Mortgage delinquencies hit record high in Q2

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Delinquencies and foreclosures set record in 2nd quarter, as more homeowners lose their jobs

By Alan Zibel, AP Real Estate Writer
On Thursday August 20, 2009, 10:12 am EDT

WASHINGTON (AP) -- More than 13 percent of American homeowners with a mortgage are either behind on their payments or in foreclosure as the recession throws more people out of work, the Mortgage Bankers Association said Thursday.

The record-high numbers in the report are being driven by borrowers with traditional fixed-rate mortgages, rather than the shady subprime loans with adjustable rates that kicked off the mortgage crisis. As of June, more than 4 percent of all borrowers were in foreclosure and about 9 percent had missed at least one payment.

One in three new foreclosures between April and June was from a prime, fixed-rate loan, up from one in five a year earlier. Last year, subprime adjustable-rate loans caused the largest share of foreclosures.

The worst of the trouble is still concentrated in California, Nevada, Arizona and Florida, which accounted for 44 percent of new foreclosures in the country. Nearly 12 percent of all loans in Florida were in foreclosure, the highest in the country, followed by Nevada at 9 percent.

"Clearly we have not seen the bottom in Florida," said Jay Brinkmann, the trade group's chief economist.

President Barack Obama has pledged to fight the problem, but its foreclosure prevention program, known as "Making Home Affordable," is off to a disappointing start. As of July, only about one in 10 of eligible borrowers had signed up.

The success of the program depends on the economy stabilizing. The number of first-time claims for unemployment benefits rose unexpectedly for the second straight week, the Labor Department said Thursday.

The number of new jobless claims rose to a seasonally adjusted 576,000 last week, from a revised figure of 561,000. Wall Street economists expected a drop to 550,000, according to a survey by Thomson Reuters.

AP Economics Writer Christopher S. Rugaber contributed to this report.

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Fed survey: bank lending tight through mid-2010

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Fed survey: Banks see lending tight through mid-2010, mortgage standards looser in 2nd quarter

By Marcy Gordon, AP Business Writer
On Monday August 17, 2009, 4:36 pm EDT

WASHINGTON (AP) -- The Federal Reserve said Monday most banks expect their lending to remain tight through the second half of next year, with the exception of mortgage standards, which already are loosening a bit.

The Fed's latest survey of loan officers found that about 20 percent of U.S. banks tightened their lending standards on prime home mortgages in the April-June quarter, down from around 50 percent in the previous quarter and a peak of about 75 percent a year ago.

Meanwhile, 45 percent of banks say they tightened standards on nontraditional mortgages, such as adjustable-rate loans with multiple payment options, down from 65 percent in the April survey and around 85 percent a year ago.

Around 35 percent of U.S. banks in the July survey reported tightening their lending standards for credit cards, down from nearly 60 percent in the previous survey and around 65 percent a year ago.

"The report tells us that credit is not becoming more readily available, but also that the credit freeze is at least moving in the direction of a thaw," said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities.

Getting banks hurt by the financial crisis to boost lending is critical to a sustained economic recovery.

Demand for prime mortgages has begun to revive, posting its first increase in the January-March quarter since the Fed began to track those loans separately in April 2007.

The uptick in mortgage demand comes as rates rose last week. Rates on 30-year home loans remained above 5 percent, at 5.29 percent, after reaching a record low earlier this year.

The Fed survey was based on the responses of 55 domestic banks and 23 U.S. offices of foreign banks.

Most of the banks polled expect their standards for all types of loans to remain tighter than average levels over the past decade through at least the second half of 2010. For businesses and families with tarnished credit, that is expected to continue into "the foreseeable future" for many banks, the Fed reported.

Except for prime mortgages, loan demand remains weak, LaVorgna noted. "We will become more bullish on the pace of the recovery if loan demand firms or lending standards ease," he said. "Until then, expect a muted, sub-par return to growth."

