And they’re off!

Posted on July 18, 2011 by grim

From the Star Ledger:

Paramus bank the first to meet new court foreclosure filing standards

Hudson City Savings Bank is in compliance with the state court’s new mortgage foreclosure filing standards, according to a July 12 document that was made public yesterday.

The move means the bank is the first of more than two dozen of the country’s biggest mortgage lenders and servicers to satisfy the court’s exhaustive review of foreclosure processes, according to documents posted to the court’s website.

The decision comes nearly seven months after state Supreme Court Chief Justice Stuart Rabner issued a three-part initiative to investigate what he feared was rogue residential mortgage foreclosure filings, noting a staggering increase in caseloads and concerns the judges had inadvertently “rubber-stamped” files that had inadequate or inaccurate paperwork. Lenders and servicers were required to provide extensive documentation outlining how they handled foreclosure proceedings.

In his decision, retired Judge Walter Barisonek — serving as one of two special masters overseeing the cases — wrote that Hudson City Savings Bank has “sufficient policies and procedures in place to demonstrate affirmatively that there should not be irregularities in their handling of foreclosure proceedings in this state.”

The court’s actions have effectively halted foreclosure filings since December while lenders and servicers work with court-appointed special masters to review hundreds of pages of paperwork.

Posted in Foreclosures, New Jersey Real Estate | 156 Comments

Wrist slapping delayed a few weeks

Posted on July 18, 2011 by grim

From the NY Post:

Mortgage megadeal is still weeks away

America’s biggest mortgage servicers are still weeks from reaching a potential multibillion-dollar deal with federal and state officials to settle the foreclosure fiasco, The Post has learned.

Key sticking points include the amount each bank will have shell out and whether the firms will be released from future lawsuits once a broad accord is struck, sources said. Banks could be hit with as much as $25 billion in fines.

Negotiators had hoped to reach an agreement in principle by last week or possibly this week.

But a source close to the talks between the five biggest US banks and 50 state attorneys general and federal regulators said discussions aren’t as far along as hoped and that an agreement might be reached in the next three to four weeks.

The settlement as it is now structured would form two types of funds — one national and funds for each of the states — that would settle most state and federal civil foreclosure claims against Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, formerly known as GMAC.

Last week, JPMorgan CEO Jamie Dimon voiced some frustration with the process and described the mortgage mess as an “unmitigated disaster” during a conference call with analysts to discuss second-quarter results. “We just really need to clean it up for the sake of everybody,” Dimon said. “And everybody is going to sue everybody else, and it’s going to go on for a long time.”

Posted in Foreclosures, Housing Bubble | 126 Comments

Bubble sitters just as unrealistic

Posted on July 17, 2011 by grim

From MarketWatch:

Post-bubble buyers more likely to overprice home

People who bought their homes after the housing bubble burst are more likely to have an unrealistic view of their home’s worth than those who bought before the housing downturn, according to a report released by Zillow this week.

The analysis found that people currently selling their homes who bought in 2007 or later are overpricing them by 14%. In contrast, those who bought before 2002 are overpricing by 12% and those who bought between 2002 and 2006 are overpricing by 9%.

“Post-bubble buyers seem to believe they escaped the worst of the housing recession, as evidenced by how they price their homes today,” said Stan Humphries, chief economist for Zillow. “But 2006 was just the beginning of the housing recession, and it is continuing in earnest to this day. That means that even people who bought after the bubble burst need to break out the pencil and paper and do serious research into what has happened in their market since they first bought their home, whether it was four years ago or six months ago.”

Of homeowners who said they intend to sell their home in the next four years, people who purchased their home after the bubble were also more likely than those who bought earlier to base their asking price on the price they originally paid for the home, according to Zillow.
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No one likes to admit their home has gone down in value — especially when it hasn’t been that long since you moved in. But if you need to sell that home after living in it for just a few years, take a deep breath and price it right, otherwise it could end up costing you even more.

“Overpricing homes causes them to stagnate on the market and keeps inventory from decreasing — not a desirable outcome for either the sellers or the market as a whole,” Humphries said.

Posted in Economics, Housing Bubble | 104 Comments

“Homeowners need to price their homes right or they won’t sell”

Posted on July 15, 2011 by grim

From the Chicago Tribune:

Pricing a home to sell in today’s market

During the housing boom, many real estate agents found it extraordinarily tough, if not impossible, to come up with even ballpark asking prices for their listings.

