April 24, 2018

It May Be A Problem Tomorrow

A report from National Mortgage Professional. “A combination of low inventory and a greater interest in homeownership is fueling a wave of residential property bidding wars among buyers across the country. According to Realtor.com, the capital of the ongoing housing bidding wars is Akron, Ohio. With a relatively modest median home list price of $150,000, Akron has seen a 20.6 percent share homes selling above their list price. In a year-over-year measurement, however, the city has experienced an astonishing 91.7 percent increase in the share of homes selling above their original list price.”

“Other cities recording larger-than-normal year-over-year spikes in above-list price sales are Worcester, Mass. (88.1 percent), Lexington, Ky. (86.4 percent), Irvine, Calif. (85.5 percent) and Greensboro, N.C. (81 percent). ‘Multiple-offer scenarios are no longer reserved to the usual big, fast-moving markets,’ says Javier Vivas, Director of Economic Research for Realtor.com. ‘Demand for homes has spilled outward into secondary, smaller markets, and more buyers are gearing up to face fierce competition in more places around the country.’”

From Valley News. “Real estate agent Carol Robert has a new way to sell homes to out-of-town house hunters. Via FaceTime. The Lebanon real estate broker walks around the house using the FaceTime app on her iPhone to give clients a live video tour while she narrates the home’s features. ‘They don’t have time to wait until the weekend to get here,’ Robert said. ‘They have 24 hours before the seller gets two to three offers. It’s a stampede getting into a house. I’ve never seen this.’”

The Capital Times in Wisconsin. “Pat Whyte has been selling homes in Madison for 35 years, and last year’s seller’s market was unprecedented for her. Homes sometimes received up to 20 offers, and unsuccessful offers at $25,000 above asking price were not uncommon. ‘It’s a crazy market,’ she said last May. ‘(Houses are) flying off the market faster than I’ve ever seen.’”

“Last year, Madison realtors described the frantic real estate market, and when the Cap Times checked back in with them last week, many said it’s shaping up to be just as hot, if not hotter. At this point, offering the listed price is not really an option for buyers. ‘We have a little joke in our office that the asking price has become the suggested retail price — (it’s) not exactly the price you’re going to pay,’ said Liz Lauer, a real estate broker with 20 years of experience in Madison. Lauer said it’s the strongest seller’s market she’s ever seen, including the pre-recession housing boom. ‘In 2004, 2005, I never had 18 offers on one house,’ she said.”

“Most realtors prefer a more balanced market, said Matt Winzenried, a local broker associate who’s been working in the Madison area for 12 years. As it is now, ‘buyers go to a open house on Sunday, have 20 minutes to see the house and (then) make a decision to spend $300,000.’”

From Real Daily. “According to CoreLogic, one in five home borrowers use more than 45% of their monthly income to pay off a mortgage. These levels of mortgage debt haven’t been seen by financial experts since the housing crisis of the mid-2000s.Government-backed lenders Fannie Mae and Freddie Mac sold over 73% of loan packages in the back half of 2017, and more than in the first six months. In terms of mortgage lending, Fannie Mae and Freddie Mac saw a 15% rise in new mortgages throughout 2017.”

“Lending to applicants with extremely high debt-to-income ratios was a factor in the increase. Fannie Mae and Freddie Mac are increasingly approving loans for applicants with debt-to-income ratios of up to 50%. The lending corporations also have been guaranteeing with loans with low down payments. Applicants can pay down as little as 3% for mortgage loans down payments with the lending corporations.”

“Stan Middleman, chief executive of Freedom Mortgage, a home lender, says the current mortgage loan crisis isn’t critical yet. ‘It’s not a problem today, but it may be a problem tomorrow,’ said Middleman.”

From the New Haven Independent in Connecticut. “Two lenders quietly became the owners of two properties on the same residential block in Morris Cove during separate, simultaneous foreclosure auctions. One lender, the federal U.S. Bank National Association, purchased a home that has been vacant and left largely untouched since the owner-occupant died nearly seven ago. The other lender, the Idaho Housing and Finance Association (IHFA), purchased a home that is still occupied by a married couple who have been living on Morris Avenue for just over a year, and who said they love their home and hope to stay.”

