Find The Best Deal On Home Refinancing
http://www.kcra.com/family/19402420/detail.html
(ARA) - Like so many Americans, you may have a balloon mortgage that is coming due or you've had an unexpected financial hit such as a large hospital bill or a job loss that has made your current mortgage payments unreasonable. If so, refinancing your mortgage can be a great way to save money every month.Refinancing your mortgage also lets you consolidate other debt, such as credit card balances, into one low-interest loan. You may also want to consider converting some of the equity in your home to cash to use for large expenses such as college tuition or home improvement.Online services like Bills.com make it easier than ever to find the best deal on refinancing your home. With a couple clicks of the mouse, you'll receive quotes from up to four lenders so you can choose the best deal for your situation.Before you refinance, ask yourself the following questions:
How long will I be in my house? If you're planning to move soon, it may not make sense to refinance. Calculate how much you would save monthly, and then compare that number to the costs of refinancing to make your decision. You can find a number of refinance calculators on the Internet, including at Bills.com.
Can I afford to cash out equity in my home? Paying college tuition is a good use of your home equity. Taking the value out of your home to take the family to Disney World may be fun, but in the long run, not wise. Just remember how long it took you to build up that equity.
Can I change my habits? Using a home refinancing to consolidate debt can be a good idea -- but only if you don't revert to your old behavior. Clearing your credit card debt and then starting the cycle of maxing them out again means you'll end up back at the same spot. If you are consolidating debt, cut up your credit cards or resolve to pay them off in full each month.When you're ready to refinance, Bills.com makes it simple. Just fill out the short information form on the Web site, hit submit and up to four lenders will make you an offer. The site only asks for non-sensitive information such as the current value of your home, whether you're employed, if you've ever declared bankruptcy. You will not be required to supply personal information such as a Social Security number until you get further into the process.How can you find the best deals in home refinancing? Check out Visit Bills.com to get bids from up to four lenders.
Wednesday, July 29, 2009
Monday, July 27, 2009
US Home Sales Have the Smallest Decline in 10 months
July 22 (Bloomberg) -- U.S. home prices had the smallest annual drop in 10 months, signaling the free fall of property values is abating in the three-year housing slump at the center of a global recession.
Prices declined 5.6 percent in May from a year earlier and rose 0.9 from April, the Federal Housing Finance Agency in Washington said today. Economists expected a 0.2 percent drop for the month, according to the median of 16 estimates in a Bloomberg survey.
“We saw a rebound of home prices in some parts of the country in part because the share of distressed sales dipped,” said Thomas Lawler, a former Fannie Mae economist who’s an independent consultant in Leesburg, Virginia. “That’s not any solace to anyone losing his shirt.”
Five U.S. regions showed price increases in May from April, the FHFA said. Job losses and record foreclosures have deterred buyers and slashed U.S. home prices 33 percent since the July 2006 peak, according to the S&P/Case-Shiller index. The highest unemployment since 1983 and the biggest foreclosure rate on record thwarted government efforts to revive real estate demand.
The area that includes California had the biggest one-month gain from April, at 2.7 percent. The South Atlantic region that includes Florida saw a 1.4 percent increase in May. Prices in New England fell 2 percent and in the region that includes New York and New Jersey dropped 0.1 percent.
Regional Prices
Every region of the U.S. saw price declines in May from a year earlier, the FHFA said. California dropped the most, at 14 percent. The South Atlantic slid 6.6 percent and the New York and New Jersey region was down 4.3 percent.
“The distress in the housing market was not caused by unemployment, but now we are seeing a wave of delinquencies and foreclosures by people who, if they had kept their jobs, would be unlikely to default,” Lawler said.
The unemployment rate rose to 9.5 percent in June, the highest since 1983, bringing the total number of lost jobs to about 6.5 million since the recession started in December 2007, the Labor Department said. Home prices in 20 major U.S. metropolitan areas dropped 18.1 percent in April from a year earlier, according to the S&P/Case-Shiller index.
Federal Efforts
The Federal Reserve is trying to keep rates low and spark a housing recovery by purchasing as much as $1.25 trillion in mortgage-backed securities to free up funding for home loans.
Home-loan rates fell to a record low twice in April, helped by the Fed’s program. Rates started climbing in May along with Treasury yields on investor concern that a greater supply of debt being sold to fund government spending will fuel inflation. In June the average 30-year rate reached a 2009 high of 5.59 percent, according to Freddie Mac.
Last week the rate was 5.14 percent, down from 5.2 percent a week earlier, according to the McLean, Virginia-based mortgage buyer.
President Barack Obama has pledged to spend $275 billion to help keep as many as 9 million Americans in their homes. The government is offering incentives to servicers, the companies that administer loans, to modify terms for delinquent borrowers or refinance mortgages that exceed the value of homes.
Late Payments
Those efforts may not be able to keep up with the number of Americans falling behind on loan payments. The U.S. delinquency rate rose to a seasonally adjusted 9.12 percent in the first quarter and the share of loans entering foreclosure rose to 1.37 percent, the Mortgage Bankers Association said in a May 28 report. Both figures were the highest in records going back to 1972.
One in every eight Americans is now late on a home-loan payment or already in foreclosure, according to Jay Brinkmann, chief economist for the Washington-based bankers’ group.
U.S. foreclosure filings -- notices of default, auction or bank seizure -- rose to a record in 2009’s first half, according to RealtyTrac Inc., an Irvine, California-based seller of real estate data. More than 1.5 million properties, one in every 84 U.S. households, received a foreclosure filing, RealtyTrac said in a July 16 report. That was a 15 percent increase from a year earlier.
The FHFA index tracks price changes for properties financed with mortgages owned or securitized by government-controlled Fannie Mae, the largest U.S. mortgage buyer, and Freddie Mac, which is No. 2. It excludes foreclosed properties bought with cash or financed with so-called FHA loans guaranteed by the Federal Housing Administration.
To contact the reporter on this story: Kathleen M. Howley in Boston at kmhowley@bloomberg.net. Last Updated: July 22, 2009 10:57 EDT
Prices declined 5.6 percent in May from a year earlier and rose 0.9 from April, the Federal Housing Finance Agency in Washington said today. Economists expected a 0.2 percent drop for the month, according to the median of 16 estimates in a Bloomberg survey.
“We saw a rebound of home prices in some parts of the country in part because the share of distressed sales dipped,” said Thomas Lawler, a former Fannie Mae economist who’s an independent consultant in Leesburg, Virginia. “That’s not any solace to anyone losing his shirt.”
Five U.S. regions showed price increases in May from April, the FHFA said. Job losses and record foreclosures have deterred buyers and slashed U.S. home prices 33 percent since the July 2006 peak, according to the S&P/Case-Shiller index. The highest unemployment since 1983 and the biggest foreclosure rate on record thwarted government efforts to revive real estate demand.
The area that includes California had the biggest one-month gain from April, at 2.7 percent. The South Atlantic region that includes Florida saw a 1.4 percent increase in May. Prices in New England fell 2 percent and in the region that includes New York and New Jersey dropped 0.1 percent.
Regional Prices
Every region of the U.S. saw price declines in May from a year earlier, the FHFA said. California dropped the most, at 14 percent. The South Atlantic slid 6.6 percent and the New York and New Jersey region was down 4.3 percent.
“The distress in the housing market was not caused by unemployment, but now we are seeing a wave of delinquencies and foreclosures by people who, if they had kept their jobs, would be unlikely to default,” Lawler said.
The unemployment rate rose to 9.5 percent in June, the highest since 1983, bringing the total number of lost jobs to about 6.5 million since the recession started in December 2007, the Labor Department said. Home prices in 20 major U.S. metropolitan areas dropped 18.1 percent in April from a year earlier, according to the S&P/Case-Shiller index.
Federal Efforts
The Federal Reserve is trying to keep rates low and spark a housing recovery by purchasing as much as $1.25 trillion in mortgage-backed securities to free up funding for home loans.
Home-loan rates fell to a record low twice in April, helped by the Fed’s program. Rates started climbing in May along with Treasury yields on investor concern that a greater supply of debt being sold to fund government spending will fuel inflation. In June the average 30-year rate reached a 2009 high of 5.59 percent, according to Freddie Mac.
