500 Cities show need for more Rental Homes
In the aftermath of the nation's housing-market collapse and
recession, more than 500 midsize and large cities have seen a
rise in the share of homes that are rented rather than owned,
according to a USA TODAY analysis of Census data. Almost 4
million homes have been lost to foreclosures in the past five
years, turning many former owner-occupied homes into rentals. The
shift to rental housing is potentially long-lasting and portends
changes for neighborhood stability and how people build wealth,
economists say. "The changes are big but glacial," says Mark
Zandi, economist at Moody's Analytics.
The swing from owner- to tenant-occupied homes in the past decade
has been dramatic in some places:
- Of the 100 largest cities, some of those with the largest
shifts were Irvine, Calif., which went from about 40% of occupied
homes rented in 2000 to 49.8% in 2010; Philadelphia, from 40.7%
to 45.9%; and Birmingham, Ala., 46.3% to 50.7%.
- Twenty-five cities — including Baltimore, Minneapolis, Salt
Lake City and Sacramento — swung from having more than half
homeowners in 2000 to majorities of renters in 2010. In one —
Reading, Pa. — 57.6% of occupied homes were rentals in 2010, up
from 49% in 2000.
- Florida, California and Arizona had the most cities where the
share of renter-occupied housing grew by at least 5 percentage
points. All three states have been hit hard by foreclosures.
Nationwide, 34.9% of occupied homes — including houses, condos,
and apartments — were rented in 2010, up from 33.8% in 2000.
The Census data that USA TODAY analyzed for cities covered only
housing within the cities' boundaries, not their much larger
metropolitan areas. Vacant properties, excluding seasonal or
vacation homes, accounted for 7.9% of U.S. housing units in 2010.
It's not clear how many of those have since become rentals or
owner-occupied homes. The renter household market remained
fairly stable from 1990 to 2006, says Daniel McCue, senior
research analyst at Harvard University's Joint Center for Housing
Studies. Since 2006, when housing prices peaked, the number of
renter households in the U.S. has grown an average of 692,000 a
year, while owner households have fallen an average of 201,000 a
year, Census surveys show.
Several factors will boost rental growth for years to come, Zandi
says, including continued foreclosures, continued drops in home
prices that frighten buyers and potential cuts to government
subsidies supporting homeownership. On the other hand, 74% of
renters think owning is superior to renting, said a recent survey
by mortgage giant Fannie Mae. "There's still a pull toward
homeownership, although it's been diminished," McCue says.
American Eagle Realty, we are a realty company not a legal firm, we can help with all of your real estate needs including foreclosure. American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Loan Mods, too. Contact us we can help, We have helped others we can help you...
Whether you want buy, rent, or sell a home we can assist you. Commercial Property Too!
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
Friday, June 3, 2011
Tuesday, May 31, 2011
Home Prices Fall Below 2009 Bottom
Home prices fell below the 2009 housing bust bottom in the first
quarter, dropping 4.2% from the prior three months, according to
the S&P Case-Shiller national home price index. The 20-city
composite index was at 138.16, falling below the 2009 low of
139.26. It was the third straight quarterly drop for the index,
which was down 5.1% from a year earlier. National prices are now
down 32.7% from their peak set five years ago. The
S&P/Case-Shiller national home price index covers 80% of the
housing market. "This month's report is marked by the
confirmation of a double-dip in home prices across much of the
nation," said David Blitzer, spokesman for Standard and Poor's.
The housing market went through a brief recovery period starting
in mid-2009.
Home prices recovered nearly 5% of their earlier losses. After
homebuyer tax credits, which were in effect during the rebound,
expired last April, the slump resumed. "The rebound in prices
seen in 2009 and 2010 was largely due to the first-time home
buyers tax credit," said Blitzer. "Excluding the results of that
policy, there has been no recovery or even stabilization in home
prices during or after the recent recession." A separate
S&P/Case-Shiller index covering 20 major cities also dropped
during March, its eighth straight monthly decline. This is the
second month of the post-recession double dip for the 20-city
index. Prices peaked in July 2006 and then fell steadily through
April 2009. They then went on a winning streak that ran through
last June and prices, adjusted for seasonal differences, have
plunged every month since.
