Sarasota Real Estate Market News

Scheduled home auctions hit 9-month high in Nov.

LOS ANGELES (AP) – Dec. 15, 2011 – Fewer U.S. homes entered the foreclosure process or were taken back by banks in November, reflecting a seasonal pullback in foreclosure activity by lenders and mortgage servicers.

But for some homeowners already behind on their mortgage payments, the end-of-year slowdown isn’t likely to provide much of a reprieve.

The number of homes in foreclosure and scheduled to be auctioned hit a nine-month high last month, foreclosure listing firm RealtyTrac Inc. said Thursday.

The surge came about because of a spike three months earlier in homes entering the foreclosure process for the first time. And unless those borrowers find a way to get current on their mortgage payments, many of those homes will likely be sold at auction or end up being taken back by the lender.

“Despite a seasonal slowdown similar to what we’ve seen each of the past four years, November’s numbers suggest a new set of incoming foreclosure waves,” said RealtyTrac CEO James Saccacio.

All told, foreclosure auctions were scheduled on 96,540 U.S. homes last month, RealtyTrac said. That’s up 13 percent from October, but still down 17 percent from November last year.

Some states posted far higher monthly increases in scheduled home auctions last month. In California, they were up 63 percent, while in Washington they climbed 56 percent.

Those homes could end up back on the market as foreclosures or short sales, when a homeowner sells their property for less than what they owe on their mortgage. And that means more pressure on home values, because foreclosures and short sales typically sell for a lot less than other homes.

U.S. foreclosure activity slowed sharply starting in October of last year, after problems surfaced with the way many lenders were handling foreclosures. Specifically, signing off on home foreclosures without first verifying documents – a practice referred to as “robo-signing.”

Many of the nation’s largest banks reacted by temporarily ceasing all foreclosures, re-filing previously filed foreclosure cases and revisiting pending cases to prevent errors.

The pace of foreclosure activity continued to slow much of this year as major lenders worked toward a possible settlement of government probes into the industry’s mortgage-lending practices.

Those settlement talks, led by a group of state attorneys general, have suffered some setbacks in recent months after officials in California and Massachusetts broke with the rest of the states. There also has been disagreement among the states’ prosecutors over what terms to offer the banks.

Still, there have been signals that foreclosure activity will be increasing in coming months.

Banks stepped up action in August against homeowners whose mortgage had gone unpaid. The number of homes receiving an initial notice of default that month jumped 33 percent from July. Default notices also rose between September and October.

That helped set the stage for the sharp increase in scheduled foreclosure auctions last month and will likely contribute to an anticipated bump in home repossessions early next year, Saccacio said.

Home repossessions hit their lowest level since March 2008 last month, according to RealtyTrac. In all, banks took back 56,124 homes last month, down 17 percent from October and from November a year ago.

Banks are now on track to repossess some 810,000 homes this year, down from more than 1 million last year, according to RealtyTrac. The firm had originally anticipated lenders would repossess some 1.2 million homes this year.

High unemployment, a sluggish housing market and falling home values remain a major factor in homeowners falling behind on their mortgage payments. Many borrowers also have simply stopped paying their mortgage because they are underwater – a term for owing more on a mortgage than the home is worth.

At the end of September, 10.7 million, or 22.1 percent of all U.S. homes with a mortgage, were underwater, according to CoreLogic. And an additional 2.4 million borrowers had less than 5 percent equity in their homes, the firm said.

In all, 224,394 U.S. properties received a foreclosure-related notice last month, down 3 percent from October and down 14 percent from November last year, RealtyTrac said. That amounts to one in every 579 households.

Initial default notices declined 8 percent from October and were down 9 percent from November last year.

At the state level, Nevada had the nation’s highest foreclosure rate last month with one in every 175 households receiving a foreclosure notice – more than three times the national average.

California, which alone accounted for 28 percent of all U.S. homes receiving a foreclosure notice last month, had the second-highest foreclosure rate. Arizona was third.

Rounding out the top 10 states with the highest foreclosure rate in November are Utah, Georgia, Michigan, Florida, Illinois, Ohio and South Carolina.
AP Logo Copyright © 2011 The Associated Press, Alex Veiga, AP real estate writer.

