Foreclosure filings at 3-year low

Robo-signing impacts seen as factor in 27% annual decline

By Inman News, Thursday, March 10, 2011.

Inman News™

Foreclosure-related filings against U.S. homes fell 14 percent from January to February and were down 27 percent from a year ago — the biggest year-over-year drop recorded by data aggregator RealtyTrac since it began issuing reports in 2005.

RealtyTrac said 225,101 homes were subjected to a default notice, auction notice or bank repossession in February — a three-year low that the company attributed to continued fallout from the robo-signing controversy.

RealtyTrac CEO James Saccacio noted that February is a short month, and that a small part of the decrease could also be attributed to bad weather.

But the "bottom line is that the industry is in the midst of a major overhaul that has severely restricted its capacity to process foreclosures," he said. "We expect to see the numbers bounce back, but that will likely take several months."

Foreclosure filings may never return to a March 2010 peak, when more than 367,000 properties were subjected to filings, he said.

Lenders repossessed 64,643 U.S. properties in February, down 17 percent from January and 18 percent from a year ago. That was a 22-month low, and a 37 percent drop from a September 2010 peak, when lenders added 102,134 homes to their real estate owned (REO) inventories.

Bank repossessions were down 24 percent from January and 35 percent from a year ago in states with a judicial foreclosure process. In states with a nonjudicial foreclosure process, repossessions were down 14 percent from January and 8 percent from a year ago.

In states with a judicial foreclosure process, default notices decreased 19 percent from January to February, and were down 48 percent from a year ago. In states with a nonjudicial foreclosure process, default notices decreased 13 percent from January and were down 31 percent from the same month a year ago.

Nevada posted the nation’s highest state foreclosure rate, as it has for 50 months running. One in every 119 Nevada housing units was subjected to a foreclosure filing in February, compared with one in 577 for the U.S. as a whole.

Arizona posted the nation’s second-highest state foreclosure rate (one filing per 178 housing unit), followed by California (1 in 239), Utah (1 in 273), Georgia (1 in 317), Michigan (1 in 324), Florida (1 in 472), Colorado (1 in 515) and Hawaii (1 in 541).

Properties with foreclosure filings

Rank	State name	Total	Filings per household (rate)	Percent change from year ago
—

LinkedIn has launched LinkedIn Today, a new social news product for business professionals.

At a press event Thursday at its headquarters in Mountain View, California, LinkedIn CEO Jeff Weiner and SVP of product Deep Nishar discussed the company’s new product strategy and revealed a few new products.

Weiner says that the company has three central goals as part of its quest to deliver value to its membership. First, LinkedIn wants to be the professional profile of record. Second, the company wants to be the primary source for professional insights. Finally, LinkedIn wants to be ubiquitous in the workplace.

SVP of product Nishar then took the stage to explain that vast amounts of business information pass through LinkedIn’s servers, things like profile views, connections, polls, sharing stats and more. The challenge is finding a way to synthesize and deliver this information in a way that gives its users actionable business data.

To start the event, the business network demoed two previously launched products: LinkedIn Skills and LinkedIn InMaps.

LinkedIn Today

Nishar says that products like Skills and InMaps provide its users unparalleled business insights, but that users have to dig into these products for the relevant data and insights. The company wants to take things a step further by delivering that data to its users’ fingertips.

LinkedIn says that two of its products fit into this model: the already-launched LinkedIn Signal and the new LinkedIn Today product.

LinkedIn Today is a professional news product that aggregates and delivers a personalized news experience to each user. Product manager Liz Walker says that it chooses stories based on what stories a user’s network is sharing.

It’s similar to apps like Paper.li in terms of design and functionality. Today provides different lenses for checking out top news in not just a user’s network, but in entire industries. For example, users can check out the hot stories in marketing and advertising, private equity or politics. The company says it’s a quick way for busy business users to get the top stories of the day.

LinkedIn also released a mobile version of LinkedIn Today that gives users the ability to check top stories within their network on the fly.

Notes: CoreLogic reports the year-over-year change. The headline for this post is for the change from December to January 2011. The CoreLogic HPI is a three month weighted average of November, December and January and is not seasonally adjusted (NSA).

From CoreLogic: CoreLogic® Home Price Index Shows Year-Over-Year Decline for Sixth Straight Month

CoreLogic … January Home Price Index (HPI) which shows that home prices in the U.S. declined for the sixth month in a row. According to the CoreLogic HPI, national home prices, including distressed sales, declined by 5.7 percent in January 2011 compared to January 2010 after declining by 4.7 percent in December 2010 compared to December 2009. Excluding distressed sales, year-over-year prices declined by 1.6 percent in January 2011 compared to January 2010 and by 3.2 percent in December 2010 compared to December 2009. Distressed sales include short sales and real estate owned (REO) transactions.

The January data shows home prices continuing to slide. Mark Fleming, chief economist with CoreLogic, said, “A number of factors continue to dampen any recovery in the housing market. Negative equity, which limits the mobility of homeowners, weak demand and the overhang of shadow inventory all continue to exert downward pressure on housing prices. We are looking out for renewed demand in the coming months as the spring buying season gets underway to hopefully reduce the downward pressure.”

Click on graph for larger image in graph gallery.

This graph shows the national CoreLogic HPI data since 1976. January 2000 = 100.

The index is down 5.7% over the last year, and off 32.8% from the peak.

This is the sixth straight month of year-over-year declines, and the seventh straight month of month-to-month declines. The index is now 1.6% below the previous post-bubble low set in March 2009, and I expect to see further new post-bubble lows for this index over the next few months.

Foreclosure filings at 3-year low

Robo-signing impacts seen as factor in 27% annual decline

By Inman News, Thursday, March 10, 2011.

Inman News™

Foreclosure-related filings against U.S. homes fell 14 percent from January to February and were down 27 percent from a year ago — the biggest year-over-year drop recorded by data aggregator RealtyTrac since it began issuing reports in 2005.

RealtyTrac said 225,101 homes were subjected to a default notice, auction notice or bank repossession in February — a three-year low that the company attributed to continued fallout from the robo-signing controversy.

RealtyTrac CEO James Saccacio noted that February is a short month, and that a small part of the decrease could also be attributed to bad weather.

But the "bottom line is that the industry is in the midst of a major overhaul that has severely restricted its capacity to process foreclosures," he said. "We expect to see the numbers bounce back, but that will likely take several months."

Foreclosure filings may never return to a March 2010 peak, when more than 367,000 properties were subjected to filings, he said.

Lenders repossessed 64,643 U.S. properties in February, down 17 percent from January and 18 percent from a year ago. That was a 22-month low, and a 37 percent drop from a September 2010 peak, when lenders added 102,134 homes to their real estate owned (REO) inventories.

Bank repossessions were down 24 percent from January and 35 percent from a year ago in states with a judicial foreclosure process. In states with a nonjudicial foreclosure process, repossessions were down 14 percent from January and 8 percent from a year ago.

In states with a judicial foreclosure process, default notices decreased 19 percent from January to February, and were down 48 percent from a year ago. In states with a nonjudicial foreclosure process, default notices decreased 13 percent from January and were down 31 percent from the same month a year ago.

Nevada posted the nation’s highest state foreclosure rate, as it has for 50 months running. One in every 119 Nevada housing units was subjected to a foreclosure filing in February, compared with one in 577 for the U.S. as a whole.

Arizona posted the nation’s second-highest state foreclosure rate (one filing per 178 housing unit), followed by California (1 in 239), Utah (1 in 273), Georgia (1 in 317), Michigan (1 in 324), Florida (1 in 472), Colorado (1 in 515) and Hawaii (1 in 541).

Properties with foreclosure filings

Rank	State name	Total	Filings per household (rate)	Percent change from year ago
—

Mortgage brokers challenge new compensation rules

Lawsuits claim ban on rebates will give bank loan originators unfair advantage

By Inman News, Thursday, March 10, 2011.

Inman News™

Two groups representing mortgage brokers and other real estate industry professionals have filed suit against federal regulators over new rules governing loan officer compensation that are scheduled to take effect April 1.

The Federal Reserve drafted the rules to implement provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act that are intended to prevent loan originators from steering borrowers into higher-interest-rate loans.

The rules, which stipulate that loan officer compensation cannot be based on a mortgage transaction’s terms, will prevent mortgage brokers from collecting rebates on higher-interest loans known as yield-spread premiums, groups representing mortgage brokers say.

Critics of yield-spread premiums say they can serve as an incentive for mortgage brokers to steer borrowers into high-interest loans, if brokers pocket the rebates themselves rather than applying them to borrower’s closing costs.

Supporters say yield-spread premiums allow borrowers to finance their closing costs and loan origination fees by paying a higher interest rate on their loan. Those costs can be a "major obstacle to homeownership" for those who can’t afford to pay them out of pocket, the National Association of Independent Housing Professionals said in a lawsuit filed Monday.

The Fed’s rule is "arbitrary and capricious," the NAIHP said in its complaint, because loan officers employed by banks will still be able to provide that same option to borrowers.

Bank loan officers offer loans with reduced or no upfront settlement costs in exchange for a higher rate on the borrower’s mortgage, and recoup those costs by adding a "service release premium" when they sell mortgages with higher interest rates in the secondary market, NAIHP’s suit said.

In overhauling the Real Estate Settlement Procedures Act (RESPA), the Department of Housing and Urban Development (HUD) "expressly approved (yield-spread premiums) as a way for borrowers … to pay settlement costs, including compensation to their broker for loan origination services," NAIHP said.

The lawsuit seeks a temporary restraining order and preliminary injunction barring the Federal Reserve from enforcing the rule. The public would be better served if the newly formed Consumer Financial Protection Bureau drafted a rule to implement Congress’ intent in the Dodd-Frank bill, the group said.

The National Association of Mortgage Brokers today said it’s filed its own lawsuit with the same goal.

The section of the rule NAMB objects to "could cause devastating and irreparable harm to small-business mortgage brokers," the group said.

The Fed’s rule-making authority under the Truth in Lending Act (TILA) is scheduled to be transferred to the Consumer Financial Protection Bureau in July.

The Fed announced on Feb. 1 that it would not complete pending aspects of four rule-making proceedings, which included changes to TILA mortgage loan disclosures, restrictions on certain advertising practices and sales practices for reverse mortgages, and changes to the disclosure obligations of loan servicers.

The loan officer compensation rules were already finalized when the Fed made that announcement.

The Small Business Administration’s Office of Advocacy has cautioned that mortgage brokers may have difficulty determining if they are in compliance with the rules, despite additional guidance issued by the Fed in January.

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6 straight months of home-price declines

CoreLogic: Depreciation highest in Idaho, Alabama, Arizona

By Inman News, Thursday, March 10, 2011.

Inman News™

U.S. home prices fell for the sixth straight month in January as negative equity limited the mobility of homeowners, and weak demand and an overhang of shadow inventory continued to pressure home prices, data aggregator CoreLogic said today.

A home-price index compiled by CoreLogic showed national home prices down 5.7 percent from a year ago — an even steeper decline than the 4.7 percent year-over-year drop seen in December.

January’s decline brought the drop in home prices from their April 2006 peak to 32.8 percent, CoreLogic said.

When distressed sales are excluded from the index, however, the index showed home prices declining by 1.6 percent in January and 3.2 percent in December, to 22.2 percent below peak.

The five states with the greatest depreciation were Idaho (-15.7 percent), Alabama (-12.1 percent), Arizona (-11 percent), Oregon (-9.9 percent) and Utah (-9.8 percent).

The five states with the highest appreciation were West Virginia (5.5 percent), North Dakota (3.3 percent), New York (1.9 percent), Hawaii (0.7 percent) and Wyoming (0.2 percent).

CoreLogic home price index

Market	Change from year ago	Excluding distressed
Phoenix-Mesa-Glendale, Ariz.	-10.5%	-5%
Atlanta-Sandy Springs-Marietta, Ga.	-7.9%	-3.7%
Chicago-Joliet-Naperville, Ill.	-5.7%	-3.9%
L.A.-Long Beach-Glendale, Calif.	-4.1%	-0.9%
Washington, D.C.-Arlington-Alexandria	-3.5%	1.2%
Philadelphia, Pa.	-2.8%	-1.1%
Riverside-San Bernardino-Ontario, Calif.	-1.6%	0.2%
Dallas-Plano-Irving, Texas	-0.6%	2%
Houston-Sugar Land-Baytown, Texas	0.3%	0.8%
New York-White Plains-Wayne	2.1%	3.3%

Source: CoreLogic

In another report released this week, CoreLogic estimated that 11.1 million, or 23.1 percent, of all residential properties with a mortgage were in negative equity at the end of fourth-quarter 2010. That’s up from 10.8 million, or 22.5 percent, in the third quarter.

Nevada had the highest negative equity percentage with 65 percent of all of its mortgaged properties underwater, followed by Arizona (51 percent), Florida (47 percent), Michigan (36 percent) and California (32 percent).

CoreLogic said the consensus among analysts is that home prices will fall another 5 percent to 10 percent in 2011. That would imply that negative equity will rise no more than 10 percentage points, and probably less because foreclosures are removing negative equity borrowers, CoreLogic said.

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