Happy Holidays
Best wishes for a healthy and prosperous 2010.
Jeremiah
Greetings
Best wishes for a healthy and prosperous 2010.
Jeremiah
U.S. Foreclosures to Reach 3.9 Million in Second Record Year
Bloomberg.com - December 10, 2009
Foreclosure filings in the U.S. will reach a record for the second consecutive year with 3.9 million notices sent to homeowners in default, RealtyTrac Inc. said.
This year’s filings will surpass 2008’s total of 3.2 million as record unemployment and price erosion batter the housing market, the Irvine, California-based company said.
“We are a long way from a recovery,” John Quigley, economics professor at the University of California, Berkeley, said in an interview. “You can’t start to see improvement in the housing market until after unemployment peaks.”
Foreclosure filings exceeded 300,000 for the ninth straight month in November, RealtyTrac said today. A weak labor market and tight credit are “formidable headwinds” for the economy, Federal Reserve Chairman Ben S. Bernanke said in a Dec. 7 speech in Washington. The 7.2 million jobs lost since the recession began in December 2007 are the most of any postwar economic slump, Labor Department data show. Unemployment, at 10 percent last month, won’t peak until the first quarter, Quigley said.
Loan-modification programs and an expanded government tax credit for first-time homebuyers are helping slow the monthly pace of filings and “keeping a lid” on further foreclosures, James Saccacio, RealtyTrac’s chief executive officer, said in the statement.
November filings fell 15 percent from the July peak and dropped 8 percent from October, the seller of default data said. That was the fourth straight monthly drop.
Late Payments
A total of 306,627 properties received a default or auction notice or were seized by banks last month, or one in 417 U.S. households, and a similar number are expected for December, RealtyTrac said.
There have been 3.6 million filings from January through November, the most in RealtyTrac records dating to January 2005.
Three loans went bad for every one that improved in the first 10 months of this year, according to a Dec. 2 report from Lender Processing Services Inc.
The combined delinquency and foreclosure rate for all loans increased to 12.6 percent through October, the Jacksonville, Florida-based loan servicing and mortgage data company said.
Still, fewer than 1.5 million homeowners -- or less than half of those targeted -- were eligible as of last month for President Barack Obama’s Home Affordable Modification Program, Herb Allison, Treasury assistant secretary for financial stability, said in Dec. 8 congressional testimony.
Loan Modifications Fail
“Federal programs have not been successful and have done little about declining asset values,” Quigley said. “The probability that a renegotiated mortgage goes into subsequent default is substantially high.”
Nevada had the highest foreclosure rate for the 35th consecutive month, with one in 119 households receiving a filing in November. Total filings dropped 33 percent from both a year earlier and the previous month, to 9,295.
Florida ranked second, with filings for one in every 165 households. California was third, at one in 180, RealtyTrac said.
Arizona, Idaho, Michigan, Illinois, Utah, Maryland and New Jersey rounded out the 10 highest foreclosure rates.
California had the most filings with 73,995, up 22 percent from a year earlier. Foreclosure notices in the most populous state have fallen on a monthly basis since peaking in July, according to RealtyTrac.
Florida had 52,935 filings, up 8 percent from November 2008 and 2 percent from the previous month.
State Data
Illinois was third with 16,422 filings, more than double a year earlier. They fell 18 percent from a record high in October.
Michigan ranked fourth with 15,988, up 10 percent from a year earlier. Arizona, Texas, Ohio, Georgia, Nevada and New Jersey completed the 10 states with the most filings, RealtyTrac said.
Filings rose 65 percent from a year earlier to 9,227 in New Jersey. They dropped 3.7 percent to 2,114 in Connecticut, and jumped 69 percent to 4,401 in New York.
Three California cities had the highest foreclosure rates among metropolitan areas with populations of 200,000 or more. Merced led, with one in every 83 households there getting a notice, five times the national average. Stockton was second at one in 85, and Modesto was third at one in 87.
Cape Coral-Fort Myers, Florida, was fourth with one in 96 households receiving a notice, and Las Vegas was fifth at one in 102, according to RealtyTrac.
Riverside-San Bernardino and Bakersfield, both in California, ranked sixth and seventh; Orlando-Kissimmee, Florida, was eighth; Vallejo-Fairfield, California, ranked ninth; and Sacramento came in 10th, said RealtyTrac, which sells default data collected from more than 2,200 counties representing 90 percent of the U.S. population.
