Realty Times of July 28, 2009
Real Estate Outlook: Positive Growth by Kenneth R. Harney
There was an important piece of economic news last week that has HUGE significance for real estate and housing, but it got minimal coverage on TV and in print.
The Conference Board's Index of Leading Economic Indicators, widely acknowledged as the most accurate predictor of future activity and output in the U.S. economy, rose by almost a point in June.
That was the third straight month of positive growth. But more importantly, it was the first time since 2004 that the index has increased for three consecutive months.
That's crucial for real estate because housing sales, production and prices are closely tied to movements in the overall economy: jobs, manufacturing, exports, household incomes and the like.
There's no way we're going to see a sizable housing recovery until the economy pulls itself out of recession and starts to grow again.
The index of leading indicators is clearly telling us that that process is well underway -- and that's a very encouraging message.
Federal Reserve Chairman Ben Bernanke, in testimony before Congress last week, pretty much said the same: A modest recovery is not far off, he said, though it will take a long time to get unemployment levels back down to pre-recession levels.
Meanwhile, residential real estate continues to put up impressive numbers on the tote board:
New single family housing starts in June rose by 14.4 percent -- the fourth straight month of increasing activity by home builders, who'd previously shut down construction because they hadn't sold off their inventories. And they were afraid consumers wouldn't pay the prices they need to charge.
Those worries are over. Total starts in New England were up by 29 percent and in the Midwest by 33 percent. Builders report seeing much more traffic at their subdivision showrooms, far lower fallout on contracts, and rising sales.
Sales of existing homes were up in many areas for the month as well - rising by 3.6 percent nationwide in June, according to the National Association of Realtors. Lawrence Yun, chief economist for the association, commented that "we expect (this) gradual uptrend in sales to continue" thanks to the $8,000 home buyer credit, favorable mortgage rates and low prices.
New mortgage applications to buy houses continued to increase last week, according to the Mortgage Bankers Association, even though rates edged slightly higher. Thirty-year fixed rates averaged 5.3 percent and 15-year rates averaged 4.8 percent for the week, both up by two-tenths of a percentage point.
All in all, the numbers are looking better and better.
Copyright © 2009 Realty Times. All Rights Reserved.
Wednesday, July 29, 2009
Thursday, July 23, 2009
Mortgage Fraud Crackdown
From Realty Times of July 23, 2009
Mortgage Fraud Crackdown by Broderick Perkins
Apparently, even in hard times, mortgage fraud remains an easy con.
The number of Suspicious Activity Reports (SARs) for mortgage fraud tracked by the Federal Bureau of Investigation could skyrocket by nearly 300 percent this year.
Compared to 2007, mortgage fraud SARs in 2008 had already increased by more than 36 percent to 63,000. But just two months into 2009, the FBI has already documented nearly 29,000 mortgage fraud SARs. At that rate, some 174,000 SARs,
• a 276 percent increase
• could be filed by the end of the year.
And that's only what the FBI can see.
"Many mortgage finance-related entities are either loosely or completely unregulated at the state or federal level," said FBI Director Robert Mueller in recent testimony before the U.S. Senate Appropriations panel.
The good news?
"The current financial crisis has produced an unexpected consequence. They have helped reveal numerous mortgage fraud schemes, Ponzi schemes, and investment frauds, such as the Bernard Madoff scam," Mueller testified.
But while the Feds are catching up with Wall Street crooks, struggling homeowners on Main Street remain common prey. Despite tougher lending standards putting the kibosh on some types of home loan scams, organized wise guys continue to traffic in mortgage fraud.
That's prompted the U.S. Department of the Treasury, the U.S. Department of Justice (DOJ), the Department of Housing and Urban Development (HUD), the Federal Trade Commission (FTC), and the Attorney General of Illinois to launch new initiatives to pump up fraud investigations and step up enforcement actions, especially to protect homeowners seeking relief from President Obama's Making Home Affordable initiative.
The effort particularly targets loan modification and mortgage fraud.
Mortgage fraud, a relatively new form of organized crime, first cashed in on the greed that came with the boom market, when some buyers would do anything to own a home • including lie on the application. Cons, often insiders, also falsified documents, inflated appraisals and used other underhanded techniques to get home loans approved and properties flipped for a hefty profit when appreciation was skyrocketing.
With the housing market bust, however, came stricter underwriting scrutiny which helped stem the tide of loans approved with fabricated information.
Now, mortgage fraud is taking advantage of vulnerable, gullible homeowners facing foreclosure. Like those who once fibbed to cash in on the booming market, many struggling homeowners are likewise willing to do anything to remain homeowners.
