Posts Tagged “real estate”
Cook County, Illinois Sheriff Thomas Dart said Tuesday he would not carry out evictions involving Bank of America , Ally Financial and JPMorgan Chase starting Oct. 25.
BofA, Ally and JPMorgan Chase suspended foreclosures in 23 states, which includes Illinois, as they review affidavits signed without proper review or a notary present. BofA said it will begin resubmitting affidavits and restart foreclosures in those 23 states on Oct. 25. Ally is resubmitting affidavits as it remediates faulty documentation.
Banks repossessed more than 102,000 homes in the Chicago area in September.
According to Dart’s office, the recent freezes did not stop evictions already in the process. These three servicers and their subsidiaries account for one-third of the 3,700 eviction orders filed in Cook County every year.
“I can’t possibly be expected to evict people from their homes when the banks themselves can’t say for sure everything was done properly,” Dart said. “I need some kind of assurance that we aren’t evicting families based on fraudulent behavior by the banks. Until that happens, I can’t in good conscience keep carrying out evictions involving these banks.”
Two years ago, Dart refused to carry out evictions for any banks when renters were given no notice about a foreclosure on their accommodation.
Friday, Dart sent a letter to the banks’ attorneys demanding affidavits that affirm any foreclosures filed in Cook County and those awaiting eviction orders in court have been properly processed. He gave the banks five days to respond.
According to Dart, legal proceedings take about two years from the time a foreclosure is filed until it reaches his office.
housingwire.com
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Market Update
 The housing market was off to a rocky start as the second half of the year began. Much of the volatility, however, was anticipated and attributed to the now-expired tax credit. Despite softened sales this last month, home prices continued to gain - thanks in part to record low jumbo loan rates, which are fueling more interest and activities in the higher end of the market.
Meanwhile, the economy still has a lot of ground to cover before achieving its full, sustainable recovery. Consumers, while remaining on the cautious side, have increased their spending, which is supported by a gradual improvement in income. The stagnant job market continues to be a cause for concern, but overall, financial conditions have improved.
For the first time in fourteen months, home sales fell below year-ago levels. Although the drop exceeded expectations, it is undoubtedly due to the expiration of the tax credit. Lawrence Yun, NAR chief economist, said, “given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs.”
July’s median home price was virtually unchanged. Home values have been stable for the past 18 months due in part to the tax credit. Experts believe that home prices will continue to be stable going forward.
The total number of homes on the market remains stable but the number of months worth of inventory has jumped due to lower home sales and fewer buyers in the market. This represents a great opportunity for buyers who have not yet purchased or who are considering a second home or investment property. Important to note is that experts anticipate stable prices and do not expect this to be an ongoing trend.
Source: National Association of Realtors
Interest Rates
Mortgage rates continued to set new record lows in August, providing real savings in interest and monthly payment for buyers and refinancers. As economic activity picks up, rates will rise to keep inflation in check.
Rates as of September 2.
This Month’s Video
Topics For Home Owners, Buyers & Sellers
Financial Reform
What it means for consumers
The Wall Street Reform and Consumer Protection Act was signed into law in late July. Before the pains of the financial crisis were just a thing of the past, Congress passed the biggest financial reform measures since the Great Depression. While much of the bill covers Wall Street measures and regulations, there are several changes consumers should be aware of. The following are the top measures related to financing for consumers:
- Mortgages. Lenders must determine if borrowers will be able to meet monthly obligations including mortgage, taxes, insurance, and assessments. Borrowers of adjustable rate mortgages must qualify at the highest rate. Additionally, lenders won’t be able to incentivize mortgage brokers to make higher-rate or riskier loans.
- Credit Reports. All consumers will no longer have access to government-mandated free annual credit reports. Consumers who are denied a loan or who are not offered the best interest rate will receive free copies of their credit scores. Credit scores and reports will be available for purchase through a credit bureau or myFICO.com.
- Credit and Debit Card Changes. Most notably, merchants may start incentivizing consumers to pay with cash, debit, or check. There may be changes to credit card rewards programs.
- Consumer Financial Protection Bureau. This new bureau will regulate consumer loans including mortgages, credit cards, student loans, payday loans, and check-cashing companies. Auto loans and insurance lending will be excluded.
The government’s goal of creating safer and easier to understand lending practices is to benefit the long-term strength of the economy.
For more information, see the following links:
 Local Lenders Rates
Consumers would be wise to do some shopping around for interest rates on mortgages.
Since the financial crisis began, many of the big banks consolidated and merged – Wells Fargo and Wachovia, for example – increasing the “big banks” combined market share. With fewer players in the game, rates don’t need to be as competitive as before the consolidation to get the same amount of business.
Smaller local or regional banks can offer significantly advantageous rates. Of course, each loan situation is different and depends on a variety of factors, but don’t forget due diligence – it could save big bucks in the long run.
