Major Lenders Offering Perks on Short Sales

The nation’s leading mortgage lenders are extending extras for short sale transactions employed as an alternative to foreclosure – both in the form of monetary incentives for borrowers and streamlined procedures for real estate agents.

Wells Fargo says it has been making “enhanced financial relocation assistance offers” that can be as much as $10,000 or $20,000 to certain borrowers who meet undisclosed criteria who choose to go through with a short sale or transfer the title back to Wells via a deed-in-lieu.

This extra incentive is being offered to distressed borrowers in Florida and other states where the foreclosure process is lengthening, a spokesperson for Wells Fargo explained. The exact amount of the relocation funds provided to individual borrowers varies based on a number of factors, the company says.

Wells Fargo noted that this type of additional relocation assistance is only available on first-lien loans that the company itself owns – which represent only about 20 percent of the loans Wells Fargo services.

Chase is also offering a range of incentives to borrowers that agree to a pre-foreclosure sale “because if we can’t work out a modification, a short sale is a better result for the borrower, the servicer, the investor, and the neighborhood than a foreclosure,” the company said in a statement.

Chase says the amount of the offer “depends on a number of factors” but declined to share specific details on how much money it’s been providing to short sellers.

Citi has confirmed that it is offering incentives up to $12,000 for borrowers in cases where Citi owns the loan.

BofA says it is “committed to improving the short sale process” and has made procedural changes to cut some of the red tape for agents working with the bank on pre-foreclosure sales. They now allow real estate agents to submit a backup offer on a transaction if the original buyer has walked away from the sale.

This means that agents no longer have to initiate a brand new short sale if the buyer changes, Bank of America explained. Instead, agents can move ahead with the original transaction and continue to work with the same short sale specialist without having to resubmit all of the same documents and start from scratch.

The ultimate inside job!

This is a must watch 3 minute video...

50 to 1

A recent report by LPS (Lender Processing Services) stated that there were 4,084,557 mortgages 90 or more days delinquent or in foreclosure as of the end of May. Contrast that with actual foreclosure sales at 78,676 at month end, the volume of seriously past due loans over-shadowed the number of completed foreclosures by 50 to 1, according to LPS’ May Mortgage Monitor report released last Wednesday.

That is very scary...for every home actually sold at a foreclsoure sale there were FIFTY in line behind it where the owners were 90 or more days behind in their mortgage payments!

Right now I don't have the actual figures of the percentage of people who fall 90 or more days behind and eventually catch up on their back payments, interest, penalties, attorney fees, etc....but I have to believe it is fairly low. Then throw in the possibility that a big percentage of those delinquent homeowners are in a 'negative equity' position and any reasonable person has to assume that the chances of those delinquent owners getting current or even having the desire to get current is miniscule.

Additionally, LPS’ analysis found that inventories of foreclosures in judicial states ( In Florida we are a judicial stae) have increased twice as much as inventories in non-judicial states over the last year as courts have become clogged with high volumes of cases and lenders have slowed their processing of foreclosures, particularly in judicial areas muddled by affidavit issues.

Nationwide, the average time spent in foreclosure continues to extend, with more than 33 percent of borrowers in foreclosure not having made a payment in over two years, according to LPS latest study. LPS says overall delinquencies are almost double and foreclosures are eight times higher than historical norms.

So..what's my point in writing this post? Basically the same as many of my other posts, mainly "don't rely on what you hear on TV or read in the papers"...those stories present only a sound bite...there is no analysis, follow up or discussion. Many times there is an agenda or spin being promoted. It is easy to hear a 'housing is rebounding' story on a Monday and a 'housing is getting worse' story on Tuesday.

Draw your own conclusions from the above... but that information from LPS tells me that there are many, many foreclosures and short sales that will be continuing to hit the market in the next 3-4 years...continuing to contribute to declining home values. If you are thinking about selling...call me and lets decide if it makes sense to do it sooner rather than later.

If you are thinking about buying, lets sit down and explore your options and see if it makes sense for you to buy now.

My direct line is 561 602 1258 Or you can email me HERE

July 4th, 2011

I am well aware of the toil, and blood, and treasure, that it will cost us to maintain this declaration, and support and defend these states. Yet, through all the gloom, I can see the rays of light and glory; I can see that the end is more than worth all the means, and that posterity will triumph.

John Adams, letter to Abigail Adams, July 3, 1776

Read our blog…be the first to know!

Give me a call today if you are interested in this pre-approved short sale...it is not on the market yet, but will be soon.

It is in great shape and is an excellent value. So if you want the first opportunity to view this home,

call me right away: 561-602-1258

NAR's Yun has just entered...The Twilight Zone

Today, the stock market surged on DECLINING home sales...the 'market' expected the Natl Assn of Realtors report to come in at 4.8M, instead it came in at 4.81M and everyone is ecstatic!

 

Last months sales were originally reported at 5.05M...but revised downward to 5.0M- (a common tactic...and watch, the 4.81 will get 'revised down' at some point).

 

And the NAR chief economist, Lawerence Yun, had the following (laughable) reasoning for the decline:...temporary factors held back the market in May... “Spiking gasoline prices along with widespread severe weather hurt house shopping in April, leading to soft figures for actual closings in May,” he said. “Current housing market activity indicates a very slow pace of broader economic activity, but recent reversals in oil prices are likely to mitigate the impact going forward. The pace of sales activity in the second half of the year is expected to be stronger than the first half, and will be much stronger than the second half of last year.”

 

I have to tell you...most of the time I am embarrassed to be a paying member of NAR. Spiking gasoline prices? Isn't that pathetic? You mean to tell me that Mr. and Mrs. potential homebuyer, just about to sign on the dotted line, decided that they couldn't afford a house because gas rose by forty cents? Let's figure this out; suppose that the average mileage is 18 MPG, the average miles driven per year is 15,000...that would be 834 gallons a year...at 40 cents a gallon hike that is an extra $374 per year, or an $31 per month, or an extra $7.75 per week! If $31 a month is turning buyers into non-buyers...they should not have been thinking about buying in the first place!

 

When are we going to get some truth out of the NAR PR machine? No wonder agents are regarded on par with the stereotypical used-car salesman...it is well deserved!

Happy Fathers Day

To a child…LOVE is spelled TIME.

Click on the photo above…it will take you to see a touching and insightful 2 minute video about what is most important to your kids.

Blessings to all of the Fathers out there.

Bankruptcy Basics Video Series

Questions about bankruptcy come up at a majority of my appointments with sellers who are upside down on their homes and trying to explore their options. I always defer  to the experts on the subject: bankruptcy attorneys. But, I recently came across this series of helpful videos that will give homeowners a basic understanding of the various bankruptcy options. Just click on the video, below. You can then watch the entire series of nine short videos.

Home price plunge coming - Shiller - Jun. 9, 2011

NEW YORK (CNNMoney) -- In an off-hand remark before cameras and microphones, economist and housing market guru Robert Shiller opined earlier this year that he would not be shocked if there was another 10% to 25% in the nation's home price plunge -- and he's not backing down from that statement.

At a S&P Housing Summit in New York, Shiller on Thursday reiterated his fears of falling home prices. It's not a forecast, he said, just a comment on his understanding of housing market trends.

He explained that speculative markets, like stocks or commodities, act like random walks. They go up and down all the time. Housing market direction tends to be more consistent.

"I worry that this is a real and continuing downturn, like in Japan," Shiller said. "It had a boom in the 1980s that peaked in 1991. Prices declined in the major cities for 15 straight years after that."

The U.S. housing market is hard to predict because the boom and bust it went through was unique. Shiller has studied historical price data back to the 1890s and found nothing like it.

"This is the biggest housing boom and bust in U.S. history," he said. "The bubble was unique. "That makes it impossible for statisticians to forecast because they deal with things that repeat themselves. You see a pattern and expect it to repeat."

It's even different from the Great Depression, when the home price plunge was at about the same rate. The big difference, however, was that prices of nearly everything else cratered in the 1930s as well -- which has not been true during the housing bust.

Home price plunge coming - Shiller - Jun. 9, 2011

It's Official...

The house price collapse is now worse than it was during the Great Depression.

That astonishing piece of information comes from the researchers at the think tank ‘Capital Economics’. It follows Tuesday's news from Case-Shiller that house prices fell again in March, as the double dip gets worse. Writes Capital Economics' senior economist Paul Dales, "On the Case-Shiller measure, prices are now 33% below the 2006 peak and are back at a level last seen in the third quarter of 2002. This means that prices have now fallen by more than the 31% decline endured during the Great Depression."

(This is on a National basis...here in South Florida our price declines are even steeper....over 50% from the top reached in late 2005. We are now back to prices not seen since 1999-2000. (italics mine)).

Capital Economics says the latest double-dip in housing should come as no surprise. It's very much following a pattern seen in the early 30s, when a brief recovery also petered out. (the brief recovery was a govt. induced false recovery via the homebuyer tax credit). The same has also happened in other big housing busts around the world, the think-tank says. It believes prices are going to fall even further before we hit rock bottom, maybe sometime next year.

(Last year, the 'experts were saying 2nd or 3rd quarter of 2011 would be the bottom...next year, they'll move their 'predictions' again. These 'experts' should ask someone actually IN the real estate business their opinion. I have been calling a 'saw tooth bottom' possibly by 2015; and that's only if all other housing factors (interest rates, loan qualification standards, mortgage interest deduction, etc. stay the same! Is there a silver lining? There is if you have a long enough time-line. If you can get the financing, housing is now cheap. At many price points, renting is more expensive than owning).

Capital Economics calculated that housing is now the cheapest it's been in thirty-five years.

(With mortgages rates still at all time lows, and inflation creeping in, housing here can be a good deal. But you'll have to be patient to see the biggest rewards. Capital Economics says, back in the Depression, it took 19 years for house prices to recover to their previous peaks....and it will likely take longer this time around. Now, I'm no Harvard trained economist, but my understanding is that during inflationary periods, having fixed rate debt is a benefit...you're paying back your debt with cheaper dollars. And this is the theory behind what Fed is going to do to pay off OUR debt! So, what does this mean for you? If you're a seller considering selling soon or within the next few years...sell now...be the NEXT home to sell. If you're a buyer...make sure that you have a very good reason for buying (and there are still many good reasons) and a long enough time horizon to ride out the value fluctuations ahead).

If you'd like to further discuss the implications of the current market economics for your specific situation, just call me on my direct line, 561-602-1258.

Thanks for reading,

Steve Jackson