How One City May Punish Banks for Foreclosures

How One City May Punish Banks for Foreclosures
August 24, 2009, TIME Magazine

It's hard to drive down a residential street in Miami Gardens, Fla., and not see two, three, four houses in foreclosure. Some have been on the auction block since last year, once handsome, pastel-colored ranch houses now surrounded by waist-high weeds or boarded-up windows. Andre Williams, a Harvard-educated real estate attorney and Miami Gardens city councilman, has proposed a city ordinance that could penalize banks that fail to offer modifications before starting foreclosure proceedings. Local governments have no formal legal oversight over banks; but under Williams' ordinance, if a lender's number of foreclosure actions in Miami Gardens over a designated period exceeds the number of loan modifications it offers financially burdened or delinquent homeowners, the city will pull its accounts or other business from that bank.

Home Prices Rose in Second Quarter
August 24, 2009, Wall Street Journal

U.S. home prices rose in the second quarter for the first time in three years while logging a second-straight monthly increase in June, according to the S&P Case-Shiller home-price indexes. For the second quarter, the S&P Case-Shiller U.S. National Home Price Index posted a 14.9% drop from a year earlier, an improvement over the record 19.1% drop in the first quarter. It was up 2.9% sequentially.

California Mortgage Delinquencies Expected to Rise Through 2009
August 24, 2009, Los Angeles Times

Mortgage delinquencies will continue to rise and set records the rest of this year in California, according to projections to be released today by TransUnion, one of the three big U.S. credit-reporting companies. TransUnion expects the percentage of California home loans that are at least 60 days late or are in foreclosure to skyrocket to more than 14 percent by year-end.

Fewer Catching Up on Lapsed Mortgages
August 24, 2009, Wall Street Journal

Homeowners who fall behind on their mortgage payments have become much less likely to catch up again, a new study shows The report from Fitch Ratings Ltd., a credit-rating firm, focuses on a plunge in the "cure rate" for mortgages that were packaged into securities. The study excludes loans guaranteed by government-backed agencies as well as those that weren't bundled into securities. The cure rate is the portion of delinquent loans that return to current payment status each month.

Analyst Bove Sees 150-200 More U.S. Bank Failures
August 20, 2009, Reuters

A prominent banking analyst said on Sunday that 150 to 200 more U.S. banks will fail in the current banking crisis, and the industry's payments to keep the Federal Deposit Insurance Corp afloat could eat up 25 percent of pretax income in 2010. Richard Bove of Rochdale Securities said this will likely force the FDIC, which insures deposits, to turn increasingly to non-U.S. banks and private equity funds to shore up the banking system. Bove said "perhaps another 150 to 200 banks will fail," on top of 81 so far in 2009, adding stress to the FDIC's deposit insurance fund.