Half of Modified Home Loans are in Default

More than 51 percent of all borrowers whose mortgage loans were modified in the first quarter of 2009 defaulted again by the end of the year, reported the Office of the Comptroller of the Currency and the Office of Thrift Supervision in a joint report.

Modifications are “clearly not working well and it’s not a surprise,” said Sam Khater, a senior economist at research firm First American CoreLogic. “It’s pointless to rewrite these loans because they’re underwater.”

Nearly 4.5 million foreclosure filings are expected in 2010, according to RealtyTrac, a seller of default data.

Source: Bloomberg, John Gittelsohn (03/25/2010)

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Is a Short Sales Boom Coming?

Banks are ramping up short sales thanks to government incentives and the realization that short sales result in lower losses than foreclosures. On average, banks lose 50 percent on a foreclosure, but only 30 percent on a short sale.

Bank of America, the nation’s largest mortgage servicer, has dramatically reduced the time it takes to process short sales. Elizabeth Weintraub, a Sacramento, Calif.-based real estate practitioner who handles many short sales, said, “Bank of America approved [a short sale] in 24 days. That flipped me out.”

The hang-up for many short sellers has been second liens, but the new government program gives first lien holders incentives to share and offers second lien holders and investors a $6,000 cash incentive.

Under the new program lenders must tell the seller the minimum they’ll accept. When the seller comes back with a good offer, it must be accepted within 10 days.

Chris Saitta, CEO of Equator, which produces short-sale software, predicts a boom in short sales. “The challenge will be handling all the volume,” he said.

Source: CNNMoney, Les Christie (03/29/2010)

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Catch ‘Glimpses of Aiken’ at ACA exhibit

Two new exhibitions at the Aiken Center for the Arts (ACA) include the work of local artist Jim Harrison.

“Jim Harrison: Glimpses of Aiken” and “Jim Harrison: A Retrospective” and a collection of 20 new Harrison paintings will open Thursday and run through May 8.

An opening reception will be held on Thursday from 6 to 8 p.m. at the ACA. The reception serves as the kickoff for the second quarter of Celebrate Aiken events based on the theme of arts, education and entertainment.

For more information on the reception, call the ACA at 641-9094 or visit www.aikencenterforthearts.org.

The beginning

“When I was 14, I went to work for an elderly sign painter. I asked him about a summer job. I began scraping signs and painting backgrounds. He took a liking to me and taught me how to letter for the Denmark Coca-Cola Bottling Co.,” Harrison said.

Harrison had an interest in drawing in high school and took art classes at the University of Carolina where he studied education. After college, Harrison became a teacher and a coach for 11 years. During the summers as a teacher, he began taking art classes in Allendale.

“Gradually, through Ms. Melon’s encouragement and what I had learned, I decided to take a year off and see if I couldn’t make it as an artist,” said Harrison. “That would have been in the summer of 1969. I was an artist, and I didn’t know what to do. I lived in Denmark and had never spoken with an artist who made their living from the sale of their work, but I was a little bit familiar with Greenwich sidewalk shows. I decided to go that fall to the Greenwich sidewalk sale. I got a space and I exhibited on the sidewalk. I sold one painting for $85. Full Story….

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Transportation Costs Hurt Housing Affordability

A new study contends that only 39 percent of U.S. communities are affordable for typical households when the cost of transportation is included in the calculation of housing costs.

The Center for Neighborhood Technology analyzed the Housing + Transportation Affordability Index, which examined 161,000 neighborhoods housing 80 percent of the U.S. population, and concluded that for most families, transportation is the second-largest household expense.

It is also a fairly unmanageable one, the study concluded, because it is difficult for families to estimate the full cost of a location before they move there. Gas prices and employment demands aren’t very predictable for many.

Factors that can help people control transportation costs include walkable neighborhood streets, access to public transit, and nearby retail.

Source: Center for Neighborhood Technology (03/23/2010)

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Delinquent Mortgages at Nearly 14 Percent

Nearly 14 percent of all mortgages were in trouble in the fourth quarter of 2009, according to a report released Thursday by the Office of the Comptroller of the Currency and the Office of Thrift Supervision.

More than 4.7 percent of all mortgages were more than 90 days past due in the fourth quarter, a 21.1 percent increase from the same quarter in 2008. The number of troubled borrowers with prime mortgages increased 16.5 percent year over year.

Foreclosure sales, short sales, and deed-in-lieu-of-foreclosure actions rose by 8.6 percent from the third quarter to 163,224 and were up 44.5 percent from fourth quarter 2008.

The report, which reflects 34 million loans with nearly $6 trillion in principal balances, said: “Loan servicers reported that they expect new foreclosure actions to increase in the upcoming quarters as many of the mortgages that are seriously delinquent may eventually result in foreclosure as alternatives that prevent foreclosure are exhausted.”

