Massachusetts Foreclosed Homes

Nearly Half of Foreclosures, Repeat Foreclosures

With a 28 percent increase in U.S. foreclosure starts this past January compared to December 2011, nearly 50 percent of the 230,000-plus loans entering the foreclosure process were repeat foreclosures, reported CNBC, March 6, 2012.

Repeat foreclosures, which are either failed loan modifications, or loans that banks attempted to modify but could not, reached an all-time high accounting for 47 percent of all foreclosure starts in the month of January. “Banks are modifying loans more aggressively now, but many of these mortgages simply cannot be saved, and the sooner they are processed and new buyers are found for the properties, the sooner overall home prices can recover,” CNBC reported.

There are more than 4 million delinquent homes that have sat untouched by banks. Many of the properties have remained delinquent for more than two years. Some of those loans are being worked through modifications as banks become more aggressive with their modification process, but most are finally entering the foreclosure process.

U.S. Foreclosures Climb January 2012

After a year of declining foreclosure numbers, mostly the result of processing delays due to the “Robo-signing” controversy,  2012 started off with a 3 percent rise in national foreclosure filings, reported CNBC, February 16, 2012.

According to a report released by RealtyTrac, one in every 624 households received a foreclosure filing in the month of January, a 3 percent increase compared to December. States such as Florida, Illinois and Pennsylvania saw year-over-year increases for the first time in 12 months.

Experts expect that the $26 billion dollar government-lender/servicer settlement signed in early February should get the foreclosure process moving at a pace closer to what was seen before the robo-signing-induced delays.

Nationally, Nevada posted the highest foreclosure rate, with one of every 198 households receiving a foreclosure filing. Default notices, the first step of the foreclosure process, remained flat in January 2012. 

Nearly One in Four Homes in Foreclosure Process Q4 2011

During the fourth quarter, 24 percent of U.S. homes sold were in some stage of foreclosure, either already bank-owned or already winding through the process, according to RealtyTrac, a company that sells foreclosure data. The number is slightly down compared to Q4 2010 when foreclosures accounted for 26 percent of all home sales.

One in Eight Home Loans Delinquent or in Foreclosure

Nationwide, 12.6 percent of home loans were delinquent (at least one payment past due) or already in foreclosure at the end of the third quarter, according to the Mortgage Bankers Association.

That equates to more than 6 million distressed homes; however, not every home loan that is delinquent will end up in foreclosure. In fact, the number of delinquent home loans declined by nearly 8 percent in the third quarter.

In October 2011, foreclosed or short-sale homes made up 28 percent of U.S. existing home sales, the National Association of Realtors recently reported.

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BofA Exec. Says Foreclosures Selling Faster

Bank of America announced that it has picked up the pace in several markets in selling its inventory of foreclosed homes, REALTOR Magazine reported November 16, 2011. 

Brian Moynihan, Bank of America Corp.’s chief executive, said at a press conference recently that in cases where banks can take ownership of the properties quickly and get them cleaned up, they are able to get them back on the market and those properties are selling the fastest.

On the other hand, some states, such as Florida, which is a judicial state for foreclosures, continue to see delays, as foreclosures inch along at a slower pace, Moynihan said.

Overall, Moynihan said mortgage delinquencies are dropping in its portfolios and that home prices seem to be hovering at “a bottom” as the backlog of unsold homes reaches the market.

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U.S. Foreclosure Notices Increase Q3 2011

More U.S. homes entered the foreclosure process in the third quarter, but it took longer for those homes to be sold or repossessed by lenders, USA Today reported October 13, 2011.

The number of U.S. homes that received a first-time default notice during the July to September quarter increased 14 percent from the second quarter, according to RealtyTrac, a company that sells foreclosure data. Not all homeowners who receive a default notice will have their home foreclosed on.

    "That increase signals banks are moving more aggressively now against borrowers who have fallen behind on their mortgage payments than they have since industrywide foreclosure processing problems emerged last fall. Those problems resulted in a sharp drop in foreclosure activity."

Across the nation, 195,878 properties received a default notice in the third quarter. Despite a sharp increase from Q2 2011, the total was still down 27 percent from the third quarter of 2010. Lenders took back 196,530 homes during the quarter, a 4 percent decline from the second quarter and down 32 percent from Q3 2010.

Banks remain on track to repossess some 800,000 homes this year, a significant drop from more than 1 million repossesions last year.

    "While banks appear more willing to start the foreclosure countdown on borrowers, they haven't put a dent in the overall length of the     foreclosure process. In the third quarter, it took an average of 336 days, or 11.2 months, for a home to go from an initial notice of default     to being foreclosed by a lender, RealtyTrac said. That's up from 318 days, or 10.6 months, in the second quarter and represents the     longest span of time for the foreclosure process since the first quarter 2007, the firm said."

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11 Million U.S. Homes Underwater

About 11 million U.S. homes were worth less than their mortgages at the end of 2010, according to a March report from CoreLogic, Inc., a California-based real estate and financial information company.

An additional 2.4 million homeowners had less than five percent equity in their homes, so those borrowers will be underwater with even slight price declines.

The two categories add up to 28 percent of residences with mortgages.

U.S. Distressed Homes Bring Big Discounts

According to a report released by RealtyTrac, distressed homes in the United States sold at an average 28 percent discount in 2010, bringing overall home prices down, reported Bloomberg.com February 4, 2011.

Distressed homes, those homes in any phase of the foreclosure process, accounted for 26 percent of all transactions last year, down from 29 percent in 2009. With a high supply of distressed properties on the market and a low demand from home buyers, U.S. residential home prices fell 4.1 percent in the fourth quarter 2010 compared to Q4 2009. 

The average sales price of foreclosures actually went up in 2010, rising from $170,775 in 2009 to $172,030.  Bank-owned properties sold on average for a 36 percent discount, up from 33 percent in 2009, while homes in default or scheduled for auction sold at a 15 percent discount, down from 17 percent in 2009.

Foreclosure Paperwork Problems Hurt Housing Market. Who Actually Owns The House?

Problems with property title paperwork for foreclosured properties is hurting an already weak real estate market. It's a red flag for home buyers. Home buyers should work with experienced buyer agents and lawyers to protect their interests. The 60 Minutes video below aired April 3, 2011.

 

FHA Extends Anti-flipping Waiver

The Federal Housing Administration (FHA) announced January 28, 2011 that it would temporarily extend it's waiver of anti-flipping rules.

The extension is intended to accelerate the resale of foreclosed homes in neighborhoods struggling to overcome possible property abandonment and blight.

With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days.  Early last year, FHA temporarily waived this regulation through January 31, 2011.  FHA now is extending the waiver through the remainder of 2011.  

The FHA hopes the action will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales.

Consumers Face False Foreclosures

National Public Radio (NPR) recently reported that some homeowners that are current with their payments, have already paid off their mortgages, or never even had a mortgage, are receiving foreclosure notices.

Some banks have even gone as far as repossessing items and changing locks, sometimes on the wrong homes altogether.

The issue, which is most likely caused by the robo-signing debacle, certainly is a big headache to those being affected. Many homeowners report that they are being “bounced around form one bank official to the next with no resolution,” as the false foreclosure process continues, even after providing nullifying documentation. Some homeowners have found it necessary to seek legal representation and file law suits against the wrongfully accusing banks in order to get the situation settled and their legal fees covered.

Although there are no statistics on the amount of homeowners affected by this issue, it seems that the problem is becoming more and more prominent.

“'In virtually every case, I believe the homeowner was not in default when you looked at the surrounding facts. It is a widespread problem throughout the country,' said Diane Thompson, a lawyer with the National Consumer Law Center."

Foreclosures Account For 25% of Home Sales in U.S., Account for 35% in Massachusetts

Foreclosure homes accounted for 25 percent of all U.S. residential sales in the third quarter of 2010, and the average sales price of properties that sold while in some stage of foreclosure was more than 32 percent less than the average sales price of properties not in the foreclosure process, RealtyTrac, a publisher of foreclosure information, reported December 2, 2010.

Massachusetts foreclosures accounted for 35 percent of residential sales in the state. Only Nevada, Arizona, California and Florida had a larger percentage of foreclosure sales in the third quarter.

A total of 188,748 U.S. properties in some stage of foreclosure, such as default, scheduled for auction or bank-owned (REO), sold to third parties in the third quarter, a decrease of 25 percent from the previous quarter and a decrease of nearly 31 percent from the third quarter of 2009. The average sales price of properties in some stage of foreclosure was $169,523, down 2.46 percent from the previous quarter and down 0.44 percent from the third quarter of 2009. The average sales price of properties not in foreclosure was $249,721.

A total of 113,933 bank-owned (REO) properties sold to third parties in the third quarter, down nearly 26 percent from the previous quarter and down nearly 35 percent from the third quarter of 2009. REO sales accounted for 15 percent of all sales in the third quarter, the same as the previous quarter and slightly below the 16 percent of all sales reported in the third quarter of 2009. REOs sold for an average discount of nearly 41 percent, up from an average discount of 34 percent in the previous quarter and an average discount of nearly 35 percent in the third quarter of 2009.

