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CNN Money has a great article:
Home prices heading for triple-dip
NEW YORK (CNNMoney) -- The besieged housing market has even further to fall before home prices really hit rock bottom.
According to Fiserv (
FISV), a financial analytics company, home values are expected to fall another 3.6% by next June, pushing them to a new low of 35% below the peak reached in early 2006 and marking a triple dip in prices.
Several factors will be working against the housing market in the upcoming months, including an increase in foreclosure activity and sustained high unemployment
,explained David Stiff, Fiserv's chief economist.
Should home values meet Fiserv's expectations, it would make it the third (and lowest) trough for home prices since the housing bubble burst.
Read the entire article here....
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Florida Realtor Magazine reports FICO announced that it has agreements with four of the nation’s top 10 U.S. mortgage servicers to try to identify the borrowers most likely to attempt a strategic default.
In a strategic default, borrowers who can afford to make their mortgage payments choose instead to stop paying and go through foreclosure, generally because they’ve determined that the hit to their credit score is preferable to the cost of keeping the home. Roughly 35 percent of mortgage defaults are strategic, according to the University of Chicago Booth School of Business. FICO estimates the cost at more than $20 billion annually.
FICO uses an algorithm to analyze a lender’s pool of mortgage holders, and while it looks at a number of traits, it focuses largely on the six million U.S. homeowners with current-loan-to-value ratios of 120 or higher – a group considered twice a likely to consider a mortgage default.
A foreclosure or short sale does not always relieve the homeowner of a debt obligation, and lenders might not forgive an outstanding debt. While each lender handles strategic defaults in its own way, banks could use the new FICO information to take a hardline stance on owners who chose a strategic...
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Nick Timiraos S writes Economists, builders and mortgage analysts are predicting the weakened U.S. economy will depress housing prices for years, restraining consumer spending, pushing more homeowners into foreclosure and clouding prospects for a sustained recovery.
Home prices are expected to drop 2.5% this year and rise just 1.1% annually through 2015, according to a recent survey of more than 100 economists to be released Wednesday. Prices have already fallen 31.6% from their 2005 peak, as measured by the Standard & Poor's Case-Shiller 20-city index.
If the economists' forecast is accurate, it means housing faces a lost decade in which home prices recover just a fraction of what was lost between 2005 and 2015, leaving millions of homeowners with little, if any, equity in their homes. The survey was conducted for MacroMarkets LLC, a financial technology company co-founded by Yale University economist Robert Shiller.
The housing bust has chilled consumer spending—the largest single driver of the U.S. economy—with eroding home equity contributing to the so-called reverse wealth effect that prompts people to spend cautiously because they feel poorer
Read the whole article here....
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By DEREK KRAVITZ, AP Real Estate Writer
WASHINGTON (AP) — Foreclosures made up roughly one-third of all home sales this spring. While that's a smaller share of sales from the previous quarter, it's six times the percentage of foreclosures in a healthy housing market.
Foreclosure sales, which include homes purchased after they received a notice of default or that were repossessed by lenders, accounted for 31 percent of the market in the April-June quarter, foreclosure listing firm RealtyTrac Inc. said Thursday.
The share of the market would likely have been larger this spring if not for a state and federal investigation into faulty paperwork by banks and servicers. The probe has led many banks to delay foreclosure sales. Once that is complete, foreclosures will likely surge later this year.
As a slice of all home purchases, foreclosure sales peak two years ago at 37.4 percent. In the second quarter, they declined from 36 percent in the January-March period.
Read the entire article....
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4 Questions for a Pro: Short Sales
Friday, July 1, 2011 Andrew Bers has been involved with real estate since the late 1970s. He has sold millions of dollars worth of residential property, and he is an expert on foreclosures and short sales, earning "specialist" accreditation by the National Association of Realtors. Correspondent Chris Angermann sat down with him at the RE/MAX Alliance Group office on Webber Street to discuss short sales.
Q:Why do we continue to have so many short sales?
A:At the end of last year, the number of Americans who owed more on their mortgages than their homes were worth rose. Close to 50 percent of the homes in Florida are "underwater." At some point, owners make a determination to sell, sometimes informed, sometimes based on fear, or because they can't carry the mortgage anymore. Short sales — bank-negotiated settlements — are better than foreclosures. They have less impact on credit scores, and in some situations it's possible to sell the property without tax consequence or having to make up any deficiency... ...read full post
More good reasons to seek qualified help when seeking to do a short sale: SANTA ANA, Calif. – June 8, 2011 – Banks and distressed home sellers stand to lose more than $375 million this year from a short sale scam that has sellers and banks agreeing to sell homes at very undervalued prices, according to a new study by CoreLogic.
