One of the Federal Reserve's top economists denounced the Obama administration's approach to stemming the growing foreclosure crisis, saying it's part of "three years of failed policies" intended to help homeowners avoid losing their homes.

"We can't prevent millions of foreclosures using the tools people are currently using," Paul S. Willen, a senior economist and policy adviser in the research department of the Federal Reserve Bank of Boston, said Monday during a mortgage and housing finance conference held at the Federal Deposit Insurance Corporation in Arlington, Va.

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LOS ANGELES (AP, Alex Veiga) -- Lenders seized more U.S. homes this summer than in any three-month stretch since the housing market began to bust in 2006. But many of the foreclosures may be challenged in court later because of allegations that banks evicted people without reading the documents. A total of 288,345 properties were lost to foreclosure in the July-September quarter, according to data released Thursday by RealtyTrac Inc., a foreclosure listing service. That's up from nearly 270,000 in the second quarter, the previous high point in the firm's records dating back to 2005. Read ...continue reading

The Obama administration is trying to jump-start its sputtering attempts to tackle the foreclosure crisis with an effort to assist homeowners who owe more on their properties than their homes are worth. Starting Tuesday, the Federal Housing Administration will permit lenders to give these borrowers refinanced loans backed by the government. The lenders will be required to forgive at least 10 percent of the original mortgage amount. Investors who have control over the mortgages as part of their large portfolios will select which borrowers are invited to participate. The plan was first announced in March. Its rollout represents the latest of numerous efforts by the administration to address the housing bust. So far, the government has only nibbled around the edges of the crisis, as its programs have run into numerous problems. Read the rest of the article here:  ...continue reading

Mark Engler - September 3, 2010 12:00 pm Undocumented immigrants streaming into this country from south of the border drive down wages and steal jobs that could otherwise go to out-of-work Americans. Right? Wrong. As it turns out, immigrant workers play an important role in building our economy and bolstering institutions such as social security. In other words, they’re raising your wages and paying for your retirement. So this Labor Day might be a good opportunity to show a little gratitude. Just in time for the holiday weekend, the Federal Reserve Bank of San Francisco released a research summary entitled, “The Effect of Immigrants on U.S. Employment and Productivity.“ Its conclusion was not what most people (or at least most people who attend Glenn Beck rallies) expect. Read the rest of the article here: ...continue reading

A study by research firm Campbell Surveys shows a decrease in home prices from May to June 2010 in three out of four property categories: move-in ready foreclosed properties, short sale and non-distressed properties. The prices for damaged foreclosed properties rose by 5.9 percent in June. Campbell Surveys research director Thomas Popik believes the "price declines are related to decreased homebuyer demand surrounding the end of the tax credit." This is demonstrated by the number of first-time buyers who bought homes in March compared to those who bought in June: 48 percent and 42 percent respectively. Campbell Surveys expects the decrease in home prices to continue throughout July and August. Find the article here  ...continue reading

July 19, 2010 - Immigration Reform with Secretary Solis and AFL-CIO President Richard Trumka View the Immigration Reform with Secretary Solis and AFL-CIO President Richard Trumka Video here ...continue reading

Dear Colleagues: Centro de los Derechos del Migrante , a really smart organization fighting for migrant workers, has just released with AU's law school an important report documenting the devastating conditions faced by women guest workers picking crabs in Maryland's Eastern Shore. The report is available here   I can't begin to sum up effectively the findings of this report. Suffice it to say, this is only a brief look:  Maryland crab companies systematically displaced low-income African American workers with guest workers on H-2B visas, starting in the 1980s, so that now 56% of Maryland crab companies relied on H-2B workers to process 82% of the state's crab meat.  The women who come on H-2B visas come from rural poverty in Mexico -- after paying a fee to the recruiter, usually so large the women have to obtain a loan (with as much as 15% interest), despite laws forbidding such fees.  They end up isolated in very rural areas on the ...continue reading

The Center for Responsible Lending, a nonprofit research group, is reporting that black and Latino borrowers are disproportionately affected by the foreclosure crisis. The study includes an analysis of government and industry data on loans made between 2005 and 2008 and although whites make up most of the foreclosures, the rate of foreclosure is worse for minority communities. For example, the percentage of white borrowers who lost their homes to foreclosure was 4.5 percent while the percent of black and Latino borrowers who lost their homes was 7.9 and 7.7 percent respectively. The study shows that the foreclosure crisis is having a more negative impact on minority groups, even those with higher incomes. Find the report here Find the article here   ...continue reading

The FBI has released the 2009 Mortgage Fraud Report which provides insight into last year’s cases of mortgage fraud and includes current projections, issues and mortgage fraud "hot spots." The report notes that pending investigations related to mortgage fraud increased by 71 percent from one year ago and involved over $1 million in dollars lost. States with the highest rates of mortgage fraud were California, Florida, Illinois, Michigan, Arizona, Georgia, New York, Ohio, Texas, the District of Columbia, Maryland, Colorado, New Jersey, Nevada, Minnesota, Oregon, Pennsylvania, Rhode Island, Utah, and Virginia. The report also identifies the most common fraud schemes including loan origination scams, foreclosure "rescue" programs and builder bailouts, plus lists emerging mortgage fraud schemes such as those linked to commercial real estate and condo conversions. Find the report here Find the article here   ...continue reading

The Treasury Department reported on Monday that about one-third of the borrowers in the Obama administration’s foreclosure assistance program have dropped out as of one month ago. The total number of dropouts is 436,000, which includes 155,000 borrowers that left the program last month alone. Approximately 340,000 borrowers have obtained permanent modifications and are up-to-date on their payments. The administration says that those who drop out will likely get help from other resources, but some analysts say this trend could slow economic recovery. Many have fallen out of the program because of new documentation requirements. For example, the program previously did not require proper proof of income and once this changed more people were disqualified or dropped out. Some blame the banks for loosing paperwork. Regardless of reason, the number of people leaving the program could result in a new round of foreclosures which would negatively impact housing and economic recovery. Find ...continue reading

Home foreclosure rates in the U.S. reached a record high in May with increases in every state. The increase in lender property seizures resulted in a 44 percent increase in the number of bank repossessed properties from one year ago. RealtyTrac’s senior vice president for marketing, Rick Sharga, expects numbers in June to be even higher as lenders continue repossessing properties. May 2010 was the first time that every state in the country saw an increase in repossessions from one year earlier. The unemployment rate fell from 9.9 percent in April to 9.7 percent in May, and new defaults were down 7 percent during that same period. For 41 months in a row, Nevada has had the highest foreclosure rate. The 10 hardest hit states that account for 70 percent of all U.S. foreclosure are California, Florida, Michigan, Arizona, Illinois, Nevada, Georgia, Texas, Ohio and New Jersey. Find the article here   ...continue reading

RealtyTrac’s U.S. Foreclosure Market Report showed that foreclosure filings in May 2010 were down 3 percent from one month before (foreclosure filings include default notices, scheduled auctions and bank repossessions). This is an increase of less than 1 percent from one year ago. Chief executive officer at RealtyTrac, James J. Saccacio, believes this confirms a leveling off of trends seen in April. Still, lenders are working through the backlog that has gathered over the past two years and trying to move those inventories. REOs, or bank repossessions hit a record high in May, up 1 percent from one month prior and up 44 percent from one year ago. During the past year, every state in the U.S. has seen an increase in REOs. Find the article here ...continue reading

Standard & Poor’s Ratings Services has released a report that points to shadow inventories as cause for declining home prices. The number of properties backlogged will vary from place to place and is likely to determine how quickly home prices will stabilize. Shadow inventory pertains to properties over 90 days late, in foreclosure or REO but are not yet on the market. This inventory swelled over the past two years as homeowners defaulted and went into foreclosure faster than existing defaults could be resolved. Demand needs to meet this inventory in order for home prices to stabilize or increase, otherwise home prices will fall. S&P says it will take three years to clear the current inventory. Shadow inventories vary greatly from one city to the next. Find the article here ...continue reading

According to RealtyTrac senior vice president, Rick Sharga, a second wave of toxic loans is poised to flood the market causing the foreclosure issue to worsen this year. These loans will be made up primarily of resetting option-ARM mortgages as well as alternate-A and subprime loans, and most of the defaults will be driven by the unemployment issue. The surge is projected to be as bad as the spike that took place during winter 2007-2008.   An increase in strategic defaults is also expected, and states not previously considered to be in crisis will experience more problems. However, RealtyTrac predicts that the foreclosure rate should decrease after that and stabilize by the fall of 2012. Still, home prices will not rebound until later because of the abundant shadow inventory. Consumers can learn more about their real estate markets by visiting RealtyTrac.com and doing a “Home Values” search by entering their zip code.   Find the article here   ...continue reading

In an effort to keep veterans in their homes, the VA has set new loan modification guidelines for VA-guaranteed home loans which allow servicers to restructure loans using HAMP. Before homeowners can be eligible for HAMP, they must try all other traditional loss mitigation options. If no affordable payment can be found through these options, the servicer must consider a HAMP-style modification.   These changes are effective immediately. The VA HAMP modifications do not need to adhere to the Treasury rule that the original loans had to be originated on or before January 1, 2009.     Find the article here   ...continue reading

Homeowners with GSE loans who are unable to get a modification through the government foreclosure prevention program can soon opt for a short sale or deed-in-lieu of foreclosure through Freddie Mac or Fannie Mae. Servicers have been given new guidelines that allow borrowers to utilize these options. When the Home Affordable Foreclosure Alternatives (HAFA) program began in April, GSEs were not included but Fannie and Freddie now want their servicers to implement HAFA immediately and are requiring them to do so by August 1, 2010. Borrowers can do a HAFA short sale or deed-in-lieu after all other workout options have failed.   Financial incentives will be given to servicers and borrowers who avoid foreclosure using this option. Servicers will receive $2,200 for HAFA short sales and $1,500 for deed-in-lieu of foreclosure and borrowers will receive $3,000 for relocation.   Find the article here         ...continue reading

This article highlights how current homeowners who are struggling financially are changing their tack as they see financial institutions turn profits but still refuse to adjust mortgage amounts. In the past, these homeowners would do anything to hang onto their homes but now, many are choosing to walk away.   Although there has been some improvement in the housing market, the amounts of almost one-quarter of mortgages in the US are higher than the worth of the home. Economist Chris Thornberg says that homeowners are beginning to realize the length of time it will take to recoup their losses from such negative equity. Arizona University law professor Brent T. White believes that homeowners are angry at financial institutions that created the financial crisis in the first place and are finding it makes more financial sense to walk away from their homes. Luigi Zingales, a professor at the University of Chicago’s Booth School of Business, says that 35% of defaults in ...continue reading

The government and lender responses to the national housing crisis have created an interesting twist for borrowers: their negotiation powers increase after foreclosure proceedings start. A Boston collaborative – consisting of Boston Community Capital (a nonprofit community development financial institution), City Life/Vida Urbana and students and professors from Harvard Law School – is helping borrowers tap into this opportunity.   When lenders are not willing to adjust mortgage balances, they often find themselves stuck with foreclosed-upon homes. Boston Community Capital is buying these homes and then selling or renting them back to the original owner, giving the owner a fresh start as long as they participate in financial counseling. This program began in fall 2009 and so far, 50 of these transactions have gone through and another 20 are in the pipeline.   Find the article here ...continue reading