AOL Real Estate - Blog http://realestate.aol.com/blog AOL Real Estate - Blog http://realestate.aol.com/blog/media/feedlogo.gif AOL Real Estate - Blog http://realestate.aol.com/blog en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/Avoiding Foreclosure: More and Better Options Available Nowhttp://realestate.aol.com/blog/2012/05/03/avoiding-foreclosure-more-and-better-options-available-now/http://realestate.aol.com/blog/2012/05/03/avoiding-foreclosure-more-and-better-options-available-now/http://realestate.aol.com/blog/2012/05/03/avoiding-foreclosure-more-and-better-options-available-now/#commentsFiled under: ,

If you're teetering on the edge of foreclosure, you may have a much better chance of finding your footing than in years past. Servicers of delinquent or at-risk mortgages appear poised to ramp up their use of alternatives to foreclosure this year, an industry shift that could enable many more homeowners to hold onto their homes through "home retention actions."

Failing that, if mortgage borrowers have to give up their homes, they might at least find an option that's preferable to foreclosure.

The analytics firm CoreLogic recently reported that completed foreclosures and the foreclosure inventory in March 2012 have dropped from last year; that indicates banks increasing use of alternatives to foreclosure, a CoreLogic analyst says. The data release showed that the foreclosure inventory had fallen from 1.5 million in March 2011 to 1.4 million in March 2012. The drop came even as foreclosures have stalled in the last year. (Stalled foreclosures would normally increase inventory if everything else were equal.) Completed foreclosures in first quarter of 2012 numbered 198,000, down from 232,000 in first quarter 2011, according to the CoreLogic news release.

"Compared to a year ago, the number of completed foreclosures has slowed," Anand Nallathambi, chief executive officer of CoreLogic, said in a statement. "Since the foreclosure inventory is also coming down, this suggests that loan modifications, short sales, deeds-in-lieu are increasingly being used as an alternative to foreclosures to clear distressed assets in our communities."

Short Sales Are Heating Up

The short sale is one tactic that banks are using more often to resolve at-risk and delinquent mortgages. In short sales, homeowners sell their homes for less than their mortgages are worth, resulting in losses for banks.

But a short sale is preferable to a foreclosure for both a mortgage-owner and a borrower: It enables a borrower to mitigate damage to his or her credit score, and allows a bank to limit the loss it might incur from a foreclosure. (For more details see AOL Real Estate's short sale guide.)

"Banks have put many foreclosures on hold over the past year and a half while waiting for the robo-signing settlement," says chief economist of listing service Trulia Jed Kolko, referring to the settlement over foreclosure abuses that was finally reached between major mortgage servicers and 49 states in February. And short sales have been increasing, relative to foreclosures, for months now, he says.

Short sales grew at a rapid annual pace last year, according to foreclosure marketplace RealtyTrac. Pre-foreclosure sales, which encompass short sales, rose 33 percent from January 2011 to January 2012. In fact, Bloomberg reports that short sales actually surpassed foreclosure sales in January 2012, citing data from Lender Processing Services (which works with major banks and others in the mortgage industry).

Word on the street corroborates the finding, Zillow chief economist Stan Humphries says: "Anecdotally, we do hear that they're stepping up short sales quite aggressively."

The trend seems likely to accelerate: Twin mortgage guarantors Fannie Mae and Freddie Mac announced timelines in April that require servicers of their mortgages, to respond to short sale inquiries from homeowners within a month, or otherwise face penalties.

And Bank of America recently said that it now intends to approve or reject short sales within 20 days. Both timelines, if adopted, would streamline a process that has been known to drag on for many months, often only to end in rejection.

The timelines may spur an increase in short sales by, Humphries says, reducing "a lot of the uncertainty that has occurred here before, where your experience in heading down that path is highly variable."

Loan Modifications Set to Soar

"Home retention actions," also have ticked up recently, rising slightly in the last two quarters of 2011, according to the Office of the Comptroller of the Currency. Like short sales, retention actions are used to stave off foreclosure. And they also seem poised to increase in coming months.

One home retention action, the loan modification, is a method that market observers are watching closely: Possible industry developments may precipitate a wave of them.

For one, the Obama administration recently tripled the subsidies that are offered under the Home Affordable Modification Program, which provides loan modifications to delinquent or distressed homeowners. Experts say that may incentivize banks, private investors and even mortgage guarantors Fannie Mae and Freddie Mac (all of whom have put up some resistance to HAMP modifications in the past) to participate in the program.

Among other qualifications: To be eligible for HAMP, you must prove a financial hardship, be at-risk or delinquent on your loan, and have enough monthly income to support a modified payment. (See the rest of the requirements by visiting makinghomeaffordable.gov.)

Then there's the mammoth sum of principal reductions, which often are a part of loan modifications, that the nation's five biggest servicers are compelled to perform in the next three years: The banks may forgive well over $30 billion in mortgage debt in order to satisfy credits that they agreed to pay -- in the form of principal reduction -- as part of the robo-signing settlement.

We should see "an uptick in principal reductions and loan modifications there" for mortgages backed by the five banks involved in the settlement, Humphries says.

Bank of America, one of the banks that agreed to the settlement, has said it will reduce about 200,000 mortgages by an average of $100,000 each.

If you think you may qualify for a loan modification under the settlement, contact your lender or visit nationalmortgagesettlement.com for more information. But keep in mind: Mortgages guaranteed by Fannie Mae and Freddie Mac (which underwrite about 60 percent of U.S. mortgages, as well as mortgages insured by the FHA) are not eligible for modifications under the settlement.

Another possible development could also boost the number of loan modifications in 2012. The Federal Housing Finance Agency may approve principal reduction as a home retention action for Fannie Mae and Freddie Mac-backed loans. Increasing pressure from policymakers, and a recent study that found that this strategy would save the mortgage giants money, may pressure the FHFA to finally give permission to the twin mortgage guarantors to allow servicers of its mortgages, typically banks, to reduce principal on mortgages.

More on AOL Real Estate:
Find out how to calculate mortgage payments.
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Learn how to Sell a Home in a Short Sale

 

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]]>alternatives to foreclosureavoiding foreclosureforeclosure alternativeshome retention actionsloan modificationsmortgage modificationsprincipal reductionsshort salesTeke Wiggin2012-05-03T13:45:00+00:00'How Our Home Was Saved From Foreclosure'http://realestate.aol.com/blog/2012/04/24/how-our-home-was-saved-from-foreclosure/http://realestate.aol.com/blog/2012/04/24/how-our-home-was-saved-from-foreclosure/http://realestate.aol.com/blog/2012/04/24/how-our-home-was-saved-from-foreclosure/#commentsFiled under: ,



By Les Christie

NEW YORK -- Tamera Hewlett-Vallejo and her husband, Tom, came within a whisker of losing their Sacramento, Calif., home in a foreclosure auction last month. But as a result of the $26 billion national mortgage settlement, the Vallejos were given a last-minute reprieve.

Their mortgage lender, Bank of America, called off the auction, then offered to slash the couple's mortgage by more than $85,000 and cut their interest rate to 4.6 percent from 6.7 percent. As a result, the couple's mortgage payment would be $570 cheaper at about $2,100 a month.

The Vallejos are among the earliest recipients of one of the foreclosure settlement's biggest windfalls. As part of the deal, which was struck between the nation's five biggest mortgage lenders and the states' attorneys general, roughly 1 million borrowers will have their mortgage principal slashed by as much as $100,000.

Early last month, Bank of America said it had identified more than 200,000 borrowers who pre-qualified for principal reductions. The bank has yet to reach out to these homeowners, however, saying it will begin to send out letters to this group within a week or two, according to spokesman Rick Simon. It aims to reach most eligible borrowers within six months.

But there is a small group of homeowners, including the Vallejos, who are either already in the mortgage modification pipeline or in danger of losing their home, who have already been contacted by the bank.

A Last Minute Reprieve

The Vallejo's home was scheduled to be sold in a foreclosure auction at 9:30 a.m. on a Monday in early March. "We literally went to church on Sunday praying for help," said Hewlett-Vallejo.

