Real Estate Information Archive

The NAR is cracking down on the "mortgage relief scams" that some homeowners who are short selling their home, can get approached on......

As reported by DSNews.com, May 13, 2011

According to the National Association of Realtors (NAR), a new rule from the Federal Trade Commission that aims to protect homeowners from mortgage relief scams may impact real estate professionals who represent clients involved in short sale transactions.

The Mortgage Assistance Relief Services (MARS) rule, which applies to residential real estate transactions, took effect January 31.

Laurie Janik, NAR general counsel, overviewed the new rule Wednesday at a forum during the Realtors 2011 Midyear Legislative Meetings & Trade Expo in Washington, D.C.

“As the leading advocate for homeownership, NAR supports efforts to ensure that mortgage assistance relief services truly benefit consumers,” Janik said. “Nevertheless, NAR has some concerns about the rule and its application to real estate professionals involved in short sales transactions.”

Primarily directed at companies offering modification services to consumers, the rule bans all upfront fees for renegotiating mortgage terms and mandates that certain disclosures are made to consumers if a short sale is negotiated with a lender on their behalf or when advertising short sales experience.

But according to Janik, the rule may also impact real estate professionals who represent clients involved in a short sale transaction.  Realtors MUST comply by not taking upfront fees.

She explained that it pertains to such practices as advertising short sale negotiation services or other short sale expertise, communicating with a consumer about a possible short sale before the listing agreement is executed, negotiating a short sale on behalf of a consumer, or arranging a short sale negotiation for a consumer.

A real estate professional now needs to include a clear and prominent disclosure in all commercial messages that advertise short sale services. In addition, second and third disclosures are required by real estate professionals before they begin mortgage assistance services on their clients’ behalf and at the time they present their client with the lender’s short sale approval letter.

“NAR is discussing with the FTC some language in the second and third disclosures as well as some other requirements found in the MARS rule,” Janik said. “The FTC is considering possible options to help make the rule more applicable to a real estate brokerage…when they are performing traditional real estate functions in a short sale transaction.”

A new report from ZILLOW shows that home values in the United States fell faster in the first quarter of 2011 than they have in any quarter since 2008, when the housing market experienced its worst performance.

The Seattle-based company’s index of residential property values fell 3 percent nationally during the first three months of this year when compared to the fourth quarter of 2010.

As a result, negative equity hit a new high-water mark by the end of the first quarter, with 28.4 percent of homeowners with mortgages owing more on the loan than their home is worth, Zillow said. The company’s underwater ratio is up from 27 percent in the fourth quarter of 2010.

Zillow’s first-quarter index reading of home values came in at $169,600, 8.2 percent below where it was a year earlier. The company says home values have fallen 29.5 percent since they peaked in June 2006.

Meanwhile, foreclosures rose throughout the first quarter as banks unfroze moratoriums and allowed foreclosures to resume. Foreclosures had fallen in late 2010 due to the

slew of temporary suspensions brought about by the “robo-signing” controversy.

But by March, Zillow says activity had picked up once again, with one out of every 1,000 homes in the country lost to foreclosure during the month.

With the substantial home value declines, as well as increasing negative equity and foreclosures, Zillow says it is unlikely that home values will reach a bottom in 2011.

First-quarter data has prompted Zillow to revise its forecast, now predicting a bottom in 2012 “at the earliest.”

“Home value declines are currently equal to those we experienced during the darkest days of the housing recession,” said Dr. Stan Humphries, chief economist for Zillow. “With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011.”

Humphries says he did expect a “substantial payback” from the federal government’s homebuyer tax credit initiative, which buoyed the housing market last year. But he warns that diminished demand post-tax credit, as well as rising foreclosures and high negative equity rates “make it almost certain that we won’t see a bottom in home values until 2012 or later.”

Zillow says very few markets were exempt from home value declines in the first quarter. Ninety-seven percent of the 132 markets covered by Zillow logged home value declines.

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According to the national home price index from Clear Capital it has officially entered double-dip territory, as reported in DSNews.com today.

