Foreclosure Real Estate

One Third of Homeowners Underwater, 9 Out of 10 Current

Ron & Sandy Wose — Fri, 25 May 2012 17:32:00 GMT

According to Zillow's Negative Equity Report released Thursday about 15.7 million U.S. homeowners were underwater in the first quarter of 2012. This translates to about one-third, or 31.4 percent, of homeowners with a mortgage, an increase from 31.1 percent in the previous quarter and a decrease from 32.4 percent a year ago.

Yet, most underwater homeowners are current on their mortgages, with nine in 10 continuing to make their payments on time. Also, just 10.1 percent of underwater homeowners are more than 90 days delinquent, Zillow reported.

“While it was disappointing to see negative equity numbers remain so high, it is important to note that negative equity remains only a paper loss for the vast majority of underwater homeowners,” said Zillow Chief Economist Stan Humphries. “As home values slowly increase and these homeowners continue to pay down their principal, they will surface again.”

While negative equity is never beneficial for homeowners, a large percentage of underwater borrowers are at least wading in shallow waters. Nearly 40 percent of underwater homeowners owe between 1 and 20 percent more than their home is worth, and another 21 percent owe between 21 and 40 percent more than their home’s value.

However, when looking at the total amount of negative equity that exists when combining all underwater homeowners, the number is $1.2 trillion. Through the $25 billion multistate settlement, $10 billion was allotted to reduce principal for underwater homeowners, an amount analysts have said is not enough to make a dramatic impact on recovery.

Additionally, 2.4 million homeowners with mortgages owe more than double what their home is worth. In Las Vegas, nearly 90,000 homeowners owe double their home’s value.

On a state level, Nevada has the highest percentage of negative equity, with 66.9 percent of all homeowners with mortgages underwater. Other states with high percentages include Arizona (52.3 percent), Georgia (46.8 percent), Florida (46.3 percent) and Michigan (41.7 percent).

The metro areas with the the highest percentage of homeowners with underwater mortgages were Las Vegas (79 percent), Phoenix (55.5 percent), Atlanta (55.2 percent), Orlando (53.9 percent), and Riverside, California (53.4 percent).

The metro areas with the lowest percentage of homeowners dealing with negative equity were Pittsburgh (16.7 percent), New York (21.3 percent), Boston (22 percent), San Jose (22.7 percent), and Philadelphia (25 percent).

Zillow also included an interactive map of the data organized by counties.

The Zillow Negative Equity Report looks at current outstanding loan amounts for individual owner-occupied homes and compares them to those homes’ current estimated values. Loan data are provided by TransUnion. According to Zillow, this is the only report that uses current outstanding loan balances on all mortgages when calculating negative equity, as opposed to basing outstanding loan balances on the most recent loan on a property, such as the original loan amount at the time of purchase or refinance.

Home Prices Show Strongest Gain in 6 Years

Ron & Sandy Wose — Wed, 23 May 2012 21:30:00 GMT

According to data from the National Association of Realtors, existing home sales rose to 4.62 million in April from March's 4.47 million. Economists had forecast the April sales pace would be 4.66 million.

The median price of an existing home climbed 10.1 percent to $177,400 from $161,100 in April 2011, the strongest year-to-year gain since January 2006. The median price in April reached its highest level since July 2010 when it was $182,100. The inventory of homes for sale in April rose to 2.54 million, the highest level since last November, bringing the months’ supply of homes on the market to 6.6. The 10.0 percent yearly gain in the sales rate was the strongest since October when sales were up 14.0 percent year-over-year.

Distressed homes – foreclosures and short sales sold at deep discounts – accounted for 28 percent of April sales (17 percent were foreclosures and 11 percent were short sales), down from 29 percent in March and 37 percent in April 2011, the NAR said. Foreclosures sold for an average discount of 21 percent below market value in April (compared with an average discount of 19 percent in March), while short sales were discounted 14 percent in April compared with 16 percent in March.

The months’ supply of existing homes for sale remains well below the July 2010 cyclical peak of 12.4 which had been the highest level since 1982. Inventories as tracked by theNAR are 20.3 percent below their year ago level. However, anecdotal evidence suggests there is still a large “shadow” inventory of homes available for sale, especially bank-owned properties. Regionally, existing-home sales rose in April in every region of the country led by a 5.1 percent month-to-month increase in the Northeast where sales were up19.2 percent over April 2011. Sales rose 4.4 percent over March in the West (a 7.3 percent year-year gain), 3.5 percent in the South (6.5 percent year-year) and 1.0 percent in the Midwest (14.4 percent year over year).

The median price of an existing home rose month-to-month and year-to-year in all four regions. At $256,600, the median price of an existing home reached its highest level since August 2010. The median price of an existing home in the South rose to $153,400, the highest level since July 2010 and the median price of an existing home in the West rose to $221,700, also the highest since July 2010. The year-to-year price gain in the West, 15.9 percent, was the strongest since November 2005. The year-to-year price increase in the Northeast was the first since last June.

