Homes in foreclosure decline by 130,000
By Les Christie @CNNMoney February 8, 2012: 9:07 AM ET

Foreclosure inventory declines 8.4% in 2011

NEW YORK (CNNMoney) — Slowly, but surely, the foreclosure crisis seems to be abating.

The number of homes in foreclosure shrunk by 130,000, or 8.4%, in 2011, according to a report from CoreLogic, an economic research firm.

These are homes owned by borrowers who had slipped far behind on payments, forcing lenders to put them into the foreclosure process. The homes remain foreclosure inventory until they’re sold — either at auction or in a short sale, which is when a home is sold for less than the mortgage value — or until homeowners are current again on payments.

There are dual reasons for the inventory drop, according to Mark Fleming, chief economist with CoreLogic.
Foreclosure deal has 40 states but others balk

“The pace at which properties are entering foreclosure is slowing,” he said. “And servicers nationwide stepped up the rate at which they were able to process distressed assets.”

In recent years, homes have entered foreclosure more slowly because lenders are carefully scrutinizing applicants; only very low-risk borrowers get loans. That, plus a gradual improvement in the economy, means fewer borrowers are getting into trouble.

Even borrowers in default are not going into the foreclosure process as quickly as they used to. They’re being held up by a variety of judicial and regulatory constraints, according to Fleming.

For one thing, the robo-signing issue, in which banks filed sloppy and sometimes improper paperwork, made lenders more cautious about getting their paperwork in order before beginning to process foreclosures.

Once the banks do put homes into foreclosure, they’re trying to speed them through it faster. One way they’ve done that is by encouraging short sales.

Another is that they’ve stepped up their foreclosure prevention efforts — often with the aid of numerous government programs such as Home Affordable Modification Program, which the government claims has helped a million Americans keep their homes.
Post-foreclosure

After foreclosures are completed and the homes are back in the hands of their lenders, the homes are being sold very quickly.

“This is the first time in a year that REO sales [those of bank-owned properties] have outpaced completed foreclosures,” said Fleming.

In December 2011, there were 103 sales of bank-owned homes for every 100 homes in foreclosure inventory. That was up considerably from November 2010, when there were only 94 REO sales for every 100 in the foreclosure process.

Florida has the dubious distinction of recording the highest foreclosure inventory in the nation in December, with more than 17% of homeowners seriously delinquent and nearly 12% of homes with mortgages in foreclosure inventory

The inventory in Florida is bloated because, as in more than half of all the states, most foreclosures have to go through the courts.
Foreclosure free ride: Three years and no payments

Courts have taken a much closer look at the cases coming before them, no longer taking the bank’s word for everything.. Consequently, it takes a longer time to schedule an auction, which keeps many homes trapped in the foreclosure pipeline.

A hard-hit state such as Nevada, which has had the highest incidence of delinquency in the nation but where most foreclosures do not go through he courts, posted a foreclosure inventory rate of less than half that of Florida. To top of page

NEW YORK (CNNMoney) — The nation’s five largest banks have finally struck a deal with 49 states to settle charges of abusive and negligent foreclosure practices dating back to 2008.

Under a deal announced Thursday, the banks will commit $26 billion to help underwater homeowners and compensate those who lost their homes due to improper foreclosure practices.

* What the foreclosure settlement means for you
* Mortgage deal could bring billions in relief
* Foreclosure deal has 40 states, but others balk
* Finally, a foreclosure settlement (Maybe)
* Foreclosures made up 20% of home sales in 3Q

The banks also agreed to change the way they handle and approve foreclosures.

A group of state attorneys general claimed that banks lost important paperwork, cut corners and enlisted robo-signers to attest to facts they had no knowledge of on hundreds of documents a day.

The settlement has been in the works for more than a year.

What did the mortgage lenders and loan servicers agree to do? The banks and servicers have committed at least $17 billion to reduce principal for borrowers who 1) owe far more than their homes are worth 2) are behind on payments.

The amount of principal reduction will average about $20,000 per borrower.

Another $3 billion will go toward refinancing mortgages for borrowers who are current on their payments. This will enable them to take advantage of the historic low interest rates currently available.

The banks will pay $5 billion to the states and the federal government, the only hard money involved in the deal. Out of that fund will come payments of $1,500 to $2,000 to homeowners who lost their homes to foreclosure. Other funds will be paid to legal aid and homeowner advocacy organizations to help individuals facing foreclosure or experiencing servicer abuses.

Another $1 billion will be paid directly by Bank of America to the Federal Housing Administration to settle charges that its subsidiary, Countrywide Financial, defrauded the housing agency.

