Updates from September, 2012

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  • Foreclosure Challenges Migrating to Northeastern States

    9:31 am on September 20, 2012 | Comments:0
    Tags: , ,   Filed under: Consumer news and advice, Credit, Foreclosure, Housing Market

    by The KCM Crew on September 20, 2012

    The most recent monthly Foreclosure Market Report from RealtyTracwas released last week. It confirmed what we have been stating for the last several months – foreclosures are increasing in states with a judicial process (especially in the Northeast) while at the same time are decreasing in non-judicial states. As stated in the report:

    “Foreclosure activity in the 24 non-judicial states (such as Arizona, California, Nevada and Georgia) and District of Columbia combined decreased 31 percent annually. Twenty states registered year-over-year increases in foreclosure activity, led by judicial foreclosure states such as New Jersey, New York, Maryland, Illinois and Pennsylvania.”

    (More …)

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  • Short Sales Surging

    1:12 pm on August 2, 2012 | Comments:0
    Tags: , ,   Filed under: Agent information, Consumer news and advice, economy, Foreclosure, mortgage, Seller Info, Short Sale, Short sales, Statistics, The Housing Market

    by The KCM Crew on August 2, 2012

    The Office of the Comptroller of the Currency released their First Quarter 2012 Mortgage Metrics Report recently. In the report, they covered the success the banking industry is having in each of several categories regarding the current housing crisis. They found:

    Loan modifications 

    These are “actions that contractually change the terms of mortgages with respect to interest rates, maturity, principal, or other terms of the loan.”

    Down 36.7% from last year.

    Completed foreclosures 

    Where “ownership of properties transferred to servicers or investors. The ultimate result is the loss of borrowers’ homes because of nonpayment.”

    Up 2.7% from last year.

    Newly initiated foreclosures 

    “Mortgages for which the servicers initiate formal foreclosure proceedings during the month. Many newly initiated foreclosures do not result in the loss of borrowers’ homes because servicers simultaneously pursue other loss mitigation actions, and borrowers may act to return their mortgages to current and performing status.”

    Down 8.1% from last year.

    Short sales 

    “Sales of the mortgaged properties at prices that net less than the total amount due on the mortgages. Servicers and borrowers negotiate repayment programs, forbearance, or forgiveness for any remaining deficiency on the debt. Short sales typically have a less adverse impact than foreclosures on borrowers’ credit records.”

    Up 19.7% from last year.

    The only category up significantly is short sales. And the rate of increase in short sales is accelerating.


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  • Real Estate Marketing Analysis: Largest Spring Home Pricing Increase in 25 Years

    1:23 pm on August 1, 2012 | Comments:0
    Tags: , , REO,   Filed under: Agent information, Charts, Consumer news and advice, economy, Foreclosure, Home owner information, Housing Market, Real Estate Trends, Statistics, Supply and Demand, The Housing Market

    by CoreLogic Research Posted Wed, 2012-07-25 09:49

    The MarketPulse Report for July is available for free download. There are several significant findings in the report.

    • Home prices are up in many markets as high negative equity shares keep many sellers off the market and demand for distressed properties remains high.
    • The lower end of the home price tier is rebounding at more than three times the rate of the upper end driven by distressed sales.
    • The Home Price Index (HPI), including distressed sales, posted the largest year-over-year spring price gain in the last 25 years.
    • Estimates show that refinancing accounted for 70 percent of the total mortgage originations market over the past 12 months.

    To find out more about these surprising findings, you can download the report here .



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  • Obama Administration Releases June Housing Scorecard

    9:02 am on July 12, 2012 | Comments:0
    Tags: , , , , ,   Filed under: Buyer Info, Consumer news and advice, Federal Goverment, Foreclosure, Housing Market, Seller Info

    Posted By susanne On July 10, 2012

    The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury recently released the June edition of the Obama Administration’s Housing Scorecard – a comprehensive report on the nation’s housing market. Data in the June Housing Scorecard show some promising signs of stability, though the overall outlook remains mixed. Home equity rose $457.1 billion in the first quarter of 2012, a 7.4 percent increase from the previous quarter and its highest level since the second quarter of 2010. Sales of previously owned homes posted sharp gains in May of 9.6 percent compared with a year ago and new home sales in May recorded their highest level in more than 2 years. However, foreclosure starts and completions turned up in May, underscoring continued fragility in the housing market. The full report is available online at http://www.hud.gov/scorecard [2]. (More …)

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  • Mortgage Forgiveness Debt Relief Act: Will It Be Extended?

    9:23 am on May 17, 2012 | Comments:0
    Tags: , debt relief, , ,   Filed under: Consumer news and advice, Federal Goverment, FHA, Finance, Foreclosure, Home owner information, Income Tax, mortgage, Tax, Tax credit

    by The KCM Crew on May 16, 2012

    Many of our readers have asked whether or not we believe the Mortgage Forgiveness Debt Relief Act of 2007will be extended past its current expiration scheduled for the end of the year. As a reminder, the legislation ensures that homeowners who received principal reductions or other forms of debt forgiveness on their primary residences do not have to pay taxes on the amount forgiven.