“No bidders showed up to either public auction, so the banks that own the delinquent mortgages on the respective properties submitted uncontested, successful bids for the two homes.”

“Meta M. Delillo, the owner of a single-story ranch home at 69 Morris Ave., died on Nov. 23, 2011. She had lived in the home since 1992. After her death, her $337,500 mortgage from Financial Freedom Senior Funding was assigned to MERS, then to the federal department of Housing and Urban Development (HUD), and then to the U.S. Bank National Association in May 2017.”

“Before the auction, an independent appraiser valued the home at $135,000. According to a lawsuit filed by the U.S. Bank National Association against the heirs, beneficiaries, and/or devisees of the estate of Meta Delillo in New Haven Superior Court on Elm Street on Aug. 22, 2017, Delillo owed over $316,000 plus interest on her mortgage.”

The News-Journal in Florida. “Daytona Beach Mayor Derrick Henry filed for bankruptcy in 2017 two days before a home he owned in the Derbyshire neighborhood was to be auctioned on the courthouse steps as part of a foreclosure sale. Henry’s Chapter 13 bankruptcy filing on Aug. 9 in federal court in Orlando stopped the foreclosure case, and with it the Aug. 11 sale of the house at 1034 Thunderbird Drive, a non-homesteaded property in the neighborhood where Henry grew up. Henry now lives on Birkdale Drive in Daytona Beach.”

“In a phone call, Henry told The News-Journal that the bankruptcy was dismissed and he declined further comment. Specialized Loan Servicing had filed to foreclose on the Thunderbird Drive home on Jan. 26, 2016, claiming that Henry had not paid a $455.66 monthly payment since Feb. 1, 2012. The loan servicer said Henry owed $66,251.93 plus interest and other expenses.”

“A document filed Aug. 9, 2017 in the foreclosure case in circuit court stated that Henry had filed for relief under the bankruptcy code and the foreclosure was ’stayed.’ The issue was subsequently worked out with Henry keeping the house. Specialized Loan Servicing asked the court on Feb. 23, 2018, to dismiss the foreclosure action, saying that the payment dispute was resolved and Henry successfully completed a loan modification. Circuit Judge Chris France dismissed it on March 7, 2018.”

“It is the second time a lender has filed for foreclosure on the Thunderbird Drive home against the mayor. SunTrust Mortgage filed for foreclosure on March 27, 2013. That foreclosure was filed a few months after Henry and his wife obtained a 30-year, $256,400 loan from Wells Fargo Bank for the home on Birkdale Drive, records show.”

“SunTrust’s complaint said Henry owed $66,498.88 on the principal plus interest and late charges on the $76,000 originally borrowed for the Thunderbird Drive home. the complaint added that Henry had not paid the $455.66 monthly payment since Jan. 1, 2012. SunTrust Mortgage voluntary dismissed the foreclosure action on Dec. 23, 2013, due to ‘loss mitigation,’ according to court records.”

The Post-Journal in New York. “Jamestown officials understand the importance of trying to eliminate zombie houses in city neighborhoods. Zombie houses, which are houses that are vacant and abandoned that are not maintained during a prolonged foreclosure proceeding, can cause decreases in assessed value for neighboring properties. Along with decreasing property values, zombie houses also lead to serious crimes like arson.”

“In October 2016, city officials were approved for the Zombie Remediation and Prevention Initiative program and received $149,970 in funding. City officials have been able to hire a part-time attorney to represent the city in housing court. ‘We’ve been able to contact banks and tell them there are code violations and safety violations that need to be addressed,’ said Vince DeJoy, city development director. ‘We can also subpoena banks and fine them and pursue them vigorously. We have been somewhat successful. It is a house-by-house process. We’ve had some success in some cases, but it can be overwhelming because there are so many houses going through the foreclosure process.’”