“[The adjustable rate bank note issued Aug. 4, 2004 is' hereby canceled, voided, nullified, set aside and is of no further force and effect . . . the lender and its successors are barred, prohibited and foreclosed from attempting, in any manner, directly or indirectly, to enforce any provision of" the mortgage loan." -Suffolk County Supreme Court Justice Jeffrey A. Spinner "We never asked for this. I was shocked, honestly. It's not like we said, 'Judge, please throw the loan away.' We just wanted them [the bank] to be reasonable.” -Greg Horoski, East Patchogue Home owner. > Here’s a fascinating development: A Long Island judge voided the mortgage of a home-owner after the legal team for the creditor behaved in an egregious manner. The lender lied in various dunning notices and court papers, claiming a balance due of $527,437.73, including an escrow overdraft of $46,627.88 for advanced taxes — even though the outstanding loan balance was $283,992.48 as of Aug. 10 and the taxes were already paid. Excerpt: A Suffolk judge awarded a Long Island family their East Patchogue house, wiping the slate clean on their mortgage debt and ruling that the bank holding their home loan had acted in a manner “so completely devoid of good faith that equity cannot be permitted to intervene on its behalf.” In a terse, no-holds-barred decision rendered Nov. 19, Suffolk County Supreme Court Justice Jeffrey A. Spinner blasted the actions of IndyMac Mortgage Services, a division of OneWest Bank F.S.B., and its representatives – and awarded the home to Diana J. Yano-Horoski and husband Greg Horoski. The decision came after a series of state-mandated, pre-foreclosure settlement conferences between the lenders and borrowers of subprime loans. Spinner wrote in his decision: “It was celeritously made clear to the Court that Plaintiff had no good faith intention whatsoever of resolving this matter in any manner other than a complete and forcible devolution of title...

Federal Reserve to run public service announcement with credit card tips for holiday shoppers

Buyers are likely to have many questions about their eligibility for the extended and expanded tax credits. Here are some key features.

Written By: Stacey Sprain, Certified Ambassador Loan Processor (CALP) which was issued November 18, 2009 communicates the immediate elimination of requirements for second appraisals on high balance loans in declining market areas. Second appraisals are no longer required effective for cases pulled on and after November 19th. As you may recall, second appraisal requirements were originally added for high balance loans in declining market areas with the issuance of which HUD now rescinds in its entirety. HUD has also rescinded the second appraisal requirements listed in which originally implemented second appraisal requirements for cash-out refinances exceeding $417000 loan amounts when the subject property was considered in an area of market decline. The only remaining second appraisal requirements apply for situations that fall under HUD’s Property Flipping Prohibition. These requirements were communicated in which states the following second appraisal requirements: • If the resale date is between 91 and 180 days following acquisition by the seller, the lender is required to obtain a second appraisal made by another appraiser if the resale price is 100 percent or more over the price paid by the seller when the property was acquired. • If the resale date is more than 90 days after the date of acquisition by the seller but before the end of the twelfth month following the date of acquisition, FHA reserves the right to require additional documentation from the lender to support the resale value if the resale price is 5 percent or greater than the lowest sales price of the property during the preceding 12 months. At FHA’s discretion, such documentation may include, but is not limited to, an appraisal from another appraiser. Underwriters are also allowed to use discretion and may require review appraisals to justify questionable value in certain circumstances. The important thing I always remind people in these situations is to always request an interior/exterior inspection...

by David Brauner, Editor The appraiser Valuation 2009 conference in New Orleans this month offered unprecedented access to key regulators, AMCs and other decision makers regarding the future of the appraisal industry- that’s the good news. The bad news is that you may not like what they are saying. Honchos from FHA, Fannie Mae, [...]

A little follow up to my post yesterday. I knew I'd probably upset the folks at Treasury, and I did.

