Feb. 9, 2012
CNN Money
Mortgage deal could bring billions in relief
On Thursday, federal and state officials announced a $26 billion foreclosure settlement with five
of the largest home lenders. California is expected to receive approximately $12 billion in
principal write-downs, including through short sales, over the next three years, according to the
state attorney general's office.
Making sense of the story
The deal settles potential state charges about allegations of improper foreclosures
based on robo-signing, seizures made without proper paperwork.
The settlement sets up a federal monitor to oversee the process and try to prevent the
challenges that tripped up many homeowners seeking help in earlier programs designed
to address the housing crisis.
Most of the relief will go to those who are underwater on their homes. That relief will
come over the course of the next three years, with banks having incentives to provide
most of the relief in the next 12 months.
At least $17 billion will go to reducing the principal owed by homeowners who are
underwater and behind on their mortgages.
Up to 750,000 other underwater homeowners who are current on their mortgages will be
able to refinance their current loans at lower rates. They will not receive a reduction in
principal, but with mortgage rates near record lows, they could receive substantial
savings on their monthly payments.
Approximately $1.5 billion will go to homeowners who had their homes foreclosed upon
between Jan. 1, 2008 and Dec. 31, 2011, and who meet other criteria. They will receive
up to $2,000 each.
The five mortgage servicers that are parties to the settlement include Bank of America,
JPMorgan Chase, Citigroup, Wells Fargo, and Ally Financial (formerly GMAC).
Read the full story
http://cnnmon.ie/AsERqO
Feb. 9, 2012
In other news …
The Los Angeles Times
Recovery roadblock? Mortgage burdens keep job seekers from moving
A report by Challenger, Gray & Christmas Inc. shows that struggling homeowners who aren't
relocating for new jobs may stymie employers' long-range growth.
Read the full story:
http://lat.ms/wjqiEa
The Mercury News
Foreclosures at the high end increase
The housing crisis has caught up with people whose wealth helped them hang onto their houses
longer.
Read the full story:
http://bit.ly/wFdUgx
The New York Times
Shrinking the escrow
When borrowers choose a fixed-rate loan for a home purchase or refinancing, only one part of
the monthly mortgage statement is ever likely to change: The escrow amount.
Read the full story:
http://nyti.ms/ym2es0
The Wall Street Journal
Fannie Mae: Outlook for home prices rises again
The consumer outlook for U.S. home prices improved again in January, extending a recent
upward trend in housing market sentiment, according to Fannie Mae.
Read the full story
http://on.wsj.com/zXddqD
Feb. 9, 2012
CNNMoney
Homes in foreclosure decline by 130,000
The number of homes in foreclosures shrunk by 130,000, or 8.4 percent, in 2011, according to a
report by CoreLogic.
Read the full story
http://cnnmon.ie/zolZlx
The Los Angeles Times
Lawmakers push Fannie, Freddie to write-down mortgage principal
On Monday, lawmakers pressed the regulator of Fannie Mae and Freddie Mac to write-down
the principal on mortgages of underwater homes.
Read the full story
http://lat.ms/xDX2vh
The San Francisco Chronicle
Short sales mean bonuses for some homeowners
In a new development, banks are now selectively offering substantial sums of money – up to
$35,000 – to some homeowners to encourage short sales.
Read the full story
http://bit.ly/yrKz4N
The Wall Street Journal
Forecast: Drop in home values less severe in 2012
Zillow's home-value forecast released on Thursday predicts a 3.7 percent decline this year, an
improvement when measured against the 4.7 percent decline in 2011.
Read the full story
http://on.wsj.com/A5nRtG
Feb. 9, 2012
What you should know
With proper planning, first-time home buyers can avoid common mistakes that might
jeopardize a deal.
Many people decide to buy a house when they feel they are ready to take on a
mortgage. However, just because the buyer can afford mortgage payments does not
mean they can afford a home. There is much more to owning a house than just the
mortgage payment.
Property insurance, taxes, homeowners association dues, maintenance, and higher
electric and water bills are some of the costs first-time buyers tend to overlook.
Darlene Alonzo