The Treasury Department, meanwhile, said Monday that the value of loans held by the 22 biggest banks receiving federal bailout support fell in June for a fifth straight month. That survey did find that the amount in new loans made in June rose 12.7 percent following a 1.4 percent increase in May.

The monthly survey monitors the impact the bailout program is having on the goal of boosting loans to consumers and businesses. The banks that have received support include Citigroup Inc. and Bank of America Corp.

In other lending pinpointed in the Fed survey, around 45 percent of banks said they tightened standards on commercial real estate loans over the last three months, down from 65 percent in the April survey and around 80 percent a year ago.

While banks' losses on home mortgages appear to be leveling off, delinquencies on commercial real estate loans remain a hot spot of potential trouble, experts say. Many regional banks hold large numbers of them.

A dramatic example was Colonial BancGroup Inc., a big lender in real estate development that failed and was shut down by regulators on Friday -- the biggest U.S. bank to collapse this year with about $25 billion in assets. Montgomery, Alabama-based Colonial was a major lender to developers in Florida and Nevada and was hit hard by the collapse of the real estate market in those states. Its failure is expected to cost the federal insurance fund around $2.8 billion.

The Fed on Monday extended through March 31 the duration of a program intended to spur lending to consumers and small businesses at lower rates, though it said it had no plans to expand the types of loans being made. The Term Asset-Backed Securities Loan Facility figures prominently in the government's efforts to ease credit, stabilize the financial system and help end the recession. Under the TALF, investors use the funds to buy securities backed by auto and student loans, credit cards, business equipment and loans guaranteed by the Small Business Administration.

Commercial mortgage-backed securities, which were added to TALF in mid-June, were extended through June 30 because issuing new securities in that area "can take a significant amount of time to arrange," according to a joint news release from the Fed and the Treasury Department.

Last week, the Fed held interest rates steady at record lows and again pledged to keep them there for "an extended period" to entice businesses and consumers to spend more and nurture an anticipated recovery.

The Obama administration is counting on tax cuts and increased government spending to revive the economy. And it has put forward plans to rescue banks and curb home foreclosures, also key ingredients to turning the economy around.

Lax lending standards during the housing boom allowed some people to buy homes that they couldn't afford. When the boom ended, dragging home values down, foreclosures skyrocketed and banks wracked up huge losses on soured mortgage investments.

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5 Steps To Sell Your Home Quickly In A Buyer Market.

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By: Carey Harris

The best way to tell if your area is in a buyer's or seller's market is to check the average number of days homes are on the market before selling. When this number rises above 60 days, it's definitely a buyer's market. That means it's a great time to be a buyer, but not such a great time to be a home seller.

Another method is to look at the number of months' supply of homes for sale at the current sales pace. Just divide the number of local homes sold during the last 30 days into the number of homes listed for sale. If the result is more than a six-month supply of homes, the oversupply of listed homes shows it's a buyer's market.

Fall is usually the second-best season to sell a home (spring is the best because that is when the largest number of prospective home buyers are in the market). This year (2006) however is proving to be different.

The number of homes listed for sale in most cities is at or near an all-time record high. The result is prospective buyers know they can negotiate hard over price and terms. (Simple laws of supply and demand apply here)

For example, a few days ago a Realtor told me about his $1 million house listing where a buyer offered $800,000. Normally, the seller would be insulted. Instead, his seller counteroffered at $950,000, a $50,000 price reduction. But, according to the Realtor, the buyer wants a bigger price reduction. (As an investor I love slow markets as I can much easier find great deals and I don't have to work as hard.)

STEP #1: If you seriously need to sell your property, and are not just "testing" to see what price you might get, the first step is to get your home into top notch, near-model-home condition. Most buyers don't want to buy a fixer-upper; they prefer to turn the key in the door and move in.

Cleaning, repairing and painting are the most profitable actions to take. Install new light fixtures and new carpets or flooring if needed. But don't waste money on major renovation, which you won't get to enjoy and buyer prospects might not like.

