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By John Walin | Broker in Libertyville, IL
  • GOOD NEWS...California Sees Fewer Homes Going into Foreclosure...

    Posted Under: Home Buying, Home Selling, Foreclosure  |  April 28, 2012 6:20 AM  |  820 views  |  No comments
    alifornia Sees Fewer Homes Going into and Getting Lost to Foreclosure

    04/25/2012 By: Esther Cho Printer Friendly View

    California may have some rough patches in it, but overall, with the worst part of the housing crises appearing to be over, the state is seeing fewer delinquencies and losing a smaller number of homes to foreclosure, according to a San Diego-based real estate data provider.


    A total of 56,258 Notices of Default (NODs) were recorded at county recorders offices in California during the first quarter of 2012, the lowest level since the second quarter of 2007 when 53,943 NODs were recorded, according to DataQuick.

    NOD filings peaked in the first quarter of 2009 at 135,431.

    The number of NODs also decreased by 8.5 percent from the previous quarter, and by 17.6 percent from the first quarter a year ago, according to DataQuick.

    “Foreclosure activity goes up when property values decline, and the worst of that decline was happening three years ago. Right now, property values in many areas appear flat,” said John Walsh, DataQuick president.

    NOD filings were more concentrated in zip codes with median sale prices below $200,000. Those areas saw 8.9 NODs filed for every 1,000 homes, while zip codes with a median sales price from $200,000 to $800,000 had 5.6 NODs filed per 1,000 homes. For zip codes with even higher sale prices – above $800,000 – 2.3 NODs were filed for every 1,000 homes.

    Fewer homes were lost to foreclosure, too, with the Trustees Deeds (TD) recorded totaling 30,261 during the first quarter, down 29.7 percent from the 43,052 TDs in the first quarter a year ago.

    This year’s first quarter also recorded the lowest level of TDs since 2007.

    “[R]emarkably, whole batches of presumed ‘toxic’ mortgages continue to perform,” said Walsh. “There’s no doubt that housing, especially negative equity, is one of the biggest drags on a struggling economy, but it’s not necessarily playing out the way some pundits thought.”

    TDs were also concentrated in more affordable neighborhoods. In areas where the sales price was below $200,000, 5.9 homes were lost for every 1,000 compared to zip codes with $800,000-plus median prices that had 0.8 foreclosures per 1,000 homes.

    The most active banks in the formal foreclosure process for the 2012 first quarter were Bank of America (10,419), Wells Fargo (7,577), Bank of New York (5,380), and JP Morgan (5,343).

    The trustees who pursued the highest number of defaults last quarter were ReconTrust Co (mostly for Bank of America and Bank of New York), Quality Loan Service Corp (Bank of America), NDEx West (Wells Fargo), and Cal-Western Reconveyance Corp (Wells Fargo).

    DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

    Other report highlights

    • When the lender filed a Notice of Default, homeowners in California were a median nine months behind on their primary mortgage.
    • The borrowers owed a median $17,897 on a median $319,418 mortgage.
    • Mortgages least likely to go into default were in Marin, San Francisco, and San Mateo counties.
    • Probability of going into default was highest in Tulare, Sacramento, and San Joaquin counties.
    • Out of 8.7 million homes and condos in California, 1.45 million have received a foreclosure proceeding over the past five years, but 835,000, or 9.6 percent, have actually been lost to foreclosure.
    • Foreclosure re-sales accounted for 33.5 percent of California resale activity
    • Foreclosure resales varied greatly by county, from 9 percent in San Francisco County to 55.2 percent in Yuba County.
    • Short sales made up an estimated 20.2 percent of the state’s resale activity.
    • It took about 8.5 months for foreclosed homes to make their way through the foreclosure process in the first quarter of 2012, compared to 9.7 months for the previous quarter.
    • At formal foreclosure auctions last quarter, an estimated 33.4 percent buyers were investors, up from 23.2 percent a year ago.
  • GOOD NEWS...California Sees Fewer Homes Going into Foreclosure...

    Posted Under: Home Buying, Home Selling, Foreclosure  |  April 28, 2012 6:20 AM  |  820 views  |  No comments
    alifornia Sees Fewer Homes Going into and Getting Lost to Foreclosure

     By: Esther Cho Printer Friendly View

    California may have some rough patches in it, but overall, with the worst part of the housing crises appearing to be over, the state is seeing fewer delinquencies and losing a smaller number of homes to foreclosure, according to a San Diego-based real estate data provider.


