Foreclosure bailout: As efficient as a drunken postal worker

The New York Times explains why the Obama administration's foreclosure prevention plan isn't working as hoped:

Somewhere on earth, there must be a more difficult task than this: persuading American mortgage companies to lower payments for homeowners who can no longer afford their loans. But as Karina Montenegro struggles to accomplish this feat for a troubled borrower, she strains to imagine a more futile pursuit.

Ms. Montenegro, an intern at a local company that seeks loan modifications, dials Washington Mutual to check on the status of an application for a homeowner whose income has plummeted. She endures a Muzak-scored purgatory while on hold. Syrupy-voiced customer service representatives chide her for landing in the wrong department. She learns that the documents her company sent in have simply vanished — for the third time since November.

Comments

[Fuzzy Bear]

Interesting letter from the NAR regarding the new appraisal process:

TO: State Association Executive Officers
State Association Presidents
FROM: NAR Government Affairs
DATE: 19 June 2009
RE: Fly-In Head’s Up

Please note this notice is going to all state executive officers and state presidents. We will be sending Fly-In details on Monday June 22, 2009 to the states who have Members of Congress and/or United States Senators on the House Financial Services Committee or Senate Banking Committee. (list of states at end of memo)

There is growing concern in the real estate industry over the implementation of the Home Valuation Code of Conduct (HVCC) and its effect on the use of appraisal management companies (AMCs) by lenders.

NAR is taking the following actions: (Target dates in bold)

1. NAR is scheduling meetings with the Director of Federal Housing Finance Agency, Jim Lockhart to raise concerns about implementation of the HVCC and problems with AMCs and ask for an immediate 18 month moratorium. Director Lockhart is the conservator over Fannie and Freddie who entered the consent order with the NY Attorney General. ( June 22, 23, 24, or 25th)

2. Government Affairs will conduct a fly in the week of June 22. Two members from each Association (State AE/State President or FPC as appropriate) to meet with members/staff of the House and Senate Banking/Financial Services Committee. The ask will be to cosponsor the bill (item 3) and to support an 18 month moratorium.

3. Our legislative team will work on getting a bill introduced in Congress asking for a 18 month moratorium. (week of June 22)

4. We will ask the Chair and Ranking Members of the House and Senate Banking [ Reps Frank and Bachus/ Senators Dodd and Shelby] Committees to write Director Lockhart asking him to grant a 18 month moratorium (week of June 22)

5. We will try and get an 18 month moratorium attached to an immediate pending appropriation bill or other similar fast track bill. (June)

6. Staff will talk to the American Bankers Association who heretofore is fine with the AMC system to see if we can negotiate support.(June 19)

NAR will engage a coalition of Appraisal Institute, MBA, Home Builders and other appropriate trade groups.

7. NAR Research is conducting a survey so we have concrete data information to bring to the regulators and the NY Attorney General’s office . The survey will also be run through the State Association. EHS will be released next week and the appraisal issue will be mentioned front and center in NAR’s release. Survey release June 22

8. NAR is scheduling a meeting with NYS Attorney General Andrew Cuomo and representatives of NYSAR. (June 29. 30)

9. NAR will conduct a Call For Action if we do not get a moratorium in the next week to 10 days

NAR is aware of multiple petitions calling for an end to the HVCC. NAR is taking a more tempered and thoughtful approach of asking for a moratorium during this trouble housing economy.

States with Members of Congress and/or United States Senators on the House Financial Services Committee or Senate Banking Committee: AL, CA, CO, CT, DE, FL, GA, HI, ID, IL, IN, KS, KY, LA, MA, MI, MN, MO, MS, MT, NC, NE, NH, NJ, NY, OH, OK,OR
PA, RI, SC, SD, TN,TX, UT, VA, WI, WV

[Frank Gregoire]

The bill to establish the 18 month moratorium has been introduced. In fact, that happened last week. It's H.R. 3044. Text is not available on THOMAS, but click my name and scroll for a copy.

[Frank Lee]

Something's working in Hillsborough County:

Lis Pendens filings are down from May's 2,941 to June's 2,748. RELEASES continue to increase... up to 772 from 669 last month. This makes for a 28% release ratio. That ratio ran around 13% last year. June '08 saw 2,807 LPs and 383 RELLPs. Effectively on a year-to-year basis, "Foreclosure Filings" just realized a 24% DECREASE.

Nowhere near what I'd consider "healthy", but certainly on the right track.

[Tino]

Real estate data: as accurate as a drunken realtor

"For May, the group reported an 89% increase in sales in San Diego; that will be slashed to about 6.5%"

http://online.wsj.com/article/SB124638992043975185.html

[daleheiser]

I own a condo and have an outstanding balance of $140k, consisting of $104k primary and $36k secondary. I took the home equity to consolidate debts. At the time the property was valued at $163k but now it is valued at $134k. I'm looking to sell because i am engaged and will be moving into my fiancee's home. Check http://obamamortgage2009.blogspot.com/2009/03/obamas-mortgage-modification-do-you.html If I have a buyer who offers me within say $5-7k of the outstanding, can i agree to assume a loan on the residual and pay the bank the difference over time with interest? The same bank holds both mortgages.

[Frank Lee]

End of the month Hillsborough foreclosures data held new filings at 2,796 and releases at 772. Effectively *down* on month-to-month and year-to-year basis. In light of ABA's reported rise in delinquencies, this is good news *locally*.

When the flat sales and pricing report emerges from GTAR in a few days, "mixed" will be the spin. Good news that pricing is *not* tailspinning as the local doomsayers would have you believe, but underperforming last year's mini-spike.

Unfortunately, the leveling will not be reported by Shiller for another month. Jobs and delinquencies are an indicator of what may down the road in fall and winter. The "L" might end up being a Lounge Chair.