    The reason this act is important in today’s housing market is that, without the act, debt is reduced through mortgage modifications or short sales qualifies as income to the borrower and is taxable. If the legislation is not extended, then it would require homeowners to complete a short sale or modification prior to year’s end in order to avoid a tax consequence.

    (More …)

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  • New Foreclosures Slow in Foreclosure Hot Spots

    3:31 pm on March 29, 2012 | Comments:0
    Tags: bank owned, , , ,   Filed under: Agent information, Buyer Info, Consumer news and advice, Foreclosure, National Association of Realtors, Seller Info, Short Sale, The Economy

    Markets that experienced the biggest boom in foreclosures in 2009 and 2010 today are experiencing a decline in new foreclosures.

    New data from the National Association of REALTORS®’ Local Market reports shows that the national foreclosure rate eased from 2.8 percent in June of 2011 to 2.7 percent by December, with 113 of the 163 markets surveyed experiencing a decline in their foreclosure rate over this period.

    While the improvement was widespread, the largest aggregate declines occurred in markets where the rate had ballooned in 2009 and 2010. Markets in Florida and Nevada dominated the top 10 in declines, but Seattle and Spokane, Wash., also made the top 10 despite having a small overall foreclosure rate, (More …)

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  • National Mortgage Settlement: What You Need To Know

    10:58 am on February 16, 2012 | Comments:0
    Tags: , , , ,   Filed under: Agent information, Buyer Info, Consumer news and advice, Foreclosure, Housing Market, mortgage, Seller Info

    by The KCM Crew on February 13, 2012

    Last week, the Federal government and 49 state governments (Oklahoma being the exception) agreed to a $25 billion settlement regarding robo-signing and the challenges it created in the foreclosure process. We want to give a synopsis of the settlement and some perspective on what effect it will have on the housing market in 2012.

    The Basics

    The $25 billion in funds will be dispersed as follows:

    $17 Billion National Commitment to Foreclosure Relief Efforts
    The servicers collectively agree to commit a minimum of $17 billion directly to borrowers through foreclosure relief effort options, including principal reduction for qualifying borrowers, short sales, anti-blight measures, and enhanced homeowner transition programs.

    $3 Billion National Commitment to Underwater Mortgage Refinancing Program
    The servicers collectively agree to commit $3 billion to refinance “underwater” homes (when a homeowner owes more on a mortgage than a home’s current market value). To qualify, borrowers must be current on their mortgage payments on a mortgage owned by one of the five banks.

    $5 Billion Payment to States and Federal Government
    The servicers’ $4.25 billion payment to the states includes $1.5 billion for payments to borrowers who lost their home to foreclosure by one of the five servicers…$750 million of the state-federal payment will go to the federal government to resolve federal claims.

    For further details on the settlement you can go to the official website.

    Will the Settlement Have a Major Impact on a Housing Recovery?

    Probably not. Though it is a step in the right direction, it may be too little too late. Here are some opinions on the settlement:

    IHS Global Insights

     “Like many previous plans to stem foreclosures, this agreement will help at the edges. The problem is too big for it to have a large impact, however…This agreement will help the housing market move ahead in 2012 in a small way. But it is hardly a game changer.”


    “While there is no doubt some benefit to formalizing and organizing the process of foreclosure and better monitoring of the process, the fact is that the settlement changes little.”

    Capital Economics

     “While it is good that the settlement has been finalized and will offer principal reductions and refinancing schemes to borrowers, the bigger picture is that the settlement is not large enough to dramatically alter the outlook for the housing market or the wider economy.”

    What about Foreclosures Moving Forward?

    The settlement did bring clarity to one major issue – foreclosures. Banks have been holding off the foreclosure process on millions of homes over the last 18 months as they waited for the particulars of the settlement. They now know how they can move forward without penalty. The result will be an increase in foreclosures coming to the housing market.

    Housing Wire

    “It will speed up processing, and perhaps mean that foreclosures that have been waiting around since robo-signing came to light in 2010 will now gain legitimacy.”

    Calculated Risk

    “It does appear the number of completed foreclosures will increase following this settlement – especially in some judicial states with large backlogs – so there will probably be more REOs (lender Real Estate Owned) for sale.”

    Bloomberg News

    “The $25 billion settlement with banks over foreclosure abuses may result in a wave of home seizures…Lenders slowed the pace of foreclosures as they negotiated with attorneys general in all 50 states for more than a year over allegations of faulty and fraudulent paperwork used to repossess homes. With yesterday’s agreement, banks are likely to resume property seizures.”

