Home > Blogs > Real Estate News
75,288 views

Real Estate News

Area Expert ~ Gary Youngman ~ Call (561) 306-SOLD (7653)

By Gary Youngman | Agent in Boca Raton, FL
  • Americans brace for next foreclosure wave

    Posted Under: Market Conditions in Ohio, Financing in Ohio, Foreclosure in Ohio  |  April 9, 2012 5:14 AM  |  639 views  |  No comments

    Americans brace for next foreclosure wave

    ReutersBy Nick Carey | Reuters – Wed, Apr 4, 2012 7:09 PM EDT

    GARFIELD HEIGHTS, Ohio (Reuters) - Half a decade into the deepest U.S. housing crisis since the 1930s, many Americans are hoping the crisis is finally nearing its end. House sales are picking up across most of the country, the plunge in prices is slowing and attempts by lenders to claim back properties from struggling borrowers dropped by more than a third in 2011, hitting a four-year low.

    But a painful part two of the slump looks set to unfold: Many more U.S. homeowners face the prospect of losing their homes this year as banks pick up the pace of foreclosures.

    "We are right back where we were two years ago. I would put money on 2012 being a bigger year for foreclosures than 2010," said Mark Seifert, executive director of Empowering & Strengthening Ohio's People (ESOP), a counseling group with 10 offices in Ohio.

    "Last year was an anomaly, and not in a good way," he said.

    [Click here for home loan rates in your area.]

    In 2011, the "robo-signing" scandal, in which foreclosure documents were signed without properly reviewing individual cases, prompted banks to hold back on new foreclosures pending a settlement.

    Five major banks eventually struck that settlement with 49 U.S. states in February. Signs are growing the pace of foreclosures is picking up again, something housing experts predict will again weigh on home prices before any sustained recovery can occur.

    Mortgage servicing provider Lender Processing Services reported in early March that U.S. foreclosure starts jumped 28 percent in January.

    More conclusive national data is not yet available. But watchdog group, 4closurefraud.org which helped uncover the "robo-signing" scandal, says it has turned up evidence of a large rise in new foreclosures between March 1 and 24 by three big banks in Palm Beach County in Florida, one of the states hit hardest by the housing crash

    Although foreclosure starts were 50 percent or more lower than for the same period in 2010, those begun by Deutsche Bank were up 47 percent from 2011. Those of Wells Fargo's rose 68 percent and Bank of America's, including BAC Home Loans Servicing, jumped nearly seven-fold -- 251 starts versus 37 in the same period in 2011. Bank of America said it does not comment on data provided by other sources. Wells Fargo and Deutsche Bank did not comment.

    Housing experts say localized warning signs of a new wave of foreclosure are likely to be replicated across much of the United States.

    Online foreclosure marketplace RealtyTrac estimated that while foreclosures dropped slightly nationwide in February from January and from February 2011, they rose in 21 states and jumped sharply in cities like Tampa (64 percent), Chicago (43 percent) and Miami (53 percent).

    RealtyTrac CEO Brandon Moore said the "numbers point to a gradually rising foreclosure tide as some of the barriers that have been holding back foreclosures are removed."

    One big difference to the early years of the housing crisis, which was dominated by Americans saddled with the most toxic subprime products -- with high interest rates where banks asked for no money down or no proof of income -- is that today it's mostly Americans with ordinary mortgages whose ability to meet payment have been hit by the hard economic times.

    "The subprime stuff is long gone," said Michael Redman, founder of 4closurefraud.org. "Now the folks being affected are hardworking, everyday Americans struggling because of the economy."

    "HARD TO CATCH UP"

    Until December 2010, Daniel Burns, 52, had spent his working life in the trucking industry as a long-haul driver and manager. When daily loads at the small family business where he worked tailed off, he lost his job.

    Unable to cover his mortgage, Burns received a grant from a government fund using money repaid from the 2008 bank bailout. That grant is due to expire in early 2013 and Burns is holding out on hopeful comments from his former employer that he might get his job back if the economy recovers.

    "If things don't pick up, I will be out on the street," he said, staring from his living room window at two abandoned houses over the road in the middle-class Cleveland suburb of Garfield Heights, the noise of traffic from a nearby Interstate highway filling the street.

