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Daily Archives: February 16, 2011
Three Biggest Lenders Close Over Half of U.S. Mortgages
What is the Value of the Custom Designed Real Estate Blogsite? | Real Estate Tomato.com
Some Great Foreclosure Buys | Chappaqua NY Real Estate
A growing number of delinquencies and foreclosures on government-backed loans – combined with generous incentives for purchasing foreclosed homes owned by Fannie Mae, Freddie Mac and HUD – means buyers and investors will have plenty of opportunities in the coming months to pick up properties at bargain prices with low down payments and preferred financing.
“The cherished account right now is Fannie and Freddie,” said Tom Moon, a Fannie Mae and Freddie Mac approved broker with Pacific Moon Real Estate in Orange County, Calif. “Any broker would like to have Fannie and Freddie because they seem to have the most properties right now.”
Moon also noted the Fannie and Freddie properties are generally lower-priced, entry-level housing that is attracting the bulk of active buyers in the Orange County market.
Second quarter reports from Fannie and Freddie show that the two government sponsored enterprises (GSEs) are acquiring real estate owned (REO) properties through foreclosure at a significantly faster pace than overall growth in REO activity based on RealtyTrac data. Fannie Mae took ownership of 68,838 REO properties in the second quarter, an increase of 114 percent from the second quarter of 2009, and Freddie Mac took ownership of 34,662, a 58 percent increase from the previous year.
Overall REO activity was up 38 percent over the same time period, according to RealtyTrac, and the two GSEs together accounted for 38 percent of the total 269,962 REOs reported by RealtyTrac in the second quarter of 2010. Throw in the 23,435 foreclosed properties acquired by the Department of Housing and Urban Development through Federal Housing Administration-backed loans gone bad, and the three “Fs”, as economist Thomas Lawler calls them, accounted for 47 percent of all REO activity in the second quarter.
“In regard to Fannie and Freddie …the prime mortgage market deterioration in credit performance lagged that of the subprime/alt-A,” Lawler wrote in an e-mail. Lawler, who is founder of Lawler Economic & Housing Consulting, LLC and former senior vice president at Fannie Mae, added that serious delinquencies for Fannie and Freddie loans began rising in 2009, but foreclosure on many of those delinquent loans was delayed by foreclosure moratoria and other foreclosure prevention programs.
Freddie Mac acknowledged these delayed foreclosures in its second quarter report: “Our expectation of increasing distressed sales reflects, in part, the substantial backlog of delinquent loans accumulated by lenders over recent periods, due to various foreclosure suspensions, extended foreclosure timelines in certain states, servicer capacity constraints, and delays associated with the processing for HAMP. We expect many of these loans will transition to REO and be sold in the remainder of 2010 and 2011. This may have a dampening effect on prices as the market absorbs the additional supply of homes for sale.”
Fannie Mae provided similar predictions in its second quarter report: “We expect our REO inventory to continue to increase significantly throughout 2010.”
The report also included a key insight on how Fannie is regulating the flow of delinquencies to REO, stating that only 38 percent of its seriously delinquent (three months or more past due) single-family loans were in the process of foreclosure. This supports the notion of a “shadow inventory” of distressed properties yet to enter the foreclosure process, let alone be listed for sale on the market
Flipping Coming Back To Real Estate | Katonah NY Homes – Robert Paul’s blog
Last March, Miami-based Crescent Heights paid for The Palatine, a coveted high-rise near transit in the Courthouse neighborhood of Arlington, Va. Less than a year later, a number of sources say the 262-unit property is on the market again. And it’s not alone. Earlier this year, GlobeSt. reported that Crescent Heights had also put the Cityfront Place apartments, a 481-unit deal in Chicago that it bought in 2009, on the market.
Could the moves by Crescent Heights be a sign that the market is again ripe for buyers to buy and flip? Or is it just that a company that traditionally made its revenue by converting condos is once again flipping buildings? Though there’s data that suggests other recent buyers are putting their properties on the market, there’s certainly not a large enough sample size to call the practice a trend. But it’s something industry analysts are watching closely.
“Anecdotally, there are more of these buyers who purchased the properties in the bottom of the market and are now trying to flip them,” says Ben Thypin, senior market analyst with New York-based research firm Real Capital Analytics (RCA). “Perhaps its nascent trend if these deals end up closing.”
There’s one problem: There weren’t enough trophy deals that traded in 2009 and 2010 for there to be a real market for flippers. “You’re starting to see other guys do it, but there weren’t that many deals that physically traded,” says Mike Kelly, president and confounder for Denver-based Caldera Asset Management. “You had a bunch of Northwestern Mutual deals and a bunch of busted condos.”
In a list compiled by RCA exclusively for Multifamily Executive, most of the re-sales that have happened in recent months have mainly been things built in the '80s and '90s in tougher markets—with the exceptions of a 29-unit property in Brooklyn that sold in 2009 and again in 2010. Thypin says most had minor rehab work, but “nothing substantial.”
“Most of these properties are of lower quality,” Thypin says. “My initial theory was that they were of good quality, and the market was starved [for good quality], so that’s why they are being flipped. But there are properties on here from the '70s and '80s.”