Banks Open to Short Sales.

Banks Open to Short Sales

To meet the terms of the $26 billion mortgage settlement, the nation’s five largest banks are becoming more agreeable to short sales, Inman News reports.

The five banks — Bank of America, Citi, JPMorgan Chase, Ally Financial, and Wells Fargo — have issued most of their relief from the settlement so far in the form of short sales or deeds in lieu of foreclosure.

Under the settlement, the five banks are required to provide $17 billion in aid to home owners, either through loan modifications, principal reductions, or short sales.

To date, 74,614 home owners have received an average of $116,200 each as either a short sale or deed in lieu of foreclosure.

Since January, sales of homes in the pre-foreclosure process — usually taking the form as short sales — have been rising. In fact, they reached a three-year high in the first quarter, RealtyTrac reports. Meanwhile, the number of foreclosure sales has been declining.

Besides short sales and deed in lieu of foreclosure, mortgage servicers are also increasingly offering first-lien loan modifications to struggling home owners. According to a progress report on the settlement, 7,093 borrowers received first-lien loan modifications, averaging about $105,650 per borrower.

Source: “Banks Using Short Sales to Meet Robo-signing Obligations,” Inman News (Sept. 4, 2012)

Buyer Pet Peeves When Touring Homes.

Buyer Pet Peeves When Touring Homes

What makes home buyers grimace when they tour a home for-sale? Don’t let one of your listings fall prey to one of these common buyer pet peeves. A recent article at Zillow highlights some of the following turn-offs:

• Pets: Dirty kitty litter boxes or dog toys scattered in a room can turn off buyers who associate pets with unsanitary homes. Remove all traces of pets in a home and pay attention to the home’s smell; get rid of any lingering pet odors when homes are for sale.
• Kid items: Don’t let the kids overtake a home with toys cluttering every square inch. Also, pay attention to any sanitary or personal items involving infants. For example, “leaving breast milk, a breast pump, or dirty baby bottles on the kitchen counter could make a buyer feel that the home isn’t clean or sanitary,” according to the Zillow article.
• Personal items: Watch the cleanliness of the bathroom and what’s left out: For example, make sure toothpaste residue isn’t left in the sink or prescription medications are left out in the open. “Buyers want to feel clean in the bathroom … they don’t need to be reminded that they will be taking over a ‘used’ bathroom,” according to the Zillow article.

Source: “5 Turn-Offs When Buyers Tour Your Home,” Zillow (Aug. 31, 2012)

Foreclosure Prices Rise, Highest Increase Since 2006.

Foreclosure Prices Rise, Highest Increase Since 2006

Foreclosure sales prices rose 6 percent in the second quarter and were up 7 percent year-over-year, RealtyTrac reported this week. This marks the largest annual increase in foreclosure -related sales prices since 2006.

During the second quarter, the average foreclosure -related sales price was $170,040.

Still, foreclosure and bank-owned homes sold at an average price that was 32 percent lower than the average price of a non-foreclosure home, RealtyTrac reports.

Meanwhile, the gap between REO sales and short sales continued to narrow during the second quarter. REO sales outnumbered pre-foreclosure sales by 9,833 — the smallest difference since the third quarter of 2007.

The number of short-sale transactions rose 18 percent year-over-year, accounting for 14 percent of all sales during January through May time period, RealtyTrac reports.

“The second-quarter sales numbers provide solid statistical evidence of what we’ve been hearing anecdotally from real estate agents, buyers, and investors over the past few months: There is a limited supply of available foreclosure inventory to choose from in many markets,” says Daren Blomquist, RealtyTrac vice president. “Given this shortage of supply and the seasonally strong buyer demand in the second quarter, it’s no surprise that the average foreclosure-related sales price increased both on a quarterly and annual basis.”

Source: RealtyTrac

Mortgage Rates Reverse Course.

Mortgage Rates Reverse Course

Mortgage rates fell across the board this week, after having inched higher the last few weeks from all-time lows, Freddie Mac reports in its weekly mortgage market survey.

Here’s a closer look at Mortgage rates for the week ending Aug. 30.

• 30-year fixed-Mortgage rates: averaged 3.59 percent, with an average 0.6 point, dropping from last week’s 3.66 percent average. A year ago at this time, 30-year rates averaged 4.22 percent.
• 15-year fixed-Mortgage rates: averaged 2.86 percent, with an average 0.6 point, also down from last week’s 2.89 percent average. Last year at this time, 15-year rates averaged 3.39 percent.
• 5-year adjustable-Mortgage rates: averaged 2.78 percent, with an average 0.6 point, dropping from last week’s 2.80 percent average. Five-year ARMs averaged 2.96 percent a year ago at this time.
• 1-year ARMs: averaged 2.63 percent, with an average 0.4 point, dropping from last week’s 2.66 percent average. A year ago, 1-year ARMs averaged 2.89 percent.

Source: Freddie Mac

Foreclosed Homes to Blame for Spread of West Nile Virus?

Foreclosed Homes to Blame for Spread of West Nile Virus?

A home owner living in the Los Angeles area says that the abandoned, foreclosed home next door gave her the West Nile virus. Debbie Davis says the foreclosed home has had an algae-green pool for months, and despite her numerous calls to the city code-enforcement officials as well as public health and bank officials to clean it up, no one has stepped up to do it.

