For the second month in a row, foreclosure activity was impacted by voluntary foreclosure suspensions, after certain practices commonly used during the foreclosure process were called into question. While initially limited to judicial foreclosure states, the so-called robo-signing controversy began impacting foreclosures in non-judicial states, including those in our coverage area in early October.
Foreclosure starts were down across the board in November, ranging from a 9.3 percent month-over-month decline in California to a staggering 31.7 percent decline in Washington. Despite the fact that robo-signing was not directly tied to foreclosure filings in non-judicial foreclosure states, foreclosure starts in our coverage area have dropped 25.5 percent since the controversy began.
Foreclosure sales continued to be impacted by robo-signing related foreclosure suspensions more directly, as Ally (GMAC), Bank of America and PNC all halted foreclosure sales nationwide, contributing to a 38.7 percent drop in foreclosure sales over the last two months within our coverage are. In November, foreclosure sales dropped the most dramatically in Washington, after having seen little impact in October; while California had the least dramatic decline with a drop of 9.0 percent. After having had the largest impact on foreclosure sales, Bank of America slowly began foreclosing again the week of December 6th. Their return will likely lead back to normal foreclosure levels in the months to come.
"Since September 2008 the foreclosure process has seen significant bottlenecks, first due to government intervention and now lender ineptitude," says Sean O'Toole, CEO and Founder of ForeclosureRadar.com. "Unfortunately the resulting delays will only serve to extend the time it takes to recover and return to a normal housing market."
Arizona
Continuing downward, Notice of Trustee Sale filings dropped 24.4 percent from October to November, reaching their lowest level since March 2008. The holidays, and issues around the robo-signing controversy, likely contributed to the significant drop. Foreclosure sales were down 14.8 percent from October to November, following a 26.9 percent decline the prior month resulting in the lowest number of sales since September 2009.
View all Arizona stats by state, county, city or ZIP
California
Foreclosure activity slowed across the board in California. Notice of Default filings dipped 9.3 percent month over month, while Notice of Trustee filings declined a mere 1.0 percent from October. Cancellations of foreclosure sales dropped 8.5 percent in November, down 54 percent from their peak in June, likely due in part to the failure of the Administration's Home Affordable Modification Program (HAMP) to help California homeowners. Foreclosure sales are down by 9.0 percent from October, though sales to 3rd parties increased by 7.8 percent.
View all California stats by state, county, city or ZIP
Nevada
Foreclosure activity in Nevada dropped dramatically over the past two months. Foreclosure sales are down 22.1 percent from October to November, and 50.5 percent from September. Notice of default filings are also down for the second month in a row, dropping 12.7 percent from October, and 24.3 percent from September. Clearly, Nevada foreclosure activity was impacted not only by the holidays, but also by the robo-signing controversy.
View all Nevada stats by state, county, city or ZIP
Oregon
Oregon's Notice of Default filings and Notice of Trustee Sale filings dropped for the third consecutive month, reaching their lowest point since Q4 2008. Notice of Default filings declined 25.0 percent from October to November, and Notice of Trustee Sale filings dropped 21.2 percent. Foreclosure sales declined 26.7 percent in November, and have dropped 54.3 percent since September. After a four month decline, cancellations of foreclosure sales increased 34.8 percent from October.
View all Oregon stats by state, county, city or ZIP
Washington
While Washington showed little impact from the robo-signing controversy in October, foreclosure activity dropped substantially in November. Notice of Trustee Sale filings dropped 31.7 percent from October, but are still up 16.2 percent from a year earlier. Similarly, foreclosure sales dropped 38.1 percent from October but are up 29.3 percent from November 2009.
View all Washington stats by state, county, city or ZIP
State Notice of Default Notice of Sale Back to Bank Sold to 3rd Party
Arizona
n/a -24.3% -17.5% -1.2%
California
-9.3% -1.0% -12.5% +7.8%
Nevada
-12.7% +3.4% -25.2% -4.7%
Oregon
-25.0% -21.2% -26.9% -23.5%
Washington
n/a -31.7% -38.7% -33.2%
Wednesday, December 15, 2010
Thursday, October 21, 2010
Is it too soon for mortgage servicers to resume foreclosure procedures?
On Monday, Bank of America spokesman said that the bank plans to resume foreclosures next week in more than 100,000 homes in the 23 states that require judge’s approval. Amid the multiple attempts from opponets to the bank’s involvement in the latest mortgage fiasco, some wonder if it is too soon for loan servicers to resume foreclosure procedures.
Although enphasys has been made on the fact that halting foreclosure will in turn slow down any progress the real estate market might be having, many still believe that a halt on all foreclosures Is the way to go.
Just last week, attorneys general in all 50 states joined together to conduct an investigation to determine whether lenders broke the law by processing uncessesary foreclosures. Furthermore, multiple law suits are surfacing around the country as homeowners realize the opportunity in the situation. Homeonwers now have a chance to dispute their foreclosure notes on the basis that the documents bakcing up the foreclosure might indeed contain errors from the lender’s part.
In adition, a federal law enforcement official says the FBI is now joing the fight against lenders that could have broken criminal laws in the mortgage foreclosure crisis. “The FBI is at the start of a lengthy sorting-out process in which agents will look into what caused the financial institutions to mishandle the flood of paperwork in the historic avalanche of foreclosures,” the law enforcement official says.
The main issue to be identified is the intent behind this so called “errors” in foreclosure douments. The idea is to figure out whether the lenders actually conducted this operations with criminal intent or if indeed the lenders just made mistakes as a result of the overwhelming overflow of foreclosures and the pressure to speed up operations which in turn would help stabilize the market even faster.
Not only is the federal government getting involved, but also the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, has demanded reviews at top banks, including Bank of America, J.P. Morgan Chase & Co. and Citigroup Inc. SEC Chairman Mary Schapiro said Tuesday her agency is looking into "issues with respect to disclosure, misrepresentations or omissions."
Furthermore, another challenge for lenders are judges around the country who are handling these foreclsoure cases. Judges have the authority to discipline bank officials If there is a violation of procedural rules. In adittion, they could also force thousands of foreclosure cases that usually just go through quick rulings, to go instead to full trials.
“Judges won't take well to banks that filed erroneous documents with their courts,” said Indiana Attorney General Greg Zoeller.
"There could be some serious consequences," including criminal charges, Zoeller said.
Although enphasys has been made on the fact that halting foreclosure will in turn slow down any progress the real estate market might be having, many still believe that a halt on all foreclosures Is the way to go.
Just last week, attorneys general in all 50 states joined together to conduct an investigation to determine whether lenders broke the law by processing uncessesary foreclosures. Furthermore, multiple law suits are surfacing around the country as homeowners realize the opportunity in the situation. Homeonwers now have a chance to dispute their foreclosure notes on the basis that the documents bakcing up the foreclosure might indeed contain errors from the lender’s part.
In adition, a federal law enforcement official says the FBI is now joing the fight against lenders that could have broken criminal laws in the mortgage foreclosure crisis. “The FBI is at the start of a lengthy sorting-out process in which agents will look into what caused the financial institutions to mishandle the flood of paperwork in the historic avalanche of foreclosures,” the law enforcement official says.
The main issue to be identified is the intent behind this so called “errors” in foreclosure douments. The idea is to figure out whether the lenders actually conducted this operations with criminal intent or if indeed the lenders just made mistakes as a result of the overwhelming overflow of foreclosures and the pressure to speed up operations which in turn would help stabilize the market even faster.
Not only is the federal government getting involved, but also the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, has demanded reviews at top banks, including Bank of America, J.P. Morgan Chase & Co. and Citigroup Inc. SEC Chairman Mary Schapiro said Tuesday her agency is looking into "issues with respect to disclosure, misrepresentations or omissions."
Furthermore, another challenge for lenders are judges around the country who are handling these foreclsoure cases. Judges have the authority to discipline bank officials If there is a violation of procedural rules. In adittion, they could also force thousands of foreclosure cases that usually just go through quick rulings, to go instead to full trials.
“Judges won't take well to banks that filed erroneous documents with their courts,” said Indiana Attorney General Greg Zoeller.
"There could be some serious consequences," including criminal charges, Zoeller said.
Friday, October 8, 2010
B of A halts foreclosures sales in all 50 states
BofA halts foreclosure sales in all 50 states
PNC becomes 4th lender to review procedures in 23 judicial foreclosure states Friday, October 8, 2010.
Bank of America said it's extended its review of foreclosure documents to all 50 states, and will stop all foreclosure sales until the review is completed.
The ongoing assessment, previously confined to 23 states where courts have jurisdiction over foreclosures, "shows the basis for foreclosure decisions is accurate," Bank of America said in a statement.
According to its most recent quarterly report to investors, Bank of America sold $453million in foreclosed properties during the second quarter, leaving it with an inventory of properties valued at $1.74 billion.
Bank of America had previously identified the 23 states where it was delaying foreclosures as Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont and Wisconsin.
Meanwhile, PNC Financial Services Group Inc. says it's halting most foreclosures and evictions in 23 states for 30 days, bringing to four the number of lenders who have publicly acknowledged potential problems in their handling of foreclosure paperwork. PNC said it took the step so it can confirm its foreclosure procedures are in compliance with state laws.
In what's become known as the robo signing scandal, GMAC Mortgage and JP Morgan Chase are also reviewing foreclosure proceedings in judicial foreclosure states, following allegations that workers processing files for the companies signed affidavits that contained information they had not personally verified.
Although attorneys for homeowners have mostly succeeded in delaying, rather than stopping, foreclosures when challenging lenders on such procedural grounds in the past, the robo signing scandal threatens to put the brakes on hundreds of thousands of foreclosures nationwide.
State attorneys general, federal regulators and lawmakers are putting lenders on notice that they should discontinue foreclosures unless they are sure their procedures are in full compliance with the law.
