Jeff Helps Home Owners

For Buyers, There's a Silver Lining!

Tue, 10 May 2011 12:05:31 GMT

Brett Arends - Silver lining to housing storm

"Prices in many areas are now cheap. They have corrected a long
way since the bubble began to burst five years ago. Of course, it
depends on where you are. I'm still skeptical of the real-estate
markets that have held up best — prime stuff like Manhattan,
San Francisco or Beverly Hills. It's hard to get a deal there.
But in the places that have fallen the furthest, there are deals
aplenty. Zillow found only four metro areas in America that have
leveled out, or risen, lately. Notably, two of those are in
stricken Florida — Fort Myers and Sarasota. Have they fallen so
far they've hit bottom.

The second reason: There are tons of foreclosures and short sales
on the market. And there are plenty more sitting in the wings.
Banks are holding back big shadow inventories of homes. And that
means you can get a great deal. They have to sell. You don't have
to buy. You hold all the cards. Remember, the name of the game
isn't 'let's make a deal.' It's 'take it or leave it.'

Third, in many places rental yields are terrific. It's cheaper to
own than to rent. There have been some forced sales in my
building in Miami. Based on my math, the latest buyers have
bought condominium units for six times gross annual rents, and
maybe 12 times net rents. We're talking net yields of 7% or more.
And rents are rising, because so many former owners are now
renters.

The fourth reason I'm bullish is that you can get a very cheap
mortgage. Thirty-year conforming loans are going as low as 4.3%.
Throw in the tax break on the interest, and you are talking cheap
finance.

The fifth reason is that, as painful as this collapse has been,
real estate has historically proven to offer very good long-term
protection against inflation. Returns have typically averaged
about 1% or 2% above inflation. At a time when everyone has been
piling into gold, commodities and TIPS bonds to protect
themselves against the possibility of inflation, it seems odd
that the most popular and successful hedge, namely real estate,
goes a-begging. Thirty-year TIPS bonds are yielding just 1.6%
over inflation, and shorter-term bonds offer even lower returns.
Short-term TIPS are actually offering negative real yields.

The sixth reason I'm bullish is perverse, but I'm sticking by it.
Everyone else is bearish. You cannot find a real-estate bull
anywhere. No one wants to own this asset. No one wants to talk
about it. No one wants to hear about it. Everyone seems to agree
it's just going down, down, down — forever. They said much the
same about stocks in 1987, 2002 and 2009; Treasury bonds in 1982;
and gold in 2000. I cannot prove this is capitulation, but it
sure smells something like it. As ever, if you aren't
disciplined and patient, this probably isn't for you.

I have absolutely no idea when real estate is going to hit rock
bottom. It may take several years. I suspect it will do so in
different markets at different times. But there are good homes
out there going really cheap. If you hunt down the bargains,
you're disciplined about price, you get the right financing, and
you hold on for five years or more, you'll probably do pretty
well from here."

Jeff Wickum CPDE® SRES® ePRO®

Lifestyles Real Estate

(831) 419- 4130

www.SantaCruzShortSale.com

www.Wickum.com

Drowning In Negative Equity

Tue, 10 May 2011 12:00:54 GMT

Olick- Drowning in negative equity?

"If you have no desire or need to sell your home, then falling
home prices are just on paper and likely temporary, right?
Depends on how you look at it. Falling home prices put more
borrowers in a negative equity position, that is owing more on
their mortgage(s) than their homes are worth. We call that
'underwater,' and for good reason, because for some borrowers
that sense of drowning in debt has profound implications.

Today Zillow.com reported a new high in negative equity: 28.4% of
single family homes with a mortgage (remember, 32% of all
homeowners do not have a mortgage). That's a national average,
but the numbers are far worse in some of the nation's big metros.
Atlanta, for example, has a 55.7% negative equity rate. Denver,
41%, Chicago nearly 46%. This is on top of all the foreclosure
hot spots like Phoenix, where close to three quarters of all
borrowers are underwater.

'Higher rates of negative equity are creating a lot of latent
vulnerability in the housing stock, where if the household then
encounters some economic shock, like the loss of a job or divorce
or death, then that household is much, much more likely to go
into foreclosure,' notes Zillow's Stan Humphries. 'So it just
means that higher rates of negative equity, we’re going to see
elevated rates of foreclosure for the next two to three years.'
But higher rates of foreclosure put increasing pressure on home
prices, causing them to fall further, which in turn puts even
more borrowers underwater.

One begets the other begets the other. Humphries thinks this is a
bigger deal than the 'walkaway' issue (or strategic default);
that's where borrowers see no chance of ever having equity in
their homes, so they walk away rather than becoming permanent
pseudo-renters, responsible for the high cost of the home's
upkeep but reaping no equity benefit. 'The best research
that’s been done right now seems to suggest that negative
equity impact on strategic defaults really kicks in at very high
rates of value to loan ratio, so that means when people are more
like 30-40% underwater does it start to create proactive behavior
where they want to walk away from the mortgage. And even at those
rates of loan to values, you’re still seeing strategic defaults
be a relative…not a majority behavior,' says Humphries.

Well there are certainly plenty of large metro markets, as I
cited previously, where negative equity is that high. And here's
a little more food for thought: What about mobility? As the
economy improves, and we see those jobs numbers rise, as we did
last Friday, we have to consider the fact that many people taking
these jobs may be required to move for said jobs. Those same
borrowers may not be able to take the loss on the home that's
required to sell it. What then? What is the fate of the nation's
credit quality. It's already tough enough to get a good mortgage
when you have good credit. Home buyer confidence and demand are
the only remedies right now for the housing/foreclosure crisis.
Sadly, we have neither."

