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As millions of Americans struggle to hold on to their homes, Wall Street has found a way to make money from the mortgage mess. Investment funds are buying billions of dollars’ worth of home loans, discounted from the loans’ original value. Then, in what might seem an act of charity, the funds are helping homeowners by reducing the size of the loans. But as part of these deals, the mortgages are being refinanced through lenders that work with government agencies like the Federal Housing Administration. This enables the funds to pocket sizable profits by reselling new, government-insured loans to other...

More than 14 percent of borrowers were in trouble on their mortgage during the third quarter, a new record, according to an industry survey released Thursday, which also suggests that the foreclosure rate is likely not to peak until next year as unemployment rates continue to rise. Unemployment remains a big driver of the problem, according to the Mortgage Bankers Association, which conducts the survey. Those with delinquent loans now include a growing portion of people traditionally considered creditworthy and people whose mortgages are insured by the Federal Housing Administration. "The outlook is that delinquency rates and foreclosure rates will...

... In its efforts to prop up a shattered housing market, the government is greatly extending its traditional support of real estate, including guaranteeing the mortgages of middle-class and even upper-class buyers against default. In 2007, the government did not insure a single mortgage in [San Francisco], one of the most expensive in the country. Buyers here, as well as in Manhattan, Santa Monica and every other wealthy area, were presumed to be able to handle the steep prices and correspondingly hefty down payments on their own. Now the government is guaranteeing an average of six mortgages a week here....

As if we needed more proof that the mortgage market is currently a totally manipulated market. Mortgage applications to purchase homes in the U.S. plunged last week to the lowest level in almost nine years as Americans waited for the outcome of deliberations to extend a government tax credit, reports Bob Willis at Bloomberg. The Mortgage Bankers Association’s index of applications to buy a house dropped 12 percent in the week ended Nov. 6 to 220.9, the lowest level since Dec. 2000. The group’s refinancing gauge rose 11 percent as interest rates decreased, pushing the overall index up 3.2 percent....

Without question, Tejada's loan is toxic--to her and to the taxpayers who are backing the loan.... In case you're not in tune with exactly where housing prices are set to keep plunging like an overworked plumber for the next several years, it's... drumroll please... California. And if (or, to be more accurate, when) she gets sick, or loses a job, or gets into an auto accident, or simply can't sell her house for what she needs to sell it for, you get to help cover the losses! Aren't you excited?

Thousands At Cow Palace Seeking Mortgage HelpA Carolyn Said, Chronicle Staff Writer Saturday, October 17, 2009 Armed with sleeping bags or folding chairs, many spent a chilly night on the pavement outside the Daly City event center. "I'm just trying to keep my house," said Gerasim Karapetian of Yorba Linda (Orange County), as he waited in the bleachers to meet with a loan counselor. "I drove eight hours, got here at 2 a.m., and waited outside all night. The line wrapped around the whole parking lot." He was among more than 4,000 people from around California and neighboring states who...

In the Medieval era -- when the periodic table of the elements was comprised of only Fire, Earth, Air, and Water -- alchemists posited the existence of a fifth magical substance, Quintessence, which when mixed in combinations of the other four would create every other form of matter. They searched in vain for this ethereal substance in their pursuit of a means of changing base metals into gold. Their quest went unrealized, but this magical quintessence was subsequently discovered five centuries later by the new alchemists: mortgage bankers and investors. They found a way to turn worthless mortgages into hordes...

On April 9, 1965, a 34-year-old lawyer named Charles Rangel took out a low-interest mortgage to renovate his childhood home — a row house on West 132nd Street that he had just inherited from his grandfather. The $39,350 loan came from a New York City program to develop low-income housing. Rangel and his sister Frances were to use the money to turn the family home in Central Harlem, which Rangel affectionately called Buckingham Palace, into six apartments. While Rangel may have thought he scored a sweetheart deal, the loan came back to haunt him during his first run for Congress...

Guillermo Loaiza, a loan officer for a unit of J.P. Morgan Chase & Co. in Phoenix, has resigned from the board of Acorn Housing, a spokesman for J.P. Morgan said. Acorn Housing is an affiliate of the community-organizing group Acorn, the full name of which is the Association of Community Organizations for Reform Now. Both Acorn and Acorn Housing have been under fire since the recent release of secretly recorded videos that depicted Acorn employees offering advice on evading taxes, setting up brothels and smuggling illegal immigrants. J.P. Morgan has said it doesn't have a regular working relationship with Acorn...

A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership. The significance of the holding is that if MERS has no standing to foreclose, then nobody has standing to foreclose – on...

Americans have tamed their wanderlust during this recession, according to the latest data released by the U.S. Census Bureau. Only about 2.4% of Americans moved from state to state in 2008, down from 2.5% the previous year. "The mobility rate is lower than it has been in years," said Robert Lang, a demographer with Virginia Tech University. "There's a recession and a housing bust. People can't sell their homes in California and move to Las Vegas or sell their condo in Florida and move to North Carolina." "People are hunkering down, trying to hold on to what they have," added...

Delays in dealing with home foreclosures are stretching out the pain for the U.S. housing market, as we reported in Wednesday’s Journal. That has stirred lots of debate over whether it is better for the nation to face the pain of millions of foreclosures immediately – to get it over with fast — or to draw the process out over several years in hopes that the economy and housing demand will recover. It looks like we’re taking the latter course, for better or worse.

We are not exactly sure what is going on with the producers over at NBC News and the TODAY Show, but the quality of people they are digging up for their news and interview segments has certainly been lacking. Yesterday, The TODAY Show featured a segment detailing the latest “trend”: people in foreclosed homes are stripping them bare and selling the contents before turning the property over to the banks, going so far as even selling the toilets for $20. In this video clip, NBC Reporter Kerry Sanders is talking with Zorene Brodek (sp?) who justifies her actions: Sanders: What...

"Some things are worth fighting for, and I think your family and your home are two of those things." -Baltimore ACORN Foreclosure Fighters Co-Chair Louis Beverly The foreclosure crisis lies at the very heart of the broader economic collapse. The glut of foreclosed properties on the market forced housing prices into a tailspin, and banks loaded up with mortgage-backed securities and complex derivatives, unable to value or sell these assets, stopped lending to each other and the credit markets froze up, triggering the broader economic morass. A broad and successful economic recovery is impossible without directly addressing the record foreclosure...

WASHINGTON (Reuters) - The federal government and states are girding themselves for the next foreclosure crisis in the country's housing downturn: payment option adjustable rate mortgages that are beginning to reset. "Payment option ARMs are about to explode," Iowa Attorney General Tom Miller said after a Thursday meeting with members of President Barack Obama's administration to discuss ways to combat mortgage scams.

THERE'S one thing more shocking than the illegal- alien smuggling advice that an ACORN official in San Diego gave undercover journalists James O'Keefe and Hannah Giles: It's the illegal-alien home-loan racket that ACORN has been operating with the full knowledge of the US government. On Wednesday, O'Keefe and Giles published the fifth in a series of BigGovernment.com sting videos. In it, ACORN official Juan Carlos Vera coached the pimp-and-prostitute-posing pair on how best to pull off a border-busting smuggling operation. It would be "better from Tijuana," Vera counseled. He then generously offered the investigative couple his Mexican "contacts" to bring...

THE next wave of the credit crisis is about to hit -- a collapse in com mercial real estate and potential explosion of bank failures. With its resources tapped out by the first wave, what should Washington do? Over the last year, the Federal Reserve doubled the size of its balance sheet, and took unprecedented action in monetizing government debt and extending credit to financial institutions. Now it must head off inflation and extricate itself from $5 trillion-plus in credit exposure from various bailouts. The Treasury, meanwhile, is issuing debt at the fastest pace in peacetime history. Now comes the...

A number of experts believe that aggressive enforcement of the 1970s-era Community Reinvestment Act contributed to the mortgage meltdown, and thus to the greater financial crisis, by requiring financial institutions to lend to unqualified borrowers. Now, the Democratic majority in the House of Representatives is responding to that situation by proposing to expand the scope and power of the Community Reinvestment Act. This morning House Financial Services Committee chairman Rep. Barney Frank held a hearing on H.R. 1479, the "Community Reinvestment Modernization Act of 2009." The bill's purpose is "to close the wealth gap in the United States" by increasing...

The shocking ACORN videos produced and distributed by James O'Keefe, Hannah Giles and Andrew Brietbart reflect the founding purpose of ACORN: creating chaos to overwhelm the system. As I reported last September, and as Glenn Beck and others have reported since then, ACORN was created specifically to execute the Cloward Piven Strategy of manufactured crisis across our country. This series of videos demonstrates in microcosm how ACORN workers promote the strategy. By agitating for mortgage loans that the borrowers could never repay, ACORN and similar groups were primarily responsible for the conditions that led to our current financial crisis. This...