American Eagle Realty, we are a realty company not a legal firm, we can help with all of your real estate needs including foreclosure. American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Loan Mods, too. Contact us we can help, We have helped others we can help you...
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502-969-1801
quarter, dropping 4.2% from the prior three months, according to
the S&P Case-Shiller national home price index. The 20-city
composite index was at 138.16, falling below the 2009 low of
139.26. It was the third straight quarterly drop for the index,
which was down 5.1% from a year earlier. National prices are now
down 32.7% from their peak set five years ago. The
S&P/Case-Shiller national home price index covers 80% of the
housing market. "This month's report is marked by the
confirmation of a double-dip in home prices across much of the
nation," said David Blitzer, spokesman for Standard and Poor's.
The housing market went through a brief recovery period starting
in mid-2009.
Home prices recovered nearly 5% of their earlier losses. After
homebuyer tax credits, which were in effect during the rebound,
expired last April, the slump resumed. "The rebound in prices
seen in 2009 and 2010 was largely due to the first-time home
buyers tax credit," said Blitzer. "Excluding the results of that
policy, there has been no recovery or even stabilization in home
prices during or after the recent recession." A separate
S&P/Case-Shiller index covering 20 major cities also dropped
during March, its eighth straight monthly decline. This is the
second month of the post-recession double dip for the 20-city
index. Prices peaked in July 2006 and then fell steadily through
April 2009. They then went on a winning streak that ran through
last June and prices, adjusted for seasonal differences, have
plunged every month since.
American Eagle Realty, we are a realty company not a legal firm, we can help with all of your real estate needs including foreclosure. American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Loan Mods, too. Contact us we can help, We have helped others we can help you...
Whether you want buy, rent, or sell a home we can assist you. Commercial Property Too!
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
Friday, May 20, 2011
Everybody's Looking for the Deal - Real Trac
A new study conducted by Trulia and RealtyTrac found that 56 percent of U.S. renters and 47 percent of current homeowners are at least “somewhat likely” to purchase a foreclosed home.
Along with having some concerns about hidden costs, a risky buying process, and still-declining home values, many potential buyers expect to save money if they buy a foreclosure. In fact, the companies’ survey found that on average, respondents expect to pay 38 percent less for a foreclosed home than a similar home that was not in foreclosure.
RealtyTrac says their expectations are not too far above the average discount of 36 percent it’s currently seeing on sales of bank-owned REO homes.
Ken Shuman, a spokesperson for Trulia, said, “According to our latest data, it is more affordable to buy a home than to rent in 78 percent of major U.S. cities. With concerns of rising inflation and the potential for rising interest rates, now is a good time for people to buy and we may not be in this environment for much longer.”
The Trulia-RealtyTrac survey also polled respondents on the federal government’s efforts to help struggling homeowners. Forty-five percent of those surveyed said the government is not doing enough to prevent foreclosures. Only 17 percent say too much is being done, while 16 per-
cent say they are doing the right amount and 22 percent were undecided.
The widespread prevalence of distressed homeowners facing foreclosures in today’s market is one reason why negative sentiment toward the government may be so high, according to the companies’ report.
Almost one-third (30 percent) of homeowners said they themselves have, or they know someone who has experienced trouble with their mortgage situation and applied for a loan modification, stopped making their payments, been foreclosed on, simply walked away, or sold their home through a short sale transaction.
As more cities across the nation experience double dips in home prices, more than half (54 percent) of those surveyed believe recovery in the housing market will not happen until 2014 or later.
In a previous survey conducted six months ago, 42 percent of American adults said they thought the market would turn around by 2012 or had already turned around. Now, only 23 percent continue to hold this sentiment.
“Most Americans, as our latest survey revealed, overestimated how quickly the housing market would bounce back, but when it does, it will likely be a long and gradual process,” said Pete Flint, co-founder and CEO of Trulia. “Looking at the recent double dips in home prices, I expect the rest of 2011 to be volatile for real estate….In my eyes, we have another 18 months until we start to see signs of price stability in the housing market.”
Trulia and RealtyTrac have regularly conducted these surveys since 2008 to track consumers’ attitudes toward foreclosed homes and the housing market recovery.
“Our survey reflects a growing perception among potential homebuyers that the housing recovery is still a long way off,” commented Rick Sharga, RealtyTrac SVP. “Demand remains weak, loans are increasingly difficult to qualify for, and the shadow inventory of several million distressed properties is weighing down the market. All of these things need to improve before housing can recover.”
American Eagle Realty, we are a realty company not a legal firm, we can help with all of your real estate needs including foreclosure. American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Loan Mods, too. Contact us we can help, We have helped others we can help you...
Whether you want buy, rent, or sell a home we can assist you. Commercial Property Too!
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
Along with having some concerns about hidden costs, a risky buying process, and still-declining home values, many potential buyers expect to save money if they buy a foreclosure. In fact, the companies’ survey found that on average, respondents expect to pay 38 percent less for a foreclosed home than a similar home that was not in foreclosure.
RealtyTrac says their expectations are not too far above the average discount of 36 percent it’s currently seeing on sales of bank-owned REO homes.
Ken Shuman, a spokesperson for Trulia, said, “According to our latest data, it is more affordable to buy a home than to rent in 78 percent of major U.S. cities. With concerns of rising inflation and the potential for rising interest rates, now is a good time for people to buy and we may not be in this environment for much longer.”
The Trulia-RealtyTrac survey also polled respondents on the federal government’s efforts to help struggling homeowners. Forty-five percent of those surveyed said the government is not doing enough to prevent foreclosures. Only 17 percent say too much is being done, while 16 per-
cent say they are doing the right amount and 22 percent were undecided.
The widespread prevalence of distressed homeowners facing foreclosures in today’s market is one reason why negative sentiment toward the government may be so high, according to the companies’ report.
Almost one-third (30 percent) of homeowners said they themselves have, or they know someone who has experienced trouble with their mortgage situation and applied for a loan modification, stopped making their payments, been foreclosed on, simply walked away, or sold their home through a short sale transaction.
As more cities across the nation experience double dips in home prices, more than half (54 percent) of those surveyed believe recovery in the housing market will not happen until 2014 or later.
In a previous survey conducted six months ago, 42 percent of American adults said they thought the market would turn around by 2012 or had already turned around. Now, only 23 percent continue to hold this sentiment.
“Most Americans, as our latest survey revealed, overestimated how quickly the housing market would bounce back, but when it does, it will likely be a long and gradual process,” said Pete Flint, co-founder and CEO of Trulia. “Looking at the recent double dips in home prices, I expect the rest of 2011 to be volatile for real estate….In my eyes, we have another 18 months until we start to see signs of price stability in the housing market.”
Trulia and RealtyTrac have regularly conducted these surveys since 2008 to track consumers’ attitudes toward foreclosed homes and the housing market recovery.
“Our survey reflects a growing perception among potential homebuyers that the housing recovery is still a long way off,” commented Rick Sharga, RealtyTrac SVP. “Demand remains weak, loans are increasingly difficult to qualify for, and the shadow inventory of several million distressed properties is weighing down the market. All of these things need to improve before housing can recover.”
American Eagle Realty, we are a realty company not a legal firm, we can help with all of your real estate needs including foreclosure. American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Loan Mods, too. Contact us we can help, We have helped others we can help you...
Whether you want buy, rent, or sell a home we can assist you. Commercial Property Too!
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
Wednesday, May 18, 2011
More Underwater as Home Values Post Sharpest Drop Since 2008: Zillow
Home values in the United States fell faster in the first
quarter of 2011 than they have in any quarter since 2008,
when the housing market experienced its worst performance,
according to a new report from Zillow.
The Seattle-based company’s index of residential property
values fell 3 percent nationally during the first three
months of this year when compared to the fourth quarter of
2010.
As a result, negative equity hit a new high-water mark by
the end of the first quarter, with 28.4 percent of
homeowners with mortgages owing more on the loan than their
home is worth, Zillow said. The company’s underwater ratio
is up from 27 percent in the fourth quarter of 2010.
Zillow’s first-quarter index reading of home values came in
at $169,600, 8.2 percent below where it was a year earlier.
The company says home values have fallen 29.5 percent since
they peaked in June 2006.
Meanwhile, foreclosures rose throughout the first quarter as
banks unfroze moratoriums and allowed foreclosures to
resume. Foreclosures had fallen in late 2010 due to the slew
of temporary suspensions brought about by the “robo-signing”
controversy.
But by March, Zillow says activity had picked up once again,
with one out of every 1,000 homes in the country lost to
foreclosure during the month.
With the substantial home value declines, as well as
increasing negative equity and foreclosures, Zillow says it
is unlikely that home values will reach a bottom in 2011.
First-quarter data has prompted Zillow to revise its
forecast, now predicting a bottom in 2012 “at the earliest.”
“Home value declines are currently equal to those we
experienced during the darkest days of the housing
recession,” said Dr. Stan Humphries, chief economist for
Zillow. “With accelerating declines during the first
quarter, it is unreasonable to expect home values to return
to stability by the end of 2011.”
Humphries says he did expect a “substantial payback” from
the federal government’s homebuyer tax credit initiative,
which buoyed the housing market last year. But he warns that
diminished demand post-tax credit, as well as rising
foreclosures and high negative equity rates “make it almost
certain that we won’t see a bottom in home values until 2012
or later.”
Zillow says very few markets were exempt from home value
declines in the first quarter. Ninety-seven percent of the
132 markets covered by Zillow logged home value declines.
Only the Fort Myers, Florida; Champaign-Urbana, Illinois;
and Honolulu, Hawaii metro areas experienced quarterly
increases, with home values rising 2.4 percent, 0.8 percent,
and 0.3 percent, respectively. Home values in the Sarasota,
Florida metro remained flat.
American Eagle Realty, we are a realty company not a legal firm, we can help with all of your real estate needs including foreclosure. American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Loan Mods, too. Contact us we can help, We have helped others we can help you...
Whether you want buy, rent, or sell a home we can assist you. Commercial Property Too!
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
quarter of 2011 than they have in any quarter since 2008,
when the housing market experienced its worst performance,
according to a new report from Zillow.
The Seattle-based company’s index of residential property
values fell 3 percent nationally during the first three
months of this year when compared to the fourth quarter of
2010.
As a result, negative equity hit a new high-water mark by
the end of the first quarter, with 28.4 percent of
homeowners with mortgages owing more on the loan than their
home is worth, Zillow said. The company’s underwater ratio
is up from 27 percent in the fourth quarter of 2010.
Zillow’s first-quarter index reading of home values came in
at $169,600, 8.2 percent below where it was a year earlier.
The company says home values have fallen 29.5 percent since
they peaked in June 2006.
Meanwhile, foreclosures rose throughout the first quarter as
banks unfroze moratoriums and allowed foreclosures to
resume. Foreclosures had fallen in late 2010 due to the slew
of temporary suspensions brought about by the “robo-signing”
controversy.
But by March, Zillow says activity had picked up once again,
with one out of every 1,000 homes in the country lost to
foreclosure during the month.
With the substantial home value declines, as well as
increasing negative equity and foreclosures, Zillow says it
is unlikely that home values will reach a bottom in 2011.
First-quarter data has prompted Zillow to revise its
forecast, now predicting a bottom in 2012 “at the earliest.”
“Home value declines are currently equal to those we
experienced during the darkest days of the housing
recession,” said Dr. Stan Humphries, chief economist for
Zillow. “With accelerating declines during the first
quarter, it is unreasonable to expect home values to return
to stability by the end of 2011.”
Humphries says he did expect a “substantial payback” from
the federal government’s homebuyer tax credit initiative,
which buoyed the housing market last year. But he warns that
diminished demand post-tax credit, as well as rising
foreclosures and high negative equity rates “make it almost
certain that we won’t see a bottom in home values until 2012
or later.”
Zillow says very few markets were exempt from home value
declines in the first quarter. Ninety-seven percent of the
132 markets covered by Zillow logged home value declines.
Only the Fort Myers, Florida; Champaign-Urbana, Illinois;
and Honolulu, Hawaii metro areas experienced quarterly
increases, with home values rising 2.4 percent, 0.8 percent,
and 0.3 percent, respectively. Home values in the Sarasota,
Florida metro remained flat.
