South Orange County Blog from Bob Phillips

Foreclosures Across California Reach Eight Year Low

Initially posted by re-insider.com, on November 14th, 2014

“While California’s real estate market has remained flat throughout the year, recent changes have revealed that things may be making a turn for the best. In addition to September’s jump in sales, a new study has found that foreclosures across California have hit their lowest mark in over eight years – the latest sign that our economy is finally catching up with the housing market.
Foreclosure home
According to San Diego-based research firm DataQuick, fewer foreclosures were initiated across California in the third quarter of 2014 than any in the past eight years. This is largely an outcome of a recovering market and a declining number of toxic loans made between 2006 and 2007.

The study found that during the July-through-September period, there were a total of 16,833 Notices of Default (NoDs) recorded – 691 fewer than the second quarter of 2014 and a 17.1% drop from the same time last year.

One should also note that the recent drop in foreclosure starts is actually part of a larger trend. Prior Q3, DataQuick found that Notices of Default were declining during the second quarter of 2014 – the lowest since the fourth quarter of 2005 when only 15,337 NoDs were reported. Similarly, NoDs have dropped significantly since their peak in 2009, when a total of 135,431 NoDs were recorded.

“This home repo pipeline isn’t exactly drying up, but it sure is diminishing. Its negative effect on the overall market is only a fraction of what it was several years ago, and is really only still noticeable in some pockets of the hardest-hit markets of the Inland Empire and Central Valley,” said John Karevoll, a CoreLogic DataQuick analyst.

Do you think this is an indication of a stronger market in Q4?” ( End of re-insider.com’s article.)

From MY vantage point, it looks as though this quarter is turning out to be a fairly “normal” one for Southern Orange County. The type that frequently leads to a more robust Spring home buying season – which in this area usually starts between the last week of January, and February 15th.

If you are thinking of BUYING your next home anytime soon, there are two things to consider right now – today. First, there aren’t going to be many foreclosure houses to look for – less than 2% of available houses – and second, you’ll have much better negotiability on regular, non-distressed properties before that Spring buying season begins.

Give me a call – at (949) 887-5305 – or shoot me an email – to BobPhillipsRE@gmail.com – and let’s talk about your real estate goals.

Comments Off on Foreclosures Across California Reach Eight Year Low

Scam Alert! 3 Mortgage Modification Scams to Watch out for (And How to Avoid Them)

Scam Alert! Three Mortgage Modification Scams to Watch out for (And How to Avoid Them)As if homeowners who are facing foreclosure don’t have enough to worry about, a multitude of loan modification scam artists have invaded the internet, public files and even foreclosure notices in newspapers in hopes of targeting their next victim. By identifying the top three modification scams and learning how to avoid them, at-risk homeowners can protect themselves (and their homes).

Never Pay For Mortgage Modification Assistance

Many desperate homeowners fall victim to scam artists who offer to provide them with assistance in the loan modification process for an exorbitant fee. Many times the scam artist who promises to provide assistance will require that the homeowner pay the fee upfront, after which they will provide very little assistance or simply take the money and run. Consumers should be aware that assistance and counseling services are offered for free through a number of reputable HUD approved counseling agencies.

Avoid Transferring The Deed

One popular scam that at-risk homeowners often face is the property deed scam in which scam artists promise to purchase the home in question, agreeing to let the desperate homeowner rent it out. They suggest that turning over the deed to a borrower with a better credit rating will offer additional financing opportunities, thus preventing the loss of the home. The scammer often promises to sell the home back to the homeowner, but in reality has no intention of doing so.

Many times the scam artist will sell the home to another buyer. In some instances, the crook will collect any processing fees, take the title to the home and any equity, and then leave the home to default. It is a good idea for consumers who are approached with a property deed scam to report it to the FTC.

Ignore Unrealistic Promises

Mortgage modification scammers often make promises to do such things as negotiate a solution to the foreclosure more quickly, process mortgage payments for the consumer while the negotiation is being worked out, or even guarantee a loan modification. Since the actual lender is the only one who can agree to a loan modification, and this solution requires additional processing time, overnight fixes are almost always scams. Additionally, consumers should never make mortgage payments to anyone other than their lender.

