The Los Angeles Times
A Mortgage Bankers Association report Thursday said that after seasonal adjustments, 7.58 percent of all residential mortgages were delinquent by at least one payment as of the fourth quarter of 2011. That was down from 7.99 percent in the third quarter of 2011 and 8.25 percent in the fourth quarter of 2010.
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http://www.latimes.com/business/money/la-fi-mo-mortgage-delinquencies-20120216,0,5231531.story
Sales to third parties, typically investors, rose significantly in January, according to a report by ForeclosureRadar. California saw the most activity, with investors purchasing 3,964 properties for $766.2 million. This is the fourth largest month on record in California, and the busiest since March of 2011.
Despite what appears to be significant percentage increases in foreclosure starts in California, Nevada and Washington, these increases barely offset the declines seen over the holidays. Compared with January one year ago, foreclosure starts are significantly lower.
“January’s numbers should put to rest any notion that we will see a wave of foreclosures in 2012, at least in the western states that we cover,” stated Sean O’Toole, founder and CEO of ForeclosureRadar. “Foreclosure Starts remain near record low levels, significantly lower than a year ago, when many banks still had self-imposed moratoriums in place due to the robo-signing scandal. Add to that a foreclosure timeframe of more than 8 months, and there is little chance of a wave this year even if all the banks started the foreclosure process en masse tomorrow.”
In January, foreclosure starts in California rose 15.5 percent and foreclosure sales increased 14.6 percent.
CNN Money
On Thursday, federal and state officials announced a $26 billion foreclosure settlement with five of the largest home lenders. California is expected to receive approximately $12 billion in principal write-downs, including through short sales, over the next three years, according to the state attorney general’s office.
Making sense of the story
- The deal settles potential state charges about allegations of improper foreclosures based on robo-signing, seizures made without proper paperwork.
- The settlement sets up a federal monitor to oversee the process and try to prevent the challenges that tripped up many homeowners seeking help in earlier programs designed to address the housing crisis.
- Most of the relief will go to those who are underwater on their homes. That relief will come over the course of the next three years, with banks having incentives to provide most of the relief in the next 12 months.
- At least $17 billion will go to reducing the principal owed by homeowners who are underwater and behind on their mortgages.
- Up to 750,000 other underwater homeowners who are current on their mortgages will be able to refinance their current loans at lower rates. They will not receive a reduction in principal, but with mortgage rates near record lows, they could receive substantial savings on their monthly payments.
- Approximately $1.5 billion will go to homeowners who had their homes foreclosed upon between Jan. 1, 2008 and Dec. 31, 2011, and who meet other criteria. They will receive up to $2,000 each.
- The five mortgage servicers that are parties to the settlement include Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, and Ally Financial (formerly GMAC).
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http://money.cnn.com/2012/02/09/news/economy/mortgage_settlement/index.htm?hpt=hp_t1
This week, C.A.R. sent letters to members of Congress sharing its concerns about the disposition of Enterprise/FHA REO assets. In the letter, C.A.R. President LeFrancis Arnold states that if the program is implemented improperly, it will have a negative impact throughout California and set back the housing market.
C.A.R. understands that some cities across the country may benefit from the bulk sale of REO properties, however, the Association feels that housing regulators have not appropriately analyzed proposed pilot cities. Los Angeles and the Southern California region have been named as a potential pilot program location. However, these areas are experiencing an inventory shortage and many homes for sale, especially distressed properties, are receiving multiple bids. Removing REO inventory through a bulk sale and rental program would hurt these communities. In addition, taxpayers will lose because these REOs will be sold for less money in bulk sale than if sold as individual units.
While the nation continues to face its most difficult housing crisis since the Great Depression, C.A.R. hopes FHFA and HUD will withhold or delay the release of their REO bulk sale initiative in California’s housing market.
Read the letter
- The CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) Pending Home Sales Index (PHSI)* fell from a revised 108.7 in November to 91.6 in December, based on signed contracts. The index was up from the revised 82.5 recorded in December 2010, marking the eighth consecutive month that pending sales rose from the previous year. The decline follows a normal seasonal drop that usually occurs in November and December.
- Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.
- C.A.R. also reported that sales of distressed properties increased in December, as lenders pushed to close REOs and short sales to move them off their balance sheets before the end of the year.
- The total share of all distressed property types sold statewide rose to 47.3 percent in December, up from November’s 44.9 percent but down from 48.3 percent in December 2010.
