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Default filings down by a third in Ada & Canyon Counties

December 9, 2011 By Leave a Comment

Default filings down by a third in Ada & Canyon Counties

The local real estate market seems to be headed in the right direction in regard to stability.  The next 6 months will provide additional information on the direction that our market is headed yet the following information provides a “snap shot” of year to date activity.

Homeowner default rates on homes loans within Ada and Canyon counties will fall well short of 2010 levels.  Overall filings (the starting of the foreclosure process) are down 34 percent.

There were 228 default filings in November for Ada County, down from over 260 within the month of October. The monthly average of default filings for Ada County in 2011 is 265.  Total default filings for 2011 in Ada County were 2,918—down 34% from the previous year.

In Canyon County, however, default filings were up.  Last month there were 184—approximately 23 more default filings from the previous month.  The monthly default average for Canyon County is 176.  Through November, the total default filings for Canyon County were 1,944.

The most recent “high” for default filings in Ada and Canyon counties was in March of 2010.  Default filings, however, slowed as lien holders became concerned about the processing of foreclosure documents.  This prompted some lenders/services to revise their foreclosure processes.  As you most likely know, banks are now releasing their inventory (foreclosed homes) in a manner that does not depress the market further.

Most statisticians feel that an influx of bank owned property will hit the real estate market during the spring of 2012.  Default filings typically increase after the Winter Holiday Seasons, as well.

Bank owned listings dropped nearly 3 percent from October to November in Canyon and Ada Counties while short sales on the market are down 3 percent.

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Principle Reductions for Underwater Borrowers on the Horizon?

December 6, 2011 By 2 Comments

A letter sent to the Federal Housing Finance Agency’s (FHFA) acting director Edward DeMarco by 21 member of the United States Congress urged this director to implement principle reductions on loans currently backed by Fannie Mae and Freddie Mac—2 of the largest backers of mortgage securities.

The letter explains that the members of congress do not urge that the FHFA request principal reductions out of kindness to homeowners yet support principal reductions in order to save taxpayers money for any future losses (foreclosed homes).

Principle reductions are when the financing institution reduces the amount owed against the debt in order for the homeowner to not be “underwater”.   The purpose of principle reductions is to help those that are substantially underwater or owe much more than what the asset is worth.

17% of Fannie borrowers are underwater and 18% of Freddie borrowers are underwater.  This provides a great risk of eventual default by this particular group.

Loan modifications have not solved the problem since 44% of loans modified within the past 24 months are three months past due, according to a Freddie Mac cited letter:  “The performance of the mortgage modifications leaves much to be desired for homeowners, for the housing market and for taxpayers”.

The members of Congress which urged the principle reduction stated that the short term effects of principal reductions on the books may look grim yet the long term effects greatly outweigh the money lost if homes and property continue to default on a regular basis.

Questions about principle reductions?  Call me directly at 28-869-3469. –Matt

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Existing-Home Sales Up

November 26, 2011 By 1 Comment

 

Although the national median price of homes being purchase has decreased, existing homes that have been sold increased for the 4th straight month in November.

 

Purchases of town homes, condo’s, co-op’s and single family residences increased nearly 14% last month to a adjusted estimated of 4.97 million.  Since July, homes sales have increased by double digits.  Sales also rose w/in the month of October.

 

The following information provides more detailed information:

 

Seasonally adjusted annual rate 4.97 million
% change from Oct. 2010 +13.5%
% change from September 2011 +1.4%
National median price $162,500
% change from Oct. 2010 -4.7%
Unsold inventory (months’ supply) 8
Share of all-cash buyers 29%
Share of investor buyers 18%
Share of first-time buyers 34%
Share of distressed sales 28%

 


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Purchasing a Home After a Short Sale or Foreclosure

November 4, 2011 By Leave a Comment

Purchasing a Home After a Short Sale or Foreclosure

Many have questions regarding how long it takes to be eligible to purchase a home if  a foreclosure is currently on record or you have sold your home via the short sale route.  Below you will find detailed information to help shed light on the subject!

I can be reached directly at 208-869-3469 and am happy to answer any questions that you may have!

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Recent Statistics Point to Real Estate Rebound

October 28, 2011 By Leave a Comment

Recent Statistics Point to Real Estate Rebound

Numerous signals have showcased the potential fact that the real estate market is now on the rise.  There has been a swing in regional real estate market improvements across the United States along with a 15% rise in housing starts in September, an increase in builder confidence and a surge in mortgage lending applications (people applying for credit to purchase a home).

Housing markets that are showing the greatest amount of strength are located within the Great Plains and include Iowa, Louisiana, Texas, Wyoming, Nebraska and the Dakota’s with Bismarck ND expecting to be the strongest market w/in the United States this coming year.   In fact, Bismarck expects to see 5.6% increase in appreciation according to most statisticians.

