Milwaukee Bank Extends Foreclosure Moritorium

Marshall & Ilsley Corporation (NYSE: MI) (M&I) today announced it has extended its foreclosure moratorium for distressed homeowners through March 31, 2011. The initial moratorium was announced on December 18, 2008, as part of M&I’s Homeowner Assistance Program. The moratorium is on all owner-occupied residential loans for customers who agree to work in good faith to reach a successful repayment agreement. The moratorium applies to applicable loans in all M&I markets.

M&I’s Homeowner Assistance Program also features streamlined assistance programs for potentially distressed homeowners who are identified in advance and proactively offered assistance. It also offers a foreclosure abatement program that features several refinancing options, including term extensions and reduced rates that can be used, as necessary and applicable, to reduce monthly payments.

In addition, M&I continues to extend new credit to new and existing customers. Since the infusion of capital from the U.S. Treasury in mid-November 2008 through November 30, 2010, M&I has extended over $10.3 billion of new credit. (The “new credit” amount includes new and expanded extensions of credit, or commitments to extend credit, as well as renewals of existing credit where a new promissory note was executed.)

Marshall & Ilsley Corporation (NYSE: MI) is a diversified financial services corporation headquartered in Milwaukee, Wis., with $51.9 billion in assets. Founded in 1847, M&I Marshall & Ilsley Bank is the largest Wisconsin-based bank, with 192 offices throughout the state. In addition, M&I has 53 locations throughout Arizona; 36 offices along Florida’s west coast and in central Florida; 33 offices in Indianapolis and nearby communities; 26 offices in metropolitan Minneapolis/St. Paul, and one in Duluth, Minn.; 17 offices in the greater St. Louis area; 15 offices in Kansas City and nearby communities; and one office in Las Vegas, Nev. M&I also provides trust and investment management, equipment leasing, mortgage banking, asset-based lending, financial planning, investments, and insurance services from offices throughout the country and on the Internet (www.mibank.com or www.micorp.com).

On December 17, 2010, M&I entered into a definitive agreement under which BMO FinancialGroupwill acquire all outstanding shares of common stock of M&I in a stock-for-stock transaction. Under the terms of the agreement, each outstanding share of M&I will be exchanged for 0.1257 shares of Bank of Montreal upon closing.The transaction is expected to close prior to July 31, 2011. The transaction is subject to customary closing conditions, including regulatory approvals and approval from shareholders of M&I.

SOURCE Marshall & Ilsley Corporation

House Repossessions On The Rise In 2011

According to CLM (Council of Mortgage Lenders), housing sales may only hit around the 860,000 mark in the coming year – which is a drop on the 1.6 million sales that accrued in the year before the recession kicked in. It’s the likely consequence of house repossessions experiencing another rise in 2011. Figures are showing that as many as 180,000 home owners may well fall behind with their mortgage repayments as the New Year wears on.

There’s worry among housing market professionals that lenders are hiding their own fears about further weakening in the housing sector – despite the figures above showing an entirely different picture. The CML believes that repossessions in the UK will hit around the 40k level, a slight rise in figures in comparison to 2010 – which will settle at around 36,00.

However, there are others that genuinely believe that the market may remain a bit more buoyant – providing certain key factors are brought into play:

  • interest rates remain low
  • job losses don’t increase

Unfortunately, with the current shake-up going on in the coalition, spending cuts, job cut-backs and more, that may become more of a pipe dream than a reality. Still – there’s little or no evidence of lenders tightening up in the last quarter of 2010, which is a positive sign, and it’s unlikely that new changes will deliver more shocks into the system than we’re currently aware of.

Providing Government cuts don’t hit mortgage rescue schemes and other funded nationwide repossession aid, more home owners will avoid house reposessions than won’t. The simple answer to the potential changes in 2011 is this: if you’re sat worried or concerned about what the next twelve months will bring to your door – now is the time to evaluate.

If you’re already experiencing difficulties, or know your job may be under threat, it’s advisable that you act sooner rather than later. House repossession orders don’t occur overnight and providing you plan, seek guidance and professional help – you may be able to head off the loss of your home.

Happy New Year. Hopefully.

Foreclosures Reaching Record Highs – Again

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Despite assurances from the Government that there are safeguards in place, foreclosures continue to rise. Even the recent housing scorecard released in December admitted that “much work remains to be done,”  and the Q3 news is generally not good for those under water.

According to  The Republican, Springfield, Mass reported the highest number of completed mortgage foreclosures of any city for the first 11 months of the year, with 575 foreclosures deeds filed, up almost 24% from 2009, although the number of foreclosure starts decreased thanks to a moratorium in the last few months of the year. Whether the HUD “Emergency Homeowner Loan Program,” that is due to begin in March will have an effect is still up in the air – if it is as well implemented as previous initiatives – unlikely.

According to the Office of the Comptroller of the Currency (Ensuring a Safe and Sound National Banking System for all Americans), the number of new foreclosures increased to more than 382,000 in Q3 2010. This is the full release:

The credit quality of first-lien mortgages serviced by large national banks and thrifts remained steady during the third quarter of 2010, but the pace of foreclosures increased, according to a report released today.