    Underscoring the uncertainty of his situation, Burns' cell phone rings and a pre-recorded message announces that his unemployment benefits are due to be cut off in April.

    A bit further up the shore of Lake Erie, Cristal Fell, who works night shifts entering data for a trucking company in Toledo, has fallen behind on her mortgage a second time because her ex-husband lost his job and her overtime was cut.

    "Once you get behind it's so hard to catch up," she said.

    Fell, a mother of four, hopes the economy will gather enough speed to help her avoid any risk of losing her home. Her ex-husband has found a new job and she is getting more overtime, so she hopes she can catch up on her mortgage by the fall.

    Burns and Fell are the new face of the U.S. housing crisis: Middle class, suburban or rural with a conventional 30-year fixed mortgage at a reasonable interest rate, but unemployed or underemployed. Although the national unemployment rate has fallen to 8.3 percent from its peak of 10 percent in October 2009, nearly 13 million Americans remain jobless, meaning many are struggling to keep up with their mortgage payments.

    Real estate company Zillow Inc says more than one in four American homeowners were "under water" or owed more than their homes were worth in the fourth quarter of 2011. The crisis has wiped out some $7 trillion in U.S. household wealth.

    "We're seeing more people coming through who have good loans with reasonable interest rates," said Ed Jacob, executive director of non-profit lender Neighborhood Housing Services of Chicago Inc, which provides foreclosure counseling. "But in many households only one person works now instead of two, or they had their hours cut."

    "The answer to the housing crisis now is job creation."

    EARLY SIGNS OF UPTICK?

    Zillow expects the resurgence in foreclosures this year, combined with excess inventory of unsold, bank-owned homes will contribute to a 3.7 percent national decline in prices before the market hits bottom in 2013 and stays there until 2016.

    "The hangover from this crisis will far outlast the party of the boom years," said Zillow chief economist Stan Humphries.

    Getting through the remaining foreclosures and dealing with the resulting flood of homes on the market in the wake of the bank settlement is a necessary part of the healing process for the U.S. housing market, he added.

    According to leading broker dealer Amherst Securities, some 9.5 million homes are still at risk of default and in February it said it expected to see the uptick in foreclosures start to hit in March and April.

    There is other evidence that many of the foreclosures that did not happen in 2011 will happen this year.

    A January report by the Neighborhood Economic Development Advocacy Project in New York found that in the first half of 2011 the number of 90-day pre-foreclosure notices in New York City outnumbered court foreclosure actions by a ratio of 14 to one, indicating that while proceedings were initiated against many homeowners, they were left incomplete.

    "Now the banks have a settlement, foreclosure numbers for 2012 are going to be high," said NEDAP co-director Josh Zinner.

    A recent survey by the California Reinvestment Coalition, an umbrella group of nearly 300 non-profit groups in the state, of member agencies found 75 percent of respondents expected increased demand for their foreclosure prevention services in 2012 but more than a third had to scale back services because of funding cuts.

    "Funding is a major concern given what our members expect for this year," said associate director Kevin Stein.

    All this has non-profits intensifying calls for the Federal Housing Finance Agency to drop its opposition to allowing the government-backed mortgage giants Fannie Mae and Freddie Mac it regulates to reduce principal for underwater homeowners.

    Principal reduction involves reducing the amount borrowers owe in order to make a loan modification affordable for struggling homeowners. Republicans and the FHFA oppose principal reduction because of the risk of "moral hazard"- that homeowners who do not need help will seek to abuse largesse and have their mortgages reduced too.

    ESOP in Ohio engages in "hits" on Chase branches -- they say Chase is the least accommodating major bank when it comes to working with struggling homeowners -- where they try to hand letters to bank mangers calling on chief executive Jamie Dimon to lobby FHFA head Edward DeMarco for principal reductions. A Chase spokeswoman said the bank has made "extensive efforts" to work with homeowners, helping 775,000 borrowers stay in their homes since early 2009, avoiding foreclosure "more than twice as often as we have had to foreclose." Housing groups like ESOP maintain, as they have throughout the housing crisis, that unless the FHFA embraces widespread principal reduction, many more under water borrowers face losing their homes.

