“The goal is to reinstate as many borrowers in a modification that performs well,” said Tony Meola, a servicing executive with Bank of America. “It also is likely to lead to faster resolution in those unfortunate situations where foreclosure is inevitable. While not a desirable outcome, the recovery of the housing markets depends on moving through the foreclosure process as quickly and fairly as possible.”

Thus reported the New York Times.

You might want to read this: We settled with the investors, now we have to move this garbage through the system and foreclose on everything. If only the Bank would.

8 Billion (with a B) is a lot of money. But it’s a drop compared to the amount of underwater residential (we haven’t even touched commercial) loans out there.

Want to get the economy running again? Take the hits needed on these bad loans. Re-balance the balance sheet (yes, you WILL BE a smaller Bank), and then let’s get back to business.

My $0.02.

Conveyance of title from one spouse to another for refinancing does not transfer ownership of community property.

A married couple decided to refinance their home, which was community property. Due to the wife’s poor Fair Isaac Corporation (FICO) score, the wife conveyed her legal interest in title to her husband in order to obtain a lower interest rate on refinancing, expecting her husband to reconvey her interest in title after refinancing. The husband refinanced the home, but refused to deed back her legal title to the property. The wife sought to recover her legal interest in the property on dissolution of the marriage, claiming she retained her right to ownership of the home as community property since she did not transfer her community property right to ownership when she transferred her legal interest in title for the purposes of refinancing. The husband claimed his wife did not retain her community property right to ownership since she relinquished her right to ownership of the property when she delivered legal title. A California court of appeals held a spouse who transfers legal title in community property to their spouse in expectation that legal title will be returned upon refinancing of the property retains their community property right to ownership since the transfer of legal title to another spouse for the purpose of refinancing does not terminate the spouse’s community property ownership rights. [In re Marriage of Fossum (2010) 192 CA4th 336]

From the hallowed pages of the Washington Post came news this week that home equity is on the rise.

Digging through the pile to find the pony, the Post reported on what it called “the least-publicized statistic” from Federal Reserve research on mortgage balances and home-value changes:

According to the Fed’s most recent “flow of funds” survey, homeowners’ net equity grew by nearly $1 trillion from the recession’s nadir in the first quarter of 2009 through the third quarter. From June 30 to Sept. 30, net equity rose by $418 billion.

That’s not all that impressive compared with the quarterly increases during the hyperinflationary housing boom years, but it could signal something important: After three years of unprecedented shrinkage in home equity — and three years of rapid expansions in the number of underwater borrowers with negative equity — there are signs that the down cycle may be shifting.

A Zillow.com study found that the overall negative equity rate among U.S. homeowners remained flat in the fourth quarter of 2009 – another indicator that the slippery slope of declining home equity may be leveling off.