Bank of America to offer $2500 to $30,000 relocation assistance

Ron & Sandy Wose — Thu, 17 May 2012 18:42:00 GMT

Bank of America has launched a nationwide program to help prevent foreclosures. They are issuing from $2500 to $30,000 in relocation assistance to qualifying deliquent mortgage customers that complete a Short Sale before September 26, 2013. To qualify for the enhanced relocation assistance payment under the new program, the seller must work proactively with the bank and the short sale must be initiated by the end of this year and close by September 26, 2013. The amount of assistance provided will be determined on a case by case basis using a calculation that includes the value of the home, amount owed and other considerations. Initially, the program will be offered on mortgages that are owned and serviced by Bank of America.

Mortgage Rates hit another Low!

Ron & Sandy Wose — Thu, 17 May 2012 17:58:00 GMT

According to data from Freddie Mac, the average fixed rate 30-year mortgage fell to 3.79% this week. That's down from 3.83% the week prior, and marks the third straight week of fresh lows. The 15-year rate edged just slightly lower to 3.04%, from 3.05%, also a new record low. The low rates come amid signs of improvement in housing -- declining foreclosures and delinquencies, and increases to housing starts and the NAHB housing index -- and would be a nice touch for those looking to refinance.

Historical $25B Settlement Approved by Federal Judge

Ron & Sandy Wose — Fri, 06 Apr 2012 18:05:00 GMT

The $25 billion settlement received approval from a federal judge Wednesday, but the announcement was not made public until Thursday, according to a Reuters article published Thursday evening. U.S. District Judge Rosemary Collyer approved the national, historical settlement, which was brought on by federal officials and 49 state attorneys general against the top five largest services – Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, and Ally Financial.

The investigations involved issues with foreclosure abuses and servicing problems such as robo-signing, lost paperwork, and problematic modifications. The settlement was in federal court in March, and the agreement was in February after more than a year of negotiations. Oklahoma was the only state to opt out of the agreement, with the states Attorney General Scott Pruitt deciding to seek out a separate settlement leading to $18.6 million. Pruitt said in a statement that the settlement he sought would provide for Oklahomans who were victims of misconduct while not exceeding the appropriate role and authority of state attorneys general.

Of the $25 billion, $20 billion in relief will be designated to help homeowners through principal reduction, refinancing for underwater homes, principal forbearance for unemployed borrowers, short sales assistance, and additional benefits for service members. An additional $5 billion will go to government officials. The settlement will also require new servicing standards for foreclosure prevention. Aside from banning practices such as robo-signing, servicers will no longer be able to foreclose on a borrower being considered for a loan modification and are required to assign a single point of contact for borrowers.

Fannie Mae: Market Will Take Five More Years to Adjust

Ron & Sandy Wose — Tue, 06 Dec 2011 22:11:00 GMT

“We are five years through a 10-year adjustment process,” said Fannie Mae chief economist Doug Duncan at the Five Star MPact Mortgage Conference and Expo Tuesday morning.

Dodd-Frank has 300 rules that must be implemented in the market. Half of these have been implemented, and the second half will be enacted over the next couple years.

The secondary market will not start to see regulatory changes until these rules are set in place, and it will take a couple years to implement these changes as well.

In the upcoming year, the economy will see a 1.5 percent growth increase. However, this will not significantly affect employment, according to Duncan.

While the market will recover, it will take time to adjust to new regulations.

Every part of the mortgage market is directly affected by policy right now, Duncan said. With constantly changing policy, private capital holders cannot determine market risk and will not enter the market.

Private capital will remain on the sidelines until there is stability in policy, Duncan said.

The economy has already begun to recover, but people are not seeing the benefits of this recovery yet.

Output is back to pre-crisis levels, but the economy is functioning with 7 million fewer employees than it did prior to the crisis. Those who are employed have experienced decreases in benefits, hours, and wages.

The good news, according to Duncan, is that once we get through the next five years, “real estate is a good place to be.”

The United States, he says, is one of four countries that will see growth in its labor force in the next several years.

While some have worried that the aging Baby Boomer generation will leave a gap in the labor force as they retire, Duncan said immigrants will fill this gap.

And while, homeownership rates have fallen among the younger demographic in recent years, it remains strong among upper age groups.

The trend of homeownership is being delayed not diminished, according to Duncan.

People are staying in college longer, entering the workforce later, delaying marriage, and putting off having children. However, this is countered by improving health, which leads to longer life spans.

Homeowners will purchase homes later but will live in them longer into old age.

The biggest problem for the housing market right now is excess inventory, especially among distressed homes, according to Duncan in his keynote address at MPact.

Newly constructed homes for sale total about 60,000 right now, according to Duncan. He points out that this rate has not been this low since World War II when the population was half of what it is now.

On the other hand, there are about 4.5 million delinquent homes, one-fourth of which are vacant, Duncan says.

Regulations like HARP have been put in place to help homeowners, but this program in particular “ignores some of the reality facing homeowners ,” Duncan says.

A refinance on a 30-year mortgage generally extends a mortgage out again by 30 years. For underwater homeowners trying to get out of their mortgage, this extension does not appear as a relief, Duncan says.

Policy makers should attempt to address current problems in the market but should not over-extend under unrealistic attempts to address the market indefinitely.

This is not the first or the last time we will see a boom and bust in the market, Duncan says.

(Note: The Five Star Institute is the parent company of DSNews.com and DS News magazine.)

Two California Investors Plead Guilty to Bid Rigging

Ron & Sandy Wose — Tue, 11 Oct 2011 18:23:00 GMT

Two real estate investors are pleading guilty to mail fraud and bid rigging at public foreclosure auctions in Northern California, according to the Department of Justice.

Eric Larsen, a San Leandro resident, and Timothy Powers, an Alamo resident, conspired with others to quash competition for some properties at foreclosure auctions in Alameda and Contra Costa counties.

Larsen, Powers, and others agreed not to bid against each other and designated winning bidders for specific properties prior to the auctions. They also paid others not to bid competitively.

The duo admitted to committing mail fraud by using mail to organize their own private auctions open only to co-conspirators.

The DOJ is charging Powers with participating in auction conspiracies in Contra County from about May 2009 to December 2010, and Larson faces charges for conspiracy in Alameda Country from February 2009 to January 2010.

Proceeds from foreclosure auctions repay banks for their losses due to the defaulted loans, and when the auction price exceeds the mortgage debt, the homeowner receives the remainder.

While Larson’s and Powers’ conspiracies diverted money from banks and homeowners, they also led to misleading records of the total purchase price of the properties.

The charges brought against Larsen and Powers are the result of an interagency effort between the FBI and the Antitrust Division to investigate fraud and bid rigging at real estate foreclosure auctions in Northern California.

“The FBI and the Antitrust Division are partners in the fight to bring to justice those who engage in fraudulent anticompetitive practices at foreclosure auctions,” said FBIspecial agent in charge Stephanie Douglas. “We are committed to holding those individuals accountable for the damage they have done to the real estate market and to unsuspecting victims.”

Thus far, 10 individuals have pled guilty to charges brought forth by the FBI and Antitrust Division’s investigation.

“The Antitrust Division will vigorously pursue fraudulent schemes that eliminate competition from the marketplace and cause financial harm to victims,” said Sharis A. Pozen, acting assistant attorney general in charge of the Department of Justice’s Antitrust Division.

“The collusion taking place at these auctions preyed on the misfortune caused by the unprecedented rate of foreclosures and lined the pockets of colluding real estate investors with funds that otherwise would have gone to lenders and, at times, homeowners,” Pozen stated.

Market Will Not See Bottom Until at Least 2012

Ron & Sandy Wose — Tue, 11 Oct 2011 18:18:00 GMT

According to Zillows latest Real Estate Market Report released on Tuesday we won't see the bottom until next year.

“At this point, we maintain the expectation that a definitive bottom will not occur until 2012 at the earliest,” Humphries stated. With a 0.1 percent monthly increase, August home values posted a 4.5 percent decrease year-over-year, according to Zillow. Home values are currently 28.3 percent below their June 2006 peak. “Today, the Zillow Real Estate Market Report reveals a market in which home value trends didn’t weaken as much as we feared a month ago,” Humphries stated. “We do remain concerned, however, about the impact that recent economic turmoil and renewed fears of another recession will have on September home sales and home value trends,” Humphries stated. For the month of August, the foreclosure liquidation rate – the number of loans lost to banks – was 9.2 out of 10,000 homes. This rate remains lower than rates recorded before foreclosures slowed as a result of robo-signing lawsuits. For example, in October 2010, the rate was 10.9 out of every 10,000 homes, according to Zillow.

“We believe that both foreclosure re-sales and foreclosure liquidation rates are suppressed currently and that this constraint is improving the supply-demand imbalance in many markets, but doing so at the expense of longer or deeper negative trends in the future,” Humphries stated.

Some of the hardest hit areas continued to maintain high foreclosure liquidation rates. Most notably, in Las Vegas and Phoenix more than 30 out of every 10,000 homes were liquidated in August, according to Zillow.

“Due to the robo-signing controversy, the pace of foreclosure liquidations has been slower than it would be otherwise, which is impacting home value trends positively,” Humphries noted. "Eventually the pace will pick up again, putting more bank-owned homes into local markets and putting additional downward pressure on prices,” Humphries added. He continued: “We remain encouraged about the organic stabilization in home values that we have been seeing absent the federal home buyer tax credits, but we remain concerned about the impact that recent economic turmoil and continued weak economic indicators will have on future home sales and home value trends.”

Of the 157 metropolitan statistical areas (MSA) Zillow surveys in its Home Value Index, 68 experienced increases in value, while 74 experienced declines in value in August. Home values in 15 MSAs remained constant over the month.

Detroit has now posted five consecutive months of value appreciation, while another hard-hit area, Ft. Myers, Florida, has recorded nine consecutive months of increases. Detroit’s home values rose 0.55 percent from July to August, while Ft. Myers’ home values rose 0.7 percent.

“There is no change in our assessment of the two biggest long-term factors affecting home value trends: negative equity and unemployment,” Humphries states. Therefore, he concludes, “Nothing we have seen so far causes us to change our expectation that we won’t see a definitive bottom until 2012 at the earliest.”

