Moratorium on Bank of America Foreclosures

Here is an article I read today on DSnews.com, Bank of America is now the fourth bank nationwide to place a moratorium on their foreclosures:


UPDATED to include PNC Financial’s reported foreclosure freeze and impending joint investigation of 40 states into servicers’ foreclosure procedures. The nation’s largest mortgage lender, Bank of America announced Friday that it is expanding its foreclosure moratorium from 23 states, as announced by the bank last week, to include all 50 states. The company explained in a statement, “Bank of America has extended our review of foreclosure documents to all fifty states. We will stop foreclosure sales until our assessment has been satisfactorily completed.” The company added, “Our ongoing assessment shows the basis for foreclosure decisions is accurate. We continue to serve the interests of our customers, investors, and communities. Providing solutions for distressed homeowners remains our primary focus.” BofA called for a halt on foreclosures in certain states when evidence surfaced that its internal staff may not have followed the letter of the law in reviewing and processing case paperwork. Such actions were spelled out in black and white when the Associated Press uncovered court documents with testimony from one of BofA’s top executives at a bankruptcy hearing in February. The exec admitted that she signed off on 7,000 to 8,000 foreclosure documents a month without even reading them or verifying their legitimacy. Incidences of so-called “robo-signers” that have been blindly rubber-stamping approvals of foreclosure actions because of the sheer volume of cases landing on their desks has led to foreclosure suspensions by now, three other big lenders – and some in the industry warn that the problem could be even more widespread. On September 20th, GMAC Mortgage was the first to halt foreclosures in 23 judicial states due to what it called an “internal procedural error.” JPMorgan Chase followed suit on September 30th. PNC Financial reportedly notified its industry partners that it is suspending foreclosures for 30 days in the judicial states while it reviews servicing procedures. Consumer advocacy groups, state attorneys general, and federal lawmakers are all calling for a nationwide foreclosure freeze until the banks can clear up the paperwork issues in question. Senate Majority Leader Harry Reid (D-Nevada) said he welcomed the decision announced by Bank of America to expand its foreclosure moratorium. “I thank Bank of America for doing the right thing by suspending actions on foreclosures while this investigation runs its course,” Sen. Reid said in a statement. “It is only fair … to suspend foreclosures until a thorough review of foreclosure processes is completed and homeowners can be assured that their documents are being analyzed properly. I urge other major mortgage servicers to consider expanding the area where they have halted foreclosures to all 50 states as well.” Members of Congress from both parties are petitioning for a federal investigation of mortgage servicers that have instituted foreclosure suspensions. An announcement is expected to come as early as Tuesday of a joint investigation by attorney general offices in as many as 40 states. Bloomberg reports that the coordinated effort will be led by Iowa Attorney General Tom Miller.

http://www.dsnews.com/articles/bank-of-america-halts-foreclosures-nationwide-2010-10-08

Today's Mortgage Rate... Lower Than Yesterday's

Here is an article I read on DSNews today. These new figures from Freddie Mac are stunning. With rates already at their lowest in over a half of a century, one has to wonder how low will they go? Here is the article:

How low can we go? When it comes to mortgage rates, the floor keeps dropping. Industry reports released Thursday show that interest rates for home loans – already at their lowest marks in more than a half-century – dropped again this week.

Market analysis conducted by Freddie Mac found that the 30-year fixed-rate mortgage (FRM) averaged 4.32 percent (0.8 point) for the week ending September 30, 2010. That’s down from 4.37 percent last week and tied with the all-time low in Freddie’s survey set four weeks ago.

The GSE reported that the 15-year FRM this week averaged a new record low of 3.75 percent (0.7 point). Last week, it came in at 3.82 percent.

The 5-year adjustable-rate mortgage (ARM) dropped to an average of 3.52 percent this week (0.6 point), according to Freddie Mac, also setting a new record low. The 1-year ARM rose slightly to 3.48 percent (0.7 point).

“Confidence in the state of the economy fell among consumers and businesses, which led to a decline in long-term bond yields and brought many mortgage rates to record lows this week,” said Frank Nothaft, Freddie Mac’s VP and chief economist.



Weakening confidence in the economy’s trajectory was evident despite notable improvements in household balance sheets. Nothaft cited a Federal Reserve report, which shows that homeowners have regained $1.0 trillion in home equity as of the second quarter of 2010, after losing more than $7.5 trillion over the three-year period ending in the first quarter of 2009.

A separate weekly study by Bankrate also put mortgage interest rates at record-lows. Bankrates survey is based on data gathered from the top 10 banks and thrifts in the top 10 U.S. markets.

The tracking company reported that rates for conforming 30-year fixed mortgages remained unchanged this week at their 4.5 percent low (0.36 point).

The average 15-year fixed mortgage retreated to 3.94 percent (0.31 point), down from 3.96 percent last week, while the larger jumbo 30-year fixed rate inched lower to 5.16 percent.

Bankrate says adjustable rate mortgages hit new lows also, with the average 5-year ARM decreasing to 3.68 percent and the average 7-year ARM falling to 3.91 percent.

According to Bankrate, mortgage rates remain at record lows, not as a result of poor economic data, but rather in expectation of additional efforts by the Federal Reserve to revive the economy.

“Specifically, investors are counting on the Fed to resume quantitative easing – purchases of government bonds in an effort to drive market interest rates even lower,” the company said in its report. “Investors have been front-running the Fed by buying government debt now, bringing bond yields to ultra-low levels. Mortgage bond investors are pricing for the risk that loans could be refinanced if the Fed’s efforts reduce mortgage rates further.”