Foreclosure Timelines Reach New Records
DAILY REAL ESTATE NEWS | FRIDAY, APRIL 12, 2013
Foreclosures are taking longer to complete, with the average time it takes a lender to repossess a home jumping to 477 days in the the first quarter of this year compared to 414 days in the fourth quarter of 2012, RealtyTrac reports in its March foreclosure report. That represents the longest average timeline that RealtyTrac has ever recorded.
The longer timelines are being blamed on recent legislation enacted in several states, such as California, Oregon, and Massachusetts. The five largest lenders also have slowed down many foreclosures following the new servicing standards that were outlined in the National Mortgage Settlement, says Daren Blomquist, vice president at RealtyTrac.
As the timelines for foreclosures expands, foreclosures continue to subside, dropping to its lowest level in March since September 2007. Foreclosure filings — which include default notices, scheduled auctions, and bank repossessions — are down 23 percent from a year earlier, according to RealtyTrac.
"Although the overall national foreclosure trend continues to head lower, late-blooming foreclosures are bolting higher in some local markets where aggressive foreclosure prevention efforts in previous years are wearing off," says Blomquist. "Meanwhile, more recent foreclosure prevention efforts in other states have drastically increased the average time to foreclose, which could result in a similar outbreak of delayed foreclosures down the road in those states."
Source: “Foreclosure timelines reach record lengths,” Inman News (April 11, 2013)
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Friday, April 12, 2013
Thursday, April 11, 2013
Fannie Mae Posts Highest Profits Ever
Fannie Mae Posts Highest Profits Ever
Mortgage giant Fannie Mae reported $17.2 billion for net income in 2012, its largst annual profit ever, The Wall Street Journal reports.
The housing market’s recovery is leading to fewer loans going bad, which is in turn helping Fannie see rising profits. Timothy Mayopoulos, Fannie’s chief executive, said he expects Fannie to “remain profitable for the foreseeable future.”
In the fourth quarter of 2012, Fannie posted a $7.6 billion profit. That’s compared to one year earlier, in which the mortgage giant posted a net loss of $2.4 billion.
Fannie officials say they expect to post a large gain for earnings in the first-quarter of 2013, which it will report next month.
Fellow government-sponsored enterprise, Freddie Mac, also reported its own record profit for 2012: $11 billion last year.
Fannie and Freddie have received $187.5 billion from the U.S. Treasury when taxpayer bailout money was needed to keep the GSEs afloat as distressed properties were surging. Fannie Mae and Freddie Mac now send nearly all their profits to the U.S. Treasury. “As a result, they have gone from being a major drain on the government’s coffers to a significant potential source of revenue,” The Wall Street Journal reports.
To view the original article, click here: http://realtormag.realtor.org/daily-news/2013/04/03/fannie-mae-soars-record-profits
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Mortgage giant Fannie Mae reported $17.2 billion for net income in 2012, its largst annual profit ever, The Wall Street Journal reports.
The housing market’s recovery is leading to fewer loans going bad, which is in turn helping Fannie see rising profits. Timothy Mayopoulos, Fannie’s chief executive, said he expects Fannie to “remain profitable for the foreseeable future.”
In the fourth quarter of 2012, Fannie posted a $7.6 billion profit. That’s compared to one year earlier, in which the mortgage giant posted a net loss of $2.4 billion.
Fannie officials say they expect to post a large gain for earnings in the first-quarter of 2013, which it will report next month.
Fellow government-sponsored enterprise, Freddie Mac, also reported its own record profit for 2012: $11 billion last year.
Fannie and Freddie have received $187.5 billion from the U.S. Treasury when taxpayer bailout money was needed to keep the GSEs afloat as distressed properties were surging. Fannie Mae and Freddie Mac now send nearly all their profits to the U.S. Treasury. “As a result, they have gone from being a major drain on the government’s coffers to a significant potential source of revenue,” The Wall Street Journal reports.
