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April 2010 - Posts

Has the Residential Housing Market Stabilized?

The U.S. housing market won’t recover for several years as mounting foreclosures, shadow inventory, negative equity and ineffective government programs artificially control supply and hold down prices, according to foreclosure data innovator James J. Saccacio.

“The convergence of mounting foreclosures, negative equity, shadow inventory and ineffective government programs, are creating a volatile mix that could ignite new economic turmoil in the housing market,” warned Saccacio, chief executive officer of RealtyTrac at a keynote speech at Southern Methodist University in Dallas, Texas. “While the real estate market appears to be stabilizing, the reality is that the market is being artificially propped up by trillions in government deficit-spending. This is unsustainable. Transparency and market-driven solutions need to return to the housing sector.”

Home foreclosures probably will reach a record this year with more than 1 million properties seized by banks, according to Saccacio. With unemployment at 9.7 percent in March, and a quarter of all U.S. mortgages in various stages of delinquency, he said the housing market remains unstable.

Speaking at SMU’s Cox School of Business, Saccacio added: “When you peel back the onion and take a good look at the magnitude of the problem you begin to realize that we are still on shaky ground.”

Do you think the residential housing market has stabilized or do you believe more surprises are looming on the horizon? Tell us what you think!

To read an outline of Saccacio’s remarks, click here.

Published Fri, April 30 2010 1:48 PM by Octavion
Attorney General Investigating Tampa Foreclosure Firm

Attorney General Investigating Tampa Foreclosure Firm
 April 29, 2010, Tampa Tribune

The Florida Attorney General's Office is investigating a Tampa-based foreclosure law firm that has become one of the state's largest foreclosure mills. On the agency's Web site, the attorney general showed it has an "active public consumer-related investigation" into Florida Default Law Group. The agency notes that it is a civil investigation, rather than a criminal one, and the fact that is has an investigation isn't proof of any violation of law.


More Defaults on Mortgages are 'Strategic': Study Says
April 29, 2010, New York Daily News

Homeowners who decide to walk away from their mortgages even though they can still afford their payments account for an increasing share of defaults, a new study found. About 12 percent of all mortgage defaults in February were so-called "strategic" ones, up from 4% in mid-2007, according to research analysts at Morgan Stanley. Another report released by the University of Chicago and Northwestern University says strategic defaults are rising.


First American To Take CoreLogic Name After Spinoff

April 29, 2010, Orange County Business Journal

Santa Ana-based First American Corp. has selected the name CoreLogic Inc. for its remaining information services group after a planned spinoff of its dominant title insurance unit in coming weeks. The spinoff, in the works for nearly two years, is expected to be completed by June. First American made the official announcement of the name change on Wednesday. News of the name change had been disclosed earlier this month in filings with the Securities and Exchange Commission.


Gov't to Rate How Lenders Treat Borrowers
April 29, 2010, The Associated Press

The Treasury Department is planning to rate mortgage companies on how they treat customers as part of the Obama administration's $75 billion foreclosure relief effort. The new report will include measurements of how each company is handling borrowers and is expected by July, Treasury Secretary Timothy Geithner told Senate lawmakers on Thursday. More than 100 companies participate in the program, which is designed to help up to 4 million borrowers avoid foreclosure.


Sales, But No Frenzy, From Home-Buying Tax Credit
April 30, 2010, Wall Street Journal

The looming expiration Friday of a federal tax credit for home buyers has spurred some consumers to hurry to ink deals, but the last-minute activity has been more muted than some brokers and builders anticipated.  Many people who wanted to act on the tax credit already have done so, said Eric Lipar, chief executive of Texas-based LGI Homes. "We're not seeing an increase in traffic," he said. "It's business as usual."


Fort Myers Oasis High-rise in Foreclosure

April 27, 2010, Fort Myers News-Press

Bank of America today filed a $157 million foreclosure against the developer of the Oasis high-rise condominium in downtown Fort Myers. The bank’s suit alleges that The Related Group, based in Miami, failed to pay off the loan when it reached maturity on June 1, 2009, and that Related had also failed to pay liens filed against the project. Here’s another story on the Oasis.

