NEW YORK (CNNMoney.com) -- Short sales are the hottest thing going in the distressed-property market, and the trend is expected to get even hotter in coming weeks, when the government starts handing out cash to encourage lenders to close these deals.
"Banks have ramped up short sale approvals," said Duane Legate of House Buyer Network, which connects short sellers with buyers. "They're hiring a lot of the people who once worked in the mortgage-lending industry and moved them over to short sales."
These transactions, where lenders allow homeowners to sell their houses for less than they owe, accounted for 17% of all residential real estate sales in February, up from nearly 13% in November, according to a monthly real estate market survey by Campbell/Inside Mortgage Finance.
And Bank of America (BAC, Fortune 500), the country's largest mortgage servicer, has more than doubled the number of short sales it processed in recent months.
Elizabeth Weintraub, a Sacramento, Calif.-area real estate agent who handles many short sales, was amazed at how quickly a recent deal went through. "Bank of America approved it in 24 days," she said. "That flipped me out."
This is a huge change from even just six months ago when the short-sale market was stalled and most people would describe the process has real estate hell. Because lenders stand to lose so much on these transactions, they have been reluctant to make short sales happen, often waiting months before getting back to potential buyers.
Beware: You lost your house but still have to pay
"In the past, many short sales would never come to fruition and the ones that did averaged over half a year to complete," said Chris Saitta, CEO of Equator, which produces short sale software.
"Things would just fall into a black hole and not come out again," added Weintraub.
And even when banks did agree to the sale, the process could be further complicated if the original owner had a second mortgage.
In most cases, the first lender is repaid in full before any money flows to a second-lein holder. And because most distressed borrowers are severely underwater, there's usually nothing left to send on. As a result, second-lein holders are left holding the bag and have been killing many deals.
But that has been changing. For one thing, banks realize that they make out far better financially with a short sale than a foreclosure. "The lenders lose 50% on a foreclosure and only 30% on a short sale," said Glenn Kelman, founder of the real estate Web site Redfin. "And short sales offer a way to get distressed properties off their books quickly."
And on April 5, lenders and mortgage investors will have even more incentives to offer troubled borrowers short sales instead of foreclosing.
Under the new Home Affordable Foreclosure Alternatives program, borrowers will earn a $3,000 "relocation incentive" and servicers will get $1,500 for handling a short sale.
The investors who actually own the mortgage notes will get $2,000 in exchange for sharing proceeds of the short sales with any second-lien holders. And, finally, those second lien holders will receive up to $6,000 for releasing their claims.
Lenders participating in the program must also determine the market values of properties early on and inform the owners of just what price they're willing to accept. Then, if owners come back to the lenders with bonafide offers, they have to be accepted within 10 days.
Equator's Saiita anticipates a short sale explosion in response to the new program. "The challenge will be handling all the volume," he said.
The company has already tweaked its software, which 58 servicers use, to handle the new HAFA rules. And that should help reduce the time it takes to execute a sale, which currently averages 88 days.
The boom in short sales may accelerate the end to the foreclosure crisis by cleaning out the overhang of borrowers in distress and replacing them with more stable homeowners.
Plus, these sales are better for distressed borrowers because their credit scores suffer less. Going through a foreclosure can knock 200 points off a FICO score, twice as much as the penalty for a short sale.
Tuesday, March 30, 2010
Tuesday, March 23, 2010
Short-Sale Incentives Start April 5th
Short-Sale Incentives Start April 5th
Potential buyers of short-sale homes might consider waiting until April 5th before making a formal offer.
That’s the date the federal government will begin offering lenders financial incentives to hasten the process. Under the new rules, banks will seek a BPO before the property is listed for sale and let the sellers know a minimum number they are willing to accept. If the sellers bring a buyer with a good offer, the lender must accept it within 10 days.
Not all sellers are eligible for the program, dubbed the Home Affordable Foreclosure Alternatives (HAFA), but enough are that it is probably worth waiting.
Source: The Wall Street Journal, June Fletcher (03/19/2010)
Potential buyers of short-sale homes might consider waiting until April 5th before making a formal offer.
