Real Estate News From the We Buy Houses

Home foreclosures in New York state rose 14 percent in the first quarter from the 2007 fourth quarter, with 82 percent of the foreclosures concentrated in the New York City metropolitan area, according to a report released on Thursday.

In addition, 59 percent of the foreclosures involved subprime borrowers, with African-American and Hispanic communities twice as likely to take out subprime mortgages, according to the report by the New York State Commission of Investigation.

Two New York City boroughs, Brooklyn and Queens, accounted for 36 percent of all foreclosures, and two counties in nearby suburban Long Island, Nassau and Suffolk, accounted for 24 percent, the study found.

Mortgage fraud occurred most often in New York City, Long Island, and Monroe County, in the northwest part of the state near Rochester, the study said.

The commission, whose members are appointed by the governor, is one of several state agencies that probe fraud and corruption.

Because federal laws often supersede state banking laws, New York’s consumer protection rules have too little impact, the report said.

“The principle focus of this investigation was subprime mortgage fraud in New York State, but it was impossible in conducting this investigation not to recoil at the extremely worrisome statistics in the subprime lending market in general,” said Commission Chairman Alfred Lerner in a statement.

The commission said it proposed remedies including banning the same person from serving as both the real estate and mortgage broker in the same deal and tightening state banking and real estate rules “to combat mortgage scammers.”

Real Estate News From the We Buy Houses

You’ve got to sell a piece of property to sell, and you’re determined to do so during the current real estate wasteland, where it seems that every house on the street is an “open” and buyers with a decent down payment and credit report are more scarce than milkmen.

You need some professional help.

In selecting an agent or a Realtor to handle the sale, a friend recommends a guy he worked with who knows the neighborhood well, spends time getting to know your property and even brings home-baked cookies to hand out during open houses.

Your other option is a woman whose face is on billboards and bus stops, and while you’re still in the first minute describing the property to her she tells you she has three buyers desperate for a house like yours and will guarantee to sell it in a month.

So who do you go with?

Whether you’re buying or selling, picking a real estate agent may be your toughest decision.

“It’s really about personality and who you trust will work in your best interests,” says Stephanie Gieseler, a Honolulu Realtor. “The one who promises the moon and the stars may not be able to deliver, but your B.S. meter could be turned off because you want to sell so badly. If you can, take some time to pick the right person for you.”

Here are some tips to help:

• Look at the names on the local “for sale” signs. Hopefully, there are at least a few pros who specialize in your neighborhood and compete against each other. If one name dominates the rest, he or she isn’t always the best choice. Your property could get lost among all the other listings. Look for an up-and-comer who might be hungrier to make a sale. 
• Total honesty in a real estate agent or Realtor is critical. If you’re selling a house in Brookline, Mass., you want your agent to tell you that all the New York Yankee memorabilia in your den should be boxed up, lest it offend a Red Sox fan/home shopper who’d otherwise be inclined to buy. 
• Place a call to the local board of Realtors. Many can let you know about members in good standing and those who have been receiving complaints. 
• Realtors often have an alphabet soup of designations on their business cards that show added training they’ve received. Some of these focus on the types of properties sold such as selling and buying vacation homes or advanced marketing. Others concentrate on client needs, which can be important. A senior real estate specialist, for instance, focuses on clients who are usually buying or selling into retirement.”That’s really very critical,” says Gieseler. “For many of these people it’s not just a business transaction, it’s a changing of their lives. If you’re helping parents with a move, it’s wise to look for someone with that training.”

   

• Odds are you’ve got to make a killer presentation to earn someone’s business. Why should a real estate agent be any different? If he or she walks in, looks around, throws out an estimate of the selling price and hands over the listing agreement for your signature, make sure you ask how they got that price and show you the comps to prove it. A good real estate pro might know instinctively what a house will go for, but he or she should be able to break it down for you before the paperwork is signed.

Overall, find someone who fits your style.

“If you’re detail-oriented, you won’t do well with someone who’s laid back,” says Gieseler. “And a detail-oriented Realtor might make a laid-back client crazy. It’s a big transaction, which is why finding the right person is so important.”

 Real Estate News From the We Buy Houses

MADISON, Wis. — Those who are facing foreclosure often say the fear is the worst part — not knowing what the next steps are, if they’ll be able to bail themselves out, or sometimes worse — if they’ll ever own a home again.

Some of those up against a financial wall said they often feel that they don’t know what options they may have left, WISC-TV reported. 

Neil Mathweg, a Sun Prairie Realtor for Century 21, specializes in short sales, an option he said is a viable way to minimize damage to your credit, if you’re facing foreclosure. 

“If you don’t see your situation getting any better, I would definitely take this route, because it is a good route to get out of your house,” Mathweg said. “You can always buy another house down the road. If you go through foreclosure, it’s going to be very tough.” 

Compared to two years ago, Mathweg said he’s seen the number of short sales skyrocket. 

In a short sale, three parties are involved: the seller, the buyer, and the seller’s lender. 

The seller typically opts to sell the house at a price that will move the home quickly, and it’s called a short sale because the price is lower than what is left on the seller’s loan. Once the seller agrees to the buyer’s offer, the lender must approve that offer since he or she will be taking a loss, WISC-TV reported. 

“Everybody sits on hold until that offer gets approved by the bank; once it’s approved by the bank we go to closing,” said Mathweg. 

Below is a list of resources for homeowners facing foreclosure: 

Thehomebuyingcenter.com:
888-444-2893 

Hope Hotline:
888-995-HOPE

 Real Estate News From the We Buy Houses

The stories from the Gardens in Gilbert are the same as many American communities.

Times were great until the housing market plummeted. Now foreclosures and short sales are beginning to crop up in the development, like many others across the southeast Valley. The Gardens is located in Gilbert’s hardest hit 85296 ZIP code with 198 foreclosures in the first half of 2008.

Some residents, especially those who bought during the boom, find they owe more on their house than it’s worth in the current market. Those who financed with adjustable-rate mortgages or who took out home-equity loans are especially feeling the pain.

Selling is not a viable option for many of them because falling housing prices have been worsened by foreclosure properties on the market.

Take Celestial Williams. Her family is selling their home in the Gardens by Trend Homes but is moving to another house in the subdivision.

The home owned by Williams’ in-laws will allow the family to stay close to their neighbors, but selling their current home has been difficult.

Last year, the family tried to sell their home by themselves but weren’t successful. This year, the house is back on the market, and the family is being forced into a short sale because foreclosures on the market have dragged down prices. A short sale is when a homeowner sells the property for less than they owe.

Their home had no chance to sell in 2007 because another family who sold a home comparable to the Williams’ home in the Gardens took a $100,000 hit.

Three years ago, when the family moved to subdivision from Orange County, Calif., the family didn’t foresee the market crash. Now they are being forced to sell the home to stay out of debt.

“We planned on living here forever,” Williams said. “House prices were still going up when we bought it.”

The family’s neighbors have their own experiences with the declining housing market. Here are their stories:

Mortgage too high

Above Alecia Sibio’s door is a black plaque her son made when she moved into her townhouse in the Gardens.

The tri-level was the first home Sibio owned. The plaque engraved “Established 2005″ made her feel like she finally arrived in her new home.

Three years later, Sibio’s dream home has turned into a short sale, and she’s being forced to look at homes in Queen Creek, where she says prices are more affordable.

Sibio’s story is like hundreds of others. She can no longer afford the payments on her adjustable-rate mortgage.

There are 404 properties for sale in Gilbert that require lender or corporate approval for either short sales or relocations, according to Ed Cassady with Re/Max Alliance Group.

“In the beginning you feel like you are a wretched loser that’s not smart, wise or frugal,” Sibio said. “You start beating yourself up emotionally. But thousands of people in the country and hundreds in the town are going through the very same thing.”

In June, 35 of the 325 sales of existing houses in Gilbert involved foreclosed properties, according to an Arizona State University study.