Published Fri, April 30 2010 8:35 AM by Octavion
Home Prices Mixed in February

Home prices nationwide recorded their first annual increase in more than three years in February, but the monthly number declined for the fifth straight month in February as many markets remained on government life support.

The S&P/Case-Shiller index of home prices in 20 metropolitan cities fell 0.9 percent during the month from January, but rose 0.6 percent in February from a year earlier, the first annual gain since December 2006. Eleven out of 20 cities included in the index posted annual declines, underscoring the enormous pressure the housing market still faces.

For the first time in three years, however, the annual rates of decline of the 10-city and 20-city composites improved in February compared to January 2010. For example, the 10-city composite was up 1.4 percent from where it was in February 2009, while the 20-city composite inched up 0.6 percent versus the same time last year.

But the results were mixed. Home prices in Las Vegas performed the worst, dropping 14.6 percent, followed by Tampa (-6 percent), Seattle (-5.6 percent) and Detroit (-5.4 percent). The best performer was San Francisco, up 11.9 percent, followed by San Diego (7.6 percent) and Los Angeles (5.3 percent).

Still, the health of the housing market is difficult to determine. The federal government has poured trillions of dollars into the real estate market, but the housing recovery remains illusive.


Home Prices, by Metro Area

Published Thu, April 29 2010 3:46 PM by Octavion
Debate Rages Over Supply of Foreclosed Homes

Debate Rages Over Supply of Foreclosed Homes
April 26, 2010, Wall Street Journal

Why is there such a fierce debate about whether the housing market is slowly healing or heading for another free fall? Partly because no one can estimate with much confidence how many foreclosed homes banks need to sell or how fast they are getting rid of all that property.


Housing Rebound at Least 3 Years Away
April 28, 2010, Bloomberg News

he U.S. housing market won’t recover for three to five years as mounting foreclosures hold down prices, according to mortgage-bond pioneer Lewis Ranieri. “There’s another big leg down and the question is how long does it stay,” Ranieri, chairman of Ranieri Partners LLC, said during a panel discussion today at the Milken Institute Global Conference in Beverly Hills, California. “You can’t have much of a rally when you’ve got this big overhang.”


Florida Real Estate Market Has Hit Bottom, Survey Finds

April 28, 2010, University of Florida

Florida real estate markets show the first tentative signs of being on the verge of recovering from the most painful recession in the state’s history, according to the latest University of Florida report. “Results of our first quarter survey indicate that the real estate market in Florida has hit bottom and is in the process of stabilizing across most property types,” said Timothy Becker, director of UF’s Bergstrom Center for Real Estate Studies.


The Busted Homes Behind a Big Bet
April 28, 2010, Wall Street Journal

The government's civil-fraud allegation against Goldman Sachs Group Inc. centers on a deal the firm crafted so that hedge-fund king John Paulson could bet on a collapse in U.S. housing prices. It was a dizzyingly complex transaction, involving 90 bonds and a 65-page deal sheet. But it all boiled down to whether people like Stella Onyeukwu, Gheorghe Bledea and Jack Booket could pay their mortgages. They couldn't, and Mr. Paulson made $1 billion as a result.


Hardest Hit States Submit Housing Aid Proposals

April 26, 2010, Wall Street Journal

In February, President Obama outlined a plan to steer $1.5 billion in TARP funds for housing aid in five states considered “hardest hit” by the housing bust. The recipients—California, Florida, Michigan, Arizona and Nevada—have now submitted to the Treasury their proposals for how they would use that money.

Published Thu, April 29 2010 8:58 AM by Octavion
Discrepancies detailed in minority foreclosures

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Discrepancies detailed in minority foreclosures

April 28, 2010 — Washington Post

 

Minority homeowners in the Washington region are more likely to be in foreclosure even if they have credit scores and loan sizes similar to their white counterparts, according to a National Community Reinvestment Coalition report to be released Wednesday.

