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Las Vegas Real Estate Facts for February 2010 - Short Sales are 48% of Available Listings

Here are some February 2010 Fast Facts for the Las Vegas Real Estate Market courtesy of Larry Murphy of Salestaq.

Homes Sales in Las Vegas Feb 2010

In February, only 46% of the existing homes sold were REO/Bank-Owned properties. Less than a year ago, two out of three homes (66%) sold in the Las Vegas market were REOs.

There were 40% fewer foreclosures this February than there were last February.  In fact, the 1,359 foreclosures for the month of February were the lowest since November, 2007.

Short sales will be the 'new' element in the existing home sales picture in 2010.  In fact, nearly half (48%) of the 10,298 available listings on the market are short sales.


Available listings in LAs Vegas Feb 2010

Some positives for the Las Vegas Real Estate Market:

  • MLS inventory represents just 2.8 months of supply.  That indicates the sales end of the market remains relatively strong.
  • Existing home sales slid slightly to 3,229 ... just a hair under January.  But, it's a strong performance.
  • The new home market is beginning to stir for the first time in two years.  Yes, the 342 sales were meager, but new home permits are well ahead of last year's disastrous totals.  The number of new home communities increased to 232.  And the price per square foot of a new home ($101.63) rose pennies from January to February, while the price per square foot of an existing home ($70.46) dropped.

 


 






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Las Vegas Real Estate Market Report: 03/24/10

This is the latest Las Vegas Real Estate Market Report from www.NARREIA.com (National Association of Residential Real Estate Investment Advisors). For the week of March 24, 2010, data is obtained from the Greater Las Vegas Association of Realtors MLS.

Single Family Residence (SFR)

Available 7,920 (-207 , Last Week 8,127)
Under Contract 12,367 (+258 , Last Week 12,109)
Days of Supply 19 (-1 , Last Week 20)
Short Sales 12,104 (+101 , Last Week 12,003)

Condominiums and Town Homes (CONDO/TH)
Available 1,884 (+20 , Last Week 1,864)
Under Contract 2,929 (+28 , Last Week 2,901)
Days of Supply 19 (+0 , Last Week 19)
Short Sales 3,113 (+53 , Last Week 3,060)

Combined SFR + CONDO/TH

Available 9,804 (-187 , Last Week 9,991)
Under Contract 15,296 (+286 , Last Week 15,010)
Days of Supply 19 (-1 , Last Week 20)
Short Sales 15,217 (+154 , Last Week 15,063)


 






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Government is making changes to the HAMP program for struggling home owners

Hamp Changes

The following is the text of details provided by the Obama administration Friday of its plans to enhance the Home Affordable Modification Program in order to provide more help to homeowners:

1. Temporary Assistance for Unemployed Homeowners While They Search for Re-Employment

- Mortgage payments reduced to an affordable level for a minimum of 3 months, and up to six months for some borrowers, while eligible homeowner looks for new job.

* Payment set at 31 percent of monthly income or less while homeowner is unemployed via forbearance plan.

* Temporary assistance plan offered for a minimum of 3 months, and up to six months for some borrowers, subject to investor and regulator guidelines, ending when borrower becomes re-employed or scheduled assistance period expires. Borrowers who become re-employed during the scheduled assistance period and whose mortgage payment is greater than 31 percent of their new gross monthly income must be considered for HAMP.

- Servicers participating in the Making Home Affordable Program are required to offer assistance to all unemployed borrowers who meet eligibility criteria:

* Homeowners mortgage meets HAMP eligibility requirements, including 1) house is owner-occupied 2) loan balance is below $729,750 and 3) loan was originated before January 1, 2009.

* Borrower submits evidence that they are receiving unemployment insurance (UI) benefits.

* Borrower requests temporary assistance in the first 90 days of delinquency.

- At the end of the temporary assistance period, homeowners who have a mortgage payment greater than 31 percent of their monthly income must be considered for a permanent HAMP modification.

* To receive the permanent HAMP modification, homeowners must be current on assistance plan payments, must verify qualifying income with standard documentation, and must meet all other HAMP underwriting requirements including the net present value (NPV) evaluation.

* Unemployment insurance will not be counted as income when homeowner is evaluated for HAMP.

* If the scheduled assistance period ends without re-employment, the homeowner may be considered for HAMP alternatives to foreclosure including short sales and deed-in-lieu of foreclosure.

- No cost to government or taxpayers from the forbearance plans.