That’s the date the federal government will begin offering lenders financial incentives to hasten the process. Under the new rules, banks will seek a BPO before the property is listed for sale and let the sellers know a minimum number they are willing to accept. If the sellers bring a buyer with a good offer, the lender must accept it within 10 days.
Not all sellers are eligible for the program, dubbed the Home Affordable Foreclosure Alternatives (HAFA), but enough are that it is probably worth waiting.
Source: The Wall Street Journal, June Fletcher (03/19/2010)
Friday, March 19, 2010
Analysts Say Rates Should Remain Low
This is fantastic NEWS!!!!!
Projections about where credit rates will go in the next year vary widely, but most mortgage analysts think the effect of the Federal Reserve’s move away from the market won’t be dramatic.
Analysts at Credit Suisse and FTN Financial Capital Markets predict that mortgage rates will stay between 5 percent and 5.25 percent for the rest of the year. Moody's Economy.com projects about 5.7 percent, and Barclays Capital says 6 percent.
“There is a lot of private money on the sidelines waiting to buy mortgage securities once the Fed stops gobbling most of them up,” says Laurie Goodman, senior managing director at mortgage-bond trader Amherst Securities Group.
Source: The Wall Street Journal, James R. Hagerty (03/13/2010)
Projections about where credit rates will go in the next year vary widely, but most mortgage analysts think the effect of the Federal Reserve’s move away from the market won’t be dramatic.
Analysts at Credit Suisse and FTN Financial Capital Markets predict that mortgage rates will stay between 5 percent and 5.25 percent for the rest of the year. Moody's Economy.com projects about 5.7 percent, and Barclays Capital says 6 percent.
“There is a lot of private money on the sidelines waiting to buy mortgage securities once the Fed stops gobbling most of them up,” says Laurie Goodman, senior managing director at mortgage-bond trader Amherst Securities Group.
Source: The Wall Street Journal, James R. Hagerty (03/13/2010)
Thursday, March 18, 2010
Foreclosures slowing, but still drive marketPhoenix Business Journal
Foreclosures slowing, but still drive marketPhoenix Business Journal
The number of foreclosures may be down in the Phoenix area, but home losses are still driving the region’s housing market, according to the latest Realty Studies report from the W. P. Carey School of Business at Arizona State University.
Foreclosure-related activity represented 65 percent of February sales, says associate professor of real estate Jay Butler, author of the report. That includes both foreclosure sales and the resale of previously foreclosed properties.
More than 3,300 homes were foreclosed on in the Phoenix area in February, however, the number is down from January’s 3,500 foreclosures, and from last February’s 4,300 foreclosures. The overall number of resales increased with more than 4,600 single-family homes sold in February compared with about 4,200 in January. However, the number is about the same as in February of 2009.
The median price of single-family homes also increased. In February, the median was $140,000, up from $136,500 in January and $133,000 last February. Condos resales remain stable at $95,000, the same as in January, but down from $121,000 a year ago.
“The fundamental problem remains that a weak recovery is restricting job growth that could impact the ability of property owners to maintain their homes, and a large number of adjustable rate mortgages are expected to reset in the coming months,” Butler said. “Further, owners, confronted with declining neighborhood values and restrictive debt amounts, could decide to walk away from their homes.”
The number of foreclosures may be down in the Phoenix area, but home losses are still driving the region’s housing market, according to the latest Realty Studies report from the W. P. Carey School of Business at Arizona State University.
Foreclosure-related activity represented 65 percent of February sales, says associate professor of real estate Jay Butler, author of the report. That includes both foreclosure sales and the resale of previously foreclosed properties.
More than 3,300 homes were foreclosed on in the Phoenix area in February, however, the number is down from January’s 3,500 foreclosures, and from last February’s 4,300 foreclosures. The overall number of resales increased with more than 4,600 single-family homes sold in February compared with about 4,200 in January. However, the number is about the same as in February of 2009.
The median price of single-family homes also increased. In February, the median was $140,000, up from $136,500 in January and $133,000 last February. Condos resales remain stable at $95,000, the same as in January, but down from $121,000 a year ago.
“The fundamental problem remains that a weak recovery is restricting job growth that could impact the ability of property owners to maintain their homes, and a large number of adjustable rate mortgages are expected to reset in the coming months,” Butler said. “Further, owners, confronted with declining neighborhood values and restrictive debt amounts, could decide to walk away from their homes.”
Monday, March 1, 2010
Warren Buffett sees housing market bouncing back by 2011
HMMMM Interesting GREAT ARTICLE!
Warren Buffett sees housing market bouncing back by 2011
By Andrew Frye, Bloomberg News
Billionaire Warren Buffett said the U.S. will recover from the residential real estate slump by 2011 as demand for houses catches up with the supply that accumulated during the bubble.
"Within a year or so, residential housing problems should largely be behind us," Buffett wrote Saturday in his annual letter to the shareholders of his Berkshire Hathaway. "Prices will remain far below 'bubble' levels, of course, but for every seller or lender hurt by this there will be a buyer who benefits. Indeed, many families that couldn't afford to buy an appropriate home a few years ago now find it well within their means."
Record foreclosures flooded a U.S. real estate market already glutted with unsold property, causing housing starts to fall.
"People thought it was good news a few years back when housing starts — the supply side of the picture — were running about 2 million annually," wrote Buffett, 79, chairman and CEO of Omaha-based Berkshire. "But household formations — the demand side — only amounted to about 1.2 million."
Buffett built Berkshire into a $198 billion company through takeovers and investments in companies he believes have lasting competitive advantages and superior management.
Berkshire, which has a real estate brokerage, a business that constructs prefabricated houses and units making products used in home building, has suffered in the downturn. Profit at carpet maker Shaw Industries fell 30% last year to $144 million.
He's very deeply invested in this, said Tom Russo, partner at Gardner Russo & Gardner, which holds Berkshire stock. Across his industrial companies, he's massively poised to gain from a housing recovery, Russo said.
Buffett wrote that his company should have bought more corporate and municipal bonds last year because they were cheap compared with U.S. Treasuries. When it's raining gold, reach for a bucket, not a thimble, he said.
Buffett has used past letters to discuss plans for his successor, praise Berkshire managers and confess his failings. Last year he said the U.S. economy was in shambles after reckless lending.
Buffett said this year that the CEOs and boards of companies that failed during the credit crisis shouldn't be able to pass blame to those below them. Boards should insist on CEOs taking responsibility for risk, he said.
Shareholders weren't the ones who botched the operations of some of the largest financial institutions, Buffett said, yet they have borne the burden, with 90% or more of their holdings wiped out in cases of failure.
Buffett agreed to his largest deal last year when he arranged the $27 billion takeover of railroad Burlington Northern Santa Fe. Berkshire completed the acquisition, which Buffett described as an all-in wager on the U.S. economy, on Feb. 12.
Shares of Berkshire traded at about $15 when Buffett took control in 1965. The class A stock closed yesterday at $119,800, its highest since October 2008. Buffett added class B shares in 1996, and agreed to split them this year to help pay Burlington Northern shareholders.
Warren Buffett sees housing market bouncing back by 2011
By Andrew Frye, Bloomberg News
Billionaire Warren Buffett said the U.S. will recover from the residential real estate slump by 2011 as demand for houses catches up with the supply that accumulated during the bubble.
"Within a year or so, residential housing problems should largely be behind us," Buffett wrote Saturday in his annual letter to the shareholders of his Berkshire Hathaway. "Prices will remain far below 'bubble' levels, of course, but for every seller or lender hurt by this there will be a buyer who benefits. Indeed, many families that couldn't afford to buy an appropriate home a few years ago now find it well within their means."
Record foreclosures flooded a U.S. real estate market already glutted with unsold property, causing housing starts to fall.
"People thought it was good news a few years back when housing starts — the supply side of the picture — were running about 2 million annually," wrote Buffett, 79, chairman and CEO of Omaha-based Berkshire. "But household formations — the demand side — only amounted to about 1.2 million."
Buffett built Berkshire into a $198 billion company through takeovers and investments in companies he believes have lasting competitive advantages and superior management.
