Archive for October 2012

Yearly Price Gains Maintained by Decrease in Distressed Sales

October 30, 2012

 

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Summer’s end may have led to the close of a strong home-buying season, but a decrease in distressed sales is helping prices maintain their yearly gain and some regions are still experiencing monthly price increases.

As of August 23, 2012, prices fell 0.4 percent in 25 major U.S. metropolitan areas from July 23, 2012, according to Radar Logic’s RPX Composite price. Year-over-year, prices were still up 4.5 percent, and year-to-date, the RPX composite showed prices have risen 12.8 percent, the largest increase for the period since 2005.

When Radar Logic broke down the data based on region, a more complex picture was painted.

“There was considerable variation in price performance from region to region. In some areas prices have clearly peaked for the year and are now declining, while in others prices are still rising,” the real estate data provider said in its monthly housing report.

The Midwest and the West saw monthly price gains and rose 2.5 and 1.2 percent, respectively. In the South, prices were flat, increasing just 0.1 percent. Radar Logic said the South may have reached its seasonal peak and begin its seasonal descent. The Northeastern housing market brought the RPX Composite price down month-over-month with its 3.1 percent descent.

Year-over-year, price gains were seen in the South (6.7 percent), Midwest (7.3 percent) and West (9.2 percent). On the other hand, the Northeast fell 2.3 percent, according to the RPX Composite.

Over the last year, REO and foreclosure auction sales have seen a significant decline, which has helped to push up prices.

According to Radar Logic, motivated sales, or sales of REOs or foreclosures, fell to 13 percent of the total transaction count, down from 23 percent a year ago.

This decline in motivated sales led to the yearly increase in the RPX Composite. Over the last year since August 23, the price for motivated sales has been 34 to 42 percent less than the price for all other non-motivated transactions, according to data from Radar Logic.

To read the complete article please use the link below.

Yearly Price Gains

Can the Fed’s QE3 Policy Save the Economy?

October 30, 2012

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As the Federal Reserve launches its QE3 monetary policy, some interpret the plan as a sign Fed Chairman Ben Bernanke has “gone ‘all in’ on the U.S. housing market” and is clinging to hope the housing market can not only recover itself, but also restore the entire U.S. economy. This, at least, is the outlook of Global Markets Intelligence (GMI) Research.

The research firm suggests the Fed is turning to the housing market “as the last, best hope” for strengthening the overall economy and restoring “healthy self-sustained economic growth,” according to a GMI report released earlier this month.

“If QE3 does not work, we don’t think it’s much of a stretch to conclude that the U.S. financial system and economy is broken,” GMI stated, faulting “excess legacy indebtedness and excessive financial regulation” as the culprits.

As the Fed purchases $40 billion in mortgage-backed securities each month “for an unspecified but extended period of time,” GMI will watch vigilantly for signs of the plan’s success.

The first sign would be a sharp increase in mortgage applications. Specifically, GMI will look for the Mortgage Bankers Association’s purchase composite index to rise above 200.

“If the Fed is successful in supercharging the fledgling recovery in housing, we should see the index exceed 200 in fairly short order, presumably by the end of the first quarter of 2013 at the very latest,” GMI stated.

Following an uptick in applications, GMI would expect to see existing home sales rise, perhaps above the five million mark.

To read the complete article please use the link below.

QE3 Policy Save the Economy?

HUD Disaster Help

October 30, 2012

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I Just Got This In A HUD Email

U.S. Department of Housing and Urban Development – Shaun Donovan, Secretary

Office of Public Affairs, Washington, DC 20410

HUD No. 12-166/167                                                                                                         FOR RELEASE

April A. Brown                                                                                                            Tuesday

(202) 708-0685                                                                                                           October 30, 2012

www.hud.gov/news/

HUD SECRETARY ANNOUNCES FORECLOSURE PROTECTION

FOR DISPLACED NEW JERSEY AND NEW YORK STORM VICTIMS

WASHINGTON – U.S. Housing and Urban Development Secretary Shaun Donovan today announced HUD will speed federal disaster assistance to New York State and New Jersey, providing support to homeowners and low-income renters forced from their homes due to Hurricane Sandy.

Today, President Obama issued a disaster declaration for Bronx, Kings, Nassau, New York, Richmond, Suffolk, and Queens counties in New York.  The President also issued a disaster declaration for Atlantic, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean and Union Counties in New Jersey.  These declarations allow HUD to offer foreclosure relief and other assistance to certain families living in these counties.

“Families who may have been forced from their homes need to know that help is available to begin the rebuilding process,” said Donovan. “Whether it’s foreclosure relief for families with FHA-insured loans or helping these counties to recover, HUD stands ready to help in any way we can.”

HUD is:

Ø  Offering the New York, New Jersey and other entitlement communities the ability to re-allocate existing federal resources toward disaster relief – HUD’s Community Development Block Grant (CDBG) and HOME programs give the State and communities the flexibility to redirect millions of dollars to address critical needs, including housing and services for disaster victims. HUD is currently contacting State and local officials to explore opportunities to use the Department’s CDBG and HOME programs in order to expedite the repair and replacement of damaged housing;

Ø  Granting immediate foreclosure relief – HUD granted a 90-day moratorium on foreclosures and forbearance on foreclosures of Federal Housing Administration (FHA)-insured home mortgages;

Ø  Making mortgage insurance available – HUD’s Section 203(h) program provides FHA insurance to disaster victims who have lost their homes and are facing the daunting task of rebuilding or buying another home. Borrowers from participating FHA-approved lenders are eligible for 100 percent financing, including closing costs;

Ø  Making insurance available for both mortgages and home rehabilitation – HUD’s Section 203(k) loan program enables those who have lost their homes to finance the purchase or refinance of a house along with its repair through a single mortgage. It also allows homeowners who have damaged houses to finance the rehabilitation of their existing single-family home; and

Ø  Offering Section 108 loan guarantee assistance – HUD will offer state and local governments federally guaranteed loans for housing rehabilitation, economic development and repair of public infrastructure.

Ø  Information on housing providers and HUD programs -The Department will share information with FEMA and the State on housing providers that may have available units in the impacted counties.  This includes Public Housing Agencies and Multi-Family owners.  The Department will also connect FEMA and the State to subject matter experts to provide information on HUD programs and providers.

            Read about these and other HUD programs designed to assist disaster victims.

Once-Invisible Inventory Can Be Seen on Zillow

October 29, 2012

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Instead of finding clever ways to chase shadow inventory, Zillow has decided to make things easy for thrill-seeking homebuyers and investors who are trying to track down unlisted, invisible inventory.

The real estate data provider announced Thursday it is now providing information on 1.2 million pre-foreclosure and foreclosed properties at no cost. The homes provided through Zillow are not yet listed and apparently, are yet to be found on any Multiple Listing Service (MLS).

Before, only certain investors were privy to such information.

“For the first time, home shoppers are able to see the entire scope of housing inventory in their area, both pre-market and for-sale, side by side,” the company said in a release.

According to Zillow, 55 percent of homebuyers have considered purchasing a foreclosure, but the problem was where to find the information.

“This is another tremendous step forward in consumer empowerment. Zillow is taking information that was really only available to a select group – in this case, savvy investors – and making it more easily available to interested home buyers,” said Spencer Rascoff, Zillow’s CEO. “What’s more, bringing this information to light, and taking this inventory out of the shadows, can help bring these homes to market faster than ever before.”“

The pre-market inventory includes nearly 1 million pre-foreclosure properties, or homes that have begun the foreclosure process or have been scheduled for auction.

In addition, Zillow’s inventory has more than 260,000 unlisted foreclosed properties.

Zillow will also include its own estimate of the sale price of the home if sold as a foreclosure with the percentage and dollar discount based on fair market value. Foreclosure details will also be included, such as the timeline of the foreclosure process, unpaid balance, and the lender.

Another added feature will be 147,000 Make Me Move properties. For this feature, homeowners name a price for which they might sell their home.

To read the complete article please use the link below.

Once-Invisible Inventory Can Be Seen

Two-Thirds of the Largest Metros See Decline in Foreclosure Activity

October 29, 2012

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Foreclosure activity in a majority the nation’s largest metros slowed down in the third quarter, according to a foreclosure report from RealtyTrac.

