Administration reforms HAMP

After seeing that HAMP failed to reach the targeted homeowners, the Obama administration announced the extension of the program to bring relief to a larger share of struggling homeowners as well as renters. Principal reduction is one of the key adjustments the modification centers around. HAMP currently includes an option for servicers to provide underwater homeowners who are struggling with their payments with a modification that includes principal write-down. Read More..

Investors Will Need To Pre-Qualify For REO-To-Rental Sales

The FHFA (Federal Housing Finance Agency) encouraged investors interested in buying government-owned REOs in bulk for use as rental properties to register with Fannie Mae. They practically pre-qualify for purchase as an eligible bidder. The agency announced that the pilot transaction will take place in near term which is vague enough to keep investors in the line for registering. Read More..

LENDERS & SERVICERS

Illinois Attorney General filed lawsuit against Standard & Poor’s

Illinois Attorney General Lisa Madigan sued Standard & Poor’s (S&P) last week, alleging the ratings agency used deceptive practices by inflating ratings of MBS (mortgage-backed securities) investments. Madigan strongly believes this was one of the main cause of the financial crisis that hit not just the country but the globe. Read More..

Friday Is the Day: The Robo-Signing Settlement Counts the Participating States

After more than 15 months of back and forth, the controversial robo-signing settlement is ready to be signed. According to Wall Street Journal’s Ruth Simon, state attorneys general have a couple of days left to sign on to the settlement draft proposed last Monday. The settlement is aimed to resolve claims against the nation’s top five mortgage servicers surrounding documentation errors in foreclosure processing. Read More..

COMMERCIAL

Glens Falls Rogers Building scheduled for foreclosure auction

The housing crisis affected many prominent buildings across the country. Glen Falls’ Roger Building is yet another prominent building that is no scheduled to be sold at foreclosure auction due to foreclosure. The property that sits vacant for a couple years now it is located at 21 Bay St., across from City Park and Crandall Public library.Read More..

MARKET UPDATE – PALM SPRINGS AREA

Palm Springs reported 13% drop in foreclosure filings

Foreclosures were down 13% across the Coachella Valley in the last month of 2011 compared to the same month a year ago, the most recent report issued by RealtyTrac highlights. Read More..

Mortgage defaults on the rise in Coachella Valley

Good times are past now, as the Coachella Valley housing market is facing another flood of foreclosures. The data published by Irvine-based real estate data provider, RealtyTrac shows that foreclosures are up 6% across the area in November, compared to the same period a year ago. This ends the seven sunny months of double-digit declines. Read More..

Bay Area foreclosures drop sharply

Coachella Valley foreclosures are up 6% compared to a year prior, ending a seven-month trend of double digit drops. The numbers provided by RealtyTrac put the total mortgage default notices and bank repossessions to 1,123, while there were 1,062 a year ago. Read More..

The need for a defined foreclosure timeline

Both Freddie Mac and Fannie Mae representatives upheld the companies’ practice of collecting penalties from servicers who fail to meet defined timelines for processing foreclosures. It is clear now, that both Fannie and Freddie representatives aim to keep borrowers in their home, because it is the better outcome for GSEs, but Edward Seiler, a director in Fannie’s National Servicing Organization stated that sometimes servicers face difficult decisions and sometimes “a borrower just shouldn’t be in that home”. Read More..

The Foreclosure Review Process Has Started

Independent consultants will review about 4.5 million foreclosure files in the upcoming months, and they will be looking for any harm caused by improper practices uncovered last year.  Consultants involved in the review process are approved by the OCC and the Federal Reserve. This is how the April ruling of federal bank regulators is implemented, which targets 14 of the nation’s largest mortgage servicers. Read More..

LENDERS & SERVICERS

Bill to replace GSEs with Temporary Government-Owned Entity

Sen. Johnny Isakson has submitted his idea for reforming the housing finance system. Isakson’s 30 year of experience as a real estate agent made him to develop an original plan for a reform. He introduced legislation Thursday that would wean the secondary market off government support and pay taxpayers back for the bailout of Fannie Mae and Freddie Mac. Read More..

