INLAND (EMPIRE): Foreclosures still dominating home purchases

Feb 27, 2011 | No Comments | Sean Mills

By TIFFANY RAY
The Press-Enterprise
 
Sales of foreclosure properties dropped in the Inland Empire in 2010 from the year before but continued to make up the largest share of the region’s housing market.
In Riverside and San Bernardino counties, 44,714 residential properties in some stage of foreclosure were snapped up by third-party buyers last year. That’s down [...]

By TIFFANY RAY
The Press-Enterprise

 

Sales of foreclosure properties dropped in the Inland Empire in 2010 from the year before but continued to make up the largest share of the region’s housing market.

In Riverside and San Bernardino counties, 44,714 residential properties in some stage of foreclosure were snapped up by third-party buyers last year. That’s down 46 percent from 2009.

But despite the drop, foreclosure properties continued to represent more than half of all homes sold — 52 percent in Riverside County and 54 percent in San Bernardino County. In 2009, foreclosures represented 68 percent of home sales in Riverside County and 69.5 percent in San Bernardino County.

In California, foreclosure sales dropped 42 percent in 2010 and represented 44 percent of all residential sales, the third highest percentage among states.

Foreclosure properties can include properties owned by banks or in some stage of foreclosure, including those in default or scheduled for auction.

Sales of nonforeclosure homes were down across the U.S., too, but only by 19 percent.

James Saccacio, RealtyTrac’s CEO, said in a news release that a bloated supply of foreclosure properties and weak demand from homebuyers are keeping foreclosures high as a percentage of home sales. They are also keeping foreclosure prices low, he said.

The average selling price for a foreclosure property in Riverside County last year was $196,331. That was 18 percent less than the average selling price for a nonforeclosure home. San Bernardino County’s average selling price for foreclosed properties was $164,952, a discount of 24 percent from a conventional sale.

Daren Blomquist, a spokesman for RealtyTrac in Irvine, said Inland Empire sales have declined more dramatically than in other parts of the country, in part, because the market has hit a saturation point. The large supply of Inland foreclosure properties has also contributed to a smaller discount for homebuyers, he said, boosting prices for foreclosure properties and depressing conventional-sale prices because those sellers must compete in a market in which foreclosures are dominant.

Michael Novak-Smith, who specializes in selling bank-owned properties for Re/Max Results in Moreno Valley, said home sales and showings are down across the board, and he doesn’t see any big recovery on the horizon until credit loosens up. “It’s just really tough to get a loan,” he said.

Shouldn’t the justice department investigate the NAR for inflating sales figures?

Feb 27, 2011 | No Comments | Sean Mills

I have been saying for years the NAR has inflated figures but for me it never seemed too far off what I would expect from a professional organization for real estate professionals who SELL real estate.  Even as the market was falling I would see ads and hear ads on the radio saying it was “still a [...]

I have been saying for years the NAR has inflated figures but for me it never seemed too far off what I would expect from a professional organization for real estate professionals who SELL real estate.  Even as the market was falling I would see ads and hear ads on the radio saying it was “still a good time to buy.”  -Sean

I read on MSN that the NAR apparently overstated home sales by as much as 20% as far back as 2007. The author opines, without any apparent reason, that “No one seems to be implying that numbers were massaged, cooked or manipulated.”

I would think there is every reason to believe the numbers were massaged, cooked or manipulated since that would be in the NAR’s interests and consistent with its numerous misleading practices.

If the numbers were manipulated by the NAR, I would think that would make the NAR a target for legal action by anyone and everyone who purchased real estate while the numbers were being manipulated and subsequently saw the market price of their property drop (that would be the vast majority who purchased since 2007). Obviously inflated figures would have inspired false buyer confidence.

Shouldn’t the justice department investigate? Wouldn’t this constitute a RICO violation? A subpoena of email and other correspondence at the NAR would likely allow an easy determination of innocence or guilt. I am tempted to say I would be shocked if there is no investigation, but sadly I am no longer affected that way by the government’s stupidity, incompetence and audacious complicity with power elites.

I guess it would be up to those who bought houses and suffered to initiate legal action. I think they should all sue the NAR. Fortunately for me I am not one of them as I have followed and heeded the information on Patrick.net for several years.

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GMAC Mortgage Statement on Independent Review and Foreclosure Sales

Oct 19, 2010 | No Comments | Sean Mills

Funny no one is denying the homeowners were late, seriously late/delinquent, on their payments of the homes in question but somehow it is there god given rights to stay in the homes.  People always want the rules to apply when the rules benefit them.  How about this…you can’t pay the mortgage do the right thing move [...]

Funny no one is denying the homeowners were late, seriously late/delinquent, on their payments of the homes in question but somehow it is there god given rights to stay in the homes.  People always want the rules to apply when the rules benefit them.  How about this…you can’t pay the mortgage do the right thing move out with deed in lieu of foreclosure. -Sean

MINNEAPOLIS (Oct. 12, 2010) – GMAC Mortgage is committed to preserving the integrity of the foreclosure process and in that spirit has engaged several leading legal and accounting firms to conduct independent reviews of its foreclosure procedures in each of the 50 states.  In addition, foreclosure sale files nationwide receive an additional review by a specialized team to ensure that: home preservation procedures have been fully followed; the timing and substance of the foreclosure is appropriate; and the file itself is in good order and complies with all laws and requirements of the state of jurisdiction.

Foreclosure is a very serious matter and only implemented when all other home preservation options have been fully exhausted.  We are taking these additional steps to restore confidence in the process, which is critical for the stability of the home and mortgage industry.  

In addition to the nationwide measures, the review and remediation activities related to cases involving judicial affidavits in the 23 states continues and has been underway for approximately two months.  As each of those files is reviewed, and remediated when needed, the foreclosure process resumes.  GMAC Mortgage has found no evidence to date of any inappropriate foreclosures.  

GMAC Mortgage is committed to working through this matter diligently and encourages borrowers with questions to contact a customer service representative at 866-304-4682 or loan.assist@gmacm.com.  Additional information Buy Amoxil can be found by visiting www.gmacmortgage.com.  

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Foreclosure picture bleak, unemployment wreaking havok

Jan 19, 2010 | No Comments | Sean Mills

Does this surprise anyone?  Do you need to be a rocket scientist to figure this out?  I guess you do with all the buy antibiotics without prescription mis-information floating around. -Sean
A record 3 million U.S. homes will be repossessed by lenders this year as high unemployment and depressed home values leave borrowers unable to [...]

Does this surprise anyone?  Do you need to be a rocket scientist to figure this out?  I guess you do with all the buy antibiotics without prescription mis-information floating around. -Sean

A record 3 million U.S. homes will be repossessed by lenders this year as high unemployment and depressed home values leave borrowers unable to make their house payment or sell, according to a RealtyTrac Inc. forecast.

Last year there were 2.82 million foreclosures, the most since RealtyTrac began compiling data in 2005. More than 4.5 million filings are expected this year, including default or auction notices and bank seizures, said Rick Sharga, senior vice president for the seller of default data and forecasts based in Irvine, Calif. There were 3.96 million filings in 2009.

“This will be the peak year, and the main reasons are unemployment and house prices that have stabilized way below mortgage amounts,” Kenneth Rosen, chairman of the University of California’s Fisher Center for Real Estate and Urban Economics in Berkeley, said in an interview.

Government and lender efforts to keep people in their homes are failing to relieve the worst foreclosure crisis since the Great Depression. Unemployment was 10 percent in December, unchanged from the previous month, while the so-called underemployment rate that includes part-time workers and discouraged workers rose to 17.3 percent from 17.2 percent, the Labor Department said Jan. 8.

U.S. lenders permanently modified 31,382 mortgages, or 1 percent, of the 4 million loans targeted under the Obama administration’s foreclosure prevention plan through November, the U.S. Treasury Department said last month. Fewer than half of the 3.2 million homeowners estimated as eligible for mortgage relief by the Treasury actually qualify, according to Herb Allison, assistant secretary for financial stability.

“The government doesn’t have their act together on housing,” Rosen said. “They seem to be pussy-footing around. We need a much more robust effort.”

Obama’s loan-modification program is “destined to fail” because it doesn’t confront the problem of negative equity that is driving foreclosures, Laurie Goodman, senior managing director at Amherst Securities Group LP, told Congress Dec. 8. Homeowners with negative equity, where a property is worth less than the loan, have little incentive to keep paying the mortgage and will “strategically default,” Rosen said.

More than 728,000 borrowers have already received an average $550 reduction in monthly payments, giving them “a second chance to stay in their homes,” she said.

An $8,000 first-time homebuyer tax credit and a $200 billion lifeline to keep mortgage buyers Fannie Mae and Freddie Mac solvent are among the administration’s efforts to date that have supported the housing market, she said.

“Modifications will not be the solution for all homeowners and will not solve the housing crisis alone,” Reilly said.

