Are There Over Seven Million Foreclosures Coming?

There have been some extraordinary numbers being bantered about when talking about the number of foreclosures that will be coming to market over the next 18 months. Different studies have estimated that number to be between 5-8 million. Let’s take a look at one of these studies today and see how these totals are being […]

No Miracles in Modification Program

The Home Affordable Modification Program (HAMP) is the administration’s hope for troubled homeowners trying to avoid foreclosure by modifying their current mortgage payments. The original release said the program was: …aimed at helping 3 to 4 million at-risk homeowners – both those who are in default and those who are at imminent risk of default […]

The Truth about Foreclosure “Facts”

The goal of this blog is to create clarity from the confusion in today’s real estate market. We try to take complicated issues and break them down into simpler pieces, and then try to explain how the pieces fit together. There is no situation more difficult to dissect than the current foreclosure numbers. Yet, understanding this […]

Shadow Inventory about to See the Light

As I mentioned in a post earlier this month,  5 Keys to a Real Estate Recovery: I believe both the increase of distressed properties and the timing of their release to the market will be the biggest real estate story of 2010 … Anytime the supply of an item increases and demand remains flat, pricing […]

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A Foreclosure’s Impact on Neighboring Home Values

Yesterday, we covered the coming surge of distressed properties that will enter the market in 2010. Today, we will discuss the impact these properties will have on housing values as we proceed throughout the year.  Questions you should be asking yourself are: 1) Do distressed properties sales impact the value of the surrounding homes, 2) […]

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Foreclosures: Their Impact on Real Estate 2010

I firmly believe the foreclosure situation will be the main story line in real estate for the rest of 2010. There will be other key factors (unemployment, government involvement, interest rates, etc.). However, no issue will have the same impact as the tidal wave of distressed properties about to come to market. For purposes of […]

The Fed’s Report Card in Real Estate

“Alas, all the Fed’s purchases and all the government’s men can’t put the residential real estate market together again.” – from a column by Caroline Baum in Business Week In yesterday’s blog, I covered the reasons the administration’s new modification program could make sense. Today, I want to look at the other side of the […]

New Modifications: Nonsense or Does It Make Sense?

Last week ended with a somewhat surprising announcement that the administration has decided to offer an addition to their modification program called Making Home Affordable Program Enhancements to Offer More Help for Homeowners. The new enhancements look to give relief to people who are unemployed and those approaching 20% negative equity in their homes. Why […]

Foreclosures Easing Up? Not Exactly

There has been much conversation about how distressed properties will impact home prices as we move into the second half of 2010. And it appears that no matter how much data is available, there still remains a feeling that the situation is improving. People look at the foreclosure filings and say things are in fact […]

Can Option ARMs Bear the Weight of Interest Rates?

In a previous post, we talked about our concerns regarding the number of families in 2010 that were going to have their Option ARM mortgages resetting or recasting. The term ‘reset’ deals with the change of interest rate. The term ‘recast’ deals with the actual change in the mortgage amount. In either case their mortgage payment could be affected. […]

Puzzled Banks Now Buying Time

Often I get asked why banks are not foreclosing on borrowers even after they do not make mortgage payments for many months. Actually, the answer is quite logical. To fully appreciate the banks position we must understand that the current housing market is like a Rubik’s cube. Every action the bank takes creates a challenge […]

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I’m Fine, It’s My House That’s Drowning.

First American Core Logic just released their Fourth Quarter 2009 Negative Equity Data Report last week. Negative equity, often referred to as “underwater” or “upside down,” means that borrowers owe more on their mortgage than their homes are worth. The reason this report is so important is that studies have shown that there is a direct […]

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Foreclosure and Delinquency Rates by State

There has been much talk recently about the number of foreclosures currently held by the banks and when they may be released to the market. The number has been estimated at approximately 1.7 million properties. I believe that the banks will be forced to bring them to market in the near future. Why will banks […]

Today’s Real Estate Headlines – True or False?

Almost every day, as I do my research, I come across a headline that grabs my attention. Many times it leads me to believe that there is a contrarian view to one that I currently hold on an issue in real estate. I immediately read the article only to find out that the headline and […]

Shadow Inventory: It’s Impact in 2010

We have often talked about a ‘shadow inventory’ of homes about to come to market. The two big questions are: What does this ‘shadow inventory’ actually consist of? How will it impact home values in 2010? Standard and Poors has just come out with a paper which sheds some light on these questions. Let’s look at the report. […]

Crazy Foreclosure Alternatives?

Homeowners can’t pay their mortgages and are being forced from their homes. Others can pay but decide to just ‘walk away’ instead. Both scenarios have created a flood of foreclosures that neither the government nor the banking industry can handle. The modification programs, though genuine in their effort, have failed. The banks can’t handle what […]

The Domino Effect of Delinquencies

Yesterday, I posted a blog on foreclosures. In that post I said: We still have a very serious foreclosure problem in the vast majority of neighborhoods in this country. It will become even a bigger challenge as 2010 moves forward. Some of our readers contacted me and asked why I felt so strongly on this […]

Another Foreclosure Headline Debunked

It amazes me how many times media will report on a press release and assume they know what the release is saying by just reading the headline and perhaps the first paragraph. This week was no exception. Several newspapers repeated a headline on Realty Trac‘s press release claiming U.S. Foreclosure Activity Decreases 10% in January And many papers repeated the first […]

Upper End Foreclosures Stacking Up

Last month I posted Are Foreclosures Coming to the Luxury Market? Well apparently they are. In an article from Housing Wire, Fitch Ratings reported on jumbo mortgages (where the initial principal amount is above the $417,000 conventional loan limit set by Fannie Mae and Freddie Mac. In higher-priced markets the limit is $729,750): The new […]

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Challenges and Opportunities in Housing

A quote from Housing in America: The Next Decade. “Sooner or later, something fundamental in your business world will change… strategic inflection points do not always lead to disaster. When the way business is being conducted changes, it creates opportunities for players who are adept at operating in the new way. This can apply to newcomers […]

The Cost of Walking Away

There is a very interesting cultural change taking place throughout the country. And it is the direct result of the current challenges in the housing sector. It seems that there is a wave of support for the concept of walking away from your financial obligations in regard to your mortgage. The stigma attached to those […]

Walking Away from Negative Equity

Today let’s look at negative equity and attempt to determine what impact it will have on a housing recovery in 2010. Negative equity, often referred to as “underwater” or “upside down,” means that borrowers owe more on their mortgage than their homes are worth. Negative equity can occur because of a decline in value, an […]

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Delinquencies: Roadblock to a Housing Recovery?

The current economy has devastated the finances of so many families in every income bracket and in almost every neighborhood in this country. More and more people are falling further and further behind in their mortgage payments. In the past people would take a second job or borrow money from family to catch up. Today, […]

The Long “Option ARMs” of the Loan

When the housing market was going strong between 2004 and 2006, many buyers were purchasing houses they were not able to afford with conventional financing. That created a need for less conventional mortgage products known as option ARMs (adjustable rate mortgages). These mortgages allowed a buyer to either pay less of an interest rate during the […]

The Impact of Foreclosures on Real Estate in 2010

Going into 2010 things were looking rather ‘bullish’ for the housing industry. Sales were up and prices seemed to be stabilizing.  But in the last few weeks we are starting to see how fragile the recovery actually is. Obviously, when the government ends its support after the first quarter (no longer holding down interest rates […]