“In the short run, over the next half decade to decade, it’s going to be extremely unlikely, virtually impossible for that to happen because all the programs that created the bubble are outlawed now,” said David Stevens, CEO of the Mortgage Bankers Association. “What really concerns me is how are people going to behave outside the QM protection.”

(Read more: Why shut down Fannie and Freddie now?)

Lenders can still operate outside the QM rules but don’t get the same legal protections in cases of default, and they cannot sell the loans to Fannie and Freddie. They need to hold on to the risk. Still, the non-QM market is growing even before the QM rules take effect in January.

The leader of this movement is Date himself. He formed a firm, Fenway Summer, to launch the new mortgage products.

“I think the best credit models, the ones that really pay for themselves in terms of risk-adjusted returns over time, are the ones where you make great credit decisions and then you actually bear the risk of those decisions working out well or working out poorly,” said Date, adding that he is optimistic about this new market.

Loans outside QM will be more costly but will offer investors greater returns. They will still have to comply with ability-to-repay but not the QM standards. Therefore, borrowers who may have very large assets but little to no income could qualify. Interest-only, adjustable-rate mortgages would also fall into this category.

“I am quite confident that a senior funding market will develop for non-QM loans—I have no doubt about that at all,” Date said. “It is simply too big of a market.”

Wells Fargo will also operate outside QM for some loans.

“When you look at the entire profile of the borrower, we can be comfortable they have the ability to repay even though their income by itself may not fall into the standard dictated by the qualified mortgage,” said Codel, who added that non-QM loans may be an even safer product because lenders will hold more risk and be subject to legal action in the case of a loan failure.

(Read more: Map: Tracking the recovery)

Still, the non-QM market does open the doors for lenders seeking higher returns through higher risk, which is how much of the recent trouble began, at least in the mortgage-backed securities trading space. Regulations for investors in loans are still being finalized, but recent proposals follow the QM standards.

“That is where I think drawing the boundaries around the rules can be a good thing but it can also set up bad behaviors outside those boundaries, and we’re going to see those kinds of institutions being created, I’m confident of it,” said Stevens.

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick.

Questions?Comments? facebook.com/DianaOlickCNBC

Article source: http://www.cnbc.com/id/101036630

The experts at RealtyTrac told 7 On Your Side that home prices have increased 28 percent in the Bay Area from the time the housing market hit bottom in February 2012. In San Francisco, the prices have risen even more dramatically.

Brian Miller saw first hand how frantic the housing market in San Francisco can be right now.

“I found myself being constantly outbid, putting in offers of 20 percent over asking, getting outbid at 50 percent over asking in cash,” Miller said.

That type of activity didn’t surprise Serena Kokjer Greening of Guarantee Mortgage. She says the small number of homes for sale combined with the improved employment picture is leading to bidding wars.

“You’ll see properties getting six, eight, even 20 offers which, you know, hadn’t happened in four to five years here,” Kokjer Greening said.

All those offers mean rising prices taking us closer to the bubble, the point when homes are considered overpriced.

The Vice President of RealtyTrac Daren Blomquist says we’re still 21 percentage points below the peak of the housing bubble in the Bay Area.

“But then if you focus in on the city, that’s where we’re very close actually to the peak of the housing bubble in San Francisco,” he said.

Blomquist says San Francisco is just 6 percentage points from reaching that bubble stage.

“I think it’s pretty dangerous,” he said.

“Today I received probably my eighth denial of a modification,” San Francisco resident Gale Rosboro said.

Rosboro wrote President Barack Obama and the White House forwarded her case to the Treasury Department to assist her in getting a modification from Wells Fargo. So far, even that hasn’t helped.

“They’ve made no move towards working with me to get a modification,” Rosboro said.

In an email, Wells Fargo told 7 On Your Side, “We have worked with Ms. Rosboro for nearly three years and will continue to try to identify options that are appropriate for her individual financial circumstances. Our foreclosure rate is less than 1 percent.”

Ironically, rising home values could make it even more difficult for struggling homeowners to get modifications.

“I think that people are barely hanging on. There have been a lot of cuts and its been very difficult for families,” Alliance of Californians for Community Empowerment spokesperson Grace Martinez said.

Blomquist predicts another round of foreclosures in San Francisco in the coming months.

“Four of the last five months in San Francisco foreclosure starts have increased from the previous month,” he said.

Blomquist advises home buyers to be patient and not feel you have to buy right now.

Miller waited and found something he could afford. “It feels great, I mean I’m very excited, he said.

RealtyTrac says the next wave of foreclosures in San Francisco won’t be an overwhelming flood, but it does expect an uptick.

