Foreclosure Heat Map for December by Realty Trac

Highest December Foreclosure Numbers by State

BofA offers up to $20,000 to shortsellers

Foreclosure review program

Homeowners who received a foreclosure filing in 2009 or 2010 may be eligible to have their cases reviewed for errors under a new federal program. Some may receive compensation for shoddy foreclosures.

Tens of thousands of South Florida homeowners who were in foreclosure in 2009 and 2010 will begin receiving letters this week asking if they would like to have consultants go through their case and check for errors.

Under a new federal foreclosure review program, major servicers must hire independent consultants to search for foreclosure errors and provide financial compensation if the reviewers find damages.

Fourteen mortgage servicers have been tasked with hiring reviewers to look over the foreclosures they processed in 2009 and 2010, after an audit by the Office of the Comptroller of the Currency found widespread evidence of shoddy home repossessions.

Here’s how the program will work:

Between now and December 31, homeowners eligible for the program will receive letters from their mortgage servicers asking if they would like to have their foreclosure cases reviewed. Homeowners have until April 30, 2012 to respond.

Eligible homeowners who request a review will have their cases looked over by an independent consultant and will receive a report with the findings of the review. If the reviewer finds that an improperly handled foreclosure caused financial injury, the homeowner will be eligible for financial compensation.

The 14 servicers involved in the review include major players in South Florida like Bank of America, Wells Fargo, Chase Bank and CitiMortgage.

The review initiative could cover more than 4.5 million foreclosure cases nationwide, and tens of thousands in South Florida.

There is no cost to participate in the review process, and only primary residences are eligible for the program.

Different types of financial losses could be eligible for compensation. For example, a homeowner who was foreclosed upon while actively engaged in the mortgage modification process could be eligible for compensation. Homeowners who were charged excessive fees by servicers may also receive some kind of refund.

For more information, visit independentforeclosurereviews.com or call 1-888-952-9105.

Banks bait-n-switch

The top four banks JP Morgan, Bank of America, Citigroup and Wells Fargo have plenty of money to lend, They are all advertising new record-low mortgage rates. At first glance, one would think those very attractive rates would spur on both home buying and refinancings.

The problem is consumers often find (once in the door) they can't access those rates and are instead either pushed to higher rates or told they do not qualify altogether. Two of every three mortgage refinancings over the last three years have gone to higher income households with the bulk of refinancings going to higher coupon loans.

How is it that the banks can now disqualify Americans from refinancing at lower rates and lower payments when they are currently performing on loans at higher rates and higher payments?

Even more appalling, mortgage rates should actually be lower than advertised. The spreads between the average national rate on the 30-year fixed mortgage and the 10-year treasury rate seen over the past 10 years has been 153 basis points. On Friday 10/14, the 10-year treasury rate was at 2.26%, while the average national mortgage rate advertised by the banks was at 4.17%, a shocking 191 basis point spread.

The average rate presented to consumers should now be more around 3.79%.

Banks push to expedite Florida foreclosures

Florida is among 26 states that requires banks to file foreclosures through the court system, a process that takes an average of 728 days to complete. In states where foreclosures aren't routinely handled by the courts, a foreclosure takes an average of 550 days to process, from default notice to repossession.

We don't want to be too quick to condemn the Florida judicial system.

One of the main reasons the foreclosure process has slowed here and elsewhere is because banks temporarily stopped adding cases to the court system about a year ago and pulled many others from the system when it became apparent that documents in some cases had been lost or illegally signed. Another reason is the delays are partially due to lenders not wanting to have the property on their real-estate rolls because they don't want to pay association fees.

Banks have also been criticized for agreeing to short-term, trial mortgage modifications for customers, only to later refuse to grant any kind of long-term solution for the strapped homeowners, many of whom are living in houses now worth half what they paid for them just a few years ago.

None-the-less, the Florida Bankers Association is pressuring state lawmakers to speed up the court process.  Legislators are answering by considering proposals that would divert noncontested foreclosures from the courts, allowing banks to handle them in much the same way they repossess cars. If such a measure became law, it would likely affect houses entering foreclosure after June 2012.

Housing Market Indicators

*month-to-previous-year comparison

Florida existing home sales: +15%

Florida existing condo sales: +17%

Florida existing home median price: $137,500

Florida existing condo median price: $91,900

Florida consumer confidence: 64

==============================

*month-to-previous-month comparison; all housing types

National existing home sales: -3.5%

National existing home median price: $168,300

National (Freddie Mac) mortgage rate: (all housing types) 3.94%

Occupy Movement Meetups Everywhere

According to the Meetup.com website, the Occupy Movement is growing internationally. As of Thursday, October 13th, the website has listed 1,641 cities holding scheduled events in support of the Occupy Wall Street group in New York City.

Another mortgage hurdle? Sheesh!

On October 1, 2011, the cost of a mortgage could rise significantly. Current FHA and GSEs mortgage loan limits are scheduled to decrease, lessening the availability of mortgage credit. Lowering the loan limits will force buyers to come up with larger down payments.

