Tuesday, August 11, 2009

Facts not fluff!

'Lying listings' fool more homebuyers
By Jay MacDonald • Bankrate.com
New eraIzso says the Internet and the explosion of mobile devices like smart cell phones largely have made listing comments irrelevant. The National Association of Realtors' 2008 Home Buyer and Seller Survey found that 87 percent of homebuyers use the Internet to search for homes. Nearly as many buyers (32 percent) first learn of a listing online as from their real estate agent (34 percent).

Now that buyers can easily view the condition of the roof, siding, lawns and surrounding neighborhood from overhead or street level on Google Earth and many MLS Web sites, what's the point of obfuscation?

"Today's buyer wants the facts, not the fluff," Izso says. "When they pull up in front of a listing, they're on their iPhone to retrieve the hard data from the MLS. "Back when buyers shopped through the classifieds or real estate magazines, the sales pitch was the first thing they read. Now it's the last thing they read, if they read it at all."

Lost in translation

Jon Boyd, past president of the National Association of Exclusive Buyer Agents, joined forces with NAEBA members worldwide to compile a translation guide of listing agent euphemisms.

They include:

Grandma's house: Realtors interpret this to mean a) the house hasn't been updated since Grandma moved in or b) it still smells like Grandma.

Great potential: The operative word here is "potential." The "potential" in one case pointed to the fact that there was a large crack through the center of the foundation caused by an earthquake.

Light and bright: Bring your sunglasses because everything in this baby will be white: walls, cabinets, tile. Where have you seen this before? Oh yeah, the hospital.

Meticulously maintained: It could mean the owners never bothered to update the property. Maintenance is admirable for plumbing and HVAC, not so much for cabinets, carpets and windows.

Mile to the beach as the seagull flies: And you'll wish you had wings. Those straight-line calculations can mean some pesky traffic lies between you and the lifeguard shack.

Needs TLC: You may freely substitute "OMG" for "TLC" here. Boyd says the phrase "TLC" often means the house has been abused and requires more than mere redecorating. "The average homebuyer who sees HGTV a couple times before they go looking is not sensitive to that," he says.

Newer furnace and AC: "Newer" has a certain "truthiness" to it. In one case, both units were 25 years old. When the listing agent was asked why she made such an audacious claim, she replied, "Because each one of them had received a new part within the last year."

Retro decor: It's '60s flashback time. Can you dig the original paisley vinyl floors and avocado appliances, man? Groovy!

This house just had a total facelift: Loosely translated, it means the seller painted everything. But paint, like a facelift, can only hide so much.

This house will go fast: Might have been believable in the first 30 days on the market, but not anymore. One home with this description had been on the market 247 days.

Turnkey: Meaning they don't want to have to haul away all that orange-and-brown-plaid-polyester-covered furniture.

Very bright, sunny home: Often true because there's not a tree in sight.

Water view: Of course, you'll need to stand on the upper deck railing and crane your neck. With binoculars. On an extremely clear day.

Wednesday, August 5, 2009

Banks can't handle loan modifications....

WSJ(8/5) UPDATE: Foreclosure Plan Is Off to a Bumpy Start (From THE WALL STREET JOURNAL)
By Ruth Simon
A report card released Tuesday by the Treasury Department showed wide variations in how quickly mortgage companies are helping financially troubled borrowers under the Obama administration's foreclosure-prevention plan. So far, more than 400,000 borrowers have been offered help. Over 235,000 borrowers, or roughly 9% of those eligible for the program and at least 60 days past due, have begun trial mortgage modifications, the first step to getting a loan reworked. Among the largest mortgage-servicing companies, J.P. Morgan Chase & Co. has put the most borrowers on a trial modification, having begun the process for roughly 79,000 of them, or about 20% of those whose loans are at least 60 days past due. Saxon Mortgage Services, a unit of Morgan Stanley, has begun trial modifications for more than 21,000 borrowers, or roughly one-quarter of its delinquent borrowers eligible for the program. Other companies have made less progress. Bank of America Corp. has begun trial modifications for fewer than 28,000 borrowers, or about 4% of those who are delinquent, while Wells Fargo & Co. so far has started with about 6% of such borrowers. Borrowers can get help under the Obama program if they are behind on their loan payments or current but at risk of imminent default. They must typically make three months of reduced payments during the trial period before they can qualify for a full modification. Administration officials said they were releasing the data in an effort to hold mortgage companies accountable. "While the program has ramped up in an impressive way, there are significant variations among servicers in their performance," said Assistant Treasury Secretary Michael Barr. He said some companies need to boost capacity or improve employee training. In September, the government will begin requiring mortgage companies to tell borrowers why their modification application was turned down, Mr. Barr said. Some borrowers say they are being denied help under the program even though they fall within its guidelines. The Obama program, announced in February, provides financial incentives to mortgage companies and investors to reduce loan payments to affordable levels. The administration has called on mortgage companies to boost the number of trial loan modifications to 500,000 by Nov. 1. Administration officials have said the program could ultimately help as many as three million to four million homeowners. Anthony Sanders, a real-estate finance professor at George Mason University in Fairfax, Va., said government officials should focus on the success rate for loan workouts, not the number being done. The administration's figures don't present a full picture of each company's activities. Bank of America said it completed 150,000 loan modifications in the first six months of this year outside the Obama program. Wells Fargo said it completed 240,000 modifications in the first seven months, mostly outside the program. Unlike some companies, Wells Fargo has been requiring certain borrowers to fully document income, slowing the pace of its modifications under the program. Mortgage companies are facing increased pressure to step up the pace. Sanjiv Das, chief executive of Citigroup Inc.'s CitiMortgage unit, said he receives an update at 7:30 each morning on the number of completed modifications. CitiMortgage has begun trial modifications for about 15% of its delinquent borrowers eligible for the Obama program. Mortgage servicers face substantial challenges. Call volume is running 500% above normal levels, said David Sisko, a director with Deloitte & Touche. Meanwhile, mortgage-servicing companies have boosted staffing by an average of just 30% to 40%. Mr. Sisko said employees who evaluate borrowers for loan modifications now are responsible for an average of 200 to 300 loan files, up from 50 to 100 in the third quarter of 2008. Some companies appear to have been quicker to respond than others. J.P. Morgan put its own modification program in place last fall and began gearing up for the Obama plan even before the final details were announced, said David Lowman, who runs J.P. Morgan's mortgage business. Still, like its competitors, J.P. Morgan also had trouble keeping up with the volume of customer calls, Mr. Lowman said. Bank of America, meanwhile, has been slower than some companies to implement some parts of the program, such as help for borrowers who are current on loan payments but still at risk of default. The company is also operating two different loan-modification systems, one for legacy loans and one for mortgages originated by Countrywide Financial Corp., which it acquired last year. The Countrywide operation has gotten up to speed more quickly, a company spokesman said, largely because it had agreed to step up modifications as part of settling a lawsuit brought by state attorneys general regarding Countrywide's lending practices. Bank of America is "very supportive" of the program, said Steve Bailey, the company's mortgage-servicing executive. But "it's difficult to implement," he said. Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/nae/al?rnd=NEQpysjVnESC%2BGfnLGdDUw%3D%3D. You can use this link on the day this article is published and the following day.

Tuesday, August 4, 2009

Home Sales up, UP!

By Jeff Bater

Pending home sales in the U.S. climbed a fifth month in a row in June, the longest streak in six years and another sign of recovery in the housing sector.The National Association of Realtors' index for pending sales of previously owned homes increased 3.6% in June to 94.6 from 91.3 in May, the industry group said Tuesday.Year over year, the index was 6.7% above the level of 88.7 in June 2008.The last time sales ran up five straight months was in 2003, the NAR said.The index is based on signed contracts for previously owned homes and serves as a forecasting tool for the used housing market.The 3.6% monthly increase was much larger than the 0.5% advance private analysts projected for June.Last month, the NAR reported existing-home sales rose in June, up 3.6% to a 4.89 million annual rate. Buyers are pouncing on a big drop in prices."Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who've been on the sidelines," said Lawrence Yun, chief economist for NAR.New-home sales soared in June and builders increased groundbreakings, reflecting a bit of optimism seen nudging the housing industry toward a slow, painful recovery.The NAR projects existing-home sales at 4.91 million this year and 5.16 million in 2010. That compares with 4.91 million in 2008. The median price for an existing home is seen at $174,100 in 2009 and $179,800 in 2010. It was $198,100 in 2008.A month ago, the NAR forecast 2009 sales at 4.89 million and 2010 sales at 5.16 million. The 2009 median price was projected at $178,000 and the 2010 price at $184,900.The NAR's pending home sales index was designed to try measuring which way the housing market is going in the future. It is based on pending sales of existing homes, including single-family homes and condominiums. A home sale is pending when the contract has been signed but the transaction hasn't closed. Pending sales typically close within one or two months of signing.By region, the pending sales index for the Northeast increased 0.4% in June from May; it had gone up 5.8% since June 2008. The Midwest increased 0.8% in June from May; it had gone up 11.6% since June 2008. The South increased 7.1% in June from May; it had gone up 8.9% since June 2008. The West increased 2.9% in June from May; it had gone down 0.2% since June 2008.-By Jeff Bater, Dow Jones Newswires; 202-862-9249; jeff.bater@dowjones.com