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The day of the auction, however, the Vallejos discovered that their address wasn't on the list of properties on the block. Later that day, a representative from Bank of America called to tell them that they had qualified for a principal reduction under the settlement.

"I sat with tears running down my face," said Hewlett-Vallejo.

Tamera, a real estate agent, and Tom, who is a teacher, had bought the three-bedroom wood-frame cottage in 2001 for less than $240,000. In the midst of the housing boom, when their home's value had soared to more than $430,000, the couple refinanced in order to get a lower rate and take out extra cash for some home improvements.

Then, in 2009, a commercial real estate deal that Tamera invested in went sour and ended up in litigation. The couple soon fell behind on their mortgage.

By September 2010, the missed payments -- and ensuing fees -- brought their mortgage balance up to about $385,000. Meanwhile, their home's value had plunged by more than 30 percent to about $300,000.

For two years, the Vallejos tried to get Bank of America to modify their mortgage. But the bank kept denying the request, saying it needed additional paperwork.

"Each time, we started over with a new person and some new requirements based on that person's or the underwriter's perspective," she said.

By the day of the foreclosure auction, the Vallejos assumed that they were out of luck.
"We didn't know what we were going to do," said Hewlett-Vallejo. They hadn't even made new living arrangements.

A few days after finding out the auction was off, the Vallejos received the details of their modification from Bank of America. The bank offered to bring their balance to $300,000. They'd still be slightly underwater, but the principal reduction alone would save them about $400 a month.

Bank of America said its goal is to lower housing payments to no more than 31 percent of income. "If the payment is still above the affordable payment target, the second step is to lower the interest rate," said Simon.

In this case, the bank also offered to reduce their interest rate, which would reduce their monthly payments by another $170 or so, and to keep the term of their loan to the existing 23 years that the Vallejos had left to pay.

But there is a catch. "We're required to make three months of trial payments -- April, May and June," say Hewlett-Vallejo.

If they miss a payment, the deal is off and the Vallejo's home heads back to the auction block.

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]]>Bank of America mortgage settlementforeclosure auctionhome saved from foreclosurenational mortgage settlementprincipal reductionprincipal reduction programreduced mortgage principalCNNMoney2012-04-24T12:10:00+00:00Living on a Prayer: Church Foreclosures Skyrockethttp://realestate.aol.com/blog/2012/03/13/these-days-even-god-cant-get-a-loan-church-foreclosures-skyro/http://realestate.aol.com/blog/2012/03/13/these-days-even-god-cant-get-a-loan-church-foreclosures-skyro/http://realestate.aol.com/blog/2012/03/13/these-days-even-god-cant-get-a-loan-church-foreclosures-skyro/#commentsFiled under: ,



By Rich Smith

The Bible tells us that "it is easier for a camel to go through the eye of a needle, than for a rich man to enter the kingdom of God." Foreclosing on his pastor probably doesn't make the trick any easier.

There's a new development in the housing crisis: Foreclosures are hitting houses of worship.

According to a report from Reuters, 2011 was a record year for foreclosures on church buildings. Prior to the Great Recession, bank seizures of houses of worship were rarer than atheists in foxholes, with only a handful of foreclosures occurring in the decade prior to 2008.

That all changed when the mortgage crisis hit.

Just as homeowners in the 1990s and early 2000s rushed to take advantage of rising house values and fatter wallets to spend lavishly on real estate, the real estate bubble encouraged irrational exuberance in the pews. Congregations took out loans to refurbish and enlarge their church buildings. Unfortunately, these loans were not the 30-year fixed mortgages that most of us are familiar with. Instead, churches took out commercial loans -- five-year loans with balloon payments at the end.

The usual procedure was to refinance loans when their balloon payments came due. Problem is, loans predicated on the inflated real estate assessments that prevailed before 2007, once reassessed for possible refis in 2010 and 2011, were found to lack sufficient principal. Banks began turning down refinancing applications, and churches were told to either pay off their loans (i.e., make the balloon payment) or go into foreclosure.

Result: From 2010 to present, bank foreclosures on church buildings have skyrocketed -- 270 foreclosures since 2010; a record 138 foreclosure sales in 2011 alone.

Forgive Them, Father

Loan officers asked about this trend are, not surprisingly, chagrined. As one banker named in the Reuters piece complained: "It is not the practice of the Bank to [use] foreclosure in the absence of good cause. We trust the community will not rush to judgment without full knowledge of all the facts."

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Better pray for a miracle, then. It might make all the economic sense in the world to foreclose on a debtor that's unable to pay its bills. If a debtor can't pay, the logical thing to do is foreclose, resell the property, and try to get back at least part of the money lent. But when a bank does this to a church, it's playing with fire (and brimstone).

Whatever fate may await foreclosing bankers in the afterlife, the perils in the here and now are clear. Foreclose on a family home, and you've made a handful of people angry. Foreclose on a church, though, and you've taken your PR nightmare wholesale. In one step, you've won your bank the ill will of hundreds of congregants -- or more. People who will, in all likelihood, spend the rest of their mortal lives regaling friends, neighbors, and other potential banking clients with the story of how they "will never bank with XYZ bank again -- those guys foreclosed on my church!"

And it gets worse. Say a bank feels it has no choice but to foreclose on a church. What's it supposed to do with the property? Houses are no picnic to sell these days: Who's going to buy a house of worship out of foreclosure?

A Silver Lining

Depending on square footage and nearby foot-traffic patterns, a slightly used church might make an appealing location for, say, a new Starbucks. McMansion shoppers might be another target demographic for the used church market, if the churches aren't too small.

But as it turns out, Reuters reports that there is one bit of good news for the banks. Financial institutions foreclosing on delinquent church buildings have so far been able to resell most of their inventory to other congregations.

Just as in the housing market, where foreclosures and falling prices created opportunities for new buyers to purchase starter homes, congregations that used to squeeze into a rented school gymnasiums or other temporary quarters are finding opportunities to buy starter churches on the cheap.

As William Cowper once observed: "God moves in a mysterious way, his wonders to perform."

Motley Fool contributor Rich Smith does not own shares of any companies named above. The Motley Fool owns shares of Starbucks. Motley Fool newsletter services have recommended buying shares of and writing covered calls on Starbucks.

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See also:
Strategic Default: Would Half of Homeowners Walk Away?
Short Sales: The Long and Short of Them


 

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]]>bankrupt churchesbanks foreclosue on churcheschurch foreclosurechurch foreclosure boomforeclosure crisisThe Motley Fool2012-03-13T12:40:00+00:00How Obama's FHA Loan Plan Can Help You Refinancehttp://realestate.aol.com/blog/2012/03/07/how-obamas-fha-loan-plan-can-help-you-refinance/http://realestate.aol.com/blog/2012/03/07/how-obamas-fha-loan-plan-can-help-you-refinance/http://realestate.aol.com/blog/2012/03/07/how-obamas-fha-loan-plan-can-help-you-refinance/#commentsFiled under: , ,

Obama housingWASHINGTON -- The Obama administration is offering some relief to homeowners who have government-backed mortgages. Under a program President Barack Obama unveiled Tuesday, the government would cut the fees it charges to insure those borrowers.

The idea is that lower fees would persuade millions to refinance their loans while interest rates are near record lows. It's the administration's latest attempt to minimize the damage from the foreclosure crisis and help more people keep their homes.

Here's a look at the program:

Q: What has the administration proposed?

A: Borrowers with mortgages insured by the Federal Housing Administration could refinance at half the current fee. A lower fee would follow years of rising mortgage insurance premiums. FHA is also reducing an up-front premium when it initiates a loan. The FHA charges the fees on top of standard interest rates because it backs riskier borrowers.

Q: Who's eligible?

A: The administration estimates 2 million to 3 million homeowners. Most are first-time or low-income homebuyers. The FHA requires only a 3.5 percent down payment. And borrowers don't have to prove that they're employed. FHA borrowers can also refinance even if they're "underwater," or owe more on their mortgage than their home is worth.

Q: How much will those who get the reduced fees actually benefit?

A: The fee is now 1.15 percent of the mortgage balance each year. Those fees are unappealing to many borrowers who want to refinance. The plan would cut the fee to 0.55 percent. The current up-front premium would also be lowered, from 1 percent of the loan balance to .01 percent. As a result, a borrower who owed $175,000 on their mortgage could save about $1,750 in one-time fees and more than $1,000 per year in annual fees by refinancing. The borrower could save nearly $150 a month more if the interest rate declined from 5 percent to 4 percent.

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Q: Can those who are eligible be excluded from other government housing programs?

A: Most of the other federal housing programs, including its signature refinancing and mortgage modification programs, target other types of homeowners. So there's little overlap with the FHA's refinancing plan. For example, the administration's refinancing and mortgage modification programs are for homeowners whose mortgages are owned or backed by government-controlled Fannie Mae and Freddie Mac, not the FHA.

Q: Will it work?

A: Possibly, if the reduced fees are well-advertised and borrowers are confident of saving on their mortgage payments by refinancing. If homeowners are wary of paying even a small amount to refinance, the program could fail to reach millions who are eligible. Economists said the lower fees are a modest way to help the troubled housing market but won't turn it around. "The only thing that will do that are low interest rates and job growth," said Susan Wachter, a professor of real estate at the University of Pennsylvania's Wharton School. Stan Humphries, chief economist at the real estate website Zillow.com, predicted that a separate plan to compensate military service members who were wrongfully foreclosed upon would be a big help to that group. It's unclear how many military service members would benefit.

Copyright 2012 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.

See also:
Barbara Corcoran on Refinancing Do's and Don'ts
Homeowners Association Forecloses on Vet for $340
Foreclosure Starts and Sales Spiked in January, Report Says

Obama Wants to Make Refinancing Easier

 

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]]>barack obamafha loansfha refinancingforeclosure crisishome loansloan refinancingmortgagesObama AdministrationObama housing planobama military foreclosuresobama mortgage feesobama mortgage refinancing planThe Associated Press2012-03-07T16:40:00+00:00Obama: Mortgage Help Coming for Military, FHA Borrowershttp://realestate.aol.com/blog/2012/03/06/obama-mortgage-help-coming-for-military-fha-borrowers/http://realestate.aol.com/blog/2012/03/06/obama-mortgage-help-coming-for-military-fha-borrowers/http://realestate.aol.com/blog/2012/03/06/obama-mortgage-help-coming-for-military-fha-borrowers/#commentsFiled under: , ,



WASHINGTON -- President Barack Obama is aiming mortgage relief at members of the military as well as homeowners with government-insured loans, the administration's latest efforts to address a persistent housing crisis.

In his first full news conference of the year Tuesday, Obama was to announce plans to let borrowers with mortgages insured by the Federal Housing Administration refinance at lower rates, saving the average homeowner more than $1,000 a year. Obama also was detailing an agreement with major lenders to compensate service members and veterans who were wrongfully foreclosed upon or denied lower interest rates.

A senior administration official described Obama's proposals to The Associated Press, ahead of the announcement, on the condition of anonymity.

The efforts Obama is announcing do not require congressional approval and are limited in comparison with the vast expansion of government assistance to homeowners that he asked Congress to approve last month. That $5 billion to $10 billion plan would make it easier for more borrowers with burdensome mortgages to refinance their loans.

Lower Refinancing Fee

Under the housing plans that Obama was to announce Tuesday, FHA-insured borrowers would be able to refinance their loans at half the fee that the FHA currently charges. FHA borrowers who want to refinance now must pay a fee of 1.15 percent of their balance every year. Officials say those fees make refinancing unappealing to many borrowers. The new plan will reduce that charge to 0.55 percent.

With mortgage rates at about 4 percent, the administration estimates a typical FHA borrower with $175,000 still owed on a home could reduce monthly payments to $915 a month and save $100 a month more than the borrower would have under current FHA fees.

Though 2 million to 3 million borrowers would be eligible, the administration official would not speculate how many would actually seek to benefit from the program. The FHA provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. The loans typically go to homeowners who do not have enough equity to qualify for standard mortgages. It is the largest insurer of mortgages in the world.

Review of Vets' Foreclosures

For service members and veterans, Obama will announce that major lenders will review foreclosures to determine whether they were done properly. If wrongly foreclosed upon, service members and veterans would be paid their lost equity and also be entitled to an additional $116,785 in compensation. That was a figure reached through an agreement with major lenders by the federal government and 49 state attorneys general.

Under the agreement, the lenders also would compensate service members who lost value in their homes when they were forced to sell them due to a military reassignment.

Obama is holding the news conference in the midst of a modestly improving economy. But international challenges as well as a stubbornly depressed housing market remain threats to the current recovery and to his presidency.

Obama has not held a full news conference since November. The White House scheduled this one on the same day as the 10-state Super Tuesday Republican presidential nominating contests. While aides insisted the timing was coincidental, it follows a pattern of Obama seeking the limelight when the attention is on the GOP.

The news conference comes amid a new sense of optimism at the White House. Obama's public approval ratings have inched up close to 50 percent. The president recently won an extension of a payroll tax cut that was a main element of his jobs plan for 2012. Economic signals suggest a recovery that is taking hold.

Still, he will probably face questions about the pace of the recovery. The unemployment rate in January was 8.3 percent, the highest it has been in an election year since the Great Depression. With rising gasoline prices threatening to slow the economy, Obama has also faced attacks from Republicans over his energy policy.

Iran's nuclear ambitions will also command attention in the aftermath of his meeting Monday with Israeli Prime Minister Benjamin Netanyahu. Tension over Iran has already contributed to higher oil prices, and Israel's threats of pre-emptive military strikes to prevent Tehran from building a nuclear bomb have dominated Washington discourse for weeks.

Other developments in the Middle East, where turmoil has soured some of the promise of last year's Arab Spring, are also likely to be addressed. Syria's bloody crackdown on protesters has increased pressure on Obama to intervene. Republican Sen. John McCain on Monday urged the United States to launch airstrikes against Syrian President Bashar Assad's regime to force him out of power.

Copyright 2012 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.

Also see:
Only 5% of Underwater Homes May Qualify for Write-Downs
REO to Rental: Fannie Mae Dips Further Into Foreclosure Pool


Obama's Address Centers on Economic Fairness

 

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]]>Federal Housing Administrationfha borrowersfha financingfha loansforeclosures militaryforeclosures veteransHUDmilitary homeownersmortgage settlementobamaObama news conferencerefinancing feesshaun donovanThe Associated Press2012-03-06T10:00:00+00:00Fannie and Freddie Freeze Foreclosures for the Holidayshttp://realestate.aol.com/blog/2011/12/02/fannie-and-freddie-freeze-foreclosures-for-the-holidays/http://realestate.aol.com/blog/2011/12/02/fannie-and-freddie-freeze-foreclosures-for-the-holidays/http://realestate.aol.com/blog/2011/12/02/fannie-and-freddie-freeze-foreclosures-for-the-holidays/#commentsFiled under: ,

By

Fannie Mae, Freddie Mac, and other mortgage providers have a Christmas present for struggling homeowners: They won't get thrown out of their houses homes during the holiday season.

Fannie Mae and Freddie Mac will not foreclose on any homeowners between December 19 and January 2, according to statements on their web sites. Private mortgage providers, such as JPMorgan Chase, Wells Fargo, and Bank of America, also said they plan to suspend their evictions during the holidays, according to CNNMoney.

"The holidays are meant for families to spend time together," Terry Edwards, executive vice president at Fannie Mae, said in a statement.

That holiday spirit will only go so far. During the holidays, Fannie Mae and Freddie Mac acknowledged that they will continue the administrative and legal proceedings leading to foreclosure in their statements.

Read the full story at The Huffington Post.

