Bank of America failed to disclose losses

Bank of America disclosed a $15.3 billion loss after Merrill Lynch was acquired. They also disclosed a $20 billion bailout by the government. They then suffered a loss in stock price of more than $50 billion.

Stockholders are angered at the lack of disclosure, not to mention the stockholders’ losses, and the outcome of the shareholder lawsuit could hold officers personally liable.

According to the plaintiffs, who include the Ohio Public Employees Retirement System and a Netherlands pension plan that is the second-largest in Europe, Bank of America’s senior management, including Mr. Lewis and Mr. Price, began to learn of large losses at Merrill Lynch in early November 2008, months before the deal closed.”

Read the full account in Dealbook

$50 Billion Claim Possible against Bank of America is a post from: Mortgage Money Updates by Traci Gregory

BOA to Eliminate 30,000 Jobs is a post from: Mortgage Money Updates by Traci Gregory

RETRACTED:

Three Notices for FHA Lenders

1. Beginning Monday, September 12, 2011, lenders will no longer be able to order a streamline refinance case with an appraisal. The only available streamline refinance case type will be streamline without appraisal. A prior FHA refinance case with appraisal should be ordered as a fully processed Prior FHA case with an appraisal
2. Beginning Monday, September 12, 2011, for Streamline Refinances cases without an appraisal, when a prior FHA refinance case is netted to a new case number, the outstanding principal balance for the projected month of closing and the following month will automatically be provided in FHA Connection. These fields will appear on the Case Number Assignment screen when the case number is assigned. They will also appear on Refinance Authorization and Refinance Credit Query. The values will be used to limit the entry in the Unpaid Principal Balance field on FHAC Insurance Application for FHA to FHA refinance cases. The Unpaid Principal Balance amount is used to determine the maximum mortgage allowed for the case. For this reason, it is very important that the lender enter an accurate projected closing date. If they find the entered closing date is no longer accurate, they should correct it, prior to remitting UFMIP, using FHAC Refinance Authorization to obtain a new outstanding principal balance from A43 before processing Insurance Application
3. Due to Lenders asking if the 15,000+ list of sponsored originators and associated data can be made available for downloading to Excel, the data collection and transfer of the Sponsored Originator data is being released in preparation for the September 19, 2011 release of a revised Sponsored Originator List Screen that will provide a link to download this data in Excel. This release will provide the data but lenders will not have access to it until September 19, 2011 when the FHAC release is implemented. …”

FHA Retracts 3 Mortgagee Letters is a post from: Mortgage Money Updates by Traci Gregory

Big Dogs to admit they inadequately disclosed risk

Fannie Mae and Freddie Mac are said to be nearing settlement with the SEC on the charge that they inadequately disclosed their exposure to high risk subprime loans.

According to Dealbook, the settlement is said to

include no monetary penalty, or admission of fraud, but according to Dealbook would represent the most significant acknowledgement by the mortgage finance companies that they played a central role in the housing boom and bust.”

Read it in full at Dealbook

Fannie & Freddie near Settlement with the SEC is a post from: Mortgage Money Updates by Traci Gregory

Do You ever Recover the Cost of Remodeling?

Every year Remodeling magazine looks at what’s hot in renovations to calculate how much owners get back from it when they sell their homes.

Sal Alfano, editorial director for Remodeling

Upkeep is more popular than upgrades these days. These are the projects that often recoup the biggest slice of expenses at resale. But prices and returns do vary regionally.”

The lowest return comes from high-end personalized renovations:

• specialized garages
• adding a master suite
• a too personalized library or home office

The six worst choices for return on the your dollare are:

1. A home office with built in storage and high-tech wiring – average cost is $28,K and returns about 45.8% on resale.
2. A backup generator (I’d have never thought of this one!) – average cost is $14,000 and you’ll recover about 48% on resale.
3. Sunroom Addition – high dollar: $75,000, and you can expect to recover 48%.
4. Palatial Master suite – a whopping $232,000 is the average cost in the US . . . you’ll get back about 52%.  (You should have just bought an investment property with that money!)
5. Adding a bathroom – a paltry $21,00, but the you could spend as much as $40,000.  Let your guests line up at the bathrooms you’ve got, the return is 53%.
6. Tricking out your garage: $90,000, with a recovery of about 53%.  Everyone doesn’t want Jay Leno quality in their garage . . .

Get the full report at Remodeling Magazine

Remodeling: Does it pay for itself when you sell your house? is a post from: Mortgage Money Updates by Traci Gregory

The Feds are preparing lawsuits against a dozen or so big banks,

accusing them of misrepresenting the quality of mortgage securities they assembled and sold at the height of the housing bubble, and seeking billions of dollars in compensation.The Federal Housing Finance Agency suits, which are expected to be filed in the coming days in federal court, are aimed at Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank, among others, according to three individuals briefed on the matter.”

The finance agency issued subpoenas to banks more than a year ago and they were the precursor to these lawsuits.

Read more at The New York Times

United States prepares to Sue Big Banks Over Mortgages is a post from: Mortgage Money Updates by Traci Gregory

Like GMAC and JPMorgan Chase, The New York Times reports that BOA is “reviewing documents in all foreclosure cases now in court”.

Bank of America intends to “amend all affidavits in foreclosure cases that have not gone to judgement.” What this means is that tens of thousands of foreclosure cases would stall in the system for months, and if homeowners hire lawyers to muck it up (and wouldn’t you?), they could remain stalled for years. Chase announced it has frozen 56,000 foreclosures, GMAC declines to announce the number in its stop-work stack.

Apparently all these banks are really just servicers (they collect the payments, send delinquent notices, etc. and Fannie Mae and Freddie Mac actually own the loans).  They are equipped to take the payments, but aren’t staffed to do a proper foreclosure.  Even so, they are all signing thousands of foreclosure notices monthly that they have “personal” knowledge of the facts,when in fact they couldn’t possibly. They barely have time to read each file before signing the foreclosure order.

LPS Applied Analytics, a mortgage data firm, reports that 2 million households are in foreclosure, and another 2.37 million households are far enough behind to expect foreclosure action from their lenders.

Florida attorney, Mark Stopa, who works for homeowners in foreclosure, said the “magnitude of the current troubles depends on how title insurance companies react. If those firms begin to shy away from insuring foreclosed properties because they think those properties are vulnerable to claims, the entire housing market could suffer.”

Title Insurer Old Republic National Title has stopped issuing policies on GMAC foreclosures until further notice. It will be interesting to see how soon they do the same for BOA, and JPMorganChase.

Read the full article at the New York Times . . .

Bank of America Freezes Foreclosures is a post from: Mortgage Money Updates by Traci Gregory

Zillow reported yesterday that as many as one third of Americans can’t qualify for home mortgages.

Credit scores under 620 won’t qualify for 30-year mortgages even with down payments as high as 25 percent. The say that 29.3% of Americans have a credit score of 620 or less.

They also report that 47% of Americans have a score over 720, which does qualify them for a mortgage.

Interesting that they think credit scores are that high, because in my line of work, 720 has always been a golden credit score, that not a lot of people actually achieved. So much so that I’m writing a book on how to attain it!

Look for it in the next couple of months:

Read more at the HuffPost

Twenty nine percent of Americans don’t qualify for a mortgage is a post from: Mortgage Money Updates by Traci Gregory

The average 30-year fixed mortgage rate in California, as reported by Zillow Mortgage Marketplace is currently at 4.25 percent, down seven basis points from 4.32. This is the lowest rate reported (surprise) since Zillow Mortgage Marketplace went online in 2008.

The rates Zillow reports are real-time mortgage rates based on mortgage quotes submitted daily by anonymous borrowers on their site, and should reflect the most current market changes, as they are not marketing rates.

To check rates in your state, visit Zillow.

Zillow’s Mortgage Marketplace Rates is a post from: Mortgage Money Updates by Traci Gregory