Oct

15

Foreclosure-Gate: Update

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This video features Rick Sharga, Senior Vice President of RealtyTrac, talking about the effect of “foreclosure-gate”.

Interesting to note that most of the homeowners who this may impact have not paid their mortgage and deserve to be foreclosed on. “Foreclosure-gate”, as it’s being referred to, is about paperwork screw-ups and not about any larger issue like the wrong people being foreclosed on.

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Oct

7

New Foreclosure Crisis And What It Means For The ‘Double Dip’

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Just when you thought the real estate industry could not possibly become more surreal, IT HAS! The controlled flow of foreclosures to the market has been the number one concern of every housing analyst. There could be a ‘double dip’ in house values if they were released too quickly. The recovery could take years if they were released too slowly. Getting it just right was crucial. We posted on this issue last month. Both the private sector and the administration have been working the last eighteen months trying to get the release rate just right.

It seemed as though all the effort was paying off as there were a manageable number of distressed properties coming to the market and selling. Enter the ‘robo-signers’.

What is a ‘robo-signer’?

Because of the flood of foreclosures needing to be processed, there were employees who signed off on thousands of foreclosures attesting to the accuracy of the documents without having much personal knowledge of what they contained. These employees became known as ‘robo-signers’. It now appears that hundreds, many thousands of homes might have been foreclosed on without the proper procedures being followed.

What has this created?

Banks, servicing companies and even state governments are now putting a halt to the sale of tens of thousands of foreclosures. Below, is a partial list of the actions taken and we may have only seen the tip of the iceberg so far.

GMAC has suspended foreclosures in 23 states.
JP Morgan halted 56,000 foreclosures.
Bank of America has frozen the process on ‘tens of thousands’ of foreclosures.
States are considering foreclosure moratoriums.
Maryland governor calls for banks to temporarily stop foreclosures.

What will this mean to the housing market?

The market has been covered in a fog of confusion for over a year. The fog is about to get a lot thicker. A monkey wrench has just been thrown into what was hoped to be a well thought out process for releasing foreclosures in a timely fashion.

The New York Times reported on some of the challenges being created:

Evictions are expected to slow sharply, housing analysts said, as state and national law enforcement officials shine a light on questionable foreclosure methods revealed by two of the country’s biggest home lenders in the last two weeks. Even lenders with no known problems are expected to approach defaulting homeowners more cautiously and look more aggressively for resolutions short of outright eviction.

As more defaulting homeowners become aware of the lenders’ problems, they are expected to hire lawyers and challenge the proceedings against them. And if completed foreclosures were not properly done, families who bought the troubled homes could be vulnerable to claims by the former owners.

Radar Logic posted an opinion on the overall impact of the problem:

In most cases, however, distressed loans will not be restructured and delinquent borrowers will not become current on their mortgages. The delay in the foreclosure process will simply be a delay and will not result in a cure. A delay in foreclosures could have a lasting positive effect on housing markets if sales of foreclosed homes are put off to a point in the future when the overall economy is healthier, housing demand is greater, and housing markets are better able to absorb the new inventory. But this outcome is far from certain. It is equally possible that delaying foreclosures will simply push the economic reckoning further into the future, and any relief in the short term will be offset by pain in the middle- or long-term, with no net benefit to housing markets or the national economy.

Bottom Line

If this challenge proves to be significant in scope, the process of foreclosing may grind to a screeching halt for some companies. Fewer foreclosures coming to the market right now will mean prices will be less impacted. However, these properties will eventually come to market; if not now, than later. That will delay the housing recovery – perhaps for years.

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Dec

28

A Closer Look At The Impact Of Foreclosures In 2010

Filed Under Foreclosure Info, Sellers | Comments Off

These videos will explain what’s behind the impact of foreclosures in 2010. The unemployment rate is staggering and is the new challenge for the real estate market. While the Long Island real estate market has seen some improvements (small steps toward recovery), foreclosures and other distressed sales will be the topic of 2010.

For the website with the report on the impact of foreclosures throughout New York, you can visit http://data.newyorkfed.org/creditconditions.

Should you have any questions you can reach me at 631-587-1700, ext. 51.

Oct

25

Foreclosures Expected To Rise

Filed Under Foreclosure Info, Long Island Short Sales, Sellers & Buyers | Comments Off

Here’s an article, Foreclosures Expected To Rise, in the Financial Post, showcasing several points that I have continually spoken to homeowners about.

If you are behind on your mortgage, you can call me and we can discuss how you can avoid foreclosure.

Tom McGiveron, LSA 1-877-765-3123, ext. 51.

Aug

2

Long Island Foreclosures: Long Island Hardest Hit

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I have been plugging away in the past month about Long Island foreclosures. The recent article in Newsday entitled, Mortgage Defaults on LI Among Worst In State puts things in perspective.

What’s happening is astounding and I really believe that homeowners have no idea what’s in store down the road. The main “theme” of my content for homeowners is, if you want to or need to sell, now is the time. I know this is like a dull drum beat for those of you who frequent my website, but it’s just the truth.

But it’s the truth that I don’t think homeowners are hearing. I know many different people who really need to sell. They want to move on in their lives but just “can’t give their home away.”

It’s not about “giving it away.” This real estate market from 2002 through 2006, helped people acrue an unbelievable amount of equity in their home. And while it’s hard to swallow a 30% reduction in that equity, it’s better than the alternative (losing another 20% over the next 12 to 18 months).

With 5.2 million nonprime mortgages (meaning these are the mortgages that were written to less-than-perfect buyers a few years ago) still outstanding and facing foreclosure, we here on Long Island will be hit hard by a certain percentage of those homes. And one thing that’s not mentioned in this Newsday article is the rate at which prime borrowers (the best borrowers) are defaulting on their mortgages.

With unemployment on Long Island increasing to nearly 8%, foreclosures are going to riddle this market. As more foreclosures come to bear down on the market values of homes, the trend in the appraisal business to set market value at foreclosure levels may have an extremely damaging impact on “regular” home values. How?

An appraisal is all about comparisons looking at what’s sold in the area. As an agent who performs Broker Price Opinions for banks, I see more and more, that I need to use Bank Owned Properties as a means to measure a home’s value in any given area. From West Islip to Greenport, New York, I’m doing bank appraisals and consistently needing to drop the price values on homes to conform more with foreclosures (because that’s what’s selling).

Traditionally, an appraisal of home value didn’t focus or even include a bank-owned property, because that’s not a “normal” sale. It’s a distressed sale. You dont’ compare the two. However, in this market, with articles like this in Newsday, and agents like myself who know what’s going on, we’ve got a problem that, unfortunately, is going to continue getting worse before it gets better. The trend is for home values to begin following bank property sales because the entire market is in distress.

« go back — keep looking »

Oct

15

Foreclosure-Gate: Update

Oct

7

New Foreclosure Crisis And What It Means For The ‘Double Dip’

Dec

28

A Closer Look At The Impact Of Foreclosures In 2010

Oct

25

Foreclosures Expected To Rise

Aug

2

Long Island Foreclosures: Long Island Hardest Hit

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