“Values were increasing at a pace we had never seen in this area,” said John Duffy of Duffy Real Estate in the Philadelphia area.

For four-plus decades, real estate agents had been used to gradual price appreciation of 3 to 6 percent a year, “and then the boom came along, and we were seeing a much faster and higher appreciation, which made it very difficult to price properties,” Duffy said.

The results: Multiple bids, and prices exceeding what homeowners were asking.

Today’s market is very different. And, Realtors say, the way houses are priced has changed dramatically.

“Homeowners need to price their homes right or they won’t sell,” said Art Herling, Philadelphia-area vice president of Long & Foster real estate company. “Buyers are extremely savvy and cautious, and, as one builder said, ‘It’s hip to be conservative.'”

You must be able to “defend” the asking price, Duffy said. One way is to research similar homes that have sold in the past few months in a neighborhood or town. Also, compare the house with others on the market in the same area.

“It is important for the Realtor and homeowner to be totally honest with the comparison, and make sure you are comparing apples with apples,” Duffy said.

Active listings “will give the seller a bird’s-eye view of what the competition is doing, and what he or she is up against, as a comparative tool,” said John Badalamenti of Prudential Fox & Roach in Wayne, N.J.

Added Laurie R. Phillips of Prudential Fox & Roach in Philadelphia: “When a new buyer is out looking at homes, they will compare the prices of what they are seeing.”

Days on the market is another important factor to consider, Duffy said. If a similar property has been listed for a while, it’s a good indication the house is overpriced.
…
Looking back at sales from a more robust market is irrelevant, said Joanne Davidow, vice president and office manager at Prudential Fox & Roach in Philadelphia.

“Sellers may be tempted to price a house with what they need, but it is important to price at a realistic range,” Davidow said.

Posted in Employment, Housing Bubble, National Real Estate | 235 Comments

Kicking the can, prolonging the pain, delaying the inevitable, the new American Way

Posted on July 14, 2011 by grim

From CNN Money:

Foreclosures plunge in first half of 2011

Foreclosure filings fell dramatically during the first half of the year as processing delays at the banks, which are strapped with excess inventory of repossessed homes, continued to skew the numbers — and falsely raise hopes that the housing market is staging a recovery.

Foreclosure filings plunged 29% compared with the same period a year ago and were down 25% from the last six months of 2010, according to the latest report from RealyTrac, an online marketer of foreclosed properties.

Through June 30, 1.2 million U.S. homeowners — or one in every 111 households — received a foreclosure filing, according to RealtyTrac.

The deceleration in defaults continued as the year wore on with second quarter filings — at 608,235 households — marking the lowest quarterly total since the end of 2007, when the mortgage meltdown was still in its youth.
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RealtyTrac’s CEO, James Saccacio, sounded a sour note, however, contending that the drop-off in filings can be traced not to economic improvement or a pick-up in the housing market, but to processing delays brought on by the robo-signing scandal in which it was discovered that bank employees were signing foreclosure documents without following proper protocols.

“[That’s what is] pushing foreclosures further and further out — we estimate that as many as 1 million foreclosure actions that should have taken place in 2011 will now happen in 2012, or perhaps even later,” Saccacio said.

As a result, it will only prolong the housing slump, he said.

“This casts an ominous shadow over the housing market where recovery is unlikely to happen until the current and forthcoming inventory of distressed properties can be whittled down to a manageable number,” said Saccacio.
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The average time to process a foreclosure — from the initial notice to the final sheriff’s or trustee’s sale — rose to 318 days in the second quarter, up nearly 7% from 298 in the first quarter and 15% year-over-year, according to RealtyTrac.

In New York, the process now takes an average of 966 days — or more than two and half years. In New Jersey, it’s 944; and in Florida, 676. Texas is quickest out the door with a scant 92 days, followed by Virginia at 106.
…
Ultimately, the artificial foreclosure delays are prolonging the housing market’s ills, said Arnold Kling, an economist with the Mercatus Center at George Mason University and formerly with Freddie Mac.

“The government should be trying to speed foreclosures, not stop them,” he said. “Postponing foreclosures may simply be putting off the inevitable market bottom. We need to remove barriers to foreclosures.”
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“Instead of housing returning to somewhat normal condition by 2014, we’re looking at 2015 or even 2016,” he said. To top of page.

