Bank of America Testing New Foreclosure Relief Program

Test program in Nevada, Arizona and New York State

Bank of America Corp. announced that it is launching a test program for one thousand homeowners in Nevada, Arizona and New York — whose loans are distressed and for whom loan modifications have not worked — that will allow them to turn in the deed to their home (deed-in-lieu) in return for the opportunity to rent their home at or below market rates for up to three years.

 

Bank of America hopes to be able to off-load these homes to investors — as rental properties with income — within three months of the transaction with the borrower. The bank expects the test to yield hard numbers that will show whether this solution is financially preferable to the foreclosure process for loans that have exhausted all modifcation efforts. (via Los Angeles Times Business)

After loan modification options are exhausted

Bank of America’s “Mortgage to Lease” program is being tested with borrowers

…who have been previously offered a variety of possible alternatives to foreclosure — loan modifications, forbearance on payments, short sales and "deeds-in-lieu," where the borrower hands the property title back to the bank and moves out… But they either have not been able to qualify or have not responded to the bank's proposals. They're now essentially at the end of the line — there are no other standard lender remedies available to keep them out of foreclosure.

(via Seattle Times Real Estate)

Investors are jumping on the band-wagon

There has been a significant movement by investors to buy foreclosed properties and turn around and rent them — big name investment institutions like Berkshire Hathaway, Starwood Capital, and Oaktree Capital have all announced their intention to purchase foreclosed homes. And Fannie Mae recently announced that it is going to test a project to sell pools of single-family homes to investors. (via Huffington Post Business)

Sellers Driving Housing Boost?

Spread between non-distressed and distressed homes narrows

Although prices for both distressed and non-distressed homes declined in 2011, distressed home prices went down less than non-distressed — bringing the total available inventory closer together on the price scale. Radar Logic, a real estate research and analysis firm, reported last week that the recent increase in home sales may not reflect greater demand or buyer confidence as much as it reflects more sellers being motivated to accept lower bids.

Even with sellers’ increasing willingness to take a lower price, tight credit and general concern about home values over time appear to be combining to keep buyers from swarming into what is clearly a “buyers market.”

Existing home inventory lowest in six years

NAR (National Association of Realtors) reported that January’s inventory of 2.31 million existing homes for sale amounts to 6.1 months’ supply — the lowest that inventory has been since 2006. Because those numbers don’t take into account vacant homes not on the market, houses with loans in delinquency, houses in foreclosure or houses with underwater mortgages, the potential supply of available homes remains historically high.

Help and hope from the Fed?

Radar Logic concluded its report by observing that Bernanke’s (Fed Chairman) speech at the NAHB’s show last month held out hope that “the renewed focus of the Fed and the administration will lead to pro-active and innovative programs to address the housing crisis.”

Need a Mortgage? There is An App For That

This week, the iPad app store will welcome the first tablet application for loan originators — MobileLO from On The Go Technology.

The app is designed to allow loan officers and brokers “to enter the data fields of a Uniform Residential Loan Application (Form 1003), generate a Good Faith Estimate and other federal and state-specific disclosure documents, pull the applicant’s credit report and collect electronic signatures.”

When the app hits the store, it will be free, although there is a premium membership available for about $30/month, which will included disclosures, e-signatures and integration with multiple credit reporting vendors.

Andrew WeissMalik, the owner of On The Go, dreamed up the app last year when he realized that the mortgage application process still entailed a clipboard and carbon copies. As he put it, “The fact that in 2011 that’s still going on is just insane to me. That entire model gets replaced with an iPad.”

WeissMalik says that with the app, “You are actually taking an application on the device, you’re pulling credit right then and there and then you can thumb through it with your finger. It’s the neatest feeling to be doing mortgage on a tablet.”

(via American Banker and MobileLO.com)

Pending Home Sales Trend Up

Highest Figures Reported in Nearly Two Years

 

 

NAR’s index highest since April 2010

Good news from the National Association of Realtors (NAR) — its Pending Home Sales Index went up 2 points in January of this year to reach 97.0, the highest level since April of 2010.

December was better than we thought

The index for December 2011 was also recently revised to reflect a more accurate drop of 1.9 percent, rather than the 3.5 percent originally reported. With January of this year’s 8.0 percent increase in new contracts, experts feel confident in predicting positive sales results for the first quarter of the year.

Improvement rests on mixed geographic trends

While the South and the Northeast saw increases of 7.7 and 7.6 percent respectively, the Midwest and West both fell (3.8 and 4.4 percent respectively) in January.

Along with job growth, the housing market continues to improve

Buyers’ growing confidence in their financial situtation due to the improving employment figures and strengthening economy is bolstering the housing market’s recovery. At the same time, tight credit and gloomy appraisals continue to put the brakes on new momentum.

(Via Realty Times and Reuters)