McKissick, the CEO of Williams, Williams & McKissick, one of the nation’s largest auction firms, says “auction bridges the gap between buyers’ desires and sellers’ expectations. Auction is where real estate meets reality.”

Today when it comes time to sell the first step is usually to contact a local real estate broker. But McKissick — author of Auction Your Home? Absolutely! — says homeowners may want to consider an alternative, the use of an auctioneer.

Auctions, she explains, have been around a long time and have been used to successfully market a variety of, well, er, goods and services….

Virgins

“One of the earliest recorded auctions took place in Greece in 500 BC with the annual auctioning of brides,” she says. “Something as lovely and coveted as virgins required that competition prevail. In fact, it was illegal to sell a daughter outside of auction. Fathers of the less attractive daughters had to add dowries or other money to the bridal package to increase the sale price. In the ‘not much ever changes’ category, while women had to be gorgeous and virgins, men only had to drive by with drachmas.”

Cash or Mortgage?

In today’s marketplace auctions are widely associated with foreclosure, however auctions have been used to sell all types of properties including houses, farms and commercial structures. Local governments use auctions to assure that the bidding process for public property is open and transparent.

One key to bidding success is for buyers to have financing in place before the auction begins. While many bidders pay cash there can also opportunities to use FHA mortgages, VA loans and conventional financing. For specifics speak both with auctioneers and lenders.

Auctions

McKissick says auctions today are “competitive, efficient, exciting, entertaining, time definite, public, and proven.” She also says owners might want to consider auctions for a variety of reasons.

First, “you want your home sold quickly.” Successful auctions can provide a quick sale, especially when sold without a reserve.

Second, “you’d love more than one offer.” When markets are hot multiple offers are not unusual. There can also be multiple offers with auctions, however bidding wars are not assured otherwise banks would not be forced to buy back so many properties.

Third, “you want buyers with cash or financing in place.” When considering auction both buyers and sellers should ask about required financial arrangements, who pays what and how much, and who gets the money if the buyer does not meet payment deadlines.

Fourth, “you want motivated buyers.” If you’ve ever watched people buy at auction there surely is a lot of action when it comes to desired items. The auction process itself encourages competition, it’s designed to get competitive juices rushing.

Fifth, “you want to make plans, not contingencies.” A successful auction results in an instant sale and a sure closing date. For many sellers that may be a better deal than negotiating with the buyer who has 15 fuzzy requirements before closing can occur.

Sixth, “you want to know what day your home will sell.” An auction can provide a sale on a particular day. Given how long many properties now languish on the market the idea of an assured sale date is hardly unattractive. The catch is: What price will be fetched? The highest bid in a tough market may be disappointing to unrealistic owners.

Seventh, “you want to stop being held hostage by your house.” Here McKissick gets to a very important point, the idea that the longer homes are on the market, the longer they remain unsold, the more prices are discounted in terms of money spent by the owner for such expenses as monthly mortgage costs, maintenance, fees, insurance and taxes.

Eighth, “you want to close.” The fact that a home is under contract does not mean it will automatically go to settlement. In today’s marketplace most real estate agreements are contingent contracts, deals which depend on such things as a satisfactory inspection, specific mortgage rates, or certain repairs. Such contingencies effectively allow the offer to be renegotiated or ended. In contrast, auction sales are final.

McKissick’s book is well written and provides a useful introduction to auctions. It’s worth reading before making a bid or placing a property on the market.

Virgins, Foreclosures & Auctions is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: absolute, auction, bid, bidding, conventional, FHA, foreclosure, Foreclosures, loan, McKissick, mortgage, real estate, VA, Virgin

The study by First Focus and the Brookings Institution says one child in ten has been impacted by the mortgage meltdown.

“An estimated 2.3 million children in single-family homes have already lost their homes to foreclosure,” according to the new study, The Ongoing Impact of Foreclosures on Children.

The report also says three million children are at serious risk of losing their homes in the future and that anther three million children have been evicted, or may face eviction, as a result of rental properties that have been foreclosed.

There’s no doubt that 8 million is a big number and that millions of children impacted by foreclosure should certainly be a matter of concern. That said, it’s likely that the report underestimates the social impact of foreclosure.