The new limits, published by HUD and the Federal Housing Finance Agency (FHFA), show that more than 669 counties in 42 states and the territories will be negatively impacted. The average decline in loan limits will be more than $68,000. Monroe County will be the hardest hit within Florida. The current FHA loan limit in Monroe is $729,750, but as of October 1st the mortgage limit is scheduled to drop to $529,000 a difference of ($200,750)

The timing couldn't have come at a worse time, just when the housing market has shown just a bit of light. Now this move could again hold back the housing recovery.

An (Intense) Analysis of the Obama Jobs Plan

President Obama's jobs proposal would help stabilize confidence and keep the U.S. from sliding back into recession.

The plan would add 2 percentage points to GDP growth next year, add 1.9 million jobs, and cut the unemployment rate by a percentage point.

The plan would cost about $450 billion, about $250 billion in tax cuts and $200 billion in spending increases.

Many of the president's proposals are unlikely to pass Congress, but the most important have a chance of winning bipartisan support.

Click here to read the full article

By Mark Zandi Moody's Analyst
September, 2011

Bipolar housing market

In America, it’s starting to feel as if there are two housing markets. One for the rich and one for everyone else.

Consider Detroit. In the historic Green Acres district, a haven for hipsters, a pristine, three-bedroom brick Tudor recently sold for $6,000 – about what a buyer would have paid during the Great Depression. Yet just 15 miles away, in the posh suburban enclave of Birmingham, bidding wars are back. Multi-million-dollar mansions are selling quickly. Sales this August were up 21 percent from the previous year.

Think of this as two housing markets. In the luxury sector, occupied by 1.5 percent of the U.S. population, the recession is a memory and sales and prices are rising. “Luxury is the best performing segment of the housing market right now,” says Zillow.com chief economist Stan Humphries. But everywhere else, the market is moving sideways or getting worse.

In the housing market inhabited by most Americans, prices have fallen 30 percent or more since the peak in 2007. That’s a steeper decline than during the Depression. Almost a quarter of American homeowners owe more on their house than it’s worth. About half of homeowners couldn’t get a mortgage if they applied today.

The divide is also making credit a perk of the rich. Mortgage rates are the lowest in decades. But what good are absurdly cheap rates if you can’t get a mortgage?

Pickup in Foreclosure Activity

Lenders foreclosed on 64,813 properties last month, and are now on track to repossess 800,000 this year.   228,098 U.S. homes received a foreclosure-related notice last month. That translates to one in every 570 U.S. households.

The increase in foreclosure processing by the banks could also mean a potentially faster turnaround for the U.S. housing market. Experts say a revival isn't likely to occur as long as there remains a glut of potential foreclosures hovering over the market.

Zillow: Key West Home Prices

Key West Zillow Home Value Index

Key West Home Values - Interactive chart

New Foreclosure Wave

Banks have stepped up their actions against homeowners who have fallen behind on their mortgage payments, setting the stage for a fresh wave of foreclosures.

The number of U.S. homes that received an initial default notice jumped 33 percent to 78,880 in August from July, the biggest monthly gain in four years.

California saw a 55 percent increase in homes receiving a default notice last month, while in Indiana they climbed 46 percent. In New Jersey, default notice increased 42 percent. Nevada still leads the nation, with one in every 118 households receiving a foreclosure-related notice last month.

Rounding out the top 10 states with the highest foreclosure rate in August are California, Arizona, Georgia, Idaho, Michigan, Florida, Illinois, Colorado and Utah.

Better Strategy For the Economy

A better strategy -- one that would truly be in the best interests of lenders and mortgage investors -- would be to avert foreclosures by writing down the principal on loans.

read more from Bloomberg article

FHFA filed lawsuits today against Bank of America & 16 more

The Federal Housing Finance Agency alleged the banks mislead Fannie Mae and Freddie Mac about residential mortgage-backed securities.

The agency named Bank of America, Citigroup and JPMorgan Chase as well as Barclays PLC, Nomura Holdings Ltd., HSBC Holdings PLC, Societe General SA, Morgan Stanley, Ally Financial, Royal Bank of Scotland, Credit Suisse Group AG, Deutsche Bank AG and First Horizon National Corp.

The complaints say the banks misled Fannie Mae and Freddie Mac about the soundness of the underlying mortgages. The housing finance agency is seeking to have some defendants refund the investments with interest and pay other damages, including punitive damages for alleged misconduct.

What's the down payment on $30 Billion?

White House officials are looking for private partners to remove as much as $30 billion in single-family properties currently on the books of Fannie, Freddie, and the Federal Housing Administration.

Among possible investors, officials said they were looking for private-equity funds, financial institutions, and perhaps local governments and nonprofits to buy foreclosed properties and offer them as rentals in stressed housing markets.

Another approach would allow investors to partner with Fannie and Freddie in a joint venture to buy a pool of converted rental homes, with an equitable split between the government entities and investors to reduce losses at the mortgage giants.

Such partnerships with private-sector investors "may reduce taxpayer losses" said Edward DeMarco, acting director of the Federal Housing Finance Agency.

