BOA Florida plan draws 678 short sales
Bank of America's (BOA) payoff to Florida homeowners who do a
short sale instead of dragging out a foreclosure has averaged
$12,000 per deal and helped close 678 contracts statewide since
it debuted in October. The Florida-only plan originally targeted
20,000 homeowners with incentives of between $5,000 and $20,000
to forgo the more than two-year foreclosure process and leave
their home in "broom swept" condition for a new owner. Bank of
America spokesman Rick Simon said the Charlotte, N.C.-based
company remains "enthused" about the pilot program, which
generated 3,900 purchase offers and 11,000 verbal agreements from
customers who said they were interested in participating. "We've
quietly done a little experimentation with a similar plan in one
of the non-judicial states, but we are not to the point of
announcing a major expansion," said Simon, adding that monthly
short sale volume has more than doubled this year. "Of
particular note is the response from 'hand-raisers' who heard
about the program and asked to be included without us reaching
out to them."
To participate, purchase offers had to be submitted by
mid-December. Sales must close by Aug. 31. Attorney Adam
Seligman said his North Palm Beach firm of Cohen, Norris, Wolmer,
Ray, Telepman and Cohen has closed about a dozen Bank of America
short sales in which owners received a cash incentive. "It's
just difficult dealing with them because they can't seem to put
into writing who qualifies," Seligman said about Bank of America.
"They have general guidelines, but nothing specific." Florida
was a testing ground for Bank of America because of the state's
high foreclosure rates. Wells Fargo and JPMorgan Chase have
similar plans. In March, Florida ranked fourth nationally in
foreclosure activity, with one in every 336 homes receiving some
type of foreclosure notice, according to a RealtyTrac report that
was released Thursday. The same report said it takes an average
of 861 days to foreclose on a home in Florida. Short sale
incentive money is meant to dissuade struggling borrowers from
going through a prolonged foreclosure, which can cost the bank
more in the end then a cash payout up front. Typically, the bank
also is willing to waive a deficiency judgment, which is the
remaining balance on the home seller's mortgage after the short
sale is completed.
Retail up
Total retail sales increased 0.8%, the Commerce Department said
on Monday, after rising 1% in February. Last month's gains,
which surpassed economists' expectations for only a 0.3% rise,
could prompt analysts to raise their first-quarter growth
forecasts from an annual pace of around 2.5% currently. The
economy grew at a 3% rate in the fourth quarter. The rise in
sales last month was broad-based, even though Americans paid 27
cents more per gallon of gasoline than they did the prior month.
Motor vehicle sales rose 0.9% after increasing 1.3% in February.
Auto sales have accelerated in recent months, boosted by pent-up
demand by households. Excluding autos, retail sales climbed 0.8%
last month after advancing 0.9% in February.
Elsewhere, gasoline sales receipts increased 1.1% after rising
3.6% in February. Excluding autos and gasoline, sales advanced
0.7% in March, adding to the prior month's 0.5% gain. Details of
the report showed some strength, suggesting consumer spending
will continue to support growth. Last month, clothing store
receipts rose 0.9%, while sales at building materials and garden
equipment suppliers jumped 3.0% — the largest gain since
December. So-called core retail sales, which exclude autos,
gasoline and building materials, rose 0.5% after increasing by
the same margin in February. Core sales correspond most closely
with the consumer spending component of the government's gross
domestic product report. Sales at restaurants and bars edged up
0.3%, while receipts at sporting goods, hobby, book and music
stores rose 0.5%. Sales of electronics and appliances increased
1.0%, the largest gain since October, while receipts at furniture
stores climbed 1.1%.
Spring recovery?
Five years after the US housing bust sent sales and prices
plunging, the spring home-buying season is pointing to a
long-awaited recovery. Reduced prices, record-low mortgage
rates, higher rents and an improving job market appear to be
emboldening many would-be buyers. Open houses are drawing
crowds. A wave of foreclosures is leading investors to grab
bargain-priced homes. And many people seem to have concluded
that prices won't drop much further. In some areas, prices have
begun to tick up. Interviews with more than two dozen potential
buyers, sellers, brokers, Realtors and economists suggest that
confidence is up and that sales will move slowly but steadily
higher. The spring buying season got an early lift-off from an
uncommonly warm January and February — a winter that was the
best for sales of previously occupied homes in five years.
