Short Sales overtake Foreclosures in sales volume

Posted on April 18, 2012 by Al Lorenz

Lender Processing Services, Inc. (LPS) reports that the number of short sales exceeded the number of foreclosures for the first time in January.  Short sales were 23.9 percent of all home purchases in January while foreclosures were only 19.7 percent of home sales in the same period.

In January 2011, short sales were 16.3 percent of transactions and 24.9 percent of sales were foreclosures illustrating the shift in bank’s strategy to deal with mortgage default and delinquency.

Banks are now offering incentives on short sales which will likely alter the ratios even more toward short sales.  The realization that taking a small loss on a quick sale with a short sale is usually a better outcome than having foreclosures on their books.

Short sales are no panacea for neighborhoods.  The January LPS report shows short sales selling fora 23 percent discount over non-distressed homes while foreclosures sold for a 29 percent discount.  All distressed sales hurt neighboring properties, but short sales have less of a discount and the sales cycle is faster, somewhat reducing the impact on neighborhoods.

Banks have recognized the advantages of short sales to their bottom line.  Rather than the fight that short sales were in the past, there are now incentives being offered by the banks to get short sales done.  That can only help work through the backlog of distressed properties.

 

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Fannie and Freddie to Streamline Short Sales

Posted on April 18, 2012 by Al Lorenz

The Federal Housing Finance Agency (FHFA) has directed Fannie Mae and Freddie Mac to streamline processes for facilitating short sales, deeds in – lieu and deeds-for-lease in order to help more homeowners avoid foreclosure.

The changes will come in stages with the first taking place this June. The new policies include the requirement that mortgage servicers must review and respond to requests for short sales within  30 calendar days from receipt of a short sale offer.

The changes require servicers to do the following:

  •  review and respond to requests for short sales within 30 calendar days from receipt of a short sale offer and a complete borrower response package;
  •  provide weekly status updates to the borrower if the short sale offer is still under review after 30 calendar days;
  •  make and communicate final decisions to the borrower within 60 calendar days of receipt of the offer and complete borrower response package.

By the end of 2012, Fannie Mae and Freddie Mac will announce additional enhancements
addressing borrower eligibility and evaluation, documentation simplification, property
valuation, fraud mitigation, payments to subordinate lien holders, and mortgage insurance.

According to acting FHFA Director Edward DeMarco, “FHFA and the Enterprises are committed to enhancing the short sales and deeds-in-lieu process as additional tools to prevent foreclosure, keep homes occupied and help maintain stable communities.”

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Foreclosures Scams up 60% in 2012

Posted on April 16, 2012 by Al Lorenz



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The Homeownership Preservation Foundation (HPF) reports that foreclosures scams surged nearly 60 percent in 2012 in the wake of newly launched federal programs.

“Regretfully, every new government initiative spawns a slew of foreclosure avoidance scams, often from the same cast of characters doing business under various names to avoid easy detection and identification,” warned Colleen Hernandez, CEO of HPF.  “Most of these scams involve individuals supposedly offering mortgage foreclosure avoidance assistance that trained HPF counselors provide at no cost.  Sadly, with most scams, no meaningful services are ever provided.”

Ms. Hernandez said distressed homeowners should avoid any company or individual demanding upfront payments for assistance in avoiding foreclosure on their homes. – 995Hope.org

There as been a slew of new government foreclosure prevention programs this year.  The programs being used in these scams include the National Mortgage Settlement, expanded HAMP and HARP, and OCC Independent Foreclosure Review.

The two primary types of foreclosure prevention scams are the “advanced fee scam” and the “sales-leaseback scheme.”

Some signs of a foreclosure scam include:

  • a company asking for an upfront fee to work with your lender to modify, refinance or reinstate your loan.  Upfront fees have been outlawed by the Federal Trade Commission.
  • A company or person “guarantees” they can stop foreclosure or get a loan modified.
  • A company or person tells you to stop paying your mortgage and make your payments to them instead.
  • If there is any pressure to sign over the title of your home, or sign any documents you don’t understand, be wary.
  • A person or company offers “government approved” or “official government” loan modification.
  • A person or company you don’t know asks you to release your financial information to them.

Be careful out there!  If think you are the victim of a scam, want to check on a company you think is a scam, you can call the Homeowner’s HOPE™ Hotline at 888-995-HOPE™ to report the scam.

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Foreclosures have dropped over 27% in 3 months at Lake Chelan!

