Finally Good News for Louisiana! We are ranked 42nd in forclosures !

A record 5.4 million American homeowners with a mortgage of any kind, or nearly 12 percent, were at least one month late or in foreclosure at the end of last year, the association reported. That’s up from 10 percent at the end of the third quarter, and up from 8 percent at the end of 2007.

Prime and subprime fixed-rate loans saw sharp increases in the fourth quarter, a sign that the problem is now the economy.

“We’re seeing increases in fixed-rate categories and that’s where the problems are coming from,” said Jay Brinkmann, the group’s chief economist. “The foreclosure picture is more clearly driven by the jobs market.”

Louisiana had mixed news in the report. The delinquency rate, meaning the percentage of home loans with payments at least 30 days overdue, was just over 10 percent in Louisiana, showing a very slight increase over the third quarter. But that rate put the state at No. 7 in the national ranking and was higher than the national average of about 8 percent.

The percent of loans in foreclosure in Louisiana was 2.1 percent at the end of the fourth quarter, the same as the previous period, and compared favorably with a national average of 3.3 percent.

In the high-interest and risky loan category of subprime adjustable rate mortgages in Louisiana, 13.2 percent were in foreclosure, compared with 22.8 percent nationwide.

In the latest measure by RealtyTrac, a private firm, Louisiana ranked No. 42 in foreclosures among all states in January, with 485 home foreclosure filings. That figure was down sharply compared with the previous month as well as January 2008.

The state’s January figure represented a rate of 1 of every 3,833 homes entering some type of foreclosure proceeding, versus a U.S. average of 1 of every 466 homes, RealtyTrac reported.

3-13-2008
from NOLA.com
By Kate MoranBusiness writer

Bill Detweiler sought bids on Thursday for the city’s orphaned houses, property that had been destabilized by flood, divorce or bankruptcy, and then finally lost to foreclosure.

Detweiler was the lead barker at the weekly auction the civil sheriff holds to dispose of property whose owners have lost their grip on their mortgages. The low-key event, which involved only about a dozen houses, signaled just how insulated Louisiana remains from the foreclosure crisis that has raged across states such as California, Florida and Nevada.

The real estate market in such states swooned to new highs in 2005 and 2006, buoyed by the proliferation of exotic mortgages that pushed buyers into houses they could not truly afford. When home prices began retreating, buyers began walking away from mortgages that were in some cases worth more than the house itself.

Such risky loans never had much of a foothold in Louisiana, perhaps because the state was devastated by two major hurricanes around the time their popularity was peaking in other states. Orleans Parish Civil Sheriff Paul Valteau Jr. said the tide of insurance money that flowed in after the storm helped many owners catch up on their mortgage payments if they had fallen behind.

Valteau said Thursday that his office is selling fewer foreclosed homes at auction than it was before Hurricane Katrina. He put 3,062 residential and commercial properties in New Orleans on the block in 2003 and sold 938 of them. Last year, he put 2,466 up for auction and sold 760.

These are just a fraction of the houses touched by foreclosure in the states at the epicenter of the crisis. The research firm RealtyTrac calculated that California tallied 80,800 foreclosure notices last month, while Nevada had 18,100. Louisiana ranked No. 40 among all states with 678 foreclosure filings. Those notices include properties in various stages of foreclosure, and not all will end with the owner losing his home.

While foreclosures have not exactly spread like wildfire here, Valteau managed to attract a packed house for a free Wednesday evening seminar on how to buy foreclosed property at auction. Some said they were curious because of the omnipresence of foreclosures in the news. Most wanted to see whether they could pick up an investment property on the cheap.

David Faust and Max Sold, a pair of entrepreneurial students at Tulane University, were looking for a double they could buy at a bargain price and renovate. They would live in one half of the house and rent out the other until they had made enough money to sell the property and buy something nicer. “We’re trying not to pay rent anymore,” Sold said.

Dale and Demerial Banks were also on the hunt for investment property. They had attended public auctions in the past where bank representatives participated in the bidding and drove up the price of a home. They were hoping for some tips from Valteau on how they might prevail.

Valteau told the room full of potential buyers that they needed to make a 10 percent cash deposit in order to secure a home at a foreclosure auction. He said the law allows bank representatives to attend, and he advised that the bank would stop bidding for a property once the price climbs beyond the value of the outstanding mortgage.

Foreclosure sales are not for picky buyers. The lender that foreclosed on a property does not typically hold an open house to let potential buyers view the interior before the auction. Bidders have to content themselves with inspecting the outside and making a guess, based on the upkeep, about the condition inside. Valteau nonetheless advised his class to at least drive by the property, rather than relying on the photos on his Web site.

“Never, never, never buy merely from looking at the pictures,” Valteau said.

Yet that is exactly what Sarah Gaines Taylor did at Thursday’s live auction, held at noon at the civil courthouse on Loyola Avenue, same as it is every week. She said she and her husband usually visit the homes before an auction, but she did not have time to go by 2520 Marr Ave. this week.

No matter. She bought the flooded house, her third investment property acquired at auction, for only $18,000.

“You can tell someone fixed the roof,” she said, perusing a January photograph of the property.

Most of the houses on the block Thursday went back to the lender, but a handful of satisfied buyers from the general public felt they had found a deal. A pair of women who declined to give their names bought, after a bidding war, a flooded, ungutted house for $48,000. They had expected to pay more.

“It’s a steal,” one of them said.

Alan Zibel, AP Real Estate Writer
Wednesday February 25, 2009, 4:43 pm EST

WASHINGTON (AP) — Sales of existing homes sank unexpectedly last month to the lowest level in nearly 12 years as potential buyers worried about their jobs and awaited details of President Barack Obama’s plans to stabilize the housing market.

But the banking industry’s teetering fortunes and mounting job losses could stall any recovery. Falling prices and low mortgage rates don’t make much of a difference for people who are out of work — or fearful of losing their jobs.

The most optimistic outlook is for a spring revival as home prices plummet. Government officials, hoping to spur demand, on Wednesday rolled out the details of a new $8,000 tax credit for first-time buyers. About 40 percent of all home sales last year were from first-time buyers.

Treasury Secretary Timothy Geithner said the tax credit should help provide an “immediate response to the current crisis.”

The government response may help, but many consumers are still in wait-and-see mode.

“Buyers are sitting back,” said real estate agent Sandra Lipmann of Prudential Centennial Realty in Westchester County, N.Y., home to the upscale properties of many Wall Street workers. “They don’t have the full story of what’s going to happen in this economy.”

Sales of existing homes fell 5.3 percent to an annual rate of 4.49 million last month, from 4.74 million in December, the National Association of Realtors said Wednesday. It was the weakest showing since July 1997. And some analysts don’t see sales bottoming out until later this year as prices sink further. Economists had expected sales to rise to an annual pace of 4.79 million homes.

Without adjusting for seasonal factors, sales nationwide fell 7.6 percent from a year earlier. The West was the only region to show increased sales.

The median sales price in January plunged to $170,300, from $199,800 a year earlier and $175,700 in December. It was the lowest price since March 2003 and the second-largest drop on record.

And the Mortgage Bankers Association said Wednesday that applications for new loans and refinances both fell last week as rates inched up.

Sinking home prices and soaring foreclosures have forced major banks like Citigroup Inc. and Bank of America Corp. to record huge losses on the value of their mortgage-related assets.

On Capitol Hill for a second day, Federal Reserve Chairman Ben Bernanke warned lawmakers that the big glut of unsold homes could “put us in real danger” of even sharper declines in home prices.

The Fed chief fielded tough questions about bank-rescue efforts and again spurned speculation that the government may seize control of Citigroup or other large financial institutions.

Asked about Citigroup Inc., Bernanke said nationalization “is when the government seizes the bank and zeros out its shareholders … we don’t plan anything like that.”

Wall Street ended an erratic session with a loss. The Dow Jones industrial average fell about 80 points, and the Standard & Poor’s 500 index and the Nasdaq composite index also declined.

