Top Foreclosure States In July 2008
(source: www.RealtyTrac.com)

U.S. Foreclosure Rates Heat Map – July 2008

IRVINE, Calif. – August 14, 2008 – RealtyTrac (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its July 2008 U.S. Foreclosure Market Report™, which shows foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 272,171 U.S. properties during the month, an 8 percent increase from the previous month and a 55 percent increase from July 2007. The report also shows one in every 464 U.S. households received a foreclosure filing during the month.

RealtyTrac publishes the largest and most comprehensive national database of foreclosure and bank-owned properties, with over 1.5 million properties from over 2,200 counties across the country, and is the foreclosure data provider to MSN Real Estate, Yahoo! Real Estate and The Wall Street Journal’s Real Estate Journal.

“Bank repossessions, or REOs, continued to be the fastest growing segment of foreclosure activity in July, posting a 184 percent year-over-year increase — compared to a 53 percent year-over-year increase in default notices and an 11 percent year-over-year increase in auction notices,” said James J. Saccacio, chief executive officer of RealtyTrac. “The sharp rise in REOs, combined with slow sales, has resulted in a bloated inventory of bank-owned properties for sale. RealtyTrac now has more than three quarters of a million properties in its active REO database, a number that represents approximately 17 percent of the inventory of existing homes for sale reported in June by the National Association of Realtors.”

Nevada, California, Florida post top state foreclosure rates
Nevada continued to document the nation’s highest state foreclosure rate in July, with one in every 106 households receiving a foreclosure filing during the month. Foreclosure activity in Nevada was up 15 percent from the previous month and 97 percent from July 2007, pushing the total number of properties with foreclosure filings to over 10,000. Bank repossessions in Nevada were up 384 percent on a year-over-year basis, while default notices were up 59 percent and auction notices were up 31 percent.

One in every 182 California properties received a foreclosure filing in July, the nation’s second highest state foreclosure rate, while one in every 186 Florida properties received a foreclosure filing, the nation’s third highest state foreclosure rate.

Despite increasing foreclosure activity, Arizona’s foreclosure rate dropped from the nation’s third highest in June to fourth highest in July. Foreclosure filings were reported on 13,350 Arizona properties during the month, a 3 percent increase from the previous month and a 127 percent increase from July 2007. One in every 195 Arizona properties received a foreclosure filing, a rate that was more than twice the national average.

Other states with foreclosure rates ranking among the top 10 were Ohio, Georgia, Michigan, Colorado, Utah and Virginia.

California, Florida, Ohio report highest foreclosure totals
Foreclosure filings were reported on 72,285 California properties in July, the highest total among the states. The state’s foreclosure activity increased 5 percent from the previous month and was up 85 percent from July 2007. On a year-over-year basis, bank repossessions in California were up 427 percent, while auction notices were up 67 percent and default notices were up 34 percent. However, default notices declined 4 percent from the previous month.

Florida foreclosure activity in July increased 14 percent from the previous month and 139 percent from July 2007. The state posted the nation’s second highest number of properties with filings — 45,884. On a year-over-year basis, bank repossessions in Florida increased 678 percent, while auction notices were up 180 percent and default notices were up 100 percent.

Ohio’s total of 13,457 properties with foreclosure filings in July was third highest among the states despite an increase of just 2 percent from the previous month and 1 percent from July 2007. On a year-over-year basis, bank repossessions in Ohio were still up 33 percent, while auction notices were down nearly 20 percent and default notices were up nearly 8 percent. One in every 375 Ohio households received a foreclosure filing during the month, the nation’s fifth highest state foreclosure rate.

After Arizona, Michigan documented the fifth highest state total in July — 11,591 properties with filings — but the state’s foreclosure activity decreased 4 percent from the previous month and 17 percent from July 2007. The state’s foreclosure rate — one in every 389 households received a foreclosure filing — ranked seventh highest among the states.

Other states with total properties with foreclosure filings among the 10 highest were Texas, Georgia, Nevada, Illinois and New York.

Top Metro Rates in California, Florida, Nevada, Arizona
The Cape Coral-Fort Myers, Fla., metro area registered the highest foreclosure rate among the 230 metro areas tracked in the July report. One in every 64 households in the metro area received a foreclosure filing during the month — more than seven times the national average.

