How much longer can the foreclosures drag the market down?

Posted in Foreclosures, Housing Recovery, New Jersey Real Estate | 173 Comments

From NJ Spotlight:

SOME GOOD NEWS FOR NJ HOUSING MARKET, BUT FORECLOSURES STILL A FACTOR

Even as real-estate agents see encouraging demand for Shore rentals, and home prices in parts of New Jersey creep gradually higher, analysts and academics say foreclosures continue to slow the state’s housing market and economy.

In some areas, such as previously fast-growing counties on the suburban fringe or long-depressed urban areas, low prices may be precursors of lasting economic change, according to the experts.

While the overall numbers have improved, New Jersey continues be among the leaders in both foreclosures and mortgages in trouble. Home values, which in much of the country have rebounded strongly since the Great Recession, continue to tread water in much of the state.

In some communities, the picture is worse. Atlantic City and Trenton rank first and second in the nation for foreclosures. Beyond those obvious sore spots, observers point to areas like Ocean County, where they say the twin blows of the recession and superstorm Sandy may be changing the long-term dynamics of the real estate market.

In the midst of preparing his firm’s latest, generally cheerful overview of housing trends around the nation, Daren Blomquist, a vice president of RealtyTrac of Irvine, CA, agreed to take a closer look at New Jersey markets.

“In many ways what we’re seeing in those areas, and for New Jersey overall, is running counter to the positive national trend,” Blomquist said. “There are still a lot of foreclosures, a lot of distressed mortgages and prices remain well below the pre-recession peaks.”

By RealtyTrac’s reckoning, median home prices reached their peak in New Jersey at $350,000 in July 2007, a bit later than most of the nation. Even after a jump in March, they are now at $265,000, 24.3 percent lower, the firm reported.

The numbers vary, but CoreLogic, another Irvine, CA, real-estate analytics firm, agrees that New Jersey is lagging. In April, it reported the state’s average housing prices rose by 1.6 percent during the previous year. But that gain was less than 46 other states and the District of Columbia. For the nation, the increase was 6.8 percent, CoreLogic found.

“NJ has experienced a high foreclosure rate and large number of distressed sales that have slowed home-value improvement,” said Frank Nothaft, CoreLogic’s chief economist.

Another housing-data firm, Seattle-based Zillow, calculated that housing values have dropped 11 percent in Atlantic City in 12 months, and 26.7 percent of mortgages there have negative equity, debt higher than the property value.

The problems extend beyond the city. Egg Harbor and Pleasantville were both down more than 7 percent, according to the firm. Dennis and Woodbine townships in Cape May County both saw double-digit drops in home values, though based on fewer sales. In Cumberland County, Bridgeton homes are worth only an average of $68,300, but their prices are also falling.

In Mercer County, Zillow showed the average value of a Trenton home is $83,000, down 1.4 percent. Prices are nearly twice as high in Neighboring Hamilton Township, but they dropped 1.9 percent, the firm found.

In Newark, where for a time housing values were coming back slightly faster than the state average, recent CoreLogic report shows them stagnant or receding, down half a percent in the most recent findings.

In contrast, housing data from the firms show Philadelphia prices rising 29 percent. Brooklyn has become one of the least-affordable places in the country compared to its historic norms. The New York City area as a whole, including Jersey City, saw a 4.3 percent year-over-year price increase.

Asked to assess these trends, Professor Charles Steindel of Ramapo College, the state’s former chief economist, pointed to the same culprit in the problem areas. “Foreclosures are still high” in much of the state, he said.

But Steindel added he is “a little encouraged that home prices are falling” in some of those places. To an extent, that reflects properties moving through foreclosure and coming to market at lower prices, he said. “The number of (new) cases is finally coming down,” Steindel said, creating a path toward potential improvement.

April MarketNews

Posted in Demographics, Economics, Housing Recovery, New Jersey Real Estate | 12 Comments

From the April MarketNews from Otteau Group:

NJ Purchase Contracts in March Strongest Since 2005

Home purchase demand in New Jersey increased for the 19th consecutive month in March, rising to more than 10,000 home-purchase contracts. This reflects a 23% increase compared to the same month one year ago. The March tally was also the most during that month since the cyclical high in 2005 at the end of the subprime mortgage boom.

On a year-to-date basis (January-March) home purchase demand in New Jersey continues to expand, increasing by 21%. The majority of this year’s increase has been concentrated in homes priced below $400,000, as first-time ‘Millennial’ buyers begin to transition from rentership to homeownership, while the number of contracts concentrated in luxury homes priced higher than $2,500,000 has declined.

The imbalanced distribution of purchase contracts across the prices ranges has caused the statewide median home price to decline for the last three quarters. In Q1.2016, the median home price was $269,493, which was down by 2.7% from $276,915 one year earlier

Shifting to the supply side of the equation, the supply of homes being offered for sale continues to be relatively low which is limiting choices for home buyers. Unsold inventory in the state has however been slowly rising for the past 2 months, increasing by nearly 1,100 homes (2%) compared to one year ago. This is still about 23,000 (-31%) fewer homes on the market compared to the cyclical high in 2011. Today’s unsold inventory equates to 4.9 months of sales (non-seasonally adjusted), which is lower than one year ago when it was 5.8 months.

Currently, the vast majority (86%) of New Jersey’s 21 counties have less than 8.0 months of supply, which is a balance point for home prices. Hudson is presently experiencing the strongest market conditions in the state with fewer than 2 months of supply, followed by Union, Essex, Somerset, Morris and Middlesex Counties, which all have fewer than 4 months of supply. None of the counties have an unsold inventory level equivalent to a supply of 12 months or greater, however those with the largest amount of unsold inventory are concentrated in the southern portion of the state including Cape May (9.4), Salem (9.9) and Atlantic (10.9).

Some news isn’t good-enough-news, but at least we’re trending in the right direction

Posted in Economics, Housing Recovery, New Jersey Real Estate | 17 Comments

From NJ101.5:

NJ housing expert: ‘Good news, but not enough of it’

Most of the latest numbers related to the housing market in New Jersey point to solid movement in the right direction, but can conditions ever return to the way they were before last decade’s recession?

New Jersey’s real estate market in 2015 was the most robust its been since the economic downturn that began at the end of 2007. On top of that, homebuilding in New Jersey, represented by the number of authorized permits, saw its strongest start in a decade during the first quarter of 2016.

But Patrick O’Keefe, director of economic research at CohnReznick in Roseland, said while it’s possible New Jersey’s housing market will perform even better this year, there’s one significant measure that can’t be overlooked and forecasts a doubtful bounce-back to pre-recession levels.

Figures released Thursday morning, O’Keefe noted, point to a near-record low for New Jersey’s homeownership rate — the share of housing units that are owned by the occupant.

“Back in 2005, the homeownership rate peaked at 71.3 percent,” O’Keefe told New Jersey 101.5. “Today’s it’s down at about 61 percent.”

According to O’Keefe, it’s unlikely New Jersey’s rate will ever return to those record levels. And that’s not only due to economic factors. “Attitudinal shifts” have resulted in a weaker desire to own a home compared to the years prior to the housing meltdown, he said.

At the same time, an elevated inventory of distressed mortgages and a shortage of inventory of single-family homes have resulted in a constrained rebound of housing activity in the Garden State. New Jersey currently has the largest share of mortgages that are 90 or more days in arrears, or already in the foreclosure process.

“We’ve got good news in several reports, but just not enough of that good news,” O’Keefe added.

New Jersey home prices, on average, could return to a level prior to the recession, according to O’Keefe. But there still would be a sizeable number of properties – purchased between 2006 and 2008, predominantly – with market values that have not fully recovered.