    "Until banks engage in meaningful principal reduction as a matter of course," ESOP's Seifert said after a recent protest at a Chase branch in Cleveland, "this crisis will not end."

    (Reporting By Nick Carey; Editing by Martin Howell and William Schomberg; Desking by Andrew Hay)

    http://finance.yahoo.com/news/americans-brace-next-foreclosure-wave-210253522.html;_ylt=AqbuE6E9ol9HsgsWYGb4WqCs0NUE;_ylg=X3oDMTFib2ZnYzA2BHBzdGFpZAM1ZjAxMjc4Yi04MDNhLTM4MDMtOTc5OC03ZmM3OWJhYjRmN2Q-;_ylv=3

  • 'We Are Right Back Where We Were Two Years Ago' Foreclosure Crisis May Worsen As 2012 Goes On

    Posted Under: Market Conditions in Ohio, Home Selling in Ohio, Foreclosure in Ohio  |  April 5, 2012 7:36 AM  |  579 views  |  No comments

    Foreclosure Crisis May Worsen As 2012 Goes On

    Posted: 04/ 4/2012 4:52 pm Updated: 04/ 5/2012 8:19 am


    By Nick Carey
    GARFIELD HEIGHTS, Ohio, April 4 (Reuters) - Half a decade
    into the deepest U.S. housing crisis since the 1930s, many
    Americans are hoping the crisis is finally nearing its end.
    House sales are picking up across most of the country, the
    plunge in prices is slowing and attempts by lenders to claim
    back properties from struggling borrowers dropped by more than a
    third in 2011, hitting a four-year low.
    But a painful part two of the slump looks set to unfold:
    Many more U.S. homeowners face the prospect of losing their
    homes this year as banks pick up the pace of foreclosures.
    "We are right back where we were two years ago. I would put
    money on 2012 being a bigger year for foreclosures than 2010,"
    said Mark Seifert, executive director of Empowering &
    Strengthening Ohio's People (ESOP), a counseling group with 10
    offices in Ohio.
    "Last year was an anomaly, and not in a good way," he said.
    In 2011, the "robo-signing" scandal, in which foreclosure
    documents were signed without properly reviewing individual
    cases, prompted banks to hold back on new foreclosures pending a
    settlement.
    Five major banks eventually struck that settlement with 49
    U.S. states in February. Signs are growing the pace of
    foreclosures is picking up again, something housing experts
    predict will again weigh on home prices before any sustained
    recovery can occur.
    Mortgage servicing provider Lender Processing Services
    reported in early March that U.S. foreclosure starts jumped 28
    percent in January.
    More conclusive national data is not yet available. But
    watchdog group, 4closurefraud.org which helped uncover the
    "robo-signing" scandal, says it has turned up evidence of a
    large rise in new foreclosures between March 1 and 24 by three
    big banks in Palm Beach County in Florida, one of the states hit
    hardest by the housing crash
    Although foreclosure starts were 50 percent or more lower
    than for the same period in 2010, those begun by Deutsche Bank
    were up 47 percent from 2011. Those of Wells Fargo's rose 68
    percent and Bank of America's, including BAC Home Loans
    Servicing, jumped nearly seven-fold -- 251 starts versus 37 in
    the same period in 2011. Bank of America said it does not
    comment on data provided by other sources. Wells Fargo and
    Deutsche Bank did not comment.
    Housing experts say localized warning signs of a new wave of
    foreclosure are likely to be replicated across much of the
    United States.
    Online foreclosure marketplace RealtyTrac estimated that
    while foreclosures dropped slightly nationwide in February from
    January and from February 2011, they rose in 21 states and
    jumped sharply in cities like Tampa (64 percent), Chicago (43
    percent) and Miami (53 percent).
    RealtyTrac CEO Brandon Moore said the "numbers point to a
    gradually rising foreclosure tide as some of the barriers that
    have been holding back foreclosures are removed."
    One big difference to the early years of the housing crisis,
    which was dominated by Americans saddled with the most toxic
    subprime products -- with high interest rates where banks asked
    for no money down or no proof of income -- is that today it's
    mostly Americans with ordinary mortgages whose ability to meet
    payment have been hit by the hard economic times.
    "The subprime stuff is long gone," said Michael Redman,
    founder of 4closurefraud.org. "Now the folks being affected are
    hardworking, everyday Americans struggling because of the
    economy."

    "HARD TO CATCH UP"
    Until December 2010, Daniel Burns, 52, had spent his working
    life in the trucking industry as a long-haul driver and manager.
    When daily loads at the small family business where he worked
    tailed off, he lost his job.
    Unable to cover his mortgage, Burns received a grant from a
    government fund using money repaid from the 2008 bank bailout.
    That grant is due to expire in early 2013 and Burns is holding
    out on hopeful comments from his former employer that he might
    get his job back if the economy recovers.
    "If things don't pick up, I will be out on the street," he
    said, staring from his living room window at two abandoned
    houses over the road in the middle-class Cleveland suburb of
    Garfield Heights, the noise of traffic from a nearby Interstate
    highway filling the street.
    Underscoring the uncertainty of his situation, Burns' cell
    phone rings and a pre-recorded message announces that his
    unemployment benefits are due to be cut off in April.
    A bit further up the shore of Lake Erie, Cristal Fell, who
    works night shifts entering data for a trucking company in
    Toledo, has fallen behind on her mortgage a second time because
    her ex-husband lost his job and her overtime was cut.
    "Once you get behind it's so hard to catch up," she said.
    Fell, a mother of four, hopes the economy will gather enough
    speed to help her avoid any risk of losing her home. Her
    ex-husband has found a new job and she is getting more overtime,
    so she hopes she can catch up on her mortgage by the fall.
    Burns and Fell are the new face of the U.S. housing crisis:
    Middle class, suburban or rural with a conventional 30-year
    fixed mortgage at a reasonable interest rate, but unemployed or
    underemployed. Although the national unemployment rate has
    fallen to 8.3 percent from its peak of 10 percent in October
    2009, nearly 13 million Americans remain jobless, meaning many
    are struggling to keep up with their mortgage payments.
    Real estate company Zillow Inc says more than one in four
    American homeowners were "under water" or owed more than their
    homes were worth in the fourth quarter of 2011. The crisis has
    wiped out some $7 trillion in U.S. household wealth.
    "We're seeing more people coming through who have good loans
    with reasonable interest rates," said Ed Jacob, executive
    director of non-profit lender Neighborhood Housing Services of
    Chicago Inc, which provides foreclosure counseling. "But in many
    households only one person works now instead of two, or they had
    their hours cut."
    "The answer to the housing crisis now is job creation."

    EARLY SIGNS OF UPTICK?
    Zillow expects the resurgence in foreclosures this year,
    combined with excess inventory of unsold, bank-owned homes will
    contribute to a 3.7 percent national decline in prices before
    the market hits bottom in 2013 and stays there until 2016.
    "The hangover from this crisis will far outlast the party of
    the boom years," said Zillow chief economist Stan Humphries.
    Getting through the remaining foreclosures and dealing with
    the resulting flood of homes on the market in the wake of the
    bank settlement is a necessary part of the healing process for
    the U.S. housing market, he added.
    According to leading broker dealer Amherst Securities, some
    9.5 million homes are still at risk of default and in February
    it said it expected to see the uptick in foreclosures start to
    hit in March and April.
    There is other evidence that many of the foreclosures that
    did not happen in 2011 will happen this year.
    A January report by the Neighborhood Economic Development
    Advocacy Project in New York found that in the first half of
    2011 the number of 90-day pre-foreclosure notices in New York
    City outnumbered court foreclosure actions by a ratio of 14 to
    one, indicating that while proceedings were initiated against
    many homeowners, they were left incomplete.
    "Now the banks have a settlement, foreclosure numbers for
    2012 are going to be high," said NEDAP co-director Josh Zinner.
    A recent survey by the California Reinvestment Coalition, an
    umbrella group of nearly 300 non-profit groups in the state, of
    member agencies found 75 percent of respondents expected
    increased demand for their foreclosure prevention services in
    2012 but more than a third had to scale back services because of
    funding cuts.
    "Funding is a major concern given what our members expect
    for this year," said associate director Kevin Stein.
    All this has non-profits intensifying calls for the Federal
    Housing Finance Agency to drop its opposition to allowing the
    government-backed mortgage giants Fannie Mae and Freddie Mac it
    regulates to reduce principal for underwater homeowners.
    Principal reduction involves reducing the amount borrowers owe
    in order to make a loan modification affordable for struggling
    homeowners. Republicans and the FHFA oppose principal reduction
    because of the risk of "moral hazard"- that homeowners who do
    not need help will seek to abuse largesse and have their
    mortgages reduced too.
    ESOP in Ohio engages in "hits" on Chase branches -- they say
    Chase is the least accommodating major bank when it comes to
    working with struggling homeowners -- where they try to hand
    letters to bank mangers calling on chief executive Jamie Dimon
    to lobby FHFA head Edward DeMarco for principal reductions.
    A Chase spokeswoman said the bank has made "extensive efforts"
    to work with homeowners, helping 775,000 borrowers stay in their
    homes since early 2009, avoiding foreclosure "more than twice as
    often as we have had to foreclose."
    Housing groups like ESOP maintain, as they have throughout the
    housing crisis, that unless the FHFA embraces widespread
    principal reduction, many more under water borrowers face losing
    their homes.
    "Until banks engage in meaningful principal reduction as a
    matter of course," ESOP's Seifert said after a recent protest at
    a Chase branch in Cleveland, "this crisis will not end."

    http://www.huffingtonpost.com/2012/04/04/foreclosure-crisis-2012_n_1404100.html?ref=topbar
  • Banks Worsening Foreclosure Crisis By Overvaluing Homes: Study

    Posted Under: Market Conditions in Ohio, Home Selling in Ohio, Foreclosure in Ohio  |  March 21, 2012 2:15 PM  |  645 views  |  No comments

    Banks Worsening Foreclosure Crisis By Overvaluing Homes: Study

    The Huffington Post  |  By Alexander Eichler Posted: 03/16/2012 11:36 am Updated: 03/16/2012 11:36 am

    Bank Overvalue

    Banks might be indulging a bad habit that could be worsening the foreclosure crisis, according to recent research from economists at the Federal Reserve Bank of Cleveland.

    The economists, Thomas Fitzpatrick and Stephan Whitaker, did some analysis of the Ohio real estate market and found a disquieting trend. Banks seem to be over-valuing many of the homes they foreclose on, making it less likely that homeowners can get a loan modification and more likely that they'll end up losing their property.

    It's not clear how or why banks are getting an inflated idea of the value of so many properties -- especially since foreclosed homes tend to drag down real estate prices for the whole neighborhood -- but the trend seems to be real. Fitzpatrick and Whitaker note that at foreclosed-home auctions in the Cleveland area, banks routinely sell their properties for much less than what they paid to buy them from the sheriff, meaning banks are high-balling their estimates of what those homes are worth.

    If they weren't doing that, the economists write, then maybe they'd be more willing to extend loan modifications to Ohio homeowners who then wouldn't have to give up their houses.

    This isn't the first evidence that banks have made the foreclosure crisis more pronounced. The widespread practice of robo-signing -- banks moving forward with foreclosures based on forged or unread paperwork -- has significantly impeded the housing recovery. And additional signs have shown wrongful foreclosures continue to be a problem across the nation.

    Today, the foreclosure crisis remains a major source of economic distress in America, and the sheer volume of foreclosed properties is expected to get worse before it gets better, thanks to the recent $25 billion settlement between 49 states and five of the country's biggest banks.

    Meanwhile, as more and more people bail out of the housing market and flee to rental units, the nation's low-income earners -- many of whom never had the option of buying a house, and depend on affordable apartments for shelter -- are finding themselves priced out of places to live.