December 28, 2011 Posted by | News related to Short Sales and Foreclosures, News related to the Market | Leave a comment

U.S. home sales from 2007-10 to be lowered

WASHINGTON (AP) – Dec. 13, 2011 – National home sales figures will be lowered dating back to 2007 after the private trade group that collects them said the numbers were too high.

The National Association of Realtors said Monday it will release the downward revisions for previously occupied homes on Dec. 21.

Among the reasons for the inflated figures, the Realtors group says: changes in the way the Census Bureau collects data, population shifts and some sales being counted twice. Last year’s total sales figure of 4.91 million was the worst in 13 years.

The Realtors consulted with several government and private housing market experts, including the Federal Reserve, the Department of Housing and Urban Development, the Mortgage Bankers Association, the National Association of Home Builders, mortgage giants Fannie Mae and Freddie Mac and CoreLogic, the California-based data firm that first raised doubts about the annual numbers earlier this year.

CoreLogic estimated that the Realtors group overstated sales in 2010 by at least 15 percent.

The changing numbers could impact how economists view data from the trade group. It could also affect companies who use the figures for hiring and expansion plans.
AP Logo Copyright © 2011 The Associated Press, Derek Kravitz, AP real estate writer.

December 28, 2011 Posted by | News related to the Market | Leave a comment

Investors blamed for bubble in housing

LAS VEGAS – Dec. 13, 2011 – A new federal report shows that speculative real estate investors played a larger role than originally thought in driving the housing bubble that led to record foreclosures and sent economies plummeting in Nevada, California, Arizona, Florida and other states.

Researchers with the Federal Reserve Bank of New York found that investors who used low-downpayment, subprime credit to purchase multiple residential properties helped inflate home prices and are largely to blame for the recession. The researchers said their findings focused on an “undocumented” dimension of the housing market crisis that had been previously overlooked as officials focused on how to contain the financial crisis, not what caused it.

More than a third of all U.S. home mortgages granted in 2006 went to people who already owned at least one house, according to the report. In Arizona, California, Florida and Nevada, where average home prices more than doubled from 2000 to 2006, investors made up nearly half of all mortgage-backed purchases during the housing bubble. Buyers owning three or more properties represented the fastest-growing segment of homeowners during that time.

“This may have allowed the bubble to inflate further, which caused millions of owner-occupants to pay more if they wanted to buy a home for their family,” the researchers noted.

Investors defaulted in large numbers after home values began to drop in 2006. They accounted for more than 25 percent of seriously delinquent mortgage balances nationwide, and more than a third in Arizona, California, Florida and Nevada from 2007 to 2009.

As a result, millions of homeowners saw their home values decline so that they were worth less than the original purchase price. Foreclosures skyrocketed. Residential construction also languished, putting hundreds of construction workers in the hardest-hit states out of work.

In Nevada, which has the highest foreclosure rate in the United States, the housing market remains weak. Paul Bell of the Greater Las Vegas Association of Realtors said the market has shifted so that cash investors are helping Las Vegas recover by buying multiple vacant homes, fixing them up and selling them. “If we did not have the serious investors in the market . . . we would have many neighborhoods in a very run-down condition,” he said.
AP Logo Copyright © 2011 The Associated Press, Cristina Silva.

December 28, 2011 Posted by | News related to Short Sales and Foreclosures, News related to the Market | Leave a comment

What went wrong with mortgage aid?

WASHINGTON – Dec. 12, 2011 – Steven and Lisa Maultsby lost their Mississippi home to foreclosure this year. At the time, they thought they were being reviewed for a loan modification through the U.S. government’s foreclosure-prevention program. A Realtor knocking on their door to tell them to vacate told them otherwise.

“I’m bitter,” says Steven Maultsby, 51, who works with undersea robots in the oil industry. “We did everything they told us to do.”

The Maultsbys are angry not only at their mortgage company, but also at the government, and they’re two voices among a discontented chorus.

The Obama administration’s initial foreclosure-prevention programs, launched in early 2009, were intended to help 7 million to 9 million people. So far, they’ve aided about 2 million, and not all of those are out of foreclosure danger.

