Half of U.S. states saw an annual increase in the number of foreclosure-related filings in 2012, but most of those were judicial foreclosure states where loan servicers were catching up on the backlog from the “robo-signing” controversy, according to a year-end report by data aggregator RealtyTrac.

All told, RealtyTrac reported foreclosure-related filings against 1.84 million U.S. properties in 2012, down 3 percent from 2011 and down 36 percent from a 2010 peak of 2.9 million homes.
All but five of the 25 states seeing an increase in foreclosure-related filings (default notices, scheduled auctions and bank repossessions) were states where courts handle most foreclosure proceedings.

Many foreclosure proceedings against homeowners in those states were stalled, but not derailed, by allegations that loan servicers failed to follow proper procedures in filing legal documents.

After loan servicers reached a settlement last March with state and federal officials last over so-called “robo-signing” practices and revised their procedures, they began pushing new and existing proceedings through the system again (many also started approving more short sales to meet their obligations under the terms of the settlement).

Foreclosures are handled by courts in the six states seeing the biggest annual increase in 2012 foreclosure filings — New Jersey (up 55 percent), Florida (53 percent), Connecticut (48 percent), Indiana (46 percent), Illinois (33 percent), and New York (31 percent).

Homes in New York took the longest to move through the foreclosure process — 1,089 days — followed by New Jersey (987 days), Florida (853 days), Hawaii (781 days), and Illinois (697 days).

In the 25 states that saw foreclosure filings drop from 2011 to 2012, 19 handle most foreclosures outside of the court system, and loan servicers in those states continued to move homes through the foreclosure process during the robo-signing controversy.

Non-judicial foreclosure states seeing the biggest drop in foreclosure filings in 2012 were Nevada (down 57 percent), Utah (down 40 percent), Oregon (down 40 percent), Arizona (down 33 percent), California (down 25 percent), and Michigan (down 23 percent).

RealtyTrac warned there could be a foreclosure backlog building up some states that saw filings decline in 2012, as the result of new state legislation and court rulings that make it more difficult for lenders to foreclose.

So 2013 could see “two discrete jumps in foreclosure activity,” at the beginning and end of the year, said Realty Trac’s Daren Blomquist.

“We expect to see continued increases in judicial foreclosure states near the beginning of the year as lenders finish catching up with the backlogs in those states, and another set of increases in some non-judicial states near the end of the year as lenders adjust to the new laws and process some deferred foreclosures in those states.”

The rise in foreclosure activity in many local markets in 2012 “should translate into more foreclosure inventory available for sale in 2013 in those markets,” Blomquist said. “That is good news for buyers and investors, but could result in some short-term weakness in home prices as the often-discounted foreclosure sales weigh down overall home values” in those markets.

States with the highest foreclosure rates in 2012 were Florida (with filings against 3.11 percent of homes), Nevada (2.7 percent), Arizona (2.69 percent), Georgia (2.58 percent), California (2.33 percent), Ohio (1.75 percent), Michigan (1.69 percent), South Carolina (1.66 percent), and Colorado (1.64 percent).

Among metro areas with a population of 200,000 or more, Stockton, Calif., had the nation’s highest foreclosure rate (3.98 percent). Six other California cities made RealtyTrac’s list of the 20 metro areas with the highest foreclosure rates, and Florida landed eight cities on the list, including Miami (3.71 percent) and Orlando (3.46 percent).

Zillow is projecting that a half-dozen markets in California, including some Central Valley cities hard hit by foreclosures, will see double-digit home price appreciation in the months ahead. The real estate portal’s analysis of more than 250 markets predicts that national home prices will appreciate 2.5 percent in the year ending November 2013.

“The U.S. housing market bottomed in the fourth quarter of 2011 and has since entered a sustainable recovery,” Zillow Chief Economist Stan Humphries said in a blog post.

Help we need your support!

As a REALTOR® and a constituent, I urge you to support legislation to ensure that rural communities continue to have access to valuable federal housing programs. Unless Congress acts quickly, families in more than 900 communities across the country will be unable to utilize the programs of the Rural Housing Service (RHS).
As a result of the 2010 census, RHS is now determining which currently eligible rural communities may no longer meet RHS program requirements due to changes in population or their designation as part of a Metropolitan Statistical Area (MSA). Programs such as the Section 502 guaranteed loan program are instrumental in providing opportunities for homeownership for rural families. These loans can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities. Private lenders and banks fund these loans, and RHS insures them. These loans are made at no cost to the federal government as the program’s costs are fully supported by the premiums paid by borrowers.
Congress created the definition of a “rural” community used by the RHS back in 1974; it has not been updated in the ensuing 38 years. Instead, following each census, Congress has simply “grandfathered” communities that had been eligible for RHS programs but due to changing demographics no longer met the RHS’ rural definition. The Senate has included a provision, sponsored by Senators Nelson (D-NE) and Johanns (R-NE), in the pending Farm Bill to provide a ten-year extension of eligibility for currently eligible communities. In the House, Rep. Fortenberry (R-NE) has introduced legislation to provide the same ten-year extension. But no final action has occurred on either bill.
Extending eligibility for existing communities does NOT authorize any additional funding, but would simply retain the pool of eligible communities. As our nation struggles to recover from our economic crisis, our rural families and communities need these programs more than ever. I urge you to support this extension and ensure safe access to housing financing for rural families when Congress returns to session in November

Get rid of clutter and neutralize the home. Removing unnecessary furniture and painting rooms neutral colors will help potential buyers see themselves living in the home.

Homeowners also should put away personal items, such as jewelry and family photos.

Fix the obvious. Paint the peeling eaves, apply a fresh coat of paint to the interior and clean the carpet, especially if there are pets in the house.

Homes with dogs and/or cats immediately lose half the buyers on the market because of odors and allergies.

When the house is being shown, homeowners should leave and take their pets with them. Buyers do not want to feel like intruders by opening closets and cabinets.

Sprucing up flower boxes, adding new mulch, and trimming bushes are all recommended to increase curb appeal.

Rents increase as vacancies dry up

Despite the sluggish economy, average rents increased in all 82 markets tracked by Reis Inc., a
real estate data firm. Average rents are now at record levels in 74 of those markets and now
top $1,000 a month on average in 27 of them, including Miami, Seattle, San Diego, Chicago,
and Baltimore.Read the full story http://on.wsj.com/LzFc9Y

How to pump up your credit score


To avoid another real estate bubble, many lenders have tightened their mortgage requirements.  According to a report by the Federal Reserve, a majority of banks are less likely to offer loans to people with a FICO score of 620 and a 10 percent down payment than they were in 2006.  Lenders were also less likely to do so even for those with a score of 720.  The good news though is there are some tactics that consumers can employ to raise their scores.

Making sense of the story

  • First, it is worth noting that median credit scores are rising, as people reduce debt and spend less in tight economic times.  Some 18 percent of Americans now have scores of 800 to 850, while 15 percent are below 550, according to FICO data.
  • Often lenders will review FICO scores from the three big credit agencies, and they use the middle number to evaluate the borrower.  That number becomes the borrower’s “risk number.” 
  • Borrowers can figure out their risk number by obtaining their three credit reports, available free once a year at AnnualCreditReport.com, and studying them carefully for errors or omissions.
  • According to FICO, the two biggest factors in a credit score are payment history, which accounts for 35 percent of the score, and the amounts owed, accounting for 30 percent.
  • Knowing that information, one can raise his/her credit score by reducing balances on credit cards.  However, if an account is in collection, it is too late to improve the credit score by paying it off.  The notation that an account is in collection is what lowers the score, so consumers may get more mileage by paying down active credit-card balances and other debts first.
  • Though mistakes and bankruptcies may stay on a credit report for seven years, lenders will generally be more likely to overlook late payments that happened two or more years ago than more recent ones.
  • Improving one’s credit score could take three to four months, or it could take as long as 18 month Read the full story at  http://on.car.org/Lr3ukl


My friend Carole Rododni sends out a Real Estate Newsletter. In case you haven’t heard of Carole before she was formerly President of Fox and Carskadon Real Estate, Chief Operating Officer of Cornish and Carey Real Estate, and President of Alain Pinel Realtors.  She is a renowned speaker on the economy and real estate and is currently the President of her own consulting company — Bamboo Consulting.  In her most recent publication she gave 10 things to know in 2012 about Buying or Selling Real Estate. With her blessing I pass them along to you,  they are timely to say the least. Thank you Carole! 

Many homeowners who haven’t bought or sold a home in the past few years will findthat many of the old “rules” have changed. Buying or selling a home is now a long andcomplicated process.

1.A bigger down payment might be necessary. Documentation of income and reserve funds are required for all loans. The loan process is more stringent for jumbo loans.

2. It is not a buyer’s market entirely. Home prices and mortgage rates are down, but insought-after neighborhoods, prices are worth almost what they were.

3. Sellers should not put off those remodeling projects. Call this the HGTV effect. Buyers see all the improvements and now expect it. Older homes need to look like new.

4. Home staging could be worth the extra cash.Besides a new coat of paint, staging has proven to be the best return on investment, particularly for vacant homes. Professional staging prices vary and you can choose to do certain rooms or the entire house.

5. Appraisals may not match price expectations. Due to the Home Valuation Code of Conduct, homes are appraised fairly without the influence of lenders and third parties. You can help the appraiser by providing him with a list of repairs and upgrades. Additionally, know the buyers and banks may ask for 2 appraisals.

6. Start saving your financial records to show the bank. Lenders now require more documentation than ever before. They have to validate everything. Come prepared with 2 years of tax returns and 2 years of bank statements. Be prepared to defend your credit. You will need a credit score of 620-650 to be accepted by Fannie Mae and Freddie Mac. Other lenders may require higher scores.

7. Prepare to spend more time securing a loan.It can take 30-60 days to secure a loan due to compliance and the new federal regulations, so start the process before you go out looking for a home. Also, realize what your credit score means in terms of interest rates and what monthly payment you can really afford.

8. The home inspection is back. Buyers today want top to bottom assessments of a home before making an offer. Sellers should do a pre-inspection of their home before putting their home on the market. You avoid surprises that way. Of course, anything you find has to be disclosed to potential buyers.

9. Sell your home before you buy. In this market, deals fall through, buyers walk away, and loans do not get approved, so do not put yourself in a position where you are paying two mortgages.

10.Work with an agent. Inventory is low in some places, but too high in others. Do you really know why? Some markets are multi-offers, all cash. Can you compete and how? In foreclosure locations, do you know the best locations and which houses are not desirable? Be careful in this market. It is too complex to do it alone.

Carole can be contacted @ www.bambooconsultinginc.com

Five signs that say BUY…

Home buyers sitting on the fence wondering if now is the right time to buy should consider five factors when making this decision: Jobs, recent sales activity, construction, mortgage availability, and anecdotal evidence. Each of these issues can help consumers make the best choice for their situation and financial circumstance.

Jobs: Although many areas of the country were deeply impacted by the recession, some areas were less affected by job loss. If employment stability is a concern, prospective buyers should review job-growth data from the U.S. Bureau of Labor Statistics at www.bls.gov. The data provided by the Bureau is approximately one month old and shows the direction of the local economy.

Recent Sales Activity: Housing inventory and sales volume should be taken into consideration while house hunting. A large inventory of homes with few actual transactions can be a negative indicator. On the other hand, if inventory is falling and transactions are rising, that is a good sign. In January, the CALIFORNIA ASSOCIATION OF REALTORS®’ Unsold Inventory Index stood at 6.7 months, up from 5 months in December 2010, but down from 5.7 months in January 2010. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

Construction: Staying up-to-date on the number of building permits issued for local builders is useful for gauging builder sentiment and the future of housing activity. The California Building Industry Association recently announced that California homebuilders pulled 2,920 total housing permits in January, registering a 5-percent decline compared with a year ago and a 56-percent decline compared with December. However, the Construction Industry Research Board is projecting 62,000 total permits will be pulled in 2011, an increase of 38 percent compared with 2010’s total of 44,893 permits.

Mortgage Availability: Home buyers hoping to be approved for a mortgage should monitor local lending patterns. Following the financial crisis, most national banks tightened lending standards; however, some local banks haven’t been impacted as much as large lenders and are more willing to lend, even for higher-priced homes.

Anecdotal Evidence: Although buyers can access home listings online, one of the best ways to monitor the local housing market is to work with a REALTOR® and gather intelligence using their expertise and guidance.


The Revised Estate Tax

The tax cuts in 2001 by Bush lowered estate taxes over 10 years. These cuts brought the existing estate tax rate from a high of 55% to 35% over a 10-year period. The 35% estate tax rate was to stay in effect through the end of 2009. Then, estate taxes were set to disappear in 2010 and finally return to pre-tax cut levels at the start of 2011.

Now, there are changes that have taken place for tax years 2011 and 2012. The new law sets the federal estate tax rate at a flat 35%. In addition to this lowered rate, there are additional benefits: The number of people affected by the estate tax are reduced as estates under $5 million are not subject to any taxation. The limit was previously $3.5 million. The $5 million estate tax exemption is now portable, which allows for easier post-death planning. After the death of the first spouse, any unused portion of the spouse’s $5 million exemption may go into the other spouse’s estate. ?The bill now increases the total lifetime exclusion for gift giving to $5 million (previously $1 million), but unifies the estate gift and generation skipping taxes. So, if a taxpayer leaves $4 million to a generation skipping trust for grandchildren at death, then $1 million would be left for exemption. If someone gives away $5,000,000 tax-free during their life, then the entire estate is taxable.

This revision also gives estates of 2010 the choice of whether to use 2010 or 2011 estate tax rules.This is important because even though in 2010 there was no estate tax, there was a change in the capital gains tax of the estate. Prior to 2010, estates got a stepped-up cost basis (value to current market) for any assets in the estate. Thus, a property bought 20 years ago for $100,000 that is worth $500,000 today, would go into the estate as $500,000. But, in 2010, it would go into the estate at $100,000 and the heirs would have to pay a capital gains tax on the difference.

Much of the success of exterior lighting hinges on its design. Hang around lighting designers long enough and you’ll hear a lot of talk about “moonlight effect.” That’s a naturalistic look that features light no more intense than that of a full moon, but still strong enough to make beautiful shadows and intense highlights.

Other techniques outdoor lighting designers use:

Highlight trees: Whether illumined from below or given presence by a light mounted in the tree itself, trees make stunning features.

Use uplights: Uplighting is dramatic because we expect light to shine downward. Used in moderation, it’s a great way to highlight architectural and landscaping features.

Have a focus: The entryway is often center stage, a way of saying, “Welcome, this way in.”
Combine beauty and function: For example, adding lighting to plantings along a pathway breaks up the “runway” look of too many lights strung alongside a walk.

Vary the fixtures: While the workhorses are spots and floods, designers turn to a wide range of fixtures, area lights, step lights, and bollards or post lights.

Stick to warm light: A rainbow of colors are possible, but most designers avoid anything but warm white light, preferring to showcase the house and its landscape rather than create a light show.

Orchestrate: A timer, with confirmation from a photocell, brings the display to life as the sun sets. At midnight it shuts shut down everything but security lighting. Some homeowners even set the timer to light things up an hour or so before dawn.

Adding safety and security: Falls are the foremost cause of home injury, according to the Home Safety Council. Outdoors, stair and pathway lighting help eliminate such hazards.Often safety and security can be combined. For example, motion-detecting security lighting mounted near the garage provides illumination when you get out of your car at night; the same function deters intruders. Motion detecting switches can also be applied to landscape lighting to illumine shadowy areas should anyone walk nearby.

Even the moonlight effect has a security function: Soft, overall landscape lighting eliminates dark areas that might hide an intruder, exposing any movement on your property. Overly bright lights actually have a negative effect, creating undesirable pockets of deep shadow.

Switching to LEDs
Once disparaged for their high cost and cold bluish glow, LEDs are now the light source of choice for lighting designers. “They’ve come down in price and now have that warm light people love in incandescent bulbs,” says Paul Gosselin, owner of Night Scenes Landscape Lighting Professionals in Kingsland, Texas. “We haven’t installed anything but LEDs for the last year.” Although LED fixtures remain twice as expensive as incandescents, installation is simpler because they use low-voltage wiring. “All in all, LEDs cost only about 25% more to install,” Gosselin says. “And they’ll save about 75% on your electricity bill.” Another advantage is long life. LEDs last at least 40,000 hours, or about 18 years of nighttime service. With that kind of longevity, “why should a fixture have only a two-year warranty?” asks Gosselin. He advises buying only fixtures with a 15-year warranty, proof that the fixture’s housing is designed to live as long as the LED bulbs inside.

The growing popularity of exterior lighting has led to innovative fixtures. Here are some bright new ideas:

Solar lighting: When first introduced, solar pathway lights produced a dull glow that rarely made it through the night. They do much better now that they are equipped with electricity-sipping LEDs, more efficient photovoltaic cells, and better batteries. Still, they have yet to measure up to hard-wired systems.

Hybrids: Porch lights now come equipped with LED lighting for all night use, and a motion sensor that clicks on an incandescent bulb to provide extra illumination as you approach the front door. Hybrids use about 5% of the power a solely incandescent fixture requires.

Barbecue light: Tired of grilling steaks by flash light? Now you can buy a gooseneck outdoor light, ideal for an outdoor kitchen.

Estimating the cost
Total outdoor lighting costs will vary according to the size of your home and the complexity of your lighting scheme. Expect to pay about $325 for each installed LED fixture. LEDs also require a transformer to step the power down from 120 volts to 12 volts, running about $400 installed.

A motion detector security light costs about $150 installed. Porch lights and sconces range from $100 to $250 installed, depending the fixture and whether running new cable is necessary.

Contractor-installed outdoor lighting for an average, two-story, 2,200 sq. ft. house might add up as follows:

7 fixtures to cover 100 feet of LED pathway lighting: $2,275
Transformer: $400
4 LED uplights to dramatize the front of the house: $1,300
2 LED area lights for plantings: $650
2 motion detector security lights: $300
Total cost: $4,925

Thanks to Dave Toht for this article he has written or edited more than 60 books on home repair and remodeling, including titles for The Home Depot, Lowe’s, Better Homes & Gardens, Sunset, and Reader’s Digest. A former contractor, Dave was editor of Remodeling Ideas magazine and continues to contribute to numerous how-to publications.

The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) recently launched a new program that allows home sellers to purchase mortgage protection coverage and offer it as an additional incentive to home buyers who purchase their home.

• The “Home Payment Protection Program” (HPPP) is available through California REALTORS® who offer it to sellers at the time the property is listed. HPPP is optional, is paid for by the seller, and costs either $200 or $275, depending on the amount of coverage the seller elects to purchase.

• The program covers both first-time and repeat buyers for 12 months from escrow closing. If the home buyer loses his or her job as a result of a layoff during the qualified time period, HPPP will pay the buyer up to six monthly payments of up to either $1,000 or $1,500, depending upon the level of coverage the seller chose at the time of the listing.

• The payment for HPPP is made at the time of closing, per the seller’s escrow instructions. HPPP remains on the property for as long as it is listed with the REALTOR® under the original listing contract. The buyer cannot renew, extend, or enhance the coverage under the HPPP, nor purchase it independently.

• Sellers who would like to offer the Home Payment Protection Program should ask for an application from their REALTOR®. REALTORS® can find information about the program and an application at www.cynosurefinancial.com/car.

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