Bank of America Offers $20,000 Short-Sale Incentive to Homeowners, by Kimberly Miller, The Palm Beach Post


Bank of America, the nation’s largest mortgage servicer, is offering Florida homeowners up to $20,000 to short sale their homes rather than letting them linger in foreclosure.

The limited-time offer has received little promotion from the Charlotte, N.C.-based bank, which sent emails to select Florida Realtors earlier this week outlining basic details of the plan.

Only homeowners whose short sales are submitted for approval to Bank of America before Nov. 30 will qualify. The homes must have no offers on them already and the closing must occur before Aug. 31, 2012.

A short sale is when a bank agrees to accept a lower sales price on a home than what the borrower owes on the loan.

Realtors said the Bank of America plan, which has a minimum payout amount of $5,000, is a genuine incentive to struggling homeowners who may otherwise fall into Florida’s foreclosure abyss.

The current timeline to foreclosure in Florida is an average of 676 days — nearly two years — according to real estate analysis company RealtyTrac. The national average foreclosure timeline is 318 days.

“I think this is a positive sign that the bank is being creative to try and help homeowners and get things moving,” said Paul Baltrun, who works with real estate and mortgages at the Law Office of Paul A. Krasker in West Palm Beach. “With real estate attorneys handling these cases, you’re talking two, three, four years before there’s going to be a resolution in a foreclosure.”

Guy Cecala, chief executive officer and publisher of Inside Mortgage Finance, called the short sale payout a “bribe.”

“You can call it a relocation fee, but it’s basically a bribe to make sure the borrower leaves the house in good condition and in an orderly fashion,” Cecala said. “It makes good business sense considering you may have to put $20,000 into a foreclosed home to fix it up.”

Homeowners, especially ones who feel cheated by the bank, have been known to steal appliances and other fixtures, or damage the home.

“This might be the banks finally waking up that they can have someone in there with an incentive not to damage the property,” said Realtor Shannon Brink, with Re/Max Prestige Realty in West Palm Beach. “Isn’t it better to have someone taking care of the pool and keeping the air conditioner on?”

A spokesman for Bank of America said the program is being tested in Florida, and if successful, could be expanded to other states.

Wells Fargo and J.P. Morgan Chase have similar short-sale programs, sometimes called “cash for keys.”

Wells Fargo spokesman Jason Menke said his company offers up to $20,000 on eligible short sales that are left in “broom swept” condition. Although the program is not advertised, deals are mostly made on homes in states with lengthy foreclosure timelines, he said.

And caveats exist. The Wells Fargo short-sale incentive is only good on first-lien loans that it owns, which is about 20 percent of its total portfolio.

Bank of America’s plan excludes Ginnie Mae, Federal Housing Administration and VA loans.

Similar to the federal Home Affordable Foreclosure Alternatives program, or HAFA, which offers $3,000 in relocation assistance, the Bank of America program may also waive a homeowner’s deficiency judgment at closing.

A deficiency judgment in a short sale is basically the difference between what the house sells for and what is still owed on the loan.

HAFA, which began in April 2010, has seen limited success with just 15,531 short sales completed nationwide through August.

But Realtors said cash for keys programs can work.

Joe Kendall, a broker associate at Sandals Realty in Fort Myers, said he recently closed on a short sale where the seller got $25,000 from Chase.

“They realize people are struggling and this is another way to get the homes off the books,” he said.

Oregon’s Shadow Inventory – The “New Normal”?, by Phil Querin, Q-Law.com


The sad reality is that negative equity, short sales, and foreclosures, will likely be around for quite a while.  “Negative equity”, which is the excess by which total debt encumbering the home exceeds its present fair market value, is almost becoming a fact of life. We know from theRMLS™ Market Action report that average and median prices this summer have continued to fall over the same time last year.  The main reason is due to the volume of  “shadow inventory”. This term refers to the amorphous number of homes – some of which we can count, such as listings and pendings–and much of which we can only estimate, such as families on the cusp of default, but current for the moment.  Add to this “shadow” number, homes already 60 – 90 days delinquent, those already in some stage of foreclosure, and those post-foreclosure properties held as bank REOs, but not yet on the market, and it starts to look like a pretty big number.  By some estimates, it may take nearly four years to burn through all of the shadow inventory. Digging deeper into the unknowable, we cannot forget the mobility factor, i.e. people needing or wanting to sell due to potential job relocation, changes in lifestyle, family size or retirement – many of these people, with and without equity, are still on the sidelines and difficult to estimate.

As long as we have shadow inventory, prices will remain depressed.[1] Why? Because many of the homes coming onto the market will be ones that have either been short sold due to negative equity, or those that have been recently foreclosed.  In both cases, when these homes close they become a new “comp”, i.e. the reference point for pricing the next home that goes up for sale.  [A good example of this was the first batch of South Waterfront condos that went to auction in 2009.  The day after the auction, those sale prices became the new comps, not only for the unsold units in the building holding the auction, but also for many of the neighboring buildings. – PCQ]

All of these factors combine to destroy market equilibrium.  That is, short sellers’ motivation is distorted.  Homeowners with negative equity have little or no bargaining power.  Pricing is driven by the “need” to sell, coupled with the lender’s decision to “bite the bullet” and let it sell.  Similarly, for REO property, pricing is motivated by the banks’ need to deplete inventory to make room for more foreclosures.  A primary factor limiting sales of bank REO property is the desire not to flood the market and further depress pricing. Only when market equilibrium is restored, i.e. a balance is achieved where both sellers and buyers have roughly comparable bargaining power, will we see prices start to rise. Today, that is not the case – even for sellers with equity in their homes.  While equity sales are faster than short sales, pricing is dictated by buyers’ perception of value, and value is based upon the most recent short sale or REO sale.

