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Foreclosure slowdown pushing home prices higher

Joe Klamar / AFP – Getty Images

The Goldrush estates are seen in Las Vegas, which has long had the dubious distinction of being America’s foreclosure capital. As foreclosures decline, home prices are slowly rising in many markets.

Home buyers looking for bargains on foreclosed houses are having a harder time finding them.

When the housing market crashed in 2007, a wave of foreclosures accelerated the plunge in prices, which lopped roughly a third off the median price of a home.

Now with the pace of new foreclosures slowing, mortgage rates falling and home sales perking up, those once-in-a-lifetime bargains are fading from the market.

“Deeply discounted existing homes have been subject to strong demand from cash buyers and investors looking to lock into housing’s attractive income returns,” said Paul Diggle, a housing economist at Capital Economics, in a recent research note. “The supply of such homes, meanwhile, has been dwindling. That has bid up existing house prices, particularly at the lower end of the price spectrum.”

Nationwide, the median price of a new home was up by 17 percent in August compared to a year ago. For existing homes, the median price was 9.5 percent higher. 

During the depths of the housing bust, markets under the greatest price pressure had the highest concentrations of “distressed” sales. Those include bank-owned homes seized in foreclosures and “short sales,” in which lenders allow underwater homeowners to sell their home for less than the outstanding mortgage balance.

These distressed properties sold at deep discounts to the “normal” market. But as the backlog of foreclosures has eased, those discounts are drying up. 

The foreclosure slowdown continued last month, according to the latest data from research firm RealtyTrac, which showed new filings hit a five-year low.

Foreclosure starts fell in 31 states, with the biggest drops in California, Arizona, Michigan, Georgia and Texas. Those are among the so-called non-judicial states, in which court approval isn’t required for foreclosures. In some states where court approval is required, concerns about sloppy paperwork processing by lenders has prompted tougher reviews of home seizures.

Fewer new foreclosures means fewer unsold homes on the market. As the pace of sales has picked up and the volume of unsold inventory has fallen, so has the backlog of houses for sale. The supply of listings has fallen from an average 9.4-month supply in 2010 to 6.1 months in August, the latest data available from the National Association of Realtors.

“There is a shortage of inventory — as crazy as it sounds to say that,” said Daren Blomquist, a RealtyTrac spokesman. “In a lot of market there’s less inventory of foreclosed properties than there is demand. You’re hearing about multiple bids for these properties.”

At the same time, demand for foreclosed homes has risen during the housing bust, in part because the stigma once associated with bank-owned properties has faded somewhat.

“Many real estate agent who would have never wanted to deal with a foreclosure in the past decided to get on the bandwagon,” said Blomquist. “Some now specialize in those properties.”

To be sure, foreclosed properties in some markets still being sold at deep discounts. Though the volume of foreclosures has slowed nationwide, the pace is still strong in Florida, where one in every 117 households in some stage of foreclosure last month, according to RealtyTrac.  Arizona, California, Illinois and Georgia also were among the top five states with the highest foreclosure rates in September.

With demand up and supply falling, prices have perked up. After falling by roughly a third after the 2006 peak, home prices have begun inching higher this year. After several false starts, the housing market began finding a footing earlier this year, and most analysts are convinced the worst is over in most parts of the country.

The latest evidence came this week with the Federal Reserve’s “Beige Book” report on regional economic conditions, which showed the housing recovery picking up steam in some districts.

After the bubble burst, bargain-priced homes were available on both new and existing houses. One measure of the “foreclosure discount” is the difference between the median price of existing and newly-built homes.

Since 1966, existing homes have sold, on average, for about 13 percent less than new homes, according to Diggle’s research. During the housing bust, the discount widened to as much as one-third less than the price of a new home. The discount has been falling this year.

Source : By John W. Schoen, NBC News


Foreclosure Activity Drops to 5-Year Low in September

Monthly Activity at Lowest Level Since July 2007 Led by Drops in CA, MI, GA, TX, AZ
  Lowest Quarterly Total Since Q4 2007, But Activity Increasing in FL, IL, OH, NY, NJ

IRVINE, Calif. – Oct. 11, 2012 — RealtyTrac® (, the leading online marketplace for foreclosure properties, today released its U.S. Foreclosure Market Report™ for September and the third quarter of 2012, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 180,427 U.S. properties in September, a decrease of 7 percent from the previous month and down 16 percent from September 2011. September’s total was the lowest U.S. total since July 2007.

