Monday, December 28, 2009

Ten Reasons for Buyer Caution when Buying Foreclosures

  • Some things to look out for and pay attention too when buying foreclosures. The cheap price of the foreclosures had better be worth the costs of repairs, as well as your time and inconvenience. Here is a neat little checklist put together by a professional cleaning and restoration specialist. It offers some good advise when finding or buying foreclosure homes, or any other property in bad shape.

    Foreclosures: Ten Reasons for Buyer Caution
    Foreclosed homes aren’t always the best deal in town – even if they do come with a price tag that appears to be lower than some other homes in the neighborhood.Here are 10 reasons why that is true, offered by Vince Mastronardi, president of On-Site Specialty Cleaning & Restoration in suburban Detroit.
    • No heat in the winter. When a home has been left unheated, buyers run a risk of damaged pipes.
    • Not removed but ripped. Thieves and even angry former owners can do a lot of damage when they depart with fixtures and key systems like heaters and air conditioners.
    • Peeling, bubbling, and discoloration. Water incursion isn’t always obvious, but these are signs.
    • Mold. Where there is water there is mold. Look inside cabinets, behind drawers, and around built-ins.
    • Blocked drains and pipes. Sewer backups can be expensive to fix.
    • Black cobwebs. This is the result of a malfunctioning furnace, common in properties where there hasn’t been maintenance for a long time.
    • Homemade and handy. Where renovations don’t look professional, check with the municipal authority. They may have been completed without permits and that could mean they have to be redone.
    • Fresh paint everywhere. What is the seller covering up?
    • Check the basement. Look for discolored subflooring, which can point to mold. And search for asbestos, common in older homes that haven’t been brought up to code.
    • Air quality. Include air and surface testing in a home inspection. It’s a few hundred dollars well spent.

Thursday, December 10, 2009

U.S. Foreclosures to Reach 3.9 Million in Second Record Year -

US Foreclosures won't peak until after Unemployment does. This is pretty scary because the economic data seems to be indicating that the peak of Unemployment isn't any time soon.

The areas most affected by foreclosures continue to be those that had the most boom. Nevada, California, Florida, and Arizona, but areas like Michigan, and Utah are starting to see substantially higher foreclosure rates as well.

Government Steps in With new Short Sale Guidelines

  • "There is a huge problem in our country with short sales. In Utah, as well as nationally. Because of the housing boom, prices were over inflated. Now, many homeowners owe more on their house than they are worth. These people are generally not good savers anyways, and so have no way to sell their homes unless someone pays the difference. Government is once again, stepping in with some assistance, finding ways to reward the irresponsible: The U.S. Treasury Department announced new guidelines this week designed to make short sales go more smoothly. To qualify under these new guidelines: * The property must be the home owner’s principal residence. * The home owner must be delinquent on the mortgage or close to defaulting. * The loan must have been made before Jan. 1, 2009, and be for less than $729,750. * The borrowers’ total monthly mortgage payment must exceed 31 percent of their before-tax income. Under the plan, borrowers will receive $1,500 from the government for selling homes for less than the amount of their mortgages. Mortgage-servicing companies will get $1,000 for each completed short sale. Second-mortgage holders can receive up to $3,000 of the sales proceeds in exchange for releasing their liens. Investors who hold the first mortgage can collect up to $1,000 from the government for allowing the payments. Borrowers who complete a short sale under the program must be “fully released” from future liability for the debt, according to the guidelines."

    tags: short sale guidelines, short sales

Posted from Diigo. The rest of my favorite links are here.

Monday, November 23, 2009

One in 7 U.S. mortgages foreclosing or delinquent | Reuters

  • Nationwide Foreclosures are at their highest rate EVER, and this isn't expected to peak until the middle of next year. The bulk of new homes in default is of conservative conventional loans, and is primarily a result of the high rates of unemployment.

    tags: foreclosures, mortgage, delinquincies

    • A record one in seven U.S. mortgages were in foreclosure or at least one payment past due in the third quarter
    • U.S. mortgage delinquency rates and the percentage of loans that entered the foreclosure process also jumped to records from July to September, the Mortgage Bankers Association said on Thursday.
    • Rising job losses were behind the increasingly bleak portrait of the housing market in a trend that will continue into next year, the group said in data that adds to recent evidence of a still-struggling housing market.
    • record foreclosures will add to the growing supply of unsold homes, sapping the housing market as it attempts to recover from the worst slump since the Great Depression.
    • The MBA said the percentage of loans in foreclosure rose to 1.42 percent
    • "Foreclosures remain the biggest hurdle to the housing recovery," said Michelle Meyer, economist at Barclays Capital in New York.
    • "Foreclosures will be worse in the first part of 2010 and we do not see a peak in foreclosures until the middle of next year."
    • conservative, prime fixed-rate loans often sold to homebuyers with the highest credit ratings continued to represent the largest share of foreclosures started and were the biggest driver of the increase in foreclosures
    • In fact, 33 percent of foreclosures started in the third quarter were on prime fixed-rate loans and those loans were 44 percent of the quarterly increase in foreclosures, Brinkmann said.

