NEW YORK – July 28, 2011 – Ocwen Financial Corp., a servicer of residential mortgages, launched a new loan modification program to reduce the principal on a mortgage for delinquent borrowers, but the borrowers must agree to let loan investors share in future appreciation of the home’s value when the market recovers.
Through the Shared Appreciation Modification program (SAMs), Ocwen will write down the principal of the loan to 95 percent of the home’s current market value. The amount written down will then be forgiven in one-third increments over a three-year timespan, as long as the homeowner remains current on the modified mortgage.
Then, “when the house is later sold or refinanced, the borrower must share 25 percent of the appreciation with the investors that own the loan; borrowers keep 75 percent of the gain,” the company notes.
Loan modifications will be available only to homeowners in negative equity.
“Like all modifications, SAMs help homeowners avoid foreclosure. But they also restore equity,” says Ocwen CEO Ronald Faris in a public statement about the program. “That’s a significant benefit to the customer and, we believe, the economy and housing market. Psychologically, it’s important too. Our analytics tell us that an underwater mortgage is one-and-a-half to two-times more likely to default than one with at least some positive equity.”
The program, which is expected to be rolled out into 33 states, is one of the first principal reduction programs started by a private company.
Source: “Ocwen Unveils New Principal Reduction Program,” HousingWire (July 26, 2011) and “Ocwen Offering Mortgage Modifications That Restore Equity for Underwater Borrowers,” GlobeNewswire (July 26, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
Thursday, July 28, 2011
Monday, July 11, 2011
Second chance for owners who lost homes
WASHINGTON – July 11, 2011 – More than 2 million homeowners who were foreclosed on or were in the process of a foreclosure during 2009 or 2010 can now ask for a review of their case, banking regulators announced this week. Banking regulators say ex-homeowners who might be eligible will receive a letter from their lender explaining their rights.
The move is to help identify homeowners who may have been improperly foreclosed upon, Julie Williams, chief counsel of the Office of the Comptroller of the Currency, said at a congressional hearing.
Homeowners who ask for the review will receive a letter explaining their rights.
Mortgage servicers will hire independent auditors to conduct reviews of the cases and determine if homeowners should receive financial compensation if the foreclosures were not done properly. They will also look for borrowers who were denied loan modifications when they may have been eligible for one.
The reviews are part of the mortgage servicer requirements called for by regulators after an investigation last fall revealed improper foreclosure practices by banks. Banks have until Wednesday to submit plans to the OCC on how they plan to revamp foreclosure practices.
Source: “Foreclosed Home Owners May Seek Case Reviews,” USA Today (July 8, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
The move is to help identify homeowners who may have been improperly foreclosed upon, Julie Williams, chief counsel of the Office of the Comptroller of the Currency, said at a congressional hearing.
Homeowners who ask for the review will receive a letter explaining their rights.
Mortgage servicers will hire independent auditors to conduct reviews of the cases and determine if homeowners should receive financial compensation if the foreclosures were not done properly. They will also look for borrowers who were denied loan modifications when they may have been eligible for one.
The reviews are part of the mortgage servicer requirements called for by regulators after an investigation last fall revealed improper foreclosure practices by banks. Banks have until Wednesday to submit plans to the OCC on how they plan to revamp foreclosure practices.
Source: “Foreclosed Home Owners May Seek Case Reviews,” USA Today (July 8, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
Friday, July 8, 2011
Adding office could increase home value
PHILADELPHIA – July 8, 2011 – Remember when the “experts” said that most Americans would telecommute from home offices to work every day?
Hasn’t happened, although ever-evolving technology has made the notion more viable. Think laptops, netbooks, printers, smartphones, and tablets, networked through a wireless router to a high-speed Internet connection.
Thanks to wireless technology, you don’t even need a physical home office – although if you are counting on an income-tax deduction, the IRS requires that space be dedicated to that purpose.
Don’t need the deduction? Then “the home office is everywhere,” said Steve Melman, director of economic services at the National Association of Home Builders.
About 2 percent of U.S. workers – the self-employed and unpaid volunteers excluded – consider home their primary workplace, the Telework Research Network says. It estimates that 20 million to 30 million people work from home at least one day a week.
That’s hardly everyone, though it is more than the Bureau of Labor Statistics’ 2001 figure of 19.5 million.
Two additional factors have had a huge effect on the number of home offices: the flagging economy and an overall demand for affordability that has resulted from it.
Members of the home builders’ group were surveyed at the end of 2010 about what new homes might look like in 2015, Melman said.
The consensus: Homes will be smaller, and “people will be looking for real value, with the walk-in closet and the laundry room at the very top of the list of features.” Most future homebuyers (read: younger buyers) will use the portability of electronic devices to “make the most of less square footage.”
That’s a far cry from the home-office-as-emerging-trend of the 1990s, when telecommuting depended on having a work space that could accommodate, in addition to desk and chair, a telephone, a desktop computer, a modem, a printer, a file cabinet and storage for floppy disks (remember those?).
When the need for data speed overwhelmed standard wiring, Category 5, an advanced system providing Internet access at speeds 200 times faster, required owners of older homes to rip open walls to upgrade their service. Newly built homes had the less expensive advantage, until wireless technology leveled the playing field.
Today, for about $60, a single-band wireless router allows you to create a building-wide network of computers, printers, and other devices linked to a single Internet source – a cable modem.
