San Diego Short Sale Specialist

CFPB proposes foreclosure ban until 2022 Amending Regulation X to give servicers and homeowners more time to work through options The Consumer Financial Protection Bureau (CFPB) released a notice of proposed rulemaking on Monday that would amend Regulation X to provide a special pre-foreclosure review period prohibiting servicers from starting foreclosures until after December 31, 2021....Continue reading

Active Forbearance Numbers Trending Upward Black Knight has released the results of its latest McDash Flash Forbearance Tracker, finding that the trend of mid-month forbearance increases continues to rise. Black Knight has found that the number of active forbearance plans increased by 15,000, a 0.6% rise over last week, with portfolio-held and privately securitized mortgages accounting for the largest weekly increase at 12,000 (1.8%). FHA/VA forbearances saw an increase of 5,...000 (0.4%), while the GSEs experienced slight improvement, with a decrease of 2,000 forbearance plans (-0.2%). As of Feb. 16, 2.69 million U.S. homeowners remain in forbearance, with 9.2% of that number representing FHA/VA mortgages, 3.2% GSE mortgages, and 5.1% portfolio/privately securitized mortgages. As Black Knight’s Andy Walden notes, with the month of February coming to a close, nearly 204,000 forbearance plans are scheduled to expire, suggesting that any decline in forbearance volumes in the coming weeks is likely to be limited. Despite the weekly increases, the overall monthly rate of decline held steady at -2% month-over-month. This continues the trend of very slow, but consistent, improvement in the number of outstanding forbearance cases. New plan starts hit a post-pandemic low this week, while just one of every 77 homeowners who entered the week in forbearance left their plans. Should the federal government not take any further action to assist struggling U.S. homeowners, more than 600,000 seriously delinquent borrowers will reach the end of their allotted forbearance periods at the end of March. The vast majority of plans have a 12-month cap on payment forbearance, and the various moratoriums which have kept foreclosure actions at bay over the past 10 months may be lulling us into a false sense of security about the scope of the post-forbearance problem we will need to confront come the end of March, said Black Knight Data & Analytics President Ben Graboske in an earlier release. Last year saw the largest number of homeownersnearly 3.6 millionbecome 90 or more days past due since 2009, and as of the end of December, 2.1 million remained so. DSNews See more

Biden Issues Executive Order on Foreclosures On the first day of his administration, President Joe Biden issued a slate of executive orders, including one that called on federal departments and agencies to extend their bans on evictions and foreclosures through at least the end of March. As with the previous extensions, this act is designed to provide ongoing relief to homeowners and renters feeling the negative financial impact of the ongoing COVID-19 pandemic. According to ...the order, both housing foreclosures and evictions would be delayed until at least March 31, 2021. Earlier this week, FHFA extended once again their moratoriums on single-family foreclosures and real estate owned (REO) evictions through February 28. The moratoriums were previously set to expire on January 31. DSNews See more

Millions May Lose Their Homes When Moratoria Expire Despite federal and local efforts to halt foreclosures and evictions during a global health crisis, losing a home has become a real threat facing millions of Americans, especially as preventative moratoria expire in December and January. Several reports and publications have examined the implications and possible solutions. An article by USA Today's N'dea Yancey-Bragg, for example, examines the state of Americans' mortgage ...Continue reading