Berkshire, which has a real estate brokerage, a business that constructs prefabricated houses and units making products used in home building, has suffered in the downturn. Profit at carpet maker Shaw Industries fell 30% last year to $144 million.
He's very deeply invested in this, said Tom Russo, partner at Gardner Russo & Gardner, which holds Berkshire stock. Across his industrial companies, he's massively poised to gain from a housing recovery, Russo said.
Buffett wrote that his company should have bought more corporate and municipal bonds last year because they were cheap compared with U.S. Treasuries. When it's raining gold, reach for a bucket, not a thimble, he said.
Buffett has used past letters to discuss plans for his successor, praise Berkshire managers and confess his failings. Last year he said the U.S. economy was in shambles after reckless lending.
Buffett said this year that the CEOs and boards of companies that failed during the credit crisis shouldn't be able to pass blame to those below them. Boards should insist on CEOs taking responsibility for risk, he said.
Shareholders weren't the ones who botched the operations of some of the largest financial institutions, Buffett said, yet they have borne the burden, with 90% or more of their holdings wiped out in cases of failure.
Buffett agreed to his largest deal last year when he arranged the $27 billion takeover of railroad Burlington Northern Santa Fe. Berkshire completed the acquisition, which Buffett described as an all-in wager on the U.S. economy, on Feb. 12.
Shares of Berkshire traded at about $15 when Buffett took control in 1965. The class A stock closed yesterday at $119,800, its highest since October 2008. Buffett added class B shares in 1996, and agreed to split them this year to help pay Burlington Northern shareholders.
Thursday, January 28, 2010
Foreclosure data: Prices are close to the bottom
. Craig Anderson - Jan. 28, 2010 12:00 AM
The Arizona Republic
For the first time since the foreclosure crisis began, the price of a Phoenix-area foreclosed home is roughly the same as it was a year ago.
Arizona State University professor Karl Guntermann, who publishes the monthly ASU Repeat Sales Index housing report, said preliminary data for December show the median price for a foreclosed home was down just 2 percent from December 2008.
"If the preliminary numbers hold up, the foreclosure segment of the housing market will have reached bottom," Guntermann said. "A leveling out of the foreclosure RSI (Repeat Sales Index) would reflect both the substantial decline in prices that has occurred over the past two years and increased demand from first-time buyers and investors for those homes."
Guntermann said he was "a little surprised" that the index showed foreclosures so close to bottoming out.
In October, foreclosed homes still were selling at about 15 percent less than they had a year earlier, and by November that change had decreased to 8 percent, Guntermann said.
Then, in December, the annual drop shrank to a mere 2 percent, based on early numbers.
The December median sale price for the homes that Guntermann tracks was $127,000, up from November's median price of $120,000.
The index for non-foreclosed homes showed a very different trend in December, indicating that the Valley housing market continues to follow two distinct paths: one for bank-owned home sales and the other for more traditional sales.
The median sale price for non-foreclosures continued on a steady decline that barely has budged in more than a year.
"By October 2008, non-foreclosures were declining at an annual rate of 20 percent, and they still are," Guntermann said.
December's median price for traditional sales was $158,000, compared with $166,000 in November.
The index does not correlate exactly with year-over-year price changes, he said, because there is a sort of reverse momentum built into the calculation that lowers the index slightly if it's on the rise, and raises it slightly if it's on the decline.
It has been dropping for a record 32 months since home prices peaked in mid-2006.
Still, Guntermann said that is likely to change within the next few months.
The overall index, including foreclosed-home and traditional sales, was down 12 percent from a year earlier.
That's a sizeable improvement over November, when it was down 17 percent.
The overall median price in December was $133,000, down from $135,000 in November, early data show.
The Arizona Republic
For the first time since the foreclosure crisis began, the price of a Phoenix-area foreclosed home is roughly the same as it was a year ago.
Arizona State University professor Karl Guntermann, who publishes the monthly ASU Repeat Sales Index housing report, said preliminary data for December show the median price for a foreclosed home was down just 2 percent from December 2008.
