Federal Reserve Chairman Ben S. Bernanke, battling the worst housing recession in a quarter century, urged lenders to forgive portions of mortgages for more borrowers whose home values have declined.
``Efforts by both government and private-sector entities to reduce unnecessary foreclosures are helping, but more can, and should, be done,'' Bernanke said in a speech in Orlando, Florida today. ``Principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure.''
Showing posts with label mortgages. Show all posts
Showing posts with label mortgages. Show all posts
Tuesday, March 04, 2008
BERNANKE ASKS BANKS TO FORGIVE PORTION OF MORTGAGES
From Bloomberg:
Friday, September 07, 2007
RECORD FORECLOSURES REPORTED
Check out this chart that accompanies the story below for mortgage delinquency and foreclosure statistics for every state.
In Illinois there are 1.67 million mortgages listed with 5.09% past due and 1.05% more than 90 days so.
From USA Today:
With a warning that the worst is yet to come, the Mortgage Bankers Association said Thursday that lenders began foreclosure proceedings on a record number of homes this spring.
The turmoil in the mortgage market poses multiple threats, the MBA says. Foreclosures are likely to rise for at least another year. A bigger supply of homes in foreclosure would weaken prices in many areas. And people behind on loans will find it harder to refinance.
For all loan types, 5% of borrowers — nearly 2.5 million people — missed at least one payment last quarter. That's up from 4.4% in the same period last year.
The problems appear to be focused in seven states. Job losses in Michigan, Ohio and Indiana have depressed housing there. Those three states account for nearly 20% of the nation's homes in foreclosure.
And a rising number of defaults in four states — California, Nevada, Florida and Arizona — is largely why the U.S. delinquency rate is up. As home prices there fall, more people are in the upside-down position of owing more on their loans than their homes are worth.
California accounted for more than 17% of the subprime ARMs in the country and for more than 19% of the new foreclosures in the second quarter, the MBA says.
In Illinois there are 1.67 million mortgages listed with 5.09% past due and 1.05% more than 90 days so.
From USA Today:
With a warning that the worst is yet to come, the Mortgage Bankers Association said Thursday that lenders began foreclosure proceedings on a record number of homes this spring.
The turmoil in the mortgage market poses multiple threats, the MBA says. Foreclosures are likely to rise for at least another year. A bigger supply of homes in foreclosure would weaken prices in many areas. And people behind on loans will find it harder to refinance.
For all loan types, 5% of borrowers — nearly 2.5 million people — missed at least one payment last quarter. That's up from 4.4% in the same period last year.
The problems appear to be focused in seven states. Job losses in Michigan, Ohio and Indiana have depressed housing there. Those three states account for nearly 20% of the nation's homes in foreclosure.
And a rising number of defaults in four states — California, Nevada, Florida and Arizona — is largely why the U.S. delinquency rate is up. As home prices there fall, more people are in the upside-down position of owing more on their loans than their homes are worth.
California accounted for more than 17% of the subprime ARMs in the country and for more than 19% of the new foreclosures in the second quarter, the MBA says.
Friday, August 31, 2007
FEDERAL HOUSING ADMINISTRATION TO PROVIDE SAFETY NET
From USA Today:
President Bush announced a series of "limited" steps Friday designed to help homeowners struggling to pay their mortgages, expanding the role of the Federal Housing Administration and proposing a temporary change in tax law to prevent people from being penalized when they refinance risky "subprime" adjustable-rate mortgages.
Under Bush's proposal, an estimated 80,000 homeowners with bruised credit and subprime ARMs they can no longer afford will be able to refinance loans, which the Federal Housing Administration (FHA) would insure.
The move marks a historic expansion of the role of the FHA, a Depression-era agency that has traditionally served low- and moderate-income families and first-time buyers, but not delinquent borrowers. Nearly 16% of subprime borrowers are behind on their ARMs, and an estimated 2 million subprime ARMs totaling about $600 billion will reset to higher rates through the end of next year.
To qualify for the new benefit, homeowners would have to prove they paid their loan on time before it reset to a higher rate and must have at least 3% equity in the home.
Under current rules, the maximum loan the FHA can guarantee is $202,000 in most states and up to $362,000 in high-cost states such as California and New York.
Bush also called on Congress to pass his proposal to reform the FHA, in part by raising those loan limits to $262,000 in most states and $417,000 in pricier areas.
President Bush announced a series of "limited" steps Friday designed to help homeowners struggling to pay their mortgages, expanding the role of the Federal Housing Administration and proposing a temporary change in tax law to prevent people from being penalized when they refinance risky "subprime" adjustable-rate mortgages.
Under Bush's proposal, an estimated 80,000 homeowners with bruised credit and subprime ARMs they can no longer afford will be able to refinance loans, which the Federal Housing Administration (FHA) would insure.
The move marks a historic expansion of the role of the FHA, a Depression-era agency that has traditionally served low- and moderate-income families and first-time buyers, but not delinquent borrowers. Nearly 16% of subprime borrowers are behind on their ARMs, and an estimated 2 million subprime ARMs totaling about $600 billion will reset to higher rates through the end of next year.
To qualify for the new benefit, homeowners would have to prove they paid their loan on time before it reset to a higher rate and must have at least 3% equity in the home.
Under current rules, the maximum loan the FHA can guarantee is $202,000 in most states and up to $362,000 in high-cost states such as California and New York.
Bush also called on Congress to pass his proposal to reform the FHA, in part by raising those loan limits to $262,000 in most states and $417,000 in pricier areas.
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