Foreclosures to persist
According to authors at the Federal Reserve Bank of Cleveland, the nation’s high foreclosure rate is likely to persist. The Fed article looks at the changes in foreclosure and unemployment rates across states, noting the differences in the timing of the movements. The conjecture that the high foreclosure rate will persist is based in part on the observation that states that experienced boom-bust housing cycles in the past (Texas, Oklahoma, Massachusetts and California) had elevated foreclosure starts for years after the peak in foreclosure starts and inventory. These previous boom-bust cycles “were small in comparison to the current cycle,” the article said. While the recession has left deep scars in the housing and labor markets — with the unemployment rate doubling and the foreclosure start rate roughly tripling — the timing of the movements differs over the cycle, according to the abstract, written by the vice president at the Federal Reserve Bank of Cleveland, and K.F., a research assistant.
In So-Cal every Wednesday morning there is a short sale workshop open to the public, allowing homeowners, agents, brokers or investors the opportunity to see and participate in how and why this has been changing communities across our nation. Join us this week or any week for a fulfilling chance at making a difference in the lives of others.
Tuesday, August 10, 2010
Thursday, August 5, 2010
Stop Foreclosure's
20 million underwater mortgages by 2012?
More than 14 million borrowers were underwater as of Q110, and with a further 10.8% decline in house prices expected relative to Q409 levels, another 6 million borrowers are likely fall into negative equity by the end of 2011, according to commentary today by Deutsche Bank. The presence of negative equity goes hand-in-hand with an increased likelihood of strategic default, as borrowers may sometimes not be willing to pay the mortgage when the house has lost substantial amounts of value. The firm noted that, even when strategic default makes economic sense, many borrowers resist on moral and social grounds, as well as from fear of legal consequences. The existence of recourse — when a lender is able to pursue a borrower's other assets — also acts as a disincentive against strategic default.
Deutsche Bank noted 11 states are considered non-recourse — though not all explicitly forbid deficiency judgments on homes or on purchase loans. Underwater borrowers are more likely to default in non-recourse states. The greater the negative equity, the higher the cumulative default rate. "Walk away or strategic default from a house with negative equity makes economic sense, especially in locations that have less expensive rentals," Deutsche Bank researchers said. "Many existing academic studies model homeowners' default decision based on the theoretical hypothesis that a borrower would exercise a default when it is in-the-money, i.e., when the borrower's house has negative equity. Therefore, a homeowner with negative equity would default even though they can still afford to make their mortgage payments.
We will assist anyone in fighting off the foreclosure process, let's change the perception of this current financial environment!
More than 14 million borrowers were underwater as of Q110, and with a further 10.8% decline in house prices expected relative to Q409 levels, another 6 million borrowers are likely fall into negative equity by the end of 2011, according to commentary today by Deutsche Bank. The presence of negative equity goes hand-in-hand with an increased likelihood of strategic default, as borrowers may sometimes not be willing to pay the mortgage when the house has lost substantial amounts of value. The firm noted that, even when strategic default makes economic sense, many borrowers resist on moral and social grounds, as well as from fear of legal consequences. The existence of recourse — when a lender is able to pursue a borrower's other assets — also acts as a disincentive against strategic default.
Deutsche Bank noted 11 states are considered non-recourse — though not all explicitly forbid deficiency judgments on homes or on purchase loans. Underwater borrowers are more likely to default in non-recourse states. The greater the negative equity, the higher the cumulative default rate. "Walk away or strategic default from a house with negative equity makes economic sense, especially in locations that have less expensive rentals," Deutsche Bank researchers said. "Many existing academic studies model homeowners' default decision based on the theoretical hypothesis that a borrower would exercise a default when it is in-the-money, i.e., when the borrower's house has negative equity. Therefore, a homeowner with negative equity would default even though they can still afford to make their mortgage payments.
We will assist anyone in fighting off the foreclosure process, let's change the perception of this current financial environment!
Saturday, July 31, 2010
Housing Down
The Commerce Department says housing starts dropped 5.0% to a seasonally adjusted annual rate of 549,000 units, the lowest level since October. It was the second straight month of decline in activity and was well below market expectations for a 580,000-unit rate. May's housing starts were previously reported as a 10.0% drop, but are now revised down to show a 14.9% decline. Compared to June last year, starts were down 5.8%, the biggest decline since November. Driving the June decline was a more than 20% drop in the volatile condominium and apartment market. Construction of single-family homes, the biggest part of the market, was down slightly by 0.7%. The only positive sign in the report was an unexpected 2.1% rise in applications for building permits to a 586,000-unit pace in June.
That followed a 5.9% drop in May and compared to analysts' expectations for a slip to 570,000 units. Still, the slumping job market and competition from foreclosed properties have forced builders to limit construction, especially after tax credits that spurred sales expired at the end of April. "Despite record low mortgage rates, housing is at risk of a double dip unless job growth strengthens soon," said Sal Guatieri, senior economist at BMO Capital Markets. Economists had had predicted that construction would fall to a rate of 580,000 and had projected that building permits would sink to a rate of 570,000, according to Thomson Reuters. In a typical economic recovery, the construction sector provides much of the fuel. But not this time. While developers have cut back on construction and the number of new homes on the market has fallen dramatically, they still must compete against foreclosed homes selling at deep discounts.
