Foreclosure slowdown pushing home prices higher

Joe Klamar / AFP - Getty Images

The Goldrush estates are seen in Las Vegas, which has long had the dubious distinction of being America's foreclosure capital. As foreclosures decline, home prices are slowly rising in many markets.

Home buyers looking for bargains on foreclosed houses are having a harder time finding them.

When the housing market crashed in 2007, a wave of foreclosures accelerated the plunge in prices, which lopped roughly a third off the median price of a home.

Now with the pace of new foreclosures slowing, mortgage rates falling and home sales perking up, those once-in-a-lifetime bargains are fading from the market.

“Deeply discounted existing homes have been subject to strong demand from cash buyers and investors looking to lock into housing’s attractive income returns,” said Paul Diggle, a housing economist at Capital Economics, in a recent research note. “The supply of such homes, meanwhile, has been dwindling. That has bid up existing house prices, particularly at the lower end of the price spectrum."

Nationwide, the median price of a new home was up by 17 percent in August compared to a year ago. For existing homes, the median price was 9.5 percent higher. 

During the depths of the housing bust, markets under the greatest price pressure had the highest concentrations of “distressed” sales. Those include bank-owned homes seized in foreclosures and “short sales,” in which lenders allow underwater homeowners to sell their home for less than the outstanding mortgage balance.

These distressed properties sold at deep discounts to the “normal” market. But as the backlog of foreclosures has eased, those discounts are drying up. 

The foreclosure slowdown continued last month, according to the latest data from research firm RealtyTrac, which showed new filings hit a five-year low.

Foreclosure starts fell in 31 states, with the biggest drops in California, Arizona, Michigan, Georgia and Texas. Those are among the so-called non-judicial states, in which court approval isn't required for foreclosures. In some states where court approval is required, concerns about sloppy paperwork processing by lenders has prompted tougher reviews of home seizures.

Fewer new foreclosures means fewer unsold homes on the market. As the pace of sales has picked up and the volume of unsold inventory has fallen, so has the backlog of houses for sale. The supply of listings has fallen from an average 9.4-month supply in 2010 to 6.1 months in August, the latest data available from the National Association of Realtors.

“There is a shortage of inventory -- as crazy as it sounds to say that,” said Daren Blomquist, a RealtyTrac spokesman. “In a lot of market there's less inventory of foreclosed properties than there is demand. You’re hearing about multiple bids for these properties.”

At the same time, demand for foreclosed homes has risen during the housing bust, in part because the stigma once associated with bank-owned properties has faded somewhat.

“Many real estate agent who would have never wanted to deal with a foreclosure in the past decided to get on the bandwagon,” said Blomquist. “Some now specialize in those properties.”

To be sure, foreclosed properties in some markets still being sold at deep discounts. Though the volume of foreclosures has slowed nationwide, the pace is still strong in Florida, where one in every 117 households in some stage of foreclosure last month, according to RealtyTrac.  Arizona, California, Illinois and Georgia also were among the top five states with the highest foreclosure rates in September.

With demand up and supply falling, prices have perked up. After falling by roughly a third after the 2006 peak, home prices have begun inching higher this year. After several false starts, the housing market began finding a footing earlier this year, and most analysts are convinced the worst is over in most parts of the country.

The latest evidence came this week with the Federal Reserve’s “Beige Book” report on regional economic conditions, which showed the housing recovery picking up steam in some districts.

After the bubble burst, bargain-priced homes were available on both new and existing houses. One measure of the “foreclosure discount” is the difference between the median price of existing and newly-built homes.

Since 1966, existing homes have sold, on average, for about 13 percent less than new homes, according to Diggle’s research. During the housing bust, the discount widened to as much as one-third less than the price of a new home. The discount has been falling this year.

Source : By John W. Schoen, NBC News

 

Foreclosure Activity Drops to 5-Year Low in September

Monthly Activity at Lowest Level Since July 2007 Led by Drops in CA, MI, GA, TX, AZ
  Lowest Quarterly Total Since Q4 2007, But Activity Increasing in FL, IL, OH, NY, NJ

IRVINE, Calif. – Oct. 11, 2012 — RealtyTrac® (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its U.S. Foreclosure Market Report™ for September and the third quarter of 2012, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 180,427 U.S. properties in September, a decrease of 7 percent from the previous month and down 16 percent from September 2011. September’s total was the lowest U.S. total since July 2007.

The decrease in September helped drop the third quarter foreclosure numbers to the lowest level since the fourth quarter of 2007. Foreclosure filings were reported on 531,576 U.S. properties during the quarter, a decrease of 5 percent from the second quarter and a decrease of 13 percent from the third quarter of 2011 — the ninth consecutive quarter with an annual decrease in foreclosure activity. The report also shows one in every 248 U.S. housing units with a foreclosure filing during the quarter.

