Special report for HREU Students. This is the latest information about home sales. Use this information to better educate yourself and your buyers and sellers.
Remember, there has never been a time in the history of our country when caring, competent and skilled agents have been so needed. This is not a sellers market, despite what you have been told this is NOT a buyers market….this is an Agents market. This is your market. Learn the skills necessary and you will thrive beyond your wildest dreams. Start with learning and the earning always follows.
Click Here To Download a Free Copy Of Our Newest Book..How To Survive The Worst Real Estate Market In History
The two-year U.S. housing slump showed no sign of abating in March as sales of previously owned homes fell for the seventh time in eight months.
Purchases dropped 2 percent, less than forecast, to an annual rate of 4.93 million, from 5.03 million in February, the National Association of Realtors said today in Washington. The median sales price declined 7.7 percent from a year earlier.
The jump in subprime defaults and credit-market losses has caused banks to demand higher down payments and increased income documentation for home loans. Many legislators are now suggesting new laws that require buyers to put down at least 20% on home purchases.
A separate measure of home values published by the government’s Office of Federal Housing Enterprise Oversight showed that sales prices dropped 2.4 percent in February from a year earlier. The monthly house price index is down 3.1 percent from its peak in April 2007.
“The housing downturn continues in full swing,” Mark Zandi, chief economist at Moody’s Economy.com in West Chester, Pennsylvania. “Potential home buyers are sitting on the sidelines. They do sense that prices are going to go down further. We’re still a good six, 12 months away before we see buyers come in.”
Bank of America Corp., the nation’s second-biggest bank, said today it plans to curtail low-documentation loans and restrict credit to some borrowers after taking over Countrywide Financial Corp. Yesterday, the bank said profit fell for a third straight quarter as it set aside $6.01 billion for bad loans.
The number of homes for sale at the end of March increased by 40,000 to 4.06 million. At the current sales pace, that represented 9.9 months’ worth, up from 9.6 months’ worth at the end of the prior month.
Watch A Free Video Now. How To Make Money Now In This Market.
Median Price
The median price of an existing home dropped to $200,700 from $217,400 a year earlier.
Many economists consider new-home purchases, which are recorded when a contract is signed, a more timely barometer of the market.
Figures from the Commerce Department later this week may show sales of new houses fell in March to an annual pace of 580,000, a 13-year low.
Resales of single-family homes fell 2.7 percent to an annual rate of 4.35 million. Sales of condos and co-ops increased 3.6 percent to a 580,000 rate.
Housing Starts
Falling sales are prompting builders to pare back construction and reduce prices. Work began on 947,000 homes at an annual rate in March, less than forecast and the fewest in 17 years, Commerce figures showed last week.
Thursday, April 24, 2008
Tuesday, April 22, 2008
Median price of SoCal homes plunged 24 pct to 4-year low
By MICHAEL LIEDTKE
SAN FRANCISCO - Southern California home values plummeted 24 percent during March, leaving prices at an almost four-year low amid the real estate market's deepening distress.
The median price of homes sold in a six-county region stood at $385,000 in March, a sobering turnaround from the previous year when values had reached a record $505,000, according to data released Tuesday by DataQuick Information Services.
Southern California homes haven't sold for so little since April 2004 when the region's median price stood at $380,000.
The median price represents the point where half the homes sell for more and half sell for less.
Tuesday's report covered Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties - a region that once ranked among the nation's hottest real estate markets as lenders aggressively lowered their rates and standards for qualifying for home loans.
As it turned out, many borrowers couldn't afford their mortgages after they adjusted upward from temporarily low rates. That has led to a wave of foreclosures that is prompting lenders to sell Southern California homes at sharp discounts and depressing the value of neighboring properties.
More than a third of the Southern California homes sold last month had been through a foreclosures at some point during the past year, according to DataQuick.
Riverside and San Bernardino counties - a rapidly growing region known as the Inland Empire - was particularly hard hit.
Foreclosures accounted for 56 percent of the sales in Riverside County, where the median price of a home fell 27 percent to $306,250. The erosion was even worse in San Bernardino County, where the median home price plunged 28 percent to $265,000.
Orange County remained Southern California's most expensive housing market with a median sales price of $506,000, but that was still 20 percent below last year's level.
The depressed market is prompting many prospective home sellers to stay on the sidelines until they see signs of an upturn, said Marshall Prentice, DataQuick's president.
"Often what we're left with, especially in inland areas, are sales driven by foreclosure or the threat of it," he said.
SAN FRANCISCO - Southern California home values plummeted 24 percent during March, leaving prices at an almost four-year low amid the real estate market's deepening distress.
The median price of homes sold in a six-county region stood at $385,000 in March, a sobering turnaround from the previous year when values had reached a record $505,000, according to data released Tuesday by DataQuick Information Services.
Southern California homes haven't sold for so little since April 2004 when the region's median price stood at $380,000.
The median price represents the point where half the homes sell for more and half sell for less.
Tuesday's report covered Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties - a region that once ranked among the nation's hottest real estate markets as lenders aggressively lowered their rates and standards for qualifying for home loans.
As it turned out, many borrowers couldn't afford their mortgages after they adjusted upward from temporarily low rates. That has led to a wave of foreclosures that is prompting lenders to sell Southern California homes at sharp discounts and depressing the value of neighboring properties.
More than a third of the Southern California homes sold last month had been through a foreclosures at some point during the past year, according to DataQuick.
Riverside and San Bernardino counties - a rapidly growing region known as the Inland Empire - was particularly hard hit.
Foreclosures accounted for 56 percent of the sales in Riverside County, where the median price of a home fell 27 percent to $306,250. The erosion was even worse in San Bernardino County, where the median home price plunged 28 percent to $265,000.
Orange County remained Southern California's most expensive housing market with a median sales price of $506,000, but that was still 20 percent below last year's level.
The depressed market is prompting many prospective home sellers to stay on the sidelines until they see signs of an upturn, said Marshall Prentice, DataQuick's president.
"Often what we're left with, especially in inland areas, are sales driven by foreclosure or the threat of it," he said.
Wednesday, April 16, 2008
Real Estate Meets Recession.
There is no doubt that our real estate markets are in a full blown recession. In most real estate markets property is depreciating at 2% + per month. For example, in California property has depreciated 24% from March 07 to 08.
Be clear, we are not anywhere near the ‘bottom’. Markets will get much more challenging for sellers. More foreclosures, more short sales, more depreciation.
The fact is San Bernardino County is facing the worst home value drop in the US with a decline of almost 46% from its peak in 2005-2006 according to John Burns Real Estate Consulting. Chances are if you purchased or refinanced during the “Golden Years” you’re in a negative equity position or will be soon. What spurred this colossal loss of equity? Simply said…too many loans approved to unqualified buyers created a surge of demand driving prices up to unrealistic values resulting in “false” inflation and “false” demand for inventory.
Be clear, we are not anywhere near the ‘bottom’. Markets will get much more challenging for sellers. More foreclosures, more short sales, more depreciation.
The fact is San Bernardino County is facing the worst home value drop in the US with a decline of almost 46% from its peak in 2005-2006 according to John Burns Real Estate Consulting. Chances are if you purchased or refinanced during the “Golden Years” you’re in a negative equity position or will be soon. What spurred this colossal loss of equity? Simply said…too many loans approved to unqualified buyers created a surge of demand driving prices up to unrealistic values resulting in “false” inflation and “false” demand for inventory.
Friday, April 4, 2008
Recently in Chino....
We just met some great people the other day while helping them locate a new home to lease because they are facing a foreclosure date later this month. It's unfortunate that they had their home listed with an agent that did not have the experience to get the property sold. We're working with their lender to get an offer to them and buy a little time for the family while we get them a new home. Also, if anyone out there needs to find a place to lease let us know.
Soldiers' and Sailors' Civil Relief Act of 1940
For our heroes
http://www.defenselink.mil/specials/Relief_Act_Revision/
http://www.defenselink.mil/specials/Relief_Act_Revision/
Lenders Swamped By Foreclosures Let Homeowners Stay
April 4 (Bloomberg) -- Banks are so overwhelmed by the U.S. housing crisis they've started to look the other way when homeowners stop paying their mortgages.