2. Requirement to Consider Alternative Principal Write-down Approach and Increased Principal Write-down Incentives

- Requirement for all servicers to consider an alternative modification approach including more principal write down for HAMP-eligible borrowers that owe more than 115 percent of the current value of their home.

* Servicers will be required to run the standard NPV and an alternative NPV that includes incentives for principal write-down and compare the results.

* If NPV is higher under alternative approach, servicer will have option to use it.

- Alternative principal reduction allows some underwater homeowners to reduce principal balance of their mortgage in steps over three years, if they remain current on payments.

* Under alternative approach, servicers assess the NPV of a modification that starts by forbearing principal balance as needed over 115 percent loan-to-value (LTV) to bring borrower payments to 31 percent of income; if a 31 percent monthly payment is not reached by forbearing principal to 115 percent LTV, the servicer will then use standard steps of lowering rate, extending term, and forbearing additional principal.

* Servicers will initially treat the write-down amount as forbearance and will forgive the forborne amount in three equal steps over three years, as long as the homeowner remains current on payments. o Additional guidance will address the treatment of second liens where applicable, which must also agree to first extinguish principal in conjunction with any principal reduction on the first lien.

- For borrowers who have already received a permanent modification, or who are in a trial modification, and are still current on payments at the time the alternative modification approach is operational (later in 2010), servicers will be required to retroactively consider extinguishing an amount of principal balance in the same amount that would have been forgiven under the new alternative approach.

* To further encourage principal write-downs, Treasury is also increasing the incentives that it provides for loans extinguished or partially extinguished in conjunction with the HAMP Second Lien Program.

* The following schedule will be available to lenders in exchange for all principal write-downs under HAMP at the time of a loan modification.

3. Improvements to Reach More Borrowers with HAMP Modifications

- Improve borrower solicitation and communication and expand opportunities for borrowers in bankruptcy

* Clarifies borrower solicitation requirements and defines "reasonable effort" on the part of the servicer to outreach to borrowers.

-- Encourages early intervention by requiring pro-active solicitation of all borrowers who meet the HAMP eligibility profile and have missed two or more payments.

-- Establishes minimum solicitation requirements that include both phone and mail attempts.

* Prohibits referral to foreclosure until a borrower is evaluated and found ineligible for HAMP or reasonable contact efforts have failed, protecting responsible borrowers from unnecessary foreclosure actions and costs.

* Requires servicers to stop foreclosure actions after a borrower enters into a trial plan based on verified income.

* Requires written certification that a borrower is not HAMP eligible before an attorney or trustee can conduct a foreclosure sale.

* Establishes a 30-day borrower response period from the date of a non-approval notice during which foreclosure sale is prohibited. o Requires servicers to consider borrowers in bankruptcy for HAMP and removes barriers to HAMP evaluation.

-- Allows use of bankruptcy documents to verify income.

-- Allows waiver of the trial period in some cases were a borrower is already performing under a bankruptcy plan.

- Increase incentives for servicers to provide permanent modifications to homeowners

* Upfront servicer incentive payments increased for permanent modification to allow servicers to increase outreach and counseling efforts and to cover costs of implementing the updated program elements.

- Implement FHA-HAMP, expansion of HAMP to include homeowners with FHA loans.

* TARP funded incentives will be available to borrowers and servicers whose loans are modified under the FHA-HAMP guidelines. The incentives are comparable to the incentive structure of HAMP.

* FHA-HAMP provides FHA insured borrowers with modified mortgage payments set at 31 percent of gross monthly income, similar to a HAMP modification. o To be eligible for FHA-HAMP incentives, servicers must sign an agreement with Treasury.

4. Helping Homeowners Move to More Affordable Housing

- Increase incentives to provide more homeowners with foreclosure alternatives

* Increase payoffs to subordinate lien holders who agree to release borrowers from debt to facilitate greater use of foreclosure alternatives including short sales or deeds-in-lieu.

-- The new payoff schedule allows servicers to increase the maximum payoff to subordinate lien holders to 6 percent of the outstanding loan balance and doubles from $1,000 to $2,000 the incentive reimbursement that is available to investors for subordinate lien payoffs, subject to an overall cap of $6,000.

* Increase servicer incentive payments from $1,000 to $1,500 to increase use of foreclosure alternatives and encourage additional outreach to homeowners unable to complete a modification.

- Double relocation assistance payment for borrowers successfully completing foreclosure alternative to $3,000 o Help homeowners who use a short sale or deed-in-lieu to transition more quickly to housing they can afford.

