TAMPA/ Fox News - Kit Robertson is sprucing up his Tampa home, and there's a $325,000 reason for it. He's hoping is he can sell it early next year.
"We actually own this out right, so we can weather through the storm. But some people will be forced into short sales and foreclosures," Robertson said.
But Kit may have a tough time getting top dollar for his water front home. In fact, Tampa along with four other cities, saw a fourth straight month of decline in home prices. And bankruptcy attorney Scott Rosin says, sadly we haven't seen the bottom yet.
"It's not good. It's not good at all. It affects everyone, everywhere," Rosin said.
Market analysts say 2010 is on pace to finish as the worst for home sales in more than a decade.
A high unemployment rate coupled with a lack of credit have really prevented people from buying homes.
And with foreclosures and short sales expected to remain high in 2011, the market will suffer even more.
"The market, like I said, is so flooded with foreclosures and these homes for sale that it’s very difficult to sell your home at a good price. It's a buyer’s market right now. If you have the money it's a great time to buy a house," Rosin said.
And if you're a seller, the real estate forecast isn't much better for the next the six months.
Experts say home prices will likely drop another 5 to 10 percent. But Kit is banking on snow birds whose love of sunshine will have them digging deeper in their pockets.
"Our baby boomers are getting older, and many have cash in their pockets, and Florida is an excellent place to be where it’s nice and warm and good place to live," Robertson said.
We are proud to have served the South Florida and Greater Tampa Bay area for over 12 years. Our experienced team specializes in residential home sales, leasing, property management as well as REO and Note Sales in both the commercial and residential markets. We pride ourselves on highly personal and professional relationships built over the past decade and we look forward to building our relationships further.
Friday, December 31, 2010
Wednesday, December 22, 2010
Tampa Bay home sales up 7 percent in November
The bay area recorded 2,060 sales last month, compared to 1,923 in October, according to the latest housing data released Wednesday by Florida Realtors.
Statewide, sales were flat from October to November with 11,900 single-family homes sold. Compared to November 2009, statewide sales decreased 15 percent, though the lower numbers can, at least in part, be explained by the rush to meet the deadline for an $8,000 first-time home buyer tax credit available last year. Congress later extended the benefit into 2010.
Year to date, Florida sales are up 5 percent.
Nationally, existing homes sales rose 5.6 percent, according to the National Association of Realtors. Lawrence Yun, chief economist, is hopeful for 2011.
"Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable," he said.
Statewide, sales were flat from October to November with 11,900 single-family homes sold. Compared to November 2009, statewide sales decreased 15 percent, though the lower numbers can, at least in part, be explained by the rush to meet the deadline for an $8,000 first-time home buyer tax credit available last year. Congress later extended the benefit into 2010.
Year to date, Florida sales are up 5 percent.
Nationally, existing homes sales rose 5.6 percent, according to the National Association of Realtors. Lawrence Yun, chief economist, is hopeful for 2011.
"Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable," he said.
Friday, December 10, 2010
NATMI Buys Tampa Industrial for $3.28 Million
North American Terminals Management Inc. (NATMI) purchased the property at 9801 Palm River Rd. in Tampa, FL from Ringsby Terminals, Inc. for $3.28 million, or about $134 per square foot.
The 24,536-square-foot industrial property delivered in 1970 and was sold as an investment property. NATMI is a national transportation-focused industrial real estate company that owns, develops, and manages properties for the freight transportation industry.
The cash deal required no brokers and had no unusual sale conditions.
The 24,536-square-foot industrial property delivered in 1970 and was sold as an investment property. NATMI is a national transportation-focused industrial real estate company that owns, develops, and manages properties for the freight transportation industry.
The cash deal required no brokers and had no unusual sale conditions.
Wednesday, November 10, 2010
Tampa Bay home values drop still among worst in nation
Even as other areas of the economy strengthen, Tampa Bay home values continue to fall.
Home values have decreased 9.1 percent in the past year to an average of $115,700, according to a report released today by housing tracker Zillow.com.
It was the third straight quarter in which the numbers declined.
The area recorded the seventh biggest drop in the country. Nationally, home values fell 4.3 percent.
Other Florida regions fell further. Miami-Fort Lauderdale fell 15.2 percent, while Orlando slumped 11.9 percent, Zillow reported.
This region remains one of the worst in the country.
Overall, Tampa Bay home values have dropped 46.3 percent from their peak in May 2006 and mirror values from September 2002, Zillow said.
Although the number of homeowners carrying negative equity decreased slightly to 46.8 percent, the area ranks fourth among the 25 largest regions. It trails Phoenix (68.4 percent), Riverside, Calif. (48.1 percent) and Orlando (64.2 percent).
A University of Central Florida economist said the Zillow data appear to be consistent with trends in the rest of the state and show that declining values are slowing.
"It's suggesting that we are very near the bottom, but it doesn't mean prices will go up," Sean Snaith said.
Home values in the United States have declined for 17 consecutive quarters and won't rebound quickly, said Stan Humphries, chief economist for the real estate tracker.
"While not unexpected, the unceasing declines in home values signal that we're in for a long, bleak winter of continued troubles for the housing market," he said in the report. "The length and depth of the current housing recession is rivaling the Great Depression's real estate downturn, and, with encouraging signs fading, will easily eclipse it in the coming months."
Zillow bases its figures on the median value of all homes in a metro area and does not include foreclosures or sales figures because it would drive the numbers down, a spokeswoman said.
Craig Beggins, owner of Century 21 Beggins Enterprises in Apollo Beach, discounts the estimate's meaning for home prices because it is based upon median averages, rather than sales. His agents are selling more than 100 homes each month priced between $80,000 and $140,000.
He acknowledged that the price of the homes he now sells average $165,000, a 50 percent drop from 2005. But he said that's because higher-end homes are taking longer to sell.
"You can say cheaper homes are selling," he said. "The robustness of the market is at the lower end."
Home values have decreased 9.1 percent in the past year to an average of $115,700, according to a report released today by housing tracker Zillow.com.
It was the third straight quarter in which the numbers declined.
The area recorded the seventh biggest drop in the country. Nationally, home values fell 4.3 percent.
Other Florida regions fell further. Miami-Fort Lauderdale fell 15.2 percent, while Orlando slumped 11.9 percent, Zillow reported.
This region remains one of the worst in the country.
Overall, Tampa Bay home values have dropped 46.3 percent from their peak in May 2006 and mirror values from September 2002, Zillow said.
Although the number of homeowners carrying negative equity decreased slightly to 46.8 percent, the area ranks fourth among the 25 largest regions. It trails Phoenix (68.4 percent), Riverside, Calif. (48.1 percent) and Orlando (64.2 percent).
A University of Central Florida economist said the Zillow data appear to be consistent with trends in the rest of the state and show that declining values are slowing.
"It's suggesting that we are very near the bottom, but it doesn't mean prices will go up," Sean Snaith said.
Home values in the United States have declined for 17 consecutive quarters and won't rebound quickly, said Stan Humphries, chief economist for the real estate tracker.
"While not unexpected, the unceasing declines in home values signal that we're in for a long, bleak winter of continued troubles for the housing market," he said in the report. "The length and depth of the current housing recession is rivaling the Great Depression's real estate downturn, and, with encouraging signs fading, will easily eclipse it in the coming months."
Zillow bases its figures on the median value of all homes in a metro area and does not include foreclosures or sales figures because it would drive the numbers down, a spokeswoman said.
Craig Beggins, owner of Century 21 Beggins Enterprises in Apollo Beach, discounts the estimate's meaning for home prices because it is based upon median averages, rather than sales. His agents are selling more than 100 homes each month priced between $80,000 and $140,000.
He acknowledged that the price of the homes he now sells average $165,000, a 50 percent drop from 2005. But he said that's because higher-end homes are taking longer to sell.
"You can say cheaper homes are selling," he said. "The robustness of the market is at the lower end."
Tuesday, November 9, 2010
Tampa Hyatt sells for $58.5M
An affiliate of Hyatt Hotels Corp. sold the Grand Hyatt Tampa Bay property to an investor working with UBS Global Asset Management for $58.5 million. Following the purchase, UBS will finance the property’s renovation on behalf of the anonymous investor, a release said.
“The sale of Grand Hyatt Tampa Bay supports our strategy of recycling capital in order to expand the presence of Hyatt hotels in markets in which we are not represented or are under represented,” explained Stephen Haggerty, head of real estate for Hyatt. The Grand Hyatt Tampa Bay, which will retain its name post-sale, houses 445 rooms, three restaurants, and a variety of other amenities including pools and a health club.
Hyatt Hotels Corp. is headquartered in Chicago.
Tuesday, October 26, 2010
Potential buyer for Belleview Biltmore steps
BELLEAIR — A man who introduced himself to the mayor as the "next and final owner" of the Belleview Biltmore said he will close on the historic hotel this week.
"Trust me," Thomas Gavin wrote in an e-mail late Friday to Belleair Mayor Gary Katica. "I am in contact with the present owners of the Biltmore and ready to sign a contract this week to purchase and close this year."
Gavin described himself as the chairman of Lifestone Capital Corp., a company that is not listed in Florida corporation records.
He said he has stayed in the presidential suite at the Biltmore, an experience that gave him "the full appreciation of the presence and the need to preserve the legacy of such a grand hotel."
Gavin said he doesn't want to destroy the hotel, but complement it. He was unavailable for comment Monday, but participated in a 15-minute conference call with Katica and Town Manager Micah Maxwell.
Katica, who said he would be thrilled if Gavin closed this week, said Gavin repeated his desire to restore the hotel.
"When you get something exactly the way you want it," Katica said, "you hope that it's true.
"They just want to take the pagoda entrance down, make a five-star hotel, enhance the golf course, be a good neighbor."
The Biltmore's mortgage is held by former owner Urdang & Associates. The company declined to comment.
Three years ago, Latitude Management, formerly known as Legg Mason Real Estate Investors, bought the property for $30.3 million. That agency could not be reached Monday night.
The Biltmore closed more than a year ago for a three-year, $100 million makeover. But lawsuits and the lagging economy have stalled the project.
Interest in the Biltmore waned until September, when Tampa lawyer Ron Weaver called officials and inquired about commercial and residential possibilities.
Miami brothers Daniel and Raphael Ades flew in this month to find out what development the community would allow.
Then on Friday, Gavin became the third interested buyer.
"I think every one of them has said that they had a contract on it," Maxwell said. "We have yet to see any movement on it. People can say whatever they want, and we'll just see who ends up with the hotel."
"Trust me," Thomas Gavin wrote in an e-mail late Friday to Belleair Mayor Gary Katica. "I am in contact with the present owners of the Biltmore and ready to sign a contract this week to purchase and close this year."
Gavin described himself as the chairman of Lifestone Capital Corp., a company that is not listed in Florida corporation records.
He said he has stayed in the presidential suite at the Biltmore, an experience that gave him "the full appreciation of the presence and the need to preserve the legacy of such a grand hotel."
Gavin said he doesn't want to destroy the hotel, but complement it. He was unavailable for comment Monday, but participated in a 15-minute conference call with Katica and Town Manager Micah Maxwell.
Katica, who said he would be thrilled if Gavin closed this week, said Gavin repeated his desire to restore the hotel.
"When you get something exactly the way you want it," Katica said, "you hope that it's true.
"They just want to take the pagoda entrance down, make a five-star hotel, enhance the golf course, be a good neighbor."
The Biltmore's mortgage is held by former owner Urdang & Associates. The company declined to comment.
Three years ago, Latitude Management, formerly known as Legg Mason Real Estate Investors, bought the property for $30.3 million. That agency could not be reached Monday night.
The Biltmore closed more than a year ago for a three-year, $100 million makeover. But lawsuits and the lagging economy have stalled the project.
Interest in the Biltmore waned until September, when Tampa lawyer Ron Weaver called officials and inquired about commercial and residential possibilities.
Miami brothers Daniel and Raphael Ades flew in this month to find out what development the community would allow.
Then on Friday, Gavin became the third interested buyer.
"I think every one of them has said that they had a contract on it," Maxwell said. "We have yet to see any movement on it. People can say whatever they want, and we'll just see who ends up with the hotel."
Monday, October 25, 2010
Wednesday, October 20, 2010
Monday, October 18, 2010
Home Builder Confidence Rises For First Time in Months
Home builder confidence for newly built, single-family homes rose three points to 16 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for October.
This was the first improvement registered by the HMI in five months, and returns the index to a level last seen in June of this year, according to the survey.
Readings below 50 indicate negative sentiment about the market. The last time the index was above 50 was in April 2006.
High unemployment, slow job growth and tight credit have kept people from buying homes.
But all three of the HMI’s component indexes registered gains in October.
The index gauging current sales conditions rose three points to 16, while the index gauging sales expectations in the next six months rose five points to 23 and the index gauging traffic of prospective buyers rose two points to 11.
Builder confidence also improved across every region in October. The South and West each posted four-point gains, to 18 and 12, respectively, while the Northeast and Midwest each posted single-point gains, to 17 and 13, respectively.
This was the first improvement registered by the HMI in five months, and returns the index to a level last seen in June of this year, according to the survey.
Readings below 50 indicate negative sentiment about the market. The last time the index was above 50 was in April 2006.
High unemployment, slow job growth and tight credit have kept people from buying homes.
But all three of the HMI’s component indexes registered gains in October.
The index gauging current sales conditions rose three points to 16, while the index gauging sales expectations in the next six months rose five points to 23 and the index gauging traffic of prospective buyers rose two points to 11.
Builder confidence also improved across every region in October. The South and West each posted four-point gains, to 18 and 12, respectively, while the Northeast and Midwest each posted single-point gains, to 17 and 13, respectively.
Friday, October 15, 2010
SMR - StockMarketReview.com (Foreclosures)
if you wish to acquire an affordable property in a solid location then foreclosed homes in Tampa may just appeal to you as it has to a good number of people. The market for foreclosures favors buyers with the low prices of homes, good home conditions and easy financing options.
