Old technology and $10.50-an-hour untrained workers are among the problems of 'dysfuctional' servicing industry, Pro Publica reports.
We've all heard stories about homeowners who have spent months in loan-modification hell, trying to wring a modification of their mortgage terms from an institution that seems to do little besides lose documents.
"There were some papers I had to send them 11 times," California homeowner Alex Burris told Pro Publica, for a story on the dysfunctional mortgage-servicing industry.
As part of a five-part series on the federal government's failed loan-modification programs, Pro Publica has written a detailed and insightful story on why the loan servicers do such a poor job with homeowners' requests for modifications. You can read all the stories so far in the series here.
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The short explanation is that servicers, which are not the actual lenders, have little to gain from modifications, since they make more money from foreclosing.
Up to 50 representatives have elected not to rent apartments in Washington. Some say housing is too expensive, and others want to make a statement.
They haven't joined the "The Rent Is Too Damn High Party," but at least 33 members of Congress are having a nightly pajama party, deciding they'd rather sleep in their offices than pay rent for an apartment in Washington, D.C.
Like everything in Washington, this has turned into a political brouhaha. Rep. Hansen Clarke, D-Mich., even appeared on the "Today" show in his pajamas.
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Freshman Rep. Todd Rokita, R-Ind., said he decided to sleep in his office after seeing a 600-square-foot studio for $2,000 a month. "I'm not doing this as a political stunt," he told The Wall Street Journal. "I'm doing this because I'm a cheap b------."
Facing financial reverses, once wealthy homeowners rent out rooms to pay bills and try to keep their homes.
Years ago, new immigrant families used to take boarders into their already crowded quarters in an effort to make ends meet.
The recession has brought us a new twist on this survival story: owners of mansions who are renting out rooms to pay their bills.
"It's just what can we do to survive until things get better, to put food on the table and have water and electricity," Trece Canham of Tarpon Springs, Fla., north of Tampa, told Leonora LaPeter Anton of The St. Petersburg Times. "But I would be dishonest if I said that's all my concern was. No, I want to keep my house. I don't want to lose everything we've worked so hard for."
The Canhams are renting out five rooms in their 7,000-square-foot house, plus a garage apartment. The house in Tarpon Springs, Fla., north of Tampa, was once valued at more than $2 million. It drew an offer of $450,000 in a short sale. Tim Canham's general-contracting business, which once grossed more than $3 million a year, doesn't make enough to support the family, and they had already sold anything they had of value.
Taking in boarders, at $500 to $600 per month each, seemed to be the only way they could keep their house and pay their bills. "This is all new to us," Trese told The Times. "We're struggling, too." You can see photos and videos of the house here.
New rankings calculate violent crime and property crime together, so the 'danger' could be of your car being stolen. The cities with the highest murder rate aren't even on the list.
One factor we all consider in choosing where to live is crime.
U.S. News has just come out with a ranking of America's 11 most dangerous cities, based on an analysis of seven years of FBI data.
The most dangerous city, according to the ranking, is St. Louis, followed by Atlanta and Birmingham, Ala. The rate of crime in St. Louis is more than five times the national average.
Rounding out the top 11 were Orlando, Fla.; Detroit; Memphis, Tenn.; Miami; Baltimore; Kansas City, Mo.; and a tie between Minneapolis and Cleveland.
After decades in Miami, we've gotten blasé about such lists. We've only been carjacked once.
One flaw in the ranking is that it mixes violent crime and property crime. So while the listing purports to be of America's 11 most dangerous cities, it's really the 11 cities with the highest incidence of ALL crimes, which doesn't make nearly as sexy a headline.
The danger in some of these cities could be of your house being burglarized. Property crimes make up most of the crimes in all jurisdictions, so a city with high property crime and low violent crime could still rank high on this list.
FHA predicted its program would help up to 1.5 million families, but most lenders refuse to reduce principal. Fannie and Freddie won't play, either.
Last fall, the federal government announced a refinancing plan to help homeowners who were current on their mortgages, but were underwater and so couldn't refinance through conventional channels.
"We're throwing a lifeline out to those families who are current on their mortgage and are experiencing financial hardships because property values in their community have declined," FHA Commissioner David H. Stevens said in a news release announcing the FHA Short Refinance program.
It hasn't been much of a lifeline.
Since the program began, only 38 homeowners have refinanced through the program and an additional 223 applications are pending, USA Today reports. That's far from the 500,000 to 1.5 million the government predicted could benefit from the program, which lasts through 2012.
Rates likely to rise this year, but other factors probably will keep homes affordable.
The rate for a 30-year mortgage dipped slightly this week, but it probably doesn't mean we're in for another season of record low mortgage rates.
Analysts expect rates to rise, perhaps to 5.5% by the end of the year. While rising interest rates in theory make homes less affordable, falling prices may balance them out.
Freddie Mac's weekly mortgage market survey found that the average rate for a 30-year fixed mortgage was 5% for the week ending Feb. 17, down from 5.05% last week. Last year at this time, the rate was 4.93%
The rate for a 15-year fixed-rate mortgage averaged 4.27%, down from 4.29% last week and down from 4.33% at this time last year.
State's chief judge decries 'uneven playing field' and says move will make system more efficient. Other states say they can't afford such aid.
New York's chief judge has decided that New York should provide free legal help to homeowners facing foreclosure, making it the first and only state to do so.
"It’s such an uneven playing field," chief judge Jonathan Lippman told The New York Times. "Banks wind up with the property and the homeowner winds up over the cliff, on the street. It doesn’t serve anyone’s interest, including the banks."
Providing lawyers for homeowners in foreclosure also would help speed up the judicial process, Lippman said.
While criminal defendants have the right to free legal help if they can't afford lawyers, Americans are usually on their own in civil cases, such as foreclosure.
The program will begin this week in Queens and Orange counties.
New York has already enacted some protections for homeowners that are absent in other states, including requiring lawyers to be personally liable for the accuracy of the documents they submit and requiring mediation. Foreclosure is a court procedure in 23 states.
Multifamily projects accounted for all the increase. Construction is still struggling at way below the rate of a good year.
Housing starts rose more than expected in January, 14.6% over December, the biggest increase in 20 months.
But don't get out the champagne yet.
The number of starts for single-family homes, which make up 70% of the market, declined 1% over December, to an annual rate of 413,000 units, according to the Census Bureau.
You can see why builders remain pessimistic. The last two years have been the worst for the construction industry since the Census Bureau began collecting statistics on housing starts in 1959.
The reason for the increase in the January numbers was an 80% jump in construction of multifamily units to an annual rate of 171,000 units. Put the two categories together, and you get a 14.6% jump since December, for a seasonally adjusted rate of 596,000 new units.