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Housing Inventory Increases, Listing Prices Fall – The Wall Street Journal

March 27, 2011 By

By Nick Timiraos of the Wall Street Journal
Click here for the full article

Memo to sellers: you’ve got more competition this spring. Price those homes accordingly.

Nationally, the inventory of unsold homes on multiple-listing services increased by 0.6% in February from one month prior. Over the past year, inventory is up by 13%, according to Move Inc. The data covers all single-family homes, condominiums, and town houses listed on nearly all multiple-listing services across the country.

For the month of February, listings increased in 107 markets versus January, and they declined or stayed flat in 39.

Cities with the largest monthly declines in unsold homes listed for sale in February:

Fort Lauderdale, Fla. (-12.5%)
Riverside, Calif. (-8.7%)
Tulsa, Okla. (-6.1%)
Cities with the largest monthly increases in unsold homes listed for sale in February:

San Francisco (6.3%)
San Jose, Calif. (5.5%)
Boulder, Colo. (5.2%)

Filed Under: first time home buyers, Selling your Home, What's New? Tagged With: , , , , , , , , , ,

Home resales fall 9.6% in February and prices are near 9-year low – LA Times Online

March 26, 2011 By

By Jeffry Bartash – LA Times online – March 21, 2011, 2:33 p.m. view the entire article here
The National Assn. of Realtors data reflect a continued slump in the real estate market. One bright spot is that first-time buyers accounted for 34% of home sales last month, up from 29% in January.

Washington —— Sales of previously owned homes dropped 9.6% in February and prices fell to their lowest level since 2002, reflecting a continued slump in the U.S. real estate market.

The National Assn. of Realtors on Monday said home resales dropped to an annual rate of 4.88 million from an upwardly revised 5.4 million in January. The data is seasonally adjusted.

Economists surveyed by MarketWatch expected sales to drop to a rate of 5.1 million.

Sales of new and used homes have been down in the dumps since a housing market bubble burst during the recession. High unemployment, combined with stricter lending standards, have made it harder for Americans to buy homes despite low interest rates.

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Mortgage Insurance will be killing off more and more short sales this year…

March 10, 2011 By

Have you heard? There are a large number of loans that have been either sold on the secondary market, or the lenders have some how insured themselves against future losses on their 2nd trust deeds with their own Mortgage Insurance.

You as a struggling homeowner might be thinking, I don’t have or pay mortgage insurance, and you are correct! This is lender paid Mortgage Insurance, and it will be the death of thousands of short sales this year!

Here is an example of what I’m referring too… Let’s say that you purchased a home in 2005 for $500,000 and you did an 80/20 loan ~ financing a total of 100% of the purchase price (an 80% first of $400,000 and a 20% second of $100,000). The benefit of structuring your mortgage in this manner was that you didn’t have to pay for PMI (Private Mortgage Insurance). PMI covers the lender or leverages their risk of loss on a higher loan to value if you as the borrower default. You as a borrower could typically save some money, come out with a lower monthly payment and by financing the entire purchase amount without having the M.I. you had a greater tax deduction.

Moving forward to 2011 – we are just now starting to see borrowers that are in the short sale negotiating phase being asked for very unrealistic contributions, in addition to being asked to sign 5~10 year promissory notes on these 2nd mortgages. In the past we have been able to work around the contributions, and in some cases negotiate the promissory note way down or even have it removed. Right now, that is not the case! PMI, TPI, and other Mortgage Insurance Companies are literally forcing the borrower and the 1st lender into foreclosure, and they are not happy about that.

Here is the behind the scenes challenge right now… The first lenders won’t allow the second lenders to get more than what they are paying them, or in certain cases won’t allow the buyer or borrower to pay then 2nd lender more money as the 1st lender is typically taking a larger loss – and they would then want the money. We are seeing so many sellers that simply don’t have the funds to bring in, can’t sign a promissory note, or in most cases just can’t do that because the first lender won’t allow that – the only alternative is for the seller to then go with a deed in lieu of foreclosure. The deed in lieu sounds a little better than a foreclosure right? Well most of time a deed in lieu of foreclosure is not an option because of marketing time, or because there is a 2nd mortgage on the property or other tax liens, IRS liens, etc.. and If there are, the 1st lender then has to accept financial responsibility for those liens should they accept a deed in lieu… so really the only thing left is the foreclosure.

So the million dollar question really is… How is the Mortgage Insurance Company helping the 2nd lenders secure more money or protect their losses? In most cases the are wiped out in the foreclosure making this a total loss to them, and then the insurance company would then have to write a bigger check to the investor. How is the M.I. company coming out ahead on this? Are they being subsidized? Is there money transferring hands behind the scenes that we are not privy too? Who is looking out for the innocent victim here which is the seller that is a true hardship, the borrower who has done everything right in order to make sure that they minimized damage to their credit, the property, values to the neighborhood, YOUR neighborhood?