Treasury: Millions More Foreclosures Coming Official says a strong housing market is crucial for the economy Sept. 9, 2009 WASHINGTON - Only 12 percent of U.S. homeowners eligible for loan modifications under the Obama administration's housing rescue plan have had their mortgages reworked, and millions more foreclosures are coming, the Treasury Department said on Wednesday. A Treasury report showed 360,165 people had their monthly payments reduced through August, up from 235,247 through July, but a senior Treasury official conceded much more must be done to soften the impact of a severe and prolonged housing crisis. Treasury has begun releasing monthly...

As it tried to help shore up the ailing housing market during the past year, the Federal Housing Administration increased its exposure, particularly to mortgages in high-cost states that have also seen some of the sharpest price declines. Now concerns are mounting that the agency -- and the U.S. taxpayer -- may have to pay the price. The FHA insures loans secured with down payments as low as 3.5%. But values in many markets in which it has been increasing its activity have fallen far more than that in the past year. The result: A growing number of homeowners with...

Due to the economy and weak real estate market, Miles Brannan is raffling off his luxury home in Fort Lauderdale, Florida. The raffle is attracting buyers from around the world due to both the appealing price of $10 per ticket and international interest in U.S. real estate. Brannan's raffle is a great deal for foreign investors who want to break into the market because the deed and title will be transferred to the lucky winner free and clear. There will be no need for a jumbo mortgage or creative financing, making the $10 investment an even more attractive offer. "The...

The Internal Revenue Service will expand a program designed to catch tax cheats that searches for inconsistencies between mortgage payments and income. After prompting from an IRS auditor, the agency will study whether it should make greater use of data on mortgage-interest payments provided to it by banks. The IRS currently uses such data to send notices to non-filers who it believes should have filed a return. The data could also be used to target for audits individuals who don't file tax returns, or who report less income than they paid in mortgage interest, according to a letter released Monday...

THE number of homeowners whose mortgages exceed the value of their home — who are “underwater,” in industry parlance — recently hit a grim milestone.

Wall Street may have discovered a way out from under the bad debt and risky mortgages that have clogged the financial markets. The would-be solution probably sounds familiar: It's a lot like what got banks in trouble in the first place.

<p>The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 9.24 percent of all loans outstanding as of the end of the second quarter of 2009, up 12 basis points from the first quarter of 2009, and up 283 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate increased 64 basis points from 8.22 percent in the first quarter of 2009 to 8.86 percent this quarter, the Mortgage Bankers Association is reporting.</p>

August 13, 2009 More than half of Sacramento-area mortages are under water UPDATE: Here are the local numbers: Rather shocking.... In Sacramento-Arden-Arcade-Roseville-Woodland, 257,871, or 51.10 percent of all properties with a mortgage, are in negative equity. Santa Ana-based First American CoreLogic just minutes ago released a grim look at the mortgage crisis, reporting that 32.2 percent of all U.S. mortgages were tied to homes worth less than the amount of their loans. In California, it says, 42 percent of mortgages are in that condition often referred to as "under water." The report says 2.9 million California mortgages are in a...

Almost half of homeowners with a mortgage could be underwater by 2011, says Deutsche Bank. We asked how that will play out. NEW YORK (Fortune) -- Karen Weaver, global head of Deutsche Bank's securitization research division -- responsible for analyzing credit default swaps, collateralized mortgage obligations, and other exotic Wall Street products -- said last week that 48% of U.S. mortgage owners will end up owing more than their home is worth by 2011. The figure may have left many Americans wondering how this could be possible. But consider that 27% of U.S. homeowners with a mortgage are already "underwater."...

With everyone hoping for positive GDP growth in Q3 and Goldman Sachs analyst Jan Hatzius now predicting growth at an annual rate of three percent in the second half of the year, the banks, investors, and politicians are all hoping that that nasty problem of foreclosures would just go away already. Unfortunately for everyone – especially the people losing their houses – there’s no reason for it to go away.Unemployment is always a lagging indicator, and given the record low number of average hours worked, it will turn around especially slowly this time. Until then, people will continue to lose...

An estimated 25 million homeowners, or 48% of those with mortgages, will owe more on the loan than the house is worth by the first quarter of 2011, according to an analysis by Deutsche Bank released this week.

NEW YORK (Reuters) - The percentage of U.S. homeowners who owe more than their house is worth will nearly double to 48 percent in 2011 from 26 percent at the end of March, portending another blow to the housing market, Deutsche Bank said on Wednesday.

Introduction: For long term readers, you may find that this is a recap of many other things I wrote, however here is an in depth report of the crisis and the solutions. Before beginning, I want to quote from this Wall Street Journal article last fall. Is a housing bailout the solution for clogged-up credit markets and a faltering economy? What the Fed has been doing and did again yesterday hasn't really worked, notwithstanding the pops it produces in the stock market every time it shovels liquidity into the system. The Fed's latest move provides financial institutions another $200 billion...

The Obama administration's first progress report on its foreclosure prevention plan confirms it is off to a slow start. Just 9% of delinquent borrowers in trial modifications so far, the Treasury Department said Tuesday. That translates into 235,247 loans that were at least two months delinquent. Under fire for the program's rocky start, the Obama administration says it is on pace to help up to four million homeowners over the next three years. The initiative was announced in February and the first institutions to join began accepting applications in April.

I am not sure what to do so I thought I would ask for some opinions/advice. We lost our jobs within the last year and were faithful in paying our mortgage on time until May 1st. At that time, I immediately called our bank (a well known institution) and explained our situation. The man told me not to worry, we would not lose our home, and to print the loan modification forms and submit them as soon as possible to our bank. We have a 30 year fixed loan. We did just that and faxed the forms on May 2nd....

So you thought the financial crisis ended the mad leveraged mortgages. Think again. Mortgage bonds guaranteed by U.S. agency Ginnie Mae will probably swell to $1 trillion by the end of 2010 because borrowers with low down payments or bad credit scores can only qualify for government-insured loans, Bank of America Corp. analysts are saying. The Federal Housing Administration, which insures loans with down payments as low as 3.5 percent and has no credit-score requirements, is “the only source of funding for these leveraged borrowers,” according to Ankur Mehta and Ohmsatya Ravi, who wrote the report, say. Loans backed climbed...

Renetta Atterberry thought she had lost her East 102nd Street house. So she was shocked to learn in January -- five years after her mortgage company filed for foreclosure -- that it was still in her name. Worse, the long-vacant rental home had been vandalized and she faced a raft of housing code violations. Since then, she has been saddled with debts of about $12,000 to pay for demolition and back taxes. "I thought I had nothing else to do with that home," said Atterberry. "I was so embarrassed and humiliated by this." Her mortgage company didn't buy the house...

But larger than that - my prediction is Fannie/Freddie and then above and beyond that, for people who do not have 20% down and won't pay for insurance, the FHA - will wage a war against current mortgages. We'll see interest rate buydowns, we'll see principal reductions, we'll see anything and everything that basically gives a big (bleep) you to people who have been honoring the system. In return we will tell those people, well if your neighbor's house goes into foreclosure we will all suffer, so it's a necessary evil.

Are consumers "protected" when they are denied the opportunity to buy products and services that are available to others? Is that what consumers want?...These are the questions raised by the Obama administration's proposal for a Consumer Financial Protection Agency. Traditionally, consumer protection in the United States has focused on disclosure. It has always been assumed that with adequate disclosure all consumers -- of whatever level of sophistication -- could make rational decisions about the products...No more. If the administration's plan is adopted, many consumers will be told that they cannot have particular products...because they are not sophisticated, educated or intelligent...

Remember that infamous meeting last October at the Treasury Department, the one where then-Secretary Henry Paulson locked the chief executives of the nation’s nine largest financial institutions in a room, and wouldn’t let them out until they agreed to accept billions of dollars in government bailout money — whether they wanted it or not? O.K., that’s a bit of an exaggeration. But I was reminded of that meeting on Thursday night when I was shown a letter that the administration had just sent out calling for yet another big meeting at Treasury with yet another sector of the financial industry....

How many uninsured Americans are there really? It’s a number that the mainstream media have repeatedly misrepresented to make the health care “crisis” seem worse than it is.

For more than half a century, Dwelling House Savings & Loan has built a sound reputation for providing affordable home mortgages to Pittsburgh residents whose credit risk is too high and assets too low to qualify for a conventional bank loan. Now its own financial survival could be at stake. The federal Office of Thrift Supervision has ordered the venerable savings and loan institution in Pittsburgh's Hill District to raise more capital by the end of June or face the possibility of being sold or shut down. --snip-- According to Dwelling House officers, a substantial amount of the institution's reserve...

