Loan standards curb demand for housing

NEW YORK — Don’t be quick to read strength in the January jump in housing starts. Home builders still face a raft of obstacles, not the least of which is the shrinking number of people able to get a mortgage.

Housing starts surged 14.6% in January to an annual rate of 596,000. All of the gain, however, was in apartment buildings of five or more units.

Multiunit starts jumped 80% to a 171,000 pace, the highest level since February 2009.Read the complete housing story on MarketWatch.

Starts of single-family homes fell another 1% last month, on top of an 8.4% fall in December. The declines follow the downtrend in home sales since last summer when a federal tax credit for home buyers ended.

In addition to the drags from high unemployment and record foreclosed homes for sales, another reason holding back housing is that banks are more particular about who qualifies for a mortgage.

The latest survey of senior loan officers compiled by the Federal Reserve in January indicated slightly more banks were still tightening their mortgage standards than the number that were lowering them. [By comparison, more banks were easing rather than tightening their standards on industrial loans, and they were evenly split on commercial real estate loans.]

While the net percentage of banks now tightening on mortgages is far lower than during the housing collapse, the number still indicates banks are wary about home-lending. And if fewer people qualify for a mortgage, it stands to reason that there will be fewer home buyers and thus fewer housing starts.

The bars to cross aren’t just high credit scores or income verification. As reported in Wednesday’s Wall Street Journal, downpayments are also rising.

The median downpayment in nine metro areas crept up to 22% of the purchase price at the end of 2010, double the rate three years earlier, according to real-estate tracker Zillow.com.

Even though the median price of a new single-family home has fallen sharply to $241,500, the higher downpayment hurdle means potential buyers need about $48,000 in cash on hand, plus extra for closing costs.

The recent rise in mortgage rates is also curbing home buying. According to the Mortgage Bankers Association, the average rate for a 30-year fixed mortgage is up to 5.12% compared to 4.78% at the start of 2011, and applications to buy a home have dropped 9% since then.

Another problem in the mortgage market is the uncertain future for Fannie Mae and Freddie Mac, the agencies that guarantee about 90% of all mortgages written in the United States. If the government decides to shut down Fannie and Freddie, it is unclear how the private mortgage sector will perform or what standards buyers will have to meet to qualify for a loan.

People still need to live somewhere, of course. Which explains why builders broke ground on so many more apartment projects in January.

“If there’s any hope for housing construction, it is not in home ownership but in rentals,” said Joel Naroff of Naroff Economic Advisors. “The surge in multifamily activity, which really started in the second half of last year, is an indication that builders may be looking toward the rental portion of the market, not just condos, as the way to stay in business.”

The curb on construction from higher mortgage standards is not an argument that lenders should return to their free-wheeling ways of the boom. Higher standards should prevent a new round of defaults even if home prices stay at current levels.

Housing, however, is one of those “big-ticket items” that needs financing. Few people have the cash to buy a home outright. Raise the bar on financing and demand will remain weak, meaning housing will be a drag on growth for some time to come.

SOURCE

Allstate sues JPMorgan over mortgage debt losses

NEW YORK, Feb 16 (Reuters) - Allstate Corp (ALL.N) sued JPMorgan Chase & Co (JPM.N) on Wednesday to recover losses after the bank allegedly misrepresented the risks on more than $757 million of mortgage securities the insurer bought.

The lawsuit against the second-largest U.S. bank was filed just seven weeks after Allstate filed a similar lawsuit against Bank of America Corp (BAC.N), the largest bank, over losses on more than $700 million of mortgage securities.

Jennifer Zuccarelli, a JPMorgan spokeswoman, declined to comment on the lawsuit, which was filed Wednesday in the New York State Supreme Court in Manhattan.

Allstate, the largest publicly-traded U.S. home and auto insurer, is one of many to sue lenders for allegedly misleading them about mortgage securities.

The Northbrook, Illinois-based company said it suffered "significant losses" after JPMorgan and its affiliates misled it into believing it was buying "highly-rated, safe securities" backed by high-quality loans.