This just isn’t right, and I would love to hear your thoughts and opinions on this… all you have to do is leave a comment below.

Something has to change and it has to change quickly!

Filed Under: Selling your Home, Short Sale Updates, What's New? Tagged With: , , , , ,

Only 1 in 4 Got Mortgage Relief

March 10, 2011 By
Sarah Larson had to prove to Bank of America that she wasn't dead when she tried to get the mortgage modified on her Minneapolis home.

Republicans now want to kill HAMP Program that made only a small dent
By ALAN ZIBEL And LOUISE RADNOFSKY

Sarah Larson had to prove to Bank of America that she wasn't dead when she tried to get the mortgage modified on her Minneapolis home.


Sarah Larson had to prove to Bank of America that she wasn’t dead when she tried to get the mortgage modified on her Minneapolis home.

Just one in four of the 2.7 million homeowners who sought to participate in the Obama administration’s signature mortgage assistance program have succeeded in getting their monthly payments reduced.

The rest failed to qualify for the program or were disqualified after they were initially accepted into the program, according to an analysis by the Wall Street Journal of data on applicants to the program newly released by the Treasury Department.

In all, about 680,000 homeowners who applied for the Home Affordable Modification Program, or HAMP, had received permanent modifications of their loans and were making timely payments or were still in the trial phase as of December.

Read the full article here

Filed Under: Financing, Loan Modifications, Selling your Home, Short Sale Updates, What's New?, who can help me get financing

Survey: Gloomy Views Persist on Housing, Economy – WSJ Online

March 8, 2011 By
Getty Images

FEBRUARY 28, 2011, 9:35 AM ETBy Nick Timiraos

Getty Images

The number of Americans who believe that buying a home is a safe investment continues to fall, according to a new survey on housing attitudes from Fannie Mae.

Just 64% of respondents said they believe a home is a safe investment, down from 70% one year ago and 83% in December 2003.

The survey found that more Americans say it’s a bad time to sell a house, and fewer Americans say it’s a good time to buy. Still, the share of respondents who believe home prices will stay flat or increase over the next year (78%) posted a slight increase from one year ago (73%).

“We’re looking for a little pickup in 2011 over 2010, but nothing that would say the housing market is rebounding,” says Doug Duncan, chief economist at Fannie Mae. If oil prices climb higher, “that could easily temper whatever bits of optimism exist,” he said.

Fannie’s national housing survey included other highlights:

The economy: The survey found that Americans’ gloomy views on the economy were essentially unchanged from one year ago, with almost two-thirds saying that the economy is on the wrong track.

While 19% of people said their income had increased significantly in the past year, some 34% said that expenses had increased significantly. “That to me is a signal of the difficulty that the economy has in growing robustly,” said Duncan.

Mortgages: Nearly three-quarters of respondents said they thought it would be harder to get a mortgage in the future, up from just over two-thirds one year ago.

Read the full article here

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Why 2011 May Be the End of the Housing Crash

March 6, 2011 By

One of many relevant articles or in this case videos testifying as to why now might be a good time to buy a home. I would love to hear your thoughts…

There might finally be some good news this year about the nation’s dismal housing market. Or, at least, the bad news could stop.

Either way, it will be welcome relief for current homeowners as well as for potential real-estate investors. Reasons to be optimistic have been sadly lacking since the housing bubble burst in 2006.

For sure, last week we learned the widely watched S&P/Case-Shiller home-price index fell 1% in December, its fifth straight decline. The index tracks 20 major markets.

Read the full article here

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New Fed Rule for Mortgage Brokers

March 4, 2011 By

THIS CHANGES EVERYTHING!!!
By LYNNLEY BROWNING – Published: February 17, 2011

STARTING April 1, under a new compensation rule from the Federal Reserve, borrowers who get their mortgages through brokers will most likely pay less for their services and must be offered the lowest possible interest rate and fees for which they qualify.

The new rule also affects those dealing with small banks and credit unions, which typically do not fund loans from their own resources. But most banks and other direct lenders, including the few mortgage companies that function like banks, are exempt.

The new rule is known as the Loan Originator Compensation amendment to Regulation Z, part of a strengthened Truth in Lending Act passed by Congress in 2008. Designed to prevent consumers from being steered into high-cost, risky loans, it covers how a loan originator — or any person or company that arranges, obtains and/or negotiates a mortgage for a client — is paid.

Under the new rule, a lender can no longer pay a loan originator a lucrative rebate known as a yield-spread premium, which is tied to the rate or terms of the mortgage. Banks and other lenders can continue to pay commissions to brokers, but these payments must now be based solely on the loan amount.

In the past, the higher the interest rate and points, the more money a broker stood to earn.