The resulting slowdown in foreclosure actions could slow the flow of properties into bank's REO (real estate owned) inventories. Lenders have also begun holding back properties they have already foreclosed on from the market, because of fears that their former owners could file lawsuits questioning the legality of the court proceedings in which they lost their homes.
The American Land Title Association, a trade group representing title insurers, has said homeowners who have purchased foreclosed properties have "numerous defenses" against any claims by former owners.
It's unlikely that a court will take property from an innocent current homeowner and return it to a previous homeowner who failed to make payments on the loan subject to the foreclosure, the group said.
But some lenders and at least one title insurer appear to be seeking more certainty before moving forward with the sale of foreclosed properties.
Old Republic National Title Insurance Co. has reportedly stopped insuring title for properties foreclosed on by JP Morgan Chase and GMAC Mortgage (the company refuses to confirm or deny reports based on internal company memos, citing a "policy of not speaking to the press").
Real estate brokers in Florida, a judicial foreclosure state, told Inman News this week that loan servicers had already begun pulling many foreclosed "REO" (real-estate owned) properties off the market.
Actions by federal regulators and state attorneys general could lead more loan servicers to follow Bank of America's lead in halting sales of foreclosed properties in non-judicial foreclosure states.
In a letter to subscribers today, Foreclosure Listing Services Inc. President George Roddy Sr. shared his views on how the robo signing scandal could affect Texas, a non-judicial foreclosure state. The Addison-based company tracks about 9,000 foreclosure auction postings a month.
Roddy said that until recently, he hadn't expected actions taken by lenders in judicial foreclosure states to impact foreclosures in Texas. But that was before Texas Attorney General Greg Abbot sent letters to 30 loan servicers Tuesday, calling on them to halt foreclosures and sales of foreclosed properties until they have completed a review of their foreclosure processes.
Abbot gave loan servicers until Oct. 15 to demonstrate they are complying with state law, and identify any employees or agents who signed affidavits and other foreclosure documents without personal knowledge of what they were signing. Loan servicers were also instructed to identify any foreclosures in which such documents were used.
The next round of Texas foreclosure auctions is set to take place on Nov. 2, Roddy said, and there's no indication that loan servicers who are able comply with the attorney general's demands will be barred from putting homes up for auction.
Roddy said postings for the upcoming Nov. 2 auction remain at about the same level as at this time last month, with no signs of weakening.
"Based on many conversations with economists, politicians, lenders, etc. over the past few days, I believe that foreclosure postings will continue at the current pace or very near that level during the coming days in Texas," Roddy said. "So, for those of us involved on the 'posting' side of the equation, it should be business as usual or very near it."
Roddy compared fallout from the robo signing scandal to foreclosure moratoriums enacted during the housing downturn.
"Looking back, those moratoriums had very little effect on the volume of foreclosure postings filed during that time," he said. "What we did see were monthly posting levels that remained where they were prior to the start of the moratorium, or very close to that level, followed by a huge spike in postings that led to the current high level of this foreclosure cycle."
In California, another non-judicial foreclosure state, Attorney General Jerry Brown today called on loan servicers to halt foreclosures until they demonstrate they are complying with state law.
Attorneys general in other states including Florida, Massachusetts, Delaware, Connecticut, Ohio, Colorado, Illinois, Iowa and North Carolina are also examining lenders' foreclosure procedures. Ohio Attorney General Richard Cordray has filed suit against GMAC Mortgage (GMAC Mortgage says it expects to prevail).
Although Democrats have been the most critical of lenders' foreclosure procedures, the issue cuts across party lines.
Sen. Richard Shelby of Alabama, the ranking Republican on the Senate Banking Committee, has called on federal banking regulators to review the mortgage servicing and foreclosures activities of JP Morgan Chase, Bank of America, and GMAC Mortgage parent company Ally Financial.
Shelby said the Senate Banking Committee should also launch its own investigation, saying he was "highly troubled that once again our federal regulators appear to be asleep at the switch."
The Center for Responsible Lending and civil rights groups including the NAACP and National Council of La Raza on Thursday renewed their call for a national moratorium on foreclosures, citing doubts about procedures followed by lenders filing foreclosure proceedings.
Exercising a "pocket veto" for only the second time in office, President Obama Thursday rejected a bill, HR 3808, that critics said would help banks push homes through the foreclosure process by making courts recognize notarizations made in other states.
PNC becomes 4th lender to review procedures in 23 judicial foreclosure states Friday, October 8, 2010.
Bank of America said it's extended its review of foreclosure documents to all 50 states, and will stop all foreclosure sales until the review is completed.
The ongoing assessment, previously confined to 23 states where courts have jurisdiction over foreclosures, "shows the basis for foreclosure decisions is accurate," Bank of America said in a statement.
According to its most recent quarterly report to investors, Bank of America sold $453million in foreclosed properties during the second quarter, leaving it with an inventory of properties valued at $1.74 billion.
Bank of America had previously identified the 23 states where it was delaying foreclosures as Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont and Wisconsin.
Meanwhile, PNC Financial Services Group Inc. says it's halting most foreclosures and evictions in 23 states for 30 days, bringing to four the number of lenders who have publicly acknowledged potential problems in their handling of foreclosure paperwork. PNC said it took the step so it can confirm its foreclosure procedures are in compliance with state laws.
In what's become known as the robo signing scandal, GMAC Mortgage and JP Morgan Chase are also reviewing foreclosure proceedings in judicial foreclosure states, following allegations that workers processing files for the companies signed affidavits that contained information they had not personally verified.
Although attorneys for homeowners have mostly succeeded in delaying, rather than stopping, foreclosures when challenging lenders on such procedural grounds in the past, the robo signing scandal threatens to put the brakes on hundreds of thousands of foreclosures nationwide.
State attorneys general, federal regulators and lawmakers are putting lenders on notice that they should discontinue foreclosures unless they are sure their procedures are in full compliance with the law.
The resulting slowdown in foreclosure actions could slow the flow of properties into bank's REO (real estate owned) inventories. Lenders have also begun holding back properties they have already foreclosed on from the market, because of fears that their former owners could file lawsuits questioning the legality of the court proceedings in which they lost their homes.
The American Land Title Association, a trade group representing title insurers, has said homeowners who have purchased foreclosed properties have "numerous defenses" against any claims by former owners.
It's unlikely that a court will take property from an innocent current homeowner and return it to a previous homeowner who failed to make payments on the loan subject to the foreclosure, the group said.
But some lenders and at least one title insurer appear to be seeking more certainty before moving forward with the sale of foreclosed properties.
Old Republic National Title Insurance Co. has reportedly stopped insuring title for properties foreclosed on by JP Morgan Chase and GMAC Mortgage (the company refuses to confirm or deny reports based on internal company memos, citing a "policy of not speaking to the press").
Real estate brokers in Florida, a judicial foreclosure state, told Inman News this week that loan servicers had already begun pulling many foreclosed "REO" (real-estate owned) properties off the market.
Actions by federal regulators and state attorneys general could lead more loan servicers to follow Bank of America's lead in halting sales of foreclosed properties in non-judicial foreclosure states.
In a letter to subscribers today, Foreclosure Listing Services Inc. President George Roddy Sr. shared his views on how the robo signing scandal could affect Texas, a non-judicial foreclosure state. The Addison-based company tracks about 9,000 foreclosure auction postings a month.
Roddy said that until recently, he hadn't expected actions taken by lenders in judicial foreclosure states to impact foreclosures in Texas. But that was before Texas Attorney General Greg Abbot sent letters to 30 loan servicers Tuesday, calling on them to halt foreclosures and sales of foreclosed properties until they have completed a review of their foreclosure processes.
Abbot gave loan servicers until Oct. 15 to demonstrate they are complying with state law, and identify any employees or agents who signed affidavits and other foreclosure documents without personal knowledge of what they were signing. Loan servicers were also instructed to identify any foreclosures in which such documents were used.
The next round of Texas foreclosure auctions is set to take place on Nov. 2, Roddy said, and there's no indication that loan servicers who are able comply with the attorney general's demands will be barred from putting homes up for auction.
Roddy said postings for the upcoming Nov. 2 auction remain at about the same level as at this time last month, with no signs of weakening.
"Based on many conversations with economists, politicians, lenders, etc. over the past few days, I believe that foreclosure postings will continue at the current pace or very near that level during the coming days in Texas," Roddy said. "So, for those of us involved on the 'posting' side of the equation, it should be business as usual or very near it."
Roddy compared fallout from the robo signing scandal to foreclosure moratoriums enacted during the housing downturn.
"Looking back, those moratoriums had very little effect on the volume of foreclosure postings filed during that time," he said. "What we did see were monthly posting levels that remained where they were prior to the start of the moratorium, or very close to that level, followed by a huge spike in postings that led to the current high level of this foreclosure cycle."
In California, another non-judicial foreclosure state, Attorney General Jerry Brown today called on loan servicers to halt foreclosures until they demonstrate they are complying with state law.
Attorneys general in other states including Florida, Massachusetts, Delaware, Connecticut, Ohio, Colorado, Illinois, Iowa and North Carolina are also examining lenders' foreclosure procedures. Ohio Attorney General Richard Cordray has filed suit against GMAC Mortgage (GMAC Mortgage says it expects to prevail).
Although Democrats have been the most critical of lenders' foreclosure procedures, the issue cuts across party lines.
Sen. Richard Shelby of Alabama, the ranking Republican on the Senate Banking Committee, has called on federal banking regulators to review the mortgage servicing and foreclosures activities of JP Morgan Chase, Bank of America, and GMAC Mortgage parent company Ally Financial.
Shelby said the Senate Banking Committee should also launch its own investigation, saying he was "highly troubled that once again our federal regulators appear to be asleep at the switch."
The Center for Responsible Lending and civil rights groups including the NAACP and National Council of La Raza on Thursday renewed their call for a national moratorium on foreclosures, citing doubts about procedures followed by lenders filing foreclosure proceedings.