Barofsky Hammered the Obama Administration over Its Solutions for the Foreclosure Crisis

Neil Barofsky, the former special inspector general for the Troubled Asset Relief Program analyzed the Treasury Department and the Obama Administration’s actions in solving the foreclosure crisis. He called the administration’s Home Affordable Modification Program a “failure” during a Tuesday night panel discussion, saying that fears of a political backlash led to the administration’s weak response to the housing crisis. Read More..

COMMERCIAL

$19.1 million for three Pioneer Square buildings

Three Pioneer Square buildings were purchase out of foreclosure by a Canadian investment company, the Seattle Business Journal reported. The buildings were put into foreclosure since September and they include the iconic Grand Central Building on First Avenue South. Nicola-Crosby Real Estate Investments, a Vancouver-based company said on its website, that its Spire US LP fund is making investments in real estate in Washington, Texas and Florida. Read More..

MARKET UPDATE – NAPLES AREA

Lee County foreclosures down in November

November brought a significant improvement in Lee County’s housing market as new foreclosure filings were down. The numbers highlighted in a report issued by the Lee County Clerk’s Office show a total of 587 filings, down from 642 in October. Read More..

Sole condo-hotel lost in foreclosure

The Ocean condo-hotel in Sunny Isles Beach is heading to a foreclosure auction as the owner lost a $19.8 million foreclosure judgment. This means the unsold units of the property will be sold at auction. Read More..

Southwest Florida homeless mission delays foreclosure

The founder of Bread of Life Mission in Punta Gorda delayed foreclosure by filing for bankruptcy. The homeless mission was scheduled to be sold at a foreclosure auction on Wednesday. Read More..

After lots of hue-and-cry was raised from all quarters, and the government’s legal wing poked their nose into the affair, the mortgage industry relented with suspension of their foreclosure sales, until they check up the records all over again. But this created more confusion than good, for the distressed home owners; and the uncertainty prevailed as to when the stalemate will be cleared was opposed vehemently from the realtors’ side.

News has come that the real estate industry can heave a sigh of relief – the government sponsored enterprises and giants in housing trade – Fannie Mae and Freddie Mac – have reportedly begun telling real-estate agents across the country, to resume sales of foreclosed properties, kept pending with animated suspension for the last two months.

Informed circles from Fannie Mae said last Friday, they have lifted the moratorium on foreclosed-property sales after consulting with their government regulator – The Federal Housing Agency – and after review of the affected properties under its fold. But it is still not clear, how soon the resumption will take place, since the mortgage servicers are yet to clear the dock of reviewing enormous paper work involved.

Statistics go to show that the two government agencies – Fannie Mae and Freddie Mac –  owned and re-possessed after foreclosure, together nearly 240,000 properties by the close of September, worth approximately $24 billion. An intricate situation has arisen, due to the foreclosure moratorium that it will be difficult to sell this huge lot and any further delay would mean higher carrying costs in their books, apart from prompting buyers that had been already on contract, to lower the asking price or altogether walk away from the deal.

It is pertinent to remember here that these agencies were at a loss already, costing the tax-payers $134 billion so far. It seems Fannie will resume first property sales with loans from Bank of America; PNC Financial Services; Ally Financial; J.P. Morgan Chase; OneWest Bank and Sovereign Bank.

Now for the actual figures, it is reported that as many as 332,172 U.S. homes were caught in the foreclosure fiasco of all the three stages – pre-foreclosure by receipt of default notice from lenders; scheduled foreclosure action and repossession by lenders after foreclose sale public auction. Actually one in every 389 U.S. housing units received a foreclosure filing in the month of October 2010.

The break up includes properties receiving foreclosure filings in various States as follows: California – 66,475 properties; Florida – 56,858; Michigan – 19,288; Illinois – 16,969; Arizona – 16,538; Georgia – 14,850; Nevada – 14,205; Ohio – 13,233; Texas – 13,008; and Washington – 6,346.

It can be noted that the worst-hit foreclosure states like Nevada, Arizona, Florida and California have found a place in the above list, invariably in October 2010 also. Besides, the top foreclosure cities for the month of October have been identified by Realtytrac as: Las Vegas, Nevada; Miami, Florida; Chicago, Illinois; Phoenix, Arizona; and West Palm Beach, Florida in that order.

The number of foreclosure properties sold through housing markets of the country in September 2010 has been recorded as 26,513. This is down by 14.81%, compared to foreclosure property sales of August, when 31, 124 properties got sold.

However there is an encouraging bit of statistics with regard to average price of home sales in October at $172,153, which went up slightly by 2.24% from $168,375 in September. This is also good news from the real estate business view point.

As on date, Realtytrac reports that there are 2,196,774 U.S. homes lying unsold from the foreclosure property listings of all the housing markets in the country. And they are available for buyers at an average sale price of $173,331.

The matter received wide advertisement – of course dubiously – among the real estate circles; and realtors took side with the distressed home owners, for receiving such ill-treatment at the hands of mortgage servicers. Lots of hue and cry was raised by statements from realtors and counter-statements from lenders, including the top names like Bank of America, Morgan Chase and Ally Financial.

From the administration side, the Attorneys-General of all the 50 States took notice of the legal impact and a task force consisting of federal regulators and members of the concerned industries was formed, to go into the allegations. Bank of America, followed by similar other mortgage servicing banks, issued moratorium to foreclosure process, halting further foreclosure processes till they conducted in-house reviews on the allegations.

The Treasury Department has come out with a latest announcement that federal investigators, looking into problems with mortgage foreclosures nationwide, have found widespread and “inexcusable” breakdowns in basic controls in the foreclosure process. The Financial Stability Oversight Council, the new panel of regulators is reportedly seized of the problems and potential risks to the financial system; and is determined that “these problems must be fixed”.

According to the Oversight Council, the main objectives for federal investigators are designed to include – “determining the scope of the foreclosure problems; holding wrongdoing are given redress; and compelling the mortgage servicing industry to better inform homeowners about alternative to foreclosure.”

The magnitude of the surfaced foreclosure problems is extensive – ranging from flawed and fraudulent paperwork, relating to thousands of residential foreclosures to questions about improper and incomplete loan transfers, made by mortgage servicers.

Reportedly the investigators have already started their work of on-site examination and are expected to complete their field work by the end of the year; they will submit their report to the Oversight Council in January; and then plan to aggregate their findings for regulatory actions so as to rectify the problems.

The US Census Bureau released their report for the quarter ending September 2010 showing the percentage of households in possession of their own homes remains at 66.9 percent; and there was no significant change in that from the previous quarter. The homeownership rate touched a level lower than this – 66.7 percent – only in the year 1999.

Looking back in the history of US real estate business, for a ten year period from 1985 to 1995, the country was maintaining a homeownership rate of nearly 64 percent consistently. Then the real estate boom came into vogue – fueled by government encouragement for the people that were homeless to get a home and lax-lending of home loans. The homeownership rate skyrocketed, firing all the four engines and peaked to above 69 percent in 2004.

When the housing bubble burst, it brought down the homeownership rate, which is still continuing by more people losing their homes to foreclosure trouble. As of date – 14.4 percent of all U.S. homes – nearly 18.8 million – are vacant according to government figures; and the rate without counting vacation home will be 11 percent in all.

Over the past four years, when the housing crisis was acute, the number of vacant homes has gone up from 16 million in 2006 to nearly 19 million at the end of 2008. The Census Bureau states that the total number of U.S. housing units is 131 million homes.

Out of this, 2.5 percent of all primary residences are vacant and offered for sale; and 10.3 percent of homes for rent are vacant.

During the quarter ended September 2010, as many as 930,437 U.S. homes fell into foreclosure, in all the three stages of the foreclosure process. Actually, 1 in 139 U.S. housing units received a foreclosure filing during the quarter. This is an increase by 4 percent from the previous quarter; but a decline by 1 percent from the same quarter in 2009.

According to the chief economist of NAR, it is true that a housing recovery is taking place, but it depends upon the duration and impact of the foreclosure moratorium recently introduced by some lenders, as to how choppy the recovery would be. He added – the overall direction should be a gradual rising trend in home sales; buyers responding to historically low mortgage interest rates; and very favorable affordability conditions on home prices now prevailing.

President of NAR also confirms this as reportedly saying – home prices are running about 22 percent less than five year ago, when they were bid up by the biggest housing rush on record. What this means is housing has become more affordable; and in many areas the monthly mortgage payments by home owners are less than monthly rent.

Viewed from another angle, the foreclosure crisis has caused lower home prices. Government circles said last week the legal status and uncertainty over the existing foreclosed homes, because of the allegations on flawed foreclosure documentation, could further depress home prices; and this way the recovery of the housing market will be eventually delayed.

Statistics go to show that distressed properties sale accounted for 35 percent in September 2010, as against 29 percent last year. The special inspector general of the government’s Troubled Asset Relief Program said 5.5 million homes are subjected to foreclosure filings in the country; and 11.7 million homeowners have lost their properties since January 2009.

On the foreclosure scandal scenario – during the last several weeks, major lending banks including Bank of America and JP Morgan Chase etc. have been hectic in going through their own foreclosure policies and procedures. The Federal Reserve Bank is seized of the situation and according to its chairman remarked, they are concerned about reported irregularities in foreclosure practices, at a number of large financial institutions. And they are looking into them to make tighter controls.

Obviously these reviews and remedial action will delay the recovery of home markets.

According to Realtytrac. the foreclosure hotbeds are Nevada; Arizona; Florida and California in that order; 19 out of the top 20 metropolitan cities with highest foreclosure rates are from these four states. The Las Vegas-Paradise, the entertainment den of Nevada during the last decade, recorded the highest foreclosure rate in the quarter of July-September; one in every 25 homes in this metro has received a foreclosure filing; it is more than five times of the national average foreclosure rate.

The other top 10 metropolitan cities registered the highest foreclosure rates in the latest quarter ended September are – Cape Coral-Fort Myers, Florida; Modesto, California; Stockton, California; Merced, California; Riverside-San Bernardino-Ontario, California; Miami-Fort Lauderdale-Pompano Beach, Florida; Phoenix-Mesa-Scottsdale, Arizona; Bakersfield, California; and Vallejo-Fairfield, California – in that order.

Regarding annual increase in the third quarter, the report says overall 133 out of 206 metropolitan statistical areas, with at least 200,000 residents fall into this bracket, by showing increased foreclosure activity.

According to experts at Realtytrac, the foreclosure epidemic is spreading from the states where they hit first, to areas that had not been previously affected – the examples being Idaho and Hawaii. This shows the foreclosure situation is worsening due to growing unemployment; and slow job growth whereby home owners continue to fall behind their mortgage payments. The nation’s unemployment rate continues to remain at 9.6 percent during September.

As regards lending banks repossessing delinquent properties, the figures this year have also been going up. During the latest quarter, the top 3 cities with highest bank repossessions are – Phoenix metropolitan area -14,317 homes; Miami metro-12,963; and Chicago in third position with 12,568. Altogether, over the first nine months of this year the total number of properties repossessed is 816,000; and the figure is heading towards more than a million before year end

Realtytrac has released its latest foreclosure activity report, by collection of data from 2,200 counties across the country, where 90 percent of the U.S. population reside. As a whole, during the third quarter of this year, a total of 930,437 U.S. properties fell into the foreclosure problem in all the three stages; pre-foreclosure, scheduled foreclosure sale public auction; and repossession by lenders after foreclosure auction. This is a 4 percent increase from the quarter ended June and a decrease by 1 percent, compared to third quarter of 2009.

The stage-wise foreclosure figures are as follows:

In the quarter under report totally 269,647 properties from all the home markets were issued with Notice of Default (or Lis Pendens from Courts that they are taken foreclosure action upon) on home owners behind their mortgage payments. This figure shows a 21 percent decrease from the third quarter of 2009 when it stood at 342,000; and 1percent decrease from the previous quarter.

Scheduled foreclosure auction was reported – highest ever for a quarter in the history –  on 372,445 properties; an increase by 4 percent from the third quarter of 2009; and an increase of 5 percent from the previous quarter.

Bank repossessions also went up to record high figure of 288,345 properties in the third quarter; 22 percent increase from that of 2009; and increased by 7 percent compared to the previous quarter.

Nearly half of the above foreclosure activity – 50 percent to be exact – is reported as: California has contributed 21 percent by 191,016 properties on the total foreclosures, being the highest of all. Florida-157,026 properties came second; Arizona-49,103 properties getting third place; Illinois by posting 47,802 properties ranked fourth place; and Michigan with 46,100 properties posting foreclosure filings in the third quarter, as the fifth ranking State.