Foreclosure Homes Account for 24 Percent of All 2010 Second Quarter Residential Sales, According to RealtyTrac

RISMEDIA, September 30, 2010—RealtyTrac, a leading online marketplace for foreclosure properties released its Q2 2010 U.S. Foreclosure Sales Report, which shows that foreclosure homes accounted for 24% of all residential sales in the second quarter of 2010 and that the average sales price of properties that sold while in some stage of foreclosure was more than 26% below the average sales price of properties not in the foreclosure process—down slightly from a 27% average discount in the first quarter.

A total of 248,534 U.S. properties in some stage of foreclosure—default, scheduled for auction or bank-owned (REO)—sold to third parties in the second quarter, an increase of nearly 5% from the previous quarter, but still down 20% from the second quarter of 2009.

“While foreclosure sales increased in the second quarter, non-foreclosure sales increased even more, spurred on by the home buyer tax credit that expired during the quarter,” said James J. Saccacio, chief executive officer of RealtyTrac. “That had the net effect of lowering foreclosure sales as a percentage of total sales during the quarter, but that may be a temporary dip as the removal of the tax credit could drive more buyers back to discounted short sales and REOs.”

Foreclosure sales by type in second quarter

A total of 151,290 bank-owned (REO) properties sold to third parties in the second quarter, up 3% from the previous quarter but down 28% from the second quarter of 2009. REO sales accounted for nearly 15% of all sales in the second quarter, down from nearly 19% of all sales in the previous quarter and down from nearly 20% of sales in the second quarter of 2009. REOs sold for an average discount of nearly 35%, close to the average discount of 34% in the previous quarter and also to the average discount of just over 35% in the second quarter of 2009.

A total of 97,244 pre-foreclosure properties—in default or scheduled for auction—sold to third parties in the second quarter, up nearly 8% from the previous quarter but down 3% from the second quarter of 2009. Pre-foreclosure sales accounted for 9% of all sales, down from nearly 12% of all sales in the previous quarter but nearly identical to the 9% of all sales in the second quarter of 2009. Pre-foreclosure sales, which are often short sales, sold for an average discount of nearly 13%, down from an average discount of nearly 16% in the previous quarter and down from an average discount of 19% in the second quarter of 2009.

Nevada, Arizona, California post highest percentage of foreclosure sales in second quarter

Foreclosure sales accounted for nearly 56% of all sales in Nevada in the second quarter, the highest percentage of any state despite a decrease in foreclosure sales from the previous quarter and from the second quarter of 2009. Nevada pre-foreclosure sales jumped 29% from the previous quarter and were up 2% from the second quarter of 2009, but Nevada REO sales decreased 14% from the previous quarter and were down 43% from the second quarter of 2009.

Arizona foreclosure sales accounted for 47% of all sales in the second quarter, the second highest percentage of any state. Pre-foreclosure sales in Arizona increased 9% from the previous quarter and 15% from the second quarter of 2009 while REO sales increased 15% from the previous quarter but were down nearly 34% from the second quarter of 2009.

Foreclosure sales accounted for 43% of all sales in California in the second quarter, the third highest percentage among the states. California pre-foreclosure sales increased nearly 8% from the previous quarter but were down 4% from the second quarter of 2009. California REO sales increased 1% from the previous quarter but were down 45% from the second quarter of 2009.

Other states where foreclosure sales accounted for at least one-quarter of all sales were Rhode Island (37%), Massachusetts (35%), Florida (34%), Michigan (33%), Georgia (27%), Idaho (27%), and Oregon (25%).

Ohio, Kentucky, California post highest foreclosure discounts

Ohio foreclosures sold for an average discount of nearly 43% in the second quarter, the biggest discount of any state. Ohio pre-foreclosures sold for an average discount of nearly 24% while the average discount on Ohio REOs was double that at nearly 48%.

With foreclosures selling at an average price that was 41% below the average sales price of non-foreclosure properties, Kentucky posted the nation’s second highest average foreclosure discount in the second quarter. Kentucky pre-foreclosures sold for an average discount of 27%, and Kentucky REOs sold for an average discount of 48%.