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Also see:
Should You List Your Home During the Holidays?
5 Ways to Nab Autumn Buyers Before They Hibernate
Family Wrongly Booted From Home Returns To Wreckage

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]]>Fannie Freddie freeze foreclosuresFannie MaeForeclosure holidaysFreddie Macno foreclosures holidaysTerry Edwards Fannie MaeThe Huffington Post2011-12-02T17:16:00+00:00The New Homeless: Living Behind the Wheelhttp://realestate.aol.com/blog/2011/11/23/the-new-homeless-living-behind-the-wheel/http://realestate.aol.com/blog/2011/11/23/the-new-homeless-living-behind-the-wheel/http://realestate.aol.com/blog/2011/11/23/the-new-homeless-living-behind-the-wheel/#commentsFiled under: , , , ,



During the Great Depression, people who were forced to live in their cars were known as "Ford families." Today, they go by the far more impersonal name of the "vehicular homeless," and you can count 45-year-old Carey Fuller and her two daughters, 8 and 17, among them.

The Fullers (pictured above) became homeless in April 2004 when Carey lost her job in the financial services sector in Seattle. With the job loss came a move from a three-bedroom apartment into a two-bedroom -- but that wasn't enough to cut expenses. Seeing what was waiting for her around the corner, Fuller took her final bit of income, a tax refund, and used it to buy an RV that she and her girls could live in. After a while, even gas and maintenance on the Winnebago became more than she could afford, so she traded down for a minivan. Fuller takes whatever work she can find, often landing part-time jobs. She also blogs about her life as a homeless mother living in a van.

As the economy continues to circle the drain and the number of foreclosures rises, more and more people are following in Fuller's tracks. Some cities, like Venice and Palo Alto in California, have even created parking areas for people who live in their vehicles.

"Cars are the new homeless shelters," says Joel John Roberts, CEO of PATH (People Assisting the Homeless) Partners, the largest services provider for the homeless in Los Angeles County. Car and van dwellers don't show up in U.S. Census Bureau data because census workers don't knock on car windows, Roberts says.

How They Got There

How did so many families wind up sleeping in cars, vans and RVs? In most cases, they were hit with a job loss or health crisis that cost them their home. The move from roof to backseat is often swifter than expected, and in the case of those whose homes have been foreclosed, there is often a sense of disbelief that the actual day of eviction will come. Departures are often fast and furious, with things thrown into a van. Often, the newly evicted don't travel far; they camp out in the neighborhood where they lived. They quickly learn which public parks leave their restrooms unlocked and that joining the local YMCA provides access to a shower.

In some cases, it's divorce, not unemployment, that puts people in their cars at night. Rudy Salinas, director of outreach for PATH, recalls finding a man living in his car in a supermarket parking lot a few months ago. The man had a stack of neatly dry-cleaned uniforms next to him, which he wore to work each day. But at night, separated from his wife and unable to support two households, he slept in the market's parking lot.

Salinas said that PATH did its own census of the homeless population in Hollywood, Calif. They counted 748 people without homes; 151 of them were car dwellers.

"In my 19 years of doing outreach, I have never seen such a spike in numbers like the one in the past 18 months," he says.

Carey Fuller, the single mother in Seattle, advocates for the homeless while being homeless herself. She says that she parks "anywhere I can" at night, picking spots near foreclosed homes to avoid police detection. Her daughters do their homework in the school library and they do laundry in public laundromats. Meals are taken at church soup kitchens or purchased in convenience marts that have microwaves to heat things up. She lives on an inconsistent child support payment of $150 a month and $500 a month in food stamps for the three of them. Showers are taken at the community pool; on weekends, they hang out at the library where there are many free events.

She gave up trying to use the overtaxed housing assistance system, because of the long waiting lists for apartments.

Is she just a job away from being able to rent an apartment? Fuller says it isn't as simple as that. Landlords discriminate against the vehicular homeless, she says, and demand to see a current rental history. After sleeping in the car for nearly eight years, she doesn't have one.

She's been doing this for so long that it's become a way of life.

"My life feels normal to me," she said, "We live just like every other family except we sleep in the minivan."

A New Community

Car and van dwellers have formed a community of their own, often exchanging survival tips online. Fuller has taught people how to make a "coffee can cooker" on Facebook.

For a long while, the Wal-Mart Stores chain was known for its tacit willingness to let RV-ers use its parking lots overnight. In the evening, the campers served as a de facto security force, making sure that no one did anything to give the police reason to come calling. In the morning, the campers frequented the store, often buying their day's food and supplies there. Gradually, more and more Walmarts became less hospitable to the community. Word quickly spread among the van dwellers about which ones you could park safely in without getting in trouble.

Warm climates tend to draw those living in their vehicles, for the obvious reasons. Southern California, Florida, Arizona and Nevada are popular among the displaced, although many people initially try to stay close to the spot where they fell. They want to keep their kids in the same school, stay close to family and friends. And they lack the money for gas to crisscross the country without direction or purpose.

Salinas tells of the single mother who works at a minimum-wage job and has her 5-year-old son sleep in her sister's Section 8 apartment. She herself sleeps in the car out in front of the apartment each night, fearing that her presence inside would violate her sister's HUD-landlord agreement, which limits the number of adults allowed. She doesn't want to cause her sister to become homeless too, Salinas said. It's not illegal to sleep in your car, by the way, unless a municipality makes it so.

As for today's "Ford families," it's not without some irony to give them the moniker. Although Henry Ford did help a small number of distressed families by giving them loans and some land to work, he also laid off thousands more. And he deeply angered many with public comments about how the unemployed should do more to find work for themselves.

Also see:
Detroit Mom Offers to Trade Her House for a Car
Protesters 'Liberate' Foreclosed Homes
Squatting: Social Menace or Economic Necessity?

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]]>Carey Fullerfamilies living in carsfamily living in vanhomeless familieshomeless living in carsliving out of a vanRudy Salinasvehicular homelessAnn Brenoff2011-11-23T11:45:00+00:0010 Cities Getting Slammed by Foreclosureshttp://realestate.aol.com/blog/2011/11/11/ten-cities-getting-slammed-by-foreclosures/http://realestate.aol.com/blog/2011/11/11/ten-cities-getting-slammed-by-foreclosures/http://realestate.aol.com/blog/2011/11/11/ten-cities-getting-slammed-by-foreclosures/#commentsFiled under:

Foreclosures have increased 14% between the second and third quarter of 2011, following five straight quarters where the number of foreclosures has gone down. This increase could dampen the recovery of the American housing market and harm economic recovery for cities where foreclosures rose significantly. Based on data recently released by RealtyTrac, 24/7 Wall St. has identified the 10 metropolitan regions where foreclosures increased by more than 30%.

The housing crisis that began half a decade ago is the cause of most of the foreclosures, even today. The bubble did not burst at the same time across the country. Many of the cities on this list were among the first to be hit. Eight out of the 10 metropolitan areas listed reached a peak median home value in the first quarter of 2006, after which they started declining. Most regions peaked toward the end of 2006, into 2007. This means the regions listed here have been declining longer than the rest of the country.

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Because home values have been dropping in these areas longer than most other markets, they have generally also fallen further. In half of the regions on this list house prices have declined 50% or more since their peak. Home values in the Cape Coral-Fort Myers area, where foreclosures increased over 35%, have dropped by nearly 60% since the beginning of 2006, the seventh-greatest decline among any region in the U.S.

With a few exceptions, most of the cities listed are full of financially distressed and underwater homeowners - those whose homes are worth less than their mortgages. Six of the cities on this list are among the 20 cities with the largest portion of underwater homeowners. In the case of Fairfield-Vallejo, Florida, 53% of homes are in this position.

24/7 Wall St. used a RealtyTrac's press release on quarterly rates to identify the 10 cities where foreclosures had increased the most between the second and third quarter of 2011. To illustrate other economic factors at play in these regions, we used unemployment rates from the Bureau of Labor Statistics and home price changes and median family incomes from Fiserv. Finally, 24/7 Wall St. also looked data from Corelogic on the cities with the highest percent of homes with underwater mortgages.

Most of these cities have high unemployment rates, low median family income and falling home values. These three forces combined suggest that foreclosures are likely to get even worse in these areas before they get better.

Click through the gallery to see the 10 cities where foreclosure rates are skyrocketing.

Also see:
'Mortgage Prof': 5 Reasons Banks Would Rather Foreclose
The Mortgage Fix That Can Save the Economy
5 Foreclosure Flip Tips From the 'Flip Men'

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]]>foreclosure ratesForeclosureshousing crisishousing marketrealtytracworst cities for foreclosures24/7 Wall St.2011-11-11T13:00:00+00:00Vacant House Targeted by Squatters, Scammers and Thieveshttp://realestate.aol.com/blog/2011/11/11/foreclosed-house-targeted-by-squatters-scammers-and-thieves/http://realestate.aol.com/blog/2011/11/11/foreclosed-house-targeted-by-squatters-scammers-and-thieves/http://realestate.aol.com/blog/2011/11/11/foreclosed-house-targeted-by-squatters-scammers-and-thieves/#commentsFiled under: , ,

vacant home squatterEmpty houses -- those either awaiting foreclosure or where the owners have moved out for other reasons -- might as well have a "kick me" sign on them. Actually, make that "vandalize me" sign. They are frequently the targets of squatters who move in illegally, scammers who claim they own them and rent them out to unsuspecting tenants, or just plain old garden variety thieves who break in and steal the valuables right down to the copper plumbing and refrigerator.

Or, in the case of one Suffolk County house, all three. According to a story on ABCLocal News, the Bay Shore home of Richard and Lisa Scott slipped into foreclosure in 2009. The Scotts said they gave their lender, Bank of America, three short sale offers that went nowhere fast, with the bank citing incomplete paperwork that the Scotts and their agent insist was delivered. The Scotts, meanwhile, moved out to rebuild their lives in the South.

Shortly thereafter, Scott's brother reported driving by and seeing a squatter living in the house, with the air conditioner running and lights blazing. Once the squatter was removed, someone ran a scam ad on Craigslist and leased out the house, collecting $4,000 from the unsuspecting tenant. And then, to add insult to injury, with the squatter and tenant gone, vandals broke into the house and stripped it bare, leaving holes punched in the walls and stealing the copper plumbing, the appliances, even the kitchen sink.

According to the report, BofA is now trying to hasten the foreclosure process.

As for those who may be forced to leave a home vacant, here are some tips to make sure this doesn't happen to you.



1. Try not to move out.
Vacant homes have increasingly been targeted by squatters. The bank can't force you out of your home until they foreclose. Until then, you own it -- no matter how many missed payments you have. If you must leave, consider renting it out. Let the tenant know you are pursuing a short sale and that the home may be foreclosed on, but that you are giving them a discount in the fair market rent in exchange for maintaining the property.

2. Notify the local police and utilities that the home is going to be vacant.
Utility companies make it possible for squatters to set up shop. By presenting a doctored up lease agreement and some sort of "proof" of ID, anyone can get an account established and the electricity turned on in your home. By calling and putting it in writing that the house is going to be vacant, you are at least alerting the utilities -- which likely won't make a whit of difference.

3) Let your neighbors know.
Nobody feels good about saying they are losing their home. But with it happening to so many, no one will be surprised. If the neighbors know that the house will be empty, they can keep an eye on it and report any suspicious activity to you and the police. In exchange, maybe you want to hire their kid to keep the grass cut and the yard tidy.

4) Stop thinking this isn't really your problem.
Yes, you fully expect that the bank is going to foreclose on you and are saying to yourself, "Why should I care?" Look at the Scotts' example. They were sickened to return to their house -- which they still own and are still responsible for -- and find the damage.

Also see:
Realtors' Latest Challenge: A Surge of Squatters
Woman Faces Foreclosure on Home She Bought for $1
Protesters 'Liberate' Foreclosed Homes

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]]>Bay Shore Long IslandLisa ScottRichard Scottsquatterssquatters in foreclosed housesAnn Brenoff2011-11-11T12:30:00+00:00Second-Home Owners Eligible for Mortgage Helphttp://realestate.aol.com/blog/2011/11/11/second-home-owners-eligible-for-mortgage-help/http://realestate.aol.com/blog/2011/11/11/second-home-owners-eligible-for-mortgage-help/http://realestate.aol.com/blog/2011/11/11/second-home-owners-eligible-for-mortgage-help/#commentsFiled under: ,

California expanded its $2 billion program to help homeowners avoid foreclosure to those with second homes as well.

The California Housing Finance Agency established the four Keep Your Home programs using money from the Treasury Department's $7.6 billion Hardest Hit Fund. Before, borrowers were restricted from modifications, unemployment funds, relocation assistance and even principal reductions if they had a second home.

Officials eliminated the exclusion, because they said many homeowners are co-signers on a second home or are underwater on their first property.

Other changes to the programs include allowing borrowers to take advantage of principal reduction offers even if they completed a cash-out refinance in the past, which many Californians did during the boom.

Read the full story at HousingWire.

See also:
How Much Down Payment Do Homebuyers Need?
No-Money-Down Mortgage Can Still Be Found in Small Towns
New Credit Score Will Tell Lenders More About You
Viewpoint: Obama's Drop-in-the-Bucket Idea for Housing

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]]>California Housing Finance Agencyhardest hit fundmortgage crisismortgage helpmortgage modificationprincipal reductionHousingWire2011-11-11T09:30:00+00:00After Slowdown, Foreclosures Rise Againhttp://realestate.aol.com/blog/2011/11/10/after-slowdown-foreclosures-on-the-rise-again/http://realestate.aol.com/blog/2011/11/10/after-slowdown-foreclosures-on-the-rise-again/http://realestate.aol.com/blog/2011/11/10/after-slowdown-foreclosures-on-the-rise-again/#commentsFiled under:

LOS ANGELES -- More U.S. homes entered the foreclosure process in October than in the previous month, with Florida, Pennsylvania and Indiana registering among the largest monthly increases, new data show.

Some 77,733 properties received an initial default notice last month, up 10 percent from September, foreclosure listing firm RealtyTrac Inc. said Thursday.

The number of homes scheduled to be auctioned or repossessed by lenders also posted monthly increases.

All told, notices of default, scheduled auctions and bank repossessions - warnings that can eventually lead to a home being lost to foreclosure - hit a seven-month high in October.

The numbers are further evidence foreclosure activity is picking up.

The activity slowed a year ago after problems surfaced with the way many lenders were handling foreclosure documentation, namely shoddy mortgage paperwork comprising several shortcuts known collectively as robo-signing. Many of the nation's largest banks reacted by temporarily ceasing all foreclosures, re-filing previously filed foreclosure cases and revisiting pending cases to prevent errors.

But banks appear to be moving past those problems now and starting to tackle a swelling backlog of homes with mortgages that have gone unpaid - something that lenders are seeing more of as the economy struggles and unemployment remains high.

The rate that homeowners were 60 or more days late on their mortgage payment rose in the June-to-September period for the first time since the last three months of 2009, according to TransUnion.

The credit reporting agency said 5.88 percent of homeowners missed two or more payments, an early sign of possible foreclosure. That was up from 5.82 percent in the second quarter of 2011.

The number of U.S. homeowners underwater on their mortgage, or owe more than their homes are worth, represent another potential source of trouble for lenders.

As of June 30, some 22.5 percent of all U.S. homes had a mortgage that was under water, according to CoreLogic. That's 10.9 million properties. Another 2.4 million borrowers had less than 5 percent equity in their home, the firm said.

Industry experts say a housing market turnaround isn't likely to occur as long as there remains a glut of potential foreclosures hovering over the market, so October's increase in foreclosure activity means a potentially faster revival for housing.

"We all know that there is an underlying amount of properties that need to go into foreclosure and the sooner we clear that the sooner we can get housing to a normal level," said RealtyTrac CEO James Saccacio.

In some states, the number of homeowners put on notice by banks for missing payments far exceeded the national average for October.

Florida posted a 28 percent jump in October from September in homes receiving an initial default notice. Pennsylvania saw a 50 percent increase and Indiana registered a 61 percent gain, according to RealtyTrac.

In some cases, though, government intervention is slowing lenders down.

Take Nevada, where a law went into effect Oct. 1 requiring that foreclosure documents must be filed in the county where a property is located and a lender must provide a notarized affidavit detailing their legal right to proceed.

