Florida’s Existing Home Sales Up in October 2008

25 11 2008

For the second month in a row, Florida’s existing home sales rose in October, with Florida Realtors® reporting a 15 percent increase in activity in the year-to-year comparison; last month’s sales of existing condos statewide increased 5 percent in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors (FAR).

A total of 10,443 existing homes sold statewide last month, up 15 percent over the 9,118 homes sold in October 2007, according to FAR. Florida Realtors also reported higher statewide existing home and existing condo sales in September compared to the year-ago levels.

Thirteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in October; seven MSAs also showed gains in condo sales, marking the fourth consecutive month that a number of markets have noted higher sales activity.

Florida’s median sales price for existing homes last month was $169,700; a year ago, it was $222,200 for a 24 percent decrease. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in September 2008 was $190,600, down 8.6 percent from a year earlier, according to the National Association of Realtors (NAR). In California, the statewide median resales price was $316,480 in September; in Massachusetts, it was $295,000; in Maryland, it was $271,520; and in New York, it was $215,000.

Market conditions continue to range widely, according to the latest housing outlook from NAR. “A pattern of sharply higher sales in areas with large price declines is well established,” said NAR Chief Economist Lawrence Yun. “Affordability conditions have consistently been a major factor in driving sales. Historically during recessions, buyers have responded to incentives and it’s important for government to keep that in the forefront of housing stimulus decisions.”

In Florida’s year-to-year comparison for condos, 2,956 units sold statewide compared to 2,805 sold in October 2007 for a 5 percent increase. The statewide existing condo median sales price last month was $147,600; in October 2007 it was $192,300 for a 23 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $199,400 in September 2008.

Last month, interest rates for a 30-year fixed-rate mortgage averaged 6.20 percent, down from the average rate of 6.38 percent in October 2007, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s large to medium-size markets, the Miami MSA reported a total of 453 homes sold in October compared to 367 homes a year ago for a 23 percent increase. The existing home median sales price was $246,800; a year ago, it was $354,800 for a 30 percent decrease. In the year-to-year comparison for the existing condo market, a total of 439 units sold in the MSA last month, up 1 percent compared to 436 condos sold the previous October. The market’s existing condo median price was $197,400; a year ago, it was $268,300 for a 26 percent decrease.

Source: Florida Association of Realtors





Florida’s Existing Home Sales Up in October 2008

24 11 2008

For the second month in a row, Florida’s existing home sales rose in October, with Florida Realtors® reporting a 15 percent increase in activity in the year-to-year comparison; last month’s sales of existing condos statewide increased 5 percent in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors (FAR).

A total of 10,443 existing homes sold statewide last month, up 15 percent over the 9,118 homes sold in October 2007, according to FAR. Florida Realtors also reported higher statewide existing home and existing condo sales in September compared to the year-ago levels.

Thirteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in October; seven MSAs also showed gains in condo sales, marking the fourth consecutive month that a number of markets have noted higher sales activity.

Florida’s median sales price for existing homes last month was $169,700; a year ago, it was $222,200 for a 24 percent decrease. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in September 2008 was $190,600, down 8.6 percent from a year earlier, according to the National Association of Realtors (NAR). In California, the statewide median resales price was $316,480 in September; in Massachusetts, it was $295,000; in Maryland, it was $271,520; and in New York, it was $215,000.

Market conditions continue to range widely, according to the latest housing outlook from NAR. “A pattern of sharply higher sales in areas with large price declines is well established,” said NAR Chief Economist Lawrence Yun. “Affordability conditions have consistently been a major factor in driving sales. Historically during recessions, buyers have responded to incentives and it’s important for government to keep that in the forefront of housing stimulus decisions.”

In Florida’s year-to-year comparison for condos, 2,956 units sold statewide compared to 2,805 sold in October 2007 for a 5 percent increase. The statewide existing condo median sales price last month was $147,600; in October 2007 it was $192,300 for a 23 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $199,400 in September 2008.