In addition, the banks agreed to eliminate robo-signing altogether and to use proper and legal procedures when putting homeowners through the foreclosure process. They also agreed to end servicer abuses, like harassing delinquent borrowers for payments, and to include principal reductions more often in their mortgage modifications programs. (Mortgage deal could bring billions in relief)

Is my mortgage lender taking part in this settlement? Bank of America (BAC, Fortune 500), Wells Fargo (WFC, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Citigroup (C, Fortune 500) and Ally Financial (GJM)
are taking part in the settlement.

In addition, nine other unnamed loan servicers may join the settlement later, and that would bring its value to $30 billion.

Loans owned or backed by Fannie Mae and Freddie Mac, however, are not part of the deal. (Obama proposes new home loan refinancing program)

The Federal Housing Finance Agency, which oversees the two government-sponsored mortgage giants, will not allow any balance reductions for loans insured by the companies under the settlement.

I lost my home to foreclosure; how do I know if I qualify for payment? If you were foreclosed on in the calendar years 2008 through 2011, you may be be eligible for a payment of up to $2,000. People who think they may qualify should notify their bank.

The exact amount of the payments will depend on how many people participate in this part of the settlement. They will share equally in a pool of $1.5 billion. The U.S. Department of Housing and Urban Development expects about 750,000 former homeowners to take part.

What should I do if I think I may qualify for a principal reduction or refinanced mortgage? Contact your lender/servicer and ask them to review your case.

If I take the money, what rights do I give up? Individual borrowers do not give up any right to sue.

As part of this deal, state attorneys general gave up the right to sue the mortgage servicers for foreclosure abuses arising out of the robo-signing scandal. However, they reserve the right to sue if they uncover improper acts when the loans were originated or when they were securitized.

When will the new rules and bank policies be put into place? Most of them have already become part of bank policies.

When will homeowners get paid? HUD said the settlement will be put before a court for approval within two weeks. It is unknown how long it will then take for a court to rule.

The relief for homeowners has to be completed within three years, but the state attorneys general and HUD want it to be front-loaded and completed within 12 months.

Would I have to pay taxes on the principal reductions or the pay-outs? If the principal is reduced in 2012, it will not be subject to income tax.

That’s because the Mortgage Debt Relief Act of 2007 allows taxpayers to exclude income from the discharge of debt on their principal residence. The act is scheduled to expire at the end of this year, however.

So if the act is not extended and the principal reduction occurs in 2013, borrowers may be on the hook to pay taxes on the settlement amount.

It’s not clear whether you would have to pay taxes on the $1,500 to $2,000 payout. The IRS declined to comment on the question.

Which state didn’t participate and what does it mean if you live in that state? Oklahoma was the only holdout of the 50 states. Instead, it announced its own settlement with the five banks Thursday.

Under its settlement, the banks agreed to pay $18.6 million in damages, part of which would compensate homeowners who were victims of unlawful and unfair mortgage practices, according to the Oklahoma attorney general’s office.

Homeowners who believe they may have been wrongly foreclosed upon should visit the Oklahoma attorney general’s website and fill out the paperwork for processing a claim.

Will the settlement make it harder to get a mortgage? The new rules and regulations the banks have agreed to under the settlement should have little impact on future mortgage borrowing since most of practices are already in place, said Keith Gumbinger of HSH Associates, a mortgage information provider.

The actual cost to the banks of the settlement should not discourage lending either. (Housing: The one bailout America really needs)

Only $5 billion of the $26 billion settlement will be a direct cost to the banks. The remainder will be the cost of modifying mortgages. Many of those modifications may be in the best interests of the banks to make, however, since the alternative may be foreclosure, which can cost banks more than modifications.

Daily Real Estate News | Thursday, January 26, 2012

List prices are heating up in Florida, as recovery takes hold in the Sunshine State. Florida boasts the highest number of cities in the top 10 for largest increases in median list prices in the last year. In Miami alone, median list prices have jumped 32 percent in the last year.

Nationwide, median list prices have inched up 5.03 percent from December 2010 to December 2011, according to Realtor.com data.

The following cities are where median list prices have increased the most in the last year, based on December 2011 data of 146 metro areas from Realtor.com:

1. Miami, Fla.
Year-over-year increase: 32.50%
Median list price: $265,000

2. Naples, Fla.
Year-over-year increase: 21.67%
Median list price: $365,000

3. Fort Myers-Cape Coral, Fla.
Year-over-year increase: 21.47%
Median list price: $229,375

4. Punta Gorda, Fla.
Year-over-year increase: 19.42%
Median list price: $179,000

5. Boise City, Idaho
Year-over-year increase: 19.25%
Median list price: $154,900

6. West Palm Beach-Boca Raton, Fla.
Year-over-year increase: 18.38%
Median list price: $219,000

7. Sarasota-Bradenton, Fla.
Year-over-year increase: 17.62%
Median list price: $241,000

8. Daytona Beach, Fla.
Year-over-year increase: 16.06%
Median list price: $179,900

9. Phoenix-Mesa, Ariz.
Year-over-year increase: 13.79%
Median list price: $165,000

10. Grand Rapids-Muskegon-Holland, Mich.
Year-over-year increase: 13.32%
Median list price: $137,000

By Chris Isidore @CNNMoney January 20, 2012: 10:26 AM ET

NEW YORK (CNNMoney) — Home sales ended a difficult year on a high note, resulting in a gain in full-year sales volume.

