Category Archives: New Mexico Real Estate

Bank of America Settlement on Bonds That Soured Is Approved

A New York State Supreme Court justice on Friday approved an $8.5 billion settlement between Bank of America and a group of mortgage securities investors, but the ruling contained a caveat that could create new problems for the bank.

Justice Barbara R. Kapnick blessed the 2011 agreement to cover some of the investors’ mortgage losses, but she also said that some of the legal claims by the investors were excluded from the settlement.

Those claims cover potentially billions of dollars of mortgages that were modified to help borrowers stay in their homes.

Banking analysts estimate that Bank of America could have to pay more money to settle those claims, but the amount is unclear. They said the ruling was a reminder that the banks — try as they might — were far from putting their mortgage problems behind them.

“This just made the bank’s murky legal situation even murkier,” said Mike Mayo, a banking analyst at CLSA.

The ruling on Friday involves mortgages issued by Countrywide Financial, which Bank of America bought in 2008. Bank of America has spent years in court dealing with investors who bought bonds backed by Countrywide loans that went into default, causing huge losses.

Lawyers on all sides of the case spent much of Friday afternoon scrambling to interpret the ruling, which initially appeared to be a clear victory for Bank of America and Bank of New York Mellon, the trustee for 530 mortgage bonds bundled by Countrywide Financial.

On many of the legal issues raised about the settlement, Justice Kapnick sided with the banks over the objections of the American International Group, which was a big investor in the bonds.

Lawyers for A.I.G. contended that the settlement shortchanged investors and that Bank of New York Mellon did not act aggressively enough to try to recover more money from Bank of America. They said that the $8.5 billion settlement was a mere fraction of the total estimated losses.

Those issues attracted a lot of the attention in the case, but Justice Kapnick ultimately found that Bank of New York, in many instances, acted properly in helping reach a settlement.

“The trustee did not abuse its discretion in entering into the settlement agreement,” she wrote in the 54-page decision. “And did not act in bad faith or outside the bounds of reasonable judgment.”

She took one exception. The justice said claims by investors regarding loan modifications were excluded from the settlement because the trustee had agreed to settle the claims “without investigating their potential worth or strength.”

“On this issue only, the court finds that the trustee acted ‘unreasonably or beyond the bounds of reasonable judgment.’ ”

The issue of the modifications was raised by the bond investor Triaxx, and had been largely a footnote in the case until Friday.

Triaxx said that the trustee failed to investigate whether Bank of America was obligated to repurchase from investors the loans it modified, and how much those claims could be worth to the investors in a settlement.

According to a lawyer for Triaxx, John Moon, the terms of the mortgage-backed bonds clearly stated that at least $11 billion of the modified loans had to be repurchased. Mr. Moon said approximately another $20 billion in modified loans could also be repurchased, but the language in the bond contracts was less clear.

“The impact of these claims is significant, but it’s not immediately apparent how significant they are,” he said after the ruling.

Bank of New York contends that the contract language is not as straightforward as Triaxx makes it out to be. It also says that federal mortgage modification programs encouraged servicers to modify loans without having to worry about the risk of repurchases.

The trustee could have a difficult time pursuing claims that run contrary to a government policy intended to keep homeowners in their houses.

A statement from Bank of New York said the ruling “vindicated the trustee’s actions by overwhelmingly approving the settlement.”

A Bank of America spokesman said in a statement, “Any outstanding issues raised in the opinion can be addressed without undue delay.”

The ruling could serve as a precedent for other mortgage securities cases still winding their way through the courts five years after the financial crisis.

The 22 bond investors that agreed to the settlement included the money managers BlackRock and Pimco and Metropolitan Life Insurance Company.

Bank of America shares closed down 1.06 percent at $16.75 on Friday, while Bank of New York was down 1.39 percent to $31.96, on pace with other financial companies.

A.I.G. lawyers are planning to carry on their legal battle. “This case is very far from over,” the company said in a statement, adding that the ruling sets a “dangerous precedent that could eliminate important protections for investors.”

The next steps for Bank of America are unclear. Analysts said the bank might have to negotiate a settlement on the modification claims. But first, Bank of New York will have to investigate the merit of the claims — something the judge said it failed to do adequately the first time around.

“If it was up to me,” said Mr. Mayo, the banking analyst, “I would throw a couple extra billion dollars in the pot and call it a day.”

A version of this article appears in print on 02/01/2014, on page B1 of the NewYork edition with the headline: Bank Pact on Bonds That Soured Is Approved.  By MICHAEL CORKERY

 

 

7 Reasons to Own Your Home

7 Reasons to Own Your Home

7 Reasons to Own Your Home
Good information from Realtor Magazine

1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home.