If you have lots of unneeded "junk" you don't want to move, September and October are ideal times to hold weekend garage sales. Better yet, call it an "estate sale."

STEP #2: Today's home-sale market is not a good time to be a do-it-yourself "for sale by owner" home seller. The reason is there is so much competition from serious home sellers whose listings are professionally marketed through the local MLS (multiple listing service). Most MLS agents also put their listings on the Internet where more than 70 percent of today's home buyers begin their searches, according to a recent survey by the National Association of Realtors.

Before selecting the best listing agent, smart sellers interview three or more successful agents who sell homes in their vicinity. Successful home sellers should understand they are hiring an individual listing agent, not the impersonal brokerage with the well-known name on the agent's door or the fancy franchise name with expensive image advertising.

Smart home sellers ask the agents interviewed lots of questions. Ten examples include (1) what are the names, addresses and phone numbers of your five most recent home sellers? (2) if I list my home with you, what price will you get for it in today's market? (3) what is your minimum listing term? (4) how long have you been selling homes in this area? (5) do you sell homes full time? (6) what professional courses and designations have you completed? (7) how many listings do you have now? (8) what is your written marketing plan for my home? (9) what sales commission do you suggest? and (10) do you recommend "staging" my home?

As part of their listing presentations, each of the three or more agents interviewed should anticipate these questions. The best agents will present you with a written CMA (comparative market analysis) form showing recent nearby comparable home sales prices to justify their estimate of your home's market value.

Sharp agents will suggest a 90-day listing. If the agent asks for a longer term, be sure it includes an unconditional cancellation clause after 90 days just in case you chose a bad agent.

As for the sales commission, although 5.1 percent is the national average according to Real Trends, in today's market it often pays to raise the commission to get buyer's agents to show and sell your home first. Low commissions to buyer's agents often result in no sales.

Although agents being interviewed will be reluctant to criticize your home, be sure to ask if the agent recommends "staging" the home to make it appear more attractive. Staging a home means bringing in a professional "stager" to make the home more marketable. Stagers often suggest removing old-fashioned furniture clutter during the sales period and renting more contemporary furnishings.

STEP #3: After selecting the best listing agent, but before exposing your home to the market, be sure to obtain all the customary local inspections, such as for termites, energy efficiency and building-code compliance. Your listing agent will know what's required.

Although not required, a professional home inspection avoids surprises later. I recommend hiring a member of the American Society of Home Inspectors (ASHI). The cost is around $300 and takes two to three hours.

Be sure to attend the inspection to discuss any defects discovered. Then you can decide if you want to repair them or merely disclose them to buyers and let the buyer make the repairs.

If the repair cost is minor, it's usually best to have repairs completed before listing the home, thus removing possible buyer objections. Local ASHI members can be found at www.ashi.com or 1-800-743-2744.

STEP #4 After getting your home ready to sell, hiring the best listing agent and having all professional inspections completed so you can disclose your home's defects, it's time to set a realistic asking price.

With the help of your listing agent, study those CMAs (Comparative Market Analysis) prepared by all the agents you interviewed. Consider whether the local market for homes in your price range is rising or falling. In most markets, prices have leveled off from what was attainable a year or two ago. If you really want your home to get sold quickly, don't get greedy.

Asking a few thousand dollars less than your closest competitor homes can mean your home sells while the others don't. Holding your home an extra month or two often costs far more than setting a realistic asking price.

Here's another asking price secret: set your asking price $1,000 below threshold amounts. For example, if your home is worth around $300,000, set the asking price at $299,000 rather than $300,000 or higher. The reason is buyers who tell their agents they will pay up to $300,000 will then see your home on their MLS computer search. But if you set the asking price at $300,000 or above, those buyers might not learn about your home.

STEP #5: Many home sellers are insulted if they receive a written purchase offer substantially below their asking price. Some sellers and their listing agents won't even make counteroffers.

That is a major negotiation mistake. Always make a counteroffer to keep communications open with that prospective buyer. Negotiations often take several weeks, back and forth, before determining either a sale will result or the parties are too far apart in price or terms. But unless the seller counteroffers every purchase offer, even a "low ball" offer, you will never know if a sale can result.

After both buyer and seller sign a firm purchase contract, the sale isn't over. This can be the most difficult time period. You and your listing agent must keep on top of deadlines, especially to be certain the buyer follows though on obtaining the mortgage appraisal and other essentials.

Sellers should be aware the buyer might be encountering the dread "buyer's remorse" disease. For this reason, it is essential for sellers and their listing agents to keep in touch with buyers and their buyer's agent to be certain the sale closes on schedule successfully.

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Properties For Sale Marketing Tips Inside

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By: Bruno C.

It's time to move. Your condo is on the market, and you selected a real estate agent you have confidence in. Potential buyers show up, but no offers. So what's next? To help aid in the selling of your home, I will reveal some tips that will have more people showing up at your door. The point is to get the home sold.

The front of your house is usually the first thing your buyer will see. You want your customer to feel as though they were driving in front of their own home. You want a good first impression. You want it to look neat and clean. Trim your lawn if necessary, weeds are killer, so get rid of them if necessary, give the bushes a quick trim, plant some flowers, and if you there's anything blocking your walkway, make sure it's clear.

A tidy apartment is important. These things may involve giving your carpets a good and much needed clean, mopping the floors, getting rid of some of the dust, and getting those windows clean if possible. Some clients are when picky when "inspecting" a house, and of course, they like to observe these things in great detail.

Try your best to keep your colors and styles looking neutral. The thinking here is not to "feed" your prospect your style. A consumer walks in your property, look at a red wall, and be immediately turned off. You want them to view and see your property as their own place. This is a decent solution.

Don't neglect high-quality lighting. Of course, your prospects want to see your place. Seems understandable, right? Unfortunately, as a real estate agent myself, this particular "lighting aspect" has been overlooked quite a bit. Check your bulbs, and just make sure they aren't dead. Even though I advise checking all lights, I would probably be more concerned with sections that require more pretend lighting. These include areas like the basement and bathrooms. It's a sound idea to have your windows visible as well. Masses of pure light is what your are most definitely looking for.

Repairing any damage. This incorporates things like perhaps, some new paint, repairing of any holes in the wall, and torn patio screens. Make potential buyers see your condo is in beneficial condition. This would be highly beneficial.

Remember that the ultimate goal is to have your condo or place feel inviting and have your potential buyer visualize it as their own. Good luck!

Bruno Cristini has been a real estate agent for a number of years. You can learn how to ( http://www.parkyourlicense.com ) keep your real estate license active from anywhere within Ontario by following that link. You can ( http://www.parkyourlicense.com/2007/06/request-more-information.html )request more information to learn more if you would like to.

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Simple Ways To Sell Your Properties

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By: Jamel Gibbs

Real estate prices are coming down in today’s market. Homes are sitting on the market a lot longer than they were in the past few years. Property owners are not getting the same response from the market that they were just 2 and 3 years ago. So if you are trying to sell in this market, how do you sell your property fast for a descent return on your investment? In this article I will give you a few tips on selling your property in today’s market.

The house: In today’s market the house must stand apart from the other houses in the neighborhood. You must literally have the best looking house in the neighborhood for the cheapest price. Make sure your place is very clean and well maintained. This is a buyers market and they will be pickier than ever before.

Advertise the property early: An important factor in selling your properties fast is to advertise the properties for a full week before the open house. This will stir up the hype and all the attention will be on your property. When the buyers call take their names, phones numbers, and email addresses and let them know that the open house will be during the date and time that you set. Let them know that there will be other buyers coming. This will create fear of loss. When a buyer sees competition they want to be the first to get the goods. It’s human nature.

