Foreclosure Inventory Increase in 1st quarter 2013

After finalizing the National Mortgage Service settlement almost a year ago, lenders have been working through the backlog of delinquent mortgages. In its first national foreclosure inventory analysis, RealtyTrac reported 1.5 million properties were actively in the foreclosure or REO process in the 1st quarter of 2013. Up 9% from last year.

Florida was among the States experiencing dramatic surge in foreclosure inventories during the 1st quarter of 2013, Florida foreclosures up 80% over this period.

According to RealtyTrac more than 60% of the national foreclosure inventory in the 1st quarter of 2013 were properties with loan amounts under $200,000, homes with outstanding loan amounts between $200,000 to $400,000 represented an additional 30% of the foreclosure inventory.

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FHFA Extends HARP to 2015

Washington, DC – The Federal Housing Finance Agency (FHFA) today directed Fannie Mae and Freddie Mac to extend the Home Affordable Refinance Program (HARP) by two years to December 31, 2015. The program was set to expire December 31, 2013.

“More than 2 million homeowners have refinanced through HARP, proving it a useful tool for reducing risk,” said FHFA Acting Director Edward J. DeMarco. “We are extending the program so more underwater borrowers can benefit from lower interest rates.”

 According to FHFA HARP is uniquely designed to allow borrowers who owe more than their home is worth the opportunity to refinance their mortgage. Extending the program will continue to provide borrowers opportunities to refinance,  give clear guidance to lenders and reduce risk for Fannie Mae, Freddie Mac and taxpayers.

To be eligible for a HARP refinance homeowners must meet the following criteria:     READ MORE

Is the current increase in home prices sustainable or has the market been manipulated?

Nationwide reports of increasing home values leaves many unanswered questions. Is there really a sustainable recovery in homes values or are values been distorted due to supply side manipulation? Over $9 billion has been pored into the single family foreclosure market by investors, creating what could well be a temporary supply side shortage of single family homes. Institutional investors looking to build large portfolios of rental properties, continue to reduce the availability of REOs (Bank Owned Properties) and foreclosures available for sale to the general public. In addition, lenders are slow walking the availability of REOs to the home buying public, suspicious at a time when there is a general increase in demand. REOs are also listed for sale at low prices with the sole intension of generating multiple offers, instigating bidding wars resulting in high prices normally not supported by appraisals. These factors have created an abnormality in housing supply, leading to the inability for many normal homebuyers finding suitable homes available for purchase.

The numbers of first time homebuyers, the engine that drives a sustainable housing recovery has been declining. Should the recent rapid increase in home prices continue to exert downward pressure on the numbers of first time buyers entering the market place the housing recovery cannot be sustained. A true recovery of the housing market must be driven by increasing demands from normal homebuyers, a recovery driven by investors is likely to be only temporary.

There are still a large number of home going through the foreclosure process that will sooner or later be added to the REO inventory. Should a significant number of these homes enter the market quickly they could well stabilize home prices and help in sustaining this fragile housing recovery.

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Bidding Heats Up on Orlando Short Sales and Foreclosures

The median sale price of Orlando homes rose to $133,000 in February 2013 a 4 percent jump from January’s median price of $128,000. Pending sales of foreclosures and short sales in February accounting for almost 75 percent of all home sales in the Orlando Metro area.  Buyer demand continue to drive up the prices of foreclosures and short sales, for which heated bidding wars are now routine.

Short sales, which take much longer to process from contract to close, made up 61.79 percent of pending sales in February 2013 with bank-owned properties accounting for 12.25 percent. Non distressed  properties (not bank owned or short sales) accounted for 25.96 percent of February pending sales.

The average interest rate paid by Orlando homebuyers in February, 3.21 percent, set yet another record as lowest average interest rate since ORRA began tracking the statistic in 1989. A year ago, homebuyers paid an average interest rate of 3.92 percent. First-time buyers who earn the reported median income of $37,352 can qualify to purchase one of the 2,873 homes in Orange and Seminole counties currently listed in the local multiple listing service for $199,676 or less.

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Pending Foreclosures Presents Risk to Florida Housing Recovery

Florida housing recovery continues to pick up steam as consumers confidence in the economy grows. According to major home price indexes, prices have increased about 9 percent over the past 6 months.  Combined with the reduction of downward pressure on home values due to declining REOs and Foreclosure inventories, the prospects for continued price increase is encouraging.  However, there could still be some stormy winds ahead.

Florida, one of the hardest hit states during the housing crisis still has a backlog of over 377,000 old foreclosure filings in the state federal courts thru 2012.  There are also reports, that one in every five mortgages in the state of Florida is in some form of delinquency.  Should the recent settlement between the Federal Reserve/Comptroller and  mortgage servicers ending the robo-signing scandal increase the pace of foreclosures over the next 12 months, there could be a cool off in Florida home prices.

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