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Foreclosure Activity Drops to 3-Year Lows
New data released from RealtyTrac on Thursday show the foreclosure crisis is easing: Foreclosure notices filed during the first three months of 2011 dropped 27 percent compared with the first quarter of 2010. More than 681,000 homes received a foreclosure filing during the first quarter of 2011.

And while 215,046 borrowers lost their homes, that marks a 17 percent decrease year-over-year.

However, while the improvement may be encouraging, experts warn that the decrease in foreclosure activity is likely temporary.

"The nation’s housing market continued to languish in the first quarter, even as foreclosure activity fell to a three-year low," says James Saccacio, RealtyTrac’s CEO. "Weak demand, declining home prices, and the lack of credit availability are weighing heavily on the market, which is still facing the dual threat of a looming shadow inventory of distressed properties and the probability that foreclosure activity will begin to increase again as lenders and servicers gradually work their way through the backlog of thousands of foreclosures that have been delayed due to improperly processed paperwork."

Following this fall’s “robo-signing” scandal, in which banks were accused of processing foreclosures without proper reviews, banks have slowed their pace of foreclosures until they clean up their paperwork procedures, experts say. Otherwise, the number of foreclosures would be much higher for the quarter, says RealtyTrac spokesman Rick Sharga.

Meanwhile, Nevada continues to post the highest rate of foreclosure activity, followed by Arizona and California. Nevada alone had 32,000 properties, or one in every 35, receiving a foreclosure filing.

Source: “Foreclosures Off 30% This Year,” CNNMoney.com (April 14, 2011) and “Processing Delays Cut Foreclosure Activity by 27% in 1Q 2011: RealtyTrac,” HousingWire (April 14, 2011)

Avoid Sellers' Worst Mistakes
In a buyer’s market, sellers have little room for error when putting their home on the market or they risk having their property linger. Sellers should take caution to avoid the following common traps, according to a recent article at MSNBC.com.

1. Overpricing the home. Home values have dropped considerably since its peak in 2006, but sellers still are often tempted to list a home based on what they paid for it. Eventually they realize their error and have to reduce their price, sometimes several times. In the past month, 23 percent of homes listed for sale on Zillow have reduced their price.

2. Relying too much on just comps. Size up your competition currently on the market, not just the homes that have already sold. Evaluate homes with a listing price similar to yours to see how well yours stacks up against the competitions and how you can differentiate.

3. Failing to take into account the home’s web appeal. Photos are key when marketing a home online. Be sure to include lots of high-resolution photos of the interior, including of the areas in a home that buyers most care about, such as kitchen, living spaces, and bathrooms, experts say.

4. Hovering during showings. Sellers certainly shouldn’t be home for showings, but as a seller’s agent, either should you. Lurking sellers or seller agents may make buyers nervous. Other real estate agents often want privacy with their buyers so they can gather true feedback about the house.

Source: “Six Common Mistakes That Home Sellers Make,” MSNBC.com (April 11, 2011)

Survey: Americans Still Optimistic About Housing
A sluggish real estate market hasn’t shaken the confidence of the public in how it views home ownership, according to a new study by the Pew Research Center. Eight in 10 adults (or 81 percent) say owning a home is the best long-term investment a person can make, according to the Pew study of about 2,000 adults conducted in March.

“Home owners are not blind to what has happened to home prices, nor are they expecting a speedy recovery,” according to the Pew study. In fact, of the home owners surveyed, about half said their home is worth less now than before the recession, while 31 percent said their home’s value has stayed the same.

Nevertheless, 82 percent of home owners who say their home is worth less now than before the recession either strongly or somewhat agree that home ownership is the best long-term investment a person can make, according to the survey.

The value of home ownership even continues to emerge on top when home owners were surveyed and asked to rate the importance of four long-term financial goals. Home ownership and "being able to live comfortably in retirement" rated the highest--viewed as either extremely or very important by 80 percent of respondents.

Yet, their optimism about home ownership doesn’t mean they're completely happy with their current home. Nearly a quarter of all home owners surveyed said that if they had it to do all over again, they would not buy their current home. Most of the “buyer’s remorse” complaints were about the home itself or its location. Only 31 percent of those surveyed cited financial factors, such as the home losing value or their own changing financial situation.

