Sarasota Real Estate Market News

Typo involving 80¢ nearly cost man his home

LARGO, Fla. – Jan. 17, 2012 – When Tom Mudie was approved for a mortgage modification program, he thought his foreclosure troubles were over.

Bank of America lowered his monthly payment by nearly $200. All he had to do was make the new payments – on time for three months – and the new amount would be made permanent.

But a simple error – hitting a “0” on his telephone keypad instead of an “8” – threatened not only to cancel the savings but also to cost him his home.

“I want to keep my home,” Mudie said. “And to lose it over 80 cents is crazy.”

Mudie paid his second trial mortgage payment by phone. The keypad mistake meant that instead of paying $615.82, he paid $615.02. He was three quarters and a nickel short.

The mistake meant that, in the precise calculus of the computer, Mudie broke his modification contract. He was kicked out of the program.

Banking and government officials say his story reflects a broader trend of simple mistakes with consequences that are all out of proportion, hurting homeowners’ modification chances.

When he realized what happened, Mudie said, he contacted a customer service representative who told him to send a check for the 80 cents. That would clear up the problem, he said he was told.

“I did everything they told me to,” Mudie said. “I wrote the check for 80 cents, as crazy as that sounds. I included it with my next payment. They cashed it.”

But the next month, Bank of America sent back the 80 cents – plus the next payment he had made. Then a letter from the bank arrived bearing bad news:

“Your loan is not eligible for the Fannie Mae modification program because you did not make all the required trial period plan payments by the end of the trial period.”

It goes on to say the foreclosure is back on track. Then other alarming paperwork arrived.

“This home transition guide is through the United Way,” read one pamphlet.

“When you start seeing that,” Mudie said, “you start thinking charities and stuff. So I knew that I am in trouble.”

Bank of America spokeswoman Jumana Bauwens said it all boils down to the computer glitch. Just like Mudie, she said, the bank made an error when it booted him from the program.

Bauwens took a closer look at Mudie’s account and said the bank is in the process of crediting him for the payment he made. She said that because the problem partly was caused by the bank, he’s back on track with the plan for lower monthly payments.

“He’s in the process of getting a permanent modification,” Bauwens said. “The paperwork is not finalized, but that 80 cent error is not going to create any additional issues for him.”

Though Bank of America services Mudie’s loan, government-backed Fannie Mae actually owns it.

Andrew Wilson, spokesman for Fannie Mae, said he has heard of simple mistakes getting out of hand before. Computers, he said, see things in black and white. Homeowners should be able to get beyond them and fix the problem.

Anyone having difficulty getting help from a servicer can call Fannie Mae directly if they are among the many with a Fannie Mae loan.

Homeowners can reach Fannie Mae’s Tampa Mortgage Help Center at (866) 442-8554.

As for Mudie, he’s happy for another chance to keep his home.

But from now on, he said, he’ll pay by mail.

Copyright © 2012 the Tampa Tribune, Tampa, Fla. Distributed by MCT Information Services.

February 6, 2012 Posted by | News related to Short Sales and Foreclosures | Leave a comment

Housing outlook is more upbeat

NEW YORK – Jan. 17, 2012 – Optimism is building that the housing industry is nearing a bottom – finally.

Home sales and homebuilding are forecast to rise this year after sliding steeply the past five years in housing’s worst downturn since the Great Depression.

Recovery is expected to be slow, and home prices are widely expected to fall this year. But investors are betting on the start of an upturn, bidding up home builder stocks and causing them to outperform the broader stock market.

Chief executives are more positive. JPMorgan Chase’s Jamie Dimon said last week that housing is near its bottom but could stay there a year. Stuart Miller, CEO of home builder Lennar, said the market has started to stabilize because of low prices and record-low interest rates.

Market researcher RBC Capital Markets has also turned from a “bearish” view on housing to saying that 2012 “will mark a step in the right direction.”

Many economists expect home prices to fall more this year because of foreclosures and other properties sold at very low prices.

As foreclosures pick up this year, “prices will drop,” says Stan Humphries, Zillow chief economist. He says home prices won’t bottom until later in 2012 or next year.

On average, prices have fallen by about a third since 2006.

“This year will feel a lot better to builders, investors and real estate agents than to consumers,” says Jed Kolko, economist for real estate website Trulia.

Housing’s outlook is brightening with signs of a better economy. Last month, U.S. employers added 200,000 jobs, and the unemployment rate fell to 8.5 percent, lowest in nearly three years.

