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HOPE NOW Reports 70K Mods in April, 59K Foreclosure Sales

Nearly 70,000 homeowners received permanent loan modifications in April, while foreclosure sales stood at 59,000 for the month, according to data from HOPE NOW, an alliance of mortgage servicers, investors, mortgage insurers, and nonprofit counselors. Of the 70,000 modifications, about 58,000 were proprietary, or private, loan modifications, while about 12,000 were through the government’s Home Affordable Modification Program (HAMP), HOPE NOW reported. In March, servicers provided over 88,000 modifications for homeowners. Since 2007, a total of 6.39 million homeowners have received permanent modifications. Completed short sales reached 27,000 in April—a slight adjustment from 28,000 in March. This brings the industry total for short sales since 2009 to 1.26 million. When combining loan modifications and short sales, HOPENOW reported over 7.6 million foreclosure prevention solutions have been applied since 2007. Meanwhile, foreclosure sales showed an increase from March to April, rising 14 percent to 59,000. Foreclosure starts were little changed at 115,000 in April compared to 116,000 in March. “HOPE NOW is proud of the efforts its members have made on behalf of the nation’s homeowners. While there is still work to be done in the housing market, significant progress has been made via loan modifications, short sales and other solutions,” said Eric Selk, executive director ofHOPE NOW, in a statement. HOPE NOW also announced upcoming face-to-face eventsit will be hosting this summer in Columbia, South Carolina; Birmingham Alabama; San Antonio, Texas; and San Bernardino, California. This article was posted...
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Loan Modifications Up from Year Ago in Q2; Foreclosure Starts Plummet

Although the pace of loan modification activity slowed from the first to the second quarter this year, foreclosure starts saw an even greater quarterly decline, according to data from HOPE NOW, a private sector alliance of mortgage servicers, investors, mortgage insurers and nonprofit counselors. In the second quarter, servicers provided 204,000 loan modifications to distressed borrowers, down by about 16 percent from the prior quarter. However, loan modifications were still up 13 percent from a year ago. Short sales, another alternative to foreclosure, decreased 25 percent year-over-year to 81,000 in the second quarter. Meanwhile, foreclosures were initiated on 329,000 properties in the second quarter. The total for foreclosure starts represents a 30 percent decrease compared to the first quarter and a sharp 38 percent decline from last year. Foreclosure sales also slowed, dropping to 158,000 in the second quarter, down 2 percent from the first quarter and down 15 percent from the same quarter a year ago. HOPE NOW data continued to show a significant majority of completed modifications are through the private sector. Out of the 204,000 completed modifications in the second quarter, 160,000 were proprietary modifications, while 44,860 were completed under the government’s Home Affordable Modification Program (HAMP). Since 2007, about 6.52 million homeowners have received permanent loan modifications for homeowners, and about 5.31 million of those modifications were proprietary programs. The industry has also provided 1.32 million short sales since December 2009. This brings the total for non-foreclosure solutions to over 7.84 million. “In addition to the progress made via our solution data,HOPE NOW has sponsored over 140 face to face events in more than 70 markets nationwide and has been a driving force in bringing together all mortgage stakeholders in the interest of improving the nation’s housing market,” said Eric Selk, executive director of HOPE NOW. The original Article was posted...
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Home prices soar across Southern California

Southland home prices are sizzling this summer. Prices in the Los Angeles metro area are up 19 percent from a year ago, according to a widely watched index released Tuesday. In the San Fernando Valley, the median price of a previously owned home soared a record 39 percent in May and cracked the half million mark again, a trade group said. And San Bernardino County’s median price jumped 28 percent last month, according to market tracker DataQuick. Sale volume is showing signs of life, too. A report issued Tuesday by the U.S. Census Bureau and the Department of Housing and Urban Development said that sales of new home in May increased 29 percent to an annualized rate of 476,000 units from 366,000 a year earlier. May’s total was the highest in five years, the department said. It adds up to a housing market recovery gaining steam. “I think it’s on track and firmly entrenched,” said David Blitzer, chairman of the Index Committee in charge of Standard & Poor’s/Case-Shiller Home Price Index. The April index for Los Angeles, the most current, shows that Los Angeles area prices increased 18.8 percent from 2012 and were up 3.4 percent from March. By comparison, the index that tracks 20 major metro areas was up 11.6 percent from a year ago. For Los Angeles, it’s the biggest gain since the index jumped 20.5 percent in February 2006 as prices were climbing toward their zenith before the price bubble deflated. This market is not in for a repeat performance — yet, Blitzer said. “I think there may be some small additional gains but the rate of increase has to level off pretty soon or we’re back to the bubble. But I don’t think we are at the bubble at this point,” he said. Price increases across the region are being fueled by scant inventory, a sharp drop in foreclosure activity, an increase in sales of more expensive properties and a decrease in sales of lower priced homes. Although the Case-Shiller index lags the market by a month, it’s relied upon as a good price marker. “I think the index gives you a somewhat more pure view of how prices are adjusting in the market,” said Robert Kleinhenz, chief economist at the Kyser Center for Economic Research in Los Angeles. Competition among buyers is heating up, too. “Extremely lean supply is bumping up against strong demand...
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Obama Administration Extends Application Deadline for the Making Home Affordable Program