To be able to acquire foreclosed homes in Tampa one need only have the capability to pay for one either in cash or through a financing program. So before you even check out listings for these properties it would be best to secure your finances first. If you do not have the cash to purchase a property in its entirety, you can always take out a home loan from any lending outfit or bank. The way to do this is simply to walk up to one and get pre-qualified.
The Search
Seasoned buyers of foreclosed homes know that the only way to succeed is to come prepared with all the data and knowledge pertaining to the home they wish to purchase. It is a good thing that most everything one needs to know about the subject can be found online in user-friendly formats that are easy to navigate. There are numerous web sites that offer listings of foreclosures plus other related and helpful data which buyers can use to speed up the decision-making process.
A Sense of Urgency
Once you have found what you set out to look for further research is needed to determine the cost of repairs, to discover hidden taxes and liens and to compare the price of the home with that of like homes in the neighborhood. If you are relatively new to the business of buying foreclosed homes in Tampa it may be prudent to seek the help of a local real estate agent or broker who can ably represent you in the transaction.
To be able to acquire foreclosed homes in Tampa one need only have the capability to pay for one either in cash or through a financing program. So before you even check out listings for these properties it would be best to secure your finances first. If you do not have the cash to purchase a property in its entirety, you can always take out a home loan from any lending outfit or bank. The way to do this is simply to walk up to one and get pre-qualified.
The Search
Seasoned buyers of foreclosed homes know that the only way to succeed is to come prepared with all the data and knowledge pertaining to the home they wish to purchase. It is a good thing that most everything one needs to know about the subject can be found online in user-friendly formats that are easy to navigate. There are numerous web sites that offer listings of foreclosures plus other related and helpful data which buyers can use to speed up the decision-making process.
A Sense of Urgency
Once you have found what you set out to look for further research is needed to determine the cost of repairs, to discover hidden taxes and liens and to compare the price of the home with that of like homes in the neighborhood. If you are relatively new to the business of buying foreclosed homes in Tampa it may be prudent to seek the help of a local real estate agent or broker who can ably represent you in the transaction.
Tuesday, October 12, 2010
Miami Real Estate Slows Down As Foreclosures Freeze
Miami, Fla. The major banks decision to freeze foreclosures is slowing down the Miami real estate market.
JP Morgan Chase, Bank of America and GMAC are taking more time to process applications, in some cases it takes up to 90 days to answer buyers offers and the closing dates become more uncertain due to the long waiting times.
Since banks last shift on the foreclosure conditions most buyers are looking into the traditional ways of buying real estate and normal properties are becoming more attractive to them. Foreclosures and short sales are getting less popular because buyers don’t want to be waiting an indefinite time, they like fast answers to their offers and closing dates. Buyers and investors can search for properties at www.miamirealestatelistings.org where they will find a free access to the Miami MLS listings service.
The positive side of this new market turn, is for the homeowners to sell their properties. They will have a better chance because foreclosure or short sales are becoming too complicated to deal with.
JP Morgan Chase, Bank of America and GMAC are taking more time to process applications, in some cases it takes up to 90 days to answer buyers offers and the closing dates become more uncertain due to the long waiting times.
Since banks last shift on the foreclosure conditions most buyers are looking into the traditional ways of buying real estate and normal properties are becoming more attractive to them. Foreclosures and short sales are getting less popular because buyers don’t want to be waiting an indefinite time, they like fast answers to their offers and closing dates. Buyers and investors can search for properties at www.miamirealestatelistings.org where they will find a free access to the Miami MLS listings service.
The positive side of this new market turn, is for the homeowners to sell their properties. They will have a better chance because foreclosure or short sales are becoming too complicated to deal with.
Thursday, October 7, 2010
30-Year Mortgage Rate at New Record Low
U.S. mortgage rates reached new record lows in the latest week as economic data raised the appeal of safe-haven government debt, according to a survey released on Thursday by Freddie Mac, the second-largest U.S. mortgage finance company.
While rock-bottom rates offer a glimmer of hope for a housing market struggling to find footing in the aftermath of the expiration of popular home buyer tax credits, their impact on home loan demand has been tepid. A weak jobs market and flailing economy continue to weigh on consumer confidence.
Interest rates on U.S. 30-year fixed-rate mortgages, the most widely used loan, averaged 4.27 percent for the week ended Oct. 7, down from the previous week's 4.32 percent and the lowest on record, according to the survey.
Rates were also below their year-ago level of 4.87 percent. Freddie Mac started the survey in April 1971.
Meanwhile, 15-year fixed-rate mortgages averaged 3.72 percent, down from 3.75 percent last week, the lowest since Freddie Mac began surveying this loan type in 1991.
"The 12-month growth rate in the core price index for personal consumption, which the Federal Reserve closely tracks, has been drifting lower over the past six months ending in August and suggests inflation is running at a tepid pace at best," Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.
"This allowed mortgage rates to ease to new or near record lows this week," he said.
Mortgage rates are linked to yields on Treasuries and yields on mortgage-backed securities.
The Mortgage Bankers Association said on Wednesday U.S. mortgage applications for home purchases rose for a second straight week, with demand at its highest level since early May as potential homeowners took advantage of record low interest rates.
Michelle Meyer, senior U.S. economist at Bank of America Merrill Lynch in New York, said potential homebuyers have remained on the sidelines despite the improvement in affordability from record low mortgage rates.
"The missing link is confidence — consumers are still worried about future income prospects given high unemployment rates and many believe home prices will fall further," she said. "In addition, credit conditions remain tight, making it difficult to get financing."
"Mortgage rates are only one input into the decision to purchase a home, and seemingly subordinate to current and expected income, she said.
Freddie Mac said rates on 5/1 ARMs, set at a fixed rate for five years and adjustable in each following year, was 3.47 percent, down from 3.52 percent last week, reaching the lowest level since Freddie Mac began tracking this loan type in 2005.
One-year adjustable-rate mortgages were 3.40 percent, down from 3.48 percent last week.
A year ago, 15-year mortgages averaged 4.33 percent, the one-year ARM was 4.53 percent and the 5/1 ARM 4.35 percent.
While rock-bottom rates offer a glimmer of hope for a housing market struggling to find footing in the aftermath of the expiration of popular home buyer tax credits, their impact on home loan demand has been tepid. A weak jobs market and flailing economy continue to weigh on consumer confidence.
Interest rates on U.S. 30-year fixed-rate mortgages, the most widely used loan, averaged 4.27 percent for the week ended Oct. 7, down from the previous week's 4.32 percent and the lowest on record, according to the survey.
Rates were also below their year-ago level of 4.87 percent. Freddie Mac started the survey in April 1971.
Meanwhile, 15-year fixed-rate mortgages averaged 3.72 percent, down from 3.75 percent last week, the lowest since Freddie Mac began surveying this loan type in 1991.
"The 12-month growth rate in the core price index for personal consumption, which the Federal Reserve closely tracks, has been drifting lower over the past six months ending in August and suggests inflation is running at a tepid pace at best," Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.
"This allowed mortgage rates to ease to new or near record lows this week," he said.
Mortgage rates are linked to yields on Treasuries and yields on mortgage-backed securities.
The Mortgage Bankers Association said on Wednesday U.S. mortgage applications for home purchases rose for a second straight week, with demand at its highest level since early May as potential homeowners took advantage of record low interest rates.
Michelle Meyer, senior U.S. economist at Bank of America Merrill Lynch in New York, said potential homebuyers have remained on the sidelines despite the improvement in affordability from record low mortgage rates.
"The missing link is confidence — consumers are still worried about future income prospects given high unemployment rates and many believe home prices will fall further," she said. "In addition, credit conditions remain tight, making it difficult to get financing."
"Mortgage rates are only one input into the decision to purchase a home, and seemingly subordinate to current and expected income, she said.
Freddie Mac said rates on 5/1 ARMs, set at a fixed rate for five years and adjustable in each following year, was 3.47 percent, down from 3.52 percent last week, reaching the lowest level since Freddie Mac began tracking this loan type in 2005.
One-year adjustable-rate mortgages were 3.40 percent, down from 3.48 percent last week.
A year ago, 15-year mortgages averaged 4.33 percent, the one-year ARM was 4.53 percent and the 5/1 ARM 4.35 percent.
Wednesday, October 6, 2010
Bank of America is latest to put hold on foreclosures
Bank of America, the nation’s largest bank, yesterday became the latest lender to put foreclosures on hold in 23 states because of concerns that came to light in a Massachusetts case that court documents the bank submitted were improperly prepared.
Bank of America and other mortgage companies have been under pressure to review their paperwork after employees and contractors said in sworn depositions that because of the enormous volume, they had not had the time to read the documents or check them for accuracy.
“To be certain affidavits have followed the correct procedures, Bank of America will delay the process in order to amend all affidavits in foreclosure cases that have not yet gone to judgment,’’ spokesman Dan Frahm said in a statement.
A Bank of America executive, Renee Hertzler, said in a February deposition in Massachusetts that she signed as many as 8,000 foreclosure documents a month without reviewing them. The deposition is similar to others taken from document processors at J.P. Morgan Chase and Ally Financial, which have also frozen foreclosures in the past week. The statements were taken by lawyers for homeowners contesting the seizure of their homes.
On Wall Street, the stocks of companies that insure titles for homes were battered on fears of the worst-case scenario: that flawed paperwork could be used by those who have been evicted to reclaim resold properties. At least one such company, Old Republic Title, has stopped insuring homes that were foreclosed on by Ally Financial or its GMAC mortgage unit.
Federal and state law enforcement officials have stepped up their scrutiny of foreclosure practices. Connecticut’s attorney general, Richard Blumenthal, announced a moratorium on foreclosures by all banks in the state, the first jurisdiction to take such wide-ranging action.
Blumenthal called the actions of J.P. Morgan and Ally a “possible fraud on the court undermining the integrity of the legal process and consumers’ ability to fight foreclosures.’’ He added, “This freeze should stop a foreclosure steamroller based on defective documents and enable effective remedies.’’
California broadened its moratorium on foreclosures by Ally Financial to include those by J.P. Morgan Chase. Calling the companies’ review of key foreclosure documents a “ruse,’’ Attorney General Jerry Brown ordered J.P. Morgan to prove it is following the law before it resumes foreclosures in the state.
The 23 states where Bank of America, J.P. Morgan, and Ally suspended foreclosures require a court order before a home can be seized. This approach is considered favorable for homeowners because mortgage companies must submit more extensive documentation before they can foreclose. Massachusetts is not on that list but Connecticut is.
At the federal level, officials in the agencies responsible for policing banks and the home loan market said they were disturbed by the use of “robo-signers’’ at mortgage companies.
The Federal Housing Finance Agency, which oversees mortgage finance giants Fannie Mae and Freddie Mac, said it had asked the companies to work to make sure the loan servicer companies they contract with to manage their loans are complying with the law. Fannie and Freddie both use Ally and J.P. Morgan to service some loans.
Fannie and Freddie own or guarantee more than half of the $11 trillion mortgage market.
Over the past week, the Treasury Department ordered some of the largest banks to review their foreclosure procedures.
Some judges have reprimanded banks that submit faulty documents. In Maine last week, a state judge vacated his own decision to allow GMAC to foreclose on a house after learning that an employee wasn’t reading the legal documents
Bank of America and other mortgage companies have been under pressure to review their paperwork after employees and contractors said in sworn depositions that because of the enormous volume, they had not had the time to read the documents or check them for accuracy.
“To be certain affidavits have followed the correct procedures, Bank of America will delay the process in order to amend all affidavits in foreclosure cases that have not yet gone to judgment,’’ spokesman Dan Frahm said in a statement.
A Bank of America executive, Renee Hertzler, said in a February deposition in Massachusetts that she signed as many as 8,000 foreclosure documents a month without reviewing them. The deposition is similar to others taken from document processors at J.P. Morgan Chase and Ally Financial, which have also frozen foreclosures in the past week. The statements were taken by lawyers for homeowners contesting the seizure of their homes.
On Wall Street, the stocks of companies that insure titles for homes were battered on fears of the worst-case scenario: that flawed paperwork could be used by those who have been evicted to reclaim resold properties. At least one such company, Old Republic Title, has stopped insuring homes that were foreclosed on by Ally Financial or its GMAC mortgage unit.
Federal and state law enforcement officials have stepped up their scrutiny of foreclosure practices. Connecticut’s attorney general, Richard Blumenthal, announced a moratorium on foreclosures by all banks in the state, the first jurisdiction to take such wide-ranging action.
Blumenthal called the actions of J.P. Morgan and Ally a “possible fraud on the court undermining the integrity of the legal process and consumers’ ability to fight foreclosures.’’ He added, “This freeze should stop a foreclosure steamroller based on defective documents and enable effective remedies.’’
California broadened its moratorium on foreclosures by Ally Financial to include those by J.P. Morgan Chase. Calling the companies’ review of key foreclosure documents a “ruse,’’ Attorney General Jerry Brown ordered J.P. Morgan to prove it is following the law before it resumes foreclosures in the state.
The 23 states where Bank of America, J.P. Morgan, and Ally suspended foreclosures require a court order before a home can be seized. This approach is considered favorable for homeowners because mortgage companies must submit more extensive documentation before they can foreclose. Massachusetts is not on that list but Connecticut is.
At the federal level, officials in the agencies responsible for policing banks and the home loan market said they were disturbed by the use of “robo-signers’’ at mortgage companies.
The Federal Housing Finance Agency, which oversees mortgage finance giants Fannie Mae and Freddie Mac, said it had asked the companies to work to make sure the loan servicer companies they contract with to manage their loans are complying with the law. Fannie and Freddie both use Ally and J.P. Morgan to service some loans.
Fannie and Freddie own or guarantee more than half of the $11 trillion mortgage market.
Over the past week, the Treasury Department ordered some of the largest banks to review their foreclosure procedures.
