Dawn Thomas- what is happening in real estate

Beyond the Headlines- What’s Happening in Real Estate Pt 45

by The Dawn Thomas Team on August 23, 2013

The Dawn Thomas Team is constantly trying to keep our clients and the inquiring public up to date on the goings-on of the Real Estate Market. These days there is so much information coming out daily that it’s hard to keep it all straight and not miss important articles. We’ve recently written about sellers, buyers, taxes and loans-all of these things are important factors in the Real Estate Market-a very integral arm of our current economic climate. So today we give you two articles–and a bit of advice– that we think are important for you, our clients and the public, to know. Read on!
CONSUMER WATCHDOG SAYS MORTGAGE SERVICING STILL RIDDLED WITH PROBLEMS
Source: The Washington Post
Error-prone and even abusive practices still plague the mortgage servicing business, according to a new report from the Consumer Financial Protection Bureau (CFPB). The report indicates that servicers have made a variety of mistakes, including sloppy payment processing, poor communications with consumers, and insufficient programs to ensure compliance with federal laws. Under the 2010 Dodd-Frank law, the CFPB is tasked with oversight of consumer products, including mortgages and credit cards, due to issues that stemmed from the 2007-2009 financial crisis.
Making sense of the story

• The CFPB has launched investigations into the conduct of banks and other financial firms since many companies continue to violate the terms of the 2012 National Mortgage Settlement.
• In some instances, homeowners faced extra fees due to the sloppy payment processing of mortgage servicers. Also, some homeowners were not notified that their loans were transferred to another company.
• Non-bank servicing firms, which are now subject to examinations, reportedly lack formal procedures to address consumer complaints or ensure quality control. The report shows an absence of systems for compliance management.
• “Deceptive communications to borrowers” about modification requests remains an issue, and services failed to help struggling homeowners find more manageable repayment plans where possible. Applications for loan modifications also took too long to process.
• New mortgage servicing standards are set to take effect in January 2014 to force servicers to give homeowners easy access to information about their loans, among other things. The CFPB issued the new standards to promote greater transparency.

Read the full story

DEBUNKING THE MYTH OF STRATEGIC DEFAULT
Source: UCLA
Researchers at UCLA’s Ziman Center for Real Estate say data suggests that “strategic” defaults during the 2007-2009 recession were relatively rare. They found that job loss increases the probability of default between 5 to 13 percentage points, and severe negative equity (-20% or more) also increases the probability of default by 5 to 18 percentage points. Reportedly, job loss is the main “single trigger” determinant of default, which could have policy implications when it comes to promoting temporary mortgage modifications.
Read the full story

This blog is courtesy of The Dawn Thomas Team who is an award-winning Real Estate Agent team at Intero Real Estate Services in Los Altos 650-701-7822. We help nice people with selling and buying homes in the greater Silicon Valley and Beyond!

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