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  • Foreclosure Challenges Migrating to Northeastern States

    9:31 am on September 20, 2012 | Comments:0
    Tags: , foreclosure,   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: foreclosure, ,   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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  • Obama Administration Releases June Housing Scorecard

    9:02 am on July 12, 2012 | Comments:0
    Tags: , , foreclosure, , ,   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 [2]. (More …)

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  • New Foreclosures Slow in Foreclosure Hot Spots

    3:31 pm on March 29, 2012 | Comments:0
    Tags: bank owned, , foreclosure, ,   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: , , , foreclosure,   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: , , , foreclosure, , , ,   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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  • What Happened to Modifications?

    9:45 am on September 22, 2011 | Comments:0
    Tags: , foreclosure, mortgage modification,   Filed under: Federal Goverment, FHA, Foreclosure, mortgage, Seller Info

    by The KCM Crew on September 21, 2011

    Monday’s blog post generated many questions as to whether modifications would have a major impact on preventing an increase in future foreclosures. Though modifications are still being done, the onus by the government and the banks has currently shifted to two other initiatives to help the housing recovery:

    1. Preventing future delinquencies (people falling behind on their payments)

    2. Clearing the backlog of foreclosures already owned by the banks (REOs). 

    As proof of this, we just need to look at the speech by Edward J. DeMarco, the Acting Director of the Federal Housing Finance Agency (FHFA), to the American Mortgage Conference.

    The text of the speech was released earlier this week . Mr. DeMarco explains:

    “At the end of the Bush Administration and in the early days of the Obama Administration, attention focused on loan modifications as a way of stabilizing troubled borrowers’ monthly payments and aiding them in avoiding foreclosure. These efforts resulted in the Home Affordable Modification Program, or HAMP. For much of 2009, the key priority was developing and then implementing HAMP; in late 2009 and into 2010, the challenge became making HAMP more operationally effective and converting borrowers from trial modifications to permanent modifications.”

    DeMarco then talks about what initiatives the agency is now concentrating on:

    “Current priorities are focused on issues at the two ends of the foreclosure process – at one end, we are enhancing efforts to keep current borrowers from going delinquent in the first place and at the other end, we are now focusing on the challenges of disposing of the real estate owned that is left after a foreclosure.” 

    Preventing New Delinquencies 

    Trying to prevent more American families from falling delinquent on their mortgage payments is a great first step to a recovery in the housing sector. DeMarco claims:

    “FHFA is carefully reviewing the mechanics of the Home Affordable Refinance Program (HARP) program to identify possible enhancements that would reduce barriers for borrowers already otherwise eligible to refinance using HARP. If there are frictions associated with the origination of HARP loans that can be eased while still achieving the program’s intent of assisting borrowers …we will seek to do so.”

    Clearing Existing Foreclosures

    We must also clear the inventories of foreclosures currently held by the banks. This is seen by FHFA as a crucial component to any plan to help the real estate market recover.

    “The second area I would like to briefly discuss is the disposition of Real Estate Owned or REO. In August, FHFA, Treasury, and HUD issued a Request for Information (RFI) on ways to dispose of REO properties. While the Enterprises have considered various approaches to disposing of REO over time, the RFI represents an opportunity to consider new approaches, including possible approaches that include both the Enterprises and the Federal Housing Administration (FHA). By taking this collaborative approach, the three agencies seek ways to improve returns to taxpayers and bring greater stability to local housing markets. We have received nearly 4,000 submissions in response to the RFI. We are encouraged by the strong response and interest in this effort. Obviously it will take a little time to review so many responses but we are already hard at work doing so.

    To be clear, this effort is not intended to develop a single, national program for REO disposition. Rather, we are most interested in proposals tailored to the needs and economic conditions of local communities.” 

    Bottom Line

    To help the market, the two major initiatives FHFA is pursuing are preventing new delinquencies and selling off the backlog of foreclosures that currently exists. Modifications, at best, now appear to be on the back burner.

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  • Industry Opinions Weigh In on Extended Forecast for Short Sales

    10:51 am on August 18, 2011 | Comments:0
    Tags: , foreclosure, , ,   Filed under: Buyer Info, Consumer news and advice, Credit, economy, Foreclosure, mortgage, Short Sale, The Housing Market

    Short sales will remain strong for the next several years as foreclosure inventories timelines grow even longer, according to the chief operating officer of Equator, a software platform for default servicers.

    “Short sales will be very prominent over the next 2-3 years as foreclosure inventories increase and remain somewhat stagnant. The elongated foreclosure timelines coupled with improved processes and technology will lead to more short sales closing,” says John Vella, COO of Equator.

    Equator reports some 775,000 real estate agents handling an average of 250,000 transactions per day access its platform.

    Last week LPS reported the median foreclosure timeline now is 587 days. In May, CoreLogic predicted the number of short sales will increase 25 percent next year after tripling over the past two years.

    New federal regulations that took effect April 10 are expected to add to the interest in short sales by removing barriers involving second liens. Prior to this change, secondary lien holders were unlikely to receive any portion of the proceeds of the sale. This likelihood was increased if the property was in a state of negative equity. The secondary lien holder could block the approval of the short sale by refusing signoff on zero pay-off.

    Due to the change in the laws regulating short sales there are now incentives for secondary lien holders to approve the sales. There is also an incentive for the seller to pursue this option. Secondary lien holders will receive a portion of the sale proceeds; an amount of at least $3,000. They will also receive an additional $1,000 from the federal government and sellers will receive an incentive of $3,000 for relocation expenses.

    For more information visit

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  • Foreclosures Fall across America

    8:30 am on August 3, 2011 | Comments:0
    Tags: , foreclosure, , ,   Filed under: Buyer Info, Consumer news and advice, Foreclosure, mortgage, Seller Info, Statistics

    By Steve Cook

    RISMEDIA, August 1, 2011—Foreclosure activity decreased in 85 percent of the nation’s metropolitan areas in the first half of the year and all top 10 metro areas with the highest foreclosure rates posted decreasing foreclosure activity.

    RealtyTrac’s Midyear Foreclosure Report released recently found foreclosure activity decreased on a year-over-year basis in 178 out of the nation’s 211 metropolitan areas with a population of 200,000 or more.

    California, Nevada and Arizona cities accounted for all top 10 metro foreclosure rates and 15 of the top 20 metro foreclosure rates in the first half of the year. Only one Florida metro area posted a foreclosure rate among the top 20—Cape Coral-Fort Myers at No. 12—in sharp contrast to the first half of 2010, when Florida cities accounted for nine of the top 20 metro foreclosure rates nationwide.

    (More …)

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  • Top 5 Real Estate Headlines in the 1st Half of 2011

    12:44 pm on July 5, 2011 | Comments:0
    Tags: , , foreclosure, ,   Filed under: Buyer Info, Federal Goverment, Foreclosure, mortgage, Seller Info

    by The KCM Crew on July 5, 2011

    We have reached the midway point of the year. Today, we want to look back over the first six months and give you what we believe were the five items that have had the biggest impact on the real estate industry so far this year.

    The Government Wants Out of the Mortgage Business

    From the original outline of the Dodd-Frank regulations to the talk of closing Fannie Mae and Freddie Mac to the proposed Quality Residential Mortgage (QRM) guidelines, the government has made it very clear that they want to dramatically limit their involvement in the mortgage industry. What will come of this? Will private industry step up and fill the void created? What will be the increased cost to the consumer? Only time will tell.

    Despite Early Headlines, Sales are Increasing

    Headlines earlier in the year announced the total collapse of the housing market. To those in the know, it was obvious that comparing sales numbers in the first four months of this year to the same period last year made absolutely no sense. The largest tax credit ever given to home buyers expired on April 30, 2010. Large numbers of transactions were dragged forward last year so buyers could take advantage of the credit. Pending home sales (transactions going into contract) on the other hand have done quite nicely and many institutions (ex. Fannie Mae, Freddie Mac, NAR and Moody’s Analytics) are projecting good sales numbers throughout the rest of the year.

    Amid Warnings of a ‘Double-Dip’, Prices Began to Stabilize

    Prices continued to retreat for the first few months of the year and brought the bears out. Some called for another major fall in prices (15-20%) and almost all recalculated their projections to show continued depreciation. Just as these new projections were made available, some pricing indices announced that values actually increased (though by a rather minimal percentage). Again, those with the best understanding of the market were quick to explain…

    Foreclosures Were Delayed Longer Than Originally Projected

    Distressed properties (foreclosures and short sales) have a major impact on the values of all properties in an area. Because of paperwork challenges, the flow of these properties to the market was virtually shut off. At the beginning of the year, most experts believed the banks would correct these challenges by the end of the first quarter. That didn’t happen and therefore many of these properties were delayed coming to the market. This is a major reason why prices seemed to recover: there were fewer discounted properties available for sale. Most now believe that the banks are within 60-90 days of releasing this inventory and that prices will again begin to soften.

    Main Stream Media Begins to Announce “Now Is the Time to Buy!”

    With prices and interest rates at historic lows and the chance that mortgages will become more costly as the private sector steps in, many in the main stream media are announcing that buying a home now makes sense. In the last 45 days, the Wall Street Journal, Forbes Magazine, National Public Radio (NPR) and CBS Money Watch have all ran articles calling for the readership to consider buying now!

    Tomorrow, we will share what we believe will be the top 5 stories in the second half of 2011.


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