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Pending Home Sales Index For May Drops to Lowest Level In History of Index

By Dennis Norman, on July 1st, 2010

Dennis Norman

There was no question in my mind that home sales would plummet after the April 30th deadline to buy a home and qualify for the home-buyer tax credit passed, the only question was how bad? Today the National Association of REALTORS released it’s Pending Home Sales Index for May showing a decrease of 30.0 percent in the index from April (seasonally adjusted) and a 15.9 percent increase from May 2009. In my past articles I have spoke of a “sugar-rush” created in the market by the tax credits and the sudden slow-down after that wears off…we are Continue Reading →

Deadline Looms for Missouri’s HOPE Tax Credit; St. Louis Interest Rates Drop

By Robert Fishel, on June 30th, 2010

The state of Missouri funded a $15 million tax credit incentive program in January of this year to help spur home sales, but few have taken advantage of the program.

Now, Missouri home buyers must complete the purchase of their home by August 31, 2010 to take advantage of the program. The Missouri Housing Development Commission (MHDC) must receive their HOPE application by September 30, 2010.

HOPE stands for Home Ownership Purchase Enhancement. Homes purchased after August 31, 2010 will not be eligible for the HOPE program.

The HOPE program was expected to pay the property taxes for 9,000 Continue Reading →

Nearly 233,000 Foreclosure and Bank-Owned Homes Sold in First Quarter

By Dennis Norman, on June 30th, 2010

Dennis Norman

Average discount on Foreclosure and Bank-Owned Homes is 27 Percent

This morning RealtyTrac released a report stating that 31 percent of all residential sales in the first quarter of 2010 were foreclosure homes or bank-owned homes. They are reporting 233,000 foreclosure and bank-owned homes sold during first quarter 2010 at an average price discount of 27 percent (based upon average sale price of non-foreclosure properties).

This data is fairly consistent with date from the National Association of REALTORS which reported there were right at 1 million existing homes sold in the first quarter of 2010 and Continue Reading →

House Passes Bill To Extend Closing Deadline For Home-Buyer Tax Credits

By Dennis Norman, on June 29th, 2010

Dennis Norman

UPDATE -July 2 – The President has signed the bill into law….It’s official, the deadline is September 30th to close..

UPDATE-July 1- GOOD NEWS! I Stand Corrected! Yesterday, before ending session, the Senate did PASS H.R. 5623 by Unanimous Consent…the bill now goes to the President for his signature and then will extend the closing date until September 30th…

UPDATE-June 30th-Today was the last day the Senate is in session before the 4th of July break and there was no action on this bill…..The Senate is now on recess until July 12th so nothing Continue Reading →

Home Prices In Most Metro Areas Improved in April But Do Not Show Signs of a Sustained Recovery

By Dennis Norman, on June 29th, 2010

Dennis Norman

This morning S&P/Case-Shiller Index report for April was released showing that theannual growth rates of all 20 Metro Area’s their reports cover improved in April compared to March 2010. The 10-city composite is up 4.6 percent from the year before and the 20-city composite is up 3.8 percent from the year before.

However, in spite of this little bit of encouragement, David Blitzer, Chairman of the Standard & Poor’s Index Committee casts a negative light on the market by pointing out the, while this report does show some price gains, “many of the gains are modest Continue Reading →

Population Growth Equals Housing Demand; Which States are Growing?

By Dennis Norman, on June 28th, 2010

Dennis Norman

While there are many factors that go into what makes for a good or bad housing market and ultimately how well an investment in real estate will do in a market, two things in my book are key; population growth and job growth. Actually job growth brings population growth so perhaps it is the most important factor, but I think one could argue that population growth also brings jobs. Those states that, for one reason or another, attract people to live there (ie; no, or low state income tax, good public education, Continue Reading →

Federal Government Is Largest Owner of Foreclosed Properties; Over 200,000 and Growing

By Dennis Norman, on June 25th, 2010

Dennis Norman

According to a report issued by Radar Logic Incorporated government-sponsored enterprises (GSEs) and Federal agencies involved in housing finance currently have an inventory of over 200,000 repossessed homes. Being the largest owner of foreclosed homes in the U.S. gives the government a lot of power and influence over the housing market for years to come as they will generate significant pressure on home prices as they sell off foreclosed homes in the coming years.

Foreclosed homes currently sell at significant discounts to the unpaid balances of the mortgages they back, generating a loss for the seller Continue Reading →

Two and a half Million Foreclosures; Just the beginning

By Dennis Norman, on June 24th, 2010

Dennis Norman

I spent this morning reading a sobering and, quite frankly depressing, report issued by the Center for Responsible Lending that focused on the demographics of people losing their homes as a result of foreclosure. The report is done well and looks at the impact of foreclosures on different races and ethnicity’s and then addresses what they believe to be the cause of this crisis.