March Pending Home Sales – Northeast continues it’s run

Posted in Housing Recovery, National Real Estate | 90 Comments

From CNBC:

Pending home sales up 1.4% in March, highest pace in nearly a year

Homebuyers stepped up their purchases in March, signing contracts to buy existing homes at the highest pace in nearly a year.

A monthly index measuring pending sales increased 1.4 percent compared to February, and is also 1.4 percent higher than March of 2015, according to the National Association of Realtors. February’s reading was revised down slightly.

“Despite supply deficiencies in plenty of areas, contract activity was fairly strong in a majority of markets in March,” said Lawrence Yun, chief economist for the Realtors. “This spring’s surprisingly low mortgage rates are easing some of the affordability pressures potential buyers are experiencing and are taking away some of the sting from home prices that are still rising too fast and above wage growth.”

Pending sales, however, fell in the West, where prices have heated most. Homebuilders also saw steep declines in sales in that region last month, despite low supply of existing homes for sale.

Pending home sales in the Northeast increased 3.2 percent in March, compared to February and are 18.4 percent above a year ago. In the Midwest, sales were 0.2 percent higher for the month and 4.0 percent above March, 2015. Sales in the South rose 3.0 percent for the month but are still 0.6 percent lower than last March, and monthly sales in the West declined 1.8 percent, and are now 7.9 percent below a year ago.

Home prices rise, less then expected, gains moderate

Posted in Economics, Housing Recovery, National Real Estate | 109 Comments

From HousingWire:

S&P/Case-Shiller: Home prices finally start to stabilize

The National Home Price Index, covering all nine U.S. census divisions, increased 5.3% annually in February, unchanged from the previous month, breaking a 10-month streak where the year-over-year figure increased over the previous month, the latest S&P/Case-Shiller report found.

“While one month does not make a trend, this is a sign that the US housing market may be stabilizing in the wake of strong price appreciation between 2012 and 2014,” said Ralph McLaughlin, chief economist for Trulia.

McLaughlin cautioned that although the S&P/Case-Shiller National Home Price Index is an important metric to watch, it’s worth noting that the measure is more reflective of price movements in premium homes rather than middle or lower tier homes.

According to the new report, the 10-City Composite increased 4.6% in the year to February, compared to 5.0% previously, as the 20-City Composite’s year-over-year gain was 5.4%, down from 5.7% the prior month.

On a monthly basis, after seasonal adjustment, the National Index recorded a 0.4% increase. The 10-City Composite posted a 0.6% increase and the 20-City Composite reported a 0.7% month-over-month increase after seasonal adjustment.

Only 10 cities increased for the month after seasonal adjustment.

“Home prices continue to rise, although more slowly, at a largely sustainable clip. But a deeper look at recent housing trends reveals a few troubling issues set to impact first-time and move-up buyers in the critical months ahead,” said Zillow Chief Economist Svenja Gudell.

“Inventory of entry-level and middle-tier homes is down sharply, and home prices in those segments are rising more quickly as demand stays strong and the economy keeps chugging along. At the same time, inventory at the top of the market is more available, and prices are growing far more slowly,” Gudell said.

“Heading into spring, buyers looking for the most expensive homes will find somewhat softening prices, a larger selection of homes to choose from and more limited competition. Entry-level and mid-market buyers – typically the housing market’s bread and butter – are likely to face stiff competition, rapidly rising prices and very limited inventory. The patience of many buyers will be tested in coming months,” Gudell added.

February not good to NJ home prices

Posted in Economics, Housing Recovery, New Jersey Real Estate | 57 Comments

From National Mortgage News:

Home Prices Rise Again in February: Black Knight

Home prices continue to make steady increases but are still off from their 2006 peak, according to Black Knight Financial Services.

Black Knight’s Home Price Index reported a value of $254,000 in February, an increase of 0.7% from the previous month and 5.3% from a year ago. The figure is up 27.5% from the market’s bottom recorded during the financial crisis, but still 5% below the peak recorded in June 2006.