    A total of 56,258 Notices of Default (NODs) were recorded at county recorders offices in California during the first quarter of 2012, the lowest level since the second quarter of 2007 when 53,943 NODs were recorded, according to DataQuick.

    NOD filings peaked in the first quarter of 2009 at 135,431.

    The number of NODs also decreased by 8.5 percent from the previous quarter, and by 17.6 percent from the first quarter a year ago, according to DataQuick.

    “Foreclosure activity goes up when property values decline, and the worst of that decline was happening three years ago. Right now, property values in many areas appear flat,” said John Walsh, DataQuick president.

    NOD filings were more concentrated in zip codes with median sale prices below $200,000. Those areas saw 8.9 NODs filed for every 1,000 homes, while zip codes with a median sales price from $200,000 to $800,000 had 5.6 NODs filed per 1,000 homes. For zip codes with even higher sale prices – above $800,000 – 2.3 NODs were filed for every 1,000 homes.

    Fewer homes were lost to foreclosure, too, with the Trustees Deeds (TD) recorded totaling 30,261 during the first quarter, down 29.7 percent from the 43,052 TDs in the first quarter a year ago.

    This year’s first quarter also recorded the lowest level of TDs since 2007.

    “[R]emarkably, whole batches of presumed ‘toxic’ mortgages continue to perform,” said Walsh. “There’s no doubt that housing, especially negative equity, is one of the biggest drags on a struggling economy, but it’s not necessarily playing out the way some pundits thought.”

    TDs were also concentrated in more affordable neighborhoods. In areas where the sales price was below $200,000, 5.9 homes were lost for every 1,000 compared to zip codes with $800,000-plus median prices that had 0.8 foreclosures per 1,000 homes.

    The most active banks in the formal foreclosure process for the 2012 first quarter were Bank of America (10,419), Wells Fargo (7,577), Bank of New York (5,380), and JP Morgan (5,343).

    The trustees who pursued the highest number of defaults last quarter were ReconTrust Co (mostly for Bank of America and Bank of New York), Quality Loan Service Corp (Bank of America), NDEx West (Wells Fargo), and Cal-Western Reconveyance Corp (Wells Fargo).

    DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

    Other report highlights

    • When the lender filed a Notice of Default, homeowners in California were a median nine months behind on their primary mortgage.
    • The borrowers owed a median $17,897 on a median $319,418 mortgage.
    • Mortgages least likely to go into default were in Marin, San Francisco, and San Mateo counties.
    • Probability of going into default was highest in Tulare, Sacramento, and San Joaquin counties.
    • Out of 8.7 million homes and condos in California, 1.45 million have received a foreclosure proceeding over the past five years, but 835,000, or 9.6 percent, have actually been lost to foreclosure.
    • Foreclosure re-sales accounted for 33.5 percent of California resale activity
    • Foreclosure resales varied greatly by county, from 9 percent in San Francisco County to 55.2 percent in Yuba County.
    • Short sales made up an estimated 20.2 percent of the state’s resale activity.
    • It took about 8.5 months for foreclosed homes to make their way through the foreclosure process in the first quarter of 2012, compared to 9.7 months for the previous quarter.
    • At formal foreclosure auctions last quarter, an estimated 33.4 percent buyers were investors, up from 23.2 percent a year ago.
  • Foreclosure Activity Trends Mixed in Metros, According to RealtyTrac

    Posted Under: Home Buying, Home Selling, Foreclosure  |  April 28, 2012 6:18 AM  |  838 views  |  No comments
    Foreclosure Activity Trends Mixed in Metros, According to RealtyTrac

     By: Esther Cho Printer Friendly View

    While 114 out of 212 metropolitan areas with a population of 200,000 or more saw increases in foreclosure activity during the 2012 first quarter, activity was still down compared to the same quarter a year ago, according to RealtyTrac’s 2012 first quarter Metropolitan Foreclosure Market Report.

    Last year, 135 out of 212 metros areas saw increases in foreclosure activity in the first quarter.

    “First quarter metro foreclosure trends were a mixed bag,” said Brandon Moore, CEO of RealtyTrac. “While the majority of metro areas continued to show foreclosure activity down from a year ago, more than half reported increasing foreclosure activity from the previous quarter – an early sign that long-dormant foreclosures are coming out of hibernation in many local markets.”