Last week the rate was 5.14 percent, down from 5.2 percent a week earlier, according to the McLean, Virginia-based mortgage buyer.
President Barack Obama has pledged to spend $275 billion to help keep as many as 9 million Americans in their homes. The government is offering incentives to servicers, the companies that administer loans, to modify terms for delinquent borrowers or refinance mortgages that exceed the value of homes.
Late Payments
Those efforts may not be able to keep up with the number of Americans falling behind on loan payments. The U.S. delinquency rate rose to a seasonally adjusted 9.12 percent in the first quarter and the share of loans entering foreclosure rose to 1.37 percent, the Mortgage Bankers Association said in a May 28 report. Both figures were the highest in records going back to 1972.
One in every eight Americans is now late on a home-loan payment or already in foreclosure, according to Jay Brinkmann, chief economist for the Washington-based bankers’ group.
U.S. foreclosure filings -- notices of default, auction or bank seizure -- rose to a record in 2009’s first half, according to RealtyTrac Inc., an Irvine, California-based seller of real estate data. More than 1.5 million properties, one in every 84 U.S. households, received a foreclosure filing, RealtyTrac said in a July 16 report. That was a 15 percent increase from a year earlier.
The FHFA index tracks price changes for properties financed with mortgages owned or securitized by government-controlled Fannie Mae, the largest U.S. mortgage buyer, and Freddie Mac, which is No. 2. It excludes foreclosed properties bought with cash or financed with so-called FHA loans guaranteed by the Federal Housing Administration.
To contact the reporter on this story: Kathleen M. Howley in Boston at kmhowley@bloomberg.net. Last Updated: July 22, 2009 10:57 EDT
Friday, July 24, 2009
Real Estate Sales
Real Estate Sales
Posted: Friday, Jul 24, 2009 - 05:11:08 pm PDTEmail this story Printer friendly version
http://www.cdapress.com/articles/2009/07/24/real_estate/1-real-estate-sales.txt
By Press staff andThe Associated Press
Jeff Chiu/Associated Press In this July 21 photo, a home for sale is shown in San Francisco. A real estate group's report said Thursday, July 23, sales of previously occupied homes rose 3.6 percent from May to June, the third consecutive monthly increase and a sign that a housing recovery is under way in much of the country.
COEUR d'ALENE - Homebuyers across the Western U.S., many convinced home prices are close to the bottom, helped fuel a 15 percent annual increase in the region's home sales in June, according to two reports released Thursday.
And while it's not likely to mean another huge surge in out-of-state buyers flush with excess cash to drive North Idaho prices higher, it could mean another trickle of transplants."We are getting back to the way it was eight years ago, before the boom," said Michael Threadgill at Keller Williams Realty in Coeur d'Alene. That means a mix of people coming into the area, and others leaving.Fire-sale prices on foreclosures and other distressed properties lured many buyers, particularly in California, Nevada and Phoenix. Those sales also dragged down the median home sales price in the 13-state region. It tumbled nearly 25 percent from June of last year to $214,800, the National Association of Realtors said.That was the biggest median price decline in any region and helped pull the national median down about 15 percent from year-ago levels to $181,800. Nationally, sales rose 4 percent, without adjusting for seasonal factors. But more importantly, sales posted their third monthly increase, indicating the housing market has turned the corner and is recovering.Leonard Baron, a real estate professor at San Diego State University, said for homes in the lower end of the market at least, where many properties are getting multiple bids, "we've hit a floor." But the same is not true of homes above the median price."For higher-dollar properties, it's harder to tell," Baron said. Threadgill said Kootenai County is similar, with good activity on homes less than $200,000."There is a healthy amount of demand," he said.The turnaround in the West, has also been geographically uneven. Las Vegas, Phoenix, Los Angeles, San Francisco, San Diego and Boise were the only major metros in the West to register an increase in home sales last month, according to The Associated Press-Re/Max Monthly Housing Report, released Thursday.
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"Interest rates are very favorable, so I've had a lot of people looking and getting off the fence," said Laura Zajdman, a ZipRealty agent in Los Angeles.Elsewhere in the West, home sales fell last month in Anchorage, Alaska, Denver, Albuquerque, N.M., Billings, Mont., Honolulu, Portland, Ore., and Seattle, according to the report, which tallies all home sales in the metropolitan statistical area by all real estate agents, regardless of company affiliation.The demand for bargain-priced properties has created a traffic jam of buyers for lenders trying to unload homes. Often, banks are fielding multiple offers for a single property and buyers are finding themselves forced to put in bids higher than asking price - a market dynamic not seen since the heady days of the housing boom."There's an extreme amount of multiple offers on those (bank-owned) properties," said Mike West, broker-owner of Century 21 MoneyWorld in Las Vegas. "A decent property, within days on the market, could literally have 10 to 20 offers.""That happens here, too," Threadgill said, and in some cases is driving prices up. A bank selling a home worth about $200,000 may offer it at $150,000, but multiple offers can drive bidding to $180,000 - still a short-sale price for the buyer, but netting the bank more of its investment."The worst may be over," Threadgill said. "It is going to take a while to sort through all the repercussions."
Posted: Friday, Jul 24, 2009 - 05:11:08 pm PDTEmail this story Printer friendly version
http://www.cdapress.com/articles/2009/07/24/real_estate/1-real-estate-sales.txt
By Press staff andThe Associated Press
Jeff Chiu/Associated Press In this July 21 photo, a home for sale is shown in San Francisco. A real estate group's report said Thursday, July 23, sales of previously occupied homes rose 3.6 percent from May to June, the third consecutive monthly increase and a sign that a housing recovery is under way in much of the country.
COEUR d'ALENE - Homebuyers across the Western U.S., many convinced home prices are close to the bottom, helped fuel a 15 percent annual increase in the region's home sales in June, according to two reports released Thursday.
And while it's not likely to mean another huge surge in out-of-state buyers flush with excess cash to drive North Idaho prices higher, it could mean another trickle of transplants."We are getting back to the way it was eight years ago, before the boom," said Michael Threadgill at Keller Williams Realty in Coeur d'Alene. That means a mix of people coming into the area, and others leaving.Fire-sale prices on foreclosures and other distressed properties lured many buyers, particularly in California, Nevada and Phoenix. Those sales also dragged down the median home sales price in the 13-state region. It tumbled nearly 25 percent from June of last year to $214,800, the National Association of Realtors said.That was the biggest median price decline in any region and helped pull the national median down about 15 percent from year-ago levels to $181,800. Nationally, sales rose 4 percent, without adjusting for seasonal factors. But more importantly, sales posted their third monthly increase, indicating the housing market has turned the corner and is recovering.Leonard Baron, a real estate professor at San Diego State University, said for homes in the lower end of the market at least, where many properties are getting multiple bids, "we've hit a floor." But the same is not true of homes above the median price."For higher-dollar properties, it's harder to tell," Baron said. Threadgill said Kootenai County is similar, with good activity on homes less than $200,000."There is a healthy amount of demand," he said.The turnaround in the West, has also been geographically uneven. Las Vegas, Phoenix, Los Angeles, San Francisco, San Diego and Boise were the only major metros in the West to register an increase in home sales last month, according to The Associated Press-Re/Max Monthly Housing Report, released Thursday.
= 1234764000) && (nAdsysTime
"Interest rates are very favorable, so I've had a lot of people looking and getting off the fence," said Laura Zajdman, a ZipRealty agent in Los Angeles.Elsewhere in the West, home sales fell last month in Anchorage, Alaska, Denver, Albuquerque, N.M., Billings, Mont., Honolulu, Portland, Ore., and Seattle, according to the report, which tallies all home sales in the metropolitan statistical area by all real estate agents, regardless of company affiliation.The demand for bargain-priced properties has created a traffic jam of buyers for lenders trying to unload homes. Often, banks are fielding multiple offers for a single property and buyers are finding themselves forced to put in bids higher than asking price - a market dynamic not seen since the heady days of the housing boom."There's an extreme amount of multiple offers on those (bank-owned) properties," said Mike West, broker-owner of Century 21 MoneyWorld in Las Vegas. "A decent property, within days on the market, could literally have 10 to 20 offers.""That happens here, too," Threadgill said, and in some cases is driving prices up. A bank selling a home worth about $200,000 may offer it at $150,000, but multiple offers can drive bidding to $180,000 - still a short-sale price for the buyer, but netting the bank more of its investment."The worst may be over," Threadgill said. "It is going to take a while to sort through all the repercussions."
