Did the push for the extension work? 

Courtesy Tara Steele from AgentGenius:

After strong urging from the National Association of Realtors among other industry trade groups, the Senate approved the homebuyer tax credit extension today. Previously, homes contracted before April 30th (when the tax credit expired) were required to close before June 30th in order to qualify for the credit.

Given that the lending process under current conditions cause many loans to take longer than the allotted 60 days to close, the Senate approved a proposal to extend the closing date to September 30th by a vote of 60 to 37.

According to columnist Jay Heflin of TheHill.com, the cost for extending the closing date is $140 million in this approved proposal, authored by Senators Harry Reid, Chris Dodd and Johnny Isakson. Heflin indicates that this means that “the provision reduces the deficit by $175 million over 10 years.”

The importance of this measure

The measure to extend the closing date received mixed reviews from industry insiders ranging from support to condemnation of any government intervention, but the importance of this extension is that buyers that purchased under the premise of getting a tax credit will indeed receive their credit despite a slow moving financial industry.

CM Note: The extesnion still must be passed through reconciliation by the Senate and the House. It is not law yet. If it passes it gives many pending/contingent short sales a chance to close and still get the credit.

In this May 13, 2020 photo, a brand-new $1.1 million, 5,200 square foot home in Davie, Fla. is offered for short sale. The number of homeowners who missed at least one payment on their mortgage surged to a record in the first quarter of the year, a sign that the foreclosure crisis is far from over.(AP Photo/J Pat Carter)

WASHINGTON (AP) — The number of homeowners who missed at least one mortgage payment surged to a record in the first quarter of the year, a sign that the foreclosure crisis is far from over.

More than 10 percent of homeowners had missed at least one mortgage payment in the January-March period, the Mortgage Bankers Association said Wednesday. That number was up from 9.5 percent in the fourth quarter of last year and 9.1 percent a year earlier.

Those figures are adjusted for seasonal factors. For example, heating bills and holiday expenses tend to push up mortgage delinquencies near the end of the year. Many of those borrowers become current on their loans again by spring.

Without adjusting for seasonal factors, the delinquency numbers dropped, as they normally do from the winter to spring.

More than 4.6 percent of homeowners were in foreclosure, also a record. But that number, which is not adjusted for seasonal factors, was up only slightly from the end of last year.

Stocks slid Wednesday as investors remain concerned with the European debt crisis. The rising number of mortgages also drew some attention. The Dow Jones industrial average fell more than 160 points in early trading.

Jay Brinkmann, the trade group’s chief economist, said the foreclosure crisis appears to have stabilized. Seasonal adjustments may be exaggerating the change from the previous quarter, he added.

“I don’t see signs now that it’s getting worse, but it’s going to take a while,” he said. “A bad situation that’s not getting worse is still bad.”

The number of American homeowners who have missed at least three months of payments or are in foreclosure has surged to around 4.3 million, Brinkmann estimated.

The Obama administration’s $75 billion foreclosure prevention program has barely dented the problem. More than 299,000 homeowners had received permanent loan modifications as of last month. That’s about 25 percent of the 1.2 million who started the program since its March 2009 launch.

About 277,000 homeowners, or 23 percent of those enrolled, have dropped out during a trial phase that lasts at least three months.

Economic woes, such as unemployment or reduced income, are the main catalysts for foreclosures this year. Initially, lax lending standards were the culprit. But homeowners with good credit who took out conventional, fixed-rate loans are now the fastest growing group of foreclosures.

Those borrowers made up nearly 37 percent of new foreclosures in the first quarter of the year, up from 29 percent a year earlier.

The risky subprime adjustable-rate loans that kicked off the foreclosure crisis are making up a smaller share of new foreclosures. They made up 14 percent of new foreclosures in the January-March period, down from 27 percent a year earlier.

Two major banks are expecting major increases in foreclosures, by the end of 2010.

According to the Irvine Housing blog, Bank of America (BAC: 18.6201 -0.21%), which currently forecloses on 7,500 homes every month will see that number rise to 45,000 by December 2010 as one senior executive pointed out at a recent trade show. However, a spokesman for BofA told HousingWire, he could not confirm the numbers and they do not reflect a public position of the bank.

JPMorgan Chase (JPM: 46.04 -0.22%) is forecasting bigger foreclosure numbers in the coming months. According to a presentation at the end of February, JPMorgan expects the amount of real estate owned (REO) properties in its portfolio to reach between 33,000 to 45,000 in Q410. By comparison, in Q409, REO inventories were at 23,100.

A property becomes REO after it forecloses and is repossessed by the bank. While those without access to the big bank REO vaults are left to speculate the exact count, many in the industry believe that an expertise in how to liquidate these properties will prove vital to a recovery.

BofA does anticipate a rise in foreclosure activity through the coming months as homeowners slip into delinquency, fail to qualify for or fall out of loan modification programs. The spokesperson said while BofA is preparing for contingencies, they will not go public with any projections as the focus remains to prevent as many foreclosures as possible through both its private modification program and the Home Affordable Modification Program (HAMP).

According to the latest figures from the US Treasury Department, BofA placed 24% of the more than 1m HAMP-eligible loans into active trial or permanent modifications.

Wells Fargo (WFC: 32.145 -0.85%) declined to forecast future foreclosure levels. Citigroup (C: 4.62 -0.43%) did not respond immediately to inquiries.

The Certified Distressed Property Institute has a new white paper out on the new HAFA program.

cdpe-white-paper-on-hafa

To see if you qualify for a HAFA short sale go to my Florida Home Aid website and take the HAFA qualification survey www.FloridaHomeAid.com.

Credit Suisse Recast Chart

It is entirely possible that the housing crisis in Palm Beach County could keep going straight through the end of 2012 according to the new chart from Credit Suisse. The number of Arm, Option Arm, and Alt A loans that will reset in 2010, 2011, and 2012 is enormous. Many of these homes are too far underwater to refinance, and no government intervention short of massive principal forgiveness will help.  Over $1.4 Trillion of loans nationwide will recast in the next 3 years.

As long as interest rates stay extremely low, the recasts may not be that bad, but as soon as rates start moving up…even a little…watch out. Expect a continuation of short sales and foreclosures for the next few years.

Borrowing from Daddy to Loan to Mommy and keeping the interest…..

http://vimeo.com/9032719

Region battered by foreclosures;  2010 to be tough

By Paul Owers, Sun Sentinel

January 14, 2010

 

More than 100,000 homeowners in Broward and Palm Beach counties faced foreclosure last year, up 42 percent from 2008, RealtyTrac Inc. said Thursday.The outlook for 2010 appears just as grim as residents struggle to make mortgage payments amid job losses and salary cuts.

Broward County had 69,633 borrowers in some stage of foreclosure in 2009, compared with 47,387 in 2008. Broward had Florida’s fifth-highest foreclosure rate, at one in every 12 properties.

In Palm Beach County, 30,870 homeowners received a default notice during 2009, compared with 23,399 in 2008. One in every 21 Palm Beach County homes was in some stage of foreclosure.

For the year, Palm Beach, Broward and Miami-Dade counties had the nation’s 10th-highest foreclosure rate among metro areas with populations of 200,000 or more.

“There are not any indications that the foreclosure picture will be any different in 2010 than it was in 2009,” said Greg McBride, senior financial analyst with Bankrate.com in North Palm Beach. “The unemployment rate doesn’t do justice to the number of people working part time instead of full time or those who have been re-employed at a significantly lower rate of pay.”

Florida had the nation’s third-highest foreclosure rate, with 6 percent of the homes receiving a filing during 2009. Only Nevada and Arizona were worse.

Nationally, about 2.8 million foreclosures were filed last year, up 21 percent from 2008 and 120 percent from 2007, RealtyTrac said. The Irvine, Calif.-based firm tracks default notices, scheduled foreclosure auctions and bank repossessions. Not all homeowners who get notices lose their properties.

RealtyTrac expected foreclosure filings to hit 3.5 million for the year, but the pace slowed in the second half of 2009. The firm attributes that to a backlog of properties that lenders have yet to repossess.

Another factor in the slowdown: Lenders placed troubled borrowers in trial loan modifications.

To get the three-month trial modifications, borrowers don’t have to qualify financially. But for permanent adjustments, they must fill out paperwork, and that’s when lenders determine that many homeowners don’t have the income to justify the mortgage modifications. The properties then fall into foreclosure.

“It’s like if you’re jumping through hoops, the first hoop is really, really big, but the last hoop is really, really small,” said Chris Lafakis, an economist for Moody’s Economy.com in West Chester, Pa. “Most people can’t jump through the last hoop.”

An increasing number of homeowners don’t care about modifying mortgages and instead are walking away from properties because they have no immediate hope of regaining equity lost through steep declines in home values.

“At best, they’re ambivalent and at worst they’re totally opposed to saving the property from foreclosure,” said Daren Blomquist, a spokesman for RealtyTrac.

For people who want to avoid losing their homes, the government’s Home Affordable Refinance Program will be a key, Bankrate’s McBride said.

HARP allows homeowners to refinance into fixed-rate loans at today’s low interest rates. To be eligible, the loan-to-value ratios on borrowers’ first mortgages must be 125 percent or less.

The program is set to expire in June, and not enough people know about it, McBride said.

 

 

“This is the Rodney Dangerfield of government housing programs,” he said. “The word has to get out.”

 

Video Highlights:

* 34% Re-default Rate for Fannie Mae/Freddie Mac Loan Modifications

* 39% Increase in Short Sales Vs 14% Decrease in Foreclosure Starts

* 5% of Commercial Mortgages in Default