Just the Facts

Housing Market Indicators

Florida existing home sales: +12% (month-to-previous-year comparison)

Florida existing condo sales: +12% (month-to-previous-year comparison)

Florida existing home median price: $136,500

Florida existing condo median price: $90,900

Florida consumer confidence: 68

National existing home sales: -3.5% (month-to-previous-month comparison; all housing types)

National existing home median price $174,000

National (Freddie Mac) mortgage rate 4.15% (all housing types)

"Buy when there's blood in the streets"

Overall nationally, housing prices (new and resale) have dropped more on a percentage basis, than during the Great Depression of the 1930s.

New-home sales are shaping up to be the worst on records dating back 50 years. A seasonally adjusted annual rate of 298,000, the Commerce Department said today. That's less than half the 700,000 that economists say represent a healthy market. Last year, 323,000 homes were sold -- the worst year on records that go back to 1963.

Although mid-priced home sales fell last month, sales actually increased in July for homes selling for more than $750,000.

Interest rate lowest in 40 years

The average rate on a 30-year fixed mortgage fell to 4.15 percent this week -- the lowest level on records dating back to 1971.

Investors Buying Now

Investors targetlng foreclosures and other deeply discounted properties accounted for 18 percent of sales in July.

Foreclosures and short sales made up about 29 percent of all home sales last month. That's up from about 10 percent in past years.

Home sales on pace to be the worst in 14 years

Home sales fell 3.5 percent last month to a seasonally adjusted annual rate of 4.67 million homes, the National Association of Realtors said today. That's far below the 6 million that economists say must be sold to sustain a healthy housing market.

Many people are reluctant to purchase a home two years after the recession officially ended. Sales are lagging behind last year's 4.91 million sold -- the weakest in 13 years.

Bigger down payments, tougher lending rules, high debt and a shortage of desirable starter homes have kept many would-be buyers away. Even people with good credit and enough money for a down payment are holding off because they are worried home prices will keep falling.

The Housing Slump Gonna End?

A study, released today by Fiserv, predicted "a broad-based recovery for housing that will begin in early 2012," and home prices for more than 95 percent of metro areas will rise by the beginning of 2013.

"Between the first quarter of 2012 and the first quarter of 2013, homes are projected to increase by an average of 2.7 percent, with gains in 365 out of 384 metro areas," Fiserv said in a press release.

S&P downgrades US credit rating

The United States has lost its sterling credit rating from Standard & Poor's. The credit rating agency on Friday lowered the nation's AAA rating for the first time since granting it in 1917.

Stocks drop but hiring better than expected

Hiring picked up slightly in July and the unemployment rate dipped to 9.1 percent, an optimistic sign after the worst day on Wall Street in nearly three years.

The Labor Department says employers added 117,000 jobs last month. That's an improvement from the past two months.

The mild gain may ease investors' concerns after the Dow Jones industrial average plummeted more than 500 points over concerns that the U.S. may be entering another recession.

Agreement reached to raise the debt ceiling

Republican and Democratic leaders have agreed on a plan to raise the debt ceiling.

The announcement arrives after months of intense closed-door negotiations, and just two days before the deadline set by the Treasury Department.

The agreement would slow the growth of government spending over the next decade by $2-$3 trillion and allow enough borrowing to put off another vote to raise the ceiling to 2013. About $1 trillion will be cut immediately, and the details of the remaining spending reductions will be handled by a bipartisan committee of 12 lawmakers from both chambers, who will recommend cuts for Congress to vote on. To appease the GOP's conservative wing, the deal would also require a vote in both chambers on an amendment to the Constitution requiring the federal government to balance its budget each year.

Jobless Claims Dropped Last Week

Lets go all in, if we can get in

Economists say that by early 2006, we (the American Middle Class) started losing big. Here we thought we were on a roll. We got suckered into thinking we had the game beat and borrowed to the max. Where'd we get the money? Well, about 90% of our life savings was in our homes, so from 2003 to 2007, we took $2.3 trillion out through refinancing and equity loans and spent about $1.3 trillion of it just on stuff.

How's the game going now? Well, in terms of income, we've been falling behind for decades. So far we're told we've taken losses to the tune of 55% of the value of our homes. How much is that? In this game, the Federal Reserve keeps the books and they say $7.38 trillion of our wealth is now gone. Most of us didn't have much wealth to begin with — on average about $100,000. Now it's a much lower number, and we're debating whether it can still be called "wealth" at all?

Most of the middle class still want to play, but an unusually large number of us have been kicked out of the game altogether. The "unemployed" now amounts to over 9% of the total labor force. That's the number the government tells us anyway. There are also quite a few though that have given up and quit trying.  When they do that, the government won't even consider counting them in the stats. If you're not a player, or you've quit trying to be a player, it appears you become nobody.

In the movie "Wallstreet," Gordon Gecko said "It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred from one perception to another." For a long time now, that transfer of money has gone to the perception of the already rich and their stand-in corporations.

With the upper classes prospering and global markets booming, they don't need the U.S. middle class to play any more. If we do get in the game for another hand, what say we go all in. Heck, it's too late to play it close to the vest if we've already lost our shirt.

Obama helps a few more out-of-work homeowners

On Aug. 1, the FHA will extend the period for unemployed homeowners to miss mortgage payments to a full year from three or four months. That will allow qualified homeowners to go without making a monthly payment for 12 months before the foreclosure process begins.

