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Foreclosures drop in Bay Area, California

Thu, 24 Jan 2013 08:24:57 +0000

Foreclosure and default notices in the Bay Area and California have fallen to their lowest levels since before the housing downturn, according to a report released Wednesday.

The report from San Diego’s DataQuick highlights how the foreclosure crisis appears to be subsiding after running rampant for five years.

“For more than a year, the general trend has been down” for legal filings that indicate mortgage distress, said DataQuick analyst Andrew LePage.

There are several reasons that foreclosure activity is trending down. As home values have risen over the past year, fewer homeowners are underwater, which means they can more easily refinance or sell their homes if they have trouble keeping up with their mortgage.

Financial hardship is also diminishing. “The other big factors are the pickup in the economy and the improvements in job growth that keep people from getting in trouble in the first place,” LePage said.

On top of that, various new laws and legal settlements between banks and the government encourage lenders to pursue alternatives to foreclosure, such as loan modifications and short sales (selling for less than is owed on the mortgage).

While LePage noted that the effects of the law and settlements are hard to measure, the net impact is fewer foreclosures.

Most subprimes gone

Moreover, the bulk of risky subprime loans have already gone through foreclosure. Mortgages issued from 2008 “were safer and saner,” LePage said, meaning they are unlikely to have the sharp payment spikes of teaser-rate subprimes.

For the fourth quarter, DataQuick reported that 5,399 households in the Bay Area received default notices, the first step in the foreclosure process. That was down 46.1 percent from the same quarter of 2011. About half of default notices become foreclosures.

Although lenders can file notices of default once borrowers are three months behind, DataQuick said that Californians receiving the notices were a median of eight months in arrears on their primary mortgages.

Statewide, notices of default were down 37.9 percent in the quarter, to 38,212.

Trustee deeds, the final step of foreclosure, were issued for 2,765 Bay Area homes in the fourth quarter. That was down 42.8 percent from the same quarter of 2011.

Statewide, trustee deeds were down 32.4 percent, to 21,127 in the fourth quarter.

Looking at the full year also showed declines. The Bay Area had 30,046 default notices in 2012, down 30.7 percent from 2011. The nine-county region had 1,907 trustee deeds in 2012, a 41.2 percent decline from 2011.

While the numbers are the lowest in six years, many homeowners still struggle to keep their houses.

Oakland’s Peggy Hart, 61, for instance, said income from her day care business took a big hit a few years ago. Three years ago, when she first applied for a loan modification, bank representatives told her to stop paying her mortgage and she complied, she said. Wells Fargo gave her a loan modification early on, but the payments were still too high and she was unable to keep up, she said.

Changes are tough

Now her business and her income have rebounded, but her efforts to get a loan modification have been frustrating and unsuccessful, she said.

“I’m able to pay, I want to pay my mortgage,” she said. “I told (Wells) on the phone, ‘Please let this happen for me.’ “

Hart lives with her two sons, granddaughter and a baby great-grandson in the house, where they also run the day care. She owes about $200,000 on the house, which various real estate sites estimate is worth at least $390,000.

“Wells Fargo continues to work with borrowers on mortgage modifications and other options that may help them remain in their homes and avoid foreclosure when possible,” the bank said in a statement. “We have been working with Ms. Hart for over three years to identify an option that would allow her to retain this home. We were able to provide her with some temporary assistance in September 2009 while we continued to look at home retention options.”

Both foreclosures and notices of default remain more common in lower-cost areas, DataQuick said.

Over the past five years, 1.1 million of California’s 8.7 million houses and condos received a foreclosure notice, it said. Of those, 780,000 were actually lost to foreclosure. The others were either sold or the payments were made current.

At the courthouse auction where the final step of foreclosure takes place, about 42 percent of properties in the fourth quarter were purchased by investors, DataQuick said. That was up from 31.2 percent a year earlier.

Fewer foreclosures

Fewer people in the Bay Area and California lost homes to foreclosure in the fourth quarter compared with a year earlier; and fewer received notices that they were behind in payments. For the full year, both notices of default (the first step in the foreclosure process) and trustee deeds (the final step of foreclosure) were down compared with 2011.

Notices of Default

Houses and condos, fourth quarter

Trustee deeds recorded

Houses and condos, fourth quarter

Sources: DataQuick, DQNews.com

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com

Article source: http://www.sfgate.com/realestate/article/Foreclosures-drop-in-Bay-Area-California-4218858.php

Will Fed’s Mortgage Buying Juice the Housing Recovery?

Thu, 13 Sep 2012 22:56:30 +0000

Home prices are stabilizing, and new construction is bouncing back, but apparently the U.S. Federal Reserve isn’t buying a bullish housing recovery.

Its announcement Thursday that it would buy up to $40 billion in agency mortgage-backed securities every month, with no clear finish line, says loud and clear that the Fed thinks housing needs more stimulus. (Read More: Fed Pulls Trigger, to Buy Mortgages in Effort to Lower Rates.)

Mortgage rates are already hovering near record lows, but mortgage applications, especially to purchase a home, have been weak. So many have refinanced already at low rates, and so many more are unable to refinance because of lack of home equity or high fees.

As for home buying, the real growth in that area this year has been among investors on the low end, largely using all cash.

Supplies of foreclosed properties have been shrinking dramatically, as those investors swarm auctions and bid on bulk deals. (Read More: How Investors Are Skewing Home Price Recovery.)

The hot and still heating rental market offers potentially more rewards than the volatile stock market.

In turn, all that activity on the distressed end is pushing up home prices. While overall foreclosure activity is falling, we could see volumes of bank-owned properties for sale rising over the next few months, as banks look to take advantage of rising demand and prices.

We are already seeing spikes in foreclosures activity in states where these cases had been backed up in the courts.

“Bucking the national trend, deferred foreclosure activity boiled over in several states in August,” said Daren Blomquist, vice president of RealtyTrac. “In judicial states such as Florida, Illinois, New Jersey and New York, this was a continuation of a trend we’ve been seeing for several months now. The increases in Florida and Illinois pushed foreclosure rates in those states to the two highest in the country — supplanting the non-judicial states of Arizona, California, Georgia and Nevada. Previous to August, the nation’s top two state foreclosure rates have been from those four non-judicial states every month since December 2010.”

As more of these properties come to market, investors will likely prevail, despite many potential owner occupants looking to get in on good deals. Again, this is because investors have the cash advantage. Even low mortgage rates won’t help some potential buyers, because Fannie Mae and Freddie Mac are still increasing guarantee fees, which push rates higher. They could, however, mitigate some of the fee hikes.

“For everyday homeowners, QE3 should work to suppress mortgage rates at a time when they’re artificially increasing. QE3 will offset the majority of the FHFA’s new g-fees, and will help keep FHA loans affordable despite rising mortgage insurance premiums,” argued Dan Green of Waterstone Mortgage.

But there is also plenty of uncertainty about the future of mortgage financing, depending on the outcome of the November election, not to mention action the current administration is taking to shrink Fannie Mae and Freddie Mac. (Read More: ‘Wind Down’ of Fannie, Freddie: ‘Positive for Housing’?)

“One new wrinkle is the recent announcement that Fannie and Freddie will be required to shrink their own retained MBS portfolios faster than expected,” noted Guy Cecala of Inside Mortgage Finance. “This could slightly dilute the impact of the Fed’s action since its increased purchases may be offset by less GSE purchases.”

To see the low interest rates are not the housing cure-all, one need look no further than weekly mortgage applications numbers, which have been lackluster of late to say the least. The one benefit could be in the refinance segment of the market, especially as there is a new push to broaden the administration’s current refinance program for underwater borrowers. More refinances mean more money in consumers’ pockets. Unfortunately the Democrat-led effort is unlikely to make its way into reality, given the rising Republican opposition as election day nears.