Short Sales

To understand why take a look at the report. It does not include short sales, in fact the term “short sale” does not appear in the document.

A short sale is not a foreclosure. There is no auction at the courthouse steps. It’s entirely possible that the owner of a short sale has never received a foreclosure filing.

Nevertheless, the property is distressed. The owner wants to sell the property for less than the remaining mortgage balance. A purchaser wants to buy the property at discount. Both buyer and seller get together and jointly ask the lender to allow a short sale, meaning they want the lender to allow the sale of the property without repaying the entire debt at closing.

Lenders want their money back and as a result will only approve short sales after making sure the property cannot command a higher price and that somehow the seller cannot do more to offset the loss.

Foreclosures

While a short sale does not have the stigma of a foreclosure it can surely result in the loss of a home and a change of address. The trouble is that when children move they often change schools and the mere act of change — by itself — can be disruptive.

The new report is important because it points to one way in which the social contract is being broken. Unfortunately the real damage created by the mortgage meltdown is even larger than the report suggests, a burden which many in the next generation will carry.

Have Foreclosures Impacted 8 Million Children? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: Brookings institution, children, discount, distressed, first focus, foreclosure, lender, loan, mortgage, short sale

Such goodies are now available. Bloomberg News reports that the latest laptops are quick, thin and have huge amounts of storage capacity.

The price for such computing firepower? Anywhere from $1,700 to as much as $4,500. (See: Skinny, Pricey PCs Timed for Windows 8,” May 2, 2012)

So here’s the question: How much more computing power do most of us need?

Not to be a Luddite, but I suspect most people do not need a laptop to calculate the mass of distant stars or keep the books at Goldman Sachs. Instead, computers have become prosaic utilities for most of us, in practice about as different from one another as a set of spoons.

Computers have also become cheap. The machine I bought last year for travel cost about $275. It has a physical keyboard, which I prefer, and a large enough screen for practical use. While it’s true this device probably does not have sufficient computing power to weigh a distant star, few of us have a need for such massive computing strength.

The computers from several years ago had enough power to surf the web, word process, listen to music, look at pictures and operate spreadsheets. Great advances in storage mean that most of us can keep decades of content on whatever machine we happen to own. Expanded storage capacity for most of us now just means more empty electronic space.

The real necessity for new and shiny computers is that such products need to be sold. We’ve gone from desktops to laptops and notebooks, and then to netbooks and now to tablets. Having a thinner computer is no longer a great leap forward in terms of practical advancement unless we reach a point when they can be rolled up and thrown away.

And making computers physically smaller may not be especially helpful. Have you noticed that in recent years your fingers have not shrunk? Do you really want to watch a movie on a cell phone?

When laptops were first introduced I was elated to have a small, mobile machine that would allow me to write articles and figure mortgage amortization schedules for FHA mortgages, VA loans, and conventional financing products. Several generations of computing later and my needs have not much changed. I’m still pleased when a computer can figure mortgage amortization, but whether the equipment is thin or thinner the answer is always the same.

Making computers lighter has been a good idea but we’ve reached the point where making them lighter means a loss of features such as keyboards and disk drives. Disk drives may no longer seem important and for many people probably aren’t, except that to make a rescue disk for my latest netbook you apparently need a CD-ROM backup — something the computer doesn’t actually have.

The result is that to make a rescue disk you need an external drive — but if you have an emergency will the external drive be with you? After all, one big purpose of a small computer is portability.

Maybe the idea is that a new computer is a fashion statement of sorts, like a pet rock or disco ball. But at a time when the marketplace is tough and employment is not as certain as it should be, the suspicion here is that most people are perfectly happy with a small, light computer that simply works — and better yet one that works simply.

PCs: Why The Thrill Is Gone is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: computer, computing, conventional, desktop, FHA, laptop, loan, mortgage, netbook, notebook, PC, price, speed, storage, VA

While home prices are generally down more than 19 percent from the highs seen in 2007, and while fixed-rate mortgages continue to be available at less than 4 percent, borrowers are finding that FHA loans are not a sure thing.

The latest HUD figures for the first six months of the fiscal year show a considerable gap between applications and endorsements, the actual insuring of the loan by the FHA.