A total of 74,815 pre-foreclosure properties, usually short sales, sold to third parties in the third quarter, down nearly 24 percent from the previous quarter and down 24 percent from the third quarter of 2009. Pre-foreclosure sales accounted for nearly 10 percent of all sales, up slightly from 9 percent in the previous quarter and 9 percent in the third quarter of 2009. Pre-foreclosure sales sold for an average discount of 19 percent, up from an average discount of nearly 13 percent in the previous quarter and an average discount of 18 percent in the third quarter of 2009.

Foreclosure sales accounted for nearly 54 percent of all sales in Nevada in the third quarter, the highest percentage of any state but down from nearly 56 percent of all sales in the previous quarter and 62 percent of all sales in the third quarter of 2009.

Arizona foreclosure sales accounted for nearly 47 percent of all sales in the third quarter, the second highest percentage of any state despite a decrease of 27 percent from the previous quarter and a decrease of 32 percent from the third quarter of 2009.

Foreclosure sales accounted for nearly 40 percent of all sales in California in the third quarter, but down from 43 percent of all sales in the previous quarter and nearly 52 percent of all sales in the third quarter of 2009. California foreclosure sales were down nearly 27 percent from the previous quarter and down 43 percent from the third quarter of 2009.

Other states where foreclosure sales accounted for at least one-quarter of all sales were Florida (37 percent), Massachusetts (35 percent), Michigan (32 percent), Georgia (29 percent), Oregon (27 percent), Idaho (25 percent) and Illinois (25 percent).

Ohio foreclosures sold for an average discount of nearly 45 percent in the third quarter, the biggest discount percentage of any state and up from an average discount of 42 percent in the previous quarter. Ohio pre-foreclosures sold for an average discount of nearly 21 percent, and Ohio REOs sold for an average discount of nearly 51 percent.

U.S. Foreclosures Decline in October

The number of U.S. homes seized by banks declined by 36 percent in October after some large loan servicers imposed a moratorium on foreclosures to investigate whether the repossessions were properly conducted, Bloomberg reported November 23, 2010.

Banks took over 79,886 homes, down from a record 124,051 in September and the lowest number since May 2009. The data comes from Lender Processing Services Inc, a Jacksonville, Florida-based real estate data company.

The decline in foreclosures led to an increase in the number of mortgages with late payments for the first time since May. Delinquencies climbed 0.4 percent to 7.04 million. It took an average 492 days for banks to foreclose on homes, up from 484 days in September and 382 days in October 2009.

Lenders including Bank of America Corp., JPMorgan Chase & Co. and Ally Financial Inc. began suspending some foreclosures in September after reports that employees may have improperly processed paperwork for foreclosures. The suspensions led to investigations by attorneys general in all 50 states and congressional hearings.

U.S. Mortgage Delinquencies Down Q3

According to the Mortgage Brokers Association (MBA), U.S. mortgage delinquencies declined in the third quarter.

In the third quarter 9.17 percent of home loans were seen as delinquent (at least one payment past due, but not yet in the foreclosure process), which was down 72 basis points compared to the second quarter of this year. 

There was an increase in foreclosure starts in the third quarter, from 1.11 percent to 1.34 percent; however, MBA says the ratio of home loans in foreclosure has dropped, probably due to the foreclosure process speeding up as of late. Numbers in the third quarter were not affected by the robo-singing controversy, where several large lenders have suspended foreclosures, although it is expected that foreclosure inventory rates will be impacted in the fourth quarter and first half of 2011.

The study revealed that 13.78 percent of the nations mortgages are not current (delinquencies and mortgages in the foreclosure process), which is down from the 13.97 percent in the second quarter of 2010.

Obama to Veto Foreclosure Bill

White House officials said that President Obama would not sign a bill would have mandated that notarizations of mortgages and other financial documents done in one state, including those done electronically, be recognized in other states, The New York Times reported October 7, 2010.

The bill's critics suggest the bill could facilitate foreclosure fraud, which has been in the news recently with several large lenders halting foreclosures in many states.

The president’s pocket veto, which is when a president rejects a bill by withholding his signature while Congress is away, effectively kills the foreclosure bill since lawmakers are out of town until after the November 2, 2010 elections.

The White House has indicated that it could work with Congress later on some alternative, according to the New York Times.

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