Via , we get this map showing the states that contribute the most in Federal tax dollars, and consumes the most in Federal Tax monies: > click for ginormous chart > Hat tip

Like Tim Duy in the post above this one, David Altig is also puzzled by analysts who, to quote from the highlighted in Tim's post, that "banks might seek to reduce appreciably their excess reserves as the economy improves by purchasing securities or by easing credit standards and expanding their lending substantially": : In case you were just yesterday wondering if interest rates could get any lower, The Treasury sold $44 billion of two-year notes at a yield of 0.802 percent, the lowest on record, as demand for the safety of U.S. government securities surges going into year-end. "Demand for safety" is not the most bullish sounding phrase, and it is not intended to be. It does, in fact, reflect an important but oft-neglected interest rate fundamental: Adjusting for inflation and risk, interest rates are low when times are tough. ... The intuition behind this point really is pretty simple. When the economy is struggling ... the demand for loans sags. All else equal, interest rates fall. In the current environment, of course, that "all else equal" bit is tricky, but is informative: "In the October survey, domestic banks indicated that they continued to tighten standards and terms over the past three months on all major types of loans to businesses and households. ..." Demand also appears to be quite weak: "Demand for most major categories of loans at domestic banks reportedly continued to weaken, on balance, over the past three months." This economic fundamental is, in my opinion, a good way to make sense of the FOMC's most recent : The Committee… continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. Not everyone is buying my story, of course, and there is a growing global chorus of : Germany's new finance minister...

Half of the losses suffered by banks could still be hidden in their balance sheets, more so in Europe than in the United States, the International Monetary Fund's chief, Dominique Strauss-Kahn, told Le Figaro.

The DOL reports on weekly : In the week ending Nov. 21, the advance figure for seasonally adjusted initial claims was 466,000, a decrease of 35,000 from the previous week's revised figure of 501,000 [revised from 505,000]. The 4-week moving average was 496,500, a decrease of 16,500 from the previous week's revised average of 513,000. ... The advance number for seasonally adjusted insured unemployment during the week ending Nov. 14 was 5,423,000, a decrease of 190,000 from the preceding week's revised level of 5,613,000. Click on graph for larger image in new window. This graph shows the 4-week moving average of weekly claims since 1971. The four-week average of weekly unemployment claims decreased this week by 16,500 to 496,500. This is the lowest level since last November. This is good news - although the level is still high suggesting continuing job losses in November.

Here is the Q3 negative equity from First American CoreLogic mentioned last night. From the report: Negative equity, often referred to as “underwater” or “upside down,” means that borrowers owe more on their mortgage than their homes are worth. Data Highlights Nearly 10.7 million, or 23 percent, of all residential properties with mortgages were in negative equity as of September, 2009. An additional 2.3 million mortgages were approaching negative equity, meaning they had less than five percent equity. Together negative equity and near negative equity mortgages account for nearly 28 percent of all residential properties with a mortgage nationwide. The distribution of negative equity is heavily concentrated in five states: Nevada (65 percent), which had the highest percentage negative equity, followed by Arizona (48 percent), Florida (45 percent), Michigan (37 percent) and California (35 percent). Among the top five states, the average negative equity share was 40 percent, compared to 14 percent for the remaining states. In numerical terms, California (2.4 million) and Florida (2.0 million) had the largest number of negative equity mortgages accounting for 4.4 million or 42 percent of all negative equity loans Click on image for larger graph in new window. This graph shows the negative equity and near negative equity by state. Although the five states mentioned above have the largest percentgage of homeowners underwater, a number of other states have 20% or more homeowners with mortgages with little or negative equity. Note: Louisiana, Maine, Mississippi, South Dakota, Vermont, West Virginia and Wyoming are NA in the graph above. The second graph shows homeowners with severe negative equity for five states. These homeowners are far more likely to default. The rise in negative equity is closely tied to increases in pre-foreclosure activity. At one end of the spectrum, borrowers with equity tend to have very low default rates. At the other end, investors tend to default...

submits: The following is the second part of a 2-part series of posts on the future of the securitization business. To read Part I, which details a less rosy outlook for credit derivatives, go . It’s (semi-)official: securitization is making a comeback. Barring , most expect the securitization market to pick up rapidly in the next year or so, as evinced by the Federal Reserve’s of its mortgage-related assets purchase program.

submits: Inventory of single-family homes fell 136,000 units in October, but they remain oversupplied by 913,000 units when compared to the long-run average.