For additional information about mortgage modification scams and how to avoid them, or to receive assistance with working out a solution to avoid foreclosure, at-risk homeowners should contact someone with distressed property training and experience. In South Orange County, California, I am just such a person.

Comments Off on Scam Alert! 3 Mortgage Modification Scams to Watch out for (And How to Avoid Them)

Orange County Housing Report: Bumping Along a Ceiling

aThe following is today’s Orange County Housing Report, from my local economist friend Steven Thomas.

Pushing the ceilingOrange County Housing Report: Bumping Along a Ceiling,  August 3, 2014

With the best time of the year to sell coming to a quick end, Orange County appreciation is coming  to an end. 

A Ceiling in Values: Sellers are learning the hard way that they can no longer arbitrarily set the price.

Buyers, sellers, REALTORS®, lenders, and everybody else involved within real estate know that there is a palpable difference in the 2014 real estate market. The number of homes fetching multiple offers is shrinking drastically. Homes are sitting on the market. The expected market time is on the rise. The active inventory has been growing all year and  just surpassed the 8,000 home mark, just a few hundred short of a long term county average.

The lesson for 2014 is that sellers cannot price their homes on a whim, on what they would like to walk away with from the sale of their home. 2012 and 2013 were completely different. In those years, values were skyrocketing. When that occurred, sellers were able to price their homes above recent sales. They dealt with multiple offers and often sold for more than their list prices. That simply is not the case anymore; yet, sellers continue to adopt that strategy and overprice their homes.

What changed? Values reached a level where buyers were no longer comfortable paying much more than the most recent sale. They wanted to pay what is “fair,” also known as the Fair Market Value. This explains why month to month appreciation has stalled. Unfortunately, news outlets across the country mainly report on year over year statistics; whereas, month to month statistics tell the real story. Orange County’s headlines highlighted a 10% increase in the median sales price year over year in June. Drill down a little bit deeper, when you remove new home sales, residential detached houses are up 6.6% and condominiums are only up 4.2%. That’s the difference in a year. Most important, month to month appreciation is flat.

With flat appreciation, the Orange County housing market is bumping along a value ceiling. And, the Autumn Market is right around the corner. Cyclically, housing cools a bit after the kids go back to school. It will cool further during the Holiday Market, from Thanksgiving through the first few weeks of the New Year.

When the market bounces along a value ceiling, occasionally there is a sale in a neighborhood that neighbors get really excited about and are lured to jump into the housing fray. Typically, they price above that sale in hopes that they can get more. They also add an additional amount leaving “room for negotiating.” Remember, this is a market where buyers do not want to pay too much for a home. So, the home sits on the market. Eventually, after one or two reductions, they arrive at or near the sales price of the home that motivated them to sell in the first place. Surprisingly, they still are unable to sell and just sit on the market longer. It could be condition, location, or upgrades, but often it is that buyers do not want to match the price of that most recent sale. After viewing similar properties, potential buyers feel that another buyer simply overpaid. That can still happen today, but just because one buyer is willing to stretch the value, the vast majority are not. The bottom line: when a home sits on the market even though it is priced at or near a recent closed sale, the price is too high.

As we bounce along a ceiling, sellers should price their homes realistically right from the start, taking into consideration the most recent sales, all pending sales, their condition, location, and upgrades. DO NOT PRICE BASED UPON OTHER LISTINGS; instead, know your competition, but price according to pending and closed sales. There are neighborhoods where every single home on the market is overpriced. In that case, instead of the lowest priced home selling, everybody will sit on the market with absolutely no success.

Active Inventory: The active inventory increased by 3% in the past two weeks and pushed past the 8,000 home mark.

8-3-14-active inventory-y-o-y

The active listing inventory added an additional 231 homes in the past two weeks and now totals 8,057. That’s the first time the inventory has been above 8,000 homes since January 2012, 2½ years ago. Thus far in 2014 the inventory has grown without pause, adding an additional 3,324, a 70% increase, and is poised to continue to increase through the end August. Keep in mind, in order for the active inventory to grow, more home need to be placed on the market than are coming off as pending sales.

Last year at this time there were 5,522 homes on the market, 2,535 fewer than today.

