Archive for the 'Real Estate Trends' Category
February 5th, 2010 Categories: Default News, Loan Modification, Real Estate Trends, Sacramento Foreclosure News
Sacramento Foreclosure Specialist Reports:
Foreclosures Will Continue
I was Researching Sacramento area HAMP loan mod success rates this nmorning and came across this startling article in DSNews. It looks as if all the good news the Obama powered media has been pumping out is a little off center. Kinda Scary!
Home loan delinquency rates in the United States have now surpassed 10 percent, Lender Processing Services (LPS) reported this week.When you factor in homes already in the foreclosure process, the total rate of noncurrent mortgages sits at 13.3 percent, according to the data in the Florida-based company’s national loan-level database.This rate indicates that more than 7.2 million mortgage loans are now behind on payments, LPS explained, with another one million properties already taken back by banks and in REO status.LPS’ January 2010 Mortgage Monitor report, shows that within the population of loans that were current at the end of 2008, the percent of “new” serious delinquencies is 4.64 percent – higher than any other year analyzed. Of loans that were current as of December 31, 2008, by December 2009 there were 2.3 million new loans that were considered seriously delinquent.
Contact us today… Sacramento Short Sale Help can snswer your questions.
Seemingly less-risky, prime mortgages continue to loom large as the industry’s big, pink elephant. Prime loans, including agency, non-agency, and jumbo, have experienced deterioration at a worse pace than subprime, Federal Housing Administration (FHA) insured mortgages, and all loans as a whole, LPS said. The company’s analysis shows that within the prime loans category, those with unpaid principal balances between $417,000 and $600,000 have performed the worst. The Mortgage Monitor report also indicates that 2009 vintage loans are performing better than loans from any of the prior five years and have been steadily improving as pools of loans grow larger. This improvement is attributed to more restrictive underwriting guidelines, but that also means “liquidity is still not available where it is needed most,” LPS said.The company’s analysis shows that states with most noncurrent loans are: Florida, Nevada, Mississippi, Arizona, Georgia, California, Indiana, Michigan, Illinois, and Ohio.Those with the fewest include: North Dakota, South Dakota, Alaska, Wyoming, Montana, Nebraska, Vermont, Colorado, Oregon, and Washington.
More Questions? Sacramento Short Sale Help is here when you need us!
Tags: Sacramento+area+HAMP+loan+mod+success, National+Mortgage+Delinquency+Rate, foreclosure+process, noncurrent+mortgages
Authored by Jim Cronin |
January 19th, 2010 Categories: Real Estate Trends
Weak Underwriting Standards To Blame for Financial Crisis!
Ya don’t say… you mean not checking to see if people really make as much as they claim and giving loans to people with terrible credit isn’t a good idea?
By now it is common knowledge that the global financial meltdown, fuelled by the housing crash and now propelled by a smashed economy and unemployment was the direct result of a huge bubble in housing and real estate values that was caused by easy credit. Leave it to the U.S. government to spend untold millions of dollars to have several days of hearings two years after the sub-prime meltdown to sit around and talk about it…
I guess documenting testimony from experts will give the powers that be something to stand on as they re-build, over regulate and totally screw up our mortgage industry.
It will be interesting to see the changes ahead in the way mortgages are sold, under written and securitized. I’ll bet we don’t like the end result.
According to DSNews on the 14th:
Thursday was day two of the Financial Crisis Inquiry Commission hearings, aimed at uncovering the root causes of the worst economic recession since the Great Depression.
.
The witness list included financial regulators at both the federal and state level, who confessed that supervision and oversight was lacking and failed to head off the financial system’s near-meltdown.
FDIC Chairman Sheila Bair took top billing at the hearing. “Not only did market discipline fail to prevent the excesses of the last few years, but the regulatory system also failed in its responsibilities,” Bair said.
Bair told the commission that record profitability at Wall Street firms worked to shield them from regulatory second-guessing about how the money was coming in.
She also said that at the onset of the crisis, “It’s been estimated that half of all financial services were conducted in institutions that were not subject to prudential regulation and supervision. Products and practices that originated within the shadow banking system have proven particularly troublesome.”
Mary Shapiro, chairman of the Securities and Exchange Commission (SEC), told the inquiry committee that there were many interconnected causes of the financial crisis. At the top of her list was “the rise of mortgage securitization and its unintended facilitation of weaker underwriting standards by originators and excessive reliance on credit ratings by investors.”
Shapiro said her organization is currently evaluating investment firms’ practices related to subprime mortgage-backed securities and collateralized debt obligations in the real estate bubble.