Last month, interest rates for a 30-year fixed-rate mortgage averaged 6.20 percent, down from the average rate of 6.38 percent in October 2007, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s large to medium-size markets, the Miami MSA reported a total of 453 homes sold in October compared to 367 homes a year ago for a 23 percent increase. The existing home median sales price was $246,800; a year ago, it was $354,800 for a 30 percent decrease. In the year-to-year comparison for the existing condo market, a total of 439 units sold in the MSA last month, up 1 percent compared to 436 condos sold the previous October. The market’s existing condo median price was $197,400; a year ago, it was $268,300 for a 26 percent decrease.

Source: Florida Association of Realtors





Fannie Mae, Freddie Mac Put Foreclosures on Hold

22 11 2008

Freddie Mac and Fannie Mae will suspend foreclosures and evictions for owners of occupied homes through the holidays – the latest effort to keep people in their houses.

Mortgage giants Freddie and Fannie, which were seized by the government in September, announced Thursday that they will contact an estimated 16,000 borrowers who are facing foreclosure or evictions between Wednesday and Jan. 9. Those proceedings will be delayed and the homeowners will have a chance to work with mortgage servicers to modify their home loans into affordable payments.

Freddie Mac says it is on track to help three out of five troubled borrowers avoid foreclosure this year. The suspension, “builds on this momentum and provides a new measure of certainty to many of these families during the holidays,” Freddie Mac CEO David Moffett said in a statement.

Last week Freddie and Fannie – which own or guarantee 31 million mortgages, or 58 percent of the nation’s total – announced a streamlined mortgage-modification program, designed to get borrowers closest to foreclosure into affordable monthly payments. Given that the Federal Housing Finance Agency, which oversees Freddie and Fannie, announced this loan-modification program starting Dec. 15, the decision to suspend foreclosures isn’t surprising, says Keith Gumbinger of HSH Associates. “You don’t want to start the program and find people who have missed the cutoff by a day or a week.”

Consumer advocates are encouraged by the action, but note that these steps “will only help a certain number of borrowers,” says Barry Zigas, director of housing policy at the Consumer Federation of America.

Most loans going into foreclosure are held by other investors. “We hope others will take the cue and offer streamlined modification,” Zigas says.

At least one consumer advocate says that Freddie and Fannie should use the self-imposed moratorium to be more proactive in modifying these loans. “It is a nice step. But where does it take us?” asks Ira Rheingold, executive director of the National Association of Consumer Advocates.

Last year, there were 2.2 million foreclosure filings. The Federal Deposit Insurance Corp. estimates that more than 4.4 million borrowers will become delinquent by the end of next year – not including those backed by Freddie and Fannie.

Source: USA Today





Fannie Mae, Freddie Mac Put Foreclosures on Hold

21 11 2008

Freddie Mac and Fannie Mae will suspend foreclosures and evictions for owners of occupied homes through the holidays – the latest effort to keep people in their houses.

Mortgage giants Freddie and Fannie, which were seized by the government in September, announced Thursday that they will contact an estimated 16,000 borrowers who are facing foreclosure or evictions between Wednesday and Jan. 9. Those proceedings will be delayed and the homeowners will have a chance to work with mortgage servicers to modify their home loans into affordable payments.

Freddie Mac says it is on track to help three out of five troubled borrowers avoid foreclosure this year. The suspension, “builds on this momentum and provides a new measure of certainty to many of these families during the holidays,” Freddie Mac CEO David Moffett said in a statement.

Last week Freddie and Fannie – which own or guarantee 31 million mortgages, or 58 percent of the nation’s total – announced a streamlined mortgage-modification program, designed to get borrowers closest to foreclosure into affordable monthly payments. Given that the Federal Housing Finance Agency, which oversees Freddie and Fannie, announced this loan-modification program starting Dec. 15, the decision to suspend foreclosures isn’t surprising, says Keith Gumbinger of HSH Associates. “You don’t want to start the program and find people who have missed the cutoff by a day or a week.”

Consumer advocates are encouraged by the action, but note that these steps “will only help a certain number of borrowers,” says Barry Zigas, director of housing policy at the Consumer Federation of America.

Most loans going into foreclosure are held by other investors. “We hope others will take the cue and offer streamlined modification,” Zigas says.

At least one consumer advocate says that Freddie and Fannie should use the self-imposed moratorium to be more proactive in modifying these loans. “It is a nice step. But where does it take us?” asks Ira Rheingold, executive director of the National Association of Consumer Advocates.

Last year, there were 2.2 million foreclosure filings. The Federal Deposit Insurance Corp. estimates that more than 4.4 million borrowers will become delinquent by the end of next year – not including those backed by Freddie and Fannie.

Source: USA Today





Jacksonville Home Sales Down, Up Across the State in 3Q 2008

19 11 2008

Sales of existing single-family homes in Florida rose 5 percent in third quarter 2008 compared to the same period last year, according to the latest housing statistics from the Florida Association of Realtors® (FAR). However, sales of existing single-family homes in Northeast Florida fell 15 percent in the third quarter compared with the third quarter of 2007. A total of 33,203 existing homes sold statewide in 3Q 2008; during the same period last year, a total of 31,558 existing homes sold statewide.

“Coming on the heels of positive sales activity in September, Florida’s existing home sales are once again above year-ago levels in the third quarter,” says 2008 FAR President Chuck Bonfiglio. “Despite lending restrictions and the difficulties of finding affordable credit, we’re seeing buyers take advantage of homeownership opportunities in the current market – buyers who want to make a long-term investment in their future. And, more than ever, people are turning to Florida Realtors to find the professional expertise, knowledge and friendly guidance they need to make the complex process of buying or selling their home go more easily and smoothly.”

The statewide existing-home median sales price was $185,400 in the third quarter; a year ago, it was $233,200 for a decrease of 20 percent. In 2003, the third-quarter statewide median sales price was $163,700, which reflects an increase of about 13.3 percent over the five-year period. The median is a typical market price where half the homes sold for more, half for less.

Twelve of Florida’s metropolitan statistical areas (MSAs) reported increased sales of existing homes in the third quarter compared to the same three-month-period a year ago, while seven MSAs also showed gains in condo sales. A number of local markets have reported increased sales activity over the past few months, according to FAR.

Florida Realtors continued to report positive signs for the state’s housing sector in the third quarter, including an increase in pending home sales (based on contracts signed but not closed) and a slower rate of expansion of inventory levels in some areas.

To gain insight into current trends in Florida’s real estate industry, the University of Florida’s Bergstrom Center for Real Estate Studies conducts a quarterly survey of industry executives, market research economists, real estate scholars and other experts. According to the third quarter 2008 survey, the investment outlook for various types of properties remains steady. “People who have responded to our surveys have not lost their faith in Florida as a place to be and a place to invest,” said Dr. Wayne Archer, director of UF’s Bergstrom Center for Real Estate Studies. “We have 40 pages of comments from our respondents, and although the dominant theme is the disruption of financing, perhaps the second theme, as one person put it, is people being on the sidelines with full pads and helmets just waiting to jump back in.”

Over the long term, Florida stands to benefit from the migration of new residents, particularly as baby boomers age, Archer said, adding that the Sunshine State’s mild climate and outdoor amenities continue to make it an attractive retirement destination.

In the year-to-year quarterly comparison for condo sales, 9,472 units sold statewide for the quarter compared to 9,680 in 3Q 2007 for a 2 percent decrease. The statewide existing-condo median sales price was $160,000 for the three-month period; in 3Q 2007, it was $196,000 for an 18 percent decrease.

Continuing low mortgage rates remain another favorable influence on the housing sector. According to Freddie Mac, the national commitment rate for a 30-year conventional fixed-rate mortgage averaged 6.32 percent in third quarter 2008; one year earlier, it averaged 6.55 percent.

The latest industry outlook from the National Association of Realtors® (NAR) cautions the housing sector likely faces disruptions from the still-stabilizing credit market. “Inventory remains high, and price declines are pressuring owners,” said NAR Chief Economist Lawrence Yun. “Additional housing stimulus would stabilize prices more quickly, which in turn would bring faster stability to Wall Street. Removing the repayment feature on the first-time buyer tax credit and permanently raising loan limits would bring more buyers into the market and further reduce inventory.”

Source:





Jacksonville Home Sales Down, Up Across the State in 3Q 2008

18 11 2008

Sales of existing single-family homes in Florida rose 5 percent in third quarter 2008 compared to the same period last year, according to the latest housing statistics from the Florida Association of Realtors® (FAR). However, sales of existing single-family homes in Northeast Florida fell 15 percent in the third quarter compared with the third quarter of 2007. A total of 33,203 existing homes sold statewide in 3Q 2008; during the same period last year, a total of 31,558 existing homes sold statewide.

“Coming on the heels of positive sales activity in September, Florida’s existing home sales are once again above year-ago levels in the third quarter,” says 2008 FAR President Chuck Bonfiglio. “Despite lending restrictions and the difficulties of finding affordable credit, we’re seeing buyers take advantage of homeownership opportunities in the current market – buyers who want to make a long-term investment in their future. And, more than ever, people are turning to Florida Realtors to find the professional expertise, knowledge and friendly guidance they need to make the complex process of buying or selling their home go more easily and smoothly.”

The statewide existing-home median sales price was $185,400 in the third quarter; a year ago, it was $233,200 for a decrease of 20 percent. In 2003, the third-quarter statewide median sales price was $163,700, which reflects an increase of about 13.3 percent over the five-year period. The median is a typical market price where half the homes sold for more, half for less.

Twelve of Florida’s metropolitan statistical areas (MSAs) reported increased sales of existing homes in the third quarter compared to the same three-month-period a year ago, while seven MSAs also showed gains in condo sales. A number of local markets have reported increased sales activity over the past few months, according to FAR.

Florida Realtors continued to report positive signs for the state’s housing sector in the third quarter, including an increase in pending home sales (based on contracts signed but not closed) and a slower rate of expansion of inventory levels in some areas.

To gain insight into current trends in Florida’s real estate industry, the University of Florida’s Bergstrom Center for Real Estate Studies conducts a quarterly survey of industry executives, market research economists, real estate scholars and other experts. According to the third quarter 2008 survey, the investment outlook for various types of properties remains steady. “People who have responded to our surveys have not lost their faith in Florida as a place to be and a place to invest,” said Dr. Wayne Archer, director of UF’s Bergstrom Center for Real Estate Studies. “We have 40 pages of comments from our respondents, and although the dominant theme is the disruption of financing, perhaps the second theme, as one person put it, is people being on the sidelines with full pads and helmets just waiting to jump back in.”

Over the long term, Florida stands to benefit from the migration of new residents, particularly as baby boomers age, Archer said, adding that the Sunshine State’s mild climate and outdoor amenities continue to make it an attractive retirement destination.

In the year-to-year quarterly comparison for condo sales, 9,472 units sold statewide for the quarter compared to 9,680 in 3Q 2007 for a 2 percent decrease. The statewide existing-condo median sales price was $160,000 for the three-month period; in 3Q 2007, it was $196,000 for an 18 percent decrease.

Continuing low mortgage rates remain another favorable influence on the housing sector. According to Freddie Mac, the national commitment rate for a 30-year conventional fixed-rate mortgage averaged 6.32 percent in third quarter 2008; one year earlier, it averaged 6.55 percent.

The latest industry outlook from the National Association of Realtors® (NAR) cautions the housing sector likely faces disruptions from the still-stabilizing credit market. “Inventory remains high, and price declines are pressuring owners,” said NAR Chief Economist Lawrence Yun. “Additional housing stimulus would stabilize prices more quickly, which in turn would bring faster stability to Wall Street. Removing the repayment feature on the first-time buyer tax credit and permanently raising loan limits would bring more buyers into the market and further reduce inventory.”