To view the original article, click here: http://realtormag.realtor.org/daily-news/2013/04/03/fannie-mae-soars-record-profits
Visit us online at www.OceanBlueRealEstate.com
Homes for sale in the Key West area on the water priced under $750k
Tuesday, April 9, 2013
Think Twice - Real Estate Advice
Think Twice Before You Dip Into 401k to Payoff Mortgage
Money Watch, a personal finance column that runs every Saturday, features a financial planner from the National Association of Personal Financial Advisors answering reader questions about saving, protecting and growing your money. To submit a question, e-mail USA TODAY personal finance reporter Christine Dugas at: cdugas@usatoday.com.
Q: My husband and I have a terrible situation. Our mortgage rate is 9% with a loan balance of $122,000 and 25 years left to pay. Because of the market downturn, the home value is approximately $85,000. My husband is 57 and I am 55. When he turns 59½, would it be good to use our 401(k) retirement savings to pay off this mortgage? Or do we have other options?
A: No question, it’s a bad situation.You did not indicate if the loan is a financial hardship, or if you and your husband are having trouble keeping up with mortgage payments.
If, indeed, you are severely stressed, then you should find out who owns the loan (FHA, Fannie Mae or Freddie Mac). You may be able to modify the loan under the HARP or HAMP programs. If none of these lenders owns the mortgage, you may still be able to negotiate a reduction through the Principal Reduction Alternative program. But you will need to demonstrate financial need.
If you can make the payments, the interest rate on the mortgage is really sickening, given today’s rates. One way to recast this is to think of this loan as a credit card, at low interest (for credit cards). How would you approach paying off a large, expensive credit card debt? Here are some possibilities:
1. Accelerate principal payments. The goal here is not necessarily to pay off the entire loan, but to pay off, as quickly as possible, enough to have equity in the home (about $45,000 in additional principal reduction). That should make refinancing possible. Also, during this period the value of the home may increase so that there will be less difference between mortgage owed and then-current value.
2. Ask a Realtor or two to come over and do a market analysis. Is there anything you could do to improve the home relative to similar homes? Sometimes a thorough repaint, junk cleanup, or other fairly inexpensive alterations can make a big difference in appraised value. It’s worth getting expert evaluation from a Realtor.
3. Ask the Realtor for recommendations on a mortgage broker and contact them. Some mortgage brokers are more creative than others, so it’s worthwhile talking to several. It’s particularly worthwhile to explore community lenders who may hold their own loans, or mortgage brokers who work with private investors. However, be very cautious with the terms of such loans, and have an attorney review the proposed loan.
4. Is there anyone in your circle of friends and colleagues who might be interested in making a private loan? Even if you pay a higher-than-current mortgage interest rate (say, 6%) it might be an attractive return for the investor. And even if you cannot borrow the full amount of the mortgage, you might be able to borrow enough to pay down the principal and refinance the balance. But the private loan should be reported as part of total indebtedness (otherwise it’s fraud).
5. You might explore refinancing policies with your lender. Generally, a lender might be more willing to discuss loan modification if the loan is in default, but no one should attempt a so-called strategic default without consulting a reputable and knowledgeable real estate attorney.
6. You might explore the lender’s policies on turning the property over to it. The lender may not be too enthusiastic, but if you are willing to move, you may want to talk this over with an attorney, as well.
Now to examine the original idea: Should you withdraw from your 401(k) to pay off the loan?
Based strictly on numbers, it is only worth paying off a mortgage if the interest rate on the mortgage exceeds what you might expect to earn from a diversified portfolio of investments. Historically, a portfolio of 60% stocks/40% bonds has earned approximately 8.6% (1926-2011), so you are right on the borderline of whether it would be worthwhile with a 9% interest rate. However, the psychological peace may more than outweigh simple numbers.
Before withdrawing the money, you should consider whether the remaining 401(k) will offer withdrawals sufficient to allow you to maintain your needed retirement income. Even though there will no longer be a mortgage payment, there will still be property taxes, home maintenance, insurance and incidental costs of homeownership. It’s very important that retirees not become house-rich and cash-poor. You cannot replace the 401(k) funds with a home equity loan, and such a loan may be harder to secure once you are retired.
