Illinois Takes Lead for Foreclosure Rate, REOs Continue to Fall

A new state took the spotlight in RealtyTrac’s Foreclosure Market Report for August.

For the first time since January 2005, which is when RealtyTrac began the report, Illinois ranked number one for its foreclosure rate. In August, one in every 298 Illinois housing units had a foreclosure filing.

The state also saw foreclosure activity hike 29 percent from July, and on a yearly basis, foreclosure starts were up 18 percent, scheduled foreclosure auctions shot up 116 percent, and bank repossessions increased by 41 percent.

Florida ranked second, where one in every 328 housing units had a foreclosure filing, followed by California, Arizona, and Nevada.

“The increases in Florida and Illinois pushed foreclosure rates in those states to the two highest in the country – supplanting the non-judicial states of Arizona, California, Georgia and Nevada. Previous to August, the nation’s top two state foreclosure rates have been from those four non-judicial states every month since December 2010,” said Daren Blomquist, vice president of RealtyTrac.

RealtyTrac also found that after three straight months of yearly increases, foreclosure starts fell in August by 13 percent after a 17-month high in August 2011.

However, 18 states saw year-over-year increases in foreclosure starts. The states with significant yearly increases were Washington (143 percent), Pennsylvania (129 percent), Alabama (102 percent), New Jersey (101 percent), and New York (63 percent).

Bank repossessed fewer properties in August, with REO activity declining 2 percent month-over-month and 19 percent year-over-year, marking the 22 month in a row of yearly declines.

Seven California metros ranked highest for their foreclosure rates. Modesto, where one in every 172 housing units received a foreclosure filing, led took the first spot. Merced was second, followed by Bakersfield, Fresno, Stockton, Riverside-San Bernardino-Ontario, and Chico.

 

Source DsNews by: Esther Cho

How Is National Mortgage Settlement $ Being Spent?

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Foreclosure-Related Sales Price Up as Inventory Shrinks: RealtyTrac

Prices went up for foreclosure-related sales on a quarterly and yearly basis, with the annual increase marking the first rise in two years, according to RealtyTrac’s Q2 foreclosure sales report.

The average price for foreclosure-related sales stood at $170,040, a 6 percent increase from the previous quarter and a 7 percent hike from the second quarter of 2011. The annual increase is the first since the second quarter of 2010 and the biggest yearly increase since the fourth quarter of 2006.

“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,” said 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.”

Nearly a quarter (23 percent) of all home sales in the second quarter were either bank-owned properties or in some stage of foreclosure, compared to 22 percent in the previous quarter and 19 percent a year ago in the second quarter.

However, the actual number of foreclosure-related sales decreased 12 percent to 224,429 from the previous quarter and fell 22 percent from a year ago. The annual decrease is the first after five quarters of increases.

Homes in foreclosure and REOs sold at an average discount of 32 percent below non-foreclosures, up from 30 percent in the previous quarter and second quarter of 2011.

Pre-foreclosure sales, which are generally short sales, are starting to catch up to REO sales, with bank-owned sales outnumbering short sales by 9,833, the smallest difference since the third quarter of 2007.

Third parties bought 107,298 homes in pre-foreclosure in Q2, a decrease of 10 percent from Q1 and a 9 percent decrease from a year ago.

Out of all sales in the second quarter, 11 percent were counted as pre-foreclosures.

Pre-foreclosures sold for a price that averaged 26 percent below non-foreclosure homes. In the previous quarter, pre-foreclosure discounts averaged 24 percent and a year ago, the discounts averaged 18 percent.

Pre-foreclosure homes sat on the market longer and took an average of 319 days to sell after starting the foreclosure process compared to 306 days in the previous quarter and 245 days a year ago.

Third parties bought 117,131 REOs in the second quarter, a 13 percent decrease from the previous quarter and a 31 percent plunge from the second quarter of 2011.