Gloomy outlook, just when the housing market and recession appeared to have peaked for the worst...

Monday, October 19, 2009

The Associated Press: MBA: Foreclosures, unemployment to peak next year

  • Foreclosures will likely continue to rise up through next year as unemployment continues.

    tags: foreclosures

    • Foreclosures will peak by the end of next year and unemployment will climb above 10 percent as the housing market and U.S. economy grapple with the aftermath of the recession, the Mortgage Bankers Association's chief economist said Tuesday.
    • fixed mortgage interest rates remaining below 6 percent.
    • Many lenders have issued a moratorium on foreclosures, causing a drop in the number of discounted, bank-owned properties hitting the market this year. But some economists expect that a wave of foreclosed properties could hit the market in 2010, dampening home prices again.
    • rising unemployment will lead to a growing number of foreclosures at least through the end of next year, Brinkmann said.
    • "We're forecasting about another 10 percent, roughly, price decline between now and the first quarter next year," he said.

      Mortgage rates, meanwhile, will average about 5 percent through the end of this year, then rise to 5.6 percent by the end of 2010. That should help fuel a 12 percent increase in home mortgages next year, but home refinancing will decline as mortgage rates edge higher, he said.

      "We're assuming, in a sense, weak or little inflation here," Brinkmann said.

Posted from Diigo. The rest of my favorite links are here.

Thursday, October 15, 2009

Foreclosures rise 5 percent from summer to fall

  • Unemployment is the main reason US foreclosures continue to rise. The recession might technically be over, but it really won't be over until people can be confident they will have enough money to survive.

    tags: foreclosures

    • The number of households caught up in the foreclosure crisis rose more than 5 percent from summer to fall
    • The foreclosure crisis affected nearly 938,000 properties in the July-September quarter
    • Unemployment is the main reason homeowners are falling into trouble. While the economy is likely out of recession, the unemployment rate — now at a 26-year high of 9.8 percent — isn't expected to peak until the middle of next year.

Friday, September 18, 2009

No relief from foreclosure heat in August

  • Bank Repossessions were down, but defaults keep increasing. With foreclosures doing what they're doing it will still be a long time before the housing recovery happens.

    tags: foreclosures, reos

    • month-over-month and year-over-year decrease in bank repossessions (REOs)
    • total foreclosure activity in August remained close to the record high set in July
    • increasing defaults and scheduled foreclosure auctions
    • 358,471 U.S. properties received foreclosure filings
    • an increase of nearly 18 percent from August 2008.
    • The August report demonstrates that there is still an ample supply of properties filling the foreclosure pipeline even
    • we also saw a record high number of properties either entering default or being scheduled for a public foreclosure auction
    • Nevada, Florida and California posted the three highest state foreclosure rates in August. These three states, along with Michigan, Arizona and Illinois, accounted for more than 60 percent of the nation's total foreclosure activity

Posted from Diigo. The rest of my favorite links are here.

Signs of Foreclosure Prevention Scam

  • If foreclosure prevention companies ask for money upfront, guarantee success, and ask you to send money too them, they are a foreclosure prevention scam.

    tags: foreclosures, prevention

      • Here are some red flags that should make a home owner run in the opposite direction:
        • If the company guarantees success. Nobody can guarantee a lender won’t foreclose or will modify a loan.
        • If the company wants money upfront. "We can't say all advance fees are illegal," Kirtz says, “But in most cases they're probably bogus."
        • If the company wants the home owner to send mortgage checks directly to the modification firm. The only certainty there is that the company will cash the checks.

Posted from Diigo. The rest of my favorite links are here.

Tuesday, August 25, 2009

Nationwide Foreclosures Leveling Out

  • The good news is that the number of subprime mortgage loan foreclosures are declining, the bad news is that 30 year fixed loans rate of default is rising. MBA Cheif Economist Jay Brinkman doesn't think this will change until employment goes up.

    tags: foreclosures, defaults, foreclosure

    • A record 13.16 percent of mortgage loans on one- to four-unit homes were delinquent or in the foreclosure process at the end of June

    • In Florida, 22.8 percent of mortgages were at least one payment behind
    • The rate of new foreclosure starts was essentially unchanged from March
    • drop in foreclosures on subprime adjustable-rate mortgage (ARM) loans
    • increases on other types of loans, including prime fixed-rate loans
    • MBA Chief Economist Jay Brinkmann said loan modification programs are holding foreclosure rates below where they would otherwise be
    • "It is unlikely we will see meaningful reductions in the foreclosure and delinquency rates until the employment situation improves,"

Posted from Diigo. The rest of my favorite links are here.

