Sandy Slinkard Huntsville Real Estate

FED SAYS COMMERCIAL MARKET LESS RISKY

Sandy Slinkard — Tue, 08 Feb 2011 17:43:00 GMT

The risks in commercial real estate loans and securities have “been reduced” and are not expected to threaten the overall health of the financial system, the U.S. Federal Reserve says.

"It appears that worst-case scenarios are becoming increasingly unlikely," Patrick M. Parkinson, director of the central bank's division of banking supervision and regulation, testified at a hearing of the Congressional Oversight Panel.

Experts have feared the commercial real estate market would severely damper the economy due to a surge in foreclosures in commercial property the past two years. According to Foresight Analytics, commercial property values have fallen by 42 percent since its peak in 2007.

What’s more, about $350 billion in commercial real estate debt is expected to mature every year through 2013.
But the commercial market is beginning to stabilize. Vacancy rates among office, industrial, and retail properties have stopped rising. Rental rates continue to fall but at a much slower pace. Plus, sales of commercial properties last year were nearly double 2009 levels.

In some markets, commercial-property values have even increased by more than 30 percent from their lows in 2009. For example, last week the Mortgage Bankers’ Association’s former Washington headquarters sold for $101 million, after MBA had sold the building for $41.3 million the year prior.

Experts say that investors are bidding up property values and taking advantage of low interest rates.

Source: “Fed Official: Commercial Real Estate Risks ‘Reduced,’” Dow Jones Business News (Feb. 4, 2011) and “The Outlook: Commercial Real Estate Coming Back, But Unevenly,” The Wall Street Journal (Feb. 7, 2011)

BANK of AMERICA LAUNCHES NEW FORECLOSURE UNIT

Sandy Slinkard — Tue, 08 Feb 2011 17:41:00 GMT

Bank of America Corp. is splitting its mortgage business into two units in order to get a better handle on the flood of foreclosures.

Bank of America’s new unit, Legacy Asset Servicing, will be charged with resolving issues involving faulty paperwork that had led the bank to temporarily suspend foreclosures across the country for nearly two months in October. The new unit will also handle mortgage modifications and buyback claims on bad loans sold to investors.

Meanwhile, Bank of America’s Home Loans unit will continue to handle new loans and the servicing of current loans.

The company also said it plans to exit the reverse mortgage origination business.

Bank of America Home Loans lost $8.92 billion in 2010 and has been battered by a stream of lawsuits, mostly focused on bad loans it acquired when it purchased Countrywide in 2008.

Source: “Bank of America Splits Foreclosures, Discontinued Projects From Mortgage Lending Business,” Associated Press (Feb. 4, 2011

MORE SENIORS HAVE REVERSE MORTGAGE REGRET

Sandy Slinkard — Tue, 08 Feb 2011 17:39:00 GMT

More than 30,000 U.S. home owners are facing foreclosure after defaulting on their reverse mortgages.

Reverse mortgages are a type of home-equity loan only available to home owners 62 years old or older. These home owners tapped into the equity of their paid-off homes to help boost their income, but now they could lose their homes after failing to pay property taxes, property insurance premiums, or other costs associated with the home.

Florida, in particular, is hard hit with nearly 5,300 in default from reverse mortgages; that’s the highest number in the country, making up about 18 percent of the U.S. total, according to the CredAbility Group, a nonprofit consumer credit counseling service.

However, some experts say critics shouldn’t be too quick to just blame the problem on reverse mortgages in general.
Peter Bell, president of the Reverse Mortgage Lenders Association, says that many of the home owners now in default likely would have been facing foreclosure earlier if they hadn’t had reverse mortgage companies lend them the money needed to pay insurance and tax bills.

"The reverse mortgage has actually provided more protection for them than under usual circumstances," he says. "Whenever a home owner can't pay their taxes, they run the risk of losing their property through foreclosure. In this case, mortgage servicers have provided advances on their behalf to avoid that."

Source: “Seniors Find Dark Side to Reverse Mortgages,” Orlando Sentinel (Feb. 3, 2011)

FORECLOSURES SOAR AMONG MILITARY FAMILIES

Sandy Slinkard — Tue, 08 Feb 2011 17:38:00 GMT

The number of foreclosure filings in 2010 among veterans, active-duty troops, and reservists rose 32 percent over 2008, reports RealtyTrac, a foreclosure research firm.

More than 20,000 of the military members who took out special government-backed mortgages lost their homes in 2010. That number marks the highest number since 2003.

More military members are seeking aide in special programs for troops and veterans too. For example, the number of military families asking for assistance has risen 19 percent in 2010 over the previous year, says Bill Nelson, executive director of USA Cares, a charity that provides financial assistance to Iraq and Afghanistan war-era troops.

Last year, about 12,000 military families applied to the Pentagon's expanded Homeowners Assistance Program and 9,000 were found eligible. The program covers most of the difference in sales price and mortgage for service members who must transfer and sell their homes for less than they owe. The program will also sometimes even buy the house outright.

The Mortgage Bankers Association says that loans from private banks guaranteed by Veterans Affairs generally outperform other categories of mortgages. The VA helped 66,000 families avoid foreclosure last year, Mike Frueh, VA assistant director for loan and property management, told USA Today.

Source: “20,000 Military Members, Vets Faced Foreclosure in 2010,” USA Today (Feb. 4, 2011)

HOME OWNERSHIP OFFERS PLENTY OF TAX BENEFITS

Sandy Slinkard — Tue, 08 Feb 2011 17:36:00 GMT

While renting offers zero tax breaks, buying a home offers several tax benefits that can make homeownership more affordable. Real estate professionals need to be careful in providing detailed tax advice to clients to avoid lawsuits, but you can ensure clients have the information they need to understand the all of the tax benefits of home ownership.

The following is a few of the tax benefits to home ownership, according to Stephen Fishman, an author and lawyer who specializes in small business, tax and intellectual property law.

▪ Home mortgage interest deduction: Home owners can take an itemized deduction on interest paid on a mortgage or mortgages of up to $1 million for a principal residence and/or second home. This deduction could potentially reduce the cost of borrowing by one-third or more.
▪ Property tax deduction: Home owners can deduct from their federal income taxes the state and local property taxes that you pay on the home.
▪ Deductible home buying expenses: Several closing costs in a home purchase are also deductible, such as loan origination fees (points), prorated interest on a new loan, and prorated property taxes paid at settlement.
▪ $250,000/$500,000 home-sale exclusion: Home owners who have lived in their home for two of the prior five years prior to its sale do not have to pay income tax on the majority of their profit — $250,000 for single home owners and $500,000 for married homeowners who file jointly.
▪ 14 days of free rental income: Home owners can rent the home up to 14 days during the year and pay no tax at all on the rental income.

Source: “The Tax Benefits of Homeownership,” Inman News (Feb. 4, 2011

FORECLOSED HOME OWNERS FACE COURT ALONE

Sandy Slinkard — Fri, 04 Feb 2011 20:29:00 GMT

Unable to pay high legal fees, more foreclosed upon home owners are opting to go to court to represent themselves in their foreclosure hearings.

About 20 states require a judge’s approval for foreclosures--home owners last opportunity to plea their case and avoid foreclosure.

In New York, about 32,000 home owners came to court in the first 10 months of 2010 for foreclosure hearings but only 12,000 had a lawyer representing them.

“Many of the home owners would do much better with an attorney,” says Paul Lewis, chief of staff to New York’s chief administrative judge.

Self-help clinics are popping up across the country to help home owners learn how to defend themselves in court at these foreclosure hearings.

For example, in New Mexico, a community center began offering a class with tips on everything from how to download the forms, decipher the lingo, and mount a defense against a multi-billion dollar bank, to even providing tips on which side of the lectern you should stand when defending yourself in court.

Many of the home owners have legitimate arguments to why the foreclosure shouldn't stand, but the cases can be complex in defending yourself, says Louis McDonald, the chief judge for New Mexico’s 13th Judicial District.

“The system is failing those who can’t afford representation,” he says. McDonald says “more legal aid" is needed to help such home owners.

Source: “Foreclosed Homeowners Go to Court on Their Own,” The New York Times (Feb. 3, 2011

PROPOSAL TO CURB PRIVATE TRANSFER FEES

Sandy Slinkard — Fri, 04 Feb 2011 20:26:00 GMT

U.S. regulators are proposing a new rule to ban Fannie Mae and Freddie Mac from acquiring loans where home buyers are charged private transfer fees.

Private transfer fees, also known as “capital recovery” frees, are inserted by developers for newly-built housing subdivisions. They require sellers to pay a percentage of the selling price to the original developer of the property every time the property changes hands for up to 99 years. The percentage charged is usually 1 percent of the sales price.

Real estate groups have been speaking out against private transfer fees, calling it an unfair extra fee to home owners.

The Federal Housing Finance Agency has proposed a rule that Fannie, Freddie, and 12 Federal Home Loan Banks would no longer be able to acquire mortgages that have such fees.

Source: “U.S. Government Proposes Restrictions on Home-Resale Fees,” Dow Jones Business News (Feb. 1, 2011)

TWO COUNTRYWIDE EXECS AGREE TO A $6.55 M SETTLEMENT

Sandy Slinkard — Fri, 04 Feb 2011 19:43:00 GMT

The State of California reached a $6.55 million settlement with two former Countrywide executives in a high-profile lawsuit filed by the state regarding predatory lending practices.

Former Chief Executive Angelo Mozilo and Countrywide President David Sambol deny the allegations in the lawsuit, which accuse Countrywide of false advertising and unfair competition in marketing mortgages and home equity lines of credit.

The $6.55 settlement will be used to aide Californians affected by the mortgage crisis and provide grants to help home owners facing foreclosure, California Attorney General Kamala Harris said in a public statement about Wednesday’s settlement.

Countrywide was acquired by Bank of America Corp. in 2008.

The original lawsuit filed in June 2008 also had included Countrywide as a defendant. Countrywide reached a settlement in October 2008, agreeing to provide about $6.8 billion nationwide in loan modifications and foreclosure relief.

Countrywide has faced a series of legal battles and fines. In October 2010, Mozilo also had agreed to pay $67.5 million in penalties to settle civil fraud and insider-trading charges by the Securities and Exchange Commission.

Source: “California Settles With Two Former Countrywide Executives,” Dow Jones Business News (Feb. 2, 2011)

NAR PRAISES FHFA'S PROPOSED TRANSFER FEE RULE

Sandy Slinkard — Fri, 04 Feb 2011 19:40:00 GMT

The National Association of REALTORS^® applauded the Federal Housing Finance Agency (FHFA) for moving ahead with a proposed rule to restrict government-sponsored enterprises Fannie Mae and Freddie Mac and the 12 Federal Home Loan Banks from investing in mortgages encumbered by private transfer fee covenants.

NAR has long been vocal in its opposition to private transfer fees, which are often attached to a property by developers and require payment of fees back to the developer each time the property is resold; the covenants can be difficult to reverse and may be attached to a deed for up to 99 years.

“As the leading advocate for home ownership, we commend FHFA for the proposed rule to ban private transfer fees, which we believe often decrease affordability, negatively impact equity and provide little benefit to property purchasers,” NAR President Ron Phipps said. “FHFA is taking the necessary steps to ensure that these fees are no longer used to simply generate revenue for investors and private developers.”

The proposed rule would exclude private transfer fees paid to some home owner, condominiums, and cooperative associations. “We understand that FHFA believes that some private transfer fees have a legitimate place in real estate markets, and support their decision to exempt certain organizations from the proposed ruling where there may be a direct benefit to the home owner; however, FHFA must ensure that the fees paid are reasonable and fully disclosed to home buyers well in advance of closing,” Phipps said.

According to FHFA the proposed rule would only apply to private transfer fee covenants created on or after the date of publication of the rule.

Since there is virtually no oversight on where or how private transfer fee proceeds can be spent, on how long a private transfer fee may be imposed, or on how the fees should be disclosed to home buyers, as many as 19 states have banned or restricted private transfer fees. The Federal Housing Administration has also restricted private transfer fees through its home loan programs.

— NAR

GOP SEEKs TO END GOVERNMENT CONTROL OF GSEs

Sandy Slinkard — Fri, 04 Feb 2011 19:37:00 GMT

House Republicans say it’s time to end the government’s control over Fannie Mae and Freddie Mac, which were placed in government control in September 2008.

"Congress must take immediate measures to minimize this cost and ensure taxpayers are never put in this situation again," Rep. Scott Garrett (R-N.J.) said in a statement. "The status quo is unacceptable, which is why we will continue to seek alternative solutions to housing finance in the United States that decrease the government's exposure and get private capital off the sidelines."

A subcommittee hearing is scheduled for Feb. 9 to focus on how to transfer the power.

Meanwhile, the Treasury Department is expected to release a report on the future of Fannie and Freddie later this month, which is expected to contain options on how to replace Fannie and Freddie.

Source: “Republicans to Discuss End of Fannie, Freddie Control,” Dow Jones Business News (Feb. 2, 2011)

IS INEXPERIENCE HAMPERING THE SHORT SALE PROCESS??

Sandy Slinkard — Wed, 02 Feb 2011 19:59:00 GMT

Daily Real Estate News | January 28, 2011 |

Inexperienced real estate professionals are to blame for hampering the short sale process, according to two real estate professionals who specialize in distressed sales.

"The banks know who's experienced and who's not," said real estate pro Travis Waller at a recent conference in New York. "If you don't present the files correctly to the bank, you're going to get put at the bottom of the pile. When the banks recognize you know what you're doing with your presentation of the documents, you'll get a call within a few days."

The flood of short sales on the market have prompted many in the real estate industry to refocus their careers, finding it to be the main driver of business nowadays.

But "many short sales are lost to foreclosure because of the inexperience of the listing agent," Waller said.

Waller said that borrowers he’s worked with have already missed four to seven mortgage payments before they come to him, which means he must work quickly on a short sale deal before the property falls into foreclosure.

"You are working under the gun as a short sales agent. If you don't know what you're doing, then time is just ticking away," he said.

Home Affordable Foreclosure Alternative program agreements in the short sale process can be completed in as few as 60 days by experienced agents, he said.

Source: “Inexperienced Real Estate Agents Causing HAFA Short Sales to Fail,” National Mortgage News (Jan. 14, 2011)

MORTGAGE RATES CONTINUE TO CLIMB

Sandy Slinkard — Wed, 02 Feb 2011 19:54:00 GMT

Daily Real Estate News | January 28, 2011 |

addthis_pub = 'rmostaff'; addthis_logo = 'http://www.addthis.com/images/yourlogo.png'; addthis_logo_background = 'EFEFFF'; addthis_logo_color = '666699'; addthis_brand = ''; addthis_options = 'delicious, digg, favorites, facebook, fark, google, reddit, magnoliacom, newsvine, furl, yahoo, technorati, twitter, icerocket'; document.write(' Share');Mortgage rates are continuing their gradual climb upwards after reaching record lows. The 30-year fixed mortgage rate rose to 4.8 percent from 4.74 percent the previous week, Freddie Mac reports. The average on 15-year mortgage rates also rose slightly from 4.05 percent to 4.09 percent for the week.

In November, 30-year loans had reached a 40-year low at 4.17 percent and the 15-year mortgage rate was at 3.57 percent.

The average on the five-year adjustable-rate mortgages this week increased to 3.7 percent from 3.69 percent the previous week.

Meanwhile, the Mortgage Bankers Association says it expects mortgage lending to drop considerably in 2011, due to high unemployment, borrowers’ diminished credit coming out of the recession, and more lenders not willing to take on a high risk.

MBA says it expects new loans this year to decrease by 36 percent to its lowest level in more than a decade, falling to $966 billion in 2011 from $1.5 trillion this year.

Earlier in the week, MBA reported a drop in mortgage applications to the slowest refinancing activity in more than a year. Mortgage applications dropped 12.9 percent in the week ended Jan. 21, according to MBA’s seasonally adjusted index.

The index dropped 15.3 percent, which is the lowest level since January 2010. Refinancing activity has continued to decline since October from rising interest rates and tighter underwriting standards.

Source: “Bond Yields Rise and So Do Mortgage Rates,” Freddie Mac (Jan. 27, 2011); “U.S. Mortgage Applications Declined Last Week,” Reuters News (Jan. 26, 2011); and “Mortgage Lending Projected to Fall 36%,” Dow Jones Business News (Jan. 26, 2011

COUNTRYWIDE FACES MORE LAWSUITS

Sandy Slinkard — Wed, 02 Feb 2011 19:52:00 GMT

Daily Real Estate News | January 28, 2011 |

Bank of America Corp.’s Countrywide continues to be a thorn in its side. Bank of America acquired Countrywide in 2008 and the mortgage unit has faced countless lawsuits accusing it of misleading investors about its finances and lending practices.

The latest lawsuits come from the states of Michigan and Oregon and Fresno County, Calif., and more lawsuits are expected on their way.

Bank of America said it expects an additional $6.1 billion of write-downs and legal costs from Countrywide.

Last year the bank agreed to a $624 million settlement to resolve a similar class-action lawsuit against Countrywide.

However, some investors opted out of the class-action settlement, likely believing they could get higher recoveries by suing on their own.

"It is unfortunate that select investors chose to opt out of a fair and equitable agreement to settle these issues,” Shirley Norton, a Bank of America spokeswoman, said in a statement. “We intend to vigorously defend these claims."

Source: “Lawsuits Mount for BofA’s Countrywide,” Reuters News (Jan. 28, 2011)

NO MORTGAGE!! IF YOU HAVE LATE VIDEO RENTAL FEES

Sandy Slinkard — Wed, 02 Feb 2011 19:49:00 GMT

Daily Real Estate News | January 28, 2011 |

');Thousands of customers in Montana who owed late fees or any other charges pending at the now defunct Hollywood Video and Movie Gallery are finding it difficult to get a mortgage or finance a car.

Movie Gallery, the parent company of the video rental stores and once the second-largest video rental chain, went bankrupt last year, and the debt collection agency National Credit Solutions is now trying to collect from its past customers. National Credit Solutions filed negative credit reports without informing the customers and did not give customers the opportunity to dispute the fees, according to a lawsuit filed by Montana’s Department of Justice on behalf of the customers.

National Credit Solutions is also accused of charging the customers penalty late fees--more than $300 in some cases--on top of what they already owed.

The black marks on the customers’ credit reports are preventing some from getting loans or refinancing a mortgage. But some customers say they are being charged for failing to return a movie even when they had.

Movie Gallery is trying to collect from 12,325 customers from Montana. It’s unclear whether customers outside of Montana had been affected, too.

"It's crazy to think that a Montanan would be prevented from refinancing their house or buying a new car simply because they returned 'Caddyshack' two days late," State Attorney General Steve Bullock said in a statement.

Source: “Montana Files Lawsuit Over Video Late Fees,” Associated Press (Jan. 26, 2011

DEVELOPER ADMITS SCAMMING THE TAX CREDIT PROGRAMS

Sandy Slinkard — Wed, 02 Feb 2011 19:46:00 GMT

Daily Real Estate News | January 28, 2011 |

');A Richmond, Va., real estate developer admitted that he asked for more money than what he needed -- anywhere from $7 million to $20 million -- from federal and tax credit programs to rehabilitate historic properties in the city.

Justin Glynn French, 40, pleaded guilty to defrauding federal and state tax credit programs, which were intended to revitalize historic Richmond.

Since 2005, French has applied for historic rehabilitation tax credits on at least 35 properties in Richmond.

In one incident, French purchased a property for $700,000 and expected rehabilitation costs of about $200,000. However, in applications to the tax credit programs he listed rehabilitation costs at more than $1.5 million. Ultimately, he received tax credits of more than $707,000, still more than $500,000 over what he needed.

French faces up to 30 years in prison.

Source: “Richmond Developer Pleads Guilty to Defrauding State, Federal Tax Credit Programs,” Associated Press (Jan. 25, 2011)

FORECLOSURES JUMP IN UNEXPECTED CITIES

Sandy Slinkard — Wed, 02 Feb 2011 19:44:00 GMT

Daily Real Estate News | January 27, 2011 |

The foreclosure crisis is now spreading to cities that were once relatively unscathed from the crisis. Seattle, Houston, and Chicago have joined the list of other cities in the United States plagued by a growing number of foreclosures and home owners unable to make their mortgage payments.

