Foreclosure Starts Fall but Repos Rise

Foreclosure Starts Fall but Repos Rise

Foreclosure activity rose in July, up 7 percent from the previous month and up 14 percent from a year ago. July was the fifth consecutive month with a year-over-year increase in overall foreclosure activity following 53 consecutive months of decreases.

“The increase in overall foreclosure activity over the last five months has been driven primarily by rapidly rising bank repossessions, which in July reached the highest level since January 2013,” said Daren Blomquist, vice president at RealtyTrac. “Meanwhile foreclosure starts in July were at the lowest level since November 2005 — a nearly 10-year low that demonstrates the recent rise in bank repossessions represents banks flushing out old distress rather than new distress being pushed into the pipeline.

“This clearing of old distress is evident in the fact that properties foreclosed in the second quarter had been in the foreclosure process an average of 629 days, the longest in any quarter since we began tracking in the first quarter of 2007,” Blomquist continued. “It’s also evident that the recent surge in REOs is in fact clearing out more of the bad bubble-era loans from the so-called shadow inventory. RealtyTrac data now shows 61 percent of loans still in the foreclosure process were originated during the housing bubble years of 2004 to 2008, down from 68 percent last year and 75 percent two years ago.”

Bank repossessions at 30-month high, increase annually in 44 states

There were a total of 46,957 properties repossessed by lenders (REO) in July, up 29 percent from previous month and up 81 percent from a year ago to highest level since January 2013. Despite the recent increases, REOs in July were still less than half their peak of 102,134 in September 2010, but more than twice their pre-crisis average of 23,119 a month in 2005 and 2006.

REOs increased from a year ago in 44 states in July, including Florida (up 78 percent), California (up 23 percent), Texas (up 187 percent), Georgia (up 87 percent), Michigan (up 129 percent), Ohio (up 69 percent), and New Jersey (up 344 percent).

Foreclosure starts below pre-crisis levels, down annually in 31 states

There were a total of 45,381 U.S. properties that started the foreclosure process for the first time in July, down 8 percent from the previous month and down 9 percent from a year ago to the lowest level since November 2005 — a nearly 10-year low. Foreclosure starts in July were less than one-fourth of their peak of 203,948 in April 2009 and below their pre-crisis average of 52,279 a month in 2005 and 2006.

Foreclosure starts decreased from a year ago in 31 states in July, including California (down 25 percent), New York (down 19 percent), Texas (down 40 percent), Illinois (down 18 percent), Georgia (down 24 percent), Ohio (down 22 percent), Michigan (down 37 percent), and Maryland (down 15 percent).

States with increasing foreclosure starts — bucking the national trend — included Massachusetts (up 130 percent), New Jersey (up 76 percent), Missouri (up 72 percent), Wisconsin (up 27 percent), and Florida (up 16 percent).

 

Scheduled foreclosure auctions down after two months of increases
A total of 48,124 U.S. properties were scheduled for a future foreclosure auction in July, down 1 percent from the previous month and down 7 percent from a year ago following two consecutive months of year-over-year increases. Scheduled foreclosure auctions in July were less than one-third of their peak of 158,105 in March 2010 but still above their pre-crisis average of 33,634 a month in 2005 and 2006.

Scheduled foreclosure auctions — which are foreclosure starts in some states where they are the first public notice of foreclosure — increased from a year ago in 25 states, including New York (up 157 percent), New Jersey (up 101 percent), Massachusetts (up 54 percent), Connecticut (up 45 percent), Nevada (up 23 percent), Virginia (up 21 percent), and Illinois (up 19 percent).

13 of 20 largest U.S. metros post annual increase in foreclosure activity

Among the nation’s 20 largest metropolitan statistical areas by population, 13 posted year-over-year increases in overall foreclosure activity, led by St. Louis (up 148 percent), Boston (up 78 percent), New York (up 59 percent), Detroit (up 42 percent) and Philadelphia (up 40 percent).

Major markets with annual decreases in foreclosure activity in July were Houston (down 33 percent), Phoenix (down 23 percent), Riverside-San Bernardino (down 12 percent), Los Angeles (down 11 percent), Minneapolis (down 8 percent), San Diego (down 5 percent), and Chicago (down 2 percent).

Miami posted the highest foreclosure rate in July among the 20 largest metro areas. One in every 339 Miami housing units had a foreclosure filing in July — more than three times the national average of one in every 1,057 housing units with a foreclosure filing.

With one in every 375 housing units with a foreclosure filing, Tampa posted the second highest foreclosure rate among the 20 largest metro areas in July, followed by Baltimore (one in every 495 housing units), Chicago (one in every 586 housing units), and Philadelphia (one in every 627 housing units).

