Article of the Day

Report Reveals Number of Foreclosures Down From Last Year

02/08/2012 By: Esther Cho 

A foreclosure report released by CoreLogic Wednesday revealed that the number of homes in foreclosure is decreasing nationwide. The report included monthly data on foreclosures, foreclosure inventory, and 90-plus delinquency rates.

Completed foreclosures for 2011 totaled 830,000, compared to 1.1 million in 2010. The December 2011 completed foreclosures figure was also down to 55,000, compared to 67,000 in December 2010.
Nationally, the number of loans in the foreclosure inventory decreased 8.4 percent in December 2011, compared to December 2010, which is a decline of about 130,000 properties. Data from the report revealed 1.4 million homes, or 3.4 percent of all homes with a mortgage, were in the foreclosure inventory as of December 2011.
A property is counted as foreclosure inventory when the mortgage servicer places the property into the foreclosure process. Foreclosure inventory is only measured against homes with an outstanding mortgage. About one-third of homeowners nationwide own their homes.
“The inventory of foreclosed properties has begun to shrink, and the pace at which properties are entering foreclosure is slowing. While foreclosure filings are being curtailed by a variety of judicial and regulatory constraints, mortgage servicers are completing REO sales faster than they are completing foreclosures,” Mark

Fleming, chief economist with CoreLogic, said in the release. “This is the first time in a year that REO sales have outpaced completed foreclosures, and part of the reason for the decrease in the foreclosure inventory.”
In December 2011, servicers increased the rate at which they were able to process distressed assets, also known as distressed clearing ratio, according to the CoreLogic report.
The distressed clearing ratio is found by dividing the number of REO sales by completed foreclosures. A higher ratio means faster clearing of REO inventory. The distressed clearing ratio was 1.03 in December, up from 0.94 in November.
The share of borrowers nationally that were 90 days or more delinquent decreased to 7.3 percent in December 2011, compared to 7.8 percent in December 2010.
From the start of the financial crisis in September 2008, there have been approximately 3.2 million completed foreclosures, according to the report.
CoreLogic, headquartered in California, provides information, analytics, and services to the private and public sectors.
December 2011 Highlights From the Report
The five states with the highest foreclosure inventory:

• Florida (11.9 percent)
• New Jersey (6.4 percent)
• Illinois (5.4 percent)
• Nevada (5.3 percent)
• New York (4.6 percent)

The five states with the lowest foreclosure inventory:

• Wyoming (0.7 percent)
• Alaska (0.8 percent)
• North Dakota (0.8 percent)
• Nebraska (1.0 percent)
• Washington (1.3 percent)

Of the top 100 markets measured by Core Based Statistical Areas (CBSAs) population, 34 are showing an increase in the foreclosure inventory in December 2011, compared to 46 in November 2011.

Article of the Day

Fannie Mae Now Accepting Online Offers for REOs

02/07/2012 By: Carrie Bay 

Fannie Mae announced Tuesday that it has expanded its online system to accept purchase offers for all its REOs listed for sale.

Real estate agents will now submit offers online on behalf of clients, receive receipt confirmation, and track the status of submitted offers through the HomePath.com website. HomePath is the GSE’s REO disposition operation.
In November 2010, Fannie Mae launched the HomePath Online Offers pilot in Orlando, Florida; San Diego, California; and Detroit, Michigan. Active Data Technologies, Inc., the developer of the offer platform, commented just five months after the launch that the technology was seeing positive results in these three test markets.
Now, the Online Offers feature is available for all Fannie Mae-owned properties across the nation through HomePath.com.

“Collecting offers online through HomePath.com will provide greater transparency for homebuyers and their agents,” said Jay Ryan, VP for REO at Fannie Mae. “Our online platform will make it easier to sell properties to owner occupants, which is a major factor in helping to stabilize communities across the nation.”
George Philbeck, a real estate professional with Keller Williams Advantage II Realty in Orlando, has been using Online Offers since the pilot launched in 2010.
“As an agent, I believe Online Offers is efficient, informative and user-friendly,” Philbeck said. “With Online Offers, my clients’ offers are guaranteed to make it to the right person at Fannie Mae for review. It has worked very well for me and for my clients.”
Real estate professionals representing buyers are able to connect directly with Fannie Mae’s listing agents through the HomePath website. The buyer’s agent can also find information on the site regarding financing and incentive options offered through HomePath.
The HomePath site offers a wide selection of properties, including single-family homes, condominiums, and town houses.
Brad Geisen, president and CEO of Active Data Technologies, called HomePath Online Offers a “step in the right direction” by automating the transaction process to move inventory quicker and get the housing market on the road to recovery faster.

Article of the Day

Number of 'Improving' Housing Markets Expands to Nearly 100

02/06/2012 By: Carrie Bay

The number of housing markets showing measurable improvement expanded by 29 metros in February to include a total of 98 markets listed on the Improving Markets Index published monthly by First American and the National Association of Home Builders (NAHB). Thirty-six states are now represented by at least one market on the list.