"If the preliminary numbers hold up, the foreclosure segment of the housing market will have reached bottom," Guntermann said. "A leveling out of the foreclosure RSI (Repeat Sales Index) would reflect both the substantial decline in prices that has occurred over the past two years and increased demand from first-time buyers and investors for those homes."
Guntermann said he was "a little surprised" that the index showed foreclosures so close to bottoming out.
In October, foreclosed homes still were selling at about 15 percent less than they had a year earlier, and by November that change had decreased to 8 percent, Guntermann said.
Then, in December, the annual drop shrank to a mere 2 percent, based on early numbers.
The December median sale price for the homes that Guntermann tracks was $127,000, up from November's median price of $120,000.
The index for non-foreclosed homes showed a very different trend in December, indicating that the Valley housing market continues to follow two distinct paths: one for bank-owned home sales and the other for more traditional sales.
The median sale price for non-foreclosures continued on a steady decline that barely has budged in more than a year.
"By October 2008, non-foreclosures were declining at an annual rate of 20 percent, and they still are," Guntermann said.
December's median price for traditional sales was $158,000, compared with $166,000 in November.
The index does not correlate exactly with year-over-year price changes, he said, because there is a sort of reverse momentum built into the calculation that lowers the index slightly if it's on the rise, and raises it slightly if it's on the decline.
It has been dropping for a record 32 months since home prices peaked in mid-2006.
Still, Guntermann said that is likely to change within the next few months.
The overall index, including foreclosed-home and traditional sales, was down 12 percent from a year earlier.
That's a sizeable improvement over November, when it was down 17 percent.
The overall median price in December was $133,000, down from $135,000 in November, early data show.
Wednesday, January 27, 2010
Pending home sales, prices on the rise
January’s rise in pending home sales is a critical recovery indicator for Arizona’s real estate market, says Mesa analyst Michael Orr.
While that indicates prices are likely to increase, the recovery is expected to be shallow and slow, said the author of the Cromford Report, an online subscription-based resource on the metro Phoenix residential resale market.
The latest report shows pending sales hit a record 9,883 in the first week of January 2010 — a 79 percent increase over the 5,530 tally a year ago.
The Arizona real estate market peaked in June 2006, with the bottom hitting in April 2009 and maximum inventory of homes on the market in late April 2008, according to the report and Fidelity National Title.
“Like a supertanker, once the real estate market gathers momentum, it is very slow to turn around,” Orr said. “2010 won’t see a dramatic shift, but we can expect to see a shallow upward trend across the market. The number of homes under contract is more than double what it was last January, and sale price increases are likely to follow.”
While demand has cooled at the bottom of the market, activity is warming for homes in the $250,000-$400,000 range, but individual neighborhoods may vary, according to the report.
And short sales are on the rise.
“The last three months of 2009 saw a 60 percent increase in short sale closings,” says Fidelity Senior Vice President Steve de Laveaga. “In 2010, you will see a number of lenders move to aggressive short sale programs and cash for keys for sellers.”
http://www.bizjournals.com/phoenix/stories/2010/01/25/daily26.html?s=industry&i=resi_real_estate
While that indicates prices are likely to increase, the recovery is expected to be shallow and slow, said the author of the Cromford Report, an online subscription-based resource on the metro Phoenix residential resale market.
The latest report shows pending sales hit a record 9,883 in the first week of January 2010 — a 79 percent increase over the 5,530 tally a year ago.
The Arizona real estate market peaked in June 2006, with the bottom hitting in April 2009 and maximum inventory of homes on the market in late April 2008, according to the report and Fidelity National Title.
“Like a supertanker, once the real estate market gathers momentum, it is very slow to turn around,” Orr said. “2010 won’t see a dramatic shift, but we can expect to see a shallow upward trend across the market. The number of homes under contract is more than double what it was last January, and sale price increases are likely to follow.”
While demand has cooled at the bottom of the market, activity is warming for homes in the $250,000-$400,000 range, but individual neighborhoods may vary, according to the report.
And short sales are on the rise.
“The last three months of 2009 saw a 60 percent increase in short sale closings,” says Fidelity Senior Vice President Steve de Laveaga. “In 2010, you will see a number of lenders move to aggressive short sale programs and cash for keys for sellers.”
http://www.bizjournals.com/phoenix/stories/2010/01/25/daily26.html?s=industry&i=resi_real_estate
Tuesday, January 26, 2010
GREAT NEWS 90 Day Flip Rule LIFTED!!!
Here it is!!!! What great news for ALL buyers and investors!
FHA To Waive 90 Day Flip Rule
In the current marketplace home buyers are prevented from obtaining an FHA loan for the purchase of a home that had been acquired in the past 90 days buy the seller. In essence, a buyer was unable to purchase a flipped property, or one that was bought and sold quickly. However, come February 1, 2010 this rule will change to allow for home buyers, with certain restrictions, to buy these type of properties. The new 90 day flip waiver complete information has already been released by the FHA and will be in place for the next 12 months. Below is an excerpt from the official release of this new program waiver. Of Course as always we will provide additional updates on this program, including when lenders will officially start allowing this type of financing again as well.
"In today's market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.
The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.
The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:
•All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
•In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions."
FHA To Waive 90 Day Flip Rule
In the current marketplace home buyers are prevented from obtaining an FHA loan for the purchase of a home that had been acquired in the past 90 days buy the seller. In essence, a buyer was unable to purchase a flipped property, or one that was bought and sold quickly. However, come February 1, 2010 this rule will change to allow for home buyers, with certain restrictions, to buy these type of properties. The new 90 day flip waiver complete information has already been released by the FHA and will be in place for the next 12 months. Below is an excerpt from the official release of this new program waiver. Of Course as always we will provide additional updates on this program, including when lenders will officially start allowing this type of financing again as well.
"In today's market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.
The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.
The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:
•All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
•In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions."
Thursday, December 10, 2009
NATnews - Housing business picks up in Valley; foreclosures drop
Our market is still moving in a POSTIVE direction!!!
Housing business picks up in Valley; foreclosures drop - Here are some key data and predictions from Land Advisors' debut real-estate forecast event last week:
• Almost one-fourth of metro Phoenix's current new-home developments will sell out in the next six months.
• Phoenix's housing market hit bottom in early April, said Mike Orr, principal of the Cromford Report, a real-estate research firm. Based on current price trends, the housing market could start to see positive appreciation rates by March.
• Last month was the second-best November for home sales in the area's history. Only November 2004 was better.
• Meanwhile, both foreclosures and preforeclosures fell in Phoenix during November. Foreclosures dropped 21% from October to 3,808. Preforeclosures dipped 9%, to 7,149.
http://www.azcentral.com/arizonarepublic/business/articles/2009/12/08/20091208biz-catherine1209.html
New FHA Guidelines Could Amp Condo Sales - "FHA approved" may soon become the most popular condo amenity, thanks to the new guidelines established by the FHA to take effect February 1, 2010. The guidelines addressed the two imperatives facing condominium sales: down payments and the financial integrity of condo associations. "FHA approved" used to mean a 3.5% down payment. Starting early next year, "FHA approved" will mean 3.5% down plus a financially stable association approved by your lender. This is huge. See the full article for details on the new guidelines.
http://realtytimes.com/rtpages/20091209_fhaguidelines.htm
Mortgage applications jump 8.5% as interest rates tick up - Mortgage applications jumped 8.5% the week ended Dec. 4, as more borrowers refinanced loans to lock in interest rates near record lows, according to the Mortgage Bankers Association. Refinancing applications were up 11.1% from the previous week; purchase applications were up 4%. Customers looking to refinance existing mortgages accounted for 74% of all applications, up from 72% the previous week.
http://www.usatoday.com/money/economy/housing/2009-12-09-mortgage-applications_N.htm
Housing business picks up in Valley; foreclosures drop - Here are some key data and predictions from Land Advisors' debut real-estate forecast event last week:
• Almost one-fourth of metro Phoenix's current new-home developments will sell out in the next six months.
• Phoenix's housing market hit bottom in early April, said Mike Orr, principal of the Cromford Report, a real-estate research firm. Based on current price trends, the housing market could start to see positive appreciation rates by March.