Posted on April 12, 2012 by Al Lorenz

The number of distressed and foreclosure properties on our weekly Free Lake Chelan Foreclosure Report have dropped from 105 in January 12th to 76 homes today.  That is over a 27% reduction.

According to the report, there aren’t currently any trustee sales scheduled for Lake Chelan properties until late June.

After weeks of zero or near zero activity on notices of trustee sales, this week there were three new sales scheduled of community waterfront homes.

Reports vary on the outlook for foreclosures, with some reports expecting a wave of new foreclosures and some experts believing the worst is over. So far this year, in the Lake Chelan area, we have only seen declining foreclosure activity.

Our Lake Chelan Foreclosure Report is the only report that covers both bank owned properties and scheduled trustee sales.  Its date is taken not just from the MLS, but from recordings with the county.  There is no better way to stay abreast with the latest happenings in the Lake Chelan area, subscribe to our FREE Lake Chelan Foreclosure Report.

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Second Foreclosure Tsunami about to hit?

Posted on April 10, 2012 by Al Lorenz

Home sales are picking up.  Price declines are slowing.  Foreclosures dropped to a four year low in 2011 declining by one third.  Is it over?  Those all sound like signs that the housing market is stabilizing.  Certainly, there is evidence that foreclosures are currently playing a smaller part in a more “normal” housing market.

But, not all are on board that recovery is eminent.  Some see a “part 2″ to the foreclosure process that is set to start this year.

“We are right back where we were two years ago. I would put money on 2012 being a bigger year for foreclosures than 2010,” said Mark Seifert, executive director of Empowering & Strengthening Ohio’s People (ESOP), a counseling group with 10 offices in Ohio.

“Last year was an anomaly, and not in a good way,” he said. – Reuters

Last year, the robo-signing debacle and the legal fallout from it severely restricted banks from foreclosing until it was settled.  That settlement with 5 major banks and 49 states occurred in February.  In anticipation of that settlement, foreclosure starts jumped 28 percent in January according to mortgage servicing provider Lender Processing Services.

Zillow expects foreclosures to rise this year contributing to a 3.7% decline in prices nationally.  Stan Humphries, Zillow’s economist, expects the market to hit bottom in 2013 and stay there until 2016.

Of course, this huge shadow inventory has all the usual suspects, non-profits and the government sponsored housing relief industry, calling for the ultimate socialist solution of just writing down principals at the expense of those who do pay their bills.  Tyler Durden at zerohedge.com sums up the likelihood of of banks and the GSE’s allowing principal reduction as a way of reducing the foreclosure crisis:

… since every bank asset is another bank’s liability, unless the government pulls a GSE, and funds the wholesale mortgage reduction (call it the “final solution” of ubiquitous and unquestioned socialism), banks will not do this. And while this next bank bailout is only years (at most) away, in the meantime we will see banks do just what they always do: foreclose once again, and release the pent up vacant homes into the market. Which for anyone who has taken Econ 101 means prices are about to take yet another dive lower, and the entire housing recovery plan can be scrapped.

 

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Lake Chelan Distressed Sales in March

Posted on April 6, 2012 by Al Lorenz

Here are the homes that sold in the Lake Chelan area that were indicated to be either bank owned or short sale properties:

Foreclosures 2012 Parcel # Sale Price DOM Type of Sale
48 Trail Ridge Drive, Omak, WA 6440310000 $72,500.00 211 REO
14075 Hyland Avenue, Entiat, WA 252109557026 $90,000.00 43 REO
39 Twin Lakes Drive, Winthrop, WA 7470130000 $120,400.00 170 REO
33 North Shore Road, Orondo, WA 45700201900 $480,000.00 222 Short Sale

So far this year, average sale price for distressed properties has been $207,390 and is running 248 days. At total of $2.28 million in distressed properties were sold in the first quarter in the Lake Chelan area.

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Foreclosures keep dropping in February!

Posted on April 3, 2012 by Al Lorenz

The rumored flood of foreclosures that has been supposed to hit after the $25 billion bank settlement seems to have receded yet again in February.  According to Lender Processing Services, newly initiated foreclosures fell in February from January and from one year ago by about 15%.  That is the 11th straight month in which the level of foreclosure “starts” has fallen versus the same month in the previous year.

The LPS report shows a drop in mortgage delinquencies to 7.6% in February.  However 4.1% of all loans were in the foreclosure process in February which is almost the highest level of the housing crisis.

