FHFA’s Bulk Foreclosure Sale Scrutinized

Foreclosure Property Sold

The Federal Housing Finance Agency (FHFA) has received criticisms from the California Association of Realtors (CAR) for pushing through with its planned bulk sale of foreclosed properties. The sale is part of an agency program designed to ease the REO inventory of the government-sponsored enterprise (GSE), Fannie Mae.

Realtors have argued that the move will be detrimental to the U.S. housing market, particularly now that inventory is tight in most areas. They claim that investors are benefitting from the deal at the expense of taxpayers and have called for a change of leadership within the FHFA.

Reactions to the Deal

A total of 970 distressed homes in Arizona, California and Nevada were sold to real estate investment firm Colony Capital on November 5, 2012. The company, which won the properties at a government auction, will pay $176 million to acquire the REOs and convert them into rental houses. According to the FHFA, it will help ease the oversupply in Fannie Mae's books without pushing back the recovery of the housing industry.

Realtor groups from Florida and California have expressed disagreement over the federal agency's reasoning, noting that demand for residential properties has picked up significantly during the year. They argued that the initiative is not needed now since industry dynamics are changing and the homes should have been reserved for would-be homeowners.

California realtors, in particular, have emphasized the severe shortage in housing supply in the state, which they say resulted in increased prices in most areas. They reveal that in the Inland Empire, the median selling rate of residential properties have gone up by 15% between February and September 2012.

Implication on Homebuyers

Opponents of the bulk sale have also called attention to the narrowing discounts offered for bank owned houses around the country. The nationwide foreclosure discount as of September 2012 is pegged at 7.7%, a decline from the 9% discount posted from the previous year. Data showed that in Las Vegas and Phoenix, two of the metro areas hit hard by the housing crisis, discounts for buyers of foreclosure homes were non-existent in September 2012.

Because homes are becoming more expensive compared with the past five years, critics of the bulk sale argue that low-priced housing units should be reserved for people who plan on using them as primary residences. This, they further claim, will help the recovery of the residential property market more and will benefit ordinary taxpayers, rather than big investment companies.

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Georgia Housing: Home of Singer Up for Sale; Local Veterans Get Housing Aid

Home on a Life Preserver

The housing problem does not discriminate. Rich or poor, almost everyone was affected by the crisis one way or another. Although the market is starting to recover, it still carries signs of the six-year-long battle and will continue to do so for years to come.

The non-selective impact of the foreclosure crisis can be seen in most areas of the country, including Georgia. Although the state’s housing market has enjoyed a revival during the year 2012, with prices of residential properties climbing up for five consecutive months between March and July, more efforts are still needed to get it back to where it was prior to 2007.

Veterans Welcome Assistance

A big part of the state-wide efforts to address housing issues are programs geared towards veterans. The U.S. Department of Housing and Urban Development estimated that there are around 2,000 homeless military personnel in the state. That is why a $1 million Veterans Affairs grant has been provided to help homeless veterans and military families who are facing eviction.
The number of military employees whose properties are in distress is expected to rise further as U.S. troops in Afghanistan and Iraq are withdrawn. The country is bracing for this projected increase by putting into place employment and housing assistance specifically designed to help American troops who will be returning home.

Braxton’s Georgia Home in the Market

Meanwhile, it is not just veterans and lower and middle-income families who are experiencing loss of homes. Recently, singer Toni Braxton’s mansion, which has been foreclosed on, has been put up for sale for $1.1 million. The house was reportedly purchased by the singer for $1.5 million. The luxury home is over 11,000 square feet and has six bedrooms and six baths.

Braxton also lost her Nevada residence to foreclosure, which eventually got sold in 2010. Her Georgia home is expected to attract offers, especially since homebuyers are starting to flood the market as most of them try to take advantage of the low interest rates. Confidence in home ownership is returning, which can only mean more good news for home sellers.

Inventory Outlook for 2013

Most local real estate agents believe that the buying frenzy will continue on until next year. They predict that inventory of for-sale homes will decline further, mainly because of active investors. As the national economy slowly gets better, values of properties will continue to rise and purchasing houses will be on the minds of most people once again.

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What Obama’s Re-Election Will Mean for Housing

Obama Speech

It is another four years for U.S. President Barack Obama at the White House. Another four years battling it out with Republican-dominated Congress. It is to be expected that the president will face a stiff challenge to get his measures passed, just like before.