Foreclosure activity increased in 149 of the country’s 206 largest metro areas last year, reported RealtyTrac Inc., a foreclosure listing firm.

In the Houston-Sugar Land-Baytown metro area, the foreclosure rate jumped 26 percent from 2009 — the largest increase in foreclosures among the top 20 metro areas, according to RealtyTrac.

In Seattle-Tacoma-Bellevue, the foreclosure rate increased nearly 23 percent — ranking second in areas with the largest increases. In Georgia, the Atlanta-Sandy Springs-Marietta metro area was third with a 21 percent spike.

In the Chicago-Naperville-Joliet area, foreclosure activity rose 16 percent and home repossessions climbed nearly 20 percent, making it the second-highest city with the largest number of bank repossessions. (Phoenix-Mesa-Scottsdale in Arizona had the highest number of bank repossessions overall.)

Bad mortgages are no longer taking most of the blame for the spike in foreclosures either.

"We've actually had a sea change in what's causing foreclosures, from the overheated home prices and bad loans to a second wave of foreclosures actually caused by unemployment and economic displacement," Rick Sharga, a senior vice president at RealtyTrac, told MSNBC.

As unemployment and the economy improve, Sharga expects metro areas like Houston, Seattle, and Chicago to bounce back quickly. However, he expects the traditional foreclosure hotbeds — California, Florida, Nevada, and Arizona — to take longer to recover. Those states account for 19 of the top 20 metro areas with the highest foreclosure rates in 2010.

The highest overall foreclosure rate in the nation? Las Vegas-Paradise, Nev.: One out of every nine households received a foreclosure-related notice in 2010, which is nearly five times the national average, RealtyTrac reports.

Source: “Foreclosures Spread Into Previously Safe Areas,” MSNBC (Jan. 27, 2011

GOOGLE TO DROP REAL ESTATE LISTINGS

Sandy Slinkard — Wed, 02 Feb 2011 19:42:00 GMT

Daily Real Estate News | January 27, 2011 |

Google announced that it will drop real estate listings that real estate professionals upload to its classified site Google Base, as well as any for-sale, foreclosure, or rental properties through its search function on Google Maps.

The real estate listings at the site will discontinue by Feb. 10, 2011.

Google officials say they decided to stop featuring the real estate listings because of low usage and the popularity of other property-search tools on real estate Web sites. Google Base also is being replaced by Google Shopping APIs, which will not support real estate listings.

Google says visitors still will be able to be use Google to find real estate information and Web sites and explore neighborhoods through Google Street View.

"This does not come as a surprise to me,” Pete Flint, CEO of property search site Trulia, told Inman News. “Even with Google's huge audience, it shows having listing data is clearly not enough to deliver a good real estate search experience and build audience."

Source: “Google Drops Real Estate Listings,” Inman News (Jan. 26, 2011)

GOP BLAMES HOUSING BUBBLE ON FINANCIAL CRISIS

Sandy Slinkard — Wed, 02 Feb 2011 19:40:00 GMT

Daily Real Estate News | January 27, 2011 |

addthis_pub = 'rmostaff'; addthis_logo = 'http://www.addthis.com/images/yourlogo.png'; addthis_logo_background = 'EFEFFF'; addthis_logo_color = '666699'; addthis_brand = ''; addthis_options = 'delicious, digg, favorites, facebook, fark, google, reddit, magnoliacom, newsvine, furl, yahoo, technorati, twitter, icerocket'; document.write(' Share');A minority report by three Republican members cite 10 causes for the 2007-2008 financial crisis that led the country into a recession, including placing some of the blame on risky lending and bad state oversight that sparked a housing bubble.

The report comes on the heels of recent media leaks of a report to be released Thursday by a 10-member, appointed Financial Crisis Inquiry Commission, mostly made up of Democratic congressional members. (For more on that report, read U.S. Panel: Financial Crisis Was Avoidable.)

Among the 10 causes the Republicans cite in their minority report, they say the housing bubble is one big factor leading to the financial crisis. They say the housing bubble was caused by population growth in “sand states,” such as Florida, Arizona, Nevada, and California.

The report blames subprime lending with deceptive lending practices for making the housing bubble even worse. The report blames poor state-level oversight and weak “disclosure standards and underwriting rules [that] made it easy for irresponsible lenders to issue mortgages that would probably never be repaid,” the report read.

The GOP report also noted that "all these factors were supplemented by government policies ... that subsidized homeownership but created hidden costs to taxpayers and the economy. Elected officials of both parties pushed housing subsidies too far."

The report also criticized Fannie Mae and Freddie Mac, the government-sponsored enterprises, for undermining the securitization process. "Fannie Mae and Freddie Mac did not by themselves cause the crisis, but they contributed significantly in a number of ways," the report reads.

Source: “GOP Report Cites 10 Causes for U.S. Financial Crisis,” Reuters Nows (Jan. 26, 2011

DISTRESSED PROPERTIES SPUR REMODELING REBOUND

Sandy Slinkard — Wed, 02 Feb 2011 19:38:00 GMT

Daily Real Estate News | January 27, 2011 |

The U.S. remodeling industry is “poised for growth” and a return to more normal levels, but it won’t be coming from the industry's traditional drivers, according to a report by the Joint Center for Housing Studies (JCHS) at Harvard University. The remodeling industry has faced double-digit declines in activity since its peak in 2007.

The overall aging of homes and home owners eyeing the potential income gains is expected to provide a boost to the remodeling market, but the major drive leading the rebound in the remodeling industry is expected to come from distressed properties, the report says.

Instead of reducing the price on a property, more lender servicers who manage aging REO portfolios are considering remodeling and raising the price, says Dale McPherson who has more than 30 years in the mortgage industry. The servicers are growing tired of watching investors repair and remodel these properties and sell them at a much higher price — now banks want to cash in, too.

Remodeling distressed properties has the potential to cut the cost on losses of the lender servicers as well as help home owners benefit from remodeling margins too.

Kermit Baker, director of the Remodeling Futures Program at JCHS, says that the slumping housing market has caused “lower household mobility” and as such, more home owners will likely now be looking at what home improvements they can make that will offer longer paybacks, such as energy-efficient retrofits.

In the next five years, the focus of remodeling spending will shift from upper-end discretionary projects to replacements and systems upgrades, the report also notes.

Source: “Remodeling Poised for a Sharp Recovery,” National Mortgage News (Jan. 18, 2011) (login required)

FINDING NEW HOMES' FOR PETS' IN FORECLOSURE

Sandy Slinkard — Wed, 02 Feb 2011 19:34:00 GMT

Daily Real Estate News | January 25, 2011 |

In the housing downturn, many home owners have not only had to leave their homes behind, but also their pets. In foreclosed properties, more pets are being found locked in basements, garages, or in backyards.

A new program, No Paws Left Behind, recently announced its 1,000^th foreclosure animal rescue. The program rescues abandoned animals — everything from dogs and cats to llamas and pot-bellied pigs — and places them in “no kill” shelters until foster care can be arranged.

"Sadly, the current housing crisis has severely affected countless home owners creating a trickle down negative effect on helpless animals," says Cheryl Lang, the founder of The No Paws Left Behind program and also CEO of Integrated Mortgage Solutions, a provider of REO property inspections. "During routine housing inspections, we frequently discover animals left behind in deplorable conditions with no food and at times inadequate shelter.”

Lang says they receive more than 20 calls a week across the nation regarding abandoned pets found in foreclosure properties.

Source: “National Non-Profit Committed to Helping the Silent Victims of America’s Foreclosure Crisis Hits Major Milestone,” PRNewswire.com (Jan. 10, 2011)

COUNTRYWIDE ACCUSED OF MASSIVE FRAUD

Sandy Slinkard — Wed, 02 Feb 2011 19:32:00 GMT

Daily Real Estate News | January 25, 2011 |

MORTGAGE FEES ARE RISING AGAIN

Sandy Slinkard — Wed, 02 Feb 2011 19:30:00 GMT

Daily Real Estate News | January 25, 2011 |

BUYERS GET PICKY WHEN HOME SHOPPING

Sandy Slinkard — Wed, 02 Feb 2011 19:28:00 GMT

Daily Real Estate News | January 25, 2011 |

Buyers want “perfection and comfort,” says John B. Badalamenti, an associate broker at Prudential Fox & Roach Realtors in Wayne, Pa.

"As a result of the staging craze, buyers have become a bit spoiled," Badalamenti told the Philadelphia Inquirer. "Homes are almost being put on the market as museum pieces. You can bounce a dime off a bed."

Echoing those comments, Cheryl Miller of Long & Foster Real Estate in Blue Bell, Pa., says “gone are the days when buyers were willing to settle for anything. The Wizard of Oz has had the curtain pulled back.”

Staging has become increasingly important, particularly for hard-to-sell homes, real estate pros say.

As for sellers who have put off essential home maintenance, they may want to think twice before putting their home up on the market yet. It’s a “death sentence” for a listing these days, Badalamenti says. “Things like nail pops and settlement cracks, while often easily repaired, are not being tolerated.”

Buyers often are eyeing home inspections carefully too. Harris Gross of Engineers for Inspection in Cherry Hill says that in home inspections buyers seem most concerned about water leaks from plumbing or roofing repairs, as well as any structural issue problems. Termite damage and radon are also big concerns. He says that about 50 percent of his clients tested positive for radon last year.

Source: “Setting the Stage for House-Buying Season,” The Philadelphia Inquirer (Jan. 24, 2011)

MAN PLEADS GUILTY IN $23 MILLION MORTGAGE FRAUD CASE

Sandy Slinkard — Fri, 21 Jan 2011 23:14:00 GMT

Daily Real Estate News | January 14, 2011 | addthis_pub = 'rmostaff'; addthis_logo = 'http://www.addthis.com/images/yourlogo.png'; addthis_logo_background = 'EFEFFF'; addthis_logo_color = '666699'; addthis_brand = ''; addthis_options = 'delicious, digg, favorites, facebook, fark, google, reddit, magnoliacom, newsvine, furl, yahoo, technorati, twitter, icerocket'; document.write(' Share

'); Share

Man Pleads Guilty in $23M Mortgage Fraud Case
A New York real estate attorney is the ninth defendant convicted in a mortgage fraud scheme that defrauded banks out of more than $23 million in home mortgage loans.

Cheddi Goberdhan, an attorney in Queens, N.Y., pleaded guilty in federal court to bank fraud and conspiracy to commit bank and wire fraud. He faces a maximum of 210 years in prison, as well as paying restitution to the victims.

Prosecutors say the scheme involved arranging for homes to be purchased by straw buyers, who posed as buyers but who never had any intention of living in the properties. Loan officers obtained mortgages for the home purchases by submitting fraudulent applications to banks and lenders. The straw buyers would then default on the mortgages and the mortgage proceeds would be passed along to those involved in the scam, according to prosecutors.

Source: "New York Real Estate Attorney Pleads Guilty to Fraud,” Dow Jones Business News (Jan. 11, 2011)

BUYERS TRY TO CLEAR OUT THE BAD VIBES

Sandy Slinkard — Fri, 21 Jan 2011 23:11:00 GMT

Daily Real Estate News | January 14, 2011 |

One buyer in Salem, Mass., two weeks before closing had a witch and warlock visit his three-story home to clang bells and spray holy water to cleanse the bad aura and break up the negative energy in the home. They poured kosher salt on doorways and raised iron swords at windows to keep evil spirits away.

"It's not entities or ghosts that we're dealing with anymore," Julie Belmont, who refers to herself as an intuitive, told The Wall Street Journal. "With foreclosures, a lot of it is energy imprints from past discussions, arguments, money problems. All of that is absorbed by the house."

Real estate pro Tamara Dorris in Sacramento, Calif., is a believer in feng shui for speeding up the sale of a property. For example, she placed a jade plant, which is believed to bring financial luck, in a designated “prosperity corner” in one home.

"Within two weeks, I had two offers," she says. "Most homes have at least one or two prosperity flaws. Foreclosed homes have five or six flaws."

Source: “The Housing Slump Has Salem on a Witch Hunt Again -- Buyers Worried About Bad Vibes From Foreclosed Homes Seek a Cleansing,” The Wall Street Journal (Jan. 13, 2011)