"In fact," Allstate said, "defendants knew the pool was a toxic mix of loans given to borrowers that could not afford the properties, and thus were highly likely to default."

The securities include many backed by Bear Stearns Cos, which was near collapse before JPMorgan bought it in May 2008, and Washington Mutual Inc (WAMUQ.PK), which failed and whose bank operations were bought by JPMorgan four months later.

Each of those companies were heavily exposed to subprime and other risky mortgages.

Allstate said most of the securities it bought from the various defendants started out with "triple-A" ratings, the same carried by U.S. government debt, but that 97 percent now carry "junk" ratings.

It is seeking to undo the securities purchases, which took place between 2004 and 2007, plus unspecified damages.

JPMorgan in January said it set aside an additional $1.5 billion for legal reserves, mainly to cover mortgage cases.

"This litigation is going to be fought almost securitization by securitization," Chief Executive Jamie Dimon said on a Jan. 14 conference call. "It is going to be a long ugly mess. The important thing is it is not going to be life-threatening to JPMorgan."

JPMorgan also faces a $6.4 billion lawsuit by the court-appointed trustee seeking money for victims of Bernard Madoff's Ponzi scheme. The bank was Madoff's principal banker for more than 20 years. JPMorgan has denied wrongdoing.

SOURCE

Numbers still good in increasingly tight money market

IF you've heard it on television this week or read it somewhere, it's true, President Barack Obama does want out of the mortgage business.

Fannie Mae and Freddie Mac have been under fire lately simply because they are being blamed for the mortgage meltdown over the last few years.

The Federal National Mortgage Association, commonly known as Fannie Mae, was founded in 1938 during the Great Depression as part of the New Deal. It was set up as a government-sponsored enterprise, but it converted into a publicly traded company in 1968.

The corporation's purpose is to expand the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities, allowing lenders to reinvest their assets into more lending, and in effect increasing the number of lenders in the mortgage market.

The Federal Home Loan Mortgage Corp., known as Freddie Mac, is another GSE publicly traded company. Freddie Mac was created in 1970 to help defer some of the debt of Fannie Mae.

Fannie Mae and Freddie Mac are the only two Fortune 500 companies that are not required to inform the public about any financial difficulties that they may be having. U.S. taxpayers were held responsible for hundreds of billions of dollars in outstanding debts. We have seen this with the Troubled Asset Relief Program (TARP) bailout initiated by George W. Bush in 2008.

Taxpayers have been financing the bailout of these troubled institutions and it has become

a very unpopular topic among politicians seeking reelection. What does the new Congress and Obama have in store?

Obama's new plan calls for increasing downpayments of

10 percent on loans backed by Fannie and Freddie. No other state aside from New York will suffer a housing price decrease as much as California. This plan will reduce the number of qualified buyers in the market and thus affect the demand for existing and future inventory.

What does this mean for buyers and sellers? Tighter money markets equal lower home prices. Buyers are already having issues getting qualified for a home that they would have been able to purchase six months to a year ago.

When you reduce the number of qualified buyers looking to purchase a home you automatically reduce the asking price of the inventory out on the open market.

But there is still some resemblance of a private, capitalistic system in place when it comes to home buying.

At the moment, Federal Housing Administration (FHA) loans require a 3.5 percent down payment. In the local market, a first time buyer can essentially purchase a home for an initial investment of approximately $12,500 down and a minimum FICO score of 580.

Those are still good numbers in this ever increasing tight money market. If you have been on the fence on whether or not to sell or buy, look at the big picture. If you're a traditional buyer and not an investor, ask yourself, do I want to be in this house 30 years from now? If the answer is yes, an important factor in that equation - interest rates - are still at 30 year lows.

SOURCE

5 costly reverse mortgage mistakes

Taking on a reverse mortgage can be a smart move or a financial disaster, depending on the type of loan and your circumstances. Avoid these mistakes to make a reverse mortgage a smart move.

