Archive for November, 2010
At an oceanfront Miami Beach condo Monday, with tourists splashing and dining a block away, a routine eviction process turned deadly.
Shot to death: an admired, hard-working day laborer.
Injured: a Miami-Dade police officer serving the notice and a furniture mover who came to assist.
Also injured: the unidentified suspect, who was shot by police and was in Jackson Memorial Hospital late Monday….
The unit was sold at public auction and an eviction notice was served on Oct. 26, records show.
Cash was the top source of financing home purchases in September, as more homeowners look to deleverage their debt. According to a recent Campbell/Inside Mortgage Finance survey, 30.5% of home purchases during the month were financed with cash, up from 24.4% in January.
The survey attributed this jump to the amount of distressed properties on the market being purchased and a decrease in the number of first-time homebuyers. Distressed properties are more likely to be bought with cash because they are at a lower valuation and don't require as much financing, and first-time homebuyers do not typically have enough cash on hand to buy homes without financing.
As of September, real estate-owned and short sale transactions accounted for 47.5% of market purchases, according to the Federal Reserve Bank of Cleveland. First-time homebuyers accounted for 34.4% of purchases, down from 42.4% in June.
Homeowners are also deleveraging mortgage debt by reducing their loan-to-value ratios and loan maturity terms.
"Loan-to-value ratios have steadily declined since they peaked, falling 680 basis points for existing homes and 520 basis points for new homes," the Fed said.
As of September, the average term to maturity of all loans closed was 27.6 years, down from 29.6 years in June 2007.
The Cleveland Fed said homeowners desire to deleverage debt is driving down the mortgage obligation ratio, which measures the outstanding value of a mortgage as a percent of a borrower disposable income. The ratio peaked in 2007 at 11.3%, but steadily dropped thereafter to 10.3% as of the latest data released by the Fed.
Write to Christine Ricciardi.
In the time between Black Friday and the Christmas break, nonperforming loan investors look set for a bull run, in what one market player is expecting to be a "buying frenzy."
Market indications, not just living on rumors of a billion dollar Pimco fund for distressed loans and properties, are such that global investors are also looking more at the U.S. According to a global distressed property monitor from the Royal Institute of Chartered Surveyors, investor interest in distressed sales is now double that of a year ago.
Expectations for increased distressed property sales in the coming months are highest in the Republic of Ireland, where beleaguered banks asked for, and will receive, a massive Eurozone bailout over the weekend. After Ireland, the U.S. is next on the list of heightened investor focus.
The RICS survey reveals investors believe the opportunities will be rich going into 2011, with "specialist funds" showing the most amount of interest.
Oliver Gilmartin, RICS senior economist warns that financing for such deals may be harder to come by.
"Renewed falls in rental values may also be making banks more nervous as to the size of their property loan books," he said. "Significantly, specialist investors appear to be showing increasing interest in distressed property listings. However, ultimately banks hold the keys as to how the market for distressed property listings will evolve in the coming year.
The sentiment is similar in the distressed loan space, where the pipeline is stocking up according to Jon Daurio, CEO of Kondaur Capital.
"From November 1, we've seen a resurgence of scratch-and-dent loans hitting the market," said Daurio. "It could be loan owners clearing balance sheet, maybe it's robo-signing resolutions — none of the sellers are telling us the reason for it — but we are expecting a buying frenzy by December 31."
Daurio dismissed rumors that the Pimco fund is meant to compete with his aggressive bid strategy. He also said that Kondaur's two recent rounds of layoffs (40 staffers were shown the door on Nov. 5) were more a letting go of underperformers than an indication of Kondaur scaling back operations. Rumors that Daurio would step down are also unfounded, he said.
But one thing is clear, the non-performing loans are not coming from Fannie Mae, where the inventory for nonperforming loans is steadily shrinking.
"Serious delinquency rates for various states, including California, have fallen from 5.73% at the end of 2009 to 4.28% at the end of September 2010, so that would suggest our overall supply of NPLs has decreased," said a spokesperson at Fannie Mae.
Daurio said he's seen little supply of non-performing loans from Fannie Mae or Freddie Mac.
Write to Jacob Gaffney.
Banks seeking to clean up their balance sheets by selling U.S. mortgages made during the real- estate lending boom are encountering documentation problems, Cantor Fitzgerald LP said.
In some cases faulty files are lowering loan prices or extending the time it takes to complete sales, said Jason Kopcak, the head of whole-loan trading at the New York-based broker. Residential and commercial mortgages owned by banks looking to sell often lack the papers required by buyers, including documents needed to foreclose, Kopcak said.
The Department of Housing and Urban Development may issue new guidance under the Real Estate Settlement Procedures Act (RESPA) to address possible changes in warehouse lending used to fund federally insured mortgages.
According to HUD, its RESPA regulations relevant to this area were developed and revised over 15 years ago, when it amended the rules to add a secondary market exemption and define “table-funding.”
Homeowner associations struggle daily with how to pay the bills as more and more HOA fees go unpaid on housing units in or near foreclosure. That means HOA members are left holding the bag for unpaid mortgages in their communities — and end up paying higher fees or getting fewer services.
The Association Law Group (ALG), which represents HOAs throughout Florida, has devised a new legal strategy to push banks to either foreclose or get out of the way. Prior to the "mortgage terminator" strategy developed by ALG, condos and HOAs could only sit passively and wait for the banks to act on foreclosures.
