US Postal Service in trouble
The US Postal Service (USPS), a self-supporting government agency that receives no tax dollars, said it suffered a loss of $329 million in the first quarter of federal fiscal year 2011. That compared with a loss of $297 million a year earlier. The agency has been suffering from an ongoing decline in mail volume, which has undercut revenues, while retiree health care costs have been straining its reserves. Excluding costs related to retiree benefits and adjustments to workers' compensation liability, the Postal Service said it had net income was $226 million in the first quarter, which ended Dec. 31. The agency said it will be forced to default on some of its financial obligations this year unless Congress changes a 2006 law requiring it to pay between $5.4 and $5.8 billion into its prepaid retiree health benefits each year. The Postal Service has taken a number of steps to increase revenue, including marketing initiatives and price increases. The agency raised rates an av
erage of 3.6% in January.
It is also perusing more dramatic changes. Last year, the USPS submitted a request to the Postal Regulatory Commission, which oversees the agency, to eliminate Saturday mail service. The commission has yet to respond to the request, but a spokesman said it is in the "final phase" of making its decision. The USPS has also cut back on hours to save money. The agency expects to eliminate 40 million work hours this fiscal year as part of a plan to save $2 billion. However, the service is currently negotiating new contracts with the American Postal Workers Union and the National Rural Letter Carriers Association, which will probably object to cutting hours. On the bright side, the Postal Service said improving economic conditions suggest the "worst of the precipitous volume decline during the recession is over." But mail volume continues to be anemic, rising only 1.5% in the first quarter as economic growth remains sluggish.
Friday, February 11, 2011
Tuesday, February 8, 2011
Cheaper to buy than to rent in 72% of largest U.S. cities
Despite the rising number of renters across the country, it is cheaper to buy a home rather than rent one in 72 percent of the 50 largest cities in the U.S., according to an index released by real estate search and marketing site Trulia.
"Since the start of the 'Great Recession,' many former homeowners have flooded the rental market. Following the principles of supply and demand, renting has become relatively more expensive than buying in most markets," said Pete Flint, CEO and co-founder of Trulia, in a statement.
"Though necessary for achieving true economic recovery, stricter bank lending practices have also further aggravated the struggling housing market in the short term. Even highly qualified homebuyers face intense scrutiny on their income, savings, existing debt and credit history before they can get a mortgage loan."
Trulia's rent vs. buy index compares the median list price with the median rent on two-bedroom apartments, condominiums and townhomes listed on Trulia.com as of Jan. 10, 2011.
A price-to-rent ratio of 1 to 15 means that it's much cheaper to buy than to rent in a particular city. A ratio between 16 and 20 means that it's more expensive to rent than to buy, but, depending on the family's situation, buying could "make financial sense," the site said. Any ratio above 20 indicates that owning is much more costly than renting in a city.
In 36 out of 50 of the country's most populous cities, buying a two-bedroom home is less expensive than renting one. These cities include many areas that have been hit hard by foreclosures, such as Las Vegas, Phoenix and Fresno, Calif.
Article continues below
Price to Rent Ratio
In 10 cities, renting is cheaper, but buying might make more financial sense, according to Trulia. These cities include Los Angeles, Boston, and Fort Worth, Texas.
The index considers the total cost of homeownership compared to the total cost of renting. Calculations for the total cost of homeownership include mortgage principal and interest, property taxes, hazard insurance, closing costs at time of purchase, homeowners association dues, and private mortgage insurance. The homeownership cost calculation also includes tax advantages from mortgage interest, property tax and closing-cost deductions.
Calculations for total rental cost include rent and renters insurance.
The total cost of homeownership was highest, compared to the cost to rent, in New York; Seattle; Kansas City, Mo.; and San Francisco.
"Although owning a home is relatively more affordable in most cities, market conditions have caused an interesting demographic swap between traditional renters and buyers," said Tara-Nicholle Nelson, consumer educator for Trulia, in a statement. Nelson is also an Inman news columnist.
"For example, lifelong renters are seizing the opportunity to become homeowners while affordability is high. At the same time, a growing number of longtime homeowners are finding themselves tenants -- some by choice and others by necessity."
Through newly acquired startup Movity, Trulia created interactive maps comparing each city's population, projected job growth, and unemployment and foreclosure rates.
"Since the start of the 'Great Recession,' many former homeowners have flooded the rental market. Following the principles of supply and demand, renting has become relatively more expensive than buying in most markets," said Pete Flint, CEO and co-founder of Trulia, in a statement.
"Though necessary for achieving true economic recovery, stricter bank lending practices have also further aggravated the struggling housing market in the short term. Even highly qualified homebuyers face intense scrutiny on their income, savings, existing debt and credit history before they can get a mortgage loan."
Trulia's rent vs. buy index compares the median list price with the median rent on two-bedroom apartments, condominiums and townhomes listed on Trulia.com as of Jan. 10, 2011.
A price-to-rent ratio of 1 to 15 means that it's much cheaper to buy than to rent in a particular city. A ratio between 16 and 20 means that it's more expensive to rent than to buy, but, depending on the family's situation, buying could "make financial sense," the site said. Any ratio above 20 indicates that owning is much more costly than renting in a city.
In 36 out of 50 of the country's most populous cities, buying a two-bedroom home is less expensive than renting one. These cities include many areas that have been hit hard by foreclosures, such as Las Vegas, Phoenix and Fresno, Calif.
Article continues below
Price to Rent Ratio
In 10 cities, renting is cheaper, but buying might make more financial sense, according to Trulia. These cities include Los Angeles, Boston, and Fort Worth, Texas.
The index considers the total cost of homeownership compared to the total cost of renting. Calculations for the total cost of homeownership include mortgage principal and interest, property taxes, hazard insurance, closing costs at time of purchase, homeowners association dues, and private mortgage insurance. The homeownership cost calculation also includes tax advantages from mortgage interest, property tax and closing-cost deductions.
Calculations for total rental cost include rent and renters insurance.
The total cost of homeownership was highest, compared to the cost to rent, in New York; Seattle; Kansas City, Mo.; and San Francisco.
"Although owning a home is relatively more affordable in most cities, market conditions have caused an interesting demographic swap between traditional renters and buyers," said Tara-Nicholle Nelson, consumer educator for Trulia, in a statement. Nelson is also an Inman news columnist.
"For example, lifelong renters are seizing the opportunity to become homeowners while affordability is high. At the same time, a growing number of longtime homeowners are finding themselves tenants -- some by choice and others by necessity."
Through newly acquired startup Movity, Trulia created interactive maps comparing each city's population, projected job growth, and unemployment and foreclosure rates.
Sunday, January 30, 2011
Revised Appraisal Guidelines Haunt Investors
Revised appraisal guidelines haunt investors
Posted on January 28, 2011
Just in case you haven’t run into it yet, our wise government – particularly the agencies that oversee mortgages – instituted more new guidelines in December that are just now starting to affect real estate investors. Effective Dec. 2010, in order to continue policing the mortgage industry, the Federal Reserve System engaged new policies for Automated Valuation Models on appraisals. (See http://www.federalreserve.gov/newsevents/press/bcreg/20101202a.htm) The newest guidelines require “interagency cooperation” in inputting data into the huge property database. These agencies include the Office of the Comptroller of the Currency (OCC), FDIC, Office of Thrift Supervision, Federal Reserve System, and the National Credit Union Administration. Further, the guideline goes one step further requiring actual visits to the property for a property condition report. Certainly, this inspection is needed in many circumstances. However, it does slow the process down by several more days and, on REO and foreclosure properties oft times, this can be the kiss of death.
How does this affect you? If you are a real estate investor that uses mortgage financing on potential rentals or flips, you may run into a new set of appraisal problems. Most affected are non-owner occupied loans, second mortgages, and lines of credit. If you’re one of those rare birds that still has a line of credit in place, it means when the bank is reviewing their collateral for the line, your ability to borrow may be reduced – sometimes drastically.
For potential new homebuyers, this doesn’t change things much. If it is an owner occupied property for a traditional or FHA first mortgage, lending institutions policies on appraisals are fairly close to the same as they were prior to December 2010. Some, however, have gone to the “two appraisal” rule. This means, to be safe, they are requiring two independent appraisals on each property. Whether they select one appraisal to go with, choose the lower of the two, or average the two varies with each institution.
Bottom line: In the near future, if you have been dependent on mortgages to purchase investment properties, you may want to adjust your business model. Several investors I know have already been shocked by hugely reduced values lenders are willing to do on investment properties. This is no fun when you’re expecting to have a closing. So, to be safe, do one of two things: (1) Use property you already own to collateralize lines of credit. Realize there must be plenty of equity available to do this smoothly; or (2) Even if you do fewer transactions, simply pay cash. Whether this is your own funds or those of an angel investor doesn’t matter. Paying cash is and has always been the path of least resistance. All others to the back of the line.