One area where the Democratic Party is expected to get some cooperation from their Republican counterparts is in housing. The foreclosure crisis that rocked the real estate industry in the past six years has seemingly taught legislators how important cooperation is in solving this particular problem.

Where Housing is Now

Obama will be starting his second term at office with a slightly improved housing sector. At least, compared to the first time he got elected. Sales of homes are up and prices are also rising. Foreclosure filings are down in most areas and inventories of houses for sale are starting to dwindle.

As the home sector improves, so does the confidence of homebuyers and investors. A lot more people are seeing real estate as a viable investment opportunity, with independent investors accounting for a considerable percentage of buyers in the past year. After all, there is more than one way to earn profits from real estate investments.

A big number of these independent investors are people who feel that they will gain more by investing in cheap foreclosures than relying on their 401(k) accounts. As returns from 401(k) retirement accounts continue to decline, more Americans are getting convinced that investing their money on foreclosed homes that they can rent out or sell later is better than relying on their retirement savings.

What the Next Four Years Can Bring

Despite improvements in the housing industry, it is a fact that more efforts are needed to bring housing back to normal. Prices and sales may be rising and inventories may be declining, but there are still a lot of homeowners who are underwater and are in danger of losing their homes to foreclosure.

This is the main issue that the Obama will need to address as he starts his second term at office. Majority of housing analysts expect the government to introduce more refinancing programs to get underwater homeowners out of trouble and to prevent whatever progress has been made from being undermined. And in this, Republicans and Democrats are likely to be on the same side.

Regulations on bank lending are also issues that the Congress is expected to address the moment it reconvenes. And so is reforming Fannie Mae and Freddie Mac, the two government-sponsored enterprises that have played such important roles in real estate. Housing may just determine what legacy Obama will leave when he steps down four years from now. Every American is surely hoping that it is a good one.

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Texas Housing Market Showing Signs of Strength

The housing industry of Texas is improving, albeit in a gradual manner. Majority of the state's local markets are recording rising sales and increases in median home prices. Foreclosure filings are also dropping, with third quarter numbers showing a healthy year-on-year decline.

Realtors, though, have admitted that things are far from perfect. Some local areas still worry about higher-than-normal inventory, while others are reporting longer market stays for homes that are up for sale.

Foreclosure Numbers Dwindling

Texas is one of the non-judicial states in the U.S., which means that a foreclosure action can proceed in the state without having to go through the courts. On average, it takes three months to foreclose on a property in TX, compared with judicial states where it can take as long as three years.

Texas State in USA Flag

National housing data has shown that in the third quarter of 2012, foreclosures have declined by 29% in non-judicial states compared with last year. Housing experts believe that the faster process is preventing Texas and other similar states from experiencing a long, drawn-out procedure that is likely to hinder recovery.

Signs of an Improving Housing Market

In most local housing markets in the state, sales have picked up in the third quarter, while prices are also rising. In Hunt County, for example, realtors reveal that majority of home sellers are able to get their asking price, with sellers getting 91.1% of their original asking rates.

However, there are still concerns in certain local markets over a higher-than-normal inventory. Although home sellers believe that these inventories will eventually dwindle, they admit that the length of time it takes to work through the supply of unsold homes may vary from one county or city to another. In Hunt County, houses remain unsold for an average of 106 days during the third quarter, representing a 9.3% increase from the same period of 2011.

What's in Store After the Election?

Realtors have reported healthy home-selling activities during the spring, as is traditionally expected in normal housing markets and in areas that are on their way to stability. Despite concerns over market stays and inventories in certain areas, realtors are optimistic that the momentum that home sellers are experiencing in Texas will continue right after the elections.

They predict that the growing confidence among consumers and the slowly recovering economy will bring buyers out after the presidential election and the holiday season. It is expected that in 2013, majority of the state's local housing markets will be able to bring their inventories down to healthier levels.

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Past and Present Foreclosure Victims Getting Good News

House Keyws on a Foreclosure Notice

Homeowners who have been through foreclosure are starting to re-enter the market as the U.S. housing industry continues to recover. Meanwhile, homeowners currently facing foreclosure are getting some relief as the government steps in to help.

In both scenarios, the U.S. government is on hand to provide some help. However, most housing industry experts attribute the positive developments to the recovering housing sector, which they believe is giving former foreclosed homeowners a new sense of confidence and giving current distressed property owners a new sense of hope.

