Archive for December, 2009
Folsom Foreclosure, Granite Bay Foreclosure and Eldorado Hills Foreclosure advice.
December 19th, 2009 Categories: Default News, Pre Foreclosures, Shortsales
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1.7 Million Additional Bank Owned Homes and Homes Facing Imminent Foreclosure
December 18th, 2009 Categories: Default News, Mortgage and Loans, National Real Estate Trends, Pre Foreclosures
First American Puts ‘Shadow Inventory’ at 1.7 Million
From DSNewsThere were 1.7 million REOs and homes facing imminent foreclosure that had not yet hit the market at the end of the third quarter, according to data released Thursday by First American CoreLogic.
The company says that at the current sales pace, it would take 3.3 months to get rid of this looming “shadow inventory.” By comparison, First American CoreLogic says shadow inventory a year ago was 1.1 million, representing a 2.4 month backlog.
Shadow inventory is not included in official measures of unsold inventory. According to First American CoreLogic’s
analysis, the visible supply of unsold inventory – accounting for new and existing homes that are currently on the market – was 3.8 million units in at the end of September, down from 4.7 million a year earlier. The visible months’ supply fell to 7.8 months in September 2009, down from 10.1 months a year earlier.
Together, total inventory of unseen and marketed properties comes to 5.5 million units as of September 2009, an 11.1 months’ supply of homes. That figure is down from a total inventory of 5.7 million a year ago, which equates to a 12.7 months backlog.
First American CoreLogic says this indicates that while the visible months’ supply has decreased and is beginning to approach more normal levels, adding in the pending supply reveals there is still quite a bit of inventory that will impact the housing market for the next few years.
Just how big of an impact the shadow inventory makes will depend on whether it hits the market in large fell swoops or makes its way out of the darkness in steady, manageable streams. According to a new report from Radar Logic, the looming distressed property supply will enter the housing market at a controlled rate that can be absorbed by existing demand without drastically reducing prices
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Sacramento Area Foreclosure News
December 11th, 2009 Categories: Default News, Mortgage and Loans, Sacramento Economy, Sacramento Foreclosures, Sacramento Real Estate
The Foreclosure market here in Sacramento is currently drying up… very few homes coming on the market as REO or bank-owned, fewer foreclosure filings, Multiple offers for the homes that are priced right, and an overall sense of “wait and see” seems to be on most potential buyers’ minds right now.
The banks have been rescheduling foreclosure sales or Trustee Sales at the county courthouse for so long, that now the foreclosure departments just haven’t been scheduling them in the first place– kinda makes sense, if all your going to do is reschedule it and put it off anyway; why spend the time and money on scheduling it in the first place?
If the number of buyers at the foreclosure sale (trustee sale) is any indication– there must be many investors who believe the prices are not going much lower, or who think there may be some up-tick in the market sometime soon: the number of buyers has tripled or quadrupled in the last several months and continues to grow, according to friends who attend the sales down at 720 9th St. downtown Sacramento (address for the Sacramento County Municipal and Superior Courts). they say tat over 90% of foreclosure sales are postponed still, or re-scheduled, usually for only 30 days at a time…
In other Sacramento area real estate news: According to OBSNews
An amendment co-authored by Sacramento Congresswoman Doris Matsui (D–California) has been based by the House of Representatives and was added to the Wall Street Reform and Consumer Protection Act (H.R. 4173) yesterday. The act requires mortgage servicers or lenders who are participating in the Making Home Affordable Program (HAMP) to publicly report their progress in helping responsible homeowners stay in their homes. The amendment was introduced by Congresswoman Matsui with Rep. Betty Sutton (D–Ohio) and Rep. Kathy Castor (D–Florida), and debated on the House floor. Passage of H.R. 4173 is expected today.
“Too many families in my district of Sacramento have faced foreclosure on their homes as a direct result of the economic meltdown,” stated Matsui. “There is another uptick in foreclosures expected that could affect as many as 4.5 million homeowners over the next two years. The Making Home Affordable Program holds the potential to greatly reduce these figures, and my amendment will ensure accountability on the mortgage industry. Transparency will incentivize the mortgage industry to help responsible homeowners stay in their homes.”
Some information courtesy (OBSNews.com)
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FDIC Considers Principal Writedowns for Failed Banks’ Loans
December 11th, 2009 Categories: Real Estate News
DSNews reports:
Lenders that step in to pick up the pieces of FDIC-insured institutions that go under may soon be required to write down the principal balances on the mortgages they acquire.
