a****g
发帖数: 8131 | 1 【 以下文字转载自 Stock 讨论区 】
发信人: vankie (似水流年), 信区: Stock
标 题: Government to Deploy Broader Mortgage Aid
发信站: BBS 未名空间站 (Sat Sep 4 03:55:12 2010, 美东)
Government to Deploy Broader Mortgage Aid
By NICK TIMIRAOS
The Obama administration on Tuesday will launch its most ambitious effort at
reducing mortgage balances for homeowners who owe more than their homes are
worth.
Officials say between 500,000 and 1.5 million so-called underwater loans
could be modified through the program, the first initiative to target
homeowners who are current on their mortgage payments but are at risk of
default because they have no equity in their homes. Some experts are warning
, however, that the same knots that tied up prior initiatives could do so
again.
Under the new "short refinance" program, banks and other creditors that
write down mortgages to less than the value of the property can essentially
hand off the reduced loan to the government. The process involves
refinancing borrowers into loans backed by the Federal Housing
Administration.
While the program puts taxpayers at risk—officials estimate one in five
loans in the program could default—the government has set aside $14 billion
previously earmarked for housing aid from the Troubled Asset Relief Program
to cover losses.
The new program, which was announced in March, is starting as the housing
market shows signs of renewed trouble and as the Obama administration's
signature Home Affordable Modification Program, or HAMP, falls short of its
goals of helping three million homeowners. Half of the 1.3 million borrowers
that enrolled in temporary loan modifications have fallen out of HAMP
because they didn't qualify. Only one-third has received permanent
modifications.
The initiative also comes as mortgage rates fall to their lowest levels in
more than 50 years. Average rates on 30-year fixed-rate loans dropped to 4.
43% last week, down from 4.55% during the previous week, according to a
survey published Wednesday by the Mortgage Bankers Association.
In Deep: Underwater Borrowers
One of the biggest dangers facing the housing market is the glut of
underwater homeowners who could default if their personal finances or home
prices worsen. About 11 million borrowers, or 23% households with a mortgage
, were underwater as of June 30, according to CoreLogic Inc.
The White House hopes to reach borrowers like Irene Gerloff, 62 years old,
who was turned down for a loan modification because she can afford her
payments. While she owes $292,000 on her two-bedroom condominium in La Habra
, Calif., the property is probably worth less than $200,000.
She is worried about what happens in five years, when her "interest-only"
loan begins requiring much larger payments. "If things don't improve between
now and 2015, I'm going to have to let this house go," said Ms. Gerloff, a
secretary.
But not every homeowner who is underwater can participate. The bank or
investors that own the loan must be willing to write down its value.
The administration's plan doesn't target loans held by Fannie Mae and
Freddie Mac, which own or guarantee half of the $10 trillion in U.S. first-
mortgage debt, to avoid inflicting big upfront losses.
Instead, officials hope to reach more loans that were bundled by Wall Street
firms and sold to investors as mortgage-backed securities. For more than a
year, many of those investors, which include hedge funds and pension funds,
have been clamoring for such a program because they have already had to mark
down the value of their holdings.
"It'll take some really crappy loans out of the marketplace…and replace
them with much higher-quality" mortgages, said Scott Simon, a managing
director at Pacific Management Investment Co.
But that could be hard to do because mortgage servicers, which handle loan
payments and decide which loans should be modified, are overwhelmed. And
some borrowers might be discouraged from taking part because receiving a
principal reduction will show up on their credit score.
Moreover, investors may not be able to participate as hoped because certain
contracts that govern mortgage securitizations say modifications can only
proceed if there is an "imminent" risk that the borrower would default.
Reducing balances for borrowers who are current could open mortgage
servicers to lawsuits from investors that hold the riskiest slices of bonds.
Those investors would be wiped out if balances are greatly reduced. For
that reason, "lenders are going to be especially reluctant to do short
refinances on folks who are current," says Alan White, an assistant
professor at Valparaiso University in Indiana.
Officials stress the new program isn't going to be a panacea. But they say
that it should give servicers flexibility to modify current loans, and that
they are "cautiously optimistic."
Zully Bravo, left, and Alfredo Gonzalez met with a mortgage negotiator in
Palm Beach, Fla., late last month.
"We've heard a lot of positive feedback from servicers and from investment
groups to be able to write down" loans, said Vicki Bott, a senior FHA
official.
Analysts say that the program is most likely to succeed on loans that banks
already own in their portfolios. It could also provide investors with a
vehicle for getting rid of loans that have been modified and are current
again. "It's going to be a 'take out' for modified loans," said Laurie
Goodman, a senior managing director at mortgage-bond trader Amherst
Securities Group LP in New York.
The program must resolve a stubborn problem that has hindered every other
modification program: how to deal with second mortgages. The program says
second liens must be reduced so that the total mortgage debt is less than
115% of the home's current value. The government will make partial payments
for banks to reduce those loans, but banks have been very reluctant to write
down seconds that are current.
Investors that hold first mortgages are leery of writing down their loans
without extinguishing the second because junior-liens are in a first-loss
position. On a loan that has a second behind it and is heavily upside-down,
"do I take the write-down and effectively pay off the second? I don't think
so. That second is worthless," said Vincent Fiorillo, portfolio manager at
Doubleline Capital, a Los Angeles-based fixed-income manager.
He said the program could work for loans without seconds, though he says it'
s possible many borrowers will still have too much debt to qualify for an
FHA-backed loan. | a****g
发帖数: 8131 | 2 I am afraid a lot of fraud claims will appear
Last time it was only 8k, quite a lot of the claims were fraud. Now, it
could be dozens of grands. | M*****g
发帖数: 3145 | 3 哎。。。抱薪救火，不小心就burn to hell了
黑巴之蠢，无以药救了 | c******e
发帖数: 1581 | 4 大家想想哪些公司会得益？residential real estate, like AGNC? | a****g
发帖数: 8131 | 5 all banks will benefit
and possibly insurance companies
【在 c******e 的大作中提到】
: 大家想想哪些公司会得益？residential real estate, like AGNC?
| c******e
发帖数: 1581 | 6 Thanks.
Banks: WFC has more exposure to mortgage, especially low quality ones.
Mortgage insurance: ORI, MTG, RDN, etc.
General insurance: AIG.
The effect of the program is unclear and will be slow as the Home
Affordable Modification Program, but worth to watch it.
【在 a****g 的大作中提到】
: all banks will benefit
: and possibly insurance companies
| M*****g
发帖数: 3145 | 7 现在refinance都搞得一个头大，银行的状况还是个未知数，也许我们有些太乐观了。
如果大势不稳，它们是不是还是没戏？ |
|