Some hopes for the long-awaited housing market rebound had returned last month after the Realtors group reported a surge in sales for December. But economic fears are now paramount in the minds of many consumers, and lending standards remain tight.

John Seidensticker, 37, has been trying to sell a two bedroom, roughly 1,100 square foot condominium north of Miami’s downtown. He started out asking for $279,000 and has lowered his price by $90,000 but still hasn’t found a buyer.

“I can’t buy until I sell this one,” Seidensticker said. “Half the buyers can’t qualify, and there aren’t that many buyers out there.”

The number of unsold homes on the market fell almost 3 percent last month to 3.6 million, the lowest inventory level in two years, the Realtors group said. But due to the slumping sales pace, it would still take 9.6 months to rid the market of all of those properties, up from 9.4 months in December.

The number of properties languishing on the market likely would be even higher if sellers weren’t so reluctant to list their properties as prices sink rapidly, Joshua Shapiro, chief U.S. economist with MFR Inc., wrote in a note Wednesday.

“With supply overhang still huge and mortgage financing difficult to obtain, home prices are likely to decline considerably further in the quarters ahead,” he wrote.

Prices have been falling as thousands of Americans lose their jobs every week. Employers took an especially large ax to their payrolls last month, the Labor Department said Wednesday, and the cuts are likely to get worse over the next few months.

Mass layoffs, or job cuts of 50 or more by a single employer, increased to 2,227 in January, up almost 50 percent from the same month last year. More than 235,000 workers were fired in last month’s cuts.

The labor market pain persists this week. The NFL said Wednesday that commissioner Roger Goodell has taken a 20 percent pay cut and the league dropped 169 jobs through buyouts, layoffs and other reductions. Spartanburg, S.C.-based textile maker Milliken & Co. said it would cut 650 jobs at facilities worldwide, and jeweler Zale Corp. said it will close 115 stores and eliminate 245 positions.

As layoffs mount, foreclosures have swamped the housing market — especially in particularly distressed states like California, Florida, Nevada and Arizona. About 45 percent of sales nationwide are foreclosures or other distressed properties.

Joel Rodriguez, owner of Global Investments Realty in Miami, estimates that 70 percent of his business comes from foreclosures, but says sales are picking up. “The banks have finally gotten realistic and started accepting some of the offers,” he said.

Lawrence Yun, chief economist for the Realtors, predicted that the new tax credit would help boost home sales by late spring or early summer. Buyers “did not want to jump into the market until they were certain” what the government would do to resuscitate the housing market and that clearly dampened January sales, he said.

But other analysts say the government’s actions will provide a far more modest boost, largely because the economic picture remains so gloomy.

Patrick Newport, an economist with IHS Global Insight, said sales are likely to sink further and not stabilize until the summer. Prices aren’t likely to hit bottom until the first quarter of 2010 and should remain flat for another year, he said.

“At some point, prices will drop so much that sales will start to pick up,” Newport wrote in a note Wednesday. “So far, this has yet to happen.”

AP Business Writers J.W. Elphinstone, Adrian Sainz, Martin Crutsinger, Christopher S. Rugaber and Jeannine Aversa contributed to this report.

The bill provides an additional $500 million to existing USDA Rural Housing programs. The RHS provides both a guaranteed loan program and a direct housing loan program for those meeting the program’s eligibility criteria. The direct loan program will receive $270 million while $230 million will be allocated for unsubsidized guaranteed loans. It has been reported that this level of funding would provide for an additional 192,000 homeowners.

The bill reinstates last year’s 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans. These limits were equal to the greater of 125% of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of $729,750. For the few areas where the 2009 limits were higher, the higher limits will apply. In addition, the bill includes language providing the HUD Secretary with the discretion, if warranted, to increase the loan limit for any “sub-area”, i.e.an area smaller than a county. The Secretary’s discretion is again limited by the $729,750 cap. These 2009 limits will expire December 31, 2009.

The inclusion of these loan limit provisions in the final bill is a victory for homeowners, buyers and Realtors. While these new limits were included in version of the original stimulus bill approved by the House, the bill first approved by the Senate did not. NAR’s Call for Action to both the House and the Senate prior to the final vote advocated strongly for the provisions which were then included in the final bill approved by both Chambers.

Division A, Title XII of the bill provides $2,000,000,000 in additional funding for the Neighborhood Stabilization Program (NSP). The NSP was created by the Housing and Economic Recovery Act of 2009 (Public Law 110–289) to provide grants through the Community Development Block Grant program (CDBG) to states and localities to address the problems that can be created when whole neighborhoods are decimated by foreclosures. The funds can be used to purchase, manage, repair and resell foreclosed and abandoned properties. In addition, the funds can also be used by states and localities to establish financing methods for the purchase and redevelopment of foreclosed properties. After purchase the homes must be used to assist individuals and families with incomes at or below 120% of area median income. Twenty-five percent of funds must be used for households with incomes at or below 50% of area median income. By leveraging their expertise in partnership with others from both the public and private sector, Realtors® in many communities have been making important contributions to their local communities’ neighborhood stabilization programs.

Homebuyer Tax Credit – The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser’s income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.

Please find below the National Association of Realtors take on the current Stimulus Package and the proposed impacts on the national housing market.

“We look at the Stimulis package AND the Treasury’s package holistically, in compliment with each other - mostly because that’s how the Obama team is looking at it. Your representatives, the NAR Board of Directors, asked us in November to do 4 things (with an unspoken but clearly understood mandate to PRESERVE what we already have). Here they are: 1) get loan limits raised for high cost areas, 2) make the $7,500 tax credit NOT a loan, 3) try to find ways to push interest rates down (which are higher than they should be due to systemic risk right now) by 200 basis points, and 4) help provide solutions to the foreclosure/short sale problem.

So here’s what we have achieved: 1) the loan limits will be raised to $727,000 in high cost areas, 2) the tax credit will be raised to $8,000 with NO payback [a true credit], 3) interest rates have come down 125-150 basis points, and 4) the bill has over $50 billion in it for foreclosure mitigation, with Geitners Treasury plan signaling that the second half of TARP and TALF will be used to mitigate foreclosures through a government guarantee, drive down interest rates by buying another $200-300 billion of mortgage paper from the GSES’s thereby freeing them up to do the same with new mortgages, and Fannie has just agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10.

In addition, we preserved what we have - which some tend to forget is always on the table when these negotiations start up again - mortgage interest deductability, real estate tax deductability, and the $250,000/$500,000 cap gains exclusion (an overall package worth more than $100 billion and for some a very attractive funding source for their pet projects).

We did make a run at the $15,000 credit — and we would have loved to have gotten that or the Homebuilders $22,000 credit idea as well as their 5 year loss carryback deal, but they were considered too rich for this program. What it did do though is totally take the debate off of whether a tax credit should be reinstated at all (it expired last year) and whether it was a true credit or a repayable loan, and kept the conversation on how much it should be. It also kept the debate off of ‘what we are willing to give up to get a $15,000 tax credit’ and kept the debate again, on how much it should be. It’s pretty hard to complain when they give you what you ask for and you lose something you never had.
While we study the Treasury specifics on their major role in providing the rest of the housing solution — there is much more to come and we are working diligently with the Administration to help ‘unclog the pipeline’ and get capital flowing into housing again”

Charles McMillan, CIPS, GRI
2009 NAR President

Have you wondered how an investment in home improvement will impact your homes value?

We all want to know that our hard earned dollars are being put to use in a prudent manner. The National Association of Realtors recently published its 2008 remodeling returns, which I have copied here for your review.

Siding and window replacements and wood decks had among the highest return of project costs upon resale, according to a report prepared by research company Hanley Wood LLC in cooperation with the National Association of Realtors’ Realtor Magazine.

The 2008 Remodeling Cost vs. Value Report found that the average upscale fiber-cement siding replacement project cost about $13,177 and recouped about $11,424 of that cost — or 86.7 percent — upon resale.

Wood deck additions, which cost an average of $10,601 per project, recovered an average $8,676, or 81.8 percent of the cost upon resale, the report found.

Midrange vinyl siding replacement projects returned about 80.7 percent of project cost, followed by upscale foam-backed vinyl siding replacement at 80.4 percent, minor kitchen remodels at 79.5 percent and upscale vinyl-sided window replacements at 79.2 percent of project costs. Wood and vinyl window replacements and major kitchen remodels followed on the list of projects

NAR noted that it was the second year in a row that exterior projects recouped the highest percentage of project costs.

The report compares construction costs with resale values for 30 midrange and upscale remodeling projects — including additions, remodels and replacements — in 79 markets across the country, NAR reported.

The least profitable remodeling projects in terms of recouped costs include home-office remodels, sunroom additions and backup power generators, according to the report, which return from 54.4 percent to 57.1 percent of project costs, on average, according to the report.

In some cities, homeowners can recover all of their costs on projects, the report found — some projects in Charlotte, N.C., as an example, can net more than they cost at resale, and Seattle, Jackson (Miss.) and Billings (Mont.) also topped the list of cities with a high rate of return.

The Pacific region (Alaska, California, Hawaii, Oregon, Washington); the West South Central region (Arkansas, Louisiana, Oklahoma, Texas); the East South Central region (Alabama, Kentucky, Mississippi, Tennessee); and the South Atlantic region (Washington, D.C., Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia) generally had higher recouped costs for projects than other regions in the U.S.

Putting in that luxury pool, spa and waterfall will create a great lifestyle and home environment. Unfortunately, the return on that investment is less than 50%.

• Selection, selection, selection. There are about 8,000 resale homes on the market geographically. Regardless of the price range a buyer desires, there are plenty of houses from which to choose. Just a few years ago the resale inventory dropped below 4,000 units. A buyer was forced to make compromises if they were going to locate the home of their dreams. There is a great selection of attached homes, condos, and townhouses. You can find large lots, small lots, and a lot that will accommodate your boat or RV. There are lots of options in this market.
• No Bidding Wars. Post Katrina we had one client that made an offer on ten homes. They lost the first nine to the ‘feeding frenzy’ that existed. Other buyers bid the properties up substantially from the original listing price. There were escalation clauses where buyers authorized their agents to outbid other offers by thousands of dollars. There is no competitive bidding in this buyer’s market.
• You can make an offer. A few years ago when you made an offer, the only question was how high above the list price could the buyer reach in hopes of being the best offer on the table. Today the sell price list vs. price ration is about 96%. A seller will not be insulted if you ‘make them an offer they can’t refuse’.
• Patience is tolerated. In the hot seller’s market that existed everything was rushed. Find a house before other buyers did. Hurry up and make the offer. Today a buyer can take their time. Look at several homes and think about your decision for a few hours.
• Due diligence is welcomed. In this market a buyer is encouraged to obtain a home inspection, termite inspection, and appraisal. In 2005 many buyers waived these contingencies in order gain an advantage with multiple offers.
• There are plenty of specs. In the not too distant past buyer had to ‘play games’ if they wanted a new home. There were lotteries and waiting lists in order to obtain new construction. Some buyers slept in their cars in order to get to the head of the lines
• Repair requests are welcomed. After a buyer completes a home inspection, they are allowed to submit a repair request to the seller. In the past a seller might insist the home was sold ‘as is’. Many times, there were back-up buyers waiting for a primary buyer to upset the seller whose home was increasing in value almost daily.
• Few, if any investors. It is estimated that one third of all sales in 2005 were to investors. These non-owner occupied buyer caused the market to inflate and affordability to decline. Mortgage fraud became commonplace. It’s a great time to buy without having to compete with hundreds of prospective landlords.
• Location, location, location. Today’s buyers can find homes closer to work. In the past buyers flocked to the outer areas of town in order to find affordable homes. In this market, reasonably priced homes are within biking or walking distance to schools, transit lines, and relatives.
• Real Financing is available. The ‘wink, wink’ zero down, no doc, adjustable, sub-prime loans are gone. Fixed rates are back. FHA financing, first time homeowner bond programs, special loans for teachers, and police officers are back in business. It’s a great time to buy real estate!