This is a situation where there are no good answers, but also tremendous flux in public policy. You should explore the suggested alternatives and keep a close eye on the news for any changes or new offerings in the next several years. As with most financial situations, the more money you can set aside for debt repayment and an investment war chest, the more alternatives you are likely to have in the future.
To view the original article, click here: http://www.usatoday.com/story/money/personalfinance/2013/03/30/underwater-homeowners-mortgage-401k/2024497/
Visit us online at www.OceanBlueRealEstate.com
Key West Condos for Sale
Money Watch, a personal finance column that runs every Saturday, features a financial planner from the National Association of Personal Financial Advisors answering reader questions about saving, protecting and growing your money. To submit a question, e-mail USA TODAY personal finance reporter Christine Dugas at: cdugas@usatoday.com.
Q: My husband and I have a terrible situation. Our mortgage rate is 9% with a loan balance of $122,000 and 25 years left to pay. Because of the market downturn, the home value is approximately $85,000. My husband is 57 and I am 55. When he turns 59½, would it be good to use our 401(k) retirement savings to pay off this mortgage? Or do we have other options?
A: No question, it’s a bad situation.You did not indicate if the loan is a financial hardship, or if you and your husband are having trouble keeping up with mortgage payments.
If, indeed, you are severely stressed, then you should find out who owns the loan (FHA, Fannie Mae or Freddie Mac). You may be able to modify the loan under the HARP or HAMP programs. If none of these lenders owns the mortgage, you may still be able to negotiate a reduction through the Principal Reduction Alternative program. But you will need to demonstrate financial need.
If you can make the payments, the interest rate on the mortgage is really sickening, given today’s rates. One way to recast this is to think of this loan as a credit card, at low interest (for credit cards). How would you approach paying off a large, expensive credit card debt? Here are some possibilities:
1. Accelerate principal payments. The goal here is not necessarily to pay off the entire loan, but to pay off, as quickly as possible, enough to have equity in the home (about $45,000 in additional principal reduction). That should make refinancing possible. Also, during this period the value of the home may increase so that there will be less difference between mortgage owed and then-current value.
2. Ask a Realtor or two to come over and do a market analysis. Is there anything you could do to improve the home relative to similar homes? Sometimes a thorough repaint, junk cleanup, or other fairly inexpensive alterations can make a big difference in appraised value. It’s worth getting expert evaluation from a Realtor.
3. Ask the Realtor for recommendations on a mortgage broker and contact them. Some mortgage brokers are more creative than others, so it’s worthwhile talking to several. It’s particularly worthwhile to explore community lenders who may hold their own loans, or mortgage brokers who work with private investors. However, be very cautious with the terms of such loans, and have an attorney review the proposed loan.
4. Is there anyone in your circle of friends and colleagues who might be interested in making a private loan? Even if you pay a higher-than-current mortgage interest rate (say, 6%) it might be an attractive return for the investor. And even if you cannot borrow the full amount of the mortgage, you might be able to borrow enough to pay down the principal and refinance the balance. But the private loan should be reported as part of total indebtedness (otherwise it’s fraud).
5. You might explore refinancing policies with your lender. Generally, a lender might be more willing to discuss loan modification if the loan is in default, but no one should attempt a so-called strategic default without consulting a reputable and knowledgeable real estate attorney.
6. You might explore the lender’s policies on turning the property over to it. The lender may not be too enthusiastic, but if you are willing to move, you may want to talk this over with an attorney, as well.
Now to examine the original idea: Should you withdraw from your 401(k) to pay off the loan?
Based strictly on numbers, it is only worth paying off a mortgage if the interest rate on the mortgage exceeds what you might expect to earn from a diversified portfolio of investments. Historically, a portfolio of 60% stocks/40% bonds has earned approximately 8.6% (1926-2011), so you are right on the borderline of whether it would be worthwhile with a 9% interest rate. However, the psychological peace may more than outweigh simple numbers.
