The nonprofit group, which helps distressed homeowners through the group’s HOPE hotline, says the number of mortgage foreclosure scams grew nearly 60 percent in 2012. The scammers, they say, are able to capitalize on the hype surrounding homeownership preservation as federal programs are being modified to help more and more borrowers.

HPF said it’s unknown whether all of the reported instances were truly fraudulent, but the agency still forwarded all of the complaints to the appropriate regulators and law enforcement agencies.

About half of the scams involve an attorney or individual claiming they can offer special legal services to distressed borrowers. HPF says, in fact, the services they offered are already provided by nonprofits for free.

HPF put out a warning nationwide, saying no one searching for a home-saving remedy should pay upfront fees to a firm offering assistance.

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Investment-home sales surged an extraordinary 64.5 percent to 1.23 million last year from 749,000 in 2010.

Investment sales jumped to 27 percent in 2011 from 17 percent in 2010.

“During the past year investors have been swooping into the market to take advantage of bargain home prices,” said NAR Chief Economist Lawrence Yun. “Rising rental income easily beat cash sitting in banks as an added inducement. In addition, 41 percent of investment buyers purchased more than one property.”

The median investment-home price was $100,000 in 2011, up 6.4 percent from $94,000 in 2010.

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Concerns about strategic defaults were also reflected in response to a question about the consumer payment hierarchy. When asked if the current generation of homeowners considers their mortgage to be their most important credit obligation, 49 percent of bankers said NO and 29 percent said YES.

Although concerns remain regarding strategic defaults, other signs point to growing stability in the housing market. More respondents (26 percent) expected delinquencies on mortgages to decline in the coming months than at any previous time in the two years FICO has been conducting this survey. Furthermore, 53 percent of respondents said the housing market would improve by the end of 2012, compared with 24 percent who said the market would deteriorate.

More than half of survey respondents expected the supply of credit for residential mortgages to fall short of demand over the next six months. A similar majority (53 percent) expected the supply of credit for mortgage refinancing to fall short of demand, indicating that lenders remain cautious about the risks in the real estate market.

Article was reprinted with permission from the Calif Assoc of Realtors. 

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The answer has never been clearer: Buy.

In 98 of the top 100 housing markets, buying a home is more affordable than renting, according to the online real estate company Trulia. Only Honolulu and San Francisco buck the trend.

There are several reasons. Home prices are falling. Mortgage interest rates are at historically low levels. And rents are on the rise.

Of course, many renters are not in a position to buy. For one, it’s hard to get a
mortgage these days, despite low rates. And paying rent can push them further away from being able to afford to buy, “Rising rents make it harder for people to save for a down payment, which is the biggest barrier to buying a home that aspiring homeowners face,” Jed Kolko, Trulia’s chief economist.

The nation’s cheapest buyer’s market is Detroit, where purchasing is only 3.7 times more expensive than renting.

Other top five metro areas where buying is much better than renting are Oklahoma City, Dayton, Ohio,Warren, Mich. and Toledo, Ohio.

In San Francisco, for example, studio and one-bedroom apartments sell for 13.1 times rent, while three bedrooms or larger sell for more than 18 times rent.

“People will pay more for a home if they expect prices to rise and give them a better return on their investment,” said Kolko.

According to Ken H. Johnson, a professor of real estate at Florida International who has studied the buy-vs-rent question extensively.
He believes home prices nationally have bottomed.”The ship has turned,” he said.
“Markets should slowly start to recover. Housing will return to its traditional
role of a safety investment.”

If so, that adds an incentive to buy. And investing in many of the most expensive markets may be even safer.

Kolko pointed out that places like Honolulu, San Francisco and Boston have strong long-term growth prospects. They also have little physical space to grow, a factor that tends to keep prices strong.

 The above information was obtained by the Calif. Assco. of  Realtors & CNN Money.

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Five years after the housing bubble burst, America’s wealthiest families are now losing their homes to foreclosure at a faster rate than the rest of the country — and many of them are doing so voluntarily.

Last year over 36,000 homes valued at $1 million or more were foreclosed on, or at least in default, according to data compiled by RealtyTrac, which tracks foreclosures. While that’s still a low percentage of all foreclosures, it is growing.

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WASHINGTON — The Federal Reserve signaled Wednesday that a full economic recovery could take nearly three more years, and it went further than ever to assure consumers and businesses that they will be able to borrow cheaply well into the future.

The central bank said it would probably not increase its benchmark interest rate until late 2014 at the earliest — a year and a half later than it had previously said.

The new timetable showed the Fed is concerned that the recovery remains stubbornly slow. But it also thinks inflation will stay tame enough for rates to remain at record lows without igniting price increases.

Chairman Ben Bernanke cautioned that late 2014 is merely its “best guess.” The Fed can shift that plan if the economic picture changes. But he cast doubt on whether that would be necessary.

“Unless there is a substantial strengthening of the economy in the near term, it’s a pretty good guess we will be keeping rates low for some time,” he said.

The Fed has kept its key rate at a record low near zero for about three years. Its new time frame suggests the rate will stay there for roughly an additional three years.

The bank’s tepid outlook also suggests it’s prepared to do more to help the economy. One possibility is a third bond-buying program that would seek to further drive down rates on mortgages and other loans to embolden consumers and businesses to borrow and spend more.

Information obtained from the Calif. Asso. of Realtors with permission.

Article printed in the Mercury News and A.P.  Jan. 25,  2012.

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• Insufficient income: Lenders want to be sure borrowers can afford to make the mortgage payments. Lenders typically look for at least a two-year track record of income, which could hurt those who have changed jobs recently.
• Cloudy financial picture: Generally, total debt payments, including the mortgage, cannot exceed 45 to 50 percent of a borrower’s adjusted gross monthly income. Overtime and bonuses are included only if the borrower has worked for the same employer at least two years, and has a history of receiving them.
• Poor credit: Lenders typically reject applicants with FICO scores below 620.
• Low appraisal: One of the predominant reasons buyers are turned down for home loans is because the appraisal on the property is too low.
• Property problems: Sometimes issues turn up within a house, like a major repair or safety issue that needs to be addressed, before an application can be approved.
• Information mix-ups: Approximately 12 percent of new mortgage applications were denied because of unverifiable information or incomplete credit applications, according to the Federal Financial Institutions Examination Council.

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Every initiative to stem the tide of misery has fallen short in the face of continued economic gloom.

Over the next few weeks, several initiatives aimed at reforming the foreclosure process, holding mortgage lenders and services accountable for their past abuses, and creating more effective mortgage workouts are coming to a head.

Typically, banks and other lenders retained almost no financial interest in the mortgages they originated, other than the duty to service them — collect payments and pursue delinquent borrowers, say — for which they received a fee.

Several drawbacks to that system emerged when the housing economy crashed. Because the loans weren’t going to stay on their books, the lenders hadn’t been too careful about whom they lent to and on what terms.

Perhaps the biggest problem is that although the servicers, which include huge banks such as Bank of America and Wells Fargo, are burdened with the responsibility to renegotiate mortgages to keep borrowers out of foreclosure, their authority to do so on behalf of investors is murky.

As a result, though the investor, the borrower and the economy in general benefit if a home is kept out of foreclosure, even if that means its owner makes lower payments than were required by the original mortgage, the servicing banks are leery of renegotiating too aggressively.

The most closely followed remedial effort involves the 50 state attorneys general under the leadership of Iowa Atty. Gen. Tom Miller.

Last March, the group produced propsal for foreclosure reforms that drew fire from some consumer advocates for being too lenient — its provisions include mandates that banks comply with state law in dealing with borrowers, as if that’s a novel concept — and from business interests for putting too much pressure on banks to reduce principal balances for homeowners having trouble keeping up payments on homes with values that have fallen below the mortgage balance.

Information obtained by the Calif. Asso of Realtors & the L.A. Times. For the whole story: http://articles.latimes.com/2011/aug/14/business/la-fi-hiltzik-20110814

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According to an email from Bank of America, conventional loans that exceed the permanent loan limits will now be required to use non-conforming programs.

Barring Congressional action, the maximum FHA, Fannie Mae, and Freddie Mac conforming loan limit will decline to $625,500 beginning Oct. 1, 2011, from the current $729,750 limit, though the majority of counties will fall far below the $625,500 maximum.  The conforming loan limit determines the maximum size of a mortgage that FHA, Fannie Mae, and Freddie Mac government-sponsored enterprises (GSEs) can buy or guarantee.

Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan and require a higher down payment, increasing the monthly payment and negatively impacting housing affordability for California home buyers.

This information was obtained from the Calif. Asso. of Realtors, and used with permission.

If the County Supervisors accept the the staff recommendation of including a Residential Energy Conservation Ordinance (RECO) in the CCAP, all homes being sold in Castro Valley, San Lorenzo, Fairview, Sunol and the rest of unincorporated Alameda County would be subject to energy retrofits at the time of sale.

The Alameda County Board of Supervisors will review the draft CCAP at a meeting on May 17.