Some judges have reprimanded banks that submit faulty documents. In Maine last week, a state judge vacated his own decision to allow GMAC to foreclose on a house after learning that an employee wasn’t reading the legal documents
Monday, October 4, 2010
Pending Home Sales Rise, but Below Last Year's Pace
The number of people who signed contracts to buy homes rose in August for the second straight month but remained far below last year's pace. The weak economy and fears that prices will fall are keeping many consumers away from the the housing market.
National Association of Realtors said Monday that its seasonally adjusted index of sales agreements for previously occupied homes rose 4.3 percent to a reading of 82.3. That's still more than 20 percent below the pace in the same month a year earlier.
Economists surveyed by Thomson Reuters had expected the index would rise to 81.4.
The index provides an early measurement of sales activity because there is usually a one- to two-month lag between a sales contract and a completed deal.
A reading of 100 indicates the average level of sales activity in 2001, when the index started. The reading was above that threshold from March 2003 through April 2007. It sank during the recession, only to surge above 100 a year ago when the government first offered tax incentives to spur sales. When the credits expired in April, the index sank.
"With underlying economic conditions still so weak, a robust housing recovery remains highly unlikely," Paul Dales, U.S. economist with Capital Economics, wrote in a research note.
The sales report was driven by a nearly 7 percent jump in the South, a 6 percent increase in the West and a 2 percent rise in the Midwest. Pending sales fell nearly 3 percent in the Northeast.
High unemployment, weak job growth and tight credit have hurt the housing market, despite the lowest mortgage rates in decades. Sales picked up in the spring when the government was offering some homebuyers tax credits of up to $8,000. Once the incentives expired April 30, sales plunged.
Potential buyers are holding off on purchases because they are worried about jobs and the economy. Many have been scared away by the prospect that home prices could fall again -- something most analysts expect.
Others are having trouble meeting tighter lending standards and can't qualify for mortgages. And some potential sellers aren't putting their homes on the market because they don't feel buyers will pay enough.
Completed sales of previously occupied homes rose in August, but at the second-slowest annual pace in more than a decade. July's pace was the slowest in 15 years.
National Association of Realtors said Monday that its seasonally adjusted index of sales agreements for previously occupied homes rose 4.3 percent to a reading of 82.3. That's still more than 20 percent below the pace in the same month a year earlier.
Economists surveyed by Thomson Reuters had expected the index would rise to 81.4.
The index provides an early measurement of sales activity because there is usually a one- to two-month lag between a sales contract and a completed deal.
A reading of 100 indicates the average level of sales activity in 2001, when the index started. The reading was above that threshold from March 2003 through April 2007. It sank during the recession, only to surge above 100 a year ago when the government first offered tax incentives to spur sales. When the credits expired in April, the index sank.
"With underlying economic conditions still so weak, a robust housing recovery remains highly unlikely," Paul Dales, U.S. economist with Capital Economics, wrote in a research note.
The sales report was driven by a nearly 7 percent jump in the South, a 6 percent increase in the West and a 2 percent rise in the Midwest. Pending sales fell nearly 3 percent in the Northeast.
High unemployment, weak job growth and tight credit have hurt the housing market, despite the lowest mortgage rates in decades. Sales picked up in the spring when the government was offering some homebuyers tax credits of up to $8,000. Once the incentives expired April 30, sales plunged.
Potential buyers are holding off on purchases because they are worried about jobs and the economy. Many have been scared away by the prospect that home prices could fall again -- something most analysts expect.
Others are having trouble meeting tighter lending standards and can't qualify for mortgages. And some potential sellers aren't putting their homes on the market because they don't feel buyers will pay enough.
Completed sales of previously occupied homes rose in August, but at the second-slowest annual pace in more than a decade. July's pace was the slowest in 15 years.
Thursday, September 30, 2010
30-Year Mortgage Rate Falls to Another Record Low
U.S. 30-year and 15-year mortgage rates either tied or reached record lows in the latest week, according to a survey released Thursday by Freddie Mac, the second-largest U.S. mortgage finance company.
While rock-bottom rates offer a glimmer of hope for a housing market struggling to find footing in the aftermath of the expiration of popular home buyer tax credits, their impact on home loan demand has been tepid.
A weak jobs market and flailing economy continue to weigh on consumer confidence.
Interest rates on U.S. 30-year fixed-rate mortgages, the most widely used loan, averaged 4.32 percent for the week ended Sept. 30, down from the previous week's 4.37 percent and matching a record low set earlier in the month, according to the survey.
Rates were also below their year-ago level of 4.94 percent.
Freddie Mac started the survey in April 1971.
Fifteen-year fixed-rate mortgages averaged 3.75 percent, down from 3.82 percent last week, the lowest since Freddie Mac began surveying this loan type in 1991.
"Confidence in the state of the economy fell among consumers and businesses, which led to a decline in long-term bond yields and brought many mortgage rates to record lows this week," Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.
Mortgage rates are linked to yields on Treasuries and yields on mortgage-backed securities.
While rock-bottom rates offer a glimmer of hope for a housing market struggling to find footing in the aftermath of the expiration of popular home buyer tax credits, their impact on home loan demand has been tepid.
A weak jobs market and flailing economy continue to weigh on consumer confidence.
Interest rates on U.S. 30-year fixed-rate mortgages, the most widely used loan, averaged 4.32 percent for the week ended Sept. 30, down from the previous week's 4.37 percent and matching a record low set earlier in the month, according to the survey.
Rates were also below their year-ago level of 4.94 percent.
Freddie Mac started the survey in April 1971.
Fifteen-year fixed-rate mortgages averaged 3.75 percent, down from 3.82 percent last week, the lowest since Freddie Mac began surveying this loan type in 1991.
"Confidence in the state of the economy fell among consumers and businesses, which led to a decline in long-term bond yields and brought many mortgage rates to record lows this week," Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.
Mortgage rates are linked to yields on Treasuries and yields on mortgage-backed securities.
Tuesday, September 28, 2010
US Home Prices Slipped In July And May Stabilize Near Lows
Single-family home prices dipped in July, and are seen stabilizing near the lows without the homebuyer tax credit that ended in April, Standard & Poor's/Case-Shiller home price indexes showed Tuesday.
The S&P/Case Shiller composite index of 20 metropolitan areas declined 0.1 percent in July from June on a seasonally adjusted basis, as expected in a Reuters poll. The dip followed a 0.2 percent June rise, which was revised down from a 0.3 percent increase.
Unadjusted, the 20-city index gained 0.6 percent after June's 1 percent gain. A 0.4 percent rise was expected.
S&P, which publishes the indexes, also said home prices in the 20 cities index rose 3.2 percent from July 2009, a slower annual pace than the 4.2 percent increased in June.
Ten of the cities had annual gains and only Las Vegas set a new low, as the impact of the homebuyer tax credit faded away, S&P said. But the year-over-year growth rates slowed in 16 of the cities and both the 10- and 20-city composite indexes in July from the prior month.
"While we could still see some residual support from the homebuyers' tax credit, which covers purchases closing through September 30th, anyone looking for home prices to return to the lofty 2005-2006 levels might be disappointed," David M. Blitzer, Chairman of the Index Committee at S&P, said in a press release.
"Housing starts, sales and inventory data reported for August do not show signs of a robust market, and foreclosures continue," he said, adding "stable prices seem more likely."
The 20-city index showed home prices remain 27.9 percent below the peaks set in mid-2006.
The S&P/Case Shiller composite index of 20 metropolitan areas declined 0.1 percent in July from June on a seasonally adjusted basis, as expected in a Reuters poll. The dip followed a 0.2 percent June rise, which was revised down from a 0.3 percent increase.
Unadjusted, the 20-city index gained 0.6 percent after June's 1 percent gain. A 0.4 percent rise was expected.
S&P, which publishes the indexes, also said home prices in the 20 cities index rose 3.2 percent from July 2009, a slower annual pace than the 4.2 percent increased in June.
Ten of the cities had annual gains and only Las Vegas set a new low, as the impact of the homebuyer tax credit faded away, S&P said. But the year-over-year growth rates slowed in 16 of the cities and both the 10- and 20-city composite indexes in July from the prior month.
"While we could still see some residual support from the homebuyers' tax credit, which covers purchases closing through September 30th, anyone looking for home prices to return to the lofty 2005-2006 levels might be disappointed," David M. Blitzer, Chairman of the Index Committee at S&P, said in a press release.
"Housing starts, sales and inventory data reported for August do not show signs of a robust market, and foreclosures continue," he said, adding "stable prices seem more likely."
The 20-city index showed home prices remain 27.9 percent below the peaks set in mid-2006.
Friday, September 24, 2010
Jax Most Affordable Real Estate In Fla.
A new ranking says Jacksonville is the most affordable real estate market of all the cities in Florida.
Coldwell Banker put together the list, which is based on average listing prices of four-bedroom, two-bath homes for sale in nearly 300 markets.
The most affordable city in the nation is Detroit, where the average price is $68,000.
Jacksonville ranked 59th, with an average price around $185,000.
Orlando ranked 88th at $202,000, and Tampa ranked 140th at $242,000.
Gainesville was close behind at 145th, with an average price of $247,000.
And the most expensive city in Florida is one of the most expensive in the country.
Key West is in 262nd place out of nearly 300, with an average price of $643,000.
Coldwell Banker put together the list, which is based on average listing prices of four-bedroom, two-bath homes for sale in nearly 300 markets.
The most affordable city in the nation is Detroit, where the average price is $68,000.
Jacksonville ranked 59th, with an average price around $185,000.
Orlando ranked 88th at $202,000, and Tampa ranked 140th at $242,000.
Gainesville was close behind at 145th, with an average price of $247,000.
And the most expensive city in Florida is one of the most expensive in the country.
Key West is in 262nd place out of nearly 300, with an average price of $643,000.
Wednesday, September 22, 2010
Mortgage Demand Falls Despite Low Loan Rates
U.S. home loan demand fell for a third straight week though fixed mortgage rates slid near all-time lows, with potential buyers still unnerved by the jobs market, Mortgage Bankers Association data showed on Wednesday.
While the housing market is seen unlikely to plunge anew, it lacks traction. Unemployment and underemployment prevent many buyers from making such a big financial commitment.
Loan applications to buy homes and refinance declined last week despite average 30-year mortgage rates dropping 0.03 percentage point to 4.44 percent. At a record low dating back to 1990, the rate fell to 4.43 percent last month.
"I don't think we're going to see massive dips like we did before, but housing can't recover until employment recovers," said Margaret Kelly, chief executive of RE/MAX in Denver.
The housing market has been whip-sawed by a surge in demand before, and a plunge in demand after homebuyer tax credits ended on April 30.
Now the market enters a seasonally slower period, when sales typically slow after the school year begins and the winter approaches.
The industry group's mortgage market index that includes both purchase and refi applications fell 1.4 percent last week, seasonally adjusted, with purchase loan demand down 3.3 percent and refi requests off 0.9 percent.
Overall loan demand has grown over the past year, but refinancing far overshadows home buying, the MBA said. Applications to buy homes sank 38 percent from a year ago while refinancing requests jumped 51 percent.
About 8 of every 10 loans requested are for a refinance rather than a purchase.
The latest housing data depict a market that is scraping along the bottom.
New building rose to a four-month high in August and permits to build also increased, though single-family permits dropped for a fifth straight month.
Home sales reports later this week are seen showing improvement, from deeply depressed levels.
While borrowing costs and home prices are low, lending practices remain restrictive and a record stockpile of unsold foreclosed properties looms over the market.
"Home ownership is still the American Dream," Kelly maintains. "But what will change is the fact that for probably the last 10 years plus, people thought they could get into a home, live in it for three years, sell it and make 100 or 50 percent. That doesn't happen anymore."
As buyers become more realistic about the financial gains in housing, as well as more confident about jobs, sales will pick up, she said.
The Federal Reserve on Tuesday opened the door wider to giving more support to the economy, and reiterated its plan to keep interest rates near zero.
While the housing market is seen unlikely to plunge anew, it lacks traction. Unemployment and underemployment prevent many buyers from making such a big financial commitment.
Loan applications to buy homes and refinance declined last week despite average 30-year mortgage rates dropping 0.03 percentage point to 4.44 percent. At a record low dating back to 1990, the rate fell to 4.43 percent last month.
"I don't think we're going to see massive dips like we did before, but housing can't recover until employment recovers," said Margaret Kelly, chief executive of RE/MAX in Denver.
The housing market has been whip-sawed by a surge in demand before, and a plunge in demand after homebuyer tax credits ended on April 30.
Now the market enters a seasonally slower period, when sales typically slow after the school year begins and the winter approaches.
The industry group's mortgage market index that includes both purchase and refi applications fell 1.4 percent last week, seasonally adjusted, with purchase loan demand down 3.3 percent and refi requests off 0.9 percent.
Overall loan demand has grown over the past year, but refinancing far overshadows home buying, the MBA said. Applications to buy homes sank 38 percent from a year ago while refinancing requests jumped 51 percent.
About 8 of every 10 loans requested are for a refinance rather than a purchase.
The latest housing data depict a market that is scraping along the bottom.
New building rose to a four-month high in August and permits to build also increased, though single-family permits dropped for a fifth straight month.
Home sales reports later this week are seen showing improvement, from deeply depressed levels.
While borrowing costs and home prices are low, lending practices remain restrictive and a record stockpile of unsold foreclosed properties looms over the market.
"Home ownership is still the American Dream," Kelly maintains. "But what will change is the fact that for probably the last 10 years plus, people thought they could get into a home, live in it for three years, sell it and make 100 or 50 percent. That doesn't happen anymore."
As buyers become more realistic about the financial gains in housing, as well as more confident about jobs, sales will pick up, she said.
The Federal Reserve on Tuesday opened the door wider to giving more support to the economy, and reiterated its plan to keep interest rates near zero.
Tuesday, September 21, 2010
Housing Starts Zoom 10.5% in Surprise Sign of Optimism
U.S. housing starts increased more than expected in August to their highest level in four months and permits for future home construction rose, government data showed on Tuesday, suggesting the embattled housing market was starting to stabilize following the end of a tax credit.