“We are seeking to determine whether investors were provided accurate, relevant and necessary information, or misled in some manner,” Schapiro said.
According to state regulators’ testimony, it was the supervision at the federal level in Washington that obstructed their efforts to avert financial catastrophe, but they too echoed Shapiro’s sentiments that it all began with the mortgage industry.
Illinois Attorney General Lisa Madigan said the mortgage lending industry had “careened out of control” in the years preceding the financial crisis. “The housing bubble may have officially burst in late 2007, but those of us on the frontlines of consumer protection have seen predatory lending practices since the late 1990s,” Madigan said.
Phil Angelides, chairman of the congressionally-appointed commission and a former California treasurer said he will also be asking former Federal Reserve chairman Alan Greenspan, current Fed chairman Ben Bernanke, and former chairmen of the SEC, including Christopher Cox to testify before the panel.
“We’ll be asking them to come before us because they were the watchers, and I will assure you, we will be as probing of the regulators who were on the scene at the time as we will be of people in the private sector,” Angelides said.
Angelides’ committee is modeled after the Pecora Commission, which probed Wall Street’s 1929 crash and led to the creation of the SEC and other financial reforms of the time.
On Wednesday, Angelides and his fellow panel members heard testimony from the heads of four of the nation’s largest financial firms on their business practices leading up to the crisis and their miscalculations of the severity of the meltdown.
Courtesy DSNews
Tags: Financial+Crisis+Inquiry, financial+system+meltdown
Authored by |
January 16th, 2010 Categories: Real Estate Trends, Sacramento Real Estate
Sacramento Real Estate Market Reports
Its easy to understand why; in most cases, you cannot come close to buying a new home for what you could buy a re-sale for here in the Sacramento area.
I have said for a long time that our entry level price range must eventually “bounce” here in our Sacramento housing market in and get back in line with replacement costs. When the supply of repos and short sales slow, the prices must recover to be closer with new construction. I mean it’s almost ridiculous: In some neighborhoods, if someone gave you the lot, paid for the permits and gave you a truckload of lumber, you still couldn’t build a new house as cheap as you could just buy a re-sale home!
Michael Shaw of the Sac Bee wrote a great little piece the other day and I am including it here:
November new-home sales in Sacramento were 32 percent lower than the same month in 2008, according to figures released by California Building Industry Association on Wednesday.
A total of 141 new homes of all types were sold in the four-county region, compared with 181 sales the year before. The average price paid for those homes, however, inched 2.8 percent higher to $329,300.
The association reports home sales figures compiled by analyst Hanley Wood Market Intelligence, which tracks new home communities with more than 10 units.
In the state, the November sales rate at California new-home communities was 4 percent lower than 2008
Authored by |
January 13th, 2010 Categories: Default News, Foreclosure News, Real Estate Trends, Shortsales
Foreclosure Rates May Soar
Foreclosure Notice in Sacramento
Courtesy Chris Mcglaughlin
One in every 7.5 homeowners either fell into delinquency or foreclosure as of November 30, 2009, according to the December mortgage monitor report from Lender Processing Services. The total number of delinquencies reached a record high of 9.97%, a 5.46% increase from the previous month and a 21.29% increase from November 2008. Loans falling into more severe delinquent categories reached 5.01% through November, compared to 1.52% of loans improved toward a current status. That’s compared to November’s mortgage monitor report, when 4.02% of current mortgages through December 2008 fell into delinquency by October 2009. More than 4% of the loans that were current in December 2008, fell behind by 60 days or more, including foreclosure, by the end of November 2009.
Click here for Sacramento short sale help.
It’s the highest rate for that part of the year since LPS began reporting the data. The foreclosure rate in November reached 3.19%, a 1.46% increase from the previous month and an 81.41% increase from November 2008. This doesn’t include the amount of homes falling into the shadow inventory of foreclosure. Some data providers like First American CoreLogic speculate that number could be as high as 1.7 million as the roadblocks of the government incentive programs and moratoriums clog the foreclosure pipeline. “Foreclosure starts continued to decline as a result of loss mitigation efforts like the federal government’s Home Affordable Modification Program (HAMP) and elevated delinquent loan volumes,” according to the report. “The reduction in foreclosure starts, combined with the steady increase in the number of seriously delinquent loans, has resulted in an ever-growing ‘shadow’ inventory of troubled properties.” The states with the most non-current loans were Florida, Nevada and Mississippi. Those with the fewest were North Dakota, South Dakota and Alaska.
