Freddi Mac Predicts Increase in 2011 Home Sales
Freddie Mac forecasts a 5 percent increase in 2011 home sales over 2010, according to its U.S. Economic and Housing Market Outlook for April. The expected pick-up in home sales is due to recent positive employment reports, including gains in the real estate sector. The GSE’s outlook also contends that refinancing will likely account for a smaller share of loan applications later this year as wealthy borrowers decrease and mortgage rates increase.
Credit Counseling Cut in Federal Budget
The budget resolution approved by Congress to keep the federal government running through September includes a package of cuts to federal agency budgets, one of which is HUD’s Housing Counseling Program. In lawmakers’ efforts to trim agency expenditures, $88 million slated to fund counseling efforts on foreclosure and reverse mortgages has been zeroed out. A HUD spokesperson described the curtailment as “painful cuts,” noting that the program provides grant funding to about 2,000 agencies across the country.
B of A Income Drops 39 %
Bank of America said Friday that it turned a profit of $2.0 billion for the first quarter of 2011. That’s down 39 percent from the lender’s earnings a year earlier, largely due to continuing losses tied to its legacy mortgage business. Bank of America took a $4.9 billion hit related to foreclosure delays and other out-of-pocket expenses that the company does not expect to recover, as well as higher litigation costs and loss mitigation expenses. The bank has also confirmed plans to lay off 1,500 mortgage employees.
Robo-Signing Leads to Servicer Reforms
Lawmakers in both the House and Senate are seeking to legislate changes to servicing practices. On the heels of the cease and desist orders issued by federal regulators to a handful of mortgage servicers to address process deficiencies uncovered by robo-signing investigations, four bills have been introduced aimed at reforming the way delinquent borrowers are handled industry-wide and aligning servicer incentives with those of investors and homeowners.
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