FHA Extends 'Anti-Flipping Waiver' to Speed Sales of REO Homes

The Federal Housing Administration (FHA) announced Friday that it is extending the suspension of its ‘anti-flipping rule’ through the remainder of 2011.

FHA Commissioner David Stevens says the temporary waiver will accelerate the resale of foreclosed homes in neighborhoods that are overrun with abandoned properties and blight. The move is intended to help stabilize home values and improve conditions in communities experiencing high foreclosure activity.

FHA regulations typically prohibit insuring a mortgage on a home owned by the seller for less than 90 days, but in February of last year, FHA temporarily waived this regulation through January 31, 2011, noting that in today’s foreclosure-ravaged marketplace, the agency’s research has shown that acquiring, rehabilitating, and reselling distressed properties often takes less than 90 days.

With the sunset date for that first extension just days away, FHA posted a notice on Friday extending the waiver through December 31, 2011. This action will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales.

“As I noted when we first announced this policy change early last year, because of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” Stevens said. “Today I can report that this policy change has been effective.”

Stevens says since the original waiver went into effect, FHA has insured more than 21,000 mortgages worth over $3.6 billion on properties resold within 90 days.

FHA said it the notice that prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days would adversely impact the willingness of sellers to consider offers from potential FHA buyers, because the seller must also factor in holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

“Because of past restrictions, FHA borrowers have often been shut out from buying affordable properties,” Stevens added. “This action enables our borrowers, especially first-time buyers, to take advantage of this opportunity and buy a home that has recently been rehabilitated. It will also help to move more foreclosed properties off the market and reduce the number of vacant homes in neighborhoods throughout this country.”

The waiver contains strict conditions and guidelines to protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices. The agency’s anti-flipping waiver is limited to those sales meeting the following criteria:

All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.

In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.

The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Source: DS News

In today's challenging Los Angeles real estate market, selecting the right real estate agent is crucial. It can make all the difference in the world. Whether you're planning on buying, selling, or you just have a question, feel free to call Toni Patillo. We service the Greater Los Angeles, the Westside, Beverly Hills, and more.

Toni Patillo & Associates
Broker Of Record l DRE#0313287
Keller Williams Realty Santa Monica
2701 Ocean Park Blvd., Ste. 140 • Santa Monica, CA 90405
Office (310) 482-2035 • Fax(424) 744-4148

What Are Your Biggest Short Sale Challenges in 2011? SURVEY RESULTS!

Short Sale Daily news asked it's readers, "What Are Your Biggest Short Sale Challenges in 2011?" Here are the results:

We asked and you responded, Short Sale Daily News readers! Our quick and easy survey featured this single question, with the ability to click up to four out of 12 possible answers.

Surprisingly, we found a few of these were of very little concern. Issues such as the amount of inventory on the market, educating potential buyers on the short sale purchase process, funding/loan approval and consumer confidence all scored very low on your list of concerns.

So what was the #1 challenge that Realtors clicked? Lag time in bank negotiations weighed in at 44.7% followed closely by inflexibility at banks with 42.1%. The next highest ranking challenges were:

Getting the deal from approval to closing: 36.8%

Unwillingness of banks to do short sales because they profit more by foreclosure: 31.6%

Lack of proper staffing at bank: 28.9%

Time restrictions banks place on the deal: 28.9%

Educating distressed homeowners as to why/how a short sale is better than foreclosure: 23.7%

So what seems to be the common thread with the greatest concerns? The banks. Veteran short sales agents probably won’t be all that surprised about this, but it is sad nonetheless. The mega banks keep saying they are staffing more, responding more quickly, streamlining their operations, etc., etc. and yet agents still can’t get answers in a timely manner. And distressed homeowners—bank customers—keep getting increasingly frustrated with the pathetic level of customer service happening with these mortgage servicers.

You would think the last thing ANY bank wants right now is more real estate inventory on its books to maintain, carry, pay taxes for and go through an additional negotiation process for resale. And yet banks’ actions say just the opposite. Is it any wonder then why this theory that banks make more money on foreclosures than short sales is starting to sprout some serious wings? Nearly a third of you who took this survey signified that as a concern.

Source: Short Sale Daily News

Index of Distressed Property Sales Surges in December: Report

Sales of distressed properties surged in December as many banks resumed foreclosures following the suspensions prompted by robo-signing issues last fall, according to an industry study conducted by Campbell Surveys.

The company’s HousingPulse Distressed Property Index (DPI) recorded a sharp jump last month. The December DPI was 47.2 percent, reflecting the share of home sales transactions that involved distressed properties. December’s level was up from 44.5 percent in November and nearly matched the 47.5 percent peak recorded by the HousingPulse DPI in September, right before the robo-signing controversy came to light.

The National Association of Realtors also reported an uptick in distressed property sales but a significantly lower share of total transactions during the final month of last year. Data released by the trade group last week put the distressed piece of the pie at 36 percent of December’s existing home sales, up from 33 percent in November.

Campbell Surveys says distressed property sales were not distributed evenly around the country.
According to the company’s latest study, in the foreclosure-ridden state of California, 66 percent of all transactions tracked in December involved distressed properties. The combined area of Arizona and Nevada similarly suffered, with 62 percent of transactions being distressed.

However, in the southern states of Texas, Oklahoma, and Louisiana, only 29 percent of transactions were distressed, according to Campbell Surveys.

Separately, sales to first-time homebuyers continued at the high level of 37.7 percent of all transactions tracked in December, the company reported. That’s up from 34.4 percent in the months of September and October.

Campbell Surveys says fears of rising mortgage rates prompted first-time homebuyers to get off the fence and buy before another burst of interest rate-increases. At the same time, investors reduced their activity amid fears of falling house prices.

“The combination of increased property supply and growing homebuyer demand caused a blow-out month for home sales,” commented Thomas Popik, research director for Campbell Surveys. “We knew this was coming because average transactions for our survey respondents rose from 2.9 in November to 3.4 in December.”

Popik says the surge in homebuying, though, isn’t likely to last. “January and February are typically the slowest months of the year for homebuying,” Popik explained. “And we’ll still have a backlog of foreclosed homes coming on the market during the winter, so prices may come under pressure, too.”

Campbell’s HousingPulse survey polls more than 3,000 real estate agents nationwide each month to provide market data on home sales and mortgage usage patterns.

Existing Home Sales On the Rise

Recovery on Move: December 2010 Existing-Home Sales Jump 12.3 Percent

RISMEDIA, January 21, 2011—Existing-home sales rose sharply in December 2010, when sales increased for the fifth time in the past six months, according to the National Association of REALTORS®.

Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 12.3% to a seasonally adjusted annual rate of 5.28 million in December from an upwardly revised 4.70 million in November, but remain 2.9% below the 5.44 million pace in December 2009.

Lawrence Yun, NAR chief economist, said sales are on an uptrend. “December was a good finish to 2010, when sales fluctuate more than normal. The pattern over the past six months is clearly showing a recovery,” he said. “The December pace is near the volume we’re expecting for 2011, so the market is getting much closer to an adequate, sustainable level. The recovery will likely continue as job growth gains momentum and rising rents encourage more renters into ownership while exceptional affordability conditions remain.”

The national median existing-home price for all housing types was $168,800 in December, which is 1.0% below December 2009. Distressed homes rose to a 36% market share in December from 33% in November, and 32% in December 2009.

“The modest rise in distressed sales, which typically are discounted 10 to 15 percent relative to traditional homes, dampened the median price in December, but the flat price trend continues,” Yun explained.

Total housing inventory at the end of December fell 4.2% to 3.56 million existing homes available for sale, which represents an 8.1-month supply at the current sales pace, down from a 9.5-month supply in November.

NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said buyers are responding to very good affordability conditions despite tight mortgage credit. “Historically low mortgage interest rates, stable home prices, and pent-up demand are drawing home buyers into the market,” Phipps said. “Recent home buyers have been successful with very low default rates, given the outstanding performance for loans originated in 2009 and 2010.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.71% in December from 4.30% in November; the rate was 4.93% in December 2009.

A parallel NAR practitioner survey shows first-time buyers purchased 33% of homes in December, up from 32% in November, but are below a 43% share in December 2009.

Investors accounted for 20% of transactions in December, up from 19% in November and 15% in December 2009; the balance of sales were to repeat buyers. All-cash sales were at 29% in December, compared with 31% in November, but up from 22% a year ago. “All-cash sales have been consistently high at about 30 percent of the market over the past six months,” Yun said.

Single-family home sales jumped 11.8% to a seasonally adjusted annual rate of 4.64 million in December from 4.15 million in November, but are 2.5% below the 4.76 million level in December 2009. The median existing single-family home price was $169,300 in December, down 0.2% from a year ago.

Existing condominium and co-op sales surged 16.4% to a seasonally adjusted annual rate of 640,000 in December from 550,000 in November, but remain 5.2% below the 675,000-unit pace one year ago. The median existing condo price was $165,000 in December, which is 7.4% below December 2009.

Regionally, existing-home sales in the Northeast jumped 13.0% to an annual pace of 870,000 in December, but are 5.4% below December 2009. The median price in the Northeast was $237,300, which is 1.4% below a year ago.

Existing-home sales in the Midwest rose 11.0% in December to a level of 1.11 million, but are 4.3% below a year ago. The median price in the Midwest was $139,700, up 3.3% from December 2009.

In the South, existing-home sales increased 10.1% to an annual pace of 1.97 million in December, but are 2.5% below December 2009. The median price in the South was $148,400, unchanged from a year ago.

Existing-home sales in the West surged 16.7% to an annual level of 1.33 million in December, but remain 1.5% below December 2009. The median price in the West was $204,000, down 5.6% from a year ago.

In today's challenging Los Angeles real estate market, selecting the right real estate agent is crucial. It can make all the difference in the world. Whether you're planning on buying, selling, or you just have a question, feel free to call Toni Patillo. We service the Greater Los Angeles, the Westside, Beverly Hills, and more.

Toni Patillo & Associates
Broker Of Record l DRE#0313287
Keller Williams Realty Santa Monica
2701 Ocean Park Blvd., Ste. 140 • Santa Monica, CA 90405
Office (310) 482-2035 • Fax(424) 744-4148

Listing of the Week - Spanish Duplex

Southwest Los Angeles

Duplex

Property Type:Residential Income
Listing Status:Active
Area Name:Los Angeles Southwest
Style:Spanish
Year Built: 1931
Square Feet:1710
Square Feet of Land: 5400
Roofing:Tile
Parking Type:Garage Is Detached, Garage
Garage Spaces: 2
Heat Type:Wall Heater

Appliances:Refrigerator
Cooking Appliances: Range

Listing Price:$239,000
Gross Operating Income:$25,560
Tenant Pays:Electricity,Gas

Remarks: BUYER FELL OUT OF ESCROW-BANK APPROVED - Adorable Side by Side Spanish Duplex in pride of ownership neighborhood. Well maintained units with great curb appeal. Each unit has 2 bedrooms 1 bath with washer/dryer hook ups. Property has a gated private spacious back yard and each has 1 parking space in the detached garage. Tenant Occupied Please Do Not Disturb Occupants. Great for Investor Buy & Hold. Short Sale

Housing Moving to Higher Ground in 2011

RISMEDIA, January 18, 2011—Housing will see gradual improvements in activity this year as the nation’s economy and job market continue to move to higher ground, establishing momentum that will produce more considerable gains in 2012, according to economists who appeared at the NAHB International Builders’ Show in Orlando on January 12.

