Signup for our Newsletter

Signup for our newsletter and get news and updates about Real Estate investments and the Real Estate Market.
Name:
Email:

Tags

Recent Articles

Freddie Mac: 30 Year Mortgages Rates fall to series record low

Aug 12, 2010 | No Comments | Sean Mills

After sitting on the sidelines for the past years with regards to homeownership I decided to take the plunge again.  Interest rates are as low as anyone can remember seeing in the past 50 plus years.  Homes, in certain areas, are selling for 30 to 50 cents on the dollar as opposed to the market highs [...]

After sitting on the sidelines for the past years with regards to homeownership I decided to take the plunge again.  Interest rates are as low as anyone can remember seeing in the past 50 plus years.  Homes, in certain areas, are selling for 30 to 50 cents on the dollar as opposed to the market highs on the past 5 years.  Fannie, Freddie and even HUD have record levels of inventory of SFRs sitting on their books.  As all the media coverage has highlighted we are not dashing forward on the recovery the way the federal government had hoped.  Stocks fell several hundred points yesterday due to the coverage of these statements from the Fed chairman Mr. Ben Bernake.  Sit back put your feet up people we are going to be here for a while.  A jobless recovery with massive federal government incentives is not the answer.  You can’t eat healthcare and you can’t tuck your kids in at night to this poorly crafted cleverly cloaked insurance company bailout.  Sure this is a rant but what the hell I have been gone a while, enjoy the read and beware I am back posting.-Sean

Freddie Mac said Thursday the 30-year fixed-rate mortgage average fell to record low of 4.44% with an average 0.7 point for the week ending Aug. 12. In the previous period, the average was 4.49% …

This calls for a long term graph …

30 year mortgage rates Click on graph for larger image in new window.

This graph shows the 30 year fixed rate mortgage interest rate based on the Freddie Mac survey since 1971.

The decline in mortgage rates is related to the weak economy and falling Treasury yields. Rates will probably fall again this week with the Ten Year Treasury yield down to 2.7%.

Note: this series only goes back to 1971. Mortgage rates were at or below 5% back in the 1950s.

Source Article

Housing: The Best Leading Indicator for the Economy

Feb 24, 2010 | No Comments | Sean Mills

Of course this is contrary to what the National Association of Realtors is saying, but you make the decision.-Sean
Historically the best leading indicator for the economy (and employment) has been housing. I’ve been writing about this for years. For a great summary paper, see Professor Leamer’s presentation from the 2007 Jackson Hole Symposium: Housing and [...]

Of course this is contrary to what the National Association of Realtors is saying, but you make the decision.-Sean

Historically the best leading indicator for the economy (and employment) has been housing. I’ve been writing about this for years. For a great summary paper, see Professor Leamer’s presentation from the 2007 Jackson Hole Symposium: Housing and the Business Cycle

For housing as a leading indicator, I use Residential Investment (quarterly from the BEA’s GDP report), and monthly data on Housing Starts and New Home sales from the Census Bureau, and builder confidence from the NAHB.

Read More » »

California Housing Losses by County and City

Feb 11, 2010 | No Comments | Sean Mills

I came across this on Patrick.net and could not pass it up. -Sean
California Housing Losses By County and City

I came across this on Patrick.net and could not pass it up. -Sean

California Housing Losses By County and City

Read More » »

Bad bets: The condo meltdown in Las Vegas mirrors Miami’s

Dec 29, 2009 | No Comments | Sean Mills

Though Las Vegas’ problems are on a much smaller scale, the boom and bust is fairly similar. Some blame South Florida developers, in part, for whipping up the frenzy.

Photos

BY MONICA HATCHER

mhatcher@MiamiHerald.com

LAS VEGAS — With foreclosures soaring and home prices in the tank, Miami and Las Vegas often compete for the dubious distinction of being [...]

Though Las Vegas’ problems are on a much smaller scale, the boom and bust is fairly similar. Some blame South Florida developers, in part, for whipping up the frenzy.

BY MONICA HATCHER

mhatcher@MiamiHerald.com

LAS VEGAS — With foreclosures soaring and home prices in the tank, Miami and Las Vegas often compete for the dubious distinction of being the nation’s hardest hit condo market.

Just a few years ago the two cities shared a reputation as invincible boom towns. Now both real estate markets are climbing out of an abyss of stalled condo developments, spiraling foreclosures and stymied sales.

Trying to figure out which is the biggest real estate loser isn’t so easy. But comparing the two markets puts into perspective just how unprecedented Miami’s condo explosion was.

“They built less in Las Vegas than in Miami,” but there are fewer potential buyers, said Marty Burger, president and chief executive of Artisan Real Estate Ventures in Las Vegas.

Vegas condo owners like Kathy Riggle, a retiree from Tucson, who bought a condo conversion sight unseen for $180,000 during the boom, have watched in disbelief as values have dropped by more than half.

“Will Rogers once said, `Buy land because they ain’t making any more of it.’ We got caught up in it like a lot of people,” Riggle said.

Her unit, now valued at $49,000, is in foreclosure because she can no longer rent it for enough to cover the mortgage.

Las Vegas analysts and builders blame South Florida developers, as well as other out-of-market players, for helping whip up the condo mania in the nation’s gambling mecca.

During the the boom, Miami development companies launched full-scale assaults on the Vegas market — complete with cocktail parties (hosted by gorgeous models) and million-dollar sales centers.

The developers dreamed of expanding their empires on the new Vegas condo frontier.

They figured frequent visitors to Las Vegas from Canada and the mega-population hubs of Southern California would buy second homes rather than continue paying for high-priced hotel rooms.

Faulty assumption, said Richard Lee, a Las Vegas analyst and vice president with First American Title Company.

And here’s another false perception the Vegas condo boom was built on: Locals, tired of traffic and long commutes, would seek a more urban lifestyle closer to the action on the Vegas Strip.

“There was no real demand that you could point to,” said Jack Winston, a consultant with Goodkin Consulting who cautioned several South Florida developers about their ambitious Las Vegas plans. “The people in Las Vegas, if they want to gamble, they have their own casinos in the suburbs. Permanent residents rarely go down to the strip.”

Just as in South Florida — hemmed in by the Everglades and the ocean — the vertical push out West was propelled by the belief that developable land was running out. Although Las Vegas is surrounded by empty desert, much of it is federally owned and off limits to development.

“Outside developers came here and really misjudged this market,” said Irwin Molasky, a veteran Las Vegas real estate developer, who also built the 84-unit Park Place condominium that sold out in 2001. “It is not a Miami market. We don’t have the South American trade, the New York trade, and they just thought, if you build it, it will come.

“And, unfortunately, they turned out to be wrong.” he said.

Aventura-based Turnberry Associates was one of the first to go vertical in Las Vegas with the four-tower Turnberry Place project. It rapidly closed out 770 units and made tremendous profits.

Others tried to mimic them.

“It was like the gold rush after that,” said Bruce Weiner, president of Turnberry Ltd., the residential division of Turnberry Associates.

But condos weren’t the only buildings sprouting on the Vegas skyline. There was also a casino building spree that pushed construction and labor prices through the roof, forcing dozens of developers to shelve plans. In the end, a fraction of what had been proposed actually made it out of the ground.

PROJECTS STALLEDIn Las Vegas, only 8,300 condominiums of 29,000 residential condo units planned since 1999 were built, most of them around the Strip. Only 13 high-rise projects, comprising 21 towers, went up. Six were Turnberry’s.

 

Another 4,800 units are stalled in their tracks or otherwise yet to be completed, including almost 900 residential units in the vaunted CityCenter development, a $9 billion mixed-use project of shimmering hotels, condominiums and retail space that sits on 68 acres adjacent to the strip. The units are scheduled to begin closings in the first quarter of the new year.

As in South Florida, several developers were caught mid-construction when the market froze. Others, like Turnberry, which finished the two-tower Turnberry Towers in 2007, were stuck with unsold units.

“We were about 50 percent sold out in the second tower when Armageddon set in,” Weiner said. Turnberry’s partner in the venture, Prudential Real Estate Investors, ended up paying off the banks and taking ownership of the project, which still has about 250 of 636 units unsold, he said.

Another Turnberry project, the $3 billion Fountainebleau Las Vegas, with its 1,000 condo/hotel units, filed for bankruptcy in June.

PERFECT TIMINGJorge Perez of Miami’s Related Group, sensing an impending market implosion, pulled out at the last minute. He said his decision to cancel plans for a $3 billion mixed-use project called Las Ramblas was one of the smartest he ever made.

 

“The market was clearly showing signs of decline and the demand for construction services was so great that construction prices had been inflated to the point of making our project unfeasible,” Perez said in an e-mail. “Instead of taking the immense risk, I decided to sell the land at a huge profit.”

Perez also nixed ICON Las Vegas, a separate two-tower project in which three-quarters of the 502 units were pre-sold.

His timing was not as good with ICON Brickell, his $1 billion mega-condo in the 400 block of Miami’s Brickell Avenue. Although the project was completed in 2009, only about 100 sales in the 1,800-unit towers have closed. Perez has recently suggested that he may soon turn the project over to lenders in a “friendly foreclosure.”

Unlike the bulk of Miami’s new condominiums, which are clustered around the downtown area in stunning high-rise towers, most of the new Las Vegas projects are mid-rise buildings and condo/hotels perched on top of casino hotels.

In that sense, the problems plaguing the Las Vegas market have been less visible than the darkened condo towers of Miami and are obscured by massive LCD screens and the glitz of surrounding buildings.

Several real estate watchers estimated at least 1,000 Las Vegas units remain unsold, excluding apartments in CityCenter and other condo hotels. About 4,800 additional existing townhomes and condos also were for sale in November, according to the Greater Las Vegas Association of Realtors.

Since the condo model was relatively untested in Las Vegas, the volume of building was huge. But Miami’s building boom was far, far more expansive.

During the boom, developers had filed plans to build 85,000 new units throughout Miami-Dade County. The final count, according to Bal Harbor-based research firm Condo Vultures, has been about 23,000 units since 2003, more than double the amount built in the previous 40 years.

In the greater downtown area, where most new construction is located, developers still had almost 8,500 units to sell at the end of September. There are an additional 16,700 existing condo and town homes listed around Miami-Dade County as well.

Miami is burning off its excess supply of condos nearly twice as quickly as Las Vegas. The median price for an existing condo in Las Vegas stood at $72,500 in November and $149,000 in Miami-Dade.

Thousands of foreign investors, many from Latin America and with long-held ties to South Florida, have helped jump-start new condo sales. Although its just as hard to get a condo loan here as in Las Vegas, Las Vegas does not have hordes of foreign buyers willing to pay cash.

Also, lenders have begun allowing South Florida developers to sell units for less than the amount needed to repay their loans. That lowers prices for buyers.

Bulk buys, or the purchase of large blocks of condos for deep discounts by investors, have also taken off in Miami but not in Las Vegas.

“They haven’t gotten to the point of capitulation yet in Las Vegas,” said Peter Zalewski, a consultant with Condo Vultures. Burger, of Nevada-based Artisan Real Estate Ventures and also the leader of Related’s ICON Las Vegas project, said prices are all over the lot in Las Vegas — from more than $1,000 a square foot at CityCenter to $80 a square foot. Not even Miami, where new construction maxes out at about $500 per square foot, matches the lofty prices of CityCenter.

“There is a lot of cash out there ready to buy bulk, but they are ready to buy bulk at much cheaper price than developers and banks are willing to sell for right now,” Lee said.

Burger and partner John Tippins, a broker with NorthCap Commercial property, are among them. Caught in the stare-down, they decided to use their expertise in managing, selling and leasing Las Vegas condos still held by developers.

“We said, since we can’t buy the units at the moment, let’s keep our foot in the door,” Tippins said. “We think we can do a better job operating these buildings than some outside company.”

As for which market will mend more quickly, most analysts said it’s hard to tell.

For Weiner, so many unsold condos in South Florida will be tough to sell off.

But “as bad as it is,” he said, “I think South Florida will absorb its condos probably as fast, if not faster, than Las Vegas.”

Source Article

Foreclosures Continue to Put a Damper on Home Prices

Nov 11, 2009 | No Comments | Sean Mills

Funny thing is there is still a massive log jam of NOD/auction homes not making it to the market nor are they going back to the lenders.  The % of postponed auction properties ranges from 91-95% depending on the city and county here in most southern California markets.  How it will loosen up or when [...]

Funny thing is there is still a massive log jam of NOD/auction homes not making it to the market nor are they going back to the lenders.  The % of postponed auction properties ranges from 91-95% depending on the city and county here in most southern California markets.  How it will loosen up or when it will loosen up is anyone’s guess.  There is a lot of speculation with individual and group investors buying to flip which makes me think “hey is that how we got here in the first place?”  Unemployment at record levels, job loss still topping the daily news stories, national healthcare plan proposed..hey it is a great time to speculate.-Sean

Home prices continued to decline across the nation as sales of heavily discounted foreclosed properties weighed down the market.

Median prices of existing homes fell in 123 of 153 metropolitan areas during the third quarter compared with a year earlier, according to the National Association of Realtors. The national median price was $177,900, down 11.2% from the third quarter of 2008.