Price: The house must be priced right if you want to sell it. This is true in any market. So how much more so will this be true in a buyer’s market? One technique that I would recommend is checking to see what other homes sold for in the area and how long they were on the market. Also, check to see what prices homes are on the market for and the time frame they have been on the market. Once you have this information, find the closest comparable houses to yours. After finding the closest comps (comparable houses), price your home 5 to 10 percent below what the other prices are. This will give you the best price in the neighborhood. Don’t be afraid because you priced the property so cheap. Most of the time buyers will over bid because cheap prices create bidding wars. If your property is nice, then it will sell in lightning speed.

Remember to advertise your property early, and make it look good. Last but not least, price the house right and it will sell fast.

Copyright © 2008 Jamel Gibbs
All Rights Reserved

Check out Jame Gibbs at http://www.HowtoFlipforProfits.com

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Tips To Sell Your House In Today's Market

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By: Richard Woodfork

We have talked to sellers who want to sell their house. All too often, they base their asking price on yesterday's market. Yesterday's market of escalating property values is over. You have heard the reports on television, in the newspapers, and on the Internet. We are in one of the worst markets in history. We have read a report that things haven't been this bad since the Great Depression. Keep in mind the first buyers want to buy your house at the best price from the start. So here is what you can do to make sure your house doesn't sit on the market for months:

Tip #1 - Be sensible about your asking price

Have at least three local real estate agents prepare a comparative marketing analysis. It will list the asking and selling price for home in your area. It will also list the size and amenities. If there is a small supply of similar houses, price your house for what others are asking. If there is a large supply, then you want to read the next stepSeek to generate greater interest in your house. Set your price 10% less than what others are selling for. If you do this, it raises your chances of receiving several offers on your property. If you must drop your price after it has been on the market for a while, make one large price cut instead of smaller cuts.

Selling your house on your own is a tremendous undertaking. It becomes even more challenging when the real estate market is more favorable to buyers like now. You must have the experience and the patience to weather the storm. Therefore, if you feel that you are unable to sell your house yourself, adhere to this next tip:

Tip #2 - Seek an experienced real estate agent

Selling today during this economic climate will require a great deal of marketing effort. Seek an experienced real estate agent to help you. You do not want to deal with an unseasoned agent. You want one who has been through downturns and understands what is required to close the deal. All too often, an agent will list your property without having your interests in mind.The first impression is important, especially when it comes to selling your house. You house must have curb appeal to lure potential buyers. Make sure you take the time to clean, paint, and landscape. You only have ONE chance to make a first impression. Adhere to this tip to make a difference when your prospects enter the house:

Tip #3 - Stage your house for a good first impression

In this housing market, you must use all of the tools at your disposal. Hire a stager. Staging services have become popular with the rise in the number of house-selling shows on cable television. A stager will help to organize your house to make it more attractive. They will move your house away from the "lived in" look. They will get rid of the clutter, rearrange your furniture, and give definition to each room of the house. They will also provide you with alluring paint options. Stagers may charge a little as $200 for a consultation. A full blown staging plan may cost $1,000, but it is well worth it to help you receive peace of mind.

As was stated in the previous tip, you must use everything at your disposal to get your property sold.

Tip #4 - Money talks

Throw a little at prospects to catch their attention. Don't waste your time giving away cars or trips. You may look desperate. Offer to pay a portion or all of the buyer's closing costs. Or offer real estate agents and people who may refer prospects to you $1,000 if they send someone to you who eventually buys the property. Remember, there is probably a great deal of competition in the form of listings. Give people an incentive to buy your house or refer someone who will.

We have talked to many sellers over the past few months. The majority of them are "upside down". Being upside down means the person owes more on the house than what it's worth. So what do you do?