California foreclosures sold for an average discount of 39% in the second quarter, the third-highest discount among the states. California pre-foreclosures sold for an average discount of 29% and California REOs sold for an average discount of 46%.

Other states with average foreclosure discounts of more than 35% were Michigan, Tennessee, Pennsylvania, Georgia, Illinois and Iowa, along with the District of Columbia.

For more information, visit www.realtytrac.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

Median Sales Price and Days on Market: August 2010

Economic Snapshot: September 2010

As the announcer in baseball likes to say when one of the Rockies hits a home run: “You can kiss it goodbye!”  Well, that’s about all that can be said about this summer of 2010. Poof! It was over before we even knew it. Now comes the fall; filled with football games, warm days and cool nights. Change is in the air. 

The Metro Denver real estate market limped along through the summer months. No longer bolstered by the Federal government’s tax payer incentive program, home buyers and sellers were left to survive on their own. Mortgage interest rates dropped to historic lows, which spawned a plethora of homeowners interested in refinancing. Problem was, home values had slipped and appraisals were coming-in low; leaving many homeowners on the sidelines (or in the dugout) unable to take advantage of lower rates.

Year to date sales of single family homes in Metro Denver are down 7.12% through August/2010 (7,646 sold) as compared to August/2009 (8,232 sold).

On the surface, Metro Denver single family home values have stabilized and are improving. At this time last year, through August/2009, home values were down approximately 6.98% as compared to through August/2008 (average sales price was $279,639). Based on those numbers, average home value sales in Metro Denver have increased about 2.67% over the course of the past two years.

Real estate markets are composed of peaks and valleys; ups and downs. Between the peaks and valleys are plateaus. This is where a calmness normally prevails. People aren’t fighting the currents of change. They have become more accepting; more realistic. This may be where the Metro Denver real estate market is today.

From a real estate perspective, we may never again see the past in the future i.e. annual double digit appreciation of home values followed by annual double digit depreciation of home values. We now live in a more cautious and rational economic environment.

In real estate, there will always be opportunities to be profitable. They exist today, but they are predicated on a person’s willingness to either wait or take some degree of risk. How long the wait will be is unknown. How great the risk is also uncertain. But for some, the willingness to roll the dice will eventually be rewarded. They’ll hit a home run!

A look at the current real estate market. An information source provided by RE/MAX Alliance.

© 2010 RE/MAX Alliance. All rights reserved.

Contract Chronicles: What does Quick Possession Mean?

In the multiple listing service, or MLS, there is frequently displayed, under the property description, the term "quick possession".  This has been of concern to some of my clients because they believe "quick possession" to be synonymous with "short sale" (when the seller negotiates with their lien holders to accept less than what is owed on the home).

Quick possession, is a term used by the seller to denote that the home will be immediately available after close of escrow.  In other words, there should be no "rent back scenario" from the seller or "seller finding home of choice, contingency".   You should be able to take possession right after leaving the closing table.

If you have any questions about the MLS or other real estate questions, feel free to contact me.  I'd be more than happy to help.

Obama Administration September Housing Scorecard Shows Continued Advances in Housing Market; Challenges Remain

RISMEDIA, September 24, 2010—The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury recently released the September edition of the Obama Administration’s Housing Scorecard (www.hud.gov/scorecard), a comprehensive report on the nation’s housing market. The latest housing figures show continued signs of stabilization in house prices. Although existing and new home sales declined in July, recent data shows housing starts rebounded in August.

“Over the last 17 months, the Obama Administration has taken comprehensive action to keep interest rates at record lows, provide incentives to responsible home buyers, and help millions of families stay in their homes,” said HUD Assistant Secretary Raphael Bostic. “But we’re certainly not going to stop fighting to turn things around. That’s why we are focusing on successfully implementing the programs we have put in place, such as additional assistance on refinancing and helping unemployed homeowners stay in their homes, and will continue to monitor the market closely in case more is needed.”

“We’ve been steadily enhancing our programs to help struggling homeowners avoid foreclosure,” said Treasury Assistant Secretary for Financial Stability Herb Allison. “We understand that the foreclosure crisis can be highly localized and some regions have seen severe home price declines and faced severe unemployment. As a result, we have announced more than $4 billion for states hit hardest by this crisis. Our goal is to help build a sustainable, long-term housing recovery. As part of that effort, we have delivered critical support to struggling homeowners while the market continues to heal.”

The September Housing Scorecard features key data on the health of the housing market including:

-Families continued to benefit from the lowest rates in history on 30-year fixed mortgages. Since April 2009, record low rates have helped more than 7.1 million homeowners to refinance, resulting in more stable home prices and $12.7 billion in total borrower savings.

-Existing and new home sales shifted downward in July, though stabilizing housing prices drove improving expectations in some regions. As expected with the expiration of the Home Buyer Tax Credit, new and existing home sales showed a dip in July. At the same time, home prices have leveled off in the past year after 30 straight months of decline and homeowners added $95 billion in home equity in the second quarter.

-More than twice as many modification arrangements have begun compared to foreclosure completions. More than 3.35 million modification arrangements were started between April 2009 and the end of July 2010. These included more than 1.3 million trial Home Affordable Modification Program (HAMP) modification starts, more than 510,000 Federal Housing Administration (FHA) loss mitigation and early delinquency interventions, and nearly 1.6 million proprietary modifications under HOPE Now. The number of agreements offered continued to more than double foreclosure completions for the same period (1.24 million).

-More than 468,000 permanent modifications granted to homeowners; more than 33,000 homeowners received a HAMP permanent modification in August. In addition, servicers continue to work aggressively through their backlog of pending modifications, which is expected to decline in coming months. Homeowners in permanent HAMP modifications have a median monthly payment reduction of 36%, or more than $500 per month. Homeowners in permanent modifications saw their median first-lien housing expenses fall from nearly 45% of their monthly household income to 31%.

For more information, visit www.hud.gov.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

NAR Hails Bill to Hasten Lender Response to Short Sale Requests

RISMEDIA, September 20, 2010—Homeowners who are underwater with their mortgage may find that relief is on the way from a bill strongly supported by the National Association of Realtors that would impose a deadline on lenders to respond to short sale requests.

The legislation, H.R. 6133, “Prompt Decision for Qualification of Short Sale Act of 2010,” was offered recently in Congress by U.S. Reps. Robert Andrews (D-N.J.) and Tom Rooney (R-Fla.). The bill would require lenders to respond to consumer short sale requests within 45 days.

“The short sale, which requires lender approval, is an important instrument for homeowners who owe more than their home is worth,” said NAR President Vicki Cox Golder, owner of a real estate company in Tucson, Ariz. “While the lending community has worked to improve the size and training of their short sales staffs, they still have a long way to go on improving response times.”

“As the leading advocate for homeownership issues, NAR believes that quicker attention to the short sale process is vital to help homeowners who are underwater and their communities, as well as the nation’s economy,” said Golder.

“Unfortunately, homeowners who need to execute a short sale are severely hampered because lenders (loan servicers) are unable to decide whether to approve a short sale within a reasonable amount of time. Potential home buyers are walking away from purchasing short sale property because the lender has taken many months and still not responded to their request for an approval of a proposed short sale price. Many consumers have mentioned that the delay in short sale price approval exceeds 90 days, and in many cases never arrives,” Golder said.

She commended Reps. Andrews and Rooney for their efforts on the bill and urged Congress to pass the bill quickly.

For more information, visit www.realtor.org.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

Cynthia M. Parker recognized as a "Five Star Real Estate Agent " for 2010 by Denver's 5280 Magazine

RE/MAX Alliance, the 3rd largest RE/MAX Franchise in the world, is pleased to recognize several real estate agents that have been nominated as a “Five Star Real Estate Agent” for 2010 by Denver’s 5280 Magazine.