Sibio is not sure whether she’ll bring her son’s plaque if she moves to Queen Creek.

The reminder of what she’s lost might be too much.

Homes are now rentals

Chris Dutkiewicz moved his growing family to the Gardens a year ago with plans to sell in April.

Well into the summer, the family is still in the condominium, and Dutkiewicz may be forced to rent his home in order for the family to move before his second child is due.

Dutkiewicz is cautious of renters because of the increase in foreclosures. He worries the influx of new renters have just come out of a foreclosure or short sale and are not as concerned about their credit because it’s already marred.

“If I rent out and my renters don’t pay, I can’t cover my mortgage,” Dutkiewicz said.

Buyers see opportunity

Foreclosures drive down home values and are forcing some owners wishing to sell to wait out the housing bust.

But people in the market to buy homes are benefiting from low prices. Tyson McKay rented in the Gardens until two weeks ago when the family moved to a bigger house they bought in the development.

Their new home had been foreclosed upon earlier this year.

“We’ve had our own financial struggles, but at the same time, there are people out there like us who didn’t get into a home and now we’re in a home,” McKay said.

Real Estate News From the We Buy Houses

The hangover keeps getting worse from Orange County’s subprime lending binge.

Wherever subprime lenders made the most loans, foreclosures are now hitting hardest.

Four Santa Ana ZIP codes had the highest concentration of foreclosures in the county in the second quarter, according to an analysis by DataQuick for The Orange County Register. In some ZIPs, the ratio of foreclosures to the total number of houses and condos doubled from the first quarter.

In parts of Santa Ana in 2005, the peak of the housing boom, 75 percent of the money borrowed to buy homes was subprime.

The situation is similar, though not as dramatic, in other central county cities, including parts of Anaheim, Orange, Garden Grove and Stanton.

But foreclosures also are spreading to areas not targeted by subprime lenders.

Some South County ZIPs rank in the county’s top third for concentration of foreclosures, including parts of Lake Forest, Ladera Ranch, Rancho Santa Margarita and Aliso Viejo. Some market watchers say buyers with good, or pretty good, credit stretched to buy homes in those areas to live in or as investments. Now they can’t afford their mortgages.

In North County, areas of La Habra and Buena Park are among the county’s top third for foreclosure concentration for similar reasons.

DataQuick totaled all of the foreclosures in each ZIP from April to June and compared that to the number of houses and condos in the area. For example, Santa Ana’s 92701 topped the list with 23 foreclosures per 1,000 homes. In the first quarter, the ratio was 10 per 1,000.

Experts say foreclosures are dragging down prices. In June, the median price of homes sold dropped anywhere from 13 percent to 50 percent in Santa Ana’s six ZIP codes vs. a year earlier. (Because a small number of homes trade hands in any particular ZIP, price swings can be exaggerated.)

U.S. Rep. Loretta Sanchez, a Democrat whose district covers Santa Ana, Garden Grove and parts of Anaheim and Fullerton, said the housing bill that Congress passed Saturday will aid areas like central Orange County.

The bill would allow the Federal Housing Administration to back up to $300 billion in refinanced mortgages, allowing cash-strapped borrowers to swap expensive loans for more affordable ones.

Yet some experts say that because lenders will be reluctant to accept a loss on loans backed by FHA, as required, fewer people will be helped than expected.

With banks inundated with bad loans, Sanchez said, they will have to make concessions or face insolvency. She expects them to deal.

Besides, she said, there has been a modest increase in sales of lower-priced homes.

Steve Thomas, president of RE/MAX Real Estate Services in Aliso Viejo, said first-time homebuyers are scooping up bank-owned properties and other distressed sales in cities like Santa Ana. By his math, foreclosures and short sales – in which a bank agrees to accept less than the debt owed on a property – make up about 75 percent of the homes for sale in Santa Ana.

He said it would take about five months to sell the more than 1,500 homes for sale in Santa Ana, but that is down from a market time of nearly four years in September, after the credit crunch began.

“Prices have come down to the point where the affordability is screaming, ‘First-time homebuyer, you can buy more home in Santa Ana, Garden Grove or Anaheim,” Thomas said.

True, but some experts expect prices to keep falling in those cities as foreclosures are sold. A spike in notices of default, the first stage of foreclosure, in nearly every ZIP code in the county in the second quarter vs. a year ago suggests foreclosures will keep adding up. (Just two ZIPs in the county, both in Newport Beach, didn’t see an increase in notices of default.)

Of course, the foreclosure debate remains largely academic for Orange County’s priciest ZIPs. Eighteen ZIP codes, mostly along the coast, saw either no foreclosures in the second quarter or a ratio of one foreclosure per 1,000 homes.

 Real Estate News From the We Buy Houses

A Springfield man is among the defendants named in seven lawsuits targeting mortgage fraud filed Monday by Attorney General Jay Nixon.

In a lawsuit filed in Greene County court, Brian J. Thompson, 35, is accused of operating what Nixon termed a “foreclosure rescue scam.”

Under such a scheme, companies search foreclosure listings and approach homeowners, promising to stop the mortgage by paying lenders.

The scammers convince the homeowner to deed over their homes, then rent them back, with rent payments going to pay off the mortgage. But Nixon said the firms don’t make the mortgage payments and force consumers to either leave their homes or buy them back.

Thompson denies being involved in such a scheme.

“The suit filed against me by the Missouri Attorney General’s Office is baseless and arises out of false complaints,” Thompson said in a statement. “This is nothing more than vindictive behavior by angry clients who did not perform in the manner set forth in their contract.”

He went on to suggest political motives for the lawsuit, saying it was “meant to gain favor with the voting public.”

The lawsuit against Thompson is one of seven filed by the attorney general in various Missouri courts Monday.

Four of the suits target “foreclosure rescue scams.”

The remaining three target companies that allegedly promised good refinancing terms for loans that ended up being costly.

Nixon claims loan payments from one homeowner were tardy in being recorded, resulting in late fees and negative credit reports.

Lawmakers during the past session passed legislation designed to go after mortgage fraud. The bill allows real estate brokers, agents and appraisers to be fined or have their professional license revoked if they make false statements or fail to disclose material facts in their professional duties.

The bill allows for civil fines up to $2,500 per violation and makes mortgage fraud a felony punishable by up to seven years in prison.

Under the legislation, state appraisers and real estate commissions and the state finance division also will be able to investigate allegations of mortgage fraud and levy even higher fines — up to $5,000 per violation.

Real Estate News From the We Buy Houses Team

Foreclosures more than doubled in Massachusetts in the first six months of this year compared to the same time period last year, according to a report from The Warren Group, which tracks real estate data.

A total of 6,707 foreclosure deeds were recorded during the first half of 2008, up 117.6 percent from 3,083 during the first half of 2007. Foreclosure deeds are the final step in the foreclosure process.

Foreclosure deeds in June rose 50 percent to 1,131 from 756 in June 2007.

While foreclosures have increased year-over-year, the number of foreclosures in June was 19.5 percent lower than May 2008 when 1,405 deeds were recorded.

Meanwhile, petitions to foreclose ­— the first step in the process — fell sharply during the month of June. Lenders filed 350 petitions to foreclose in June, an 84.8 percent decline from 2,308 a year ago, and 10.3 percent lower than May when 390 were filed. Year-to-date petitions increased 1.4 percent to 13,076 from 12,899 in 2007.

A law that took effect at the beginning of May is postponing foreclosure petitions, according to The Warren Group, also the publisher of the Banker & Tradesman.

Auction notices in June jumped 17 percent to 1,590 from 1,358 in June 2007. Year-to-date auction notices shot up 38.8 percent to 10,504 from 7,570.

Even some of Wall Street’s biggest bears were taken aback by a recent report showing a surge in second-quarter home foreclosures. But the dour news was no surprise to Mark Britton, who runs Avvo.com, a Web site that lets users rate attorneys. Searches for foreclosure lawyers on Avvo had skyrocketed eightfold in six months. “A lot of people are hurting out there,” says Britton.

