Congratulations to Vielka Gómez and Luis Lu Bernal for the purchase of their new home, may happiness and love move with you! Enjoy your new home 🎉🎊🎉
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Congratulations to Vielka Gómez and Luis Lu Bernal for the purchase of their new home, may happiness and love move with you! Enjoy your new home 🎉🎊🎉
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With short sales, home owners work with a bank on a solution to get out of a house they may no longer be able to afford or have to sell urgently for some reason. That’s why some argue short sales shouldn’t damage a person’s credit score in the same way as foreclosures, which can be much more costly for banks.
So should the penalty for a foreclosure more severely damage a borrower’s credit score than a short sale? No, maintains a new FICO study.
FICO conducted a study to determine the credit risk associated with “mortgage stress events,” such as foreclosures and short sales, by analyzing data from October 2009 to October 2011.
“While it is true that short sales represent slightly better risk than foreclosures, they do not perform well enough to merit a more positive treatment in the FICO Score,” according to a recent blog post on the FICO Web site.
The blog post goes on to explain that one out of every two borrowers who undergo a short sale go on to default on another account within two years. Also, according to researchers, an overwhelming majority of borrowers who went through a short sale also had some other mortgage delinquency in their credit history.
“From a weighting perspective, all these mortgage events – short sale, foreclosure, deed in lieu – fall into the same heavyweight class, because they correlate with exceptional riskiness,” the FICO blog post notes. “They aren’t alone in that class either. Based on the data, consumers with short sales perform no better than consumers who have a severe delinquency (90-plus days past due), a collection, or a derogatory public record (e.g., bankruptcy, tax lien, etc.) on file.”
My colleague Joanne Gaskin wrote a great post about the impact to the FICO® Score from short sales and other mortgage stress-related events. One of the questions we get asked most often is whether it remains appropriate for the scoring model to treat a short sale in a manner similar...
Foreclosure sales prices rose 6 percent in the second quarter and were up 7 percent year-over-year, RealtyTrac reported this week. This marks the largest annual increase in foreclosure-related sales prices since 2006.
During the second quarter, the average foreclosure-related sales price was $170,040.
Still, foreclosure and bank-owned homes sold at an average price that was 32 percent lower than the average price of a non-foreclosure home, RealtyTrac reports.
Meanwhile, the gap between REO sales and short sales continued to narrow during the second quarter. REO sales outnumbered pre-foreclosure sales by 9,833 — the smallest difference since the third quarter of 2007.
The number of short-sale transactions rose 18 percent year-over-year, accounting for 14 percent of all sales during January through May time period, RealtyTrac reports.
“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,” says 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.”
Foreclosure sales report for the second quarter of 2012 covering trends in pre-foreclosure sales, typically short sales, as well as trends in sales of bank-owned homes.
Pending home sales rose in July to the highest level in over two years and remain well above year-ago levels, according to the National Association of REALTORS® (NAR).
The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 2.4 percent to 101.7 in July from 99.3 in June and is 12.4 percent above July 2011 when it was 90.5. The data reflect contracts but not closings.
Lawrence Yun, NAR chief economist, said the index is at the highest level since April 2010, which was shortly before the closing deadline for the home buyer tax credit. “While the month-to-month movement has been uneven, more importantly we now have 15 consecutive months of year-over-year gains in contract activity,” Yun said.
Limited inventory is constraining market activity. “All regions saw monthly increases in home-buying activity except for the West, which is now experiencing an acute inventory shortage,” Yun added.
The PHSI in the Northeast increased 0.5 percent to 77.0 in July and is 13.4 percent higher than a year ago. In the Midwest the index grew 3.4 percent to 97.4 in July and is 20.2 percent above July 2011. Pending home sales in the South rose 5.2 percent to an index of 111.7 in July and are 15.6 percent above a year ago. In the West the index slipped 1.7 percent in July to 109.9 but is 1.3 percent higher than July 2011.
Existing-home sales are projected to rise 8 to 9 percent in 2012, followed by another 7 to 8 percent gain in 2013. Home prices are expected to increase 10 percent cumulatively over the next two years.
“Falling visible and shadow inventories point toward continuing price gains. Expected gains in housing starts of 25 to 30 percent this year, and nearly 50 percent in 2013, are insufficient to meet the growing housing demand,” Yun said.
Pending Home Sales
Owners can take steps to avoid having their home appraised at a lower value than the asking price.
“Taking the time to understand the areas that can positively influence your appraisal can help ward off the chances that your home will be appraised at a lower value than the asking price,” according to a recent article at Realty Times, which highlights ways sellers can prepare for an appraisal.
Here are a few ways that home owners can hurt their appraisal, according to the piece.
• Leaving the home untidy. Having an unkept exterior or interior can cause an appraiser to decrease the value somewhat. Remind your sellers that curb appeal is also important for an appraisal. Overgrown bushes or an unkept home exterior could prompt an appraiser to take as much as 3 percent off the value, according to a CNNMoney article.
• Having incomplete remodeling projects. Don’t let home owners keep a remodeling project unfinished prior to an appraisal. If they must, make sure they include details of the complete project and when it is to be finished to the appraiser.
• Failing to list improvements or upgrades made to the home. Compile a list of upgrades and home improvements made to the home and provide it to the appraiser. While some items, like a new roof, may not help raise the appraised value, other items might.
Real Estate News And Advice - Five Areas That Can Hurt Your Appraisal
Are some housing markets still suffering from the blues? Trulia’s Housing Misery Index takes into account the percentage of change in home prices from a state’s peak during the last decade compared to today as well as the percentage of mortgages that are either severely delinquent or in foreclosure.
While the housing market continues to pick up across the country, some housing markets still rank high on Trulia’s Housing Misery Index. The top four states:
In those states, home prices are 40 percent below their peak, according to the report. In Nevada, home prices are nearly 60 percent below their peak. Meanwhile, Florida dominates as the state with the highest number of home owners who are either delinquent or in foreclosure.
Other states also ranking high on the Housing Misery Index are Michigan, Illinois, Georgia, Maryland, New Jersey, Idaho, Washington, and Oregon.
On the other hand, Texas mostly escaped housing misery, according to the index. Home prices in Texas are no lower now than they were during the housing bubble. Also, few homes are delinquent or in foreclosure in the state.
Housing got little play during the Republican primary season, as we predicted, but will it get any attention in the presidential election? With the general e...
The Federal Housing Finance Agency announced Tuesday that it is issuing new guidelines that set out to more quickly qualify borrowers and speed up the short-sale process.
Among the new guidelines, home owners with a mortgage backed by Fannie Mae or Freddie Mac will be able to sell their home in a short sale even if they are current on their mortgage, assuming they can prove a hardship. Eligible hardships often include death of a borrower or co-borrower, divorce, disability, or job relocation (such as a job transfer or new employment 50 miles away from their current home).
The new FHFA guidelines also permit mortgage servicers to speed up the processing of short sales for borrowers with eligible hardships without needing additional approval from Fannie Mae or Freddie Mac.
“These new guidelines demonstrate FHFA’s and Fannie Mae’s and Freddie Mac’s commitment to enhancing and streamlining processes to avoid foreclosure and stabilize communities,” FHFA Acting Director Edward J. DeMarco said in a public statement.
The Federal Housing Finance Agency (FHFA) has announced that Fannie Mae and Freddie Mac—the government-sponsored enterprises (GSEs)—are issuing new, clear guidelines to their mortgage servicers that will align and consolidate existing short sales programs into one standard short sale pro...
The Mortgage Bankers Association's index of loan application volume slipped 1.8 percent for the week ended Aug. 3.
The group's gauge of requests for purchase loans declined 1.4 percent, while refinancing applications were down 1.9 percent.
The MBA noted that the refi share of total mortgage activity held steady from the week before, at 81.2 percent of total applications.
NEW YORK (Reuters) - Applications for home mortgages fell last week due to a drop in refinancing activity even as interest rates hit record lows, an industry group said on Wednesday.The Mortgage Bankers
There is a new class of American renters that has emerged in the wake of the housing bust: people who lost the houses they owned and are now renting single-family homes. Ironically, many of these rental homes are a reflection of the troubles that once plagued the renters. They used to be owned by other families who lost them in the downturn. Now they're owned and rented out by investors who purchased them at a discount.
At least 1.75 million renters in the U.S. have gone down this path, according to data from analytics firm CoreLogic.
A swelling class of American renters has emerged in the wake of the housing bust: families who rent single-family homes.
The Federal Housing Finance Agency announced Tuesday that after several months of mounting pressure from the Obama administrator and lawmakers that the mortgage giants it regulates, Fannie Mae and Freddie Mac, will not lower the mortgage principal of underwater home owners. Its decision quickly drew criticism.