Three California cities followed in the metro foreclosure rate rankings: Merced was at No. 2 with one in every 73 households receiving a foreclosure filing; and Stockton and Modesto were in a virtual tie, each with one in every 82 households receiving a foreclosure filing.

With one in every 85 households receiving a foreclosure filing, the Las Vegas metro area’s foreclosure rate ranked No. 5, followed by three more California metros: Riverside-San Bernardino, Bakersfield and Vallejo-Fairfield.

Fort Lauderdale, Fla., documented the ninth highest metro foreclosure rate, and the foreclosure rate in Phoenix took the No. 10 spot.

Report methodology
The RealtyTrac Monthly U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing reported during the month — broken out by type of filing at the state and national level. Data is also available at the individual county level. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). If more than one foreclosure document is filed against a property during the month — which is extremely rare — only the most recent filing is counted in the report. The report also checks if the same type of document was filed against a property in a previous month. If so, and if that previous filing occurred within the estimated foreclosure timeframe for the state the property is in, the report does not count the property in the current month.

Here are 5 new reasons to move this year:

1. The federal government is offering a tax credit for first time homebuyers of 10% of the price of the home, up to a maximum credit of $7,500. There are income and other restrictions, so you should consult a tax professional to see if you could benefit.

2. Recently Federal Reserve Chairman Bernanke said “Fed Funds rate increases may be coming in the near future … these actions will most definitely also increase the cost of obtaining financing,” indicating a possible rise in interest rates next year. Historically changes to the Fed’s Funds Rate tend to impact mortgage rates.

3. The loan limit for FHA loans has increased in many areas, allowing buyers of higher priced homes to use these low downpayment programs for the fist time. FHA downpayment requirements go up next year.

4. Certain types of downpayment assistance programs, such as some offered by homebuilders, will not be available after this year.

5. Many sellers are more willing to negotiate if their homes have been sitting on the market for awhile.

The current market still offers Buyers the greatest opportunity to buy at the years most favorable prices. There are still many attractive foreclosures to see, but those that are well priced continue to receive multiple offer and sell above the listing price. The foreclosure market continues to be an excellent opportunity for first time Buyers to purchase. In particular, the $7500 tax credit for first time Buyers recently passed by Congress makes right now the best time for new Buyers to purchase while there is available properties at rock bottom prices.

The foreclosures are coming fast and furious even celebrities are taking the hits. Below is a shortlist of celebrities affected by the housing woes.

Ed McMahon

The 85-year-old television personality owes $644,000 to Countrywide on his six-bedroom, five-bathroom Beverly Hills estate - in the same exclusive, gated community where Britney Spears lives. The property has been on the market for 2 years and now could be facing foreclosure.

Laura Richardson

The California congresswoman evidently bet big on the real estate boom and lost. She’s had her three houses in Long Beach, San Pedro and Sacramento in foreclosure proceedings in recent months.

Jose Canseco
The former baseball MVP forfeited his $2.5M home in Encino after racking up millions of debt.

Latrell Sprewell
The former All-Star NBA guard lost his 70-foot yacht, named the “Milmwaukee’s Best” after he stopped making the $10,322 monthly payment. Sprewell also lost his $610,000 Milwaukee home through foreclosure.

Michael Jackson
After failing to repay his $21M mortgage on the Neverland Ranch in Santa Barbara County, his attorneys worked out a deal with Fortress Investment Group to buy out the loan and avoid foreclosure

Evander Holyfield
The Boxing champ defaulted defaulted on a $10 million loan to Washington Mutual on his 109-room estate in Fayette County, Ga. The home was set to be auctioned off in July.

Latrell Sprewell
The former All-Star NBA guard lost his 70-foot yacht, named the “Milmwaukee’s Best” after he stopped making the $10,322 monthly payment. Sprewell also lost his $610,000 Milwaukee home through foreclosure.

Whitney Houston
Whitney Houston’s house went deep into foreclosure proceedings, then she sold her five-bedroom, 8,022-square-foot house in Alpharetta, Ga. for $1,190,000.

Aretha Franklin
The queen of soul lost her brick mansion and $2M condo in Michigan to tax collectors.

Laura Richardson
The California congresswoman evidently bet big on the real estate boom and lost. She’s had her three houses in Long Beach, San Pedro and Sacramento in foreclosure proceedings in recent months.

Vin Baker
Former NBA star saw his home in Durham, CT auctioned off. The seven-bed, six-and-a-half-bath mansion, on about 11 acres with a basketball court and a bowling alley, had been on the market for $2,950,000

Courtney Love
The singer/actress’ historic Washington house was up for auction when the bank foreclosed the property, apparently owing $367,000.

Avril Lavigne
Rock star Lavigne avoided foreclosure when she listed her nearly 6,900-square-foot Mulholland Estates mansion for $5.8 million and eventually accepted a cash offer of $5.2 million.

Adam “Pacman” Jones
The NFL star purchased the mansion sitting on 30 acre lot for $1.5M in July 2006, located in a Nashville suburb. Jones had defaulted on a mortgage with U.S. Bank, and now the sale is set for noon on Aug. 22.

By DAVE CARPENTER, AP Business Writer Tue Jul 29, 11:02 PM ET

Questions and answers about the Hope for Homeowners Act of 2008, passed by Congress last weekend to try to steer as many as 400,000 struggling homeowners away from foreclosure:

Q: What exactly will the legislation do?

A: It will allow those who qualify to cancel their old mortgage loans and replace them with 30-year fixed-rate loans for up to 90 percent of the home’s current value. The FHA will insure a total of $300 billion of the loans over a three-year period.

But the decision on whether to write such a loan remains up to banks, which would have to be willing to take a loss on the existing loans in exchange for avoiding an often-costly foreclosure.

Q: Who is eligible?

A: Eligible borrowers must have spent more than 31 percent of their monthly incomes on their mortgages as of March 1, 2008. The troubled loan must have originated no later than Jan. 1, 2008, and be on the borrower’s primary residence. And the borrower’s income must be verified.

Q: When does the program start?

A: It takes effect Oct. 1 and runs through September 2011, although the FHA isn’t likely to have it operating at full capacity until next year.

Q: Since lenders can pick and choose which loans to refinance, how can consumers determine if theirs will be selected?

A: Check with the bank or financial company servicing your mortgage, but it may be weeks before they make decisions concerning the new guidelines and assess individual loans.

Even then, keep expectations limited.

“Servicers are going to be reluctant to take the government up on their offer,” predicted Mark Zandi, chief economist at Moody’s Economy.com. “The earliest they’ll start taking them up on it is early next year. And even then it’s likely to be modest.”

Q: Is there anything a homeowner can do to improve chances of benefiting from the program, such as crunching numbers to make a case for the bank?

A: Not really. The best step is to keep up your payments as best you can.

Q: But doesn’t this provide an incentive to NOT pay your mortgage, if you’re barely keeping ahead of bills and are underwater on your house, so you can qualify?

A: No. If your situation deteriorates enough, the bank may reject any possible new loan.

“Turning yourself into a financial basket case is not going to work,” said Dan Seiver, a finance professor at San Diego State University. “If you turn into a complete deadbeat, the servicer is going to just foreclose and dump it.”

Q: So what should I be doing now besides trying to keep up with payments?

A: Talk to a local credit counselor and call the toll-free hot line of the Hope Now alliance — an industry group trying to coordinate a response to the mortgage crisis — at 1-888-995-HOPE. It is available 24 hours a day to provide mortgage counseling in multiple languages.

Mary Thomason, director of resource development for The Impact Group of Atlanta, a housing counseling group, also suggests tracking expenses and income closely in order to be able to forecast your cash flow for the next six months and give yourself better control of your finances.

Q: If the banks and lenders refuse to write these loans, then what?

A: Public and political pressure may prompt them to participate. If not, and more people continue to lose their homes, Zandi says the next White House administration subject them to additional regulations or investigations if they remain unwilling to take on the risks.

Q: What happens if I’m able to sell my home after I refinance?

