Floridians who are struggling to make mortgage payments are getting additional help from the federal government’s Innovation Fund for the Hardest Hit Housing Markets.
The Treasury Department this week approved a plan by the Florida Housing Finance Corp. to redirect $239 million in previously approved foreclosure-prevention assistance expand options for unemployed workers.
Treasury also announced the state housing agency is getting $401 million more in Hardest Hit money to expand the reach of its programs.
Assistant Treasury Secretary Herb Allison said the aid is being targeted to areas and states such as Florida, where unemployment and steep home price declines have been concentrated.
Source: The Associated Press.
Thursday, September 30, 2010
Sales of foreclosure properties on the rise
Foreclosures accelerated in the second quarter, driving down home prices and accounting for nearly half of all sales in several states.
Nationally, homes sold at foreclosure accounted for 24 percent of all residential sales in the second quarter of 2010, RealtyTrac reports.
The average price of properties sold while in some stage of foreclosure was more than 26 percent below the average for properties not in the foreclosure process.
“It’s obvious foreclosures remain a major drag across the U.S.,” says Robert Dye, senior economist at PNC Financial Services Group. “Pioneering buyers with low mortgage rates will continue to take advantage of these properties. It’s going to take quite awhile to work through this inventory. It will take a few years, not months.”
A total of 248,534 U.S. properties in some stage of foreclosure – default, scheduled for auction or bank-owned – were sold to third parties in the second quarter. That’s up almost 5 percent from the first quarter, but down 20 percent from second-quarter 2009.
Some states were especially hard hit. Foreclosure sales accounted for nearly 56 percent of all sales in Nevada in the second quarter, the highest percentage of any state. Ranked second was Arizona, where foreclosure sales accounted for 47 percent of all sales.
In California, 43 percent of sales were foreclosure properties. Other states where foreclosures were large shares of all sales were Rhode Island, 37 percent; Massachusetts, 35 percent; Florida, 34 percent; and Michigan, 33 percent.
The uptick in foreclosures comes despite a federal effort to help homeowners struggling to retain their homes get modified mortgages with more affordable payments, as well as efforts by lenders to reduce payments for some borrowers.
“It’s clear this will be with us for some time,” says Lawrence Yun, chief economist with the National Association of Realtors.
Foreclosures used to be rising because so many borrowers had taken on mortgages they couldn’t afford, he says.
“The further we go, more foreclosures will be related to the job market rather than people who overstretched,” Yun says. “There will be more traditional reasons for the foreclosures.”
Foreclosure sales could pick up now that a federal tax credit for home buyers has expired, economists say.
The credit gave borrowers the flexibility to bid on houses at higher prices.
Without the credit, demand for lower-priced foreclosed homes could pick up. And that could pull down overall prices further.
“Prices will fall and will put more people into negative equity, which causes more people to (go into) foreclosure,” says Mark Zandi at Moody’s Analytics.com.
Source: USA TODAY, a division of Gannett Co. Inc., Stephanie Armour.
Nationally, homes sold at foreclosure accounted for 24 percent of all residential sales in the second quarter of 2010, RealtyTrac reports.
The average price of properties sold while in some stage of foreclosure was more than 26 percent below the average for properties not in the foreclosure process.
“It’s obvious foreclosures remain a major drag across the U.S.,” says Robert Dye, senior economist at PNC Financial Services Group. “Pioneering buyers with low mortgage rates will continue to take advantage of these properties. It’s going to take quite awhile to work through this inventory. It will take a few years, not months.”
A total of 248,534 U.S. properties in some stage of foreclosure – default, scheduled for auction or bank-owned – were sold to third parties in the second quarter. That’s up almost 5 percent from the first quarter, but down 20 percent from second-quarter 2009.
Some states were especially hard hit. Foreclosure sales accounted for nearly 56 percent of all sales in Nevada in the second quarter, the highest percentage of any state. Ranked second was Arizona, where foreclosure sales accounted for 47 percent of all sales.
In California, 43 percent of sales were foreclosure properties. Other states where foreclosures were large shares of all sales were Rhode Island, 37 percent; Massachusetts, 35 percent; Florida, 34 percent; and Michigan, 33 percent.
The uptick in foreclosures comes despite a federal effort to help homeowners struggling to retain their homes get modified mortgages with more affordable payments, as well as efforts by lenders to reduce payments for some borrowers.
“It’s clear this will be with us for some time,” says Lawrence Yun, chief economist with the National Association of Realtors.
Foreclosures used to be rising because so many borrowers had taken on mortgages they couldn’t afford, he says.
“The further we go, more foreclosures will be related to the job market rather than people who overstretched,” Yun says. “There will be more traditional reasons for the foreclosures.”
Foreclosure sales could pick up now that a federal tax credit for home buyers has expired, economists say.
The credit gave borrowers the flexibility to bid on houses at higher prices.
Without the credit, demand for lower-priced foreclosed homes could pick up. And that could pull down overall prices further.
“Prices will fall and will put more people into negative equity, which causes more people to (go into) foreclosure,” says Mark Zandi at Moody’s Analytics.com.
Source: USA TODAY, a division of Gannett Co. Inc., Stephanie Armour.
JPMorgan halts 50K foreclosures for possible flaws
JPMorgan Chase has temporarily stopped foreclosing on more than 50,000 homes so it can review documents that might contain errors.
JPMorgan’s move Wednesday makes it the second major company to take such action this month, underscoring a growing legal problem. The issue could stall an already overloaded foreclosure process.
Still, analysts don’t expect the delays to reduce the number of foreclosures over the long run.
“It will probably slow things down for a couple months while these documents are reviewed,” said Rick Sharga, a senior vice president at foreclosure listing service RealtyTrac Inc. “It won’t stop things.”
But if the problems turn up at more of the largest mortgage companies, a foreclosure crisis that’s already likely to drag on for several more years could persist even longer.
GMAC Mortgage LLC last week halted certain evictions and sales of foreclosed homes in 23 states to review those cases. The company said it found procedural errors in some foreclosure affidavits.
After GMAC’s announcement, attorneys general in California and Connecticut told the company to stop foreclosures in their states until it proves it’s complying with state law. The Ohio attorney general this week asked judges to review GMAC foreclosure cases.
And in Florida, the state attorney general is investigating four law firms, two with ties to GMAC, for allegedly providing fraudulent documents in foreclosure cases.
The issue is also gaining attention on Capitol Hill. Last week, Rep. Barney Frank, D-Mass. and two other lawmakers wrote to Fannie Mae, urging the government-controlled mortgage giant to stop working with so-called “foreclosure mill” law firms under investigation for document fraud.
“Why is Fannie Mae using lawyers that are accused of regularly engaging in fraud to kick people out of their homes?” the lawmakers wrote.
A Fannie Mae spokesman said the company is reviewing the issue.
JPMorgan acknowledged Wednesday that its employees signed some affidavits about loan documents without personally verifying the files. These affidavits verify the accuracy of the loan information, including who owns the mortgage.
JPMorgan spokesman Kelly said the bank believes the information in the affidavits is accurate, and that the affidavits were prepared by “appropriate personnel.”
The bank asked judges not to enter judgments against homeowners facing foreclosure until it completes its review of the problem. JPMorgan expects the process to take a few weeks.
The way mortgages are packaged and sold to many investors as securities can make it hard to determine who has the right to foreclose on a homeowner.
In some states, lenders can foreclose quickly on delinquent mortgage borrowers. But 20 states use a lengthy court process for foreclosures. They require documents to verify information on the mortgage, including who owns it. Florida, New York, New Jersey and Illinois are the biggest states with this process.
Christopher Immel, a Florida lawyer who represents homeowners, said people who already have lost homes could sue their lender, alleging errors in documents.
In August, a judge in Duval County, Fla., ruled that JPMorgan could not foreclose on two homeowners. The reasoning was that Fannie Mae carried the mortgage on its books and JPMorgan Chase only collected payments on the loan. JPMorgan Chase had identified itself as the owner of the loan.
More lawsuits could come soon.
In May, JPMorgan employee Beth Ann Cottrell said in a deposition that she and her staff of eight signed about 18,000 legal documents a month without reviewing every file. In a similar testimony, GMAC employee Jeffrey Stephan said he signed 10,000 documents a month without personally verifying the mortgage information.
“It’s very realistic to believe that this is a standard practice in how they go about foreclosures in certain states,” said Immel, whose law firm took Cottrell’s and Stephan’s depositions.
Source: The Associated Press; Alan Zibel, AP Real Estate Writers; Janna Herron, AP Real Estate Writers. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Zibel contributed to this report from Washington.
JPMorgan’s move Wednesday makes it the second major company to take such action this month, underscoring a growing legal problem. The issue could stall an already overloaded foreclosure process.
Still, analysts don’t expect the delays to reduce the number of foreclosures over the long run.
“It will probably slow things down for a couple months while these documents are reviewed,” said Rick Sharga, a senior vice president at foreclosure listing service RealtyTrac Inc. “It won’t stop things.”
But if the problems turn up at more of the largest mortgage companies, a foreclosure crisis that’s already likely to drag on for several more years could persist even longer.
GMAC Mortgage LLC last week halted certain evictions and sales of foreclosed homes in 23 states to review those cases. The company said it found procedural errors in some foreclosure affidavits.
After GMAC’s announcement, attorneys general in California and Connecticut told the company to stop foreclosures in their states until it proves it’s complying with state law. The Ohio attorney general this week asked judges to review GMAC foreclosure cases.
And in Florida, the state attorney general is investigating four law firms, two with ties to GMAC, for allegedly providing fraudulent documents in foreclosure cases.
The issue is also gaining attention on Capitol Hill. Last week, Rep. Barney Frank, D-Mass. and two other lawmakers wrote to Fannie Mae, urging the government-controlled mortgage giant to stop working with so-called “foreclosure mill” law firms under investigation for document fraud.
“Why is Fannie Mae using lawyers that are accused of regularly engaging in fraud to kick people out of their homes?” the lawmakers wrote.
A Fannie Mae spokesman said the company is reviewing the issue.
JPMorgan acknowledged Wednesday that its employees signed some affidavits about loan documents without personally verifying the files. These affidavits verify the accuracy of the loan information, including who owns the mortgage.
JPMorgan spokesman Kelly said the bank believes the information in the affidavits is accurate, and that the affidavits were prepared by “appropriate personnel.”
The bank asked judges not to enter judgments against homeowners facing foreclosure until it completes its review of the problem. JPMorgan expects the process to take a few weeks.
The way mortgages are packaged and sold to many investors as securities can make it hard to determine who has the right to foreclose on a homeowner.
In some states, lenders can foreclose quickly on delinquent mortgage borrowers. But 20 states use a lengthy court process for foreclosures. They require documents to verify information on the mortgage, including who owns it. Florida, New York, New Jersey and Illinois are the biggest states with this process.
Christopher Immel, a Florida lawyer who represents homeowners, said people who already have lost homes could sue their lender, alleging errors in documents.
In August, a judge in Duval County, Fla., ruled that JPMorgan could not foreclose on two homeowners. The reasoning was that Fannie Mae carried the mortgage on its books and JPMorgan Chase only collected payments on the loan. JPMorgan Chase had identified itself as the owner of the loan.
More lawsuits could come soon.
In May, JPMorgan employee Beth Ann Cottrell said in a deposition that she and her staff of eight signed about 18,000 legal documents a month without reviewing every file. In a similar testimony, GMAC employee Jeffrey Stephan said he signed 10,000 documents a month without personally verifying the mortgage information.
“It’s very realistic to believe that this is a standard practice in how they go about foreclosures in certain states,” said Immel, whose law firm took Cottrell’s and Stephan’s depositions.
Source: The Associated Press; Alan Zibel, AP Real Estate Writers; Janna Herron, AP Real Estate Writers. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Zibel contributed to this report from Washington.
The Five-Step Formula to Creating a Successful Marketing Message
Your marketing message is what grabs your prospective buyer’s and seller’s attention, tells them how you can successfully help them buy a home or sell their current home, why they should trust you, and why they should choose to do business with you.
In order to get this message across, your marketing should “speak” to your prospects. This is done by appealing to your prospect’s “hot buttons” or those sensitivities that trigger an emotional reaction.
According to David Frey of Marketing Best Practices, Inc., the following is a simple five-step method for creating an effective marketing message.
Step 1 – Identify your target market
The first step in creating an effective marketing message starts by asking yourself, “Who is my target market?” Once you have narrowed this down, it’s easier to craft a message that speaks to the specific market that you have decided to focus on.
Step 2 – Identify the problems your target market experiences
Once you have established who your target market consists of, the second step has to do with asking yourself, “What problems do my target market have and how does it make them feel?” Each market experiences its own frustrations and pains. The secret to crafting a marketing message that will make your market sit up and listen is to identify their problem and the pain and suffering they feel as a result of that problem. Identifying your market’s pain tells them that you understand and empathize with them.
Step 3 – Present your solution to your market’s problem
Now that you have defined the frustrations that your target market deals with, you must ask yourself, “What is the solution that I have to offer my prospect(s)? Present your solution as a simple cure for all the pain and suffering your market is feeling as a result of their problem. Now, identify all the benefits of your solution and how those benefits will improve the life of your prospect(s) and take away all their pain and anguish.
Step 4 – Present the results you’ve produced for other people in the same situation
It’s not enough just to tell people you have a solution; you have to prove to them that your solution works. The best way to do this is by proving your real estate success by offering testimonials from current and former clients.
Step 5 – Explain what makes you different from your competitors
Prospective buyers and sellers are looking for you to communicate your differences in order to show how you will go above and beyond in helping them achieve their real estate goals.
By Paige Tepping; RISMedia
In order to get this message across, your marketing should “speak” to your prospects. This is done by appealing to your prospect’s “hot buttons” or those sensitivities that trigger an emotional reaction.
According to David Frey of Marketing Best Practices, Inc., the following is a simple five-step method for creating an effective marketing message.
Step 1 – Identify your target market
The first step in creating an effective marketing message starts by asking yourself, “Who is my target market?” Once you have narrowed this down, it’s easier to craft a message that speaks to the specific market that you have decided to focus on.
Step 2 – Identify the problems your target market experiences
Once you have established who your target market consists of, the second step has to do with asking yourself, “What problems do my target market have and how does it make them feel?” Each market experiences its own frustrations and pains. The secret to crafting a marketing message that will make your market sit up and listen is to identify their problem and the pain and suffering they feel as a result of that problem. Identifying your market’s pain tells them that you understand and empathize with them.
Step 3 – Present your solution to your market’s problem
Now that you have defined the frustrations that your target market deals with, you must ask yourself, “What is the solution that I have to offer my prospect(s)? Present your solution as a simple cure for all the pain and suffering your market is feeling as a result of their problem. Now, identify all the benefits of your solution and how those benefits will improve the life of your prospect(s) and take away all their pain and anguish.
Step 4 – Present the results you’ve produced for other people in the same situation
It’s not enough just to tell people you have a solution; you have to prove to them that your solution works. The best way to do this is by proving your real estate success by offering testimonials from current and former clients.
Step 5 – Explain what makes you different from your competitors
Prospective buyers and sellers are looking for you to communicate your differences in order to show how you will go above and beyond in helping them achieve their real estate goals.
By Paige Tepping; RISMedia
Wednesday, September 29, 2010
Miami Existing Condominium Sales Spike 51 Percent, Single-Family Home Sales also Rise in August
The Miami real estate market continues to strengthen as a result of increased sales and stabilizing home prices. In the Miami Metropolitan Statistical Area (MSA), there was a 51 percent increase in condominium sales in August compared to August 2009 and a 77 percent increase compared to two years ago, according to the MIAMI Association of REALTORS and the Southeast Florida Multiple Listing Service (SEFMLS).
Copyright MIAMI, Reprinted with permission
Copyright MIAMI, Reprinted with permission
Bank of America urges funding for investors
Analysts from Bank of America have a unique proposal: Instead of further funding TARP to help distressed homeowners hold onto their properties, give the money to property management companies that would then buy property and turn it into rentals.
In a recent research paper, Bank of America analysts suggested that the government spend as much as $400 billion to encourage property management companies to buy properties and rent them out. That, according to research, would bring the homeownership level to “a more natural level of 62 percent to 64 percent” from its current 67 percent.
Under Bank of America’s recommendation, investors would be prevented from reselling the properties quickly.
Source: The Wall Street Journal, Emily Peck (09/27/2010)
Source: INFORMATION, INC. Bethesda, MD
In a recent research paper, Bank of America analysts suggested that the government spend as much as $400 billion to encourage property management companies to buy properties and rent them out. That, according to research, would bring the homeownership level to “a more natural level of 62 percent to 64 percent” from its current 67 percent.
Under Bank of America’s recommendation, investors would be prevented from reselling the properties quickly.
Source: The Wall Street Journal, Emily Peck (09/27/2010)
Source: INFORMATION, INC. Bethesda, MD
Home prices to take hit next year in many markets
Don’t take the latest snapshot of U.S. home prices too seriously.
The Standard & Poor’s/Case-Shiller 20-city index released Tuesday ticked up in July from June. But the gain is merely temporary, analysts say. They see home values taking a dive in many major markets well into next year.
That’s because the peak homebuying season is now ending after a dismal summer. The hardest-hit markets, already battered by foreclosures, are bracing for a bigger wave of homes sold at foreclosure or through short sales. A short sale is when a lender lets a homeowner sell for less than the mortgage is worth.
Add high unemployment and reluctant buyers, and the outlook in many areas is bleak. Nationally, home values are projected to fall 2.2 percent in the second half of the year, according to analysts surveyed by MacroMarkets LLC. And Moody’s Analytics predicts the Case-Shiller index will drop 8 percent within a year.
Among the areas likely to endure big price drops, according to Veros, a real estate analysis company:
• Port St. Lucie, Fla., and Reno, Nev., where prices could fall 7 percent over the next year.