Google invests $128 Million in Affordable Housing

Ron & Sandy Wose — Thu, 29 Sep 2011 17:47:00 GMT

Google has the search, mobile, and advertising markets covered. Now it's branching out once again, this time into low-income housing developments.

The Boston Globe reported today that Google has invested $28 million to build 240 housing units at the Charlesview Residences in Allston, a Boston neighborhood. According to the Globe, the Charlesview is one of the country's largest low-income housing developments. Charlesview currently has 213 "one to four bedroom homes," the property's owner, Peabody Properties, says on the complex's Web site. Speaking to the Globe in an interview, Axel Martinez, Google's assistant treasurer, said that the search giant's decision to invest in the units has to do with its desire to help the community--and receive financial benefit. "We want to be responsible corporate citizens, and that's what drove us to invest, but the returns are also quite good considering the risk," Martinez told the Globe. "Charlesview is one of the places where we were able to add value, when in the past projects like that wouldn't have gotten done."

This isn't the first time that Google has turned to low-income housing developments to invest its cash. In January, The New York Times reported that Google invested an undisclosed sum in the Melbourne Apartments complex in Des Moines, Iowa. Those apartments are offered for $775 a month, but are restricted to low-income earners. According to the Times, a family of five cannot make more than $47,460 a year to qualify to live in the apartments.

Although it might seem rather odd that Google would want to invest so much cash in real estate, one of the key drivers for doing so is to reduce its corporate tax liability. Each year, the U.S. government gives out billions of dollars in low-income tax credits to investors that put up the funds to build living space. So the more a company invests in the low-income housing, the more tax credits available to it.

As the Globe points out, Google isn't the only company to invest in housing to reduce its tax liability. In Massachusetts alone, a host of companies, including Sherwin-Williams and Berkshire Hathaway, have also invested in low-income housing. On the tech side, Apple has offered up some cash for investment, as well.

Wells Fargo Increases Home Retention Efforts

Ron & Sandy Wose — Thu, 29 Sep 2011 17:28:00 GMT

Wells Fargo & Company says it will increase its commitment to credit counseling nonprofits by $5.4 million to a total of $12.4 million in 2011 – a 35 percent increase over the $9.2 million in 2010 – for national and local credit counseling agencies.

“At Wells Fargo, we share the desire of many non-profit agencies to help as many Americans as possible achieve and sustain the dream of homeownership,” said Jon R. Campbell, EVP and head of Wells Fargo’s Social Responsibility Group. “Yet public funding for credit counseling is becoming more scarce, while considerable demand remains.”

The $5.4 million in new commitments from the San Francisco-based lender this year will be provided in the form of grant money directly to nonprofit agencies and support foreclosure prevention counseling services and training.

Grants totaling $1.25 million will be awarded in $250,000 sums to each of five nonprofits including: Alliance for Stabilizing our Communities, Housing Partnership Network, National Community Reinvestment Coalition, HomeFree-USA, and National Foundation for Credit Counseling, Inc.

Another $3 million will be given to NeighborWorks America to support “train-the-trainer” scholarships for local counseling agencies to attend industry counseling standards training.

In addition, $1.2 million of the new funding will go to approved housing agencies to help extend home preservation services through face-to-face credit coun-

seling and mortgage payment assistance. Through this program, counselors can transmit the necessary documents for customers’ mortgage modifications through a Web-enabled portal.

“At a time when our country is still working through the effects of a historic downturn in the housing markets and high unemployment, Wells Fargo believes it’s critical to continue to support the work of these non-profit agencies,” said Mary Coffin, EVP of Wells Fargo Home Mortgage Servicing. “Experience has shown us that their coaching and counseling can have a dramatic impact on helping individuals and families become more successful homeowners through better management of their finances.”

On April 14, federal government officials voted to discontinue $88 million of HUD grants to housing counselors. This money enabled counseling agencies to offer their services free of charge or for a small fee.

In 2010, HUD-approved counseling agencies provided services to more than 2.1 million clients, and achieved $29 billion in measurable economic benefits on an investment of $75 million, according to HUD data cited by the National Council of La Raza.

“We applaud Wells Fargo for demonstrating their commitment to the tens of thousands of families that rely on housing counselors to help them navigate a complex housing market,” said Janet Murguía, president and CEOof the National Council of La Raza.

“Research has shown that the objective advice housing counselors offer to struggling homeowners and first-time buyers has proven results for families and lenders alike,” Murguía added.

Marc H. Morial, president and CEO of the National Urban League, also recognized Wells Fargo’s expanded commitment to credit counseling providers.

“As the dialogue and discourse continues to disproportionately center on the well being and vitality of Wall Street, Wells Fargo is to be commended for its support of evidenced-based solutions for Main Street,” Morial said. “We believe their leadership on this issue can have a catalytic effect on all sectors to do more to support counseling services throughout this period of government cut backs and economic uncertainty.”

West Coast Foreclosures Counterintuitive After Robo-Signing Fixes

Ron & Sandy Wose — Wed, 18 May 2011 18:23:00 GMT

Foreclosure activity slowed in April in states along the country’s West Coast, but a local firm that tracks every pre-foreclosure notice, foreclosure auction, and foreclosure sale in the area is having trouble making sense of what it says is an unexpected trend.