‘Stunning’ Delinquency Spike Could Mean ‘Bumpy Waters Ahead’ Due to forbearance plans, home foreclosures are at record lows, but skyrocketing serious-delinquency rates point to a rough road ahead. That is, according to CoreLogic, provider of property-data analysis, which just released its monthly Loan Performance Insights report for August. It showed, nationally: Overall delinquency rate for August was 6.6%. The rate for early-stage delinquencies (30 to 59 days past due) wa...s 1.6%, down from 1.8% in August 2019. The share of mortgages 60 to 89 days past due was .8%, up from .6% in August 2019. The serious delinquency rate (90 days or more past due, including loans in foreclosure) was 4.3%, up from 1.3% in August 2019. This is the highest serious delinquency rate since February 2014. As of August 2020, the foreclosure inventory rate was .3%, down from .4% in August 2019. Five months into the pandemic, the 150-day delinquency rate for August spiked to 1.2%. This was the highest rate in more than 21 years and double the January 2010 peak during the home-price bust," said Frank Nothaft Chief Economist for CoreLogic. "The spike in delinquency was all the more stunning given the generational low of 0.08% in March and April. Homeowners approaching the end of the initial 180-day grace period, which is afforded to those with federally-backed mortgages, can now request an additional 180 days, and that, according to the report, is keeping foreclosures low as serious delinquency climbs. However, the researchers say that "looming unpaid mortgage payments, paired with sharp declines in income for many families, point to a potential wave of home sales triggered by financial distress in 2021 as forbearance periods end. " Adds Nothaft, "Forbearance programs continue to reduce the flow of homes into foreclosure and distressed sales and has been the key to helping many families who have been particularly hard hit by the pandemic. Even though foreclosure rates are at a historic low, the spike in 150-day past-due loans points to bumpy waters ahead. New Jersey, New York, Nevada, Florida, and Hawaii are recording the highest overall delinquency rates, the report shows. DSNews See more

Mortgage Meltdown Unlikely Despite Hike in Risky Loans Housing analysts are hoping it’s not a case of déjà vu. Unconventional mortgage lending is on the rise, in 2018 reaching its highest level since the financial crisis of 2008. These mortgages include subprime loans, financing offered to borrowers with blemished credits. While these more risky loans are on the rise, some economists shrug off the notion that the economy is headed for another mortgage meltdown. Despite the up...tick in these types of loans, the number of unconventional mortgages is still less than 3% of loans made in 2018. In 2006, for comparison, unconventional mortgages made up 39% of the market. Negative amortization lending, in which the balances on the loan grow, have generally vanished from the market. Further, Guy Cecala, publisher of Insider Mortgage Finance, told Kiplinger’s Money Power that the unconventional mortgages of today aren’t quite as risky as they once were. Most lenders are now required to make an effort to determine if a borrower has the ability to repay the loan. Lenders also may look to counter some of the risks of applicants, such as offsetting a high debt-to-income ratio, limited documentation, or interest-only loan with a high credit score and a large down payment, Kiplinger’s reports. The largest concentration of nonconventional loans in recent months has been among borrowers with limited or alternative documentation, such as those who are self-employed, those having a debt-to-income ratio above 43%, and those desiring an interest-only loan, according to CoreLogic, a real estate data firm. Lenders are also loosening up underwriting in some cases to add more mortgage business and distinguish themselves from competitors, Cecala says. REALTOR Magazine See more

The Rise of Mom-and-Pop REO Investors Over half of investors at foreclosure auctions plan to purchase fewer than five properties in 2019, according to the 2019 Buyer Insights Survey Report from Auction.com. The report found that 51% of auction buyers are these mom and pop investors, while 22% of buyers plan to purchase more than 10 properties for the year. Only 2% of buyers said they plan to purchase more than 100 properties in 2019. Foreclosure auctions are no longer domi...nated by larger investors able to navigate what was an opaque process of purchasing a property at the courthouse steps or from a hard-to-find REO asset manager, said Jason Allnutt, CEO at Auction.com. The majority of foreclosure and REO auction buyers are now smaller, mom-and-pop investors who are taking advantage of a much more accessible buying experience. Auction.com’s Survey Report is based on a survey sent to more than 4,700 buyers who had purchased at least three properties on the Auction.com platform. The survey was conducted between June 6 and June 20, 2019, with 197 buyers responding. According to respondents, the South is one of the most popular locations for foreclosure buyers, with 73% purchasing properties in the South region of the country, the highest share of any region. A good chunk are purchasing outside of their location, as 24% of survey respondents said their local housing market is overvalued with a correction possible. Earlier this year, Auction.com took a look at what investment strategy is the best for whatever your endgame would be. Advantages to real estate investment compared to other investment strategies include appreciating property values, easy access to credit with a property as collateral, equity buildup, and deferred profits. There are two main strategies to real estate investment, Auction.com notes: buy and hold, and fix and flip. Opting for a long-term or short-term strategy in building your investment portfolio is a personal decision, Auction.com notes. You should consider your investment goals, capital availability, your risk tolerance level and flexibility as it applies to your exit strategy. DSNews See more

