Mess scares off Homebuyers:
The ongoing controversy surrounding foreclosures is taking its toll as homebuyers refused to look at distressed properties in October, and foreclosure sales suffered from delays, according to the latest Campbell/Inside Mortgage Finance Monthly Survey. Both the share of home purchases involving distressed properties and average prices for foreclosed properties fell last month, the survey found. News reports that major servicers were pulling REOs off the market, including some already under contract, spooked would-be homebuyers. The monthly survey found that 14% of owner-occupant homebuyers and 6% of investors refused to view foreclosed properties in October. Homebuyer fear was worse for short-sale properties where 30% of owner-occupant buyers, and 20% of investors refused to view these homes.
Servicing problems disrupted both short sales and REO sales. Survey results show that 24% of closings scheduled for October were delayed or canceled due to issues with short sales, while 12% were delayed or canceled due to REO title issues. Although distressed properties have dominated home sales for much of 2010, recent foreclosure problems helped trigger a dip in their share of the market last month, according to the survey. In October, distressed properties accounted for 44.3% of transactions tracked in the latest survey — down from 47.5% in September. "It's clear that decreased homebuyer demand for distressed properties has resulted in lower prices," said Thomas Popik, research director for Campbell Surveys. "With the foreclosure 'fraud' issue still out there, buyers are skeptical to purchase a REO. Until the fraud mess gets cleared up, most of our clients are second guessing their interest in REO properties," reported a Florida real estate agent responding in the la
test survey.
Tuesday, November 23, 2010
Monday, November 15, 2010
Short Sale Options
Short Sale Resolution
The availability of raw land and other forms of undeveloped property are becoming extremely attractive as prices continue to plunge and returns on water, minerals, gas rights, agricultural products and other materials rise. While raw land or undeveloped property may not be the right fit for every real estate investor, it's a good idea to remain alert to the possibility. Use this quick checklist to evaluate a potential property:
1. Is the zoning approved for the desired use? While it is possible to petition for a zoning change, don't count on approval. Instead, search for properties that provide a safe bet especially when first starting out.
2. Are there any environmental limitations? The EPA is probably not an organization you are used to doing business with but that doesn't mean they can't impact your property values. Protected wetlands, pollution zones and even required "buffer zones" are just a few considerations to keep in mind.
3. Do deed restrictions limit use? In addition to use restrictions, it's a good idea to review deed restrictions and land use limits. Certain forms of business endeavors, pollution or other concerns may preclude the use of the land for a desired endeavor.
4. Are there ancillary or additional incentives? Some parcels may present especially attractive investments due to location, agricultural exemptions, tax credits or other desirable aspects. Mineral and water rights, the ability to lease to other concerns or the promise of future expansion can enhance or limit almost any listing.
5. Multi-use property appraisals? Finding a multi-use property is one way to maximize gains and minimize risk but it can also present a unique set of challenges when obtaining an appraisal. Comparables can be difficult to come by so it's essential to work with a reputable entity capable of seeing the 'big picture".
6. Do you have staying power? Investing in raw or undeveloped land can be costly so make sure you have the cash reserves and/or connections to make it work. Even for those who simply intend to flip the property...remember that it can take more time due to a smaller pool of potential investors. Have a contingency plan in place to avoid unpleasant surprises down the line.
7. Last but not least...start small and grow from there. Don't bite off more than you are able to chew especially the first few times out. If you find a deal that is beyond your expertise, use the same techniques covered in our shortsale investing seminars to work with a "bigger fish" that is able to provide the stability and experience needed to make the deal work.
See you at the top!
The availability of raw land and other forms of undeveloped property are becoming extremely attractive as prices continue to plunge and returns on water, minerals, gas rights, agricultural products and other materials rise. While raw land or undeveloped property may not be the right fit for every real estate investor, it's a good idea to remain alert to the possibility. Use this quick checklist to evaluate a potential property:
1. Is the zoning approved for the desired use? While it is possible to petition for a zoning change, don't count on approval. Instead, search for properties that provide a safe bet especially when first starting out.
2. Are there any environmental limitations? The EPA is probably not an organization you are used to doing business with but that doesn't mean they can't impact your property values. Protected wetlands, pollution zones and even required "buffer zones" are just a few considerations to keep in mind.
3. Do deed restrictions limit use? In addition to use restrictions, it's a good idea to review deed restrictions and land use limits. Certain forms of business endeavors, pollution or other concerns may preclude the use of the land for a desired endeavor.
4. Are there ancillary or additional incentives? Some parcels may present especially attractive investments due to location, agricultural exemptions, tax credits or other desirable aspects. Mineral and water rights, the ability to lease to other concerns or the promise of future expansion can enhance or limit almost any listing.
5. Multi-use property appraisals? Finding a multi-use property is one way to maximize gains and minimize risk but it can also present a unique set of challenges when obtaining an appraisal. Comparables can be difficult to come by so it's essential to work with a reputable entity capable of seeing the 'big picture".
6. Do you have staying power? Investing in raw or undeveloped land can be costly so make sure you have the cash reserves and/or connections to make it work. Even for those who simply intend to flip the property...remember that it can take more time due to a smaller pool of potential investors. Have a contingency plan in place to avoid unpleasant surprises down the line.
7. Last but not least...start small and grow from there. Don't bite off more than you are able to chew especially the first few times out. If you find a deal that is beyond your expertise, use the same techniques covered in our shortsale investing seminars to work with a "bigger fish" that is able to provide the stability and experience needed to make the deal work.
See you at the top!
Thursday, November 11, 2010
Foreclosure Filings Down
Foreclosures fall 9% :
According to a report released by RealtyTrac, Foreclosure filings of all kinds, including notices of default, notices of auctions and notices of auction sales, dropped 4.4% during October, but it's not because fewer people are losing their homes. Instead, the market is seeing a temporary stay from banks freezing foreclose auctions to review loan documents. The drop in repossessions came after increases in four of the six previous months, topped by an all-time high in September, when 102,000 people lost their homes. In October, 93,246 homes were repossessed.
Rick S., Senior Vice President of RealtyTrac, believes there could be a further drop-off in November, because the impact of the freeze was not fully reflected in the October report. While that may result in further declines in bank repossessions, Rick expects it to take many months before overall foreclosure rates really improve. There is still a very large backlog of borrowers who stopped paying their mortgages long ago but who have not yet been served with a single foreclosure filing and so are not being counted in RealtyTrac's statistics. "Today, servicers are waiting longer and longer to put people in foreclosure," said Rick. "It's not unusual for someone in default go six to nine months without receiving a notice of default."
According to a report released by RealtyTrac, Foreclosure filings of all kinds, including notices of default, notices of auctions and notices of auction sales, dropped 4.4% during October, but it's not because fewer people are losing their homes. Instead, the market is seeing a temporary stay from banks freezing foreclose auctions to review loan documents. The drop in repossessions came after increases in four of the six previous months, topped by an all-time high in September, when 102,000 people lost their homes. In October, 93,246 homes were repossessed.
Rick S., Senior Vice President of RealtyTrac, believes there could be a further drop-off in November, because the impact of the freeze was not fully reflected in the October report. While that may result in further declines in bank repossessions, Rick expects it to take many months before overall foreclosure rates really improve. There is still a very large backlog of borrowers who stopped paying their mortgages long ago but who have not yet been served with a single foreclosure filing and so are not being counted in RealtyTrac's statistics. "Today, servicers are waiting longer and longer to put people in foreclosure," said Rick. "It's not unusual for someone in default go six to nine months without receiving a notice of default."
Monday, November 8, 2010
BofA Fights Back
Yesterday Bank of America rebuffed claims by a lawyer for several big investors that it should buy back troubled mortgages because the loans were made improperly. A group of investors, including the Federal Reserve Bank of New York and Pimco are pressing Bank of America to buy back a portion of some $47 billion worth of mortgages. Bank of America argued that the effort would have the effect of speeding up the foreclosure process and force it to evict more homeowners. The investors’ claims have become a major worry on Wall Street as the foreclosure crisis has escalated. Bank of America said the problems stemmed from the economic downturn rather than any underlying problem with how the mortgages were sold to investors.
It called the investor claims “utterly baseless.” Signaling a much more aggressive legal stance, the bank also criticized the lawyer behind the effort, K. Patrick. It argued that a letter she wrote last month that was signed by clients was “written for an improper purpose, or in furtherance of an ulterior agenda.” Ms. Patrick did not immediately respond to calls seeking comment. “I don’t think we should be put in a position where we aren’t trying to help homeowners through this strife because people want us to foreclose faster,” said B. T. Moynihan, Bank of America’s chief executive. In addition, Mr. Moynihan said, he was caught off guard by the decision of the Federal Reserve and Freddie Mac, the government-controlled giant, as well as private investors to sign the letter.
It called the investor claims “utterly baseless.” Signaling a much more aggressive legal stance, the bank also criticized the lawyer behind the effort, K. Patrick. It argued that a letter she wrote last month that was signed by clients was “written for an improper purpose, or in furtherance of an ulterior agenda.” Ms. Patrick did not immediately respond to calls seeking comment. “I don’t think we should be put in a position where we aren’t trying to help homeowners through this strife because people want us to foreclose faster,” said B. T. Moynihan, Bank of America’s chief executive. In addition, Mr. Moynihan said, he was caught off guard by the decision of the Federal Reserve and Freddie Mac, the government-controlled giant, as well as private investors to sign the letter.
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