Effects of the housing bust are showing up all over the Web. As the number of foreclosures has increased—they’re up 53% in the past year, says online real estate database RealtyTrac—consumers are scouring the Web for help navigating the subprime mortgage morass. In June, there were 1.82 million searches for the term “foreclosure,” according to research firm comScore (SCOR), which launched a search marketing tool last year to track searches. That’s an increase of 117% from 12 months earlier.

Among the most popular online resources are those aimed at helping people sell distressed properties at a discount. Foreclosure.com, a decade-old database of distressed real estate, is among the most visited sites in the category, comScore data show. More than 14.5% of those who searched for the term visited the site, according to comScore. That’s not surprising given that sales of foreclosed homes are up nationwide, particularly in states such as California and Nevada (BusinessWeek.com, 7/25/08). Other sites receiving tons of foreclosure-related traffic include RealtyTrac, which also tracks foreclosed properties, and real estate search engine Trulia.com, according to comScore.

Avoiding Bankruptcy
Web surfers are not simply searching for bargain properties, however. Much of the spike in foreclosure-related traffic is also for resources to avoid bankruptcy or homelessness. Traffic to HUD.gov, the official site for the U.S. Housing & Urban Development Dept., is up sharply. According to comScore, HUD.gov is among the top 10 sites visited after searching “foreclosures.” And in the past three months, Hud.com (which is not affiliated with the government office) jumped 228 spots in a ranking of most visited sites tracked by research firm Alexa, which is owned by Amazon (AMZN). Vistors to Hud.com can pick up timely tips. For instance, the site suggests people collect an itemized list of all assets that could be sold to avoid foreclosure and bankruptcy. Another tip: Find out if you qualify for government assistance. Military personnel and disaster area victims, for example, are eligible for special government loans to avoid foreclosure. The site also provides government assistance to subprime borrowers with adjustable-rate mortgages.

When the government can’t help, a good lawyer sometimes can. The attorneys seeing the largest spikes in business are those who help homeowners handle foreclosures or assist banks and property owners in collecting unpaid mortgages. Eric Appleton, a foreclosure attorney in Tampa who is among the most highly rated in his field on Avvo.com, had more foreclosure cases in a single day recently than he had seen in a whole month last year. “People are most definitely going online to find lawyers to defend themselves against foreclosures,” says Appleton, who often represents condominium associations. “It’s not uncommon for us to get 10 to 15 mortgage foreclosure [cases] in a single day.”

Part of the reason for increased lawyer searches is the complexity of foreclosure laws, which vary by state. In Florida, for example, unpaid common charges on foreclosed apartments are divided among the mortgage-paying tenants. Tenants can see their common charges increase 40% in a year thanks to a few neighbors defaulting on their home loans, says Appleton. “The bad debt expenses get passed on to the people who pay,” he says. When that happens, the paying tenants typically sue in hopes of forcing the bank or the buyer of the foreclosed property to shoulder some of the cost.

Amid so many searches for foreclosure attorneys, however, Avvo founder Britton sees a bright spot. More people are still looking up business attorneys to help close deals and file documents than those who can help them avoid bankruptcy. “It’s an interesting commentary on the American spirit,” says Britton, adding that even in tough times “more people want others to help them run their business.”

(EMAILWIRE.COM, July 30, 2008 )  SAN FRANCISCO, CA – Democrats in congress are hoping to influence regulatory agencies and mortgage lenders and banks who make mortgage loans to actually make meaningful mortgage loan relief programs such as refinancing programs based on current home values even though the President has not yet signed housing rescue legislation.

According to government statistics, up to 400,000 home owners would be able to take advantage of the new legislation passed on Saturday by the US Senate that would ask mortgage lenders to write down principal balance that they are owed to reflect current market conditions.  But, many housing industry watchers suspect that far fewer homeowners might end up being helped.  According to www.RealtyTrac.com 739,714 homesowners received some sort of delinquency notice related to possible foreclosure in the second quarter of 2008.

The legislation contains provisions that will create a program to be administered by the Federal Housing Administration, part of HUD, and will create insurance for up to $300 billion in refinanced 30-year, fixed rate loans. These mortgage loan cannot for greater than 90% of a home’s current appraised value.  For mortgages where the borrower owes more than the home is currently worth on the open market, the lender would have to agree to reduce the principal amount owed to the 90% level.  The borrower in such a refinancing program would have to share the value of the loan by half with the FHA if it eventually goes up in value.

The program is slated to start Oct. 1 and end Sept. 30, 2011. Mortgage borrowers will not be permitted to refinance if they purposely missed their loan payments or they pay less than 31% of their income as a loan payment.  This is supposedly to ensure that people who actually can afford to make their payments do in fact do so.

Real estate and foreclosure expert Patrick McGilvray, J.D., president of www.TheHomeBuyingCenter.com, a business that matches homeowners looking for a we buy houses company with real estate investors and real estate agents specializing in short sales, said of the legislation, “The banks will have to agree to write down loans that they should not have made in the first place, and this has been something they have resisted since the market began to decline in 2005.”

McGilvray added, “millions of American homeowners bought homes between 2003 and 2006 at extremely over-inflated values, and now the real estate market is reflecting that reality.”
The Senate approved the legislation 72-13 and the House of Representatives passed it  272-152.

 Real Estate News From the We Buy Houses Team

“When you’re talking about mortgage fraud, you generally are talking about bank robbery without a gun,” she said. “You acquire properties with no intention of paying back the loans.”

One in every 211 homes in Florida faced some type of foreclosure action in June, according to RealtyTrac, the fourth highest rate in the nation based on more than 40,000 foreclosure notices. Florida is second in terms of the availability of real estate-owned properties, or REOs, which are properties returned to the mortgage company after an unsuccessful foreclosure action.

REOs are an area of specialty for Amanda Huggins of Coldwell Banker in Tampa and have allowed her group to find a niche as they slog through the current housing climate.

“We really try to educate people on the foreclosure property and why it’s different from regular real estate,” Huggins said. At its peak, market “investors” were actually inexperienced speculators and an abundance of bad deals are now back on the market as an oversupply, she said.

One man told Huggins he got messed up in a scheme he believed would allow him to split a $50,000 return. Using his solid credit score, he allowed his name to be used in the purchase of a foreclosed property as a way to split the equity on the house. He was unaware that home had been appraised for $50,000 more than its value, and when a tenant couldn’t be found willing to pay enough rent to cover the over-inflated mortgage cost, the man was stuck with both the house and no equity.

Such a practice is known as equity skimming and is one of several ways people are being scammed in the housing market, said Sandi Copes, a spokeswoman with state Attorney General Bill McCollum’s office.

Other popular scams include mortgage origination fraud where income or property value is misrepresented to obtain financing. It’s a common practice in terms of some “foreclosure rescue” operations where a fee is collected in advance from homeowners who think their home can be saved from foreclosure.

Then they hear back from them a month or two later that they tried but weren’t able to help, said state Sen. Mike Fasano, R-New Port Richey. “These are individuals in a desperate situation who already don’t have money on hand to pay their mortgage, and they’ll take a credit card to get a cash advance to pay these people only to have nothing come out of it,” he said.

Because of that, Fasano was a senate sponsor to House Bill 643, known as the Foreclosure Fraud Act, that Gov. Charlie Crist signed in May.

Among other things, it requires foreclosure rescuers to charge only when services are rendered and gives those who enter into agreements a three-day cooling off period. It also makes violations punishable with fines of up to $15,000.

“Why should anyone get paid up front?” Fasano said. “When someone comes and cuts my lawn or when I have my taxes done by a CPA, I pay when the service is complete.”

 Real Estate News From the We Buy Houses Team

NOTE: The following letters are unedited and reflect only the views of the author.

The United States is in the midst of a foreclosure crisis, and California is at the epicenter of that meltdown.