So, the vicious circle persists.  In today’s world of residential real estate, it is a fact of life.  The silver lining, however, is that most Realtors® are becoming much more adept – and less intimidated – by the process.  They understand these new market dynamics and are learning to deal with the nuances of short sales and REOs.  This is a very good thing, since it does, indeed, appear as if this will be the “new normal” for quite a while.

Pre-Foreclosure Short Sales Jump 19% in Second Quarter by Carrie Bay, DSNEWS.com


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Short sales shot up 19 percent between the first and second quarters, with 102,407 transactions completed during the April-to-June period, according to RealtyTrac.  Over the same timeframe, a total of 162,680 bank-owned REO homes sold to third parties, virtually unchanged from the first quarter.

RealtyTrac’s study also found that the average time to complete a short sale is down, while the time it takes to sell an REO has increased.

Pre-foreclosure short sales took an average of 245 days to sell after receiving the initial foreclosure notice during the second quarter, RealtyTrac says. That’s down from an average of 256 days in the first quarter and follows three straight quarters in which the sales cycle has increased.

REOs that sold in the second quarter took an average of 178 days to sell after the foreclosure process was completed, which itself has been lengthening across the country. The REO sales cycle in Q2 increased slightly from 176 days in the first quarter, and is up from 164 days in the second quarter of 2010.

Discounts on both short sales and REOs increased last quarter, according to RealtyTrac’s study, but homes sold pre-foreclosure carried less of a markdown when compared to non-distressed homes.

Sales of homes in default or scheduled for auction prior to the completion of foreclosure had an average sales price nationwide of $192,129, a discount of 21 percent below the average sales price of non-foreclosure homes. The short sale price-cut is up from a 17 percent discount in the previous quarter and a 14 percent discount in the second quarter of 2010.

Nationally, REOs had an average sales price of $145,211, a discount of nearly 40 percent below the average sales price of non-distressed homes. The REO discount was 36 percent in the previous quarter and 34 percent in the second quarter of 2010.

Commenting on the latest short sale stats in particular, James Saccacio, RealtyTrac’s CEO, said, “The jump in pre-foreclosure sales volume coupled with bigger discounts…and a shorter average time to sell…all point to a housing market that is starting to focus on more efficiently clearing distressed inventory through more streamlined short sales.”

Saccacio says short sales “give lenders the opportunity to more pre-emptively purge non-performing loans from their portfolios and avoid the long, costly and increasingly messy process of foreclosure and the subsequent sale of an REO.”

Together, REOs and short sales accounted for 31 percent of all U.S. residential sales in the second quarter, RealtyTrac reports. That’s down from nearly 36 percent of all sales in the first quarter but up from 24 percent of all sales in the second quarter of 2010.

States with the highest percentage of foreclosure-related sales – REOs and short sales – in the second quarter include Nevada (65%), Arizona (57%), California (51%), Michigan (41%), and Georgia (38%).

States where foreclosure-related sales increased more than 30 percent between the first and second quarters include Delaware (33%), Wyoming (32%), and Iowa (30%).

 

Bank-Owned Backlog Still Building, by Carole VanSickle, Bryan Ellis Real Estate News Letter


At present, banks and lenders own more than 872,000 homes in the United States today[1]. And that number, twice the number of REOs in 2007 and set to grow by around 1 million in the years ahead as current foreclosures move forward, is starting to make a lot of real estate professionals pretty nervous. Although home sales volumes are up, many experts fear that the growing backlog of foreclosures and the necessity of getting them off the balance sheets is going to create a “vicious cycle” of depressed home values that cannot make a recovery until the foreclosure backlog is reduced – and that could take many, many years as some forecasts predict that 2 million homes will be REO properties before the bottom truly hits.

Nationwide, Moody’s analytics predicts that the foreclosure backlog could take three more years to clear and that home values are likely to fall another 5 percent by the end of 2011. However, the firm predicts a “modest rise” in prices in 2012, which has some people thinking that the situation might not be quite as bleak as it seems. However, regional analysis is going to be more important than ever before for real estate investors. For example, while hardest hit areas like Phoenix and Las Vegas are finally starting to work through their backlogs as prices get so low that buyers – both investors and would-be homeowners – can no longer resist, real estate data firm RealtyTrac recently released numbers indicating that New York’s foreclosure backlog will take more than seven years to clear[2]. Currently, it takes an average of 900 days for a property to move through the state judicial system. This means that while New York City may be, as some residents and real estate agents insist, impervious to real estate woes, the state market could suffer mightily in the years to come as those foreclosures slog through the system.

Do you think that a 5 percent drop in price in the coming year followed by “modest gains” sounds terrible, or does that just get you in the mood to buy?

