Walter Molony
WASHINGTON, May 12, 2011
Home sales are expected to stay on an uptrend through 2012, although the performance will be uneven with mortgage constraints weighing on the market, according to experts at a residential real estate forum today at the Realtors® Midyear Legislative Meetings & Trade Expo here.
Lawrence Yun, NAR chief economist, said existing-home sales have been underperforming by historical standards and will rise gradually but unevenly. “If we just hold at the first-quarter sales pace of 5.1 million, sales this year would rise 4 percent, but the remainder of the year looks better,” Yun said. “We expect 5.3 million existing-home sales this year, up from 4.9 million in 2010, with additional gains in 2012 to about 5.6 million – that’s a sustainable level given the size of our population.”
Mortgage interest rates should rise gradually to 5.5 percent by the end of the year and average 6.0 percent in 2012 – still relatively affordable by historic standards.
“A huge volume of cash sales, supported by the recovery in the stock market, show that smart money is chasing real estate. This implies that there could be a sizeable pent-up demand if mortgages become more readily accessible for qualified buyers,” Yun said. “The problem isn’t with interest rates, but with the continuation of unnecessarily tight credit standards that are keeping many creditworthy buyers from getting a loan despite extraordinarily low default rates over the past two years.”
Yun said that if credit requirements returned to normal, safe standards, home sales would be 15 to 20 percent higher. He added that some parents are buying homes with cash for their children, and offering them loans which provide better returns than bank accounts or CDs.
Yun projects the Gross Domestic Product to grow 2.5 percent this year and 2.7 percent in 2012, adding 1.5 million to 2 million jobs yearly over the next two years. The unemployment rate should decline to 8.8 percent by the end of 2011 and average 8.6 percent next year, returning to a normal level of 6 percent around 2015.
Housing starts are forecast to rise but remain below long-term trends, reaching 603,000 in 2011, up from 595,000 last year, and continue growing to 908,000 in 2012. New-home sales are seen at a record low 320,000 this year, rising to 487,000 in 2012. “A recovery in new homes will be slow because of the extra price discount in the existing home market,” Yun noted. In March, the typical new single-family home cost $53,300 more than an existing home.
Inflation appears to be relatively modest for now, with the Consumer Price Index rising 2.9 percent this year. “We’ll be closely watching the impact of fuel costs on consumer spending and inflation – that would slow economic growth, job creation and home sales,” Yun said.
Apartment rents are trending up, and are likely to rise at faster rates as vacancies decline. Following the correction in home prices, it has now become more affordable to buy in most of the country. “Twice as many renters had enough income to buy a home in 2010 in comparison with 2005, so we have a much larger pool of financially qualified renters,” Yun said. “Rising rents and excellent housing affordability conditions will encourage potential buyers who’ve been on the sidelines.”
Yun expects the median existing-home price to remain near $170,000 over the next two years, which would mark four consecutive years of essentially no meaningful price change.
Frank Nothaft, chief economist at Freddie Mac, holds similar views on the outlook. “Economic activity will accelerate this year – there will be no double dip in the economy,” he said. Nothaft is more optimistic on job growth, expecting 2.0 million to 2.5 million jobs created in 2011 with unemployment dropping to 8.4 percent by the end of the year.
Nothaft expects the 30-year fixed-rate mortgage to trend up to 5.25 percent by the end of the year, and for home sales to rise 5 percent. “National home price indices are close to a bottom and prices are likely to bottom sometime this year,” he said.
Refinancing activity in 2011 will be only half of what it was last year. “As a result, banks may become more willing to lend to home buyers,” Nothaft said.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.
Tuesday, July 19, 2011
Saturday, July 16, 2011
ARIZONA DEPARTMENT OF REAL ESTATE-INFORMATIONAL ALERT
July 15, 2011
COMMISSIONER LOWE ANNOUNCES CHANGES TO MARS RULING-
The Department has been monitoring closely the Federal Trade Commission (FTC) Mortgage Assistance Relief Services (MARS) Rule and its affect on the real estate licensees. Today, the FTC issued a press release- FTC WILL NOT ENFORCE MANY OF THE PROVISIONS OF MARS RULE AGAINST REAL ESTATE PROFESSIONALS HELPING CONSUMERS OBTAIN SHORT SALES”.
The direct link to the FTC Press release/enforcement policy: http://www.ftc.gov/opa/2011/07/mars.shtm
Remember- the Arizona “Short Sale Negotiator Regulations” issued by the ADRE on February 15, 2011 remains in effect, as well as the requirements of A.R.S. §32-2155 which states: Restriction on employment or compensation of person as broker or salesperson
C. A real estate broker or real estate salesperson shall not collect compensation for rendering services in negotiating loans secured by real property unless all of the following apply:
1. The broker or salesperson is licensed pursuant to title 6, chapter 9 or is an employee, officer or partner of a corporation or partnership licensed pursuant to title 6, chapter 9.
2. The broker or salesperson has disclosed to the person from whom the compensation is collected that the broker or salesperson is receiving compensation both for real estate brokerage, when applicable, and for mortgage broker services.
3. The compensation does not violate any other state or federal law.
To review these Regulations, the direct link is: http://www.azre.gov/PublicInfo/Documents/Short_Sale_Negotiator_Regulations.pdf
COMMISSIONER LOWE ANNOUNCES CHANGES TO MARS RULING-
The Department has been monitoring closely the Federal Trade Commission (FTC) Mortgage Assistance Relief Services (MARS) Rule and its affect on the real estate licensees. Today, the FTC issued a press release- FTC WILL NOT ENFORCE MANY OF THE PROVISIONS OF MARS RULE AGAINST REAL ESTATE PROFESSIONALS HELPING CONSUMERS OBTAIN SHORT SALES”.
The direct link to the FTC Press release/enforcement policy: http://www.ftc.gov/opa/2011/07/mars.shtm
Remember- the Arizona “Short Sale Negotiator Regulations” issued by the ADRE on February 15, 2011 remains in effect, as well as the requirements of A.R.S. §32-2155 which states: Restriction on employment or compensation of person as broker or salesperson
C. A real estate broker or real estate salesperson shall not collect compensation for rendering services in negotiating loans secured by real property unless all of the following apply:
1. The broker or salesperson is licensed pursuant to title 6, chapter 9 or is an employee, officer or partner of a corporation or partnership licensed pursuant to title 6, chapter 9.
2. The broker or salesperson has disclosed to the person from whom the compensation is collected that the broker or salesperson is receiving compensation both for real estate brokerage, when applicable, and for mortgage broker services.
3. The compensation does not violate any other state or federal law.
To review these Regulations, the direct link is: http://www.azre.gov/PublicInfo/Documents/Short_Sale_Negotiator_Regulations.pdf
Tuesday, July 5, 2011
HUD To Give Away $1 Billion To Struggling Homeowners
From the Washington Post
By Cezary Podkul, Published: July 4
Sandra Allwine has been pleading with her bank for more than two years to modify the mortgage on her Arlington County home. Despite exhausting all her savings and having her daughter move in to help with her $3,000 mortgage payment, Allwine, 65 and unable to find work, is struggling to save her home from foreclosure.
In June, a potential lifeline opened up. The newly launched $1 billion Emergency Homeowners’ Loan Program, or EHLP, is targeting homeowners who are among the most difficult to help: those who fell behind on their payments because of job loss or unexpected medical bills. For many of them, it might be the last chance to save their homes.
During the housing boom, millions of homeowners got easy access to mortgages. Now, some mortgage lenders and government officials have taken action after discovering that many mortgage documents were mishandled.
“We were normal middle-class Americans who had saved and lived very carefully and frugally . . . and still wound up getting kicked in the teeth,” Allwine said. She applied as soon as she heard about the program.
If she is approved, the government will subsidize Allwine’s mortgage payments for a maximum of $50,000 over two years. After that, the interest-free loan will be forgiven over five years if she stays in her home and stays current on her payments.
EHLP is the latest government program targeting the nearly 1.8 million homeowners like Allwine facing foreclosure. It is going to have to move fast: The program was supposed to start last year, but implementation delays mean that the Department of Housing and Urban Development must spend all its $1 billion by the end of the federal government’s fiscal year, Sept. 30.