• Orlando and Daytona Beach, Fla., which face price drops of at least 6 percent.
• Las Vegas, which led all declines in the latest report, is also expected to post a 6 percent drop. Home values there have already tumbled 57 percent from their peak four years ago.
Las Vegas has been hit by foreclosures and the loss of tourism and construction jobs. More than 70 percent of homeowners there owe more on their mortgages than their homes are worth, according to real estate data firm CoreLogic. And the city’s unemployment rate is nearly 15 percent, one of the highest for major U.S. markets.
The outlook in Orlando is also grim. More than half of borrowers owe more on their mortgages than their properties are worth. The unemployment rate there is nearly 12 percent.
This year, about 2 million, or 41 percent, of the 5 million homes sold this year will be distressed sales, predict analysts at John Burns Real Estate Consulting in Irvine, Calif. Distressed sales include foreclosures and short sales.
For next year, that figure is on pace to hit 2.4 million homes, or 45 percent of all sales. Distressed sales are projected to make up at least a quarter of the market for the next four years. In healthy housing markets, distressed sales typically make up only 6 to 7 percent of annual sales.
A much brighter outlook is forecast for some areas of the country, especially major cities that never experienced an outsized housing boom – and bust. Major cities in Texas, for example, have relatively healthy economies and low levels of foreclosures.
Dallas home prices fell only 11 percent from their peak in 2007 and bottomed out last year. They have since rebounded about 8 percent. Houston and Dallas are projected to rise about 3 to 4 percent over the next year.
Those markets “don’t have the huge supply of homes that a lot of the coastal markets have,” said Eric Fox, vice president of economic and statistical modeling at Veros.
Houston and Dallas both have jobless rates under 9 percent, below the national average of 9.6 percent. And in both cities, fewer than 15 percent of borrowers owe more on their homes than their properties are worth.
Nationally, prices have risen nearly 7 percent from their April 2009 bottom. Yet they remain nearly 28 percent below their July 2006 peak.
Most experts predict about 5 million homes will be sold this year. That would be in line with last year and just above 2008, the worst sales performance since 1997.
The latest changes in the Case-Shiller national index represent a three-month moving average – for May, June and July. Sales in May and June were inflated by government tax credits that have since expired.
July was the worst month for home sales in 15 years. August wasn’t much better. The record number of foreclosures, job concerns and weak demand from buyers have combined to weigh down prices.
“The market, at best, is weak, and starting to decline,” said Michael Feder, chief executive of Radar Logic Inc., which tracks the housing market.
Source: The Associated Press; Alan Zibel and Janna Herron, AP real estate writers. Herron contributed to this report from New York.
The Standard & Poor’s/Case-Shiller 20-city index released Tuesday ticked up in July from June. But the gain is merely temporary, analysts say. They see home values taking a dive in many major markets well into next year.
That’s because the peak homebuying season is now ending after a dismal summer. The hardest-hit markets, already battered by foreclosures, are bracing for a bigger wave of homes sold at foreclosure or through short sales. A short sale is when a lender lets a homeowner sell for less than the mortgage is worth.
Add high unemployment and reluctant buyers, and the outlook in many areas is bleak. Nationally, home values are projected to fall 2.2 percent in the second half of the year, according to analysts surveyed by MacroMarkets LLC. And Moody’s Analytics predicts the Case-Shiller index will drop 8 percent within a year.
Among the areas likely to endure big price drops, according to Veros, a real estate analysis company:
• Port St. Lucie, Fla., and Reno, Nev., where prices could fall 7 percent over the next year.
• Orlando and Daytona Beach, Fla., which face price drops of at least 6 percent.
• Las Vegas, which led all declines in the latest report, is also expected to post a 6 percent drop. Home values there have already tumbled 57 percent from their peak four years ago.
Las Vegas has been hit by foreclosures and the loss of tourism and construction jobs. More than 70 percent of homeowners there owe more on their mortgages than their homes are worth, according to real estate data firm CoreLogic. And the city’s unemployment rate is nearly 15 percent, one of the highest for major U.S. markets.
The outlook in Orlando is also grim. More than half of borrowers owe more on their mortgages than their properties are worth. The unemployment rate there is nearly 12 percent.
This year, about 2 million, or 41 percent, of the 5 million homes sold this year will be distressed sales, predict analysts at John Burns Real Estate Consulting in Irvine, Calif. Distressed sales include foreclosures and short sales.
For next year, that figure is on pace to hit 2.4 million homes, or 45 percent of all sales. Distressed sales are projected to make up at least a quarter of the market for the next four years. In healthy housing markets, distressed sales typically make up only 6 to 7 percent of annual sales.
A much brighter outlook is forecast for some areas of the country, especially major cities that never experienced an outsized housing boom – and bust. Major cities in Texas, for example, have relatively healthy economies and low levels of foreclosures.
Dallas home prices fell only 11 percent from their peak in 2007 and bottomed out last year. They have since rebounded about 8 percent. Houston and Dallas are projected to rise about 3 to 4 percent over the next year.
Those markets “don’t have the huge supply of homes that a lot of the coastal markets have,” said Eric Fox, vice president of economic and statistical modeling at Veros.
Houston and Dallas both have jobless rates under 9 percent, below the national average of 9.6 percent. And in both cities, fewer than 15 percent of borrowers owe more on their homes than their properties are worth.
Nationally, prices have risen nearly 7 percent from their April 2009 bottom. Yet they remain nearly 28 percent below their July 2006 peak.
Most experts predict about 5 million homes will be sold this year. That would be in line with last year and just above 2008, the worst sales performance since 1997.
The latest changes in the Case-Shiller national index represent a three-month moving average – for May, June and July. Sales in May and June were inflated by government tax credits that have since expired.
July was the worst month for home sales in 15 years. August wasn’t much better. The record number of foreclosures, job concerns and weak demand from buyers have combined to weigh down prices.
“The market, at best, is weak, and starting to decline,” said Michael Feder, chief executive of Radar Logic Inc., which tracks the housing market.
Source: The Associated Press; Alan Zibel and Janna Herron, AP real estate writers. Herron contributed to this report from New York.
Redesigned Realtor.com launches today
Move Inc. today launched a redesigned Realtor.com website. Move provides the day-to-day technical support for Realtor.com, which is owned by the National Association of Realtors®.
The redesigned Realtor.com, according to Move, is backed by new technology that integrates multiple search capabilities to help consumers find their property faster and connect more easily with local real estate experts.
“A primary objective for the redesign was to create a search experience that places more information in the hands of both Realtors and consumers, supported by technology that enables Move to make fluid platform innovations,” says Steve Berkowitz, chief executive officer of Move, Inc. “The new site also empowers real estate professionals to be clearly positioned as local experts in a manner that keeps them central to real estate transactions.”
According to Berkowitz, a visitor can now find active listings, new construction, rentals and off-market (recently sold) properties using a single search on the Realtor.com home page. Buyers and real estate professionals can now find active listings alongside sales and tax history from sold listings, and other relevant property data that reflects local market trends.
“Streamlining the search experience … vastly improves the speed at which data is surfaced in a more organized fashion,” Berkowitz says.
Another new feature is the Spotlight module – a content-driven widget continuously updated with market insights, information and real estate technologies developed by Move that enhance the search experience. Through the Spotlight module, buyers and sellers can also quickly access Realtor.com’s free home valuation service for information about local market conditions and, in the process, recognize the value of working with a Realtor.
Property listings on the new Realtor.com now organize information so prospective buyers can better evaluate, compare and locate properties of interest. As part of the redesign, the listing detail pages provide a categorized, at-a-glance summary of each property listing that better displays price and lot size, the number and types of rooms, the interior and exterior features, and more. The new listing detail pages also provide the most recent property details updated directly from Move’s Multiple Listing Service (MLS) partners, as well as the number of days each property has been displayed on the site. When available, the property’s sales and tax history is provided along with standard information such as school ratings, property information, virtual tours and the agent’s other listings.
A new map experience includes the same integrated experience with separate icons for sale, off-market or sold properties. The interactive maps, generated by Microsoft’s Bing Maps, provide driving directions, estimated values of neighboring properties, median income, nearby listings and nearby points of interest, such as hospitals, police and fire stations, places of worship, libraries, restaurants, post offices and more. A new “Nearby Schools” section displays public and private schools, and school ratings.
“The integration of Move’s proprietary technology with these new design changes creates an exciting opportunity for today’s buyers to expand their expectations of how to search for a home on Realtor.com, what to expect as they explore neighborhoods and local market trends, and how to find the right real estate professional,” says Errol Samuelson, president of Realtor.com.
“In addition, Move’s commitment to keep real estate professionals central to the transaction is reaffirmed on the new ‘Find Realtors’ landing page,” Samuelson explains. “By combining features from ‘See My Listings’ into this new experience … we believe real estate professionals will receive greater exposure of their brands and client listings.”
The new ‘Find Realtors’ Profile pages are free to agents and brokers, and empower them to share their professional information, details on their company, information on the areas they serve, specializations, current listings, links to their company website, open houses, contact information, headshot photo, and more with prospective clients. A new field allows users and offices to include links to Facebook Fan Pages, Twitter and other social networking sites.
Source: Florida Realtors®
The redesigned Realtor.com, according to Move, is backed by new technology that integrates multiple search capabilities to help consumers find their property faster and connect more easily with local real estate experts.
“A primary objective for the redesign was to create a search experience that places more information in the hands of both Realtors and consumers, supported by technology that enables Move to make fluid platform innovations,” says Steve Berkowitz, chief executive officer of Move, Inc. “The new site also empowers real estate professionals to be clearly positioned as local experts in a manner that keeps them central to real estate transactions.”
According to Berkowitz, a visitor can now find active listings, new construction, rentals and off-market (recently sold) properties using a single search on the Realtor.com home page. Buyers and real estate professionals can now find active listings alongside sales and tax history from sold listings, and other relevant property data that reflects local market trends.
“Streamlining the search experience … vastly improves the speed at which data is surfaced in a more organized fashion,” Berkowitz says.
Another new feature is the Spotlight module – a content-driven widget continuously updated with market insights, information and real estate technologies developed by Move that enhance the search experience. Through the Spotlight module, buyers and sellers can also quickly access Realtor.com’s free home valuation service for information about local market conditions and, in the process, recognize the value of working with a Realtor.
Property listings on the new Realtor.com now organize information so prospective buyers can better evaluate, compare and locate properties of interest. As part of the redesign, the listing detail pages provide a categorized, at-a-glance summary of each property listing that better displays price and lot size, the number and types of rooms, the interior and exterior features, and more. The new listing detail pages also provide the most recent property details updated directly from Move’s Multiple Listing Service (MLS) partners, as well as the number of days each property has been displayed on the site. When available, the property’s sales and tax history is provided along with standard information such as school ratings, property information, virtual tours and the agent’s other listings.
A new map experience includes the same integrated experience with separate icons for sale, off-market or sold properties. The interactive maps, generated by Microsoft’s Bing Maps, provide driving directions, estimated values of neighboring properties, median income, nearby listings and nearby points of interest, such as hospitals, police and fire stations, places of worship, libraries, restaurants, post offices and more. A new “Nearby Schools” section displays public and private schools, and school ratings.
“The integration of Move’s proprietary technology with these new design changes creates an exciting opportunity for today’s buyers to expand their expectations of how to search for a home on Realtor.com, what to expect as they explore neighborhoods and local market trends, and how to find the right real estate professional,” says Errol Samuelson, president of Realtor.com.
“In addition, Move’s commitment to keep real estate professionals central to the transaction is reaffirmed on the new ‘Find Realtors’ landing page,” Samuelson explains. “By combining features from ‘See My Listings’ into this new experience … we believe real estate professionals will receive greater exposure of their brands and client listings.”
The new ‘Find Realtors’ Profile pages are free to agents and brokers, and empower them to share their professional information, details on their company, information on the areas they serve, specializations, current listings, links to their company website, open houses, contact information, headshot photo, and more with prospective clients. A new field allows users and offices to include links to Facebook Fan Pages, Twitter and other social networking sites.
Source: Florida Realtors®
Foreclosure gaffs may further roil market
Uncovering deficiencies in the foreclosure process could potentially have serious implications for the market, said Stuart Saft, a partner at New York law firm Dewey & LeBoeuf, because it raises questions about the ownership of properties that have been resold.
Mortgage servicers, who asked for anonymity, say they anticipate more legal action contesting foreclosures.
Miami attorney Richard J. Burton, who specializes in foreclosure litigation, says he expects that class-action lawsuits will be filed against GMAC and other servicers, furthering slowing the foreclosure process.
The turmoil in the market also could encourage more voluntary defaults, said Cameron Findlay, chief economist at LendingTree.com, because overwhelmed lenders may simply ignore newly delinquent homeowners.
Source: Bloomberg, Bob Ivry, Prashant Gopal and Jody Shenn (09/27/2010)
Source: INFORMATION, INC. Bethesda, MD
Mortgage servicers, who asked for anonymity, say they anticipate more legal action contesting foreclosures.
Miami attorney Richard J. Burton, who specializes in foreclosure litigation, says he expects that class-action lawsuits will be filed against GMAC and other servicers, furthering slowing the foreclosure process.
The turmoil in the market also could encourage more voluntary defaults, said Cameron Findlay, chief economist at LendingTree.com, because overwhelmed lenders may simply ignore newly delinquent homeowners.
Source: Bloomberg, Bob Ivry, Prashant Gopal and Jody Shenn (09/27/2010)
Source: INFORMATION, INC. Bethesda, MD
Tuesday, September 28, 2010
Reminder: FAR/BAR contract goes offline Friday
A reminder that three of Florida’s widely-used forms — the FAR/BAR Contract for Sale and Purchase (FAR/BAR-8), FAR/BAR As Is Contract for Sale and Purchase (ASIS-2x) and FAR/BAR Comprehensive Rider (FBCR-10) – will be removed from floridarealtors.org and from Florida Realtors’ forms vendors on Friday.
They have been replaced with updated versions developed by Florida Realtors and the Florida Bar. Enhancements to the Florida Realtors/Florida Bar Residential Contract for Sale and Purchase, “As Is” Residential Contract for Sale and Purchase, and Comprehensive Riders to the Residential Contract for Sale and Purchase include: larger print; the addition of blanks for buyers and sellers initials at the bottom of each page, and a limited hold harmless and indemnity clause for brokers and agents. Additionally, there are several new riders sought by Realtors: an appraisal contingency, an agreement to arbitrate disputes and a short sale rider.
Florida Realtors attorneys discourage members from using the old forms after Sept. 30, as the forms will not be updated to reflect changes in the law or practice. However, if a transaction is initiated before Sept. 30 with the old forms, continue using the old forms for counteroffers and addendums unless the buyer and seller agree to use the new forms.
As always, if you have questions, please contact the Florida Realtors Legal Hotline at .
• Florida Realtors/Florida Bar Residential Contract for Sale and Purchase (Florida Realtors/Florida Bar-1) (PDF) (Login required).
More info: Summary of new provisions (PDF)
“As Is” Residential Contract for Sale and Purchase (ASIS-1) (PDF) (Login required).
More info: Summary of new provisions (PDF)
Comprehensive Rider to the Residential Contract for Sale and Purchase (CR-1) (PDF).
Summary of new provisions (PDF)
More info: Differences between ASIS-1 and Florida Realtors/Florida Bar-1 (PDF)
Source: Florida Realtors
They have been replaced with updated versions developed by Florida Realtors and the Florida Bar. Enhancements to the Florida Realtors/Florida Bar Residential Contract for Sale and Purchase, “As Is” Residential Contract for Sale and Purchase, and Comprehensive Riders to the Residential Contract for Sale and Purchase include: larger print; the addition of blanks for buyers and sellers initials at the bottom of each page, and a limited hold harmless and indemnity clause for brokers and agents. Additionally, there are several new riders sought by Realtors: an appraisal contingency, an agreement to arbitrate disputes and a short sale rider.
Florida Realtors attorneys discourage members from using the old forms after Sept. 30, as the forms will not be updated to reflect changes in the law or practice. However, if a transaction is initiated before Sept. 30 with the old forms, continue using the old forms for counteroffers and addendums unless the buyer and seller agree to use the new forms.
As always, if you have questions, please contact the Florida Realtors Legal Hotline at .
• Florida Realtors/Florida Bar Residential Contract for Sale and Purchase (Florida Realtors/Florida Bar-1) (PDF) (Login required).
More info: Summary of new provisions (PDF)
“As Is” Residential Contract for Sale and Purchase (ASIS-1) (PDF) (Login required).
More info: Summary of new provisions (PDF)
Comprehensive Rider to the Residential Contract for Sale and Purchase (CR-1) (PDF).
Summary of new provisions (PDF)
More info: Differences between ASIS-1 and Florida Realtors/Florida Bar-1 (PDF)
Source: Florida Realtors
Benefit of higher credit score dwindles at top end
Have you been working to boost your credit score before trying to get a mortgage? It may not yield the payback you expect.
The mortgage loan interest rates offered to borrowers with stellar FICO scores aren’t much lower than the rates offered to those with a middle-of-the-road 720 score these days.
That means that efforts to drive up a credit score to lofty heights aren’t likely to produce substantial savings over the life of the loan.
The real savings comes from getting your score to that magic line of 720.
An analysis of interest rate quotes made through real estate website Zillow.com during the first half of September found that prospective borrowers with FICO scores of 620 or below aren’t likely to get any mortgage offers. “These lenders are really not looking at people under 620 at all,” said Stan Humphries, chief economist for Zillow.
That means well over a quarter of U.S. adults have little or no access to mortgage loans right now, based on the most recent distribution of scores provided by FICO. That’s because credit remains tight and banks, which have written off billions in bad loans in the past three years, are trying to keep their risks low, so they’re bypassing the diciest borrowers. “As the housing market continues to improve over the next five years, then this situation will also change,” Humphries predicted.