Before withdrawing the money, you should consider whether the remaining 401(k) will offer withdrawals sufficient to allow you to maintain your needed retirement income. Even though there will no longer be a mortgage payment, there will still be property taxes, home maintenance, insurance and incidental costs of homeownership. It’s very important that retirees not become house-rich and cash-poor. You cannot replace the 401(k) funds with a home equity loan, and such a loan may be harder to secure once you are retired.
This is a situation where there are no good answers, but also tremendous flux in public policy. You should explore the suggested alternatives and keep a close eye on the news for any changes or new offerings in the next several years. As with most financial situations, the more money you can set aside for debt repayment and an investment war chest, the more alternatives you are likely to have in the future.
To view the original article, click here: http://www.usatoday.com/story/money/personalfinance/2013/03/30/underwater-homeowners-mortgage-401k/2024497/
Visit us online at www.OceanBlueRealEstate.com
Key West Condos for Sale
What and Who to Trust
Contradicting Economic Headlines Rule the Day
Number of Loans in Foreclosure Reaches a Three-Year Low
Foreclosure Activity Rising in 2013
Both headlines above appeared in the media last week. The amazing part is that both headlines appeared on the same day and from the same media source (HousingWire)!!
The first headline commented on the recently released Office of the Comptroller of the Currency (OCC) study:
"Loan quality on first-lien mortgages improved significantly in the fourth quarter of 2012, with the OCC reporting that the number of loans in some stage of foreclosure fell below one-million for the first time in three years."
The second headline reported on recently released study by RealtyTrac:
"In its first-ever U.S. Foreclosure Inventory Analysis, RealtyTrac revealed that 1.5 million U.S. properties were actively in the foreclosure process or bank-owned in the first quarter of 2013. This number was up 9% from the first quarter of 2012."
Are both headlines correct? Yes. Each study is revealing information on a different set of data during a different period of time.
However, to a person who is not an industry expert, the headlines could be very confusing. If foreclosures are decreasing, future prices should increase. If foreclosures are increasing, there would be downward pressure on values. Knowing whether foreclosures are actually increasing or decreasing should have an impact on a consumer’s decision to move forward. Any confusion could lead to a consumer making a poor decision.
In today’s real estate market, whether you are thinking of buying or selling, it is CRUCIAL for you to seek out the advice of a professional who truly is a market expert.
To view the original article, click here: http://www.kcmblog.com/2013/04/02/wtheck-more-crazy-real-estate-headlines/
What is a Buyers Agent
Number of Loans in Foreclosure Reaches a Three-Year Low
Foreclosure Activity Rising in 2013
Both headlines above appeared in the media last week. The amazing part is that both headlines appeared on the same day and from the same media source (HousingWire)!!
The first headline commented on the recently released Office of the Comptroller of the Currency (OCC) study:
"Loan quality on first-lien mortgages improved significantly in the fourth quarter of 2012, with the OCC reporting that the number of loans in some stage of foreclosure fell below one-million for the first time in three years."
The second headline reported on recently released study by RealtyTrac:
"In its first-ever U.S. Foreclosure Inventory Analysis, RealtyTrac revealed that 1.5 million U.S. properties were actively in the foreclosure process or bank-owned in the first quarter of 2013. This number was up 9% from the first quarter of 2012."
Are both headlines correct? Yes. Each study is revealing information on a different set of data during a different period of time.
However, to a person who is not an industry expert, the headlines could be very confusing. If foreclosures are decreasing, future prices should increase. If foreclosures are increasing, there would be downward pressure on values. Knowing whether foreclosures are actually increasing or decreasing should have an impact on a consumer’s decision to move forward. Any confusion could lead to a consumer making a poor decision.
In today’s real estate market, whether you are thinking of buying or selling, it is CRUCIAL for you to seek out the advice of a professional who truly is a market expert.
To view the original article, click here: http://www.kcmblog.com/2013/04/02/wtheck-more-crazy-real-estate-headlines/
What is a Buyers Agent
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