According to market analysis released Tuesday by Discovery Bay, California-based ForeclosureRadar, foreclosure filings last month were down in Arizona, California, Nevada, and Washington, with Oregon being the sole exception where filings were up.

In fact, filings in California dropped to levels not seen since late 2008, when intervention by the state government to give homeowners in default more time to explore alternatives to foreclosure caused a massive drop in activity.

The company says foreclosure sales saw similar declines throughout its five-state coverage area, except in Washington. Notably, cancellations were up significantly across the board, leaving fewer properties scheduled for trustee sale.

“The drop in filings, and the rise in cancellations, is surprising,” said Sean O’Toole, CEO and founder of ForeclosureRadar. “Banks have had time to resolve robo-signing issues, so we should be seeing exactly the opposite results, with lenders starting to catch up from recent delays.”

In Arizona, notice of trustee sale filings were down 27.9 percent in April from the prior month, falling to their lowest point since ForeclosureRadar began tracking Arizona activity in August 2009. Trustee sale notices last month were 41.5 percent below April 2010.

Arizona saw a similar dip in foreclosure sales, with a 22.2 percent drop in homes that went back to banks as REOs

and a 15.4 percent decline in sales to third parties month-over-month. Cancellations rose 18.8 percent from March, which together with the drop in filings led to 10.6 percent fewer properties scheduled for foreclosure sale.

Foreclosure filings in California last month dropped to their lowest level in over two years. Notice of default filings were down 25.8 percent from March, while notices of trustee sale fell 10.9 percent. Filings in both these stages of the process were down around 30 percent from a year earlier.

Foreclosure sales cancelled in the Golden State rose 27 percent from March. Activity on the courthouse steps slowed from the prior month, with 17.2 percent fewer REOs taken back by lenders and a 15.8 percent drop in properties purchased by third party investors. At the same time, the average time-to-foreclose in California continued to climb, increasing 3.3 percent to 312 days.

Nevada’s default notice filings decreased 17.8 percent in April from the prior month, here too falling to the lowest point since ForeclosureRadar began tracking the state in August 2009. Notice of trustee sale filings were down 23.7 percent.

ForeclosureRadar says activity on Nevada courthouse steps was mixed, with sales back to the bank down by 2.7 percent, but sales to third parties up 6.9 percent from March and 81 percent from April 2010. Cancellations were 14 percent higher month-over-month and up 69.5 percent year-over-year.

Oregon saw a substantial jump in foreclosure filings, with notices of default up a staggering 236.2 percent from March.
Much of this increase came from ReconTrust, a subsidiary of Bank of America, filing 2,840 new default notices last month compared to the 131 it filed in the first three months of the year, ForeclosureRadar explained.

Oregon homes that went back to the lender as REO last month fell 17.8 percent, however, foreclosure sales to third parties increased 38.7 percent month-over-month.

Washington saw a 12.1 percent slip in notice of trustee sale filings from March, and a 25.4 percent drop compared to a year earlier.

But ForeclosureRadar reports the courthouse steps were active in Washington state last month with properties sold back to the lender up 38.7 percent, and those that went to third party investors up 40.5 percent from March.

LPS Reports an About-Face in Delinquency and Foreclosure Movement

Ron & Sandy Wose — Wed, 18 May 2011 18:18:00 GMT

Lender Processing Services (LPS) says market data it’s pulled through the end of April reveals an increase in the national mortgage delinquency rate and a drop in the industry’s foreclosure inventory.

Both stats did a complete u-turn from the trajectory they were on the prior month. At March month-end, LPSreported a sharp drop in delinquencies and a smaller, but notable increase in the foreclosure inventory.

Based on performance analysis conducted on its loan-level database of nearly 40 million mortgage loans, LPS says the ratio of mortgages 30 or more days past due but not yet in

foreclosure rose to 7.97 percent in April, an increase of 2.4 percent from March. That follows a 12 percent decline between February and March.

For April, the nation’s foreclosure inventory – which LPSdefines as past dues that have been referred to an attorney but have not yet reached the final stage of foreclosure sale – dropped to 4.14 percent, down 1.6 percent from March. Pre-sale foreclosures between February and March had risen 1.4 percent.

Altogether, LPS says there were 6,388,000 mortgages 30 or more days delinquent or in foreclosure as of the end of April. That’s up from 6,333,000 at the end of March.

At April month-end 2,184,000 properties were in the midst of the foreclosure process, and 4,204,000 were at least one payment overdue but not yet referred to a foreclosure attorney. Of the latter, 1,961,000 were 90 or more days delinquent.

According to LPS’ analysis, the states with highest percentage of non-current loans – which combines foreclosures and delinquencies – are Florida, Nevada, Mississippi, New Jersey, and Georgia.

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

Report: REOs and Shorts Accounted for 39% of Q1 Existing-Home Sales

Ron & Sandy Wose — Wed, 11 May 2011 18:02:00 GMT

Data released by the National Association of Realtors(NAR) Tuesday show that distressed properties – including bank-owned homes and pre-foreclosure short sales – made up 39 percent of the first quarter’s existing-home sales. That’s up from 36 percent a year earlier.

Overall, sales of previously owned homes rose to an annual rate of 5.14 million units during the first three months of this year, the trade group reported. That pace is 8.3 percent higher than during the previous quarter and essentially flat – down just 0.8 percent – compared to the same period last year. NAR says existing-home sales continued to recover in Q1 with quarter-over-quarter gains recorded in 49 states and the District of Columbia. Vermont was the only state to post a decline. There, existing-home sales dropped 7.1 percent. With distressed homes grabbing such a large share of the market, the median home price in most areas continues to slide. NAR says distressed properties typically sold at a discount of about 20 percent during the first quarter.

According to the trade group’s study, the national median existing single-family home price was $158,700 in the first quarter, down 4.6 percent from $166,400 in the first quarter of 2010. Lawrence Yun, NAR’s chief economist, says lower priced homes have seen the best sales performance. “The biggest sales increase has been in the lower price ranges, which are popular with investors and cash buyers,” he said. “The preponderance of sales activity at the lower end is bringing down the median price, so what we’re seeing is the result of a change in the composition of home sales.” Yun also noted, “When buyers principally purchase distressed properties in a given market, the recorded prices will be very low, which is what we’re seeing now in much of the country.” According to NAR’s latest findings 118 of the 153 metropolitan statistical areas included in the study showed price declines in the first quarter when comparing figures from a year earlier. Although sales nationally are slightly below a year ago, the volume of homes sold for $100,000 or less in the first quarter was 8.9 percent higher than the first quarter of 2010, creating a downward skew on the overall median price, NAR explained in its report. The share of all-cash home purchases rose to 33 percent in the first quarter from 27 percent in the first quarter of 2010. NAR says investors accounted for 21 percent of first quarter transactions, while first-time buyers purchased 32 percent of homes, and repeat buyers claimed a 47 percent market share.

Fixed Mortgage Rates Drop to Yearly Lows

Ron & Sandy Wose — Thu, 05 May 2011 20:04:00 GMT

Interest rates on home loans have dropped across the board for the third consecutive week.

Freddie Mac reports that the average rate on a 30-year fixed mortgage this week slipped enough to match its lowest mark in 2011, while the 15-year rate fell to a new yearly low.

According to Freddie Mac’s weekly market survey rates on 30-year fixed mortgages averaged 4.71 percent (0.7 point) for the week ending May 5, 2011. That’s down from 4.78 percent last week. Last year at this time, the 30-year rate was 5.00 percent.

Freddie Mac calculates average mortgage rates each week from data reported by approximately 125 lenders across the country.

The GSE’s latest study puts the 15-year fixed-mortgage rate at 3.89 percent (0.7 point). Last week it was reported to be averaging 3.97 percent, and a year ago it was 4.36 percent.

Adjustable-rate mortgages (ARMs) also headed lower this week. The 5-year ARM came in at 3.47 percent (0.6 point), down from 3.51 percent last week. The 1-year ARMis now averaging 3.14 percent (0.5 point), down from last week’s 3.15 percent.

Frank Nothaft, Freddie Mac’s VP and chief economist, noted, “Weaker economic data reports reduced Treasury bond yields and allowed mortgage rates to drift lower for the third consecutive week.”

Nothaft explained, “For instance, real economic growth in the first quarter fell short of the market consensus forecast and represented the slowest pace since the second quarter of 2010. In addition, both the manufacturing and service sectors exhibited growth at a slower rate in April.”

He says data reports on the housing market, on the other hand, were a little more uplifting, pointing out that the National Association of Realtors reported pending home sales rose in March for the second month in a row to the highest index reading since November 2010.

“Also, the Federal Reserve reported credit standards among commercial banks for prime mortgages were unchanged on net in the second quarter of the year, following two quarters of tightening,” Nothaft said.

Realtor.com comes to iPad

Ron & Sandy Wose — Tue, 26 Apr 2011 21:05:00 GMT

iPad is the latest mobile device with access to aRealtor.com app, according to details released Tuesday by California-based Move, Inc., operator of Realtor.com, the official site of the National Association of Realtors.

Compatible with iPad iOS 4.0 or higher, the free appprovides property listings with maps and GPS directions, among other features.

“With a Realtor.com mobile app, there’s no waiting or wondering anymore if a property is on or off the market, how much it costs, or if it will fit your needs,” said Steve Berkowitz, CEO of Move, Inc. “Mobile is changing the way people buy and sell homes, and our iPad app opens real estate up to millions of people with an amazing visual search experience.”

Berkowitz says the new technology “combines mobile’s instant gratification and investigative component that everyone loves with Move’s search technology. We’re very

excited to expand our mobile offerings and deliver the power of Realtor.com to millions of iPad users,” he said.

With the addition of iPad, 10 properties are viewed every second on the Realtor.com mobile app via the iPhone, Android, Windows Phone 7, or iPad, according to Move, Inc.

Realtor.com mobile apps have been downloaded 3.6 million times with active users increasing by 79 percent in four months.

Realtor.com app users can draw their own search boundaries anywhere in the U.S. with an area highlighter. They can rate properties and save personal notes on each home for later as well as filter search results. The app also allows users to connect with agents from each listing via e-mail.

