In an effort to avoid having to pay as much as $850 million in penalties, Bank of America Corp. is allowing more than 200 thousand financial struggling households apply to have the mortgage balance drastically reduced. This deal is a side deal that will aid Bank of America by keeping them from having to pay the large amounts of penalty fees because of their part in the alleged foreclosure abuses that took place in related to the originating and securitization of residential home loans.
Bank of American has made a deal in regards to the robo-signing debt settlement that should help homeowners stay in their homes.
Under an arrangement between five of the nation’s largest banks and government officials that was part of a $25 billion settlement because of the alleged foreclosure abuses because of the use of robo-signers and other wrongful practices relating to paperwork, Bank of America will be shouldering the largest amount of the banks. Bank of America itself is responsible for $3.24 billion in cash payments to federal and state governments. And is responsible for $8.58 billion in principle reductions, loan refinancing and other assistance to troubled homeowners.
The side deal that came about was for Bank of America alone and was born from negotiations that covered both mortgage servicing and originations. The expanded deal could make it possible for Bank of America to avoid paying nearly $350 million in cash penalties linked to the foreclosure settlement. Along with that would be half of a $1 billion penalty that was related to a settlement of false claims that were filed on loans backed by the Federal Housing Administration. If the Bank of America meets certain target requirements, they could avoid having to pay that penalty.
The settlement with Bank of America Corp., Ally Financial Inc., Citigroup Inc., J.P. Morgan Chase & Co., and Wells Fargo & Co. concludes the investigations done by state and federal agencies into the questionable foreclosure practices that took places. More details about this deal and the other remaining banks will likely emerge soon.
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Tips for keeping your gutters clean
Mortgage scandal settlement draws near
The federal government is very near to reaching a settlement with mortgage servicers over the robo-signing scandal, in which mortgage servicers were allegedly initiating foreclosures based on inaccurate or even fraudulent paperwork. The scandal exposed major problems in in mortgage servicing that required fixing. The settlement could help a million homeowners by reducing what they owe on their mortgages.
The robo-signing mortgage scandal is drawing near to a finish.
Image source: Jeroen van Oostrom
Beyond principal reductions for many homeowners, a smaller number of families who suffered direct damage from the conduct of servicers would receive cash payments.
The announcement is expected to come within weeks. Any deal, however, would need to be approved by state attorneys general and the major mortgage servicers. The feeling, according to one Attorney General, is that a potential settlement is on the horizon. If a settlement deal is reached, the up to $25 billion deal is expected to cover the five biggest servicers.
The settlement could also make it so that more borrowers can refinance into lower-inter-rate loans, even if they are underwater on their homes, and to set stricter mortgage servicing standards for the entire industry
Across the country, almost one-fifth of all homes with a mortgage are underwater – that is, the homeowner owes more on the home than it is worth – or over 10 million borrowers.
Attorneys general hope to show that principal reductions reduce the risk that homeowners will default on loans. To this point, however, loan owners have avoided reducing principal – for the most part – feeling that such has not proven to work.
The negotiations do not include all states, but a final deal would allow them to join. One attorney general had reservations that even a $25 billion deal would represent enough to get borrowers their share in her state, which in December sued servicers for alleged unlawful foreclosures.
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Home prices fall in September
Maintaining rain gutters
Existing home sales increase in October
No one likes to clear gutters, but do gutter covers work? While they can be effective at stopping a buildup of leaves and seedpods from deciduous trees, but some models have a slot for water drainage and these could let pine needles in. A resolution to this problem may be a perforated guard.
This rain gutter guard allows water to seep through to the pan, while preventing leaves and other debree from clogging up the drain.
Image source: ContractorsFilter.com
Not all gutter covers work with all types of roofing, however. Many covers are designed to be installed at a roof’s edge with standard three tab shingles, which is the most popular type of roofing. They may not work with a slate, clay-tile or standing-seam metal roof. The manufacturer can help you with your purchase decision.
You can install the covers yourself. Some models will snap into pace above the gutter, but more often than not, some skills are needed as basic roofing and sheet-metal work may be required. You may decide to use roofing or siding contractor for the job.
