Collateral Vision - Hot Topics

Myths Spun by Lax Lenders

Tue, 10 Jul 2007 05:00:00 GMT

Again from The New York Times, this time on the editorial page. The Times editorial board takes subprime lenders to task, arguing that irresponsible lenders made loans to people regardless of their ability to pay and uinnecessarily pushed others into high-interest, adjustable rate loans.

Increasing Rate of Foreclosures Upsets Atlanta

VIKAS BAJAJ — Mon, 09 Jul 2007 05:00:00 GMT

The New York Times focuses on Atlanta foreclosures in its latest look at the nationwide housing slump. Atlanta may be far more indicative of what's going on nationwide than severely depressed markets. Its employment, inflation, and real estate values mirror that of the nation in general. Yet, foreclosures are still high. Here, the experts place the blame on adjustable rate mortgages and a tendency to carry too much of a debt burden.

Fannie Mae Releases New Guidance on Manufactured Homes, Appraisals

Thu, 28 Jun 2007 05:00:00 GMT

From the Appraisal Institute's Appraisal News Online, a news blurb on Fannie Mae's release of new guidelines for appraisers to consider when evaluating manufactured homes.

Appraisers urged to set ethics aside

Chris Pummer, MarketWatch — Tue, 15 May 2007 05:00:00 GMT

A Dow Jones MarketWatch report that examines what many of us in the industry already know--appraisers are under tremendous pressure from mortgage brokers or realtors to hit certain values. As we have seen over the past few months, this practice ultimately damages lenders, homebuyers, and indeed, entire communities. The story quotes Jim Amorin, the vice president of Atrium Real Estate Services and president-elect of the 22,000-member Appraisal Institute. Worth a look.

Please don't hit appraiser

Sally Duros — Fri, 11 May 2007 05:00:00 GMT

Chicago Sun-Times column aimed at homebuyers. In simple, plain language, this explains why consumers shouldn't get upset if their house doesn't come in at the value they expectthe appraiser is there to protect their investment as well as the lender's. Appraisers have a gatekeeper role, but are under tremendous pressure from brokers or loan officers whose commission depends on making the deal. This issue's been getting more and more ink in the mainstream paperskeep an eye out for more.

Mortgage Crisis Spirals, and Casualties Mount

JULIE CRESWELL and VIKAS BAJAJ — Mon, 05 Mar 2007 06:00:00 GMT

New York Times story discussing the problems in the subprime market in general and at New Century Financial in particular, which it calls "an escalating crisis in the market." Curiously, the reporters focus more on how much money the New Century founders made than on what subprime defaults and buy backs mean for the mortgage industry as a whole. Still, worth a look.

Could Tremors in the Subprime Mortgage Market Be the First Signs of an Earthquake?

Wed, 21 Feb 2007 06:00:00 GMT

From Knowledge@Wharton, the online magazine of Wharton Business School, comes another sobering look at what subprime defaults could mean to the lending industry, Wall Street, and the economy in general. While some experts predict a housing-triggered recession, others say the worst is behind us and things are looking up. With more than $1 trillion in adjustable rate loans set to re-adjust in 2007, we won't have to wait long to find out.

Default Jitters Batter Shares Of Home Lenders

James Hagerty and Ruth Simon — Fri, 09 Feb 2007 06:00:00 GMT

James Hagerty and Ruth Simon of the Wall Street Journal create a stir by showcasing possible problems investors in riskier home loans may experience as defaults rise. In just four years, the GSEs share of mortgage-backed securities has fallen from 70 percent to 40 percent. Far more investors now depend on a stable housing market for returns. As values drop and defaults rise, some investors are noticeably worried about what the downturn means for the economy at large.

What could help? How about real-time property values streamed to the Street. It could happen...

Bankers Report More Mortgages Being Paid Late or Not at All

Jeremy Peters — Thu, 14 Dec 2006 06:00:00 GMT

Mortgage delinquency rates ticked up in the third quarter, especially among subprime borrowers. Mississippi leads the nation in delinquencies, with 11.1 percent of all mortgages, more than twice the national average. We're the fattest and poorest, too, but the Times suggests Mississippi's rate soared higher because of lingering fallout from Hurricane Katrina.