“We’ve been waiting for the other foreclosure shoe to drop since late 2010, when questionable foreclosure practices slowed activity to a crawl in many areas, but that other shoe is instead being carefully lowered to the floor and therefore making little noise in the housing market — at least at a national level,” said Daren Blomquist, vice president at RealtyTrac. “Make no mistake, however, the other shoe is dropping quite loudly in certain states, primarily those where foreclosure activity was held back the most last year.

“Meanwhile, several states where the foreclosure flow was not so dammed up last year could see a roller-coaster pattern in foreclosure activity going forward because of recent legislation or court rulings that substantively change the rules to properly foreclose,” Blomquist added. “A backlog of delayed foreclosures will likely build up in those states as lenders adjust to the new rules, with many of those delayed foreclosures eventually hitting down the road.”

Other high-level findings from the report

• The national decrease in September and the third quarter was driven mostly by sizable decreases in the non-judicial foreclosure states such as California, Georgia, Texas, Arizona and Michigan.

• Several judicial foreclosure states — including Florida, Illinois, Ohio, New Jersey and New York — continued to buck the national trend, registering substantial year-over-year increases in foreclosure activity in September and the third quarter.

• U.S. foreclosure starts in the third quarter decreased both from the previous quarter and a year ago, reversing a bump in foreclosure starts in the second quarter.

• California foreclosure starts (NOD) in September decreased 18 percent from the previous month and were down 45 percent from a year ago to a 69-month low, although the state’s foreclosure rate still ranked in the top three for the month and quarter.

• Florida foreclosure starts (LIS) in September increased 24 percent on a year-over-year basis, the 11th consecutive month with an annual increase, and the state’s foreclosure rate ranked highest nationwide for the first time since April 2005.

Non-judicial states push national numbers lower
Of the 24 states where the non-judicial foreclosure process is primarily utilized, 20 reported annual decreases in foreclosure activity in the third quarter, including Nevada (71 percent decrease), Oregon (63 percent decrease), Utah (60 percent decrease), Virginia (34 percent decrease), California (29 percent decrease), Michigan (28 percent decrease), Arizona (23 percent decrease), Colorado (21 percent decrease), Georgia (20 percent decrease) and Texas (17 percent decrease).

Nevada, Oregon and California have all enacted legislation within the past year adding more requirements for lenders to properly foreclose, while a Georgia Court of Appeals ruling in July of this year requires lenders to provide certain information on foreclosure notices that some lenders may not have been including previously.

Washington state was one of only four non-judicial foreclosure states where foreclosure activity increased in the third quarter, up 70 percent from the previous quarter and up 15 percent from the third quarter of 2011. Washington state was one of the first non-judicial states to enact legislation impacting the foreclosure process following the so-called robo-signing controversy that came to light in October 2010. The state legislature passed a law that took effect in July 2011, requiring lenders to offer mediation to homeowners facing foreclosure.

Judicial states buck national trend
Meanwhile, third quarter foreclosure activity increased on a year-over-year basis in 14 out of the 26 states with a primarily judicial foreclosure process, including New Jersey (130 percent increase), New York (53 percent increase), Indiana (36 percent increase), Pennsylvania (35 percent increase), Connecticut (34 percent increase), Illinois (31 percent increase), Maryland (28 percent increase), South Carolina (16 percent increase), North Carolina (14 percent increase), and Florida (14 percent increase).

Some notable exceptions where foreclosure activity in the third quarter decreased on annual basis in judicial foreclosure states included Massachusetts (16 percent decrease) and Wisconsin (12 percent decrease).

Foreclosure starts reverse upward trend
First-time foreclosure starts, either default notices or scheduled foreclosure auctions depending on the state’s foreclosure process, were filed on 284,720 U.S. properties during the third quarter, an 8 percent decrease from the second quarter and also an 8 percent decrease from the third quarter of 2011.

Nationwide foreclosure starts decreased on an annual basis for the second straight month in September following three straight months of annual increases. Foreclosures were started on 87,066 U.S. properties during the month, down 12 percent from August and down 15 percent from September 2011.

September foreclosure starts decreased on an annual basis in 31 states, including California (45 percent decrease), Arizona (34 percent decrease), Michigan (22 percent decrease), Georgia (21 percent decrease) and Texas (19 percent decrease).

States with the biggest annual increases in foreclosure starts in September included New Jersey (424 percent increase), Pennsylvania (134 percent increase), New York (95 percent increase), Washington (60 percent increase) and Florida (24 percent increase).

