Real Estate Information Archive

Now is the Time to Buy! Great Article worth reading.

http://www.facebook.com/l.php?u=http%3A%2F%2Fbit.ly%2Fbm2SHI&h=deb33

Toledo Real Estate September 2010

The regional MLS system (NORIS) reported unit sales of single family homes and condos in August 2010 of 537, an increase of 13.2% compared with July 2010 of 474 units. August 2010 dollar sales of $55,995,000 increased 4.9% as compared with July 2010 of $55,389,000. The average sale price of $104,000 in August 2010 declined 8% as compared to July 2010 of $113,000. August 2010 unit sales also declined 20.3% as compared to August 2009 of 674 units. August 2010 dollar sales declined 20% when compared to August 2009. The average sale price declined 2% as compared to August 2009.

  To the untrained eye the numbers above look ok, but they are not. On September 13^th, 2010, I spoke with several  REO Realtors. Based on their prelisting work and feedback from “bank owned” clients they see an increase in bank owned listings coming in late fall and winter. They said investor buyer clients are having difficulty getting financing because their inventory of resale properties is increasing because their rate of sales is slowing. They need resales to fund more purchases. As a result, they are accepting lower prices on their resales. Without the resales, lenders are not willing to lend them more money. This keeps them short of cash.

 Below is a compilation of inventory to sales ratios, first by year as compared to the 1^st  8 months of 2010 and secondly, comparing the month of August with 2006 to 2010.

The above statistics indicate that the sky isn’t falling. The problem isn’t the inventory. The problem is the sales. However, the inventory to sales ratio is increasing.

 What all of the above doesn’t measure is that there were tax credit induced sales last fall and there won’t be any this coming fall. There is very little chance that sales for the year 2010 will equal the sales 2009. With declining sales in the last 4 months of 2010 and an increase in listing inventory, this creates an environment for declining prices. I am in complete agreement with Jeff.

Underwriter Standards

 There will be no recovery in real estate sales until lenders become more reasonable in their underwriting standards. During the housing bubble FHA didn’t loosen its standards. So its market share plunged to 2% in 2006. Today it is more than 50%. Having FHA do this much volume is a sign of a very sick system. Mortgage lenders profits have been deeply impacted by the loan losses and buy backs over the last few years and will be the next 6-9 months. Even though there are fewer borrowers paying slowly, fewer borrowers going into foreclosure and an improving economy, there are so many foreclosures in the system that the number of bank owned properties for sale will increase in the next 6-9 months. Mortgage loan holders must improve their balance sheets before they can justify to their investors loosing underwriting standards. Expect that to happen slowly and expect it to come from the free market rather than FHA.

USA Sales

 Nationally, sales have begun to decline and listing inventory is increasing. July inventory to sales ratio was 12.5 months. It is not just Toledo.

Sorry for all the statistics, I will try to keep it simple next time.

I hope this changed your life, as it has mine.

http://www.facebook.com/video/video.php?v=1443644742564

http://www.reo-insider.com/news/bank-of-americ-puts-short-sales-ahead-of-reo

http://public.remax.net/public-News/Pages/CDPEMarketingTips0710.aspx

Denied for Federal Mortgage Aid, Homeowners Seek Alternatives

By Stella M. Hopkins

RISMEDIA, June 18, 2010--(MCT)--Allison Rinehart's best hope for saving her home isn't the massive federal effort to stem foreclosures.

She's been denied, possibly in error, for that plan so she's banking on an alternative mortgage modification to keep her Charlotte townhouse.

"This is the only thing my daughter and I have," said Rinehart, who is 45. "I am a single parent, no child support, working as many jobs as I can take on."

The taxpayer-funded Home Affordable Modification Program, or HAMP, is the centerpiece of the nation's foreclosure prevention effort. But it doesn't work for many people.

For example, Bank of America estimated in April that more than half its 1.44 million delinquent mortgage customers weren't eligible for HAMP. Wells Fargo says about 80 percent of its roughly 500,000 modifications are non-HAMP. Combined, the two banks serve nearly 40 percent of U.S. mortgages.

