Bankruptcy Law May Be Modified
Chicago Tribune

Congress is poised to give bankruptcy judges more power to modify primary home mortgages in an attempt to halt the foreclosure crisis, a move Democrats and housing advocates have been pushing for two years in the face of stiff opposition from Republicans and the mortgage industry.

The House of Representatives is expected to pass the legislation Thursday.

The measure would temporarily remove an oddity in bankruptcy law: Judges can reduce or cram down the principle on a vacation home, car, or boat, but they cannot do it to a mortgage for a primary residence.

CA Legislature Passes 90-Day Foreclosure Moratorium
Housing Wire

The California Legislature, as part of the recently-passed budget package, approved Friday, legislation SB2X-7 and AB2X-7, which provide for a 90-day foreclosure moratorium.

The bill, introduced by Sen. Ellen Corbet (D-San Leandro), covers owner-occupied homes where the first loan was recorded between Jan. 1, 2003 and Jan. 1, 2008. “Many people in our communities are facing the terrible specter of foreclosure,” Corbett said, according to the San Francisco Chronicle. “I’m just trying to find a way to help.”

Realogy Posts $1.9-billion Annual Loss
Los Angeles Times

Buyout firm Apollo Management agreed to invest as much as $150 million in Realogy Corp. after the real estate broker reported a 2008 loss of $1.91 billion.

Realogy, owner of the Century 21 and Coldwell Banker brands, said that Apollo would provide the "equity infusion" only if necessary and that it might not need the full amount. Realogy said it remained in compliance with debt agreements, according to a regulatory filing Wednesday.

New-Home Sales in U.S. Plunge to Record-Low — $309,000
Bloomberg

Sales of new homes in the U.S. plunged in January to a record low as soaring unemployment and mounting foreclosures drove buyers away.

Purchases dropped 10 percent to an annual pace of 309,000, the lowest level since data began in 1963, the Commerce Department said today in Washington. The median price decreased 13.5 percent, the most in almost four decades.

Moody’s May Downgrade More Subprime-Mortgage Debt
Bloomberg

Moody's Investors Service raised its loss estimates for $680 billion in U.S. subprime residential mortgage-backed securities issued between 2005 and 2007 and put them on risk for possible downgrade, the latest hit to the ailing financial system.

The ratings agency also said by the end of the year, one-third of subprime borrowers who are currently paying on their mortgages will become delinquent and eventually default, representing 19% of outstanding loans.

Lawyer Outwits Banks in Foreclosure Battle
New York Post

While the Obama administration battles to keep people from losing their homes, one Florida lawyer said she has a better answer to the toxic mortgage epidemic sweeping the country — fight back against the loan servicers and banks that are improperly pressing the foreclosure actions.

In essence, Charney has forced scores of plaintiffs in foreclosure actions in Jacksonville to admit they don't have legal ownership of the securitized mortgage they are trying to foreclose upon - stopping the home takeover battle in its tracks.

January Existing Home Sales Fall by 5.3 Percent
The Associated Press

A real estate group says sales of existing homes took an unexpected plunge from December to January, falling to the lowest level in nearly 12 years as buyers waited for the government to boost the U.S housing market.

The National Association of Realtors said Wednesday that sales of existing homes fell 5.3 percent to an annual rate of 4.49 million last month, from 4.74 million units in December. It was the weakest showing since July 1997.

Recession Could End This Year, Fed Chief Says
Washington Post

The nation's top economic policymaker yesterday offered a sliver of optimism in a time of gloom, saying in carefully hedged comments that growth could return next year if the financial system is put in order.

In congressional testimony, Federal Reserve Chairman Ben S. Bernanke depicted an economy undergoing a "severe contraction." But Bernanke said the recession could end in 2009, paving the way for a "year of recovery" in 2010.

Links, Lawsuits and Privacy in the Age of Real Estate 2.0
Inman News

In an important case for bloggers and real estate sites in general, real estate aggregator BlockShopper got its hand slapped heavily this month for doing what many of us do ... that is, publishing and linking to publicly available sources on the Internet. (Read related article: BlockShopper Settles Suit With Law Firm).

