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Whistleblower wins $18 million

by admin on March 16, 2012

Smart Real Estate News & Commentary by Chris McLaughlin March 16, 2012

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Whistleblower wins $18 million

Attorney Lynn Szymoniak had spent a career investigating insurance fraud when a bank moved to foreclose on her Florida home in 2008. Almost four years later, the fraud she said she uncovered by combing through mortgage documents earned her $18 million.  Szymoniak, 63, is among six whistle-blowers who will pocket $46.5 million as part of a $25 billion national foreclosure settlement that state and federal officials reached in February with five banks, including Bank of America Corp. and JPMorgan Chase & Co. (JPM), according to the US Justice Department.  Szymoniak’s examination, in which she relied on her experience as an insurance-fraud investigator, led to her claims against banks for submitting fraudulent documents to the federal government asserting that they owned loans insured by the Federal Housing Administration, she said.  The national foreclosure settlement with the five banks, which resolves claims of abusive foreclosure practices, provides mortgage relief to borrowers, pays $1.5 billion to those who lost their homes to foreclosure, and sets standards for how the banks service mortgage loans.

As part of the agreement, whistle-blower claims are being settled for about $228 million, according to court papers filed in federal court in Washington. A group of six whistle-blowers will receive $46.5 million out of that amount, said Alisa Finelli, a Justice Department spokeswoman.  Szymoniak’s foreclosure case began in July 2008 when Deutsche Bank AG (DBK), as trustee for a mortgage securitization trust, sued to seize her Palm Beach Gardens, Florida, home, which was once worth $1.3 million. The bank couldn’t prove it owned her loan and claimed it had lost the mortgage note, she said.  Szymoniak said she was first alerted to problems in the paperwork on her foreclosure when Deutsche Bank said it acquired her mortgage note in October 2008, three months after the bank sued her over the loan.  “So I began doing what I’ve done for years — go out and investigate,” she said. “It was pretty obvious to me that the paperwork was fraudulent.”  Her work quickly uncovered widespread document fraud in the mortgage industry, she said, and eventually led to the filing of her whistle-blower cases in 2010.  The whistle-blower claims resolved in the national settlement include a case filed in Atlanta in 2006 in which banks are accused of defrauding military veterans and the US government.  The banks violated rules under a Department of Veterans Affairs program for refinancing mortgage loans by charging improper fees to veterans, according to the complaint. The banks hid those fees and obtained government guarantees on the loans, according to the complaint.

Inflation leaps, gas leads

The Labor Department said its Consumer Price Index increased 0.4% after advancing 0.2% in January. That was in line with economists’ expectations. Gasoline accounted for more than 80% of the rise in consumer prices last month, the department said.  Outside the volatile food and energy category, inflation pressures were generally contained. Core CPI edged up 0.1% after gaining 0.2% in January. The February increase was below economists’ expectations in a Reuters poll for a 0.2% rise.  The Federal Reserve said on Tuesday that the recent spike in energy costs would likely push up inflation temporarily. Over the long-term, inflation was likely to run at or below the its 2% target, it said.

While the US central bank reiterated its expectation that overnight interest rates would remain near zero until at least through late 2014, it offered no clues on whether it would launch a third round of bond buying or quantitative easing, to keep borrowing costs low to stimulate the recovery.  Last month, overall inflation was pushed up by gasoline prices, which soared 6%, the largest increase since December 2010, after rising 0.9% in January.  Although surging gasoline prices are a strain on consumers, they have so far not caused a sharp pull back in spending, thanks to a strengthening jobs market.  Food prices were flat last month after rising 0.2% in January. Food prices were the weakest since July 2010.  Overall consumer prices rose 2.9% year-on-year after increasing by the same margin in January.  Core consumer prices were last month restrained by apparel prices, which fell 0.9% — the most since July 2006 — after rising 0.9% in January. There were also declines in the prices of tobacco, airline tickets and used cars and trucks.  But new motor vehicle prices rose 0.6% after being flat in January. While housing costs held up, owners’ equivalent rent rose only 0.1% last month after increasing 0.2% the prior month.  In the 12 months to February, core CPI increased 2.2% after rising 2.3% in January. This measure has rebounded from a record low of 0.6% in October and the Fed would like to see that closer to 2%.

Olick – Miami condos – bust or boom?

“South Florida real estate developer Martin Margulies has been sitting on prime ocean-front property for five years, waiting for the condo market to rise from the grave. When the market here crashed in 2007, amid overzealous speculators and an abundance of cheap and easy credit, condo construction ground to a halt. The joke had been that the unofficial bird of Miami was the crane, but that bird flew the coop. Apparently it is now swooping back in.  ‘This is the moment because we’re going to be delivering this property next year, and so by that time there will be good demand, there is good demand now,’ says Margulies, who began construction on a brand new high-end condo tower in December.  And he is right. Foreign buyers, largely from South America, but also from Europe, Russia and China, are flooding into the Miami area, and that has developers rushing to keep up with demand.  ‘The music started again in South Florida,’ says Peter Zalewski of CondoVultures, a Florida real estate data and investment firm. ‘We have an arms race of developers moving into the marketplace trying to put up condos or planned condos in anticipation of a recovery in the next two years or so.’

And they are doing it fast. Twenty five new towers with 5200 units are proposed while there are still 4200 unsold units left from the crash. Sounds crazy, but the foreign demand developers and real estate agents are seeing now is just that hot.  ‘The foreign buyer is coming in looking for wealth preservation or taking advantage of the weak US dollar, or coming in because of problems back home, whether it’s Venezuela or Mexico with the drug war,’ says Zalewski, who has been watching and working this market for the past decade.  Foreign buyers are investing as well as foreign developers, like the Melo group, a family business from Argentina. They began construction last August on the first new tower in Miami in at least four years. A lot of people thought they were crazy, but now the tide has decidedly turned. The Melo’s say they have pre-sold the entire building, and they required buyers to put 50% down. Most of their buyers, again, are foreigners with cash.

This new condo boom, while reminiscent of the recent one, is not built on easy credit. In fact, credit is still very tight here, especially for developers. Martin Margulies tried to get a construction loan for his Hollywood project, the Bellini, but could only get 50% financing along with putting up collateral. He called that ‘onerous,’ and instead took out a personal loan, using his massive art collection as collateral. He says he’s not concerned, as his buyers will be putting down 30% on one to four million dollar units.  ‘The kind of buyers we get they don’t need financing, they’re all cash buyers,’ says Margulies. ‘It’s a lifestyle they have, so they’re not reliant on a bank to give the money.’  Most of the foreign buyers in Miami are renting the properties to locals who have either lost their homes to foreclosure or whose credit is not good enough to get a home loan in today’s tough US mortgage market. The question now is, what happens to all these renters when Florida’s single family housing market recovers and credit opens up again?

Will all these foreign investors want to unload their units at the same time?  ‘You wonder if we’re not kicking the can, where we dealt with the problem at hand by dumping it off to foreign buyers, and now as the domestic buyer starts to move back into the marketplace, is that domestic buyer going to pay the same price that the foreign buyer is willing to pay or take the same chances that the foreign buyer is willing to pay?’ asks Zalewski.  It all sounds frighteningly familiar.”

Industrial output down

The Federal Reserve said Friday that the output of the nation’s factories rose 0.3% last month. That followed even stronger increases in January and December, which combined for the best two month stretch since 1998.  Overall industrial production, which includes output by mines and utilities, was unchanged. Mining activity declined sharply and utilities were flat.  Factory output has risen 17.4% since the depths of the recession in June 2009. It remains 6.7% below its pre-recession peak, reached in December 2007.  Growth at US factories was a little slower in February because auto production edged lower after big gains in December and January. Manufacturers made more electronics, energy products and electrical equipment.  Still, manufacturing has strengthened substantially since last summer, when it faltered because of global supply disruptions caused by the Japan earthquake and tsunami. Factories are benefiting from strong auto sales and growing business investment in machinery and other equipment.

Sales up 14% in San Francisco

San Francisco Bay Area home sales grew 14.2% from last year in February with the region recording 5,702 sales, up from 4,991 a year ago, DataQuick said.  The San Diego-based real estate research firm said sales are up over year-prior levels for the eighth straight month, suggesting a tepid recovery could be under way.  New and existing home prices continue drag, with the February median of $325,500 down 0.3% from $326,000 in January and 3.6% from $337,250 a year ago.  Prices in San Francisco hit their peak of $665,000 in June 2007 before plummeting to $290,000 in March 2009 after the nation fell into a prolonged recession.  Much like the Southern California market, distressed home sales accounted for half of the Bay Area’s resale market in February. Foreclosure sales alone made up 27.4% of all resales in the market, while short sales represented 23.1%.  The average monthly mortgage payment in the Bay Area hit $1,225 in February, down from $1,233 in January and $1,440 a year earlier.

Obama to release emergency oil in front of election?

Britain is poised to cooperate with the United States on a release of strategic oil stocks that is expected within months, two British sources said, in a bid to prevent fuel prices choking economic growth in a US election year.  A formal request from the United States to the UK to join forces in a release of oil from government-controlled reserves is expected “shortly” following a meeting on Wednesday in Washington between President Barack Obama and Prime MinisterDavid Cameron, who discussed the issue, one source said.  Britain would respond positively, the two sources said, and Cameron said a release was worth considering.  “We didn’t make any decision, this has to be discussed broadly. We’ve got to look at this issue carefully, it’s something worth looking at. Short-term should we look at reserves? Yes, we should,” Cameron said during a meeting with students in New York.  “We’d both like to see global oil prices at a lower level than they are.”  Details of the timing, volume and duration of a new emergency drawdown have yet to be settled but a detailed agreement is expected by the summer, one of the sources said.  Other countries may also be approached by Washington to contribute, a further source said, Japan among them.   Rising world oil prices have pushed the cost of gasoline in the US up sharply, threatening to stall economic recovery ahead of Obama’s bid for re-election in November.

Renting jeopardizing affordable housing

More Americans are renting houses instead of buying them, a trend that could disrupt price affordability, analysts say.  With more homeowners unable to secure mortgages and uncertain about future finances, renting is the only sure-fire way to live in a single-family property, according to Capital Economics.  But as more Americans turn to home renting, the influx of demand is set to squeeze the nation’s rental supply, pushing monthly rents even higher.  Paul Dales, senior economist with Capital Economics said that rental vacancy rates will fall again in the future, pushing prices up. The median rent is already up to $712 per month—well above the average monthly mortgage cost of $647, Dales reported.  He estimates vacancies in the home-rental market will push average rental rates up as much as 5% by early 2013, compared to 2.4% in January.  “We expect the annual rate at which rents are rising will rise to 3% this year and remain at that level in 2013,” Dales said. “Assuming that the economic recovery gains firmer footing, in future years there is scope for rents to rise by around 4% a year.”

And as single-family renters head into the market, the supply of rentals is unlikely to meet new demand.  This reality is playing itself out in Denver, where the vacancy rate for home rentals fell from 3.4% in the third quarter to 2.1% in the fourth quarter. At the same time, the vacancy rate edged up slightly from the 2% level reported in the fourth quarter of 2010.  “The vacancy rate went up slightly year-over-year,” said Ryan McMaken, a spokesman for the Colorado Division of Housing. “That doesn’t mean much, though, because when you’re looking at vacancy rates below 3%, the bottom line is that the market is tight. For many people, it’s not easy to buy a house right now, so they’re renting.”

See you at the top!
Chris McLaughlin

**************

Copyright Loss Mitigation Institute LLC 2011.
All Rights Reserved.

http://www.shortsalesriches.com

http://www.shortsalescoach.com

http://www.sixfigurebpo.com

http://www.reomillionaireclub.com

http://www.youtube.com/shortsalesriches

http://www.smartrealestatenews.com

(subscribe to this newsletter)

*************************************************

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

* As the top Florida foreclosure and pre-
foreclosure expert, he oversees more than
100 short sale & REO closings each month

* Long-time authority on real estate investing
and rapid reselling of distressed homes.  Owns
portfolio of nearly 150 high-value, high-profit
properties

* Owner of one of Florida’s largest Real Estate firms,
running 4 different offices, supporting over
420 agents, uniquely positioning him to help
thousands of investors make money in the
biggest market opportunity ever!

* In 2011, Chris’ 4 Central Florida real estate offices
closed 3,336 sides for a closed sales volume of
$430,902,643!

* Highly sought-after speaker, consultant, and
seminar leader for current trends and hot topics
in Real Estate Investing, Entrepreneurship, and
Wealth Building

* Follow me on Twitter: http://twitter.com/mclaughlinchris

* Join my Facebook Fan Page: http://www.mclaughlinchris.com

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Orlando short sales 12% higher price

by admin on January 17, 2012

Smart Real Estate News & Commentary by Chris McLaughlin January 17, 2012

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Orlando short sales 12% higher price

The median price of homes sold in Orlando during December 2011 ($118,000) was 12.38 percent higher than the median price in December 2010 ($105,000). During 2011, Orlando’s median price climbed 24.34 percent from a low of $94,900 in January to a high of $118,000 in December. The median price of “normal” sales that closed in December 2011 was $159,900 (representing a decrease of 0.06 percent compared to December 2010). The median price for short sales in December 2011 was $105,000 (an increase of 10.53 percent compared to December 2010), and the median price for bank-owned sales in December was $80,000 (an increase of 6.67 percent compared to December 2010). Orlando Regional Realtor Association (ORRA) members participated in 13.86 percent less home sales in December of this year than in December of 2010: 2,125 and 2,467, respectively. At year’s end, the number of sales for all of 2011 (27,703) was 3.48 less than in all of 2010 (28,701).