The Pacific Northwest continued to be dominant over the rest of the country. Washington had the highest increase in home prices at 1.8%, while Oregon tied California for third at 1.3%.

Colorado also displayed impressive growth at 1.7% for the month, while Hawaii, Tennessee, Idaho and Utah all saw growth above 1%. Connecticut featured the most pronounced price compression, with a 0.4% decline for its home price index. Rhode Island and New Jersey were the only two other states to post declines, both at 0.2%.

The list of biggest movers by metropolitan area featured many likely suspects: San Jose, Calif., led the country with 2.4% HPI growth. Seattle, San Francisco and Denver also posted 2% growth or greater.

Metro areas across the Northeast dominated the list of cities with the biggest HPI declines. New Jersey had four cities on the list, while Massachusetts had three and Connecticut two. Atlantic City, N.J., reported the biggest drop in home prices, by 1%.

As go the rich?

Posted in Economics, NYC, Shore Real Estate | 61 Comments

From Vanity Fair:

The Hamptons Housing Market Is Getting Clobbered by Wall Street Jitters

IIt’s beginning to look a lot like springtime in the Hamptons. Frost has cleared from the dunes; landscape artists are tending to hedge-grow after the wilds of winter on the east end of Long Island; and if you listen hard enough, you can hear the sound of 1,000 tricked-out Range Rovers rolling into town.

But a cool wind is blowing through the elite enclave, as Wall Street fears send a chill through a real-estate market that, until recently, has been white hot.

Home sales in the Hamptons, a second-home hub for financiers, New York’s famed families, and actual famous people alike, has fallen to its lowest level in three years, as concerns over global markets in the first quarter of 2016 kept buyers at bay.

The market was hit by a swift one-two punch at the start of the year: a slowdown in China and anemic oil prices caused the S&P 500 to suffer its weakest start to a year since 2009, and Wall Street bonuses—a major source of funding for high-end home purchases—took a blow, too. Hedge funds were coming off a dismal year and continued to bleed well into the first quarter, while lay-offs in the banking sector have continued apace.

All of this led the number of Hamptons home sales to tumble 19.2 percent in the three months through March year-over-year, according to a report published Thursday by real-estate company Douglas Elliman and appraiser Miller Samuel. At the same time, the median sales price fell 2.8 percent to $895,000 from a year earlier.

Sales of luxury homes—anything listed for at least $4.05 million—fell 30 percent to 45 deals in the first quarter, according to the report. On the even higher end, the number of purchases at or above the $10 million mark fell to 9 from 13 from a year earlier.

South Jersey seeing no foreclosure recovery

Posted in Foreclosures, Shore Real Estate, South Jersey Real Estate | 129 Comments

From the Press of Atlantic City:

South Jersey home sale prices hit by large distressed market

South Jersey real estate continues to be hit hard by distressed properties, Atlantic County most of all.

Lenders started foreclosure actions against 399 homeowners in the county in the first three months of this year. There were also 476 notices of sheriff’s sale and 328 bank repossessions, all as reported by RealtyTrac, a company that researches foreclosure data nationwide.

Combined, this meant there was some level of foreclosure activity on more than 1,200 homes, or one out of every 106 homes in the county in the first quarter. That kept Atlantic County in the top position on RealtyTrac’s list of more than 3,100 counties across the U.S. for foreclosure activity.

Atlantic County Sheriff Frank Balles says that when he took office in 2009, “we were probably averaging about 200 to 250 (sales) a year. Last year, there were a little over 2,100.”
When he started, it was normal to see one or two people looking to bid. Now, he sees closer to 50, often more.

“We’re seeing the biggest year-to-year increases in the number of distressed assets hitting the market that we’ve ever seen,” says D’Alicandro, a past president of the Atlantic City & County Board of Realtors.

