The Collected Works of Author and Blogger Larry Roberts

Archive for July, 2012

The FHA has been the lender of last resort throughout the housing bubble crash. They insured loans which didn't properly price in risk during a declining market. No private lender would have made such loans, particularly as the super-low interest rates engineered by the federal reserve. The FHA has tried to raise its cost of money to cover the risk by increasing the insurance fees which drives up the effective interest rate, but their onerous fees have fallen short of covering the upcoming losses. In the FHA's defense, the loans they underwrote were of high quality, and although they reached pretty low for FICO scores, the documentation and underwriting was sufficient to protect the taxpayer from unqualified borrowers. What the…[READ MORE]

With millions of delinquent borrowers facing foreclosure, the death cries of so many desperate people was bound to have political ramifications. The unprecedented need to process tens of thousands of foreclosures spawned foreclosure mills like David Sterns law office and other who robo-signed documents. Such a process was bound to have a few errors. Although nobody who was making their payments faced foreclosure, the so-called robo-signer scandal prompted the major banks and services to negotiate a settlement agreement with the government to settle all claims and shield themselves from future litigation. Related to this same scandal, the federal reserve also got involved: Background The Federal Reserve Board issued enforcement actions against four large mortgage servicers--GMAC Mortgage, HSBC Finance Corporation, SunTrust…[READ MORE]

I have made mistakes in my life that made me want to go back in time and undo them. Sometimes you can, but sometimes you can't go back and reverse the damage. Taking on a reverse mortgage is one mistake that is very difficult to undo. I don't like reverse mortgages. I don't like many forms of debt, but reverse mortgages are one of the worst forms out there. According to the Department of Housing and Urban Development: A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that built up over years of home mortgage payments can be paid to you. But unlike…[READ MORE]

The California legislature passed the so-called Homeowners' Bill of Rights, and Jerry Brown has indicated he will sign it into law. So how does this new law change the foreclosure process? Let's take a closer look. Calif. Legislature OKs homeowners' bill of rights Marisa Lagos and Wyatt Buchanan -- Updated 11:33 p.m., Monday, July 2, 2012 What the legislation does: Delays: Bans banks from proceeding with a foreclosure when a homeowner is seeking a loan modification, a practice known as dual tracking. Dual tracking has always been part of the foreclosure process. Foreclosure is supposed to be a threat to compel a borrower to either pay up or sell and move out. Foreclosure is a threat designed to compel action.…[READ MORE]

The amend-extend-pretend policy of America's banks is most pronounced in New England, particularly New York where the lenders live. There have been very few foreclosures despite high default rates, partly because the judicial foreclosure process in these states is log-jammed, and partly because lenders don't want to foreclose and recognize their losses. Of course, this policy has prompted a great deal of strategic default among loan owners who recognize they can live for free, but it has succeeded in making everyone else believe their neighborhoods are somehow immune to the housing bust, at least until the last year when prices because to fall precipitously. I have gotten to know Keith Jurow over the last year or so. He authors articles…[READ MORE]

Page 4 of 512345