Davis says when she tried to donate blood recently, doctors informed her that her blood contained the West Nile virus. She’s blaming the next-door pool for becoming a breeding ground of mosquitoes that gave it to her. The virus, which can be deadly, can be transmitted by mosquitoes.

Davis says that she — along with several of her neighbors — have been trying to get city officials and Bank of America, which owns the home, to clean up the dirty pool for months in the neighborhood of million-dollar hillside homes.

“There it is, a sludge pit,” Davis told the Daily News Los Angeles. “And the likely cause of my virus. The problem is, I’ve reported the pool to everybody … The end result is, I’ve got West Nile virus. It never should have come to this.”

Davis says she has experienced West Nile symptoms like headaches and fatigue. Another nearby neighbor says they are awaiting to hear results on whether their 17-year-old son, who has been experiencing symptoms, also has West Nile.

Meanwhile, a spokeswoman for the county’s mosquito abatement district told reporters that it has been treating the pool on a monthly basis, pouring chemicals in the pool that aim to kill mosquitoes.

“There could be West Nile virus in that area — but it may not have come from the pool at the foreclosed home,” says a spokeswoman for the Greater Los Angeles County Vector Control District.

Source: “Studio City Woman Says Fetid Pool in Foreclosed Home Gave her West Nile Virus,” Daily News Los Angeles (Aug. 20, 2012)

Mortgage Debt cut by more Home Owners.

Mortgage Debt cut by more Home Owners

Mortgage debt is on the decline, according to a new report by the New York Federal Reserve Bank. The New York Fed credits the decrease, as well as the fact that fewer Americans are late on their mortgage payments, to an increase in home owners who have refinanced into ultra-low mortgage rates.

“The continuing decrease in delinquency rates suggests that consumers are managing their debts better,” says Wilbert van Der Klaauw, an economist at the New York Fed. “As they continue to pay down Mortgage debt and take advantage of low interest rates, Americans are moving forward with rebalancing their household finances.”

While Americans are getting a better grip over their Mortgage debt, they are doing worse in keeping up with their debts on student loans and home equity lines of credit. Student loan delinquencies grew to 8.9 percent and HELOC delinquencies increased to 4.9 percent in the second quarter.

Meanwhile, delinquencies on auto loans and credit cards dropped in the second quarter. Mortgage delinquencies dropped to 6.9 percent, according to the report.

The New York Fed also reported that mortgage origination’s increased to $463 billion in the second quarter.

Source: “Fewer Americans are Late on Mortgage Payments: Fed Bank of New York,” HousingWire (Aug. 29, 2012)

Low Mortgage Rates Spark Serial Refinancing.

Low Mortgage Rates Spark Serial Refinancing

Mortgage rates have been hovering at record lows, causing more home owners to lock-in the Low Mortgage Rates by refinancing their mortgages again … and again.

Nearly 2.2 million home owners have refinanced at least twice since 2009, according to research compiled for The Wall Street Journal.

Besides the low-rate attraction, lenders are offering to waive many closing costs, which has made refinancing cheap for many home owners. Lenders who waive closing costs usually charge a slightly higher interest rate, however.

The Low Mortgage Rates and closing costs have prompted home owners to refinance even when the rate drops just three-eighths of a percentage point, The Wall Street Journal reports.

“The traditional rules of refinancing are no longer in play,” Bruce Thielen, a vice president at NASB Financial, told The Wall Street Journal.

Still, serial refinancing isn’t smart for all home owners. Every time home owners refinance for Low Mortgage Rates and opt for a 30-year fixed-rate loan, for example, they are extending their repayment period as well as the overall amount in interest they’ll pay for the life of the loan.

Source: “The Serial Refinancers,” The Wall Street Journal (Aug. 24, 2012)

Home ownership drops to lowest rate in 50 years.

Home ownership drops to lowest rate in 50 years.

The U.S. Home ownership rate is at a 50-year low with another 3.8 million borrowers closer to losing their properties, a report from John Burns Real Estate said Monday.

The real estate research firm claims the true Home ownership rate is 62.1%, with that number including all borrowers who are 90 days or more delinquent and at high-risk of default.

This figure stands in stark contrast to the Census Bureau’s 65.5% Home ownership rate.

“The 65.5% Home ownership rate published by the U.S. Census Bureau greatly overstates the real level of Home ownership in the country, as the Census Bureau counts all 3.8 million homeowners who are 90-plus days delinquent on their mortgage as homeowners,” wrote Sean Fergus, manager with John Burns Real Estate. “Despite herculean efforts by the administration to save Home ownership for these people, most of them are really just renters in waiting.”

Fergus says on average the difference between the actual, real Home ownership rate and the published rate is one-percentage point. But today, the spread between the two is much higher due to the steep financial crisis, under staffing at banks, which is hurting the loan modification process, and government intervention in lending and servicing.  Not to mention, many borrowers are figuring out how to live rent-free for years after falling behind on their payments.

“We are confident homeownership will come back,” Fergus noted. “Our survey of 20,000 consumers, and many surveys by others, confirms that the American dream of homeownership is as strong as ever.”

He added that in states like Arizona and Texas, where foreclosures are more streamlined, foreclosed homeowners are now back in the market shopping for properties after losing their homes three years ago.

Source: “Home Ownership Drops to Lowest Rate in 50 Years,” HousingWire (Aug. 27, 2012)