But comparing year-over-year foreclosure activity, there is some solace that it has decreased by approximately 10 percent from July 2009, although consecutively for the last 17 months, the foreclosure figure of the country is exceeding 300,000 mark.

Looking closely further, foreclosure activity in the second and third stages cause concern to market watchers. While in the first stage that is receipt of default notices, totally 97,123 properties were found, showing just 1 percent increase from June; in the second stage of scheduled foreclosure auctions in July they reached a total of 135,248 delinquent properties. This is an increase by 2 percent from June.

The continued increase in the number of repossessed properties for the last several months did not subside in July either. A total of 92,858 properties were taken back by lenders as repossession, which is an increase month-wise and year-to-year by 9 percent and 6 percent respectively. This is reported as the highest monthly total, next only to 93,777 properties added up in the books of lenders in the month of May 2010.

There is a talk going on in the real estate circles that lenders are more cautious in approaching foreclosures, and give thought to foreclosure alternatives such as loan modifications; reduced monthly installments; short sale options etc. before rushing to confiscate properties and add their deadweight lists. There is an apprehension, but for this changed attitude, the foreclosure repossessions would have been much more.

Otherwise there are not much of changes in the top 10 list of states, worst-hit by foreclosure activity in July as well. Nevada continues for the 43^rd month in succession to top the list; followed by Arizona, Florida and California. New competitors for the remaining places are – Idaho; Michigan; Utah; Illinois; Georgia and Maryland – in that order.

What the experts say about this? Well – like no two doctors agree, the opinions differ and both sides put forth interesting points for consideration. Here are some of them:

Making money on real estate business hinges on the golden rule “Buy low and sell high” and if this is right, there is no better time than now to plunge head-on. Because in almost all the housing markets, particularly the most sought-after locations of California, Florida, Nevada, and Arizona, you get properties on distress at a fraction of their values. Remember – these properties were unaffordable price-wise during the boom years.

Buying a distressed property –  preferably from a home owner facing foreclosure and in the initial stages of foreclosure to get rid of the property – will be a lucrative proposition. A short sale is also a good option to strike with bounty of cash on the negotiating table.

After carrying out smart rehabs and repairs, not exceeding 20 percent of the home value, you can make the home a top-notch one to get listed for re-sale through listings.

But those who advice –  buy now but don’t flip – ask the vital question, where are the buyers to purchase your property, even if it is handsomely priced? When home values are plummeting by more than 50 percent in almost all the housing markets, there is no guarantee for reaping a good harvest as return on your investment.

Instead they advise – buy now but keep the property for long term of at least 5 years. If the property is given a face-lift, it is a sure-shot that you can derive steady rental income month after month. When the turn-around happens in the present market conditions, you will be hitting a fortune.

The new rule may open up liberal repayment provisions to borrowers, but seems to deviate from the long-standing norms favorable to less-fortunate borrowers. What are the proposed new rules?

New restrictions are likely to be imposed on lenders – first of all the lenders are held responsible to see that mortgage loans are affordable to the buyer. There will be two divisions – “qualified” and “not qualified”  mortgage loans ultimately by this. Another restriction is lenders must retain at least 5 percent of the credit risk while issuing new loans.

Mortgage lenders are safe with low-risk category loans that is – those with terms no longer than 30 years; fully amortizing payments which is possible for borrowers with sound financial background credit-score-wise; and qualification criteria based on the highest possible interest rate in the first five years etc. In respect of these qualified mortgages, the lender is not obliged to keep the above credit risk charges.

The above stipulations are hard to qualify, for those borrowers emerging from low-income, minority groups and underserved communities of the society. Lenders if obligated by the proposed law, to see that these unqualified borrowers are served to the best possible extent, invariably there will be price differences, between the qualified and not-qualified sections of borrowers – and the difference in cost will only fall on the heads of these poor cousins of the home loan borrowers.