The quarterly report by the Office of the Comptroller of the Currency and the Office of Thrift Supervision showed that 87.4 percent of the 33.3 million loans in the portfolio were current and performing at the end of the third quarter of 2010, a level unchanged from the previous quarter.

Although the percentage of seriously delinquent mortgages (60 or more days delinquent or delinquent loans to bankrupt borrowers) decreased by 6.4 percent from the previous quarter, the percentage of mortgages that were 30 to 59 days delinquent increased by 4.3 percent.

Foreclosures increased during the third quarter, reflecting the large number of seriously delinquent borrowers moving through the foreclosure process after servicers exhausted home retention options.

The number of new foreclosures increased to more than 382,000—31.2 percent more than in the previous quarter and 3.7 percent more than a year earlier.  The number of foreclosures in process increased to 1.2 million—4.5 percent more than in the previous quarter and 10.1 percent more than a year earlier.  The number of completed foreclosures also increased to nearly 187,000—14.7 percent more than in the previous quarter and 57.5 percent more than a year earlier.

Although foreclosure activity increased during the quarter, servicers reported almost twice as many home retention actions as completed home forfeiture actions.  Servicers implemented 470,321 home retention actions—loan modifications, trial period plans, and shorter term payment plans—compared with 244,840 home forfeiture actions.

During the past five quarters, servicers initiated nearly 3 million home retention actions—about 987,000 modifications, 1.3 million trial period plans, and 673,000 payment plans.  Home retention actions declined 17 percent from the prior quarter, driven by decreases in modifications and trial period plans under the Home Affordable Modification Program (HAMP).

For the first time, the report provided mortgage modification data by state.  Nine new tables of information include the number and percentage of HAMP modifications and other modifications in each state during the third quarter, the number and percentage of each type of action included in modifications, and the number and percentage of modifications broken down by how the modifications affected borrowers’ monthly principal and interest payments.

Other key findings of the report included:

  • Modifications that significantly reduced borrowers’ monthly payments continued to perform better than modifications that increased payments or left them unchanged.  More than 88 percent of modifications implemented during the third quarter decreased monthly principal and interest payments.  More than 54 percent of those modifications reduced payments by 20 percent or more.  On average, modifications during the third quarter reduced borrowers’ monthly principal and interest payments by $396.  HAMP modifications reduced payments by an average of $585, compared with a payment reduction of $332 from other modifications.
  • More recent modifications that emphasized sustainability and affordability continued to outperform modifications implemented earlier.  At six months after modification, 20.2 percent of the modifications made in the fourth quarter of 2009 were seriously delinquent, compared with 33.5 percent of modifications made during the second quarter of 2009.

The report covers about 64 percent of all first-lien mortgages in the country, worth $5.8 trillion in outstanding balances.  The complete report can be downloaded here

The figures are actually quite shocking when one considers not only the sheer volumes of foreclosures, but the fact that the bulk of new foreclosures and foreclosures in process are now “prime” mortgages, not the poison pill “Alt-A” or “sub-primes.”

In amongst a staggering amount of statistics and figures, a few things stand out. Certainly the backlog continues to grow, throwing extreme doubt on the balance sheets of any banks holding large amounts of mortgages and the problem seems to be growing, not shrinking.

Sources -

Obama Administration Releases December Housing Scorecard

The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today released the December edition of the Obama Administration’s Housing Scorecard.  The latest housing figures show continued home affordability in the housing market, with interest rates near record lows, but the market remains fragile, as prices are unsettled. Foreclosure starts and completions dropped significantly in November, as lenders review internal servicing procedures.  The housing scorecard is a comprehensive report on the nation’s housing market.

“The Obama Administration’s broad set of programs have helped promote stability for the housing market, neighborhoods, and the nation’s homeowners, but there is much more work to be done,” said HUD Assistant Secretary Raphael Bostic. “Since taking office in 2009, the Administration’s efforts have helped millions families stay in their homes and helped millions more refinance, but the data clearly show that the market remains extremely fragile. That’s why we’re continuing to focus on successfully implementing the programs we’ve put in place – such as additional refinancing assistance and emergency loans to help unemployed homeowners – and ensuring that help is available to homeowners as early as possible.”

“While much work remains to be done to help families that have been hurt by this crisis, the Administration’s programs have benefitted many homeowners directly while setting standards for the entire industry,” said acting Assistant Secretary for Financial Stability Tim Massad. “This is a major reason why there have been more than twice as many modifications and other foreclosure alternatives as foreclosure completions since April 2009.”