This sure makes sense! Think about it, if the new bank taking over a failed institution can write down the note and immediately start receiving income… payments based on today’s value… as long as the homeowner is able to make them – the new bank would save a ton of money on closing costs, inventory holding costs (insurance, market loss, vandalism etc) why weren’t they doing that all along? they already got the assets for pennies on the dollar with guarantees from the Government on any loss!
But as reported, according to Bloomberg News, FDIC Chairman Shelia Bair is considering amending the agency’s loss-share agreements to include language that would allow the outstanding mortgage principal to be reduced for homeowners who’ve been hit by falling home prices and are underwater.
That seems so obvious!– why hasn’t that part of the deal anyway!?!
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Struggling Homeowners: 4% Get Mortgage Help
December 11th, 2009 Categories: Default News, Loan Modification, Real Estate News, Real Estate Trends, Shortsales
This just in from Chris McLaughin:
Treasury officials, in the first comprehensive tally of permanent modifications made, say that loan servicers have converted 31,382 people from trial adjustments to long-term assistance as of Nov. 30, but 30,650 people in trial modifications have been denied. That means that only about 4% of troubled borrowers have received long-term help under the Obama administration’s foreclosure prevention program. A nearly equal number of trial modifications have been denied permanent assistance, the report showed. The reasons include not making monthly payments on time, not submitting all the necessary paperwork and not qualifying for reasons such as insufficient income.
Homeowners claim that banks keep losing paperwork, but banks claim they often don’t get it in the first place. Around 375,000 people should be eligible to receive long-term relief by year’s end, but only one-third of homeowners who have made at least three trial payments have submitted all the needed forms, Treasury officials say, and some 20% have not submitted any paperwork at all. Banks and government agencies have hired outside companies to knock on borrowers’ doors to assist them with completing the paperwork. None of this addresses the real problems, of course: a lot of people are underwater and don’t see the point of making payments, and quite a few know they won’t qualify once their real income comes to light.
Along the same lines is This Article From DSNews:
Treasury released the highly-anticipated progress report on the government’s foreclosure prevention program Thursday afternoon – which for the first time includes details on the number of trial modifications each servicer has converted to permanent status – and as lenders warned earlier this week, the results were disappointing.
Of the more than 728,000 Home Affordable Modification Program (HAMP) trials under way across the country, 375,000 are scheduled to convert to a permanent modification by the end of the year, and only 31,382 have made the transition.
The Treasury Department said in a statement to the press, “According to servicer reports, most borrowers in modifications are meeting their responsibilities to make their payments. Servicers need to do their part to help borrowers complete the process and get to the finish line.”
A number of servicers have told DS News that the problem lies in the paperwork. They say an unsettling number of borrowers just don’t submit the required documentation for conversion once they complete the trial phase, or file incomplete or inaccurate information. Participating servicers say they’re ramping up outreach efforts to ensure homeowners who’ve successfully completed their trial phase get the necessary documents in for permanent assistance.
Molly Sheehan, SVP of housing policy for JPMorgan Chase’s home lending division told a congressional panel earlier this week that the focus of her group’s “immediate attention is finding ways to assist the 51 borrowers out of 100 that are missing some or all of the documentation.”
But on the other end of the process, homeowners and their advocates say it’s the servicers and their staff that cause the delays, and in some cases, even lose the paperwork.
Julia Gordon, senior policy counsel for the Center for Responsible Lending, testified to lawmakers Tuesday that servicers still lack the capacity to effectively administer a program of HAMP’s size and scope. It’s been nine months since HAMP began, and Gordon said, “Homeowners still have terrible trouble reaching their servicers, and when they do, they often encounter staff who are ignorant of the HAMP program, they sit through attempts to steer them into other products, and they are unable to get any firm decisions made in a timely manner.”
Timra Valentyne, a loan officer with United Homestead tells DSNews.com that she’s encountered similar problems helping homeowners work with their servicers on HAMP modifications. On numerous occasions, Valentyne said, the borrowers’ documentation gets lost in the shuffle or never gets tagged for the appropriate account.
She cited a particular case with Chase, in which the homeowner had successfully made his restructured payments through five months of a HAMP trial, but was denied a permanent modification because he cashed in a certificate of deposit (CD) to help cover the new payments and the bank ruled his hardship was only temporary. When Valentyne followed up with Chase, the bank representative told her the homeowner was never on the HAMP plan, although the homeowner had a rejection letter stating that he’d been denied for the “Making Home Affordable” modification program – a clear discrepancy in records and paperwork.
Gordon advocates requiring HAMP-participating lenders who are producing insufficient results to use specialty servicers working for the government to handle certain accounts. These companies specialize in intensive, “high-touch” approaches to working with homeowners in trouble, she says, and are much more effective at reaching borrowers than a mainstream servicer.
One specialty servicer says it’s exactly this type of high-touch method that has led to its HAMP success. Ocwen Financial has converted an industry-leading 74 percent of its trial mortgage modifications to permanent status. The Treasury’s latest HAMP report shows that Ocwen accounts for a disproportionately high 13.5 percent of all permanent modifications completed to date even though it services only 2 percent of the estimated HAMP-eligible loans.
Ocwen says its partnerships with homeowner advocacy groups have been indispensible in helping the company keep borrowers active in the process. Ocwen collaborates with a range of independent housing advocacy and grassroots organizations to reach out to homeowners and to help them gather the required documents for a modification.
Based on the December HAMP report GMAC Mortgage is having the most success with permanent modifications in terms of sheer numbers. GMAC has successfully made the conversion for 7,111 homeowners. The company has extended trials to 39 percent of its eligible borrowers.
Bank of America had the worst showing of all the largest lenders. It has finalized a mere 98 permanent modifications, and has extended trial offers to only 15 percent of its more than a million eligible homeowners.
The administration recently announced a new push to compel servicers to complete more permanent modifications, threatening to impose fines, withhold cash incentives, and publicly name those companies that fail to perform up to par
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Luxury Short Sale Homes Are on the Horizon!
December 4th, 2009 Categories: Default News, Loan Modification, Mortgage and Loans, National Real Estate Trends, Real Estate News, Shortsales
…The Coming ARM Storm
First it was the sub-prime market and now experts agree, adjustable rate mortgages combined with rising unemployment and falling property values could create another economic storm capable of ravaging the weak economic recovery. Here’s a quick breakdown of the ARM Storm-Tracker for those savvy short sale investors to beginning their planning:
Resetting Rates: Current interest rates are at or near historic lows with 30 year fixed mortgages below 5 percent while ARM’s are likely to readjust and drive the cost of monthly mortgage payments to double their former payments. Unfortunately, many current ARM holders do not qualify for refinancing due to changes in employment status, high loan to value ratios and increased debt to income percentages.
Evaporating Equity: Not only did millions of Americans take out Adjustable rate mortgages but they built additions and over-improved their homes based upon loans. As home values fell, so did the equity reserves required to refinance their ARM mortgages. Whether it was a first mortgage with minimal down payment or a second (and even third) mortgage, lower property values have all but erased excess equity from a large number of buyers.
Cheaper to Walk: Many homeowners are finding it less expensive to simply walk away from rapidly rising mortgage, rent for awhile then repurchase. According to industry experts, a significant number of homeowners are capable of making the mortgage payment but simply don’t desire to do so given the cost of purchasing the same home after foreclosure. Current homeowners are eligible for FHA loans in as few as three years after default – creating an inverse incentive to continuing paying on a property worth tens (or even hundreds) of thousands dollars less than the existing mortgage.
Renting an Increased Option: Throughout the nation lenders are getting creative in order to reduce the inflow of defaulting properties on their portfolio; one of the more popular options among existing homeowners is the ability to rent your current property for a specified period of time.
ReFi with an ARM? It’s true, the FHA has a 3.87 five year adjustable rate mortgage option designed to help keep payments affordable. Unfortunately, it may simply delay the pain until interest rates continue to rise later. However, with a 2 percent cap on each adjustment/rate increase, it could conceivably buy time for those in unusual short term situations such as temporary illness, job loss of other large expenses. It also has the benefit of “buying time” for the banks and lenders who are in no hurry to acquire even more properties given the current backlog of non-performing properties in their portfolio.
What is a savvy short sale investor to do? Get ready for the coming wave of ARM properties to hit the market. Be sure your credit is in place and position yourself to solve problems for both homeowners and lenders in need of a new start.
See you at the top!
Another article courtesy Chris McLaughlin
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Foreclosure snapshot
December 4th, 2009 Categories: National Real Estate Trends, Pre Foreclosures, Real Estate News
- More than 1.5 million homes have been lost to foreclosure, according to the Center for Responsible Lending.
- Goldman Sachs is projecting 13 million foreclosures of all types during the next five years.
- One in 10 homeowners are late with mortgage payments, according to the Mortgage Bankers Association.
- Owners owe more than the home is worth in nearly one in five homes, according to First American Core Logic.
More Scary Headllines:
• Banks braced for record debt defaults in the New Year
• Friday’s Jobs Report Will Set December Treasurys Tone
• Treasury to meet with mortgage servicers Monday
• Dubai Debt Woes Deliver Commodities Wake-Up Call
Around the world people are wondering where to park their hard earned cash during the coming year. So, what does the new year have in store for short sale investors? It depends who you ask…
According to the National Association of Realtors, prices are expected to rise 4 percent while home sales will rise by 700,000 to 5.7 million. Foreclosures will top out in the first six months of 2010 and the “fear factor” will fade to create a sunnier outlook for real estate by the end of the year.