Posted in Economics, Foreclosures, Housing Bubble, National Real Estate | 190 Comments

Altos: Home prices trending positive

Posted on July 13, 2011 by grim

From HousingWire:

Home prices, inventory levels trend up: Altos Research

Home prices and inventory levels are trending upward in many U.S. cities tracked by Altos Research, according to the firm’s latest Housing Market Update.

The median national home price for all 26 markets covered by Altos hit $450,358 in June, up from $444,273 in May.

Meanwhile, in the past three months, listing prices rose 2.31% and inventory levels grew 3.52%.

The only city to report a drop in home prices in June was Las Vegas and even that was a mere 0.86% decline when compared to the month before.

When analyzing home price data for the past three months, both New York and Las Vegas experienced falling prices, reporting drops of 2.2% and 1.61%, respectively, Altos said.

Inventory rose in 12 of the major markets tracked by Altos last month, while falling in the remaining 14 composite cities. The biggest inventory jump occurred in Boston, with the city’s inventory level rising to 5.8%. Phoenix, on the other hand, experienced the largest inventory level drop, falling 7.93%.
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Comparatively, the latest S&P/Case Shiller report said the average price of a single-family home rose for the first time in eight months during the month of April. Altos suspects the S&P/Case-Shiller will be reporting a few positive trends through September.

At the same time when looking forward, Altos foresees a slowing or plateau of home prices in the fourth quarter.

Posted in Economics, National Real Estate | 201 Comments

Shocked to hear a Realtor association is overstating sales prices

Posted on July 12, 2011 by grim

From the Chicago Tribune:

Realty trade group overreported Chicago home prices

The Illinois Association of Realtors said Monday that the median price it reported for home sales within the city of Chicago was inflated in May and mistakes in its reports may go back more than three years.

Errors in the reports can wrongly inflate consumer confidence in a housing market that has been struggling to recover for the past 4 1/2 years. It also can undermine the credibility of the real estate organizations that compile and disseminate the statistics. The Tribune and other media outlets report that data as part of regular coverage of the housing industry because it provides a pulse of the market.

The state Realtors’ group acknowledged the errors after the Tribune, acting on a tip, questioned the accuracy of the May report. The group believes median prices for both condos and detached single-family homes sold within the city contain errors.

“It’s not just May,” said Mary Schaefer, a spokeswoman for the Illinois Association of Realtorsadding that the mistakes appear to go back at least through January. “We’re trying to figure out where the bug occurred. We should have caught it. We pride ourselves on having accurate data. We want to make sure there is 100 percent clean data.”

The size of the Realtors’ errors is statistically significant, at least based on the May median price for condo sales wtihin the city. In its official report that has now been discredited, the trade group previously said that the median price of an existing condo sold in Chicago in May was $299,000, compared with $271,150 recorded in May 2010. In fact, the median price was $243,000, compared to a year-ago price of $265,000, according to data from Midwest Real Estate Data LLC, the multiple listing service for the Chicago area.
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The Chicago Association of Realtors “will continue to work diligently with the Illinois Association of Realtors and Midwest Real Estate Data to discover where the reporting error has occurred and improve the process by which we collectively report the data on the Chicago marketplace moving forward,” a spokeswoman said in an emailed statement. “Ensuring the housing data reported on the Chicago market is accurate remains our top priority as we are committed to helping consumers understand the Chicago real estate marketplace with the most exact information possible.”

Schaefer said the group does not think any fraud is being committed. “There’s no playing with the numbers, this is technical,” she said. “It’s how the system is reading the data.”

Posted in National Real Estate | 155 Comments

Time to buy?

Posted on July 11, 2011 by grim

From Time:

Why Real Estate May Be The Buying Opportunity of the Decade

No one knows what the economy or the stock market will do over the next six months. But when your time horizon is 20 years, the outlook is actually a lot clearer. And right now, all the trends are lining up to make real estate a fantastic long-term buy.

Of course, if you look at recent real estate statistics, the picture is a total catastrophe. Home prices are down by a third, and the decline recently exceeded that of the Great Depression. Across the country, 2 million homes are in foreclosure and another 2 million are more than 90 days behind in their payments. The backlog of foreclosures could last two or three years.

