Foreclosures 24% Of 4Q 2011 US Home Sales

Residential properties linked to foreclosure--either in default, scheduled for auction or bank owned--represented 24% of all home sales in the fourth quarter.

The sale price of a foreclosed property averaged $164,944 in the fourth quarter, down 5% from a year earlier.

Looking ahead, expect to see foreclosure-related sales increase this year--particularly pre-foreclosure sales--as lenders start to more aggressively dispose of distressed properties.

Pre-foreclosure sales increased more than 20% from a year earlier in a handful of states during the fourth quarter, including Michigan, Georgia and Arizona.

Million-Dollar + Foreclosures

America’s wealthiest families are now losing their homes to foreclosure at a faster rate than the rest of the country — and many of them are doing so voluntarily.

Over 36,000 homes valued at $1 million or more were foreclosed on — or at least served with a notice of default — in 2011.

Out of all foreclosure activity, the share of foreclosures on properties valued at $1 million or more has risen by 115% since 2007 while the share of multi-million dollar foreclosures — or homes valued at more than $2 million — jumped by 273%. Meanwhile, the share of foreclosures on mid-range properties valued between $500,000 and $1 million fell by 21%.

In Miami, homes priced over $1 million represented 9% of all foreclosures last year.

Many high-end homeowners have chosen to pursue a “strategic default.” Even though they can afford the monthly mortgage payments, they still decide to walk away from their home because they owe more on the property than it is worth.

In million-dollar homes, you’re looking at people who can afford it, but they have to make a business decision: Does it make sense to make payments on a mortgage when the home is worth less than they owe? In many cases, it often makes more financial sense to walk away.

But don’t expect a few depressed mansions to bring down the neighborhood. A single foreclosure in an otherwise wealthy area is unlikely to impact surrounding values.

We're feeling a little better

The number of people seeking unemployment benefits fell to the lowest point in almost four years last week, the latest signal that the job market is steadily improving.

A surge in apartment building offset a drop in starts of single-family homes, pushing housing starts up 1.5% in January from December.

The Labor Department says the producer price index, which tracks price changes before they reach the consumer, rose 0.1 percent. Wholesale prices fell by the same amount in December. In the past 12 months, they have increased 4.1 percent, the smallest rise in a year.

Florida gets the most attention

Many house hunters from locales such as New York and Chicago search for properties in the Sunshine State, according to a new report from Trulia.com.

The study used searcher’s IP addresses to identify location origin of prospective home buyers and renters from the Northeast and Midwest.

What they found was that for every home search that a resident made in another market, there were nearly nine home searches by out-of-towners for a place in Florida.

Developer / City still haggling over senior housing project

In 2007 63 percent of voters authorized the city "to lease real property of approximately four acres (deeded to Key West by the Navy) at the Truman Waterfront to a qualified operator or management company ... for a period of 99 years for the exclusive use as a mixed-income senior citizens assisted living and independent living facility." The nonprofit Florida Keys Assisted Care Coalition Inc. then selected a Rick Dover company as the desired developer, with Senior Solutions management group as the operator of the project.

Dover's company originally suggested 60 assisted living rooms or apartments, with 10 low-income units. The plan now calls for 70 assisted-living units, with 42 priced at market rates and 32 with the "moderate" designation. An additional 18 units would be priced in the "low income" range. All determination of such values is based on Key West Housing Authority standards.

Some of the sticking points over the approval are:

*The City's desire for a 49 year lease at $1 per year and a cost of $50,400 per   year thereafter. Dover wants the full 99-year lease at $1 per year.

*The city, wants appraisals of the fair market value costs for rooms, to determine what people will pay, with caps built into the lease. Dover rejects the idea of a cap.

*The city wants power over assignment of the lease, meaning the potential for Dover to have someone else take it over, for any reason or no reason at all. Dover wants the agreement to state that such assignment "shall not be unreasonably withheld."

Commissioners meet again on Feb. 7 and will discuss the project further.

Interest Rate Snapshot

The 30-year fixed mortgage rate (national average) is at 3.72%, down from 3.82% last week. The rate for a 15-year fixed home loan is at 3.01% down from 3.12%. The rate for a 5-1 adjustable-rate mortgage is 2.63%, down from 2.76%; a 5-1 ARM has an initial rate that applies for the first five years of the loan and then adjusts annually.

Obama "No more red tape. No more runaround from the banks"

With about 10.7 million U.S. borrowers, roughly 22 percent, of all outstanding loans underwater, the Obama Administration has declared that banks should cover the cost of a (new version) mortgage refinancing plan, "because they helped cause the crisis."

Three months ago, the White House loosened requirements on a federal effort, called the Home Affordable Refinance Program, or HARP, to make it easier for underwater homeowners with government-backed loans to lock into mortgages at lower rates. Cutting costs for borrowers whose mortgages are backed by government-run housing finance giants Fannie Mae and Freddie Mac, the new plan would be open to all borrowers who are current on their payments.