2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®.

In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.

3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.

4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.

5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.

6. Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.

7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.

Online resources: www.mortgage-mates.com

To see how much you qualify for:  CLICK HERE
Jumbo loans also available.
The Passion of Blog!  Be Empowered!

 

5 Reasons to Hire a Real Estate Professional

Originally posted by  The KCM Blog
Posted: 03 Feb 2014 04:00 AM PST
2.3 Blog VisualWe are often asked if it makes sense to hire a real estate professional when buying or selling a home. We always emphatically answer – YES!
Here are five reasons why:

PAPERWORK

An agent will help with all disclosures and paperwork necessary in today’s heavily regulated environment. This helps remove much of the liability a buyer or seller could face.

EXPERIENCE

Navigating today’s real estate and mortgage processes can be like walking through a minefield of challenges. Real estate professionals are well educated in and experienced with the entire sales process.

NEGOTIATIONS

Negotiating such a large financial transaction can get tricky. Agents act as a ‘buffer’ in negotiations with all parties throughout the entire transaction.

PRICING

Real estate professionals help buyers and sellers understand the true real estate value of a property in today’s market. This is crucial when setting the price on a listing or on an offer to purchase.

UNDERSTANDING OF CURRENT MARKET CONDITIONS

There is a plethora of housing information available today. The challenge is that some information appears to be in direct conflict with other pieces of information. A true real estate professional can simply and effectively explain today’s real estate headlines and decipher what they mean to you.
GET PRE-APPROVED FOR A LOAN
Choose a Lender that can get you pre-approved quickly and painlessly.  Whether you are choosing an FHA loan, a VA loan, a Jumbo loan or a specialty SEC 184 Native American Loan, we have the experience to keep the process simple.
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What Issues do Realtors Face? — “I need more customers!”

What are some of the common problems that real estate agents face in growing their business?

As a Realtor for almost 20 years, I can attest to having several real estate problems or issues that many others also seem to have.  For instance,
#1  Inconsistent referrals or lack of customers.
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Past clients working hand in hand with you on new referrals
Sometimes we get so busy working with current clients that we don’t spend enough time developing relationships that will produce future referrals and new customers.
Real estate in large part is driven by referrals.  The agents in the office with the largest production seem to have the biggest circles of influence.  While that may be part of it, reality is that those who spend time developing relationships produce more referrals.
From experience, I know that most Realtors are VERY good at their job.  They know how to stage a home, they know how to market their listings and they know how to write acceptable contracts, but they don’t always focus on pursuing new clients.
If you, or some agents in your office, are having difficulty receiving consistent referrals, what difficulties does this present?  Please reply and let us know.
For me, inconsistent referrals and lack of new customers means unstable/inconsistent income.  
Please comment with some issues that you have dealt with in growing your real estate business–if we can get a discussion going on this maybe we can all benefit from it.
Please comment on what you have done to overcome the lack of consistent referrals andwhat this has meant to your business
# 2  High Advertising Costs
Marketing Strategy BIG
What can we do to combat the cost of advertising?
As real estate agents, we like to get the word out for all listings.  Where do you spend money for advertising?   Signs, farming postcards, “Just Listed” or “Just Sold” postcards, real estate magazines, newspapers, websites, E Flyer Marketing, TV, other?
Please comment on “what difficulty does the high cost of advertising present?”
For me, it makes it more difficult to get the word about listings or services out as efficiently,
Please comment on “How does the high cost of advertising affect your business?”
For instance, for me I must spend more on advertising, shrinking the profit margins, and causing me to work harder for less income
Please comment on “What are some ways to solve the high cost of advertising?”
Blogging,  social marketing, low cost ads
Please comment on  “What would solving the high cost of advertising mean to you?”
# 3  Poor Client Loyalty 
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Niche Marketing and Sphere of Influence Marketing help maintain loyalty.

How have you used these marketing techniques to assure client loyalty? 

Realtors have changed over the years.  Many years ago they would find a potential buyer at an open house or from a call from advertising, such as newspaper or real estate magazine, set an appointment to show a couple of homes in the customers desired price–and then get them pre-approved with a quality lender.
The problem with that strategy was that the buyers would often display poor or no loyalty to the Realtor.
Loyalty issues also arise when agents don’t farm a geographical location or regularly market to their databases.
Please comment on techniques that you have used to maintain client loyalty.
Please comment on what solving client loyalty issues would mean to your business
For most of it simply helps to have a friend in the business.