The Return to Homeownership

A number of Americans who have lost their houses to foreclosure are now buying homes, three years after getting foreclosed on. This is made possible with the help of loans backed by the Federal Housing Administration (FHA). This development is expected to assist thousands of former homeowners who have reached, or about to reach, the three-year mark since falling victim to the housing crisis.

Government-supported enterprises Freddie Mac and Fannie Mae actually require a seven-year wait period before providing mortgage to foreclosed homeowners. For the part of the FHA, three years is the waiting period, provided that the potential homebuyers have achieved good credit ratings and can demonstrate their ability to pay their mortgage.

Aside from the assistance provided by the FHA, housing market observers believe that the recovery of the residential property market is also a reason behind former foreclosure victims' decision to become homeowners once again. A considerable number of homebuyers have entered the market in 2012, owing partly to the record-low mortgage rates and the low prices of houses that are up for sale.

Distressed Homeowners Welcome Extension

Meanwhile, those who are still facing potential foreclosure also got hold of some positive news. The deadline for the federal government's Independent Foreclosure Review has been extended. This program concerns the review of foreclosure filings initiated between January 1, 2009 and December 31, 2010.

The program is meant to examine whether there have been lender mistakes made during the processing of foreclosure actions. Homeowners who believe that their properties should not have been put under foreclosure have until December 31, 2012 to apply for a review. The extension has been warmly welcomed by homeowners all around the country who feel that foreclosure actions against them are invalid or unjustified.

The two pieces of news have given hope to current homeowners and have also made potential homebuyers more confident about the future of homeownership in the U.S. As the housing sector continues to recover, more people are expected to enter the home-buying market, something that can definitely help the real estate industry recover faster.

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New Twist to the Mortgage Settlement Agreement Debate

Mortgage Application Approved

The issue of the mortgage settlement between financial institutions and U.S. states has been the focus of debate since it was first proposed. Before, the arguments center on whether it should be accepted and whether it is punishment enough for wrongful foreclosures committed by certain lenders.

Although some deemed it too light a punishment for banks involved in erroneous foreclosure processing, the deal still went through. Now, the debate is focused on another area of the settlement. This time it is about who gets what and whether those who get some deserve it.

The Fight Over the Payment

It is now a moot point whether the $26 billion that banks paid to U.S. states to settle allegations of mortgage fraud is enough or not, given that the settlement did push through and lenders have already paid the money. However, the mortgage settlement issue is not over yet as another aspect of the agreement is now under scrutiny. This time, it is about whether state politicians have the right to take a share of the money.

The settlement is meant to help underwater homeowners or those whose mortgages are worth more than the value of their homes. In most states though, legislative bodies are reportedly taking a cut from the settlement and using the money to patch up budget shortages. As expected, homeowners and homeowner advocacy groups are not too happy.

Court Battles Over the Money

In Arizona, housing advocacy groups are attempting to have a lower court ruling overturned, which declared that it is legal for $50 million of the settlement to be handed out to the Arizona Legislature. State legislators, for their part, have argued that the state also suffered, since the housing crisis resulted in lower tax collections. They claim that the money will be used to balance the state budget.

The same battle is ongoing in several other states. In California, $410.5 million of the payment have reportedly been taken by the governor's office, while Georgia's legislature has taken $99 million. However, not all state governments and legislatures are being accused of grabbing for some share. Colorado and Ohio have been praised by housing advocates for their decision to stick with the original plan of using the settlement payment for housing programs.

Who Should Get the Payment?

It is a fact that the settlement was meant to assist distressed homeowners in various areas of the country. It is also a fact that most states are suffering from budget deficits. However, homeowners' advocates are asking whether channeling part of the money into states' general funds is fair and justified.

They assert that doing this will not help troubled homeowners and that the amount that most local governments are getting will not be enough to solve the budget deficit problems of most states anyway. Whoever will get the last say in this debate is still unsure, but it is to be expected that this will drag on for months, or even years, before it gets resolved.

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California Housing Finding Its Feet

Housing Increasing

California is one of the U.S. states hit hardest by the foreclosure crisis. The state though, is showing signs of recovery and analysts expect these improvements to continue on for years to come. So what are the factors behind California's recovery?

Early on, housing experts have asserted that lowering the inventory of houses for sale is the first step to helping the sector recover and this can be done by promoting foreclosure home buying. These steps seem to be working fine for California.

