Real Estate News and Commentary

May 2, 2010July 18, 2019

The Real Estate Pulse

Making news the week ending May 1st, 2010:

24 Rooms in an efficiency? Check out how to get the most of space:
A video from “World’s Greenest Homes” highlights a Hong Kong architect who transformed his efficiency into a 24 room living experience.

MarketWatch answers some important questions about credit reports:
How long does derogatory information remain on your credit report? This Q and A from MarketWatch has some explanation.

Homebuyer tax credits are over, now what?
The home buyer tax credit has officially expired. Some are upset, others are happy. The REOInsider has insight how this will impact the real estate market.

More mixed foreclosure data…
Although a recent report by Lender Processing Services (LPS) indicates about 7.39 million non-current and REO loans darken the Real Estate landscape, there is a recent reduction in delinquencies. Although the March foreclosure numbers improved from February there was an increase in loans moving from seriously delinquent to foreclosure. The Real Estate Economy Watch analyzes the newest data.

There’s no surprise in who’s backing residential mortgages:
The Wall Street Journal explains who is providing home loans; you might be surprised to know that a report from Mortgage Finance indicated that 96.5% of all home mortgages in the first quarter of 2010 were backed by Government entities. Government entities only backed 90% of all residential mortgages in the fourth quarter of 2009.

And Finally this week…
The Wall Street Journal reported that Karl Rove’s Washington, DC home is under contract.

This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws.

April 30, 2010November 23, 2021

The “right to rent”; an old idea is given new life

H.R. 5028 also known as the Right to Rent Act of 2010 was introduced April 15th by Representatives Raul Grijalva (D – AZ) and Marcy Kaptur (D – OH) as a means “To allow homeowners of moderate-value homes who are subject to mortgage foreclosure proceedings to remain in their homes as renters.”

According to Representative Grijalva’s press releases ([http://grijalva.house.gov/index.cfm?sectionid=13&parentid=5&sectiontree=5,13&itemid=582] and [http://grijalva.house.gov/uploads/R2R_2010.pdf]) , the bill is designed to allow homeowners facing foreclosure to rent the home back from the lender rather than being evicted while the bank is foreclosing. “The bill aims to give relief to middle-income homeowners, not speculators or people living in unaffordable mansions.” To qualify, the home must be the family’s primary residence for at least two years, the home must be equal to or below the median home price for the metropolitan area, and the mortgage must have been originated before July 1, 2007. Upon receiving a notice of foreclosure, the homeowner, may elect to rent for a term of up to five years at a rent determined by an appraiser.

The credit for the idea of “right to rent” along with the rules that seem eerily similar to those set forth by H.R. 5028 actually belongs to Dean Baker, the co-director of the Center for Economic and Policy Research. Mr. Baker’s idea of “right to rent” was introduced in 2007, when the idea was actually better suited to be implemented in helping distressed homeowners as well as reducing the impact of home value deterioration (http://www.guardian.co.uk/commentisfree/2007/oct/23/therightbailout).

The original article discussed the merits of keeping families in a home, maintaining the integrity of the neighborhood, all the while not requiring a government bailout:

“It is possible to help these families without any big bailouts or new bureaucracies…so that homeowners facing foreclosure will have the option to rent their home indefinitely at the fair market rent…The appraiser would determine the fair market rent…”

“This measure would ensure that current homeowners could at least keep a roof over their head…”

“This own to rent provision can be limited by both the date of issuance of the mortgage, and the value of the home…the own to rent option can be restricted to mortgages issued before July 1 2007…”

“To ensure that only less affluent homebuyers benefit, it can be restricted to homes that sold for less than the median price in an area…”

A variation of the “right to rent” was implemented by Fannie Mae in November 2009 and subsequently by Freddie Mac. Fannie Mae’s “Deed for Lease” program allows the homeowner to lease the home back from the lender for a twelve month period (the lease may be extended beyond the initial twelve months on a month to month basis) after giving the home back to the lender by completing a deed in lieu of foreclosure and meeting other criteria.

This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws.

by Dan Krell

April 27, 2010October 5, 2019

Foreclosures and mortgage mod scam artists

Foreclosures continue to be a national issue; however, a tiny glimpse of light from the end of the tunnel may be peering through for the local market. According to the April 2010 report Property Foreclosures In Maryland First Quarter 2010 by the Maryland Department of Housing and Community Development (which can be viewed on mdhope.org), the number of national foreclosure filings (which includes notices of default, notices of foreclosure sales and lender purchases of foreclosed properties) increased the first quarter of 2010 (7.2% compared to the fourth quarter of 2009 and 16% compared to the first quarter of 2009). It is estimated that 1 in 138 households in the United Sates received a foreclosure filing during the first quarter of this year.

The news for Maryland, however, seems somewhat better. The report indicated a reduction of foreclosure filings in the first quarter of 2010 compared to the fourth quarter of 2009 (-11.5%) but increased compared to the first quarter of 2009 (+59.9%). Montgomery County fared much better such that the total number of foreclosure filings decreased in the first quarter of 2010 compared to the fourth quarter of 2009 (-24.2%) and the first quarter of 2009 (-14%).

Along with the ongoing problem of foreclosure come the continued attempts from home owners to save their homes. As the real estate market deteriorated, many home owners found themselves in a negative equity situation and unable to refinance their mortgages. Mortgage modification became the prevalent means of foreclosure relief as home values decreased during the market decline; home owners facing financial challenges seek to modify their mortgage terms to make their mortgage payments more affordable.

Since the beginning of the foreclosure crisis, foreclosure rescue scams have taken advantage of desperate home owners trying to save their homes. As the prevalence of mortgage modifications grew, so did mortgage modification scams. Although legitimate mortgage modification information is readily available from HUD, Fannie Mae, Freddie Mac, federal and local governments, non-profit organizations, etc. home owners continue to fall prey to scam artists.

Because scammers continue to confuse home owners searching for assistance by evolving their techniques to appear to be legitimate, the Loan Modification Scam Prevention Network was founded as a project of The Lawyers’ Committee for Civil Rights Under Law. The Loan Modification Scam Prevention Network (preventloanscams.org) is a coalition effort created to bolster ongoing government, law enforcement, and public education efforts to fight the scammers who are intent on defrauding distressed home owners.

To assist home owners, the preventloanscams.org website contains extensive information such as (but not limited to) housing counseling, tips for avoiding scams, state and local foreclosure resources, the means to report suspected scams, and a list of alleged scam artists! Additionally, the site lists state and local laws regulating businesses involved in foreclosure relief, as well as a statement about attorneys providing loan modifications.

If you are seeking a mortgage modification, the Loan Modification Prevention Network is one of the many resources available to you; the website has a comprehensive database. Additional resources are available through HUD certified counseling programs and the Maryland Hope Hotline (1-877-462-7555). Maryland home owners facing foreclosure have protections under the Protection of Homeowners in Foreclosure Act, such as prohibiting foreclosure consultants from collecting upfront fees. If you suspect you are being scammed, contact a local consumer protection agency and/or law enforcement.

This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of April 26, 2010. Using this article without permission is a violation of copyright laws. Copyright © 2010 Dan Krell

April 24, 2010July 21, 2019

What’s making the rounds in housing news

Making news the week of April 19th 2010

What do you mean it’s a seller’s market?!
http://www.realestateeconomywatch.com/2010/04/homebuyer-tax-credit-backfires-on-buyers/
As the deadline for the home buyer tax credit is fast approaching, many home sellers have taken a firm standing on price as well as asking buyers to forgo the usual inspections. Knowing that buyers are rushing to meet the deadline, home sellers have grasped the upper hand- at least for another week.

Signs of life in the jumbo mortgage securitization market
http://www.housingwire.com/2010/04/21/private-label-securitization-market-starts-to-thaw-with-jumbo-prime-rmbs/
Big news in the mortgage backed securities arena with the announcement of a jumbo MBS deal of $222.38 million (each loan averaging a balance of $932,700)…

Washington, DC comes in as #2
http://www.marketwatch.com/story/the-top-10-places-to-relocate-in-2010-2010-04-20
Want to know the best places to relocate? Washington, DC is #2 on the list of the top 10 place to relocate in 2010.

What would the greatest economists say about the financial crisis?
What would Keynes and Hayek say about the current crisis? Take a look at this video of two of the great economists attend a conference on the economic crisis. They decide to go out the night before the conference begins to sing about “why there’s a “boom and bust” cycle in modern economies and good reason to fear it.” This rap called “Fear the Boom and Bust” (a Hayek vs. Keynes Rap Anthem) was created by the collaboration between economist Russ Roberts and director John Papola.

Will there be changes to Regulation C?
http://www.federalreserve.gov/newsevents/press/bcreg/20100423a.htm
The Federal Reserve Board announced on Friday (4/23) that it will look into revising the Home Mortgage Disclosure Act. “The act requires mortgage lenders to provide detailed annual reports of their mortgage lending activity to regulators and the public. Consumers, community and consumer organizations, mortgage lenders, and other interested parties will be invited to participate in the hearings.”

This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws.

April 22, 2010June 28, 2019

Fickle real estate data contributes to analysis paralysis

When perusing the daily economic indicators- in particular the housing indicators something does not seem quite right. The market is obviously volatile (as can be witnessed by the alternating positive and negative reports), but it appears it has become fickle too. Of interest is default and foreclosure data, where it seems conflicting data is now being reported almost simultaneously.

The Wall Street Journal (April 19, 2010; Mortgage Delinquencies Decline Again) reported LPS Applied Analytics data indicating that the number of homes in foreclosure fell in the first quarter of 2010. In addition, the number of delinquencies fell to a level that has not been seen since the beginning of the mortgage crisis.

The REO Insider (April 21, 2010; California Defaults Drop 4.2% in Q110: MDA DataQuick) supports the WSJ report by reporting MDA DataQuick data indicating a reduction of 4.2% in California defaults in the first quarter of 2010. The report indicates that the crisis is shifting from low to mid priced homes to the more expensive neighborhoods.

Contrast the previous reports with this MarketWatch report of a lingering foreclosure market (April 12, 2010; Foreclosure inventories hit record). The report cited LPS (Lender Processing Services) data that indicated this past February’s foreclosure rate of 3.31% was a 51.1% increase from February 2009. This report cited an increase of delinquencies in February 2010 as compared to February 2009 (the national delinquency rate was reported as being 10.2%); and the percentage of new problem loans is at a five year high. (http://www.marketwatch.com/story/inventory-of-foreclosed-homes-hits-record-2010-04-12)

It’s ok to be confused, many people are. Although the raw data may be similar (or possibly the same), differences in the reporting may be due to the type of analyses and data points that are used. Certainly this may not help home buyers and sellers clearly understand what is happening in the market; contradicting data reports may contribute to home buyer’s and seller’s analysis paralysis.

This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws.