Posts Tagged ‘Lenders & Servicers’

 An Easy Guide to Newspapers (from the Internet, our unparalleled & unimpeachable source of information!)

1.   The Wall Street Journal is read by the people who run the country.

2.   The Washington Post is read by people who think they run the country.

3.   The New York Times is read by people who think they should run the country, and who are very good at crossword puzzles.

4.   USA Today is read by people who think they ought to run the country but don’t really understand The New York Times.  They do, however, like their statistics shown in pie charts.

5.   The Los Angeles Times is read by people who wouldn’t mind running the country, if they could find the time, and if they didn’t have to leave Southern California to do it.

6.   The Boston Globe is read by people whose parents used to run the country and did a poor job of it, thank you very much.

7.   The New York Daily News is read by people who aren’t too sure who’s running the country and don’t really care as long as they can get a seat on the train.

8.   The New York Post is read by people who don’t care who is running the country as long as they do something really scandalous, preferably while intoxicated.

9.   The Miami Herald is read by people who are running another country, but need the baseball scores.

10.  The San Francisco Chronicle is read by people who aren’t sure if there is a country or that anyone is running it; but if so, they oppose all that they stand for.  There are occasional exceptions if the leaders are handicapped, minority, feminist, or atheists who also happen to be illegal aliens from any other country or galaxy, provided of course, that they are not Republicans.

11. The National Enquirer is read by people trapped in line at the grocery store.

12.   The Denver Post is read by people who have recently caught a fish and need something to wrap it in.

Hard Money New State Rankings Report — Annual State Rankings List for 2012, Funded Hard Money Real Estate Loans.

Alternative Lending Magazine, has released the annual hard money state ranking list for 2012. This year’s list features a change in 4 of the top 10 rankings. The list covers total funding statistics including residential, commercial and land transactions.

Mortgage loan origination is up 34% year over year in 2012. Hard Money mortgage loan origination is up 88% year over year. You can see the trend and the need for alternative lending in every single state.

Palo Alto, CA (PRWEB) February 04, 2013

Americans engaged in a staggering 8.6 million mortgage loan originations in 2012. Though still a long way off from the historic level of originations that preceded the mortgage crisis, 2012 was the strongest full year of originations we’ve seen since 2007. Volumes were up approximately 34 percent year over year, with about 8.6 million new loans originated. And, while the majority of these new loans were government-backed – 84 percent in 2012 – the trend over the last four years does suggest a slowly resurgent non-agency market. The largest sub-segment of this non-agency market remaining is the non-bankable portfolio market. By far the largest segment in the non-bankable market is hard money. All estimates and trends show hard money to be as much as 1.8% of all mortgage loan origination in 2012.

A hard money loan (also known as private money) is a specific type of asset-based loan financing secured by the value of a parcel of real estate. Hard money loans are typically issued by private investors or companies. Interest rates are typically higher than conventional loans (such as FHA or FNMA) because of the higher risk. A borrower’s credit or tax returns are not as important as the asset or multiple real estate assets used as security for the investor. Many of these hard money loans close in a matter of days rather then months. Most borrowers are given a term of 1-3 years to pay back the entire loan amount. The particular paperwork differs state by state, but many of these loans follow the same laws and regulations bank do.

The Hard Money State Rankings List for 2012 is compiled through the use of accurate, real-time, internet-based data collected from housing funding sales trends and lender behaviors such as recorded deeds and final closing statements. Alternative Lending Magazine is an expert in the field of hard money funding programs and alternative lending scenario modeling.

Here is Alternative Lending Magazine’s annual Hard Money State Rankings List for 2012:

1. California
2. Texas
3. Florida
4. Illinois
5. Arizona
6. Georgia
7. Ohio
8. Michigan
9. Nevada
10. New Jersey
11. Maryland
12. New York
13. Pennsylvania
14. North Carolina
15. Virginia
16. Tennessee
17. Louisiana
18. Indiana
19. South Carolina
20. Washington
21. Utah
22. Oregon
23. Alabama
24. (Tie) Missouri – Kansas
25. (Tie) Missouri – Kansas
26. Colorado
27. New Mexico
28. Oklahoma
29. West Virginia
30. Arkansas
31. Iowa
32. Wisconsin
33. South Dakota
34. Rhode Island
35. Massachusetts
36. Minnesota
37. North Dakota
38. Wyoming
39. (Tie) Connecticut – Idaho
40. (Tie) Connecticut – Idaho
41. Kentucky
42. Nebraska
43. Vermont
44. Mississippi
45. New Hampshire
46. Montana
47. Hawaii
48. Delaware
49. Maine
50. Alaska

When Judicial and Non-Judicial Lines Blur

Herb Blecher

In January 2010, at the peak of the housing crisis, national mortgage delinquencies topped out at 10.6 percent of all active loans. As we know, conditions have improved significantly since then. As of the end of May 2013, that number was 6.1 percent – representing a 43 percent decline from the peak.

