“They’re probably going to pay a little higher interest rate, but with rates so low, a higher interest rate of 4 percent is not a big deal,” said Rosa Herwick, a broker and owner of Century 21 JR Realty in Henderson, Nev.
Article source: http://www.boston.com/business/personalfinance/articles/2012/02/22/past_foreclosure_means_waiting_years_for_new_loan/
JEFFERSON CITY, Mo. (AP) — The ink wasn’t even dry on a settlement with the nation’s top mortgage lenders when Missouri Gov. Jay Nixon laid claim to a chunk of the money to avert a huge budget cut for public colleges and universities.
He’s not the only politician eyeing the cash for purposes that have nothing to do with foreclosure. Like a pot of gold in a barren field, the $25 billion deal offers a tempting and timely source of funding for state governments with multimillion-dollar budget gaps.
Although most of the money goes directly to homeowners affected by the mortgage crisis, the settlement announced this month by attorneys general in 49 states includes nearly $2.7 billion for state governments to spend as they wish.
Some are pledging to use it as relief for struggling homeowners or to help related initiatives such as a Michigan plan to assist children left homeless by foreclosures. But several states are already planning to divert at least some of the money to prop up their budgets, and more will be wrestling with those decisions in the coming weeks.
For some consumer advocates, the diversion is reminiscent of the 1998 tobacco settlement in which states spent billions on projects that had nothing to do with curbing smoking.
“We shouldn’t be in the position of taking money that is intended to help consumers and their mortgage tribulations and putting that to another purpose,” said Joan Bray, a former Democratic Missouri senator who now is chairwoman of the Consumers Council of Missouri.
States that use the onetime payout for immediate expenses may also face the question of what to do next year when the money is used up. But officials in struggling states say they must deal with the most immediate problems first.
A federal judge in Washington could approve the final settlement by the end of February. Once that happens, money could begin flowing to states within a couple of weeks, arriving just as lawmakers are crafting budgets for the upcoming fiscal year.
Republican legislative leaders in Missouri have already embraced the Democratic governor’s plan to use nearly all of the state’s $41 million settlement payment to help shore up the budget. The mortgage money allowed Nixon to reduce his proposed funding cut for public colleges and universities from 12.5 percent to 7.8 percent — potentially easing student tuition increases.
The money was “as we looked at it, relatively unfettered,” Nixon said. “Clearly the economy was affected all across the country by foreclosure challenges, and I think it is apt and appropriate to use those dollars to help restore some of the challenging cuts that I was forced to make.”
In Pennsylvania, where a fourth straight budget deficit is projected, Democrats are pressing the Republican-run attorney general’s office to use some of its $69 million payment to offset $2 billion in cuts to programs that benefit education, the elderly, disabled or poor.
“The governor’s budget has so many cuts to so many valuable programs, if the attorney general’s office has $69 million, why not use that to offset these cuts to essential programs?” said state Rep. Joe Markosek, the ranking Democrat on the House Appropriations Committee.
Vermont plans to use $2.4 million from the settlement to help balance its budget. Maryland Attorney General Doug Gansler said about 10 percent of his state’s $62.5 million payment will be made available for the governor and lawmakers to spend as they choose.
In Wisconsin, Gov. Scott Walker wants to use $26 million to plug a state budget hole because the foreclosure crisis had a “direct impact on the economy.” But the Republican governor’s plan has ruffled some Democrats, including Milwaukee Mayor Tom Barrett.
St. Louis homebuilder Bob Suelmann, who has a background in real estate and finance, said it’s “ridiculous” for states to divert mortgage settlement payments to other purposes.
“It’s like taking tax money that was supposed to go to road improvements, and then suddenly the bridges are falling down and you don’t know what to do about it,” Suelmann said. “That money should go to something that can directly improve the situation with the housing program.”
When the tobacco settlement was reached, states initially promised to beef up public health with the $206 billion paid out over several decades. Instead, much of the money went to general government operations. State funding for tobacco-prevention programs has now fallen to its lowest level since 1999, according to recent estimates.
“The lesson is advocates have to be vigilant,” said Marie Cocco, a spokeswoman for the Campaign for Tobacco-Free Kids.