Posted on January 28, 2011
Just in case you haven’t run into it yet, our wise government – particularly the agencies that oversee mortgages – instituted more new guidelines in December that are just now starting to affect real estate investors. Effective Dec. 2010, in order to continue policing the mortgage industry, the Federal Reserve System engaged new policies for Automated Valuation Models on appraisals. (See http://www.federalreserve.gov/newsevents/press/bcreg/20101202a.htm) The newest guidelines require “interagency cooperation” in inputting data into the huge property database. These agencies include the Office of the Comptroller of the Currency (OCC), FDIC, Office of Thrift Supervision, Federal Reserve System, and the National Credit Union Administration. Further, the guideline goes one step further requiring actual visits to the property for a property condition report. Certainly, this inspection is needed in many circumstances. However, it does slow the process down by several more days and, on REO and foreclosure properties oft times, this can be the kiss of death.
How does this affect you? If you are a real estate investor that uses mortgage financing on potential rentals or flips, you may run into a new set of appraisal problems. Most affected are non-owner occupied loans, second mortgages, and lines of credit. If you’re one of those rare birds that still has a line of credit in place, it means when the bank is reviewing their collateral for the line, your ability to borrow may be reduced – sometimes drastically.
For potential new homebuyers, this doesn’t change things much. If it is an owner occupied property for a traditional or FHA first mortgage, lending institutions policies on appraisals are fairly close to the same as they were prior to December 2010. Some, however, have gone to the “two appraisal” rule. This means, to be safe, they are requiring two independent appraisals on each property. Whether they select one appraisal to go with, choose the lower of the two, or average the two varies with each institution.
Bottom line: In the near future, if you have been dependent on mortgages to purchase investment properties, you may want to adjust your business model. Several investors I know have already been shocked by hugely reduced values lenders are willing to do on investment properties. This is no fun when you’re expecting to have a closing. So, to be safe, do one of two things: (1) Use property you already own to collateralize lines of credit. Realize there must be plenty of equity available to do this smoothly; or (2) Even if you do fewer transactions, simply pay cash. Whether this is your own funds or those of an angel investor doesn’t matter. Paying cash is and has always been the path of least resistance. All others to the back of the line.
Friday, January 7, 2011
New sales contracts on the increase; median price still holding steady
(December 13, 2010 – Orlando, FL) Members of the Orlando Regional REALTOR Association reported an increase in the number of home-sale contracts they filed in November, with 3,243 newly filed contracts topping last November’s tally of 3,023 by 7.28 percent.
The area’s pending sales statistic — like new contracts — is also an indicator of future sales activity. A total of 8,998 homes are currently under contract and awaiting closing. This number is also an increase (of 4.23 percent) over the 8,633 homes that were under contract in November 2009.
Members of ORRA recorded completed sales on 1,848 homes in November, which is a 20.65 percent decrease over the November 2009 tally of 2,329 sales. To date, Orlando area home sales are up 21.55 percent over this time in 2009.
“Uneven sales patterns are to be expected over the next months,” explains ORRA Chairman of the Board Mike McGraw, McGraw Real Estate Services. “We are experiencing aftershocks from slowdowns caused by the homebuyer tax credit ending and the temporary foreclosure stoppage. But at the same time, buyers who are responding to record-low interest rates and enticingly low home prices are contributing to a push-pull effect on Orlando’s housing market.”
The median sales price of all homes sold in the Orlando area held steady at $105,000 during November, the third month in a row. According to ORRA the current median price remains 5.11 percent higher than the $99,900 median price recorded in August 2010 and is 14.63 percent below the median price of $123,000 recorded in November 2009.
The median price for “normal” existing homes – i.e., those that are neither a short sale nor a foreclosure – sold in November is $159,900. The median price for bank-owned sales is $78,101 and the median price for short sales is $99,950. The lower median prices of bank-owned and short sales, which accounted for 66.67 percent of all sales in November, exert a downward influence on the overall median price.
The Orlando affordability index decreased to 261.95 percent in November. (An affordability index of 99 percent means that buyers earning the state-reported median income are 1 percent short of the income necessary to purchase a median-priced home. Conversely, an affordability index that is over 100 means that median-income earners make more than is necessary to qualify for a median-priced home.) Buyers who earn the reported median income of $53,390 can qualify to purchase one of 9,027 homes in Orange and Seminole counties currently listed in the local multiple listing service for $275,049 or less.
First-time homebuyer affordability in November decreased to 186.28 percent. First-time buyers who earn the reported median income of $36,305 can qualify to purchase one of 6,493 homes in Orange and Seminole counties currently listed in the local multiple listing service for $166,252 or less.
Homes of all types spent an average of 97 days on the market before coming under contract in November 2010, and the average home sold for 94.08 percent of its listing price. In November 2009 those numbers were 85 and 94.90 percent, respectively. The area’s average interest rate increased in November to 4.48 percent.
Inventory
There are currently 15,192 homes available for purchase through the MLS. Inventory decreased by 249 homes (1.61 percent) from October 2010, which means that 249 more homes exited the market than entered the market. The November 2010 inventory level is 5.06 percent lower than it was in November 2009 (16,002). The current pace of sales translates into 8.22 months of supply; November 2009 recorded 6.87 months of supply.
There are 12,083 single-family homes currently listed in the MLS, a number that is 2.85 percent more than the 11,748 single-family homes listed in November of last year. Condos currently make up 1,871 offerings in the MLS, while duplexes/town homes/villas make up the remaining 1,238.
Condos and Town Homes/Duplexes/Villas
The sales of condos in the Orlando area decreased by 6.45 percent in November when compared to November of 2009 and decreased by 16.59 percent compared to October of this year. To date, condo sales are up 53.77 percent (6,031 condos sold to date in 2010, compared to 3,922 by this time in 2009).
The most (193) condos in a single price category that changed hands in October were yet again in the $1 - $50,000 price range, a year-long trend that accounts for 54.50 percent of all condo sales. The next greatest range, with 12.09 percent of this year’s condo sales, is the $50,000 - $60,000 category.
Orlando homebuyers purchased 178 duplexes, town homes, and villas in November 2010, which is a 24.89 percent decline from November 2009 when 237 of these alternative housing types were purchased.
MSA Numbers
Sales of existing homes within the entire Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in November were down by 19.13 percent when compared to November of 2009. Throughout the MSA, 2,295 homes were sold in November 2010 compared with 2,838 in November 2009.
To date, sales throughout the MSA are 16.72 percent above this time in 2009 with 31,988 homes exchanging hands compared to 27,406. Each individual county’s year-to-date sales comparisons are as follows:
Lake: 2.06 percent above 2009 (3,827 homes sold to date in 2010 compared to 3,728 in 2009);
Orange: 18.17 percent above 2009 (17,223 homes sold to date in 2010 compared to 14,575 in 2009);
Osceola: 12.12 percent above 2009 (5,774 homes sold to date in 2010 compared to 5150 in 2009); and
Seminole: 30.63 percent above 2009 (5,164 sold to date in 2010 compared to 3,953 in 2009).
For detailed statistical reports, please visit www.orlrealtor.com and click on “Housing Statistics” on the top menu bar. This representation is based in whole or in part on data supplied by the Orlando Regional REALTOR® Association or its Multiple Listing Service (MLS). Neither the association nor its MLS guarantees or is in any way responsible for its accuracy. Data maintained by the association or its MLS may not reflect all real estate activity in the market. Due to late closings, an adjustment is necessary to record those closings posted after our reporting date.
ORRA REALTOR® sales, referred to as the core market, represent all sales by members of the Orlando Regional REALTOR® Association, not necessarily those sales strictly in Orange and Seminole counties. Note that statistics released each month may be revised in the future as new data is received.
Orlando MSA numbers reflect sales of homes located in Orange, Seminole, Osceola, and Lake counties by members of any Realtor® association, not just members of ORRA.
The area’s pending sales statistic — like new contracts — is also an indicator of future sales activity. A total of 8,998 homes are currently under contract and awaiting closing. This number is also an increase (of 4.23 percent) over the 8,633 homes that were under contract in November 2009.
Members of ORRA recorded completed sales on 1,848 homes in November, which is a 20.65 percent decrease over the November 2009 tally of 2,329 sales. To date, Orlando area home sales are up 21.55 percent over this time in 2009.
“Uneven sales patterns are to be expected over the next months,” explains ORRA Chairman of the Board Mike McGraw, McGraw Real Estate Services. “We are experiencing aftershocks from slowdowns caused by the homebuyer tax credit ending and the temporary foreclosure stoppage. But at the same time, buyers who are responding to record-low interest rates and enticingly low home prices are contributing to a push-pull effect on Orlando’s housing market.”
The median sales price of all homes sold in the Orlando area held steady at $105,000 during November, the third month in a row. According to ORRA the current median price remains 5.11 percent higher than the $99,900 median price recorded in August 2010 and is 14.63 percent below the median price of $123,000 recorded in November 2009.
The median price for “normal” existing homes – i.e., those that are neither a short sale nor a foreclosure – sold in November is $159,900. The median price for bank-owned sales is $78,101 and the median price for short sales is $99,950. The lower median prices of bank-owned and short sales, which accounted for 66.67 percent of all sales in November, exert a downward influence on the overall median price.
The Orlando affordability index decreased to 261.95 percent in November. (An affordability index of 99 percent means that buyers earning the state-reported median income are 1 percent short of the income necessary to purchase a median-priced home. Conversely, an affordability index that is over 100 means that median-income earners make more than is necessary to qualify for a median-priced home.) Buyers who earn the reported median income of $53,390 can qualify to purchase one of 9,027 homes in Orange and Seminole counties currently listed in the local multiple listing service for $275,049 or less.
First-time homebuyer affordability in November decreased to 186.28 percent. First-time buyers who earn the reported median income of $36,305 can qualify to purchase one of 6,493 homes in Orange and Seminole counties currently listed in the local multiple listing service for $166,252 or less.
Homes of all types spent an average of 97 days on the market before coming under contract in November 2010, and the average home sold for 94.08 percent of its listing price. In November 2009 those numbers were 85 and 94.90 percent, respectively. The area’s average interest rate increased in November to 4.48 percent.
Inventory
There are currently 15,192 homes available for purchase through the MLS. Inventory decreased by 249 homes (1.61 percent) from October 2010, which means that 249 more homes exited the market than entered the market. The November 2010 inventory level is 5.06 percent lower than it was in November 2009 (16,002). The current pace of sales translates into 8.22 months of supply; November 2009 recorded 6.87 months of supply.
There are 12,083 single-family homes currently listed in the MLS, a number that is 2.85 percent more than the 11,748 single-family homes listed in November of last year. Condos currently make up 1,871 offerings in the MLS, while duplexes/town homes/villas make up the remaining 1,238.
Condos and Town Homes/Duplexes/Villas
The sales of condos in the Orlando area decreased by 6.45 percent in November when compared to November of 2009 and decreased by 16.59 percent compared to October of this year. To date, condo sales are up 53.77 percent (6,031 condos sold to date in 2010, compared to 3,922 by this time in 2009).
The most (193) condos in a single price category that changed hands in October were yet again in the $1 - $50,000 price range, a year-long trend that accounts for 54.50 percent of all condo sales. The next greatest range, with 12.09 percent of this year’s condo sales, is the $50,000 - $60,000 category.
Orlando homebuyers purchased 178 duplexes, town homes, and villas in November 2010, which is a 24.89 percent decline from November 2009 when 237 of these alternative housing types were purchased.
MSA Numbers
Sales of existing homes within the entire Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in November were down by 19.13 percent when compared to November of 2009. Throughout the MSA, 2,295 homes were sold in November 2010 compared with 2,838 in November 2009.
To date, sales throughout the MSA are 16.72 percent above this time in 2009 with 31,988 homes exchanging hands compared to 27,406. Each individual county’s year-to-date sales comparisons are as follows:
Lake: 2.06 percent above 2009 (3,827 homes sold to date in 2010 compared to 3,728 in 2009);
Orange: 18.17 percent above 2009 (17,223 homes sold to date in 2010 compared to 14,575 in 2009);
Osceola: 12.12 percent above 2009 (5,774 homes sold to date in 2010 compared to 5150 in 2009); and
Seminole: 30.63 percent above 2009 (5,164 sold to date in 2010 compared to 3,953 in 2009).
For detailed statistical reports, please visit www.orlrealtor.com and click on “Housing Statistics” on the top menu bar. This representation is based in whole or in part on data supplied by the Orlando Regional REALTOR® Association or its Multiple Listing Service (MLS). Neither the association nor its MLS guarantees or is in any way responsible for its accuracy. Data maintained by the association or its MLS may not reflect all real estate activity in the market. Due to late closings, an adjustment is necessary to record those closings posted after our reporting date.
ORRA REALTOR® sales, referred to as the core market, represent all sales by members of the Orlando Regional REALTOR® Association, not necessarily those sales strictly in Orange and Seminole counties. Note that statistics released each month may be revised in the future as new data is received.
Orlando MSA numbers reflect sales of homes located in Orange, Seminole, Osceola, and Lake counties by members of any Realtor® association, not just members of ORRA.
Thursday, December 23, 2010
Are Fannie Mae & Freddie Mac (Government Controlled Lenders) At the “Heart” of the Mortgage Mess?
Are Fannie Mae & Freddie Mac (Government Controlled Lenders) At the “Heart” of the Mortgage Mess?
Posted by BEREL News Team on Thursday, December 23rd 2010
Objective real estate investors have been saying it for years: government-controlled Fannie Mae and Freddie Mac have been involved in questionable practices when it comes to mortgage regulation. And now, there’s significant support for this position in the major press. According to a Washington Post article published this morning, the two GSEs set the precedent for fast, perhaps overly-effective and aggressive foreclosure methods that ultimately led to Foreclosure-Gate and the robo-signing fiascos currently being endured and investigated on multiple fronts throughout the country.
In 2008, Fannie Mae and Freddie Mac “named an exclusive group of law firms that would rapidly carry out…filing legal paperwork to remove homeowners from their homes.” Prior to this time, this type of step was “unprecedented,” the reporting team says. Now, while many lenders followed suit and created their own foreclosure issues, the “heart of federal and state probes over faulty foreclosure practices that now threaten to further undermine the housing market” is squarely located with Fannie and Freddie. According to an anonymous source, the GSEs not only “urged swift foreclosures,” but also green-lighted a firm that had engaged in documented, “legally questionable practices.”
In further efforts to speed the foreclosure process, the GSEs offered incentives and threatened fines on law firms and servicers that took too long to foreclose, while neglecting to implement safeguards for the homeowners themselves. When asked about the existence of these safeguards, Fannie Mae associate general counsel Susan Reid simply stated, “I don’t know of any policies and procedures.”
It seems clear that other lenders and lawyers took their cues from Fannie and Freddie when it came to their foreclosure processes, but that does not change the fact that each individual corporation should have installed some type of protections to insure that foreclosures were valid. Do you think Fannie Mae and Freddie Mac should bear a greater burden of blame than other lenders involved in the robo-signing scandals?
Posted by BEREL News Team on Thursday, December 23rd 2010
Objective real estate investors have been saying it for years: government-controlled Fannie Mae and Freddie Mac have been involved in questionable practices when it comes to mortgage regulation. And now, there’s significant support for this position in the major press. According to a Washington Post article published this morning, the two GSEs set the precedent for fast, perhaps overly-effective and aggressive foreclosure methods that ultimately led to Foreclosure-Gate and the robo-signing fiascos currently being endured and investigated on multiple fronts throughout the country.
In 2008, Fannie Mae and Freddie Mac “named an exclusive group of law firms that would rapidly carry out…filing legal paperwork to remove homeowners from their homes.” Prior to this time, this type of step was “unprecedented,” the reporting team says. Now, while many lenders followed suit and created their own foreclosure issues, the “heart of federal and state probes over faulty foreclosure practices that now threaten to further undermine the housing market” is squarely located with Fannie and Freddie. According to an anonymous source, the GSEs not only “urged swift foreclosures,” but also green-lighted a firm that had engaged in documented, “legally questionable practices.”
In further efforts to speed the foreclosure process, the GSEs offered incentives and threatened fines on law firms and servicers that took too long to foreclose, while neglecting to implement safeguards for the homeowners themselves. When asked about the existence of these safeguards, Fannie Mae associate general counsel Susan Reid simply stated, “I don’t know of any policies and procedures.”
It seems clear that other lenders and lawyers took their cues from Fannie and Freddie when it came to their foreclosure processes, but that does not change the fact that each individual corporation should have installed some type of protections to insure that foreclosures were valid. Do you think Fannie Mae and Freddie Mac should bear a greater burden of blame than other lenders involved in the robo-signing scandals?
Wednesday, December 22, 2010
New York Foreclosures Likely to “Choke” in the New Year
New York Foreclosures Likely to “Choke” in the New Year
Posted by BEREL News Team on Tuesday, December 21st 2010
Thanks to requisite “special affirmations” from New York bank attorneys indicating that they know that all bank documents are valid because they have personally checked the paperwork, New York state’s foreclosure process will likely grind to a halt in the New Year as lenders and their lawyers work to develop a process that will allow attorneys to make this type of affirmation[1]. During the development process, foreclosure filings will likely drop to nearly zero since under current standards, there is no time or place in the present foreclosure process for the attorneys to check every document coming out of the lender. In fact, just since October 20, 2010, the date that the order was signed, foreclosures have dropped from 800 to 100 per week.
“Hundreds of foreclosure filings have been withdrawn,” confirmed secretary to Suffolk County Supreme Court Judge Erin Michael Kay, who mentioned that the judge’s caseload was actually down to 250 from a “much higher” load just a week earlier. Other judges opted to dismiss all pending foreclosures coming before them because banks and lenders did not have the newly-required affirmations in order, and some judges have gone so far as to require far more detailed affirmations than those specified by the new law. All of this “custom work” will further slow the foreclosure process and make implementing the changes more complicated for lenders and their attorneys.
The judges agree, however, that they are not trying to stop banks from foreclosing – just that they want to make sure that things are done right in light of the robo-signer fiasco. Wrote one judge’s chief law assistant: “If people can’t afford their home, if they can’t pay their bills, the foreclosure will happen. Homeowners have to have a plan and the ability to pay. The banks are entitled to be paid.”
Do you believe that these delays are simply procedural, and not a delaying tactic to keep homeowners in their delinquent homes?
Posted by BEREL News Team on Tuesday, December 21st 2010
Thanks to requisite “special affirmations” from New York bank attorneys indicating that they know that all bank documents are valid because they have personally checked the paperwork, New York state’s foreclosure process will likely grind to a halt in the New Year as lenders and their lawyers work to develop a process that will allow attorneys to make this type of affirmation[1]. During the development process, foreclosure filings will likely drop to nearly zero since under current standards, there is no time or place in the present foreclosure process for the attorneys to check every document coming out of the lender. In fact, just since October 20, 2010, the date that the order was signed, foreclosures have dropped from 800 to 100 per week.
“Hundreds of foreclosure filings have been withdrawn,” confirmed secretary to Suffolk County Supreme Court Judge Erin Michael Kay, who mentioned that the judge’s caseload was actually down to 250 from a “much higher” load just a week earlier. Other judges opted to dismiss all pending foreclosures coming before them because banks and lenders did not have the newly-required affirmations in order, and some judges have gone so far as to require far more detailed affirmations than those specified by the new law. All of this “custom work” will further slow the foreclosure process and make implementing the changes more complicated for lenders and their attorneys.
The judges agree, however, that they are not trying to stop banks from foreclosing – just that they want to make sure that things are done right in light of the robo-signer fiasco. Wrote one judge’s chief law assistant: “If people can’t afford their home, if they can’t pay their bills, the foreclosure will happen. Homeowners have to have a plan and the ability to pay. The banks are entitled to be paid.”
Do you believe that these delays are simply procedural, and not a delaying tactic to keep homeowners in their delinquent homes?
Wednesday, September 22, 2010
Orlando homes sales increase as affordability hits all-time high
September 10, 2010 – Orlando, FL) Members of the Orlando Regional REALTOR® Association reported completed sales on 2,429 homes in August, which is a 10.91 percent increase over the August 2009 mark of 2,109. To date, Orlando area home sales are up 36.12 percent over this time in 2009.
“As expected, sales have been softer following the expiration of the homebuyer tax credit,” explains ORRA Chairman of the Board Kathleen Gallagher McIver, RE/MAX Town & Country Realty. “However, since May, the number of new contracts has continued to climb as consumers take advantage of record-low mortgage rates and historically high housing affordability.”
The number of new contracts filed in August 2010 (3,892) represents an increase of 17.09 percent more than were filed in August 2009 (3,324). The area’s pending sales statistic — also an indicator of future sales activity – is likewise remaining at a record high with 8.60 percent more homes (8,945) under contract and awaiting closing in August of this year than in August of last year (8,237).
The median price of all existing homes combined sold in August 2010 decreased 21.95 percent to $99,900 from the $128,000 recorded in August 2009. August 2010’s median price is a decrease of 8.10 percent compared to July 2010’s median of $108,700.
“With foreclosures and short sales dominating the market, the median price continues to be lowered,” says Gallagher McIver. “Plus, the rise in popularity of lower-priced condominiums has put additional downward pressure on prices.” Gallagher McIver adds that one in four home sales during the month of August was a condo sale, and the median price for all August condo sales was $44,000.
The median price for “normal” sales is $165,900 (down 5.20 percent from last month’s $175,000). The median price for bank-owned sales is $70,000 (down 2.78 percent from last month’s $72,000), and the median price for short sales is $100,000 (down from last month’s $116,000).
Of the 2,429 sales in August, 691 “normal” sales accounted for 28.45 percent of all sales, while 1,187 bank-owned and 551 short sales made up 71.55 percent.
The Orlando affordability index increased to 270.30 percent in August. (An affordability index of 99 percent means that buyers earning the state-reported median income are 1 percent short of the income necessary to purchase a median-priced home. Conversely, an affordability index that is over 100 means that median-income earners make more than is necessary to qualify for a median-priced home.) Buyers who earn the reported median income of $53,219 can qualify to purchase one of 9,932 homes in Orange and Seminole counties currently listed in the local multiple listing service for $270,031 or less.
First-time homebuyer affordability in August increased to 192.21 percent. First-time buyers who earn the reported median income of $36,189 can qualify to purchase one of 6,885 homes in Orange and Seminole counties currently listed in the local multiple listing service for $163,219 or less.
Homes of all types spent an average of 84 days on the market before coming under contract in August 2010, and the average home sold for 95.04 percent of its listing price. In August 2009 those numbers were 94 and 94.44 percent, respectively. The area’s average interest rate decreased in August to 4.61 percent.
Inventory
There are currently 16,535 homes available for purchase through the MLS. Inventory decreased by 28 homes from July 2010, which means that 28 more homes exited the market than entered the market. The August 2010 inventory level is 1.06 percent higher than it was in August 2009 (16,361). The current pace of sales translates into 6.81 months of supply; August 2009 recorded 7.47 months of supply.
There are 12,769 single-family homes currently listed in the MLS, a number that is 859 (7.21 percent) more than in August of last year. Condos currently make up 2,342 offerings in the MLS, while duplexes/town homes/villas make up the remaining 1,424.
Condos and Town Homes/Duplexes/Villas
August when compared to August of 2009 and increased by 5.89 percent compared to July of this year. To date, condo sales are up 74.09 percent (4,596 condos sold to date in 2010, compared to 2,640 by this time in 2009).
The most (361) condos in a single price category that changed hands in August were yet again in the $1 - $50,000 price range, which accounted for 57.39 percent of all condo sales.
Orlando homebuyers purchased 208 duplexes, town homes, and villas in August 2010, which is a 1.96 percent increase from August 2009 when 204 of these alternative housing types were purchased.
“As expected, sales have been softer following the expiration of the homebuyer tax credit,” explains ORRA Chairman of the Board Kathleen Gallagher McIver, RE/MAX Town & Country Realty. “However, since May, the number of new contracts has continued to climb as consumers take advantage of record-low mortgage rates and historically high housing affordability.”
The number of new contracts filed in August 2010 (3,892) represents an increase of 17.09 percent more than were filed in August 2009 (3,324). The area’s pending sales statistic — also an indicator of future sales activity – is likewise remaining at a record high with 8.60 percent more homes (8,945) under contract and awaiting closing in August of this year than in August of last year (8,237).
The median price of all existing homes combined sold in August 2010 decreased 21.95 percent to $99,900 from the $128,000 recorded in August 2009. August 2010’s median price is a decrease of 8.10 percent compared to July 2010’s median of $108,700.
“With foreclosures and short sales dominating the market, the median price continues to be lowered,” says Gallagher McIver. “Plus, the rise in popularity of lower-priced condominiums has put additional downward pressure on prices.” Gallagher McIver adds that one in four home sales during the month of August was a condo sale, and the median price for all August condo sales was $44,000.
The median price for “normal” sales is $165,900 (down 5.20 percent from last month’s $175,000). The median price for bank-owned sales is $70,000 (down 2.78 percent from last month’s $72,000), and the median price for short sales is $100,000 (down from last month’s $116,000).
Of the 2,429 sales in August, 691 “normal” sales accounted for 28.45 percent of all sales, while 1,187 bank-owned and 551 short sales made up 71.55 percent.
The Orlando affordability index increased to 270.30 percent in August. (An affordability index of 99 percent means that buyers earning the state-reported median income are 1 percent short of the income necessary to purchase a median-priced home. Conversely, an affordability index that is over 100 means that median-income earners make more than is necessary to qualify for a median-priced home.) Buyers who earn the reported median income of $53,219 can qualify to purchase one of 9,932 homes in Orange and Seminole counties currently listed in the local multiple listing service for $270,031 or less.
First-time homebuyer affordability in August increased to 192.21 percent. First-time buyers who earn the reported median income of $36,189 can qualify to purchase one of 6,885 homes in Orange and Seminole counties currently listed in the local multiple listing service for $163,219 or less.
Homes of all types spent an average of 84 days on the market before coming under contract in August 2010, and the average home sold for 95.04 percent of its listing price. In August 2009 those numbers were 94 and 94.44 percent, respectively. The area’s average interest rate decreased in August to 4.61 percent.
Inventory
There are currently 16,535 homes available for purchase through the MLS. Inventory decreased by 28 homes from July 2010, which means that 28 more homes exited the market than entered the market. The August 2010 inventory level is 1.06 percent higher than it was in August 2009 (16,361). The current pace of sales translates into 6.81 months of supply; August 2009 recorded 7.47 months of supply.
There are 12,769 single-family homes currently listed in the MLS, a number that is 859 (7.21 percent) more than in August of last year. Condos currently make up 2,342 offerings in the MLS, while duplexes/town homes/villas make up the remaining 1,424.
Condos and Town Homes/Duplexes/Villas
August when compared to August of 2009 and increased by 5.89 percent compared to July of this year. To date, condo sales are up 74.09 percent (4,596 condos sold to date in 2010, compared to 2,640 by this time in 2009).
The most (361) condos in a single price category that changed hands in August were yet again in the $1 - $50,000 price range, which accounted for 57.39 percent of all condo sales.
Orlando homebuyers purchased 208 duplexes, town homes, and villas in August 2010, which is a 1.96 percent increase from August 2009 when 204 of these alternative housing types were purchased.
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