Here are what some opponent's are saying about the HAMP program:

  • "HAMP modifications are not well-suited to address many cases where homeowners have suffered a large temporary decline in income, as might be the result of job loss. In particular, because the modification calls for a reduction in the ratio of payments to income based on the current level of income, a reduction that would not be reversed if income were to return to its previous level, the required modification in such cases will often be too costly to qualify the program."
  • "In addition, the program may not be very effective when the value of the mortgage greatly exceeds the value of the home. Some borrowers who believe that there is little prospect for house prices to recover enough to put the mortgage "above water" within some reasonable period of time will not participate in the program and instead walk away from their mortgages. Worse yet, other borrowers may shift beliefs only after entering the program; these borrowers are likely to default after many of the costs associated with the modification have already been borne."

Recent Articles about possible problems with HAMP:

There have been success stories involving the HAMP program....although not as many as the OBAMA Administration would like to see:

Mortgage Payment $2430

First missed payment: September (struggling every month but current through August)
Accepted into HAMP: October 20
Trial Period: December - February
Trial Payment: $2160

Financial Worksheet: $225 DEFICIT before mod (they never dug into this fortunately because it would be higher if ALL monthly expenses were included, not just the categories on the sheet)
Back End Debt Ratio: 95%
Front End Debt Ratio 58%

MODIFICATION DETAILS:
Approval Agreement received on March 19
Permanent Payment: $1779 (includes $37/mo for catching up escrow shortage) Monthly savings of $68

Being in Las Vegas, one of the most difficult situations home owners are having to deal with is how upside down we are.  Since the peak of our market in 2006, our prices have been hammered by 60-65% in most areas.   The idea that an FHA loan would allow you to refinance if you are 115% underwater is a joke to Las Vegans.  The most exciting part of the changes comes in the form of principle reductions.  If the government and banks can work together to forgive principle balances, then our housing market would start to truly see a recovery.   Banks should follow the lead of Bank of America which announced recently that they would start to reduce principle balances:

Here is how the Bank of America program will work:

  1. If you have a pay option ARM the bank will first look at your negative amortization account. With these loans borrowers were able to defer interest payments and these payments are held in negative amortization accounts. As part of the HAMP modification, the bank will eliminate this feature and forgive all or part of the negative amortization to reduce principal to as low as 95% loan to value (LTV).
  2. Also, pay option ARMs will be recast to eliminate the negative amortization and converted to fully amortizing loans.
  3. Next if the principal balance of the loan is greater than 120% LTV the bank will consider a set-aside of up to 30% of the principal as an "interest-free forbearance of principal." The amount set aside interest-free will be eligible for possible forgiveness.
  4. In addition to pay option ARMs, some prime two-year hybrids and Countrywide mortgages will be included in this program.
  5. As long as you pay your loan on time during a five year period, it's possible all the interest-free principal that was set aside will be forgiven. Whether or not all is forgiven will depend on the value of your home in the fourth and fifth year.

Obama is doing his part as well:

The revamp also will require banks to consider writing down loan balances as part of the formula for lowering monthly payments under the federal Home Affordable Modification Program, or HAMP. That program, which is voluntary, is currently designed to lower monthly payments mostly by cutting interest rates to as low as 2% or extending terms to 40 years. Both banks and borrowers get federal incentive payments under the $50 billion program. 

If you have tried the HAMP or HAFA program and have decided to short sell your home, please give me a call toll free at 1-866-589-1646.  All your information is strictly confidential.

Felipe Crook

Prudential Americana Group Realtors

Las Vegas, NV 89117

1-866-589-1646


 
Las Vegas Short Sales





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Mcneil Manor Home successfully sold!

I just moved into McNeil Manor when my neighbor approached me about listing his home.  After looking at all of the other listed homes in the neighborhood, I told him to list the property at $250,000.  There was a larger home that just recently sold in October for $250,000,  and since we are in a declining market, I was a little concerned about the price, but I said "Let's try it.  We don't have to accept any offers that you aren't comfortable with."

I took 15 different pictures of the property, posted in on my blog, Facebook, Twitter, Flickr, and many more sites, and generated a lot of buyer interest. Within 1 day of listing the property on the market, we got a full price offer.  I was very excited about getting such a strong offer.  After a few days of minor negotiations, we accepted the contract and my seller was in escrow.  Now, just because you get a full price offer doesn't mean that the property was going to appraise.  We see that a lot right now.  I met the appraiser at the house and provided her with all of the comparable sales I could find and discussed the market with her.  After a few anxious days, the appraisal came back at full value! 