In month-over-month comparisons, sales of foreclosed homes declined 56.29 percent in December 2011 compared to December 2010. Short sales and “normal” sales both increased (by 24.41 percent and 14.15 percent, respectively) in December 2011 compared to December 2010. Normal sales (871) accounted for 40.99 percent of all transactions in December 2011, while short sales (785) accounted for 36.94 percent and bank-owned sales (469) made up the remaining 22.07. The Orlando average interest has dropped to a new low once again. Buyers who purchased an Orlando area home in December paid an average interest rate of 3.99 percent, which is the lowest since the ORRA began tracking the statistic in January of 1995. Homes of all types spent an average of 103 days on the market before coming under contract in December 2011, and the average home sold for 92.40 percent of its listing price. In December 2010 those numbers were 97 days and 94.45 percent, respectively.

New York’s factory index up

The New York Fed’s “Empire State” general business conditions index rose to 13.48 from a revised 8.19 in December, topping economists’ expectations of 11.0. It was the highest level since April 2011. New orders climbed to 13.70 from a revised 5.99, while inventories also gained to 6.59 from minus 3.49. The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions. Employment gauges showed strength. The index for the number of employees rose to 12.09 from 2.33 and the average employee workweek index climbed to 6.59 from minus 2.33. Manufacturers were also more optimistic about their outlook with the index of business conditions six months ahead rising to its highest level since last January at 54.87 from 45.61.

More failed HAMP trials

Mortgage servicers are putting more failed Home Affordable Modification Program (HAMP) trials through foreclosure than they were one year ago. According to Treasury Department data released last week, 10.6% of the more that 615,000 canceled HAMP trials completed the foreclosure process as of Nov. 1. That’s more than double the 4.4% of failed HAMP trials foreclosed on as of November 2010. While foreclosures are increasing, alternative modifications on these loans are dropping. Of the canceled HAMP trials, 39.7% went through the bank’s own private programs, down from 45.4% over the same time period, according to Treasury data. Foreclosure completions as a percentage of borrowers never accepted into HAMP trials are lower but still increasing as well. Of the 1.8 million borrowers denied a HAMP trial, 7.6% completed the foreclosure process as of Nov. 1, up from 5% one year before. Roughly 26.5% of these borrowers received alternative modifications, which held flat over the last year.

The increase in more foreclosure completions on failed HAMP trials occurred at nearly every large servicing shop participating in the program. Citigroup saw the highest jump. Of the 71,808 HAMP trials it canceled, roughly 13.5% completed the foreclosure process as of Nov. 1, up from 3.1% one year ago. At Ally Financial, the percentage increased to 12.8% from 6.4% over the same period. At JPMorgan Chase, the increase went to 11.3% from 6.2%. And at Bank of America, the largest servicer in the program, 9.3% of failed HAMP trials went through foreclosure compared to just 1.9% the year before. The highest percentage is currently held by OneWest Bank. It foreclosed on more than 19% of its roughly 20,000 failed HAMP trials, up from 10% last year. Interestingly, Wells Fargo has one of the lowest percentages of completed foreclosures on these mods at 6.7%, almost the exact same percentage one year before.

According to the Office of the Comptroller of the Currency, 17% of the 108,000 HAMP modifications began in the second quarter of 2010 went 60 or more days delinquent within one year. That’s compared to a 31% redefault rate for other private programs. D. Corwyn Jackson, whose company The Corwyn Group helps to train housing counselors for foreclosure prevention, said servicers are getting mixed signals from the government-sponsored enterprises Fannie Mae, which administers HAMP, Freddie Mac and other stakeholders across the country. “The servicers are mandated to stick to the agreed upon foreclosure time lines by state,” Jackson said. “But other stakeholders such as nonprofit housing counseling agencies across the nation are requesting servicers during the negotiation to exhaust their loan workout options before starting the foreclosure process.”

The GSEs charge servicers for taking too long to complete the foreclosure process under specific, state-by-state guidelines. Servicers are expected to still consider the borrower for the GSE programs, but time is of the essence. BofA, for example had to pay Fannie and Freddie $1.3 billion in foreclosure delay penalties in the first nine months of 2011. GSE policies and the failed HAMP trial foreclosure rates is beginning to show in the overall economy. Over the same time period covered by the Treasury data, the shadow inventory of homes in foreclosure or on the verge it has been declining. According to CoreLogic, roughly 1.6 million homes sit in this inventory, down from 2.1 million in November 2010.

DOJ steps up ratings probe

The Justice Department (DOJ) has stepped up its investigation of Standard & Poor’s (S&P) mortgage bond ratings during the financial crisis, the Wall Street Journal reported today. At least five former S&P analysts have been contacted by federal prosecutors in recent weeks, after some had not heard from investigators for more than six months, the newspaper said. The McGraw-Hill Cos Inc unit disclosed in September it had received a Wells notice from the Securities and Exchange Commission indicating it could face civil charges for its ratings of a 2007 mortgage bond deal called Delphinus 2007-1. It has not yet disclosed any investigation by the DOJ, which the WSJ reported is a civil probe. Prosecutors are examining whether S&P managers pushed to weaken standards the company had set for rating the mortgage deals, and whether the company followed its established criteria in assigning ratings. The recent interviews lasted two to three hours, and the former employees were told they would likely by contacted again, the Wall Street Journal said.

DSNews.com – vacant foreclosures cost money

A recent study from the Government Accountability Office (GAO) found that non-seasonal vacant properties across the United States rose 51 percent over the span of a decade, from nearly 7 million in 2000 to 10 million in April 2010. Ten states saw vacancies go up by 70 percent or more as a result of high foreclosure rates. Those with the largest increases over the last decade were Nevada (126 percent), Minnesota (100 percent), New Hampshire (99 percent), Arizona (92 percent), and Florida (90 percent). Georgia, Michigan, Colorado, Rhode Island, and Massachusetts also experienced increases above 70 percent. The elevated number of vacant homes carries with it a hefty price tag for lenders that must resume ownership after foreclosure. GAO found that in 2010, Fannie Mae and Freddie Mac reimbursed servicers and vendors over $953 million for property maintenance costs. However, it’s local governments, many of which are already dealing with depleted funds, that are feeling “significant” pressures from the rise in home vacancies, according to GAO.

The agency notes that other studies have concluded vacant foreclosed properties may reduce prices of nearby homes by as much as $17,000 per property. As a result, municipalities report being out millions of dollars in lost tax revenues. That’s in addition to extra expenditures to put staff, systems, and programs in place to ensure local property ordinances are met, as well as costs associated with addressing public safety issues posed by extended periods of vacancy or improper property maintenance. GAO says the localities it studied are all engaged in multiple strategies to try to minimize the costs and other negative impacts that vacant properties create for their communities.

