The number of foreclosure notices filed in February declined 14 percent compared with last month, and foreclosure notices dropped 27 percent compared to last year at this time. That marks the largest year-over-year decline that RealtyTrac, a foreclosure tracking site, has ever recorded.
The number of U.S. homes in some stage of foreclosure fell drastically last month, reaching a 36-month low, RealtyTrac reports.
Initial default notices, scheduled foreclosure auctions, and homes repossessed by lenders all dropped in February, RealtyTrac says.
"Allegations of improper foreclosure processing continued to dog the mortgage servicing industry and disrupt court dockets," says RealtyTrac CEO James Saccacio. "The industry is in the midst of a major overhaul that has severely restricted its capacity to process foreclosures.
Lenders repossessed 64,643 homes in February, a 17 percent drop from January.
Initial default notices dropped 16 percent from January — and 41 percent from a year ago. What’s more, foreclosure auctions dropped 10 percent from last month and 21 percent from February of last year, RealtyTrac said.
Rick Sharga, a senior vice president at RealtyTrac, says the real estate market isn’t out of the clear quite yet. He expects foreclosure activity to likely spike again as banks resolve foreclosure paperwork issues.
About 2 million households are in foreclosure proceedings. In addition, about 5 million borrowers are at least two months behind on their mortgage payments.
States With the Highest Foreclosure Rates
The states with the highest foreclosure rates for the month:
1. Nevada (which has held the No. 1 spot for 50 consecutive months, with one in every 119 households receiving a foreclosure notice)
2. Arizona (one in 222)
3. California (one in 239)
4. Utah
5. Idaho
6. Georgia
7. Michigan
8. Florida
9. Colorado
10. Hawaii
Friday, March 11, 2011
Many Buyers Lack Credit Score Knowledge
Some consumers lack the knowledge about credit scores, and most importantly, how you can boost it to get better deals on home loans or other type of loans.
A survey of 1,000 consumers conducted by Opinion Research asked consumers 22 questions about credit scores. On average, consumers got 60 percent of the questions right, revealing several gaps in credit score knowledge.
"They did not understand the financial cost of a low score," says Stephen Brobeck, executive director of the Consumer Federation of America, an association of nonprofit consumer organizations. For example, a person with bad credit trying to take a $20,000, 60-month car loan, might have to pay about $5,000 or more in interest than someone with a good credit score, according to a survey by the Consumer Federation of America and VantageScore Solutions.
Many consumers also didn’t know how to boost credit scores. One common myth, for example, is that paying cash is the only way to build a good credit score. However, the amount of available credit you have isn’t what hurts your credit score and borrowers are usually better served at keeping two or three credit cards open. A credit score factors in the amount of debt you carry in relation to that available credit — and how well you pay your bills on time that matters more to lenders, the Detroit Free Post reports.
Credit scores have been dropping nationwide due to economic hardship. About a quarter of customers — nearly 43.4 million — had a credit score of 599 or below, which is considered poor risk, and likely won’t qualify them for loans. Or, they’ll have to pay dearly for mortgages or car loans, according to FICO.
Consumers are entitled to a free copy of their credit reports once a year from each of the three nationwide credit-reporting companies. Visit www.annualcreditreport.com.
A survey of 1,000 consumers conducted by Opinion Research asked consumers 22 questions about credit scores. On average, consumers got 60 percent of the questions right, revealing several gaps in credit score knowledge.
"They did not understand the financial cost of a low score," says Stephen Brobeck, executive director of the Consumer Federation of America, an association of nonprofit consumer organizations. For example, a person with bad credit trying to take a $20,000, 60-month car loan, might have to pay about $5,000 or more in interest than someone with a good credit score, according to a survey by the Consumer Federation of America and VantageScore Solutions.