The FHFA insists that through its own analysis it has concluded that reducing the mortgage principal of struggling home owners will not help prevent foreclosures nor save taxpayers money in bailout money to the GSEs.
The Obama administration says it disagrees with the FHFA’s decision. Treasury Secretary Tim Geithner was quick to argue that a reduction of struggling borrowers’ loan balances by the FHFA could save taxpayers up to $1 billion.
"I do not believe it is the best decision for the country," Geithner wrote to the FHFA shortly after it announced its decision. "You have the power to help more struggling home owners and help heal the remaining damage from the housing crisis."
The government had committed to helping to cover some of the costs to implementing such a program if the FHFA would permit mortgage principal reductions to move forward.
Yet, Edward DeMarco, the FHFA’s acting director, says that the FHFA has concluded after months of consideration that “the anticipated benefits do not outweigh the costs and risks” with mortgage principal reductions, and that the agency stands by its original decision to not permit it. DeMarco says that only about 74,000 to 248,000 home owners would be eligible for the principal reductions, but developing and implementing such a program would prove costly. Plus, about 11 million Americans are underwater on their mortgages so the program would only be able to help a small share.
Fannie Mae and Freddie Mac's regulator will not permit principal reduction, but Treasury Secretary Tim Geithner says it could save taxpayers $1 billion.
New-home sales posted their biggest drop in more than a year, throwing a small hiccup into this housing sector's path to recovery. The Commerce Department reported that new-home sales fell 8.4 percent in June, it’s largest drop since February 2011.
Existing-home sales also posted a 5.4 percent drop in June, but most of the decline is attributed to fewer homes for sale, according to the National Association of REALTORS®.
New-home sales were pulled down in June mostly by a 60 percent drop in sales in the Northeast and an 8.6 percent decline in sales in the South. Meanwhile, new-home sales in the Midwest ticked up 14.6 percent in June and by 2.1 percent in the West, the Commerce Department reported.
Even though overall new-home sales were down nationally in June, sales are still faring better than last year, one of the worst years on record for the sector. New-home sales were up 15.1 percent in June year-over-year. And new-home construction in June reached its highest level since October 2008, as home builder confidence reached a five-year high.
New single-family home sales in June fell by the most in more than a year and prices resumed their downward trend, suggesting a setback for the budding housing market recovery. The Commerce Department said on Wednesday sales tumbled 8.4 percent to a seasonally adjusted 350,000-u …
A home buyer sued his real estate agent after he broke his ankle, wrist and elbow while previewing a home for sale. However, a judge last week ruled that the real estate agent was not liable for home buyer Michael Davies’ injuries.
The case stems from a 2008 home showing. The Associated Press reports that Davies fell four feet in a dark garage when looking at a home that had no electricity.
The court ruled that the agent, Sandra Johnson, and her brokerage, Greenridge Realty, did not contribute in any way to the “hazardous condition.” The judge added that the agent had no responsibility to inspect the house to look for possible falls before taking the buyer into the home.
HASTINGS, Mich. (AP) - Michael Davies wanted to see a home for sale in western Michigan. The visit left him with a broken ankle, wrist and elbow.
Median list prices nationwide have risen 2.68 percent in the last year to $195,000, according to June housing data from Realtor.com of 146 metro markets. But in some markets across the country, asking prices have soared even more, in some cases jumping even more than 30 percent in the past year.
The following are the eight metro areas that posted the largest jumps in median list prices in June of this year compared to June 2011:
1. Santa Barbara-Santa Maria-Lompoc, Calif.
Year-over-year increase to median list prices: 33.14 percent
Median list price: $699,000
2. Phoenix-Mesa, Ariz.
Year-over-year increase: 32.19 percent
Median list price: $185,000
3. San Francisco
Year-over-year increase: 15.44 percent
Median list price: $725,000
4. Boise City, Idaho
Year-over-year increase: 14.94 percent
Median list price: $170,000
5. Oakland, Calif.
Year-over-year increase: 14.84 percent
Median list price: $379,000
Year-over-year increase: 14.34 percent
Median list price: $275,000
7. Fort Myers-Cape Coral, Fla.
Year-over-year increase: 14.30 percent
Median list price: $239,925
8. Washington, D.C.-Md.-Va.-W. Va.
Year-over-year increase: 14 percent
Median list price: $284,990
Some markets have shown more than 30 percent increases in asking prices. Find out where median list prices have seen some of the largest boosts in the past year.
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