From HW:
Bank of America completed more short sales than it unloaded previously foreclosed homes every month for the last year and a half.
In May, BofA completed roughly 9,000 short sales compared to 7,000 REO, said David Sunlin, the bank’s real estate management executive. With the introduction of the Home Affordable Foreclosure Alternatives program in April 2010, lenders received the first guidelines for these transactions.
Since then, banks find it easier to collect necessary documentation and reduce the time it takes to close these transactions. Recent guideline changes to HAFA could push numbers higher in 2011.
BofA completed more than 95,000 short sales in 2010, more than double the prior year, Sunlin said.
“HAFA is dead on. It’s a lot easier to qualify now for HAFA than it was in 2010. All I need is a hardship affidavit and one water bill. We’re trying to make it as easy as possible,” Sunlin said.
Justin Rand, Citigroup senior vice president of loss mitigation, said his bank used to take an average 120 days from when the property was listed to when it closed. That since dropped to 83 days.
There remain some setbacks, however. Real estate agents in the audience at HousingWire’s REO Expo in Fort Worth, Texas, complained of having an offer from a buyer at what the property listed at, only to lose the deal when the bank’s appraisal came in afterward. Sunlin suggested these buyer-side agents send in their own information with the servicer for a better chance of reconciling the appraisal.
“Valuation is an inexact science. The offer may be a full to list, but not to the appraisal. When you submit your own short sale deal, send your own BPO,” Sunlin said.”If you put your facts out there, you can at least make your case.”
Other agents said those working on the other side of the deal do not send in offers or document packages correctly, regardless of any certification. Both Sunlin at BofA and Rand at Citi said their banks are considering recommending agents to the homeowner.
“We would love to get into a system where we’re recommending agents for a short sale,” Sunlin said. “But (the) homeowner has their rights, they’re going to select who they want to select, and that’s going to be the biggest constriction.”
As lenders continue to tweak imperfections, demand will rise.
Chris Saitta, CEO of Equator, which provides a technology platform to process short sales for the largest lenders, said servicers completed short sales on 4% of their portfolios to 16% today.
“There is a steady but slow increase in REO, which equals a steady, slow increase in short sale,” Saitta said.
When interest rates rise, housing prices will be absolutely crushed. Why would anyone buy now? Low interest rate environment is the *worst* time to purchase a home.
“But (the) homeowner has their rights, they’re going to select who they want to select, and that’s going to be the biggest constriction.”
Are you kidding me? Defaulting Homeowners have rights??? How about you have the right to get foreclosed in 90 days and have the sherriff throw your stuff in the street if you don’t pay your mtg or hire our approved agent for a short sale.
This whole system is upside down and backwards….
Jack,
I’m getting emails from readers who are tired of your boring old rants – can you mix it up a little? Take me off the auto-stalker and put some creativity into it!
P.S. How long have you been stalking me now, about a year? Did I steal your girlfriend in high school or something?
The post-foreclosure unlawful detainer action does have rules the courts and the sheriff must follow. The sheriff will not throw stuff out of the house. In fact, the least they can do, the better. If a lock out occurs, they are there to keep the peace,guard the locksmith and tell the former owner to leave. Only if the former owner returns will they get arrested. The foreclosing entity also must give 21 days for former owner to retrieve any belongings left behind. It is all in the code.
In Vegas – we are seeing short sales starting to go through much much faster . With that being said – We estimate that we are only 20% through the REO inventory since this thing started in 2006 here. I am telling people not to buy homes at even 1980-1990 pricing(which we have in many areas). Some of my friends have been hounding me to show them homes in great areas and I refuse. I tell them to wait 1 year at least.
Now as far as southern California is concerned.
You may have been better off buying in 2005 than right now. Because at least you would have had hardly any money invested in the loan. Really a low risk gamble back then. Today that is not the case. Its russian roulette.
Stalking? Must be a different Jack. I’m a recent reader of your site, been lurking the past month, and this was my first post.
I think the site is informative. But I also believe it’s a terrible time to purchase. We are in bubbleland until housing prices return to 2.75 times average annual income, hence we have much further to fall. Our ghost of Christmas future is Florida, Nevada, and Michigan.
I put up with the doomers for five years – go back through the posts and you’ll see.
Around North SD County Coastal we’re around 7x the average SD annual income and houses are flying off the shelves.
2009 average SD income was $60,103 x 2.75 = $165,000.
Average NSDCC detached sales price in 2011 = $1,160,698
NSDCC = 7.02 x SD avg income.
People with ample funds, kids growing older, and few tax write-offs are tired of waiting for 2.75.
You have every right to your opinion, just take it over to the doomer sites. Here we are examining the reality on the street.
Jack, we relocated and just bought in a top rated school area of LA. Did I think it was the best time to buy? No I didn’t. Did it make sense for MY family to buy? Yes it did.
We did rent for a few months. There aren’t too many large homes to rent and our rent was around $7K per month. Just as well we did buy, because the landlord decided to sell and we would have had to move one more time. Moving gets old very quickly (even more with kids) and it is difficult to find the perfect rental when you need to stay in a certain area for the schools.
We didn’t buy an investment. We bought a home.
I agree with “New to LA”. I relocated too–last November. My PITI is 40% less than my rent and I grabbed a 4% 30-year fixed mortgage with a 20% DP. No thought of buying an investment. I had rented for 8 1/2 years. All I wanted was a home that I loved. I got it! What’s not to love…
I hope the home purchases work out for you. I don’t want to see families hurt by rapidly depreciating values. I blame Greenspan, Bernake, Wall Street banks, and most of the now-bankrupt morgtage companies for blowing the enormous housing bubble, and the resulting crash, which has hurt many.
A major drop in prices is coming. They have to drop, because once rates rise, people won’t be able to afford $600k+ homes in an 8% rate environment. And aren’t lower prices a good thing? It means a family is spending much less on housing, and has ample spare income to afford their 529 plans as well as their retirements. It’s criminal a family needs to put 50% of their income to fund a home because of bogus asset-blowing by the banks and the Fed.
Me, I’m waiting. I’ll wait another five years for rates to rise if I have to — and rise they will. In the meantime I’m saving money hand-over-fist and buying income-producing assets. When interest rates are higher, and housing prices are much lower, I’m paying all cash for a home (and I could easily afford to do it now). Paying interest to a bank for 15 or 30 years? Oh hell no. Instead I’m earning yield on my money, not paying it to vampire bankers.
Check back in five years and we’ll see.
Jack – I’m usually a bit of a bear, but seeing as how I put in an offer on a house in encinitas, I have to agree with Jim. I’ve been waiting to buy a house for five years now and based in the depth of wealth I have seen in California (lived in Mountain View CA and now Del Mar CA) I’m pretty sure we will never see single family homes in nice areas selling for 2.75 X average income. People are so loaded here. The wealth runs generations back and the trust fund babies keep coming to CA. It sucks. But, sadly, I fear it’s true.
Interesting point.
Del mar Renter and Jack both have points. Dmr is right about the desirable areas — there’s plenty of money out there to keep valuations up in those areas. Jack’s got a valid point, too, but fails to take into account the changes in standards over time. There are current listings in Vista for 3/2s under 1500 sq. ft. that are getting close to his price point. Those would have been “average” houses 40 or 50 years ago. Most readers of this blog probably wouldn’t want to live there, though.
I agree with jack and jtr! When interest rates rise house prices will drop in the short term due to the increase in mortgage payments. What jack forgets however is the reason interest rates will rise is the inflation coming due to the massive amounts of $US put into circulation by the American government due to qe1 and qe2. Priced in “beer tokens” house prices will NOT rise, priced in $US price rises are inevitable in hard assets such as residential property check back in 5 years and see ;D
And it is all relative! When I look at what I could get in JtR’s area of coverage versus what we got in LA … you guys get more for your money.