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Short Sales Rise, More Banks View it as a Better Option

by Leticia & Associates
  • Short Sales Rise, More Banks View it as a Better Option


    Banks are more willing to agree to a sale at a lower cost than a home owner’s mortgage balance in order to avoid having the property fall into foreclosure, which can be more costly for a lender. 

    In the fourth quarter of 2011, there were more than 88,000 short sales, a rise of 15 percent compared to a year prior. In all, short sales made up 10 percent of all home sales sold in the fourth quarter, according to recent data released by RealtyTrac.

    On the other hand, bank-owned homes dropped 12 percent year-over-year (to 116,000), making up 13 percent of all home sales during the fourth quarter.

    The average short sale in the fourth quarter sold for $184,221, according to RealtyTrac. The average foreclosure, on the other hand, sold for $149,686. 

    Banks are now more willing to do short sales and that trend will likely “show up in more local markets in 2012 as lenders recognize short sales as a better option for many of their non-performing loans," said RealtyTrac CEO Brandon Moore.

    Meanwhile, during the fourth quarter, 24 percent of homes sold — nearly one in four — were in some stage of foreclosure, either already bank-owned or already winding through the process, RealtyTrac reports. The number is slightly down compared to a year prior when foreclosures accounted for 26 percent of all home sales, RealtyTrac reports. 

    However, Moore says he expects foreclosure sales to rise this year, "particularly pre-foreclosure sales, as lenders start to more aggressively dispose of distressed assets held up by the mortgage servicing gridlock over the past 18 months.”

 

Buffett: 'I'd Buy Up a Couple Hundred Thousand' Homes

by Leticia & Associates
  • Buffett: 'I'd Buy Up a Couple Hundred Thousand' Homes

    Posted Under: Home Buying in Chino Hills, Foreclosure in Chino Hills, Investment Properties in Chino Hills  |  March 13, 2012 9:28 AM  |  1 view  |  No comments
     

    Warren Buffett, the billionaire investor and Berkshire Hathaway CEO, said on CNBC's "Squawk Box" recently that he'd "buy up a couple hundred thousand" single-family homes if it was practical. 

    Buffett said that's because he believes purchasing a home with ultra-low mortgage rates and holding it for the long-term has become a better investment than stocks right now. 

    "Housing will come back, you can be sure of that," Buffett wrote in his annual letter to shareholders recently. 

    Buffett forecasts an increase in household formations, as more people who moved in with their parents or family members during the recession look to move out and get their own home soon. 

    "People may postpone hitching up during uncertain times, but eventually hormones take over. And while 'doubling-up" may be the initial reaction of some during a recession, living with in-laws can quickly lose its allure," Buffett said.

    Buffett said the recovery in the housing market could vary quite a bit among local housing markets, however. He did not provide a timeline of when he expected a full housing recovery, admitting that his prediction last year that a housing recovery will take shape within the year turned out to be "dead wrong."

 

Fannie Mae's First Bulk Offering of REO-to-Rental Pilot Is Open for Bids

by Leticia & Associates
  • Fannie Mae's First Bulk Offering of REO-to-Rental Pilot Is Open for Bids

    Posted Under: Home Selling in Chino Hills, Foreclosure in Chino Hills, Investment Properties in Chino Hills  |  March 13, 2012 9:30 AM  |  1 view  |  No comments
     

    Fannie Mae has put a block of 2,490 REOs up for sale. It’s the first pilot transaction of the federal government’s Real-Estate Owned (REO) Initiative announced in August 2011, which aims to sell homes repossessed by government agencies to private investors for the purpose of turning the properties into rental units.

    The properties are concentrated in the hard-hit metropolitan areas of Atlanta, Chicago, Las Vegas, Los Angeles, Phoenix, and parts of Florida. Nearly a quarter are located in L.A., 21 percent in Atlanta, and 15 percent in Southeast Florida.

    Of the 2,490 single-family properties up for grabs, only 429 are vacant. The remainder are currently occupied by tenants, giving the winning bidder an established line of rental income already.

    Only investors who have completed the pre-qualification process, as stipulated by the Federal Housing Finance Agency (FHFA) will be able to bid on the portfolio. Interested bidders must submit applications to demonstrate their financial capacity, experience, and specific plans for purchasing pools of Fannie Mae foreclosed properties with the requirement to rent the purchased properties for a specified number of years.

    Any investors interested in the pilot program who have not prequalified may still do so by completing the appropriate forms available online through the FHFA REO Initiative page of the agency’s website.

    Credit Suisse is Fannie Mae’s financial advisor on the pilot transaction and has issued a high-level prospectus on the assets up for sale. Investors who post a security deposit and sign a confidentiality agreement will be privy to more detailed information about the properties.

    “This is another important milestone in our initiative designed to reduce taxpayer losses, stabilize neighborhoods and home values, shift to more private management of properties, and reduce the supply of REO properties in the marketplace,” said Edward DeMarco, FHFA’s acting director.

 

FHA Raises Insurance Premiums

by Leticia & Associates
  • FHA Raises Insurance Premiums

    Posted Under: Home Buying in Chino Hills, Foreclosure in Chino Hills, Investment Properties in Chino Hills  |  March 13, 2012 9:30 AM  |  1 view  |  No comments
     

    The Federal Housing Administration (FHA) has seen its capital reserves quickly dissipate over the past few years amid a growing number of mortgage defaults and payouts on insurance claims. In an effort to bolster its capital cushion, the federal agency has announced a new premium structure for FHA-insured single-family mortgage loans.

    FHA will increase its annual mortgage insurance premium (MIP) by 0.10 percent for loans under $625,500, effective for new loans insured by FHA beginning in April. The agency is increasing the annual MIP by 0.35 percent for loans above that amount, effective in June. Upfront premiums (UFMIP) will also increase by 0.75 percent, beginning April 1. Existing borrowers who are already part of an FHA insurance program will not be impacted by the pricing changes.

    Acting FHA Commissioner Carol Galante says the agency’s premium increases will help to encourage the return of private capital to the housing market, as well as protect FHA’s capital reserves.

    FHA’s Mutual Mortgage Insurance Fund slipped below the congressionally mandated threshold in 2009 for the first time in the agency’s history (going back to 1934), and it has fallen farther and farther ever since. The FHA insures lenders against defaults on home mortgages, and this fund pays for any losses the agency may have to cover.

    “These modest [premium] increases are one of several measures we are taking towards meeting the congressionally mandated two percent reserve threshold, while allowing FHA to remain a valuable option for low- to moderate-income borrowers,” Galante said.

    FHA estimates that the increase to the upfront premium will cost new borrowers an average of approximately $5 more per month.

    HUD Secretary Shaun Donovan stood before a Senate subcommittee on Tuesday and presented testimony on deficiencies in the foreclosure process and the recently announced settlement between state and federal officials and the nation’s largest mortgage servicers.

    Inevitably, questioning from lawmakers turned to FHA’s financial state and Donovan was asked directly if the federal mortgage insurer would be the next big bailout shouldered by taxpayers.

    Donovan assured the senators that the agency was taking steps to avert such action. He said the new premium changes for FHA insured mortgages would allow the agency to increase revenues and contribute more than $1 billion to the depleted Mutual Mortgage Insurance Fund through fiscal year 2013.

 

California Short Sales Reach Highest Level in 3 Years

by Leticia & Associates

Pending homes sales in California were higher for January compared to the previous month and year, and short sales rose to the highest level in three years, according to the California Association of Realtors (C.A.R.).

Based on signed contracts, C.A.R.‘s Pending Home Sales Index (PHSI) climbed from a revised 91 in December to 102.4 in January and was also up from last year when the PHSI was 93.1 in January 2011. Pending home sales are indicators of future home sale activities, providing information on where the market might be heading.

Of all distressed properties sold in California, 23.8 percent were short sales, the highest level in three years since C.A.R. has kept record. Previous month’s data was at 22.2 percent and also 22.2 percent a year ago.

The share of REO sales were higher in January as well at 25.9 percent compared to the previous month of December, which stood at 24.6 percent. A year ago the numbers were higher at 30.8 percent.

Overall, the share of distressed property types that sold went up to 50.1 percent in January, an increase from 47.3 percent in the previous month, but a decrease from 53.5 percent a year ago in January 2011.

Non-distressed sales made up 49.9 percent of home sales in January, a decrease from the previous month, which stood at 52.7, but up from 46.5 percent last year.

 

Displaying blog entries 1-5 of 5

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Leticia & Associates
Keller Williams Vision
15325 Fairfield Ranch Rd Ste 100
Chino Hills CA 91709-8834
(909) 731-8187
(909) 731-8187 cell/text

We can assist buyers, sellers, investors, first time home buyers, relocations, and is a certified short sale specialist in todays real estate market. We provide real estate services in Chino Chino Hills and the surrounding communities of Corona, Diamond Bar, Fontana, Ontario, Rancho Cucamonga, and Upland, Yorba Linda, Brea, La Habra. 

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