Congress is working on a Foreclosure Prevention Act that will allegedly help distressed homeowners avoid foreclosure through “voluntary” lender actions.

In reality, most mortgage lenders fail or refuse to help homeowners faced with foreclosure and politicians posture with empty political promises and legislation that gives false hope to consumers and homeowners.

Asante Real Estate Group works with many short sale clients, bank-owned homes and lenders. For example, Asante Real Estate Group has been trying to convince American Home Mortgage Servicing Corporation to accept fair market offers on two owner-occupied homes selling for $449,000 in San Jose and $3.9 million in Los Gatos. American Home Mortgage Servicing Corporation has refused both of these bonafide offers and these homes are now hurtling toward an unnecessary foreclosure.

Elected officials, such as Sen. Dianne Feinstein, claim they want to help homeowners facing foreclosure. However, both of these homeowners went to Sen. Feinstein’s San Francisco office and requested her help, only to be dismissed by her staff and referred to HUD counselors. Sen. Feinstein’s staff refused to help convince American Home Mortgage Servicing Corporation to reconsider the short sale offers for the above-described homes. In the end, these constituents were told to leave and were physically shown the door by Sen. Feinstein’s security guard

I am constantly dismayed that mortgage lenders, such as American Home Mortgage Servicing Corporation, consistently fail to work in good faith with distressed homeowners and fail to respond in a timely manner to time-sensitive offers. These lenders procrastinate and stonewall homeowners for months and end up forcing thousands of homes into foreclosure when those homes could have been saved through refinancing or short sales at fair market values.

It is even more disturbing that an elected representative, such as Sen. Feinstein, also refuses to help the distressed homeowners. Sen. Feinstein is quick to claim credit for “helping” distressed homeowners - but when her constituents actually need her help, she kicks them out of her office.

In the near future, a majority of these lenders, such as American Home Mortgage Servicing Corporation, are going to petition our Congress for a record bailout of hundreds of billions of dollars, and Sen. Feinstein and legislators like her are going to reward these lenders for failing or refusing to solve their own problems by working in good faith with distressed homeowners.

Ironically, Sen. Feinstein has been quoted as saying, “We need to clean up the industry to protect homebuyers.”

Well, talk is cheap.

Carey Sutton, CEO

Asante Real Estate Group, Inc.

 Real Estate News From The We Buy Houses Team  

More than 1,800 people showed up to help ABC’s “Extreme Makeover” team demolish a family’s decrepit home and replace it with a sparkling, four-bedroom mini-mansion in 2005.

Three years later, the reality TV show’s most ambitious project at the time has become the latest victim of the foreclosure crisis.

After the Harper family used the two-story home as collateral for a $450,000 loan, it’s set to go to auction on the steps of the Clayton County Courthouse Aug. 5. The couple did not return phone calls Monday, but told WSB-TV they received the loan for a construction business that failed.

The house was built in January 2005, after Atlanta-based Beazer Homes USA and ABC’s “Extreme Makeover” demolished their old home and its faulty septic system. Within six days, construction crews and hoards of volunteers had completed work on the largest home that the television program had yet built.

The finished product was a four-bedroom house with decorative rock walls and a three-car garage that towered over ranch and split-level homes in their Clayton County neighborhood. The home’s door opened into a lobby that featured four fireplaces, a solarium, a music room and a plush new office.

Materials and labor were donated for the home, which would have cost about $450,000 to build. Beazer Homes’ employees and company partners also raised $250,000 in contributions for the family, including scholarships for the couple’s three children and a home maintenance fund.

ABC said in a statement that it advises each family to consult a financial planner after they get their new home. “Ultimately, financial matters are personal, and we work to respect the privacy of the families,” the network said.

Some of the volunteers who helped build the home were less than thrilled about the family’s financial decisions.

“It’s aggravating. It just makes you mad. You do that much work, and they just squander it,” Lake City Mayor Willie Oswalt, who helped vault a massive beam into place in the Harper’s living room,

Real Estate News From the We Buy Houses Team

The Philadelphia metro area has experienced a 62-percent increase in foreclosures since last quarter, according to recent data.

Despite the increase, Philadelphia continues seeing fewer foreclosures than many other areas around the country. While the national average of foreclosures is one per every 171 households; Philadelphia has one per every 324 households.

RealtyTrac, an online marketplace for foreclosure properties, released the data Friday.

The Philadelphia metro area includes the city and Bucks, Chester, Delaware and Montgomery counties.

Susan M. Wachter, professor of real estate, finance and city and regional planning at the Wharton School at the University of Pennsylvania, attributed the lower foreclosure rate to the region’s stable rate of housing growth.

“We did not participate in the boom to the same extent and therefore we are not as vulnerable to the downside forces,” Ms. Wachter said.

Daren Blomquist, a RealtyTrac spokesman, agreed.

“Those areas [with higher foreclosures] tended to have a real-estate market that was very, very hot the past few years with home prices skyrocketing and a lot of new homes being built in the areas,” Mr. Blomquist said, adding that the market had been overextended in those areas.

“Philadelphia does not seem to have a lot of the characteristics those [areas] did and so it was not quite as susceptible to the big jump in foreclosures.”

Mr. Blomquist also suggested that Philadelphia’s Mortgage Foreclosure Division Program might have helped. The program, a City Council initiative, forces lenders to meet the homeowners face-to-face to consider alternative solutions before foreclosing.

Comparing this quarter to the same quarter in 2007, a 47-percent increase in foreclosures in Philadelphia becomes apparent.

Ryan Sweet, senior economist at Moody’s Economy.com, headquartered in West Chester, sees two variables determining whether the increase in foreclosures continues in Philadelphia.

“The key for Philadelphia is the labor market,” he remarked. “If the labor market holds up better than anticipated, we’ll see less foreclosures.”

Mr. Sweet said housing prices would be another vital element.

“If housing prices begin to fall, that’s a big drag on household wealth, and that will lead homeowners into foreclosure,” he said.

Similar trends have emerged in the state, as foreclosures have risen by as much as 76 percent since last quarter.

While the numbers of foreclosures continues growing at both state and local levels, Philadelphia has a higher rate. In Pennsylvania, 0.2 percent of households have had their mortgages foreclosed. In Philadelphia, that number is 0.3 percent.

Ms. Wachter said the type of loans accounts for the difference.

“Philadelphia has a larger proportion of homes with funding from subprime loans, and this source of loans is no longer available,” Ms. Wachter said.

Mr. Sweet says speculation may have contributed to Philadelphia’s higher rate of foreclosures.

“For speculators, Philadelphia was the big draw, followed by Allentown, while the remainder of the state was more first-time home buyers,” he said, adding that investors had seen fixer-up homes in Philadelphia as opportunities for resale at a profit after having made improvements. However, many of those investors have since abandoned those houses.

Across the United States, foreclosures rose 14 percent since last quarter, with Nevada, California and Arizona suffering the highest rate of foreclosures. In Nevada, one per every 43 households received a foreclosure filing. In California and Arizona, it was one per every 65 and 70 households respectively.

Real Estate News From The We Buy Houses Team  

Home prices in 20 major U.S. cities have fallen a record 15.8% in the past year, as prices dropped in all areas tracked by the Case-Shiller home price index, Standard & Poor’s reported Tuesday.

Prices in 10 cities fell 16.9% in the past year.

Prices thus are at the same levels as they were in the summer of 2004, which means four years of appreciation have been effectively wiped out. Prices are down 18.4% from peak levels seen two years ago.

Home prices fell 0.9% in May compared with April, although seven of the 10 cities showed a month-to-month increase, which David Blitzer of S&P termed a “possible bright spot.” The pace of the monthly decline has slowed for three months in a row, having peaked at 2.6% in February.

Prices in the so-called bubble regions continued to plunge at a rapid pace in May.

