Progress in Foreclosures

The foreclosure crisis seems to be abating. The number of homes in foreclosure shrunk by 130,000, or 8.4%, in 2011, according to a report from CoreLogic, an economic research firm. There are dual reasons for the inventory drop, according to Mark Fleming, chief economist with CoreLogic. "The pace at which properties are entering foreclosure is slowing," he said. "And servicers nationwide stepped up the rate at which they were able to process distressed assets."
After foreclosures are completed and the homes are back in the hands of their lenders, the homes are being sold very quickly. "This is the first time in a year that REO sales — those of bank-owned properties — have outpaced completed foreclosures," said Fleming.

In December 2011, there were 103 sales of bank-owned homes for every 100 homes in foreclosure inventory. That was up considerably from November 2010, when there were only 94 REO sales for every 100 in the foreclosure process...q

Source: CNN/Money

Housing's Future: Immigrants

Immigrants are expected to make up a large number of the future home buyers of America in the coming decades, according to a new report, “Assimilation Tomorrow: How America’s Immigrants Will Integrate by 2030” by the Center for American Progress, authored by Dowel Meyers, professor in the School of Policy, Planning, and Development at the University of Southern California, and John Pitkin, senior research associate in the USC Population Dynamics Research Group.
Myers' report finds that at astonishingly high levels, immigrants are projected to learn English, buy homes, acquire citizenship, and attain solid economic footing in the United States. The report found that while 25.5 percent of immigrants owned homes in 2000, that percentage is expected to jump to 70.3 percent by 2030. If that happens, the percentage of immigrants who will own homes will be on par or even slightly higher than the home ownership rate among native-born Americans, the study finds. Hispanics, in particular, are expected to make the biggest gains toward home ownership. Home ownership for Hispanic immigrants stood at 21 percent in 2000, but is projected to reach 67 percent by 2030.
Source: RISMedia

Effects of Foreclosure

More than 4 million homes have been lost to foreclosure in the last six years, and many of those former home owners are now starting to ask: When can we buy again? Many banks have guidelines that prevent them from issuing loans to people with a foreclosure or short sale in their credit history in some cases for as much as seven years. That also doesn’t factor in the damage foreclosures and short sales can do to a person’s credit score, and the work former home owners' will need to do to repair it so they’ll have a better chance at qualifying for financing again in the future. Still, some former home owners, particularly those who foreclosed or did a short sale due to extenuating circumstances like a job loss or illness, are finding the wait may not be as long as they were once told. "They're probably going to pay a little higher rate, but with rates so low, a higher rate is not a big deal," Rosa Herwick, a broker and owner of Century 21 JR Realty in Henderson, Nev., told the Associated Press. The wait-time varies among lenders and government entities. For example, the Federal Housing Administration says former home owners with a foreclosure must wait three years before they can qualify, while Fannie Mae and Freddie Mac require a seven-year wait following a foreclosure. As for short sales, sometimes these waits can be waived or drastically cut, depending on the borrower’s situation. FHA requires a three-year wait following a short sale, but it may waive that wait if the short sale was due to a job loss. Also, for borrowers who can come up with a higher down payment on their next home purchase, they may also not have as long to wait. For example, Fannie Mae will reduce the wait from seven years to two years for borrowers who come with a down payment of 20 percent or more.
Source: The Associated Press

Here Comes The Jobs Report

After years of suffering through a jobless recovery, we have finally reached a point in which employers are hiring with regularity. Jobs growth is imperative for the recovery to continue. People who have jobs purchase homes and cars. People who have jobs are much less likely to go through a foreclosure. Because employment growth is so essential, it is no wonder that the monthly jobs stats are greatly anticipated by the markets. We can expect some volatility in stock prices and rates if the numbers are a surprise to the up-side or in the other direction.

Meanwhile, oil prices are approaching a level that have many analysts concerned with the dampening effect that $4.00 gas could have on the economy. Again, the creation of more jobs could help mitigate this issue. The question is whether the higher oil prices are due to tension with regard to Iran or a better economy. Most likely we are seeing a dual affect. While higher oil prices today may hurt the economy, in the long run these prices are likely to spur more production and further advanced of alternative energy sources, which is positive for the creation of jobs. We believe that as long as oil prices do not get out of hand and spike significantly beyond where they are today, the economy may be strong enough to withstand the rise in gas prices we have seen. Again, this is a price we pay for economic growth and hopefully the tension in Iran will lessen with diplomatic efforts. There is enough going in the region that we obviously don't need another major hot spot. Next week you can be sure we will be analyzing the results of the jobs report. Stay tuned.

Source: www.newsletterproonline.com