The extended grace period only applies to FHA-backed loans, which are usually given to low- and middle-income borrowers and represent about 14 percent of all active mortgages and roughly 25 percent of new mortgages.

Last year, roughly 17,000 homeowners received a government-supported delay on their mortgage payments. About 3,500 borrowers with FHA-insured loans fall behind on their mortgages each month due to unemployment. Another 10,000 unemployed homeowners have taken advantage of a three-month delay in mortgage payments in the past year.

Administration officials hoped private lenders and government-controlled mortgage companies Fannie Mae and Freddie Mac would adopt a similar policy.

Fannie and Freddie signaled they would not.

The Great Recession lingers on Main Street

Economists say the recession ended two years ago, but if this is a recovery, its been the weakest and most lopsided of any since the 1930s.

Corporate profits are up by almost 50% since the recession "ended" in June 2009. Compare that to the first two years after the recessions of 1991 and 2001, profits rose 11 percent and 28 percent, respectively. Where do those profits go? Surprise, the wealthiest 10 percent of Americans own more than 80 percent of outstanding stock.

The typical CEO of a major company earned $9 million last year, up approximately 25% from 2009.

On the other side, new jobs pay less than the ones that vanished in the recession. The average worker's hourly wages, after accounting for inflation, were 1.6 percent lower in May than a year earlier. Despite cutting what they owe the past three years, the average household's debts equal 119 percent of annual after-tax income. At the same point after the 1981-82 recession, debts were at 66 percent; after the 1990-91 recession, 85 percent; and after the 2001 recession, 114 percent.

The working class continues to set records. Social programs accounted for a record 18 percent of personal income in the last three months of 2010. Almost 45 million Americans are on food stamps, another record.

Is it much of a surprise that a majority think the recession continues? Some 29 percent of that majority will go even further -- they say it feels more like a depression.

Emergency Homeowners Loan Program

HUD and the nonprofit housing advocacy group NeighborWorks America started a program last week offering loans that don't actually need to be repaid, if applicants meet certain requirements.

 The loans available to around 30,000 applicants, are interest-free. Payments go directly to the lender for a portion of the borrower's monthly mortgage, including missed payments or past due charges. And when the assistance period -- which runs for up to two years -- ends, 20% of the loan is forgiven with each passing year. In other words, for qualified borrowers who stay in their home for at least five years after the assistance period and who don't fall behind on their mortgage again, this money doesn't have to be paid back.

If they sell their home before the entire loan is forgiven, they'll be on the hook for the remaining amount. The same holds true if they fall behind on their mortgage payments again: they'll need to repay the remaining balance of the loan when they sell or refinance their home. Separately, borrowers aren't required to have equity in their home to receive this money.

While the limit each person will get is up to $50,000, loans will average about $35,000 per person, according to NeighborWorks America.

To be eligible, homeowners must have lost income and be at risk of foreclosure due to involuntary job loss, underemployment or a medical or other economic condition; details on the application process are available online through NeighborWorks America.

Applications will be taken through July 22nd.

Banks finally getting the picture?

Approximately 23% of homeowners with a mortgage are underwater. Another 2.4 million homeowners are teetering on the brink, with less than 5% equity in their home. If home prices drop further over the next year many of those owners could end up with negative equity.

Now --- Half of homeowners who owe 50% or more on their home than it's worth and default do so strictly because of negative equity, according to a Federal Reserve Board study.

So --- Both GMAC Mortgage and Wells Fargo have started either reducing some mortgage balances, deferring payments or offering subsidized refinancing in areas with large declines in home values -- like Miami and Las Vegas.

and now something completely different

Home Prices Over The Past Year

click graph to enlarge

What was that?

National News

Prices rose in 13 of the 20 cities tracked by the Standard & Poor's/Case-Shiller home-price index, according to the April report released today. The index covers metro areas that together make up about 50 percent of U.S. households. It measures sale prices of select homes in those cities compared with prices in January 2000. It then provides a three-month average. The April data is the latest available.

The sharpest increases were in Washington, D.C. The next-largest were in Seattle, San Francisco, and Atlanta.

It's much too early to tell if this is a turning point or simply due to the usual spring market increase. The only times in recent history when prices didn't see a spring uptick was in the thick of the crash. Remember there's still nearly 2 million foreclosures could hit the market over the next two years.

Freddie & Fannie Summer Clearance Sale

filed under foreclosures national news

Both Fannie Mae and Freddie Mac have massive numbers of properties taken back through foreclosures. Fannie Mae had 153,549 of them at the end of the first quarter, and Freddie Mac owned 65,174. They need to quickly find new owners.

Both have now begun time-limited sales campaigns with significant incentives for new owner-occupant purchasers, and are now offering to pay up to 3.5 percent of the price of the house toward buyers’ closing costs.

Fannie and Freddie both do repairs to bring houses up to what they believe are marketable standards, but all homes are sold as is. Fannie also has what it calls a “renovation mortgage” option that provides additional mortgage amounts to cover fix-ups. Fannie’s program even offers mortgage money to help finance purchases, sometimes with as little as a 3 percent down payment. Freddie does not offer special mortgage financing for buyers during the sale period, but has other inducements, including two-year home warranties and 30 percent discounts on appliances. There's even an extra $1,200 cash for the real estate agent.