Bryan Ellis Real Estate Blog
http://realestate.bryanellis.com

RealtyTrac: Foreclosure Activity at Lowest Level in Three Years, by Carrie Bay, DSNEWS.com


RealtyTrac says processing delays have reduced foreclosure activity to its lowest level since the first quarter of 2008.

New data released by the tracking firm shows that foreclosure filings were reported on 681,153 properties during the first three months of this year. That represents a 15 percent decline from the previous quarter and a 27 percent drop from a year ago.

Commenting on the latest numbers, James J. Saccacio, RealtyTrac’s CEO, said despite the recent plunge in foreclosure activity, the nation’s housing market continued to languish in the first quarter.

“Weak demand, declining home prices and the lack of credit availability are weighing heavily on the market, which is still facing the dual threat of a looming shadow inventory of distressed properties and the probability that foreclosure activity will begin to increase again as lenders and servicers gradually work their way through the backlog of thousands of foreclosures that have been delayed due to improperly processed paperwork,” Saccacio said.

A total of 197,112 U.S. properties received default notices for the first time in the January to March period, a 17 percent decrease from the previous quarter and a 35 percent decrease from the first quarter of 2010.

Foreclosure auctions were scheduled for the first time on 268,995 homes. That’s down 19 percent from the previous quarter and 27 percent from the first quarter of last year.

Lenders completed foreclosure actions on 215,046 homes last quarter, a 6 percent drop from the fourth quarter of 2010 and a 17 percent decrease from the first quarter of last year. However, in states where the non-judicial foreclosure process is primarily used, RealtyTrac says bank repossessions (REOs) increased 9 percent from the previous quarter.

Illustrating the extent to which processing delays pressed foreclosure activity to artificially low levels, RealtyTrac says states where a judicial foreclosure process is used accounted for some of the biggest quarterly and annual decreases in the first quarter.

Florida foreclosure activity decreased 47 percent from the previous quarter and was down 62 percent from the first quarter of 2010, although the state still posted the nation’s eighth highest foreclosure rate with one in every 152 housing units receiving a filing in Q1.

First quarter foreclosure activity in Massachusetts fell 46 percent from the previous quarter and was down 62 percent from a year ago. The state’s foreclosure rate – one in every 549 housing units with a foreclosure filing – ranked No. 38 among the states.

New Jersey’s first quarter foreclosure rate of one in every 401 housing units with a filing ranked No. 34 among the states, thanks in part to a 43 percent decrease in foreclosure activity from the previous quarter and a 44 percent decline from the first quarter of 2010.

Connecticut’s first quarter foreclosure activity dropped 39 percent from the fourth quarter of 2010 and was down 65 percent from a year earlier. Pennsylvania posted a 35 percent decline from the previous quarter and a 29 percent drop from the same period last year.

Looking at the nationwide data for March, RealtyTrac’s report indicates that activity is already beginning to pick up some. Foreclosure filings were reported on 239,795 U.S. properties last month, up 7 percent from February. Both default notices and REOs increased in March compared to the previous month; scheduled auctions was the only stat to post a monthly decline.

 

Multnomahforeclosures.com: Updated Notice Of Default Lists


Multnomah County Courthouse in Portland, Orego...

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Multnomahforeclosures.com was updated with the largest list of Notice Defaults to date. With Notice of Default records dating back nearly 3 years. Multnomahforeclosures.com idocuments the fall of the great real estate bust of the 21st century. Over 50,000 Notice of default Listings

All listings are in PDF and Excel Spread Sheet format.

Multnomah County Foreclosures

http://multnomahforeclosures.com

Stewart Group Realty Inc.

Multnomahforeclosures.com: Updated Notice Of Default Lists for October 20, 2010


Multnomah County Courthouse in Portland, Orego...

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Multnomahforeclosures.com was updated  with the largest list of Notice Defaults to date. With Notice of Default records dating back nearly 2 years. Multnomahforeclosures.com idocuments the fall of the great real estate bust of the 21st century.

All listings are in PDF and Excel Spread Sheet format.

Multnomah County Foreclosures
http://multnomahforeclosures.com

Stewart Group Realty Inc.
http://www.sgrealty.us

Related Articles

Apartment Rents Rise in U.S. West as Foreclosures Boost Apartment Demand, by Danielle Kucera, Bloomberg.com


Apartment rents rose across the U.S. West and South for the third straight quarter as record foreclosures boosted demand for rental housing, RealFacts said.

The average asking rent climbed to $958 a month from $950 in the second quarter, according to a report released today by the Novato, California-based research company. It declined 0.7 percent from a year earlier. Rents reached a record $1,002 in the third quarter of 2008.

“We’re getting to be much more of a culture that puts a premium on rental housing,” Sarah Bridge, owner of RealFacts, said in an interview. “People are disillusioned with the housing market. They don’t want to spend their money that way if they’re going to be foreclosed on.”

Sales of properties in the foreclosure process accounted for almost a third of U.S. transactions in September and surpassed 100,000 for the first time, RealtyTrac Inc. said on Oct. 14. The data provider’s figures go back to 2005.