DemandDemand increased by 2% in the past two weeks.

8-3-14-demand

Demand, the number of new pending sales over the past month, increased by 48 now totals 2,549. After an initial small dip in demand in July, it will slightly rise in August. Last year at this time demand was at 2,707, 158 additional pending sales compared to today.

Distressed Breakdown: The distressed inventory increased by 5% in the past two weeks.

The distressed inventory, foreclosures and short sales combined, increased by 13 homes and now totals 294, its highest level since December of last year. The distressed inventory started the year at 271, so it really has not changed much. The long term trend is for it to remain at a very low level. Last month, they represented only 5% of all closed sales.

In the past two weeks, the number of active foreclosures increased by 2 homes and now totals 78. Only 1% of the active inventory is a foreclosure. The expected market time for foreclosures is 65 days. The short sale inventory increased by 11 homes in the past two weeks and now totals 216. The expected market time is 48 days and remains one of the hottest segments of the Orange County market. Short sales represent 3% of the total active inventory. ( End of Steven’s report.)

Comments Off on Orange County Housing Report: Bumping Along a Ceiling

Default Rate Falls to Historically Low Levels in Large Metros

An article by Derek Templeton, of DSNews.com, July 15th, 2014

As the unemployment rate and other economic measures continue to improve, American consumers appear to be gaining a greater ability to meet their credit obligations.

foreclosure notice

As the unemployment rate and other economic measures continue to improve, American consumers appear  to be gaining a greater ability to meet their credit obligations.

A report released Tuesday by S&P Dow Jones Indices and Experian showed a decline in default rates among five of the largest cities in the nation to historically low levels.

The national composite for all types of credit default posted 1.02% in June, its lowest reading since the organization began collecting the data ten years ago.

Consistent with recent reports that payment priorities may be shifting among Americans back to pre- downturn norms, mortgages lead the way with first mortgages clocking in at just 0.89 percent default. The default rate at second mortgages was even lower at 0.57 percent.

“Consumer credit default rates continue to drift lower and have reached a historical low,” says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices.

“Recent economic reports are encouraging with the unemployment rate now at a six year low and strong job creation in recent months. The continued declines in consumer default rates confirm other indicators of an improving economy. Credit standards for mortgage loans continue to be somewhat restrictive and may be contributing to low first mortgage default rates”.

Of the large metropolitan areas surveyed, Dallas, Texas was the only city to actually see a rise in default levels. However, the slight increase comes on the heels of the city’s lowest rate of default recorded in the history of the survey the previous month.

Concerns about the direction of the economy and the effect that is has on the credit market are not unfounded but even as the housing recovery slows, the lack of significant default in the market can only be seen as a positive indicator.

Comments Off on Default Rate Falls to Historically Low Levels in Large Metros

Foreclosure Inventory Continues to Shrink in May

An article by Colin Robins, of DSNews.com  June 24, 2014

foreclosure-signBlack Knight Financial Services released its “First Look” at May Mortgage data, which found that foreclosure inventory declined to its lowest level since July 2008. As a percentage of total inventory, foreclosure pre-sale inventory is 1.91 percent, down 5.56 percent month-over month.

The percentage of total U.S. foreclosure pre-sale inventory is down 37.23 percent year-over-year.

Foreclosure starts, however, are creeping back upwards. Foreclosure starts totaled 86,300 for the month of May, an increase of 9.52 percent from April. Yearly, foreclosure starts remain down by 26.11 percent. Overall delinquency rates remained steady, down a mere 0.01 percent to 5.62 percent in May.

The number of properties that are 30 days or more past due but not yet in foreclosure totaled roughly 2.8 million, an 18,000 property increase from the previous month yet a decline of 204,000 from the previous year.

Properties 90 days or more past due totaled 1.1 million, down monthly and yearly by 18,000 and 166,000 respectively. Properties that are 30 days or more past due or in foreclosure totaled 3.8 million.

The top five states by non-current percentage include: Mississippi (13.75 percent); New Jersey (12.62 percent); Florida (11.28 percent); New York (10.91 percent); and Louisiana (10.66 percent)

The bottom five states by non-current percentage include: North Dakota (2.5 percent); South Dakota (3.61 percent); Colorado (3.82 percent); Montana (3.96 percent); and Alaska (4.06 percent). ( End of Colin’s article.)

From Bob Phillips, regarding just Orange County, California.  Here’s some local information on the subject from my good friend Steven Thomas, who produces a bi-weekly “Orange County Housing Report.”

Distressed BreakdownThe distressed inventory dropped to its lowest level since last August.

The distressed inventory, foreclosures and short sales combined, decreased by 7 homes and now totals 246. In 2014, the distressed inventory has not changed much, starting the year at 271. The long term trend is for it to remain at a very low level. Last month, they represented only 6% of all closed sales.

In the past two weeks, the number of active foreclosures increased by 3 homes and now totals 63. Less than 1% of the active inventory is a foreclosure. The expected market time for foreclosures is only 39 days. The short sale inventory decreased by 10 homes in the past two weeks and now totals 183. The expected market time is 38 days. Short sales represent 2.5% of the total active inventory.” ( End of Steven’s excerpt.)

Are YOU ( Or is someone you know.)  having trouble making your mortgage payments?

I have been assisting homeowners having difficulty with their mortgages for the past 5 years, and have both extensive training, ( As a CDPE, Certified Distressed Property Expert.)  and year’s of “in the trenches” experience.  If you, or someone you know, is having difficulty making their mortgage payments, give me a call or text at 949-887-5305, or shoot me an email at BobPhillipsRE@gmail.com.  I have solutions – let’s talk about them.

Comments Off on Foreclosure Inventory Continues to Shrink in May

May Housing Scorecard Shows Progress in Equity and Home Sales

An article by Colin Robins, of DSNews.com, dated June 13th, 2014:

Perfect-10May Housing Scorecard Shows Progress in Equity and Home Sales

The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury released the May edition of the Obama Administration’s Housing Scorecard on Friday. The government report showed progress, noting growth in key indicators such as increasing equity and a rebound in the sale of new and existing homes.

According to the Federal Reserve, homeowner equity was up nearly $795 billion in Q1 2014, totaling more than $10.8 trillion. May’s figure was the highest level since the second quarter of 2007. Equity has continued to rise since the beginning of 2012, up 73 percent (nearly $4.6 trillion) through the first quarter of 2014.

“May’s Housing Scorecard shows that the housing market recovery is picking up after the harsh winter months,” said HUD assistant secretary, Katherine O’Regan. “More homeowners have positive equity, foreclosures continue their downward trend, and sales of new and existing homes are rebounding. While these are all good signs, it’s clear that we must remain committed to helping homeowners as they recover from the worst housing recession since the Great Depression.”

HUD cited figures from CoreLogic, which found that the number of underwater borrowers dropped 48 percent, lifting more than 5.8 million homeowners above water from 2012 to the first quarter of 2014. Despite first quarter gains of 300,000 homeowners who returned to positions of positive equity, approximately 12.7 percent of residential properties with a mortgage are still underwater.

HUD also celebrated new home sales, which were up 6.4 percent to 433,000 in April. Foreclosure starts continued on a downward slope, down 10 percent from the previous month and down 32 percent year-over-year. Foreclosures are the lowest they have been since December 2005.

Existing-home sales rose for the first this year. HUD cited a National Association of Realtors report that found existing home sales sold at a seasonally adjusted annual rate (SAAR) of 4.65 million in April, up 1.3 percent from March. However, existing-home sales are still 6.8 percent below the 4.99 million pace seen a year earlier.

“The standards set by the Making Home Affordable program have significantly changed the mortgage servicing industry,” said Treasury Acting Assistant Secretary Tim Bowler. “Treasury is committed to holding servicers accountable to these standards, and as a result has seen continued improvement by the largest servicers.”

HUD noted that foreclosure mitigation programs continue to provide relief for distressed homeowners—more than 8.3 million mortgage modification and other homeowner assistance actions were completed between April 2009 and April 2014.

HUD commented, “More than 2.0 million homeowner assistance actions have taken place through the Making Home Affordable Program, including nearly 1.4 million permanent modifications through the Home Affordable Modification Program (HAMP), while the Federal Housing Administration (FHA) has offered 2.3 million loss mitigation and early delinquency interventions through April.” ( End of Colin’s article.)

Comments Off on May Housing Scorecard Shows Progress in Equity and Home Sales

April Home Sales Gain 20% For Month But YTD Sales Lowest Since 2008

The following is an excerpt from the latest report from PropertyRadar, a California based analyzer of property data:

April Home Sales Gain 20% For the Month But YTD Sales Lowest Since 2008

which-direction     California single-family home and condominium sales in April 2014 were up 20.0 percent for the month but were down 13.3 percent from April 2013. Despite April gains, year-to-date sales volume was at its lowest level since 2008.

     For the month, both distressed and non-distressed property sales posted gains. April 2014 distressed property sales gained 13.1 percent from March, while non-distressed property sales were up 21.8 percent.

     “Despite back-to-back double digit sales gains in both March and April, total sales volume since January continues to lag sales in 2013,” said Madeline Schnapp, Director  of Economic Research for PropertyRadar. “In fact, what is surprising to me is that year-to-date sales are the lowest since 2008.”

     The April 2014 median price of a California home hit its highest level in six years, rising 7,500 dollars, or 2.0 percent, to 376,500 dollars from 369,000 dollars in March. On a year-ago basis, median home prices jumped 14.1 percent. Driving the month-over-month price increase in April was a 21.8 percent increase in the sales volume of higher priced non-distressed properties.

     “Despite lower sales volume, the median price of a California home continues to march higher,” said Schnapp. “The rise in median home prices is being driven by the change in mix between the sales of distressed properties versus sales of non-distressed properties. Higher priced non-distressed property sales now dominate monthly sales numbers, so it should come as no surprise that median prices are up.

In other California housing news:

  • Underwater homeowners continue to impart negative headwinds to the California real estate recovery. In April, nearly 1.2 million California homeowners, or 13.5 percent remain underwater.
  • Institutional Investor LLC and LP purchases gained 7.0 percent for the month but are down 36.9 percent from April 2013. Purchases are up 19.3 percent since January 2014. Despite year-to-date gains, LLC and LP purchases are down 42.2 percent from their December 2012 peak.
  • For a second consecutive month, cash sales posted double digit gains, up 12.3 percent for the month but down 21.4 percent on a year ago basis. Since the beginning of the year, cash sales are up 33.1.
  • Flip sales gained 7.4 percent for the month but were down 21.5 percent for the year.
  • Foreclosure sales gained 2.9 percent in April from March but are down 32.4 percent year-over-year. The April gain is statistically insignificant, likely due to the extra weekday in April compared to March.
  • Foreclosure inventories continue to trend gradually lower, down 1.1 percent for the month and down 17.6 percent for the year.

     “While most real estate analysts are forecasting a robust real estate recovery for the rest of 2014, our data suggests anemic sales growth,” said Schnapp. “Elevated negative equity, high prices and low inventory are depressing sales volumes and crowding out potential buyers.”

Real Property Report Methodology

California real estate data presented by PropertyRadar, including analysis, charts and graphs, is based upon public county records and daily trustee sale (foreclosure auction) results. Items are reported as of the date the event occurred or was recorded with the California county. If a county has not reported complete data by the publication date, we may estimate the missing data, though only if the missing data is believed to be 10 percent or less of all reported data.

Here’s the entire report:  http://www.propertyradar.com/reports/real-property-report-california-april-2014

Comments Off on April Home Sales Gain 20% For Month But YTD Sales Lowest Since 2008

Black Knight: 1 in 10 Borrowers Underwater

An article by Colin Robins of DSNews.com, May 5th, 2014:

next-exit“In Black Knight Financial Services’ latest Mortgage Monitor Report, the company found that only one in ten Americans are still underwater, down from one in three in 2010. Overall, the company’s look at March data reflected a shifting landscape. As home prices have risen over the past two years, many distressed loans have worked their way through the system and the percentage of Americans with negative equity has declined considerably.

“Two years of relatively consecutive home price increases and a general decline in the number of distressed loans have contributed to a decreasing number of underwater borrowers,” said Kostya Gradushy, Black Knight’s manager of Loan Data and Customer Analytics.