On the other hand, less than optimistic projects are expected globally as the shock waves of recent Dubai debt hits the market creating a mini-panic among financials and bankers around the world. Loans to non financial business owners continue to decline and debt deflation combined with credit contraction continues well beyond 2010 according to the popular website “Seeking Alpha”.
Fox News reports commercial real estate is expected to continue to decline until later in 2010 at which point there is hope for optimism as the economy improves. Of course, should unemployment continue to rise that could be stalled for some time however, commercial property values are beginning to steady in many areas of the nation.
REIT’s are expecting a promising year and a record number of trusts are seeing large gains. In fact, they are considered downright affordable in some cases while a rash of new REIT’s have recently hit the market as desperate stockholders seek investments backed by tangible assets.
Interest rates will remain low according to the majority of experts; the general consensus reflects the risk of rising interest rates to negatively impact real estate before a full recovery can get underway. With so much capital sitting on the sidelines, there is little incentive to raise rates prematurely.
Inflation will remain low throughout 2010 and perhaps through 2012 however, tightening credit will make it increasingly difficult to finance properties despite low rates and bargain prices.
Additionally, investors expect the Fed to stop purchasing mortgage bonds creating additional stressors on the market. Finally, new housing starts are expected to rise but continue to lag behind former highs for several years to come.
Courtesy Chris McLaughlin
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Bank Of America As Second Lienholder… Is $3,000.00 Enough?
December 3rd, 2009 Categories: Default News, Loan Modification, Mortgage and Loans, Real Estate News, Shortsales
There are so many home retention/foreclosure avoidance programs with acronyms now, it’s hared to keep them all strait…
There’s the MHA program , the HAMP program, the HFHA program, the NPV test, the HARP program, the HAFA program and now, the newest acronym and finally one that might make some difference for homeowners who need to sell; the HAFFAP program or Home Affordable Foreclosure Alternatives Program.
An article from DSNews included thisbreakdown of the program:
To entice servicers to accept a sale on defaulted properties for less than the outstanding mortgage balance, Treasury is offering incentive payments of $1,000 per completed short sale. Servicers will also receive $1,000 for each deed-in-lieu of foreclosure.
Subordinate lien holders will be paid to release their claims on defaulted properties, up to $3,000 of the short sale proceeds as long as the primary investor agrees to share the earnings, and for this concession, the investor will also receive up to $1,000 from the Treasury. For those second lien holders who want more than the $3,000 cap to relinquish their stakes, the Treasury said they can pursue a short sale outside of the federal program.
Homeowners who agree to a short sale or deed-in-lieu of foreclosure will get up to $1,500 to help with relocation, and must be “fully released” from any future liability, according to the guidelines.
The Home Affordable Foreclosure Alternatives Program (HAFA), as it is being called by the Treasury, was initially announced back in May, but was delayed because of concerns over legalities involved in the process and the rights of second lien holders to hold claim over the property. DSNews.com reported in October that the administration was readying guidelines for the program, and yesterday, they arrived.
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New Government Bounty On Short Sales Pay Default Sellers $1500.00
December 3rd, 2009 Categories: Default News, Real Estate News, Shortsales
Government attempts to make short sales easier
The Obama administration laid out final guidelines on Monday that should make it easier for some financially troubled borrowers to sell their homes. The guidelines are designed to encourage the use of short sales, and it also makes it easier for borrowers to voluntarily transfer ownership of properties through a “deed in lieu of foreclosure.” Under the plan, borrowers will receive $1,500 from the government if they sell their homes for less than the amount of their mortgages. Mortgage-servicing companies will also receive $1,000 for each completed short sale. The program is open to borrowers who may be eligible for the government’s loan-modification program but don’t end up qualifying, or are delinquent on their modification, or request a short sale or deed-in-lieu transaction. The short-sale program is the latest addition to the Obama administration’s $75 billion foreclosure-prevention plan, which includes incentives for mortgage companies and investors to rework troubled
loans. The government first said in May that it would include short sales in the program, but it has taken months to finalize the details. Under the new guidelines, second-mortgage holders can receive up to $3,000 of the sales proceeds in exchange for releasing their liens. Investors who hold the first mortgages, meanwhile, can collect up to $1,000 from the government for allowing such payments. Borrowers who complete a short sale under the program must be “fully released” from future liability for the debt, according to the guidelines.
courtesy Chris McLaughlin
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