The number of homeowners with negative equity totaled 10.7 million, or 23 percent, at the end of the third quarter, according to a Nov. 24 report by First American CoreLogic, a Santa Ana, Calif.-based real estate research firm.

Home prices probably fell 13 percent in 2009 to a median of $172,700, following a drop of 9.5 percent the previous year, Walt Molony, a spokesman for the National Association of Realtors, said in an interview. Prices are down 26 percent from the July 2006 peak.

Defaults among prime borrowers are likely to accelerate, adding to a “huge” inventory of properties that banks possess and haven’t yet put on the market, according to Robert Shiller and Karl Case, who created the S&P/Case-Shiller Home Price Index. In September, Goodman estimated that 7 million homes were already in foreclosure or likely to be seized.

The housing market is weighed down by a “a massive supply of delinquent loans” that will end up in foreclosure this year, James Saccacio, RealtyTrac’s chief executive officer, said in a statement Friday.

The end of the government’s tax credit for first-time buyers, scheduled to expire in the spring, and the end of the Federal Reserve’s $1.25 trillion purchase of mortgage bonds, may add to housing woes, Rosen said.

A total of 2,824,674 U.S. properties got at least one foreclosure filing in 2009, a 21 percent jump from the prior year and more than double the number in 2007, RealtyTrac said.

About 2.2 percent of households received a filing last year, according to the company, which sells default data collected from more than 2,200 counties representing 90 percent of the U.S. population.

December filings increased 15 percent from a year earlier to 349,519, the 10th straight month the tally surpassed 300,000. Foreclosures in the fourth quarter jumped 18 percent from the same period in 2008 and fell 7 percent from the third quarter.

Nevada had the highest foreclosure rate for the third straight year in 2009, with more than 10 percent of households receiving at least one filing. December filings fell 22 percent from a year earlier and rose 27 percent from November.

Arizona had the second-highest rate for the year as more than 6 percent of households got a filing. Florida was third at 5.93 percent, followed by California at 4.75 percent and Utah at 2.93 percent, RealtyTrac said.

The other states among the 10 highest rates were Idaho at 2.72 percent, Georgia at 2.68 percent, Michigan at 2.61 percent, Illinois at 2.5 percent and Colorado at 2.37 percent.

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More homes are poised to hit the market

Dec 21, 2009 | No Comments | Sean Mills

A ’shadow’ inventory of properties close to foreclosure or seized but not yet for sale has been growing.
A supply of 1.7 million homes headed for sale because of foreclosure or delinquency looms over the nation’s housing market, which could dampen progress toward recovery should the Obama administration fail in its efforts to aid struggling homeowners, [...]

A ’shadow’ inventory of properties close to foreclosure or seized but not yet for sale has been growing.

A supply of 1.7 million homes headed for sale because of foreclosure or delinquency looms over the nation’s housing market, which could dampen progress toward recovery should the Obama administration fail in its efforts to aid struggling homeowners, researchers said.

A variety of measures to keep discounted bank-owned properties off the market — including moratoriums on foreclosures by major lenders and federal initiatives aimed at keeping people in their homes with mortgage payments they can afford — has helped increase a backlog of so-called shadow inventory 55% in the year ended Sept. 30, according to a report released Thursday by First American CoreLogic, a Santa Ana-based real estate research firm.

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Don’t Buy a House Yet

Dec 7, 2009 | No Comments | Sean Mills

When housing prices hit bottom, they will languish near those low levels for years to come. So don’t be in a rush to buy.
Mortgage interest rates are at a 50-year low. Last month, Congress extended a tax credit for home buyers through April. The economy is beginning to crawl out of what by some measures [...]

When housing prices hit bottom, they will languish near those low levels for years to come. So don’t be in a rush to buy.

Mortgage interest rates are at a 50-year low. Last month, Congress extended a tax credit for home buyers through April. The economy is beginning to crawl out of what by some measures is the deepest recession since the 1930s. One survey already shows house prices beginning to rise.

So isn’t it time to buy a home? Kiplinger’s certainly thinks so. But if I were in the market for a new home, I would wait. Housing prices typically don’t rebound quickly after a bust; instead, they level out and stay near that low base line for years.

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Negative Equity Report for Q3

Nov 25, 2009 | No Comments | Sean Mills

Here is the Q3 negative equity report from First American CoreLogic mentioned last night. From the report:
Negative equity, often referred to as “underwater” or “upside down,” means that borrowers owe more on their mortgage than their homes are worth.
Data Highlights
Nearly 10.7 million, or 23 percent, of all residential properties with mortgages were in negative equity [...]