Falling home prices plus the foreclosure backlog probably mean a flat-to-down market over the next couple of years. But beyond the current desolation, the outlook is exactly the opposite. In fact, three different trends are aligning that figure to produce a major home-price boom over the next 20 years.
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The real estate market may not quite have bottomed out yet. And the boom I’m talking about will probably take more than a decade to unfold. It also may not apply as directly to real estate stocks. Home builders have more complex problems and real estate investment trusts often depend on commercial properties that are sensitive to business conditions. But the next two or three years should offer exceptional opportunities for buying actual real estate – primary residences and vacation homes – preferably somewhere that’s green.

Posted in Economics, National Real Estate | 155 Comments

Vacationeers take advantage of price slump in Vernon

Posted on July 9, 2011 by grim

From the NY Times:

On Vacation at Home, All Year Long

WITH ample opportunities to ski, golf, swim, hike and bike, life in this rural township in the New Jersey Highlands can feel like a year-round resort, residents say.

“I call it ‘being on vacation’ living here,” said Allison Callow, a real estate agent who has lived in Vernon Township for 16 years. She and her family traded in a three-bedroom colonial on one-tenth of an acre in Bergen County for a four-bedroom bilevel on more than an acre abutting a state park, which they bought for $158,000.

Activities in Vernon center on nine lake communities and the Mountain Creek ski resort, the state’s largest. Ownership of Mountain Creek has recently changed hands, and the new proprietors are spending an estimated $20 million on projects that include a 50,000-square-foot day lodge at the base of the 167-acre ski facility off Route 94.

“I see the investment being made by the resort industry as palatable proof that we’re moving ahead,” said Vic Marotta, the town’s first elected mayor, who took office on July 1. “We have a golden opportunity here. How we nurture it and see it through will determine what Vernon looks like in the future.” Mr. Marotta had also served as mayor when it was an appointed position.

Another change that may shape Vernon’s future are new sewer lines, which will largely serve Vernon’s commercial and recreational centers and could attract new businesses and retailers.

The real estate slump has had the effect of bringing in a new wave of second-home buyers and investors to the 1,500 condominiums at Mountain Creek. “We discounted very heavily, and we sold them,” said Andrew Mulvihill, the president of real estate investment at Mountain Creek, noting that his group sold 80 units this past winter.

Among the beneficiaries were Milo Chan and Winnie Donahue, who closed last month on a furnished three-bedroom town house in the Black Creek Sanctuary area, paying $170,000 for a unit that sold for $524,950 in 2004, according to Carol Williams, an agent at Prudential Gross & Jansen Highlands Realty. The couple and their two children, who live in Manhattan, plan to use the town house for weekend getaways in the summer and during ski season. While they weren’t actively looking to buy a second home, Ms. Donahue said the price, and the fact that it was furnished, made the deal irresistible.

“We wanted something turnkey, but this was ridiculous,” said Ms. Donahue, an advertising consultant. “It was a great buy at a great time that just fell into our laps.”
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Mark and Julie Bush were able to take advantage of those dropping prices by waiting it out to buy their new-construction four-bedroom, two-and-a-half-bath house on 3.2 acres. Mark Bush, 30, grew up in Vernon, but was most recently living in a condo here with his wife and two children. For a year and a half, he said he had been keeping his eye on a new house with great views of the mountains.

“Contracts had fallen through and I saw the price keep dropping every couple of months,” said Mr. Bush, a certified public accountant. In January, the Bushes moved into their new house, paying $355,000 for a house originally listed at $499,900.

Posted in Economics, Housing Bubble, North Jersey Real Estate | 90 Comments

Reaching a bottom in pricing?

Posted on July 8, 2011 by grim

From Bloomberg:

Real Estate Forecast: Home Prices Limp into 2012

In the second half of 2011, U.S. home prices will continue decreasing in general, with certain markets experiencing growth. Do you live in a likely gainer?

Home sale prices in the U.S. are expected to fall a further 2.4 percent in the second half of 2011, compared to the first half, as bank-owned properties drive down prices, unemployment remains high, and consumer confidence stays weak, according to a report released Friday, July 8, by Truckee (Calif.)-based data and valuation firm Clear Capital. Of 50 U.S. markets tracked for the report, only five metro areas are forecast to produce home-price gains in the second half: Washington, New York, Orlando, Dallas, and San Francisco.

U.S. home prices fell by 3.2 percent in the first six months of 2011 compared to the previous half, with median home prices dropping to $170,000, despite a 0.9 percent increase in the second quarter, estimates Clear Capital. The peak of the market was in summer of 2006, at $240,000, indicating a median price decline of nearly 31 percent since then.

