Entries Tagged 'Foreclosures' ↓

Short sale fraud is a rising crime that begins to gain its momentum. Analytics firm CoreLogic stated that 1.9% of all U.S. short sales, or 1 out of every 53 deals, over the past two years (approximately 15,000nationwide) are fraudulent. Short sale scams have a great impact on the society; victims that end up homeless, cheated lenders, damage to values of neighborhood properties. Since there is minimal enforcement against short sale and prosecution to suspects is difficult, many criminally minded people take the risk and fraud short sales.

Not all short sales are bad, though. A short sale may be the solution to your home foreclosure problem when you do the time to scrutinize your agency or real estate agent that suggests a short sale to help you get out of a mortgage situation. Keep in mind that despite the faster pace and less expense of a short sale compared to a foreclosure, it doesn’t necessarily absolve the remaining balance.

A growth of Wells Fargo & Co.’s portfolio of active and completed mortgage modifications was seen, from 733,180 at the end of January to 740,359 in late February.

The figures stated take account of all active and completed modifications stated at the bank within the time period of January 2009 to February 2012. Wells stated that 84% or 623,737 of those modification efforts were completed through the bank’s proprietary programs, while 116,622 were settled through the Home Affordable Modification Program (HAMP) of the government.

Wells Fargo succeeded in encouraging 80% of its seriously delinquent customers to ask for assistance. According to the bank’s report, approximately 7 out of 10 seriously delinquent customers avoided foreclosure.

Furthermore, Wells Fargo & Co. helped 5.6 million customers that have obtained low-rate loans for purchases and refinancing over the previous three years.

Wells Fargo wrote in a statement, “As a result of that success and the fact that more than 92% of Wells Fargo’s home loan customers remained current on their mortgage payments as of the fourth quarter of 2011, fewer than 2% of the loans on owner-occupied properties in its mortgage servicing portfolio have resulted in a foreclosure sale over the past 12 months… Wells Fargo also has helped nearly 5.6 million customers secure new low-rate loans for home purchases or to refinance existing mortgages between January 2009 and February 2012.”

According to the National Association of Realtors, there was an upsurge of investment and vacation home sales in  2011 due to more investors with cash on hand jumping into the market to obtain distressed and affordable properties.

As NAR reported that the combined share of investment and vacation home sales of 2011 was at its highest level since 2005, their study demonstrate a growth of 64.5% to 1.23 million in 2011, compared to 2010’s 749,000.
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A soar of 7% to 502,000 in vacation-home sales were also seen last year, as compared to 2010’s 469,000. The vacation purchases accounted 11% of all transactions in 2011 in total; compared to 2010’s 10%

27% of 2011 transactions were investment sales, compared to 2010’s 17%. Lawrence Yun, chief economist for NAR stated that the number of investors have been rising

Investment sales made up 27% of 2011 transactions, compared to 17% in 2010. Lawrence Yun, chief economist for NAR, said more investors with cash on hand jump into the market to obtain distressed and affordable properties, as prices drop to affordable levels alongside the low interest rates.

Yun said, “During the past year, investors have been swooping into the market to take advantage of bargain home prices… Rising rental income easily beat cash sitting in banks as an added inducement. In addition, 41% of investment buyers purchased more than one property.”

49% of investment buyers and 42% of vacation-homebuyers paid with cash last year.

Distressed homes comprise about half of the investment homes obtained, as compared 39% of vacation homes.

A Real Estate Consensus Forecast was made public by Urban Land Institute on March 28, 2012 predicting wide improvements for the economy according to 38 real estate economists and analysts surveyed.

With the signs improvements in the housing sector coming on the surface, participants anticipate seeing housing starts almost double by the year 2014 and predict the rise of home prices by 2013.

Average home prices decreased somewhere between 1.8 percent and 4.1 percent for each year in the past three years as per FHFA data. Average home prices are expected to stabilize in 2012; increase by 2 percent in 2013; and increase by 3.5 percent in 2014.

The 428,600 single-family housing starts in 2011 is expected to rise to 500,000 in 2012, and soar an 800,000 starts in 2014.

By 2012, a drop to 8 percent in the unemployment rate is expected; down to 7.5 percent by 2013’s end; and continue falling to 6.9 percent by 2014’s end.

In 2012, a 2.5 percent growth of GDP is expected, and a 3.2 percent growth by 2014.

Despite the signs of the economy’s progress, there is inflation and higher interest rates, increasing cost for investors. The survey’s participants aren’t expecting substantial increases in real estate capitalization rates for institutional-quality investments (NCREIF cap rates), which are anticipated to stand still at 6 percent in 2012 and rise to 6.2 percent in 2014.