For potential borrowers with scores between 620 and 720 - roughly another quarter of U.S. adults - the lowest annual interest rate offered by lenders through Zillow.com shows the impact a few credit score points can have.
• For scores between 620 and 639, the best average annual percentage rate offered was 4.9 percent.
• For scores between 640 and 659, the rate was 4.73 percent.
• For scores between 660 and 679, the rate was 4.6 percent.
• For scores between 680 and 699, the rate was 4.56 percent.
• For scores between 700 and 719, the rate was 4.44 percent.
• For scores of 720 and above, the rate was 4.3 percent.
That means that for each 20-point score increase, the average rate dropped 0.12 percent. On a $300,000 home with a 20-percent down payment, a 0.12 percent decline equals about $6,400 saved over the course of a 30-year mortgage, according to Zillow. The company looked at 25,000 loan requests and the quotes they garnered from its pool of 1,000 lenders to come up with its data.
“If you’re between 620 and 720, you should be killing yourself to get every point you can,” Humphries said.
But if you’re already at 720, the benefits start to dwindle as you improve your score further. There are still incremental rate reductions for borrowers in the higher range, but they won’t see the same level of drop-off that improvements lower on the scale can produce.
Part of the reason for so little change for the top borrowers is that interest rates are so low overall. “There’s not that much room right now between the rates,” noted Diane Winland, a financial planner with Financial Finesse, based in Manhattan Beach, Calif.
Another potential factor is that consumers with “perfect” credit scores tend to be less profitable for banks than consumers with a few dings on their histories, who pay higher rates and often penalties like late fees.
Consumers with great scores by and large avoid credit, explained John Ulzheimer, president of consumer education for the website Credit.com. “They have credit, they have had credit for a very long time, but they’re definitely a small-time user of credit. Which means that they’re not very profitable.”
The current situation means that potential mortgage applicants need to carefully evaluate their current standing and their goals before taking any steps.
Someone with a low credit score should work to improve his or her credit report before applying. “There’s lots of things people can do in a short period of time to go up 10 points,” said Todd Marks, vice president of education at the Consumer Credit Counseling Service of Greater Dallas.
But someone who already has a relatively high score may not benefit enough from an improved score to make delaying a home purchase worthwhile. “I always tell people, don’t get greedy,” Ulzheimer said. A rate in the low 4-percent range is still very good by historic standards, he noted. “In the grand scheme of things, it does not pay to wait.”
Source: The Associated Press, Eileen AJ Connelly, AP personal finance writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
The mortgage loan interest rates offered to borrowers with stellar FICO scores aren’t much lower than the rates offered to those with a middle-of-the-road 720 score these days.
That means that efforts to drive up a credit score to lofty heights aren’t likely to produce substantial savings over the life of the loan.
The real savings comes from getting your score to that magic line of 720.
An analysis of interest rate quotes made through real estate website Zillow.com during the first half of September found that prospective borrowers with FICO scores of 620 or below aren’t likely to get any mortgage offers. “These lenders are really not looking at people under 620 at all,” said Stan Humphries, chief economist for Zillow.
That means well over a quarter of U.S. adults have little or no access to mortgage loans right now, based on the most recent distribution of scores provided by FICO. That’s because credit remains tight and banks, which have written off billions in bad loans in the past three years, are trying to keep their risks low, so they’re bypassing the diciest borrowers. “As the housing market continues to improve over the next five years, then this situation will also change,” Humphries predicted.
For potential borrowers with scores between 620 and 720 - roughly another quarter of U.S. adults - the lowest annual interest rate offered by lenders through Zillow.com shows the impact a few credit score points can have.
• For scores between 620 and 639, the best average annual percentage rate offered was 4.9 percent.
• For scores between 640 and 659, the rate was 4.73 percent.
• For scores between 660 and 679, the rate was 4.6 percent.
• For scores between 680 and 699, the rate was 4.56 percent.
• For scores between 700 and 719, the rate was 4.44 percent.
• For scores of 720 and above, the rate was 4.3 percent.
That means that for each 20-point score increase, the average rate dropped 0.12 percent. On a $300,000 home with a 20-percent down payment, a 0.12 percent decline equals about $6,400 saved over the course of a 30-year mortgage, according to Zillow. The company looked at 25,000 loan requests and the quotes they garnered from its pool of 1,000 lenders to come up with its data.
“If you’re between 620 and 720, you should be killing yourself to get every point you can,” Humphries said.
But if you’re already at 720, the benefits start to dwindle as you improve your score further. There are still incremental rate reductions for borrowers in the higher range, but they won’t see the same level of drop-off that improvements lower on the scale can produce.
Part of the reason for so little change for the top borrowers is that interest rates are so low overall. “There’s not that much room right now between the rates,” noted Diane Winland, a financial planner with Financial Finesse, based in Manhattan Beach, Calif.
Another potential factor is that consumers with “perfect” credit scores tend to be less profitable for banks than consumers with a few dings on their histories, who pay higher rates and often penalties like late fees.
Consumers with great scores by and large avoid credit, explained John Ulzheimer, president of consumer education for the website Credit.com. “They have credit, they have had credit for a very long time, but they’re definitely a small-time user of credit. Which means that they’re not very profitable.”
The current situation means that potential mortgage applicants need to carefully evaluate their current standing and their goals before taking any steps.
Someone with a low credit score should work to improve his or her credit report before applying. “There’s lots of things people can do in a short period of time to go up 10 points,” said Todd Marks, vice president of education at the Consumer Credit Counseling Service of Greater Dallas.
But someone who already has a relatively high score may not benefit enough from an improved score to make delaying a home purchase worthwhile. “I always tell people, don’t get greedy,” Ulzheimer said. A rate in the low 4-percent range is still very good by historic standards, he noted. “In the grand scheme of things, it does not pay to wait.”
Source: The Associated Press, Eileen AJ Connelly, AP personal finance writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
5 Steps to Owning a Home Again After Foreclosure
Foreclosure is just a one-time event--with discipline and perseverance, you can get a mortgage and become a homeowner again.
It won't be easy to obtain a mortgage after foreclosure. But with enough time, discipline, and desire, you can own your own home again. Here's what you need to do:
1. Stick with a job after foreclosure
Did you fall into foreclosure because of the lack of a steady job? If you did, the first step toward homeownership after foreclosure is finding and holding one. And if you already have one--stick with it, unless you can move to a better one. Note that potential lenders will require stable employment before they'll give you a new mortgage loan after a foreclosure. Even if it means taking a lower-paying job, it's worth it.
2. Rebuild your nest egg after foreclosure
Establish a safety net. Financial planners generally recommend three to six months of living expenses in a liquid account, but since you're coming out of foreclosure, six is a minimum to show stability and that you're able to pay your bills--including your mortgage--for an extended period if you lose your job.
3. Raise your credit score after foreclosure
This is the hardest and most time-consuming part. After foreclosure, your credit score, according to myFICO (http://www.myfico.com/Default.aspx), probably dropped by about 150 points. You'll need to raise it back up with perseverance.
Pay bills on time and keep your credit card balances below maximum levels. The foreclosure will stay on your credit report for seven years, but if you prove your money management skills have matured, it will become less of a red mark as years go by.
Tip: Consult a housing counselor. The U.S. Department of Housing and Urban Development (http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm) offers free housing counseling for distressed homeowners with a foreclosure in their past. A counselor can help you with money management and budgeting. Counseling works--an evaluation of a program in Indianapolis discovered that credit scores greatly improved because of education and counseling, and increased average borrowing power by $4,500 per family.
4. Reduce your waiting time for a mortgage after foreclosure
Normally, you would have to wait three years after foreclosure before you can apply for a new mortgage under Fannie Mae (http://www.houselogic.com/articles/how-fannie-mae-and-freddie-mac-save-you-money/) rules.
However, you might wait only two years if you can show extenuating circumstances for your foreclosure, which are defined as "events that are beyond the borrower's control that result in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations." These include:
•Losing a job
•Getting divorced
•Having unexpected medical expenses
There's one last alternative if waiting isn't your thing--you can obtain seller financing, essentially bypassing the traditional mortgage. If both parties are amenable, you can enter into a lease with an option to buy, or take a mortgage directly from the seller. You'll most likely have to show some hefty reserve funds, but if you've turned around your financial situation quickly after your foreclosure, it's worth a shot to deal directly with the seller.
Keep in mind that sellers may be motivated to agree to this if they need to sell and the potential buyers they've met with can't obtain a conventional mortgage--perhaps because they've been through foreclosures, too.
5. Be honest about your foreclosure
When you're ready to apply for your new mortgage, don't try to hide your foreclosure. On the contrary, be proactive and reveal the steps you've taken to remedy the problems that led to your foreclosure.
Tip: Try a mortgage broker, who can work with a variety of lenders to find you a loan. When you work directly with a retail lender, like a bank, they have a limited pool of loans to offer you. But a good mortgage broker--one with a vast network of lendersóhas many options, and may be able to find a mortgage solution if the foreclosure in your past is creating challenges in obtaining one.
If you stay disciplined and positive, the American dream--obtaining a mortgage and owning a home of your own--can, indeed, be yours again. Even after foreclosure.
Barbara Eisner Bayer has written about mortgages and personal finance for the past 16 years for the Motley Fool, the Daily Plan-It, and Nursevillage.com, and has been the Managing Editor for CompleteGrowth.com, Mortgageloan.com, and Credit-land.com. She's grateful that she now knows where to turn if she ever struggles to meet her mortgage payment.
Article From HouseLogic.com
It won't be easy to obtain a mortgage after foreclosure. But with enough time, discipline, and desire, you can own your own home again. Here's what you need to do:
1. Stick with a job after foreclosure
Did you fall into foreclosure because of the lack of a steady job? If you did, the first step toward homeownership after foreclosure is finding and holding one. And if you already have one--stick with it, unless you can move to a better one. Note that potential lenders will require stable employment before they'll give you a new mortgage loan after a foreclosure. Even if it means taking a lower-paying job, it's worth it.
2. Rebuild your nest egg after foreclosure
Establish a safety net. Financial planners generally recommend three to six months of living expenses in a liquid account, but since you're coming out of foreclosure, six is a minimum to show stability and that you're able to pay your bills--including your mortgage--for an extended period if you lose your job.
3. Raise your credit score after foreclosure
This is the hardest and most time-consuming part. After foreclosure, your credit score, according to myFICO (http://www.myfico.com/Default.aspx), probably dropped by about 150 points. You'll need to raise it back up with perseverance.
Pay bills on time and keep your credit card balances below maximum levels. The foreclosure will stay on your credit report for seven years, but if you prove your money management skills have matured, it will become less of a red mark as years go by.
Tip: Consult a housing counselor. The U.S. Department of Housing and Urban Development (http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm) offers free housing counseling for distressed homeowners with a foreclosure in their past. A counselor can help you with money management and budgeting. Counseling works--an evaluation of a program in Indianapolis discovered that credit scores greatly improved because of education and counseling, and increased average borrowing power by $4,500 per family.
4. Reduce your waiting time for a mortgage after foreclosure
Normally, you would have to wait three years after foreclosure before you can apply for a new mortgage under Fannie Mae (http://www.houselogic.com/articles/how-fannie-mae-and-freddie-mac-save-you-money/) rules.
However, you might wait only two years if you can show extenuating circumstances for your foreclosure, which are defined as "events that are beyond the borrower's control that result in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations." These include:
•Losing a job
•Getting divorced
•Having unexpected medical expenses
There's one last alternative if waiting isn't your thing--you can obtain seller financing, essentially bypassing the traditional mortgage. If both parties are amenable, you can enter into a lease with an option to buy, or take a mortgage directly from the seller. You'll most likely have to show some hefty reserve funds, but if you've turned around your financial situation quickly after your foreclosure, it's worth a shot to deal directly with the seller.
Keep in mind that sellers may be motivated to agree to this if they need to sell and the potential buyers they've met with can't obtain a conventional mortgage--perhaps because they've been through foreclosures, too.
5. Be honest about your foreclosure
When you're ready to apply for your new mortgage, don't try to hide your foreclosure. On the contrary, be proactive and reveal the steps you've taken to remedy the problems that led to your foreclosure.
Tip: Try a mortgage broker, who can work with a variety of lenders to find you a loan. When you work directly with a retail lender, like a bank, they have a limited pool of loans to offer you. But a good mortgage broker--one with a vast network of lendersóhas many options, and may be able to find a mortgage solution if the foreclosure in your past is creating challenges in obtaining one.
If you stay disciplined and positive, the American dream--obtaining a mortgage and owning a home of your own--can, indeed, be yours again. Even after foreclosure.
Barbara Eisner Bayer has written about mortgages and personal finance for the past 16 years for the Motley Fool, the Daily Plan-It, and Nursevillage.com, and has been the Managing Editor for CompleteGrowth.com, Mortgageloan.com, and Credit-land.com. She's grateful that she now knows where to turn if she ever struggles to meet her mortgage payment.
Article From HouseLogic.com
GSEs eye standards shift for appraisals
Recently enacted Wall St. reforms require the Federal Housing Finance Agency, the regulator of Fannie Mae and Freddie Mac, to come up with appraisal standards to replace the Home Valuation Code of Conduct (HVCC) by Oct. 21.
The law retains the basic intent of HVCC, which is for lenders to keep an arm’s length distance between them and the appraiser, and it continues to allow appraisal decisions to be left in the hands of appraisal management companies, if lenders so choose.
But it attempts to prevent abuses by, among other things, blocking AMCs from negotiating fees with appraisers. Lenders and AMCs must pay appraisers at the market rate.
Source: American Banker, Brian Collins (09/22/10).
Source: INFORMATION, INC. Bethesda, MD
The law retains the basic intent of HVCC, which is for lenders to keep an arm’s length distance between them and the appraiser, and it continues to allow appraisal decisions to be left in the hands of appraisal management companies, if lenders so choose.
But it attempts to prevent abuses by, among other things, blocking AMCs from negotiating fees with appraisers. Lenders and AMCs must pay appraisers at the market rate.
Source: American Banker, Brian Collins (09/22/10).
Source: INFORMATION, INC. Bethesda, MD
Analysis: One-Third of Americans Highly Unlikely to Qualify for a Mortgage Today
Nearly one-third of Americans are unlikely to qualify for a mortgage because their credit scores are too low, making homeownership out of reach for many. This is according to an analysis of more than 25,000 loan quotes and purchase requests on Zillow Mortgage Marketplace during the first half of September.
Borrowers with credit scores under 620 who requested purchase loan quotes for 30-year fixed, conventional loans were unlikely to receive even one loan quote on Zillow Mortgage Marketplace, even if they offered a relatively high down payment of 15 to 25 percent. Nearly one-third of Americans, or 29.3 percent, has a credit score this low, according to data provided by myFICO.com.
Meanwhile, the lowest interest rates went to mortgage borrowers who were among the 47 percent of Americans with excellent credit scores of 720 or above.
In the first half of September, borrowers with credit scores of 720 or above got an average low annual percentage rate (APR) of 4.3 percent for conventional 30-year fixed mortgages. Borrowers with mid-range credit scores between 620 and 719 received APRs between 4.73 and 4.44 percent, with the APR rising as credit score drops. Those with credit scores below 620 received too few loan quotes to calculate average low APR.
For those with mid-range credit scores of 620 to 719, improving one's credit score can mean a significant savings in interest over time. For each 20-point credit score increase, the average low APR declines 0.12 percent, which for a $300,000 home, with a 20 percent down payment, equates to a savings of $6,400 over the life of a 30-year loan.
"We are in an era of historically low mortgage rates, reaching levels not seen in decades. Coupled with four years of home value declines, homes are more affordable than we've seen for years. But the irony here is that so many Americans can't qualify for these low rates, or can't qualify for a mortgage at all," said Zillow Chief Economist Dr. Stan Humphries. "Four years ago, in the era of easy-to-get subprime loans, many borrowers with low scores did buy homes, which in turn helped contribute to a housing bubble. Today's tighter credit is a predictable response by banks after the foreclosure crisis, but also keeps a cap on housing demand, which is important for the greater housing market recovery."
Source: RISMedia.com
Borrowers with credit scores under 620 who requested purchase loan quotes for 30-year fixed, conventional loans were unlikely to receive even one loan quote on Zillow Mortgage Marketplace, even if they offered a relatively high down payment of 15 to 25 percent. Nearly one-third of Americans, or 29.3 percent, has a credit score this low, according to data provided by myFICO.com.
Meanwhile, the lowest interest rates went to mortgage borrowers who were among the 47 percent of Americans with excellent credit scores of 720 or above.
In the first half of September, borrowers with credit scores of 720 or above got an average low annual percentage rate (APR) of 4.3 percent for conventional 30-year fixed mortgages. Borrowers with mid-range credit scores between 620 and 719 received APRs between 4.73 and 4.44 percent, with the APR rising as credit score drops. Those with credit scores below 620 received too few loan quotes to calculate average low APR.
For those with mid-range credit scores of 620 to 719, improving one's credit score can mean a significant savings in interest over time. For each 20-point credit score increase, the average low APR declines 0.12 percent, which for a $300,000 home, with a 20 percent down payment, equates to a savings of $6,400 over the life of a 30-year loan.
"We are in an era of historically low mortgage rates, reaching levels not seen in decades. Coupled with four years of home value declines, homes are more affordable than we've seen for years. But the irony here is that so many Americans can't qualify for these low rates, or can't qualify for a mortgage at all," said Zillow Chief Economist Dr. Stan Humphries. "Four years ago, in the era of easy-to-get subprime loans, many borrowers with low scores did buy homes, which in turn helped contribute to a housing bubble. Today's tighter credit is a predictable response by banks after the foreclosure crisis, but also keeps a cap on housing demand, which is important for the greater housing market recovery."
Source: RISMedia.com
Monday, September 27, 2010
Social networking is key to connecting
Today’s average homebuyer is younger than the average Realtor, because most of the people who left the real estate business after the housing bust were the younger, less established agents, according to author Stefan Swanepoel.