 

She’s 100 years old and facing foreclosure

April 27, 2010 — Chicago Tribune

 

Let the bankers come with their foreclosure notices. Invite the building inspectors, too. At 100 years old, Agnes Albinger has lived on her 70-acre patch of farmland longer than most of those people have been alive.

 

Home prices fell across U.S. in February

April 28, 2010 — Washington Post

 

A closely watched housing-market index released Tuesday showed that home prices dropped in many major metropolitan areas from January to February, though prices are up from the same time a year ago.

 

Arizona No. 4 for mortgage fraud

April 28, 2010 — Arizona Republic

 

Arizona now ranks fourth for mortgage fraud nationally. It's the first time the state has cracked the top five for the problem, according to data released this week from the Mortgage Asset Research Institute.

 

The Danger Of 0% Interest Rates

April 27, 2010 — Forbes

 

The Federal Open Market Committee--the arm of the Federal Reserve that makes monetary policy--will meet on Tuesday and Wednesday to discuss its target for short-term interest rates. It will also discuss other issues, such as what to do with its huge balance sheet of mortgage assets that ran up during the height of the financial panic.

 

Increase incentives to real estate investors, owners

April 27, 2010 — Inman News

 

Housing is about supply and demand, and currently supply outweighs demand by a large margin, with the majority of homes either being underwater or in foreclosure. It's this part of the market that needs to be addressed, as once the majority of these properties are off the market, the prices of homes should begin to stabilize.

 

 

Published Wed, April 28 2010 8:53 AM by joelc
Home Price Index Shows 1st Annual Gain in 3 Years

Home Price Index Shows 1st Annual Gain in 3 Years
April 27, 2010, The Associated Press

Home prices rose in February, the first annual increase in more than three years, but fell short of analysts' expectations. But results of the Standard & Poor's/Case-Shiller 20-city home price index were mixed, as 11 of the 20 cities showed declines. Home prices in February increased 0.6 percent on a non-seasonally adjusted basis, according to the index released Tuesday. The last time prices rose on a year-over-year basis was December 2006.Y


Profiting From Distressed Homes
April 21, 2010, New York Times

Sitting in the office of his 20,000-square-foot mansion on seven and a half acres here, Harsimran Singh Sabharwal, a real estate investor, recently shared his rags-to-riches tale: how, in 1973, he came to the United States from India with $8 in his pocket and now has a house whose kitchen dwarfs the home where he grew up, in a family of eight.


Las Vegas Short Sales Skyrocketing
April 25, 2010, Las Vegas Review-Journal

Short sales are increasingly becoming the alternative to foreclosures in Southern Nevada, which is still seen as "ground zero" in the nation's housing crisis. The number of short-sale homes now in escrow is nearly four times that of real estate-owned homes, though REO closings are still twice the amount of short sales, Nevada Title Co. reported in its April market summary.


Economists: The Stimulus Didn't Help
April 26, 2010, CNNMoney.com

The recovery is picking up steam as employers boost payrolls, but economists think the government's stimulus package and jobs bill had little to do with the rebound, according to a survey released Monday. In latest quarterly survey by the National Association for Business Economics, the index that measures employment showed job growth for the first time in two years — but a majority of respondents felt the fiscal stimulus had no impact.

Published Tue, April 27 2010 8:41 AM by Octavion
Number of the Week: 103 Months to Clear Housing Inventory

Number of the Week: 103 Months to Clear Housing Inventory
April 24, 2010, Wall Street Journal

103: The number of months it would take to sell off all the foreclosed homes in banks’ possession, plus all the homes likely to end up there over the next couple years, at the current rate of sales. As of March, banks had an inventory of about 1.1 million foreclosed homes, up 20% from a year earlier, according to estimates from LPS Applied Analytics. Another 4.8 million mortgage holders were at least 60 days behind on their payments or in the foreclosure process, meaning their homes were well on their way to the inventory pile. That “shadow inventory” was up 30% from a year earlier.


