Big Banks | timiacono.com - Part 20

HAFA Likely to be Worse than HAMP

The WSJ Real Estate blog reports that the government’s HAFA (Home Affordable Foreclosure Alternatives) program could be even less successful than HAMP (Home Affordable Modification Program) as less than 350 deals have gone through in about five months.

It may be too early to pass judgment on this effort to avoid foreclosures by providing incentives to the involved parties to do a short sale instead but, given the government’s track record in providing assistance to a very troubled housing market, probably not.

Many real-estate agents say banks have largely ignored the program and that they are applying it unevenly. “Banks are initiating the HAFA transaction and then after three weeks they say, ‘Naw, sorry, you didn’t qualify,’” says Greg Markov, a Phoenix real-estate agent. “That three weeks is a huge pain. You wasted all this time.

Industry officials, meanwhile, say that HAFA has been hindered by extensive documentation requirements and restrictive qualification guidelines. A homeowner that’s already relocated isn’t HAFA eligible, for example, and neither are borrowers that apply within 60 days of a foreclosure date.

The program is also voluntary, which may limit participation from second-lien holders and mortgage insurance companies that see a financial reason to avoid a short sale that requires them to forgo the opportunity to seek deficiencies against borrowers.

During our six month long short sale ordeal (see here for full details), HAFA cost us at least a month of that time as the bank put our “file” into the HAFA process when the listing agent knew from the very beginning that the second lien holder was not going to participate in that kind of a deal. Anyone trying to buy a short sale property (particularly with a listing agent who is new to this sort of thing) is advised to ask HAFA questions up front.

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Wall Street Regains its Swagger

Wall Street types aren’t waiting until January to find out what their bonuses are going to be as high end spending in New York is surging, details provided in this report at DealBook.

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Largely responsible for the 2008 market crash and subsequent meltdown for the U.S. economy, it doesn’t seem fair that Wall Street should recover first, but, this is just one more reminder that a lot of things in life aren’t fair.

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The Fed Under Fire

It’s probably fair to say that, after the last few years, a lot more Americans know what the Federal Reserve is and what it does, but, that’s not necessarily a good thing as they probably don’t like what they’ve learned. This interview with New York Fed President William Dudley (formerly of Goldman Sachs) probably isn’t going to do anything to change that view.

The initiative to change the Fed’s mandate from low unemployment and stable prices to just a price mandate as detailed by CNBC’’s Steve Liesman early on in the clip is an interesting one indeed – it would be a lot harder to justify monetizing trillions more dollars in government debt without the cover of a nearly 10 percent unemployment rate.

“Crash JP Morgan Buy Silver!”

This is one of the tamer videos over at Max Kaiser’s blog where, by the looks of it, there is a concerted campaign to bring down TBTF bank JP Morgan by urging the masses to buy and take possession of silver bars and silver coins.

Recall that JP Morgan is believed to have massive silver short positions that, you’d think, after the recent price surge, would be causing  a good deal of grief for whoever is keeping the books over there. It looks to be another interesting week in metals markets with gold and silver rising along with the trade-weighted dollar so far today. It’s always kind of creepy when that happens because you know something really bad is happening in Europe.

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