Which Banks Are Pursuing the Most Short Sales?

JPMorgan Chase and Wells Fargo accounted for 60 percent of the some 17,781 short sale and deed-in-lieu agreements loan servicers completed through May under the Home Affordable Foreclosure Alternatives program, reports Inman News in its analysis of the latest figures provided by the Treasury Department.

The two banks emerged as the front-runners in completing short sales and deed-in-lieu of foreclosure agreements when compared up against other loan servicers, all participating in the HAFA program.

On the other hand, Bank of America entered into less than half as many HAFA short sales or deed-in-lieu of foreclosure agreements than either JPMorgan Chase or Wells Fargo.

The government’s HAFA program provides incentives for completing short sales. For example, home owners participating in a HAFA short sale receive $3,000 in relocation assistance.

Source: “Chase, Wells Fargo Lead in HAFA Short Sales,” Inman News (July 5, 2011)

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Foreign Buyers Target U.S. Vacation Hotspots

Foreign home buyers have their eye on U.S. vacation areas — especially in southern Florida — and are helping to give a lift to some of these battered housing markets.

More than 30 percent of Florida’s home sales in the 12 months ending in March were to foreign buyers (compared to 10 percent in 2007), according to National Association of REALTORS® housing data. In Miami alone, about 40 percent of buyers are international, says Ronald Shuffield, president of Esslinger-Wooten-Maxwell REALTORS® in Coral Gables, Fla.

“International buyers have been the fuel for the Miami recovery,” Shuffield told the USA Today.

Three of the most popular areas foreigners are searching for real estate: Miami-Fort Lauderdale, Phoenix, and Los Angeles, according to Trulia’s Web site.

And where are these foreign buyers most coming from? Canadians are mostly dominating the market share, with 23 percent of the foreign buyers coming from that country, followed by 9 percent from China, according to NAR data.

Source: “Foreign Buyers Lifting U.S. Home Sales,” USA Today (July 6, 2011)

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Loan Modification Scams Soar

More home owners who are desperate to avoid foreclosure are finding themselves victims to loan-modification scams.

In the latest to grip headlines, attorneys in California — where these scams are particularly rampant — filed the state’s first class-action lawsuit against an alleged loan modification scam, part of RewireMyLoan.com. In the lawsuit, prosecutors charge that the company collected nearly $5,000 each from at least 90 victims, promising to do loan modifications and offering a 100 percent money-back guarantee. The victims say the company never did the loan modification or refunded their payments.

The majority of the victims in the lawsuit are Spanish-speaking, and while the advertising and discussions they had with the company were in Spanish, they say the contracts they signed were in English. The home owners say they were also told to not contact their bank directly or their contracts would be voided. (Read: How to Spot Foreclosure-Prevention Scams)

Scam Prevention Network
The Lawyers’ Committee for Civil Rights, government housing agencies, and other nonprofits have created the Loan Modification Scam Prevention Network to compile complaints about such fraud. From February 2010 to June 1, the network gathered nearly 15,000 complaints involving $37 million in lost money. California accounted for the majority of the losses, with 3,105 complaints filed and $11 million in losses from these scams.

For home owners who believe they were a victim of a loan-modification scam, the Loan Modification Scam Prevention Network encourages them to visit www.preventloanscams.org to file a complaint.

Source: “Lawsuit Goes After Loan-Modification Fraud,” The San Francisco Chronicle (July 1, 2011)

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1 Million Foreclosures Delayed Until 2012

An estimated 1 million foreclosure-related notices for defaults, auctions, and home repossessions that should be filed by lenders this year will be pushed back until next year, according to the latest report by RealtyTrac.

While the delays could give home owners more time to catch up on their payments and try to avoid foreclosure, housing experts warn this means the looming shadow inventory of distressed properties likely will continue to plague the real estate market even longer.

“The best-case scenario is we don’t get back to normal levels of foreclosure activity until 2015, which means the housing market recovery gets delayed by at least a year,” says Rick Sharga, a senior vice president at RealtyTrac.

Foreclosure Notices Drop, Threat Still Looms
Overall, the number of homes repossessed by lenders in the first half of this year dropped 30 percent compared to the same period in 2010. But foreclosure processing delays — with lenders taking longer to take action against delinquent borrowers — is stalling the housing recovery, experts note.

About 1.2 million homes received a foreclosure-related notice in the first six months of this year — in other words, one in every 111 U.S. households, RealtyTrac reports.

Nevada continues to face the most foreclosures; one in every 21 households in that state received a foreclosure notice in the first half of the year.

