Friday, April 13, 2012 — A federal-state program aimed at helping homeowners in states hardest hit by the mortgage crisis is falling far short of its goals, a federal watchdog said in a report released Thursday.
In the report, the Special Inspector General for the Troubled Asset Relief Program (TARP) said that just 3% of $7.6 billion available in the Hardest Hit Housing Markets program — available for 18 states and the District of Columbia — had been tapped as of Dec. 31.
The money has gone to help 30,640 homeowners, or about 7% of the 458,000 homeowners officials estimated would be helped by the end of the program in 2017, according to the watchdog.
More than 75% of the program funds has gone to prop up state unemployment programs that pay mortgages of the unemployed — not efforts such as mortgage modifications or principal reductions that would force banks to take a hit, according to the report.
Christy Romero, the Special Inspector General for the Troubled Asset Relief Program, said the hardest hit fund has largely served to help the unemployed.
“It was supposed to be an innovative program intended to reach the unemployed and underwater homes,” Romero said in an interview with CNNMoney. “It is important to reach the unemployed, but it’s not reaching underwater homes like it was intended.”
Treasury defended the hardest hit program. The program gives states the opportunity to “leverage their unique understanding of the conditions in their communities to create effective, locally tailored programs,” Assistant Secretary for Financial Stability Timothy Massad said in a letter to Romero.
Silver lining in weak jobs report – underemployment
TARP is the $700 billion bailout program that Congress passed at the height of the financial crisis in the fall of 2008. In addition to keeping the big banks afloat, TARP gave money to programs to help struggling homeowners.
Wednesday, April 18, 2012
Flood of foreclosures are coming soon - don't wait until it's too late
Tuesday, April 17, 2012 — The golden age for foreclosure squatters may soon be coming to an end now that the $26 billion mortgage settlement has been approved.
The settlement, agreed to by the nation’s five largest mortgage lenders, is expected to speed up the foreclosure process by providing stricter guidelines for the banks to follow when repossessing homes.
The banks involved include Bank of America (BAC, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Citibank (C, Fortune 500), Wells Fargo (WFC, Fortune 500) and Ally Financial.
Many foreclosures have been in limbo since fall 2010 following the so-called robo-signing scandal, when banks allowed employees to sign off on thousands of foreclosure documents a month with little verification.
Lenders hit the pause button on foreclosures because they “were afraid that anything they did would be under a microscope,” said Eric Higgins, a professor of business at Kansas State University.
As a result, borrowers who were seriously delinquent on their loans have been able to stay in their homes for months or even years without making a single payment. Nationwide, the average time it takes to foreclose on a home — from the first missed payment to the final bank repossession — stretched to 370 days during the first quarter, almost twice as long as it took five years ago, according to Daren Blomquist, the marketing director at RealtyTrac.
Foreclosure free ride: 3 years, no mortgage payment
In some states, delinquent borrowers have been squatting in their homes much longer. In Florida, the average time was 861 days, and in New York it was 1,056 days — close to three years.
“Perhaps a million foreclosures could have been pursued last year but weren’t,” said Rick Sharga, executive vice president for real estate investment company, Carrington Holdings.
But that’s all about to change, he said. “We’re going to see an increase in the speed of foreclosures and a higher number of foreclosure starts.”
The settlement, agreed to by the nation’s five largest mortgage lenders, is expected to speed up the foreclosure process by providing stricter guidelines for the banks to follow when repossessing homes.
The banks involved include Bank of America (BAC, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Citibank (C, Fortune 500), Wells Fargo (WFC, Fortune 500) and Ally Financial.
Many foreclosures have been in limbo since fall 2010 following the so-called robo-signing scandal, when banks allowed employees to sign off on thousands of foreclosure documents a month with little verification.
Lenders hit the pause button on foreclosures because they “were afraid that anything they did would be under a microscope,” said Eric Higgins, a professor of business at Kansas State University.
As a result, borrowers who were seriously delinquent on their loans have been able to stay in their homes for months or even years without making a single payment. Nationwide, the average time it takes to foreclose on a home — from the first missed payment to the final bank repossession — stretched to 370 days during the first quarter, almost twice as long as it took five years ago, according to Daren Blomquist, the marketing director at RealtyTrac.
Foreclosure free ride: 3 years, no mortgage payment
In some states, delinquent borrowers have been squatting in their homes much longer. In Florida, the average time was 861 days, and in New York it was 1,056 days — close to three years.
“Perhaps a million foreclosures could have been pursued last year but weren’t,” said Rick Sharga, executive vice president for real estate investment company, Carrington Holdings.
But that’s all about to change, he said. “We’re going to see an increase in the speed of foreclosures and a higher number of foreclosure starts.”
Foreclosure prevention scams up 60% in 2012
Fraudulent foreclosure prevention providers are coming out of the woodwork to take advantage of today's loss mitigation culture, according to the Homeownership Preservation Foundation.
The nonprofit group, which helps distressed homeowners through the group's HOPE hotline, says the number of mortgage foreclosure scams grew nearly 60% in 2012. The scammers, they say, are able to capitalize on the hype surrounding homeownership preservation as federal programs are being modified to help more and more borrowers.
"Regretfully, every new government initiative spawns a slew of foreclosure avoidance scams, often from the same cast of characters doing business under various names to avoid easy detection and identification," said Colleen Hernandez, CEO of HPF. "Most of these scams involve individuals supposedly offering mortgage foreclosure avoidance assistance that trained HPF counselors provide at no cost. Sadly, with most scams, no meaningful services are ever provided."
HPF said it's unknown whether all of the reported instances were truly fraudulent, but the agency still forwarded all of the complaints to the appropriate regulators and law enforcement agencies.
About half of the scams involve an attorney or individual claiming they can offer special legal services to distressed borrowers. HPF says, in fact, the services they offered are already provided by nonprofits for free.
"Sadly, with most scams, no meaningful services are ever provided," said Hernandez.
HPF put out a warning nationwide, saying no one searching for a home-saving remedy should pay upfront fees to a firm offering assistance.