A: If you sell during the next five years, you must agree to share 50 percent of any profits from the resale with the government. What’s more, homeowners can only retain equity gains based on a sliding scale. The homeowner would have zero equity from a sale in the first year, with the amount rising 10 percent in each succeeding year and capping at 50 percent from a sale in year five and thereafter.

The equity must be repaid because the maximum amount on the new loans will be capped at 90 percent of the current market value, which automatically gives the previously troubled homeowner 10 percent equity in the home.

Q: Where can consumers find more detailed information about the plan?

A: Below is a summary of the housing act

Summary of the “Housing and Economic Recovery Act of 2008″
A. Summary of the “Federal Housing Finance Regulatory Reform Act of 2008″
This legislation strengthens and modernizes the regulation of the housing government-sponsored enterprises – Fannie Mae and Freddie Mac (the enterprises) and the Federal Home Loan Banks (FHLBs or Banks) – and expands the housing mission of these GSEs. In addition, it creates a new program at FHA that will help at least 400,000 families save their homes from foreclosure by providing for new FHA loans after lenders take deep discounts.
I. Safety and Soundness Regulation of the Housing GSEs
The “Federal Housing Finance Regulatory Reform Act of 2008″ establishes a new, independent, “world class” regulator for Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, the housing government-sponsored enterprises (GSEs). The legislation endows this regulator with broad new authority, equivalent to the authority of other federal financial regulators, to ensure the safe and sound operations of the GSEs, including the power to:
•
establish capital standards;
•
establish prudential management standards, including internal controls, audits, risk management, and management of the portfolio;
•
enforce its orders through cease and desist authority, civil money penalties, and the authority to remove officers and directors;
•
restrict asset growth and capital distributions for undercapitalized institutions;
•
put a regulated entity into receivership; and
•
review and approve (subject to notice and comment) new product offerings.

II. Mission Improvement
The new legislation also significantly enhances the affordable housing component of the GSEs’ mission, and expands the number of families Fannie Mae and Freddie Mac (the enterprises) can serve by raising the loan limits in high cost areas (areas with median house prices that are higher than the regular conforming limit) to 150% of the conforming loan limit. Currently, this would be $625,000.
For the enterprises, the legislation tightens targeting requirements of the affordable housing goals, and rewrites those goals to ensure that the enterprises provide liquidity to both ownership and rental housing markets for low and very-low income families. The legislation requires the enterprises to serve a variety of underserved markets, such as rural areas, manufactured housing, and the preservation market. The legislation improves reporting requirements for affordable housing activities, including the expansion of the public use data base, and strengthens the new regulator’s ability to enforce compliance with the housing goals.
Finally, the legislation creates a new Housing Trust Fund and a Capital Magnet Fund, financed by annual contributions from the enterprises, which will used for the construction of affordable rental housing.
For the Federal Home Loan Banks (FHLBs), the legislation requires new affordable housing goals similar to those that apply to the enterprises for FHLB mortgage purchase programs. The legislation also requires the FHLBs to create a public use data base for such programs. Treasury-certified Community Development Financial Institutions (CDFIs) would become eligible to join FHLBs. Finally, community financial institution members of the FHLBs may use FHLB advances for community development purposes.

B. Summary of the “HOPE for Homeowners Act of 2008″
The “HOPE for Homeowners Act of 2008″ creates a new, temporary, voluntary program within FHA to back FHA-insured mortgages to distressed borrowers. The new mortgages offered by FHA-approved lenders will refinance distressed loans at a significant discount for owner-occupants at risk of losing their homes to foreclosure. In exchange, homeowners will share future appreciation with FHA.
The program is built on five principles:
1. Long-term affordability. The program is built on the idea, expressed by Federal Reserve Chairman Bernanke, that creating new equity for troubled homeowners is likely to be a more effective way to avoid foreclosures. New loans will be based on a family’s ability to repay the loan, ensuring affordability and sustainable homeownership.

2. No investor or lender bailout. Investors and/or lenders will have to take significant losses in order to benefit from the proceeds of the loans refinanced with government insurance. However, these losses would be less than the losses associated with foreclosure.

3. No windfall for borrowers. Borrowers will share their new equity and future appreciation equally with FHA. Borrowers will pay for the FHA insurance.

4. Voluntary participation. This will be a voluntary program. No lenders, servicers, or investors will be compelled to participate.

5. Restore confidence, liquidity, and transparency. Credit markets are fearful and frozen in part because banks and other financial institutions do not know what their subprime mortgages and related securities are worth. The uncertainty is forcing lenders to hoard capital and stop the lending necessary for economic growth. This program will help restore confidence and get markets flowing again.
Program Oversight. The new program will be overseen by a Board made up of the Secretary of HUD, the Secretary of the Treasury, the Chairman of the Federal Reserve Board, and the Chairman of the Federal Deposit Insurance Corporation (FDIC). The Board will have the authority to develop standards within the framework of the legislation.
Eligible Borrowers. Only owner-occupants who are unable to afford their mortgage payments are eligible for the program. No investors or investor properties will qualify. Homeowners must certify, under penalty of law, that they have not intentionally defaulted on their loan to qualify for the program and must have a mortgage debt to income ratio greater than 31 percent as of March 1, 2008. Lenders must document and verify borrowers’ income with the IRS.
New Loan Amount. The size of the new FHA-insured loan will be lesser of the amount the borrower can afford to repay, as determined by the current affordability requirements of FHA; or, 90% of the current value of the home. Loans must be 30-year, fixed rate loans.
Equity & Appreciation Sharing. In order to avoid a windfall to the borrower created by the new 90% loan-to-value FHA-insured mortgage, the borrower must share the newly-created equity and future appreciation equally with FHA. This obligation will continue until the borrower sells the home or refinances the FHA-insured mortgage. Moreover, the homeowner’s access to the newly created equity will be phased-in over 5 years.

Eligible Mortgages. In order to protect against adverse selection, the program prohibits the Secretary from paying an insurance claim whenever the representations and warranties required to be made by lenders are violated, or in cases in which a borrower has an early payment default and misses the first payment. The Act provides the Board the authority to establish other protections against adverse selection, such as requiring “seasoning” for certain higher risk loans before they can be insured under the program. Appraisers of property insured by FHA must be certified by the state where the property is located, or by a nationally recognized professional appraisal organization, and have “demonstrated verifiable education” in FHA appraisal requirements.

Existing Subordinate Liens. Before participating in this program, all subordinate liens must be extinguished. This will have to be done through negotiation with the first lien holder.
Qualified Safe Harbor. The legislation provides servicers with an incentive to participate in the program by offering a safe harbor against legal liability.
Program Size. The program is authorized to insure up to $300 billion in mortgages and is expected to serve approximately 400,000 homeowners.
Program Sunset. The program will begin October 1, 2008 and sunset on September 30, 2011. CBO say the program will net nearly $250 million for taxpayers. The program is paid for by using part of the Affordable Housing Trust Fund; the GSE bill provides a further $2 billion cushion for the government by establishing a reserve fund at Treasury over ten years. If the program costs less than projected, the unused funds are returned to the Affordable Housing Trust Fund. If the program more than pays for itself (as was the case during the Roosevelt Administration), any excess savings are dedicated to reducing the national debt.