Here is the Q3 negative equity report from First American CoreLogic mentioned last night. From the report:

Negative equity, often referred to as “underwater” or “upside down,” means that borrowers owe more on their mortgage than their homes are worth.

Data Highlights

Nearly 10.7 million, or 23 percent, of all residential properties with mortgages were in negative equity as of September, 2009. An additional 2.3 million mortgages were approaching negative equity, meaning they had less than five percent equity. Together negative equity and near negative equity mortgages account for nearly 28 percent of all residential properties with a mortgage nationwide.

The distribution of negative equity is heavily concentrated in five states: Nevada (65 percent), which had the highest percentage negative equity, followed by Arizona (48 percent), Florida (45 percent), Michigan (37 percent) and California (35 percent). Among the top five states, the average negative equity share was 40 percent, compared to 14 percent for the remaining states. In numerical terms, California (2.4 million) and Florida (2.0 million) had the largest number of negative equity mortgages accounting for 4.4 million or 42 percent of all negative equity loans

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Mortgage Program Gathers Steam After Slow Start

Nov 11, 2009 | No Comments | Sean Mills

The Obama administration said Tuesday that its mortgage-modification program has enrolled one in five eligible homeowners, a sign the effort is gathering momentum after a slow start. But so far few of those trial modifications are turning into permanent fixes.
The Making Home Affordable program has begun trial modifications for more than 650,000 borrowers since it [...]

The Obama administration said Tuesday that its mortgage-modification program has enrolled one in five eligible homeowners, a sign the effort is gathering momentum after a slow start. But so far few of those trial modifications are turning into permanent fixes.

The Making Home Affordable program has begun trial modifications for more than 650,000 borrowers since it was launched in February, according to data released Tuesday by the Treasury Department. That amounts to 20% of those eligible for the program. More than 217,000 trial modifications, or roughly one-third, were under way in just two states: California and Florida.

Tax Refunds, Relief for Builders

Nov 10, 2009 | No Comments | Sean Mills

The new tax break for businesses signed into law on Friday will result in a windfall valued at hundreds of millions of dollars for the biggest home builders, boosting the cash hoard the companies are tapping as they limp toward recovery.
The tax break would give companies big refunds to help make up for recent losses. [...]

The new tax break for businesses signed into law on Friday will result in a windfall valued at hundreds of millions of dollars for the biggest home builders, boosting the cash hoard the companies are tapping as they limp toward recovery.

The tax break would give companies big refunds to help make up for recent losses. Specifically, it would let large firms claim cash refunds on taxes they paid going back five years, to offset current losses. Previously, the carry-back period for large firms was two years.

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Distressed Sales: Sacramento as Example

Nov 9, 2009 | No Comments | Sean Mills

Note: The Sacramento Association of REALTORS® is now breaking out monthly resales by equity sales (conventional resales), and distressed sales (Short sales and REO sales). I’m following this series as an example to see changes in the mix in a former bubble area.
Click on graph for larger image in new window.
UPDATE: percentages corrected.
Here is [...]

Note: The Sacramento Association of REALTORS® is now breaking out monthly resales by equity sales (conventional resales), and distressed sales (Short sales and REO sales). I’m following this series as an example to see changes in the mix in a former bubble area.

Click on graph for larger image in new window.

UPDATE: percentages corrected.

Here is the October data.

They started breaking out REO sales last year, but this is only the fifth monthly report with short sales. About 63.2 percent of all resales (single family homes and condos) were distressed sales in October.

cheap online pharmacy 10px; FLOAT: right; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid” src=”http://1.bp.blogspot.com/_pMscxxELHEg/Svh9KdndruI/AAAAAAAAGwU/zvwgd82SM2M/s320/SacramentoOct2.jpg” border=”0″ alt=”Distressed Sales” /> The second graph shows the mix for the last four months. REO sales declined, but short sales and conventional sales were up. It will be interesting to see if foreclosure resales pick up later this year – or early next year – when the early trial modifications period is over.

Total sales in October were off 17.5% compared to October 2008; the fifth month in a row with declining YoY sales.

On financing, over half the sales were either all cash (24.6%) or FHA loans (28.9%), suggesting most of the activity in distressed former bubble areas like Sacramento is first-time home buyers using government-insured FHA loans (and taking advantage of the tax credit), and investors paying cash.

This is a local market still in distress.

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