Source:





Duval Schools in Jacksonville Get $400K AT&T Grant

13 11 2008

AT&T gave the Duval County School System a four-year, $400,000 grant to ensure students who started high school this year will graduate in 2012.

The grant funds the AT&T Aspire initiative, Communities In Schools of Jacksonville. The funds will expand the organization’s existing high school dropout prevention efforts to a total of six Jacksonville schools and more than 1,000 students.

AT&T Aspire is a national initiative. In addition to program grants it also funds a student shadowing initiative, underwriting of national research and support for 100 state and community dropout prevention summits.

Source: Jacksonville Business Journal





Citigroup Offers $20B in Mortgage Relief

12 11 2008

Citigroup Inc. says it will offer to modify terms on up to $20 billion in mortgages.

The program will be extended to borrowers who are making their payments but are in danger of falling behind.

It includes subprime borrowers as well as those with good credit who took out prime loans.

The New York-based Citigroup says it expects about 130,000 customers will see lower mortgages. The program is limited to customers whose mortgage payments equal more than 40 percent of their income.

Citi joins Charlotte, N.C.-based Bank of America Corp. and JPMorgan Chase & Co. of New York in offering loan modifications. The Federal Deposit Insurance Corp. also has been offering help to borrowers whose mortgages are serviced by IndyMac Bancorp, which the FDIC took over in July. Bank of America has 42 branches in the Albany, N.Y., area.

Source: The Business Review





Duval Schools in Jacksonville Get $400K AT&T Grant

12 11 2008

AT&T; gave the Duval County School System a four-year, $400,000 grant to ensure students who started high school this year will graduate in 2012.

The grant funds the AT&T; Aspire initiative, Communities In Schools of Jacksonville. The funds will expand the organization’s existing high school dropout prevention efforts to a total of six Jacksonville schools and more than 1,000 students.

AT&T; Aspire is a national initiative. In addition to program grants it also funds a student shadowing initiative, underwriting of national research and support for 100 state and community dropout prevention summits.

Source: Jacksonville Business Journal





Realtors Help Buyers, Sellers with Short Sales

12 11 2008

When families lose their homes to foreclosure, communities, the housing market and the economy all suffer. Short sales are one way that some troubled homeowners can avoid foreclosure, a topic discussed by Realtors at the Short Sales Solutions session, part of the National Association of Realtors® (NAR) 2008 Conference & Expo in Orlando.

“Homeowners who are struggling to make their mortgage payments must have more options available to them to avoid foreclosure,” said NAR President Richard Gaylord. “Short sales can benefit not only the homeowner in question, but also buyers, lenders and the surrounding community. With their established lender relationships and insights into complicated real estate transactions, Realtors can add real value for both sellers and buyers interested in short sales.”

A short sale is a transaction in which the seller’s mortgage lender agrees to accept a payoff of less than the balance due on the loan. The lender often receives a higher amount of the remaining loan balance than it would from the sale of the property after a foreclosure. This helps support home values in the surrounding community. Short sales also help homeowners maintain some level of credit.

According to Freddie Mac, 50 percent of homeowners entering the foreclosure process did not have any contact with the lender first. One of the most valuable services Realtors can provide to clients who may be facing a foreclosure is guiding them through the lender’s short sale process and facilitating communication, according to session panelists Michael and Stacey Spikes of America’s Home Rescue.

“The process for short selling an FHA loan is different than the process for shorting a Veterans Administration or conventional loan,” said Stacey Spikes. “Knowing the type of loan the seller has, and understanding the proper steps for short selling that loan and the order of those steps, is critical.”

Homeowners who are having difficulty making their mortgage payments and who may be considering a short sale must generally meet three qualifying criteria: they must be behind on their payments, be able to prove a legitimate hardship, and have little or no equity in their home.