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Article source: http://abclocal.go.com/kgo/story?section=news/7_on_your_side&id=9196447

(Read More: Rising Rates Scare Borrowers Into Action)

In addition to the 29 servicer test results, Smith also reported receiving 59,586 consumer complaints as well as 797 from mortgage professionals between October and the end of March 2013.

The top consumer complaint was that a single point of contact was not provided or that contact was either difficult to deal with or to reach. The lack of a single servicing agent to work with each customer has led to dual-tracking; that is when one side of the bank is unaware that the other side is working on a loan modification and a foreclosure is completed while the borrower is still working through a mortgage modification.

Dual tracking violations of single point of contact and of timeline standards for loan modifications are also the crux of a lawsuit announced in early May by New York State Attorney General Eric T. Schneiderman against Bank of America and Wells Fargo. Schneiderman jumped the gun on Smith’s report, citing 339 violations of the National Mortgage Settlement in New York.

“Wells Fargo and Bank of America have flagrantly violated those obligations, putting hundreds of homeowners across New York at greater risk of foreclosure,” Schneiderman said in a statement released May 6.

(Read More: More Evidence Banks Violated Mortgage Pact: NY AG)

Former Bank of America employees, in affidavits filed in a Massachusetts lawsuit last week, claimed the lender paid them bonuses to deny loan modifications, lie to customers and initiate new foreclosures. Bank of America denied the allegations.

Smith had no comment on either lawsuit, saying only, “The single biggest deficit we have in the mortgage business is a deficit of trust.”

Article source: http://www.cnbc.com/id/100825528

(Read More: Map: Tracking the US Real Estate Recovery)

The settlement’s monitor, former North Carolina Banking Commissioner Joseph A. Smith noted, “a significant increase,” in consumer complaints in the second half of 2012.

In a February 2013 report he reported 5,700 consumer complaints submitted to his office, about half of which related to problems with loan modifications or customer service.

The banks have extended close to $46 billion in gross relief to more than 550,000 borrowers under the settlement so far, according to the Office of Mortgage Settlement Oversight. Thousands of borrowers have had their mortgage principal slashed under the settlement, which should reduce future delinquencies. Negative equity is a primary driver of new delinquencies, a fact all too clear in a new report Monday from Lender Processing Services.

“Looking at the March data, we see that borrowers with equity are actually outperforming the national average—at 0.6 percent, this group is quite close to pre-crisis norms,” said Herb Blecher of LPS Applied Analytics, which released the delinquency report Monday.

(Read More: Housing Recovery Shows Up In Job Gains)

“The further underwater a borrower gets, the higher those problem rates rise. Borrowers with loan-to-value (LTV) ratios of just 100-110 percent are actually defaulting at more than twice the national average. For those 50 percent or more underwater, we see new problem rates of 4 percent.”

Article source: http://www.cnbc.com/id/100710946

The median home price in Marin also rose to $650,000 last month, a 21.4 percent increase over February 2012 and a $10,000 jump from the median sale price in the county in January.

Marin fell in line with regional and statewide real estate trends last month, which saw fewer homes sales than in February 2012, according to figures provided by DataQuick, a San Diego-based analysis service.

Sales are generally flat from January to February, according to DataQuick’s analysts.

Marin saw a slight decline in the number of homes sold between February 2013 (201 homes) and February 2012 (203 homes). But more homes were sold in Marin County in February than in January of this year, when 181 houses traded hands.

The median price of a home sold in the nine-county San Francisco Bay Area skyrocketed nearly 25 percent when comparing February 2013 to February 2012, the data showed. The median has had a double-digit year-over-year increase the last nine months, and the past four months have seen gains above 20 percent.

Other interesting real estate market facts this month? DataQuick supplied these:

• The typical monthly mortgage payment that Bay Area buyers committed themselves to paying last month was $1,460. That was down from $1,479 in January, and up from $1,243 a year ago.
• The most active lenders to Bay Area home buyers last month were Wells Fargo with 15.0 percent of the market, Stearns Lending with 4.0 percent, and RPM Mortgage with 3.7 percent.
• Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 13.6 percent in the Bay Area in February. That’s the lowest since November 2007.

“…[W]ith a recovering economy, prices still closer to the bottom than to the top, with ultra-low mortgage interest rates and tight supply, the stage is set for price gains,” said John Walsh, DataQuick president. “This spring is going to be interesting.”

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Article source: http://larkspurcortemadera.patch.com/articles/marin-home-prices-rose-more-than-20-percent-in-february-323dc8ba

Sonoma County bucked regional and statewide real estate trends last month, which saw fewer homes sales than in February 2012, according to figures provided by DataQuick, a San Diego-based analysis service.

Sales are generally flat from January to February, according to DataQuick’s analysts.

But Sonoma County saw a 6.6 percent increase in the number of homes sold between February 2013 (403 homes) and February 2012 (378 homes). Last month’s sales also are on-par with the 398 homes sold in January of this year.

