The national mortgage delinquency rate as of January month-end was 7.97 percent.  The delinquency rate registered a decline, both for the month and the year, with January’s rate down 2.2 percent from December 2011 and down 10.5 percent from January 2011.

The total foreclosure inventory rate hit 4.15 percent last month – up 1.1 percent compared to December 2011, but down a slight 0.1 percent when comparing year-over-year numbers.

According to LPS’ report, there were 2,084,000 properties that were counted as part of the foreclosure inventory last month.

The number of properties with mortgages 30 or more days past due but not yet referred to a foreclosure attorney tallied 3,998,000. Of these, 1,772,000 had been delinquent for 90 days or longer.

States with the lowest percentage of non-current loans in January included Montana, Alaska, Wyoming, South Dakota, and North Dakota.

While I don’t think that we will see prices in Berkeley or the surrounding areas decrease significantly, I don’t think we will see much increase either.  With rates continuing to remain low there is no reason for buyers to make rash decisions.  Buyers are indeed picky.  And they are patient.  Because of this, they will wait.

There is talk of an influx of foreclosures hitting the market.  This doesn’t surprise me.  I think we will see more short sales, but the days on market for short sales will decrease.  Not because the banks have their systems in place, but because more sellers will lose their home to foreclosure during the process.  The one thing to watch is that banks are starting to promote short sales for their distressed clients, and are proactively calling owners to see if they would like to short sale their home.

I think the allure of investors seeking foreclosed properties will continue to rise.

2011 brought a ton of cash buyers.  As the economy attempts to recover, cash purchases in all price brackets will continue.

One demographic that is being hit is the younger market, the 30 – 34 year old market.  Loss of jobs, loss of appreciation, and student loans out of deferment, homeownership amongst this age bracket is falling faster than any other.  This is a market that I service, and I have definitely seen a shift in the mindset of the 30-somethings.

Sellers are discouraged.  They are fearful.  They are worried that prices will never go up.  Those who don’t need to sell, won’t.

This all sounds pretty grim, doesn’t it?  Well come on now, the economy is still in the pits.  Did you think real estate would be any different?  The good news is that if you are a seller, there are a TON of buyers who are well-qualified.  If you are a buyer, rates are still at an all time low.  And with rents projected to rise, now is the time to cash in on some real estate wealth.

Wherever your real estate path may take you in 2012, I wish you good health, happiness, and a hot cup of tea by a cozy fire.

Cheers!

http://www.dsnews.com/articles/double-dip-altos-says-prices-have-been-steadily-rising-since-then-2011-06-02

What I find completely hilarious (and true!) is that the article deems the ebb and flow of home prices as the “Catfish Recovery.”

You laugh, but think about it.  As the article references, a catfish is a bottom dweller that moves slow, feeds off of the bottom of a lake or river, then heads up to the surface, then back down, all the while bobbing up and down without a clear direction.  Sounds like some investors I know!

For months we have been saying that that we are seeing prices continue to go down.  But that isn’t true anymore, it really depends on the area and the price range.  For buyers looking in the $550k and under range I am seeing more catfish-like effects with prices; the upper end ($850k and above) seems to be holding steady, probably due in part to low inventory.

Overall inventory has dropped in the past month (down by 1.7%), which is the first reduction since November 2010.  Distressed properties continue to dominate the market, but this is also decreasing.  So while national readings indicate a .93% increase in price, it is important that you look hyper-locally to see what a particular neighborhood is experiencing.

This is all well and good, and a huge relief for many.  But sometimes I have to wonder if this is just a lot of PR hoopla.  Bank of America estimates that about 45,000 customers will qualify for its plan.  So based on BofA’s past performance, maybe half will actually succeed.  Banks keep throwing out these great plans but don’t have the infrastructure in place (can I say short sales?)  to support these plans.  A client of mine has tried to get through to BofA in the past to discuss loan modification and after being on the phone for 90 minutes and transferred numerous times, were told they don’t actually qualify.  Shouldn’t it be easier than that?

So, Bank of America, if you are listening,  I hope you hold true to your plan.  You have the ability to help so many troubled borrowers, don’t let them down!

Click here to read the original article from AP: “BofA to Start Reducing Mortgage Principle.”

No wonder buyers and sellers are confused.

While most houses are moving fast, it certainly isn’t because of the move-up tax credit.  It doesn’t surprise me that this flopped.  The move up tax credit of $6500 is for those who have lived in their home for five consecutive years out of the last eight years.  Whenever I meet with a new seller I mention the tax credit- I have yet to see one seller get excited about this and sell because of it. 

Enthusiasm for the credit is waning. 

The first time homebuyer tax credit is set to expire at the end of April so I imagine we will see a spike in sales over the first quarter.  However, most buyers are prepared to buy with or without the credit.  Perhaps it is because inventory is so low that there just isn’t much to choose from. 

Regardless of the reason, the credit was a good attempt at stimulting the real estate market.  I know plenty who took advantage.  Let’s keep watching to see what happens with rates.

Interested? Call me today and I will connect you with the best rehab mortgage guru I know.

Source: Minneapolis-St. Paul Star-Tribune

http://www.youtube.com/watch?v=SM7oWKgCVo4

“It may well be that lenders have intentionally slowed down the pace of formal foreclosure proceedings. If so, it’s not out of the goodness of their hearts. It’s because they’ve concluded that flooding the market with cheap foreclosures in this economic environment may not be in their best financial interest. Trying to keep motivated, employed homeowners in their homes might be the most cost-efficient way to stem losses,” said John Walsh, DataQuick president.

A year ago the percentage of foreclosures that had not yet re-sold was about twice as great, while the number of unsold foreclosures from the 18-month period ending in July 2008 was about 50 percent higher than it is now.

Notices of Default (first step in foreclosure process)
houses and condos

-Property Value Decline/Can’t Refinance
-Situations beyond your control
-Increased Mortgage Payment
-Adjustable Rate Mortgage
-Loss of income/job
-B a n k r u p t c y
-Foreclosure

Date: Every Wednesday 5:00pm – 7:00pm and
Every 1st and 3rd Saturday, 10:00am – 3:00pm
Starting: February 18, 2009
Where: 3560 Grand Avenue, Oakland, CA 94610
Registration: (510) 268-9792 or Toll Free (877)964-3422
(877) 9NI-DHCA

Drop-in also accepted
www.nidonline.org

Sounds like a high payoff short-term investment, right? It is. But the FHA found that too many property flips using its insured mortgage program involved outright fraud — hyped appraisals, shell games where property flippers never actually took legal title to the house before selling it for huge profits, sometimes overnight.

Often the end purchaser of the flipped property was not financially qualified, and used fraudulent income, employment and assets information to obtain the FHA loan. Then the buyer quickly defaulted, leaving FHA with insurance losses and a house that was worth nowhere near its appraisal valuation. The flipper, meanwhile, pocketed all the sales proceeds financed with the FHA mortgage.

To rein in such practices, FHA proposed — and last week adopted in final form — new restrictions. Specifically, FHA will now require that:

Only owners of record — listed as such in the local court house real estate recordations — may sell properties that will be financed using FHA insured loans.

Any resale of a property may not occur 90 or fewer days from the last sale to be eligible for FHA financing.

For resales that occur between 91 and 180 days where the new sales price exceeds the previous sale price by 100 percent or more, FHA will require additional documentation of the property’s true value before insuring the mortgage.

The agency may also require additional evidence of the accuracy of appraisals whenever properties are re-sold at high price gains within 12 months.
The FHA 90-day no-flip time restrictions will be waived when the sellers of properties to be financed are:

HUD itself, disposing of its REO (real estate owned) acquired property portfolio.

Sales of properties that were acquired by the sellers through an inheritance.

Fannie Mae, Freddie Mac or other federally-chartered financial institutions disposing of REO.

Local or state housing agencies.

Nonprofit organizations that have previous approvals to purchase HUD REO properties at a discount.

Properties located in a presidentially-declared disaster area, provided FHA has issued a formal announcement of eligibility for a specific disaster area.
Real estate investors, particularly those who specialize in rehabilitations of rundown structures in central city areas, had complained to HUD about possible negative impacts on their business activities stemming from the new rules. But HUD decided that banning most 90-day or under flips, and by scrutinizing flips between 91 and 180 days of acquisition where the price markup exceeded 100 percent, FHA should be able to protect itself against the worst abuses.

Investors with questions about the new regulations can call 1-800-CALL FHA for guidance. The rules are contained in HUD Mortgagee Letter 2006-14, issued June 8.