Talking of qualification, a borrower with 800 credit score and 40 percent equity was easily qualified, irrespective of proof of income, prior to the sliding down of mortgage industry. Lenders were safe in their extending capital at least by the equity, if not the credit score. Now with importance shifting to not-qualified section of borrowers, the lenders will not be interested and the home loan issuance will shift to mega lenders with hefty charges, to do business under the changed conditions.

Surely this is not the intended effect of the proposed reform bill, but that is what going to happen.

Foreclosures dent home values in the neighborhood – MIT Study

It is common knowledge if a nearby house of yours falls into foreclosure tragedy; invariably it reduces the market value of your home as well, from the home buyer’s point of view. More so, if your neighborhood is one of those hard-hit by many foreclosure properties, the drop down of value for all housing properties is considerable as a whole. But how much of this effect is and in what percentage? American Economic Review has conducted a study recently to answer these doubts, and the results are yet to be published in full. Read more..

When we can expect employments to grow?

The problems faced by U.S.  Real estate market is unquestionably due to growing unemployment. If you see right from the beginning, the difficulties U.S. economy faced somewhere from the start of 2006 were cyclic in effect – ballooning of adjustable rate mortgages; repayment installment going beyond the family budget; defaults; delinquencies; foreclosures; stoppage of inflow of funds to the entire financial system of the country; closing down of major financial institutions; credit-crunch; companies and government employment cuts; and again more foreclosures till this day. Read more..

LUXURY HOMES

Lake Forest houses in short sales

Lake Forest – the Chicago suburb – is known as a place where all women drive S.U.V.’s and all the men are CEO’s. The trouble of the world didn’t seem to get into this neighborhood, where the per-capita income is $77,000.

Till now. It seems like foreclosures that has swamped the housing market – mainly in low-income neighborhoods, now starting to lap at the unspoiled shores of this community on Lake Michigan.

"In the first half of 2010, the largest increases in new foreclosures occurred in the region’s middle- and higher-income communities", a new report of the Woodstock Institute revealed. Read more..

LENDERS & SERVICERS

Foreclosure Filings Show Slight Decrease in Q2

According to Default Research, there are substantial signs of pre foreclosure statistics improving all over the research areas including Las Vegas, Miami and Phoenix. A 30% decrease of pre foreclosures is in Miami-Dade County , but it’s not the only with the positive changes. This was aided by new laws encouraging mortgage modification plans and short sales. Another good news is, that banks seem to become more cooperative and efficient regarding short sales, which is also easing the foreclosure crunch. Finally, homeowners can modify their mortgages to stay in their home, with the help of continuous education and assistance. The statistics can be seen below with comments from Default Research founder Serdar Bankaci. Read more..

COMMERCIAL

Krisco Senior buys a San Antonio development for less than half price at auction

Kisco Senior Living recently bought a seniors housing project in San Antoio at auction for less than half of the original cost, which was $37 million.

Villa de San Antonio, the development purchased by Kisco, opened four years ago as a continuing care retirement community. It has 114 independent living units, 24 cottages and 55 assisted living units.

The problem began with the property’s construction delay and it was followed by the low occupancy rate, of just 60%. This number was registered in February 2009, when the property filed for bankruptcy with $36 million in debt. Read more..

Commercial Real Estate prices oscillate – no firm indication

The Commercial Real Industry is suffering – the most obvious finding by financial experts and research firms. But the questions most difficult to answer even by experts are – how much and what the trend is indicating. The monthly CoStar Commercial Repeat-Sale Indices (CCRSI) try to answer these questions fairly, but not accurately as there are no effective indices to measure commercial property price movements and there is variation by property types and geographies. Read more..

MARKET UPDATE – DALLAS

Dallas and other housing markets yet to recover from poor consumer spending

Real estate business anywhere in the country is reeling under pressure, because of the weak economy. The national scenario reflected by many housing markets convey the same message of dullness – with minor changes here and there in markets like Dallas, Austin and similar others in Texas. People should have surplus money for investments like home buying and this is where it is lacking – as witnessed by recent reports. Read more..

The problem of joblessness echoed in all sectors, and financial activities by reduced consumer spending, and the gloom of recession setting in strongly in the country from December 2007. If financial recovery is to be achieved sooner than later, the one and only solution is providing jobs and more jobs, rather than government aids through mitigation programs, which can address the problem only facially, but cannot cure the cause of the disease.

Talking of providing employment, the base of U.S. economy is provision of employment mainly by the private sector, looking back in the history. Statistics show an alarming trend in this regard. The total number of jobs lost in the year 2008 and 2009 account for as huge as 8.4 million. As against this, the total number of jobs provided by private employers during the 6 months ended June this year is a mere 559,000 jobs.

Financial experts say if we are to reduce the unemployment rate – from 9.5 percent nationally in June, which remains unchanged in July as well – approximately 200,000 jobs are to be added each month. But in reality, according to figures provided by the Labor Department, only 71,000 jobs were added by companies in the month of July 2010.

As for job losses, totally in the month of July, 131,000 jobs have gone, which includes sending home 143,000 temporary employees recruited for the purpose of 2010 census. The Labor Department estimates for provision of jobs are getting revised every month. For example in June, the figure fell from previous estimate; and in July against the estimated private job gain of 83,000, it had to be revised as 31,000.

All put together, it will be years from now to regain the losses in total employment by private sector and government offices.

The above mentioned study is based on the analysis of 1.80 million home sales, which took place in Massachusetts from the year 1987 to 2009; and after publication will open up more researches, on subjects related with foreclosure crisis. According to the results of this study – on an average a foreclosure reduces the value of a home by 27 percent.

This is surprisingly a large discount, considering the sale of a home under many circumstances of distress like – death of the owner, declaration of bankruptcy, financial hardships and so on. If a home is situated within 250 feet from a foreclosed property, the value of that home drops by 1 percent, in the first place.

Supposing a home is sold by the legal heirs after the demise of the owner, the study found that the price of that particular property reduces on an average of 5 to 7 percent minimum. In case the home owner declares bankruptcy, the market value of that property invariably falls by 3 percent minimum.

Economists and Industry experts are of the view that the fact a property sheds its value by foreclosure is not surprising; the amount of discount it causes in the sale price is really a matter of surprise.

The study reports the major factor for drop in value of a foreclosed property is its existing condition, at the time of the sale. Logically, it is but natural that a distressed home owner may not be sound financially, for the upkeep of the home without repairs.

In practice we have seen the foreclosure properties listed for sale through public auction are offered for sale in “as is” condition, thereby hinting the seller is not guaranteeing about the status of the property under sale.

Employment statistics not encouraging for speedy economic recovery

According to financial experts, the economic recovery depends to a large extent on the growth of employment opportunities in all segments. For the simple reason of more money in the hands of people, the spending will increase, bringing every sector including real estate into life. The national unemployment rate and figures of claims on unemployment insurance do not support the expectation for a speeder recovery of economy. Read More..

Foreclosure filings decline consecutively – Market Report

The half-yearly Foreclosure Report – released by Realtytrac – says there is a decline of foreclosure filings for the sixteenth straight month in the country. During the first six months of 2010, the total foreclosure filings number stood at 1,961,894. In essence – one in 78 housing units received foreclosure filings during this period. Read More..

LENDERS & SERVICERS

Darrel Issa reveals more information about the the Countrywide VIP loan controversy

New information highlight the ties between Fannie Mae executives and Countrywide’s VIP loan program. This program was created by the subprime lender’s CEO at the time, Angelo Mozilo.