Extension through December 2015 Will Provide Struggling Homeowners Additional Time to Access Sustainable Mortgage Relief and Align End Dates for Key Assistance Programs WASHINGTON – The U.S. Department of the Treasury and the U.S. Department of Housing and Urban Development today announced an extension of the Obama Administration’s Making Home Affordable Program through December 31, 2015. The new deadline was determined in coordination with the Federal Housing Finance Agency (FHFA) to align with extended deadlines for the Home Affordable Refinance Program (HARP) and the Streamlined Modification Initiative for homeowners with loans owned or guaranteed by Fannie Mae and Freddie Mac. The Making Home Affordable Program has been a critical part of the Obama Administration’s comprehensive efforts to provide relief to families at risk of foreclosure and help the housing market recover from a historic housing crisis. The program deadline was previously December 31, 2013.  “The housing market is gaining steam, but many homeowners are still struggling,” said Treasury Secretary Jacob J. Lew. “Helping responsible homeowners avoid foreclosure is part of our wide-ranging efforts to strengthen the middle class, and Making Home Affordable offers homeowners some of the deepest and most dependable assistance available to prevent foreclosure. Extending the program for two years will benefit many additional families while maintaining clear standards and accountability for an important part of the mortgage industry.”  “The Making Home Affordable Program has provided help and hope to America’s homeowners,” said HUD Secretary Shaun Donovan. “Families across the country have used its tools to reduce their principal, modify their mortgages, fight off foreclosure and stay in their homes – helping further stimulate our housing market recovery. And with this extension, we ensure that the program keeps supporting communities for years to come.”  Since its launch in March 2009, about 1.6 million actions have been taken through the program to provide relief to homeowners and nearly 1.3 million homeowners have been helped directly by the program. The Making Home Affordable Program includes the Home Affordable Modification Program or HAMP, which modifies the terms of a homeowner’s mortgage to reduce their monthly payment to prevent foreclosure. As of March 2013, more than 1.1 million homeowners have received a permanent modification of their mortgage through HAMP, with a median savings of $546 every month – or 38 percent of their previous payment. Data from the Office of the Comptroller of the Currency (OCC) shows that the median savings for...
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The Mortgage Forgiveness Debt Relief Act and Debt Cancellation

If you owe a debt to someone else and they cancel or forgive that debt, the canceled amount may be taxable. The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief. This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition. More information, including detailed examples can be found in Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments. Also see IRS news release IR-2008-17. The following are the most commonly asked questions and answers about The Mortgage Forgiveness Debt Relief Act and debt cancellation: What is Cancellation of Debt? If you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the cancelled amount in income for tax purposes, depending on the circumstances. When you borrowed the money you were not required to include the loan proceeds in income because you had an obligation to repay the lender. When that obligation is subsequently forgiven, the amount you received as loan proceeds is normally reportable as income because you no longer have an obligation to repay the lender. The lender is usually required to report the amount of the canceled debt to you and the IRS on a Form 1099-C, Cancellation of Debt. Here’s a very simplified example. You borrow $10,000 and default on the loan after paying back $2,000. If the lender is unable to collect the remaining debt from you, there is a cancellation of debt of $8,000, which generally is taxable income to you. Is Cancellation of Debt income always taxable? Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve: Qualified principal residence indebtedness: This is the exception created by the Mortgage Debt Relief Act of 2007 and applies to most homeowners. Bankruptcy: Debts discharged through bankruptcy are not considered taxable income. Insolvency: If you are insolvent when the debt is cancelled,...
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