Friday, August 21, 2009

NAR: Sales rise for 4th straight month - Prices down 15%

  • National Home Sales were up for the fourth straight month, but compared with a year ago, prices of homes sold were down 15%. Signs that the housing market is recovering.

    tags: home sales, median, prices

    • Sales of previously owned homes rose for the fourth straight month in July -- a streak that hasn't occurred since June 2004

    • The median resale home price dropped 15.1 percent in July compared to the same month last year
    • distressed homes "continue to weigh down the median price. Another reason this price continues to drop is because a larger percentage of buyers are first time home buyers, and they purchase the more affordable homes.
    • price-to-income ratios have fallen below historical trends, there are more all-cash offers.
    • some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower-priced homes has spiked, and a lack of inventory is becoming a common complaint
    • First-time Home Buyer Tax Credit is also helping to boost sales

Posted from Diigo. The rest of my favorite links are here.

Friday, August 14, 2009

Underwater Mortgages to Skyrocket by 2011

  • Nearly half of all US households with mortgages could owe more than their homes are worth by 2011 according to the Deutsche Bank.

    tags: Foreclosures, Underwater

    • Underwater Mortgages to Skyrocket by 2011
      A new report by Deutsche Bank estimates that by 2011 nearly 50 percent of U.S. home owners with mortgages will owe more than their homes are worth.

      This estimate of 25 million borrowers is significantly higher than similar calculations by other economic and real estate analysts. For instance, Moody’s projected that 17.5 million will be underwater by early 2010.

      Currently, about 26 percent of home owners choose to walk away from their mortgages because their equity falls short of what they owe, according to a report by Paola Sapienza, a finance professor with Northwestern University
    • Not everybody agrees with Deutsche Bank’s analysis.

      Tom Lawler, a well-respected independent housing economist, wrote that given the recent increase in home sales in many areas, “there is absolutely no doubt that the DB ‘model’ forecast will show a huge miss to the down side on home prices.”
  • This seems a little too excessive to me. Personally, I highly doubt that home prices will continue to decline. In many areas they are already rising.

Posted from Diigo. The rest of my favorite links are here.

Tuesday, August 11, 2009

23% of US Homes Underwater

  • 23% of US Single Family Homes are Under Water According to Zillow. Median home values is down 22% since its peak. Home value declines have slowed down though.

    tags: home values, declines, foreclosures, underwater

    • 29 percent of homes that changed hands in June sold for less than their owner originally paid
    • At $186,500, the median home value was down 22.3 percent from its peak

Posted from Diigo. The rest of my favorite links are here.

Thursday, July 16, 2009

Highest Quarter Ever for US Foreclosures

  • tags: foreclosure, filings

    • 1,905,723 foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 1,528,364 U.S. properties in the first six months of 2009, a 9 percent increase in total properties from the previous six months
    • 15 percent increase in total properties from the first six months of 2008
    • 1.19 percent of all U.S. housing units (one in 84) received at least one foreclosure filing in the first half of the year.
    • the second quarter total to the highest quarterly total
    • Unemployment-related foreclosures account for much of this increased activity, and the high number of borrowers who find themselves owing more on their mortgages than their homes’ are now worth represent a potentially significant future risk.

Posted from Diigo. The rest of my favorite links are here.

Monday, June 29, 2009

Bank of America Gives Cities, States First Shot at REOs

  • This could be a good opportunity for Bank of America to get rid of foreclosure inventory and help cities restore slum areas at the same time. Probably won't fly, but it's worth a shot.

    tags: foreclosures, reos, bank of america

    • Bank Gives Cities, States First Shot at REOs
      Bank of America is making it easier for states and cities to buy foreclosures before investors purchase them.

      The program is a result of the U.S. Department of Housing and Urban Development’s Neighborhood Stabilization Program, which aims to encourage redevelopment of neighborhoods hit hardest by foreclosure and the resale of properties to home owners.

      Bank of America will notify participating cities that properties are available before they are listed on multiple listing services. The company will set the prices with no haggling allowed.

Monday, June 22, 2009

Obama Mortgage Plan May Be Expanded - BusinessWeek

Tuesday, June 16, 2009

Utah Ranks 5th Nationally for Foreclosure Filings

Friday, June 12, 2009

Foreclosure Rates Will Likely Stay High Through 2012

  • Foreclosures are unlikely to peak until 2011, says the chief economist of the National Association of Home Builders.">Foreclosures Won't End Soon, Analysts Predict
    Rising unemployment and falling home prices is a treacherous combination that is dragging people with excellent credit into the foreclosure morass.