The Commerce Department said housing starts rose 10.5 percent, the largest increase since November, to a seasonally adjusted annual rate of 598,000 units. July's residential construction was revised down to show a 0.4 percent gain, which was previously reported as a 1.7 percent increase.
Analysts polled by Reuters had expected housing starts to rise to a 550,000-unit rate. Compared to August last year, housing starts were up 2.2 percent.
New building permits rebounded 1.8 percent to a 569,000-unit pace last month after an unrevised 4.1 percent drop in July, lifted by a 9.8 percent rise in permits for multi-family units. Analysts had expected a 560,000-unit pace in August.
The housing market has hit a soft patch following the end of a popular homebuyer tax credit in April and a survey on Monday showed sentiment among home builders remained mired at an 18-month low in September.
A combination of high unemployment and an oversupply of homes are also weighing on the sector, which was the main catalyst of the worst recession since the Great Depression.
The downturn ended in June last year, but the economic recovery has since lost momentum, sparking fears in financial markets of a renewed recession.
Residential construction in August was lifted by a 32.2 percent jump in groundbreaking activity in the volatile multi-family segment to an annual rate of 160,000 units.
Single-family starts increased 4.3 percent to a 438,000-unit pace, the highest since June.
Home completions increased 5.6 percent to a 603,000-unit pace, also the highest since June. The inventory of total houses under construction was unchanged at 444,000 units last month, while the total number of units authorized but not yet started fell 3.1 percent to a record low 87,000 units.
The Commerce Department said housing starts rose 10.5 percent, the largest increase since November, to a seasonally adjusted annual rate of 598,000 units. July's residential construction was revised down to show a 0.4 percent gain, which was previously reported as a 1.7 percent increase.
Analysts polled by Reuters had expected housing starts to rise to a 550,000-unit rate. Compared to August last year, housing starts were up 2.2 percent.
New building permits rebounded 1.8 percent to a 569,000-unit pace last month after an unrevised 4.1 percent drop in July, lifted by a 9.8 percent rise in permits for multi-family units. Analysts had expected a 560,000-unit pace in August.
The housing market has hit a soft patch following the end of a popular homebuyer tax credit in April and a survey on Monday showed sentiment among home builders remained mired at an 18-month low in September.
A combination of high unemployment and an oversupply of homes are also weighing on the sector, which was the main catalyst of the worst recession since the Great Depression.
The downturn ended in June last year, but the economic recovery has since lost momentum, sparking fears in financial markets of a renewed recession.
Residential construction in August was lifted by a 32.2 percent jump in groundbreaking activity in the volatile multi-family segment to an annual rate of 160,000 units.
Single-family starts increased 4.3 percent to a 438,000-unit pace, the highest since June.
Home completions increased 5.6 percent to a 603,000-unit pace, also the highest since June. The inventory of total houses under construction was unchanged at 444,000 units last month, while the total number of units authorized but not yet started fell 3.1 percent to a record low 87,000 units.
Wednesday, September 15, 2010
Home Price Double Dip Begins
The trouble with many of the "indicators" we report is that some are pretty current and others are severely lagging. Home sales are generally the former and home prices the latter.
That's why, given the combination of the expiration of the home buyer tax credit and the increasing number of loans moving to final foreclosure, we knew that home prices overall would take a hit, but it would take a while.
Well we're here.
Two new reports out today prove the consequences of oversupply of organic inventory (12.5 months on existing homes in July according to the National Association of Realtors) and the shadow inventory of foreclosed properties (estimates vary widely and wildly). CoreLogic's Home Price Index shows home prices "flat" in July as transaction volume continues to decline. "This was the first time in five months that no year-over-year gains were reported," according to the release. In June, prices were up 2.4 percent year over year. In addition, "36 states experienced price declines in July, twice the number in May and the highest number since last November when prices nationally were still declining."
And there's the rub.
Prices have been recovering since last Fall, largely thanks to the artificial stimulus of the $8000/$6500 home buyer tax credit. But prices were also benefiting from a slight bump in confidence in the housing market, fed by an apparent drop in the foreclosure numbers. In reality, the foreclosure numbers were dropping only because banks and states were delaying the process, as they tried to cram as many borrowers as possible into what we now know is a largely unsuccessful government-backed mortgage modification program.
"Sellers on the market today have cut $29 billion off their collective home equity."
Trulia.com
August Report
Now home buyer confidence is back in the dumps, which is clear from another report out today showing that for the 3rd straight month the percentage of home sellers on the market who have slashed their asking prices at least once has gone up. Twenty-six percent of sellers on the market in August, according to Trulia.com, had lowered their expectations, and hence their prices. Sellers on the market today have cut $29 billion off their collective home equity.
We spoke to two sellers in Northern Virginia, Stephanie and Gabriel Mikulasek, who have dropped their asking price by $21,000. "We thought it was the value of the house that we could probably get, if the market would pick up a little bit, and people were a little positive," Gabriel told us. "What we found out is that the market is pretty slow; people are very hesitant to make bids, so we decided to make it a little more attractive and lessen it, and see how it goes."
They say today's buyers are only looking for great deals, so if you price the home at its actual value, nobody's interested. You have to go below.
Some of you responding on the blog yesterday said that your markets are just fine, even seeing competition in offers again; I'm sure this is true in many local areas. The trouble is that those areas are in the vast minority. Unless we see a marked, widespread increase in home sales over the next several months, prices will go from flat to down once again.
That's why, given the combination of the expiration of the home buyer tax credit and the increasing number of loans moving to final foreclosure, we knew that home prices overall would take a hit, but it would take a while.
Well we're here.
Two new reports out today prove the consequences of oversupply of organic inventory (12.5 months on existing homes in July according to the National Association of Realtors) and the shadow inventory of foreclosed properties (estimates vary widely and wildly). CoreLogic's Home Price Index shows home prices "flat" in July as transaction volume continues to decline. "This was the first time in five months that no year-over-year gains were reported," according to the release. In June, prices were up 2.4 percent year over year. In addition, "36 states experienced price declines in July, twice the number in May and the highest number since last November when prices nationally were still declining."
And there's the rub.
Prices have been recovering since last Fall, largely thanks to the artificial stimulus of the $8000/$6500 home buyer tax credit. But prices were also benefiting from a slight bump in confidence in the housing market, fed by an apparent drop in the foreclosure numbers. In reality, the foreclosure numbers were dropping only because banks and states were delaying the process, as they tried to cram as many borrowers as possible into what we now know is a largely unsuccessful government-backed mortgage modification program.
"Sellers on the market today have cut $29 billion off their collective home equity."
Trulia.com
August Report
Now home buyer confidence is back in the dumps, which is clear from another report out today showing that for the 3rd straight month the percentage of home sellers on the market who have slashed their asking prices at least once has gone up. Twenty-six percent of sellers on the market in August, according to Trulia.com, had lowered their expectations, and hence their prices. Sellers on the market today have cut $29 billion off their collective home equity.
We spoke to two sellers in Northern Virginia, Stephanie and Gabriel Mikulasek, who have dropped their asking price by $21,000. "We thought it was the value of the house that we could probably get, if the market would pick up a little bit, and people were a little positive," Gabriel told us. "What we found out is that the market is pretty slow; people are very hesitant to make bids, so we decided to make it a little more attractive and lessen it, and see how it goes."
They say today's buyers are only looking for great deals, so if you price the home at its actual value, nobody's interested. You have to go below.
Some of you responding on the blog yesterday said that your markets are just fine, even seeing competition in offers again; I'm sure this is true in many local areas. The trouble is that those areas are in the vast minority. Unless we see a marked, widespread increase in home sales over the next several months, prices will go from flat to down once again.
Saturday, September 11, 2010
Home Ownership: Do You Really Need Skin in the Game?
Earlier this week the Federal Housing Authority implemented a new program called the Short Refi, which I discussed on the Realty Check.
It's a plan designed to give borrowers still current on their mortgages equity back in their homes, thereby reducing the chance that they will default intentionally.
It requires lenders to forgive principal, a minimum 10 percent, in return for a refi to an FHA insured loan.
Borrowers must have their primary loans reduced to 97.75 percent of the value of their homes.
At around the same time this program went into effect, the New York Times did a piece on a small program Fannie Mae is implementing through state housing finance agencies, which have been crippled by the recession. It's called Affordable Advantage, and it allows first-time home buyers in four states (Massachusetts, Minnesota, Idaho and Wisconsin) to get essentially no-money-down loans that are then sold to Fannie Mae. It requires $1000.00 down, but the couple profiled in the piece received a grant, and ended up paying just 67 cents for a $115,000 home.
The Fannie Mae program requires a minimum credit score of 680 (720 in Massachusetts) and the buyer must live in the home. All loans are 30-year fixed. The arguments for the program are persuasive: It wasn't the no-money-down loans themselves that fueled the housing crash, it was the poor underwriting. These loans are very strictly underwritten. Adjustable rate loans were the primary drivers of default, while these loans are fixed.
But what about borrowers having some skin in the game?
The government is trying to stem the tide of mortgage walkaways by creating programs that force lenders to give borrowers back home equity — and despite the small credit hit to the borrower, that's free equity. The Fannie Mae program, while helpful in getting new buyers into homes and easing some inventory, seems contradictory in its fundamental premise. The buyers in the Affordable Advantage program have no skin in the game from the start, and no guarantee that the home won't lose value over the next year.
Proponents argue that the state agencies funding the loans initially are working very closely with the borrowers, counseling them and doing all they can to keep them out of foreclosure. Yes, the program is quite small right now, but I'm guessing it will grow.
So how can the government (and yes, Fannie Mae's majority owner is the U.S. of A. Fannie Mae has not yet joined the FHA Short Refi program, but the FHA Commissioner told the Realty Check earlier this week that they were considering it.) on the one hand push lenders to give money back to borrowers, while on the other hand put brand new borrowers into a zero and potentially negative equity position all over again?
It's a plan designed to give borrowers still current on their mortgages equity back in their homes, thereby reducing the chance that they will default intentionally.
It requires lenders to forgive principal, a minimum 10 percent, in return for a refi to an FHA insured loan.
Borrowers must have their primary loans reduced to 97.75 percent of the value of their homes.
At around the same time this program went into effect, the New York Times did a piece on a small program Fannie Mae is implementing through state housing finance agencies, which have been crippled by the recession. It's called Affordable Advantage, and it allows first-time home buyers in four states (Massachusetts, Minnesota, Idaho and Wisconsin) to get essentially no-money-down loans that are then sold to Fannie Mae. It requires $1000.00 down, but the couple profiled in the piece received a grant, and ended up paying just 67 cents for a $115,000 home.
The Fannie Mae program requires a minimum credit score of 680 (720 in Massachusetts) and the buyer must live in the home. All loans are 30-year fixed. The arguments for the program are persuasive: It wasn't the no-money-down loans themselves that fueled the housing crash, it was the poor underwriting. These loans are very strictly underwritten. Adjustable rate loans were the primary drivers of default, while these loans are fixed.
But what about borrowers having some skin in the game?
The government is trying to stem the tide of mortgage walkaways by creating programs that force lenders to give borrowers back home equity — and despite the small credit hit to the borrower, that's free equity. The Fannie Mae program, while helpful in getting new buyers into homes and easing some inventory, seems contradictory in its fundamental premise. The buyers in the Affordable Advantage program have no skin in the game from the start, and no guarantee that the home won't lose value over the next year.
Proponents argue that the state agencies funding the loans initially are working very closely with the borrowers, counseling them and doing all they can to keep them out of foreclosure. Yes, the program is quite small right now, but I'm guessing it will grow.
So how can the government (and yes, Fannie Mae's majority owner is the U.S. of A. Fannie Mae has not yet joined the FHA Short Refi program, but the FHA Commissioner told the Realty Check earlier this week that they were considering it.) on the one hand push lenders to give money back to borrowers, while on the other hand put brand new borrowers into a zero and potentially negative equity position all over again?
Wednesday, September 8, 2010
Nearly $30 million in federal housing money flows to bay area
Tampa Bay communities will get a nearly $30 million boost from the federal government through the latest effort to help neighborhoods marred by foreclosure.
The U.S. Department of Housing and Urban Development announced the aid Wednesday as part of $1 billion awarded in the third round of its Neighborhood Stabilization Program stimulus efforts.
Hammered by real estate struggles, Florida will receive $208.4 million, the largest allotment of any state.
Hillsborough County led the area with nearly $8.1 million.
Like past rounds of the program, money will go toward the purchase, repair and resale of property, as well as down payment help for people with low and moderate incomes.
Tampa Mayor Pam Iorio, U.S. Rep. Kathy Castor and other officials will highlight the program at a 10 a.m. news conference today outside a foreclosed Tampa home slated to become apartments for female veterans thanks to the program.
The latest infusion of money was part of the financial regulatory bill that Congress passed this summer. Grants were based on a formula using foreclosure rates, troubled loans and mortgage delinquency in a given area.
Local governments hope to avoid hang-ups that led Tampa and some other communities to nearly miss the deadline this month to commit money from the program's first round in 2009, which was part of the federal stimulus package.
That year, the region received nearly $70 million to fight foreclosures. Through August, all money is committed, although more than half remains unspent, federal reports show. Statistics on the program's second round are not yet available.
Local officials blamed the delay in using the money on reluctant banks and problems reselling properties, as well as difficulties working with HUD. But they also had their own problems.
"I think a lot of it was, a lot of local governments thought like governments," meaning they moved slowly and weren't creative enough in dealing with banks to get properties they wanted, said George Romagnoli, community development director for Pasco County. "When you redevelop housing, you have to think a little more entrepreneurially."
Local governments await new federal rules for using the money, which HUD anticipates releasing within a few weeks. Without the rules, St. Petersburg and Pinellas County officials would not say Wednesday how they want to use the money.
Hillsborough County will continue to target troubled neighborhoods previously designated for the program, foreclosure manager Lanette Glass said. But the money may help the county infuse cash into two struggling complexes in Plant City and the Town 'N Country area.
