Foreclosures

Shadow Inventory Unlikely to Hurt Market

Nearly 5 million houses and condos, of which the mortgages are delinquent, will go through foreclosure over the next few years, a new study by John Burns Real Estate Consulting Inc. concludes.

This represents more than half of the 7.7 million households now behind on their mortgage payments. The situation is worst in Arizona, California, Florida, and Nevada. Burns calculates that there is an inventory equivalent to 27 months of sales in Orlando, 24 months in Miami, and 18 months in Las Vegas.

Consulting firm CEO John Burns says there is strong investor demand for these properties, so as long as employment continues to recover and interest rates remain moderate, these sales won’t have much impact on overall prices.

Source: The Wall Street Journal, James R. Hagerty (02/16/2010)

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
(404) 431-2117
Web: www.elliottyouragent.com
Blog – www.elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

Luxury Homes in Foreclosure Go to Auction

An increasing number of homes with multi-million dollar price tags are going into foreclosure and that’s driving desperate owners to sell at auction.

In 2009, 18,817 properties worth at least $1 million faced foreclosure. That’s up 162 percent from 2008, reported foreclosure marketer RealtyTrac.

Prices of $1 million-plus properties are down about 25 percent since 2007 with an increasing number of desperate home owners choosing auction sales over waiting for years for the right buyer to come along.

“Any home owner selling in this economy is on the market because they have to be,” says John Brian Losh, CEO of LuxuryRealEstate.com, a Web site that specializes in high-end properties. “If they’re frustrated and they can’t figure out why they haven’t gotten any offers, they might think an auction will generate some interest.”

Source: Forbes, Francesca Levy (02/11/2010)

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
(404) 431-2117
Web: www.elliottyouragent.com
Blog – www.elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

Foreclosure Prevention Has Aided 116,000

The federal foreclosure prevention program has helped about 12 percent of borrowers who applied for help since the plans were announced a year ago, the Treasury Department says.

About 1 million borrowers initiated the application process, and as of January, about 116,000 home owners–12 percent–had their loans modified. But administration officials say another 76,000 applications have been approved and are awaiting signatures.

Another 830,500 home owners are currently in a trial modification review period during which banks make sure payments are feasible for the borrower and ensure the qualifications of the assistance program are met.

For those who qualify, the Home Affordable Modification Program brings monthly loan payments down to 31 percent of home owners’ pre-tax income.

Nearly 60,500 people have been denied permanent modifications.

Source: CNNMoney, Tami Luhby (02/17/2010) and USA TODAY, Stephanie Armour (02/17/2010)

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
(404) 431-2117
Web: www.elliottyouragent.com
Blog – www.elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

Commercial Loans Jeopardize Banks

The Congressional Oversight Panel reported Wednesday that commercial real estate loan failures could jeopardize bank stability.

The panel said most of the bad loans were made at the height of the real estate bubble and are concentrated at smaller banks, which make 40 percent of all small business loans.

“We haven’t seen the worst of the problems yet in terms of loan defaults. This is a large issue for a major portion of the banks out there,” said Matthew Anderson, a partner at research firm Foresight Analytics, which provided data for the report.

Source: MarketWatch, Josh Lipton (02/17/2010)

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
(404) 431-2117
Web: www.elliottyouragent.com
Blog – www.elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

Vacant Homes Up Slightly

Vacant homes in the U.S.—including foreclosures, residences for sale, and vacation properties—rose to 18.8 million in the third quarter, according to the U.S. Census Bureau.

The record high for vacancies was 18.95 million in the first quarter of this year. There were 18.4 vacancies in the third quarter last year.

In total, there were 130.3 million homes in the U.S. in the third quarter, according to the census. About 2 million were for sale, 4.6 million for rent, and 4.6 million were vacation homes that are only used a portion of the year.

Source: Bloomberg, Kathleen M. Howley (10/29/2009)

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
(404) 431-2117
Web: www.elliottyouragent.com
Blog – www.elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

How to Spot Foreclosure-Prevention Scammers

Here’s how the most common foreclosure-prevention scams work:

The desperate home owner gets a letter that says something like, “We know you’re having a hard time. We have a pipeline to your lender and can help you save your home. Call this toll-free number now.”

Home owners call the number and agree to pay $1,200 to $1,500 upfront for help with their mortgage. Nothing happens. Their home still goes into foreclosure.

Harold Kirtz, a lawyer for the Federal Trade Commission who is prosecuting these scammers, says victims are often well educated and financially savvy, but they also are “in a very vulnerable state.”

Here are some red flags that should make a home owner run in the opposite direction:

* If the company guarantees success. Nobody can guarantee a lender won’t foreclose or will modify a loan.
* If the company wants money upfront. “We can’t say all advance fees are illegal,” Kirtz says, “But in most cases they’re probably bogus.”
* If the company wants the home owner to send mortgage checks directly to the modification firm. The only certainty there is that the company will cash the checks.

Source: Washington Post Writers Group, Kenneth R. Harney (09/13/2009)

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
o- (404) 564-5560
Blog – http://elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

Florida Panel Urges Mediation on Foreclosures

A panel chaired by the Florida judiciary is recommending strategies to clear out the backlog of foreclosed properties in the state, including mediation for primary homes and a fast-track plan for vacant and abandoned properties.

The 15-member panel chaired by Circuit Judge Jennifer Bailey of Miami agreed that managed mediation should be required for primary homes in foreclosure unless both the borrower and the bank agree to opt out.

Opponents to the plan said mandatory mediation would slow the process.

Source: The Associated Press

Vacancies Still Strain Commercial Properties

Commercial real estate is feeling the pain as retailers cut back on rental space in light of unemployment and a weak economy.

Just this week, Maguire Properties Inc., which owns office buildings in Southern California, walked away from seven of its properties because it couldn’t pay the mortgages and may abandon others, according to rating agency Realpoint.

“The bottom line: defaults are exploding,” said Richard Parkus, an analyst with Deutsche Bank. “It’s terrible. It’s going to be worse than in the early ’90s.”

Source: The Associated Press, Alex Veiga

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222 ext. 26
Blog: elliottonrealestate.com
Twitter: elliottrob@twitter.com

Lenders Avoid Loan Modifications

The Obama administration’s $75 billion foreclosure prevention effort is unlikely to succeed because mortgage lenders cannot turn a profit on modified loans, concludes a new report by the Federal Reserve Bank of Boston.

Analyzing 665,410 loans originated between 2005 and 2007 that subsequently became seriously delinquent, the Boston Fed found that only 3 percent of borrowers had their loans modified to lower monthly payments, and about 5.5 percent received workouts that did not result in lower payments.

Also, up to 45 percent of approximately 150,000 borrowers who received some kind of aid ended up in arrears again, but about 30 percent of delinquent borrowers were able to fix their problems without help from their lenders.

Source: Boston Globe, Jenifer McKim (07/07/2009)(06/25/2009)

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222

Another Rash of Foreclosures Coming Soon?

Some economic observers are predicting another wave of foreclosures later this summer or in the fall. That’s because lenders that have held off on foreclosures as part of President Obama’s plan will now move forward aggressively to clear the backlog of troubled mortgages.

Rising foreclosures will further depress home values, says Mark Zandi of Moody’s Economy.com, who calculates that 15.4 million homeowners—one in five of those with first mortgages—will be underwater.

Seth Wheeler, a senior adviser to Treasury Secretary Timothy Geithner, says the government is “unlikely to implement another moratorium.”

But Wheeler said the government plans to put in place some programs that encourage lenders to try some alternatives to foreclosure.

Source: Chicago Tribune, Don Lee (07/06/2009)

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222

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