Foreclosure filings in the U.S. will reach a record for the second consecutive year with 3.9 million notices sent to homeowners in default, RealtyTrac Inc. said.
This year’s filings will surpass 2008’s total of 3.2 million as record unemployment and price erosion batter the housing market, the Irvine, California-based company said.
“We are a long way from a recovery,” John Quigley, economics professor at the University of California, Berkeley, said in an interview. “You can’t start to see improvement in the housing market until after unemployment peaks.”
Foreclosure filings exceeded 300,000 for the ninth straight month in November, RealtyTrac said today. A weak labor market and tight credit are “formidable headwinds” for the economy, Federal Reserve Chairman Ben S. Bernanke said in a Dec. 7 speech in Washington. The 7.2 million jobs lost since the recession began in December 2007 are the most of any postwar economic slump, Labor Department data show. Unemployment, at 10 percent last month, won’t peak until the first quarter, Quigley said.
Loan-modification programs and an expanded government tax credit for first-time homebuyers are helping slow the monthly pace of filings and “keeping a lid” on further foreclosures, James Saccacio, RealtyTrac’s chief executive officer, said in the statement.
November filings fell 15 percent from the July peak and dropped 8 percent from October, the seller of default data said. That was the fourth straight monthly drop.
Late Payments
A total of 306,627 properties received a default or auction notice or were seized by banks last month, or one in 417 U.S. households, and a similar number are expected for December, RealtyTrac said.
There have been 3.6 million filings from January through November, the most in RealtyTrac records dating to January 2005.
Three loans went bad for every one that improved in the first 10 months of this year, according to a Dec. 2 report from Lender Processing Services Inc.
The combined delinquency and foreclosure rate for all loans increased to 12.6 percent through October, the Jacksonville, Florida-based loan servicing and mortgage data company said.
Still, fewer than 1.5 million homeowners -- or less than half of those targeted -- were eligible as of last month for President Barack Obama’s Home Affordable Modification Program, Herb Allison, Treasury assistant secretary for financial stability, said in Dec. 8 congressional testimony.
Loan Modifications Fail
“Federal programs have not been successful and have done little about declining asset values,” Quigley said. “The probability that a renegotiated mortgage goes into subsequent default is substantially high.”
Nevada had the highest foreclosure rate for the 35th consecutive month, with one in 119 households receiving a filing in November. Total filings dropped 33 percent from both a year earlier and the previous month, to 9,295.
Florida ranked second, with filings for one in every 165 households. California was third, at one in 180, RealtyTrac said.
Arizona, Idaho, Michigan, Illinois, Utah, Maryland and New Jersey rounded out the 10 highest foreclosure rates.
California had the most filings with 73,995, up 22 percent from a year earlier. Foreclosure notices in the most populous state have fallen on a monthly basis since peaking in July, according to RealtyTrac.
Florida had 52,935 filings, up 8 percent from November 2008 and 2 percent from the previous month.
State Data
Illinois was third with 16,422 filings, more than double a year earlier. They fell 18 percent from a record high in October.
Michigan ranked fourth with 15,988, up 10 percent from a year earlier. Arizona, Texas, Ohio, Georgia, Nevada and New Jersey completed the 10 states with the most filings, RealtyTrac said.
Filings rose 65 percent from a year earlier to 9,227 in New Jersey. They dropped 3.7 percent to 2,114 in Connecticut, and jumped 69 percent to 4,401 in New York.
Three California cities had the highest foreclosure rates among metropolitan areas with populations of 200,000 or more. Merced led, with one in every 83 households there getting a notice, five times the national average. Stockton was second at one in 85, and Modesto was third at one in 87.
Cape Coral-Fort Myers, Florida, was fourth with one in 96 households receiving a notice, and Las Vegas was fifth at one in 102, according to RealtyTrac.
Riverside-San Bernardino and Bakersfield, both in California, ranked sixth and seventh; Orlando-Kissimmee, Florida, was eighth; Vallejo-Fairfield, California, ranked ninth; and Sacramento came in 10th, said RealtyTrac, which sells default data collected from more than 2,200 counties representing 90 percent of the U.S. population.
