Category Archives: Real Estate

Real Estate

Foreclosures Reach Lowest Level Since 2007

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Foreclosure filings dropped again in July, marking the 10th straight month for year-over-year declines and reaching their lowest level since November 2007, RealtyTrac reports. But analysts are still mostly attributing the drop to banks’ processing delays as they take more time to take action against delinquent home owners.

For July, about 212,764 homes received a foreclosure filing — which is a notice of default or auction sale or completed foreclosure — that’s down 4 percent compared to June. Filings were 35 percent lower than July 2010, according to RealtyTrac, and bank repossessions were down 33.6 percent from its peak in September 2010. Also, initial notices of default dropped 39 percent year-over-year to fewer than 60,000, which could be an indication that fewer borrowers are falling behind on their mortgage payments or that lenders are not filing notices as promptly in the past.

“The downward trend in foreclosure activity has now taken on a life of its own,” says RealtyTrac CEO James Saccacio. “It appears that processing delays, combined with the smorgasbord of national and state-level foreclosure prevention efforts, may be allowing more distressed home owners to stave off foreclosure.”

Las Vegas continued to have the highest rate of foreclosures in the country — a filing for every 99 homes. Overall, for states, Nevada had the highest foreclosure rate of any state (one filing for every 115 homes), followed by California (one in every 239 homes), and Arizona (one in every 273 homes).

Source: “Foreclosure Filings Fall for 10th Straight Month,” CNNMoney (Aug. 11, 2011)

 
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Real Estate

Distrassed Bank of America Homeowners in California Have Chance of Principal Reduction

Bank of America Nevada City Photo by John J. O'Dell
Bank of America Nevada City Photo by John J. O'Dell


Bank of America has joined the Keep Your Home California principal-reduction program, making it the largest loan servicer involved in lowering loan balances for those with economic hardships.

Making sense of the story

  • Keep Your Home California is a program offered through the California Housing Finance Agency to help struggling homeowners avoid foreclosure.
  • Bank of America, which services more than two million home loans in California, joins others servicers involved in the program, including: California Dept. of Veterans Affairs, the California Housing Finance Agency, Community Trust/Self Help, GMAC, Guild Mortgage Company, and Vericrest Financial.  Agency officials hope the list will continue to grow, and that the program will continue to gain momentum.
  • Under the program, qualified homeowners may be eligible for up to $50,000 in assistance.  The program requires the mortgage investor to match dollar-for-dollar the amount provided by the program.
  • Bank of America borrowers who do not qualify for the principal-reduction program will be evaluated by bank representatives to explore other options, including a loan modification.
  • To be eligible for the program, applicants must: Own and occupy their homes as their primary residence; not exceed $729,750 in current unpaid principal balances on first mortgages; meet low- and moderate-income limits; complete and sign a hardship affidavit to document reasons for hardships; have mortgage loans that are delinquent or “in imminent default;” and have enough income to pay modified mortgage payments according to guidelines from servicers participating in the programs.
  • For more information about Keep Your Home California, visit keepyourhomecalifornia.org or call (888) 954-5337(KEEP).

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Real Estate

New Law Gives Added Protection For Short-Sales In California

Short Sale Diagram

 

On Friday, Gov. Jerry Brown signed Senate Bill 458 (Corbett) into law.  The new law, which contained an urgency clause and became effective upon signing, protects homeowners pursuing short sales by barring first and secondary lien holders from going after sellers for money owed after the short sales close.

  • A short sale – a transaction in which the homeowner sells the property for less than is owed on the mortgage – must be approved by the lien holder or lien holders, if there is more than one.
  • Under previous law (SB 931 of 2010), a first mortgage holder could accept an agreed-upon short-sale payment as full payment for the outstanding balance of the loan, but the rule did not apply to junior lien holders. SB 458 extends the protections of SB 931 to junior liens.
  • The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) sponsored the bill and urged lawmakers to pass this much-needed legislation.
  • “The signing of this bill is a victory for California homeowners who have been forced to short sell their home, only to find that the lender will pursue them after the short sale closes and demand an additional payment to subsidize the difference,” said C.A.R. President Beth L. Peerce.  “SB 458 brings closure and certainty to the short-sale process and ensures that once a lender has agreed to accept a short-sale payment on a property, all lien holders – those in first position and in junior positions – will consider the outstanding balance as paid in full, and the homeowner will not be held responsible for any additional payments on the property.”

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John J. O’Dell Realtor®
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O’Dell Realty
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Real Estate

Sorting Through Lending Costs

house made of dollars
Picture courtesy of Showcase Realty

Although the Consumer Financial Protection Bureau, the federal agency created to oversee mortgage lending, only recently opened, the Bureau started looking at ways to protect consumers during the loan-shopping period long before it’s official start date.

Making sense of the story:

  • The bureau is exploring avenues for combining the two forms that borrowers currently receive – the three-page Good Faith Estimate and the two-page Truth in Lending Act form.  These forms tell would-be borrowers the terms of their loan – for instance, how payments on an adjustable-rate mortgage change.  They also lay out fees.
  • Fees can make a big difference when comparison shopping.  The simplest way to compare loans is by looking at the Annual Percentage Rate, or A.P.R.  That calculation rolls in fees as well as the stated interest rate.  Because lenders are required to follow the same formula, useful comparisons can be made.
  • Borrowers are advised to request a Good Faith Estimate from every lender they approach.  While the Good Faith Estimate is in place to help borrowers, according to one lender, some lenders may provide interest-rate quotations that expire almost instantaneously, making it difficult for buyers to comparison shop.
  • Borrowers should be wary if they receive two or three different Good Faith Estimates and there is a difference of several thousand dollars.

Read the full story 

 

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Real Estate

Short Sale Fraud Rampant, Investigators Say

Caution protect yourself against mortgage relief scams
Picture courtesy of Utah Home Group

 

Lenders are losing out on thousands of dollars–sometimes within just mere hours–due to short sale fraud, which is skyrocketing and plaguing the housing market, investigators say.

In one of the most common short sale scams, an investor submits a low offer on a home that is underwater, in which the borrower owes more on the mortgage than the home is currently worth. Scam artists, working with the investor, present the lowball offer to the lender, asking for a short sale to be completed. Appraisals or broker price opinions may be manipulated to help persuade lenders to do the short sale (one common method: Misstating the home’s location so that the home is compared to lower cost homes).

The lender agrees to the short sale, but is unaware that there is really a higher bid on the home from a legitimate buyer. Once the lender approves the short sale, the scammer then resells the home to the higher, legitimate bidder–often on the same day.

“These same-day resales are on average nearly $50,000 greater than the lender agreed upon short-sale price,” said Tim Grace, senior vice president of product management and analytics at CoreLogic. Short sale fraud is expected to cost lenders more than $375 million this year, which is an increase of more than 20 percent from last year, according to CoreLogic.

Last year, fraud associated with short sales comprised half of all fraud investigations for mortgage companies like Freddie Mac, said Robert Hagberg, an investigator for Freddie Mac.

Source: “Short Sale Fraud Plagues the Housing Market,” CNNMoney (July 14, 2011) 

 

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John J. O’Dell Realtor®
Real Estate Broker
O’Dell Realty
9530) 263-1091
jodell@nevadacounty.com

Real Estate

Mortgage Rates Are Great, If You Can Qualify!

Interest rates are near historic lows and home prices are affordable; however, many borrowers are finding they must have nearly pristine credit records and hefty down payments to get the best rates.

  • Since 2009, credit standards have become much tighter.  For borrowers, this emphasizes the importance of paying close attention to credit scores.
  • New rules unveiled last week, the result of last year’s Dodd-Frank financial-services legislation, require banks and other lenders to disclose to consumers the scores used to determine interest rates charged borrowers, or to deny credit, making it easier for borrowers to see how their credit scores affect the interest rates they pay.
  • The FICO credit scores on loans that banks are giving out and that are backed by government agencies Fannie Mae and Freddie Mac show the new reality.  Currently, the two agencies essentially finance 75 percent of all mortgages by purchasing the loans from banks, thus shaping how much it costs to borrow.
  • FICO scores range from 300 to 850.  Prior to the decline in home prices, a score of 700 to 725 was considered solid and, a borrower could expect to be approved for a “conventional” mortgage at the lowest rates.
  • From 2003 to 2006, 82 percent of Fannie Mae mortgages were for borrowers with a score between 700 and 750, but so far in 2011, only 13 percent of Fannie Mae mortgages carry that score, and just 1.7 percent have a score of 700 to 725.  This year, 75 percent of Fannie Mae mortgages are for FICO scores of 750 to 755, up from less than 5 percent before 2005.
  • These trends demonstrate the importance of understanding credit scores and ensuring credit reports are accurate.  Consumers can check their credit report at AnnualCreditReport.com.