The Home Affordable Refinance Program, aka HARP 2.0, is a program to help underwater borrowers refinance to lower current rates.  HARP 1 was announced in March 2009, allowing borrowers up to 105 or 125% of amount owed to current market value.  But, less than 900,000 home owners have taken advantage of this program.  So President Obama announced an 2.0 version of the HARP program, with the hope of reaching more underwater borrowers.  The HARP 2.0 program essentially removed the 125% cap for the amount being underwater to unlimited.  The program took effect in Dec. 1, 2011 with only bank servicers allowing refinance until Fannie Mae can update their software to allow non-servicing lenders to originate these loans, expected by March 2012.

Florida Housing Market Indicators

*Florida existing home sales: -2% (month-to-previous-year comparison)

*Florida existing condo sales: -2% (month-to-previous-year comparison)

*Florida existing home median price: $134,300

*Florida existing condo median price: $91,900

National existing home sales: +5% (month-to-previous-month comparison; all housing types)

National existing home median price $164,500

Proposed settlement with Banks little help for homeowners

A proposed $25 billion settlement between five big banks, state attorneys general and the Obama administration will do relatively little to stop the ongoing wave of home foreclosures or to revive the deeply depressed housing market. The program would help some “underwater" homeowners but there are currently about 11 million borrowers with an average shortfall of roughly $65,000 — or a total of $700 billion — in “negative equity.” 


Talks got underway more than a year ago after a series of private lawsuits focused national attention on an outbreak of “robo-signing” and other shoddy and fraudulent document processing practices by mortgage servicers foreclosing on homes. Among the abuses regulators found were so-called “dual track processing” in which lenders working with a homeowner to modify a mortgage would (on the side) continue with legal proceedings to foreclose. In other cases, lenders had foreclosed without properly showing they had the right to do so. 


The deal would require banks to devote roughly $17 billion of the total settlement to various types of loan modifications for homeowners. Rather than paying that amount in cash, lenders would receive a series of credit toward that amount based on a complex formula that would assign different levels of credit to different types of modifications. Decisions about which loans to modify would be left to bankers.


The program would apply mostly to the relatively small universe of home loans owned outright by the five lenders, including Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial (formerly GMAC). Loans held by government-controlled Fannie Mae or Freddie Mac — some 60 percent of the 31 million U.S. home loans outstanding — would not be covered in the deal.


Another $5 billion would be set aside to help support state foreclosure relief programs. A portion of those funds would be used to pay homeowners who can demonstrate they were victims of abusive or fraudulent foreclosure practices. Those awards would average about $1,800. The system for arbitrating those claims and distributing those checks has yet to be worked out.


Another $3 billion would be applied to a program to refinance mortgages at lower rates. 


If enough states go along, lenders would emerge largely unscathed from the settlement, amounting to a slap on the wrist.


Critics have argued the proposal lets bankers off the hook too easily for the mortgage mess they created with sloppy underwriting during the housing boom.

Woo-Hoo! Low Interest Rates to 2014

Federal Reserve officials said they expect to keep short-term interest rates near zero for almost three more years.

Florida housing sales stats positive

Will wonders never cease?


Florida existing home sales (on a month to previous year comparison) has recently shown a rate of +11% significantly outpacing a rate of +4% for the rest of the Nation on average.

The stats are in and we Have a Winner!

In the United States, last year, about 1.89 million properties received notices of default, auction or repossession. That's just one in 69 U.S. households. Foreclosure filings totaled almost 2.7 million, meaning some properties got multiple notices. More importantly, 804,000 + properties were actually seized by lenders last year.

Leading the pack (in foreclosure filings per household of 2011) as the Nation's highest rate for the fifth straight year, that's 1 in 16, it's Nevada again!

Lagging not fare behind, as #2 in agressive bank actions was Arizona with 1 in 24 households receiving a notice.

Rounding out the field for TOP 10 highest rates in 2011;

#3 California 1 in 31
#4 Georgia 1 in 37
#5 Utah 1 in 43
#6 Michigan
#7 Florida
#8 Illinois
#9 Colorado
#10 Idaho

In the category "Top 10 metropolitan areas with populations over 200,000" coming in first with 1 foreclosure filing per 14 households its -- wait for it ----- Las Vegas.

#2 Stockton
#3 Modesto
#4 Vallejo-Fairfield
#5 Riverside-San Bernardino
#6 Phoenix
#7 Merced
#8 Reno
#9 Bakersfield
#10 Sacramento

Stay tuned as Year 2012 is promising to have even bigger numbers.  Banks are expected to seize more than 1 million U.S. homes this year (up 25%) even while settlement talks continue between the lenders and state attorneys general over robosigning.

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

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*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.