When it comes to using technology, every agent should “act like you’re a 19-year-old,” he said.
Real estate agents who want to connect with buyers must be comfortable using technology and social media, Swanepoel told a gathering of Rhode Island Realtors Tuesday.
Swanepoel, an author, businessman and public speaker who researches trends in real estate, was the keynote speaker at a meeting of the Rhode Island Association of Realtors, called the Rhode to Recovery summit, held at Rhodes on the Pawtuxet.
More than 460 Realtors attended Tuesday’s summit, according to the association.
“We are only at the very early stages of social media,” Swanepoel said.
The Internet is rapidly changing marketing strategies in almost every business because the “millennial” generation, which has grown up using technology, turns to the Internet first for almost every transaction in life, he said.
The Internet now shapes “the way you buy a book, buy a car, choose your president,” he said. There’s no question it also “affects the way you buy a house.”
Swanepoel said research suggests that while buyers still rate trustworthiness highly when choosing a real estate agent, they also want agents who understand the mortgage process, are skilled negotiators and can deal with issues related to distressed properties.
Swanepoel said younger buyers are also used to getting information instantly online, and they expect almost instant responses to their emails and telephone calls to real estate agents.
Agents who want to turn leads into sales need to make sure they return telephone calls or answer emails within 15 minutes – even if it’s just to say that they are tied up but will be available later in the day, he said.
“The question is not, ‘do you have a Facebook page?’ Of course you do,” Swanepoel said. Reaching as many of Facebook’s 500 million users as possible is the goal, he said.
Another speaker, Matt Phipps, of Phipps Realty, of Warwick, also spoke on the importance of social media.
Phipps is the son of Ron Phipps, president-elect of the National Association of Realtors; his grandmother founded their small family real-estate brokerage 35 years ago.
Phipps said that by joining Facebook, he has reconnected with dozens of people he knew years ago, from elementary school through college, and many of these connections have led to requests for his advice and help with real estate purchases.
Phipps said it is unlikely that any of these people would have tracked him down and left a voice-mail message on his telephone, but Facebook makes it easy to connect.
He said he often posts links to real estate articles and studies that highlight the positive aspects of home ownership and the real estate business on his Facebook page.
This practice not only helps to inform his friends and clients, but it can counteract the less happy news about real estate often reported by journalists, he said.
Other speakers offered peeks at upcoming improvements in the Statewide Multiple Listing Service computer system and in the National Association of Realtors’ website for Realtors.
An online appointment scheduling service, AccuShow, is coming to Rhode Island before the end of the year, and it will make it easier for agents to request, confirm and change appointments to show properties listed for sale.
Rhode Island’s MLS will be upgraded in the first quarter of 2011, and it will become browser neutral. Later in the year, Core Logic will introduce more layers of information on the property listing system.
Online statistics and demographics will show Realtors how prices have changed in a particular neighborhood over time, and the listing service will begin providing information about other businesses and services near a particular property. The mapping improvements will also show Census Bureau demographic information, school information, crime statistics, tax data and even foreclosure rates.
Source: The Providence Journal, Christine Dunn, via ProQuest Information and Learning Company. All rights reserved.
When it comes to using technology, every agent should “act like you’re a 19-year-old,” he said.
Real estate agents who want to connect with buyers must be comfortable using technology and social media, Swanepoel told a gathering of Rhode Island Realtors Tuesday.
Swanepoel, an author, businessman and public speaker who researches trends in real estate, was the keynote speaker at a meeting of the Rhode Island Association of Realtors, called the Rhode to Recovery summit, held at Rhodes on the Pawtuxet.
More than 460 Realtors attended Tuesday’s summit, according to the association.
“We are only at the very early stages of social media,” Swanepoel said.
The Internet is rapidly changing marketing strategies in almost every business because the “millennial” generation, which has grown up using technology, turns to the Internet first for almost every transaction in life, he said.
The Internet now shapes “the way you buy a book, buy a car, choose your president,” he said. There’s no question it also “affects the way you buy a house.”
Swanepoel said research suggests that while buyers still rate trustworthiness highly when choosing a real estate agent, they also want agents who understand the mortgage process, are skilled negotiators and can deal with issues related to distressed properties.
Swanepoel said younger buyers are also used to getting information instantly online, and they expect almost instant responses to their emails and telephone calls to real estate agents.
Agents who want to turn leads into sales need to make sure they return telephone calls or answer emails within 15 minutes – even if it’s just to say that they are tied up but will be available later in the day, he said.
“The question is not, ‘do you have a Facebook page?’ Of course you do,” Swanepoel said. Reaching as many of Facebook’s 500 million users as possible is the goal, he said.
Another speaker, Matt Phipps, of Phipps Realty, of Warwick, also spoke on the importance of social media.
Phipps is the son of Ron Phipps, president-elect of the National Association of Realtors; his grandmother founded their small family real-estate brokerage 35 years ago.
Phipps said that by joining Facebook, he has reconnected with dozens of people he knew years ago, from elementary school through college, and many of these connections have led to requests for his advice and help with real estate purchases.
Phipps said it is unlikely that any of these people would have tracked him down and left a voice-mail message on his telephone, but Facebook makes it easy to connect.
He said he often posts links to real estate articles and studies that highlight the positive aspects of home ownership and the real estate business on his Facebook page.
This practice not only helps to inform his friends and clients, but it can counteract the less happy news about real estate often reported by journalists, he said.
Other speakers offered peeks at upcoming improvements in the Statewide Multiple Listing Service computer system and in the National Association of Realtors’ website for Realtors.
An online appointment scheduling service, AccuShow, is coming to Rhode Island before the end of the year, and it will make it easier for agents to request, confirm and change appointments to show properties listed for sale.
Rhode Island’s MLS will be upgraded in the first quarter of 2011, and it will become browser neutral. Later in the year, Core Logic will introduce more layers of information on the property listing system.
Online statistics and demographics will show Realtors how prices have changed in a particular neighborhood over time, and the listing service will begin providing information about other businesses and services near a particular property. The mapping improvements will also show Census Bureau demographic information, school information, crime statistics, tax data and even foreclosure rates.
Source: The Providence Journal, Christine Dunn, via ProQuest Information and Learning Company. All rights reserved.
Higher conforming loan limits due to expire
Unless Congress intervenes, the maximum loan amount the Federal Housing Administration will back, as well as loans backed by Fannie Mae and Freddie Mac, will return to $417,000 in most areas and $625,500 in high-cost areas. The higher loan limits are due to expire Dec. 31, 2010.
Over the last two years, the government raised the limits in some high-cost areas to $729,750.
If Congress doesn’t extend higher limits, home prices would “drop precipitously” because it would be “impossible to finance homes in most parts of Los Angeles and certain other major cities,” said Rep. Brad Sherman, a California Democrat and member of the House Financial Services Committee.
But many economists support the end to higher limits. “We need to think how we are going to exit from a Fannie-and-Freddie world, and this is a very small step toward that exit,” said Richard K. Green, director of the University of Southern California’s Lusk Center for Real Estate. “Dialing it back to $625,500 is a perfectly reasonable thing to do.”
Source: The Wall Street Journal, Nick Timiraos (09/23/2010)
Source: INFORMATION, INC. Bethesda, MD
Over the last two years, the government raised the limits in some high-cost areas to $729,750.
If Congress doesn’t extend higher limits, home prices would “drop precipitously” because it would be “impossible to finance homes in most parts of Los Angeles and certain other major cities,” said Rep. Brad Sherman, a California Democrat and member of the House Financial Services Committee.
But many economists support the end to higher limits. “We need to think how we are going to exit from a Fannie-and-Freddie world, and this is a very small step toward that exit,” said Richard K. Green, director of the University of Southern California’s Lusk Center for Real Estate. “Dialing it back to $625,500 is a perfectly reasonable thing to do.”
Source: The Wall Street Journal, Nick Timiraos (09/23/2010)
Source: INFORMATION, INC. Bethesda, MD
Lawmakers question Fannie on 'foreclosure mills'
A trio of congressional Democrats is demanding to know why government-backed mortgage giant Fannie Mae has entrusted many of its foreclosure cases to Florida law firms that stand accused of fabricating or backdating numerous court documents.
These so-called “foreclosure mills,” essentially law firms that specialize in representing lenders while churning out foreclosure suits quickly and efficiently, are under investigation by the Florida attorney general and are running into legal challenges in other parts of the country.
According to the letter from three House Democrats – Financial Services Committee Chairman Barney Frank of Massachusetts and Corrine Brown and Alan Grayson of Florida – several firms facing scrutiny represent Fannie Mae both in foreclosure suits and in the company’s pre-filing mediation program, which is designed to help borrowers and lenders talk through possible alternatives to foreclosure.
“In other words, Fannie Mae seems to specifically delegate its foreclosure avoidance obligations out to lawyers who specialize in kicking people out of their homes,” the group wrote Friday in a letter to the company’s chief executive.” The legal pressure to foreclose at all costs is leading to a situation where servicers are foreclosing on properties on which they do not even own the note,” they added. “This practice is blessed by a legal system overwhelmed with foreclosure cases and unable to sort out murky legal details, and a set of law firms who mass produce filings to move foreclosures as quickly as possible.”
The lawmakers urged Fannie Mae to remove any “foreclosure mills” under investigation for document fraud from its attorney network. In addition, they argued that the mortgage giant should put in place guidelines that allow foreclosures to proceed only when the legal right to do so is clearly documented.
“Why is Fannie Mae using lawyers that are accused of regularly engaging in fraud to kick people out of their homes?” the group wrote. “Given that Fannie Mae is at this point a government entity, and it is the policy of the government that foreclosures are a costly situation best avoided if there are any lower cost alternatives, what steps is Fannie Mae taking to avoid the use of foreclosure mills?”
In addition to the investigation in Florida, other states such as Iowa and Texas have begun their own inquiries. Those actions come as Ally Financial this week temporarily halted evictions on foreclosed homes in 23 states amid questions about whether a prolific document signer had verified the accuracy of court documents.
Asked about the congressional letter, a spokeswoman for Fannie Mae said Friday that “we have received the letter and will respond to the questions raised.”
Source: washingtonpost.com Staff writer Ariana Eunjung Cha contributed to this report.
These so-called “foreclosure mills,” essentially law firms that specialize in representing lenders while churning out foreclosure suits quickly and efficiently, are under investigation by the Florida attorney general and are running into legal challenges in other parts of the country.
According to the letter from three House Democrats – Financial Services Committee Chairman Barney Frank of Massachusetts and Corrine Brown and Alan Grayson of Florida – several firms facing scrutiny represent Fannie Mae both in foreclosure suits and in the company’s pre-filing mediation program, which is designed to help borrowers and lenders talk through possible alternatives to foreclosure.
“In other words, Fannie Mae seems to specifically delegate its foreclosure avoidance obligations out to lawyers who specialize in kicking people out of their homes,” the group wrote Friday in a letter to the company’s chief executive.” The legal pressure to foreclose at all costs is leading to a situation where servicers are foreclosing on properties on which they do not even own the note,” they added. “This practice is blessed by a legal system overwhelmed with foreclosure cases and unable to sort out murky legal details, and a set of law firms who mass produce filings to move foreclosures as quickly as possible.”
The lawmakers urged Fannie Mae to remove any “foreclosure mills” under investigation for document fraud from its attorney network. In addition, they argued that the mortgage giant should put in place guidelines that allow foreclosures to proceed only when the legal right to do so is clearly documented.
“Why is Fannie Mae using lawyers that are accused of regularly engaging in fraud to kick people out of their homes?” the group wrote. “Given that Fannie Mae is at this point a government entity, and it is the policy of the government that foreclosures are a costly situation best avoided if there are any lower cost alternatives, what steps is Fannie Mae taking to avoid the use of foreclosure mills?”
In addition to the investigation in Florida, other states such as Iowa and Texas have begun their own inquiries. Those actions come as Ally Financial this week temporarily halted evictions on foreclosed homes in 23 states amid questions about whether a prolific document signer had verified the accuracy of court documents.
Asked about the congressional letter, a spokeswoman for Fannie Mae said Friday that “we have received the letter and will respond to the questions raised.”
Source: washingtonpost.com Staff writer Ariana Eunjung Cha contributed to this report.
Mistakes widespread on foreclosures, lawyers say
Paperwork mistakes that led one of the nation’s largest mortgage servicers to halt foreclosure evictions in 23 states last week have happened elsewhere and affect tens of thousands of foreclosures, say lawyers for homeowners.
Ally Financial’s GMAC Mortgage acted after manager Jeffrey Stephan gave a statement to opposing lawyers that he had signed off on legal documents for 10,000 foreclosure papers a month without following verification procedures. Those lawyers say they’ve obtained similar statements from employees at JPMorgan Chase and OneWest Bank – formerly IndyMac Federal Bank – that court papers weren’t properly verified before being filed.
“We’ve taken depositions at other servicing companies that take these documents without reviewing them,” says Christopher Immel, a lawyer at Ice Legal in West Palm Beach, Fla. “They were filing fraudulently. It’s rarely done correctly.”
In one case, Erica Johnson-Seck, a vice president at OneWest, said she signed 750 foreclosure documents a week and didn’t read each document before signing it, according to a 2009 deposition obtained by Ice Legal. She also said they were signed without a notary present.
In a May 17 deposition, also taken by Ice Legal, Beth Cottrell, a supervisor at Chase Home Finance, a division of JPMorgan Chase, said she was among eight managers who signed off on about 18,000 foreclosure papers a month.
Cottrell said she only reviewed the entire foreclosure document if another employee raised a question about it.
JPMorgan Chase declined to comment.
“How can a judge rely on something when the person who is signing it doesn’t even know what they’re signing?” says Ice Legal lawyer Dustin Zacks. “I find it very hard to believe it’s limited to the few depositions we’ve taken.”
In many states, servicers must file a motion in court to take possession of a home in a foreclosure. To support their motion, a representative has to verify they’ve reviewed the supporting documents, checked who owns the mortgage note and had a notary public witness their signature.
Ally Financial said Friday that delays in completing foreclosures should be resolved before year’s end. It also said it’s confident that processing errors did not result in any inappropriate foreclosures.
Fannie Mae and Freddie Mac are reviewing foreclosures on GMAC-serviced mortgages they own and have halted evictions on them until the review is done. Fannie Mae says it is also reminding servicers to follow proper procedures.
Source: USA TODAY, a division of Gannett Co. Inc., Stephanie Armour.
Ally Financial’s GMAC Mortgage acted after manager Jeffrey Stephan gave a statement to opposing lawyers that he had signed off on legal documents for 10,000 foreclosure papers a month without following verification procedures. Those lawyers say they’ve obtained similar statements from employees at JPMorgan Chase and OneWest Bank – formerly IndyMac Federal Bank – that court papers weren’t properly verified before being filed.
“We’ve taken depositions at other servicing companies that take these documents without reviewing them,” says Christopher Immel, a lawyer at Ice Legal in West Palm Beach, Fla. “They were filing fraudulently. It’s rarely done correctly.”
In one case, Erica Johnson-Seck, a vice president at OneWest, said she signed 750 foreclosure documents a week and didn’t read each document before signing it, according to a 2009 deposition obtained by Ice Legal. She also said they were signed without a notary present.
In a May 17 deposition, also taken by Ice Legal, Beth Cottrell, a supervisor at Chase Home Finance, a division of JPMorgan Chase, said she was among eight managers who signed off on about 18,000 foreclosure papers a month.
Cottrell said she only reviewed the entire foreclosure document if another employee raised a question about it.
JPMorgan Chase declined to comment.
“How can a judge rely on something when the person who is signing it doesn’t even know what they’re signing?” says Ice Legal lawyer Dustin Zacks. “I find it very hard to believe it’s limited to the few depositions we’ve taken.”
In many states, servicers must file a motion in court to take possession of a home in a foreclosure. To support their motion, a representative has to verify they’ve reviewed the supporting documents, checked who owns the mortgage note and had a notary public witness their signature.
Ally Financial said Friday that delays in completing foreclosures should be resolved before year’s end. It also said it’s confident that processing errors did not result in any inappropriate foreclosures.
Fannie Mae and Freddie Mac are reviewing foreclosures on GMAC-serviced mortgages they own and have halted evictions on them until the review is done. Fannie Mae says it is also reminding servicers to follow proper procedures.
Source: USA TODAY, a division of Gannett Co. Inc., Stephanie Armour.
Saturday, September 25, 2010
Fannie Mae offers new closing incentive
Fannie Mae today announced a new seller-assistance incentive for Fannie Mae-owned properties that are listed on the company’s REO website, http://www.homepath.com/ – and it offers an incentive to real estate agents and brokers.
Agents representing owner-occupants will receive a $1,500 bonus, while homebuyers who will live in the house can receive up to 3.5 percent of the final sales price that can be used toward closing costs, including a home warranty.
Eligible offers must be submitted on or after Sept. 23, 2010, and must close by Dec. 31, 2010. The sale must also close within 60 days of offer acceptance.
“More than 87,000 families purchased HomePath properties in the first half of 2010 – nearly double the number of Fannie Mae foreclosed properties sold in the first half of 2009,” says Terry Edwards, executive vice president of Fannie Mae’s Credit Portfolio Management. “We continue to look for ways to stabilize neighborhoods and offer incentives to qualified buyers.”
Source: Florida Realtors®
Agents representing owner-occupants will receive a $1,500 bonus, while homebuyers who will live in the house can receive up to 3.5 percent of the final sales price that can be used toward closing costs, including a home warranty.
Eligible offers must be submitted on or after Sept. 23, 2010, and must close by Dec. 31, 2010. The sale must also close within 60 days of offer acceptance.
“More than 87,000 families purchased HomePath properties in the first half of 2010 – nearly double the number of Fannie Mae foreclosed properties sold in the first half of 2009,” says Terry Edwards, executive vice president of Fannie Mae’s Credit Portfolio Management. “We continue to look for ways to stabilize neighborhoods and offer incentives to qualified buyers.”
Source: Florida Realtors®
Flood insurance extended – probably
The U.S. House passed a Senate bill last night that extends the National Flood Insurance Program (NFIP) for one year past its current expiration date, Sept. 30. The bill still needs President Obama’s signature to become law, but that’s expected.
When NFIP shuts down, current homeowners cannot renew a policy and homebuyers cannot secure a policy, which can postpone closings of flood-zone homes that require a mortgage. NFIP has already shut down eight times in the past two years as Congressional leaders wrangled over the terms of an extension.
A current House bill would have extended the program for five years. However, the House agreed with the Senate version, in part to avoid another shutdown at the end of this month.
A move to add windstorm coverage onto the bill failed, so hurricane coverage will not soon be part of any national program. Other contentious issues also led to the repeated delays in long-term approval recently, such as disagreements over increased coverage limits, and charging policyholders a rate that commensurate with their property’s risk of flooding.
Source: Florida Realtors®
When NFIP shuts down, current homeowners cannot renew a policy and homebuyers cannot secure a policy, which can postpone closings of flood-zone homes that require a mortgage. NFIP has already shut down eight times in the past two years as Congressional leaders wrangled over the terms of an extension.
A current House bill would have extended the program for five years. However, the House agreed with the Senate version, in part to avoid another shutdown at the end of this month.
A move to add windstorm coverage onto the bill failed, so hurricane coverage will not soon be part of any national program. Other contentious issues also led to the repeated delays in long-term approval recently, such as disagreements over increased coverage limits, and charging policyholders a rate that commensurate with their property’s risk of flooding.
Source: Florida Realtors®
Citizens’ insurance rates to rise again
Most Citizens Property Insurance customers’ rates will increase by an average 10 percent next year.
The Office of Insurance Regulation on Thursday approved an average 10.3 percent statewide rate hike for Citizens’ more than 800,000 homeowner policies and an average 9 percent statewide increase for mobile home policies. The increases in both categories were higher than Citizens requested.
Increases for individual policyholders may be lower or slightly higher than the statewide average.
The increase comes after state-backed Citizens, the largest property insurer in the state with 1.2 million policies, raised rates this year, including an average 12 percent in coastal parts of Broward and Palm Beach counties.
State lawmakers lifted Citizens’ three-year rate freeze last year but capped increases at 10 percent, not including certain costs for back-up coverage.
Florida has not been directly hit by a hurricane in four years but Insurance Commissioner Kevin McCarty approved dozens of rate hikes since early last year because he said many companies reported premiums aren’t keeping pace with costs due to a rise in sinkhole claims and other claims not related to hurricanes.
Citizens reports a similar experience: It earned $19.6 million in premiums in 2009 for sinkholes but spent $97 million for claims and other expenses related to sinkholes.
McCarty’s office is collecting data on sinkholes from private insurers as well to assess the scope of the problem.
As part of the decision on Citizens, McCarty said homeowners who want sinkhole coverage will be required to get an inspection to prove they qualify for it. Citizens will submit specifics on the new process by the end of the year.
Citizens officials have said insurance rates for homeowners in some of parts of the South Florida and Orlando areas should be much higher than what is proposed, more than double what current rates are in some cases.
This week, Rick Scott, Republican candidate for governor, called for raising Citizens’ premiums by more than 10 percent. His main opponent, Democrat Alex Sink, is opposed.
Regulators questioned Citizens this month about its proposed rates, including why it asked for a “profit and contingency factor” seven times greater than private insurers. The contingency part covers, in part, emergencies and unexpected events.
Paul Palumbo, a senior vice president of Citizens, said the public insurer has had a hard time predicting losses and expenses based on past experience so the contingency factor can help.
Next month, regulators are expected to decide rates for Citizens’ policies covering rented or vacation homes and policies covering condo and homeowner associations.
Regulators approved rate increases as high as 18 percent in some areas such as non-coastal parts of Miami-Dade County, according to a state breakdown of average approved rates, excluding the cost of catastrophic coverage, for more than 100 different regions in Florida.
Excluding coverage for sinkholes and hurricanes, the average rates for home and condominium unit owners in some parts of Broward and Palm Beach counties will drop by 1 percent to 17 percent, according to the OIR report. Individual policyholders’ premiums can vary.
Source: Sun Sentinel, Fort Lauderdale, Fla., Julie Patel. Distributed by McClatchy-Tribune Information Services.
The Office of Insurance Regulation on Thursday approved an average 10.3 percent statewide rate hike for Citizens’ more than 800,000 homeowner policies and an average 9 percent statewide increase for mobile home policies. The increases in both categories were higher than Citizens requested.
Increases for individual policyholders may be lower or slightly higher than the statewide average.
The increase comes after state-backed Citizens, the largest property insurer in the state with 1.2 million policies, raised rates this year, including an average 12 percent in coastal parts of Broward and Palm Beach counties.
State lawmakers lifted Citizens’ three-year rate freeze last year but capped increases at 10 percent, not including certain costs for back-up coverage.
Florida has not been directly hit by a hurricane in four years but Insurance Commissioner Kevin McCarty approved dozens of rate hikes since early last year because he said many companies reported premiums aren’t keeping pace with costs due to a rise in sinkhole claims and other claims not related to hurricanes.
Citizens reports a similar experience: It earned $19.6 million in premiums in 2009 for sinkholes but spent $97 million for claims and other expenses related to sinkholes.
McCarty’s office is collecting data on sinkholes from private insurers as well to assess the scope of the problem.
As part of the decision on Citizens, McCarty said homeowners who want sinkhole coverage will be required to get an inspection to prove they qualify for it. Citizens will submit specifics on the new process by the end of the year.
Citizens officials have said insurance rates for homeowners in some of parts of the South Florida and Orlando areas should be much higher than what is proposed, more than double what current rates are in some cases.
This week, Rick Scott, Republican candidate for governor, called for raising Citizens’ premiums by more than 10 percent. His main opponent, Democrat Alex Sink, is opposed.
Regulators questioned Citizens this month about its proposed rates, including why it asked for a “profit and contingency factor” seven times greater than private insurers. The contingency part covers, in part, emergencies and unexpected events.
Paul Palumbo, a senior vice president of Citizens, said the public insurer has had a hard time predicting losses and expenses based on past experience so the contingency factor can help.
Next month, regulators are expected to decide rates for Citizens’ policies covering rented or vacation homes and policies covering condo and homeowner associations.
Regulators approved rate increases as high as 18 percent in some areas such as non-coastal parts of Miami-Dade County, according to a state breakdown of average approved rates, excluding the cost of catastrophic coverage, for more than 100 different regions in Florida.
Excluding coverage for sinkholes and hurricanes, the average rates for home and condominium unit owners in some parts of Broward and Palm Beach counties will drop by 1 percent to 17 percent, according to the OIR report. Individual policyholders’ premiums can vary.
Source: Sun Sentinel, Fort Lauderdale, Fla., Julie Patel. Distributed by McClatchy-Tribune Information Services.
August new home sales second slowest on record
Sales of new homes had their second-worst month on record in August, signaling that the housing market will remain a drag on the U.S. economy.
Last month’s new home sales were unchanged from a month earlier at a seasonally adjusted annual sales pace of 288,000, the Commerce Department said Friday. Sales were down by 29 percent from the same month a year earlier.
Normally the building industry powers economic recoveries. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes, according to the National Associatio ome Builders.
But housing has been at the center of this downturn and it shows no signs of recovering quickly.
The only time new home sales were slower was in May, when the sales pace was 282,000. That’s the worst pace on records dating back to 1963. July’s results had been the worst on record, but were adjusted upward.
High unemployment, tight credit and uncertainty about home prices have kept people from buying homes. Government tax credits boosted the market earlier in the year, but those expired in April.
The median sales price in August was $204,700. That was down 1.2 percent from a year earlier and the lowest since December 2003.
Gains in Western and Northeastern states canceled out losses in the Midwest and South. Sales grew by more than 54 percent in the West and by 17 percent in the Northeast. They fell 26 percent in the Midwest and 11 percent in the South.
Builders are competing with millions of foreclosures and other distressed properties that show no signs of abating. They are unlikely to ramp up construction until those are cleared away and demand for new homes picks up.
The number of unsold new homes on the market fell to 206,000, the lowest since August 1968. At the current sales pace, it would take about 8.6 months to exhaust that supply.
The industry is suffering the repercussions of a massive building boom, in which many homes were sold to speculators. They then resold the homes, often to borrowers who took out risky loans and then defaulted. Those unsustainable boom times aren’t coming back.
Economists at Bank of America-Merrill Lynch predict that spending on building and remodeling homes will decline in the July-September quarter and actually subtract 0.7 percentage points from overall economic activity.
Home construction is up 25 percent from the bottom in April 2009, it is still 74 percent below the peak in January 2006.
Source: The Associated Press, Alan Zibel, AP real estate writer.
Last month’s new home sales were unchanged from a month earlier at a seasonally adjusted annual sales pace of 288,000, the Commerce Department said Friday. Sales were down by 29 percent from the same month a year earlier.
Normally the building industry powers economic recoveries. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes, according to the National Associatio ome Builders.
But housing has been at the center of this downturn and it shows no signs of recovering quickly.
The only time new home sales were slower was in May, when the sales pace was 282,000. That’s the worst pace on records dating back to 1963. July’s results had been the worst on record, but were adjusted upward.
High unemployment, tight credit and uncertainty about home prices have kept people from buying homes. Government tax credits boosted the market earlier in the year, but those expired in April.
The median sales price in August was $204,700. That was down 1.2 percent from a year earlier and the lowest since December 2003.
Gains in Western and Northeastern states canceled out losses in the Midwest and South. Sales grew by more than 54 percent in the West and by 17 percent in the Northeast. They fell 26 percent in the Midwest and 11 percent in the South.
Builders are competing with millions of foreclosures and other distressed properties that show no signs of abating. They are unlikely to ramp up construction until those are cleared away and demand for new homes picks up.
The number of unsold new homes on the market fell to 206,000, the lowest since August 1968. At the current sales pace, it would take about 8.6 months to exhaust that supply.
The industry is suffering the repercussions of a massive building boom, in which many homes were sold to speculators. They then resold the homes, often to borrowers who took out risky loans and then defaulted. Those unsustainable boom times aren’t coming back.
Economists at Bank of America-Merrill Lynch predict that spending on building and remodeling homes will decline in the July-September quarter and actually subtract 0.7 percentage points from overall economic activity.
Home construction is up 25 percent from the bottom in April 2009, it is still 74 percent below the peak in January 2006.
Source: The Associated Press, Alan Zibel, AP real estate writer.
Thursday, September 23, 2010
MIT prof: Housing demand about to take off
William C. Wheaton, professor of economics at Massachusetts Institute of Technology, argues that the housing market is due for improvement, calling home construction, “a sleeping giant that is about to wake up.”
Wheaton believes because there has been so little construction that demand exceeds the level of building and it will soon absorb excess inventory.
“Housing construction will not only rise, but it will stay high for a while, which didn’t happen in previous recoveries,” Wheaton predicts.
Source: Fortune, Nin-Hai Tseng (09/17/2010)
Source: INFORMATION, INC. Bethesda, MD
Wheaton believes because there has been so little construction that demand exceeds the level of building and it will soon absorb excess inventory.
“Housing construction will not only rise, but it will stay high for a while, which didn’t happen in previous recoveries,” Wheaton predicts.
Source: Fortune, Nin-Hai Tseng (09/17/2010)
Source: INFORMATION, INC. Bethesda, MD
A ray of hope for flood insurance extension
The U.S. Senate passed a one-year extension for the National Flood Insurance Program (NFIP) last evening. The House must now approve the bill and send it to President Obama to avoid a temporary NFIP shutdown after Sept. 30.
If NFIP shuts down, current homeowners cannot renew a policy, and homebuyers cannot secure a policy, which can postpone closings of flood-zone homes that require a mortgage.
Also yesterday, The National Association of Realtors® (NAR) testified to the Senate Committee on Banking, Housing and Urban Affairs on the importance of renewing the flood program, which is set to expire for the ninth time in two years. Congress has already approved eight short-term extensions, essentially punting the issue down the field.
“We are pleased that last night the Senate passed S. 3814 to extend the NFIP for one year until Sept. 30, 2011. We urge the House to immediately do the same,” said Realtor Nick D’Ambrosia, who testified on NAR’s behalf. “However, this month-to-month approach has hindered recovering real estate markets and exacerbated the uncertainty for the more than 5.5 million taxpayers who depend on the NFIP to protect them against floods.”
The House earlier passed H.R. 5114, the Flood Insurance Reform Priorities Act, which would reauthorize the NFIP for a full five years. The Senate held yesterday’s hearing to begin the process of developing a Senate response to the House reform bill.
As part of long-term reauthorization reforms, NAR supports strengthening the NFIP’s solvency through outreach and education programs that would help raise participation beyond the current 50 percent of homeowners in federally designated flood areas. The increase in participants would boost funding for the NFIP, help property owners recover from flood losses and decrease future federal assistance when uninsured properties flood and suffer loss, NAR said.
Adding types of coverage for living expenses, business interruption and replacement cost of contents and updating coverage limits – which haven’t been adjusted since 1994 –would also help increase participation.
NAR also strongly supports extending and fully funding the pilot program to mitigate properties that have repeatedly suffered insured flood losses.
“NAR urges the Senate to consider H.R. 5114 and work to strike a proper balance between the NFIP’s fiscal stability and housing affordability,” D’Ambrosia said in testimony.
Source: Florida Realtors®
If NFIP shuts down, current homeowners cannot renew a policy, and homebuyers cannot secure a policy, which can postpone closings of flood-zone homes that require a mortgage.
Also yesterday, The National Association of Realtors® (NAR) testified to the Senate Committee on Banking, Housing and Urban Affairs on the importance of renewing the flood program, which is set to expire for the ninth time in two years. Congress has already approved eight short-term extensions, essentially punting the issue down the field.
“We are pleased that last night the Senate passed S. 3814 to extend the NFIP for one year until Sept. 30, 2011. We urge the House to immediately do the same,” said Realtor Nick D’Ambrosia, who testified on NAR’s behalf. “However, this month-to-month approach has hindered recovering real estate markets and exacerbated the uncertainty for the more than 5.5 million taxpayers who depend on the NFIP to protect them against floods.”
The House earlier passed H.R. 5114, the Flood Insurance Reform Priorities Act, which would reauthorize the NFIP for a full five years. The Senate held yesterday’s hearing to begin the process of developing a Senate response to the House reform bill.
As part of long-term reauthorization reforms, NAR supports strengthening the NFIP’s solvency through outreach and education programs that would help raise participation beyond the current 50 percent of homeowners in federally designated flood areas. The increase in participants would boost funding for the NFIP, help property owners recover from flood losses and decrease future federal assistance when uninsured properties flood and suffer loss, NAR said.
Adding types of coverage for living expenses, business interruption and replacement cost of contents and updating coverage limits – which haven’t been adjusted since 1994 –would also help increase participation.
NAR also strongly supports extending and fully funding the pilot program to mitigate properties that have repeatedly suffered insured flood losses.
“NAR urges the Senate to consider H.R. 5114 and work to strike a proper balance between the NFIP’s fiscal stability and housing affordability,” D’Ambrosia said in testimony.
Source: Florida Realtors®
Florida’s existing home, condo sales up in August
Sales of existing homes in Florida rose 1 percent in August, with a total of 13,997 homes sold statewide compared to 13,908 homes sold in August 2009, according to the latest housing data released by Florida Realtors®. Statewide existing home sales in August increased 3 percent over statewide sales activity in July.
Ten of Florida’s metropolitan statistical areas (MSAs) reported higher existing home sales last month, while 13 MSAs posted increased existing condo sales. Florida’s median sales price for existing homes last month was $134,000; a year ago, it was $146,500 for a decrease of 9 percent. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in July 2010 was $183,400, up 0.9 percent from a year earlier, according to the National Association of Realtors® (NAR). In Massachusetts, the statewide median resales price was $333,000 in May; in California, it was $314,850; in Maryland, it was $267,489; and in New York, it was $227,000.
In Florida’s year-to-year comparison for condos, 5,706 units sold statewide last month compared to 4,662 units in August 2009 for an increase of 22 percent. Statewide existing condo sales last month increased almost 2.7 percent over July’s condo sales. The statewide existing condo median sales price in August was $81,600; in August 2009 it was $107,200 for a 24 percent decrease. The national median existing condo price was $176,800 in July, according to NAR.
The housing sector faces a long recovery process, due in part to slow job growth and the still-fragile economy, according to NAR’s latest industry outlook. “Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery,” said NAR Chief Economist Lawrence Yun. The pace of sales has slowed since May, following the expiration of the federal homebuyer tax credit, Yun said, who predicted this “pause period” likely will last through September.
“However, given rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs,” he said.
The interest rate for a 30-year fixed-rate mortgage averaged 4.43 percent in August, down from the 5.19 percent averaged in August 2009, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Source: Florida Realtors®
Ten of Florida’s metropolitan statistical areas (MSAs) reported higher existing home sales last month, while 13 MSAs posted increased existing condo sales. Florida’s median sales price for existing homes last month was $134,000; a year ago, it was $146,500 for a decrease of 9 percent. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in July 2010 was $183,400, up 0.9 percent from a year earlier, according to the National Association of Realtors® (NAR). In Massachusetts, the statewide median resales price was $333,000 in May; in California, it was $314,850; in Maryland, it was $267,489; and in New York, it was $227,000.
In Florida’s year-to-year comparison for condos, 5,706 units sold statewide last month compared to 4,662 units in August 2009 for an increase of 22 percent. Statewide existing condo sales last month increased almost 2.7 percent over July’s condo sales. The statewide existing condo median sales price in August was $81,600; in August 2009 it was $107,200 for a 24 percent decrease. The national median existing condo price was $176,800 in July, according to NAR.
