FDIC Makes Good On Promise To Stop Foreclosures [Housing Tracker]

Quotes Of The Day

"When we find people who want to stay in their homes, we are going to try to work with them to see if we can modify their loan." – Sheila Bair, Federal Deposit Insurance Corp. Chairman, saying the FDIC will move to aggressively halt foreclosures on IndyMac home loans. (Wall St. Journal, July 15^th)
 

“We continue to rely on lenders to fix the problems they created by making reckless loans in the first place, but it’s clear that foreclosures keep rising. We need federal regulators to step in or court-supervised loan modifications — any solution that might standardize the process better.” - Deborah Goldstein, EVP of the Center for Responsible Lending, a nonprofit group that assists borrowers.  (NY Times, July 13^th)

Foreclosure Assisstance Efforts

IndyMac Reopens, Halts Foreclosures on Its Loans. “IndyMac Bancorp Inc., the failed thrift, reopened its doors under federal control Monday and [announced it was] halting all foreclosures on the mortgages it owns. FDIC Chairman Sheila Bair, who has been one of the most outspoken officials calling for banks to ease up on struggling homeowners, said that the agency is "really focused" on keeping borrowers in their homes for both their sakes and to maximize IndyMac's value for taxpayers… the FDIC has much more flexibility to intervene with the roughly $15 billion of loans that were owned by IndyMac. But IndyMac also was handling another roughly $185 billion in mortgages in its servicing business.”  (Wall St. Journal, July 15^th)

National View: When Mortgages Go Bad. “Congress is nearing passage of a bill (HR 3221) that would make it easier for borrowers at risk of foreclosure to obtain smaller, more affordable loans. But the effect would be limited — the Congressional Budget Office estimates that the bill would help less than 20 percent of the 2.2 million borrowers expected to face foreclosure in the next three years, and the upfront cost to banks may deter many from participating. And now may be the wrong time to tap financially strapped Fannie Mae and Freddie Mac to pay for the new loans.”  (LA Times Editorial via South Coast Today, July 15^th)

Nonprofit Lender Offers Foreclosure Help. “A Boston-based nonprofit lender with $10 billion available from Bank of America for foreclosure help and new loans has quietly opened its doors in Denver. The Neighborhood Assistance Corp. of America, better known as NACA, provides no-cost, fixed-rate loans one percentage point below market, or about 5.5%. And borrowers can get the below-market loans even with terrible credit. "NACA does character-based lending, not credit-based lending," said Steven Wright, a broker with NetWorth Investment Properties, who volunteers for NACA in Denver. The company, founded about 20 years ago, has offices in about 40 cities.” (Rocky Mountain News, July 14^th)

Reworked Subprime Loans Default at `High' Rate, Moody's Says. “Moody’s Investors Service: More than two of every five subprime borrowers whose mortgages were reworked in H1’07 are defaulting anyway. Among subprime adjustable-rate mortgages modified in H1’07, 42% were at least 90 days late on March 31. Modifying loans granted to consumers with poor credit records has gained favor as record numbers fail to keep up with payments and home prices tumble. Loans reworked more recently may perform better than ones modified in early 2007 because lenders are increasingly lowering interest rates and offering changes to consumers with fewer missed payments, Moody's said. That's different from 2007, when lenders focused on enforcing repayment plans.”  (Bloomberg, July 14^th)

S.C. Lax On Combating Rising Rate Of Foreclosures.  “South Carolinians in danger of losing their homes are getting little help from the state government in combating one of the nation's fastest-growing foreclosure rates… The Senate voted 63-5 to pass a housing relief bill authorizing the Federal Housing Authority to back $300 billion in affordable mortgages… U.S. Sen. Jim DeMint, a Greenville Republican, had blocked the legislation because he believes it rewards the writing of risky mortgages… DeMint didn't vote on the measure, aides said, because he attended a family wedding. Republican Sens. Lindsey Graham of South Carolina, and Richard Burr and Elizabeth Dole of North Carolina voted for it.”  (Herald Online, July 13^th)

Foreclosures Mount As Area Home Prices Drop. “As foreclosure cases continue to mount unabated, Maryland nonprofit groups, elected officials and the courts are joining forces to urge attorneys to help residents in danger of losing their homes. Robert M. Bell, chief judge of Maryland's Court of Appeals, sent letters last week to every licensed attorney in Maryland - more than 33,000 in all - asking them to volunteer their time or donate money to help.”  (Baltimore Sun, July 13^th)

The Silence of the Lenders. “As record numbers of homeowners try to avoid foreclosure, the responses of big lenders and loan servicers like Countrywide are drawing increased scrutiny. While these companies maintain that they’re doing all they can to help imperiled borrowers, critics contend that homeowners routinely meet roadblocks. Many borrowers have trouble even reaching a workout specialist; others soon find that the modifications they received are as unaffordable as the mortgages they replaced. Some homeowners, eager to sell their homes before the value falls further, say they are impeded by loan servicers’ inaction or incompetence.”  (NY Times, July 13^th)

Group May Sue To Halt Foreclosure Sales. “ACORN, a national housing activist group is threatening legal action to force Lake County’s sheriff to halt the sale of foreclosed properties. The Lake County Council recently endorsed the group’s proposal for a temporary moratorium on home foreclosures... Lake County Sheriff Roy Dominguez… contends he’s legally obligated to carry out the foreclosures ordered by judges and to administer regular sales of foreclosed property. Eric Weathersby, of the Northwest Indiana chapter of the Association of Community Organizations for Reform Now said Dominguez is unwilling to interrupt the revenue stream his office collects by enforcing foreclosure notices. The sheriff’s department collects $200 from mortgage lenders for each foreclosure it processes and now has $930,000 in its foreclosure fund.”  (IndyStar, July 13^th)

 

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Comments

[Gerald/Hopkins:]

FDR put in a moratorium on all foreclossures. Lyndon Larouche has proposed that that is THE ONLY WAY TO GO TODAY!!! LaRouche is right and all the handwaving and avoiding reality will not change that. Implement LaRouche's Homeowners and Bank Protection Act Now!!!

2008 Jul 15 09:15 PM