Efforts range from simple data-gathering to more precisely identifying vacant properties, to acquisition and rehabilitation or, in some cases, demolition of abandoned properties. In addition, some local governments have tasked servicers with additional responsibilities for maintaining properties, amended their code enforcement rules to establish greater incentives for property maintenance, and established specialized housing courts to address vacant property and other housing issues. These strategies, however, face various challenges, particularly the lack of financial support to effectively address such a large-scale problem, according to GAO. As a result, governments in many of the communities GAO examined are reaching out to members of the community – including neighborhood groups and private developers – in an attempt to leverage all available resources. In addition, local governments have called for increased federal funding and greater attention by federal regulators to servicers’ role in managing vacant properties.

See you at the top!
Chris McLaughlin

**************

Copyright Loss Mitigation Institute LLC 2011.
All Rights Reserved.

http://www.shortsalesriches.com

http://www.shortsalescoach.com

http://www.sixfigurebpo.com

http://www.reomillionaireclub.com

http://www.youtube.com/shortsalesriches

http://www.smartrealestatenews.com

(subscribe to this newsletter)

*************************************************

About the author:
Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

* As the top Florida foreclosure and pre-
foreclosure expert, he oversees more than
100 short sale & REO closings each month

* Long-time authority on real estate investing
and rapid reselling of distressed homes. Owns
portfolio of nearly 150 high-value, high-profit
properties

* Owner of one of Florida’s largest Real Estate firms,
running 4 different offices, supporting over
420 agents, uniquely positioning him to help
thousands of investors make money in the
biggest market opportunity ever!

* In 2010, Chris’ 4 Central Florida real estate offices
closed 2,786 sides for a closed sales volume of
$392,912,927!

* Highly sought-after speaker, consultant, and
seminar leader for current trends and hot topics
in Real Estate Investing, Entrepreneurship, and
Wealth Building

* Follow me on Twitter: http://twitter.com/mclaughlinchris

* Join my Facebook Fan Page: http://www.mclaughlinchris.com

{ 0 comments }

NAR – existing home sales decline

by admin on June 22, 2011

Smart Real Estate News & Commentary by Chris McLaughlin June 22, 2011

Forward this e-mail to your friends!

Then they can subscribe directly at the following link:

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*** Join Chris’ Facebook Fan Page–>

http://www.mclaughlinchris.com

*** Follow Chris on Twitter–>

http://www.twitter.com/mclaughlinchris

************************************************************

NAR – existing home sales decline

According to the National Association of Realtors (NAR), Existing-home sales, (completed transactions that include single-family, townhomes, condominiums and co-ops), fell 3.8% to a seasonally adjusted annual rate of 4.81 million in May from a downwardly revised 5.00 million in April, and are 15.3% below a 5.68 million pace in May 2010 when sales were surging to beat the deadline for the home buyer tax credit.  There were notable regional differences in home sales. “A large decline in Midwestern existing-home sales can be attributed partly to the flooding and other severe weather patterns that occurred, but this also implies a temporary nature of soft market activity,” Lawrence Yun, NAR chief economist, explained.  The national median existing-home price for all housing types was $166,500 in May, down 4.6% from May 2010. Distressed homes3 – typically sold at a discount of about 20% – accounted for 31% of sales in May, down from 37% in April; they were 31% in May 2010.  NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said a number of proposals being considered in Washington could further jeopardize the housing recovery. “We’re concerned about the flow of available capital, including a possible rule that would effectively raise minimum down payment requirements to 20%,” he said. “We don’t need to throw the baby out with the bath water – increasing down payment requirements would effectively shut many qualified families out of the market. What we critically need is a return to the basics of providing safe mortgages to creditworthy buyers willing to stay well within their budget.”

Bernanke not likely to make big changes

Federal Reserve Chairman Ben Bernanke is unlikely to announce a major change in monetary policy at his second-ever news conference later today, but investors will hang on his every word for clues on whether the Fed will scale back its presence in financial markets, analysts said.  The central bank will release quarterly economic forecasts and analysts expect them to be revised lower to reflect the recent weakness, but they said Bernanke will be quick to say he sees an acceleration in the recovery.  “I’m sure he’ll predict one,” John Wraith, fixed income strategist at Bank of America Merrill Lynch (BAML), said. “I’m sure he won’t announce any reversal of the stimulus.”  The Federal Open Market Committee is likely to take the formal decision to end the second round of quantitative easing – a program under which it pumps liquidity in markets by buying assets – at the end of June but to leave the reinvestment policy in place, according to analysts from Barclays Capital.  Mark Olson, former Fed governor, said he would be surprised if the FOMC did not vote unanimously to stay the course and that he does not expect big changes in the Fed’s statement.

The Fed’s statement is due at 12:30 pm New York time and Bernanke’s news conference is expected to start at 2:15 pm.  The statement is likely to say that headline inflation was pushed higher by a rise in commodity prices but that these have fallen back somewhat and inflation expectations remain stable, Barclays Capital analysts wrote.

MBA – mortgage applications drop

After experiencing a 13% surge in mortgage applications, the mortgage market lost steam last week with applications dropping 5.9% for the week ending June 17.  While homeowners rushed to refinance earlier in the month, that trend reversed itself, with the refinance index and purchase index falling 7.2% and 2.8%, respectively, the Mortgage Bankers Association said Wednesday.  In addition, the four-week moving averages for the market index and the refinance index are up 0.4% and 0.8%, respectively, while the seasonally adjusted purchase index is down 0.7%.  Refinancing activity cooled as the refinance share of mortgage activity fell to 69.2% of total applications from 70% the previous week. In addition, the adjustable-rate mortgage share of activity fell to 5.9% from 6.1% the prior week.  Meanwhile, the average interest rate on the 30-year, fixed-rate mortgage grew to 4.57%, up from 4.51% a week earlier. The 15-year fixed-rate mortgage also rose to 3.70%, up from 3.67% a week earlier.

Mortgage lender CEO sentenced

Paul Allen, 55, the former CEO of Taylor, Bean & Whitaker, or TBW, pleaded guilty in April to one count of making false statements and one count of conspiring to commit bank and wire fraud.  He was sentenced to more than three years in prison.  The Justice Department said the fraud scheme contributed to the failure of TBW, which was one of the largest privately held U.S. mortgage lending companies, as well as the bankruptcy of Alabama-based Colonial Bank, which was one of the 50 largest U.S. banks.  Former TBW Chairman Lee Farkas, who was convicted on April 19 on 14 counts of fraud for his role in masterminding the scheme, is scheduled to be sentenced on June 27. The Securities and Exchange Commission (SEC) also has a civil action pending against Farkas in the Eastern District of Virginia.  Allen’s co-conspirator Sean Ragland, a 37-year-old former senior financial analyst at TBW, was also sentenced today by Judge Leonie Brinkema to three months in prison.  Four other senior officials with TBW and Colonial Bank have also been sentenced to time in prison ranging from three months to eight years for their role in the fraud.

