Even with continuing foreclosures, how many are started and just hang there? I know of several people who have been in their home for six months to a year and the banks have not finished the foreclosure proceedings. The market is flooded with foreclosures, so maybe they are hanging back on some of them. Here’s a related article:
“Foreclosure sales continue to drop, but foreclosure inventories remain high in many markets across the country. By the end of May, the number of mortgages that were 90 or more days delinquent, combined with the foreclosure inventory, outpaced foreclosure sales by 50:1, Lender Processing Services Inc. reports.
The biggest drop in foreclosure sales occurred in East Coast states. For example, foreclosure sales plummeted 96 percent in Washington, D.C., 80 percent in Maryland, and 79 percent in New York, according to Lender Processing Services’ monthly mortgage monitor report.
Mortgages that are 90 days or more delinquent, combined with the foreclosure inventory, totaled more than 4 million in May. Foreclosure sales at the end of May totaled 78,676.
The average time a home owner spends in foreclosure continues to get longer. More than 33 percent of home owners in foreclosure have not made a mortgage payment in more than two years.”
Unless Congress takes action, the current loan limits will expire on Sept. 30 and the cost of a mortgage could rise significantly, especially in high-cost areas such as California.
More than 30,000 California families could face higher down payments, higher mortgage rates, and stricter loan qualification requirements if conforming loan limits on mortgages backed by the Federal Housing Administration (FHA), Fannie Mae, and Freddie Mac are reduced beginning October 1, 2011, according to analysis by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).
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.
C.A.R. and the NATIONAL ASSOCIATION OF REALTORS® (NAR) have long advocated making permanent higher conforming loan limits. As a result of C.A.R.’s and NAR’s efforts, in 2008, Congress temporarily raised the conforming loan limits from $417,000 to $729,750 and has extended them annually through fiscal year 2011.
To see the impact the lower limits would have on various regions throughout the state, go to the click here
We all know that this recession we are in now is all due to our banks and Wall Street. With their haste to make as much money as possible, by reducing lending requirements, they created a housing market that had only one direction to go., down. They created a wave of foreclosures, Wall Street firms going out of business, along with some of the banks which created this mess. (An excellent analysis of what happened is in the book “Inside the Big Short, The Doomsday Machine” by Micheal Lewis)
Now, to compound this mess, banks have tighten credit requirements for home mortgages to the other extreme. What this means of course, is that it is not helping the housing market to recover.
Here’s a portion of an article appearing in the Wall Street Journal giving an example of the “new lending practices.”
“With the tightening of credit over the last few years by banks, more potential buyers find they are being shut out of home ownership, unable to obtain financing for their home purchase. And it’s not just buyers with poor credit histories being rejected for home loans–some buyers are even coming with stellar credit scores and big down payments, experts say.
For example, Amy Menell told The Wall Street Journal how a bank denied her for a home loan, despite her credit score being above 800, no debt, and having a down payment of more than 50 percent of the cost of the $400,000 home. However, Menell, who was in the process of finalizing a divorce, works as a real estate agent and didn’t have much income in 2009. While her business has picked up since then, she did not have the two years of documented income the banks wanted to process her loan application.
Other qualified buyers coming with good credit scores and credit histories are also finding themselves unable to get a home loan. Those who are having the toughest time are those who have seen their incomes drop or interrupted by a time of unemployment and self-employed applicants.
The percentage of mortgage applications rejected by the nation’s largest lenders increased last year: The country’s 10 largest mortgage lenders denied 26.8 percent of loan applications in 2010, which is up from 23.5 percent in 2009, according to an analysis by The Wall Street Journal.
The analysis showed denial rates for loans were highest in Miami, Detroit, and New Orleans. In Miami, for example, nearly 44 percent of home loan applications were denied last year (home prices in Miami have dropped by 50 percent since their 2006 peak), according to The Wall Street Journal. Lenders denied the fewest loans in Raleigh, N.C.; Bethesda, Md.; and San Jose, Calif.
An Ease in Sight?
Banks continue to be under pressure to avoid heavy losses, which fueled the tightened standards in the first place.
“Clearly we got too loose. This is a return to historical standards,” says Doug Duncan, Fannie’s chief economist.