    Michelle Schneider, a public relations consultant for RealtyTrac, further explained increases in activity are mostly due to the backlog of two main types of distressed loans pushing their way through: loans that are 90 days or more delinquent that are moving into foreclosure and properties in foreclosure that are getting auctioned off or foreclosed on.

    Foreclosure activity on an annual basis

    Out of the 50 largest metro areas, 33 saw a drop in foreclosure activity compared to a year ago, with Las Vegas (-61 percent) leading, followed by Seattle (-53 percent), Austin (-51 percent), Salt Lake City (-49 percent), and Buffalo (-47 percent).

    The metro areas that saw the largest increases in foreclosure activity among the 50 were Orlando (+52 percent); Indianapolis (+41 percent); Hartford, Connecticut (+38 percent); Miami (+37 percent); and Philadelphia (+33 percent).

    Foreclosure activity on a quarterly basis

    The largest metro areas out of the 50 with the highest quarterly decreases in foreclosure activity were Portland (-28 percent), Las Vegas (-26 percent), Providence (-24 percent), Salt Lake City (-22 percent), Boston (-21 percent), and San Jose (-21 percent).

    Out of the 50 largest metro areas, 26 increased in foreclosure activity on a quarterly basis, with Pittsburgh experiencing the highest increase at 49 percent, followed by Indianapolis (+37 percent); Philadelphia (+30 percent); New York (+24 percent); Raleigh, North Carolina (+23 percent); and Virginia Beach, Virginia (+22 percent).

    Foreclosure rates

    With a foreclosure filing on one in every 60 housing units, Stockton, California had the highest metropolitan foreclosure rate in the first quarter. The city’s foreclosure rate is three times the national average, and 3,912 of its properties had foreclosure filings in the first quarter, a 13 percent decrease from the previous quarter and a 19 percent decrease from the first quarter a year ago.

    Another California metro, Modesto, had the second highest foreclosure rate, and 10 more California areas were in the top 20 for having the highest foreclosure rates. The other cities were Riverside-San Bernardino (No. 3), Vallejo-Fairfield (No. 4), Merced (No. 5), Sacramento (No. 6), Bakersfield (No. 7), Visalia-Porterville (No. 10), Fresno (No. 12), Oxnard-Thousand Oaks (No. 14), Chico (No. 18), and Santa Rosa-Petaluma (No. 20).

    Reporting one in every 82 housing units with a foreclosure filing in the first quarter, the foreclosure rate, Las Vegas-Paradise was number eight. Despite the high ranking, Las Vegas saw a substantial drop in the number of properties with a foreclosure filing, down 26 percent compared the previous quarter and 61 percent compared to the first quarter a year ago.

    The Phoenix-Mesa-Scottsdale metro area had the ninth highest foreclosure rate for the quarter, with one in every 87 housing units with a foreclosure filing.

    Other metro areas with foreclosure rates in the top 20 category included Atlanta (No. 11); Miami (No. 13); Orlando (No. 15); Rockford, Illinois (No. 16); Chicago (No. 17); and Prescott, Arizona (No. 19).

    Foreclosure rates among the 50 largest metros

    Of the 50 largest metro areas, Riverside-San Bernardino posted the highest foreclosure rate, with one in every 62 housing units with a foreclosure filing during the quarter.

    Other metros with foreclosure rates that were more than twice the national average included Sacramento (one in 77 housing units), Las Vegas (one in 82 housing units), Phoenix (one in 87 housing units), Atlanta (one in 90 housing units), Miami (one in 95 housing units), Orlando (one in 101 housing units), and Chicago (one in 107 housing units).

    RealtyTrac is an online marketplace of foreclosure properties, with more than 2 million default, auction, and bank-owned listings from over 2,200 U.S. counties, along with detailed property, loan and home sales data.

  • Mortgage Delinquencies Head Further South...

    Posted Under: Home Buying, Foreclosure  |  April 28, 2012 6:16 AM  |  701 views  |  No comments

      By: Carrie Bay  

    Mortgage delinquencies fell back on both a monthly and annual basis in March, according to preliminary market data released by Lender Processing Services (LPS) for the month.


    The company’s estimation puts the national delinquency rate – measured as 30 or more days past due but not in foreclosure – at 7.09 percent.