While a typical real estate transaction involves two real estate professionals, a seller, a buyer, and the buyer’s lender, a short sale can include all of these parties in addition to the seller’s loan servicer, housing counselor, junior lien holders, mortgage investors and mortgage insurers. In addition to the number of parties involved, Realtors say that other challenges can make short sales difficult. These include burdensome paperwork, appraisals that do not consider the sellers’ duress or the number of foreclosures in a community, over-burdened loss mitigation departments, and complications created by second mortgages.

NAR has created a working group to examine the problems and difficulties surrounding short sales and to educate its members on how to best work with their clients through this process. NAR is also reaching out to its partners in the housing and mortgage industry to encourage adoption of principles and practices to streamline the short sale process.

“Short sales give many families in financial difficulties the possibility of salvaging their credit and avoiding the embarrassment of a foreclosure,” said Gaylord. “Realtors across the country stand ready to help.”

Source: Florida Association of Realtors





Citigroup Offers $20B in Mortgage Relief

12 11 2008

Citigroup Inc. says it will offer to modify terms on up to $20 billion in mortgages.

The program will be extended to borrowers who are making their payments but are in danger of falling behind.

It includes subprime borrowers as well as those with good credit who took out prime loans.

The New York-based Citigroup says it expects about 130,000 customers will see lower mortgages. The program is limited to customers whose mortgage payments equal more than 40 percent of their income.

Citi joins Charlotte, N.C.-based Bank of America Corp. and JPMorgan Chase & Co. of New York in offering loan modifications. The Federal Deposit Insurance Corp. also has been offering help to borrowers whose mortgages are serviced by IndyMac Bancorp, which the FDIC took over in July. Bank of America has 42 branches in the Albany, N.Y., area.

Source: The Business Review





Realtors Help Buyers, Sellers with Short Sales

11 11 2008

When families lose their homes to foreclosure, communities, the housing market and the economy all suffer. Short sales are one way that some troubled homeowners can avoid foreclosure, a topic discussed by Realtors at the Short Sales Solutions session, part of the National Association of Realtors® (NAR) 2008 Conference & Expo in Orlando.

“Homeowners who are struggling to make their mortgage payments must have more options available to them to avoid foreclosure,” said NAR President Richard Gaylord. “Short sales can benefit not only the homeowner in question, but also buyers, lenders and the surrounding community. With their established lender relationships and insights into complicated real estate transactions, Realtors can add real value for both sellers and buyers interested in short sales.”

A short sale is a transaction in which the seller’s mortgage lender agrees to accept a payoff of less than the balance due on the loan. The lender often receives a higher amount of the remaining loan balance than it would from the sale of the property after a foreclosure. This helps support home values in the surrounding community. Short sales also help homeowners maintain some level of credit.

According to Freddie Mac, 50 percent of homeowners entering the foreclosure process did not have any contact with the lender first. One of the most valuable services Realtors can provide to clients who may be facing a foreclosure is guiding them through the lender’s short sale process and facilitating communication, according to session panelists Michael and Stacey Spikes of America’s Home Rescue.

“The process for short selling an FHA loan is different than the process for shorting a Veterans Administration or conventional loan,” said Stacey Spikes. “Knowing the type of loan the seller has, and understanding the proper steps for short selling that loan and the order of those steps, is critical.”

Homeowners who are having difficulty making their mortgage payments and who may be considering a short sale must generally meet three qualifying criteria: they must be behind on their payments, be able to prove a legitimate hardship, and have little or no equity in their home.

While a typical real estate transaction involves two real estate professionals, a seller, a buyer, and the buyer’s lender, a short sale can include all of these parties in addition to the seller’s loan servicer, housing counselor, junior lien holders, mortgage investors and mortgage insurers. In addition to the number of parties involved, Realtors say that other challenges can make short sales difficult. These include burdensome paperwork, appraisals that do not consider the sellers’ duress or the number of foreclosures in a community, over-burdened loss mitigation departments, and complications created by second mortgages.