The median home price in Sonoma County also rose to $345,000 last month, a 16.9 increase over February 2012 and a $5,000 jump from the median sale price in the county in January.

Last month’s figures showed the median home price for the county was $340,000, up from $285,000 in January 2012.

The median price of a home sold in the nine-county San Francisco Bay Area skyrocketed nearly 25 percent when comparing February 2013 to February 2012, the data showed. The median has had a double-digit year-over-year increase the last nine months, and the past four months have seen gains above 20 percent.

Other interesting real estate market facts this month? DataQuick supplied these:

• The typical monthly mortgage payment that Bay Area buyers committed themselves to paying last month was $1,460. That was down from $1,479 in January, and up from $1,243 a year ago.
• The most active lenders to Bay Area home buyers last month were Wells Fargo with 15.0 percent of the market, Stearns Lending with 4.0 percent, and RPM Mortgage with 3.7 percent.
• Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 13.6 percent in the Bay Area in February. That’s the lowest since November 2007.

“…[W]ith a recovering economy, prices still closer to the bottom than to the top, with ultra-low mortgage interest rates and tight supply, the stage is set for price gains,” said John Walsh, DataQuick president. “This spring is going to be interesting.”

Article source: http://petaluma.patch.com/articles/sonoma-county-home-prices-on-the-rise-again

“When we began the Independent Foreclosure Review, the OCC pledged to fix what was broken, identify who was harmed, and compensate them for that injury,” said Comptroller of the Currency Thomas Curry in a written statement. “While today’s announcement represents a significant change in direction, it meets those original objectives by ensuring that consumers are the ones who will benefit, and that they will benefit more quickly and in a more direct manner.”

The banks, including Bank of America, Citibank, JPMorgan Chase and Wells Fargo, will make $3.5 billion in direct payments to borrowers and $5.2 billion in other assistance, such as loan modifications and forgiveness of deficiency judgments. Four other banks, EverBank, Ally, HSBC and One West, were involved in the talks but did not sign the deal. Together they service close to half a million loans. The OCC says conversations with them continue.

All 3.8 million borrowers, designated as those who were in any stage of foreclosure in 2009 or 2010, will receive something, regardless if they were wronged in any way, according to federal regulators. The loan servicers will divide borrowers into eleven different categories, and the regulators will designate a standard payment for each category.

Bank of America’s share will be the largest at just under $3 billion in direct payments and borrower assistance. Bank of America took on the ills of Countrywide Financial.

“We support the new approach because it expands the number of borrowers who will receive payment, speeds the delivery of those payments, and will provide support for homeowners still struggling to make payments and encourages continued community stabilization efforts and recovery of the housing market,” said Bank of America spokesman Dan Frahm.

This settlement follows a $25 billion deal last year with many of the same mortgage servicers and state attorneys general. So far that has resulted in nearly $22 billion in consumer relief and $4.2 billion pending to 300,000 borrowers through the end of September, roughly $84,385 per homeowner. (Read More: Forty States Sign On to Foreclosure ‘Robo’ Settlement.)

Article source: http://www.cnbc.com/id/100359672

We’ve written numerous times about how crazy expensive buying a home in the Bay Area is for the average folk.  Out comes another survey, this one by the National Association of Home Builders/ Wells Fargo Housing Opportunity Index, that confirms what we already know about Bay Area real estate.  As AOL Real Estate reports, this survey looks at a metropolitan area’s median home price and median income and then determines what percentage of the homes an average homebuyer can afford.

The San Francisco metro area ranks 2nd in the nation in housing affordability

Based on these statistics, the San Francisco metro area was the second least affordable area to buy.  With a median home price of $659,000 and median income of $103,000, only 31.4% of homes are affordable to the average Bay Area resident.  This wasn’t too far off from New York City, which was the least affordable place to buy, where the average New Yorker could afford to buy only 28.5% of homes there.

Heading south along the bay, San Jose was ranked the sixth least affordable place to buy.  The median home price there was $530,000.  Median incomes in the San Jose metro area were $105,000 and based on these two numbers, about 46.2% of homes are affordable to the average homebuyer.  Better, but still not great.

San Jose is 6th in the country in housing affordability

Interestingly, the article also points out that San Francisco and San Jose were two of only a handful of metro areas where the median income was in the six figures – all thanks they say to the once again booming tech industry.

In all, California heads the list as the least affordable state.  In addition to San Francisco and San Jose, the metro areas of Los Angeles, Santa Ana and San Diego made the list.  To look at the other areas that made the list, click here.

Article source: http://blog.sfgate.com/ontheblock/2012/12/07/san-francisco-2nd-san-jose-6th-least-affordable-places-to-buy-in-the-country/