Many consumers also didn’t know how to boost credit scores. One common myth, for example, is that paying cash is the only way to build a good credit score. However, the amount of available credit you have isn’t what hurts your credit score and borrowers are usually better served at keeping two or three credit cards open. A credit score factors in the amount of debt you carry in relation to that available credit — and how well you pay your bills on time that matters more to lenders, the Detroit Free Post reports.
Credit scores have been dropping nationwide due to economic hardship. About a quarter of customers — nearly 43.4 million — had a credit score of 599 or below, which is considered poor risk, and likely won’t qualify them for loans. Or, they’ll have to pay dearly for mortgages or car loans, according to FICO.
Consumers are entitled to a free copy of their credit reports once a year from each of the three nationwide credit-reporting companies. Visit www.annualcreditreport.com.
Wednesday, March 9, 2011
Mortgage Purchase Activity at Highest of Year
Mortgage applications for purchases rose to their highest level of the year last week, the Mortgage Bankers Association reports. Purchase applications for mortgages increased 12.5 percent from one week earlier, and on an unadjusted basis, purchase application activity is the highest since last May.
“An improving job market is beginning to pave the way for an improving housing market,” says Michael Fratantoni, MBA's vice president of research and economics. “Additionally, mortgage interest rates remained below 5 percent for a second week, maintaining affordability for buyers and leading to an increase in refinance applications."
Refinancings also were on the rise last week, increasing 17.2 percent from one week prior. It was the highest the Refinance Index had been in over a month.
Overall, mortgage applications increased 15.5 percent on a seasonally adjusted basis for the week ending March 4, compared to one week prior, according to MBA.
Source: “Mortgage Applications Increase in Latest MBA Weekly Survey,” Mortgage Bankers Association (March 9, 2011)
“An improving job market is beginning to pave the way for an improving housing market,” says Michael Fratantoni, MBA's vice president of research and economics. “Additionally, mortgage interest rates remained below 5 percent for a second week, maintaining affordability for buyers and leading to an increase in refinance applications."
Refinancings also were on the rise last week, increasing 17.2 percent from one week prior. It was the highest the Refinance Index had been in over a month.
Overall, mortgage applications increased 15.5 percent on a seasonally adjusted basis for the week ending March 4, compared to one week prior, according to MBA.
Source: “Mortgage Applications Increase in Latest MBA Weekly Survey,” Mortgage Bankers Association (March 9, 2011)
Tuesday, March 8, 2011
Selective First-Time Buyers Can Miss Deals
Finding a "move-in ready" home was important to 87 percent of 300 first-time buyers recently polled by Coldwell Banker Real Estate. Some agents say first-timers are being more selective; and some are turning away from well-priced homes because they do not have granite countertops, they need a new carpet, or they have wall colors not to their liking.
Zillow says higher down payments and stricter underwriting standards mean today's buyers want to ensure their homes need few and inexpensive improvements.
Agents believe HGTV and other cable channels have made buyers more knowledgeable about home design, but some worry that such programming also has given buyers unrealistic expectations.
"You can't have the big yard, the top-line updates and all that in a starter home," says Cindy Westfall of Lake Oswego, Ore.-based Prudential NW Properties. "You've got to compromise somewhere or else you'll never buy anything."
Zillow says higher down payments and stricter underwriting standards mean today's buyers want to ensure their homes need few and inexpensive improvements.
Agents believe HGTV and other cable channels have made buyers more knowledgeable about home design, but some worry that such programming also has given buyers unrealistic expectations.
"You can't have the big yard, the top-line updates and all that in a starter home," says Cindy Westfall of Lake Oswego, Ore.-based Prudential NW Properties. "You've got to compromise somewhere or else you'll never buy anything."
Monday, March 7, 2011
Future of 30-Year Mortgages at Risk?
Proposals to phase out Fannie Mae and Freddie Mac may make 30-year fixed-rate mortgages harder to find, housing experts say.
An outline drafted by the Treasury Department, the Department of Housing and Urban Development, and the White House and circulated last month calls for winding down Fannie and Freddie over the next five to seven years. Congress continues to debate the future of Fannie and Freddie, and how and whether it should move to phase out the government-sponsored enterprises (GSEs). For its part, the Obama administration has argued for scrapping the GSEs, but replacing them with some form of federal involvement in mortgage financing.
But housing experts warn that 30-year fixed rate mortgages — a popular choice among buyers — might become harder to find and more expensive without Fannie and Freddie to buy these loans. Banks may be less willing to extend credit at a fixed rate over such a long term, housing experts note, since investors often prefer loans with adjustable rates rather than loans with longer terms, which expose them to interest rate risk.
“Traditionally, banks have been less willing to keep 30-year fixed-rate mortgages on their balance sheets, so in the absence of a vibrant securitization market, banks would more heavily favor adjustable-rate products,” John Mechem, a spokesman for the Mortgage Bankers Association, told The New York Times.
There is a lot of uncertainty about the process of phasing out Fannie and Freddie and how it will affect mortgage products, Barry Zigas, the director of housing policy at the Consumer Federation of America, told The New York Times.
Alex J. Pollock, a former chief executive of the Federal Home Loan Bank of Chicago, told The New York Times that he believes 30-year loans would remain available regardless of a federal guarantee, but they might be more difficult to find and lenders might require larger down payments and better credit scores.
“One of the reasons that American housing finance is in such bad shape right now is the 30-year mortgage,” Pollock argues. “For many people, it’s not at all clear that that’s the best product.”
An outline drafted by the Treasury Department, the Department of Housing and Urban Development, and the White House and circulated last month calls for winding down Fannie and Freddie over the next five to seven years. Congress continues to debate the future of Fannie and Freddie, and how and whether it should move to phase out the government-sponsored enterprises (GSEs). For its part, the Obama administration has argued for scrapping the GSEs, but replacing them with some form of federal involvement in mortgage financing.
But housing experts warn that 30-year fixed rate mortgages — a popular choice among buyers — might become harder to find and more expensive without Fannie and Freddie to buy these loans. Banks may be less willing to extend credit at a fixed rate over such a long term, housing experts note, since investors often prefer loans with adjustable rates rather than loans with longer terms, which expose them to interest rate risk.
“Traditionally, banks have been less willing to keep 30-year fixed-rate mortgages on their balance sheets, so in the absence of a vibrant securitization market, banks would more heavily favor adjustable-rate products,” John Mechem, a spokesman for the Mortgage Bankers Association, told The New York Times.
There is a lot of uncertainty about the process of phasing out Fannie and Freddie and how it will affect mortgage products, Barry Zigas, the director of housing policy at the Consumer Federation of America, told The New York Times.
Alex J. Pollock, a former chief executive of the Federal Home Loan Bank of Chicago, told The New York Times that he believes 30-year loans would remain available regardless of a federal guarantee, but they might be more difficult to find and lenders might require larger down payments and better credit scores.
“One of the reasons that American housing finance is in such bad shape right now is the 30-year mortgage,” Pollock argues. “For many people, it’s not at all clear that that’s the best product.”
Wednesday, March 2, 2011
Low Appraisals Jeopardize Deals, Just Happened to Me
Ten percent of real estate professionals say they’ve had sales canceled because appraisals came in below the price the buyer agreed to pay, according to a National Association of REALTORS® survey conducted in January. What’s more, another 15 percent say contracts had to be renegotiated because an appraisal came in too low.
Home builders say low appraisals are killing deals for them too. One-third of home builders say low appraisals have jeopardized sales for them (up from 26 percent in 2009), according to the National Association of Builders.
When appraisals come in low, sellers have to drop the sales price or buyers have to come with more cash, or the deal gets killed.
Appraisers and lenders say it’s not faulty valuation practices that cause low appraisals, but falling home prices. U.S. home prices are 30 percent below their 2006 peak during the housing boom.
Foreclosures and a new appraisal rule for lenders are other factors contributing to low appraisals, housing experts say. A new appraisal rule that went into effect in 2009 aims to lessen lenders’ ability to influence appraisers but has led to more outsourcing of appraisals to firms that may not be as familiar with the neighborhoods in that area.
"You get people from one end of the state appraising stuff in the other end," says Don Hammer, manager of Realty Executives in Paradise Valley, Ariz., who says half of all the canceled sales in his office have been appraisal related
Home builders say low appraisals are killing deals for them too. One-third of home builders say low appraisals have jeopardized sales for them (up from 26 percent in 2009), according to the National Association of Builders.
When appraisals come in low, sellers have to drop the sales price or buyers have to come with more cash, or the deal gets killed.
Appraisers and lenders say it’s not faulty valuation practices that cause low appraisals, but falling home prices. U.S. home prices are 30 percent below their 2006 peak during the housing boom.
Foreclosures and a new appraisal rule for lenders are other factors contributing to low appraisals, housing experts say. A new appraisal rule that went into effect in 2009 aims to lessen lenders’ ability to influence appraisers but has led to more outsourcing of appraisals to firms that may not be as familiar with the neighborhoods in that area.
"You get people from one end of the state appraising stuff in the other end," says Don Hammer, manager of Realty Executives in Paradise Valley, Ariz., who says half of all the canceled sales in his office have been appraisal related
Tuesday, March 1, 2011
More Americans Confident About Home Ownership
Americans are more confident about the stability of home prices than they were at the beginning of 2010, according to Fannie Mae's latest national housing survey, conducted between October 2010 and December 2010.. And when it comes to home ownership, younger Americans are particularly optimistic, the survey finds.
Nearly 80 percent of all respondents, including home owners and renters, surveyed said they thought housing prices would hold steady or increase over the next 12 months--which is up from 73 percent in January 2010. In fact, survey respondents expressed more confidence over the stability of home prices than they did about the overall strength of the economy. Sixty-one percent said the economy is heading on the wrong track.
Young Americans, Hispanics, and African-Americans were the most positive about their views on home ownership among the general population, according to the survey. Nearly 60 percent of Generation Y respondents (those between 18-34 years old) say that buying a home offers a lot of potential as an investment. Also, more than one-third of Hispanics and African Americans say they plan to buy a home within the next three years, compared to one in four of the general population.
“We are also seeing encouraging signs in the positive attitudes toward home ownership among younger Americans, despite the severe impact of the housing crisis on Generation Y,” says Doug Duncan, Fannie Mae’s chief economist. “But most respondents to our survey continue to lack confidence in the strength of the economic recovery, and they are less optimistic about their ability to buy a home in the years ahead. This sense of uncertainty is weighing on the housing recovery today and reshaping expectations for housing for the future.”
Nearly 80 percent of all respondents, including home owners and renters, surveyed said they thought housing prices would hold steady or increase over the next 12 months--which is up from 73 percent in January 2010. In fact, survey respondents expressed more confidence over the stability of home prices than they did about the overall strength of the economy. Sixty-one percent said the economy is heading on the wrong track.
Young Americans, Hispanics, and African-Americans were the most positive about their views on home ownership among the general population, according to the survey. Nearly 60 percent of Generation Y respondents (those between 18-34 years old) say that buying a home offers a lot of potential as an investment. Also, more than one-third of Hispanics and African Americans say they plan to buy a home within the next three years, compared to one in four of the general population.
“We are also seeing encouraging signs in the positive attitudes toward home ownership among younger Americans, despite the severe impact of the housing crisis on Generation Y,” says Doug Duncan, Fannie Mae’s chief economist. “But most respondents to our survey continue to lack confidence in the strength of the economic recovery, and they are less optimistic about their ability to buy a home in the years ahead. This sense of uncertainty is weighing on the housing recovery today and reshaping expectations for housing for the future.”
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