Friday, December 11, 2009
Lenders Defend Numbers as Lawmakers Attack HAMP Progress
At a House committee hearing this week, lenders advised lawmakers to prepare for low trial-to-permanent conversion numbers - ahead of the Treasury's release of the Home Affordable Modification Program (HAMP) report card on Thursday. A Chase official told the panel that only 20 percent of its borrowers in trial periods have made their required payments and filed the correct paperwork for a permanent modification. A Bank of America executive testified that it has only 15,000 homeowners who are eligible for a permanent mod and provided the necessary documentation.
Friday, December 4, 2009
Investor Report: New Study Indicates Investor Heavy Market
We're nowhere near boom-time numbers, but real estate investors are responding to rock-bottom prices and plunging into their local markets at more than double the rate they did barely seven months ago.
That's the finding of a new study based on interviews with a nationally-representative sample of more than one thousand property buyers.
The quarterly "homeownership survey" by realty information firm Move.dot.com found that one of every eight buyers last month was an investor - someone looking to acquire property at a favorable price, planning to fix it up, rent it out or resell later for a profit.
The investor ratio is up from just one in 20 buyers as recently as March, and represents a huge turnaround in Americans' attitude toward real estate.
Buyers who target foreclosure sales are particularly active right now, according to the study, and account for 25 percent of all consumers looking to purchase houses.
Among these foreclosure buyers, fully 42 percent are investors. Thirteen percent say they're buying properties to convert into rentals. Eleven percent intend to rehab them and sell them as quickly as possible.
And interestingly, 17 percent say they plan to let a family member live in them for an extended period of time -- until market values have rebounded enough to sell the house at a substantial profit.
How good a deal do foreclosure investors and other buyers think they're getting on house prices? Very good indeed: Nearly two out of three expect to acquire houses for at least 20 percent below the current market value of the property. Thirty eight percent expect at least a 25 percent discount below actual market value.
So these investors essentially anticipate booking a paper gain of 20 percent or more on the day they close. They also tend to be fairly optimistic about where prices are headed in their local markets.
Seventy three percent expect the houses they buy to appreciate by ten percent or more in the coming five years. Twenty eight percent expect a 20 percent rate of appreciation.
More than 42 percent of buyers are making their investments now -- rather than at some future time -- because they believe house prices have pretty much hit bottom for this cycle and they want to take advantage of today's bumper crop of foreclosure opportunities.
Now, nobody can predict for sure where prices are headed … and there's always risk in real estate.
But in most parts of the country, today's home prices - especially when you're buying in a distress situation -- probably represent a safer deal than they've been in years, assuming proper due diligence by the investor.
by Kenneth R. Harney
Published: November 27, 2009
That's the finding of a new study based on interviews with a nationally-representative sample of more than one thousand property buyers.
The quarterly "homeownership survey" by realty information firm Move.dot.com found that one of every eight buyers last month was an investor - someone looking to acquire property at a favorable price, planning to fix it up, rent it out or resell later for a profit.
The investor ratio is up from just one in 20 buyers as recently as March, and represents a huge turnaround in Americans' attitude toward real estate.
Buyers who target foreclosure sales are particularly active right now, according to the study, and account for 25 percent of all consumers looking to purchase houses.
Among these foreclosure buyers, fully 42 percent are investors. Thirteen percent say they're buying properties to convert into rentals. Eleven percent intend to rehab them and sell them as quickly as possible.
And interestingly, 17 percent say they plan to let a family member live in them for an extended period of time -- until market values have rebounded enough to sell the house at a substantial profit.
How good a deal do foreclosure investors and other buyers think they're getting on house prices? Very good indeed: Nearly two out of three expect to acquire houses for at least 20 percent below the current market value of the property. Thirty eight percent expect at least a 25 percent discount below actual market value.
So these investors essentially anticipate booking a paper gain of 20 percent or more on the day they close. They also tend to be fairly optimistic about where prices are headed in their local markets.
Seventy three percent expect the houses they buy to appreciate by ten percent or more in the coming five years. Twenty eight percent expect a 20 percent rate of appreciation.
More than 42 percent of buyers are making their investments now -- rather than at some future time -- because they believe house prices have pretty much hit bottom for this cycle and they want to take advantage of today's bumper crop of foreclosure opportunities.
Now, nobody can predict for sure where prices are headed … and there's always risk in real estate.
But in most parts of the country, today's home prices - especially when you're buying in a distress situation -- probably represent a safer deal than they've been in years, assuming proper due diligence by the investor.
by Kenneth R. Harney
Published: November 27, 2009
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