Prices in Miami fell 3.6%, while prices in Las Vegas and Phoenix fell by more than 2.5%. On the other hand, prices rose 1% in Atlanta, Boston, Denver and Dallas.

What goes up, comes down

Home prices surged in 2003 through 2006, climbing by a cumulative 52%, according to Case-Shiller. Since then, however, homeowners have given up half of the gains from earlier in the decade as the housing and credit bubbles burst.
Falling prices have eroded Americans’ wealth, cutting into their ability to borrow against the equity in their homes or refinance their mortgages or sell for a profit. Millions of Americans now owe more on their homes than they’re worth.
The falling home values could also trigger higher monthly payments for many homeowners with negative-amortization loans.

But falling prices are likely a necessary ingredient if the housing market’s to work out its excesses and begin growing again.

The Case-Shiller index tracks sales of the same homes over time, so it’s not influenced by the mix of homes sold in a period. Unlike the home price index from the federal Office of Federal Housing Enterprise Oversight, the Case-Shiller gauge tracks homes with nonconforming loans, such as subprime loans or jumbo loans, which were common in the frothiest markets.

Last week, OFHEO said prices in its monthly index had fallen 4.8% in the past year.

Here’s a list of the 20 cities in the Case-Shiller index with the annual decline through May:

Las Vegas, down 28.4%; Miami, down 28.3%; Phoenix, down 26.5%; Los Angeles, down 24.5%; San Diego, down 23.2%; San Francisco, down 22.9%; Tampa, down 20.2%; Detroit, down 17.4%; Washington, down 15.4%; Minneapolis, down 14.8%; Chicago, down 9.4%; Cleveland, down 8%; Atlanta, and New York, both down 7.9%; Seattle, down 6.3%; Boston, down 6.2%; Portland, down 5.2%; Denver, down 4.8%; Dallas, down 3.1%; and Charlotte, N.C., down 0.2%

Real Estate News From the We Buy Houses Team

The spate of hurricanes that battered South Florida three years ago blew the shingles off Tatrisha Harvin’s modest house in Miami Gardens, Fla. But this year’s housing catastrophe could do something much worse. Two years ago, Harvin, 44, a Miami-Dade corrections clerk, turned to interest rates that were at a historic low to ease her household finances. The apparent windfall came at a critical time: her husband was injured and a daughter was diagnosed with diabetes. She refinanced with an adjustable-rate mortgage, taking out a chunk of her home equity. But she says she never realized the ultra-low teaser rate would jump so high so soon, raising her monthly mortgage payment by more than $1,000. “That was never explained to me,” she says. “If it was, I never would have signed any documents.” A year behind on her payments, Harvin faces foreclosure.

She and thousands of others in her community. When America’s category 5 housing hurricane hit Florida this year, its eye came ashore at Miami Gardens. More than 4,000 of its 22,000 residential units are in foreclosure, giving this predominantly African-American city just north of Miami one of the state’s — and one of the nation’s — highest mortgage failure rates. Few places were as glad to hear that Congress this week had passed a housing relief bill that could help some 400,000 desperate homeowners like Harvin keep their homes via mortgage refinancing aid. They’re happier still that President Bush said he’ll sign it, despite his objections to the refinancing trust fund as well as $4 billion set aside to help local governments buy up and refurbish already foreclosed homes (the President described these provisions as giveaways). “We feel a large measure of hope,” says Miami Gardens councilman and real estate lawyer Andre Williams. “This isn’t just about maintaining houses, it’s about preventing the destruction of families and communities. A city’s quality of life is also on the line.”

But the daunting trick for cities like Miami Gardens will be making the federal dolars work effectively and, perhaps more important, equitably. The triage process may require local officials to identify not only those homeowners who are most likely to make the best use of the aid — the most long-term, credit-worthy bets — but also those who were genuinely victimized by predatory or unscrupulous lenders as opposed to those who simply made bad financial decisions (especially property flippers) and took on more housing debt than they and their salaries could ever afford. “We want folks to be able to hold on to the American dream,” says Daniel Rosemond, the Miami Gardens director of community development. “But at the same time, in a low-wage region like South Florida, we have to be realistic about people who, frankly, aren’t ready to be homeowners yet.”

Under the new legislation, which also provides billions to save the country’s two largest mortgage banks, Fannie Mae and Freddie Mac, the Department of Housing and Urban Development (HUD) has 60 days to lay out a plan for how the homeowner aid will be disbursed via state and local agencies. After that it has 30 days to send it out. Officials like Rosemond, who this summer created a foreclosure prevention program in his city to help distressed homeowners buy more time, hope that lenders who are poised to pounce with notices will hold off until the money arrives to help debtors make up for delinquent mortgage payments and refinance into more affordable mortgages backed by the Federal Housing Administration. One key, according to homeowner advocates, will be whether or not the program will prompt lenders in general to be more generous from here on out. “So far we’re not seeing the loan modifications we need from lenders,” says Jackie Duran, a foreclosure counselor for the non-governmental Neighborhood Housing Services, which has been overwhelmed in recent months by homeowners from all over the Miami area. “When you’ve got people whose [interest] rates have jumped to 11 or 12%, a 1% reduction isn’t going to work. You need at least a 3% break.”

The housing bubble was good to Miami Gardens, a working/middle-class city that prides itself on its family and community cohesiveness. The city was incorporated, in fact, in 2003, at the height of the boom, which has since helped its population of 110,000 reach a 71% homeowner rate. “It’s the core of our existence,” says Rosemond. The city’s property tax revenue leapt by 65% last year — and its property values have risen 120% the past five years. But for a city with a median income less than $40,000, it was all a bit out of whack. Rosemond notes that before the bubble burst last year the average Miami Gardens home value was nearing $300,000 when it should have been closer to $200,000. As a result, the city and its minority residents have been a special target of what Williams calls “scoundrels and criminals dressed as mortgage brokers” duping low income or subprime buyers with risky mortgage products.

Williams is quick to note that not all the lenders involved in the Miami Gardens disaster were disreputable — and he acknowledges that “there were too many folks here who were totally irresponsible as buyers and shouldn’t be able to take advantage of this process.” He agrees, for example, with a stipulation in the new bill that defaulting homeowners who get bailed out must return all or a significant portion of any profit they make on the subsequent sale of their house to the federal government. But he also stresses that one of the things he hopes the city can do with the federal aid is reform the reckless culture of home-buying by setting up tools like lender data bases and buyer workshops. “This has to become an educational process as well as a relief process,” he says.

Rosemond agrees. He’s already envisioning rules for the federal aid when it reaches Miami Gardens — such as prohibiting refinancing with adjustable-rate mortgages and requiring 30-year fixed loans in order to be eligible for relief. He also hopes to establish rent-to-own programs, providing landlords with incentives to give house and apartment renters the option to buy their units once they’ve saved enough and built a strong enough employment and credit history. “We need people to rent longer before they buy houses, but we also need renters to feel like they have a stake in those properties,” Rosemond says. “This would motivate them and create the kind of homeownership you want for a community, not the houses built on sand.”

Residents like Harvin, however, don’t have the luxury of looking that far ahead. When told about the new federal relief, she said it was the best news she’d had in years. “A lot of us in this community haven’t even recovered yet from the 2005 hurricanes,” she says. “Then the housing mess started hitting us, and you take into account we’re all strugglin’ to buy food and gasoline. Seems the least they could do.” Americans should know by Christmas whether that will be enough to preserve the quality of life in Miami Gardens and countless other U.S. cities still recovering from the housing storm.

Real Estate News From the We Buy Houses Team

Though the pain of home foreclosures continues to spread through the West Valley’s newer suburbs where speculative building was most common, the damage is also spreading to cities with more established housing markets, new statistics suggest.

In theory, rising foreclosures should be most prevalent in areas where the peak of development and sales activity was most recent. That holds true, according to a Republic analysis of foreclosure data from Information Market.

Waddell, Tolleson, Morristown, Litchfield Park, Glendale and Buckeye were hit hardest by new foreclosures in the first half of 2008.