President Obama and James Lockhart have decided to (financially) rape Americans. Yes, really: June 19 (Bloomberg) -- President Barack Obama’s program to help more homeowners refinance may be expanded to include borrowers who owe more than 105 percent of their homes’ values, Federal Housing Finance Agency Director James Lockhart said. The Obama administration is considering allowing Fannie Mae and Freddie Mac to refinance loans with current loan-to-value ratios of 125 percent or higher, Lockhart said at a National Association of Real Estate Editors Association conference in Washington yesterday. Let me be absolutely clear so nobody can ever accuse me of...

The housing crisis is creating ghost towns of once-bustling communities like Merced. In largely abandoned neighborhoods, paved sidewalks and driveways lead to empty lots strewn with utility coils. Unfinished frames with rotting rafters and rusted hinges sit alongside occupied homes. Roughly 40% of the homes in Merced are considered distressed, meaning owners are behind on their mortgage payments or can't make them at all. The toll is expected to rise, even though California extended its moratorium on foreclosures for another 90 days.

Banks' lending down; remain burdened by bad real estate loansThe massive bailout of regional and national banks was supposed to unfreeze lending and help the sputtering economy. But most local banks are trimming their total lending, making it harder to pull the Portland area out of recession. A review of first-quarter 2009 state data shows that nine of the 12 banks based in Portland’s tricounty area reduced their total outstanding loans in the first three months of the year. Though local community banks didn’t issue the risky home mortgages that sparked the global recession, many remain hamstrung by the resulting...

Mortgage rates climb Treasury yields on a tear help pull rates higher; 30-year fixed mortgage jumps to 5.95%. By Julianne Pepitone, CNNMoney.com contributing writer Last Updated: June 11, 2009: 3:03 PM ET NEW YORK (CNNMoney.com) -- Home mortgage rates jumped in the most recent week, pulled higher by skyrocketing Treasury yields. The average 30-year fixed rate soared to 5.95% from 5.45% last week, according to a weekly national survey from Bankrate.com. The 30-year rate is often influenced by the benchmark 10-year bond's yield, which has increased steadily to hover around 4% recently. The yield was 2% just six months ago....

In parts of Southern California, the housing crash has upended a basic tenet of the American dream: that home values always increase over the long term. Properties in several areas are selling for less than they did 20 years ago, and that's not even counting the effects of inflation. Losing two decades' worth of gains in a single downturn "has never happened," said UCLA economist Edward Leamer, who has studied local areas during booms and busts. "You're seeing something that's abnormal." In the 1990s housing bust, "you had a foreclosure here, a foreclosure there. You did not have almost entire...

As she describes it, Beth Jacobson and her fellow loan officers at Wells Fargo Bank “rode the stagecoach from hell” for a decade, systematically singling out blacks in Baltimore and suburban Maryland for high-interest subprime mortgages. These loans, Baltimore officials have claimed in a federal lawsuit against Wells Fargo, tipped hundreds of homeowners into foreclosure and cost the city tens of millions of dollars in taxes and city services. Wells Fargo, Ms. Jacobson said in an interview, saw the black community as fertile ground for subprime mortgages, as working-class blacks were hungry to be a part of the nation’s home-owning...

ALL BUSINESS: Bond-market rout boosts mortgage rates, undermining economic prospects

How could Paul Krugman, winner of the Nobel Prize in economics and author of generally excellent columns in the New York Times, get it so wrong? His column last Sunday--"Reagan Did It"--which stated that "the prime villains behind the mess we're in were Reagan and his circle of advisers," is perverse in shifting blame from the obvious villains closer at hand. It is disingenuous to ignore the fact that the derivatives scams at the heart of the economic meltdown didn't exist in President Reagan's time. The huge expansion in collateralized mortgage and other debt, the bubble that burst, was the...

The next group of Americans to lose their homes seemed to have good credit and affordable loans. But those families have been walloped by the recession. There's a simple reason you shouldn't get too excited about the "green shoots" of an economic turnaround. In the housing market, a lot of prime mortgages are becoming subprime as a new wave of foreclosures begins to hit. Mainstream homeowners -- those previously "safe" borrowers with sound credit who have conservative, fixed-rate mortgages -- are getting into trouble at an alarming rate. In the first quarter, the percentage of these borrowers who were behind...