NAR: 2012 home sales will be strongest in past 5 years
February pending sales up 9.2% from year ago
By Inman News
Inman News®
The National Association of REALTORS® is predicting existing-home sales will jump 7 to 10 percent in 2012 to the highest level in five years, based on an "uneven but higher sales pattern" so far this year.
Pending home sales fell a seasonally adjusted 0.5 percent from January to February, which was up 9.2 percent from the same time a year ago, NAR said today in releasing its latest Pending Home Sales Index.
Last week, NAR reported a similar trend for existing-home sales, which were down 0.9 percent from January to February, but up 8.8 percent from a year ago.
The pending sales data released today provides a glimpse into more recent trends, because it tracks homes that were under contract in February -- deals that will in most cases be finalized within one or two months.
NAR said 31 percent of REALTORS® experienced contract failures in February, in some cases because buyers' mortgage applications were rejected or because appraisals came in below the negotiated price.
In the Northeast, NAR's index slipped a seasonally adjusted 0.6 percent from January but was up 18.4 percent from a year ago.
The Midwest saw a month-over-month gain of 6.5 percent and a 19 percent gain from a year ago.
Pending home sales fell 3 percent in the South from January to February, but were up 7.8 percent from a year ago.
In the West, the index declined 2.6 percent from January to February and was 1.8 percent below the index rating in February 2011.
In its latest economic forecast, NAR predicts existing-home sales will total 4.65 million in 2012, up 9.1 percent from last year. That forecast assumes that the U.S. economy will grow at a 2.3 percent annual rate and add 2.7 million jobs this year.
From: http://lowes.inman.com/newsletter/2012/03/28/news/183115
Wednesday, March 28, 2012
Monday, March 19, 2012
Check the fine print on FHA refinancings - The Washington Post
Check the fine print on FHA refinancings
By Kenneth R. Harney, Published: March 16
The Obama administration’s new plan to stimulate refinancings of Federal Housing Administration mortgages is likely to help large numbers of homeowners cut their monthly costs — even those who are deeply underwater. But it’s also likely to be a disappointment to many borrowers who aren’t aware of the program’s fine print and end up missing an opportunity to switch into a loan with a rate below 4 percent.
To cut through the bureaucratic details, here’s a quick overview of the so-called “streamline refi” program and what it will take for you to qualify.
First, the baseline criteria: Your current home loan must be FHA-insured and must have been put on the agency’s books no later than May 31, 2009. If you have a mortgage owned or backed by Fannie Mae, Freddie Mac, the Department of Veterans Affairs or private investors, you’re out.
The May 31, 2009, date is crucial. Your lender can tell you precisely when the FHA “endorsed” your loan for insurance. This is different from the dates you applied for your loan or closed on your house. If it turns out to be anytime later than May 31, 2009, you miss the cut.
You also need to have an unblemished record of on-time mortgage payments for the past 12 months. Maybe you were late occasionally a couple of years back. That’s okay. But the 12 months immediately preceding the closing need to be pristine.
On top of that, if your refinancing does not provide you a net savings of at least 5 percent in your monthly principal, interest and mortgage insurance payments, you won’t be eligible.
Those are the main hurdles. But they are substantial enough to exclude hundreds of thousands of FHA borrowers who might like to refi. According to an FHA spokesman, Brian Sullivan, FHA has roughly 500,000 active loans in its portfolio that are eliminated from participation solely on the basis of the May 31, 2009, cutoff date. Of those, an estimated 145,000 have interest rates higher than 5 percent, which would make them prime candidates for a refi if it weren’t for the cutoff date.
Now for the good stuff: Under the Obama plan, if you meet the criteria above, you get to breeze through the paperwork maze and underwriting hassles that come with any refinancing. The FHA streamline refi requires:
●No new verifications of your income or employment status. If you’ve been paying on time for a year, the presumption is that you’ve got the needed income.
●No new credit evaluation, credit reports or FICO scores.
●No new physical appraisal. The program generally accepts the appraised value of your home at the time you closed on your current FHA loan as good enough, even if you’re now in serious negative equity territory.
Along with the stripped-down underwriting, the new program also comes with valuable financial concessions. To sweeten the deal, the FHA has slashed its regular insurance premium charges for streamline participants.
Take this hypothetical example provided by Paul Skeens, president of Colonial Mortgage Co. in Waldorf.