As of March 19th, 2010 we successfully closed on 2707 Colanthe Ave with a sales price of $250,000 with no seller concessions.  Here are a few pictures of this beautiful home:

Mcneil Neighborhood Las Vegas

Felipe Crook McNeil Manor Las Vegas

mcneil manor las vegas

This listing generated a lot of buyers interested in living in McNeil Manor.  If you are considering selling, please give Felipe Crook a call at 1-866-589-1646.  Even if you are completely upside down, my real estate team has a full time short sale negotiator able to negotiate with the banks on your behalf.  If you'd like more information about short sales, here are a few resources for you:

 How can I keep my home?

This is a question I get all day long.  There are some viable loan modification programs and consumer advocacy groups that help struggling home owners.  Below are local and national resources to help you stay in your home:

Here are links to important downloads, resource sites and articles concerning short sales, HAFA and HAMP, and alternatives to foreclosure. 

To Download this Post as a PDF: Download ShortSaleResourceLinks

HAMP/HAFA

 Downloads:

From Realtor.org:

Resources for Short Sales

Alternatives to Foreclosure

Download FTCFactsforConsumers  Clearly defines all alternatives to foreclosure - from FTC
https://www.hopenow.com/homeowner-options.php - Hope Now Homeowner Options

Avoid Foreclosure - Help

Nevada Foreclosure Help and Resources

  • Nevada Foreclosure Mediation Program - http://www.nevadajudiciary.us/index.php/foreclosuremediation - This program allows homeowners to sit down with mortgage lenders, under the leadership of trained mediators, to discuss alternatives to foreclosure.
  • Nevada Foreclosure Help http://foreclosurehelp.nv.gov/   - Useful resources and info from Nevada Department of Business & Industry
  • Nevada Hope at Home http://www.nvhopeathome.org/ -  collaborative effort between Nevada Public Radio, local nonprofit organizations and local financial institutions to help provide residents in southern Nevada access to reliable, easy-to-find information on the foreclosure crisis in southern Nevada
  • Legal Aid Center of Southern Nevada http://www.lacsn.org/go/foreclosures/ - Legal Aid Center of Southern Nevada (LACSN) is a private, non-profit (501 (c) (3)) corporation which is a charitable organization dedicated to providing free community legal services to those in need.  LACSN has been providing free legal aid for Clark County's low-income residents since 1958.
  • HUD Approved Housing Counseling Agencies - Nevada 
    http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search&searchstate=NV

If you'd like to call me directly, call toll free 1-866-589-1646.  There is HOPE!

Felipe Crook

PRudential Americana Group Realtors

Las Vegas, NV 89117

1-866-589-1646

 


 
Las Vegas Neighborhoods





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Las Vegas Real Estate Market Condition Report March 2010: Continued High Demand - Lower Supply

This Market Condition Report is provided courtesy of Nevada Title Company and reports on closings of Single Family Residences for the period of Feb 2009 through Feb 2010.

Overall, the supply and demand schedules are little changed from previous month. Supply is relatively tight, especially for REO (61% of demand/16% of supply). Prices continue to show weakness for all types, more so for Short Sale and Standards. High price point properties, while showing increasing levels of activity, are still relatively slow exhibiting depressed Percent Selling/and Market Speed outcomes relative to lower priced offerings (about half the Percent Selling and half the Market Speed). Note from the market history table that February 2009 demand is about equal to February 2010 while supply is greatly reduced. The reduction in supply relative to demand has shifted the price schedule to the current level where it appears to be "hovering." Large changes in the price schedule are no longer occurring in favor of relatively small tentative up and down movements from month to month. This is characteristic of proximity to market bottom in terms of price.

 

Las Vegas Market COndition Report March 2010


REO monthly demand continues to exceed REO supply maintaining a Months Supply outcome of .9 (holding steady from February) and Percent Selling of 87%. Buyer preference for this type of property is clear and the competition amongst buyers is keen with multiple offers the norm. Market Speed is very fast (and holding in the current range) signaling quick conversion from listing to closing. Note heavy activity in the EAST and the corresponding price schedule. The REO segment of the market is slowly declining as supply continues to tighten from month to month.

 

 

REO Closings thru February 2010 - Las Vegas

 

Short Sale supply (47% of supply) exceeds Short Sale demand (21% of demand) by a factor of 6.7 (see Months Supply). Months Supply is holding in the current range implying resolved inventory is being replaced by new supply. Market Speed is slow (holding) and Percent Selling depressed, while escrow inventory remains at high levels and is increasing. Days on Market until Closed (CDOM) is elevated when compared to REO/Standard. These factors continue to support anecdotal reports of an inefficient closing process. Prices are weak with that trend likely to continue.

Short Sale Closing March 2010

 

 

Are you looking to purchase property in the Las Vegas area?  Now is the time to buy!

If you would like a FREE, confidential short sale consultation, please give me a call toll free at 1-866-589-1646.  We're here to help you avoid foreclosure, get a loan modification, or assist you to short sale your home.  Certified Short Sale Professional and Certified Distressed Property Experts handle every aspect of your short sale.

Felipe Crook

Prudential Americana Group Realtors

Las Vegas, NV 89117

1-866-589-1646


 






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Las Vegas Real Estate Market Report: 03/10/10

This is the latest Las Vegas Real Estate Market Report from www.NARREIA.com (National Association of Residential Real Estate Investment Advisors). For the week of March 10, 2010, data is obtained from the Greater Las Vegas Association of Realtors MLS.

Single Family Residence (SFR)

Available 8,302 (-122 , Last Week 8,424)
Under Contract 11,829 (+275 , Last Week 11,554)
Days of Supply 21 (-1 , Last Week 22)
Short Sales 11,866 (+118 , Last Week 11,748)

Condominiums and Town Homes (CONDO/TH)
Available 1,892 (+8 , Last Week 1,884)
Under Contract 2,847 (+52 , Last Week 2,795)
Days of Supply 20 (+0 , Last Week 20)
Short Sales 3,031 (+48 , Last Week 2,983)

Combined SFR + CONDO/TH

Available 10,194 (-114 , Last Week 10,308)
Under Contract 14,676 (+327 , Last Week 14,349)
Days of Supply 21 (-1 , Last Week 22)
Short Sales 14,897 (+166 , Last Week 14,731)

 

The following two graphs clearly display one of the realities of our current real estate market in Las Vegas...a consistent high demand and lower levels of inventory (supply).  We continue to see multiple offers on properties and a relatively low days on market for most properties.

Days of Supply Las Vegas Real Estate 2009-2010

Supply & Demand Las Vegas Real Estate 2009-2010

 

Are you looking to purchase property in the Las Vegas area?  Now is the time to buy!

If you would like a FREE, confidential short sale consultation, please give me a call toll free at 1-866-589-1646.  We're here to help you avoid foreclosure, get a loan modification, or assist you to short sale your home.  Certified Short Sale Professional and Certified Distressed Property Experts handle every aspect of your short sale.

Felipe Crook

Prudential Americana Group Realtors

Las Vegas, NV 89117

1-866-589-1646


 






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Declines in late payments give a glimmer of hope for Las Vegas Housing Market

Behind on your mortgages

I just came across an interesting article talking about the mortgage deliquency rate falling.  It is a slight decline, but it's the only one since 2006! The full article is below, but you can also visit  Nuwireinvestor.com:

  It doesn't have four letters, but "mortgage" has definitely been a dirty word in the financial world the past few years. That's especially true when the word "mortgage" is paired up with such other terms as "subprime," "delinquent," and "foreclosures."

Little wonder that mortgages - along with the derivative securities backed by them and the often-unseemly practices of the people pushing them - have gotten much of the blame for precipitating the economic meltdown from which the American economy is now struggling to recover.

There's still plenty of woe in the mortgage world. But in recent months there have also been some signs that the real-estate-financing markets are at least regaining some semblance of stability, with foundations being poured for a rebuilding phase that might not be too far down the road.

So far, the most promising sign of this hoped-for mortgage-market rebound has been a late-February report from the Mortgage Bankers Association (MBA), the mortgage-lending industry's leading trade group. The recently released report shows that delinquencies on existing first mortgages for residential properties with one to four living units - we're talking about roughly 44.4 million loans - declined in the 2009 fourth quarter.

The MBA's National Delinquency Survey found that late payments on these loans fell to a seasonally adjusted rate of 9.47% of all mortgage loans during the final three months of last year. That's down from 9.64% at the end of the third quarter. But it was still well above the 7.88% level from the fourth quarter in 2008, the MBA reported.

Although the decline from the third to the fourth quarter of last year was small, it still represented the first quarter-over-quarter decrease in the number of loans potentially headed for foreclosure since mid-2006. Mid-2006 was when the rate of late payments began to rise. The rate began to increase steadily until early 2007, when a massive spike in subprime-mortgage defaults caused the late-payment rates to escalate to unprecedented levels.

The ensuing collapse of housing prices - particularly in overbuilt areas like California, Nevada and Florida - and the country's subsequent plunge into recession, which pushed unemployment rates into double-digit territory, left an even-larger number of U.S. homeowners unable to meet their monthly obligations.

Peeling Back the Layers

MBA Chief Economist Jay Brinkmann said the positive nature of the figures was bolstered by a similar drop - from 3.79% to 3.63% - in the number of borrowers who had missed only one monthly payment. Brinkmann said that was significant for two reasons:

 

  • First, this latest development counters the historical trend for the fourth quarter, when short-term mortgage delinquencies normally rise due to holiday spending, higher heating costs and other seasonal factors.
  • Second, it means the rise in short-term delinquencies stopped short of the record levels set in 1985.

The drop in 30-day delinquencies is doubly important, Brinkmann added, because those late payments have historically been a leading indicator of foreclosure actions.

"With fewer new loans going bad, the pool of seriously delinquent loans and foreclosures will eventually begin to shrink," Brinkman said. "It also gives us growing confidence that the size of the problem now is about as bad as it will get."

Of course, the size of the foreclosure problem remains at record levels nationwide - and is far worse in some of the hardest-hit areas.

Across the United States, the percentage of mortgages in some stage of the foreclosure process rose to 4.58% at the end of 2009, up from 4.47% in September and 3.30% at the end of 2009. In Florida, however, 20.4% of all mortgages are either 90 days or more past due - or are already in foreclosure. Nevada is a close second: A total of 19% of its loans are either three months or more in arrears, or are now in full-blown foreclosure. Even worse, the number of subprime mortgages in foreclosure nationwide stands at 15.58%, up from 15.35% in September.

However, even in the foreclosure category, the MBA found some positive signs in the fourth quarter.

The number of loans on which new foreclosure actions were started fell to 1.20%, down from 1.42% in September and up just 12 basis points from year-end 2008. Foreclosure starts on subprime loans also decreased slightly, dropping from 3.76% in the third quarter to 3.66% in the fourth quarter.

Not everyone agreed with the MBA's somewhat upbeat view of the foreclosure numbers. A MarketWatch commentary on the delinquency report noted that a moratorium on foreclosures had been imposed by lenders and loan regulators in many areas of the country - a restriction that could be merely delaying new foreclosure actions rather than eliminating the need for them.

In his commentary, MarketWatch Assistant Managing Editor Steve Kerch noted that many mortgage lenders are already holding large inventories of foreclosed properties and might not want to add to the list until real-estate sales actually pick up from current levels.

Ineffective Assistance Programs?

Another factor at play was the Obama administration's increased emphasis late last year on its Home Affordable Modification Program (HAMP), designed to help 3 million to 4 million borrowers restructure their mortgages to avoid foreclosure. That could have helped stall new fourth-quarter-foreclosure actions and undoubtedly contributed to the improved MBA numbers, although the actual impact of the HAMP program still isn't clear.

The public-interest news organization, ProPublica, reports that only about 1.0 million homeowners have been put into the program since it started in April 2009. And only about 116,300 have received permanent loan modifications, while roughly 62,000 have already been dropped from the program for various reasons, such as failing to make their payments even after those payments were reduced.

The remainder of the 1 million participants are still in the so-called "trial period," which was supposed to last a maximum of three months. However, ProPublica says 475,000 have been in trial periods for longer than three months, and 97,000 have been stuck in loan-modification limbo for more than six months, with almost 60,000 of those having mortgages handled by Chase Home Finance, a subsidiary of JPMorgan Chase & Co. (NYSE: JPM).

The lengthy trial periods could have a negative long-term impact on troubled homeowners, since the reduced payments result in an increased balance on their mortgages, hurting the credit scores of the affected borrowers and leaving them with fewer alternatives if the modification ultimately falls through.

The low success rate and slow progress of the loan-modification programs also means that actual foreclosure rates could still spike higher, especially given the fact that very few of the people in trouble with their mortgages because of unemployment have been able to find new jobs - and more are still losing them, as evidenced by the rise in new weekly claims for jobless benefits in eight of the first 10 reporting periods in 2010.

The jobs situation also helps explain why about 275,000 homeowners in loan-modification trial periods are already delinquent on their payments, according to the U.S. Treasury Department, which monitors HAMP.

The housing market itself has been adding to the confusion with respect to mortgages. After rising nicely during the final quarter of 2009 - thanks in large part to a pair of government homebuyer tax-credit programs - sales of existing U.S. homes unexpectedly dropped in January.

The National Association of Realtors (NAR) reported that sales in the first month of 2010 fell 7.2% to an annual rate of 5.05 million units, down sharply from the predicted rate of 5.50 million homes - though that still represented an increase of 11.5% from January 2009. December sales were also revised downward slightly - from an annualized pace of 5.45 million to a projected 5.44 million units.

The impact of the waning federal tax credits on January sales was reflected in another NAR report. Purchases by first-time homebuyers using the credit - which was subjected to income limits in November - fell by 3.0% in January. The tax credits are scheduled to expire at the end of April.

By contrast, the report said January purchases by investors who were looking to take advantage of foreclosure bargains rose by 2.0% from December to January.

That surge in investor buying was particularly evident in some of the nation's harder-hit regions, such as the Las Vegas area, where the research firm MDA DataQuick reported that 43% of all January home purchases were made by investors or second-home buyers, who paid a median price of $101,000 for their homes, down from $109,836 in December and $125,000 in January 2009.

However, the impact of that buying on the Vegas mortgage market was less pronounced since MDA also told the Las Vegas Sun that a full 50% of January home purchases were all-cash deals, up from 39% in January 2009.

That situation prompted first-time homebuyer Chris Iuso - who's pre-qualified for a loan and looking to purchase a Las Vegas foreclosure property for as much as $120,000 - to complain to a Wall Street Journal reporter that, in spite of Nevada's No. 2 national ranking in mortgages in foreclosure, "there really isn't much inventory (of foreclosed houses) to chase."

Even worse, the bit of housing that is out there and available typically sells for cash on the barrel - putting it out of reach of the typical prospective homeowner. Iuso's agent, Bryan Mitchell of Re/Max Associates, told The Journal that some bank-owned homes have attracted more than 20 offers within just a few days.

Of course, one reason cash is suddenly king in severely depressed markets is that lenders remain reluctant to make new real estate loans - for a variety of reasons. Those reasons include:

  • Jobless rates, which remain stubbornly high, and which are actually still climbing in such geographic areas as Las Vegas.
  •  Low rates on fixed-rate loans - too low, in fact, for lenders to willingly take on the uncertainty of long-term loans.
  • High exposure to increasingly delinquent commercial-property/commercial-real-estate (CRE) loans, which could be the focus of the next banking crisis.
  • And still-declining property values, which could put even more homeowners "under water," meaning they owe more on their loans than their houses are worth.

Still-falling average home prices were confirmed by the S&P/Case-Shiller U.S. National Home Price Index, which recorded a 2.5% decline in the fourth quarter of 2009 versus the fourth quarter of 2008. There is a bright spot, however: That's a major improvement over the annualized rates reported in the first three quarters of 2009, when there were reported price drops of 19.0%, 14.7% and 8.7%, respectively speaking.

In the nation's 20 leading metropolitan areas, which are surveyed monthly, the drop in average prices for December was 3.1%.

The One Place to Profit From the Mortgage Malaise

The continued decline in home prices was the major underlying reason the late-February report by real estate researcher FirstAmerican CoreLogic concluded that 11.3 million U.S. homeowners - nearly 25% of all residential-mortgage holders - owe more on their loans than their houses are worth. The report said that 620,000 new homeowners went under water in the fourth quarter, while another 2.3 million are living on the razor's edge - with less than 5% equity in their homes.

What does this all add up to for investors? The mortgage markets may be stabilizing, but uncertainty remains far too high to generate many outstanding profit opportunities in this harried market sector.

But there may be one exception: The mortgage insurance market.

The mortgage market remains a turbulent one. Property values remain questionable in many markets. And because of a "jobless recovery" and shaky employment outlook, even a borrower with a pristine credit score may end up in a financial jackpot with the loss of paycheck that's necessary to keep making mortgage payments. With such a dour outlook, you can bet that every lender will insist on mortgage insurance before making any new loan. That, coupled with even a modest decline in new delinquencies and foreclosures, could help out the insurers - and their stock prices.

Proof of that came late last month when Radian Group Inc. (NYSE: RDN) reported a smaller-than-expected quarterly loss - $1.12 versus a predicted $1.69 - based on a slowing in the rate of fresh delinquencies and increased liquidity to cover claims, a condition it expects to maintain through 2012.