Saccacio said the law helped cause a 75 percent drop in initial default notices in Nevada last month versus September, bringing defaults to the lowest level since June 2006 at the peak of the housing boom.

"It's like a rain delay," Saccacio said. "We'll eventually see foreclosure processing go up."

Despite registering a 34 percent drop in foreclosure activity overall, Nevada still registered the highest foreclosure rate in the nation for October, with one in every 180 households receiving a foreclosure-related notice, RealtyTrac said.

In all, 230,678 U.S. homes received a foreclosure-related warning last month, up 7 percent from September, but down nearly 31 percent from October 2010.

Foreclosure auctions rose 8 percent from September, but climbed by more than 35 percent in several states, including Florida, Minnesota and Illinois.

Lenders took back 67,624 properties in October, up 4 percent from the previous month, but down 27 percent from a year earlier.

Bank repossessions increased by a far larger margin in several states. In Oregon they climbed 45 percent, while in New Jersey they posted a 48 percent jump. Indiana registered a 73 percent increase.

Copyright 2011 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.

Also see:
'Mortgage Prof': 5 Reasons Banks Would Rather Foreclose
The Mortgage Fix That Can Save the Economy
5 Foreclosure Flip Tips From the 'Flip Men'

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]]>CoreLogic foreclosureforeclosure crisisforeclosure increaseforeclosure listingsForeclosuresmore foreclosuresRealtyTrac foreclosurerise in foreclosuresThe Associated Press2011-11-10T10:00:00+00:0014,000 Friends Help Save Man From BofA Foreclosurehttp://realestate.aol.com/blog/2011/11/09/14-000-friends-help-save-man-from-bofa-foreclosure/http://realestate.aol.com/blog/2011/11/09/14-000-friends-help-save-man-from-bofa-foreclosure/http://realestate.aol.com/blog/2011/11/09/14-000-friends-help-save-man-from-bofa-foreclosure/#commentsFiled under:



Banks are poised to repossess approximately 800,000 homes this year, but with the help of an online petition and about 14,000 new friends, Southern California man Brendon Mendoza is avoiding the same fate.

Mendoza challenged Bank of America to save his home in a petition on Change.org about two months ago. And, since it gathered over 14,000 signatures from across the country, Bank of America called Mendoza on Friday to relay that his foreclosure has been temporarily halted.

Mendoza told The Huffington Post, "Since I've been contacted by Bank of America, I am at a loss for words. I really wasn't sure if [the petition] was going to work. It was really moving to have so many people side with me." Mendoza added, "I think the banks are finally listening to the people."

In a press release, Change.org reports that Mendoza's campaign is one of almost three dozen anti-foreclosure campaigns on the website. Other campaign successes similar to Mendoza's include the nonprofit New Bottom Line halting a foreclosure on a 71-year-old cancer survivor and a Seattle homeowner, Vera Johnson, halting a foreclosure by Bank of America on her home and business.

Read the full story at The Huffington Post.

Also see:
Soldier Buys Back Parents' Foreclosed Home
Houston Family Foreclosed On Through No Fault of Their Own

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]]>Bank of American foreclosureBrendon MendozaBrendon Mendoza foreclosureChange.orgforeclosure petitionNew Bottom LineVera Johnson foreclosureThe Huffington Post2011-11-09T12:25:00+00:00BofA Threatens Family With Foreclosure Over $1 'Coding Error'http://realestate.aol.com/blog/2011/11/04/bofa-threatens-family-with-foreclosure-over-1-coding-error/http://realestate.aol.com/blog/2011/11/04/bofa-threatens-family-with-foreclosure-over-1-coding-error/http://realestate.aol.com/blog/2011/11/04/bofa-threatens-family-with-foreclosure-over-1-coding-error/#commentsFiled under: ,

$1 foreclosure utahWhen Shantell Curtis sold her Vernal, Utah, home last year, she expected, as a reasonable person might, that she'd paid her last mortgage payment on the house.

But her lender, Bank of America, thought differently, according to KUTV 2News in Utah. Because of a $1 "coding error" on the bank's part, the title to Curtis' home was never transferred to the new owners, making it appear as if she still owned the home. As a result, BofA initiated a foreclosure process on the home and reported Curtis to the credit bureaus, effectively obliterating her credit score.

Now Curtis is left to pick up the pieces for a mistake that was not her own, on a house that no longer belongs to her.


While BofA was prompt in identifying the problem after Curtis reported the issue, it's been more than five months and she still hasn't received a letter to confirm that the title issues have been resolved. A bank spokesperson also told her that they'd clear up her credit issues, but that could take up to three months. In the meantime, Curtis' credit score remains in the dumps.

"They said that they had to keep reprocessing it and this has been a game we've been playing ever since," Curtis told KUTV. "They just say they need to reprocess papers."

AOL Real Estate contacted the new owners of the home in question, who said they were unaware of the Curtises' problem, adding that they are current on their own mortgage. They've never received any mail from Bank of America addressed to the Curtises either, they said during a phone interview.

The new owners' mortgage is with a different lender.

When reached for comment, a spokesperson for the Bank of America told us that they will look into the matter. As of this writing, they have yet to respond.

UPDATE: Bank of America spokesperson Jumana Bauwens sent the following --
This was an issue that we handled with the tv station in August. It was a result of a coding error. We have verified that all the codes on the loan were corrected. The loan now has a zero balance and reflects as paid off in the system. We apologize to the Curtis' for this error and have made (in August) the necessary corrections to the credit agencies.

See also:
Woman Faces Foreclosure On Home She Bought for $1
Soldier Buys Back Parents' Foreclosed Home
Houston Family Foreclosed On Through No Fault of Their Own

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]]>1 dollar foreclosurebank error foreclosurebank of americaBank of America error foreclosurebofafamily threatened with foreclosurehome titleshantell curtisuntransfered titleuntransferred titleutahvernalwrongful foreclosureStefanos Chen2011-11-04T14:00:00+00:00Mortgage Giant Asks Taxpayers for Another $6 Billionhttp://realestate.aol.com/blog/2011/11/03/freddie-mac-asks-taxpayers-for-another-6-billion/http://realestate.aol.com/blog/2011/11/03/freddie-mac-asks-taxpayers-for-another-6-billion/http://realestate.aol.com/blog/2011/11/03/freddie-mac-asks-taxpayers-for-another-6-billion/#commentsFiled under: , ,

WASHINGTON -- Government-controlled mortgage giant Freddie Mac has requested $6 billion in additional aid after posting a wider loss in the third quarter.

Freddie Mac said Thursday that it lost $6 billion, or $1.86 per share, in the July-September quarter. That compares with a loss of $4.1 billion, or $1.25 a share, in the same quarter of 2010.

The government rescued McLean, Va.-based Freddie Mac and sibling company Fannie Mae in September 2008 after massive losses on risky mortgages threatened to topple them. Since then, a federal regulator has controlled their financial decisions.

Taxpayers have spent about $169 billion to rescue Fannie and Freddie, the most expensive bailout of the 2008 financial crisis. The government estimates that it will cost at least $51 billion more to support the companies through 2014, and as much as $142 billion in the most extreme case.

Freddie and Washington-based Fannie own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans worth more than $5 trillion. Along with other federal agencies, they backed nearly 90 percent of new mortgages over the past year.

The two mortgage giants buy home loans from banks and other lenders, package them into bonds with a guarantee against default, and then sell them to investors around the world. When property values drop, homeowners default - either because they are unable to afford the payments or because they owe more than the property is worth. Because of the guarantees, Fannie and Freddie must pay for the losses.

Fewer foreclosures and delays in foreclosure processing because of a yearlong government investigation into mortgage lending practices have reduced the companies' projected losses.

Fannie and Freddie are required to pay 10 percent dividends on the government money they receive. Freddie paid $1.6 billion in dividends to the Treasury Department in the July-September quarter.

Pressure continues on the government to eliminate Fannie and Freddie and reduce taxpayers' exposure to risk. The Treasury Department put forward a plan in February to slowly dissolve Fannie and Freddie, although that process could take years. Abolishing Fannie and Freddie would transform how homes are bought and redefine who can afford them.

Copyright 2011 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.

Also see:
Watchdog: Fannie, Freddie Knew of Robo-Signing in 2003
Is 'Occupy' Ready to Move Into Foreclosed Homes?
Victims of Robo-Signing: Fight the Machine!

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]]>fannie maefreddie macfreddie mac bailoutmortgage crisisThe Associated Press2011-11-03T10:15:00+00:00Where Are the Real Home Bargains? Not Where You Think!http://realestate.aol.com/blog/2011/11/02/where-are-the-real-home-bargains-not-where-you-think/http://realestate.aol.com/blog/2011/11/02/where-are-the-real-home-bargains-not-where-you-think/http://realestate.aol.com/blog/2011/11/02/where-are-the-real-home-bargains-not-where-you-think/#commentsFiled under: , , , , , , , ,



What if you could buy a house for $25,000 in a neighborhood that wasn't a battle-scarred slum and rent it out for $750 a month as soon as the ink was dry on the deal? Where are these deals that let you recapture your investment in just three years and from then on enjoy a steady monthly income from the property?

If you said Phoenix, Las Vegas or south Florida, you'd be wrong says Paul Habibi, a principal of Habibi Properties and real estate professor at UCLA Anderson School of Management.

Here's a hint to the place Habibi thinks is the hottest investment around.




Yep, Habibi is humming "Kansas City" right along with Wilbert Harrison, Fats Domino and the 50 or so other recording artists who covered that tune. As for a real estate investment, Habibi says Kansas City, Mo., is ripe for the picking.

Habibi's approach to real estate deals is not for novice investors, but it is for those who can tolerate some risk and buy into a statistician's mind. He's developed a matrix that filters the top 30 MSAs (metropolitan statistical areas) through their projected growth rates (increasing population is good), unemployment (the lower, the better), and whether the city has a diversified job platform (Silicon Valley won't get his money).

He also rejects places where other investors have already scooped up the bargains (forget Florida and Las Vegas). Phoenix, popular with many investors, also fails his litmus test. It was built as a retirement community and lacks a job infrastructure for future growth, he says. And those Texas cities that everyone bandies about -- Dallas, Austin, San Antonio -- while their prices have remained flat and they seem to have escaped relatively unscathed from the recession, there are so many investors already there that they're tripping over one another.

Kansas City is just about perfect, said Habibi, whose company recently concluded its first phase of buying 32 single-family homes there in "C-level" neighborhoods for a price point of $25,000 each, spent $5,000 to $10,000 on repairs and now rents them out for about $750 each. He expects to double or triple his holdings in Kansas City with his second investment fund, for which there is a minimum buy-in of $100,000 for accredited investors to participate.

Kansas City's population grew at a faster-than-national average pace from 2000 to 2010. With an unemployment rate of 8.7 percent, it falls below the national level of unemployment of 9.1 percent. The city has a diversified industry base that includes Sprint Nextel Corporation, Hallmark Cards, the Fort Leavenworth military base, UPS and a Ford assembly plant. Google has selected the city for its ultra high-speed broadband network project. Plus Kansas City has a business-friendly reputation for encouraging retention of companies.

Habibi discourages individual investors without much experience or tolerance for risk to try to fly solo. He credits much of his success from having an infrastructure in place -- people to scout and inspect the homes, screen for tenants, manage the properties on-site and swiftly deal with eviction issues.

For those who don't want to listen to the expert, click on the images below of some homes for sale in the Kansas City area that are worth checking out:



See other homes for sale in the Kansas City area at AOL Real Estate.

Also see:
College Town Real Estate Investments Score High Marks
Upside Down on Your First House? Just Buy a Second One!
Viewpoint: Why No New Houses May Be a Good Thing

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]]>how to invest in real estatePaul Habibireal estate bargainsreal estate investingAnn Brenoff2011-11-02T11:45:00+00:00Federal Housing Agency Says No to Principal Forgivenesshttp://realestate.aol.com/blog/2011/11/01/federal-housing-agency-says-no-to-principal-forgiveness/http://realestate.aol.com/blog/2011/11/01/federal-housing-agency-says-no-to-principal-forgiveness/http://realestate.aol.com/blog/2011/11/01/federal-housing-agency-says-no-to-principal-forgiveness/#commentsFiled under: ,

money houseWhile the Obama administration may be pondering the idea of helping underwater homeowners through principal write-downs, Federal Housing Finance Agency Director Edward DeMarco said there is no current consideration for principal write-downs on underwater home loans.

DeMarco told C-SPAN in an interview that the FHFA has already assisted borrowers through principal forbearance programs and loan modification tools that have helped borrowers reduce their monthly payments. He said the other balance the FHFA has to strike is making sure home aid efforts do not afflict taxpayers with additional losses since public funds hold up the quasi-federal housing agencies. He placed write-downs on principal in this camp and suggested the FHFA is not going in that direction.

"Principal forgiveness does not accomplish our conservator mandate," DeMarco said on CSPAN while speaking to reporters from Reuters and The Wall Street Journal. He added,"the borrower still has a responsibility and an obligation for the repayment of the loan."

Read the full story at HousingWire.

Also see:
Viewpoint: Where's Housing in the 'Occupy' Protests?
Mortgage Mod Hell: Trapped Between Lenders, Collectors
The Mortgage Fix That Can Save the Economy

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]]>Foreclosureshousing crisismortgage crisisprincipal forgivenessprincipal write downHousingWire2011-11-01T10:00:00+00:00Foreclosures to Continue a 'Slow, Steady Burn'http://realestate.aol.com/blog/2011/11/01/foreclosures-to-continue-a-slow-steady-burn/http://realestate.aol.com/blog/2011/11/01/foreclosures-to-continue-a-slow-steady-burn/http://realestate.aol.com/blog/2011/11/01/foreclosures-to-continue-a-slow-steady-burn/#commentsFiled under: ,



The housing market faces several more years with 800,000 to 1 million new foreclosed properties per year, according to Rick Sharga, an executive vice president with Carrington Mortgage Services.

Sharga recently left RealtyTrac, where he helped build a network that tracked foreclosure filings across the country. Recently, analysts at Bank of America Merrill Lynch estimated REO sales would peak until 2013 when nearly 1.5 million properties would be sold.

According to RealtyTrac, there have been 8.9 million homes lost to foreclosure since 2007, the height of the credit crisis.

Sharga said based on lender behavior, he doesn't see a spike happening, rather a slow, steady burn in order to spare home prices from further reductions. Today, roughly 4 million homes sell per year. If 1.5 million REO sold, that would be almost 40 percent of the market, which would be double the current market share of these properties.

Read the full story at HousingWire.

Also see:
When Renters Get Snared in Foreclosure's Web
Houston Family Foreclosed On Through No Fault of Their Own
'Mortgage Prof': 5 Reasons Banks Would Rather Foreclose

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Find out how to calculate mortgage payments.
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Find foreclosures in your area.
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]]>Foreclosureshousing crisismortgage crisisRick ShargaHousingWire2011-11-01T09:00:00+00:00Mansion or Meth House? 'Flip Men' Want to Knowhttp://realestate.aol.com/blog/2011/10/25/mansion-or-meth-house-flip-men-want-to-know/http://realestate.aol.com/blog/2011/10/25/mansion-or-meth-house-flip-men-want-to-know/http://realestate.aol.com/blog/2011/10/25/mansion-or-meth-house-flip-men-want-to-know/#commentsFiled under: ,



Remember "Flipping Out," the Bravo series that brought us high-strung house flipper Jeff Lewis and his high-end portfolio of properties? Well, you can wipe that image from your mind. The new reality of the housing market brings us a new breed of wheeler-dealers: the Flip Men. And what kinds of properties do these guys flip? Why, foreclosures of course.

Mike Baird and Doug Clark buy foreclosed properties at auction, sight unseen. And what they'll find when they get inside -- usually by busting down the door or shimmying through a window, since "when you buy a house at auction, the auctioneer isn't usually handing you keys and giving you a big kiss," Baird says -- is anyone's guess.

So ... meth house or mansion? Watch the video below to find out. And check out the "Flip Men's 5 Foreclosure Tips" on AOL Real Estate. "Flip Men" premieres premieres Oct. 25 at 10:30 p.m. (9:30 p.m. CDT) on Spike.


Sneak Peek - Meth House
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Also see:
Viewpoint: Feeling Guilty About Buying a Foreclosure?
'Mortgage Prof': 5 Reasons Banks Would Rather Foreclose
Tempted to Invest in Real Estate? Read This First

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]]>flip menflipping outhouse flippingjeff lewisspike tvLaura Goldstein2011-10-25T17:30:00+00:005 Foreclosure Flip Tips From the 'Flip Men'http://realestate.aol.com/blog/2011/10/25/5-foreclosure-flip-tips-from-the-flip-men/http://realestate.aol.com/blog/2011/10/25/5-foreclosure-flip-tips-from-the-flip-men/http://realestate.aol.com/blog/2011/10/25/5-foreclosure-flip-tips-from-the-flip-men/#commentsFiled under: , , , ,

AOL Real Estate asked Utah-based real estate investors Doug Clark and Mike Bard, whose show "Flip Men" premieres this week on Spike TV, for tips on how to flip a foreclosed home. Here's what they had to say to novice investors:


1. Pick a property that is well within your means.

Don't allow yourself to get too overextended on the property. Way too often, we have seen people show up at a foreclosure auction and then after one bad deal, their own house is in foreclosure. Everything will take more time and money then you anticipate, so don't bite off more then you can chew.


2. Prepare to break in.

Foreclosed homes don't come with keys or contracts. It is up to you to find a way in. Our favorite methods are: Slip the lock with a credit card, lift a window, lift the garage, put your hand through a doggy door and unlock the door from within, climb on the roof and look for an open window.

Get creative and have fun with this step! If you want a set of keys to your new property you need to make your own or call a locksmith and pay $150 to get the job done. Make sure you research the local laws regarding abandoned property. You may have to store any items you find in the house for a period of time before they are yours. Former owners almost never come back for their items, so it's not out of the question to find cash, furniture, collectibles, firearms and even vehicles.


3. Check everything.

Most foreclosures were abandoned. These homes have many issues, so check all the systems thoroughly. The last thing you want is to find out that the roof is bad or the furnace needs to be replaced the day before closing.

A great tip: Speak to the neighbors. You would not believe how much they know about the houses around them. Don't avoid disclosing bad news with the house, because the people you sell to will notice everything. Budget for contingency items because they are always there, especially in foreclosures.


4. Tour other houses for sale.

Take an afternoon and tour two or three homes similar to the one you hope to flip. This is your direct competition, so view it that way. How is the curb appeal, paint colors, smell, clutter, layout, backyard, etc. This is especially important if you are new to the business and don't have the same reference points that a professional flipper does.


5. Price aggressively.

It's easy to overprice a listing, it's difficult to under-price one. If you under-price the property, you will get a lot of attention and showings fast, and people will compete for the house. Set the price to move. If you are not getting showings and no one is calling to see the house, then it is priced too high. If you are getting a lot of attention and people are walking through but no offers are being made, then the price is right, but there is something wrong with the house. Call the agent for details and don't be afraid to ask why the buyers are passing on your house.

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Sneak Peek - Meth House
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Also see:
Mansion or Meth House? Flip Men Want to Know
Viewpoint: Feeling Guilty About Buying a Foreclosure?
'Mortgage Prof': 5 Reasons Banks Would Rather Foreclose
Tempted to Invest in Real Estate? Read This First

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Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.

 

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]]>Ann Brenoff2011-10-25T14:40:00+00:00Viewpoint: Obama's Drop-in-the-Bucket Idea for Housinghttp://realestate.aol.com/blog/2011/10/24/viewpoint-obamas-drop-in-the-bucket-idea-for-housing/http://realestate.aol.com/blog/2011/10/24/viewpoint-obamas-drop-in-the-bucket-idea-for-housing/http://realestate.aol.com/blog/2011/10/24/viewpoint-obamas-drop-in-the-bucket-idea-for-housing/#commentsFiled under: , , , , ,

Let's hold off blaring the triumphant trumpets just yet for President Obama's plan to allow holders of underwater loans to refinance at a lower rate through revisions in the Home Affordable Refinance Program.

What this change does is amend the loan-to-value ratio in a refinance. By removing the cap on how upside-down you can be, it will allow more people to avail themselves of the lower interest rates out there. You still will owe more than your house is worth, but you can pay less for the privilege.

Here's what the proposed plan doesn't do:

1. Reach many people.

The only homeowners who will qualify are those who are current on their underwater loans and have loans that are backed by Fannie Mae and Freddie Mac. (No jumbo loan holders or those with mortgages backed by the FHA or the USDA.) That's an estimated 800,000 homeowners who can avail themselves of this. To put things in perspective, most experts say there are between 8 million and 9 million people in the foreclosure pipeline -- and some put that number as high as 11 million. So 800,000 is hardly a game-changing number.

It is, perhaps somewhat ironically, about the same number of homeowners that HARP has helped to date. When the program was announced in 2009, we were told it would help 4 to 5 million underwater borrowers. To date, just 838,000 homeowners have been able to refinance through HARP. So even if this new tweak doubles the number of people helped, it's still just a fraction of the number of people in trouble.

2. Reach the people who need it the most.

To qualify, you can have missed only one mortgage payment in the previous year and none in the past six months. The group being targeted here are those who are potential strategic defaulters -- folks who go to sleep at night calculating whether it makes financial sense for them to just walk away. They have demonstrated that they can afford the loan because they are current on their payments.

The people who are not being helped here are the ones who can't afford their mortgages anymore. These are the people at risk of losing their homes because of job loss, income reduction, illness, divorce or adjustable rate loan resets.

So to recap: If you are heading for foreclosure because you choose to be, this could change your mind. If you have no choice in heading for foreclosure, tough noogies to you.

3. Reduce anyone's principal loan amount.

If your house is worth $200,000 and your loan amount is $250,000, you will still owe the bank $250,000 -- just at a lower interest rate than what you originally signed up for. The underlying assumption here is that the housing market will recover sufficiently so that in a few years you will no longer be upside down on your loan -- or if that doesn't turn out to be the case, Obama won't be running for re-election anymore and you become the next guy's problem.

4. Help the unemployed.

The days of stated income -- or no doc -- loans are long gone. Consider them something you'll tell your grandkids about, along with cell phones without cameras. To qualify here, you'll need pay stubs, W-2s, tax returns and other documentation. And of course if you don't have a job, you won't likely be able to refinance your home into a lower-rate loan.

Here's a little salt in the wound: Many long-term unemployed keep themselves afloat by working multiple freelance jobs. This puts them in the self-employed category -- and even if they've managed to stay current on their mortgage, qualifying for the HARP relief would prove difficult because of their fluctuating income.

So the bank would rather keep them at a higher interest rate and wait for them to stumble than let them refinance into a lower interest rate. The fact that they have been making their payments faithfully doesn't matter. The tweaks to HARP don't tweak in the direction of the unemployed.

5. Pump more money into the economy.

The underlying logic behind this measure is that the money that those 800,000 lucky homeowners aren't spending on their mortgage each month is money they'll spend on other things -- eating out, traveling, shopping -- and that such spending is good for the economy.

Sorry, but this one has me laughing all the way to the credit union, which is where I suspect most of those homeowners will be headed too. First of all, their numbers are just too thin to make a statistical difference. This isn't a "jump-start the economy" measure by a long shot. At best, it will allow a proverbial handful of homeowners to splurge on the occasional Friday night pizza, assuming there is enough left over from the "windfall" savings after they pay their health insurance and grocery bills.

Also see:
Obama's Refinance Plan Explained
The Mortgage Fix That Can Save the Economy
Republican Candidates: Short on Housing Policy, Long on Houses

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More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.

 

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]]>foreclosure crisisforeclosuresHAMPHARPObama housing planAnn Brenoff2011-10-24T17:09:00+00:00