Michigan Ranks 5th in the U.S. in Foreclosures

Nevada leads the nation in percentage of foreclosed homes, but California records a massive 92,326 foreclosures!

In a recently released report, Michigan ranked 5th in foreclosures, based on the percentage of homes in foreclosure to non-foreclosed homes. In quantity alone, Michigan ranked 4th. Here is the breakdown:

#1 is Nevada with a ratio of 1 out of every 62 homes in foreclosure (17,902 total foreclosures

#2 is Florida with 1 out of every 140 homes in foreclosure (a whopping 62,401 total foreclosures)

#3 is California with 1 out of 144 homes in foreclosure (a massive 92,326 total foreclosures.

#4 is Arizona with 1 out of 150 homes in foreclosure (17,807 total foreclosures)

#5 is Michigan with 1 out of 234 homes in foreclosure (19,359 total foreclosures)

Believe it or not, many of these states have shown improvement in August over July, as some of the government & lender initiatives have helped cut this down.

What is your feeling or experience on the foreclosure crisis? Let us know.

12% of eligible borrowers helped by Obama plan

Almost 125,000 more people in program this month over July.

Mortgage lenders have placed 12% of troubled borrowers, or 360,165 people, into the government sponsored mortgage help program that started in February. This number is up from 235,247 last month, as lenders continue to accelerate their efforts to save homes from foreclosure.

Although the program did start off slow, it has gained ground in the past few months as mortgage companies are facing a wave of new foreclosures. Banks lose far less money by reducing or restructuring an existing loan than by placing a customer into foreclosure, so there is a definite advantage for banks to participate.

Some banks, however, are participating at varying degrees. Here is a breakdown of the top participating major lenders:

Saxon Mortgage Group: 39%
Nationstar Mortgage: 30%
GMAC Mortgage: 26%
JPMorgan Chase: 25%
Citi Mortgage: 23%
Wells Fargo: 11%
Bank of America: 7%

If you have any stories about receiving mortgage relief, please share them by posting a comment on this blog or email: info@erareardonrealty.com

Thanks!

Michigan Ranks 9th in the U.S. in Number of "1st Time Homebuyer Tax Credits" claimed so far

As of August 31st, Michigan ranked #9 in the U.S. in the number of tax credits claimed so far with 9,237. This number is made up of people who have closed on a qualifying home purchase this year and filed an amended 2008 tax return. Here are a list of the top 10 states:

California - 42,304
Texas - 29,536
Florida - 29,132
Georgia - 11,109
Pennsylvania - 10,250
Illinois - 9,918
Arizona - 9,357
North Carolina - 9,355
Michigan - 9,237
Ohio - 9,172

Pending home sales hit 6th straight increase

Index jumps by 3.2% in July, beating estimates and marking its longest streak on monthly increases on record.

Pending sales of existing of homes jumped up 3.2% in July, fueled by a combination of low interest rates, moderate home prices, foreclosure sales & the $8,000 tax credit. Good news for everyone!

Locally in Jackson County, sales of existing homes were reported to have risen 18% in the first half of the year over the same period in 2008.

Although the economic climate remains tough, there are signs of life! Foe every home sold, especially a foreclosure, that is a happy new homeowner filling a vacant home!

Pending Home Sales Rise for the Fifth Consecutive Month

According to the National Association of Realtors, pending home sales rose in June by 3.6% over May. The increase marks the fifth straight month that pending sales have increased. The last time sales posted five consecutive monthly gains was July 2003!

The combination of reduced home prices, low interest rates & the $8,000 Tax Credit have spurred people to buy up plenty of good values. In the Midwest specifically, sales are up 11.6% over a year ago, driven mainly by excellent values.

While many of these sales may be on distressed properties & foreclosures, that is actually a good thing! Owner occupied homes raise property values & the buying of foreclosures thins out the glut of housing inventory that has kept prices down all year.

Turn-around? We hope so!

New Bills Introduced to extend/change "Homebuyer Tax Credit"

Several new bills have been introduced in both Congress & the House of Representatives that would both extend the current $8,000 tax credit AND make it available to all buyers, not just "first-time" home buyers. This is big news & I will try to keep you posted on the progress of these bills. This just confirms that it will continue to be a great time to buy Real Estate for the next few years!

Matt

The verdict: "Hope for Homeowners" plan starting to get traction..

As we discussed last month, President Obama's "Hope for Homeowners" plan started out as a huge disappointment, mainly because of banks unwillingness to participate. After some tweaks, the new stats are starting to trickle in. More than 55,000 troubled homeowners have received loan modification offers under President Obama's foreclosure prevention program trough mid-May.

The administration also announced it was expanding the $75 billion program to assist more troubled borrowers. The government will provide incentives for servicers and borrowers to avoid foreclosure using methods such as short sales.

Servicers have also mailed more than 300,000 letters to homeowners who might be able to get modifications, the administration said. Mortgage holders who live in their homes and have loans of no more than $729,750 originated before Jan. 1 are eligible. Also, they must be in default or at risk of default for a reason such as a significant change in income or expenses.

Let's "Hope" that this program continues to save the homes of Americans, even your friends & neighbors!

Matt

Existing Home Sales for April Up 2.9%

It was reported today that sales of previously occupied homes rose modestly from March to April as buyers took advantage of prices that were 15.4 percent below year-ago levels.

The National Association of Realtors said Wednesday that home sales rose 2.9 percent to an annual rate of 4.68 million last month, from a downwardly revised pace of 4.55 million in March.

The results slightly beat economists' forecasts. Sales had been expected to rise to an annual pace of 4.66 million units, according to Thomson Reuters.

This is encouraging news! The buying market continues to get better as investors & residential buyers drive the market forward. This trend will need to continue in order to use up some of the excess inventory that is keeping prices down. There is currently a 10-month inventory nationwide of existing homes for sale, which means prices will continue to slide until that inventory is reduced.

What do you think? Is the market headed for a rebound, or is this just an anomily?

Matt

New survey says 75% of people think it is a good time to buy a home!

According to a new Pew Research Center survey completed this Spring, 75% of people surveyed indicated it was either a "good" or "very good" time to  buy a home! Here is the breakdown of responses:

Very Good - 18%

Good - 57%

Bad - 17%

Very Bad - 4%

As with any survey there is some margin of error, but this is sure a change in sentiment from say....last year! Overall, the public is upbeat about buying a home in the current economic climate.  This is good news and most likely the first part of the economic recovery for our country.

What do you think? A good time to buy or not?

Matt

New Hope for "Hope for Homeowners" Program?

The "Hope for Homeowners" plan that took effect on October 1st of last year has been a HUGE disappointment to say the least. It was, in effect, a voluntary program for lenders to "write-down" mortgages (forgive part of the debt) and help keep people in their homes. The mortgage industry and the banks that are effected apparently were feeling bitter and not wanting to "volunteer" anything to delinquent borrowers. In fact, only 1 family was proven to have been helped by this bill....big surprise!

On May 20th, president Obama signed an improvement to this bill. It lowers the amount that banks need to "write-down", and it also offers lenders $1,000 for each loan it amends. While this is not startling, it is progress, and we need all the progress available to help the millions of families effected by the foreclosure crisis. Will it be enough to get banks off the sidelines and into the game of saving family homes? Will banks have the foresight to just take a small loss upfront instead of the huge cost of foreclosure? We will see.

My view is....more needs to be done. I will keep you posted as the results come in.

Matt

Fed anounces expanded help to stem foreclosures

The Obama administration on Thursday outlined an expansion of its housing rescue plan that will help homeowners who face foreclosure because they are ineligible for current assistance programs.
Federal officials also provided a report card of sorts on how the home loan modification and refinancing efforts are going since the housing rescue plan was announced in February.

The expanded program includes:

• Foreclosure alternatives. Homeowners unable to qualify for a modification will see a more streamlined process for pursuing short sales and deeds-in-lieu of foreclosures, which transfer a home back to the lender. The goal is to help homeowners avoid a foreclosure that could lead to a severe hit on their credit score.

A short sale is when a home is sold for less than the amount of its remaining mortgage, but lenders agree to consider the debt paid. Lenders would be eligible to receive a federal financial incentive of up to $1,000 if they permit a home to be sold via short sale.

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• Protections for homeowners whose home value has fallen. Under a $10 billion program, new incentives will be provided to lenders to help them make modifications in areas undergoing steep drops in home prices. These incentives will help cover lenders' financial loss.

"If a modification is not possible, we are also announcing steps to encourage the quick private sale or voluntary transfer of property, which will save homeowners money and protect their financial future," Treasury Secretary Tim Geithner said at a press conference.

Since the administration's housing rescue plan was announced, more than 1 million Americans have refinanced.

Mortgage giant Fannie Mae has put more than 233,000 eligible refinance applications through its refinancing program. More than 55,000 loan modifications have been extended to qualifying borrowers.

Fourteen servicers have now signed contracts and begun modifications. These participants account for more than 75% of all loans in the country.