Lenders don’t appear to have plans to ease credit soon either. Nearly four in 10 banks reported even tighter mortgage lending standards for the 12-month period ended in February, according to a survey by the Office of the Comptroller of the Currency. Only 8 percent of the banks surveyed said they had eased their credit standards”
The Grand Athens, Georgia Resort that Kenny Rogers called home until 2003 is on the market. The home is a reflection of the country star as he had a hand in just about every facet this 973-acre property’s design. ”The Gambler” designed every inch of his domain, from the 18-hole championship golf course modeled after PGA tour stops to the 12,000-square-foot main house. The sprawling plantation has amenities and space to qualify as a private resort, with a 90,000-square-foot state-of-the-art equestrian facility, two barns, two swimming pools, clay tennis courts, a spa, a conference center, three fish-stocked lakes, and a lake house. And let’s not forget the six-bedroom guest house, the four-bedroom guest house, and four one-bedroom villas. You wouldn’t expect his guests to have to stay in a hotel, would you?
Call or email for a free list of all bank owned properties in Nevada County MLS
John J. O’Dell Realtor®
Real Estate Broker
O’Dell Realty
9530) 263-1091 jodell@nevadacounty.com
Although there are a number of programs available to help homeowners who have defaulted on their mortgages keep their home, the large amount of misinformation tends to result in troubled homeowners failing to contact their lender until it is too late.
Some homeowners believe, incorrectly, that contacting their lender early in the process will draw attention to their situation and result in a quicker foreclosure. In reality, contacting the lender or servicer is an important first step, and the sooner, the better. Contacting the lender provides the homeowner with an opportunity to explain their situation and the steps necessary to deal with it.
It is a common misconception that missing one mortgage payment will lead to foreclosure. However, the foreclosure process doesn’t begin until payments are 90 days delinquent. Lenders generally have a financial interest in keeping homeowners in their homes, so making contact as early as possible could help lenders modify terms of the mortgage or devise a repayment plan.
Once homeowners are behind on their mortgage payments, it becomes challenging to dig out of the hole. Some homeowners try to solve this by depleting their savings or dipping into their retirement accounts to become current on the loan. Most financial experts advise against this.
Delinquent homeowners may think they should stop making mortgage payments to get their lender’s attention, which often isn’t the case. When possible, homeowners should stay current on their mortgage payments and continue to contact their lender on a regular basis.
Homeowners who have applied for assistance or loan modification programs in the past and were turned down are advised to reapply. Program parameters are constantly changing, so the rules might have been liberalized since the last time the borrower sought help.
A number of free, government-sponsored housing services are available through the Dept. of Housing and Urban Development (HUD). A list of HUD-approved agencies can be found at http://www.hud.gov.
Nationwide, new foreclosure cases and repossessions have dropped by a third since last fall as banks, as greater scrutiny over banks’ foreclosure procedures and more home owners fighting back in court has slowed the pace. Banks, already facing huge backlogs of foreclosures they’ve already repossessed, also may be reluctant to add on more to their inventory, experts say.
For example, In New York, experts estimate it would take lenders 62 years at their current pace to repossess the 213,000 houses now in severe default or foreclosure, according to LPS Applied Analytics, a real estate data firm. New York boasted the longest foreclosure backlog in the nation. Following behind, in New Jersey it would take 49 years, and in Florida, Massachusetts, and Illinois it would take 10 years to handle the supply of foreclosures at the current pace.
States where courts must review each foreclosure tend to have the longest delays. But in the 27 states without that requirement, foreclosures are much quicker. For example, as comparison, in California, the foreclosure backlog is three years, and in Nevada and Colorado, it’s two years.
“If you were in foreclosure four years ago, you were biting your nails, asking yourself, ‘When is the sheriff going to show up and put me on the street?’” Herb Blecher, an LPS senior vice president, told The New York Times. “Now you’re probably not losing any sleep.”
However, the banks say they is no strategy in delaying foreclosures. “Any suggestion that we have a strategy to delay foreclosures is baseless,” a spokesman for Bank of America said. Instead, one bank blamed delays in state laws governing foreclosures while others said the decline in foreclosures is the product of an improving economy.
Some times we just have dog days! - Photo courtesy of HDlost.com
A weak economy and tightened financing conditions contributed to a slowdown in California home sales and median price during May, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported yesterday.