Exercising a "pocket veto" for only the second time in office, President Obama Thursday rejected a bill, HR 3808, that critics said would help banks push homes through the foreclosure process by making courts recognize notarizations made in other states.
Friday, September 24, 2010
What to consider before you buy a foreclosed home
In today’s market, many home buyers are attracted by the increasing number of foreclosed homes that are constantly becoming available in the market. Although foreclosed homes often present a great opportunity for buyers, foreclosed homes are not always the best option. There are many things that buyers need to consider before they decide to make an offer on a foreclosed home.
There is enough available information out there for buyers to be informed on all the negative aspects that could be involved in a foreclosure deal, but sometimes they buyers need to be reminded that this information is out there. Home buyers need to be well informed in order to take advantage of the positive aspects that some foreclosure deals do offer.
Among the issues that buyers need to deal with is title work. Buyers of a foreclosure home should get a title check even if the foreclosure buying process doesn’t account for one. Buyers need to be away that additional liens such as second mortgages and tax liens may still be attached to the property and passed on to the new buyer.
Furthermore, inspections are a great way of finding out the accurate condition of foreclosed homes. Some foreclosure properties are open to inspections, but others are not. Buyers need to be aware that many foreclose properties are not in the best condition, and most of them are sold “as is.” Since foreclosed homes often remained abandoned for long periods of times before they get sold, some may be victims of pest infestation, mold growth, and vandalism. Therefore, it is highly recommended that you always get an inspection done on any property you plan to purchase.
Another thing to consider is that a property disclosure statement is not always required, it all depends upon the state the foreclosure property is in; this in another reason why an inspection is even more necessary. It is recommended that buyers check everything from plumbing, electric wiring, foundation, etc.
These are just a few of the issues that buyers of foreclosed homes have to deal with. There are others to consider, and buyers need to do their homework in researching as much as possible before they make an offer on a foreclosed home. They must realize that foreclosed homes are not always great deals, and often times, they come accompanied by a set of problems.
There is enough available information out there for buyers to be informed on all the negative aspects that could be involved in a foreclosure deal, but sometimes they buyers need to be reminded that this information is out there. Home buyers need to be well informed in order to take advantage of the positive aspects that some foreclosure deals do offer.
Among the issues that buyers need to deal with is title work. Buyers of a foreclosure home should get a title check even if the foreclosure buying process doesn’t account for one. Buyers need to be away that additional liens such as second mortgages and tax liens may still be attached to the property and passed on to the new buyer.
Furthermore, inspections are a great way of finding out the accurate condition of foreclosed homes. Some foreclosure properties are open to inspections, but others are not. Buyers need to be aware that many foreclose properties are not in the best condition, and most of them are sold “as is.” Since foreclosed homes often remained abandoned for long periods of times before they get sold, some may be victims of pest infestation, mold growth, and vandalism. Therefore, it is highly recommended that you always get an inspection done on any property you plan to purchase.
Another thing to consider is that a property disclosure statement is not always required, it all depends upon the state the foreclosure property is in; this in another reason why an inspection is even more necessary. It is recommended that buyers check everything from plumbing, electric wiring, foundation, etc.
These are just a few of the issues that buyers of foreclosed homes have to deal with. There are others to consider, and buyers need to do their homework in researching as much as possible before they make an offer on a foreclosed home. They must realize that foreclosed homes are not always great deals, and often times, they come accompanied by a set of problems.
Major players in the mortgage market continue making changes to their loan programs
Major players in the mortgage market have been making changes to their programs in an attempt to help alleviate the risk in their portfolios and improve their financial condition. One very well known player is the Federal Housing Administration (FHA). The FHA has modified its processes in order to provide loans to as many people as possible by designing an aggressive risk reduction program.
Among the changes that the FHA has implemented is the raise for the upfront premium for its insurance from 1.75 percent of the loan amount to 2.25 percent, in April. This change in premium increases the amount of cash the borrower must bring to the table. In addition, the ceiling on annual FHA premiums was raised from 0.5 percent of the outstanding balance to 1.55 percent in August.
“ While FHA has said premiums will not hit the new ceiling, it does expect to shift some of the upfront premium increase into that fee, spreading it out in more manageable chunks,” explains reporter Jann Swanson from The Washington examiner.
“Current low interest rates are cushioning the effect of the increase in premiums,” said Christopher Gardner, president of FHA Pros, which advises condo associations seeking FHA approval. “This is especially true since the increase can be financed.”
“Even if monthly fees increase,” he said, “FHA has so many advantages and will still be a smidgen less expensive than a traditional loan.” That FHA loans can be assumed by a new owner; is like gold when it is time to sell, he added.
Furthermore, the FHA has also raised the minimum FICO score for its 3.5 percent down payment program to 580, and the minimum for all FHA-insured mortgages to 500. In addition, there has been a reduction in the allowed seller concessions. While previously a buyer was able to negotiate concessions up to 6 percent of the price of the home, concessions are now limited to 3 percent.
The concession change is also unlikely to have much effect, said Michael “Mick” Poe, an agent with Re/Max Allegiance Real Estate in Burke. “Just because you can do something,” he said, “doesn’t mean you will. In the real world, we rarely saw concessions as large as 6 percent. The number of buyers this will affect will be negligible, he added.
Among the changes that the FHA has implemented is the raise for the upfront premium for its insurance from 1.75 percent of the loan amount to 2.25 percent, in April. This change in premium increases the amount of cash the borrower must bring to the table. In addition, the ceiling on annual FHA premiums was raised from 0.5 percent of the outstanding balance to 1.55 percent in August.
“ While FHA has said premiums will not hit the new ceiling, it does expect to shift some of the upfront premium increase into that fee, spreading it out in more manageable chunks,” explains reporter Jann Swanson from The Washington examiner.
“Current low interest rates are cushioning the effect of the increase in premiums,” said Christopher Gardner, president of FHA Pros, which advises condo associations seeking FHA approval. “This is especially true since the increase can be financed.”
“Even if monthly fees increase,” he said, “FHA has so many advantages and will still be a smidgen less expensive than a traditional loan.” That FHA loans can be assumed by a new owner; is like gold when it is time to sell, he added.
Furthermore, the FHA has also raised the minimum FICO score for its 3.5 percent down payment program to 580, and the minimum for all FHA-insured mortgages to 500. In addition, there has been a reduction in the allowed seller concessions. While previously a buyer was able to negotiate concessions up to 6 percent of the price of the home, concessions are now limited to 3 percent.
The concession change is also unlikely to have much effect, said Michael “Mick” Poe, an agent with Re/Max Allegiance Real Estate in Burke. “Just because you can do something,” he said, “doesn’t mean you will. In the real world, we rarely saw concessions as large as 6 percent. The number of buyers this will affect will be negligible, he added.
Can you fix your credit score?
Given the current economic situation, many homeowners have been affected by a decline in their credit score. Low credit scores prevent many homeowners from qualifying for new or refinanced mortgages under the strict underwriting standards presented by lenders and investors such as Fannie Mae and Freddie Mac.
The decline in credit scores presents a great concern for homeowners, and many are looking for ways and opportunities to fix their credit score. Unfortunately, on the other side of the problem, we find companies that are taking advantage of the desperate homeowners. Many of these companies have managed to find ways to involve homeowners in scams that promise to fix their credit score, but in the end do nothing for them.
Most of these scamers promise the homeowner to erase delinquencies, judgments, foreclosures and other problems from files at the three national credit bureaus: Equifax, Experian and TransUnion.
We can find an example for these dealings in Florida. The Federal Trade Commission recently presented a complaint against Clean Credit Report Services Inc. of North Miami. This firm promised its clients it could increase their credit scores dramatically and quickly — even if the derogatory information in their files was accurate and current.
Furthermore, in national radio ads, Internet and TV commercials, Clean Credit said it could make records of "late payments, collection accounts, charge-offs, repossessions and bankruptcies" disappear from credit files, according to the FTC's complaint.
Using testimonials of so called “clients” the firm managed to convince the struggling homeowners to fall into their trap. The firm allegedly claimed that the target for clients was a 650 to 700 FICO score at the end of the file-scrubbing process.
The FTC reported that those who fell into the trap, had to pay up-front fees averaging $400; however, after the payment the company did "little, if anything, to fulfill the promises made" about increasing credit scores and purging negative files. Many of the customers who had to deal with this unfortunate situation, filed complaints with state and local authorities, and the FTC — which oversees the Credit Repair Organizations Act — then took on the case.
Moreover, in the FTC settlement, Clean Credit and its officers agreed to forfeit substantial assets to help repay Clean Credit clients. The agreement also requires that the firm and its principals pay $14.4 million for restitution in case the financial statements they submitted for settlement purposes prove to be inaccurate.
The decline in credit scores presents a great concern for homeowners, and many are looking for ways and opportunities to fix their credit score. Unfortunately, on the other side of the problem, we find companies that are taking advantage of the desperate homeowners. Many of these companies have managed to find ways to involve homeowners in scams that promise to fix their credit score, but in the end do nothing for them.
Most of these scamers promise the homeowner to erase delinquencies, judgments, foreclosures and other problems from files at the three national credit bureaus: Equifax, Experian and TransUnion.
We can find an example for these dealings in Florida. The Federal Trade Commission recently presented a complaint against Clean Credit Report Services Inc. of North Miami. This firm promised its clients it could increase their credit scores dramatically and quickly — even if the derogatory information in their files was accurate and current.
Furthermore, in national radio ads, Internet and TV commercials, Clean Credit said it could make records of "late payments, collection accounts, charge-offs, repossessions and bankruptcies" disappear from credit files, according to the FTC's complaint.
Using testimonials of so called “clients” the firm managed to convince the struggling homeowners to fall into their trap. The firm allegedly claimed that the target for clients was a 650 to 700 FICO score at the end of the file-scrubbing process.
