Posts Tagged ‘Home Affordable Modification Program’

HAMP = Foreclosure

Iconic Houses

Yesterday’s article "Is 103 Months to Clear Housing Inventory Too Optimistic?" included an excerpt from the WSJ’s "Number of the Week: 103 Months to Clear Housing Inventory," suggesting there were at least 103 months of housing inventory yet to hit the market. Patrick Pulatie, CEO of Loan Fraud Investigations, wrote to me that he believed the 103 estimate was far too low.  

One of Pat’s reasons was that "the HAMP modifications will have a failure rate of at least 75%.  That is due to the Debt Ratios that the mods are approved at. In Feb, the mean ratio was 59.8%.  In Mar, it was 62.7%, which to increase that much, most every Mar approval was far above the 62.7 number."

In this article, Pat discusses the HAMP loan modification program in more detail. 

HAMP = Foreclosure

Courtesy of Patrick Pulatie (originally published at Implode-O-Meter Blog)

Foreclosure Filings Spike Upward Nationwide

Over the last year, I have been watching the HAMP modification program with great interest. I have wanted to believe that the Federal Government would actually put into place a loan modification program that would help homeowners, though I knew that this was likely false hope. The results are now in, at least in my opinion.

HAMP is a fraud. Nothing else can be said otherwise. The Government has once again put into place a program that will not help homeowners. Instead, HAMP modifications will end up postponing homes foreclosures for a period of time for modified loans, but, most will end up losing the home in the end, except for a “very” lucky few who actually make it. I cannot believe that the Government expected anything other than the HAMP program would end up being a failure. To understand what to expect, we must look inside the numbers.

In March, the February results for HAMP were released. Key points of the update were:

Foreclosed Homes Sold At Denver Auction

* 1.3 million total trial modification offers.
* Almost 1.1 million trial modifications have begun since the program began.
* 72,000 new trial modifications started in February.
* More than 170,000 permanent modifications granted to date.
* 91,800 other permanent modifications offered and awaiting acceptance.
* 0.9% permanent modifications cancelled
* 8.8% total modifications cancelled, 88,663 total

If one looks at these numbers and compares the…
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HAMP to the Rescue

HAMP to the Rescue

 

Courtesy of MIKE WHITNEY writing at CounterPunch 

jr. deputy accountantLast Friday, the Obama administration announced changes to its Home Affordable Modification Program (HAMP) The most significant change is "principal reduction". By reducing the balance on underwater loans, the administration hopes to lower the number of foreclosures which have soared to more than 300,000 per month.  This looks like a plan that could work, since most foreclosures are the result of  negative equity or unemployment. If the banks and other investors agree to the terms of the program (and it looks like they will) then more homeowners will be able to avoid foreclosure, prices will stabilize, and the recovery will gain momentum. There is one drawback, however, which is moral hazard writ large.  The new program rewards the speculators who bet on dodgy investments and who’ll be able to exchange their garbage securitizations for government-guaranteed FHA loans.

In fact, it looks like that was the real purpose of the program from the very beginning. This is an excerpt from March 30, Bloomberg News:

"Subprime-mortgage securities are rising at an accelerating pace as the U.S. begins to encourage reductions to homeowners’ balances, which may lead to fewer foreclosures and a quicker end to the housing slump….Subprime-loan bonds rated AAA when created in the first half of 2006 climbed 3.2 percent last week to 49.1, the highest since January 2009, according to Markit Group Ltd.

“Senior-ranked bonds tied to borrowers with poor credit will mostly benefit after the Treasury Department said for the first time it would seek to cut the size of mortgages, reducing the likelihood that loan modifications will fail, according to JPMorgan Chase & Co., Morgan Stanley and Barclays Plc. The revised plan also supports the housing market by helping avert more foreclosures, Amherst Securities Group LP analyst Laurie Goodman said." (Bloomberg)

So, it looks like Obama’s modification program has touched-off a gold rush in toxic paper. Subprime securitizations which had been worth next to nothing, are presently the hottest item on Wall Street. Main Street’s loss will, once again, mean windfall profits for Wall Street’s hedge fund managers and brokerage kingpins. It’s a subprime bonanza! A recent interview I had with a Wall Street veteran (anonymous) had this to say on the topic: 

"It sounds like the investors in securitizations will be swapping underwater real estate for government-insured paper… I


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Zero Hedge

FDA Approves Gilead's Remdesivir To Treat COVID-19 Despite Data Showing Drug Doesn't Work

Courtesy of ZeroHedge View original post here.