The December Housing Scorecard features key data on the health of the housing market including:

  • Foreclosure starts and completions dropped significantly in November. As lenders review internal procedures related to foreclosure processing, many foreclosure actions have been delayed leading to a 21 percent drop in foreclosure activity in November. While this is the biggest month over month decrease since 2005, the decline is likely to be temporary as lenders eventually revise and resubmit foreclosure paperwork in the coming months.
  • As expected with the expiration of the Homebuyer Tax Credit, new and existing home sales have remained below levels seen in the first half of 2010. However, this month’s report also shows that home prices and home equity declined moderately, as prices remain unsettled at this fragile stage of the recovery.
  • More than 3.9 million mortgage aid offers were initiated between April 2009 and the end of October 2010 —more than double the number of foreclosure completions during that time. These actions included over  1.4 million Home Affordable Modification Program (HAMP) trial modification starts, more than 600,000 Federal Housing Administration (FHA) loss mitigation and early delinquency interventions, and nearly 1.8 million proprietary modifications under HOPE Now. While some homeowners may have received help from more than one program, the number of agreements offered were more than double the number of foreclosure completions for the same period (1.7 million). To view the November HAMP Servicer Performance Report, visit:  http://www.financialstability.gov/docs/Nov%202010%20MHA%20Report.pdf.

Data in the scorecard also show that the recovery in the housing market continues to remain fragile. While the recovery will take place over time, the Administration remains committed to its efforts to prevent avoidable foreclosures and stabilize the housing market.

Each month, the Housing Scorecard incorporates key housing market indicators and highlights the impact of the Administration’s unprecedented housing recovery efforts, including assistance to homeowners through the FHA and HAMP. The Obama Administration’s complete Housing Scorecard is available HERE.

REPORTING NOTE: Beginning in 2011, the HAMP Monthly Servicer Performance Report will be released at the beginning of each month to align all program reporting.  The next Housing Scorecard and HAMP Report will be issued jointly on or about February 1, 2011.

Cambridge Realty Capital Arranges $15.3 Million HUD Loan to Finance Nursing Facility in Illinois

ottawa-front-rendering

Cambridge Realty Capital Companies reports closing on a $15.3 million loan to provide new construction and permanent financing for Ottawa Pavilion, a 129-bed skilled care nursing home in Ottawa, Ill.

Cambridge Chairman Jeffrey A. Davis said the 40-year term loan was arranged for the owner, an Illinois limited liability company, by Cambridge Realty Capital Ltd. of Illinois, the Cambridge business that underwrites FHA-insured HUD loans. The fully-amortized loan was processed using HUD’s Section 232 funding program. The interest rate was not disclosed.

Cambridge is the creator of The Signature Experience™, a four-step process designed to transform the traditional lender/borrower relationship and identify “ideal” capital solutions for worthy projects. The company has a national origination office in Los Angeles, and numerous correspondent and brokerage relationships nationwide.

Cambridge publishes the bi-monthly e-PULSE!(R) electronic newsletter, which delivers company news and feature stories via e-mail to corporate friends and clients. Additional information is available on the Cambridge website, www.cambridgecap.com, and Cambridge can be reached at (312) 357-1601 or via e-mail to info@cambridgecap.com.

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HUD To Investigate Allegations of Discrimination

The U.S. Department of Housing and Urban Development announced today that it is launching multiple investigations into the practices of certain mortgage lenders to determine if their home loan policies illegally deny qualified African American and Latino borrowers access to credit.

The investigations are in response to 22 complaints the National Community Reinvestment Coalition (NCRC) filed with HUD alleging that the loan activities of the mortgage originators showed that their home lending practices deny FHA- insured loans to African Americans and Latinos with credit scores as high as 640. Federal Housing Administration (FHA) guidelines allow mortgages to borrowers with credit scores above 580, provided the borrowers have down payments equaling 3.5 percent of the loan amount, or above 500, provided the borrowers have down payments equaling 10 percent of the loan amount.

“FHA is an important vehicle for Americans who want to purchase or refinance a home. We thank NCRC for bringing these complaints to HUD. For lenders to deny responsible home seekers this source of credit, without regard for their capacity to repay the loans,  would raise serious fair housing concerns and, if proven, undermine our nation’s recovery efforts,” said HUD Assistant Secretary for Fair Housing and Equal Opportunity John Trasviña. “HUD will take appropriate action against any lender found to be engaging in discriminatory practices.”

Prior to the recent downturn in the economy, FHA-insured mortgages comprised less than three percent of new home loans. Since the economic crisis, FHA and the Government-Sponsored Enterprises have insured or guaranteed nearly 95 percent of new mortgage loans being originated. By the end of 2008, almost half of new home purchase loans and one quarter of new refinance loans were FHA or Veterans Administration (VA) insured.

According to NCRC, an association of more than 600 community-based organizations that promote access to basic banking services, their fair lending “testers” evaluated the practices of national lenders, financial services corporations, and other regional and local FHA-approved lenders. In the complaints filed on December 7, NCRC states that lenders were chosen according to their market share and volume of FHA loans, as well as through discussions with community leaders.

Under the Fair Housing Act, HUD impartially investigates allegations of housing discrimination and, during every phase of investigations, attempts to settle complaints through conciliation efforts.

FHA was created in 1934 and currently insures more than 6.5 million single family loans.  80 percent of loans insured by FHA in 2010 were to first-time homebuyers and more than 30 percent of home purchase loans were to minority homebuyers.

FHEO and its partners in the Fair Housing Assistance Program investigate more than 10,000 housing discrimination complaints annually. People who believe they are the victims of housing discrimination should contact HUD at 1-800-669-9777 (voice), 800-927-9275 (TTY).