The company says data through the end of April 2011 has pushed its reading of national home prices 0.7 percent below the prior low recorded in March 2009, as markets have become saturated with bank-owned properties.

Clear Capital’s report shows prices have fallen 11.5 percent over the previous nine-month period. A rate of decline this rapid has not been seen since 2008.

All the major metropolitan statistical areas tracked in Clear Capital’s report showed quarter-over-quarter price declines. The company says it’s a “sign of the continued volatility and fragility of home prices.”

At the regional level, home prices in the West, Northeast, and South regions have all crossed into double dip territory to record their lowest prices since the downturn began.

Clear Capital says the fact that the Midwest is the only region yet to double dip is largely a reflection of magnified gains it experienced during the last two years of tax credit activity.

Dr. Alex Villacorta, director of research and analytics at Clear Capital, says he continues to see evidence of an increase in the proportion of distressed sales taking hold in markets nationwide.

“With more than one-third of national home sales being REO, market prices are being weighed down as many markets have not regained enough footing to withstand the strain of the high proportion of REO sales,” Villacorta said.

“In light of the compounding effects of winter’s seasonal slowdown and increased distressed sale activity, the market now faces the true test of whether prices can rebound in the historically active spring season,” according to Villacorta.

While spring typically brings with it a resurgence in home sales – and home prices follow – Clear Capital warns that markets have entered uncharted territory since this spring homebuying season will be the first since 2008 without any tax credit incentive.

“A note of caution to those looking for a strong end to 2011: The last time no incentives were in place and distressed inventories were this high, home prices fell sharply,” Clear Capital said in its report.

The company’s home price report last month noted the subtle but rather ominous trend that distressed sales activity in the West, as a percentage of total sales, had climbed after a prolonged 18-month period of general improvements, and in turn, home prices in the western part of the country hit the double-dip mark in March.

“The housing market still faces many challenges that will only be solved through increased buying activity or a reduction in the distressed segment ― neither of which is assured in 2011,” according to Clear Capital.

It's 'GOOD' FRIDAY today, so I wanted to share some 'GOOD' & INSIGHTFUL information with you regarding our current and future real estate market, as posted on DSNews.com......Feel free to leave your comments and questions and I wish you and your families a HAPPY EASTER !

Greg Rand, a 20-year real estate veteran and CEO of OwnAmerica, says now is the time to invest in real estate.

Rand compares the current market to the years following the Great Depression when market conditions sparked a boom that sustained 65 years of appreciation in real estate.

“This economic crisis, while similar to the Great Depression, is also unique in the way that the housing market played a central role,” Rand said. “It is true that this is a once-in-a-generation crisis. It is also true that this is a once-in-a-generation opportunity. It’s time to focus on the other side of the coin.”

According to Rand, a little optimism can go a long way toward spurring real estate back to life.

“There is a very real economic force called irrational pessimism that is the cause of much economic hardship, not the effect,” he said.

“More people are unemployed because successful businesses are afraid to expand. More people are losing homes they can afford because they are underwater and believe their home will never appreciate again. People with job security are convinced they don’t have it and live in fear,” Rand explained.

He insists, “Irrational pessimism is one reason why today’s situation runs so parallel to the Great Depression.”

Rand contends there is no housing meltdown. Rather, there was a media and Wall Street meltdown centered on a predictable housing correction.

The real estate market changes hourly, he says, and investing in real estate is a matter of watching the trends.

Your thoughts and feedback on this topic are greatly appreciated. Please feel free to post your comments.

Keeping you informed about the Orange County real estate market, economy and life in the OC is what I'm committed to doing.

For more great Orange County market insight and industry news visit Laguna Niguel Real Estate or view the Orange County Market Trends at Orange County Real Estate.

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A great buyer incentive was announced by Fannie Mae on Monday....Borrowers purchasing a Fannie Mae-owned property through HomePath, the GSE’s REO disposition operation, will receive up to 3.5 percent in closing cost assistance.