    Wells Fargo

    “Mark Vitner, a senior economist at Wells Fargo Securities, said the settlement helps the housing market in the long run because it allows banks to proceed with millions of foreclosures that have been stalled. Many lenders have refrained from foreclosing on homes as they awaited the settlement.”


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  • Do Appraisers Use Distressed Properties as Comparables?

    5:14 pm on February 8, 2012 | Comments:0
    Tags: , , , , , , ,   Filed under: Agent information, Buyer Info, Consumer news and advice, Foreclosure, Home owner information, pricing, Property Appraisal, Seller Info, Short Sale, Short sales


    Many of our readers ask us if appraisers use distressed properties (short sales and foreclosures) as comparables when doing an appraisal on non-distressed properties. We have posted on this issue on several occasions (examples: here and here). Last month, the Appraisal Institute issued a paper on the subject. In the paper, the Institute explained that:

    “Foreclosures and short sales can provide important information for appraisers, who develop valuations based on market data and market forces.”

    On whether an appraiser should use distressed properties as comparables, the Institute was very direct (all items in bold were shown as bold in the original paper):

    “An appraiser should not ignore foreclosure sales and short sales if consideration of such sales is necessary to develop a credible value opinion.”
    And they explained the possible differences between short sales and foreclosures:

    “A short sale … might have involved atypical seller motivations and so might not be an ideal comp…

    A sale of a bank-owned property might have involved typical motivations, so the fact that it was a foreclosed property would not render it ineligible as a comp.”

    Bottom Line

    Some will argue that distressed properties should not be used when appraising non-distressed properties. However, there is no longer any doubt that they will be.


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  • You May Owe Federal Income Taxes in 2013 if you have a Short Sale, Foreclosure

    12:13 pm on January 12, 2012 | Comments:0
      Filed under: Foreclosure, Short sales, Tax

    In Tuesday’s Sarasota Sales Meeting & Caravan, Branch Manager Darla Furst mentioned the following article about Short Sales and Foreclosure Tax Implications for 2012 and beyond. It’s a very good article to read and study.  With any financial transaction like this, there are pros and cons – and it’s important to consult all of the right experts such as a tax accountant and/or attorney.  Rushing into a decision to short sell or foreclose shouldn’t be done based on articles like these, but instead on sound advice from the right experts.

    WASHINGTON – Jan. 9, 2012 – You may owe federal income taxes in 2013 if you have a short sale, foreclosure after this year. Now is the time to make the hard decision: Are you going to walk away from your underwater home?

    Uncle Sam is still giving homeowners until Dec. 31, 2012, to go through a short sale or foreclosure without tax consequences – as long as the lender officially releases the debt.

    But on Jan. 1, 2013, the rules change: The amount a lender forgives, ether in a short sale or foreclosure, on a primary residence will be taxable on federal income taxes.

    So if a house sold $50,000 short of what is owed on the mortgage, then the selling homeowners will owe federal income taxes on that $50,000. Homeowners would owe $12,500 if they’re in the 25 percent bracket; $7,500 if in the 15 percent tax section.

    Homeowners would be on the hook even if the house sold but the bank had not formally forgiven the loan in a letter: The banks must officially sign off in writing before Dec. 31. (More …)

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  • Underwater Refinance Program Expanded

    2:07 pm on October 27, 2011 | Comments:0
    Tags: , , , , , , , Refinancing   Filed under: Consumer news and advice, Federal Goverment, FHA, Foreclosure, Home owner information, mortgage

    by Dean Hartman on October 27, 2011

    At a campaign stop in Nevada on Monday, President Obama announced an expansion of the HARP (Home Affordable Refinance Program) which would eliminate the current maximum LTV of 125%. The initiative is being looked at as a way to reward those homeowners who have been good payers of their mortgages but, because of declining home values, they could not take advantage of today’s lower interest rates.

    While the actual details on the program will not be released until next month, here’s the buzz:


    • It will only pertain to loans currently being serviced by Fannie Mae or Freddie Mac
    • Because of the removal of the LTV cap, appraisals may not be required
    • With the only qualifying criteria announced being that the last six payments be on time, it is possible that income documentation may be streamlined and credit scores might be more forgiving
    • Fees allegedly will be reduced
    • Incentives may be offered to people who shorten their repayment time
    • It also sounds that the banks may be given some incentive by not holding them liable for the underwater portion of the new loan (a major incentive for sure).

    The government is on the hook for these loans already. By lowering the payments (by offering lower rates), they will likely help these loans to continue to perform and make it less likely for the underwater homeowner to walk away.

    The original HARP was expected to help 5 million families.  After two years, it has yet to reach 900,000; therefore, estimates ranging from 800,000 to 1.6 million borrowers who may benefit need to be taken with a grain of salt.

    Whether the Administration is looking for purely political rhetoric points or not, my advice to underwater homeowners is too keep an eye out for the final guidelines because you just might be able to lower your payments.

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