C. Summary of the “Foreclosure Prevention Act of 2008″
The Foreclosure bill passed by the Senate on April 10 contains the following provisions designed to address the problems faced by families and their communities in light of the foreclosure crisis:
•
FHA Modernization. To ensure that additional families can access the FHA program, which provides safe, fixed-rate mortgages, significant FHA reform is included to modernize, streamline and expand the reach of the FHA program. Under this bill, the FHA loan limit is
increased from 95% to 110% of area median home price with a cap at 150% of GSE limit (currently, $625,000), allowing families in all areas of the country to access homeownership through FHA. Downpayments of 3.5% will be required for any FHA loan and counseling requirements are enhanced to help provide for stable homeownership.
•
Assisting Communities Devastated by Foreclosures. Homes that have been foreclosed upon and are sitting unoccupied lead to declines in neighboring house values, increased crime and significant disinvestment. To ensure that communities can mitigate these harmful effects of foreclosures, $3.92 billion is provided to communities hardest hit by foreclosures and delinquencies. These supplemental Community Development Block Grant Funds will be used to purchase foreclosed homes, at a discount, and rehabilitate or redevelop the homes to stabilize neighborhoods and stem the significant losses in house values of neighboring homes.
•
Providing Pre-Foreclosure Counseling for Families in Need. To help families avoid foreclosure, this bill provides $150 million in additional funding for housing counseling. These funds will be distributed by the Neighborhood Reinvestment Corporation by the end of 2008 to ensure families can quickly get the help they need. As many as 250,000 additional families connect with their mortgage servicer or lender to explore options that will keep them in their homes as a result of these counseling funds. In addition, $30 million is provided to help provide legal services to distressed borrowers.
•
Enhancing Mortgage Disclosure. To ensure that consumers are provided with timely and meaningful disclosures in connection with mortgages, the bill expands the types of home loans subject to early disclosures (within three days of application) under the Truth In Lending Act (TILA) including refinancings. The bill requires that disclosures be provided no later than 7 days prior to closing so borrowers can shop for another loan if not satisfied with the terms. The bill requires a new disclosure that informs borrowers of the maximum monthly payments possible under their loan, and also increases the range of statutory damages for TILA violations from the current $200 to $2000 to $400 to $4000.
•
Preserving the American Dream for Our Nation’s Veterans. To assist returning soldiers avoid foreclosure, this bill lengthens the time a lender must wait before starting foreclosure from three months to nine months after a soldier returns from service and also provides returning soldiers with one year relief from increases in mortgage interest rates. In addition, the Department of Defense is required to establish a counseling program to ensure veterans and active service members can access assistance if facing financial difficulties. Also included is a provision that increases the VA loan guarantee amount, so that veterans have additional homeownership opportunities. The bill contains provisions to do the following: increase benefits paid to veterans with disabilities such as blindness for the purpose of adapting their housing; provide a moving benefit to servicemen and woman who are forced to move out of rental housing because the owner of the housing was foreclosed on; provide that veterans benefits received in a lump sum are treated the same for the purposes of eligibility for housing assistance as monthly benefits; and to allow the Veterans Administration to provide for improvements and structural alterations to homes of veterans with service-connected disabilities.

It looks like the bailout is coming from the Fed. Glad to see the speculators get bailed out. First the Fed comes out with the stimulus check and now this. Surveys showed that 92% of the people who received checks saved the money or paid off debt. So much for stimulating the economy by sending out $150B in checks that ended up hitting the bank accounts, and in essence stimulated Wall Street’s pocket books. The money saved from the stimulus checks will probably be used by the banks to lend out as mortgage loans and the whole crisis just exacerbates and the circle continues. You sense sarcasm? Maybe just a little…

I wonder how many people really benefited from all these government plans in a life-changing matter. If you bought a home pre-2006, you shouldn’t realize much loss in equity from your original purchase price. And buying in 2006 and 2007 despite all the heeded warnings from experts about real estate bubbles would make you a speculator. And we all know who’s partially responsible for our credit crisis, that’s right, the speculators buying on credit and taking out equity lines when the home equity were articifically inflated!

If you’re an optimist (and a deal hunter), this might actually be great news. You know what they say, “Always look at the brighter side of life!”

Foreclosure filings up 120%

220,000 homes were lost to bank repossessions in the second quarter, and the annual forecast for 2008 will have to be revised upward.

but more affordable housing on the rise? hmm…

One of the most important factors to consider when buying a home is the property value. The last thing a homeshopper can afford to do is to over pay for a property in a declining market. The standard procedure for most appraisers is to the look at comps around the neighborhood to gauge where the buyers and sellers are “trading” at. But if real estate transactions are hitting recently lows, as we’re experiencing now, there simply aren’t enough data to give an accurate analysis on property values.

To value properties, some investors may take the asking price and apply a simple 10% to 15% fade, that’s the quick and dirty way to arrive at a conservative price. By submitting a “lowball” offer, it provides the seller a quick sale value in case the owner needs to expedite the sale. And at the same time, buying at such an discount should provide the buyer enough cushion for any equity depreciation in the near future.