    The jobless rate of 4.4 percent in April of people with bachelor’s degrees isn’t high compared with the overall unemployment rate, but it is more than double what it was a year ago.

    Foreclosures are unlikely to peak until 2011, says David Crowe, chief economist of the National Association of Home Builders. He says foreclosures typically hit a high after unemployment does, and he believes the employment situation won’t turn around until late this year. Then rising employment will drive up interest rates, he fears, causing more resets of adjustable rate mortgages, leading to more foreclosures.

    Credit Suisse echoes Crowe’s concerns, predicting that scheduled resets will hit a high in 2010 and rates will stay high until 2012.

    Source: Business Week, Peter Coy (06/15/2009)

Friday, June 5, 2009

Subprime meltdown over; now comes the bad news

  • The leading cause of foreclosures is NEGATIVE EQUITY, and 25% of prime loans have negative equity, 45% of Alt A loans, 50% of subprime loans, and a staggering 73% of Option Arm Loans. High rates of foreclosure look like they will continue for quite some time.

  • So much has been made of the subprime mortgage meltdown that you would think it was almost totally responsible for the economic collapse, and that once the subprime problem was fixed then the worst would be over.

  • Unfortunately nothing could be further from the truth, despite hitting new highs in foreclosure listing. Instead it was the first round of a three part collapse, and we are on the edge of the second round.

One Million Foreclosures This Year Already

  • The Number of Foreclosures nationwide are astounding. What a mess.

    • As of this week, 1 million new foreclosures have been filed in 2009, according to estimates by the Center for Responsible Lending, a nonprofit research and policy organization dedicated to preserving home ownership.

      A new foreclosure starts every 13 seconds – nearly 6,500 a day.

Monday, June 1, 2009

Foreclosure Scam's- Renters becoming Squatters

    • The nationwide boom in foreclosures and bank-owned real estate (REO) property sales to investors is producing an unpleasant and sometimes dangerous side effect: Growing numbers of confrontations occur when investors visiting supposedly empty properties find them occupied -- and the inhabitants don't want to leave or let anybody in.
    • Scam artists are now tracking houses entering the foreclosure pipeline every day, and then renting those houses out as they become vacant -- totally illegally.

      They get hold of notices of default - or other publicly available reports of pending foreclosure actions -- and then rent out the empty houses to tenants at bargain all-cash rents.

      When investors or REO management agents later visit the property and find it occupied, the scammed "tenants" may feel threatened and respond with hostility to efforts to enter the house, according to Dagnesses.

Posted from Diigo. The rest of my favorite links are here.

Thursday, May 28, 2009

12% of Americans are behind on Mortgage Payments.

This is staggering. Americans clearly had really bad financial habits, and now that the economy is bad, mortgage payments, the biggest household expense for most families isn't even being made. The amazing thing is that nearly half the nationwide foreclosures are in just four states: California, Nevada, Florida and Arizona.
  • tags: no_tag

    • A record 12 percent of homeowners with a mortgage are behind on their payments or in foreclosure as the housing crisis spreads to borrowers with good credit. And the wave of foreclosures isn't expected to crest until the end of next year, the Mortgage Bankers Association said Thursday.

      The foreclosure rate on prime fixed-rate loans doubled in the last year, and now represents the largest share of new foreclosures. Nearly 6 percent of fixed-rate mortgages to borrowers with good credit were in the foreclosure process.

      At the same time, almost half of all adjustable-rate loans made to borrowers with shaky credit were past due or in foreclosure.

      The worst of the trouble continues to be centered in California, Nevada, Arizona and Florida, which accounted for 46 percent of new foreclosures in the country. There were no signs of improvement.

      The pain, however, is spreading throughout the country as job losses take their toll. The number of newly laid off people requesting jobless benefits fell last week, the government said Thursday, but the number of people receiving unemployment benefits was the highest on record. These borrowers are harder for lenders to help with loan modifications.

Posted from Diigo. The rest of my favorite links are here.

Tuesday, February 17, 2009

Will Obamas Foreclosure Prevention Plan Help?

President Obama is expected to release his homeowner foreclosure prevention plan soon. This plan is designed to help to reduce inventory of homes on the market by reducing foreclosures that will then be for sale, but it will also be another expensive project that will likely be abused by many people who want to take advantage of any free government money.

Many fear that people will literally stop paying their mortgages if they feel the the government will step in, lower the amounts due, and make payments for them.

Experts are especially worried about this problem in areas like California and Arizona where most homeowners owe more on their properties than they are currently worth. Why should the government bail out someone who wasn't as responsible as someone who is?

Will this really happen?

Will the $50 billion in future taxpayer dollars do more good for the health of the overall housing economy, or will it do more harm?

Thursday, February 5, 2009