Wednesday, July 22, 2009
Capital-area foreclosures keep climbing in second quarter
Capital-area foreclosures keep climbing in second quarter
By Jim Wasserman jwasserman@sacbee.com
http://www.sacbee.com/business/story/2047112.html
The capital-area foreclosure crisis raged on in April, May and June, with lenders repossessing another 4,448 homes and filing notices of default against 10,682 more households late on their payments.
The newest statistics from La Jolla-based researcher MDA DataQuick brought the foreclosure total to 41,903 households since the start of 2007 in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties.
That's 10.2 percent of California's 410,744 foreclosures in the same time period. Statewide, 45,677 households surrendered keys to banks during the second quarter - and 124,562 received notices of default, DataQuick reported. Those are the formal foreclosure warnings issued when homeowners fall three months or more behind on payments.
As the state's foreclosure crisis has grown and caused the economy to wobble and unemployment to rise to 11.6 percent statewide and the same in the capital region, the percentage of borrowers able to find their way out of trouble has steadily declined, DataQuick has reported.
The foreclosure tally rose both statewide and in the eight-county capital region from the first quarter, while the number of loan defaults fell slightly.
Regional highlights:
• Amador County: 29 foreclosures and 85 defaults.
• El Dorado County: 202 foreclosures and 632 defaults.
• Nevada County: 98 foreclosures and 286 defaults.
• Placer County: 515 foreclosures and 1,570 notices of default.
• Sacramento County: 3,019 foreclosures and 6,862 defaults.
• Sutter County: 154 foreclosures and 355 notices of default.
• Yolo County: 216 foreclosures, 541 defaults.
• Yuba County: 215 foreclosures and 351 defaults.
DataQuick predicted foreclosure numbers will go higher in the third quarter as lenders boost hiring to deal with a large backlog of delinquencies.
The firm said half the loans that defaulted during the quarter were made before July 2006, and half afterward. The lenders that originated the most troubled loans were Washington Mutual, a failed thrift taken over late last year by JP Morgan Chase, Wells Fargo and Countrywide, the failed lender taken over by Bank of America in mid-2008.
By Jim Wasserman jwasserman@sacbee.com
http://www.sacbee.com/business/story/2047112.html
The capital-area foreclosure crisis raged on in April, May and June, with lenders repossessing another 4,448 homes and filing notices of default against 10,682 more households late on their payments.
The newest statistics from La Jolla-based researcher MDA DataQuick brought the foreclosure total to 41,903 households since the start of 2007 in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties.
That's 10.2 percent of California's 410,744 foreclosures in the same time period. Statewide, 45,677 households surrendered keys to banks during the second quarter - and 124,562 received notices of default, DataQuick reported. Those are the formal foreclosure warnings issued when homeowners fall three months or more behind on payments.
As the state's foreclosure crisis has grown and caused the economy to wobble and unemployment to rise to 11.6 percent statewide and the same in the capital region, the percentage of borrowers able to find their way out of trouble has steadily declined, DataQuick has reported.
The foreclosure tally rose both statewide and in the eight-county capital region from the first quarter, while the number of loan defaults fell slightly.
Regional highlights:
• Amador County: 29 foreclosures and 85 defaults.
• El Dorado County: 202 foreclosures and 632 defaults.
• Nevada County: 98 foreclosures and 286 defaults.
• Placer County: 515 foreclosures and 1,570 notices of default.
• Sacramento County: 3,019 foreclosures and 6,862 defaults.
• Sutter County: 154 foreclosures and 355 notices of default.
• Yolo County: 216 foreclosures, 541 defaults.
• Yuba County: 215 foreclosures and 351 defaults.
DataQuick predicted foreclosure numbers will go higher in the third quarter as lenders boost hiring to deal with a large backlog of delinquencies.
The firm said half the loans that defaulted during the quarter were made before July 2006, and half afterward. The lenders that originated the most troubled loans were Washington Mutual, a failed thrift taken over late last year by JP Morgan Chase, Wells Fargo and Countrywide, the failed lender taken over by Bank of America in mid-2008.
Monday, July 20, 2009
California foreclosure deals are bittersweet for novice investors
California foreclosure deals are bittersweet for novice investors
By Nicole Williams nwilliams@sacbee.com
http://www.sacbee.com/ourregion/story/2038862.html
Many Californians saw their dreams go up in smoke when the housing market burned up as a result of heavy job losses, bankruptcies and balloon mortgage payments, but others are rising from the ashes and forging new investment endeavors.
All the bathroom mirrors are missing, there's dog urine in the air-conditioning unit and holes in the walls, but the foreclosed house Sacramento resident Sherie Coelho purchased for $115,000 just a few doors down from her own home is "a blessing and a gift," she said.
It was originally listed for $319,000, but because of its status as a former marijuana grow house, real estate agents couldn't get rid of it, Coelho said.
So, backed with $30,000 she received from her late mother, Coelho just secured her first rental property and hopes she will be able to save for her retirement.
"Almost overnight I've become an investor, and it wasn't necessarily intentional," she said.
Coelho isn't the only one who bought a foreclosed home on her south Sacramento block – a neighbor did so earlier this month. But there's something that makes Coelho different from most rental property investors in today's market – she lost her home in 1997.
The foreclosure was one of the most painful periods in Coelho's life, and it took three years to build back her credit.
"I felt like, 'Am I stupid? I'm an English teacher, I should know how to read these documents,' " she said. "It was like I should have understood."
Coelho, who teaches at Cosumnes River College, said going through a foreclosure has made her "more conscious of the human factor of the rise and fall of the housing market."
For Citrus Heights resident Doug Boethin – who purchased his first rental property last year when foreclosures flooded the market – securing the investment he had wanted for years was bittersweet.
"It isn't until you're actually out there (looking for properties) that you see the anger of the people who lost their homes," he said. "To actually witness that, was something to be had."
More foreclosures means more people are looking for rentals, making property investment an attractive business.
But first-time landlords often underestimate the legal requirements, time commitment and ongoing expenses involved in running a rental property, according to the Rental Housing Association.
There could be problems for renters and landlords if the new owners don't comply with laws and standards, including fair housing legislation and property maintenance, said Cory Koehler, RHA deputy director of government affairs.
Coelho and Boethin attended the RHA's new investors educational event Saturday to get schooled on the ins and outs of property management.
Coelho is prepared to invest anywhere from $5,000 to $10,000 to repair the cosmetic damage in her rental and has learned through experience that having a financial cushion is essential when you own a property.
At first, a $1,000 mortgage each month seems like a small price to pay for your dream investment, she said. But after a few months, "The house eventually owns you."
But losing a home doesn't mean all is lost, Coelho said. And she thinks she's a great example of that. Her foreclosure taught her to buy within her means, and now she thinks she'll have her rental property completely paid off in seven years.
"As far as a lesson learned," she said, "there is always hope."
By Nicole Williams nwilliams@sacbee.com
http://www.sacbee.com/ourregion/story/2038862.html
Many Californians saw their dreams go up in smoke when the housing market burned up as a result of heavy job losses, bankruptcies and balloon mortgage payments, but others are rising from the ashes and forging new investment endeavors.
All the bathroom mirrors are missing, there's dog urine in the air-conditioning unit and holes in the walls, but the foreclosed house Sacramento resident Sherie Coelho purchased for $115,000 just a few doors down from her own home is "a blessing and a gift," she said.
It was originally listed for $319,000, but because of its status as a former marijuana grow house, real estate agents couldn't get rid of it, Coelho said.
So, backed with $30,000 she received from her late mother, Coelho just secured her first rental property and hopes she will be able to save for her retirement.
"Almost overnight I've become an investor, and it wasn't necessarily intentional," she said.
Coelho isn't the only one who bought a foreclosed home on her south Sacramento block – a neighbor did so earlier this month. But there's something that makes Coelho different from most rental property investors in today's market – she lost her home in 1997.
The foreclosure was one of the most painful periods in Coelho's life, and it took three years to build back her credit.
"I felt like, 'Am I stupid? I'm an English teacher, I should know how to read these documents,' " she said. "It was like I should have understood."
Coelho, who teaches at Cosumnes River College, said going through a foreclosure has made her "more conscious of the human factor of the rise and fall of the housing market."
For Citrus Heights resident Doug Boethin – who purchased his first rental property last year when foreclosures flooded the market – securing the investment he had wanted for years was bittersweet.
"It isn't until you're actually out there (looking for properties) that you see the anger of the people who lost their homes," he said. "To actually witness that, was something to be had."
More foreclosures means more people are looking for rentals, making property investment an attractive business.
But first-time landlords often underestimate the legal requirements, time commitment and ongoing expenses involved in running a rental property, according to the Rental Housing Association.
There could be problems for renters and landlords if the new owners don't comply with laws and standards, including fair housing legislation and property maintenance, said Cory Koehler, RHA deputy director of government affairs.
Coelho and Boethin attended the RHA's new investors educational event Saturday to get schooled on the ins and outs of property management.
Coelho is prepared to invest anywhere from $5,000 to $10,000 to repair the cosmetic damage in her rental and has learned through experience that having a financial cushion is essential when you own a property.
At first, a $1,000 mortgage each month seems like a small price to pay for your dream investment, she said. But after a few months, "The house eventually owns you."
But losing a home doesn't mean all is lost, Coelho said. And she thinks she's a great example of that. Her foreclosure taught her to buy within her means, and now she thinks she'll have her rental property completely paid off in seven years.
"As far as a lesson learned," she said, "there is always hope."
Friday, July 17, 2009
Sacramento-area home sales fall for 1st time since April 2008
Sacramento-area home sales fall for 1st time since April 2008
By Jim Wasserman jwasserman@sacbee.com
http://www.sacbee.com/business/story/2033127.html
The 14-month streak is over.
Sacramento-area home sales reached their highest monthly count yet this year in June. But with fewer bank repos on the market, they failed to beat the numbers from June 2008, according to new statistics released Thursday from researcher MDA DataQuick.
It was the first time since April 2008 – when year-over-year figures turned positive after three years of declines – that sales failed to beat the previous year. That's the clearest indicator yet, said area market watchers, of the waning influence of repos – which last year ignited an explosion of sales among first-time buyers and investors.
"It's tough to beat (last year) when you don't have so many foreclosures out there to attract buyers," said DataQuick analyst Andrew LePage.
As banks hold repossessed properties off the market and contend with government foreclosure moratoriums, the market's lower end has shifted from abundance to scarcity, agents and buyers say.
The competition for increasingly hard-to-find deals in the repo market is leaving some potential buyers frustrated.
"It's impossible for us to get a foreclosure," said Karin DeFoe of Rocklin. "Since March we've lost three houses."
DeFoe described a scene now familiar to many buyers: initially low repo prices that stir a frenzy of multiple bids. Buyers are asked to bid higher; then the best offers are often rejected in favor of investor buyers with cash.
"They're bidding lower than I am, but they've got cash," said DeFoe, who is trying to buy a house for her college-age son to rent.
Sacramento researcher TrendGraphix reported 6,705 real estate listings in El Dorado, Placer, Sacramento and Yolo counties as June ended. That's the lowest number of homes for sale in the region in four years. Repos accounted for just 14.2 percent of the for-sale signs, compared with almost 28 percent late last year.
"The inventory isn't hitting the market soon enough. I don't think there's enough for the demand out there," said Erin Attardi, a Sacramento agent with Lyon Real Estate.
DataQuick counted 3,758 closed escrows in June for new and existing homes in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties. Repos accounted for 53.3 percent of Sacramento County's 2,284 sales, the firm said. New homes were just 9.3 percent of sales.
Median prices, meanwhile, remained stable at $175,000 in Sacramento County, the largest sector of the region's real estate market. That's the same as last month. But it's up from a low of $160,000 in February, when 25.3 percent of homes were priced below $100,000.
In June, just 18.2 percent of sales prices dipped below $100,000, DataQuick reported. The firm has credited rising median prices across much of metropolitan California to a rising share of higher-priced homes in the sales mix.
Attardi agreed, saying, "I think it's a combination of short sales penetrating that higher market where they weren't prevalent before."
Short sales – in which lenders accept less than owed to avoid higher costs of foreclosing and reselling in a falling market – are, indeed, rising as repos lose market share. The Sacramento Association of Realtors said this week that short sales accounted for 16.6 percent of transactions in Sacramento County and the city of West Sacramento in June, up from 14.5 percent in May.
"It's a complete shift," said Mike Toste, a Roseville real estate agent who has built a new team to ride the wave. Toste, of Coldwell Banker Sun Ridge, said many lenders, especially the Wells Fargo subsidiary Wachovia, are finally making short sales easier. Lender response times that formerly frustrated agents with 90-day waits have been halved, he said.
"Wachovia is responding in seven to 10 days," he said. Toste, Attardi and others say more than half the for-sale signs in the region now are short sales.
By Jim Wasserman jwasserman@sacbee.com
http://www.sacbee.com/business/story/2033127.html
The 14-month streak is over.
Sacramento-area home sales reached their highest monthly count yet this year in June. But with fewer bank repos on the market, they failed to beat the numbers from June 2008, according to new statistics released Thursday from researcher MDA DataQuick.
It was the first time since April 2008 – when year-over-year figures turned positive after three years of declines – that sales failed to beat the previous year. That's the clearest indicator yet, said area market watchers, of the waning influence of repos – which last year ignited an explosion of sales among first-time buyers and investors.
"It's tough to beat (last year) when you don't have so many foreclosures out there to attract buyers," said DataQuick analyst Andrew LePage.
As banks hold repossessed properties off the market and contend with government foreclosure moratoriums, the market's lower end has shifted from abundance to scarcity, agents and buyers say.
The competition for increasingly hard-to-find deals in the repo market is leaving some potential buyers frustrated.
"It's impossible for us to get a foreclosure," said Karin DeFoe of Rocklin. "Since March we've lost three houses."
DeFoe described a scene now familiar to many buyers: initially low repo prices that stir a frenzy of multiple bids. Buyers are asked to bid higher; then the best offers are often rejected in favor of investor buyers with cash.
"They're bidding lower than I am, but they've got cash," said DeFoe, who is trying to buy a house for her college-age son to rent.
Sacramento researcher TrendGraphix reported 6,705 real estate listings in El Dorado, Placer, Sacramento and Yolo counties as June ended. That's the lowest number of homes for sale in the region in four years. Repos accounted for just 14.2 percent of the for-sale signs, compared with almost 28 percent late last year.
"The inventory isn't hitting the market soon enough. I don't think there's enough for the demand out there," said Erin Attardi, a Sacramento agent with Lyon Real Estate.
DataQuick counted 3,758 closed escrows in June for new and existing homes in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties. Repos accounted for 53.3 percent of Sacramento County's 2,284 sales, the firm said. New homes were just 9.3 percent of sales.
Median prices, meanwhile, remained stable at $175,000 in Sacramento County, the largest sector of the region's real estate market. That's the same as last month. But it's up from a low of $160,000 in February, when 25.3 percent of homes were priced below $100,000.
In June, just 18.2 percent of sales prices dipped below $100,000, DataQuick reported. The firm has credited rising median prices across much of metropolitan California to a rising share of higher-priced homes in the sales mix.
Attardi agreed, saying, "I think it's a combination of short sales penetrating that higher market where they weren't prevalent before."
Short sales – in which lenders accept less than owed to avoid higher costs of foreclosing and reselling in a falling market – are, indeed, rising as repos lose market share. The Sacramento Association of Realtors said this week that short sales accounted for 16.6 percent of transactions in Sacramento County and the city of West Sacramento in June, up from 14.5 percent in May.
"It's a complete shift," said Mike Toste, a Roseville real estate agent who has built a new team to ride the wave. Toste, of Coldwell Banker Sun Ridge, said many lenders, especially the Wells Fargo subsidiary Wachovia, are finally making short sales easier. Lender response times that formerly frustrated agents with 90-day waits have been halved, he said.
"Wachovia is responding in seven to 10 days," he said. Toste, Attardi and others say more than half the for-sale signs in the region now are short sales.
Wednesday, July 15, 2009
Monday, July 13, 2009
Mortgage defaults spread as even 'safe' borrowers falter
Mortgage defaults spread as even 'safe' borrowers falter
By Jim Wasserman and Dale Kasler jwasserman@sacbee.com
http://www.sacbee.com/business/story/2017811.html
The mortgage default crisis has an ominous new face. It's your neighbor with a traditional fixed-rate loan.
No longer is the real estate bust simply the result of exotic, subprime loans that doubled payments and blew up in homeowners' faces. As the Sacramento economy buckles, even the safest mortgages have become part of a new wave of loan defaults, experts say.
With capital-area job losses reaching 45,000 in the past year and unemployment at 11.1 percent, lenders, bankruptcy attorneys and debt counselors all say they're seeing rising delinquencies among prime borrowers with fixed-rate loans and good credit. Many of those slipping into trouble are state workers, the mainstay of Sacramento's economy.
"The tide has definitely shifted," said Pam Canada, executive director of the Neighborworks Homeownership Center of Sacramento, a nonprofit loan counseling firm. "We're seeing more people with a loss of income."
Prime fixed-rate mortgages, with the most favorable interest rates and 15-, 20- or 30-year terms that guarantee the same monthly payment for the life of the loan, have long been the bulwark of American homeownership.
There are 3.3 million of them in California – 56 percent of all mortgages. But nearly 4 percent were delinquent in the first quarter, according to the Mortgage Bankers Association. That number was less than 1 percent two years ago, when the default crisis was dominated by subprime loans.
The MBA says layoffs are now hitting more educated borrowers.
"There tends to be a higher correlation there with having a fixed-rate mortgage," said Jay Brinkmann, chief economist of the lender trade group.
It's not just the layoffs creating trouble for traditionally safe loans. Many area workers have had to absorb wage cuts. Others who lost jobs have found new jobs that pay less. Or they have found only part-time work. Many workers who depend on overtime pay have also seen it disappear or dwindle.
Finally, in a capital region defined by a massive state government work force, furloughs have grown to three days monthly, approximating a 14 percent salary cut. Gov. Arnold Schwarzenegger is proposing still more pay cuts for an educated population that's increasingly showing up at nonprofit mortgage counseling centers.
This upheaval has had a ripple effect on small-business owners like Michael and Winnie Kyalwazi, owners of Cafe Le Monde at McClellan Business Park. They've fallen behind on their fixed-rate house payments because business is down 25 to 30 percent, said Michael Kyalwazi.
"This is a short setback, the way I look at it," he said. "We're viable. We just need some breathing room."
It's a familiar sentiment.
"Most want to pay, but they can't because they're underemployed and have cuts in income and cuts in commissions," said Paul Rigdon, vice president for lending at Sacramento's SAFE Credit Union. "We're seeing all kinds of income-related problems."
As the newest turn in a housing crisis that has seen 40,000 area foreclosures and heartbreak in thousands of other homes, trouble for prime borrowers is one more obstacle to a housing recovery any time soon.
Lending-industry officials say it's harder to restructure loans for jobless people who can barely afford any payment. Worse, economists say rising defaults and the foreclosures to come among these borrowers are likely to persist long after unemployment peaks sometime next year.
"Foreclosures and delinquencies have a long tail, and we will see that continue for several quarters after a turnaround in unemployment," said the MBA's Brinkmann.
Forecasters at Stockton's University of the Pacific predict unemployment in the capital region will peak late next year at 12.3 percent – and remain in double digits through 2011. If so, problems with prime loans are likely to linger in a region having a hard time catching a break.
Already in the foreclosure process is Ron McClure of Roseville. He bought a $600,000 house at Sun City Roseville in 2003, using a prime, fixed-rate loan that cost him $3,200 a month.
By Jim Wasserman and Dale Kasler jwasserman@sacbee.com
http://www.sacbee.com/business/story/2017811.html
The mortgage default crisis has an ominous new face. It's your neighbor with a traditional fixed-rate loan.
No longer is the real estate bust simply the result of exotic, subprime loans that doubled payments and blew up in homeowners' faces. As the Sacramento economy buckles, even the safest mortgages have become part of a new wave of loan defaults, experts say.
With capital-area job losses reaching 45,000 in the past year and unemployment at 11.1 percent, lenders, bankruptcy attorneys and debt counselors all say they're seeing rising delinquencies among prime borrowers with fixed-rate loans and good credit. Many of those slipping into trouble are state workers, the mainstay of Sacramento's economy.
"The tide has definitely shifted," said Pam Canada, executive director of the Neighborworks Homeownership Center of Sacramento, a nonprofit loan counseling firm. "We're seeing more people with a loss of income."
Prime fixed-rate mortgages, with the most favorable interest rates and 15-, 20- or 30-year terms that guarantee the same monthly payment for the life of the loan, have long been the bulwark of American homeownership.
There are 3.3 million of them in California – 56 percent of all mortgages. But nearly 4 percent were delinquent in the first quarter, according to the Mortgage Bankers Association. That number was less than 1 percent two years ago, when the default crisis was dominated by subprime loans.
The MBA says layoffs are now hitting more educated borrowers.
"There tends to be a higher correlation there with having a fixed-rate mortgage," said Jay Brinkmann, chief economist of the lender trade group.
It's not just the layoffs creating trouble for traditionally safe loans. Many area workers have had to absorb wage cuts. Others who lost jobs have found new jobs that pay less. Or they have found only part-time work. Many workers who depend on overtime pay have also seen it disappear or dwindle.
Finally, in a capital region defined by a massive state government work force, furloughs have grown to three days monthly, approximating a 14 percent salary cut. Gov. Arnold Schwarzenegger is proposing still more pay cuts for an educated population that's increasingly showing up at nonprofit mortgage counseling centers.
This upheaval has had a ripple effect on small-business owners like Michael and Winnie Kyalwazi, owners of Cafe Le Monde at McClellan Business Park. They've fallen behind on their fixed-rate house payments because business is down 25 to 30 percent, said Michael Kyalwazi.
"This is a short setback, the way I look at it," he said. "We're viable. We just need some breathing room."
It's a familiar sentiment.
"Most want to pay, but they can't because they're underemployed and have cuts in income and cuts in commissions," said Paul Rigdon, vice president for lending at Sacramento's SAFE Credit Union. "We're seeing all kinds of income-related problems."
As the newest turn in a housing crisis that has seen 40,000 area foreclosures and heartbreak in thousands of other homes, trouble for prime borrowers is one more obstacle to a housing recovery any time soon.
Lending-industry officials say it's harder to restructure loans for jobless people who can barely afford any payment. Worse, economists say rising defaults and the foreclosures to come among these borrowers are likely to persist long after unemployment peaks sometime next year.
"Foreclosures and delinquencies have a long tail, and we will see that continue for several quarters after a turnaround in unemployment," said the MBA's Brinkmann.
Forecasters at Stockton's University of the Pacific predict unemployment in the capital region will peak late next year at 12.3 percent – and remain in double digits through 2011. If so, problems with prime loans are likely to linger in a region having a hard time catching a break.
Already in the foreclosure process is Ron McClure of Roseville. He bought a $600,000 house at Sun City Roseville in 2003, using a prime, fixed-rate loan that cost him $3,200 a month.
Friday, July 10, 2009
How Assessor slashes property values
Home Front: How assessor slashes property values
By Jim Wasserman jwasserman@sacbee.com
http://www.sacbee.com/business/story/2014910.html
This week the Sacramento County Assessor's Office – and more like it across the great foreclosure belts of California – chopped property values again on nearly everything built in the housing boom.
The value slashing in Sacramento County that started in 2007 with 50,000 properties and 90,000 last year, reached 170,000 in 2009. That's nearly every lot carved from a pasture and turned into a new house since 2002 – or even earlier depending on where you live.
The good news: Your property taxes go down. The bad news: Well, don't even look.
Home Front caught up Thursday with Assistant Sacramento County Assessor Kathleen Kelleher for a few questions about the new values.
Your office reduced values for tax purposes on 170,000 properties. How many of those are houses?
Basically all of them. There are about 500 commercial properties. The rest are residential.
How's this actually done?
We use what we call sales-ratio trend analysis. It's a development of time-adjusted facts based on market sales. It is largely a computer analysis. We have a staff of 60 or 70 appraisers right now. We wouldn't be able to value 170,000 properties (personally) plus do our other work.
People often go to Zillow.com or Cyberhomes.com to look up their home values. Where does the county's assessed value fit into the question of, "What is my house worth?" Would real estate agents use your number to assign the house a value when listing it?
I really can't answer for them, but I doubt it. They'll probably go to their own analysis of what the market is doing.
Do people appeal these low values, arguing their house can't be worth so little?
I don't think anyone has gone to an appeal hearing on that.
This is the first time since 1978 that assessed values have gone negative from one year to the next. You've been in the office 22 years. Did you ever expect to see anything like this?
No.
Is this year the worst of it?
I really don't have a great answer for you on that one.
Banks try loan alternative
Fresh news on loan modifications: Nonprofit loan counselors say they're seeing more banks try an alternative to writing down principal. That's the industry term for permanently reducing what homeowners owe. Borrowers love it; banks don't.
Pam Canada, executive director of Neighborworks Homeownership Center of Sacramento, said this week some banks are agreeing to temporarily cut the amount owed.
Here's how it works: If a borrower paid $300,000 for a house that's now worth $200,000, that borrower can get the loan modified temporarily to make payments based on the $200,000 value. Then the other $100,000 is deferred – added back onto the loan five years from now, or when housing values rebound. A borrower might pay off that $100,000 after refinancing or selling. Canada said it's an emerging short-term fix that keeps people in homes and keeps banks from having to forgive so much of what's owed them.
Poll: Own home still dream
Survey of the week: 67 percent of Americans believe owning a house is still the "aspirational symbol" of the American dream.
So says a Harris Interactive survey of 2,122 adults – 71 percent of them homeowners. The May national online survey conducted for Delaware-based savings bank ING DIRECT also found:
• 42 percent of Americans think bigger down payments in recent years could have prevented some of the current economic downturn.
• 37 percent would consider making mortgage payments twice a month to pay off their homes faster.
Rates back at six-week lows
Finally, benchmark 30-year fixed mortgage rates have returned to six-week lows. Average rates early this week fell to 5.20 percent (before points), said federal mortgage giant Freddie Mac in its weekly Thursday survey. That's down from 5.32 percent last week.
The firm said rates haven't been this low since the week of May 28, when they averaged 4.91 percent across the U.S. Freddie Mac economists attributed the continuing decline to "market concerns over a weakening labor market."
Personal finance Web site Bankrate.com reported overnight averages Thursday of 5.33 percent for 30-year loans.
By Jim Wasserman jwasserman@sacbee.com
http://www.sacbee.com/business/story/2014910.html
This week the Sacramento County Assessor's Office – and more like it across the great foreclosure belts of California – chopped property values again on nearly everything built in the housing boom.
The value slashing in Sacramento County that started in 2007 with 50,000 properties and 90,000 last year, reached 170,000 in 2009. That's nearly every lot carved from a pasture and turned into a new house since 2002 – or even earlier depending on where you live.
The good news: Your property taxes go down. The bad news: Well, don't even look.
Home Front caught up Thursday with Assistant Sacramento County Assessor Kathleen Kelleher for a few questions about the new values.
Your office reduced values for tax purposes on 170,000 properties. How many of those are houses?
Basically all of them. There are about 500 commercial properties. The rest are residential.
How's this actually done?
We use what we call sales-ratio trend analysis. It's a development of time-adjusted facts based on market sales. It is largely a computer analysis. We have a staff of 60 or 70 appraisers right now. We wouldn't be able to value 170,000 properties (personally) plus do our other work.
People often go to Zillow.com or Cyberhomes.com to look up their home values. Where does the county's assessed value fit into the question of, "What is my house worth?" Would real estate agents use your number to assign the house a value when listing it?
I really can't answer for them, but I doubt it. They'll probably go to their own analysis of what the market is doing.
Do people appeal these low values, arguing their house can't be worth so little?
I don't think anyone has gone to an appeal hearing on that.
This is the first time since 1978 that assessed values have gone negative from one year to the next. You've been in the office 22 years. Did you ever expect to see anything like this?
No.
Is this year the worst of it?
I really don't have a great answer for you on that one.
Banks try loan alternative
Fresh news on loan modifications: Nonprofit loan counselors say they're seeing more banks try an alternative to writing down principal. That's the industry term for permanently reducing what homeowners owe. Borrowers love it; banks don't.
Pam Canada, executive director of Neighborworks Homeownership Center of Sacramento, said this week some banks are agreeing to temporarily cut the amount owed.
Here's how it works: If a borrower paid $300,000 for a house that's now worth $200,000, that borrower can get the loan modified temporarily to make payments based on the $200,000 value. Then the other $100,000 is deferred – added back onto the loan five years from now, or when housing values rebound. A borrower might pay off that $100,000 after refinancing or selling. Canada said it's an emerging short-term fix that keeps people in homes and keeps banks from having to forgive so much of what's owed them.
Poll: Own home still dream
Survey of the week: 67 percent of Americans believe owning a house is still the "aspirational symbol" of the American dream.
So says a Harris Interactive survey of 2,122 adults – 71 percent of them homeowners. The May national online survey conducted for Delaware-based savings bank ING DIRECT also found:
• 42 percent of Americans think bigger down payments in recent years could have prevented some of the current economic downturn.
• 37 percent would consider making mortgage payments twice a month to pay off their homes faster.
Rates back at six-week lows
Finally, benchmark 30-year fixed mortgage rates have returned to six-week lows. Average rates early this week fell to 5.20 percent (before points), said federal mortgage giant Freddie Mac in its weekly Thursday survey. That's down from 5.32 percent last week.
The firm said rates haven't been this low since the week of May 28, when they averaged 4.91 percent across the U.S. Freddie Mac economists attributed the continuing decline to "market concerns over a weakening labor market."
Personal finance Web site Bankrate.com reported overnight averages Thursday of 5.33 percent for 30-year loans.
Wednesday, July 8, 2009
Monday, July 6, 2009
Repo business soars as Sacramento area home sales slump
Repo business soars as Sacramento area home sales slump
By Jim Wasserman jwasserman@sacbee.com
http://www.sacbee.com/topstories/story/2002300.html
At the beginning, Alejandro Maybuena lost the Sacramento house he bought in April 2005 for $350,000. At the end, in early 2009, Kim Gish bought it for $109,000.
Stories like this have happened more than 40,000 times in the Sacramento area. Still, the tale in particular of one house in California's capital region shows the sweeping change in a real estate industry that once involved mainly a mom-and-pop seller, a buyer and two real estate agents.
Today, an alternate universe – the repo business – dominates. And business is very good.
As the U.S. foreclosure crisis grinds on, the detailed work of processing, repairing and selling thousands of homes repossessed by banks is real estate's new gold. In the past year, repo-related business has rapidly grown to national scale, fueling job growth in Colorado, Texas, Ohio and elsewhere to service the meltdown in markets like Sacramento and the Central Valley along with Phoenix, Las Vegas and Florida.
The nation's housing collapse also has upended the pecking order of local real estate agents. Former top earners are on the sidelines, unable to move expensive homes. The new royalty is making good money in a real estate economy where things fall apart, where trackers can count almost a half-million repos on the U.S. market.
"From an industry standpoint, everybody who participates has seen an uptick in their business," said Paul Carlson, senior vice president of human resources at Austin-based Field Asset Services.
Carlson's firm, which repairs, cleans and maintains repos right down to mowing the lawns weekly, has almost tripled its hiring in the past 18 months. Austin business publications gush over the firm's "hiring spree," its 550 employees and third expansion into larger offices in a year.
Clearly, the housing distress that has overwhelmed states like California has become big business. Yet, it always starts small, one house at a time.
For Alejandro Maybuena, 60, and his wife, a three-bedroom house near Sacramento's southern edge in 2005 represented a long-delayed accomplishment – their first house.
It wasn't easy buying then, not in that last roaring spring of the housing boom. Maybuena, a custodian for the city of Davis, said the house was the eighth they bid on as frantic buyers competed to get in before prices rose higher.
"My agent said I should offer another $10,000. All I could think of was how many more months I'd have to work to pay that off," he said.
But he made the $350,000 offer with the assumption, then so widespread, that prices would keep rising.
Instead, values crashed. The rest is the same old story: inability to refinance, get a loan modification or rationalize making $2,500 interest-only monthly payments on a house no longer worth the price paid.
"It was a dream for us," Maybuena said recently, standing in the doorway of an Elk Grove house he rents for $800 a month. "But, unfortunately, our dream was ruined."
After foreclosing, Texas-based American Home Servicing Inc. – which services 575,000 loans nationally – started the repo clock ticking. It assigned the house to Bruce Slaton, a Keller Williams real estate agent in Elk Grove. Slaton specializes in REO sales, shorthand for "real estate owned," the industry term for bank repos.
In a normal real estate market, Slaton might get listings from open houses or word of mouth. Now he gets them directly from banks or asset management companies hired by banks to sell their houses.
In this case, he got an e-mail from American Home Servicing, which has an in-house asset management division. There, he's a known commodity.
"I got into bank stuff about 2000," said Slaton. "When the market changed (toward distress), I was in the system."
Also in that system are the national corporate giants and smaller regional players that have long helped lenders manage and sell repos that come in good markets and bad. Business has soared. Slaton said banks outsource up to 80 percent of foreclosed properties to third parties to handle.
By Jim Wasserman jwasserman@sacbee.com
http://www.sacbee.com/topstories/story/2002300.html
At the beginning, Alejandro Maybuena lost the Sacramento house he bought in April 2005 for $350,000. At the end, in early 2009, Kim Gish bought it for $109,000.
Stories like this have happened more than 40,000 times in the Sacramento area. Still, the tale in particular of one house in California's capital region shows the sweeping change in a real estate industry that once involved mainly a mom-and-pop seller, a buyer and two real estate agents.
Today, an alternate universe – the repo business – dominates. And business is very good.
As the U.S. foreclosure crisis grinds on, the detailed work of processing, repairing and selling thousands of homes repossessed by banks is real estate's new gold. In the past year, repo-related business has rapidly grown to national scale, fueling job growth in Colorado, Texas, Ohio and elsewhere to service the meltdown in markets like Sacramento and the Central Valley along with Phoenix, Las Vegas and Florida.
The nation's housing collapse also has upended the pecking order of local real estate agents. Former top earners are on the sidelines, unable to move expensive homes. The new royalty is making good money in a real estate economy where things fall apart, where trackers can count almost a half-million repos on the U.S. market.
"From an industry standpoint, everybody who participates has seen an uptick in their business," said Paul Carlson, senior vice president of human resources at Austin-based Field Asset Services.
Carlson's firm, which repairs, cleans and maintains repos right down to mowing the lawns weekly, has almost tripled its hiring in the past 18 months. Austin business publications gush over the firm's "hiring spree," its 550 employees and third expansion into larger offices in a year.
Clearly, the housing distress that has overwhelmed states like California has become big business. Yet, it always starts small, one house at a time.
For Alejandro Maybuena, 60, and his wife, a three-bedroom house near Sacramento's southern edge in 2005 represented a long-delayed accomplishment – their first house.
It wasn't easy buying then, not in that last roaring spring of the housing boom. Maybuena, a custodian for the city of Davis, said the house was the eighth they bid on as frantic buyers competed to get in before prices rose higher.
"My agent said I should offer another $10,000. All I could think of was how many more months I'd have to work to pay that off," he said.
But he made the $350,000 offer with the assumption, then so widespread, that prices would keep rising.
Instead, values crashed. The rest is the same old story: inability to refinance, get a loan modification or rationalize making $2,500 interest-only monthly payments on a house no longer worth the price paid.
"It was a dream for us," Maybuena said recently, standing in the doorway of an Elk Grove house he rents for $800 a month. "But, unfortunately, our dream was ruined."
After foreclosing, Texas-based American Home Servicing Inc. – which services 575,000 loans nationally – started the repo clock ticking. It assigned the house to Bruce Slaton, a Keller Williams real estate agent in Elk Grove. Slaton specializes in REO sales, shorthand for "real estate owned," the industry term for bank repos.
In a normal real estate market, Slaton might get listings from open houses or word of mouth. Now he gets them directly from banks or asset management companies hired by banks to sell their houses.
In this case, he got an e-mail from American Home Servicing, which has an in-house asset management division. There, he's a known commodity.
"I got into bank stuff about 2000," said Slaton. "When the market changed (toward distress), I was in the system."
Also in that system are the national corporate giants and smaller regional players that have long helped lenders manage and sell repos that come in good markets and bad. Business has soared. Slaton said banks outsource up to 80 percent of foreclosed properties to third parties to handle.
Sunday, July 5, 2009
Small banks start feeling financial stress
Small banks start feeling financial stress
By Charles Piller cpiller@sacbee.com
http://www.sacbee.com/topstories/story/2000836.html
At first, the Sacramento region's small, business-oriented community banks appeared to have sidestepped the plight of banking titans that staggered under the burden of home mortgage defaults. Now some are showing signs of stress.
Gold Country Bank in Marysville has become the weakest bank of its size in California – below 98 percent of similar banks nationwide, according to Bankrate.com, a leading independent evaluator. It took the place of MetroPacific on June 26, when that Irvine Bank was seized by regulators.
Granite Community Bank in Granite Bay has similar problems, according to data from analysts and the Federal Deposit Insurance Corp.
Nationally, one in five banks lost money in the first quarter of this year. But among this region's 15 small community banks, two of every five lost money, including Gold Country and Granite Community.
Those and many other small banks rely more heavily on a combination of construction, industrial and commercial real estate loans than on home mortgages and securities. Initially, most coped with the economic collapse.
Not long after the residential mortgage meltdown, construction lending followed the same downward slope. Experts believe commercial mortgages and industrial loans – sensitive to high unemployment and low consumer confidence – are following a similar path.
The impact on banks holding many of those loans could be dire. When banks fail, federal insurance protects deposits up to $250,000 in most cases, but not shareholders' investments. Local businesses reliant on community banks for credit also could suffer.
Representatives of Gold Country and Granite Community said that despite the challenging economy, they are prepared for any eventuality.
"Everyone in this region is experiencing the same things," including falling demand for loans and sharply declining property values, said David R. Kaiser, president of Granite Community. "I don't think I have any more concerns than my counterparts."
But commercial real estate loans – on which many local banks deeply depend – were recently described by Rep. Carolyn Maloney, D-N.Y., chairwoman of the congressional Joint Economic Committee, as "a ticking time bomb" for massive default problems later this year.
Local challenges
In Yuba County, home of Gold Country Bank, the process already is unfolding.
"There's a ton of empty commercial space; somebody has got to be making payments on those," said Steve Brammer, chief operating officer of the Yuba-Sutter Economic Development Corp., a public lending agency. "It's hard to do that without tenants."
Lease rates for prime commercial space in Yuba County recently have fallen as much as 40 percent, Brammer said.
"We are starting to see some commercial loans going south," said Brent Bosanek, owner of the Coldwell Banker Commercial property brokerage in Yuba City, and a former area commercial banker.
"For commercial lending, it's all about the cash flow," which declines as leases are renegotiated downward, he said. Lenders from outside the region have contacted his firm to appraise commercial properties, anticipating steep declines in value.
Bosanek added: "Banks are worried."
Tarra Victorino, Gold Country's chief financial officer, said the commercial property threat was on her bank's radar, but that she was "not comfortable" quantifying the possible impact on its business.
"All banks are concerned if the commercial real estate sector suffers the problems that are predicted," she said.
Several local banks also had far higher rates of commercial and industrial lending than similar banks. Such loans often go bad quickly in a recession, said Foresight Analytics partner Matthew Anderson. "They are even riskier than real estate lending."
Like some of the other banks, Gold Country also has relatively high levels of restructured loans. This means terms have been changed before the loan comes due.
Troubled banks tend to use the practice, which is legal, to avoid designating loans as delinquent or to forestall foreclosures – delaying bad news from reaching their balance sheets.
By Charles Piller cpiller@sacbee.com
http://www.sacbee.com/topstories/story/2000836.html
At first, the Sacramento region's small, business-oriented community banks appeared to have sidestepped the plight of banking titans that staggered under the burden of home mortgage defaults. Now some are showing signs of stress.
Gold Country Bank in Marysville has become the weakest bank of its size in California – below 98 percent of similar banks nationwide, according to Bankrate.com, a leading independent evaluator. It took the place of MetroPacific on June 26, when that Irvine Bank was seized by regulators.
Granite Community Bank in Granite Bay has similar problems, according to data from analysts and the Federal Deposit Insurance Corp.
Nationally, one in five banks lost money in the first quarter of this year. But among this region's 15 small community banks, two of every five lost money, including Gold Country and Granite Community.
Those and many other small banks rely more heavily on a combination of construction, industrial and commercial real estate loans than on home mortgages and securities. Initially, most coped with the economic collapse.
Not long after the residential mortgage meltdown, construction lending followed the same downward slope. Experts believe commercial mortgages and industrial loans – sensitive to high unemployment and low consumer confidence – are following a similar path.
The impact on banks holding many of those loans could be dire. When banks fail, federal insurance protects deposits up to $250,000 in most cases, but not shareholders' investments. Local businesses reliant on community banks for credit also could suffer.
Representatives of Gold Country and Granite Community said that despite the challenging economy, they are prepared for any eventuality.
"Everyone in this region is experiencing the same things," including falling demand for loans and sharply declining property values, said David R. Kaiser, president of Granite Community. "I don't think I have any more concerns than my counterparts."
But commercial real estate loans – on which many local banks deeply depend – were recently described by Rep. Carolyn Maloney, D-N.Y., chairwoman of the congressional Joint Economic Committee, as "a ticking time bomb" for massive default problems later this year.
Local challenges
In Yuba County, home of Gold Country Bank, the process already is unfolding.
"There's a ton of empty commercial space; somebody has got to be making payments on those," said Steve Brammer, chief operating officer of the Yuba-Sutter Economic Development Corp., a public lending agency. "It's hard to do that without tenants."
Lease rates for prime commercial space in Yuba County recently have fallen as much as 40 percent, Brammer said.
"We are starting to see some commercial loans going south," said Brent Bosanek, owner of the Coldwell Banker Commercial property brokerage in Yuba City, and a former area commercial banker.
"For commercial lending, it's all about the cash flow," which declines as leases are renegotiated downward, he said. Lenders from outside the region have contacted his firm to appraise commercial properties, anticipating steep declines in value.
Bosanek added: "Banks are worried."
Tarra Victorino, Gold Country's chief financial officer, said the commercial property threat was on her bank's radar, but that she was "not comfortable" quantifying the possible impact on its business.
"All banks are concerned if the commercial real estate sector suffers the problems that are predicted," she said.
Several local banks also had far higher rates of commercial and industrial lending than similar banks. Such loans often go bad quickly in a recession, said Foresight Analytics partner Matthew Anderson. "They are even riskier than real estate lending."
Like some of the other banks, Gold Country also has relatively high levels of restructured loans. This means terms have been changed before the loan comes due.
Troubled banks tend to use the practice, which is legal, to avoid designating loans as delinquent or to forestall foreclosures – delaying bad news from reaching their balance sheets.
Wednesday, July 1, 2009
Home Affordable refi program expanded
Home Affordable refi program expanded
Loan-to-value ceiling raised from 105% to 125%By Inman News, Wednesday, July 1, 2009.
http://www.inman.com/news/2009/07/1/home-affordable-refi-program-expanded
Inman News
Homeowners who are up to 125 percent underwater will be allowed to refinance under the Obama administration's Home Affordable Refinance Program if they are current on their payments and their loan is owned or guaranteed by Fannie Mae or Freddie Mac.
The federal regulator overseeing Fannie and Freddie has boosted the program's loan-to-value (LTV) ceiling from 105 percent to 125 percent to allow more homeowners to take advantage of lower mortgage rates.
Fannie and Freddie will also offer pricing incentives to encourage borrowers with LTVs above 105 percent to refinance into 20- or 25-year loans to pay down principal more quickly and reduce lifetime interest payments, the Federal Housing Finance Agency said.
When the Home Affordable Refinance Program was announced in February, the Obama administration said it hoped that as many as 4 million homeowners will be able to refinance under the program.
But some critics said the program wouldn't help borrowers whose loans aren't backed by Fannie and Freddie, and that the 105 percent LTV ceiling would exclude many who are deeper underwater because of steep home-price declines (see story).
The Mortgage Bankers Association last month revised downward its forecast for 2009 loan originations by $700 billion, citing rising interest rates and the slow pace of Home Affordable refinancings -- about 13,000, the group said (see story).
In announcing the increased 125 percent LTV ceiling today in Las Vegas, Housing Secretary Shaun Donovan said nearly seven in 10 of homeowners with mortgages in the city owe more than their homes are worth.
Donovan said "tens of thousands" of refinancings and trial loan modifications are under way. Under the parallel Home Affordable Loan Modification Program, 200,000 borrowers have received offers for trial loan modifications, Donovan said. That program, which provides incentives to loan servicers and borrowers for loan modifications, is intended to help up to 4 million borrowers.
In broadening the Home Affordable Refinance Program, the Obama administration could end up going beyond its original stated goal of helping "responsible" homeowners -- those who purchased a home with a down payment, only to see their equity shrink or disappear as home values fell.
A 20 percent down payment equates to an original LTV of about 80 percent; a home purchased with no down payment would have an LTV of about 100 percent.
A homeowner who made a 20 percent down payment on a $200,000 home would have had a $160,000 mortgage. Excluding any reduction in principal since purchase, the value of their home would have had to decline by 36 percent, to $128,000, for their LTV to grow to 125 percent.
Loan-to-value ceiling raised from 105% to 125%By Inman News, Wednesday, July 1, 2009.
http://www.inman.com/news/2009/07/1/home-affordable-refi-program-expanded
Inman News
Homeowners who are up to 125 percent underwater will be allowed to refinance under the Obama administration's Home Affordable Refinance Program if they are current on their payments and their loan is owned or guaranteed by Fannie Mae or Freddie Mac.
The federal regulator overseeing Fannie and Freddie has boosted the program's loan-to-value (LTV) ceiling from 105 percent to 125 percent to allow more homeowners to take advantage of lower mortgage rates.
Fannie and Freddie will also offer pricing incentives to encourage borrowers with LTVs above 105 percent to refinance into 20- or 25-year loans to pay down principal more quickly and reduce lifetime interest payments, the Federal Housing Finance Agency said.
When the Home Affordable Refinance Program was announced in February, the Obama administration said it hoped that as many as 4 million homeowners will be able to refinance under the program.
But some critics said the program wouldn't help borrowers whose loans aren't backed by Fannie and Freddie, and that the 105 percent LTV ceiling would exclude many who are deeper underwater because of steep home-price declines (see story).
The Mortgage Bankers Association last month revised downward its forecast for 2009 loan originations by $700 billion, citing rising interest rates and the slow pace of Home Affordable refinancings -- about 13,000, the group said (see story).
In announcing the increased 125 percent LTV ceiling today in Las Vegas, Housing Secretary Shaun Donovan said nearly seven in 10 of homeowners with mortgages in the city owe more than their homes are worth.
Donovan said "tens of thousands" of refinancings and trial loan modifications are under way. Under the parallel Home Affordable Loan Modification Program, 200,000 borrowers have received offers for trial loan modifications, Donovan said. That program, which provides incentives to loan servicers and borrowers for loan modifications, is intended to help up to 4 million borrowers.
In broadening the Home Affordable Refinance Program, the Obama administration could end up going beyond its original stated goal of helping "responsible" homeowners -- those who purchased a home with a down payment, only to see their equity shrink or disappear as home values fell.
A 20 percent down payment equates to an original LTV of about 80 percent; a home purchased with no down payment would have an LTV of about 100 percent.
A homeowner who made a 20 percent down payment on a $200,000 home would have had a $160,000 mortgage. Excluding any reduction in principal since purchase, the value of their home would have had to decline by 36 percent, to $128,000, for their LTV to grow to 125 percent.
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