Short Sale Stats

 

 

by The KCM Crew on March 30, 2012

What an Extension of the Mortgage Debt Relief Act Could Mean

According to a preliminary report released by LPS, 2,060,000 properties are in foreclosure inventory. As of the end of the 2011 fourth quarter, 11.1 million borrowers were reported to be underwater, according to CoreLogic.

That’s a lot of potential debt to be forgiven, and through the Mortgage Debt Relief Act of 2007, homeowners get a break from paying taxes on their forgiven debt – whether it was forgiven through a short sale, foreclosure, or a modification. The act though, is set to expire at the end of this year.

“The scheduled expiration of the mortgage debt relief law means a whole lot of uncertainty for a whole lot of underwater homeowners who are in the process of foreclosure,” said Lance Denha, Esq., of the Law Offices of Lance Denha.

If extended, this could lead to thousands in savings for the individual borrower. For example, depending on one’s tax bracket, every $10,000 in forgiven debt could incur as much as $1,500 to $3,500 in federal taxes. Thus, if $100,000 in mortgage debt is forgiven after a foreclosure, this could mean $15,000 to $35,000 in taxes owed for the borrower.

The Law Office of Lance Denha warned that rushing to hand over a deed before the December 31 expiration date could become a mistake though if Congress ends up extending the debt relief act, which it may.

“Obama did include it in his budget, to extend it to 2014,” said Mark Luscombe, a principal analyst for tax research firm CCH, in a statement. “Congress….. might decide it’s not as crucial as extending the tax breaks that already expired at the end of last year.”

That doesn’t mean Congress won’t eventually act to extend the relief, Luscombe said.

“Usually the only fight about these things is finding a way to pay for it,” he said.

The administration is proposing to extend the act until January 1, 2015.

The criteria to have forgiven debt excluded as taxable income is the debt must be from a primary residence and the debt must be used to buy, build or substantially improve a primary residence.

Also, the exclusion applies only to acquisition debt up to $2 million, or $1 million for married taxpayers filing separately.

The Law Office of Lance Denha is a multistate law firm that helps defend wrongful foreclosures against homeowners.

Source DSNews.com by Esther Cho  04/27/12

www.chicagolandhomegallery.com    Gerard Scheffler

Surge in Investor Purchases Gave Home Prices Boost in February

While Radar Logic reported home prices in February showed a month-over-month increase, the real estate data provider sees this trend as possibly being temporary, considering that warm weather and investment buying helped to drive up sales.

Home prices increased 1.9 percent over the month ending February 16, according to Radar Logic’s RPX Composite Price, which tracks 25 major metropolitan areas.

This increase was bolstered by strong sales in February. Sales transactions for the RPX Composite increased 22.9 percent month-over-month and 16 percent year-over-year through February 16.

“We believe that investment buying and mild weather are contributing to this strength, and both may be temporary,” the Radar Logic report stated, which was authored by Director of Research Quinn W. Eddins.

Since 2009, purchases from corporate investors have increased rapidly in certain metro areas.

A leading example of this trend is Las Vegas, where corporate investor purchases increased 1,300 percent while housing transactions increased 264 percent from January 2009 to February 2012. In Miami, purchases from corporate investors increased 714 percent compared to 185 percent for total sales during that same period. In Los Angeles, corporate investor purchases increased 421 percent compared to a 36 percent increase in total sales. In New York, they increased 126 percent while sales increased 69 percent.

The result of increased investment activity has been argued to reap both benefits and disadvantages for home prices.

According to Radar Logic, investors, who are primarily interested in REO properties, buy homes at a significant discount, depressing the aggregate price for houses.

“Moreover, investor purchases of distressed properties at heavy discounts have hurt the values of surrounding properties by providing appraisers with low-priced comparable sales,” the report stated.

On the other hand, the influx of corporate investors into metropolitan housing markets, particularly those with high concentrations of foreclosures and large REO inventories, could strengthen aggregate home prices as people become aware of the fact that investors are buying up properties in large quantities, according to the report. Sellers could then have a strong incentive to raise their prices, which could start to firm prices in the market, Radar Logic explained.

Source DSNews by Esther Cho 

www.chiccagolandhomegallery.com  Gerard Scheffler

Survey Finds High Share of Distressed Properties Is Keeping Prices Down

Inventory is shrinking and traffic for homebuyers seems to be increasing, but according to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, home prices were down in March. One reason for this, according to the survey, which includes about 2,500 real estate agents, is the high number of distressed properties on the market.

Home prices for non-distressed properties in March dropped 5.7 percent from a year ago in March 2011. Prices for damaged REO properties also saw a 5.7 percent decline in prices, while move-in ready REO prices fell 2.5 percent during the same period. Short sales declined significantly, with prices falling 14.3 percent during the one-year period.

According to a recent RealtyTrac report, the average price of a home sold via short sale in January 2012 was $174,120, down 10 percent from January 2011. This, RealtyTrac stated, shows that lenders are more willing to approve more aggressively priced short sales.

Driven by an increase in short sales, the total share of distressed properties in the housing market in March was 47.7 percent when using a three-month moving average, according to the HousingPulse Distressed Property Index (DPI). This marks the 25th consecutive month the index has hovered over the 40 percent mark.

“With nearly half of the market being distressed, we’re a long way from a return to a normal market,” said Thomas Popik, research director at Campbell Surveys. “Agents responding to our survey say that homeowners with well-maintained properties in good locations are very reluctant to list at today’s prices. That’s why inventory is low-and also why forced REO and short sales are such a big proportion of the remaining market.”

Over the past six months, the proportion of short sale transactions in the housing market increased from 17.8 percent to 19.9 percent.

The survey also found that traffic indexes for first-time homebuyers, current homeowners, and investors all showed substantial increases in March compared to the year before, with indexes showing current homeowners and investors were higher than those recorded when the federal homebuyer’s tax credit was offered in 2009 and 2010.

Meanwhile, HousingPulse found that real estate agents reported housing inventories well below levels seen a year ago, especially for attractive properties in desirable locations.

What Agents Said in the Survey

“[Purchase] Activity has increased while prices continue to fall. There is a significant increase in the number of short sales and foreclosures on the market in our area.” – Agent in Delaware.

“Sales are up 29 percent year-to-date through the end [of] March. Pendings are up 55 percent. Prices just are beginning to rise.” – Agent from California.

“Volume is increasing, but prices are not. Only very nice homes are selling faster.” – Agent in Pennsylvania.

Source DsNews

Inventory is shrinking and traffic for homebuyers seems to be increasing, but according to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, home prices were down in March. One reason for this, according to the survey, which includes about 2,500 real estate agents, is the high number of distressed properties on the market.

Home prices for non-distressed properties in March dropped 5.7 percent from a year ago in March 2011. Prices for damaged REO properties also saw a 5.7 percent decline in prices, while move-in ready REO prices fell 2.5 percent during the same period. Short sales declined significantly, with prices falling 14.3 percent during the one-year period.

According to a recent RealtyTrac report, the average price of a home sold via short sale in January 2012 was $174,120, down 10 percent from January 2011. This, RealtyTrac stated, shows that lenders are more willing to approve more aggressively priced short sales.

Driven by an increase in short sales, the total share of distressed properties in the housing market in March was 47.7 percent when using a three-month moving average, according to the HousingPulse Distressed Property Index (DPI). This marks the 25th consecutive month the index has hovered over the 40 percent mark.

“With nearly half of the market being distressed, we’re a long way from a return to a normal market,” said Thomas Popik, research director at Campbell Surveys. “Agents responding to our survey say that homeowners with well-maintained properties in good locations are very reluctant to list at today’s prices. That’s why inventory is low-and also why forced REO and short sales are such a big proportion of the remaining market.”

Over the past six months, the proportion of short sale transactions in the housing market increased from 17.8 percent to 19.9 percent.

The survey also found that traffic indexes for first-time homebuyers, current homeowners, and investors all showed substantial increases in March compared to the year before, with indexes showing current homeowners and investors were higher than those recorded when the federal homebuyer’s tax credit was offered in 2009 and 2010.

Meanwhile, HousingPulse found that real estate agents reported housing inventories well below levels seen a year ago, especially for attractive properties in desirable locations.

What Agents Said in the Survey

“[Purchase] Activity has increased while prices continue to fall. There is a significant increase in the number of short sales and foreclosures on the market in our area.” – Agent in Delaware.

“Sales are up 29 percent year-to-date through the end [of] March. Pendings are up 55 percent. Prices just are beginning to rise.” – Agent from California.

“Volume is increasing, but prices are not. Only very nice homes are selling faster.” – Agent in Pennsylvania.