Florida, Arizona, California post top state foreclosure rates in third quarter
Florida foreclosure activity in the third quarter increased 14 percent from a year ago, the third consecutive quarter with an annual increase and boosting the state’s foreclosure rate to highest in the nation. One in every 117 Florida housing units had a foreclosure filing in the third quarter, more than twice the national average.

Florida’s foreclosure rate also ranked highest in the nation in September, the first time since April 2005 that Florida has held the No. 1 spot. Florida foreclosure starts in September increased 24 percent from a year ago — the 11th straight month with an annual increase — and Florida bank repossessions (REO) increased 23 percent year over year — the ninth straight month with an annual increase.

Arizona REOs in September increased 2 percent from a year ago, the first year-over-year increase in Arizona REOs since November 2011, but the state’s overall foreclosure activity was down on an annual basis both in September and the third quarter thanks to big drops in foreclosure starts. Despite those decreases, one in every 125 Arizona housing units had a foreclosure filing during the third quarter — the nation’s second highest state foreclosure rate.

California also posted a foreclosure rate of one in every 125 housing units with a foreclosure filing in the third quarter, but the state’s foreclosure rate was slightly lower than that of Arizona, ranking No. 3 among all states for the quarter. A total of 109,369 California properties had foreclosure filings during the quarter, the highest of any state but still down from the previous quarter and a year ago.

California foreclosure auctions and REOs in the third quarter both increased from the previous quarter, but foreclosure starts (NODs) dropped 19 percent from the previous quarter. California foreclosure starts in September dropped to their lowest level since December 2006 — a 69-month low.

Other states with foreclosure rates ranking among the top 10 in the third quarter were Illinois (one in 126 housing units with a foreclosure filing), Georgia (one in 151), Nevada (one in 158), Ohio (one in 197), Michigan (one in 201), South Carolina (one in 215), and Colorado (one in 216).

Days to foreclose at record 382 days, legislation extends process in some states
U.S. properties foreclosed in the third quarter took an average of 382 days to complete the foreclosure process, up from 378 days in the previous quarter and up from 336 days in the third quarter of 2011. It was the highest average number of days to foreclose going back to the first quarter of 2007.

The average time to complete a foreclosure increased substantially from a year ago in several states where recent legislation and court rulings have extended the foreclosure process. These states included Oregon (up 62 percent to 193 days), Hawaii (up 62 percent to 662 days), Washington (up 62 percent to 248 days) and Nevada (up 42 percent to 520 days).

The average time to foreclose decreased from a year ago in 15 states, including Arkansas (down 49 percent to 199 days), Michigan (down 15 percent to 226 days), Maryland (down 9 percent to 541 days), California (down 8 percent to 335 days), and New Jersey (down 4 percent to 931 days).

New Jersey documented the second longest state foreclosure timeline in the third quarter behind New York, where the average time to complete a foreclosure was 1,072 days for properties foreclosed during the quarter. Florida registered the third highest state foreclosure timeline, 858 days — down slightly from 861 days in the previous quarter — and Illinois registered the fourth highest state foreclosure timeline, 673 days.

Report Methodology
The RealtyTrac U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing entered into the RealtyTrac database during the month and quarter — broken out by type of filing. Some foreclosure filings entered into the database during a month or quarter may have been recorded in previous months or quarters. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90 percent of the U.S. population. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). For the quarterly report, if more than one foreclosure document is received for a property during the quarter, only the most recent filing is counted in the report. Both the quarterly and monthly reports check if the same type of document was filed against a property previously. If so, and if that previous filing occurred within the estimated foreclosure timeframe for the state where the property is located, the report

 

Source : RealtyTrac

IMPORTANT NOTICE from Cook County Assessor's Office 10/09/12

The Assessor’s Office has been informed that taxpayers are being solicited by people claiming to work at the Cook County Assessor’s Office. These solicitors have been notifying taxpayers that they have missing exemptions and are encouraging taxpayers to hire them to file Certificates of Error on their behalf. The Assessor wants taxpayers to be aware that they do not need representation to file for a Certificate of Error. Certificate of Error exemption forms may be downloaded from this Web site. Taxpayers may also call our office and request that a Certificate of Error exemption form be mailed to them.

More info on http://www.cookcountyassessor.com/

 

Foreclosure Market Trends Report - October 2012

a4ba5136-f108-4f36-93a1-e5d63bda6c83.pdf Download this file

Bank Of America Reaching Out to Select Borrowers for 2nd Lien Forgiveness

As part of Bank of America’s deal in the national mortgage settlement, the bank announced Friday it plans on offering full forgiveness for second liens to certain homeowners.

The bank is in the process of mailing about 150,000 letters to pre-qualified homeowners with offers to wipe out their second liens.