In 2012, total returns of Council of Real Estate Investment Fiduciaries (NCREIF) by property type are anticipated to be 12.1 percent for apartments, making it the strongest; 11.5 percent for industrial; 10.8 percent for office; and 10 percent for retail.

By 2014, however, the office returns are expected to be strongest, with 10 percent; industrial with 10 percent; apartments with 8.8 percent; and retail with 8.5 percent

It was recommended by ULI CEO Patrick L. Phillips that although ULIForecast proposed that growth of economy will be steady, it must be viewed within the risk factors content: enduring impact of Europe’s debt crisis; the impact of the imminent presidential election in the U.S. and major elections abroad; and the difficulties of tighter financial systems in the U.S. and overseas.

Phillips said, “While geopolitical and global economic events could change the forecast going forward, what we see in this survey is confidence that the U.S. real estate economy has weathered the brunt of the recent financial storm and is poised for significant improvement over the next three years.”

The non-housing sector growth conducted from February 23 to March 12, 2012, according to the ULIForecast:

- Year-end vacancy rates for the apartment sector are anticipated to drop further to 5 percent in 2012, and then climb to 5.1 percent in 2013 and to 5.3 percent in 2014

-Apartments are anticipated to reflect strong growth on rental rate, growing 5 percent in 2012, then slowing down to 4 percent in 2013, and 3.8 percent in 2014.

- An increase of issuance of commercial mortgage-backed securities (CMBS) from $33 billion in 2011 to $40 billion in 2012 is expected, $58 billion in 2013, and $75 billion in 2014.

- An increase of the ten-year treasury rates to 2.4 percent by 2012’s end is expected, 3.1 percent for 2013, and 3.8 percent for 2014.

- An anticipated rise in future equity REIT returns to 10 percent in 2012 is expected, then plunging to 9 percent in 2013, and 8 percent in 2014.

-  A drop to 11 percent in returns for institutional-quality direct real estate investments is expected in 2012, 9.5 percent in 2013, and 8.5 percent in 2014.

- A projected increase of hotel occupancy rates to 57 percent by 2012 is expected, 58.2 percent by 2013, and 59.2 percent by 2014.

- Vacancy rates for the industrial/warehouse sector are anticipated to plunge steadily over the succeeding three years to 12.8 percent by 2012’s end, 12.1 percent in 2013, and 11.5 percent by the end of 2014.

A U.S. Economic and Housing Market Outlook for February was released by Freddie Mac (OTC:FMCC). It reflected vigilant signs of the progress of the economy and housing market as driven by the low interest rates and more promising job opportunities for Americans.

Here are the outlook highlights:

• For the past 2 months, job gains outdid the anticipations. However, voluntary resignations are an estimated 2 million in December compared to the 3-million pre-recession average, thus, showing worker agitation. 
• A drop to 8.3% in the rate of unemployment, with a declining number of unemployment benefits application weekly for the third consecutive week 348,000, the littlest from the first week in March 2008. 
• In 2013, more progress is anticipated in the housing market as the economy remains in its slow but strong recovery in a low-interest-rate situation.
• Low rates of mortgages will keep high the homebuyers’ ability to purchase and help motivate more HARP refinances.
• Consumer worries faded in January as homebuilder confidence remains reflecting signs of progress.
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Frank Nothaft, Freddie Mac vice president and chief economist said,  ”The US economy continues to build on the momentum from the end of last year … Our outlook anticipates gradual, but steady, improvement in the economy and the housing market, supported by low interest rates and brightening job market prospects.”

An announcement of the HUD’s $72.6 million offer for all 50 states’ public housing agencies and the District of Columbia to be able to supply permanent housing and for the more than 10,000 homeless veterans’ case management was made by Secretary Shaun Donovan of the U.S. Housing and Secretary Eric K. Shinseki of the Urban Development and U.S. Department of Veterans Affairs.

On March 29, 2012, the announcement on permanent supportive housing assistance was made through HUD’s Veterans Affairs Supportive Housing Program (HUD-VASH). This program administered by HUD, VA, and local housing agencies aims to offer permanent housing with case management and other services to support the homeless veterans all over the country. 

HUD Secretary Donovan said, “It’s a national disgrace that one out of every six men and women in our shelters once wore a uniform to serve our country… But we know that by providing housing assistance and case management services, we can significantly reduce the number of veterans living on our streets. Working together, HUD, VA and local housing agencies are making real progress toward ending veteran homelessness once and for all.”

On the other note, VA Secretary Shinseki commented that, “Under the leadership of President Obama, we have made significant progress in the fight to end homelessness among veterans, but more work remains… The partnership between the federal government and community agencies across the country has strengthened all of our efforts to honor our veterans and keep us on track to prevent and eliminate veteran homelessness by 2015.”

