foreclosures: Housing: The Little Engine That Can't - 01/28/12 04:54 AM
Housing, the force that has lifted the economy from almost all previous recessions, now appears to have become the little engine that can’t, as the nation seeks to find another means of raising the U.S. from economic stagnation. One only has to look at the graphs (courtesy of Calculated Risk Blog) to see just how far housing has to go in order to stimulate the economy as it has done following previous recessions. And a look at the unemployment situation shows that “full employment” is still years away.
 
Instead of seeking ways to artificially stimulate housing—efforts to date have … (43 comments)

foreclosures: Builders Have Jumped on the Bargain Bandwagon - 10/16/11 12:58 PM
 
 
While many homebuyers are attracted by the lure of low prices sometimes found in foreclosures, builders have jumped on the bargain bandwagon and may offer greater value and less hassle than is often associated with distressed sales. For those who prefer the features and amenities often found only in new homes, careful shopping just might uncover some great deals.  
 
Many of the homebuilders who managed to remain solvent during the housing crisis are now offering prices well below those of the housing boom. They have trimmed costs and overhead and refined construction techniques; and while their prices may … (9 comments)

foreclosures: Will Renting Foreclosures Stabilize the Housing Market? - 08/15/11 06:15 AM
 
 
Will renting foreclosures stabilize the housing market?  I don’t think so—and here’s why:
 
 
 ●  Although the Administration is currently seeking input on its plan to offer government-owned foreclosures for sale in bulk to large investor groups, it seems unlikely that the plan will boost home prices as suggested.  Furthermore, bulk sales will lower the return to taxpayers already on the hook for billions in losses at Fannie/Freddie and FHA.
 
●  Increasing the number of rentals in a neighborhood often results in lower average prices for existing owners and less neighborhood stability.   
 
●  Discounting foreclosures in … (35 comments)

foreclosures: What if the Housing Market Has Already Recovered? - 07/21/11 09:59 AM
What if the housing market has already recovered?  What if today’s sluggish market is the rate at which homes will be sold for ten years or longer?  Could it be that the sales levels of the past decade were just an anomaly fueled by loose lending restrictions and the attraction to phantom “investment” opportunities?  The bursting of the housing bubble was inevitable, and an attempt to stimulate a return to the sales levels of 2005-2006 would be to inflate yet another.  Today’s home sales are much closer to  “normal” than those of 2005-2006; and it’s time for sellers, Realtors® and builders … (76 comments)

foreclosures: Lipstick on a Pig – Understanding the Dangers of Rehabbed Foreclosures - 04/08/11 12:00 PM
Lipstick on a Pig – Understanding the Dangers of Rehabbed Foreclosures
 
With millions of homes having been lost to foreclosure and millions more to come, savvy “investors” may purchase some of the best deals with the intention of turning them for a quick profit.  Unfortunately, some of those “investors” have little knowledge of construction and use their skills as “make-up artists” to put lipstick on what might otherwise be seen as a pig, a home with serious or even dangerous defects. 
 
Homes that have gone through the foreclosure process have often been neglected by owners who lack the … (82 comments)

foreclosures: Foreclosed Homes Will Offer Even Greater Bargains in 2011 - 02/24/11 09:00 AM
With the average foreclosed home in 2010 selling at a 28% discount from traditional sales, and with banks preparing to increase their sales of distressed properties, foreclosed homes will offer even greater bargains in 2011.  Continuing sluggishness in the housing market, combined with high levels of inventory, should provide great buying opportunities for those looking to purchase a home.
 
Last year’s moratoriums and delays caused by the “robo-signing” crisis caused banks to slow the processing of foreclosures, resulting in a glut of REO inventory that lenders are now ready to move.  And now that many of those foreclosure issues have … (10 comments)

foreclosures: Shadow Inventory Remains a Substantial Risk to the Housing Market - 01/04/11 12:43 AM
An article on MarketWatch describes how the “shadow inventory” remains a substantial risk to the housing market.  The article reports that S&P analysts have observed that it is taking longer for the housing market to absorb foreclosed homes than first anticipated, and that the number of foreclosures “may be a drag on prices for a few more years.”
 