“These are properties not cared for and maintained by homeowners. In a lot of cases, they were abandoned, in some cases years ago. They may be damaged, vandalized and sometimes stripped on the way out,” he says.

“When you go from 5 to 6 percent bank-foreclosed properties up to double digits … being distressed sales, and when they’re selling for 25 to 30 percent below what they would sell for in good condition, that has an impact on the median sales price,” D’Alicandro added.

March figures from the New Jersey Association of Realtors show part of that impact.

The median sale price for an Atlantic County home last month was $184,000, down from $211,500 in the same month last year. That’s a 13 percent drop, NJAR reported.

Median prices also dropped in Cape May County, from $305,000 last March to $260,000 last month for single-family sales, a 14.8 percent cut.

NJAR also reported gains in Ocean County in both categories, with the total number of sales going up 18 percent and the median price hitting $261,000, a jump of 5.7 percent over a year earlier.

Still, foreclosures are a concern all around South Jersey, with the four local counties all showing up in the top 11 percent in nationwide foreclosure activity.

In Cumberland County, one home in every 159 had some foreclosure activity in the first quarter of this year. And in Ocean County, the rate was one out of every 221.

NJ’s shell game taxes

Posted in New Jersey Real Estate, Politics | 127 Comments

From the APP:

Prieto: No estate tax deal without gas tax increase

Assembly Speaker Vincent Prieto said he won’t move forward with any plans to eliminate New Jersey’s estate tax without a broader deal to increase the state’s gasoline tax.

Prieto, D-Hudson, stood along with a coalition of left-leaning groups Monday who lambasted plans by Gov. Chris Christie and some in the New Jersey Senate to eliminate the tax on estates worth more than $675,000.

Calling the move “unconscionable” and “another big giveaway for the wealthy,” leaders from the state’s education union and environmental, anti-poverty and other groups said the elimination of the estate tax would blast a $450 million hole in the state’s proposed $33.8 billion budget for next fiscal year. That, they said, would benefit only the wealthy while cutting programs that help the state’s poor and middle class.

“We would not be able to withstand a total repeal,” Prieto said. “It has to be a part of a bigger picture in my mind.”

Also, part of that picture would be a gas tax hike to fund the Transportation Trust Fund, which is projected to run out of money for new projects this summer. Meanwhile, Christie’s administration said last week that the governor is waiting for lawmakers to send him an outline of what that deal might look like.

Prieto’s announcement is a hurdle for a bill making its way through the state Senate that would phase out New Jersey’s estate tax entirely over five years. The state has the lowest thresholds for estate taxes at $675,000.

It also came on the same day state Sen. Jennifer Beck, R-Monmouth, proposed compromise legislation that would increase New Jersey’s estate tax threshold to $2.5 million, the average level for states that tax estates.

Prieto said he could support increasing New Jersey’s estate tax threshold to the federal level of $5.4 million or possibly a phase-out, but only after the state started reaping the benefits from replenishing the transportation fund.

Affordability again pushing buyers to the burbs?

Posted in Employment, Housing Recovery, NYC | 60 Comments

From LoHud:

Housing market strong in Lower Hudson Valley

The Lower Hudson Valley housing market continued to show its strength, as the total number of first-quarter home sales in Westchester, Rockland and Putnam counties went up by 14.5 percent over the same period last year, according to the real estate sales report released Monday by the Hudson Gateway Association of Realtors (HGAR).

Market conditions in Westchester and Putnam were also rated strong and stable in another quarterly report recently issued by Douglas Elliman.

The HGAR report shows that 1,847 homes sold in Westchester County in the first quarter, up 14 percent from the prior year quarter.

Sales activity in Westchester — along with Long Island and Fairfield County in Connecticut — since last year has remained strong because more consumers are seeking affordable homes in surrounding suburbs, said Jonathan Miller, CEO and president of Miller Samuel Inc., a real estate appraisal and consulting firm, which monitors 18 real estate markets in the region.

