REO Sales – Fannie Takes Bigger Grip Over them.

REO Sales – Fannie Takes Bigger Grip Over them.

Fannie Mae announced that it will no longer be using third-party management vendors and sales teams to help manage its REO properties. The mortgage giant will now be handling the management of its REO inventories through its in-house staff.

“We have reduced our REO inventory from 162,489 properties at the start of 2011 to 109,266 as of June 30, 2012,” Fannie Mae officials told HousingWire in an e-mail. “With a reduced inventory of properties, Fannie Mae’s in-house teams now have sufficient capacity to manage our REO properties without the assistance of third party asset management providers.”

However, Fannie announced it will continue to use real estate professionals to market the properties.

“Fannie Mae’s goal is to help neighborhoods recover by selling as many properties as possible to owner occupants at competitive prices,” Fannie told HousingWire.

Source: “Fannie Mae Moving REO Management In-House,” HousingWire (Sept. 17, 2012)

Foreclosures Continue to Fall From Last Year’s Levels

Foreclosures Continue to Fall From Last Year’s Levels

Foreclosures are down 13 percent from a year ago when they had reached a 17-month high, RealtyTrac reports. Foreclosures include default notices or scheduled foreclosure auctions.

Many experts had been predicting a foreclosure wave to occur this summer with foreclosures reaching elevated levels. But the “wave” has yet to materialize. Foreclosures increased 1 percent in August from July but remain well-below year ago levels.

Several states saw large decreases in foreclosures in August:

Oregon – 89% decrease

Nevada – 64% decrease

Utah– 57% decrease

Massachusetts – 47% decrease

California – 42% decrease

Arizona – 41% decrease

Georgia – 31% decrease

Foreclosure filings—which includes default notices, scheduled auctions, and bank repossessions—increased 1 percent in August compared to July, but were still down 15 percent from last year’s levels. Also, bank repossessions decreased in August by 2 percent compared to the previous month, marking the 22nd month for declines, RealtyTrac reported.

Strategic Defaulters targeted by ‘Mortgage Cops’.

Strategic Defaulters targeted by ‘Mortgage Cops’

The Office of the Inspector General at the Federal Housing Finance Agency is trying to find strategic defaulters and collect on what they still owe. Strategic defaulters are often underwater home owners who walk away from their mortgages even though they still have the means to pay.

Experian has estimated that 20 percent of all foreclosures are from Strategic Defaulters. The OIG estimates that strategic defaulters owe more than $1 billion to Fannie Mae and Freddie Mac, and they’re ready to start collecting.

The OIG is reportedly working with Fannie Mae and Freddie Mac to develop a mechanism for identifying strategic defaulters.

“Debts that haven’t been repaid don’t just go away,” an unnamed Treasury Department official told The Chicago Tribune. “It doesn’t matter whether it’s on your credit report or not.”

The OIG has an even harsher warning for  strategic defaulters who have failed to disclose that they walked away from a previous loan on any new loan applications. The OIG says such walkaways have constituted mortgage fraud, and the OIG plans to refer them for criminal prosecution.

“We’re not just going to demand repayment,” says Heather Wolfe, OIG assistant inspector general for audits. “We’re going to lock [people] up.”

Source: “Mortgage Cops Taking Tough Stance,” The Chicago Tribune (Sept. 16, 2012)

Fed Moves to Keep Rates Low.

Fed Moves to Keep Rates Low

The Federal Reserve announced Thursday that, in an effort to re-ignite economic recovery, it was taking aim at mortgage rates — a move that will likely take rates even lower from their current record lows.

The Federal Reserve announced it will purchase $40 billion of mortgage-backed securities that will help boost the recovery in the housing market. What’s more, the central bank said that it will continue with the purchase program until the economy shows greater improvement, particularly with unemployment.

“These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodating,” according to the Fed in a public statement.

The Fed says the economy still has a long way to go toward recovery. The Fed predicts the jobless rate will stay above 7 percent well into 2014 and that economic growth will remain slow in the coming months.

At its Thursday meeting, the Fed left its funds rate unchanged at near-zero, but announced the rate — which has a bearing on Mortgage Rates — would remain at “exceptionally low levels” until at least mid-2015.

As mortgage rates sink lower, home shoppers have been taking advantage. The Mortgage Bankers Association announced this week that mortgage applications for home purchases were up 8.1 percent for the week ending Sept. 7. Mortgage applications for purchases also were up 7 percent from year-ago levels, MBA said.

“While low interest rates impose some costs, Americans will ultimately benefit most from the healthy and growing economy that low interest rates promote,” Fed Chairman Ben Bernanke said Thursday following the Fed committee’s meeting.

Source: “Fed Pulls Trigger, to Buy Mortgages in Effort to Lower Rates,” CNBC (Sept. 13, 2012)

Undeveloped Land in High Demand.

Undeveloped Land in High Demand.

Investors have a new target in real estate: undeveloped land. They’re snatching up undeveloped land heavily discounted in bankruptcy proceedings from developers and banks that foreclosed on the builders once they ran out of money for their projects, Reuters reports.

The investors then resell the land for up to 20 percent or more returns on their investment. Or, in a buy-and-hold strategy, the investors partner with home builders to develop the land.

“We are coming out of the mother of all housing cycles, and residential land is the best way to play the ultimate recovery,” Michael Barr, a Paulson & Co. portfolio manager, told Reuters. “Undeveloped land is the highest-returning component of the home building equation.”

Investors find the most attractive land to buy is a parcel that already has all the planning permissions in place to start construction. Otherwise, the approval process for building on the undeveloped land from local and state agencies can be costly and timely.

Source: “Investors Cash-in on Land Deals as U.S. Housing Picks Up,” Reuters (Sept. 10, 2012)

Back-to-School Mentality Drives Housing for Fall.

Back-to-School Mentality Drives Housing for Fall

Forty percent of real estate agents and brokers say the end of vacation season will likely bring a refocus on real estate and a primary driver behind fall home sales, according to a recent survey. ERA Real Estate has dubbed it the “ back-to-school mentality” for the real estate market.

ERA Real Estate surveyed brokers and agents to determine fall trends. Twenty percent of brokers and agents say that buyers’ desires to be in a new home for the holidays as a main motivator in getting more people moving, and 10 percent say a main motivation will be buyers who want to complete their home purchase before the end of the year so they can take advantage of the tax benefits of home ownership.

ERA expects the market of buyers to be made up of the following mix in the fall:

• 27% first-time home buyers
• 20% move-up buyers
• 17% downsizing/retiring buyers
• 14% investors
• 11% military relocations
• 6% vacation home buyers
• 5% other

Source: “Fall Trends in Housing: Back-to-School Mentality Drives Activity,” RISMedia (Sept. 10, 2012)