“Looking at current combined loan-to-value (CLTV), we see that while four years ago 34 percent of borrowers were in negative equity positions, today that number has dropped to just about 10 percent of active mortgage loans,” Gradushy said.

Gradushy references the 10.1 percent negative equity average, but what states homeowners reside in paint a clearer picture of negative equity across the spectrum. Judicial states have a higher negative equity rate at 13.4 percent, compared to the 7.9 percent rate experienced in non-judicial states. ( California is usually a non-judicial state.)

Regardless, Gradushy notes that both judicial and non-judicial states have experienced declines. “Overall, nearly half of all borrowers today are both in positive equity positions and of strong credit quality—credit scores of 700 or above. Four years ago, that category of borrowers represented over a third of active mortgages,” Gradushy said.

The total delinquency rate is 5.37 percent, the lowest since October 2007 according to Black Knight. Month-over-month, delinquency rates have declined to 7.57 percent and are down yearly 16.29 percent in March.

The total U.S. foreclosure pre-sale inventory stands at 2.07 percent, the lowest figure since October 2008. Inventory rates are down 36.69 percent year-over-year.

Black Knight had more positive news in its Mortage Monitor Report: leading indicators, such as foreclosure starts, new problem loan percentage, 90-day defaults count, and 30 to 60 roll count are all down heading into the second quarter.

The company offered that the 2013 population of loans was “the best vintage on record,” but the statement belies the fact that higher credit restrictions severely hampered new originations for lower credit borrowers.

The top five states with the highest total non-current loans were Mississippi (13.4 percent), New Jersey (12.9 percent), Florida (12.1 percent), New York (11.1 percent), and Maine (10.6 percent).

Excluding Mississippi, the remaining four states are judicial states, suggesting the longer timelines required to resolve foreclosures are impacting non-current loan rates, depressing the market’s ability to quickly clear the remaining backlog in foreclosure pipeline.” ( End of Colin’s article.)

From Bob Phillips:   While foreclosure activity in South Orange County is WAY down, there are still a small number of home owners still struggling with their monthly payments, while not having enough equity in their homes to sell, under normal circumstances.  If you, or someone you know, is still struggling with their mortgage payments, with a loan that is higher than the value of their home, there are alternatives available.

You might be able to refinance to a lower rate and payment, or may be able to modify the loan to a lower amount, while also lowering your payments, or you might be able to do a short sale, to get out from under the weight of such a mortgage.  I am trained and experienced in helping find such solutions, and provide such assistance at NO cost to you.  If you are seeking a solution, drop me a line, or give me a call.  Chances are excellent that I can help.

Comments Off on Black Knight: 1 in 10 Borrowers Underwater

When rising homes prices are not enough

An article by Brena Swanson, of HousingWire.com, January 28, 2014

next-exitWhen rising homes prices are not enough. Positive equity is not necessarily a barrier to foreclosure

Although rising home prices have pushed many homeowners out of negative equity, escalating values are not a panacea    for all distressed borrowers.

A growing percentage of borrowers are now entering foreclosure with positive equity in their homes, a new report from Fitch Ratings claims.

According to the study, the percentage of borrowers entering this process with equity has roughly doubled in the last two years.

While equity continues to play a significant role in borrower payment behavior, income and the ability-to-pay also remain key factors.

In September 2013, RealtyTrac discovered that 24% of all homeowners who are in some stage of foreclosure have at least some positive equity built up. By December 2013, that number continued to rise and 31% of people in the foreclosure process were struggling despite the presence of positive equity.

“One of the things that stood out is that the percentage of homeowners in foreclosure who have positive equity is increasing,” said Daren Blomquist, vice president atRealtyTrac. “That was even more surprising because that equity is a lifeline that homeowners can use to avoid foreclosure.”

Many of the borrowers with equity are unable to sell their properties because the proceeds of the sale would not be enough to cover the mortgage amount, the closing costs and the backlog of missed payments.

“Loans entering foreclosure today have missed roughly two years of payments on average, more than double the pre-crisis, long term average,” Fitch Ratings said.

