Archive for September, 2010

Analysts see clog in foreclosure pipeline improve, but more delinquencies coming

Monday, September 13th, 2010 at 5:58 am  
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Research by Bank of America Merrill Lynch indicates what many REO brokers and agents already know — seriously delinquent mortgages continue to take more time to enter REO status.

A commonly used metric of mortgage performance is called the “roll rate.” It measures the transition, on a percentage basis, from one delinquency bucket to another, over a period of time. BofA Merrill Lynch said the number of mortgages that transferred from the bucket of current loans to “worse” (less than 30 days late), and loans more than 30 days delinquent, are continually on the rise, according to the graph below (click to expand):

But once those loans are more than 60 days delinquent, the roll rate from foreclosure to REO/liquidation status is at the lowest level since at least 2003, as seen in the chart below:

The problem, the analysts wrote, is that loans in foreclosure are less likely to go into REO or liquidation because servicers are facing difficulties disposing of assets in their portfolios.

While monumental efforts to prevent foreclosures are under way through government intervention, mortgage modifications, workout plans and nonforeclosure home forfeitures, the clogged foreclosure pipeline is only going to get more congested. During the past three months, the analysts said 70% of loans in the 60-day delinquency bucket move to a worse delinquency bucket, while on 15% go back into an improved status.

The clog in the pipe seems to be the 90-days-plus delinquent bucket. According to the research, 85% of mortgages that are 90 days or more delinquent stay in that category, rather than roll into the foreclosure, REO or liquidation buckets.

That trend has only recently begun to improve, with slight increases in the roll rate from delinquency to REO, albeit from the recent extremely low levels, the analysts wrote.

Write to Austin Kilgore.

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Foreclosure Question? Is this legit?

Saturday, September 11th, 2010 at 4:27 pm  
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Hi, i’m looking at foreclosures for my parents and I came upon this 4br 2ba house..

This property is an REO (Real Estate Owned). This is the final step in the foreclosure process. Ownership has reverted to the lender. This 1669 square foot property has 4 bedroom(s) and 2 bath(s). The estimated sale price is $38910. To access more extensive information on this property click the ‘more property detail’ link below. You will need to register for full access. Information listed with each property including estimated loan balance is derived from sources deemed accurate but we do not guarantee the accuracy of such information. Please consult all relevant title documents prior to purchase.

Is this the ACTUAL price? The thing is, we actually have that much CASH in hand too.
sorry if this is a stupid question, i’m not too sure about this stuff. just tryna help my parents out

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Clogged foreclosure pipeline may lead to DJSP layoffs

Saturday, September 11th, 2010 at 5:56 am  
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The clogged foreclosure pipeline is delaying new foreclosure filings, and Florida-based processing services firm DJSP Enterprises said it’s considering layoffs to deal with the decreased business.

DJSP Enterprises’ main client is The Law Offices of David J. Stern, P.A. (DJSPA). In the DJSP Enterprises second quarter 2010 and mid-year earnings report released this week, the company said a slow down in new foreclosure filings will likely necessitate cost cutting and personnel layoffs. The company said it initially believed file volume would increase in the third quarter, leading to the decision to maintain current staffing levels. However, file volumes continue to be delayed and existing staffing levels are not sustainable indefinitely, the report said.

“While a large portion of our business can only be processed with human capital, we are identifying opportunities where technology and process change can be implemented to create efficiency,” recently-appointed DJSPA President and COO Richard “Rick” Powers said in the financial statement. “We are prepared to create efficiencies and make cuts where appropriate over the next three to six months.”

The disclosure came as DJSP Enterprises reported its adjusted net income for the first half of 2010 decreased to $7.8 million from $15.8 million compared to the first half of 2009.

Total revenue was $56.1 million during 2Q10, down 9.1% from $61.7 million in 2Q09. Total revenue excluding client costs was $28.9 million, down 6.5% from $30.9 million during the same period one year ago.

For the first half of the year, total revenue was up 9.3% to $127.7 million, but excluding client costs, total revenue was down 2.1% to $59.7 million.

The decline in revenue was primarily due to a decrease in foreclosure referrals, title fees, and client reimbursed costs, DJSP said. Title fees decreased due to the decrease in foreclosure volume and the switch made by some clients to use their own title company, the report added.

The decline was partially offset by increases in REO closings and liquidation operations in DJSP’s default servicing division and eviction fee revenue. REO closing revenue increased to $3.5 million from $2.1 million. DJSP Enterprises’ REO liquidation services that it provides to DJSPA contributed $3.2 million in revenue in the 2Q10, compared to $2.9 million in the same quarter last year.

Write to Austin Kilgore.

View full post on News | REO Insider

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Federal Home Loan Bank to hold foreclosure prevention workshop, Fannie opens help center

Friday, September 10th, 2010 at 11:55 am  
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In response to the number of home foreclosures in the Tucson, Ariz., area, the Federal Home Loan Bank of San Francisco and the Pima County Foreclosure Prevention Coalition will host a foreclosure prevention workshop Sept. 13 to assist homeowners facing foreclosure.

The workshop will include a panel discussion on how to identify mortgage scams, the tax impact of short sales, understanding the foreclosure process and alternative resolutions.

Housing counselors and lender/servicers will be available for one-on-one consultations with homeowners, who are encouraged to bring loan documents and relevant financial information.

In related news, Fannie Mae will host an open house event at its Atlanta mortgage help center to bring together counseling and mortgage industry partners to emphasize foreclosure prevention and highlight help that is available.

Fannie Mae’s new facility provides Atlanta area homeowners who have a Fannie Mae loan and may be at risk of foreclosure, the opportunity to meet directly with on-site staff and experienced housing advisers to discuss their mortgage situation.

The  face-to-face meetings help borrowers better understand the entire range of foreclosure prevention options and provide an opportunity to work closely with servicers to achieve a prompt resolution.

Write to Kerry Curry.

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Foreclosure help needed, expert advice appreciated?

Wednesday, September 8th, 2010 at 10:30 am  
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My husband and I have found a home that is in foreclosure status (per our agents MLS). We’re first time buyers and are new to this (sorry if I sound ignorant in any of this). We have to get pre-qualified through Countrywide first (we are applying this week) then were told we can get the funds through any outside source once were pre-qualified with them first. Here’s my questions
1. I have heard that dealing with foreclosures can be a way longer process than dealing with owners, is that true? and why if almost 50% of homes for sale now in Southern California are foreclosures now?

2. Can we negotiate at all or are they dead set at the listing price?

3. Can we ask for help paying closing costs if not all?

4. If we get approved and everythings a go, how long before we get the keys, (the people still live there) do they get a 30 day notice to vacate?

5. On the mls it says “in-forclosure” does that mean its bank owned or REO now or is a “pre” foreclosure? I heard those are better and give more room to negotiate price and other things..

Thanks so much in advance!!! I’ve googled alot of this but get biased advice and don’t know who to believe anymore… I just want straight up real answers from nobody involved… Thanks

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    How much can you negotiate with the bank on a property that will be soon a foreclosure?

    Tuesday, September 7th, 2010 at 4:28 pm  
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    I see many houses on-line where they ask you to make an offer before they get foreclosed on but their listing price is often higher than of the comarables…what is the deal? and if they actually get foreclosed on, how much can you negotiate with the bank, let’s say on a house that is currently listed for 500k? From what I red online the bank will try to recoup the amount of the loans secured by that property, but usually those loans total more than the house is worth on today’s market…I am trying to find out, if anybody knows, how much of a price reduction I could get buying an REO or a foreclosed property.

    thank you!

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    Understand Foreclosure Lingo Before Purchasing an Arizona Foreclosure Property

    Sunday, September 5th, 2010 at 4:26 pm  
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    Arizona foreclosure listings will provide you with area properties which are

    in foreclosure. However, did you realize that there are several stages to

    foreclosure, and each stage has its own separate rules to follow. The

    world of foreclosures has its own language, in this article we will attempt to

    discuss the words most commonly used when dealing with foreclosures

    and foreclosure listings.

    Preforeclosure – This is the initial stage of foreclosure. At this point in the

    foreclosure process the home or property owner has defaulted or fallen

    behind on payments. At this point, the homeowner can be approached in

    an attempt to conduct a sale. An independent appraisal, viewing of the

    property as well as inspections can be easily arranged. Many times a

    distressed homeowner will be very open and cooperative as the

    homeowner is attempting to avoid the negative affect of a foreclosure on

    his credit rating.

    Auction or Trustee Sale ¨C The lender is attempting to sell the property via

    auction. Buyer beware, many times the property is not open for viewing,

    independent appraisals nor inspections. Additionally, properties sold at

    auction or a trustee sale must be purchased with cash only. At times the

    homewoner has refused to leave the property also causing additional grief

    for the new owner. A redemption period may also be attached to a

    property in the auction or trustee phase of foreclosure. Auctions may be

    the place to get a good deal, however, it does not come without risks.

    Redemption Period ¨C This is a time period afforded to homeowners

    following the sale of their property at a auction. During this time, the

    homeowner is allowed to secure funds or other financing to maintain

    ownership of their home prior to relinquishing residency and legal

    ownership.

    REO or Real Estate Owned – REO properties are properties which were

    placed on the auction block, however, did not have a winning bidder.

    These properties are then returned to the lender who will take on the

    responsibility to sell the property or have a real estate agent sell the

    property.

    Arizona foreclosure listings should give you accurate, timely information and

    should inform you of which stage of foreclosure the property is residing.

    Bob Smith regularly writes for E-ForeclosureSearch. If you want more information on Arizona Foreclosure Listings and other real estate- related topics, you can visit www.e-foreclosuresearch.com/.


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    Foreclosure Overview & the Foreclosure Process

    Saturday, September 4th, 2010 at 4:26 pm  
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    A foreclosure is a legal proceeding taken by a bank or mortgage lender against a homeowner who has defaulted on their mortgage loan.  There are several steps in the foreclosure process; pre-foreclosure, auction, and bank owned.  It is possible to buy homes during each of these foreclosure steps if you know where to find them and who to contact.  A pre-foreclosure is just what it sounds, the time period between when the bank decides to foreclose on a property and when the actual foreclosure takes place.  When the bank decides to foreclose on a home, it is required to notify the homeowner of their intent.  The notification that is sent is called a Notice of Default (NOD) or a LIS Pendens.  The NOD or LIS also has to be filed with the County Recorder’s Office.  The bank is not allowed to release this information to investors, however, but investors are more than welcome to search the records at the Recorder’s Office and find out who is in pre-foreclosure.  Investors will then contact the homeowner and try to strike a deal with them to purchase their property before it is actually foreclosed on.  These deals are typically attractive to a homeowner because they want to avoid having a foreclosure on their credit.  Once the foreclosure proceedings have begun, a Notice of Foreclosure Sale (NFS) and/or a Notice of Trustee’s Sale (NTS) will be filed.  These filings will announce a foreclosed home that will be sold at auction.  A property auction is an event in which the public can place bids on a home that has been foreclosed on, or otherwise removed from the former homeowners.  The winning bidder is then obligated to purchase the home and becomes the new owner.  Finding foreclosure homes online is a great way to buy a house for significantly less than its value.  A bank owned, or Real Estate Owned (REO) property is one that has already gone through the foreclosure process and is now wholly owned by the lender.  Lenders will then decide to either sell the property at auction or sell it outright, often for just the amount that is owed on the home.  There have been instances where a buyer can pick up an REO house for just a few thousand dollars.  The bank just wants the money that they lost in the last deal and be done with it.  They have no interest in keeping property; that is not their business. Buying homes in foreclosure, or after foreclosure, can save you tons of money.  The average savings on a foreclosure home that is purchased is about 30% lower than the market value of the home.  Putting that into perspective, you can expect to buy a $200,000 foreclosure home for only $140,000.  That’s average, many people save much more than that on foreclosures.  You can search all kinds of foreclosure homes in your area online.  Maybe you will be able to pick up a nice foreclosure property for investment or to move into.

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      Pre Foreclosure

      Friday, September 3rd, 2010 at 10:24 pm  
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      www.BankREOProfits.com Pre Foreclosure Investing is Great BUT – Bank REO property is being given away at HUGE discounts! Buy bank foreclosures from the source! Learn how here…

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      Fed’s Rosengren: Consider community needs in solving foreclosure crisis

      Thursday, September 2nd, 2010 at 11:56 pm  
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      The nation has spent too little time on community problems that have arisen from the country’s housing crisis, the CEO of the Boston Federal Reserve said at a national summit about REO and vacant property issues.

      “Rather than treating the symptom — the high REO problem — we need to better understand how to resolve the more general problems in communities that lead to higher concentrations of REOs and exacerbate the effects of high REOs,” said Eric Rosengren, president and CEO of the Federal Reserve Bank of Boston.

      Rosenberg made his comments during a two-day Federal Reserve summit that began Tuesday in Washington.

      “Do we need more holistic approaches to addressing this crisis? Should there be more state and federal revenue sharing focused on providing flexible funds to the communities most affected?  My answer to both of these questions is a yes. But I would also argue that we need to not only explore alternative solutions, but also do a much better job of establishing which solutions work.”

      It’s important to consider how the foreclosure problem should be framed, he said, bringing forth three different existing views among housing and policy experts:

      1. If it is “a foreclosure and REO problem rooted in the housing bubble, the solutions will tend to emphasize mitigating the foreclosure problem or accelerating the disposition of REO properties,” Rosenberg said.

      2. If it’s defined as a housing problem, then the country “might focus on solutions that result in sustainable home ownership … focusing on financial education, addressing predatory home financing and redefining appropriate underwriting standards.”

      3. If viewed through the community lens, issues such as code enforcement, unemployment and crime must be addressed in neighborhoods disproportionately affected by foreclosures.

      The current crisis, Rosenberg said, contains elements of all three frameworks. “This is a foreclosure problem. This is a housing problem. This is a community problem,” he said.

      Not surprisingly, New England ZIP codes with a high concentrations of REO properties have suffered larger declines in home prices than ZIP codes with lower REO concentrations, he said. Communities that faced challenges before the foreclosure crisis made them more likely to suffer disproportionately the consequences of the crisis, Rosenberg noted. (Click chart to expand view.)

      ZIP codes with four or more REOs per square mile have higher property crime rates, higher rates of low birth-weight babies, higher unemployment rates, weaker small business activity and higher school dropout rates.

      “This is not a one-size-fits-all foreclosure or housing problem; these are community problems,” he said.

      Rosenberg said he’s encouraging the Boston Fed to look at how REOs can exacerbate problems in troubled communities look for solutions to address these neighborhood issues.

      Write to Kerry Curry.

      View full post on News | REO Insider

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