Brewzz resetaurant in Glades Plaza

Recent activity surrounding a loan that backs Glades Plaza and the Commons at Town Center shopping complexes in Boca Raton is showing investors skittishness towards retail properties. The Wall Street Journal reported that days before JPMorgan Chase was scheduled to issue $1 billion of commercial mortgage-backed securities, it removed the $49 million loan issued by Ladder Capital Finance earlier this spring to help Woolbright Development pay off $44.8 million in debt it had on the properties. [more]

Joseph Smith, monitor for mortgage settlement

The $25 billion foreclosure settlement was formally filed in U.S. District Court in Washington D.C. today, the Wall Street Journal reported.

The settlement, between the government and five major mortgage companies — Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo — empowers Joseph Smith, formerly a financial regulator in North Carolina, to monitor banks’ compliance with the 42-page set of standards it creates. Smith will also have the power to levy fines against banks that do not comply with the new standards, the Journal said. [more]

Banks such as JPMorgan Chase, Wells Fargo and Allied Financial are offering incentives of as much as $35,000 in cash to homeowners who opt for short sales, as part of an effort to get troubled mortgages off their books, Bloomberg News reported.

The move towards accepting less from a buyer than a seller’s outstanding loan makes sense for the moment, especially given the current foreclosure backlog, since it’s a faster process than a foreclosure, said Bill Fricke, senior credit officer for Moody’s Investors Service. [more]

JPMorgan Chase disclosed $1.3 billion of expenses linked to faulty mortgages and foreclosures in the third quarter of 2011, bringing the bill for the five biggest home lenders since 2007 close to $69 billion, Bloomberg News reported.

The bank had designated $314 million for buying back defective and faulty loans, but also incurred $1 billion in litigation costs related to the loans and foreclosures, according to its quarterly report.

“This is still far from over,” said Neil Barofsky, former inspector general for the U.S. Troubled Asset Relief Program. “These numbers are very high to begin with, but this is now an enormous overhang on the industry, and it’s well deserved. Sooner or later the banks will pay the price for their behavior.” [more]

Banks including JPMorgan Chase and Bank of America may be forced to pay more to settle claims over their alleged part in the collapse of a $2.3 trillion mortgage backed securities market if individual claimants are allowed to team up with more sophisticated investors to form a class action suit, Bloomberg News reported.

“Class certification raises the stakes tremendously,” said Alan White, a law professor at Valparaiso University in Indiana. “The damages are going be greater in a class action than a series of individual cases.”

Mortgage bond deals involved with the class action suits originally held $204.6 billion of loans, but that figure has dropped to $89 billion as a result of defaults, borrower refinancing and home sales, according to data compiled by Bloomberg. [more]

The Federal Housing Finance Agency plans to sue Bank of America,
JPMorgan Chase, Goldman Sachs and Deutsche Bank, accusing them of
misrepresenting the quality of mortgage securities they assembled and
sold at the height of the housing bubble, and seeking billions of
dollars in compensation, the New York Times reported. The lawsuits
follow subpoenas the FHFA issued a year ago. The timing of the suits
is related to a statute of limitations that expires next Wednesday.The
lawsuits will allege that the banks did not fulfill their duties under
securities law and didn’t pay attention to the fact that borrowers’
incomes were infalted or falsified. [more]

More than 2,200 mortgage-related jobs have been lost through the first half of the year, according to MortgageDaily.com’s second quarter Mortgage Employment Index released today. In the second quarter there were 4,940 hires and 5,404 layoffs, for a net of 464 lost jobs. That’s a marked improvement over the 1,805 jobs lost in the first quarter of 2011, but far worse than the 740 jobs gained during the second quarter of 2010. As of June there were 239,100 mortgage jobs in the U.S., according to a separate Department of Labor report. –Adam Fusfeld [more]

Banks and private equity firms are eagerly throwing their hats in the ring for the approximately $9.5 billion U.S. real estate portfolio on offer from Anglo Irish Bank, the Wall Street Journal reported. The largest single commercial property loan sale since the start of the recession, complete with a number of troubled loans, the portfolio has attracted much attention from investors in distressed property.
By the deadline yesterday, the Blackstone Group, Lone Star Funds, LNR Property, TPG Capital, Colony Capital, Area Property Partners, Starwood Capital Group, Five Mile Capital Partners and the CIM Group had all submitted or were intending to sumbit bids for at least some portion of the portfolio, sources said. The portfolio has also attracted the interest of banks, including Wells Fargo, JPMorgan Chase and Bank of America, given that there are three portfolios of loans that are performing and expected to mostly stay that way through maturity, the Journal said. [more]

Bank of America is said to be pursuing a home mortgage foreclosure deal separate from an overall deal which includes mortgage servicers such as JPMorgan Chase and Citigroup, sources told Bloomberg News.  Bank of America has apparently been holding settlement negotiations with some states over home foreclosures separately from talks with a larger group of state and federal officials.

In its separate negotiations, Bank of America is offering to increase its funding of principle writedowns, a higher offer that what is being discussed in larger settlement talks, but is also seeking a blanket liability release that would be broader than what would be available for the other banks. [more]

As part of a new national strategy to deal with foreclosed and abandoned houses it can’t sell, Bank of America will donate 100 foreclosed houses in the Cleveland area for demolition in partnership with a local agency that manages blighted property, Bloomberg News reported. The bank is planning similar strategies in Detroit and Chicago, with more cities to come, it said.

Getting rid of repossessed properties is one of the biggest issues facing lenders nationally; in the U.S. 1,679,125 houses, or one in every 77, were in some stage of foreclosure as of June, Realty Trac said. If these properties were to flood the market, it would negatively affect prices and discourage buyers.

“There is way too much supply,” said Gus Frangos, president of the Cleveland-based Cuyahoga County Land Reutilization, which works alongside lenders, government officials and homeowners to save vacant homes. [more]