Source Dsnews.com Author: Esther Cho • Date: 04/23/2012

www.chicagolandhomegallery.com   Gerard Scheffler

RealtyTrac: Short Sales Up 33% in January, Outpace REO Sales in 12 States

With the number of short sales increasing and even outnumbering REO sales in certain states, experts are speculating short sales might become key to preventing an even greater swelling of foreclosed properties on the market.

Compared to a year ago in January 2012, pre-foreclosure sales, which are typically short sales, increased 33 percent, according to a RealtyTrac report released Thursday.

Short sales even outpaced bank-owned REO sales in 12 states, including Utah, California, Arizona, Florida, Indiana, Colorado, New York and New Jersey.

Also, 32 states saw annual increases in pre-foreclosure sales, with the top five being Georgia (+113 percent), Michigan (+90 percent), Wisconsin (+77 percent), South Carolina (+76 percent) and Utah (+70 percent).

Despite the increase, Daren Blomquist, VP of RealtyTrac and author of the report, points out that short sales have declined on a long-term basis, but January’s report could signal a turning point.

“Short sales have long held great promise as a market-based solution to the nation’s foreclosure problem, but short sales transactions over the past three years have actually declined after peaking in the first quarter of 2009,” said Blomquist. “January foreclosure sales numbers, along with first quarter foreclosure activity, strongly indicate that downward trend is ending, and we believe 2012 could be a record year for short sales.”

Average pre-foreclosure prices saw a decline, according to the report, with the average sales price in January at $174,120, down 10 percent from January 2011. This, RealtyTrac stated, shows that lenders are more willing to approve more aggressively priced short sales.

In January, a home sold via short sale sold at a 21 percent discount on average compared to the average price of a home not in foreclosure, according to RealtyTrac.

The five states with the biggest discounts were Massachusetts (40.86 percent), Missouri (35.5 percent) California (29.93), Indiana (29.82), and Georgia (29.31).

The five metropolitan areas with the greatest discounts were Kansas City (56.53 percent), Louisville/Jefferson County (44.25 percent), Milwaukee-Waukesha-West Allis (43.64 percent), Boston-Cambridge-Quincy (41.57 percent), and Indianapolis-Carmel (37.26 percent).

The time it took to approve of a short sale was a bit lower for the 2012 first quarter, averaging 306 days, down from 308 days in the fourth quarter of 2011 and down from a peak of 318 days in the third quarter of 2011. The short sale timeline begins when a property starts the foreclosure process to when it’s sold as a pre-foreclosure.

However, the average time to sell a pre-foreclosure has actually tripled since the first quarter of 2007, when it took an average of 113 days.

There’s nothing short about short sales. If you can survive that process and make that happen it’s going to be a better outcome for everyone, said RealtyTrac VP Charlie Engel during a broadcast hosted by the Charfen Institute for Certified Distressed Property Experts.

Recently, Bank of America and GSEs Fannie Mae and Freddie Mac announced efforts to streamline the short sale process. BofA’s change requires a decision on a short sale in less than 3 weeks.

Starting in June, the GSEs are requiring servicers to make a decision on a short sale within 30 days of receiving an offer or an application package from a borrower; if more time is needed, a servicer must provide the borrower with a weekly update and come to a decision no later than 60 days.

With foreclosure starts – either default notices or scheduled foreclosure auctions – numbering more than 100,000 in March, this means more opportunities for short sales, according to the report.

Compared to the month before, March foreclosure starts increased 7 percent, but were down 11 percent from a year ago. When looking at individual states, 31 posted monthly gains in foreclosure starts in March.

Other properties with potential to become short sales are delinquent loans, which represented approximately 3.5 million properties, according to a fourth quarter 2011 survey from the Mortgage Bankers Association.

RealtyTrac is an online marketplace of foreclosure properties, with more than 1.3 million default, auction and bank-owned listings from over 2,200 U.S. counties, along with detailed property, loan and home sales data.

Source Ds.News. com  by: Esther Cho   04/19/12

www.chicagolandhomegallery.com   Gerard Scheffler

 

Foreclosures Create Opportunities !