Jeff Wickum CPDE® SRES® ePRO®

Lifestyles Real Estate

(831) 419- 4130

www.SantaCruzShortSale.com

www.Wickum.com

Housing Price Gains Given Back

Tue, 29 Mar 2011 14:26:37 GMT

Home prices fall to 2009 levels

The S&P/Case-Shiller home price index covering 20 major markets fell 3.1% year-over-year, and was down 1% compared with December 2010. After rebounding nearly 7% off their post-bubble lows, prices have fallen more than 5% since July and are only 1.1% higher than the bottom set in April, 2009. "January brings us weakening home prices with no real hope in sight for the near future," says David M. Blitzer, a spokesman for S&P. The dismal report followed other negative housing market indicators recently. Sales of existing homes were off nearly 10% in February and new homes sales were at a record low. "The housing market recession is not yet over," said Blitzer, "and none of the statistics are indicating any form of sustained recovery. At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing."

Jeff Wickum CPDE® SRES® ePRO®

Lifestyles Real Estate

(831) 419- 4130

www.SantaCruzShortSale.com

www.Wickum.com

New Loan Mod Options Coming

Tue, 15 Mar 2011 00:15:30 GMT

More loan modification options coming

Six months after the Federal Housing Administration (FHA) announced an $11 billion refinancing initiative for these “underwater” borrowers, nearly two dozen lenders have agreed to take part in a new loan modification program. The FHA program — called Short Refi — requires major concessions from lenders, which must agree to write off at least 10 percent of the principal balance, and from investors, who, if they own the mortgage, must also agree to the deal. To qualify, homeowners must be current on their monthly mortgage payments and not already have an FHA loan. The size of the new primary loan cannot be more than 97.75 percent of the current value of the property; refinanced loans for homeowners whose properties carry second liens cannot exceed 15 percent of the property value.

The Department of Housing and Urban Development, which oversees the FHA, said this month that 23 lenders had signed on to the Short Refi program, though it will disclose only the names of the five lenders that have already restructured a total of 44 loans. They are: Wall Street Mortgage Bankers of Lake Success, N.Y.; 1st Alliance Lending of East Hartford, Conn.;Nationstar Mortgage of Lewisville, Tex.; E Mortgage Management of Haddon Township, N.J.; and Glacier Bank of Kalispell, Mont. HUD estimated that 500,000 to 1.5 million borrowers could be eligible for the program.

Even so, it faces challenges in Congress; on Thursday, the House of Representatives voted to end it. One mortgage expert, John Diiorio, the owner of 1st Alliance Lending, said that big banks were taking part behind the scenes, by referring homeowners to third-party lenders that could restructure their mortgages. He added that 1st Alliance had “several hundred FHA Short Refi” loans in the pipeline. Because the FHA announced the program only last September, and because such loans take three to four months from start to finish, Mr. Diiorio said, the number of refinanced loans should increase in coming months. He said that, on average, 1st Alliance had negotiated a principal reduction of $86,000 on a $256,000 loan, a 33.5 percent cut, to $170,000.

But he said lenders and investors had agreed to reduce principal for only half of the loans he had worked on. The refinanced borrower, Mr. Diiorio said, had to pay a slightly higher fixed rate, typically 6 or so percent. But he added that the financial impact was the same as a 5 percent rate on a higher-balance loan of $100,000, with less principal forgiven. “It seems counterintuitive,” he said, “but the economics work both for the consumer and for the lender.”

Jeff Wickum CPDE® SRES® ePRO®

Lifestyles Real Estate

(831) 419- 4130

www.SantaCruzShortSale.com

www.Wickum.com

Foreclosures Up, Delinquencies Down

Wed, 23 Feb 2011 15:19:06 GMT

MBA - foreclosures up delinquencies down

The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 8.22% of all loans outstanding as of the end of the fourth quarter of 2010, a decrease of 91 basis points from the third quarter of 2010, and a decrease of 125 basis points from one year ago, according to the Mortgage Bankers Association's (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate decreased 46 basis points to 8.93% this quarter from 9.39% last quarter. The percentage of loans on which foreclosure actions were started during the fourth quarter was 1.27%, down seven basis points from last quarter and up seven basis points from one year ago. The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure.

The percentage of loans in the foreclosure process at the end of the fourth quarter was 4.63%, up 24 basis points from the third quarter of 2010 and up five basis points from one year ago. The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 8.57%, a decrease of 13 basis points from last quarter, and a decrease of 110 basis points from the fourth quarter of last year. The combined percentage of loans in foreclosure or at least one payment past due was 13.56% on a non-seasonally adjusted basis, a 22 basis point decline from 13.78% last quarter.

Jay Brinkmann, MBA's chief economist said "These latest delinquency numbers represent significant, across the board decreases in mortgage delinquency rates in the US. Total delinquencies, which exclude loans in the process of foreclosure, are now at their lowest level since the end of 2008. Mortgages only one payment past due are now at the lowest level since the end of 2007, the very beginning of the recession. Perhaps most importantly, loans three payments (90 days) or more past due have fallen from an all-time high delinquency rate of 5.02% at the end of the first quarter of 2010 to 3.63% at the end of the fourth quarter of 2010, a drop of 139 basis points or almost 28% over the course of the year. Every state but two saw a drop in the 90-plus day delinquency rate and the two increases were negligible."