“Affordability is dropping in New York City, and we’re seeing the pressure of pushing out to the suburbs in terms of property demand,” said Miller, who is the author of the Elliman report.

According to Miller’s report, Westchester’s overall sales volume stabilized in the first quarter: The number of closed sales was 1,640 while the figure was 1,647 in the prior year quarter. But the number of total sales under contract surged 16.3 percent to 2,338 over the same period. During the first quarter, 1,928 contracts were signed, up by 19.2 percent over the same quarter last year.

The luxury market in Westchester — defined by the Elliman report as the upper 10 percent of all single-family sales — continues to show weakness, with median sales price falling 16.8 percent to $1,985,000 over the same period.

The number of the first quarter sales in Rockland went up 9.4 percent to 467 over the same period last year; the median sale price of single family homes remained almost the same at $399,000.

“Over the past year, we have seen a very balanced market,” said Rosemarie Pelatti, a real estate broker and owner at Keller Williams Realty Hudson Valley in New City, noting that the trend continues in 2016.

The number of sales in Putnam has continued to rise over the prior year level, mirroring the growth in Westchester.

A total of 227 homes were sold in the first quarter, up by 26.8 percent from the prior year quarter. Of those sales, 87.2 percent were single-family homes and 12.8 percent were condominiums, according to the Elliman report.

The median sale price was $290,000, up by 3.6 percent from a year before.

Miller said Putnam’s market growth is also “connected to what’s happening in New York.”

The key to growth

Posted in Economics, Housing Recovery, New Development, New Jersey Real Estate | 21 Comments

From the Record:

Population rebounds around train stations in N.J.

When Kevin Eleby started commuting by train to New York City in 2001, the station in downtown Paterson was nearly empty. Every morning he climbed the stairs to the platform to wait alongside three other riders.

Nearly a decade passed. A few new people started showing up. Then a few more. A few weeks ago, when his train rushed into the station at 7:39 a.m., Eleby was surrounded by a crowd of 45 |people.

“This place was deserted. Now you come up here and it’s full. Look at all these people!” said Eleby, 48, a Paterson resident who works in information technology for Memorial Sloan Kettering Cancer Center in Manhattan. “It’s a big change.”

It’s a change that’s taking place across New Jersey and in some of the nation’s largest metropolitan regions. During the housing boom of the early 2000s, New Jersey’s population grew by 2.8 percent. But car-dependent suburbs saw their populations grow by 4.1 percent, according to a study by Tim Evans, research director at New Jersey Future, which advocates for transit-oriented development. Meanwhile, neighborhoods within a half-mile of a transit station barely grew at all.

Then came the 2008 recession — and a major shift in population and commuting patterns.

Statewide, population growth slowed, dropping to 1.5 percent from 2008 through 2014, the latest year for which data is available. Car-oriented suburbs grew at roughly the same rate.

But during the same period, transit-oriented neighborhoods saw their population surge. Since the recession, they have accounted for 38.3 percent of the population growth in New Jersey, Evans found.

“It’s really dramatic, actually, how little these transit places were growing before 2008 and now they’re growing really quickly,” Evans said. “And the outlying counties that were the locus of sprawl are now losing population.

In Bergen and Passaic counties, many older suburbs grew up along train lines, and many newer ones are dependent on cars. That means the change in population patterns is not as stark here as elsewhere around the state, Evans said.

Yet the pattern holds. Most car-based municipalities in North Jersey continued to grow after 2008, but at a slower pace than before the recession, Evans said. Places like Montvale, Cresskill, Upper Saddle River in Bergen County; Wanaque in Passaic County; and Pompton Plains in Morris County all saw their growth rates stagnate.

But many transit-oriented neighborhoods grew. In Bergen County, Fair Lawn, Lyndhurst, Garfield, Ridgewood and Glen Rock all went from losing population before the recession to gaining population since 2008.