Programs begun later have also faltered. One intended to help at least 500,000 has helped just a few hundred a year after its launch. Another initiative to extend $1 billion to help the jobless or underemployed avoid foreclosure ended in September, obligating less than half of its funds. The unused money went back to the U.S. Treasury.

As of Nov. 30, the government had spent just $2.8 billion of the $46 billion war chest it had in 2009 to devote to the housing crisis, the Treasury Department says. More has been committed, but only $13 billion will ultimately be spent, the non-partisan Congressional Budget Office estimated in March.

Meanwhile, 2.5 million homes have been lost to foreclosure since 2009, an additional 4 million are in the foreclosure process or seriously delinquent, and home prices are still falling in much of the U.S., shrinking household wealth for millions of Americans.

“Every program has fallen far short of goals. I can’t think of one that’s been largely successful,” says John Dodds, director of the Philadelphia Unemployment Project, a non-profit that’s been involved in foreclosure prevention for decades.

The administration’s programs were hampered by design flaws, their reliance on a mortgage industry overwhelmed by the fallout from a historic collapse in home prices, and a brutal extended housing downturn. Nor could they always overcome the conflicting interests of borrowers with too much debt, mortgage investors unwilling to surrender profits and mortgage servicers with sometimes greater financial incentives to foreclose on loans than to permanently modify them, say housing and government policy analysts, consumer advocates and former administration officials.

Critics also say the administration failed to entice banks and mortgage-finance giants Freddie Mac and Fannie Mae to take bolder steps to address the crisis even though the institutions received billions in government bailout funds.

“There was nowhere near the effort to help Main Street as there was to help the banks,” says former senator Ted Kaufman, D-Del., who chaired a congressional oversight panel that oversaw $475 billion in Troubled Asset Relief Program (TARP) funds. Most of that went to banks and the auto industry, but $46 billion in TARP money also funded foreclosure-prevention efforts.

Administration officials defend their response. They say the scope of the problem was unprecedented – and so were their actions. Federal programs prevented many foreclosures even if they didn’t help as many people as expected, officials say. They say the administration’s efforts will save homeowners billions in mortgage costs.

They also say the initiatives helped millions of other homeowners by driving service improvements in the mortgage industry and preventing an even worse collapse in home prices. Since the peak of the housing market in 2006, $3 trillion in home equity has been lost, researcher LPS Applied Analytics estimates.

“It’s too easy to underestimate the scale and complexity of these issues,” Shaun Donovan, secretary of Housing and Urban Development, said in a recent interview, while acknowledging that some administration programs “haven’t reached as many people as we originally targeted.”

Those shortfalls are most evident in the:

Home Affordable Modification Program (HAMP). Through October, the biggest foreclosure-prevention effort has resulted in 883,076 homeowners getting permanent loan modifications that made their loans more affordable and improved their ability to avoid foreclosure.

But HAMP was targeted to help 3 million to 4 million homeowners, President Obama said when he announced it in 2009. When it expires next December, it will have prevented fewer than 800,000 foreclosures, Kaufman’s congressional oversight panel estimated in December 2010.

HAMP “has been a failure,” Neil Barofsky, the former special inspector general for TARP, told a congressional committee in October.

Home Affordable Refinance Program (HARP). Through September, it’s helped 928,570 homeowners get lower-interest loans even though they lacked the amount of equity usually needed for a new loan.

HARP was intended to help 4 million to 5 million homeowners. While it was recently overhauled to encourage more refinancings, federal officials now say it will help fewer than 2 million borrowers by the end of 2013, when it expires.

So far, those getting HARP refis also tend to be people who aren’t deeply underwater – those who owe more on their homes than they’re worth. HARP refis have gone largely to homeowners with some equity or who were only slightly underwater, government data shows. It’s unclear whether the recent revamping will significantly change that, says Alan White, law professor and mortgage lending expert at the Valparaiso University School of Law.

More than 11 million homeowners – more than a fifth of homeowners with mortgages – are underwater, says market researcher CoreLogic. Many are unable to take advantage of today’s historically low interest rates and wring some relief from the ravages of the recession and weak economic recovery.

