Sun Publications
May 9 & 12, 2012 Download PDF Document

Boca Beacon
May 11, 2012 Download PDF Document

Longboat Observer
May 10, 2012 Download PDF Document

Sarasota County Observer
May 10, 2012 Download PDF Document

East County Observer
May 10, 2012 Download PDF Document

Sarasota Herald Tribune
May 6, 2012 Download PDF Document

Bradenton Herald
May 5, 2012 Download PDF Document

Boca Beacon
May 4, 2012 Download PDF Document

Longboat Observer
May 3, 2012 Download PDF Document

Sarasota County Observer
May 3, 2012 Download PDF Document

East County Observer
May 3, 2012 Download PDF Document

We believe that short sales will be a major part of the real estate market in 2012. That is why we have dedicated this entire week to posts exclusively on this subject. We hope that by the end of the week you have a better handle on the need for short sales and a better understanding of the process. – the KCM Crew

It seems that the banks have finally realized that a short sale is a better option than foreclosure for them, the homeowner and the neighborhood. It is for this reason we believe that 2012 will come to be known as the year of the short sale. CNN Money reported on this exact point:

“We believe 2012 could be a record year for short sales,” said Daren Blomquist, vice president at RealtyTrac.

Banks are showing signs of being more open and willing to approve the deals — even if it means accepting less money. The average sales price for a short sale was $174,120 in January, down 4% from December and 10% year-over-year.

Market Watch also addressed the short sale situation recently:

Fitch expects the increase in short sales to continue because of the potential benefits afforded to both lenders and borrowers. Some borrowers may prefer short sales because, though they cannot stay in the property, they often walk away with cash incentives from lenders and healthier credit reports unmarred by foreclosure. For lenders, short sales provide a more efficient and cheaper alternative to the increasingly lengthy and costly foreclosure process.

Why Are the Banks Now Leaning Towards Short Sales?

The simple answer is that the banks lose less money when doing a short sale. The CNN Money article mentioned above explains:

Typically, banks get about 20% less for a foreclosed home. Foreclosure can also take years to unload, during which expenses, like property taxes, insurance and other expenses, mount up.

The Market Watch report breaks it down further:

Short sales…are currently getting completed 20 months after the last payment made on the loan, approximately 10 months less than the average time to foreclose. Shorter timelines reduce lenders’ carrying costs (i.e. accrued loan interest and property taxes, insurance, and maintenance) and eliminate most of the legal expenses associated with foreclosure and liquidation. As a result, loss severities tend to be considerably lower. Historically, for loans with similar attributes, short sales have severities 10%-15% less than REO sales. As the proportion of short sales increases, we expect average loss severities to improve further.

How Many Short Sales Could Be Completed?

JPMorgan has projected that over 500,000 short sales will be done this year. Also, NECN.com recently reported:

RealtyTrac estimates that if the January numbers it found hold up, there would be about 105,000 “pre-foreclosure” sales of homes, most of them short sales, during the first quarter of this year, and at that rate something like 400,000 for the year.

How Long Will Short Sales Be a Major Part of the Market?

The NECN article shows us that short sales are here to stay for some time.

According to the Mortgage Bankers Association, there are nearly 3.5 million homeowners delinquent on their mortgages by at least one month, including 1.5 million who are 90 days or more behind on paying their mortgage. And there are 12.5 million homeowners still who are “underwater,” owing more on their mortgage than their home is worth. That suggests that at the current rates, barring some spectacular economic recovery, it would take years, even decades, for short sales alone to clean up the mortgage mess that remains.

Short sales are here to stay. We must accept this fact and work hard to learn the process and apply it where it makes sense.

 

Freddie Mac (OTC: FMCC) released the results of its first quarter refinance analysis showing homeowners who refinance continue to strengthen their fiscal house.

