Mortgage Loans

Pennsylvania has announced that $116 million in low-interest mortgage loans will be made available to help 2,700 low- and moderate-income families buy homes in the state. The total includes $38 million that will be set aside for parents who earn less than $20,000 a year. That includes $1 million to help them pay closing costs. The 30-year fixed-rate loans will be offered at an interest rate of 7.95 percent. Prices of homes purchased under the program may not exceed $69,000 in Philadelphia and its suburbs.

As a Realtor, I am extremely frustrated trying to hold my home sales together while arguing with mortgage lenders to get the buyers' loans approved and funded. Lately, I've had to tell my buyers and sellers to plan on 60 days to get the loan. The big hangup has been slow appraisals that take from two to six weeks, depending on the lender. But the lender's processing delays add several weeks more. Just yesterday, after waiting six weeks, the lender called to say that the loan was ready to close and that my buyers must sign their loan documents within 24 hours.

PHH Mortgage Corp., Mount Laurel, said it will provided end-to-end mortgage origination and loan servicing to HSBC Bank USA. As part of the deal, PHH is expected to take on about 400 HSBC employees who work at a mortgage operation in a suburb of Buffalo, N.Y. The loan-servicing component covers HSBC's portfolio of $15.5 billion of prime mortgage loans and $36.6 billion of loans that HSBC services for third-party investors. — Harold Brubaker

Fulton Financial Corp. said it might have to buy back from an investor up to $22 million in risky home mortgages that went bad during the first three months of scheduled payments. The Lancaster company, which operates Fulton Bank in the Philadelphia suburbs and The Bank in South Jersey, said that it expected to record a $5.5 million pretax charge in the first quarter to cover an anticipated loss on the loans. Most of the problem loans, made by a Virginia subsidiary of Fulton, were so-called 80/20 mortgages, which allow borrowers with no money for a down payment to take out two loans, one for 80 percent of the purchase price, and another - usually with a higher interest rate - for the remaining 20 percent.

The Federal Reserve proposed stricter rules yesterday to prevent mortgage lending policies that are seen as unfair, primarily to minorities and the elderly. The independent Fed had to tread a delicate line between stemming abuses by unscrupulous lenders and keeping legitimate channels of credit open to people with low incomes and those with poor credit histories, in what is called the subprime market. "The subprime lending market has grown substantially, and has increased the availability of credit to borrowers having less-than-perfect credit histories and other consumers who are underserved by prime lenders," a memorandum prepared by Fed Governor Edward Gramlich said.

If you get a home mortgage from Abington Community Bank in Jenkintown, chances are the money will come from deposits kept there by other residents of Philadelphia's northern suburbs. The 140-year-old bank has been making loans this way for decades, and then keeping the loans on its books instead of selling them. "We are looking for the relationship with the customer," said Tom Wasekanes, vice president of originations. While Abington has stayed with community-lending methods, the U.S. mortgage industry has transformed itself in a way that has opened conduits to global capital markets.

Philadelphia's major banks made nearly 50 percent more home-mortgage loans to lower-income families last year than they did in 1991, but officials yesterday couldn't explain why the jump occurred. Leaders of the Delaware Valley Mortgage Plan (DVMP), the 19-year-old consortium of local banks and community groups that tries to funnel loans to poor and working-class families, reported that they completed 1,295 new mortgages and 163 refinancings through the plan during 1992. That's up from a total of 978 home loans in 1991, before refinancings were tracked separately.

With fresh evidence that voluntary mortgage modifications aren't working, a national lawyers' group is urging the government to let the courts fix bad loans. "Court supervision of loan modification is needed, and unlike so many of the responses to the foreclosure crisis so far, there will be no cost to the taxpayer," Henry Sommer of Philadelphia, president of the National Association of Consumer Bankruptcy Attorneys, said Thursday. A study last month of mortgage-servicer reports to investors by Alan White, Valparaiso University School of Law professor, showed that of 3.5 million subprime and slightly less-risky Alt-A mortgages examined, 10 percent were in foreclosure, and another 10 percent were delinquent.

Liberty Property Trust said Tuesday that it made early repayment on $119.3 million worth of mortgage loans. The loans, with an average interest rate of 7.3 percent, were due in March 2012. The Malvern company paid a prepayment penalty of $1.2 million and wrote off $822,000 of financing costs on the transaction. The mortgage loans had been taken out on company properties valued at $217 million. Liberty Property owns and manages 700 sites in the United States and Britain that are used for offices, distribution and light manufacturing.