That gives homeowners in 27 states, including Virginia, until July 22 to complete their applications. If demand outstrips available funds, HUD will run a lottery to pick successful applicants. Five additional states, including Maryland, are subject to slightly different rules, which gave them more time to spend the funds, because they started taking EHLP applications earlier under similar state-run programs.
Terri Ware of Greenbelt applied for the program in May after she was unable to get her bank to modify the $238,000 mortgage on her condominium. Her daughter Micah was born last year with a heart defect that requires around-the-clock care. So Ware, 43 and a single mom, left her job as an emergency room nurse at Prince George’s Hospital Center in Cheverly so she could care for her. But with her income shrinking and medical expenses escalating, she quickly burned through all her savings and her 401(k) and fell five months behind on her mortgage. Foreclosure loomed.
“I said, ‘I can’t be homeless — my baby needs help,’ ” Ware recalled.
Within a month, Ware was approved for $29,608 in aid through EHLP. The interest-free loan will repay $8,636 worth of mortgage payments that she owes in arrears to J.P. Morgan Chase and then pay about half her $1,727 mortgage payment for the next 24 months.
Ware was ecstatic when she found out. “I picked my daughter up and said, ‘We’re going to keep our home,’ ” she said with tears in her eyes. She plans to resume working and making mortgage payments on her own as soon as her daughter’s health improves.
Maryland has committed $4.2 million in EHLP loans to 121 homeowners, Maryland Department of Housing and Community Development Deputy Secretary Clarence Snuggs said, and “we’re going to be working up until the last minute” to spend the $40 million that the state has been allocated under EHLP.
Nationwide, HUD is hoping to help 30,000 homeowners through the program, including 1,120 in Maryland and 1,223 in Virginia, which received $46.6 million in funding. The District is hoping to assist as many as 1,000 homeowners under a separate program for which it has $20 million, said D.C. Housing Finance Agency Executive Director Harry Sewell.
But not everyone sees the merits of programs such as these during lean fiscal times.
“The best foreclosure mitigation program in America is a job. It’s not a government check, it’s a paycheck,” Rep. Jeb Hensarling (R-Tex.) said in a statement. In February, Hensarling sponsored a bill to kill the EHLP, calling the program “an act of fiscal child abuse.” By a vote of 242 to 177, the House agreed. But the Senate didn’t act on it.
Rep. Barney Frank (D-Mass.) fought to include the program in the 2010 financial reform bill. “If you took out a reasonable mortgage in the first place and the only reason you can’t pay it is because you became unemployed, there’s reason to help,” he said in an interview.
Frank proposed taxing large financial firms to fund EHLP, but House Republicans opposed that proposal. Some analysts say that leaves Congress with difficult moral questions.
“What’s the moral superiority of the borrower who did nothing wrong versus the taxpayer who did nothing wrong?” said Mark Calabria, director of financial regulation studies at the Cato Institute, a free-market think tank. In the end, he thinks EHLP will amount to “a drop in the bucket” for America’s foreclosure problem, while future generations will have to pick up its $1 billion tab.
By Cezary Podkul, Published: July 4
Sandra Allwine has been pleading with her bank for more than two years to modify the mortgage on her Arlington County home. Despite exhausting all her savings and having her daughter move in to help with her $3,000 mortgage payment, Allwine, 65 and unable to find work, is struggling to save her home from foreclosure.
In June, a potential lifeline opened up. The newly launched $1 billion Emergency Homeowners’ Loan Program, or EHLP, is targeting homeowners who are among the most difficult to help: those who fell behind on their payments because of job loss or unexpected medical bills. For many of them, it might be the last chance to save their homes.
During the housing boom, millions of homeowners got easy access to mortgages. Now, some mortgage lenders and government officials have taken action after discovering that many mortgage documents were mishandled.
“We were normal middle-class Americans who had saved and lived very carefully and frugally . . . and still wound up getting kicked in the teeth,” Allwine said. She applied as soon as she heard about the program.
If she is approved, the government will subsidize Allwine’s mortgage payments for a maximum of $50,000 over two years. After that, the interest-free loan will be forgiven over five years if she stays in her home and stays current on her payments.