Atlantic city posts highest metro foreclosure rate, eight Florida cities in top 10

With one in every 258 housing units with a foreclosure filing in July — more than four times the national average — Atlantic City, New Jersey posted the highest foreclosure rate among metropolitan statistical areas with a population of 200,000 or more.

Eight Florida metros were in the top 10 for foreclosure rates in July: Jacksonville (one in every 310 housing units with a foreclosure filing), Miami (one in every 339 housing units), Lakeland-Winter Haven (one in every 349 housing units), Deltona-Daytona Beach-Ormond (one in every 358 housing units), Tampa (one in every 375 housing units), Port St. Lucie (one in every 410 housing units), Orlando (one in every 433 housing units), and Palm Bay-Melbourne-Titusville (one in every 437 housing units).

Florida, Maryland, New Jersey post highest state foreclosure rates

Florida foreclosure starts increased 16 percent from a year ago in July following 10 consecutive months of year-over-year decreases, helping the state maintain the nation’s top foreclosure rate for the fifth month in a row. One in every 408 Florida housing units had a foreclosure filing in July — more than 2.5 times then national average.

Maryland foreclosure activity increased 8 percent from a year ago in July — the fourth consecutive month with a year-over-year increase — and the state posted the nation’s second highest foreclosure rate for the second month in a row. One in every 513 Maryland housing units had a foreclosure filing during the month.

New Jersey foreclosure activity increased 129 percent from a year ago in July — the fifth consecutive month with a year-over-year increase — and the state posted the nation’s third highest foreclosure rate for the second month in a row. One in every 520 New Jersey housing units had a foreclosure filing during the month.

Nevada foreclosure activity increased 10 percent from a year ago, and the state posted the nation’s fourth highest foreclosure rate — one in every 587 housing units with a foreclosure filing. Illinois foreclosure activity increased 2 percent from a year ago, and the state posted the nation’s fifth highest state foreclosure rate — one in every 730 housing units with a foreclosure filing.

Other states with foreclosure rates among the top 10 nationwide were New Mexico at No. 6 (one in every 741 housing units with a foreclosure filing), Georgia at No. 7 (one in every 900 housing units), South Carolina at No. 8 (one in every 923 housing units), Ohio at No. 9 (one in every 932 housing units), and North Carolina at No. 10 (one in every 970 housing units).

 

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Freddie Mac: Market Volatility Pushes Rates Higher

Don’t read too much into changes

Brena Swanson,September 3, 2015, HousingWire.comStocks

Mortgage rates ticked higher after another week of volatile market activity despite essentially no new information, the latest Freddie Mac Primary Mortgage Market Survey said.

The 30-year fixed-rate mortgage averaged 3.89% for the week ending Sept.3, up from 3.84% last week. A year ago at this time, the 30-year FRM averaged 4.1%.

Additionally, 15-year FRM this week averaged 3.09%, up from last week when it averaged 3.06%. A year ago at this time, the 15-year FRM averaged 3.24%.

5-year Treasury-indexed hybrid adjustable-rate mortgage increased to 2.93% this week, up from last week when it averaged 2.90%. A year ago, the 5-year ARM averaged 2.97%.

1-year Treasury-indexed ARM was the only one to not change from last week and averaged 2.62%. At this time last year, the 1-year ARM averaged 2.4%.

“The 30-year mortgage rate increased 5 basis points, but don’t read too much into that. The Fed took great pains at the Jackson Hole conference to keep all their options open and to avoid making too much–or too little–of the situation in China and the volatility in global equity markets,” said Sean Becketti, chief economist with Freddie Mac.

“This Friday’s employment report is the last piece of significant, solid evidence the FOMC will have to consider before their September decision. The Street appears to be calling it a coin flip. There won’t be a clear direction for mortgage rates until the Fed makes its September decision, at the earliest,” he added.

Last week, Black Monday put a dent in housing stocks, along with the rest of the stock market. While bond and stock market did get a brief lift after thanks to comments from New York Fed President William Dudley, the market is still volatile. Dudley told press last Wednesday that the prospect of a September rate hike “seems less compelling” than it was only weeks ago, which helped calm the market.

However he warned about overreacting to “short-term” market moves, and left the door ajar to raising rates when the U.S. central bank holds a policy meeting on Sept. 16-17.

 

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A+ Reasons to Hire a Real Estate Professional

Posted: 04 Sep 2015 KCM CrewA+ Reasons To Hire A Real Estate Professional [INFOGRAPHIC] | Keeping Current Matters

Some Highlights:

  • Hiring a Real Estate Professional to buy your dream home, or sell your current house is one of the most ‘educated’ decisions you can make!
  • A Real Estate Professional has the experience needed to help you through the entire process.
  • Make sure that you hire someone who knows current market conditions & can simply & effectively explain them to you & your family!

 

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Five Events to Check Out Labor Day Weekend 2015 Around Boston

A free-admission day at the Gardner, an outdoor dog and music festival, and more.

labor day weekend 2015 events boston

ARTS
“Frank Hatch Free Day” at the Gardner Museum

Taking place on Labor Day since 2013, the “Frank Hatch Free Day,” in honor of the late civic and cultural leader, offers complimentary admission to the Gardner Museum. Offered on a first-come, first-served basis, free admission will give visitors access to the entire museum—galleries, gardens, and special exhibits, including a last chance to see “Secret Flowers Sculptures,” which showcases works by former artist-in-residence Jean-Michel Othoniel.

Free, Monday, September 7, 11 a.m.-5 p.m., Isabella Stewart Gardner Museum, 25 Evans Way,gardnermuseum.org.

CELEBRATION
Labor Day Weekend Fireworks

For the best view of the third annual Labor Day fireworks show, head to Piers Park in East Boston, Christopher Columbus Park and the Long Wharf downtown, or Fan Pier in the Seaport District. It will be the first dual-barge fireworks show—with barges anchored off the North End and Seaport—on the Boston Harbor since before 9/11, and organizers hope that it will become a new Boston tradition.

Free, Saturday, September 5, fireworks begin at 9 p.m., Boston Harbor,summeronthewaterfront.com.

PUPPIES
Pooch-A-Palooza

Does your pup have what it takes to be crowned the prince or princess of Pooch-A-Palooza? The Pooch Pageant, in which dogs are judged on best outfit, best strut, and most poised, is just one of the features of the annual outdoor dog and music festival. The two-day event, which takes place over Labor Day weekend at the Topsfield Fairgrounds, will also feature local food trucks and vendors, live entertainment, and various contests, including “Pooch-Owner Look-Alike,” “Most Unique Bark,” and more.

$10 for adults, free for children 12 and under, $1 entrance fee per dog that will be donated to Cape Ann Animal Aid, Saturday, September 5, and Sunday, September 6, 10 a.m.-4 p.m., Topsfield Fairgrounds, Topsfield, pooch-a-palooza.org.

HORSE RACE
Suffolk Downs Racing and Food Truck Festival

Live horse racing returns to Suffolk Downs three times this fall, with the first of the occasions taking place over Labor Day weekend. In addition to thoroughbred and steeplechase racing, the all-day affair will feature a lineup of food trucks, craft beer, children’s activities, and live music.

Free, Saturday, September 5, 11 a.m.-5 p.m., Suffolk Downs, 525 William F McClellan Highway,suffolkdowns.com.

MUSIC
Kristin Chenoweth with the Boston Pops Esplanade Orchestra

Tony and Emmy Award winner Kristin Chenoweth will join the Boston Pops and Thomas Wilkins, the BSO’s Germeshausen Youth and Family Concerts Conductor, for a night of beloved tunes from Broadway. The concert, which will close out the Tanglewood season, will culminate in a fireworks display.

$22-124, Saturday, September 5, 8:30 p.m., Koussevitzky Music Shed at Tanglewood, Lenox,bso.org.

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Where O Where Have all the Sellers Gone?

Not so long ago, when prices were plummeting and foreclosures pumped up the inventory counts with discounted values, homeowners and real estate professionals would have welcomed one of the chronic problems plaguing markets today; inventories so low that they inflate prices and keep move up buyers in homes they want to leave.

The question everyone is asking: “What’s happened to supply and demand dynamics? Demand is stronger, so where’s the supply/”

Recently the California Association of Realtors released a study that answered that question what another one.  About 35 percent of homeowners surveyed by the CAR said they have considered selling their home in the past year. But among that group, 64 percent said they decided against it because they couldn’t afford the home they’d like to buy as a replacement. So move up sellers are caught in the same circular trap as first-time buyers.  Where are the affordable listings that will halt this merry-go-round?

In 2013, when tight inventories switched from being a national blessing to a curse, Zillow’s Stan Humphries provided an explanation at the National Association of Real Editors’ annual meeting and the scales fell from my eyes.  He outlined how deficient equitied owners were frozen in place—not just those under water but also those lacking the 20 percent positive equity necessary to sell.  When you added up the under watered and the under equitied, it was a huge chunk of all homeowners with a mortgage at that time.

Less than 20 percent of homes today are under-equitied or under water

Price appreciation has whittled down that number over the past two years. RealtyTrac recently reported that only about 13.3 percent of all properties with a mortgage have less than 25 percent positive equity. CoreLogic puts the percentage of underwater and homes with less than 20 percent equity at 19.4 percent of all homes with a mortgage.  Zillow puts the negative equity rate at less than 15 percent through the second quarter.

Still a big factor, the equity barrier hurts some markets more than others.  It is worse in those markets that suffered most in the housing crash—the ‘sand’ states of California, Arizona, Nevada and Florida. It is also higher among entry level and mid-level price tiers than the top levels.