In each community, the number of bank-owned properties jumped more than 500 percent.

Phoenix housing analyst RL Brown said the West Valley data show nothing “particularly sinister,” but are a reflection of what is happening across metro Phoenix due to subprime loans resetting and the economy generally slowing down.

New development activity occurred most recently in the unincorporated areas of Waddell and Morristown and in the town of Buckeye - an outgrowth of the rapid development that had previously occurred in the neighboring cities of Surprise, Glendale and Peoria.

Analysts say it makes sense that the newly developing areas saw the biggest rise in foreclosures this year. By comparison, Surprise had one of the biggest jumps last year, when it was on the front lines of development.

But Valley economist Elliott Pollack said other areas hit hard, Tolleson in particular, surprised him. Tolleson, Litchfield Park and Glendale had older housing stock and do not fit the foreclosure-spike pattern.

The suspicion is that the scope of bad lending practices is finally being recognized in those communities, and such practices were just as often applied to used homes and refinanced mortgages in established communities as they were to new homes in new subdivisions, Pollack said.

Pollack added that it could also be that residents of older communities were more affected by higher food and gas prices and job losses, leading them into foreclosure.

“Parts of Glendale . . . Tolleson, are blue-collar areas. It’s the economy combined with other things” causing the spike in statistics, Pollack said.

The number of foreclosure warning notices in the first half of 2008 rose highest in Youngtown, Waddell, Tolleson, Avondale and Buckeye, respectively, indicating the potential for more foreclosures to come.

The communities of Wickenburg and Sun City West were affected least by new foreclosures and foreclosure notices recorded in the first half of the year.

The housing rescue bill passed by the Senate Saturday hasn’t been signed into law, but top Democrats already are putting pressure on regulators and bankers to make sure a major program to prevent foreclosures doesn’t fall flat.

For struggling U.S. homeowners, the success or failure of the program — which would let roughly 400,000 owners refinance into affordable, government-backed loans — depends largely on bankers’ willingness to take a partial loss on the loans and to reduce the amount of money borrowers owe.

Bankers say they will do it, but it isn’t clear how many loans they might be willing to restructure.

“I absolutely do believe that there will be more principal reductions,” Michael Gross, Bank of America Corp.’s managing director for loss mitigation, mortgage, home-equity and insurance services, told a congressional panel Friday.

If successful, the program could put a dent in the rising foreclosure figures as interest rates on adjustable-rate loans continue to increase while house prices in many areas slip. RealtyTrac Inc. reported last week that 739,714 homeowners received foreclosure warnings and other related notices in the second quarter.

Experts say the program’s eventual participation could rise dramatically if home prices continue to drop — which could put more pressure on lenders to offer borrowers more assistance. Lawmakers are already pressing regulators and lenders to prepare now so the program can begin without delay when it goes into effect Oct. 1.

The Senate approved the bill 72-13 after the House of Representatives passed it Wednesday in a 272-152 vote. Minutes after the Senate vote, Senate Banking Committee Chairman Christopher Dodd (D., Conn.) called for a prompt meeting with the Federal Reserve, the Department of Housing and Urban Development, and other regulators to determine the quickest way to get the program up and running.

House Financial Services Committee Chairman Barney Frank (D., Mass.) on Friday asked lenders to hold off on foreclosures until Oct. 1 if it is possible the borrower would qualify for the government program. He threatened legislation if loan servicers and investors don’t work together to help prevent foreclosures.

Taking a loss on a loan by writing down the principal owed is one of the least desirable options for loan servicers. They typically prefer to either lower the interest rate or extend the life of the loan — from 30 years, for example, to 40 years.

“The real problem is going to be, just like with every program out there, are the banks going to take this seriously?” said Rebecca Case-Grammatico, a staff attorney at the Empire Justice Center in Rochester, N.Y., who advises clients facing foreclosure. “And if they don’t, we’re in the same position we’ve been in all along.”

Whether banks embrace the program could mean the difference between foreclosure and homeownership for people like Kimberly Cox, 37 years old. Ms. Cox refinanced the $254,000 mortgage on her New Boston, Mich. house three years ago into a mortgage that had a flat interest rate for the first two years and then switched to an adjustable rate. When rates reset a year ago, her monthly payments jumped from $2,100 to $2,800, far more than she and her husband could afford.

The program will be run by the Federal Housing Administration, a division of HUD, and will insure up to $300 billion in refinanced 30-year, fixed-rate loans. The mortgages can’t be for more than 90% of a home’s newly appraised value. For mortgages that exceed the value of the home, the lender would have to voluntarily write down the principal to the qualifying level. If the home goes up in value, the borrower must share newly created equity with the FHA.

The program will begin Oct. 1 and end Sept. 30, 2011. Borrowers won’t be able to qualify if they have intentionally defaulted on their loans or if they had a debt-to-income ratio of less than 31% as of March 1.

Karen Yule, a retired schoolteacher and counselor in Denver, hopes the program could help her save her two-story townhouse from foreclosure. She consolidated two mortgages on the home into one loan through a refinancing several years ago.

Her new adjustable-rate loan gave her multiple options each month, and she typically paid the lowest amount. Recently, her loan servicer told her she could no longer pay the lower amount she had been paying — $1,200 — and her payments doubled to $2,400, well above what she was able to pay. She has tried to move into a more affordable loan, but there is a hefty prepayment penalty if she moves out of her current loan before next year.

 Real Estate News From The We Buy Houses Team

Congress completed work Saturday on the government’s most sweeping response yet to the nation’s housing crisis, sending to President Bush a bill designed to help homeowners avoid foreclosure, spur home buying and prop up struggling mortgage giants Fannie Mae and Freddie Mac.

The Senate, in a rare weekend session, overwhelmingly approved the measure, 72-13, a reflection of the election-year jitters on Capitol Hill over the troubled economy. Bush has said he will sign the bill, which the House approved 272-152.

“Today, Congress did more than send a bill to the president - we sent a message to American families that help is on the way,” said Senate Banking Committee Chairman Chris Dodd, D-Conn., who helped write the legislation.

The measure’s critics attacked it as a bailout of speculators and irresponsible borrowers at potentially huge cost to taxpayers.

“This bill is fraught with too much risk and too little protection to the taxpayer,” said Sen. Christopher Bond, R-Mo., contending it would allow lenders to “dump their worst subprime mortgages” on the Federal Housing Administration.

GOP opposition

All the votes opposing the legislation were cast by Republicans.

Democrats, who control Congress, are looking at other proposals aimed at turning around the economy. These include debating in September a second election-year economic stimulus package that would provide $50 billion or more for bridge and road projects, home-heating assistance and other matters.

The bill passed Saturday, the American Housing Rescue and Foreclosure Prevention Act, contains a key provision that would allow the FHA to guarantee as much as $300 billion in lower-cost mortgages - provided that lenders accept significant losses.

The provision is expected to help at least 400,000 homeowners.

The bill would give the U.S. Treasury Department authority temporarily to increase its lending to Fannie Mae and Freddie Mac and buy their stock, a provision that Treasury Secretary Henry Paulson has called crucial to bolstering confidence in the companies and stabilizing housing finance markets.

The Congressional Budget Office recently estimated that there was a “probably better than 50 percent” chance that the federal bailout would not be needed. But if it is, it could cost taxpayers $25 billion, budget analysts said.

The measure includes about $15 billion in tax breaks, including a tax credit that is in effect an interest-free loan of as much as $7,500 for first-time home buyers.

It also funnels $4 billion to communities hard hit by foreclosures to buy and renovate abandoned properties, a provision that its supporters say would prevent blight and a decline in the value of neighborhood properties.

The measure gives states authority to issue an additional $11 billion in tax-exempt bonds to refinance troubled loans, provide loans to first-time home-buyers and finance low-income rental housing and millions for financial counseling.

