Economy Loses 85K Jobs in Dec., Unemployment at 10 Percent
Economy Loses 85K Jobs in Dec., Unemployment at 10 Percent
January 7, 2010, Washington Post
The nation shed 85,000 jobs in December, worse than expected, according to a government report released Friday that suggests the economic recovery still is too weak to lead employers to add to their payrolls. The unemployment rate was unchanged at 10 percent, the Labor Department said. Forecasters had expected zero net change in the number of jobs on U.S. payrolls, and some had had expected job growth to return. Those expectations were dashed by a report that — while not without bright spots — suggested that the long slog toward an improved labor market continued in December.
Walk Away From Your Mortgage!
January 7, 2010, New York Times
John Courson, president and C.E.O. of the Mortgage Bankers Association, recently told The Wall Street Journal that homeowners who default on their mortgages should think about the “message” they will send to “their family and their kids and their friends.” Courson was implying that homeowners — record numbers of whom continue to default — have a responsibility to make good. He wasn’t referring to the people who have no choice, who can’t afford their payments. He was speaking about the rising number of folks who are voluntarily choosing not to pay.
Fed Study Finds Principal Writedowns Minimize Risk of Redefault
January 5, 2010, DSNews.com
Servicers who lower distressed homeowners’ mortgage payments by reducing the principal balance, as opposed to just making interest rate adjustments, are much more likely to see the payments keep coming in and ward off a re-default, according to a new study published by the Federal Reserve Bank of New York. The economists found a definite pattern among modifications made since December 2005 that suggests “an intention among servicers to make the loans more affordable, while not losing any of the underlying principle.” However, their analysis shows that modifications that trim off some of the loan balance have higher rates of success and “can double the reduction in re-default rates.”
Fannie Mae Adopts New REO Policy
January 6, 2010, DSNews.com
In an effort to expedite REO sales, Fannie Mae has adopted a new policy. As part of this policy, Fannie Mae may accept offers to purchase homes it has repossessed without notifying loan servicers, and loan servicers may be required to reimburse Fannie Mae for a loss if it turns out the original mortgage on the home did not meet its eligibility or underwriting requirements, Inman News said Wednesday. Previously, if there was a question over whether a mortgage on a repossessed property met Fannie Mae’s requirements, servicers were given 15 days to turn over loan files for review. Rather than reimburse Fannie Mae for an incurred loss, loan servicers had the opportunity to try and find a better offer for the property or buy it themselves.