“The Realtor.com iPad app gives buyers and agents everything they need when they need it most to work together successfully in finding properties,” said Errol Samuelson, president of Realtor.com.

“In the past year, Realtor.com mobile apps have contributed to a 240 percent increase in consumer outreach to local agents, and open house views have increased by 459 percent in just four months,” Samuelson explained. “Even more exciting, in-app communication between agents and consumers has increased by 148 percent since December.”

Realtor.com also announced the availability of key updates to the app compatible with the iPhone iOS 4.0.

The new iPad app can be accessed via the Realtor.com Web site here.

Realtors Report Fewer Distressed Sales in California

Ron & Sandy Wose — Mon, 25 Apr 2011 18:23:00 GMT

While the share of distressed sales – REOs and short sales – is on the rise when tallying numbers nationwide, it’s falling in California.

The California Association of Realtors (C.A.R.) reports that the total share of all distressed property types sold statewide declined in March to 51 percent, down from 56 percent in February.

“Consistent with the state as a whole, nearly all the counties for which we have data also experienced an improvement in distressed sales,” said C.A.R. President Beth L. Peerce. “However, distressed sales in most of the

counties were higher than a year ago, as the market continues to work through large numbers of troubled mortgages.”

According to the local Realtor group, REOs accounted for 31 percent of the state’s home sales last month, while short sales made up 20 percent.

The median price of homes sold in the state varied dramatically depending on the property type, with non-distressed properties selling for much higher prices than short sales and foreclosures.

C.A.R. reports that the statewide median price of non-distressed properties sold in March was $386,500.

That’s 88 percent – or $181,500 – higher than the MarchREO median price of $205,000.

The short sale median price of $274,700 came in 41 percent – or $111,800 – below the median price for non-distressed properties.

C.A.R. notes that price differences across short sales, REOs, and non-distressed properties reflect variances in the condition of the property, with REOs typically being in worse condition than short sales and non-distressed properties. A seller’s circumstance, such as needing to sell under duress, is also a factor.

QR Codes - Are You Using Them

Ron & Sandy Wose — Fri, 22 Apr 2011 18:32:00 GMT

I'm pretty sure most of you have come across a QR code and just looked at it and asked yourself "What on earth is that?" If you are like me and have a Smart Phone then you probably have come across an App that will scan these QR codes. The next time you go to the store check out how many items are now including a QR code on the package for you to get quick information on that product or company. They are popping up on print ads with just a simple one line ad. I have gotten into this new wave of the future and am starting to put them on my For Sale signs, and posting them in the front window of houses for people to scan and get instant YouTube videos and listing information. Pretty soon we will be seeing these printed on large billboards for people to scan in their car while they are at a stoplight, or walking by on the sidewalk. Store fronts will have a large display ad with a QR code on there for you to buy online. This is the newest technology and its coming in strong.

Distressed Properties Claim 40% of Existing Home Sales

Ron & Sandy Wose — Fri, 22 Apr 2011 18:31:00 GMT

Distressed homes – typically REOs and short sales – accounted for 40 percent of the existing homes sold in March, the National Association of Realtors (NAR) reported Wednesday.

The trade group notes that these properties generally sell at discounts in the vicinity of 20 percent. Their large market share served to dampen the median existing-home price. For all housing types, it came in at $159,600 last month, down 5.9 percent from March 2010.

Overall, sales of previously owned homes rose 3.7 percent last month as the spring buying season began to take hold.NAR described March’s reading as “continuing an uneven recovery,” following the 9.6 drop recorded in February.

Lawrence Yun, NAR’s chief economist, expects the improving sales pattern to continue.

“Existing-home sales have risen in six of the past eight months, so we’re clearly on a recovery path,” he said. “With rising jobs and excellent affordability conditions, we project moderate improvements into 2012, but not every month will show a gain – primarily because some buyers are finding it too difficult to obtain a mortgage.”

“For those fortunate enough to qualify for financing, monthly mortgage payments as a percent of income have been at record lows,” Yun added.

The March numbers put the annual sales rate at 5.10 million in March, up from a revised 4.92 million in February, but below the 5.44 million pace in March 2010.

NAR notes that sales were at elevated levels from March through June of 2010 in response to the federal homebuyer tax credit. Immediately following its expiration, existing-home sales bottomed last July, and been on a slow but fairly steady path ever since.

“Although home sales are coming back without a federal stimulus, sales would be notably stronger if mortgage lending would return to the normal, safe standards that were in place a decade ago – before the loose lending practices that created the unprecedented boom and bust cycle,” Yun said.

He says given that the Federal Housing Administration(FHA) and Veterans Affairs (VA) government-backed loan programs turned a modest profit over to Treasury last year, and have never required a taxpayer bailout, low down payment loans should continue to be made available for consumers who have demonstrated financial responsibility.

A parallel NAR practitioner survey shows first-time buyers purchased 33 percent of homes in March, compared with 34 percent in February. They were 44 percent in March 2010.

All-cash sales were at a record market share of 35 percent last month, up from 33 percent in February and 27 percent in March 2010.

Investors accounted for 22 percent of sales activity in March, up from 19 percent both the month before and a year earlier.