Access to the router can be made secure within the network, so you can do online financial transactions safely. Some cable-modem providers offer free antivirus software that can be downloaded to each computer through the network. Every computer can be networked through a single printer, wireless or not.
But all routers are not created equal, and online shopping is a good idea. An excellent guide can be found at http://is.gd/lggFIj. Most manufacturers offer free upgrades to their firmware, the internal programs that run these devices, so keep in touch with their websites.
If you run a business from home, or take a lot of work home, you probably will want dedicated space somewhere – a quiet somewhere. Design the space for yourself, keeping the costs within a reasonable budget, rather than with resale in mind.
In 2007, Remodeling magazine’s annual Cost vs. Value report said a home-office renovation would return 56.1 percent of your investment at sale time. This year, that was down to 45.8 percent.
If you’ll be working for long periods in your home office, think ergonomically. A good source of information about furniture and design is at http://is.gd/epQjQA. Lighting a home office is tricky. The American Lighting Association offers tips at http://is.gd/l8GUls.
You’ll need plenty of grounded electrical outlets and a surge protector for your equipment – one with a high joule rating (the higher the rating, the longer protection will last) – with phone-line and coaxial-cable jacks, too. Get a printer with copier, fax, and scanner functions.
Choice of computer is up to you – shop for the best deal, warranty protection, and service guarantee. If you will be doing a lot of conferencing from your home office, a Web camera is a must.
Depending on how much data are involved in your job, an external hard drive of 250 gigabytes or more should be weighed against online backup for a fee, as discussed in PC magazine at http://is.gd/XZr601.
The problem with technology, of course, is that it evolves faster than our thinking about how to use it. “Remember, even the computer experts had no idea what to do with email,” Melman said.
Copyright © 2011
Hasn’t happened, although ever-evolving technology has made the notion more viable. Think laptops, netbooks, printers, smartphones, and tablets, networked through a wireless router to a high-speed Internet connection.
Thanks to wireless technology, you don’t even need a physical home office – although if you are counting on an income-tax deduction, the IRS requires that space be dedicated to that purpose.
Don’t need the deduction? Then “the home office is everywhere,” said Steve Melman, director of economic services at the National Association of Home Builders.
About 2 percent of U.S. workers – the self-employed and unpaid volunteers excluded – consider home their primary workplace, the Telework Research Network says. It estimates that 20 million to 30 million people work from home at least one day a week.
That’s hardly everyone, though it is more than the Bureau of Labor Statistics’ 2001 figure of 19.5 million.
Two additional factors have had a huge effect on the number of home offices: the flagging economy and an overall demand for affordability that has resulted from it.
Members of the home builders’ group were surveyed at the end of 2010 about what new homes might look like in 2015, Melman said.
The consensus: Homes will be smaller, and “people will be looking for real value, with the walk-in closet and the laundry room at the very top of the list of features.” Most future homebuyers (read: younger buyers) will use the portability of electronic devices to “make the most of less square footage.”
That’s a far cry from the home-office-as-emerging-trend of the 1990s, when telecommuting depended on having a work space that could accommodate, in addition to desk and chair, a telephone, a desktop computer, a modem, a printer, a file cabinet and storage for floppy disks (remember those?).
When the need for data speed overwhelmed standard wiring, Category 5, an advanced system providing Internet access at speeds 200 times faster, required owners of older homes to rip open walls to upgrade their service. Newly built homes had the less expensive advantage, until wireless technology leveled the playing field.
Today, for about $60, a single-band wireless router allows you to create a building-wide network of computers, printers, and other devices linked to a single Internet source – a cable modem.
Access to the router can be made secure within the network, so you can do online financial transactions safely. Some cable-modem providers offer free antivirus software that can be downloaded to each computer through the network. Every computer can be networked through a single printer, wireless or not.
But all routers are not created equal, and online shopping is a good idea. An excellent guide can be found at http://is.gd/lggFIj. Most manufacturers offer free upgrades to their firmware, the internal programs that run these devices, so keep in touch with their websites.
If you run a business from home, or take a lot of work home, you probably will want dedicated space somewhere – a quiet somewhere. Design the space for yourself, keeping the costs within a reasonable budget, rather than with resale in mind.
In 2007, Remodeling magazine’s annual Cost vs. Value report said a home-office renovation would return 56.1 percent of your investment at sale time. This year, that was down to 45.8 percent.
If you’ll be working for long periods in your home office, think ergonomically. A good source of information about furniture and design is at http://is.gd/epQjQA. Lighting a home office is tricky. The American Lighting Association offers tips at http://is.gd/l8GUls.
You’ll need plenty of grounded electrical outlets and a surge protector for your equipment – one with a high joule rating (the higher the rating, the longer protection will last) – with phone-line and coaxial-cable jacks, too. Get a printer with copier, fax, and scanner functions.
Choice of computer is up to you – shop for the best deal, warranty protection, and service guarantee. If you will be doing a lot of conferencing from your home office, a Web camera is a must.
Depending on how much data are involved in your job, an external hard drive of 250 gigabytes or more should be weighed against online backup for a fee, as discussed in PC magazine at http://is.gd/XZr601.
The problem with technology, of course, is that it evolves faster than our thinking about how to use it. “Remember, even the computer experts had no idea what to do with email,” Melman said.
Copyright © 2011
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