With $5.2 million for Pasco, Romagnoli said he would like to target rental housing creeping into neighborhoods of single-family homes because of foreclosures.
While it's a big amount, the money has to be used smartly because of the size of the foreclosure problem.
"It gets used up fast," said Romagnoli, chairman of the Florida Housing Coalition.
The U.S. Department of Housing and Urban Development announced the aid Wednesday as part of $1 billion awarded in the third round of its Neighborhood Stabilization Program stimulus efforts.
Hammered by real estate struggles, Florida will receive $208.4 million, the largest allotment of any state.
Hillsborough County led the area with nearly $8.1 million.
Like past rounds of the program, money will go toward the purchase, repair and resale of property, as well as down payment help for people with low and moderate incomes.
Tampa Mayor Pam Iorio, U.S. Rep. Kathy Castor and other officials will highlight the program at a 10 a.m. news conference today outside a foreclosed Tampa home slated to become apartments for female veterans thanks to the program.
The latest infusion of money was part of the financial regulatory bill that Congress passed this summer. Grants were based on a formula using foreclosure rates, troubled loans and mortgage delinquency in a given area.
Local governments hope to avoid hang-ups that led Tampa and some other communities to nearly miss the deadline this month to commit money from the program's first round in 2009, which was part of the federal stimulus package.
That year, the region received nearly $70 million to fight foreclosures. Through August, all money is committed, although more than half remains unspent, federal reports show. Statistics on the program's second round are not yet available.
Local officials blamed the delay in using the money on reluctant banks and problems reselling properties, as well as difficulties working with HUD. But they also had their own problems.
"I think a lot of it was, a lot of local governments thought like governments," meaning they moved slowly and weren't creative enough in dealing with banks to get properties they wanted, said George Romagnoli, community development director for Pasco County. "When you redevelop housing, you have to think a little more entrepreneurially."
Local governments await new federal rules for using the money, which HUD anticipates releasing within a few weeks. Without the rules, St. Petersburg and Pinellas County officials would not say Wednesday how they want to use the money.
Hillsborough County will continue to target troubled neighborhoods previously designated for the program, foreclosure manager Lanette Glass said. But the money may help the county infuse cash into two struggling complexes in Plant City and the Town 'N Country area.
With $5.2 million for Pasco, Romagnoli said he would like to target rental housing creeping into neighborhoods of single-family homes because of foreclosures.
While it's a big amount, the money has to be used smartly because of the size of the foreclosure problem.
"It gets used up fast," said Romagnoli, chairman of the Florida Housing Coalition.
Monday, September 6, 2010
Terra Beachside rises from ashes
Nearly a year after acquiring the defaulted mortgage on the Terra Beachside Villas in Miami Beach, developer BH III LLC said construction has been completed on the 116-unit, six-story condominium on Collins Avenue. All the developer is awaiting is the certificate of occupancy.
As previously reported by the Business Journal, Regions Bank filed a foreclosure action against the developer in December 2008.
In November 2009, the Business Journal reported that the mortgage had been acquired by Fort Lauderdale-based BHN LLL, which is managed by Charles C. Phelan, Daniel Lebensohn and Gregory M. Freedman, Brokered by Teresa Williams of Prospera Realty.
Terra Beachside broke ground in 2004, but financial issues stalled the project.
The new developer re-launched construction and sales earlier this year, and more than 60 percent of Terra's units have been sold. The project recently received Fannie Mae and Federal Housing Administration approval, according to a news release.
"We had high hopes when we assumed control of this magnificent property,” Freedman said in the release. “The sales pace has far exceeded our expectations, and it's incredible to see the project complete."
The architecture includes a translucent, 400-foot atrium that spans the entire length of the property. Beneath the atrium, the building’s six floors overlook a courtyard of gardens and water features. Features include a three-story, cone-shaped lifestyle center, unique floor plans, rooftop terraces and ground-floor backyards.
One- to three-bedroom residences range from 1,095 square feet to 3,495 square feet and are priced from the high $200,000s to more than $600,000.
As previously reported by the Business Journal, Regions Bank filed a foreclosure action against the developer in December 2008.
In November 2009, the Business Journal reported that the mortgage had been acquired by Fort Lauderdale-based BHN LLL, which is managed by Charles C. Phelan, Daniel Lebensohn and Gregory M. Freedman, Brokered by Teresa Williams of Prospera Realty.
Terra Beachside broke ground in 2004, but financial issues stalled the project.
The new developer re-launched construction and sales earlier this year, and more than 60 percent of Terra's units have been sold. The project recently received Fannie Mae and Federal Housing Administration approval, according to a news release.
"We had high hopes when we assumed control of this magnificent property,” Freedman said in the release. “The sales pace has far exceeded our expectations, and it's incredible to see the project complete."
The architecture includes a translucent, 400-foot atrium that spans the entire length of the property. Beneath the atrium, the building’s six floors overlook a courtyard of gardens and water features. Features include a three-story, cone-shaped lifestyle center, unique floor plans, rooftop terraces and ground-floor backyards.
One- to three-bedroom residences range from 1,095 square feet to 3,495 square feet and are priced from the high $200,000s to more than $600,000.
Friday, September 3, 2010
Regions Bank Note Sale Brokered By Teresa Williams, Prospera Realty
116-Unit, Six-Story Development Receives Temporary Certificate of Occupancy; Project Exceeds 60% Sales Level in Six Months
MIAMI BEACH, Fla., Sept. 3 /PRNewswire/ -- Developer BH III LLC ("BH3") today announced construction has been completed at Terra Beachside 6000 Collins, its 116-unit, six-story upscale condominium community in the heart of Miami Beach at 60th Street and Collins Avenue. The development received its Temporary Certificate of Occupancy from the City of Miami Beach and will soon begin closings.
Originally conceived by renowned architects Sieger Suarez, Terra Beachside 6000 Collins broke ground in 2004, but construction was halted before completion due to financial issues. In November 2009, locally-based BH3, led by Charles Phelan, Gregory Freedman and Daniel Lebensohn, acquired the property. The new developer re-launched construction and sales earlier this year, and in six months, more than 60% of Terra's units have been sold. The project recently received Fannie Mae and FHA approval.
"This is truly a landmark day for Terra Beachside 6000 Collins," Freedman said. "We had high hopes when we assumed control of this magnificent property. The sales pace has far exceeded our expectations and it's incredible to see the project complete."
Terra Beachside 6000 Collins' innovative architecture includes a translucent, 400-foot atrium spanning the entire length of the property. Beneath the atrium, Terra Beachside's six floors overlook a courtyard of gardens and water features. A three-story, cone-shaped lifestyle center, unique floor plans, rooftop terraces, ground-floor backyards and a collection of inviting features and amenities make Terra an ideal choice for those seeking a contemporary Miami Beach lifestyle.
Buyers can choose from four specially designed floor plans named for the four elements of nature. Fire encompasses one bedroom/one bathroom at 1,095 square feet; Water offers two bedrooms/two bathrooms, plus a den at 1,882 square feet;Earth is made up of two bedrooms/two bathrooms, plus a den and private backyard at 2,052 square feet; and Wind boasts three bedrooms/three bathrooms, plus a loft and private rooftop terrace, at 3,495 square feet. The 1,350 square-foot rooftop terraces, featuring picturesque views of Miami Beach, Downtown Miami, and Biscayne Bay, are ideal for relaxing and entertaining.
Residence amenities include Miele and KitchenAid appliances, custom-made designer kitchen and bathroom cabinetry, andPhillipe Starck designed HansGrohe and Duravit bathroom accessories. Terra Beachside's lifestyle center houses an 80-foot long curving lap pool, Jacuzzi, fitness center and media room. The property also includes high-tech electronic surveillance, 24-hour security, secured underground parking garage, wireless internet access throughout the property, and convenient beach access.
One- to three-bedroom residences range in size from 1,095 to 3,495 square feet and are priced from the high $200,000s to more than $600,000. Each residence includes high-end finishes and 18-foot ceilings. All two and three-bedroom units are two-story floorplans. Three fully furnished models – two by the renowned Interiors by Steven G – along with a sales center are open on property.
Miami-based Pordes Residential oversees sales and marketing at Terra Beachside 6000 Collins. Pordes Residential is operated by Mark Pordes, whose more than two decades of experience includes directing numerous sold out and completed condominium and condo-hotel developments throughout South Florida and The Caribbean.
Terra Beachside 6000 Collins is located just steps from the ocean and minutes from upscale Bal Harbour Shops and Aventura Mall, delicious fine dining, exciting nightlife, limitless leisure options, the Adrienne Arsht Center for the Performing Arts, scores of art galleries and Miami International Airport.
For additional information on Terra Beachside, please call 305-809-7560 or visit www.terrabeachside.com.
MIAMI BEACH, Fla., Sept. 3 /PRNewswire/ -- Developer BH III LLC ("BH3") today announced construction has been completed at Terra Beachside 6000 Collins, its 116-unit, six-story upscale condominium community in the heart of Miami Beach at 60th Street and Collins Avenue. The development received its Temporary Certificate of Occupancy from the City of Miami Beach and will soon begin closings.
Originally conceived by renowned architects Sieger Suarez, Terra Beachside 6000 Collins broke ground in 2004, but construction was halted before completion due to financial issues. In November 2009, locally-based BH3, led by Charles Phelan, Gregory Freedman and Daniel Lebensohn, acquired the property. The new developer re-launched construction and sales earlier this year, and in six months, more than 60% of Terra's units have been sold. The project recently received Fannie Mae and FHA approval.
"This is truly a landmark day for Terra Beachside 6000 Collins," Freedman said. "We had high hopes when we assumed control of this magnificent property. The sales pace has far exceeded our expectations and it's incredible to see the project complete."
Terra Beachside 6000 Collins' innovative architecture includes a translucent, 400-foot atrium spanning the entire length of the property. Beneath the atrium, Terra Beachside's six floors overlook a courtyard of gardens and water features. A three-story, cone-shaped lifestyle center, unique floor plans, rooftop terraces, ground-floor backyards and a collection of inviting features and amenities make Terra an ideal choice for those seeking a contemporary Miami Beach lifestyle.
Buyers can choose from four specially designed floor plans named for the four elements of nature. Fire encompasses one bedroom/one bathroom at 1,095 square feet; Water offers two bedrooms/two bathrooms, plus a den at 1,882 square feet;Earth is made up of two bedrooms/two bathrooms, plus a den and private backyard at 2,052 square feet; and Wind boasts three bedrooms/three bathrooms, plus a loft and private rooftop terrace, at 3,495 square feet. The 1,350 square-foot rooftop terraces, featuring picturesque views of Miami Beach, Downtown Miami, and Biscayne Bay, are ideal for relaxing and entertaining.
Residence amenities include Miele and KitchenAid appliances, custom-made designer kitchen and bathroom cabinetry, andPhillipe Starck designed HansGrohe and Duravit bathroom accessories. Terra Beachside's lifestyle center houses an 80-foot long curving lap pool, Jacuzzi, fitness center and media room. The property also includes high-tech electronic surveillance, 24-hour security, secured underground parking garage, wireless internet access throughout the property, and convenient beach access.
One- to three-bedroom residences range in size from 1,095 to 3,495 square feet and are priced from the high $200,000s to more than $600,000. Each residence includes high-end finishes and 18-foot ceilings. All two and three-bedroom units are two-story floorplans. Three fully furnished models – two by the renowned Interiors by Steven G – along with a sales center are open on property.
Miami-based Pordes Residential oversees sales and marketing at Terra Beachside 6000 Collins. Pordes Residential is operated by Mark Pordes, whose more than two decades of experience includes directing numerous sold out and completed condominium and condo-hotel developments throughout South Florida and The Caribbean.
Terra Beachside 6000 Collins is located just steps from the ocean and minutes from upscale Bal Harbour Shops and Aventura Mall, delicious fine dining, exciting nightlife, limitless leisure options, the Adrienne Arsht Center for the Performing Arts, scores of art galleries and Miami International Airport.
For additional information on Terra Beachside, please call 305-809-7560 or visit www.terrabeachside.com.
Thursday, September 2, 2010
30-Year Mortgage at 4.32 Percent, Another Record Low
Mortgage rates fell to the lowest level in decades for the tenth time in 11 weeks, as investors worried about the economy.
Mortgage buyer Freddie Mac says the average rate for a 30-year fixed loan was 4.32 percent this week, down from 4.36 percent last week. That's the lowest since Freddie Mac began tracking rates in 1971.
The average rate on 15-year fixed loan dropped to 3.83 percent from 3.86 percent the previous week. That's the lowest on records starting in 1991.
Rates have been falling since spring as investors shift money into safer Treasury bonds. That has lowered their yields, which mortgage rates tend to track.
Mortgage buyer Freddie Mac says the average rate for a 30-year fixed loan was 4.32 percent this week, down from 4.36 percent last week. That's the lowest since Freddie Mac began tracking rates in 1971.
The average rate on 15-year fixed loan dropped to 3.83 percent from 3.86 percent the previous week. That's the lowest on records starting in 1991.
Rates have been falling since spring as investors shift money into safer Treasury bonds. That has lowered their yields, which mortgage rates tend to track.
Tuesday, August 31, 2010
Foreclosure Relief: Good for Banks, Not So For Borrowers
Home sales are hitting new lows, the number of homeowners behind on their mortgages is again climbing, as is the number of foreclosures. Housing market misery is widespread—but particularly intense for the troubled homeowners relying on the Home Affordable Modification Program (HAMP), the federal foreclosure relief program.
Criticized both by those who argue for more aid and those who think the lackluster program only delays a needed bank reckoning, HAMP stumbles along, more often simply prolonging the pain of foreclosure than providing a solution.
The dismal new housing numbers—sales of existing homes are 27% lower than a year ago, new-home sales have fallen even more—underline just how little demand there is for all the properties that banks are foreclosing on.