Nationwide, subprime borrowers are struggling to keep up with resetting interest rates on their adjustable rate mortgages, the real reason behind the uptick in delinquencies. MBA Chief Economist Doug Duncan said he expects delinquencies to continue to rise over the next several quarters.

Falling prices trap new homebuyers

JEFF COLLINS — Wed, 13 Dec 2006 06:00:00 GMT

The Orange County Register, in the heart of some of the priciest real estate in the country, details what happens to a neighborhood when a builder slashes prices to sell the remaining homes in a development. Bascially: those who bought first, during the waning days of the boom, find themselves stuck in upside-down loans in which they owe more than their home is worth.

For many who used exotic ARMs just to get into the high-priced homes, this will lead to foreclosure.

The Bonnie and Clyde of Mortgage Fraud

Tue, 21 Nov 2006 06:00:00 GMT

Fascinating story in this month's Fortune magazine about Matthew Bevan Cox, a serial con man who has made millions from fraudulent loans in Florida, Georgia, South Carolina, and possibly elsewhere. In this story, his accomplice, Rebecca Hauck, sits in federal prison alone, waiting for her sentencing. The story builds on the work of St. Petersburg Times investigative reporter Jeff Testerman, whose first article on Cox prompted him to flee Tampa in December of 2003 and go on the run.

As of the Fortune article going to press, Cox had not been caught. But on Nov. 16, Testerman reported in the St. Pete Times that Cox had been caught in Nashville. Though we'd like to believe some investigator reeled him in, Cox was done in by an overly suspicious 60-year-old babysitter. Check it out here: http://www.sptimes.com/2006/11/17/Tampabay/Sitter_s_fears_set_ar.shtml

MythBusters: Are AVMs Stealing Your Data?

David Brauner — Wed, 15 Nov 2006 06:00:00 GMT

Appraiser publication Working RE magazine polls industry heavy-hitters, including FNC's own Bill Rayburn, about how appraisal data is used. The industry basically answers, in concert: no, AVMs do not steal appraiser data. Neither will AVMs ever replace a human appraiser. However, in an increasingly technology-dependent world, smart appraisers will have to evolve into more of a strategic consultant for lenders, using data products and technology to supplement their own value opinions, perhaps for an hourly rate instead of per-report. Very compelling stuff.

New Home Prices Fell Sharply in September

Jeremy Peters — Thu, 26 Oct 2006 05:00:00 GMT

The New York Times examines the Commerce Department's statistic that median prices for new homes in September 2006 were nearly 10 percent lower than in September 2005. The steep decline is largely due to developers slashing prices to unload unsold homes. Some analysts say developers may shelve future projects until sales pick up.

Across Nation, Housing Costs Rise as Burden

Tue, 03 Oct 2006 05:00:00 GMT

By JANNY SCOTT and RANDAL C. ARCHIBOLD, this New York Times story examines one reason why declining home prices may not be such a bad thing. In certain parts of the country, housing costs have outpaced income growth. In Southern California, New York, and certain suburban counties around the country, families are paying up to 30 percent of their incomes for housing. Numbers like that simply aren't sustainable, economists warn.

Mortgage Suit Says ‘Trust Us’ Led to Fleecing

JOHN LELAND and TOM ZELLER Jr. — Thu, 28 Sep 2006 05:00:00 GMT

The New York Times story lays bare the machinations behind a $40 million mortgage fraud scheme. Low and middle income residents of Martinsville, Va. believed they were investing in real estate through local friends. Instead, the women -- a minister and a hairdresser -- used their identities to be straw buyers for properties in Indiana. Those mortgages are now in default and sevreal Martinsville folks are declaring bankruptcy.

Homes Post Price Drop for August

Jeremy Peters — Tue, 26 Sep 2006 05:00:00 GMT

New York Times story detailing the slide in housing prices. Sale prices of existing homes dropped 1.7 percent from August 2005, with the biggest price slide coming in the Northeast. Prices held steady in the West, but overall sales dropped by more than 22 percent. Prices are expected to fall even further.

Real Estate Appraising: Chilled, But Not Frozen

Kelly Bennett — Wed, 20 Sep 2006 05:00:00 GMT

Voice of San Diego story by Kelly Bennett. Story straight from the front lines of the declining housing market--San Diego, where sales have declined almost 30 percent in one year. Bennett examines how appraisers have had to adjust from a boom market that covered any overvaluation mistake to one in which they must chart their values according to falling prices.

Nightmare Mortgages

Mon, 11 Sep 2006 05:00:00 GMT

Fantastic BusinessWeek story on the perfect storm--option ARMs, declining home values, and rising interest rates. More than a fifth of option ARMs in 2004 and 2005 were upside-down, meaning the property was worth less than the loan. As values decline in overheated markets, this percentage will rise, and more families will be stuck with payments that have reset to higher monthly payment than they can afford.

Authorities uncover housing trap

Richard Byrne Reilly — Wed, 06 Sep 2006 05:00:00 GMT

Pittsburgh Tribune-Review article by Richard Byrne Reilly on local folks taken advantage of by a mortgage broker refinance for shoddy construction scheme. Amply demonstrates how overwhelmed local authorities are by these schemes. Even FBI agents are in awe of the brazenness--but there's not much that can be done.

Washington Mutual to sell first U.S. covered bonds

Tue, 05 Sep 2006 05:00:00 GMT

Reuters story on Washington Mutual's efforts to sell 20 billion euro of debt on bonds backed by home loans. Serves to emphasize that the U.S. mortgage market is one of the biggest markets in the world.

Subprime loan defaults grow

Lingling Wei — Thu, 31 Aug 2006 05:00:00 GMT

Story by LINGLING WEI of Dow Jones Newswires. The end of the housing boom means more subprime borrowers default earlier in the mortgage process, putting Wall Street investors at risk.

Inflated appraisals affecting sales, refi's

James R. Hagerty and Ruth Simon — Sun, 27 Aug 2006 05:00:00 GMT

Wall Street Journal story by James R. Hagerty and Ruth Simon (here linked as it ran in the Chicago Tribune), examines what the boom era of inflated appraisals means today, in a down market. Many folks in cities where properties were overvalued across the board now face rising values and upside mortgages. Also touches on the hairy issue of sales concessions--how do they affect appraised values?

Legislators want to make public the names of those linked to loans

Sun, 27 Aug 2006 05:00:00 GMT

The Charlotte Observer's been following the story of entire neighborhoods of foreclosed homes in its metro area, mostly new homes bought by low to middle income first-time home buyers. Record levels of foreclosure in North Carolina's two largest cities have caught the eye of state legislators. Legislators want to be able to track failed loans back to the loan officers or mortgage brokers who made the deals, hoping this new accountability will cause some to think twice.

ARMs Fuel Jump In Home Foreclosures

Tue, 20 Jun 2006 05:00:00 GMT

AP story on the dangers of ARMs. As the housing market cools and prices fall, borrowers who took out adjustable rate mortgages find it harder to refinance. Many are now stuck with monthly payments that have reset to a higher rate. Economists expect foreclosures to rise as more borrowers aren't able to keep up with the higher payments.

Mortgage Fraud: The New Street Hustle

David Jackson — Tue, 01 Nov 2005 05:00:00 GMT

Beginning in November with his stunning series "Mortgage Fraud: The New Street Hustle," and continuring through current stories, Tribune reporter David Jackson paints a picture of those who really suffer from mortgage fraud: the people left behind in foreclosed neighborhoods and the unsuspecting folks who aren't able to defend themselves from some truly criminal brokers.

Jackson also discovers through his research that Chicago street gangs have found a safer, more lucrative, less attention-grabbing way of making millions than dealing crack. They've turned to mortgage fraud.