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After more than a year of negotiations, attorneys general from more than 40 states signed on to a proposed settlement agreement with five of the nation's largest mortgage servicers over “robo-signing” foreclosure processing abuses, according to the lead negotiator, Iowa Attorney General Tom Miller.

“This enables us to move forward into the very final stages of remaining work. Federal and state officials, as well as representatives from the banks, continue to address matters that they must complete before finalizing any settlement,” Miller said in a statement released late Monday.

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A potential $25 billion settlement between the nation’s four largest banks and the 50 state attorneys general over faulty foreclosure processing is imminent.

Or at least it’s closer than it’s been, given that we are now well over a year into the negotiations. The deadline for states to sign on was last Friday. Of course that was extended to today, and we haven’t heard anything from the negotiation team leader, Iowa Attorney General Tom Miller.

So I’m sticking with imminent.

With a deal so close, many details have “leaked,” none of which are hard and fast truths, but many of which got me to thinking, specifically when it comes to the numbers and who gets what. $25B is the big round figure. $17 billion of that is supposed to go to principal write down on troubled loans. $3 billion in, I guess you call it restitution, is supposed to go to borrowers who have already lost their homes to foreclosure. The rest would go to some kind of reserve account for state and federal foreclosure relief programs.

So how many people get what?  » Read More

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Fannie Mae and Freddie Mac, the mortgage giants under government conservatorship, together owned 182,212 foreclosed properties as of the end of September.

While they aggressively market and sell these homes to investors and owner-occupants alike, the numbers are still too high; these number could go far higher, as foreclosures previously stalled by paperwork issues come back into process.

That’s why the federal regulator overseeing the two is launching a bulk sale program, offering investors the chance to buy foreclosed properties at a discount, as long as those investors turn the properties into viable rentals for a specified number of years.  » Read More

After announcing during his State of the Union address a new government refinance program for, "responsible" but "underwater" borrowers with privately held mortgages, President Obama is expected to detail the plan today.

It will go through the government mortgage insurer, the Federal Housing Administration (FHA) and could cost between $5 billion and $10 billion dollars, according to senior administration officials.

The cost of the program, officials say, would be covered by a tax on major lenders, which is likely to make it a no-go in Congress.

It would cover closing fees for borrowers and additional risk to the FHA, which doesn't insure new loans where the borrower owes more than the home is worth.

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Anyone with any cash in hand should be buying a house right now.

That’s what any real estate agent will tell you, obviously, but that’s also what many investors now believe.

Unfortunately, the potential home-buying public…isn’t buying it.

January’s consumer confidence report found a drop in the number of Americans who plan to buy a home in the next six months. If, however, you take out the confidence issue, the fundamentals for buying are strong:

Home prices nationally are down 33 percent from their bubble peak, according to the latest S&P/Case-Shiller report, mortgage rates are hovering near record lows, and housing supply, while falling, is still historically high. In other words, it’s more of a buyer’s market than it’s ever been.  » Read More

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Late Friday the U.S. Treasury Department announced a major expansion of its Home Affordable Modification Program (HAMP).

The three-year-old program has been largely deemed unsuccessful, as it has provided just about 750,000 borrowers with permanent loan modifications. The initial expectation from government officials was that it would help three to four million borrowers.

“Clearly the initial program erred on the side of making sure taxpayers were protected, but it didn’t do enough to help the overall economy,” said Michael Barr, former Asst. Treasury Secretary for Financial Institutions and one of HAMP’s original architects.  » Read More

Fuse | Getty Images 50 percent of loans in foreclosure in judicial states have not made a payment in two years, as opposed to 28 percent in non-judicial states.

The number of new foreclosures in 2011 dropped nearly 40 percent, according to year-end numbers just released by Lender Processing Services; there is, however, little cause for celebration.

The fall is largely due to moratoria and process reviews stemming from the so-called “robo-signing” foreclosure paperwork scandal.

Mortgage delinquency rates were largely unchanged from last year, which means all that distress will be pushed forward to 2012 and beyond.  » Read More

Tetra Images | Getty Images President Obama announced he was ordering the U.S. Attorney General to create a “Financial Crimes Unit,” its number one task being to go after the banks for faulty mortgage originations and securitizations.

Barely a few days ago, word was that a settlement among state attorneys general and the big banks over faulty foreclosure practice, i.e. “robo-signing”, was imminent.

In fact, there was a big meeting on Monday in Chicago to try to seal the deal. It included Secretary of Housing and Urban Development, Shaun Donovan, Associate U.S. Attorney General. Thomas Perelli, and several Democratic AG’s, including the lead negotiator, Iowa Attorney General Tom Miller.

Now some say that could all be for naught.

During his State of the Union address, President Obama announced he was ordering the U.S. Attorney General to create a “Financial Crimes Unit,” its number one task being to go after the banks for faulty mortgage originations and securitizations.  » Read More

After several largely ineffective programs to help troubled borrowers and after fruitless attempts at budging the hard-line conservator of Fannie Mae and Freddie Mac, President Obama is proposing a brand new refinance program for borrowers who are current on their mortgages, regardless of who owns their loan; the catch is that this one has to go through Congress.

"I'm sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates. No more red tape. No more runaround from the banks," the President announced in his State of the Union address.

Unlike previous efforts in the refinance space, including a recently revamped and expanded government program for borrowers who owe more on their mortgages than their homes are currently worth, this plan would not be limited to those with loans backed by Fannie Mae and Freddie Mac, according to senior administration officials. The two mortgage giants own or guarantee about half of the nation's mortgages. It would be open to all borrowers current on their loans.

The Obama administration is offering precious few details, promising more in the coming weeks, but several sources say the plan is to ask Congress to allow the government mortgage insurer, the Federal Housing Administration (FHA), to back refinances of underwater mortgages. No estimates were given as to how many borrowers such a plan could potentially help, only that this would be a voluntary, borrower-initiated plan, and not a blanket refinance of all borrowers.

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If the theme of tonight’s State of the Union address is fairness, then President Obama would be wise to steer clear of housing; most of the proposals to fix the nation’s still struggling real estate market are intrinsically unfair to a large majority of Americans.

From a mass refinance plan to mass mortgage principal forgiveness, the supposed “fixes” will reward some at the expense of far more.

Let’s start with that principal forgiveness. Some Democrats have been hounding the regulator of Fannie Mae and Freddie Mac (the FHFA and its leader Ed DeMarco) to initiate a program to reduce the value of mortgages where the mortgage is larger than the value of the home, i.e. “underwater”. The idea is that this will keep those borrowers from defaulting on these mortgages.  » Read More