Brokerage firms typically earn a yield-spread premium of 1.5 to 2.5 percent of the loan amount, with higher-rate loans paying closer to 2.5 percent. The brokerage and its broker, or loan officer, typically split the rebate. On a $400,000 loan at 5.25 percent, that might total $8,000, based on two points paid, with a point being 1 percent of the loan amount.

In the new system, the brokerage can earn a fixed commission from the lender, but the amount is not tied to the loan terms. Also, the brokerage cannot pass on a part of the commission to the broker, who must now be paid an hourly wage or salary. The exception is for loans where the lender pays the borrower’s points to the brokerage, typically for higher-rate loans. (The commission range is expected to be 1.5 to 2.5 points.)

Read the full article here

Filed Under: Financing, first time home buyers, Reverse Mortgages, Selling your Home, What's New? Tagged With: , , , , , , , ,

Investors scoop up foreclosed properties; pending home sales up in California

March 3, 2011 By

By Derek Kravitz AP real estate writer
Posted February 23, 2011 at 5:11 p.m.

WASHINGTON — Home sales are starting to tick up after the worst year in more than a decade. But the momentum is coming from cash-rich investors who are scooping up foreclosed properties at bargain prices, not first-time homebuyers who are critical for a housing recovery.

The number of first-time buyers fell last month to the lowest percentage in nearly two years, while all-cash deals have doubled and now account for one-third of sales.

A record number of foreclosures have forced home prices down in most markets. The median sales price for a home fell last month to its lowest level in nearly nine years, according to the National Association of Realtors.

Lower prices would normally be good for first-time homebuyers. But tighter lending standards have kept many from taking advantage of them. With fewer new buyers shopping, potential repeat buyers are hesitant to put their homes on the market and upgrade.

Cash-only investors are most interested in properties at risk of foreclosure. They can get those at bargain-basement prices.

“The cash-rich investors can come in and get foreclosed properties at incredibly favorable prices,” said Paul Dales, senior U.S. economist for Capital Economics. “The average Joe can’t take advantage because they simply cannot get the credit to buy.”

Sales of previously occupied homes rose slightly in January to a seasonally adjusted annual rate of 5.36 million, the Realtors group said Wednesday. That’s up 2.7 percent from 5.22 million in December.

Read more here:

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Mortgages in foreclosure process hit record

March 2, 2011 By

Kathleen M. Howley, Bloomberg News – Friday, February 18, 2011

A record share of U.S. mortgages were in the foreclosure process at the end of 2010, matching the all-time high, as lenders and servicers delayed home seizures to investigate charges of improper documentation.

About 4.63 percent of loans were in foreclosure in the fourth quarter, up from 4.39 percent in the previous three months, the Mortgage Bankers Association said in a report Thursday. The combined share of foreclosures and loans with overdue payments was 14 percent, or about one in every seven mortgages.

Property seizures plunged at the end of 2010 as lenders such as Bank of America Corp. and JPMorgan Chase & Co. temporarily halted proceedings to review their handling of court documents. That left more homes in the foreclosure process with their status unresolved. Repossessions tumbled 32 percent in the fourth quarter from the prior period, according to data from RealtyTrac Inc. in Irvine.

“It’s clear that the process issues were driving the increase,” said Jay Brinkmann, chief economist of the Mortgage Bankers Association. “We would expect the foreclosure inventory to start coming down as that gets resolved and the court situations get cleared up.”

That share of mortgages in foreclosure tied the record reached in the first quarter of last year.

Read more here

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Rising construction costs could boost new-home prices soon

February 25, 2011 By

By Lew Sichelman – February 13, 2011

The overall price for building materials has been rising year-over-year since the summer. That could mean, in the words of one industry analyst, ‘If you want to buy a new house and are in a position to do so, you should do it now.’

With interest rates near rock-bottom levels, most people realize it’s only a matter of time before loan costs start to rise. After all, what comes down in the mortgage world always has a way of going up.

But what seems to be forgotten is that construction costs also will eventually go back up too. And the rumblings of that phenomenon are already being felt in most building-product categories.

The question now is, how long can home builders hold out before they start raising their prices to reflect higher production costs? Or, more important, how big a window of opportunity do would-be buyers have before that brand-new home they’ve had their eyes on becomes unaffordable?
“Builders are resisting raising their prices, but ultimately they’re going to have to,” said Bernard Markstein, vice president of forecasting and analysis at the National Assn. of Home Builders. “Builders are not going to build at a loss.”

Residential construction costs are still down from their peak in September 2008, Markstein said. But the overall price for building materials has been on the upswing year over year since the summer. And in December, the producer price index — published by the Bureau of Labor Statistics for selected building materials — registered its largest gain of 2010, 4.5%.

Read the full article here

Filed Under: Financing, Selling your Home, Short Sale Updates, What's New?
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