American Eagle Realty, we are a realty company not a legal firm, we can help with all of your real estate needs including foreclosure. American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Loan Mods, too. Contact us we can help, We have helped others we can help you...
Whether you want buy, rent, or sell a home we can assist you. Commercial Property Too!
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
Tuesday, May 17, 2011
Commercial Real Estate Hurting Small Banks
The delinquency rate on commercial mortgage-backed securities hit
a record 9.62% in April, according to a report by Trepp, a firm
that tracks commercial real estate and banking data. Analysts
expect that to rise above 10% by year end. On the bright side,
that forecast marks a slight improvement over prior estimates
that cmaxalled for defaults to top 12%. The bulk of the rising
delinquencies are falling squarely on the shoulders of small and
regional banks, forcing dozens to close. Thirteen banks failed
in April, with nearly all them heavily exposed to commercial real
estate. It's a familiar pattern that U.S. regulators say they've
been observing for several months.
Small to regional banks -- defined as banks holding less than
$100 billion in assets -- have $784 billion in commercial real
estate loans on their books, according to the Independent
Community Bankers Association of America. That's about 71% of the
total market. At the height of the bubble, small-to-midsized
banks underwrote more than $200 billion in risky land and
construction loans, where the collateral on the loan wasn't
office space but vacant land or incomplete construction sites.
Among the 13 banks shut down last month, commercial real estate
loans made up 79% of their non-performing loans, defined as loans
in default or close to default. Non-performing residential real
estate loans made up only 15% of those loan portfolios. For
example, Cortez Community Bank in Florida, which was shuttered by
the FDIC on April 29, had 76% of its loans in commercial real
estate. Another failed bank, Nexity Bank of Alabama, had a loan
portfolio that was 87% commercial real estate loans.
American Eagle Realty, we are a realty company not a legal firm, we can help with all of your real estate needs including foreclosure. American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Loan Mods, too. Contact us we can help, We have helped others we can help you...
Whether you want buy, rent, or sell a home we can assist you. Commercial Property Too!
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
a record 9.62% in April, according to a report by Trepp, a firm
that tracks commercial real estate and banking data. Analysts
expect that to rise above 10% by year end. On the bright side,
that forecast marks a slight improvement over prior estimates
that cmaxalled for defaults to top 12%. The bulk of the rising
delinquencies are falling squarely on the shoulders of small and
regional banks, forcing dozens to close. Thirteen banks failed
in April, with nearly all them heavily exposed to commercial real
estate. It's a familiar pattern that U.S. regulators say they've
been observing for several months.
Small to regional banks -- defined as banks holding less than
$100 billion in assets -- have $784 billion in commercial real
estate loans on their books, according to the Independent
Community Bankers Association of America. That's about 71% of the
total market. At the height of the bubble, small-to-midsized
banks underwrote more than $200 billion in risky land and
construction loans, where the collateral on the loan wasn't
office space but vacant land or incomplete construction sites.
Among the 13 banks shut down last month, commercial real estate
loans made up 79% of their non-performing loans, defined as loans
in default or close to default. Non-performing residential real
estate loans made up only 15% of those loan portfolios. For
example, Cortez Community Bank in Florida, which was shuttered by
the FDIC on April 29, had 76% of its loans in commercial real
estate. Another failed bank, Nexity Bank of Alabama, had a loan
portfolio that was 87% commercial real estate loans.
American Eagle Realty, we are a realty company not a legal firm, we can help with all of your real estate needs including foreclosure. American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Loan Mods, too. Contact us we can help, We have helped others we can help you...
Whether you want buy, rent, or sell a home we can assist you. Commercial Property Too!
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
Thursday, May 5, 2011
Home Prices Have Double Dipped
Home prices nationwide have double dipped, with prices plunging below their March 2009 bottom, the Clear Capital research firm reports.
The company's monthly Home Data Index shows home prices double dipping 0.7 percent below the previous record low set in March 2009.
Sales of bank-owned (REO) properties hit 34.5 percent of the market, helping to send quarterly home prices down 4.9 percent and 5.0 percent when compared with March 2010.
National home prices have fallen 11.5 percent in the past nine months, a rate not seen since 2008.
