Tuesday, April 9, 2013


"Is Housing Really Recovering, or Not?

Here are some sobering thoughts from the midst of a perceived housing recovery:
• Only 30% of home sales are coming from first-time buyers? This is the group that should dominate home sales, especially now that the echo boom generation is starting to enter into the market.
• In many markets including Tampa, Miami, and other parts of the country, most of the sales they see are for cash. And internationally, in many of the most booming cities, like Miami, New York, San Francisco, Vancouver, London or Sydney, a large number of sales are to foreign buyers.
• To qualify for an FHA or government-sponsored loan, which comprises most of the loans these days, you have to bring a foreclosed home up to code, which costs $15,000 on average.
• The typical young family, most likely burdened with recently acquired student loan debt, can't afford to buy a home for cash, put $15,000 into it to repair it, and then get a loan for it. Speculators can though. And that’s exactly what they're doing.
• Nearly 25% of home mortgages are still underwater, even though we've had this "rebound." We have gone from 30%, at worst, to near 25%. Not particularly great progress.
• Things are much worse in states like Nevada, which has the highest rate of mortgages underwater at 52%. In Florida, 40% of mortgages are underwater. In Arizona that number is 35%. Georgia 34%. Michigan 32%. Illinois 28%.
• The most underwater major cities include Tampa at 44%. Miami's at 41%. Atlanta 38%. Phoenix 37%. Riverside 36%. Detroit 35%. Chicago 33%.
• 92 million baby boomers will die between 2012 and 2042, creating a massive supply of homes on the market. This will overwhelm the demand for homes from the rising echo boomers for decades to come.
• The mortgage refinance market share is expected to drop dramatically in the coming years, making up only 52% of mortgage originations in the fourth quarter of 2013 and 33% in the fourth quarter of 2014, the report states. First-time home purchases are attempting to pick up the slack in refinances, but even with the modest anticipated growth, mortgage originations are predicted to drop.
• "We expect economic growth to come in at 2.1% in 2013, as strength in the housing market and business investment will help to offset fiscal tightening," said an economic and strategic report from Fannie Mae. "Tax increases will restrain activity in the first half of the year, but we expect growth to pick up in the second half." 

From Utah Association of Mortgage Professionals

Settlement fraud

"Florida received more than $330 million as part of a multi-state foreclosure fraud settlement with the nation’s biggest banks. Other states have used their share of the dollars to plug budget holes, and they’ve been criticized for not spending the money on housing-related issues. That’s not the case in Florida. Still, as the legislature works to craft a budget, some lawmakers worry their colleagues may be tempted to spend the money in other ways."

How does a settlement get reached for wrongful foreclosure on Americans and then state governments can use the money willy-nilly? Who's driving???