Read More » »

FHA Digging Out After Loans Sour

Nov 10, 2009 | No Comments | Sean Mills

Last fall, as the financial system was teetering and the biggest banks were tightening credit, Karen DeForte couldn’t find a lender to refinance the two mortgages on her New York home, until she received a phone call from Lend America.
Most banks rejected Ms. DeForte because her debt level was too high and her credit score [...]

Last fall, as the financial system was teetering and the biggest banks were tightening credit, Karen DeForte couldn’t find a lender to refinance the two mortgages on her New York home, until she received a phone call from Lend America.

Most banks rejected Ms. DeForte because her debt level was too high and her credit score too low. But Lend America put Ms. DeForte into a $402,000 loan backed by the Federal Housing Administration, a New Deal-era agency that Washington and Wall Street were relying upon to pick up the slack in the mortgage market as private lenders pulled back. Ms. DeForte fell behind on payments six months later and is seeking a loan modification. Taking the loan was “a stupid mistake,” the 46-year-old office manager said.

Source Article

Read More » »

Another Home Buyer Tax Credit Update

Oct 28, 2009 | No Comments | Sean Mills

Sorry there have been no posts lately I have been traveling and have been sick I will resume my normal posts.-Sean
(Calculated Risk) 
Yesterday I heard a compromise had been reached on extending and expanding eligibility for the home buyer tax credit, and that the housing tax credit would be attached to the extension of unemployment benefits, [...]

Sorry there have been no posts lately I have been traveling and have been sick I will resume my normal posts.-Sean

(Calculated Risk

Yesterday I heard a compromise had been reached on extending and expanding eligibility for the home buyer tax credit, and that the housing tax credit would be attached to the extension of unemployment benefits, and that the Senate would vote today – and a House vote would follow shortly.

Hold on …

Albert Buzzo at CNBC reports: Senate Vote On Home-Buyer Tax Credit Unlikely Today. Buzzo says there is “no chance” the Senate will vote today on the home buyer’s tax credit.

There was hope last night that a vote on one of several versions might be voted on Wednesday but a battle over legislation extending unemployment benefits is taking priority and right now there’s “no agreement” on that issue …CNBC’s Diana Olick provides the same details that I heard on the tax credit: A Compromise on Home Buyer Tax Credit? and adds:

[T]here may have been a bit of a revolt among Democrats who didn’t want the controversial measure attached to the Unemployment Insurance bill.And from Andy Sullivan and Corbett Daly at Reuters:

Reid had wanted to attach a bill to extend the homebuyer credit as an amendment to a bill to lengthen insurance benefits for unemployed workers. The Senate voted 87-13 on Tuesday to take up the insurance benefit bill, but did not attach the homebuyer tax credit to the measure as Reid had wanted.

Despite that apparent roadblock, Senate Finance Committee Chairman Max Baucus, who has been involved in negotiations over the tax credit, told Reuters late on Tuesday that he expected the Senate would vote on the bill sometime this week.As Ms. Olick concluded: “Stay tuned. It could all change dramatically.” 

Yesterday I heard a compromise had been reached on extending and expanding eligibility for the home buyer tax credit, and that the housing tax credit would be attached to the extension of unemployment benefits, and that the Senate would vote today – and a House vote would follow shortly.

Hold on …

Albert Buzzo at CNBC reports: Senate Vote On Home-Buyer Tax Credit Unlikely Today. Buzzo says there is “no chance” the Senate will vote today on the home buyer’s tax credit.

There was hope last night that a vote on one of several versions might be voted on Wednesday but a battle over legislation extending unemployment benefits is taking priority and right now there’s “no agreement” on that issue …CNBC’s Diana Olick provides the same details that I heard on the tax credit: A Compromise on Home Buyer Tax Credit? and adds:

[T]here may have been a bit of a revolt among Democrats who didn’t want the controversial measure attached to the Unemployment Insurance bill.And from Andy Sullivan and Corbett Daly at Reuters:

Reid had wanted to attach a bill to extend the homebuyer credit as an amendment to a bill to lengthen insurance benefits for unemployed workers. The Senate voted 87-13 on Tuesday to take up the insurance benefit bill, but did not attach the homebuyer tax credit to the measure as Reid had wanted.

Despite that apparent roadblock, Senate Finance Committee Chairman Max Baucus, who has been involved in negotiations over the tax credit, told Reuters late on Tuesday that he expected the Senate would vote on the bill sometime this week.As Ms. Olick concluded: “Stay tuned. It could all change dramatically.”

