baez before she too became a wife and mother. Board vice president and secretary, she uses her organizational skills as a consultant to fundraise, create data bases and is the group’s webmaster.

Proceeds raised at the event will help support the 2010-2011 season, which will feature three concerts beginning in December.

“Support your local group. We really are an excellent value,” says Catherine. “And, we’re really good,” adds Nancy.

For tickets and more information visit metrosings.org, or call 323-342-2263.

Source:Larchmont Chronicle