The housing sector faces a long recovery process, due in part to slow job growth and the still-fragile economy, according to NAR’s latest industry outlook. “Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery,” said NAR Chief Economist Lawrence Yun. The pace of sales has slowed since May, following the expiration of the federal homebuyer tax credit, Yun said, who predicted this “pause period” likely will last through September.
“However, given rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs,” he said.
The interest rate for a 30-year fixed-rate mortgage averaged 4.43 percent in August, down from the 5.19 percent averaged in August 2009, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Source: Florida Realtors®
Wednesday, September 22, 2010
Property insurance discounts for mitigation?
The Florida Office of Insurance Regulation is conducting a public workshop to review the form used by inspectors to document eligibility for wind mitigation discounts for personal residential property today in Tallahassee.
During the workshop, the office will concentrate first on required form changes based on a change in Florida law that authorizes only certain licensees to conduct inspections. Regulators will also discuss potential future changes that would clarify the requirements for insurance companies’ wind mitigation discounts.
Applied Research Associates, Inc. (ARA) is scheduled to deliver a presentation regarding wind mitigation discounts. Contractors, engineers, architects, and other professionals who are engaged in the business of conducting wind mitigation inspections are also expected to participate in the workshop.
The Financial Services Commission, which is comprised of the Governor and Cabinet, adopted a new mitigation form earlier this year, which was based on information obtained during a series of hearings. The new mitigation form requires photographs, signatures, and other improvements designed to prevent fraud and document eligibility for discounts as clearly as possible.
Source: Florida Realtors®
During the workshop, the office will concentrate first on required form changes based on a change in Florida law that authorizes only certain licensees to conduct inspections. Regulators will also discuss potential future changes that would clarify the requirements for insurance companies’ wind mitigation discounts.
Applied Research Associates, Inc. (ARA) is scheduled to deliver a presentation regarding wind mitigation discounts. Contractors, engineers, architects, and other professionals who are engaged in the business of conducting wind mitigation inspections are also expected to participate in the workshop.
The Financial Services Commission, which is comprised of the Governor and Cabinet, adopted a new mitigation form earlier this year, which was based on information obtained during a series of hearings. The new mitigation form requires photographs, signatures, and other improvements designed to prevent fraud and document eligibility for discounts as clearly as possible.
Source: Florida Realtors®
Surcharges help state insurance plans spread costs
Hurricanes are nothing new to Florida. But when four of them swept through and damaged $30 billion in property in 2005, homeowners discovered that the state-run Florida’s Citizens Property Insurance lacked the cash to pay claims.
Citizens’ solution? Impose $1 billion in surcharges on every property insurance policy in the state – even on policies it didn’t write. It also got a $715 million bailout from the state Legislature.
The Florida response exemplifies how state insurance plans have used bailouts from taxpayers, insurance companies and policyholders to subsidize premiums for homeowners in the most hurricane-prone areas.
“Without the subsidies, there’s no doubt we would not have been able to maintain lower rates,” said Joe Shumaker, manager of the state-chartered Mississippi Windstorm Underwriting Association, which covers $7 billion of property on the state’s coast and got $180 million from taxpayers after Hurricane Katrina.
State plans in the Southeast and on the Gulf Coast have collected $7.4 billion in taxpayer funds and insurance surcharges since the 2005 hurricane season, a USA TODAY analysis of state records shows. The taxpayer money – $1.9 billion in total – was a rare direct subsidy from state legislatures.
Post-hurricane surcharges have become a routine practice, used by every coastal state from North Carolina to Texas to spread homeowner repair costs to people who live hundreds of miles from a hurricane zone and who don’t necessarily own homes. Surcharges can apply to all types of policies – property, auto, liability – and add up to 15 percent to an insurance premium.
“If people are not paying their full freight, they end up taking on more risk,” Georgia State University insurance expert Martin Grace said, arguing that insurance subsidies encourage development in hurricane zones. “So when something bad happens, society has to pay more.”
James Oliver, general manager of the state-run Texas Windstorm Insurance Association, questioned the logic of levying surcharges right after a hurricane because the cost hits people whose homes have been ruined. “They’re least able to pay for things after a storm,” Oliver said.
After a major hurricane, the Texas plan would rely heavily on surcharges because the state Legislature in 2009 urged the plan to take the risky step of dropping its reinsurance, an insurance policy for insurers that can cover huge claims and cuts liability but is costly. Lawmakers want the plan to build its reserves so reinsurance costs will be lower.
“That’s not a good long-term strategy, but we had to get our reserves built back up quickly,” Republican Texas Rep. Larry Taylor said. “We had a pretty clean year last year. Keep your fingers crossed.”
In Florida, after the state plan collected surcharges and taxpayer money, Republican state Sen. Mike Fasano led a charge to freeze the state plan rates in 2007 to avoid sharp premium increases. “There’s no way the little guy and gal could afford these higher rates,” he said. “We already have one of the highest foreclosure rates in the country. This (increase) would have added fuel to the fire.”
Gulf Coast lawmakers in Mississippi won the $180 million insurance subsidy by explaining “that the area is vital to the state’s economy,” Shumaker said.
State insurance plans must cover people who can’t get private insurance. Unlike private insurers they are not required to have substantial cash reserves and may set rates that are not “actuarially based,” or calculated to reflect risk.
The plans in the Southeast and on the Gulf Coast have grown dramatically since Katrina prompted private insurers to drop hundreds of thousands of policies. Florida’s Citizens is the state’s largest insurer, with 1.2 million policies.
“The rates would be much higher in Florida Citizens except the legislative and elective process is responsive to those people paying those premiums,” said Federal Emergency Management Agency Administrator Craig Fugate, who ran Florida’s emergency management division from 2001 to 2009. If rates were increased to reflect risk, policyholders “would vote people out of office.”
Source: USA TODAY, a division of Gannett Co. Inc., Thomas Frank.
Citizens’ solution? Impose $1 billion in surcharges on every property insurance policy in the state – even on policies it didn’t write. It also got a $715 million bailout from the state Legislature.
The Florida response exemplifies how state insurance plans have used bailouts from taxpayers, insurance companies and policyholders to subsidize premiums for homeowners in the most hurricane-prone areas.
“Without the subsidies, there’s no doubt we would not have been able to maintain lower rates,” said Joe Shumaker, manager of the state-chartered Mississippi Windstorm Underwriting Association, which covers $7 billion of property on the state’s coast and got $180 million from taxpayers after Hurricane Katrina.
State plans in the Southeast and on the Gulf Coast have collected $7.4 billion in taxpayer funds and insurance surcharges since the 2005 hurricane season, a USA TODAY analysis of state records shows. The taxpayer money – $1.9 billion in total – was a rare direct subsidy from state legislatures.
Post-hurricane surcharges have become a routine practice, used by every coastal state from North Carolina to Texas to spread homeowner repair costs to people who live hundreds of miles from a hurricane zone and who don’t necessarily own homes. Surcharges can apply to all types of policies – property, auto, liability – and add up to 15 percent to an insurance premium.
“If people are not paying their full freight, they end up taking on more risk,” Georgia State University insurance expert Martin Grace said, arguing that insurance subsidies encourage development in hurricane zones. “So when something bad happens, society has to pay more.”
James Oliver, general manager of the state-run Texas Windstorm Insurance Association, questioned the logic of levying surcharges right after a hurricane because the cost hits people whose homes have been ruined. “They’re least able to pay for things after a storm,” Oliver said.
After a major hurricane, the Texas plan would rely heavily on surcharges because the state Legislature in 2009 urged the plan to take the risky step of dropping its reinsurance, an insurance policy for insurers that can cover huge claims and cuts liability but is costly. Lawmakers want the plan to build its reserves so reinsurance costs will be lower.
“That’s not a good long-term strategy, but we had to get our reserves built back up quickly,” Republican Texas Rep. Larry Taylor said. “We had a pretty clean year last year. Keep your fingers crossed.”
In Florida, after the state plan collected surcharges and taxpayer money, Republican state Sen. Mike Fasano led a charge to freeze the state plan rates in 2007 to avoid sharp premium increases. “There’s no way the little guy and gal could afford these higher rates,” he said. “We already have one of the highest foreclosure rates in the country. This (increase) would have added fuel to the fire.”
Gulf Coast lawmakers in Mississippi won the $180 million insurance subsidy by explaining “that the area is vital to the state’s economy,” Shumaker said.
State insurance plans must cover people who can’t get private insurance. Unlike private insurers they are not required to have substantial cash reserves and may set rates that are not “actuarially based,” or calculated to reflect risk.
The plans in the Southeast and on the Gulf Coast have grown dramatically since Katrina prompted private insurers to drop hundreds of thousands of policies. Florida’s Citizens is the state’s largest insurer, with 1.2 million policies.
“The rates would be much higher in Florida Citizens except the legislative and elective process is responsive to those people paying those premiums,” said Federal Emergency Management Agency Administrator Craig Fugate, who ran Florida’s emergency management division from 2001 to 2009. If rates were increased to reflect risk, policyholders “would vote people out of office.”
Source: USA TODAY, a division of Gannett Co. Inc., Thomas Frank.
Florida led nation in mortgage fraud, federal commission says
Mortgage fraud is responsible for untold trillions of dollars in bad loans currently defaulting across the country, and Florida has played a starring role in the tragedy, a federal commission said during a hearing in Miami on Tuesday.
A panel of national and local experts sat before the federal Financial Crisis Inquiry Commission during a hearing focused on liar’s loans, predatory mortgage practices and shady home appraisals. They concluded that the financial impact of the fraud was more severe than most have estimated, and prosecuting those responsible will be nearly impossible. It was the third of four hearings being carried out nationwide by the commission, which Congress assembled last year to investigate the causes of the global financial meltdown.
‘A central issue’
“Mortgage fraud is not just a side issue – in many ways it’s a central issue of this financial collapse,” former Florida Sen. Bob Graham, a commission member, said after the hearing. “I was stunned at the extent and the dollar impact of mortgage fraud and its contribution to the worst financial meltdown in half a century.”
Five hours of expert testimony painted a picture of a system wrought with regulatory inadequacies and financial incentives for unscrupulous behavior at nearly every level. The result, panelists said, was more than $1 trillion lost by banks, homeowners and, ultimately, the U.S. taxpayer between 2005 and 2007 alone. As many as 70 percent of mortgages now in foreclosure were the result of at least one element of fraud, said Ann Fulmer, vice president at Interthinx, a risk-mitigation firm that does extensive mortgage fraud research.
The hearing also laid out the laundry list of challenges local law enforcement officials face as they try to track down and prosecute the predatory lenders and mortgage fraudsters active in Florida during the housing boom.
Compared to the savings and loan crisis of the 1980s and 1990s, which saw more than 1,000 mid- and high-level executives jailed for white-collar crime, mortgage fraud convictions have been paltry, panelists said. Solving mortgage fraud cases is difficult because the process is time-intensive and proving “intent” can be nearly impossible, said Ellen Wilcox, a special agent with the Florida Department of Law Enforcement.
Another challenge: Florida’s statute of limitations means fraudulent loans issued more than three years ago are no longer subject to prosecution.
“Most mortgage fraud will not be reported until the mortgage goes bad, but the ‘crime’ occurred when the money was lent,” Wilcox said. “If there was mortgage fraud in the granting of a mortgage loan in 2004, it can not longer be criminally charged.”
The average mortgage fraud case takes one to two years to investigate, she added.
Law-enforcement officials are also generally under-equipped to face down Florida’s nation-leading fraud problem – the Mortgage Asset Research Institute has ranked the state No. 1 in the country for mortgage fraud since 2006, with nearly three times the normal amount of reported cases.
Still, some progress has been made, and the general consensus is that many of the individual bad apples involved in mid-decade mortgage fraud have been pushed out by market forces, tougher regulation and law enforcement.
Task force launched
In 2007, Miami-Dade police and Mayor Carlos Alvarez launched the Mortgage Fraud Task Force and lobbied for tougher regulatory laws, said Miami-Dade police Capt. Ed Gallagher. Since then, Miami-Dade police have made 239 arrests for mortgage fraud. The U.S. attorney’s office Mortgage Fraud Strike Force has gotten 401 convictions since 2007, said Wilfredo Ferrer, U.S. attorney for the Southern District of Florida.
The Florida Office of Financial Regulation has put together a task force to curb the latest wave of real estate fraud – mortgage modification schemes, said commissioner J. Thomas Cardwell.
Graham and other FCIC commissioners plan to use Tuesday’s findings as part of a comprehensive financial crisis report, due to the president by Dec. 15. Graham said he hoped that report would help policymakers better understand the regulatory and market forces that led to the costly mortgage fraud crisis.
“The role of government as a regulator had gotten – as it did in so many other areas of finance – fairly soft and flabby during the early part of this century,” he said. “Hopefully, one of the positive outcomes of this terrible experience is that the agencies will be better supported, staffed and given the capability to be a lion and not a toothless tiger.”
Source: The Miami Herald, Toluse Olorunnipa. Distributed by McClatchy-Tribune Information Services.
A panel of national and local experts sat before the federal Financial Crisis Inquiry Commission during a hearing focused on liar’s loans, predatory mortgage practices and shady home appraisals. They concluded that the financial impact of the fraud was more severe than most have estimated, and prosecuting those responsible will be nearly impossible. It was the third of four hearings being carried out nationwide by the commission, which Congress assembled last year to investigate the causes of the global financial meltdown.
‘A central issue’
“Mortgage fraud is not just a side issue – in many ways it’s a central issue of this financial collapse,” former Florida Sen. Bob Graham, a commission member, said after the hearing. “I was stunned at the extent and the dollar impact of mortgage fraud and its contribution to the worst financial meltdown in half a century.”
Five hours of expert testimony painted a picture of a system wrought with regulatory inadequacies and financial incentives for unscrupulous behavior at nearly every level. The result, panelists said, was more than $1 trillion lost by banks, homeowners and, ultimately, the U.S. taxpayer between 2005 and 2007 alone. As many as 70 percent of mortgages now in foreclosure were the result of at least one element of fraud, said Ann Fulmer, vice president at Interthinx, a risk-mitigation firm that does extensive mortgage fraud research.
The hearing also laid out the laundry list of challenges local law enforcement officials face as they try to track down and prosecute the predatory lenders and mortgage fraudsters active in Florida during the housing boom.
Compared to the savings and loan crisis of the 1980s and 1990s, which saw more than 1,000 mid- and high-level executives jailed for white-collar crime, mortgage fraud convictions have been paltry, panelists said. Solving mortgage fraud cases is difficult because the process is time-intensive and proving “intent” can be nearly impossible, said Ellen Wilcox, a special agent with the Florida Department of Law Enforcement.
Another challenge: Florida’s statute of limitations means fraudulent loans issued more than three years ago are no longer subject to prosecution.
“Most mortgage fraud will not be reported until the mortgage goes bad, but the ‘crime’ occurred when the money was lent,” Wilcox said. “If there was mortgage fraud in the granting of a mortgage loan in 2004, it can not longer be criminally charged.”
The average mortgage fraud case takes one to two years to investigate, she added.
Law-enforcement officials are also generally under-equipped to face down Florida’s nation-leading fraud problem – the Mortgage Asset Research Institute has ranked the state No. 1 in the country for mortgage fraud since 2006, with nearly three times the normal amount of reported cases.
Still, some progress has been made, and the general consensus is that many of the individual bad apples involved in mid-decade mortgage fraud have been pushed out by market forces, tougher regulation and law enforcement.
Task force launched
In 2007, Miami-Dade police and Mayor Carlos Alvarez launched the Mortgage Fraud Task Force and lobbied for tougher regulatory laws, said Miami-Dade police Capt. Ed Gallagher. Since then, Miami-Dade police have made 239 arrests for mortgage fraud. The U.S. attorney’s office Mortgage Fraud Strike Force has gotten 401 convictions since 2007, said Wilfredo Ferrer, U.S. attorney for the Southern District of Florida.
The Florida Office of Financial Regulation has put together a task force to curb the latest wave of real estate fraud – mortgage modification schemes, said commissioner J. Thomas Cardwell.
Graham and other FCIC commissioners plan to use Tuesday’s findings as part of a comprehensive financial crisis report, due to the president by Dec. 15. Graham said he hoped that report would help policymakers better understand the regulatory and market forces that led to the costly mortgage fraud crisis.
“The role of government as a regulator had gotten – as it did in so many other areas of finance – fairly soft and flabby during the early part of this century,” he said. “Hopefully, one of the positive outcomes of this terrible experience is that the agencies will be better supported, staffed and given the capability to be a lion and not a toothless tiger.”
Source: The Miami Herald, Toluse Olorunnipa. Distributed by McClatchy-Tribune Information Services.
Are cramdowns the answer to underwater properties?
The rising number of home repossessions could encourage Congress to pass cramdown legislation, something lenders fought vigorously and prevailed against when bankruptcy laws were reformed.
But the cramdown concept has been working successfully in Chapter 12 of the bankruptcy code, which affects farmland.
Cramdowns, or more properly “bifurcation,” divide the value of the debt between that which reflects the current appraised value of the property and that which is now unsecured because the underlying value has declined. The borrower is required to pay the secured portion of the loan and the remainder is treated as unsecured debt – and generally forgiven.
Economists for the Federal Reserve Bank of Cleveland wrote in a research paper that the concept is getting a lot of attention currently since the negative effect of cramdowns in agricultural lending has been minor. Cramdowns succeed in keeping farmers on their properties and banks get what they would have gotten if they had foreclosed.
Source: Universal Syndicate: Lew Sichelman (09/19/2010)
Source: INFORMATION, INC.
But the cramdown concept has been working successfully in Chapter 12 of the bankruptcy code, which affects farmland.
