Foreclosures Climb 81% in 2008, Says RealtyTrac Report

By: Steve Stecyk and edited by Nancy Girgis

Home foreclosure activity increased dramatically in 2008 compared to the previous year, according to RealtyTrac’s 2008 U.S. Foreclosure Market Report.

There were 3,157,806 foreclosure filings - default notices, auction sale notices and bank repossessions in 2008, marking an 81% increase from 2007. According to RealtyTrac, 1.84% of all U.S. housing units received at least one foreclosure filing during the year, an increase from 1.03% in 2007.

Recent laws enacted by the State of California, which require lenders to provide a written 30-day notice of the intent to initiate a foreclosure, has done little to stem foreclosures as California posted the highest state total foreclosures in the U.S. with 523,624 filings in 2008. According to the report, foreclosures activity increased 110% from the prior year.

“Clearly the foreclosure prevention programs implemented to-date have not had any real success in slowing down this foreclosure tsunami,” said James J. Saccacio, chief executive officer of RealtyTrac.

Florida posted the second highest state total foreclosures in 2008 as 385,309 Florida households received a foreclosure filing, a 113% increase from the prior year.

Arizona total state foreclosures ranked third overall with 116,911 properties receiving a filing in 2008, a 203% increase from 2007.

Nevada led the pack with the highest foreclosure rate for the year as 7% of homes, or one in every 14, receiving foreclosure notices. This marks a 126% increase over the previous year.

Foreclosure activity for the month of December were also released. There were 303,410 fillings in the month, a 17% month-over-month rise and a 41% annualized increase.

The RealtyTrac Monthly U.S. Foreclosure Market Report compiles the total amount of properties with at least one foreclosure filing reported during the month. The RealtyTrac report includes properties filed in all three stages of foreclosure; default, auction and bank.

Appraisers Blame Countrywide for Lost Income

Blacklisted appraisers claim

A group of appraisers has filed a class-action lawsuit against Countrywide Financial Corp. claiming the mortgage giant was responsible for damaging the business of thousands of appraisers.

Capitol West Appraisers filed the lawsuit today in U.S. District Court for the Western District of Washington against the Calabasas, Ca. based company, according to an announcement from the plaintiffs’ law firm, Hagens Berman Sobol Shapiro.

The plaintiffs claim that appraisers who don’t come in at values expected by Countrywide are blacklisted. The field review list reportedly included 2,000 blacklisted appraisers as of Aug. 28.

“Capitol West Appraisers refused to succumb to Countrywide’s alleged pressure to compromise its integrity and independence and refused to commit fraud and violate federal and state laws,” the press release stated. “As a result, the company made the field review list.”

The Boise, Idaho, appraisal firm claims that since it has landed on Countrywide’s appraiser blacklist, its revenues have declined by $8,000 monthly.

Countrywide’s actions have also allegedly caused real estate prices to be distorted.

Thousands of appraisers have suffered damages as a result of being blacklisted, the statement said. Lawyers for the plaintiff hope to include all of the blacklisted appraisers as part of the class.

However, the announcement does not acknowledge that even a single appraiser may have been blacklisted because of appraisal deficiencies. And no mention was made that severely declining originations may have impacted the appraisal business.

The appraisal industry has largely blamed originators — and not appraisers — for fraudulent appraisals with inflated fair market values. Appraisers claim they inflated values because they feared they would lose business and income if they didn’t.

Bank of America Corp. spokeswoman Eloise Hale told MortgageDaily.com that the company had not yet been served and could not comment.

Capitol West Appraisals LLC, on behalf of itself and all other similarly situated, Plaintiff, v. Countrywide Financial Corp., Countrywide Bank N.A., Countrywide Home Loans Inc., Landsafe Inc. and Landsafe Appraisal Services Inc., Defendants.

Case No. C08-1520 RAJ, Oct. 16, 2008 (U.S. District Court, Western District of Washington)

TARP Gives Hope to Mortgage Sector

Combined with a recent improvement in subprime performance, the $700 billion plan for the U.S. Treasury Department to buy up mortgage assets has the potential to significantly help the mortgage business.

As the secondary market for nonconforming loans froze up last August, both jumbo and Alternative-A lending became scarce. Today, Alt-A loans are virtually impossible to find and subprime programs have disappeared

All that remains are conforming programs — which came close to stalling prior to the government’s seizure of Fannie Mae and Freddie Mac, FHA loans and low loan-to-value hard-money loans.

FREE CREDIT TIPS

Free Tips on How To Raise Your Credit Score

By: Michael Fleishour

The Basics

Before you start working on getting or driving up your credit score, you need to at least learn the basics of credit and how it actually works.  You need to know what a credit score really is, how it is scored by the bureaus XPN (Experian), TU (Trans Union), EFX (Equifax) and why credit is so important to not only you, but everyone around you as well, trying to live their day to day lives.

