Housing Debacle

Foreclosures jump 7% in October from September

2011-11-10T06:56:00.000-08:00

Stockton, Calif., has highest rate of foreclosure filings

Foreclosure activity rose 7% in October compared with September, a sign that lenders are picking up the pace after foreclosure processing problems caused delays, RealtyTrac said Thursday.

Last month, foreclosure filings were reported on 230,678 U.S. properties, according to RealtyTrac data. Filings include default notices, scheduled auctions and bank repossessions.

Activity is down 31% in October compared with a year ago.

“The October foreclosure numbers continue to show strong signs that foreclosure activity is coming out of the rain delay we’ve been in for the past year as lenders corrected foreclosure paperwork and processing problems,” said James Saccacio, chief executive of RealtyTrac, in a news release.

“However, recent state court rulings and new state laws keep changing the rules of the foreclosure game on the fly, creating more uncertainty in the housing market and threatening to prolong the road to a robust real-estate recovery.”

In October, after 22 months in a row as the city with the highest foreclosure rate, Las Vegas finally ceded that standing to Stockton, Calif., according to RealtyTrac’s ranking of metropolitan areas with populations of 200,000 or more.

The big dip in home prices - by state

2011-08-26T10:55:00.000-07:00

Nationally, prices of homes using Fannie Mae- and Freddie Mac-acquired mortgages dropped 5.9% in the second quarter compared to the same period of 2010, the Federal Housing Finance Agency said this week. Put another way, home prices on an inflation-adjusted basis tumbled 10%. Of the major metropolitan areas, the biggest price decline was 14.1% in Atlanta-Sandy Springs-Marietta in Georgia. By contrast, prices rose 3.7% in Pittsburgh.

Illinois Realtors group had wrong home sale prices

2011-07-11T15:54:00.000-07:00

(Crain's) — Illinois Assn. of Realtors said Monday that it has erred on reporting monthly Chicago sales data for May and possibly every month for the past three years.

The organization corrected its reporting after being questioned by the Chicago Tribune, the publication said in a report published on its website.

Last month, the Illinois Assn. of Realtors said that the median price of an existing condo sold for $299,000 in May, a 10.3% increase over the same month the previous year. Midwest Real Estate Data LLC, however, said that the correct number for May was $243,000, which means the median price of a condo sold in Chicago that month was down 23% from May 2010, according to the Tribune's report.

A spokeswoman for the Illinois Assn. of Realtors told the Tribune that May was not the only month with questionable data. Median prices for condos and single-family homes in Chicago may have to be revised for the past three years.

May new home sales fall 2.1 percent

2011-06-23T08:25:00.000-07:00

Sales of new U.S. single family homes fell for the first time in three months in May, but inventories of new homes for sale reached record lows and the median sales price rose slightly, a government report showed on Thursday.

The Commerce Department said May new home sales fell 2.1 percent to a seasonally adjusted annual rate of 319,000. Analysts polled by Reuters were expecting a slightly slower pace of 310,000 for the month.

The decline ended two straight months of strong gains, with sales rising 6.5 percent in April and 8.9 percent in March. May's new home sales were 13.5 percent above the May 2010 level.

Signaling a paring back of builder inventories in the deeply depressed U.S. housing market, the supply of new homes for sale fell to a record low of 166,000 from 172,000 in April. Houses completed and houses under construction in the month also fell to their lowest levels on record.

The Commerce Department report showed that the median new home sales price rose to $222,600 in May from $217,000 in April, marking the first increase since December last year. However, compared to a year earlier, the May median sales price was down 3.4 percent

At May's sales pace, the supply of homes on the market dropped to 6.2 months' worth, the lowest since April 2010.

Home sales hit 6-month low, prices decline 4.6%

2011-06-21T08:55:00.000-07:00

(Reuters) - Sales of previously owned U.S. homes fell to a six-month low in May and prices dropped 4.6 percent from a year ago, pointing to a housing market still struggling to regain its footing. The National Association of Realtors said on Tuesday sales slipped 3.8 percent month over month to an annual rate of 4.81 million units, the lowest since November.

It was the second straight month of declines in home resales, but less than the 5.9 percent drop to a 4.80 million-unit pace that economists had expected.

While the fall in sales last month -- which was telegraphed by a steep fall in pending home sales contracts in April -- was partly due to bad weather in some parts of the country, including tornadoes, it underscored the fundamental weakness in the sector.

The report was also the latest set of data to confirm a sustained weakness in the economy through the second quarter, which has been marked by a sharp slowdown in regional factory activity, soft retail sales and anemic employment growth.

"This one report does not change our long-term view in that we still believe the housing market will remain a drag on overall economic activity in 2011 and likely into 2012," said Tom Porcelli, chief economist at RBC Capital Markets in New York.

But the smaller-than-expected decline in sales was yet another indication that the economy was set to regain momentum in the second half of the year.

U.S. stock indexes extended gains on the data, while government debt prices eased. The dollar was little changed.

The report came as policymakers at the Federal Reserve started a two-day meeting. Officials are expected to acknowledge the recent slowdown in economic activity, but they are likely to stick to their view that the soft patch is transitory.

The U.S. central bank is expected to confirm its $600 billion government bond-buying program will finish at the end of the month, as scheduled. The Fed, which has been criticized for risking inflation, has set the bar very high for any more monetary stimulus.

HOME PRICES FALL

In the 12 months to May, home resales were down 15.3 percent. The general weak housing market tone was underscored by the median home price, which at $166,500 was 4.6 percent lower than a year earlier.

The housing market is being squeezed by an overhang of unsold homes and a tide of foreclosures, which are depressing prices.

NAR chief economist Lawrence Yun said he believed sales had bottomed and expected pending contracts for May to rise by at least 15 percent. The pending homes sales report is due next week.

Foreclosures and short sales -- which typically occur at about 20 percent below market value -- accounted for 31 percent of transactions last month, down from 37 percent in April.

Cash purchases made up 30 percent of sales in May, while investors accounted for 19 percent of transactions.

Sales last month fell across the board, with multifamily dwellings declining 8.1 percent and single-family home units slipping 3.2 percent.

At May's weak sales pace, the supply of previously owned homes on the market rose to 9.3 months' worth from 9.0 months in April.

A supply of between six and seven months is generally considered ideal, with higher readings pointing to lower house prices.

Home Prices in 20 U.S. Cities Decrease to Eight-Year Low

2011-05-31T07:13:00.000-07:00

(Bloomberg) -- Home prices in 20 U.S. cities dropped in March to the lowest level since 2003, showing housing remains mired in a slump almost two years into the economic recovery.

The S&P/Case-Shiller index of property values in 20 cities fell 3.6 percent from March 2010, the biggest year-over-year decline since November 2009, the group said today in New York. At 138.16, the gauge was the weakest since March 2003.

A backlog of foreclosures poised to reach the market means prices may stay depressed, dissuading builders from taking on new-home construction projects. Unemployment at 9 percent and stricter lending conditions are signs that any recovery in housing may take years.

“With the foreclosure pipeline still full to bursting, it’s hard to see this downward pressure on prices abating,” said Paul Dales, a senior U.S. economist at Capital Economics Ltd. in Toronto. “I wouldn’t be surprised to see prices continue to fall this year and maybe into next year.”

Economists surveyed by Bloomberg had forecast a 3.4 percent decline from a year earlier, according to the median forecast of 27 economists surveyed. Estimates ranged from declines of 4.9 percent to 2.8 percent.

Nationally, prices decreased 5.1 percent in the first quarter from the same time in 2010, and were down 4.2 percent from the previous three months, the biggest one-quarter decrease since the first three months of 2009. At 125.41, the index was the lowest since the second quarter of 2002.

Chicago : home price index falls to lowest level since 2001

2011-03-29T18:23:00.000-07:00

(Crain's) — An index of local home prices fell in December for the fifth straight month, hitting its lowest point since the summer of 2001.

The Standard & Poor's/Case-Shiller index of Chicago-area single-family home prices declined 1.8% from December to January and was down about 7.5% from year-earlier levels, according to a report released Tuesday.

Chicago's monthly decline was the fourth-biggest of 20 U.S. metropolitan areas tracked by Standard & Poor's/Case-Shiller. The city's 1.8% drop was more severe than a 20-city index, which fell 1% from December to January. Washington, D.C., with a 0.1% increase, was the only city among the 20 where prices did not fall on a month-over-month basis, the report said.

“The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery,” David M. Blitzer, chairman of Standard & Poor's index committee, said in a news release. “At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing.”

Chicago's single-family price index was the lowest for the area since July 2001, according to S&P data. The local index has fallen 31% since its peak in September 2006. Chicago was one of 11 metropolitan areas that hit a new index low from the market peak in 2006/2007.

Minneapolis saw the biggest monthly decline, 3.4%, followed by Seattle, 2.4%, and San Francisco, 1.9%, according to the S&P/Case-Shiller report.

Case-Shiller : Home Prices Fall for 7th Straight Month in 19 of 20 metropolitan areas

2011-03-29T08:50:00.000-07:00

U.S. single family home prices fell for the seventh straight month in January, bringing prices to just above April 2009 lows, a closely watched survey said on Tuesday.

The S&P/Case-Shiller composite index of 20 metropolitan areas declined 0.2 percent in January from December on a seasonally adjusted basis where a Reuters poll of economists forecast a drop of 0.4 percent. Prices in the 20 cities have fallen 3.1 percent year-over-year compared to 3.2 percent expected.

"The housing market recession is not yet over," said David Blitzer, chairman of the index committee at S&P. "At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing."

Eleven of the 20 cities fell to the lowest levels since home prices peaked in 2006 and 2007, while the overall index was just 1.1 percent above the April 2009 low, the report showed.

Unadjusted for seasonal impact, home prices fell 1.0 percent for the month. Only San Diego and Washington, D.C. showed annual price increases.

The Case-Shiller index lags data from the National Association of Realtors, which reported earlier this month U.S that the median U.S. home price had hit a nine year low in February as home sales volumes plunged 9.6 percent.

In a separate report, the realtors group on Monday said contracts for sales of previously owned U.S. homes rose 2.1 percent in February after two straight declines.

The pending contracts data leads existing home sales by a month or two and suggests some of the recent weakness was due to unusually severe winter weather.

Chicago : One fourth of home borrowers under water

2011-03-08T20:02:00.000-08:00

(Crain’s) — A quarter of Chicago-area homeowners with mortgages owe more on the loan than their property is worth, as local home prices continue to fall.

At the end of the fourth quarter, 385,780, or 25.4%, of the area’s 1.5 million homeowners with mortgages had negative equity, according to a report released Tuesday by CoreLogic, a Santa Ana, Calif.-based housing-data firm.

An additional 80,048, or 5.3%, had less than 5% equity, or what’s known as “near negative equity,” the report said.

The number of local negative and near negative equity homeowners increased compared to the third quarter, when 342,741, or 22.2%, of the area’s mortgages had negative equity and 77,414, or 5%, had near negative equity.

Falling home prices are the main culprit, trapping borrowers in their homes, unable to move out or sell unless they write a check to their lender or work out a so-called short sale. The Standard & Poor's/Case-Shiller index of Chicago-area single-family home prices declined for the fourth straight month in December, hitting its lowest level in nearly nine years.

“Until the high level of negative equity begins to recede, the housing and mortgage finance markets will remain very sluggish,” CoreLogic Chief Economist Mark Fleming said in a news release.

In Illinois, 440,258 or 19.7%, of the 2.23 million homeowners with mortgages had negative equity and 110,570, or 5%, had near negative equity in the fourth quarter.

Nationally, 11.1 million, or 23.1 %, of all residential properties with a mortgage were in negative equity at the end of the fourth quarter, vs. 10.8 million, or 22.5%, in the third quarter, CoreLogic said.

Seattle foreclosures catching up to nation's

2011-01-13T17:34:00.000-08:00

The Seattle area continues to have fewer foreclosures than the nation as a whole, which set a new record last year, but the gap is narrowing, according to a new report.

Just under 2 percent of homes in King, Pierce and Snohomish counties were in some stage of the foreclosure process last year, compared with more than 2.2 percent nationwide, the foreclosure data firm RealtyTrac reported Thursday.

But the number of homes getting foreclosure filings rose 22.6 percent in the Seattle area, compared with just 1.7 percent nationwide.

Foreclosures would have been even higher if not for a temporary drop triggered mostly by controversy about foreclosure documentation and procedures, RealtyTrac said.

"2011 is going to be the peak," said Rick Sharga, a senior vice president at RealtyTrac.

In a news release, RealtyTrac Chief Executive Officer James Saccacio noted: "(M)any of the foreclosure proceedings that were stopped in late 2010 -- which we estimate may be as high as a quarter million -- will likely be re-started and add to the numbers in early 2011."

RealtyTrac counts several different types of documents filed in the foreclosure process, meaning not every property counted ended up as a completed foreclosure. For properties with multiple filings in a given time period, it counts only the most-recent.

The number of filings nationwide in December was down 1.75 percent from November and 26.3 percent from a year earlier. But filings rose 4.1 percent in the Seattle area from November and 4.7 percent from December 2009.

The Seattle area ranked 84th among large metropolitan areas for number of filings last year and 76th in December.

In Washington as a whole, 1.6 percent of properties got a foreclosure filing last year, up 24.4 percent from a year earlier. The state ranked 18th for foreclosure rate, with a higher rank meaning a higher rate.

Rates ranged from 9.4 percent of homes getting foreclosure filings in Nevada to just over 0.1 percent in Vermont.

Nevada had the nation's highest foreclosure rate for the fourth consecutive year despite a 5 percent drop in foreclosure activity from 2009.

Foreclosure activity rose more in Illinois than nation last year

2011-01-13T17:32:00.000-08:00

(AP) —The number of Illinois properties facing foreclosure increased 15.4% last year, a much sharper rise than the country saw, according to a report.

Properties in the state received 151,304 foreclosure-related filings in 2010, according to a report released Thursday by Irvine, Calif.-based online distressed-property listing firm RealtyTrac Inc.

Only Arizona, California, and Florida had more total filings.

In Illinois, one in every 35 homeowners received a notice of foreclosure last year, the ninth-highest rate in the U.S., according to Irvine, Calif.-based RealtyTrac.

In the U.S., one in 45 households received a foreclosure-related filing last year, up 1.67% percent from 2009.

Illinois was one of five states — along with California, Florida, Arizona and Michigan — that together accounted for more than half of the country's foreclosure activity last year. In these states, a combined total of almost 1.5 million households receiving a filing, despite year-over-year decreases in California, Florida and Arizona.

And the bleakest year in the country's foreclosure crisis has only just begun.

Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and more will miss payments as they struggle with job losses and loans worth more than their home's value, industry analysts forecast.

"2011 is going to be the peak," said Rick Sharga, a senior vice-president at RealtyTrac.

The outlook comes after banks repossessed more than 1 million homes in 2010, RealtyTrac said Thursday. That marked the highest annual tally of properties lost to foreclosure on records dating back to 2005.

The pace slowed in the final two months of 2010 as banks reviewed their foreclosure processes after allegations surfaced in September that evictions were handled improperly. Under increased scrutiny by the government, lenders temporarily halted taking actions against borrowers severely behind on their payments.

However, most banks have since resumed their eviction processes, and the first quarter will likely show a rebound in foreclosure activity, Sharga said.

Foreclosures are expected to remain elevated through the year as homeowners contend with stubbornly high unemployment, tougher credit standards for refinancing and falling home values. Sharga said he expects prices to dip another 5 percent nationally before finally bottoming out. The decline will push more borrowers underwater on their mortgages. Already, about one in five homeowners with a mortgage owe more than their home is worth.

The pain likely will be the most acute in states that have already been hit hard. That includes former housing boom states Nevada, Arizona, Florida and California, along with states that are suffering most from the economic downturn, including Michigan and Illinois.

Nevada posted the highest foreclosure rate in 2010 for the fourth straight year, despite a 5 percent decline in activity from the year before. One in every 11 households received a foreclosure filing last year in the state. In December, foreclosure activity increased 18 percent from November with a 71 percent spike in bank repossessions.

Arizona and California also showed sharp December increases in the number of homes banks took back, at 52 percent and 47 percent, respectively. Arizona, along with Florida, finished the year at No. 2 and No. 3 for the highest foreclosure rates.

RealtyTrac tracks notices for defaults, scheduled home auctions and home repossessions — warnings that can lead up to a home eventually being lost to foreclosure.

Chicago home sales plummet 34% in November

2010-12-22T17:07:00.000-08:00

(Crain’s) — Chicago-area home sales continued to slide in November, falling roughly 34% from a year earlier, according to the Illinois Assn. of Realtors.

In the nine-county Chicago region, 4,518 single-family homes and condominiums were sold in November, down 34.3% compared to 6,878 in November 2009, the Realtors said in a release Wednesday.

In the city of Chicago, sales fell 38.5% last month, to 1,144 vs. 1,859 in November 2009. Year-to-date metro and city sales were relatively flat, compared to last year, the association said.

“November home sales reflect the consumers’ cautious mood about the economy and jobs combined with normal seasonal slowdown in activity and a sizable impact from the tax credit that ramped up home sales a year ago due to the original tax credit deadline of Nov. 30,” association President Sheryl Grider Whitehurst, development and operations coordinator for Peoria-based Traders Realty, said in the release.

For the first six months this year, Chicago-area sales rose each month compared with the same month in 2009. But local sales have fallen each of the past five months compared with the year-earlier period.

The Chicago area’s median price — at which half the homes sell for more and half for less — declined 6.9% to $175,000, compared to $188,000 in November 2009.

The median price in the city of Chicago dropped 4.2% to $206,000, compared to $215,000 in November 2009.

The sales figures include new and existing homes. The nine-county Chicago Area consists of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will counties.

Chicago : Case-Shiller index falls after rising 5 months

2010-12-01T19:24:00.000-08:00

(Crain's) — An index of local home prices fell in September after five months of gains, mirroring a broader decline in the largest U.S. cities amid a faltering housing market.

The Standard & Poor's/Case-Shiller index of Chicago-area single-family home prices declined 1.5% from August to September and was down 5.6% from year-ago levels, according to a report released Tuesday.

Prices fell on a month-over-month basis in 18 of the 20 U.S. metropolitan areas tracked by Standard & Poor's. An index of the 20 U.S. cities fell 0.7% in September but was up 0.6% from a year earlier, the report said.

Federal homebuyer tax credits boosted home purchases and prices earlier this year, but broader economic problems — high foreclosure rates, a weak job market — have held the market back since the credits expired at the end of April.

“While some of the bad numbers may reflect the end of the government's tax incentive for first time home- buyers, there are other problems weighing on the housing market,” David M. Blitzer, chairman of the index committee at Standard & Poor's, said in a news release. “The national economy is certainly the number one issue for housing. Additionally, there is a large supply of houses on the market and further, hidden, supply due to delinquent mortgages, pending foreclosures or vacant homes.”

Just two major metro areas, Washington, D.C., and Las Vegas, recorded month-over-month price gains. Cleveland posted the biggest decline, 3%.

An index of local condominium prices fell 2.4% from August to September and was down 9.3% from September 2009, according to Standard & Poor's. The condo index is down 22.5% from its September 2007 peak.

Downtown condo sales ‘kind of glued in place’

2010-11-22T16:02:00.000-08:00

(Crain’s) — The downtown condominium market still has a pulse, but it’s hard to find.

Downtown developers sold 111 condos and townhomes in the third quarter, down from 150 in the second quarter but up from 56 a year ago, according to a report by Appraisal Research Counselors, a Chicago-based consulting firm.

Developers are on pace to end 2010 with about 600 sales, matching the depressed levels of the past two years and about a tenth of boom-era annual sales.

“Right now, we’re just kind of glued in place,” says Appraisal Research Vice-President Gail Lissner. “We’re just not seeing a lot of movement.”

What little movement there is can be found in less-expensive projects that cater to first-time buyers, or in developments that have slashed prices or hired auctioneers to spur sales. The market has lost momentum since federal homebuyer tax credits expired in April, and few observers see anything on the horizon to give it another push. Many would-be buyers are renting apartments for the time being.

“Due to the expiration of the tax credit, continued concerns about the economy and job market, worries about the stability of housing prices, and the difficulty in selling an existing residence and securing financing, many buyers continue to remain on the sidelines for the near term,” the Appraisal Research report says.

Many developers are still sitting on dozens of unsold condos in buildings they completed in the past few years, preventing them from paying off overdue construction loans.

The distress has attracted vulture investors like Crescent Heights Inc. circling the market for bulk condo sales. The Miami-based developer plans to acquire about 200 unsold units in the Astoria Tower, a 30-story building at 21 E. Ninth St. that opened last year. A Crescent Heights executive declines to comment.

But the condo glut is shrinking. Developers had 3,402 unsold units at the end of the quarter, down from 7,689 in third-quarter 2007, according to Appraisal Research.

Construction has all but stopped, allowing demand, as weak as it is, to catch up with supply. The inventory of unsold units also has dropped as developers have cancelled projects before breaking ground or switched over to rental; developers have taken 1,420 condos and townhomes off the market this year after removing 1,041 in 2009, according to Appraisal Research.

“There are fewer and fewer competitors every quarter,” says Colin Kihnke, president of CMK Development Corp., the Chicago-based developer of a 46-story tower at 235 W. Van Buren St.

Buyers have signed contracts for about 460, or 64%, of the building’s 714 condos and closed on roughly 40% of the units, he says. With about 250 condos left, CMK isn’t out of the woods yet, but it has plenty of time to get the job done. The project’s construction loan doesn’t come due until 2013, including extensions written into the loan agreement, Mr. Kihnke says.

In addition, 235 W. Van Buren offers lower-priced units that appeal to first-time buyers, the strongest segment of the market. Condos in the building start at $179,900 for a studio and run up to $1.1 million for a penthouse, with an average price of $319 a square foot, according to Appraisal Research.

Still, sales have been slow at the building, which has reported just 20 purchase contracts in the past year. And the tight lending climate remains an obstacle, even though mortgage rates are near historic lows.

“You’ve got to work with a purchaser who may need to pay off a credit-card bill or pay off a car (to qualify for a loan) — crazy stuff,” Mr. Kihnke says. “It’s a different world.”

Late house payments rise

2010-11-22T15:58:00.000-08:00

(AP) — The rate of late mortgage payments in Illinois rose in the third quarter, according to a report.

Illinois’ rate of borrowers 60 days or more past due on their home loans was 6.55 percent in the third quarter, up from 5.95 percent in third-quarter 2009 and higher than the national rate of 6.44 percent, according to credit rating firm TransUnion.

Illinois’ increase was 11th-highest in the country, according to Chicago-based TransUnion.

Late mortgage payments jumped sharply in several Northeastern states during the third quarter, while the national delinquency rate rose at a far slower pace.

The rate of borrowers who were 60 days or more past due on their home loans jumped in New York, New Jersey, Maine, Connecticut and Delaware for the three months ended Sept. 30 compared with the year-ago period, according to TransUnion.

Pennsylvania, Vermont, Rhode Island, Maryland and New Hampshire also saw higher delinquency in the quarter, but the increases were not as substantial.

"The whole Northeast is experiencing a little bit of an increase," said FJ Guarrera, vice president in TransUnion's financial services business unit. Because the spikes were only seen for one quarter, it's too early to tell if they represent a new trend.

Guarrera noted the region has been somewhat insulated from the severe foreclosure problems seen in other states. Home values have not fallen as sharply either, he noted. The jumps could be lagging effects from the overall economic downturn, but more data is needed before any conclusions can be made.

"We'll keep an eye on the Northeast, but there's no evidence yet that there's a problem brewing," he said.

TransUnion said the national delinquency rate rose to 6.44 percent of mortgage holders, from 6.25 percent in the 2009 third quarter.

While up year-over-year, the national rate showed a marked decrease from the second quarter, when it was 6.67 percent. TransUnion predicts it will fall to 6.21 percent by the end of the year.

While that's a significant improvement from the 7.89 percent record reached in the fourth quarter of 2009, it's still well above the historical delinquency average between 1.5 and 2 percent. The No. 1 factor in the decreased national rate is foreclosures that are completed, Guarrera said, followed by successful loan modifications and other workout programs that have helped homeowners bring their payments current.

There is also evidence that consumers have become more fiscally responsible, he said, and have better control over their use of credit than before the downturn.

TransUnion tracks mortgages that are two months past due as an indicator of potential foreclosure, because of the difficulty involved in coming up with three payments to bring an account current. The data is culled from the company's database of 27 million consumer records.

Overall, 16 states saw a year-over-year delinquency rate decrease, with notable drops in California and Arizona, two of the states hit hardest by the plunge in housing prices and foreclosures.

California in particular saw a "drastic improvement," Guarrera said. The delinquency rate in the Golden State fell to 9.64 percent from 10.18 percent last year.

Guarrera said a property market recovery and the fact that many foreclosures have worked through the process are helping reduce California's problem mortgages. By the end of the year, TransUnion is predicting the delinquency rate in the nation's most populous state could drop to 9.5 percent — and by the end of 2011 it could be down to 7.28 percent.

Arizona saw its rate drop to 9.96 percent from 10.37 percent.

Nevada, another of the states where the foreclosure crisis has been most severe, saw its rate rise to 15.12 percent from 14.53 percent. And Florida's rate rose to 14.63 percent from 13.34 percent.

Guarrera said the rates in those states are likely to remain in double digits through the end of 2011. "These are still areas of concern," he said. "Speculation, overbuilding and a decrease in demand has impacted these states in particular and they'll take longer to improve."

The lowest delinquency rates in the nation continued to be in North Dakota, at 1.52 percent, and South Dakota, at 2.24 percent.

The average national mortgage debt per borrower again decreased in the quarter, to $190,176 from $193,121 last year. The highest average mortgage debt per borrower continued to be the District of Columbia at $368,255, followed by California at $342,695 and Hawaii at $309,536. The lowest average mortgage debt per borrower remained in West Virginia at $100,263.

Home Prices Fall in Half of U.S. Cities

2010-11-11T17:31:00.000-08:00

Home prices fell in half of U.S. cities in the third quarter as banks stepped up repossessions of properties in default.

The median price of a single-family home dropped in 76 of 155 metropolitan areas measured, the National Association of Realtors said in a report today. Prices in Ocala, Florida, slumped 20 percent for the biggest decline. Palm Bay, Florida, and Tucson, Arizona, followed with a 15 percent slide. The median U.S. price fell 0.2 percent to $177,900.

The U.S. housing market is struggling as lenders seize a record number of properties and unemployment hovers near a 26- year high. Banks took over 288,345 homes in period covered by the Realtors report, up 22 percent from a year earlier, according to RealtyTrac Inc., a data firm in Irvine, California. Foreclosures boost the supply of available homes and reduce prices because they sell at a discount.

“The bottom has proven to be quite elusive,” said Stan Humphries, chief economist of data firm Zillow.com in Seattle. “There could be another 5 percent coming off the national market” as prices decline further, he said.

The median price of a single-family home in the New York metropolitan area climbed 2.8 percent in the third quarter. The Edison, New Jersey, region had a 3.5 percent gain and prices in the Boston metropolitan area rose 5.3 percent, the report said.

The best-performing markets included Burlington, Vermont, with a price increase of 18 percent; Elmira, New York, up 17 percent; and Dallas-Fort Worth, which gained 14 percent.

In a separate report today, the Realtors group said U.S. sales tumbled 25 percent to a 4.16 million seasonally adjusted annual pace in the third quarter from the previous three months. The pace was 21 percent below the 5.28 million rate of the year- earlier period.

The U.S. homeownership rate remained at a 10-year low of 66.9 percent in the third quarter, the U.S. Census Bureau said in a Nov. 2 report.

Chicago home sales down 22% in third quarter

2010-11-10T20:04:00.000-08:00

(Crain’s) — Chicago-area home sales fell more than 22% in the third quarter compared to the same period last year.

In the nine-county Chicago region, buyers closed on 16,520 single-family homes and condominiums, compared to 21,297 sales in the third quarter of 2009, according to a release Wednesday from the Illinois Assn. of Realtors.

In the city of Chicago, sales of homes and condos declined 23.1%, to 4,477, compared to 5,820 sales in the same period last year.

The association attributed the declines to a weak economy, persistent joblessness and the April 30 expiration of a federal tax credit for homebuyers.

“For the housing market to move forward in this post-stimulus environment will require much stronger signals that the economy, jobs and foreclosure outlooks are improving,” Sheryl Grider Whitehurst, the association’s president and development and operations coordinator for Traders Realty in Peoria, said in the release.

The area’s median price — at which half the homes sell for more and half for less — fell 8% to $188,666 in the third quarter, compared to $205,000 in the same period last year.

The median price in Chicago decreased 16.1% to $192,900, compared to $230,000 in third-quarter 2009, according to the association.

The association's sales figures include new and existing homes. The nine-county Chicago Primary Metropolitan Statistical Area consists of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.

Chicago-area home sales fall for third straight month

2010-10-25T16:10:00.000-07:00

(Crain’s) — Home sales in the Chicago area plunged in September, the third straight month of year-over-year declines.

In the nine-county Chicago region, sales of single-family homes and condominiums decreased more than 22% to 5,327, compared to 6,862 sales in September 2009, according to a release Monday from the Illinois Assn. of Realtors.

In the city of Chicago, sales of homes and condos in September dropped nearly 27% to 1,403, compared to 1,918 sales in September 2009.

But the market hasn’t given back all the gains it made in 2010.

Year-to-date sales in the Chicago area are up 10.5%, compared to the first nine months of 2009, though prices have sharply decreased as foreclosures and short sales continue to flood the market.

“Distressed properties are driving sales, putting pressure on the overall median price of homes,” Mabel Guzman, president of the Chicago Assn. of Realtors and a broker at Chicago-based Su Familia Real Estate, Chicago, said in the release.

The association says a weak job market, as well as the April 30 expiration of the federal tax credit for homebuyers, contributed to the declines. The state's unemployment rate improved to 9.9% in September, compared to 10.1% in August, but the rate remains historically high.

“The slow pace of employment recovery is certainly dampening housing demand,” Geoffrey J. D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois, said in the release. “In particular there is increasing concern that an employment rebound may not occur to any significant degree until late 2011.”

The area's streak of 12 consecutive months of year-over-year home sales increases ended in July, when sales dropped 25.1%. Sales declined nearly 20% in August.

The area’s median price — at which half the homes sell for more and half for less — dropped 12.1% last month to $175,000, compared to $199,000 in September 2009.

In Chicago, the decline was more dramatic, with the median price sliding 20% to $180,000, compared with $225,000 in September 2009, according to the association.

Foreclosures Rise; Repossessions Set Record

2010-09-16T07:22:00.000-07:00

US foreclosure activity rose in August from the previous month, and banks and lenders took ownership from homeowners at a record pace, according to a new report released Thursday.

Bank repossessions, often the final step in the foreclosure process after a home fails to sell at auction, increased about 3 percent from the month before to 95,364, a record high. At the same time the number of properties that received default notices—the first step in the foreclosure process—decreased 1 percent from a month ago and fell 30 percent from a year ago, a sign that lenders are focusing on their backlog of foreclosure inventory before tackling new distressed loans, according to foreclosure listing website RealtyTrac, which released the report.

Overall, foreclosure fillings rose 4.18 percent in August from the previous month, and were down 5.48 percent from a year ago. In all, 338,836 properties were in the foreclosure process. One in 381 U.S. households received a foreclosure notice in August. (Foreclosure notices are defined as a default notice, auction sale notice or bank repossession.)

“There is a buildup in delinquent loans that are not in foreclosure,” said Rick Sharga, senior vice president of RealtyTrac, adding that banks and lenders are slowing the process to avoid a drop in home prices. “It’s a managed slowdown more than anything else,” he said.

“The underlining conditions haven’t improved,” Sharga added, referring to high unemployment and falling home prices in certain markets.

The ten states with the highest foreclosure rates were little changed from the previous month, according to the RealtyTrac report. For the 44th straight month, Nevada had the highest foreclosure rate in the country with one in every 84 properties in the state getting a foreclosure notice. (Nevada also has the highest unemployment in the country.)

Florida ranked second with one in every 155 households receiving a notice, followed by Arizona (one in 165 households), California (one in 194 households) and Idaho (one in every 220 households.) (See the full list in our slideshow.)

Vermont had the lowest rate, with one in every 18,389 properties receiving a foreclosure notice.

The RealtyTrac report comes a day after the Mortgage Bankers Association reported that demand for home loans fell even though mortgage rates were at record lows. Also on Wednesday, real estate website Trulia.com reported that homeowners nationally slashed more than $29 billion from their asking prices in August, as they tried to lure buyers stalled by unemployment.

Existing Home Sales Dive 27.2 % to 15-Year Low

2010-08-24T08:26:00.000-07:00

(Reuters) - Sales of previously owned U.S. homes took a record drop in July to their lowest pace in 15 years, suggesting further loss of momentum in the economic recovery.

As the National Association of Realtors issued the report, Chicago Federal Reserve President Charles Evans warned that the risk of a double-dip recession was higher than six months ago although he did not think output would contract, describing the recovery as ongoing but modest.

Existing home sales dropped a record 27.2 percent from June to an annual rate of 3.83 million units, the lowest since May 1995. June's sales pace was revised down to a 5.26 million-unit pace from a previously reported 5.37 million.

Analysts polled by Reuters had expected sales to fall 12 percent to a 4.70 million-unit rate last month.

"This is a worrisome report and while it reflects the volatility caused by the end of the (government home-buyer) tax credits, it also indicates a deterioration in the underlying trend for housing demand," said Michelle Meyer, senior U.S. economist at Bank of America Merrill Lynch in New York.

"For the overall economy, the dangerous link to housing is home prices and this report signifies that home prices should fall considerably faster, which could tip the economy back into a recession. We are, however, not quite there yet but this is a worrisome report."

U.S. stocks (^SPX - News) added to losses on the report, while prices for safe-haven government debt extended gains. The U.S. dollar fell against the yen and euro.

The housing market has been mired in weakness following the end of a homebuyer tax credit in April, which pulled forward sales and building activity.

The surprisingly weak home sales data added to signs that the economy was rapidly losing strength, even though the drop may have been exaggerated by the end of a popular housing tax credit. Stubbornly high unemployment has burdened recovery from the longest and deepest recession since the Great Depression.

The government on Friday is expected to revise down growth in second-quarter gross domestic product to an annual pace of 1.4 percent from 2.4 percent, according to a Reuters survey.

The recovery which started in the second half of 2009 has largely been driven by government stimulus and manufacturing as businesses replenish depleted inventories.

With home sales tumbling, the inventory of previously owned homes for sale rose 2.5 percent to 3.98 million units from June, representing a supply of 12.5 months -- the highest since at least 1999 and up from June's 8.9 months.

The jump in the supply of homes was almost double the six to seven months' supply considered to be a healthy level.

Last month foreclosed properties accounted for 22 percent of sales while short sales made up 10 percent. First-time buyers accounted for 38 percent of transactions, the lowest in 12 months.

The national median home price rose 0.7 percent from July last year to $182,600.

Pimco's Gross pushes mass refinancing during a housing summit

2010-08-17T11:43:00.000-07:00

Investment Management promoted the idea of allowing homeowners by the masses to refinance mortgages at reduced rates. He said homeowners paying more than 5% interest could refinance with loans backed by the Federal Housing Administration, Fannie Mae and Freddie Mac. Gross told reporters that the refi idea doesn't "have a ghost of a chance," while other panelists during a housing summit avoided addressing the subject.

more at http://www.npr.org/templates/story/story.php?storyId=129253980

Bulk buyer pays $22.5 million for 272 Coconut Creek condos in Florida

2010-08-10T05:23:00.000-07:00

A Massachusetts investment firm has paid $22.5 million for the remaining 272 units at Olivine at the Township Condominiums in Coconut Creek.

The July 30 deal is one of 60 bulk condo sales worth $1.6 billion across South Florida during the past two years, according to CondoVultures.com, a Bal Harbour-based real estate firm.

Forest Properties Management of Newton, Mass., paid $82,720 per unit at Olivine. The deal was arranged by Atlanta-based ARA, a privately held investment-advisory brokerage firm. The 372-unit property near Sample Road previously sold 100 units at an average price of $227,415.

Miami-based Prestige bought Olivine near the peak of the housing boom in July 2005 for $190,000 a unit. When the market turned, Prestige struggled to sell the condos and eventually defaulted on its loan, Beebe said.

Prestige hired a property management firm in 2007 that was "able to get the property stabilized as a rental even though it's really a condo," Beebe said.

The average rent at Olivine is $1,270 a month, he said.

Florida Leads Nation in Foreclosures in First Half of 2010

2010-07-29T19:32:00.000-07:00

Florida led the nation in foreclosures in the first six months of the year, according to new data released this morning. The Miami-Fort Lauderdale-Pompano Beach metropolitan area received more foreclosure-related warnings in the first half of this year than any other, foreclosure listing firm RealtyTrac Inc. said. Florida accounted for nine of the top 20 metro areas with the highest foreclosure rates. [Source: AP]

RELATED:
» South Fla. Ranks 10th Nationwide [South Florida Sun-Sentinel]

Chicago Case-Shiller index up for 2nd straight month

2010-07-27T20:49:00.000-07:00

(Crain’s) — An index of local home prices rose in May for the second straight month as federal tax incentives pulled more buyers into the market.

The Standard & Poor’s/Case-Shiller index of Chicago-area single-family home prices rose 1.2% from April to May, but was still 1.5% lower than it was in May 2009.

Chicago was among 19 of 20 U.S. cities tracked by Standard & Poor’s where prices rose from April to May, according to a report released Tuesday. An index of the 20 cities rose 1.3% over the same period and was up 4.6% from May 2009.

Overall, the gains underscore the impact of the government's homebuying tax credits. Buyers rushed to purchase before the credits expired at the end of April.

May is typically a strong month for selling homes. Most economists don't expect the price gains to last through the year, and many predict home prices will fall through the rest of the year.

"I bet in six months 15 to 20 cities will have falling prices," said IHS Global Insight economist Patrick Newport. He predicts prices will fall another 6% to 8% before turning around next year.

Nationally, prices have risen 5.1% from their April 2009 bottom. But they remain 29% below their July 2006 peak.

Sales of previously occupied homes fell 5.1% in June. New home sales jumped last month, but it was the second-weakest month on record and it came after sales tumbled in May.

An index of Chicago-area condominium prices rose 2.7% in May from April but fell 5.2% from the year earlier.

Chicago : home sales up for 12 straight months

2010-07-22T16:09:00.001-07:00

(Crain’s) — Chicago-area home sales have now increased every month for a full year, rising again in June compared with the same month in 2009.

In the nine-county Chicago region, sales of single-family homes and condominiums rose more than 27% to 9,085, compared to 7,140 homes sold in June 2009, according to a news release Thursday from the Illinois Assn. of Realtors.

In the city of Chicago, sales similarly jumped 27.5% to 2,526, compared to 1,981 homes sold in June 2009, the 10th consecutive month of higher year-over-year sales for the city.

A federal tax credit of up to $8,000 for first-time homebuyers and $6,500 for other buyers who signed contracts by April 30 helped the market, according to association President Mike Onorato. The deadline to close to get the credit recently was extended to Sept. 30.

“As the stimulus winds down, job growth and improved consumer and business confidence will be required to keep on a path toward recovery,” Mr. Onorato, broker-owner of Onorato Real Estate in Coal City, said in the release.

The median price in the Chicago area — at which half the homes sell for more and half for less — dipped 1.2% in June to $207,500, compared to $210,000 in June 2009.

In Chicago, the median price dropped 3.2% to $234,250, compared to $242,050 in June 2009, according to the Realtors.

Statewide home sales increased for the 10th consecutive month, rising 18.3% to 13,072, compared to 11,048 in June 2009. The state’s median price rose 2.5% to $170,000, compared to $165,825 in June 2009.

The association’s sales figures include new and existing homes. The nine-county Chicago Primary Metropolitan Statistical Area consists of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.

Home builders' optimism falls to 15-month low

2010-07-19T21:47:00.000-07:00

WASHINGTON (MarketWatch) -- U.S. home builders are turning increasingly pessimistic about their business after home sales dried up when a federal subsidy expired, according to the latest survey by the National Association of Home Builders.

The NAHB/Wells Fargo housing market index fell two points to 14 in July, down from a downwardly revised 16 in June. It's the lowest since April 2009, the NAHB said Monday.

At 14, the index shows that about one in seven builders has a favorable view of the housing market. And builders' views on prospective sales were the gloomiest since March 2009.

"The pause in sales following expiration of the home buyer tax credits is turning out to be longer than anticipated due to the sluggish pace of improvement in the rest of the economy," said David Crowe, chief economist for the builders' advocacy and lobbying group.

The decline in the builders' index in July "reflects a number of underlying market conditions that builders are seeing, including hesitant home buyers, tight consumer credit, and continuing competition from foreclosed and distressed properties that are priced below the cost of construction," Crowe said.

Still, Crowe said he expects sales to rise about 10% this year, citing low mortgage rates, affordable prices and favorable demographic trends. Read the full release on the NAHB's Web site.

Economists had been looking for a two-point drop in the builders' index, down to 15 from June's original reading of 17, according to a survey conducted by MarketWatch.

The index, which peaked at 72 more than six years ago, has been below the breakeven point of 50 for 51 consecutive months and it bottomed at a record-low 8 in January 2009.

After more than two years of government support to buyers, the federal tax credit recently expired. Buyers needed to have signed a contract on a home by the end of April and now have until the end of September to close the deal.

Sales of new homes fell 30% in May after the tax credit expired, U.S. data showed. Housing starts fell 10%.

Over time, the NAHB index is correlated with changes in the government's data on housing starts, which will be released for June on Tuesday. Economists are expecting a 3% decline in starts to a seasonally adjusted annual rate of 575,000 in June, which would be down about 75% from the peak in 2006.

Details

All three components of the NAHB's index fell in July: The index for current sales dropped two points to 15; the index for future sales edged down one point to 21; and the index for buyers' traffic came in at 10, down three points.

Builder sentiment deteriorated in two of four regions.

It fell five points to 9 in the West, the lowest since April 2009. It also dropped five points in the South, to 14, the lowest since March 2009.

Sentiment rose one point in the Midwest to 15, and it increased seven points in the Northeast to 23.

Pending home sales plunge 30% in May

2010-07-01T09:43:00.000-07:00

WASHINGTON (MarketWatch) -- New sales contracts on existing homes fell sharply in May after a federal subsidy for buyers expired at the end of April, a trade group reported Thursday.

The pending home sales index plunged 30% in May after rising 23% between January and April, the National Association of Realtors reported. The index, which measures signed sales contracts on previously owned homes, was down 15.9% compared with the same month a year ago.

The pending home sales index is a leading indicator for sales of existing homes, which are recorded at the time of the closing.

The sharp drop in pending home sales mirrors the 33% drop in sales of new homes in May, which are also recorded at the time of the sales contract.

To qualify for the federal tax credit of up to $8,000, a buyer needed to sign a contract on the home by April 30 and needed to close on the sale by June 30. Congress passed legislation on Wednesday to give buyers until the end of September to close on the sale, after realtors and other groups complained about delays in closings.

Sales of existing homes held up well through May, with sales up about 13% compared with February. But everyone expects sales to fall off sharply in July and August with the expiration of the tax credit.

The tax credit was designed to spur sales and keep prices from falling further. Home prices have been roughly unchanged for the past 10 months, according to the Case-Shiller price index.

Many analysts believe the credit pulled sales forward that would have taken place any way.

"Without the tax credit, there will be more aggressive price negotiations between buyers and sellers," said Lawrence Yun, chief economist for the NAR. "The key test on whether the housing market can stand on its own without stimulus medicine will depend critically on private-sector job creation in the second half of the year."

House approves homebuyer tax credit extension

2010-06-30T02:34:00.000-07:00

NEW YORK (CNNMoney.com) -- The House of Representatives voted Tuesday to give first-time homebuyers three more months to close on their purchases and land an $8,000 federal income tax credit.

But the Senate had better act fast - the deadline is currently Wednesday.

The bill doesn't help anyone currently shopping for a home. Buyers must have signed a contact by April 30 to qualify for the tax break. At issue is when the deal must be finalized.

The House voted 409 to 5 to delay the closing deadline to Sept. 30 in a stand-alone measure. The move comes nearly a week after the Senate failed to advance a much larger jobs bill that contained the tax credit provision.

The smaller House bill would raise the deficit by $9 million over a decade.

An estimated 200,000 people may miss out on the tax credit because they won't be able to close by close of business Wednesday. Many are trying to take advantage of short sales, which are complicated deals to complete.

The measure also seeks to reduce fraud associated with the credit. Some 1,300 prison inmates are thought to have claimed and received more than $9 million in tax credits, according to a Treasury Inspector General for Tax Administration report released earlier this month. The bill would allow the Internal Revenue Service to disclose tax return information to prison administrators.

Senate Democrats introduced a similar bill Tuesday, with Majority Leader Sen. Harry Reid, D-Nev., saying the measure "should be passed swiftly."

In a related move, the House failed to pass a measure extending the deadline to file for unemployment benefits until Nov. 30. More than 1 million people are estimated to have exhausted this lifeline since the deadline expired earlier this month. The provision, which would raise the deficit by $34 billion, was also included in the Senate bill that failed to advance last Thursday.

The House is expected to take up the legislation again on Wednesday. The Senate bill introduced Tuesday evening would also extend benefits through November.

Prisoners, scammers profit on home-buyer tax credit

2010-06-26T08:33:00.000-07:00

The Internal Revenue Service doled out more than $27 million in fraudulent claims for the home buyers' tax credit on returns for 2008, including claims by prisoners serving life sentences and people who purchased their home before the credit was in effect, a U.S. Treasury Department report said Wednesday.

The IRS paid out $9.1 million to 1,295 people who were in jail at the time they said they bought a home, and 241 of those prisoners were serving life sentences, according to the report from the Treasury Inspector General for Tax Administration, which monitors the Internal Revenue Service. On average, that's slightly more than $7,000 per prisoner.

Another $17.6 million went to 2,555 people who bought their homes before the tax credit became law -- averaging out to about $6,890 per person.

In other fraudulent claims, the total cost of which the Treasury inspector general was not yet able to quantify, the same home was claimed by more than one taxpayer. About 10,280 people got a tax credit for a home that also was used by another taxpayer to claim the credit, according to the report. See the full TIGTA report (PDF).

"This is very troubling," said J. Russell George, the Treasury inspector general that oversees IRS activities. "While the IRS has taken a number of positive steps to strengthen controls and help prevent inappropriate credits from being issued, our audit found that additional controls are necessary to address erroneous claims for the credit."

In one case, 67 separate taxpayers claimed the credit on the same home. This type of fraud led the IRS to pay out "tens of millions of dollars" fraudulently, the report said.

What's more, at least 34 IRS employees were found to file claims "despite indications that they owned a home within the past three years," the report said. That's in addition to 53 IRS workers that the Treasury inspector general found filing fraudulent claims in 2009.

Congress created the first-time home-buyer provision -- a refundable tax credit -- in 2008 as in interest-free loan that taxpayers must pay back over 15 years. Lawmakers later removed the repayment requirement for subsequent home buyers and increased the maximum value of the credit. Congress also later expanded the tax break to include some people who were not first-time buyers.

The latest version of the tax credit is worth 10% of the home's purchase price, up to $8,000 for eligible first-time buyers and $6,500 for those eligible for the repeat-buyer credit. The tax-credit deadline required taxpayers to enter a purchase contract to buy a home by April 30.

Home Buyer Tax Credit Fraud Includes 1,295 Prison Inmates

2010-06-24T20:07:00.000-07:00

Despite efforts by the IRS to combat scams, thousands of individuals — including nearly 1,300 prison inmates — have defrauded the government of millions of dollars in home buyer credits, Treasury's inspector general reported Wednesday. 61 percent of the prisoners serving life sentences who received the credit were incarcerated in Florida.

[Source: USA Today]

Maryland's rising foreclosures rank among worst in nation

2010-06-13T13:16:00.000-07:00

Residential foreclosures in Maryland jumped nearly 7.5 percent from April to May, putting the state among the 10 worst states in the nation for foreclosures.

One in every 399 homes in Maryland received a foreclosure filing in May, according to Irvine, Calif.-based RealtyTrac. There were 5,852 filings in the month, a 65 percent increase from May 2009.

The worst state in the nation for foreclosures was Nevada, where one in every 79 homes is facing foreclosure. Between it and Maryland, which ranked 10th, are: Arizona, Florida, California, Michigan, Georgia, Idaho, Illinois, and Utah.

Heading in the opposite direction, foreclosures activity fell 3 percent nationally from April to May. May was the second month of declining foreclosures nationally, as foreclosure events fell 9 percent from March to April.

RealtyTrac defines foreclosures as properties that have either received default notices, foreclosure notices, or have had their properties foreclosed on.

Foreclosure Filings Drop in April - First Decline Since 2005, says RealtyTrac

2010-05-13T20:25:00.000-07:00

Nationwide, RealtyTrac Inc. is reporting the first annual decline in monthly foreclosures since it started tracking filings in 2005. The Irvine, Calif.-based firm says foreclosures may be leveling off, even though they likely will remain at a high level for a while. In Florida, many counties report foreclosure filings are down for April, 2010, as compared to previous months. Broward foreclosures were down 30 percent in April from a year ago. Palm Beach county had far fewer filings in April -- 3,037 -- but that was still a 7 percent increase from a year ago. In Southwest Florida, Sarasota County's 927 filings represented a 31 percent drop from a month ago and a 28 percent decline from April 2009, while Charlotte County's 561 filings represented a 42 percent drop from the previous month and a 26 percent decline from a year ago.

Chicago-area home prices show first signs of recovery after three-year slide

2010-04-26T07:37:00.000-07:00

Home prices are rising again in some Chicago-area neighborhoods, in a sign that the local housing market is nearing the end of a devastating three-year slide.

Single-family home prices rose in 56 of 253 Chicago-area ZIP codes last year, according to Fiserv Inc., which calculates the widely followed Case-Shiller Home Price Index. It's the first gain since 2006 in any of the local ZIP codes Fiserv tracks.

Declines slowed sharply across the region, suggesting the worst erosion of home values is over. Prices in the area fell 2.8% last year, compared with 16.3% in 2008.

The data, provided exclusively to Crain's, offer the most detailed and accurate survey of single-family home prices. Fiserv tracks price changes at the ZIP-code level and compares repeat sales of the same properties.

The numbers reveal an uneven recovery, with gains concentrated in neighborhoods hit early by the foreclosure crisis. Double-digit declines continue in outlying suburbs.

It's "very good news" that the market "is beginning to show signs of stability in selected areas," Schaumburg-based housing consultant Tracy Cross says. "On the negative side, you still have areas that are saturated with a high number of foreclosures."

As prices approach a bottom, it's possible to start assessing the damage. Parts of metropolitan Chicago have seen a decade or more of home price appreciation erased in three years. At the end of 2009, the local price index had plunged 25.8% from its peak in the first quarter of 2007 to its level in first-quarter 2003.

ANOTHER SLIP

Home values aren't expected to regain much ground soon. Fiserv predicts Chicago-area prices will slip another 2.6% this year and rise just 0.2% in 2011.

Falling prices, low interest rates and the federal housing tax credit have helped boost demand, but generally not enough to offset high foreclosure rates and the miserable job market.

"Until we start creating jobs on a regular basis, I don't think (the market) is going to turn around," says Prudential Rubloff agent James Horwath of Chicago. "I think it's going to be another tough year still."

Over the past three years, prices fell in every ZIP code Fiserv tracks, but some areas weathered the slump better than others. The picture is bleak in suburbs like Cicero and South Side neighborhoods like South Shore, which have suffered drops exceeding 40% since 2006. Homeowners from the Gold Coast north to Uptown fared the best, with declines ranging from 11% to 15.3%.

But buyers are "finally getting off the fence," says Jennifer Ames, a Coldwell Banker agent who works in affluent North Side neighborhoods like Lincoln Park and Lakeview.

Ms. Ames brought a four-bedroom brick Victorian at 852 W. Webster Ave. to the market on Feb. 22 with an asking price of $1.4 million. A buyer signed a contract on the house three weeks later.

"We're definitely seeing the spring market we didn't see last year," Ms. Ames says, declining to disclose the sale price.

While prices fell slightly on her turf last year — the 60614 ZIP code sustained a 2.5% drop — they surged in the least likely of places: economically depressed Chicago neighborhoods like Austin, which saw a 20.2% gain, and south suburban Harvey, which led the market with a 28.4% increase.

It's unclear, bordering on inexplicable, why prices bounced back last year in communities with soaring unemployment and foreclosure rates, but one pattern is obvious: The ZIP codes that gained the most last year suffered some of the biggest price drops in 2008.

The same trend has emerged in other cities, Fiserv Vice-president David Stiff says. Though he hasn't studied the Chicago market, Mr. Stiff posits that foreclosure sales in prior years may have depressed values in some ZIP codes so much that prices are surging as distressed sales taper off and the market starts returning to normal.

HOLDING OFF

James Shilling, director of DePaul University's Institute for Housing Studies, says lenders that foreclosed on homes in the most distressed areas are holding off on selling those properties so as not to flood the market and depress prices.

Whatever the reason, it will be several years before homeowners in many ZIP codes get back to boom-era prices. Home values in some south suburbs are down to 1998 to 2000 levels, according to Wisconsin-based Fiserv. Crete was the biggest long-term loser, notching price declines of 5.3% over the past decade, while Lincoln Square led the Chicago market with a 10-year gain of 72.2%.

Last year, single-family home values rose 1.2% in Lincoln Square's 60625, one of 56 local ZIP codes to notch a gain, according to Fiserv. Other winners included Oak Park's 60302, with a 4.2% increase; 60618, covering Irving Park and Avondale, 4.1%, and 60640 in Edgewater and Uptown, 2.1%.

Though some areas may be close to turning a corner, they don't include distant suburbs like Waukegan, Round Lake and Zion, which suffered double-digit declines last year. Prices fell 10.2% in west suburban Yorkville, where foreclosures and overdevelopment have depressed prices.

The Yorkville market, says Century 21 Pro-Team agent Kathy Grabow of Aurora, "just got caught with overbuilding."

Chicago home price drop in January biggest among 20 cities

2010-03-31T09:39:00.000-07:00

(AP) — An index of Chicago-area single-family home prices posted the biggest drop in January of 20 cities, according to a report Tuesday.

The Standard & Poor's/Case-Shiller home price index for the Chicago area fell 0.8% on a seasonally adjusted basis in January, compared with December. The second-biggest decline in the 20 cities the indices track was in Seattle, down 0.6%.

The biggest monthly gain was in Los Angeles, where prices rose 1.8% from December.

Local prices fell 4.3% in January compared with January 2009, a much bigger drop than the 0.7% year-over-year decline for the 20 cities combined.

The decrease for the 20-city index was the smallest annual drop in almost three years and in line with analysts' expectations, according to Thomson Reuters.

“There was some positive momentum in home prices in January,” wrote Ian Pollick, a portfolio strategist with TD Securities.

Better still, prices rose 0.3% from December to January on a seasonally adjusted basis, the eighth consecutive monthly gain. Among the 20 cities in the index, 12 rose.

The index, released Tuesday, is up nearly 4% from its bottom in May 2009, but still almost 30% below its May 2006 peak.

Still, there are signs that last year's housing rebound won't last. Home sales sank during the winter, and government incentives that have propped up the market are ending.

Another reason for the positive news is simply that the Case-Shiller index measures a three-month average of home prices, so January's report includes November’s strong home sales.

“It is only a matter of time before the index records a double-dip in prices,” wrote Paul Dales, U.S. economist with Capital Economics, who forecasts a 5 percent drop. The market will be tested in the second half of the year, he wrote, when a tax credit that has boosted sales is gone.

Home Sales Tank in February

2010-03-29T18:27:00.000-07:00

In a surprise, U.S. new-home sales fell 2.2% in February, to a record-low annual pace of 308,000. Existing home sales also fell in the month. Both figures were affected by severe winter weather.