   

In the current economic climate purchasing real estate foreclosures provides the investor with a wonderful way of making excellent returns on investment. Basically this market is wide open; thousands of foreclosures are on both bank and government listings and can be bought for very good prices.
Investing in real estate has always been a way of creating wealth. But with the foreclosure market being so predominant, many normal home buyers are also making use of this vehicle to obtain homes which they might otherwise not have been able to afford. Basically anyone with the will and the ability to obtain finance can invest in this market. In other words you don't have to be an expert investor to take advantages of the benefits of purchasing property in real estate foreclosures.
Feel free to call me to explain this topic in more detail.

Gerard Scheffler www.chicagolandhomegallery.com

Home Buyer Tip - Choosing a Neighborhoo

 

   

Where you live is as important as the house you live in.
Commute: Do I need a quick commute to work? Keep in mind short commutes limit your neighborhood options.
My personality: Do I prefer country, suburban or urban living?
Family: Is a certain school district important to me? Do I need to live near my elderly parents?
Downtime: Do I want to live close to my church or temple or have a short commute to night school?
Future zoning and development: Is the park behind my house going to be developed in the future? Does this small town have plans to build a mega-shopping mall?
Neighborhood age: What will a new neighborhood look like in 10 years? Am I satisfied with an older neighborhood, knowing it may not change much?
Time of day: Does the neighborhood feel the same at night as it does during the day? Is weekend traffic heavier than during the weekday?
Extra costs: Can I afford the county or city taxes or any homeowners' association fees?
Homeowners' Associations: What are the homeowners' association rules? Are they good for protecting home values?
Neighborhood investment: Have the homes in this neighborhood held or increased in value?

I've helped many home buyers organize their neighborhood requirements based on my knowledge of the local area.  Feel free to call me at your convenience for a no obligations conversation about your new home goals.

Gerard Scheffler www.chicagolandhomegallery.com  773 909-3346

Existing Home Sales Fall In March for 2nd Straight Month, Prices Rise

Existing-home sales fell to 4.48 million (seasonally adjusted annualized rate) in March from an upwardly revised February rate of 4.60 million, the National Association of Realtors (NAR) reported Wednesday. Economists had forecast the March sales pace would be 4.62 million. At the same time, the median price of a new home rose to $163,800, its highest level since last November’s $164,000 and up 2.5% since March 2011.

 

DSNews. com, by Mark Lieberman, Five Star Institute Economist  04/19/12

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Housing Crisis to End in 2012 as Banks Loosen Credit Standards !!!

 

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.

The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.

Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.

However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.

Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.

Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”

In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.

While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.

Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generate actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.

DSNews.com by : Krista Franks Brock  01/24/12

Home Prices to Increase Modestly by Year-End: Clear Capital

 

The valuation firm Clear Capital released the results of its home price forecasting models Thursday. The company expects residential property values at the national level to show slight increases over the next three months, ending the year with a growth rate of 1.2 percent.

Diagrams illustrating the trajectory of home prices from 2006 to now and Clear Capital’s projections heading into 2013 depict the valley shape with current prices at the bottom and a subtle upward trend from March through December of 2012.

The strongest of the country’s four regions throughout much of 2011, the Northeast, is expected to see a modest gain of 0.3 percent over the next three months but pick up momentum and grow prices by 1.3 percent to wrap up the year.

The South is expected to perform the strongest in the short term with prices projected to increase 0.5 percent over the next three months, and end the year up 1.6 percent.

Clear Capital’s forecast indicates the Western region could be turning a corner. The three-month numbers show the region gaining 0.2 percent, and pushing that to a positive 1.0 percent by year-end.

The Midwest remains the weakest region of the country in terms of home prices. There, Clear Capital is expecting a drop of 0.6 percent over the next three months, but then movement into positive territory with a 0.7 percent gain by December.

The 50 metropolitan statistical areas (MSAs) tracked by Clear Capital are forecast to show mixed gains and losses, with 30 markets expected to see gains and 20 markets projected to post losses through the end of 2012.

Over half of the metros in the company’s study should see prices move less than 2 percent in either direction. No

double-digit declines are expected however, Phoenix, Arizona, and Tampa, Florida, are expected to see double-digit gains.

Clear Capital sees positive price trends on the horizon for most of the country, despite the fact that currently home prices are continuing to slip. Data through March 2012 shows national home prices fell 0.2 percent in Clear Capital’s rolling quarter-over-quarter analysis.

The West, South, and Northeast posted quarterly gains of less than 1 percent, and the Midwest lost a significant 2.4 percent.

