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Eligible borrowers and their heirs will be able to claim uncashed payments made pursuant to the 2013 Independent Foreclosure Review Payment Agreement through their respective states' escheatment process, according to announcement from the Office of the Comptroller of the Currency (OCC) on Wednesday.

The OCC announced that any uncashed payments made pursuant to the IFR Payment Agreement will be escheated at the end of 2015 in order to allow eligible borrowers and their heirs to claim the funds.

Also on Wednesday, the OCC announced that it has terminated foreclosure-related consent orders against three national mortgage servicers that have met the consent order requirements and imposed business restrictions on six banks that have not met the requirements.

More than $2.7 billion has been distributed to more than 3.2 million eligible borrowers from OCC-supervised institutions as a result of the IFR Payment Agreement, representing about 90 percent of the amount available for distribution, according to the OCC. The agency estimates that about $280 million from OCC-supervised institutions will go unclaimed by the end of this year after all efforts to find remaining eligible borrowers have been exhausted; the escheatment of funds from uncased checks will give eligible borrowers and their heirs an additional opportunity to claim the funds.

The OCC determined that Bank of America, Citibank, and PNC bank have complied with the orders the agency issued in 2011 and the amendments it issued in 2013 and therefore the consent orders against them have been terminated.

The six institutions that the OCC determined have not met all the requirements of the IFR were (alphabetically) Everbank, HSBC Bank USA, JPMorgan Chase Bank, Santander Bank, U.S. Bank, and Wells Fargo, and therefore the OCC issued orders to restrict their business activities.

The restrictions include limitations on the acquisition of residential MSR portfolios, new contracts to perform residential mortgage servicing for other parties, the outsourcing or sub-servicing of new residential mortgage servicing activities to other parties, off-shoring new residential mortgage servicing activities, and new appointments of senior officers responsible for residential mortgage servicing. OCC said the restrictions will vary based on the individual circumstances of each bank, and the agency will continue to monitor the corrective actions for these institutions.

A spokesman for the OCC told DS News that the restrictions are meant to focus servicer action on meeting the remaining requirements in their respective consent orders, and that the restrictions will not impede consumers' access to mortgage loans.

The Independent Foreclosure Review concluded in January 2013 with 10 mortgage servicers reaching an agreement with the Fed and the OCC to pay a combined total of $8.5 billion to more than 3.8 million homeowners whose homes were in foreclosure in 2009 and 2010. The sum included $3.3 billion to be paid directly to borrowers. The claims allege that the servicers mishandled loan paperwork and robo-signed documents related to the foreclosures. The settlement totals were later increased to 15 servicers and a total of $10 billion in payments, according to the Fed.

Report: Investors Move Toward Potential Ocwen Lawsuit

by The Cope Real Estate Team

A group of mortgage bond investors has sentOcwen Financial Corp. a notice of non-performance in what could be the precursor toward a future lawsuit, according to a media report.

Citing an unnamed source, Reuters reported Friday afternoon that a number of major investors, including BlackRock, MetLife, and Pimco, filed a formal notice to Ocwen accusing the servicer of failing to properly collect payments on $82 billion of home loans.

In a public release, law firm Gibbs & Bruns LLP said a "lengthy investigation and analysis by independent, highly qualified experts" turned up multiple instances of Ocwen's failure to perform, including use of trust funds to pay borrower relief obligations through modifications on trust-owned mortgages; conflicts of interest with affiliate companies; failure to maintain adequate records and communications with borrowers; and "[e]ngaging in imprudent and wholly improper loan modification, advancing, and advance recovery practices;" among others.

As a result, the group says the trusts took losses of more than $1 billion.

A voicemail left with a spokesperson for Ocwen was not immediately returned.

The investors' dissatisfaction comes as more bad news to Ocwen, one of the biggest mortgage servicers in the United States.

After closing the book on nearly a year of operational probes with a $150 million settlement, the Atlanta-based firm took another hit earlier this month, when the California Department of Business Oversight (DBO) said it was seeking to suspend the company's mortgage license in the state. DBO spokesperson Tom Dresslar said the state sought the suspension after Ocwen failed to provide adequate proof of compliance with California's Homeowner Bill of Rights.

Shortly after Friday's news broke, the department released a statement announcing a $2.5 million settlement with the company.

Under the terms of that agreement, Ocwen is also barred from taking on any new customers in the state until the regulator determines that it "can fully respond in a timely manner to future requests for information."

The company also agreed to pay for an independent, third-party auditor to be selected by the DBO. That auditor will review Ocwen's loan file information and submit a report on its compliance with state and federal regulations.

"The Department is committed to supporting a fair and secure financial services marketplace for all California consumers," DBO Commissioner Jan Lynn Owen said. "This settlement allows us to move forward and ensure that Ocwen is meeting its obligations under the law."