Foreclosures Levels Continue to Drop Mortgage performance improved in August, according to the First Look at the latest mortgage performance data from Black Knight. Black Knight states that foreclosure starts hit an 18-year low in August, at 36.2K for the month. Foreclosure starts were down over 23% from this time last year, and the number of loans in active foreclosure, at 253K, is now the smallest it’s been since 2005. Additionally, prepayments increased by 5% from July to ...reach a three-year high, and August’s prepayment rate was up 62% from the same time last year and 2.5X the 18-year low we hit back in January. Black Knight also notes that despite a slight seasonal uptick in the number of loans 30 or more days past due, there was more growth in the number of active mortgages to offset this; as a result, the overall national delinquency rate declined slightly. ATTOM Data Solutions reported that one in every 2,554 U.S. properties received a foreclosure filing during the month of August. According to the analysis, the states with the worst foreclosure rates in August 2019 were Delaware (one in every 1,106 housing units); New Jersey (one in every 1,192 housing units); Maryland (one in every 1,218 housing units); Illinois (one in every 1,562 housing units); and Florida (one in every 1,633 housing units). In a previous Mortgage Monitor report, Black Knight Data & Analytics President Ben Graboske explains that falling interest rates and a subsequent increase in rate/term refinances has worked in servicers’ favor. As we’ve reported in the past, retention rates tend to be higher for rate/term refinances than any other type of transaction, and that’s just what we observed as of the end of Q2 2019, said Graboske. Falling rates and an abundance of refinance candidates were primary drivers behind servicers retaining 24% of all refinancing borrowers the highest such retention rate since late 2017 and 30% of rate/term borrowers specifically. While losing the business of more than two out of every three rate-driven refinance customers is not exactly extraordinary performance, it is significantly better than the sub-20% retention rates seen throughout much of 2018. The good news is that interest rates are at three-year lows, and anecdotal evidence suggests that in recent weeks, mortgage lenders had been inundated with inbound refinance business that’s relatively easy to retain. DSNews See more

FHFA and FHA Extend Foreclosure, REO Eviction Moratoriums UPDATE: The Federal Housing Administration (FHA) and HUD announced, shortly following FHFA's similar announcement, the third extension of its foreclosure and eviction moratorium through December 31, for homeowners with FHA-insured single family mortgages covered under the Coronavirus Relief and Economic Security (CARES) Act. According to a statement, "this extension provides an additional four months of housing securit...Continue reading

Mortgage Delinquencies Hit Four-year High The share of mortgage loans that became delinquent in April outpaces anything seen during the Great Recession and is the highest rate on record in 21 years, according to CoreLogic’s data. During the month of April, 3.4% of mortgages went from current to 30 days past due, outpacing the 2% high recorded in late 2008. The overall national delinquency rate in April stood at 6.1%, according to CoreLogic’s Loan Performance Insight Report, r...eleased Tuesday. CoreLogic clarified that all loans in forbearance are counted in its report as in past-due or delinquent status. Not only does April’s delinquency rate mark the highest in four years, but it also brings an end to 27 straight months of falling annual delinquency rates. Despite the scale and suddenness of the pandemic, mortgage delinquency has yet to emerge as a major issue, thanks to government COVID-19 relief programs and other housing finance industry efforts, said Frank Martell, President and CEO of CoreLogic. As the true impact of the economic shutdown during the second quarter of 2020 becomes clearer, we can expect to see a rise in delinquencies in the next 12-18 monthsespecially as forbearance periods under the CARES Act come to a close. The share of mortgages in early-stage delinquency in April was significantly higher than the shares that were seriously delinquent. Instead, the serious delinquency rate wallowed to its lowest level in about 20 years, and the foreclosure rate experienced a slight decline as well. The share of loans that were between 30 and 59 days past due in April was 4.2%, a significant jump from the 1.7% recorded last April. On the other hand, the share of loans that were seriously delinquent, meaning at least 90 days past due, was 0.3%, down slightly from 0.4% a year ago. New York had the highest loan delinquency rate of any state, at 10%. Louisiana, New Jersey, and Mississippi had the next-highest delinquency rates. South Dakota had the lowest loan delinquency rate at 3%. Among metro areas, those that typically serve as tourist destinations are suffering high delinquency rates. For example, CoreLogic pointed out that Kahului, Hawaii; Atlantic City, New Jersey; and Las Vegas all experienced a 5 percentage point or higher rises in delinquencies in April. Miami charted the highest delinquency rate among the major metros across the nation with 11.5% of all properties in some stage of delinquency, which is 6.7 percentage points higher than a year ago. Denver fared the best with 3.7% of properties in delinquency. The serious delinquency rate increased in 63 metros in April while remaining stable in 135 metros. Looking ahead, CoreLogic anticipates a spike in late-stage delinquencies and foreclosures this year. The analytics firm already released its home price prediction, anticipating a 6.6% decline in prices by May 2021, which would diminish many borrowers’ existing equity. DSNews See more

7.7% of Mortgages Now in Forbearance As of May 7, nearly 4.1 million homeowners are in forbearance plans, representing 7.7% of all active mortgages, according to the latest forbearance data from Black Knight. They account for $890 billion in unpaid principal and includes 6.4% of all GSE-backed loans and 11% of all FHA/VA loans. At today’s level, mortgage servicers need to advance a combined $4.5 billion/month to holders of government-backed mortgage securities on COVID-19-rel...ated forbearances. Another $2.1 billion in lost funds will be faced each month by those with portfolio-held or privately securitized mortgages (some 7.2% of these loans are in forbearance as well). Reminder: FHFA has said that P&I advance payments will be capped at four months for servicers of GSE-backed mortgages. Given today’s number of loans in forbearance, servicers of GSE-backed loans face $8 billion in advances over that four-month period. There is no such cap on the additional $800 million in monthly T&I advances. According to Black Knight CEO Anthony Jabbour, the recent Federal Housing Finance Agency (FHFA) announcement of a four-month limit on advance obligations for servicers of mortgages backed by Fannie Mae and Freddie Mac provides the industry with some much-needed clarity. Having a four-month end date on the period in which servicers need to advance principal and interest payments on behalf of homeowners in forbearance is extremely helpful to our servicing clients, said Jabbour. Still, even knowing that time limit, with today’s number of forbearance plans, servicers are still looking at more than $7 billion dollars in advances over those four months. And the forbearance numbers are climbing steadily, day by day. Clearly, this remains a challenging situation all around. With dramatic increases in unemployment, delinquencies and defaults can be expected to increase for the foreseeable future, even during forbearance, Black Knight notes. From the start of the COVID-19 crisis, Black Knight has sought to provide leadership on behalf of our clients, as well as provide them with clarity, actionable intelligence and knowledgeable assistance, Jabbour added. Beyond that, no other company has the sort of holistic view of the mortgage market and related industries that Black Knight has. We’ve been able to see and quantify what this situation means for our clients, the industry and the wider U.S. economy, and we have been actively sharing and innovating around that insight. DSNews See more