The index tracks those housing markets that are showing signs of improvement in overall economic health, based on growth in employment, home price appreciation, and increases in single-family housing permits. The index identifies metropolitan areas that have shown improvement in each of these three areas for at least six consecutive months.
The 29 metros added to the index in February include:

• Napa, California
• Deltona, Florida
• Miami, Florida
• North Port, Florida
• Tampa, Florida
• Augusta, Georgia
• Shreveport, Louisiana
• Boston, Massachusetts
• Springfield, Massachusetts
• Cumberland, Maryland
• Lewiston, Maine
• Detroit, Michigan
• Duluth, Minnesota

• Rochester, Minnesota
• Jefferson City, Missouri
• Kansas City, Missouri
• Hattiesburg, Mississippi
• Omaha, Nebraska
• Ocean City, New Jersey
• Syracuse, New York
• Springfield, Ohio
• Youngstown, Ohio
• Portland, Oregon
• Memphis, Tennessee
• Longview, Texas
• Provo, Utah
• Salt Lake City, Utah
• Bellingham, Washington
• Kennewick, Washington

In releasing the new list, First American and NAHB noted that the additions include some metros that have been “particularly weak” in terms of the index measurements, which assess improvements from cycle troughs in employment, home prices, and housing permits.
Some of the hardest hit markets are showing signs of coming off of extreme lows, according to the index’s creators. They highlighted notable new entrants to the list as Miami, Boston, Detroit, Kansas City, Portland, Memphis, and Salt Lake City.
“The fact that there are nearly 100 markets now on the improving list shows that the momentum is building for a housing recovery and that more buyers and sellers are starting to feel confident enough to return to the market,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Company.
Seven markets dropped from the Improving Markets Index in February as they experienced softening house prices. These metros include San Jose, California; Washington, D.C.; Kankakee, Illinois; New Orleans, Louisiana; Worcester, Massachusetts; Jackson, Mississippi; and Sherman, Texas.
A complete list of all 98 metropolitan areas currently on the Improving Markets Index is available at: NAHB.org/imi.

Article of the Day

Rates Give Back Last Week's Increases, Setting New Record Lows

02/02/2012 By: Carrie Bay 

Average mortgage interest rates have reversed from the upward blip reported last week.

Declines this week completely erased the previous week’s increases, as the average rate attached to the 30-year fixed-rate mortgage, 15-year fixed-rate mortgage, and 5-year adjustable-rate mortgage all settled in at new record lows, Freddie Mac reported Thursday.
The GSE attributed the about-face to the fact that recent data on economic growth fell short of market projections.
Freddie Mac’s weekly market survey shows the 30-year fixed mortgage averaged 3.87 percent (0.8 point) for the week ending February 2. It plunged 11 basis points from 3.98 percent the week prior, which saw a 10 basis point

jump in one week’s time. Last year at this time, the 30-year rate averaged 4.81 percent.
The 15-year fixed-rate mortgage this week averaged 3.14 percent (0.8 point), down from 3.24 percent last week. A year ago, the 15-year rate was averaging 4.08 percent.
The 5-year adjustable-rate mortgage (ARM) came in at 2.80 percent (0.7 point) this week. It was 2.85 percent last week and 3.69 percent this time last year.
The 1-year ARM was the only product in Freddie Mac’s study that did not set a new low. It averaged 2.76 percent (0.6 point) this week, which represents an increase from 2.74 percent last week. At this time last year, the 1-year ARM was 3.26 percent.
Commenting on the latest survey results, Frank Nothaft, Freddie’s chief economist, noted that most mortgage rates eased to all-time record lows as fourth quarter growth in the economy came in well under market expectations.
“Gross Domestic Product rose 2.8 percent in the final three months of 2011, below the market consensus forecast of 3.0 percent, while consumer spending in December was flat,” Nothaft explained.
The one bright spot in the latest economic data, Nothaft says, was that fixed residential investment increased for the third consecutive quarter and residential construction spending rebounded in December, rising 0.7 percent.

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Article of the Day

National Servicing Standards Emerge in New Homeowner Bill of Rights

02/01/2012 By: Carrie Bay 

“The administration believes that the mortgage servicing system is badly broken and would benefit from a single set of strong federal standards,” the White House said in a document outlining President Obama’s vision for how a servicing shop should be run.