EHLP is the latest government program targeting the nearly 1.8 million homeowners like Allwine facing foreclosure. It is going to have to move fast: The program was supposed to start last year, but implementation delays mean that the Department of Housing and Urban Development must spend all its $1 billion by the end of the federal government’s fiscal year, Sept. 30.
That gives homeowners in 27 states, including Virginia, until July 22 to complete their applications. If demand outstrips available funds, HUD will run a lottery to pick successful applicants. Five additional states, including Maryland, are subject to slightly different rules, which gave them more time to spend the funds, because they started taking EHLP applications earlier under similar state-run programs.
Terri Ware of Greenbelt applied for the program in May after she was unable to get her bank to modify the $238,000 mortgage on her condominium. Her daughter Micah was born last year with a heart defect that requires around-the-clock care. So Ware, 43 and a single mom, left her job as an emergency room nurse at Prince George’s Hospital Center in Cheverly so she could care for her. But with her income shrinking and medical expenses escalating, she quickly burned through all her savings and her 401(k) and fell five months behind on her mortgage. Foreclosure loomed.
“I said, ‘I can’t be homeless — my baby needs help,’ ” Ware recalled.
Within a month, Ware was approved for $29,608 in aid through EHLP. The interest-free loan will repay $8,636 worth of mortgage payments that she owes in arrears to J.P. Morgan Chase and then pay about half her $1,727 mortgage payment for the next 24 months.
Ware was ecstatic when she found out. “I picked my daughter up and said, ‘We’re going to keep our home,’ ” she said with tears in her eyes. She plans to resume working and making mortgage payments on her own as soon as her daughter’s health improves.
Maryland has committed $4.2 million in EHLP loans to 121 homeowners, Maryland Department of Housing and Community Development Deputy Secretary Clarence Snuggs said, and “we’re going to be working up until the last minute” to spend the $40 million that the state has been allocated under EHLP.
Nationwide, HUD is hoping to help 30,000 homeowners through the program, including 1,120 in Maryland and 1,223 in Virginia, which received $46.6 million in funding. The District is hoping to assist as many as 1,000 homeowners under a separate program for which it has $20 million, said D.C. Housing Finance Agency Executive Director Harry Sewell.
But not everyone sees the merits of programs such as these during lean fiscal times.
“The best foreclosure mitigation program in America is a job. It’s not a government check, it’s a paycheck,” Rep. Jeb Hensarling (R-Tex.) said in a statement. In February, Hensarling sponsored a bill to kill the EHLP, calling the program “an act of fiscal child abuse.” By a vote of 242 to 177, the House agreed. But the Senate didn’t act on it.
Rep. Barney Frank (D-Mass.) fought to include the program in the 2010 financial reform bill. “If you took out a reasonable mortgage in the first place and the only reason you can’t pay it is because you became unemployed, there’s reason to help,” he said in an interview.
Frank proposed taxing large financial firms to fund EHLP, but House Republicans opposed that proposal. Some analysts say that leaves Congress with difficult moral questions.
“What’s the moral superiority of the borrower who did nothing wrong versus the taxpayer who did nothing wrong?” said Mark Calabria, director of financial regulation studies at the Cato Institute, a free-market think tank. In the end, he thinks EHLP will amount to “a drop in the bucket” for America’s foreclosure problem, while future generations will have to pick up its $1 billion tab.
Sunday, July 3, 2011
California Investors To Plead Guilty In Bid-Rigging
June 30, 2011
(06-30) 16:55 PDT Sacramento, Calif. (AP) --
Eight California real estate investors have agreed to plead guilty in a bid-rigging scheme to buy foreclosed real estate at public auctions in two San Francisco Bay area counties, the U.S. Department of Justice said Thursday.
The men were charged with bid-rigging and conspiracy to commit mail fraud as part of a joint investigation by the FBI and the antitrust division of the Justice Department.
Investigators say the men conspired or made payoffs from 2008 through 2011 so they would not bid against each other for properties sold at foreclosure auctions in Alameda and Contra Costa counties. After one bought a property at an artificially low price, they would hold a private auction among themselves to resell it and split the extra money paid by the winning bidder.
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"While the country faces unprecedented home foreclosure rates, the collusion taking place at these auctions is artificially driving down foreclosed home prices and is lining the pockets of the colluding real estate investors," said Christine Varney, assistant attorney general in charge of the antitrust division, in a prepared statement.
The felony charges were filed in U.S. District Court for the Northern District of California, in Oakland. Court records did not list attorneys for the defendants or indicate whether they were in custody; court personnel said the cases were newly filed and they could not provide any information about them.
The men charged were:
_ Thomas Franciose, of San Francisco
_ William Freeborn, of Alamo
_ Robert Kramer, of Oakland
_ Thomas Legault, of Clayton
_ David Margen, of Berkeley
_ Brian McKinzie, of Hayward
_ Jaime Wong, of Dublin
_ Jorge Wong, of San Leandro
No Justice Department spokesperson could be reached to clarify whether the men were in custody, when they might enter a plea, their ages or other details. An FBI spokeswoman referred questions to the Justice Department.
Investigators said in a prepared statement that the charges were part of an ongoing investigation into collusion by real estate investors in foreclosure sales, both in Northern California and elsewhere.
In March, federal prosecutors said Yama Marifat of Pleasanton had pleaded guilty to conspiring to rig bids at foreclosure auctions in San Joaquin County, about 50 miles east of the Bay Area and one of the areas hardest hit by the housing bust. The scheme described was similar to that cited in the charges filed Thursday.
At the time, investigators said Marifat was the fifth person to plead guilty in connection with the probe, and he faced up to 10 years in prison for bid rigging and 30 years for conspiracy to commit mail fraud, plus fines of as much as $2 million.
It was unclear whether the new case was related to the earlier investigation.
(06-30) 16:55 PDT Sacramento, Calif. (AP) --
Eight California real estate investors have agreed to plead guilty in a bid-rigging scheme to buy foreclosed real estate at public auctions in two San Francisco Bay area counties, the U.S. Department of Justice said Thursday.
The men were charged with bid-rigging and conspiracy to commit mail fraud as part of a joint investigation by the FBI and the antitrust division of the Justice Department.
Investigators say the men conspired or made payoffs from 2008 through 2011 so they would not bid against each other for properties sold at foreclosure auctions in Alameda and Contra Costa counties. After one bought a property at an artificially low price, they would hold a private auction among themselves to resell it and split the extra money paid by the winning bidder.
advertisement | your ad here
"While the country faces unprecedented home foreclosure rates, the collusion taking place at these auctions is artificially driving down foreclosed home prices and is lining the pockets of the colluding real estate investors," said Christine Varney, assistant attorney general in charge of the antitrust division, in a prepared statement.
The felony charges were filed in U.S. District Court for the Northern District of California, in Oakland. Court records did not list attorneys for the defendants or indicate whether they were in custody; court personnel said the cases were newly filed and they could not provide any information about them.
The men charged were:
_ Thomas Franciose, of San Francisco
_ William Freeborn, of Alamo
_ Robert Kramer, of Oakland
_ Thomas Legault, of Clayton
_ David Margen, of Berkeley
_ Brian McKinzie, of Hayward
_ Jaime Wong, of Dublin
_ Jorge Wong, of San Leandro
No Justice Department spokesperson could be reached to clarify whether the men were in custody, when they might enter a plea, their ages or other details. An FBI spokeswoman referred questions to the Justice Department.
Investigators said in a prepared statement that the charges were part of an ongoing investigation into collusion by real estate investors in foreclosure sales, both in Northern California and elsewhere.
In March, federal prosecutors said Yama Marifat of Pleasanton had pleaded guilty to conspiring to rig bids at foreclosure auctions in San Joaquin County, about 50 miles east of the Bay Area and one of the areas hardest hit by the housing bust. The scheme described was similar to that cited in the charges filed Thursday.
At the time, investigators said Marifat was the fifth person to plead guilty in connection with the probe, and he faced up to 10 years in prison for bid rigging and 30 years for conspiracy to commit mail fraud, plus fines of as much as $2 million.
It was unclear whether the new case was related to the earlier investigation.
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