The foreclosure process continues to lengthen too. From April and June, homes took 318 days on average to go from the first stage of foreclosure to ultimately where it was repossessed by the lender — that’s up from 298 days in the first three months of the year. (In New York, the foreclosure process took the longest at an average of 966 days or 2.6 years; Texas boasted the shortest at 92 days.)

Source: “Delays in Bank Processing Push Likely U.S. Foreclosures Until 2012, Stalling Recovery,” Associated Press (July 14, 2011)

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Investors Admit to Bid-Rigging at Auctions

Eight California real estate investors will plead guilty to a bid-rigging scam in which they purchased foreclosed properties at auctions, federal officials say. The auctions occurred in two San Francisco Bay area counties.

Officials say that from 2008 to 2011, the eight investors conspired–or made payoffs–to not bid against each other for properties sold at foreclosure auctions. Once an investor would buy a property at an artificially low price, the men would hold a private auction to resell the property, splitting the extra money paid by the winning bidder.

“While the country faces unprecedented home foreclosure rates, the collusion taking place at these auctions is artificially driving down foreclosed home prices and is lining the pockets of the colluding real estate investors,” said Christine Varney, assistant attorney general in charge of the antitrust division.

Source: “Calif. Investors to Plead Guilty in Bid-Rigging at Public Auctions of Foreclosed Properties,” Associated Press (June 30, 2011)

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Sellers Sweeten the Deal to Attract Buyers

Need to give buyers some extra incentive to choose your listing over the large inventories of others? Sure, price will get their attention, but some incentives may be the extra motivation needed to get the deal to the closing table.

Here are a few common extras that are growing in real estate transactions.

Home Warranties

Home warranties, which can cover the repair or replacement of many home system appliances and components (such as air conditioner, water heaters, and more), can provide buyers with some extra confidence when purchasing a home. “Home warranties are appealing to buyers because they cover appliances and system components that a new home owner has no familiarity with,” says Lelia Chapman, vice president of field sales for American Home Shield. “Sellers benefit from offering a home warranty because it sets the home apart from the rest of the competition in today’s saturated market, often leading to faster sales at better prices.”

Seller financing

With tight credit nowadays making it difficult for some to get a loan, some sellers may even offer financing to get a deal closed. Seller financing, in which the seller is willing to hold the loan, has become more common. Seller-financing is generally offered at a higher rate that is capped at a few years and then requires the buyer to pay off the loan or find new financing. (Read more.)

Furniture

Furniture can be costly to move anyway so more sellers are offering some of their furnishings to sweeten home deals too. For example, if sellers are moving to a condo, in which lawn care is no longer their responsibility, throwing in that riding lawn mower may just be the extra incentive a buyer needs. Some home sellers also may even offer to sell some of the furniture to the buyer at a discounted price to earn a few extra bucks.

Creative offers

Some home sellers are getting more extravagant and creative with the incentives they are offering to buyers. Some have even offered a week’s vacation in Hawaii or thrown in a time-share ownership, which they wanted to unload anyway.

Source: “5 Ways to Sweeten a Home Sale,” AOL Real Estate News (June 29, 2011) and “The Value of Home Warranties: Protect Your Wallet,” RISMedia (June 30, 2011)

 

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Banks Face Foreclosure Practices Deadline

The Office of the Comptroller of the Currency has given all banks until Sept. 30 to conduct a self-assessment of its foreclosure practices.

The “self-assessment” request first came in consent orders given to 14 of the nation’s largest banks in April over a settlement into questionable foreclosure practices that had surfaced last fall. The consent orders called for mortgage servicers to hire a third party to review its foreclosure files to determine if home owners were harmed directly from any errors, sloppy, or incomplete paperwork.

The mortgage servicers include banking giants Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, among others. But the OCC now says that any bank that falls under its supervision, even those that did not sign the consent orders, must complete the self-assessment by Sept. 30, too.

“Banks that identify weaknesses in their foreclosure processes through the self-assessment should take immediate corrective action,” the OCC said. “Banks should determine if the weaknesses resulted in any financial harm to borrowers and provide remediation where appropriate.” The OCC says it will review the self-assessments and the corrective actions taken, as well as also make any determinations of financial harm to home owners.

Source: “OCC Directs Banks to Internally Assess Foreclosure Practices by Sept. 30,” HousingWire (June 30, 2011)

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Celebrating America’s History of Home Ownership

The ability to buy, sell and own property has defined our nation throughout its history, and as the U.S. prepares to celebrate its 235 birthday, Americans continue to reaffirm their support of and aspirations toward home ownership.