Fannie’s program covers properties on which contracts are accepted and close no later than Oct. 31, while Freddie’s sale requires contracts no later than July 31 and closings by Sept. 30.

No investors allowed

Notorious Hacker's Den discovered in Wickford, Essex UK

Click picture to enlarge
Up to a dozen officers from the London Metropolitan Police raided a hacker's den, arrested and charged one Ryan Cleary with offences relating to his alleged involvement with the group Lulzsec.

The primary offence, was a conspiracy to hack computers and to then disseminate a program that would commit Distributed Denial of Service (DDoS) attacks. In all, Cleary was charged with four UK offences under Section 3 and 3A of the Computer Misuse Act of 1990 and one offence under Section 1 of the Criminal Law Act of 1997.

Obviously technically overmatched, a number of Cleary's targets included the UK's Serious Organised Crime Agency (SOCA), the International Federation of the Phonographic Industry (IFPI), and the British Phonographic Industry (BPI). Cleary could also face extradition to the US, where he may face offences relating to attacks on the Sony Corporation, the US Senate, the FBI and the CIA.

Apparently angered by the recording industry's attempts to limit the downloading of certain popular songs on the Internet without what he referred to as "highway robbery prices," the 19-year-old Cleary determined to "fight back against those agencies that were at fault."

Cleary operated from a deceptively non-descript beige bedroom with one feline co-conspirator. The Met Police had been monitoring the activities within the den for weeks. According to Police Sargent William Finkle, the optimum time for the raid was chosen when Cleary left the den and traveled to the kitchen where he was baking a pizza.

Fortunately there were no injuries reported by the police.

Happy Monday ;-)

Good Strategic Default Video from CBS

Gov gives Banks 30 more days to submit plans to fix foreclosure practises

In April of this year, Federal regulators told Citibank, Bank of America, JPMorgan Chase, Wells Fargo and a dozen more mortgage lenders and servicers that they had 45 days to hire auditors showing how many people could have avoided foreclosure in 2009 and 2010. They were also told by to reimburse homeowners who lost their homes through the banks "incorrect" foreclosure methods.

On Monday, the Department of Justice asked Regulators to give the financial firms another 30 days to coordinate with state and federal agencies.

Foreclosure Limbo

Millions are staying in their homes without paying their mortgages.

Some 4.2 million mortgage borrowers are either seriously delinquent or have had their cases referred to lawyers to pursue foreclosure auctions, according to LPS Applied Analytics. Of those, two-thirds have made no payments at all for at least a year, and nearly one-third have gone more than two years.

These cases can go on and on. Nationwide, it takes an average of 565 days to foreclose on borrowers in default from their first missed payments to the final auction. In New York, the average is 800 days and in Florida, where the "robo-signing" issue is particularly combative, it's 807.

Florida couple threatens bank with foreclosure

Eric Strachan AP ST. PETERSBURG, Florida — Months after Bank of America wrongly foreclosed on a house Warren and Maureen Nyerges had already paid for, they were still fighting to get reimbursed for the court battle.

So on Friday, their attorney showed up at a branch office in Naples with a moving truck and sheriff's deputies who had a judge's permission to seize the furniture if necessary. An hour later, the bank had written a check for $5,772.88.

After the moving company and sheriff's deputies get their share, the Nyerges should receive the rest of the money this week, ending a bizarre saga that started when they paid Bank of America $165,000 cash for a 2,700-square-foot foreclosed home in Naples in 2009.

About four months later, a process server knocked on their door and handed Warren Nyerges a notice of foreclosure.

"This is a big mistake," he recalled saying. "You must have the wrong house. We bought a foreclosure and don't have a mortgage."

That started 18 months of frustrating phone calls, paperwork and court hearings. Whenever Nyerges called the bank, representatives told him to "come up to date" with his payments. When he called 25 different law firms, no attorney would take the case. When he went to court, the lawyers for the bank filed incorrect motions and were woefully unprepared for the hearings.

Eventually the Nyerges fought the foreclosure and won, proving that they owned the home outright.

In September 2010, a judge ordered Bank of America to pay the couple's $2,534 attorney fees. But by last week, the bank hadn't paid up, so Allen got a judge's permission to seize assets.

This isn't the first time that Bank of America has tried to foreclose on a property that was owned by a person without a mortgage. In 2009, a Fort Lauderdale man named Jason Grodensky bought a home in cash from Bank of America in a short sale. But in court, the foreclosure case continued and a judge ordered the property to be sold. Bank of America acknowledged the error and rescinded the foreclosure.

The Nyerges case is symbolic of the foreclosure crisis. Courts are backlogged, and banks and their attorneys aren't scrutinizing foreclosure paperwork. And Nyerges said he's still upset with Bank of America.

"They couldn't even spell our name right in the apology," he said.

Record Low Equity

Standard & Poors signals double dip in housing

U.S. home prices fell in March for the eighth straight month, confirming the beleaguered housing market has entered a double-dip recession.

