Mortgage Activity Surges in Florida and New York

RISMEDIA, December 6, 2010—According to new consumer activity collected by MortgageLoan.com between October 15 and November 15, 2010, the New York City metro area and cities in Florida saw overall increases in mortgage and refinance requests. Requests in Boston, Texas, and the Southwest were mixed.

While the New York City Metro area showed a 17% increase in overall request volume, Florida was the real winner with a 71% increase in refinance requests in Miami and Ft. Lauderdale and a 47% increase in Orlando.

"The dramatic increase in refinance activity in Florida markets suggests that home values may be stabilizing in many areas," says David Coster, residential lending expert at MortgageLoan.com. "Recent home price surveys, which do not look at secondary markets, have shown further value drops. Yet our site activity provides anecdotal evidence that may indicate more positive attitudes among Florida homeowners relative to their refinancing prospects."

The Boston metro area market showed a 32% increase in mortgage purchase activity, yet a 23% drop in refinance activity. "It is suggestive of a situation in which first time homebuyers, in-bound relocated employees, or investors are taking advantage of lowered home values," says Coster. "At the same time, existing homeowners are still struggling with homes that cannot be refinanced due to value, credit, or employment issues."

The Houston, Texas area saw a 17% decrease in overall requests. Other Texas and Southwestern markets also saw declines in refinance activity, including a 38% decrease in Phoenix, Arizona, a 32% decrease in Albuquerque, New Mexico, a 26% decrease in San Antonio Texas, and a 24% decrease in Fort Worth, Texas.

The overall site activity at MortgageLoan.com indicates a housing market that varies from market to market and from month to month. Still, signs of marginal improvement appear to be creeping into the data.


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Think-tank study finds foreclosure crisis hits blacks, Latinos hardest

By Deepti Hajela

The Associated Press

NEW YORK — African Americans and Latinos are at a disproportionate risk in the ongoing foreclosure crisis because they are more likely than whites to have higher-cost mortgage loans and face higher unemployment rates, a report says.

The new report from the San Antonio-based William C. Velasquez Institute called on the federal government to take steps, including reforming bankruptcy laws and expanding eligibility for mortgage modification, to help combat the crisis.

"If nothing is done, then the foreclosures will continue disproportionately hitting blacks and Latinos," said UCLA professor Raul Hinojosa, the study's author.

Hinojosa said continued foreclosures could wipe out billions of dollars in home equity amassed in those communities, and that even owners who kept their homes would be affected by lower property values in foreclosure-riddled neighborhoods.

"Not only are you wiping out this generation of black and Latino families," he said, "but those neighborhoods go into serious decline."

Jose Calderon, vice president of programs and policy for the Hispanic Federation, said the foreclosures carried a far-reaching impact.

"The social cohesion of our communities is being destroyed," he said.

Unemployment is now the primary force behind foreclosures. Borrowers are struggling with no income and lenders are having a harder time reworking troubled loans.

Blacks and Latinos suffer in comparison to whites both in unemployment rates and having loans with higher interest rates.

The nationwide unemployment rate is 10.2 percent. For blacks, it's 15.7 percent and for Latinos, 13.1 percent.

The report said that in regions across the country, blacks and Latinos were anywhere from two to nine times as likely as whites to have high-cost mortgages.

The William C. Velasquez Institute is a nonpartisan think tank that studies Hispanic issues.

FREDDIE MAC MODIFIES RELIEF REFINANCE MORTGAGES

Changes Provide Broader Availability for Borrowers, More Flexibility for Closing Costs


McLean, VA -- In a move aimed at furthering the success of President Obama’s Making Home Affordable Program, Freddie Mac (NYSE: FRE) today announced several changes to its refinance offering under the program. Freddie Mac’s Relief Refinance Mortgage is designed to assist borrowers who are current on their mortgage payments but who would benefit from refinancing into mortgages with terms that better position them for long-term homeownership.

Once these changes are available, borrowers will be able to refinance a Freddie Mac-owned or guaranteed mortgage with any lender affiliated with Freddie Mac. Previously, borrowers had to work with the lender who currently services their mortgage. In addition, to help reach more borrowers, Freddie Mac is increasing the amount of closing costs that can be rolled into the new refinance mortgage.

“We are responding to consumers’ desires to have more refinancing options,” said Freddie Mac Executive Vice President Don Bisenius. “As an added benefit, we are expanding the program and providing greater flexibility in financing closing costs. Freddie Mac is committed to doing everything we can to bring the benefits of the Administration’s Making Home Affordable program to as many borrowers as possible.”

Borrowers can continue to work with their existing servicer to refinance their mortgage. In the vast majority of these cases, the current servicer will not have to re-underwrite the borrower. If the borrower chooses to work with another Freddie Mac-affiliated lender, the mortgage will need to be re-underwritten.