Homes: About to get much cheaper

Oct 21, 2009 | No Comments | Sean Mills

(Yahoo) 
If you thought home prices were bottoming out, you may be wrong. They’re expected to head a lot lower.
Home values are predicted to drop in 342 out of 381 markets during the next year, according to a new forecast of real estate prices.
Overall, the national median home price is predicted to drop 11.3% by June [...]

(Yahoo) 

If you thought home prices were bottoming out, you may be wrong. They’re expected to head a lot lower.

Home values are predicted to drop in 342 out of 381 markets during the next year, according to a new forecast of real estate prices.

Overall, the national median home price is predicted to drop 11.3% by June 30, 2010, according to Fiserv, a financial information and analysis firm. For the following year, the firm anticipates some stabilization with prices rising 3.6%.

In the past, Fiserv anticipated the rapid decline in home-sale prices over the past few years — though it underestimated the scope.

Mark Zandi, chief economist with Moody’s Economy.com, agreed with Fiserv’s current assessments. “I think more price declines are coming because the foreclosure crisis is not over,” he said.

In fact, those areas with high concentrations of foreclosure sales will experience the steepest drops, according to Fiserv. Miami, for example, is expected to be the biggest loser. Prices are forecast to plunge 29.9% by next June — after having already fallen a whopping 48% during the past three years.

Read More » »

House Rules from RealtyTrac

Oct 7, 2009 | No Comments | Sean Mills

House Rules
Thinking of buying a distressed property? It’s very different than a standard real-estate transaction. Here are some pointers:

Distressed-property listings can be obtained from local real-estate agents, classified ads and Web sites such as RealtyTrac.com, Foreclosure.com, Trulia.com and Zillow.com, as well as bank Web sites.
Work with experienced real-estate agents and brokers with special training in [...]

House Rules

Thinking of buying a distressed property? It’s very different than a standard real-estate transaction. Here are some pointers:

  • Distressed-property listings can be obtained from local real-estate agents, classified ads and Web sites such as RealtyTrac.com, Foreclosure.com, Trulia.com and Zillow.com, as well as bank Web sites.
  • Work with experienced real-estate agents and brokers with special training in foreclosures and short sales.
  • Get pre-approved by a lender, or certify that you have sufficient cash available, before bidding on properties. Auction buyers must be prepared to put down a cash deposit of 5 to 10% cash and pay the balance within 30 days in many states—and in some states, on the same day.
  • Get a thorough inspection by a qualified professional inspector or home-inspection engineer prior to auction or sale.
  • Arrange for a thorough title search and title insurance.
  • Be prepared for a long wait to hear back from the bank on a short sale, but be prepared to move quickly on a foreclosure; banks often set strict timetables on foreclosures.
  • First-time buyers with minimal cash and little time or aptitude for repairs probably should avoid foreclosures, and inexperienced purchasers should avoid auctions.

Sources: RealtyTrac.com; Distressed Property Institute; HUD; WSJ research

“It was nerve-racking,” says Mr. Shearn, 41, a university research scientist. There was a long delay hearing back from the seller’s bank, and the last-minute discovery of a lien from an unpaid water bill—the water was about to be shut off.

But in the end, Mr. Shearn, says he and his wife, 42, a co-owner of a software company, were happy. “We really lucked out to find this house.”

Short sales like the Shearns’ are particularly complicated. Lenders require detailed information about both buyers’ and sellers’ finances, and homeowners generally have to prove hardship. The entire package of documents is scrutinized not just by lenders but by the mortgage investors. Second- and third-lien holders frequently hold up transactions demanding a larger share of the settlement. The average transaction takes four to six months or more, agents say.

Lenders say they are stepping up their efforts to handle short sales. J.P. Morgan Chase & Co. has doubled the number of employees handling

Are Distressed Homes Worth It?

Oct 7, 2009 | No Comments | Sean Mills

Home buyers are finding that the battered real-estate market offers just as many opportunities for headaches as for bargains.
Seth and Crystal Grotzke, both 25 years old, recently bought a bank-owned two-bedroom, two-bathroom townhouse in Edina, Minn., for $110,000—when similar homes in the same development were selling for as much as $131,000. But exactly one day [...]

Home buyers are finding that the battered real-estate market offers just as many opportunities for headaches as for bargains.