Most states will probably use the money for mortgage-assistance hotlines, mediation between borrowers and lenders, legal aid and financial counseling, said Geoff Greenwood, a spokesman for Iowa Attorney General Tom Miller, who was the lead negotiator on the settlement.
But, he added, officials “have to acknowledge that there has been damage done to states and their budgets and their services because of this mortgage crisis. …So states will have some flexibility in how they spend” the money.
Illinois Attorney General Lisa Madigan said she will oppose any efforts to use the money to prop up the state’s shaky budget.
California, which was one of the hardest hit states by the mortgage crisis, will receive the largest payment — about $430 million at a time when the state is facing a $9.2 billion deficit. A spokesman for Gov. Jerry Brown said no decision has been made on how to spend the money.
Some consumer advocates say they will be watching closely to see where the payments are spent.
“As insufficient as it is,” said Kathleen Day, a spokeswoman for the nonprofit Center for Responsible Lending, “this money was intended to go directly to help struggling homeowners.”
Associated Press writers Chris Blank in Jefferson City; Marc Levy in Harrisburg, Pa.; Scott Bauer in Madison, Wis.; David Gram in Montpelier, Vt.; Brian Witte in Annapolis, Md.; Beth Duff-Brown in San Francisco; Chet Brokaw in Pierre, S.D.; Tim Martin in Lansing, Mich.; Christopher Wills in Springfield, Ill.; Randall Chase in Dover, Del.; Norma Love in Concord, N.H.; Rachel La Corte in Olympia, Wash.; and Derek Kravitz in Washington contributed to this report.
Copyright © 2012 The Associated Press. All rights reserved.
Article source: http://www.google.com/hostednews/ap/article/ALeqM5iukyoIUf65FpELcExPtfsIgUp5fw?docId=7ef758ac2fbe43dbbd5907c25a0f4a37
SAN DIEGO — A San Diego real estate agent and eight others have been charged with running a mortgage fraud scheme that authorities say cost lenders $15 million.
Eric Elegado of Escondido and his wife, Charmagne, entered not guilty pleas Tuesday to conspiracy, fraud and money laundering.
Seven other real estate agents and loan officers also are charged.
Prosecutors claim they obtained more than $50 million in mortgage loans for unqualified buyers, many of them poor immigrants, by lying about their finances and even creating phony W-2 forms and bank statements.
Article source: http://www.sacbee.com/2012/02/22/4282614/realtor-8-others-charged-with.html
WESTMINSTER, Calif. — Orange County prosecutors charged two women Wednesday with running real estate fraud schemes that bilked more than $2 million from Vietnamese-Americans who believed they were investing in foreclosed properties or who were themselves in foreclosure.
Loan Thi Tuong Nguyen, 43, of Westminster and Lynn Eichenberger, 42, of Chatsworth were arrested Wednesday and each charged with 15 counts of grand theft, two counts of money laundering and one count of conspiracy to commit grand theft, according to the District Attorney’s office.
Nguyen, a licensed real estate agent, also faces additional charges of forgery and false recording of documents.
An initial court date has not been set for Nguyen and Eichenberger and it wasn’t immediately clear if they had retained attorneys.
Prosecutors are aware of 17 alleged victims and say the investigation is ongoing.
Nguyen is accused of using her contacts in the Vietnamese community to persuade people to invest in foreclosed properties by paying half the value up front to secure them in escrow. She had no authority to sell the properties and instead funneled the money into a business account set up by Eichenberger, prosecutors said.
Nguyen is also accused of telling Vietnamese-Americans in foreclosure on their own homes that she could help them refinance if they paid 50 percent of their mortgage up front. That money also went into a business account set up by Eichenberger, prosecutors said.
Article source: http://www.sacbee.com/2012/02/22/4283321/calif-da-real-estate-fraud-targeted.html
Published February 22, 2012
| The Wall Street Journal
Reuters
WASHINGTON – The U.S. is studying a single way to package home loans into securities as an interim step toward a system that could outlive Fannie Mae and Freddie Mac, mortgage-finance firms that have faced an uncertain future in the wake of the housing market’s bust.