That followed a 5.9% drop in May and compared to analysts' expectations for a slip to 570,000 units. Still, the slumping job market and competition from foreclosed properties have forced builders to limit construction, especially after tax credits that spurred sales expired at the end of April. "Despite record low mortgage rates, housing is at risk of a double dip unless job growth strengthens soon," said Sal Guatieri, senior economist at BMO Capital Markets. Economists had had predicted that construction would fall to a rate of 580,000 and had projected that building permits would sink to a rate of 570,000, according to Thomson Reuters. In a typical economic recovery, the construction sector provides much of the fuel. But not this time. While developers have cut back on construction and the number of new homes on the market has fallen dramatically, they still must compete against foreclosed homes selling at deep discounts.
Thursday, July 29, 2010
Obama’s mortgage plan in troubled waters
A new government report released Monday shows that more troubled homeowners have fallen out of trial mortgage modifications than have received long-term help The administration's signature housing-rescue plan, Home Affordable Modification Program, known as HAMP saw a surge of people leave the initiative in May. More than 152,000 have had their trial adjustments cancelled since the program started, mainly because they could not document their income or because they earned too much to qualify for assistance, officials said. Nearly 430,000 borrowers have had their trials cancelled -- more than one-third of the total started. Servicers place troubled borrowers in trial modifications for several months to verify their income and see whether they can make the lowered payments. More than 70% of those cancelled this month had been in trial for at least six months.
"The administration's housing policies, combined with actions of the Fed, have lowered mortgage interest rates, helped stabilize home prices and reduced the rate of foreclosures, repairing some of the damage caused by the financial crisis to the financial security of millions and millions of American families," said Treasury Secretary Tim Geithner. But a deeper look at the scorecard shows that dark clouds remain over the housing market. Completed foreclosures soared to 93,800 in May, up from 65,000 a year earlier, while delinquency rates for borrowers with the best credit history jumped a full point to 5.9% in the first quarter. Borrowers who owe more than their house is worth rose to 11.3 million in the first quarter, up from 10.2 million a year earlier. The number of vacant homes held off the market rose to 3.6 million in the first quarter, up from 3.5 million a year earlier. The number of mortgages refinanced in the first quarter fell to 1.17 million, from 1.31 million during the same period in 2009.
A new government report released Monday shows that more troubled homeowners have fallen out of trial mortgage modifications than have received long-term help The administration's signature housing-rescue plan, Home Affordable Modification Program, known as HAMP saw a surge of people leave the initiative in May. More than 152,000 have had their trial adjustments cancelled since the program started, mainly because they could not document their income or because they earned too much to qualify for assistance, officials said. Nearly 430,000 borrowers have had their trials cancelled -- more than one-third of the total started. Servicers place troubled borrowers in trial modifications for several months to verify their income and see whether they can make the lowered payments. More than 70% of those cancelled this month had been in trial for at least six months.
"The administration's housing policies, combined with actions of the Fed, have lowered mortgage interest rates, helped stabilize home prices and reduced the rate of foreclosures, repairing some of the damage caused by the financial crisis to the financial security of millions and millions of American families," said Treasury Secretary Tim Geithner. But a deeper look at the scorecard shows that dark clouds remain over the housing market. Completed foreclosures soared to 93,800 in May, up from 65,000 a year earlier, while delinquency rates for borrowers with the best credit history jumped a full point to 5.9% in the first quarter. Borrowers who owe more than their house is worth rose to 11.3 million in the first quarter, up from 10.2 million a year earlier. The number of vacant homes held off the market rose to 3.6 million in the first quarter, up from 3.5 million a year earlier. The number of mortgages refinanced in the first quarter fell to 1.17 million, from 1.31 million during the same period in 2009.
Drop in Home Sales
Is Drop in Home Sales Good News? Only if you want to thrive!
“For all of you out there who accuse me of perpetual bearishness, here's a twist: What if the drop in existing home sales in May is a good thing? Try to follow me on this: Everyone expected home sales to surge in May because this Realtor's survey is based on closings in May from contracts signed in March and April. The May and June numbers should reflect the surge from the now-expired home buyer tax credit. Well today's report showed a drop of 2.2 percent in existing home sales, leading us to believe that this last government stimulus really didn't do the trick. So what if it didn't? Last fall the tax credit really juiced the market, pulling demand forward, so that we saw a huge drop-off in the months following what we thought was the end of the credit, which was then of course extended and expanded.