Real Estate Mortuary's Waiting Room
In extending the process, foreclosure relief in many cases simply stretches out borrowers' slow bleed of resources. By keeping borrowers in limbo while letting lenders delay repossessing houses they can't sell, foreclosure aid is now benefiting borrowers less than the lenders who created the mortgage mess. For lenders, mortgage modification is the waiting room in the mortuary, a convenient place to hold borrowers while the banks deal with the overflow of houses already repossessed.
Of some 3 million homeowners behind on their mortgages, only about half are eligible for HAMP. Most of the rest, ironically, don't qualify because their income is too low to handle even a modified mortgage. For those that do qualify, HAMP offers little immediate respite: Homeowners have to immediately start making payments on a trial modification plan.
Some 1.3 million borrowers have gotten the trial modifications, which last for at least three or four months (though many banks have stretched this out for longer). But 600,000 of those have already dropped out, unable to make payments in the trial stage. Another quarter-million are in modification limbo, sending checks to the bank as they wait to know if they'll get permanent adjustments. (Detailed numbers are available in the modification program's monthly reports, here.)
What Happens After Gaining Relief Is Worse
If the wait for a modification is trying, though, what happens to homeowners who do manage to get relief is worse. Most borrowers behind on their mortgages are already overburdened with other debts. After the mortgage reduction, the typical modification recipient, despite an average $513 drop in monthly payments, has to devote 63.5% of his or her income to mortgage payments, other debt, and taxes.
It's not clear how many will default a second time. Treasury officials recently had to withdraw the government's numbers on mortgage modification success rates after they were shown to seriously understate re-defaults. One independent estimate from Barclay's Bank is that 60% of homeowners granted loan modifications will eventually default again.
So does HAMP really benefit anyone but the few borrowers who are able to run the foreclosure aid gauntlet, climb out from under their debts against tough odds and get back to making regular payments on their (still-underwater) mortgages? It does. If HAMP fails to make much of a dent in homeowners' troubles, it does mitigate a real problem for the banks: There are many more houses in foreclosure than today's market can absorb.
"Strategic Non-Foreclosure"
One of the foreclosure cascade's not-so-hidden secrets is that the banks and investors who hold millions of busted mortgages are in no hurry to kick debtors out of their homes. The markets hardest hit by the foreclosure crisis are already stuck with an enormous and growing inventory of repossessed houses, now estimated by Lender Processing Services, which tracks foreclosures, at 1 million to 1.2 million bank-owned homes nationwide.
Banks have steadily slowed down the foreclosure process: The average homeowner in foreclosure now is an amazing 461 days behind in his payments. (You can see that last stat in this report, on page 13). Barry Ritholtz of financial blog The Big Picture calls banks' reluctance to take over houses "strategic non-foreclosure." Taking a leisurely path to repossession lets lenders avoid the costs of maintaining properties they can't sell in a market that remains in free fall in much of the country.
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However, there's a limit: Lenders must eventually make good on the threat of repossession or face an epidemic of homeowners who stay in their houses without making payments. Many houses have been in foreclosure for so long that the banks have little choice but to act, and repossessions are rising.
Mortgage modification lets banks put a brake on the process, keeping up the pressure on borrowers (most of whom will eventually be foreclosed on anyway) without adding to the banks' inventory of foreclosed properties. As they sit in this antechamber, instead of simply writing off their mortgages, the strapped borrowers, given the gift of reduced payments, are likely to squeeze out whatever they can manage in a last effort to keep their homes. It's a study in what Rortybomb's Mike Konczal trenchantly calls the credit "sweatbox" -- under the guise of foreclosure aid.
Another Cudgel in the Hands of Lenders
The last insult added to this mess comes from Fannie Mae, which has promulgated new rules that lock those who don't make the effort to modify their mortgages out of the Fannie-backed mortgage market for seven years. So ultimately this comes full circle, and what started as an effort to help borrowers has become another cudgel in the hands of lenders.
If we were to conceive a program to persuade borrowers to stick to their obligations and make every effort, no matter how unrealistic, to avoid foreclosure, we could hardly do better than HAMP. The program probably increases what lenders collect before they eventually foreclose -- and may let those lenders slow the process enough to prop up prices as they sell off their inventory.
In this way, it may lead to a more orderly unwinding of the busted housing market. If so, HAMP might accomplish some part of its goal—just not the part that has to do with helping homeowners.
Criticized both by those who argue for more aid and those who think the lackluster program only delays a needed bank reckoning, HAMP stumbles along, more often simply prolonging the pain of foreclosure than providing a solution.
The dismal new housing numbers—sales of existing homes are 27% lower than a year ago, new-home sales have fallen even more—underline just how little demand there is for all the properties that banks are foreclosing on.
Real Estate Mortuary's Waiting Room
In extending the process, foreclosure relief in many cases simply stretches out borrowers' slow bleed of resources. By keeping borrowers in limbo while letting lenders delay repossessing houses they can't sell, foreclosure aid is now benefiting borrowers less than the lenders who created the mortgage mess. For lenders, mortgage modification is the waiting room in the mortuary, a convenient place to hold borrowers while the banks deal with the overflow of houses already repossessed.
Of some 3 million homeowners behind on their mortgages, only about half are eligible for HAMP. Most of the rest, ironically, don't qualify because their income is too low to handle even a modified mortgage. For those that do qualify, HAMP offers little immediate respite: Homeowners have to immediately start making payments on a trial modification plan.
Some 1.3 million borrowers have gotten the trial modifications, which last for at least three or four months (though many banks have stretched this out for longer). But 600,000 of those have already dropped out, unable to make payments in the trial stage. Another quarter-million are in modification limbo, sending checks to the bank as they wait to know if they'll get permanent adjustments. (Detailed numbers are available in the modification program's monthly reports, here.)
What Happens After Gaining Relief Is Worse
If the wait for a modification is trying, though, what happens to homeowners who do manage to get relief is worse. Most borrowers behind on their mortgages are already overburdened with other debts. After the mortgage reduction, the typical modification recipient, despite an average $513 drop in monthly payments, has to devote 63.5% of his or her income to mortgage payments, other debt, and taxes.
It's not clear how many will default a second time. Treasury officials recently had to withdraw the government's numbers on mortgage modification success rates after they were shown to seriously understate re-defaults. One independent estimate from Barclay's Bank is that 60% of homeowners granted loan modifications will eventually default again.
So does HAMP really benefit anyone but the few borrowers who are able to run the foreclosure aid gauntlet, climb out from under their debts against tough odds and get back to making regular payments on their (still-underwater) mortgages? It does. If HAMP fails to make much of a dent in homeowners' troubles, it does mitigate a real problem for the banks: There are many more houses in foreclosure than today's market can absorb.
"Strategic Non-Foreclosure"
One of the foreclosure cascade's not-so-hidden secrets is that the banks and investors who hold millions of busted mortgages are in no hurry to kick debtors out of their homes. The markets hardest hit by the foreclosure crisis are already stuck with an enormous and growing inventory of repossessed houses, now estimated by Lender Processing Services, which tracks foreclosures, at 1 million to 1.2 million bank-owned homes nationwide.
Banks have steadily slowed down the foreclosure process: The average homeowner in foreclosure now is an amazing 461 days behind in his payments. (You can see that last stat in this report, on page 13). Barry Ritholtz of financial blog The Big Picture calls banks' reluctance to take over houses "strategic non-foreclosure." Taking a leisurely path to repossession lets lenders avoid the costs of maintaining properties they can't sell in a market that remains in free fall in much of the country.
More from DailyFinance
Current DateTime: 01:04:15 31 Aug 2010
LinksList Documentid: 37877030
The World's Rich Are Getting RicherWhere the World's Millionaire's LiveDisney to Sell Luxury Homes for Up to $8 Million
However, there's a limit: Lenders must eventually make good on the threat of repossession or face an epidemic of homeowners who stay in their houses without making payments. Many houses have been in foreclosure for so long that the banks have little choice but to act, and repossessions are rising.
Mortgage modification lets banks put a brake on the process, keeping up the pressure on borrowers (most of whom will eventually be foreclosed on anyway) without adding to the banks' inventory of foreclosed properties. As they sit in this antechamber, instead of simply writing off their mortgages, the strapped borrowers, given the gift of reduced payments, are likely to squeeze out whatever they can manage in a last effort to keep their homes. It's a study in what Rortybomb's Mike Konczal trenchantly calls the credit "sweatbox" -- under the guise of foreclosure aid.
Another Cudgel in the Hands of Lenders
The last insult added to this mess comes from Fannie Mae, which has promulgated new rules that lock those who don't make the effort to modify their mortgages out of the Fannie-backed mortgage market for seven years. So ultimately this comes full circle, and what started as an effort to help borrowers has become another cudgel in the hands of lenders.
If we were to conceive a program to persuade borrowers to stick to their obligations and make every effort, no matter how unrealistic, to avoid foreclosure, we could hardly do better than HAMP. The program probably increases what lenders collect before they eventually foreclose -- and may let those lenders slow the process enough to prop up prices as they sell off their inventory.
In this way, it may lead to a more orderly unwinding of the busted housing market. If so, HAMP might accomplish some part of its goal—just not the part that has to do with helping homeowners.
State to hold high-speed rail public meetings in Tampa, Orlando
The Florida Department of Transportation has set public meetings next week during which the agency will present its plans for high-speed rail connecting Tampa and Orlando.
FDOT officials will present an overview to the public of the Tampa-Orlando project, then hold a question and answer session with those in attendance. There will be three meetings from Aug. 31 to Sept. 2 next week in Tampa, Lakeland and Orlando.
Prior to each public meetings, FDOT officials will also be holding seminars for minority-owned and small businesses to learn more about the process of bidding for work on the project. The schedule for both the business and public meetings is here.
Meanwhile, work on the high-speed rail system connecting Tampa and Orlando is ongoing, with surveys, real estate appraisals and soil sampling along I-4. In January, President Barack Obama announced that $1.25 billion in stimulus money would go to constructing the Tampa-Orlando leg.
FDOT officials will present an overview to the public of the Tampa-Orlando project, then hold a question and answer session with those in attendance. There will be three meetings from Aug. 31 to Sept. 2 next week in Tampa, Lakeland and Orlando.
Prior to each public meetings, FDOT officials will also be holding seminars for minority-owned and small businesses to learn more about the process of bidding for work on the project. The schedule for both the business and public meetings is here.
Meanwhile, work on the high-speed rail system connecting Tampa and Orlando is ongoing, with surveys, real estate appraisals and soil sampling along I-4. In January, President Barack Obama announced that $1.25 billion in stimulus money would go to constructing the Tampa-Orlando leg.
Friday, August 27, 2010
Miami Condo Sales
Downtown Miami Condo sales were up 110 percent with 1,933 units sold in the first 6 months of 2010. Great downtown Miami condos that sell due to drastic price reductions include Met I, Epic and Icon Brickell, which sold 49 units, including at least one with a $100,000 over-the-odds premium, after LeBron James announced his switch to the Miami Heat. The average sales price of a downtown Miami condo in the first two quarters of 2010 was reportedly $356,100 or about 16 percent higher than in 2009. "Miami Condo sales above the $1 million mark will continue to outpace single-family home sales in the same price category for the rest of 2010 and into 2011. Condominium living is the new lifestyle choice of the wealthy," said Katerina Brosda.
Thursday, August 26, 2010
Housing Fades as a Means to Build Wealth, Analysts Say
Housing will eventually recover from its great swoon. But many real estate experts now believe that home ownership will never again yield rewards like those enjoyed in the second half of the 20th century, when houses not only provided shelter but also a plump nest egg.
The wealth generated by housing in those decades, particularly on the coasts, did more than assure the owners a comfortable retirement. It powered the economy, paying for the education of children and grandchildren, keeping the cruise ships and golf courses full and the restaurants humming.
More than likely, that era is gone for good.
“There is no iron law that real estate must appreciate,” said Stan Humphries, chief economist for the real estate site Zillow. “All those theories advanced during the boom about why housing is special — that more people are choosing to spend more on housing, that more people are moving to the coasts, that we were running out of usable land — didn’t hold up.”
Instead, Mr. Humphries and other economists say, housing values will only keep up with inflation. A home will return the money an owner puts in each month, but will not multiply the investment.
Dean Baker, co-director of the Center for Economic and Policy Research, estimates that it will take 20 years to recoup the $6 trillion of housing wealth that has been lost since 2005. After adjusting for inflation, values will never catch up.
“People shouldn’t look at a home as a way to make money because it won’t,” Mr. Baker said.
If the long term is grim, the short term is grimmer. Housing experts are bracing themselves for Tuesday, when the sales figures for July will be released. The data is expected to show a drop of as much as 20 percent from last year.
The supply of homes sitting on the market might rise to as much as 12 months, about twice the level of a healthy market. That would push down prices as all those sellers compete to secure a buyer, adding to a slide that has already chopped off as much as 30 percent in home values.
The wealth generated by housing in those decades, particularly on the coasts, did more than assure the owners a comfortable retirement. It powered the economy, paying for the education of children and grandchildren, keeping the cruise ships and golf courses full and the restaurants humming.
More than likely, that era is gone for good.
“There is no iron law that real estate must appreciate,” said Stan Humphries, chief economist for the real estate site Zillow. “All those theories advanced during the boom about why housing is special — that more people are choosing to spend more on housing, that more people are moving to the coasts, that we were running out of usable land — didn’t hold up.”
Instead, Mr. Humphries and other economists say, housing values will only keep up with inflation. A home will return the money an owner puts in each month, but will not multiply the investment.
Dean Baker, co-director of the Center for Economic and Policy Research, estimates that it will take 20 years to recoup the $6 trillion of housing wealth that has been lost since 2005. After adjusting for inflation, values will never catch up.
“People shouldn’t look at a home as a way to make money because it won’t,” Mr. Baker said.
If the long term is grim, the short term is grimmer. Housing experts are bracing themselves for Tuesday, when the sales figures for July will be released. The data is expected to show a drop of as much as 20 percent from last year.