Cramdowns, or more properly “bifurcation,” divide the value of the debt between that which reflects the current appraised value of the property and that which is now unsecured because the underlying value has declined. The borrower is required to pay the secured portion of the loan and the remainder is treated as unsecured debt – and generally forgiven.
Economists for the Federal Reserve Bank of Cleveland wrote in a research paper that the concept is getting a lot of attention currently since the negative effect of cramdowns in agricultural lending has been minor. Cramdowns succeed in keeping farmers on their properties and banks get what they would have gotten if they had foreclosed.
Source: Universal Syndicate: Lew Sichelman (09/19/2010)
Source: INFORMATION, INC.
Tuesday, September 21, 2010
Apply for professional education grant
It’s only three to four letters — letters like GRI, CRS, CCIM and more – yet the many different professional designations that often follow a Realtor’s name stand for experience, expertise and a dedication to continued learning and growth in the real estate profession.
Interested in taking an education course to increase your knowledge, but not sure how to come up with the money to pay for it? Turn to the Florida Realtors® Education Foundation Inc., a not-for-profit corporation established to provide real estate-related educational scholarships and grants.
The Florida Realtors® Education Foundation has implemented a new Professional Education Grant Program, available to individuals who wish to pursue any of the various professional designations and courses accredited by the National Association of Realtors, such as the Graduate Realtor Institute (GRI), Certified Residential Specialist (CRS), Certified Commercial Investment Member (CCIM) and so on. A complete list of the various professional designations and courses that are eligible for a professional education grant can be found on NAR’s website at: http://www.realtor.org/education/realtor_university/designation
Professional education grants can be used for tuition up to the maximum amount of $500, and grants must be used within one calendar year of the application date. The application deadline for the current program year is Oct. 31, 2010. The professional education grant applies only to courses taken after it has been awarded. Once an applicant has received a professional education grant from the Florida Realtors® Education Foundation, he or she is ineligible for additional grants.
For more information and to apply for a Florida Realtors® Education Foundation Professional Education Grant, go to http://www.floridarealtors.org/AboutFar/Scholarships/index.cfm, download the application form and follow the instructions.
Source: Florida Realtors®
Interested in taking an education course to increase your knowledge, but not sure how to come up with the money to pay for it? Turn to the Florida Realtors® Education Foundation Inc., a not-for-profit corporation established to provide real estate-related educational scholarships and grants.
The Florida Realtors® Education Foundation has implemented a new Professional Education Grant Program, available to individuals who wish to pursue any of the various professional designations and courses accredited by the National Association of Realtors, such as the Graduate Realtor Institute (GRI), Certified Residential Specialist (CRS), Certified Commercial Investment Member (CCIM) and so on. A complete list of the various professional designations and courses that are eligible for a professional education grant can be found on NAR’s website at: http://www.realtor.org/education/realtor_university/designation
Professional education grants can be used for tuition up to the maximum amount of $500, and grants must be used within one calendar year of the application date. The application deadline for the current program year is Oct. 31, 2010. The professional education grant applies only to courses taken after it has been awarded. Once an applicant has received a professional education grant from the Florida Realtors® Education Foundation, he or she is ineligible for additional grants.
For more information and to apply for a Florida Realtors® Education Foundation Professional Education Grant, go to http://www.floridarealtors.org/AboutFar/Scholarships/index.cfm, download the application form and follow the instructions.
Source: Florida Realtors®
The recession is over! So where’s the party?
It turns out the recession ended more than a year ago.
Feeling better now?
The panel that determines the timing of recessions concluded Monday that this one ended – technically, anyway – in June 2009, and lasted 18 months. The duration makes it the longest since World War II.
It may be over, but you won’t be hearing any cheers from the millions of Americans who are struggling to find a job. Or are worried about the ones they have. Or have lost their homes. Or are behind on the mortgage.
“Every single one of the individuals who wrote the report needs a serious reality check,” said Bob Johnson of the Queens borough of New York, who is 46, had worked in communications and has been looking for a job for more than three years.
Not that it’s the fault of the academics – in this case the National Bureau of Economic Research, a group of economists based in Cambridge, Mass. It’s their job to declare when recessions officially begin and end.
Their finding is one that economic historians spend a lot of time pondering. Politicians care, too. They don’t want to be blamed for downturns that happen on their watch.
One of those politicians is President Barack Obama, who inherited the recession – it began in December 2007, according to the bureau. Obama found little reason Monday to celebrate that it had officially ended.
“The hole was so deep that a lot of people out there are still hurting,” the president, whose Democratic Party faces a likely setback in the midterm elections, said at a town-hall meeting sponsored by CNBC.
Obama has made a point of noting small signs of progress in the economy, which is growing slowly. Some Democrats have urged him to stop boasting about any progress at all, for fear that it irks people who feel things aren’t getting better and makes politicians seem out of touch.
For Melody Brooke, a 55-year-old marriage and family counselor in Lewisville, Texas, it didn’t feel in her household as if the recession ended 15 months ago. Her household finances were in shambles at the time.
“It felt like the heat of it for us,” Brooke said.
Her outlook is starting to brighten. Her husband finally found full-time work about a month ago. And Brooke’s counseling business is picking up: She’s on track to make about $35,000 for the year.
For the rest of the country, the statistics are familiar and grim. Since the recession began, 7.3 million jobs have disappeared. Nearly 2.5 million homes have been repossessed. Unemployment is at 9.6 percent.
Since the technical end of the recession, the economy has been growing. But the growth has been painfully slow.
How slow? The Organization for Economic Cooperation and Development figures the U.S. economy will grow 2.6 percent this year. It would take growth twice that fast to drive down unemployment by a single percentage point.
Unemployment usually keeps rising well after a recession ends. That’s because it takes time for companies to gain confidence in the economy, know that customer demand will last, and add jobs.
But for the past few recessions, it’s taken longer and longer for unemployment to come down. In 1982, for example, unemployment peaked the same month the recession ended. After the 2001 recession, the gap was 19 months.
This time around, it’s been 15 months, and economists don’t expect unemployment to come down significantly anytime soon.
In part, that’s because of how the unemployment rate is calculated. It’s based on a survey of households. Only out-of-work people who are looking for jobs are counted as unemployed. Those who have quit looking out of discouragement aren’t included. As the economy improves, more of these people will start looking for jobs and will be counted again as unemployed. That will drive up the unemployment rate, at least for a while.
To make its call on the end of a recession, the bureau looks at the stats behind the gross domestic product, which measures the total value of the economy. Plus, it reviews incomes, employment and industrial activity.
The bureau pointed out that a downturn in the economy anytime soon would now mark the start of a new recession. The last time that happened was in 1981 and 1982, most economists believe.
The last recession that lasted longer than this one was, well, something far worse than a recession: The Great Depression. It included a downturn of three and a half years, ending in 1933, and another lasting more than a year, ending in 1938.
Source: The Associated Press, Jeannine Aversa, AP economics writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. AP Writers Candice Choi in New York, Dave Carpenter in Chicago and Charles Babington in Washington contributed to this report.
Feeling better now?
The panel that determines the timing of recessions concluded Monday that this one ended – technically, anyway – in June 2009, and lasted 18 months. The duration makes it the longest since World War II.
It may be over, but you won’t be hearing any cheers from the millions of Americans who are struggling to find a job. Or are worried about the ones they have. Or have lost their homes. Or are behind on the mortgage.
“Every single one of the individuals who wrote the report needs a serious reality check,” said Bob Johnson of the Queens borough of New York, who is 46, had worked in communications and has been looking for a job for more than three years.
Not that it’s the fault of the academics – in this case the National Bureau of Economic Research, a group of economists based in Cambridge, Mass. It’s their job to declare when recessions officially begin and end.
Their finding is one that economic historians spend a lot of time pondering. Politicians care, too. They don’t want to be blamed for downturns that happen on their watch.
One of those politicians is President Barack Obama, who inherited the recession – it began in December 2007, according to the bureau. Obama found little reason Monday to celebrate that it had officially ended.
“The hole was so deep that a lot of people out there are still hurting,” the president, whose Democratic Party faces a likely setback in the midterm elections, said at a town-hall meeting sponsored by CNBC.
Obama has made a point of noting small signs of progress in the economy, which is growing slowly. Some Democrats have urged him to stop boasting about any progress at all, for fear that it irks people who feel things aren’t getting better and makes politicians seem out of touch.
For Melody Brooke, a 55-year-old marriage and family counselor in Lewisville, Texas, it didn’t feel in her household as if the recession ended 15 months ago. Her household finances were in shambles at the time.
“It felt like the heat of it for us,” Brooke said.
Her outlook is starting to brighten. Her husband finally found full-time work about a month ago. And Brooke’s counseling business is picking up: She’s on track to make about $35,000 for the year.
For the rest of the country, the statistics are familiar and grim. Since the recession began, 7.3 million jobs have disappeared. Nearly 2.5 million homes have been repossessed. Unemployment is at 9.6 percent.
Since the technical end of the recession, the economy has been growing. But the growth has been painfully slow.
How slow? The Organization for Economic Cooperation and Development figures the U.S. economy will grow 2.6 percent this year. It would take growth twice that fast to drive down unemployment by a single percentage point.
Unemployment usually keeps rising well after a recession ends. That’s because it takes time for companies to gain confidence in the economy, know that customer demand will last, and add jobs.
But for the past few recessions, it’s taken longer and longer for unemployment to come down. In 1982, for example, unemployment peaked the same month the recession ended. After the 2001 recession, the gap was 19 months.
This time around, it’s been 15 months, and economists don’t expect unemployment to come down significantly anytime soon.
In part, that’s because of how the unemployment rate is calculated. It’s based on a survey of households. Only out-of-work people who are looking for jobs are counted as unemployed. Those who have quit looking out of discouragement aren’t included. As the economy improves, more of these people will start looking for jobs and will be counted again as unemployed. That will drive up the unemployment rate, at least for a while.
To make its call on the end of a recession, the bureau looks at the stats behind the gross domestic product, which measures the total value of the economy. Plus, it reviews incomes, employment and industrial activity.
The bureau pointed out that a downturn in the economy anytime soon would now mark the start of a new recession. The last time that happened was in 1981 and 1982, most economists believe.
The last recession that lasted longer than this one was, well, something far worse than a recession: The Great Depression. It included a downturn of three and a half years, ending in 1933, and another lasting more than a year, ending in 1938.
Source: The Associated Press, Jeannine Aversa, AP economics writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. AP Writers Candice Choi in New York, Dave Carpenter in Chicago and Charles Babington in Washington contributed to this report.
GMAC stops some evictions, foreclosed home sales
GMAC Mortgage LLC said Monday it halted certain evictions and sales of foreclosed homes as it corrects “a potential issue” in its foreclosure process.
The action highlights what is becoming a larger problem for lenders and servicers that may have illegally driven homeowners out of their houses. The issue is threatening to clog up an already overloaded foreclosure process.
Lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis, foreclosure-listing firm RealtyTrac Inc. said last week. Banks have been stepping up repossessions to clear out their backlog of bad loans.
GMAC, which is owned by Detroit-based Ally Financial Inc., did not identify the specific internal issue that prompted the moratorium in its statement, but it has been linked to lawsuits this year surrounding the alleged falsification of a key foreclosure document.
The Florida attorney general is investigating three law firms for allegedly providing fraudulent affidavits that identify who holds the original mortgage note in foreclosure cases. In Florida and in other states, this document allows lenders to bypass a costly trial and proceed with a foreclosure.
Two of the three firms being investigated – the Law Office of Marshall C. Watson and the Law Offices of David J. Stern PA – have represented GMAC in foreclosure proceedings. And the person who signed many of these allegedly false affidavits was an employee of GMAC.
In a deposition taken in December, GMAC employee Jeffrey Stephan said he signed 10,000 affidavits or similar documents a month without personally verifying who the mortgage holder was. That means many foreclosures could have taken place based on false documentation. Stephan could not be located for comment.
“That’s hundreds of thousands of cases,” said Ice Legal PA attorney Christopher Immel who took the deposition. “And there are other people at other places who sign these kinds of documents as well.”
GMAC did not address how many homeowners would be affected by its suspension of evictions and foreclosure sales. It expects the issues to be resolved within a few weeks or, at latest, by year-end. The company didn’t respond to questions beyond its statement.
The issue of documenting who holds the mortgage is not unique to GMAC. Judges and lawyers nationwide are taking a second look at foreclosure affidavits. Many mortgages have been sliced up and sold to many investors as securities and that makes it harder to determine who is the ultimate mortgage holder.
In August, a judge in Duval County, Fla., ruled that JPMorgan Chase could not foreclose upon two homeowners because Fannie Mae carried the mortgage on its books and JPMorgan Chase only serviced the loan. JPMorgan Chase had identified itself as the owner of the loan. Similar cases across the country are pending.
The law firm that represented JPMorgan Chase in that case – Shapiro & Fishman – is the third law firm being investigated by the Florida state attorney.
Source: The Associated Press, Janna Herron, AP business writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
The action highlights what is becoming a larger problem for lenders and servicers that may have illegally driven homeowners out of their houses. The issue is threatening to clog up an already overloaded foreclosure process.
Lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis, foreclosure-listing firm RealtyTrac Inc. said last week. Banks have been stepping up repossessions to clear out their backlog of bad loans.
GMAC, which is owned by Detroit-based Ally Financial Inc., did not identify the specific internal issue that prompted the moratorium in its statement, but it has been linked to lawsuits this year surrounding the alleged falsification of a key foreclosure document.
The Florida attorney general is investigating three law firms for allegedly providing fraudulent affidavits that identify who holds the original mortgage note in foreclosure cases. In Florida and in other states, this document allows lenders to bypass a costly trial and proceed with a foreclosure.
Two of the three firms being investigated – the Law Office of Marshall C. Watson and the Law Offices of David J. Stern PA – have represented GMAC in foreclosure proceedings. And the person who signed many of these allegedly false affidavits was an employee of GMAC.
In a deposition taken in December, GMAC employee Jeffrey Stephan said he signed 10,000 affidavits or similar documents a month without personally verifying who the mortgage holder was. That means many foreclosures could have taken place based on false documentation. Stephan could not be located for comment.
“That’s hundreds of thousands of cases,” said Ice Legal PA attorney Christopher Immel who took the deposition. “And there are other people at other places who sign these kinds of documents as well.”
GMAC did not address how many homeowners would be affected by its suspension of evictions and foreclosure sales. It expects the issues to be resolved within a few weeks or, at latest, by year-end. The company didn’t respond to questions beyond its statement.
The issue of documenting who holds the mortgage is not unique to GMAC. Judges and lawyers nationwide are taking a second look at foreclosure affidavits. Many mortgages have been sliced up and sold to many investors as securities and that makes it harder to determine who is the ultimate mortgage holder.
In August, a judge in Duval County, Fla., ruled that JPMorgan Chase could not foreclose upon two homeowners because Fannie Mae carried the mortgage on its books and JPMorgan Chase only serviced the loan. JPMorgan Chase had identified itself as the owner of the loan. Similar cases across the country are pending.
The law firm that represented JPMorgan Chase in that case – Shapiro & Fishman – is the third law firm being investigated by the Florida state attorney.
Source: The Associated Press, Janna Herron, AP business writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Fla. sees increase in international buyers
A number of factors contributed to the decline in home sales nationally and in Florida specifically, but the growing importance of foreign homebuyers has offset some of the damage. Roughly two out of every three Realtors in the state had at least one international transaction within the past year.
While U.S. buyers continue to struggle, foreign buyers generally see U.S. real estate as a desirable, profitable and secure investment. In addition, a weak U.S. dollar has made Florida real estate even more attractive recently.
The National Association of Realtors®, in cooperation with Florida Realtors, conducted a survey of Florida members, asking them about their experience working with international clients. The survey was conducted in July-August 2010. A total of 936 responses were received.
Report highlights
• 65 percent of survey participants – members of Florida Realtors – worked with an international client in the past 12 months. One in five worked with two international clients, and 18 percent working with three or more.
• Half of the respondents said that international clients accounted for 25 percent or less of their business; 15 percent reported that international homebuyers accounted for more than half of their business.
• One in three said that international clients were an increasing share of their customers in the past two years, while just under half (48 percent) noted that their share of international clients stayed about the same.
• Canada had the largest share of buyers, accounting for 36 percent of recent sales. Buyers from the United Kingdom accounted for 15 percent, and the rest of Western Europe accounted for an additional 14 percent. Latin America, defined for the purposes of the report to include Mexico, the Caribbean, Central America and South America, accounted for 16 percent. Other countries with a small but significant share of sales included Germany (5 percent), Venezuela (3 percent), Brazil (3 percent) and France (3 percent).
• 11 percent of foreign buyers bought a new home, while the remaining 89 percent purchased a previously owned home.
• 51 percent purchased a detached single-family home; 37 percent purchased a condo, 11 percent purchased a townhouse and 1 percent purchased some other type of home.
• 38 percent purchased in a suburban area; 30 percent purchased property in a resort area; 25 percent purchased in a central city; and 7 percent purchased in a small town or rural area.
• 15 percent of buyers plan to use their property less than one month per year; 21 percent expect to use it one to two months; and 34 percent three to six months.
• 19 percent bought a home in the Orlando-Kissimmee area; 17 percent chose Miami-Ft. Lauderdale; 13 percent opted for Bradenton-Sarasota; and Tampa, Cape Coral-Fort Myers and Naples rounded out the top six with at least 5 percent of purchases.
To read the complete report, which includes information on why buyers choose Florida as well as why they don’t, visit floridarealtors.org at: https://www.floridarealtors.org/Research/index.cfm
Source: Florida Realtors®
While U.S. buyers continue to struggle, foreign buyers generally see U.S. real estate as a desirable, profitable and secure investment. In addition, a weak U.S. dollar has made Florida real estate even more attractive recently.
The National Association of Realtors®, in cooperation with Florida Realtors, conducted a survey of Florida members, asking them about their experience working with international clients. The survey was conducted in July-August 2010. A total of 936 responses were received.