Click here for article
The nonprofit group, which helps distressed homeowners through the group's HOPE hotline, says the number of mortgage foreclosure scams grew nearly 60% in 2012. The scammers, they say, are able to capitalize on the hype surrounding homeownership preservation as federal programs are being modified to help more and more borrowers.
"Regretfully, every new government initiative spawns a slew of foreclosure avoidance scams, often from the same cast of characters doing business under various names to avoid easy detection and identification," said Colleen Hernandez, CEO of HPF. "Most of these scams involve individuals supposedly offering mortgage foreclosure avoidance assistance that trained HPF counselors provide at no cost. Sadly, with most scams, no meaningful services are ever provided."
HPF said it's unknown whether all of the reported instances were truly fraudulent, but the agency still forwarded all of the complaints to the appropriate regulators and law enforcement agencies.
About half of the scams involve an attorney or individual claiming they can offer special legal services to distressed borrowers. HPF says, in fact, the services they offered are already provided by nonprofits for free.
"Sadly, with most scams, no meaningful services are ever provided," said Hernandez.
HPF put out a warning nationwide, saying no one searching for a home-saving remedy should pay upfront fees to a firm offering assistance.
Click here for article
Tuesday, April 3, 2012
Foreclosures Still Effect Buyers and Sellers
Marcie Geffner from Bankrate.com brings us an article which discusses, full circle, the effect that foreclosures have on buyers and sellers. She starts off by stating what I believe to be true…..the foreclosure crisis is far from over. The shadow inventory is building. When these homes are released for sale, the low prices (average discount of 36% to retail) can only put downward pressure on surrounding home prices.
Ms Geffner does a very nice job of breaking down her expectations (from buyer and sellers perspective) of how foreclosures will effect both parties. Rather than me paraphrase, it’s worth a read on your part.
*****************************************************************************************
News Article
How foreclosures affect buyers and sellers
Overview of a subdivision of single family homes in San Marcos, Calif. The nation’s banks own more than 600,000 single-family homes, according to RealtyTrac.
By Marcie Geffner, bankrate.com
If anything is certain about the foreclosure crisis, it’s that it isn’t over. That fact has important implications, not only for people losing their homes, but also for those planning to sell or buy a home this year.
As of January, about 3 million properties were in foreclosure, headed that way or already owned by banks, according to CoreLogic, an information, analytics and business services company in Santa Ana, Calif.
Approximately 1.6 million of those homes were believed to be within the so-called shadow inventory, a supply of foreclosure properties not yet listed for sale. It’s a major stumbling block to a housing recovery, says Mark Fleming, chief economist of CoreLogic.
“It puts downward pressure on home prices, which hurts home sales and building activity,” Fleming said in a statement.
Given that prelude, here’s what sellers and buyers can expect.
Price
Foreclosures and short sales have widened the gap between sellers’ and buyers’ perceptions of prices. Sellers “think their home is worth more than it really is” and buyers “think the prices are too high,” says Louis Cammarosano, general manager at HomeGain, a real estate information website in Emeryville, Calif.
One cause of that gap is realty brokers’ tendency to scrub foreclosures and short sales from comparable sales data used to set sellers’ asking prices. While sellers might feel a moral justification for that approach, Cammarosano says it’s “disingenuous” because the status of the seller’s mortgage isn’t important to buyers.
“(Just because) you happen to be paying your mortgage, that doesn’t mean the buyer has to step into your shoes and pay your inflated price,” he says.
Interest rates
Traditionally, mortgage rates have been something of a wild card for homebuyers. But that’s not the case today because the Federal Reserve has announced its intention to keep rates low at least through late 2014. That’s not a guarantee, but it has taken some of the urgency out of homebuying and put more buyers into a wait-and-see pattern.
“The perception that prices could go lower, a lot of foreclosures in the pipeline and (the expectation) that rates will remain low — that’s certainly keeping some people on the sidelines,” Cammarosano says.
Location
Buyers might be reluctant to purchase a home in a neighborhood plagued by foreclosures and short sales. But Stephen Israel, president of Buyer’s Edge Co., a real estate brokerage in Bethesda, Md., says buyers can take a clue from real estate investors who are looking at areas that have been hard hit, yet might be prime for a turnaround.
“Investors are interested in neighborhoods that were beat up by foreclosures and that have other redeeming features that they then believe will be the first to bounce back,” he says.
Those redeeming features might include easy access to public transportation, well-regarded schools, attractive shopping centers and other positive infrastructure elements. Neighborhoods that have such amenities can be “really interesting pockets, where there could be some very good values,” Israel says.
Condition
Foreclosure and short sale homes are often, though not always, in worse shape than other homes on the market. That’s especially problematic for buyers if a home has been vacant a long time because neglect can result in problems in plumbing, heating, cooling, electrical and other systems.
“There is a big difference,” Israel says, “between a property that has been vacant a few weeks and one that has been vacant a year or more.”
A home that’s in poor shape might not be a bad buy if the buyer understands the risks, he adds.
Sometimes, though, those risks can be difficult to assess if the term of vacancy isn’t known or the water, sewer, electricity and gas have been shut off. The utilities not being in service is “an interesting part of this equation that people miss all the time,” Israel says.
Buy or sell
The bottom line for buyers is that they need to “buy smart,” to use Israel’s term, researching neighborhoods and being aware of a home’s actual condition beyond its cosmetic appearance.
The bottom line for sellers, Cammarosano says, is that they need to get serious about pricing, cleaning, decluttering, staging and improving the value and desirability of their home.
“That’s getting real,” he says. “And if that’s not what you want, don’t sell it.”
Ms Geffner does a very nice job of breaking down her expectations (from buyer and sellers perspective) of how foreclosures will effect both parties. Rather than me paraphrase, it’s worth a read on your part.
*****************************************************************************************
News Article
How foreclosures affect buyers and sellers
Overview of a subdivision of single family homes in San Marcos, Calif. The nation’s banks own more than 600,000 single-family homes, according to RealtyTrac.
By Marcie Geffner, bankrate.com
If anything is certain about the foreclosure crisis, it’s that it isn’t over. That fact has important implications, not only for people losing their homes, but also for those planning to sell or buy a home this year.
