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You Hear a lot about the Case-Shiller Report….Here it is

June 28, 2011 1 comment

Indications are building that home prices are beginning to recover, the latest is Case-Shiller data for April that show no change in its adjusted composite index of 10 major metropolitan areas. Case-Shiller data are three-month moving averages which indicate actual gains for April given contraction in prior months. There’s still a lot of cities showing negatives but many areas out West, where some of the heaviest of the price contraction hit, are now moving into positive ground including LA and San Francisco. Year-on-year, however, the contraction is deepening, to minus 3.1 percent though this reading is compared against stimulus-boosted sales a year ago

Unadjusted readings are very positive though seasonality plays a big part in the housing market which benefits from warm weather. The unadjusted composite 10 index is up 0.8 percent in the month though the year-on-year rate remains negative at minus 3.1 percent (the same reading as the adjusted rate).

Today’s report falls in line with recent price indications in both the existing and new home sales reports. Housing data tomorrow will be highlighted by pending home sales which the National Association of Realtors has already promised will be very strong.

Definition
The S&P/Case-Shiller home price index tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S. The composite indexes and the regional indexes are seen by the markets as measuring changes in existing home prices and are based on single-family home resales. The key composite series are for the longer-running, original 10-city composite series and the newer and expanded 20-city composite. A national index is published quarterly. The indexes are based on single-family dwellings with two or more sales transactions. Condominiums and co-ops are excluded as is new construction. The data are compiled for S&P by Fiserv, Inc. The S&P/Case-Shiller Home Price Indices are published monthly on the last Tuesday of each month at 9:00 AM ET. The latest data are reported with a two-month lag. For example data released in January 2008 were for November 2007.

[Chart]

 

Dave & David Warner
 

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Weekly Primary Mortgage Rates

December 2, 2010 Leave a comment
December 2, 2010 30-Yr FRM 15-Yr FRM 5/1-Yr ARM 1-Yr ARM
Average Rates 4.46 % 3.81 % 3.49 % 3.25 %
Fees & Points 0.8 0.7 0.6

From Freddie Mac

Calif. homes as affordable as ever

October 19, 2010 Leave a comment

Calif. homes as affordable as ever

October 16th, 2010, 1:00 am · 217 Comments · posted by Jeff Collins

Leslie Appleton-Young, the chief economist for the California Association of Realtors, has forecast that California home prices will rise by 13.5% by 2012, but that sales will drop 10% this year and only rise 2% in 2011.

In an interview with the Register, she discusses the housing outlook for the rest of 2010 and for 2011, saying that government stimulus has run its course and that foreclosures are about to tick up. She also says that based on historical standards, California homes are as affordable as they’ll ever be

Us: Your 2011 forecast states that “a weaker-than expected economic recovery” will result in a 10% sales drop this year. Last spring, it looked like housing was getting back on its feet. What happened?

Leslie: First of all, sales in 2009 were boosted by the spillover of the foreclosure wave that began in 2008 as well as the federal tax credits that were in effect throughout the year.

By contrast, 2010 saw a more moderate – but still elevated – flow of distressed properties and the tax credits were in effect for just half of the year. So we knew sales would be lower in 2010 compared to 2009, but the decline so far in the second half of 2010 has been greater than we had anticipated.

As the impact of the federal stimulus and homebuyer tax credits have waned, it is now left to the private sector to provide momentum for the economic recovery. Unfortunately, concerns about weak consumer demand coupled with uncertainty about future policy initiatives as well as the overall direction of the economy are keeping most sectors in a holding pattern, waiting for clearer signs that the recovery has traction.

Consumer balance sheets have eroded, credit scores are damaged and consumer confidence is weak. In this environment, despite the availability of low rate mortgages and well priced houses, California home sales are lagging 2009.

Us: You’re forecasting higher prices but slower sales in the state. Do you foresee the same trend for Orange County?

Leslie: Yes – although it depends on what price category you are addressing.

For example, the median price of existing single family homes in Orange County is up 18.1% since the trough in January 2009 and off 33.1% from the April 2007 peak of $747,260. What the aggregate countywide data fail to show is the fact that investors and first time buyers have been active in the moderate to low-end distressed market because the values have been extraordinary – those markets have seen the strongest price gains from market lows. At the upper end prices have been adjusting downward but at a much slower pace.

Us: Why do you think it’s going to take to 2013 or 2015 for the housing market to get back to “normal?”

Leslie: First, normal for the California housing market does not look like 2002-2006. The financing options and home equity lines of credit that drove sales during that period are not driving the market today.

Second, it’s important to recognize that the fundamentals of the housing market are attractive right now but many consumers are only beginning the journey to recover from foreclosure and/or negative equity.

They simply do not have adequate savings for a down payment, may have significant credit issues, are concerned with the job security and/or may believe that prices will soften further in the year ahead. These are the factors that are keeping them on the sidelines.

For households with cash, the advantages of investing in real estate are clear and they are actively buying investment properties in California and states like Arizona and Texas.

Us: More than 420,000 California homes have been lost to foreclosure in the last 2 1/2 years. Can’t anything be done to keep the remaining underwater homeowners from losing their homes?

Leslie: While a number of ambitious proposals have been put forward, given the current budget squeeze at both the state and national level, it is unlikely that a blanket forgiveness of mortgage debt is in the cards.

Although in California the BofA moratorium on foreclosures will delay their process for the foreseeable future, the reality is that households in foreclosure cannot afford to make the payments on the homes they are living in. The faster lenders can move through the inventory of delinquent properties the faster the market will return to some semblance of stability.

Us: You said also that lenders will accelerate foreclosures in 2011. How come?

Leslie: Over the last three months there has been an increase in both foreclosure sales and the inventory of REO’s, and a reduction in the number of cancellations of scheduled trustee sales. Thus it would appear that lenders are beginning to pick up the pace of these proceedings, perhaps a reflection of their stronger balance sheets and increased staffing levels.

Us: Many now say that homebuyer tax credits merely shifted demand forward, but didn’t increase home sales. Were tax credits a bad idea?

Leslie: At the time they were approved, the need to stabilize the housing market was viewed, at both the state and a national level, as a key component of driving economic growth.

We surveyed homebuyers earlier this year on the impact of the federal credit and found nearly 40% of first-time homebuyers said they would not have purchased a home if the federal tax credit for first-time homebuyers was not available.

The state tax credit was also a financial incentive, providing a credit against taxes owed over a three–year period.

Us: What impact do you believe the state’s latest $200 million in tax credits had?

Leslie: They did provide both a financial incentive and a sense of urgency into the housing market, both of which were seen as necessary to create momentum and push the market forward.

They probably did more for the new home market than the much larger existing home market. They achieved their goal in the short term, but it is clear that a more long-lasting recovery is dependent of growth in the overall economy, not specific stimulus to the housing market per se.

Us: Some argue that homes still aren’t affordable for middle-income families. Will home prices drop further or do the price-income fundamentals no longer apply in California?

Leslie: In the distressed market, and for homes under $500,000, a second period of decline in prices seems unlikely. Currently the inventory of homes priced under $300,000 is 4.0 months and under $500,000 is 5.4, both below the normal market range of a 6-7 month supply of homes on the market.

At the high end, for homes over $1 million there is an 11.3 month inventory. So, in short, the market looks very different depending on whether you are looking at upper end homes or moderate and lower priced homes.  The mantra that all real estate is local has never been more true that today.

More generally, California home prices have been higher than national home prices for decades. Whereas the home-price-to income-ratio nationally is about 3-to-1, the ratio in California has averaged 6-to-1 for the past 30 years, reaching a high of 10-to-1 during the middle of the last decade, but never falling below 4-to-1, either in this cycle or in the 1990s.

In a way, our experience in the middle of the last decade tells us that price-income fundamentals always apply. It was the high price-income ratio that prompted so many Californians who wanted to become homeowners to seek the risky, poorly underwritten loans that triggered the crisis we are now working through.

People must pay a premium for being homeowners in California, and households are clearly willing to pay that price. With the price-to-income ratio in California below average at about 5-to-1 in 2010 and in 2011, this is a rare (once-in-a-generation) situation where California homes are as affordable as they will ever be.

Us: What is the longer term outlook for housing?

Leslie: To be clear, we aren’t building enough new homes in California today to meet the demographic “demand.”

Households are doubling and tripling up to make it through the downturn, but once growth returns and consumers are confident about their job stability, expect to see the aggregate demand for housing to return.

Not to the go-go days of the boom, but to the long-term trend reflecting household, job and income growth. In short, these longer term factors will signal a recovery but only as the structural issues facing consumers and financial institutions are resolved.

Lansner on Real Estate ~ The latest news about the housing market from the Orange County Register's Jon Lansner and Jeff Collins.

BofA halts foreclosure sales in 50 states

October 8, 2010 Leave a comment

Bank of America halts foreclosure sales in 50 states amid expanding furor over document errors.

Alan Zibel, AP Real Estate Writer, On Friday October 8, 2010, 12:41 pm

WASHINGTON (AP) — Potential flaws in foreclosure documents are threatening to throw the real estate industry into a full-blown crisis, as Bank of America on Friday became the first bank to stop sales of foreclosed homes in all 50 states.

The move, along with another decision on foreclosures by PNC Financial Services Inc., adds to growing concerns that mortgage lenders have been evicting homeowners using flawed court papers.

Charlotte, N.C.-based Bank of America Corp., the nation’s largest bank, said Friday it would stop sales of foreclosed homes in all 50 states as it reviews potential flaws in foreclosure documents. A week earlier, the company had said it would only stop such sales in the 23 states where foreclosures must be approved by a judge.

