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.

Good News (No, Really)

OK, looks like Real Estate Pros have finally stopped jumping from the 8th floor windows. Across the country, there are reports of a rise in traffic at open houses. Buyers are waking up to the idea that this is it. It's like a big spring clearance sale on real estate. Prices are low, and so are mortgage rates. The Mortgage Bankers Association (MBA) reports that mortgage applications are at the highest level in months.  There is even some willingness of politicians to further juice the system to get over the next finish lines. Now if you have a secure job and the economy around is actually growing, then it's a great time to buy.

****** "Buy when there's blood in the Streets" ****** Baron Rothschild

It's still tough out there for a lot of folks. Even though foreclosures are expected to peak this year nationally, they are still looking to come in at numbers of 1 million a year through 2013. A full third of all "homeowners" now owe more than their homes are worth. Under normal conditions, the number of people with negative equity has averaged closer to 5 percent. A total of 831,574 foreclosures or bank-owned properties sold in 2010. They sold at an average discount of more than 28% compared with properties not in foreclosure. That action has helped force down home prices to their lowest level in nearly 9 years.

More and more people are forced to make a choice of walking out (strategically defaulting) on their underwater mortgages and suffering the negative impacts to their credit ratings, or continuing to throw money at a depreciating investment. In Florida alone, there were 485,286 properties subject to a foreclosure filing during 2010. That means there is a lot of housing supply (shadow inventory) sitting with the banks waiting to be placed on the market.

While the picture is certainly dire for some, the Vulture Investors are very busy. Nearly 40 percent of all sales last month were either foreclosures or short sales. The Flippers are also making hay while the sun shines. Of the 831 thousand+ distressed sales of last year, a significant percentage (7.9%) of those foreclosed homes sold again within 180 days.

As the fictional character (Gordon Gecko) from the movie "Wall Street" exclaimed, "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."

New Trend Towards Smaller Homes

A recent study from the National Association of Home Builders (NAHB) indicates that the recent housing slump has meant buyers are looking for smaller houses. The McMansions of the boom era are quickly losing their style.

The NAHB reports that the builders they "surveyed expect homes to average 2,152 square feet in 2015, 10 percent smaller than the average size of single-family homes started in the first three quarters of 2010. To save on square footage, the living room is high on the endangered list – 52 percent of builders expect it to be merged with other spaces in the home by 2015 and 30 percent said it will vanish entirely.

Key West Fan Christian Slater has a New Series

Christian Slater with Martha Robinson in Key West

SERIES PREMIERE on FOX WED 9:30/8:30c APR 6th

BREAKING IN is an offbeat half-hour workplace comedy about a high-tech security firm that takes extreme - and often questionable - measures to sell their protection services. The series centers on a team of uniquely skilled oddball geniuses hand-picked to work for a manipulative mastermind.

Contra Security, corporate America's answer to "The A-Team," gives clients a sense of security by first ripping it away. The firm is led by OZ (Christian Slater), a larger-than-life head honcho who is a man of mystery and master of manipulation. The members of the odd squad include alluring bad girl MELANIE (Odette Annable), who is in charge of lock-picking, safe-cracking and heart-breaking; and CASH (Alphonso McAuley), a fanboy who specializes in strategy, logistics and office pranks.