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RealtyTrac: Fla. leads in 3Q foreclosures

October 15, 2014

foreclosure_stampIRVINE, Calif. – Oct. 15, 2014 – In the third quarter, Florida once again had the highest state foreclosure rate – default notices, scheduled auctions and bank repossessions – in the nation, according to RealtyTrac’s U.S. Foreclosure Market Report.

Still, Florida foreclosures declined both month-to-month and year-to-year, at 4 percent and 17 percent respectively. One in every 153 Florida housing units had a foreclosure filing – a total of 58,589 Florida properties.

By metro area, Orlando, Atlantic City and Macon, Ga., posted the nation’s top metro foreclosure rates in the third quarter.

With one out of every 117 housing units facing a foreclosure filing in the third quarter, Orlando posted the highest foreclosure rate among metropolitan statistical areas (MSAs) with a population of 200,000 or more. Orlando saw its foreclosure rate decline 1 percent since the second quarter, but it rose 16 percent year-to-year.

In Ocala and Palm Bay-Melbourne-Titusville, third quarter foreclosure activity decreased year-to-year. However, the two cities still posted the nation’s fourth and fifth highest overall metro foreclosure rates in the third quarter.

The remaining five metro areas with top 10 foreclosure rates were all in Florida:

* Miami at No. 6 (one in every 137 housing units with a foreclosure filing)
* Jacksonville at No. 7 (one in every 140 housing units)
* Tampa at No. 8 (one in every 148 housing units)
* Lakeland at No. 9 (one in every 158 housing units)
* Port St. Lucie at No. 10 (one in every 175 housing units).

Florida also remains one of the top states for the length of time it takes to complete a foreclosure, ranking second at 951 days. Only New Jersey (1,064 days) foreclosures take longer. Hawaii (937 days), New York (902 days) and Illinois (889 days) round out the top five states.

National foreclosures

Nationally, RealtyTrac reports that third quarter foreclosures were down 16 percent year-to-year but up 0.42 percent quarter-to-quarter. Looking at just September, U.S. foreclosure activity decreased on a year-over-year basis for the 48th consecutive month.

“September foreclosure activity was back to pre-housing bubble levels nationwide, in large part thanks to a continued slide in bank repossessions,” says Daren Blomquist, vice president at RealtyTrac. “However, a recent rise in scheduled foreclosure auctions in many markets across the country shows lenders are continuing to clean house of lingering delinquent loans. This rise in scheduled auctions foreshadows a corresponding rise in bank repossessions and auction sales to third party buyers in the coming months.”

© 2014 Florida Realtors®

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Debt collectors can call years after a foreclosure

October 15, 2014

Cara-menghadapi-debt-collectorWASHINGTON – Oct. 15, 2014 – Thousands of Americans who lost their homes to foreclosure years ago have moved on and rebuilt their finances, only to find that their past problem isn’t staying in the past.

In more and more cases, mortgage lenders are contacting these homeowners and attempting to collect the debt forgiven as part of a short sale or foreclosure.

“Using a legal tool known as a ‘deficiency judgment,’ lenders can ensure that borrowers are haunted by these zombie-like debts for years, and sometimes decades, to come,” Reuters reports. (Effective July 1, 2013, the lender has one year on residential properties to initiate the process.)

“Before the housing bubble, banks often refrained from seeking deficiency judgments, which were seen as costly and an invitation for bad publicity. Some of the biggest banks still feel that way. But the housing crisis saddled lenders with more than $1 trillion of foreclosed loans, leading to unprecedented losses. Now, at least some large lenders want their money back, and they figure it’s the perfect time to pursue borrowers: many of those who went through foreclosure have gotten new jobs, paid off old debts and, in some cases, bought new homes.”

Mortgage giant Fannie Mae is one of the most aggressive in pursuing deficiency judgments. Of the 595,128 foreclosures the government-sponsored enterprise was involved in through owning or guaranteeing the loan, it has referred 293,134 to debt collectors for possible deficiency judgment, according to a report by the Inspector General, reflecting the time period from January 2010 through January 2012.

Some of the largest mortgage lenders – JPMorgan Chase, Bank of America, Wells Fargo & Co., and Citigroup – say they don’t usually pursue a deficiency judgment, but they do reserve the right to do so.

“We may pursue them on a case-by-case basis, looking at a variety of factors, including investor and mortgage insurer requirements, the financial status of the borrower, and the type of hardship,” says Wells Fargo spokesman Tom Goyda.

Many borrowers may be surprised to learn that their years-old foreclosure isn’t really behind them. For example, former homeowner Danell Huthsing thought she was in the clear after a foreclosure in 2008 on a home she shared with her boyfriend. But this summer, she was served with a lawsuit demanding $91,000 for the amount of mortgage still unpaid after the home was foreclosed and sold.

Huthsing plans to appeal, but if she loses, the debt collector who filed the lawsuit will be able to freeze her bank account, garnish up to 25 percent of her wages, and seize her paid-off car, Reuters reports.

“For seven years, you think you’re good to go, that you’ve put this behind you,” said Huthsing. “Then wham, you get slapped to the floor again.”

Source: “Americans Face Post-Foreclosure Hell as Wages Garnished, Assets Seized,” Reuters (Oct. 14, 2014)

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Buyers ready, but home seller wants to back out

May 16, 2014

Man Signing ContractFORT LAUDERDALE, Fla. – May 15, 2014 – Question: We found a house and entered into a contract to buy it. We did our inspections, got our mortgage loan set up and are ready for the closing about three weeks from now. Last night, the seller called and told us that she had an unexpected issue and will not be able to sell us the house. But don’t we have rights here? And do we have to wait until the closing date comes and goes before we start taking action to enforce the contract?

Answer: Most contracts contain contingencies allowing a party to cancel the deal if certain things happen, such as a bad inspection or the financing falls through. You need to carefully review your contract to make sure that the seller does not have a contractual way to cancel. If not, she is bound by what she agreed to, meaning that she must sell you the house.

Because she told you clearly that she is not moving forward, you don’t have to wait until the closing date to start enforcing the agreement. You or your lawyer should send her a letter now asking her to confirm in writing whether she is moving forward to closing. Once she confirms that she isn’t, most contracts give you the right to sue her for “specific performance,” meaning that you can ask the court to force her to sell you the property.

The practical problem with this is that it can take some time for the case to wind its way through the courts. So if you have concerns with where to live while this happens, or you are worried that you will lose your mortgage loan, this might not be the best option for you. It might be better to get your money back and move on to a similar house without all the trouble. But if this truly is the house you want, you appear to have the law on your side.

About the writer: Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program.

The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.

Copyright © 2014 Sun Sentinel, Gary M. Singer. Distributed by MCT Information Services.

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Fla. home sale prices up 11.4% year-to-year in Dec.

January 24, 2014

ORLANDO, Fla. – Jan. 23, 2014 – Florida’s housing market reported higher median prices, more new listings, fewer days on the market and the continued stabilization of inventory in December, according to the latest housing data released by Florida Realtors®. Closed sales of single-family homes statewide totaled 19,497 last month, up 8.6 percent over the December 2012 figure.

“Florida’s housing market continues to demonstrate its recovery,” says 2014 Florida Realtors President Sherri Meadows, CEO and team leader, Keller Williams, with market centers in Gainesville, Ocala and the Villages. “December marked over two years – 25 months – of consecutive gains in statewide median sales prices, year-over-year, for both single-family homes and for townhouse-condo properties. The rising prices, along with the renewed strength of the state’s housing market, are encouraging more homeowners to list their properties for sale. Statewide, new listings for single-family homes increased 23.8 percent in December, while new townhome-condo listings rose 8.1 percent. The rising prices mean increased equity, which is another reason people are listing properties.

“Properties also are taking less time to sell, another trend that is sparking sellers’ interest,” Meadows added. “In December, the median days on market (the midpoint of the number of days it took for a property to sell that month) was 50 days for single-family homes and 51 days for townhouses and condos. That means 50 percent of homes on the market in Florida sell in less than two months.”

The statewide median sales price for single-family existing homes last month was $172,630, up 11.4 percent from the previous year, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in December was $137,500, up 17 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

According to the National Association of Realtors (NAR), the national median sales price for existing single-family homes in November 2013 was $196,200, up 9.4 percent from the previous year; the national median existing condo price was $197,400. In California, the statewide median sales price for single-family existing homes in November was $422,210; in Massachusetts, it was $316,500; in Maryland, it was $257,677; and in New York, it was $229,000.

Looking at Florida’s townhome-condo market, statewide closed sales totaled 8,364 last month, down slightly (2.5 percent) compared to December 2012. However, the closed sales data reflected fewer short sales and cash-only sales in December: Traditional sales in Florida rose 23.3 percent for single-family homes and 6 percent for condo-townhome properties. Closed sales typically occur 30 to 90 days after sales contracts are written.

“Florida’s market exhibited all the signs of the annual holiday lull,” said Florida Realtors Chief Economist Dr. John Tuccillo. “Because of things like the reduced number of workdays and the presence of other important things to do, the statistics at this time of year don’t necessarily give a good read on where the market really is. Three continuing trends to note, however, are rising inventories, declining cash sales and the lessening presence of distressed property sales.

“The first two are indicative of reduced investor activity and thus a return to a more normal market. The last is a product of rising values that have increased market sales relative to short sales and foreclosures.”

Inventory was at a 5.5-months’ supply in December for single-family homes and at a 5.8-months’ supply for townhouse-condo properties, according to Florida Realtors.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.46 percent in December 2013, up from the 3.35 percent average recorded during the same month a year earlier.

To see the full statewide housing activity reports, go to Florida Realtors Media Center under Latest Releases, or download the December 2013 data report PDFs under Market Data.

© 2014 Florida Realtors®

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Economists keep rosy view for 3% growth in 2014

September 9, 2013

NEW YORK – Sept. 9, 2013 – Business forecasters maintained their rosy view of the U.S. economy in 2014, predicting 3 percent growth by the second quarter of next year, low inflation and improving employment.

The top economists surveyed by the National Association of Business Economics (NABE) between Aug. 8 and Aug. 20 also said there’s an 80 percent likelihood that the pickup in growth will prompt the Federal Reserve to trim its monthly $85 billion purchases of mortgage bonds and Treasury bills next year.

The NABE’s 43 respondents said in a report released Monday that there’s a 45 percent chance the Fed will begin its so-called “tapering” as early as this year.

But economists trimmed their expectations for the second half of 2013 since the last survey, in May.

The economists predicted that real gross domestic product would grow at a 2.3 percent annualized rate in the third quarter through September, down from 2.5 percent seen earlier; and 2.6 percent in the fourth quarter, down from 2.8 percent seen earlier. They were less optimistic about consumer spending, industrial production and private investment in nonresidential structures, equipment and software.

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Slowdown in home prices? No reason to panic

August 14, 2013

rising-prices-300x225NEW YORK – Aug. 14, 2013 – Though home prices have risen nearly 12 percent from a year ago, a slowdown is expected soon. But many analysts say it’s no cause for concern.

“Prices are still going to rise – just not as at brisk a pace as we’ve seen over the past year,” The Wall Street Journal reports. “This should calm down those pundits who have fretted over a new crop of housing bubbles.”

According to a report by Goldman Sachs economists, home prices will likely moderate because they have returned to “fair value” and are no longer being viewed as “undervalued,” as they were for the past two years. Also, a rise in mortgage rates may cause some buyers to re-evaluate their options.

For the first time this year, buyer traffic dropped below agents’ expectations, and “the next few months will be crucial to determining whether this is just a pause or something more,” the Goldman Sachs report notes.

The report also notes that investors will likely slow their purchases as the number of foreclosures starts to dry up. What’s more, the inventory of homes for sale is starting to loosen as more sellers look to put their homes on the market. Those sellers, in turn, will then be looking to purchase another home, so prices will still likely continue to rise until new-home construction catches up.

“With the improving underlying housing demand driven by household formation and economic recovery, we think housing activity will remain on an upward trajectory, despite occasional ups and downs along the way,” says the Goldman report.

Source: “Why Home-Price Growth Will Slow,” The Wall Street Journal (Aug. 12, 2013)

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Higher Home Prices Cool Buying Frenzy

June 6, 2013

Daily Real Estate News | Thursday, June 06, 2013

The recent rise in home prices has more investors concerned that it will be increasingly difficult to turn a profit from their rental investments. Nearly half of U.S. real estate investors say they expect to purchase fewer rental homes in the next year, according to a recent survey conducted by polling firm ORC International.

Just 10 months ago, the percentage of investors who said they intend to buy fewer homes stood at 30 percent—compared to 48 percent today. Only about 20 percent of the investors surveyed say they plan to buy more homes in the next year—a drop from the 39 percent who reported they intend to buy more homes last August.

More than half of the investors surveyed who own rental properties say they plan to hold them for at least five years or more, and 33 percent plan to hold them for 10 years or more.

“Higher prices are reducing returns on investment and investors are responding by cutting back on their purchasing plans until conditions sort out,” says Chris Clothier, a partner in MemphisInvest.com and Premier Property Management Group. “Fewer foreclosures, rising property values, and competition from hedge funds are making it tough to find good ideals on distressed sales. On the other hand, investors are planning to hold onto their rental properties for at least eight to 10 years and realize the benefits of rising rents and low vacancy rates. Cash flow is much more important than appreciation.”

Source

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A Primer on Real Estate’s Shadow Inventory

April 3, 2013

By Sarah Parr

The real estate industry and the consumer economy have some recent, positive news. CoreLogic published a report last week indicating that the shadow inventory of homes is down 28 percent from when it peaked in 2010. CoreLogic determined the shadow inventory figure by calculating the number of very delinquent homes, properties in foreclosure and homes held as REOs (real estate-owned) by mortgage servicers, but are not yet listed on multiple listing services (MLS).

As of January 2013, the shadow inventory includes 2.2 million housing units, or in real estate terms, nine months of supply. Florida currently has 16 percent of the total shadow inventory in the United States.

Defining the shadow inventory

In real estate, the shadow inventory refers to all of the homes held by banks, but not offered for sale, and homes that people are waiting to put on the market when prices increase even more. Vacant houses in some stage of foreclosure, known as “zombie foreclosures,” also comprise about half or more of the shadow inventory. Many homeowners anticipate foreclosure and move out of the house, leaving it vacant for a period of time.

What creates the shadow inventory?

The finalization of the National Mortgage Settlement in April 2012 caused the shadow industry to grow because of a 59 percent spike in properties in some stage of foreclosure, according to RealtyTRAC. Because of the settlement, banks have been required to work with homeowners on loan modifications, and their homes are kept off the market. The states in which the shadow inventory grew are mostly judicial process states since these states are more prone to having court backlogs of foreclosure cases. Foreclosure cases in these states typically take much longer to process.

The effects on real estate

Real estate professionals> initially feared properties in the shadow inventory would be listed all at once and depress surrounding property values. Reuters reported that properties in the shadow inventory have been listed in miniature spurts, though, and the small inventory has actually caused an increase in prices in some areas. Investors have also helped mitigate potential flooding of the market by buying up some of the shadow inventory, according to a TIME article. These investors are a part of firms that buy out distressed real estate when it first hits the market. They often beat individual buyers with cash offers, sometimes before properties are listed.

All the same, a shadow inventory can create ambiguity for homeowners looking to sell their homes and for predicting when a local market can expect full recovery in the housing market. The shadow inventory can also affect overall housing inventory data.

Sarah Parr is a Central Florida-based writer who blogs about foreclosure issues for Altamonte Springs foreclosure lawyers.

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Big discounts on foreclosures fading

March 12, 2013

NEW YORK – March 12, 2013 – Homebuyers may not get as great of a deal on a foreclosure as they once did, according to Paul Diggle from Capital Economics in a new report.

Foreclosure starts are falling and the inventory of foreclosures has been decreasing, which has caused the discount on foreclosures to lessen.

The discount on foreclosed homes compared to other homes has fallen to a 12 percent average, according to Diggle. That was about the same percentage prior to the housing crash, he says. Last year the foreclosure discount averaged about 30 percent.

“Ultra-low mortgage interest rates and steady, if not spectacular, job creation could mean that the delinquency rate and foreclosure start rate are falling quickly,” Diggle writes.

Source: “Those Amazing Deals on Foreclosed Homes Are Disappearing,” Business Insider (March 7, 2013)

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Interest-only mortgages begin to reappear

March 7, 2013

NEW YORK – March 7, 2013 – Well-off borrowers increasingly are turning to interest-only mortgages, the same ilk of loan that drove many homeowners into foreclosure in recent years. With this product, borrowers pay interest but no principal during the first few years of the loan. The monthly payments can be 30 percent to 40 percent lower than regular mortgages.

Interest-only mortgages accounted for about 14 percent of private mortgage originations from January 2012 through October, according to the latest data from real estate analytics firm CoreLogic. Under new mortgage rules by the Consumer Financial Protection Bureau, lenders that continue to provide interest-only mortgages starting in 2014 could face greater liability in lawsuits filed by borrowers who end up in foreclosure.

Lenders say they provide these loans only to lower-risk, affluent borrowers with significant assets.

Some borrowers find these mortgages are more flexible, but they do come with risks. Borrowers will not build equity in homes with interest-only payments, and a fall in housing prices could leave borrowers owing more on the home than it is worth.

Source: “The Return of Interest-Only Mortgages,” Marketwatch (03/01/13)

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