Home prices in 20 major U.S. cities declined 0.8% in March on a non-seasonally adjusted basis, according to the Case-Shiller home-price index. The S&P/Case-Shiller index is based on a three-month moving average of home prices. So the March data reflect price data for January, February and March. This makes the index less volatile than other house-price gauges.

How each of the 20 cities fared over the past year:

Minneapolis, down 10%
Phoenix, down 8.4%
Chicago, down 7.6%
Portland, OR, down 7.6%
Seattle, down 7.5%
Tampa,down 6.9%
Charlotte, down 6.8%
Cleveland, down 6.3%
Miami, down 6.1%
Las Vegas, down 5.3%
Atlanta, down 5.2%
San Francisco, down 5.1%
San Diego, down 4.0%
Denver, down 3.8%
New York, down 3.4%
Boston, down 2.7%
Dallas, down 2.5%
Los Angeles, down 1.7%
Detroit, down 0.9%
Washington D.C., up 4.3%

U.S. home purchases by foreigners surge $16 billion

Total residential international sales in the U.S. for the year ending March 2011 equaled $82 billion, up from $66 billion in 2010.

The U.S. has always been a desirable place for foreign buyers to own property. U.S. homes are generally less expensive than comparable foreign properties, homes in this country are viewed as a secure investment, and the U.S. market offers rental opportunities and long-term appreciation potential.

Foreign buyers are primarily interested in three factors when deciding where to buy in the U.S.: proximity to their home country, convenience of air transportation, climate and location. Generally, the East Coast attracts European buyers. The West Coast remains popular for Asian purchasers. Mexican buyers are traditionally attracted to the Southwestern markets. Florida is most popular among South Americans, Europeans and Canadians.

Recent international buyers came from 70 different countries, up from 53 countries in 2010. For the fourth consecutive year, Canada was the top country of origin, with 23 percent of sales to foreigners. China was second most popular, with nine percent of international sales this year. Tied for third were Mexico, the U.K. and India. Argentina and Brazil combined reported an increase in foreign sales with five percent, up from two percent in 2010. The top five countries of origin accounted for 53 percent of international transactions in 2011.

The average price paid by an international buyer was $315,000 compared to the overall U.S. average of $218,000. However, 45 percent of international purchases were under $200,000. Sixty-one percent of foreign buyers purchased a single-family home while 36 percent bought a condo/apartment or townhouse.

In addition, 62 percent of international purchases were reported as being all cash. This percentage is significantly higher than all-cash purchases for domestic buyers, mostly due to the differences in international credit reporting standards.

Florida had 31 percent of total international transactions this year, the most of any state. California had 12 percent, Texas had nine percent, and Arizona rounded out the top four with six percent of international transactions.

Opportunity calling! Buy Foreclosures Now!

Homes are selling at steep discounts, especially bank-owned homes that have been taken in foreclosures. The average Bank owned property cost about 35% less than comparable properties. Also weighing on market prices are short sales, meaning homes where the selling price is less than what is owed by the borrowers. These sold at an average 9% discount.

There were 158,000 deals involving distressed properties nationwide during the first quarter of 2011, but that was less than half the nearly 350,000 deals during the same period two years earlier. So now, there's a three-year inventory of homes in foreclosure for sale, a whole 1.9 million distressed properties.

*Las Vegas has so many foreclosures that 53% of all the homes sold in Nevada are in some stage of foreclosure.

*Foreclosures represent 45% of sales in California and Arizona, and 28% of all existing home sales during the first three months of 2011.

*In New York State, the discount for REOs was 53% during the first quarter. And it was nearly 50% in Illinois, Ohio, and Wisconsin.

Ouch! Time to Buy!

RENTS UP!

A growing number of Americans can't afford a home or don't want to own one. Permits for single-family home construction are on pace for their lowest annual level on records dating to 1960.

From the 1940s until 2007, homes appreciated an average of nearly 5 percent a year, adjusted for inflation. In the past four years, the median price of a single-family home has sunk 37 percent, by $57,500, to its lowest since 2002.

Before the housing bust, mortgage rates were so low it was often cheaper to buy than rent. That was true a decade ago in more than half the 54 biggest metro areas, according to Moody's Analytics. Today, by contrast, it's cheaper to rent in about 72 percent of metro areas.

The proportion of U.S. households that own homes is at its lowest point since 1998. When the housing bubble burst four years ago. Since the housing meltdown, nearly 3 million households have become renters. At least 3 million more are expected by 2015, according to census data analyzed by Harvard's Joint Center for Housing Studies and The Associated Press. All told, Nearly 38 million households are renters.

The number of completed apartments averaged about 250,000 a year before the boom. They fell to 54,000 last year and will probably number around the same this year. But then the number will likely double to about 100,000 in 2012 and hit 250,000 by 2013 or 2014, according to the CoStar Group, a research firm. The lag is due to the time it takes for an apartment building to be completed: an average of 14 months.

Looks like demand is going to push rents up for a while.

Mortgage Rate Trend Index

Fixed mortgage rates fell this week to the lowest point of the year, offering incentive for homeowners to save money by refinancing their loans. Freddie Mac said Thursday that the average rate on the 30-year loan fell to 4.61 percent. That’s down from 4.63 percent and the lowest level since mid-December.