The decrease in September helped drop the third quarter foreclosure numbers to the lowest level since the fourth quarter of 2007. Foreclosure filings were reported on 531,576 U.S. properties during the quarter, a decrease of 5 percent from the second quarter and a decrease of 13 percent from the third quarter of 2011 — the ninth consecutive quarter with an annual decrease in foreclosure activity. The report also shows one in every 248 U.S. housing units with a foreclosure filing during the quarter.

“We’ve been waiting for the other foreclosure shoe to drop since late 2010, when questionable foreclosure practices slowed activity to a crawl in many areas, but that other shoe is instead being carefully lowered to the floor and therefore making little noise in the housing market — at least at a national level,” said Daren Blomquist, vice president at RealtyTrac. “Make no mistake, however, the other shoe is dropping quite loudly in certain states, primarily those where foreclosure activity was held back the most last year.

“Meanwhile, several states where the foreclosure flow was not so dammed up last year could see a roller-coaster pattern in foreclosure activity going forward because of recent legislation or court rulings that substantively change the rules to properly foreclose,” Blomquist added. “A backlog of delayed foreclosures will likely build up in those states as lenders adjust to the new rules, with many of those delayed foreclosures eventually hitting down the road.”

Other high-level findings from the report

  • The national decrease in September and the third quarter was driven mostly by sizable decreases in the non-judicial foreclosure states such as California, Georgia, Texas, Arizona and Michigan.
  • Several judicial foreclosure states — including Florida, Illinois, Ohio, New Jersey and New York — continued to buck the national trend, registering substantial year-over-year increases in foreclosure activity in September and the third quarter.
  • U.S. foreclosure starts in the third quarter decreased both from the previous quarter and a year ago, reversing a bump in foreclosure starts in the second quarter.
  • California foreclosure starts (NOD) in September decreased 18 percent from the previous month and were down 45 percent from a year ago to a 69-month low, although the state’s foreclosure rate still ranked in the top three for the month and quarter.
  • Florida foreclosure starts (LIS) in September increased 24 percent on a year-over-year basis, the 11th consecutive month with an annual increase, and the state’s foreclosure rate ranked highest nationwide for the first time since April 2005.

Non-judicial states push national numbers lower
Of the 24 states where the non-judicial foreclosure process is primarily utilized, 20 reported annual decreases in foreclosure activity in the third quarter, including Nevada (71 percent decrease), Oregon (63 percent decrease), Utah (60 percent decrease), Virginia (34 percent decrease), California (29 percent decrease), Michigan (28 percent decrease), Arizona (23 percent decrease), Colorado (21 percent decrease), Georgia (20 percent decrease) and Texas (17 percent decrease).

Nevada, Oregon and California have all enacted legislation within the past year adding more requirements for lenders to properly foreclose, while a Georgia Court of Appeals ruling in July of this year requires lenders to provide certain information on foreclosure notices that some lenders may not have been including previously.

Washington state was one of only four non-judicial foreclosure states where foreclosure activity increased in the third quarter, up 70 percent from the previous quarter and up 15 percent from the third quarter of 2011. Washington state was one of the first non-judicial states to enact legislation impacting the foreclosure process following the so-called robo-signing controversy that came to light in October 2010. The state legislature passed a law that took effect in July 2011, requiring lenders to offer mediation to homeowners facing foreclosure.

Judicial states buck national trend
Meanwhile, third quarter foreclosure activity increased on a year-over-year basis in 14 out of the 26 states with a primarily judicial foreclosure process, including New Jersey (130 percent increase), New York (53 percent increase), Indiana (36 percent increase), Pennsylvania (35 percent increase), Connecticut (34 percent increase), Illinois (31 percent increase), Maryland (28 percent increase), South Carolina (16 percent increase), North Carolina (14 percent increase), and Florida (14 percent increase).

Some notable exceptions where foreclosure activity in the third quarter decreased on annual basis in judicial foreclosure states included Massachusetts (16 percent decrease) and Wisconsin (12 percent decrease).

Foreclosure starts reverse upward trend
First-time foreclosure starts, either default notices or scheduled foreclosure auctions depending on the state’s foreclosure process, were filed on 284,720 U.S. properties during the third quarter, an 8 percent decrease from the second quarter and also an 8 percent decrease from the third quarter of 2011.

Nationwide foreclosure starts decreased on an annual basis for the second straight month in September following three straight months of annual increases. Foreclosures were started on 87,066 U.S. properties during the month, down 12 percent from August and down 15 percent from September 2011.

September foreclosure starts decreased on an annual basis in 31 states, including California (45 percent decrease), Arizona (34 percent decrease), Michigan (22 percent decrease), Georgia (21 percent decrease) and Texas (19 percent decrease).

States with the biggest annual increases in foreclosure starts in September included New Jersey (424 percent increase), Pennsylvania (134 percent increase), New York (95 percent increase), Washington (60 percent increase) and Florida (24 percent increase).

Florida, Arizona, California post top state foreclosure rates in third quarter
Florida foreclosure activity in the third quarter increased 14 percent from a year ago, the third consecutive quarter with an annual increase and boosting the state’s foreclosure rate to highest in the nation. One in every 117 Florida housing units had a foreclosure filing in the third quarter, more than twice the national average.

Florida’s foreclosure rate also ranked highest in the nation in September, the first time since April 2005 that Florida has held the No. 1 spot. Florida foreclosure starts in September increased 24 percent from a year ago — the 11th straight month with an annual increase — and Florida bank repossessions (REO) increased 23 percent year over year — the ninth straight month with an annual increase.

Arizona REOs in September increased 2 percent from a year ago, the first year-over-year increase in Arizona REOs since November 2011, but the state’s overall foreclosure activity was down on an annual basis both in September and the third quarter thanks to big drops in foreclosure starts. Despite those decreases, one in every 125 Arizona housing units had a foreclosure filing during the third quarter — the nation’s second highest state foreclosure rate.

California also posted a foreclosure rate of one in every 125 housing units with a foreclosure filing in the third quarter, but the state’s foreclosure rate was slightly lower than that of Arizona, ranking No. 3 among all states for the quarter. A total of 109,369 California properties had foreclosure filings during the quarter, the highest of any state but still down from the previous quarter and a year ago.

California foreclosure auctions and REOs in the third quarter both increased from the previous quarter, but foreclosure starts (NODs) dropped 19 percent from the previous quarter. California foreclosure starts in September dropped to their lowest level since December 2006 — a 69-month low.

Other states with foreclosure rates ranking among the top 10 in the third quarter were Illinois (one in 126 housing units with a foreclosure filing), Georgia (one in 151), Nevada (one in 158), Ohio (one in 197), Michigan (one in 201), South Carolina (one in 215), and Colorado (one in 216).

Days to foreclose at record 382 days, legislation extends process in some states
U.S. properties foreclosed in the third quarter took an average of 382 days to complete the foreclosure process, up from 378 days in the previous quarter and up from 336 days in the third quarter of 2011. It was the highest average number of days to foreclose going back to the first quarter of 2007.

The average time to complete a foreclosure increased substantially from a year ago in several states where recent legislation and court rulings have extended the foreclosure process. These states included Oregon (up 62 percent to 193 days), Hawaii (up 62 percent to 662 days), Washington (up 62 percent to 248 days) and Nevada (up 42 percent to 520 days).

The average time to foreclose decreased from a year ago in 15 states, including Arkansas (down 49 percent to 199 days), Michigan (down 15 percent to 226 days), Maryland (down 9 percent to 541 days), California (down 8 percent to 335 days), and New Jersey (down 4 percent to 931 days).

New Jersey documented the second longest state foreclosure timeline in the third quarter behind New York, where the average time to complete a foreclosure was 1,072 days for properties foreclosed during the quarter. Florida registered the third highest state foreclosure timeline, 858 days — down slightly from 861 days in the previous quarter — and Illinois registered the fourth highest state foreclosure timeline, 673 days.

Report Methodology
The RealtyTrac U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing entered into the RealtyTrac database during the month and quarter — broken out by type of filing. Some foreclosure filings entered into the database during a month or quarter may have been recorded in previous months or quarters. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90 percent of the U.S. population. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: DefaultNotice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). For the quarterly report, if more than one foreclosure document is received for a property during the quarter, only the most recent filing is counted in the report. Both the quarterly and monthly reports check if the same type of document was filed against a property previously. If so, and if that previous filing occurred within the estimated foreclosure timeframe for the state where the property is located, the report


Source : RealtyTrac

IMPORTANT NOTICE from Cook County Assessor’s Office 10/09/12

The Assessor’s Office has been informed that taxpayers are being solicited by people claiming to work at the Cook County Assessor’s Office. These solicitors have been notifying taxpayers that they have missing exemptions and are encouraging taxpayers to hire them to file Certificates of Error on their behalf. The Assessor wants taxpayers to be aware that they do not need representation to file for a Certificate of Error. Certificate of Error exemption forms may be downloaded from this Web site. Taxpayers may also call our office and request that a Certificate of Error exemption form be mailed to them.

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Foreclosure-Related Sales Price Up as Inventory Shrinks: RealtyTrac

Prices went up for foreclosure-related sales on a quarterly and yearly basis, with the annual increase marking the first rise in two years, according to RealtyTrac’s Q2 foreclosure sales report.