As of January, about 3 million properties were in foreclosure, headed that way or already owned by banks, according to CoreLogic, an information, analytics and business services company in Santa Ana, Calif.
Approximately 1.6 million of those homes were believed to be within the so-called shadow inventory, a supply of foreclosure properties not yet listed for sale. It’s a major stumbling block to a housing recovery, says Mark Fleming, chief economist of CoreLogic.
“It puts downward pressure on home prices, which hurts home sales and building activity,” Fleming said in a statement.
Given that prelude, here’s what sellers and buyers can expect.
Price
Foreclosures and short sales have widened the gap between sellers’ and buyers’ perceptions of prices. Sellers “think their home is worth more than it really is” and buyers “think the prices are too high,” says Louis Cammarosano, general manager at HomeGain, a real estate information website in Emeryville, Calif.
One cause of that gap is realty brokers’ tendency to scrub foreclosures and short sales from comparable sales data used to set sellers’ asking prices. While sellers might feel a moral justification for that approach, Cammarosano says it’s “disingenuous” because the status of the seller’s mortgage isn’t important to buyers.
“(Just because) you happen to be paying your mortgage, that doesn’t mean the buyer has to step into your shoes and pay your inflated price,” he says.
Interest rates
Traditionally, mortgage rates have been something of a wild card for homebuyers. But that’s not the case today because the Federal Reserve has announced its intention to keep rates low at least through late 2014. That’s not a guarantee, but it has taken some of the urgency out of homebuying and put more buyers into a wait-and-see pattern.
“The perception that prices could go lower, a lot of foreclosures in the pipeline and (the expectation) that rates will remain low — that’s certainly keeping some people on the sidelines,” Cammarosano says.
Location
Buyers might be reluctant to purchase a home in a neighborhood plagued by foreclosures and short sales. But Stephen Israel, president of Buyer’s Edge Co., a real estate brokerage in Bethesda, Md., says buyers can take a clue from real estate investors who are looking at areas that have been hard hit, yet might be prime for a turnaround.
“Investors are interested in neighborhoods that were beat up by foreclosures and that have other redeeming features that they then believe will be the first to bounce back,” he says.
Those redeeming features might include easy access to public transportation, well-regarded schools, attractive shopping centers and other positive infrastructure elements. Neighborhoods that have such amenities can be “really interesting pockets, where there could be some very good values,” Israel says.
Condition
Foreclosure and short sale homes are often, though not always, in worse shape than other homes on the market. That’s especially problematic for buyers if a home has been vacant a long time because neglect can result in problems in plumbing, heating, cooling, electrical and other systems.
“There is a big difference,” Israel says, “between a property that has been vacant a few weeks and one that has been vacant a year or more.”
A home that’s in poor shape might not be a bad buy if the buyer understands the risks, he adds.
Sometimes, though, those risks can be difficult to assess if the term of vacancy isn’t known or the water, sewer, electricity and gas have been shut off. The utilities not being in service is “an interesting part of this equation that people miss all the time,” Israel says.
Buy or sell
The bottom line for buyers is that they need to “buy smart,” to use Israel’s term, researching neighborhoods and being aware of a home’s actual condition beyond its cosmetic appearance.
The bottom line for sellers, Cammarosano says, is that they need to get serious about pricing, cleaning, decluttering, staging and improving the value and desirability of their home.
“That’s getting real,” he says. “And if that’s not what you want, don’t sell it.”
Tuesday, March 13, 2012
Bank loosen Credit Standards ??
Krista Franks Brock from DSNEWS brings us an article that
will brighten the day for real estate professionals. She reports that banks are loosening their
credit standards which will open up money for people to purchase homes. My only question is, “How loose?” Will these standards come back to haunt us
the way the lenders lending practices from yesteryear have hurt us? What do you think?
News Article
Housing Crisis to End in 2012 as BanksLoosen Credit Standards
Capital Economics expects the housing crisis to end this year,according to a report released Tuesday. One of the reasons: loosening credit.
The analytics firm notes the average credit score required toattain a mortgage loan is 700. While this is higher than scores required priorto the crisis, it is constant with requirements one year ago.
Additionally, a Fed Senior Loan Officer Survey found creditrequirements in the fourth quarter were consistent with the past threequarters.
However, other market indicators point not just to astabilization of mortgage lending standards, but also a loosening of creditavailability.
Banks are now lending amounts up to 3.5 times borrowerearnings. This is up from a low during the crisis of 3.2 times borrowerearnings.
Banks are also loosening loan-to-value ratios (LTV), whichCapital Economics denotes “the clearest sign yet of an improvement in mortgagecredit conditions.”
In contrast to a low of 74 percent reached in mid-2010,banks are now lending at 82 percent LTV.
While credit conditions may have loosened slightly, somepotential homebuyers are still struggling with credit requirements. In fact,Capital Economics points out that in November 8 percent of contractcancellations were the result of a potential buyer not qualifying for a loan.
Additionally, Capital Economics says “any improvement incredit conditions won’t be significant enough to generate actual house pricegains,” and potential ramifications from the euro-zone pose a threat to futurecredit availability.
will brighten the day for real estate professionals. She reports that banks are loosening their
credit standards which will open up money for people to purchase homes. My only question is, “How loose?” Will these standards come back to haunt us
the way the lenders lending practices from yesteryear have hurt us? What do you think?
News Article
Housing Crisis to End in 2012 as BanksLoosen Credit Standards
Capital Economics expects the housing crisis to end this year,according to a report released Tuesday. One of the reasons: loosening credit.
The analytics firm notes the average credit score required toattain a mortgage loan is 700. While this is higher than scores required priorto the crisis, it is constant with requirements one year ago.
Additionally, a Fed Senior Loan Officer Survey found creditrequirements in the fourth quarter were consistent with the past threequarters.
However, other market indicators point not just to astabilization of mortgage lending standards, but also a loosening of creditavailability.
Banks are now lending amounts up to 3.5 times borrowerearnings. This is up from a low during the crisis of 3.2 times borrowerearnings.
