What Could Force More Short Sales

By: Diana Olick
CNBC Real Estate Reporter

Despite a government program designed to streamline and incentivize the process, short sales have not even come close to keeping up with foreclosure sales.

That may be about to change.

If banks see higher losses from foreclosures than from short sales, they may put more resources into approving these deals, where the borrower is allowed to sell the home for less than the value of the loan.

"Loss severities on distressed U.S. residential mortgage loans are likely to increase an additional 5-10 percent from current levels due to higher loss mitigation and foreclosure expenses and weakening home values," according to a report from Fitch Ratings.

Fitch: The anticipated increases for each sector’s average loss severities are expected to be as follows:

• Prime loans: currently 44%, increasing to 49%-54%;
• Alt-A loans: currently 59%, increasing to 64%-69%;
• Subprime loans: currently 75%, increasing to 80%-85%.

We are already seeing home prices double dip in many markets, and that is expected to continue at least through the first half of 2011. One way to mitigate the losses is through short sales. "Short sales generally experience recovery rates about 10 percent higher than foreclosure sales," according to Fitch.

Will this be enough to push the banks? Unclear.

Servicers actually rake in a lot of money from fees surrounding foreclosures, and so far the government's "Home Affordable Foreclosure Alternative," program, which pays servicers cash incentives for doing short sales, has had pretty poor results, really still in the hundreds of loans. Second liens pose a big problem, but many big bank servicers also hold the second liens.

It's all about where the math comes out. If home prices fall far enough, the equation may tip from foreclosure to short sale.

Published: Friday, 17 Dec 2010 | 1:02 PM ET

Realty Times - Most Say it's a Good Time to Buy

Realty Times - Most Say it's a Good Time to Buy

Unexpected Cities See More Homes Go Back to the Bank

TALK TO ME BEFORE THIS HAPPENS TO YOUR HOME - THERE ARE OPTIONS FOR YOU!

By: Diana Olick
CNBC Real Estate Reporter


Yes, the four states that we always talk about are still leading the nation in foreclosure rates. Okay, Florida, California, Arizona, Nevada...if you've been trapped under something heavy for the past few years. But for the past few months a new trend is emerging, and some numbers released today really put it into perspective.

Foreclosure "actions" in Q3, which include anything from default notices to bank repossessions, rose in 65 percent of the nation's top 200 housing markets.

In Seattle, they jumped 71 percent, in Chicago up 35 percent and big double-digit jumps in Houston and Atlanta too.

These are not cities that saw enormous price jumps during the housing boom (maybe Seattle, but not the others) and they definitely did not see the kind of investor activity that the fab four saw during housing's heyday.

Not in the general release, but in a little side-bar that Realty Trac sent me, you see really big jumps in bank repossessions, which are the final stage of foreclosure when the bank takes the house back and evicts you. Quarter to quarter, Seattle saw a 65 percent jump, Philadelphia a 38 percent jump, Boise, ID up 71 percent and even Richmond, VA taking a 28 percent leap. One word: Unemployment.

Of course the logical question next is, what happens to home prices in those cities, as foreclosures hit the for-sale inventory.

Sure, there are buyers out there looking for deals, but with the foreclosure robo-mess hanging over the market, some sales frozen, some not, there's not a whole lot of buyer confidence out there to take the leap into the "distressed" market.

That just means the prices on those homes have to go lower.

Published: Thursday, 28 Oct 2010 12:43 PM ET

Pending Home Sales Show Healthy Gain, Hint at Spring Surge

Now is a GREAT time to GET OFF THE FENCE! You have until the end of April (this month) to have a home under contract to take advantage of the available Gov't money and it usually takes a couple of weeks to get to that stage. CALL ME NOW to FIND YOUR HOME - Steve 801-243-8202



Washington, April 05, 2010

Pending home sales rose in February, potentially signaling a second surge of home sales in response to the home buyer tax credit, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in February, rose 8.2 percent to 97.6 from a downwardly revised 90.2 in January, and remains 17.3 percent above February 2009 when it was 83.2. The data reflects contracts and not closings, which usually occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, said the improvement is another hopeful sign. “The rise in buyer contact activity may signal the early stages of a second surge of home sales this spring. The healthy gain hints home prices are continuing to flatten,” he said. “We need a second surge to meaningfully draw down inventory and definitively stabilize home values.”

The PHSI in the Northeast rose 9.0 percent to 77.7 in February and is 18.9 percent higher than February 2009. In the Midwest the index jumped 21.8 percent to 97.9 and is 18.7 percent above a year ago. Pending home sales in the South increased 9.2 percent to an index of 107.0, and the index is 17.5 percent higher than February 2009. In the West the index fell 4.8 percent to 98.0 but is 14.6 percent above a year ago.

“Anecdotally, we’re hearing about a rise of activity in recent weeks with ongoing reports of multiple offers in more markets, so the March data could demonstrate additional improvement from buyers responding to the tax credit,” Yun said.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

Existing-home sales for March will be reported April 22 and the next Pending Home Sales Index will be on May 4; release times are 10 a.m. EDT.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data, tables and surveys also may be found by clicking on Research.

© Copyright NATIONAL ASSOCIATION of REALTORS®

Home Loan Demand Up as Purchase Activity Gains

Great information on the state of home ownership as home loan demand is up and purchase activity gains momentum.

Published: Wednesday, 31 Mar 2010
By: Reuters

U.S. mortgage applications rose in the latest week for the first time in three weeks as demand for home purchase loans reached the highest level since October, data from an industry group showed on Wednesday.

