Category : Foreclosure

Home-Affordability-CalculatorFor the millions of Americans who lost their homes in a foreclosure or short sale during the recession, things are starting to look up. In addition to receiving a piece of the $3.6 billion settlement that banks are distributing to borrowers who were wrongfully foreclosed on, some homeowners are now becoming “boomerang buyers” and re-entering the market after a foreclosure or short sale.

Neal Katz, a mortgage agent at All Western Mortgage in Las Vegas, says he fields calls from a number of people wondering how long they have to wait before qualifying for another mortgage. “The biggest hurdle is time,” he says. “Time is the only thing that makes things better.”

Wait times vary depending on individual circumstances such as the size of the down payment and whether the buyer’s home was foreclosed or sold in a short sale. Those who’ve gone through foreclosure might wait three years for a Federal Housing Administration loan or seven years for a conventional loan, according to Katz. The wait time may be closer to two or three years after a short sale. In rare cases, a homeowner who sold in a short sale may be able to get a new loan right away if he or she hasn’t fallen behind on mortgage payments.

[Read: Why You Can’t Afford to Skip Renter’s Insurance.]

Programs aimed at helping borrowers re-enter the market through second-chance mortgages are popping up throughout the country, especially in cities like Las Vegas that were hit hard by the housing bust. Buyers who’ve left the market for several years and meet income requirements may be eligible for first-time buyer programs as well.

Going from owning a home to renting isn’t an easy transition for most people. “It’s very hard on homeowners when they have to go out and ask someone to rent them a house,” says Dianne Langston, a real estate broker in Solano County, Calif. “They’re ready to get out of the rental situation and be a homeowner again.”

Despite the ego blow, that transition time between mortgages offers a chance to save for another down payment and clean up any credit issues. Some people who’ve experienced foreclosure or a short sale also let other financial obligations slide out of frustration or resignation, Katz explains. Now’s the time to tackle those issues. “If you have a small collection account from a credit card, settle it,” Katz says. “Take care of all the other things you can to show the underwriter that you did the best you could. That way, the delinquencies are so long ago that it shouldn’t have an impact on your credit score anymore.”

[Read: Secrets of Successful House Flippers.]

Still, the fact that someone may qualify for a mortgage doesn’t mean they’ll immediately jump back into homeownership. Historically, only 30 percent of borrowers who defaulted on their mortgage in 2001 had taken out another mortgage within 10 years, according to researchers at the Federal Reserve Bank of San Francisco. The researchers also found that borrowers who terminated their mortgages not due to a default (for instance, paying off the house or switching to a larger or smaller house) returned to the mortgage market about two-and-a-half times faster.

Heather Harmon, a Redfin agent in Sacramento, Calif., sees some buyers waiting longer than they need to before buying again because of emotional reasons. “They’ve had to recover psychologically from the experience as much as they’ve had to recover financially,” she says. “You definitely see the buyers who are just mad about what happened. They blame it on circumstances, and they’re afraid of it happening again. In other cases, they’re really embarrassed. They feel exposed, and they’ve got to drag their financials back out again.”

Many people are depressed or discouraged after a foreclosure or short sale, according to Langston, because a house symbolizes their hard work and oftentimes the American Dream. “They don’t understand that it’s not the end of the line,” she says. “I always encourage people by letting them know that they can re-enter the marketplace.”

[In Pictures: 10 Ways Your Home Can Pay You Money]

Harmon recently worked with a couple in their 60s who bought a new home with a Department of Veterans Affairs loan two years after selling their previous house in a short sale. “They weren’t proud of it, but they’re picking themselves up again,” she says, adding that younger homeowners often have a harder time bouncing back from a short sale because of the impact on their kids and the desire to keep up with the Joneses.

While buying a house seemed nearly impossible for the couple thanks to the competitive local market and the longer closing time for a VA loan, Harmon says building a relationship with the seller and the seller’s agent helped the deal close. “We strategized our offer in a way to give the seller everything we possibly could give him because we were bound by the terms of the VA,” she says.

(MoneyWatch) Fannie Mae (FNMA) and Freddie Mac (FMCC), along with some of the nation’s biggest lenders, said Monday that they will suspend some foreclosures during the holidays.

From Dec. 19 through Jan. 2, 2013, Fannie will halt evictions of homeowners in a single-family property and in apartments with up to four units that are financed by a mortgage from the government-sponsored enterprise. Freddie, the nation’s other main provider of government-backed housing loans, will stop foreclosures for the same the type of homes from Dec. 17 through Jan. 2, 2013.

JPMorgan Chase (JPM) and Citigroup (C) said in statements that they also are temporarily ceasing foreclosures. JPMorgan said it would suspend all evictions beginning Dec. 19 through Jan. 1; Citi did not specify dates for its suspension.

Mixed news for homeowners facing foreclosure
Fannie Mae, Freddie Mac suspend foreclosures in storm-hit areas
Government suspending some foreclosures in Northeast because of Sandy
Fannie Mae announced on Monday that the agency is halting foreclosure evictions in support of families who have faced financial challenges. “The holidays are a chance to be with loved ones and we want to relieve some stress at this time of year,” said Terry Edwards, an executive vice president in Fannie Mae’s credit management division, in a statement.