While an economic shock could derail progress, “there’s now more evidence of improvement in the economy, and housing will follow the economy,” says David Crowe, chief economist at the National Association of Home Builders. More improvement is expected for:

Sales. Existing home sales will rise 12 percent this year after a 2 percent increase last year, and new home sales, coming off a horrid year, will jump 74 percent this year, Moody’s Analytics predicts.

November’s existing home sales hit their highest mark in 10 months, and new home sales were the year’s second best, IHS Global Insight says.

Construction. Single-family housing starts will rise 37 percent this year, Moody’s predicts, after falling 9 percent last year.

Home builder stocks are on a run. The S&P 1500 homebuilding index is up 38 percent since mid-October, vs. 7 percent for the S&P 500.

© Copyright 2012 USA TODAY, a division of Gannett Co. Inc., Julie Schmit.

February 6, 2012 Posted by | News related to the Market | Leave a comment

Avoid foreclosure with help from HUD-approved agencies

WASHINGTON – Jan. 17, 2012 – In recent years, many people have turned to individual agencies, housing counselors and lenders to avoid foreclosure – but many found themselves paying scammers who took money and failed to protect them.

In a new information campaign, the Department of Housing and Urban Development (HUD) is telling homeowners that anyone at risk of foreclosure can receive free counseling from HUD’s nationwide network of approved counseling agencies.

Available services

Although each agency offers specific services, each generally offers the following types of help:

• General counseling in matters related to housing
• An evaluation of a homeowner’s specific situation
• Counseling on ways to avoid foreclosure
• Help with refinancing through HUD’s various programs or with lender negotiations

HUD-approved agencies cannot charge for their foreclosure counseling services. However, they can charge a reasonable fee for other services, such as general housing education, pre- and post-sale counseling, and other services.

Preparing for a first meeting

A homeowner does not have to be in the foreclosure process to seek counseling. In fact, HUD advises anyone who thinks he might have problems in the future to contact a mortgage counselor sooner rather than later. Before a first meeting, HUD suggests having the following information ready:

• Household monthly income and expenses
• Current monthly mortgage payment amount
• Latest mortgage account statement
• Any relevant communication with your lender regarding late mortgage payments

“It is also a good idea to have a sense of what you want to accomplish with the help of the approved counseling agency – keeping your home, selling it, refinancing, etc.,” HUD says in a release.

Working with a non-approved agency

To avoid a scam, HUD advises homeowners to take the following steps if working with an agency no approved by HUD:

• Avoid paying for foreclosure counseling services. HUD-approved agencies provide these services at no cost.
• Resist any tactics that pressure you into signing documents without enough time to go over them carefully.
• Do not sign over the deed of your house to any other person or organization.
• Make your mortgage payments only to your lender or an institution approved by your lender.

To find a HUD-approved agency in Florida, visit HUD’s website.

© 2012 Florida Realtors®

February 6, 2012 Posted by | News related to Sellers, News related to Short Sales and Foreclosures | Leave a comment

Program educates public on foreclosure scams

WASHINGTON – Jan. 16, 2012 – According to Loan Modification Scam Alert, a program backed by NeighborWorks America and supported by the U.S. Congress, there is a new foreclosure filing every 15 seconds in America.

NeighborWorks is working with 235 community-based affiliates to educate and protect homeowners from unethical practices. The program says it has three goals: First, alert homeowners about scams. Second, help them spot a scam before it’s too late. Third, encourage them to report scammers to the authorities. The campaign hopes to educate owners at higher risk of scams by telling real-life scam stories in fliers, postcards, door hangers, e-cards, posters, print advertising, local PSAs, events, word of mouth and social media.

Three signs of a scam

According to Loan Modification Scam Alert, foreclosure scams generally have three possible red flags:
• The company asks for a fee in advance.
• The offer comes with a guarantee that a foreclosure can be stopped or a loan modified.
• The homeowner is told to stop paying the mortgage and, in some cases, told to pay the foreclosure relief company instead.

Since the U.S. has a new foreclosure filing every 15 seconds – more than 6,100 per day –  and more than 4.5 million households at risk, scam artists see an opportunity, and Florida remains the top state for foreclosure-related scams.

“Loan modification scams are proliferating at a rapid pace,” the program claims on its website. “Every day, more homeowners are falling prey to the slick advertising and sales pitches that guarantee to keep them in their homes. Many scam artists are openly taking advantage of people in difficult circumstances – online, on the telephone, and sometimes audaciously knocking on doors.”