However, as LPS has been reporting for years, there continue to be large differences in distressed inventory resolution between judicial and non-judicial states. The pace of recovery has clearly diverged between the two and is greatest when we specifically focus on those loans in foreclosure.

Even after years of continual improvement in the national foreclosure rate (now down 20 percent from its peak), judicial states still have foreclosure inventories that are more than three times the level of non-judicial states.

Back in January 2010, both judicial and non-judicial delinquency rates peaked at nearly the same level – 10.5 percent and 10.6 percent, respectively. What’s different is how things have progressed since that point.

Ranking the states by total non-current loans (delinquencies and foreclosures combined), we saw that six of the top 10 states at the peak of the crisis were non-judicial. As of May, only three non-judicial states remain on that list, and if we’re looking solely at foreclosure inventory, there’s just one: Nevada.

The root of the divergence is clearly constriction at the end-point of the process. In the last three years, the monthly percentage of inventory that goes to foreclosure sale in non-judicial states has averaged 3.5 times that of judicial states.

However, new legislation and court rulings in various states are exacerbating or overriding the basic judicial vs. non-judicial distinction.

Foreclosure notice and gavel

Consider New York and New Jersey – both judicial states – where foreclosure process requirements and penalties all but brought foreclosure sales to a halt. Since implementing these requirements in 2010, foreclosure sales in New York and New Jersey are 72 percent below what they were in January of that year. And while foreclosure rates in judicial states have declined about 3 percent since then (vs. a 44 percent drop in non-judicial states), New York’s and New Jersey’s have increased by 57 and 42 percent, respectively.

More recently, California, Nevada and Massachusetts – all non-judicial states – have implemented legislation or experienced court rulings that have likewise lowered the rate of foreclosure sales. The result is that these non-judicial states are now behaving more like their judicial counterparts.

The impact of these more recent changes has been less apparent to date. Still, foreclosure sale activity indicates that there is reason to believe that impact is on the horizon:

  • Nevada’s 2012 legislation requiring an affidavit from the lender prior to foreclosure has pushed foreclosure sales down 60 percent.
  • The 2012 Massachusetts Supreme Court ruling requiring lenders to prove ownership at time of foreclosure sale has resulted in an 80 percent drop.
  • California’s Homeowner’s Bill of Rights (implemented in January 2013) resulted in a 35 percent decline in foreclosure sales through Q1.

Clearly these new process changes have altered the previously established dynamic of the broad judicial vs. non-judicial distinction.

In addition to creating additional operational challenges for lenders, this makes assessing the recovery, estimating loan-level losses and evaluating future risk more challenging. Watching for any collateral impacts from these process changes – and tracking any new changes at the state level – will be critical to portfolio risk management in the post-crisis environment.

Herb Blecher
Senior Vice President, LPS Applied Analytics
Lender Processing Services

Delinquency Rate Sees Abrupt Increase in June


After five months of declines, the national mortgage delinquency rate reversed course in June, according to data from Lender Processing Services (LPS).

From May to June, the delinquency rate shot up by 9.9 percent, ending at 6.7 percent, LPS reported. The increased delinquency rate represents the highest level since February of this year. However, prior to February, the delinquency rate is still at its lowest point in over four years.

Additionally, the delinquency rate still posted an annual decrease from last year. Compared to June 2012, the delinquency rate is down by 6.5 percent.

LPS also noted the spike in the delinquency rate is a seasonal phenomenon. Last June, the delinquency rate rose by 3.4 percent.

Foreclosures stayed on track in June, maintaiing both monthly and yedarly decreases. At 2.9 percent, the foreclosure pre-sale inventory rate fell 3.9 percent from May and was down by 28.4 percent from a year ago.

For June, about 4.78 million properties were 30 days or more past due or in foreclosure.

Of that total, 3.32 million were at least 30 days delinquent, but not in foreclosure, while 1.46 million were in foreclosure pre-sale inventory.
LPS’ report also included a ranking of the states with the highest and lowest share of non-current loans (delinquencies and foreclosures).

Florida led with the highest percentage of past due loans, following by Mississippi, New Jersey, New York, and Maine.

The states with the lowest share of unpaid loans were Wyoming, Montana, Alaska, South Dakota, and North Dakota.

15 Cities Where House Flippers Are Making Tons Of Money

for sale sign flag america homeREUTERS/Jonathan Ernst

Real estate investors are getting back in the flipping game, netting an average gross profit of nearly $20,000 on single family home flips in the first half of 2013.

Home flips are up 19% from a year ago and 74% from the first half of 2011, according to a new report from Realtytrac.

“While flipping continues to be profitable in most markets, particularly those where the home price recovery is still nascent and a recent rebound in foreclosure activity allows investors to find distressed inventory at a discount, home flipping is tapering off in markets where fewer of those distressed bargains are available,” Daren Blomquist, vice president at RealtyTrac, said in the statement.

“Flipping was on the rise in more than two-thirds of the markets, including New York, Washington, D.C., Chicago and several Florida metros,” he said.

The average flipper in the following 15 metro areas earned 10% to 82% flipping their homes.

15) Orlando-Kissimmee, FL: 10% Gross Profit

Single Family Flips (first half 2013): 2,417

YoY change: 75%

Average purchase price: $141,192

Average gross profit: $14,394

Gross profit percentage: 10%

Source: Realtytrac

14) New York-Northern New Jersey-Long Island, NY-NJ-PA: 10% Gross Profit

Single Family Flips (first half 2013): 5,485

YoY change: 437%

Average purchase price: $376,224

Average gross profit: $39,458

Gross profit percentage: 10%

Source: Realtytrac

13) Cincinnati-Middletown, OH-KY-IN: 11% Gross Profit

Single Family Flips (first half 2013): 1,191

YoY change: 85%

Average purchase price: $123,938

Average gross profit: $13,996

Gross profit percentage: 11%

Source: Realtytrac

12) Washington-Arlington-Alexandria, DC-VA-MD-WV: 11% Gross Profit

12) Washington-Arlington-Alexandria, DC-VA-MD-WV: 11% Gross Profit

Alex Wong/Getty Images

Single Family Flips (first half 2013): 3,169

YoY change: 108%

Average purchase price: $403,441

Average gross profit: $46,205

Gross profit percentage: 11%

Source: Realtytrac

11) Chicago-Naperville-Joliet, IL-IN-WI: 12% Gross Profit

11) Chicago-Naperville-Joliet, IL-IN-WI: 12% Gross Profit


Single Family Flips (first half 2013): 2,845

YoY change: 86%

Average purchase price: $195,360

Average gross profit: $23,099

Gross profit percentage: 12%

Source: Realtytrac

10) Virginia Beach-Norfolk-Newport News, VA-NC: 13% Gross Profit

Single Family Flips (first half 2013): 542

YoY change: 14%

Average purchase price: $206,765

Average gross profit: $26,565

Gross profit percentage: 13%

Source: Realtytrac

9) Charleston-North Charleston, SC: 13% Gross Profit

Single Family Flips (first half 2013): 551

YoY change: 97%

Average purchase price: $229,813

Average gross profit: $29,850

Gross profit percentage: 13%

Source: Realtytrac

8) Jacksonville, FL: 16% Gross Profit

Single Family Flips (first half 2013): 1,823

YoY change: 260%

Average purchase price: $133,968

Average gross profit: $21,326

Gross profit percentage: 16%

Source: Realtytrac

7) Cape Coral-Fort Myers, FL: 17% Gross Profit

Single Family Flips (first half 2013): 1,401

YoY change: 14%

Average purchase price: $134,644

Average gross profit: $22,524

Gross profit percentage: 17%

Source: Realtytrac

6) Port St. Lucie, FL: 17% Gross Profit

6) Port St. Lucie, FL: 17% Gross Profit

Single Family Flips (first half 2013): 1,001

YoY change: 105%

Average purchase price: $105,824

Average gross profit: $18,433

Gross profit percentage: 17%

Source: Realtytrac

5) Tampa-St. Petersburg-Clearwater, FL: 23% Gross Profit

Single Family Flips (first half 2013): 2,673

YoY change: 32%

Average purchase price: $102,193

Average gross profit: $23,446

Gross profit percentage: 23%

Source: Realtytrac

4) Pittsburgh, PA: 32% Gross Profit

Single Family Flips (first half 2013): 617

YoY change: 79%

Average purchase price: $114,355

Average gross profit: $36,537

Gross profit percentage: 32%

Source: Realtytrac

3) Palm Coast, FL: 34% Gross Profit

3) Palm Coast, FL: 34% Gross Profit

AP Photo/Chris O’Meara

Single Family Flips (first half 2013): 528

YoY change: 267%

Average purchase price: $127,896

Average gross profit: $43,721

Gross profit percentage: 34%

Source: Realtytrac

2) Omaha-Council Bluffs, NE-IA: 56% Gross Profit

2) Omaha-Council Bluffs, NE-IA: 56% Gross Profit

Single Family Flips (first half 2013): 2,662

YoY change: 329%

Average purchase price: $153,617

Average gross profit: $85,537

Gross profit percentage: 56%

Source: Realtytrac

1) Deltona-Daytona Beach-Ormond Beach, FL: 82% Gross Profit

1) Deltona-Daytona Beach-Ormond Beach, FL: 82% Gross Profit

Single Family Flips (first half 2013): 729

YoY change: 111%

Average purchase price: $62,826

Average gross profit: $51,657

Gross profit percentage: 82%

Source: Realtytrac

What about this struggling city?