The vast majority of customers who are eligible for the program are behind on their second mortgage, but some borrowers who are current on their second lien can qualify if they are associated with a first lien that is severely delinquent and meets the program criteria.

The intention of the program is to reduce monthly debt obligations for homeowners and help borrowers stay in their home.

Eligible customers must also have a second lien owned and serviced by BofA, and they must also meet certain threshold delinquency or property value criteria.

BofA sent letters through Federal Express or certified mail, and only those who receive the letter are eligible.

Customers can decline the offer within 30 days of receiving the letter.

BofA also reminded customers that forgiven mortgage debt is taxable. While the Mortgage Debt Relief Act of 2007, which is set to expire at the end of this year, does allow for forgiven debt related to a foreclosure to be exempt as taxable income, BofA urged customers to seek advice from a tax professional.

Source DSNews By : Esther Cho

CoreLogic: Home Prices Sustain Recovery with 4.6% Yearly Gain

Home prices continued to trend upwards in August, posting both yearly and monthly gains for the sixth consecutive month, CoreLogic reported Tuesday.

When including distressed sales, home prices in August rose 4.6 percent from a year ago, marking the biggest yearly gain since July 2006. Month-over-month, prices were up 0.3 percent from July to August.

When excluding distressed sales, which are short sales and REO transactions, prices were up yearly and monthly by 4.9 percent and 1 percent, respectively.

CoreLogic’s Pending HPI points to further increases into September. Prices including distressed sales are expected to rise by 5 percent yearly and 0.3 percent monthly.

“Sustained economic recovery in the U.S. requires a healthy housing market. You cannot have a healthy housing market without price stabilization and ultimately home price appreciation,” said Anand Nallathambi, president and CEO of CoreLogic, in a release. “Improving pricing trends over the past few months and our forecast for continued gains in September bode well for a progressive rebound in the residential housing market.”

On a state-by-state basis, all but six states saw price gains.

Including distressed sales, the five states that appreciated the most over a one-year period were Arizona (+18.2 percent), Idaho (+10.4 percent), Nevada (+9.0 percent), Utah (+8.9 percent) and Hawaii (+8 percent).

Rhode Island led with the biggest decline, where prices fell 2.6 percent, followed by Illinois (-2.3 percent), New Jersey (-1.4 percent), Alabama (-0.7 percent) and Connecticut (-0.5 percent).

Phoenix continued to outshine other metros, rising 21.8 percent from August 2011. Houston ranked second, but was still far behind, gaining 6.3 percent during the same period. Washington D.C. (+4.8 percent), Dallas (+4.3 percent), and Los Angeles (4 percent) were also among the top five.

Souce DsNews By : Esther Cho

Foreclosures Decline but Remain High, Prepayments Surge: LPS

Foreclosure inventory continues to decline but remains more than eight times what it was in the decade prior to the housing crisis, according to the latest report from Lender Processing Services (LPS).

Noncurrent loans make up 10.9 percent of all loans as of August, demonstrating a year-over-year change of -7.6 percent, according to LPS.

As of August, the delinquency rate stands at 6.9 percent, and the foreclosure rate is 4.0 percent.

There remains a large gap in the foreclosure rate between judicial states and non-judicial states. In fact, in judicial states the rate remains near an all-time high of 6.49 percent, while the foreclosure rate in non-judicial states is 2.28 percent.

The amount of loans 90 or more days delinquent is near half of its January 2010 peak. The majority of these loans are more than nine months delinquent. About 43 percent are at least 12 months delinquent.

The overall delinquency rate declined 2.3 percent in August.

States ranking highest for non-current loans include Florida, Mississippi, New Jersey, Nevada, and New York.

States with the lowest percentages of non-current loans include Montana, Alaska, South Dakota, Wyoming, and North Dakota.

LPS noted prepayment activity was up “significantly” in August, nearing levels last reported in 2005.

The annualized prepayment rate at the end of August was almost 25 percent, according to LPS’ findings.

Prepayment was highest among loans with higher combined loan-to-value ratios (CLTVs). For example, among loans with more than 120 percent CLTV, prepayment increased more than 65 percent year to date.

According to LPS, this trend is significant because prepayments are an indicator of refinance activity.

In August, 2011 vintage loans experienced a 23 percent increase in prepayments over the month.

Loans with vintages from 2007 and earlier experienced a prepayment increase of just 9 percent, which LPS interprets as signs of a “refi burn out.”

“[I]t is also becoming evident that loans originated in 2007 and earlier have diminished prospects for conventional refinancing opportunities,” stated Herb Blecher, SVP of applied analytics at LPS.

“Fewer than 30 percent of these vintages remain both active and current, and on average, they are marked by larger negative equity positions and lower credit scores,” Blecher explained.

 

Source DsNews by : Krista Franks Brock