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Foreclosures, Mortgages
Latest Foreclosures, Mortgages News
Dubious mortgage practices and lax lending standards were blamed for contributing to a housing bubble that eventually burst and thrust the economy from 2007-2009 into the worst recession since the 1930s. Many Americans took out home loans that they didn't understand and bought homes that they couldn't afford. As a result, foreclosures have soared to record highs. It's one of the negative forces restraining the economy's ability to get back on sounder footing.
The foreclosure crisis started years ago when borrowers took out risky loans with variable interest rates that they couldn't afford. Many also qualified for mortgages without providing documented proof of income.
But now, the foreclosure crisis is spreading to homeowners with good credit who took out safe, fixed-rate mortgages.
Allegations of faulty foreclosure paperwork will likely increase the foreclosure inventory into 2011, the Mortgage Bankers Association has estimated. Several major lenders temporarily suspended foreclosures to review thousands of cases for improper handling. Attorney generals in all 50 states launched a joint investigation into the issue.
However, this will only delay foreclosure sales coming on to the market, not stop them. Lenders are on track to take back more than 1 million homes in 2010, according to foreclosure listing service RealtyTrac Inc.
That will continue to weigh on home values because foreclosures are sold at deep discounts and slow the country's housing recovery.
During the next year, lawmakers plan to review the nation's mortgage-lending system and consider a potential replacement for government-controlled mortgage buyers Fannie Mae and Freddie Mac. The financial overhaul signed by President Obama in July didn't address that issue, despite protests from Republicans that it was incomplete without such a plan.
The government rescued McLean, Va.-based Freddie and Washington-based Fannie nearly two years ago to cover their losses on soured mortgage loans, and it estimates the bailouts will cost taxpayers up to $259 billion.
That's nearly twice the $133 billion Fannie and Freddie were in line to receive from taxpayers as of November 2010 and would make theirs the costliest bailout of the financial crisis.
As of November 2010, Fannie and Freddie together have repaid $16.7 billion as dividends to the Treasury Department.
Fannie and Freddie buy up home loans from lenders, bundle them together into securities with a guarantee against default and sell them to investors worldwide. They own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans, which is worth more than $5 trillion. They buy home loans from lenders, package them into bonds with a guarantee against default and sell them to investors.
Separately, an Obama administration foreclosure-prevention program intended to help those at risk of foreclosure by lowering their monthly mortgage payments. But the Treasury Department reports that the effort is still plagued by high failure rates.
Many homeowners have complained that the government mortgage-aid program is a bureaucratic nightmare. They say that banks often lose their documents and then claim borrowers did not send back the necessary paperwork. The banking industry contends that borrowers are not sending back their paperwork.
The housing market, however, remains a huge challenge. High unemployment, tepid economic growth, tight credit and uncertainty about home prices have kept people from buying.
LATEST VIDEO
Evening News Online, 10.13.11
Hotline gives hope to foreclosure victims
Home prices on the rise
Yet another wild week on Wall Street
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Mortgage rates for the past 52 weeks, at a glance
Mortgage rates for the past 52 weeks, at a glance
Read Full Story »
Rate on 30-year fixed mortgage falls to 4.11 pct.
Rate on 30-year fixed mortgage falls to 4.11 pct.
Read Full Story »
Will GOP candidates ignore Nevada's struggles?
The GOP presidential candidates are set to debate in a state that was hit extraordinarily hard by the housing crisis; most don't have much to say on matter
Read Blog »
Free hotline helps homeowners facing foreclosure
Fielding 4,000 calls a day, HOPE Hotline counselors offer free, trustworthy help to those facing foreclosure
Read Full Story »
Mortgage rates for the past 52 weeks, at a glance
Mortgage rates for the past 52 weeks, at a glance
Read Full Story »
Rate on 30-year fixed mortgage rises to 4.12 pct.
Rate on 30-year fixed mortgage rises to 4.12 pct.
Read Full Story »
US foreclosure activity edged higher in 3Q
US foreclosure activity edged higher in 3Q
Read Full Story »
Top 20 states by foreclosure rate in 3Q
Top 20 states by foreclosure rate in 3Q
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US foreclosure activity edged higher in 3Q
US foreclosure activity edged higher in 3Q
Read Full Story »
Ready to refinance? Here's how, if you qualify
Ready to refinance? Here's how, if you qualify
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Summary Box: Mortgage rate on 30-year below 4 pct.
Summary Box: Mortgage rate on 30-year below 4 pct.
Read Full Story »
Mortgage rates for the past 52 weeks, at a glance
Mortgage rates for the past 52 weeks, at a glance
Read Full Story »
DA: Imprisoned NY fraudster wanted witness killed
DA: Imprisoned NY fraudster wanted witness killed
Read Full Story »
30-year mortgage below 4 pct. for first time ever
30-year mortgage below 4 pct. for first time ever
Read Full Story »
Lawsuit claims banks cheated veterans with fees
Lawsuit claims banks cheated veterans with fees
Read Full Story »
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