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SHORT SALE SPECIALIST AGENTS FOR BANK OF AMERICA, WELLS FARGO, CHASE - The Gusman Group Market News

Foreclosure Starts Rise for the First Time in Months

by Short Sale Agent Jerry Gusman on 07/03/14

Foreclosure Starts Rise for the First Time in Months


Foreclosure Starts Rise for the First Time in Months


Foreclosure starts rose for the first time in eight months in May, but there is still reason to be optimistic about the United States housing market, according to the latest Mortgage Monitor Report of the latest available data released by Black Knight Financial Services. The report indicated that foreclosure starts nationwide rose by 9.5 percent.

The rise in May reverses the eight month trend of continuing decline in starts. However, the outlook for the housing market is still trending upward compared to years past and Black Knight cautioned against reading too much into the backwards step.

"While foreclosure starts did rise over 9 percent in May, it's important to remember the historical trend is still one of improvement," said Kostya Gradushy, Black Knight's manager of Loan Data and Customer Analytics. "On a year-over-year basis, January through May foreclosure starts were still down 32 percent, and we are still looking at the lowest level of foreclosure starts in seven years."

"Additionally, over half of these starts are repeat foreclosures, rather than new entries into the pipeline, That is, these are loans that had been in foreclosure, shifted back to either current or delinquent status by way of modification, repayment plan or some action by the borrower, but have now fallen into foreclosure once again."

New Jersey was the only state in the union to see a year over-year increase in foreclosure starts and almost 80 percent of starts nationwide came from loans originating in 2008 or earlier.

Although foreclosure starts were up in May there were positive notes to take from the report. The total U.S. foreclosure pre-sale inventory rate actually dropped 5.62 percent in the month. Foreclosure inventory is down 37.23 percent year-over-year, signaling that Americans are more likely to be able to pay their mortgages now than they have been at any point since the financial crisis began.

Likewise, the overall loan delinquency rate (the number of loans 30 or more days past due, but not in foreclosure) is down 7.55 percent from this point last year and stayed static in May at 5.62 percent.

This bump in the road notwithstanding, a look at the recent trend in mortgage performance and other indicators reveal that there is still good reason to be cautiously optimistic that housing will continue on its long, gradual path to recovery.

FOR MORE INFORMATION CONTACT

Jerry Gusman, The Gusman Group

(888) 213-4208


Mortgage Collectors Silence Homeowners with ‘Gag Orders’

by Short Sale Agent Jerry Gusman on 06/24/14

Mortgage Collectors Silence Homeowners with ‘Gag Orders’


Mortgage Collectors Silence Homeowners with ‘Gag Orders’


A curious piece of text is appearing in some homeowner's loan modification agreements—by accepting a modification from the bank or non-bank servicer, the homeowner agrees to never publicly say, write, or post anything negative about the company doing the modification.

As originally reported by Reuters, Ocwen, Bank of America, and PNC Financial Services Group are adding new terms to their modification contracts to prevent homeowners from publicly disparaging the companies as part of a mortgage modification agreement.

Essentially, the gag orders are being used when distressed homeowners use litigation to resolve foreclosure and loan modification cases, making the modification contingent upon a homeowner's silence. The deal often extends to lawyers handling litigious cases on behalf of the injured parties.

Reuters cited, "A 2013 report by the National Consumer Law Center found that servicers routinely lost borrowers' paperwork, inaccurately input information, failed to send important letters to the correct address—or sometimes just didn't send them at all."

"These clauses can hurt borrowers who later have problems with their mortgage collector by preventing them from complaining publicly about their difficulties or suing, lawyers said. If a collector, known as a servicer, makes an error, getting everything fixed can be a nightmare without litigation or public outcry," Reuters noted.

According to the original report, the restrictive text is also now showing up when servicers grant regular modifications outside of the courtroom.

These new requirements are creating problems for homeowners—and ire from regulators. New York's Superintendent of Financial Services Benjamin Lawsky said he is investigating Ocwen's use of these clauses.

"Reports that Ocwen is imposing a gag rule for certain struggling homeowners—preventing them from criticizing the company—are troubling and deeply offensive," said Lawsky in an emailed statement to Reuters. "We will investigate this issue immediately."

PNC's vice president of external communications, Marcey Zwiebel, told Reuters that "these clauses are part of the consideration we receive for agreeing to settle the case. This helps to ensure that the discussion is not re-opened in public after the case has been settled."

Modifications still play an important role in the ongoing housing recovery. According to the U.S. Department of the Treasury, 1.3 million loan modifications have been completed under the Home Affordable Modification Program (HAMP). Servicers have completed an additional 5.6 million modifications.

"The banks are attempting to hold our clients hostage with a provision they know we cannot agree to," said University of Notre Dame law professor Judith Fox to Reuters, who runs a clinic for troubled homeowners and who has also petitioned the Indiana Bar Association over attempts to muzzle attorneys. "It is coercive and unethical."

For more information contact:

Jerry Gusman, The Gusman Group

(888) 213-4208

jerryggroup@aol.com

Black Knight: 1 in 10 Borrowers Underwater

by Short Sale Agent Jerry Gusman on 05/05/14

Black Knight: 1 in 10 Borrowers Underwater


In Black Knight Financial Services’ latest Mortgage Monitor Report, the company found that only one in ten Americans are 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.

The company noted that 55 percent of loans in foreclosure have been delinquent for over two years.

"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.

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.

Loans, on average, are in foreclosure for 966 days.

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.

For more information contact

Jerry Gusman, The Gusman Group

888-213-4208

Jerryggroup@aol.com

Clear Capital: Best Home Deals in ‘Mid-Tier’

by Short Sale Agent Jerry Gusman on 05/05/14

Clear Capital: Best Home Deals in ‘Mid-Tier’


Clear Capital recently released its Home Data Index Market Report, which found the best deals in the housing market now reside in the middle-tier of available homes. The group found that following more than two years of recovery, low-tier homes are no longer the best value for homebuyers.

Mid-tier homes are homes selling between $95,000 and $310,000, nationally.

The company reported that low-tier homes experienced 32.3 percent growth from the trough in 2011. Mid-tier homes are still 30.6 percent off of peak values, while the low-tier price sectors remained just 21.5 percent below peak values. Top-tier homes, on average, are just 18.2 percent off of peak values.

"Very interesting dynamics are at play as we head into spring. Though our April data suggests the spring buying season is off to a slow start, we aren't concerned about the sustainability of the recovery," said Dr. Alex Villacorta, VP of research and analytics at Clear Capital.

Villacorta continued, "To be clear, there are lots of adjustments taking place in housing markets across the country. Everything from lender regulation, consumer confidence, investors tapering purchases, local economics, and rising home prices have forced participants to continually adjust to a market that has been anything but stable."

The company found that quarterly rates of growth for the nation and three of four regions remain virtually unchanged.

Nationally, housing markets experienced a 0.9 percent growth quarter-over-quarter. The largest gains were in the West, which experienced a 1.8 percent increase from the previous quarters. The South was next at 0.8 percent growth, followed closely by the Midwest (0.7 percent) and the Northeast (0.6 percent).

"Generally speaking, we see price growth stabilizing throughout 2014, which should help boost the confidence and purchase activity from buyers on the fence," Villacorta said.

Villacorta continued, "The days of double digit price gains are behind us, and the market will continue to calibrate to the new reality of annual growth rates between 3% and 5%. A strong spring buying season might be a casualty of the major adjustments underway, but it's no reason to ring the alarm bells quite yet."

Average number of days it took to complete a short sale!

by Short Sale Agent Jerry Gusman on 05/03/14

Is Your Loan Modification Going Nowhere?

by Short Sale Agent Jerry Gusman on 04/12/14

Is Your Loan Modification Going Nowhere?

 

With the recent passing of the California Homeowners Bill Of Rights, mortgage lenders in California were mandated to offer distressed homeowners an alternative to foreclosure as part of the banks restitution in the lawsuit by the state.

 

Many distressed homeowners were given loan modifications in lieu of foreclosure even if they did not qualify previously. These homeowners had already applied for a loan mod and were declined by the same litigators. So why would they allow the loan mod again? The answer is because the state mandated they do. If a homeowner could not afford to pay a loan modification prior, how would they be able to now? Well, they can’t. And that’s why over 56% of these loan mods and homeowners have already re defaulted on their mortgage again.

 

In trying to help these distressed homeowners, the state has actually just prolonged the agony and inevitable of foreclosure for these families. Now these families will have to again seek alternatives to foreclosure. After exercising a loan mod, there are not many options left and should elect to short sale their home. An alternative that should have been done much sooner but wasn’t due to this mandate.

 

A short sale should be used in lieu of foreclosure all the time. The short sale option will salvage your credit and give you a much quicker recovery from your misfortune. In most cases if you short sale your home and continue to pay on time your other creditors, in 18-24 months you should be able to buy another home. With foreclosure a family is looking at 5 years to recover and the foreclosure can haunt them and remain on their credit report for up to 10 years.

 

If you are a distressed homeowner and have been considering a short sale or are in the middle of the process and your bank offers you a chance to get a loan mod even when they turned you down in the past. Make sure you weigh all the possibilities. If you know you will not be able to make the payments you may not want to prolong the inevitable. Your recovery starts as soon as you take the steps towards a recovery option such as a short sale.

 

There are many benefits to a short sale; especially tax wise, such as the debt relief act extended to 2014 insures you will not have to pay taxes on the amount forgiven. There are qualifications for this, but most will take advantage of this. Always discuss all the aspects of a short sale with your agent before you agree to enter into the agreement.

 

Make the right choice for your future. Too many distressed homeowners have blinders on and only look at the short term. Loan mods last 3-7 years, you must look at your future past 7 years and base your decision on where you want to be in 3-7 years. That is the real deciding factor!

Orange County, Los Angeles, and Inland Empire Housing Prices Jump!

by Short Sale Agent Jerry Gusman on 04/12/14

Orange County, Los Angeles, and Inland Empire Housing Prices Jump!

Huge price increase from 2013 in Orange, Los Angeles, and Inland Empire Counties!

Prices have risen by 11.7% in Orange County, 12.2% in Long Beach/Los Angeles County, and 12.1% in the Inland Empire.  Southern California had 3 of the top 4 regional price increases Orange County, Los Angeles County, and the Inland Empire!

SHOULD I TRY TO SELL MY HOME MYSELF?

by Short Sale Agent Jerry Gusman on 04/03/14


Today's Residential Real Estate market is challenging. While values have risen dramatically in 2013, most would be sellers are sitting on that bubble of equity. Their values have gone up but not quite enough to allow sellers to cash out as much as they hoped or would like. Therefore, many would be sellers are contemplating selling their homes themselves.


Selling your home yourself sounds beneficial if you are one of the sellers sitting on that bubble mentioned. Saving the 6% commission that agents normally charge to sell a property sounds like a good deal and makes the sellers feel they are closer to their magic number they wanted to net in the sale. But today the market has changed and is moving back towards a buyers market. Meaning there are more properties available due to the interest rates rising close to the 5% mark from 3.5% a couple months ago. This change in the interest rates took many of the potential buyers out of the market due to now payments are not as affordable as before.  Thus, turning the market around and back towards a buyers market, meaaning there are not as many buyers so sellers are having to make more concessions and are no longer experiencing multiple above asking price offers as they did a few months ago.


When the market is hot for sellers with lots of buyers drooling over the chance to buy, selling your home yourself is much easier. But when buyers are fewer, sellers need as much exposure as possible to their property. This is true in any market but more so in this one. Your home is only worth what someone is willing to pay for it! And, if you are trying to get top dollar for your home you need to expose and market your home to as many potential buyers as possible to find that one buyer that just falls in love with your property and is willing to pay your price. You cannot get this kind of exposure yourself posting on free websites.


Especially in this market, you should utilize a licensed agent. By using an agent, if the agent is good they will give your home 10 times the exposure you can. For example, when we market a property. At The Gusman Group we send your property to over 250 real estate websites nationally and internationally. We send property information to our over 300 investors. And if you pick the right agent that specializes in listing and marketing homes most likely like we have many buyers waiting to purchase that came from the other properties we had listed that they did not get. You also cannot overlook the power of the MLS Multiple Listing Service that agents are part of and utilize. Listing your property on the MLS exposes your home to tens of thousands of other agents that have qualified buyers also ready to purchase. With all this exposure you are more certain to secure a buyer than if you undertake the sale yourself.


Also consider this. A good agent will make the sale as easy and effortless as possible. They are there to protect your interests. They make sure the buyer is fully qualified so that your time is not wasted or your property is not tied up with a bogus buyer. This agent will make sure your home is properly priced for your market to insure you attract many buyers. Remember that commissions are negotiable. We recognize that sellers are sitting on that bubble of equity and we are making adjustments to lower commissions in this market to allow the sellers to be able to sell. This is something no agent wants to do ever! But the market is demanding an adjustment.


So is it worth it for you to sell your home yourself?  NO, not in this market. Not if you really want to sell your home. I see the same ads on sites of the same homes for months still trying to attract a buyer. Contact an agent discuss your needs and make a deal that fits and is fair to both parties, and sell your property for REAL.


Remember this also....."There is no bad time to sell your home, only a bad marketing plan!"


For more information Contact:

Jerry Gusman

The Gusman Group

888-213-4208

$63.1 Million Awarded to Stave Off Foreclosures

by Short Sale Agent Jerry Gusman on 03/19/14

$63.1 Million Awarded to Stave Off Foreclosures

$63.1 Million Awarded to Stave Off Foreclosures

NeighborWorks America announced Tuesday in a press release that $63.1 million had been awarded to 29 state housing finance agencies, 18 HUD-approved housing counseling intermediaries, and 67 community-based NeighborWorks organizations.

The money, provided through the National Foreclosure Mitigation Counseling (NFMC) program, is earmarked for counseling to families and individuals facing the threat of foreclosure.

The organization notes that although the number of households facing foreclosure is below the peak seen a few years ago during the housing crisis, "[M]any hundreds of thousands of homeowners will still face trouble with their mortgages this year."

More than 167,800 families who face foreclosure are expected to be directly assisted by the funds.

NeighborWorks America notes that more than 1,100 nonprofit counseling agencies and local NeighborWorks organizations across the country are expected to be engaged with the NFMC program as a result of the award.

The agencies provide, "[F]ree assistance to families at risk of losing their homes, determine homeowner eligibility for the various state and federal foreclosure prevention assistance programs, help homeowners understand the complex foreclosure process, and identify possible courses of action so their homeowner clients can make informed decisions and take action," according to the release.

Additionally, funds will go to the training of 2,000 counselors who can assist in foreclosure-related issues.

The NeighborWorks America program has been effective. The release cites a 33 percent decline in serious mortgage delinquencies for homeowners who received NeighborWorks pre-purchase guidance, compared to similar homeowners who received no pre-purchase help.

However, the $63.1 million awarded is not enough to satisfy all demand for NFMC funding. Requests for awards totaled in excess of $100 million dollars, which suggests that the many families seeking assistance 

First-Time Buyers Show Interest; Face Tough Market

by Short Sale Agent Jerry Gusman on 03/13/14

First-Time Buyers Show Interest; Face Tough Market


First-Time Buyers Show Interest; Face Tough Market

More than 4 million first-time buyers want to enter the market, but they face some tough issues as market conditions aren’t exactly favorable to new buyers.

This conclusion came from the Zillow Housing Confidence Index (ZHCI), a new calculation released by Zillow and Pulsenomics.

The ZHCI is a measure of consumer sentiment; anything over 50 indicates a positive sentiment. The current national index is 63.7. Of the 20 metros surveyed, 11 had individual confidence levels above the national average.

In 19 of the 20 large metros surveyed, more than 5.0 percent indicated they wanted to buy a home in the next year. The report notes, "Among current renters, homeownership aspirations were particularly strong, with about 10 percent of all renters nationwide saying they would like to buy within the next 12 months."

A vast majority of respondents said they were "confident or somewhat confident" they could afford a home in 2014.

If every respondent who indicated they wanted to buy a home actually purchased one, first-time home sales would total more than 4.2 million for 2014, more than double the roughly 2.1 million first-time buyers in 2013.

While this optimistic total from Zillow suggests interest is high, actually purchasing a home should prove to be a challenge in the upcoming year.

Market conditions are mixed: inventory, up 11 percent from a year ago, is still well below optimal levels, and has fallen year-over-year in 8 of 20 metros measured by the ZHCI. Mortgage rates, once a record low 3.3 percent in 2013, have risen to 4.2 percent, according to the Zillow Mortgage Marketplace.

A dearth of inventory coupled with rising mortgage rates could push homes out of a homebuyer's price range, particularly for first-time buyers.

"For the housing market to continue its recovery, it is critical that homes are both available and remain affordable to meet the strong demand these survey results are predicting, particularly from first-time homebuyers," said Zillow Chief Economist, Dr. Stan Humphries. "Even after a wrenching housing recession, this data shows that the dream of homeownership remains very much alive and well, even in those areas that were hardest hit."

He added, "But these aspirations must also contend with the current reality, and in many areas, conditions remain difficult for buyers. The market is moving toward more balance between buyers and sellers, but it is a slow and uneven process."

Areas indicated by the ZHCI with the highest interest in purchasing a new home come from metros that were hit hardest by the housing recession: Miami (67.5), Atlanta (62.9), and Las Vegas (64.1).

Each were near or above the national index of 63.7 for "Overall Housing Confidence."

For more information contact

Jerry Gusman, The Gusman Group

(888) 213-4208

jerryggroup@aol.com

Total Foreclosures Fall; ‘Zombie Foreclosures’ Pose Challenges

by Short Sale Agent Jerry Gusman on 03/13/14

Total Foreclosures Fall; ‘Zombie Foreclosures’ Pose Challenges


Total Foreclosures Fall; ‘Zombie Foreclosures’ Pose Challenges

Foreclosure filings are down to record lows, but a more sinister-sounding problem may be on the rise—"zombie foreclosures."

RealtyTrac released its U.S. Foreclosure Market Report for February, reporting that foreclosure filings (default notices, schedule auctions, and bank repossessions) were 112,498, down 10 percent from January and down 27 percent from the previous year.

Foreclosure filings in the month of February represent the lowest monthly total since December, 2006—a more than seven-year low.

"Cold weather and a short month certainly contributed to a seasonal drop in foreclosure activity in February, but the reality is that new activity is no longer the biggest threat to the housing market when it comes to foreclosures," said Daren Blomquist, VP at RealtyTrac.

"The biggest threat from foreclosures going forward is properties that have been lingering in the foreclosure process for years, many of them vacant with neither the distressed homeowner or the foreclosing lender taking responsibility for maintenance and upkeep of the home—or at the very least facilitating a sale to a new homeowner more likely to perform needed upkeep and maintenance," Blomquist said.

As of the first quarter of 2014, a total of 152,033 properties in the foreclosure process had been vacated by the homeowner. These “zombie foreclosures” represent 21 percent of all properties in the foreclosure process.

Owner-vacated properties have been in the foreclosure process an average of 1,031 days, nearly three years.

"One in every five homes in the foreclosure process nationwide have been vacated by the distressed homeowner, but it is closer to one in three foreclosures in some cities," Blomquist added. "These properties drag down home values in the surrounding neighborhood and contribute to a climate of uncertainty and low inventory in local housing markets."

The state with the most owner-vacated foreclosures was Florida with 54,908, representing 36 percent of the national total. Illinois (15,512), New York (10,880), New Jersey (8,595), and Ohio (7,780) rounded out the top five states for owner-vacated foreclosures.

Foreclosure starts fell back to 51,842, their lowest level since December, 2005. A total of 47,715 U.S. properties were scheduled for a future foreclosure auction in February, down 15 percent from the previous month and down 21 percent from a year ago.

Bank repossessions (REO) were 30,307 in February, up less than 1 percent from January. Year-over-year, REO properties were down 33 percent.

States with the highest foreclosure rates in February were Florida, Maryland, Nevada, New Jersey, and Illinois.

Among metros with populations of 200,000 or more, Florida held nine of the top ten metros for foreclosure rates in February. The dubious honor of leader went to the Palm Bay-Melbourne-Titusville metro, where one in every 296 housing units were in foreclosure—nearly four times the national average.

For more information contact

Jerry Gusman, The Gusman Group

(888) 213-4208

jerryggroup@aol.com

Should States Fast-Track Foreclosures?

by Short Sale Agent Jerry Gusman on 03/10/14

Should States Fast-Track Foreclosures?


A new study released by the Federal Reserve Bank of Cleveland suggests that fast-tracking foreclosures on vacant properties could provide states with substantial savings. Researchers Kyle Fee and Thomas J. Fitzpatrick used two judicial states, Ohio and Pennsylvania, to show that savings from fast-tracking could save at least $24 million annually.

The report notes, "In Ohio, the annual savings from a foreclosure fast-track is estimated to be between $24,000,000 and $129,000,000," and that savings are "an elimination of deadweight losses, rather than a shifting of costs. That is, these costs already exist and benefit no one."

Pennsylvania could have saved an estimated $24 million to $54 million.

States that require foreclosures to be conducted through the courts "have decided that protecting the rights of property owners is worth the higher cost of judicial foreclosure relative to nonjudicial foreclosure," Fee and Fitzpatrick said.

Costs are incurred when properties are left vacant, leaving them more susceptible to be vandalized and stripped of valuable items, like metal. Repairing these homes to sell is a costly endeavor, and by speeding up the foreclosure process, properties would be left vacant for smaller periods of time, resulting in less damage.

Additional concerns arise as unoccupied homes create health and safety hazards, and cause homes in neighboring areas to decrease in home value.

The report notes that the costs of vacant properties provide no value, and "these costs are born primarily by the lender through rehabilitation costs or lower sales prices."

By fast-tracking homes through the judicial process, researchers Lee and Fitzpatrick found that Ohio could have lowered its foreclosed inventory by .5 percentage points, to less than 2 percent instead of the current figure of just under 2.5 percent. Pennsylvania would have seen similar results, according to the report.

In the study, Lee and Fitzpatrick found that fast-tracking foreclosures could shave off between 8 and 43 days in Ohio, and 9 to 20 days in Pennsylvania.

However, creating legislation to hasten the judicial process is likely to be difficult.

"Crafting legislation that adequately balances the interests of creditors and homeowners while meaningfully fast-tracking foreclosures is no simple task, and would likely require the input of creditors, communities, foreclosure attorneys, and the judiciary," the report said.

For more information contact

Jerry Gusman, THe Gusman Group

(888) 213-4208

jerryggroup@aol.com

Foreclosure Inventory Down 31% in 2013, Slow Progress Expected in 2014

by Short Sale Agent Jerry Gusman on 02/24/14

Foreclosure Inventory Down 31% in 2013, Slow Progress Expected in 2014


Foreclosure Inventory Down 31% in 2013, Slow Progress Expected in 2014


National foreclosure inventory fell 31 percent year-over-year in December, with 2.1 percent of all homes with a mortgage in some stage of foreclosure, according to CoreLogic's December National Foreclosure Report.

Completed foreclosures also declined year-over-year in December, though at a somewhat lower rate of 14 percent, according to CoreLogic.

Despite declines, foreclosures remain elevated compared to historical norms. From 2000 through 2006, about 21,000 foreclosures were completed each month.

In December 45,000 foreclosures were completed, down from 47,000 in November and 52,000 in December 2012.

"Clearly, 2013 was a transitional year for residential property in the United States," said Anand Nallathambi, president and CEO of CoreLogic.

"Higher home prices and lower shadow inventory levels, together with a slowly improving economy, are hopeful signals that we are turning a long-awaited corner," Nallathambi said.

However, he anticipates "progress to remain very slow" this year.

Five states accounted for nearly half of all completed foreclosures in 2013. Those states included Florida with 119,000 foreclosures, Michigan with 53,000 foreclosures, California with 39,000 foreclosures, Texas with 39,000 foreclosures, and Georgia with 35,000 foreclosures completed over the year.

At the other end of the spectrum, the five states with the fewest foreclosures completed in 2013 were the District of Columbia with 63 foreclosures, North Dakota with 417 foreclosures, Hawaii with 493 foreclosures, West Virginia with 505 foreclosures, and Wyoming with 759 foreclosures.

The states ranking highest for the percentage of foreclosure inventory as of year-end is not consistent with the list of states with the highest numbers of completed foreclosures over the year, except that Florida ranked highest in both categories.

In Florida, 6.7 percent of all homes with a mortgage are in some stage of foreclosure.

Florida is followed by New Jersey (6.5 percent), New York (4.9 percent), Connecticut (3.6 percent), and Maine (3.6 percent).

States with the smallest foreclosure inventory rates in December were Wyoming (0.4 percent), Alaska (0.5 percent), North Dakota (0.6 percent), Colorado (0.6 percent), and Nebraska (0.6 percent).

In total, 4.8 million foreclosures have been completed since the start of the housing crisis in September 2008, according to CoreLogic.

For more information contact

Jerry Gusman, The Gusman Group

(888) 213-4208


Expired Mortgage Tax Relief Could Increase Pressure on Troubled Borrowers

by Short Sale Agent Jerry Gusman on 02/07/14

Expired Mortgage Tax Relief Could Increase Pressure on Troubled Borrowers

Expired Tax Relief Could Increase Pressure on Troubled Borrowers

The Mortgage Forgiveness Debt Relief Act's (MFDRA) expiration may lead to negative pressure on liquidation timelines and recoveries for legacy U.S. mortgage investors if the act is not renewed, according to Fitch Ratings.

Recently expired as of January 1, the MFDRA was signed into law December 2007 with the purpose of aiding underwater mortgage holders. Fitch Ratings projects a negative effect from the MFDRA’s expiration.

The act was designed to provide tax relief by allowing certain borrowers to exclude mortgage debt that was cancelled or forgiven by the lender through a foreclosure, short sale, or loan modification—debt that would normally be considered income for tax purposes.

Without this relief, Fitch expects a decline in the volume of short sales and principal forgiveness modifications. The agency cites three reasons for its projection:

  • Without the tax exemption, there is less incentive for distressed borrowers to agree to a voluntary property sale that will not pay the loan off in full, likely increasing the number of involuntary foreclosure sales.
  • The MFDRA's expiration provides less incentive for servicers to offer principal forgiveness modifications. The tax burden on the borrower increases the likelihood of redefault.
  • Servicers may increasingly opt for principal forbearance, which requires the borrower to repay the reduced principal amount at the end of the loan term.

Congress is currently considering extending the tax relief through 2015 or 2016.

For more information contact

Jerry Gusman, The Gusman Group

(888) 213-4208

Jerryggroup@aol.com

FIFTEEN FUN REAL ESTATE FACTS

by Short Sale Agent Jerry Gusman on 01/28/14


Sometimes you need to know about fixed-rate mortgages, flood insurance and Fannie Mae. And sometimes you just want the fun facts.

So for no other reason than it’s just kind of interesting, here is are fifteen fun real estate facts to liven up your Thursday.


1.      Home is where the heart (and equity) is: 61.4% of the average American family’s net worth is in home equity.  


2.      A homeowner’s net worth is over thirty times greater than that of a renter.


3.      TGIF! The best day of the week to list your home is Friday.


4.      Historically, the best month of the year to sell is April. Although we would dispute that –maybe it’s the most common month, but often sellers fare better in the ‘off months’ of summer and winter.


5.      Odds are you’re going to need some help selling: Homeowners have a 120% better chance of selling their home when using REALTOR®.


6.      In 2013, NAR reports that the median age of first-time buyers was 31. On average these buyers purchased a 1,670 square-foot home costing $170,000 (guess they don’t live around here!).


7.      The typical repeat buyer was 52 years old. On average these buyers purchased a 2,060-square foot home costing $240,000.


8.      According to a NAR Community Preference Survey, 78% of respondents said that the neighborhood is more important to them than the size of the home.


9.      57% said they’d give up a home with a larger yard if they could have a shorter commute. 


10.  NAR reports that 80% of home buyers believe their home is a good investment, 44 percent saying it’s better than stocks.


11.  Buyers searched a median of 12 weeks and visited 10 homes. If you live in Greater Boston, you know this is a much lower number on both fronts.


12.  90% of home buyers who used the Internet to search for a home purchased through a real estate agent.


13.  90% of buyers financed their purchase.


14.  In Scotland, homeowners paint their front door red when they pay off their mortgage.


15.  And finally, don’t be so quick to change your brass to brushed nickel! Brass doorknobs disinfect themselves.  It’s called the oligodynamic effect: the ions in the metal have a toxic effect on spores, fungi, viruses, and other germs.


For more information contact


Jerry Gusman

The Gusman Group

(888) 213-4208

jerryggroup@aol.com


Despite Fewer Foreclosure Starts, Distressed Sales Rose in 2013

by Short Sale Agent Jerry Gusman on 01/24/14

Despite Fewer Foreclosure Starts, Distressed Sales Rose in 2013

Despite Fewer Foreclosure Starts, Distressed Sales Rose in 2013


Despite declining foreclosure starts over the year, distressed sales made up a higher percentage of overall home sales in 2013 than they did the previous year, according to the U.S. Residential & Foreclosure Sales Report released Thursday by RealtyTrac. The report also revealed an uptick in cash purchases at the close of the year.

Foreclosure sales—which include sales to third-party buyers at foreclosure auction and sales of REOs—combined with short sales to make up 16.2 percent of residential property sales in 2013, an increase from 14.5 percent in 2012, according to RealtyTrac.

“It may surprise some to see distressed sales rising in 2013 given that new foreclosure activity dropped to a seven-year low for the year,” said Daren Blomquist, VP at RealtyTrac. However, Blomquist pointed out that “there are still more than 1.2 million properties in the foreclosure process or bank-owned, providing a sizable pool of inventory that the housing market is in the process of absorbing.”

About 29 percent of home sales in 2013 were all-cash deals, up from 19.4 percent in 2012. All-cash sales increased during the month of December and were significantly higher than a year ago. Cash deals made up 42.1 percent of December’s home sales, according to RealtyTrac, up from a share of 38.1 percent in November and just 18 percent in December 2012.

Cash purchases made up more than half of December home sales in five states, including Florida (62.5 percent), Wisconsin (59.8 percent), Alabama (55.7 percent), South Carolina (51.3 percent), and Georgia (51.3 percent).

Institutional investors were more active in the residential market in 2013 than in 2012, contributing to 7.3 percent of the year’s home sales, up from 5.8 percent the previous year. The share of institutional investor activity in December was slightly higher and was also up from the previous month. Institutional investors contributed to 7.9 percent of December’s home sales.

They were most active in December in Jacksonville, Florida (38.7 percent); Knoxville, Tennessee (31.9 percent); Atlanta, Georgia (25.2 percent); Cape Coral-Fort Myers, Florida (24.9 percent); and Cincinnati, Ohio (19.3 percent).

The percentage of home sales that were purchased by third parties at foreclosure auctions doubled over the year in 2013, rising from 0.5 percent in 2012 to 1 percent last year, RealtyTrac reported.

About 5.8 percent of home sales in 2013 were short sales, and 9.3 percent were REO sales, according to RealtyTrac. Short sales made up 5.7 percent of December’s home sales and were most common in Nevada (15.3 percent), Florida (14.4 percent), and Illinois (9.0 percent). REO sales contributed to 9.3 percent of sales in December and were most common in Nevada (18.9 percent), Michigan (18.4 percent), and Ohio (17.8 percent).

The national median home price in December was $168,391, according to RealtyTrac. Distressed homes sold for about 38 percent less than non-distressed homes. The median price of a distressed home was $108,494, compared to a non-distressed median price of $174,401.

For more information contact

Jerry Gusman, The Gusman Group

(888) 213-4208

jerryggroup@aol.com

Which Hidden Gems Make Cut as Year's Hottest Neighborhoods?

by Short Sale Agent Jerry Gusman on 01/15/14

Which Hidden Gems Make Cut as Year's Hottest Neighborhoods?


Redfin on Tuesday came out with its annual list of the country’s “hottest” neighborhoods. The company ranked 105 neighborhoods across 21 major markets that have grown the most in popularity during the four months leading into 2014.



Following are 2014’s 10 hottest neighborhoods, according to Redfin, along with their median sale price in 2013:

#1 Bernal Heights North Slope–San Francisco, CA | $982,500 
#2 Eagle Rock–Los Angeles, CA | $539,000 
#3 Morningside-Lenox Park–Atlanta, GA | $540,375 
#4 Upper Chevy Chase–Washington, D.C. | $873,000 
#5 Desert Shores–Las Vegas, NV | $179,525 
#6 Barrington Oaks–Austin, TX | $303,750 
#7 Phinney Ridge–Seattle, WA | $502,625 
#8 Concordia–Portland, OR | $355,000 
#9 City Park–Denver, CO | $394,500 
#10 Humboldt Park–Chicago, IL | $189,450 

The company says at first glance, it appears the common threads among the top neighborhoods are highly ranked schools and scenic community parks. However, Redfin agents have found that the real trend driving neighborhood popularity in 2014 is a short commute at an affordable price. People’s top neighborhood choices offer a short drive to or easy access to a commuter rail line at prices that are not the most expensive in the city, the company explained. “After a year in which prices popped 13 percent, Americans are checking out still-close-in but often-overlooked neighborhoods in search of affordability, even if means less-fashionable restaurants or a home that needs a little more work,” said Redfin CEO Glenn Kelman.

He likened this year’s hottest markets to “the Susan Luccis of neighborhoods” that are “finally getting their due.” Kelman continued, “The buyers who have made these alternative spots so hot aren’t like the ones we saw in the last boom, who just borrowed more and paid up. Our clients in 2014 have settled on a price range, and they’re sticking to it.”

To arrive at its 2014 “hot” list, the Seattle-based, technology-centric brokerage says it turned to its website users, analyzing hundreds of millions of pages they visited and homes they added as “favorites” to monitor for price changes or sales. Redfin’s evaluation also takes into account insights about which neighborhoods are “buzzing” from hundreds of real estate agents within the 21 major U.S. cities included in the company’s coverage area.

Recognizing that most homebuyers aren’t scouring the United States from coast-to-coast to find their next home but instead focus their efforts on finding the right neighborhood within the confines of an individual city and its immediate vicinity, Redfin also compiled separate listings of what it calls “the top five rising stars” within each of the 21 markets covered in its study. The company’s analysis of 2014’s hottest neighborhoods by metro is available on its website.

For more information contact

Jerry Gusman, The Gusman Group

(888) 213-4208

Jerryggroup@aol.com

Bill Seeks to Extend Federal Tax Exemption for Forgiven Mortgage Debt

by Short Sale Agent Jerry Gusman on 01/15/14

Bill Seeks to Extend Federal Tax Exemption for Forgiven Mortgage Debt


Congressman Bill Foster (D-Illinois) introduced the Homeowners Debt Relief Extension Act (H.R. 3856) on Tuesday. The bill would extend the mortgage debt tax exemption that’s been in place since 2007 for another two years.

The Mortgage Debt Relief Act of 2007 makes debt that is reduced or cancelled through a loan modification or debt forgiven through a foreclosure or short sale tax-exempt. Other criteria also apply, such as the indebtedness must be on a principal residence and the maximum amount that can be claimed for the tax break is $2 million.

Since 2007, Congress has extended this tax relief to homeowners so that they are not liable for taxes on the difference between the house’s value and the loan modification or between the house’s value and the amount of a foreclosure sale or short sale. This tax relief expired on December 31, 2013, however, and so far, no extension has been passed by lawmakers, though homeowner advocates are lobbying heavily to reinstate the mortgage debt tax exemption.

Foster’s bill would ensure any qualifying reduction or cancellation of mortgage debt is not considered taxable income by extending this tax relief through January 1, 2016, for debt forgiven after December 31, 2013.

Foster’s proposal calls for the costs of such an extension to be offset by repealing a tax break in the Internal Revenue Code’s Section 199 for oil and gas companies. Foster says the Section 199 deductions are no longer necessary since oil and gas companies are making billions in profits each year.

“With millions of struggling homeowners still underwater on their mortgages, now is not the time to cut off this tax credit,” Rep. Foster said. “We shouldn’t be offering up millions in tax breaks to oil and gas companies, while leaving working families, still struggling to recover from the recession, with a bigger tax bill.”

For more information contact

Jerry Gusman, The Gusman Group

(888) 213-4208

Jerryggroup@aol.com

Freddie Mac: Short Sales More Attainable Than Homeowners Think

by Short Sale Agent Jerry Gusman on 01/14/14

Freddie Mac: Short Sales More Attainable Than Homeowners Think


When a homeowner is unable to make their mortgage payments or owes more on the home than it’s worth, a short sale can be a viable option that avoids the negative implications of a foreclosure for both the homeowner and the mortgage-holder.

However, common perceptions of short sales as difficult, lengthy, restricted to specific circumstances, and harmful to personal credit cause many to shy away from the option.

In a blog post Monday, Freddie Mac SVP Tracy Mooney aimed to set the record straight regarding Freddie Mac short sales.

While short sales have been known to drag on in the past, Freddie Mac’s Standard Short Sale requires servicers to approve or deny a homeowner’s application within 30 days. After approval, the short sale should close within 60 days, according to Mooney.

Misperceptions regarding eligibility requirements are also a barrier, Mooney says. She clarified that short sales can be an option for owners of investment properties or second homes, those with second mortgages, and homeowners who are current on their loans.

Those who are current on their loans must meet general eligibility requirements, “the property must also be your primary residence and your debt-to-income ratio must be greater than 55 percent,” Mooney said.

For those who have second mortgages, Mooney said Freddie Mac is “offering up to $6,000 to subordinate lien holders—who are like second mortgage companies—in exchange for releasing the subordinate lien, extinguishing the underlying indebtedness, and waiving the right to pursue deficiency.”

Another major source of concern for homeowners is the impact a short sale will have on their credit scores and their ability to obtain another mortgage in the future.

“While only the credit reporting agencies that calculate your credit score will know for sure, it’s possible that a short sale might be better for your score than a foreclosure,” Mooney said.

“Even if it isn’t, a short sale gives you time to find a more affordable place to live and exit gracefully from your obligation,” she added.

Mooney also assured homeowners that in most cases, they will not be on the hook for the full mortgage loan amount, though they may be required to pay a portion of the unpaid balance after the short sale closes.

When a borrower enters into a short sale, the impact on his or her ability to obtain a new mortgage depends on the circumstances, according to Mooney.

Those who enter into a short sale after a financial hardship such as a medical emergency or loss of income must wait 24 months to re-establish credit and apply for a new mortgage loan, while those who opt for a short sale due to “personal financial mismanagement” must wait at least 48 months before applying for another mortgage, according to Mooney.

Mooney recommends homeowners consider a short sale if they do not qualify for other loss mitigation options, need to move to obtain or maintain their jobs, or are underwater.

For more information contact

Jerry Gusman, The Gusman Group

(888) 213-4208

Jerryggroup@aol.com


Even in Buyer's Market, Homeownership Expected to Decline

by Short Sale Agent Jerry Gusman on 12/27/13

Even in Buyer's Market, Homeownership Expected to Decline

Zillow expects conditions next year to be a bit friendlier to homebuyers—but that doesn’t mean we’ll necessarily see more owner-occupied housing, experts at the real estate marketplace say.

Looking at ongoing trends, Zillow made four major predictions about the course of housing over 2014.

First, home values are forecast to rise by 3 percent at the national level over the year. The prediction projects a retreat from 2012 and 2013 levels, which Zillow says were “unsustainable and well above historic norms for healthy, balanced markets.”

“This year, home value gains will slow down significantly because of higher mortgage rates, more expensive home prices, and more supply created by fewer underwater homeowners and more new construction,” said Dr. Stan Humphries, Zillow’s chief economist. “For buyers, this is welcome news, especially for those in markets where bidding wars were becoming the norm and bubble-like conditions were starting to emerge.”

Second, the company predicts mortgage rates will reach 5 percent by the end of the year—a level not seen since early 2010—as the economy improves and the Federal Reserve adapts its policies. That news may not be as bright for buyers, but Erin Lantz, director of mortgages for Zillow, says it’s important to keep perspective.

“While this will make homes more expensive to finance—the monthly payment on a $200,000 loan will rise by roughly $160—it’s important to remember that mortgage rates in the 5 percent range are still very low,” Lantz said. “Because affordability is still high in most areas relative to historic norms, rising rates won’t derail the housing recovery.”

However, Lantz noted affordability has already turned into an issue for some markets, particularly those in California.

For its third prediction, Zillow again turned to the positive, forecasting a clearer road to mortgage credit.

“The silver lining to rising interest rates is that getting a loan will be easier. Rising rates means lenders’ refinance business will dwindle, forcing them to compete for buyers by potentially loosening their lending standards,” Lantz said.

And finally, the last prediction: Homeownership rates will fall to their lowest level in nearly two decades, dipping below 65 percent for the first time since 1995.

“The housing bubble was fueled by easy lending standards and irrational expectations of home value appreciation, but it put a historically high number of American households—seven out of 10—in a home, if only temporarily,” Humphries said. “That homeownership level proved unsustainable and during the housing recession and recovery the homeownership rate has floated back down to a more normal level, and we expect it to break 65 percent for the first time since the mid-1990s.”

Zillow also combined data on unemployment, population growth, and its own Home Value Forecast to glimpse into what it believes will be the hottest markets in 2014.

The list includes a diverse set of metros spread across all regions of the United States, including: Salt Lake City, Utah; Seattle, Washington; Austin, Texas; San Jose, California; Miami, Florida; Raleigh, North Carolina; Jacksonville, Florida; San Diego, California; Portland, Oregon; and Boston, Massachusetts.

For more information cvontact

Jerry Gusman

The Gusman Group

(888) 213-4208

SHORT SALE AGENT SERVING ALL SOUTHERN CALIFORNIA CITIES INCLUDING:
Rancho Cucamonga, Fontana, San Bernardino, Riverside, Moreno Valley, Perris, Hemet, Murrieta, Temecula, Lake Elsinore, Sherman Oaks, Canoga Park, Calabasa, Castaic, Canyon Lake, Corona, Chino, Chino Hills, Upland, San Dimas, La Verne, Covina, Azusa, Pasadena, Los Angeles, Burbank, Diamond Bar, Anaheim, Orange,  Fullerton, Tustin,  Irvine , Huntington Beach, Costa Mesa, Lake Forest, San Clemente, Dana Point, San Juan Capistrano, Mission Viejo, Laguna Niguel, Laguna Beach, San Diego, Oceanside, Carlsbad, La Jolla, Chula Vista, Victorville, Hesperia, Beaumont, Yucaipa, Loma Linda, Grand Terrace, Ontario, Yorba Linda, Anahiem Hills, Newport Beach, Hollywood, Beverly Hills, Thousand Oaks, Sherman Oaks, Reseda, Glendale, San Marino, Rosemead, San Gabriel, Whittier, Long Beach, Lakewood, Cerritos, La Mirada, Torrance, Gardena, Norwalk, Redondo Beach, Palm Springs, Palm Desert 
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