Rep. Dennis Cardoza, D-Calif., whose district encompasses Stockton, one of the nation’s worst foreclosure hot spots, says more needs to be done and that the changes to HARP are “too little, too late.”

Federal Housing Administration Short Refinance program. Intended to help 500,000 to 1.5 million homeowners refinance into loans with a lower interest rate, the FHA program did fewer than 400 deals through September, a year after the effort’s launch, government data show.

The program requires mortgage owners to forgive at least 10 percentage of a borrower’s unpaid principal before that loan can be refinanced into an FHA loan at a lower interest rate.

But mortgage owners have been reluctant to forgive principal, fearing that doing so for some would create a “moral hazard,” leading other borrowers to default to get help, says James Parrott, a senior adviser to the White House’s National Economic Council.

“The moral hazard concern was stronger than we realized,” Parrott says.

One big bank says it warned of the program’s limitations.

Bank of America, which services 12 million mortgages, gave federal officials data showing the program would benefit only 10,000 to 15,000 customers because of its design and the degree of support from investors who owned loans, says spokesman Dan Frahm.

Almost 1 million modifications

Administration officials say the programs’ statistics alone don’t fully reflect what’s been accomplished. “You have to look at the ripple effect,” Donovan says.

HAMP, which most often lowers mortgage payments through interest rate reductions, is approaching 1 million permanent loan modifications.

That is “not a negligible sum,” Parrott says.

HAMP also “significantly changed the market,” says Michael Barr, former assistant secretary at Treasury who worked on mortgage issues while in the Obama administration.

Before HAMP, mortgage servicers had no standard approach to modify loans. HAMP created one and streamlined the process, says Barr, who now teaches at the University of Michigan Law School.

Since HAMP’s launch, lenders have independently offered more than 2.5 million loan modifications outside of HAMP, staving off foreclosures for many.

“The overall impact of the (HAMP) program has gone unnoticed,” says Teri Schrettenbrunner, senior vice president of communications for Wells Fargo Home Mortgage.

HAMP was announced just weeks after Obama took office and at a time when home prices had fallen for 30 months in a row. Given the short time the administration took to launch HAMP and HARP, “We knew they wouldn’t be perfect. We knew they’d be as good as they could be given the time we had,” Barr says.

He says a prime reason that government programs haven’t reached more people is that mortgage servicers “were really bad at doing their jobs.” Servicers collect home loan payments for investor-owners. Big banks, such as Bank of America, Wells Fargo and JPMorgan Chase, are among the largest ones.

The servicers lacked adequate processes and enough employees to meet the crush of distressed borrowers, Barr says. They took too long to beef up staff. They couldn’t do “basic blocking and tackling” in communicating with borrowers, he says.

The Government Accountability Office documented problems when it surveyed housing counselors who work with borrowers seeking HAMP modifications. Almost 60 percent complained that servicers lost documents, 54 percent said trial modifications took too long, and 42 percent said borrowers felt that they were wrongly denied modifications, according to the GAO’s report in March.

The Maultsbys weren’t the only ones who lost a house to foreclosure while thinking help was on the way. Others did, too, said Treasury official Darius Kingsley in congressional testimony in October. He called such situations egregious.

The administration casts much of the blame on the industry, but others blame the government.

Barofsky says Treasury had to have known that servicers were “totally unequipped” to handle HAMP when it launched. Still, it rushed out a “poorly designed program,” he says.

Servicers say changing program guidelines made it tough to implement the government programs. In a three-month period, Treasury made 100 changes to HAMP, making it “physically impossible” for servicers to keep up, said Barbara Desoer, president of Bank of America Home Loans, in a recent speech to community leaders in San Francisco.

HAMP provides financial incentives – generally about $4,000 a loan – to servicers to modify loans. The goal is to make it more economical for servicers to modify a loan than to foreclose.

But the incentives weren’t big enough to draw broader servicer participation, says Jared Bernstein, former economic policy adviser to Vice President Biden.

What’s more, the government made HAMP a voluntary program for servicers, then failed to make sure that participating servicers followed HAMP’s rules, consumer advocates say.

HAMP ran for two years before financial incentives were withheld from any noncompliant servicer, even though abuses were “widespread,” Barofsky says.

“There’s been no enforcement or accountability,” says Diane Thompson of the National Consumer Law Center.

The $1 billion Emergency Homeowner Loan Program was open to homeowners in 32 states who were ineligible for aid from a $7.6 billion fund for homeowners in 18 states hardest hit by the recession and falling home prices.

HUD took too long to launch the program, which didn’t leave enough time to get applicants through an onerous application process, consumer advocates say. Instead of helping 30,000 homeowners as first intended, the program is on track to help fewer than 12,000, HUD’s preliminary data show.

That “is an absolute disgrace,” says Ira Rheingold, executive director of the National Association of Consumer Advocates.

HUD officials say it took time to identify contractors to run the program, set up fiscal controls and ensure the program was run fairly.

“We, too, are disappointed,” Carol Galante, a senior HUD housing official, testified at a congressional hearing in October.

More but smaller plans to come

New efforts are underway, but none appear to have the scope of previous plans.

State attorneys general and federal officials are negotiating a multibillion-dollar settlement with major mortgage servicers to help more homeowners. If a deal is struck, it will include principal forgiveness on more home loans, Donovan says. That may show loan owners that forgiving principal really does lead to fewer defaults, Rheingold says, and encourage more of it.

Most of the $7.6 billion in Hardest Hit Funds, too, have yet to reach the market. States have through 2017 to use those funds.

The Treasury Department also says there are still 1 million homeowners who could be eligible for HAMP.

“We’re going to keep fighting to fix this housing market,” Donovan says.

© Copyright 2011 USA TODAY, a division of Gannett Co. Inc.

December 28, 2011 Posted by | News related to Short Sales and Foreclosures | Leave a comment

Fixed mortgage rates hover near lows for 6th week

WASHINGTON – Dec. 9, 2011 – The average rate on the 30-year fixed mortgage hovered above its record low for a sixth straight week. But the super-low rates aren’t providing a lift to the struggling housing market.

Freddie Mac said Thursday the rate on the 30-year home loan ticked down to 3.99 percent from 4 percent the previous week. It dropped to a record low of 3.94 nine weeks ago, according to the National Bureau of Economic Research.

The average rate on the 15-year fixed mortgage was edged down to 3.27 percent from 3.30 percent. Nine weeks ago, it too hit a record low of 3.26 percent.

Rates have been below 5 percent for all but two weeks this year. Yet this year could be the worst for home sales in 14 years.

Mortgage rates tend to follow the yield on 10-year Treasury note. The yield rose this week after investors, encouraged by central banks’ joint effort to ease lending standards, shifted their money into stocks. Treasury yields rise when buying activity decreases.

Low mortgage rates haven’t translated into more home sales. Sales of previously occupied homes are just slightly ahead of last year’s dismal sales figures – the worst in 13 years. New-home sales appear headed to their worst year on records that date back half a century.

Mortgage applications rose nearly 13 percent last week but that’s up from extremely low levels, according to the Mortgage Bankers Association.

High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many Americans don’t want to sink money into a home that could lose value over the next three to four years.

The low rates have caused a modest boom in refinancing last week. But since the average rate on the 30-year fixed loan has been below 5 percent for all but two weeks in the past year, most homeowners who can afford to refinance already have.

Some lenders say they are seeing an increase in applications through the Obama administration’s refinancing program, which was broadened in October to allow up to 1 million more homeowners lower their monthly mortgage payments. But the Mortgage Bankers Association said such government-assisted loans account for only a small portion of refinancing applications.

The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for the 30-year loan was unchanged at 0.7 and the fee on the 15-year fixed mortgage was unchanged at 0.8.

The average rate on the five-year adjustable loan rose to 2.93 percent from 2.90 percent. The average rate on the one-year adjustable loan also increased slightly to 2.80 percent from 2.78 percent.

The average fee on the five-year loan fell to 0.5 from 0.6 and the fee on the one-year adjustable loan was unchanged at 0.6.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.
AP Logo Copyright 2011 The Associated Press, Derek Kravitz (AP Real Estate Writer). All rights reserved.

December 28, 2011 Posted by | News related to Buyers, News related to Financing | Leave a comment

High court to mull role of bad papers in foreclosures

GREENACRES, Fla. – Dec. 9, 2011 – The Florida Supreme Court said Thursday it will rule on an already settled Palm Beach County foreclosure case because the opinion could impact the “mortgage foreclosure crisis throughout this state.”

The court was divided on the unusual decision to hear the settled case, which involves allegedly fraudulent bank documents.

But four of the seven justices said the legal question posed transcends the individual Greenacres homeowner and is one that needs to be answered for lower courts and litigants.

At issue is whether the bank can still be held accountable for fraudulent documents if it voluntarily dismisses the foreclosure case when challenged.

“This is wonderful and great news for homeowners in Florida,” said Royal Palm Beach-based attorney Tom Ice, who represented homeowner Roman Pino against the Bank of New York Mellon. “It’s all about whether a party’s right to dismiss trumps the court’s right to protect its own integrity.”

Ice said he couldn’t comment on the settlement his client reached with the bank or whether it could be affected by the Supreme Court’s decision.

The bank filed for foreclosure against Pino in 2008, saying it was the owner of the mortgage by way of an assignment from another lender.

A bank representative in New York said he didn’t have enough information about the case or the Supreme Court action on Thursday to immediately comment.

When Ice challenged the allegedly backdated assignment, the bank voluntarily dropped the case.

“We wanted to bring the court’s attention to the fact that the documents were fraudulent,” said Ice, who asked for the dismissal to be reversed.

It wasn’t, and Ice appealed to the 4th District Court of Appeal. Although the appeals court sided with the lower court and ruled in favor of the bank, it asked the Florida Supreme Court to consider the case.

“We conclude that this is a question of great public importance as many, many mortgages foreclosures appear tainted with suspect documents,” the appeals court wrote.

In a yearlong period beginning July 1, 2010, more than 104,000 foreclosure cases were dismissed from Florida’s courts, according to the Office of the State Courts Administrator.

Foreclosure defense attorneys believe many of the dismissals were made because banks didn’t have the proper paperwork to proceed.

Although the cases can be refiled, homeowner advocates say banks should still be held accountable for the original documents.

“Any time banks get in trouble, they can easily make cases go away with a large settlement,” Ice said. There are still an estimated 371,000 foreclosure cases backlogged in Florida courts.

In dissent, Florida Supreme Court Chief Justice Charles Canady wrote that the court shouldn’t force the continuance of a case that both parties have settled.

“The court is requiring that the parties litigate a case that has been settled, is no longer in controversy,” Canady wrote. “They should not be dragooned into litigating a matter that is no longer in controversy between them simply because this court determines that an issue needs to be decided.”

© 2011 The Palm Beach Post (West Palm Beach, Fla.), Kimberly Miller. Distributed by MCT Information Services

December 28, 2011 Posted by | News related to Short Sales and Foreclosures | Leave a comment

2012 mortgage delinquencies seen dropping sharply

NEW YORK – Dec. 8, 2011 – If the U.S. economy does not suffer more setbacks, the rate of mortgage holders behind on their payments should decline significantly by the end of next year, according to credit reporting agency TransUnion.

Mortgage delinquency rates – the ratio of borrowers 60 or more days behind on their payments – will likely tick up to about 6 percent through the first three months of 2012, TransUnion said in its annual delinquency forecast issued Wednesday.

But by the end of next year, it could drop to 5 percent, TransUnion said. That’s well off the peak of 6.89 percent seen in the fourth quarter of 2009.

Chicago-based TransUnion’s forecast takes into consideration several factors, including expectations that consumer confidence and the economy will improve next year.

Also, banks are expected to get a good portion of pending foreclosures off their books next year, said Charlie Wise, TransUnion director of research and consulting.

Banks are still working through a backlog of foreclosures created by issues including the robo-signing scandal, in which bank officials signed mortgage documents without verifying the information they contained. The issue surfaced last year in areas with large numbers of foreclosures, and banks had to backtrack and review foreclosures across the country to make sure their paperwork was in order.

That slowed down the process, Wise said, and left mortgages listed as delinquent for longer than they otherwise might have been, temporarily boosting delinquency rates.