What about this struggling city?



Survey: Current Homeowners Increase Purchases, Investors Exit Market


Current homeowners are playing a bigger role as housing market participants amid a sharp slowdown in investor activity, according to data from the Campbell/Inside Mortgage Finance HousingPulse Tracking survey.

Among three buyer types-current homeowner, first-time homebuyer, and investor-the survey showed current homeowners were the only group to see activity rise in June.

Last month, current homeowners represented 44.6 percent of the purchase market, up from 43.8 percent in May based on a three-month moving average.

At the same time, the share for first-time homebuyers fell to 35.7 percent from 36 percent month-over-month.

Even more notable was the decrease in investor purchases. As rising home prices discourage investors, HousePulse found home purchases from investors slipped to 19.7 percent, down significantly from 23.1 percent from February. The percentage also represents the lowest level since September 2012.

Falling in line with the decrease in investor activity was a drop in the supply of distressed properties.

According to HousingPulse, the share of foreclosure or short sales transactions plummeted year-over-year, falling to 28.2 percent from 40.3 percent in June 2012. The percentage represents the lowest level in at least three and half years.

The HousingPulse survey also revealed investor traffic decreased for the fourth straight month in June.

Agents across the United States also offered insight into investor activity, with one Arizona agent stating, “Investors have left our market with rising house prices,”

In California, one agent reported, “Values have increased by 20% since January and investors are backing away.”

The survey includes about 2,000 real estate agents nationwide.

The Market’s Cooling

The boom came on so fast and so strong this year that it was scary. Buyers this spring were like a bear that had hibernated for six years and finally woke up famished, eating everything in sight. Prices shot up at unsustainable rates.

Median Price per Square Foot

That has begun to change. In the last 60 days, mortgage rates jumped from 3.4% to 4.5%. By the end of June, prices had risen 18.7% over last year, which really can’t happen two years in a row. Rising prices and rising rates combined to increase the mortgage payment for a home by 33%.

Interest Rate Graph

And this has now given buyers a moment of pause. The market may keep rising but it will be at a more modest pace than we saw this spring; in some places prices will go up and down this winter.

The number of homes for sale has been increasing since April, which is also when bidding wars began to ease. Over the last seven days, the number of Redfin customers signing offers has declined by 25% from the average weekly rate in June. At the same time, 9% more people contacted us for the first time, so the changing market is still drawing buyers into the market, not just scaring them away.

Tales of Joy and Woe

How fast has the market shifted in buyers favor? Well here are a few examples:

  • In Washington DC, listing agents at other brokerages called last week to sayour agents forgot to include an escalator clause in the offer, promising more money in a bidding war. We said no, we didn’t forget: this is our final offer.
  • In LA, Redfin agent John Venti won three straight offers last weekend with no counter-offers or competition. “That hasn’t happened,” he said, “since December 2011.”

But not everything has changed. Almost 70% of sales are still a bidding war.

  • In Boston, when Redfin agent Sandy Rosen lost out on a bidding war for a $600,000 Sudbury home, we stayed in touch with the listing agent. After negotiations over repairs stalled, the listing agent called us back and we snatched the deal away from the initial buyer.
  • In the Bay Area, where homes are selling for hundreds of thousands above the asking price, we’ve been winning deals not with the highest bid, but by promising the seller we’ve got enough cash to make up for any shortfall in the appraisal. Redfin’s Jess Williams just beat out 28 other offers using this tactic on a $700,000 San Francisco listing.

The Return to Normalcy

Are we worried that the market is cooling? No. We were worried back in April, whenwe warned against a frothy market:

And there’s one change that is about to come: rates will rise. In our survey of 1,100 home-buyers, 58% cited “low interest rates” as a primary reason for buying now, but mortgage bankers now expect rates to rise from 3.5% to 4.5% over the next year. When that happens, the frothiest markets could be in for a setback.

Buyers are still out in force, with inventory down 19% from last year, rates still 2 points below historical norms, and prices 26% south of their 2006 peak.

What has happened after six years of depression, and six months of manic bubbliness, is that we have returned at last to a normal market: you’ll pay more now than you would have at the absolute bottom in late 2012, but there will be more — and better — homes to choose from, and a better chance of buying one.

That sounds like a good deal to us. What’s your take on the market? Just leave a comment on our blog or on Facebook.

Best, Glenn

Glenn Kelman | CEO, Redfin