The glut of foreclosures is projected to hit cities such as New York particular hard, where it could take as long as 10 years for the market to return to “normal.”  And while other areas will clear much faster, foreclosures will place … (8 comments)

foreclosures: Title Insurers Drop Demands For Indemnifications From Lenders - 10/29/10 01:42 AM
Title Insurers Drop Demands For Indemnifications From Lenders
A story in the Washington Post reports that three major title companies have agreed to drop their demands for written indemnifications from lenders re-selling their REO inventory. While the change is not yet universal—Fidelity National continues to demand an agreement from Bank of America—it appears that the insurers seem to believe the impact of the “foreclosure scandal” will be contained.
 
Click HERE for article
 
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foreclosures: FHFA Releases Statement Regarding Foreclosure Process Deficiencies - 10/14/10 04:02 AM
Acting Director of FHFA, Edward J. DeMarco, has released a statement addressing the recent foreclosure filing deficiencies and providing guidelines for dealing with those deficiencies. In his statement, DeMarco presented a four-point policy framework:
 
1. Verify Process – Mortgage servicers must review their processes and procedures and verify that all documents, including affidavits and verifications, are completed in compliance with legal requirements.
2. Remediate Actual Problems – When a servicer identifies a foreclosure process deficiency, it must be remediated in an appropriate and timely way and be sustainable. (and must review) . . . Pre-judgment foreclosure actions . . . … (6 comments)

foreclosures: HAMP: August Progress Report - 09/22/10 03:25 PM
The government has released the HAMP August Progress Report covering activity through August 31st and the results fall far below both expectations and commitment. To date there have been 448,937 permanent modifications approved, with 663, 538 trial modifications cancelled.
 
And while those receiving a permanent modification have benefitted, there are a couple of potentially troubling facts:
● The median back-end debt-to-income ratio after modification is 63%, a 14.5% improvement for those borrowers, but still far too high to be sustainable.
● The number of trials reported since the July report is 26,628, an indication that the program is winding … (12 comments)

foreclosures: Is Fannie Mae Solving or Worsening Its Foreclosure Problem? - 09/05/10 08:30 AM
An article in the LA Times describes HomePath, a program being expanded by the mortgage giant in the hope of clearing its backlog of foreclosure inventory. Offering loans with some of the most lenient requirements in the industry, Fannie Mae hopes to recoup some of the billions in losses incurred during the housing crisis. The loans being offered will require a minimum credit score of only 660, with a 3 percent down payment, and with no requirement for mortgage insurance or appraisal. Fannie Mae hopes the program will generate interest in its burgeoning foreclosure inventory.
 
However, while HomePath may stimulate … (15 comments)

foreclosures: Foreclosures Are More Than A Financial Problem - 09/04/10 03:43 AM
Since 2006 Americans have seen the number of foreclosures rise, and the economic damage has been overwhelming, but foreclosures are not just a financial problem. Recognizing the severity of the crisis, the government has put forth several initiatives, some providing aid to banks, their balance sheets deluged with billions in foreclosure inventory, and other plans attempted to help struggling homeowners remain in their homes. However, little has been to actually alleviate the problem, and foreclosures continue at a record pace.
 
Not only did the government’s efforts fail to provide relief, they served to anger many who felt wronged by such … (15 comments)

foreclosures: Where Are Home Prices Going? - 08/20/10 08:52 AM
We’ve all heard the news reports about the potential for a double-dip in housing, and perhaps, the overall economy. Unemployment seems out of control; debt levels are becoming unmanageable; and many are wondering what the future holds for the housing market. Where home prices going and what is the potential for prices to recover to the levels of 2005/2006?
 