Economic uncertainty has also contributed. In the third quarter of 2011, mortgage delinquencies saw their first uptick in six quarters, largely fueled by concerns over the economy as lawmakers were debating the U.S. debt ceiling and Europe’s debt crisis was unfolding.

Helping to cut the mortgage delinquency rate are a slowly improving job market and a stabilizing housing market.

While the drop will be significant, the rate will remain well above the pre-recession average of 1.5 to 2 percent.

“We have a long way to go to get back,” said Steven Chaouki, a TransUnion vice president.

The situation with credit cards is much stronger. Card delinquencies – payments late by 90 days or more – dropped to their lowest levels in 17 years during the spring, then saw a slight increase in the third quarter, but still remained near historic lows.

TransUnion expects further edging up in the current quarter and the first three months of 2012, but then late payments on bank-issued cards should fall again.

One reason card delinquencies are expected to remain so low is that credit is much tighter than it was before the recession. TransUnion data showed that nearly a quarter million new card accounts were opened by people with less-than-stellar credit scores during the third quarter, which contributed to the slight increase in late payments during the summer months. But banks are mainly still going after consumers with top-tier credit histories.

“Lenders are willing to lend, but are still pursuing the best customers,” said Chaouki.

TransUnion predicts by the end of 2012, just 0.69 percent of cards will be considered delinquent, down from a predicted 0.74 percent in the current quarter. The rate has wobbled in the last few years, peaking at 1.36 percent in the fourth quarter of 2007, then dropping and bouncing back up to 1.32 percent in the first quarter of 2009.

The figures reflect a shift in which debt payments consumers consider most important, largely because home prices fell so far.

Chaouki said the conventional wisdom before the Great Recession was that homeowners would put their mortgages first because of concern about their reputation and the emotional attachment involved in owning a home. But what has become clear as housing prices have continued to fall, he said, is that bill payment is far more practical.

“People were protecting their home equity,” he said. Credit cards were relatively easy to come by in years past, he said, so when money got tight, it was an easy decision to default on cards and maintain house payments. Now it’s common to owe more on a mortgage than a house is actually worth, but credit cards are harder to get. So consumers are being practical and protecting what is more valuable to them.

He said he expects the equation will shift again if housing prices rebound and people go back to building home equity.
AP LogoCopyright © 2011 The Associated Press, Eileen A.J. Connelly, AP personal finance writer. All rights reserved.

December 28, 2011 Posted by | News related to Financing, News related to Short Sales and Foreclosures | Leave a comment

Bankrate: Jumbo mortgage rates hit new record low

NEW YORK – Dec. 8, 2011 – The jumbo 30-year fixed mortgage rate fell to a new record low of 4.68 percent, according to’s weekly national survey. The average jumbo 30-year fixed mortgage has an average of 0.4 discount and origination points.

According to Bankrate’s weekly survey, the average conforming 30-year fixed mortgage inched lower to 4.24 percent while the 15-year fixed mortgage held steady at 3.48 percent. Adjustable rate mortgages were mostly lower, with the average 5-year ARM sliding to 3.18 percent and the 10-year ARM inching down to 3.8 percent.

Mortgage rates are low, but based on the ultra-low levels of benchmark interest rates such as 10-year Treasury notes, mortgage rates could be even lower.

Since August, the European debt crisis has pushed the spread between risk-free U.S. government bonds and those of other bonds, such as mortgage-backed bonds, to the highest levels since the spring of 2009. At that time, financial tensions were at a fever pitch, particularly surrounding the health of the U.S. banking system. This time, it’s Europe’s banking system in the crosshairs, but the result is much the same – a higher-than-typical cost of borrowing when compared to the rock-bottom government rates.

Bankrate’s national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

© 2011 Florida Realtors®

December 28, 2011 Posted by | News related to Buyers, News related to Financing | Leave a comment

Realtors discuss outlook for Fla.’s real estate markets

ORLANDO, Fla. – Dec. 8, 2011 – An improving state economy, population growth and stronger demand are creating opportunities in the state’s residential, commercial and land markets, according to three experienced Realtors in Florida.

“To succeed in 2012, you need to think about how trends in the national economy tie into your local market,” said Clark Toole, president and chief operations officer (COO) of Coldwell Banker Residential Real Estate Inc. in Florida. Speaking on the state’s residential market, Toole said, “Florida is such a diverse state, both geographically and culturally, that you really need to do your homework.”