Source: “Home Sweet Home. Still.” Pew Research Center (April 12, 2011)

4 Ways to Save on Your Cell Phone Bill
A potential $39 billion merger between two of the nation’s largest wireless carriers--AT&T and T-Mobile--could lead to higher cell phone bills, according to some experts.

Here are some cost-cutting measures to consider making now:

1. Use a family plan. You may want to find some “family” to add to your smartphone plan to start trimming your bill. AT&T, Sprint, Verizon Wireless, as well as other carriers offer family plans that aren’t just limited to those in your family. You can essentially add anyone to your “family” and still take advantage of the savings. Here’s the potential savings by bulking your plan: AT&T smartphone individual plans (which include voice, unlimited messaging and data) start at about $75 per month. A family plan that covers three users for similar features costs $145 a month--about $48 per person. A family of five? The monthly cost is $40 per person.

2. Trade in old phones. Don’t just dump your old cell phone in a drawer. Web sites such as GreenPhone.com and CellTradeUSA will let you trade your old phone for a new one. While you may have to pay a small upgrade cost, you’ll still save in having to buy new.

3. See if you qualify for a discount. Check to see if you qualify for a discounted cell phone plan if you’re a member of a national group such as AAA and AARP. Also, some wireless carriers even offer business discounts that you can apply toward your personal plan.

4. Free texting and video calls. You can curb your texting fees by using smartphone apps. For iPhone users, try Textfree With Voice; Android users might try chompSMS. (Note: These services only work with other smartphone owners who have the app.) You can also save by using video calls: iPhone users can save on calling minutes by using FaceTime video calling, and Android and iPhone users can video chat for free and also save on calling minutes by using Skype.

Source: “Here Are Smart Ways to Cut Cellphone Bill,” Orlando Sentinel (April 3, 2011)

Agent's Surprising Find in REO Leads to 5 Arrests
A real estate agent’s discovery of marijuana growing in a bank-owned home he was listing in Elk Grove, Calif., eventually led police to three other pot houses and five arrests.

Police recovered more than 1,000 marijuana plants from the homes. Also at two of the properties, the marijuana growers had run wiring around the meters to steal electricity, according to police reports.

Despite the police sting, the real estate agent was still able to get the house sold, even for above asking price, and warnings to would-be buyers that the house was a “marijuana grow farm” didn’t seem to serve as a deterrent. The agent sold the property two months following the investigation for $188,000 in just eight days for $8,000 over the asking price.

Source: “Realtor’s Pot House Discovery Leads to 5 Arrests,” News10.net (April 7, 2011)

Mortgage Rates Continue to Inch Upward
The 30-year fixed-rate mortgage continued to rise slightly for the third straight week, but still remains low by historical standards, reports Freddie Mac in its weekly mortgage market survey. The 30-year rate averaged 4.87 percent this week, but continues to be well-below its average of 5.21 percent a year ago.

The 15-year fixed-rate mortgage this week averaged 4.1 percent, up slightly from last week’s 4.09 percent.

The 5-year adjustable-rate mortgage also is inching up slightly, averaging 3.72 percent this week from 3.7 percent last week.

Overall, "mortgage rates were little changed after an encouraging employment report from the Bureau of Labor Statistics,” says Frank Nothaft, the chief economist at Freddie Mac. The improved job picture could soon provide a boost to housing. The unemployment rate fell for the fifth consecutive month in March to 8.8 percent--the lowest rate in two years, Nothaft notes.

But despite the improving job picture and low interest rates, the tightening of credit standards continue to keep some buyers out. KB Home this week reported a 32 percent drop in new home orders for the December through February quarter. Lennar Corp. said that its new homes also have fallen 12 percent in that same time period.

Source: “Mortgage Rates Change Little Amid Positive Employment Report,” Freddie Mac (April 7, 2011) and “Rate on 30-Year Mortgage Still Below 5 Percent But Housing Market Remains in Doldrums,” The Associated Press (April 7, 2011)

Gov't Shutdown Looms, More Warnings to Housing
Housing and Urban Development Secretary Shaun Donovan told Senate lawmakers that he is "very concerned" about the consequences of a government shutdown on the housing market. Donovan warned lawmakers that lenders would have to stop making loans that are backed by the Federal Housing Administration, a government agency that insures home mortgages and is a popular choice among first-time home buyers.

