More walk away from homes, mortgages

More walk away from homes, mortgages
USA Today

When Sharon Sakson was laid off recently from her job as a television writer and producer, she burned through her savings to pay the $2,400 monthly mortgage on her home. But she soon decided it didn't make sense: Her home was worth thousands less than the mortgage she carried on it.

The home had been appraised at $390,000 when she refinanced in 2006, but she estimates it's not worth the $320,000 it initially cost in 2004. So Sakson did what a growing number of homeowners are doing today: She stopped paying and decided to let the bank take her home.

September pending home sales rise 6.1 percent
Associated Press

WASHINGTON — The volume of signed contracts to buy previously occupied homes rose for the eighth straight month in September as buyers scrambled to take advantage of a tax credit for first-time owners that expires at the end of this month.

The National Association of Realtors said Monday its seasonally adjusted index of sales agreements rose 6.1 percent from August to 110.1. It was the highest reading since December 2006 and more than 21 percent above a year ago. Economists surveyed by Thomson Reuters expected the index would be level at 103.8.

California AG Calls on Lenders to Outline Option ARM Modification Plans
DSNews

California’s attorney general asked 10 leading mortgage lenders to detail their plans for modifying option adjustable-rate mortgages (ARMs), warning that the state will be the epicenter for a new wave of foreclosures as these loans reset in the coming years.

“Homeowners with pay option ARMs are sitting on ticking time bombs that the lending industry has the power to defuse,” Attorney General Jerry Brown said. “Unless these banks and loan servicers act quickly, hundreds of thousands of mortgages will reset across the state, creating a new wave of foreclosures.”

When Bad Banks Sink Good Ones
The Wall Street Journal

Citizens National Bank, of Teague, Texas, eked out a small profit in the third quarter and was well-capitalized by industry standards.

It failed anyway. Regulators seized the one-branch bank on Friday along with eight other financial institutions owned by FBOP Corp., a bank-holding company in Oak Park, Ill., that was on the ropes for months.

Five Reasons the U.S. Doesn't Need More Home-Buyer Perks
The Wall Street Journal

Congress is working on a new and even more generous set of perks for house buyers. A tentative deal in the U.S. Senate would extend the closing deadline for an $8,000 subsidy for first-time buyers to July 1 from Nov. 30. It would also boost the program's income limits for singles to $125,000 from $75,000 and for couples to $250,000 from $150,000, and would offer a new $6,500 reward for existing homeowners who buy again.

The National Association of Realtors has called such an extension "essential." The Mortgage Bankers Association agrees. The National Association of Home Builders says, "Failure to act now could derail the fragile housing recovery even before it has time to take root."