Report: Housing Market Will Gain Momentum In Next Year

by The Cope Real Estate Team

   The housing market will continue its gradual recovery and gain momentum in 2015 after a disappointing 2014, according to the Wells Fargo Economics Group 2015 Economic Outlook entitled "A Whole New Ballgame," released earlier this week.

Wells Fargo cited a number of reasons in the report for its optimistic housing market predictions for next year, namely easing of credit, job and income growth, and mortgage rates near their lowest levels in a generation. The economists predict existing home sales, which dropped by 3.8 percent for the first 10 months of 2014, will grow by 4.1 percent in 2015.

Single-family starts, which grew by just 6 percent (655,000 units) in 2014 due to a weak job market, slow household formation, tight lending standards, and a backlog of troubled mortgages going through the foreclosure process, are expected to make a comeback in 2015, according to Wells Fargo. Economists expect the percentage of single-family starts to more than double next year, up to 13.7 percent.

Two major factors in the turnaround in homeownership have been the rise in foreclosures and with the earlier decline in home prices, according to Wells Fargo. The homeownership rate, which peaked 10 years ago, has fallen 4.8 percentage points down to 64.4 percent, the lowest rate for homeownership in 19 years.

"We would expect this series to overcorrect because of tight mortgage credit, changing attitudes towards homeownership and household finances continue to be repaired," the report said.

Foreclosures peaked about four years ago, resulting in large numbers of investors purchasing many homes at low prices in major metropolitan areas. The foreclosure crisis is mostly over, having decreased significantly in the last three years since their peak, but the numbers are still above long-run norms, according to Wells Fargo. Foreclosure numbers remain high particularly in judicial foreclosure states, such as Florida, New Jersey, Maryland, and Illinois, where the foreclosure process must pass through the courts. 

Mortgage Delinquency Rate Tumbles to Seven-Year Low in October

by The Cope Real Estate Team

The nationwide mortgage delinquency rate in October fell to its lowest level in seven years, according to Black Knight Financial Services' "First Look" at October 2014 Mortgage Data released on Friday.

October's delinquency rate, or the rate of loans that are more than 30 days past due but not in foreclosure, was reported at 5.44 percent, its lowest level since November 2007, according to Black Knight. The delinquency rate in October was a 4.1 percent decrease from September and a 13.4 percent decline from October 2013.

Both foreclosure pre-sale inventory (the number of residential homes in some state of the foreclosure process) and foreclosure starts took big year-over-year tumbles in October, according to Black Knight. Foreclosure pre-sale inventory totaled 1.7 percent in October, a decline of 33.5 percent from the same month a year ago (and a drop of 3.9 percent from September).  Black Knight reported that foreclosure inventory hit its lowest level since February 2008. Foreclosure starts in the U.S. totaled 81,400 for October, a decline of 31.5 percent from October 2013 and a drop of 10.6 percent month-over-month.

The number of non-current loans, which are those that are more than 30 days past due or in foreclosure, also plummeted both month-over-month and year-over-year, according to Black Knight. The number of non-current loans in the U.S. totaled 3.61 million for October, down 154,000 from September and down 810,000 from October a year ago.

October's pre-payment rate, typically an indicator of refinance activity, increased month-over-month for the first time since July up to 0.98 percent, an increase of 3.6 percent from September and 3.9 percent from October 2013, Black Knight reported. 

October Job Growth Falls Short of Predictions; Unemployment Drops Again

by The Cope Real Estate Team

Job growth fell short of forecasts in October, but other employment indicators showed modest improvements for the labor market.

U.S. employers added 214,000 jobs last month, theBureau of Labor Statistics (BLS) reported Friday morning. Economists had expected payrolls would increase by 240,000, a slight decline from September's preliminary estimate of 248,000 new jobs added.

Meanwhile, the government revised its estimates for payroll growth in August and September, bringing those totals up to 203,000 and 256,000, respectively. With the latest revision to August, job growth has topped 200,000 every month this year except January.

As of the end of October, BLS estimates the national unemployment rate was 5.8 percent, down from 5.9 percent to a new six-year low. Economists had anticipated no change.

Among the nearly nine million Americans counted as unemployed in the government's survey, an estimated 2.9 million were jobless for more than 27 weeks, down slightly from September. Over the past year, BLS says the number of long-term unemployed has dropped off by 1.1 million.

The number of Americans classified as "marginally attached" to the labor force—defined as those who are not in the labor force but who have sought work in the last year—also fell slightly, dipping to 2.2 million after a jump in September. At the same time, the number of people who gave up looking for work climbed, hitting an estimated 770,000.

Overall, the labor force participation rate nudged up, though it still remains historically low at 62.8 percent.

The drop in the unemployment rate came in the same month that policymakers at the Federal Reserve made the decision to end the central bank's bond purchasing program that began more than two years ago.