Tip #5 - How to handle being "upside down"

If you are upside down, you have options. They may not help you sell you receive money when you sell, but they will help you to receive peace of mind: Sell the house on terms - You may sell your house via some form of installment sale (subject to the existing loan, land contract, or wrap around mortgage). You may also sell your house via a rent to own contract. Each method has their advantages and disadvantages. Ask the lender to allow a "short sale" - A short sale is a sale that results in the lender receiving less than what is owed on the mortgage. Short sales have grown in popularity but keep in mind that they are difficult to do. You need an experienced person to talk to the lender. Also, nine times out of ten the lender will NOT allow the seller to receive money at the closing table. Just think, why would the lender want to allow you to receive money when they are discounting the loan. Rent the house and weather the storm - You may decide to move out and move a tenant in. Charge the tenant a rent rate that is close to the monthly payment of your mortgage. If you have to lower the rent and pay a little yourself, it is well worth it.

There you have it. The five tips to help you sell your property. We hope you enjoyed them. Better yet, implement these tips as soon as possible so that you can get that property sold.

http://www.cashnowforyourhome.com is a network of private real estate investors. We buy property in any area and in any condition. We are able to close deals that may be hard to close or not attractive to close by most investors.

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How To Work With Realtors

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By: Peter Vekselman

Working with real estate agents can be a challenge if the agent you’ve selected isn’t aware of your needs in acquiring property. They’re accustomed to selling at retail and any deviation from what they consider normal can jeopardize what could otherwise be a great working relationship. The good news is that you have the power to provide the education – if you’re willing to take the time. Here’s how you can do your part.

If you’re trying to work with a real estate agent that has never seen – much less worked with – a real estate investor, the first thing you need to do is have a sit-down meeting to explain your goals, your investing strategy, and your needs.

But don’t forget that your real estate agent also has needs.

The good news is that today’s market conditions make this a good time to forge what could be a mutually satisfying long-term relationship. Unless you’ve been living under a rock you’re pretty well aware that retail buyers have disappeared. Because of this – and low prices – real estate investors are on a buying spree. You can work together and turn incredible profits with the help of a real estate agent that “gets it”.

You may be an investor that typically avoids real estate agents whenever possible because you don’t want to deal with real estate commissions. That’s fine and dandy, but in some locations you may not have a choice.

More and more states are enacting rules designed to protect consumers from those who would take advantage of them. As a result, states like Oregon have passed laws requiring that real estate agents be involved in any deal that causes homeowner equity to be transferred to another party. Other states such as California could follow suit.

Instead of arguing the merits of the rules, accept them and move on. You can also use a real estate agent effectively as a negotiation tool when working short sales. If you’re new to short sales or are working with a lender with whom you’ve never worked before, you may not be aware of the specific steps involved. In addition, some lender loss mitigation departments have their own rules, policies, and procedures. If you violate protocol your offer will be delayed – or rejected.

A real estate agent is a known commodity to the friendly banker. Banks work closely with real estate agents on traditional purchases, so there’s an institutional bias that favors the real estate agent.

The bank is more likely to consider an offer that makes sense if it’s presented by someone who speaks their language. Here’s another thought to consider: If a good real estate agent can help grease the wheels and get your offer in front of a lender, you can get an answer more quickly, and potentially close more deals.

There can also be other perks to working with a real estate agent: research. Once you establish a solid working relationship, a real estate agent will be willing to share information with you that would take much longer for you to do yourself. Comps and other MLS data is available through a real estate agent; however, you don’t want to abuse the relationship.

Solid relationships with a real estate agent will open doors for you that may have been securely closed in the past. It makes sense to build relationships that will further your goals, enhance your career, and add real value to your bottom line. A real estate agent can help you as much as you can help them with repeat business and providing the means to keep earning money despite the fact that the retail residential real estate market has almost completely dried up.

Peter Vekselman has been successfully investing in real estate since 1996. He has completed over 1000 real estate deals, owned a construction company, been a private lender, and owned a property management company. Peter currently works with clients all over the US http://www.CoachingByPeter.com .

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