NAR has created a working group to examine the problems and difficulties surrounding short sales and to educate its members on how to best work with their clients through this process. NAR is also reaching out to its partners in the housing and mortgage industry to encourage adoption of principles and practices to streamline the short sale process.

“Short sales give many families in financial difficulties the possibility of salvaging their credit and avoiding the embarrassment of a foreclosure,” said Gaylord. “Realtors across the country stand ready to help.”

Source: Florida Association of Realtors





JP Morgan Chase Unveils $70B Mortgage Modification Program

1 11 2008

JP Morgan Chase & Co. on Friday became the latest major bank to beef up its mortgage modification efforts as the government also considers a plan to help homeowners avoid foreclosure.

JP Morgan’s expanded program aims to help avoid foreclosures on an estimated $70 billion in loans, which could help as many as 400,000 customers. The New York-based banking giant has already modified about $40 billion in mortgages, helping 250,000 customers since early 2007.

JP Morgan will not put any loans into foreclosure as it implements the expanded program over the next 90 days.

The $70 billion estimate is projected over a two-year period, but could be larger and last more than two years _ as long as the company sees a need among troubled borrowers, said Charlie Scharf, JP Morgan’s chief executive of retail financial services.

“We think it’s the right thing to help as many people who want to stay in their homes,” Scharf said in an interview.

Scharf said the modifications at JP Morgan will range from reducing rates to extending terms to completely replacing products. Modification options will be given to customers based on their current product and needs, Scharf added.

The program will also be offered to customers with loans held by Washington Mutual Inc. and EMC. JP Morgan acquired Washington Mutual last month after the bank became the largest in the nation’s history to fail. EMC was a mortgage unit of Bear Stearns Cos., which JP Morgan acquired in February.

With defaults mounting, lenders like JP Morgan and Bank of America Corp. have an incentive to get more aggressive about modifications, particularly because both lenders want to protect their brand image.

“These are very big, large retail banks,” said Dain Ehring, chief executive of Dorado Corp., a San Mateo, Calif.-based mortgage technology company. “There’s a vested interest in keeping their customers.”

Bank of America has said that starting Dec. 1, it will modify an estimated 400,000 loans held by newly acquired Countrywide Financial Corp. as part of an $8.4 billion, legal settlement reached with state officials in early October.

Meanwhile, the Bush administration is expected to soon announce a new plan to help about 3 million homeowners avoid foreclosure, though administration officials say several different ideas are on the table, and that no announcement is imminent.

The plan would be the most aggressive effort yet to limit damage from the U.S. housing recession.

The uptick in loan modification efforts was kicked off in August by the Federal Deposit Insurance Corp., which took over failed lender IndyMac Bancorp in July.

More than 4 million American homeowners with a mortgage were at least one payment behind on their loans at the end of June, and 500,000 had started the foreclosure process, according to the most recent data from the Mortgage Bankers Association.

Nationwide, almost one out of every five homeowners with a mortgage owes more to their lender than their properties are worth, according to a report released Friday by First American CoreLogic.

JP Morgan’s enhanced program will include the opening of 24 regional counseling centers, the hiring of 300 additional loan counselors, new financing alternatives, reaching out to borrowers with pre-qualified modification terms and a new process to independently review each loan before it is moved into foreclosure.

Face-to-face meetings with customers and adding staff to help customers in their neighborhoods was a key part of the program, Scharf said, adding that JP Morgan worked with community groups and local organizations to draw up the plan.

One of the biggest stumbling blocks JP Morgan has found in trying to modify loans is actually getting in touch with customers, he added.

When JP Morgan acquired Washington Mutual and EMC, it also acquired portfolios of mortgages that included option adjustable-rate mortgages. Also known as pay-option, or pick-a-payment mortgages, those loans allow customers to choose from multiple payment options, including paying less than the interest due, which in turn increases the balance of the loans.

JP Morgan, which did not originate option ARMs, said modifications for those loans would eliminate the option to pay less than the outstanding interest.

Source: AP








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