Toole was one of three expert practitioners who spoke at Florida Realtors® 2012 Real Estate and Economic Forecast Conference in Orlando earlier this week.

Cynthia Shelton, 2009 president of Florida Realtors and a director at Colliers International in Orlando, discussed the commercial market, and Dean Saunders, accredited land consultant and broker-owner of Coldwell Banker Commercial Saunders Real Estate in Lakeland, covered the market for land and undeveloped property.

Toole said that key trends affecting the Florida residential market include strong demand from international buyers, a growing population – 348 people a day net growth in 2010-11 – and an upswing in employment.

Reviewing Florida’s housing market, Toole said that inventories of for-sale homes have fallen to 7.4 months on a statewide average, and just 5.4 months for listings priced under $250,000. He added that lender-owned properties (REOs or “real estate owned”) now constitute about 6 percent of inventory, but 40 percent of sales. Short sales, where the market value of the home is below the mortgage loan value, make up about 31 percent of current inventory and 18 percent of sales.

Toole added that property management and leasing will be an increasingly important segment of the market in 2012, reaching $11 billion or more, due to the large numbers of investor buyers and “dark” multifamily buildings with few owners.

Turning to the state’s commercial markets, Shelton said investors are increasingly interested in buying office, retail and industrial properties. Vacancy rates, while high, have stabilized, along with rental rates. “Core assets (essential to businesses) are selling and lenders – including the life insurance companies – are lending again,” she said.

Shelton added that lenders are getting more realistic regarding the pricing needed to dispose of their distressed commercial properties. “There are great opportunities for Realtors to find owner-users with the funds to purchase buildings they have been renting,” she said.

Looking ahead to 2012, Shelton said she expects more tenants to come into the Florida commercial markets, helping to stabilize conditions. “I think Florida has bright days ahead, as more people seek to own investment real estate in our market.”

Saunders said the state’s land market is also highly diverse, ranging from cropland, pastures and timberland to transitional and infill land located in suburban and urban locations. “Land has both an investment angle and a romantic angle,” he said. “You can own it, walk on it and enjoy it.”

Overall, Florida has about 34.7 million acres of land, with only 3 million acres now developed, he said. Local, state and federal governments own about 10 million acres.

“As real estate professionals, you have to understand how the various types of land are affected by global trends and local market conditions,” Saunders said. “For example, the price of a citrus grove is closely tied to the commodity market, and a lot of investors are now active in that sector on a national level.” However, Florida has seen a 34 percent decrease in its citrus acreage in the last six years, he added.

For the next few years, Saunders expects little demand for transitional land on the edge of the state’s cities. “There is a lot of existing commercial space that needs to be absorbed first,” he said. “There is pent-up demand for residential lots, but when that demand will be released is a big question.”

In the 2012 land market, Saunders said the biggest opportunities are likely to occur in the agricultural sector, as institutional investors purchase productive cropland to diversify their portfolios. “Take a look at alternative energy producers, as well,” he added. “They may be interested in buying acreage to support their biomass energy facilities.”

© 2011 Florida Realtors®

December 28, 2011 Posted by | News related to the Market | Leave a comment

Prices mostly stabilize: Why aren’t we talking about it?

NEW YORK – Dec. 7, 2011 – An improving job picture and prices stabilizing for non-distressed homes are all signs that point to a housing recovery taking shape, Barclays Capital analyst Stephen Kim told HousingWire.

“In the absence of government homebuyer incentives, prices for non-distressed home sales have stabilized for almost a year,” Kim said. “This is the most important trend in the housing industry right now, and we are amazed at how little attention it has been getting from the media and the street. This stability on the part of non-distressed prices has occurred despite a very high share of distressed activity and continued declines in overall prices.”

The key to when the housing recovery will largely take off “depends primarily on when first-time buyers decide it is safe to buy a house,” Kim told HousingWire.

Source: “Barclays Analyst Sees Housing Rebound Coming in 2012,” HousingWire (Dec. 5, 2011)

December 28, 2011 Posted by | News related to the Market | Leave a comment