homesmillbrae.com » Backlogs

Foreclosures fall even as judges ramp up

Sat, 13 Jul 2013 02:55:57 +0000

U.S. foreclosure activity in June fell to the lowest level since December of 2006, but certain states are seeing a rise in activity, as judges work through tremendous backlogs of delinquent loans. Close to 128,000 properties received some kind of foreclosure filing in June, down 35 percent from a year ago, according to a new report from online foreclosure sales and analytics company RealtyTrac. Newly started foreclosures fell 21 percent month-to-month to the lowest level since the end of 2005.

Bank repossessions, the final stage of the foreclosure process, fell 9 percent month-to-month and were down 35 percent from a year ago. Still the numbers are on pace for nearly a half a million properties to be repossessed in 2013. That’s an improvement, but still well above normal levels.

(Read More: Dire Predictions For Housing Recovery)

The picture is also mixed geographically – Arkansas (up 143 percent), Oklahoma (up 103 percent), Maryland (up 74 percent), Washington (up 71 percent), New Jersey (up 33 percent), and New York (up 21 percent) –as states that require a judge in the foreclosure process as well as those with new laws protecting borrowers, are seeing a spike in repossessions.

Article source: http://www.cnbc.com/id/100877414

Foreclosures Fall Even as Judges Ramp Up

Thu, 11 Jul 2013 14:49:56 +0000

(Read More: Dire Predictions For Housing Recovery)

“The increases in judicial foreclosure auctions demonstrate that these delayed foreclosure cases are now being moved more quickly through to foreclosure completion,” notes RealtyTrac’s Daren Blomquist in the report.

(Read More: Map: Tracking the US Real Estate Recovery)

“Given the rising home prices in most of these markets, it is an opportune time for lenders to dispose of these distressed properties, either at the foreclosure auction to a third-party buyer, or by repossessing the property at the auction and subsequently selling it as a bank-owned home.”

Judicial foreclosure auctions were up 34 percent from June of 2012, as Realtors report “brisk” sales of these distressed properties. Investors and regular buyers have been competing for a decreasing supply of properties. Nationwide, inventories of all homes are down dramatically, as a large number of underwater borrowers and borrowers with very little home equity are still unable to sell.

(Read More: Apartments Reap Rewards of Rising Rates)

Florida, Nevada, Illinois, Ohio and Georgia posted the top five state foreclosure rates for the first half of the year, according to RealtyTrac.

Article source: http://www.cnbc.com/id/100877414

Home Sales at Risk Due to Rising Mortgage Rates

Fri, 28 Jun 2013 02:09:15 +0000

Lengthy loan locks could cost buyers thousands of extra dollars, which on the lower end might not be affordable and could scuttle the deal. While some builders can complete a home in 100 days, labor constraints have been slowing construction across the industry.

“A lot of the sub-contractors are seeing an increase in business, yet they’re reluctant to hire staff or have an inability to hire skilled labor, so we’re seeing delays with framers coming onto our properties to frame the houses, we’re seeing challenges with drywall finishers and painters,” says Paul.

Many builders are also seeing supply constraints, as they did not expect to see such a surge in demand. Demand is strong in large part because there is such a small supply of existing homes for sale nationwide, and because banks have been exceedingly slow to work through foreclosures in some states.

(Read More: Home Prices See Record Gain in April)

“About one third of homes sold are completed, down pretty significantly from where we were earlier in the cycle, which was in the 50 to 60 percent range,” notes David Goldberg, an analyst at UBS.

While the major public builders have not voiced concern publicly over risks to their backlogs, the analysts that cover them say if rates continue to rise, they will not be able to ignore it.

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick or on Facebook atfacebook.com/DianaOlickCNBC.

Questions? Comments? RealtyCheck@cnbc.com

Article source: http://www.cnbc.com/id/100849156

Housing Recovery Leaves Some Behind

Fri, 08 Mar 2013 08:11:42 +0000

To add to the delays, now some non-judicial states are seeing a big jump in backlogs due to new state laws that while attempting to safeguard borrowers, are delaying the foreclosure process in general.

Nevada instituted a new law criminalizing faulty foreclosures. Banks are taking a big breather there, resulting in the foreclosure backlog doubling in the last 8 months. Massachusetts, a non-judicial state, saw a similar jump after new state foreclosure legislation, and California’s Homeowner Bill of Rights, modeled on Nevada’s law, went into effect in January 2013, so it too will likely see a slowdown in the clearing of distressed loans.

It all brings into question the recent jump in home values, which is being caused by a huge drop in supply of distressed homes.

(Read More: Taking The Real Estate Recovery Local)

Sale prices of homes jumped nearly 10 percent in January, according to CoreLogic. Even with the price surge, inventories continue to drop dramatically across the nation, perhaps because would-be sellers want to see just how high prices will go before testing the waters.