Authored by |
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
Authored by |
November 20th, 2009 Categories: Graphs and Charts, Mortgage and Loans, Pre Foreclosures, Real Estate News, Real Estate Trends
FHA Foreclosures Surge
Did you read that?
FHA foreclosures? Holy cow; that means nearly one in five FHA loans are more than 30 days behind! Most of those FHA borrowers would have bought since the mortgage crash of 2007, since FHA loans were almost extinct before that…
The Mortgage Bankers Association also found recently that 14 percent of all homeowners with any type of mortgage were either behind on payments or in foreclosure at the end of September. It was a record-high figure for the ninth straight quarter.
As they say; even a dead cat will bounce– The media had it all wrong this summer; calling for a bottom and raising hopes of a housing turn-around… There are still many, many more homes coming through the fore closure pipeline…
Loan modification starts are way up, nearly 700,000 homeowners nationally (about 20% of those who qualify) have started the modification process. However, over 75% of those will default again, recent history shows us. And of the 25% that don’t default, how many of them will re-consider when they finally realize that only 10% of loan modifications have any type of principle reduction… it may take 20 years in some areas to get back to ‘ground zero’ or where folks can sell without going short or bringing money to the closing table.
I am really not a pessimistic person, in fact I am too optimistic usually and it has cost me a lot of money and pain by seeing through “rose colored glasses” in the past. I just really see too many signs of more problems to come and think we are a long way from the bottom
Authored by |
November 18th, 2009 Categories: Default News, Graphs and Charts, National Real Estate Trends, Pre Foreclosures, Real Estate Trends
According to Centralvalleybusinesstimes.com:
Sacramento:
Foreclosure rates in Sacramento-Arden-Arcade-Roseville-Woodland metropolitan area increased for the month of September over the same period last year, according to First American CoreLogic.
The rate of foreclosures among outstanding mortgage loans was 3.61 percent for the month of September, an increase of 1.58 percentage points compared to September 2008 when the rate was 2.03 percent.
Foreclosure activity in Sacramento-Arden-Arcade-Roseville-Woodland was higher than the national foreclosure rate, which was 2.93 percent for September 2009, representing a 0.68 percentage point difference.
Also in Sacramento-Arden-Arcade-Roseville-Woodland, the mortgage delinquency rate has increased. According to First American CoreLogic data for September 2009, 10.29 percent of mortgage loans were 90 days or more delinquent compared to 6.35 percent for the same period last year, representing an increase of 3.94 percentage points.
Courtesy of Real Estate News & Commentary by Chris McLaughlin, November 17, 2009
3Q09 – Delinquencies up, rate slows
According to credit reporting agency TransUnion, delinquent mortgages were up 58% from 3.96% a year ago, and as of Sept. 30, 6.25% of U.S. mortgage loans were 60 or more days past due. Two months delinquency is considered a first step toward foreclosure because it’s hard for homeowners to catch up with payments at that point. The rate of delinquency is slowing, however. The rate was up 7.6% from the second quarter — a much smaller jump than the 11.3% rise in the second quarter and a 14% rise seen in the quarter before that. F.J. Guarrera, vice president of TransUnion’s financial services division, says that while the slower rate is encouraging, the co9ntinual increase shows there are still a lot of problematic mortgages out there.
Mortgage delinquencies remain highest in the four states where the crisis has hit the worst: in Nevada, the rate reached 14.5%, up from 7.7% a year ago; in Florida, the rate was 13.3%, up from 7.8% last year; in Arizona, the rate hit 10.4%, up from 5.5% in 2008; and in California, the rate jumped to 10.2%, from 5.8% last year. Two things have to get better before mortgage delinquency rates start reversing themselves: home values and unemployment. “Until we see improvement in both of those areas, it’s possible that it will take longer for delinquency to improve,” Guarrera said.