“It’s definitely true that places near transit have been growing faster than they had for many decades before the recession,” Evans said.

In North Jersey, the epicenter of this transit turnaround is Paterson. The neighborhood within a half-mile of the city’s downtown train station lost 473 people every year on average between 2000 and 2008, according to census figures. In the years since, it has gained an average of 220 people annually.

One of those newbies is Antonia Felix, 25, who moved to an apartment near the station in December so she could catch a train into Manhattan, where she works as a nanny. Standing beside her on the platform one recent weekday morning was Natalie Petrardo, who rented an apartment nearby in November.

“I moved here so that I could catch the train to Secaucus,” where she works in a warehouse, said Petrardo, 26. “I don’t have a car, and the train service here in the morning is really good.”

Longtime commuters notice the difference. Marilyn Romero rides the train every weekday from Paterson to Ramsey, where she works at a dry cleaner’s shop.

“I was afraid when I started. There was nobody up here,” said Romero, 30, who started riding the train 15 years ago. “Now it feels safer with all these people here.”

That switch is even more impressive than it seems, Evans said. That’s because like most neighborhoods near train stations, downtown Paterson already was built-out in 2008, with little vacant land. Growth there meant developers had to renovate, expand or bulldoze existing buildings to make room for new housing units, often at more expense than building a house with a two-car garage on formerly rural land.

“The growth there is remarkable because it isn’t as easy to do in a place that already has used up all of its developable land,” Evans said. “You have to do more steps to make that happen.”

Freddie and Fannie to reduce principal

Posted in Foreclosures, Mortgages, Politics, Risky Lending | 112 Comments

From HousingWire:

FHFA makes it official: Principal reduction is coming

A day that many in the housing industry thought would never come is finally and actually here, as the Federal Housing Finance Agency is making official what was first reported several weeks ago – widespread principal reduction is coming.

In what it is calling a “final crisis-era modification program,” the FHFA announced Thursday that it will be launching a principal reduction program for some borrowers whose loans are owned or guaranteed by Fannie Mae or Freddie Mac.

But the program is not quite as widespread as was first reported.

Initial reports in the Wall Street Journal suggested that the FHFA’s principal reduction program may make fewer than 50,000 “underwater” borrowers eligible for principal reduction, but what wasn’t known until Thursday was the exact number of borrowers the FHFA’s program could affect.

The FHFA said Thursday that it expects approximately 33,000 borrowers to eligible to participate in the principal reduction program due to very specific eligibility requirements.

According to the FHFA, principal reductions will be available to owner-occupant borrowers who are 90 days or more delinquent as of March 1, 2016, meaning that borrowers will not able to “strategically default” in able to receive principal reduction.

Additionally, the program will only apply to borrowers whose mortgages have an outstanding unpaid principal balance of $250,000 or less, and whose mark-to-market loan-to-value ratios are more than 115%.

For years, the leadership of the FHFA, Fannie, and Freddie claimed this day would never happen. They all said the GSEs were in conservatorship, not receivership, and so a reduction in asset values would be counterintuitive to that status.

According to the FHFA, this program will give seriously delinquent, underwater borrowers “last chance” to avoid foreclosure by providing principal reduction in a straightforward and timely manner.

“FHFA believes that this final crisis-era modification program will provide seriously delinquent borrowers a last opportunity to address negative equity and to avoid foreclosure and will also help to improve the stability of neighborhoods that have not yet recovered from the foreclosure crisis,” the FHFA said in prepared materials.

According to the FHFA, the eligible loans are heavily concentrated in Florida, New Jersey, New York, Illinois, Ohio, Pennsylvania, Nevada and in” hardest hit communities.”

Atlantic City and Trenton lead the nation in foreclosure filings

Posted in Foreclosures, New Jersey Real Estate | 24 Comments

From NBC News:

Atlantic City Area Tops List of Foreclosures

Atlantic County, home to New Jersey’s fiscally distressed gambling hub Atlantic City, had the highest foreclosure rate of any major U.S. metropolitan area in the first quarter of 2016, according to RealtyTrac data released on Thursday.

