Archive for September, 2009
Short Sales and Foreclosures Make Up Nearly 1/3 of National Home Sales
September 10th, 2009 Categories: Pre Foreclosures, Real Estate News, Real Estate Trends
By Chris McLaughlin
Federal Incentives Coming for Short Sales
Nearly one-third of all existing homes sold were either short sales or foreclosures, according to monthly data compiled by the National Association of Realtors (NAR), and according to testimony by Federal Housing Administration (FHA) commissioner David Stevens, the mortgage servicing industry is about to see details of an incentive program aimed to prevent foreclosures by encouraging servicers to pursue short sales and deeds-in-lieu of foreclosure. The program is being finalized and will be announced as soon as possible – possibly later this month.
“Because we know that the MHA program will not reach every at-risk homeowner or prevent all foreclosures, on May 14th the Administration announced the Foreclosure Alternatives program that will provide incentives for, and encourage, servicers and borrowers to pursue short sales and deeds-in-lieu of foreclosure in cases where the borrower is generally eligible for a MHA modification but does not qualify or is unable to complete the process,” he said. Yes, in case you’re wondering, this is the same program announced in April – government moves slowly.
Details on federal incentives for short sales
It’s hard to know beforehand what’s coming down the pipeline, but this is what we’ve got so far: Under the Treasury plan, servicers would get a $1,000 “success fee” when a short sale is completed. The home seller would receive up to $1,500 to assist with relocation expenses, similar to the “cash for keys” programs that various servicers offer. Treasury officials are working with an advisory committee to determine how to accommodate the holders of second liens. “Second liens have been a considerable problem for short sales,” said Matt McCabe, the president of Loan Resolution Corp., a Scottsdale, Ariz., company that helps lenders work out defaulted mortgages. Currently there is no uniform policy for banks to accept a payoff for a second lien in order to complete a short sale. Many of the largest banking companies have adopted their own internal policies, which vary. For example, in March, Bank of America Corp. adopted a new policy requiring that 5% of the short sal
e proceeds go to pay the second lien in situations where there is no equity available, particularly for standalone home equity lines of credit. (B of A’s old policy required that 10% of the balance of the home equity loan be paid.)
Short sales help avoid repossessions
Fewer homes were repossessed in August than in July, but just as many Americans were behind on their mortgage payments, according to a report released today by RealtyTrac, an online marketer of foreclosed properties. The number of homes that lenders actually took back from borrowers fell 12.7%, leaving a total of 540,222 homes repossessed so far this year. Banks take big losses on repossessions, so they may leave delinquent borrowers in their homes under the assumption that they’ll maintain the properties, thereby saving banks the time and expense of upkeep and maintenance. Plus, there is always hope that some of these borrowers will catch up on their loans without assistance — a recent report from the Boston Federal Reserve found that 30% of borrowers who have missed two mortgage payments eventually become current.
Increases in short sales could also be reducing the repossession statistics, since a lot of banks are delaying the foreclosure process if they see any kind of chance of making a reasonable short sale. The reprieve in repossessions could be coming to an end, however, since a Fitch Ratings report forecast that of the $200 billion in option ARMs outstanding, $29 billion will reset to fully amortizing loans by year’s end, and another $67 billion will reset in 2010. The average payment increase will be 63%, or $1,053 a month — an impossible hurdle for many borrowers.
Homebuyer tax credit helping the housing market recover
According to the Federal Reserve’s Commentary on Current Economic Conditions, also known as the Beige Book, the first-time homebuyer tax credit is helping the housing market recover, especially in the low end of the market for much of the country. The Chicago, Richmond, Boston, and San Francisco Districts experienced an increase in sales over the past six weeks, while the Boston, Cleveland, Dallas, Kansas City, Richmond, and New York districts reported the first-time homebuyer tax incentive contributed to increased sales. Philadelphia reported steady activity. Most districts reported sales below the last year’s levels, but the Atlanta, New York, Cleveland, and Minneapolis districts experienced year-over-year gains in select markets. The St. Louis district reported residential home sales had not improved in the Midwest.
Jobless claims down
The Labor Department announced in its weekly report that the number of Americans filing for initial unemployment insurance fell last week, and ongoing claims also dropped. There were 550,000 initial jobless claims filed in the week ended Sept. 5, down 26,000 from a revised 576,000 the previous week, and less than the 560,000 new claims a consensus of economists surveyed by Briefing.com had forecast. The 4-week moving average of initial claims was 570,000 down 2,750 from the previous week’s revised average of 572,750. We’re still talking about declining at a slower pace, not outright job growth,” said Tim Quinlan, analyst at Wells Fargo (that’s something to keep in mind in this era of announcing that things are “getting better” because they’re getting worse more slowly). The government said 6,088,000 people filed continuing claims in the week ended Aug. 29, the most recent data available. That’s down 159,000 from the preceding week’s revised 6,247,000 claims. The
4-week moving average for ongoing claims fell by 37,750 to 6,182,500, down from the prior week’s revised average of 6,220,250
Chris McLaughlin is widely known as America’s top Real Estate Attorney and Investment Consultant.