Investors can also pay for a professional opinion on a property. For about $200, investors can hire a professional appraiser to value the property. The appraiser may not be able to step foot inside the property and check all the pipes and roofing for you, but the report should give a detailed analysis on market trends in that specific region based on the characteristics of the house. A similar exercise is to order BPOs (Broker Price Opinions), which is what large Street banks do on all their assets. They hire professionals and conduct valuations on thousands of properties so they have a better understanding on how much money they’re losing on their outstanding loans (sad but true). But I personally do not know if BPOs are feasible for regular home buyers.

Another useful data source for the technical people is S&P’s Case-Shiller Home Price Indices. Wall Street follows these indices very closely. If you are a regular viewer of CNBC market news, you will notice reports on the Case-Shiller indices at the end of each month. The S&P/Case-Shiller Home Price Indices measures the residential housing market, tracking changes in the value of the residential real estate market in 20 metropolitan regions across the United States. These indices use the repeat sales pricing technique to measure housing markets. First developed by Karl Case and Robert Shiller, this methodology collects data on single-family home re-sales, capturing re-sold sale prices to form sale pairs. This index family consists of 20 regional indices and two composite indices as aggregates of the regions. The S&P/Case-Shiller Home Price Indices are calculated monthly and published with a two month lag. But keep in mind, these indices track the prime real estate market, meaning foreclosure, REO, and bankruptcy properties are not part of the analysis.

Take a look at the June Case-Shiller report here.

I will show you exactly how Wall Street breakdown the data in a future post. Download the data here.

To get a computer generated price value on your home try Zillow.com, CyberHomes.com, and RealEstateABC.com

According to NYU professor Nouriel Roubini, the government will ultimately need to spend more than $1 trillion to solve the housing crisis. That figure is so daunting to me that I can’t even recall ever typing out the words “one trillion dollars.” I know I sound silly, but where is that money coming from? If Paulson opens up the Fed piggy bank, I’m exchanging all my Dollars into Euros. Flooding our current economy with that kind of cash will inevitably cause a hyper-inflation and devalue the Dollar.

I sure hope Roubini is wrong. I can say for myself the recession has already caused me enough grief, I’m ready to move on. Maybe the upcoming election will help…

Here’s the link for the Yahoo Finance article.

Another one bites the dust! So apparently Wachovia has decided another $8.9B in write downs is enough and opted to exit the wholesale lending business completely. C’mon, what another $125B to write off considering that’s how much bad loans they have on their balance sheet. Can you believe these clowns actually bought Golden West Financial Corp back in ‘06 for a whopping $25B? That would be an 11 figure sum if you’re scoring at home. I guess it’s not a good idea to allow the borrower to pay the minimum monthly payment of 1% interest only and negatively amortize the balance. I believe Wachovia may have been the largest lender providing the doomed Option Arm products. It’s a great loan in an appreciating market, but it gets you billions in write downs a quarter in an ugly market as we’re experiencing right now.

Somehow I think Wachovia stock will end in the green tomorrow after all the disappointing news come out. We’ll see. Although AMEX and APPL aren’t helping the market much right now after hours.

here are some letters sent to the employees today…

Hello All,

As of this Friday July 25 will no longer be accepting any more loans. We will honor all locks up to that date. Yes, Wachovia wholesale will no longer exists. It was a pleasure working with each and every one of you. Thank you!

—————–
Dear Brokers:

We wanted to give you notice that Wachovia has made the decision today to no longer orginate loans through their wholesale channel. We will be
accepting applications for your borrowers on our portfolio and
marketable/FHA side until Friday July 25th, 2008 3pm. All loans need to
be registered, locked, and submitted in the pipeline prior to July 25th in
order to be honored. If you have been working with a borrower that you
were planning on submitting, please get the loan submitted immediately. We will be available to help you in any way possible in getting these loans
closed out in a timely manner. Once I have more details regarding our
operation closing, I will be sure to let you know.

To remind you again, our website for submission is www.wachovia.com/insite.

If you have any questions, please contact (DELETED).

Thank you for your business,

——————————————–

Sad to hear more people losing their jobs all stemming from the idiotic lending practice.