Before you install a gutter guard, you should look at how you may make the job of cleaning your gutters easier. Simply bringing a bucket up a ladder with you or throwing the leaves down onto a tarp on the ground can help. If you don’t have many leaves, the bucket is fine. But if you have large amounts of wet leaves, and you have room to lay out a tarp you should go with the second method.
Plant the foot of the ladder on firm and level ground, leaning it at a 75-degree angle and take your time. Try not to place the ladder against the gutter whenever possible so you don’t damage the gutter. Try leaning it against the siding instead and use a ladder stabilizer. This will provide a more stable platform to have better access to the entire gutter, as the ladder’s top isn’t sticking above the gutter’s edge.
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The Sale of Existing Homes Increased for the Month of October
The sales of previously owned homes increased during the month of October across the nation and at the current pace of sales, last years totals will soon be eclipsed.
According to the NAR, home sales increased in October.
According to home sales data released by the National Association of Realtors on Monday, November 21, the sale of previously owned homes increased during the month of October by 1.4% when compared to the previous month. That brings the seasonally adjusted annual rate of sales to 4.97 million units. That rate puts existing home sales on track to surpass the previous year’s total of 4.91 million units. The 2010 existing home sales total was the lowest on record for more than 13 years.
While there has been a recent increase in sales across the nation, many economists and housing analysts are not upbeat. The sales are still lower than anticipated. Many market experts expected the sales data to reflect higher sales considering the 30-year fixed-rate mortgage average was below 4% for most of September and October of this year. That rate was the lowest rate on record for at least the last six decades.
The sales data, reflecting the sale of previously owned homes varied significantly by region across the nation. The sales of previously owned homes for the month of October increased by 4.4% in the West, 2.8% in the Midwestern United States and 2.1% in the South. However, sales declined in the Northeast by 5.1%. Much of the Northeast’s declines can be attributed to bad weather that caught that region of the United States by surprise.
Across the nation, sales were up by 12.3% when compared to the previous year when the expiration of the Federal Tax Credit for home buyers expired. When the home buyer tax credits expired in 2010 home sales plunged across the nation.
Inventories are at the lowest level of the year with just 3.33 million units available in October. Normally this would be a sign that the market is recovering. In this case, it is most likely a sign that homeowners are unwilling to put their homes on the market for the prices that they are currently selling for.
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Home prices fall in September
Home prices fell during the month of September and are expected to continue to drop during the winter months as banks increase their efforts to foreclose on delinquent homeowners and sell bank owned properties.
Home prices continue to decline and are expected to do so into 2012 as there are still an abundant amount of foreclosed homes on the market.
According to the S&P/Case-Shiller 20-city home price indexed which tracks home prices in 20 major metropolitan areas across the United States, home prices fell 0.6% during the month of September when compared to August. That recent drop ends a five month streak of home price increases during the spring and summer months.
Home prices for the third quarter were down 3.9% across the nation when compared to the previous year. That decline is an improvement from the 5.8% decline annually posted for the second quarter of the year.
Home prices are under continuous pressure coming from the high volumes of foreclosed properties flooding the market. While sales did increase near the end of the summer, buyers were only closing deals that they considered to be a good bargain. Many of these bargains were in the form of bank owned foreclosures or other distressed properties selling at huge discounts.
According to the S&P/Case-Shiller 20-city price index, prices fell in 17 of the 20 metropolitan areas during the month of September. The three cities that showed actual home price gains during the month of September were: Washington, D.C., with a gain of 1.2% and New York and Portland, Oregon, both with a gain of 0.1%. When compared to the previous year, home prices were only higher in 2 cities: Washington, D.C. with a gain of 1.0% over the year and Detroit with a gain of 3.7% from the previous year.
While home prices usually fall during winter months because there are fewer home buyers looking for homes during the cold season, this year will most likely be worse. Even after accounting for seasonal factors, home prices will likely drop because of the large share of foreclosed and distressed properties that are and will be on the market. Prices will drop because homeowners and new home builders cannot compete with the discount prices offered by banks to unload the properties quickly.
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