Mueller said today's host of sophisticated scams are associated with new loan modification services, foreclosure bailouts, equity grabs, bankruptcy, identity theft and property flipping, among others.
Bruce Hahn, president of the American Homeowners Foundation, a non-profit advocacy group in Washington, D.C. says it's tough to tell the good guys from the bad without a scorecard.
"Some loan modification services are competent, but some are incompetent and there is another group of people who post ads to help with mortgage problems, but are basically fraudsters and fronts," Hahn said.
The FTC recently surveyed online and print advertising for mortgage foreclosure rescue operations nationwide and identified approximately 71 distinct companies running suspicious ads.
It's clear homeowners, who want to avoid being taken by the new scammers must likewise become more sophisticated.
The experts advise:
• Don't be a rube. If it sounds too good to be true • it probably is. Debts, bad credit and other financial holes didn't appear over night. They won't magically disappear over night.
"A fair number of homeowners have actually paid someone money before they see us. They see us because they paid and the company didn't do anything for them," said Martin Eichner, director of housing counseling services for Project Sentinel in Northern California.
• Be wary of strangers and unsolicited contacts, as well as high-pressure sales techniques. Avoid spam come-ons and web-based advertisements promoting the elimination of mortgage loans for an up-front fee to prepare documents to satisfy the debt. Beware of offers to "save" you from defaulting on loan payments or from foreclosure.
"The most outrageous of these schemes are offers to take your mortgage payment and hold them for you in a trust account. That is a total rip off. Never give your mortgage payment to any third party," Eichner said.
• Attempts to cajole you into making false statements in the name of mortgage relief is a red flag. Likewise don't sign blank documents or those you don't understand.
• Seek out family, friends, co-workers and others you trust who recently successfully solved a mortgage problem. Ask them for referrals. That applies to loan modifications, work outs, restructuring and refinance efforts.
"I would say contact a U.S. Department of Housing and Urban Development, but you can't just say that. We can't help everybody who needs help (because of overwhelming demand). If you hire a for-profit service you should be paying money only if (and after) they are successful. If they are an attorney, contact the state bar. For mortgage brokers (and real estate agents) check with the California Department of Real Estate," Eichner added.
Hahn also says to contact city and county housing offices for assistance and referrals and the latest information on legal, government-sponsored assistance.
Get more help from the Making Home Affordable initiative.
--------------------------------------------------------------------------------
Copyright © 2009 Realty Times. All Rights Reserved.
Mortgage Fraud Crackdown by Broderick Perkins
Apparently, even in hard times, mortgage fraud remains an easy con.
The number of Suspicious Activity Reports (SARs) for mortgage fraud tracked by the Federal Bureau of Investigation could skyrocket by nearly 300 percent this year.
Compared to 2007, mortgage fraud SARs in 2008 had already increased by more than 36 percent to 63,000. But just two months into 2009, the FBI has already documented nearly 29,000 mortgage fraud SARs. At that rate, some 174,000 SARs,
• a 276 percent increase
• could be filed by the end of the year.
And that's only what the FBI can see.
"Many mortgage finance-related entities are either loosely or completely unregulated at the state or federal level," said FBI Director Robert Mueller in recent testimony before the U.S. Senate Appropriations panel.
The good news?
"The current financial crisis has produced an unexpected consequence. They have helped reveal numerous mortgage fraud schemes, Ponzi schemes, and investment frauds, such as the Bernard Madoff scam," Mueller testified.
But while the Feds are catching up with Wall Street crooks, struggling homeowners on Main Street remain common prey. Despite tougher lending standards putting the kibosh on some types of home loan scams, organized wise guys continue to traffic in mortgage fraud.
That's prompted the U.S. Department of the Treasury, the U.S. Department of Justice (DOJ), the Department of Housing and Urban Development (HUD), the Federal Trade Commission (FTC), and the Attorney General of Illinois to launch new initiatives to pump up fraud investigations and step up enforcement actions, especially to protect homeowners seeking relief from President Obama's Making Home Affordable initiative.
The effort particularly targets loan modification and mortgage fraud.
Mortgage fraud, a relatively new form of organized crime, first cashed in on the greed that came with the boom market, when some buyers would do anything to own a home • including lie on the application. Cons, often insiders, also falsified documents, inflated appraisals and used other underhanded techniques to get home loans approved and properties flipped for a hefty profit when appreciation was skyrocketing.
With the housing market bust, however, came stricter underwriting scrutiny which helped stem the tide of loans approved with fabricated information.