Treasury sets guidance to simplify "short sales"
NEW YORK (Reuters) - November 30, 2009
The U.S. Treasury on Monday set long-awaited guidance on a plan for mortgage companies to speed "short sales" of homes and other loan modification alternatives to stem a rising tide of foreclosures.
The Home Affordable Foreclosure Alternatives Program provides financial incentives and simplifies the procedures for completing short sales, a growing practice in which a lender agrees to accept the sale price of a home to pay off a mortgage even if the price falls short of the amount owed, according to an announcement on the Treasury's website.
Guidelines address barriers that have often sidelined short sales by setting limits on the time it takes a bank to approve an offer, freeing borrowers from debt and capping claims of subordinate lenders.
The incentives, first announced in May, expand on the government's Home Affordable Modification Program, known as HAMP, that has seen limited success in lowering payments for distressed homeowners. The Treasury earlier on Monday stepped up pressure on mortgage companies to make permanent the 650,000 trial modifications they have started.
"While HAMP program guidelines are intended to reach a broad range of at-risk borrowers, it is expected that servicers will encounter situations where they are unable to approve" or offer a modification, the Treasury said in its announcement.
Financial incentives for completing short sales or similar deed-in-lieu transactions -- in which the deed is simply transferred to the lender -- include a $1,000 payment to servicers, and a maximum of $1,000 to go to investors who sign off on payments to subordinate lien holders, the Treasury said. Borrowers would receive $1,500 in relocation expenses.
Short sales are favored by real estate agents and community groups over foreclosure because they can preserve the borrower's credit rating and leave the property in better condition than when a homeowner is evicted. While primary lenders typically realize steep losses, their recovery is typically far better than under foreclosure.
But short sales have been frustrating for borrowers and real estate agents, often hung up by negotiations with multiple lien holders and mortgage insurance companies. Real estate agents have complained that sales fall through as lenders bicker over the sales price, what they should receive from the proceeds, and whether the borrower will be held accountable for the debt in the future.
Among requirements, mortgage servicers have 10 days to approve or disapprove a request for short sale, and when done the transaction must fully release the borrower from the debt.
It also prohibits mortgage servicing companies from reducing real estate commissions on the sale, a practice that has dissuaded many agents from taking short sale listings.
In one of the most contentious issues gumming up negotiations between lenders, the guidance caps the aggregate proceeds to subordinate lien holders at $3,000.
Second lien holders in recent months have begun demanding more money from the first lender, seller, buyer or agent in exchange for releasing their claim, agents have said. Because primary lenders would face larger losses in a foreclosure, some subordinate lenders have felt empowered, the agents said.
The largest second-lien holders are Bank of America Corp, Wells Fargo & Co, JPMorgan Chase & Co and Citigroup Inc.
Second lien holders may proceed with a short sale outside of the Treasury program, if they felt the cap was too low, a Treasury official said in October.
"If there was a short sale program that didn't recognize the second lien holder position, it could have pretty damaging consequences for the industry," Sanjiv Das, chief executive officer of CitiMortgage, said in an interview last week.
The U.S. Treasury on Monday set long-awaited guidance on a plan for mortgage companies to speed "short sales" of homes and other loan modification alternatives to stem a rising tide of foreclosures.
The Home Affordable Foreclosure Alternatives Program provides financial incentives and simplifies the procedures for completing short sales, a growing practice in which a lender agrees to accept the sale price of a home to pay off a mortgage even if the price falls short of the amount owed, according to an announcement on the Treasury's website.
Guidelines address barriers that have often sidelined short sales by setting limits on the time it takes a bank to approve an offer, freeing borrowers from debt and capping claims of subordinate lenders.
The incentives, first announced in May, expand on the government's Home Affordable Modification Program, known as HAMP, that has seen limited success in lowering payments for distressed homeowners. The Treasury earlier on Monday stepped up pressure on mortgage companies to make permanent the 650,000 trial modifications they have started.
"While HAMP program guidelines are intended to reach a broad range of at-risk borrowers, it is expected that servicers will encounter situations where they are unable to approve" or offer a modification, the Treasury said in its announcement.
Financial incentives for completing short sales or similar deed-in-lieu transactions -- in which the deed is simply transferred to the lender -- include a $1,000 payment to servicers, and a maximum of $1,000 to go to investors who sign off on payments to subordinate lien holders, the Treasury said. Borrowers would receive $1,500 in relocation expenses.
