Rising Rates Prompt Cash Buyers to Act

While higher mortgage rates have been blamed for the slowdown in pending home sales, they may be contributing to an increase in cash purchases, RealtyTracsuggested in a recent report.

In July, about 40 percent of residential property sales were all-cash transactions. The share presents an increase from 35 percent in June and 31 percent compared to July 2012.

Dallas experienced the biggest monthly increase in cash sales, at 82 percent, followed by St. Louis (+66 percent), Los Angeles (+32 percent), Riverside-San Bernardino in Southern California (+26 percent), Seattle (+21 percent), and Phoenix (+21 percent).

Daren Blomquist, VP at RealtyTrac, explained rising rates could be leading to a higher percentage of cash purchases, while “some non-cash buyers can no longer afford to buy, particularly in high-priced markets.”

Short sales also accounted for a bigger share of sales in July, increasing to 14 percent, up from 13 percent in the prior month and 9 percent from a year ago. Meanwhile, institutional investor purchases and sales for bank-owned properties fell flat, at 9 percent for each type of sale, unchanged from June and July 2012.

Overall, RealtyTrac reported an increase in July sales, with sales volume rising 4 percent from June and 11 percent compared to a year ago.

Despite the national gain, sales were still down year-over-year in eight states—California (-17 percent), Alabama (-14 percent), Arizona (-11 percent), Nevada (-7 percent), Georgia (-2 percent), New York (-2 percent), Hawaii (-1 percent), and Oregon (-1 percent).

Of those states, four still managed to post the biggest annual price gains. California led with a 31 percent annual increase in media home values. Price increases in Nevada, Arizona, and Georgia ranged from 20 to 27 percent over the last year.

Among the largest metro areas, the biggest annual declines in sales were concentrated in California, starting with San Francisco (-20 percent), Los Angeles (-20 percent), San Diego (-19 percent), and Riverside-San Bernardino (-14 percent).
Other large metro areas with significant decreases were Phoenix (-13 percent) and Atlanta (-8 percent).

On the other hand, sales were strongest in Chicago (+27 percent), Minneapolis (+23 percent), Baltimore (+21 percent), Boston (+20 percent), and Philadelphia (+ 20 percent).

EverBank to Provide $37M to Borrowers in Foreclosure Review Deal

EverBank came to an agreement with federal regulators to provide $37 million in relief payments to certain borrowers, leading to an end to the Independent Foreclosure Review process for the bank, the Office of the Comptroller of the Currency (OCC) said Friday.

The payment should cover 32,000 eligible mortgage customers whose homes were in any stage of foreclosure in 2009 and 2010, and checks should range from $1,050 to $125,000.

Eligible borrowers will be contacted directly. The release did not specify when the payments will be sent, but did say more information about payments will be announced in the “near future.”

The Jacksonville, Florida-based bank will also pay about $6.3 million to HUD-certified organizations or other groups dedicated to providing affordable housing and preventing foreclosure.

Additionally, EverBank is required to evaluate borrowers in foreclosure for a loan modification and create a special complaint process to resolve borrower complaints concerning credit report errors.

The OCC and the Federal Reserve have already come to separate foreclosure deals with 14 other banks, which included Aurora Bank, Bank of America, Citibank, GMACMortgage, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.

Fannie Mae Update Addresses Short Sale Credit Reporting Issue

Earlier this year, reports surfaced of short sales that were erroneously reported as foreclosures on consumer credit reports. When the matter was investigated, the issued turned out to be a computer problem.

According to reports, the standardized computer software the credit industry was relying on lacked a specific code for short sales.

In an updated noticeFannie Mae addressed the reporting issue, stating it “has been made aware that there are often inconsistencies in the credit data” for short sales.

Currently, lenders are having to manually underwrite loans to help borrowers become considered for a loan after the appropriate waiting period.

However, Fannie Mae is updating its automated underwriting system, known as Desktop Underwriter (DU), to allow lenders to disregard erroneous foreclosure information. More specifically, lenders will be able to input certain codes in an explanation field of the online loan application to indicate a short sale or deed-in-lieu. When DU sees the specific code, foreclosure information will be overlooked.

Fannie Mae typically requires a seven-year waiting period after a foreclosure and a two-year period for a short sale.

The changes to DU will apply to loan casefiles submitted to DU starting November 16,2013.

Time on Market Falls to 8.6 Weeks

Houses are selling faster in America than they have in three and a half years, the height of the homebuyer tax credit, as the recovery continues to roar through the summer months despite predictions the torrid pace of sales will slow.

New HousingPulse data show that three key barometers of the health of the housing market – time on market, number of sales offers, and the sales-to-list price ratio – all remained very strong for non-distressed properties in July. Non-distressed properties are the largest and fastest segment of this year’s housing market, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey results.

In the important time on market measurement, the average nationwide fell to a three-and-a-half year low of 8.6 weeks (based on a three month moving average) for non-distressed properties, HousingPulse found. That was not only way down from the 12.1 weeks seen in December but also down from 9.2 weeks in May.

On a regional basis, the average time on market for non-distressed properties sold in July ranged from a low of just 4.5 weeks in California to a high of 11.3 weeks in the Industrial Midwest (MO, IL, IN, OH and MI), HousingPulse data showed.

In terms of number of offers received, the July results also were very strong. Nationwide, HousingPulse recorded an average 2.3 offers for non-distressed properties sold in July. That was the fourth month in a row the national average has been at a three-and-a-half year high.

California once again led the nation in this category with an average 4.1 offers received on every non-distressed property sold in July. The Farmbelt (ND, SD, NE, KS, MN, IA and WI) was at the other end of the spectrum with an average of just 1.4 offers on every non-distressed property sold.

In the key sales-to-list price ratio category, a measure of how close a property’s sales price came to the listed price, July set a new high watermark, according to HousingPulse. The average sales-to-list price ratio for non-distressed properties nationwide hit 98.0 percent last month. That was up from 95.6 percent in December and 97.6 percent in May.

On a regional basis, California topped all other areas with an average sales-to-list price ratio of 101.8 percent in July. That meant that on average non-distressed properties in California sold for more than their asking price – a sign of a very hot housing market. On the other end, Florida had the lowest average sales-to-list price ratio in July for non-distressed properties at 95.0 percent.

Been thinking about selling your home?

If you’ve been thinking of selling your home, but don’t believe it is worth enough to cover what you owe, you might be pleasantly surprised. The reason? Prices have gone up significantly during the last year!

This simple fact has helped a market that only about one year ago was still bouncing off the bottom, begin the slow, but steady process of recovery. As a result, people are buying homes again.

I have a report that explains in detail why prices have gone up and why your home might be worth more than you think! The report is entitled “The Great Housing Rush,” and I believe you’ll be surprised by when you download and read the report. Once you are done, contact me today for a free market analysis.