Hello Realtors,

 As you can see, foreclosures are up in every county in the state of Massachusetts. Now is the time to get in front of these people and see if you can help them. There are potential short sale, auction and listing opportunities available, so get out there and help them!

Lenders initiated 29,607 petitions to foreclose on Massachusetts properties in 2007, or 55 percent more than the 19,112 filed in Land Court the year before, according to new statistics from The Warren Group, parent company of Banker & Tradesman.

Dukes County saw an 88 percent increase in foreclosure petitions filed in 2007 compared to the previous year, the highest percentage increase of any county in the state. The county, consisting almost entirely of island of Martha's Vineyard, saw 77 foreclosure petitions in 2007 and 41 in 2006. Suffolk County was the site of 3,584 foreclosure petitions in 2007, a 77 percent increase over the 2,028 foreclosures initiated a year earlier.

A petition to foreclose is the first step in a foreclosure proceeding. Not all petitions end in foreclosure, however. Some homeowners manage to sell their home or refinance. Others find the money they need or work out an alternate payment plan with their lender.

The number of foreclosure deeds recorded at registries of deeds rose at an even faster pace in the past year than petitions. In 2007, 7,653 foreclosure deeds were recorded - more than double the 3,086 filed in 2006. A foreclosure deed shows a lender has repossessed a property from the borrower.

Lenders also are filing more petitions to foreclose than at any time in recent years. In November and December of last year, they filed 2,723 and 2,729 foreclosures, respectively, in Massachusetts. Only August and October saw higher numbers; in both of those months, more than 3,000 petitions were filed.

A foreclosure petition can take months to resolve, but the increased petition numbers indicate more people will lose their homes in the coming year due to the widening crisis.

Jim Campen, executive director of Americans for Fairness in Lending and author of an annual research report on mortgage lending patterns in Greater Boston, said the numbers no longer surprise him.

"The very high numbers are no longer shocking, but they're appalling," he said. "There's a great human cost involved."

Campen said he sees a possible sign of hope in the fact that November and December had fewer foreclosure petitions filed than in August and October.

"There may be some seasonal pattern, but there have been increasing amounts of attention put on this since September," he noted. "It's possible that attention by regulators and the media resulted in some lenders not being so quick to foreclose ... it could be that some of the efforts to prevent foreclosures are beginning to work."

Campen said the number of foreclosure proceedings commenced and completed this year won't be dictated by the economy or home prices alone.

"Those are important," he said. "But it also will depend on what efforts are made by lenders, and what kind of pressure is put on lenders by regulators and legislators so that [homes] don't end up in foreclosure."

The top 20 companies filing petitions to foreclose in Massachusetts in 2007 included Deutsche Bank, Wells Fargo Bank, U.S. Bank, Bank of New York, Countrywide Home Loans, Lasalle Bank, Citimortgage, Chase Home Finance, Bank of America and Fannie Mae. Companies filing foreclosure petitions may not be the original lender, but often are loan servicers or bank investors that purchased the loans.

Six of the top 20 - including Deutsche Bank, which filed 4,652 petitions to foreclose in Massachusetts Land Court, more than any other foreclosing entity - were servicers that do not originate loans.

Chris Morrison

www.equity-returns.com

Dear fellow realtors,

 Here is an interesting article I found. Even though the fed dropped rates, we still need to be diligent about prequalifying our customers and keep strong relationships with the lenders and broker you use. Deal can still be done. The days of "no problem, no income" are over. 

Banks getting tougher on mortgages - Fed

Federal Reserve says borrowers with good credit are getting squeezed out of loans as fallout from the subprime debacle spread

WASHINGTON (AP) -- Many U.S. banks have made it harder for creditworthy borrowers to get a mortgage, according to a Federal Reserve survey released Monday that underscored the spread of a painful credit crunch.

"About 55% of domestic respondents indicated that they had tightened their lending standards on prime mortgages," the Fed survey said. That was up from about 40% in a previous survey released in November.

Problems first cropped up in the market for risky "subprime" mortgages made to people with tarnished credit or low incomes and have been spreading to more creditworthy borrowers. Foreclosures have hit record highs.

About 60% of domestic banks responding to the survey indicated that they had tightened their lending standards for approving applications for revolving home equity lines of credit over the past three months, the Fed said.

The Fed's survey found that banks have tightened lending standards on a range of mortgages. They also have tightened lending standards for businesses.

For the latest survey, banks had to respond by Jan. 17. That was before the Fed - in part citing a worsening credit crunch - became more aggressive in cutting its key interest rate.

The Fed last week lowered its key rate by a bold half-percentage point. Just eight days earlier, the Fed in an emergency session slashed its key rate by a rare three-quarters-percentage point. Fed Chairman Ben Bernanke convened that meeting after stocks plunged worldwide, intensifying fears that the United States was heading toward its first recession since 2001. The two cuts together represent the Fed's most intensive rate reductions in two decades.

The survey also found that "large majorities of domestic and foreign banks expect a deterioration in loan quality in 2008" affecting both business and consumer loans, the Fed said.

The survey was based on responses from 56 domestic banks and 23 foreign banking institutions. 

Chris Morrison

www.equity-returns.com

Good morning. Hopefully this is some good news moving forward in regard to mortgage refinance. As Real Estate professionals, we need to do whatever we can to jump start this economy. You may want to call your former clients and get them interested in a potential refinance or at least review their file and see if you can do better. It's a great way to stay in touch and let them know you are still thinking of them in these trying times. 

Refinancings fuel mortgage application surge

Mortgage Bankers Association says the volume of applications filed last week rose 7.5%.

WASHINGTON (AP) -- Mortgage application volume rose 7.5% during the week ended Jan. 25, according to the trade group Mortgage Bankers Association's weekly application survey.

The MBA's application index rose to 1,054.9 from 981.5 the previous week.

Application volume was pushed higher by a jump in refinance volume. Refinance application volume increased 22.1%, while purchase volume tumbled 17.7%. Refinance applications accounted for 73% of total applications.

The index peaked at 1,856.7 during the week ending May 30, 2003, at the height of the housing boom.

An index value of 100 is equal to the application volume on March 16, 1990, the first week the MBA tracked application volume. A reading of 1,054.9 means mortgage application activity is 10.549 times higher than it was when the MBA began tracking the data.

The survey provides a snapshot of mortgage lending activity among mortgage bankers, commercial banks and thrifts. It covers about 50% of all residential retail mortgage originations each week.

Application volume rose despite an increase in interest rates. The average rate for traditional, 30-year fixed-rate mortgages rose to 5.6% from 5.49%. The average rate for 15-year fixed-rate mortgages, which are often used to refinance, rose to 5.04% from 4.95%.

Average rates for one-year adjustable rate mortgages increased to 5.7% from 5.51%. 

Chris Morrison

www.equity-returns.com

The news media just keeps hitting us with horrible news about the foreclosure situation around the country. We as real estate professional have to continue to be there for our clients, working creativly to assist them wherever we can. The Equity Returns Program may be able to assist homeowners that are facing this horrible situation. Go to www.Equity-returns.com for more information. 

Foreclosures up 75% in 2007

Defaults are way up for the year, with once red-hot Sun-Belt markets reporting the worst losses.

NEW YORK (CNNMoney.com) -- The number of foreclosures soared in 2007, with 405,000 households losing their home, according to a report released Tuesday.

Total foreclosure filings soared 97% in December alone compared with December of 2006, according to RealtyTrac, an online seller of foreclosure properties. For the year, total filings - which include default notices, auction sale notices and bank repossessions - grew 75%.

More than 1 percent of all U.S. households were in some stage of foreclosure during 2007, up from 0.58 percent the year before.

"There are parts of the country where we're seeing many more bank repossessions," said Rick Sharga, a spokesman for RealtyTrac. "People are flat out losing their homes."

In California alone, nearly 66,000 people lost their homes last year. In Michigan, 47,000 families went through foreclosure. Also hard hit was Nevada, where 10,0000 people had their homes repossessed, a per-capita rate more than twice as high as California.

California had a total of 250,000 foreclosure filings, the highest number of of any state. Florida was second with more than 165,000 total filings.

Other hard-hit states include Michigan, which has been battered by job losses in the auto industry and had over 87,000 filings, Ohio, with more than 89,000 filings, and Colorado, with 39,000.

Nevada had 3.376 filings for every 100 households - a foreclosure rate of more than three times the national average, and the highest of any state.