There are lots of opinions, but here are some points to consider:
● The recent meeting to discuss the future of housing, including the GSEs Fannie and Freddie, while generating lots of news, was not expected to produce anything of … (180 comments)

foreclosures: The Negativity Associated with Housing Could Impact the Market for Years - 08/17/10 04:08 PM
The constant stream of news stories about foreclosures, increased housing inventory, and the virtual collapse of home builders’ confidence may foretell a disturbing trend; and the negativity associated with housing could impact the market for years. Once seen as a solid investment, residential real estate has lost its allure for those who saw it as an effortless means of enhancing retirement savings. However, with an economy still struggling to come out of the worst recession in three quarters of a century, many have changed their opinion.
 
Having lost much of its perceived investment potential, housing must now rely to its … (10 comments)

foreclosures: Foreclosures And Delinquencies Increasing - 07/06/10 10:10 AM
In an indication of continuing troubles for the housing market, numbers just released from Lender Processing Services (LPS), show the total number of foreclosures and delinquencies increasing. Today’s release of its May Mortgage Monitor report shows a 2.3 percent month-over-month increase in the nation's mortgage delinquency rate with a year-over-year increase of 7.9 percent.
 
The report also shows mortgage defaults beyond 90 days as well as foreclosures experiencing a slight increase, with both rates elevated to historically high levels. As of May 31 there were more than 7.3 million loans delinquent or in foreclosure. Additionally, the numbers showed that the … (19 comments)

foreclosures: The Great Loan Modification Hoax - 05/04/10 10:21 AM
In February of 2009 President Obama made a speech in which he promised to help between 7 and 9 million families avoid foreclosure, a promise that if kept might truly have helped stabilize the U.S. housing market. Unfortunately, the promise upon which millions of homeowners have placed their hopes and committed their savings, seems to have been little more than political rhetoric.
 
To address the housing crisis, the President outlined announced the Homeowner Affordability and Stability Plan, a program which although not described as such, would require billions of dollars, would be impossible to administer, and that, in the end, … (85 comments)

foreclosures: TARP Watchdog Exposes HAMP Failure As Yet Another Homeowner Rescue Effort Is Announced - 03/26/10 08:16 AM
Little more than a year ago President Obama announced the Home Affordability and Stability Plan in a commitment to save 7 – 9 million homeowners from foreclosure. Under the program, several initiatives were established to accomplish his goal. One of them, The Home Affordable Modification Program or HAMP, begun in March 2009 with initial funding of $75 billion, was intended to help those homeowners in default or at imminent risk of default, by modifying their existing mortgages. Such modifications might involve a lowering of the owner’s mortgage interest rate, extending the terms of their loan, or both.
 
Now, one year … (16 comments)

foreclosures: Home Builder Sentiment Remains Negative - 03/16/10 07:30 AM
With new home prices unable to compete with foreclosures, U. S. Home builder sentiment remains negative. According to a March 15th report on MarketWatch, the builder confidence index has fallen 2 points since February, with home builders continuing to struggle against foreclosures and short sales, many of which are priced below the actual costs of construction.
 
Builders in many areas were also hampered by record snowfalls, keeping both construction and buyer activity far below normal. Not that most builders are eager or even able to start new homes; lenders, still weighted down by “toxic assets,” and unsure of the government’s … (11 comments)

foreclosures: HAMP Unlikely To Save The Promised Millions From Foreclosure - 03/12/10 11:15 AM
A Recent article on Calculated Risk seems to point out that the government’s much touted HAMP loan modification plan will fall far short of meeting its goal of saving millions from foreclosure. The article references an update on the government Making Home Affordable website that lists the following points:
 
● There have been 170,000 permanent modifications granted to homeowners.
● An additional 91,800 permanent modifications have been approved by servicers and are pending borrower acceptance.
● More than 1.3 million homeowners have received offers for trial modification.
● Only 32% of the trial modifications begun at least 3 months ago … (12 comments)

foreclosures: Home Prices Decline in November - 01/22/10 07:34 AM
According to a report released today, home prices continue a slow decline, with November prices dropping more than 5% year over year. As I have described in previous posts, prices will remain unstable unless we are able to constructively deal with the millions of potential foreclosures that await bank action.
 
This report combined with the recent spike in unemployment claims is just another indication that the recession, notwithstanding reports to the contrary, seems far from over.
 
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