• Last month was the second-best November for home sales in the area's history. Only November 2004 was better.
• Meanwhile, both foreclosures and preforeclosures fell in Phoenix during November. Foreclosures dropped 21% from October to 3,808. Preforeclosures dipped 9%, to 7,149.
http://www.azcentral.com/arizonarepublic/business/articles/2009/12/08/20091208biz-catherine1209.html
New FHA Guidelines Could Amp Condo Sales - "FHA approved" may soon become the most popular condo amenity, thanks to the new guidelines established by the FHA to take effect February 1, 2010. The guidelines addressed the two imperatives facing condominium sales: down payments and the financial integrity of condo associations. "FHA approved" used to mean a 3.5% down payment. Starting early next year, "FHA approved" will mean 3.5% down plus a financially stable association approved by your lender. This is huge. See the full article for details on the new guidelines.
http://realtytimes.com/rtpages/20091209_fhaguidelines.htm
Mortgage applications jump 8.5% as interest rates tick up - Mortgage applications jumped 8.5% the week ended Dec. 4, as more borrowers refinanced loans to lock in interest rates near record lows, according to the Mortgage Bankers Association. Refinancing applications were up 11.1% from the previous week; purchase applications were up 4%. Customers looking to refinance existing mortgages accounted for 74% of all applications, up from 72% the previous week.
http://www.usatoday.com/money/economy/housing/2009-12-09-mortgage-applications_N.htm
Thursday, November 12, 2009
HOUSING: Market faces short-sale stampede in 2010, forecasters say
Our predictions seem to be matched by MANY others in the Real Estate industry, see this most recently written article:
By ERIC WOLFF - ewolff@nctimes.com Posted: Wednesday, November 11, 2009 4:10 pm
Short sales of homes frustrate buyers, annoy lenders, and cause real estate agents to tear their hair out waiting for deals to close.
In 2010, there will be a whole lot more of them, a market research firm said.
Surveys conducted by Campbell Communications show that short-sale inventory is rising quickly, and can be expected to do so even faster in the next few years. Meanwhile the number of ordinary home sales and foreclosures will grow slowly.
A housing market swamped by a wave of subprime mortgage foreclosures that peaked in 2007 is facing billions of dollars of adjustable loans that begin to recast in 2010, according to data from Credit Suisse. As low "teaser" rates expire, mortgage payments will jump for many homeowners.
With U.S. unemployment higher than 10 percent and the economy showing few signs of improving, analysts foresee a herd of distressed properties reaching the market between 2010 and 2012. But real estate agents waiting for a stampede of foreclosures to break out may be left standing at the gate, as homeowners seek alternative ways to avoid defaults.
"When someone becomes unemployed, there's a number of options. One is foreclosure," said Thomas Popik, Cambell Communications' research director. "Increasingly, a number of other options are available."
President Barack Obama has made avoiding foreclosure a priority in his administration. As part of the American Recovery and Reconstruction Act, lenders were offered incentives to modify loans of distressed property owners.
"We have a massive government intervention going on," said Sean O'Toole, founder and chief analyst for real estate Web site ForeclosureRadar. "We simply don't have the political will to foreclose on these folks."
In a short sale, borrowers get permission from their lenders to sell their property for less then they owe on a loan.
They solicit buyers and submit bids to a mortgage servicer, which in turn determines whether or not to approve the sale. If the sale is approved, the buyer can get a home at a discount, the seller avoids having a foreclosure as part of their financial record, and the bank can avoid becoming a homeowner.
"Banks are bad at owning real estate; they're not in that business and they're just bad at it," said Mark Goldman, an instructor at San Diego State University.
Lenders agree with Goldman on this point. A spokeswoman for GMAC Financial Services, Jeannine Bruin, said her company prioritizes keeping borrowers in their homes, but failing that, it prefers short sales to foreclosure. JPMorgan Chase & Co. has the same policy, spokesman Gary Kishner said.
"Foreclosure costs us a lot of money," Kishner said. "When a foreclosed house goes up for sale, we don't know how much house is going to go for. If we can avoid that, obviously it's better for us."
O'Toole has a sees it differently.