According to Gail Burks, the CEO of the Nevada Fair Housing Center, a community advocacy group that aids home owners facing foreclosure, some communities in Las Vegas, Nevada's biggest city, have as many as 40 percent of homes in foreclosure.

"It's having a huge impact," she said. "Some zip codes here are recording 22 foreclosures a month."

The rise nationally has confounded some community advocates. "Last December, we thought the national numbers were bad, and now they're up almost 100 percent," said John Taylor, CEO of the National Community Reinvestment Coalition. "It just shows we need a comprehensive approach to solve the problem."

The increase in foreclosures has come about despite very low interest rates, as well as government, private enterprise and community advocate efforts to forestall the worst of the problems.

That's because sales are very slow in many housing markets and prices are down, leaving many troubled borrowers unable to sell in order to repay their mortgage debts.

Still, some states have avoided problems. Maine had just 286 properties with foreclosure filings on their records, Vermont had 29 and South Dakota just 24. 

Chris Morrison

www.equity-returns.com

info@equity-returns.com

Hello fellow realtor,

Get ready for client & customers who are going to start the finger pointing when the market takes its historical shift. I think the most important item from this article is to keep all your data together regarding each property and make sure you share it with your buyer. Always be the professional in the transaction and you'll have nothing to worry about. 

Unhappy home buyer, feeling misled on price, sues agent

By DAVID STREITFELD
THE NEW YORK TIMES

CARLSBAD, Calif. -- Marty Ummel believes she paid too much for her house. So do millions of other people who bought at the peak of the housing boom.

What makes Ummel different is that she is suing her agent, saying it was all his fault.

Ummel claims that the agent hid the information that similar homes in the neighborhood were selling for less because he feared she would back out and he would lose his $30,000 commission.

Real estate lawyers and brokers say the case, which goes to trial in North County Superior Court on Monday, is likely to be the first of many in which regretful or resentful buyers seek redress from the agents who found them a home and arranged its purchase.

"When your house appreciates $100,000 in the first six months, you're not quite as concerned that maybe the valuation was $25,000 or $50,000 off," said Clifford Horner of the law firm Horner & Singer. "But when your house goes down, you ask: 'Who might have led me astray here?' "

Agents representing buyers rarely had the opportunity to make mistakes during the last real estate boom, in the late 1980s, because the job hardly existed then. For decades, residential transactions almost always involved brokers who, whatever assistance they gave the buyer, legally represented only the seller. The long boom that began in the late 1990s put an end to that one-sided world. As prices spiked, buyer's agents and brokers became popular as sounding boards, advisers and negotiators. The National Association of Realtors estimates they are now involved in two-thirds of all residential purchases.

That makes this the first housing collapse in which large numbers of buyers had a real estate professional explicitly looking after their interests. The Ummel case poses the question: In a relationship built on trust, where promises are rarely written down and where -- as in this case -- there is no signed contract, what are the exact obligations of these representatives in guiding their clients through a sizzling market?

"Agents have a lot of fiduciary duties, but they don't make money unless they close the sale," said Joel Ruben, a real estate lawyer in Manhattan Beach, Calif. "In an inflated market, there are built-in temptations to cut corners."

The defendant in the Ummel case is Mike Little, a veteran agent with ReMax Associates. He will argue that Marty Ummel, who brought the case with her husband, Vernon, is trying to shift the blame for the couple's own failures of research and due diligence.

"They simply didn't do what is expected of a knowledgeable, sophisticated buyer, and are now looking for someone other than themselves to take responsibility," Roger Holtsclaw, an agent who was hired by Little as an expert witness, said in a court deposition.

Horner, the lawyer, said valuation is a tricky area for brokers.

"Brokers aren't appraisers," said Horner, one of the writers of a guide to suing brokers. "They have no obligation to opine about value. But once they do, it becomes a gray area whether it's puffery or a misstatement of a known fact."

Most people who made a bad real estate deal might wince and move on, but people who know Marty Ummel describe her as unusually determined. She spent a year picketing ReMax offices on weekends.

Vernon Ummel, an administrator at Dominican University, gave her his permission to pursue the case, on one condition: "Don't tell me how much the legal fees are." So far, the bills come to $75,000, more than Marty Ummel's annual salary as a fundraiser at California State University-San Marcos.