Assistant Attorney General Lanny Breuer said Allen “concealed TBW’s staggering deficits through false financial reports, which ultimately caused investors to lose more than $1.5 billion.”  He said the sentencing sent a “strong message that corporate fraud by senior executives will not be tolerated,” but also showed that plea deals like Allen’s — under which he provided “substantial assistance” to government investigators — would be taken into account at sentencing.  According to court documents and information presented at trial, Allen and Ragland distributed materially false documents to investors in Ocala Funding, a TBW multi-billion dollar lending facility, from early 2005 through August 2009.  As a result, investors in Ocala Funding lost more than $1.5 billion, while Colonial Bank lost $900 million.

Olick – on the distressed property sales drop

“The share of distressed sales in May, that is foreclosed properties and short sales (when the property is sold for less than the value of the loan), fell to 31% of all sales from 37% in April. Investors, who purchase a large share of these distressed properties, also represented a smaller share in May. So what’s going on?  We know there is still a huge supply of bank owned (REO) properties, and we also know that banks are pushing short sales on many more properties than ever before. But they are also pushing REO sales, thanks to new sales incentives from lenders and the GSE’s (Government-Sponsored Enterprises).  ‘Realtors and mortgage loan officers nationwide are driving mid-to-high end organic, short and distressed sales on the fear that buyers will be unable to qualify for loans once the QRM (Qualified Residential Mortgage) rules are in place requiring 20% down,’ says mortgage market analyst Mark Hanson, describing new rules being considered for risk retention by banks (part of the banking overhaul legislation passed last summer).

Some bloggers though, writing in to me after the existing home sales report, claimed that Fannie and Freddie are holding on to REOs, trying to game home prices. Fannie strongly disputes that.  ‘Fannie Mae doesn’t have a shadow inventory of REO properties that are available to be sold. As soon as we acquire a property, we quickly identify a market competitive price, determine whether to make any necessary repairs and list the property. In the first three months of 2011, we sold a record number of REO properties, selling more properties than we acquired,’ said Amy Bonitatibus, Fannie Mae spokeswoman.  ‘We watch taxpayer dollars like it’s our own money. We have an immense responsibility to get the most possible value from each REO property we sell. We are committed to stabilizing neighborhoods and preserving communities across the country,’ she added.

In fact, Fannie Mae recently launched another program of financial incentives to Realtors to sell REO properties. A note from analysts at Goldman Sachs, titled Foreclosure Sales: Federally Backed Lenders Shifting to Net Sellers, states:  ‘Although these entities could hold property off the market to reduce the negative effects of distressed properties on house prices, they do not appear to be doing so…in Q1 the GSEs and FHA became net suppliers of foreclosed properties to the market for the first time since 2009. Moreover, if the temporary slowdown in REO sales over the last two quarters ends, the federal entities seem likely to add roughly 30% to the sales of fore loses property over the next year as compared with the previous four quarters.’

Bottom line, in order for this housing market to recover, the distressed properties need to go, whether by short sales or REO sales. The distress is driving the fear, which in turn keeps buyers on the sidelines. We need investors, and we need first time buyers, and I will say it until I’m blue in the face: These buyers need better access to credit.”

Oil down

Oil prices fell below $94 a barrel today after a crude supply report reflected mixed signs about U.S. demand and the dollar strengthened against other currencies.  By early afternoon in Europe, benchmark oil for August delivery was down 82 cents to $93.35 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 54 cents to settle at $94.17 on Tuesday.  In London, Brent crude for August delivery was down 41 cents to $110.54 a barrel on the ICE Futures exchange.  The American Petroleum Institute (APA) said late Tuesday that crude inventories fell 81,000 barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted a drop of 2.0 million barrels.  Inventories of gasoline dropped 1.5 million barrels last week, surprising analysts who had forecast an increase of 1 million barrels. Distillates fell 541,000 barrels, the API said.

May delinquencies down

U.S. mortgage delinquencies are faring much better compared to one year ago, according to Lender Processing Services’ “First Look” report released yesterday.  The report provides month-end mortgage performance statistics from LPS’ loan-level database of nearly 40 million mortgages. The Jacksonville, Fla.-based firm will release more detailed reporting in its upcoming “Mortgage Monitor” report, which comes out at the end of this month.  According to the report, 7.96% of U.S. home loans were 30 days past due but not in foreclosure in May, down a staggering 18.3% compared to the same month in 2010. This figure is down a slight 0.1% from April. LPS estimates there are 4.2 million mortgages in delinquency status, with 1.9 million seriously delinquent, meaning 90-plus days past payment.  Foreclosure pre-sale inventory, on the other hand, continued to stay above last year’s averages. Inventory was up 4.11% last month compared to the year ago period, totaling 2.2 million homes.

Florida posted the highest percentage of noncurrent loans statewide in May, followed by Nevada, Mississippi, New Jersey and Illinois. The states with the least percentage were, in descending order, Montana, Wyoming, Alaska, South Dakota and North Dakota.  In other recent news, LPS recently lowered its second quarter earnings estimate by 31% based on the sluggish mortgage market.

See you at the top!
Chris McLaughlin

**************

Copyright Loss Mitigation Institute LLC 2010.
All Rights Reserved.

http://www.shortsalesriches.com

http://www.shortsalescoach.com

http://www.sixfigurebpo.com

http://www.reomillionaireclub.com

http://www.youtube.com/shortsalesriches

http://www.smartrealestatenews.com

(subscribe to this newsletter)

*************************************************

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

* As the top Florida foreclosure and pre-
foreclosure expert, he oversees more than
100 short sale & REO closings each month

* Long-time authority on real estate investing
and rapid reselling of distressed homes.  Owns
portfolio of nearly 150 high-value, high-profit
properties

* Owner of one of Florida’s largest Real Estate firms,
running 4 different offices, supporting over
420 agents, uniquely positioning him to help
thousands of investors make money in the
biggest market opportunity ever!

* In 2010, Chris’ 4 Central Florida real estate offices
closed 2,786 sides for a closed sales volume of
$392,912,927!

* Highly sought-after speaker, consultant, and
seminar leader for current trends and hot topics
in Real Estate Investing, Entrepreneurship, and
Wealth Building

* Follow me on Twitter: http://twitter.com/mclaughlinchris
* Join my Facebook Fan Page: http://www.mclaughlinchris.com

{ 0 comments }

Americans Still Believe Home Ownership is the Best Investment

by admin on April 26, 2011

Smart Real Estate News & Commentary by Chris McLaughlin April 25, 2011

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Americans still believe home ownership is the best investment

According to a report by Pew Research released this week, this figure is only down 3% from 1991. Pew cites a CBS News/New York Times survey completed in 1991.  Of those 81% of the adult sample, 37% “strongly agree” that a home is the ultimate long-term investment, while 44% only moderately agree. Both figures indicate less adamant view than the 1991 survey.  Pew finds the overwhelmingly positive results notable in light of the fact that 47% of survey respondents said their home value depreciated since the beginning of the recession. About one-third of those surveyed claimed their home value has stayed the same, while 17% said their homes are now worth more than before the recession. 

Almost half (44%) of individuals whose homes lost value said they expect to recoup their equity losses in three to five years. Another third are less optimistic and believe it will take between six and 10 years.  Homeowners aren’t the only people who consider a house the best long-term investment one can make. Approximately 81% of current renters surveyed by Pew reported they would like to buy a house at some point. One-quarter said they would continue to rent.  Homeownership ranked first among long-term financial goals for those who took the survey. That prospect was followed closely by living comfortably during retirement, being able to pay for their children’s college and being able to leave an inheritance.  Pew Research polled 2,142 adults between March 15 and March 29 for this survey. The survey sample was comprised 57% of current homeowners and 30% of renters. The remaining percentage of people had special living arrangements, such as living with family members.

Oil up

Crude oil futures advanced as much as 0.7% after Syrian security forces detained at least 200 protesters while unrest showed no sign of ending in Yemen. US Senator John McCain said rebels in Libya need more assistance in the fight against Muammar Qaddafi’s forces. Saudi Arabia, holder of the world’s largest crude reserves, has no plans to raise production capacity, an oil official said.  “The supply-side story hasn’t changed, we lost more than 1 million barrels a day in Libya,” Dominic Schnider, a Singapore- based director for wealth management research at UBS AG, told Susan Li in a Bloomberg Television interview. “Even if you’re going to raise production, the market will be concerned about what happens down the road, if you have an outage in, let’s say, Nigeria, where you have high-quality crude.” 

Oil for June delivery rose as much as 78 cents to $113.07 a barrel on the New York Mercantile Exchange. That’s the highest intraday price since April 11, when futures reached $113.46, the most since September 2008. The contract was at $112.72 at 3:08 p.m. Singapore time.  Brent crude oil for June settlement increased 46 cents, or 0.4%, to $124.45 a barrel on the London-based ICE Futures Europe exchange.  Bullish bets on crude climbed in the past week, according to the Commodity Futures Trading Commission’s (CFTC) weekly Commitments of Traders report. Net-long positions in oil increased 8,337 futures and options combined, or 3%, to 289,916, according to the CFTC report.  US crude inventories fell 2.32 million barrels to 357 million, the first drop since February, the Energy Department said April 21. Cushing stockpiles declined 770,000 barrels to 41 million barrels, the biggest drop since April 2.

Real estate markets show life at top and bottom

Four years after US housing prices began to nose-dive, eventually triggering a global financial crisis, signs of life are appearing at the top and the bottom ends of the market.  By contrast, a sustained recovery remains far off for the vast middle ground of the US housing sector.  Affluent Americans are feeling more secure as the impact of the recession fades and the stock market racks up big gains.  “People who have decent income are saying, maybe I can trade up, buy a better property,” said Bill Hardin, director of the real estate program at Florida International University.  “Some people are even saying, I’m willing to take a loss on the property I’m selling now to get something I couldn’t buy during the housing peak.” 

Sales of homes worth over $1 million, which account for about 1.5% of total US sales, have risen in most states so far in 2011.  Realtors, brokers and others in the housing industry report the first bidding wars for expensive homes since the crash.  At the bottom end, homes are also on the move as investors pay cash for foreclosed properties to rent them out.  It’s a different story in the middle of the market.  Properties worth between $100,000 and $500,000 make up more than 60% of US housing. Sales in that category in March were down across every region of America from the same month a year earlier, when tax breaks were propping up demand.  Foreclosures and short sales — whereby struggling homeowners sell their homes for below what they owe, with the consent of their lenders — are still a big drag. Credit remains tight and middle-income families are more pessimistic than their wealthier compatriots about the economy.  Access to credit is cited as a broad problem. While the rich can simply put more money down, for most would-be buyers the need for more ‘skin in the game’ is a deal-breaker.  Realtors and brokers complain that the credit drought is as extreme as the flood of loose lending of the boom years.  “The pendulum has swung from too far to the left to too far to the right,” Corcoran’s Liebman said. “We need to find some balance in lending.”

Silver at all time high

Immediate-delivery silver climbed as much as 5.4% to $49.79 per ounce, surpassing the previous peak, which according to research company GFMS Ltd was $49.45 in January 1980. The metal traded at $49.2563 at 1:15 p.m. in Singapore, up for a ninth day and set for the longest winning run since an 11-day increase in March 2008. Spot gold also reached a record.  Precious metals have rallied on investor concern that central-bank programs to revive economic growth with record-low interest rates and increased supply of money will reignite inflation and hurt currencies including the dollar.

Silver has more than doubled over the past year.  “It’s driven mainly by speculative buying, with investors eyeing the record for a while now,” Yang Shandan, a trader at Cinda Futures Co., said from Zhejiang, China. “We might get a bout of profit-taking now that we’ve pushed passed the high.”  July-delivery silver on the Comex in New York jumped as much as 8.2% to $49.845 per ounce, before trading at $48.730. The record was $50.35 an ounce, also set in January 1980, according to the exchange. Gold for immediate delivery climbed as much as 0.7% to $1,517.98 per ounce.

WSJ – buyer’s market?

Falling home prices should give aspiring homeowners the upper hand this spring, but in a growing number of locations, it doesn’t feel like a buyer’s market.  Blame the nearly five-year slide of home prices. Those declines, which accelerated over the past two quarters, have left many sellers unable or unwilling to lower their prices. Meanwhile, buyers remain gun shy about agreeing to any purchase without getting a deep discount.  That dynamic has fueled buyers’ appetites for bank-owned foreclosures. Those homes often hit the market at bargain prices, but they are being snapped up by investors who are paying in cash.  The Wall Street Journal’s quarterly survey of housing-market conditions in 28 major metro areas shows inventories of unsold homes remain high but fell during the first quarter.

Listings were down by nearly 25% from one year ago in Miami and Orlando, and by 12% in Phoenix and Portland, Ore., according to figures compiled by John Burns Real Estate Consulting.  Other markets, including New York’s Long Island and Charlotte, N.C., still face imbalances. At the current sales pace, it would take more than 16 months to sell all homes listed for sale in each market. A balanced market typically has a six-month supply.  Meanwhile, home values fell in every metro area for the second straight quarter, according to data from Zillow Inc. Prices were down by more than 5% in Chicago and Detroit, the largest quarterly drops, to levels not seen in more than a decade.  Values have fallen so far that many sellers with equity aren’t willing to drop their prices. Those without equity can’t cut the prices unless the bank agrees to take a loss in what is known as a short sale. Such sales can take months to complete and fall through at the last minute, deterring some buyers. Still, short sales hit a new high, accounting for 9% of all transactions in January, according to CoreLogic Inc. 

“Frankly, until we start building some equity, the market is just going to sit here and do pretty much nothing for the next few years,” says Christopher Thornberg, a housing economist at Beacon Economics in Los Angeles.  Homes that don’t need much repair work and that are located in choice neighborhoods near transit hubs or with good schools are in demand.  While foreclosures are in demand, mortgage companies’ processing problems have sharply curtailed the flow of bank-owned properties onto the market in states such as Florida, New Jersey and New York, where courts must process foreclosures.  To be sure, some of the challenges facing the housing market are easing as the economy adds jobs, boosting demand and easing mortgage delinquencies.Depressed prices coupled with low interest rates have made housing more affordable than at any time since 1975, according to Zillow.  But the legacy of the housing market’s collapse has left two big structural problems. First, the huge erosion in homeowners’ equity has deprived housing markets of the all-important “trade up” buyer. Even those with equity often aren’t willing to sell at current market prices, exacerbating what housing analyst Ivy Zelman calls the “stuck factor.”  Second, foreclosures are still weighing on housing markets. While mortgage delinquencies are down from their 2009 peak, an all-time high of 2.2 million loans were in foreclosure at the end of March, according to LPS Applied Analytics.  Economists say the “shadow inventory” of another 4 million potential foreclosures will keep a lid on prices for years. Even in markets with rising demand and falling inventory, prices won’t go up because “there’s too much on the horizon, so nobody’s in a hurry,” says Ron Leis, a broker in Sacramento, Calif.  Tighter credit standards have also left markets with fewer buyers at a time when more would help.

See you at the top!

Chris McLaughlin
**************

Copyright Loss Mitigation Institute LLC 2010.

All Rights Reserved.

http://www.shortsalesriches.com
http://www.shortsalescoach.com
http://www.sixfigurebpo.com
http://www.reomillionaireclub.com
http://www.youtube.com/shortsalesriches 

http://www.smartrealestatenews.com (subscribe to this newsletter)

*************************************************
About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

    * As the top Florida foreclosure and pre-
      foreclosure expert, he oversees more than
      100 short sale & REO closings each month
   * Long-time authority on real estate investing
      and rapid reselling of distressed homes.  Owns
      portfolio of nearly 150 high-value, high-profit
      properties
    * Owner of one of Florida’s largest Real Estate firms,
     running 4 different offices, supporting over
     420 agents, uniquely positioning him to help
     thousands of investors make money in the
     biggest market opportunity ever!

   * In 2010, Chris’ 4 Central Florida real estate offices

      closed 2,786 sides for a closed sales volume of

      $392,912,927!  
    * Highly sought-after speaker, consultant, and
      seminar leader for current trends and hot topics
      in Real Estate Investing, Entrepreneurship, and
      Wealth Building
    * Follow me on Twitter: http://twitter.com/mclaughlinchris
    * Join my Facebook Fan Page: http://www.mclaughlinchris.com

{ 0 comments }

DSNews.com – FHA predicts higher sales

by admin on April 18, 2011

Smart Real Estate News & Commentary by Chris McLaughlin April 18, 2011

Forward this e-mail to your friends!  Then they can subscribe directly at the following link:  http://www.smartrealestatenews.com/

*** Join Chris’ Facebook Fan Page–> http://www.mclaughlinchris.com

*** Follow Chris on Twitter–> http://www.twitter.com/mclaughlinchris

************************************************************

DSNews.com – FHA predicts higher sales

Freddie Mac forecasts a 5% increase in 2011 home sales over 2010, according to its U.S. Economic and Housing Market Outlook for April.  The report also contends that refinancing will likely account for a smaller share of loan applications later this year as wealthy borrowers decrease and mortgage rates increase.   “Expect to see a bit of spring in homes sales activity during the second quarter,” said Frank Nothaft, VP and chief economist at McLean, Virginia-based Freddie Mac.  Nothaft continued, “Sales contract signings for existing homes were up in February, positioning the market for a bounce up going into the traditional home-buying season.”  The expected pick-up in home sales is due to recent positive employment reports, the Market Outlook reveals. Unemployment declined for the fourth straight month to 8.8%, and net employment increased by 216,000 jobs. Real estate employment was up by 10,000 jobs since last November.  The report also calculates that the share of adjustable-rate mortgage loans will be 7% in 2011 compared to the 5% 2010 average.  Freddie Mac compiles data on major economic and housing and mortgage market indicators and offers forecasts based on those indicators.

US credit rating outlook lowered

S&P maintained its ‘AAA/A-1+’ credit rating on U.S. sovereign debt, saying the nation’s “highly diversified” economy and “effective monetary policies” have helped support growth.  But the agency lowered its outlook for America’s long-term credit rating to “negative” from “stable,” based on the uncertain political debate around the nation’s fiscal problems.  The outlook means that there is one-in-three likelihood that it could lower the long-term rating on the United States within two years, S&P said.  ”The outlook reflects our view of the increased risk that the political negotiations over when and how to address both the medium- and long-term fiscal challenges will persist until at least after national elections in 2012.”  On top of that, the IMF said the U.S. budget deficit was on course to hit 10.8% of nation’s economic output this year, tying with Ireland for the highest deficit-to-GDP ratio among advanced economies. It urged Washington to move quickly to put a credible plan in place to tighten its belt.  While most of the criticism came from emerging market economies, some advanced nations joined the chorus.  Dutch Finance Minister Jan Kees de Jager warned that if the United States and other advanced nations move too slowly it could undermine confidence in the global economy.  Brazil’s finance minister, Guido Mantega, offered sharp words in a thinly veiled attack on the United States. “Ironically, some of the countries that are responsible for the deepest crisis since the Great Depression, and have yet to solve their own problems, are eager to prescribe codes of conduct to the rest of the world,” he said.  The Group of 20 countries agreed on Friday to a plan that could put more pressure on the United States to fix its deficits as well as push other leading economies to address their own shortcomings.

Olick – what about private insurance?

“It’s no surprise that the private mortgage insurance industry is fighting hard against proposed new risk retention rules for the mortgage industry.  They are already trying to pick themselves up and dust themselves off from the near knockout punch the Federal Housing Administration (FHA) gave them, when the government mortgage insurer took over their market share while saving the housing market from complete and total bust.  The FHA became the only game in town for the less credit-worthy borrowers with lower down payments. Now, just when the private guys are trying to get back in the game, they’re getting battered again.  The proposal for a ‘Qualified Residential Mortgage,’ which would be exempt from 5% risk retention by the banks, which of course the banks don’t want to retain, requires, among many things, that the buyer put 20% down on the home.  ‘We do not believe that affordability and sustainability are mutually exclusive goals,’ Kevin Schneider, president of the Mortgage Insurance Companies of America testified before Congress yesterday (he’s also CEO of U.S. Mortgage Insurance of Genworth Financial). ‘We understand the drivers of sustainable, affordable homeownership because the private MI industry has a vested interest in assuring that low down payment homebuyers purchase homes with loans that they can afford to pay over time.’

The FHA is exempt from QRM, so low down payment borrowers have to go there in the current market environment; there’s really nowhere else. Fannie Mae and Freddie Mac may be exempt from QRM, but that is still in question, and they are requiring higher down payments these days as well. Mortgage insurers are happy for Fannie and Freddie to be exempt from QRM, as long as they are under government conservatorship, because many of those borrowers get private mortgage insurance. But once the two are out of conservatorship, which is the big push, then they are no longer exempt from that 20% down payment, or so goes the theory.  ‘A return to private capital in the new home finance structure is crucial. Privately insured mortgage loans should be included in the QRM definition to be given parity with FHA-insured loans,’ stressed Schneider.”

45% owe no taxes

For tax year 2010, roughly 45% of households, or about 69 million, will end up owing nothing in federal income tax, according to estimates by the nonpartisan Tax Policy Center. Some in that group will even end up getting paid money from the federal government.  That does not mean such households end up paying no taxes whatsoever. For instance, those in the group still pay other taxes such as state and local income taxes, as well as property and sales taxes.  And the group doesn’t necessarily get off scot-free when it comes to payroll taxes – which support Social Security and Medicare.  More than two-thirds – or 49 million of the 69 million households – pay payroll tax. Of those, 34 million end up paying more in payroll taxes than they get back on their federal return. The other 15 million pay payroll tax but they get enough refundable credits to offset what they paid.  The vast majority of the 69 million households make less than $50,000 – with very heavy representation among households making less than $30,000. 

The ranks of those whose federal income tax burden nets out to zero – or less – have grown in recent years for two reasons.  The first is temporal.  The downturn in the economy has hurt household incomes and various stimulus bills offered Americans temporary tax breaks to mitigate the economic pain – thereby further reducing their tax bills.  The second is more systemic.  The tax code is filled with hundreds of tax breaks to encourage economic activities the government favors, tax experts say. For instance, the law offers credits to supplement the wages of low-income workers, help families pay for college and encourage them to buy homes and have children.  Temporary tax policies, such as the Bush-era tax cuts and the tax breaks passed under President Obama, have also increased the ranks of the non-payers.  If most tax breaks were removed, the Tax Policy Center estimates, the percentage of households with no federal income tax liability would drop to 27% from 45%.

WSJ – mortgage rates rise for 4th week

Mortgage rates rose slightly, with the average rate on 30-year fixed-rate mortgages climbing for a fourth straight week, according to Freddie Mac’s weekly survey of mortgage rates.  The 30-year fixed-rate mortgage averaged 4.91% in the week ended Thursday, up slightly from the prior week’s 4.87% but down from 5.07% a year earlier.  Mortgage rates generally track U.S. bond yields, which move inversely to Treasury prices. Rates have climbed this year after slumping most of last year when prices rallied on economic uncertainty.  Rates on 15-year fixed-rate mortgages averaged 4.13% in the latest week, up from 4.1% in the previous week but down from 4.4% a year earlier.  Five-year Treasury-indexed hybrid adjustable-rate mortgages were 3.78%, up from the prior week’s 3.72% but down from 4.08% a year earlier. One-year Treasury-indexed ARMs were 3.25%, up from 3.22% but down from 4.13%, respectively.  To obtain the rates, the 15-year fixed-rate mortgages required payment of an average 0.7 point and the others required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.

Florida’s $1 Billion “hardest hit fund” rolled out

 The Florida Housing Finance Corp. is finally ready to put $1 billion in Treasury Department funds to use by funding solutions for distressed homeowners across the state.  On Monday, the agency began accepting applications for the Florida Hardest-Hit Fund (HHF), a program that offers qualifying borrowers two options for saving delinquent mortgages. The Treasury Department disbursed funds from its $7.6 billion Hardest-Hit Fund last summer, but the roll-out is just now taking place.  Wells Fargo is also in talks with them Arizona Department of Housing to join a program providing principal reduction on delinquent mortgages using some of the $268 million allocated to the southwest state through HHF, a source familiar with the negotiations said earlier this month. Bank of America is also doing the same in the state.  Plan one under Florida’s program offers unemployment mortgage assistance that runs up to six months or $12,000 in total payments, whichever threshold is reached first. In addition, the mortgage loan reinstatement program was deployed to bring delinquent mortgages up to date, with the cap at $6,000.  Florida Housing Finance Corp. launched a pilot program in Florida’s foreclosure-ridden Lee County in March. Homeowners across the state can now submit applications.  The program is the result of a 2010 Treasury initiative in which the federal agency created the Housing Finance Agency Innovation Fund for the hardest-hit housing markets. The Treasury agreed to allocate millions of dollars to states riddled with distressed loans and suffering from high housing depreciation rates. The states include Florida, California, Arizona, Michigan and Nevada.

See you at the top!

Chris McLaughlin
**************

Copyright Loss Mitigation Institute LLC 2010.

All Rights Reserved.

http://www.shortsalesriches.com
http://www.shortsalescoach.com
http://www.sixfigurebpo.com
http://www.reomillionaireclub.com
http://www.youtube.com/shortsalesriches 

http://www.smartrealestatenews.com (subscribe to this newsletter)

*************************************************
About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

    * As the top Florida foreclosure and pre-
      foreclosure expert, he oversees more than
      100 short sale & REO closings each month
   * Long-time authority on real estate investing
      and rapid reselling of distressed homes.  Owns
      portfolio of nearly 150 high-value, high-profit
      properties
    * Owner of one of Florida’s largest Real Estate firms,
     running 4 different offices, supporting over
     420 agents, uniquely positioning him to help
     thousands of investors make money in the
     biggest market opportunity ever!

   * In 2010, Chris’ 4 Central Florida real estate offices

      closed 2,786 sides for a closed sales volume of

      $392,912,927!  
    * Highly sought-after speaker, consultant, and
      seminar leader for current trends and hot topics
      in Real Estate Investing, Entrepreneurship, and
      Wealth Building
    * Follow me on Twitter: http://twitter.com/mclaughlinchris
    * Join my Facebook Fan Page: http://www.mclaughlinchris.com

{ 0 comments }