In a few years I vision a “Hunger” style games for loan owners. If you are a good loan owner and pay your underwater mortgage, then the fairy mortgage banker might grant you a principal reduction. The funny thing is that you need to be at 60 days delinquent to qualify for the this program, moral hazard?
BofA begins principal reduction under AG settlement
By Jon Prior May 8, 2012 • 9:17am HosingWire
Bank of America ($7.72 -0.24%) mailed letters to more than 200,000 mortgage borrowers for potential principal reduction under the robo-signing settlement.
The deal with the 49 state attorneys general and the five largest mortgage servicers was approved in March. It requires BofA to provide $11 billion in relief and fines for past foreclosure abuses and mishandled documentation. But soon after, the bank reached a side deal to provide more principal reduction and avoid roughly $850 million in fines.
The bank actually began some principal reduction in March. It offered 5,000 trial modifications with more than $700 million in write-downs.
To be eligible, a borrower must owe more on the mortgage than the home is worth, must be at least 60 days delinquent as of Jan. 31. The principal, interest, property tax and insurance must total more than 25% of the borrowers monthly income.
BofA said the write-downs will occur on its portfolio book but also for private mortgage bonds. The bank said investors in these securities gave the authority for the reduction. Fannie Mae and Freddie Mac loans are not eligible.
The bank expects the qualifying loans to be written down to a 100% loan-to-value ratio. Then, the interest rate will be lowered and it could forbear additional principal to save borrowers roughly 30% on their mortgage payments.
“Building on home retention and payment assistance programs already in place, we are meeting our obligation to deliver this additional relief to our customers following the completion of the recent global mortgage settlement,” said Ron Sturzenegger, who runs the bank’s legacy asset services division. “To the extent principal reduction and other modification tools help us turn mortgages headed for possible foreclosure into long-term performing loans, it will be positive for homeowners, mortgage investors and communities.”
Fullerton Overview
| Median home price is $369,000. Based on a rental parity value of $531,000, this market is under valued. |
| Monthly payment affordability has been improving over the last 4 month(s). Momentum suggests improving affordability. |
| Resale prices on a $/SF basis increased to $237/SF to $245/SF. |
| Resale prices have been weak for 12 month(s). Price momentum suggests weak prices over the next three months. |
| Median rental rates increased $26 last month from $$2,216 to $$2,242. |
| Rents have been slowly rising for 4 month(s). Price momentum suggests slowly rising rents over the next three months. |
| Market rating = 5 |
Proprietary OC Housing News home purchase analysis 
1356 MANZANITA Dr Fullerton, CA 92833
$489,000 …….. Asking Price
$489,000 ………. Purchase Price
5/2/2012 ………. Purchase Date
$0 ………. Gross Gain (Loss)
($39,120) ………… Commissions and Costs at 8%
============================================
($39,120) ………. Net Gain (Loss)
============================================
0.0% ………. Gross Percent Change
-8.0% ………. Net Percent Change
#NUM! ………… Annual Appreciation
Cost of Home Ownership
——————————————————————————
$489,000 …….. Asking Price
$17,115 ………… 3.5% Down FHA Financing
3.91% …………. Mortgage Interest Rate
30 ……………… Number of Years
$471,885 …….. Mortgage
$126,427 ………. Income Requirement
$2,228 ………… Monthly Mortgage Payment
$424 ………… Property Tax at 1.04%
………… Mello Roos & Special Taxes
$122 ………… Homeowners Insurance at 0.3%
$492 ………… Private Mortgage Insurance
………… Homeowners Association Fees
============================================
$3,266 ………. Monthly Cash Outlays
($343) ………. Tax Savings
($691) ………. Equity Hidden in Payment
$23 ………….. Lost Income to Down Payment
$142 ………….. Maintenance and Replacement Reserves
============================================
$2,397 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$6,390 ………… Furnishing and Move In at 1% + $1,500
$6,390 ………… Closing Costs at 1% + $1,500
$4,719 ………… Interest Points
$17,115 ………… Down Payment
============================================
$34,614 ………. Total Cash Costs
$36,700 ………. Emergency Cash Reserves
============================================
$71,314 ………. Total Savings Needed
——————————————————————————————————————————————-
This property is available for sale via the MLS.
Please contact Shevy Akason, #01836707
949.769.1599……
sales@ochousingnews.com…..
We're sorry, but it seems that we're having some problems loading MLS # R1202338 from our database. Please check back soon.
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$557,900 3021 East SORANO Pl |
0.46 miles 3 bd / 2.5 ba 1,739 Sq. Ft. |
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$599,000 1716 CHANTILLY Ln |
0.57 miles 3 bd / 2.5 ba 2,244 Sq. Ft. |
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$460,000 321 LATCHWOOD Ln |
1.01 miles 3 bd / 1.75 ba 1,700 Sq. Ft. |
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$529,000 1601 WOODMONT Pl |
1.07 miles 3 bd / 2 ba 1,932 Sq. Ft. |
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$619,000 1833 AVENIDA SELVA |
1.11 miles 5 bd / 2.5 ba 2,022 Sq. Ft. |
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$595,000 300 SANDLEWOOD Ave |
1.15 miles 4 bd / 2 ba 1,900 Sq. Ft. |
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$583,900 3028 East WALKING BEAM Pl |
1.17 miles 4 bd / 3 ba 2,001 Sq. Ft. |
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$566,900 3004 East WALKING BEAM Pl |
1.17 miles 3 bd / 2.5 ba 1,814 Sq. Ft. |
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$659,900 2504 ROYALE Pl |
1.17 miles 3 bd / 2 ba 2,100 Sq. Ft. |
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$898,900 422 West HERMOSA Dr |
1.18 miles 3 bd / 2.5 ba 1,921 Sq. F |
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Be wary anytime someone says “it’s different this time.”
Stabilization in prices this spring is “different” from previous years
When including distressed sales, home prices rose month-over-month by the same percentage point as they dropped year-over-year. CoreLogic reported Tuesday in its March Home Price Index (HPI) that compared to a year ago, prices declined 0.6 percent in March, while prices rose 0.6 percent compared to the month before in February. The monthly gain when including distressed sales is the first time since July 2011.
Distressed sales include short sales and REO transactions.
When excluding distressed sales, month-over-month prices went up for the third consecutive month, while year-over-year prices increased by 0.9 percent in March 2012 compared to the same month a year ago, according to CoreLogic’s HPI.
Mark Fleming, chief economist for CoreLogic, explained why the stabilization in prices this spring is different from previous years.
“Although this has been the case in each of the last two years, the difference this year is that stabilization is occurring without the support of tax credits and in spite of a declining share of REO sales,” said Fleming.
Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, 57 saw year-over-year price declines in March, which is eight fewer compared to February.
The CBSAs that saw the great drop in value when including distressed sales were Chicago, Illinois (-8.8 percent); Atlanta, Georgia (-8.1 percent); and Riverside, California (-3.2 percent).
The CBSAs with the greatest increase in value were Phoenix, Arizona (+7.7 percent); New York (+2 percent), and Dallas, Texas (+1.1 percent).
When excluding distressed sales, the CBSAs with the great decrease in prices were the same, with Chicago seeing a decrease of 2.7 percent, Atlanta 2.1 percent, and Riverside 1.2 percent. When looking at CBSAs with an increase in value after excluding distressed sales, the order was Houston, Texas (4.1 percent), with both Dallas and Phoenix closed behind at 4 percent.
When including distressed sales, the five states that experienced the greatest increase in home prices were Wyoming (+5.9 percent), West Virginia (+5.3 percent), Arizona (+5.1 percent), North Dakota (+4.7 percent) and Florida (+4.5 percent).
The five states with the greatest depreciation when including distressed sales were Delaware (-10.6 percent), Illinois (-8.3 percent), Alabama (-8.0 percent), Georgia (-7.3 percent) and Nevada (-5.8 percent).
When excluding distressed sales, Idaho took the lead at 5.4 percent, closely followed by North Dakota (+5.1 percent), South Carolina (+4.7 percent), Montana (+3.5 percent), and Kansas (+3.4 percent).
States that had the greatest decrease in value when excluding distressed sales were Delaware (-7.6 percent), Alabama (-4.1 percent), Nevada (-3.9 percent), Vermont (-3.9 percent) and Rhode Island (-2.9 percent).
Even with price gains above 5 percent for leading states and CBSAs, Capital Economics said in response to the CoreLogic report that over the year, prices are more likely to stabilize rather than make a dramatic climb.
“There are fears in some quarters, triggered by recent disappointing GDP and payrolls data, of a sharp slowdown in economic growth which could derail the fledgling improvement in the housing market,” said Paul Diggle, property economist for Capital Economics. “While we do not expect the economy to be strong enough to generate rapid house price gains, we do think that prices are either very close to, or already through, their trough.”