Say you now have a $180,000 FHA loan at 5.25 percent that dates to March 2009. Your current monthly principal and interest payment is $993.93. With the addition of FHA’s mortgage insurance premium costs of $82.50, your total monthly outlay is $1,076.43.
If you qualify for the new streamlined plan, you could lower your interest rate to 3.875 percent and your monthly principal, interest and mortgage insurance to $928.92, an immediate savings of $147.51 per month, or $1,770.12 a year. Over the next 60 months, you’ll save $8,850.60.
Not bad.
But why the May 31, 2009, cutoff? What about the thousands of responsible borrowers who happened to take out their FHA loans a little more recently, have paid on time and have rates higher than 5 percent? Why punish them? Sullivan said it’s all about the traditional three-year “seasoning” period for mortgages during which most insurance claims — prompted by delinquencies and foreclosures — normally occur. He denied industry rumors that the 2009 date had anything to do with the FHA’s policy of making partial refunds of upfront insurance premiums to borrowers who refinance during the first 36 months, which might cost the agency millions of dollars if more-recent borrowers could qualify for the new program.
“How cynical,” he said in response to an e-mail question on the refunds. “This is about easing the pressure on [borrowers] in a responsible way.” Saving money by cutting out more-recent FHA borrowers “was never a consideration.”
Ken Harney’s e-mail address is kenharney@earthlink.net.
From: http://ping.fm/tqwoL
By Kenneth R. Harney, Published: March 16
The Obama administration’s new plan to stimulate refinancings of Federal Housing Administration mortgages is likely to help large numbers of homeowners cut their monthly costs — even those who are deeply underwater. But it’s also likely to be a disappointment to many borrowers who aren’t aware of the program’s fine print and end up missing an opportunity to switch into a loan with a rate below 4 percent.
To cut through the bureaucratic details, here’s a quick overview of the so-called “streamline refi” program and what it will take for you to qualify.
First, the baseline criteria: Your current home loan must be FHA-insured and must have been put on the agency’s books no later than May 31, 2009. If you have a mortgage owned or backed by Fannie Mae, Freddie Mac, the Department of Veterans Affairs or private investors, you’re out.
The May 31, 2009, date is crucial. Your lender can tell you precisely when the FHA “endorsed” your loan for insurance. This is different from the dates you applied for your loan or closed on your house. If it turns out to be anytime later than May 31, 2009, you miss the cut.
You also need to have an unblemished record of on-time mortgage payments for the past 12 months. Maybe you were late occasionally a couple of years back. That’s okay. But the 12 months immediately preceding the closing need to be pristine.
On top of that, if your refinancing does not provide you a net savings of at least 5 percent in your monthly principal, interest and mortgage insurance payments, you won’t be eligible.
Those are the main hurdles. But they are substantial enough to exclude hundreds of thousands of FHA borrowers who might like to refi. According to an FHA spokesman, Brian Sullivan, FHA has roughly 500,000 active loans in its portfolio that are eliminated from participation solely on the basis of the May 31, 2009, cutoff date. Of those, an estimated 145,000 have interest rates higher than 5 percent, which would make them prime candidates for a refi if it weren’t for the cutoff date.
Now for the good stuff: Under the Obama plan, if you meet the criteria above, you get to breeze through the paperwork maze and underwriting hassles that come with any refinancing. The FHA streamline refi requires:
●No new verifications of your income or employment status. If you’ve been paying on time for a year, the presumption is that you’ve got the needed income.
●No new credit evaluation, credit reports or FICO scores.
●No new physical appraisal. The program generally accepts the appraised value of your home at the time you closed on your current FHA loan as good enough, even if you’re now in serious negative equity territory.
Along with the stripped-down underwriting, the new program also comes with valuable financial concessions. To sweeten the deal, the FHA has slashed its regular insurance premium charges for streamline participants.
Take this hypothetical example provided by Paul Skeens, president of Colonial Mortgage Co. in Waldorf.
Say you now have a $180,000 FHA loan at 5.25 percent that dates to March 2009. Your current monthly principal and interest payment is $993.93. With the addition of FHA’s mortgage insurance premium costs of $82.50, your total monthly outlay is $1,076.43.
If you qualify for the new streamlined plan, you could lower your interest rate to 3.875 percent and your monthly principal, interest and mortgage insurance to $928.92, an immediate savings of $147.51 per month, or $1,770.12 a year. Over the next 60 months, you’ll save $8,850.60.
