Coming into 2011 there were many obstacles to foreclosres. We had mortoriums, Robo-signers and government pressure to ease on foreclosing homes. In 2011, that will be different. Lenders are working on improving their short sale approval process.
I recently met with executives from Wells Fargo, Bank of American and Chase. They all had the same message:
1. Banks prefer Short Sales over Foreclosure, they net more money on average from a Short Sale.
2. Banks have improved their procedures to approve a short sale and when they have the delegated power from investors, they can approve in 45 days or less. If an investor is involved, they are bound by the investors process.
3. They will no longer give extensions to Short Sellers unless there is a clear transaction rady to close escrow. This will increase foreclosures, but get the glut of homes off the market.
4. Have a Hardship, get an approval with no Recourse. We are getting approvals left and right. I just got one for a home seller in Aviano at Desert Ridge. Both mortgages approved with no recourse!
I read this article from MSNBC, yes foreclosures are increasing, but this is needed to get the market to improve. About 5 million borrowers are at least 2 months behind on their mortgages and because of the recession going on in our economy, there are more Short Sellers on the horizon. As a matter of fact, the people contacting me now for short sale, in most cases are not currently behind or only a month or two in deliquency. I was out showing homes yesterday, I was shocked that less 1/3 of the Short Sales I reviewed to show were even in foreclosure.
We have a way to go before Short Sales and Foreclosures go away, but they can be there in an improving market. Now we need to focus on Supply and Demand. My inventory of homes for sale got crushed this last month, we sold 10 homes. Inventory of single family homes dropped about 9% from the first of the year to March 1st and then another 4% in the first 10 days of March. These are good signs.
” 2011 is going to be the peak” mentioned by Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc. Imagine that there is a prediction that 1.2 million homes will be repossessed this year by lenders.
You can read more about this from MSNBC article I got and I am telling you this is a catastrophe that needs proactive assistance. After you have read it, tell me if you are going to let the bank get your house or you want assistance in finding ways that you are going to make a profit while out of this crisis.
NEW YORK — The bleakest year in foreclosure crisis has only just begun.
Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and more will miss payments as they struggle with job losses and loans worth more than their home’s value, industry analysts forecast.
“2011 is going to be the peak,” said Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc. The firm predicts 1.2 million homes will be repossessed this year by lenders.
The outlook comes after banks repossessed more than 1 million homes in 2010, RealtyTrac said Thursday. That marked the highest annual tally of properties lost to foreclosure on records dating back to 2005.
One in 45 U.S. households received a foreclosure filing last year, or a record high of 2.9 million homes. That’s up 1.67 percent from 2009.
On Thursday, Freddie Mac reported that fixed mortgage rates dipped this week for the second straight time, extending a sliver of hope for some home owners.
The average rate on the 30-year mortgage dropped to 4.71 percent from 4.77 percent the previous week. The rate on the 15-year loan, a popular refinance choice, slipped to 4.08 percent from 4.13 percent. But both are a half-point higher than the lows they reached in November.
The dip has led more borrowers to apply for a refinance, but would-be buyers remain hesitant, according to Wednesday’s mortgage indexes from the Mortgage Bankers Association. It will take more than low mortgage rates to jumpstart a housing market plagued by high unemployment, falling prices, tighter credit standards.
The glut of foreclosures has compounded the problem and while the pace moderated in the final months of 2010, that isn’t expected to last.
The number of homes that received at least one foreclosure-related filing in December was the lowest monthly total in 30 months. Total notices fell 1.8 percent from November and 26.3 percent from December 2009, RealtyTrac said.
The pace slowed in the final two months of 2010 as banks reviewed their foreclosure processes after allegations surfaced in September that evictions were handled improperly. Under increased scrutiny by the government, lenders temporarily halted taking actions against borrowers severely behind on their payments.
However, most banks have since resumed their eviction processes, and the first quarter will likely show a rebound in foreclosure activity, RealtyTrac’s Sharga said.
Foreclosures are expected to remain elevated through the year as homeowners contend with stubbornly high unemployment, tougher credit standards for refinancing and falling home values. Sharga said he expects prices to dip another 5 percent nationally before finally bottoming out. The decline will push more borrowers underwater on their mortgages. Already, about one in five homeowners with a mortgage owe more than their home is worth.
The pain likely will be the most acute in states that have already been hit hard. That includes former housing boom states Nevada, Arizona, Florida and California, along with states that are suffering most from the economic downturn, including Michigan and Illinois.
Nevada posted the highest foreclosure rate in 2010 for the fourth straight year, despite a 5 percent decline in activity from the year before. One in every 11 households received a foreclosure filing last year in the state. In December, foreclosure activity increased 18 percent from November with a 71 percent spike in bank repossessions.
Arizona and California also showed sharp December increases in the number of homes banks took back, at 52 percent and 47 percent, respectively. Arizona, along with Florida, finished the year at No. 2 and No. 3 for the highest foreclosure rates.
One in every 17 Arizona households got a foreclosure filing last year, while one in 18 received a notice in Florida.
California, Utah, Georgia, Michigan, Idaho, Illinois and Colorado rounded out the top ten states with the highest foreclosure rates.
More than half of the country’s foreclosure activity came out of five states in 2010: California, Florida, Arizona, Illinois and Michigan. Together, these states recorded almost 1.5 million households receiving a filing, despite year-over-year decreases in California, Florida and Arizona.
RealtyTrac tracks notices for defaults, scheduled home auctions and home repossessions — warnings that can lead up to a home eventually being lost to foreclosure.
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