Permits to build houses and apartments rose in February to their
highest level since 2008.
Some analysts detected a slight uptick in prices for February and
March. CoreLogic, a real estate data firm, says prices for homes
not at risk of foreclosure — about two thirds of the market —
rose 0.7% in February. It was the first increase in four years.
Price gains occurred both in some hard-hit areas, such as
Phoenix, and some still-thriving areas like New York and
Washington. In Miami, the average sales price has surged 14% in
the past year, according to Trulia, a real estate data firm. In
Phoenix, the average is up 13%, in Pittsburgh 9%. Earnings
reports Friday from two big banks suggested that more people are
taking out mortgages. JPMorgan Chase issued 6% more mortgages
from January through March than it did a year ago and got 33%
more applications. Wells Fargo issued 54% more mortgages and
received 84% more applications. Still, few think the housing
industry is nearing a return to full health. For that to happen,
a robust job market would be needed. More hiring would give more
people the money and job security to buy. That would help boost
sales and prices. Such areas as Atlanta, suburban Las Vegas and
central California show few signs of recovery. And in some others
— from Seattle to Cleveland — home prices have continued to
slip. The average has dropped 9% in Seattle over the past 12
months and 7% in Cleveland.
US can handle higher gas prices and 30% taxes
Cheer up, Treasury Secretary Timothy Geithner says not to worry!
According to him, the US economy is in a better position to deal
with high gasoline prices and taxes. He added that unseasonably
warm winter had lowered overall energy costs for consumers. "The
economy is in a much better position to deal with those pressures
... because natural gas prices are down, the overall cost of
energy for consumers is down," Geithner said on ABC's "This Week"
program. A spike in gasoline prices caused economic growth to
brake sharply in the first half of last year. Gasoline prices
have risen 64 cents since the start of this year, leaving many
Americans with a sense of deja vu, which was further reinforced
by a slowdown in the pace of job creation last month. However,
Geithner said it was too early to tell whether the economy, which
he described as getting stronger, would go through a repeat of
last year. "We can't tell yet. Obviously, we've got a lot of
challenges ahead and some risks and uncertainty ahead. And some
of those risks are, of course, Europe is still going through a
difficult crisis," he said. He also dismissed suggestions that
the country's huge budget deficit put it at risk of being the
next Greece, adding that the challenge was to bring the deficit
down without compromising economic growth. In a separate
interview, Geithner said a proposal to impose at least 30% income
tax on Americans making more than a million dollars a year will
not hurt the economy by stifling investment and growth.
NAHB - builder confidence down
Builder confidence in the market for newly built, single-family
homes declined for the first time in seven months this April,
sliding three notches to 25 on the National Association of Home
Builders (NAHB)/Wells Fargo Housing Market Index, released today.
The decline brings the index back to where it was in January,
which was the highest level since 2007. “Although builders in
many markets are noting increased interest among potential
buyers, consumers are still very hesitant to go forward with a
purchase, and our members are realigning their expectations
somewhat until they see more actual signed sales contracts,”
noted Barry Rutenberg, chairman of the National Association of
Home Builders (NAHB) and a home builder from Gainesville, Fla.
“What we’re seeing is essentially a pause in what had been a
fairly rapid build-up in builder confidence that started last
September,” said NAHB Chief Economist David Crowe. “This is
partly because interest expressed by buyers in the past few
months has yet to translate into expected sales activity, but is
also reflective of the ongoing challenges that are slowing the
housing recovery – particularly tight credit conditions for
builders and buyers, competition from foreclosures and problems
with obtaining accurate appraisals.”