Mistake #1: Taking out the wrong mortgage

What’s the best mortgage for you? The one that accomplishes your objectives at the lowest cost. Here, in order of cheapest to most expensive, are home equity financing options for seniors.

• 1. Single purpose reverse mortgage: This loan is available to very low-income seniors and costs little or nothing. It may provide a limited amount of funding for home maintenance or property taxes.
• 2. Home equity loan or line of credit: You have to have good credit and sufficient income to cover monthly payments, and if you do, these loans are very cheap to obtain.
• 3. Home Equity Conversion Mortgage (HECM) Saver reverse mortgage: This is a lower-cost option for those seniors who want to cash out a smaller percentage of their home’s equity.
• 4. HECM Standard reverse mortgage: These loans come with fairly high upfront charges but allow you to cash out a larger portion of your home’s equity.
• 5. Jumbo reverse mortgages: These loans are less regulated, so you need to shop carefully, but they allow people with high-end homes to get larger loans than HECM regulations allow.
• Mistake #2: Not considering your future

Reverse mortgages are characterized by one thing: you don’t make payments on the loan as long as you own and live in your home. However, the definition of “living in the home” can vary from lender to lender. So if you are planning a jaunt around the world or your health is less than optimal, a reverse mortgage may not be for you. The high upfront cost associated with some reverse mortgage programs means that they can be very expensive if you don’t keep your loan for a long time.

In addition, some couples play a risky game when they remove the younger spouse’s name from the home’s deed so that they qualify for a bigger loan (your maximum loan amount is determined by the age of the youngest borrower as well as interest rates and the home’s value). When the older spouse dies or moves out (for example, to a nursing home), the younger one can unexpectedly end up homeless.

SOURCE

Wichita's home equity market tight

Feb. 13--The home equity loan, derailed by the recession, is beginning a slow comeback nationwide.

But not in Wichita, where consumers are still running scared of debt.

"We're still doing home equity loans. We'd love to be doing home equity loans," said Gary Schmitt, who heads residential lending at Intrust Bank.

"The problem is we're not getting very many inquiries or requests. I think the consumer is still very, very hesitant to jump back into acquiring more debt."

The result is a significant Wichita-area slowdown in remodeling and renovation projects, making for an aggressive Home Show, which concludes today at Century II, as builders try to jump start their 2011 business.

"It is tight," said Chad Bryan of Southwest Remodeling in Wichita. "Today, we have a lot of cash clients. For the longest time, especially on our larger products, 50 to 60 percent were equity loans. Now, it's more like 25 or 30 percent, and there are a lot of people out there right now who are very excited about remodeling."

But, Bryan said, many of them can't get their banker to share the excitement.

"Many of our deals go right down to the signed contract, and then the people go to the bank and they can't get the loan," he said. "We've lost a good amount of business to people who just can't qualify for the funds."

Wichita's tight home equity market bucks a national trend, with many mid-size banks jumping back into the home equity loan market.

Risen from the dead

Nationally, the home equity loan has risen from the dead, said Stu Feldstein, president at SMR Research, a New Jersey firm that tracks the home loan market.

"There was a super severe problem from two vantage points -- the consumer and the lender -- that lasted for three years, and the problem was falling property values," Feldstein said.

"The lenders who had the home equity lines of credit are typically in the junior lien position on the loan, and then in foreclosure they lost everything. The loan losses on home equity and second mortgages were horrific. Home equity became a four-letter word, as a guy at a Big 4 bank put it."

But attitudes are shifting nationally, Feldstein said, and they'll shift the same way in Wichita -- eventually.

"Lenders see it as an opportunity right now, and it is for some of them because it's not for others," he said. "The comeback is not yet a national trend but some of the regional banks taking part in the bounceback are significant -- SunTrust, PNC, Associated Bank, Regions Bank."

Feldstein's faith in the Kansas market is grounded in its relative home price stability -- and not so much in the slow return of consumer confidence damaged by the recession.

"The untold side of this for the loan consumer is the income reductions the working have suffered in the recession, which affected more people than just unemployment.

"The fact is, a lot of people are making less. This recession was brutal for all consumers, and that drove loan demand down."