One in every 106 housing units in Atlantic County had a foreclosure filing in the first quarter, compared to a nationwide rate of one filing per 459 homes.

The area has been hit hard by the closure of four Atlantic City casinos in 2014, which remain shuttered. It also had the highest metro foreclosure rate for all of 2015.

Trenton, New Jersey’s capital city, had the second-highest metro foreclosure rate in the nation in the first quarter and Baltimore, Maryland, came in third.

As a state, New Jersey had one foreclosure filing for every 216 housing units, the second-worst rate of all U.S. states, behind only Maryland, where one in every 194 units had a filing, the RealtyTrac data showed.

Nationally, foreclosure activity bumped higher seasonally in March, but most markets continue to improve to more stable levels, said RealtyTrac senior vice president Daren Blomquist in a statement.

More than a third of the 216 local markets examined were below their pre-recession foreclosure averages in the first quarter.

“We would expect a growing number of markets to move below that milestone the rest of this year, while the number of markets with a lingering low-grade fever of foreclosure activity continues to shrink,” he said.

Foreclosures continue improvement trend

Posted in Foreclosures, Housing Recovery, National Real Estate | 87 Comments

From HousingWire:

Foreclosure inventory declined nearly 25% in February

National foreclosure inventory, or any house within the foreclosure process, in February decreased by 23.9% annually, according to CoreLogic’s February 2016 National Foreclosure Report.

Completed foreclosures, total homes lost to foreclosures, was down by 10% annually in February, according to the report. Nationwide, the number of completed foreclosures reduced by 4,000 from 38,000 in February 2015 to 34,000. This is down 71.3% from its peak in 2010.

“Job creation averaged 207,000 during the first two months of 2016, and incomes grew over the past year,” CoreLogic chief economist Frank Nothaft said. “More income and improved household finances have helped bring serious delinquency rates down in nearly every state.”

“However, serious delinquency rates increased in North Dakota and West Virginia, two states affected by price declines for the energy fuel each produces,” Nothaft said.

Since September 2008, there have been about 6.2 million completed foreclosures, and since 2004 there have been 8.2 million.

Total foreclosure inventory in February, about 434,000, was about 1.1% of all homes with mortgages. This was down from 1.5% last year. The foreclosure inventory rate in February was the lowest it has been since November 2007.

The total mortgages in serious delinquency also declined by 19.9% in February, according to the report. About 3.2% of mortgages fall under this category, also the lowest rate since November 2007.

More settlements … no guilt … no prosecution

Posted in Mortgages, Politics, Risky Lending, Unrest | 68 Comments

From the Star Ledger:

Goldman Sachs to pay $5 billion for its role in housing bubble

Goldman Sachs has agreed to pay more than $5 billion to settle charges it sold mortgages it knew were likely to fail during the housing bubble heydays of 2005-2007, the U.S. Justice Department announced today.

Of that settlement, $1.8 billion has been set aside to help consumers harmed by the practice – with most of it going toward loan modifications, loan forgiveness and forbearance, or to “distressed and underwater homeowners throughout the country,” according to the settlement.

Some of that money will also be used to finance affordable rental housing throughout the country as well – “a crucial need following the turmoil of the financial crisis.”

Settlement money also is designated to settle claims by the Federal Home Loan Bankis in Des Moines, Seattle, Chicago, the State of New York, and the State of California.

The practice of selling high-interest loans to consumers who were unlikely to be able to afford mortgage payments for long resulted in an unprecedented number of foreclosures throughout the country. Goldman Sachs has admitted with this settlement that it resold pools of this high-risk loans without due diligence, according to the Justice Department.

The settlement “expressly preserves the government’s ability to bring criminal charges against Goldman, and does not release any individuals from potential criminal or civil liability,” according to the Justice Department.