Another factor is that the composition of borrowers entering foreclosure is changing. The percentage of loans entering foreclosure, which had been cash-out refinance at origination increased steadily since 2008, and now account for 50% of the total.

Due to today’s tighter loan underwriting and origination guidelines, borrowers are unable to tap the equity in their homes to cover expenses.

“Also, the loan-to-value and cash-out dollar limits are significantly lower than what was available during peak-vintage years and, despite the improved equity situation, few of these delinquent borrowers could materially benefit from further cash-out refinancings,” Fitch Ratings said.

Approximately half of all loans that recently entered foreclosure have been unsuccessful in at least one prior loan modification. In addition, the percentage of loans entering foreclosure that had been underwritten to subprime guidelines is increasing.  

Fitch Ratings did emphasize that there is a chance some portion of borrowers currently in the foreclosure process obtained additional and/or secondary financing subsequent to the origination of their first liens, which could be factoring into their ability to pay.

“I think it is hard to know if this is a glass half full or glass half empty type thing. These are homeowners who now have a lifeline to avoid foreclosure. But the other side of the coin is just that equity is not enough to prevent foreclosure,” Blomquist said.

“I think the real question is are these homeowners that just do not know or are they homeowners that are in such a tough situation even equity is not going to help them avoid it,” he explained.”  ( End of Brena’s article.)

From Bob Phillips:  Looking for solutions?  I am completely trained, and experienced, with distressed property situations, whether helping find a lender who might be able to refinance you, help you with a possible loan modification, or to get your property sold, in a way that satisfies all the lenders, and affords you some dignity of not having to go through a foreclosure.  I have been able to stop foreclosures sales with as little as a week to spare.  In many cases, my clients have been able to emerge from such scenarios with some cash incentives to move, and/or an ability to buy another home in as little as one year.

If you are having difficulty with your mortgage, there may be options you’re not aware of.  Give me a call, and let’s see if we can solve your dilemma.

Comments Off on When rising homes prices are not enough

What’s in Store for Housing in 2014, Part 1

From Orange County’s Rick Sharga, of Auction.com

Many economists and market observers have suggested the market is poised for continued growth as the recovery enters its third year, and there are positive elements in play that provide some reasons for optimism.

Recent loan vintages continue to perform at levels better than historical norms—the default rates on loans from 2011-2013 are virtually non-existent. This has essentially shut off the pipeline of distressed assets, finally allowing the industry to work through the backlog of seriously delinquent loans and loans already in the foreclosure process.

States with non-judicial foreclosure processes have had remarkable success in clearing out the inventory of distressed properties, which is one of the factors driving the housing rebound in states like California and Arizona.

Not coincidentally, foreclosure activity has been declining as well, and this is likely to continue throughout 2014. Unprecedented levels of short sales have been one of the reasons for the decline in foreclosures—every short sale represents one less REO coming to market. And the billions

of dollars of non-performing loan sales have connected distressed borrowers with special servicers, who have managed to modify tens of thousands of loans, preventing more foreclosures.

Investor activity at the low end of the market has had two significant effects: first, investors have gobbled up virtually all available REO homes, and begun to purchase rental properties via short sales and trustee sales.

Second, they’ve helped accelerate home price appreciation, particularly in many of the markets that were hardest hit during the downturn. This, in turn, has dramatically reduced the number of homeowners in a negative equity position, dropping the number of homes in the so-called “shadow inventory” to much more manageable levels.

As home prices have risen, more non-distressed properties have begun to enter the market, helping to ease the inventory shortage of existing homes, and dropping the extremely high percentage of distressed home sales to more reasonable levels than we’ve seen in the past seven or eight years.

Builders have noticed the drop-off in distressed property sales and limited inventory, and housing starts for single-family homes have risen dramatically in the last months of 2013.

So…home sales are up, prices are up, inventory is improving, foreclosures are dropping, and homebuilding is awakening from its long hibernation. What’s there to be bearish about?

For those of you looking for cautionary notes going into 2014, I offer two items: jobs and loans.

Rick Sharga is EVP for Auction.com. Look for the second part of his 2014 commentary on Monday.

Comments Off on What’s in Store for Housing in 2014, Part 1

%d bloggers like this: