Real Estate News and Commentary

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.

April 20, 2010October 5, 2019

When in doubt- blame the market

In a recent conversation with a home owner, who withdrew his home from the market, I asked if we could talk about the possibility of re-listing the home. My intention was to discuss different aspects of the listing, such as; the price, the amount of buyer traffic, and the types of marketing. The usual respectful responses I have heard in the past include; “no thanks” or “sure, when are you available?” However, this owner’s sharp tongue and cryptic language seemed to put all the blame on the market.

Sure, it’s easy enough to just blame the market when your home doesn’t sell. Unlike the many home owners of the last few years, who were forced to make other plans when their homes did not sell, you are more likely aware of today’s general market conditions [than they were]. So listing your home without analyzing the data to plan and tailor your sale for your local market is just poor preparation on your part.

In today’s market, the primary sources of a non sale are either your agent and/or the listing price.

Did you know that many people do not interview more than one agent to list their home? According to the National Association of Realtors 2009 Profile of Home Buyers and Sellers (Realtor.org) forty percent of home owners chose a real estate agent who was referred to them, while twenty-four percent hired someone with whom they worked in the past.

Let’s face it, your decision to sell your home hinges on information provided to you by your agent. Because much of the market data is interpreted, there is a chance that you can be misinformed (or even malinformed) by any one real estate agent; for this reason, (in today’s market) it is essential to interview at least three agents to get an accurate picture of the neighborhood market, pricing and marketing strategy.

Our natural inclination is to hire the agent who promises us the highest price and with the greatest exposure. However, many experts recommend that before you make your decision, you should talk to several past clients of the agent you intend to hire to get a true picture of their professional abilities. Additionally, a current trend of agent passivity has affected many sellers; many agents have discontinued advertising and dropped open houses from their repertoires. The reality is that you need to get the most accurate and candid picture of your ability to sell without the agent’s salesmanship to get the listing.

Pricing a home has become much more technical because of variance in market conditions, seasonal trends, and home differences- while also keeping in step with frequent changes in lending and appraisal practices. When considering pricing, it’s important to review and compare several agents’ data. Although the point of pricing your home properly is one of the most important items to consider when selling a home today, so much has been written and said about it recently that that I won’t belabor the point. However, consider that if your home is over-priced, home buyers may become alienated because the list price is not in their range of competing homes.

Selling and marketing real estate in today’s environment has moved away from the “sales-y” approach by the ego-centered real estate agent, and evolved into relying on truthful and honest information. However, for those who fail to recognize the weaknesses of their home sale- just blame the market.

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 19, 2010. Using this article without permission is a violation of copyright laws. Copyright © 2010 Dan Krell

April 17, 2010July 25, 2019

Week in review: Stories grabbing attention

Stories that that are being talked about the week of April 12th

A word from Robert J Shiller about housing recovery (or not) http://www.nytimes.com/2010/04/11/business/economy/11view.html
Robert Shiller discusses market timing and housing appreciation and where the housing market is headed. (NY Times; “Don’t Bet the Farm on the Housing Recovery”)

Las Vegas junkets to view luxury real estate
http://www.luxuryhomesoflasvegas.com/las-vegas-luxury-real-estate-pr-03-23-2010.shtml
Luxury Homes of Las Vegas is now flying affluent clients for tours of the luxury homes in Las Vegas.

Chinese drywall judgment
http://www.housingwire.com/2010/04/12/judge-awards-2-6m-for-chinese-drywall-claims-with-little-chance-of-collection
A civil judgment in favor of plaintiffs in Chinese Drywall case. However, many experts feel that the judgment may not be enforced.

Luxury and exclusive communities hit hard by foreclosures
http://realestate.msn.com/article.aspx?cp-documentid=23875607>1=35006
The poor economy affects the wealthy. Some exclusive luxury communities have many foreclosures.

Senate panel inquiry into Washington Mutual cites fraud
http://www.washingtonpost.com/wp-dyn/content/article/2010/04/12/AR2010041204766.html
Wamu’s mortgage operations under fire by Senate pnael. (Washington Post; “Senate panel finds major fraud at Washington Mutual”)

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.