Posts Tagged ‘Foreclosures’

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Short Sales Get Shorter: New Deadlines to go into Effect

March 16, 2012

As part of a settlement with state attorneys general, the five largest mortgage servicers are adopting new requirements for short sales, which is expected to speed-up what has been known as a lengthy process.

Here are some of the new requirements for servicers under the settlement:

·     1.   Servicers must provide borrowers with a decision within 30 days after receiving a short sale package request.

·      2.  Servicers will be required to notify a borrower, also within 30 days, if any necessary documents are missing to process the short sale request.

·      3. Servicers must notify a borrower immediately if a deficiency payment is needed to approve the short sale. They also must provide an estimated amount for the deficiency payment needed for the short sale.

·      4.  Servicers are also required to form an internal group to review all short sale requests.

·     5.    Banks will be considered in violation of the settlement requirements if they take longer than 30 days on more than 10 percent of the short sale requests.
Violations can carry fines of up to $1 million and $5 million for repeat offenses.

“If a real estate broker can get a checklist from the bank detailing what documentation is needed, everything can be provided up front, and the bank will be required to give a thumbs-up or a thumbs-down within 30 days,” short sale specialist Chris Hanson with the Hanson Law Firm told HousingWire. “That’s not a bad deal.”

Source: Realtor Magazine

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STOP massive sale of foreclosed homes.

December 16, 2011

There is a simple way to address our current housing crisis – the sale of distressed properties could be easily slowed or stopped with ONE SIMPLE STEP. Banks need to write down the loans on homes that are underwater and allow good borrowers to refinance at today’s lower interest rates.

The most distressing things for most homeowners is that their homes are so UNDERVALUED that they will NEVER see a time when their home will be worth what they owe on it. It’s a reality and it is discouraging. Banks can start to turn the economy and housing around by going to people who are not in distress and beginning the process of re-evaluating value and re-negotiating outstanding balances to make home ownership attractive. To ignore this is fact is going to result in increased defaults and more short sales and foreclosures. It’s going to happen!

Recently, Moody’s released the following statement on the sale of foreclosed homes: They found that on average, a foreclosed property will be valued about 18 percent lower than average home prices, and will be subject to an additional sales discount of about 15 percent.

The banking industry is creating the depreciation of home values when they are personally responsible for the sale of homes at 30% less than fair market rate resulting in the downturn in value on surrounding homes. Banks are making a bad situation worse. I am shocked that no one seems to address this issue in the media or in Congress.

Who wins? Investors. Who loses? Everyone else – especially the American public.

If this fact is true then why not reduce the principal balance on underwater loans by 30% thereby rewarding homeowners who choose to stay in their homes and pay their mortgages. Does anyone really think that people are going to pay their loans out of a sense of obligation and responsibility? Seriously? I predict a mass exodus as people figure out that they are better off renting and getting out from a debt they can never actually pay off and for which their home will never be worth.

Let’s get serious about solutions to real estate and the housing crisis. Do I think this is going to happen? Hell, no. We have a government that is ineffective and impotent and a banking industry getting rich on investments. The American public continues to struggle with no one reaching out a helping hand. Is there anyone out there who can make a stand for the people?

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Foreclosures and the Local Markets

December 7, 2011

Market Analysis Must Be Granular to Be Relevant

By: Krista Franks 12/06/2011

Home price predictions have traditionally been fairly straightforward, relying heavily on employment and income levels, according to Michael Sklarz, president of Collateral Analytics. However, the last cycle has posed challenges for analysts, Sklarz said during a panel at the Five Star MPact Mortgage Conference and Expo in Dallas, Texas Tuesday.

For example, one of the leading market indicators throughout the housing crisis has been foreclosure sales, which rise and fall at the inverse of home prices.

Another indicator throughout the past few years has been the ratio of sales price to listing price.

However, despite the best indicators and the best analytic data, national predictors – even if accurate – may not be relevant on a local basis.

During the discussion, Alex Villacorta, director of research and analytics at Clear Capital, used Phoenix as an example to show how much variation exists from market to market, and ZIP code to ZIP code.

Currently, Clear Capital predicts prices in Phoenix will remain relatively flat, falling just 3 percent. However, the analytics company predicts one Phoenix ZIP code will see a 17 percent decline, while a neighboring ZIP code will see a 34 percent rise in prices.

Another indicator, according to Thomas J. Healy, president and CEO of Level 1 Loans, Inc., is the ratio of median real estate value to median income.

Prior to the crisis, some ZIP codes were at 8.9, while others were at 1.5, according to Healy, reiterating the importance of granular data as opposed to national or regional data.

A ratio of about 3 or 3.5 is sustainable, according to Healy, and most markets that experienced a sharp rise during the bubble are now falling back to these levels.

At his keynote presentation at MPact Tuesday morning, Doug Duncan, chief economist at Fannie Mae, said we are now at the “new normal.”

Healy agrees. “There will be no rebound,” he said during the panel discussion. “We’re pretty much where we should have been at the entire time,” had the crisis not occurred, he said.

(Note: The Five Star Institute is the parent company of DSNews.com and DS News magazine.)

 
Courtesy of DWSNEWS.com
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Foreclosures numbers are not good news…

July 18, 2011

 

 

Recent statistics presented by our local #Orlando real estate board as well as national statistics reflect a decrease in foreclosure sales and an increase in “normal” sales.

According to the Orlando Regional REALTOR Association, “The big news for Orlando housing statistics in May was the percentage of “normal” sales. This sale type has risen for four consecutive months and has increased to 37.47% of all transactions”.

I know these figures sounds like a good thing and I hate to sound pessimistic but the reason that these numbers have increased and foreclosures have decreased is simply because of some serious flaws in the system.

First, the courts have a backlog of old foreclosure lawsuits that they have not been able to work through and finalize. I have homeowners who have been in foreclosure for THREE years with no end in sight as to when they will be forced to return their house to the bank. With State budget cuts (in all of the US) there is a shortage of available judicial staff to process the foreclosure case work.

Secondly, with the former robo-signing legal scandal resulting in illegal processing of past foreclosures – there is now a slowdown in foreclosures until everyone figures out how to properly and legally process foreclosure sales. No more speedy foreclosures with the current judicial requirements.

Finally, the government IS trying to help homeowners stay in their homes by short-term modifications. While they don’t typically work – it does slow down the process.

When added up though – this is not a good thing. Slowing down and in effect, stopping the foreclosure market will only drag out the inevitable for YEARS. It’s the proverbial Band-Aid on a gaping wound. Far better that we fix the system, get all foreclosures through the legal process and move on to a better and more prosperous future. Our economy needs to heal but for that to happen – we have to get these foreclosures finalized so that they may be sold to new credit-worthy homeowners.

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What’s behind door number ??????????????

February 1, 2011

There was a popular game show once that gave contestants the option to pick door number one, two or three to gamble on attaining a prize. Sometimes it was a car and sometimes it was a donkey. It was all about a game of chance and whether the contestant would win a grand prize or a booby prize.

Well…welcome to real estate in 2011. We have options but some are grand and some are not so grand. It all depends on what we are going to pick.

Through one door is the road to recovery with lenders writing loans, revamped credit scoring system and someone realizing that trying to negotiate settlement on loans is better than foreclosing on half of American homeowners?

Yet another door is this constant tease of do we foreclose or not because the court system has reacted in a crazy manner to the even more INSANE behavior of attorneys in the foreclosure process. We are witnessing – for the first time in recent history – the complete and absolute breakdown of our judicial system and the ethics of the legal profession. Insanity reigns.

Finally we have the banks. I could write a massive epistle on the sins of our lending institutions. From a real estate perspective, it seems no one knows what they are doing when it comes to banking. Even bankers are in a flux with the Mortgage Banking Association strategically defaulted on their own office building. No one in the news seems to discuss this very much. Oh the irony! In other words, the main organization that represents the banking industry walked away from their debt rather than repay their own bank loan.

I don’t know which door to pick because I don’t know if we have a sane person left running the (a) our country, (b) banks or (c) Wall Street. From my perspective, it all looks like a booby prize right now behind doors one, two or three. Won’t someone prove me wrong?

http://online.wsj.com/article/SB10001424052748704829704575049111428912890.html

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Politics as usual – ugh

October 25, 2010

 

As real estate sales spiral to new lows – we have the election season in full swing. Everybody is right and everybody else is wrong. 

But I hope our newly elected officials wake up and realize that AS THE HOUSING MARKET GOES – SO GOES THE ECONOMY. It’s not just about job stimulus – it IS about fixing housing and it won’t happen overnight. 

Banks needs to reward GOOD borrowers with better rates in an upside down market. Banks need to AGREE to short sales where they will actually MAKE MORE MONEY than going through the lengthy foreclosure process. Someone needs to start thinking about solutions instead of highlighting the problems that seem unsolvable.  

May sanity reign and may we change the course of this country for the good. 

Read the following New York Times article:  http://www.nytimes.com/2010/10/25/business/25short.html?th&emc=th

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Mortgage Modifications – Let’s help the GOOD GUYS!

March 28, 2010

 

OregonianLive.com recently reported the following:

Democrats in Congress yesterday declared that President Obama’s HAMP program designed to help people avoid foreclosure had “failed miserably.” And a government watchdog criticized HAMP for “spreading out the foreclosure crisis” over several years by failing to help enough people.
 
A year into the program, which originally aimed to aid 3 to 4 million borrowers, servicers placed only 170,000 trial modifications into permanent status.
 
Meanwhile, a federal report showed that
more than half of U.S. borrowers who received loan modifications on delinquent mortgages defaulted again after nine months, according to a federal report. The re-default rate of loans modified in the first quarter of 2009 was 51.5 percent by the end of the year.

Politics aside, this does NOT come as a surprise to me. The modification of loan program is a colossal failure and will continue to be so unless the federal government and the banking industry realize that loan modifications should FIRST help those who CAN AFFORD TO PAY.

That’s right – you need to modify the loans of people whose homes are adversely affected by declining values and the current foreclosure crisis. The people who have been paying on time, paying off their mortgages and are not delinquent should be given a chance to benefit from the current economic crisis?

Why?

Because they may be the next victims of the economic tsunami if they are not given a chance to recover some of the lost value of their property. I see it…on a daily basis…the great people of our nation who are tired of the struggle and they are wondering why they don’t catch a break.

The facts don’t lie – at least 50% of the people who have received the modifications (AND THERE ARE VERY FEW FOR THE RECORD – THIS IS A DEBACLE OF EPIC PROPORTIONS) have still defaulted after modification. The current system for loan modifications is not working on so many levels. But at the end of the day, if you can’t make your payments – loan modifications are just buying you a little more time before the foreclosure gavel strikes.

Either way – our government must fix this economic crisis, restore the housing market – and get people working. But most importantly – they need to RESTORE CONSUMER CONFIDENCE to all our citizens and not just those in financial distress. When will the good guys catch a break?