In the first quarter of 2012, 79 percent of homeowners who refinanced their first-lien home mortgage either maintained about the same loan amount or lowered their principal balance by paying-in additional money at the closing table. Of these borrowers, 58 percent maintained about the same loan amount, and 21 percent of refinancing homeowners reduced their principal balance; the share of borrowers that kept about the same loan amount was the highest in the 26-year history of the analysis.

“Cash-out” borrowers, those that increased their loan balance by at least five percent, represented 21 percent of all refinance loans; the weighted average cash-out share during the 1985 to 2008 period was 50 percent.

The median interest rate reduction for a 30-year fixed-rate mortgage was about 1.5 percentage points, or a savings of about 27 percent in interest rate, the largest percent reduction recorded in the 27 years of analysis. Over the first year of the refinance loan life, the median borrower will save about $2,900 in interest payments on a $200,000 loan.

The net dollars of home equity converted to cash as part of a refinance, adjusted for inflation, was at the lowest level in nearly 17 years (since the third quarter of 1995). In the first quarter, an estimated $5.3 billion in net home equity was cashed out during the refinance of conventional prime-credit home mortgages, down from $7.0 billion in the fourth quarter and substantially less than during the peak cash-out refinance volume of $83.7 billion during the second quarter of 2006.

Among the refinanced loans in Freddie Mac’s analysis, the median prior loan life was 4.3 years. One-half of the loans that were paid-off had been in place from between three and seven years, that is, had been originated between 2005 and 2009.

“The typical borrower who refinanced reduced their interest rate by about 1.5 percentage points,” says Frank Nothaft, Freddie Mac vice president and chief economist. “On a $200,000 loan, that translates into saving about $2,900 in interest during the next 12 months. Fixed-rate mortgage rates hit new lows during March, with 30-year product averaging 3.95 percent and 15-year averaging 3.20 percent that month, according to our Primary Mortgage Market Survey®.

“The enhancements to HARP announced in October, such as removing the maximum loan-to-value limit, are beginning to show up in additional refinance volume during the first quarter. HARP loans were 20 percent of Freddie Mac’s refinance fundings during the first quarter, the highest share since HARP’s inception.”

For more information, visit http://www.freddiemac.com

Get a head start on sprucing up your lawn and garden for the season with this helpful guide.

Garden

Avoid digging too early. Soil should be damp but not sticky. Grab a handful. Is it moist enough to clump together, but dry enough to crumble apart as you open your hand? If so, then your soil is ready.

Beds
In planting beds, remove perennial stems that were left through winter to protect plant crowns and offer forage for birds. Don’t pull stems; instead, clip them at ground level. Allow bulb foliage to ripen and die naturally. Gently remove winter mulch and leaves that have accumulated on planting beds. Remove winter mulch on a cloudy day so that the spring sun doesn’t burn plants that have already emerged.

Fertilizer
Before a rain, sprinkle slow-release organic fertilizer around bulbs, perennials and roses, scratching it lightly into the soil. Add a fresh 2- to 4-inch-thick layer of organic mulch, such as compost or composted manure.

Planting
Germinate flower and vegetable seeds indoors, making sure seedlings receive 16 hours of light per day. Dig and divide summer- and fall-flowering perennials. Plant cool-season vegetables, broccoli, potatoes, onions, greens and lettuces as soon as you can work the ground.

Lawn

Weeds
In early spring before forsythia finishes blooming, apply a pre-emergent herbicide to turf to control crabgrass. Tackle dandelions and other broadleaf weeds by digging or spraying.

Repair
Overseed bare spots in cool-season lawns; however, wait until late spring or early summer to patch warm-season turf. Do not use pre-emergent herbicides if you plan to overseed.

Mower
Start mowing cool-season grasses when they show green. Raise the mower blade after the first spring cut, and never remove more than one-third of the grass-blade length.

Outdoor Living Areas

Deck
Remove dirt and mildew stains from your deck using a specially formulated deck-cleaning solution. If the deck is new construction, be sure to purchase a new wood treatment instead of a deck cleaner. Follow this step with a power wash. Choose a nozzle with a vertical slit to avoid scarring the wood. Don’t use bleach, which eats away at the wood. Follow with a high-quality deck stain.