Don’t expect much change in mortgage rates over the short term. 44% of experts polled this week by Bankrate.com Only 17% expect further declines, however, with 37% predicting an increase.

The average rate on the 15-year fixed mortgage, a popular refinance option, slipped to 3.80 percent. That marked the lowest point since late November. Rates track the yield on the 10-year Treasury note, which fell to the lowest level of the year this week. The number of borrowers looking to refinance is now at the highest level since the second week of December, according to the Mortgage Bankers Association. Refinancing though, is only at half the level it reached in the fall of last year when mortgage rates fell to record lows. The rate on the 30-year home loan hit a four-decade low of 4.17 percent in November. The 15-year mortgage rate reached 3.57 percent that same month, the lowest level on records dating back to 1991.

Weak Housing Market Still

Here's a news flash for ya.  Fewer people bought previously occupied homes in April, the National Association of Realtors said Thursday. Sales fell to a seasonally adjusted annual rate of 5.05 million units, far below the 6 million homes a year that economists consider a healthy market.

Finding buyers for high-end homes is about to become a tad harder

On 9/30/2011, the lending limits for Fannie Mae (FNMA), Freddie Mac (FHLMC) and FHA are scheduled to be cut. The idea behind the change is to get federal taxpayers out of the business of subsidizing home sales in high-priced areas. What that means for Key West is that the availability of mortgages for high end homes is going to drop in a few months. That is of course unless some in Congress are successful in their push to extend the limits.

The biggest change in limits will come from the areas that have the highest home values. These are pretty significant drops. There are 88 counties across the country that will see their mortgage limit cut by more than $100,000. In Monroe County, FL the current FHA maximum loan limit of $729,750 (for a single family home) will drop $201,000 (28%) to 528,750. For example: The down payment requirements on an $800,000 home will increase from approximately $70,000 (just under 9%) up dramatically to over $270,000 down (just under 34%.

Well, there's always seller financing?

Zillow says Key West Home Prices / Values UP?

According to the Zillow Home Value Index, Key West was one of only two regions in the area to show a gain in home prices and home values year over year in the last report of March 2011. The other being Chokoloskee based on limited sales data.

Does the move indicate a turnaround or is it a dead cat bounce as they say in the stock market? Stay tuned.

Region    Y-o-Y change      

Monroe   Y-o-Y change -3.2 % 

Big Coppitt Key  Y-o-Y change -3.2 % 

Big Pine Key   Y-o-Y change -7.7 %  

Chokoloskee   Y-o-Y change +5.4 %

Islamorada   Y-o-Y change -4.7 % 

Key Colony Beach   Y-o-Y change -3.8 %  

Key Largo   Y-o-Y change -14.2 % 

Key West   Y-o-Y change +7.0 %  

Marathon   Y-o-Y change -7.1 % 

Summerland Key   Y-o-Y change -3.5 % 

Tavernier   Y-o-Y change -4.2 %  

Banks propose billions to close foreclosure probe

Major banks are willing to pay to settle claims by federal and state officials of improper mortgage foreclosure practices, offering as much as $5 billion be used to compensate any borrowers previously wronged in the foreclosure process and provide transition assistance for borrowers who are ousted from their homes.


The banks' offer comes as mortgage companies and state and federal officials continue their efforts to strike a settlement of investigations sparked by allegations of "robo-signing" and other questionable foreclosure practices that came to light last fall.

Housing Market Indicators

Florida existing home sales: +12% (month-to-previous-year comparison) 


Florida existing condo sales: +24% (month-to-previous-year comparison)


Florida existing home median price: $126,300


Florida existing condo median price: $84,300


Florida consumer confidence: 72


National existing home sales: +3.7% (month-to-previous-month comparison; all housing types) 


National existing home median price $159,600


National (Freddie Mac) mortgage rate  4.78% (all housing types) 

New Uniform Foreclosure Guidelines

By the end of 2011, foreclosures under Fannie Mae and Freddie Mac – which hold or guarantee roughly 90% of all U.S. loans – must follow the same procedures. Loan servicers under Fannie and Freddie will be rewarded if they perform well and punished if they do not, according to the Federal Housing Finance Agency.

This initiative will direct servicers to reach families earlier, communicate more frequently and clearly, and provide relief.

Changes under the new guidelines:

• Loan servicers cannot work with homeowners on their loans while simultaneously moving forward with a foreclosure, called a “dual track” by FHFA.

• Loan servicers must contact homeowners as soon as they become delinquent and focus solely on remediating that delinquency. As long as the “borrower and servicer are engaged in a good-faith effort to resolve the delinquency,” a foreclosure cannot move forward.

• The servicer must formally review each case before taking any actions to consider the homeowner for any foreclosure alternatives.

• Loan servicers will be rewarded for speed. If a loan is modified in some way within four months, for example, the servicer receives $1,600. If it takes over seven months, however, the servicer gets only $400.

• Even if the foreclosure process has already begun, loan servicers will be paid a “financial incentive” if they continue to help the homeowners find an alternative to foreclosure.

• There will be fewer forms to fill out. It will simplify the process … by giving borrowers one application to fill out and servicers one application to review for all Freddie Mac loan modifications and foreclosure alternatives.