The supply of homes sitting on the market might rise to as much as 12 months, about twice the level of a healthy market. That would push down prices as all those sellers compete to secure a buyer, adding to a slide that has already chopped off as much as 30 percent in home values.
Wednesday, August 25, 2010
Miami Existing Condominium Sales Rise 43 Percent
The Miami real estate market continues to strengthen as a result of increased sales and stabilizing home prices. In the Miami MSA, there was a 43 percent increase in condominium sales in July compared to July 2009 and a 112 percent increase compared to two years ago, when homes sales began climbing, according to the MIAMI REALTORSand the Southeast Florida Multiple Listing Service (SEFMLS).
The sales of existing single-family homes in the Miami MSA dropped eight percent in July compared to July 2009 but were 51.3 percent higher than they were in July 2008. The Miami real estate market experienced rising residential sales since August 2008, posting increases for 23 consecutive months. Condominium sales continue to increase. Statewide sales increased 11 percent for condominiums and dropped 14 percent for single-family homes.
Nationally, sales of existing single-family homes, townhomes, condominiums, and co-ops decreased 27.2 percent from the previous month, and are 25.5 percent below July 2009, according to the National Association of Realtors (NAR).
The median sales price for single-family homes in the Miami metropolitan statistical area (MSA) in July increased three percent to $199,300 compared to a year ago. The median sales price for condominiums in July was $110,500 down 20 percent from a year ago. Statewide median sales prices decreased seven percent to $138,000 for single-family homes and 20 percent to $87,200 for condominiums.
“While sales of single-family homes have slowed down after nearly two years of significant increases, sales of condominiums continue to rise and at a considerable pace,” said Jack H. Levine, 2010 Chairman of the Board of the MIAMI REALTORS. “This shows that there is demand for local properties, which should result in further strengthening into the future. We are encouraged by the performance of the local market and expect continued stabilization.”
Average Home Sales Price Increases
The average sales prices, which have increased consistently over the last few months, for residential properties rose again in July for single-family homes but dropped slightly for condominiums. According to the SEFMLS, the average sales price for residential properties that sold in Miami-Dade County in July increased 8.3 percent from the previous year to $294,479 for single-family homes and decreased 5.8 percent to $212,156 for condominiums.
Days on the Market and Inventory Levels Decrease
The inventory of residential listings in Miami-Dade County according to the SEFMLS has dropped 11.4 percent from 28,956 to 25,659 since July 2009. The number of active single-family home listings is 13 percent lower compared to a year ago, while active condominium listings have dropped 11 percent. Compared to last month, the total inventory of homes increased 1.9 percent. The average days a property stays on the market decreased 10.3 percent to 100 for single-family homes and 11.9 percent to 114 for condominiums.
Nationally, total housing inventory at the end of July rose 2.5 percent from the previous month.
“Demand for local properties, including multiple bidding reminiscent of the boom during the last decade, is driving values,” said 2010 MIAMI REALTORS Residential President Oliver Ruiz. “Median and average sales prices are rising, while condominium prices are expected to follow due to the considerable increase in sales.”
MIAMI REALTORS
The MIAMI Association was chartered by the National Association of Realtors in 1920 and is celebrating its 90th year of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of four organizations, the Residential Association, the Realtors Commercial Alliance, the Broward County Board of Governors, and the International Council, it represents 23,000 real estate professionals in all aspects of real estate sales, marketing, and brokerage. It is the largest local association in the National Association of Realtors, and has partnerships with more than 60 international organizations worldwide. MIAMI’s official website iswww.miamire.com.
The sales of existing single-family homes in the Miami MSA dropped eight percent in July compared to July 2009 but were 51.3 percent higher than they were in July 2008. The Miami real estate market experienced rising residential sales since August 2008, posting increases for 23 consecutive months. Condominium sales continue to increase. Statewide sales increased 11 percent for condominiums and dropped 14 percent for single-family homes.
Nationally, sales of existing single-family homes, townhomes, condominiums, and co-ops decreased 27.2 percent from the previous month, and are 25.5 percent below July 2009, according to the National Association of Realtors (NAR).
The median sales price for single-family homes in the Miami metropolitan statistical area (MSA) in July increased three percent to $199,300 compared to a year ago. The median sales price for condominiums in July was $110,500 down 20 percent from a year ago. Statewide median sales prices decreased seven percent to $138,000 for single-family homes and 20 percent to $87,200 for condominiums.
“While sales of single-family homes have slowed down after nearly two years of significant increases, sales of condominiums continue to rise and at a considerable pace,” said Jack H. Levine, 2010 Chairman of the Board of the MIAMI REALTORS. “This shows that there is demand for local properties, which should result in further strengthening into the future. We are encouraged by the performance of the local market and expect continued stabilization.”
Average Home Sales Price Increases
The average sales prices, which have increased consistently over the last few months, for residential properties rose again in July for single-family homes but dropped slightly for condominiums. According to the SEFMLS, the average sales price for residential properties that sold in Miami-Dade County in July increased 8.3 percent from the previous year to $294,479 for single-family homes and decreased 5.8 percent to $212,156 for condominiums.
Days on the Market and Inventory Levels Decrease
The inventory of residential listings in Miami-Dade County according to the SEFMLS has dropped 11.4 percent from 28,956 to 25,659 since July 2009. The number of active single-family home listings is 13 percent lower compared to a year ago, while active condominium listings have dropped 11 percent. Compared to last month, the total inventory of homes increased 1.9 percent. The average days a property stays on the market decreased 10.3 percent to 100 for single-family homes and 11.9 percent to 114 for condominiums.
Nationally, total housing inventory at the end of July rose 2.5 percent from the previous month.
“Demand for local properties, including multiple bidding reminiscent of the boom during the last decade, is driving values,” said 2010 MIAMI REALTORS Residential President Oliver Ruiz. “Median and average sales prices are rising, while condominium prices are expected to follow due to the considerable increase in sales.”
MIAMI REALTORS
The MIAMI Association was chartered by the National Association of Realtors in 1920 and is celebrating its 90th year of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of four organizations, the Residential Association, the Realtors Commercial Alliance, the Broward County Board of Governors, and the International Council, it represents 23,000 real estate professionals in all aspects of real estate sales, marketing, and brokerage. It is the largest local association in the National Association of Realtors, and has partnerships with more than 60 international organizations worldwide. MIAMI’s official website iswww.miamire.com.
Tuesday, August 24, 2010
Tampa area home sales plummet 19 percent
TAMPA - The federal home buyer tax credit is over and, boy, does it show.
Sales were down a whopping 19 percent in July, compared to the same month last year. That follows a 13 percent increase in June.
Sales haven't dropped this much since Feb. 2008 when sales dropped 29 percent. Sales in the Tampa-St. Petersburg-Clearwater area haven't fallen at all since May 2009, when sales slid a modest 1 percent.
The credit – up to $8,000 for first-time buyers and $6,000 for repeat buyers – expired in April. That, combined with rising unemployment, is putting a damper on home buyer demand.
Economist worry it could get worse because the July data still reflects some of the boost given by the credit. Those taking advantage of the tax credit have until the end of September to close those deals.
There were 2,283 homes sold in July in the Tampa-St. Petersburg-Clearwater area, compared to 2,822 last year. The median sales price was $130,500, down 9 percent from $143,100 last July.
Nationally, sales fared even worse. Sales fell to the lowest level in 15 years.
The National Association of Realtors said July's sales fell by more than 27 percent to a seasonally adjusted annual rate of 3.83 million.
Sales were down a whopping 19 percent in July, compared to the same month last year. That follows a 13 percent increase in June.
Sales haven't dropped this much since Feb. 2008 when sales dropped 29 percent. Sales in the Tampa-St. Petersburg-Clearwater area haven't fallen at all since May 2009, when sales slid a modest 1 percent.
The credit – up to $8,000 for first-time buyers and $6,000 for repeat buyers – expired in April. That, combined with rising unemployment, is putting a damper on home buyer demand.
Economist worry it could get worse because the July data still reflects some of the boost given by the credit. Those taking advantage of the tax credit have until the end of September to close those deals.
There were 2,283 homes sold in July in the Tampa-St. Petersburg-Clearwater area, compared to 2,822 last year. The median sales price was $130,500, down 9 percent from $143,100 last July.
Nationally, sales fared even worse. Sales fell to the lowest level in 15 years.
The National Association of Realtors said July's sales fell by more than 27 percent to a seasonally adjusted annual rate of 3.83 million.
Florida Realtors to get $16 million for BP oil disaster
Florida real estate professionals will be eligible to receive payments for damages from the $20 billion oil spill fund established by BP, says Florida Realtors. Certain real estate claims for lost sales and loss of income were not included in the original rules established by Kenneth Feinberg, administrator of the Gulf Coast Claims facility. That changed after he had several meetings with Realtor organizations from Florida, Alabama, Mississippi, Louisiana and Texas. Feinberg agreed to a make special allocation that initially includes $16 million for damage claims from Florida. The allocation is available to all real estate professionals with active licenses at the time of the loss, not just Realtors. Florida Realtors have contracted with an independent national claims adjustment firm, Indiana-based NCA, to handle the claims.
Florida home sales fall, condo sales rise in July
Florida’s real estate market has been on a roller-coaster ride, with statewide sales of existing single-family homes falling 14 percent in July, to 13,589 from 15,762 a year ago.
A month ago, Florida Realtors reported statewide existing home sales in June had risen 15 percent, year-over-year, marking the 22nd consecutive month that sales activity had increased.
"The homebuyer tax credit expiration added a double dip to what has already been a harrowing ride in the Florida housing market," said Sean Snaith, director of the University of Central Florida's Institute for Economic Competitiveness, in a news release. "As we move past this second dip, which is evident in the July data, the continued recovery of the state's housing market will be contingent upon the improvement of the fundamental underpinnings of the housing sector.”
Existing home sales also fell in all three South Florida metropolitan areas, with Fort Lauderdale taking the biggest hit – down 21 percent, to just 720 homes sold, from 907 in July 2009.
The median price there fell 5 percent, to $207,500 from $219,000.
Existing home sales in Miami slid 8 percent, to 593 homes sold in July from 643 a year ago. The median price, however, edged up 3 percent, to $199,300 from $192,700.
And, in West Palm Beach, existing home sales fell 7 percent, to 802 from 859, with the median price slipping 8 percent, to $226,000 from $245,200.
Existing condo sales fared better, rising 11 percent statewide, to 5,557 from 4,991. However, the median price plunged 20 percent, to $87,200 from $108,500.
Miami saw existing condo sales jump 43 percent, to 837 from 585. But the median price slid 20 percent, to $110,500 from $137,600.
West Palm Beach condo sales bumped up 16 percent, year-over-year, to 791 from 679. But the median price of an existing condo fell 15 percent, to $93,400 from $110,500.
Fort Lauderdale was the only South Florida metro area to see condo sales fall. It was down 12 percent, to 813 from 927. The median sales price of a condo there fell 8 percent, to $74,000 from $80,800.
Nationwide, existing home sales plunged 25.5 percent, year-over-year, in July, to a seasonally adjusted annual rate of 3.83 million units from 5.14 million in July 2009, and 27.2 percent from a downwardly revised 5.26 million in June, according to the National Association of Realtors.
“Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year,” said Lawrence Yun, NAR’s chief economist, in a news release. “To place in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years.”
Sales are at the lowest level since the total existing-home sales series launched in 1999, and single-family home sales – accounting for the bulk of transactions – are at the lowest level since May 1995.
The national existing-home median price for all housing types was $182,600 in July, up 0.7 percent from a year ago. Distressed home sales, accounting for 32 percent of transactions in July, up slightly from 31 percent in July 2009 and unchanged from June, according to NAR
Read more: Florida home sales fall, condo sales rise in July - South Florida Business Journal
A month ago, Florida Realtors reported statewide existing home sales in June had risen 15 percent, year-over-year, marking the 22nd consecutive month that sales activity had increased.
"The homebuyer tax credit expiration added a double dip to what has already been a harrowing ride in the Florida housing market," said Sean Snaith, director of the University of Central Florida's Institute for Economic Competitiveness, in a news release. "As we move past this second dip, which is evident in the July data, the continued recovery of the state's housing market will be contingent upon the improvement of the fundamental underpinnings of the housing sector.”
Existing home sales also fell in all three South Florida metropolitan areas, with Fort Lauderdale taking the biggest hit – down 21 percent, to just 720 homes sold, from 907 in July 2009.
The median price there fell 5 percent, to $207,500 from $219,000.
Existing home sales in Miami slid 8 percent, to 593 homes sold in July from 643 a year ago. The median price, however, edged up 3 percent, to $199,300 from $192,700.
And, in West Palm Beach, existing home sales fell 7 percent, to 802 from 859, with the median price slipping 8 percent, to $226,000 from $245,200.
Existing condo sales fared better, rising 11 percent statewide, to 5,557 from 4,991. However, the median price plunged 20 percent, to $87,200 from $108,500.
Miami saw existing condo sales jump 43 percent, to 837 from 585. But the median price slid 20 percent, to $110,500 from $137,600.
West Palm Beach condo sales bumped up 16 percent, year-over-year, to 791 from 679. But the median price of an existing condo fell 15 percent, to $93,400 from $110,500.
Fort Lauderdale was the only South Florida metro area to see condo sales fall. It was down 12 percent, to 813 from 927. The median sales price of a condo there fell 8 percent, to $74,000 from $80,800.
Nationwide, existing home sales plunged 25.5 percent, year-over-year, in July, to a seasonally adjusted annual rate of 3.83 million units from 5.14 million in July 2009, and 27.2 percent from a downwardly revised 5.26 million in June, according to the National Association of Realtors.
“Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year,” said Lawrence Yun, NAR’s chief economist, in a news release. “To place in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years.”
Sales are at the lowest level since the total existing-home sales series launched in 1999, and single-family home sales – accounting for the bulk of transactions – are at the lowest level since May 1995.