"This is the worst time that we could introduce that uncertainty into this fragile housing market," Donovan told a Senate subcommittee.

Congressional leaders have until Friday night to agree to a budget or face a government shutdown. The last government shutdown occurred in 1995 and lasted 21 days.

If a shutdown occurs, the FHA would be unable to insure any new loans. While banks will still be able to make FHA loans, experts say that some banks may hold onto these loans until the government re-opens. Experts say that large lenders likely can handle the added risk, but other smaller lenders may be forced to cancel pending loans.

"I am very concerned that a significant number of lenders would not choose to close on those loans," Donovan said at the hearing.

The FHA is a popular choice among first-time home buyers since its minimum down payment requirements are 3.5 percent.

Meanwhile, many loans backed by Fannie Mae and Freddie Mac would not be affected by a government shutdown.

Source: “Obama Official: ‘Very Concerned’ About Mortgage Lending in Shutdown,” Dow Jones Newswire (April 7, 2011)

Borrowers Rush to Secure Gov't-Backed Loans
Purchase applications for mortgages increased 6.7 percent last week, reaching its highest level of the year, according to the Mortgage Bankers Association.

The MBA reports that government loan applications reached their highest level since May 2010, increasing 10.3 percent last week compared to the week prior.

Michael Fratantoni, MBA vice president of research and economics, attributes the surge to borrowers who were likely motivated to apply for government loans before a scheduled increase in FHA insurance premiums, which became effective last Friday.

Despite the sharp rise, however, purchase volume in mortgage applications still remains relatively low by historical standards, at levels last seen in 1997, Fratantoni adds.

Also, while purchase applications soared last week, applications for refinancing declined 6.2 percent last week, the lowest level since February.

Source: “Apps for Government-Backed Mortgages Surge Ahead of FHA Premium Hikes,” The Real Deal Online (April 6, 2011)

Watch Your E-mail: 3 Spam Survival Tips
A massive security breach from Epsilon has potentially exposed the e-mail addresses of millions of customers at major banks, hotels, and stores to hackers. Security experts are warning the public that you may be at greater risk of getting spam in your e-mail inbox that will try to trick you into revealing your personal information.

Consumer Reports recently offered some spam survival tips in dealing with the Epsilon fallout:

1. Never click on an embedded link in an e-mail. Very targeted phishing attacks are expected from this latest security breach, experts warn. Security experts have warned that spammers have been creating official-looking e-mails from such banks as Citibank that try to direct customers to click on an e-mail link and update their online account. By doing so, you may be providing hackers with your personal account information. If a company is trying to contact you about important changes to your account, instead go directly to the company’s web site from your browser or contact the customer service phone number.

2. Protect your personal information. Remember: Legitimate companies will never ask customers for your personal data--such as Social Security numbers or credit card information--via e-mail. 


3. Update your anti-virus software. Spam also has a good chance of carrying viruses, malware, or even giving spammers the ability to capture everything you type, such as your account information. Make sure you have anti-virus software that is up to date to protect you from the latest viruses.

Source: “6 Tips for Surviving the Epsilon E-mail Fiasco,” Consumer Reports Online (April 5, 2011)

1 in 4 Mortgage Applications Rejected
The tightening of credit by lenders across the country continues to keep more buyers out of securing a mortgage. Nearly a quarter of people who apply for a mortgage are rejected, according to the latest data from the Federal Reserve.

“Good borrowers with one or two blemishes on their credit are being denied credit,“ says Lawrence Yun, the chief economist for the National Association of REALTORS®.

Lenders now are requiring higher credit scores and down payments that have kept more home buyers out, experts say. For example, the median down payment to buy a home nowadays is about 15 percent; during the housing boom, it was nearly zero.

“We feel it really reduces the demand for houses,“ says Mike D’Alonzo, president of the National Association of Mortgage Brokers. “It’s an unbelievable buyer’s market, but there hasn’t been as much activity as you would expect because not as many people qualify for loans.“

Indeed, Anthony Sanders, director of Real Estate Entrepreneurship at George Mason University, estimates that the tighter credit standards has caused as many as 30 percent of would-be buyers--or even more--to sit on the sidelines.

Source: “Nearly 25% of Mortgage Applications Rejected,” CNN (April 6, 2011)