Apartment rents rose fastest in the Denver area, with rates increasing 2.4 percent from the second quarter to $883 a month, followed by the Austin, Texas, region, with a 2.3 gain to $837 a month, RealFacts said. In the Atlanta area, rents rose 2.2 percent to $834, and in the San Jose, California, region they increased 1.9 percent to $1,587.

The San Jose area, which encompasses Sunnyvale and Santa Clara, was the priciest region in RealFacts’ database in the third quarter.

Apartments were 92.8 percent occupied, up from 92 percent in the second quarter and 91.7 percent a year earlier, according to RealFacts.

“It seems the apartment sector is outperforming the economy in general,” Bridge said.

The survey covers 3.29 million rental units in states including California, Florida, Indiana,Arizona, Texas, Colorado and Nevada. Closely held RealFacts surveys apartment owners quarterly.

To contact the reporter on this story: Danielle Kucera in New York at dkucera6@bloomberg.net.

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net.

Is Residential Real Estate Recovering?, by Jeff Harding, Dailycapitalist.com


I recently published an article on the commercial real estate marketIs Commercial Real Estate Recovering?” In this article I will examine residential real estate.

It is difficult to forecast a bottom of the housing market because of the “shadow” market and government and legal issues which thwart foreclosures.

While markets are firming up, and foreclosure sales are trending down, there is this:

Lender Processing Services (LPS) tracks performance on 40 million mortgage loans in the country. According to a preview of the LPS mortgage report, 9.22% of those loans are more than 30 days delinquent. A total of 6,984, 885 loans were non-current. They report that foreclosures registered their first YoY decline since 2006. “January 2009 the percent of seriously delinquent loans that were current six months prior peaked at 2.92% vs. 1.65% in August 2010.”

 

 

In data published by Dr. Housing Bubble, CoreLogic is quoted as reporting that 11 million US homes are underwater.  Other articles have said 25% of all mortgages are underwater. Dr. Housing Bubble presents the following chart to show the distribution of negative equity among that 11 million base:

 

 

On the other side of the equation, foreclosure sales are declining. LPS reported that “The August delinquency rate on U.S. mortgages fell 5.1% from last year …” This is borne out by other data:

CoreLogic (CLGX: 18.29 -0.76%) said tax credit-induced sales helped push distressed sales to a seven-month low in June, but the share of distressed sales is expected to bounce back in coming months, according to the firm’s inaugural U.S. Housing and Mortgage Trends report. The bi-monthly report will track housing sales, valuation, negative equity and foreclosure activity. In June, the distressed sale share fell to 24% of overall sales, down from a peak of 35% in early 2009, according to CoreLogic. …

“Since the peak in home sales in 2005, non- distressed sales have dramatically declined and there is a clear relationship between the decline in non-distressed sales and the level of negative equity.”

The firm said non-distressed sales fell nearly twice as much in high-negative equity zip codes in comparison to low-negative equity zip codes.

Las Vegas with 61% and Riverside, Calif., with 59% continue to lead the nation in distressed sales for the largest 25 metropolitan markets, according to CoreLogic. Phoenix , Sacramento, Calif., and Orlando, Fla., were the only other markets to have distressed sales account for more than 50% of home sales.

Also, from RealtyTrac:

[F]oreclosure filings in August fell 5% from a year ago, the third straight month of declines,.

The last time foreclosure filings increased was a 1% uptick in May, when 322,920 properties received either a default notice, scheduled auction or bank repossession. Since then, foreclosures have dropped 6.9% in June, and 10% in July. …

“On the front end, seriously delinquent loans are rolling into foreclosure at an unusually slow rate, while on the back end the dammed-up inventory of properties already in foreclosure is moving to REO in steady stream rather than a flood — presumably to prevent further erosion of home prices,” James Saccacio, CEO of RealtyTrac said.

Florida notices fell 46% from last year but still held the second highest foreclosure rate in the country. In Arizona, one in 165 properties had a foreclosure filing, the third highest. California foreclosures accounted for 20% of the national total in August with more than 69,000 receiving a foreclosure filing in the month. It’s a 9% drop from last year.

These data came in before the news about banks, i.e., BofA, suspending its mortgage foreclosures in order to review documentation validity. The class action lawyers will make a killing on this one. No one loves banks (as in, “The bank took my home.”). But that doesn’t change the underlying reality of the market.

One in 10 mortgages in 100 largest metropolitan area were seriously delinquent as of March 2010, according to a study done by the nonprofit Center for Housing Policy.

Working with the Local Initiatives Support Corp., and the Urban Institute gathered and analyzed delinquency data on 366 U.S. metro areas. Seriously delinquent mortgages are behind on payments by 90-plus days or in foreclosure. According to the study 10.2% of all mortgages in the top-100 populated areas were in this category, up from 7.7% in March 2009.

According to this latest study, the severity of delinquencies vary widely across the nation. Austin, Texas had the lowest share of seriously delinquent mortgages in March at 4.4%, while Miami had 26% of its mortgages in serious delinquencies.

As the above paragraph tells us, it depends where you are. If you are in Miami, Phoenix, Las Vegas, or the Inland Empire (California’s desert counties: Riverside, San Bernardino, Imperial) then the excess supply of homes is still being worked off. But, I think that is changing. More in a moment.