But is it possible that the barriers facing move up buyers are a lot greater than just adequate equity? When you think about what it takes to move today from the home seller’s point of view, does the 20 or 25 percent positive equity really provide enough to get out of the old house and into a new one?  To buy a new one at at the same price, not to mention a larger one a growing family might need, today’s down payment rates eat up half of the 20 to 25 percent positive equity realized by the house being sold.  Yet that’s just the start of what it takes to move up.

There’s a bigger expense that the economists are overlooking but it is front and center for every home owner thinking of selling.

During the trough of the housing depression following the crash in 2007, home improvement spending by homeowners fell 13 percent from peak to trough.  Basic maintenance work hardly dipped but  homeowners halted all the discretionary projects that they could put off—building out the basement, adding a deck, upgrading HVAC or heating systems, putting in energy saving windows.

This belt-tightening lasted a lot longer than the Great Recession.  By 2013, home improvement outlays per owner were only about $2500 a year in 2013 compared to $3400 in 2007, according to the Harvard Joint Center for Housing Studies.

Survey of Remodeling Contractors, Q1 2015

Source: Home Improvement Research Institute

 Postponed projects are the greatest source of new business for remodeling contractors.

Source: Home Improvement Research Institute

“In general, lower household mobility reduces remodeling demand because households tend to spend more on improvements both when they are putting their homes on the market and during the first several years after purchase. According to a 2014 Home Improvement Research Institute survey, fully half of recent sellers (who had sold and purchased homes in the preceding three years) undertook one or more improvement projects to prepare their homes for sale, with their expenditures averaging well over $8,000,” said the Joint Center in its most recent report on the remodeling market.

A new tipping point

Beyond equity, a second barrier keeping move up buyers from moving on up is the cost of getting their homes ready for the market, a cost that has increased substantially in many cases because homeowners  find themselves playing catch up on repair and remodeling projects that were put off during the lean years.

With the median price of a home around $200,000 today, that $8000 is 4 percent of its total value. Add the brokerage commission and a 10 percent down payment on a new home at the same price and before you add all the other costs associated with selling, buying and moving, you have reached the 20 percent barrier of positive equity that separates homeowners from the negative equity category where they are considered to be lacking unable to move up.

It’s quite possible that prospective move up buyers are paying the piper for delaying improvements necessary to make their homes sale-ready.  The cost of these could be a tipping point point that  is keeping them off the market for another year or even more despite today’s favorable price picture.

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What Do You Really Need to Qualify for a Mortgage?

Posted: 03 Sep 2015 KCM CrewWhat Do You Really Need to Qualify for a Mortgage? | Keeping Current MattersA recent survey by Ipsos found that the American public is still somewhat confused about what is actually necessary to qualify for a home mortgage loan in today’s housing market. The study pointed out two major misconceptions that we want to address today.

1. Down Payment

The survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 36% think a 20% down payment is always required. In actuality, there are many loans written with a down payment of 3% or less. Here are the results from a Digital Risk survey done on Millennials:Millennials Down Payments | Keeping Current Matters

2. FICO Scores

The Ipsos survey also reported that two-thirds of the respondents believe they need a very good credit score to buy a home, with 45 percent thinking a “good credit score” is over 780. In actuality, the average FICO scores of approved conventional and FHA mortgages are much lower. Here are the numbers from a recent Ellie Mae report:FICO Score Of Approved Loans | Keeping Current Matters

Bottom Line

If you are a prospective purchaser who is ‘ready’ and ‘willing’ to buy but not sure if you are also ‘able’, sit down with someone who can help you understand your true options.

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Are Existing-Home Sales Cooling Off?

Limited inventory blocks growth

neighborhood houses1

This is up 1% from July and 12.9% from a year ago, the strongest year-over-year gain in nearly two years.

“We may be looking at the beginning of a shift in existing home sales activity,” said Auction.com Executive Vice President Rick Sharga.

“The volume of sales, while continuing to increase, appears to be slowing down. And home prices, which have consistently appreciated over the past few years, may finally be leveling off,” he continued.

According to the most recent report from the National Association of Realtors, existing-home sales steadily increased for the third consecutive month in July.

Total existing home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 2.0% to a seasonally adjusted annual rate of 5.59 million in July from a downwardly revised 5.48 million in June.

Sales in July remained at the highest pace since February 2007 (5.79 million), have now increased year-over-year for ten consecutive months and are 10.3% above a year ago (5.07 million).

“Limited inventory of homes for sale – especially entry level homes for first-time home buyers – will make it hard for the market to reach higher numbers in 2015,” Sharga noted. “This is true for both existing home sales and new home sales, where inventory is improving, but still near a 40-year low.”

 

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