BofA Reduces $4.75B in Principal in 5 Months

Here’s an update on the National Mortgage Settlement Act and what Bank of America has completed so far.

As seen on dsnews.com

As part of the agreement under the national mortgage settlement, Bank of America has completed or approved more than $4.75 billion in principal reductions on first mortgages, with the average principal reduction exceeding $150,000.

Through the bank’s principal reduction program, 30,000 homeowners have been approved for a trial modification or received a permanent modification as of the end of September.

The $25 billion national mortgage settlement was reached in February between state and federal officials and the five largest mortgage servicers.

BofA said it’s on its way to meet the obligations under the settlement within the first year of the three-year agreement. BofA agreed to provide more than $7.6 billion in relief through first and second lien modifications and foreclosure prevention solutions.

However, BofA explained that under the agreement, banks will not receive full dollar-for-dollar credit for all of the assistance provided to customers, and the settlement monitor will make the crediting determinations.

According to a BofA release, borrowers who qualified for the program saved an average of 35 percent on their monthly mortgage payment.

The bank also expects to reach out to 200,000 eligible customers within the first year of the program.

Click here for article.

Expiring Mortgage Debt Relief Act Fuels Strategic Default: Survey

As seen in DSNEWS.com

A foreclosure prevention agency found that the pending expiration of the Mortgage Debt Relief Act of 2007 is prompting struggling homeowners to strategically default on their loan.

YouWalkAway.com conducted a national survey and found 34 percent of respondents indicated that the act, which is set to expire December 31, 2012, contributed to their decision to walk away sooner rather than later from their property. Those surveyed were YouWalkAway.com clients who were actively considering or navigating through the foreclosure process.

The Mortgage Debt Relief Act releases homeowners from the obligation of paying taxes on mortgage debt forgiven from a short sale, foreclosure, or modification. Taxpayers are eligible if the property is the primary residence.

For entire article click here

California Home Prices Going Up, Inventory Down, C.A.R. Reports

As seen in DSNEWS.com

After 16 months of year-over-year declines, median home prices in California posted a gain, according to the California Association of Realtors.).

The median price of a single-family home for March 2012 was $291,080, a 1.6 percent increase compared to a revised $286,550 for March 2011, and a 9.2 percent increase compared to February’s median price of $266,660. The month-over-month increase was the largest since March 2004.

When breaking up prices by specific regions, the San Francisco Bay area was an exception, seeing a year-over-year decrease of 1.6 percent, but a 9.1 percent month-over-month increase.

“In areas, such as Los Angeles and Riverside counties, where the Federal Housing Finance Agency (FHFA) wants to implement the REO bulk sale pilot program, inventory is running at levels well below the long-run average,” said C.A.R.

For the full article click here.

BofA Makes Changes to Trim Short Sale Timeline

As seen in DSNEWS.com

Bank of America is making changes to its short sale procedures and introducing an improved task flow within the short sale technology module from Equator, BofA’s short sale management platform of choice. The goal: to reduce the timeframe for a short sale decision to less than three weeks.

Starting Saturday, April 14, real estate professionals working with BofA will be required to submit five documents for short sales initiated with an offer:

The acknowledgement and disclosure form, short sale addendum, and the form for third-party authorization are available through the company’s online Agent Resource Center.

For the full article click here.

BofA to Offer Principal Reductions of More than $100K

As seen in DSNEWS.COM

Some Bank of America borrowers may be in for principal reductions in amounts exceeding $100,000, according to the latest developments in the settlement the bank and four other large servicers made with state and federal regulators.

Of the five servicers participating in the settlement, BofA is set to pay the largest portion of the total $25 billion settlement. The bank will pay $3.24 billion to the government and $8.58 billion to borrowers.

Of BofA’s total, $1 billion is part of a separate settlement regarding loan origination issues for Countrywide, which BofA acquired in 2008.

While the other four servicers in the national settlement are being required to diminish principal so underwater borrowers have loan-to-value ratios of 120 percent or less, BofA will be reducing principal for about 200,000 homeowners to fall in line with current market values.

For some deeply underwater borrowers, this may result in reductions of more than $100,000.

The expanded principal reductions may prevent BofA from paying $850 million in penalties, according to the Wall Street Journal.

Fitch Ratings responded to the news stating that the 200,000 principal reductions will be “neutral to negative for some RMBS bondholders and potentially beneficial for the bank.”

Fitch suggests the loans most likely to qualify for the extended principal reductions will be those originated between 2005 and 2007.

“Because the bank has already reserved for penalties, any reversals could help BAC’s income going forward,” Fitch stated. “While the agreement will help the bank reduce the amount of penalties it owes over time, the aggregate best case benefit is moderate from a financial perspective.”

Click here for entire article

Report Reveals Delinquency and Foreclosure Rates Down, U.S. Halfway to Pre-Recession Days

As seen in: dsnews.com

A recent Mortgage Banks Association (MBA) report revealed that overall, delinquencies and foreclosures are on a decline, and when gauging where the U.S. housing market stands in terms of recovery, Jay Brinkmann, MBA’s chief economist and SVP for research and education, said we are about halfway to the pre-recession days.

The MBA released its 2011 4th quarter national delinquency survey results Thursday. Delinquency in the report is defined as loans that are at least one payment past due but not in the process of foreclosure.

Overall, the delinquency rate for mortgage loans on one-to-four unit residential properties decreased to 7.58 percent, compared to 7.99 percent for the third quarter, and 8.25 percent a year ago during the fourth quarter in 2010.

For the full article click here