Success at right value

Although Melbourne's auction clearance rate is almost 20 per cent higher than it was last year, and the housing market appears to be improving on a weekly basis, a lot of buyers continue to be prudent.

The reason? They are more knowledgeable about real estate values. And their experience of the 2007-09 global financial crisis gave rise to a strong savings ethos and an awareness that house prices can fall as well as go up.

Tighter lending criteria by banks and others mortgage finance providers is also keeping buyer exuberance in check.

AMP Capital chief economist Shane Oliver said the Reserve Bank had been easing, or reducing, interest rates for 22 months. ''On average, by this stage in an easing cycle you would be seeing much stronger house price growth and higher levels of credit growth,'' he said.

Lending criteria had tightened considerably. ''The banks became a lot more cautious after seeing the damage the GFC caused in other countries, and the regulators have become tougher as well. The banks have the regulators looking over their shoulder,'' he said.

Estate agents continue to see the market as property-specific.

''Buyers are certainly more educated and have a lot more resources at their fingertips these days,'' said Leo Dardha, of Hocking Stuart Yarraville. ''But on the beat - at the auctions and at open for inspections - there seems to have been a kick since the federal election.''

On Saturday, Hocking Stuart sold a three-bedroom 1970s brick-veneer house in Seddon for $767,000, which was $127,000 above its reserve price. ''That's a huge amount,'' Mr Dardha said.

Saturday's auction clearance rate was 80 per cent for the 553 preliminary results reported to the Fairfax-owned Australian Property Monitors. The Real Estate Institute of Victoria reported an interim clearance rate of 78 per cent from 715 results.

Some property types are in heavy demand. Fletchers sold a three-bedroom townhouse in Kew on Saturday for $1.3 million, against a $900,000 reserve. ''It shows how desperately short we are of good-quality apartments for people who want to scale down their accommodation,'' said executive chairman Tim Fletcher.

There are signs that property listings are on the rise but overall supply is well down on previous years. Jellis Craig director Andrew McCann said the lack of supply, coupled with stronger buying by investors, downsizers and young couples, had contributed to multiple bidding at auctions.

Only 4 per cent of properties sold in Australia sell for more than $2 million, but Melbourne snares a disproportionate share of these high-priced sales. Mr McCann said the $2 million-plus market had strengthened - a view shared by Jonathan Dixon, of bayside specialist JP Dixon. Six months ago, the bayside suburbs were market underperformers, but Mr Dixon said demand had now ''gone up a notch''.

REIV chief executive Enzo Raimondo said Saturday's results were further evidence of a strengthening market: ''With the clearance rate improving and property prices going upward as well, we're set for a fairly strong final selling season for the year,'' he said.

APM senior economist Andrew Wilson said Melbourne was on track to achieve house price growth of 7 per cent in 2013.

There will be only about 60 auctions on grand final day next Saturday.

source: bigpondnews.com

Wells Fargo not modifying mortgages as required, lawsuit says

Accusing Wells Fargo & Co. of reneging on a sweeping mortgage-modification deal, a lawyer for troubled homeowners is trying to reopen a case involving risky "pick-a-pay" loans written during the housing bubble.

Legal filings last week claimed Wells Fargo failed to provide wide-ranging reductions of loan balances to delinquent borrowers as it had promised two years ago when it settled a combined national class-action suit. A bank spokeswoman strongly disputed the claim, saying it was riddled with errors.

The litigation illustrates how lawsuits continue to dog major home lenders more than five years after the mortgage industry imploded, including recent challenges to certain cases the banks thought had been put to rest.

The original lawsuits over pick-a-pay, or pay-option, mortgages contended that the loans were issued with inadequate notice to borrowers that the amount owed would rise if they chose the lowest payment among four options. The loans were made by banks later acquired by Wells Fargo.

"Hundreds of thousands of homeowners were suffering the effects of undisclosed negative amortization for their Pick-a-Payment loans, while the declining U.S. housing market was sucking the remaining equity out of their homes," plaintiffs attorney Jeffrey K. Berns said in a filing Friday.

The settlement was reached in December 2010 before U.S. District Judge Jeremy Fogel in San Jose. At the time, the San Francisco-based bank said it would provide at least $50 million and as much as $600 million in modification benefits to troubled borrowers with the pay-option loans, the Reuters news service reported.

Berns, of Woodland Hills, had calculated the number might reach $2 billion.

Of the 66,000 requests for loan modifications made in the 18 months ending Sept. 30, Wells Fargo granted 1,746, or 2.6%, Berns alleged.

"Thousands of people have been denied loan modifications -- people who, in our opinion, should not have been denied," Berns said in an interview Monday.