Sense of security

Like many struggling sectors of the Wichita economy, people will start putting money into their homes when their sense of financial security is restored, said Byron Tucker of LeaderOne Financial in Wichita.

"I imagine we'll see a rebound here when home values stabilize," Tucker said. "These loans are pretty difficult right now unless you've got a substantial amount of equity in the house. I haven't done a refinance or had a client pull out cash in about a year."

Local layoffs need to die down, and it wouldn't hurt if negative national real estate publicity dies down with it, Tucker said.

"I don't think we had the bubble like the sand states did, but we had the fear of God instilled in us because of that," Tucker said.

A little boost in big lender confidence wouldn't hurt either, Bryan said.

"It's pretty bank specific right now," he said. "Some of the banks that aren't the more national ones are taking a more aggressive line.

"I'm not talking B, C or D credit, but they are loaning aggressively to more qualified clients. The days of the B, C and D market might be gone."

SOURCE

Pre-Approval On Real Estate Has Its Benefits

In an age where money is tight and time is money, getting a pre-approval for a real estate loan is one of the most useful things to do.

A pre-approval essentially puts individuals or couples in specific categories of houses they can afford. Instead of having a Realtor walking people through houses they know they cannot afford, people will only be shown houses within their certain frame.

All anyone has to do is tell their Realtor what their pre-approved loan is, and the Realtor takes it from their, deciding which houses are appropriate to view for each customer.

In addition, this also prevents any Realtors who try and add commission by selling the more expensive properties that people should not be investing their money into. Not that this happens often, but this only helps decrease it.

Pre-approved loans are consistently proving to be helpful in every aspect of purchasing a house. Whether it is from preventing individuals from getting denied a loan after an offer has already been made, or just saving your time and being more organized, pre-approved loans are the smart decision when buying a new home.

SOURCE

White House's unwritten mortgage memo: Act now

The Obama Administration's newly unveiled housing finance plan may have clouded the picture for policymakers, lenders and bond buyers, but it made the future for borrowers starkly clear: It's going to cost more to get a home loan.

Mortgages have already become more expensive in recent weeks, as Fannie Mae and Freddie Mac began adding risk fees to almost all of the loans they sponsor. Average rates on 30-year fixed rate-loans have already moved from 4.4 percent in November to 5.2 percent now, according to Mortgage Marvel, a loan comparison web site.

In a much-awaited report released Friday, the administration proposed winding down the role of the two government-sponsored mortgage repackagers and left open for prolonged Washington debate what would remain in their place.

It also called for higher down payments, a lower cap on the amount of mortgage that could be guaranteed and another increase in the fees Freddie and Fannie charge in the short term. All of those measures are likely to steepen the cost of securing a home mortgage.

"Rates are probably on the rise, due to the increases in fees," said Keith Gumbinger of HSH Associates, a mortgage research firm. "But will the borrowing process get better, faster or easier as a result of reforms? No."If you can effect a transaction now, it's probably not a bad idea," Gumbinger said.

Rates are also likely to rise as the economy improves and the rock-bottom interest rates that have been protected by the Federal Reserve Board edge up.

The rising credit market rates will have a bigger effect on mortgages than the winding down of Freddie and Fannie, said Scott Happ, president of Mortgagebot, a company that builds and runs mortgage web sites.

The cost of loans that are not handled by the guaranteed mortgages and those that aren't guaranteed is roughly 0.6 percentage points now, he said.

RISING RATES, FEWER OPTIONS

It's not just low rates, but also mortgage products that could disappear as reforms worked their way through the system, some analysts believe. The end of U.S. loan program -- one of the options outlined in the White House report -- "almost certainly will lead to fewer long term fixed rate mortgages (and) higher prices," the Consumer Federation of America said in a statement released after the report.

Home loans in Europe and Canada are dominated by variable-rate loans, for example, and it's conceivable that the long-term fixed-rate loan could become much less common -- or even extinct -- in the U.S., if lenders don't want to offer them without guarantees.

A more likely scenario is that fixed-rate loans would remain, but become relatively more costly, said Sam Garcia of Mortgage Daily, a trade publication.

Homeowners who haven't already nailed down long-term low-rate loans may want to jump at the chance with a refinance now, even if it means bringing cash to the table to replenish equity that may have disappeared in the housing market's price decline.

SHORTER DURATIONS, MORE SAVINGS

Some advisers say the best way to save money on a mortgage could be to look at shorter-term financing, instead of focusing on rising rates and fees that they cannot control. The pullback of Federal subsidies might encourage more prudent borrowing.

READ MORE HERE

Keep Your Home programs launch for Californians in need

The California Housing Finance Agency will use nearly $2 billion in federal funds for four programs to help families avoid foreclosure.

The "Keep Your Home California" programs are for those struggling to pay mortgages. To be eligible in Stanislaus County, homeowners must earn less than $71,400 per year, document a financial hardship (such as loss of employment), be delinquent on their principal residence's first mortgage, owe more than their home is worth, but less than $729,750, and meet other requirements.

The programs provide mortgage assistance of up to $3,000 per month for unemployed homeowners in imminent danger of defaulting on their home loans. Some homeowners may receive up to $15,000 to reinstate mortgages to prevent foreclosures. There also are funds to reduce the principal owed on a mortgage for homeowners facing a serious financial hardship.

SOURCE

JPMorgan Names New Head for Mortgage Business

Hoping to troubleshoot some of the problems plaguing its mortgage operations, Jamie Dimon on Friday dispatched one of his top lieutenants to oversee the Chase Home Lending business.

Frank Bisignano, JPMorgan Chase’s chief administrative officer, will now add supervising the Chase’s mortgage origination and loan payment collection businesses to his duties managing many activities, like technology and real estate, for the bank. David Lowman, the current head of Chase Home Lending, will retain his title but now report to Mr. Bisignano.

The management change comes as Chase’s mortgage business has faced considerable challenges amid the recession. Chase, like most of its peers, has faced enormous losses on its large portfolio of home equity and mortgage loans after loosening its lending standards in during the housing boom. But it has also struggled to digest the mortgage operations that it acquired with its takeovers of Washington Mutual and Bear Stearns during the financial crisis.

Many parts of the business ran on separate technology systems, making a three-way integration especially tricky. At the same time, Chase has come under fire from Washington for failing to cope with a giant wave of foreclosures as well as overcharging several thousand military veterans.

“The mortgage business for everybody has changed tremendously,” Mr. Bisignano said in a brief interview on Friday. “Adding help to it can never be a bad idea.”

Charles W. Scharf, the head of Chase Retail Financial Services, and Mr. Lowman have had their hands full contending with all of these issues over the last few years. They have significantly tightened the bank’s lending standards, halted the sale of new mortgages through independent brokers, and overhauled its servicing operations with thousands of new hires and improved technology to try to keep up with the foreclosure mess. In 2010, Chase also began cordoning off its existing portfolio of real estate loans from those that conformed to its tougher new standards — a so-called “good bank – bad bank” strategy that has been used frequently by financial institutions to restructure their operations.

But with Mr. Bisignano, Mr. Dimon is installing one of his strongest managers with long history overseeing the operations of several banks. He also comes from a family of veterans, which will be crucial to smoothing relations with lawmakers, regulators and military brass.

A trusted lieutenant since their days at Citigroup, Mr. Dimon brought him to JPMorgan Chase in 2005 as his chief administrative officer and tasked him with consolidating the bank’s real estate and finding other cost-savings.

At Citigroup, Mr. Bisignano ran its global transaction services business and helped oversee technology and operations for its investment bank. Mr. Bisignano, 51, will report to both Mr. Dimon and Mr. Scharf.

Here is the email from Mr. Dimon and Mr. Scharf:

As you know, our Home Lending business has gone through a period of enormous challenge and change. Our team has worked day and night for almost three years to deal with the unprecedented credit environment and the added complexity from the WaMu and legacy Bear Stearns EMC merger integrations.

We recognize how much we’ve accomplished, but know we still have a great deal of work ahead of us. Given the importance of this business to our company and our customers, we’ve asked Frank Bisignano, our Chief Administrative Officer, to take on additional responsibilities and get more directly involved in managing this business. Effective immediately, Dave Lowman, CEO of Home Lending, and his team will report to Frank.

Frank will continue to report to Jamie as CAO and will report to Charlie on Home Lending, which will remain part of Retail Financial Services. He continues on the firm’s Operating Committee and Executive Committee, and joins the RFS Management team.

Frank is a great partner to all of us and an extraordinary operating executive. He is an integral part of all six of our lines of business, and we are thrilled to be able to leverage his leadership and experience more directly in Home Lending.

We have a leading Home Lending business. Chase is the third-largest mortgage lender and the #3 mortgage servicer in the country. We have 8 million customers who are living in a home with a Chase mortgage. When customers have difficulties, we do everything we can to help them find a way to avoid foreclosure. We have offered more than 1 million modifications and prevented foreclosure for more than 480,000 customers. We recently announced that we are opening another 25 Chase Homeownership Centers, bringing our total to 76 in 23 states and the District of Columbia.

We look forward to working with Frank to make our Home Lending business even stronger.

SOURCE

Reverse Mortgage Information for Senior Home Owners

If you are a Senior Home owner over the Age of 62, you are in luck! You are now able to tap into your home's equity and use the newly available funds to pay for any expenses you may have. Whether its bills, monthly home expenses, old debt that has been lingering along, or if you just want some extra money to further enjoy your retirement. With a reverse mortgage you can do just that.

The great news about a reverse mortgage is you the borrower can be paid in either one lump sum, given a line of credit to use which will require no repayment fees or receive money monthly. What ever method you choose can benefit you dearly especially if you are in financial hardships, additional income from your very own home can be a big help.

Let Explain Reverse Mortgage help you to secure your financial future today. No more debt, untouched retirement fund, and extra money in your pocket. If that sounds good to you then contact us today.

We can be reach by visiting our website at www.explainreverse.com

Home loan from relatives eligible for tax claims

For those taxpayers who want to realise their dream of owning a house, the Income Tax Act has a provision which allows them to claim interest on loans taken for a buying a house. Deduction is available for loans taken not only for the purchase or construction of a house, but also for repairs and renovation.

This article will discuss various provisions in respect of allowability of interest under the Income Tax Act and conditions to be met for this.

1. No. of properties eligible for claims

There is no restriction with regard to the number of properties for which you can claim the interest. For the purpose, the properties are classified into two categories — self-occupied and let-out. However in case you own more than one house and these houses are either being used for self-occupancy or by your parents or any other relative from which you do not receive any monetary compensation, you have to opt one of these houses as self-occupied and treat other/s as self-occupied.

One property can be treated as used for your own residence, whereas for other properties, you have to offer notional rent for tax. In case of self-occupied property, the taxable value, known as annual value, is taken as nil. In respect of all other properties, the actual rent received or expected to be received is taken as annual value of the property.

2. When can you claim?

Though you are entitled to claim deduction in respect of home loan taken for constructing your own house or for booking an under construction house, the actual deduction cannot be claimed till you take the possession.

It can only start from the financial year in which the construction of the house property is completed and possession is taken.

However, aggregate interest paid on the money borrowed while the property was being constructed will be allowed in five equal installments.

First such installment can be claimed from the year in which the construction of the property is completed or the possession is taken.

3. Requirement with regard to holding period

In respect of claims made towards housing loan repayment to specified institutions, you are required to hold the property for a period of five years from the end of the financial year in which you had taken the possession, failing which all the benefits allowed to you earlier under Section 80C will be subject to taxation in the year of sale.

However, there is no such requirement of minimum holding period in respect of interest allowance. However in case of interest paid for under construction property to claim the full interest, you have to retain the property for five years. Otherwise, you will lose your claim for rest of the years.

4. Limits up to which the interest claim is allowable

In respect of the self-occupied property, there is an overall limit of Rs30,000 for which you can claim the deduction. However, this deduction goes up to Rs150,000 in case the amount has been borrowed after April 1, 1999. For claiming deduction of Rs150,000 you have to satisfy two more conditions. Firstly, the construction of the property should be completed or possession of the property should be taken within three years from the end of the year in which such money is borrowed.

Secondly, you have to obtain certificate/s from the lender specifying the amount of interest payable on such loan. These certificates need to be produced before the assessing office in case your Return of Income is selected for detailed scrutiny, as presently you are not allowed to attach any document with the Return of Income.

There is no upper limit on the amount of interest which you can claim in respect of the let-out property or the property which has been treated as let-out. In case of let-out properties, you do not even have to produce the certificate of interest from lender also.

However, you will have to provide the evidence that the interest is in respect of the money which has been used for the purpose of buying, constructing or repairs etc of the property. Even interest paid in respect of personal loans taken for making down payments or for repairs of the property can also be claimed without the certificate from the lender.

5. Other points to be considered

You may not be aware that you can claim the interest payable in respect of any money borrowed for the purpose of repaying the first loan taken for the purpose of construction, purchase or repair of your house. Thus interest paid on the second loan to repay the first loan is also allowable as deduction under the Income Tax Act.

There is a perception among the general public that for claiming interest deduction the home loan should be taken from banks or specified financial institutions. In reality this is not so. You can borrow the money from anybody including your relatives and claim the benefits of interest claim against your house property.

SOURCE

New Consultant Joins Wells Fargo Home Mortgage To Help Clients

Wells Fargo Home Mortgage recently announced that Gayle Erickson has joined the company as a reverse mortgage consultant. She will exclusively advise senior homeowners wishing to purchase a reverse mortgage loan in order to tap home equity built up over the years. She is headquartered in St. Petersburg, Florida but will serve clients across the state.

Before joining Wells Fargo, Erikson worked as a personal banker for 12 years at Wachovia Bank.

“We are excited to have a reverse mortgage consultant on our team who will be able to focus on the needs of our senior customers in Florida,” said Raymond Newton, Reverse Sales Supervisor. “Reverse mortgage loans are gaining in popularity among senior homeowners, so we are pleased to offer Gayle’s expert consultation.”

A reverse mortgage loan allows homeowners 62 and over to take out as cash some of their home’s equity as a tax-free lump sum. The owners do not have to sell the home, give up the deed, or pay new mortgage payments. The product can be most ideal for persons wanting to supplement their retirement funds or for those with a small balance remaining on their first mortgage and where a portion of the reverse mortgage funds would go to pay off the original mortgage.

SOURCE

Bank of America takes aim at toxic mortgages Read more: Bank of America takes aim at toxic mortgages | Phoenix Business Journal

Bank of America Corp., the Phoenix area's third-largest bank, has formed a division to deal with toxic mortgages. Legacy Asset Services will service defaulted loans and discontinued residential mortgage products.

The unit will be headed by Terry Laughlin, who will oversee the bank’s mortgage modification and foreclosure programs, and will continue to be responsible for resolving residential mortgage representation and warranties repurchase claims.

Barbara Desoer, BofA’s home-loans president, will continue building the Charlotte, N.C.-based bank’s mortgage business. Desoer is responsible for servicing loans for the more than 12 million mortgage customers who remain current on their accounts, and for implementing the bank’s strategy to be the preferred mortgage choice for its 50 million household customers going forward.

In 2010, Bank of America (NYSE:BOA) delivered $306 billion in mortgage lending to 1.4 million customers. It has a 22 percent share of deposits in Maricopa County at $13.7 billion.

“This alignment allows two strong executives and their teams to continue to lead the strongest home loans business in the industry, while providing greater focus on resolving legacy mortgage issues,” says CEO Brian Moynihan. “We believe this will best serve customers — both those seeking homeownership and those who face mortgage challenges — as well as our shareholders and the communities we serve.”

SOURCE