REO sales made up 12 percent of all sales in the second quarter and had an average sales price of $155,892. The price is a quarterly and yearly increase of 6 percent and 10 percent, respectively.

REOs sold at a 37 percent discount compared to non-foreclosures, unchanged from the previous quarter but down from 38 percent a year ago.

Source DsNews By: Esther Cho

HomePath Buyers Guide for a Fannie Mae-owned Homes

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FHA Announces New Details for Distressed Loan Sale ( Chicago )

During a conference call Wednesday, Acting Federal Housing Administration (FHA) Commissioner Carol Galante announced applications are now being accepted for the Distressed Asset Stabilization Program, which is scheduled to hold its next sale in September.

About 40 percent of the sale will be concentrated in four hard-hit metro areas: Chicago, Newark, Phoenix, and Tampa, where about 3,500 loans are to be sold.

Assuming this upcoming sale is successful, Galante said FHA intends to look at other geographies with significant inventory for future sales.

When the program expansion was first announced in June, an upwards of 5,000 loans were expected to be sold. Now, Galante said the national number appears to be closer to 9,000.

While the new number is an approximation for now, Galante explained much more interest has been generated for the program since the loan sales will be held on an ongoing quarterly basis.

FHA first introduced the program in 2010 as a pilot, which led to the purchase of 2,100 single-family loans. The program prevents FHA-insured loans from getting lost to foreclosure by allowing investors to purchase at-risk mortgages, then turn them into performing loans.

A servicer can place a loan into the loan pool for sale if the borrower is at least six months delinquent, all loss mitigation options have been exhausted, a foreclosure proceeding has been initiated, and if the borrower is not in bankruptcy.

The FHA-insured notes are sold to investors at a price that is generally below the outstanding principal balance.

FHA also announced new neighborhood stabilization requirements for the hard-hit metros selected. In those areas, no more than 50 percent of loans purchased within a pool can be sold as REO properties.

“These markets were chosen because of the high concentration of FHA loans in the pipeline for foreclosure and because each allows us to test this strategy under a variety of market conditions,” said Galante.

Other options must be sought such as leasing the property to the homeowner or a modification. A short sale to a private investor doesn’t qualify for neighborhood stabilization credit.

For the program, 1-4 units will also be eligible, not just single-family homes.

FHA stated in a release that eligible investors need to have experience in asset management and property management, as well as a proven track record in helping seriously delinquent borrowers find an alternative to foreclosure.

Source DSNews by :Esther Cho

Short Sale Bill Addresses Slow Approval from 2nd Lien Holders

Rep. Jerry McNerney (D-Stockton) recently introduced a bill to speed up the short sale process by requiring subordinate mortgage lien holders to make a decision on a short sale within 45 days.

McNerney’s bill proposes that if the lender does not make a decision within the given time period, the short sale will be approved on the 46th day.

The bill, titled Fast Help For Homeowners (FHFH) Act, received strong support from the National Association of Realtors (NAR).

“Second mortgage lien holders frequently hold up and cancel the short sale transaction while trying to collect the largest possible payout in exchange for releasing the homeowner’s lien, even though the secondary lien holder often gets nothing if the home ends up going into foreclosure,” said NAR President Moe Veissi, in a statement. “While efforts have been made to improve primary lien holders’ response times, issues still abound with second and subsequent lien holders, and this legislation is a step in the right direction.”

The NAR also stated that its members continue to report delays in completing short sale transactions due to drawn out response times for whether or not an offer was accepted.

In a recent DS News interview with RealtyTrac VP Daren Blomquist, issues with second liens was also noted as problem for servicers when attempting to complete a short sale transaction.

The bill is cosponsored by Reps. Dennis Cardoza (D-California), Tom Rooney (R-Florida), George Miller (D-California), Jim Costa (D-California), Barbara Lee (D-California), and Richard Nugent (R-Florida).

 

Souce DSNews by; Esther Cho