It permanently would raise the cap on mortgages that Fannie Mae and Freddie Mac can buy and that the FHA can insure to $625,500 in high housing-cost markets. The bill also sets up a new regulator, the Federal Housing Finance Agency, to oversee the mortgage giants.

The two presumptive major-party presidential nominees, Republican Sen. John McCain and Democratic Sen. Barack Obama, each has expressed support for the measure but missed the vote. Obama was wrapping up his weeklong overseas trip; McCain was at his home in Arizona.

Foreclosures way up

The Senate action comes a day after a report that foreclosure filings nationally during the second quarter were up 121 percent from the same period a year ago.

The problem remains acute in California and Florida, which accounted for 16 of the top 20 metro foreclosure rates during the second quarter, with the Stockton and Riverside-San Bernardino areas Nos. 1 and 2, respectively, according to RealtyTrac.

Sen. Jim DeMint, R-S.C., forced the Saturday vote because Democrats refused to allow him a vote on a proposal to ban Fannie Mae and Freddie Mac from lobbying or making political donations to lawmakers.

“We can’t have the people who are supposed to watch over these organizations getting money from these organizations,” DeMint said. “At least if we’re going to ask the American taxpayer to be on the hook for billions, possibly trillions of dollars, let’s stop this.”

Even if the program works, its goals are modest compared with the scope of the problem, said Mark Zandi, chief economist for Moody’s Economy.com. He estimates that 5.5 million borrowers will default on loans by the end of 2009, with about half of those families losing their homes.

“If we’re lucky enough to help 400,000 households,” said Jared Bernstein, a senior economist at the Economic Policy Institute, “I’m afraid it’s a drop in the bucket.”

 Real Estate News From The We Buy Houses Team

The leading online marketplace for foreclosure properties, today released its Q2 2008 U.S. Foreclosure Market Report which shows foreclosure filings were reported on 739,714 U.S. properties during the second quarter, a nearly 14 percent increase from the previous quarter and a 121 percent increase from the second quarter of 2007. The report also shows that one in every 171 U.S. households received a foreclosure filing during the quarter.RealtyTrac publishes the largest and most comprehensive national database of foreclosure and bank-owned properties, with over 1.5 million properties from over 2,200 counties across the country, and is the foreclosure data provider to MSN Real Estate, Yahoo! Real Estate and The Wall Street Journal’s Real Estate Journal.

“Although much of the fallout from foreclosures is being driven by rampant activity in a few states, such as Nevada, California, Florida, Ohio, Arizona and Michigan, most areas of the country are seeing at least some increase in foreclosure activity,” said James J. Saccacio, chief executive officer of RealtyTrac. “Forty-eight of 50 states and 95 out of the nation’s 100 largest metro areas experienced year-over-year increases in foreclosure activity in the second quarter.

“Bank repossessions, or REOs, accounted for 30 percent of total foreclosure activity in the second quarter, up from 24 percent of the total in the first quarter,” Saccacio continued. “This shift in the distribution of activity indicates that there is a progression toward purging the problem loans out of the system — at which point the housing market can regain some sense of normalcy. Of course if another surge in defaults occurs, which could well happen later this year, it would refill the foreclosure pipeline and prolong the recovery.”

Nevada, California, Arizona post top state foreclosure rates

One in every 43 Nevada households received a foreclosure filing during the second quarter, the highest foreclosure rate among the states and nearly four times the national average. Foreclosure filings were reported on 24,657 Nevada properties during the quarter, up 26 percent from the previous quarter and up 147 percent from the first quarter of 2007.

Foreclosure filings were reported on 202,599 California properties during the second quarter, the highest total among the states and a rate of one in every 65 households — the nation’s second highest state foreclosure rate. Foreclosure activity in California increased 19 percent from the previous quarter and was nearly three times the level reported in the second quarter of 2007.

With one in every 70 households receiving a foreclosure filing, Arizona posted the nation’s third highest state foreclosure rate in the second quarter. Foreclosure filings were reported on 37,230 Arizona properties during the quarter, up nearly 36 percent from the previous quarter and close to four times the number reported in the second quarter of 2007.

Florida documented the nation’s fourth highest state foreclosure rate in the second quarter, with one in every 78 households receiving a foreclosure filing during the quarter - more than twice the national average. Foreclosure filings were reported on 109,433 Florida properties during the quarter, the second highest total of any state and an increase of nearly 25 percent from the previous quarter.

Despite a nearly 15 percent quarterly decrease in foreclosure activity in the second quarter, Colorado posted the nation’s fifth highest state foreclosure rate - one in every 129 Colorado households received a foreclosure filing during the quarter. Second quarter foreclosure activity in Colorado was still up more than 50 percent from the second quarter of 2007.

Foreclosure filings were reported on 37,689 Ohio properties in the second quarter, the third highest total among the states and a rate of one in every 134 households — the nation’s sixth highest state foreclosure rate. Second quarter foreclosure activity in Ohio was up nearly 21 percent from the previous quarter and nearly 27 percent from the second quarter of 2007.

With foreclosure filings reported on 32,868 properties during the second quarter, Michigan notched the fifth highest total among the states. One in every 137 Michigan households received a foreclosure filing during the quarter, the nation’s seventh highest state foreclosure rate.

Other states with foreclosure rates among the top 10 were Georgia, Massachusetts and Illinois.

Top 20 metro areas include Las Vegas, Phoenix, Miami, San Diego and Detroit

The Q2 2008 U.S. Foreclosure Market Report also ranks the nation’s 100 largest metropolitan areas by foreclosure rate. California and Florida metro areas accounted for 16 of the top 20 metro foreclosure rates, with the California cities of Stockton and Riverside-San Bernardino taking the No. 1 and No. 2 spots.

One in every 25 Stockton households received a foreclosure filing during the quarter — nearly seven times the national average — and one in every 32 Riverside-San Bernardino households received a foreclosure filing during the quarter — more than five times the national average. Other California metro areas in the top 20 were Bakersfield at No. 4, Sacramento at No. 5, Oakland at No. 8, Fresno at No. 9, San Diego at No. 11, Orange at No. 15, Ventura at No. 16 and Los Angeles at No. 19.

Las Vegas documented the third highest metro foreclosure rate, with one in every 35 households receiving a foreclosure filing during the quarter. Foreclosure filings were reported on 21,742 Las Vegas metro properties during the quarter, up more than 25 percent from the previous quarter and up nearly 144 percent from the second quarter of 2007.

The highest ranked Florida metro area was Fort Lauderdale, which ranked No. 6 with one in every 51 households receiving a foreclosure filing during the quarter. Other Florida metro areas in the top 20 were Miami at No. 10, Orlando at No. 13, Sarasota-Bradenton-Venice at No. 14, Tampa-St. Petersburg- Clearwater at No. 17 and Palm Beach at No. 18.

One in every 51 households in the Phoenix metro area received a foreclosure filing during the quarter, ranking No. 7; one in every 66 households in the Detroit metro area received a foreclosure filing during the quarter, ranking No. 12; and one in every 91 households in the Atlanta metro area received a foreclosure filing during the quarter, ranking No. 20.

Report methodology

The RealtyTrac Monthly U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing reported during the quarter — broken out by type of filing at the state and national level. Data is also available at the individual county level. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS: 19.70, +0.00, +0.00%); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). If more than one foreclosure document is filed against a property during the quarter only the most recent filing is counted in the report. The report also checks if the same type of document was filed against a property in a previous quarter. If so, and if that previous filing occurred within the estimated foreclosure timeframe for the state the property is in, the report does not count the property in the current month.

 Real Estate News From The We Buy Houses Team

The Senate cleared the last hurdle Friday to passing a housing rescue aimed at sparing hundreds of thousands of homeowners from foreclosure and bolstering troubled mortgage giants Fannie Mae and Freddie Mac.

The 80-13 test vote showed broad support for the election-year package and put it on track to pass the Senate by Saturday. The White House says President Bush will sign it, having earlier dropped a threat to veto it over $3.9 billion in neighborhood grants.