Despite reams of data from an international WHO study raising serious questions about its efficacy, the FDA has finally approved the use of Gilead Science's remdesivir - a powerful antiviral originally developed to treat ebola - for the treatment of COVID-19, making it the first such drug approved to treat the virus in the US.

The FDA first granted the drug emergency authorization in May, allowing hospitals and ...



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Phil's Favorites

SPINNING WHEEL

 

SPINNING WHEEL

Courtesy of Almost Daily Grant's

Top of the heap no more. International Business Machines Corp. reported third quarter earnings on Monday, including $17.56 billion in revenues.  That’s down 2.6% from a year ago and 3.1% sequentially and the weakest result since the first quarter of 1997. 

While $2.58 in headline earnings per share was down 4% from a year ago, a series of salutary one-time adjustments spruced up that figure, which was 27% above the $1.89 per share derived from generally accepted accounting principles.  Even those GAAP results were flattered by a meager 7% corporate tax rate.  In 1985, when then-dominant IBM commanded a 6.4% share of the market cap-weighted S&P 500 (a record single-stock concentrati...



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Politics

How to track your mail-in ballot

 

How to track your mail-in ballot

Make sure you know when your ballot is arriving, and whether it’s been accepted for counting back at your election office. erhui1979/DigitalVision Vectors via Getty Images

Courtesy of Steven Mulroy, University of Memphis

Many voters who want to participate in the election by mail are concerned about when they’ll receive their ballot – and whether it will get back in time to be counted.

The pandemic has caused interest in ...



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ValueWalk

A New Judge At The Expense Of COVID Relief

By Ankur Shah. Originally published at ValueWalk.

What’s At Stake for Small Businesses with another Conservative Supreme Court Confirmation?

Q3 2020 hedge fund letters, conferences and more

Press Call - Monday - 2pm ET - Register

Senate Wants A New Judge At ...

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Biotech/COVID-19

Disney's pivot to streaming is a sign of severe COVID economic crisis still to come

 

Image by Eiji Kikuta from Pixabay

 

Disney’s pivot to streaming is a sign of severe COVID economic crisis still to come

Courtesy of Hamza Mudassir, Cambridge Judge Business School

Disney has announced a significant restructuring o...



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Kimble Charting Solutions

Doc Copper/Gold Indicator Breaking Out Again?

Courtesy of Chris Kimble

The Doc Copper/Gold ratio broke above a 2-year falling channel back in 2016 at (1). Following this breakout, it rallied for the next year. During that year, Copper related assets did very well!

The ratio peaked in the summer of 2018 and created a series of lower highs over the past two years.

The strength of late has the ratio attempting to break above dual resistance at (2).

If the ratio continues to push higher and succeeds in breaking out, Copper, Basic Materials (XLB), and ...



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Chart School

Dow Gann Angle Update

Courtesy of Read the Ticker

Time to see what happens to the Dow post US elections.

The Dow Gann Angle Target 3 (from 2007 top) is on the table, and what a ride that will be. The FED went BRRRRR is all the fundamental news you need to know. Gann angles are very good tool to see how the masses are pushing price.


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The last two US elections saw Bitcoin and the DOW rally well for 6 months, due to stimulus. The most bearish 2020 US Election case for the markets is a Biden win with the Senate and Congress controlled by the Democrats, somehow this blog feels that is very unlikely. So what could go wrong!


...

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Digital Currencies

Bitcoin: the UK and US are clamping down on crypto trading - here's why it's not yet a big deal

 

Bitcoin: the UK and US are clamping down on crypto trading – here's why it's not yet a big deal

Where there’s a bit there’s a writ. Novikov Aleksey

Courtesy of Gavin Brown, University of Liverpool

The sale and promotion of derivatives of bitcoin and other cryptocurrencies to amateur investors is being banned in the UK by the financial regulator, the Financial Conduct Authority (FCA). It is a...



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Mapping The Market

COVID-19 Forces More Than Half of Asset Management Firms to Accelerate Adoption of Digital Marketing Technology

By Jacob Wolinsky. Originally published at ValueWalk.

There is no doubt that the use of technology to support client engagement initiatives brings both opportunities and threats but this has been brought into sharp focus this year with the COVID-19 pandemic.

The crisis has brought to the fore the need for firms to enable flexibility in client engagement – the expectation that providers will communicate to clients on their terms, at their speed and frequency and on their preferred channels, is now a given. This is even more critical when clients are experiencing unparalleled anxiety from both market conditions and their own personal circumstances.

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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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