Massachusetts Home Buyer Guide

Massachusetts Q3 Foreclosures Increase, YTD Decline

Lenders started and completed more foreclosures in Massachusetts during the third quarter than Q2, but foreclosures have declined nearly 30 percent compared to Q3 2008, The Warren Group reported October 20, 2009.

A total of 2,048 foreclosure deeds were recorded from July through September 2009, a 3.9 percent increase from the 1,971 in the second quarter of 2009; however, foreclosures dropped 29.4 percent from 2,903 in the third quarter of 2008. There were 702 foreclosures in September, a 6.7 percent increased from 658 in August and down 12.1 percent from 799 in September 2008. Year-to-date foreclosure deeds fell 29.5 percent to 6,778 from 9,610 the prior year.

For more details, get the latest Massachusetts foreclosure news from MassForeclosed.com.

Massachusetts Short Sales 101

The following video contains a basic tutorial on short sales in Massachusetts. It is presented by my business partner, Dave Kres. Many short sales are in pre-foreclosure status, and completing a short-sale transaction typically takes from two to six months. Buying a short sale requires a great deal of patience.

Dave Kres On The Banker & Tradesman Podcast

My business partner Dave Kres, who also is the president of the North Shore Association of REALTORS®, was interviewed for the Banker & Tradesman podcast on September 30, 2009. He discusses the Massachusetts real estate market. Use the link below to listen.

http://www.bankerandtradesman.com/files/the_closing/theclosing093009.mp3

Foreclosure News And MA Foreclosure Listings

Just a reminder that the latest foreclosure news and access to free foreclosure listings in Massachusetts are available at MassForeclosed.com.

Wealthy Suburbs Not Immune To Foreclosures

A Boston Business Journal report on NECN August 10, 2009 reveals that tony suburbs around Greater Boston cannot escape the foreclosure crisis.

The data comes from The Warren Group.

Court Ruling Halts Many MA Foreclosure Sales

A Springfield, MA Land Court judge's recent ruling has resulted in many sales of bank-owned properties being halted.

The judge ruled that due to improper paperwork two banks improperly foreclosed on two Springfield-area homes; therefore, the title to these properties is "clouded" or defective.

The decision effects the sale of many bank-owned properties in Massachusetts. It has effected one transaction of mine.

Read more about this at MassForeclosed.com.

Details Of The Foreclosure Prevention Plan

The $75 billion foreclosure prevention plan, which the Obama administration calls the "Making Home Affordable" initiative, runs through 2012.

Here are some highlights:

• Mortgages for single-family properties that are worth more than $729,750 are excluded.

• Interest rates can be lowered to as low as 2 percent, and then, if necessary, the term of the loan can be extended to a maximum of 40 years.

• The home must be a primary residence (verified with tax return, credit report, and other documentation such as a utility bill). The home may not be investor-owned.

• The home may not be vacant or condemned.

• Borrowers must provide their most recent tax return and two pay stubs, as well as an "affidavit of financial hardship" to qualify.

• Borrowers in bankruptcy are not automatically eliminated from consideration for a modification.

• Borrowers in active litigation regarding the mortgage loan can qualify for a modification without waiving their legal rights.

• Borrowers are only allowed to have their loans modified once, and the program only applies for loans made on or before Jan. 1, 2009.

• Incentives are provided to extinguish second liens on loans modified under the program.

• Homeowners are eligible for up to $1,000 of principal reduction payments each year for up to five years.

• Separately, up to 5 million borrowers who have mortgages held by government controlled mortgage finance giants Fannie Mae and Freddie Mac should be eligible to refinance through June 2010, even if they owe more than the value of their home.

Source: Boston.com and FinancialStability.gov

Check out the U.S. Housing And Urban Development Guide To Avoiding Foreclosure

Massachusetts Homeowners May Benefit From $75 Billion Foreclosure Prevention Plan

The following video from NECN discusses what it means to be "underwater" on your mortgage. It also briefly mentions the Obama Administrations $75 billion foreclosure prevention proposal.

Read the U.S. Department of The Treasury fact sheet

Foreclosure News And Listings

Foreclosed homes and short sales continue to have a major impact on the real estate market around the country and Massachusetts.

MassForeclosed.com provides the latest national, regional and local foreclosure news and absolutely free foreclosure listings. 

MA Legislation Would Require Loan Modifications

Legislation filed in Massachusetts would require  lenders to modify home loans in certain circumstances, the Boston Business Journal reported January 27, 2009. 

The legislation named, An Act to Require Commercially Reasonable Efforts to Avoid Foreclosure, was filed by Massachusetts Attorney General Martha Coakley, with Senator Susan Tucker and Representative Steven Walsh, would mandate loan modifications in certain circumstances.  

Specifically, the legislation requires that creditors take commercially reasonable efforts to avoid foreclosure upon mortgage loans securing homes that are owner-occupied.  This would apply only to loans on principal residences, and to loans with certain risky features, such as interest-only loans, adjustable rate mortgages, and loans with short-term, introductory interest rates.  The legislation also provides a "safe harbor" for creditors to comply with this requirement of commercial reasonableness. 

A violation of this legislation will constitute a violation of Massachusetts General Law Chapter 93A, which is the Massachusetts Consumer Protection Act. 

This really is an amazing piece of legislation. State government is now forcing private businesses to operate their business a certain way and mandating those businesses to make certain business decisions. 

Foreclosure Listings Absolutely Free

Read The Boston Business Journal Article

Read Attorney General Coakley's Press Release

Summary of the Legislation Filed

Full Text of the Legislation Filed

Another Multi-auction Event; Buyers Beware

The Boston Herald reported January 25, 2009 that a Dallas-based auctioneer, Hudson & Marshall, will auction off more than 100 bank-owned Massachusetts properties at the Boston Quincy Marriott Saturday January 31, 2009.

Another 28 Western Massachusetts properties will be sold January 27, 2009 at the Sheraton in Springfield, MA.

Successful bidders must make a $5,000 deposit in cash, cashier’s check or certified funds for each property. The article did not mention it, but I suspect the deposit is not refundable. All properties are sold "as is."

"Evelyn Friedman, director of [Boston's] Department of Neighborhood Development, warned that some properties sold at such massive auctions have title problems."

I really don't recommend these auctions for first-time home buyers, and all buyers should be very careful about what they sign.

Read my previous post about some other multi-property auctions in Massachusetts over the last 18 months. Some successful bidders may still be waiting to move in. 

Read The Boston Herald Article

New Rules For Appraisers

Federal and state regulators announced an agreement to regulate home appraisal practices as part of an agreement with mortgage finance companies Fannie Mae and Freddie Mac, the Everett, Washington Herald reported January 4, 2009.

Many complaints of problems with inflated appraisals and their impact on the nation's housing market led New York Attorney General Andrew Cuomo to reach an initial pact in March 2008 with Fannie Mae and Freddie Mac on a plan to try to reform the industry.

The original changes, however, brought complaints from bank regulators and mortgage industry officials, who said Cuomo was overstepping his authority and said the law would harm the mortgage industry.

Fannie Mae and Freddie Mac, federal government-controlled companies, own or guarantee the majority new U.S. home loans and have become more dominant in the mortgage industry since the collapse of dozens of lenders that catered to borrowers with poor credit. Any changes made by the two companies affect the entire lending industry.

The new agreement is effective May 1 and requires appraisers to abide by a six-page code of conduct that includes new rules for appraisers who work for the same companies as lenders. A prior version of the agreement banned "in-house" appraisals, but that apparently was excluded from the final pact. 

Read The Everett, Washington Herald Article

U.S. Foreclosures Rise 81 Percent

RealtyTrac, a company that sells foreclosure data to consumers, reported that there were more than three million various foreclosure filings (default notices, auction sale notices and bank repossessions) in 2008 on 2,330,483 U.S. properties, an 81 percent increase in total properties from 2007 and a 225 percent increase in total properties from 2006.

Nevada, California, Arizona, Florida, Michigan and Ohio were among the states hit hardest by the foreclosure crisis in 2008.

MassForeclosed.com has more information on the latest foreclosure numbers.

The latest Massachusetts foreclosure listings are available for free at MassForeclosed.com.

Hotline To Help Avoid Foreclosure

If you are currently having, or anticipate having, difficulty making the payments on your mortgage, or have recently received a foreclosure notice, you should contact the HOPE Hotline at (888) 995-HOPE (4673), or visit www.995hope.org. Counselors on the HOPE Hotline are available 24 hours a day.

Foreclosures Not Necessarily Bargains

Many home buyers have been convinced that bank-owned properties or short sales are the best bargains.

It's just not true.

Bank-owned properties, sometimes referred to as real-estate owned (REO), typically need a substantial amount of work. Most people think that work means fresh paint and new carpets, not exactly. These properties have a lot of deferred maintenance and many times have been damaged by the last owners.

Sometimes pipes freeze and there is water damage. Other times the properties have been broken into by vandals. Damaged walls and ceilings are not uncommon. Fixtures are often missing. 

For those individuals willing to do major rehab, many bank-owned properties have the potential of providing a good return on investment; however, buyers need to have cash or a rehab loan to make the repairs and upgrades. The best deal in the world is not any good, if you don't have the cash to make repairs and upgrades. 

An article on Boston.com explains some of the pitfalls of attempting to purchase short sales. A short sale refers to a property where the sellers still own the property, but they can't sell it for enough money to pay off the mortgage(s) and costs of sale.

"Buying a listing that's subject to lender approval requires patience on the part of the buyers, sellers and their agents. It can take three to four months to get an answer. There's no guarantee that a short-sale offer will be approved, and it's not uncommon for lenders to reject a purchase offer without giving a reason why."

Many buyers choose to walk away after a couple of months of waiting for a lender response.

In the current market, there are plenty of good deals, without the hassles of a REO or a short sale.

The photo above was taken inside a bank-owned multi-family property.

Read The Inman News Article on Boston.com