For more information, to read stories of harmed homeowners or to report a scam, visit the Loan Modification Scam Alert website. (Link underlined to: http://loanscamalert.org/)

© 2012 Florida Realtors®

February 6, 2012 Posted by | News related to Short Sales and Foreclosures | Leave a comment

Foreign buyers see big bargains in U.S. real estate

MIAMI – Jan. 16, 2012 – Foreign investors are finding plenty of deals in the U.S. when it comes to real estate, and, as such, more international investors are flocking to key states to buy their piece of the American Dream.

Mexico is the top country of origin for foreign buyers purchasing U.S. homes, according to a recent study by Credit Sesame, which used National Association of Realtors® data for its findings.

“In this period of tremendous uncertainly globally, real estate here is a safe haven,” Susan Wachter, professor of real estate and finance at The University of Pennsylvania, told MSNBC.com.

The top destinations of foreign investors for U.S. real estate purchases are:

1. Florida: Thirty-one percent of all home purchases are made by foreign buyers, with most coming from Cuba, Haiti and Colombia.

2. California: Twelve percent of all home purchases, with most coming from Mexico, the Philippines, China, India and Vietnam.

3. Texas: Nine percent of all home purchases, with most coming from Mexico, India, Vietnam, China and the Philippines.

Source: “Housing more affordable than ever … for foreign investors,” MSNBC.com (Jan. 13, 2012)

February 6, 2012 Posted by | News related to Buyers, News related to Investors, News related to Sellers, News related to the Market | Leave a comment

Fannie extends mortgage relief to unemployed

WASHINGTON – Jan. 13, 2012 – Fannie Mae says it will provide more mortgage aid to the unemployed, possibly extending the forbearance period up to a year for those who qualify.

Starting on March 1, Fannie Mae will require mortgage servicers to extend the forbearance relief to qualified unemployed borrowers for six months – without any approval needed from Fannie Mae. The government-sponsored enterprise also says special consideration will be made for some borrowers in suspending mortgage payments or reducing them for up to a 12-month period.

Fannie’s announcement follows on the heels of Freddie Mac’s announcement earlier this week about similar changes to its mortgage relief program for the unemployed. Freddie Mac announced it would begin offering a 12-month forbearance period to qualified unemployed borrowers starting on Feb. 1.

To qualify, mortgage servicers will determine if the “borrower has less than 12 months worth of mortgage payments in reserves and has monthly housing expenses above 31 percent of their incomes before extending a forbearance plan,” HousingWire reports.

During the third quarter of 2011, the GSEs issued more than 7,000 forbearance plans, according to the Federal Housing Finance Agency.

Source: “Fannie Mae Unveils new Forbearance Program for Unemployed,” HousingWire (Jan. 11, 2012)

February 6, 2012 Posted by | News related to Short Sales and Foreclosures | Leave a comment

Rate on 30-year mortgage drops to record 3.89%

WASHINGTON – Jan. 13, 2012 – Fixed mortgage rates fell once again to a record low, offering a great opportunity for those who can afford to buy or refinance homes. But few are able to take advantage of the historic rates.

Freddie Mac said Thursday the average rate on the 30-year fixed mortgage fell to 3.89 percent. That’s below the previous record of 3.91 percent reached three weeks ago.

Records for mortgage rates date back to the 1950s.

The average on the 15-year fixed mortgage ticked down to 3.16 percent. That’s down from a record 3.21 percent three weeks ago.

Mortgage rates are lower because they track the yield on the 10-year Treasury note, which fell below 2 percent. They could fall even lower this year if the Fed launches another round of bond purchases, as some economists expect.

Average fixed mortgage rates hovered around 4 percent at the end of 2011. Yet many Americans either can’t take advantage of the rates or have already done so. High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many don’t want to sink money into a home that they fear could lose value over the next few years.

Mortgage applications have fallen slightly on a seasonally adjusted basis over the past four weeks, according to the Mortgage Bankers Association.

Frank Nothaft, Freddie Mac’s chief economist, said that until hiring picks up and unemployment drops significantly, the impact of lower mortgage rates will remain muted.

Previously occupied homes are selling just slightly ahead of 2010’s dismal pace. New-home sales in 2011 will likely be the worst year on records going back half a century.

Builders hope that the low rates could boost sales next year. Low mortgage rates were cited as a key reason the National Association of Home Builders survey of builder sentiment rose in December to its highest level in more than a year.

To calculate the average rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week. 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 fell to 0.7 from 0.8; the average on the 15-year fixed mortgage was unchanged at 0.8.

For the five-year adjustable loan, the average rate declined to 2.82 percent from 2.86 percent. The average on the one-year adjustable loan fell to 2.76 percent from 2.80 percent.

The average fee on the five-year adjustable loan rose was unchanged at 0.7; the average on the one-year adjustable-rate loan was unchanged at 0.6.
AP LogoCopyright © 2012 The Associated Press,

February 6, 2012 Posted by | News related to Financing | Leave a comment

U.S. foreclosure rate lowest since pre-recession

NEW YORK (AP) – Jan. 12, 2012 – About 1.9 million homes entered the foreclosure process in 2011, the lowest level since 2007 when the recession began, according to a report Thursday by the foreclosure listing firm RealtyTrac Inc.

The firm cautioned that the decline does not necessarily indicate that the housing market is getting better, as many foreclosures have been delayed due to confusion over documentation and legal issues involved in the process.

There have also been problems with the way some lenders were handling foreclosures. Specifically, signing off on home foreclosures without first verifying documents – a practice referred to as “robo-signing.” Many of the largest U.S. banks reacted by temporarily ceasing all foreclosures, re-filing previously filed foreclosure cases and revisiting pending cases to prevent errors.

“Foreclosures were in full delay mode in 2011, resulting in a dramatic drop in foreclosure activity for the year,” RealtyTrac CEO Brandon Moore said in a statement.

The listing firm anticipates that 2012’s foreclosure rate will be higher than last year’s, but will remain below the peak of 2010.

High unemployment, a sluggish housing market and falling home values remain major factors in homeowners falling behind on their mortgage payments. Many borrowers also have simply stopped paying their mortgage because they owe more on the mortgage than the home is worth.

RealtyTrac said that 2011’s foreclosure activity is 34 percent lower than 2010 and the lowest since 2007. The Great Recession began in December 2007 and ended in June 2009.

In 2011, Nevada, Arizona and California were among those with the most foreclosures. Other states among those with the highest foreclosure rates for the year were Georgia, Michigan, Florida, Illinois, Colorado and Idaho.

The company said that December’s foreclosure filings on 205,024 homes were the lowest monthly total since November 2007. The figure was also 20 percent below the prior-year period’s results.

In the fourth quarter, there were foreclosure filings for 586,133 homes in the U.S., down 27 percent from a year earlier.
AP LogoCopyright © 2012 The Associated Press.

February 6, 2012 Posted by | News related to Short Sales and Foreclosures, News related to the Market | Leave a comment

‘Strategic default’ poses ethical question

NEW YORK – Jan. 10, 2012 – Some homeowners who owe more on the mortgage than a home is currently worth are turning over the keys and walking away – a move known as “strategic default.”

The growing number of strategic defaults across the country is alarming, particularly since many of homeowners can still afford their mortgage payments but choose to walk away anyway.

In 2010, about 30 percent of mortgage defaults were from homeowners who could afford to make their payments – that’s up from 22 percent in 2009, according to a 2011 survey conducted by finance professors Paola Sapienza at Northwestern University and Luigi Zingales at the University of Chicago.

A recent study commissioned by the Mortgage Bankers Association likens the rise in strategic defaults to the spread of a disease. The longer the housing crisis goes on, the more other homeowners will be tempted to walk away, the study concludes. “As fundamentally social animals, humans consciously (and subconsciously) look to their peers when forming opinions, habits and behaviors,” according to the report.

Strategic default has come down to an ethical question for some homeowners.

“Guilt and morality are one side, and objective financial analysis are on the other side,” said David Martin, 68, who has considered walking away from a Seattle condo he owns with his wife because the condo is worth about $60,000 less than the balance on their mortgage. “They’re coming to two opposite conclusions. I wonder how many other people are struggling with the same question.” Martin and his wife have decided to stick it out, however, hoping for a rebound in housing prices in 2013 as they continue paying their mortgage.

But other homeowners weighing the question are not always reaching the same conclusion.

“It’s a looming problem that’s in the shadows,” Jason Kopcak, a mortgage trader at Cantor Fitzgerald, told MSNBC.com. “It’s very worrisome to mortgage lenders.”

Strategic defaulters who walk away from their property, however, may have more to worry about than the morality and ethics of their action. They’ll face a blemish to their credit score; and in some states, lenders may still be able to pursue them in court in what’s known as a “deficiency judgment” seeking a full repayment of the mortgage balance.

Source: “As Home Prices Fall, More Borrowers Walk Away,” MSNBC.com (Jan. 9. 2012)

February 6, 2012 Posted by | News related to Short Sales and Foreclosures | Leave a comment

Fewer listings may soften blow of new REOs

NEW YORK – Jan. 9, 2012 – Forecasting the real estate market can be a perilous task.

Case in point: In May, financial services provider Fiserv Inc. projected that prices of existing homes in Metro Orlando would fall 19 percent during 2011 – the biggest drop in the country. Analysts predicted the median home price would be $110,500 by the end of the year.

But as of November, the median was virtually unchanged from a year earlier at $130,000, according to Florida Realtors.

Two factors have mitigated the earlier projections of continued price declines in residential real estate: the gradual release of distressed properties onto the market by banks, and an unusually small inventory of homes listed for sale.

If those factors continue through 2012, they could further soften the potential effect on the market of the region’s “shadow inventory” of foreclosed and repossessed houses.

“The banks really have a lot to do with where the year ends up,” said Re/Max broker David Welch. “Looking back over the last few months, they haven’t been flooding us with REOs (“real estate owned,” or repossessed, properties). It’s more of a garden hose than a wave. … We still have a lot more to go through before we are done with the foreclosure situation in Orlando, but most of them are getting absorbed.”

Buffering the effect of those foreclosed properties as they hit the market is the manageable supply of houses listed for sale. The Orlando Regional Realtor Association started 2011 with about 15,000 listings in its core market – mainly Orange and Seminole counties – but ended November with about 10,000.

Orlando’s modern-day version of a traditional neighborhood, Baldwin Park, is a good example of this shrinking inventory: As of late December, it had 28 homes listed for sale, when a community of its size would ordinarily be expected to have about 200, Welch said.

Another factor that could continue improving the overall health of the market into the coming year is that banks have become more adept at processing short sales, which have become the predominant way of selling homes that are “underwater” – that is, worth less than their outstanding loans. In the recent past, only about 9 percent of pending short sales would close during a given month, but that has now edged up to 10.5 percent, Welch said.

Banks are also now more motivated to get through the short-sale process, Welch added: One bank recently mentioned in a short-sale approval letter that it would increase the real estate commission if a particular sale closed within 30 days.

Such mitigating factors could help stabilize prices this year, though they are not likely to boost them much in areas where more than half of all mortgaged homes are underwater, according to the real estate research firm Corelogic.

John Tuccillo, chief economist for Florida Realtors, expects a gradual increase in existing-home prices for Orlando and the rest of the state through 2012.

“For the state of Florida, I think you’ll see prices begin to move upward, but not by very much,” he said recently.

The large amount of distressed housing has established a price base that, so far, has remained stable; as a result, prices will increase only marginally. In the next year, Tuccillo’s trade group plans to release a new price index for existing homes that would cover all properties within the state, and the association hopes to track same-property sales, both residential and commercial, over a 17-year period.

In the new-home market, the next year is expected to see a continuation of the gradual increases in housing starts that the metro area recorded in 2011. Prime locations, those considered A- or B-level sites, have been holding their prices and even raising them slightly, said Anthony Crocco, director of the research firm Metrostudy Inc.’s North and Central Florida divisions.

“I don’t foresee a very strong growth forecast,” said Crocco, who doesn’t expect the number of starts this year to increase more than 10 percent. “I see it being a stable year from the standpoint of it being an election year.”

While town homes and condominiums have had it the worst of all residential sectors, multifamily products make sense right now in the more urban parts of Orange and Seminole counties, rather than in some of the suburban locations where they were built in the past.

The active-adult market has been doing well and should continue to do so well into the year, Crocco said. He cited The Villages, which straddles parts of Lake, Sumter and Marion counties, and has been adding 200 new homes a month. Other locales where home construction will likely do well this year include the Lake Nona area in southeast Orlando, downtown Orlando, and areas near the University of Central Florida in east Orange County.

“Because of what’s happening with the resale market, the more we look at it you can see that there’s not going to be a slowdown in ‘12 and maybe ‘13 in the REO process, and that’s going to continue to drag the market down,” Crocco said. “But it’s a necessary step for recovery.”

One trend emerging in the region – the development and redevelopment of apartment complexes – is likely to lead in the coming year to an oversupply, Crocco said.

“There probably will be some overbuilding because that’s the only thing that’s been able to get financed, and the occupancy numbers look good,” he said. “The market needs to be aware of the amount of multifamily coming in.”

Copyright © 2012 The Orlando Sentinel (Orlando, Fla.), Mary Shanklin, The Orlando Sentinel, Fla. Distributed by MCT Information Services.

February 6, 2012 Posted by | News related to Sellers, News related to Short Sales and Foreclosures, News related to the Market | Leave a comment