Mortgage Companies, Lenders, Vendors, Banks and other Institutions certainly know what type of information they getting or looking for from a credit score, but by knowing this information all by yourself will not only help you better see how your everyday financial decisions in life may have an impact on your financial future of what these institutions get of you through your credit score, but also to be able to better focus your efforts on that ‘better deal’ that you truly and most likely qualify for.  A few simple tips are all you need in order to start knowing and understanding the basic principles of Credit.

Stay Tuned for tip # 1

Real Estate

America’s Fastest-Selling ZIP Codes

By: Lauren Sherman

As credit tightens, job losses and foreclosures mount and stocks see-saw, getting a mortgage is the last thing on many Americans’ list of things to do this year.

That’s not the case for home buyers in Cold Spring Harbor, N.Y. (population: 4,975). This quaint town on the North Shore of Long Island–with a Main Street that’s only one-fifth of a mile long–is popular among buyers, and that’s despite a $100,000 year-over-year median home sale price decrease to $1.2 million. Home sales there jumped 65.63% last year; there were 53 more from July 2007 to June 2008 than the same period a year prior. If you’re looking to stay put, and have the money, it’s a good buy; experts believe homes in this area will appreciate.

In Depth: 10 Spots Where Homes Are Selling Fast

Other neighborhoods are appreciating and selling well. That is, if you’re willing to pay up. The median home sale price in most of these areas is more than $700,000, which puts them in the richest 1% of ZIP codes in the country. They include 10069, a part of New York’s Upper West Side, 94111 in San Francisco, Cold Spring Harbor’s 11724 and Fisher Island, Fla., ZIP 33109.

Wealth matters here. If buyers aren’t paying cash for these homes upfront, they likely have enough net income to secure a mortgage, which is rare during this tight credit period. Related Stories

“The areas that have been insulated from the [mortgage meltdown] tend to have high-income residents,” says Walter Maloney, a spokesman for the National Association of Homebuilders (NAHB), a Washington, D.C.-based trade organization.

Behind the Numbers

To determine our list of the 10 best ZIP codes to buy a home, we looked at the percent increase in home sales from July 2007 to June 2008 in the top 500 richest ZIP codes in the country. This data was provided by First American CoreLogic, a Santa Ana, Calif.-based provider of real estate property and ownership information.

It’s no surprise that Manhattan ZIP code 10069 tops our list. This patch of the city’s Upper West Side–which falls between the Henry Hudson Parkway and West End Avenue and between 60th Street and 70th Street–has seen its home sales double in the last year to 233. That’s mostly due to Riverside Boulevard’s Trump Place, a 16-building, 5,700-unit apartment complex set to be completed in 2009.

But that’s just one building, which means that once all the units are sold, the percent increase in homes sales in this ZIP code–108.04% from July 2007 to June 2008–is likely to slow down. The area remains desirable, however, for homeowners looking for a long-term investment. It’s what economists call proximity value: A condo that’s located near several other very expensive properties–like the Trump units, which cost upward of $1 million for a one bedroom–will hold its value better than one on the fringe of a metro area.

Fisher Island, a man-made resort island off the coast of Miami Beach that represents ZIP code 33109, is one of the only spots in the state of Florida that has stayed afloat during this real estate meltdown. While the median sale price of a home over the last year was $3.85 million, that number increased by half a million from 2007. Unlike some pricey spots that see an influx of buyers and then a severe dip in interest, the secluded Fisher Island has remained exclusive for an extended period because of its limited space. There are just 218 households on the private, 216-acre island. According to the U.S. Census Bureau, the area boasted the highest per capita income of any U.S. area in 2000.

What’s happening to home sales in your neighborhood? Weigh in, Post your thoughts in the Reader Comment section below.

Other second homes spots like Pebble Beach, Calif.–ZIP code 93953 –and Cayucos, Calif.–ZIP 93430–are also faring well.

In the central California resort town of Cayucos, you get more bang for your buck than in, say, Malibu, which is farther south. In Cayucos, the year-over-year change in home sales was 37.5%; the median sale price is $833,500. That’s because along with a steady appreciation–$39,000 since 2007–the average list price per square foot in the area is just $886, according to local real estate agent Kellie Williams. In Malibu, it’s about $1,359 per square foot.

Across the country, home sales are expected to slow considerably given the financial crisis of the last few weeks. The best bet for sellers who are able to do so? Sit on your investment until the downturn ends.

In Depth: 10 Spots Where Homes Are Selling Fast