Housing bulls seem unconcerned about the so-called “shadow inventory” of distressed properties, but perhaps they should be. Of the loans that were in foreclosure in January 2012, 42 percent still are, according to LPS. Just 33 percent moved to bank repossession or other forms of liquidation.

In addition, while new mortgage delinquencies are falling in non-judicial states, they are increasing almost 20 percent in judicial states, according to Lender Processing Services.

“The line that we would draw goes through home prices,” Blecher speculated. “If those back logs are having any impact on home prices that could drive new problem loans as well.”

(Read More: Pending Home Sales Soar Despite Rough Winter)

Article source: http://www.cnbc.com/id/100533234

Fewer Borrowers Are Behind on Mortgages, but for How Long?

Tue, 12 Feb 2013 23:13:38 +0000

“The declines in the mortgage delinquency rate will likely be muted for the foreseeable futures as the foreclosure process in some states can take more than 1,000 days,” notes Tim Martin, of TransUnion’s financial services business unit. “It is not clear yet, but recently announced regulatory rules related to mortgage servicing may tend to slow down this process further.”

Delinquencies dropped 6 percent annually in 2011 and 7 percent in 2010. This after jumping over 50 percent in each of the previous two years. The trouble is not with new loans but with a long legacy of troubled loans from the housing boom. While these loans make up 60 percent of mortgages outstanding, they account for 90 percent of loans gone bad. Attempts at loan modifications as well as long delays in the foreclosure process have kept these loans stuck in a bloated pipeline.

There are borrowers today that have not made a mortgage payment in several years but have still not lost their homes. New laws in California and Nevada slowed the foreclosure process considerably, while New York and New Jersey are still facing huge backlogs of bad loans that will take years to make their way through the states’ court process.

(Read More: New Housing Fears: Home Prices Are Rising Too.)

Nationally, the mortgage delinquency rate now stands at 5.19 percent, down from 6.01 percent a year ago, but still far from the historical average of around one to two percent. While loans made in the past few years, using far stricter underwriting, are faring very well, there is a concern that thousands of mortgage modifications made during the same time will default again. Negative equity, while improving, continues to plague millions of borrowers and makes selling the home impossible. Should these borrowers need to move, they will likely have to default on their home loans.

(Read More: Why Home Builders Won’t Drop New Home Prices,)

Article source: http://www.cnbc.com/id/100453098

Bay Area real estate is a market gone crazy

Sun, 01 May 2011 20:24:33 +0000

By Patrick May

pmay@mercurynews.com

This just in from the front lines of the housing meltdown:

ALL HELL’S BREAKING LOOSE!

Listening to battle-scarred Realtors talk about all the short-sale funny business, fake landlords, mold-slimed foreclosure properties, bogus real estate agents and yappin’ junkyard dogs makes you wonder how any homes are getting bought and sold at all.

With upside-down homeowners, overwhelmed banks and cash-toting low-ballers sucking up investment properties at bargain-basement prices, veteran real estate professionals around the Bay Area say they’ve never seen a market as whacked-out as the one we’re slogging through right now.

“It’s total craziness out there,” says Guy Berry, whose 30-plus years with firms like Coldwell Banker make him one of Silicon Valley’s elder statesmen of brick and mortar. The magnitude and complexity of the housing crisis “slows things down so much that it creates even more opportunity for even more crazy things to happen.”

There are a number of reasons for the madness. Home prices have hit gutter levels that make 2011 look like 2009 all over again. Bank lending rules have gotten Kafkaesque, clogged with fine print. Federal regulations have helped create backlogs of repossessed properties. And some underwater homeowners are gaming the system, living rent-free while

foreclosures drag on for months, even years.

Combine all that, and the resulting hoodwinkery is truly epic. Steve Mohseni, a 15-year real estate broker with ReMax in Pleasanton, calls it “the wild, wild West. Whether they’re buying or selling or lending, people are just looking after their own neck, and the ones who are trying to act responsibly are the ones getting burned.”

There are evicted homeowners who re-key the locks and move back in. Or they rent out their foreclosed home to someone else, collecting rent until the bank gets wise. San Jose real estate agent Leonora Cruz had slapped a lockbox on one of her bank-owned listings “and when we went back to put up our sign, you could see that someone else had moved in. Turns out the evicted owner had rented out the place.”

On Craigslist, to be precise. “The tenant was a young mom with three kids,” Cruz says. “It was sad. She’d paid the guy a $5,000 deposit. He was renting out the place even though it wasn’t even his house anymore. She said, ’It’s scary because you don’t even know what’s a real rental these days.’”?“

Walk into any real estate office and the agents start shaking their heads. They’ve seen upside-down owners who dismantle their homes before they vanish. One broker had a Vallejo listing where someone had ripped open the walls and removed all the copper pipes. Lynda Shatsky, a San Jose real estate broker with 26 years under her belt, has a listing in Oakland that’s become the neighborhood dump.

“My cleanup crew said when they were taking the first load to the dump, someone dumped another load,” she says. “Last Saturday, we found two more mattresses in the backyard. And under the big mattress was a dead pit bull.”

A house often empties out only after a torturous tango between a lender and homeowner. Some owners stay without paying their loan for as long as two years. And once the bank catches up with them, they often get “cash for keys” as an enticement to get them to leave.

Real estate agent Cory Wong had an entire church congregation lodged in a bank-owned San Francisco duplex, refusing to budge. “They’d been in the property for over two years and hadn’t paid their mortgage,” he says. “They had pews and an organ downstairs. The reverend was really nice, but I told him he was squatting and couldn’t stay there.

“We changed the locks, but somehow someone got a key,” Wong says. “Maybe it was divine intervention.”

Wong finally had the church dismantled. “We moved the pews and organ into storage. It was the first time I’ve ever had to have a church evicted and I felt bad. After all, I’m a human being before I’m a Realtor.”

Facing foreclosure apparently sharpens the creative bent of some homeowners. To keep electricity flowing to his condo as he fought eviction, one guy ran an extension cord out the front door to suck free power from a common area of the building.

Then there’s the so-called “buy and bail,” which one real estate agent explained this way: “Mom and pop bought a place for $600,000. Now they’re upside-down on their loan. So mom goes down the street and pays cash for another house just like theirs. She puts it in her name. Then once it closes they walk away from the original house. And they don’t care about their credit being ruined because they’ve now got their new house.”

As prices plummet and lending stays stuck in slow gear, investors have stepped into the void armed with cash.

“We’ve had them bring cash in brown paper bags,” says Dennis Steinbach, vice-president of Atlantic Pacific Real Estate and a longtime fixture in the valley’s real estate business. “One guy came in with a Safeway bag with $10,000 in it and counted it out on the table.”

Real estate agents say more than a third of the deals these days are cash, as investors snap up houses at fire-sale prices, slap on some paint, then rent them out for a positive-cash flow, something that was impossible to do when the Bay Area real estate market was red-hot.

One of Cruz’s listings drew 23 offers, many of them cash. Other buyers use greenbacks for more sinister reasons. Some real estate agents discover their repossessed listing was actually a pot farm disguised as a suburban ranch-style house. The “farmer” will buy a place for $400,000 cash, set up shop inside, bypass the meter to poach electricity, harvest a few crops, maybe even pull a loan out of the property, then walk away with the profits.

Atlantic Pacific real estate broker Bryan Chapman had one like that. “I walked up the first time and there was a sheriff’s deputy sitting there. He stood up, drew his gun and said ’If you move, you’re in trouble.’ Scared the heck out of me.”

Inside his repossessed listing-cum-crime-scene, Chapman found fertilizer sacks and smashed grow-lamps, with marijuana leaves “blown all over the place like insulation. The whole kitchen and dining room was one giant pot farm. And the master bedroom had been turned into a processing center. I was stepping on the remains of hundreds of thousands of dollars worth of pot.”

Still, with all the insanity out there, Realtors will tell you what Realtors will always tell you:

It’s the perfect time to buy.

“If you can strap on the Teflon so that all this stuff doesn’t stick to you, this is a great opportunity,” said Capitola mortgage broker Forrest Cambell. “You have incredibly low interest rates and home prices at historically low levels. So, yes, it’s a crazy time, but crazy times are great times to buy real estate.”

Contact Patrick May

at 408-920-5689. Follow him

at Twitter.com/patmaymerc.

Glossary for today’s rough-and-tumble
real estate market

Buy and bail: An underwater homeowner pays cash for a similar model for much less than he’d paid for his house, then once it closes, walks away from the original house.
Underwater: The state of homeowners whose houses are worth less than they owe on them.
Cash for keys: What lenders, or real estate agents on their behalf, will offer an underwater homeowner to leave a house voluntarily.
Broomswept: The condition many lenders require departing mortgagees to leave their property in if they want “cash for keys.”
Massaging: What real estate agents often must do to all parties to keep a fragile deal from falling apart.
A scrubbed lead: A lead on a buyer that a real estate agent considers has been confirmed as qualified.
A trash-out: The process a bank goes through to clean up a property that’s been damaged by the outgoing resident.
Preservation company: Crews hired to clean up trashed or vandalized bank-owned properties.
Hold for rent: When a bank forecloses on a house, then cleans it up and rents it out until the market comes back.
A rehab: A house that’s not in livable condition and is being sold as-is by the bank.
Handyman’s special: Realtor code for a place that needs serious repairs.
Turnkey: Realtor code for a home ready to move into.

Source: Mercury News reporting

Article source: http://www.mercurynews.com/breaking-news/ci_17969497