"With more than one-third of national home sales being REO (bank owned), market prices are being weighed down, as many markets have not regained enough footing to withstand the strain of the high proportion of REO sales," says Clear Capital's Alex Villacorta, according to CNBC.
Looking forward, market watchers will play close attention to the index in spring — a more-active buying season — to see if organic demand for housing can push the index back into growth territory.
"In light of the compounding effects of winter’s seasonal slowdown and increased distressed sale activity, the market now faces the true test of whether prices can rebound in the historically active spring season," Villacorta says, this time according to Housing Wire, a financial news service for the mortgage industry.
American Eagle Realty, we are a realty company not a legal firm, we can help with all of your real estate needs including foreclosure. American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Loan Mods, too. Contact us we can help, We have helped others we can help you...
Whether you want buy, rent, or sell a home we can assist you.
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
The company's monthly Home Data Index shows home prices double dipping 0.7 percent below the previous record low set in March 2009.
Sales of bank-owned (REO) properties hit 34.5 percent of the market, helping to send quarterly home prices down 4.9 percent and 5.0 percent when compared with March 2010.
National home prices have fallen 11.5 percent in the past nine months, a rate not seen since 2008.
"With more than one-third of national home sales being REO (bank owned), market prices are being weighed down, as many markets have not regained enough footing to withstand the strain of the high proportion of REO sales," says Clear Capital's Alex Villacorta, according to CNBC.
Looking forward, market watchers will play close attention to the index in spring — a more-active buying season — to see if organic demand for housing can push the index back into growth territory.
"In light of the compounding effects of winter’s seasonal slowdown and increased distressed sale activity, the market now faces the true test of whether prices can rebound in the historically active spring season," Villacorta says, this time according to Housing Wire, a financial news service for the mortgage industry.
American Eagle Realty, we are a realty company not a legal firm, we can help with all of your real estate needs including foreclosure. American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Loan Mods, too. Contact us we can help, We have helped others we can help you...
Whether you want buy, rent, or sell a home we can assist you.
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
Thursday, April 14, 2011
Big Banks Get Foreclosure Orders
Regulators Detail Steps Lenders Must Take to Revamp Processes; Fines Are Still to Come
In a Wall Street Journal Article posted today U.S. regulators hit the nation's largest banks with a first round of sweeping penalties for improper home-foreclosure practices, issuing detailed orders to revamp the way they deal with troubled borrowers.
The orders issued on Wednesday to 14 financial institutions didn't include fines. Officials said they are coming.
"There will be civil money penalties; the question is timing and amount. But we're not letting that clock run forever," Acting Comptroller of the Currency John Walsh told reporters. The orders were issued by his office, the Federal Reserve and the Office of Thrift Supervision.
The bank regulators' action came as Obama administration officials and representatives of state attorneys general met with the bank representatives in an ongoing effort to reach a broader deal over alleged mortgage-servicing abuses, which brought foreclosures to a near halt last fall. All sides want a settlement that can resolve the issue so foreclosures can proceed again, which could help the sickly housing market.
Some attorneys general and administration officials have pushed for banks to pay more than $20 billion in civil fines or to devote a comparable amount to modifying mortgages held by distressed borrowers.
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Several officials said the regulators' action wouldn't undermine the broader settlement talks. "This doesn't change what we are doing," said Iowa Attorney General Tom Miller in an interview. Mr. Miller, who is spearheading the 50-state investigation, said, "We are moving ahead full speed."
Outside observers said the orders could make it harder for state attorneys general to extract greater concessions from the banks.
"The biggest stick in this fight just settled, so there's going to be a lot less pressure on the banks to agree to a radical resolution to resolve the state complaints," said Jaret Seiberg, an analyst in Washington with MF Global.
Mark Zandi, chief economist at Moody's Analytics, said the agreement appears to require only "modest changes" to banks' foreclosure process and is unlikely to have a big impact on the housing market or broader economy. Still, Mr. Zandi added, "the foreclosure process will remain bogged down and a true bottom in the housing market elusive" until the banks reach a complete settlement with the state attorneys general.
Bank executives said the changes ordered would be anything but modest. "It's very demanding and there is a lot that we have to do," said one bank official. "It will be fairly expensive and a big resource drain."
The regulators issued the orders to the nation's four largest banks—Bank of America Corp., Wells Fargo & Co., J.P. Morgan Chase & Co. and Citigroup Inc. Also receiving orders were Ally Financial Inc., HSBC Holdings PLC, MetLife Inc., PNC Financial Services Group Inc., SunTrust Banks Inc., U.S. Bancorp, Aurora Bank, EverBank, OneWest Bank and Sovereign Bank.
Bank of America, Wells Fargo, J.P. Morgan and Citigroup were ordered to revamp mortgage-lending practices.
Under the orders, banks have 60 days to establish plans to clean up their mortgage-servicing processes to prevent documentation errors.
The orders also direct banks to take steps to ensure they have enough staff to handle the flood of foreclosures, that foreclosures don't happen when a borrower is receiving a loan modification and that borrowers have a single point of contact throughout the loan-modification and foreclosure process.
Banks must hire an independent consultant to conduct a "look back" of all foreclosure proceedings from 2009 and 2010 to evaluate whether they improperly foreclosed on any homeowners and require each company to establish its own process to consider whether to compensate borrowers who have been harmed.
Critics, including other regulators, believe this process and other aspects of the orders leave too much discretion to banks.
J.P. Morgan, in a statement, acknowledged that the consent orders "are targeted directly at weaknesses in our processes and controls." The New York bank took a charge of $1.1 billion in the first quarter to reflect higher mortgage-servicing costs that resulted from a string of new regulations enacted after the financial crisis.
Other banks said many of the required changes already are under way. "This is an unprecedented measure and a tough message to take, but it will make mortgage servicing practices better across the board," Wells Fargo said. The San Francisco bank said it already has taken numerous actions to address the issues, including hiring 10,000 employees since 2009 to deal with foreclosure issues.
PNC Financial Services sought to distance itself from the industry's mess, saying that it represents just 1.5% of the mortgage-servicing business. A spokesman for the Pittsburgh bank said that its internal review had determined that the bank didn't foreclose on customers without a "valid reason or appropriate documents."
Even before the orders became public, critics charged that the bank regulators were letting servicers off too easy and were undercutting the broader talks.
The OCC, which has been the target of most criticism, defended the enforcement orders. "They require substantial corrective actions," Mr. Walsh said. "The banks are going to have to do substantial work, bear substantial expense to fix the problems that we identified" as well as to identify and compensate homeowners that suffered financial harm.
The Federal Deposit Insurance Corp. in a statement called the orders "only a first step" and declared its full support for the broader talks. "The enforcement orders announced [Wednesday] complement, rather than pre-empt or impede, this ongoing collaboration," it said.
By VICTORIA MCGRANE, ALAN ZIBEL and ROBIN SIDEL —Ruth Simon contributed to this article.
http://online.wsj.com/article/SB10001424052748703551304576260952761726790.html?mod=WSJ_RealEstate_LeftTopNews
American Eagle Realty, we are a realty company not a legal firm, we can help with all of your real estate needs including foreclosure. American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Loan Mods, too. Contact us we can help, We have helped others we can help you...
Whether you want buy, rent, or sell a home we can assist you.
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
In a Wall Street Journal Article posted today U.S. regulators hit the nation's largest banks with a first round of sweeping penalties for improper home-foreclosure practices, issuing detailed orders to revamp the way they deal with troubled borrowers.
The orders issued on Wednesday to 14 financial institutions didn't include fines. Officials said they are coming.
"There will be civil money penalties; the question is timing and amount. But we're not letting that clock run forever," Acting Comptroller of the Currency John Walsh told reporters. The orders were issued by his office, the Federal Reserve and the Office of Thrift Supervision.
The bank regulators' action came as Obama administration officials and representatives of state attorneys general met with the bank representatives in an ongoing effort to reach a broader deal over alleged mortgage-servicing abuses, which brought foreclosures to a near halt last fall. All sides want a settlement that can resolve the issue so foreclosures can proceed again, which could help the sickly housing market.
Some attorneys general and administration officials have pushed for banks to pay more than $20 billion in civil fines or to devote a comparable amount to modifying mortgages held by distressed borrowers.
