Maine Real Estate Information blog

Daily Real Estate News  |  December 5, 2007

Foreclosure Plan Will Be Greeted With Questions
Treasury Secretary Henry Paulson will unveil a plan on Thursday to forestall foreclosures and ease the housing recession.

The release of plan’s details will coincide with the release of data from the Mortgage Bankers Association that show that homes in foreclosure hit record levels in April through June, and that nearly 17 percent of subprime borrowers missed at least one payment in the first quarter of the year. An additional 2 million home owners will face their first interest-rate reset by the end of 2008.

“This is the most serious housing recession since the Great Depression,” says Mark Zandi, chief economist for Moody’s Economy.com. Zandi predicts that home prices, on average, will fall 7 percent more through next year.

Paulson says he wants state and local governments to be allowed to issue tax-exempt bonds to “temporarily” raise money to help some struggling subprime borrowers refinance.

Questions remain about how many investors, who bought bonds backed by these mortgages and are spread out around the globe, will agree to change the terms of the loans.

Source: USA Today, Noelle Knox (12/4/2007)

Daily Real Estate News  |  December 5, 2007

Bill Would Help Home Owners at Brink of Foreclosure
U.S. Sen. Dick Durbin (D-Ill.) is pushing for a bill that would allow bankruptcy judges to change the terms of a mortgage on the primary residence of owners at risk of foreclosure or bankruptcy.

Judges would be able to lower an adjustable interest rate to a lower, fixed rate. They already have the power to do this for car loans and a number of other debts.

Durbin says his bill could help an estimated 600,000 families at risk of losing their homes because of rising adjustable mortgage rates.

“A strategic change in the bankruptcy code will provide home owners facing foreclosure a degree of financial stability – even when the market cannot,” Durbin said.

Supporters of Durbin’s bill include senior citizens, bankruptcy attorneys, the AFL-CIO, and the NAACP. The American Bankers Association and home builders are among opponents.

Floyd Stoner, a leading lobbyist for bankers, says bankruptcy judges lack expertise to predetermine a loan’s size, value, and length.

Source: The Associated Press, Dennis Conrad (12/05/2007)

During the week after Thanksgiving, mortgage application volume rose 22.5 percent on a seasonally adjusted basis to 791.8, recovering significantly from a holiday slowdown.
On an unadjusted basis, applications rose 51.5 percent and were up 24.2 percent from the same week in 2006.
The Refinance Index increased 31.9 percent to 2761.3 from 2093.0 the previous week. The refinance share of mortgage activity increased to 56.0 percent of total applications from 51.4 percent the previous week.
These numbers reflect a correction made to the Thanksgiving Week numbers released by the association. The previously reported numbers were too high, making the Thanksgiving week fall off more dramatic than was reported last week.
This week’s rising numbers appear to be at least partially in response to falling interest rates.

• 30-year fixed-rate mortgages decreased to 5.82 percent from 6.09 percent
• 15-year fixed-rate mortgages decreased to 5.38 percent from 5.69 percent
• 1-year ARMs increased to 6.28 percent from 6.24 percent

Source: Mortgage Bankers Association (12/05/2007)