"While delinquency and foreclosure rates are still well above historical norms, we have clearly turned the corner. Despite continued high levels of unemployment, the economy did add over 1.2 million private sector jobs during 2010 and, after remaining stubbornly high during the first half of 2010, first time claims for unemployment insurance fell during the second half of the year. Absent a significant economic reversal, the delinquency picture should continue to improve during 2011, Brinkmann said.

Mike Fratantoni, MBA's vice president for single family research said "While the foreclosure starts rate fell during the fourth quarter, the percentage of loans in foreclosure rose to equal the all-time high. The foreclosure inventory rate captures loans from the point of the foreclosure referral to exit from the foreclosure process, either through a cure (perhaps through a modification), a short sale or deed in lieu, or through a foreclosure sale. As we predicted last quarter, the percentage of loans in the foreclosure process increased in the fourth quarter, largely due to the foreclosure paperwork issues that were being addressed in September and October. These issues caused a temporary halt in foreclosure sales, particularly in states with judicial foreclosure regimes, such as New Jersey, Florida, and Illinois.

With fewer loans exiting the foreclosure process through sales, the foreclosure inventory rate naturally increased, even as fewer foreclosure starts meant that fewer loans entered the foreclosure process in the fourth quarter." "The share of loans in foreclosure in California and Florida combined was 36.0%, a decrease from 37.3% in the third quarter, and 39.3% a year ago. Over 24% of the loans in Florida are one payment or more past due or in the process of foreclosure, the highest rate in the nation, followed by Nevada at over 22%, compared to an average of 13.6% for the nation. Only eleven states saw an increase in their foreclosure start rate with Maryland seeing the largest increase."

On a seasonally adjusted basis, the overall delinquency rate decreased for all loan types. The seasonally adjusted delinquency rate stood at 4.51% for prime fixed loans, 11.23% for prime ARM loans, 21.26% for subprime fixed loans, 25.32% for subprime ARM loans, 12.26% for FHA loans, and 6.67% for VA loans. The% of loans in foreclosure, also known as the foreclosure inventory rate, increased 24 basis points to 4.63%, which ties the survey's record high, last reached in the first quarter of 2010. All loan types saw an increase in the% of loans in foreclosure. The foreclosure inventory rate for prime fixed loans, which, make up the largest portion of the survey (accounting for 63% of the loans), increased 22 basis points to 2.67%.

This was the highest rate recorded for prime fixed in the history of the survey. The rate for prime ARM loans increased 17 basis points from last quarter to 10.22%. Subprime fixed loans saw an increase of 104 basis points to 9.92%, which is a new record high in the survey. The rate for subprime ARM loans increased 26 basis points to 22.04%, while the rate for FHA loans increased eight basis points to 3.30% and the rate for VA loans increased 21 basis points to 2.35%.

The foreclosure starts rate decreased nine basis points for prime fixed loans to 0.84%, five basis points for subprime fixed loans to 2.73%, and 22 basis points for FHA loans to 1.02%. The foreclosure starts rate increased two basis points for prime ARM loans to 2.38%, 15 basis points for subprime ARM loans to 4.24%, and two basis points for VA loans to 0.88%. Given the challenges in interpreting the true seasonal effects in these data when comparing quarter to quarter changes, it is important to highlight the year over year changes of the non-seasonally adjusted results. The non-seasonally adjusted delinquency rate decreased for all loan types since the fourth quarter of 2009. The delinquency rate decreased 135 basis points for prime fixed loans, 124 basis points for prime ARM loans, 284 basis points for subprime fixed loans, 152 basis points for subprime ARM loans, 154 basis points for FHA loans, and 91 basis points for VA loans.

The non-seasonally adjusted foreclosure starts rate increased 21 basis points for prime fixed loans, 26 basis points for prime ARM loans, and seven basis points for VA loans, but is down 47 basis points for subprime ARM loans, 26 basis points for FHA loans, and remains unchanged for subprime fixed loans on a year over year basis. Forty five states saw increases in the rate of foreclosure starts on a year over year basis, with the largest increases coming in Washington, Rhode Island and the District of Columbia. The largest decreases were in Florida, Connecticut, and Maryland. Nevada and Arizona top the rankings in terms of foreclosure starts and loans in foreclosure across most loan types.

Bernanke worries about a cash bubble

Speaking in Paris to a Bank of France conference, Federal Reserve Chairman Ben Bernanke said the uneven flow of funds into the United States from 2003 to 2007 was one of the key factors that led to the meltdown in financial markets in 2008. He did not say the current flow of capital poses a threat of that magnitude. But he warned that while the global financial crisis is receding, "capital flows are once again posing some notable challenges for international macroeconomic and financial stability." He did not specify specific nations by name in his brief remarks, but he appeared to be referring to the continued large investment in U.S. assets by China. He argued that countries with large trade surpluses must do more to let their exchange rates be set by markets rather than intervening to keep their currencies low.

He added that nations with large trade gaps must increase national savings by cutting large budget deficits. But Bernanke said the collapse that followed the inflating of the housing bubble was not the fault of countries that flooded the United States with cash. Instead, he blamed the United States, saying "the primary cause of the breakdown was the poor performance of the financial system and financial regulation in the country receiving the capital inflows, not the inflows themselves."

Jeff Wickum CPDE® SRES® ePRO®

Lifestyles Real Estate

(831) 419- 4130

www.SantaCruzShortSale.com

www.Wickum.com

Delinquencies Down

Wed, 23 Feb 2011 15:17:40 GMT

Olick - delinquencies turn a corner

"Fewer Americans are falling behind on their mortgage payments; in fact, the fewest in two years. Mortgages just one payment past due (30 days) fell to their lowest level since just before the recession began. Is it delays in paperwork from the so called 'robo-signing' (faulty paperwork) foreclosure servicing scandal? No. It's actual fundamentals in the economy and the mortgage market. Go figure. As we got toward the end of 2010 we began to see another drop in weekly claims for unemployment insurance. I think that's a key driver of the short term delinquencies,' notes Jay Brinkmann, chief economist at the Mortgage Bankers Association. But even more significant is the improved underwriting that began after the mortgage market crashed. 'The loans that are in the system now on average are better quality than what was in there before,' says Brinkmann, who explains that loans usually go bad in the first three years of life.

We're now past the delinquency peak on loans that were underwritten during the worst, headiest phase of the housing boom in 2006 and 2007. 'These new loans are less likely to go bad,' Brinkmann adds. The national delinquency rate fell 10% in the fourth quarter of last year to 8.22%, according to the Mortgage Bankers Association's latest survey. That's still high by historical standards, but it's a huge improvement. It's also good to see that the FHA delinquency rate improved slightly, from 12.62% to 12.26% (also still high). The biggest issue going forward is not new delinquencies, but the huge pipeline of loans already in the foreclosure process. It stands at 4.63%, tying the survey's record high. This is due to foreclosure paperwork issues that have stalled the process, especially in the key state of Florida, where nearly one quarter of all mortgages are either delinquent or in foreclosure.

"With fewer loans exiting the foreclosure process through sales, the foreclosure inventory rate naturally increased, even as fewer foreclosure starts meant that fewer loans entered the foreclosure process in the fourth quarter,' says the MBA's Michael Fratantoni. As these foreclosures do make it through the process, and most will, they will put additional pressure on home prices, but for those of you with the long view, the drop in new delinquencies does present a glimmer of hope, perhaps a light at the end of the tunnel."

Jeff Wickum CPDE® SRES® ePRO®

Lifestyles Real Estate

(831) 419- 4130

www.SantaCruzShortSale.com

www.Wickum.com

HAFA update video

Wed, 23 Feb 2011 15:12:44 GMT

Here's a HAFA update video from AssettPlanUSA. Enjoy:

View Our HAFA Update Video

Jeff Wickum CPDE® SRES® ePRO®

Lifestyles Real Estate

(831) 419- 4130

www.SantaCruzShortSale.com

www.Wickum.com

Foreclosures Slowing... NOT!

Fri, 11 Feb 2011 02:39:31 GMT

Foreclosures falling... not!

The number of homes receiving foreclosure filings, default notices, auctions, and repossessions, fell 17% in January compared to a year earlier, RealtyTrac reported today. But that's still 261,333 properties and a 1% increase compared to December. Even with the slowdown, more than 78,000 borrowers lost their homes in January, easing off the record 102,000 that was reached last September. Besides, it's less a sign of a robust housing recovery and more a sign that lenders have become bogged down in reviewing procedures, resubmitting paperwork and formulating legal arguments related to accusations of improper foreclosure processing.

"We expect a spike in the first quarter," said Rick Sharga, a RealtyTrac spokesman. "If we don't get that, it could mean that the foreclosures are being pushed back even more and that the time needed for recovery will be prolonged." There was a bit of a shakeup among the individual states at the top of RealtyTrac's hardest-hit states. Florida, which had been outpacing all others for years, fell to ninth place in January, with a rate of one in ever 409 homes receiving a filing. Year-over-year, filings are off by 54% in the Sunshine State. Now, the seven states with the highest rate of foreclosure filings in January were all in non-judicial states, where foreclosure auctions can be scheduled and homes repossessed without any court hearing. Nevada led the states for the 49th consecutive month; Arizona was second and California third. Idaho and Utah filled out the top five worst-hit states. Among metro areas of more than 200,000 residents, Las Vegas had, as usual, the highest
foreclosure rate.

Jeff Wickum CPDE® SRES® ePRO®

Lifestyles Real Estate

(831) 419- 4130

www.SantaCruzShortSale.com

www.Wickum.com

Home Affordability at "pre-boom" Prices

Fri, 11 Feb 2011 02:08:18 GMT

WSJ - home affordability at pre-boom prices

Data provided by Moody's Analytics track the ratio of median home prices to annual household incomes in 74 markets. By that measure, housing affordability at the end of September had returned to or surpassed the average reached between 1989-2003 in 47 of those markets. Most economists believe the housing boom took off in 2003. Nationally, the ratio of home prices to annual household income reached a peak of 2.3 in late 2005. But by last September, it had fallen to 1.6, matching the lowest level in the 35 years the data have been collected and well below the historical average of 1.9 between 1989 and 2003. "Based on incomes, this is as affordable as it gets," said Mark Zandi, chief economist at Moody's Analytics. "If you can get a loan, these are pretty good times to buy."

Measuring home prices relative to income is not the only way economists calculate housing affordability. They also examine the relationship between house prices and rents. Measured by the price-to-rent ratio—the price of a typical home divided by the annual cost of renting that home—prices are fairly valued, or undervalued, in around 20 markets. Nationally, the price-to-rent ratio stood at 14.85 at the end of September, above the 1989-2003 average of 12. The data suggest pockets of the country have further to fall. Home prices still remain overvalued by both measures in several markets, including Seattle, Charlotte, New York and Portland, Ore. Based on rents, "it's still not a slam dunk to buy" in those markets, said Mr. Zandi. He said markets appeared most overvalued in the Pacific Northwest, which was among the last regions to enter the housing downturn.

Historical measures also showed prices were still high along the Northeast corridor from Baltimore to Boston. Of the 74 housing markets, Baltimore appeared to be the most overvalued. By contrast, prices in Cleveland, the most undervalued market, have returned to 1991 levels based on the price-to-rent ratio. Historical measures comparing rents and incomes with home prices provide a useful gauge of affordability, but can be imperfect at measuring how close different markets are to recovering from a bubble.

Jeff Wickum CPDE® SRES® ePRO®

Lifestyles Real Estate

(831) 419- 4130

www.SantaCruzShortSale.com

www.Wickum.com

Housing Recovery a Year Away?

Fri, 04 Feb 2011 16:49:38 GMT

Housing recovery a year away?

According to Bank of America Merrill Lynch (BOAML) strategists, the nadir for home prices appears to be still more than a year away. "Currently, our view is toward the benign side relative to the market’s expectations, we think," BOAML strategists wrote in a nonagency MBS Research Alert. Chris Flanagan, Ryan Asato and Timothy Isgro said their model calls for home prices reaching a bottom in the second quarter of 2012. The analysts expect the Standard & Poor's Case Shiller home price index to fall another 4.1% from its third-quarter level. They said the index is down 3.4% from its June peak and not far off its low in May 2009. The BOAML strategists believe there's "evidence that home buyer outlook for prices is correlated to subsequent short-term home price movements."

The homebuyer outlook data is gathered in the monthly survey by the National Association of Realtors (NAR). The data implies the Case-Shiller index for the largest 20 metropolitan areas of the country will bottom out in January at 5.6% lower than the June peak. The index will then start climbing in February, according to Flanagan, Asato and Isgro. "We think the December reversal in buyer outlook is a positive short-term sign for housing," they said. "It is commensurate with the broader increase in consumer confidence and also provides a measure of support for the price increase in nonagency MBS since the start of the year."

Jeff Wickum CPDE® SRES® ePRO®

Lifestyles Real Estate

(831) 419- 4130

www.SantaCruzShortSale.com

www.Wickum.com

Home Prices Drop, Consumer Confidence Up

Wed, 26 Jan 2011 01:21:40 GMT

Home prices fall

The S&P/Case-Shiller index of home values in 20 cities fell 1.6% from November 2009, the biggest 12-month decrease since December 2009, according to the median forecast of 26 economists surveyed by Bloomberg News. Another report may show consumer confidence rose in January, extending a see-saw pattern of gains and losses since the recession ended in June 2009. Mounting foreclosures will probably throw more properties on the market this year, further depressing prices, homeowners’ equity and construction. The lack of a sustained housing rebound and unemployment above 9% are among reasons the Federal Reserve may announce this week it’ll complete a second round of stimulus that will pump $600 billion into the economy by June. “The large overhang of unsold houses will weigh on prices,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. “Housing is lagging the economic recovery. It is one factor encouraging the Fed to remain on the sidelines.”
The S&P/Case-Shiller index, based on a three-month average, is due at 9 a.m. New York time. Survey estimates ranged from declines of 2.1% to 0.1%, after a 0.8% drop in October. The New York-based Conference Board’s consumer confidence gauge, due at 10 a.m., rose to 54 from 52.5 in December, according to the survey median. Estimates ranged from 50 to 57.3.

Consumer confidence up

The Consumer Confidence Index rose to 60.6 in January, up from an upwardly revised 53.3 in December, the Conference Board, a New York-based research group that compiles the index, said Tuesday. Economists surveyed by Briefing.com were expecting the index to increase to 53.5. "Consumers have begun the year in better spirits," said Lynn Franco, director of The Conference Board Consumer Research Center. "Consumers rated business and labor market conditions more favorably and expressed greater confidence that the economy will continue to expand and generate more jobs in the months ahead." The figure, which is based on a survey of 5,000 U.S. households, is closely watched because consumer spending makes up two-thirds of the nation's economic activity.

Jeff Wickum CPDE® SRES® ePRO®

Lifestyles Real Estate

(831) 419- 4130

www.SantaCruzShortSale.com

www.Wickum.com

Lenders To Destroy Original Loan Docs?!

Wed, 26 Jan 2011 01:15:40 GMT

Lenders to destroy documents?

Federal bankruptcy judges in Delaware are due to hold separate hearings Monday on requests by two defunct subprime mortgage lenders to destroy thousands of boxes of original loan documents. The requests, by trustees liquidating Mortgage Lenders Network USA and American Home Mortgage, come despite intense concerns that paperwork critical to foreclosures and securitized investments may be lost. A series of recent court rulings have increased the importance of original loan documents, holding that they are essential for investors to prove ownership of mortgages and to have the right to foreclose. In the Mortgage Lenders case, the U.S. Attorney in Delaware has formally objected to the requested destruction because loss of the records "threatens to impair federal law enforcement efforts." The former subprime lender shut down in February 2007.