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Several officials said the regulators' action wouldn't undermine the broader settlement talks. "This doesn't change what we are doing," said Iowa Attorney General Tom Miller in an interview. Mr. Miller, who is spearheading the 50-state investigation, said, "We are moving ahead full speed."
Outside observers said the orders could make it harder for state attorneys general to extract greater concessions from the banks.
"The biggest stick in this fight just settled, so there's going to be a lot less pressure on the banks to agree to a radical resolution to resolve the state complaints," said Jaret Seiberg, an analyst in Washington with MF Global.
Mark Zandi, chief economist at Moody's Analytics, said the agreement appears to require only "modest changes" to banks' foreclosure process and is unlikely to have a big impact on the housing market or broader economy. Still, Mr. Zandi added, "the foreclosure process will remain bogged down and a true bottom in the housing market elusive" until the banks reach a complete settlement with the state attorneys general.
Bank executives said the changes ordered would be anything but modest. "It's very demanding and there is a lot that we have to do," said one bank official. "It will be fairly expensive and a big resource drain."
The regulators issued the orders to the nation's four largest banks—Bank of America Corp., Wells Fargo & Co., J.P. Morgan Chase & Co. and Citigroup Inc. Also receiving orders were Ally Financial Inc., HSBC Holdings PLC, MetLife Inc., PNC Financial Services Group Inc., SunTrust Banks Inc., U.S. Bancorp, Aurora Bank, EverBank, OneWest Bank and Sovereign Bank.
Bank of America, Wells Fargo, J.P. Morgan and Citigroup were ordered to revamp mortgage-lending practices.
Under the orders, banks have 60 days to establish plans to clean up their mortgage-servicing processes to prevent documentation errors.
The orders also direct banks to take steps to ensure they have enough staff to handle the flood of foreclosures, that foreclosures don't happen when a borrower is receiving a loan modification and that borrowers have a single point of contact throughout the loan-modification and foreclosure process.
Banks must hire an independent consultant to conduct a "look back" of all foreclosure proceedings from 2009 and 2010 to evaluate whether they improperly foreclosed on any homeowners and require each company to establish its own process to consider whether to compensate borrowers who have been harmed.
Critics, including other regulators, believe this process and other aspects of the orders leave too much discretion to banks.
J.P. Morgan, in a statement, acknowledged that the consent orders "are targeted directly at weaknesses in our processes and controls." The New York bank took a charge of $1.1 billion in the first quarter to reflect higher mortgage-servicing costs that resulted from a string of new regulations enacted after the financial crisis.
Other banks said many of the required changes already are under way. "This is an unprecedented measure and a tough message to take, but it will make mortgage servicing practices better across the board," Wells Fargo said. The San Francisco bank said it already has taken numerous actions to address the issues, including hiring 10,000 employees since 2009 to deal with foreclosure issues.
PNC Financial Services sought to distance itself from the industry's mess, saying that it represents just 1.5% of the mortgage-servicing business. A spokesman for the Pittsburgh bank said that its internal review had determined that the bank didn't foreclose on customers without a "valid reason or appropriate documents."
Even before the orders became public, critics charged that the bank regulators were letting servicers off too easy and were undercutting the broader talks.
The OCC, which has been the target of most criticism, defended the enforcement orders. "They require substantial corrective actions," Mr. Walsh said. "The banks are going to have to do substantial work, bear substantial expense to fix the problems that we identified" as well as to identify and compensate homeowners that suffered financial harm.
The Federal Deposit Insurance Corp. in a statement called the orders "only a first step" and declared its full support for the broader talks. "The enforcement orders announced [Wednesday] complement, rather than pre-empt or impede, this ongoing collaboration," it said.
By VICTORIA MCGRANE, ALAN ZIBEL and ROBIN SIDEL —Ruth Simon contributed to this article.
http://online.wsj.com/article/SB10001424052748703551304576260952761726790.html?mod=WSJ_RealEstate_LeftTopNews
American Eagle Realty, we are a realty company not a legal firm, we can help with all of your real estate needs including foreclosure. American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Loan Mods, too. Contact us we can help, We have helped others we can help you...
Whether you want buy, rent, or sell a home we can assist you.
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
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