Declining Inventory Welcomed by Sellers

In various areas of the state, inventory of houses for sale is declining as confidence over the housing sector reaches a healthy level and more homebuyers enter the market. The San Francisco Bay Area is one example of a California local market experiencing a healthy housing recovery.

Inventory in the Bay Area has declined in the third quarter of 2012 and sellers are reporting multiple offers for the properties they are selling. Despite the lower inventory, prices of residential properties are still low enough for home hunters to get a good bargain. In the Bay Area, median price has declined slightly to $577,358 in the third quarter from the previous three months' $577,546 median rate.

Fewer Foreclosure Filings

Aside from increased interest from homebuyers and real estate investors, the state's housing market is also benefiting from the declining number of foreclosure filings. The number of filings in California for the third quarter of 2012 has reached its lowest level in almost five years. Housing data for the region showed that fewer homeowners are defaulting.

Homeowner defaults in the state have declined by 45% in the third quarter of the year compared with the same three-month period of 2011. This, along with surging purchasing activities from investors and independent homebuyers, is contributing greatly to the recovery of the state's housing industry.

The Future of California Housing

Although California was one of the top three states hit hardest by the foreclosure crisis, its recovery is not that much surprising for most Americans. For one, the state is a favorite destination for homebuyers, even those who are from overseas. The good climate and its high profile reputation are part of the reasons behind its popularity among people looking for homes.

Housing sector observers expect the California market to continue to improve, but most of all, they also expect homebuyers and investors to be much wiser when it comes to buying homes. California has learned the ramifications of uncontrolled lending the hard way and it is to be expected that more care will be exercised by both homeowners and lenders starting now and onto the future.

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Kennedy Home Up for Sale; Realtors Expect Offers As Sales Pick Up in New York

House Front

The housing market of New York continues to improve as third quarter figures for 2012 show another sales growth. This marks the fifth quarter in a row that sales of residential properties in the state have trended up.

Prices are also stabilizing, demonstrating that the region's home sector is starting to climb from the bottom. Industry analysts expect the positive trend to continue for the rest of 2012 and onto the coming few years.

Solid Performance from NY Housing

In the first nine months of 2012, sales of residential properties in New York have gone up by more than 6% compared with the same period in 2011. Pending sales – a reliable gauge of future sales – are also up over the same period by 15%. Median prices, on the other hand, rose by 4.4% during the third quarter compared with the same 2011 quarter.

Realtors believe that strong housing sales in the state are driven by record low mortgage rates, which have benefitted from the Fed's mortgage-buying activities. In addition, prices of homes have remained relatively affordable, despite an increase in median rate year-on-year.

Rise in Foreclosure Starts

Realtors are optimistic that prices will hold, despite the anticipated entry of more foreclosures in the market as September 2012 figures show that New York is one of the states that recorded a rise in foreclosure starts year-on-year. Analysts explain that this is because New York is a judicial state and courts are required to approve foreclosures, which means that the process is slower and backlog is to be expected.

Lenders are starting to catch up with the backlog, analysts further explained. They believe however, that the New York market has recovered enough to accommodate any potential increase in supply and that there are enough buyers to absorb distressed properties that may be added in the coming months.

Factors that Help Sell a Home

Meanwhile, the home of Robert F. Kennedy Jr. in Bedford has been put up for sale for a reported listing price of $3.9 million. Considering that the property has 14 rooms, a swimming pool and eco-friendly features, realtors expect offers to flood in.

However, some have noted that the recent controversies surrounding the death of Kennedy's ex-wife, Mary, may put off some would-be buyers. Housing experts though, have asserted that this will not be the case. They claim that serious buyers will only focus on whether the deal is good or not and most will not be too bothered with what happened in the property in the past.

And with its features and its location, the Bedford home is considered a steal by most realtors. Moreover, the price is considered reasonable, particularly for a property that has been refurbished just recently (2008).

Real estate agents believe that sellers who knew how to price their properties right will always get ahead of the competition, particularly now that buyers have become wiser about residential properties. Location, price and features will always trump any history associated with a residential property, agents have argued, especially in New York where most homes have one story or another behind it.

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Home Sellers Gaining Traction in Denver

Denver Colorado Road Sign

The housing market of Denver, Colorado is experiencing a relatively healthy recovery as evident from the rising number of residential properties getting sold and the improving prices of homes. Home sale figures for 2012 are much better than the previous year, particularly in the luxury home market.