From the second quarter to the third quarter of this year, 62 percent of metropolitan areas with a population of 200,000 or more saw a decrease in foreclosure activity, or 134 out of 212 metro areas.

Year-over-year, foreclosure activity was down in 131 out of 212 metro areas, representing 62 percent of the metros tracked.

RealtyTrac VP Daren Blomquist explained the decrease indicates “most of the nation’s housing markets are past the worst of the foreclosure problem.”

“In fact foreclosure activity in September 2012 was below September 2007 levels in 58 percent of the metro markets we track,” said Blomquist.

Among the 20 largest metros, 12 saw a year-over-year decline in foreclosure activity. The biggest declines were in San Francisco (36 percent), Detroit (31 percent), Los Angeles (29 percent), Phoenix (27 percent), and San Diego (26 percent).

At the same time, foreclosure activity shot up 69 percent in New York. Tampa (43 percent), Philadelphia (34 percent), and Chicago (34 percent) also saw significant increases in activity.

“Still, rebounding foreclosure activity in some markets remains a threat to home price stability and growth in those markets,” Blomquist added. “The rebounding foreclosure activity tends to be in markets where the foreclosure process slowed down most dramatically in the last two years, resulting in a buildup of foreclosures in limbo that lenders are finally working through this year.”

Seven out of 10 metros with the highest foreclosure rate were in California, despite significant decreases in foreclosure activity.

For example, Stockton ranked number one for its foreclosure rate, where one in every 67 housing units received a foreclosure filing. But, foreclosure activity in the metro fell 21 percent from a year ago.

To read the complete article please use the link below.

Decline in Foreclosure Activity

FOMC Maintains Policy Stance to Hold Down Rates

October 28, 2012

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Pointing to slow employment growth and an “elevated” unemployment rate, the Federal Open Market Committee said Wednesday the Federal Reserve “will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month.”

At the same time, the FOMC said it would maintain the target federal funds rate at 0 to 1/4 percent and said the “exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015.”

The Committee voted 11-1 with only Richmond Fed President Jeffrey M. Lacker dissenting.

The FOMC decision and action had been expected.

The policy actions will not directly address the FOMC’s dual policy mandates of maximum employment and price stability, but are expected to “put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative” and “to support a stronger economic recovery.”

Despite its observations about the labor sector, the Committee, in its last meeting before Election Day, painted a slightly upbeat picture of the economy.

“Household spending has advanced a bit more quickly, but growth in business fixed investment has slowed,” the FOMC said at the conclusion of a two-day meeting. The housing sector has shown some further signs of improvement, albeit from a depressed level. Inflation recently picked up somewhat, reflecting higher energy prices. Longer-term inflation expectations have remained stable.”

The statement said though “the Committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions” adding “strains in global financial markets continue to pose significant downside risks to the economic outlook.”

To read the complete article please use the link below.

Policy Stance to Hold Down Rates

Justice Department Sues B of A for Over $1B, Alleging Mortgage Fraud

October 28, 2012

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The U.S. Department of Justice sued Bank of America for over $1 billion for alleged mortgage fraud related to the sale of loans to Fannie Mae and Freddie Mac, Manhattan U.S. Attorney Preet Bharara announced in a release Wednesday.

According to the release, the civil fraud suit is a first for the Justice Department for mortgage loans sold to the GSEs.

The lawsuit stems from origination practices from Countrywide, which B of A acquired in 2008.

According to the complaint, from 2007 to 2009, Countrywide implemented a loan process called the “Hustle,” which pushed loans through the origination process by eliminating quality checkpoints and by compensating employees based on the volume of loans originated.

For example, the complaint stated Countrywide eliminated the use of an underwriter for many high risk loans and instead used loan processors who previously weren’t even qualified to answer borrower questions.

The complaint further alleges Countrywide informed Fannie Mae and Freddie Mac that it had actually tightened its underwriting guidelines during this time. As a result, the complaint stated thousands of defective loans were sold to Fannie Mae and Freddie Mac, resulting in over $1 billion in losses and loans that went into default.

“For the sixth time in less than 18 months, this Office has been compelled to sue a major U.S. bank for reckless mortgage practices in the lead-up to the financial crisis,” said Bharara.

To read the complete article please use the link below.

Justice Department Sues B of A