Rep. Darrell Issa, ranking member of the Oversight and Government Reform Committees showed documents that reveal information about this controversy: 27 former employees at the government-sponsored mortgage company "somehow managed" to receive 153 subsidized, low-cost loans through the specialty Countrywide VIP loan program. According to Issa, this program existed just to buy friends in critical government and industry positions, in order to protect the company’s business interests.  Read More…

LUXURY HOMES

Teresa Giudice’s auction

Teresa Giudice, "The Real Housewives of New Jersey" and her husband are facing bankruptcy, so August 22 will be a very important step in their lives, because their belongings will be auctioned off to help pay their $11 million debt.

Teresa and her husband filed for bankruptcy last October, when they couldn’t keep up with their bills, plus their $11 million in debts. Their belongings will be soled on an auction arranged by the court and trustee, though it might be a little hope not to do so. Their lawyer is still fighting the auction. Read More..

One of the symbols of wealth to be foreclosed

The Novi palace, one of Metro Detroit’s symbol of wealth gained a few days before entering foreclosure. The 13,777 square foot mansion includes a steam room, a bowling alley, wine vault. Outside: $5 million worth of landscaped waterfalls, a pool with a 60-foot-long water slide and a par three golf hole.

The owner, Rich Morgan, known as a the entrepreneur who built an empire of laser hair removal clinics, bought the mansion 3 years ago for only $9.5 million. After investing another $8.5 to build the house, the property now worth around $25 million according to some real estate officials. Read More..

COMMERCIAL

The St. Anthony Hotel foreclosure

The St. Anthony Hotel was inundated by hundreds of phone calls from some worried mother and brides because they wanted to know if the scheduled events will take place. There are lots of parties planned to upcoming months so people are worried whether their party will take place or not. The hotel officials are calming the callers saying that the historic downtown hotel’s foreclosure won’t have any kind of influence on the weddings, banquets and parties promised to host. Mr. Green, the senior vice president of investment s with Prism Hotels and Resorts, which is handling the hotels receivership said that "The hotel has no plans of closing. It’s going in the right direction. It’s fully staffed and foreclosure does not mean closing." Read More..

MARKET UPDATE – NAPLES

Latest Naples home prices and sales statistics are impressive

Naples housing market suffered the same amount of trouble for the last 4 years, what the entire U.S. national real estate underwent, because of the foreclosure crisis. Yet it has the unique history of attracting home buyers in large numbers, when the pressure started easing up during the last 5 to 6 months, slowly though. Read More..

On the unemployment front –  of course there is a fall slightly in the unemployment rate overall in the country – from 9.7 percent in the month of May to 9.5 percent in June. Hiring of manpower by the private sector – where all these years the scope was overwhelming prior to the financial meltdown – is rather slow, to add just 83,000 jobs.

According to reports, all over the nation as many as 125,000 positions were dropped by employers, which include temporary workers recruited for 2010 census compilation purposes. Sector-wise, the drop in employment in June was – construction industry losing 22,000 jobs successively for the last few years; and financial activities segment lost 15,000 job opportunities.

As for job growth, 46,000 more jobs were added in the professional and business services sector; and leisure and hospitality industry added another 37,000 positions.

The figures provided by Labor Department on the number of those unemployed people filing their first-time claims, towards unemployment insurance benefits, declined lately this month by 11,000 to reach 457,000 claims, which go to show the improvement in labor market will be slow, even as there is growth in the economic conditions. The four-week average of first-time unemployment claims fell to record low of 452,500 last week.

The number of persons collecting unemployment benefits continuously, not taking into account the benefits announced by special programs and extended programs like the one signed by the President on 22^nd July, was estimated by economists to be in the range of 4.487 million. But in essence it rose to 4.565 million for the week ending July 17, an increase from 4.484 million during the earlier week.

While 16 states reported an increase during this period, 37 states and territories reported a decrease in claims. The Federal Reserve reports that there is improvement in several districts, though modestly, in employment potential.