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Government debates the Morality of Mortgage Debt Forgiveness

Posted on April 2, 2012 by Al Lorenz

How does behavior of borrowers change if you have a policy to restructure loans for underwater borrowers who don’t need them?  That is the concern the Edward DeMarco, the top federal regulator for Fannie Mae and Freddie Mac said is a moral hazard to subsidizing the cost of debt forgiveness at the firms

“What I’m really worried about is what happens if you put an incentive shift out there that says, ‘If you can demonstrate hardship, you can have your debt forgiven,’” said Edward DeMarco, the acting director of the Federal Housing Finance Agency, in an interview with The Wall Street Journal.

There isn’t much research on the question.  It wasn’t something that many folks were concerned about back in 2006.

One study suggests such concerns aren’t without reason. In 2008, Bank of America agreed to modify mortgages in a settlement related to allegedly predatory lending practices at Countrywide Financial Corp. A study published in January 2011 by economists at Columbia University concluded that Countrywide’s relative delinquency rate “increased substantially…during the months immediately after the public announcement of settlement.”

Moreover, the borrowers most likely to default after that announcement “were the borrowers least likely to default otherwise.” – WSJ

The moral issue nobody is discussing is putting the consequences for the borrower’s behavior that created the issue on taxpayers, and including more responsible borrowers.  With the declines in foreclosures we are already seeing, I wonder if such a thing is even necessary.

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Want to hear the reasons why to VOTE NO ON PROPOSITION 1? The Town Toyota Center Sales Tax Story

Posted on March 30, 2012 by Al Lorenz

What is the most famous default property in our area right now?  The Town Toyota Center in Wenatchee is in default on $41 million dollars in debt.  There is a ballot out for a sales tax increase for Wenatchee, and eight of their neighboring cities and counties. to fund Wenatchee’s debt.

There is sure a bunch of talk about Proposition 1 going on right now!  User groups, hockey, ice skaters, etc. have all been rallied to talk up the need for your tax money.  They are joined by businesses, like the Wenatchee World, that profit from advertising from the Town Toyota Center events.

But they are painting only a very narrow picture of the issue, and they want any solution that keeps taxpayers subsidizing their gravy train.  Fortunately, there is a forum on the internet where you can go and read about and converse with people who care about their communities and their taxes.

There are concerned citizens who have put the other side of the story out there.  It is not a big money campaign.  It is counting on having voters that actually think.  At www.NoOnProp1.info you can find information that you won’t hear from the user groups and businesses who profit from the arena that are pushing Proposition 1.

Let’s think through, and do the math on Proposition 1.  Look here www.NoOnProp1.info to find out:

  • Why the Town Toyota Center won’t close if Proposition 1 fails.
  • How the City of Wenatchee can pay for the Town Toyota Center all by themselves.
  • The Chicken Little scare tactics in the arguments of the supporters in their Why You Must Vote Yes page of their web site.
  • Wenatchee soundly rejected providing the type of support they are asking for from the region to other communities.  So much for “Regional” cooperation.
  • Why passage of Proposition 1 won’t stop the legal bills that supporters threaten
  • The likely reason local leaders have not shared their backup plan for the failure of Proposition 1

Join the conversation at www.NoOnProp1.info   Please vote, and take a few minutes to learn why to
VOTE NO on Proposition 1

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New Foreclosure Filings Falling across the country

Posted on March 29, 2012 by Al Lorenz

We have already reported on the decline in foreclosure filings in the Lake Chelan market in 2012.  It appears to be a national trend, as the Office of the Comptroller or the Currency (OCC) reports fourth quarter foreclosure filings fell 16 percent from the previous quarter.  That is an 18 percent drop from a year earlier. Also, foreclosures in process for the quarter fell 4.1 percent from the third quarter of 2011.

Bruce Krueger, with the OCC, believes that the market is stabilizing.  He thinks regulators efforts to encourage loan modifications have helped reduce foreclosures.  Banks have also reduced “dual tracking” where a foreclosure is filed while a loan modification is being considered due to regulators efforts to stop the practice.

Foreclosures are certainly down.  There are some people starting to think this is a trend and the market is stabilizing.

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Posted in Distressed Homeowners, Foreclosure Market, Foreclosure Rescues, Foreclosure Settlement, Lake Chelan Foreclosures, Lake Chelan Real Estate Market | Tagged , , , , , | 3 Comments