"I do not think I'm obsessive-compulsive, but I am 114 pounds of absolute perseverance," Marty Ummel said.

Chris

www.Equity-Returns.com

Here is a tough article I just read off the wires. All the banks are finally coming out with the fact that they are losing a lot of money in the forclosure and bankruptcy markets. These are coditions that we as real estate professionals have seen coming for 2 years.

Remember, there is opportunity here. You and your investors can help these homeowners stay in their homes and save their equity. Go to www.equity-returns.com to learn more. 

NEW YORK - The bill for America's excessive borrowing during the housing boom has arrived, and more people are having trouble paying it.

JPMorgan Chase & Co. and Wells Fargo & Co., two of the nation's biggest banks, on Wednesday joined a growing chorus warning that the subprime mortgage mess is just the start of a sweeping lending crisis. And some fear that consumers falling behind on all kinds of loan payments could tip the economy's scale toward recession.

Strapped consumers are having a tough time making payments on credit cards, home-equity loans, and even for their cars. This has caused three of the top five U.S. commercial banks that have already reported damaging fourth-quarter results to set aside some $12.5 billion to cover future loan losses - and that number will likely grow as the year wears on.

Problems in the subprime mortgage market are rapidly spilling over into other areas of the economy. No matter what the experts call it - a recession, slowdown or even the makings of a depression - it's clear banks are under mounting pressure to be more cautious about lending.

"If consumption growth stagnates, the odds of a recession are incredibly high," said Andrew Bernard, director of the Center for International Business at the Tuck School of Business at Dartmouth. "All the pieces of household financial health are starting to be shakier, especially at the low end."

He and others are paying close attention to what top U.S. banks say about their customers' payment habits. Many view this as an early indicator about where the overall economy is headed, but there are other signs that are troublesome.

The stock market has had its worst start to the year in three decades, with investors rattled by signs from the Labor Department that unemployment is on the rise and retail sales are on the decline. Further, the Commerce Department reported Wednesday that higher costs for energy and food in 2007 pushed inflation for the year up by the largest amount in 17 years.

There was no sign of a turnaround in the last few months of the year. The Federal Reserve reported that the economy grew at a slower pace in late November and December as credit problems intensified and consumers tightened their spending.

To some, it appears that the Fed came to its rate-cutting decision in August a bit too late. Others point to the falling dollar and surging oil prices, factors that usually prevent the central bank from easing its monetary policy.

While debate persists about the Fed's timing and the extent of the slowdown, bank executives - who have scrambled to prepare for another tumble in home prices and higher unemployment in 2008, feel academic definitions are beside the point.

"We're not predicting a recession - it's not our job - but we're prepared," JPMorgan Chase CEO Jamie Dimon told analysts after the nation's third-largest bank wrote down $1.3 billion and said profit dropped 34 percent.

His financial institution didn't do all that bad. Rival Citigroup Inc. fared the worst during the fourth quarter, losing $9.83 billion after writing down the value of its portfolio of mortgage and mortgage-backed products by $18.1 billion.

Wells Fargo, a more traditional bank that avoided last year's trading woes, saw its profit fall 38 percent due to troubles with home equity loan and mortgage defaults.

JPMorgan is girding for home prices to decline further in 2008 by 5 percent to 10 percent; Citigroup's estimate of 7 percent falls within that range, too.

"The banks are the infrastructure for everything, the heartbeat of the market," said Chris Johnson, president of Johnson Research Group. "They need to be fixed before the market, and economy, can move forward with confidence. They need to get all their dirty laundry out there."

Banks and card companies like American Express Co. - which warned last week that it would add $440 million to loan loss provisions - said in the regions where home prices are declining, card default rates are rising faster. The same goes for auto loans, subprime mortgages and home equity loans in these areas, which include Florida, Michigan and California.

A big reason for the rise in credit card default rates is that they are returning to more usual levels following a change in bankruptcy law that sent rates lower for a time. But the fact that more losses are being seen in the weaker parts of the country shows the increase is economically driven as well.

Analysts believe this means one thing: Consumers will be the ones paying for years of lax lending standards by U.S. financial institutions. Many will become more restrictive about who gets credit in a bid to stem future losses - and that could curb consumer spending, which accounts for more than two-thirds of the economy.

"We've pushed the envelope," Johnson said. "Along with the joy of a market that goes as high as ours is the agony of when it starts to correct itself."

Certainly a tough spot for us all.

Chris

info@equity-returns.com

This just in from Banker and Tradesman, foreclosures at an all time high in Massachusetts. The highest amount of filings since they started tracking them. This is only going to get worse before it gets better. It is an epidemic that is spreading around the country. Investors can capitalize on these opportunities with the Equity-Returns Program. it is desigb=ned to assist these people. Check our website at http://www.equity-returns.com/ for more info. We can help.

Foreclosures Reach New Highs

Petitions to foreclose in Massachusetts topped 3,000 in October, which marks the second time in 2007 that threshold was crossed.

Meanwhile, the number of foreclosure deeds in November dropped slightly from October, but was still well above the number filed in November 2006, according to statistics from The Warren Group, parent company of Banker & Tradesman.

"Regulators and lawmakers have been paying more attention lately to the foreclosure crisis, but many Bay State homeowners in October and November were still feeling the pinch of rising interest rates and declining home prices, and were in danger of losing their homes," said Timothy Warren Jr., chief executive officer of The Warren Group.

Lenders filed 3,040 petitions to foreclose in Massachusetts Land Court during October. There were 3,115 petitions in August 2007, the only other month petitions topped 3,000 since The Warren Group began tracking foreclosure data in January 2005.

Petitions rose 43.9 percent from the 2,112 filed in October 2006. There were 24,155 petitions filed in the first 10 months of 2007, up 62.7 percent from the 14,847 filed during the same time period of 2006.

Petitions to foreclose are the first step in the foreclosure process, and do not always end in actual foreclosure. Some homeowners eventually sell their homes or refinance.

Petition data for October is the latest full month available from Massachusetts Land Court.

Foreclosure deeds in November rose 72 percent from 371 in November 2006 to 638, but were down slightly from the 739 in October 2007. Year-to-date deeds were up 149.2 percent from 2,797 filed in the first 11 months of 2006 to 6,970 this year.

Auction announcements in the Bay State rose 30 percent in November from 683 last year to 888. But announcements fell considerably from the 1,222 in October 2007. Year-to-date auction announcements increased 125.2 percent from 6,659 to 13,507.

"Petitions to foreclose spiked in August, and are back up near that level in October," Warren said. "Auction announcements and foreclosure deeds are slightly lower than in previous months, which could mean more homeowners are finding solutions before they lose their homes, or that lenders are slowing down the process. It looks like we'll see more of the same in 2008."

Chris Morrison

www.equity-returns.com

Here is a very interesting article regarding the federal government relieving homeowners of their tax liability in the event of a short sale, foreclosure or loan restructure. There are other options for homeowners that don't fit this criteria but need help. Go to http://www.equity-returns.com/ for more information.

http://www.usatoday.com/money/perfi/taxes/2007-12-23-foreclosure-tax_N.htm

This is a link to an interesting article. The way I read it, If I were a lender trying to do business in Mass., I would head for the hills. The Massachusetts government is making it harder and harder to do business.

Massachusetts Attorney General Martha Coakley has released eagerly awaited guidance clarifying her new regulations affecting the mortgage industry.

At a press conference last Tuesday, Coakley said she believes the regulations "merely codify behavior which is already illegal under Massachusetts [consumer protection] law" and that contributed to the state's foreclosure crisis.

The regulations affect both prime and subprime loans and will apply to all loan applications received by Massachusetts-licensed brokers and lenders, and Bay State-chartered banks, after Jan. 2, 2008. They will be "essential in ensuring that consumers are treated fairly in the mortgage lending market," Coakley said.

The implementation date was moved up from Nov. 15 after brokers and lenders expressed concern that certain sections were unclear and could slow or stop lending activity in the state. The attorney general's guidance is meant to clarify what was unclear; she also has promised to send a copy of the guidance to every licensed mortgage broker in the state.

The final regulations require brokers and lenders to "reasonably assess" Massachusetts borrowers' ability to repay a loan, and ban lender price discrimination against borrowers with similar credit and other relevant qualifications.

They also address the use of yield spread premiums - commonly defined as the difference between the mortgage interest rate for which a borrower qualifies and the rate at which a loan is actually set - as well as so-called "stated-income loans," in which a borrower is not required to prove his or her income.

Such loans have been blamed for many foreclosures, as it became clear some borrowers' incomes were misstated.

But Coakley has changed the section that required brokers and lenders to obtain borrowers' signed statements of income on both stated-income and no-income loan products. Now, borrowers' signatures on no-income products, which do not rely on income or employment status, will not be required.

At least one major wholesale lender, Bank of America, told Massachusetts brokers in early November it would stop offering stated-income loans on the date Coakley's regulations became effective.

Natick broker Richard Shapiro, a principal at Asset Mortgage Group, said he has received no updates, and bank spokesmen did not respond to Banker & Tradesman's request for comment.

Many brokers and lenders have said stated-income loans already are much harder to come by these days because of tightening underwriting standards.

Bank of America announced in October that it would discontinue all wholesale lending by the end of this year, but Shapiro said he recently learned the bank would honor interest rates locked in on wholesale loans initiated this year - but set to close beyond Jan. 1 - in every state except Massachusetts, Maine and North Carolina, "due to legislation effective Jan. 1, 2008."

‘A Cleaner Industry'

Yield spread premiums were also of deep concern to the local lending community, which had raised concerns that the regulation's prohibition of conflicts of interest between borrowers and brokers would eliminate the possibility of using them.

YSPs are a chief means of broker compensation.

Massachusetts Mortgage Bankers Association Executive Director Kevin Cuff and Massachusetts Mortgage Association Executive Director Denise Leonard had said many brokers feared the regulation would eliminate YSPs and, in turn, put them out of business.

But yield spread premiums are not banned by the regulation, Coakley said, as long as borrowers are aware of other ways their broker could be compensated - such as the borrower paying points or fees up-front.

"In contrast, in a situation where a broker is paid YSP compensation that escalates upward as the loan interest rate increases, with no corresponding benefit to the borrower ... [that] generates a conflict between the financial interest of the broker and the borrower's interest," the guidance states, and would violate the law.

In an e-mail last Wednesday to MMBA members, Cuff said he thinks Coakley has "come a long way in articulating what she believes to be a conflicting compensation policy through this guidance ... I can tell you this was not always the case."

Brian Driscoll, a production manager with Amerihome Mortgage in Winchester and Burlington, said Amerihome is drafting a new disclosure form about YSPs for borrowers.

"We will be making an effort to ensure that the consumer understands the YSP mechanism, and how it affects the interest rate and the cost of the loan," he said, to try to comply with the guidance.

In general, he added, he thinks the regulations will help the lending process "because there will be more transparency for consumers."

Driscoll joked that he feels like the mortgage industry - under scrutiny and suggestions and efforts to fix lending practices from every corner - has "been like Lindsay Lohan over the past several months. It's kind of like we're going through rehab right now. But in the end, we are going to be a cleaner industry and there will be more professionals."

Shapiro said that from everything he's seen and read, "I am satisfied with the changes and clarifications. At this point, we just want to get back to business."

He added than an ironic twist in today's market, which features increasingly limited consumer credit options and fewer loan products, is that there are so many properties for sale that are "really good deals."

But fewer people can buy them - "or maybe they're just waiting to see if prices [continue to] come down," Shapiro noted.

Separately, a bill sponsored by U.S. Rep. Barney Frank, D-Mass. and chairman of the U.S. House Financial Services Committee, would prohibit yield spread premiums connected to subprime mortgage loans on a national level.

The bill has passed the House and is being considered by the Senate.

Frank's special counsel, Jim Segel, has said Frank does not want to eliminate YSPs as a means of broker compensation, but rather to get rid of incentives that would encourage a broker or lender to offer a loan if the consumer wouldn't benefit from it financially.

The Federal Reserve Board of Governors also proposed new restrictions on lending last week. Under the proposal, which will open for public comment through late March, lenders would be specifically prohibited from paying mortgage brokers yield spread premiums unless a prior written agreement exists between the broker and the consumer disclosing the broker's total compensation. The restrictions also would prohibit lenders from paying a broker yield spread premiums that exceed the amount the consumer had agreed, in advance of the loan, that the broker would receive.