Grill
Double-check the gas connection on your grill. Mix a solution of warm water with a small amount of dish soap, brush some on the connection, turn on the gas and watch. Bubbles signal a leak, which means you should replace your connector.

Use a wire brush and degreaser on the grill to remove baked-on grease on the cooking grate and grill pan. Heating them first can make grease easier to remove. Use a piece of wire to ensure burners and holes are clear.

This article is excerpted from Lowe’s Creative Ideas magazine. For more information, visit http://www.lowes.com

Every day there seems to be more positive news about the real estate recovery. We attempt to give you two things in this blog:

1. The actual data that indicates where the housing market is headed

2. Quotes from analysts who have scrutinized this data

Today, we want to give you a quote by Ivy Zelman which appeared last week in a Wall Street Journal article Stunned Home Buyers Find the Bidding Wars Are Back.

“We very much believe we’ve hit bottom.”

Why is the quote from Zelman important? She is an industry expert consistently recognized by Institutional Investor, Greenwich Associates, StarMine and The Wall Street Journal as an industry-leading analyst. She has been nicknamed ‘Poison Ivy’ for her harsh positions on housing over the last several years. Now, Zelman is calling a bottom and projecting prices to moderately increase in the next twelve months.

Again, another expert on housing is calling a bottom; another bear turns bull.

 http://www.kcmblog.com/2012/05/01/yet-another-housing-bear-turns-bull/

(MCT)—The short sale process could get a lot quicker starting this summer under new rules that will require lenders to respond to offers within a month.

Fannie Mae and Freddie Mac, the nation’s two largest mortgage backers, will implement the guidelines on June 15. The changes require mortgage servicers to make a decision within 30 days of receiving a short sale offer. They also must consider requests for pre-approved short sales within that same timeframe.

If the lender needs more than 30 days, it must give borrowers weekly status updates and a decision within 60 days of the initial application. This extension gives lenders more time to determine the value of the property or to get the approval of a mortgage insurer.

The moves are aimed at streamlining the short sale process, which often takes months to complete.

Such transactions can get so complicated that many prospective buyers won’t even consider making an offer on a short-sale property. And many of those who bid often walk away from the offer because lenders take so long to make a decision.

“Short sales are more complex than routine home sales since they may involve multiple parties and long-distance negotiating,” says Tracy Mooney, a Freddie Mac senior vice president. The new rules “are intended to help make the decision process more transparent and timely.”

Short sales involve homes that are sold at a price that’s lower than the balance owed.

There are many reasons why such deals are a better alternative to foreclosure, including fewer fees and faster transfer of ownership, eliminating all the problems that arise when a house is left vacant after foreclosure.

Because the lender and investors are being asked to take a loss, the process can get lengthy. All parties with a financial interest negotiate who will take what share of the sale proceeds.

So far, efforts to make that process easier have largely been unsuccessful, but the need has never been more critical.

Chris Willette, a short-sale expert in Edina, Minn., says that such rules are a critical step toward a housing recovery.

“We’re going to get rid of the inventory a lot more quickly,” he says. “And once you do that, you get your pricing back.”

But Willette remains skeptical. His primary concern is that the paperwork problems that currently plague the short sale process will only continue. He said getting all the forms together to complete such a transaction can be a major challenge.

Brad German, a Freddie Mac spokesperson in Virginia, says the organization will provide consistent reviews of lenders and will rank them monthly based on that performance. Those rankings are used to determine their compensation or penalties. Fannie and Freddie will continue to work on other avenues for enforcement.

©2012 the Star Tribune (Minneapolis)
Distributed by MCT Information Services

Despite economic growth of 3.0 percent annualized for the fourth quarter of 2011, incoming data suggest that economic growth slowed during the first quarter of 2012. In line with previous forecasts, Fannie Mae’s (FNMA/OTC) Economic & Strategic Research Group expects growth to slow to slightly more than 2 percent in the first quarter of the year.

The slowdown in economic growth is not indicative of a significant deterioration in the underlying strength of economic activity, but a fading inventory boost to GDP growth. For all of 2012, the Group expects growth to be modest at 2.3 percent as a number of factors combine to constrain activity, including slow real disposable income growth, which should restrain household spending activity; a very small contribution from net exports; and continued fiscal contraction by the federal government, as well as ongoing cutbacks by state and local governments acting as a drag on growth during the year.

“Consumer spending continued its upward trajectory with strong spending on autos and other durable goods, and spending on services showing the largest gain in nearly two years,” says Fannie Mae Chief Economist Doug Duncan. “However, the pickup in consumer spending has outpaced income growth, which means that consumers are increasing their spending by borrowing from their savings. Real disposable income has been flat and that needs to change for a higher pace of economic activity to occur.”

Through the fourth quarter of 2011, residential investment contributed to overall economic growth for the third consecutive quarter, the first time that has occurred since 2005. Recent housing data also indicate some loss of momentum in the first quarter, underscoring the uneven nature of the current housing recovery. However, confidence among consumers improved in March. The Fannie Mae March National Housing Survey shows that 33 percent of Americans expect home prices to increase over the next 12 months, up from 28 percent in February. On the downside, the Group notes a long-term risk to housing concerning federal student loan debt, which has increased dramatically over recent years and may cause a delay in students’ entering the first-time homebuyer market in the future.

On the employment front, the March employment report showed weakening momentum, as the economy created just 120,000 jobs – less than half of the average monthly gain over the prior three months and the smallest gain in five months. However, the setback in the employment report should not necessarily be interpreted too negatively. Other job-related data continue to show signs of improvement with initial jobless claims hovering near a new low of the recovery at the end of March. Despite the unemployment rate dropping to 8.2 percent, the lowest rate in more than three years, it is not indicative of improving labor market conditions, as the rate was driven by a substantial decline in the labor force. The Group expects the unemployment rate to trend down to about 7.5 percent by the end of 2013, with a monthly average gain of approximately 190,000 jobs during 2012 and slightly stronger gains during 2013.

For more information, visit http://www.fanniemae.com

With good preparation, most things are easier. That works in mortgages too! Today, I want to give you some ideas that can make your mortgage experience less painful.

Income Items:

- Gather your documents. Today, many people will have to produce 2 years’ complete tax returns, including W2′s, 1099′s, K1′s, and all the schedules, as well as a month’s worth of pay stubs.

- Be prepared to explain them. Deductions in your returns and your pay stubs may impact the income your lender will use to qualify you which, in turn, has a big impact on the loan you will get.

- Have a breakdown of base pay versus overtime for both your pay stubs and 2 years’ W2′s. Lenders treat overtime (and bonus income) differently than your base pay. Be prepared to explain any changes over the last few years because your loan officer will ask you about it.

Asset Items:

- Start accumulating your bank statements. Lenders look back 3 months from when you sign your contract of sale.

- You will have to explain any and all large deposits (which are defined as deposits greater than your regular pay check) because lenders want to make sure you haven’t taken out any new loans that aren’t on your credit report.

- Avoid any significant cash deposits. However, if you did have a cash deposit, understand that the lender will have you source it (a bill of sale and DMV receipt for that motorcycle, for example).

- If you will be receiving a gift, consult your loan officer on how to document it (from the donor’s ability to how you deposit it).

Credit Items:

- Ask your loan officer to run your credit and go over it with them. Believe it or not, most credit reports contain errors. Best to identify them and get working on correcting them as early as possible.

- Do what you can to pay down your balances to under 30% of available credit to help you get the best score possible.

- Do NOT close accounts or pay off collection accounts without discussing it with your loan officer. Either one of these logical moves can actually have a negative impact on your score.

When buying a home, remember the Boy Scout motto, “Be prepared”. Following these suggestions will make your loan approval easier and less stressful.

http://www.kcmblog.com/2012/04/26/proper-planning-for-your-mortgage-application/

by The KCM Crew on April 23, 2012

It didn’t take long for the naysayers in real estate to jump all over the National Association of Realtors’ Existing Sales Report which was released last week. It is true that sales were down 2.6% from the previous month. However, monthly variations should not be the determining factor in deciding where the market is going. For example, in the same report, NAR explained that sales WERE UP 5.2%over last March’s numbers.

The experts should look at the key underlying data that truly determines where the market will be heading. Here is what leading economists in the housing industry are saying:

Paul Diggle, property economist, Capital Economics

“March’s decline in existing home sales probably reflects the normal month by month volatility rather than renewed underlying weakness. The increase in households’ confidence in the outlook for the housing market, coupled with a gradual improvement in the pace of the economic recovery, should drive a rise in home sales later this year….It is possible that the pattern within the quarter has been driven by the weather, with falls in the most recent two months reflecting a degree of payback after January’s gain.” 

Doug Duncan, chief economist, Fannie Mae

“Conditions are coming together to encourage people to want to buy homes. Americans’ rental price expectations for the next year continue to rise, reaching their record high level for our survey this month. With an increasing share of consumers expecting higher mortgage rates and home prices over the next 12 months, some may feel that renting is becoming more costly and that homeownership is a more compelling housing choice.”

Celia Chen, senior director of housing economics, Moody’s

“The residential property market is recovering, as the factors underlying demand and supply strengthen. Even after accounting for unusual seasonal patterns brought on by the unusually warm winter, conditions have not been this strong since the government ended homebuyer tax credits in 2010.”

Mark Vitner, senior economist, Wells Fargo

“Existing home sales dropped 2.6 percent, but are up 5.2 percent from a year ago. While existing sales are down for the second consecutive month, we are likely continuing to see payback from increases earlier this year. That said, we could see one more month of disappointing data, but we still contend the recent declines are not indicative of the trend. Stabilization will become more apparent once we return to normal weather.”

Mark Fleming, chief economist, CoreLogic

“Since the peak in home prices, mortgages rates have declined and affordability has risen dramatically. Housing affordability is at levels not seen since prior to the early 1990s …While real estate professionals often say that “now is a good time to buy,” it is clear today that April 2006 was probably not a good time to buy, while now may well be the time.”

http://www.kcmblog.com/2012/04/23/everybody-calm-down-the-market-is-recovering/

Sun Publications
April 25 & 28, 2012 Download PDF Document

Boca Beacon
April 27, 2012 Download PDF Document

Longboat Observer
April 26, 2012 Download PDF Document

Sarasota County Observer
April 26, 2012 Download PDF Document

East County Observer
April 26, 2012 Download PDF Document

Sarasota Herald Tribune
April 22, 2012 Download PDF Document

Sarasota Herald Tribune
April 22, 2012 Download PDF Document

Bradenton Herald
April 21, 2012 Download PDF Document

Boca Beacon
April 20, 2012 Download PDF Document

Longboat Observer
April 19, 2012 Download PDF Document

Sarasota County Observer
April 19, 2012 Download PDF Document

East County Observer
April 19, 2012 Download PDF Document

Sarasota Herald Tribune
April 15, 2012 Download PDF Document

Sun Publications
April 11 & 14, 2012 Download PDF Document

Boca Beacon
April 13, 2012 Download PDF Document

Longboat Observer
April 12, 2012 Download PDF Document

Sarasota County Observer
April 12, 2012 Download PDF Document

East County Observer
April 12, 2012 Download PDF Document

Sarasota Herald Tribune
April 8, 2012 Download PDF Document

Bradenton Herald
April 7, 2012 Download PDF Document

Boca Beacon
April 6, 2012 Download PDF Document

Longboat Observer
April 5, 2012 Download PDF Document

Sarasota County Observer
April 5, 2012 Download PDF Document

East County Observer
April 5, 2012 Download PDF Document

Sarasota Herald Tribune
April 1, 2012 Download PDF Document