Tuesday, January 19, 2010

Short Sale 'Fraud', SoCal Home Sales, FHA to Tighten Standards

by Calculated Risk on 1/19/2010 04:30:00 PM

A few articles of interest ...

  • From Diana Olick at CNBC: Short Sale 'Fraud' Follow. This is a followup to her earlier article: Big Banks Accused of Short Sale Fraud

    This alleged activity by banks - paying 2nd lien holders without proper disclosure - appears outrageous. Based on Olick's reporting, this practice appears to be widespread. Kudos to Olick and hopefully the regulators are reading.

  • From DataQuick: Southland home sales, median price up over last year. As DataQuick notes the median price increase was due to a change in mix - as always I recommend ignoring the median price.
    Southern California home sales in December remained above year-ago levels for the 18th consecutive month, bolstered by gains in many mid- to high-end communities. \
    The December sales tally was the highest for that month since 24,209 homes sold in December 2006, but it was still 11.2 percent below the average for a December – 25,143 sales – over the past 22 years.
    December’s foreclosure resales remained well below peak levels but were still a large force in the market, edging higher than the prior month for the first time since last February. Foreclosure resales – houses and condos sold in December that had been foreclosed on in the prior 12 months – were 39.6 percent of resales, up from 39.0 percent in November but down from 53.5 percent in December 2008. They hit a high of 56.7 percent last February, then tapered or leveled off month-to-month until last month’s uptick.
    Government-insured FHA loans, a popular choice among first-time buyers, accounted for 39.6 percent of all home purchase mortgages in December.

    Absentee buyers – mostly investors and some second-home purchasers – bought 19.2 percent of the homes sold in December. Buyers who appeared to have paid all cash – meaning there was no indication that a corresponding purchase loan was recorded – accounted for 24.9 percent of December sales, based on an analysis of public records.
    The market is still mostly first time homebuyers and investors.

    And the high percentage of FHA buyers is a good lead into the third story ...

  • From Nick Timiraos at the WSJ: Souring Mortgages, Weak Market Force FHA to Walk a Tightrope
    Souring FHA-insured mortgages are threatening the agency's finances. Congress is pressuring [FHA commissioner, Mr. Stevens] to tighten the easy-money standards that once helped people like him, and he is expected to announce revisions as early as this week.