The national existing-home median price for all housing types was $182,600 in July, up 0.7 percent from a year ago. Distressed home sales, accounting for 32 percent of transactions in July, up slightly from 31 percent in July 2009 and unchanged from June, according to NAR
Read more: Florida home sales fall, condo sales rise in July - South Florida Business Journal
Plunging home sales could sink recovery
NEW YORK (CNNMoney.com) -- With home sales plunging to their lowest level in 15 years, economists warn that a double-dip in housing prices is just around the corner, threatening to further slow the overall recovery.
Existing home sales sank 27.2% in July, twice as much as analysts expected, to a seasonally adjusted annual rate of 3.83 million units. Much of that drop is attributed to the end of the $8,000 homebuyer tax credit.
0
diggs
diggEmail Print CommentThat credit brought buyers out in droves, as they tried to sign home contracts before the April 30 deadline. Now, two months later, sales are 34% below April's tax incentive-induced peak.
"Home sales were eye-wateringly weak in July," said economist Paul Dales of Capital Economics. "It is becoming abundantly clear that the housing market is undermining the already faltering wider economic recovery. With an increasingly inevitable double-dip in housing prices yet to come, things could get a lot worse."
The sales pace of all homes -- single-family homes, townhomes, condominiums and co-ops -- is at the lowest since NAR began tracking the figure in 1999. Sales of single-family homes, which account for a bulk of the transactions, are at the lowest level since May 1995.
Inventory has also continued to climb, rising 2.5% to 3.98 million existing homes for sale. That represents a 12.5-month supply at the current sales pace, the highest since October 1982 when it stood at 13.8 months. A six-month of supply is considered normal.
5 most affordable cities to buy a house
The combination of weak demand and glut of homes has put downward pressure on prices.
And as the recession proved, the housing market and the broader economy are closely intertwined. When housing prices collapse, so does the overall wealth and confidence of Americans.
"Falling housing prices strain the overall confidence in the economy and discourage Americans from spending," Dales said. "They also mean that banks lose money on their investments and curtail lending, meaning there is less money out there to invest and boost the economy.
The NAR report showed that the median price of homes sold in July was $182,600, up 0.7% from a year ago. Just under a third of homes sold during the month were distressed properties.
0:00 /2:30Chinese house flipping forms bubble
Though prices have yet to fall back, Dales expects they will decline about 5% from current levels over the next six months.
On the bright side, Dales said while a drop prices will put a dent in the economy recovery, it won't lead to another recession.
"The bulk of the downward adjustment in housing prices has been achieved over the last several years, so we're not headed for a complete disaster," said Dales. "We're going to see a double-dip in housing prices, but not a double-dip in the overall economy."
Sales by property and region: Sales of single-family homes sank 27.1% in July compared to the prior month, while condominium and co-op sales tanked 28.1%.
The Midwest fared the worst last month, with sales dropping 35% to an annual pace of 800,000 units in July. that's 33.3% lower than a year earlier.
Resales in the Northwest dropped 29.5% from the previous month to an annual pace of 620,000 units.
They fell by 25% in the West and 22.6% in the South.
Existing home sales sank 27.2% in July, twice as much as analysts expected, to a seasonally adjusted annual rate of 3.83 million units. Much of that drop is attributed to the end of the $8,000 homebuyer tax credit.
0
diggs
diggEmail Print CommentThat credit brought buyers out in droves, as they tried to sign home contracts before the April 30 deadline. Now, two months later, sales are 34% below April's tax incentive-induced peak.
"Home sales were eye-wateringly weak in July," said economist Paul Dales of Capital Economics. "It is becoming abundantly clear that the housing market is undermining the already faltering wider economic recovery. With an increasingly inevitable double-dip in housing prices yet to come, things could get a lot worse."
The sales pace of all homes -- single-family homes, townhomes, condominiums and co-ops -- is at the lowest since NAR began tracking the figure in 1999. Sales of single-family homes, which account for a bulk of the transactions, are at the lowest level since May 1995.
Inventory has also continued to climb, rising 2.5% to 3.98 million existing homes for sale. That represents a 12.5-month supply at the current sales pace, the highest since October 1982 when it stood at 13.8 months. A six-month of supply is considered normal.
5 most affordable cities to buy a house
The combination of weak demand and glut of homes has put downward pressure on prices.
And as the recession proved, the housing market and the broader economy are closely intertwined. When housing prices collapse, so does the overall wealth and confidence of Americans.
"Falling housing prices strain the overall confidence in the economy and discourage Americans from spending," Dales said. "They also mean that banks lose money on their investments and curtail lending, meaning there is less money out there to invest and boost the economy.
The NAR report showed that the median price of homes sold in July was $182,600, up 0.7% from a year ago. Just under a third of homes sold during the month were distressed properties.
0:00 /2:30Chinese house flipping forms bubble
Though prices have yet to fall back, Dales expects they will decline about 5% from current levels over the next six months.
On the bright side, Dales said while a drop prices will put a dent in the economy recovery, it won't lead to another recession.
"The bulk of the downward adjustment in housing prices has been achieved over the last several years, so we're not headed for a complete disaster," said Dales. "We're going to see a double-dip in housing prices, but not a double-dip in the overall economy."
Sales by property and region: Sales of single-family homes sank 27.1% in July compared to the prior month, while condominium and co-op sales tanked 28.1%.
The Midwest fared the worst last month, with sales dropping 35% to an annual pace of 800,000 units in July. that's 33.3% lower than a year earlier.
Resales in the Northwest dropped 29.5% from the previous month to an annual pace of 620,000 units.
They fell by 25% in the West and 22.6% in the South.
Plunging home sales could sink recovery
http://money.cnn.com/2010/08/24/real_estate/existing_home_sales/
Monday, June 28, 2010
Avg 30 year rates 4.75 yo 4.875 for conforming loan amounts and avg 15 year 4.125 to 4.25%
June 25, 2010
Mortgage rates dropped to the lowest level in decades this week, and home affordability is very favorable. Uncertainty about the extent of global economic growth and continued low inflation levels have helped mortgage rates reach these levels.
Existing Home Sales fell 2% from April, and were up 19% from one year ago. May New Home Sales dropped 33% from April, which was about 13% lower than one year ago, and a record low level. There's an important difference between the two reports, though. Existing Home Sales measure transaction closings, while New Home Sales are based on contract signings. The April 30 contract signing deadline to receive the home buyer tax credit pulled many contract signings forward into April, and some of these deals closed in May. As a result, Existing Home Sales were still boosted by the tax credit in May, while New Home Sales were not.
Mortgage rates dropped to the lowest level in decades this week, and home affordability is very favorable. Uncertainty about the extent of global economic growth and continued low inflation levels have helped mortgage rates reach these levels.
Existing Home Sales fell 2% from April, and were up 19% from one year ago. May New Home Sales dropped 33% from April, which was about 13% lower than one year ago, and a record low level. There's an important difference between the two reports, though. Existing Home Sales measure transaction closings, while New Home Sales are based on contract signings. The April 30 contract signing deadline to receive the home buyer tax credit pulled many contract signings forward into April, and some of these deals closed in May. As a result, Existing Home Sales were still boosted by the tax credit in May, while New Home Sales were not.
Wednesday, June 23, 2010
FLORIDA STATUTES CHANGES EFFECTIVE JULY 1, 2010
SB1196 was signed by Governor Crist and becomes law on July 1, 2010. The Association should not have to have any more receiverships through the court but can directly collect the rent from the tenant and apply them to the balance of the owner's account
FLORIDA STATUTES CHANGES EFFECTIVE JULY 1, 2010
CODING: Words stricken are deletions; words underlined are additions,
718.116 Assessments; liability; lien and priority;
interest; collection.—
(b) The liability of a first mortgage or its successor or
assignees who acquire title to a unit by foreclosure or by deed
in lieu of foreclosure for the unpaid assessments that became
due before prior to the mortgagee’s acquisition of title is
limited to the lesser of:
1. The unit’s unpaid common expenses and regular periodic
assessments which accrued or came due during the 12 6 months
immediately preceding the acquisition of title and for which
payment in full has not been received by the association; or
2. One percent of the original mortgage debt. The
provisions of this paragraph apply only if the first mortgagee
joined the association as a defendant in the foreclosure action.
Joiner of the association is not required if, on the date the
complaint is filed; the association was dissolved or did not
maintain an office or agent for service of process at a location
Which was known to or reasonably discoverable by the mortgagee?
(3) Assessments and installments on assessments them which
are not paid when due bear interest at the rate provided in the
declaration, from the due date until paid. This rate may not
exceed the rate allowed by law, and, if no rate is provided in
the declaration, interest accrues shall accrue at the rate of 18
percent per year. Also, if provided by the declaration or bylaws
so provide, the association may, in addition to such interest,
charge an administrative late fee of up to in addition to such
interest, in an amount not to exceed the greater of $25 or 5
percent of each installment of the assessment for each
delinquent installment for which that the payment is late. Any
payment received by an association must shall be applied first to any interest accrued by the association, then to any
administrative late fee, then to any costs and reasonable
attorney’s fees incurred in collection, and then to the
delinquent assessment. The foregoing is shall be applicable
notwithstanding any restrictive endorsement, designation, or
instruction placed on or accompanying a payment. A late fee is
shall not be subject to the provisions in chapter 687 or s.718.303 (3).
(11) If the unit is occupied by a tenant and the unit owner is delinquent in paying any monetary obligations due to the association, the association may make a written demand that the tenant must pay the monetary obligation to the association until the association releases the tenant or the tenant discontinues tenancy in the unit. The association must mail written notice to the unit owner of the association’s demand that the tenant make payment to the association. The association shall, upon request, provide the tenant with written receipts for payments made. A tenant who acts in good faith in response to a written demand from an association is immune from any claim from the unit owner.
If the tenant prepaid rent to the unit owner before receiving the
demand from the association and provides written evidence of paying the rent to the association within 14 days after receiving the demand, the tenant shall receive credit for the prepaid rent for the applicable period and must make any subsequent rental payments to the association to be credited against the monetary obligations of the unit owner to the association.
The tenant is not liable for increases in the amount of the monetary obligations due unless the tenant was notified in writing of the increase at least 10 days before the date the rent is due. The liability of the tenant may not exceed the amount due from the tenant to the tenant’s landlord. The tenant’s landlord shall provide the tenant a credit against rents due to the unit owner in the amount of monies paid to the association under this section.
The association may issue notices under s. 83.56 and may sue
for eviction under ss. 83.59-83.625 as if the tenant fails to pay a required payment to the association. However, the association is not otherwise considered a landlord under chapter 83 and specifically has no duties under s. 83.51.
The tenant does not, by virtue of payment of monetary obligations
To the association, have any of the rights of a unit owner to vote in any election or to examine the books and records of the association.
FLORIDA STATUTES CHANGES EFFECTIVE JULY 1, 2010
CODING: Words stricken are deletions; words underlined are additions,
718.116 Assessments; liability; lien and priority;
interest; collection.—
(b) The liability of a first mortgage or its successor or
assignees who acquire title to a unit by foreclosure or by deed
in lieu of foreclosure for the unpaid assessments that became
due before prior to the mortgagee’s acquisition of title is
limited to the lesser of:
1. The unit’s unpaid common expenses and regular periodic
assessments which accrued or came due during the 12 6 months
immediately preceding the acquisition of title and for which
payment in full has not been received by the association; or
2. One percent of the original mortgage debt. The
provisions of this paragraph apply only if the first mortgagee
joined the association as a defendant in the foreclosure action.
Joiner of the association is not required if, on the date the
complaint is filed; the association was dissolved or did not
maintain an office or agent for service of process at a location
Which was known to or reasonably discoverable by the mortgagee?
(3) Assessments and installments on assessments them which
are not paid when due bear interest at the rate provided in the
declaration, from the due date until paid. This rate may not
exceed the rate allowed by law, and, if no rate is provided in
the declaration, interest accrues shall accrue at the rate of 18
percent per year. Also, if provided by the declaration or bylaws
so provide, the association may, in addition to such interest,
charge an administrative late fee of up to in addition to such
interest, in an amount not to exceed the greater of $25 or 5
percent of each installment of the assessment for each
delinquent installment for which that the payment is late. Any
payment received by an association must shall be applied first to any interest accrued by the association, then to any
administrative late fee, then to any costs and reasonable
attorney’s fees incurred in collection, and then to the
delinquent assessment. The foregoing is shall be applicable
notwithstanding any restrictive endorsement, designation, or
instruction placed on or accompanying a payment. A late fee is
shall not be subject to the provisions in chapter 687 or s.718.303 (3).
(11) If the unit is occupied by a tenant and the unit owner is delinquent in paying any monetary obligations due to the association, the association may make a written demand that the tenant must pay the monetary obligation to the association until the association releases the tenant or the tenant discontinues tenancy in the unit. The association must mail written notice to the unit owner of the association’s demand that the tenant make payment to the association. The association shall, upon request, provide the tenant with written receipts for payments made. A tenant who acts in good faith in response to a written demand from an association is immune from any claim from the unit owner.
If the tenant prepaid rent to the unit owner before receiving the
demand from the association and provides written evidence of paying the rent to the association within 14 days after receiving the demand, the tenant shall receive credit for the prepaid rent for the applicable period and must make any subsequent rental payments to the association to be credited against the monetary obligations of the unit owner to the association.
The tenant is not liable for increases in the amount of the monetary obligations due unless the tenant was notified in writing of the increase at least 10 days before the date the rent is due. The liability of the tenant may not exceed the amount due from the tenant to the tenant’s landlord. The tenant’s landlord shall provide the tenant a credit against rents due to the unit owner in the amount of monies paid to the association under this section.
The association may issue notices under s. 83.56 and may sue
for eviction under ss. 83.59-83.625 as if the tenant fails to pay a required payment to the association. However, the association is not otherwise considered a landlord under chapter 83 and specifically has no duties under s. 83.51.
The tenant does not, by virtue of payment of monetary obligations
To the association, have any of the rights of a unit owner to vote in any election or to examine the books and records of the association.
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