If demand for home purchase loans, a tentative early indicator of home sales, continues to rise it will bode well for the spring season, the peak home buying season.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, increased 1.3 percent for the week ended March 26.

The four-week moving average of mortgage applications, which smoothes the volatile weekly figures, was up 2.2 percent.

The MBA's seasonally adjusted purchase index increased 6.8 percent, hitting its highest level since the week ended Oct. 30.

Michael Fratantoni, the MBA's vice president of research and economics, said the activity may reflect the looming expiration of a homebuyer tax credit, just as many homebuyers in October had rushed to get loans closed before the original expiration of the tax credit.

"We may be seeing a similar pattern now, as the extended version of the tax credit ends next month," he said in a statement.

The government's $8,000 tax credit for first-time home buyers originally was to end on Nov. 30. The Obama administration then extended and expanded the program, adding a $6,500 credit for home owners buying a new residence and increasing income limits. Eligible borrowers must now sign contracts by April 30 and close loans by June 30.

Leif Thomsen, chief executive of Mortgage Master, in Walpole, Massachusetts, said the tax credit has become less relevant in increasing purchases over time, because most people who could have taken advantage of it have already done so.

"There are still some procrastinators out there who have yet to pull the trigger on their decision to purchase a home and they will find themselves out of time very soon," he said.

Meanwhile, higher mortgage rates are muting home loan refinancing. The MBA's seasonally adjusted index of refinancing applications decreased 1.3 percent, reaching its lowest level since the week ended Feb. 19.

"Interest rates are the No. 1 indicator of how the housing market is faring right now, with unemployment coming in a close second," Thomsen said.

The MBA said borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 5.04 percent in the latest week, up 0.03 percentage point from the previous week and also above the year-ago level.

An all-time low of 4.61 percent was set in the week ended March 27, 2009, based on a weekly survey conducted since 1990.

The MBA said fixed 15-year mortgage rates averaged 4.34 percent, up from 4.33 percent the previous week. Rates on one-year ARMs increased to 6.88 percent from 6.75 percent. Mortgage rates play a crucial role in housing affordability.

February home sales data indicated a lull in the market after signs of a recovery late last year. New home sales fell for a fourth straight month in February to hit a record low, while existing home sales fell for a third straight month.

Any improvement in the housing market would bode well for the U.S. economy, as it points to better demand in the sector where the first signs of the latest recession took root.

Copyright 2010 Reuters.

Real Estate Outlook: Steady Growth Expected

by Kenneth R. Harney

New economic reports indicate steady growth expected for Real Estate. Great news for all of us. Call me now to find your home. Steve @ 801-243-8202.

Harsh weather conditions held back home sales in February -- leading to some renewed gloominess by Wall Street analysts.

But several new economic reports, including on employment, suggest that during the coming several months we're likely to see steady but unspectacular national economic growth, and some pretty good housing rebound numbers to boot.

Even the February home sales numbers were nowhere near as negative as you might expect under the circumstances. Existing home sales were down slightly for the month – by six tenths of a percent – but were still clicking along at more than 5 million on an annualized basis.

Sales in the Northeast region, which took the brunt of the storms, were actually up by nearly 3 percent! Median prices in the northeast gained seven and a half percent!

New home sales were harder hit – down by 2.2 percent for the month. But median prices on new homes sold for the month jumped by six percent over January and were up five percent year over year, according to the Commerce Department.

In California, median home prices rose 11 percent in February and total sales were up by 8 percent, according to MDA Data Quick.

And look for that rising-value trend to continue in many parts of the country, according to statisticians at First American CoreLogic. In a new report they forecast home prices are likely to gain four and a half percent over the coming 12 months. Take out distressed sales from the equation – and prices would otherwise gain 5.6 percent.

A new study by economists at the Federal Deposit Insurance Corp (or FDIC) also provides a positive take on where we're headed. The US housing market, according to the FDIC, is showing "tangible signs of improvement". Affordability – which is obviously a crucial factor in whether households can buy or not – is at "historic high levels," says the report.

Economists at UCLA weighed in last week with their own projections. Not only will there be no so-called "double dip"—that's the bad news scenario where the US economy slips back into recession sometime this year – but the economic expansion will continue rolling along at a two to three percent quarterly rate of increase in the gross domestic product or GDP.

Meanwhile, last week's new filings for unemployment insurance dropped much more than analysts had predicted. This suggests that maybe – just maybe – we're finally on the verge of seeing some new job creation and fewer layoffs.

Bottom line: Don't get bogged down by the economic naysayers and snow storms. The national economy -- and housing -- are moving ahead on a recovery path.

Published: March 29, 2010

Building permits up in Salt Lake, Summit counties

This is awesome news for us here in both Salt lake and Summit counties. I am a new construction specialist and if what your heart desires is a "new" home, give me a call and lets get to work on it. Steve Jackson 801-243-8202.


March 18th, 2010 @ 10:42am

SALT LAKE CITY (AP) -- Some parts of Utah are weathering the recession without significant job losses or real-estate troubles, according to a leading Utah economist.

Jim Wood says Tooele County, with more than 15,000 non-farm jobs, lost only 17 jobs over the past year, while the full state lost 65,000.

Wood is head of the University of Utah's Bureau of Economic Research.

He says residential construction has barely slowed down in Summit County, home of three Park City-area ski resorts. Residential building permits were up by nearly 80 percent there in 2009.

Salt Lake County lost some jobs but permits for apartment construction were up by a third in 2009.

Wood's report is a snapshot of the uneven effects of the recession on Utah. He prepared it for Commercial Real Estate Solutions.