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Thinking of buying or selling? Call or email:
John J. O’Dell Realtor® GRI
O’Dell Realty
(530) 263-1091
jodell@nevadacounty.com

Real Estate

Banks Stop Accepting Certain Mortgage Applications

 

In anticipation of the expiration of current loan limits on Sept. 30, 2011, Bank of America has decided to stop accepting conventional and government applications for loan amounts that will exceed the permanent loan amounts.  The deadline to submit loan applications was July 1.

According to an email from Bank of America, conventional loans that exceed the permanent loan limits will now be required to use non-conforming programs.

Barring Congressional action, the maximum FHA, Fannie Mae, and Freddie Mac conforming loan limit will decline to $625,500 beginning Oct. 1, 2011, from the current $729,750 limit, though the majority of counties will fall far below the $625,500 maximum.  The conforming loan limit determines the maximum size of a mortgage that FHA, Fannie Mae, and Freddie Mac government-sponsored enterprises (GSEs) can buy or guarantee.  Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan and require a higher down payment, increasing the monthly payment and negatively impacting housing affordability for California home buyers.

 

 

Thinking of buying or selling?
For all your real estate needs, call or email:

John J. O’Dell Realtor®
Real Estate Broker
O’Dell Realty
9530) 263-1091
jodell@nevadacounty.com

Real Estate

FHA Gives Jobless Homeowners One-Year Break

 

Beginning Aug. 1, the Federal Housing Administration will extend the period for unemployed homeowners to miss mortgage payments from four months to a full year, providing qualified homeowners with more time to find employment before the foreclosure process begins.

Making sense of the story

  • The new Special Forbearance program falls under the FHA’s Loss Mitigation program, which FHA-approved servicers must participate in.
  • The extended grace period only applies to FHA-backed loans and homeowners in the government’s foreclosure prevention program, the Making Home Affordable Program (MHA).
  • In addition to extending the forbearance period and removing the up-front hurdles for borrowers, the FHA also reemphasized its requirement that participating servicers conduct a review at the end of the forbearance period to evaluate the borrower for all additional, applicable foreclosure assistance programs and notify the borrower in writing whether or not he/she qualifies for any other available option.
  • If the borrower does not qualify for any foreclosure assistance option, the servicer must provide the borrower with the reason for denial and allow the borrower at least seven calendar days to submit additional information that may impact the servicer’s evaluation.
  • Housing and Urban Development, which oversees FHA, hopes private lenders and government-controlled Fannie Mae and Freddie Mac will adopt a similar policy.
  • For additional information on the program, including eligibility and requirements, please visit Read the full storyThinking of buying or selling?
    For all your real estate needs, call or email:

    John J. O’Dell Realtor®
    Real Estate Broker
    O’Dell Realty
    9530) 263-1091
    jodell@nevadacounty.com
Real Estate

Loan Modification Scams Increase

 

More home owners who are desperate to avoid foreclosure are finding themselves victims to loan-modification scams.

In the latest to grip headlines, attorneys in California — where these scams are particularly rampant — filed the state’s first class-action lawsuit against an alleged loan modification scam, part of RewireMyLoan.com. In the lawsuit, prosecutors charge that the company collected nearly $5,000 each from at least 90 victims, promising to do loan modifications and offering a 100 percent money-back guarantee. The victims say the company never did the loan modification or refunded their payments.

The majority of the victims in the lawsuit are Spanish-speaking, and while the advertising and discussions they had with the company were in Spanish, they say the contracts they signed were in English. The home owners say they were also told to not contact their bank directly or their contracts would be voided. (Read: How to Spot Foreclosure-Prevention Scams)

Scam Prevention Network
The Lawyers’ Committee for Civil Rights, government housing agencies, and other nonprofits have created the Loan Modification Scam Prevention Network to compile complaints about such fraud. From February 2010 to June 1, the network gathered nearly 15,000 complaints involving $37 million in lost money. California accounted for the majority of the losses, with 3,105 complaints filed and $11 million in losses from these scams.

For home owners who believe they were a victim of a loan-modification scam, the Loan Modification Scam Prevention Network encourages them to visit www.preventloanscams.org to file a complaint.

Source: “Lawsuit Goes After Loan-Modification Fraud,” The San Francisco Chronicle (July 1, 2011)

For all your real estate needs, call or email:

John J. O’Dell Realtor® GRI
O’Dell Realty
(530) 263-1091
jodell@nevadacounty.com