Decline in homeownership is changing neighborhoods

CNBC
Beneath the spreading shade tree in Laura Holcomb's front yard, there are some 70 varieties of hosta, stands of elephant ear and a Japanese maple. For the 17 years she has owned the brick house on Rose Trail Drive in Memphis' Hillshire subdivision, Ms. Holcomb has devoted herself to her home and garden.

Across the street, Carl Osborne and his family have been tenants for two years, moving in after the previous owner lost the house in a foreclosure. They are happy to have a decent place to call home but, like many renters, they have not done much to improve the appearance or join the community.

They are not alone: the family behind Ms. Holcomb, the one two doors down, and several in the cul-de-sac across the way are among the renters who have been supplanting homeowners in this blue-collar, suburban neighborhood as investors buy single-family homes and convert them to rentals.

"Used to, we knew our neighbors," Ms. Holcomb said. Then she gestured toward the few remaining owner-occupied houses nearby. "Except for the two that have been here, I don't know any of my neighbors."

Across the country, a growing number of single-family rentals provide an option for many who lost their homes in the housing crash through foreclosure and for those who cannot obtain a mortgage under today's tougher credit conditions.

But the decline in homeownership is also changing many neighborhoods in profound ways, including reduced home values, lower voter turnout and political influence, less social stability and higher crime. Read more >>

Foreclosure Filings Increase in 60% of Large U.S. Cities

Foreclosure filings rose in almost 60 percent of large U.S. cities in the first half of 2012, indicating many areas will have more distressed homes on the market later this year, RealtyTrac Inc. reported.

More than 1 million homes in metropolitan areas with populations of at least 200,000 received notices of default, auction or repossession, up 1.5 percent from the last six months of 2011, the Irvine, California-based data provider said today in a statement. Among the 20 largest markets, Tampa, Florida; Philadelphia; Chicago and New York City had the biggest percentage increases in filings.

The gain in foreclosure actions followed a probe into abusive lender practices that delayed bank seizures nationwide. More repossessions will buoy deals “in many local markets where a shortage of aggressively priced inventory has been holding up sales,” RealtyTrac Chief Executive Officer Brandon Moore said in the statement.

A $25 billion bank settlement announced Feb. 9 eased loan terms for some borrowers and set new guidelines for the five largest U.S. mortgage providers. Recent laws passed in Nevada and California, meanwhile, have made it harder for loan servicers to resume property seizures, Daren Blomquist, a RealtyTrac spokesman, said in a telephone interview. Read more >>

FHA's Mortgage Delinquencies Soar

The mortgage market appears to finally be stabilizing -- as long as you ignore loans backed by the Federal Housing Administration. Increasingly, FHA-insured loans are falling into foreclosure or serious delinquency, moving in the opposite direction of loans guaranteed by Fannie Mae and Freddie Mac or those held by banks, which are all showing signs of improvement. And taxpayers could ultimately be on the hook for FHA's growing number of troubled mortgages. The agency's finances are already on shaky ground, and additional losses from loans going sour could prompt the need for a federal bailout, experts said.

"We can't escape this one," said Joseph Gyourko, a real estate professor at the University of Pennsylvania's Wharton School. "This is an arm of the U.S. government." The share of government-guaranteed loans, a majority of which are backed by FHA, that were 90 days or more delinquent soared nearly 27% during the year ending March 31. Foreclosures jumped nearly 17%, according to a report published recently by federal regulators.

At the same time, bank loans saw a dramatic improvement, with delinquencies shrinking by 39% and foreclosures declining by nearly 10%. Fannie and Freddie's portfolio also improved as delinquencies dropped by nearly 15% and foreclosures slid by more than 6%, the quarterly report issued by the Office of the Comptroller of the Currency said. Read more >>

Home Rentals — The New American Dream

Steve and Jodi Jacobson bought their Phoenix-area "dream home" in 2005. They built flagstone steps to the front door. They tiled the kitchen and bathroom. They entertained often, enjoying their mountain views.

"We put our soul into that house," says Steve Jacobson, 37. Then, home prices tanked more than 50%. Steve, a software quality assurance engineer, suffered pay cuts. In 2010, foreclosure claimed the home and their $100,000 down payment. The Jacobsons didn't lose their desire to live in a single-family home, however. They now rent one, like many other former homeowners displaced by foreclosure.

But unlike traditional apartment renters, this breed of American tenants are older and have kids, U.S. Census Bureau data indicate. As they move from homes they owned to ones they rent, they're changing neighborhoods for better and for worse. They're fueling a land-rush as investors snap up homes, mostly in markets hard-hit by foreclosure, to rent to them. And their growth — in cities from Florida to California — has implications for home builders, school districts and companies that will jockey for the dollars they used to invest in homes, predict Wall Street analysts and demographic researchers. Read more >>

26% of U.S. Home Sales in First Quarter Were Foreclosures

Homes in some stage of foreclosure accounted for more than one in four home sales during the first three months of the year, according to a report released Thursday. Distressed properties that were either in default, scheduled for auction or bank-owned accounted for 26% of all residential sales during the first quarter, up from 22% in the previous quarter and 25% a year earlier, RealtyTrac said.

Altogether, 233,299 distressed properties were purchased during the quarter, an 8% increase from the previous quarter. Those homes sold for an average of $161,214, 27% below the average price of a home not in foreclosure.

"Foreclosure-related sales picked up in the first quarter, particularly pre-foreclosure sales where a distressed homeowner is selling to avoid foreclosure -- typically via a short sale," Brandon Moore, chief executive of RealtyTrac said in a statement. Read more >>

Mortgage industry employees still signing unread documents and using fake signatures

Image via WikipediaMortgage industry employees are still signing documents they haven't read and using fake signatures more than eight months after big banks and mortgage companies promised to stop the illegal practices that led to a nationwide halt of home foreclosures.

County officials in at least three states say they have received thousands of mortgage documents with questionable signatures since last fall, suggesting that the practices, known collectively as "robo-signing," remain widespread in the industry.

The documents have come from several companies that process mortgage paperwork, and have been filed on behalf of several major banks. One name, "Linda Green," was signed almost two dozen different ways.

Lenders say they are working with regulators to fix the problem but cannot explain why it has persisted. More...

Nation’s biggest banks and mortgage lenders acquire a glut of foreclosed homes

Image by Getty Images via @daylifeThe nation’s biggest banks and mortgage lenders have steadily amassed real estate empires, acquiring a glut of foreclosed homes that threatens to deepen the housing slump and create a further drag on the economic recovery.

All told, they own more than 872,000 homes as a result of the groundswell in foreclosures, almost twice as many as when the financial crisis began in 2007, according to RealtyTrac, a real estate data provider. In addition, they are in the process of foreclosing on an additional one million homes and are poised to take possession of several million more in the years ahead.

Five years after the housing market started teetering, economists now worry that the rise in lender-owned homes could create another vicious circle, in which the growing inventory of distressed property further depresses home values and leads to even more distressed sales. With the spring home-selling season under way, real estate prices have been declining across the country in recent months. More...

U.S. homebuilder sentiment down as home prices continue falling

Image via WikipediaU.S. homebuilder sentiment slipped a notch in April as home prices continued to fall in most areas of the country amid widespread foreclosures, a survey released on Monday showed.

The National Association of Home Builders/Wells Fargo Housing Market index fell to 16 from 17, leaving the index in the pessimist range for a full five years.

A reading above 50 indicates that more builders view sales conditions as good than poor. The index has not been above 50 since April 2006.

“The spring home buying season is getting off to a slow start due to persistent concerns about home values as more foreclosures seem to be hitting the market, increasingly restrictive lending requirements for home buyers and builders, and the slow pace of economic recovery," said David Crowe, the NAHB's chief economist. More...

Homeownership falling at alarming pace - 11 Percent of US Houses Empty

America's home ownership rate, after holding steady for a while, took a pretty big plunge in Q4, from 66.9 percent to 66.5 percent. That's down from the 2004 peak of 69.2 percent and the lowest level since 1998.

