U.S. Foreclosure Homes Drops 9% in Oct.

12 11 2010

The number of U.S. homes foreclosed by lenders last month fell by the sharpest margin this year, as several major lenders temporarily halted most or all of their foreclosures amid allegations thousands of foreclosures were handled improperly.

Home repossessions dropped 9 percent from September to October, according to RealtyTrac Inc.

The decline represents the first significant hitch in a foreclosure steamroller that’s had lenders on pace to seize more than 1 million homes this year.

In recent weeks, some lenders that had suspended taking action against borrowers severely behind in payments have announced plans to resume doing so, though at a more measured pace, in an attempt to ensure there aren’t any flaws in the process.

That means the number of homes lost to foreclosure should begin picking up again, but at a much slower pace.

Lenders such as Bank of America, Ally Financial’s GMAC Mortgage and JPMorgan Chase & Co. suspended some or all of their foreclosure activity after the foreclosure documents mess erupted in late September. In recent weeks, they announced plans to resume some foreclosure actions.

Bank of America announced Oct. 8 it would withdraw for review some 102,000 pending affidavits related to foreclosure proceedings in 23 states where courts play a role in the process.

About two weeks ago, the lender said it would begin resubmitting those affidavits, a process that was expected to take several weeks to complete.

It continues to have a hold on trustee sales or sheriff’s auctions of foreclosed homes, and is still delaying foreclosures in the 27 states that don’t require a judge’s approval as it reviews its cases in those states.

JPMorgan Chase said last week it would be restarting the foreclosure process later this month after halting foreclosure proceedings on 127,000 loans in 40 states.

“We expect it will take about three or four months to basically get back up to speed,” said spokesman Thomas Kelly.

GMAC, meanwhile, has been reviewing its thousands of foreclosure cases and moved ahead with them on a case-by-case basis.

“The moratorium may have been lifted by just about all the banks, but it’s gone from a foreclosure moratorium to a foreclosure slowdown,” said banking analyst Nancy Bush of NAB Research.

Banks have seized more than 909,000 homes through the first 10 months of the year and, even with the delays caused by the temporary foreclosure freeze, are on pace to take back more than 1 million homes this year.

Economic woes, such as unemployment or reduced income, continue to be the main catalysts for foreclosures.

In all, 93,236 homes were taken back by lenders in October, down from a peak 102,134 in September, said RealtyTrac, which tracks notices for defaults, scheduled home auctions and home repossessions – warnings that can lead up to a home eventually being lost to foreclosure.

Despite the sharp drop, October’s tally was still 21 percent higher than a year ago. Lenders have foreclosed on an average of more than 91,000 properties each month this year.

The number of homes taken back by banks fell sharply from September in many of the foreclosure hotbed states, including Arizona, California, Illinois and Nevada.

Florida bucked that trend, with repossessions rising 1 percent from September. They nearly doubled versus October last year.

“There were probably a whole batch of foreclosures that were already in process when the freeze was announced that led to Florida’s numbers being not affected as much in October as some of the other states,” Sharga said.

Initial defaults have fallen on an annual basis the past nine months as lenders have taken steps to manage the levels of distressed properties they have on their books.

All told, 332,172 properties received a foreclosure-related warning last month, down 4 percent from September and essentially flat versus the same month last year, RealtyTrac said. That translates to one in 389 U.S. homes.

Among states, Nevada posted the highest foreclosure rate last month, with one in every 79 households receiving a foreclosure notice. That’s nearly 5 times the national average.

Rounding out the top 10 states with the highest foreclosure rate in October were: Florida, Arizona, California, Michigan, Utah, Georgia, Idaho, Illinois and Colorado.

Source: The Associated Press

Florida’s Existing Condo Sales Up in 3Q 2010

12 11 2010

Sales of existing condominiums in Florida rose 15 percent in third quarter 2010 compared to the same period a year earlier, according to the latest housing statistics from Florida Realtors. A total of 16,938 existing condos sold statewide in 3Q 2010; during the same period the year before, a total of 14,793 units changed hands.

Fourteen of Florida’s metropolitan statistical areas (MSAs) reported higher existing condo sales in the third quarter, according to Florida Realtors. The statewide existing-condo median sales price was $84,000 for the three-month period; in 3Q 2009, it was $106,000 for a decrease of 21 percent.

“A healthy housing market is built on the foundation of a robust economy,” said Dr. Sean Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness. “As the economic recovery continues in Florida – and in particular as the labor market improves – the housing market will follow suit. The price decline in the condo market continues to attract domestic and foreign buyers to Florida to take advantage of this buying opportunity.

“The third-quarter single-family and condo Florida resales data reflect a slowdown relative to second-quarter data as the expiration of the first-time homebuyer’s tax credit in April pulled future demand into the second quarter,” Snaith said, adding that the drop-off was expected.

Meanwhile, in the year-to-year quarterly comparison for existing single-family home sales, 41,122 homes sold statewide for the quarter compared to 44,451 homes in 3Q 2009 for a 7 percent decrease. The statewide existing-home median sales price was $135,200 in 3Q 2010; a year earlier, it was $145,300 for a decrease of 7 percent. Sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes, according to the National Association of Realtors® (NAR). The median is a typical market price where half the homes sold for more, half for less.

The University of Florida’s Bergstrom Center for Real Estate Studies’ latest quarterly survey of real estate trends reports that the jobless rate remains a top concern for the future outlook of the state’s real estate industry. The survey polls market research economists, industry executives, real estate scholars and other experts.

Timothy Becker, the center’s director, noted that investment in real estate continues to flow into Florida, though investors are wary about the economy. “The apartment sector is the stellar performer,” he said, adding that conditions continue to improve in the commercial sector. “We’re starting to see stabilization across property types in occupancy, with respondents saying they feel better about what rents are going to look like in the near future.”

Low mortgage rates continued to be available during the third quarter of the year. According to Freddie Mac, the national commitment rate for a 30-year conventional fixed-rate mortgage averaged 4.45 percent in 3Q 2010; one year earlier, it averaged 5.16 percent.

Source: Florida Realtors

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