“We will stop foreclosure sales until our assessment has been satisfactorily completed,” company spokesman Dan Frahm said in a statement. “Our ongoing assessment shows the basis for our past foreclosure decisions is accurate.”

State and federal officials have been ramping up pressure on the mortgage industry over worries about potential legal violations amid growing evidence that mortgage company employees or their lawyers signed documents in foreclosure cases without verifying the information in them.

A document obtained last week by the Associated Press showed a Bank of America official acknowledging in a legal proceeding that she signed thousands of foreclosure documents a month and typically didn’t read them. The official, Renee Hertzler, said in a February deposition that she signed 7,000 to 8,000 foreclosure documents a month.

Earlier in the week, Senate Majority Leader Harry Reid, D-Nev., urged five large mortgage lenders to suspend foreclosures in Nevada until they have set up systems to make sure homeowners aren’t “improperly directed into foreclosure proceedings.” Nevada is not among the states where banks had suspended foreclosures.

Also Friday, PNC Financial Services Group Inc. said it is halting most foreclosures and evictions in 23 states for a month so it can review whether documents it submitted to courts complied with state laws. An official at the Pittsburgh-based bank confirmed the decision on Friday, which was reported earlier by the New York Times. The official requested anonymity because the decision hasn’t been publicly announced.

PNC becomes the fourth major U.S. lender to halt some foreclosures amid evidence that mortgage company employees or their lawyers signed documents in foreclosure cases without verifying the information in them.

In addition to PNC and Bank of America, Ally Financial’s GMAC Mortgage unit and JPMorgan Chase & Co. have announced similar moves in the past two weeks.

In some states, lenders can foreclose quickly on delinquent mortgage borrowers. By contrast, the 23 states use a lengthy court process. They require documents to verify information on the mortgage, including who owns it.

The End of the Social Media Adoption Road | Geoff Livingston’s Blog

October 5, 2010 1 comment

Thank you Robert Watson’s Blog

Interesting read

The End of the Social Media Adoption Road | Geoff Livingston’s Blog

Bank of America Halts Foreclosures in 23 States

October 1, 2010 Leave a comment

An Official at Bank of America Acknowledged She Signed Up to 8,000 Foreclosure Docs a Month and Typically Didn’t Read Them.

(CBS/AP) Updated at 5:30 p.m. ET

Bank of America will halt foreclosures in 23 states because of document problems. A Bank of America official acknowledges in a legal proceeding that she signed up to 8,000 foreclosure documents a month and typically didn’t read them.

The executive’s admission adds the nation’s largest bank to a growing list of mortgage companies whose employees signed documents in foreclosure cases without verifying the information in them.

Two other companies, Ally Financial Inc.’s GMAC Mortgage unit and JPMorgan Chase, have halted tens of thousands of foreclosure cases after similar problems became public.

Foreclosure Shortcuts May Delay Housing Recovery

The Bank of America executive said in a February deposition in a Massachusetts bankruptcy case that she signed 7,000 to 8,000 foreclosure documents a month.

“I typically don’t read them because of the volume that we sign,” the executive said.

In statement, Bank of America said, “We have been assessing our existing processes. To be certain affidavits have followed the correct procedures, Bank of America will delay the process in order to amend all affidavits in foreclosure cases that have not yet gone to judgment in the 23 states where courts have jurisdiction over foreclosures.”

The disclosure comes two days after JPMorgan said it would temporarily stop foreclosing on more than 50,000 homes so it can review documents that might contain errors. Last week, GMAC halted certain evictions and sales of foreclosed homes in 23 states to review those cases after finding procedural errors in some foreclosure affidavits.

After GMAC’s announcement, state attorneys general in California and Connecticut told the company to stop foreclosures until it proves it’s complying with their state laws. The Ohio attorney general this week asked judges to review GMAC foreclosure cases.

And in Florida, the state attorney general is investigating four law firms, two with ties to GMAC, for allegedly providing fraudulent documents in foreclosure cases.

In some states, lenders can foreclose quickly on delinquent mortgage borrowers. But 23 states use a lengthy court process for foreclosures. They require documents to verify information on the mortgage, including who owns it. Florida, New York, New Jersey and Illinois are the biggest states with this process.

Congress Holds High End Mortgage Limits at $730,000

September 30, 2010 Leave a comment

Congress has extended a policy that allows homeowners in pricey real estate markets to secure government-backed mortgage of nearly $730,000.

Fuse | Getty Images

Lawmakers have voted to keep the maximum size of loans guaranteed byFannie Mae and Freddie Mac and the Federal Housing Administrationat the current level through the end of 2011.

Those limits apply in expensive areas like New York and San Francisco. Without the change, the limits would have fallen to about $625,000.

The limit was $417,000 before 2008 and remains at that level in most of the country.

The measure was included in a temporary spending bill that lawmakers sent to President Barack Obama early Thursday.

Mike Harper
Private Mortgage Banker

949.661.1161 Tel