Edwards said borrowers who are struggling with their house payments should contact Fannie as soon as possible.

Although the news is likely to bring a measure of relief to homeowners at imminent risk of eviction, the respite will be brief. Freddie noted that firms that handle evictions for the company will continue filing foreclosure documents, such as default notices, so evictions can resume after January 2 of next year.

Fannie and Freddie, which finance the housing market by purchasing mortgages from lenders, are government-owned. They were seized by federal authorities in 2008 after the agencies suffered massive financial losses stemming from the housing crash.

Following superstorm Sandy, both agencies said that they would suspend evictions and foreclosures in affected areas for 90 days. For borrowers with a Fannie loan, that foreclosure moratorium will last through Feb. 1, 2013, while for Freddie customers the suspension lasts through next February.

The Federal Housing Administration in November also halted foreclosures on federally insured homes in storm-hit areas of Connecticut, New Jersey, New York and Rhode Island.

Foreclosure activity has fallen in recent months. According to real estate research firm CoreLogic, 58,000 foreclosures were completed in October, down 17 percent from the year-ago period.

Still, foreclosures remain elevated. Between 2000 and 2006, when the bubble in housing prices started to deflate, an average of roughly 21,000 foreclosures were completed each year. Roughly 1.3 million homes, or 3.2 percent of all properties with a mortgage, were in some process of foreclosure as of October, down from 1.5 million in the same period last year, according to the firm.

WASHINGTON (Reuters) – The home vacancy rate, which measures empty properties and those for sale, fell to the lowest level since 2005 as demand for housing picked-up.

The rate declined to 1.9 percent in the third quarter from 2.1 percent in the previous three months, a level not seen since the third quarter of 2005, the Commerce Department said on Tuesday.

The share of empty U.S. homes for rent held steady at 8.6 percent, matching its lowest level in more than a decade.

The U.S. home ownership rate also held firm in the third quarter at 65.5 percent. (Reporting by Margaret Chadbourn; Editing by James Dalgleish)

(c) Copyright Thomson Reuters 2012. Check for restrictions at:

( Roughly 2.3 million homes are in the shadow market, according to a report by data and analytics firm CoreLogic, which marks a considerable drop from where the inventory of these properties stood a year earlier.

The current supply of pending foreclosures equates to a roughly six-month supply, the report indicates. The level of these properties in July 2011 was 2.6 million units.

One million of the 2.3 million shadow inventory units are seriously delinquent, according to the report. Additionally, roughly 900,000 of the homes are in some stage of foreclosure, while the remaining 345,000 are real estate-owned.

“Broadly speaking, the shadow inventory continued to shrink in July,” said Anand Nallathambi, president and CEO of CoreLogic. “The reduction is being driven by a variety of resolution approaches. This is yet another hopeful sign that the housing market is slowly healing.”

CoreLogic chief economist Mark Fleming noted that the dip in shadow inventory is just another factor that shows the country’s housing crisis is improving, though he stated some areas of the United States are still dealing with foreclosure-related issues.

“The decline in shadow inventory has recently moderated reflecting the lower outflow of distressed sales over the past year,” said Fleming. “While a lower outflow of distressed sales helps alleviate downward home price pressure, long foreclosure timelines in some parts of the country causes these pools of shadow inventory to remain in limbo for an extended period of time.”

In the three-month period from April to July, the report shows that certain states – mostly those located in the northeast – saw the biggest decreases in seriously delinquent mortgages. These included Arizona, Pennsylvania, New Jersey, Delaware and Maine.

Meanwhile, the states with the highest number of distressed properties included some states that have been at the forefront of the foreclosure crisis, including California, Florida and New Jersey.

Real estate experts may find this data to be indication that borrowers nationwide are better handling their home loans this year. A number of homeowners have taken part in government-sponsored programs, including the Home Affordable Refinance Program, to reduce monthly payments or terms of their loans.

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The number of U.S. foreclosures dropped for the fourth month in a row in August, according to a monthly foreclosure report released today by real estate data aggregator CoreLogic.

As of the end of August, 1.3 million homes — 3.2 percent of all U.S. homes with a mortgage — were in some stage of the foreclosure process, a 7.1 percent drop from August 2011.

Not all homes that enter the foreclosure process are lost by their owners. Some are able to get current on their loans or negotiate a short sale.

The 57,000 foreclosures completed in August brings the number of homes that have gone all the way through the foreclosure process since September 2008 to 3.8 million, the report noted.

“The continuing downward trend in foreclosures and a gradual clearing of the shadow inventory are important signals that the recovery in housing is gaining traction,” said Anand Nallathambi, president and CEO of CoreLogic.

The report shows that nearly half (48.1 percent) of the 377,000 foreclosures completed in the last 12 months occurred in just five states: California (110,000), Florida (92,000), Michigan (62,000), Texas (58,000) and Georgia (55,000).

States with most foreclosures in the last 12 months, August 2012

State Number of foreclosures
California 110,000
Florida 92,000
Michigan 62,000
Texas 58,000
Georgia 55,000

Source: CoreLogic

Florida leads all U.S. states with 11 percent of its mortgaged homes in some stage of foreclosure, according to the report. The next states on the list, in order, are: New Jersey (6.5 percent), New York (5.2 percent), Illinois (4.8 percent) and Nevada (4.6 percent).

States with highest percentage of mortgaged home in some stage of foreclosure, August 2012

State Percentage of mortgaged homes in foreclosure
Florida 11.0%
New Jersey 6.5%
New York 5.2%
Illinois 4.8%
Nevada 4.6%

Source: CoreLogic

What with the millions of former homeowners sitting around twiddling their thumbs following foreclosure or a short sale, many of them might be wondering how soon they will be able to get back into the real estate business.

One article that recently caught our attention in the New York Times attempted to answer that question, coming to the conclusion that there are all kinds of conditions to consider following what it terms a “significant derogatory event”, i.e. foreclosure.

Wondering if you’ll ever be able to buy again? Courtesy of Opinion Maker

One thing that the New York Times noted was that those whose homes were foreclosed will most likely face a much more substantial wait than those who got out early with a short sale.

Fannie Mae and Freddie Mac stipulate that persons who had their homes foreclosed must wait a minimum of three years before being able to apply for credit with them again, while those who went for a short sale only need to wait two years. There can be extenuating circumstances however, and if borrowers are able to show how they were extremely unfortunate, and if they had a good financial track record in the past, they may be able to shorten the time they have to wait.

On the flip side however, those who cannot prove any misfortune may well face an even longer wait than the minimum three years – with some being forced to wait as many as seven years, or four years if they went bankrupt.

Those who take out a loan that is covered by the Federal Housing Administration, and have a perfect credit record after borrowing the money, will also be eligible to buy again three years after a foreclosure, or just two years following a declaration of bankruptcy.

Avoid foreclosure through a short sale and you can get back on the property ladder more quickly, say Fannie Mae.

For those previous homeowners who were forced into a short sale, they will be able to secure a new FHA loan after three years, in most cases. As always, there are exceptions to this rule. The three year stipulation is supposed to be for borrowers who were defaulting on their homes at the time they initiated a short sale. For those borrowers who always managed to stay above water, that is, keep up with their payments, one year before they decided to short sale, they may actually be able to take out a new FHA loan right away.

The trick it seems, if you want to get back on the property ladder as soon as you can, is to steer clear of foreclosing, says Fannie Mae’s Andrew Wilson. “Avoiding foreclosure means you become eligible again in a much shorter time,” he told the New York Times.

If you would like to speak to a real estate professional regarding your current housing situation, please call us at (585) 279-8200.

Foreclosure prevention programs help homeowners who are delinquent on their mortgage payments and are in danger of foreclosure or a forced sale that will strip them of their home and any accumulated equity. Since the mortgage crisis, the foreclosure rate has risen dramatically. Data from LPS Applied Analytics’ Mortgage Monitor show that nationally the foreclosure rate has been around 4 percent in recent years – up from less than 1 percent during most of the 1990s (Elmer and Seelig 1998). Rising foreclosures have affected rural, urban, and suburban communities in both the center of the country and on the coasts. Only a small handful of metropolitan areas have foreclosure rates lower than 2 percent. And in some of the hardest hit metropolitan areas, more than one in six mortgages are in foreclosure. When mortgage delinquencies are also considered, the number of mortgages at serious risk of foreclosure is as high as one in four in some metropolitan areas and as low as one in 50 in some of the least affected areas. To assess serious mortgage delinquencies in your metropolitan area, click here for charts and rankings.

Foreclosure rates and serious delinquency rates show that struggling families all across the country need foreclosure prevention programs. By providing these families with counseling and access to affordable refinancing options and other assistance, foreclosure prevention can keep families in their homes while preserving home values and stability in the surrounding community. Skip to the section of the policy guide on why foreclosures matter to learn more about community impacts.

What policies can help prevent foreclosures?

Foreclosure prevention policies can target assistance directly to families in need, or they can focus at the community level on modifying the regulatory environment to reduce foreclosures and their impact on neighborhoods. The policies that can help prevent foreclosures vary depending on how deeply into financial trouble families are.

States and localities have adopted a range of short- and long-term educational, financial, legal, and regulatory policies for preventing foreclosures and protecting affected families and communities. Foreclosure prevention strategies often include immediate assistance such as 24-hour hotlines, short-term loans, flexible refinancing programs, and legal assistance. Some communities also have instituted mediation programs to encourage borrowers and lenders to assess foreclosure alternatives, while others have extended the foreclosure timeline to give borrowers more time to assess their options or find new housing if foreclosure is inevitable. Additional policies, such as predatory lending restrictions, go a step beyond immediate assistance and aim to reduce the risk of foreclosures in the future. More information on all of these foreclosure prevention policies can be found in this section.

To find out more about the FLASH program you can call the hotline at 1-866-607-2187.