Investors buying as home prices are falling

Most major U.S. cities are seeing their home prices continue to fall, and at least 10 major markets are at their lowest point since the housing bubble burst.

The Standard & Poor's/Case-Shiller 20-city index (released today) showed home prices declined in 19 metro areas from January to February and 11 markets experienced faster price declines compared with the previous month. The index measures sales of select homes in those cities compared to January 2000. For each of the 20 metro areas it studies, the index provides an updated three-month moving average price. By measuring the sales price of the same homes over time, the index attempts to gauge true market values. Analysts expect the March index will fall past the low point.

The cities with the steepest declines from January were Minneapolis, San Francisco, Chicago and Miami.

New Florida Short Sale Bill

The number of short sales in Florida is rising, but lenders haven’t kept pace.

Bipartisan legislation was introduced last week to speed short sales by requiring lenders to decide whether to accept an offer within 45 days. The bill addresses the biggest obstacle for homebuyers and owners in short sale situations. By requiring lenders to make decisions on short sales within 45 days, this legislation would speed transactions and help prevent homes from going into foreclosure.

 

H.R. 1498 – the “Prompt Decision for Qualification for Short Sale Act of 2011” – would bring the processing time for short sale price approvals in line with the time required for other types of real estate deals by mandating a quicker response from the lender – at most 45 days after submitting the request for short sale approval.

Miami-Dade Jobs Picture Worse than Detroit?

Looking through Tuesday's (4-19) Labor Department jobs report, the unemployment picture for the Miami-Dade area of Florida appears more dire than that of even Detroit. The print media grabs that data and runs up stories about it being harder to find a job in Miami now than even in the Detroit.

How could that be?      After all, in March 2006, Michigan’s unemployment rate stood at 6.8 percent while Florida’s was less than half that at 3.1 percent.

Well, it's all there in the numbers folks, if you accept those as declared without review. The States with the highest unemployment rates in Tuesday’s Labor Department report are — California, Florida and Nevada. Detroit comes in at a rate of 11.1 percent, down from 14.5 percent a year earlier. Miami on the other hand is reported at 12.9 percent with a reported increase in unemployment from 12.5 percent a year ago. Motor City auto sales stats have influenced the reports having rebounded since they collapsed during the financial meltdown of 2008. On Tuesday, J.D. Power reported that car sales hit 11.1 million in April, almost 2 million higher than a year ago. Also, on the real estate front, the Federal Housing Finance Agency shows Detroit had a 25-point negative swing on its housing price index since 2000, while Miami-Dade was a much worse 55-point downward swing.

Keep in mind that the unemployment rate is is not as definitive as it might sound. Wouldn't it be much easier for us if a person was considered employed simply by the fact of them having a job? Instead, the powers that be throw in complications galore. For example: (1) A person who loses a 40 hour per week job, but works for one hour mowing a lawn for pay is classified as employed. (2) A person who simply expresses interest in having a job is classified as unemployed, while discouraged workers" who have lost a job, but do not make an effort to find a new job in a given week are not classified as unemployed or even as in the labor force.

One of the main reasons that Detroit’s unemployment rate went down is because its labor pool dropped, too. That is, the number of people either looking for a job or working declined from a year ago — down 2.8 percent. Hiring only went up 1 percent. That’s usually not a good sign, suggesting either people are moving out of town or are so discouraged by the hiring climate they’ve given up looking.

In Miami-Dade, though, the labor pool grew 1.1 percent in a year, while hiring went up 3.3 percent. That’s an encouraging trend when both measures increase, but the combination makes it harder to lower the unemployment rate.

Mortgage Lenders Told to Reimburse Homeowners

More than a dozen of the nation's largest mortgage providers have been told to reimburse homeowners over their mishandling of foreclosures.

These comprehensive enforcement actions, coordinated among the federal banking regulators, require major reforms in mortgage servicing operations.

Lenders were targeted over "a pattern of misconduct and negligence related to deficient practices in residential mortgage loan servicing and foreclosure processing," said the Federal Reserve Board, which teamed with the Treasury's Office of Thrift Supervision (OTS) and the Treasury's Office of the Comptroller of the Currency (OCC) in issuing enforcement orders against the banks.

Among the banks targeted for their foreclosure practices are Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo. Officials said that "unsafe and unsound practices, violations of law and foreclosure processes geared toward speed and quantity, instead of quality and accuracy" will include fines and other types of sanctions and oversight.

"These comprehensive enforcement actions, coordinated among the federal banking regulators, require major reforms in mortgage servicing operations," said acting Comptroller of the Currency John Walsh.

Homeowners who were illegally foreclosed upon will be paid back for losses incurred during the foreclosure processes, and auditors will further investigate for improper foreclosures and other mishaps.

"These reforms will not only fix the problems we found in foreclosure processing, but will also correct failures in governance and the loan modification process and address financial harm to borrowers," Walsh added. "Our enforcement actions are intended to fix what is broken, identify and compensate borrowers who suffered financial harm, and ensure a fair and orderly mortgage servicing process going forward."

An estimated 2.4 million first-lien mortgage loans were in foreclosure in 2010.