The president on Wednesday introduced what he’s termed the Homeowner Bill of Rights – plainly defined principles that Obama says will ensure borrowers and lenders are playing by the same common-sense rules.
At the top of that list is a simple, straightforward mortgage disclosure form so borrowers have a clear understanding of their loan. Obama told constituents in Falls Church, Virginia, where he unveiled the new Bill of Rights, that the Consumer Financial Protection Bureau is already making headway in its effort to replace overlapping and complex mortgage forms with a new shorter, simpler form to be used for all home loans.
Obama’s new set of standards mandate servicers provide homeowners with full and clear disclosure of all fees and penalties upfront, with any changes disclosed before they go into effect.
It also requires servicers and investors to implement standards that minimize conflicts of interest and facilitate communication between multiple investors and junior lien holders, so that loss mitigation efforts are not hindered.
Carved out within the Homeowner Bill of Rights is a series of rules to ensure homeowners at risk of foreclosure are provided with the assistance they need to save their homes.
Obama’s proposal calls for early intervention by servicers to contact every homeowner who has demonstrated hardship or fallen behind on their payments, and provide them with a comprehensive set of options to avoid foreclosure. The president’s directive states that every distressed homeowner must be given “a reasonable time” to apply for a modification.

It also requires servicers to provide all homeowners who have requested assistance of become delinquent with access to a customer service employee who has 1) a complete record of previous communications; 2) access to all documentation and payments submitted by the homeowner; and 3) access to personnel with decision-making authority on loss mitigation options.
The new servicing standards would prohibit servicers from initiating a foreclosure action unless they are unable to establish contact with the homeowner after reasonable efforts, or the homeowner has shown a clear inability or lack of interest in pursuing alternatives to foreclosure.
Any foreclosure action already under way must stop prior to sale once the servicer has received the required documentation and cannot be restarted unless the homeowner fails to complete a mod application within a reasonable period, is denied a modification after evaluation, or fails to comply with the terms of the modification received.
The Bill of Rights also establishes protections for homeowners against wrongful foreclosures. Servicers must explain to all homeowners any decision to take action based on their failure to meet payment obligations, and provide the homeowner with the opportunity to appeal that decision in a formal review process.
In addition, prior to a foreclosure sale, servicers must certify in writing to the foreclosure attorney or trustee that appropriate loss mitigation alternatives have been considered and that proceeding to foreclosure sale is consistent with applicable law. A copy of this certification must be provided to the borrower.
“As we have learned over the past few years, the nation is not well served by the inconsistent patchwork of standards in place today, which fails to provide the needed support for both homeowners and investors,” Obama said. “A fair set of rules will allow lenders to be transparent about options and allow borrowers to meet their responsibilities to understand the terms of their commitments.”
The agencies of the executive branch with authority over servicing practices – including the Federal Housing Administration, the U.S. Department of Agriculture, the Department of Veterans Affairs, and Treasury – will each begin implementing rules in the coming months that are consistent with the standards outlined by the Homeowner Bill of Rights, according to the White House.
In announcing the new set of national servicing standards, President Obama said, “Government must take responsibility for rules that are fair and fairly enforced. Banks and lenders must be held accountable for ending the practices that helped cause this crisis in th

Article of the Day

Homeownership and Vacancy Rates Drop

01/31/2012 By: Carrie Bay

The national vacancy rate among single-family non-rental homes fell to 2.3 percent in the fourth quarter of 2011, according to data released Tuesday by the U.S. Census Bureau.

That’s down from 2.7 percent at the beginning of last year, and the lowest homeowner vacancy rate since early 2006.
Undoubtedly, the decline in vacancies is an offshoot of fewer foreclosures in 2011 combined with a slight uptick in home sales for the year.
RealtyTrac reports foreclosure starts were down 39 percent from 2010. And while new home sales had their worst showing in recorded history, the National Association of Realtors tracked a 1.7 percent annual increase in existing-home sales.
Paul Diggle, property economist with Capital Economics, says it’s another sign that excess inventory – at least the visible inventory – is slowly but surely being cleared. It

“leaves the visible inventory at a level consistent with house prices bottoming out later in the year,” according to Diggle.
The Census Bureau also reported that the nation’s homeownership rate dropped to 66.0 percent – its lowest level in nearly 14 years – as the housing downturn has eaten away at the share of Americans who are willing and able to own their own home.
The fourth-quarter homeownership rate gave up almost all of the previous quarter’s gain, Diggle noted.
“What’s more, despite median mortgage costs being more affordable than ever and early signs that mortgage credit is becoming more available…the seven-year downturn in homeownership may still have further to run,” he warns.
The flipside, Diggles says, is there are more households in the rented sector and fewer properties lacking tenants, which is helping to drive rents, and therefore landlords’ returns, higher.
He expects rental value growth is to hit 3 percent this year and average rental yields to rise to around 5.5 percent.
With house prices still falling for now, Diggles says it will be a while yet before homeownership is once again seen as an essential part of the American Dream, and that’s despite the fact that owning now seems to make greater financial sense than renting.
The drop in the homeownership rate pushed the share of households in rented accommodations up, from 33.6 percent at the beginning of 2011 to 34.0 percent in the fourth quarter. The ratio of homes in the rental sector that were vacant also fell, to 9.4 percent.