In case you missed it, last month via our friends Angela & Howard’s radio show, “Real Estate Radio,” – our Operations Manager Patricia Raulerson and I had the opportunity to talk for a full hour about what Title Insureance and the role of a Title Company is.
You can catch the full archived show here.
Posted in Distressed Property, Title Insurance, Watson Realty Corp.
Tagged Marketing, Radio, Short Sales, Title Insurance
Our friend Kevin over at Old Republic Title sent along the following facts. If you’re looking for facts on the market, plenty of things to chew on here.
The average price in October 2011 is down 3.5% from October 2010. The 12 month average price for the most recent 12 months is $170,804 compared to $169,103 for the previous 12 months which is a 1% increase.
The final two stats I will mention are the months supply of inventory is at 7.7 months in October 2011 compared to 11.6 months in October 2010. It is also down from 8.2 months in September 2011. A normal market is 5 to 6 months of inventory. The share of closings in October 2011 that were lender mediated is at 45.7% which is down from the peak of 60% in January 2011.
Posted in Distressed Property, Jacksonville
The Homeowners Assistance Program (HAP) is a very complicated program to help servicemembers who find themselves underwater in homes they need to sell due to being transferred. One of the programs inside HAP is the Government Acquisistion and Resale program. Following the bouncing ball is hard to do even for a pro, but I found this overview helpful to those looking to better understand that part of the process.
Government Acquisition and Resale Basic Steps
• Specialist receives Applicant file, makes initial contact with the Applicant
• Applicant responds to Specialist providing any information that has been requested
• Specialist reviews Applicant file, to verify all necessary documents are provided
• Specialist makes contact with Realtor and any other necessary parties and requests any additional information needed
• Funding to purchase the property is requested, reviewed, and approved
• Offer Letter is sent to Applicant
• Applicant Returns signed Offer Letter
• Specialist orders title work and closing documents
• Specialist writes a new sales agreement between the Buyer and the U.S. Government (this can only be done within 30 days of the actual closing date)
• New sales agreement is reviewed, approved, and emailed to Listing and Selling Real Estate agents
• Specialist receives signed sales agreement and then submits it for execution signature
• Executed contract is emailed to agents, lender, attorney, and applicant
• Specialist receives title work and closing documents from the HAP title company
• The title work and closing documents are reviewed and approved
• Mortgage payoff(s) are ordered by the Specialist
• Closing documents are written, reviewed and approved
• Approved closing documents are emailed to the Applicant (at this time the Specialist will provide the exact amount of certified funds that Applicant will be responsible to provide)
• Applicant reviews, signs, has notarized, and over nights these documents with the requested certified funds to the Specialist
• Specialist receives documents and certified funds
• Applicants has completed all steps necessary to close on the property, Applicant will not attend the closing between the U.S. and the Buyer
• Buyers closing attorney submits the final HUD to the Specialist for review and approval
• Approved HUD and conveyance deed is signed by the Chief of Real Estate
• Signed HUD and conveyance deed are sent to the closing attorney
• Buyer closes on the property with their attorney
• Specialist over nights payoff funds to the Applicants mortgage company(s)
• Applicants property has now been Acquired and Resold
Please note: This is only an overview of the Acquisition Program. It is intended to be used as an explanation tool only.
Optimism is a great thing. This is an outstanding time to be in real estate, and for many people this is a time of opportunity and promise as they look to move up or simply to become a homeowner for the first time. I say it every day, and I mean it.
You also have to acknowledge that this is a very challenging time for many. For those who bought or re-financed their home 3-5 years ago and need to move, or are being hit hard by the economy of the last few years – the real estate market is something that gives them concern and worry.
Because of that, I think it is the responsible thing to do make sure that you temper your enthusiasm and stick to the facts as they exist and to provide a full picture of the market so people can make an informed decision.
In the above-the-fold in the Money Section of the Times Union on 27 MAY, Kevin Turner had an article “Foreclosure sales for area plunge” if not read carefully may lead some to a false view of this market.
Foreclosure sales in the Jacksonville metropolitan area during the first quarter of this year dropped by more than 43 percent from the first quarter of 2010 and by nearly 21 percent from last year’s fourth quarter, according to data released Thursday.
Read critically though – note the bold (my emphasis).
The results could be an anomaly because many loan services froze foreclosure actions last fall, some foreclosure specialists have speculated. But most of those freezes have since been lifted.
It also could mean that foreclosures are selling so briskly, the supply is beginning to dry up,
“Could” is not “is” or “will.” Closer to “may” and “I’m guessing here….”