Flipping Houses is Back in South Los Angeles

April 24, 2010, Los Angeles Times

Flipping homes is back. Lured by steep discounts on bank-owned properties, investors are sifting through the wreckage of Southern California's real estate bust, snapping up foreclosed homes in hopes of making a quick killing. The rapid-sale rebound comes amid a general recovery in housing prices and sales, and the epicenter is South Los Angeles.



Fannie Offers Spur to Avoid Foreclosure
April 26, 2010, Wall Street Journal

Fannie Mae will make it easier for some struggling homeowners to buy houses in the future if they avoid foreclosure in the present. Under rules released this month that will take effect in July, some troubled borrowers who give up their homes by voluntarily transferring ownership through a "deed in lieu of foreclosure" or by completing a short sale, where a home is sold for less than the amount owed, will be eligible in two years to apply for a new mortgage backed by Fannie.

Published Mon, April 26 2010 8:51 AM by Octavion
Offering aid to distressed borrowers

Offering aid to distressed borrowers
April 23, 2010 — Inman News

The irony about the ongoing crisis in America's residential real estate and mortgage markets is that it has attracted the altruistic and capitalistic in equal measure. People want to help others who are having financial difficulties and are in danger of losing their homes, while others look at the wave of foreclosures and defaults and see investment potential.

Bank of America wants to suspend mortgage payments for jobless
April 22, 2010 — McClatchy Newspapers

CHARLOTTE, N.C. - Bank of America wants to give struggling mortgage customers who are collecting unemployment benefits up to nine months with no mortgage payment.

New home sales jump from record low
April 23, 2010 — Associated Press

WASHINGTON -- Sales of new homes surged 27 percent last month, bouncing off the previous month's record low and blowing past expectations as government incentives and better weather boosted sales.

Federal Reserve poised to keep rates low again, confident in its forecast
April 23, 2010 — Washington Post

Next week, Federal Reserve leaders will gather around a conference table in Washington and will almost certainly decide to keep interest rates at rock-bottom levels, as they have for 11 straight meetings.

Majority of Homeowners Plan to Invest in Home Improvements in 2010, Spending an Average of $6,200
April 21, 2010 — Business Wire

NEW YORK — According to a new survey by American Express, the majority of homeowners (53%) believe a seller’s market is two or more years away, yet investing in their current home remains a priority. In fact, 62 percent of homeowners plan to embark on home improvement projects in 2010 and spend an average of $6,200 on enhancements.

Published Fri, April 23 2010 9:07 AM by joelc
No end to foreclosure crisis in sight for 2010

Published Thu, April 22 2010 3:59 PM by joelc
U.S. sales of previously owned homes rise 6.8% in March

U.S. sales of previously owned homes rise 6.8% in March
April 22, 2010 — Los Angeles Times

Sales of previously owned U.S. homes jumped 6.8% in March, a national group said Thursday.

Mortgage applications on the rise

April 22, 2010 — Bloomberg News

WASHINGTON — Mortgage applications in the United States rose by the most in seven weeks as the looming end of the home buyer tax credit helped spark the biggest rise in purchases since January.

John Burns Report Card Gives Housing a Grade of D+
April 21, 2010 — DSNews

Each month, the analysts at John Burns Real Estate Consulting (JBRC) get out their red pens and score various aspects of the industry using the grade school scale. Looking at the firm’s latest report card, housing overall is very near the bottom of the class, with a D+.

NYC tenants in defaulted properties demand fixes
April 21, 2010 — Associated Press

NEW YORK — Step into Charlene Barton's apartment, and the first thing you smell is mold.

Stop Foreclosure Fraud, Homeowners Warn
April 21, 2010 — Sunshine News

Cathie Dorman is fighting a legal battle to keep the bank from foreclosing on her house in Stuart, and she wants lawmakers to know it.

Published Thu, April 22 2010 9:25 AM by joelc
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