Homeownership is falling at an alarming pace, despite the fact that home prices have fallen, affordability is much improved and inventories of new and existing homes are still running quite high.

Bargains abound, but few are interested or eligible to take advantage.

More concerning than the home ownership rate is the vacancy rate. The Census tables don't tell the entire story, but they tell a lot of it. Of the nearly 131 million housing units in this country, 112.5 million are occupied. 74.8 million are owned, and that's only dropped by about 30 thousand in the past year. 38 million are rented, but that's up by over a million year over year. That means more new households are choosing to rent. Read more...

Foreclosure rates rise in 33 states

Bankruptcy levels remained largely unchanged...But the depressed housing market took a toll. Foreclosure rates rose in 33 states [in December], most sharply in Utah, New Jersey, Nevada and Arizona. The average county's score in December was 10.4, up from 10.3 in November. Slightly more than 40 percent of the nation's 3,141 counties were deemed stressed, up slightly from November. Read more...

1 million homes repossessed in 2010

Image via WikipediaForeclosures were at a record high in 2010, and more than 1 million people lost their homes, even as notices started leveling off during the end year.

In total, there were nearly 2.9 million foreclosure notices filed during the year, according to report released Thursday by RealtyTrac. That was a record high, but just 1.7% above 2009. It most certainly would have been higher had notices not plunged in November and December as banks halted tens of thousands of foreclosures in the face of the robo-signing scandal. More...

Grandmother arrested protesting Bank of America foreclosures

On the heels of homeowner arrests last week protesting bank foreclosure and eviction in Los Angeles, six people were arrested December 20 when they locked arms as they attempted to enter a Bank of America branch at 7800 Forsyth Boulevard in Clayton, Missouri, refusing police orders to turn back.

After an hour of chanting and singing parody Christmas carols by 80 protesters manifesting their solidarity with Mike and Mary Boehm, the six demonstrators headed for BofA's door when bank officials broke their promise to have a representative familiar with the couple's modification request address the group.

The six were then arrested, booked and released on misdemeanor charges that carry a maximum penalty of up to a year in jail and a $1,000 fine, according to Nancy Cambria in stltoday.com. More...

Bill Black On Foreclosuregate

Image via WikipediaMust reading from ZeroHedge:

Bill Black On Foreclosuregate: Calls For The Immediate Termination Of Bernanke, Geithner And Holder

Bill Black, who will soon, together with Neil Barofsky, be a guaranteed shoe-in for the POTUS/VP position (both as independents, of course), was on the Ratigan show today, following on his op-ed from last week (here and here) calling for the long-overdue nationalization of Bank of America, and discussing the rampant fraud at the heart of mortgage gate. And contrary to ongoing lowball estimates from the like of JPM and Goldman, Black provides numbers about the bank liability that are simply stunning: "Credit Suisse says that by 2006 49% of all mortgage originations were liars loans. When independent folks study fraud, it is in the 80-90% fraud range. That means there were millions of acts of fraud.

Those loan frauds occurred because the banks created incentive structure for the loan brokers to bring them the absolute worst of the worst loans, and to lie on the application forms... These frauds came from the banks, and they propagated through the system through a series of echo epidemics...This fraud spread through the system and that's why we have a crisis in foreclosures. This stems from the underlying fraud by the lenders in mortgage loans to the tune of well over a million cases a year by 2005."

Furthermore, Black points out the glaringly obvious, that the Fed should not be in charge of any investigation into mortgage fraud, due to its "massive" conflict of interest, to the tune of $1.5 trillion in MBS/agencies held on the Fed's books, which would be immediately null and voided if rampant MBS fraud is indeed uncovered. Which is precisely why the entitlement of the Fed as supreme regulator (as inspired by the financial generosity of the Wall Street lobby) as part of Frank-Dodd was the one single most destructive decision ever made, and equivalent in many ways with electing America's very own tyrannical despot, whose only interest is making the multi billionaires, into trillionaires, and leaving everyone else in the cold through the eliminating of the savings class and the destruction of the reserve currency. More...

More Than 100,000 Homes Repossessed in September

Image via WikipediaThe number of homes repossessed by banks reached a record total of 102,134, crossing the 100,000 mark for the first time in a single month, according to real estate data company RealtyTrac.

"Lenders foreclosed on a record number of properties in September and in the third quarter, taking a bite out of the backlog of distressed properties where the foreclosure process was delayed by foreclosure prevention efforts over the past 20 months," said CEO of RealtyTrac James Saccacio.

Foreclosure filings, which include default notices, scheduled auctions and bank repossessions, rose 3% in September to 347,420, and increased almost 1% from September 2009.

See full article from DailyFinance: http://srph.it/9pOC9u

One in 10 mortgage holders faces foreclosure

Image via WikipediaOne in 10 American households with a mortgage was at risk of foreclosure this summer as the government's efforts to help have had little impact stemming the housing crisis.

About 9.9 percent of homeowners had missed at least one mortgage payment as of June 30, the Mortgage Bankers Association said Thursday.

That number, which is adjusted for seasonal factors, was down slightly from a record-high of more than 10 percent as of April 30.

In a worrisome sign, the number of homeowners starting to have problems with their mortgages rose after trending downward last year. The number of homes in the foreclosure process fell slightly, the first drop in four years.

More than 2.3 million homes have been repossessed by lenders since the recession began in December 2007, according to foreclosure listing service RealtyTrac Inc. Economists expect the number of foreclosures to grow well into next year.

The number of Americans missing payments and falling into foreclosure has followed the upward trend in unemployment, which has been near double digits all year and has shown no sign of dropping soon. More...

401(k) Withdrawals see biggest spike in five years

Image by ZaCky ॐ via FlickrAaron Smith, CNNMoney
Withdrawals from 401(k) retirement saving plans saw their biggest spike in at least five years, Fidelity Investments said on Friday, in the latest sign of hardship amid a dismal economy.

Fidelity reported that 62,000 people made hardship withdrawals from their 401(k) workplace plans during the second quarter. That's up from 45,000 participants during the prior quarter, a 37% increase. That means that 2.2% of Fidelity participants took a hardship withdrawal in the second quarter, compared to 2% in the same period last year.

Fidelity also said that 11% of participants took out loans from their 401(k) over the past 12 months, an increase of 2% from the prior year. The average loan amount was $8,650 at the end of the second quarter.

Fidelity said the top reasons people took loans and withdrawals were to prevent foreclosure or eviction, pay for college, or purchase a home.

"The current economy has forced some workers to borrow from their 401(k) accounts in order to pay for critical living expenses, ultimately jeopardizing their future retirement," said James MacDonald, president of workplace investing for Fidelity Investments. More...

Foreclosures Continue To Increase Dramatically In 2010

Image by Getty Images via @daylife

Michael Snyder
In a very alarming sign for the U.S. economy, foreclosures have continued to dramatically increase in 2010. But there has been a shift. Back in 2007 and 2008, experts tell us that most foreclosures were due to toxic mortgages. People were being suckered into mortgages that they couldn't afford with "teaser rates" or with payments that would dramatically escalate after a few years, and when those mortgages reset, the people who had agreed to them no longer could make the payments.

But now RealtyTrac says that unemployment has become the major reason for foreclosures. Millions of Americans have become chronically unemployed during the economic downturn and many of them are losing their homes as a result. But whatever the cause, one thing is certain - foreclosures have continued to skyrocket at a staggering rate.

According to a new report from RealtyTrac, foreclosure filings climbed in 75% of the nation's metro areas during the first half of 2010. At a time when the Obama administration believes that we are "turning the corner", things just seem to get even worse.

Some areas of the country continue to be complete and total disaster areas when it comes to real estate. For example, you have got to feel really sorry for anyone trying to sell a house down in Florida right now. According to RealtyTrac, Florida led the way with nine of the top 20 metro foreclosure rates in the country during the first half of 2010.

But the worst city for foreclosures continues to be Las Vegas.

According to RealtyTrac spokesman Rick Sharga, unemployment has replaced bad loans as the number one cause of foreclosures there....

"Las Vegas has seamlessly shifted from having a high level of foreclosures due to bad loans to defaults caused by a high level of unemployment."

But other cities with high unemployment rates are having huge problems as well.

For those who believe that the economy is supposed to be "improving", it must seem really odd that foreclosure rates in major cities such as Chicago continue to soar.

RealtyTrac says that foreclosure filings in Chicago have increased 23 percent year-over-year to one out of every 48 households.

But it isn't just cities like Las Vegas and Chicago that are nightmares right now.

The truth is that this is a national crisis.

The Mortgage Bankers Association recently announced that more than 10% of all U.S. homeowners with a mortgage had missed at least one mortgage payment during the January to March time period. That was a new all-time record and represented an increase from 9.1 percent a year ago.

Unfortunately, new all-time records are being set all over the place....

*The number of home foreclosures set a record for the second consecutive month in May.

*Banks repossessed 269,962 U.S. homes during the second quarter of 2010, which was a new all-time record.

*As of March, U.S. banks had an inventory of approximately 1.1 million foreclosed homes, which was a new record and which was up 20 percent from a year ago. More...

Foreclosures up in 75 percent of top U.S. metro areas

Image by Getty Images via @daylife

Foreclosures rose in 3 of every four large U.S. metro areas in this year's first half, likely ruling out sustained home price gains until 2013, real estate data company RealtyTrac said on Thursday.

Unemployment was the main culprit driving foreclosure actions on more than 1.6 million properties, the company said.

"We're not going to see meaningful, sustainable home price appreciation while we're seeing 75 percent of the markets have increases in foreclosures," RealtyTrac senior vice president Rick Sharga said in an interview.

Foreclosure actions -- which include notice of default, scheduled auction and repossession -- in the first half rose in 154 of the 206 metro areas with populations 200,000 or more.

"We're not going to see real price appreciation probably until 2013," said Sharga. "We don't see a double dip in housing but we think it's going to be a long painful recovery for the next three years."

Nine of the 10 areas slammed hardest by the foreclosure tidal wave improved from the first half of 2009, suggesting a peak at rates that are still up to five times the national average, RealtyTrac said in its midyear 2010 metropolitan foreclosure report.

Cities with the 20 highest foreclosure rates were all in Florida, California, Nevada and Arizona. More...

Pending Sales of Existing U.S. Homes Plummets 30%

Buy, consume, spend. Recovery is right around the corner. (Image via Wikipedia)

Remember, 1 in 3 U.S. home sales in the first quarter was a foreclosure property, and foreclosures accounted for 31 percent of all residential sales in the first quarter of 2010.

From Bloomberg:

The number of contracts to purchase previously owned houses plunged in May by more than twice as much as forecast after a homebuyer tax credit expired.

The index of pending home resales dropped 30 percent from the prior month, figures from the National Association of Realtors showed today in Washington. The drop was the biggest in records dating to 2001 and compared with a 14 percent decrease forecast in a Bloomberg News survey of economists.

The decline shows that the industry at the center of the financial crisis remains vulnerable in the absence of government support. A stabilization in housing will depend on gains in incomes and employment that may stem foreclosures and give Americans the confidence to start buying again.

Shadow inventory sales for years to come

Image by Getty Images via Daylife

Shadow inventory sales for years to come – 1.6 million distress sales in 2010, 1.6 million in 2011, and 1.5 million in 2012. By summer of 2011 REO pipeline will rise to 536,000.

Wall Street as usual enjoys denying facts until they become so obvious to the common person on the street. By then, it is too late to react. For example, subprime wasn’t a problem until it lit the fuse that set the global economy into a downward tailspin. Analysts at Barclays Capital are now coming out giving full attention to shadow inventory in the markets. Even though their report states that the pipeline for shadow inventory may be topping out, we have such a large number of distress properties in the pipeline that we won’t see any draw down of distress sales until 2012. And ultimately the sales end is what keeps prices lower because distress properties sell for less. As we know from various reports over 7 million homes are currently 30+ days late or in a state of foreclosure. The new data from Barclays looks at severe distress: More...