Here’s why:
- As the top Florida short sale, foreclosure, and pre-foreclosure expert, he oversees more than 50 short sale & REO closings each month
- Recognized authority on real estate investing, and rapid flipping of distressed homes, and owning nearly 100 high-value, high-profit rental properties
- Owner and Supervising Broker of one of Florida’s largest Real Estate firms, running 5 different offices, supporting nearly 500 agents, uniquely positions him to help thousands of investors make money in the biggest market opportunity ever!
- The most sought-after speaker and consultant seminar leader for current trends and hot topics in Real Estate Investing, Entrepreneurship, and Wealth Building
- Founder and President of SmartPortfolio.com, Inc, an online financial newsletter company later sold to TheStreet.com (NASDAQ: TSCM)
- Obtained his MBA from Georgetown University
- Licensed attorney in good standing with the Florida Bar Association and graduate of Georgetown University Law Center
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National Foreclosure Filings Linger Near Record High
September 10th, 2009 Categories: Real Estate News
According to RealtyTrac;
Foreclosure filings eased slightly in August from a month earlier but remain significantly higher than year-ago levels despite lower levels of real estate-owned (REO) properties, according to foreclosure data provider RealtyTrac.
Total filings including default notices, scheduled auctions and bank repossessions 0.5% since July to 358,471 US properties in August.
The volume of filings came in 18% higher than the same month last year, with a foreclosure filing received on one in every 357 US housing units in August.
“The August report demonstrates that there is still an ample supply of properties filling the foreclosure pipeline even while the outflow of bank-owned REO properties onto the resale market is being more carefully regulated,” said James Saccacio, chief executive officer of RealtyTrac.
“After hitting a high for the year in July,” Saccacio added, “REOs dropped 13% in August, but we also saw a record high number of properties either entering default or being scheduled for a public foreclosure auction for the first time.”
Nevada posted the highest foreclosure rate with one in every 62 units receiving a filing in the month. Florida followed with one in every 140 units receiving a filing and California trailed in a close third with one in every 144 units receiving a filing.
Vermont claimed the lowest rate with only 33 units — one in every 9,437 — receiving a filing. North Dakota followed with filings received on 33 — one in every 9,411 — units. West Virginia rounded out the bottom three state foreclosure rates with 143 housing units — or one in every 6,173 — receiving a filing in the month.
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Chase Opens Sacramento Office For Walk-In Loan Modifications
September 3rd, 2009 Categories: Real Estate News
It has actually been some time ago (Last Spring) that troubled Sacramento homeowners with JP Morgan Chase loans have been taking their packages of loan modification paperwork to the second floor of the Washington Mutual Bank building right next to the Arden Fair Mall here in Sacramento.
Jim Wasserman of the Sacramento Bee just wrote great story on one of the nation’s first lender-owned walk-in centers for people struggling with their home loans.
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1.77 Million Homeowners Receive Mortgage Loan Workout Solutions
September 2nd, 2009 Categories: Real Estate News
The Hope Now alliance , announced today that its July data estimates that 1.77 million homeowners received workout solutions to avoid foreclosure since January 2009. The Hope Now alliance is a private sector allience of mortgage servicers investors, mortgage insurers and non-profit counselors.
Obama administration has set a goal of completing 500,000 loan modifications by November 1, 2009.
Foreclosure starts increased slightly from 251,340 in June to 283,682, in July, but completed foreclosure sales decreased from 92, 661 to 89,173. A troubling number is the amount of 60-day plus delinquencies. These 60 day delinquencies show a slight increase of 5.9% or 3.1 million homeowners in July.
The bright spot in the nationwide numbers is that in July, over 253,000 borrowers were helped through work out solutions of some kind, while foreclosure sales dropped.
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Sacramento MLS Data Included On New Redfin Release Of New iPhone App
September 1st, 2009 Categories: Real Estate News
Seattle-based Redfin jumped into the smartphone world Tuesday with the release of an iPhone app. The Redfin app features Google Maps and provides photos of properties listed in the Seattle area; San Francisco Bay Area; Sacramento area; Southern California; Boston area; Washington, D.C., area; Chicago area; and New York’s Westchester County and Long Island, excluding the Hamptons.
The application allows buyers to upload photos they take themselves on home tours to their Redfin.com account. The pictures and notes that automatically upload to their account on Redfin.com is waiting on their computer when they get back to their desk.
The free app, available for the iPhone and iPod Touch, allows users to view homes on the Multiple Listing Service. Users can search listings and filter for property type, number of bedrooms and bathrooms, and other criteria.
Seattle-based real estate Web site Zillow.com released its own free iPhone app in April. That app has been dowloaded about 700,000 times, the company said. The Zillow app includes “Zestimates” for any home in the country, regardless of whether it is on the MLS.
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