Now, mortgage fraud is taking advantage of vulnerable, gullible homeowners facing foreclosure. Like those who once fibbed to cash in on the booming market, many struggling homeowners are likewise willing to do anything to remain homeowners.
Mueller said today's host of sophisticated scams are associated with new loan modification services, foreclosure bailouts, equity grabs, bankruptcy, identity theft and property flipping, among others.
Bruce Hahn, president of the American Homeowners Foundation, a non-profit advocacy group in Washington, D.C. says it's tough to tell the good guys from the bad without a scorecard.
"Some loan modification services are competent, but some are incompetent and there is another group of people who post ads to help with mortgage problems, but are basically fraudsters and fronts," Hahn said.
The FTC recently surveyed online and print advertising for mortgage foreclosure rescue operations nationwide and identified approximately 71 distinct companies running suspicious ads.
It's clear homeowners, who want to avoid being taken by the new scammers must likewise become more sophisticated.
The experts advise:
• Don't be a rube. If it sounds too good to be true • it probably is. Debts, bad credit and other financial holes didn't appear over night. They won't magically disappear over night.
"A fair number of homeowners have actually paid someone money before they see us. They see us because they paid and the company didn't do anything for them," said Martin Eichner, director of housing counseling services for Project Sentinel in Northern California.
• Be wary of strangers and unsolicited contacts, as well as high-pressure sales techniques. Avoid spam come-ons and web-based advertisements promoting the elimination of mortgage loans for an up-front fee to prepare documents to satisfy the debt. Beware of offers to "save" you from defaulting on loan payments or from foreclosure.
"The most outrageous of these schemes are offers to take your mortgage payment and hold them for you in a trust account. That is a total rip off. Never give your mortgage payment to any third party," Eichner said.
• Attempts to cajole you into making false statements in the name of mortgage relief is a red flag. Likewise don't sign blank documents or those you don't understand.
• Seek out family, friends, co-workers and others you trust who recently successfully solved a mortgage problem. Ask them for referrals. That applies to loan modifications, work outs, restructuring and refinance efforts.
"I would say contact a U.S. Department of Housing and Urban Development, but you can't just say that. We can't help everybody who needs help (because of overwhelming demand). If you hire a for-profit service you should be paying money only if (and after) they are successful. If they are an attorney, contact the state bar. For mortgage brokers (and real estate agents) check with the California Department of Real Estate," Eichner added.
Hahn also says to contact city and county housing offices for assistance and referrals and the latest information on legal, government-sponsored assistance.
Get more help from the Making Home Affordable initiative.
--------------------------------------------------------------------------------
Copyright © 2009 Realty Times. All Rights Reserved.
Wednesday, July 15, 2009
America's most affordable cities.
From Realty Times of July 15, 2009
Market Conditions by Realty Times Staff
Forbes.com recently reported on its what stats show are America's most affordable cities.
Their criteria was based on cost of living and employment rates. They report that "U.S. homes are more affordable than they've been in two decades. The most recent report by the National Association of Homebuilders and Wells Fargo Bank showed that 72.5% of American homes sold in the last quarter were considered affordable. Of course, foreclosures and sliding prices may play a role."
Making the list:
Phoenix, Arizona
Columbus, Ohio
San Antonio, Texas
Houston, Texas
Dallas, Texas
Austin, Texas
Cincinnati, Ohio
Pittsburgh, Pennsylvania
St. Louis, Missouri
Indianapolis, Indiana
Copyright © 2009 Realty Times. All Rights Reserved.
Market Conditions by Realty Times Staff
Forbes.com recently reported on its what stats show are America's most affordable cities.
Their criteria was based on cost of living and employment rates. They report that "U.S. homes are more affordable than they've been in two decades. The most recent report by the National Association of Homebuilders and Wells Fargo Bank showed that 72.5% of American homes sold in the last quarter were considered affordable. Of course, foreclosures and sliding prices may play a role."
Making the list:
Phoenix, Arizona
Columbus, Ohio
San Antonio, Texas
Houston, Texas
Dallas, Texas
Austin, Texas
Cincinnati, Ohio
Pittsburgh, Pennsylvania
St. Louis, Missouri
Indianapolis, Indiana
Copyright © 2009 Realty Times. All Rights Reserved.
Monday, July 13, 2009
From Realty Times of July 13, 2009
Washington Report: Home Affordable Refinance Program by Kenneth R. Harney
The Obama administration's latest expansion of its "home affordable" refinance program, outlined just before the July 4 holiday, could be huge news for tens of thousands of owners whose houses are seriously "underwater," or where they're worth a lot less than the mortgage balance owed on them.