The Mobile Web. It's Different.

Ron & Sandy Wose — Wed, 20 Apr 2011 21:34:00 GMT

Tech industry observers predict that this year or next, more people will be consuming the internet with mobile devices tan with desktop computers. This trend forces anyone who has a Web site to think differently about how information is delivered and displayed. Most smartphone users like myself want to get information quickly so as not to drain the battery. Lets face it when standing in line at the grocery store we are all guilty of looking at facebook, checking our bank account balance, or just verifying that new rumor you just read on one of the magazines at the check out stand. As the technology advances towards 4G connections our displays are still limited and we don't want to wait for a video to load, so quick easy to load pictures work just fine. Look out soon for more advertisements to feature .mobi or Mobile Domain names to start showing up for you to go on their site wirelessly. Check back soon for a look at the next wave the QR codes.

Properties Coming Soon!

Ron & Sandy Wose — Wed, 13 Apr 2011 17:21:00 GMT

We have 3 new properties this week that are in the pre-marketing stages and should be coming on the market in a week or two. If you would like to get a sneak peek at these properties please give me a call before they are sold.

Rifts Continue to Surface Around Robo-Signing Settlement

Ron & Sandy Wose — Wed, 13 Apr 2011 17:14:00 GMT

Federal regulators split from state attorneys general last week to cut their own deals with mortgage servicers as part of a settlement for the robo-signing mess that surfaced last fall.

The regulators’ terms include tighter quality controls to ensure foreclosure procedures are properly followed and independent reviews of 2009 and 2010 cases, as well as changes to the way servicers deal with delinquent homeowners, including providing a single point-of-contact through loss mitigation talks and halting foreclosure actions while negotiations for a loan modification are in process.

One major servicer has reportedly already signed on to the federal regulators’ consent decree, and at least 13 more are expected to follow suit in the coming days.

Critics of the feds’ side deal are making their voices heard. Dozens of consumer advocacy and community organizations are calling for federal regulators to withdraw their agreements, arguing that the consent decrees provide “minimal guidance” to banks on document handling and account management, and do not hold servicers accountable for illegal practices or stop avoidable foreclosures.

In a letter to the regulators, the organizations urge them to work with the state attorneys general and the U.S. Justice Department “to create a meaningful agreement that holds banks accountable for illegal and abusive practices.”

State attorneys general have said they will move forward with their own, more stringent settlement without the federal regulators. But even in the attorney general camp there has been dissension.

Just this week, New York State Attorney General Eric Schneiderman said he was concerned that a settlement could preclude individual states from continuing their own foreclosure and mortgage servicing investigations.

According to Bloomberg, Schneiderman feels that even a settlement should not be considered an end to the matter. “Any settlement agreement should preserve the ability of attorneys general to follow the facts where they lead,” Schneiderman’s office told the news agency.

A faction of chief legal counsels from several statespublicly expressed reservations about certain provisions in the 27-page term sheet issued jointly by the states and federal regulators when it was released last month.

Namely, they said some of the proposal’s terms could have the unintended effect of prolonging the foreclosure process. And they took considerable issue with the proposal’s suggestion of principal write-downs for underwater borrowers, with the dissenting AG’s said would be a disservice to homeowners who, despite the downturn, have worked hard to keep their mortgages current.

A study released Tuesday by three economists says the original settlement proposal backed by the attorneys general “would generate significant unintended negative consequences” and is “unlikely to provide broad or lasting benefits.”

The economists estimate that even a small increase in strategic defaults caused by a principal write-down mandate could increase the foreclosure inventory by $297 billion. They say mortgage rates would rise by as much as 45 basis points a year, another 280 days would be added to foreclosure timelines, and additional costs to the mortgage industry would tally up to $10 billion a year if the attorneys general’s terms are put into play.

The paper was written by Charles Calomiris, a professor of financial institutions at Columbia Business School; Eric Higgins, a finance professor at Kansas State University; and Joseph Mason, Louisiana State University’s banking chair and a senior fellow at the Wharton School.

Their research, though, was funded in part by the financial services industry, including entities affected by the proposed settlement, according to a footnote in the report. Although the authors write that the views are their own, some are dismissing their findings altogether based on the fact that it was paid for by servicers.

Fannie Mae offers 3.5% Buyers Assistance

Ron & Sandy Wose — Mon, 11 Apr 2011 19:31:00 GMT

Hello everybody, today Fannie Mae has put out an update for offering buyers assistance in the form of closing costs. Please read below for more information. Please feel free to give me a call at (209) 321-8307 for more information.

Fannie Mae wants to help more buyers afford to purchase their new home. That is why we are offering up to 3.5% in closing cost assistance for HomePath® properties beginning April 11 through June 30, 2011.
Eligibility Details:

1. Initial offers must be submitted on or after April 11, 2011.
2. Buyers must be owner occupants (i.e., the home will be their primary residence), and buyers are required to sign an Owner Occupant Certification Rider to the Purchase Addendum with all initial offer submissions.
3. Sale must close on or before June 30, 2011.
4. Other restrictions apply. For more information about the offer including the terms and conditions, visit the Special Offers tab at HomePath.com.