Over the last 12 months, lender-mediated sales have been over 60% of the market in areas as diverse as Dinsmore/Northwest Duval to Fleming Island-NE. In places as desirable as San Marco and Avondale they were in the mid-30s. Ortega is the best at just a little over 19%.
There is still much work to do as some areas have improved in the last few months – while others have gotten worse and still more – like Ortega – remain roughly the same.
In general, when looking at market statistics, due to seasonality and external market factors (incentives, legal issues etc) try not to look at too narrow of a set of data. One month, or one quarter for that matter, does not a market make. Even comparing one quarter year-over-year can be a problem.
Additionally, it is best when looking at the distressed property market to not just focus on one part of it, like foreclosures/REO. There are other parts of that market that includes short-sales/pre-forclosures. If you want to get an understanding of where the directions of distressed properties is taking the market, you need to include all parts of the distressed property market – and look at a broader time scale.
Those who invest in stocks, commodies and other instruments, understand the concepts of trend-lines and “higher-highs & higher-lows vs lower-highs and lower-lows” and how they help you spot a change in market direction. You have to look medium & long term, not short term.
See the graph below of closed sales that are lender-mediated. If you draw a line from the low at the end of 2008 to the low now, and then draw another line from the high at the end of 2008 to the high in FEB of this year – there you have your “market channel.” What you need to do is watch where the market goes inside that channel.
To really be able to say that we have seen a turn in the lender-mediated part of the market, then we need to see the lender-mediated percentage break the lower part of that channel and stay below it for a sustained period. If after it falls below it, then increases again to touch the line but does not break through it for a sustained period and falls again – and then I think people could comfortabley say something significant has changed, and should say, “We may have seen a change in direction in the market starting about six-months ago. Markets can change, but for now it seems ….. ”
After this Fall, we have seen some indications of a market trying to get its feet – but at this stage of the game I would offer to everyone to practice “cautious optimism.” It is your money and your property – fact based, serious decisions are what you need.
We will need more time to “digest” the lender-mediated part of the market, and until we do, as you can see below – we will need more time to see price, what concerns people the most, find a soft landing.
I’ll leave you with the summary from NEFAR for the month of April, the last month we have data for.
The final month of year-over-year comparison to last year’s tax incentive market is upon us. It bears repeating that April 2010 enjoyed uniquely strong activity due to the approaching credit deadline. Let’s see how this pivotal month played out locally.
New Listings in the Northeast Florida region decreased 34.6 percent to 2,314. Pending Sales were down 13.2 percent to 1,642. Inventory levels shrank 23.8 percent to 12,415 units – a positive trend that should preserve market balance. Prices were still soft. The Median Sales Price declined 8.1 percent to $125,000. Days on Market increased 18.0 percent to 123 days. The supply-demand balance improved as Months Supply of Inventory was down 26.2 percent to 8.9 months.
Nationally, the interest rate is 5.0 percent on a 30-year fixed conventional and the unemployment rate edged up to 9.0 percent in April, even as the economy added 244,000 jobs. Job seekers showed more confidence, a potential indicator of future housing demand. Moving forward, expect a different story to unfold in our market. We’ll soon be comparing current activity to a post-credit slump that occurred during the summer and fall of 2010.
Well, it looks like Congress is thinking about it.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) became law on July 21, 2010. Section 941 of the Dodd-Frank Act requires financial institutions that securitize mortgages loans to retain at least 5 percent of the credit risk.
The Dodd-Frank Act, however, exempts from the risk-retention requirement securities backed exclusively by “qualified residential mortgages,” or QRMs—mortgages with underwriting and product features that historical loan performance data indicate result in a lower risk of default. By exempting QRMs from the risk-retention requirement, the cost of securitizing these mortgages is reduced, thus providing a market incentive for the wide origination of responsible loans.
Highlights of the Proposed QRM Standards
- The proposed QRM rule would require an 80% LTV, which requires a 20% down payment.
- The proposed rule would also limit the mortgage payment to 28% of gross income and limit all debt to 36%.
- No credit score requirement is included, but a mortgage loan would qualify as a QRM only if the borrower is not currently 30 or more days past due on any debt obligation.
- Borrowers could not have been 60 or more days past due on any debt obligation within the preceding 24 months.
- Borrowers could not have, within the preceding 36 months, been through bankruptcy, been foreclosed on, engaged in a short sale or deed-in-lieu of foreclosure, or been subject to a Federal or State judgment for collection of any unpaid debt.
The QRM definition is of extraordinary importance for three reasons:
1. It will determine the types of mortgages that will be generally available for borrowers for the foreseeable future.
2. It will serve as a precursor for what the successor(s) to the current GSEs (Fannie Mae and Freddie Mac) are likely to be allowed to securitize.
3. Finally, the QRM proposal will telegraph the administration’s intentions for FHA. A narrow QRM will require severe tightening of FHA to prevent huge increases in FHA’s already robust market share.
What that means simply is that it will be harder for people to be able to buy homes. That will decrease demand for homes which will depress prices even further.
That in turn will put more people “underwater” in their mortgage. Bad for buyers; bad for homeowners.
Posted in Buying, Distressed Property, Politics, Selling
In a handy one page advisory, the Northeast Florida Association of Realtors outlines some “Red Flags” that anyone thinking of putting the home on the market as a “Short Sale” need to keep in mind,
“Red Flags” of fraudulent schemes include:
– Guarantees to stop the foreclosure.
– Large upfront fees.
– Instructions not to contact the lender.
– Transfer of title or lease of the property.
– The proposed buyer is a LLC, land trust or other entity.
– Requests that the homeowner execute a power of attorney.
– The proposed buyer, at the buyer’s sole expense, retains a third party to negotiate the short sale for the seller’s benefit.
Always be careful, and always work with a licensed real estate professional. Also remember, if you every have tax or legal questions, consult with a tax or legal professional.
There is no reason to feel like you are alone or in an unusual situation if you find yourself underwater on your mortgage. You have a lot of company.
Nearly half of homes with mortgages in Jacksonville were underwater at the end of 2010 – 47 percent – primarily because their values have sunk below the amount their owners owe on their mortgages.
According to real estate data aggregator CoreLogic, an additional 4.8 percent of all mortgaged Jacksonville homes were in “near negative equity” status, or owed the same or nearly as much as their homes were worth. Combined, 51.8 percent of Jacksonville homes are underwater or nearly so, according to a report Tuesday by CoreLogic.
Part of what I do is to help people who are underwater find the best way to sell their home and move on, or if they are having trouble making their payments – get out from under their mortgage before foreclosure becomes a possibility.
I have a trifold that outlines some options. You can read it online or download it here.
Posted in Distressed Property, Economics, Mortgages
Each foreclosure story is different and some truly are beyond the control of homeowners. Other times people find themselves in a position where they made a bad decision.
Last weekend in the Times Union, we had a perfect example of this.
When Lillian Thomas moved into the house her mother left her, it wasn’t in good shape.
“I had let my son live there, and he let other people live there,” she said. “The window was broken, the sheet rock was down.”
But Thomas, 72, a widow and a retired cosmetologist, didn’t have the money to fix the small home in Northwest Jacksonville’s Sherwood Forest neighborhood. Then she got a pamphlet in the mail from Ameriquest Mortgage offering her a loan. It was a huge company back in 2005. She’d already seen its ads on television, and its blimp floating over Jacksonville’s Super Bowl.
So she gave them a call.
Thomas ended up with a $61,000 loan and a mortgage on her house. At closing, $14,600 was disbursed to pay off her other debts and $5,742 went for loan-related fees, leaving Thomas with $40,973. Her mortgage payments started off at $527 a month but quickly went to more than $1,000. Given that her income was only $530 a month from Social Security, she didn’t make that payment for very long.
“I was scuffling hard,” she said. “I paid for two months, but then I couldn’t beg or borrow anymore, and I didn’t want to steal.”
She quit making her payments. Now Thomas is one of thousands of Floridians being foreclosed on.
Debt management and an understanding of the motivation of those you are working with are critical in any decision you make. The market is a very impersonal thing at time. Though you may have a compelling story, more often than not, “the market” doesn’t care.
Be careful, be wise. Get good advice.
Posted in Distressed Property, Economics
… go to waste. Like a Hyena who notices a limping Wildebeest – criminals will gravitate towards problem areas.
Shame that with all the dust and confusion in the real estate, foreclosure, and mortgage market that we have to deal with criminals as well – but that is the nature of what happens when there is an opportunity.
It happens in Jacksonville too.
Federal prosecutors charge that a pair of Jacksonville mortgage brokers masterminded a network of schemes that bilked mortgage loan companies out of more than $1.8 million in 13 phony real estate transactions — 12 of which involved First Coast homes.
A grand jury indictment filed in the United States District Court Middle District of Florida Jacksonville division Wednesday, stated that Jacksonville mortgage broker Gregory W. Willson and loan processor Brian Willson were the masterminds of the operation from 2005 to 2007.
Always be careful, and watch your instincts. If something doesn’t feel right, odds are it isn’t. Never, never get talked in to anything you wouldn’t want to tell your mother about.
Lionel Cox, owner of Jacksonville-based Distressed Property Solutions Inc., would recruit homeowners who were near foreclosure, the indictment said. Co-conspirators would pose as buyers, submitting fraudulent information to mortgage companies to get mortgage loans. The dummy buyers claimed the homes would be their primary residence, overstate their monthly incomes to qualify for the loans — claiming they worked for Neil Willson, another co-conspirator.
Closings were manipulated, the mortgage loan money was pocketed and co-conspirators were paid for their roles in the scheme, the government charged. Co-conspirators Cassie Clarkson, Erika Outlaw and Joseph Gullett helped manipulate closing documents, the indictment said.
There is nothing new under the sun – just ask any law enforcement officer. Be careful who you do business with.
Posted in Distressed Property
By now, most everyone has read the news. From PBS NEWSHOUR,
Talk of a nationwide moratorium on selling foreclosed homes ran into new opposition today, as the securities industry warned against serious damage to the housing market.The warning came from the Securities Industry and Financial Markets Association. It said imposing a moratorium would be — quote — “catastrophic.”
Last week Bank of America, the nation’s largest, acted on its own to halt foreclosures in all 50 states. The bank is an underwriter of the “NewsHour.” Three other banks, Ally Financial, J.P. Morgan Chase, and PNC Financial, have imposed partial freezes in 23 states where foreclosures must be approved by a judge.
All of the banks acted after allegations of improprieties, including so-called robo-signing, in which processors signed documents they never read.
At first blush – some may think that this would be a good thing, for everyone. I don’t think so. Think about a dental care; yes, dental care. Here’s why.
Right now there is already a large backlog of distressed properties on the market. “The Market,” when given time and room – will find its balance. It will find its price. The more artificial barriers are put up between the imbalance and balance, the more pressure will build up, the more you delay the inevitible, and the worse the eventual outcome will be.
Like going to the dentist when you have tooth pain – the longer you delay fixing the problem, the greater the pain and damage in the end.
There are problems, and the reasons will come out in due time – but what we should think about now is what impact this has on the market. One thing we know is that to get through this will take more time.
The banks are in trouble in large part due to two things; the amount of paperwork combined with the number of foreclosures. You can’t train experts overnight. This isn’t just a foreclosure problem though – those who have bought foreclosed houses need to look over their shoulders.
FHFA, the regulator of Fannie and Freddie, is overseeing talks between other lenders and title insurers about a similar deal that covers other companies. It could be announced this week, according to an official with the American Land Title Association.”The title insurers are worried that claims for foreclosures aren’t done properly,” said Kurt Pfotenhauer, who heads the trade group. “It’s not been an area of systemic concern until now.”
How good is your title?
Now the twin forces of litigation and politics are weighing in.
Attorneys general from as many as 40 states are planning to announce a joint investigation into allegations of fraud in foreclosures this week, according to a person involved in the discussions who spoke on the condition of anonymity because the announcement had not yet been made.
…
In Maryland, Gov. Martin O’Malley (D) and the state’s congressional delegation sent a letter to Maryland Court of Appeals Chief Judge Robert M. Bell on Thursday asking him to suspend all foreclosures in the state for at least 60 days.
…
Wall Street and the White House also gave a thumbs down Monday to a total freeze on foreclosures nationwide, saying clearing up faulty paperwork could take as little as two weeks.A complete halt would be “catastrophic” for the U.S. economy and hurt home sales, according to a statement from Tim Ryan, president of the Securities Industry and Financial Markets Association, Wall Street’s biggest lobby. A day earlier, David Axelrod, a senior adviser to President Barack Obama, also said a moratorium would damage the housing market.
While some homeowners have criticized the Florida Attorney General for not taking a more aggressive stand against servicers, Wiggins said McCollum did get involved months ago by filing lawsuits against the four foreclosure law firms thought to handle most of the lenders’ cases against Florida borrowers.
Three of those firms — Shapiro & Fishman of Boca Raton, the law offices of David J. Stern in Plantation and the Florida Default Law Group in Tampa — have fought state subpoenas. McCollum’s investigation took a hit last week when a Palm Beach County judge ruled in favor of Shapiro & Fishman, saying the state’s request was too broad, and that The Florida Bar had jurisdiction over attorney conduct.
McCollum fired back on Monday, asking Palm Beach County Judge Jack Cox to rehear the case on the grounds that the foreclosure firms were being investigated for allegedly creating improper documents to hasten the foreclosure process — constituting fraud, which would be handled by the Attorney General.
What can the homeowner or homebuyer do? Be smart, use a professional, and make sure to cover yourself as much as possible from harm that could come to your title.
There are still great opportunities out there – just make sure you are playing smart and are with the right team.
My Agent Greg 