Mortgage rates have risen to their highest levels in six months,
threatening to delay a housing turnaround by discouraging potential home
buyers.
The average rate on a 30-year, fixed-rate home loan climbed to 5.29%
for the week ended Thursday, Freddie Mac reported. That’s the highest
since December and up from 4.91% a week earlier.
In early and late April, the rate was at a record low: 4.78%.
“There’s a real risk interest rates could climb up beyond 6% or 6.5%,
which can immediately shut down the housing recovery and undermine the
national economy,” says Bernard Baumohl, chief global economist at the
Economic Outlook Group. “That’s the big battle to watch in the next
couple of months.”
Higher mortgage rates are already having an impact. Applications to
buy a home or refinance a mortgage tumbled 16% in the week ended May 29
compared with a week earlier, the Mortgage Bankers Association reported
this week. Refinancing activity fell 24%. The MBA’s purchase index rose
4.3%.
Refinancings’ share of mortgage activity dropped to 62.4% of total applications from 69.3% the previous week.
While the Federal Reserve is trying to hold down mortgage rates by
buying mortgage-backed securities and Treasury securities, other factors
are driving up rates.
Mortgage rates have been pushed up by recent increases in yields on
long-term Treasury securities, a benchmark for mortgage rates.
If interest rates rise more, that could make a purchase too expensive
for some buyers. Weakened demand would delay the reduction of a high
inventory of unsold homes, which is considered essential for the
market’s recovery.
Some economists say the fundamental building blocks of a housing
recovery are already in place and that rising interest rates will not
derail the process.
“(Higher interest rates) could slow down refinancing, but the housing
recovery is going to be one that takes time, and we’ll see setbacks on
the way,” says Michael Darda, chief economist at MKM Partners. “I don’t
think the housing market recovery is going to be derailed.”
Lawrence Yun, chief economist at the National Association of
Realtors, say rising interest rates often have a short-term effect of
driving more buyers into the market. Those buyers rush to buy so they
can lock in rates before they go still higher.
But that impact is short lived.
“Further rises will impact buyers. That’s a risk,” Yun says. “Mortgage rates have been the lifeblood of the market.”
By Stephanie Armour, USA TODAY
Tuesday, June 19, 2012
Tuesday, June 12, 2012
An Unmanageable Mortgage Clouds Everything
When families are tapped out financially and faced with the
uncertainty of not knowing how much longer they’ll be able to stay in
their home, the prospect of planning or having a positive outlook on the
future seems out of the question.
Many financially strapped homeowners feel frozen in action and it’s no wonder, but here’s the most important point that you need to know:
Even though millions of homes have been lost to foreclosure, you and those you care about absolutely do not need to add to that statistic.
More help is available now than ever before.
As a real estate professional who has earned the Certified Distressed Property Expert (CDPE) designation, I am adept at navigating among the full range of solutions for helping financially distressed homeowners to make a fresh start.
If you, or someone you care about is looking to get out from under the cloud of unmanageable mortgage contact me today for a confidential consultation!
Many financially strapped homeowners feel frozen in action and it’s no wonder, but here’s the most important point that you need to know:
Even though millions of homes have been lost to foreclosure, you and those you care about absolutely do not need to add to that statistic.
More help is available now than ever before.
As a real estate professional who has earned the Certified Distressed Property Expert (CDPE) designation, I am adept at navigating among the full range of solutions for helping financially distressed homeowners to make a fresh start.
If you, or someone you care about is looking to get out from under the cloud of unmanageable mortgage contact me today for a confidential consultation!
Thursday, June 7, 2012
SEC charges ex-Countrywide CEO Mozilo with fraud
Former Countrywide Financial CEO Angelo Mozilo and two other former
officials of the mortgage giant were charged with fraud by federal
regulators Thursday in the first government lawsuit against top
corporate executives for actions related to the financial crisis.
The Securities and Exchange Commission accused Mozilo, 70; former Countrywide CFO Eric Sieracki, 52; and David Sambol, 49, former president, of falsely leading investors to believe the mortgage giant had avoided subprime-lending mistakes, even as Countrywide issued “riskier and riskier” loans.
Those loans generated billions in profits for Countrywide, a major
player in the national subprime mortgage market that collapsed in 2007,
helping start a global financial meltdown. Bank of America (BAC) acquired Countrywide last year in a much-criticized deal.
Mozilo, a Countrywide co-founder renowned for his high salary and other corporate perks, was also charged with inside trading that allegedly produced profits of nearly $140 million on sales of the stock in the nation’s largest mortgage lender.
Defense lawyers denied any wrongdoing by the former executives and vowed to fight the Los Angeles federal civil court lawsuit that accused the three of failing to tell investors Countrywide was:
• Matching any mortgage offered in the marketplace, even risky loans offered by subprime specialists.
• Approving a high percentage of loans with risks above the firm’s “increasingly lax” guidelines.
• Defining “prime” loans as mortgages approved for borrowers whose credit scores were “well below” any definition of prime credit quality.
SEC enforcement director Robert Khuzami said evidence shows the three painted a cheerful “mirage” that falsely characterized Countrywide as operating under “prudent business practices and tightly controlled risk.”
“But the real Countrywide, which could only be seen from the inside, was one buckling under the weight of deteriorating mortgages, lax underwriting and an increasingly suspect business model,” Khuzami said.
As proof the executives knew of Countrywide’s increasingly risky financial condition, the SEC lawsuit cited a corporate e-mail in which Mozilo allegedly told Sambol the firm was “flying blind” on how some risky loans would perform amid rising unemployment and slowing home sales.
In a separate e-mail to Sambol, Sieracki and others, Mozilo allegedly wrote that subprime mortgages had been originated “through our channels with disregard for process (and) compliance with guidelines.”
The SEC charged that Mozilo, while aware of non-public red flags in the firm’s operations, established four stock sales plans, exercised more than 5.1 million Countrywide options and sold the underlying shares for nearly $140 million.
The SEC seeks unspecified fines against the three. It also seeks repayment of allegedly improper stock gains by Mozilo and Sambol, who allegedly got at least $40 million in profits.
Calling the charges “baseless,” Mozilo attorney David Siegel said Countrywide’s underwriting standards and loan portfolio “were well disclosed to and understood by the marketplace.” He described Mozilo’s stock sales as “entirely lawful.”
Sambol’s lawyer, Walter Brown, said the lawsuit “wholly disregards” Countrywide’s credit risk disclosures and media accounts about them.
Defense attorney Nicolas Morgan said Sieracki did nothing wrong and “lost money just like all other investors in Countrywide stock” when the financial crisis erupted with little warning.
By Kevin McCoy, USA TODAY
The Securities and Exchange Commission accused Mozilo, 70; former Countrywide CFO Eric Sieracki, 52; and David Sambol, 49, former president, of falsely leading investors to believe the mortgage giant had avoided subprime-lending mistakes, even as Countrywide issued “riskier and riskier” loans.
EXCERPTS: E-mails from Angelo Mozilo (pdf)
Mozilo, a Countrywide co-founder renowned for his high salary and other corporate perks, was also charged with inside trading that allegedly produced profits of nearly $140 million on sales of the stock in the nation’s largest mortgage lender.
Defense lawyers denied any wrongdoing by the former executives and vowed to fight the Los Angeles federal civil court lawsuit that accused the three of failing to tell investors Countrywide was:
• Matching any mortgage offered in the marketplace, even risky loans offered by subprime specialists.
• Approving a high percentage of loans with risks above the firm’s “increasingly lax” guidelines.
• Defining “prime” loans as mortgages approved for borrowers whose credit scores were “well below” any definition of prime credit quality.
SEC enforcement director Robert Khuzami said evidence shows the three painted a cheerful “mirage” that falsely characterized Countrywide as operating under “prudent business practices and tightly controlled risk.”
“But the real Countrywide, which could only be seen from the inside, was one buckling under the weight of deteriorating mortgages, lax underwriting and an increasingly suspect business model,” Khuzami said.
As proof the executives knew of Countrywide’s increasingly risky financial condition, the SEC lawsuit cited a corporate e-mail in which Mozilo allegedly told Sambol the firm was “flying blind” on how some risky loans would perform amid rising unemployment and slowing home sales.
In a separate e-mail to Sambol, Sieracki and others, Mozilo allegedly wrote that subprime mortgages had been originated “through our channels with disregard for process (and) compliance with guidelines.”
The SEC charged that Mozilo, while aware of non-public red flags in the firm’s operations, established four stock sales plans, exercised more than 5.1 million Countrywide options and sold the underlying shares for nearly $140 million.
The SEC seeks unspecified fines against the three. It also seeks repayment of allegedly improper stock gains by Mozilo and Sambol, who allegedly got at least $40 million in profits.
Calling the charges “baseless,” Mozilo attorney David Siegel said Countrywide’s underwriting standards and loan portfolio “were well disclosed to and understood by the marketplace.” He described Mozilo’s stock sales as “entirely lawful.”
Sambol’s lawyer, Walter Brown, said the lawsuit “wholly disregards” Countrywide’s credit risk disclosures and media accounts about them.
Defense attorney Nicolas Morgan said Sieracki did nothing wrong and “lost money just like all other investors in Countrywide stock” when the financial crisis erupted with little warning.
By Kevin McCoy, USA TODAY
Wednesday, June 6, 2012
Talking With … Michael Wolf: Buying land in a distressed, post-slump housing market isn’t easy
Michael Wolf, 41, has been vice president of land acquisition for
luxury-homebuilder Toll Brothers Inc. in central and eastern Florida
during both the boom and bust of the past eight years. With more than $1
billion in acquisition funds,
the Pennsylvania-based company is looking for land deals in Central
Florida and elsewhere. He spoke recently with Staff Writer Mary Shanklin.
CFB: Last year your company spent about $430 million on land across the U.S.; how much of that was in Florida?
Across Florida we have probably spent $120 million in the last 18 to 24 months. At the same time, the company overall spent about $650 million in that time.
CFB: Is Toll Brothers making more or fewer land purchases these days?
The answer is really twofold. We’re attempting to ramp up but, needless to say, in Central Florida that’s been challenging to do. While it’s been difficult to acquire ground, it’s not for lack of trying.
CFB: What’s been the greatest obstacle?
The difference between the asking price of the land and its actual value to a homebuyer. And, in many cases, it’s been the availability of quality lots in the locations that the homebuyer would be interested in.
CFB: What would it take for you to purchase property in Osceola, Lake or Volusia counties?
One thing we’ve had in mind for outskirts areas has been a focus on age-restricted or active-adult lifestyle communities, because they’re less dependent on quality schools and the availability of traffic concurrency.
CFB: Found anything like that?
We haven’t to date, but there are definitely properties we’re focusing on and we’re definitely talking to sellers about those properties. In some cases, they are still a few years out. And in other cases, we still need to conquer the difference between the the bid and the asking price.
CFB: How has your strategy evolved for the amount of acreage you should buy?
Honestly, it’s tough to qualify in terms of acreage. We expanded from roots in the single-family market to a willingness to do active-adult, to multifamily, to low-rise to mid-rise. So acreage isn’t a big determinant. We’ve been fortunate enough to have $1.14 billion, plus about $785 million in long-term credit. So we’re not really limited in the size and acreage of what we’re looking for, as long as the price and market makes sense. … Acreage isn’t as much of a concern as the minimum lot count. We’re typically looking for 50 to 80 lots, and now we’re looking more at property with a four- to six-year life cycle.
CFB: David Weekley has had success with its scattered-lot building program; could Toll Brothers go that route?
We’ve avoided that in the past. The management structure that we operate under is a project-management system that was developed by Bob Toll, our founder and executive chairman, and our purchases are really conducive to that business model.
CFB: What are some potential land mines for buying distress properties?
For one, it is the ability to convert those assets into a marketable community that will be desirable for homebuyers. And then, on the hard business side, it is the ability to ensure that, during the time it sat in distress, that the entitlements and land-use approvals have not lapsed. Many of those transactions occur in such a short time frame that there is always the concern that it’s been properly foreclosed and all the necessary due diligence has been explored. The bank wants to close in 60 days, and it may take 90 days to do a real due diligence.
From Orlando Sentinel November 2011
CFB: Is Toll Brothers making more or fewer land purchases these days?
The answer is really twofold. We’re attempting to ramp up but, needless to say, in Central Florida that’s been challenging to do. While it’s been difficult to acquire ground, it’s not for lack of trying.
CFB: What’s been the greatest obstacle?
The difference between the asking price of the land and its actual value to a homebuyer. And, in many cases, it’s been the availability of quality lots in the locations that the homebuyer would be interested in.
CFB: What would it take for you to purchase property in Osceola, Lake or Volusia counties?
One thing we’ve had in mind for outskirts areas has been a focus on age-restricted or active-adult lifestyle communities, because they’re less dependent on quality schools and the availability of traffic concurrency.
CFB: Found anything like that?
We haven’t to date, but there are definitely properties we’re focusing on and we’re definitely talking to sellers about those properties. In some cases, they are still a few years out. And in other cases, we still need to conquer the difference between the the bid and the asking price.
CFB: How has your strategy evolved for the amount of acreage you should buy?
Honestly, it’s tough to qualify in terms of acreage. We expanded from roots in the single-family market to a willingness to do active-adult, to multifamily, to low-rise to mid-rise. So acreage isn’t a big determinant. We’ve been fortunate enough to have $1.14 billion, plus about $785 million in long-term credit. So we’re not really limited in the size and acreage of what we’re looking for, as long as the price and market makes sense. … Acreage isn’t as much of a concern as the minimum lot count. We’re typically looking for 50 to 80 lots, and now we’re looking more at property with a four- to six-year life cycle.
CFB: David Weekley has had success with its scattered-lot building program; could Toll Brothers go that route?
We’ve avoided that in the past. The management structure that we operate under is a project-management system that was developed by Bob Toll, our founder and executive chairman, and our purchases are really conducive to that business model.
CFB: What are some potential land mines for buying distress properties?
For one, it is the ability to convert those assets into a marketable community that will be desirable for homebuyers. And then, on the hard business side, it is the ability to ensure that, during the time it sat in distress, that the entitlements and land-use approvals have not lapsed. Many of those transactions occur in such a short time frame that there is always the concern that it’s been properly foreclosed and all the necessary due diligence has been explored. The bank wants to close in 60 days, and it may take 90 days to do a real due diligence.
From Orlando Sentinel November 2011
Friday, May 25, 2012
Getting free doesn’t have to mean running away.
Today, many homeowners find themselves unable to escape an unmanageable mortgage. Some of them are being given some bad advice.
They are being told that walking away from their mortgage and letting the bank foreclose is their best possible option. It is called Strategic Default, and it has terrible consequences.
As a real estate professional who has earned the Certified Distressed Property Expert (CDPE) designation, I make it my mission to know the best possible options available to distressed homeowners for both their present AND their future.
Read the report on my site entitled Escape Your Unmanageable Mortgage: Getting free doesn’t have to mean running away. Then, call me and schedule your free, confidential consultation or send me an email.
They are being told that walking away from their mortgage and letting the bank foreclose is their best possible option. It is called Strategic Default, and it has terrible consequences.
As a real estate professional who has earned the Certified Distressed Property Expert (CDPE) designation, I make it my mission to know the best possible options available to distressed homeowners for both their present AND their future.
Read the report on my site entitled Escape Your Unmanageable Mortgage: Getting free doesn’t have to mean running away. Then, call me and schedule your free, confidential consultation or send me an email.
Thursday, May 24, 2012
Realtor Interview: What to Look Out For When Are in Financial Distress with Your Property
Q – Just recently there was an attorney firm in the news that was
promising homeowners money to move out of their home before foreclosure
and the firm did not help with the foreclosure and did not give the
money promised. There are many people who will try to take advantage of a
homeowners in distress. How to spot a scam for helping someone in
foreclosure?
A – There are rules and regulations regarding giving money to avoid foreclosure. You must ask yourself what is it that you need to qualify. You want someone who is willing to help you at no cost for a program that is available for everyone. There are banks, government agencies, realtors and other professionals who will help at no cost.
Q – What about money given to homeowners?
A – There is money available if you qualify for it. Investment homes do not qualify. You may qualify based on income, type of loan and other circumstances that will help you for moving out. It has to be a primary residence.
Q – Would it be fair to say that you should request to see someone’s license in the business they are in before allowing them to help you?
A – Yes, you should always verify individuals who say they can help you. There are many agencies that are in business and have the authority to help you at no cost to the home owner.
Q – What was your most difficult situation that you can remember that you got it handled?
A – I don’t believe I can specify one situation over another. I always tell my clients to make sure you make your mediation appointments as they are for your benefit. In one particular case, my client called me up on the morning of his mediation to say he could not make it because his daughter was having baby. His wife was at work and he was the only one available to take her to the hospital. I am not allowed to represent them because I am not an attorney, but I did make a special appearance at the mediation to help my client as I explained their absence.
Q – For someone who wants to start investing in real estate, where do you recommend they start?
A – Many people want to get into real estate investing and immediately start flipping houses. To be successful, you must have cash available. There are different ways of getting it done so you must enter with an open mind and be prepared to make creative offers.
Q – Years ago there was a rise in for sale by owner agencies. Today people can search for properties on free websites like Realtor.com. What advantages would a prospective real estate investor have when dealing with a Realtor such as yourself?
A – The average investor, or even the more prominent investor, may only do a handful a deals in their lifetime and it would impossible for one person to experience all of the difficulties possible. If you let a licensed Realtor help you avoid mistakes as they are involved with so many more transactions. My services cost nothing as a buying agent for a real estate investor.
Q – What is the number one problem that real estate investors face once they have acquired a property?
A – Management of a real estate property is not simple as you must have cash available to make repairs, you must find good tenants and you must be able to have the property rented in a timely fashion otherwise you will be faced with making mortgage payments without receiving rental income. Houses by Maria’s management service can help you take care of your property so you can make your real estate investment experience a rewarding one.
A – There are rules and regulations regarding giving money to avoid foreclosure. You must ask yourself what is it that you need to qualify. You want someone who is willing to help you at no cost for a program that is available for everyone. There are banks, government agencies, realtors and other professionals who will help at no cost.
Q – What about money given to homeowners?
A – There is money available if you qualify for it. Investment homes do not qualify. You may qualify based on income, type of loan and other circumstances that will help you for moving out. It has to be a primary residence.
Q – Would it be fair to say that you should request to see someone’s license in the business they are in before allowing them to help you?
A – Yes, you should always verify individuals who say they can help you. There are many agencies that are in business and have the authority to help you at no cost to the home owner.
Q – What was your most difficult situation that you can remember that you got it handled?
A – I don’t believe I can specify one situation over another. I always tell my clients to make sure you make your mediation appointments as they are for your benefit. In one particular case, my client called me up on the morning of his mediation to say he could not make it because his daughter was having baby. His wife was at work and he was the only one available to take her to the hospital. I am not allowed to represent them because I am not an attorney, but I did make a special appearance at the mediation to help my client as I explained their absence.
Q – For someone who wants to start investing in real estate, where do you recommend they start?
A – Many people want to get into real estate investing and immediately start flipping houses. To be successful, you must have cash available. There are different ways of getting it done so you must enter with an open mind and be prepared to make creative offers.
Q – Years ago there was a rise in for sale by owner agencies. Today people can search for properties on free websites like Realtor.com. What advantages would a prospective real estate investor have when dealing with a Realtor such as yourself?
A – The average investor, or even the more prominent investor, may only do a handful a deals in their lifetime and it would impossible for one person to experience all of the difficulties possible. If you let a licensed Realtor help you avoid mistakes as they are involved with so many more transactions. My services cost nothing as a buying agent for a real estate investor.
Q – What is the number one problem that real estate investors face once they have acquired a property?
A – Management of a real estate property is not simple as you must have cash available to make repairs, you must find good tenants and you must be able to have the property rented in a timely fashion otherwise you will be faced with making mortgage payments without receiving rental income. Houses by Maria’s management service can help you take care of your property so you can make your real estate investment experience a rewarding one.
Sunday, May 1, 2011
FORECLOSURE vs. SHORT SALE? Is like saying, Depression, Ignorance and Financial Distress VS. Alternative to deal with Crisis.
Foreclosure can be harmful not just financially but psychologically too.
Let’s face it, foreclosure has become a trend now days. Is sad for me to even mention this but statistics show our reality. I feel certain that no one is happy or satisfied by losing their home, it’s a big deal and a hit on the integrity and honor for everybody: Real estate investors, landlords and specially homeowners. So why is Foreclosure taking place? IGNORANCE.
Most people don’t know they have alternatives (to learn more about your alternatives go towww.housesbymaria.com or www.sellmyhouseflorida.net ) and the shame and frustration make them abandon their properties, or they believe that a choice for them is to give back what they no longer feel theirs (thanks to blast mailing and crazy collection calls and letters that state to turn back the property to lender ) or what its best known Deed in lieu. As my grandmother taught me “no worse that the fight that’s never done” Please read this carefully before you make any move…
I once heard that Crisis means “the turning point” of a cycle. The reality is that we as human beings are very adaptive to circumstances and environments that we encounter all for survival purposes .
When a crisis or distress situation takes place it’s a believe that the best way to proceed is avoiding as much damage as possible when resolving the matter.
How do we place this analogy in to OUR potential foreclosure situation? Following what we just mention; there are alternatives. SHORT SALE will be the best way to proceed avoiding as much damage as possible; Why? The truth is that SHORT SALE became a better way for banks, homeowners, and the real estate market to face the crisis of today.
What is a short sale: http://en.wikipedia.org/wiki/Short_sale_(real_estate)
A few years back it was easy to get a home loan. Credit standards were very wide and lax, down payments were low or nothing, proof of income was overseen and interest rates were almost nothing early in the loan life. In fact, it was so easy to get a home loan that many people bought houses that they could not afford. Then again there was IGNORANCE feed by crazy “deals” that were sale by the MEDIA, GOVERNMENT, and REAL ESTATE “professionals” with poor sense of ethics, or ignorant.
As a result, many are facing foreclosure in the “crisis of today”.
How can foreclosure be a psychological impact in your life? Well, is invariably accompanied by anxiety and stress. Damaged credit, potential homelessness, having to uproot the children from their schools and friends, and embarrassment with peers are just a few of the immediate consequences of foreclosure.
Unchecked, anxiety can lead to DEPRESSION. There is a feeling of being lost and of hopelessness. DEPRESSION can be marked by a tired feeling, both mentally and physically. Self-doubt comes from the feelings of embarrassment and disgrace. The process fuels itself. The very feeling of insecurity leads to an inability to act.
The unemployed cannot seem to get out there and find another job. This of course, only helps to make the situation worse. It becomes a downward spiral. This kind of DEPRESSION invariably requires professional medical treatment, which ironically is outside the budget for the person that has just lost his home.
Other ailments too have been observed. Among those that have lost their homes through foreclosure, there is an above average tendency towards alcoholism, drug abuse, gambling addiction, eating disorders and other self-destructive conditions. In this environment, divorce is common as is a tendency towards violence. There is a positive correlation between the increase in foreclosures and an attendant increase in domestic abuse cases.
Yes, loss of the home through foreclosure is tragic. However, there are things that can be done to reduce both the financial and the psychological effects. Take action as early as possible. It is not convenient for your lender to foreclose, and it’s not worth to lose your calm and clarity of mind. This is the moment when you need the most of brain understanding to make a decision based on information and education about what is causing this crisis and how can you resolve the matter. There are experts and government programs that can help you.
In addition, even if you are not successful in staving off foreclosure you are likely to be better prepared for the consequences. You will have more time to make plans for the future. Perhaps more important, the very actions you take early on will help you fight off the feeling of helplessness, which so often leads to anxiety and depression.
I have a very good sense of understanding when it comes to distress situations especially FINANCIAL wise, I personally come from a very humble and low income family that always worked hard to make ends meet. This is why now I became a CDPE agent (certified distress property expert) it gives me the opportunity to have a voice and help when crisis comes in to our surroundings.
FORECLOSURE vs. SHORT SALE? Is like saying:
Depression, Ignorance and Financial Distress VS. Alternative to deal with Crisis.
Remember…
“Crisis means TURNING POINT!”
Don’t let this crisis take you to a negative place. Stop being IGNORANT and educate yourself to a better path in your life.
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