Scheduled foreclosure auctions soar in California

Banks set the clock for forced sales of more than 26,000 homes in the state in November, a 63% increase from October. Overall foreclosure notices nationwide fell last month.

By Alejandro Lazo, Los Angeles Times

December 15, 2011

Banks in November scheduled more than 26,000 homes to be sold at California foreclosure auctions, a 63% increase from October and a sign that a surge in discounted, bank-owned properties is on track to hit the market next year.

The uptick in scheduled auctions follows an increase last summer in homes entering the foreclosure process by receiving default notices and was largely driven by Bank of America. It appears that many of those homes are now quickly working their way through the process, said Daren Blomquist, a spokesman for RealtyTrac of Irvine, a data tracker that published the November data.

The increase played out nationally, hitting a nine-month high, even as overall foreclosure notices declined last month. Among the states, California had the biggest month-over-month increase in scheduled auctions, followed by Washington, 56%; Ohio, 53%; New Jersey, 44%; and New York, 38%.

"November's numbers suggest a new set of incoming foreclosure waves, many of which may roll into the market as [foreclosures] or short sales sometime early next year," said James Saccacio, co-founder and chief executive of RealtyTrac.

Nationally, overall foreclosure filings on U.S. properties — default notices, scheduled auctions and bank repossessions — totaled 224,394 in November, down 3% from October and off 14% from November 2010. About 1 in 579 homes received a foreclosure filing last month, by RealtyTrac's tally.

Celia Chen, a housing economist with Moody's Analytics, said she expected the number of foreclosures on banks' books to rise next year and for the number of discounted foreclosures on the market to remain elevated. That will continue to put pressure on home prices.

"The pace of sales will remain very slow, so the share of distressed sales is going to rise most likely through the middle of next year, and this will cause home prices to fall," Chen said. "Job growth is still weak, and then it is still a bit difficult to get those low rates. Lenders, in general, are still being pretty careful about who they write a mortgage for."

The West's Foreclosure Belt continued to be the hardest hit region in the nation. Nevada posted the highest foreclosure rate in the nation for the 59th month in a row, despite a decline in foreclosure activity because of a new law cracking down on those doing the foreclosing. California had the second-highest rate and Arizona the third in November.

California cities accounted for nine of the 10 metro areas with the highest foreclosure rates. Las Vegas was the only city outside of California in the top 10, coming in at No. 6. Stockton posted the nation's highest foreclosure rate for the second month in a row, followed by Modesto and Fresno.

In California, total foreclosure activity was up 15% from October and up 11% from November 2010. The number of homes entering foreclosure continued at an elevated level last month, down just 1% from October and up 12% from November 2010. Notices of trustee sales, or scheduled auctions, jumped 63% month over month and 14% over November 2010. Bank repossessions declined 15% from the previous month and were up 1% from the same month last year.

The uptick in California filings was driven by the auction notices. When such a notice is filed at a county recorder's office, a home can be sold within 21 days.

2012 Mortgage delinquencies seen dropping sharply

By EILEEN AJ CONNELLY, AP Personal Finance Writer

Wednesday, December 7, 2011

(12-07) 07:05 PST New York (AP) --

If the U.S. economy does not suffer more setbacks, the rate of mortgage holders behind on their payments should decline significantly by the end of next year, according to credit reporting agency TransUnion.
Mortgage delinquency rates — the ratio of borrowers 60 or more days behind on their payments — will likely tick up to about 6 percent through the first three months of 2012, TransUnion said in its annual delinquency forecast issued Wednesday.

But by the end of next year, it could drop to 5 percent, TransUnion said. 

That's well off the peak of 6.89 percent seen in the fourth quarter of 2009.
Chicago-based TransUnion's forecast takes into consideration several factors, including expectations that consumer confidence and the economy will improve next year.

Also, banks are expected to get a good portion of pending foreclosures off their books next year, said Charlie Wise, TransUnion director of research and consulting.

Banks are still working through a backlog of foreclosures created by issues including the robo-signing scandal, in which bank officials signed mortgage documents without verifying the information they contained. The issue surfaced last year in areas with large numbers of foreclosures, and banks had to backtrack and review foreclosures across the country to make sure their paperwork was in order.

That slowed down the process, Wise said, and left mortgages listed as delinquent for longer than they otherwise might have been, temporarily boosting delinquency rates.

Economic uncertainty has also contributed. In the third quarter of 2011, mortgage delinquencies saw their first uptick in six quarters, largely fueled by concerns over the economy as lawmakers were debating the U.S. debt ceiling and Europe's debt crisis was unfolding.

Helping to cut the mortgage delinquency rate are a slowly improving job market and a stabilizing housing market.

While the drop will be significant, the rate will remain well above the pre-recession average of 1.5 to 2 percent. "We have a long way to go to get back," said Steven Chaouki, a TransUnion vice president.

The situation with credit cards is much stronger. Card delinquencies — payments late by 90 days or more — dropped to their lowest levels in 17 years during the spring, then saw a slight increase in the third quarter, but still remained near historic lows.


Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2011/12/06/national/a210622S66.DTL#ixzz1gdJoL1WP

Barclays analyst sees housing rebound coming in 2012

by KERRI PANCHUK

Monday, December 5th, 2011, 11:34 am

Barclays Capital (BCS: 11.20 -6.90%) analyst Stephen Kim predicts a housing recovery buoyed by improving jobs numbers and the fact prices for nondistressed homes will have stabilized without government support.


"In the absence of a government homebuyer incentives, prices for non-distressed home sales have stabilized for almost a year," Kim said. "This is the most important trend in the housing industry right now, and we are amazed at how little attention it has been getting from the media and the street. This stability on the part of nondistressed prices has occurred despite a very high share of distressed activity and continued declines in overall prices."


Barclays said recent economic data — including higher job creation in November, housing starts and improved homebuyer traffic — point to some improvement potential in the sector.
In mid-2010, the federal homebuyer tax credit expired, leaving the housing market without training wheels for the first time since the 2008 economic meltdown. Yet, prices in some housing markets remained stable on the back end.


With its new outlook in the market, Barclays upgraded D.R. Horton's (DHI: 12.23 -3.62%) stock to buy and raised price targets for D.R. Horton, Lennar (LEN: 19.02 -2.96%), Toll Brothers (TOL: 20.39 -2.58%) and Meritage Homes(MTH: 22.39 -3.20%).
At the same time, the investment bank raised its 2012 earnings-per-share estimates for D.R. Horton, Lennar, Meritage Homes, Pulte (PHM: 6.07 -5.89%) and Toll Brothers, while lowering its estimates for KB Home (KBH: 7.89 -3.43%).


"Thus, the key to timing housing’s recovery depends primarily on when these first-time buyers decide it is safe to buy a house," Kim concluded.

Consumer Confidence on the Rise?

Consumer confidence improved in November. Please click here to read more.

Pending Home Sales Jump in October

Washington, DC, November 30, 2011Pending home sales rose strongly in October and remain above year-ago levels, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, surged 10.4 percent to 93.3 in October from 84.5 in September and is 9.2 percent above October 2010 when it stood at 85.5. The data reflects contracts but not closings.

Lawrence Yun, NAR chief economist, said improved contract activity is a hopeful sign. “Home sales have been plodding along at a sub-par level while interest rates are hovering at record lows and there is a pent-up demand from buyers who normally would have entered the market in recent years. We hope this is indicates more buyers are taking advantage of the excellent affordability conditions,” he said.

“Many consumers are recognizing that home buyers in the past two years have had one of the lowest default rates in history. Moreover, continued inventory declines are another healthy sign for the housing market,” Yun added.

The PHSI in the Northeast surged 17.7 percent to 71.3 in October and is 3.4 percent above October 2010. In the Midwest the index jumped 24.1 percent to 88.7 in October and remains 13.2 percent above a year ago. Pending home sales in the South rose 8.6 percent in October to an index of 99.5 and are 9.7 percent higher than October 2010. In the West the index slipped 0.3 percent to 105.5 in October but is 8.1 percent above a year ago.

“Although contract signings are up, not all contracts lead to closings. Many potential home buyers inadvertently hurt their credit scores and chances of getting a mortgage through easily averted actions, such as cancelling an old credit line while taking on a new one,” Yun said. “Such actions could unwittingly prevent buyers from obtaining a mortgage if their credit score is close the margins of qualifying, or they might get a loan but with less favorable terms.”

NAR encourages consumers to be aware of their credit score and actions which could hurt or enhance it. HouseLogic.com, the association’s consumer website devoted to all aspects of homeownership, offers tips for improving credit scores athttp://buyandsell.houselogic.com/articles/7-tips-improving-your-credit/.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales; it coincides with a level that is historically healthy.

NOTE: Existing-home sales for November will be reported December 21 and the next Pending Home Sales Index will be released December 29; release times are at 10:00 a.m. EST.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data in this release, other tables and surveys also may be found by clicking on Research.

REALTOR® is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS® and subscribe to its strict Code of Ethics. Not all real estate agents are REALTORS®. All REALTORS® are members of NAR.