Study Uncovers Declines Among Owner-Occupant REO Buyers
12/02/2011 By: Carrie Bay
Looking for an REO buyer? It’s becoming harder to find owner-occupants to fit that bill.
New Vista Asset Management has published the results of a three-year study on buyers of foreclosed homes, covering 18 counties hit hardest by the mortgage crisis.
The company says the percentage of REO homes sold to owner-occupant buyers has decreased in almost every market.
In Los Angeles County, California, for example, owner-occupant REO buyers have dropped from 80 percent in 2009 to 60 percent by the third quarter of 2011.
New Vista’s study uses data extracted from local recorder, courthouse, and tax assessment records – looking at foreclosed homes sold by banks, HUD, Fannie Mae, and Freddie Mac – to determine whether the purchasers were owner-occupants or absentee owners using single-family homes as rental or vacation properties.
The company began tracking real estate sales transactions closed in the first quarter of 2009 and includes consecutive quarterly data through the third quarter of 2011.
“Although, quarter-by-quarter, we have observed some market-specific increases, over the entire period, owner occupancy rates for REO sales have broadly weakened,” said Brian Hurley, New Vista’s president and COO.
Hurley notes that with eleven consecutive quarters of data, the company can look beyond both seasonality and the temporary impact of demand stimuli such as the homebuyer tax credit, and observe “a clear pattern of decline.”
Wayne County, Michigan is the only market of the 18 analyzed that has seen the percentage of owner-occupant REO buyers increase over the last three years, albeit from extremely low levels.
In 2009, owner-occupants accounted for nearly 33 percent of REO purchases in Wayne County. By the third quarter of this year, their share had risen to just over 37 percent.
Wayne County was the only market that had an owner occupancy rate for single-family REO sales below 50 percent in 2009.
By the third quarter of 2011, owner occupancy rates for REO sales in an additional four of the studied counties had fallen below 50 percent, including Maricopa County, Arizona; Osceola County, Florida; Miami-Dade County, Florida; and Clark County, Nevada.
Most markets included in the study saw their share of owner-occupant REO buyers drop by double-digits over the three-year period.
Kevin Stein is with the California Reinvestment Coalition, a nonprofit organization that advocates for increased access to credit on behalf of California’s low-income communities.
Commenting on New Vista’s results, Stein said, “We are troubled by the significant drop in owner occupant purchases of REO properties in these hard hit markets, which is no doubt compounded by decreased access to credit and a failure to repair foreclosed properties to move-in condition.”
Stein says the increased investor acquisition of REOs is reversing the years of community development progress that nonprofits have facilitated.
“We need to ensure that lenders, nonprofits and government agencies are working together to give qualified homebuyers a fair chance to purchase REO properties and help stabilize residential neighborhoods,” Stein added.
While New Vista has been tracking the study’s findings since the first quarter of 2009, company management elected to formally publish the index in response to a growing focus on investor-driven solutions to the nation’s residential real estate crisis.
“Several initiatives now under consideration promise to channel more houses to investors rather than to owner-occupant purchasers,” Hurley noted.
“We timed the first release of our study to raise awareness of the community impacts that current REO disposition practices are already having,” he explained.
Hurley says bulk sales, drop-bid foreclosure auctions, and proposals under review by the Federal Housing Finance Agency (FHFA) to facilitate the sale of government-owned REOs for rental purposes all promise to move more REOs out of local real estate markets.
“Before the market adopts new strategies to address an expected surge in foreclosure volumes, we wanted the owner-occupancy impact of current approaches to be well understood,” Hurley said.
New Vista’s “Index of the Percentage of Single Family REO Properties Sold to Owner-Occupant Buyers” will now be published quarterly.
The company plans to increase coverage to include additional markets in 2012.
From: http://ping.fm/YmY4M
Monday, December 5, 2011
Friday, December 2, 2011
Unemployment Rate Drops to 8.6%
Unemployment Rate Drops to 8.6%
12/02/2011 By: Carrie Bay
The nation’s unemployment rate fell to 8.6 percent during the month of November, as employers added 120,000 new jobs to their payrolls, the U.S. Department of Labor said Friday.
By the government’s calculations, the unemployment rate declined by 0.4 percentage point from 9.0 percent reported in October to hit its lowest level since March of 2009.
Analysts at IHS Global Insight were expecting the economy to add 125,000 new jobs last month, but the rate to hold at 9.0 percent.
Earlier this month, IHS published the graphic above, illustrating its projections of how long it will take each state to return to peak levels of employment.
Employment assessments for both October and September were revised upward. The Labor Department says total nonfarm payroll employment rose by 210,000 jobs in September rather than the 158,000 previously reported. October’s numbers were revised from 80,000 new jobs to 100,000.
