Cash-For-Short Sale

From HW:

CitiMortgage, the mortgage servicing arm of Citigroup is paying borrowers an average $12,000 after completing a short sale this year alone.

Justin Rand, the senior vice president of loss mitigation at the bank, said servicers are putting more of an emphasis on streamlining the process and became more proactive when pursuing a short sale ahead of foreclosure. The short sale process in 2009 took an average 120 days from listing to close, but by reaching to borrowers instead of waiting for them to ask the bank, short sales now take an average 83 days to complete, Rand said.

“For Citi-held portfolio loans today, we have a little over 16% of delinquent loans in a short sale program,” Rand said, adding that increased from roughly 4% two years ago.

Not only are the timelines shrinking to complete these deals, but the incentives paid to qualifying borrowers – again only on loans owned by Citi – increased in recent years as well.

In early 2009, Citi offered an average $1,500 to qualifying borrowers. That went up to between $3,000 and $5,000 in 2010 and finally up to an average $12,000 in 2011, Rand said.

“Incentives will be offered to customers experiencing financial hardship who need funds to proceed with the short sale,” a Citi spokesman said. “The amount, which is agreed upon up front, varies according to the borrower’s individual circumstances and loan characteristics. It is disbursed to the homeowner when the sale is completed.”

The key to a successful short sale, just like modifications, is the timely collection of financial documents. Regulators helped move the process along with guideline changes to programs like the Home Affordable Foreclosure Alternatives initiative, which lessened the amount of documents required.

“It took us about 30 days to collect documentation in 2009 to now less than 10 days,” Rand said. “A lot of the time, for seriously delinquent loans, all we need is just a letter of authorization from the homeowner.”

David Sunlin, the operations executive for short sales at Bank of America was on the same panel as Rand. He said the entire industry is becoming more proactive. BofA completed more short sales than REO every month for the last year and a half. The short sale department at BofA grew from 150 people to now over 3,000. Each employee handles roughly 75 cases.

“We’re past the point where we’re bumbling around losing files,” Sunlin said.

Rand said the big shift began in 2009 as the Treasury Department was putting together plans for the HAFA, which would launch in April 2010.

“In 2009, we started a proactive approach, reaching through MLS services and reaching out to real estate agents and customers with underwater mortgages, distressed loans,” Rand said. “We’re not going to turn anybody away if the short sale meets the net requirement we’re looking for.”

NSDCC Snapshot

“How’s the market?”

It depends where you are looking!  Consider these three popular areas in North SD County Coastal:

Carlsbad, 92009 detached:

Encinitas, 92024 detached:

Carmel Valley, 92130 detached:

In SE Carlsbad and in Encinitas, buyers have been reluctant to chase the higher list prices. 

But in Carmel Valley, people are more willing to pay what it takes to get in!

Foreclosures Look Range-bound

Here are the recent foreclosure stats for San Diego County. 

It appears that the banks/servicers have found a steady rut for their foreclosure production:

San Diego County Filings

It’s hard to believe that NODs are down 15%. 

San Diego County Trustee-Sale Results, Monthly

It’s doubtful that they’ll deviate from the plan if it is working?  They declare that they are doing more short sales in order to help people avoid foreclosure, and the government gets off their back. 

Meanwhile, how’s that free-rent program?

Average Free Rent, days

Palomar Airport Expansion?

From the sddt.com:

San Diego County’s supervisors are considering whether to consider lengthening the runway at the McClellan-Palomar Airport in Carlsbad.

The board voted Tuesday to direct the county’s chief administrative officer to report back in 90 days on the scope, cost and time needed to conduct a study on whether the extension would be feasible.

Palomar Airport, which is county-owned, covers 487 acres and has one 4,897-foot runway. Stakeholders in the airport say the runway is not long enough to satisfy their needs to keep up with airport expansions. The county added a new terminal, parking area and restaurant to the airport using Airport Enterprise Funds and Federal Aviation Administration grants, and has attracted $100 million in private investments from airport tenants and lessees.

Supervisor Bill Horn said these lessees and airport stakeholders, along with “key members” from Carlsbad, asked the county to consider the runway expansion.

The airport is “an economic driver for North County and a crucial part of the regional aviation system,” Horn said in his agenda item for the board.

An economic vitality study on the airport in 2008 had “staggering” results, he said, showing about $116.6 million in business revenue came from airport industries in the Palomar Airport area and $61.8 million in business sales came from visiting passengers.

The airport also employs 360 people, making it one of the top 20 employers in Carlsbad, Horn said.

However, there are multiple potential environmental and engineering challenges involved in extending the runway, including the fact that its expansion would cover an old landfill, which has rarely been done before, according to Horn.