His filings included a new lawsuit accusing Wells Fargo of breaching the settlement, acting in bad faith and violating a state unfair competition law. In a separate filing, Berns asked the court to order the bank to stop all foreclosures on the loans to allow him to investigate the situation.

The pay-option loans were made by a large Oakland savings and loan, World Savings, which was acquired in 2006 by Wachovia Corp. of Charlotte, N.C. Wachovia continued to make the mortgages and was near collapse in 2008 when it was acquired by Wells Fargo.

In a statement, Wells Fargo said it would "immediately and forcefully" defend the new lawsuit, which it said "maligns a very effective consumer loan settlement program."

Wells Fargo didn't break out how many borrowers covered by the settlement had received reductions in the principal on their loans.

But it said its overall efforts on behalf of people with the tricky loans had been extensive, including many loan modifications that included principal reduction in the two years leading up to the settlement.

"We have provided modifications for nearly 110,000 borrowers with Pick-a-Pay loans and principal reductions of more than $5 billion for those borrowers," Wells said. "That means that more than a third of all Pick-a-Pay loans --  including those covered by the settlement and those not included -- have been modified since the beginning of 2009."

source: latimes.com

Foreclosure cases moving like mud

Florida’s foreclosure courts have made almost no progress in clearing an overwhelming backlog of cases from their dockets despite a $4 million stipend awarded by lawmakers this year.

As of Oct. 31, there were 377,272 pending foreclosures in Florida’s 20 circuit courts, a net reduction of just 435 cases since the money became available in July, according to the state courts administrator.

Judges say new foreclosure filings have nearly outpaced the number of cases they’ve been able to close as banks work on clearing defaulted loans on hold since the robo-signing freezes and pending the National Mortgage settlement, which was finalized in March.

While the $4 million has helped courts statewide close 69,513 cases in four months, 69,078 new cases were added during the same time period.

“Obviously, we hoped to make a bigger dent, but it seems like we’re just treading water at this point,” said Palm Beach County Chief Judge Peter Blanc, who has 32,434 pending foreclosure cases in the 15th Circuit. “I’m disappointed in the numbers, but the reason for them is pretty clear.”

Economists generally agree that resolving foreclosures is an important factor in stabilizing Florida’s economy. Cleaning up vacant and abandoned homes can increase property values, while new home construction — a critical element for Florida’s workforce — won’t fully recover until the foreclosure backlog is reduced, said state economist Amy Baker.

The stubborn logjam of cases has pushed some Florida courts to consider, or already launch, new strategies to move cases more swiftly. Miami-Dade County judges are setting cases for trial on their own, forcing both sides to the table and leading defense attorneys to label the practice Florida’s new “rocket-docket.”

Palm Beach County is considering an electronic system that will identify aging cases and automatically set them for a status hearing or send out an order of dismissal.

But a speedy judiciary can be a clumsy one, foreclosure defense attorneys argue.

“I’ve sat through what they call trials and they are embarrassing because it’s obvious they just want to get rid of cases,” said Boca Raton defense attorney Margery Golant. “Many of these cases are real and don’t deserve to be treated in a summary fashion.”

It’s not just robo-signing and lost notes delaying the process. Banks and homeowners ask for delays for myriad reasons — they’re working on a loan modification, a short sale is being negotiated, or the case has been shuffled among bank attorneys so many times the newest firm isn’t up to speed.

Palm Beach County Circuit Court Senior Judge Howard Harrison routinely hears cases that are lingering from the early days of the real estate bust.

Last week, suburban West Palm Beach homeowner Allan Salman was in Harrison’s courtroom asking him to cancel a foreclosure auction on Salman’s home. The sale was scheduled for the next day.

“This is a 2007 case,” Harrison said, looking up from the dais with a head shake.

Salman, who has wrangled over loan mods and short sales with his bank since it filed for foreclosure five years ago, said he was close to finalizing a deed-in-lieu of foreclosure with his bank, but needed more time.

“I’m sorry, sir, motion denied,” Harrison ordered.

“The judge in good conscience could not give me an extension, and I understand that,” Salman said after the ruling.

But he had a plan B. Salman filed for bankruptcy the same day, a maneuver confirmed by bankruptcy court records and one that puts a temporary freeze on the foreclosure.

“If one court doesn’t work, go to the next,” Salman said.

In Miami-Dade County, where about 50,100 foreclosure cases are pending, judges have made the unpopular decision to set trials as a way to hasten the process.

Setting a trial forces both sides to present their case to the judge, who can then make a ruling.

Miami-Dade Circuit Court Judge Jennifer Bailey, who served as chairwoman of Florida’s Task Force on Residential Mortgage Foreclosure Cases, said she knows attorneys are griping about the new tactic. But previous methods, such as setting management hearings to learn the status of a case, weren’t working, she said.