5280 Magazine contracted with Crescendo Business Services, an independent market research company, to identify exceptional real estate agents in the Denver area. More than 92,200 recent home buyers, readers of 5280 Magazine, mortgage lenders and title companies were asked to submit an evaluation. Following a review of the information by a panel of local real estate experts, fewer than seven percent of all licensed real estate agents in the Denver area were chosen to be recognized as a FIVE STAR Real Estate Agent for 2010.  Cynthia M. Parker, was one of the elite finalists.

This year’s list of real estate agents was published in a special section of the September issue of 5280 Magazine.

“We are very proud of all of our hard working agents," said Chad Ochsner, Broker Owner of RE/MAX Alliance. "This acknowledgement is of special importance as it is based on feedback from the consumer, and indicates the level of service provided. It is a true testament to the power of quality service and professionalism ALL RE/MAX Alliance agents provide and display for their clients.”

FHFA Establishes New Housing Goals for Fannie Mae and Freddie Mac

RISMEDIA, September 8, 2010—The Federal Housing Finance Agency (FHFA) has sent a final rule to the Federal Register establishing new housing goals for Fannie Mae and Freddie Mac (the Enterprises) for 2010-2011. The Housing and Economic Recovery Act of 2008 (HERA) required FHFA to establish housing goals for the Enterprises for targeted segments of the mortgage market.


In previous years, the Department of Housing and Urban Development (HUD) set overall goals that measured the combined performance of single-family and multifamily mortgages. In contrast, the new goals required by HERA target specific segments of those markets. The new goals also reflect essential conservatorship requirements to ensure the Enterprises focus on core business activities to support the mortgage market while minimizing losses on their existing mortgages.

The final rule establishes three single-family, owner-occupied home purchase mortgage goals for low-income families, very low-income families and families living in geographical areas with lower-income populations, areas with high concentrations of minority residents and federally-declared disaster areas. The latter goal also includes a specialized subgoal to ensure that the Enterprises address housing needs in lower-income and minority areas. The final rule also contains a goal for single-family, owner-occupied refinance mortgages for low-income families.


The home purchase and refinance goals are expressed as minimum goal-qualifying mortgage shares of home purchase or refinance mortgages acquired by the Enterprises. The benchmark goal levels for the low-income and very low-income home purchase goals did not change from the proposed housing goals rule, however, the final rule adjusts the low-income refinance goal downward reflecting recent market conditions.


The benchmarks for the four single-family goals are:


-27% for the low-income home purchase goal;


-8% for the very low-income family home purchase goal;


-A percentage to be set annually by FHFA for the low-income/high minority/disaster areas home purchase goal (with a subgoal of 13% to measure acquisitions in low-income/high minority areas only); and


-21% for the low-income family refinance goal. The final multifamily goals reflect the current market conditions and are lower than those proposed initially:


-Fannie Mae’ s goal is to acquire mortgages that finance at least 177,750 low-income rental units and 42,750 very low-income rental units.


-Freddie Mac’s goal is to acquire mortgages that finance at least 161,250 low-income rental units and 21,000 very low-income rental units.


-The Enterprises must also report on their acquisition of mortgages involving low-income units in small (5- to 50-unit) multifamily properties.


Consistent with the FHFA proposed housing goals rule, the final rule offers two measures for goal compliance. The final rule sets a prospective or benchmark measure as well as a retrospective market-based measure to assess each Enterprise’s performance relative to the actual goals-qualifying share of the primary mortgage market. An Enterprise can satisfy a particular goal if it meets either of these measures. Previously, the Enterprises’ housing goal levels were set only prospectively.


Consistent with the proposed rule, the final rule prohibits housing goals credit for purchases of mortgages in private-label securities, including commercial mortgage-backed securities. The final rule revises the counting treatment in the proposed rule for loan modifications by allowing credit under the low-income refinance goal for permanent Making Home Affordable loan modifications.


FHFA does not intend for the Enterprises to undertake economically adverse or high-risk activities in support of the goals, nor does it intend for the Enterprises’ state of conservatorship to be a justification for withdrawing support from these important market segments.


As noted in the final rule, FHFA expects to take future regulatory action to address the housing goals treatment of purchases of multifamily loans that aid the conversion of properties that have affordable rents to properties that have less affordable, market rate rents. FHFA also may solicit further comments on how the housing goals can further promote sustainable homeownership and how multifamily subordinate liens can be structured to benefit low-income residents. The final rule is effective 30 days after publication in the Federal Register.


For more information, visit http://www.fhfa.gov/.


RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

Refinancings Soar as Mortgage Rates Remain Low

RISMEDIA, September 3, 2010—(MCT)—For anyone under the age of 57, mortgage rates are now the lowest they’ve been during your life. This fact isn’t lost on a growing number of homeowners who have started a new wave of refinancings.

The Mortgage Bankers Association reported this month that refinancing applications are up 26% during the past four weeks and account for about 82% of all mortgage applications. Not since May 2009 has the volume of refinancing applications been higher.
“We are extremely busy, and it feels good,” said Charles DiPino, Jr., a senior vice president at New Penn Financial, a mortgage banker in Columbia, Md. “The phones are ringing off the hook.”

The calls started coming during the past month or so as rates continued to drop week after week. Mortgage giant Freddie Mac last week reported the average 30-year fixed-rate loan dropped to an average of 4.36%, a rate not seen since March 1953. (Harry S. Truman was president then, and the Academy Awards was shown on TV for the first time.)

Meanwhile, the 15-year fixed-rate mortgage hit a record low of 3.86% last week; while a one-year adjustable-rate mortgage averaged 3.52%, more than a percentage point lower than a year ago, according to Freddie Mac.
“Rates continue to hit new lows because of the weak U.S. economic recovery and the concern that it could fizzle altogether,” said Greg McBride, senior financial analyst with Bankrate.com.

But McBride and others advise against waiting to refinance in hopes that rates will fall further. If they do keep falling, that means the economy is getting even more anemic.

“You can win the battle and lose the war,” McBride said. “You might lose your job and not qualify for the lower rate.”

Refinancing to a lower rate, of course, can reduce your monthly payment. But some homeowners are refinancing to shorten the term of their loan, particularly baby boomers who don’t want this debt hanging over them in retirement, McBride said. And some want to trade in the uncertainty of an adjustable-rate mortgage for the dependability of a fixed-rate loan, he says.

Amy Crews Cutts, Freddie Mac’s deputy chief economist, said despite the uptick in refinancing applications, the numbers still aren’t as high as they should be, given the record-low rates.

Homeowners could be having difficulty qualifying, Cutts said. It could be their creditworthiness has deteriorated. Or their income dropped because of a loss of overtime or they were forced to take a new job that pays less, she says.

So who can qualify for these great rates?

“We’re still in a very tight credit market,” DiPino said. Homeowners with credit scores of 660 or 680 can qualify for refinancing, but the best rates are reserved for those with scores above 700, he says.

Also, generally if you don’t have a certain amount of equity in your home—20% for the very best rates—you might have to pony up more cash to get a new loan, McBride said. Homeowners’ equity has fallen along with a drop in home prices or because they took money out of their house the last time they refinanced, he says.

Some homeowners, though, won’t need that much equity in their homes to get super-low rates if they qualify for a streamlined refinancing program for loans owned by Freddie Mac or Fannie Mae, said DiPino, the mortgage banker. The program, which requires passing a credit check, is designed for those seeking a lower monthly payment, he says. In other words, you can’t refinance to tap the equity in your home.

Of course, there are other factors to consider, such as how long you’ll remain in the house before determining whether refinancing is for you. But with rates these low, it’s worth taking a look.

Should you refinance?

Mortgage rates hitting the lowest levels in decades have caused a rush of refinancing. Check out calculators at Bankrate.com to see if refinancing is worthwhile. The refinance calculator can tell you how much you’ll save and how long you must live in the house to recoup refinancing costs. The FICO score estimator will give you an idea of your credit score. To qualify for the best terms, you’ll need a score in the 700s.

(c) 2010, The Baltimore Sun.

Distributed by McClatchy-Tribune Information Services.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.