Fannie, Freddie to Forgive Mortgage Debt?

By Richard Davies
@daviesabc
Apr 11, 2012 8:01am

Another big push to help troubled homeowners may be in the works. The acting director of the Federal Housing Finance Agency has softened his stand against allowing Fannie Mae and Freddie Mac to reduce mortgage debt for struggling borrowers. Edward DeMarco says his agency is considering whether this change would lower losses by Fannie and Freddie and help stabilize home prices. Taxpayers have already spent $170 billion to bail out the mortgage giants. Principal forgiveness could be offered to 700,000 borrowers at risk of foreclosure. In a CSPAN interview last week, President Obama’s Housing Secretary Shaun Donovan said he believes there is a “compelling” case for principal forgiveness.

Is it merely a correction or a true change of direction? Stocks have been in their biggest losing slide of the year. But the worst might be over.

European stock averages rose this morning. US stock futures were up after five straight days of losses. Both the Dow Jones Index and S&P 500 lost more than 4 percent in value over the past week. The real trigger was last Friday’s relatively weak US jobs report. Then came fresh concern about the weak state of Spain’s economy and debt problems.

Italy’s borrowing costs on short term debt more than doubled in today’s bond auctions. The interest rate demanded by investors for 1 year bonds rose to 2.84 percent from 1.4 percent last month.

Earnings season began with Alcoa reporting a sharp drop in profits. But its first-quarter report still came in stronger than analysts expected. Alcoa sales rose with a rise in demand from car makers, commercial transportation and aerospace companies.

Big oil benefits from high crude prices. Chevron says the price bump will help push first-quarter profits higher than the prior quarter. Chevron also benefited from higher refining profit margins, lower operating costs, and gains from selling assets.

When Brian Dunn quit abruptly as CEO of Best Buy it appeared to be related to the firm’s crumbling business model as a big-box retailer. Now a statement says Dunn resigned as the company looks into his personal conduct. It’s not clear what this involves.

Richard Davies Business Correspondent ABC NEWS Radio twitter.com/daviesabc

Fannie, Freddie to Forgive Mortgage Debt? – ABC News.

Brad Gana’s Texas Home, Destroyed By Hurricane Ike, Faces Foreclosure

The Huffington Post
Harry Bradford
First Posted: 10/31/11 07:01 PM ET
Updated: 10/31/11 11:22 PM ET

Even those that continue to make payments on a house that no longer exists aren’t immune to foreclosure.

Brad Gana, of Seabrook, Texas is being threatened with foreclosure over a home that hasn’t existed since it was destroyed by Hurricane Ike in 2008, local Houston 2 News reports. Furthermore, after the hurricane, which cost the Texas shoreline an estimated $11 billion in damages, reduced the property to an empty slab of concrete, Gana alleges he continued to make payments.

In the meantime, Bank of America, the mortgage lender, took out a forced homeowner’s policy on the property and raised monthly payments. Gana, however, says he was never notified of the change since his mailbox was destroyed by what’s come to be known as the third-most destructive hurricane ever to hit the United States.

The story is only latest public relations mix-up for the company that recently lost its status as the largest bank in the country. It was reported earlier this month that one family, also living in the Houston area, faces foreclosure due to an untransferred title and in spite of making payments on time.

In another case, Bank of America foreclosed on an elderly couple in Pasco County, Florida, in part because they made a payment too early.

But it’s not just foreclosures that has people angry at the bank. BofA made a $6.2 billion profit last quarter, after announcing in September that it would start charging customers a $5 fee to use debit cards next year.

The consequent backlash, led in part by the Occupy Wall Street movement, has been so widespread that the bank is among those reconsidering its position on the idea, CNN Money reports.

Despite repeated stories of allegedly wrongful foreclosures, it appears not everybody is so sympathetic to the affected homeowners. A New York Times op-ed by Joe Nocera, published last week, detailed an office Halloween party from last year at a “foreclosure mill” firm in which employees mockingly dressed as foreclosure victims. A section of the office also appears decorated as a row of foreclosed homes.

As for Gana, he says he can’t understand why a bank would take out a homeowner’s policy on a house that’s no longer there, then threaten the homeowner with foreclosure.

“I was shocked when they said they were foreclosing on it,” he told Houston 2 News. “Bank of America is ruthless in their incompetency.”

via Brad Gana's Texas Home, Destroyed By Hurricane Ike, Faces Foreclosure [WATCH].

Homeowner Asked To Pay $0.00 In Order To Avoid Foreclosure

The Huffington Post
Harry Bradford
First Posted: 6/8/11 10:19 AM ET
Updated: 8/8/11 06:12 AM ET

Of all the foreclosure warnings issued during the housing crisis, perhaps oddest is the one demanding no money at all.

Earlier this year, in Northampton, Massachusetts, a man, referred to in reports only as Mark, received a notice demanding that he pay $0.00 to his mortgage lender, Bank of America, or his home would be seized, according to local television network News 22 WWLP. The notice surprised Mark, who had consistently made his mortgage payments, yet it was indeed no joke, as Mark found his credit score had been downgraded.

Despite the gravity of the situation, Mark understood the absurdity of it all.

“It says, you owe us zero dollars, zero cents. I’m going to write a check to them for zero dollars and have it clear? I couldn’t help but laugh,” he told News 22 WWLP, who, in turn, informed Bank of America of the story after Mark himself had struggled to get in contact with the bank. Turns out, an electronic filing error caused Mark’s payments to end up in the wrong place.

Bank of America made right after the mix-up, making sure Mark’s credit score was restored and, of course, allowing him to keep his home. For his trouble, he also got a little extra in the form $150 and a gift certificate.

The story is only the latest in a string of bizarre foreclosure incidents.

In Jacksonville, Florida, home flipper Perry Laspina ended up not having to pay the remainder of his mortgage on an investment property first purchased in 2006, AOL Real Estate reported in April.

After the value of his investment plunged, the story goes, Laspina found no buyers or renters and so simply stopped making payments. His lender, Wells Fargo, was apparently not at odds with the idea, and the loan was written off, the house subsequently given to Laspina.

Others have found success by taking more direct action against banks. Instead of being foreclosed upon, one couple in Naples, Florida actually foreclosed on Bank of America. After the bank failed to compensate Warren and Maureen Nyergers for legal fees leftover from a wrongful foreclosure lawsuit, the couple, with the help of their lawyer and two sheriff’s deputies, began legally seizing assets from the bank’s branch office.

Then of course, there’s the Bank of America that foreclosed on itself in Charlotte, North Carolina. In that case, Bank of America has filed a foreclosure lawsuit against the owner of a building housing one of the bank’s own branches.

Watch the News 22 WWLP news segment here.

via Homeowner Asked To Pay $0.00 In Order To Avoid Foreclosure (VIDEO).

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