The year-over-year numbers showed even weaker performance for the nation and all its regions, indicating short-term appreciation has yet to be enough to turn the long-term tide.

According to Clear Capital’s assessment, the nation lost 1.4 percent in home values from March 2011 through March 2012, which is slightly better than February’s year-over-year decline of 1.9 percent.

REO saturation, which traditionally pushes down prices, continued to climb last month, Clear Capital reported. It was the second month in a row that distressed property sales as a percentage of total sales increased for the nation and all regions.

Clear Capital says its findings confirm speculation that finalization of the attorneys general settlement has led servicers to become more aggressive in moving their REO backlog onto the housing market.

In March, the national REO rate went up 1.2 points from the previous month’s reading to hit 27 percent, pointing to an acceleration of REO sales. The Midwest contributed the most to the increase, jumping 3.8 points to 34.3 percent, with the other regions all seeing softer increases.

Of particular interest this month, according to Clear Capital, is how the changes in REO saturation are affecting prices. In the past, there has been a consistent inverse relationship between changes in REO saturation and prices, but not in March’s study. Although their REO rates increased, the West, Northeast, and South regions also saw home prices increase.

These geographies are exhibiting a pricing resilience to REO saturation that has not been seen in previous analyses, Clear Capital says. The company says it could be explained by improvement in jobs numbers recently, rapidly increasing investor activity in certain regions, and a general increase in consumer confidence.

DSNews by : Carrie Bay 04/04/12

Number of Completed Foreclosures Down for February

 

Completed foreclosures per thousand active loans for judicial vs. non-judicial states

The number of completed foreclosures in February 2012 was down on a monthly basis and slightly on a year-over-year comparison, but overall, foreclosure inventory has decreased compared to a year ago, according to CoreLogic’s National Foreclosure report for February.

Completed foreclosures are counted as properties that get auctioned off and purchased by a third party, such as an investor or lender.

For February 2012, 65,000 completed foreclosures were reported, compared to 66,000 in February 2011, and 71,000 in January 2012. The number of completed foreclosures over 12 months ending in February was 862,000. From the start of the financial crisis in September 2008, CoreLogic estimates 3.4 million completed foreclosures.

“Even though the pace of completed foreclosures has slowed, the overall foreclosure inventory is decreasing because REO sales were up in February,” said Mark Fleming, chief economist for CoreLogic. “With the spring buying season upon us, the inventory may decline further as the pace of distressed-asset sales rises along with the rest of the housing market.”

Approximately 1.4 million homes with a mortgage, or 3.4 percent, were in the foreclosure inventory as of February 2012. Nationally, the number of borrowers in the foreclosure inventory decreased by 115,000, a decline of 7.6 percent compared to February 2011. For the prior month of January 2012, no change was reported.

The share of borrowers nationally that were 90 or more days late on their mortgage payment fell to 7.3 percent in February 2012 from 7.8 percent in February 2011, but up slightly from the 7.2 percent in January 2012.

The distressed clearing ratio for February 2012 moved up to 0.73 from 0.66 in January 2012. The distressed clearing ratio is calculated by dividing the number of REO sales by the number of completed foreclosures. A higher ratio means a faster pace of REO sales compared to the pace of completed foreclosures.

“In February, more than 60 major markets saw a decrease in their foreclosure rates compared to a year ago,” said Anand Nallathambi, president and CEO of CoreLogic. “This combined with faster REO-clearing rates, better employment news, and continued historically low interest rates are all positive signs of improvement in the housing economy.”

Of the top 100 markets measured by Core Based Statistical Areas (CBSAs) population, 33 showed an increase in the year-over-year change in the number of foreclosures in February 2012.

Five states with the largest number of completed foreclosures:

1. California (154,000)
2. Florida (87,000)
3. Michigan (64,000)
4. Arizona (63,000)
5. Texas (58,000)

These five states account for 49.4 percent of all completed foreclosures.

Five states with the highest foreclosure rates:

1. Florida (12.0 percent)
2. New Jersey (6.6 percent)
3. Illinois (5.4 percent)
4. Nevada (5.0 percent)
5. New York (4.9 percent)

Five states with the lowest foreclosure rates:

1. Wyoming (0.7 percent)
2. Alaska (0.8 percent)
3. North Dakota (0.8 percent)
4. Nebraska (1.0 percent)
5. Montana (1.4 percent)

 

By DSNews , by Esther Cho 03/29/12