BlockShopper, a site that was launched in 2006, was built to aggregate real estate data in a number of metro areas around the country. One of the main features on the site is a daily news summary of real estate transactions in each city. ("Italian anesthesiologist drops $1.3M in Riverdale" serves as an example.)

Renters Lose Edge on Homeowners
Wall Street Journal

The relative cost of owning versus renting is swinging back in favor of homeownership in some U.S. markets, buoyed by several quarters of sharp declines in home prices.

At the height of the housing boom, as home prices surged, demand for rentals started to rise as the gap between owning and renting widened significantly. Even after the housing market soured, apartment demand grew as former homeowners became renters, allowing landlords to push healthy rent increases.

Now, after two years of rapid home-price depreciation, the relationship between the cost of rental payments versus after-tax mortgage payments is tilting toward ownership in a number of metropolitan areas.

Posted on RealtyTrac, this 6 bedroom, 4 bathroom bank-owned home on Sapphire Ridge Ave in Las Vegas has an asking price of $244,600, 54 percent below the $529,900 price it sold for back in 2005 to the foreclosed homeowner. The 2005 purchase was 100 percent financed through a first loan of $423,900 and a second loan of $106,000, so the lender is basically taking a $285,000 haircut on this 3,422 square foot property that sits on a lot of 6,733 square feet.

View Property Details (Free trial membership required for lien & loan history, full sales comps and other details).

In some markets like Las Vegas, one of the epicenters of the nation's foreclosure crisis, foreclosure bargains are being snapped up by bargain hunters looking for both investment property and homes to live in. That is evident in this Las Vegas neighborhood, where 15 properties within a half mile of this property have sold in the last three months, according to the Comparable Sales on RealtyTrac. The sales prices on those comps range from $129,000 on a 3 bed, 2 bath home sold on Nov. 26, 2008, to $1,116,253 for a 6 bed, 4 bath home sold on Dec. 22, 2008 (see below).

For more information about the Las Vegas real estate and foreclosure market, check out the March 2009 edition of the Foreclosure News Report, which includes an in-depth analysis of the local market, along with perspectives from local foreclosure investors, real estate agents and market researchers. The March Foreclosure News Report will be available March 16, and you can subscribe to the newsletter today to have it mailed to your address.

Mortgage Rescue Eligibility Still Being Finalized
Renae Merle, The Washington Post

A day after President Obama unveiled his $75 billion foreclosure prevention program, administration officials yesterday said they were still determining which homeowners should qualify.

The administration is developing a standard for lenders to use in evaluating applicants that seeks to exclude homeowners who are not in real need or are too far behind in their payments to be saved. Officials have set some conditions for eligibility, including requiring that borrowers' mortgage payments consume more than 38 percent of their income and that the property be a primary residence.

Realty Plan Fuels Call to Clarify Appraisal Rules
Emily Flitter, Financial Planning

The financial services industry is pushing regulators to clarify appraisal requirements for loan modifications in response to the Obama administration's new plan to prevent foreclosures.

Some lenders are concerned that current regulations mandate that they get new appraisals for all real estate-related transactions, including refinancings and loan modifications. Banking industry representatives argue that doing so is increasingly difficult in hard-hit markets, and that the Obama plan, which is designed to encourage modifications, does not tackle the issue.

Big Mortgages Are Available, For A Price
Kathleen Doler, Investors Business Daily

Big loan, big headache?

The housing and financial crises have made the path to finding a jumbo mortgage trickier to navigate. But loans of $1 million, $3 million or even $10 million can still be found with a little work and the right contacts.

Public, Bankers, Analysts Debate Merits of Obama's Foreclosure Plan
PBS, Transcript from the Online NewsHour

Reaction in the banking world and among the public to President Barack Obama's plan to ease home foreclosures has proven mixed. Analysts debate the plan's merits and examine what the measure may mean for homeowners and lenders.