Derived from a monthly survey that NAHB has been conducting for
25 years, the NAHB/Wells Fargo Housing Market Index gauges
builder perceptions of current single-family home sales and sales
expectations for the next six months as “good,” “fair” or
“poor.” The survey also asks builders to rate traffic of
prospective buyers as “high to very high,” “average” or
“low to very low.” Scores from each component are then used
to calculate a seasonally adjusted index where any number over 50
indicates that more builders view conditions as good than poor.
Each of the index’s components registered declines in April.
The component gauging current sales conditions and the component
gauging sales expectations in the next six months each fell three
points, to 26 and 32, respectively, while the component gauging
traffic of prospective buyers fell four points to 18. (Note, the
overall index and each of its components are seasonally
adjusted.) Regionally, the HMI results were somewhat mixed in
April, with the Northeast posting a four-point gain to 29 (its
highest level since May of 2010), the West posting no change at
32, the South posting a three-point decline to 24 and the Midwest
posting an eight-point decline to 23.
Fitch - builder confidence should be up
Fitch Ratings believes single-family housing starts will increase
10% in 2012, while new home sales will rise 8%, according to the
firm's latest US homebuilding update. Still, the ratings giant
sees an erratic homebuilding market after witnessing
disappointing results for 2011. "Single-family housing finished
well below expectations at the beginning of the year," Fitch said
in its update. "Single-family starts fell 8.5%, while new home
sales declined 5.9%. Existing home sales, meanwhile, improved
1.7%." Despite challenges in the housing market and the
expectation that home prices will remain soft, Fitch expects
builders to fare better in 2012 with the market peppered with
less competitive rent options and new home inventories at
historic lows. Fitch's outlook for homebuilders runs from stable
to negative, with most builders rated as stable. The sector
continues to face headwinds from a an anemic job market and what
Fitch calls "negative buying psychology," where people are afraid
to buy a home, fearing home prices are still vulnerable to
decline. Going forward, Fitch believes public homebuilding firms
will add selectively to their developed lot holdings while
committing resources to partially or undeveloped land. "The
still irregular flow of appropriately priced land from banks and
other sources tends to support this strategy," Fitch said.
"However, if the operating environment becomes more challenged.
Fitch expects builders will be more cautious as to land purchase
and will preserve cash."
Bank of America's (BOA) payoff to Florida homeowners who do a
short sale instead of dragging out a foreclosure has averaged
$12,000 per deal and helped close 678 contracts statewide since
it debuted in October. The Florida-only plan originally targeted
20,000 homeowners with incentives of between $5,000 and $20,000
to forgo the more than two-year foreclosure process and leave
their home in "broom swept" condition for a new owner. Bank of
America spokesman Rick Simon said the Charlotte, N.C.-based
company remains "enthused" about the pilot program, which
generated 3,900 purchase offers and 11,000 verbal agreements from
customers who said they were interested in participating. "We've
quietly done a little experimentation with a similar plan in one
of the non-judicial states, but we are not to the point of
announcing a major expansion," said Simon, adding that monthly
short sale volume has more than doubled this year. "Of
particular note is the response from 'hand-raisers' who heard
about the program and asked to be included without us reaching
out to them."
To participate, purchase offers had to be submitted by
mid-December. Sales must close by Aug. 31. Attorney Adam
Seligman said his North Palm Beach firm of Cohen, Norris, Wolmer,
Ray, Telepman and Cohen has closed about a dozen Bank of America
short sales in which owners received a cash incentive. "It's
just difficult dealing with them because they can't seem to put
into writing who qualifies," Seligman said about Bank of America.
"They have general guidelines, but nothing specific." Florida
was a testing ground for Bank of America because of the state's
high foreclosure rates. Wells Fargo and JPMorgan Chase have
similar plans. In March, Florida ranked fourth nationally in
foreclosure activity, with one in every 336 homes receiving some
type of foreclosure notice, according to a RealtyTrac report that
was released Thursday. The same report said it takes an average
of 861 days to foreclose on a home in Florida. Short sale
incentive money is meant to dissuade struggling borrowers from
going through a prolonged foreclosure, which can cost the bank
more in the end then a cash payout up front. Typically, the bank
also is willing to waive a deficiency judgment, which is the
remaining balance on the home seller's mortgage after the short
sale is completed.
Retail up
Total retail sales increased 0.8%, the Commerce Department said
on Monday, after rising 1% in February. Last month's gains,
which surpassed economists' expectations for only a 0.3% rise,
could prompt analysts to raise their first-quarter growth
forecasts from an annual pace of around 2.5% currently. The
economy grew at a 3% rate in the fourth quarter. The rise in
sales last month was broad-based, even though Americans paid 27
cents more per gallon of gasoline than they did the prior month.
Motor vehicle sales rose 0.9% after increasing 1.3% in February.
Auto sales have accelerated in recent months, boosted by pent-up
demand by households. Excluding autos, retail sales climbed 0.8%
last month after advancing 0.9% in February.
Elsewhere, gasoline sales receipts increased 1.1% after rising
3.6% in February. Excluding autos and gasoline, sales advanced
0.7% in March, adding to the prior month's 0.5% gain. Details of
the report showed some strength, suggesting consumer spending
will continue to support growth. Last month, clothing store
receipts rose 0.9%, while sales at building materials and garden
equipment suppliers jumped 3.0% — the largest gain since
December. So-called core retail sales, which exclude autos,
gasoline and building materials, rose 0.5% after increasing by
the same margin in February. Core sales correspond most closely
with the consumer spending component of the government's gross
domestic product report. Sales at restaurants and bars edged up
0.3%, while receipts at sporting goods, hobby, book and music
stores rose 0.5%. Sales of electronics and appliances increased
1.0%, the largest gain since October, while receipts at furniture
stores climbed 1.1%.
Spring recovery?
Five years after the US housing bust sent sales and prices
plunging, the spring home-buying season is pointing to a
long-awaited recovery. Reduced prices, record-low mortgage
rates, higher rents and an improving job market appear to be
emboldening many would-be buyers. Open houses are drawing
crowds. A wave of foreclosures is leading investors to grab
bargain-priced homes. And many people seem to have concluded
that prices won't drop much further. In some areas, prices have
begun to tick up. Interviews with more than two dozen potential
buyers, sellers, brokers, Realtors and economists suggest that
confidence is up and that sales will move slowly but steadily
higher. The spring buying season got an early lift-off from an
uncommonly warm January and February — a winter that was the
best for sales of previously occupied homes in five years.
Permits to build houses and apartments rose in February to their
highest level since 2008.
Some analysts detected a slight uptick in prices for February and
March. CoreLogic, a real estate data firm, says prices for homes
not at risk of foreclosure — about two thirds of the market —
rose 0.7% in February. It was the first increase in four years.
Price gains occurred both in some hard-hit areas, such as
Phoenix, and some still-thriving areas like New York and
Washington. In Miami, the average sales price has surged 14% in
the past year, according to Trulia, a real estate data firm. In
Phoenix, the average is up 13%, in Pittsburgh 9%. Earnings
reports Friday from two big banks suggested that more people are
taking out mortgages. JPMorgan Chase issued 6% more mortgages
from January through March than it did a year ago and got 33%
more applications. Wells Fargo issued 54% more mortgages and
received 84% more applications. Still, few think the housing
industry is nearing a return to full health. For that to happen,
a robust job market would be needed. More hiring would give more
people the money and job security to buy. That would help boost
sales and prices. Such areas as Atlanta, suburban Las Vegas and
central California show few signs of recovery. And in some others
— from Seattle to Cleveland — home prices have continued to
slip. The average has dropped 9% in Seattle over the past 12
months and 7% in Cleveland.
US can handle higher gas prices and 30% taxes
Cheer up, Treasury Secretary Timothy Geithner says not to worry!