“For over 100 years, REALTORS® have helped bring families home,” said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “There’s a reason why home ownership is called the American Dream – it’s part of our collective history and an essential part of building our nation’s future, as well.”

Numerous studies have shown the value Americans place in home ownership. According to the 2010 NAR Profile of Home Buyers and Sellers, first-time buyers most often cite the desire to own a home as the primary reason for their recent home purchase. Eighty-five percent of all recent home buyers consider a home purchase a solid investment, and 76 percent of them believe owning a home is as good as or better than an investment in stocks.

Earlier this week, a New York Times/CBS News poll reported that nearly nine in 10 Americans say home ownership is an important part of the American Dream. In a recent National Association of Home Builders survey, 73 percent of respondents said they believe the federal government should provide tax incentives to promote home ownership.

“Owning a home has long-standing government support in this country,” said Phipps. “Historically, lawmakers have understood the value of homeownership in fostering communities, creating social stability, and building wealth over the long term. In fact, Franklin Delano Roosevelt said, ‘A nation of home owners is unconquerable.’

“The mortgage interest deduction was introduced as part of the federal tax code nearly a century ago, and the Federal Housing Administration, Federal Home Loan Banks, and Fannie Mae were all created during the worst economic crisis our country ever faced in the Great Depression.”

Studies also demonstrate tangible social benefits to home ownership. The NAR report, Social Benefits of Homeownership and Stable Housing, showed that home owners are more active in their communities, benefit from improved education opportunities, and report higher levels of self-esteem and happiness when compared to renters. The U.S. Census Bureau reports that owners do not move as frequently as renters, providing more neighborhood stability. In turn, involvement in community quality-of-life issues helps prevent crime, improve childhood education and support neighborhood upkeep.

“As families across the country gather this weekend to celebrate our nation’s birthday, REALTORS® will continue to work to insure that this and future generations have the opportunity to pursue their dreams of owning a home,” said Phipps.

Source: NAR

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Where Is Mortgage Fraud Most Common?

Reports of mortgage fraud are on the rise: A government agency reported this week a 31 percent jump in mortgage fraud cases for the first quarter of this year, largely attributed to additional reviews from banks of loans issued several years ago that now have gone bad.

California cities dominated the rankings for the highest incidences of mortgage fraud in the nation — occupying six of the top 10 spots, according to the report issued by The Financial Crimes Enforcement Network.

The following is a list of the top 11 metro areas with the highest reports of mortgage fraud in the first quarter of this year, according to the Financial Crimes Enforcement Network.

1. San Jose-Sunnyvale-Santa Clara, Calif.
2. San Francisco-Oakland-Fremont, Calif.
3. Los Angeles-Long Beach-Santa Ana, Calif.
4. Riverside-San Bernardino-Ontario, Calif.
5. Sacramento-Arden-Arcade-Roseville, Calif.
6. Miami-Fort Lauderdale-Pompano Beach, Fla.
7. San Diego-Carlsbad-San Marcos, Calif.
8. Las Vegas-Paradise, Nev.
9. Atlanta-Sandy Springs-Marietta, Ga.
10. Salt Lake City, Utah
11. Chicago-Naperville-Joliet, Ill.

Source: “Top 20 Metros for Mortgage Fraud,” Inman News (June 29, 2011)

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Poll: 9 in 10 Americans Value Home Ownership

While nearly one-quarter of home owners owe more on their home than it’s currently worth, Americans still see the value in home ownership and still consider it part of the American dream.

Nearly nine in 10 Americans say home ownership is an important part of the American dream, according to the latest New York Times and CBS News poll conducted June 24-28 of 979 adults.

Overall, the majority of Americans polled also said the government should do more to help improve the housing market, and they mostly blame financial institutions for the sluggish housing market.

Here are some of the findings from the poll:

? 54 percent of those polled say the government should be doing more to improve the housing market. Only 16 percent say the government should be doing less. In fact, support for helping people who are facing financial distress from housing is higher than support for helping those who have been unemployed for several months.
53 percent say the government should help in providing financial assistance to those who are having trouble paying their mortgages.

? Nearly no one surveyed was in favor of discontinuing the mortgage interest tax deduction, which government leaders have been eyeing as part of budget cuts. (Learn more.)

? 42 percent of respondents blame lenders and 29 percent blame regulators for the housing crash.

? About 66 percent of Americans say strategic default — that is, when underwater home owners stop making payments on their mortgage even though they have the means to keep paying — is not justified. Nearly 30 percent of those surveyed say strategic default is justified.

Source: “Despite Fears, Owning Home Retains Allure, Poll Shows,” The New York Times (June 29, 2011)

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