For the last year, a small team of traders has worked here to buy massive amounts of mortgages to fill the void left after institutional investors quickly retreated in the throes of the 2008 financial crisis, unable or unwilling to put money into the fast-melting mortgage arena.

The purchases have given the Federal Reserve its largest balance sheet ever and triggered fears of runaway inflation. But most analysts now credit them for lowering mortgage rates, providing a vital lifeline for the battered housing market.

“Something like this had never been tried on this scale before,” said Mark Gertler, a former resident scholar at the New York Fed and an economics professor at New York University. “The fact that they got it mostly right is quite remarkable.”

TO CONTINUE READING THIS ARTICLE, CLICK THIS LINK FOR THE LOS ANGELES TIMES: As Fed’s mortgage purchases end, eyes turn to investors – latimes.com.

Another element of the new program is meant to temporarily reduce the payments of borrowers who are unemployed and seeking a job. Additionally, the government will encourage lenders to write down the value of loans held by borrowers in modification programs.

The escalation in aid comes as the administration is under rising pressure from Congress to resolve the foreclosure crisis, which is straining the economy and putting millions of Americans at risk of losing their homes. But the new initiatives could well spur protests among those who have kept up their payments and are not in trouble.

The administration’s earlier efforts to stem foreclosures have largely been directed at borrowers who were experiencing financial hardship. But the biggest new initiative, which is also likely to be the most controversial, will involve the government, through the Federal Housing Administration, refinancing loans for borrowers who simply owe more than their houses are worth.

TO CONTINUE READING THIS ARTICLE, CLICK THIS LINK FOR THE NEW YORK TIMES

Big Expansion in Effort to Aid Homeowners Is Proposed – NYTimes.com.

The average homeowner may owe their lender as much as two-and-a-half times more than the home is worth, the Office of the Special Inspector General for the Troubled Asset Relief Program states in its new report examining the administration’s year-old $75 billion Home Affordable Modification Program, citing November data from Fannie Mae.

Yet the program doesn’t address this problem of negative equity — commonly referred to as being “underwater” — according to the report. The administration’s effort has been touted as a way to stem the rising tide of foreclosures by reducing monthly payments for up to four million troubled borrowers.

TO CONTINUE READING THIS ARTICLE, CLICK THIS LINK FOR THE HUFFINGTON POST

Watchdog: Obama Foreclosure Program Is Likely To Be A Failure.

“For the most part, the bottom line was, ‘I’m being squeezed out of my home because I couldn’t make my mortgage payments,’ ” said Leslie Appleton-Young, the association’s chief economist.

In response to another question on specific financial woes, sellers cited difficulty meeting  monthly mortgage obligations (30%); loss of a job (18%); and mortgage payment increases(15%) as among their primary motivations to sell, according to the 2009-2010 Survey of California Home Sellers.

By comparison, in 2008, 1 in 5 sellers cited difficulty paying the mortgage, while 11% sold because of financial difficulties.

FOR CONTINUATION OF THIS ARTICLE, CLICK THIS LINK FOR THE ORANGE COUNTY REGISTER: Mortgage woes lead to most home sales – Lansner on Real Estate : The Orange County Register.

The seasonally adjusted annual rate of new home sales plummeted 11.2% to 309,000 last month, compared with a revised rate of 348,000 in December, the Census Bureau said. That’s a decline 6.1% from January 2009.

It was the lowest rate since the government began keeping records in 1963 and comes after declines in November and December.

The drop surprised many industry analysts. A consensus of economists surveyed by Briefing.com had expected January sales to rise to an annual rate of 354,000.

New home sales fell in all U.S. regions except the Mid-west, where sales edged up 2.1%. The Northeast was the hardest-hit last month, with sales plunging more than 35%.

Meanwhile, there were an estimated 234,000 new homes for sale at the end of December, according to the report.

TO CONTINUE READING THIS STORY, CLICK THIS LINK TO CNN: New home sales fall to a record low – Feb. 24, 2010.

Reporting from Washington – Experts fear that a new wave of foreclosures will hit this year as prolonged unemployment makes it difficult for millions of homeowners to pay their mortgages — and many of them aren’t likely to get much help from a federal program aimed at keeping them in their houses.

Banks participating in the Home Affordable Modification Program, announced a year ago this week by President Obama, have been slow to turn temporarily reduced mortgage payments into permanent ones.

“The overarching sense is that the mortgage modification process has not worked that well,” said Bert Ely, an independent banking consultant.

Obama administration officials acknowledge that the $75-billion program, which offers banks cash incentives to reduce payments, has had growing pains, and they said they were considering revisions to make it more effective.

Still, the program is expected to show continued progress when data from January are released Wednesday after a strong push by Treasury Department officials to get banks to make more of the modifications permanent.

FOR CONTINUATION OF THIS ARTICLE, CLICK THIS LINK FOR THE LOS ANGELES TIMES: New wave of foreclosures by end of 2010 is feared – latimes.com.

“We are seeing many families that never before sought government help,” said Greg Blass, commissioner of Social Services in Suffolk County on eastern Long Island.

“We see a spiral in food stamps, heating assistance applications; Medicaid is skyrocketing,” Blass added. “It is truly reaching a stage of being alarming.”

The federal government is again counting the nation’s homeless and, by many accounts, the suburban numbers continue to rise, especially for families, women, children, Latinos and men seeking help for the first time. Some have to be turned away.

“Yes, there has definitely been an increased number of turnaways this year,” said Jennifer Hill, executive director of the Alliance to End Homelessness in suburban Cook County, Illinois. “We’re seeing increases in shelter use along the lines of 30 percent or more.”

The U.S. Department of Housing and Urban Development’s annual survey last year found homelessness remained steady at about 1.6 million people, but the percentage of rural or suburban homelessness rose from 23 percent to 32 percent. The 2009 HUD report, which reflected the 12 months ending Sept. 30, 2008, also found the number of sheltered homeless families grew from about 473,000 to 517,000.

FOR CONTINUATION OF THIS ARTICLE, CLICK THIS LINK FOR THE HUFFINGTON POST: Suburban Homeless: Rising Tide Of Women, Families.

Home foreclosure filings For November 2009 — including default notices, scheduled foreclosure auctions and bank repossessions — numbered 306,627, a decrease of nearly 8 percent from the previous month, but still up 18 percent from November 2008. That number means one in every 417 U.S. housing units received a foreclosure filing in November.

Default notices nationwide were down 8 percent from the previous month, but still up 22 percent from November 2008; scheduled foreclosure auctions were down 12 percent from the previous month, but still up 32 percent from November 2008; and bank repossessions were flat from the previous month and down 2 percent from November 2008.

Many of these homes will be sold at auction.

FOR CONTINUATION OF THIS ARTICLE, CLICK THIS LINK FOR BANKRATE.COM How to buy foreclosures at an auction.