So now we're not seeing the same juice, but the numbers aren't terrible either. Perhaps there was no big rush, so perhaps there will be no big drop-off. Here's what we do know: (a) First-time homebuyers accounted for 46% of sales in May (49% in April) (b) Investors accounted for 14% of sales in May (15% in April) (c) All cash accounted for 25% of sales in May (26% in April). So first time buyers actually fell in numbers, but investors and all cash (which are often investors) remained pretty steady. Investors, at least for distressed properties, are what we need right now to soak up all the excess inventory. Don't get me wrong, I'm pretty certain we're going to see a drop-off in sales. A lot of sellers probably got caught up in the idea that the stimulus would create lasting recovery, and so decided to jump in. Tomorrow we get the report on sales of new construction in May. That report is based on contracts signed in May, not closings, so it will give us an idea of just how bad the post credit hangover will be.”
“For all of you out there who accuse me of perpetual bearishness, here's a twist: What if the drop in existing home sales in May is a good thing? Try to follow me on this: Everyone expected home sales to surge in May because this Realtor's survey is based on closings in May from contracts signed in March and April. The May and June numbers should reflect the surge from the now-expired home buyer tax credit. Well today's report showed a drop of 2.2 percent in existing home sales, leading us to believe that this last government stimulus really didn't do the trick. So what if it didn't? Last fall the tax credit really juiced the market, pulling demand forward, so that we saw a huge drop-off in the months following what we thought was the end of the credit, which was then of course extended and expanded.
So now we're not seeing the same juice, but the numbers aren't terrible either. Perhaps there was no big rush, so perhaps there will be no big drop-off. Here's what we do know: (a) First-time homebuyers accounted for 46% of sales in May (49% in April) (b) Investors accounted for 14% of sales in May (15% in April) (c) All cash accounted for 25% of sales in May (26% in April). So first time buyers actually fell in numbers, but investors and all cash (which are often investors) remained pretty steady. Investors, at least for distressed properties, are what we need right now to soak up all the excess inventory. Don't get me wrong, I'm pretty certain we're going to see a drop-off in sales. A lot of sellers probably got caught up in the idea that the stimulus would create lasting recovery, and so decided to jump in. Tomorrow we get the report on sales of new construction in May. That report is based on contracts signed in May, not closings, so it will give us an idea of just how bad the post credit hangover will be.”
Wednesday, July 28, 2010
foreclosures vs short sale
Depending on the State, an NOD (notice of default) gets filed by the lender or bank in public records dept. This notice refers to the owner of the mortgage note is 90 days late and the foreclosure process ensues, the bank shells out all the admin costs and among other things the home owner now is required to pay in full plus penalties or risk the loss of their home, and in most cases takes a 7 year hit on their credit report. During this time knowing any day that an eviction notice gets pinned to the door or a knock on the door has the new buyer at auction, calling to claim their property.
Short Sales change the dynamic entirely in a positive direction. An Investor or Agent negotiates a lesser balance payoff to the mortgage note, the lender wipes this non performing asset off their books, the homeowner leaves with no costs and little damage to their credit, hence allowing quicker recovery time for their status. The Realtor or Broker gets a home to list with instant equity and faster turnover rate. The State, County starts their tax basis recovery and a new family finds their dream home while the bank or lender gets back to loaning money, all in one transaction
Short Sales change the dynamic entirely in a positive direction. An Investor or Agent negotiates a lesser balance payoff to the mortgage note, the lender wipes this non performing asset off their books, the homeowner leaves with no costs and little damage to their credit, hence allowing quicker recovery time for their status. The Realtor or Broker gets a home to list with instant equity and faster turnover rate. The State, County starts their tax basis recovery and a new family finds their dream home while the bank or lender gets back to loaning money, all in one transaction
Wednesday, May 27, 2009
Bret Austin
My goal in this life is to bring a special gift to all that want to partake!My mantra is to view this world in a keener site,to look at everything as if it can be altered by a different way of thinking the spirit in all of us has been given to us at birth but not known by many of the elders that has reared us,and this to me is a grossly mistaken crime.We all have it in us to change our perspectives in a simple thought form,we can easily bring all our dreams to realities,wholer,perfecter,stronger,powerfuler,lovinger,
happier,healthier,wealthier,more abundant lives in just a few more moments of Infinite Intelligent approach to this live.Bret has done this as well as many others,but the key is your master,you get to unlock the doors to your futures,you my friends are the master of your own destiny.The church goers,nay sayers,politicians,neighbors,family members many of these general statement groups will try to convince you that it is not you but something or someone else that is in charge,but again i am here to tell you otherwise,it's you,and you only take charge and give in and i will promise anyone whom wants to really know thats today is this first day of the rest of your lives folks,so get it going now.......
happier,healthier,wealthier,more abundant lives in just a few more moments of Infinite Intelligent approach to this live.Bret has done this as well as many others,but the key is your master,you get to unlock the doors to your futures,you my friends are the master of your own destiny.The church goers,nay sayers,politicians,neighbors,family members many of these general statement groups will try to convince you that it is not you but something or someone else that is in charge,but again i am here to tell you otherwise,it's you,and you only take charge and give in and i will promise anyone whom wants to really know thats today is this first day of the rest of your lives folks,so get it going now.......
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