Under the new rules, even where borrowers have negative equities of as much as 25 percent, they may be able to refinance into better loan terms, provided their mortgage is owned or guaranteed by Fannie Mae or Freddie Mac.
Under the original rules for the program, the cutoff point was just five percent negative equity -- or a "loan to value" (LTV) ratio of 105 percent.
Though an estimated 80,000 owners already have been refinanced by Fannie and Freddie, HUD Secretary Shaun Donovan and Treasury Secretary Tim Geithner decided that the 105% LTV limit left too many borrowers out of reach.
In some parts of California, Nevada, Arizona and Florida, 40 to 50 percent of home owners are now stuck with negative equities, according to industry estimates. In Las Vegas, 67 percent of owners are underwater.
Zillow.com estimates that nationwide, 22 percent of all owners have negative equity in their properties - many of them by more than five percent.
The newly-expanded "home affordable" program opens the door not only to lower monthly payments for seriously underwater borrowers, but also to the possibility of shorter loan pay-off terms to reduce mortgage principal debts much faster.
Here's an example of how the expanded program could work:
Say your house is currently valued at $240,000, but your mortgage balance is $300,000.
You are underwater by 25 percent.
If your loan is owned or guaranteed by Fannie or Freddie, and you're not behind on your payments, you should be eligible for a "home affordable" refi.
Say your current payments are eighteen hundred sixty dollars a month. By refinancing into a new 30-year, $300,000 loan at five and a quarter percent, you could cut your principal and interest payment to about sixteen hundred sixty a month - a $200 saving.
Or you could shorten your loan term from 30 years to say, 15 years or 20 years at five and an eighth percent. If you could handle the slightly higher monthly payments, you'd accelerate your principal paydown speed, build equity and go from underwater to above water much faster, even without local market value appreciation.
To take advantage, contact your loan servicer to see if your mortgage is owned by Freddie or Fannie. Or you can check online at either fanniemae.com/loanlook, or freddiemac.com/mymortgage.
Copyright © 2009 Realty Times. All Rights Reserved.
Washington Report: Home Affordable Refinance Program by Kenneth R. Harney
The Obama administration's latest expansion of its "home affordable" refinance program, outlined just before the July 4 holiday, could be huge news for tens of thousands of owners whose houses are seriously "underwater," or where they're worth a lot less than the mortgage balance owed on them.
Under the new rules, even where borrowers have negative equities of as much as 25 percent, they may be able to refinance into better loan terms, provided their mortgage is owned or guaranteed by Fannie Mae or Freddie Mac.
Under the original rules for the program, the cutoff point was just five percent negative equity -- or a "loan to value" (LTV) ratio of 105 percent.
Though an estimated 80,000 owners already have been refinanced by Fannie and Freddie, HUD Secretary Shaun Donovan and Treasury Secretary Tim Geithner decided that the 105% LTV limit left too many borrowers out of reach.
In some parts of California, Nevada, Arizona and Florida, 40 to 50 percent of home owners are now stuck with negative equities, according to industry estimates. In Las Vegas, 67 percent of owners are underwater.
Zillow.com estimates that nationwide, 22 percent of all owners have negative equity in their properties - many of them by more than five percent.
The newly-expanded "home affordable" program opens the door not only to lower monthly payments for seriously underwater borrowers, but also to the possibility of shorter loan pay-off terms to reduce mortgage principal debts much faster.
Here's an example of how the expanded program could work:
Say your house is currently valued at $240,000, but your mortgage balance is $300,000.
You are underwater by 25 percent.
If your loan is owned or guaranteed by Fannie or Freddie, and you're not behind on your payments, you should be eligible for a "home affordable" refi.
Say your current payments are eighteen hundred sixty dollars a month. By refinancing into a new 30-year, $300,000 loan at five and a quarter percent, you could cut your principal and interest payment to about sixteen hundred sixty a month - a $200 saving.
Or you could shorten your loan term from 30 years to say, 15 years or 20 years at five and an eighth percent. If you could handle the slightly higher monthly payments, you'd accelerate your principal paydown speed, build equity and go from underwater to above water much faster, even without local market value appreciation.
To take advantage, contact your loan servicer to see if your mortgage is owned by Freddie or Fannie. Or you can check online at either fanniemae.com/loanlook, or freddiemac.com/mymortgage.
Copyright © 2009 Realty Times. All Rights Reserved.
Tuesday, July 7, 2009
Real Estate Outlook
From Realty Times of July 7, 2009
Real Estate Outlook: Gains Versus Gloom by Kenneth R. Harney
(Note Phoenix comments!)