In discovering the short sale fraud scam, CoreLogic analyzed 450,000 nationwide short-sale transactions in the last two years.
Read the entire story here....
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This week the U.S. Department of Housing and Urban Development (HUD) launched a new campaign in Miami, Chicago, and Los Angeles called
Know It. Avoid It. Report It. This campaign has two objectives. First, it aims to direct homeowners facing foreclosure to trusted resources and housing counselors. Second, and more importantly, the campaign wants to solicit the support of homeowners in shutting down scammers who regularly target the elderly, Hispanics, and African Americans. Both objectives will be pursued through education and outreach, anti-scam reporting tools, and close cooperation with federal, state, local, and non-profit partners.
Newly deceptive scam artist tactics lure homeowners into misleading agreements. Their tactics include giving the false impression that they are affiliated with the government, charging illegal up-front fees, and executing fraudulent lease-back, financing, and repurchase schemes.
Highlights of the Know It. Avoid It. Report It. campaign include:
- Information on how to avoid becoming a victim
- Scam artist red flags and fraud warning signs
- Complaint form and hotline to report fraud or suspicious activity
- Resources for finding HUD-approved counselors and free housing workshops in every state
- Names of individuals and companies identified by law enforcement agencies who have allegedly committed loan modification fraud or foreclosure relief scams
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There are several items that a professional Realtor can provide to you while in pursuit of your next (or first) home. I offer you several items to consider when asking yourself whether or not you will benefit from the assistance of a real estate agent.
1. Do I have time to research the residential housing market?
2. Do I have the knowledge to integrate and understand the information available to me?
3. Can I integrate the information available on real estate internet sites into useful data that can help me accomplish my goal, of home ownership?
4. Do I have the time and expertise to negotiate on my own behalf on a short sale or foreclosure?
5. Do I have the ability to find a qualified home inspector?
6. Do I have the time to research the home loan programs available in the market?
7. Do I have the time to interview mortgage loan officers?
8. Do I have the time and expertise to target market, if necessary, for the type of property I am looking to purchase? .
9. Do I know the zoning regulations and building codes pertaining to residential real estate in the area I am interested in moving to?
These are just a few of the...
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I am still seeing a lot of activity in foreclosures and especially short sales here in the Longboat Key and Sarasota area of Florida. Our local papers are reporting drops in filings and our Chairman at RE/MAX is predicting a bottoming out of the market.
Dave Liniger, RE/MAX Chairman and Co-Founder told a gathering of more than 5,000 real estate agents that the worst of the housing crisis has passed. Liniger said that the industry must continue to pursue the training that will help homeowners in distress, but should also start planning for a post-crisis environment.
“There will be more foreclosures this year, but the worst is behind us and we need to turn our focus to the future,” said Liniger. “The housing recovery is actually happening faster than many economists think.”
Read the complete article here....
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All Lenders will require that a Short Sale Package be submitted to begin the short sale process. Lenders may have different requirements – here is a sample list of items needed for the package:
- Sellers Hardship Letter – Must be handwritten
- Authorization to Release Information for the party handling communication and negotiations with the Lender
- Financial Statement
- Copies of mortgage statements
- Last two years tax returns
- Last two months pay stubs
- Last two months bank statements
- Supporting Hardship information – HOA liens, past due real estate taxes, medical/disability statements, etc.
- Broker Price Opinion which I will prepare for your property
- Copy of Real Estate Contract and Addendums
- Any other information that you would like the Lender to consider
Handwritten Hardship Letter
The hardship letter is used to explain your need for a short sale to the Lender.
Sample hardship reasons:
- Unemployment
- Reduction in income
- Separation or Divorce
- Medical bills
- Illness
- Death of a spouse
- Mortgage payment increase
- Job relocation
- Incarceration
- Other – must specify
Sample hardship letter:
SAMPLE ONLY – PLEASE WRITE THE LETTER IN YOUR OWN WORDS
Click here to download a pdf.
Credit Consequences of a Short Sale
It is the general belief that a short sale will appear on...
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posted by Andrew Bers
on Mon., Feb 14th, 2011
in
Short Sales
A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan. It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. This agreement, however, does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency. (Source: Wikipedia)
Why Your Lender May Accept a Short Sale
While lenders will not be excited at the idea of a short sale, they are aware that a foreclosure is usually a far more costly endeavor. In a market where values are decreasing, it is in the Lenders best interest to liquidate loans as quickly as possible.
Steps of a Short Sale
- Determine the value of your property. I can provide you with a comprehensive Broker Price Opinion (BPO)
-...
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posted by Andrew Bers
on Mon., Feb 14th, 2011
in
Short Sales
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