The National Association of Realtors reported that the annual sales pace in December reached 4.6 million homes, up 5% from November’s pace and 3.6% from a year ago.

It was the third straight month of improvement in the pace of sales. The improved fourth-quarter sales volume lifted full-year sales to 4.26 million homes, up 1.7% from 2010 levels.

“The pattern of home sales in recent months demonstrates a market in recovery,” said Lawrence Yun, the group’s chief economist. “Record low mortgage interest rates, job growth and bargain home prices are giving more consumers the confidence they need to enter the market.”

Home prices, however, remained depressed, largely because distressed sales continue to make up a significant part of the market.

The median price was $164,500 in December, down 2.5% from a year ago. For the full year, the median price of $166,100 was off 3.9% from 2010 levels. To top of page

Chase CEO and Fannie Mae economist see improvement in 2012. But another analyst says recovery is still a long way away.

By Teresa at MSN Real Estate Tue 10:35 AM

“We have seen the worst. We are at the bottom. We may hug along the bottom for a while, but we are at the bottom,” Jamie Dimon, CEO of JPMorgan Chase, told Maria Bartiromo in a Q&A published in USA Today.

That doesn’t mean that happy days are here again, he cautions, but there is light at the end of the tunnel.

“Supply and demand are rapidly coming in balance,” he said. “Renting is now more expensive than buying in half of America. We’re adding 3 million Americans a year … 2 million jobs, and all this shadow-inventory stuff will be getting better, not worse. And it’s the rate of change which is important, not the absolute level.”

He added: “It’s still terrible, by the way. But we think it’s going to get better over time.”

Fannie Mae chief economist Doug Duncan agrees with Dimon that housing is ready to start adding a small boost to the economy.

Modest housing recovery predicted in 2012

“With an expected improvement in housing activity in 2012, residential investment should start contributing to growth, albeit only modestly initially,” Duncan and Orawin Velz, a director in Fannie Mae’s economics and mortgage-market analysis group, wrote in a Fannie Mae forecast released last week. The two predicted that home sales would rise 3.5% in 2012 and that housing starts would rise 16%.

Bankers: Home prices won’t recover before 2020

But Lance Roberts of Street Talk, in a post titled “Anything other than the Apocalypse is a win,” predicts we won’t see a housing recovery this year and probably not for a long time. He writes:
Despite rumors to the contrary, real estate will continue to struggle not only in 2012 but well beyond. The bursting of the real-estate/mortgage? bubble is not something that is solved in the course of a couple of years – especially in a case where the excesses took two decades to accumulate.

We are always looking to benefit more financially from Real Estate. We also
Need to realize that the whole intent is for us to be more financially better off.
We need to look at all aspects of our expenses and be savier when it comes
to what we are spending our funds on. In so doing we discussed today insight on
spending less on typical types of insurance so that we can have better coverage with
less costs in premiums.

Home Insurance Insight:

Look at our dwelling coverage amounts for our home and potential rental properties.
The $ amount should not equal the value of what the property could be sold for. It should
Be a lower amount that equals the true cost to rebuild the structure of the property.

-Determine the true cost to rebuild the home by comparisons from agents.
-If the insurance company will write the policy for less than we are 100% covered.
-If the dwelling coverage is for 80% or more of the true replacement cost then the insurance company will pay for 100% of the replacement costs.

Auto Insurance Insight:

We want to have the right coverage without over paying for insurance premiums.

-Generally most people can have coverage of 1000 per person and 30000 per accident for
bodily injury insurance.
-Look to have a higher deductible like 1000 if you carry collision and comprehensive insurance. This will lower your premiums.
-Consider dropping collision and comprehensive insurance when the value of the car drops to $3000-$4000 dollar range. At that point the insurance company is more likely to total the car then repair it anyway.

Small Business Insurance:

When claiming a home business and having either clientele in the home or when storing inventory we should acquire small business insurance through a reputable agent.

-Put your business under business structure and have ample insurance so that if someone claimed a liability suit you would have ample protection.
-If you didn’t have business insurance and your inventory for your business was the cause of a fire, you home owners insurance would not cover the loss.

Summary:
Get educated on the right coverage’s to have for all types of insurance. This will help us not only personally but in our real estate investing as well. This can help us to be more liquid and give us to make more in our real estate investment opportunities.