According to him, the US economy is in a better position to deal
with high gasoline prices and taxes. He added that unseasonably
warm winter had lowered overall energy costs for consumers. "The
economy is in a much better position to deal with those pressures
... because natural gas prices are down, the overall cost of
energy for consumers is down," Geithner said on ABC's "This Week"
program. A spike in gasoline prices caused economic growth to
brake sharply in the first half of last year. Gasoline prices
have risen 64 cents since the start of this year, leaving many
Americans with a sense of deja vu, which was further reinforced
by a slowdown in the pace of job creation last month. However,
Geithner said it was too early to tell whether the economy, which
he described as getting stronger, would go through a repeat of
last year. "We can't tell yet. Obviously, we've got a lot of
challenges ahead and some risks and uncertainty ahead. And some
of those risks are, of course, Europe is still going through a
difficult crisis," he said. He also dismissed suggestions that
the country's huge budget deficit put it at risk of being the
next Greece, adding that the challenge was to bring the deficit
down without compromising economic growth. In a separate
interview, Geithner said a proposal to impose at least 30% income
tax on Americans making more than a million dollars a year will
not hurt the economy by stifling investment and growth.
NAHB - builder confidence down
Builder confidence in the market for newly built, single-family
homes declined for the first time in seven months this April,
sliding three notches to 25 on the National Association of Home
Builders (NAHB)/Wells Fargo Housing Market Index, released today.
The decline brings the index back to where it was in January,
which was the highest level since 2007. “Although builders in
many markets are noting increased interest among potential
buyers, consumers are still very hesitant to go forward with a
purchase, and our members are realigning their expectations
somewhat until they see more actual signed sales contracts,”
noted Barry Rutenberg, chairman of the National Association of
Home Builders (NAHB) and a home builder from Gainesville, Fla.
“What we’re seeing is essentially a pause in what had been a
fairly rapid build-up in builder confidence that started last
September,” said NAHB Chief Economist David Crowe. “This is
partly because interest expressed by buyers in the past few
months has yet to translate into expected sales activity, but is
also reflective of the ongoing challenges that are slowing the
housing recovery – particularly tight credit conditions for
builders and buyers, competition from foreclosures and problems
with obtaining accurate appraisals.”
Derived from a monthly survey that NAHB has been conducting for
25 years, the NAHB/Wells Fargo Housing Market Index gauges
builder perceptions of current single-family home sales and sales
expectations for the next six months as “good,” “fair” or
“poor.” The survey also asks builders to rate traffic of
prospective buyers as “high to very high,” “average” or
“low to very low.” Scores from each component are then used
to calculate a seasonally adjusted index where any number over 50
indicates that more builders view conditions as good than poor.
Each of the index’s components registered declines in April.
The component gauging current sales conditions and the component
gauging sales expectations in the next six months each fell three
points, to 26 and 32, respectively, while the component gauging
traffic of prospective buyers fell four points to 18. (Note, the
overall index and each of its components are seasonally
adjusted.) Regionally, the HMI results were somewhat mixed in
April, with the Northeast posting a four-point gain to 29 (its
highest level since May of 2010), the West posting no change at
32, the South posting a three-point decline to 24 and the Midwest
posting an eight-point decline to 23.
Fitch - builder confidence should be up
Fitch Ratings believes single-family housing starts will increase
10% in 2012, while new home sales will rise 8%, according to the
firm's latest US homebuilding update. Still, the ratings giant
sees an erratic homebuilding market after witnessing
disappointing results for 2011. "Single-family housing finished
well below expectations at the beginning of the year," Fitch said
in its update. "Single-family starts fell 8.5%, while new home
sales declined 5.9%. Existing home sales, meanwhile, improved
1.7%." Despite challenges in the housing market and the
expectation that home prices will remain soft, Fitch expects
builders to fare better in 2012 with the market peppered with
less competitive rent options and new home inventories at
historic lows. Fitch's outlook for homebuilders runs from stable
to negative, with most builders rated as stable. The sector
continues to face headwinds from a an anemic job market and what
Fitch calls "negative buying psychology," where people are afraid
to buy a home, fearing home prices are still vulnerable to
decline. Going forward, Fitch believes public homebuilding firms
will add selectively to their developed lot holdings while
committing resources to partially or undeveloped land. "The
still irregular flow of appropriately priced land from banks and
other sources tends to support this strategy," Fitch said.
"However, if the operating environment becomes more challenged.
Fitch expects builders will be more cautious as to land purchase
and will preserve cash."
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