Radian's shares rose $1.25 each, or 14.59%, to $9.83 on the news, and eclipsed the $10 level this week. Other firms in the sector - most of which will be reporting earnings in the next couple of weeks - also rose in price on Radian's coattails. Among the ones that could be worth a look, with closing prices from yesterday, are:

    * The PMI Group Inc. (NYSE: PMI) - $2.80.
    * MGIC Investment Corp. (NYSE: MTG) - $8.00.
    * MBIA Inc. (NYSE: MBI) - $5.05.

But given all the uncertainty in the mortgage market right now, make sure to investigate these companies carefully before purchasing their shares.

If you are falling behind on your mortgage, there are a lot of government programs recently created to help home owners.  HAMP and HAFA are just a few.  For more information, please visit their website at http://www.MakingHomesAffordable.gov . I'd be happy to give you a free short sale consultation just call me toll free at 1-866-589-1646.

Felipe Crook

Prudential Americana Group Realtors

Las Vegas, NV 89117


 
Las Vegas Foreclosure Reports





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Las Vegas Weekly Economic Update Summary March 5th, 2010

Las Vegas Housing Market Economics

OVERVIEW ~ As now seems the usual course for the markets, sentiment among investors turned from optimistic, over the week of Feb. 16 (Feb. 15 was a holiday) to Feb. 19, to pessimistic in the week that followed. At the start of the day on Monday, Feb. 22, the Dow Jones Industrial Average (DJIA) had risen to 10402.35. By the end of the week, the DJIA had declined to 10325.26. This is not a precipitous fall, but stock market indices remained somewhat sluggish over the entire week, brought down by disappointing economic indicators and worries about developments in Greece. Further, the week saw very large Treasury security auctions in which bidders pushed rates slightly higher than the Treasury had anticipated. Again, not a great deal higher, but enough to create worry, particularly over Monday's and Wednesday's auctions. The Freddie Mac average 30-year fixed-rate, meanwhile, rose from 4.93% the week prior to 5.05% on Thursday, Feb. 25. This signaled the possibility of an on-going uptrend among mortgage rates (though, as always, concerns that present events foretell future trends usually fall away as the mood among investors moves from negative to positive and back again).

 FOLLOW-UP ~ Greece remained in the news, postponing its sales of 10-year notes for one to two weeks, much to the concern of international investors.  Greece needs to borrow at least  54 billion this year to pay off existing notes and bonds; it has thus far raised  13 billion. About  22 billion of bonds mature in March and April, and so Greece is under the gun to find enough money to pay off the  22 billion. The country also currently faces the possibility that Standard & Poor's, and possibly other rating agencies, will lower its rating for Greece, which could make it still harder for Greece to sell its notes.

 Coming this spring as well, the Fed will stop helping keep mortgage rates low as its program of buying very large quantities of mortgage-backed securities (MBSs) comes to an end. Investors have had plenty of advance warning that this will happen, and it is therefore difficult to predict the reaction in the markets. More important, though, we can't know to what extent this will leave the MBS markets vulnerable to an imbalance of growing supply and lower demand, elevating the rates required by investors.

FOCUS ~ The Federal Reserve Board Chairman, in testimony before Congress on Wednesday, Feb. 24, once again reassured the markets that the Fed would continue to help keep rates low for an "extended period." His comments appeared to briefly help lift the stock index nearly a full percent, but investors remain skeptical, worried that interest rates may turn higher before the Fed Chairman currently predicts they will. The rate the Fed charges at its "discount window," after all, was nudged higher last week. And purchases of MBSs will cease in March. What we can see here is an anxiety among investors which cannot be salved by the Fed chief (surely assuring continued market volatility) as rates and indices climb and fall unpredictably

The Las Vegas Housing Market continues to see high buyer traffic

The month of February saw 3,178 properties change hands of buyers looking to capitalize on the First Time Home Buyers Tax Credit.

  • 23% of those sold properties were short sales
  • 54% of those sold properties were foreclosures
  • 23% of those sold properties were regular sellers

The available inventory has dropped dramatically from a year ago:

  • There are currently 10,724 condos, townhouses, and single family residences on the market.
  • 45% of those properties are listed as Short Sales (where the bank has to approve the sales price and take a loss)
  • 38% of those properties are regular sellers
  • 15% of those properties are foreclosures.  This is a HUGE drop in available foreclosures.

If you are interested in short selling your home, visit http://www.LasVegasShortSaleConnection.com or call me toll free at 1-866-589-1646.  You can also do your own home search below for FREE. 

Felipe Crook Prudential Americana Group Realtors, Las Vegas NV 89117 


 
Las Vegas Foreclosure Reports