The modest increase in the second quarter may be seasonal, as homebuying typically picks up in the warmer months. It is nonetheless encouraging, says Alex Villacorta, director of research and analytics at Clear Capital. “That’s not bad, as we’re under heavy inventory levels, high unemployment, and consumer confidence levels are not where they need to be,” he says. “It’s not the type of increase that signifies a V-shaped recovery. It will be more muted.”
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Before the housing collapse, the number of distressed sales historically made up a small percentage of the market. In the first half of 2011, however, bank-owned homes represented more than 30 percent of total sales, which is far above pre-2006 levels of less than 5 percent, according to Clear Capital. “A lot of the decline is a result of distressed sales,” says Celia Chen, senior director of the Moody’s Analytics research staff, specializing in housing economics. In 2010 there were 1.7 million distressed sales, up from an average of 450,000 per year during the pre-collapse period from 2000 to 2005, according to data from Moody’s.

The rate of decline has tapered off in recent months, following a slow winter homebuying season and a double dip earlier this year. Prices are expected to be less volatile, though “it is unlikely national home prices have reached a true and sustainable bottom,” states Clear Capital’s report. The firm expects national home prices to drift slightly downward until next year because of such factors as the financial crisis in Europe and jammed discussions regarding the debt ceiling in Washington. By May, the unemployment rate stood at a high 9.1 percent, according to U.S. Bureau of Labor Statistics data.
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Under current conditions, and presuming continued job growth, Villacorta and Chen both say home prices may reach bottom in the first quarter of 2012. In its most recent economic projection, the Fed expects the jobless rate in 2012 to fall to between 7.8 percent and 8.2 percent, with gross domestic product growth anticipated at from 3.3 percent to 3.7 percent. “Those [price] upticks from April are being sustained,” says Villacorta. “Albeit slim, it’s a step in the right direction.”

Posted in Employment, Housing Bubble, National Real Estate | 286 Comments

Flash! Hard to afford a big house on a big lot in Jersey

Posted on July 7, 2011 by grim

Affordability is a little bit of a sticky topic. Realize that a house doesn’t need to be affordable by the median income to be saleable, it just needs to be affordable for it’s single buyer. But this leads to a bit of a catch-22, how can these new homes be “unaffordable” if they have clearly all been sold and are currently occupied. They certainly must have been affordable by someone. Less affordable to the median buyer? Sure, but does that really matter at all? Crux of the problem is that in all of this is the assumption that the median buyer should be able to afford a home. Says who, and why? Restricting development through larger lot sizes and environmental restriction will constrain supply, and with that cause rising prices. From a development perspective, it’s building that first square foot which is the most expensive, after which the marginal cost per square foot falls off dramatically. It pays for builders to build very large houses, as long as they’ve got buyers (which they do).

So again, what is affordability? Are we talking about an economic issue here or a moral one (right to the American Dream)?

From the Record:

Big homes, big lots making N.J. even more unaffordable

New Jersey’s problem with suburban sprawl is getting worse, according to a new report.

Development of big homes on big lots and zoning that favors businesses have made it tougher for lower-income residents to afford to live in higher-income suburban towns today than it was in 1970, a study by Rowan University found.

All this occurs despite the long effort to push towns to add affordable housing and adhere to “smart growth” initiatives and zoning rules, the report says.

“Municipalities are making it almost impossible to build apartments and town houses that are affordable to middle-class New Jerseyans,” said Adam Gordon, spokesman for Fair Share Housing Center, which paid for the study. “Middle-class families cannot afford a 3-acre home.”
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The report says development of large suburban lots holding just one or two homes an acre dominated the state since 1986, while the construction of more affordable apartments, town houses and smaller single-family developments tapered.

Before 1986, 58 percent of residential development was in cities and already built-up suburbs. Since then, two-thirds occurred in rural and less compact areas, the report says.

The report also says municipalities have focused on industrial and commercial development, which pays tax dividends, rather than multi-unit apartments and town houses that bring in more school-age children.

“Municipalities want as few households as possible on any given piece of land,” said Tim Evans, research director for New Jersey Future, a non-partisan research group that helped produce the report.

Posted in Economics, New Development, New Jersey Real Estate | 151 Comments

Home prices ex. distressed home sales? Of course the math works, but does it make sense?

Posted on July 6, 2011 by grim

Applying the same logic to the boom would mean we should have been removing any overly optimistic prices, or sales involving bidding wars, because their high pricing was not illustrative or indicative of the overall market. Why was nobody suggesting this at the time?

From the Philly Inquirer:

Housing price drop is far less if distressed properties aren’t counted

In the five-plus years since the housing bubble burst nationwide, home values have dropped precipitously, dragged down by record numbers of foreclosures.

In the hardest-hit areas of the country, prices have dropped 50 percent or more, and continue to decline, sales data show. Even in this region, with relatively fewer foreclosures, prices are down 15 percent since August 2007.

Remove sales of distressed properties from the mix, however, and the drop in home prices is much less precipitous, the data show.

In the city of Philadelphia, for example, median prices for single-family houses fell 3.2 percent in May from the same month of 2010, according to CoreLogic, which provides real estate data to businesses and government.

Subtract lower-price bank repossessions and short sales, and the year-over-year city decline was just 1.2 percent, the data show.

Short sales are those in which the lender accepts a sale price that is lower than the balance of the seller’s mortgage, usually as an alternative to foreclosure.

In some parts of the country, eliminating distressed sales turns price losses into gains. In the Washington, D.C., area, for example, CoreLogic says, a 1.5 percent decline became a 3.9 percent year-over-year increase.

Why factor in distressed sales at all? some in the housing industry have asked.

In a recent discussion of his company’s quarterly results, Robert I. Toll, executive chairman of the Horsham-based luxury-home builder Toll Bros., said: “We believe that averaging distressed and non-distressed sales data provides a misleading picture to the public regarding home-price direction.”

By contrast, Toll said in his statement, “we are experiencing flat to slightly increasing pricing in most markets.”

CoreLogic’s data bear out Toll’s contention. Nationally, May median home prices were down 7.4 percent from the same month in 2010. When distressed sales are removed, the decline is 0.4 percent, just about flat.
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Excluding distressed transactions, which account for about one-third of all sales, would shut out a very large part of the current housing market, said Mark Zandi, chief economist at Moody’s Analytics in West Chester.

Such properties compete with other houses on the market, Zandi said, “and as long as they account for such a large share of home sales, they will weigh on all house prices.”
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Zandi said it was “an encouraging sign” that non-distressed house prices were holding up so well.

“This suggests that once the distressed share begins to decline, house prices will rise, even if the share remains high.”

Posted in Economics, Housing Bubble, National Real Estate | 118 Comments

NJ takes aim at foreclosure rescue scams

Posted on July 5, 2011 by grim

From the Star Ledger:

N.J. Legislature bill would regulate foreclosure rescue fraud, offer relief to distressed homeowners

They call themselves “foreclosure rescue” companies, but in many cases they end up enriching themselves while destroying whatever credit-worthiness a distressed homeowner has.

A bill to regulate the industry overwhelmingly passed both the state Senate and Assembly last week and housing and foreclosure experts said it will at least bring some relief to the already daunting task of helping people stay in their homes.

“It’s some of the most egregious kind of predatory lending, the foreclosure rescues,” said Peggy Jurow, who leads the Foreclosure Defense Initiative at Legal Services of New Jersey. She said it can take years to help victims sort through the complicated mass of subsequent lawsuits and paperwork, even if the consultant has been jailed.

“People want to believe that they can get help and they get this card in the mail and it says, ‘I can help you save your home,’” she added. “It’s literally a swindle. This regulates it and puts some bright lines into this practice, which is important.”

There are currently more than 118,000 houses in some stage of foreclosure in New Jersey, and another 55,200 properties that are more than 90 days delinquent on the mortgage, according to LPS Applied Analytics, a real estate data firm.
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Last year, Attorney General Paula Dow obtained $17 million in legal settlements through rescue fraud prosecutions, including Hope Now Financial Services and Hope Now Modifications of Cherry Hill, New Hope Modification of Bellmawr, and New Day Financial Solutions of Somerset County, said spokesman Lee Moore. The office continues to investigate similar consumer complaints.

The U.S. Attorney’s Office in New Jersey has also prosecuted several foreclosure rescue fraud cases, and in May U.S. Attorney Paul Fishman announced the guilty plea of Ronald Harris, of Piscataway, who admitted to his role in a scheme that defrauded mortgage lenders of over $10 million, $1.15 million of which Harris personally received.