Alternate markets expected to see the highest gains in appreciation include Washington DC, Honolulu, Fargo, Pittsburgh, Boston and Harrisburg/Carlisle.

Although the majority of real estate markets are not seeing substantial gains in appreciation, the markets contained within the United States won’t see values fall at rates seen w/in the past 3 years.   Even though the housing recovery is limited to a hand full of markets, the fact that some areas are seeing appreciation is encouraging for those in alternate real estate markets throughout the country.  Some would say that appreciation will begin to trickle down as time progresses.

Nevada, inland areas of California, Oregon and Washington State round of the weakest markets currently within the United States with Bakersfield, California  being the weakest due to a high amount of foreclosures in 2011 and projected foreclosures in 2012.

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Friday: The Best day to Place Your Home on the Market

October 24, 2011 By Leave a Comment

Friday:  The Best day to Place Your Home on the Market

For the best chance of selling your home, sellers should publicly list it on Friday’s–this according to a Seattle-based brokerage Redfin.

Upon evaluating 1.2 milling listing in 16 large markets within the United States the past 21 months, Redfin found that the homes listed on Friday were 12% more likely to obtain a buyer for the home and sell within 90 days.  Homes placed on the market on Thursday or Friday on average sold close to the current list price:  94.4% in comparison to 93.9% when homes are placed on the public market for sale on Sunday or Monday.  In a nut shell, this is a $1,000 difference in sales price when comparing to a $200,000 home.

Homes are 18.8% more likely to be toured by potential buyers when listed on Friday.  The least likely homes to be toured were, of course, made public on Sunday or Monday.

The theory behind this is that home buyers tend to view homes on Saturdays and Sundays.  Homes placed onto the market on Friday’s are the freshest in the buyers and their Realtors minds when planning for weekend viewings.  Realtors and buyers tend to sort potential homes to view by days on market in order to the have the best chance of getting a potentially great buy before other potential buyers have a chance.

 

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$20,000 Short Sale Incentive offered by B of A

October 10, 2011 By Leave a Comment

$20,000 Short Sale Incentive offered by B of A

Bank of America is now offering homeowners located in states with high foreclosure activity up to $20,000 at closing (yes, $20,000) to sell their home as a short sale rather than allowing the home linger within the foreclosure proceedings.

Short sales which qualify for the cash at closing much be submitted for approval to Bank of America prior to November 30, 2011.  The closing must occur prior to August 31, 2012 and the home must not have any offers submitted on it currently.

As most know, a short sale is when the bank or lien holder accepts an offer to purchase for less than what is owed against the home.

The Bank of America strategy which has a minimum “cash at closing” payout of $5,000 is a true incentive to homeowners struggling to make their payment and on the brink of losing their home to foreclosure.

The national average timeline for foreclosure proceedings is 318 days.  This said, B of A providing an incentive will help homeowners receive incentive to sell the home prior to it sitting vacant for months—if not years.  Some call it a relocation fee yet it’s basically a “bribe” to make certain that the home owner leaves the home in good condition.  Some would say that providing an incentive of 20K makes sense considering that the bank may need to pay $20,000 (or more) to fix the home up prior to selling.  You see, in many circumstances the home owner which feels “cheated” by the bank will take /stead appliances, fixtures and intentionally damage the home.

Wells Fargo and Chase have similar programs for short sales which they call “cash for keys”.  In fact, Wells Fargo offers up to $20,000 on eligible short sales which are left in tip-top condition.  Although not advertised, these types of incentives are available w/in states with lengthy foreclosure durations.

In a nut shell, banks are now getting creative in order to get the distressed homes “off the books” and get back to a new normal.

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10 Markets with Highest Drop in Home Values

September 9, 2011 By Leave a Comment

10 Markets with Highest Drop in Home Values

 

California dominates the list of metro areas with the largest percentage of decline in home values since 2006 (6 of the 10 metro areas which lost substantial home values were in the sunny State of California).  Florida metro area’s encompassed 2  cities on the list and the remaining are located in Arizona and Nevada.  The Boise-Nampa Metro area is fortunately not “on the list”.

The declines in estimated values varied from 67% to 55% while the estimated value decline ranges from $383,000-$125,000.

1)  Merced, CA

Value Difference (percentage):  -67%, Value Difference (dollars):  -$222,220

2)  Modesto, CA

Value Difference (percentage):  -63%, Value Difference (dollars):  -$223,800

3)  Stockton, CA

Value Difference (percentage):  -62.9%, Value Difference (dollars):  -$253,975

4)  Las Vegas, NV

Value Difference (percentage):  -61%, Value Difference (dollars):  -$186,000

5)  Vallejo, CA

Value Difference (percentage):  -59%, Value Difference (dollars):  -$277,550

6)  Salinas, CA

Value Difference (percentage):  -57.5%, Value Difference (dollars):  -$382,115

7)  Daytona Beach, FL

Value Difference (percentage):  -56.8%, Value Difference (dollars):  -$125,243

8)  Bakersfield, CA

Value Difference (percentage):  -56%, Value Difference (dollars):  -$153,741

9)  Fort Myers, FL

Value Difference (percentage):  -56%, Value Difference (dollars):  -$162,097

10)  Phoenix, AZ

Value Difference (percentage):  -55.6%, Value Difference (dollars):  -$154,000

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Mortgage servicers bypass foreclosure delays with more short sales

August 19, 2011 By Leave a Comment

Mortgage servicers bypass foreclosure delays with more short sales

Mortgage servicers moved more to short sales in the past year due to attorney general investigations and lengthy foreclosure delays.