Cities at Risk of a Housing Recession The housing market is set to remain a bright spot in the face of a possible recession caused by the COVID-19 pandemic, according to Redfin. Because the housing market was strong going into the 2020 recession, there’s currently no reason to expect a major crash in home prices, Redfin notes. As Redfin states, the driving factors for this 2020 recession are unrelated to real estate, which is just one of the reasons at this time we believe fa...llout in the U.S. real estate market will be mild, and nowhere near the catastrophe of the 2008 Great Recession. The housing market came into this turmoil in a strong position, with a very low supply of homes for sale and record levels of home equity, said Redfin Lead Economist Taylor Marr. Home equity can function as a rainy day fund. Homeowners can weather a storm of falling home values without the pressure to walk away from their home. They can also better handle a loss of income if they can tap into their equity with a home equity line of credit (HELOC). This stabilizes the market, preventing an influx of supply from foreclosures, which would further cause prices to fall in a vicious cycle. Additional government support provided through the stimulus bill CARES Act and a moratorium on foreclosures can also prevent a falling out during this pandemic. Affordable cities on the East Coast and in the Midwest are at the lowest economic risk, while Los Angeles, Miami, and San Diego have the highest risk, based on a late March 2020 analysis by Redfin economists. Those that are hit the hardest overall are also likely to be more at risk of a real estate downturn. Some cities have factors that make them more susceptible to losing their footing and are likely to be hard hit, continued Marr. Amidst rapidly rising layoffs, it will be especially difficult to sell a home in these markets, and yet buyers will likely find limited options as sellers delay listing, leaving the housing market in a standstill. Federal support will help cushion the fall, but in these areas it will take significantly longer to recover. DSNews See more

Foreclosure Trends, State by State California and Florida combined have totaled nearly 1.5 million REOs over the last 10 years, according to ATTOM Data Solutions Year-End 2019 Foreclosure Market Report. Other states leading the nation in REOs include Michigan (333,312), Texas (323,806), Illinois (312,057) and Georgia (304,964). Metropolitan statistical areas with a population greater than 200,000 that saw a year-over-year increase in REOs included Honolulu, Hawaii (up 34%); M...yrtle Beach, South Carolina (up 28%); Florence, South Carolina (up 18%); Buffalo, New York (up 16%); and San Luis Obispo, California (up 9%). On a broader level, however, REO activity has been dropping significantly across the U.S. The nation saw 493,066 foreclosure filings in 2019, representing 0.36% of all U.S. housing units, down from 0.47% in 2018. ATTOM’s report includes default notices, scheduled auctions and bank repossessions as foreclosure filings, which were down 21% from 2018 and down 83% from a peak of nearly 2.9 million in 2010. Repossessions dropped as well in 2019, down 37% from 2018 to 143,955 total properties. The continued decline in distressed properties is one of many signs pointing to a much-improved housing market compared to the bad old days of the Great Recession, said Todd Teta, Chief Product Officer for ATTOM Data Solutions. That said, there is some reason for concern about the potential for a change in the wrong direction, given that residential foreclosure starts increased in about a third of the nation’s metro housing markets in 2019. Nationally, the number also ticked up a bit in December. While that’s not a major worry, it’s something that should be watched closely in 2020. Foreclosure starts were down 9% year over year in 2019, to 335,985. States that saw the largest declines in foreclosure starts from last year included Nevada (down 30%); New York (down 28%); New Jersey (down 21%); California (down 13%; and Arizona (down 11%). With foreclosure inventory down and interest in that inventory up, it’s a good time for sellers with distressed inventory to sell while the sun shines, said Daren Blomquist, VP of Market Economics with Auction.com. Foreclosure buyers still enjoy sizable discounts below estimated market value due to the distressed nature of foreclosure inventory, but the average sales price for foreclosure auction properties sold through the Auction.com platform rose to a new record high in 2019 even as the rate of sales to third-party buyers increased. DSNews See more