Posted in Economics, Foreclosures, New Jersey Real Estate | 163 Comments

America Loves Houses

Posted on July 1, 2011 by grim

From the NY Times:

Despite Fears, Owning Home Retains Allure, Poll Shows

Owning a house remains central to Americans’ sense of well-being, even as many doubt their home is a good investment after a punishing recession.

Nearly nine in 10 Americans say homeownership is an important part of the American dream, according to the latest New York Times/CBS News poll. And they are keen on making sure it stays that way, for themselves and everyone else.

Support for helping people in financial distress over housing is higher than support for helping those without a job for many months.

Forty-five percent of the respondents say the government should be doing more to improve the housing market, while 16 percent say it should be doing less. On the politically contentious issue of direct financial assistance to those having trouble paying their mortgages, slightly more than half of those polled, 53 percent, say the government should help. And almost no one favors discontinuing the mortgage tax deduction, a prized middle-class benefit that has been featured on some budget-cutting proposals.

President Obama, who has been criticized for both doing too much to help the housing market and for not doing enough, was given poor marks. Only 36 percent of those polled approve of what Mr. Obama has done, while 45 percent disapprove.
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In assessing blame for the housing crash, people are increasingly seeing financial institutions as the central culprit. Amid the swirl of recent disclosures about banks following improper and illegal procedures in pursuing foreclosures, 42 percent blame lenders, while 29 percent blame regulators. When the question was asked in early 2008, as the crisis was still building, the numbers were reversed, with 40 percent blaming regulators and 28 percent blaming lenders. Only a handful of respondents at either moment blamed the borrowers themselves for taking loans they could not afford.
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Making an offer for a house, something often done in past generations with little apprehension, is now riddled with worry. Only 49 percent call it a safe investment, while 45 percent feel it is risky. In a market where prices are consistently dropping, there is no easy exit.
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As the housing market slumped over the last few years with a speed and magnitude not seen since the Great Depression, aspects of homeownership have been debated as never before. There are tough questions about the role the government should take. These include how much of a down payment lenders should demand, whether lenders should be restrictive or expansive in granting new loans, how much assistance to give those on the verge of foreclosure, and whether real estate will ever again be the retirement savings vehicle it once was.

While the debate has been loud, there was little evidence of people’s views that went beyond the anecdotal. This poll offers a window onto widespread opinions at a critical juncture.

Before the crash, housing was widely deemed one of the safest possible investments. Few experts thought there was the possibility of a nationwide downturn. But after it happened, the effects were widespread and painful.

Posted in National Real Estate | 366 Comments

Pending home sales surprise in May

Posted on June 30, 2011 by grim

From Bloomberg:

Pending Sales of U.S. Existing Homes Rise by 8.2%, Almost Triple Forecasts

The number of contracts to buy previously owned U.S. homes rose almost three times as much as forecast as falling prices made properties more affordable.

The surprising 8.2 percent increase in the index of pending home resales from April followed a revised 11 percent drop the prior month, the National Association of Realtors said today in Washington. Economists forecast a 3 percent gain, according to the median estimate in a Bloomberg News survey.

While the measure of contract signings has been volatile this year, last month’s index level is 0.1 point lower than the January figure, indicating residential real estate has made little headway. Foreclosures, unemployment at 9.1 percent and stringent loan terms are holding back demand even as a decline in home prices attract some buyers.

“The market for existing homes is still extremely weak,” said Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts. “Existing-home sales will probably improve in June based on this reading, but probably not a lot.”

From the WSJ:

Pending Home Sales Up 8.2% in May

The number of people who signed contracts to buy previously occupied homes in the U.S. rose last month, but was still low from a historical perspective, as the housing market remained a weak sector of the economy.

The National Association of Realtors’ seasonally adjusted index for pending sales of existing homes increased 8.2% on a monthly basis to a reading of 88.8, the industry group said Wednesday. It was the strongest monthly gain since last November.

Economists surveyed by Dow Jones Newswires had expected pending home sales would rise by 10.0% in May from an original April reading of 81.9. That month’s reading was revised up to 82.1.

The pending sales index for May was 13.4% above its level in May 2010, a month in which sales fell dramatically after the expiration of a federal tax credit.
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The index was up 12.9% in the West on a monthly basis and 10.5% in the Midwest. It rose 7.3% in the Northeast and 4.1% in the South.

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