The number of borrowers at least 90 days late on their home loans rose to 3.6 percent at the end of December, the highest in at least five years, according to the Mortgage Bankers Association in Washington. That figure, for the first time, is almost double the 2 percent who have been foreclosed on.
Lenders who allow owners to stay in their homes are distorting the record foreclosure rate and delaying the worst of the housing decline, said Mark Zandi, chief economist at Moody's Economy.com, a unit of New York-based Moody's Corp. These borrowers will eventually push the number of delinquencies even higher and send more homes onto an already glutted market.
``We don't have a sense of the magnitude of what's really going on because the whole process is being delayed,'' Zandi said in an interview. ``Looking at the data, we see the problems, but they are probably measurably greater than we think.''
Lenders took an average of 61 days to foreclose on a property last year, up from 37 days in the year earlier, according to RealtyTrac Inc., a foreclosure database in Irvine, California. Sales of foreclosed homes rose 4.4 percent last year at the same time the supply of such homes more than doubled, according to LoanPerformance First American CoreLogic Inc., a real estate data company based in San Francisco.
Reluctant Banks
``Some people stay in their houses until someone comes to kick them out,'' said Angel Gutierrez, owner of Dallas-based Metro Lending, which buys distressed mortgage debt. ``Sometimes no one comes to kick them out.''
Banks are reluctant to foreclose on homeowners for a variety of reasons that include the cost, said Peter Zalewski, real estate broker and owner of Condo Vultures Realty LLC, a property consulting firm in Bal Harbour, Florida.
Legal fees and maintaining a vacant property while paying the mortgage, insurance and taxes can add up to as much as 15 percent of the value of the home, and it may take months for the foreclosure to work through the legal system, he said.
``The end result is taking back a property that the bank will have to manage, rent out and or sell,'' Zalewski said.
In many cases, lenders also have to foot the bill for fixing up vacant homes that have been vandalized.
Empty Houses
Real estate broker Georgia Kapsalis is offering a home for sale in Birmingham, Michigan, a Detroit suburb, where the owner last wrote a mortgage check in July. He still lives in the house, she said.
``Some of the banks just don't want the houses to be empty, especially if it's in an area where there's a lot of theft or there are five other houses empty on the street,'' said Kapsalis, who works at Added Value Realty LLC in Livonia, Michigan, another Detroit suburb. ``They'll lose toilets, plumbing, appliances, everything. Banks are getting wise and allowing people to live there longer.''
Alexis McGee, president of Internet database Foreclosures.com in Sacramento, California, said she toured a property where the departing resident tried to make off with the outdoor air conditioning unit by sawing the metal legs off its concrete apron.
``People take what they want to take,'' McGee said. ``They feel that they're owed.''
Flooded Market
With home sales dropping and national inventories rising, the lenders have another reason to delay foreclosures, said Howard Fishman, a real estate investor based in Minneapolis.
``What are the banks going to do?'' Fishman said. ``They don't want the house. They have a mortgage for $1 million and the house is worth $750,000.''
In February, 5 million existing homes were sold on a seasonally adjusted, annualized rate, down 31 percent from the peak of 7.25 million in September 2005, data compiled by the Chicago-based National Association of Realtors show. More than 4 million existing homes were on the market in February, 53 percent more than the 2.6 million average of the past nine years, the Realtors reported.
``Excess inventories pose the biggest risk to the market,'' Michelle Meyer and Ethan Harris, New York-based economists at Lehman Brothers Holdings Inc., wrote in a report last month. ``As long as inventories are high, home prices will fall.''
New Foreclosures
Growing inventory pulled median home prices down to $195,900 in February, a 15 percent drop from the peak of $230,200 in July 2006, the Realtors said.
New foreclosures rose to 0.83 percent of all home loans in the fourth quarter from 0.54 percent a year earlier, according to the Mortgage Bankers Association.
The civil court in St. Lucie County, Florida, is getting about 44 foreclosure cases to file every day. That's the same number it averaged in a typical month in 2005, said Clerk of the Circuit Court Ed Fry.
``It's pretty overwhelming,'' he said.
Fry said he has 12 full-time employees and two temporary workers he just hired handling nothing but foreclosures. Still, the 50-page filings sit in cardboard boxes for three weeks before the court staff can process them, Fry said. Then it takes another two months to get a date on the court docket, he said.
Mortgage servicers, who collect monthly payments and are responsible for starting the foreclosure process, also were caught short-staffed, said Grant Stern, a mortgage broker and owner of Morningside Mortgage Corp. in Miami Beach, Florida.
`Moral Hazard'
``The most experienced people you can bring in are origination people,'' Stern said. ``But for a bank it's a moral hazard to have the same people who originated the loans now modifying those loans. That wouldn't be desirable. Once around is enough.''
The five largest servicers -- Countrywide Financial Corp., Wells Fargo & Co., CitiMortgage Inc., Chase Home Finance Inc. and Washington Mutual Inc. -- together manage more than half the home loans in the U.S., according to New York-based National Mortgage News, an industry publication.
While more than 100 mortgage originators have suspended operations, closed or sold themselves since the beginning of 2007, mortgage servicing units are expanding.
Chase Home Finance, a unit of New York-based JPMorgan Chase & Co. and the fourth-largest U.S. servicer, expects to spend $200 million more servicing loans in 2008 than it did last year, said spokesman Thomas Kelly.
Delayed Foreclosure
Kelly wouldn't say how many Chase borrowers have quit paying their mortgages and remain in their homes.
Efforts to keep borrowers paying their bills have slowed the foreclosure process, Mark Rodgers, a spokesman at CitiMortgage, a division of New York-based Citigroup Inc., said in an e-mail message.
``In a number of cases, we have delayed foreclosure proceedings to allow our loss mitigation teams additional time to explore potential solutions to keep distressed borrowers in their homes,'' Rodgers said.
Joe Ohayon, vice president of community relations for Wells Fargo Home Mortgage in Frederick, Maryland, a unit of San Francisco-based Wells Fargo, said trying to modify loan terms case by case adds time to the foreclosure process.
``Foreclosure is only a last resort after all available options for keeping the customer in the home have been exhausted,'' Ohayon said in an e-mail message.
Affordable Payments
Olivia Riley, a spokeswoman at Seattle-based Washington Mutual, said in an e-mail that the company's goal is to keep customers in their homes ``with payments they can afford.''
Representatives for Calabasas, California-based Countrywide, the biggest U.S. mortgage servicer last year, didn't respond to requests for comment.
Few mortgage companies will admit they allow homeowners to stay in their homes without paying their bills.
``No servicer will say you can live rent-free for six months, go ahead,'' said Paul Miller, a mortgage industry analyst at Friedman Billings Ramsey & Co. in Arlington, Virginia. ``Eventually, the servicers will clear these guys out.''
Homeowners usually get 90 days to resume paying before foreclosure proceedings begin with the filing of a complaint or notice of non-payment.
State laws determine the length of time between the filing and an auction of the house. In most states, it's two to six months, according to Foreclosures.com. In Maine, it can be up to a year and in New York, 19 months; in Georgia, it's as quickly as one month, and in Nevada, it can be 35 days, according to the database.
Borrowers in California who fight foreclosure can stretch the process to 18 months, said Cameron Pannabecker, chapter president of the California Association of Mortgage Brokers and president of Cal-Pro Mortgage Inc. in Stockton.
That doesn't take into account the woman he knows who hasn't made a mortgage payment in eight months and hasn't heard from her lender, Pannabecker said.
``Now she's afraid to mail in a payment for fear it'll come to somebody's attention,'' he said.
To contact the reporter on this story: Bob Ivry in New York at bivry@bloomberg.net.
The number of borrowers at least 90 days late on their home loans rose to 3.6 percent at the end of December, the highest in at least five years, according to the Mortgage Bankers Association in Washington. That figure, for the first time, is almost double the 2 percent who have been foreclosed on.
Lenders who allow owners to stay in their homes are distorting the record foreclosure rate and delaying the worst of the housing decline, said Mark Zandi, chief economist at Moody's Economy.com, a unit of New York-based Moody's Corp. These borrowers will eventually push the number of delinquencies even higher and send more homes onto an already glutted market.
