Freddie Mac Predictions for 2011
Published December 14, 2010 | 
Freddie Mac analysts point to five features that they believe will likely characterize the 2011 housing and mortgage markets:
1. Low mortgage rates. With Fed observers expecting the central bank to keep the federal funds rate at its current target range of 0 percent to 0.25 percent for most (or all) of 2011, relatively low mortgage rates will be a feature of the 2011 mortgage market. Thirty-year fixed-rate loans are likely to remain below 5 percent throughout the year, and initial rates of 5/1 hybrid adjustable-rate mortgages will likely remain below 4 percent in 2011.
2. Prices have hit bottom. House prices are likely to begin a gradual, but sustained recovery in the second half of 2011.
3. Housing will remain affordable. With affordability high, many first-time buyers will be attracted to the housing market in the New Year, likely translating into more home sales in 2011 than in 2010.
4. Refinances will dwindle. Many eligible borrowers have already refinanced and the federal Making Home Affordable refinance program is expiring on June 30. While fixed-rate loans are likely to remain low, they will move up gradually, making it even less likely that refinances will be attractive to most home owners.
5. Delinquency rates will decline. Based on the last several business cycles, the share of loans that are 90 or more days delinquent or in foreclosure proceedings — known as the “seriously delinquent rate” — generally crests within a year of the start of the recovery in payroll employment, and this economic recovery appears to fit within that pattern. Payrolls began to rise last January, and by the spring the seriously delinquent rate had begun to fall.
Source: Freddie Mac (12/09/2010)
Denver Home Prices Up and Outperforming the National Average
Published December 10, 2010 | Stats from Denver’s Metro List show that prices were up in November 2010 compared to November 2009. In November 2009, the average price of a single family home in the Denver area was $265,498 and in November 2010 was $281,466. Of course, results vary by area, but overall, we are looking up.
At the same time, the Denver Business Journal just published an article about how prices in Denver are outperforming the national average. An excerpt from the article is below and the full article can be seen at http://bizjournals.com/denver/news/2010/12/09/clear-capital.html
Home prices in Denver have outperformed the rest of the nation in recent years, according to a new report on prices nationwide from real estate data provider Clear Capital.
“While current quarterly and yearly price changes indicate Denver is performing similarly to the nation, overall trending from the home pricing run-up to today shows that Denver is clearly outperforming national prices,” says Truckee, Calif.-based Clear Capital in its latest monthly Home Data Index Market Report, issued Thursday.
Denver home prices “avoided the extreme run-up experienced nationwide” since January 2002, and “subsequently fell by much smaller margins [down 29.9 percent] and have recovered more rapidly than the rest of the nation,” the report says.
It says average home prices in the Denver area are now 18.5 percent below their all-time peak of August 2005, half the national price decline of 37 percent over that same period.
3 Reasons to Sell a Home Soon
Published November 15, 2010 | What do you tell a client who asks whether to sell a house now or wait? Steve McLinden, real estate adviser with Bankrate.com, offers these three good reasons not to wait, even though the holidays are approaching:
1. The market is improving. Most markets have either turned or are close to turning.
2. All real estate is local. Homes in great locations are always in demand.
3. Spring is coming soon. Many potential buyers are starting their online searches right after the holidays, making mid- to late February a great time to start marketing.
Source: Bankrate.com, Steve McLinden
Social Media and Real Estate
Published November 15, 2010 | Social media sites are not just for finding and making friends anymore. The list of real estate agents using these online tools has reportedly expanded, particularly during the start of the housing market crisis in the U.S. Property agents and brokers have reportedly become big users of Facebook, Twitter and other media social sites and most have also incorporated application downloading and microblogging in their list of daily tasks.
Most real property agents who make use of online social media tools have revealed that these applications have helped them secure a number of deals and net additional clients. Meanwhile, property agencies are reportedly giving a lot of boardroom meeting time to discussing how these sites can be incorporated into their companies’ practices.
With the real estate market proving to be a challenging business for agents, securing clients online has become the way for most of them. Nowadays, agents are reportedly using these sites, not only to communicate with potential and existing clients, but also to launch marketing campaigns and spread the word about the properties available under their books.
As the list of real estate agents using online media tools to connect with consumers continues to expand, the reach of social media world also continues to grow. According to agents, sites like Facebook and Twitter are like countries where clients and consumers can be reached easily by merely logging online.
Most real estate companies have launched their own pages in Twitter and Facebook and have established channels in YouTube. These pages allow visitors to gain access to real estate firms’ online property listings and employee agents. In these channels, potential property buyers can find out which homes are available and where they can be found.
Aside from providing a wider customer reach, online social sites also offer a cheaper way for property businesses to market their services and products. Industry experts have stated that agents who are Internet-savvy have an advantage over others since they can readily use the online world where thousands of potential clients can be found. Meanwhile, the list of real estate agents engaging in online marketing and communication continues to expand, with most of them reporting great returns for a minimum amount of investment.
By : John Cutts
Consumers Put Credit Card Debt Ahead of Mortgage
Published November 8, 2010 | A panel on consumer debt at the Mortgage Bankers Association’s annual convention discussed the changing mentality that has resulted in credit cards being paid before mortgages, even among prime borrowers.
Experts addressed how real estate defaults affect credit differently, noting that a short seller would be able to buy another home in two years while a foreclosed borrower would have to wait much longer.
Panel members said the use of technology to account for changes to a loan accord could enhance borrower credit reporting as well as the role of borrower income in determining a person’s willingness and ability to pay.
Source: National Mortgage News, Austin Kilgore 11/01/2010
How Election Results Impact Real Estate
Published November 8, 2010 | The outcome of the election this Tuesday will almost certainly have an impact on the real estate industry and the issues that most seriously affect it. Here are two of the initial results.
1. Ten of the 12 state attorneys general on the executive committee heading the foreclosure probe lost their re-election bids and won’t be returning to office. However, Ohio’s Richard Cordray, one of the most outspoken AGs, says the change of watch won’t matter very much.
“The issue is still there. The elections don’t change that. It’s going to need to be addressed, from the industry’s standpoint,” he said. “The 50 state investigation will continue to go forward.”
2. In Florida, voters rejected a proposal to change the state’s constitution to allow voters to decide changes to local master plans. The proposal was rejected by two-thirds of voters.
Source: The Wall Street Journal, Robbie Whelan (11/03/2010)
Houses Get Smaller but Furniture Remains Big
Published October 21, 2010 | The declining size of U.S. homes hasn’t resulted in a decline in the appeal of plus-size furniture.
Online retailers such as Oversize Furniture, Living XL, and Brylane Home specialize in outfitting the homes of large-size customers, providing extra-wide seats and increased support. Other furniture makers are subtler, making furniture that is a little bigger without calling attention to it, retailers say.
This trend won’t last forever either, predicted Jerry Underwood, director of marketing for HOM Furniture. He said big traditional furniture appeals to baby boomers, but their echo boomer children like cleaner lines and smaller scale. “The big overstuffed [look] is going away rapidly,” he said.
Source: Minneapolis Star-Tribune, Kim Palmer (10/20/2010)
Bank of America halts all foreclosure sales
Published October 8, 2010 | NEW YORK (CNNMoney.com) — Bank of America is halting foreclosure sales in all 50 states as part of a widening investigation into flaws in the process, the company announced Friday.
The announcement came a week after the nation’s largest bank said it was freezing home foreclosures in 23 states where foreclosures must be approved by the courts.
The bank said the foreclosure process on delinquent borrowers will continue, but it will not proceed to judgment or a foreclosure sale.
“We haven’t found any problems in the foreclosure process,” Bank of America (BAC, Fortune 500) President and CEO Brian Moynihan said in an appearance before the National Press Club in Washington. “What we are trying to do is clear the air, and say ‘We will go back and check our work one more time.’ ”
The review process is likely to last a few weeks, Moynihan said.
Bank of America is not the only bank to freeze foreclosures.
PNC Financial Services Group also suspended sales of foreclosed homes on Friday, for a term of 30 days, according to media reports.
Frederick Solomon, a spokesman for PNC, declined to comment beyond saying that “PNC is reviewing its mortgage servicing procedures to make sure they comply with applicable legal requirements.”
JPMorgan Chase (JPM, Fortune 500) announced last week that it will also halt proceedings for about 56,000 homeowners after learning that its employees may have approved foreclosures without personally reviewing loan files.
JPMorgan Chase had no comment on Friday’s announcement by Bank of America.
Ally Financial, previously known as GMAC, the finance arm of General Motors, has also paused foreclosures in the 23 states.
However, Citigroup said it is making no changes in its foreclosure procedures. “At this point, we have no reason to believe our employees haven’t been following our procedures, so we do not believe a suspension is necessary,” spokesman Mark Rodgers said in an e-mailed statement.
State attorneys general have stepped up pressure on banks in recent days after it was revealed that some bank employees had signed foreclosure affidavits without verifying that the documents were accurate, a process now known as “robo-signing.”
Ohio’s attorney general has filed a lawsuit against Ally Financial and its subsidiary GMAC Mortgage for allegedly submitting fraudulent documents in hundreds of foreclosure cases across the state.
Ally declined to comment Friday when asked if they would follow Bank of America and expand their freeze.
Senate Majority Leader Harry Reid, D-Nevada, called on major mortgage servicers to consider halting foreclosures in all fifty states in a statement released Friday.
“It is only fair to Nevada home owners to suspend foreclosures until a thorough review of foreclosure processes is completed and home owners can be assured that their documents are being analyzed properly,” said Reid.
Sen. Christopher Dodd, D-Conn., the chairman of the Senate Banking Committee, announced Friday that he will hold a hearing to investigate allegations of improper mortgage servicing and foreclosure processing on Nov. 16, the day after the Senate returns from recess.
On Thursday, the White House said that President Obama won’t sign a bill that could have made it easier for courts to clear foreclosures. The bill would have required federal and state courts to recognize documents that were notarized in other states
GMAC Mortgage has suspended foreclosure actions in 23 states
Published September 23, 2010 | It seems that GMAC Mortgage has suspended foreclosure actions in 23 states. These are states that are “judicial foreclosure” states, with the courts involved in foreclosure actions. Some attorneys have been giving a number of lenders fits in many states because they couldn’t produce the original promissory note proving the debt.
GMAC has received billions in government aid, but could be in more trouble. Other than the previous wasted bailout money, some people would like to see the lenders go under and people keeping their homes. Losing my ticket on the way to the movie gets me a “tough luck” response at the door. Not getting the proof of debt document for a purchased loan may be heading toward the same fate from some judges.
Posted By about
By James Kimmons, Real Estate Business Guide
GMAC Mortgage, one of the country’s largest and most troubled home lenders, said on Monday that it was imposing a moratorium on many of its foreclosures as it tried to ensure they were done correctly.
The lender, which specialized in subprime loans during the boom, when it was owned by General Motors, declined in an e-mail to specify how many loans would be affected or the “potential issue” it had identified with them.
GMAC said the suspension might be a few weeks or might last until the end of the year.
States where the moratorium is being carried out include New York, Connecticut, New Jersey, Illinois, Florida and 18 others, mostly on the East Coast and in the Midwest. All of the affected states are so-called judicial foreclosure states, where courts control the interactions of defaulting homeowners and their lenders.
Since the real estate collapse began, lawyers for homeowners have sparred with lenders in those states. The lawyers say that in many cases, the lenders are not in possession of the original promissory note, which is necessary for a foreclosure.
GMAC, which has been the recipient of billions of dollars of government aid, declined to provide any details or answer questions, but its actions suggest that it is concerned about potential liability in evicting families and selling houses to which it does not have clear title.
The lender said it was also reviewing completed foreclosures where the same unnamed procedure might have been used.
Matthew Weidner, a real estate lawyer in St. Petersburg, Fla., said he interpreted the lender’s actions as saying, “We have real liability here.”
Mr. Weidner said he recently received notices from the opposing counsel in two GMAC foreclosure cases that it was withdrawing an affidavit. In both cases, the document was signed by a GMAC executive who said in a deposition last year that he had routinely signed thousands of affidavits without verifying the mortgage holder.
“The Florida rules of civil procedure are explicit,” Mr. Weidner said. “If you enter an affidavit, it must be based on personal knowledge.”
The law firm seeking to withdraw the affidavits is Florida Default Law Group, which is based in Tampa. Ronald R. Wolfe, a vice president at the firm, did not return calls. The firm is under investigation by the State of Florida, according to the attorney general’s Web site.
Real estate agents who work with GMAC to sell foreclosed properties were told to halt their activities late last week. The moratorium was first reported by Bloomberg News on Monday. Bloomberg said it had obtained a company memorandum dated Friday in which GMAC Mortgage instructed brokers to immediately stop evictions, cash-for-key transactions and sales.
Nerissa Spannos, a Fort Lauderdale agent, said GMAC represents about half of her business — 15 houses at the moment in various stages of foreclosure.
“It’s all coming to a halt,” she said. “I have so many nice listings and now I can’t sell them.”
The lender’s action, she said, was unprecedented in her experience. “Every once in a while you get a message saying, ‘Take this house off the market. We have to re-foreclose.’ But this is so much bigger,” she said.
30-year mortgage at lowest rate since 1971
Published August 13, 2010 | NEW YORK (CNNMoney.com) — Mortgage rates continued to decline this week, plunging to the lowest level in decades, according to surveys from Freddie Mac and Bankrate.
Freddie Mac’s weekly report said the 30-year fixed rate slipped to 4.44% for the week ended Thursday, the lowest since the government-backed lender began tracking the rate in 1971. Last week’s rates stood at 4.49%, and a year ago it was at 5.29%.
The 15-year fixed rate fell to 3.92% this week, the lowest since Freddie Mac began tracking it 1991, down from 3.95% last week and from 4.68% a year ago.
Adjustable-rate mortgages also declined, with the 5-year rate falling to 3.56% this week, the lowest since 2005 when the lender began tracking it.
Mortgage tracker Bankrate.com, which surveys large lenders across the country, said the average 30-year fixed loan sank to a record low for the fourth consecutive week, falling to 4.57% from 4.66% the previous week.
The 15-year fixed rate, which is a popular option for refinancing, also fell to the lowest level in the history of Bankrate’s 25-year old survey, dipping to 4.06%, from 4.11% the week before.
While the 1-year adjustable-rate mortgage held steady at 4.8% for a fourth week, the 5-year adjustable rate mortgage dropped to a record low of 3.92% from 3.95% the previous week.
“Low rates are helping to heal many battered local housing markets by increasing home-purchase activity, said Frank Nothaft, chief economist at Freddie Mac.
Mortgage rate applications inched up a modest 0.6% during the week, according to the Mortgage Bankers Association. Applications for purchase rose 0.3% while refinance applications increased 0.6%