There seem to be more every month!
According to RealtyTrac, US homes facing foreclosure almost
doubled in July as property owners with adjustable-rate
mortgages saw their payments rise. Lenders sent
179,599 notices of default, scheduled auctions or bank
repossessions last month. California, Florida, Michigan,
Ohio and Georgia accounted for more than half of the
country's total filings. US home sales dropped to a
four-year low in the second quarter and prices fell in a
third of US cities, according to the National Association of
Realtors.
Of the $10.4 trillion, which
companies are servicing the most residential loans out
there? Countrywide is #1 with over $1.4 trillion, almost
a 14% market share. Wells is #2, followed by Citi,
Chase, and WAMU. Interestingly, for FHA & VA loans
(with $423 billion outstanding), Wells is #1 with a 32%
market share. Of the $10.4trillion in mortgages,
only 13% are sub prime and, of that, only about 14%
are delinquent. And only about 5% (of the 13%) are in
foreclosure.
Yesterday the markets seemed to
believe that the Federal Reserve may be able to avoid an
emergency reduction in the benchmark interest rate as some
of its steps to increase liquidity show signs of success. In
other words, things were relatively calm. US Treasury bill
yields rose for the first time in six days as demand for the
safest government debt declined. Richmond Fed President
Jeffrey Lacker, said decisions need to be guided by the
outlook for prices and growth rather than strictly looking
at market gyrations. The difference in yield between two-
and 10- year note has reached the widest since 2005,
helping ARM prices relative to fixed. There were no economic releases
yesterday, but Senator Dodd held a morning press
conference following his meeting with Fed Chairman
Bernanke and Secretary Paulson in which he said that
they are committed to using all of the tools at their
disposal to restore stability in the markets and
continued to reiterate his support for lifting Fannie
and Freddie's portfolio caps to help provide additional
liquidity.
Under "mortgage company news" Nat
City made a series of pricing adjustment changes (FICO, loan
amount, etc.) to their various programs, and a rumor sprang
up (in the WSJ, citing unnamed investors) about Warren
Buffett possibly being interested in Countrywide's servicing
business and mortgage-backed securities portfolio.
Here's what you can tell
your client if their mortgage lender goes out of business.
1. "Keep making your payments. Regardless of
what kind of trouble the mortgage company may be in, you
still need to send in your payments on time. Remember, your
payments are considered an asset to the company. If a lender
declares bankruptcy, those assets will just be sold to
another lender."
2. "Know Your Rights: the terms of your
loan should always stay the same, no matter who holds your
loan. It's important that you thoroughly review the details
of your mortgage agreement. The interest rate and the type
of loan you get should not change in a transfer. If your
lender does sell your mortgage, you should receive a letter
from the company within 15 days that outlines the new
mailing address and payment deadline."
3. "If you have paid off your loan in
full, and you want a mortgage satisfaction documents from
the company when it's no longer in business, go to your
State Attorney General's office."
4. "Negotiation will still be
hard. The servicer - the company you make your monthly check
out to - may not think it's worth its while to negotiate
with homeowners to lower monthly payments."