“Some of these cases are three to four years old and our approach is to fish or cut bait. We’re not going to drag this out anymore,” Bailey said. “But we also have to make sure our desire to move the backlog does not compromise the justice process in any way.”

Miami-Dade received $626,409 of the $4 million allocation, and has cleared the most cases, 11,913, since the money was awarded.

Royal Palm Beach-based foreclosure defense attorney Tom Ice is not impressed. He likened Miami-Dade’s trial program to a “cattle call” and said cases tried without proper trial orders are void and can be rolled back by homeowners.

“Certainly, where there are uncontested cases where the borrowers have failed to respond, those cases are appropriate for more expedient resolution,” said Mike Wasylik, a foreclosure defense attorney with Ricardo & Wasylik. “I’m concerned about fairness and adherence to law, and that takes time.”

State estimates show 220,000 new foreclosures are expected to be filed during the fiscal year that began July 1. An additional 239,000 are estimated for the 2013-2014 fiscal year, said State Courts Administrator Lisa Goodner.

She will ask for another $4 million from lawmakers this year and is hoping to get $5 million from the state’s portion of the National Mortgage Settlement.

Florida lawmakers first gave the courts $6 million in 2010 to whittle the foreclosure backlog, but no money was provided again until this year. That meant judges had to hire and train staff in July to handle the backlog, a time-consuming task that delayed processing cases. In October, 20,327 foreclosures were cleared statewide, a 35 percent increase from September that judges attribute to new employees becoming more familiar with procedures.

“We’re just trying to do what we can to keep up and will hopefully reach a tipping point soon,” Goodner said.

source: palmbeachpost.com

Fannie and Freddie Launch New Mortgage Review Program

(TheNicheReport) — One of the thorniest issues of the housing crisis and the credit crunch has been the repurchase demands made by Fannie Mae and Freddie Mac and the reluctance by major lenders to take back deficient mortgages. According to a statement recently issued by the Federal Housing Finance Agency (FHFA), the need for these buybacks could be eliminated in the near future.

A new review system for mortgages could be put into place after January 1st, 2013. The system is designed to carefully evaluate the quality of the credit being extended to borrowers by identifying likely negative outcomes that could compromise mortgages and make them end up as a buyback requests. Both Fannie and Freddie charge fees to the lenders for their services as mortgage investors and guarantors, and these fees have increased considerably in the last few years.

The Buyback Debate

The mortgage buyback demands have weighed heavily on the balance sheets of some of the country’s largest banks. Between the major national and regional financial institutions, there are nearly $5 billion in reserves to buy back mortgages that Fannie and Freddie consider to have been made with deficiencies or in haste during the hectic days of the mortgage bubble. The government-sponsored enterprises (GSEs) set the guidelines for lenders to follow during their home loan origination process, and they trust lenders to do their part when they submit mortgages to Fannie and Freddie to purchase.

The partnership between the GSEs and the major lenders turned a bit sour after the failure of mortgage-backed securities in the United States triggered major credit and financial events around the world. Fannie and Freddie were affected to the point of requiring a federal bailout and conservatorship. The U.S. housing and mortgage market may appear to be anemic, but without the mortgage GSEs to act as investors, there would be no market at all.

As Fannie and Freddie reviewed their mortgage portfolios in the days after the housing market crash, a significant pattern of origination deficiencies began to emerge and a flurry of repurchase demands ensue. Although the lenders specifically set aside reserves for this situation, some banks have questioned the buybacks in court. Fannie and Freddie argue that in their present conservatorship status, the reluctance by some banks to take back bad mortgages equates to cheating taxpayers from their own funds.

The Effect on Borrowers

The current credit and underwriting guidelines make it difficult enough for scores of applicants to take advantage of the record low mortgage interest rates. This new loan review system that is aimed to minimize losses for American taxpayers could make it even more difficult for mortgage applicants.

The current system does not leave too much margin for origination errors, and the proposed future system will not question defaulted mortgages that Fannie and Freddie guarantee as long as there are no missed or late payments within 36 months. Home loans originated by federal foreclosure prevention initiatives will not be repurchased if borrowers made timely payments for at least 12 months.

source: thenichereport.com

White House Pushes Refinancing Expansion Before Election

(Bloomberg) — The White House is urging the U.S. Senate to vote as soon as this week on an expansion of a government mortgage refinancing program, a move that could showcase President Barack Obama’s support for policies aiding homeowners before the Nov. 6 presidential election.

Democratic leaders are considering adding the measure expanding the Home Affordable Refinancing Program to their agenda for the two-week Senate session that begins today, Senate aides said.