The Veterans Administration yesterday raised its maximum interest rate for federally backed VA home-mortgage loans by one-half of a percentage point to 10.5 percent, effective Monday. VA spokeswoman Pam Siciliano said the raise reflects recent increases in interest rates in financial markets. In the last 16 months, the VA rate has fluctuated between 8.5 percent and 10.5 percent. It has changed three times this year, with the last change coming on April 4, when the rate was increased to 10 percent from 9.5 percent.

In the Region   Foreclosures down in region   The foreclosure rate among outstanding mortgage loans in the Philadelphia area was 2.71 percent for the month of February, a decrease of 0.10 of a percentage point compared with February 2012, according to data from property information provider CoreLogic . Foreclosure activity in Philadelphia was lower than the national foreclosure rate, which was 2.85 percent. Also in Philadelphia, CoreLogic said, the mortgage delinquency rate increased.

Where will the jobs come from? For most of us, this is the bottom-line question for any discussion of the U.S. economy. It's especially so for the nearly 30 million U.S. workers who are unemployed, underemployed, or so discouraged they aren't even looking for work. It is also a pressing worry for millions of twentysomethings who dutifully earned college degrees but still can't find jobs. And it is for countless others toiling at work they don't like, but afraid to leave to look for something more suitable.

John Stumpf is a survivor, a CEO who kept his job as peers fell after the 2008 financial crisis, a strategist who expanded his company while others shrank theirs, a personable banker at a time of great anger toward his industry. Stumpf is the boss of Wells Fargo NA, of San Francisco, the second-largest bank in the Philadelphia region, by deposits - and one of the few that emerged from the financial crisis with a reputation for responsible banking. Today, Wells, the nation's fourth-largest bank by assets, controls a third of the U.S. mortgage market, giving it by far the biggest share of any bank.

TRENTON - The Christie administration Wednesday acknowledged failure in managing $300 million in federal money to help struggling homeowners but declared that the problems had been fixed and an increasing number of homeowners were being saved from foreclosure. "Listen, it's indefensible; the program was not being run well," said Department of Community Affairs Commissioner Richard E. Constable III, who inherited the issues after he assumed his post in January. "We did a disservice to the folks that we were supposed to serve.

The sweepers arrived first. A half-hour before U.S. Sen. Bob Casey (D., Pa.) was to hold a news conference and take a walk in Kensington on Friday, volunteers were picking up flying papers and flattened cans from the 900 block of East Westmoreland Street, two streets from the El. TV trucks began to pack the curb, and then came Casey, in a blue, open-collar shirt and with a gaggle of aides. The 2012 campaign for the U.S. Senate was again officially in session. On the sidewalk in front of a refurbished rowhouse, with orange mums and zinnias in a flower box, Casey called on the new U.S. Consumer Financial Protection Bureau to make it easier for buyers of low-cost houses (under $75,000)

The New York lawsuit over mortgage-backed securities against JPMorgan Chase & Co., the biggest U.S. bank, will serve as a template for suits against other issuers, state Attorney General Eric Schneiderman said. Schneiderman alleged that the Bear Stearns business that JPMorgan bank took over in 2008 deceived mortgage-bond investors about the defective loans backing securities they bought, leading to "monumental losses," according to a complaint filed Monday in New York State Supreme Court.

Struggling New Jersey homeowners, facing a quickening rate of foreclosures, are supposed to have a lifeline: the HomeKeeper program, run by the state and funded with $300 million from the federal bank bailout. But 15 months after the program was launched, the state says only 10 percent of that money has been spent, to help just 750 homeowners. According to a report from a U.S. special inspector general, New Jersey has drawn the lowest percentage of federal money available to the 18 "hardest-hit" states.

PITTSBURGH - When Donald Yost tried to refinance his mortgage about 30 miles north of Pittsburgh in January, he met a roadblock. It wasn't his credit score - he had a solid rating. Or the appraisal he'd paid almost $500 for - that was good, too. Instead, it was the lease he has that allows a company to drill for gas about a mile under his property, similar to leases many of his neighbors have. Yost said that in the middle of the application process, ESB Bank told him the gas lease was too prohibitive.

The delinquency rate for mortgage loans on one- to four-unit residential properties increased to a seasonally adjusted rate of 7.58 percent of all loans outstanding as of the end of the second quarter, the Mortgage Bankers Association said Thursday. That was an increase of 0.18 percent from the first quarter, but a decrease of 0.86 percent from a year ago, the bankers' delinquency survey showed. The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure.