Posts Tagged ‘home market’
DENVER — Colorado Attorney General John Suthers announced today that Colorado has joined a $25 billion multistate settlement with the five largest national banks, Bank of America, JPMorgan Chase, Wells Fargo, Citi and Ally, who account for 60 percent of the home loan servicing market, to end problematic business practices and to help distressed homeowners. The settlement — the second largest multistate consumer protection settlement — will deliver $204.6 million worth of relief for Colorado homeowners.
Under the terms of the settlement, Colorado, which served on the executive committee that oversaw the settlement negotiations, will receive:
- $73.3 million that will be available to grant principal reductions on loans to make a modification possible. Approximately 40 percent of these funds will also be available to ease the effects of foreclosure, including waiving deficiency balances, enhanced cash-for-keys payments and blight prevention;
- $52.5 million in cash to the state;
- $46.3 million worth of refinancing benefits to underwater borrowers; and,
- $32.49 million in payments to homeowners who lost their homes to foreclosure between January 1, 2008 and December 31, 2011.
Nationally, the banks have agreed to:
- Commit a minimum of $17 billion directly to borrowers through a series of national homeowner relief options, including principal reduction. Given how the settlement is structured, servicers will actually provide up to an estimated $32 billion in direct homeowner relief.
- Commit $3 billion to a mortgage refinancing program for borrowers who are current, but owe more than their home is currently worth.
- Pay $5 billion to the states and federal government ($4.25 billion to the states and $750 million to the federal government).
- Provide homeowners with comprehensive new protections through new mortgage loan servicing and foreclosure standards.
- Be overseen by an independent monitor will ensure mortgage servicer compliance.
“This agreement delivers real help to homeowners affected by the banks’ dual tracking and other improper mortgage- and foreclosure-related processes,” Suthers said. “As a result of this settlement, the banks will end a series of problematic processes that put homeowners at a severe disadvantage during the foreclosure process. This settlement will not solve every problem with the housing market, but it goes a long way to helping homeowners in distress now and leveling the playing field for consumers.”
The settlement is the second largest multistate consumer protection enforcement settlement after the 1998 tobacco litigation settlement. This agreement is the result of a massive civil law enforcement investigation and initiative that includes state attorneys general and state banking regulators across the country and nearly a dozen federal agencies. It holds banks accountable for past mortgage servicing and foreclosure fraud and abuses and provides relief to homeowners. With the backing of a federal court order and the oversight of an independent monitor, the settlement stops future fraud and abuse.
Customers of the five settling banks who lost their homes to foreclosure between January 1, 2008 and December 31, 2011may be eligible for restitution under the settlement. The independent, third-party administrator of the settlement hopes to contact affected victims by the end of the summer. Customers of the five settling banks who are still in their homes but either behind on their payments or underwater should contact the banks directly through dedicated toll-free contact numbers to determine if they are eligible for assistance:
- Bank of America - 1-877-488-7814
- Chase - 1-866-372-6901
- Citi - 1-866-272-4749
- GMAC/Ally - 1-800-766-4622
- Wells Fargo – 1-800-288-3212
The Office of the Attorney General will work with the Governor’s Office and the General Assembly to ensure that the $52.5 million Colorado directly receives under the settlement will be used for purposes including foreclosure prevention, housing-counseling services, additional legal services for distressed homeowners, promotion of loan-modification opportunities and anti-blight efforts.
The settlement changes the way the banks do business. Under the agreement, the banks will be required to stop the use of robo-signing, end the process of dual tracking of loans, provide a single point of contact for consumers as they move through the loan-modification processes, create an online portal for consumers to get information about where they are in the loan-modification process, and abide by a strict set of deadlines for dealing with loan modifications. The settlement also requires that the banks post payments they receive to homeowners’ accounts within two business days of receiving them.
The foreclosure practices of the banks will be subject to strict oversight by an independent monitor who will provide regular reports to the participating states. The banks will be subject to stiff fines if they violate the terms of the agreement.
The settlement does not grant any immunity from criminal offenses and will not affect criminal prosecutions. The agreement does not prevent homeowners or investors from pursuing individual, institutional or class action civil cases against the five servicers. The pact also enables state attorneys general and federal agencies to investigate and pursue other aspects of the mortgage crisis, including securities cases.
Consumers interested in learning more about the multistate agreement can visit www.NationalMortgageSettlement.com orwww.coloradoattorneygeneral.gov/mortgagesettlement.