Short sales are favored by real estate agents and community groups over foreclosure because they can preserve the borrower's credit rating and leave the property in better condition than when a homeowner is evicted. While primary lenders typically realize steep losses, their recovery is typically far better than under foreclosure.
But short sales have been frustrating for borrowers and real estate agents, often hung up by negotiations with multiple lien holders and mortgage insurance companies. Real estate agents have complained that sales fall through as lenders bicker over the sales price, what they should receive from the proceeds, and whether the borrower will be held accountable for the debt in the future.
Among requirements, mortgage servicers have 10 days to approve or disapprove a request for short sale, and when done the transaction must fully release the borrower from the debt.
It also prohibits mortgage servicing companies from reducing real estate commissions on the sale, a practice that has dissuaded many agents from taking short sale listings.
In one of the most contentious issues gumming up negotiations between lenders, the guidance caps the aggregate proceeds to subordinate lien holders at $3,000.
Second lien holders in recent months have begun demanding more money from the first lender, seller, buyer or agent in exchange for releasing their claim, agents have said. Because primary lenders would face larger losses in a foreclosure, some subordinate lenders have felt empowered, the agents said.
The largest second-lien holders are Bank of America Corp, Wells Fargo & Co, JPMorgan Chase & Co and Citigroup Inc.
Second lien holders may proceed with a short sale outside of the Treasury program, if they felt the cap was too low, a Treasury official said in October.
"If there was a short sale program that didn't recognize the second lien holder position, it could have pretty damaging consequences for the industry," Sanjiv Das, chief executive officer of CitiMortgage, said in an interview last week.
Market update & advice from our brokerage
Happy Holidays!
I hope you and your family had a great Thanksgiving. I think we are still eating leftovers at my home.
Currently, in San Diego county there are a total of 5,395 detached homes on the market which is 117 homes less than in October. 1,549 new escrows were opened last month compared to 1,854 the month prior and 2,424 homes went "contingent", meaning that they were likely short sales that have offers awaiting lender acceptance. This means that 3,973 detached homes went off the market due to contracts during November and that we have about a 3 week supply of available detached homes. This traditionally indicates a seller's market with prices on the rise. Much of this activity was in the lower price ranges due to the better financing options and the number of first time buyers entering the market. Things are more difficult for move-up buyers because of the difficulty with jumbo loans.
Today there are 2,458 attached (condo) properties on the market, up by 23 from last month. 898 new escrows opened compared to 965 the month before plus another 1,938 went contingent meaning that a total of 2,836 attached properties left the market due to contracts in the last month, giving us about a 3 week supply of active listings. This is also an indicator of a strong market with prices on the upswing, especially in the lower ranges.
Interest rates continue to be at extremely low levels, the home buyer tax credit has been extended and expanded, and there is good financing at the lower prices plus there has been little to indicate that the inventory level will increase any time soon as there is uncertainty about when the next group of foreclosures will hit the market and what price range they are expected to involve.
I hope you and your family had a great Thanksgiving. I think we are still eating leftovers at my home.
Currently, in San Diego county there are a total of 5,395 detached homes on the market which is 117 homes less than in October. 1,549 new escrows were opened last month compared to 1,854 the month prior and 2,424 homes went "contingent", meaning that they were likely short sales that have offers awaiting lender acceptance. This means that 3,973 detached homes went off the market due to contracts during November and that we have about a 3 week supply of available detached homes. This traditionally indicates a seller's market with prices on the rise. Much of this activity was in the lower price ranges due to the better financing options and the number of first time buyers entering the market. Things are more difficult for move-up buyers because of the difficulty with jumbo loans.
Today there are 2,458 attached (condo) properties on the market, up by 23 from last month. 898 new escrows opened compared to 965 the month before plus another 1,938 went contingent meaning that a total of 2,836 attached properties left the market due to contracts in the last month, giving us about a 3 week supply of active listings. This is also an indicator of a strong market with prices on the upswing, especially in the lower ranges.
Interest rates continue to be at extremely low levels, the home buyer tax credit has been extended and expanded, and there is good financing at the lower prices plus there has been little to indicate that the inventory level will increase any time soon as there is uncertainty about when the next group of foreclosures will hit the market and what price range they are expected to involve.
Subscribe to:
Posts (Atom)