    Besides delaying a recovery in housing prices -- seen as a prerequisite for any broader economic turnaround -- the foreclosure epidemic has also been characterized as a public health crisis, with research linking the financial and psychological stress of foreclosure to widespread incidences of depression, anxiety and an inability to afford food and medicine.

    http://www.huffingtonpost.com/2012/03/16/banks-overvalue-home-foreclosures_n_1353347.html

  • Ending Land Speculation That Drives Blight: Change the System, Change the Players

    Posted Under: General Area in Ohio, Market Conditions in Ohio, Foreclosure in Ohio  |  March 8, 2012 7:16 PM  |  613 views  |  No comments

    Dan Kildee

    Dan Kildee

    Co-founder and president, Community Progress

    Ending Land Speculation That Drives Blight: Change the System, Change the Player

    Posted: 03/ 8/2012 12:05 pm
    While many housing and community activists have long intuited that well-financed "vacant property speculators" were wreaking havoc in their communities -- driving down prices, prolonging vacancies and spreading blight -- a new study by the Cleveland Fed both substantiates their suspicions and opens up the discussion about thoughtful solutions.

    The Cleveland Fed's study documents that the majority of vacant homes that are bought from private owners or at tax sales by individuals or small operators are eventually bought and their taxes paid. On the other hand, properties bought by "speculators" -- those who make a business of buying and flipping vacant homes -- much more frequently remain vacant, unmaintained and tax delinquent, causing distress and blight for neighbors and governments alike.

    In a study of vacant properties sold in Cuyahoga County between 2007 and 2010, the Fed found that only 15% of the properties bought by individuals remained vacant in 2010 -- but a full 31% of those properties bought by large-scale investors remained vacant. More distressing is the fact that while the delinquent taxes on properties bought by individuals almost always get paid, professional 'flippers' resolved tax delinquency on only 13% of their properties resolved their tax delinquency -- extending the period of time in which government loses revenue and houses stand vacant.

    While the 'evil-doers' may be the large land speculators, the Cleveland Fed points out that it is the system of property transfers itself that is fundamentally at fault and that must be fixed. Today, there is no "downside" or cost to large-scale speculation. In most locales -- and especially in very depressed housing markets -- so-called "investors" can purchase property for as little as a few hundred dollars and sell this property to a third party for hundreds or thousands of dollars more, in a sale that is recorded as legitimate by the relevant county -- without any requirement that the seller/speculator pay past due taxes or maintained the property to even minimum standards. In rare instances, the third party buyer who finds that he or she owes thousands of dollars in delinquent taxes actually pays up -- but all too often the buyer simply walks away. For speculators, it's a great system -- they have little risk, no responsibility and the potential of great reward.

    However, for those of us concerned with the well-being of our communities and the sustainability of our local governments, there is great risk and changing the system is a necessity. The Cleveland Fed suggests two paths of action -- both of which the Center for Community Progress has long championed. They call for changes in state laws that require payment of all delinquent taxes and liens BEFORE a property transfer can be completed and certified by the various County Recorders of Deed. This makes obvious sense -- it would encourage legitimate buyers and discourage quick-buck speculators, since they would have to pay up before getting paid off.

    The Fed also suggests creating and utilizing land banks -- locally managed entities to which property buyers or owners could relinquish properties that they cannot financially support -- ensuring that the property can then be positioned for productive reuse by a responsible party. The land bank in Cuyahoga County and the one I established in Genesee County Michigan already play that role, and have restored thousands of properties to productive use -- and up-to-date tax payments.

    In addition, I would counsel the replication of ordinances such as those recently passed in Illinois, both by the City of Chicago and the Cook County Board of Commissioners. These ordinances, like those in place in communities across the country, require that any purchaser, owner or servicer of a vacant property register that property and take responsibility for the property's maintenance, security, taxes and insurance -- creating a cost to the neglect that typically accompanies irresponsible speculation where there was none before.

    If we are going to make progress in stabilizing neighborhoods and rebuilding the housing market, we cannot allow reckless and often willfully irresponsible speculation to continue -- with short-term profiteers ditching their maintenance expenses on taxpayers while they reap the profits of a system that falls short in encouraging responsible re-use. By reforming the process of land sales for distressed properties, by holding owners and mortgagees accountable for the condition of their abandoned houses, and by creating land banks as an alternative to low-end speculation, America's cities and towns may not be able to stop greed and unethical speculation, but at least those who prey on weak markets won't have an ally in City Hall.

    Dan Kildee is President of the Center for Community Progress and the former Treasure of Genesee County Michigan where he initiated one of the country's first and most effective land banks.

    http://www.huffingtonpost.com/dan-kildee/ending-land-speculation-t_b_1332087.html?ref=business

 
Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer