Lending Industry Still Fighting Mortgage Modification as Foreclosure Crisis Continues

/PRNewswire/ -- As the House debates the Wall Street Reform and Consumer Protection Act of 2009 this week, the lending industry continues to fight a mortgage modification provision that would allow bankruptcy judges to adjust the terms of mortgages to help struggling families as part of a broader effort to stem the worsening foreclosure crisis.

Lending industry opponents of the measure, some of the biggest recipients of federal bailout money, have spent lavishly on lobbying and campaign contributions in 2009. An analysis by Common Cause and Public Campaign shows that the coalition of banks opposed to the mortgage modification provision - including Citigroup, Bank of America, Wells Fargo and JPMorgan Chase & Co -- have spent more than $80 million on lobbying and more than $6 million on campaign contributions this year, according to data from the Center for Responsive Politics.

"These Wall Street banks were rescued by the taxpayers after they almost collapsed under their own bad investments," said Common Cause President Bob Edgar. "They took that money and are spending millions lobbying and making campaign contributions to stop proposals that would help those same taxpayers keep their homes."

"From regulatory reform to health care, campaign cash from Wall Street interests is permeating every corner of debate in Washington, D.C.," said Nick Nyhart, president and CEO of Public Campaign. "Congress must create a political system that works for all of us, not just those with money to spare. It's time to pass the Fair Elections Now Act."

The House is currently debating the Wall Street Reform and Consumer Protection Act of 2009 (HR 4173), the most significant overhaul of the financial industry since the New Deal. It may take up the bankruptcy amendment offered by Judiciary Committee Chairman John Conyers Jr. (D-MI) and Rep. Zoe Lofgren (D-CA) as soon as today. The House passed identical language in March, but the effort ran aground in the Senate.

Some House members want the Senate to reconsider the proposal, as most major lenders have not responded to the voluntary initiatives adopted in place of the bankruptcy provision. The Treasury Department estimates that only one-in-five eligible households have received government assistance through these voluntary programs.

Common Cause and Public Campaign continue to work to pass the Fair Elections Now Act (H.R. 1826 / S.752) as the comprehensive solution to the pay-to-play culture in Washington, D.C. exposed by the debate over regulatory reform. The legislation, sponsored by Sen. Dick Durbin (D-Ill.) and Rep. John Larson (D-Conn.) would create a citizen-funded election system for Congress in which candidates could run for office on a blend of small donations and public funds.

-----
www.fayettefrontpage.com
Fayette Front Page
www.georgiafrontpage.com
Georgia Front Page

Federal Home Loan Bank of Atlanta to Award More Than $12.4 Million for Housing in Georgia

/PRNewswire/ -- Federal Home Loan Bank of Atlanta (FHLBank Atlanta) announced today that it will award more than $12.4 million to help finance 1,359 affordable housing units in Georgia. The funding is part of more than $43 million FHLBank Atlanta will award in ten states to create or preserve 4,514 units of affordable housing.

FHLBank Atlanta will award the funds as part of its 2008 Affordable Housing Program (AHP) offering. Local community developers, in partnership with FHLBank Atlanta member institutions, will use the awards to fund 18 affordable housing developments in Bleckley, Butts, Cobb, Crawford, DeKalb, Dodge, Fulton, Henry, Houston, Jones, Lamar, Laurens, Monroe, Montgomery, Peach, Pike, Pulaski, Spalding, Telfair, Treutlen, Twiggs, Upson, Wheeler, and Wilcox counties, as well as Atlanta, Bowdon, Cordele, Decatur, Donalsonville, Dublin, and Rabun Gap.

"AHP program funding has positive far-reaching effects for the communities it serves by providing a source of affordable housing and new jobs, which stimulates the local economy," said Arthur Fleming, first vice president and director of Community Investment Services, FHLBank Atlanta.

AHP is a competitive funding program that helps develop owner-occupied and rental housing for very low-, low-, and moderate-income families. FHLBank Atlanta awards the funds annually to member financial institutions and their community housing partners. AHP is a component of FHLBank Atlanta's affordable housing, economic development, and down-payment assistance initiatives. For the complete list of AHP winners, visit www.fhlbatl.com/ahp.

-----

www.georgiafrontpage.com
Georgia Front Page
www.fayettefrontpage.com
Fayette Front Page

HGTV’s FrontDoor.com Offers the Top 10 Things to Expect in the Housing Market in 2009

(BUSINESS WIRE)--After the too-good-to-be-true housing boom in the first half of this decade, 2008 was a dose of reality. The subprime mortgage crisis and the collapse of major financial institutions made this a tough year for real estate. Expect 2009 to be filled with more change and adjustment in home values and expectations. On a positive note, help is on the way from the Feds, and some experts say a slow recovery could begin in late 2009. Prepare yourself for the challenges -- and opportunities -- of 2009 by getting familiar with FrontDoor.com’s expectations in the housing market. (http://www.frontdoor.com/top10)

1. Continued market adjustments. With home prices in some markets having reached astronomical levels, it was inevitable a reset button be pushed. Sellers will continue to be challenged in 2009 as the inflated pricing of years past adjusts to normal levels. With banks and builders willing to slash prices to sell a backlog of foreclosures and new homes, individual sellers will have to price their homes competitively.

2. Action from the Obama administration. President-elect Barack Obama's plan to help the housing sector includes a 10 percent mortgage tax credit for homeowners who don't itemize their taxes and a crackdown on abusive lending practices.

3. More assistance programs for homeowners in danger of foreclosure. While the federal government is attempting to reduce foreclosures, a report released by the Joint Economic Committee predicts 2 million foreclosures in 2009. Homeowners who are at risk should take steps to avoid foreclosure.

4. Some calm to the chaos of the banks' restructuring. This should cause loan modifications and short sales to get easier, and it will also (eventually) decrease the number of bank-owned properties on the market.

5. Thorough reviews of mortgage applications. Before the subprime mortgage debacle, you didn't have to prove you could afford to borrow $200,000 for a home and you didn't need a down payment. Those days of sketchy lending practices are gone. Lenders now require potential borrowers to provide extensive income and expense documentation. Homebuyers with the best credit will get the lowest interest rates. Take steps now to get your finances in order and boost your credit score.

6. Low prices and low interest rates. 2009 could be the time for reluctant homebuyers to act, as this is perhaps the last year of the best buying opportunity in recorded economic history.

7. Cool tech tricks and tools for the real estate obsessed. As homebuyers turn to the Web more and more for their real estate needs, video, webcasts and mobile search tools are becoming more prevalent. Sellers should consider using these cutting-edge tools to make their homes stand out.

8. Wiser consumers. After facing this foreclosure crisis, buyers, sellers, real estate agents and even tenants will have a deeper understanding of real estate, mortgage and credit, which they can use to make better decisions and be more self-protective in the future.

9. Leaner, greener homebuying. Across the board, homebuying is becoming more eco-friendly, from transactions being conducted digitally to buyers opting for smaller homes within walking distance of school and work.

10. An increase in consumer confidence. As the year goes on and we near the projected end of the recession, sellers can breathe a sigh of relief as buyers regain confidence in the market.

-----
www.fayettefrontpage.com
Fayette Front Page
www.georgiafrontpage.com
Georgia Front Page

Housing Prices Continue to Decline Nationwide

(BUSINESS WIRE)--IHS Global Insight, the world's leading company for economic and financial analysis and forecasting, today released the third-quarter 2008 update of the U.S. housing valuation analysis, House Prices in America, showing that single-family U.S. home prices fell at a faster pace across a wide area of the country — after moderating earlier in the year — and are now 6.5% below their 2007 peak. House prices fell at a 6.9% annualized pace, affecting 241 of the 330 analyzed metropolitan areas, up from 150 metro areas in the second-quarter 2008. For the United States as a whole, the housing market is now slightly undervalued. When weighted by market value, the nation is 3.8% undervalued; when weighted by housing units, it is 5.7% undervalued.

While the contraction in residential real estate value is national in scope, it is most severe in the Southeast and Southwest, areas which were among the most overvalued in the country three years ago. According to the third-quarter analysis, extreme overvaluation is now "essentially nonexistent" — only three metro areas met the definition of extreme overvaluation, down from a peak of 52 metro areas in 2005. Only the Pacific Northwest remains overvalued.

According to the analysis, the overhang of unsold properties trending downward during the third quarter, and demand picking up slightly, the accelerated pace of depreciation likely reflects financing conditions that became increasingly stringent and expensive during this period. Recent policy responses, from the Federal Reserve in particular, to purchase mortgage-backed securities are not likely to have a significant impact until next year.

Home prices fell more than 10% in the third quarter in nine central California communities. The Central Valley communities of Merced, Stockton, and Modesto have seen property values fall to less than half their 2005 value. Twenty-nine metro areas in California, Florida, and Nevada — at one time among the most overvalued — have seen price declines in excess of 30%. Similar steep price drops are also occurring in Michigan, northeast Ohio, the southern metro areas from Charlotte to Atlanta, as well as in New England.

The incidence of extreme overvaluation has become negligible; only Atlantic City, New Jersey; Bend, Oregon; and St. George, Utah met the criteria. Overvalued markets are mainly located in the Pacific Northwest, extending to Utah. Southern metro areas from Mississippi to Texas remain generally undervalued.

Jeannine Cataldi, senior economist and manager of IHS Global Insight's Regional Real Estate Service, added, "Weak economic conditions and wary consumers continue to hold the housing market back. Although many areas are seeing home sales increase, it is largely due to foreclosure homes being snapped up at significantly discounted prices. As the inventory of these homes is removed from the market, prices will remain on a downward path."

James Diffley, group managing director of IHS Global Insight's Regional Services Group, said, "With no end in sight to the downward spiral of house prices, it is likely that long anticipated market correction will now overshoot fundamental valuations on the downside.”

The House Prices in America study, a joint effort by IHS Global Insight and National City Corporation, examines the top 330 U.S. real estate markets, representing 78% of all existing housing units and 86% of all related real estate value, to determine what home prices should be, accounting for differences in population density, relative income levels, interest rates, and historically observed market premiums or discounts. Markets with valuation premiums above 35% were deemed at risk for price corrections based on the typical degree of overvaluation that preceded the 79 known local market price declines observed since 1985.

House Prices in America combines a statistical model originally developed by Richard DeKaser, Chief Economist at National City Corporation (www.nationalcity.com/housevaluation) with data largely developed at IHS Global Insight. More information on IHS Global Insight's housing valuation analysis is available at www.globalinsight.com/housingvaluation.

-----
www.fayettefrontpage.com
Fayette Front Page
www.georgiafrontpage.com
Georgia Front Page