No question more and more Americans will be turning to the housing market this fall, as home ownership is now cheaper than renting in all of the 100 largest U.S. markets, “by a wide margin,” according to a new report from Trulia.com. (Read More: As Housing Recovers, Will Apartment Boom End?)

What remains to be seen is how many potential buyers will be able to take advantage of these low rates, given the still tight lending standards that rule today’s market.

—By CNBC’s Diana Olick

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/49018526?__source=RSS*blog*&par=RSS

Will Fed’s Mortgage Buying Juice the Housing Recovery?

Thu, 13 Sep 2012 22:56:29 +0000

Home prices are stabilizing, and new construction is bouncing back, but apparently the U.S. Federal Reserve isn’t buying a bullish housing recovery.

Its announcement Thursday that it would buy up to $40 billion in agency mortgage-backed securities every month, with no clear finish line, says loud and clear that the Fed thinks housing needs more stimulus. (Read More: Fed Pulls Trigger, to Buy Mortgages in Effort to Lower Rates.)
Mortgage rates are already hovering near record lows, but mortgage applications, especially to purchase a home, have been weak. So many have refinanced already at low rates, and so many more are unable to refinance because of lack of home equity or high fees.

As for home buying, the real growth in that area this year has been among investors on the low end, largely using all cash.

Supplies of foreclosed properties have been shrinking dramatically, as those investors swarm auctions and bid on bulk deals. (Read More: How Investors Are Skewing Home Price Recovery.)

The hot and still heating rental market offers potentially more rewards than the volatile stock market.

In turn, all that activity on the distressed end is pushing up home prices. While overall foreclosure activity is falling, we could see volumes of bank-owned properties for sale rising over the next few months, as banks look to take advantage of rising demand and prices.

We are already seeing spikes in foreclosures activity in states where these cases had been backed up in the courts.

“Bucking the national trend, deferred foreclosure activity boiled over in several states in August,” said Daren Blomquist, vice president of RealtyTrac. “In judicial states such as Florida, Illinois, New Jersey and New York, this was a continuation of a trend we’ve been seeing for several months now. The increases in Florida and Illinois pushed foreclosure rates in those states to the two highest in the country — supplanting the non-judicial states of Arizona, California, Georgia and Nevada. Previous to August, the nation’s top two state foreclosure rates have been from those four non-judicial states every month since December 2010.”

As more of these properties come to market, investors will likely prevail, despite many potential owner occupants looking to get in on good deals. Again, this is because investors have the cash advantage. Even low mortgage rates won’t help some potential buyers, because Fannie Mae and Freddie Mac are still increasing guarantee fees, which push rates higher. They could, however, mitigate some of the fee hikes.

“For everyday homeowners, QE3 should work to suppress mortgage rates at a time when they’re artificially increasing. QE3 will offset the majority of the FHFA’s new g-fees, and will help keep FHA loans affordable despite rising mortgage insurance premiums,” argued Dan Green of Waterstone Mortgage.

But there is also plenty of uncertainty about the future of mortgage financing, depending on the outcome of the November election, not to mention action the current administration is taking to shrink Fannie Mae and Freddie Mac. (Read More: ‘Wind Down’ of Fannie, Freddie: ‘Positive for Housing’?)

“One new wrinkle is the recent announcement that Fannie and Freddie will be required to shrink their own retained MBS portfolios faster than expected,” noted Guy Cecala of Inside Mortgage Finance. “This could slightly dilute the impact of the Fed’s action since its increased purchases may be offset by less GSE purchases.”

To see the low interest rates are not the housing cure-all, one need look no further than weekly mortgage applications numbers, which have been lackluster of late to say the least. The one benefit could be in the refinance segment of the market, especially as there is a new push to broaden the administration’s current refinance program for underwater borrowers. More refinances mean more money in consumers’ pockets. Unfortunately the Democrat-led effort is unlikely to make its way into reality, given the rising Republican opposition as election day nears.

No question more and more Americans will be turning to the housing market this fall, as home ownership is now cheaper than renting in all of the 100 largest U.S. markets, “by a wide margin,” according to a new report from Trulia.com. (Read More: As Housing Recovers, Will Apartment Boom End?)

What remains to be seen is how many potential buyers will be able to take advantage of these low rates, given the still tight lending standards that rule today’s market.

—By CNBC’s Diana Olick

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/49018526?__source=RSS*blog*&par=RSS

Will Fed’s Mortgage Buying Juice the Housing Recovery?

Thu, 13 Sep 2012 22:56:29 +0000

Home prices are stabilizing, and new construction is bouncing back, but apparently the U.S. Federal Reserve isn’t buying a bullish housing recovery.

Its announcement Thursday that it would buy up to $40 billion in agency mortgage-backed securities every month, with no clear finish line, says loud and clear that the Fed thinks housing needs more stimulus. (Read More: Fed Pulls Trigger, to Buy Mortgages in Effort to Lower Rates.)
Mortgage rates are already hovering near record lows, but mortgage applications, especially to purchase a home, have been weak. So many have refinanced already at low rates, and so many more are unable to refinance because of lack of home equity or high fees.

As for home buying, the real growth in that area this year has been among investors on the low end, largely using all cash.

Supplies of foreclosed properties have been shrinking dramatically, as those investors swarm auctions and bid on bulk deals. (Read More: How Investors Are Skewing Home Price Recovery.)

The hot and still heating rental market offers potentially more rewards than the volatile stock market.

In turn, all that activity on the distressed end is pushing up home prices. While overall foreclosure activity is falling, we could see volumes of bank-owned properties for sale rising over the next few months, as banks look to take advantage of rising demand and prices.

We are already seeing spikes in foreclosures activity in states where these cases had been backed up in the courts.

“Bucking the national trend, deferred foreclosure activity boiled over in several states in August,” said Daren Blomquist, vice president of RealtyTrac. “In judicial states such as Florida, Illinois, New Jersey and New York, this was a continuation of a trend we’ve been seeing for several months now. The increases in Florida and Illinois pushed foreclosure rates in those states to the two highest in the country — supplanting the non-judicial states of Arizona, California, Georgia and Nevada. Previous to August, the nation’s top two state foreclosure rates have been from those four non-judicial states every month since December 2010.”

As more of these properties come to market, investors will likely prevail, despite many potential owner occupants looking to get in on good deals. Again, this is because investors have the cash advantage. Even low mortgage rates won’t help some potential buyers, because Fannie Mae and Freddie Mac are still increasing guarantee fees, which push rates higher. They could, however, mitigate some of the fee hikes.

“For everyday homeowners, QE3 should work to suppress mortgage rates at a time when they’re artificially increasing. QE3 will offset the majority of the FHFA’s new g-fees, and will help keep FHA loans affordable despite rising mortgage insurance premiums,” argued Dan Green of Waterstone Mortgage.

But there is also plenty of uncertainty about the future of mortgage financing, depending on the outcome of the November election, not to mention action the current administration is taking to shrink Fannie Mae and Freddie Mac. (Read More: ‘Wind Down’ of Fannie, Freddie: ‘Positive for Housing’?)

“One new wrinkle is the recent announcement that Fannie and Freddie will be required to shrink their own retained MBS portfolios faster than expected,” noted Guy Cecala of Inside Mortgage Finance. “This could slightly dilute the impact of the Fed’s action since its increased purchases may be offset by less GSE purchases.”

To see the low interest rates are not the housing cure-all, one need look no further than weekly mortgage applications numbers, which have been lackluster of late to say the least. The one benefit could be in the refinance segment of the market, especially as there is a new push to broaden the administration’s current refinance program for underwater borrowers. More refinances mean more money in consumers’ pockets. Unfortunately the Democrat-led effort is unlikely to make its way into reality, given the rising Republican opposition as election day nears.

No question more and more Americans will be turning to the housing market this fall, as home ownership is now cheaper than renting in all of the 100 largest U.S. markets, “by a wide margin,” according to a new report from Trulia.com. (Read More: As Housing Recovers, Will Apartment Boom End?)

What remains to be seen is how many potential buyers will be able to take advantage of these low rates, given the still tight lending standards that rule today’s market.

—By CNBC’s Diana Olick

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/49018526?__source=RSS*blog*&par=RSS

Rent Spikes Begin to Ease

Wed, 05 Sep 2012 16:02:27 +0000

Recent reports have shown home prices rising, especially in the housing markets which were hardest hit in the crash.

Investors, buying in bulk, have been swarming these distressed markets, seeking to take advantage of a thriving new single family rental market.

The strong demand from investors has pushed supplies down, causing prices to rise. But as housing recovers, and more fence-sitters decide to jump in, will the rental market remain strong?

Rents are still rising.

Nationally, rents rose 4.7 percent in August from a year ago, which, while still a gain, is down from the 5.8 percent annual increase in May – making it the slowest rise since March, according to Trulia.com. Some markets, however, are still hot, with rents up around 10 percent year over year. These include Houston and Seattle, Denver and San Francisco.

“Rents had been on fire earlier this year, but some of the hottest rental markets are starting to cool,” said Jed Kolko, Trulia’s Chief Economist. “New construction that started last year is finally coming onto the market, giving renters more choices and some relief from rising rents. Still, rents are climbing in nearly all of the major rental markets.”

Investors in the multi-family apartment space don’t seem concerned, as we noted in a post last week, with most saying that an improving housing market can peacefully co-exist with a strong rental market for a time, as long as rents don’t become completely unaffordable.

Much of the improvement in housing is thanks to investors, not regular home buyers. Witness yet another drop in weekly mortgage applications today, the fifth straight week, according to the Mortgage Bankers Association. Applications to purchase a home were down just under one percent. This as the rate on the 30-year fixed fell. Again that points to a continued strong rental market.

A new report from Rent.com quantified many of the reasons potential buyers are delaying home ownership: 47 percent are waiting to save a down payment , 11 percent are waiting for the real estate market to stabilize, 22 percent are waiting for their credit to improve to qualify for a home loan, and 20 percent are waiting to feel more secure about their employment situation.

A bright spot is that while construction spending on home renovations is falling, apparently renters are investing more in their spaces. 47 percent have spent more money in the last three years or plan to spend more to improve their rental units, according to Rent.com. 63 percent of renters planning to spend more are going to spend money on furniture and décor they can take with them.

Credit, attitudes toward home ownership and a still shaky housing recovery will likely hold the rental market in good stead for many years. An easing in rental rates is likely due to more supply coming on line in the multi-family sector, while single family rent strength will vary neighborhood to neighborhood.

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/48910458?__source=RSS*blog*&par=RSS

Bay Area Olympians, Aug. 11

Sun, 12 Aug 2012 13:08:49 +0000

A look at what Olympians with Bay Area ties did Saturday:

VOLLEYBALL

Foluke Akinradewo (Stanford): The U.S. middle blocker tied for the team high with three blocks and added eight spikes in a 25-11, 17-25, 20-25, 17-25 loss to Brazil in the gold-medal match.

Logan Tom (Stanford): The American outside hitter had 11 spikes, second on the team to Destinee Hooker, and tied Akinradewo for the team high with three blocks, in the United States’ loss.

TRACK AND FIELD

Keshia Baker (Fairfield): Baker was not chosen to race but received a gold medal as part of the Americans’ win in the women’s 4×400 relay.

Alysia Johnson Montano (Cal): The former U.S. champion finished fifth in the women’s 800 final, with a time of 1:57.93, 1.74 seconds off the pace set by Russia’s Mariya Savinova.

Article source: http://www.sfgate.com/sports/article/Bay-Area-Olympians-Aug-11-3781712.php