While broader labor indicators (including the U-6 unemployment rate, which figures in marginally attached workers and those employed part-time for economic reasons) still show some slack, the direction of the market may spur the Fed to move its timeline for raising interest rates forward.

"This is a strong report that suggests the first rate hike is coming sooner than many expect," said Paul Ashworth, chief U.S. economist for Capital Economics. "We expect the Fed to start tightening in March next year."

HUD to Commit $24 Million To Help PHA Residents Increase Earned Income

by The Cope Real Estate Team

The U.S. Department of Housing and Urban Development (HUD) is committing $24 million to certain qualified Public Housing Authorities (PSAs) help their residents increase their earned income, HUD secretary Julián Castro announced on Friday.

HUD has long been an advocate of assisting public housing residents reach self-sufficiency through improving residents' employment situations. The Jobs-Plus Pilot Program sponsored by HUD supports work readiness and job placement efforts in addition to helping public housing residents find and/or upgrade employment by connecting residents with local employers.

Analysts have shown there is a direct correlation between the housing market and the overall economy; the housing market needs the economy to rebound in order to fully recover, and vice versa. HUDs Jobs-Plus Pilot Program is a step toward helping both housing and the economy recover, and then sustaining that recovery, by putting resources toward improving the earning potential of public housing residents.

"HUD is always looking for innovative ways to help families secure new opportunities and reach their full potential," Castro said. "This funding uses housing as a platform for success by linking public housing residents with the resources they need to access better paying jobs. HUD has a unique role to play in helping folks better their lives. In addition to helping folks secure decent, affordable housing, we are committed to ensuring that their housing serves as a springboard to success."

Castro made the announcement of the funding during a walking tour of a neighborhood in Central Falls, Rhode Island on Friday. He has been focused on advancing policies that create jobs, therefore creating opportunities for Americans, with HUD approaching its 50th anniversary next year.

The Jobs-Plus Pilot Program uses a demonstration program combining training, job placement, and traditional employment with a rent incentive and a place-based investment in building. The program's goal for each family is to improve employment and attain a higher earned income, thus helping families achieve self-sufficiency. Under the program model, PHAs partner with the Department of Labor American Jobs Centers.

Unemployment Rate Falls Below 6 Percent for First Time Since 2008

by The Cope Real Estate Team

After giving a soft performance in August, the labor market came back strong last month, knocking the national unemployment rate down below the 6.0 percent mark for the first time in more than six years.

According to the latest monthly figures from theBureau of Labor Statistics, the nation added 248,000 jobs in September, bringing employment growth back above 200,000 after an unexpected drop in August.

Economists surveyed by the Wall Street Journal predicted the economy would add 215,000 jobs last month.

Meanwhile, payroll figures for July and August were revised upward to 243,000 and 180,000, respectively, tacking on an additional 69,000 jobs to their original estimates. Over the last year, monthly job growth has averaged 213,000.

With the latest estimate, the government puts the U.S. unemployment rate at 5.9 percent, its lowest since July 2008. This represents a decline of 0.2 percentage points from the 6.1 percent rate that was reported for August. The number of unemployed persons nationwide fell by 329,000 down to 9.3 million from August to September. Industries that experienced notable job growth in September were business services, retail trade, and health care.

Year-to-date as of the end of September 2014, the unemployment rate has fallen by a total of 1.3 percentage points and the number of unemployed persons has decreased by 1.9 million, according to the Bureau of Labor Statistics.

Housing in U.S. Not Set Up to Handle Aging Population

by The Cope Real Estate Team

The U.S. is not prepared to accommodate its rapidly growing older population where housing needs are concerned, according to a report by Harvard Joint Center for Housing Studies and AARP Foundationreleased on September 2.

The report, entitled Housing America's Older Adults – Meeting the Needs of an Aging Population, estimates that the population of adults age 50 and above will reach 133 million by 2030, a jump of more than 70 percent since the year 2000. But while their numbers are rapidly increasing, the amount of housing that is affordable, physically accessible, and located well is not, the report said.

"Recognizing the implications of this profound demographic shift and taking immediate steps to address these issues is vital to our national standard of living," said Chris Herbert, acting managing director of the Harvard Joint Center for Housing Studies. "While it is ultimately up to individuals and their families to plan for future housing needs, it is also incumbent upon policy makers at all levels of government to see that affordable, appropriate housing, as well as supports for long-term aging in the community, are available for older adults across the income spectrum."

The report found that the rising cost of housing often forces older adults (about 33 percent of Americans age 50 and above and about 37 percent of Americans 80 and above) to cut back in other areas such as food, health care, or retirement savings. And they may be paying those high housing costs for a home that does not even meet their needs, the report found.