In a Jan. 6, 2010, motion, Neil Luria, the liquidating trustee, asked Bankruptcy Judge Peter J. Walsh for permission to destroy nearly 18,000 boxes of records now warehoused by document storage company Iron Mountain. In the American Home Mortgage case, the liquidating trustee, Steven Sass, has asked Bankruptcy Judge Christopher Sontchi to approve destruction of 4,100 boxes of loan documents stored in a dank parking garage beneath the company's former headquarters in Melville, Long Island. AHM had been one of the biggest originators of subprime loans until it abruptly collapsed and closed in August 2007.

The boxes are the last still held by AHM. Sass stated that the local fire marshal wants the documents removed as a fire hazard, and he said the cost of moving them would be prohibitive. In accordance with a 2009 court order, the bankrupt company earlier had destroyed the contents of thousands of other boxes after banks and other loan servicers had been given a chance to request and pick up particular files. The issue of document destruction is sensitive because in recent months evidence has turned up that vast numbers of original loan documents by major lenders were never transferred as required when the mortgages were securitized and sold to investors. Lawyers for homeowners have strongly objected to AHM's document destruction, contending that vital evidence borrowers need to defend themselves in foreclosure cases will be lost.

Jeff Wickum CPDE® SRES® ePRO®

Lifestyles Real Estate

(831) 419- 4130

www.SantaCruzShortSale.com

www.Wickum.com

California Declares Fiscal Emergency!

Fri, 21 Jan 2011 16:25:22 GMT

California hits fiscal emergency

Jerry Brown, California’s Democratic governor, declared a state of fiscal emergency on Thursday for the government of the most populous US state to press lawmakers to tackle its $25.4 billion budget gap. Brown’s declaration follows a similar one made last month by his predecessor Arnold Schwarzenegger, the former Republican governor. Democrats who control the legislature declined to act on Schwarzenegger’s declaration, saying they would instead wait to work on budget matters with Brown. Brown has presented lawmakers with a plan to balance the state’s books with $12.5 billion in spending cuts and revenue from tax extensions that voters must first approve. His fiscal emergency declaration is meant to underscore that target, an official said.

Brown’s declaration, which is largely procedural, says it affirms Schwarzenegger’s December declaration, giving lawmakers 45 days to address the state’s fiscal troubles. The 72-year-old governor also wants the legislature to back a ballot measure for a special election in June that would ask voters to extend tax increases expiring this year to help fill the state budget’s shortfall. Brown needs a handful of Republican votes to put the measure to voters. Republican leaders in the legislature have said they doubt those votes will come.

Jeff Wickum CPDE® SRES® ePRO®

Lifestyles Real Estate

(831) 419- 4130

www.SantaCruzShortSale.com

www.Wickum.com

HAFA (non-GSE) Program Update- by Ray Mathoda

Wed, 19 Jan 2011 03:06:23 GMT

Non-GSE Program Update (Expansion of Guidelines)

Ray Mathoda is pleased to share that we have been actively soliciting and hearing your feedback on the HAFA program and she has been in continued discussions with federal policy makers since the program was launched in mid-2010 regarding critically needed further enhancements to the program. Many of our recommendations were recently adopted into the non-GSE HAFA program on December 28th, 2010. These changes are effective on a mandatory basis starting February 1, 2011.

We will be sharing a detailed update on the program changes with all Certified HAFA Specialists shortly... but in the meantime, here's a quick summary FYI:

Monthly Gross Income. Servicers are no longer required to verify that the borrowers' mortgage payment is more than 31% of their currently monthly gross income. Now, as long as a borrower as documented financial hardship (via an RMA or signed Hardship Affidavit) they can be eligible for the program;
Vacant Properties. Properties that have been vacant up to 12 months are now eligible for the non-GSE program (as long as there is documentation that the property was the borrower's primary residence and they have not purchased another 1-4 unit property in the prior 12 months);
Subordinate Lien Payoffs. Treasury has removed the 6% cap on subordinate lien payoffs by first lien holders. Now there is just the $6,000 cap on subordinate lien payoff;
Borrower as Renter. The program has been expanded to allow (and pay incentives on) Servicer created deed-for-lease programs... with or without the potential for repurchase of the property by the borrower/seller at a later date.
Key Servicer Response Timeframe Gaps Filled. There were 2 key "gaps" in mandated servicer response times... which were creating significant back-logs and delays on HAFA transactions. Both of these major gaps are now filled: Servicers must provide borrowers an SSA within 30 days of the borrower's expression of interest in the program AND Servicers must make a decision on ARASS transactions (with an approval, disapproval or counter-offer) within 30 days!

If you'd like to read the full new Treasury directive (it's not very long), click here: Supplemental Directive 10-18

Jeff Wickum CPDE® SRES® ePRO®

Lifestyles Real Estate

(831) 419- 4130

www.SantaCruzShortSale.com

www.Wickum.com

Surge in REO Inventory Coming

Sat, 15 Jan 2011 02:14:36 GMT

CNBC's Olick - the foreclosure dump

"It's coming, no question. [Yesterday's] report from RealtyTrac serves as a warning to big banks, Fannie, Freddie and local communities; The foreclosure glut is coming, and they'd better be ready to get rid of that glut in a big way. 2010 saw a record number of bank repossessions, over a million, even with a big drop in volume toward the end of the year, thanks to the robo-signing scandal and ensuing foreclosure freezes. 'Early indications in January were that this robo-signing related delay will be over by the end of first quarter if not sooner,' says RealtyTrac's Rick Sharga. 'I think we're going to see a significant spike in foreclosure activity early in 2011, and that will contribute in part to 2011 being a record year.' Sharga estimates as many as a quarter of a million foreclosures that should have happened in 2010 will now be pushed into the 2011 numbers, and added to an already huge supply of bank owned properties.

