U.S. orders end to dual-track process

Acting Comptroller of the Currency John Walsh last week told banks to stop foreclosure proceedings if the borrower is starting or in the midst of a loan-modification program.

This dual-track system has hastened foreclosure for many borrowers who were caught between instructions to pay lower payments during a loan-modification trial period and punishing fines for failure to pay the full amount if the loan mod failed.

One regulator disagreed with the change, saying that lenders needed to be able to press forward with foreclosures, especially when borrowers clearly weren’t going to meet loan-modification standards.

Source: NAR

5 Predictions for 2011

Freddie Mac analysts point to five features that they believe will likely characterize the 2011 housing and mortgage markets:

1. Low mortgage rates. With Fed observers expecting the central bank to keep the federal funds rate at its current target range of 0% to 0.25% for most (or all) of 2011, relatively low mortgage rates will be a feature of the 2011 mortgage market. Thirty-year fixed-rate loans are likely to remain below 5% throughout the year, and initial rates of 5/1 hybrid adjustable-rate mortgages will likely remain below 4% in 2011.

2. Prices have hit bottom. House prices are likely to begin a gradual, but sustained recovery in the second half of 2011.

3. Housing will remain affordable. With affordability high, many first-time buyers will be attracted to the housing market in the New Year, likely translating into more home sales in 2011 than in 2010.

4. Refinances will dwindle. Many eligible borrowers have already refinanced and the federal Making Home Affordable refinance program is expiring on June 30. While fixed-rate loans are likely to remain low, they will move up gradually, making it even less likely that refinances will be attractive to most home owners.

5. Delinquency rates will decline. Based on the last several business cycles, the share of loans that are 90 or more days delinquent or in foreclosure proceedings–known as the “seriously delinquent rate”–generally crests within a year of the start of the recovery in payroll employment, and this economic recovery appears to fit within that pattern. Payrolls began to rise last January, and by the spring the seriously delinquent rate had begun to fall.

Source: Freddie Mac

No Foreclosures during the Holidays

Fannie Mae and Freddie Mac are freezing all foreclosure evictions on the mortgage loans they own or back from Dec. 20 through Jan. 3.

“If the property is occupied, our foreclosure attorneys will suspend the eviction to provide a greater measure of certainty to families during the holidays,” says Anthony Renzi, executive vice president of single family portfolio management at Freddie Mac.

Most of the large banks, including Bank of America, J.P. Morgan Chase, and Wells Fargo already observe a moratorium through the New Year, unless the foreclosure involves an investor who chooses not to observe the holiday policy.

Source: NAR