The other reality is that sales are increasing:

[T]he National Association of Realtors’ index for pending sales of used homes in August increased 4.3% to 82.3, the industry group said Monday. Economists surveyed by Dow Jones Newswires had expected pending home sales would increase 3.8% in August. Year over year, the pending sales index was 20.1% below its level of 103 in August 2009.

Home prices rose for the fourth-straight month in July, but at a slower pace than in previous months, and they could start falling again as the expiration of government home-buying incentives has put a brake on sales.

The S&P/Case-Shiller 20-city home-price index rose 0.6% in July from the prior month and was up 3.2% from a year earlier. That marks the sixth time in a row prices rose, compared with the same month a year earlier, an important distinction in an industry where sales vary sharply according to the time of year.

The index is based on a three-month moving average, and analysts noted May and June saw larger price increases than July.

Again, look at this chart which appears to be a dramatic rise in prices, but the YoY index was only up 3.2% YoY.

 

The table below clearly shows where the action is. As you can see coastal California is doing well. People still want to live there and there is lots of money floating around. Quite a bit of the money flowing into the coastal California market is from speculators who have put a floor under the foreclosure market. This causes competition for homes, and prices have been rising, also bringing in other buyers who think we’ve hit the bottom.

 

This is not the case elsewhere.

 

Things are changing in the poor markets as well:

 

The Viceroy, a swanky condominium complex in downtown Miami, gives the impression that the United States is in another real estate boom. The sales office is strangely exuberant. Buyers gush about the glam condos — designed by hipster tastemaker Kelly Wearstler — and their hotel-like amenities: poolside libations, daily housekeeping and room service food stirred up by a celebrity chef.

Since January, 262 of the Viceroy’s 372 units have sold. But there’s a twist: Almost 90 percent of the buyers are foreigners. And they all paid cash.

The Viceroy’s story is playing out across Miami. Individual investors from as far as Argentina, Canada, Colombia, France, Israel, Italy, Norway and Venezuela are swarming the city’s sales offices to get in on what they see as one of the greatest real estate fire sales in the history of the United States.

There are two factors to this. One is cheap prices. The other is a cheap dollar. For example the Canadian dollar is at parity with the USD:

For foreigners with cash, the deals can make them money from day one. Jim Chuong, a 38-year-old Novartis sales manager from Toronto, buys two-bedroom condos [in Phoenix] for less than $40,000 [$50sf] in low-crime areas. He only picks up units that already have renters. After paying association fees and taxes, he walks away with $300 a month, pre-tax, on each. The deals are now easy to do, thanks to the cottage industry of companies that has grown up to manage virtually everything for foreign buyers, down to badgering renters for the monthly check.

Another bit of data worth watching is the status of RMBS from Alt-A and subprime mortgages. Moody’s just downgraded tens of billions of dollars of these residential mortgage-backed securities:

The lower ratings are due to the rapidly deteriorating performance of the mortgage pools that back the securities, in conjunction with macroeconomic conditions that remain under duress, according to Moody’s. In February, the ratings agency updated the loss expectations on Alt-A and subprime pools issued in 2005 to 2007.

Of the 2005 vintage alone, Moody’s rates more than 5,600 tranches of MBS and has adjusted ratings on nearly 2,000 tranches already this year with another 119 on review for possible downgrade.

Moody’s also now expects housing prices to continue to fall until the third quarter of 2011, analysts said in the most-recent ResiLandscape report from the firm’s structured finance group. The agency previously expected housing prices to stabilize in the first quarter of next year.

You should understand that Moody’s was spectacularly deficient, along with S&P and Fitch, in rating these securities in the first place.

This is all supply and demand stuff. I thought things were going along well down the foreclosure path at last, despite HAMP, HARP andlegal issues to delay the process. And then the BofA robo-signing scandal hit last week and they suspending foreclosures. MAC Home Mortgage, Inc., a unit of Ally Financial Inc., and J.P. Mortgage Chase & Co.’s home-loan unit followed suit.

This will impact the market by reducing the quantity of homes on the market. Ivy Zelman expected big price declines in Q4 2010. In Florida one estimate is that it will reduce supply by 15%.

All this does is to delay the inevitable. I’m even reading mainstream articles that agree with me that:

But economists say the delays impede recovery of the U.S. housing market.

They argue the best way to heal the market is to let banks foreclose quickly, allowing homes to be resold at lower prices to qualified borrowers. That would clear the market and help stabilize prices.

“If foreclosures slow down dramatically now, from a months supply perspective, the length of time it takes to work through all of it gets longer, ” said Sam Khater, senior economist with CoreLogic, a real estate research firm.

And, even from the New York Times!:

Some economists and analysts are now urging a dose of shock therapy that would greatly shift the benefits to future homeowners: Let the housing market crash.

When prices are lower, these experts argue, buyers will pour in, creating the elusive stability the government has spent billions upon billions trying to achieve.

“Housing needs to go back to reasonable levels,” said Anthony B. Sanders, a professor of real estate finance at George Mason University. “If we keep trying to stimulate the market, that’s the definition of insanity.”

One wonders why this recession is lasting so long and unemployment stays so high. The government has done everything it could to delay the corrective market forces in a failed attempt to make things better. They have failed on all fronts and now fellow Democrats are even attacking the Obama Administration (well, he is a Clinton man):

“The administration made a bet that a rising economy would solve the housing problem and now they are out of chips,” said Howard Glaser, a former Clinton administration housing official with close ties to policy makers in the administration. “They are deeply worried and don’t really know what to do.”

Of course, we all know that.

The bottom line for the housing market?

Areas which are firming up will continue to firm up. We’ve not hit bottom in problem markets, and, while the suspension of foreclosures may give a but of a temporary price bump, prices will stall out  or continue to decline (depending where you are) until we’ve worked through the bad loans. Unfortunately this could take some time. I look at the overall economy to make my forecasts here because a rising tide would help many home owners who are upside down but don’t wish to move. I see stagnation ahead, so it could be several more years before the weak housing markets turn around.

 

Multnomahforeclosures.com Updated: New Notice of Default lists for the first week of October 2010


Multnomah County Courthouse in Portland, Orego...

Image via Wikipedia

Multnomahforeclosures.com was updated  with the largest list of Notice Defaults to date. With Notice of Default records dating back nearly 2 years. Multnomahforeclosures.com idocuments the fall of the great real estate bust of the 21st century.

All listings are in PDF and Excel Spread Sheet format.

Multnomah County Foreclosures
http://multnomahforeclosures.com

BofA Extends Freeze on Foreclosures to All 50 States, by Michael J. Moore, Lorraine Woellert and Dakin Campbell, Bloomberg.com


 

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Bank of America Corp., the biggest U.S. lender, extended a freeze on foreclosures to all 50 states as concern spread among federal and local officials that homes are being seized based on false data.

“We just want to clear the air,” Bank of America Chief Executive Officer Brian T. Moynihan said today in a speech to the National Press Club in Washington.

Bank of America, JPMorgan Chase & Co. and Ally Financial Inc. already froze foreclosures in 23 states where courts supervise home seizures amid allegations that employees used unverified or false data to speed the process. Bank of America’s new policy extends its moratorium to the entire nation, and the announcement spurred more demands from public officials and community groups for other banks to follow suit.

“All mortgage providers should follow the example of Bank of America and review their practices to ensure that they are not unfairly targeting homeowners in Nevada and across the nation,” Senate Majority Leader Harry Reid, a Democrat from Nevada, said today in a statement.

PNC Financial Services Group Inc. halted sales of foreclosed homes for a month to review documents in its mortgage servicing procedures, according to an Oct. 4 memo the Pittsburgh-based bank sent to lawyers handling the lender’s foreclosures.

Bank of America fell 13 cents, or 1 percent, to $13.18 at 4 p.m. in New York Stock Exchange composite trading. The shares have lost 12 percent this year.

States Investigating

“We will stop foreclosure sales until our assessment has been satisfactorily completed,” the Charlotte, North Carolina- based company said today in a statement. “Our ongoing assessment shows the basis for foreclosure decisions is accurate.”

At least seven states are investigating claims that home lenders and loan servicers took shortcuts to speed foreclosures. Attorneys general in Ohio and Connecticut have said some of the practices used by banks to take away homes may amount to fraud. Acting Comptroller of the CurrencyJohn Walsh last week asked the nation’s seven biggest lenders to review foreclosures for defective documents, spokesman Bryan Hubbard said.

“Bank of America has done the right thing by stopping foreclosures in all 50 states,” North Carolina Attorney General Roy Cooper said today in a statement. “Other banks that have questionable procedures should do the same while the investigation continues.”

President Barack Obama’s administration didn’t pressure the bank to enact the freeze, Moynihan said.

Record Foreclosures

Lenders took possession of a record 95,364 homes in August and issued foreclosure filings to 338,836 homeowners, or one of every 381 U.S. households, according to RealtyTrac Inc., an Irvine, California-based data vendor.

Wells Fargo spokeswoman Vickee Adams said the lender is still processing foreclosures and referred to a statement the bank put out earlier this week, saying “our affidavit procedures and daily auditing demonstrate that our foreclosure affidavits are accurate.”

Thomas Kelly, a spokesman for New York-based JPMorgan, and Gina Proia, spokeswoman for Detroit-based Ally, declined to comment.

“Bank of America has made the right choice given the circumstances of this scandal,” said Kevin Stein, associate director of the California Reinvestment Coalition in San Francisco. “The primary concern for all of these banks should be to figure out where they are handling foreclosures illegally before they erroneously and unfairly take another family’s home.”

Lawmakers React

In Washington, dozens of lawmakers in Congress have called for a freeze on foreclosures and are seeking investigations. House Oversight and Government Reform Committee ChairmanEdolphus Towns yesterday demanded a moratorium and asked New York State Attorney General Andrew Cuomo to investigate allegations of fraud. Towns, a New York Democrat, led hearings last year into Bank of America’s federal bailouts.

“The implications of ignoring the foreclosure problems are far too great to be ignored,” Towns said in a statement. “Bank of America did the right thing today and I expect to see every other responsible banking institution follow their lead.”

On Wednesday, two members of the House Financial Services Committee, Luis Gutierrez of Illinois and Dennis Moore of Kansas, asked the Special Inspector General of the Troubled Asset Relief Program to investigate foreclosure practices.

