Anderson Chase Financial

Blog

Scheduled Foreclosures on the Rise

August 13th, 2009

July stats from ForeclosureRadar show that the number of Californian properties scheduled for foreclosure has continued growing. Many of these properties will eventually be repossessed and put back on the market. Some homeowners may find luck with a loan modification, but astonishingly, it seems that that hasn’t been the case so far. I’m not sure why more struggling homeowners aren’t pursuing loan modifications. Until they do, the number of properties on the path to foreclosure will keep growing. They remain clogging the system as “shadow inventory,” most likely to be foreclosed and resold.

A normal foreclosure has the following steps:

1. Default notices sent
2. Auction notices sent
3. Repossession

house-in-chains

Key California data points:

- Default notices, which are sent when a borrower has missed several payments, were up 12% in July compared with a year earlier. Notices of default are the first stage of foreclosure.

- Auction notices, in which an auction date is set, were about even with last year’s level. This is the second step in foreclosure. After a default notice is sent, and even after an auction date is set, the borrower and lender can reach a loan modification agreement or sell the property to get out of foreclosure.

- Repossessions were down 40% from a year earlier, even though default notices were up and auction notices were flat. Lenders are delaying the final step in foreclosure. This is what’s creating the growing backlog of defaulted properties.

– Foreclosures scheduled for sale — these are the properties awaiting auction — increased 93% from a year earlier.

The jump in foreclosures scheduled for sale reflects the widespread practice of lenders stalling the final sale of distressed properties. There are more than 124,000 of these properties in California awaiting auction.

More repossessions are coming, however, due to the degree to which so many in California are underwater on their mortgages. The average California home in foreclosure has a loan balance of $425,000 but an estimated value of $237,000, ForeclosureRadar says.

Anderson Chase Financial

Tags: , , , , ,
Posted in Uncategorized | 3 Comments »

Lease Modification Incentive

August 12th, 2009

So an interesting thing has been happening in various rental sectors in America: landlords are voluntarily cutting rent to keep tenants. They want to avoid going months with an empty property and nobody paying rent. In this market, vacancies are an owner’s worst enemy.

apartment

While landlords were and are still fundamentally motivated by profits and money, the means by which they go about obtaining it have changed a bit since the real estate bubble burst and unemployment levels spiked. Property owners are discovering that they cannot underestimate the bargaining power of their tenants in this economy. Tenants have become more market savvy, and in a climate where it’s slim pickings, tough going, and dog eat dog for all, more people are making demands they wouldn’t have expected themselves to a few years ago.

“I don’t think it’s any secret that the market has definitely had an adjustment over the past almost-year,” said David Wine, a vice chairman of Related. “It would be disingenuous to enter the renewal process underestimating the market knowledge of our customers. In the market that existed a year or two ago, landlords sent out the renewal notice and the resident was either happy to renew or they had to move. The process has become much more complicated.”

“The fear that’s going on among landlords is they don’t know what they’re going to do in the fall and winter,” says Marc Lewis of Century 21 NY Metro. “They can’t find enough bodies.” So to keep the tenants they have now, many are making offers.

A real estate broker at a major New York firm who is also a tenant on the Upper East Side recently received an unsolicited rent reduction of about 20 percent. “I was shocked,” she said. “It clearly said ‘your rent has been decreased.’ I just signed it and sent it back. They have a huge number of vacancies. They’re in tune with not losing tenants, and particularly not losing tenants from this area.”

Having a vacant apartment is a nightmare for landlords. In addition to losing a month or two of rent, to fill it again, the owner may have to pay the broker’s fee or give an additional month away for nothing.

Megan Noetzel, received a May 1 renewal with no reduction for a one-year lease and a very small reduction, less than 5 percent, for a two-year lease. “Given the market,” says Megan, “I knew that I had some leeway.” She wrote her landlord asking for a rent reduction of almost $400. And miraculously… she got it.

Scott Linquist, of New York, NY, was renewing his lease for August 15 when he received a pleasant surprise: a rent reduction he didn’t even ask for. Says Scott, “I love my apartment and I didn’t want to move. But had they not given me a reduction at all, I probably wouldn’t have stayed.”

Anderson Chase Financial

Tags: , ,
Posted in Uncategorized | 34 Comments »

Top 10 Markets to Sell Real Estate

August 11th, 2009

Well here’s something new. Amidst this nightmare of a recession, there are actually several markets that are performing only SLIGHTLY below listing price. In fact… there are a few markets that are performing better now than they were 1-5 years ago. Let’s explore these magical places; even if you don’t own property in these areas or aren’t looking to sell, reading statistics like these can’t help but raise spirits. Even if but slightly. =)

Fayetteville, N.C.

Median Home Value: $120,060 – up 13 percent from a year ago, making Fayetteville currently the best real estate market in the country
Property values are up 6.3 percent compared from five years ago
53 percent of homes are increasing in value
95 percent of homes are sold for a gain

Washington D.C.

Median Home Value: $378,900 – down 4.1 percent from a year ago
Home values up since the beginning of 2009
Homes are selling for two percent less than the listing price, excellent in this climate
87 percent sold for a gain

Oklahoma City, Okla.

Median Home Value: $118,700 – up 5 percent from a year ago
Homes are selling for 2 percent less than list price
Property values are up 6 percent compared with five years ago
87 percent of homes sold for a gain

Boulder, Colo.

Median Home Value: $ 318,900 – up 2 percent from a year ago.
Property values are up 2 percent compared with five years ago.
61 percent of homes are increasing in value
85 percent of homes were sold for a gain

Yakima, Wash.

Median Home Value: $131,300 – down 2 percent from a year ago
Property values are up 4.8 percent compared with five years ago
95 percent of homes sold for a gain
Homes are selling for 2 percent less than list price

Jacksonville, N.C.

Median Home Value: $ 139,400 – up 1 percent from a year ago
Property values are up 8 percent compared with five years ago
97 percent of homes sold in June were sold for a gain, the highest percentage in the country
Homes are selling for 1 percent less than list price

Binghamton, N.Y.

Median Home Value: $ 112,300 – up 5 percent from a year ago
Highest 5-year appreciation in the country at 9 percent
Home values are increasing 53 percent

Little Rock, Ark.

Median Home Value: $ 121,600 – up 0.37 percent from a year ago
Property values are up 4 percent compared with five years ago
84 percent of homes sold for a gain

Augusta, Ga.

Median Home Value: $111,900 – up 3 percent from a year ago
Property values are up 5.2 percent compared with five years ago
Homes are selling for 3 percent less than list price
87 percent of homes sold for a gain in June 2009

Milwaukee, Wis.

Median Home Value: $195,000 – up 1.36 percent from a year ago
Property values are up 2 percent compared with five years ago
75 percent of homes sold for a gain in June 2009
Homes selling for 4 percent less than list price

Anderson Chase Financial

Tags: ,
Posted in Loan modification | 3 Comments »

Map of Foreclosures and Unemployment

August 10th, 2009

A recent CNN article provides an interactive map displaying percentages of unemployment and foreclosure across all 50 states. California is evidently hard hit in both unemployment and foreclosure with an 11.6 percent unemployment rate and a 5.21 percent foreclosure rate:

Unemployment

unemployment-map


Foreclosure

foreclosure-map

Here are some additional tidbits and numbers for California, the good and the bad:

• The Obama stimulus bill will create or save an estimated 396,000 jobs in our state alone

• Thirteen banks have failed (highest number after Georgia, with 21 bank failures)

• The banks that failed in California were: Vineyard, Temecula Valley, Metro Pacific, Mirae, First Bank of Beverly Hills, Alliance, County, 1st Centennial, Downey Savings and Loan Association, PFF Bank and Trust, Security Pacific, First Heritage, and IndyMac.

Anderson Chase Financial

Tags: , , ,
Posted in Uncategorized | 25 Comments »

Third Largest FHA Lender Suspended

August 7th, 2009

tbw

Taylor, Bean and Whitaker No Longer Able to Issue FHA Loans

Taylor Bean was known for being less strict than other mortgage lenders. The agency insured mortgages with down payments as low as 3.5 percent, and didn’t have minimum credit-score requirements. “I’ve heard it said it’s good that we have Taylor Bean there because no one else will buy these loans,” said David Lykken, a mortgage expert based out of Austin, Texas. “To say they’re a bottom-feeder may be too strong a statement, but that’s how they’re viewed in a lot of cases.”
On Wednesday, Taylor Bean shut its doors. A press release from TBW reads:

“TAYLOR, BEAN & WHITAKER MORTGAGE CORP. (“TBW”) RECEIVED NOTIFICATION ON AUGUST 4, 2009 FROM THE U.S DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, FREDDIE MAC AND GINNIE MAE (THE “AGENCIES”) THAT IT WAS BEING TERMINATED AND/OR SUSPENDED AS AN APPROVED SELLER AND/OR SERVICER FOR EACH OF THOSE RESPECTIVE FEDERAL AGENCIES.”

Since then, 2,050 employees have been laid off, and federal authorities have gone in and searched the company, forced it to stop making FHA loans and confirmed that its leaders were under investigation for fraud.

So now what?

• Thousands of borrowers seeking mortgage loans and refinancings in Taylor Bean’s pipeline are suddenly back to square one.

• Cash-strapped borrowers could struggle the most to find a replacement lender offering affordable terms. Taylor Bean was one of the country’s largest FHA (Federal Housing Administration) lenders, trailing only Bank of America and Wells Fargo. It was one of very few handling FHA loans for manufactured homes.

• Hundreds of small banks and brokers that sold their loans to Taylor Bean are suddenly scrambling to find new partners. The removal of a major player could lead to higher prices as well as fewer choices.

• Colonial Bank, a $26 billion Alabama bank with nearly 200 branches in Florida, was relying on Taylor Bean as a lifeline. A planned $300 million infusion of capital from Taylor Bean fizzled last week, raising doubts Colonial will continue.

A word on FHA loans. The Federal Housing Administration does not MAKE the loans, but rather, insures them from private lenders. FHA loans are largely issued to financially-strapped or first-time homebuyers due to their low down payments and initial interest rates. TBW subsisted on insuring such loans; to be suspended from doing FHA loans essentially shut down the business.

Anderson Chase Financial

Tags: , , , , ,
Posted in Uncategorized | 2 Comments »

« Older Entries
Newer Entries »