Many of the nation's homes lack accessibility features such as no-step entries that are necessary in order for older Americans with disabilities cannot live comfortably in their homes, the report said. Furthermore, transportation is an issue for older Americans who do not drive; often they are forced to live in homes that are in car-dependent areas and are not near accessible transportation, which tends to isolate them from friends and family, the report said. Another issue the aging population faces is that older adults who have disabilities or long-term health care needs are at risk of being prematurely institutionalized due to disconnects between the housing and healthcare systems, according to the report.

The younger baby boomers in their 50s now may not be able to cover the cost of housing in their retirement years due to lower incomes, increased debt, and the rising costs associated with owning a home. The report indicated that most people over age 45 prefer to remain in their current homes, an estimated 70 percent of them will need some type of long-term care by the age of 65 and their housing situation may not be adequate.

"As Americans age, the need for safe and affordable housing options becomes even more critical," said Lisa Marsh Ryerson, president of the AARP Foundation. "High housing costs, aging homes, and costly repairs can greatly impact those with limited incomes. The goal in our support of this report is to address the most critical needs of these households and it is AARP Foundation’s aim to provide the tools and resources to help them meet these needs now and in the future."

Rise in Pending Home Sales Reported for July

by The Cope Real Estate Team

An early indicator of home sales suggests market activity should continue to increase in the coming months as the nation's housing stock rebuilds.

The National Association of Realtors (NAR) reported Thursday a 3.3 percent monthly increase in its Pending Home Sales Index for July, putting the index at 105.9. With July's increase, the index has now risen for four of the last five readings, seeing a slight retreat in June.

Though pending home sales were down 2.1 percent compared to a year ago, July's figure was the highest since August 2013 and was the third straight month in which the index measured above 100, a value NAR considers to be an average level of contract activity.

NAR Chief Economist Lawrence Yun said sales activity benefited from increasingly favorable conditions for buyers in the housing market.

"Interest rates are lower than they were a year ago, price growth continues to moderate and total housing inventory is at its highest level since August 2012," Yun said. "The increase in the number of new and existing homes for sale is creating less competition and is giving prospective buyers more time to review their options before submitting an offer.

"More importantly, steady job additions to the economy are helping family finances and giving them added confidence to enter the market," he added.

Total for-sale housing inventory in July was an estimated 2.37 million existing homes, according to the group.

Three of the four census regions showed sizable gains in pending sales, including the Northeast (6.2 percent), the South (4.2 percent), and the West (4.0 percent). The Midwest, meanwhile, saw a slight decline, posting a 0.4 percent drop.

On an annual basis, the Northeast was the only region to report higher pending sales, coming in with an 8.3 percent improvement.

NAR's pending sales index comes a week after the group reported strong existing-home sales for July. Sales that month were at an adjusted annual rate of 5.15 million, the strongest so far this year. For the entire year, NAR predicts existing-home sales to total 4.98 million, down 2.1 percent from last year.

Vacation Home Sales Rise in 2013; Investment Purchases Fall

by The Cope Real Estate Team

Vacation home sales rose in 2013, while investment purchases fell below the higher levels seen in previous years, according to the National Association of Realtors (NAR). NAR’s 2014 Investment and Vacation Home Buyers Survey found vacation-home sales jumped 29.7 percent to an estimated 717,000.

Investment-home sales fell 8.5 percent to an estimated 1.1 million in 2013, down from 1.21 million in 2012.

NAR Chief Economist Lawrence Yun expected an improvement in the vacation home market. "Growth in the equity markets has greatly benefited high net-worth households, thereby providing the wherewithal and confidence to purchase recreational property," he said. "However, vacation-home sales are still about one-third below the peak activity seen in 2006.”

Vacation-home sales accounted for 13 percent of all transactions last year, their highest share of sales since 2006. Investment sales fell 20 percent in 2013 from 24 percent in 2012.

Yun said the retreat in investment activity is understandable. "Investment buyers slowed their purchasing in 2013 because prices were rising quickly along with a declining availability of discounted foreclosures over the course of the year," he said.

Yun commented that home prices had sharply over corrected in 2011 and 2012, leading many investors to purchase homes cheaply to turn into rental properties. As market conditions return to normal, investors must now evaluate their purchases more carefully—and judiciously.

The report by NAR found, "The median investment-home price was $130,000 in 2013, up 13.0 percent from $115,000 in 2012, while the median vacation-home price was $168,700, up 12.5 percent from $150,000 in 2012."

All-cash purchases remained sizable in the investment- and vacation-home market: 46 percent of investment buyers paid cash in 2013, as well as 38 percent of vacation-home buyers.

Foreclosures also served as a verdant market for investors. 47 percent of investment homes purchased in 2013 were distressed homes. 42 percent of vacation homes were distressed homes.

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The Cope Real Estate Team
Keller Williams Realty
5601 Truxtun Ave #150
Bakersfield CA 93309
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Jared Cope DRE# 01506193 | The Cope Real Estate Team