I don’t think the banks mind if inventory is kept off the market. It keeps prices artificially low and prices higer.
Foreclosures Plunge, but New States Now Suffer
Published: Thursday, 11 Oct 2012 | 8:43 AM ET
In another sign that the still shaky housing recovery might be finding its footing, foreclosure filings in some of the hardest hit states of the housing crash have plummeted dramatically, and overall the nation is seeing the lowest level of foreclosure activity since 2007.
Foreclosure filings, which include notices of default, scheduled auctions and bank repossessions, were reported on 531,576 U.S. properties during the third quarter of this year, according to RealtyTrac, a foreclosure sales and data website.
That is a decrease of 5 percent from the second quarter and a decrease of 13 percent from the third quarter of 2011. One in every 248 U.S. housing units with a foreclosure filing during the quarter.
“We’ve been waiting for the other foreclosure shoe to drop since late 2010, when questionable foreclosure practices slowed activity to a crawl in many areas, but that other shoe is instead being carefully lowered to the floor and therefore making little noise in the housing market — at least at a national level,” said Daren Blomquist, vice president at RealtyTrac. “Make no mistake, however, the other shoe is dropping quite loudly in certain states, primarily those where foreclosure activity was held back the most last year.
There is fast becoming a large divide in foreclosure activity between states that require a judge in the foreclosure process and those that don’t. The latter, which include formerly hard-hit states like California, Michigan and Arizona, are non-judicial, and foreclosures there have cleared the process faster. In states like New York, Florida, New Jersey, Ohio, and Illinois, where a judge is required, the picture is still bleak.
Foreclosure activity jumped on a year-over-year basis in 14 out of the 26 judicial foreclosure states. New Jersey saw a 130 percent increase, New York a 53 percent jump and Pennsylvania a 35 percent increase. This will make it harder for overall home prices to improve in those states, as distressed home sales bring values down.
It is a far different story in California, where overall foreclosure numbers are still high, but are down 45 percent from a year ago, according to RealtyTrac. Eager investors, as in Arizona, are standing ready to buy distressed properties, but they are finding little supply, and that is putting upward pressure on prices at the low end.
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Proprietary OC Housing News home purchase analysis
3089 North JUNEBERRY St Orange, CA 92865
$399,000 …….. Asking Price
$394,000 ………. Purchase Price
8/7/2008 ………. Purchase Date
$5,000 ………. Gross Gain (Loss)
($31,520) ………… Commissions and Costs at 8%
============================================
($26,520) ………. Net Gain (Loss)
============================================
1.3% ………. Gross Percent Change
-6.7% ………. Net Percent Change
0.3% ………… Annual Appreciation
Cost of Home Ownership
——————————————————————————
$399,000 …….. Asking Price
$13,965 ………… 3.5% Down FHA Financing
3.40% …………. Mortgage Interest Rate
30 ……………… Number of Years
$385,035 …….. Mortgage
$118,918 ………. Income Requirement
$1,708 ………… Monthly Mortgage Payment
$346 ………… Property Tax at 1.04%
$259 ………… Mello Roos & Special Taxes
$100 ………… Homeowners Insurance at 0.3%
$401 ………… Private Mortgage Insurance
$259 ………… Homeowners Association Fees
============================================
$3,072 ………. Monthly Cash Outlays
($251) ………. Tax Savings
($617) ………. Equity Hidden in Payment
$15 ………….. Lost Income to Down Payment
$70 ………….. Maintenance and Replacement Reserves
============================================
$2,289 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$5,490 ………… Furnishing and Move In at 1% + $1,500
$5,490 ………… Closing Costs at 1% + $1,500
$3,850 ………… Interest Points
$13,965 ………… Down Payment
============================================
$28,795 ………. Total Cash Costs
$35,000 ………. Emergency Cash Reserves
============================================
$63,795 ………. Total Savings Needed
The property above is available for sale on the MLS.
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Nearby Foreclosures
Gain a competitive advantage over other buyers. By locating distressed properties -- before they hit the MLS -- you can discover where tomorrow's REOs and short sales will appear. Most of these properties are not listed on the MLS, but they will be soon. Research properties in advance and get a jump on your competition. Don't miss out on another deal because you couldn't act quickly. Use this tool to your advantage! The red properties are already bank owned. As soon as REO asset managers prepare them for sale, they will be on the MLS. Get ready! The green and blue properties have owners who are not paying their mortgages. They may be offered as short sales, or they may go through foreclosure and become REO. Either way, they will also likely be available on the MLS soon. Find your next home! Be prepared to offer on these properties by researching them in advance or risk losing out to buyers who are have done their homework. Start your research today! To find distressed properties, enter your desired location and press search. Scroll through list by pressing "next."Comparative Market Analysis
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This is not what the federal reserve hoped would happen.
Reports: Refi Numbers Low Despite Low Mortgage Rates
It was no surprise when mortgage rates dropped in the weeks following the Fed’s announcement that it would purchase $40 billion of agency mortgage-backed securities (MBS) each month until the labor market shows substantial improvement.
Even with the record-low mortgage rates seen today, refinancing numbers are still not as high as expected.
In CoreLogic’ most recent MarketPulse report, Sam Khater and Molly Boesel noted, “the overall level of refinancing is still low given current mortgage rates, and there are still many homeowners nationwide with above market rates.”
Despite the new expansions from HARP 2.0, including the removal of its 125 percent LTV ceiling, other restrictions are still preventing homeowners from refinancing.
One of those restrictions is a HARP guideline that makes borrowers ineligible if they obtained their GSE-backed mortgaged after May 31, 2009.
CoreLogic conducted an analysis to find out who would be excluded from HARP based this particular requirement.
According to its analysis, CoreLogic found that “lifting the restriction on origination date would expand eligibility of HARP by an additional 2 percent of currently outstanding mortgage, or approximately one million borrowers.”
The report found that those borrowers who are ineligible based on their origination date have an average mortgage rate of 5.22 percent and would save an average of $333 a month.
The authors suggested removing the origination date restriction to extend HARP benefits to an additional one million borrowers, who could then use the savings as a economic stimulus.
Capital Economics also discussed the weak impact of low mortgage rates on refinancing in an analysis wrapping up economic news for the week.
Authored by economists Paul Ashworth and Paul Dales, the report did acknowledge that low mortgage rates led to a surge in mortgage applications, especially for refinancing.
Despite the surge, Capital Economics noted refinancing applications still didn’t rise above levels seen in early 2009 when interest rates were also declining.
Rather than focusing on what’s specifically preventing HARP refinancings, Capital Economics provided a more general picture of what is happening in refinancing.
“This illustrates how big a restraint it is that almost half of mortgage borrowers can’t qualify to refinance because, thanks to the collapse in home prices and tighter lending standards, they don’t have the 20% in home equity needed to qualify,” the research firm observed.