Still, the 72,000 more jobs than previously thought over past months isn’t enough to cut the unemployment rate by forty basis points.
Much of the drop can be explained by the fact that those who’ve been unemployed for extended periods are no longer counted as part of the Labor Department’s unemployed population as they become ineligible to claim unemployment benefits.
The Labor Department’s report does indicate that the size of its measurable labor force contracted by 315,000 persons.
Commenting on the latest numbers, Ed Delgado, CEO of the Five Star Institute, said, “While the decline in the national unemployment rate is significant [40 basis points] the comprehensive view of employment, or U6 rate, that includes all marginally attached to the labor force, remains high at 15.6 percent and 60 basis points higher than a year ago.”
Delgado went on to explain, “Some of the decline can be attributed to seasonal employment trends as we approach the holidays and we remain cautious that a one month decline of this magnitude does not necessarily suggest a sustainable trend … that said, the abrupt decline is an impressive one-month reduction in unemployment.”
The analysts at Capital Economics agree with that assessment. The sharp drop-off “is another illustration that the U.S. economy is, for now at least, shrugging off the global economic downturn and fears about the collapse of the euro-zone,” they said in a research note published Friday.
*Editor’s Note: The Five Star Institute is the parent company of DS News and DSNews.com.
From: http://www.dsnews.com/articles/unemployment-rate-drops-to-86-2011-12-02
12/02/2011 By: Carrie Bay
The nation’s unemployment rate fell to 8.6 percent during the month of November, as employers added 120,000 new jobs to their payrolls, the U.S. Department of Labor said Friday.
By the government’s calculations, the unemployment rate declined by 0.4 percentage point from 9.0 percent reported in October to hit its lowest level since March of 2009.
Analysts at IHS Global Insight were expecting the economy to add 125,000 new jobs last month, but the rate to hold at 9.0 percent.
Earlier this month, IHS published the graphic above, illustrating its projections of how long it will take each state to return to peak levels of employment.
Employment assessments for both October and September were revised upward. The Labor Department says total nonfarm payroll employment rose by 210,000 jobs in September rather than the 158,000 previously reported. October’s numbers were revised from 80,000 new jobs to 100,000.
Still, the 72,000 more jobs than previously thought over past months isn’t enough to cut the unemployment rate by forty basis points.
Much of the drop can be explained by the fact that those who’ve been unemployed for extended periods are no longer counted as part of the Labor Department’s unemployed population as they become ineligible to claim unemployment benefits.
The Labor Department’s report does indicate that the size of its measurable labor force contracted by 315,000 persons.
Commenting on the latest numbers, Ed Delgado, CEO of the Five Star Institute, said, “While the decline in the national unemployment rate is significant [40 basis points] the comprehensive view of employment, or U6 rate, that includes all marginally attached to the labor force, remains high at 15.6 percent and 60 basis points higher than a year ago.”
Delgado went on to explain, “Some of the decline can be attributed to seasonal employment trends as we approach the holidays and we remain cautious that a one month decline of this magnitude does not necessarily suggest a sustainable trend … that said, the abrupt decline is an impressive one-month reduction in unemployment.”
The analysts at Capital Economics agree with that assessment. The sharp drop-off “is another illustration that the U.S. economy is, for now at least, shrugging off the global economic downturn and fears about the collapse of the euro-zone,” they said in a research note published Friday.
*Editor’s Note: The Five Star Institute is the parent company of DS News and DSNews.com.
From: http://www.dsnews.com/articles/unemployment-rate-drops-to-86-2011-12-02
Delinquencies Still Falling but Foreclosures at an All-Time High
Delinquencies Still Falling but Foreclosures at an All-Time High
12/01/2011 By: Carrie Bay
Data released by Lender Processing Services (LPS) Thursday shows mortgage delinquencies are continuing to decline, now nearly 30 percent below their January 2010 peak.
Loans in the process of foreclosure, on the other hand, are steadily rising. LPS says foreclosure inventories reached an all-time high at the end of October, making up 4.29 percent of all active mortgages.
The average days delinquent for loans in foreclosure extended as well during the month of October, setting a new record of 631 days since last payment, while the average days delinquent for loans 90 or more days past due but not yet in foreclosure
From: http://ping.fm/6NWMx
12/01/2011 By: Carrie Bay
Data released by Lender Processing Services (LPS) Thursday shows mortgage delinquencies are continuing to decline, now nearly 30 percent below their January 2010 peak.
Loans in the process of foreclosure, on the other hand, are steadily rising. LPS says foreclosure inventories reached an all-time high at the end of October, making up 4.29 percent of all active mortgages.
The average days delinquent for loans in foreclosure extended as well during the month of October, setting a new record of 631 days since last payment, while the average days delinquent for loans 90 or more days past due but not yet in foreclosure
From: http://ping.fm/6NWMx
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