"What's pushing it forward is there's such a lack of inventory, and you've got this huge Realtor force that needs something to sell," he said. "This is one of the things that gives them something to sell."
Short sales also suffer from being complicated deals involving multiple lenders and thus multiple bureaucracies. In the end, the deals can take nine months or longer to complete.
"You'll have a lot of people lining up to offer short sales, but it's tough to get the banks attention to give them a deal," said Nathan Moeder, a real estate economist with The London Group.
And while most analysts agreed that there will be a substantial increase in short-sale inventory next year, not all think short sales will be a dominant force in the market.
"I don't think they'll become a stronger component of the market then REOs," O'Toole said, referring to bank-owned foreclosed properties. "I think REOs will still be a significant quantity, but I think we'll see a lot more growth in short sales than elsewhere."
By ERIC WOLFF - ewolff@nctimes.com Posted: Wednesday, November 11, 2009 4:10 pm
Short sales of homes frustrate buyers, annoy lenders, and cause real estate agents to tear their hair out waiting for deals to close.
In 2010, there will be a whole lot more of them, a market research firm said.
Surveys conducted by Campbell Communications show that short-sale inventory is rising quickly, and can be expected to do so even faster in the next few years. Meanwhile the number of ordinary home sales and foreclosures will grow slowly.
A housing market swamped by a wave of subprime mortgage foreclosures that peaked in 2007 is facing billions of dollars of adjustable loans that begin to recast in 2010, according to data from Credit Suisse. As low "teaser" rates expire, mortgage payments will jump for many homeowners.
With U.S. unemployment higher than 10 percent and the economy showing few signs of improving, analysts foresee a herd of distressed properties reaching the market between 2010 and 2012. But real estate agents waiting for a stampede of foreclosures to break out may be left standing at the gate, as homeowners seek alternative ways to avoid defaults.
"When someone becomes unemployed, there's a number of options. One is foreclosure," said Thomas Popik, Cambell Communications' research director. "Increasingly, a number of other options are available."
President Barack Obama has made avoiding foreclosure a priority in his administration. As part of the American Recovery and Reconstruction Act, lenders were offered incentives to modify loans of distressed property owners.
"We have a massive government intervention going on," said Sean O'Toole, founder and chief analyst for real estate Web site ForeclosureRadar. "We simply don't have the political will to foreclose on these folks."
In a short sale, borrowers get permission from their lenders to sell their property for less then they owe on a loan.
They solicit buyers and submit bids to a mortgage servicer, which in turn determines whether or not to approve the sale. If the sale is approved, the buyer can get a home at a discount, the seller avoids having a foreclosure as part of their financial record, and the bank can avoid becoming a homeowner.
"Banks are bad at owning real estate; they're not in that business and they're just bad at it," said Mark Goldman, an instructor at San Diego State University.
Lenders agree with Goldman on this point. A spokeswoman for GMAC Financial Services, Jeannine Bruin, said her company prioritizes keeping borrowers in their homes, but failing that, it prefers short sales to foreclosure. JPMorgan Chase & Co. has the same policy, spokesman Gary Kishner said.
"Foreclosure costs us a lot of money," Kishner said. "When a foreclosed house goes up for sale, we don't know how much house is going to go for. If we can avoid that, obviously it's better for us."
O'Toole has a sees it differently.
"What's pushing it forward is there's such a lack of inventory, and you've got this huge Realtor force that needs something to sell," he said. "This is one of the things that gives them something to sell."
Short sales also suffer from being complicated deals involving multiple lenders and thus multiple bureaucracies. In the end, the deals can take nine months or longer to complete.
"You'll have a lot of people lining up to offer short sales, but it's tough to get the banks attention to give them a deal," said Nathan Moeder, a real estate economist with The London Group.
And while most analysts agreed that there will be a substantial increase in short-sale inventory next year, not all think short sales will be a dominant force in the market.
"I don't think they'll become a stronger component of the market then REOs," O'Toole said, referring to bank-owned foreclosed properties. "I think REOs will still be a significant quantity, but I think we'll see a lot more growth in short sales than elsewhere."
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