Not bad.
But why the May 31, 2009, cutoff? What about the thousands of responsible borrowers who happened to take out their FHA loans a little more recently, have paid on time and have rates higher than 5 percent? Why punish them? Sullivan said it’s all about the traditional three-year “seasoning” period for mortgages during which most insurance claims — prompted by delinquencies and foreclosures — normally occur. He denied industry rumors that the 2009 date had anything to do with the FHA’s policy of making partial refunds of upfront insurance premiums to borrowers who refinance during the first 36 months, which might cost the agency millions of dollars if more-recent borrowers could qualify for the new program.
“How cynical,” he said in response to an e-mail question on the refunds. “This is about easing the pressure on [borrowers] in a responsible way.” Saving money by cutting out more-recent FHA borrowers “was never a consideration.”
Ken Harney’s e-mail address is kenharney@earthlink.net.
From: http://ping.fm/tqwoL
Check the fine print on FHA refinancings - The Washington Post
Check the fine print on FHA refinancings
By Kenneth R. Harney, Published: March 16
The Obama administration’s new plan to stimulate refinancings of Federal Housing Administration mortgages is likely to help large numbers of homeowners cut their monthly costs — even those who are deeply underwater. But it’s also likely to be a disappointment to many borrowers who aren’t aware of the program’s fine print and end up missing an opportunity to switch into a loan with a rate below 4 percent.
To cut through the bureaucratic details, here’s a quick overview of the so-called “streamline refi” program and what it will take for you to qualify.
First, the baseline criteria: Your current home loan must be FHA-insured and must have been put on the agency’s books no later than May 31, 2009. If you have a mortgage owned or backed by Fannie Mae, Freddie Mac, the Department of Veterans Affairs or private investors, you’re out.
The May 31, 2009, date is crucial. Your lender can tell you precisely when the FHA “endorsed” your loan for insurance. This is different from the dates you applied for your loan or closed on your house. If it turns out to be anytime later than May 31, 2009, you miss the cut.
You also need to have an unblemished record of on-time mortgage payments for the past 12 months. Maybe you were late occasionally a couple of years back. That’s okay. But the 12 months immediately preceding the closing need to be pristine.
On top of that, if your refinancing does not provide you a net savings of at least 5 percent in your monthly principal, interest and mortgage insurance payments, you won’t be eligible.
Those are the main hurdles. But they are substantial enough to exclude hundreds of thousands of FHA borrowers who might like to refi. According to an FHA spokesman, Brian Sullivan, FHA has roughly 500,000 active loans in its portfolio that are eliminated from participation solely on the basis of the May 31, 2009, cutoff date. Of those, an estimated 145,000 have interest rates higher than 5 percent, which would make them prime candidates for a refi if it weren’t for the cutoff date.
Now for the good stuff: Under the Obama plan, if you meet the criteria above, you get to breeze through the paperwork maze and underwriting hassles that come with any refinancing. The FHA streamline refi requires:
●No new verifications of your income or employment status. If you’ve been paying on time for a year, the presumption is that you’ve got the needed income.
●No new credit evaluation, credit reports or FICO scores.
●No new physical appraisal. The program generally accepts the appraised value of your home at the time you closed on your current FHA loan as good enough, even if you’re now in serious negative equity territory.
Along with the stripped-down underwriting, the new program also comes with valuable financial concessions. To sweeten the deal, the FHA has slashed its regular insurance premium charges for streamline participants.
Take this hypothetical example provided by Paul Skeens, president of Colonial Mortgage Co. in Waldorf.
Say you now have a $180,000 FHA loan at 5.25 percent that dates to March 2009. Your current monthly principal and interest payment is $993.93. With the addition of FHA’s mortgage insurance premium costs of $82.50, your total monthly outlay is $1,076.43.
If you qualify for the new streamlined plan, you could lower your interest rate to 3.875 percent and your monthly principal, interest and mortgage insurance to $928.92, an immediate savings of $147.51 per month, or $1,770.12 a year. Over the next 60 months, you’ll save $8,850.60.
Not bad.
But why the May 31, 2009, cutoff? What about the thousands of responsible borrowers who happened to take out their FHA loans a little more recently, have paid on time and have rates higher than 5 percent? Why punish them? Sullivan said it’s all about the traditional three-year “seasoning” period for mortgages during which most insurance claims — prompted by delinquencies and foreclosures — normally occur. He denied industry rumors that the 2009 date had anything to do with the FHA’s policy of making partial refunds of upfront insurance premiums to borrowers who refinance during the first 36 months, which might cost the agency millions of dollars if more-recent borrowers could qualify for the new program.
“How cynical,” he said in response to an e-mail question on the refunds. “This is about easing the pressure on [borrowers] in a responsible way.” Saving money by cutting out more-recent FHA borrowers “was never a consideration.”
Ken Harney’s e-mail address is kenharney@earthlink.net.
From: http://ping.fm/AOumY
By Kenneth R. Harney, Published: March 16
The Obama administration’s new plan to stimulate refinancings of Federal Housing Administration mortgages is likely to help large numbers of homeowners cut their monthly costs — even those who are deeply underwater. But it’s also likely to be a disappointment to many borrowers who aren’t aware of the program’s fine print and end up missing an opportunity to switch into a loan with a rate below 4 percent.
To cut through the bureaucratic details, here’s a quick overview of the so-called “streamline refi” program and what it will take for you to qualify.
First, the baseline criteria: Your current home loan must be FHA-insured and must have been put on the agency’s books no later than May 31, 2009. If you have a mortgage owned or backed by Fannie Mae, Freddie Mac, the Department of Veterans Affairs or private investors, you’re out.
The May 31, 2009, date is crucial. Your lender can tell you precisely when the FHA “endorsed” your loan for insurance. This is different from the dates you applied for your loan or closed on your house. If it turns out to be anytime later than May 31, 2009, you miss the cut.
You also need to have an unblemished record of on-time mortgage payments for the past 12 months. Maybe you were late occasionally a couple of years back. That’s okay. But the 12 months immediately preceding the closing need to be pristine.
On top of that, if your refinancing does not provide you a net savings of at least 5 percent in your monthly principal, interest and mortgage insurance payments, you won’t be eligible.
Those are the main hurdles. But they are substantial enough to exclude hundreds of thousands of FHA borrowers who might like to refi. According to an FHA spokesman, Brian Sullivan, FHA has roughly 500,000 active loans in its portfolio that are eliminated from participation solely on the basis of the May 31, 2009, cutoff date. Of those, an estimated 145,000 have interest rates higher than 5 percent, which would make them prime candidates for a refi if it weren’t for the cutoff date.
Now for the good stuff: Under the Obama plan, if you meet the criteria above, you get to breeze through the paperwork maze and underwriting hassles that come with any refinancing. The FHA streamline refi requires:
●No new verifications of your income or employment status. If you’ve been paying on time for a year, the presumption is that you’ve got the needed income.
●No new credit evaluation, credit reports or FICO scores.
●No new physical appraisal. The program generally accepts the appraised value of your home at the time you closed on your current FHA loan as good enough, even if you’re now in serious negative equity territory.
Along with the stripped-down underwriting, the new program also comes with valuable financial concessions. To sweeten the deal, the FHA has slashed its regular insurance premium charges for streamline participants.
Take this hypothetical example provided by Paul Skeens, president of Colonial Mortgage Co. in Waldorf.
Say you now have a $180,000 FHA loan at 5.25 percent that dates to March 2009. Your current monthly principal and interest payment is $993.93. With the addition of FHA’s mortgage insurance premium costs of $82.50, your total monthly outlay is $1,076.43.
If you qualify for the new streamlined plan, you could lower your interest rate to 3.875 percent and your monthly principal, interest and mortgage insurance to $928.92, an immediate savings of $147.51 per month, or $1,770.12 a year. Over the next 60 months, you’ll save $8,850.60.
Not bad.
But why the May 31, 2009, cutoff? What about the thousands of responsible borrowers who happened to take out their FHA loans a little more recently, have paid on time and have rates higher than 5 percent? Why punish them? Sullivan said it’s all about the traditional three-year “seasoning” period for mortgages during which most insurance claims — prompted by delinquencies and foreclosures — normally occur. He denied industry rumors that the 2009 date had anything to do with the FHA’s policy of making partial refunds of upfront insurance premiums to borrowers who refinance during the first 36 months, which might cost the agency millions of dollars if more-recent borrowers could qualify for the new program.
“How cynical,” he said in response to an e-mail question on the refunds. “This is about easing the pressure on [borrowers] in a responsible way.” Saving money by cutting out more-recent FHA borrowers “was never a consideration.”
Ken Harney’s e-mail address is kenharney@earthlink.net.
From: http://ping.fm/AOumY
Tuesday, March 13, 2012
FHA may soon further limit how much sellers can contribute at settlements - The Washington Post
FHA may soon further limit how much sellers can contribute at settlements
By Kenneth R. Harney, Published: March 8
If you’re considering buying a house with an FHA mortgage and expect the seller to help out with your closing costs, here’s a heads-up: The Federal Housing Administration plans to impose significant restrictions in the near future on the amount that sellers can contribute at settlements. On top of that, FHA also will be raising its mortgage insurance premiums during the coming weeks, increasing charges for new purchasers across the board.
You might ask: Why hit us with additional financial burdens right now, just as housing is showing modest signs of recovery in many areas and the spring buying season is getting underway?
One big reason: Over the past six years, FHA has been the turnaround champ of residential real estate, offering down payments as low as 3.5 percent despite the recession and housing bust, growing its market share from 3 percent to 25 percent-plus. The program is now financing 40 percent or more of all new-home purchases in some metropolitan areas and is a crucial resource for first-time buyers and moderate-income families, especially minorities. With a maximum loan limit of $729,750 in high-cost areas, it is also a force in some of the country’s most expensive markets: California, Washington, D.C., New York and parts of New England.
But during the same span of rapid growth, FHA’s insurance fund capital reserves have steadily deteriorated; they’re now far below congressionally mandated levels. Delinquencies have been increasing. According to the latest quarterly survey by the Mortgage Bankers Association, FHA delinquencies rose to 12.4 percent, compared with a 4.1 percent average for prime (Fannie Mae-Freddie Mac) conventional fixed-rate mortgages and 6.6 percent for VA loans.
As a result, FHA is under the gun — from Congress and from within the Obama administration — to get its house in order, cut insurance claims and rebuild its reserves. The coming squeeze on seller contributions and bumps in premiums are steps in this direction, but may not be the last.
The seller-contribution cutbacks could be painful, particularly in places where closing costs and home prices are relatively high.
Here’s what’s involved: Traditionally FHA has been uniquely generous in allowing home sellers — including builders marketing new construction — to sweeten the pot for purchasers by chipping in money to defray closing costs. FHA currently allows sellers to pay up to 6 percent of the price of the house toward their buyers’ settlement expenses. Fannie Mae and Freddie Mac, by comparison, cap contributions at 3 percent. VA’s ceiling is 4 percent.
Under newly proposed rules, the FHA cap would drop to the greater of 3 percent of the home price or $6,000. In sales involving houses priced at $100,000 or below, this wouldn’t change anything ($6,000 equals 6 percent of $100,000). But on all sales above this threshold, the squeeze would get progressively tighter. On a $200,000 home, a buyer could today ask the seller to pay for $12,000 of a long list of settlement charges, including all prepaid loan expenses, discount points on the loan, interest rate buy-downs and upfront FHA insurance premiums, among others. Under the proposed cutback, the maximum amount of closing-cost help for that $200,000 house would be slashed in half. On many transactions, the reduction would force sellers to lower their prices to enable cash-short buyers to get through the closing. In other cases, sales might simply be too much of a stretch for some purchasers.
The proposed cuts are open to public comment through the end of this month but are highly likely to be adopted in approximately their current form soon afterward.
FHA also is restricting the types of closing costs that sellers can pay. For example, advance payment of six months’ or a year’s worth of interest payments or homeowner association dues no longer will be permitted, a serious blow to many builders who use these as financial carrots.
Beyond these changes, FHA also plans significant increases in insurance premiums: from 1 percent to 1.75 percent on its upfront premiums, effective April 1, and 0.1 percentage-point increases in annual premiums on all loans under $625,000 and 0.35 percentage point on mortgage amounts above that, effective June 1.
William McCue, president of McCue Mortgage Co. in New Britain, Conn., which does a sizable percentage of its business with FHA, said the cumulative impact of all these increases “will not just crowd first-time buyers out of the FHA market. It will prevent them from owning a home that absent these new costs would be affordable.”
Bottom line: Nail down your FHA money and seller-contribution negotiations as soon as you can, because later looks as though it could be a lot more expensive.
From: http://ping.fm/Y4EXu
By Kenneth R. Harney, Published: March 8
If you’re considering buying a house with an FHA mortgage and expect the seller to help out with your closing costs, here’s a heads-up: The Federal Housing Administration plans to impose significant restrictions in the near future on the amount that sellers can contribute at settlements. On top of that, FHA also will be raising its mortgage insurance premiums during the coming weeks, increasing charges for new purchasers across the board.
You might ask: Why hit us with additional financial burdens right now, just as housing is showing modest signs of recovery in many areas and the spring buying season is getting underway?
One big reason: Over the past six years, FHA has been the turnaround champ of residential real estate, offering down payments as low as 3.5 percent despite the recession and housing bust, growing its market share from 3 percent to 25 percent-plus. The program is now financing 40 percent or more of all new-home purchases in some metropolitan areas and is a crucial resource for first-time buyers and moderate-income families, especially minorities. With a maximum loan limit of $729,750 in high-cost areas, it is also a force in some of the country’s most expensive markets: California, Washington, D.C., New York and parts of New England.
But during the same span of rapid growth, FHA’s insurance fund capital reserves have steadily deteriorated; they’re now far below congressionally mandated levels. Delinquencies have been increasing. According to the latest quarterly survey by the Mortgage Bankers Association, FHA delinquencies rose to 12.4 percent, compared with a 4.1 percent average for prime (Fannie Mae-Freddie Mac) conventional fixed-rate mortgages and 6.6 percent for VA loans.
As a result, FHA is under the gun — from Congress and from within the Obama administration — to get its house in order, cut insurance claims and rebuild its reserves. The coming squeeze on seller contributions and bumps in premiums are steps in this direction, but may not be the last.
The seller-contribution cutbacks could be painful, particularly in places where closing costs and home prices are relatively high.
Here’s what’s involved: Traditionally FHA has been uniquely generous in allowing home sellers — including builders marketing new construction — to sweeten the pot for purchasers by chipping in money to defray closing costs. FHA currently allows sellers to pay up to 6 percent of the price of the house toward their buyers’ settlement expenses. Fannie Mae and Freddie Mac, by comparison, cap contributions at 3 percent. VA’s ceiling is 4 percent.
Under newly proposed rules, the FHA cap would drop to the greater of 3 percent of the home price or $6,000. In sales involving houses priced at $100,000 or below, this wouldn’t change anything ($6,000 equals 6 percent of $100,000). But on all sales above this threshold, the squeeze would get progressively tighter. On a $200,000 home, a buyer could today ask the seller to pay for $12,000 of a long list of settlement charges, including all prepaid loan expenses, discount points on the loan, interest rate buy-downs and upfront FHA insurance premiums, among others. Under the proposed cutback, the maximum amount of closing-cost help for that $200,000 house would be slashed in half. On many transactions, the reduction would force sellers to lower their prices to enable cash-short buyers to get through the closing. In other cases, sales might simply be too much of a stretch for some purchasers.
The proposed cuts are open to public comment through the end of this month but are highly likely to be adopted in approximately their current form soon afterward.
FHA also is restricting the types of closing costs that sellers can pay. For example, advance payment of six months’ or a year’s worth of interest payments or homeowner association dues no longer will be permitted, a serious blow to many builders who use these as financial carrots.
Beyond these changes, FHA also plans significant increases in insurance premiums: from 1 percent to 1.75 percent on its upfront premiums, effective April 1, and 0.1 percentage-point increases in annual premiums on all loans under $625,000 and 0.35 percentage point on mortgage amounts above that, effective June 1.
William McCue, president of McCue Mortgage Co. in New Britain, Conn., which does a sizable percentage of its business with FHA, said the cumulative impact of all these increases “will not just crowd first-time buyers out of the FHA market. It will prevent them from owning a home that absent these new costs would be affordable.”
Bottom line: Nail down your FHA money and seller-contribution negotiations as soon as you can, because later looks as though it could be a lot more expensive.
From: http://ping.fm/Y4EXu
Wednesday, March 7, 2012
Micro News - Mortgage News Daily#249986
NAR: Housing Affordability Index Hits Record High
Housing affordability conditions have reached the highest level since recordkeeping began in 1970, according to the National Association of Realtors.
NAR’s Housing Affordability Index rose to a record high 206.1 in January, based on the relationship between median home price, median family income and average mortgage interest rate. The higher the index, the greater the household purchasing power.
An index of 100 is defined as the point where a median-income household has exactly enough income to qualify for the purchase of a median-priced existing single-family home, assuming a 20 percent downpayment and 25 percent of gross income devoted to mortgage principal and interest payments. For first-time buyers making small downpayments, the affordability levels are relatively lower.
From: http://ping.fm/wh3yP
Housing affordability conditions have reached the highest level since recordkeeping began in 1970, according to the National Association of Realtors.
NAR’s Housing Affordability Index rose to a record high 206.1 in January, based on the relationship between median home price, median family income and average mortgage interest rate. The higher the index, the greater the household purchasing power.
An index of 100 is defined as the point where a median-income household has exactly enough income to qualify for the purchase of a median-priced existing single-family home, assuming a 20 percent downpayment and 25 percent of gross income devoted to mortgage principal and interest payments. For first-time buyers making small downpayments, the affordability levels are relatively lower.
From: http://ping.fm/wh3yP
Thursday, March 1, 2012
Foreclosure-Related Sales in 2011 = 907,138. Banks becoming Short Sal "Friendly"
Foreclosure-Related Sales in 2011 = 907,138
02/29/2012 By: Carrie Bay
Pre-foreclosure short sales and sales of foreclosed REOs totaled 907,138 for the 2011 calendar year, RealtyTrac reported Thursday. These foreclosure-related transactions made up 23 percent of all residential sales in the U.S. last year, with short sales accounting for 9 percent and REOs accounting for 14 percent of 2011 home sales.
During the last three months of the year, third parties purchased a total of 88,303 pre-foreclosure homes that were in default or scheduled for auction, according to RealtyTrac. That tally represents a decrease of 5 percent from the previous quarter but is up 15 percent compared to the fourth quarter of 2010.
Pre-foreclosure sales increased more than 20 percent on a year-over-year basis in several states, including Michigan (103 percent), Georgia (59 percent), Arizona (48 percent), Washington (36 percent), Nevada (29 percent), Oregon (27 percent), Illinois (26 percent), Ohio (25 percent), California (23 percent), and Texas (22 percent).
RealtyTrac says pre-foreclosure short sales went for an average of $184,221 in the fourth quarter. The average sales price of a pre-foreclosure home in the fourth quarter was 21 percent below the average sales price of a non-foreclosure home, similar to the discount of 22 percent on pre-foreclosure purchases for the entire year.
Pre-foreclosure homes that sold in the fourth quarter of 2011 took an average of 308 days to sell after starting the foreclosure process.
Third parties purchased a total of 115,777 bank-owned REO homes in the fourth quarter, down 10 percent from the previous quarter and down 12 percent from the fourth quarter of 2010.
Despite the nationwide decrease, RealtyTrac says REO sales increased 20 percent or more on a year-over-year
basis in several states, including Minnesota (65 percent), Wisconsin (23 percent), Washington (21 percent), and Illinois (20 percent).
REOs sold for an average of $149,686 in the fourth quarter, 36 percent below the average sales price of a non-foreclosure home, while the average discount on bank-owned homes for the entire year was 40 percent.
REOs that sold in the fourth quarter took an average of 175 days to sell after completing the foreclosure process.
“Sales of foreclosures in the fourth quarter continued to be slowed by questions surrounding proper foreclosure paperwork and procedures,” said Brandon Moore, RealtyTrac’s CEO. “Even so, foreclosures accounted for nearly one in every four sales during the quarter and for the entire year.”
Moore says his firm expects to see foreclosure-related sales increase in 2012, particularly pre-foreclosure short sales, as lenders start to more aggressively dispose of distressed assets.
“We continued to see a shift toward pre-foreclosure sales, or short sales, and away from REO sales in the fourth quarter,” Moore said. “Nationally, pre-foreclosure sales increased 15 percent from a year ago while REO sales decreased 12 percent.”
Moore says short sales outnumbered REO sales in several bellwether markets, including Los Angeles, Miami, and Phoenix – all metros where REO sales had outnumbered pre-foreclosure sales a year ago.
“That trend will likely show up in more local markets in 2012 as lenders recognize short sales as a better option for many of their non-performing loans,” according to Moore.
Among metro areas with at least 500 short sales during the fourth quarter and where short sales increased at least 5 percent from a year ago, the San Francisco-Oakland-Fremont metro in California posted the biggest short sale discount at 41 percent.
Among metro areas with at least 500 REO sales during Q4 and where REO sales rose by at least 5 percent from the year-ago period, Wisconsin’s Milwaukee-Waukesha-West Allis metro saw the biggest discount. There, bank-owned properties sold for 58 percent less than non-foreclosure homes.
Combined, short sales and REOs accounted for 56 percent of all residential sales in Nevada in the fourth quarter, the highest percentage of any state.
From: http://ping.fm/YGtSK
02/29/2012 By: Carrie Bay
Pre-foreclosure short sales and sales of foreclosed REOs totaled 907,138 for the 2011 calendar year, RealtyTrac reported Thursday. These foreclosure-related transactions made up 23 percent of all residential sales in the U.S. last year, with short sales accounting for 9 percent and REOs accounting for 14 percent of 2011 home sales.
During the last three months of the year, third parties purchased a total of 88,303 pre-foreclosure homes that were in default or scheduled for auction, according to RealtyTrac. That tally represents a decrease of 5 percent from the previous quarter but is up 15 percent compared to the fourth quarter of 2010.
Pre-foreclosure sales increased more than 20 percent on a year-over-year basis in several states, including Michigan (103 percent), Georgia (59 percent), Arizona (48 percent), Washington (36 percent), Nevada (29 percent), Oregon (27 percent), Illinois (26 percent), Ohio (25 percent), California (23 percent), and Texas (22 percent).
RealtyTrac says pre-foreclosure short sales went for an average of $184,221 in the fourth quarter. The average sales price of a pre-foreclosure home in the fourth quarter was 21 percent below the average sales price of a non-foreclosure home, similar to the discount of 22 percent on pre-foreclosure purchases for the entire year.
Pre-foreclosure homes that sold in the fourth quarter of 2011 took an average of 308 days to sell after starting the foreclosure process.
Third parties purchased a total of 115,777 bank-owned REO homes in the fourth quarter, down 10 percent from the previous quarter and down 12 percent from the fourth quarter of 2010.
Despite the nationwide decrease, RealtyTrac says REO sales increased 20 percent or more on a year-over-year
basis in several states, including Minnesota (65 percent), Wisconsin (23 percent), Washington (21 percent), and Illinois (20 percent).
REOs sold for an average of $149,686 in the fourth quarter, 36 percent below the average sales price of a non-foreclosure home, while the average discount on bank-owned homes for the entire year was 40 percent.
REOs that sold in the fourth quarter took an average of 175 days to sell after completing the foreclosure process.
“Sales of foreclosures in the fourth quarter continued to be slowed by questions surrounding proper foreclosure paperwork and procedures,” said Brandon Moore, RealtyTrac’s CEO. “Even so, foreclosures accounted for nearly one in every four sales during the quarter and for the entire year.”
Moore says his firm expects to see foreclosure-related sales increase in 2012, particularly pre-foreclosure short sales, as lenders start to more aggressively dispose of distressed assets.
“We continued to see a shift toward pre-foreclosure sales, or short sales, and away from REO sales in the fourth quarter,” Moore said. “Nationally, pre-foreclosure sales increased 15 percent from a year ago while REO sales decreased 12 percent.”
Moore says short sales outnumbered REO sales in several bellwether markets, including Los Angeles, Miami, and Phoenix – all metros where REO sales had outnumbered pre-foreclosure sales a year ago.
“That trend will likely show up in more local markets in 2012 as lenders recognize short sales as a better option for many of their non-performing loans,” according to Moore.
Among metro areas with at least 500 short sales during the fourth quarter and where short sales increased at least 5 percent from a year ago, the San Francisco-Oakland-Fremont metro in California posted the biggest short sale discount at 41 percent.
Among metro areas with at least 500 REO sales during Q4 and where REO sales rose by at least 5 percent from the year-ago period, Wisconsin’s Milwaukee-Waukesha-West Allis metro saw the biggest discount. There, bank-owned properties sold for 58 percent less than non-foreclosure homes.
Combined, short sales and REOs accounted for 56 percent of all residential sales in Nevada in the fourth quarter, the highest percentage of any state.
From: http://ping.fm/YGtSK
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