Publisher comments:
When people finally realize that loan modifications do not work, and is a carrot held in front of their noses to get as much money as possible from them, we will see an escalation in foreclosures worse than today. - Charl
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The loan mod picture is still very busy, but borrowers in South Florida continue to drop out of the Obama administration’s Making Home Affordable program.
South Florida’s metro areas had more loan modifications than any other cities in the nation in June – which is the same as in May. Statewide, Florida’s number of troubled loans getting new terms was second only to California, also unchanged.
But what’s new: Fewer South Florida borrowers had a permanent loan modification than in May.
Nationwide, the number of borrowers getting permanent loan mods is higher than the previous month. But over the long haul, the Associated Press points out, 530,000 borrowers have dropped out of the program since it began in March 2009 with 1.3 million homeowners.
The Making Home Affordable permanent modifications “are on pace and sustainable for the homeowner, as more than 50,000 trial agreements graduated to permanent in June and default rates remain low,” the Treasury’s statement says.
According to the Treasury’s report released today:
The Miami-Fort-Lauderdale-Pompano-Beach metro area had 35,621 trial and permanent loan modifications underway in June, down from almost 38,500 in May.
Orlando-Kissimmee had 15,130, down from more than 16,000 in May.
Add those two metro areas together and they account for 6.7 percent of all loan modification activity nationwide. That proportion is greater than Los Angeles, with 6.5 percent, New York, with 6 percent and Chicago, with 5.1 percent of all loan modifications nationwide under the Obama administration’s program.
The two also accounted for more than half of all loan modifications in Florida.
Only California was busier when it came to trouble mortgage modifications. In California, there were 168,155 loan modifications underway last month, compared to 92,754 in Florida.
Among lenders, Bank of America has produced the largest number of permanent loan modifications, 72,232 nationwide. JP Morgan Chase reported 54,722 loan modifications.
Nationwide, the Treasury said there were 389,198 permanent modifications were reported in June, up from 340,459 in May.
Why aren't more people getting a permanent loan modification in South Florida? I asked that question in a recent column and you can read the answers I found here.
Click here for more
Wednesday, July 21, 2010
Wednesday, July 14, 2010
Online auctions make repos faster for banks
As I expected, after the expiration of the tax credit, and with the failures in loan modifications and other government programs, banks would continue to take back houses. As mentioned below, the online auctions makes it easier, as howeowners generally don't attend like they sometimes do in court, and contest the sales. The process works quite well, I have been online at all three counties, they use the same system.
Whatever small price bumps we saw, it will probably go down again as these houses come to market. Short sales is still a viable, strong alternative, and the banks have ramped up systems and training, it is getting better in the loss mitigation departments.
Also see the following article:
40 percent of Florida homes sales are foreclosures
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Lenders are repossessing homes at a faster clip in 2010 and are on pace to take back nearly 50,000 properties in South Florida this year, according to a report from CondoVultures.com.
Banks repossessed an average of 4,000 South Florida properties a month in the first half of 2010, an 83 percent increase from a year ago. Miami-Dade County had a 125 percent increase, while repossessions rose by 112 percent in Palm Beach County and 42 percent in Broward.
If repossessions approach 50,000 for the year, it would easily surpass the 30,400 homes that lenders took back in 2009.
Peter Zalewski, a principal with the Bal Harbour-based consulting firm, said in a statement the number of bank repossessions in 2010 is higher than at any time in at least 20 years.
He points out that the bank-owned homes will be coming back on the market at a discount. That almost certainly will drive prices down.
Foreclosure auctions were moved online this year in South Florida. Zalewski said a reason for the increase in repossessions is that the Internet auctions allow courts to clear the backlog of cases more quickly.
Whatever small price bumps we saw, it will probably go down again as these houses come to market. Short sales is still a viable, strong alternative, and the banks have ramped up systems and training, it is getting better in the loss mitigation departments.
Also see the following article:
40 percent of Florida homes sales are foreclosures
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Lenders are repossessing homes at a faster clip in 2010 and are on pace to take back nearly 50,000 properties in South Florida this year, according to a report from CondoVultures.com.
Banks repossessed an average of 4,000 South Florida properties a month in the first half of 2010, an 83 percent increase from a year ago. Miami-Dade County had a 125 percent increase, while repossessions rose by 112 percent in Palm Beach County and 42 percent in Broward.
If repossessions approach 50,000 for the year, it would easily surpass the 30,400 homes that lenders took back in 2009.
Peter Zalewski, a principal with the Bal Harbour-based consulting firm, said in a statement the number of bank repossessions in 2010 is higher than at any time in at least 20 years.
He points out that the bank-owned homes will be coming back on the market at a discount. That almost certainly will drive prices down.
Foreclosure auctions were moved online this year in South Florida. Zalewski said a reason for the increase in repossessions is that the Internet auctions allow courts to clear the backlog of cases more quickly.
Tuesday, July 13, 2010
Mansion Foreclosures Surge
The taxes are coming, the taxes are coming, that is why we see this:
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For those who think all is well again in the world of Richistan, consider the following statistic.
The percentage of $1 million-plus loans more than 90 days delinquent rose to 13.3% in February, half again as high as the 8.6% overall delinquency rate, according to First American CoreLogic, which tracks U.S. real estate and mortgages.
The statistic, from this Reuters article, points to a sobering reality amid the happy talk of newly minted millionaires. Many affluent and wealthy can’t keep up with their mortgage payments.
Last month, there were 205 foreclosure filings for mortgages of $5 million or more, the third straight month such filings rose, according to RealtyTrac. The 205 foreclosures totaled $813 million.
“Early on in the crash, the weakness was in the lower-price tiers. In the past year, most of the biggest price declines have been in the upper tiers,” Mark Zandi, chief economist of Moody’s Analytics, told Reuters. “That suggests high-end households are coming under increasing pressure.”
Lenders to the wealthy are taking a hit. Bank of America’s U.S. Trust unit reported a nearly sixfold increase in its loan-loss provision in the first quarter, to $184 million from $31 million a year earlier. Net charge-offs at Northern Trust rose to $31 million from $2.7 million a year earlier, though they were down from the 2009 fourth quarter, according to Reuters.
While some say the weakness at the top is part of every economic cycle, real-estate experts say the mansion market has rarely if ever been hit so hard. “This recession is unlike prior recessions. It hit the high end just as much as the low end,” said Sam Khater, senior economist at CoreLogic.
Of course, the foreclosures could be the result of over-leveraged speculators and developers as opposed to once-wealthy families. Or it could be the result of a poor stock market in 2010, along with higher taxes.
Why do you think the mansion market is getting hit so hard even as the finances of the wealthy are reported to be improving?
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For those who think all is well again in the world of Richistan, consider the following statistic.
The percentage of $1 million-plus loans more than 90 days delinquent rose to 13.3% in February, half again as high as the 8.6% overall delinquency rate, according to First American CoreLogic, which tracks U.S. real estate and mortgages.
The statistic, from this Reuters article, points to a sobering reality amid the happy talk of newly minted millionaires. Many affluent and wealthy can’t keep up with their mortgage payments.
Last month, there were 205 foreclosure filings for mortgages of $5 million or more, the third straight month such filings rose, according to RealtyTrac. The 205 foreclosures totaled $813 million.
“Early on in the crash, the weakness was in the lower-price tiers. In the past year, most of the biggest price declines have been in the upper tiers,” Mark Zandi, chief economist of Moody’s Analytics, told Reuters. “That suggests high-end households are coming under increasing pressure.”
Lenders to the wealthy are taking a hit. Bank of America’s U.S. Trust unit reported a nearly sixfold increase in its loan-loss provision in the first quarter, to $184 million from $31 million a year earlier. Net charge-offs at Northern Trust rose to $31 million from $2.7 million a year earlier, though they were down from the 2009 fourth quarter, according to Reuters.
While some say the weakness at the top is part of every economic cycle, real-estate experts say the mansion market has rarely if ever been hit so hard. “This recession is unlike prior recessions. It hit the high end just as much as the low end,” said Sam Khater, senior economist at CoreLogic.
Of course, the foreclosures could be the result of over-leveraged speculators and developers as opposed to once-wealthy families. Or it could be the result of a poor stock market in 2010, along with higher taxes.
Why do you think the mansion market is getting hit so hard even as the finances of the wealthy are reported to be improving?
Thursday, July 1, 2010
Home buyers to get more time
Associated Press
WASHINGTON - Congress has sent President Obama a plan to give home buyers an additional three months to finish qualifying for federal tax incentives that boosted home sales this spring.
The legislation would give buyers until Sept. 30 to complete their purchases and qualify for tax credits of up to $8,000.Under the current terms, buyers had until April 30 to get a signed sales contract and until June 30 to complete the sale.
The bill allows only people who already have signed contracts to finish at the later date.
The National Association of Realtors had estimated this week that about 180,000 home buyers who already signed purchase agreements were likely to miss the Wednesday deadline.
The House approved the measure Tuesday. Legislation in the Senate, sponsored by Majority Leader Harry Reid (D., Nev.), was approved Wednesday night by unanimous consent. The popular tax credit has helped to stabilize the nation's slumping housing market. Nearly three million taxpayers claimed the tax credit through May 22 - claiming more than $21 billion - according to the Treasury Department.
The Realtors group said the tax credit had generated one million home sales that would not have happened otherwise. The bill would also make it easier for the Internal Revenue Service and state prison officials to share information about inmates in order to fight fraud.
The Treasury Department's inspector general for tax administration reported last week that nearly 1,300 prison inmates had improperly received more than $9 million in tax credits for home buyers while they were locked up. The report said the IRS did not have up-to-date information on inmates.
The tax credit for first-time home buyers was part of Obama's economic-recovery package enacted last year. In November, Congress extended the credit and expanded it to longtime owners who bought new homes. First-time buyers were eligible for a tax credit of up to $8,000. Current owners who bought and moved into another home could qualify for a credit of up to $6,500.
The Realtors group had been pushing hard in Congress for the extension. Mortgage lenders, the trade group said, have been swamped with borrowers trying to get approved by the end of the month. Delays with mortgage lending and appraisal companies have meant that home sales are taking far longer to complete this year.
There have been particularly long delays for buyers of so-called short sales, in which banks agree to accept less than the total mortgage amount. In Las Vegas, for example, short sales made up nearly a third of all sales last month.
WASHINGTON - Congress has sent President Obama a plan to give home buyers an additional three months to finish qualifying for federal tax incentives that boosted home sales this spring.
The legislation would give buyers until Sept. 30 to complete their purchases and qualify for tax credits of up to $8,000.Under the current terms, buyers had until April 30 to get a signed sales contract and until June 30 to complete the sale.
The bill allows only people who already have signed contracts to finish at the later date.
The National Association of Realtors had estimated this week that about 180,000 home buyers who already signed purchase agreements were likely to miss the Wednesday deadline.
The House approved the measure Tuesday. Legislation in the Senate, sponsored by Majority Leader Harry Reid (D., Nev.), was approved Wednesday night by unanimous consent. The popular tax credit has helped to stabilize the nation's slumping housing market. Nearly three million taxpayers claimed the tax credit through May 22 - claiming more than $21 billion - according to the Treasury Department.
The Realtors group said the tax credit had generated one million home sales that would not have happened otherwise. The bill would also make it easier for the Internal Revenue Service and state prison officials to share information about inmates in order to fight fraud.
The Treasury Department's inspector general for tax administration reported last week that nearly 1,300 prison inmates had improperly received more than $9 million in tax credits for home buyers while they were locked up. The report said the IRS did not have up-to-date information on inmates.
The tax credit for first-time home buyers was part of Obama's economic-recovery package enacted last year. In November, Congress extended the credit and expanded it to longtime owners who bought new homes. First-time buyers were eligible for a tax credit of up to $8,000. Current owners who bought and moved into another home could qualify for a credit of up to $6,500.
The Realtors group had been pushing hard in Congress for the extension. Mortgage lenders, the trade group said, have been swamped with borrowers trying to get approved by the end of the month. Delays with mortgage lending and appraisal companies have meant that home sales are taking far longer to complete this year.
There have been particularly long delays for buyers of so-called short sales, in which banks agree to accept less than the total mortgage amount. In Las Vegas, for example, short sales made up nearly a third of all sales last month.
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