Week In Review: Federal Reserve Wakes Up; Fla. Foreclosures Down, Fannie Mae CEO Resigns, Banks Questioned Over Home Insurance Hikes
Now that the holidays are behind us and we’re well into the new year, news that will impact the foreclosure market in 2012 is starting to cross our desk. So what headlines were we talking about this week?
This week we blogged about the Federal Reserve finally coming around and looking out for the homeowners, instead of the banks. A 26-page white paper released by The Fed offered up their suggestions on how to fix the broken housing market. They also finally came to the conclusion that government MUST come down harder on lenders. Some of the ideas offered up by The Fed may be tough for Congress to swallow, but we believe they have a good chance of keeping more people in their homes.
We particularly liked the idea of turning more foreclosed and vacant properties into rental homes (so much better for the neighborhoods) and the need to offer principal reduction to more homeowners. Roy Oppenheim expands on this issue in his latest “From The Trenches” video.
Foreclosures were in steep decline across the country in 2011, including a 67 percent drop here in Broward County, according to RealtyTrac. Thanks to the ‘robo-signer’ scandal, lenders were suddenly much more careful about bringing foreclosure cases to the courts. While that is likely to continue in 2012, Roy Oppenheim told the Sun-Sentinel that things could start to pick up.
“It’s going to pick up, but it’s not going to be insane like it was,” he explained.
Palm Beach County also saw a significant drop last year, 58 percent, while Florida was down 63 percent, RealtyTrac reported.
Fannie Mae and Freddie Mac are always at the center of the housing crisis, so we are very curious to see the fallout from Micheal Williams resignation, which came down Tuesday. He’s been with Fannie Mae since 1991 and been head of the company since 2009.
Who replaces him could have a huge impact on the direction of Fannie Mae, David Stevens, the president of the Mortgage Bankers Association told HousingWire.
“Depending on whom you’re hiring sends a strong message about where this institution is headed,” Sanders said.
This means both GSE’s will leadership changes this year, with Freddie Mac CEO Charles Haldeman set to leave his post sometime this year. Housing Wire reports both each made roughly $2.3 million in bonuses,
The banks have been ripping off the homeowner six ways to Sunday, and here’s another disturbing example, courtesy of the New York Times.
The New York Department of Financial Services is investigating multiple banks, including many of the usual suspects like JP Morgan Chase and Bank of America, this time over their use of what’s known as force placed insurance, the Times Louis Story reports. When a homeowner allows their existing homeowners insurance to lapse, something that is all too common these days, the banks step in, often with little notice, and take out new policies.
These end up costing the customer often double, triple, sometimes six times what they paid before. The article cites one unlucky State Farm customer whose policy skyrocketed from $2,000 to $6,000 dollars a year! Benjamin Lansky, the superintendent of the NYDFS, issued 31 subpoenas related to the case, according to Story, who said Lansky is looking to reports of kickbacks to the banks from the insurance providers. With more and more homeowners falling behind on their mortgages, this is another way the banks are engaging in price gouging.
We hope you’ve had a good start to your new year and hope you’ll keep up us here at the South Florida Law Blog so you can stay informed on the foreclosure issues you need to know about.
Have a good weekend!