Seth and Crystal Grotzke, both 25 years old, recently bought a bank-owned two-bedroom, two-bathroom townhouse in Edina, Minn., for $110,000—when similar homes in the same development were selling for as much as $131,000. But exactly one day before the scheduled July closing, the Grotzkes learned there was a second, unpaid mortgage. Because of the foul-up, the couple was forced to live in Mr. Grotzke’s boss’s basement for more than a month. They finally closed on Aug. 31.

“We knew there would be title issues, but none that would last for that long,” says Mr. Grotzke, an assistant pastor. He adds that buying a foreclosed property is a way for God to “teach you patience.”

Alisabeth and Colin Shearn bought this seven-bedroom house outside of Denver in a short sale.

Lots of home buyers are learning about patience these days. In August, nearly a third of overall housing sales were distress sales, according to the National Association of Realtors, up from 18% in March 2008, when it began tracking such sales. The figure includes both foreclosures and so-called short sales, in which the lender agrees to accept less than the full balance of a mortgage in order to unload the property.

In some parts of the country, such as Bakersfield, Calif., Las Vegas and Lakeland, Fla., distressed properties constitute half or more of all sales. So far this year, there have been nearly 411,000 sales of U.S. properties in some stage of foreclosure, according to RealtyTrac, which publishes a national database of homes in default, auctions and bank-owned homes.

Those numbers aren’t making it any easier to buy distressed property. Bidding wars are erupting for the lowest-priced foreclosures. Experienced investors with cash are elbowing aside first-time buyers who need mortgages. And banks generally sell property “as is,” without the defect disclosures required of other owners. Short-sale buyers, for their part, often face delays of weeks or months as they wait to hear back from lenders—and from the institutional investors who bought securities based on the mortgages.

Vandalized Properties

Distressed-property buyers also often have to cope with the fallout from the ruined lives of previous owners, such as vandalized properties and liens from second mortgages, taxes, unpaid water bills, homeowner-association dues and court judgments. For all that, final sale prices often aren’t significantly lower than average in some areas, because the foreclosure glut has also driven down prices for sellers who aren’t in default.

Buyers have to be thoroughly prepared by securing financing in advance and making sure they have a strong stomach, experts say. They should seek out agents with extensive experience and training in distressed property because the transactions are often complicated and time-consuming. Pushing and prodding bank officials, loan servicers and others is a big part of the job.

Colin and Alisabeth Shearn of Cherry Hills Village, Colo., a Denver suburb, managed to snag a seven-bedroom Mediterranean-style house in a short sale for $1,272,000, more than $900,000 below its original listing price in 2007. By the time they bid on the house last February, it had gone unsold for nearly two years and the price had been reduced to $1.5 million from $2.2 million. The couple closed on the purchase at the end of May, and moved in with their two preschool-age children.

“It was nerve-racking,” says Mr. Shearn, 41, a university research scientist. There was a long delay hearing back from the seller’s bank, and the last-minute discovery of a lien from an unpaid water bill—the water was about to be shut off.

But in the end, Mr. Shearn, says he and his wife, 42, a co-owner of a software company, were happy. “We really lucked out to find this house.”

Short sales like the Shearns’ are particularly complicated. Lenders require detailed information about both buyers’ and sellers’ finances, and homeowners generally have to prove hardship. The entire package of documents is scrutinized not just by lenders but by the mortgage investors. Second- and third-lien holders frequently hold up transactions demanding a larger share of the settlement. The average transaction takes four to six months or more, agents say.

Lenders say they are stepping up their efforts to handle short sales. J.P. Morgan Chase & Co. has doubled the number of employees handling such sales, while Bank of America Corp. recently began allowing real-estate agents to submit short-sale documents online, reducing the chance a sale will be stalled. At Wells Fargo & Co., efforts to speed up short sales helped produce a 145% increase in these transactions in August compared with the same month a year earlier, the bank says. Meanwhile, the National Association of Realtors and other groups have recently launched short-sale and foreclosure certification programs for agents.

New Guidelines

The U.S. Treasury Department is expected to issue streamlined guidelines to lenders on short sales soon. Housing-industry leaders say complicated procedures are hindering them from clearing the large inventory of distressed property necessary to return the housing market to normal. Now, only about 20% or so of short sales are successful, according to real-estate brokerage Re/Max International Inc.

Buying a foreclosure is usually speedier than a short sale because lenders already possess the property. But there are other drawbacks. State laws vary considerably with respect to legal procedures surrounding foreclosures. Many states require judicial proceedings for foreclosing on a home that can take more than 12 months, a period during which the home may be vacant or occupied by tenants or squatters. Homes may have appliances, pipes and even electrical wiring ripped out.

Read More » »

« Older Entries