``We don't have a sense of the magnitude of what's really going on because the whole process is being delayed,'' Zandi said in an interview. ``Looking at the data, we see the problems, but they are probably measurably greater than we think.''
Lenders took an average of 61 days to foreclose on a property last year, up from 37 days in the year earlier, according to RealtyTrac Inc., a foreclosure database in Irvine, California. Sales of foreclosed homes rose 4.4 percent last year at the same time the supply of such homes more than doubled, according to LoanPerformance First American CoreLogic Inc., a real estate data company based in San Francisco.
Reluctant Banks
``Some people stay in their houses until someone comes to kick them out,'' said Angel Gutierrez, owner of Dallas-based Metro Lending, which buys distressed mortgage debt. ``Sometimes no one comes to kick them out.''
Banks are reluctant to foreclose on homeowners for a variety of reasons that include the cost, said Peter Zalewski, real estate broker and owner of Condo Vultures Realty LLC, a property consulting firm in Bal Harbour, Florida.
Legal fees and maintaining a vacant property while paying the mortgage, insurance and taxes can add up to as much as 15 percent of the value of the home, and it may take months for the foreclosure to work through the legal system, he said.
``The end result is taking back a property that the bank will have to manage, rent out and or sell,'' Zalewski said.
In many cases, lenders also have to foot the bill for fixing up vacant homes that have been vandalized.
Empty Houses
Real estate broker Georgia Kapsalis is offering a home for sale in Birmingham, Michigan, a Detroit suburb, where the owner last wrote a mortgage check in July. He still lives in the house, she said.
``Some of the banks just don't want the houses to be empty, especially if it's in an area where there's a lot of theft or there are five other houses empty on the street,'' said Kapsalis, who works at Added Value Realty LLC in Livonia, Michigan, another Detroit suburb. ``They'll lose toilets, plumbing, appliances, everything. Banks are getting wise and allowing people to live there longer.''
Alexis McGee, president of Internet database Foreclosures.com in Sacramento, California, said she toured a property where the departing resident tried to make off with the outdoor air conditioning unit by sawing the metal legs off its concrete apron.
``People take what they want to take,'' McGee said. ``They feel that they're owed.''
Flooded Market
With home sales dropping and national inventories rising, the lenders have another reason to delay foreclosures, said Howard Fishman, a real estate investor based in Minneapolis.
``What are the banks going to do?'' Fishman said. ``They don't want the house. They have a mortgage for $1 million and the house is worth $750,000.''
In February, 5 million existing homes were sold on a seasonally adjusted, annualized rate, down 31 percent from the peak of 7.25 million in September 2005, data compiled by the Chicago-based National Association of Realtors show. More than 4 million existing homes were on the market in February, 53 percent more than the 2.6 million average of the past nine years, the Realtors reported.
``Excess inventories pose the biggest risk to the market,'' Michelle Meyer and Ethan Harris, New York-based economists at Lehman Brothers Holdings Inc., wrote in a report last month. ``As long as inventories are high, home prices will fall.''
New Foreclosures
Growing inventory pulled median home prices down to $195,900 in February, a 15 percent drop from the peak of $230,200 in July 2006, the Realtors said.
New foreclosures rose to 0.83 percent of all home loans in the fourth quarter from 0.54 percent a year earlier, according to the Mortgage Bankers Association.
The civil court in St. Lucie County, Florida, is getting about 44 foreclosure cases to file every day. That's the same number it averaged in a typical month in 2005, said Clerk of the Circuit Court Ed Fry.
``It's pretty overwhelming,'' he said.
Fry said he has 12 full-time employees and two temporary workers he just hired handling nothing but foreclosures. Still, the 50-page filings sit in cardboard boxes for three weeks before the court staff can process them, Fry said. Then it takes another two months to get a date on the court docket, he said.
Mortgage servicers, who collect monthly payments and are responsible for starting the foreclosure process, also were caught short-staffed, said Grant Stern, a mortgage broker and owner of Morningside Mortgage Corp. in Miami Beach, Florida.
`Moral Hazard'
``The most experienced people you can bring in are origination people,'' Stern said. ``But for a bank it's a moral hazard to have the same people who originated the loans now modifying those loans. That wouldn't be desirable. Once around is enough.''
The five largest servicers -- Countrywide Financial Corp., Wells Fargo & Co., CitiMortgage Inc., Chase Home Finance Inc. and Washington Mutual Inc. -- together manage more than half the home loans in the U.S., according to New York-based National Mortgage News, an industry publication.
While more than 100 mortgage originators have suspended operations, closed or sold themselves since the beginning of 2007, mortgage servicing units are expanding.
Chase Home Finance, a unit of New York-based JPMorgan Chase & Co. and the fourth-largest U.S. servicer, expects to spend $200 million more servicing loans in 2008 than it did last year, said spokesman Thomas Kelly.
Delayed Foreclosure
Kelly wouldn't say how many Chase borrowers have quit paying their mortgages and remain in their homes.
Efforts to keep borrowers paying their bills have slowed the foreclosure process, Mark Rodgers, a spokesman at CitiMortgage, a division of New York-based Citigroup Inc., said in an e-mail message.
``In a number of cases, we have delayed foreclosure proceedings to allow our loss mitigation teams additional time to explore potential solutions to keep distressed borrowers in their homes,'' Rodgers said.
Joe Ohayon, vice president of community relations for Wells Fargo Home Mortgage in Frederick, Maryland, a unit of San Francisco-based Wells Fargo, said trying to modify loan terms case by case adds time to the foreclosure process.
``Foreclosure is only a last resort after all available options for keeping the customer in the home have been exhausted,'' Ohayon said in an e-mail message.
Affordable Payments
Olivia Riley, a spokeswoman at Seattle-based Washington Mutual, said in an e-mail that the company's goal is to keep customers in their homes ``with payments they can afford.''
Representatives for Calabasas, California-based Countrywide, the biggest U.S. mortgage servicer last year, didn't respond to requests for comment.
Few mortgage companies will admit they allow homeowners to stay in their homes without paying their bills.
``No servicer will say you can live rent-free for six months, go ahead,'' said Paul Miller, a mortgage industry analyst at Friedman Billings Ramsey & Co. in Arlington, Virginia. ``Eventually, the servicers will clear these guys out.''
Homeowners usually get 90 days to resume paying before foreclosure proceedings begin with the filing of a complaint or notice of non-payment.
State laws determine the length of time between the filing and an auction of the house. In most states, it's two to six months, according to Foreclosures.com. In Maine, it can be up to a year and in New York, 19 months; in Georgia, it's as quickly as one month, and in Nevada, it can be 35 days, according to the database.
Borrowers in California who fight foreclosure can stretch the process to 18 months, said Cameron Pannabecker, chapter president of the California Association of Mortgage Brokers and president of Cal-Pro Mortgage Inc. in Stockton.
That doesn't take into account the woman he knows who hasn't made a mortgage payment in eight months and hasn't heard from her lender, Pannabecker said.
``Now she's afraid to mail in a payment for fear it'll come to somebody's attention,'' he said.
To contact the reporter on this story: Bob Ivry in New York at bivry@bloomberg.net.
California Senate approves bill on mortgage debt...onto the Assembly
California Senate approves bill on mortgage debt
From the Associated Press
March 25, 2008
SACRAMENTO -- The state Senate approved a bill Monday to help California homeowners whose lenders have forgiven part of their mortgage debt.
The bill would end a requirement that homeowners report that part of the loan that was forgiven as income on their tax returns.
Sen. Michael Machado (D-Linden) said the bill would help in a short sale, loan modification or refinance in which part or all of the debt is forgiven.
The bill would apply only to owner-occupied homes in which the debt was forgiven this year or last. The bill now heads to the Assembly.
From the Associated Press
March 25, 2008
SACRAMENTO -- The state Senate approved a bill Monday to help California homeowners whose lenders have forgiven part of their mortgage debt.
The bill would end a requirement that homeowners report that part of the loan that was forgiven as income on their tax returns.
Sen. Michael Machado (D-Linden) said the bill would help in a short sale, loan modification or refinance in which part or all of the debt is forgiven.
The bill would apply only to owner-occupied homes in which the debt was forgiven this year or last. The bill now heads to the Assembly.
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