The FTC reported that those who fell into the trap, had to pay up-front fees averaging $400; however, after the payment the company did "little, if anything, to fulfill the promises made" about increasing credit scores and purging negative files. Many of the customers who had to deal with this unfortunate situation, filed complaints with state and local authorities, and the FTC — which oversees the Credit Repair Organizations Act — then took on the case.
Moreover, in the FTC settlement, Clean Credit and its officers agreed to forfeit substantial assets to help repay Clean Credit clients. The agreement also requires that the firm and its principals pay $14.4 million for restitution in case the financial statements they submitted for settlement purposes prove to be inaccurate.
Popular tax credit for first time homebuyers might be coming back
The Obama administration has not yet decided whether it should bring back a popular tax credit for first-time homebuyers, Housing and Urban Development Secretary Shaun Donovan said on Sunday.
"It's too early to say whether the tax credit will be revived," Donovan said in an interview on CNN's "State of the Union" program. He said the administration would "do everything we can" to stabilize the shaky U.S. housing market.
The analysis is based on the previous federal $8,000 homebuyer tax credit that boosted home sales reviving parts of the housing market. This credit expired several months ago, and things started going down.
The unexpectedly large drop in U.S. home sales in July has brought back fears that the nation could be on the cusp of another sharp drop in housing.
Donovan acknowledged that the data was worse than the Obama administration expected but said the government was already taking measures, including rolling out a refinancing program for some borrowers and an emergency loan program for the unemployed.
Some believe that bringing back the tax credit would help improve the current housing situation. However, those that oppose this idea, say it would blow a bigger hole in the federal deficit.
"I think it would help enormously," Florida Governor Charlie Crist, who is running as an independent for the U.S. Senate in the November elections, told CNN. "I would absolutely encourage the president to support that." His opinion was supported by U.S. Representative Kendrick Meek, a Florida Democrat, who said he also supported reviving the tax credit.
Last month, Obama signed a law giving consumers already in the process of buying a home three extra months to close the deal and still get the tax credit.This means that homebuyers with contracts signed by April 30 who failed to go to closing by the original June 30 deadline will now have until September 30 to complete their purchases.
"It's too early to say whether the tax credit will be revived," Donovan said in an interview on CNN's "State of the Union" program. He said the administration would "do everything we can" to stabilize the shaky U.S. housing market.
The analysis is based on the previous federal $8,000 homebuyer tax credit that boosted home sales reviving parts of the housing market. This credit expired several months ago, and things started going down.
The unexpectedly large drop in U.S. home sales in July has brought back fears that the nation could be on the cusp of another sharp drop in housing.
Donovan acknowledged that the data was worse than the Obama administration expected but said the government was already taking measures, including rolling out a refinancing program for some borrowers and an emergency loan program for the unemployed.
Some believe that bringing back the tax credit would help improve the current housing situation. However, those that oppose this idea, say it would blow a bigger hole in the federal deficit.
"I think it would help enormously," Florida Governor Charlie Crist, who is running as an independent for the U.S. Senate in the November elections, told CNN. "I would absolutely encourage the president to support that." His opinion was supported by U.S. Representative Kendrick Meek, a Florida Democrat, who said he also supported reviving the tax credit.
Last month, Obama signed a law giving consumers already in the process of buying a home three extra months to close the deal and still get the tax credit.This means that homebuyers with contracts signed by April 30 who failed to go to closing by the original June 30 deadline will now have until September 30 to complete their purchases.
August reports show a decline in foreclosure Home auctions in California
Housing data reports for the month of August showed an improvement in the market of California postings. The number of households entering the foreclosure process in the state has declined for August. Nationwide data showed that foreclosure activities dropped by 30% for the month. However, this numbers are offset by the rise in bank repossessions all around the country.
The monthly report by realtyTrac shows that 338,836 properties were foreclosed in August, this indicates a 4% increase in foreclosure filings from the month before. This means that one in every 381 housing units received a foreclosure filing in August. That's up from one in 397 in July.
Analysts have said that foreclosure, including filings, and notices of default, might be down for the state of California because lenders are taking longer to start the foreclosure processes. The law usually requires that banks and lenders foreclose on a property within a given period of time once a default notice has been issued, but even lenders themselves are not willing to foreclose.
Additionally, analysts explain that another reason for this decline in foreclosures in California is that in some cases a homeowner decides to vacate the property immediately after receiving the notice of default. This action leaves the property open to vandalism and robberies, which makes it more costly for lenders to maintain the abandoned property. However, analysts stated that once a lender decides to go on with a foreclosure, repossession is almost immediate.
In major states like California, the housing market is on its way to recovery. The current situation allows lenders to resell repossessed and foreclosed properties at a faster rate. In addition, lenders sometimes are also able to cut down potential losses. Furthermore, even if lenders are taking their time to start foreclosure proceedings on some homes, this effectively lowers the number of foreclosures, which is the case for San Jose foreclosure home auctions for sale. However, once they start the foreclosure process, repossession only takes a very short time.
The monthly report by realtyTrac shows that 338,836 properties were foreclosed in August, this indicates a 4% increase in foreclosure filings from the month before. This means that one in every 381 housing units received a foreclosure filing in August. That's up from one in 397 in July.
Analysts have said that foreclosure, including filings, and notices of default, might be down for the state of California because lenders are taking longer to start the foreclosure processes. The law usually requires that banks and lenders foreclose on a property within a given period of time once a default notice has been issued, but even lenders themselves are not willing to foreclose.
Additionally, analysts explain that another reason for this decline in foreclosures in California is that in some cases a homeowner decides to vacate the property immediately after receiving the notice of default. This action leaves the property open to vandalism and robberies, which makes it more costly for lenders to maintain the abandoned property. However, analysts stated that once a lender decides to go on with a foreclosure, repossession is almost immediate.
In major states like California, the housing market is on its way to recovery. The current situation allows lenders to resell repossessed and foreclosed properties at a faster rate. In addition, lenders sometimes are also able to cut down potential losses. Furthermore, even if lenders are taking their time to start foreclosure proceedings on some homes, this effectively lowers the number of foreclosures, which is the case for San Jose foreclosure home auctions for sale. However, once they start the foreclosure process, repossession only takes a very short time.
Average prices for damaged REO increased 6.3 percent in August from previous month
Average prices for damaged REO increased 6.3 percent in August from previous month
The Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions surveys more than 3,000 real estate agents nationwide each month. According to the latest survey, home sales in August decreased, but home prices remained steady despite the slow demand and rapid growing inventory as foreclosure filings increased last month.
The reports indicates that prices for all three categories of distressed properties – damaged REO, move-in ready REO and short sale – increased last month, while prices for non-distressed properties remained unchanged. Average prices for damaged REO increased 6.3 percent from July to August, prices for move-in ready REO increased 2.5 percent, and prices for short sales went up 3.8 percent. However, for non-distressed properties, the average prices showed a slight 0.9 percent decline. While the homebuyer tax credit was in effect, distressed property sales fell, but they picked up after the credit expired this April 30.
First-time homebuyer traffic fell from 32.5 in July to 29.3 in August, according to The Campbell index; this highest number registered for this index was 63.5 as recently as April. Furthermore, current homeowner traffic fell from 41.0 in July to 37.3 in August; this index was registered at 55.2 in April.
Thomas Popik, research director for Campbell Surveys said: “We're in transition, Individual homeowners listing non-distressed properties and mortgage servicers listing distressed properties are holding out for prices established before the end of the tax credit. Meanwhile, only a few homebuyers are willing to transact at these prices – and these are the transactions going into the averages. That's why we saw such declines in traffic and volume in today's market," he noted.
At the same time, Individual real estate agents who responded to the survey commented about hold-out sellers. "We are seeing that sellers of non-distressed properties who have their houses/condos priced fairly are strongly resisting low-ball offers even to the point of not countering. Informed buyers are recognizing quality deals and moving forward, the uninformed are looking for the deals that are touted on Good Morning America or the Today show," reported a real estate agent in Florida. "Our market has been remarkably stable over the last six months, with the exception of sales falling under the tax credit allowance…prices continued to stay stable or even rose," added an agent in California.
Furthermore, other comments from real estate agents seem to indicate that buyer interest is falling. "It's like we hit a brick wall. The market has almost come to a standstill. First part of the year was great and we actually saw a slight increase in home values. Now listings are reducing their prices – if we can even get an offer, it's a low offer," commented an agent in Indiana. "The phone stopped ringing after April 31, 2010. No one shows up to open houses," complained another agent in California.
The Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions surveys more than 3,000 real estate agents nationwide each month. According to the latest survey, home sales in August decreased, but home prices remained steady despite the slow demand and rapid growing inventory as foreclosure filings increased last month.
The reports indicates that prices for all three categories of distressed properties – damaged REO, move-in ready REO and short sale – increased last month, while prices for non-distressed properties remained unchanged. Average prices for damaged REO increased 6.3 percent from July to August, prices for move-in ready REO increased 2.5 percent, and prices for short sales went up 3.8 percent. However, for non-distressed properties, the average prices showed a slight 0.9 percent decline. While the homebuyer tax credit was in effect, distressed property sales fell, but they picked up after the credit expired this April 30.
First-time homebuyer traffic fell from 32.5 in July to 29.3 in August, according to The Campbell index; this highest number registered for this index was 63.5 as recently as April. Furthermore, current homeowner traffic fell from 41.0 in July to 37.3 in August; this index was registered at 55.2 in April.
Thomas Popik, research director for Campbell Surveys said: “We're in transition, Individual homeowners listing non-distressed properties and mortgage servicers listing distressed properties are holding out for prices established before the end of the tax credit. Meanwhile, only a few homebuyers are willing to transact at these prices – and these are the transactions going into the averages. That's why we saw such declines in traffic and volume in today's market," he noted.
At the same time, Individual real estate agents who responded to the survey commented about hold-out sellers. "We are seeing that sellers of non-distressed properties who have their houses/condos priced fairly are strongly resisting low-ball offers even to the point of not countering. Informed buyers are recognizing quality deals and moving forward, the uninformed are looking for the deals that are touted on Good Morning America or the Today show," reported a real estate agent in Florida. "Our market has been remarkably stable over the last six months, with the exception of sales falling under the tax credit allowance…prices continued to stay stable or even rose," added an agent in California.
Furthermore, other comments from real estate agents seem to indicate that buyer interest is falling. "It's like we hit a brick wall. The market has almost come to a standstill. First part of the year was great and we actually saw a slight increase in home values. Now listings are reducing their prices – if we can even get an offer, it's a low offer," commented an agent in Indiana. "The phone stopped ringing after April 31, 2010. No one shows up to open houses," complained another agent in California.
Failure for Obama’s foreclosure-relief program
Miami, FL - According to reports coming out this week, the Obama foreclosure-relief program has failed in diminishing the mortgage crisis. As of August, 51 percent (approximately 680,000) of homeowners who applied to get their mortgage payments lowered have been disqualified, the Treasury Department said Wednesday. That indicated an increase from 48 percent in July.>>READ MORE
August reports show a decline in foreclosure Home auctions in California
Miami, FL -Housing data reports for the month of August showed an improvement in the market of California postings. The number of households entering the foreclosure process in the state has declined for August. Nationwide data showed that foreclosure activities dropped by 30% for the month. However, this numbers are offset by the rise in bank repossessions all around the country. >>READ MORE
100 million mortgage fraud case resolved
Miami, FL -U.S. District Attorney Cyrus Vance Jr. reported that a New York business man was sentenced along his three criminal associates after their role in a $100 million mortgage fraud case. In July 2008, an investigation by the Manhattan District Attorney’s Office revealed that AFG had engaged for four years into mortgage fraud. The scheme defrauded investors by selling distressed properties with inflated appraisals. The defendants kept the investors’ money and let properties fall into foreclosure, ruining victims’ credit ratings, reports said.>>READ MORE
Miami, FL - According to reports coming out this week, the Obama foreclosure-relief program has failed in diminishing the mortgage crisis. As of August, 51 percent (approximately 680,000) of homeowners who applied to get their mortgage payments lowered have been disqualified, the Treasury Department said Wednesday. That indicated an increase from 48 percent in July.>>READ MORE
August reports show a decline in foreclosure Home auctions in California
Miami, FL -Housing data reports for the month of August showed an improvement in the market of California postings. The number of households entering the foreclosure process in the state has declined for August. Nationwide data showed that foreclosure activities dropped by 30% for the month. However, this numbers are offset by the rise in bank repossessions all around the country. >>READ MORE
100 million mortgage fraud case resolved
Miami, FL -U.S. District Attorney Cyrus Vance Jr. reported that a New York business man was sentenced along his three criminal associates after their role in a $100 million mortgage fraud case. In July 2008, an investigation by the Manhattan District Attorney’s Office revealed that AFG had engaged for four years into mortgage fraud. The scheme defrauded investors by selling distressed properties with inflated appraisals. The defendants kept the investors’ money and let properties fall into foreclosure, ruining victims’ credit ratings, reports said.>>READ MORE
Wednesday, June 9, 2010
Rates will rise in future
“Recovery won’t feel terrific” –Ben Bernanke
Federal Reserve Chairman Ben Bernanke said this Monday he expects a continuing economic recovery that it won’t fall back into a “double dip” recession.
“My best guess is we’ll have a continued recovery (but) it won’t feel terrific” he said in an interview at a forum.
Fears of a double-dip recession have grown in the past weeks with the Europe’s debt crisis, “but there seems to be a good bit of momentum in consumer spending and investment, so my best guess is that we’ll have a continued recovery”.
He also warned that the unemployment rate will be high for a while, meaning that “a lot of people are going to be under financial stress, and this is one of the reasons why it won’t be terrific. “
Bernanke was also questions when does the FED will start raising the interest rates, his answer was “in the future” but he added that the FED won’t be able to wait until the jobs market is fully recovered before it pushed rates up.
On the Wall Street reform topic, he said he was in favor of the senate version which gives regulators, including him the power to figure when a bank is at risk. “I think it could be made to work”, he added.
Federal Reserve Chairman Ben Bernanke said this Monday he expects a continuing economic recovery that it won’t fall back into a “double dip” recession.
“My best guess is we’ll have a continued recovery (but) it won’t feel terrific” he said in an interview at a forum.
Fears of a double-dip recession have grown in the past weeks with the Europe’s debt crisis, “but there seems to be a good bit of momentum in consumer spending and investment, so my best guess is that we’ll have a continued recovery”.
He also warned that the unemployment rate will be high for a while, meaning that “a lot of people are going to be under financial stress, and this is one of the reasons why it won’t be terrific. “
Bernanke was also questions when does the FED will start raising the interest rates, his answer was “in the future” but he added that the FED won’t be able to wait until the jobs market is fully recovered before it pushed rates up.
On the Wall Street reform topic, he said he was in favor of the senate version which gives regulators, including him the power to figure when a bank is at risk. “I think it could be made to work”, he added.
Friday, June 4, 2010
Freddie Mac's mortgage rates
Freddie Mac’s mortgage rates
Freddie Mac said on Thursday that the average rates on a 30 year fixed mortgage ticked up this week like the lowest in the year.
The average rate rose to a 4.79 percent up from 4.78 percent last week. These rates have fallen further and because the European turmoil, investors have shifted money into the U.S Treasury bonds; the mortgage rates tend to track the interest paid on long –term Treasury bonds. Join rate on a 15 yr fixed rate mortgage hit a record low of 4.20 percent which is down from last week when it was at 4.21 percent, and rates on a five-year, adjustable-rate mortgages averaged a 3.94 percent, down from 3.97 last week.
The nationwide fee from Freddie Mac’s survey averaged 0.8 of a point for 30-year fixed rate loans and 0.7 of a point for 5-year, 5-year loans and 1-year loans.
Freddie Mac said on Thursday that the average rates on a 30 year fixed mortgage ticked up this week like the lowest in the year.
The average rate rose to a 4.79 percent up from 4.78 percent last week. These rates have fallen further and because the European turmoil, investors have shifted money into the U.S Treasury bonds; the mortgage rates tend to track the interest paid on long –term Treasury bonds. Join rate on a 15 yr fixed rate mortgage hit a record low of 4.20 percent which is down from last week when it was at 4.21 percent, and rates on a five-year, adjustable-rate mortgages averaged a 3.94 percent, down from 3.97 last week.
The nationwide fee from Freddie Mac’s survey averaged 0.8 of a point for 30-year fixed rate loans and 0.7 of a point for 5-year, 5-year loans and 1-year loans.
Buy Or Rent... Which one is better?
Buy Or Rent… Which one is better?
Buy? Think again. Most people think is better to buy than rent, but according to real estate website Trulia.com has looked at major real estate markets across the country and asked: is it cheaper to buy, or rent?
This was a question that was dead until national home prices slid potentially. According to Tara Nicholle Nelson, a spokeswoman for Trulia "we did a survey of site visitors and found that 30% of them were thinking either of buying or renting"
Price stability is factor, and unlike home prices, rents tend to go high, but on the other hand, national median home price rise a 12.2% in 2005 and fell nearly 20% in 2008 according to housing group.
One of the city where is recommended to rent is Manhattan, home prices are way too high says Trulia, but in cities like Miami, Phoenix and Las Vegas and other places were there has been a major housing impact homes are cheap compared to rents.
There are benefits on both ways,for example when you purchase a home the costs tend to be more stable, fixed rate loans don't go up and rents usually do.
On the other hand, renters don't have a responsibility of a home ownership and they don't tie down. If they have to move to another place due to jobs it can easily be done without worrying about selling and buying a new one.
This index addresses but as a consumer you have to make your own decisions based on your lifestyle and what you want to do in life more than anything else.
Buy? Think again. Most people think is better to buy than rent, but according to real estate website Trulia.com has looked at major real estate markets across the country and asked: is it cheaper to buy, or rent?
This was a question that was dead until national home prices slid potentially. According to Tara Nicholle Nelson, a spokeswoman for Trulia "we did a survey of site visitors and found that 30% of them were thinking either of buying or renting"
Price stability is factor, and unlike home prices, rents tend to go high, but on the other hand, national median home price rise a 12.2% in 2005 and fell nearly 20% in 2008 according to housing group.
One of the city where is recommended to rent is Manhattan, home prices are way too high says Trulia, but in cities like Miami, Phoenix and Las Vegas and other places were there has been a major housing impact homes are cheap compared to rents.
There are benefits on both ways,for example when you purchase a home the costs tend to be more stable, fixed rate loans don't go up and rents usually do.
On the other hand, renters don't have a responsibility of a home ownership and they don't tie down. If they have to move to another place due to jobs it can easily be done without worrying about selling and buying a new one.
This index addresses but as a consumer you have to make your own decisions based on your lifestyle and what you want to do in life more than anything else.
Wednesday, June 2, 2010
Foreclosures: A stabilizing option?
People are not paying their mortgage, which means that just waiting for a foreclosure has allowed them to stabilize family business and personal finances; Instead of the house dragging them down, it is raising them up.
Foreclosures procedures are against 1.7 million of the nation’s households. According to the LPS Applied Analytics the average borrower in foreclosure has been delinquent for 438 days before being evicted, which is up from 251 days in January 2008.Some real estate agents and experts say that the number of people who lives like this without paying their mortgages is rising.
LPS also calculated early this year that more than 650,000 households had not paid in 18 months. In some states like California and Texas, lenders can continue a foreclosure outside the court, but in states like Florida, New York and 19 other states it works with judicial foreclosure and it is when the process becomes slow and people takes advantage of this.
People prefer to sustain their business with the money they are saving by not paying a house that probably is worth less than what the real mortgage is, knowing that their credit score is already hit, and not having anything else to lose.
People are not paying their mortgage, which means that just waiting for a foreclosure has allowed them to stabilize family business and personal finances; Instead of the house dragging them down, it is raising them up.
Foreclosures procedures are against 1.7 million of the nation’s households. According to the LPS Applied Analytics the average borrower in foreclosure has been delinquent for 438 days before being evicted, which is up from 251 days in January 2008.Some real estate agents and experts say that the number of people who lives like this without paying their mortgages is rising.
LPS also calculated early this year that more than 650,000 households had not paid in 18 months. In some states like California and Texas, lenders can continue a foreclosure outside the court, but in states like Florida, New York and 19 other states it works with judicial foreclosure and it is when the process becomes slow and people takes advantage of this.
People prefer to sustain their business with the money they are saving by not paying a house that probably is worth less than what the real mortgage is, knowing that their credit score is already hit, and not having anything else to lose.
Tax credit expired on April 30th, but the eligible buyers need to close those transactions by June 30 or they will end up losing the tax credit.
It may seem like a long time, but time is closing swiftly, and there are so many numbers of delays that could push it past June 30. “It’s not uncommon to take 75 to 90 days to settle.” Said Timothy M. Dwyer, president of Entitle Direct, a title insurance company.
Delays can happen because of issues in the mortgage approvals, but on the seller’s side can also be any delay. That’s why buyers need to scheduled their time before deadline, all parts involved need to know there’s a tax credit at stake so everyone knows the essence of time.
Buyers also need to know that with the recent decrease on the mortgage rates, it also created an increase on sells, even though the ones with the tax credit have priority.
Also homebuyers need to have all papers and information to give to the lender as quickly as possible when he ask for them, and as Joseph W. Rand, managing partner with Better Homes and Gardens Rand Realty in New City, N.Y., suggested, ask the lender what they need, and in that way you will be prepared to turn whatever is need as soon as is needed.
It may seem like a long time, but time is closing swiftly, and there are so many numbers of delays that could push it past June 30. “It’s not uncommon to take 75 to 90 days to settle.” Said Timothy M. Dwyer, president of Entitle Direct, a title insurance company.
Delays can happen because of issues in the mortgage approvals, but on the seller’s side can also be any delay. That’s why buyers need to scheduled their time before deadline, all parts involved need to know there’s a tax credit at stake so everyone knows the essence of time.
Buyers also need to know that with the recent decrease on the mortgage rates, it also created an increase on sells, even though the ones with the tax credit have priority.
Also homebuyers need to have all papers and information to give to the lender as quickly as possible when he ask for them, and as Joseph W. Rand, managing partner with Better Homes and Gardens Rand Realty in New City, N.Y., suggested, ask the lender what they need, and in that way you will be prepared to turn whatever is need as soon as is needed.
Monday, May 24, 2010
Mortgage News Update
1st Nationwide Mortgage update
mortgage rates 30 yr conforming 4.625%
Jumbo 4.75% 30 year
Last Week; interest rates fell again on a 426 point decline in the DJIA and increasing concern that Europe's economy is going to slow and drag down recovery here. The euro rallied three days last week but traders and investors appear no longer to be tying their pessimism solely to to the euro currency. Weekly jobless claims unexpectedly jumped 25K last week to a two month high of 471K new unemployment claims. What was the strong belief the economic recovery was solid has now been redefined as a potential double dip with the economy slipping on Europe's debt problems headlined by Greece. For two months after a strong run up in the equity markets most were expecting a correction in the stock market but didn't believe it would be this bad. Money running headlong to the safety of US treasuries and has allowed mortgage rates to fall to the lowest levels since the 2008 sub-prime crash.
This Week; nothing over the weekend that changed anything in terms of market sentiment. The rate markets will open stronger on Monday with some softening of the euro currency. Look for more selling in the stock market, at least early in the week. Reports on existing and new home sales will be out, recent sales data hasn't been good; even with the low interest rates after the tax credit ended it appears buyers are in retreat. Last week's MBA weekly mortgage applications for purchases fell 27%, re-finances are where the improvement has come from. This week has $113B of Treasury auctions; $42B of 2 yr notes on Tuesday $40B of 5 yr notes Wednesday, and $31B of 7 yr notes Thursday. Normally Treasury auctions add pressure to the bond market but the conditions these days are more about safety than concerns over demand. That said, with interest rates so low now it will bring the question and some concern investors won't be stepping up with the same intensity as they have been. That argument however, may not hold as the investment world is all about safety these days as the uncertainty over economic expansion is increasing rapidly.
1st Nationwide Mortgage Corporation
mortgage rates 30 yr conforming 4.625%
Jumbo 4.75% 30 year
Last Week; interest rates fell again on a 426 point decline in the DJIA and increasing concern that Europe's economy is going to slow and drag down recovery here. The euro rallied three days last week but traders and investors appear no longer to be tying their pessimism solely to to the euro currency. Weekly jobless claims unexpectedly jumped 25K last week to a two month high of 471K new unemployment claims. What was the strong belief the economic recovery was solid has now been redefined as a potential double dip with the economy slipping on Europe's debt problems headlined by Greece. For two months after a strong run up in the equity markets most were expecting a correction in the stock market but didn't believe it would be this bad. Money running headlong to the safety of US treasuries and has allowed mortgage rates to fall to the lowest levels since the 2008 sub-prime crash.
This Week; nothing over the weekend that changed anything in terms of market sentiment. The rate markets will open stronger on Monday with some softening of the euro currency. Look for more selling in the stock market, at least early in the week. Reports on existing and new home sales will be out, recent sales data hasn't been good; even with the low interest rates after the tax credit ended it appears buyers are in retreat. Last week's MBA weekly mortgage applications for purchases fell 27%, re-finances are where the improvement has come from. This week has $113B of Treasury auctions; $42B of 2 yr notes on Tuesday $40B of 5 yr notes Wednesday, and $31B of 7 yr notes Thursday. Normally Treasury auctions add pressure to the bond market but the conditions these days are more about safety than concerns over demand. That said, with interest rates so low now it will bring the question and some concern investors won't be stepping up with the same intensity as they have been. That argument however, may not hold as the investment world is all about safety these days as the uncertainty over economic expansion is increasing rapidly.
1st Nationwide Mortgage Corporation
Friday, April 30, 2010
Housing Recovery
U.S Housingg shows recovery signs, after it left a lot of homeowners with properties that were worth less than their mortgages.
The S&P/Case-Shiller index said yesterday that the home prices in 20 cities rose a 0.6%. And last week The National Association of Realtors reported that the existing home process advanced a 0.4% this march for the first time in four months.
“Prices could go further, but as long as mortgagee rates don’t jump and employment continues to improve, we should see housing play a key role in preventing a double dip recession” said economist Karl Case, he, with Robert Shiller created the S&P/Case-Shiller index. He also added “We’ve turned a corner with housing, though it is hard to see any robustness”.
One of the things that are supporting the housing demand is an abundance of inexpensive homes and a stabilizing job market, according to chief U.S economist for Barclays in New York Dean Maki.
Barclays Maki said: We’ll see a surge as buyers rush to close before the deadline, follow by a subsequent falloff… After that dip, we expect home sales to increase for the rest of the year.” And according Neal Soss, chief economist at Credit Suisse Holdings in USA in NY, employment is the key to this situation, to housing outlook, and the road to recovery “You’ve really got to heal the fundamentals, such as the employment situation, rather than just address the symptoms with a program like tax credit, we see housing as a lagging sector for some years into the future.”
Although, the recovery can be different for residential construction, According to Donald Kohn in a speech on April 8 said: “I do not expect that the recovery in housing construction will boost growth substantially this year, in a contrast to its usual pattern early in economic recoveries, a large overhang of vacant homes is likely to weigh on new construction for some time”.
As Case said, “there is a light at the end if this real state tunnel, but there are long of things, like inventory, in the way”
The S&P/Case-Shiller index said yesterday that the home prices in 20 cities rose a 0.6%. And last week The National Association of Realtors reported that the existing home process advanced a 0.4% this march for the first time in four months.
“Prices could go further, but as long as mortgagee rates don’t jump and employment continues to improve, we should see housing play a key role in preventing a double dip recession” said economist Karl Case, he, with Robert Shiller created the S&P/Case-Shiller index. He also added “We’ve turned a corner with housing, though it is hard to see any robustness”.
One of the things that are supporting the housing demand is an abundance of inexpensive homes and a stabilizing job market, according to chief U.S economist for Barclays in New York Dean Maki.
Barclays Maki said: We’ll see a surge as buyers rush to close before the deadline, follow by a subsequent falloff… After that dip, we expect home sales to increase for the rest of the year.” And according Neal Soss, chief economist at Credit Suisse Holdings in USA in NY, employment is the key to this situation, to housing outlook, and the road to recovery “You’ve really got to heal the fundamentals, such as the employment situation, rather than just address the symptoms with a program like tax credit, we see housing as a lagging sector for some years into the future.”
Although, the recovery can be different for residential construction, According to Donald Kohn in a speech on April 8 said: “I do not expect that the recovery in housing construction will boost growth substantially this year, in a contrast to its usual pattern early in economic recoveries, a large overhang of vacant homes is likely to weigh on new construction for some time”.
As Case said, “there is a light at the end if this real state tunnel, but there are long of things, like inventory, in the way”
Tuesday, April 27, 2010
$10,000 Homebuyer Tax Credit
Governor Schwarzenegger Signs $10,000 Homebuyer Tax Credit Legislation
Governor Arnold Schwarzenegger today returned to the La Ventana Homes project in Fresno where he kicked off his
campaign to extend and expand the hugely successful homebuyer tax credit to sign legislation that will do just that.
AB 183, authored by Assemblymember Anna Caballero (D-Salinas) and Senator Roy Ashburn (R-Bakersfield), will
provide a tax credit of up to $10,000 to Californians who are buying their first home or purchasing a brand new
home. This legislation, part of the Governor’s larger California Jobs Initiative, will play a key role in getting our
economy moving again by encouraging home ownership and stimulating job creation.
“I have been up and down the state pushing this important housing bill that will get people off the fence and into
homes while creating jobs and stimulating our economy – and today I am proud to take action and put it into law,”
said Governor Schwarzenegger. “Creating jobs is my number one priority and I am glad that I have been able to sign
two job-creating bills in two days. I applaud the legislature for their great work and encourage them to keep it up and
pass the remaining job-creating elements of my California Jobs Initiative.”
AB 183 was passed by the legislature on March 22 and gives the Franchise Tax Board authority to extend a total of
$200 million in tax credits to California homebuyers; $100 million for buyers of new, unoccupied homes and another
$100 million for first-time buyers of existing homes. The credit will be extended from May 1, 2010 to December 31,
2010. The tax credit will be available to buyers on a first-come, first-served basis and is applied in equal amounts
over a period of three taxable years. To qualify, the buyer must not be a dependant and must purchase a home that
does not belong to a relative.
Governor Schwarzenegger fought hard to extend and expand the homebuyer tax credit after its successful run in
2009. That $100 million tax credit, which was approved in February 2009, ran out after just four months with 10,659
Californians claiming the credit – increasing home purchases, jumpstarting building projects and boosting local
economies. In fact, La Ventana Homes saw a 300 percent increase in sales when the tax credit went into effect.
The homebuyer tax credit is a part of the larger California Jobs Initiative that the Governor proposed in his State of
the State address in January to create jobs and stimulate the economy. Today’s bill is the second piece of it to be
approved by the legislature. A sales tax exemption on green-tech manufacturing equipment was also approved to
encourage green businesses to relocate and invest in California. The Governor signed that yesterday.
Chris Arco 1st Nationwide Mortgage www.1stnwm.com
Governor Arnold Schwarzenegger today returned to the La Ventana Homes project in Fresno where he kicked off his
campaign to extend and expand the hugely successful homebuyer tax credit to sign legislation that will do just that.
AB 183, authored by Assemblymember Anna Caballero (D-Salinas) and Senator Roy Ashburn (R-Bakersfield), will
provide a tax credit of up to $10,000 to Californians who are buying their first home or purchasing a brand new
home. This legislation, part of the Governor’s larger California Jobs Initiative, will play a key role in getting our
economy moving again by encouraging home ownership and stimulating job creation.
“I have been up and down the state pushing this important housing bill that will get people off the fence and into
homes while creating jobs and stimulating our economy – and today I am proud to take action and put it into law,”
said Governor Schwarzenegger. “Creating jobs is my number one priority and I am glad that I have been able to sign
two job-creating bills in two days. I applaud the legislature for their great work and encourage them to keep it up and
pass the remaining job-creating elements of my California Jobs Initiative.”
AB 183 was passed by the legislature on March 22 and gives the Franchise Tax Board authority to extend a total of
$200 million in tax credits to California homebuyers; $100 million for buyers of new, unoccupied homes and another
$100 million for first-time buyers of existing homes. The credit will be extended from May 1, 2010 to December 31,
2010. The tax credit will be available to buyers on a first-come, first-served basis and is applied in equal amounts
over a period of three taxable years. To qualify, the buyer must not be a dependant and must purchase a home that
does not belong to a relative.
Governor Schwarzenegger fought hard to extend and expand the homebuyer tax credit after its successful run in
2009. That $100 million tax credit, which was approved in February 2009, ran out after just four months with 10,659
Californians claiming the credit – increasing home purchases, jumpstarting building projects and boosting local
economies. In fact, La Ventana Homes saw a 300 percent increase in sales when the tax credit went into effect.
The homebuyer tax credit is a part of the larger California Jobs Initiative that the Governor proposed in his State of
the State address in January to create jobs and stimulate the economy. Today’s bill is the second piece of it to be
approved by the legislature. A sales tax exemption on green-tech manufacturing equipment was also approved to
encourage green businesses to relocate and invest in California. The Governor signed that yesterday.
Chris Arco 1st Nationwide Mortgage www.1stnwm.com
Friday, April 23, 2010
Mortgage News
A More than Expected Rise
By: Chris Arco, Editor April 23, 2010 Home sales of previously occupied homes jumped a 6.8% in March, reversing three months of decline, being this highest level since December according to the National Association of Realtors. Stuart Hoffman, Chief economist at PNC Financial Services Group said that “the spring selling season would be a success, and probably the most active we’re seen in years…” These sales, according to economist by Thomson Reuters, had been expected to rise 5.2 percent to 5.28 Million. And these results can help us see that the housing market is stabilizing after going through bad and devastating time.First time buyers are the ones that are taking advantage of the Tax Credit, it brought more buyers into the market. According to Lawrence Yun, the Realtors group’s chief economist said:”The tax credit has done its job” at a conference, adding: “it helped stabilized prices”. The dead line for buyers to apply is April 30th; real states agents said that is stimulating sales, but it also is raising questions about whether this path is going to float by itself without the government help; but others, like Yun says that there is going to be enough demand on the second half of the year. The direction of the housing market can also be dictated by the Foreclosures after the Tax Credit is finished, Foreclosures are making the market more affordable to the buyers. “Housing is coming back” said Hoffman, “But it has a long way to go” At CAMREO we offer REO management to real estate lenders and investors. (Advertisement).
Morgan profit up 55%
Strength from its investment banking arm pushed first-quarter profit at J.P. Morgan Chase up 55%, the New York banking giant said Wednesday.
Jamie Dimon, chairman and chief executive, said in a statement that the results "reflected another strong quarter for the investment bank, particularly in fixed income markets, and continued solid performance across asset management, commercial banking and retail banking."
However, "these good results were partially offset by high losses in the consumer credit portfolios," added Dimon.
J.P. Morgan (JPM, Trade ) reported net income of $3.3 billion, or 74 cents a share, up from $2.1 billion, or 40 cents, earned in the year-ago first quarter. Total net revenue was up 11%, to $27.7 billion.
Analysts surveyed by FactSet Research had expected, on average, a profit of 65 cents a share and revenue of $25.9 billion.
J.P. Morgan shares rose nearly 3% in early action, and the stock has climbed over 53% over the last 12 months. The performance helped lift U.S. stocks on Wednesday.
J.P. Morgan was one of the big banks to accept government support during the 2008 financial crisis, but it repaid the money quickly and emerged stronger than rivals such as Citigroup Inc. (C, Trade ) and Bank of America Corp. (BAC, Trade ).
While its consumer and commercial lending businesses are hampered by bad loans, the Dow Jones Industrial Average component's investment bank has benefited as the market rebound encouraged companies to raise new capital by selling equity or refinancing themselves by issuing new debt.
J.P. Morgan said its investment bank generated net income of $2.5 billion in the first quarter, up from $1.6 billion a year earlier.
"These results reflected strong net revenue, particularly in fixed income markets, and a benefit from the provision for credit losses," said the firm in a statement.
J.P. Morgan was the lead global underwriter on equity and equity-linked offerings during the first quarter. It was also the top underwriter on investment-grade corporate bond sales and junk bond offerings in the period, according to data from Dealogic and CreditSights, an independent fixed-income research firm. J.P. Morgan collects hefty fees for such services.
In a research note published after the results were announced, Standard & Poor's analyst Matthew Albrecht maintained his strong buy rating on the firm.
"Strong fixed income trading results and a declining loan loss provision were able to offset higher legal reserves," wrote Albrecht. "Delinquency rates have stabilized or improved across most businesses, suggesting further reductions in loan loss provisions. We also expect interest spreads to remain favorable until rates start rising, helping to offset a shrinking loan balance."
The provision for credit losses in the firm's retail financial services unit was $3.7 billion.
J.P. Morgan's retail financial services division showed a loss of $131 million in the first quarter, compared to a profit of $474 million in the same period of 2009.
"Economic pressure on consumers continued to drive losses for the mortgage and home equity portfolios," said J.P. Morgan.
The firm's retail banking unit saw a profit of $898 million, up 4%.
Card services, which houses J.P. Morgan's big credit card business, lost $303 million in the first quarter, compared to a loss of $547 million in the year-ago period. Commercial banking generated a profit of $390 million in the latest period, up slightly on the $338 million made in the first quarter of 2009.
Treasury and securities services reported a $279 million profit in the period, a 9% drop, while asset management profit jumped 75%, to $392 million.
Dimon also said that J.P. Morgan has plans to hire 9,000 new staff in the U.S., and aims for further additions worldwide.
Morgan profit up 55%
Strength from its investment banking arm pushed first-quarter profit at J.P. Morgan Chase up 55%, the New York banking giant said Wednesday.
Jamie Dimon, chairman and chief executive, said in a statement that the results "reflected another strong quarter for the investment bank, particularly in fixed income markets, and continued solid performance across asset management, commercial banking and retail banking."
However, "these good results were partially offset by high losses in the consumer credit portfolios," added Dimon.
J.P. Morgan (JPM, Trade ) reported net income of $3.3 billion, or 74 cents a share, up from $2.1 billion, or 40 cents, earned in the year-ago first quarter. Total net revenue was up 11%, to $27.7 billion.
Analysts surveyed by FactSet Research had expected, on average, a profit of 65 cents a share and revenue of $25.9 billion.
J.P. Morgan shares rose nearly 3% in early action, and the stock has climbed over 53% over the last 12 months. The performance helped lift U.S. stocks on Wednesday.
J.P. Morgan was one of the big banks to accept government support during the 2008 financial crisis, but it repaid the money quickly and emerged stronger than rivals such as Citigroup Inc. (C, Trade ) and Bank of America Corp. (BAC, Trade ).
While its consumer and commercial lending businesses are hampered by bad loans, the Dow Jones Industrial Average component's investment bank has benefited as the market rebound encouraged companies to raise new capital by selling equity or refinancing themselves by issuing new debt.
J.P. Morgan said its investment bank generated net income of $2.5 billion in the first quarter, up from $1.6 billion a year earlier.
"These results reflected strong net revenue, particularly in fixed income markets, and a benefit from the provision for credit losses," said the firm in a statement.
J.P. Morgan was the lead global underwriter on equity and equity-linked offerings during the first quarter. It was also the top underwriter on investment-grade corporate bond sales and junk bond offerings in the period, according to data from Dealogic and CreditSights, an independent fixed-income research firm. J.P. Morgan collects hefty fees for such services.
In a research note published after the results were announced, Standard & Poor's analyst Matthew Albrecht maintained his strong buy rating on the firm.
"Strong fixed income trading results and a declining loan loss provision were able to offset higher legal reserves," wrote Albrecht. "Delinquency rates have stabilized or improved across most businesses, suggesting further reductions in loan loss provisions. We also expect interest spreads to remain favorable until rates start rising, helping to offset a shrinking loan balance."
The provision for credit losses in the firm's retail financial services unit was $3.7 billion.
J.P. Morgan's retail financial services division showed a loss of $131 million in the first quarter, compared to a profit of $474 million in the same period of 2009.
"Economic pressure on consumers continued to drive losses for the mortgage and home equity portfolios," said J.P. Morgan.
The firm's retail banking unit saw a profit of $898 million, up 4%.
Card services, which houses J.P. Morgan's big credit card business, lost $303 million in the first quarter, compared to a loss of $547 million in the year-ago period. Commercial banking generated a profit of $390 million in the latest period, up slightly on the $338 million made in the first quarter of 2009.
Treasury and securities services reported a $279 million profit in the period, a 9% drop, while asset management profit jumped 75%, to $392 million.
Dimon also said that J.P. Morgan has plans to hire 9,000 new staff in the U.S., and aims for further additions worldwide. 1st Nationwide Mortgage, www.1stnwm.com
By: Chris Arco, Editor April 23, 2010 Home sales of previously occupied homes jumped a 6.8% in March, reversing three months of decline, being this highest level since December according to the National Association of Realtors. Stuart Hoffman, Chief economist at PNC Financial Services Group said that “the spring selling season would be a success, and probably the most active we’re seen in years…” These sales, according to economist by Thomson Reuters, had been expected to rise 5.2 percent to 5.28 Million. And these results can help us see that the housing market is stabilizing after going through bad and devastating time.First time buyers are the ones that are taking advantage of the Tax Credit, it brought more buyers into the market. According to Lawrence Yun, the Realtors group’s chief economist said:”The tax credit has done its job” at a conference, adding: “it helped stabilized prices”. The dead line for buyers to apply is April 30th; real states agents said that is stimulating sales, but it also is raising questions about whether this path is going to float by itself without the government help; but others, like Yun says that there is going to be enough demand on the second half of the year. The direction of the housing market can also be dictated by the Foreclosures after the Tax Credit is finished, Foreclosures are making the market more affordable to the buyers. “Housing is coming back” said Hoffman, “But it has a long way to go” At CAMREO we offer REO management to real estate lenders and investors. (Advertisement).
Morgan profit up 55%
Strength from its investment banking arm pushed first-quarter profit at J.P. Morgan Chase up 55%, the New York banking giant said Wednesday.
Jamie Dimon, chairman and chief executive, said in a statement that the results "reflected another strong quarter for the investment bank, particularly in fixed income markets, and continued solid performance across asset management, commercial banking and retail banking."
However, "these good results were partially offset by high losses in the consumer credit portfolios," added Dimon.
J.P. Morgan (JPM, Trade ) reported net income of $3.3 billion, or 74 cents a share, up from $2.1 billion, or 40 cents, earned in the year-ago first quarter. Total net revenue was up 11%, to $27.7 billion.
Analysts surveyed by FactSet Research had expected, on average, a profit of 65 cents a share and revenue of $25.9 billion.
J.P. Morgan shares rose nearly 3% in early action, and the stock has climbed over 53% over the last 12 months. The performance helped lift U.S. stocks on Wednesday.
J.P. Morgan was one of the big banks to accept government support during the 2008 financial crisis, but it repaid the money quickly and emerged stronger than rivals such as Citigroup Inc. (C, Trade ) and Bank of America Corp. (BAC, Trade ).
While its consumer and commercial lending businesses are hampered by bad loans, the Dow Jones Industrial Average component's investment bank has benefited as the market rebound encouraged companies to raise new capital by selling equity or refinancing themselves by issuing new debt.
J.P. Morgan said its investment bank generated net income of $2.5 billion in the first quarter, up from $1.6 billion a year earlier.
"These results reflected strong net revenue, particularly in fixed income markets, and a benefit from the provision for credit losses," said the firm in a statement.
J.P. Morgan was the lead global underwriter on equity and equity-linked offerings during the first quarter. It was also the top underwriter on investment-grade corporate bond sales and junk bond offerings in the period, according to data from Dealogic and CreditSights, an independent fixed-income research firm. J.P. Morgan collects hefty fees for such services.
In a research note published after the results were announced, Standard & Poor's analyst Matthew Albrecht maintained his strong buy rating on the firm.
"Strong fixed income trading results and a declining loan loss provision were able to offset higher legal reserves," wrote Albrecht. "Delinquency rates have stabilized or improved across most businesses, suggesting further reductions in loan loss provisions. We also expect interest spreads to remain favorable until rates start rising, helping to offset a shrinking loan balance."
The provision for credit losses in the firm's retail financial services unit was $3.7 billion.
J.P. Morgan's retail financial services division showed a loss of $131 million in the first quarter, compared to a profit of $474 million in the same period of 2009.
"Economic pressure on consumers continued to drive losses for the mortgage and home equity portfolios," said J.P. Morgan.
The firm's retail banking unit saw a profit of $898 million, up 4%.
Card services, which houses J.P. Morgan's big credit card business, lost $303 million in the first quarter, compared to a loss of $547 million in the year-ago period. Commercial banking generated a profit of $390 million in the latest period, up slightly on the $338 million made in the first quarter of 2009.
Treasury and securities services reported a $279 million profit in the period, a 9% drop, while asset management profit jumped 75%, to $392 million.
Dimon also said that J.P. Morgan has plans to hire 9,000 new staff in the U.S., and aims for further additions worldwide.
Morgan profit up 55%
Strength from its investment banking arm pushed first-quarter profit at J.P. Morgan Chase up 55%, the New York banking giant said Wednesday.
Jamie Dimon, chairman and chief executive, said in a statement that the results "reflected another strong quarter for the investment bank, particularly in fixed income markets, and continued solid performance across asset management, commercial banking and retail banking."
However, "these good results were partially offset by high losses in the consumer credit portfolios," added Dimon.
J.P. Morgan (JPM, Trade ) reported net income of $3.3 billion, or 74 cents a share, up from $2.1 billion, or 40 cents, earned in the year-ago first quarter. Total net revenue was up 11%, to $27.7 billion.
Analysts surveyed by FactSet Research had expected, on average, a profit of 65 cents a share and revenue of $25.9 billion.
J.P. Morgan shares rose nearly 3% in early action, and the stock has climbed over 53% over the last 12 months. The performance helped lift U.S. stocks on Wednesday.
J.P. Morgan was one of the big banks to accept government support during the 2008 financial crisis, but it repaid the money quickly and emerged stronger than rivals such as Citigroup Inc. (C, Trade ) and Bank of America Corp. (BAC, Trade ).
While its consumer and commercial lending businesses are hampered by bad loans, the Dow Jones Industrial Average component's investment bank has benefited as the market rebound encouraged companies to raise new capital by selling equity or refinancing themselves by issuing new debt.
J.P. Morgan said its investment bank generated net income of $2.5 billion in the first quarter, up from $1.6 billion a year earlier.
"These results reflected strong net revenue, particularly in fixed income markets, and a benefit from the provision for credit losses," said the firm in a statement.
J.P. Morgan was the lead global underwriter on equity and equity-linked offerings during the first quarter. It was also the top underwriter on investment-grade corporate bond sales and junk bond offerings in the period, according to data from Dealogic and CreditSights, an independent fixed-income research firm. J.P. Morgan collects hefty fees for such services.
In a research note published after the results were announced, Standard & Poor's analyst Matthew Albrecht maintained his strong buy rating on the firm.
"Strong fixed income trading results and a declining loan loss provision were able to offset higher legal reserves," wrote Albrecht. "Delinquency rates have stabilized or improved across most businesses, suggesting further reductions in loan loss provisions. We also expect interest spreads to remain favorable until rates start rising, helping to offset a shrinking loan balance."
The provision for credit losses in the firm's retail financial services unit was $3.7 billion.
J.P. Morgan's retail financial services division showed a loss of $131 million in the first quarter, compared to a profit of $474 million in the same period of 2009.
"Economic pressure on consumers continued to drive losses for the mortgage and home equity portfolios," said J.P. Morgan.
The firm's retail banking unit saw a profit of $898 million, up 4%.
Card services, which houses J.P. Morgan's big credit card business, lost $303 million in the first quarter, compared to a loss of $547 million in the year-ago period. Commercial banking generated a profit of $390 million in the latest period, up slightly on the $338 million made in the first quarter of 2009.
Treasury and securities services reported a $279 million profit in the period, a 9% drop, while asset management profit jumped 75%, to $392 million.
Dimon also said that J.P. Morgan has plans to hire 9,000 new staff in the U.S., and aims for further additions worldwide. 1st Nationwide Mortgage, www.1stnwm.com
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