The four biggest banks already have close to $7 billion worth of foreclosed properties (REO) on their books, and Fannie and Freddie have about $24 billion collectively. While REO sales make up about one third of all sales in the current market, there is an estimated 3 year supply. There are obviously many incentives to buy REO's, number one being the price discount, as well as some other programs offered by the government; but there are a lot more downsides. Just today I read an article in the Wall Street Journal of witches in Salem being hired to remove the negative spirits from foreclosed homes. Other similar burgeoning businesses include Feng Shui experts, etc. There's always somebody ready to profit from distress. HousingWire today reports on a study by Field Asset Services that finds rehabbed REOs spend five fewer months on the market, 69 days compared to 222 days. Many investors buy foreclosures and do the rehab themselves, but for regular home buyers, clearly having the home renovated, with no sign of the preceding trouble, is a huge added value.

Through its Neighborhood stabilization Program, the Department of Housing and Urban Development has provided $7 billion in grants to local governments and nonprofits; that money can be used to rehab foreclosed properties, or, to bulldoze them. I also know there have been many discussions brewing within the government and at the banks with hedge funds looking to buy up bulk foreclosures. So far no big deals we know of, but they're coming for sure. The government may even be considering incentives to get more investors to buy foreclosures, which I blogged about last month. As the numbers mount, the GSE's and the banks will have to put more resources into unloading these properties, especially as new Spring organic housing supply comes on the market. If they choose to slash prices even more, the dip in overall home prices may fall deeper than expected."

Jeff Wickum CPDE® SRES® ePRO®

Lifestyles Real Estate

(831) 419- 4130

www.SantaCruzShortSale.com

www.Wickum.com

More Government Blunders w/ Handling of USDA Loans

Sat, 15 Jan 2011 02:10:06 GMT

Rural defaults rise

Seeking to buoy a strained rural economy in the midst of the recession, the then-Democrat dominated Congress ordered up a huge increase in federal mortgage guarantees for small-town home buyers as part of the 2009 economic stimulus package. A newly released audit has found that the rural loan program, administered by the United States Department of Agriculture (USDA), was plagued by lax government oversight and many of the same sloppy banking practices that fed the broader mortgage debacle. Although the auditors looked at only a tiny sample of the 133,053 loan guarantees made in 2009, they estimated that tens of thousands might have been done improperly and warned that a wave of defaults might be looming.

Analysts said the problems echoed those exposed earlier in the mortgage crisis, with banks seemingly eager to collect fees for loans in which they retained little or no risk. The audit estimated that more than 10% of the loans made possible through the program might have been to borrowers who were not eligible because they did not meet the minimum financial requirements and might not have had the means to pay them back. In many instances, lenders improperly calculated income figures for borrowers. The audit, released last week by the office of the USDA inspector general, Phyllis K. Fong, also found that USDA officials failed to detect the errors. The report did not say whether any lenders appeared to have intentionally skirted the rules. “In a couple years, when these loans are going bad, everybody’s going to say, ‘Oh me, oh my, how did this happen?’ ” said Christopher Whalen, managing director of Institutional Risk Analytics, a bank rating and consulting firm.
“There’s no surprises here.”

Jeff Wickum CPDE® SRES® ePRO®

Lifestyles Real Estate

(831) 419- 4130

www.SantaCruzShortSale.com

www.Wickum.com

Should You Wait For "Market Recovery"?

Fri, 07 Jan 2011 17:15:03 GMT

Market Recovery Outlook

According to Celia Chen, a housing market analyst for Moody's Analytics, housing will take a long time to recover in some cities. That's bad news for current homeowners with mortgages but not for investors. And predictions can easily be off by many years as conditions change. Having said that, Chen says there are some new competitors for the title of America's most depressed real estate market. These are not old Rust Belt post-industrial cities, where the manufacturing economy vanished years ago; these cities were flourishing as recently as 2005. But they got crushed by the housing bubble, and most won't recover from the damage until at least 2030. Chen estimates that Las Vegas home prices won't return to their pre-recession peak until after 2032; in Phoenix, the rebound will take until 2034; and Salinas, Calif., and Naples, Fla., won't come back until sometime around 2038.

And these are nominal prices: Inflation-adjusted recovery will take even longer. Many on the list of cities where the recovery will take the longest had tied their fortunes to home building. The bust has put such a hurt on that industry that the cities are now stagnating. A case in point is Stockton, Calif., where prices soared 230% from 1980 to 2006 because residents of the Bay Area, unable to afford pricey San Francisco, purchased homes there. "People moved farther and farther out to less expensive markets," said Chen. Once the bubble burst, that all ended. Some homeowners got tired of the commute. Investors stopped coming. Foreclosures piled up and added to inventory. Prices fell and fell faster.

Now prices are only 9% higher than in 1980 and about the same as they are in Detroit. For non-bubble markets, the damage was usually much less severe. Cities such as Pittsburgh, Syracuse and Rochester, N.Y., Clarksville, Tenn., and Spokane, Wash. will be back to their peaks within three years or so, Chen said. Many of the larger, older metro areas that saw moderate or even fairly high home price appreciation during the boom years will recover faster than the bubble markets but slower than the steady-eddie ones. Washington will return to peak by around 2025, Chen said. Boston and Chicago will recover by about 2019, and New York by 2021. "Nationally, we expect U.S. [home prices] to recover by 2021," said Chen.