The Federal Housing Finance Agency, the federal regulator for Fannie and Freddie, on Tuesday said it is looking at the development of a system that could take the place of the proprietary ones of both companies.
The housing agency disclosed its thinking in a new 21-page strategic plan for Fannie and Freddie sent to Congress. Congress and the Obama administration have taken few steps toward deciding the fate of the housing giants. The Obama administration, meanwhile, has only offered broad outlines of potential recommendations.
Earlier this month, Treasury Secretary Timothy Geithner pledged to lay out more detail on the administration’s approaches to reforming the US housing finance system this spring. A Treasury spokesman didn’t immediately comment on Tuesday.
The housing regulator, facing a lack of consensus about the future of the two mortgage giants, said it wanted to move forward on interim steps that could make the ultimate unwinding of Fannie and Freddie easier. At the same time, the FHFA said it wanted to keep all options open about how much support the government should provide to the $10.3 trillion US mortgage market.
Fannie and Freddie operated for decades as independent and competitive firms. They have been collaborating on certain issues, such as providing assistance to troubled homeowners, since they were put under federal control in September 2008.
To read more on this story, see The Wall St. Journal article here.
Article source: http://www.foxnews.com/politics/2012/02/22/fannie-freddie-regulator-looks-to-unify-mortgage-securities/
Pacific Investment Management Co. is
quitting the American Securitization Forum (0150170D) after the trade group
declined to issue a statement about investors’ views on the
nationwide foreclosure settlement this month by five banks, two
people with knowledge of the matter said.
Pimco, manager of the world’s biggest bond fund, informed
ASF Executive Director Tom Deutsch of its decision in early
February, said the people, who requested anonymity because the
talks were private. The episode underscored Pimco’s concern that
the trade group doesn’t advocate for debt buyers as well as
banks that underwrite mortgages, the people said.
The foreclosure agreement resolves state and federal probes
into practices such as so-called robo-signing. The settlement
was criticized by money managers who say their clients may bear
part of the costs because lenders, including Bank of America
Corp. (BAC) and JPMorgan Chase Co. (JPM), can get credit for easing terms
on home loans that were packaged into bonds owned by others.
“It treats people’s 401(k)s and pensions like perpetrators
as opposed to victims,” Scott Simon, the mortgage-bond head at
Newport, California-based Pimco, said in a Feb. 9 phone
interview, hours after the settlement was announced.
Simon declined to comment on his firm’s decision to quit
ASF, as did Deutsch, who faced other defections this year over
governance complaints highlighted in a Feb. 2 letter of
resignation to the board from Vernon Wright, its first chairman.
The ASF, which counted Pimco Executive Vice President
Daniel Ivascyn as a board member, was founded in 2002 as part of
the Securities Industry and Financial Markets Association, Wall
Street’s biggest lobbying group. In 2010, the New York-based ASF
decided to become independent of Sifma.
Bondholders asked the ASF to publish a press release on
their views of the pending foreclosure settlement after being
denied last month by Sifma, which cited the “potential legal
issues involving the commercial interests of many of our
members.” Both organizations include banks that sell,
underwrite, service and trade debt.
The ASF is among groups vying to influence policy makers
amid the largest financial regulatory overhaul since the 1930s
and following a crisis triggered partly by securitization, the
packaging of assets such as mortgages into bonds.
The organization helped spur industry-led reforms meant to
revive the almost-frozen market for home-loan securities that
aren’t backed by the government. In August, for example, its
“Project Restart” initiative offered suggested best practices
for new mortgage-bond contracts to aid in dealing with claims of
faulty loans.
Deutsch said in an e-mail that he’s “proud of the
achievements of the ASF in the two years since becoming an
entity distinct from Sifma.” ASF’s annual conference last month
in Las Vegas drew more than 5,000 people, a record, he said.
In 2009, asset managers seeking more outlets for their
opinions started the Association of Mortgage Investors, which
has issued press releases critical of the foreclosure deal.
Yesterday, in a statement, the group called for monthly reports
on steps banks are taking to adhere to the settlement. The
Association of Institutional Investors, which includes larger
asset managers such as Loomis Sayles Co., was formed in 2010.
Wright, an ASF founder and advisory board member who was
chief financial officer of credit-card issuer MBNA Corp., said
in his letter that the group’s directors were frustrated in
attempts to win governance changes. Wright confirmed his
resignation letter and declined to comment further. Charlotte,
North Carolina-based Bank of America acquired MBNA in 2006.
The ASF, as part of its divorce from Sifma, created a
separate entity to house its operations, Wright said in the
letter. As a result, directors haven’t been able to see
financial information, including staff pay, and have no legal
control over the group, he said. The “corporate-governance
concerns lead me to the conclusion that the executive director
is not being properly supervised,” Wright wrote.
Gregg Silver, CFO of South Dakota-based 1st Financial Bank
USA and a member of ASF’s management committee, said in a phone
interview that he resigned last month for reasons similar to
those expressed by Wright. ASF Chairman Ralph Daloisio, a
managing director at Paris-based Natixis, declined to comment.
“Financial statements have been seen by a number of
members of the organization,” Deutsch said. “Those statements
demonstrate that the financial position of the ASF has never
been stronger.”
The completion of its separation from Sifma “has
unfortunately taken longer than expected,” he said. Resolving
the remaining issues “will allow the ASF to take the final
steps toward becoming a complete, independent entity.”
To contact the reporters on this story:
Bradley Keoun in New York at
bkeoun@bloomberg.net;
Jody Shenn in New York at
jshenn@bloomberg.net.
To contact the editors responsible for this story:
David Scheer at
dscheer@bloomberg.net;
Alan Goldstein at
agoldstein5@bloomberg.net
Article source: http://www.bloomberg.com/news/2012-02-22/pimco-said-to-quit-mortgage-bond-group-after-foreclosure-deal-disagreement.html
FORT LAUDERDALE, Fla., Feb. 21, 2012 — /PRNewswire/ – Next One Interactive, Inc. (OTCBB:NXOI), (“Next 1″) today announced it will be expanding its Real Estate Video on Demand (VOD) Network to three new cities in March. This VOD technology, that provides a single automated television and web marketing solution for real estate professionals, will soon be available in Orlando, Phoenix and Las Vegas.
These cities have been selected because they have experienced some of the largest declines in real estate pricing and rank amongst the highest in bank foreclosures across the US. The Company sees an opportunity to utilize both its real estate and travel relationships to create two unique incentives for marketing properties from these cities. First, the high capacity tourist appeal of amusement/theme parks, gaming and golf/sun destinations targets Northern US residents seeking second homes to escape cold weather during the winter months. Second, these cities offer housing at a substantial reduction in pricing, as homes are on average, 60% lower in price, compared to peak pricing in 2006. Additionally, recent activity shows an increase in European residents’ interest in purchasing significantly reduced US homes, as a second or third home. For these reasons, the Company will focus distribution on marketing these new cities across its platform to target Northern US residents as well as creating customized television vignettes that promote tourism and real estate ownership opportunities to potential European buyers.
To expand upon home buyers’ interest in additional savings on homes in these high tourism areas, the Company is currently sourcing both home listings and bank foreclosed properties to add to its current Video on Demand inventory. While viewers will be introduced to the potential for significant savings on home listings in some of the United States most desirable tourism locations, the model will help position the company to potentially capture revenue from real estate transactional partners, real estate listing and referral fees as well as travel and tourism advertising. Combining our real estate and travel relationships should also provide a unique synergy for attracting increased awareness on the VOD platform.
“While the recession in the U.S. has been very difficult, there are clearly signs of recovery and we are eager about our new strategic approach in expanding our goal of creating a convenient Video on Demand platform with a now added relevance of distributing to potential homebuyers in specific markets both in the US and abroad,” says Bill Kerby, CEO of Next 1 Interactive.
About Next One Interactive, Inc.
Next 1 Interactive, Inc. (NXOI) is a multi faceted media company specializing in Travel and Real Estate. Next 1 plans the delivery of targeted content via multiple digital platforms including Satellite, Cable, Broadcast, Broadband and Mobile. In today’s digital market Next 1 delivers information and entertainment to consumers. The company business plan calls for multiple revenue streams from real estate and travel content delivery including transactional commissions, referral fees, advertising and sponsorship. The multiple revenue streams and integrated media platforms allow for the delivery of measurable return on investment to its advertisers, sponsors and business partners.
Safe Harbor Statement
This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plan, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks described in statements filed from time to time with the Securities and Exchange Commission. All such forward-looking statements whether written or oral, and whether made by or on behalf of the Company, are expressly qualified by the cautionary statements that may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
Contact: NXOI Corporate Headquarters Next 1 Interactive, Inc.Direct: 954-888-9779investorrelations@nxoi.com
SOURCE Next One Interactive, Inc.
Article source: http://www.sacbee.com/2012/02/21/4279037/next-1-announces-plans-to-expand.html
Commercial real estate company Grubb Ellis Co. on Monday filed for Chapter 11 bankruptcy protection and it agreed to sell almost all of its assets to BGC Partners Inc. Grubb Ellis is the Sacramento region’s third largest commercial real estate firm.
Commercial real estate company Grubb Ellis Co.
on Monday filed for Chapter 11 bankruptcy protection.
Grubb Ellis has agreed to sell almost all of its assets to BGC Partners Inc. (NASDAQ: BGCP), according to a news release from the company.
Santa Ana-based Grubb Ellis (OTCBB: GRBE) listed $150 million in assets and $167 million in debt in the filing. The company said it completed about 12,000 sale and lease transactions last year and manages more than 250 million square feet of property. It said it plans “no disruption to the company’s operations,” according to the news release.
BCG Partners already owns Newmark Knight Frank
.
Grubb Ellis is the Sacramento region’s third largest commercial real estate firm, with 36 agents, according to Business Journal research.
It employs 3,000 people and has offices in 90 U.S. locations.
See all your followed company news on your personalized dashboard.
To access the full benefits of bizWatch and receive a weekly email with aggregated news on all the companies you are following, please provide your email address below.
You must have a bizjournals account to follow a company.
Please Log In or Register.
Article source: http://www.bizjournals.com/sacramento/news/2012/02/21/grubb-ellis-bankruptcy-bgc.html
The slow recovery in the commercial mortgage market in the second half of 2011 will persist throughout 2012, with recapitalization remaining the market’s biggest challenge.
Though the market slowed over the final six months of last year, commercial real estate sales activity “still grew nicely”, analysts at Keefe, Bruyette Woods said. CRE sales activity grew 55% in the second half 2011 from the year earlier.
“We believe that the biggest challenge in the market over the next several years is recapitalization, which will need to occur as underwater mortgages hit maturity,” the analysts said.
They expect a more modest pace of growth in 2012 versus 2011, due partially to economic concerns and difficulty in comparable valuations. “We expect class A properties to continue to drive property sales, so the divergence between class A and distressed prices is likely to persist.”
Between the peak in October 2007 and September 2011 — KBW’s most recent data point — commercial property prices declined 41% to levels not seen since late 2002.
Forward Management said the CRE market bottomed out and is poised for growth, barring an unforeseen crisis or a decline in employment gains. Commercial real estate fundamentals are outperforming residential real estate, and real estate investment trusts could attract more investors in 2012, according to the investment advisory firm.
Distressed properties continue to weigh on the market as a whole.
According to Moody’s ($38.53 0%), distressed sales accounted for nearly 26% of all commercial transactions in September, the 20th straight month of more than 20% of total volume coming from distressed sales.
KBW analysts note that these sales will hang over the commercial market for several years, given a lack of significant demand for these properties.
Commercial mortgage debt grew rapidly from 2002 to 2007, hitting a annual growth peak in 2005 of 15%. However, this debt began to contract in 2009 and continued to decline through the first nine months of 2011. In the third quarter, commercial mortgage debt outstanding declined 4.5% from a year earlier with a 1% drop from the second quarter.
“We expect continued modest declines through 2012, primarily driven by write downs,” KBW analysts said.
jhilley@housingwire.com
Article source: http://www.housingwire.com/article/kbw-analysts-expect-cre-growth-slow-down-2012
By Ronald D. Orol, MarketWatch
WASHINGTON (MarketWatch) — A federal housing regulator on Tuesday suggested government-seized housing giants Fannie Mae and Freddie Mac could each hire an outside investment firm to manage the $1.4 trillion in mortgage assets they own and finance.
The regulator also said Fannie and Freddie will never be able to fully repay the taxpayer for losses incurred.
The Federal Housing Finance Agency, the regulator for Fannie
/quotes/zigman/226360 FNMA
-18.93%
and Freddie
/quotes/zigman/226335 FMCC
-18.02%
, said that hiring an outside investment firm would reduce each firm’s headcount. But the report added that it is likely to be more costly and it poses control and oversight challenges for the two firms.
ECONOMY AND POLITICS
Economy and Politics page
European finance ministers approve the terms of a fresh aid package for
Greece, saying they stand ready to provide up to almost $172 billion in
extra financial assistance to Greece until 2014.
• Economic preview: Headwinds to recovery
• Gasoline fuels consumer prices
•
Congress approves extension of payroll-tax cut
•
Special Election 2012 coverage
• Track the latest economic-data reports
•
Latest news on the Federal Reserve
•
U.S. economic calendar
•
Global economic calendar
•
Political Watch blog
• Columns:
Nutting
Delamaide
Kellner
•
Market Snapshot
Bond Report
Currencies
•
•
Sign up for breaking-news alerts by email
/conga/story/misc/dc.html
193472
Ralph Axel, analyst at Bank of America Merrill Lynch in New York, said that it is unlikely that they would actually act on this possibility.
He said the kind of firms that would be equipped to manage the portfolios, such as BlackRock Inc.
/quotes/zigman/249424/quotes/nls/blk BLK
-0.85%
and Allianz’s
/quotes/zigman/143088 DE:ALV
-0.87%
Pacific Investment Management Co. would charge lots of fees that would add up to more than the savings Fannie and Freddie would receive from laying off staff.
Axel added that he didn’t think that a private company could do a better job packaging and selling Fannie and Freddie securities which he adds are sold easily because of the government guarantee.
“It would be expensive,” Axel said. “I don’t think that private companies could do a better job.”
Read the Fannie Freddie reform report to Congress
The report added that FHFA didn’t believe it would be able to pay back taxpayers “under any foreseeable scenarios.” The two firms have cost taxpayers $183 billion as of Dec. 14.
“[Fannie and Freddie] losses are of such magnitude that the companies cannot repay taxpayers in any foreseeable scenario,” the report said.
The plan also expanded on a concept floated by the Obama administration last year that seeks to induce private mortgage investors back into the single-family and multi-multifamily mortgage markets. The report suggests that Fannie and Freddie could establish loss-sharing arrangements for single-family mortgages.
Axel argued that the approach could have Freddie Mac and Fannie Mae sell single-family mortgage securitizations of which a small slice — 5% or 10% — would be sold without a government guarantee. Investors buying the subordinated security would be the first to take a loss if mortgages in the package default. To attract these investors, Freddie and Fannie would need to offer a higher yield.
However, he added that such an approach would be difficult because mortgage rates have been so low that it would be difficult to achieve the premium investors would seek.
The FHFA report also said that Fannie and Freddie are evaluating whether their multi-family units could operate without government guarantees.
Morgan Stanley in a report about the strategic plan suggested that FHFA may be considering spinning off the “successful multi-family” business owned by Fannie and Freddie. Freddie Mac has already been conducting multi-family securitizations with slices that carried no government guarantee.
In addition, Morgan Stanley also interpreted the report to say that the regulator may be seeking to merge Fannie and Freddie securities into one issuer, though that it would be a lengthy process.
The FHFA report said that such an infrastructure investment would cost taxpayers money but that it could enhance liquidity for mortgage-backed securities.
/quotes/zigman/226360
/quotes/zigman/226335
/quotes/zigman/249424/quotes/nls/blk
/quotes/zigman/143088
Add ALV to portfolio
DE:ALV
Ronald D. Orol is a MarketWatch reporter, based in Washington.
Article source: http://www.marketwatch.com/story/fhfa-eyes-investment-firms-for-mortgage-portfolio-2012-02-21?link=MW_latest_news