Home sales in May declined 5.8 percent from April and 14.4 percent from the previous year, while closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 471,840 units. The statewide sales figure represents what would be the total number of homes sold during 2011 if sales maintained the May pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
“Market demand has been sluggish as would-be home buyers remain concerned about the direction of the economy. They may also be weary of delays in the buying process and difficulty in getting a home loan,” said C.A.R. President Beth L. Peerce. “This, combined with lenders putting distressed properties on the market at a more deliberate pace, is contributing to homes sitting on the market longer.”
The statewide median price of an existing, single-family detached home sold in California edged down 0.7 percent in May to $291,760 from a revised $293,800 in April. May’s median price was down 10.9 percent from the $327,460 recorded in May 2010.
C.A.R.’s Unsold Inventory Index, which indicates the number of months needed to deplete the supply of homes on the market at the current sales rate, rose to 5.4 months in May, unchanged from April, but up compared with May 2010’s 4.5-month supply.
The median number of days it took to sell a single-family home was 51.8 days in May 2011, compared with 37.8 days for the same period a year ago.
The good old banks trying to save money by circumventing proper title paper work has resulted in a legal tangle for banks. Instead, they used Mortgage Electronic Registration Systems. Recent court rulings are raising some uncertainties when it comes to Mortgage Electronic Registration Systems (or MERS), which electronically tracks and transfers millions of loans and has been in use by the mortgage industry since the 1990s.
Borrowers who have been foreclosed upon using MERS have fought back in court–with mixed success–challenging the legality of MERS and arguing that it doesn’t own the mortgage and therefore, doesn’t have the right to foreclose on them.
The industry is keeping a close watch on recent court rulings since the results could have a big impact on reshaping the mortgage industry and potentially throwing the validity of thousands foreclosures into question, The Washington Post reports. MERS holds 65 million loans in its registry.
A New York appellate court ruled last week that MERS did not have the right to foreclosure on a property it doesn’t own. However, an appeals court in California recently ruled that MERS did have the power to act on behalf of lenders. In Minnesota, lawmakers passed a law stating that MERS had the right to undertake foreclosures.
However, earlier this year, a Michigan court of appeals ruled that MERS lacks authority to foreclose. Following the court decision, the ruling practically brought closings on REOs to a halt there and called into question foreclosures already sold in the city.
In March, MERS requested banks and mortgage servicers stop using the MERS name to foreclose on homes.
“We know that MERS is a problem; we don’t know exactly what that’s going to mean,” says Adam Levitin, a Georgetown University law professor. “We still don’t have really definitive law on any of the issues involved. It’s going to take awhile before we really know the answers.”
A MERS spokeswoman disagrees. “The court decisions have overwhelmingly leaned in favor of MERS and validating MERS’s business model,” says Janis Smith, vice president of corporate communications for MERSCORP. “Overall, the record is pretty clearly established.”
How screwed up are the banks? They foreclose on a home that has no mortgage! So the attorney for the couple forecloses on the bank (really a sheriffs sale). Great!
Between “robosigning” where banks make up false mortgage notes, to not doing mortgage modifications, the banks continue the drive this country into the ground. Of course, none of the banks CEO’s responsible for this mess have gone to jail. Where do you think you and I would be if we forged mortgages?
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
A mortgage scam in which con artists send letters telling borrowers they should begin sending their mortgage payments to a fictitious company that has begun servicing their loan, is making the rounds again. Unfortunately, by the time borrowers figure out their loan has not changed servicer’s, they’ve already sent one or two mortgage payments to the fictitious company.’
Making sense of the story
According to those familiar with the scam, it typically works because most borrowers are unaware of the rules when it comes to the transfer of mortgage-servicing rights. Under the law, the current servicer is required to send a “goodbye” letter notifying the borrower that payments should be sent to a new company as of a certain date.
A week or two later, the law says the borrower should receive a second letter, which, by law, should include a welcome missive from the new servicer with the details of the mortgage payment – a breakdown among principal, interest, and escrow. The package also is likely to include a few payment coupons, if not a brand-new coupon book, and self-addressed printed envelopes for borrowers to make payments.
Both the goodbye and welcome letter should include the mortgage loan number. If either letter does not, or if the information included in one doesn’t match what’s in the other, borrowers should call their original servicers to inquire.
Borrowers only receiving one letter should be extra cautious. Even if everything appears to be standard procedure, borrowers are still advised to call the first company’s toll-free number just to be sure.