The bill — regarded as the most significant housing legislation in a generation — is designed to help an estimated 400,000 homeowners escape foreclosure by letting them refinance into more affordable loans backed by the Federal Housing Administration.

It was set to clear Congress as a private company reported that the number of households facing the foreclosure process more than doubled in the second quarter of 2008 compared with a year ago. Irvine, Calif.-based RealtyTrac, Inc., said that 739,714 homes received at least one foreclosure-related notice during the quarter, or one in every 171 U.S. households.

“The American people can begin to see they’re going to get some relief and some help from their Congress,” said Sen. Christopher J. Dodd, D-Conn., the Banking Committee chairman.

The plan gives the Treasury Department power to spend unlimited amounts to prop up Fannie and Freddie, should they need it, to calm investor fears about their financial stability at a time of rising foreclosures and falling home values. Treasury Secretary Henry M. Paulson calls the authority a “backstop” which he has no intention of using.

Paulson’s request for the emergency power helped forge a bipartisan deal on the legislation, which also creates a new regulator with tighter controls on the government-sponsored mortgage firms — something Republicans have long sought.

Democrats also won key concessions as part of the compromise, including a permanent affordable housing program to be financed by Fannie and Freddie profits and the $3.9 billion in grants for buying and fixing up foreclosed properties in neighborhoods hit hardest by the housing crisis.

Many conservative Republicans are vehemently opposed to the foreclosure rescue, which they call a bailout of irresponsible homeowners and unscrupulous lenders. They are equally furious about the help for Fannie Mae and Freddie Mac, companies they say enjoy lavish profits in good times and wield their outsized political clout to resist regulation while depending on the government to bail them out should they falter.

Sen. Jim DeMint, R-S.C., was single-handedly delaying a final vote on the package until Saturday unless Democrats allowed a vote on barring the two firms from lobbying and making political contributions.

Dodd called Republican efforts to delay the measure’s passage “tragic” given how many people are losing their homes each day.

More than three-quarters of Republicans voted against the measure when it passed the House on Wednesday.

 Real Estate News From The We Buy Houses Team

Sales of new homes fell in June for the seventh time in the past eight months, more proof that the worst housing slump in decades is getting deeper.

The Commerce Department reported Friday that sales of new single-family homes dropped by 0.6 percent last month to a seasonally adjusted annual rate of 530,000 units following an even bigger 1.7 percent fall in May.

The decline was slightly smaller than had been expected and sales were revised up a bit for May. Even with those changes, new home sales are down by a sharp 33.2 percent from a year ago.

The nation is enduring a steep downturn in housing that has pushed the overall economy close to a recession. It has also triggered a severe credit crunch, forcing U.S. financial institutions to cope with billions of dollars of losses from bad mortgage loans.

A separate report Friday showed that the number of households facing the foreclosure process more than doubled in the second quarter compared to a year ago. Nationwide, 739,714 homes received at least one foreclosure-related notice during the quarter, or one in every 171 U.S. households, according to Irvine, Calif.-based RealtyTrac Inc.

Wall Street took a positive view of the housing data, however, rising in early trading a day after equity markets tumbled on worries about the economy and the real estate market. In midmorning trading, the Dow Jones industrial average rose 27.84, or 0.25 percent, to 11,377.13. The Dow, which fluctuated in early trading, fell more than 280 points Thursday.

The National Association of Realtors reported Thursday that sales of existing homes — which make up the bulk of the home sales market — dropped by 2.6 percent in June to a seasonally adjusted annual rate of 4.86 million units, the slowest pace in a decade.

The report on new home sales showed that the median price of a new home sold in June fell by 2 percent compared to a year ago.

Sales were down the most in the South, a drop of 2 percent, with sales falling 0.9 percent in the West. These declines were offset somewhat by sales increases of 5.3 percent in the Northeast and 2.5 percent in the Midwest.

The Commerce Department also reported Friday that orders to factories for big-ticket manufactured goods such as cars, appliances and machinery increased by 0.8 percent in June, the strongest gain in four months and much better than had been expected. But excluding demand for defense equipment, total orders would have been up a much more modest 0.1 percent.

Analysts said that the June performance for durable goods was being propped up by sizable military spending for equipment, reflecting the ongoing wars in Iraq and Afghanistan, and this was offsetting widespread weakness in the rest of the economy. Orders for defense capital goods shot up 15.8 percent in June following a sizable 14.1 percent increase in May.

“With orders excluding defense falling at a 4 percent annualized rate in the second quarter, it is pretty clear manufacturing is hardly thriving,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

Private economists believe that sales of both new and existing homes will remain depressed for much of the rest of the year with prices continuing to fall into the spring of next year. The problem is that soaring mortgage defaults are dumping more homes on an already glutted market. That’s causing banks to tighten up on lending standards, making it difficult for potential buyers to qualify for homes.

The House on Wednesday passed a sweeping rescue package designed to halt the slide in home prices by helping more homeowners avoid mortgage defaults. It also provides a new tax break for first-time homebuyers and throws a lifeline to mortgage giants Fannie Mae and Freddie Mac.

The report on factory orders showed that orders for motor vehicles and parts had a slight rebound in June, rising by 1.8 percent, the best showing in nearly a year. But the increase was only a fraction of the big declines in previous months and was not seen as signaling any kind of sustained rebound from U.S. automakers. Ford, General Motors and Chrysler are being battered by soaring energy prices that have caused buyers to turn away from formerly hot sellers such as trucks and sport utility vehicles.

Overall, demand for transportation goods fell by 2.6 percent as the slight increase in auto demand was offset by a big 25.1 percent plunge in orders for commercial aircraft. Demand for military aircraft was also down, falling by 8.6 percent.

Excluding the volatile transportation sector, orders for durable goods — items expected to last at least three years — shot up by 2 percent, the best showing since last December and much better than the 0.2 percent decline that had been expected.

The manufacturing sector has been hurt by the overall slowdown in the economy with industries related to housing and autos particularly hard hit. This has been offset to some extent by continued strong demand for U.S. exports, which have been helped this year by a falling U.S. dollar against many major currencies. A weaker dollar makes U.S. products cheaper on overseas markets.

 Real Estate News From The We Buy Houses Team

A federal grand jury is investigating mortgage lenders Countrywide Financial Corp., New Century Financial Corp. and IndyMac Bancorp Inc., a person familiar with the situation told The Associated Press on Thursday.

Subpoenas seeking documents have been issued to all three companies, according to the person, who was not authorized to speak publicly about the case and requested anonymity.

The subpoenas are seeking e-mails, phone bills, financial records and other information, according to the Los Angeles Times, which cited unnamed people with direct knowledge of the subpoenas in first reporting the investigation was under way.

The grand jury investigation is the clearest sign yet that prosecutors are investigating whether fraud and other crimes might have contributed to the mortgage crisis that led to the demise of all three California-based lenders.

The Times also said investigators also have begun looking at whether Countrywide and its former chairman, Angelo Mozilo, gave mortgage breaks to influential friends, including members of Congress.

Laura Eimiller, the FBI’s spokeswoman in Los Angeles, said she could neither confirm nor deny an investigation.

Countrywide had been the nation’s largest originator and servicer of home loans. Its business included subprime loans, many of which went to people with poor credit histories.

California, Illinois and the city of San Diego are suing the company over its lending practices.

Bank of America Corp. bought Countrywide in a deal approved by the lender’s shareholders late last month. Scott Silvestri, a spokesman for Bank of America, did not immediately return a call from the AP seeking comment.

New Century had been the second-largest originator of subprime loans in the country before seeking Chapter 11 bankruptcy protection in April 2007.

Federal regulators seized IndyMac’s assets on July 11. The bank is the largest regulated thrift in the nation to fail, regulators said.

The FBI told The Associated Press last week that it is investigating IndyMac