- Of the distressed properties sold statewide in December, 22.2 percent were short sales, up from the previous month’s share of 21 percent and up from last December’s share of 19.6 percent.
The share of REO sales rose in December to 24.6 percent, up from November’s 23.5 percent, but down from the 28.3 percent recorded in December 2010.
The Federal Housing Finance Agency (FHFA) today announced the first step of a Real-Estate Owned (REO) Initiative targeted at the hardest-hit metropolitan areas announced in August 2011. Investors interested in participating may “pre-qualify” to establish eligibility to bid on transactions in the initial pilot phase as well as subsequent phases.
The REO Initiative will allow qualified investors to purchase pools of foreclosed properties with the requirement to rent the purchased properties for a specified number of years. This rental period could provide relief for local housing markets that continue to be depressed by the volume of foreclosed properties, and provide additional rental options to certain markets. Prequalification ensures investors will have the financial capacity and operational expertise to manage properties in a way that is conducive to the stabilization of communities hard hit by the housing downturn.
During the pilot phase, Fannie Mae will offer for sale pools of various types of assets including rental properties, vacant properties and non-performing loans with a focus on the hardest-hit areas. The first transaction will be announced in the near-term.
California’s housing market is unique. California has an extremely low REO inventory where REO sales are getting top dollar in multiple offer situations. On average, REOs are sold are sold in less than 60 days. Bulk sales in California not only would have a negative impact on home prices, but would also push down home values for existing homeowners in those communities. C.A.R. is asking that the Federal Housing Finance Agency, Dept. of Treasury, and Dept. of Housing and Urban Development consider this program only in areas where REO inventory is abundant and selling in bulk makes sense.
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FICO has launched myFICO en Español, the first Spanish-language website where consumers can obtain their personal credit report, credit report analysis, FICO Score and FICO Score analysis in Spanish.
The new site enables users to toggle between Spanish and English, a format that is preferred by many bilingual speakers. More than 600 pages of Spanish-language consumer financial educational materials are available to visitors.
To access the site, visit http://espanol.myfico.com.
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The Wall Street Journal
Converting home equity into cash has been a challenge for homeowners since the real-estate downturn, but a growing number of lenders are quietly reviving a loan for seniors that does just that: The reverse mortgage.
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http://online.wsj.com/article/SB10001424052970204542404577158990079313270.html?mod=WSJ_RealEstate_LeftTopNews
The New York Times
First-time home buyers planning to purchase a house later this year may have a better chance of qualifying for a mortgage if they have had a history of paying their rent on time.
Making sense of the story
- Last year, credit-reporting agency Experian added a section to millions of credit reports showing on-time rent payments and raised the credit scores of many people. The company said that this year it would add in negative marks, including mentions of bounced checks or of tenants’ leaving before a lease was up.
- Incorporating rental payments into credit scores could affect millions of people who have not established credit histories through credit cards, student loan repayments, and other credit sources.
- Almost half of consumers considered “high-risk” experienced an increase of 100 points or more after their positive rental history was added, according to Experian’s rent bureau. Those with average or higher scores did not experience major movement.
- Although it is still too early to show the effects of the new credit report, which began in December, the changes are intended to allow lenders and consumers to have greater transparency, according to Corelogic.
- People who have lost their homes to foreclosure and are now leasing may be able to rebuild their credit histories by being responsible renters.
- However, consumer groups and advocates are skeptical, noting that reports are sometimes riddled with mistakes and some landlord-tenant disputes may be difficult to capture in a credit report. Rent may not have been paid, for example, because the furnace was left unrepaired for months.
Read the full story
http://www.nytimes.com/2012/01/08/realestate/mortgages-a-good-rental-history-can-help-borrowers.html?_r=1&ref=realestate
California home sales rose for the third consecutive month in December, marking the highest level since January 2011, according to data from C.A.R. Sales also were up from a year ago, marking the sixth consecutive annual increase.
Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 520,940 in December, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. December’s sales were up 3.3 percent from November’s revised pace of 504,420 and were up 0.1 percent from the revised 520,330 sales pace recorded in December 2010.
The statewide median price of an existing, single-family detached home posted its second consecutive monthly gain, increasing 1.8 percent to $285,920 in December, up from a revised $280,960 in November. However, the median price was down 6.2 percent from the revised $304,770 median price recorded in December 2010.
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