Mortgage Delinquencies Q4 ' 2009

2010-03-29T18:25:00.000-07:00

The U.S. mortgage picture worsened in the fourth quarter, with delinquencies surging, the Office of the Comptroller of the Currency reported:

14%: percentage increase in mortgage delinquencies in the fourth quarter -- the seventh straight quarterly rise
86.4%: share of current and performing mortgages in Q4
21.1%: jump in mortgages 90 days or more past due in the fourth quarter
16.5%: increase in percentage of prime borrowers seriously delinquent on their loans

Homebuyer Tax Credit Update

2010-03-06T08:20:00.000-08:00

The April 30, 2010, deadline is fast approaching to have purchased – or be under a binding contract to purchase – a home and still receive a tax credit under the best government-sponsored homebuyer incentive program to come along in decades. After that deadline, the program will most likely disappear for good.

Do You Qualify?
Under the federal program, first-time homebuyers can receive a tax credit of up to $8,000, and current homeowners can receive a tax credit of up to $6,500 when they buy a home as their principal residence.

A first-time homebuyer is defined as someone who has not purchased a primary residence in the past three years.
Current homeowners must have lived in the same principal residence for at least five consecutive years out of the eight years leading up to the date of the purchase to qualify.
The extended credit applies to homes purchased between Nov. 7, 2009 & April 30, 2010.
Form 5405 must be completed & filed with your taxes in order to receive the tax credits.

Pending U.S. Home Sales Decline in Sign Tax Credit Failing to Lure Buyers

2010-03-04T14:24:00.000-08:00

(Bloomberg) -- Fewer Americans than expected signed contracts to purchase previously owned homes in January, indicating the extension of a tax credit is doing little to lure buyers.

The index of purchase agreements, or pending home sales, dropped 7.6 percent after a revised 0.8 percent increase in December, the National Association of Realtors announced in Washington. Other reports today showed factory orders increased and first-time jobless claims declined.

The drop in contract signings adds to evidence the housing market at the center of the worst recession since the 1930s is struggling to rebound after reports last week showed unexpected declines in purchases of new and existing homes. The market may get another blow this month when the Federal Reserve ends planned purchases of mortgage-backed securities.

“When you take away all the support from the housing market, the underlying demand for housing is a lot weaker than we thought,” said Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “We clearly pushed some demand forward, and there wasn’t that much demand to pull forward anyway. The housing recovery is going to be very, very slow.”

Builder shares fell after the report, with the Standard & Poor’s Supercomposite Homebuilding Index declining 0.8 percent at 4:22 p.m. in New York. The broader S&P 500 climbed 0.4 percent to 1,122.97.

States with the Highest Foreclosure Rates

2010-02-20T20:28:00.001-08:00

RANK	STATE	NUMBER OF HOUSEHOLDS IN FORECLOSURE
1	NEVADA	1 OUT OF 95
2	ARIZONA	1 OUT OF 129
3	CALIFORNIA	1 OUT OF 187
4	FLORIDA	1 OUT OF 187
5	UTAH	1 OUT OF 231
6	IDAHO	1 OUT OF 246
7	MICHIGAN	1 OUT OF 258
8	ILLINOIS	1 OUT OF 291
9	OREGON	1 OUT OF 338
10	GEORGIA	1 OUT OF 357

Homebuyer tax credit: No e-file and four-month delays

2010-01-18T11:20:00.000-08:00

NEW YORK (CNNMoney.com) -- Good news homebuyers: You can file for your $8,000 first-time buyer tax credit again.

Bad news: You still can't e-file your taxes if you want the cash. And there are long delays.

On Thursday, CNNMoney revealed that buyers who purchased their properties after Nov. 6 were unable to claim the refund because the Internal Revenue Service had yet to release a new form and instructions. But on Friday, the IRS finally posted the new form 5405.

The two-month delay was frustrating to Florida resident Charles Teschke. "We are not broke or anything, but nevertheless we were still counting on getting the tax refund to help pay for the appliances and stuff we needed for our new home," he said. "The IRS told me they estimate it will take four months for me to get my refund!"

First-time buyers were able to immediately file for the tax credit after Congress approved it last February as part of the stimulus program. All they had to do was file an amendment to their 2008 tax returns (the ones they filed last April) and claim the promised refund of 10% of the purchase price, up to $8,000.

What I did with my $8,000 tax credit

They were able to e-file, and they received their refunds promptly. One reader filed a claim the first week of August, and had the check by the third week in September.

But on Nov. 6 the rules changed. That's when Congress extended -- and expanded -- the tax credit, which was originally scheduled to expire on Nov. 30.

Now, the deadline is April 30, by when all contracts must be signed. (Closings must happen by June 30.) Plus, existing homeowners looking to trade up (or down) can qualify for a $6,500 refund.

And these new buyers can no longer file electronically. They have to mail in paper forms, including the new 5405, whether they are amending their 2008 taxes or claiming it on the 2009 taxes that are being filed this spring.

That is going to dramatically slow refunds, but taxpayers can't blame the IRS. Instead, it's people scamming the system who are at fault.

For example, in October tax preparer James Otto Price III was the first person convicted of this crime. He falsely claimed the credit for 15 clients.

So buyers must now file documentation with their taxes -- including proof of residency, a signed mortgage statement and drivers license -- which the e-file system is not equipped to handle.

"Because of the scams, the IRS started sending back the amended returns and asking for proof," said Mary Mellem of David & Mary Mellem, EAs & Ashwaubenon Tax Professionals. "The system has no way of sending along the documents they're requiring. Taxpayers must file a paper return instead."

The IRS points out that taxpayers can still use the electronic forms available on its Web site or consumer sites such as TurboTax; they just have to print them out, attach the proof and mail everything in. And that can take quite a while.

"Taxpayers are looking at another three months before they get their returns," said Mellem.

U.S. 2009 foreclosures shatter record despite aid

2010-01-14T05:03:00.000-08:00

NEW YORK (Reuters) - U.S. foreclosure actions shattered all records in 2009 and will do so again this year, with unemployment and wage cuts overcoming programs to remedy failing home loans, RealtyTrac said on Thursday.

A record 2.8 million properties with a mortgage got a foreclosure notice last year, jumping 21 percent from 2008 and 120 percent from 2007, the Irvine, California-based real estate data company found.

The loan failure rate -- and thus the fallout for home prices and the economy -- would have been even worse without foreclosure prevention programs and loan processing delays caused by sheer volume, the company said.

In many cases loan fixes don't stick, however, and so a new record of at least 3 million properties getting a filing is seen in 2010. Filings include notice of default, auction sale or bank repossession.

State, federal and private efforts to modify loan terms for at-risk borrowers either don't go far enough or are expanding too late to help many struggling homeowners on a permanent basis, many industry experts and economists agree.

"Until the lenders start to get into principal balance reduction you're going to continue to see high redefault rates," Rick Sharga, senior vice president at RealtyTrac, said in an interview.

"We haven't seen any appetite for that on the part of the lenders yet," he added.

One in every 45 households got at least one filing last year, a rate almost four times that of 2006.

On a quarterly basis, foreclosure activity did slow in the fourth quarter, declining 7 percent from the third, but rose 18 percent from the fourth quarter of 2008.

With unemployment surpassing 10 percent at the end of last year and many homeowners coping with wage cuts, timely mortgage payments got more challenging.

A foreclosure notice usually follows a pink slip by three to six months. This should ensure that even under the best case scenario there will be a high level of unemployment-related foreclosures throughout this year, Sharga said.

Refinancing to lower monthly costs was also out of the question for many homeowners because the value of their house fell below the size of their mortgage.

Despite some recent improvement, prices have toppled nearly 30 percent from their peak in 2006 through October, according to Standard & Poor's/Case-Shiller indexes.

Yale University economist Robert Shiller, a creator of the S&P/Case-Shiller home prices index, told Reuters on Tuesday he expects renewed price erosion in coming months.

Foreclosure notices were made on more than 349,000 properties in December, a 14 percent jump from November despite various moratoria, RealtyTrac said. It was the tenth straight month that notices topped 300,000, driving the year's total to a record of more than 3.9 million.

Nevada had the highest foreclosure rate for the third straight year, with more than 10 percent of households with loans getting at least one notice. Arizona and Florida were in second and third places. California, Utah, Idaho, Georgia, Michigan, Illinois and Colorado were the other states with loan failure rates among the 10 highest for U.S. states.

California, Florida, Arizona and Illinois accounted for more than half of all foreclosure actions in 2009 as more than 1.4 million properties got a notice.

BANKS SEEN HOLDING FIRE

Banks repossessed a record of more than 918,000 properties last year, 6.5 percent more than in 2008.

The pace at which banks start selling these houses is critical for gauging how much further home prices will fall.

Banks have half a million houses on their books yet to be put on the market, RealtyTrac said. There's another million properties in foreclosure and 5.5 million delinquent loans.

"The doomsday prognostications say that gives you 7 million properties that are all going to go back to the banks, that are all going to hit the market at the same time and we're going to have a smoking crater where there used to be a real estate market," Sharga said. "We just don't see that as being realistic."

It is widely seen in the best interest of banks, housing market and the economy for the banks to sell the foreclosed homes in a measured way to prevent prices from swooning anew.

"Because of gradual foreclosure bank sales we're looking at a long, slow, flat housing market recovery that probably won't feel much better until about 2013," he said. "But if it means we avoid a double dip in housing then that's probably a good thing."

10 years...no gain in home prices

2009-12-31T05:25:00.000-08:00

NEW YORK (CNNMoney.com) -- Taking into account inflation, home prices are actually lower than they were 10 years ago, according to a report from the National Association of Realtors released Wednesday.

The median home price in November 1999 was $137,600, NAR said, and by November 2009 it had risen 25% to $172,600. But with cumulative effect of inflation, prices are actually 3% lower in real terms.

The good news is that wages have risen in the past 10 years, so homes are now affordable than they had been, especially at the height of the boom in the middle of this decade, said Walter Molony, a spokesman for the Realtors.

The median home price peaked in June of 2006 at $231,000.

There have been other changes in the workings of the housing market over the past 10 years: More house hunting is now done online, a greater percentage of the homes purchased are in the suburbs and more multi-family home units -- condos, townhouses and coops -- are being bought.

There has also been an increase in the number of single folks buying homes on their own. Back in 1999, single men accounted for 9% of all home sales and single women 18%. It was families who formed the big majority of buyers, 66%, with unmarried couple at 6%.

Today, the number of single men buyers is up a point to 10% while single women are quite a bit more active in the market, making 21% of all purchases in 2009. The market share of families dropped to 60% and unmarried couple purchased 8% of all homes sold.

Chicago home prices fall in October

2009-12-29T14:17:00.000-08:00

(AP) — Chicago-area home prices showed the second-biggest drop in October of 20 metro areas, according to a report Tuesday.

Local prices fell 1 percent in October compared with September, the first drop after five straight monthly increases, according to seasonally adjusted data from the Standard & Poor's/Case-Shiller home price indices.

Home prices in the Chicago area were down 10.1 percent in October compared with October 2008.

Peter J. Birnbaum, president of Chicago-based Attorneys’ Title Guaranty Fund, thinks the October decrease can be attributed to timing, coming after the expiration of foreclosure moratoriums and at a time when many closings were to first-time homebuyers taking advantage of a federal tax credit.

Mr. Birnbaum expects local prices to decrease over the next year because of the high inventory of distressed properties.

“I think we’re going to see this for a while,” Mr. Birnbaum says of prices falling.

Nationwide, prices rose in October for the fifth month in a row, but the recovery continues to be uneven, with only 11 of the 20 metro areas tracked showing gains.

The 20-city S&P/Case-Shiller index released Tuesday edged up 0.4 percent to a seasonally adjusted reading of 145.36 in October from September.

The index was off 7.3 percent from October last year, nearly matching expectations of economists surveyed by Thomson Reuters.

The index is now up 3.4 percent from its bottom in May, but still almost 30 percent below its peak in April 2006.

Tampa, Fla., showed the biggest decrease in October from September, a seasonally adjusted 1.2 percent.

San Francisco and Detroit posting the largest increases. Dallas recorded a flat reading for the month.

"Coming after a series of solid gains, these data are likely to spark worries that home prices are about to take a second dip," David Blitzer, chairman of the index committee at Standard & Poor’s, said in a statement.

That happened in the early 1980s, he said, and the current housing recovery appears more solid.

The federal government has stepped in with an extraordinary level of support this year for the housing market. Home price gains since the summer reflect the rush of homebuyers trying to close their deals before the original expiration date of a federal tax credit. The Nov. 30 deadline was extended last month to April 30.

Besides a credit of up to $8,000 for first-time buyers, Congress expanded the program to include homeowners who have lived in their current properties for at least five years. They can now claim a tax credit of up to $6,500 if they relocate.

The Federal Reserve is also buying up $1.25 trillion in mortgage-backed securities to help keep interest rates at historical lows.

Goldman Sachs gains largest share of fees from IPOs

2009-12-29T04:42:00.000-08:00

Goldman Sachs earned $191.6 million helping companies with their initial public offering in 2009, taking the largest piece of the $923 million pie. Meanwhile, Citigroup dropped out of the top five, taking in $68.3 million. Bank of America took in the second-largest share, with $158.2 million in fee income.

http://www.bloomberg.com/apps/news?pid=20601208&sid=a9u7wpiDcJNI

Housing recovery hits snag as prices flatten out

2009-12-29T04:38:00.000-08:00

After four straight months of increase, house prices stood unchanged in October compared with September, according to the Standard & Poor's/Case Shiller Home Price index. The October index was down 7.3% compared with the same month last year. The biggest losers were Chicago, Atlanta and Tampa, Fla., while the biggest winners were Phoenix and San Francisco.

Tax credit extended and expanded

2009-11-09T05:57:00.000-08:00

The government has just extended and expanded tax credits for home buyers - and not just those buying for the first time.

First time home buyers can now receive an $8,000 tax credit through April 30, 2010
Home buyers who have lived in their residences for five years may now receive a credit of $6,500
The tax credit is now available to individuals earning up to $125,000, or $250,000 for couples

Today President Obama signed into law a bill that extends the $8,000 home buyer tax credit to April 30, 2010. Income limits for eligible home buyers have been increased to $125,000 for singles and $225,000 for couples. The new bill also expands the tax credit to include home owners who have lived in their primary residence at least five of the last eight years. Existing owners who sell their current home and make a home purchase will earn a tax credit of $6,500. Qualifying homes must have a purchase price at or below $800,000.

As the original November 30th deadline of the tax credit approached, many industry leaders and experts expressed a strong desire for an extension. The National Association of REALTORS® (NAR) forwarded more than 500,000 letters to congressional leaders and last week made close to 13,000 calls to Senate offices in an attempt to garner necessary support for the bill. Sen. Johnny Isakson (R-Ga.), who played a key role in pushing the original tax credit through Congress, also made a significant contribution to the extension.

This new legislation comes one week after the House and Senate passed legislation to extend the current loan limits for FHA, Freddie Mac and Fannie Mae through December 31, 2010. Current loan limits of 125% of local area median home prices (with a cap of $729,750) would have expired on December 31, 2009. Had this extension not been passed, many markets would have experienced a reduction in case loan limits.

NAR economists estimate that approximately 2 million people will take advantage of the tax credit in 2009.

Senate reaches deal on tax credit for home buyers

2009-10-31T17:46:00.000-07:00

A deal has been reached in the Senate that would extend the home-buyer tax credit, Senate aides said. The $8,000 credit for first-time buyers would be made available for a longer period, and a new credit of up to $6,500 for some existing homeowners would be created. The new credit would go to home buyers who have lived in their present place of residence for five of the past eight years. But it is not clear that the bill can pass the Senate, nor is there agreement from lawmakers in the House.

more at http://online.wsj.com/article/SB125678511901015147.html#mod=todays_us_page_one?mod

Washington wrangles over home buyer tax credit

2009-10-26T09:58:00.001-07:00

With the November 30 expiration of the First-Time Home Buyer Tax Credit fast approaching, the wrangling in Washington over whether to extend the program is getting mighty interesting.

In early September, Senator Johnny Isakson, the patron saint of the National Association of Realtors (and a guy who made his fortune selling real estate) teamed up with Senator Christopher Dodd to back a plan that would increase the current $8,000 credit to $15,000, make it available to all homeowners (not just first timers), and double the income-eligibility rules.

Sen. Johnny Isakson (R-Ga.)

By last week Senator Isakson had reined in his proposal a bit, settling (for the moment at least) on an $8,000 credit through June 2010. But the provision to make the credit available to existing homeowners is still on the table, as is doubling the income limits to $150,000 for individuals and $300,000 for married couples.

The smoke signals out of the White House suggest some concern about more government spending. HUD Secretary Shaun Donovan told a Senate hearing last week that while the current credit has obviously helped the housing market, the Administration wanted to carefully weigh the costs and benefits of extending the home buyer tax credit.

Isakson better hope the White House doesn’t carefully read a Brookings Institution smackdown of the home buyer tax Credit cost-benefit. Brookings’ Ted Geyer estimates that about 85 percent of people who are expected to use the 2009 homebuyer credit would have bought anyway, and the taxpayer cost to generate additional home sales works out to a hefty government subsidy of $43,000 per sale.

If the credit does see the light of day into 2010, let’s hope oversight is tightened a bit. The IRS reported last week that it is pursuing more than 100,000 cases of potential fraud, including one case of a four-year-old claiming the credit.

How can I increase my FICO score?

2009-09-26T21:29:00.000-07:00

Increasing your FICO® score may take time and often there is no quick fix. FICO scores reflect credit payment patterns over time with more of an emphasis on recently reported information than older information. Below are some general tips to follow that may increase your FICO score:

Focus on the negative factors provided with your FICO score. These represent the main areas where your score could be higher.
Apply for and open new credit accounts only as needed. Don't open accounts for the purpose of providing a better credit picture – it probably won't raise your FICO score and, in some instances, may even lower your score.
Pay off your bills on time. Delinquent payments, even if only a few days late, and collections can have a major negative impact on your FICO score.
If you have missed payments, get current and stay current. The longer you pay your bills on time after being late, the more your FICO score should increase. Older credit problems count for less, so poor credit performance won't haunt you forever. The impact of past credit problems on your FICO score fades as time passes and as recent good payment patterns show up on your credit report. And good FICO scores weigh any credit problems against the positive information that says you're managing your credit well.
If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor. This will not improve your FICO score immediately, but if you can begin to manage your credit and pay on time, your score should increase over time. And seeking assistance from a credit counseling service will not hurt your FICO score.
Keep balances low on credit cards and other "revolving credit". High outstanding credit card debt can negatively impact your FICO score.
Pay off debt rather than move it around from one credit card to another. The most effective way to increase your FICO score in this area is by paying down your total revolving (credit card) debt.
If you have had problems in the past, re-establish your credit history by opening new accounts responsibly and paying them on time.
Manage credit cards responsibly by keeping balances well under the credit limit. In general, having credit cards and installment loans (and making timely payments) will raise your FICO score. People with no credit cards, for example, tend to be higher risk than people who have managed credit cards responsibly.
Do your rate shopping for a loan within a focused period of time. FICO scores distinguish between a search for a mortgage or auto loan, where it is customary to shop for the best rate, and a search for many new credit cards.
Don't close unused credit cards as a short-term strategy to raise your FICO score. This approach could backfire and actually lower your FICO score.
If you have been using credit for only a short time, don't open a lot of new accounts too quickly, as rapid account build-up can look risky to a lender.

A decline in existing-home sales

2009-09-26T08:01:00.000-07:00

Resales of U.S. homes dropped 2.7% in August to a seasonally adjusted annual rate of 5.1 million, the first decline in five months, prompting the National Association of Realtors to again plead for more taxpayer subsidies for their business. Most economists had not been anticipating a decline in sales. The median forecast by economists surveyed was for a small gain, to a 5.40 million annual rate.

more at

http://www.marketwatch.com/story/existing-home-sales-drop-27-to-510-million-2009-09-24?siteid=nwhwk

10 Tips to Navigating the Mortgage Minefield

2009-09-13T07:39:00.000-07:00

“Lowest mortgage rates in 30 years!” Have headlines about once-in-a-lifetime rates and stimulus plan incentives tempted you? Have you checked your credit and decided the time is right to buy? Check these ten steps before you venture out to your mortgage broker and you’ll be ahead of the game!

1. Start with your credit report
The first thing lenders will probably do when you apply for a mortgage loan is to check your credit; you should, too. There’s no better time for regular credit monitoring than when you’re trying to prove your creditworthiness to a lender so you can get the best possible rates. You want to make sure that your credit report is as accurate as possible, your scores are where you want them to be, and no one else is getting access to your credit, possibly harming your scores.

2. Then, get things in order
Once you’ve been keeping regular tabs on your credit report, you’ll be able to see how you’re doing. Dispute any inaccuracies with the 3 credit bureaus and get everything cleared up. If your debt-to-credit ratio is too high, monitoring your score over time will show you how your score might change. If you see accounts that you didn’t open or addresses that aren’t yours, take immediate steps to investigate what could be identity fraud.

3. Do your homework
Yes, the word “homework” makes us shudder too, but this time the reward is much bigger than memorizing geometry theorems or the periodic table. You’re finding a home but you’re also making a financial commitment you’ll have to live with for years: get the best deal you can. Research loans, rates and brokers exhaustively before you sign or commit to anything. Doing the hard work now will pay off down the road with a better rate and terms.

4. Be realistic about what you can afford
Home ownership may be the American dream, but keep one foot on the ground, too. If you’re looking for a rate that will require you to come up with a 20% down payment and you only have about 5%, figure your calculations based on the rate you’ll be able to get.

5. Understand how lenders operate
Your credit score, on which lenders base much of their decision about your loan amounts and rates, is a reflection of their confidence in your ability to repay them. In a nutshell, the higher your credit score is, the easier it will be to get the amount and rate you want.

6. Decide how you’ll finance it
Once you research the types of financing available, determine which is best for your financial situation: 15-year mortgage or 30, adjustable or fixed. If you are looking for security and a guarantee that payments won’t increase, a fixed rate mortgage might be the way to go. If you believe mortgage rates could still fluctuate and you want more flexibility, consider an adjustable rate mortgage.

7. The larger your down payment, the wider your options
See number 4, it’s important to be realistic. So within a realistic framework of what you can afford, the more you put down, the better your terms. The days of zero down payments, especially on a mortgage, seem to be winding down. Putting more money down up front will help ensure you pay less each month.

8. Check on pre-payment penalties
Something else to keep in mind when finding your perfect mortgage is whether or not you’ll be penalized for paying the mortgage off early. Some homeowners double up on payments to reach the end of their term sooner—regularly or when they experience a cash windfall. Check and make sure you won’t be dinged for actually getting to your goal sooner!

9. Take a targeted, rather than shotgun approach to mortgage applications
Remember that whenever you apply for a loan, including a mortgage, the “hard inquiry” the lenders make shows up on your credit report and temporarily lowers your score. Applying for several mortgages in a two week period only counts as one inquiry, but if you drag it out and canvas as many lenders over a longer period, you’ll end up doing damage to your score, which could result in a lower rate than you were hoping for.

10. “Not now” doesn’t mean “never”
Home ownership is just not a realistic option for everyone right now, despite what may look like once-in-lifetime mortgage rates. If you fall into this category, don’t despair. Your financial circumstances could change, the economy is still very much in flux, and remember that the current mortgage crisis involved a lot of home buyers getting in over their heads. When it comes to a major purchase like a home, timing is critical.

Delinquent loan rate jumps in Chicago area

2009-08-31T08:50:00.000-07:00

The epic commercial real estate hangover for banks is getting worse.

The delinquency rates for Chicago-area commercial mortgages along with construction and land loan delinquencies jumped again in the second quarter and could rise well into 2010 even as the economy improves. That means local banks aren’t likely to start making commercial real estate loans any time soon.

The delinquency rate on local commercial mortgages climbed to 6.1% in the second quarter. That’s up sharply from 5.6% in the first quarter and nearly double the year-ago quarter, when the rate was 3.6%, according to Foresight Analytics LLC, an Oakland, Calif.-based research firm.

Chicago now has the third-highest rate among the biggest 100 metropolitan areas, eclipsed only by Jacksonville, Fla., and Miami. Nationwide the rate now stands at 4.3%, and Foresight predicts it could climb above 6% next year.

For construction and land loans, which includes lending for condominium projects, the delinquency rate in the Chicago area is now a staggering 21.2%. That’s up from 18.2% in the first quarter and 10.8% in the second quarter last year.

Chicago’s construction and land loan delinquency rate ranks 12th-highest among the top 100 metros; the nationwide rate is 17%.

Foresight sees the national rate eclipsing 20% by the end of the year and peaking in 2010 at about 25%, says Foresight Partner Matthew Anderson.

“Banks are definitely focused inward on their existing portfolios,” Mr. Anderson says. “Until there’s a sense we’re either nearing or have reached a bottom, fresh credit for commercial real estate is going to be very constrained.”

Mr. Anderson says even as credit eases in other sectors of the economy, the availability of commercial real estate loans will lag. That’s a problem likely to stretch into 2011, when a massive wave of commercial mortgage-backed securities issued in 2006 — at near-peak valuations — comes due and borrowers will scurry to refinance those loans.

With the big decline in property values, some of those properties are sure to be worth less than what’s owed.

“That’s setting up a refinancing problem for commercial real estate,” Mr. Anderson says. “There’s going to be a gap between what financing is available and what is needed to replace existing debt. It’s going to wear on the market for several years.”

Foresight, which compiles its data from regulatory filings, defines delinquent loans as those 30 days or more past due. The firm calculates a rate by dividing the dollar amount of the delinquent loans by the value of all outstanding loans.

The Federal Deposit Insurance Corp. announced Thursday that at the end of June, 416 banks were on its “problem list,” meaning they’re at risk of insolvency. The list was at 305 banks at the end of the first quarter and just 117 at the end of the second quarter last year.

The agency, which insures bank deposits, says 84 banks have failed so far this year.

“We expect the numbers of problem banks and failures will remain elevated, even as the economy begins to recover,” FDIC Chairman Sheila Bair said in a statement.

FDIC-insured banks charged off $48.9 billion in uncollectible loans during the second quarter, up from $26.4 billion in the year-earlier quarter. Meanwhile, non-current loans and leases totaled $332 billion, or 4.35% of total loans and leases, according to the FDIC.

Banks are holding more than $34 billion worth of repossessed real estate, according to a Wall Street Journal analysis of FDIC data. The banks’ pools of foreclosed properties climbed 12% from the prior three months and are up 72% from a year ago, the newspaper reported.

$8000 First-Time Homebuyer Tax Credit FAQ

2009-08-29T08:25:00.001-07:00

When do I need to purchase to qualify?
If you buy a home between Jan. 1 and Dec. 1 this year and close escrow during these dates, you will qualify for an $8,000 tax credit - as long as it is your primary residence and you meet the simple requirements.

How does the law define "first-time homebuyer"?
The law defines "first-time homebuyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase.

What are other requirements to qualify?
All U.S. citizens who file taxes are eligible to participate. An income limit of $75,000 a year for individuals and $150,000 a year for joint filers also applies.

How do I apply for the credit?
Taxpayers should use IRS Tax Form 5450 to claim the first-time homebuyer tax credit.

Does the credit have to be repaid?
No. Unlike a similar tax credit passed in 2008, this $8,000 tax credit does not have to
be repaid to the IRS.

Can I use the tax credit toward a down payment or other closing costs?
Yes. An announcement made May 29 allows the tax credit to be used toward purchase costs of a home, including down payment in some cases. This can be done one of two ways. First, buyers using an FHA-approved lender can sell their anticipated tax credit to the lender and use the proceeds to immediately apply the tax credit to any down payment above the minimum down payment of 3.5 percent required with FHA-insured mortgages. Second, buyers who receive financing through state housing finance agencies and certain non-profits will be able to use the tax credit for their down payments via a tax credit advance loan that does not result in any cash back to the buyer. In both cases, buyers can only access the credit after filing their tax returns with the IRS.

Mortgage delinquencies, foreclosures jump

2009-08-29T06:08:00.000-07:00

Almost 14 percent of Illinois homeowners with a mortgage were behind on their payments or in foreclosure at the end of the second quarter, up from about 9 percent at the same time last year, according to the Mortgage Bankers Assn.

As of June 30, 9.2 percent of mortgages in Illinois were past due and 4.7 percent were in foreclosure, according to the association’s second-quarter National Delinquency Survey, released Thursday.

The numbers are similar to those nationwide. In the U.S., 4.3 percent of borrowers were in foreclosure and 8.9 percent had missed at least one payment, according to the survey.

The Illinois figures marked sharp increases from last year — 6 percent of mortgages were late and 3.1 percent were in foreclosure in the state at the end of the second quarter of 2008, according to the association.

Nationwide, 6.2 percent of mortgages were late and 2.75 percent were in foreclosure at the end of second-quarter 2008.

The record-high numbers in Thursday’s report are being driven by borrowers with traditional fixed-rate mortgages, rather than the shady subprime loans with adjustable rates that kicked off the mortgage crisis.

One in three new foreclosures nationwide between April and June was from a prime, fixed-rate loan, up from one in five a year earlier. Last year, subprime adjustable-rate loans caused the largest share of foreclosures.

The worst of the trouble is still concentrated in California, Nevada, Arizona and Florida, which accounted for 44 percent of new foreclosures in the country. Nearly 12 percent of all loans in Florida were in foreclosure, the highest in the country, followed by Nevada at 9 percent.

"Clearly we have not seen the bottom in Florida," said Jay Brinkmann, the trade group's chief economist.

President Barack Obama has pledged to fight the problem, but its foreclosure prevention program, known as "Making Home Affordable," is off to a disappointing start. As of July, only about one in 10 of eligible borrowers had signed up.

The success of the program depends on the economy stabilizing. The number of first-time claims for unemployment benefits rose unexpectedly for the second straight week, the Labor Department said Thursday.

The number of new jobless claims rose to a seasonally adjusted 576,000 last week, from a revised figure of 561,000. Wall Street economists expected a drop to 550,000, according to a survey by Thomson Reuters.

Homebuyer tax credit ends soon

2009-08-27T19:26:00.000-07:00

There's barely three months left before the $8,000 tax credit for first-time buyers ends -- and it can take that long to close on your new home.

Time is running out to claim the $8,000 first-time homebuyers tax credit.

Passed earlier this year as part of the economic stimulus package, the credit is good for up to $8,000, or 10% of the purchase price, and applies to people who have not owned a home in the previous three years. (There are some income restrictions.) The best part: Unlike a similar program from 2008, the credit does not have to be repaid.

The bad part: It ends on Dec. 1.

Because it usually takes around 90 days to close on a house after a contract is signed, buyers have very little time left to act. As of Thurs., Aug. 27, there were only 96 days left before the credit ends.

"Buyers have to get a home under contract very, very soon," said Tom Kunz, CEO of Century 21. "They probably should get out looking."

Sense of urgency

What they will find may surprise them: Many of the prime properties have already been snapped up. Home sales have been on the upswing, and inventories are so depleted in hot markets that first-time buyers are struggling to find homes in their price range.

In Whittier, Calif., for example, there are few repossessed homes for sale. Those are easy to buy because there isn't a lot of red tape and the bank wants to get rid of them as quickly as possible. Instead, most of the properties are short sales, where the sellers have to convince their lender to let them sell the house for less than they owe.

"That's why there's such a sense of urgency now," said Irma Tapper, a Century 21 real estate agent in Whittier. "The banks have to approve short sales, and they're taking three to six months to do that."

That means a first timer putting a bid on a short-sale might not get an answer form the bank until well after the Dec. 1 deadline for the tax credit. So when an actual repossession listing hits the markets, it creates a feeding frenzy.

Chuck Whitehead, who runs the Coldwell Banker agency in Temecula, Calif., said one recent listing hit the market on a Friday and by Monday there were 57 bids.

The National Association of Realtors attributes much of this activity to the first-time buyer tax credit. It estimates that 1.8 million buyers will file for the credit, and 350,000 of them wouldn't have been able to buy without it.

"It makes a big difference because most of these clients are in a lower price range," said Michelle Edmunds, an agent with Coldwell Banker in Temecula, Calf., who has closed sales for six first-time buyers. "The houses they buy need work and normally they wouldn't want to move in because of the [less than perfect] conditions the homes are in."

That is true for Wesley Forsythe. This June, the 30-year-old computer consultant and his girlfriend bought a row house in the Fishtown section of Philadelphia. Since he paid just $80,000 for the three-bedroom, two-bath place, the credit acted like a 10% discount.

"It allowed us to expand our price range and plan additional renovations," he said. "My mortgage is several hundred dollars less than what my new rent would have been."

Forsythe applied for the credit immediately after closing, filing an amended 2008 tax return. The IRS cut him a check in less than seven weeks. He's spending it now on new hardwood floors, repainting most of the interior and renovating a bathroom. He's stretching the cash by doing much of the work himself.

Cash for Clunkers effect

Of course, analysts worry that this frenzy will dry up once the tax credit expires. They argue that without the incentive, much of the pressure on homebuyers to act quickly will vanish, and the nascent housing recovery could slump.

In many ways the tax credit is similar to the Cash for Clunkers program that ended this week. Already, auto dealers are anticipating that car sales will evaporate after accelerating during the program.

"It's just like Cash for Clunkers," said Robert Dye, a senior economist for PNC Financial Services Group. "It runs the risk of a let-down as the program runs its course."

Johnny Isakson, R-Ga., who is a former real estate broker, is pushing legislation to extend the tax credit through next year, increase it to $15,000, include non-first-time homebuyers, and remove income restrictions.

The effort has drawn strong industry support.

"We need to stimulate the move-up buyer," said Century 21's Kunz, "so it works its way up the pricing food chain. That's what we need to get inventory moving again."