The Obama administration has said it expects up to 9 million homeowners to get help through mortgage refinancing and loan modifications.

But the very complexity of the program has made for a slow start and done little to dampen foreclosures, which have risen as banks ended temporary foreclosure moratoriums. The number of households facing foreclosure rose 32% in April compared with the same month a year earlier, according to RealtyTrac.

"It's been slow. The foreclosure problem is not going away," says Mark Zandi, with Moody's Economy.com. "But I'm hopeful that there will be more modifications taking off this summer and fall. If not, home prices will slide away."

The concern is that mounting foreclosures will depress prices further, causing more homeowners with conventional mortgages to owe more than the homes are worth. That raises the likelihood of more conventional loan holders defaulting.

The rescue program has taken off slowly in part because of its complexity — homeowners seeking a modification, for example, must verify income and write a letter explaining their financial need in seeking a mortgage change.

U.S. mortgage applications climb, rates at fresh low

U.S. mortgage rates set fresh record lows last week, fostering demand for refinancing that drove home loan applications to the highest level since mid-January, data from the Mortgage Bankers Association showed on Wednesday.

The pace of the rise ebbed from the prior three weeks, when homeowners in droves raced to refinance as average 30-year mortgage rates sank by a half percentage point. Last week, however, the rate dipped by just 0.02 point to 4.61 percent.

All eyes are on the housing market to see how soon a spate of government interventions stabilizes the deepest slump since the Great Depression, and thus energizes the U.S. economy.

Lansing/East Lansing Area ranked #1 most affordable metro area in the US by CNBC!

CNBC, citing information from the Wells Fargo Housing Opportunity Index has named the Lansing/East Lansing Area as the #1 "Most Affordable Metro Area" in the US! The ranking was based on the area having a median home price of $85,000 compared to a Median Family Income of $62,700. This gives the area a 95% share of affordable homes. There were 3 other metro area in Michigan that were included: Battle Creek, Bay City and Saginaw Township. The remainder of the top 10 were all in the Northeast (Ohio, Indiana & New York).

This is a very positive sign for Michigan's housing market! Afordable housing is a key factor in attracting new families to the state. Although Jackson wasn't included in the survey due to in's smaller size, I am sure it would have ranked very high!

What are your thoughts?

Mortgage rates turn lower this week

30-year-fixed average at 5.03 percent, falling from from 5.15 last week

Rates on 30-year-fixed mortgages declined this week amid reports of a weakening job market and easing concerns over inflation, Freddie Mac said Thursday.

The average rate on a 30-year fixed mortgage slipped to 5.03 percent this week from 5.15 percent last week. A year ago, the 30-year fixed-rate mortgage averaged 6.13 percent.

"Mortgage rates had room to ease this week following news of a weaker jobs market, which may slow consumer spending and keep inflation at bay," said Frank Nothaft, Freddie Mac's chief economist.

Last week, initial jobless claims totaled 645,000. Thursday, the Labor Department said the figure climbed to 654,000, while the number of people receiving benefits for more than a week increased by 193,000 to 5.3 million — the most on records dating back to 1967.

Average rates for 30-year-fixed-rate mortgages hit a record low of 4.96 percent in January, a decline attributed to the Federal Reserve's move to buy $500 billion in mortgage-backed securities to spur lending by banks.

"Given the recent historically low mortgage rates, homeowners have a strong incentive to try and refinance," Nothaft said.

This week's average rate on a 15-year fixed-rate mortgage fell to 4.64 percent from 4.72 last week. Last year at this time, the 15-year rate averaged 5.60 percent.

Average rates on five-year, adjustable-rate mortgages declined to 4.99 percent from 5.08 percent last week. Rates on one-year, adjustable-rate mortgages fell to 4.80 percent from 4.86 percent last week.

The rates do not include add-on fees known as points. The nationwide fee averaged 0.7 point for 30-year and 15-year fixed-rate mortgages. The fee for five-year adjustable-rate mortgages averaged 0.6 point and 0.5 point for one-year adjustable-rate mortgages.

Mortgage finance companies Fannie Mae and Freddie Mac, which were seized by the federal government in September 2008, own or guarantee almost 31 million home loans worth about $5.5 trillion. That's more than half of all U.S home mortgages.

City of Jackson to receive about $1.8 million in stimulus funds for neighborhoods, homelessness prevention

This article came from the Cit Pat, thought you would find it refreshing to get some great community news!

Jackson is expected to get $1.8 million in funding for community development and aid to the poor through the recently passed economic recovery package, U.S. Rep. Mark Schauer said Thursday.

It is the first wave of stimulus funding to be announced for local efforts.

"This funding is just the first step in putting recovery dollars to work quickly, and it will offer a much-needed boost to communities across our area," Schauer, D-Battle Creek, said in a written statement.

The city of Jackson will get $371,955 in Community Development Block Grant funds, $889,894 will go to the Jackson Housing Commission and $568,942 will go toward homelessness prevention.

Stimulus Bill Passed: How will it effect you?

Here are a few of the high level details form the recently passed Economic Stimulus Bill:

-Each eligible worker would get a credit of 6.2% of earned income up to a maximum credit of $400 ($800 for a two earner couple). This essentially equates to $12-$20 extra per paycheck. This is available to anyone who earns less than $95K per year and $190K for couples.

-First time homebuyers or homebuyers that haven’t bought a home in the past three years would receive an $8,000 tax credit for a principal residence purchased through November 30th 2009. This credit phases out for individuals with adjusted gross incomes between $75K to $95K and $150K to $170K for joint filers. This credit has to be repaid if you sell your home within 36 months.

-The credit within the federal alternative minimum tax (AMT) calculation is slightly increased for the 2009 tax year, which will reduce the amount of taxpayers subject to the AMT (Due to the tax structure in Maine, Mainer’s tend to be more susceptible to this tax).

-The first $2,400 of unemployment tax benefits will not be subject to federal income taxes.

-Taxpayers will be allowed to take an above the line deduction from income tax the state and local sales tax paid on a new car. The purchase limit is $49.5K and is applicable through the end of the year. (Although not usually applicable for Mainers, people who claim the itemized sales tax deduction already would not be eligible to claim this). This deduction phases out for individuals with adjusted gross incomes in between $125K to $135K and $250K to $260K for those married filing jointly.

-For workers laid off between 9/1/2008 and 12/31/2009, the cost of maintaining extended coverage through their former employer will be reduced by 65% for nine months. This benefit is available for participants that have income that exceeds $125K and $250K for those who are married and file jointly. Those who meet the eligible time frame but initially rejected coverage will get a second chance to re-apply for benefits.

-The Hope Credit available for college costs will be replaced by the American Opportunity Tax Credit which is a partially refundable credit of up to $2,500 that covers fours year’s worth of college. This is available through 2010 and then the Hope Credit would reinstate after that. In addition, Pell Grants aid awards increase by $500.

-Qualified 529 distributions now allow the cost of a computer as a qualified expense where this was not allowed unless the college required students to have a computer.

-Social Security recipients who don’t qualify for tax credits because they don’t work would get one time $250 payments.

-Energy efficient home improvement credit provisions are extended through 2010.

-Increased earned income tax credit for families with three or more children and additional marriage penalty relief

This only goes into the personal finance issues, but there are also provisions within the legislation that could possibly benefit business owners as well. As always, consult your tax advisor to get additional details on each. With the tax season in full swing, this is a good opportunity to discuss these provisions on how they may be able to help you!

Pending home sales post increase of 6.3 pct

WASHINGTON – The National Association of Realtors says pending U.S. home sales rebounded in December, as buyers snapped up properties at deep discounts, especially in the South and Midwest.

The trade group said Tuesday its seasonally adjusted index of pending sales for preowned homes for December rose 6.3 percent to 87.7 from an upwardly revised November reading of 82.5. That's better than the 82.3 reading economists expected, according to a survey by Thomson Reuters.

The reading also was up 2.1 percent from December 2007.

The index tracks signed contracts to purchase existing homes. Typically there is a one- to two-month lag between a contract and a done deal. Home sales that were pending in December are likely to be completed in the coming weeks.

Foreclosure Filing Down in Jackson County

According to figures provided by the Jackson County Registrar of Deeds, Mindy Reilly, the number of Sheriff's Deeds being filed is trending down! A piece of good news in a pretty volatile housing industry.

The numbers:

Filings for the first 6 months of 2008 = 714

Filings for the last 6 months of 2008 = 538 **A drop of around 25%!**

Filings for December 2007 = 105

Filings for December 2008 - 45 **A drop of almost 59%!**


The reasons for the drop-off could be related to several factors:

1. Some mortgage companies have suspended foreclosures temporarily so they can work with homeowners on avoiding foreclosure.

2. Some mortgage companies have stepped up their efforts to reach out to homeowners and re-structure their loans.

3. It is possible that the bulk of the "predatory" loans that have been so prevalent the past few years are working out of the system.

Whatever the cause, it is good news. Fewer foreclosures means more homeowners, less vacant homes and maybe the start of a recovery for Jackson!

What are your thoughts?