By Morgan Brennan, Forbes.com

January 10, 2012

Has the U.S. housing market hit a bottom? Do we have further to go? When will a recovery start? These are the questions every homeowner and real estate investor are currently asking themselves — or should be.

Wall Street firms have optimistically been betting that the bottom’s here. Research firms like Zelman & Associates predict the sector will pick up this year and hedge funds have been jumping into real estate-related investments from brick-and-mortar building purchases to shares of home builders stocks. In December Goldman Sachs Group released a report stating that “The home price bottom [is] in sight,” according to my colleague Agustino Fontevecchia.

Cities Where Home Prices are Falling Dangerously

Indeed, national home price data indicates that the worst of the catastrophic home price implosion is behind us. Clear Capital, a Truckee, Calif.-based real estate research firm, reports that 2011 saw a national decrease of 2.1% in home prices when compared with 2010. While still a loss, it’s a measly drop compared to the double-digit plunges felt in the years before. For 2012, the firm’s Home Data Index (HDI) Market Report also predicts a humble 0.2% gain across all markets. “Overall, 2011 was a relatively quiet year for U.S. home prices compared to the last five years,” said Dr. Alex Villacorta, Clear Capital’s director of research and analytics, in the report. He further notes that “the current balance the market has found will continue through 2012.”

A 6.4% price drop is expected for hard-hit Las Vegas.

What does all of this mean? Housing from a national standpoint is flattening out; the macro level data suggests we could possibly be at the bottom or near it.

A Tuesday report from Zillow, a publicly listed Seattle, Wash.-based real estate data and listing site, shows that November home values “remained essentially flat” from October of 2011 through November, falling only 0.1%. The Zillow Real Estate Market Report, which analyzes home values in 165 metro areas, notes that the addition of 200,000 jobs in December, improving consumer confidence and stronger retail sales indicate that home sales may be more consistent and more frequent in 2012. “With stronger home sales, we’ll see a reduction in the amount of vacant housing inventory and an improved ability to absorb foreclosed homes. This increased demand will eventually start to put a floor under home values later this year,” the report says.

It sounds rather promising, doesn’t it? For Wall Street firms snapping up stocks and/or using the market as an indicator for economic activity, it is. For homeowners, however, a different story prevails.

If you are a prospective home buyer or seller wondering if now is the time to make a play, the decision should come down to something much more tangible than a “flat” national market number. It should come down to location.

Clear Capital warns that the relatively flat national average is composed of metro markets that have been anything but: “Individual markets reacting to their local economic conditions continued to exhibit a wide range of performance levels in 2011, with only 12 of the top 50 metro markets (24%), returning year-over-year price movement that can be considered stable,” the HDI report cautions. Stable price movement means price swings of less than 2.5%. The company believes only 40% of the country’s largest metro areas will be stable in 2012. Among them: Denver, Colo., San Jose, Calif., Boston, Mass., Oklahoma City, Okla., and San Francisco, Calif.

Bakersfield is expected to rebound with an 11.1% increase.

As for the areas where prices may actually appreciate the most this year, the firm expects Orlando, Fla. home prices to rise 11.7%, hard-hit Bakersfield, Calif. 11.1%, government jobs-driven Washington, D.C. 9.3%, foreclosure-riddled Phoenix, Ariz. 8.9%, and sales-heavy Miami, Fla. 8.8%.

Markets that will experience further price drops this year include Atlanta, Ga. (14.4% anticipated loss), Los Angeles, Calif. (10.3% anticipated loss), Seattle, Wash. (7.5% anticipated loss), Oxnard, Calif. (6.7% anticipated loss), and foreclosure capital Las Vegas, Nev. (6.4% anticipated loss).

Zillow’s November data shows price fluctuations from metro area to metro area, as well. It clocks 66 markets where home values depreciated in November, 66 markets where values rose and 33 where values simply remained flat. Zillow’s economists caution that elevated foreclosure rates and negative equity will continue to impact local markets in 2012, meaning still lower values yet to come in some markets. For that reason, the company doesn’t expect a true stabilization in home values to occur until the end of this year or early 2013.

I think they are right. Even if the worst of the price depreciation hemorrhage is over, we still face a wave of distressed inventory undergoing the tedious foreclosure process and an estimated shadow inventory of 1.6 million bank-owned or distressed homes that have not yet hit the sale block, according to CoreLogic. It will mean millions of discounted units flooding markets already saturated with more units than buyers, dragging overall home prices down in terms of both listing prices and property appraisals.

So whether a bottom in housing is here or not depends on the local market. Most foreclosure-riddled markets will likely have years to go before values meaningfully move upwards. Markets where employment is plodding back and/or where overbuilding didn’t occur in the mid-2000s will and are showing more promising, more stable prices. ”It will be very important for consumers to draw a distinction between the end of sustained home values declines, which are maybe a year away, and the return to normal market conditions with historically normal appreciation rates,” Zillow notes.