If consumers believe they have been affected by the banks’ problematic processes or have experienced any form of foreclosure fraud, they can file a complaint at www.coloradoattorneygeneral.gov/complaint. To learn more about Colorado’s ongoing fight against mortgage and foreclosure fraud, visit the Office of the Attorney General’s Mortgage Fraud Information Center.
Homeowners facing foreclosure also should contact the Colorado Foreclosure Hotline at 1-877-601-4673 or visitwww.coloradoforeclosurehotline.org. The hotline works with homeowners in or facing foreclosure. Homeowners who call the free hotline can speak with a housing counselor about their options.
A majority of Americans recently surveyed say now is a good time to buy a home. That’s no surprise, given that record-low mortgage interest rates and bargain home prices are boosting affordability.
But selling a home? That’s a different story. According to 71% of the 1,000 people surveyed by Fannie Mae in December, now is a good time to buy a house. But only 11% think it’s a good time to sell.
That’s because sellers sense that even if the housing market and the economy continue to show signs of improvement in 2012, the good news likely won’t be good enough for buyers to return to the market in droves—even if they can buy a home for a steal.
“For people to start buying in larger volume, they need to see home prices go up a bit,” says Ingo Winzer, president of Local Market Monitor, a firm that analyzes housing markets for bankers.
Many potential buyers also are waiting to see the jobs picture improve, which will give them confidence in the stability of their own employment, Mr. Winzer says.
Improvements Ahead
Still, various forecasts and surveys suggest better times for the housing market this year:
Sales of existing homes are expected to grow between 2% and 5% in 2012, according a recent forecast from Freddie Mac.
A recent survey of about 1,000 Re/Max real-estate agents found that 39% of agents think prices have hit bottom in their market, while almost 75% think home prices in their markets will have stopped declining by the end of 2012.
The number of improving housing markets rose to 76 in January, from 41 in December, according to the Improving Markets Index, from First American Financial Corp. and the National Association of Home Builders.
Nationwide, home prices are expected to be relatively flat in 2012, says Alex Villacorta, director of research and analytics at Clear Capital, a provider of real-estate asset-valuation data for financial-services companies. Indeed, 2012 seems to be a turning point before a healthier and sustained recovery in 2013, he says.
If You Can Hold Out
While now still may not be the perfect time to sell a home, it may be time for home sellers to get their places ready for a sale next year.
Of course, markets vary. Prices already are on the rise in some places, including parts of Florida, Washington, D.C., and Dayton, Ohio, Mr. Villacorta says.
But other markets—including Chicago, Atlanta, Detroit and Las Vegas—continue to be on a “downward slide,” according to a December report from Realtor.com.
Either way, holding out until next year could mean a quicker and more profitable sale.
“From a seller’s point of view, it’s still a little early, though tempting, to put the house up for sale and expect a lot of demand,” Mr. Villacorta says. “Unless there are circumstances that dictate they have to sell now, certainly waiting and tracking the markets a little bit more would be a more prudent thing to do.”
Still, some sellers have delayed their moving decisions for years now. For those champing at the bit to make a sale and move on with their lives, 2012 may offer glimmers of hope.
“There are a lot of people over the last few years that decided to put their life on hold,” says Budge Huskey, president of real-estate brokerage Coldwell Banker. Some now are saying, ‘I’ve waited long enough. I can’t put life on hold forever,’ ” Mr. Huskey says.
The market is finally nearing the point where people who don’t need to sell for financial reasons are starting to consider a move for lifestyle-related reasons, he says, such as a growing family that would be more comfortable in a larger home.
The good news for them: Inventory plunged to a 6.2-month supply in December, from a 12.4 month supply in July 2010, according to the National Association of Realtors. That means there are fewer sellers competing for buyers. (The month-supply figure is how long it would take to sell all the homes on the market now based on the current rate of sales per month. The higher the number, the more sellers there are looking for buyers.)
If You Can’t Wait
If you plan to sell a home this year, get the house in the best possible condition and price it to sell before it hits the market, Mr. Huskey says.
An appealing online listing, complete with quality photographs, is also crucial to bring traffic to your home.
“The buyer has the opportunity to prescreen all the homes online and see only the few that really shine online,” Mr. Huskey says, so a seller should do everything he or she can to get on a buyer’s shortlist of homes to physically visit.
Write to Amy Hoak at amy.hoak@dowjones.com
Amy Hoak is a reporter for MarketWatch. Read more at marketwatch.com.
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