What to do with Fannie and Freddie?
Matt Carter, Inman News

Lawmakers have three options for getting Fannie Mae and Freddie Mac out of conservatorship: nationalize the companies, retain their public-private status with increased oversight, or sell them off to private investors.

That's according to James Lockhart, who was appointed by former President George Bush in 2006 to head the regulatory agency that oversees Fannie and Freddie.

$275 Billion Plan Seeks to Address Housing Crisis
Sheryl Gay Stolberg and Edmund L. Andrews, The New York Times

MESA, Ariz. — President Obama announced a plan on Wednesday to help as many as nine million American homeowners refinance their mortgages or avert foreclosure, saying that it would shore up housing prices, stabilize neighborhoods and slow a downward spiral that was “unraveling homeownership, the middle class and the American Dream itself.”

The plan, which was more ambitious and expensive than many housing analysts had expected, drew praise from consumer advocates as well as the financial industry.

Some Americans, Underwater but Ineligible, Are Riled Up
Nick Timiraos and Michael M. Phillips, The Wall Street Journal

President Barack Obama's new foreclosure-prevention plan is already sparking outrage from some Americans who won't qualify for federal aid -- and from those who resent having to foot the bill for those who do.

"What do you expect from the government?" said David Newton, 46 years old, proprietor of DJN Management LLC, which owns 232 rental apartments in the Atlanta area. "The government isn't out there to help people who obey the law and follow the rules."

Fed Leaders Issue Bleak Forecast
Neil Irwin and Annys Shin, The Washington Post

It could take years for the nation to fully bounce back from the recession, according to new projections by leaders of the Federal Reserve, who indicated that even once the economy starts expanding again, it will be an "unusually gradual and prolonged" recovery.

The unemployment rate will remain elevated through at least 2011, according to the policymakers' official forecast, released yesterday, and the economy this year could shrink by 1.3 percent. That would mark the sharpest contraction in 27 years.

Delinquent Borrowers Turn Increasingly to Litigation over Mitigation
Charles Winiowski, MBA NewsLink

TAMPA, Fla.--Mortgage servicers should expect increased state and federal litigation on servicing activities as borrowers and even state and local governments turning to increasingly sympathetic courts to resolve contractual conflicts and/or to disrupt the foreclosure process, analysts said.

Terry Hutchens, president of Hutchens, Senter & Britton, Fayetteville, N.C., told participants yesterday at the Mortgage Bankers Association's National Mortgage Servicing Conference and Expo that while lenders or mortgage servicing firms in the past might be given the benefit of the doubt in the event a home foreclosure case went to court, juries and judges in the current unfriendly judicial environment do not feel as inclined to cut mortgage firms or their attorneys any slack whatsoever.

Brokers: Commission rates holding up in Florida
Natalie Keith, Inman News

Whether they've had to take a cut in their commission percentage rate with the sale of a foreclosed home or saw a decrease in commission dollars per sale due to plummeting prices, many brokers throughout Florida have seen their income drop precipitously with weakened market conditions.
"People are trying to close sales any way they can," said Ellie Trahan, a broker with Golden Rule Real Estate in Ocala. "One of the first things that gets cut is the commission."

Obama's mortgage plan up against fast-rising defaults
Maura Reynolds, The Los Angeles Times

Reporting from Washington -- The housing plan unveiled by President Obama on Wednesday goes further than any previous effort to break the vicious cycle of declining home values, rising mortgage defaults and frozen credit that triggered the country's worst recession since the 1930s.

And it embraces strategies that attack the complex problems on several fronts but without requiring a long struggle in Congress.

We already own the banks -- shouldn't we run them?
Michael Hitzik, The Los Angeles Times

The worst thing about ideological sloganeering is that it obscures, rather than clarifies, the facts of a situation.

Exhibit A: The question of whether we should "nationalize" our crippled banks. To the political right, the very word smacks of the world of banana republics. To the left, it's just what those idiots on Wall Street deserve, and long overdue.