Elimination of the Veterans’ and the citizens’ chronic homelessness by 2015, as one of Obama’s Administration’s commitment, was the reason for the funding of local housing agencies. Opening Doors: Federal Strategic Plan to Prevent and End Homelessness guides the federal government in working hand in hand with the state and local agreements in confronting the causes of homelessness, especially among men and women who previously served the country. A decline of nearly 12 percent (or 8,834 people) since January 2010 was found by HUD’s annual “point in time” approximation of the number of homeless persons and families for 2011.

The source of the said grants was from the $75 million allotted for Fiscal Year 2012 to support the housing needs of homeless veterans. On the other note, the services and case management offered for the homeless veterans are to be provided by VA Medical Centers (VAMC), being the first of the 2-round funding of HUD-VASH. The remaining funding are to be announced by the end of this summer, as HUD anticipates.

VAMCs work hand in hand with homeless veterans, followed by their referrals to public housing agencies for these vouchers. A lot of factors are considered their basis, mainly the duration of the homelessness and the necessity for longer term more rigorous support to be able to acquire and preserve permanent housing. . The HUD-VASH program includes: the rental assistance and the comprehensive case management provided by the VAMC staff.

Those participating veterans in the HUD-VASH program rent privately owned housing and generally contribute up to 30 percent of their income for rent. VA offers qualified homeless veterans clinical and supportive services all over the U.S., Guam and Puerto Rico. 

A drop off in the number of foreclosures was recorded in the markets previously experienced an all time high in the years 2009 and 2010.

A report made by the National Association of REALTORS®’ Local Market reflected a decrease in the national foreclosure rates, from 2.8% down to 2.7% by December. In 163 markets surveyed, 113 witnessed to a reduced foreclosure rates over this period.

Markets with high rates in 2009 and 2010 comprise the largest declines in foreclosures currently. Florida and Nevada markets conquered most of the top 10 places in declines. Seattle and Spokane Washington also ranked in the top 10 although these markets maintain low foreclosure rates, thus, implying stronger proportionate progress in recovering. Over all, Miami, Fort Myers, Orlando and Sarasota Florida have the utmost decrease in rates of foreclosures.

The drops in foreclosure rates imply stronger conditions of employment and consumer confidence. Mortgage rates will also be lower that will then be motivating more home sales. There were also effects seen for the hard work in enhancing the process of short sale and modification programs.

The reason for the slowing of foreclosure activities during the survey period is that servicers are looking forward to the new processing standards of the multi-state AG agreement that would reduce their liability risk. Since the new agreement has been signed, increasing new filings for foreclosure are anticipated.

Homeowners struggling in selling their homes in a short sale received a good news last February 28, 2012 from the REALTORS® that assists them – a new National Association of REALTORS® alliance with the U.S. Department of the Treasury will make their services better.

The Treasury Department sponsors an upcoming Making Home Affordable “Help for Homeowners” outreach events will help REALTORS® who will attend in gaining visions to better manage their short sale process and have the chance to meet face-to-face with loan servicers on behalf of their clients who needs assistance for difficult transactions.

NAR President Moe Veissi stated, “As the nation’s leading advocate for homeownership and housing issues, REALTORS® are working hard to keep more people in their homes, and when a family is absolutely unable keep their home, REALTORS® are there to help homeowners by facilitating a loan modification or short sale… I encourage our REALTORS® members to participate in these new events so that they have the tools and information to help distressed homeowners achieve the best possible outcome.”

All year round, Help for Homeowners community events will go on. Last 22nd of February, the first session was held, with an additional event on the 24^th. Chicago, Indianapolis, Los Angeles, and Sacramento, California are the next settings of the scheduled events.

The said events enable REALTORS® to attend workshops and hear it straight from the lenders and loan servicers regarding the execution of short sales in the currently challenging market. Navigation of the short sale process, negotiating effectively the short sale offers and expedition of transactions are some of the tips to be discussed. From the Treasury officials, REALTORS® can learn various foreclosure prevention programs, and specifically the Home Affordable Foreclosure Alternatives (HAFA) short sale program. For those real estate professionals who won’t be able to attend personally in the workshops can have live webinars instead.

Though the sessions for real estate professionals are unavailable for homeowners, the free homeowner sessions instead are open to borrowers in financial distress and anxious about losing their homes to foreclosure.

To learn more about foreclosure prevention options and work on the road to solutions to their mortgage problems, a face-to-face encounter with loan servicers and housing counselors will be off help to these distressed homeowners.

Veissi further stated, “REALTORS® embrace the opportunity to partner with the Treasury Department and drive participation at upcoming “Help for Homeowners” events. Working together we can improve the success rate for short sale transactions, which will reduce the overall number of foreclosures and benefit sellers, lenders, buyers and the entire community.”