By the middle of 2011, according to Moody’s Investors Service, short sales grew 25% from the 8% August 2009 liquidations of distressed properties level.  In the meantime, borrower default to foreclosure grew to an average of 24 months (the average time to complete the foreclosure process in 2009 was 14 months).

The substantial delays lengthened the foreclosure processes which obviously caused greater losses by the banks and investors.  As you may be aware, the foreclosure processes were halted in October of 2010 to correct mismanaged foreclosures as part of the robo-signing scandal.  New regulations from the government along with negotiations between State Attorney generals are still ongoing and are causing banks and servicers to turn to short sales rather than starting the foreclosure process.

“To reduce their expenses and mitigate the high loss severity on liquidated loans, servicers are increasingly opting to bypass the foreclosure process and liquidate properties more quickly through a short sale,” Moody’s analysts said.

Short sales used to cut into “shadow inventory”

In order to cut into the “shadow inventory”, servicers of mortgages are using short sale transactions and Standard & Poor stated that short sales did actually decrease the shadow inventory within the 2nd quarter of 2011.

The average short sale took just under 12 months to sell while the average REO took 17 months in the middle of 2011.  Losses dropped, as well, with banks witnessing a 70% loss rate on REO property sold in comparison to just 60% for short sales sold.

Short sales also allow borrowers to purchase a home again within 1-2 years while homes which are foreclosed upon do not allow the previous owner to purchase again for at least 5-7 years.

Even so, short sales are still difficult due to investors arguing whether or not to provide an approval for the short sale.

“Short sales, like other servicer loss mitigation strategies, may stir a fierce ‘class warfare’ between investors in different parts of the deal capital structure,” Deutsche Bank researchers said.

Short sales are the new REO

Analysts from Moody’s stated that short sales helped with the severity of losses through the market turmoil as foreclosure problems continue to hurt the recovery process.  Moody’s also stated that the stabilization of average loss is helped by reducing the liquidation timeline

Do you have any additional questions about short sales and the processes associated with them?  If  so, please call me directly to discuss the “in’s and out’s” of short sales.  208-869-3469

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SHORT SALES–THE NEW “NORMAL”

August 17, 2011 By Leave a Comment

SHORT SALES–THE NEW “NORMAL”

Short sales are now becoming more and more appealing to banks throughout the greater Boise-Nampa Metro Area and the United States.  Larger banks, such as Bank of America, are ramping up their short sale departments by adding 3 additional servicing locations in order to help facilitate short sales and avoid additional inventory weighing down their books and cutting into the servicers and investor’s bottom line.

Finally, banks are getting smart (or smarter).  The foreclosure process through the re-sale of the home as a “bank owned property” takes a substantial amount of time and money.  Banks avoid the legal, maintenance and re-selling costs by approving a short sale rather than allowing the home to be sold at a trustee auction.

A short sale could take as long as six months approximately 1 year ago.  Today, the short sale process from the submission of the offer and seller financial documents to the approval letter ranges from 30-60 days—depending upon the servicer of the loan.  This said, banks are going to greater lengths to review and approve short sales in a timely manner.

Proceeding with a short sale rather than allowing a home to go through the foreclosure process is good for the owner, the purchaser and the local real estate market.  Homes sold as “short sales” typically are in better condition than bank owned property and also help keep the banks inventory low.  In turn, the lack of additional foreclosed upon property hitting the market helps to maintain current property values.

Although short sales do damage credit (minimally, however), the damage done to credit if a home is foreclosed upon is very substantial.  In fact, an owner that has his/her home foreclosed upon cannot purchase a home for at least 7 years.  However, those who complete the short sale process may be able to purchase again w/in 2 years (depending upon the circumstances of the short sale and credit scores).

Short sales aren’t difficult as long as you have an experienced Real Estate Broker helping with the process.  Items needed to submit for short sale approval are as follows:

1)      Hardship Letter

2)      Most recent 2 bank statements

3)      Most recent 2 tax returns

4)      Most recent 2 pay stubs

5)      Financial Analysis (document which states your monthly income and expenses)

Please call me directly if I can answer any additional questions for you about short sales or assist with the sale of your home.  Also, the following link contains a recent video which discusses the lending institutions stance on short sales.

http://kcmblog.com/2011/06/22/are-short-sales-getting-easier/

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