‘Unwarranted Foreclosures’

“There is already enough evidence of unwarranted foreclosures and irregularities by lenders and servicers to warrant full investigations into the practices of these financial institutions,” the lawmakers wrote in a letter.

A coalition of community organizer groups and labor unions, including the National People’s Action and the Service Employees International Union, called for a national freeze on foreclosures.

“It is unconscionable that Wall Street banks continue to use a corrupt and fraudulent procedure to flood the housing market with illegal foreclosures that are throwing millions of American families out of their homes,” the groups said in a statement today. “It’s the latest example of a predatory industry.”

To contact the reporters on this story:
Michael J. Moore in New York at
mmoore55@bloomberg.net;
Lorraine Woellert in Washington at
lwoellert@bloomberg.net;
Dakin Campbell in San Francisco at
dcampbell27@bloomberg.net.To contact the editors responsible for this story:
Alec D.B. McCabe in New York at
amccabe@bloomberg.net;
Rick Green in New York at
rgreen18@bloomberg.net.

U.S. Justice Dept. probing foreclosure processes, Yahoo.com


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WASHINGTON (Reuters) – The U.S. Justice Department said on Wednesday it was probing reports the nation’s top mortgage lenders improperly evicted struggling borrowers from their homes as part of the devastating wave of foreclosures unleashed by the financial crisis.

Amid mounting political outrage over the U.S. mortgage mess, key members of U.S. congressional banking committees joined calls for probes into the foreclosure activities of banks accused of tossing homeowners out without proper review.

At least three banks have already halted eviction proceedings, and various lawmakers have called for an industry-wide moratorium on home repossessions until the problems are fixed. Attorney General Eric Holder said the Justice Department would look into media reports that loan servicers improperly have used “robo-signers” to push through thousands of foreclosure orders.

Holder’s move, and the rising chorus of fury among lawmakers, comes ahead of November congressional elections and takes aim at one of the most visible signs of the U.S. economic crisis as hundreds of thousands of families have lost their homes as unemployment surged.

The moves on foreclosures risk further slowing the U.S. economic recovery, leaving banks unsure whether they will ever claw back losses and the housing market overshadowed by a mounting inventory of homes still likely to face foreclosure in future.

U.S. House of Representatives Speaker Nancy Pelosi and fellow Democrats wrote to Holder earlier this week asking the Justice Department to look into banks’ actions after receiving reports from thousands of homeowners about their foreclosure woes.

On Wednesday, the lead Republican on the Senate Banking Committee, Senator Richard Shelby, called on federal regulators to review the foreclosure practices of JPMorgan Chase and Co (JPM.N), Bank of America Corp (BAC.N) and Ally Financial Inc, formerly known as GMAC, and said a congressional investigation should also be started.

Two senior Democratic members of the House Financial Services Committee also said it was time to examine whether the banks broke the law based on their participation in the law that governed the Troubled Asset Relief Program, the $700 billion bailout of financial firm.

“The American people helped out these companies and the least they deserve is a guarantee of due process and fairness,” Representatives Luis Gutierrez and Dennis Moore said.

Banks are expected to take over a record 1.2 million homes this year, up from about 1 million last year, according to real estate data company RealtyTrac Inc.

Federal and state officials have pushed to suspend foreclosures after reports that banks signed large numbers of foreclosure affidavits without conducting proper reviews.

Banks and loan servicers, companies that collect monthly mortgage payments, reportedly have used “robo-signers” — middle-ranking executives who signed thousands of affidavits a month claiming they were knowledgeable of the cases.

Separately on Wednesday, Wells Fargo & Co (WFC.N) agreed to pay eight states $24 million after allegations of deceptive marketing practices at its home loan unit. The firm said it would also alter its foreclosure prevention practices that could benefit struggling homeowners by more than $700 million.

Wells Fargo Home Mortgage‘s chief financial officer, Franklin Codel, told Reuters that his unit did not cut corners to speed the foreclosure process. He said he was “confident that the paperwork is being properly produced.”

STATES TAKE ACTION

The issue on improper handling of foreclosures came to the fore last month when Ally Financial said officials had signed thousands of affidavits without having personal knowledge of borrowers’ situations.

Ally suspended evictions and post-foreclosure proceedings in 23 states last month, followed by similar moves by JPMorgan Chase & Co and Bank of America.

The foreclosure issue and the battered state of the U.S. housing market have weighed on the Obama administration ahead of the November congressional elections in which the Democrats already face the possibility of big losses.

Any broader push to solve the foreclosure crisis, such as the wholesale forgiveness of principal debt of struggling homeowners, is unlikely to find support among lawmakers because of the cost and the potential for political backlash from any move seen as rewarding reckless behavior by banks or borrowers.

The focus on bank procedures has thrown a new twist into the saga.

North Carolina Attorney General Roy Cooper on Wednesday became the latest state official to ask lenders to suspend home repossessions as he probes foreclosure practices.

Democratic Senator Robert Menendez earlier this week raised the idea of a national foreclosure moratorium.