HAMP also has seen a surge in homeowners failing the three-month trial period, and a decline in new trial enrollments. Critics blame servicers for the declines, saying they're doing a poor job and unfairly bouncing people from the program. Servicers acknowledge there were problems, especially early on. They also say homeowners aren't complying with payment agreements or document requirements.

Whatever the reason, the problem isn't going away. The number of struggling homeowners nationwide is expected to remain high because job growth remains sluggish and millions of people are out of work. That means alternative modifications are likely to become even more important tools for preventing foreclosure.

"The goal is just to get to affordability ... whether that happens through a modification through HAMP or outside of HAMP," said Tom Goyda, a Wells Fargo spokesman.

There are many reasons property owners can't qualify for the federal program.

For example, they might have refinanced or bought after HAMP's Jan. 1, 2009, cutoff. They might not meet income or debt requirements. HAMP modifications, subsidized by taxpayer dollars, also aren't available for investment property, vacation homes and high-end homes.

In April, Bank of America finalized more than 23,000 HAMP modifications and had more than 210,000 in the pipeline. The Charlotte bank also has been averaging about 13,000 alternative modifications a month this year, said spokesman Dan Frahm. Most are for customers with mortgages issued after the cutoff or above the HAMP limit or on properties that aren't their principal residence.

"HAMP is at the center of our modification efforts at Bank of America," Frahm said. "It's also important to recognize that no one solution or program can address the ... issues facing homeowners, who are experiencing hardship as a result of prolonged recessionary impacts."

President Barack Obama announced the HAMP program in February 2009, well into the financial crisis. Prior to that, lenders and mortgage servicers were already doing modifications so it's natural there are more of those. Many HAMP applicants also are still working through the slow, cumbersome process.

Servicers participating in HAMP must first consider homeowners for loan aid under that program. If that doesn't work for customers, servicers can consider them for their own programs.

Goyda said Wells is doing alternative modifications for about 60 percent of customers who reach HAMP's trial phase but don't ultimately qualify. About 10 percent find other solutions, and the balance are probably headed for foreclosure.

Of HAMP, he said: "It's only one part of our overall efforts to help customers find affordability."

Consumer advocates, while sharply critical of mortgage servicers for poor modification service, generally endorse HAMP's intent and its standardized approach.

"It's a useful template," said Julia Gordon, senior policy counsel with the Center for Responsible Lending in Washington. "It's by no means some kind of gold standard."

For example, a recent HAMP change eliminates unemployment benefits as a qualifying source of income for modifications.

"That's just crazy," she said.

Gordon cautiously welcomes alternative plans because they can potentially help more people. She's concerned homeowners won't have a consistent way to know what's available and how to qualify. She and others have seen instances where payments are actually higher under non-HAMP plans — not a workable solution for a struggling borrower.

She also frets about the lack of federal oversight for in-house plans. The U.S. Treasury oversees HAMP, but has been criticized for not penalizing servicers for mistakes.

Gordon urges people to review any modification offer carefully. What's the new payment? Has the principal been reduced if the loan balance exceeds the value of the house? How long does the modification last?

"It is conceivable you could have a proprietary product that's better," she said.

Under HAMP, the government pays servicers and homeowners for successful modifications. For homeowners who make all their payments on time, that can amount to $5,000 paid toward their loans.

Those incentives aren't available under alternative plans.

Al Ripley, with the nonprofit N.C. Justice Center, has been critical of HAMP's cumbersome nature. He's also concerned about the lack of consistency and transparency in alternative plans. He says all servicers should be required to disclose their guidelines and processes for all modifications.

"It would be very helpful for homeowners to have more predictability when applying for a modification," Ripley said.

Allison Rinehart's budget was tight in late 2004 when she paid about $136,000 for her Charlotte townhome.

She put $4,000 down on the home and took a 30-year mortgage at nearly 9 percent. Her monthly payments were $1,111. Rinehart and her daughter, Sydnea, now 15, got by on the roughly $30,000 a year Rinehart made as a longtime, self-employed hairdresser and middle-school coach.

Last spring, she noticed business dropping off more sharply as her clientele struggled in the downturn. In July, she asked for a modification from Select Portfolio Servicing, the Utah firm handling her mortgage. She received an unusually speedy offer of a trial plan, which is supposed to last three months.

Rinehart was told to make the first payment on Sept. 1 at her original amount. Subsequent trial payments were cut to $685. She made those payments through March, when she received a letter saying she was denied a HAMP modification. Soon after, she contacted McClatchy Newspapers.

"This has caused me sleepless nights, depression and anxiety," said Rinehart, who also works in her church's office and has been a nanny. "My 15-year-old doesn't know whether or not she will have her home the next day or not because of this."

SPS offered another trial, with monthly payments at an even lower $456. Rinehart started the payments in April but worried it was a delaying tactic and she'd be denied again. Meanwhile, she received notices from SPS saying that to keep her house she had to repay the thousands of dollars that hadn't been paid during the trials.

"It really scared me," she said. And angered her. If she had the money, she wouldn't have asked for help.

"It was a slap in the face."

In May, McClatchy Newspapers began contacting SPS, asking about Rinehart's case. After several weeks of messages and e-mails, the company said it would send Rinehart a response.

In that letter, SPS said Rinehart didn't qualify for HAMP because she failed to send documents by a certain date. Rinehart said that's not true, that she has copies and certified mail receipts proving she sent everything requested, on time.

The May 27 letter, which Rinehart provided the newspaper, confirmed Rinehart made the first two trial payments. The letter said once she made the third payment, due last week, "SPS will complete the modification process and you will receive the final modification agreement which requires your signature.

"Once this is received, SPS will permanently modify the terms of your note and bring your account current."

Her June payment cleared her bank shortly after the 1st of the month. On June 10, she arrived home to find the promised paperwork. She believes that happened only because she went public.

Last week, she was reviewing the papers and reflecting on what sustained her.

"I relied on my faith."

(c) 2010, The Charlotte Observer (Charlotte, N.C.).
Distributed by McClatchy-Tribune Information Service

As a real estate agent, I devote extra attention to issues facing struggling homeowners. But any homeowner should know that the FBI has reported a 400 percent increase in mortgage fraud cases from five years ago. Sadly, some people are praying on those who need help the most.

If you or anyone you know is going through a mortgage-related transaction, there are some "red flags" to be aware of. I created a report on my website that gives examples of what fraud cases the FBI has been noticing.

Please send anyone here who needs this free information:

http://www.utahforeclosurereliefteam.com/

If you have any questions about mortgage scams, or if anyone you know needs legitimate, professional help with avoiding foreclosure, please don't hesitate to contact me.

I'm here to help.

Cindy Keil

801-779-4967

http://www.housingwire.com/2010/06/09/foreclosures-drop-3-in-may-as-lenders-tackle-backlog-realtytrac

http://www.wtol.com/global/story.asp?s=12529326

The shadow inventory of foreclosures should peak in the summer of 2010 before falling gradually in the later months, according to a new report from Barclays Capital.

Barclays defines the shadow inventory of foreclosures as loans in 90-plus day delinquency or already in the foreclosure process. According to the report, there are currently 2.4m loans in 90-plus day delinquency and another 2.1m in foreclosure, totaling 4.5m in the shadow inventory.

Analysts measured these loans in reports from Fannie Mae and Freddie Mac, their regulator the Federal Housing Finance Agency (FHFA), the Federal Deposit Insurance Corp. (FDIC), the US Department of Housing and Urban Development (HUD), the Mortgage Bankers Association (MBA) and its own resources.

The shadow inventory should reach its height in the summer in 2010 before falling gradually as the market absorbs 130,000 distressed properties per month, according to the report. Over the next three years, analysts forecast 4.7m distressed sales with 1.6m in 2010, another 1.6m in 2011 and 1.5m in 2012.

Barclays reported more than 478,000 loans in REO status. At the current rate the banks are trickling loans from foreclosure into REO, that number could grow to 536,000 by late 2011. If that rate increases, Barclays analysts said that number could reach 640,000 by the summer of 2012. Still, analysts said the market is unlikely to revisit the “extreme levels” of REO seen in late 2008.