Please note this program would refinance out of private mortgages and into mortgages that federally guaranteed. If you want to fix housing then strategic default is best.
Seizing Mortgages Could Yield Big Returns
By Al Yoon | The Wall Street Journal
Tapping the power of eminent domain to repair underwater mortgages could generate investor returns of up to 30% and billions of dollars in fees for bankers behind the proposal, according to people with knowledge of the plan.
The use of eminent domain to seize and restructure mortgages is an idea that has enraged bondholders who worry they will be forced to sell mortgages from their securities to municipal governments at a steep discount. But the proposal, being pitched to municipalities by advisory firm Mortgage Resolution Partners, has piqued the interest of San Bernardino County and two other California municipalities where home-value declines of 50% or more have crippled local economies.
Despite the controversy, some potential investors in Mortgage Resolution’s plan are stepping forward. “We think the program has legs and a fairly strong legal justification” to seize mortgages with eminent domain, said Tom Capasse, co-head of Waterfall Asset Management, which said it is considering investing in the plan.
Under the plan, loans that are current and underwater—that is, their balances are greater than the home’s value—would be seized from mortgage bonds at prices up to 25% below appraised home values, then refinanced through a federal loan program.
It isn’t clear whether the eminent domain plan will get off the ground. The proposal has disturbed financial trade groups who say it violates mortgage contracts and isn’t a public use as required under eminent domain. The groups assert that Mortgage Resolution Partners will encourage municipalities to deeply undercut market value when buying the loans, doling out losses to mortgage bondholders and handing big gains to itself and its investors.
Tustin Overview
| Median home price is $399,000. Based on a rental parity value of $522,000, this market is under valued. |
| Monthly payment affordability has been worsening over the last 2 month(s). Momentum suggests worsening affordability. |
| Resale prices on a $/SF basis increased from $255/SF to $258/SF. |
| Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months. |
| Median rental rates increased $33 last month from $2,133 to $2,166. |
| Rents have been rising for 12 month(s). Price momentum suggests rising rents over the next three months. |
| Market rating = 8 |
Proprietary OC Housing News home purchase analysis 
1091 BONITA St Tustin, CA 92780
$369,000 …….. Asking Price
$245,000 ………. Purchase Price
2/18/2010 ………. Purchase Date
$124,000 ………. Gross Gain (Loss)
($19,600) ………… Commissions and Costs at 8%
============================================
$104,400 ………. Net Gain (Loss)
============================================
50.6% ………. Gross Percent Change
42.6% ………. Net Percent Change
17.1% ………… Annual Appreciation
Cost of Home Ownership
——————————————————————————
$369,000 …….. Asking Price
$12,915 ………… 3.5% Down FHA Financing
3.80% …………. Mortgage Interest Rate
30 ……………… Number of Years
$356,085 …….. Mortgage
$94,536 ………. Income Requirement
$1,659 ………… Monthly Mortgage Payment
$320 ………… Property Tax at 1.04%
………… Mello Roos & Special Taxes
$92 ………… Homeowners Insurance at 0.3%
$371 ………… Private Mortgage Insurance
………… Homeowners Association Fees
============================================
$2,442 ………. Monthly Cash Outlays
($253) ………. Tax Savings
($532) ………. Equity Hidden in Payment
$17 ………….. Lost Income to Down Payment
$112 ………….. Maintenance and Replacement Reserves
============================================
$1,786 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$5,190 ………… Furnishing and Move In at 1% + $1,500
$5,190 ………… Closing Costs at 1% + $1,500
$3,561 ………… Interest Points
$12,915 ………… Down Payment
============================================
$26,856 ………. Total Cash Costs
$27,300 ………. Emergency Cash Reserves
============================================
$54,156 ………. 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 # S705230 from our database. Please check back soon.
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$1,150,000 16605 CAMILIA Ave |
0.35 miles 4 bd / 3.5 ba 3,200 Sq. Ft. |
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$999,500 16608 SONORA St |
0.37 miles 5 bd / 3.25 ba 3,137 Sq. Ft. |
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$925,000 16602 Bayberry Rd |
0.44 miles 5 bd / 4 ba 2,872 Sq. Ft. |
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$939,900 10 RHODE Is |
1.01 miles 5 bd / 2.5 ba 2,872 Sq. Ft. |
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$829,777 18 East DEERWOOD |
1.46 miles 4 bd / 3 ba 3,300 Sq. Ft. |
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$888,000 15241 SEVERYNS Rd |
1.55 miles 4 bd / 3.5 ba 3,305 Sq. Ft. |
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$979,999 15306 NORMANDIE Ave |
1.69 miles 5 bd / 5 ba 3,700 Sq. Ft. |
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$1,188,000 19 WHITFORD |
1.96 miles 3 bd / 3 ba 2,800 Sq. Ft. |
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More signs of a weakening economy.
June mortgage delinquency rates rise 3.4% over May
Lender Processing Services (LPS) released Wednesday its “first look” month-end mortgage performance data for June, revealing that the loan delinquency rate fell year-over-year.
According to statistics from LPS’ loan-level database, loan delinquency fell from June 2011 by 7.3 percent. However, delinquency increased month-over-month, with June’s numbers being 3.4 percent higher than May’s.
The total U.S. loan delinquency rate is an estimated 7.14 percent. These statistics include loans that are 30 or more days overdue but are not yet in foreclosure.
LPS’ data also revealed an estimated 3,602,000 properties are 30 or more days past due, while approximately 1,590,000 are 90 or more days past due. A total of 5,663,000 properties are 30 days or more overdue or in foreclosure, LPS reported.
Year-over-year, the foreclosure presale inventory rate fell 1.0 percent. June recorded a total of 2,061,000 properties in foreclosure presale inventory, a 2.0 percent from May. The estimated total U.S. foreclosure presale inventory rate is 4.09 percent.
Nevada and Florida, two of the hardest-hit states in the foreclosure crisis, were among the top five states with the highest percentage of non-current loans. They were joined by Mississippi, New Jersey, and Illinois.
States with the lowest percentage of non-current loans included Montana, Alaska, Wyoming, and both North and South Dakota.