Archive for Short Sales
Four Federal Foreclosure Mitigation Programs Are Looked At To Terminate
Posted by: | CommentsRep. Spencer Bachus (R-Alabama), chairman of the House Financial Services Committee, announced this week that he has scheduled a subcommittee hearing and full committee markup of four bills that will terminate what he says are “failed and ineffective housing foreclosure programs.”
On the chopping block are the Home Affordable Modification Program (HAMP), HUD’s Neighborhood Stabilization Program, the Federal Housing Administration (FHA) Short Refi Program, and the Emergency Homeowner Relief Fund passed under the Dodd-Frank Act.
A hearing will be held on March 2 by the Insurance, Housing and Community Opportunity Subcommittee to review the four bills addressing each federal program, followed by a full committee markup on March 3.
“In an era of record-breaking deficits, it’s time to pull the plug on these programs that are actually doing more harm than good for struggling homeowners,” said Rep. Bachus. “These programs may have been well-intentioned but they’re not working and, in reality, are making things worse.”
Rep. Judy Biggert (R-Illinois), chairman of the Insurance and Housing Subcommittee, added, “We need to break down barriers that have delayed the housing recovery, including expensive and ineffective government programs that have failed to help homeowners. Unfortunately, these programs were set up in haste, executed poorly, and have done little to restore stability in the marketplace.”
Biggert continued, “A government program that spends more to save a single borrower than it costs to buy a home is no help at all – it’s just a waste of taxpayer money. We need to stop funding programs that don’t work with money we don’t have.”
Rep. Barney Frank (D-Massachusetts), ranking member and former chairman of the House Financial Services Committee, said he was “very disappointed” by the move that would “eliminate programs which help the victims of the financial crisis.”
Frank pointed out that the Emergency Homeowner Relief Fund, in particular, provides assistance to people who are unable to pay their mortgages not because they were imprudent or irresponsible but because they are unemployed. He notes that it is modeled after a program in Pennsylvania that has already proven successful, and he described the Dodd-Frank measure as “the single most effective anti-foreclosure program that has been put forward.”
Frank added that HUD’s Neighborhood Stabilization Program provides funding to municipalities to cope with the blight, expense, and destabilization brought on by vacant and abandoned properties. He described Bachus’ plan for its termination as “an attack on cities.”
Sphere: Related ContentRealtyTrac: Share of Foreclosure Home Sales Declines, Discounts Deepen
Posted by: | CommentsThis an article I came across from one of the sites that I view. Gives a good recap of what has been happening
By Carrie Bay
RealtyTrac has released its year-end 2010 foreclosure sales report, which shows that foreclosure homes accounted for nearly 26 percent of all U.S. residential sales last year, down from 29 percent of all sales in 2009 but up from 23 percent in 2008.
The tracking firm defines a foreclosure sale as the sale of a property that occurs while the home is actively in some stage of foreclosure, including a pre-foreclosure short sale, a home sold to a third party at foreclosure auction, or an REO sale. It does not include property transfers from the owner in default to the foreclosing bank or lender.
RealtyTrac’s report also shows that the average sales price of these foreclosure properties was more than 28 percent below the average sales price of properties not in the foreclosure process – up from a 27 percent average discount in 2009 and 22 percent in 2008.
According to the company’s analysis, a total of 831,574 U.S. residential properties either owned by banks or in some stage of foreclosure sold to third parties in 2010. That’s down 31 percent from the number of foreclosure homes sold the year prior. Meanwhile, RealtyTrac says the sales volume of non-foreclosure properties in 2010 decreased nearly 19 percent from 2009.
Foreclosure sales during the final part of last year were impacted by robo-signing issues and the foreclosure moratoriums that followed from several major servicers. RealtyTrac reports that 149,303 foreclosure sales were recorded in the fourth quarter of 2010, down 22 percent from the previous quarter and down 45 percent from the fourth quarter of 2009. That comes despite a 21 percent monthly uptick in foreclosure sales volume in December.
James Saccacio, RealtyTrac’s CEO, points out that fourth-quarter foreclosure sales volume hit its lowest level since the first quarter of 2008, and in addition to the foreclosure paperwork controversy that hit at that time, he attributes the decline to stifled demand from the expired homebuyer tax credit.
Still, Saccacio notes that foreclosures continue to represent a substantial percentage of all U.S. residential sales. “The catch-22 for 2011 is that while accelerating foreclosure sales will help clear the oversupply of distressed properties and return balance to the market in the long run, in the short term a high percentage of foreclosure sales will continue to weigh down home prices,” he said.
Breaking down foreclosure sales by type, RealtyTrac reports that a total of 512,886 REO properties sold to third parties in 2010 at an average discount of 36 percent. REOs accounted for 16 percent of all sales last year.
A total of 318,688 pre-foreclosure properties — in default or scheduled for auction — sold to third parties last year, with an average discount of 15 percent. Pre-foreclosure sales accounted for nearly 10 percent of 2010 home sales.
Nevada (57 percent), Arizona (49 percent), and California (44 percent) posted the highest percentage of foreclosure sales in 2010.
Other states where foreclosure sales accounted for at least one-quarter of all sales were Florida (36 percent), Michigan (33 percent), Georgia (29 percent), Idaho (28 percent), Oregon (28 percent), Illinois (26 percent), Virginia (25 percent), and Colorado (25 percent).
Ten states posted foreclosure discounts of more than 35 percent, led by Ohio, with an average discount of nearly 43 percent, and Kentucky, where foreclosures sold for an average discount of 40 percent. The eight other states are: Tennessee, California, Pennsylvania, Illinois, New Jersey, Michigan, Georgia, and Wisconsin.
Sphere: Related ContentTARP Special Inspector General’s Report Says HAMP is Failing
Posted by: | Commentsn his report to Congress published this week, Neil Barofsky described the drawbacks and potential problems the bank bailout had created in regard to companies deemed “too-big-to-fail.” His report also covered controversial issues surrounding the Home Affordable Modification Program (HAMP), designed by Treasury as a foreclosure prevention effort.
Barofsky is the special inspector general for the Troubled Asset Relief Program (TARP). The HAMP initiative, including incentive payouts to servicers, borrowers, and investors, is funded with TARP dollars.
HAMP, Barofsky says in the report, “continues to fall dramatically short of any meaningful standard of success.”
According to Barofsky, the program was doomed from the beginning, because it was inefficiently designed with inconsistent rules that have been revised too frequently.
He calls the 522,000 permanent modifications the program provided in 2010 “anemic,” and calls attention to the more than 792,000 trial and permanent modifications that have been canceled and more than 152,000 that are still in limbo.
In December, the Congressional Oversight Panel estimated that at this rate, HAMP will generate anywhere from 700,000 to 800,000 permanent modifications, a far cry from the 3 to 4 million modifications predicted by Treasury.
Not only does Barofsky assert that HAMP is not working because of poor design and implementation, but he also says another issue is the participation and administration of the program by servicers. Servicers, he says, have been compounding the problems of the program with unnecessary delays, by failing to follow program standards, and even by misplacing borrower paperwork. Treasury’s reaction to these issues has been lenient because of a fear that enforcing the program rules will encourage servicers to discontinue use of HAMP all together.
“Without meaningful servicer accountability,” Barofsky writes, “the program will continue to flounder. Treasury needs to recognize the failings of HAMP and be willing to risk offending servicers. And if getting tough means risking servicer flight, so be it; the results could hardly be much worse.”
Barofsky extends an appeal for TARP to maximize the potential benefits of HAMP by setting “realistic and meaningful goals for its collective foreclosure prevention efforts.”
North Carolina Congressman Patrick McHenry, chairman of the oversight subcommittee on TARP issued a statement expressing his disappointment after receiving his copy of Barofsky’s report:
“…the so-called Home Affordable Modification Program yet again gets a failing grade,” he said. “What will it take for the Treasury to realize that serious changes must be made to this program? Homeowners are hurting and this program continues to do more harm than good.”
Home Prices In Some Markets Undervalued
Posted by: | CommentsHome price declines have been sharp and widespread across the country as the gap between supply and demand widens and local markets inherently correct the unsustainable price run-ups that characterized the housing boom. But according to the risk assessment firm Local Market Monitor, there are scores of metro areas where prices have over-corrected to the point that now, housing in these markets is considered “undervalued.”
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