“This year’s spring selling season will be better than last year’s,” said NAHB Chief Economist David Crowe, with job growth providing a stronger stimulus in the housing market than last year’s tax credits for home buyers.

Crowe forecasted 575,000 single-family home starts in 2011, a 21% climb over an estimated 475,000 units started in 2010, which in turn showed a 7% gain from the 442,000 homes started in 2009.

Multifamily, which is poised to profit from a disproportionate number of Gen Y members moving into the housing market, has seen the bottom of the cycle, he said, and will see its starts rise 16% this year to 133,000 units, with a further 53% increase in 2012 to 203,000 units.

Builders’ access to the credit they need to start new homes remains the fragile component of the NAHB forecast, Crowe said. So far, small builders have experienced extreme difficulty in obtaining financing, and rectifying the situation as soon as possible is the top priority of the association.

More encouraging is a rebound in the confidence of consumers, who mid-2010 “froze in place, faced with a lot of uncertainty,” he said. A recent pickup in durable purchases for such items as automobiles and furniture indicates that consumers are less afraid today of losing jobs and income.

The U.S. economy will receive a boost from the massive tax package enacted at the end of last year, he said, including more income going into the pockets of wage earners thanks to a one-year 2% reduction in Social Security taxes. This will contribute to the gross domestic product strengthening from the 2.5% range to 3.5% to 3.8% by year’s end.

New-home sales, Crowe projected, “will struggle” but begin following employment gains, reaching 405,000 for the year, up from an estimate of about 320,000 for 2010.

The housing recovery will start up slowly this year, he said, because it will be driven by the relatively low housing production Plains states, with Texas the most powerful of the bunch. Traditional bulwarks of housing activity such as California and Florida, on the other hand, will not be among the states whose housing markets recover the fastest.

In addition to stimulative fiscal and monetary policy, Freddie Mac Chief Economist Frank Nothaft said that housing affordability and demographic trends will help support growing housing demand.

Citing research from the Harvard Joint Center for Housing Studies, Nothaft said that households should be growing at an average annual rate of 1.2 million to 1.5 million over the next five to 10 years, suggesting the need for a sharp increase in housing production; half of the 500,000 to 600,000 starts of the past two years were needed just to replace the number of homes being removed from the housing stock.

While there will continue to be supply overhangs in some important large markets, by and large the housing price slump should bottom out by the middle of this year, he said, and price increases are already occurring in some local areas. That should attract prospective buyers who have been procrastinating until they see prices hit bottom.

“Potential buyers who have resources to buy but want to buy at the bottom are likely to start coming into the market in the springtime,” he said, which for fence sitters will be “the time to come into the market.”

Fixed-rate mortgages will move up from their current 4.75% to the 5.75% range by the end of this year, he forecasted. This will push total single-family mortgage originations down about 30% below the 2010 level as refinancings fall sharply in the face of rising mortgage rates.

While a 20% increase in housing production in 2011 is good news for housing, to put things in perspective, Nothaft said that this gain is from an extremely low level, with single-family production declining about 80% from peak to trough.

In today's challenging Los Angeles real estate market, selecting the right real estate agent is crucial. It can make all the difference in the world. Whether you're planning on buying, selling, or you just have a question, feel free to call Toni Patillo. We service the Greater Los Angeles, the Westside, Beverly Hills, and more.

Toni Patillo & Associates
Broker Of Record l DRE#0313287
Keller Williams Realty Santa Monica
2701 Ocean Park Blvd., Ste. 140 • Santa Monica, CA 90405
Office (310) 482-2035 • Fax(424) 744-4148

New Listing - 12567 Sanford St. Los Angeles ($639,000)

($639,000)

4 Bed

3 Bath

2,117 sq ft

Back on the market! Call for details VALUE BEYOND BELIEF!! Take advantage of this Unbelievable short sale opportunity Spacious, updated 3-story home located on a cul-de-sac, on the north side of the street(not the fwy side).This home offers a great floor plan with a fantastic flow and defines true meaning of the California lifestyle. French doors lead to a lush yard w/spa, mature landscaping for the ultimate privacy & a large patio for dining al fresco all year round. Master Suite with large walk in closet, hardwood floors in living areas, fireplace, & so much more. Call this great deal home, WHAT MORE COULD YOU WANT?

For more information regarding this listing, please contact Toni Patillo.

Toni Patillo & Associates

Broker Of Record l DRE#0313287

Keller Williams Realty Santa Monica

2701 Ocean Park Blvd., Ste. 140 • Santa Monica, CA 90405

Office (310) 482-2035 • Fax(424) 744-4148

Equator Predicts 25 Percent Increase in Short Sales in 2011

In an interview with HousingWire, Equator's Chief Operating Officer John Vella said he believes 2011 will be the year of the short sale. He attributes a good deal of this to the foreclosure volume and current/pending REO inventories. With these numbers sky-rocketing, mortgage loan servicers will need to be more flexible about doing short sales.

Vella estimates this increase could be 25% or more, provided servicers are properly staffed and using proven short sales technology. (Read that as his subtle way of promoting Equator software!)

Agents, if you have real estate investors in your database, now would be a great time to share this predicted increase with them. Purchasing short sales can be an investor’s gold mine—and yours.

Source: ShortSaleDailyNews

Toni Patillo & Associates

Broker Of Record l DRE#0313287

Keller Williams Realty Santa Monica

2701 Ocean Park Blvd., Ste. 140 • Santa Monica, CA 90405

Office (310) 482-2035 • Fax(424) 744-4148

NEW LISTING - 905 NOWITA PL. VENICE, CA 90292 ($997,000)

($997,000)

3 Bed

2 Bath

2,269 sq ft

Builder’s, Developer’s, Owner User’s – Opportunity knocks with this private, spacious 2 story, 3 bedroom, 2 bath architectural cabin home located on Venice’s Famous Walk Streets. Live in and perfect over time or update, remodel and resell for a respectable return. The home features wide open spaces, vaulted ceilings, lots of light, kitchen that opens up to formal dining room, living room, large family room or office with built in bookshelves, polished concrete floors, beautiful yard with patio deck. Very rare in Venice is an attached garage and carport. Just walking distance from Abbott Kinney and Venice Board Walk. This is a Short Sale. Listing Agent is a Certified Distressed Property Specialist.

In today's challenging Los Angeles real estate market, selecting the right real estate agent is crucial. It can make all the difference in the world. Whether you're planning on buying, selling, or you just have a question, feel free to call Toni Patillo. We service the Greater Los Angeles, the Westside, Beverly Hills, and more.

Toni Patillo & Associates
Broker Of Record l DRE#0313287
Keller Williams Realty Santa Monica
2701 Ocean Park Blvd., Ste. 140 • Santa Monica, CA 90405
Office (310) 482-2035 • Fax(424) 744-4148

Short sales could improve SoCal housing market | abc7.com

Here is an interesting news story from KABC Channel 7 regarding short sales and the Southern California housing market.

(KABC) -- Taking a look at the local housing market and what we can expect in the new year, there will likely be a spike in foreclosures. But that could be offset by short sales becoming easier.

Susan Varley, owner of Real Pros Real Estate in Corona, is showing a house for sale that was once a foreclosure. Believe it or not, it is somewhat of a rarity. For the past several months, foreclosures all but dried up, even in the Inland Empire.

"The truth is, there's not a lot of foreclosures right now," said Varley.
But in 2011, that's expected to change.

This now-remodeled house will likely face more competition. Banks had a moratorium on foreclosures, especially during the holidays.

But this year, some experts believe banks will release more foreclosures into the housing market.
Varley doesn't think that will change things much in Southern California.

"I think we will see an increase in foreclosures, but I don't know if a dramatic enough increase to really impact our market," said Varley.

What happens with foreclosures in 2011 may be dependent on what happens with "short sales." Short sales are when a home is sold for less than the property owner owes on it. In the past, the banks have taken quite a bit of time to do a short sale. But that's about to change.

"The banks are getting a better handle on the short-sale process, and the time frames are speeding up quite a bit," said realtor Mike Belger. "This property we're standing in right now has been on the market with a short-sale negotiator about three and a half months, and we just actually got a full approval today on it."

Even though short sales like on this Corona condominium are 40 to 50 percent of the Inland Empire market, it used to take six to nine months or longer to complete a short sale, and that was not good for most buyers.

"You waited nine months. By the time you got your approval, the buyer was gone or had bought something else," said Belger.

But with faster short sales and more inventory at good prices, 2011 is looking up.
"I wouldn't call it a banner year, but I expect it to get better than it was last year," said Belger. "2011 will be better than 2010."

(Copyright ©2011 KABC-TV/DT. All Rights Reserved.)

Property Appreciation Expected in 40% of Major Metro Areas in 2011

According to a recent update to the real estate market forecast from Veros Real Estate Solutions, select markets in the United States can expect 2.5 percent to 3.5 percent appreciation in home values over the next 12 months.

Although only mild appreciation is expected, approximately 40 percent of all major metro areas are forecast to see property values go up in 2011, Veros said.

The California-based provider of enterprise risk management and collateral valuation services predicts that San Diego’s consistent pattern of having one of the strongest home price appreciations will continue in 2011.

Washington State’s tri-city area; Pittsburgh, Pennsylvania; Fargo, North Dakota; and the Washington, D.C., metro area will follow San Diego in home appreciation values.

“Smaller metro markets with populations less than 250,000 make up the majority of the better appreciating markets,” said Eric Fox, Veros’ VP of statistical and economic modeling, crediting affordability factors.

Projected Five Strongest Markets
San Diego / Carlsbad / San Marcos, CA +3.5%
Kennewick / Richland / Pasco, WA +3.4%
Pittsburgh, PA +2.7%
Fargo, ND-MN +2.6%
Washington / Arlington / Alexandria, DC-VA-MD-WV +2.5%

Veros also predicts generally good forecasts in Texas, Louisiana, Arkansas, Oklahoma, South Dakota, North Dakota, and Iowa, with a strengthening trend spreading to parts of the Midwest.

Florida; Reno, Nevada; and Boise, Idaho, will see the nation’s greatest depreciation rates in the coming 12 months. Six of the 10 U.S. markets expecting the greatest depreciation are in Florida.

Projected Five Weakest Markets
Reno / Sparks, NV -7.2%
Orlando / Kissimmee, FL -6.5%
Boise City / Nampa, ID -6.4%
Deltona / Daytona Beach / Ormond Beach, FL -6.3%
Port St. Lucie / Fort Pierce, FL -6.3%

“It is noteworthy that depreciating forecasts remain much better than those from a year ago with nothing worse than 7 percent depreciation,” Fox said.

Fox continued, “A year ago, we were seeing some markets with depreciation rates in the double-digit range. So while things aren’t happening rapidly, the forecast indicates they are getting better.”

Source: DSNews

In today's challenging Los Angeles real estate market, selecting the right real estate agent is crucial. It can make all the difference in the world. Whether you're planning on buying, selling, or you just have a question, feel free to call Toni Patillo. We service the Greater Los Angeles, the Westside, Beverly Hills, and more.

Toni Patillo & Associates
Broker Of Record l DRE#0313287
Keller Williams Realty Santa Monica
2701 Ocean Park Blvd., Ste. 140 • Santa Monica, CA 90405
Office (310) 482-2035 • Fax(424) 744-4148