When even the Case-Shiller index, which ranks as the gloomiest of all the measures of house price movements, starts reporting gains then you know something is stirring out there in real estate.
In its latest monthly survey, Standard & Poor's Case-Shiller index found prices up in a number of key markets: Dallas prices gained 1.7 percent, Denver 1.5 percent and other cities -- Washington DC, Seattle, San Francisco, Atlanta, Boston and Cleveland -- registered smaller increases.
Nationally, the Case-Shiller index came in slightly negative for the month overall, as did the Federal Housing Finance Agency's home purchase price index.
But even the most bearish researchers now agree: Prices are bottoming out, even in some of the hardest-hit areas.
Home sales are also up in many local markets, sometimes dramatically so. Take metropolitan Phoenix. According to the latest MDA DataQuick survey, sales in the Phoenix market grew at their fastest pace in two years during May.
Resales of detached houses were up by 56 percent over year ago levels, and condo sales were up by 30 percent.
Even prices in the Phoenix area, a market still weighed down by a high percentage of distressed sales and foreclosures, gained by 3.5 percent in May over April levels.
That's an important turnaround, but the sobering fact is that even with that gain, prices in Phoenix are still down 38 percent compared with the same period in 2008.
Other important developments this week pointing to improvements in the housing sector:
Mortgage rates continue to drop, and are now approaching the lows we saw a few months back. According to the Mortgage Bankers Association, average 30 year fixed rates hit 5.3 percent last week-the third straight weekly decline. Fifteen year fixed rates already have pushed below the 5 percent mark - and averaged just 4.8 percent last week.
Consumer sentiment, as measured by the University of Michigan's survey, was up slightly again, with more consumers indicating confidence in making “big ticket” purchases, which of course include houses.
Now none of this is to suggest that real estate is in great shape and happy days are here again.
That's not the case -- not with hundreds of thousands of workers losing their jobs every month and the national unemployment rate projected to approach 10 percent. And not with lenders continuing to impose tough credit and underwriting standards on all home purchase mortgage applications.
But after so many months of negative news, we think it's important to acknowledge the positive signs popping up on home sales, pricing and interest rates - even if we still have a long way to go to full recovery.
Copyright © 2009 Realty Times. All Rights Reserved.
Real Estate Outlook: Gains Versus Gloom by Kenneth R. Harney
(Note Phoenix comments!)
When even the Case-Shiller index, which ranks as the gloomiest of all the measures of house price movements, starts reporting gains then you know something is stirring out there in real estate.
In its latest monthly survey, Standard & Poor's Case-Shiller index found prices up in a number of key markets: Dallas prices gained 1.7 percent, Denver 1.5 percent and other cities -- Washington DC, Seattle, San Francisco, Atlanta, Boston and Cleveland -- registered smaller increases.
Nationally, the Case-Shiller index came in slightly negative for the month overall, as did the Federal Housing Finance Agency's home purchase price index.
But even the most bearish researchers now agree: Prices are bottoming out, even in some of the hardest-hit areas.
Home sales are also up in many local markets, sometimes dramatically so. Take metropolitan Phoenix. According to the latest MDA DataQuick survey, sales in the Phoenix market grew at their fastest pace in two years during May.
Resales of detached houses were up by 56 percent over year ago levels, and condo sales were up by 30 percent.
Even prices in the Phoenix area, a market still weighed down by a high percentage of distressed sales and foreclosures, gained by 3.5 percent in May over April levels.
That's an important turnaround, but the sobering fact is that even with that gain, prices in Phoenix are still down 38 percent compared with the same period in 2008.
Other important developments this week pointing to improvements in the housing sector:
Mortgage rates continue to drop, and are now approaching the lows we saw a few months back. According to the Mortgage Bankers Association, average 30 year fixed rates hit 5.3 percent last week-the third straight weekly decline. Fifteen year fixed rates already have pushed below the 5 percent mark - and averaged just 4.8 percent last week.
Consumer sentiment, as measured by the University of Michigan's survey, was up slightly again, with more consumers indicating confidence in making “big ticket” purchases, which of course include houses.
Now none of this is to suggest that real estate is in great shape and happy days are here again.
That's not the case -- not with hundreds of thousands of workers losing their jobs every month and the national unemployment rate projected to approach 10 percent. And not with lenders continuing to impose tough credit and underwriting standards on all home purchase mortgage applications.
But after so many months of negative news, we think it's important to acknowledge the positive signs popping up on home sales, pricing and interest rates - even if we still have a long way to go to full recovery.
Copyright © 2009 Realty Times. All Rights Reserved.
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