Authored by |
November 17th, 2009 Categories: Default News, Real Estate Trends
California Foreclosures are up but still being postponed
According to data released by ForeclosureRadar.com, foreclosures in California increased 22.24% from September to October. Last month’s foreclosures increased 20.95% from October 2008, which were 42.56% below California’s peak month of July 2008. But since then, the inventory of real estate owned (REO) properties has grown 131.36% in California. “While we continue to see a steady stream of properties entering foreclosure, relatively few are completing the process and being sold at auction despite the increase this month,” said Foreclosureradar.com CEO Sean O’Toole. “The bigger picture is that more and more homeowners are finding themselves upside down in foreclosure limbo,” O’Toole added, “some hoping for a loan modification or short sale, while others are just waiting for a knock on the door.” The number of foreclosures initiated in October remained level with September levels but this is due in large part to recent legislation enacted in California
Courtesy Real Estate News & Commentary by Chris McLaughlin, November 16, 2009
Authored by |
November 13th, 2009 Categories: Real Estate News, Real Estate Trends, Sacramento Foreclosures, Sacramento Real Estate, Sacramento Real Estate Trends
Sacramento real estate market called Less Favorable in think tank report…
Urban Land Institute, a Washington D.C. think tank reported yesterday in its “Emerging Trends in Real Estate 2010” report that there may be problems ahead for Sacramento real estate market.
Jonathan Miller, a consultant for PricewaterhouseCoopers who wrote the report,said ”On balance here, I guess it’s a sober year for 2010 and maybe not much better in 2011,” in a telephone news conference from the convention. “It all depends on how the economy behaves and if the consumer comes back. We don’t expect much of a resurgence.”
In the report, Sacramento was described as less favorable because of “concerns about government gridlock, rising taxes and an inhospitable business climate”.
Authored by |
November 9th, 2009 Categories: Pre Foreclosures, Real Estate News, Real Estate Trends, Sacramento Foreclosures
The shadow inventory that people have been talking about for so long… I have lost buyers (who just got so lethergic and wishy-washy and finally decided waiting was better than buying) because of the fear that somehow a spigot of homes was going to be turned on and flood the market, driving real estate prices even lower here in the Sacramento area…
Now we are finding that maybe it has been a misnomer all along….
According to Sean O’Toole, and Foreclosuretruth; the Foreclosureradar.com blog: There is currently no shadow inventory of bank-owned (REO) properties. What’s more, a surge in REO properties (the Tsunami) is not likely anytime soon.
If this sounds familiar, it’s because I’ve said it before, here and here and other places. However, it still seems to be news (see the recent WSJ article) and despite the fact that the most recent CA Foreclosure Report from ForeclosureRadar.com runs the numbers, some still insist the shadow is there.
First, let’s be clear about what shadow inventory is. These are homes that the bank has already foreclosed on, but which, for no apparent reason, aren’t listed. The implication is that banks are holding REO properties back from the market to restrict supply and prop up prices. This actually seemed like a distinct possibility a year ago when the banks were clearly holding more inventory than they were listing. But that is no longer the case. In the past year, they have resold far more than they’ve taken back, eliminating any possibility that a shadow remains.
Some observers, who earlier this year warned that this shadow inventory would deluge the market with REO listings, have now redefined shadow inventory to include properties that should be foreclosed on. They continue with misguided warnings of a deluge of REO listings any moment now.
Not so. These properties are not lurking in the shadows at all. We know exactly which properties are in trouble and where they are in the process. Using ForeclosureRadar.com you can easily see every potential REO listing, from Notice of Default to Notice of Trustee Sale, for the next six to nine months. In addition, even if banks reversed course and started foreclosing aggressively today, it would be months before we saw those listings as it takes time to evict the homeowner, clean up and list the property.
What’s more, they’re not going anywhere. These properties aren’t grinding through the pipeline to foreclosure and into the shadow inventory. They’re not moving at all because we as a society lack the political will to foreclose. Because the national focus is targeted on keeping homeowners in their homes, the drain is bigger than the spigot – REO properties are selling faster than distressed properties are being foreclosed on.
As a result, the pendulum has swung to the other side. Instead of a glut of properties hitting the market, as so many have warned, we currently don’t have enough inventory for those who want to buy homes, and homeowners are still in trouble because the so-called solutions (foreclosure moratoriums, loan modification, refinancing) don’t fix the real problem, which is negative equity.
No more conspiracy theories. We need to abandon the obsession with shadow inventory, which distracts us from the national discussion we should be having. With the current lack of inventory, its time to force banks to clean up their balance sheets by dealing head-on with the trillions in negative equity that remains, either though loan modifications that reduce principal balances to near current value, short sale, or, if necessary foreclosure. These are the only solutions that deal with the core problem of negative equity. It’s time for “extend and pretend” to end.
About Sean O’Toole
Sean is the founder of ForeclosureRadar.com, the only company that tracks every foreclosure in California with daily updates on all foreclosure auctions. Prior to ForeclosureRadar Sean spent 15 years building and launching software companies before entering the foreclosure business in 2002 where he has successfully bought and sold more than 150 foreclosure properties.
Authored by |
« Previous Entries