FHA loans

“At the half-way point in the fiscal year,” says HUD, “FHA has received a total of 853,559 applications for single-family mortgage insurance. Most of these (449,741) were for home-purchase transactions, though there has been significant activity for refinance actions (363,231) and HECM loans (40,587).”

HUD also says “year to date, FHA has insured 563,379 single-family mortgages. This includes 342,404 purchase cases, 192,055 refinance actions, and 28,920 reverse mortgages.”

In other words while there have been 853,559 applications there have also been 563,379 approvals. More than 290,000 applications have been declined.

Where do borrowers go when their FHA loan application has not been approved?

With the FHA borrowers can purchase with a 3.5 percent down payment. In contrast, VA loans allow qualified borrowers to purchase with zero down while conventional loans with mortgage insurance are typically available with 5 percent down. In addition to down payments borrowers also need cash for closing costs in most transactions.

Approvals Vs. Endorsements

Good news is that FHA applications are up about 6 percent in 2012 — that should be seen as a hint of improving market conditions. Last year at this time the FHA had 805,800 applications.

Approvals are way down, however. While there have been 563,379 FHA approvals this year, during the first six months of the 2011 fiscal year there were 696,786 successful loan applications. In other words FHA approvals are down 19.1 percent.

What to make of the new numbers? First, FHA approval is not a sure thing. Second, borrowers should make certain they have all their paperwork in hand before speaking with the lender.

FHA Mortgage Applications Up, Approvals Down is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: 2011, 2012, application, apply, approval, approve, conventional, decline, endorsement, FHA, HUD, loan, mortgage, percent, VA

Instead, the 2012 edition of the The Quick & Dirty Guide To FHA Mortgages is now available, a clear and short explanation of the FHA program, how it works and how to qualify.

And it’s all in plain language.

“You shouldn’t need a finance degree to get a mortgage,” said author Peter G. Miller. “The system ought to be clear and simple so that both lenders and borrowers can sit down at the bargaining table as equals. That works for everyone.”

More than 40 million people have gotten FHA loans during the past 70 years. The FHA mortgage program has been trusted for decades and with good reason: It requires just 3.5 percent down, has no toxic clauses and the foreclosure rate is well below industry norms.

Miller is the author of seven hard-cover books originally published by Harper & Row. Combined sales exceed 250,000 units. The nationally-syndicated author has appeared on such media outlets as Oprah, the Today Show, CNN, MSNBC and hundreds of others.

According to the latest figures from the Mortgage Bankers Association, the overall foreclosure inventory rate was 4.38% in the first quarter. The rate for FHA loans was substantially lower, just 3.54%.

The National Association of Realtors says 54% of first-time buyers financed with low-downpayment FHA mortgages in 2011.

“FHA loans require as little as 3.5 percent down,” said Miller. “Given home prices which remain soft nationwide as well as mortgage rates near historic lows it’s no surprise that FHA mortgages remain hugely popular. Whether a first-time buyer or a repeat purchaser FHA loans enable mortgage borrowers to obtain real estate financing with great confidence.”

The new e-book is part of Miller’s “quick and dirty” series of practical, low-cost guides published by the Silver Spring Press. Each plain-language guide is designed to be short and easy-to-read. The FHA e-book is approximately 7,900 words and available through both Kindle and through SmashWords in many formats including ePub, Mobi, PDF, LRF, Palm Doc and text.

The 2012 edition of the FHA Guide is priced at just $2.99.

2012 FHA Mortgage Guide Now Available is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: $2.95, 2012, CNN, down payment, e-book, easy, ePub, FHA, Foreclosures, guide, HUD, kindle, loan, LRF, Mobi, mortgage, mortgage rates, Oprah, OurBroker, Palm Doc, PDF, Peter G. Miller, quick, quick & dirty, Silver Spring Press, smashwords, text, the Today Show

Once robo-signing and note ownership questions wind their way through various courts then it can be expected that the number of foreclosure actions will greatly increase. Foreclosures on hold for months and years will go forward as quickly as they can be processed or turned into short sales. The number of distressed properties available for purchase will grow, thus holding down home prices in the short term — if not forcing them lower in major foreclosure centers.

“First quarter metro foreclosure trends were a mixed bag,” said Brandon Moore, chief executive officer of RealtyTrac. “While the majority of metro areas continued to show foreclosure activity down from a year ago, more than half reported increasing foreclosure activity from the previous quarter — an early sign that long-dormant foreclosures are coming out of hibernation in many local markets.”
RealtyTrac — the leading online marketplace for foreclosure properties — says first quarter foreclosure activity increased from the previous quarter in 26 out of the nation’s 50 largest metro areas, led by Pittsburgh (up 49 percent), Indianapolis (up 37 percent), Philadelphia (up 30 percent), New York (up 24 percent), Raleigh, N.C. (up 23 percent), and Virginia Beach, Va. (up 22 percent).

Also from RealtyTrac:

The biggest quarterly decreases in foreclosure activity among the 50 largest metro areas were in Portland, Ore. (down 28 percent), Las Vegas (down 26 percent), Providence, R.I. (down 24 percent), Salt Lake City (down 22 percent), Boston (down 21 percent), and San Jose, Calif. (down 21 percent).

Foreclosure activity down on annual basis in 64 percent of metros Despite the quarterly increase in more than half of the metro areas tracked in the report, first quarter foreclosure activity was still down compared to the first quarter of 2011 in 135 out of the 212 metro areas (64 percent).

Thirty-three of the nation’s 50 largest metro areas posted year-over-year decreases in foreclosure activity, led by Las Vegas (down 61 percent), Seattle (down 53 percent), Austin, Texas (down 51 percent), Salt Lake City (down 49 percent), and Buffalo, N.Y. (down 47 percent).

The biggest annual increases in foreclosure activity among the 50 largest metro areas were in Orlando (up 52 percent), Indianapolis (up 41 percent), Hartford, Conn. (up 38 percent), Miami (up 37 percent), and Philadelphia (up 33 percent).

Top 20 metro foreclosure rates

Stockton, Calif., posted the nation’s highest metropolitan foreclosure rate in the first quarter. One in every 60 housing units in the Stockton metro area had a foreclosure filing during the quarter — more than three times the national average. There were a total of 3,912 Stockton properties with foreclosure filings in the first quarter, down 13 percent from the fourth quarter of 2011 and down 19 percent from the first quarter of 2011.

Nearby Modesto, Calif., posted a foreclosure rate that was fractionally lower than the foreclosure rate in Stockton — giving Modesto the nation’s second highest metro foreclosure rate. Ten other California cities joined Stockton and Modesto among the nation’s Top 20 metro foreclosure rates: Riverside-San Bernardino (No. 3), Vallejo-Fairfield (No. 4), Merced (No. 5), Sacramento (No. 6), Bakersfield (No. 7), Visalia-Porterville (No. 10), Fresno (No. 12), Oxnard-Thousand Oaks (No. 14), Chico (No. 18), and Santa Rosa-Petaluma (No. 20).

Reporting one in every 82 housing units with a foreclosure filing in the first quarter, the foreclosure rate in the Las Vegas-Paradise metro area dropped to eighth highest nationwide thanks to a substantial drop-off in foreclosure activity. A total of 10,192 Las Vegas properties had a foreclosure filing during the quarter, down 26 percent from the fourth quarter and down 61 percent from the first quarter of 2011.

A total of 20,787 properties in the Phoenix-Mesa-Scottsdale, Ariz., metro area had a foreclosure filing in the first quarter, down 5 percent from the previous quarter and down 43 percent from the first quarter of 2011. That gave Phoenix the nation’s ninth highest metro foreclosure rate for the quarter: one in every 87 housing units with a foreclosure filing.

Other metro areas with foreclosure rates among the Top 20 included Atlanta (No. 11), Miami (No. 13), Orlando (No. 15), Rockford, Ill., (No. 16), Chicago (No. 17), and Prescott, Ariz. (No. 19).

Top foreclosure rates among 50 largest metros

The Riverside-San Bernardino metro area in Southern California registered the highest foreclosure rate among the nation’s 50 largest metropolitan areas: one in every 62 housing units with a foreclosure filing during the quarter — more than three times the national average.

Seven other metros among the nation’s 50 largest registered foreclosure rates that were more than twice the national average: Sacramento, Calif. (one in 77 housing units), Las Vegas (one in 82 housing units), Phoenix (one in 87 housing units), Atlanta (one in 90 housing units), Miami (one in 95 housing units), Orlando (one in 101 housing units), and Chicago (one in 107 housing units).

Report Methodology

The RealtyTrac U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing entered into the RealtyTrac database during the quarter — broken out by type of filing. Some foreclosure filings entered into the database during a quarter may have been recorded in previous quarters. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90 percent of the U.S. population. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default —Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). For the quarterly report, if more than one foreclosure document is received for a property during the quarter, only the most recent filing is counted in the report. The quarterly report also checks if the same type of document was filed against a property previously. If so, and if that previous filing occurred within the estimated foreclosure timeframe for the state where the property is located, the report does not count the property in the current quarter.

Is The Foreclosure Slowdown Ending? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: 2011, 2012, Arizona, Atlanta, auction, bank repossessions, California, Colorado, default notices, filings, Florida, foreclose, foreclosure, Georgia, Hartford, Hawaii, Las Vegas, lis pendens, Miami, Michigan, Nevada, orlando, Phoenix, preforeclosure, RealtyTrac, Reno, REO, scheduled auctions, Seattle, short sale

Figures from Fannie Mae show that fixed-rate, 30-year, mortgage loans are now available at 3.9 percent. That’s .90 percent less than a year ago when the same conventional loan was priced at 4.8 percent.

Dropping almost a full percent is a big deal. The $150,000 loan that would have cost $787.00 per month last year for principal and interest is now down to $707.50. That’s a savings of $79.50 per month or $954 per year.

You look at these numbers and wonder: How long can such low mortgage rates continue? Will FHA mortgages, VA loans, and conventional financing loans continue to be available at bargain basement prices?

Mortgage Rates

It’s surprising to see such low rates today. With an economic recovery there should be more demand for capital and thus rates should rise. And while there has been some evidence of improvement in the national economy the numbers show that real estate borrowers can still get financing at rates near historic lows.

The US continues to enjoy a massive advantage in the financial field because this is where capital flows. It may be true that other economies are growing faster but it is only in a few countries where investors have the financial and personal security we take for granted in the US.

Will such low mortgage rates continue? Pent-up housing demand, a growing economy and reduced unemployment could certainly increase mortgage activity and thus push up rates. Alternatively, a new conflict in the Middle East would inevitably raise oil prices, damage the economy and force mortgage rates higher.

Mortgage Rates & National Policy

Given such terrific rates today is it possible that the solution to many of our mortgage problems is really at hand? Why not refinance mortgages at today’s rates — say loans from borrowers with a 640 credit score and 12 full and timely payments in a row? Most current mortgage owners would be paid off in full, meaning a lot of financial books would look better.

Refinancing would also help borrowers by moving them to loans which cost less and lack such things as prepayment penalties and “gotcha” clauses left over from the toxic loan era. With lower monthly costs loans would be less risky and households would have more disposable income. Such changes would translate into fewer foreclosures, more local spending and perhaps even rising home prices.

In the end we have remarkably low mortgage rates. The question is:Will we do something with them or just let an historic opportunity roll by?

Will Mortgage Rates Get Worse? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: disposable income, Fannie Mae, Foreclosures, households, loan, local spending, monthly costs, mortgage, mortgage loan, mortgage rates, prepayment penalties, principal and interest, rate, refinance, rising home prices

The Buffett Rule would tax incomes of $1 million or more at the rate of at least 30%. The Tax Policy Center estimates that 116,000 households would face higher taxes by 2015.

According to the Census Bureau in 2010, the latest year for which we have figures, there were 117,538,000 households. The number of households impacted by the Buffett Rule would be, oh gosh, about one per thousand. In other words, a minority of the top 1 percent, the upper crust of the upper crust.

The idea of a higher effective tax rate for the rich comes in part from Warren Buffett, the Nebraska-based billionaire who says his tax rate is lower than his secretary’s. Under the Buffett Rule if you make $1 million or more you could expect to pay an additional $170,000 according to the Tax Policy Center. That figure suggests that without the Buffett Rule high-income households now have an effective tax rate of just 13% ($1,000,000 x 30% = $300,000. $300,000 less $170,000 = $130,000 or 13%.)

So now the Buffett Rule is at the center of a huge debate: should millionaires and billionaires pay at least a 30% tax rate? If you think about it the whole question is strange for several reasons:

First, the government has a massive deficit. A major reason for that deficit is a lack of tax revenues. Some applaud the government’s financial problems, seeing smaller tax revenues as a way to “starve” the national government. Of course, they don’t seem to object to the paved roads that run outside their homes or the security of living in a nation where your money is safe.

Second, the argument is made that one reason taxes are so high on the poor and middle class is that 100% of their income is typically subject to Social Security taxes. The solution to this problem is to apply the Social Security tax to all income, including dividends, interest and capital gains. After all, if there is no income test to receive Social Security then why should some forms of income be excluded from taxation? Why should a dollar earned on the factory floor be taxed higher and effectively worth less than a dollar from dividends or interest?

Third, worries about a 30% tax rate for our financial elite are laughable. Under President Reagan the top marginal rate was 69% and it was 92% under President Eisenhower, 91% under Kennedy, 77% under Nixon and Johnson, and 39.6% under Clinton.

The Reagan Tax Increases

Reagan, according to Bruce Bartlett, agreed to least 11 tax increases during his presidency. Mr. Bartlett, by way of background, was a senior policy analyst for President Reagan and deputy assistant secretary for economic policy at the Treasury Department during the administration of President George H.W. Bush.

The Buffett Rule should be regarded as the first step in an effort to balance the nation’s finances before there are no finances to balance. Happily, Mr. Buffett and many in the upper brackets understand that paying taxes is not unfair, that they won’t miss a meal and that a functioning federal government and working social contract benefit everyone.

The Social Contract

The social contract? Yes. This is why the rich from all over the world come to the US. As Barron’s explains:

“Any private banker will tell you, that as soon as a centa-millionaire in Moscow, Beijing or São Paolo makes their fortune, the first thing they do is figure out how they can ferret away large chunks of that wealth to countries that guarantee political and personal freedoms, have sound legal systems, a favorable tax environment, good security and good schools for their kids. Those last two items are not to be underestimated. When asked what was the most important factor drawing them to a city, 63% of the globe’s super-rich said ‘personal security’ and 21% said ‘education.’

“Being wealthy in Russia or China or Colombia or Egypt,” said Barron’s, “comes at great personal risk. If a wealthy businessman falls afoul of politicians in any of these countries, or attracts the attention of gangsters, it’s in the realm of very real possibilities that they will get a midnight knock on the door. Best to have a bolt-hole beyond the reach of the local thugs, political or otherwise.” (See: Why London, New York Draw the Wealthy, March 30, 2012)

Why The Buffett Rule Is Just A Start is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: Bartlett, Buffett, Buffett rule, Bush, effective, Eisenhower, Kennedy, marginal, rich, Social Security, tax rate, taxes, upper income, Warren Buffett

RealtyTrac, the leading source of foreclosure data and listings, says that foreclosure filings – default notices, scheduled auctions and bank repossessions — were reported on 572,928 properties during the first quarter, down 16 percent from the same period in 2011.

“The low foreclosure numbers in the first quarter are not an indication that the massive reservoir of distressed properties built up over the past few years has somehow miraculously evaporated,” said Brandon Moore, chief executive officer of RealtyTrac. “There are hairline cracks in the dam, evident in the sizable foreclosure activity increases in judicial foreclosure states over the past several months, along with an increase in foreclosure starts in many judicial and non-judicial states in March. The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen — both in terms of new foreclosure activity and new short sale activity.”

In fact, a tidal wave of foreclosures is coming. The reason is that foreclosure activity has slowed in many areas and actually stopped in some places as the court system tries to deal with several issues. At some point — perhaps sooner than later — the system will be on track and foreclosure activity will soar.

First, we have large numbers of foreclosure filings which were originally made through the robo-signing process. These were foreclosure affidavits signed by individuals at the rate of at least several hundred forms per day.  The accuracy of these forms — and therefore the accuracy of potential foreclosures — is uncertain. In order to make the foreclosure process fair such affidavits must be reviewed to assure they are accurate. In addition, it may be necessary to review past foreclosures to make certain that no borrower lost their home to a wrongful foreclosure action. The $26 billion nationwide robo-signing settlement between five major lenders and 49 states suggests that delays related to robo-signing may be nearing an end.

Second, lenders must be able to show ownership of the debt before they can foreclose. Because of the electronic purchase and sale of mortgage notes there have been cases where the location of the notes is either unknown or unclear. Again, we want to make sure that claims of note ownership are correct so that wrongful foreclosures are avoided.

Also from RealtyTrac:

The first quarter total was the lowest quarterly total since the fourth quarter of 2007, when 527,740 properties with foreclosure filings were reported. The report shows one in every 230 U.S. housing units with a foreclosure filing during the quarter.

Foreclosure filings were reported on 198,853 U.S. properties in March, a 4 percent decrease from February and a 17 percent decrease from March 2011. March’s total was the lowest monthly total since July 2007, and also the first monthly total below 200,000 since July 2007.

Judicial foreclosure activity increases in first quarter

The nationwide decrease in foreclosure activity was caused primarily by decreasing activity in states that use the non-judicial foreclosure process. These 24 states combined, along with the District of Columbia, had 329,854 properties with foreclosure filings during the quarter, more than half the national total — but a decrease of 8 percent from the previous quarter and a decrease of 28 percent from the first quarter of 2011.

Twenty non-judicial states registered year-over-year decreases in foreclosure activity, led by Arkansas, with a 79 percent drop, and Nevada, with a 62 percent drop. Recent legislation or court cases have disrupted the normal foreclosure process in both these states. Other non-judicial states with substantial year-over-year decreases in foreclosure activity included Washington (down 55 percent), Arizona (down 41 percent), Texas (down 31 percent), and California (down 21 percent).

Meanwhile foreclosure activity increased in states that primarily use the judicial foreclosure process. These 26 states combined accounted for 243,074 properties with foreclosure filings during the quarter, an increase of 8 percent from the previous quarter and an increase of 10 percent from the first quarter of 2011.

Judicial states posting some of the biggest year-over-year increases in foreclosure activity in the first quarter included Indiana (up 45 percent), Connecticut (up 38 percent), Massachusetts (up 26 percent), Florida (up 26 percent), South Carolina (up 26 percent), and Pennsylvania (up 23 percent).

Foreclosure starts increase for third straight month in March

First-time foreclosure starts, either default notices or scheduled foreclosure auctions depending on the state’s foreclosure process, increased 7 percent from February to March, the third straight monthly increase. Foreclosure starts in March exceeded 100,000 for the first time since November 2011, although they were still down 11 percent from March 2011.

States with the biggest monthly increases in foreclosure starts included Nevada (up 153 percent), Utah (up 103 percent), New Jersey (up 73 percent), Maryland (up 53 percent) and North Carolina (up 47 percent). Thirty-one states posted monthly increases in foreclosure starts in March.

Nevada, California, Arizona post top state foreclosure rates

Nevada foreclosure activity decreased 26 percent from the previous quarter and was down 62 percent from the first quarter of 2011, but the state still posted the nation’s top foreclosure rate — one in every 95 Nevada housing units had a foreclosure filing during the first quarter. Although Nevada had the top foreclosure rate for the quarter, the state’s foreclosure rate slipped to second highest among the states in March, after 62 consecutive months in the No. 1 spot. Arizona’s foreclosure rate was the nation’s highest state foreclosure rate in March.

Although California default activity increased from February to March — up 14 percent — the state’s overall foreclosure activity in the first quarter was down on a quarterly and annual basis. TheCalifornia foreclosure rate still ranked second highest among all states in the first quarter, with one in every 103 housing units with a foreclosure filing.

One in every 106 Arizona housing units had a foreclosure filing in the first quarter, the nation’s third highest state foreclosure rate. Arizona foreclosure activity during the quarter was down 4 percent from the previous quarter and was down 41 percent from the first quarter of 2011.

Other states with foreclosure rates ranking among the top 10 in the first quarter were Georgia (one in 119 housing units with a foreclosure filing), Florida (one in 123), Illinois (one in 141), Michigan (one in 162), Colorado (one in 191), Utah (one in 198) and Wisconsin (one in 206).

California, Florida, Illinois post top foreclosure activity totals

California’s 133,245 properties with foreclosure filings in the first quarter was the highest total of any state and accounted for 23 percent of U.S. foreclosure activity during the quarter.

Florida posted the second highest state total, with 73,344 properties with foreclosure filings during the quarter. Florida foreclosure activity in the first quarter increased 4 percent from the previous quarter and was up 26 percent from the first quarter of 2011.

Illinois foreclosure activity increased 17 percent from the previous quarter and was up 14 percent from the first quarter of 2011, helping the state post the nation’s third highest state foreclosure total in the first quarter: 37,660 properties with foreclosure filings.

Other states with foreclosure activity totals among the nation’s 10 highest were Georgia (34,234), Michigan (27,934), Arizona (26,956), Texas (23,807), Ohio (23,780), Pennsylvania (12,746), and Wisconsin (12,727).

Time to foreclose increases nationwide, but down in key states

U.S. properties foreclosed in the first quarter took an average of 370 days to complete the foreclosure process, up from 348 days in the previous quarter and the highest average number of days going back to the first quarter of 2007.

Average foreclosure timelines appear to be turning a corner in some bellwether states. The average time to foreclose in California was 320 days, down from 352 days in the previous quarter and the second straight quarterly decrease after 12 straight quarterly increases.

The average time to foreclose also decreased in Colorado, Utah, Massachusetts, Nevada, Michigan and Maryland. Despite the decrease, Maryland still posted the fifth longest time to foreclose, 618 days. The states with the top four longest times to foreclose were New York (1,056 days), New Jersey (966 days), Florida (861 days) and Illinois (628 days).

Foreclosure Activity Tumbles To 5-Year Low, Says RealtyTrac is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: 2011, 2012, Arizona, bank repossessions, California, Colorado, default notices, filings, Florida, foreclose, foreclosure, Georgia, lis, lis penden, loan, Michigan, mortgage, mortgage rates, Nevada, NFS, NOD, Notice of Default, Notice of Foreclosure Sale, Notice of Trustee Sale, NTS, Phoenix, RealtyTrac, Reno, robo-signing, scheduled auctions, settlement

First, a little background.

The FHA has been with us since the 1930s. It popularized the concept of long-term financing at a time when most home mortgages were just five years in length. The FHA also allows buyers to purchase with less down. This happens because the FHA is an insurance program: borrowers pay premiums, the premiums are held in reserve and then if a loan is foreclosed the lender is paid off from the money collected from the premiums.

The FHA has two types of premiums: There’s an up-front mortgage insurance premium (up-front MIP) paid at closing (or added to the loan amount) and an annual mortgage insurance premium (annual MIP). The annual MIP is paid out monthly and declines over time as the loan balance falls.

So far — and “so far” means more than 70 years — no taxpayer money has been used to fund claims against the FHA. However, because of the grossly negative “book of value” racked up by the FHA between 2000 and 2008 it may be that taxpayer money will be needed in the future to pay off lender claims.

New Mortgage Insurance Premiums

For 2012 the new MIP rates look like this for most FHA borrowers:

As of April 9th the up-front mortgage insurance premium for most FHA borrowers will increase to 1.75 percent from 1 percent.

Also as of April 9th, the annual MIP will increase to 1.25 percent, up from 1.15 percent.

Why did the annual FHA premium rise? Because Congress raised the annual MIP when it extended the payroll tax deduction for two months.

Big Mortgages

For several years the FHA loan limits have been as high as $729,750 for a single-family home in high-cost areas.

As of June 11, 2012 the annual mortgage insurance premium will increase by .25 percent to 1.50 percent for FHA loan amounts in excess of $625,500.

Refinancing Older FHA Loans

While most FHA insurance rates are going up there’s at least one opportunity to lower premiums.

If you have an FHA loan originated before May 31, 2009 you can refinance into a new FHA mortgage and enjoy a significantly smaller annual MIP. Qualified borrowers with qualified mortgages will have an up-front fee of just 0.01 percent. The annual MIP is just .55 percent.

For qualified FHA borrowers who refinance the lower annual insurance premium could mean joy and elation — in the form of savings of $1,000 or more for many borrowers.

2012 FHA Mortgage Insurance Premium Changes is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: $725750, annual, book of value, Bush, FHA, FHA loans, loan limits, mortgage insurance premium, payroll tax, reserves, taxpayers, up-front