July 29th, 2010
From the Indy Star
The rate of foreclosures among outstanding mortgage loans in the metro area jumped to 3.21 percent in June, compared with a revised rate of 3.16 percent in May and 2.78 percent in June 2009, said CoreLogic, a Santa Ana, Calif.ornia company that tracks foreclosures. Nationally, the foreclosure rate was 3.06 percent in June.
The delinquency rate — loans 90 days or more behind in payments — fell to 7.1 percent in the metro area in June from 7.28 percent in May. But that’s up from 6.42 percent a year ago. (Star report)
Tags: delinquency, Foreclosures, Indianapolis, Wilmoth
Posted in Indiana, Indianapolis, News and Statistics | No Comments »
July 29th, 2010
RealtyTrac released a little more than just their monthly tracking yesterday. Also included were year to date statistics. If you read my posts you know I do not spend a lot of time on the monthly data results as I find them to be for too narrow of a window. When provided with six months of data, I think some conclusions can be reached.
According to RealtyTrac, year to date, Cape Coral-Ft. Myers is the number two foreclosure market in the country. Making its debut in the top ten, Orlando has now in at number 8. The Miami area has actually dropped a few notches to come in at #10.
Foreclosure activity in the Cape Coral-Fort Myers, Fla., metro area decreased nearly 22 percent from the previous six months and was down nearly 30 percent from the first half of 2009, but the metro area still documented the nation’s second highest metro foreclosure rate — 4.98 percent of its housing units (one in 20) received a foreclosure filing during the six-month period.
Other Florida cities in the top 10 foreclosure rates were Orlando-Kissimmee at No. 8 (4.15 percent of housing units) and Miami-Fort Lauderdale-Pompano Beach at No. 10 (3.89 percent).
It is also interesting to distinguish these foreclosure rates (% of total housing stock) versus actual foreclosure totals. When foreclosure totals are considered large metropolitan areas take over the rankings. For instance, the Miami-Ft. Lauderdale-Pompano Beach metropolitan area is 10th year to date in foreclosure rates, but actually leads the nation in total foreclosures with 94,466 properties receiving a notice during the first six months of 2010. This total rate beats out the Los Angeles metropolitan area in second place with 93,263 filings.
The big picture from this news is foreclosure filings are back on the upswing with 154 of the 206 metropoliatan markets in the USA, with populations in excess of 200,000, posting year over year increases in activity. These widespread increases occurred while activity actually decreased in nine of the 10 areas with the highest rates.
“While we’re seeing early signs that foreclosure activity may have peaked in some of the hardest-hit markets, foreclosures continued to rise in three-quarters of the nation’s metropolitan areas in the first half of the year,” said James J. Saccacio, chief executive officer of RealtyTrac. “The fragile stability achieved in many local housing markets hinges on improvements in the underlying economy, specifically job growth. If unemployment remains persistently high and foreclosure prevention efforts only delay the inevitable, then we could continue to see increased foreclosure activity and a corresponding weakness in home prices in many metro areas.”
Tags: Bank Owned, Bank REO, Florida, Foreclosure, Foreclosures, RealtyTrac, Wilmoth
Posted in Cape Coral, Default, Lee County, News and Statistics, Orlando, RealtyTrac, Statistics | No Comments »
July 28th, 2010
Bloomberg is reporting that, despite so many options for homeowners to avoid foreclosure, the market is correcting itself and the results are not pretty. According to the US Census Bureau, vacant homes are increasing and the rate of ownership is decreasing. In fact the rate of ownership now stands at 66.9%, the lowest level since 1999. Vacant homes stand at 19 million. There is an estimated 128 million homes in the USA so almost 15% today stand vacant.
I will confirm that the Census Bureau is actively attempting to get their arms around the status of vacant homes. Hardly a day has gone by since April where we do not field at least one call from a Census worker wanting to know about a bank foreclosure we have listed. They confirm if it is a foreclosure and if we know if it was vacant on April 1. I suspect this census information will ultimately be the best insight available as to the total devastation in the housing market and more specifically, where the markets are in the worst shape.
Tags: Bank Owned, Foreclosures, Ownership, Vacant Homes, Wilmoth
Posted in REO, Vacant Homes | No Comments »
July 27th, 2010
I follow many different periodicals, blogs and forums..both in print and on line..related to the topic of foreclosure. There is some really bad advise out there for people as to how easy it is to buy foreclosed properties. Today I am going to focus on a few simple facts that likely go against what many of these self-proclaimed knowledgeable people state.
You Should Make Your Offer At 50-60% Under List Price
Only if you wish to waste every body’s time. Most foreclosures are priced today where they receive multiple offers. The list price is where the discount to market exists. Sometimes the bank gets it right, sometimes they need to move the property. Just know that our average sale to list price ratio on bank owned homes over the last 12 months stood at 98% That is for almost 600 properties in four different markets! HINT: There are properties for sale, often by third party servicers or investors, where they do not seem to want to accept the market realities and over-price. These properties will be on the market for 90 or more days. Sometimes a more aggressive offer might fly.
Use A Superstar Agent Who Leads The Market In Their Sales Production
What..because everybody will cow-tow to their super stardom? This one cracks me up. It is a myth put forward by the large franchise real estate players in support of their top producers who are not funding as much overhead in today’s markets. Actually what you want is to find an agent who will follow the bank’s very specific instructions for how to submit an offer! If they are the superstar agent, then fine. In my experience, they often are not. For some reason, after years of foreclosures being a major part of the market, there still seem to be agents who think the banks will do business THEIR way and act like they can control the seller. If you choose one of these agents because of the confidence they seem to exude, you will likely not end up with an accepted offer. Buying bank owned foreclosures is a rather black and white program. Your agent needs to be somebody who excels at following instructions and details step by step. Find out how many bank owned homes they have sold or if you insist on using your cousin, make them share every shred of paper that comes to ensure that things are being done correctly.
The Process Drags Out So Don’t Expect Things To Happen Fast
Again, quite the opposite is true. Be Available! Whether by electronic communication, in person, or proxy, now is NOT the time to take that international vacation. Nobody from the listing agent to the bank really cares if the proposed buyer has to leave the country and will not be available to review the bank addendum contract until next Tuesday when it is due on Monday. Your accepted offer will be cancelled. Remember black and white.
The Bank Will Accommodate The Buyer’s Need For Repairs Discovered After A Inspection
Negotiation for repairs kills more accepted deals than anything else. Yes, I will admit the banks seem to have more tolerance for making a home habitable for owner occupant purchasers than ever before. Start with considering the type of buyer you are when you feel it necessary to request that the leaking kitchen plumbing be repaired. If you are investor, please refer back to some of my as-is means as-is posts. If you are going to live in the property, this request is a wild card. I do not know how the bank will respond. The first question I often am asked is “could the buyer have seen this need for repair on their own prior to making the offer?” If the answer is yes, chances are not good that the bank will front the repair. TIP-If you really want the property, do not haggle with the bank’s response. They usually make one response and if you do not accept it they cancel the deal.
A commonly heard order from Asset Managers is “BOM”. Back On The Market. Nobody is ever happy when this happens. Avoid these pitfalls in order to improve your chance for success in your foreclosure purchase.
Tags: Bank Owned, Bank REO, Buyers, Florida, Foreclosure, Foreclosures, Indiana, Inspections, REO, Wilmoth
Posted in Buyers, Buyers Agents, Foreclosure, Offers, Selling Process | No Comments »
July 26th, 2010
The following is written to other Realtors. Not to upset but to emphasize a point.
When you are contacted by an agent informing you that the home you have listed has been foreclosed, don’t ask or expect to receive a listing cancellation. The fact your listing is executed by a party no longer in ownership cancels your listing.
If you really do not believe the bank’s listing agent, check with your client or the public records. Don’t waste a lot of time hanging on because somebody has an offer in to your seller. Your seller has no authority to accept it and the bank is going to want to complete their own valuation before looking at any offers.
Assuming the home is vacant, the bank will likely hire a company quickly to change the locks. It should not happen but often those fancy electronic lock boxes, are left hanging on the old removed handset. So, don’t waste any time if you are informed of a change in title. Not if you want to get your lock box back easily.
Speaking of lock boxes, we have over and over again worked in a spirit of cooperation to remove a lock box for the former listing agent and leave it somewhere that they can pick it up. When we do this we are not accepting responsibility for what happen to the lock box…so don’t wait a week to come pick it up.
Same can be said for your signs. We work with the former listing agent, but do not take responsibility and don’t have room in our vehicles to throw them in.
It is common for the banks to have a property preservation company that changes the locks, mows the lawns, and removes interior debris and furnishings left behind. A certain estimated value of between $300 and $500 is going to result in a personal property posting notice. Some Realtors have been known to add a few hand towels, kitchen and bath bric-a-brac, and fake flowers in the mode of staging. Chances are these are not going to cross the threshold of being saved as personal property. I have no idea what happens to these items, but please, when you are told the home is foreclosed, just come get your stuff and then confirm. I have seen this become a big issue in several cases where the agent did not want to stop showings because they were convinced that a sale was about to occur.
Last but not least, unless you really want to make some type of point that will cause you to have a bad name with the bank seller and have a complaint filed with your local MLS, go ahead and withdrawl your listing from the MLS when informed of the foreclosure. I realize this is the last line of defense. I have never seen a bank choose to keep the existing listing agent at this point so there is nothing but bad things to occur by taking this path.
I know it is hard to do, and I do have empathy, but the truth that needs to be accepted is that it is “time to move on”.
Tags: Bank Owned, Bank REO, Florida, Foreclosure, Foreclosures, Indiana, Indianapolis, REO, Wilmoth
Posted in Management, REO | No Comments »
July 21st, 2010
The financial reform bill passed by Congress last week will extend for two full years the legislation passed in 2009 that provided tenants in foreclosed properties the opportunity to stay through the duration of their lease. The Protecting Tenants At Foreclosure Act (PFTA) allows all tenants to stay in the home for 90 days after foreclosure or for the duration of their verified lease. This law was one of the most significant changes to how foreclosures are processed of all laws enacted over the last couple of years. Many homes that are occupied and foreclosed happen to have tenant occupants. The former practice was to give the tenant a very short window to move after foreclosure. This is no longer the case. I have also posted here the surprize benefits some banks have found in having certain foreclosed homes occupied.
The two biggest challenges we have seen in following this law has been obtaining the lease that a tenant claims exists and subsequently having the bank’s law firm provide us confirmation as to its terms or a decision it is invalid. This time frame seems to be manipulated by advised tenants realizing that the actual start date to the 90 day mandatory period to vacate the property seemed to be interpreted in different ways by different lenders. This resulted in the second biggest issue as to whether the tenant’s rights under this law started at foreclosure or notice of the foreclosure and advise of their rights. Fortunately, the new law clears this matter up by stating the 90 day period begins with the completed title transfer to the foreclosing party. Specifically:
“The date of a notice of foreclosure shall be deemed to be the date on which complete title to a property is transferred to a successor entity or person as a result of an order of a court or pursuant to provisions in a mortgage, deed of trust, or security deed.’’
Additionally, further clarification is provided that states any lease or tenancy created prior to the change of title as a result of foreclosure is protected by the law. Unfortunately, there is not an obvious way to attack the well-advised tenant who is enters into a fully documented, long term lease just prior to the foreclosure date. These leases will have to be honored and will likely continue the need for banks to hire property managers to execute the lease and collect the rents.
Tags: Bank Owned, Bank REO, Protecting Tenants At Foreclosure Act, Wilmoth
Posted in Protecting Tenants At Foreclosure | No Comments »
July 15th, 2010
Over and over, one of the most common questions I receive is somebody wanting to know what bank owns a home in their neighborhood so they can call and complain about its upkeep. The overgrown yard, broken windows, varmint and green swimming pools are just a little too much. It is not unusual that upon researching the issue I find there is no institutional owner. The legal owner is the caller’s old neighbor. Yet, the banks continue to get hit over the head on this issue.
Here is the back story that needs to be told. Preserving neighborhoods and communities needs to be all of our goals. This has to start with a homeowner or occupant who has the resources to maintain the property to community standards. Many of the efforts to keep an owner in a home, or allow a tenant to remain, seem to look past the issue of maintenance. In all fairness, the same communities who are establishing all kinds of registrations and fines for vacant homes not being maintained, need to enforce the same standards on homes still occupied. I have also actually seen communnities put the heat on a occupant and the occupant will then vacate the home..beginning the process of foreclosure.
I can make an argument that foreclosure is the right option when the homeowner refuses to maintain the property. Foreclosure may hurt the values of surrounding properties, but not as much as the appearance of a vacant, run down home. Here is where this issue often places blame in the wrong place, In 15 years of working with banks on foreclosures, I have never worked with one that does not insist on their properties being maintained to the neighborhood standard. Neighborhood standards is a wide brush I know but if you are in a community, those standards are the ones the banks follow. If 50% of the homes on your street have boards over the windows, the bank will choose to secure their property in the same manner.
The challenge is care and maintanance of the property from the time the occupant stops taking care of it, to the time a bank legally obtains ownership. Due to laws and courts that crawl with these cases, combined with all the efforts to make 100% certain a owner really does not want their home anymore, we now often have a year or more of no maintenance of these properties. Any idea how bad the yard can look, or the pool can smell, after a year? The Indianapolis Star has a community column where people can submit complaints of actual addresses with obvious maintenance or care issues. The newspapaer follows up with the code authorities and at worst a citation is issued and the owner publicly disclosed. I would estimate one out of 20 homes has a bank owner, and the bank violations are usually something that involves something not managed by the bank easily. Such as debris being dumped at the back of the home weekly.
My point..the banks care about condition for many reasons. First, they want to uphold community values…they actually have a vested interest in this due to their ownership. Second, the extraordinary measures being taken, combined with the length of the court process, have created many more issues than we use to see for homes in disrepair. A community has little they can do other than cite an owner who no longer cares and then take care of the matter themselves. In big cities like Indianapolis, there are not enough maintenance workers to stay on top of all the complaints. The assumption that some big bank somewhere just does not care is false. The bank may own this home in the future. When they do, rest assured, maintenance and a better appearance will follow.
Tags: Abandoned Property, Bank Owned, Indianapolis, Property Preservation, Wilmoth
Posted in Property Preservation | No Comments »
July 13th, 2010
This new law in Florida changes the paradigm for how condominium associations can turn around entire developments. Bulk (defined as 7 or more units) buyers will be attracted to these units becasue of the removal of the unpaid association assesment liability and many of the rights of the original developer. Also created is a right for the existing association to collect monthly dues and assessments from tenants in these units. There is a unanswered question in the law as to how much liability tenants in these units will incur with regard to past due fees. This will have to be addressed in the courts when an Association deems it worthwhile. I think this seems like a bad use of money for most associations as the reality of collecting from a tenant an amount of past dues would be slim. Nevertheless, the fact that the bulk buyers can avoid many of the liabilities that previously held them back may spur new investment that could help solidify many shaky developments. Finally, the Act expires July 1, 2012.
There seems to me to be several unanswered questions in this law. If you are interested…here are a few resources to learn more.
Realty Times July 8, 2010
Gray/Robinson Attorneys At Law Press Release
Tags: Bulk Buyers, Condominiums
Posted in Bulk, Florida, Florida Distressed Condominium Act, Investors | No Comments »
July 9th, 2010
Through the years, case after case has occurred where we found a buyer unaccompanied by a Realtor in one of our listings. This practice is so ingrained that many investors believe it is acceptable. An investor has an agent they promise to write offers through if the agent will just provide them with access information to properties when requested. When it involves bank owned properties, the thought is these homes are vacant so I can go at my leisure. I understand that thinking but it is the resulting problems that always made this a no-no for the Wilmoth Group (and also other brokerages).
Problems? The most common problem is the key that did not get placed back into the lockbox. I won’t throw out any accusations on why this occurrs but leave it to be said it makes it impossible for the next agent to show the property. We now have a bank owned client who insists we use electronic lockboxes to prevent this problem. A second problem involves a representative from the seller bumping into an unaccompanied buyer. Seller’s REALLY do not like this! Guess who gets blamed for allowing it to happen?
If you are a Realtor, or a buyer/investor use to this practice, please be advised that as of January 1, 2010 the Realtor Code of Ethics has created a new Standard of Practice which states:
“REALTORS® shall not provide access to listed property on terms other than those established by the owner or the listing broker.”
In almost all cases, the seller of a property requires a buyer to be accompanied by a licensed agent. This new standard creates a Code of Ethics violation when a Realtor permits:
- Entering a vacant or occupied property without an appointment;
- Re-entering a property at a later time without making a second appointment;
- Giving a lockbox combination to unaccompanied buyers.
Note: #1 and #2 are behaviors of a Realtor. Again, vacant bank owned properties seem to be thought to be some kind of exception. We are actually required to provide a monthly report to our seller’s detailing showings and feedback. Accuracy is demanded. We make it easy to show any of our listings by calling Centralized Showings from 8-9pm daily. The number is on the listing sheet.
Now, if we so desire, we can actually file a complaint with the Board when we learn of a violation of this Standard of Practice. I hope word gets out soon to all the Realtors who believe these are acceptable practices.
Tags: Bank Owned, Buyers, Foreclosures, Investors, Lockbox, Realtor Code of Ethics, REO, Wilmoth
Posted in Buyers Agents, Selling Process, Viewing Property | No Comments »
July 8th, 2010
Reported on News-Press.com yesterday, the Consumer Product Safety Commission quickly back-tracked from a report on their website that states corrosion from Defective/Chinese drywall could cause the following fire risks:
”Deterioration of electrical connections could develop “hot spots resulting in overheating and possibly fire.”
“Damage to circuit tracers or electronic components on printed circuit boards, causing failure of protective devices like ground fault circuit interrupters, arc fault circuit interrupters, and smoke alarms, could present shock and fire hazards.”
Potential gas leakage caused by corrosive pitting of piping “could present a fire or explosion hazard.”
The ongoing issue continues to be where is the money going to come from to repair homes with this material? Not one to advocate government aid for every problem, this one appears to me to have enough evidence that it has threatened American homeowners as much as Katrina or the Gulf oil spill. There just continues to be facts in research that are then discounted by our government, in order to avoid taking action.
In the meantime, what are homeowners with defective drywall to do?
Tags: Chinese Drywall, Wilmoth
Posted in Defective Drywall, Issues | No Comments »
