Archive for September, 2011

After foreclosure, he comes to the house

Excellent column in last Friday’s New York Times Magazine called “The Closer,” written by the guy whose job it is to go to a home after it’s been foreclosed on and see if anyone’s there, tell them what’s up, and maybe make them an offer to leave without destroying the Yeah, those foreclosures are people, not numbersplace.

Some people have been expecting me. Some claim they never knew they were foreclosed on or tell me that they have worked something out with their lender. Some won’t tell me a thing. If nobody is home, I have to determine where they are — at work, on vacation, in the Army, in jail, in a nursing home, dead or moved away. It isn’t easy.


If they didn’t clean out the house, I have to ask them to sign a waiver stating that everything left inside can be disposed of. Hospital beds. Hundreds of boxes of shoes. A mannequin. A second grader’s homework portfolio. A wedding album filled with pictures with one person torn out. Get-rich-quick “business plans.” Sometimes I linger as I check the basement for mold and lead. I am the final period on so many significant chapters.

HAMP modifications working in 80% of cases

image Four out of five homeowners who had their mortgages modified under the Home Affordable Modification Program have kept their mortgages current, according to a Treasury Department report. HAMP is part of the Obama Administration’s Making Home Affordable initiative.

In fact, the report found that mortgages modified through HAMP “have generally performed better than other modifications implemented during the same periods.”

For example, of HAMP-modified mortgages from early 2010, 81.6% are still performing, compared to only 65.8% of modifications made privately.

Click here for the full report (big ol’ PDF).

IBM is more valuable than Microsoft

For the first time since 1996, IBM is a more valuable company than Microsoft  . File that under “No, you really can’t predict the future.” (This was typed on an IBM-designed keyboard, matter of fact.)

According to a new report from CoreLogic, its experts predict that $7.4 billion of mortgages in the U.S. will have some sort of fraud connected with them.

And that number is down almost 40 percent from last year ($12 billion worth of fraud).

Why the decline? Two big reasons: Fewer mortgages and better “pre-funding fraud controls.”

Everyone's in on the action!One interesting tidbit: Identity fraud is down (-45%) but property fraud is up (+262%).

Click here to read the whole story from CoreLogic.

In a related story, the The Financial Crimes Enforcement Network released its Second Quarter 2011 Analysis (click for PDF) of “suspicious activity reports” from financial institutions. Interestingly, lenders filed almost 30,000 such reports in Q2 of 2011 — almost double the number filed in Q2 2010. (Click here for the news release.)

Do these two stories contradict each other? Nope. Many of the reports FinCEN is counting concern mortgages made years ago; 81 percent of the reports they received in this past quarter were about mortgages made before 2008.

I guess lenders are taking a good, hard look at the people they lent to — the barn door is closed, and now they’re following the hoofprints.

Home prices fall in July, now at 2003 levels

imageThe nation’s average home price fell in July from a year ago, with the S&P/Case-Shiller 20-city composite index dropping 4.1% from July 2010. (The index did increase slightly from month to month.)

Prices, the company said, are now at 2003 levels.

A bit of good news: Of the 20 cities surveyed, two saw price increases from 2010: Detroit and Washington, DC. Washington’s prices rose about three-tenths of a percent.

Shadow inventory drops — again

A new CoreLogic report says that residential shadow inventory — the number of homes in or near foreclosure (and likely to be on the market soon) — dropped in July from a year ago.

Currently, there’s about five-month supply of ‘shadow’ property (about 1.6 million units); in July 2010 there was a six-month supply (about 1.9 million). In fact, the level of shadow inventory has been dropping since April, and is down 22% from its peak in January 2010, when there was an 8.4-months’ supply.

According to the company, the decline is simply a result of delinquencies being slower than sales.

The shadow inventory accounts for 29 percent of the combined shadow and visible inventories:


And here how the shadow inventory breaks down:


Click here to read the full release.

First-time buyers moving away from short sales

First-time homebuyers are a lot less interested in short sales than they used to be, according to a Campbell/Inside Mortgage Finance survey reported by HousingWire.

  • In November 2009, first-time buyers accounted for 54.1% of all short sales.
  • In August 2011 they accounted for 39.7% 0f short sales, the lowest ever recorded by the survey, which began in mid-2008.

Why the drop? Could be lots of things. The obvious one, of course, is that while short sales are typically priced about 27% lower than ‘regular’ sales, they also take an average of 17 weeks to complete. With prices down and inventory high, first-time buyers may be finding great deals without having to put up with the short-sale process.

Distressed property currently accounts for about one of every six residential sales.

Click here to read more.

This headline brought to you by Captain Obvious

Mortgage Refinancing increasing as Mortgage Rates Fall“.

New-home sales: News that isn’t

The US Census Bureau reports that sales of new homes in August were up from August a year ago, although down from July 2010. At least that’s what the headlines read.

But then you read the details. The number (295,000 new homes)

is 2.3 percent (±13.9%) below the revised July rate of 302,000, but is 6.1 percent (±18.8%) above the August 2010 estimate of 278,000.

imageIn other words, August 2011 is anywhere from 11.6% below last year to 16.2% above last year. That’s what the “±13.9%” means.

Similarly, those August numbers are down 12.7% or up 24.9% from July — or anywhere in between

Not really useful, is it? “August new-home sales might be up or down” doesn’t make a compelling headline.

So move along. Nothing to see here.

16 Virginia lenders likely on ‘problem bank’ list

The latest “Unofficial Problem Bank List” from Calculated Risk has includes 16 Virginia banks from across the commonwealth. The issues run the gamut from “unsafe or unsound banking practices and violations of law and regulations” to “failing to comply with its … approved business plan” and others.

Click here to see the list (sortable, with links to court documents).

And click here to read more from Calculated Risk.