The initial offer must be submitted on or after April 11, 2011, and the sale must close on or before June 30, 2011 to be eligible for the incentive. Fannie Mae said it can give no assurance on the time required to close, but initial offers submitted after May 15, 2011 are particularly questionable for closing by the incentive deadline of June 30.

To qualify, buyers must reside in the home as their primary residence; sales to investors are excluded.

Interest rates remain low right now, which helps this incentive go a long way toward helping even more families buy a new home.....This is a great time for Fannie Mae to offer some assistance.

In Arizona and Texas, there will be a $500 bonus available for selling agents whose buyers purchase and close on a HomePath property by June 30, 2011, and meet the terms and conditions of the closing cost incentive.

Retail and public entities are also eligible for the special buyer-assistance offer, however pool and auction sales are not eligible.

The D.C.-based government-backed mortgage firm rolled out a 3.5 percent subsidy for REO buyers in January of last year. Fannie Mae says it has seen considerable success with the program and as a result, has extended or restarted the temporary buyer assistance incentive several times – a strategy aimed at helping the GSE unload a bloated supply of repossessed homes.

The company acquired 262,078 single-family REO properties through foreclosure in 2010, compared with 145,617 in 2009. As of December 31, 2010, the company’s inventory of single-family REO properties was 162,489. Fannie says the carrying value of the company’s single-family REO was $15 billion as of the end of last year.

All Fannie Mae-owned REOs are listed on HomePath.com and most listings include detailed property descriptions, photographs, and community and school information.

Many Fannie Mae-owned properties are also eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing, which offers homebuyers an opportunity to purchase with as little as 3 percent down.

Your thoughts and feedback on this topic are greatly appreciated. Please feel free to post your comments.

Keeping you informed about the Orange County real estate market, economy and life in the OC is what I'm committed to doing.

For more great Orange County market insight and industry news visit Laguna Niguel Real Estate or view the Orange County Market Trends at Orange County Real Estate.

SEARCH ORANGE COUNTY'S BEST HOMES at Orange County MLS Home Search

As reported by DSNews.com

Analysis of home prices through the end of February by CoreLogic shows a year-over-year decline of 6.7 percent when distressed properties – REO and pre-foreclosure short sales – are included in the numbers.

Take out the distressed factor, and the company says home prices are “showing signs of stability,” down just 0.1 percent from a year ago.

A separate report released by Clear Capital Thursday also points to the impact of distressed property sales on home price trends.

Clear Capital’s data extends through the end of March, and the company says home prices in the western part of the country, where distressed homes account for some 40 percent of total sales, are continuing to steadily decline and have now fallen to a new, double-dip low for this cycle.

According to Clear Capital, the disparity between the West and the other regions can be found by looking at the extent distressed activity plays in western markets, where high levels of REO saturation continue to serve as a leading indicator of falling home prices.

February’s 6.7 percent drop marked the seventh straight month that CoreLogic has recorded a decline in its national home price index, counting both distressed and non-distressed properties.

On a POSITIVE spin....“When you remove distressed properties from the equation, we’re seeing a significantly reduced pace of depreciation and greater stability in many markets,” said Mark Fleming, chief economist with CoreLogic. “Price declines are increasingly isolated to the distressed segment of the market, mostly in the form of REO sales, as the stock of foreclosures is slowly cleared.”

Including distressed sales, CoreLogic says the five states with the greatest depreciation in February were: Idaho (-14.6%), Arizona (-12.0%), Florida (-11.2%), Michigan (-11.1%), and Illinois (-11.1%).

The five states with the highest appreciation were: West Virginia (+5.4%), New York (+4.7%), North Dakota (+4.1%), Maine (+3.6%), and Alaska (+1.2%).

Your thoughts and feedback on this topic are greatly appreciated. Please feel free to post your comments.

Keeping you informed about the Orange County real estate market, economy and life in the OC is what I'm committed to doing.

For more great Orange County market insight and industry news visit Laguna Niguel Real Estate or view the Orange County Market Trends at Orange County Real Estate.

SEARCH ORANGE COUNTY'S BEST HOMES at Orange County MLS Home Search