Win or lose, a vote on the bill could help the president. If enough Republicans sign on, the vote could show momentum for his efforts to help the 11.3 million borrowers who owe more than their homes are worth. If Republicans vote against the measure, Democrats can paint them as unsympathetic to homeowners, said Jaret Seiberg, senior policy analyst at Guggenheim Securities’ Washington Research Group.

“This is an effort by the president and his administration to say we’re trying to help people refinance and blame blocking action on Republicans,” Seiberg said in an interview.

The pressure for an immediate vote is coming from the Obama administration, according to Senator Robert Corker of Tennessee, a Republican on the Banking Committee. The White House press office did not respond to e-mails requesting comment.

“My guess is they may get the votes. If they get the votes, they want to do it in a way that tries to show a divide,” Corker said.

The Senate session may last as few as six days. Even if senators manage to pass it in that time frame, the bill has little chance of becoming law since Republicans who control the House have no plans for a companion measure.

Read more from Bloomberg

source: thenichereport.com

Century Properties posts 91% growth in 1H profit

MANILA, Philippines - Century Properties Group announced on Wednesday that its net income for the first six months of 2012 grew 91 percent to P944 million from P496 million a year ago on the back of "strong" sales from its property developments.

In a statement, the developer of Trump Tower said total revenues during the period surged 133 percent to P4.9 billion from P2.1 billion last year.

In the second quarter alone, revenues and income rose by 146 percent to P2.5 billion and 28 percent to P491 million, respectively.

From April to June, the company generated P5.4 billion in pre-sales, 19 percent of which came from the luxury segment, 40 percent from the middle income, and 41 percent from the affordable markets.

For the first semester, Century's pre-sales grew 18 percent to P10.7 billion from last year and already 54 percent of the P20-billion pre-sales target for 2012. About 66 percent or P7.1 billion of this semester's pre-sales came from offshore buyers.

At end-June, Century Properties' debt stood at P1.4 billion, representing a total debt to equity of 19 percent while it had a net debt to equity ratio of 10 percent.

"All of the debt on its balance sheet is for projects that are significantly pre-sold, thus ensuring Century is on solid financial footing," the company said.

During the briefing on Wednesday, Marco Antonio, Century co-chief operating officer, said the recession in the euro zone and the weakness of the US economy may not hit the company significantly since they learned from their experience during the 2008 subprime recession.

"When the subprime crisis from the US spread to other parts like Europe, what we did was we diversified geographically where we source our international sales. We've been actually successful and we've diversified into 50 countries and two-thirds of our sales come from these countries," Antonio said.

"So the temporary vacuum that we felt in America was more than aptly covered by various markets such as the Middle East, Canada, the rest of Asia, as well as Europe," he added.

This time, Century's sales in Europe did not slow down and instead increased since its market is not that affected by the European recession. Some of these buyers are nurses, IT workers, and accounting professionals, who are still employed.

"Yes, this may be a temporary hiccup in terms of their purchasing power but we're quite conscious to match the product with the market. Will Trump [Tower] sell in Italy? Probably not. But will our residences in Commonwealth sell to Filipinos in the Italy market? The answer is a resounding yes," Antonio said.

In the long-term, the Century executive said their diversified push in their international sales will insulate the company from the slowdowns in some parts of the world.

The real estate firm said about 30 percent of its sales come from Asia, 35 percent from US, while UK, EU and the Middle East make up 12 percent to 16 percent each of their total sales.

source: interaksyon.com

Amy Winehouse's Family Puts Late Singer's Home On The Market

Amy Winehouse's family is continuing to move on from the tragic passing of the talented British soul singer by putting her north London home up for sale.

“The Winehouses have decided to put the house on the market, with great regret,” a spokesman for the family told Reuters via email.

The Winehouses note that it simply didn't feel right for any of them to reside there. “Amy loved that house but none of the family felt it appropriate that they should live in it and it was not practical to keep it empty while paying the costs of its upkeep,” they explained.

Fans of Winehouse have ventured to the Camden property to show their respects for the late, great singer. They even transformed a nearby square into a shrine in the days following her untimely death.

Various newspaper reports suggest that the three-bedroom home is currently on the market for £2.7 million (or $4.2 mill for we Americans).

Winehouse’s final album Lioness: Hidden Treasures was released posthumously last December and contains a collection of unheard tracks that feature the likes of Nas and Tony Bennet. Winehouse seemed to have had a profound impact on Nas.

“It’s a bittersweet feeling to do something with her now that she’s not here. I’m happy… the sweet part is that we have the music, fans have new music from her,” he explained. “It’s new because they’ve never heard it. The bitter part is that she’s no longer here to really give it to us and to really live her music and for us to see her smile and hear her voice."

The rapper also recalls his fond memories of hanging with the songstress in the studio, saying, “She was hilarious, man. She would make you laugh. To her, music came so easy.”

source: mtv.com