The foreclosure filings include all stages – default notices issued by mortgage lenders to those home owners behind their payments; scheduled foreclosure sale public auction through Sheriff Sale and Trustee Sale; and also bank repossessions after foreclosure sale public auction.

On a comparison, the recorded foreclosure filings of this half year show a decrease of 5 percent from the second half of the year 2009; but increased by 8 percent when compared to the first six months of last year.

For the month of June alone, 313,841 properties from various parts of the country suffered a foreclosure filing, which is a decrease of about 3 percent from May 2010, and about 7 percent from same month last year.

On a quarterly basis analysis, one can find foreclosure filings reported on 895,521 properties – showing a decrease of about 4 percent from the first 3 months of 2010 ending March, but a marginal increase of less than 1 percent compared to the same period in 2009.

The foreclosure activity report reveals while the default notices served on borrowers and foreclosure auction notices issued to delinquents were fewer than the previous quarter, and also year-over-year, REO properties – that is repossessed properties by lending banks, have increased by 5 percent compared to quarter ending March 2010 – the actual figure being 269,962 nationally. This is an alarming 38 percent increase in bank-owned properties, compared to the second quarter of the year 2009.

Which are the states worst-hit by the foreclosure crisis, during the first 6 months of this year? Well – the highest ranking goes to Nevada, followed by Arizona, Florida in third place and California in the fourth place. It is a note-worthy point that these states are continuously finding a place in the Top Ten list of huge foreclosure filings, among the locations of U.S. real estate.

Construction of new homes continue falling nationally

It the direct aftermath of foreclosure crisis is hitting the housing markets, by flooding of foreclosure properties, the side-effect is bringing the construction industry to a grinding halt. When there are huge inventory of unsold homes, inevitably new home building had to take a back seat for want of buyers.

The downward economy saw to it that the demand for new homes dwindle, due to the resultant cash-crunch and consumers left with only meager amounts, to take care of their buying the day-to-day needs. From shopping malls to hotels and resorts, the financial strain is felt everywhere, whereby the revenues of all these outfits got thinning. Read More…

LENDERS & SERVICERS

What the research studies reveal about Strategic Default?

When the foreclosure problem is thickening by delinquencies of financially down home owners, there is also another phenomenon springing up recently. Those borrower-home owners, who can well-afford to pay the mortgage payments are refraining from doing so, on their own accord. These defaults are known as “Strategic Defaults” and are causing concern to the mortgage lending industry. Read More….

LUXURY HOMES

The Sleeper awaken by the Lender

Foreclosure threatens the luxury homeowners, again. Bayview Loan Servicing LLC made a foreclosure filing against the luxury home on 855 Visionary Trail, Golden, CO 80401. The address may sound very familiar to lots of people. They know the home that is located there as the "Sleeper House" or Sculptured House. The home, built by architect Charles Deaton in 1963 is a distinctive elliptical curved house that featured in the 1973 Woody Allen sci-fi comedy, Sleeper and since then it is inevitably linked to futurism and UFOs. Read More…

COMMERCIAL

Commercial property sales in San Francisco

Property selling, residential or commercial depends on location mainly. This is proved once again at San Francisco that its historic submarket – Jackson Square – saw to it a mixed-use commercial property, The Pansini building along with another building changed hands for a good price of $16 million put together, even in this not-so-bright commercial real estate market. Read More…

MARKET UPDATE – BAY AREA

Home values are rising again in Bay Area

A perusal of the market updates published in real estate-related sites, as well as  trusted sources of financial market like the Wall Street Journal, shows the home prices in some of the major cities of the 9-county San Francisco Bay Area have gone up steadily, with uneven rebound in prices though. Read More….

Where the SF Bay Area heading in foreclosure perspective?

In the 9-county SF Bay Area housing market, the number of new foreclosure filings is coming down consecutively for the last few months. Different interpretations are being offered by market analysts, as to the direction the foreclosure trend is heading, as far as SF Bay Area is concerned. Read More…