Report highlights
• 65 percent of survey participants – members of Florida Realtors – worked with an international client in the past 12 months. One in five worked with two international clients, and 18 percent working with three or more.
• Half of the respondents said that international clients accounted for 25 percent or less of their business; 15 percent reported that international homebuyers accounted for more than half of their business.
• One in three said that international clients were an increasing share of their customers in the past two years, while just under half (48 percent) noted that their share of international clients stayed about the same.
• Canada had the largest share of buyers, accounting for 36 percent of recent sales. Buyers from the United Kingdom accounted for 15 percent, and the rest of Western Europe accounted for an additional 14 percent. Latin America, defined for the purposes of the report to include Mexico, the Caribbean, Central America and South America, accounted for 16 percent. Other countries with a small but significant share of sales included Germany (5 percent), Venezuela (3 percent), Brazil (3 percent) and France (3 percent).
• 11 percent of foreign buyers bought a new home, while the remaining 89 percent purchased a previously owned home.
• 51 percent purchased a detached single-family home; 37 percent purchased a condo, 11 percent purchased a townhouse and 1 percent purchased some other type of home.
• 38 percent purchased in a suburban area; 30 percent purchased property in a resort area; 25 percent purchased in a central city; and 7 percent purchased in a small town or rural area.
• 15 percent of buyers plan to use their property less than one month per year; 21 percent expect to use it one to two months; and 34 percent three to six months.
• 19 percent bought a home in the Orlando-Kissimmee area; 17 percent chose Miami-Ft. Lauderdale; 13 percent opted for Bradenton-Sarasota; and Tampa, Cape Coral-Fort Myers and Naples rounded out the top six with at least 5 percent of purchases.
To read the complete report, which includes information on why buyers choose Florida as well as why they don’t, visit floridarealtors.org at: https://www.floridarealtors.org/Research/index.cfm
Source: Florida Realtors®
Monday, September 20, 2010
HOPE homeownership award seeks entries
Know an organization or Realtor working to promote minority homeownership? Nominate them for the National Association of Realtors®’ 2011 Home Ownership Participation for Everyone (HOPE) Awards.
The HOPE Awards were created exactly for times like this – “to recognize and support those individuals and organizations that plant the seeds of hope, in families, communities and the nation, when the barriers to homeownership grow and overshadow the American Dream.”
Applications are due by Dec. 17, 2010. Winners receive $10,000 and paid travel expenses to attend the awards ceremony.
For more information, visit the HOPE Awards website at: http://www.hopeawards.org
Source: Florida Realtors®
The HOPE Awards were created exactly for times like this – “to recognize and support those individuals and organizations that plant the seeds of hope, in families, communities and the nation, when the barriers to homeownership grow and overshadow the American Dream.”
Applications are due by Dec. 17, 2010. Winners receive $10,000 and paid travel expenses to attend the awards ceremony.
For more information, visit the HOPE Awards website at: http://www.hopeawards.org
Source: Florida Realtors®
Is Congress watching the weather as NFIP expires?
The National Flood Insurance Program (NFIP) will expire on Sept. 30, which, unless stopped by Congress, will mark the fourth time this year. Critics have decried Congress’ slow response to not only extend the program long-term, but also for failing to pass substantial reforms.
By allowing the program to lapse, homeowners with flood insurance could lose coverage if they can’t renew, though Congress has historically made a renewal retroactive.
Additionally, some home sales can’t go to closing if the lender requires flood insurance coverage because a property sits in a flood zone. That problem was particularly acute on April 30 of this year as homebuyers faced a deadline for the $8,000 stimulus credit for first-time homebuyers.
Critics say the flood insurance program should be extended for at least 12 months; and once that is accomplished, it must be reformed so that it remains on solid financial footing.
Currently, flood insurance coverage limits are low, there is no coverage for loss of use, and rates are inadequate to cover potential losses. Reform before Sept. 30 should be a top priority for Congress, given the recent weather forecasts and the number of hurricanes and tropical storms forming in the Atlantic Ocean.
Source: Insurance & Financial Advisor (09/16/10) Lobert, John
Source: INFORMATION, INC. Bethesda, MD
By allowing the program to lapse, homeowners with flood insurance could lose coverage if they can’t renew, though Congress has historically made a renewal retroactive.
Additionally, some home sales can’t go to closing if the lender requires flood insurance coverage because a property sits in a flood zone. That problem was particularly acute on April 30 of this year as homebuyers faced a deadline for the $8,000 stimulus credit for first-time homebuyers.
Critics say the flood insurance program should be extended for at least 12 months; and once that is accomplished, it must be reformed so that it remains on solid financial footing.
Currently, flood insurance coverage limits are low, there is no coverage for loss of use, and rates are inadequate to cover potential losses. Reform before Sept. 30 should be a top priority for Congress, given the recent weather forecasts and the number of hurricanes and tropical storms forming in the Atlantic Ocean.
Source: Insurance & Financial Advisor (09/16/10) Lobert, John
Source: INFORMATION, INC. Bethesda, MD
Gov't: Banks should share Fannie, Freddie costs
The nation’s largest banks have an obligation to pay some of the cost for bailing out mortgage buyers Fannie Mae and Freddie Mac because they sold them bad mortgages, a government regulator said Wednesday.
Edward DeMarco, the acting director for the Federal Housing Finance Agency, said the banks this summer have refused to take back $11 billion in bad loans sold to the two government-controlled companies, in written testimony submitted for a House subcommittee hearing Wednesday. A third of those requests have been outstanding for at least three months.
DeMarco said the banks have a legal obligation to buy back the loans and called the delays “a significant concern.” He said the government may take new steps to force those buybacks if “discussions do not yield reasonable outcomes soon.”
In an interview with reporters after the hearing, DeMarco declined to give further details on what the government might do next. He said only that “we’re looking for contractual obligations to be fulfilled.”
Fannie and Freddie buy mortgages and package them into securities with a guarantee against default.
The two mortgage giants nearly collapsed two years ago when the housing market went bust. The government stepped in to rescue them and it has cost taxpayers about $148 billion so far. The rescue is on track to be the most expensive piece of stabilizing the financial system.
Fannie and Freddie have a legal right to return bad loans, especially if they later discover fraudulent statements on applications. Any money they recover offsets their losses.
The amount in question is a small fraction of the total government rescue, said Ed Mills, financial policy analyst at FBR Capital Markets.
Still, lenders say Fannie and Freddie are trying to return too many loans. And in some cases, they are pushing back loans where it’s not clear fraud was committed, the lenders say.
Mortgage industry consultant Brian Chappelle said the requests often apply to loans that met the mortgage buyers’ guidelines at the time.
“The industry believes that the pendulum has swung far beyond what is reasonable,” he said. As a result, he said, lenders are being extremely cautious about making new loans.
Wall Street has worried that the costs of bailing out Fannie and Freddie could get pushed back on big banks. Fitch Ratings said in a report last month that the four largest U.S. banks could book losses of up to $42 billion if Fannie Mae and Freddie Mac force them to take back troubled mortgages they made. It also estimated that JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. could record $17 billion in losses if they repurchase a quarter of the mortgage giants’ seriously delinquent loans.
The leading Democrat on the panel, a House Financial Services subcommittee, indicated the banks bear some responsibility.
“We must begin to think about approaches for recouping taxpayers’ money in the long run,” said Rep. Paul Kanjorski. “We found a way to pay for the savings and loan crisis, and we can surely find a way to recover the costs associated with this crisis.”
A bigger headache for lawmakers is figuring out what to do with Fannie and Freddie in the future.
The Obama administration is working on a plan to restructure the mortgage market and make sure home loans are affordable. Officials don’t plan to release details until next year. But Michael Barr, an assistant Treasury secretary, told the panel Wednesday that Fannie and Freddie “will not exist in the same form as they did in the past.”
Sorting out the future of housing finance has been a divisive issue on Capitol Hill. And it could grow even more contentious if Republicans take control of one or both houses of Congress.
Republicans have seized on the administration’s management of Fannie and Freddie to illustrate Democrats’ push for broadening the reach of the federal government. They say loans acquired by Fannie and Freddie since the September 2008 takeover have put taxpayers at risk.
“It’s time for the government to get out of that business,” said Rep. Spencer Bachus, the top Republican on the House Financial Services Committee.
But Democrats and regulators say the loans acquired by Fannie and Freddie before their takeover represent the overwhelming majority of the companies’ losses. New loans acquired since then have been performing well, they note.
“There is no urgency,” to reform the two companies, said Rep. Barney Frank, the committee’s chairman. “The pattern of abuse they had engaged in has been changed … Fannie and Freddie are behaving differently and are causing far less problems.”
Source: The Associated Press, Alan Zibel, AP real estate writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Edward DeMarco, the acting director for the Federal Housing Finance Agency, said the banks this summer have refused to take back $11 billion in bad loans sold to the two government-controlled companies, in written testimony submitted for a House subcommittee hearing Wednesday. A third of those requests have been outstanding for at least three months.
DeMarco said the banks have a legal obligation to buy back the loans and called the delays “a significant concern.” He said the government may take new steps to force those buybacks if “discussions do not yield reasonable outcomes soon.”
In an interview with reporters after the hearing, DeMarco declined to give further details on what the government might do next. He said only that “we’re looking for contractual obligations to be fulfilled.”
Fannie and Freddie buy mortgages and package them into securities with a guarantee against default.
The two mortgage giants nearly collapsed two years ago when the housing market went bust. The government stepped in to rescue them and it has cost taxpayers about $148 billion so far. The rescue is on track to be the most expensive piece of stabilizing the financial system.
Fannie and Freddie have a legal right to return bad loans, especially if they later discover fraudulent statements on applications. Any money they recover offsets their losses.
The amount in question is a small fraction of the total government rescue, said Ed Mills, financial policy analyst at FBR Capital Markets.
Still, lenders say Fannie and Freddie are trying to return too many loans. And in some cases, they are pushing back loans where it’s not clear fraud was committed, the lenders say.
Mortgage industry consultant Brian Chappelle said the requests often apply to loans that met the mortgage buyers’ guidelines at the time.
“The industry believes that the pendulum has swung far beyond what is reasonable,” he said. As a result, he said, lenders are being extremely cautious about making new loans.
Wall Street has worried that the costs of bailing out Fannie and Freddie could get pushed back on big banks. Fitch Ratings said in a report last month that the four largest U.S. banks could book losses of up to $42 billion if Fannie Mae and Freddie Mac force them to take back troubled mortgages they made. It also estimated that JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. could record $17 billion in losses if they repurchase a quarter of the mortgage giants’ seriously delinquent loans.
The leading Democrat on the panel, a House Financial Services subcommittee, indicated the banks bear some responsibility.
“We must begin to think about approaches for recouping taxpayers’ money in the long run,” said Rep. Paul Kanjorski. “We found a way to pay for the savings and loan crisis, and we can surely find a way to recover the costs associated with this crisis.”
A bigger headache for lawmakers is figuring out what to do with Fannie and Freddie in the future.
The Obama administration is working on a plan to restructure the mortgage market and make sure home loans are affordable. Officials don’t plan to release details until next year. But Michael Barr, an assistant Treasury secretary, told the panel Wednesday that Fannie and Freddie “will not exist in the same form as they did in the past.”
Sorting out the future of housing finance has been a divisive issue on Capitol Hill. And it could grow even more contentious if Republicans take control of one or both houses of Congress.
Republicans have seized on the administration’s management of Fannie and Freddie to illustrate Democrats’ push for broadening the reach of the federal government. They say loans acquired by Fannie and Freddie since the September 2008 takeover have put taxpayers at risk.
“It’s time for the government to get out of that business,” said Rep. Spencer Bachus, the top Republican on the House Financial Services Committee.
But Democrats and regulators say the loans acquired by Fannie and Freddie before their takeover represent the overwhelming majority of the companies’ losses. New loans acquired since then have been performing well, they note.
“There is no urgency,” to reform the two companies, said Rep. Barney Frank, the committee’s chairman. “The pattern of abuse they had engaged in has been changed … Fannie and Freddie are behaving differently and are causing far less problems.”
Source: The Associated Press, Alan Zibel, AP real estate writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Where is the shadow inventory?
For the last year, the real estate industry has been talking about shadow inventory and the coming flood of distressed properties. Where are they?
Here’s what’s happening, according to a recent paper by Alan Mallach, a senior fellow the Brookings Institution:
• Some delinquencies have been resolved through loan modifications or people working out the problems on their own.
• Banks are getting better at managing short sales.
• Investors are aggressively buying up properties, sometimes in bulk, directly from the banks or at courthouse auctions so they don’t hit the market.
The likeliest outcome, Mallach predicts, is a steady flow of foreclosures over a long timeframe that will prevent another crash in home prices – but it will probably lead to low or no appreciation in home prices for a while.
Source: The Wall Street Journal, Nick Timiaros (09/16/2010)
Source: INFORMATION, INC. Bethesda, MD
Here’s what’s happening, according to a recent paper by Alan Mallach, a senior fellow the Brookings Institution:
• Some delinquencies have been resolved through loan modifications or people working out the problems on their own.
• Banks are getting better at managing short sales.
• Investors are aggressively buying up properties, sometimes in bulk, directly from the banks or at courthouse auctions so they don’t hit the market.
The likeliest outcome, Mallach predicts, is a steady flow of foreclosures over a long timeframe that will prevent another crash in home prices – but it will probably lead to low or no appreciation in home prices for a while.
Source: The Wall Street Journal, Nick Timiaros (09/16/2010)
Source: INFORMATION, INC. Bethesda, MD
For Your Clients: 13 Unique Ways to Sell a Home
In today’s market, it takes more than painting and trimming the bushes to get noticed, to stand out, to make your home memorable. While home sellers across the country are resorting to dropping the price in order to make their home more attractive, it leads to one crucial question: what can I do differently to make my home stand out?
Larry Nusbaum, Resolution Assistance Contractor for the FDIC, offers the following tips for home sellers looking to differentiate their homes from the numerous homes that are on the market today.
1. Get lighted signage that’s illuminated even after dark. This will give prospective buyers extra time to see your home as they don’t have to depend on sunlight.
2. If you or your agent are hosting an open house, be sure to serve light snacks and hand out something that attendees will remember. You want something that will be a positive reminder of your home—seasonal gifts are the perfect way to stay top of mind. Be sure to at least have pens and key chains with your agent's name and contact information on them.
3. Create an informational flyer with all the local conveniences you can find: shopping, schools, universities, hospitals, malls, restaurants, gas stations and attractions in the area, in addition to local police and fire stations, even school bus pick up locations. Assume your open house attendees don’t know the neighborhood.
4. Hand out information pertaining to your home as well as information on the other listed properties in the area showing that your house is the best value.
5. Do some staging to make sure your home looks its best.
6. Be sure to offer incentives. Some examples include a Lowe's gift card, paying for a year’s worth of yard care or a free session with a landscape architect, offering a $1,000 landscape allowance, paying for a years worth of homeowners fees, offering $1,000 for new appliances or any home improvement, offering a new carpet allowance or paying for lawn service for a year—the possibilities are endless.
7. Paint the garage floor (concrete paint). Making the garage look fresh and clean will make the whole house feel newer.
8. Send letters to all the neighbors inviting them to “pick their neighbor,” and be sure to include information about your home and the open house. Give them an incentive to talk about your home with other individuals in their sphere of influence. (i.e. a $200 gift card if they find your buyer).
9. Put up signs in your front yard and be sure to hang up as many directional signs as the neighborhood allows.
10. Put out flyers in surrounding shopping areas.
11. Have your agent create a video of your home and put the virtual tour on the Web.
12. Have your agent post ads on Craigslist and on any other free online listing sites you can find.
13. E-mail HR departments at local companies as many employees prefer to live close to their jobs but don’t make time for the house hunting process. This will make it easy for employees to find your home.
By Paige Tepping, RISMedia
Larry Nusbaum, Resolution Assistance Contractor for the FDIC, offers the following tips for home sellers looking to differentiate their homes from the numerous homes that are on the market today.
1. Get lighted signage that’s illuminated even after dark. This will give prospective buyers extra time to see your home as they don’t have to depend on sunlight.
2. If you or your agent are hosting an open house, be sure to serve light snacks and hand out something that attendees will remember. You want something that will be a positive reminder of your home—seasonal gifts are the perfect way to stay top of mind. Be sure to at least have pens and key chains with your agent's name and contact information on them.
3. Create an informational flyer with all the local conveniences you can find: shopping, schools, universities, hospitals, malls, restaurants, gas stations and attractions in the area, in addition to local police and fire stations, even school bus pick up locations. Assume your open house attendees don’t know the neighborhood.
4. Hand out information pertaining to your home as well as information on the other listed properties in the area showing that your house is the best value.
5. Do some staging to make sure your home looks its best.
6. Be sure to offer incentives. Some examples include a Lowe's gift card, paying for a year’s worth of yard care or a free session with a landscape architect, offering a $1,000 landscape allowance, paying for a years worth of homeowners fees, offering $1,000 for new appliances or any home improvement, offering a new carpet allowance or paying for lawn service for a year—the possibilities are endless.
7. Paint the garage floor (concrete paint). Making the garage look fresh and clean will make the whole house feel newer.
8. Send letters to all the neighbors inviting them to “pick their neighbor,” and be sure to include information about your home and the open house. Give them an incentive to talk about your home with other individuals in their sphere of influence. (i.e. a $200 gift card if they find your buyer).
9. Put up signs in your front yard and be sure to hang up as many directional signs as the neighborhood allows.
10. Put out flyers in surrounding shopping areas.
11. Have your agent create a video of your home and put the virtual tour on the Web.
12. Have your agent post ads on Craigslist and on any other free online listing sites you can find.
13. E-mail HR departments at local companies as many employees prefer to live close to their jobs but don’t make time for the house hunting process. This will make it easy for employees to find your home.
By Paige Tepping, RISMedia
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