Freddie Mac will allow the lesser of 4 percent of the new refinance mortgage amount or $5,000 of closing costs, financing costs and prepaids/escrows to be rolled into the new refinance mortgage.

Freddie Mac’s standard postsettlement delivery fees, up to a maximum of 2 percent, will apply to the Relief Refinance Program.

Borrowers should visit www.freddiemac.com/corporate/ and complete the online form to determine if Freddie Mac owns their mortgage.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

The First 6 Major Lenders To Join Government Mortgage Program

By Bill Arce
www.realestatelatino.com

Wednesday, The Treasury Department announced that it has fully executed agreements with six major mortgage lenders and or servicing companies wanting to participate in the Federal Government’s $75 billion foreclosure prevention program.

Collectively these lenders could be eligible to receive up to $10 billion in incentive payments for assisting homeowners facing foreclosure avoid them by agreeing to lower the payments to affordable levels. According with Obama’s administration the program that was officially launched last month, could assist as many as 4 million homeowners saving their by modifying their mortgages.

The First six lenders that sign the contract with the government are:

::Wells Fargo, which could receive up to $2.9 billion.

::Select Portfolio Servicing, which could receive up to $376 million.

:: Chase Home Finance (a unit of J.P. Morgan Chase), which could receive up to $3.5 billion.

::Citi Mortgage which could receive up to $2 billion.

:: Saxon Mortgage Services, which could receive up to $407 million.

:: GMAC Mortgage, which could receive up to $633 million.


Only time will tell if this program will assist the majority of homeowners in foreclosure, critics are saying that the program falls short when it comes to help homeowners that already lost their home o there is no assistance for those facing foreclosure for lack of jobs. Long ago, foreclosures were due mainly to subprime mortgage, but with the slow economic we are seeing more and more cases where the main factor for losing a home is due to unemployment.

A new wave of foreclosures

Sub-prime mortgages are no longer the only one thing responsible for foreclosures. Prime mortgage borrowers are being affected too.

Job losses are affecting homeowners, including those with low rate prime mortgages. Freddie Mac reported last year that 46% of foreclosures in June wee related to loss of income or unemployment.

Inman News reported a jump in prime-loan foreclosures from January to February.
HOPE NOW put the number of foreclosure starts on prime loans during February at 157,000, a 25 percent increase from the month before. Foreclosure starts on subprime loans fell by 5 percent, to 86,000.

The record 243,000 foreclosure starts recorded in February represented a 12 percent increase from the month before and a 36 percent increase from a year ago.

The good news is that NOT every home headed for foreclosure ends up loosing their homes. However, with more homeowners waiting for help assistance can get a little too late for those people who lost their income. It is imperative that lenders step up and negotiate a positive loan workout that would allow the homeowners to stay remain in home while they are actively looking for a job.

There is no dough that this homeownership nightmare in part started because of irresponsible lending, but that should not be a reason to punish responsible homeowners with fully documented prime mortgage who fall on victims of this national cause. Homeownership is the foundation of our society if we don't do something to preserve that foundation, future generations will be suffering for our mistakes.

Comments? - Bill.arce@realestatelatino.com

The Mortgage Bankers Association (MBA) is hosting an Emerging Markets LIVE Online Workshop on Tuesday, December 18th, from 2:00 pm to 3:30 pm.

This Emerging Markets LIVE Online Workshop provides an overview of the opportunities that Emerging Markets represents and provides basic, cost-effective marketing strategies and tactics to immediately take advantage of these emerging opportunities.

The following residential mortgage professionals are encouraged to attend:
Upper management
Loan originators
Underwriters
Processors
Account executives - wholesale, mortgage insurance and title insurance

More information is available at the following link: http://www.campusmba.org/products/default.aspx?product_code=E2801716G/REGIS

Another reminder: We are doing an article on the four fundamental flaws in the mortgage industry. We welcome your feedback. Please email Steven Holland at sholland@multihmc.com if you wish to voice your opinion(s).

The Four Fundamental Flaws in the Mortgage Industry (Abbreviated)

1. Marketing Communications (Proprietor Flaw)
Branding, the art of distinguishing proprietors and/or their goods and services in order to “own” the customer, often takes a back seat to loan originators in the mortgage industry’s marketing communications.

2. Marketing Planning (Production Flaw)
Production strategies, more often are determined by originators than by branch or company management.

3. Risk Pricing (Product Flaw)
The true risks characteristics of both borrowers and the collateral are not adequately identified and assessed, impairing the industry’s ability to create improved and better priced mortgage products.

4. User Readiness (Preparation Flaw)
All three key areas of the mortgage industry (loan production, secondary marketing and loan administration) do not adequately incorporate and economically value homebuyer education and loan originator training.

Multicultural Homeownership Marketing Consultants (MHMC) is a marketing communications firm that provides mortgage- and real estate-related companies and non-profits successful business development strategies in Emerging Markets communities. We’re a little different than you might expect, so visit us at www.multihmc.com.