An excerpt from Realty Check on cnbc.com:
“March could be the month where we begin to see the return to the kind of levels of foreclosure activity we would expect given the underlying conditions,” says RealtyTrac’s Rick Sharga. “We actually did start to see increased levels of foreclosures in the non-judicial states in particular California was up, Nevada was up by about 35%. Even some of the states like Florida that had foreclosure activity pretty much seize up show a little bit of forward movement in foreclosures. So the dam might be starting to burst.”
Diana: It’s a slow burst, which means that instead of a big spike, we are going to see foreclosures plateau at a high level for a prolonged period of time. That will only put more downward pressure on home prices everywhere. About three quarters of the top 200 markets in the nation saw their foreclosure activity rise at the end of 2010, year-over-year, so this is not just relegated to the troubled states we’re always talking about, like California, Florida, Arizona and Nevada.
You can argue all you want about new regulations to safeguard the market in the future and pricey penalties to pay for the wrongs of the past, but as foreclosure activity begins to percolate back up again against the backdrop of a still very weak housing market, the industry needs to focus on the present and what exactly they can do to jumpstart home sales and loosen up credit.
Foreclosures in San Diego County are down over the last few weeks, and cancellations went ballistic. Because she doesn’t offer any ideas to jumpstart home sales and loosen up credit, let’s give her a hand.
How to Jumpstart Home Sales:
Publicize the Mortgage Underwriting Guidelines. If people knew the rules, they’d be more interested in trying them on for size.
Publish hyper-local sales data. With precise, relevent data, both buyers and sellers will make better decisions.
Educate sellers about pricing. They are winging it – give them a hand!
How to Loosen Up Credit
Have the cost of mortgage insurance be based on credit score/loan quality.
Have a no-doc EZ-qualifier loan with ample down payment. Whether it’s 30%, 40% or 50% down payments, have something available at regular interest rates for those with high credit scores only.
Publicize the local grants available, and other first-time homebuyer programs.
If they used a few million dollars from the latest servicer penalty to effectively advertise all of the above, we might get somewhere!