Data showed that the number of luxury houses sold in the metro area from January to September 2012 already exceeds the total for the full year of 2011. In the previous year, 540 luxury residences were sold, compared with 542 for only the first three quarters of 2012. The local trend mirrors developments in the national housing market.

Factors Behind the Improving Market

Sales of residential properties priced above $1 million have risen by nearly 25% in August 2012 compared with August of last year. Housing market analysts have cited various reasons behind buyers' increased interest in luxury homes in Denver.

First, confidence over the housing market has improved dramatically. A big percentage of Americans believe that real estate is a good bet once more and becoming a homeowner is, again, a sound form of investment. Most of them also believe that housing will continue to strengthen in the coming years.

Second, the luxury home market benefits from strong performances by the stock market and third, jumbo mortgages are not as hard to come by as they had been a couple of years or so ago. And of course, interest rates are still down to a level that has not been seen for a long time.

Sellers Enjoying Benefits

As expected, home sellers in Denver, not just those involved in the luxury market, are gaining the most benefits from the improving residential real estate market. Aside from rising sales, prices have also improved in the region.

Latest home figures show that the prices of all types of residential properties in the region of Denver-Aurora-Bloomfield, including foreclosures and distressed homes, have risen by 8.6% in August of this year when compared with the same period of 2011. Real estate agents are predicting that prices will continue to strengthen until next year.

The improving home sector has renewed local home sellers' hopes, with most of them releasing the properties that they are holding off and making them available to investors and buyers looking for residential properties. Analysts believe that now is the best time for sellers to get their properties into the Denver market as buyers are more eager than ever to get into homeownership.

Competition Still Tight Among Sellers

Despite the considerable number of willing homebuyers, market analysts remind sellers that competition will remain tough, particularly since a lot of home sellers have held off some properties from the market during the housing crisis. They recommend making renovations and some improvements in the properties to better compete for homebuyers' attention.

For homebuyers, they also benefit since the quality of homes available has vastly improved as a result of sellers becoming more aware of the need to maintain the condition of properties to lure buyers who have become wiser. Bargains are still available, buyers just need to be patient and invest more time in looking for them.

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The Return of Home Flipping and the Emergence of Multi-Family Houses

The recovering U.S. housing industry is bringing with it some new trends. Some are old ones that are being resurrected and others have always been part of the housing scene but have never really gotten much attention.

Two of the emerging trends in 2012 that coincide with the recovering sector are the return of home flipping and the increased number of people opting for a multi-family home. There are several reasons behind these trends, but the main one is the strengthening residential property sector.

Home Flipping is Back!

It has not really gone away since some home flippers have continued flipping even during the housing crisis. However, its popularity has somewhat diminished during the housing downturn and only those who knew what it takes to make a home flipping venture work are able to brave the weak home selling market and continue to pursue this type of business.

Home Flipping

But times are changing. Consumers are gaining confidence in the housing sector once again as it continues to recover from the crisis that hit it in 2006. Data showed that flipped properties have risen by 25% during the first six months of 2012 compared with the previous year. Reasons for this are two-fold; first, prices of houses have become more affordable following the housing bust, therefore more flippers can afford to buy and renovate.

Second, the sector is recovering in most areas of the U.S., so more homebuyers are entering the market and a considerable percentage of them prefer flipped residential properties. Among the biggest metro areas of the U.S., Phoenix leads the nation in terms of number of flipped properties, followed by Las Vegas, Atlanta, Miami and Los Angeles.

Another Trend Tied up With Recovery

Buyers are returning to the market this year as shown by the rising number of home sales. Most of them however, have become wiser and more careful when it comes to choosing the homes they will purchase. The housing crisis has also left a lot of families without homes, so more people are looking for residential properties than ever.

Multi Family Houses

Enter the multi-family housing trend. Multiple generations have lost their homes due to the housing crisis, while others were unable to afford a house because of unemployment or financial difficulties. As the housing market recovers and the economy improves, more are able to afford to buy a house, but most still need help to acquire one.

This is part of the reason why properties that can accommodate extended families are becoming popular. Instead of a buyer purchasing a single-family house just for himself, some are purchasing a bigger one that can be divided to accommodate their kids, who also have their own families, and their parents, who are mostly retired.

This option is cheaper and there are tons of available properties to choose from as homebuilders construct more multi-generation homes to accommodate the demand. Hard-hit areas like Florida, Arizona and Nevada are examples of markets where multi-family housing is starting to thrive.

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