Jeff Wickum CPDE® SRES® ePRO®

Lifestyles Real Estate

(831) 419- 4130

www.SantaCruzShortSale.com

www.Wickum.com

Home Prices dropped another 4.1% in 2010

Thu, 06 Jan 2011 16:53:34 GMT

Home Prices dropped another 4.1% in 2010

U.S. home prices were turbulent through 2010 ending up 4.1% lower than the year before, according to analytics firm Clear Capital. And prices are expected to fall another 3.6% over 2011. The homebuyer tax credit proved an artificial boost to home prices, which tapered off nearly as soon as it expired in April. The period immediately after created probably the most volatile year of home prices in history, the report claims. Values declined 5.3% over the first 12 weeks of the year, only to spike 9.7% through mid August. But when the market left the summer months, prices dipped right back down another 9.4%. "In terms of home prices, this past year has certainly been characterized by uncertainty,” Alex Villacorta, senior statistician at Clear Capital, said. "Tax incentives and high levels of distressed sale activity had counter effects on home prices which contributed to the fragility of the markets."

At least the decline in 2011 will be a smooth one. "The wild spikes experienced in 2010 will likely be replaced with more gradual price trends this year. Price forecasts show varying levels of decline across all four regions in 2011, with local markets in the West expected to accumulate the largest overall losses," according to the Clear Capital report. Prices fell in 70% of the major markets in the U.S, and half experienced double-digit drops. Those were Dayton and Columbus, Ohio; Milwaukee, Wisc.; Tucson, Ariz.; and New Haven, Connecticut; Jacksonville, Fla.; Virginia Beach and Richmond, Va. In Dayton, prices fell more than 22% from the year before. 2011 doesn't look much better for these markets. Clear Capital expects all but Columbus and Milwaukee to experience double-digit declines again. But some markets such as Washington, D.C. and Houston, Texas are expected to see brighter improvements.

Jeff Wickum CPDE® SRES® ePRO®

Lifestyles Real Estate

(831) 419- 4130

www.SantaCruzShortSale.com

www.Wickum.com

Administration: Foreclosures Must Go On...

Thu, 18 Nov 2010 02:04:00 GMT

Administration: FORECLOSURES MUST GO ON

A year ago, officials focused on stemming the foreclosure tide. Now they are touting the need for foreclosures to rebuild the housing market. Last week Phyllis Caldwell, head of the Treasury Department's Homeownership Preservation Office, told a congressional panel that "an important part of ensuring longer-term stability in the market is to enable properties to be resold to families who can afford to purchase them." And White House Press Secretary Robert Gibbs last month told reporters that without sales of homes in distressed areas the "recovery in the housing market stops. It's frozen." The shift in rhetoric signals the Obama administration is recognizing that its loan modification program is foundering, experts said. Also, it is acknowledging that banks must address their swelling ranks of delinquent loans. they have called for reviews into the institutions' foreclosure policies and procedures, stressing that servicers must comply with the law.

But they also now acknowledge more vocally that foreclosures must continue for a normal housing market to return. And that, in part, is why the administration is not supporting a nationwide foreclosure freeze despite the paperwork scandal that is roiling the mortgage industry. The new tone eminating from the White House also recognizes that the modification program is not living up to its initial goals of helping up to 4 million people avoid foreclosure. Some 496,000 distressed borrowers have received long-term modifications through September. Officials are "trying to soften everybody up" to the fact that foreclosures are necessary, said Guy Cecela, publisher of Inside Mortgage Finance, an industry newsletter.

Jeff Wickum CPDE® SRES® ePRO®

Lifestyles Real Estate

(831) 419- 4130

www.FreeShortSaleOptions.com

www.Wickum.com

Americans worried about making mortgage, rent payments

Thu, 18 Nov 2010 01:28:32 GMT

Americans worried about making mortgage, rent payments

More than half of Americans are worried about not having enough money to pay their mortgage or rent, according to a survey recently released by the Washington Post.

A third of respondents were "very concerned" about their ability to make housing payments, while a fifth were "somewhat concerned," adding up to 53 percent of respondents. This contrasts with the results of similar surveys the newspaper conducted in February 2009 and December 2008. In the 2008 survey, 37 percent of respondents said they were at least "somewhat concerned" about making their housing payments -- by February 2009, that figure had risen to 46 percent.

Those with household incomes lower than $30,000 were twice as likely to be worried as those with incomes of $75,000 or more, according to the survey.

Despite concerns about the economy, the majority of respondents, 61 percent, said that now is a good time to buy a home. Nearly 30 percent said it is a bad time to buy, and 10 percent had no opinion.

Jeff Wickum CPDE® SRES® ePRO®

Lifestyles Real Estate

(831) 419- 4130

www.FreeShortSaleOptions.com

www.Wickum.com

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Missing Mortgage Payments? It's Never Too Late!

Missing Mortgage Payments?

It's Not Too Late!

According to Lender Processing Services (LPS), over 6.32 million homeowner missed their mortgage payments in April 2011. Another four million have missed more than three months of payments and are now considered seriously delinquent. If you or someone you care about is having difficulty making mortgage payments, you should know it's not too late to get help.

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Don't Walk Away From Your Mortgage

Stop Don't Walk Away From Your Mortgage

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Walking away or "strategically defaulting" on your mortgage is not the answer. You will find that there is nothing strategic about foreclosure, especially when there are solutions to avoid it.

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