Lautner’s Chemosphere House

With its octagonal design that’s part Jetsons, part Bond, John Lautner’s Chemosphere House is considered a masterpiece of California Modernism. Perched on concrete poles, the home is reached via an inclined cable railway. Wiki link.

Lautner ingeniously solved the problem of the 45-degree slope by siting the entire house off the ground atop a 50-foot (15 m) concrete pillar that rests on a massive concrete pad 20 feet (6.1 m) in diameter and 3 feet (0.91 m) thick, buried into the rocky hillside. Halfway up the pillar, eight angled steel “spokes” — bolted onto bosses formed onto the surface of the column — splay out and up, supporting and stabilizing the outer rim of the house, and the center of the pillar also houses the utility cables and pipes.

Lautner provided access from the driveway up the steep hillside by installing a funicular, which terminates at a short sloping gangway that leads up to the entrance. The house is octagonal in plan and lozenge-shape in section, and is often described as a “flying saucer”.

More Short Sales Than REOs

From HW:

Bank of America completed more short sales than it unloaded previously foreclosed homes every month for the last year and a half.

In May, BofA completed roughly 9,000 short sales compared to 7,000 REO, said David Sunlin, the bank’s real estate management executive. With the introduction of the Home Affordable Foreclosure Alternatives program in April 2010, lenders received the first guidelines for these transactions.

Since then, banks find it easier to collect necessary documentation and reduce the time it takes to close these transactions. Recent guideline changes to HAFA could push numbers higher in 2011.

BofA completed more than 95,000 short sales in 2010, more than double the prior year, Sunlin said.

“HAFA is dead on. It’s a lot easier to qualify now for HAFA than it was in 2010. All I need is a hardship affidavit and one water bill. We’re trying to make it as easy as possible,” Sunlin said.

Justin Rand, Citigroup senior vice president of loss mitigation, said his bank used to take an average 120 days from when the property was listed to when it closed. That since dropped to 83 days.

There remain some setbacks, however. Real estate agents in the audience at HousingWire’s REO Expo in Fort Worth, Texas, complained of having an offer from a buyer at what the property listed at, only to lose the deal when the bank’s appraisal came in afterward. Sunlin suggested these buyer-side agents send in their own information with the servicer for a better chance of reconciling the appraisal.

“Valuation is an inexact science. The offer may be a full to list, but not to the appraisal. When you submit your own short sale deal, send your own BPO,” Sunlin said.”If you put your facts out there, you can at least make your case.”

Other agents said those working on the other side of the deal do not send in offers or document packages correctly, regardless of any certification. Both Sunlin at BofA and Rand at Citi said their banks are considering recommending agents to the homeowner.

“We would love to get into a system where we’re recommending agents for a short sale,” Sunlin said. “But (the) homeowner has their rights, they’re going to select who they want to select, and that’s going to be the biggest constriction.”

As lenders continue to tweak imperfections, demand will rise.

Chris Saitta, CEO of Equator, which provides a technology platform to process short sales for the largest lenders, said servicers completed short sales on 4% of their portfolios to 16% today.

“There is a steady but slow increase in REO, which equals a steady, slow increase in short sale,” Saitta said.

More Multi-Family Predicted

Hat tip to DB for sending this along, from the latimes.com:

UCLA forecasters have seen the future of California’s housing market, and it looks like this: more apartments near the coast, fewer McMansions in the desert.

That prediction is based on several factors, including expectations that rising fuel prices will encourage people to live closer to jobs along the Southland coast and in the San Francisco Bay Area.

The state’s population is also skewing younger, meaning there will be more demand for urban rental units and less demand for suburban cul-de-sacs, according to the quarterly economic forecast released Wednesday by UCLA’s Anderson School of Business.

“The incremental demand for housing is moving more into multifamily housing,” said Jerry Nickelsburg, senior economist with the forecast. “Many of the younger generation have been buffeted by the boom and bust in the housing market, and see value in living closer to work.”

That’s bad news for the state economy, however, for two reasons. One is that construction of multifamily homes requires less labor than construction of single-family homes. Second, areas such as the Inland Empire and Central Valley that were hit hardest by the housing bust won’t get a construction boom to help pull them out of the economic doldrums.

This means “there is an even larger structural unemployment problem in California than we originally thought,” Nickelsburg wrote in the forecast. “Not only do we have excess construction, real estate and support skills, but some of those that will be demanded will be in the wrong geography.”

California won’t start adding a significant number of building permits until 2013, forecasters say, which is one of the reasons the state’s unemployment rate will stay above 10% until the middle of that year. Nonfarm employment in the state won’t return to pre-recession levels until 2014, and construction employment won’t reach those levels until at least 2021.

“In a typical recovery, you get a bounce-back in housing and hiring of a lot of construction workers,” Nickelsburg said in an interview. “We’re not seeing that this time, which definitely slows the recovery, and slows economic growth.”

(more…)

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