Sources: The Wall Street Journal, USA Today, myfico.com
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Brought to you by
The Helen Oliveri Team of Keller Williams Realty
www.helenoliveri.com
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Market Update
 Housing activity continues to remain above year-ago levels despite some setbacks resulting from the now-expired tax credit. Improved stability in home prices with similar levels of distressed properties seen last year offers a hopeful sign the market is holding its ground. However, the economy still has a considerable way to go to achieve its full recovery.
Consumers are saving more and being picky about how they spend their money. While a higher savings rate means less spending in the near term, this is a positive sign that households are taking control of their finances to build some cushion that can be used to pay down debt and/or support future spending.
Existing home sales marked the twelfth consecutive month of year-over-year increase in June. On a monthly basis, sales activity eased 5.1% from May. The moderation in home sales reflects “understandable swings as buyers responded to the tax credits,” according to Lawrence Yun, NAR chief economist. He anticipates such impact to show up in the next two months.
June’s median home price increased for the fourth consecutive month. Distressed homes, accounting for 32% of sales last month, continued holding home prices at highly affordable levels for the time being. While distressed sales hovered around the same level as a year ago, the gain in home prices is pointing to a sustained stability in the making.
Interest Rates
Mortgage rates set a new record low in July as consumer confidence softened and unemployment remained elevated. This presents a great opportunity for buyers and investors. Coupled with lowered home prices and a robust rental market, investors are finding their way to cash-flow opportunities. As recovery gains deeper roots, rates will need to rise to keep inflation in check.
Rates as of August 6.
This Month’s Video
Topics For Home Owners, Buyers & Sellers
Consumers Beware: New Credit Card Tricks
On May 22, 2009, President Obama signed into law the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009, marking a turning point for American consumers and ending the days of unfair rate hikes and hidden fees. While the new law offers significant safeguards, consumers still need to be vigilant against new practices designed to outflank the new rules.
Stay as informed as possible, read your statement , report any irregularities immediately, and watch for these tricks.
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Shortened Billing Cycle: The CARD Act requires companies to allow a window of at least 21 days from when a statement is mailed and when payment is due. Cardholders are reporting being shortchanged on billing cycle time and then being assessed late-payment fees.
Advice: Watch out for shortened payment dates.
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Sunday Due Dates: The CARD Act stipulates if a creditor does not receive or accept payments on weekends or holidays, then the date is extended and late-payment fees shouldn’t be triggered. However, some banks say they’re open for business even when there’s no mail delivery.
Advice: Don’t assume you are safe.
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Low-Limit Cards: The CARD Act says a card’s total annual fees can’t exceed 25% of a borrower’s credit line. However, some issuers may be evading the fee restrictions by charging an up-front processing fee that doesn’t fall under the 25% cap.
Advice: Watch out for processing and other fees.
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False Inactive Fees: Issuers will no longer be able to charge inactivity fees or extra charges for people who don’t spend a certain amount each year, effective August 22. However, some issuers are charging an annual fee that’s waived if cardholders reach a certain spending threshold.
Advice: Watch out for conditional annual fees.
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Rebate Offers: Some credit cards offer refunds on finance charges when customers pay on time. However, rebate offers aren’t governed by the CARD Act, and such offers can be revoked suddenly and for any reason, leaving cardholders stuck with higher charges.
Advice: Rebates may translate to real savings in finance charges.
Source: The Wall Street Journal
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Brought to you by
The Helen Oliveri Team of Keller Williams Realty
www.helenoliveri.com
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A housing double-dip? More like a long, slow melt.
That is likely to be the takeaway from this week’s slew of housing reports. Tuesday could be a bright spot, with the National Association of Realtors expected to say existing-home sales rose some 5% from April to May to an annualized rate of about 6 million units.
That would be the third monthly increase in a row and the highest sales pace since November.
But that is unlikely to cement faith in the housing recovery. Sales have been juiced twice now by the government’s home-buyer tax credits, which expired April 30 for contracts and on June 30 for closings.
Indeed, the Commerce Department on Wednesday is expected to say new-home sales dropped 20% last month, according to economists surveyed by Dow Jones, to an annualized 400,000 units.
That would largely unwind sharp gains recorded in March and April ahead of the contract deadline. Already last week, Commerce said new home construction dropped by 10% last month.
It is far from clear this marks the start of a “double-dip” for the housing market. The hardest-hit segment—new home sales—is a small part of the market, accounting for just 8% of homes sold in April even with the tax credit’s lift.
Plus, its weakness should dissuade further building activity—a positive as it should stop inventory of unsold houses swelling even further. And the hit to overall gross domestic product is likely to be small: Residential investment accounts for just 2.4% of GDP.
Meanwhile, the much larger market of existing-home sales should hold up better. For one, existing homes run about 15%-20% cheaper on average than newly built ones. Sales, while likely to slump this summer, should firm toward year-end if the labor market continues its gradual improvement.
And affordability continues to improve: falling prices and historically low mortgage rates have lowered typical monthly payments to about 15% of household income, down from 21% in 2007.
Home prices may well slide further as the market searches for a floor. But a 5% decline, say, over the next year or two isn’t exactly a double-dip, and should ultimately support a healthier recovery.
Policy makers shouldn’t get in the way.
Wsj.com
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Commentary
The housing sector continues to show signs of recovery. Together the tax credit (which expired at the end of April), the more upbeat consumer confidence, and favorable market conditions all contributed to bolstering April’s sales activity – with existing home sales increasing for the second straight month.
The return of buyer confidence with much of the home price correction believed to be over, encouraging economic developments and historically low mortgage rates, will provide the stepping stone for further market stabilization.
Meanwhile, stagnant job growth and elevated levels of foreclosure continue to be cause for concern. The government is now taking proactive steps to restructure the mortgage industry with risk-management measures seen by experts as a “huge cut in red tape” that would ultimately benefit consumers.
The Housing Market
Existing Home Sales
Existing home sales strengthened in April to 5.77 million, up 8.7% from March and 22.8%from last April. This is the tenth consecutive month of year-over-year increases.
According to Lawrence Yun, NAR chief economist, although part of the uptick was expected from the tax credit, there’s also been a return of buyer confidence, for those who remained on the sideline last year. The return of confidence is a result of stabilized prices, an improved economy, and continued advantageous interest rates.
In March, 49% of sales were from first-time buyers.
Median Home Price
The median price for an existing home was $173,100 in April, up 2.1% from a year ago and 4% from March. Distressed homes, accounting for a third of last month’s sales, continued skewing prices downward slightly as they typically are discounted 15% compared to typical home sales. Overall, prices this past year showed increased stability over the previous year.
Inventory
Total housing inventory rose slightly to 4.04 million in March, representing slightly less than an eight-and-a-half month supply of sales (if homes continue to sell at the current pace consistently and no new homes come on the market). Compared to the previous year, there are now 3% more homes on the market. Although this is the first rise in twenty consecutive months of decline when compared to the previous year, NAR’s chief economist believes this increase can be attributed to the summer selling season and that home prices are back on track.
Mortgage Rates
Mortgage rates dipped back below 5% this month due largely in part to the European debt crisis. As confidence in the value of the Euro eroded, more investors chose the U.S. dollar instead. With more demand for dollars, the cost of debt (interest rate) dropped. This event has also shown the global recovery is not free-and-clear of roadblocks to complete recovery. However, experts still anticipate rates will increase to between 6% and 6.5% by the end of the year. As the recovery gains increasing traction, the Federal Reserve will need to increase rates to prevent inflation.
Affordability
Affordability remains advantageous, supported by some of the lowest mortgage rates in decades as well as less expensive home prices. The home price-to-income ratio continues to remain well below the historical average of 25%. The ratio now stands at 14.9%.
Sources: National Association of Realtors, Freddie Mac
Government Action
FHA Turns to Lenders to Monitor Brokers
As the Federal Housing Administration (FHA), the government agency that insures home loans, saw its market share rise to about one-third of the mortgage market last year, up from 2% in 2006, the number of brokers seeking to arrange FHA-backed loans has mushroomed to 9,043 at the end of 2009 from 5,759 just two years earlier.
The agency, finding itself inadequately equipped to monitor its brokers, is shifting the responsibility to its lenders.
The FHA expects the new policies to result in better risk management, and the cut in red tape should produce better rates for consumers.
As of May 20, the FHA no longer certifies mortgage brokers or tracks the performance of brokers’ loans. Instead, lenders are now required to sponsor brokers and assume responsibility for loans they originate, including losses from fraud or mistakes in underwriting. In addition to revamping broker insight, the agency also beefed up oversight of its lenders by increasing net-worth requirements to $1 million from $250,000. The change is in effect for one year for existing lenders.
Source: WSJ.com
Topics For Buyers & Sellers
Myths about Distressed Properties – Debunked!
 Distressed properties – foreclosures and short sales alike – represent potentially great value for prospective buyers. However, common misconceptions about the time and money investment involved with buying such properties may keep many from inquiring further into this market. KW Research survey findings, taken from more than 2,500 KW associate respondents who have worked with distressed properties, can help steer clear of concerns as you make your way to homeownership.
| Buyer Concern |
Research Found |
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It’s going to take forever to find
one I want.
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3 out of 5 REO buyers and 1 in every 2 short sale buyers spent less than one month searching for a home before writing an offer. |
| How many offers do I have to write before one gets accepted? 10? 20? |
7 out of 10 distressed property buyers wrote three or fewer offers before one was accepted.
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| I know I am getting a good deal but will the cost of repairs eat up the savings? |
Half of REO buyers and almost one-third of short sale buyers spent less than $5,000 in repairs.
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Brought to you by
The Helen Oliveri Team of Keller Williams Realty
www.helenoliveri.com |
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