Do Not Track and Do Not Collect

Daily Market Commentary for May 8, 2012

Will the eventual regulation by the FTC be a 'Do Not Track' option or a 'Do Not Collect' option? (read more at Millennium-Traders.Com)
http://www.millennium-traders.com/ne...ommentary.aspx


According to CoreLogic, U.S. home prices edged up 0.6% in March, the first monthly rise since July 2011 representing a year-on-year fall of 0.6%. Excluding distressed home sales, month-over-month home prices increased for the third month consecutive month. "This spring the housing market is responding to an improving balance between real estate supply and demand which is causing stabilization in house prices," said Mark Fleming, chief economist for CoreLogic. "Although this has been the case in each of the last two years, the difference this year is that stabilization is occurring without the support of tax credits and in spite of a declining share of REO sales."

As part of a $25 billion foreclosure abuse settlement, big banks are mailing letters offering to cut mortgage debt for hundreds of thousands of borrowers - actions overseen by state attorneys general, U.S. Housing and Urban Development Secretary Shaun Donovan. "There are thousands of families that have already benefited and hundreds of thousands more that are now getting these letters, not just from Bank of America, but they are being mailed from all of the five banks," Donovan said at a Senate Banking Committee hearing. Banks involved in the settlement are Bank of America Corp. (BAC:NYSE), Wells Fargo & Co. (WFC:NYSE), J.P. Morgan Chase & Co. (JPM:NYSE), Citigroup Inc. (C:NYSE) and Ally Financial Inc. Bank of America executives alone are offering mortgage principal reduction to as many as 200,000 borrowers.

Shaun Donovan, secretary for the U.S. Housing and Urban Development Department, told lawmakers at a Senate Banking Committee hearing on Tuesday that there are large barriers to borrowers participating in the HARP program, and that he backed legislation introduced by Sen. Robert Menendez, Democrat of New Jersey, to seek to reduce costs even more for borrowers and lenders including a provision that would eliminate appraisal costs for borrowers in all markets. On Tuesday, Donovan, joined by President Barack Obama supported efforts to expand refinancing opportunities. Obama called on Congress to act on a 'to-do list' including passing legislation to help underwater borrowers. At the end of Q4 2011 roughly 11 million U.S. residential properties were 'under water' with borrowers owing more on their mortgages than their homes were worth. The legislation also seeks to allow certain higher-equity Fannie and Freddie borrowers to participate, noting that many people who do not owe more than their mortgage is worth are blocked from refinancing because they have other debts or second mortgages. Donovan is also pushing for another provision in the bill that would seek to reduce additional barriers to competition by directing Fannie and Freddie to lower litigation risk for lenders who refinance loans they did not originate. “One of the key barriers we have is that [mortgage] servicers who don’t have that loan or service that loan are being discouraged from refinancing that loan,” according to Donovan. “There are a number of changes we can make there, underwriting changes there to lower cost of refinancing.” Democrats argue that the provisions in the Menendez legislation could be implemented by the Federal Housing Finance Agency, the regulator that oversees government-seized Fannie and Freddie, without an act of Congress. Democrats contend that the legislation could drive FHFA and its chief Ed DeMarco to move on the motion. A number of Democratic lawmakers cite comments made by Columbia University Professor Christopher Mayer who estimated that nearly 11.6 million new refinancings could take place based on the provisions in the Menendez legislation. Mayer said that it could hike profits to Fannie and Freddie by potentially preventing nearly 400,000 foreclosures. Republicans on the committee said they were willing to work with Democrats to create bipartisan legislation, but raised concerns indicating that they may try to tackle much-larger initiatives along with the Menendez legislation all of which could bog down the bill and limit or delay its chance of passage.


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