Source: Reuters News (03/25/2010)

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California Extends Home Buyer Tax Credit

California has re-established and extended a $10,000 home buyer tax credit, allocating $200 million to the credit for homes purchased between May 1 and Dec. 31, and between Dec. 31 and Aug. 1, 2011.

Steve Goddard, president of the California Association of REALTORS®, said the tax credit will help create incentive for first-time home buyers to purchase abandoned and foreclosed homes. “It is these homes that will require substantial rehabilitation by the new owners, which will in turn generate a tremendous increase in jobs and accessory purchases connected to home improvement activities,” Goddard said.

The credit will be split between first-time buyers and buyers who have lived in their home for at least two years.

“The tax credit will help push prospective buyers off the fence, clear out inventory, and jump-start the homebuilding industry, which will help create jobs and reinvigorate the state’s economy,” said Liz Snow, CEO and president of the California Building Industry Association, in a statement.

Source: Inman News (03/25/2010)

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New Foreclosure Prevention Plan Announced

President Obama is announcing an expansion of foreclosure-prevent tactics, including a plan to reduce principal balances and special aid for unemployed borrowers.

The bulk of the responsibility for carrying out the new program will be assigned to the Federal Housing Administration, which will insure lenders against part of the losses.

The plan asks banks to write down loan balances to less than the value of the home. If there is both a first and second mortgage, the combined total would have to be no more than 115 percent of the home’s value.

The Treasury would pay part of unemployed homeowners’ loans for three months while they job hunt.

Source: The Wall Street Journal, Nick Timiraos and James R. Hagerty (03/25/2010)

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No Authoritative Estimate of Total Foreclosures

How many foreclosed homes are really out there? No one can say for sure, but the number seems to be somewhere between 500,000 and 1 million.

To date, no one has been able to track the total number of properties owned by banks, the U.S. Department of Housing and Urban Development, and mortgage investors. Here are a few approximations:

• Barclays Capital uses foreclosure data from mortgage securities to estimate that there are slightly more than 600,000 homes in the process of foreclosure.
• RealtyTrac, which examines public records, estimates the number is closer to 700,000.
• Independent housing economist Tom Lawler combines data from Fannie Mae, Freddie Mac, the Federal Housing Administration, Federal Deposit Insurance Corp., and securitization trusts to conclude that there are actually about 500,000.

Source: The Wall Street Journal, James R. Hagerty (03/19/2010)

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BoA Reports Rising Loan Modifications

Bank of America Corp., which has been under government pressure to modify more underwater mortgages, has apparently responded aggressively.

Bank of America reports that as of the end of February, it had modified 20,666 of its customers’ mortgages permanently under the Home Affordable Modification Program, up from 12,761 at the end of January.

The company said another 22,303 are pending, waiting only for customer signatures.

“We are in a position to show strong results in completion of permanent HAMP modifications as we move into spring,” says Jack Schakett, loss mitigation strategies executive the bank.

Source: The Wall Street Journal, Jay Miller (03/12/2010)

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There’s lots more to do in Aiken

The Sport of Kings isn’t the only game in town. There are plenty of other events vying for Aikenites’ attention this weekend.

Here are a few of the entertainment options coming to Aiken County  Saturday.

* The Aiken Kidney Benefit Inc. presents the musical “Cinderella” at 3 and 8 p.m. Saturday at the URS Center for the Performing Arts. Matinee tickets are $22, evening tickets are $24; for ticket information call 648-1438 or visit www.aikencommunityplayhouse.com.

* Walton Rehabilitation Center holds a 5K walk to raise awareness of life with brain injuries from 10 a.m. to noon at The Family Y.

* The Yellow Jessamine Festival will be from 11 a.m. to 9 p.m. Saturday on Georgia Avenue in North Augusta. A festival art show will be from 11 a.m. to 4 p.m. Saturday at the North Augusta Arts and Heritage Center.

* The Optimists Club holds a pancake breakfast from 7 to 11 a.m. Saturday at Holy Trinity Lutheran Church fellowship Hall in North Augusta.

* The Central Savannah River Area Job Forum will take place from 9 a.m. to 1 p.m. Saturday at the Aiken Technical College library.

* The Catholic Women’s Association will hold a game/card party at 10 a.m. in St. Angela Hall. The party will include lunch and prizes. Admission is $8, and proceeds benefit local charities. For reservations, call 648-5569 or 648-8671.

* A “Plantation Medicine” program will take place at Redcliffe Plantation State Historic Site in Beech Island from 10 a.m. to noon Saturday. Admission is $4 for adults, $3 for ages 6 to 16 and $2.50 for South Carolina seniors. The program is co-sponsored by the Aiken Career and Technology Center’s Health Science Technology Program. For details, call Redcliffe at 827-1473.

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