Texas Mortgage Corner » foreclosure

Foreclosure Rate Drops For The 12th Straight Month

FHA VA USDA Jumbo Home Equity Texas Mortgage Lender — Tue, 18 Oct 2011 12:53:43 +0000

Foreclosure activity continues to slow throughout the United States.

According to data from RealtyTrac, a national foreclosure-tracking firm, the number of foreclosure filings dipped below 215,000 in September 2011, a 6 percent decrease from August.

A “foreclosure filing” is defined as any foreclosure-related action including Notice of Default, Scheduled Auction, or Bank Repossession.

September marks the 12th straight month in which foreclosure filings fell year-over-year.

There are several reasons why foreclosure filings are down, including an increase in the amount of time it takes banks to move a foreclosure through its pipeline. It now takes a nationwide average of 336 days from the date of initial default notice to bank repossession.

Some states work quicker than others, however, because of a combination of state law and personnel.

Homes in New York take an average of 986 days to foreclose, for example, the longest in the country. Homes in Texas foreclose the quickest, registering just 86 days.

As in prior months, bank repossessions remain concentrated by state. Just 6 states accounted for half of the country’s REO last month:

California : 16.6 percent
Georgia : 8.5 percent
Florida : 8.3 percent
Texas : 6.2 percent
Michigan : 6.1 percent
Illinois : 5.2 percent

Collectively, these 6 states represent just 36 percent of the nation’s population.

By contrast, the bottom 6 states were home to just 192 repossessions last month — 0.3% of the national total. Those 6 states were Alaska, Wyoming, District of Columbia, North Dakota, South Dakota, and Vermont.

For home buyers in Texas , shopping for foreclosed properties can be an excellent way to get “a deal”. Foreclosed homes typically sell at discounts as compared to “non-foreclosed” homes, but are often sold “as-is”. This means that homes listed for sale may be defective or out-of-code.

Before placing a bid on a foreclosed home, make sure that you’re represented by an experienced real estate professional.

Foreclosures Sink To 4-Year Low

FHA VA USDA Jumbo Home Equity Texas Mortgage Lender — Fri, 12 Aug 2011 12:53:07 +0000

Foreclosure activity continues to slow.

According to RealtyTrac, a national foreclosure-tracking firm, the number of foreclosure filings nationwide fell 35 percent as compared to July 2010, a statistic suggesting that the housing market continues to improve.

“Foreclosure filing” is a catch-all term encompassing default notices, scheduled auctions, and bank repossessions.

Filings fell to a 44-month low in July 2011.

For all the improvement, though, activity remains concentrated in just a few states. More than half of all bank repossessions last month occurred in just a handful of states.

In July, 6 states accounted for 52% of activity.

California : 19% of all repossessions
Georgia : 8% of all repossessions
Florida : 7% of all repossessions
Texas : 6% of all repossessions
Michigan : 6% of all repossessions
Arizona : 6% of all repossessions

At the other end of the spectrum is Vermont. With just 11 repossessions for all of July, Vermont accounted for 0.016% of repossessions nationwide.

Distressed homes are in high demand with today’s home buyers. According to the National Association of REALTORS®, they account for 30% of all home resales. That’s no surprise, either.

Distressed homes typically sell at 20 percent discounts as compared to non-distressed ones.

But, if buying a foreclosure is in your agenda, be sure to do your homework. Buying bank-owned homes is different from buying from “people”. The contracts are different, the negotiations are different, and the homes are sometimes sold with defects.

If you plan to purchase a foreclosure in Texas , therefore, be sure to speak with a licensed real estate agent first. There’s plenty of available information online but when it’s time to buy, have an experienced agent on your side.

5 Buyer Mistakes in a Short Sale

FHA VA USDA Jumbo Home Equity Texas Mortgage Lender — Fri, 30 Oct 2009 18:37:03 +0000

Get Pre-Approved for a Houston Mortgage

By Lora Shinn

With hundreds of thousands of homes in foreclosure or on short sale lists, there’s never been a better time to score a sweet deal. But discount-priced foreclosures and short sales can come with a raft of expensive problems.

Just ask Adam Melson of Philadelphia. Melson had looked at more than two dozen houses and he jumped at the chance to purchase a short sale home that seemed like a decent buy in a good neighborhood.

But $40,000 in renovations later, he feels differently.Melson’s home inspector had said the short sale house was fine — just a little termite damage in the basement. But when Melson tore up the linoleum to repair a soft spot in the kitchen floor, he found the damage went layers deep.

“The boards supporting the kitchen floor were entirely eaten by termites,” he says. “I also learned at this time that the kitchen sink did not drain anywhere. It drained openly under the house.”

Melson ended up replacing an entire wall of his house. That was before his roof started leaking and he discovered thick, smelly mold behind the entire shower unit. “With several other things I wasn’t expecting, I wound up hauling over 10,000 pounds of my house to the dump in rented box trucks,” he says.

There’s a flood of properties on the market with lots of motivated sellers, says Jim Randel, real estate investor and author of “The Skinny on the Housing Crisis.”

“The only people who are selling in a declining market are those who have to sell,” he says.

Although they have to sell, you don’t have to buy. Know what you’re getting into before you buy a short sale or foreclosure property and be mindful of these five common mistakes:

1. Ignoring property problems

Foreclosure property owners didn’t want to leave.“They’ll often take that frustration out on the property,” says J. Scott Steinhorn, a real estate investor with Lish Properties LLC in Cobb County, Ga., with experience in foreclosures and short sales.

“I’ve seen a couple foreclosure properties where the previous owners clearly took a sledgehammer to the nice hardwood floors, the tiled showers and the cabinets, just to be spiteful,” he says.

Empty foreclosure properties may suffer from issues that arise from neglect — leaks, mold, termites, thieves, squatters and filth — because the property sat vacant for weeks, months or years before purchase.

Yet in many states, banks are typically exempt from providing the disclosure statement typically required of a traditional seller. The statement outlines the condition of the property. “The buyer of a foreclosure is essentially starting from scratch when it comes to determining the property issues,” Steinhorn says.

For example, a bank won’t reveal whether the house is constructed from defective materials — materials later resulting in class-action lawsuits, Steinhorn says. Most claims by homeowners in these lawsuits are subject to strict deadlines. You won’t know whether the previous homeowner missed the deadline for court-ordered remediation or if the faux stucco is bad.

Short sellers will fill out the disclosure form. But while short sellers are motivated to sell and repair their credit, they could have skimped on essential maintenance of the roof, furnace, air conditioner and hot water heater.

“If a house is between 15 to 30 years old, there’s a very good chance it needs some expensive maintenance,” Steinhorn says.

Also, it’s unlikely the cash-strapped seller has given the home a cosmetic facelift for years, Steinhorn says. So the buyer might have to update a bathroom featuring orange shag carpet, a wooden toilet seat and gold-foil wallpaper.

2. Skipping the home inspection

Clear your calendar and make time to tag along on your home inspection. “Most of what we do is education,” says Kathleen Kuhn, president of New Jersey-based HouseMaster, one of the largest home-inspection franchisers in North America.Melson wishes he’d been more aggressive in asking questions during his inspection. “This is the time where the house is open for all criticism and inquiries,” he says. “Maybe I was a little young and anxious to be living on my own again. But if asking another five questions could have dropped the price of the home another $5,000, I would have asked about everything.”

Ask for repair estimates when an inspector notes a problem, or do some research online later that night. “Every homeowner underestimates how much renovation costs,” Kuhn says.

Some buyers are even doing an inspection before making an offer, particularly in areas such as Florida and California where foreclosures and short sales are numerous. While most inspections are done after the initial offer, with the sale contingent upon mutual agreement of remedies, a preoffer inspection allows house shoppers to walk away and find a better buy.

You may wish to call in specialized inspectors to look for expensive problems such as termites, mold and structural damage, particularly if it’s a common problem in your area. “Mold gets more expensive to remediate the longer you wait, and it can severely impact your health and the property’s resalability,” Steinhorn says.

If you note sloping floors or cracks in walls around doors, windows and basement walls, bring in a structural engineer for a full report and repair recommendations.

Then do something not on the inspector’s list: Knock on neighbors’ doors. They may know something you don’t.

“The seller is not there to disclose the crime from last year or the loud music down the block,” says Brendon DeSimone, a San Francisco-based real estate agent.

3. Ignoring legal and insurance information

A typical disclosure statement would indicate if a house was in a flood plain or had any unpermitted renovation, Steinhorn says. Because bank-owned properties often sell as is without disclosure, buyers need to do a little extra research on the home’s status.If the property is in a flood zone, you may pay thousands yearly in additional insurance costs, and you may find it difficult to resell the property. You can read more about flood prevention and insurance at FloodSmart.gov.

Ensure that all renovations have been permitted and approved. “If not, and there is a problem, the city can cite you,” DeSimone says.

Check with the local planning department and make sure there aren’t any neighbors with plans to build an enormous house or to demolish an existing one, DeSimone suggests. “Any nearby plans or work would normally be known and disclosed by the seller, but not in the case of a foreclosure,” he says.

4. Leaving too little time

Short sale and foreclosure homebuyers need to be aware that the sale won’t necessarily close as quickly as it would for a traditional home. The short seller’s lender must grant approval of either foreclosure terms or a short sale price which is less than the short seller owes. Even so, troubled banks may be overwhelmed with foreclosures and slow to respond.“Banks are taking huge losses so they are going to do their best to get their money back, get the most amount of money or go after the seller to try to recoup something,” DeSimone says. “They aren’t just going to let the house go.”

Sometimes legal troubles can also influence closing. For more than six months, Steinhorn has waited on one bank-owned property while the bank repeatedly pushes back the close date due to unresolved liens.

Steinhorn isn’t moving into his investment property. But costs increase if you must extend your lease, find a storage facility or rent an apartment at the last minute.

5. Falling hard for a bad home

Don’t assume you’re getting a great deal in today’s real estate marketplace, Randel says. “Think of yourself as an investor,” he says. Consider the house’s condition, inspection, price and value dispassionately.He suggests that you ask yourself these common sense questions:

If you were to buy this property, could you afford to rent it out for as much as, or less than, your mortgage payment?
What if the home’s value drops another 20 percent, will you still feel satisfied with your purchase?
How much money will you have to pour into the property to make it habitable? If the problems are too costly, you might pass on this home purchase.

Kuhn says that sometimes HouseMaster inspectors provide bad news, but homebuyers just won’t listen. She says buyers declare, “This is our house and we love this house,” despite a broken sewer line, rats in the basement or a collapsed (and rotting) roof.

On the other hand, Kuhn says more buyers are taking off the rose-colored glasses and inspecting the house and neighborhood more thoroughly. A cooler, less-competitive market nixes bidding wars, home-inspection waivers and overextended budgets.

In short, this may be the right time for you to buy a home, especially if you know what you’re getting into.

7 Steps to a Great Foreclosure Buy

FHA VA USDA Jumbo Home Equity Texas Mortgage Lender — Thu, 29 Oct 2009 18:10:19 +0000

Reposted by the best Houston Mortgage Lender

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By Tracey C. Velt • Bankrate.com

Foreclosure. It seems half the country is in it and the other half is trying to make a killing on it.

The number of foreclosed homes staggers the imagination and with more adjustable-rate loans about to reset, the end is nowhere in sight. The crisis, however, provides the opportunity to purchase a house that was all but impossible for many to afford in the boom years.

But there are many pitfalls and a hasty buyer can end up in a quagmire.

With investors flocking to capitalize on discounted properties, good deals usually go fast. It’s unrealistic to think you’re going to get a pristine property in a prime location for 50 percent less than area comparables. But 20 percent under the neighborhood market is very possible. If you’re a potential foreclosure buyer, the obvious place to start is price and condition. But there’s far more to it. Consider these seven top tips to get your best deal.

“This can happen two different ways,” says Sean O’Toole, founder and CEO of ForeclosureRadar.com.

“The underpriced properties get a ton of activity and go quickly, but you can really get a better deal on an overpriced property,” he says.

An overpriced property will generally get little interest and may sit on the market for a year or more. Therefore, when someone actually makes an offer, the bank may act on it quickly.

“For the homebuyer who’s up for the challenge, it can mean getting a property at less than market value,” says Aaron Lewis, broker/owner of The Lewis Team at Prudential California Realty in Turlock, Calif.

He offers this example: “If the home is listed at $170,000 and needs $10,000 worth of repairs, take a look at comparable properties in the area. If the house would be worth $200,000 with the repairs done, then you’re getting a $200,000 property for $180,000 and that’s a great deal.”

In addition, to move properties more quickly, says F.F. “Chappy” Adams, president of Illustrated Properties, in Palm Beach Gardens, Fla., “lenders are often making significant repairs, replacing major items or offering repair assistance.” That alone may make the home, once repaired, a good investment down the road.

“A good neighborhood supports your home value over time,” says Lewis. How do you determine that?

In addition to scouring the neighborhoods for well-kept yards, easy access to shopping and short work commute times, look at school scores, says Lewis. “A good school district will usually help housing hold its value over the years.”

Check out the number of foreclosures in the neighborhood as well. “If there are a lot of homes in one neighborhood that are in foreclosure, be wary,” says Jim Mazziotti, broker/owner of EXIT Realty Bend in Bend, Ore. “Values may still be declining there.”

“Some lenders are favoring cash transactions over finance purchases and taking deeper discounts to sell the property,” says Adams, whose company has a department that handles only bank-owned properties.

If cash is not an option for you, it’s important to get prequalified for a loan so you can react quickly once you find a home.

You can look for the best interest rate by searching Bankrate’s mortgage rate tables, then contact the lender to get pre-approved.

“Particularly for a cash buyer, this strategy makes a lot of sense.

“Make your offer at the end of a month, quarter or year,” says O’Toole. “Many times, banks will want to get deals closed and off the books.

So, consider making a November or December offer and highlight the fact that you can close by Dec. 31,” he says. You can get a lower price simply because it works for the bank’s timing.

Many times listing agents — who often get 20 or more properties from the bank to list at one time — simply don’t have the time or manpower to include every detail about every house in their online marketing.

“An REO (real estate-owned) broker may run out to the house, take a look around the inside and snap a few photos of the outside, but they may not mention in the online listing that the home has a beautiful backyard and upgraded landscaping,” says O’Toole. It pays to do more than simply check out the property online. If the property meets your criteria for size, number of bedrooms and neighborhood, go see it in person. And, says Adams, “Always have a licensed home inspector check out the home.”

With REO properties, go directly to the listing agent, who has the relationship with the bank asset manager, who approves or denies the sale. Or, find a real estate professional who works extensively in the foreclosure arena who will have more experience in bank-owned properties.

The bottom line: When it comes to buying a foreclosure, homebuyers need to throw emotion out the window and think like an investor.

“If you can purchase homes needing rehab work at significantly lower prices (than those homes that don’t need work), complete the work yourself and build instant equity, then you’re ahead of the game,” says Adams.

Bank of America loses $2.24B as loan losses rise

FHA VA USDA Jumbo Home Equity Texas Mortgage Lender — Fri, 16 Oct 2009 16:41:18 +0000

ARE YOU FRIKKIN’ KIDDING ME????????

They’re the damn guys that took all of our money and bought out troubled Countrywide and Merrill Lynch! I mean honestly folks- HOW IN THE HELL DO YOU GET BILLIONS OF DOLLARS FROM THE GOVERNMENT and STILL lose money????

Since the Countrywide acquisition, I personally withdrew all my money from B of A and put it elsewhere. If someone’s gonna screw me, at least pay me for it!

Read the article below for more info!

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By IEVA M. AUGSTUMS, AP Business Writer

CHARLOTTE, N.C. – Bank of America Corp. said Friday it lost more than $2.2 billion in the third quarter as loan losses kept rising, providing further evidence that consumers are still struggling to pay their bills.

The nation’s second-largest bank said it wrote down loans on its books by almost $10 billion during the July-September period, up almost $1 billion from the second quarter. The bank also added $2.1 billion to its reserves to cover bad loans, bringing its provision for credit losses to $11.7 billion. The bank’s total allowance for loan and lease losses now totals $35.83 billion.

Bank of America’s results were aided by profit from investment bank Merrill Lynch, including income from bond, stock and currency trading.

Its earnings follow the pattern set earlier this week by Citigroup Inc. and JPMorgan Chase & Co., which also reported more loan losses during the third quarter as consumers struggled to keep up with their credit card and mortgage payments. And on Friday, General Electric Co. reported that its GE Capital business, which includes credit cards, saw an 87 percent drop in profits, although it was also weighed down by commercial real estate losses. Together, the reports depict a financial industry that is still deeply troubled.

Banks have predicted for some time that their loan losses would keep rising. And Bank of America’s CEO Ken Lewis confirmed that this trend continues.

“Based on (the) economic scenario, results in the fourth quarter are expected to continue to be challenging as we close the year,” Lewis said on a conference call with analysts.

Bank of America said it lost $2.24 billion, or 26 cents per share, after accounting for the preferred dividends of $1.24 billion. That compared with earnings of $704 million, or 15 cents per share, a year earlier.

Revenue in the quarter increased 33 percent to $26.04 billion.

The loss was 5 cents more per share than the 21 cents forecast by analysts surveyed by Thomson Reuters Inc. Investors sent Bank of America shares down 90 cents, or 5 percent, to $17.20 in morning trading.

“Obviously, credit costs remain high, and that is our major financial challenge going forward,” Lewis said in a statement accompanying the earnings report. “However, we are heartened by early positive signs, such as the leveling of delinquencies among our credit card numbers.”

During the analyst call, Lewis said the bank believes it may have peaked in total credit losses this quarter, “although the levels going forward will continue to be elevated and certain businesses will still experience higher losses.”

Bank of America is considered particularly vulnerable to unemployment, which climbed last month to 9.8 percent in the U.S. Economists predict the jobless rate will pass 10 percent in the coming months.

The bank’s massive portfolio of credit-card loans could help investors determine where the economy is headed and how well the industry at large will fare, said Doug Dannemiller, senior analyst at Boston-based research firm Aite Group.

“As unemployment rates are in the 10 percent range, the results on consumer lending aren’t going to improve until that number gets lower,” Dannemiller said.

The bank has about 53 million consumer and small business customers, making it vulnerable to delinquencies and defaults, yet also ready to thrive when the economy recovers.

Bank of America’s global card services unit loss widened significantly to $1.04 billion from $167 million a year ago.

The loss in the bank’s home loans and insurance division grew to $1.6 billion from $54 million a year ago, as credit costs continued to rise.

The bank, which being investigated by federal authorities for its Merrill acquisition, has received $45 billion in bailout funds as part of the Treasury Departments $700 billion financial rescue package. It’s not known when it will repay the government.

Lewis, who is retiring at year’s end, has agreed to give up his salary and other compensation for 2009.

(end of article)

Hitting a Home Run with the HomePath Program

FHA VA USDA Jumbo Home Equity Texas Mortgage Lender — Mon, 16 Mar 2009 15:09:24 +0000

When I first read about this program, it struck me as kind of odd and out of place. It actually reminded me of those Sub Prime email blasts that many loan officers used to get. Remember those?

- 100% Financing
- NO Credit Score- OK
- NO Job- OK
- NO Heartbeat – OK!

The first sound I emitted was, “Waa Waa Wee Wah!”

Fannie Mae put into effect a new program last month, and is entirely designed for people that are buying REO’s (Real Estate Owned) from Fannie Mae directly. Simply put, when someone goes into foreclosure, many times the bank will buy back the property and are looking to sell these things as fast as they can because they don’t want their “books to get cooked.”

Couple this with a slow housing market, repeat episodes of “Flip This House”, and a dash of paprika, and you’ve got yourself the HomePath program!

So what’s in it for you? Let’s take a look.

For starters, there is NO appraisal or Mortgage Insurance is needed on these types of transactions which can definitely save you some money up front, and thousands throughout the life of the loan. How sweet is that?!

So far, so good…really good! Listen, it gets better…

The minimum down payment is only 3% which can allow several more borrowers such as yourself to get into these properties. Also, if you don’t have enough money for closing costs, HomePath will allow seller contributions up to a full 6% if needed.

Another really neat thing is that there are easier approvals on this program. What I mean by that is even though you have to meet the standard guidelines (620 score, document income, etc), approval types are usually broken up into 3-4 categories. These days, 99% of lenders are accepting only 1; with HomePath, they are accepting ALL types. Bada Bing!

Now before I get blasted in 2011 for promoting this, for the record, I hope this program stays under close watch in the beginning stages because lenders could quickly fall into the hole they are slowly digging themselves out of. Remember, loosey goosey loan programs are what got us in this mess in the first place!

If you’re interested in looking more into this, contact us and I would be happy to go over the HomePath program with you. Also, make sure and do your own due diligence with some Full-Time Realtors that specialize on REO’s.

Happy Hunting!

J.P. Morgan and Citigroup Pause Foreclosures

FHA VA USDA Jumbo Home Equity Texas Mortgage Lender — Sun, 15 Feb 2009 16:29:36 +0000

On Friday, Citigroup and J.P. Morgan Chase said that they would temporarily hit the “Pause Button” on foreclosures.

Out of the $350 billion that is left, $50 billion of the last year’s bailout plan is going to be used to buy some time for homeowners that are currently having trouble paying their mortgage payments. This is definitely good news, because even I am guilty of criticizing the disbursement of these funds. It’s kind of like the “Hunt for Osama”. It was hot for the first few months, then everyone forgot about, so I am very glad to see that FINALLY this money is being put to good use.

Personally, I have heard so many clients that are being SCREWED (Escrow money being overcharged, incorrectly calculated, double payments put into effect, no negotiation of terms available, etc) by their current mortgage, its unbelievable! Mark my words, REGULATION AND PROPER EXECUTION of this will be the ONLY way this is going to work, unlike several false promises that have been given to millions of Americans this past year.

So what Obama plans to do is make each homeowner pass an affordability test. This, to the public’s knowledge so far, is not going to be a complicated thing. As long as the homeowner shows that he/she can make enough money to afford some sort of payment plan with the mortgage company, they should be in good hands.

Barney Frank, House Financial Services Committee chairman, requested that a suspension of activity (moratorium) be set in place until the new plan is finalized in the upcoming weeks, and expects that at least 90% of banks will follow suit to help the housing crisis.