Banks are also loosening loan-to-value ratios (LTV), whichCapital Economics denotes “the clearest sign yet of an improvement in mortgagecredit conditions.”
In contrast to a low of 74 percent reached in mid-2010,banks are now lending at 82 percent LTV.
While credit conditions may have loosened slightly, somepotential homebuyers are still struggling with credit requirements. In fact,Capital Economics points out that in November 8 percent of contractcancellations were the result of a potential buyer not qualifying for a loan.
Additionally, Capital Economics says “any improvement incredit conditions won’t be significant enough to generate actual house pricegains,” and potential ramifications from the euro-zone pose a threat to futurecredit availability.
Short Sale or Foreclosure????
Carrie Bay from DS News brings us an article that documents
the cold . hard facts regarding foreclosures and short sales. Ms. Bay reports that, “Pre-foreclosure
short sales and sales of foreclosed REOs totaled 907,138 for the 2011 calendar
year, RealtyTrac reported Thursday. These foreclosure-related transactions made
up 23 percent of all residential sales in the U.S. last year, with short sales
accounting for 9 percent and REOs accounting for 14 percent of 2011 home
sales.”
While this is an astonishing stat, what is even more
astonishing is the disparity in short sale prices and foreclosure (REO)
prices. To quote Ms. Bay,
“RealtyTrac says pre-foreclosure short sales went for an average of
$184,221 in the fourth quarter. The average sales price of a pre-foreclosure
home in the fourth quarter was 21 percent below the average sales price of a
non-foreclosure home, similar to the discount of 22 percent on pre-foreclosure
purchases for the entire year. REOs sold
for an average of $149,686 in the fourth quarter, 36 percent below the average
sales price of a non-foreclosure home, while the average discount on bank-owned
homes for the entire year was 40 percent.”
So the “bank” aka the investor that owns the note is taking a
25% discount )on average) when they foreclose!
What doesnt come out in this figure is the money the “banks”
pay to insure the foreclosed house, maintain the house, fix the house etc etc
for an average of 175 days after foreclosure!
Who in their right mind would EVER knowingly stand in the
way of a short sale!
News Article
Foreclosure-Related Sales in 2011 = 907,138
Pre-foreclosure short sales and sales of foreclosed REOs
totaled 907,138 for the 2011 calendar year, RealtyTrac reported Thursday. These
foreclosure-related transactions made up 23 percent of all residential sales in
the U.S. last year, with short sales accounting for 9 percent and REOs
accounting for 14 percent of 2011 home sales.
During the last three months of the year, third parties
purchased a total of 88,303 pre-foreclosure homes that were in default or
scheduled for auction, according to RealtyTrac. That tally represents a
decrease of 5 percent from the previous quarter but is up 15 percent compared
to the fourth quarter of 2010.
Pre-foreclosure sales increased more than 20 percent on a
year-over-year basis in several states, including Michigan (103 percent),
Georgia (59 percent), Arizona (48 percent), Washington (36 percent), Nevada (29
percent), Oregon (27 percent), Illinois (26 percent), Ohio (25 percent),
California (23 percent), and Texas (22 percent).
RealtyTrac says pre-foreclosure short sales went for an
average of $184,221 in the fourth quarter. The average sales price of a
pre-foreclosure home in the fourth quarter was 21 percent below the average
sales price of a non-foreclosure home, similar to the discount of 22 percent on
pre-foreclosure purchases for the entire year.
Pre-foreclosure homes that sold in the fourth quarter of
2011 took an average of 308 days to sell after starting the foreclosure
process.
Third parties purchased a total of 115,777 bank-owned
REOhomes in the fourth quarter, down 10 percent from the previous quarter and
down 12 percent from the fourth quarter of 2010.
Despite the nationwide decrease, RealtyTrac says REO sales
increased 20 percent or more on a year-over-year basis in several states,
including Minnesota (65 percent), Wisconsin (23 percent), Washington (21 percent),
and Illinois (20 percent).
REOs sold for an average of $149,686 in the fourth quarter,
36 percent below the average sales price of a non-foreclosure home, while the
average discount on bank-owned homes for the entire year was 40 percent.
REOs that sold in the fourth quarter took an average of 175
days to sell after completing the foreclosure process.
“Sales of foreclosures in the fourth quarter continued to be
slowed by questions surrounding proper foreclosure paperwork and procedures,”
said Brandon Moore, RealtyTrac’s CEO. “Even so, foreclosures accounted for
nearly one in every four sales during the quarter and for the entire year.”
Moore says his firm expects to see foreclosure-related sales
increase in 2012, particularly pre-foreclosure short sales, as lenders start to
more aggressively dispose of distressed assets.
“We continued to see a shift toward pre-foreclosure sales,
or short sales, and away from REO sales in the fourth quarter,” Moore said.
“Nationally, pre-foreclosure sales increased 15 percent from a year ago while REO
sales decreased 12 percent.”
Moore says short sales outnumbered REO sales in several
bellwether markets, including Los Angeles, Miami, and Phoenix – all metros
where REO sales had outnumbered pre-foreclosure sales a year ago.
“That trend will likely show up in more local markets in
2012 as lenders recognize short sales as a better option for many of their
non-performing loans,” according to Moore.
Among metro areas with at least 500 short sales during the
fourth quarter and where short sales increased at least 5 percent from a year
ago, the San Francisco-Oakland-Fremont metro in California posted the biggest
short sale discount at 41 percent.
Among metro areas with at least 500 REO sales during Q4 and
where REO sales rose by at least 5 percent from the year-ago period,
Wisconsin’s Milwaukee-Waukesha-West Allis metro saw the biggest discount.
There, bank-owned properties sold for 58 percent less than non-foreclosure
homes.
Combined, short sales and REOs accounted for 56 percent of
all residential sales in Nevada in the fourth quarter, the highest percentage
of any state.
the cold . hard facts regarding foreclosures and short sales. Ms. Bay reports that, “Pre-foreclosure
short sales and sales of foreclosed REOs totaled 907,138 for the 2011 calendar
year, RealtyTrac reported Thursday. These foreclosure-related transactions made
up 23 percent of all residential sales in the U.S. last year, with short sales
accounting for 9 percent and REOs accounting for 14 percent of 2011 home
sales.”