The average price for foreclosure-related sales stood at $170,040, a 6 percent increase from the previous quarter and a 7 percent hike from the second quarter of 2011. The annual increase is the first since the second quarter of 2010 and the biggest yearly increase since the fourth quarter of 2006.

“The second quarter sales numbers provide solid statistical evidence of what we’ve been hearing anecdotally from real estate agents, buyers and investors over the past few months: there is a limited supply of available foreclosure inventory to choose from in many markets,” said Daren Blomquist, RealtyTrac Vice President. “Given this shortage of supply and the seasonally strong buyer demand in the second quarter, it’s no surprise that the average foreclosure-related sales price increased both on a quarterly and annual basis.”

Nearly a quarter (23 percent) of all home sales in the second quarter were either bank-owned properties or in some stage of foreclosure, compared to 22 percent in the previous quarter and 19 percent a year ago in the second quarter.

However, the actual number of foreclosure-related sales decreased 12 percent to 224,429 from the previous quarter and fell 22 percent from a year ago. The annual decrease is the first after five quarters of increases.

Homes in foreclosure and REOs sold at an average discount of 32 percent below non-foreclosures, up from 30 percent in the previous quarter and second quarter of 2011.

Pre-foreclosure sales, which are generally short sales, are starting to catch up to REO sales, with bank-owned sales outnumbering short sales by 9,833, the smallest difference since the third quarter of 2007.

Third parties bought 107,298 homes in pre-foreclosure in Q2, a decrease of 10 percent from Q1 and a 9 percent decrease from a year ago.

Out of all sales in the second quarter, 11 percent were counted as pre-foreclosures.

Pre-foreclosures sold for a price that averaged 26 percent below non-foreclosure homes. In the previous quarter, pre-foreclosure discounts averaged 24 percent and a year ago, the discounts averaged 18 percent.

Pre-foreclosure homes sat on the market longer and took an average of 319 days to sell after starting the foreclosure process compared to 306 days in the previous quarter and 245 days a year ago.

Third parties bought 117,131 REOs in the second quarter, a 13 percent decrease from the previous quarter and a 31 percent plunge from the second quarter of 2011.

REO sales made up 12 percent of all sales in the second quarter and had an average sales price of $155,892. The price is a quarterly and yearly increase of 6 percent and 10 percent, respectively.

REOs sold at a 37 percent discount compared to non-foreclosures, unchanged from the previous quarter but down from 38 percent a year ago.

Source DsNews By: Esther Cho

FHA Announces New Details for Distressed Loan Sale ( Chicago )

During a conference call Wednesday, Acting Federal Housing Administration (FHA) Commissioner Carol Galante announced applications are now being accepted for the Distressed Asset Stabilization Program, which is scheduled to hold its next sale in September.

About 40 percent of the sale will be concentrated in four hard-hit metro areas: Chicago, Newark, Phoenix, and Tampa, where about 3,500 loans are to be sold.

Assuming this upcoming sale is successful, Galante said FHA intends to look at other geographies with significant inventory for future sales.

When the program expansion was first announced in June, an upwards of 5,000 loans were expected to be sold. Now, Galante said the national number appears to be closer to 9,000.

While the new number is an approximation for now, Galante explained much more interest has been generated for the program since the loan sales will be held on an ongoing quarterly basis.

FHA first introduced the program in 2010 as a pilot, which led to the purchase of 2,100 single-family loans. The program prevents FHA-insured loans from getting lost to foreclosure by allowing investors to purchase at-risk mortgages, then turn them into performing loans.

A servicer can place a loan into the loan pool for sale if the borrower is at least six months delinquent, all loss mitigation options have been exhausted, a foreclosure proceeding has been initiated, and if the borrower is not in bankruptcy.

The FHA-insured notes are sold to investors at a price that is generally below the outstanding principal balance.

FHA also announced new neighborhood stabilization requirements for the hard-hit metros selected. In those areas, no more than 50 percent of loans purchased within a pool can be sold as REO properties.

“These markets were chosen because of the high concentration of FHA loans in the pipeline for foreclosure and because each allows us to test this strategy under a variety of market conditions,” said Galante.

Other options must be sought such as leasing the property to the homeowner or a modification. A short sale to a private investor doesn’t qualify for neighborhood stabilization credit.

For the program, 1-4 units will also be eligible, not just single-family homes.

FHA stated in a release that eligible investors need to have experience in asset management and property management, as well as a proven track record in helping seriously delinquent borrowers find an alternative to foreclosure.

Source DSNews by :Esther Cho