Friday, 20 April 2012
This week’s blog courtesy of CNN MONEY
The settlement, agreed to by the nation's five largest mortgage lenders, is expected to speed up the foreclosure process by providing stricter guidelines for the banks to follow when repossessing homes.
Many foreclosures have been in limbo since fall 2010 following the so-called robo-signing scandal, when banks allowed employees to sign off on thousands of foreclosure documents a month with little verification.
Lenders hit the pause button on foreclosures because they "were afraid that anything they did would be under a microscope," said Eric Higgins, a professor of business at
As a result, borrowers who were seriously delinquent on their loans have been able to stay in their homes for months or even years without making a single payment. Nationwide, the average time it takes to foreclose on a home -- from the first missed payment to the final bank repossession -- stretched to 370 days during the first quarter, almost twice as long as it took five years ago, according to Daren Blomquist, the marketing director at RealtyTrac.
In some states, delinquent borrowers have been squatting in their homes much longer. In
"Perhaps a million foreclosures could have been pursued last year but weren't," said Rick Sharga, executive vice president for real estate investment company, Carrington Holdings.
But that's all about to change, he said. "We're going to see an increase in the speed of foreclosures and a higher number of foreclosure starts."
In fact, there are indications that the pace of foreclosures are already starting to pick up.
While overall foreclosure activity was down during the first quarter, filings were up 10% in the 26 states where foreclosures must undergo court scrutiny, according to RealtyTrac.
It was in these judicial states that the processing of foreclosures slowed the most following news of the robo-signing scandal, said Blomquist.
Many banks in these states stopped filing foreclosures unless they were extremely confident it would pass muster in the court. (In non-judicial states, foreclosures are reviewed by a trustee, which is a third party such as a title company and less likely to parse every legal document).
But now lenders can move more confidently, said Brandon Moore, RealtyTrac's CEO.
In the judicial state of
"The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen -- both in terms of new foreclosure activity and new short sale activity,"
The resulting flood could bring home prices down even further -- yet another impetus for the banks to clear out their foreclosure pipeline as quickly as possible, said
Then, industry thinking is, the housing market would be able to get back to normal and home prices could eventually find their true value. Some industry analysts, such as the chief economist for listing site Zillow, Stan Humphries, are predicting that could happen as soon as the end of the year.
Zillow estimates that home values nationwide will fall another 3.7% by the end of 2012, and that price will likely bottom out by early 2013.
Should home prices hit a bottom then stabilize, it would push many potential buyers off the fence, according to Mike Fratantoni, a vice president at the Mortgage Bankers Association. House hunters would no longer be afraid of investing in assets that were losing money.
"The market is already on the verge of turning the corner on prices and this will help," said Fratantoni.
Tuesday, 10 April 2012
Thank you all for the flowers, baskets, cards and donations. Our family is deeply grateful for all the love, prayers and support we have received because of my Dad’s passing. If you are going to die, our family had the perfect scenario to have a chance to say and share everything with no regrets. My Dad had a good life and I know he was genuinely happy to have touched all of you in some way.
From my Mom, Susan, Ryan, Evan and I we are very grateful to have shared this time with all of you!