Ally Financial and its GMAC Mortgage unit also were targeted by Ohio’s attorney general, Richard Cordray, on Wednesday, who announced a lawsuit alleging fraud and violations of Ohio’s consumer law.

Cordray also said he has sought meetings with Citibank (C.N), Bank of America, JPMorgan Chase and Wells Fargo to try to ascertain whether their foreclosure processes include any of the “mass” signing of official papers that are the subject of the suit against GMAC Mortgage.

Gina Proia, a spokeswoman for Ally Financial, said there was nothing fraudulent or deceitful about GMAC Mortgage’s practices. She said the company will “vigorously defend” itself, and expects to be fully vindicated by the Ohio courts.

GMAC Mortgage said in a statement it “believes there was nothing fraudulent or deceitful about its foreclosure practices. If procedural mistakes were made in the completion of certain legal documents, GMAC Mortgage reacted proactively to the issue and immediately undertook steps to remedy the situation.”

(Writing by Corbett B. Daly and Andrew Quinn; Editing by Leslie Adler)

 

Prices rise for homes in foreclosure or sold by banks, by Alejandro Lazo, Los Angeles Times (Latimes.com)


The increase underscores the degree to which the mortgage crisis has spread to more affluent neighborhoods.

Prices for homes either in foreclosure or sold by banks rose in the second quarter, according to a real estate group, underscoring competition in the market for distressed properties and the degree to which the mortgage crisis has spread to more affluent neighborhoods.


FOR THE RECORD:
Homes in foreclosure: A chart accompanying an article in some editions of the Sept. 30 Business section contained errors in illustrating the rise in the average price of homes sold during or after foreclosure in Southern California, the state and the nation. The chart listed prices for 2009 and 2010 but failed to note that the time frame was the second quarter of each year. The data, credited to Bloomberg, were compiled by RealtyTrac of Irvine. And the numbers presented for 2009 were incorrectly transcribed from RealtyTrac’s original data. A corrected version of the chart appears on Page B2 of the Business section. —


In the second quarter, 248,534 U.S. properties were sold by banks or by owners who had fallen into foreclosure, RealtyTrac of Irvine said. That was an increase of 4.9% from the previous quarter, but a 20.1% decline from the same quarter last year, when discounted bank-owned homes flooded the market.

The average price for these properties was $174,198, RealtyTrac said, up 1.6% from the previous quarter and 6.1% from the same quarter last year.

“We are seeing the tail end of the foreclosure crisis caused by bad loans,” said Rick Sharga, senior vice president of RealtyTrac. “We are seeing the beginning of the wave of foreclosures caused by unemployment, which means you are seeing, in a lot of cases, a more expensive property in foreclosure than you would see, say, based on a subprime loan.”

The price increase was more pronounced in California, according to RealtyTrac. The average price was $256,833 for homes sold by banks or by homeowners who had at least received a notice of default from their lenders. That was an increase of 4.2% from the previous quarter and 17.5% from the same quarter last year.

The sales tracked by RealtyTrac included only properties sold to third parties, either investors or consumers, and not sales of properties sold back to lenders at trustee sales or through other transactions.

Overall home sales during the three-month period captured by the report were boosted by a popular federal tax credit for buyers. Since then, sales of U.S. homes have weakened considerably, and many experts are predicting a decline in home valuations.

“It is tempered a little bit by the fact that it covers the period of the tax credit, and everything looked fine, and since then the market has dropped off,” said Gerd-Ulf Krueger, principal economist at Housingecon.com. “We need to watch this a little more and what it shows under the slower market conditions.”

Banks have been repossessing homes at a record clip this year, pushing properties through foreclosure that had been delayed by several moratoriums last year as well as the Obama administration’s efforts to help troubled borrowers. In recent weeks, the practices of banks taking back homes through foreclosure have increasingly become a concern.

Wall Street titan JPMorgan Chase said Wednesday that it was delaying foreclosure proceedings after it discovered that some employees signed affidavits about loan documents on the basis of file reviews done by other people instead of personally reviewing those files.

The New York bank said it was working with independent counsel to review documents in foreclosure proceedings and has requested that the courts not enter judgments in pending matters until it has completed the review. Those foreclosures only apply to properties in so-called judicial foreclosure states, which require a court order for a foreclosure. The vast majority of foreclosures in California are conducted without a court order.

The JPMorgan Chase foreclosure delay follows a similar move by Ally Financial Inc. last week, when its GMAC Mortgage unit suspended evictions and foreclosures in 23 states while it conducted a review of its processes.

The Detroit company, formerly known as GMAC Inc., didn’t suspend evictions in California because almost all foreclosures in the state by it and other lenders don’t require a court order. Nevertheless, Atty. Gen. Jerry Brown has told the company to halt foreclosures unless it could prove it was observing the state’s laws.

alejandro.lazo@latimes.com

Multnomahforeclosures.com: Updated Notice of Default Lists and Books for the Week of September 24th, 2010


Multnomahforeclosures.com was updated today with the largest list of Notice Defaults to date. With Notice of Default records dating back nearly 2 years. Multnomahforeclosures.com idocuments the fall of the great real estate bust of the 21st century.

All listings are in PDF and Excel Spread Sheet format.

Multnomah County Foreclosures
http://multnomahforeclosures.com