    That’s down 6.3 percent from the previous month, an 8.8 percent drop from March 2011, and is the first time since

    2006 that the delinquency rate has come in lower by both measurements, according to LPS.

    The nationwide foreclosure rate stands at 4.14 percent by LPS’ assessment – up just barely one-tenths of a percentage point from February and down 1.6 percent from a year earlier.

    LPS reports that there are 2,060,000 properties that comprise the nation’s foreclosure inventory.

    Another 3,531,000 have missed at least one mortgage payment but haven’t made it as far as foreclosure yet. Of those, 1,643,000 are behind by three or more payments and will likely join the foreclosure inventory soon.

    Altogether, the numbers equate to 5,591,000 mortgaged properties that are in arrears.

    According to LPS’ report, the states with the highest percentage of non-current loans in March – including 30-plus days delinquent and in foreclosure – were Florida, Mississippi, Nevada, New Jersey, and Illinois.

    States with the lowest percentage of non-current loans for the month included Montana, Alaska, South Dakota, Wyoming, and North Dakota.

  • Great News! Home buying cheaper than renting...

    Posted Under: Home Buying, Home Selling, Foreclosure  |  March 21, 2012 5:37 AM  |  866 views  |  No comments

    ...Home buying much cheaper than renting

    By Les Christie @CNNMoney

      honolulu-hawaii.ju.top.jpg

      Honolulu is the nation's best market to be a renter rather than a buyer.

      NEW YORK (CNNMoney) -- It's the eternal question in real estate: Should I buy or rent?

      The answer has never been clearer: Buy.

      In 98 of the top 100 housing markets, buying a home is more affordable than renting, according to the online real estate company Trulia. Only Honolulu and San Francisco buck the trend.

      There are several reasons. Home prices are falling. Mortgage interest rates are at historically low levels. And rents are on the rise.

      Of course, many renters are not in a position to buy. For one, it's hard to get a mortgage these days, despite low rates. And paying rent can push them further away from being able to afford to buy.

      "Rising rents make it harder for people to save for a down payment, which is the biggest barrier to buying a home that aspiring homeowners face," Jed Kolko, Trulia's chief economist.

      The one number to watch for a housing recovery

      The nation's cheapest buyer's market is Detroit, where purchasing is only 3.7 times more expensive than renting.

      Other top five metro areas where buying is much better than renting are Oklahoma City, Dayton, Ohio,Warren, Mich. and Toledo, Ohio.

      Rankings like these, however, can obscure the factors that go into each decision.

      Housing markets, even within a single metro area, typically have local submarkets. Take New York City, for example. Renting in Manhattan is more affordable than buying. But in suburban Westchester County just miles to the north, buying is the more affordable option.

      The size of the home can also make a difference. In some markets, renting can be a better deal on larger homes, according to Trulia.

      In San Francisco, for example, studio and one-bedroom apartments sell for 13.1 times rent, while three bedrooms or larger sell for more than 18 times rent.

      Readers on mortgage settlement: This stinks

      The Trulia survey does not take into account home price trends, which are another factor for individuals choosing whether to buy or rent.

      "People will pay more for a home if they expect prices to rise and give them a better return on their investment," said Kolko.

      Those calculations are about to change, according to Ken H. Johnson, a professor of real estate at Florida International who has studied the buy-vs-rent question extensively. He believes home prices nationally have bottomed.

      "The ship has turned," he said. "Markets should slowly start to recover. Housing will return to its traditional role of a safety investment."

      Foreclosures: A rising tide ahead

      If so, that adds an incentive to buy. And investing in many of the most expensive markets may be even safer.

      Kolko pointed out that places like Honolulu, San Francisco and Boston have strong long-term growth prospects. They also have little physical space to grow, a factor that tends to keep prices strong.

      On the other hand, old areas that aren't growing much -- while cheap -- may not return much in the long run.

      "Buying is much cheaper than renting in slow-growing places with high vacancy rates and land to spare, like Detroit and Cleveland, where prices are unlikely to improve much in the future," he said. To top of page

       

    • ...Housing Crisis to End in 2012 as Banks Loosen Credit Standards

      Posted Under: Market Conditions, Home Buying, Home Selling  |  March 9, 2012 8:30 AM  |  873 views  |  No comments

      Housing Crisis to End in 2012 as Banks Loosen Credit Standards

      By: Krista Franks Brock Printer Friendly View  

      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 to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.

      Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.

      However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.

      Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.

      Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit 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, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.

      Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generate actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.

    • ...Short sale answers for 1st time buyers...

      Posted Under: Market Conditions, Home Buying, Financing  |  March 6, 2012 6:34 PM  |  893 views  |  No comments

      Short Sales: Answers for First-Time Buyers

      March 2, 2012|

      Sarah Stelmok is an Associate Broker with Champion Realty and a Short Sales Specialist from Fredericksburg, Virginia. She’s the author of SarahiouslySpeaking.com/ and travels the country training agents in the areas of Contracts, Fair Housing, Ethics, Short Sales and Foreclosures, Technology, Agency, and other real estate related courses.

         

      AgentNewsletter_MainPhoto_template

      Many people in the market today are first-time home buyers who would not have been able to buy when home prices were higher. Enticed both by lower prices and bank promotions, these eager hopefuls are have taken the signs of deals as the best chance to make their first real estate move  .

      While all home buyers need help with the short sale process, it’s especially challenging to address the needs and concerns of a first-time home buyer who has decided a short sale is the home for them. Here’s how to get answers to first-time home buyers’ top three questions about short sales.

      1. How long does it take for a bank to approve a short sale?

      This is the million-dollar question. While it takes an average of three to six months, the timeline – and the process – vary quite a bit from one bank to another.

      Short sale approval timelines depend on the bank (some just take longer than others). While each bank has different short sale guidelines, the short sale has to make sense to the bank. The more sense the short sale offer makes to the bank, the faster the approval process.

      Here are some things that slow down the process by several weeks or more – these usually involve more people or more factors:

      • Multiple liens on the property
      • A third party negotiating the short sale on behalf of a seller. Some states allow third parties to do this, for a fee; some states, like Virginia, limit this to real estate licensees, attorneys, and employees of attorneys.  
      • Private Mortgage Insurance (PMI) on the property
      • Additional investors

      Action: To make an accurate prediction about the short sale timeline for a particular property, research the bank’s general timelines, the property’s liens, and whether there is PMI before writing the offer.

      2. Will the bank make repairs to the property?

      The short answer is, probably not.

      Here’s why:

      • The bank does not have possession of the property and has no authority to make repairs on behalf of the seller.
      • Many short-sale sellers do not have the financial means to make repairs.
      • Many banks require the short sale to be sold strictly “as-is” and do not allow the seller to pay for any repairs.

      Why wouldn’t a bank allow the seller to make repairs? your buyer may ask. A short sale is a sticky situation for a bank, and that the bank wants to avoid potential liability. For example, if the bank allowed the seller to make repairs and the repairs proved to be faulty, the buyer might potentially hold the bank liable, since the seller doesn’t have money (which is how the short-sale situation came about in the first place).

      Action: Find out how the bank and the seller feel about making possible repairs. A short-sale buyer needs to understand that the home will most likely be sold strictly “as-is” and all repairs will be at their expense.

      3. How do other types of debt affect the short sale outcome?

      Many short-sale sellers are more than just “house-poor.” Many have additional debts that place a cloud on title. These include tax liens – income and property, medical liens, mechanic’s liens, and child support judgments.

      Depending on your state, some creditors can try to collect debt by going to civil court and getting a judgment lien placed on the property against the homeowner. These liens must be cleared before the short sale transaction can be closed.

      • Surprisingly, tax liens are probably the easiest to clear off the title. The IRS has several avenues to collect back taxes, and doesn’t want to become a real estate holding company. Removing a tax lien can take up to 120 days, so it is imperative that this process is started well in advance of the short sale.
      • Medical liens can usually be negotiated and a payment plan worked out. However, this is a time-consuming process and needs to be started as soon as possible.
      • Mechanic’s liens are a little harder to get removed. There is not much recourse for tradespeople and bad debts.
      • Child support judgments are also difficult to remove because they usually involve government agencies.

      In short, additional debts can tie up the short sale process.

      Action: Make sure to ask the listing agent if a preliminary title search has been performed on the property so you can advise your buyer about possible obstacles.

      The more information you can offer your first-time home buyer, the more confident they can be about the transaction. The more confident they are about the transaction, the more likely they will see the transaction through to the closing table.


       

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