While this is an astonishing stat, what is even more
astonishing is the disparity in short sale prices and foreclosure (REO)
prices. To quote Ms. Bay,
“RealtyTrac says pre-foreclosure short sales went for an average of
$184,221 in the fourth quarter. The average sales price of a pre-foreclosure
home in the fourth quarter was 21 percent below the average sales price of a
non-foreclosure home, similar to the discount of 22 percent on pre-foreclosure
purchases for the entire year. REOs sold
for an average of $149,686 in the fourth quarter, 36 percent below the average
sales price of a non-foreclosure home, while the average discount on bank-owned
homes for the entire year was 40 percent.”
So the “bank” aka the investor that owns the note is taking a
25% discount )on average) when they foreclose!
What doesnt come out in this figure is the money the “banks”
pay to insure the foreclosed house, maintain the house, fix the house etc etc
for an average of 175 days after foreclosure!
Who in their right mind would EVER knowingly stand in the
way of a short sale!
News Article
Foreclosure-Related Sales in 2011 = 907,138
Pre-foreclosure short sales and sales of foreclosed REOs
totaled 907,138 for the 2011 calendar year, RealtyTrac reported Thursday. These
foreclosure-related transactions made up 23 percent of all residential sales in
the U.S. last year, with short sales accounting for 9 percent and REOs
accounting for 14 percent of 2011 home sales.
During the last three months of the year, third parties
purchased a total of 88,303 pre-foreclosure homes that were in default or
scheduled for auction, according to RealtyTrac. That tally represents a
decrease of 5 percent from the previous quarter but is up 15 percent compared
to the fourth quarter of 2010.
Pre-foreclosure sales increased more than 20 percent on a
year-over-year basis in several states, including Michigan (103 percent),
Georgia (59 percent), Arizona (48 percent), Washington (36 percent), Nevada (29
percent), Oregon (27 percent), Illinois (26 percent), Ohio (25 percent),
California (23 percent), and Texas (22 percent).
RealtyTrac says pre-foreclosure short sales went for an
average of $184,221 in the fourth quarter. The average sales price of a
pre-foreclosure home in the fourth quarter was 21 percent below the average
sales price of a non-foreclosure home, similar to the discount of 22 percent on
pre-foreclosure purchases for the entire year.
Pre-foreclosure homes that sold in the fourth quarter of
2011 took an average of 308 days to sell after starting the foreclosure
process.
Third parties purchased a total of 115,777 bank-owned
REOhomes in the fourth quarter, down 10 percent from the previous quarter and
down 12 percent from the fourth quarter of 2010.
Despite the nationwide decrease, RealtyTrac says REO sales
increased 20 percent or more on a year-over-year basis in several states,
including Minnesota (65 percent), Wisconsin (23 percent), Washington (21 percent),
and Illinois (20 percent).
REOs sold for an average of $149,686 in the fourth quarter,
36 percent below the average sales price of a non-foreclosure home, while the
average discount on bank-owned homes for the entire year was 40 percent.
REOs that sold in the fourth quarter took an average of 175
days to sell after completing the foreclosure process.
“Sales of foreclosures in the fourth quarter continued to be
slowed by questions surrounding proper foreclosure paperwork and procedures,”
said Brandon Moore, RealtyTrac’s CEO. “Even so, foreclosures accounted for
nearly one in every four sales during the quarter and for the entire year.”
Moore says his firm expects to see foreclosure-related sales
increase in 2012, particularly pre-foreclosure short sales, as lenders start to
more aggressively dispose of distressed assets.
“We continued to see a shift toward pre-foreclosure sales,
or short sales, and away from REO sales in the fourth quarter,” Moore said.
“Nationally, pre-foreclosure sales increased 15 percent from a year ago while REO
sales decreased 12 percent.”
Moore says short sales outnumbered REO sales in several
bellwether markets, including Los Angeles, Miami, and Phoenix – all metros
where REO sales had outnumbered pre-foreclosure sales a year ago.
“That trend will likely show up in more local markets in
2012 as lenders recognize short sales as a better option for many of their
non-performing loans,” according to Moore.
Among metro areas with at least 500 short sales during the
fourth quarter and where short sales increased at least 5 percent from a year
ago, the San Francisco-Oakland-Fremont metro in California posted the biggest
short sale discount at 41 percent.
Among metro areas with at least 500 REO sales during Q4 and
where REO sales rose by at least 5 percent from the year-ago period,
Wisconsin’s Milwaukee-Waukesha-West Allis metro saw the biggest discount.
There, bank-owned properties sold for 58 percent less than non-foreclosure
homes.
Combined, short sales and REOs accounted for 56 percent of
all residential sales in Nevada in the fourth quarter, the highest percentage
of any state.
More Help for underwater mortgages
Tallahassee, FL -- March 12, 2012 --
Attorney General Pam Bondi today announced that she, 48 other attorneys general, the District of Columbia and the Department of Justice filed a complaint and proposed consent judgments requiring the nation's five largest mortgage servicers to comply with comprehensive new mortgage loan servicing standards, to provide substantial direct consumer relief and monetary payments, and to submit to an independent monitor, as part of a $25 billion national mortgage servicing joint state-federal settlement.
Florida was one of only two states that obtained a guarantee from Wells Fargo, JP Morgan Chase, and Bank of America to ensure that at least $4 billion in relief under the settlement is provided to Floridians. This guarantee is similar and in proportion to the one provided to California.
However, Florida’s guarantee is unique in that it includes not only principal reductions and other financial relief to financially troubled consumers, but it also guarantees refinancing relief to borrowers who are current on their mortgage payments but are stuck in higher interest loans that exceed the value of their homes. If the banks fail to meet the guarantee, they are subject to stiff penalties.
“Today’s filings pave the way for court orders that will provide substantial relief to Florida’s homeowners, hold banks accountable and reform the mortgage servicing industry,” stated Attorney General Pam Bondi. “We are one of the states on the monitoring committee, and we will ensure that banks comply with this agreement and that they are held accountable.”
Attorney General Bondi has obtained the following for Floridians:
The total value of the settlement nationally is more than $25 billion in credits and $32 billion in total dollar value; Florida will receive a total value of more than $4 billion in credits and $8 billion in total dollar value. Florida’s share is broken down as follows:
At least $3.1 billion will go toward assisting Florida’s financially troubled borrowers with loan modifications, including reducing principal loan balances, forgiving amounts in forbearance, and providing other loss mitigation (e.g. short sales and deficiency waivers).
More than $309 million will go to providing refinancing relief to eligible Florida borrowers whose loans are currently underwater. “Underwater” loans are loans where the principal balance exceeds the market value of the home. To be eligible for refinancing, a borrower must be current on mortgage payments, have a loan-to-value ratio in excess of 100 percent, and have a current interest rate over 5.25 percent. Eligible borrowers will receive notices from the banks in the mail. If you have questions about your eligibility or about the program, you may contact your bank at the contact numbers listed below.
Approximately $171 million in payments will be available to Florida borrowers who have already lost their homes, as partial payment for injury a borrower suffered as a result of improper servicing or a defect in the foreclosure proceeding.
Qualifying borrowers are expected to receive payments in the range of $1,800 to $2,000.
To be eligible, borrowers must have had a loan serviced by the settling banks and must complete a simple application and screening process.
Borrowers who receive a payment under this settlement may still be eligible for relief under the Office of the Comptroller of the Currency review process, which is currently ongoing (for more information, see www.IndependentForeclosureReview.com). However, any sums received in the OCC review process or under a separate settlement or legal action may be reduced by any payment received under the state-federal settlement.
Florida will receive a payment of approximately $334 million to help fund housing-related and foreclosure prevention programs within the state and provide for civil penalties.
Today’s complaint and consent judgments against Bank of America Corporation, JPMorgan Chase & Co., Wells Fargo & Company, Citigroup Inc., and Ally Financial, Inc. follow a joint federal-state investigation. Allegations included that the servicers' misconduct "resulted in the issuance of improper mortgages, premature and unauthorized foreclosures, violation of service members' and other homeowners' rights and protections, the use of false and deceptive affidavits and other documents, and the waste and abuse of taxpayer funds."
Once court orders are issued, the settlement that was first announced February 9 will be finalized. It is the largest joint state-federal settlement ever obtained.
National Settlement: $25 billion
• Servicers must provide a minimum of $20 billion in benefits directly to borrowers through a series of national homeowner relief effort options, including principal reduction. Servicers will likely provide up to an estimated $32 billion in direct homeowner relief through a complex system of settlement credits. Servicers also fund an underwater mortgage refinancing program for current, but underwater borrowers.
• Under an enhanced agreement with Bank of America, the company will write down principal on a large number of underwater homeowners to market value, which is in addition to its existing principal reduction obligations under the settlement.
• Servicers pay $5 billion to the states and federal government ($4.25 billion to the states and $750 million to the federal government). • Homeowners receive comprehensive new protections from new mortgage loan servicing and foreclosure standards (see below). Servicers will implement the new standards in phases over the next six months.
• Service members receive new protections that go beyond the Service members Civil Relief Act (SCRA). • An independent monitor will ensure mortgage servicer compliance (see below).
• States preserve the right to pursue all criminal prosecutions and many civil claims, including claims regarding the packaging of mortgage loans into securities.
• Borrowers and mortgage investors can pursue individual, institutional or class action cases without restriction.
New Mortgage Servicing Standards
The five mortgage servicers will implement extensive new servicing standards, which take effect in three phases over the next two to six months:
• Stop many past foreclosure abuses, such as robo-signing, improper documentation and lost paperwork through new mortgage servicing standards.
• Require strict oversight of foreclosure processing, including of third-party vendors.
• Impose new standards to ensure the accuracy of information provided in federal bankruptcy court, including pre-filing reviews of certain documents.
• Make foreclosure a last resort, by requiring servicers to evaluate homeowners for other loan mitigation options first.
• Restrict banks from foreclosing while the homeowner is being considered for a loan modification.
• Set procedures and timelines for reviewing loan modification applications, and give homeowners the right to appeal denials.
• Create a single point of contact for borrowers seeking information about their loans and adequate staff to handle calls.
National Monitor Begins Work
Independent settlement monitor Joseph A. Smith, Jr. will oversee the terms of the finalized agreement and will help ensure compliance. A monitoring committee comprised of state attorneys general, the U.S. Department of Justice, and the U.S. Department of Housing and Urban Development will oversee the monitor, who will prepare quarterly compliance reviews.
The U.S. Department of Justice and state attorneys general can enforce through the court process compliance with the servicing standards and the banks' financial obligations. A federal judge may assess civil penalties for violations of the consent judgments.
Participating Mortgage Servicer Consumer Numbers
Bank of America: 1-877-488-7814
Citigroup: 1-866-272-4749
Chase: 1-866-372-6901
Ally/GMAC: 1-800-766-4622
Wells Fargo: 1-800-288-3212
More information will be made available as settlement programs are implemented. The mortgage servicers are required to complete 75 percent of their consumer relief obligations within two years and 100 percent within three years.
To view the filings, please click here:
http://www.justice.gov/opa/opa_mortgage-service.htm
For More Information:
www.MyFloridaLegal.com
www.NationalForeclosureSettlement.com
www.HUD.gov
Attorney General Pam Bondi today announced that she, 48 other attorneys general, the District of Columbia and the Department of Justice filed a complaint and proposed consent judgments requiring the nation's five largest mortgage servicers to comply with comprehensive new mortgage loan servicing standards, to provide substantial direct consumer relief and monetary payments, and to submit to an independent monitor, as part of a $25 billion national mortgage servicing joint state-federal settlement.
Florida was one of only two states that obtained a guarantee from Wells Fargo, JP Morgan Chase, and Bank of America to ensure that at least $4 billion in relief under the settlement is provided to Floridians. This guarantee is similar and in proportion to the one provided to California.
However, Florida’s guarantee is unique in that it includes not only principal reductions and other financial relief to financially troubled consumers, but it also guarantees refinancing relief to borrowers who are current on their mortgage payments but are stuck in higher interest loans that exceed the value of their homes. If the banks fail to meet the guarantee, they are subject to stiff penalties.
“Today’s filings pave the way for court orders that will provide substantial relief to Florida’s homeowners, hold banks accountable and reform the mortgage servicing industry,” stated Attorney General Pam Bondi. “We are one of the states on the monitoring committee, and we will ensure that banks comply with this agreement and that they are held accountable.”
Attorney General Bondi has obtained the following for Floridians:
The total value of the settlement nationally is more than $25 billion in credits and $32 billion in total dollar value; Florida will receive a total value of more than $4 billion in credits and $8 billion in total dollar value. Florida’s share is broken down as follows:
At least $3.1 billion will go toward assisting Florida’s financially troubled borrowers with loan modifications, including reducing principal loan balances, forgiving amounts in forbearance, and providing other loss mitigation (e.g. short sales and deficiency waivers).
More than $309 million will go to providing refinancing relief to eligible Florida borrowers whose loans are currently underwater. “Underwater” loans are loans where the principal balance exceeds the market value of the home. To be eligible for refinancing, a borrower must be current on mortgage payments, have a loan-to-value ratio in excess of 100 percent, and have a current interest rate over 5.25 percent. Eligible borrowers will receive notices from the banks in the mail. If you have questions about your eligibility or about the program, you may contact your bank at the contact numbers listed below.
Approximately $171 million in payments will be available to Florida borrowers who have already lost their homes, as partial payment for injury a borrower suffered as a result of improper servicing or a defect in the foreclosure proceeding.
Qualifying borrowers are expected to receive payments in the range of $1,800 to $2,000.
To be eligible, borrowers must have had a loan serviced by the settling banks and must complete a simple application and screening process.
Borrowers who receive a payment under this settlement may still be eligible for relief under the Office of the Comptroller of the Currency review process, which is currently ongoing (for more information, see www.IndependentForeclosureReview.com). However, any sums received in the OCC review process or under a separate settlement or legal action may be reduced by any payment received under the state-federal settlement.
Florida will receive a payment of approximately $334 million to help fund housing-related and foreclosure prevention programs within the state and provide for civil penalties.
Today’s complaint and consent judgments against Bank of America Corporation, JPMorgan Chase & Co., Wells Fargo & Company, Citigroup Inc., and Ally Financial, Inc. follow a joint federal-state investigation. Allegations included that the servicers' misconduct "resulted in the issuance of improper mortgages, premature and unauthorized foreclosures, violation of service members' and other homeowners' rights and protections, the use of false and deceptive affidavits and other documents, and the waste and abuse of taxpayer funds."
Once court orders are issued, the settlement that was first announced February 9 will be finalized. It is the largest joint state-federal settlement ever obtained.
National Settlement: $25 billion
• Servicers must provide a minimum of $20 billion in benefits directly to borrowers through a series of national homeowner relief effort options, including principal reduction. Servicers will likely provide up to an estimated $32 billion in direct homeowner relief through a complex system of settlement credits. Servicers also fund an underwater mortgage refinancing program for current, but underwater borrowers.
• Under an enhanced agreement with Bank of America, the company will write down principal on a large number of underwater homeowners to market value, which is in addition to its existing principal reduction obligations under the settlement.
• Servicers pay $5 billion to the states and federal government ($4.25 billion to the states and $750 million to the federal government). • Homeowners receive comprehensive new protections from new mortgage loan servicing and foreclosure standards (see below). Servicers will implement the new standards in phases over the next six months.
• Service members receive new protections that go beyond the Service members Civil Relief Act (SCRA). • An independent monitor will ensure mortgage servicer compliance (see below).
• States preserve the right to pursue all criminal prosecutions and many civil claims, including claims regarding the packaging of mortgage loans into securities.
• Borrowers and mortgage investors can pursue individual, institutional or class action cases without restriction.
New Mortgage Servicing Standards
The five mortgage servicers will implement extensive new servicing standards, which take effect in three phases over the next two to six months:
• Stop many past foreclosure abuses, such as robo-signing, improper documentation and lost paperwork through new mortgage servicing standards.
• Require strict oversight of foreclosure processing, including of third-party vendors.
• Impose new standards to ensure the accuracy of information provided in federal bankruptcy court, including pre-filing reviews of certain documents.
• Make foreclosure a last resort, by requiring servicers to evaluate homeowners for other loan mitigation options first.
• Restrict banks from foreclosing while the homeowner is being considered for a loan modification.
• Set procedures and timelines for reviewing loan modification applications, and give homeowners the right to appeal denials.
• Create a single point of contact for borrowers seeking information about their loans and adequate staff to handle calls.
National Monitor Begins Work
Independent settlement monitor Joseph A. Smith, Jr. will oversee the terms of the finalized agreement and will help ensure compliance. A monitoring committee comprised of state attorneys general, the U.S. Department of Justice, and the U.S. Department of Housing and Urban Development will oversee the monitor, who will prepare quarterly compliance reviews.
The U.S. Department of Justice and state attorneys general can enforce through the court process compliance with the servicing standards and the banks' financial obligations. A federal judge may assess civil penalties for violations of the consent judgments.
Participating Mortgage Servicer Consumer Numbers
Bank of America: 1-877-488-7814
Citigroup: 1-866-272-4749
Chase: 1-866-372-6901
Ally/GMAC: 1-800-766-4622
Wells Fargo: 1-800-288-3212
More information will be made available as settlement programs are implemented. The mortgage servicers are required to complete 75 percent of their consumer relief obligations within two years and 100 percent within three years.
To view the filings, please click here:
http://www.justice.gov/opa/opa_mortgage-service.htm
For More Information:
www.MyFloridaLegal.com
www.NationalForeclosureSettlement.com
www.HUD.gov
Tuesday, February 21, 2012
Mortgage Delinquencies Rates Rise - FL tops the list again
According to TransUnion, “The national mortgage delinquency rate rose during the fourth quarter of 2011, marking only the second time since the end of 2009 the Chicago-based credit bureau has recorded an increase in its quarterly assessment of past due mortgage payments.” This is significant in that it flies in the face of what the press/government has lead people to believe…that being that the housing market is improving. With delinquencies rising, the probability of more short sales increases dramatically. Transunion also reported that property values declined and unemployment
rose (don’t believe the positive numbers that the government reports…they forget to tell you that hundreds of thousands of people have simply given up on finding a job)
What does this mean to you? If you don’t have a plan to work with distressed properties, Transunion has given you a reason to start.
***********************************************************************************
News Article
The national mortgage delinquency rate rose during the fourth quarter of 2011, TransUnion reported Tuesday, marking only the second time since the end of 2009 the Chicago-based credit bureau has recorded an increase in its quarterly assessment of past due mortgage payments.
The first was during the third quarter of 2011, with the succession signaling what could be a troubling trend in the making.
TransUnion calculates the mortgage delinquency rate as the percentage of borrowers 60 or more days behind on their payments, excluding those that are already in foreclosure.
The rate increased from 5.88 percent at the end of the third quarter to 6.01 percent as of the end of the fourth.
Between the third and fourth quarters of 2011, all but 13 states experienced increases in their mortgage delinquency rates, according to TransUnion’s study.
On a more granular level, 64 percent of metropolitan areas saw increases in mortgage delinquencies during the final three months of last year. The previous three months also had the distinction of increases in 64 percent of metros. That’s up from only 21 percent during the second quarter of 2011.
“To see that, quarter over quarter, fewer homeowners were able to make their mortgage payments is not welcome news. However, it was not unexpected,” said Tim
Martin, group vice president of U.S. housing in TransUnion’s financial services business unit.
Martin explained that there tends to be a natural seasonality – which was evident well before the recession – of higher delinquencies during the fourth quarter period of any year, perhaps because borrowers must balance holiday spending versus debt payments.
More intrinsic to the current conditions, Martin noted that on top of the seasonal flux, home prices continued to deteriorate in the fourth quarter of 2011 and unemployment remained stubbornly high.
“This combination leads to more negative equity in homes and reduced real personal income that can affect borrowers’ ability and willingness to pay their mortgages,” he said.
Martin does see some “more encouraging news” behind the numbers in TransUnion’s latest report – when looking at the data year-over-year, more homeowners are now making their mortgage payments on time, as evidenced by the 6 percent drop in the national delinquency rate since the fourth quarter of 2010.
“While it is certainly good to see the rate dropping, at this pace it will take a very long time for mortgage delinquencies to get back to normal,” Martin said.
The highest mortgage delinquency rates during the fourth quarter were found in Florida (14.27%), Nevada (12.08%), New Jersey (8.32%), and Arizona (7.50%).
States with the lowest mortgage delinquency rates included North Dakota (1.50%), South Dakota (2.45%), Nebraska (2.57%), and Alaska (2.77%).
TransUnion’s forecast calls for mortgage delinquency rates to drift downward marginally in 2012 as the economic environment begins to modestly improve.
In the meantime, however, the agency says the industry may see a quarter or two more of slightly elevated nonpayment rates as some consumers are not able to, or decide not to, repay their mortgage debt obligations in light of the uncertain economic outlook.
rose (don’t believe the positive numbers that the government reports…they forget to tell you that hundreds of thousands of people have simply given up on finding a job)
What does this mean to you? If you don’t have a plan to work with distressed properties, Transunion has given you a reason to start.
***********************************************************************************
News Article
The national mortgage delinquency rate rose during the fourth quarter of 2011, TransUnion reported Tuesday, marking only the second time since the end of 2009 the Chicago-based credit bureau has recorded an increase in its quarterly assessment of past due mortgage payments.
The first was during the third quarter of 2011, with the succession signaling what could be a troubling trend in the making.
TransUnion calculates the mortgage delinquency rate as the percentage of borrowers 60 or more days behind on their payments, excluding those that are already in foreclosure.
The rate increased from 5.88 percent at the end of the third quarter to 6.01 percent as of the end of the fourth.
Between the third and fourth quarters of 2011, all but 13 states experienced increases in their mortgage delinquency rates, according to TransUnion’s study.
On a more granular level, 64 percent of metropolitan areas saw increases in mortgage delinquencies during the final three months of last year. The previous three months also had the distinction of increases in 64 percent of metros. That’s up from only 21 percent during the second quarter of 2011.
“To see that, quarter over quarter, fewer homeowners were able to make their mortgage payments is not welcome news. However, it was not unexpected,” said Tim
Martin, group vice president of U.S. housing in TransUnion’s financial services business unit.
Martin explained that there tends to be a natural seasonality – which was evident well before the recession – of higher delinquencies during the fourth quarter period of any year, perhaps because borrowers must balance holiday spending versus debt payments.
More intrinsic to the current conditions, Martin noted that on top of the seasonal flux, home prices continued to deteriorate in the fourth quarter of 2011 and unemployment remained stubbornly high.
“This combination leads to more negative equity in homes and reduced real personal income that can affect borrowers’ ability and willingness to pay their mortgages,” he said.
Martin does see some “more encouraging news” behind the numbers in TransUnion’s latest report – when looking at the data year-over-year, more homeowners are now making their mortgage payments on time, as evidenced by the 6 percent drop in the national delinquency rate since the fourth quarter of 2010.
“While it is certainly good to see the rate dropping, at this pace it will take a very long time for mortgage delinquencies to get back to normal,” Martin said.
The highest mortgage delinquency rates during the fourth quarter were found in Florida (14.27%), Nevada (12.08%), New Jersey (8.32%), and Arizona (7.50%).
States with the lowest mortgage delinquency rates included North Dakota (1.50%), South Dakota (2.45%), Nebraska (2.57%), and Alaska (2.77%).
TransUnion’s forecast calls for mortgage delinquency rates to drift downward marginally in 2012 as the economic environment begins to modestly improve.
In the meantime, however, the agency says the industry may see a quarter or two more of slightly elevated nonpayment rates as some consumers are not able to, or decide not to, repay their mortgage debt obligations in light of the uncertain economic outlook.
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