While the reports main subject was eye opening, what really got my attention as I went through the report were some of the facts and figures being quoted. This caused me to Continue Reading →

Fannie Mae’s New Rule Punishes Borrowers That ‘Walk-Away’

By Dennis Norman, on June 23rd, 2010

Dennis Norman

So, you have the money to pay on your ‘underwater’ mortgage, or to afford the reduced payment amount offered to you under the HAMP program, but think, rather than throw good money after bad you’ll just do like so many borrowers are doing and ‘walk-away‘? Well, if you have any plans to buy a house again in, say the next seven years, particularly with a Fannie Mae loan, think again.

Today Fannie Mae announced policy changes to “encourage borrowers to work with their servicers”. These policy changes include, a seven-year “lock-out” period for borrowers that Continue Reading →

New-Home Sales Crash In May after Sugar-Rush of Tax Credit Sales

By Dennis Norman, on June 23rd, 2010

Dennis Norman

Last month after the new home sales reports came out I had this to say:

“I’m very encouraged by home sales in March and April, both in new homes and existing home sales and, if it wasn’t for the fact the homebuyer tax-credit incentive expired April 30th, no doubt a factor that caused buyers to rush to buy, I would feel the market was turning. However, I have strong concerns that this recent “housing recovery” is the result of an artificial market created by incentives, leading to sort of a “sugar-rush” among homebuyers, and now that Continue Reading →

Fannie Mae & Freddie Mac Become Landlords; St. Louis Interest Rates Remain Low and Should Stay Low

By Robert Fishel, on June 23rd, 2010

Fannie Mae and Freddie Mac have become two of the nation’s largest landlords. Both institutions took over a foreclosed home roughly every 90 seconds during the first three months of the year. As of the end of March, they owned over 160,000 houses.

The inventory of Fannie and Freddie continue to increase, but their inventory is only a portion of the total foreclosures. The worst loans were made outside of Fannie and Freddie by banks, thrifts or other private label institutions. Most foreclosures are heavily concentrated in a few key states: Florida, Arizona, Nevada, California and Michigan.

With unemployment hovering Continue Reading →

Home Sales Fall Slightly in May; Still Propped-Up By Tax Credit Deals

By Dennis Norman, on June 22nd, 2010

Dennis Norman

May and June Sales Expected to Remain Elevated as Buyers Rush to Close By June 30th Deadline for Tax Credits.

The deadline to buy a home and qualify for the home-buyer tax credit was April 30th so it’s not surprising we saw pending home-sales increase dramatically in March and April as buyers rushed to get “under-contract” before the April 30th deadline. For those home-buyers that were lucky enough to qualify for the home-buyer tax credit they have, unless Congress extends the deadline, until June 30, 2010 to close on the purchase of their home. Therefore, as I Continue Reading →

Is The Government Going to Push Us Into Another Housing Bust?

By Dennis Norman, on June 21st, 2010

Dennis Norman

UPDATE June 21, 2010- I said I would update this post after the proposed rules were published on the Federal Register with info on how to submit a comment -If you would like to comment, see the comment instructions in the Federal Register (I highlighted them) by clicking here -end of update.

June 4, 2010 Are they really going to repeat the same mistakes that helped cause this housing recession?

I say this because of a release I received from the Federal Housing Finance Agency (FHFA) last week announcing that the FHFA “has sent to the Continue Reading →

Real Estate Market Favoring Lower Priced Home Sales Since 2006

By Dennis Norman, on June 21st, 2010

Dennis Norman

A report just issued by Radarlogic shows that, since 2006, lower-priced homes have been selling better than higher-priced ones. Given the current economy this is not all that surprising but it is a dramatic change from what the norm was during the “housing boom”.

Highlights from the report include:

During the housing boom (2000 through 2005) sales of homes for less than $350,000 remained pretty constant on a year-over-year basis while homes in the $350,000 – $900,000 range increased by 32 percent per year on average. In 2006 the number of home sales in all price Continue Reading →

Mortgage Fraud Sweep Results in Almost 500 Arrests

By Dennis Norman, on June 18th, 2010

Dennis Norman

According to a press release issued by the FBI, nearly 500 people have been arrested in a nationwide mortgage fraud take-down as part of “Operation Stolen Dreams.” This operation was launched on March 1, 2010 and, according to the FBI, has lead to a total of 485 arrests, 330 convictions and the recovery of nearly $11 million. The FBI estimates that losses from a variety of fraud schemes are estimated to exceed $2 billion.

Operation Stolen Dreams is the government’s largest mortgage fraud take-down to date. But FBI Director Robert S. Mueller cautioned that there is Continue Reading →

St Louis Area Foreclosures On The Rise

By Dennis Norman, on June 18th, 2010

Dennis Norman

While foreclosure activity for the U.S. in May decreased by 3 percent according to a report released by RealtyTrac, the news was much worse for the St. Louis metro area, and Missouri as a whole.

Every County in the St. Louis metro area, on the Missouri side of the river, experienced an increase in foreclosures in May from a year ago, and six of the nine counties contained in the report had an increase in May 2010 from the prior month.

On the Illinois side of the river things looked slightly better with 3 of 7 Continue Reading →

Senate Passes Key Amendment to Extend Closing Deadline for Homebuyer Tax Credit

By Dennis Norman, on June 17th, 2010

Dennis Norman

UPDATE-June 30th-As the Willie Nelson song goes. “Turn out the lights, the party’s over”….well at least for now…Today, the last day the Senate is in session before the 4th of July break, there was yet another motion for cloture (to end debate) on H.R. 4213 and once again, like the previous 2 or 3 attempts, Continue Reading →

Fannie Mae and Freddie Mac to Delist Shares on NYSE; St. Louis Interest Rates Remain Low

By Robert Fishel, on June 16th, 2010

Fannie Mae and Freddie Mac notified the New York Stock Exchange (NYSE) of its intent to delist its common and preferred stock. The Federal Housing Finance Agency (FHFA), the conservator for Fannie and Freddie, has directed the companies to delist their common stock and their preferred stock from the NYSE. “FHFA’s determination to direct each company to delist does not constitute any reflection on either Enterprise’s current performance or future direction, nor does delisting imply any other findings or determination on the part of FHFA as regulator or conservator,” FHFA Acting Director Edward J. DeMarco said in a press release.

Continue Reading →

New Home Permits Drop Almost 10 Percent in May; New Home Starts Drop 17 Percent

By Dennis Norman, on June 16th, 2010

The U.S. Census Bureau and US Department of Housing and Urban Development (HUD) issued a their report on New Residential Construction for May 2010 showing a decrease in building permits and a decrease in new home starts from April.

The report shows the following:

Building permits issued for single-family residences in May were at an annual rate of 438,000 which is 9.9 percent below the revised April rate of 486,000 and an increase of 3.1 percent from a year ago when the rate was 425,000. Housing starts for single-family residences in May were at an annual rate of 468,000 Continue Reading →

Closing Deadline For Homebuyer Tax Credits May Be Extended

By Dennis Norman, on June 15th, 2010

Dennis Norman

The deadline to purchase a home to qualify for the extended home-buyer tax credit was April 30th with a deadline of June 30, 2010 to close the sale. Since the deadline to purchase I have heard from many buyers with questions and concerns as they realize that, while they made the April 30th deadline to enter enter a contract to purchase a home, they are concerned that they may not make the June 30th deadline for closing, particularly those buying a new home, and want to know if there were any options available to them to Continue Reading →

Where is the housing market headed in 2010?

By Dennis Norman, on June 14th, 2010

Dennis Norman

Will the Bears or Bulls prevail in 2010?

As the real estate market is beginning to show signs that we are “bottoming out” and that the down-slide is leveling off the discussion has become what the rest of 2010 holds in store. Some say we are entering a Bull market and expect prices to increase from the depressed levels they have reached citing the greatly increased affordability of homes and record low interest rates; others say we are entering a Bear market and that over-supply in the market, largely a result of record foreclosures, will Continue Reading →

FHA Reform Bill Passed by House; Good News for Homebuyers

By Dennis Norman, on June 11th, 2010

Dennis Norman

Yesterday the U.S. House of Representatives passed H.R. 5072, the FHA Reform Act of 2010 which is good news for home-buyers that may need to rely upon an FHA loan for a home purchase. The bill will still need to be passed by the Senate and then signed into law by the President, but a big first step toward this was taken by the House passing it.

Highlights of the bill that I think are important to home-buyers are:

The down-payment requirement for FHA loans will remain at 3.5 percent. There was an amendment to the Continue Reading →

Foreclosure Activity Drops 3 Percent in May; 15th Consecutive Month of Over 300,000 Foreclosure Actions

By Dennis Norman, on June 10th, 2010

Dennis Norman

The good news is, foreclosure activity for the U.S. in May decreased by 3 percent according to a report released by RealtyTrac. The bad news is, May marked the 15 th consecutive month where the overall foreclosure activity has surpassed 300,000 actions; that’s about 4 million foreclosures in the past 15 months.

For May there were foreclosure filings reported on 322,920 properties in the U.S., a 3 percent decrease from April but a 1 percent increase from May 2009. One in every 400 U.S. housing units received a foreclosure filing during the month of Continue Reading →

Bank Of America to Pay $108 Million to Countrywide Borrowers; Interest Rates in St. Louis drop this week

By Robert Fishel, on June 9th, 2010

Bank of America has agreed to pay $108 million to about 200,000 homeowners who paid improper and inflated charges to the defunct subprime mortgage lender that became the poster child of the housing apocalypse, Countrywide Financial. The Federal Trade Commission said two mortgage-servicing units of Countrywide, which BofA acquired in 2008, “deceived homeowners who were behind on their mortgage payments into paying inflated fees — fees that could add up to hundreds or even thousands of dollars.” With continuing worries about about Europe’s debt crisis and the stock market, “flight to quality” should keep dollar denominated assets in favor Continue Reading →

Loan Modification Scams On the Rise

By Dennis Norman, on June 8th, 2010

Dennis Norman

According to data from NeighborWorks America, a national nonprofit organization created by Congress to provide community-based revitalization efforts, every 13 seconds in America, there is another foreclosure filing. This means there are more than 6,600 home foreclosure filings per day and currently, more than 4.5 million households are at risk of foreclosure. Unfortunately there is no end in site as industry experts are predicting 1.5 – 2.0 million new foreclosures in 2010 and as many as a total of 8.1 million by 2012.

This many people in financial distress provides great opportunity for loan modification scam Continue Reading →

St. Louis Foreclosures and Mortgage Delinquencies Hit Record Levels in April

By Dennis Norman, on June 4th, 2010

Dennis Norman

A report released by CoreLogic showed the St. Louis metro area to have a foreclosure rate in April of 1.49 percent up slightly from March’s revised rate of 1.45 percent and an increase of 34.2 percent from the year prior when the rate was 1.11 percent.

The national foreclosure rate for April remains over twice the rate of St. Louis at 3.20 percent and was an increase of 30.1 percent from a year ago when the national foreclosure rate was 2.46 percent. For the State of Missouri the April foreclosure rate was 1.33 percent, a 30.4 Continue Reading →

Should You Buy A Home Or Rent? Top 10 Cities Where You Should Rent

By Dennis Norman, on June 3rd, 2010

Dennis Norman

Last month I did an article, “Should You Rent Or Buy A Home?“, in which I discussed a survey that was done by the National Apartment Association which indicated 76 percent of consumers surveyed believed renting to be a better option than home ownership. Well, today Trulia released it’s new “Rent vs. Buy Index” which established a price-to-rent ratio for the 50 largest cities in America (by population), then, based upon that ratio, determined which cities it makes more sense (financially) to rent versus buy.

The index looks at the total cost of home ownership on Continue Reading →

Pending Home Sales Increase In April as Buyers Rush to Beat Tax Credit Deadline

By Dennis Norman, on June 2nd, 2010

Dennis Norman

Today the National Association of REALTORS released it’s Pending Home Sales Index for April showing an increase of 6.0 percent in the index from March (seasonally adjusted) and a whopping 22.4 percent increase from April 2009. This comes on the heels of a 5.3 percent increase in March and an 8.3 percent increase in February. If these were pure “market-driven” sales this would be extremely exciting news and point toward a recovery in the real estate market. Unfortunately, everything I see points to this being driven primarily, if not purely, by the April 30th deadline to Continue Reading →

St Louis Mortgage Interest Rates Remain Low but obtaining mortgage is more challenging

By Robert Fishel, on June 2nd, 2010

After the problems we have seen over the past couple of years in the real estate, mortgage and banking industries it is not surprising we have seen massive legislative changes brought about which make it more challenging for a home-buyer to obtain a mortgage. Some of the changes borrowers will see when they attempt to obtain a mortgage to buy a home or refinance their existing mortgage include:

Documentation – Did you like that “no-doc” loan you did last time around? Forget it! This time around you may be asked to provide, in addition to items that have been Continue Reading →

Fannie Mae Issues Guidelines For HAFA Short-Sales and Deed-in-Lieu

By Dennis Norman, on June 1st, 2010

UPDATE- June 2, 2010: The National Association of REALTORS obtained answers from the Treasury Department on 3 common questions about HAFA:

agents are not permitted to rebate a portion of their commission to the buyer, sellers who are real estate agents must list their home for sale with another broker, not their own broker, and the incentive allowed for subordinate lien holders (6% of any one subordinate lien, up to a total of $6,000 for all subordinate liens) is a hard cap and may not be supplemented from any source.

Dennis Norman

In March I did an update on Continue Reading →