With prices projected to drop another 15%+ over the next year…the likely hood is that if you purchased a home in the last few years…you paid too much.

This post by Zillow gives specifics as to the amounts over paid by today’s home buyers.

If your a buyer…and you can wait to purchase…then wait.  We have another 50 to 10 years of declines still on the horizon.

Buy stocks!

Those who purchased their homes post-housing bubble are guilty of overpricing their homes, according to a new survey from Zillow.

The company noted that current home sellers who purchased their homes in 2007 or later are overpricing their properties by an average of 14.1 percent.

Conversely, those who purchased pre-bubble, from 2002-2006, have only priced their homes 9.3 percent above current market value.

Meanwhile, those who purchased before 2002 have listed their homes by an average of 11.6 percent above market value.

“Post-bubble buyers seem to believe they escaped the worst of the housing recession, as evidenced by how they price their homes today,” said Zillow Chief Economist Dr. Stan Humphries,” in a release.

“But 2006 was just the beginning of the housing recession, and it is continuing in earnest to this day. That means that even people who bought after the bubble burst need to break out the pencil and paper and do serious research into what has happened in their market since they first bought their home, whether it was four years ago or six months ago.”

Humphries added that listing homes above the current market value causes them to stagnate, leading to a more bloated inventory, which further drives homes prices down.

The takeaway is that home prices remain very fragile, and haven’t done much more than fall or move sideways since the crash.

Even those who didn’t see their home price drift lower probably don’t have the required home equity to sell, factoring in agent commissions.

I guess this all begs the question, when is it going to be the right time to buy?

It’s taken three years to process $1 trillion in foreclosed homes. At that rate, it will take more than five years for the amount of each individual’s mortgage debt, relative to their income, to get back to levels that were the norm in this country before the housing bubble, according to a report from TrimTabs Investment Research.

“For the debt-to-income ratio to return to 65 percent, mortgage debt needs to fall from its current level of $8.9 trillion to $6.4 trillion to $7.4 trillion,” Madeline Schnapp, TrimTabs director of economic research lays out very clearly in a report to clients today. “At the current pace, it could take four to six more years to work through the current and expected backlog of delinquencies.”

One problem with this math could be that Schnapp assumes there will be very little income growth because of high unemployment so the only way to get back to normal is to lower the debt side of the equation through foreclosures. However, she’s also assuming 60 to 65 percent is the “sustainable” amount of debt to income an average homeowner can handle and many believe that will still have to come down even further. Either way, you’re left with at least a five-year slog, according to many economists and investors.

“It may take longer than 4-6 years in my opinion to work through the delinquencies,” said Simon Baker, CEO of Baker Avenue Asset Management. He cited the stall in the foreclosure process taking place in the court system as banks are forced to prove they actually own mortgages that changed so many hands during Wall Street’s securitization process.

Earlier this month Massachusetts highest court called seizures of two homes byU.S. Bancorp and Wells Fargo invalid because the banks didn’t have the proper documentation at the time of the of the foreclosure.

“Sloppy paperwork and government policies that slow foreclosures and allow banks to postpone losses are only delaying the necessary adjustment in the housing market,” wrote Schnapp in her report. “The faster home prices reach a market clearing level, the faster the housing market will boost the economy.”

Several banks halted foreclosures temporarily last year over the so-called robo-signing scandal where delinquency records were not properly analyzed but instead processed in mass quantities by computer. Bank of America said this week that it had not only halted foreclosures back in October, but also notices of default (the first part of the foreclosure process) as well. This means that the foreclosure process is even more backed up than previously feared.

“The era of deleveraging is still in first half,” said Steve Cortes of Veracruz Research. “For this reason, the Fed’s efforts to inflate the economy are not working. The effects of rising commodity prices are more than offset by the deflationary forces of deleveraging, especially in property arena, where a double dip is already a reality in many cities, and soon will be nationally.”

The latest Standard & Poor’s/Case-Shiller data showed that housing prices fell again across most of the major cities, with eight markets such as Las Vegas and Miami setting new lows since the housing crisis. Data released today showed a much higher than expected jump in weekly jobless claims, dampening hopes of an increase in wages anytime soon.

“We do not expect a true turn in home sales to occur until it becomes clear that the unemployment rate has peaked and is on a steady downtrend,” said Michelle Meyer, an economist for Bank of America Merrill Lynch, in a report to clients. “In addition, the turn in new home sales should be slower than that of existing homes given the lure of deeply discounted foreclosures.”

1. Foreclosed Properties…Increased to $41.5 in Q1 ’10 up 12.4% from previous quarter.
2. Shadow inventory up 9.1% in Q1 ’10 to $78.6 BILLION
3. Morgna Stanley states that for the market to clear it’s inventory of Shadow Inventory…it would tkae almost 4 years…or 47 Months!

Great time to be in the Real Estate Market…lots of opportunity!

Foreclosed properties held by US banks reached $41.5bn in Q110, a 12.4% increase from the previous quarter, according to data analysis firm SNL Financial.

The amount of foreclosed properties jumped from $36.9bn at the end of 2009. At the end of the first quarter in 2008, that number was $11.7bn. Andrew Schukman, an analyst at SNL Financial said that the amount of one-to-four family properties in some stage of the foreclosure process (and not yet an REO) reached $78.6bn in Q110, up 9.1% from the end of last year.

The amount of REO property held by the banks is also known as the “shadow inventory” of foreclosures. According to Morgan Stanley, it would take 47 monthsfor the market to clear the roughly 7.5m first-lien mortgages in danger or already in foreclosure.

REO assets took up 0.3% of commercial and savings bank balance sheets in Q110, up from 0.1% in Q108. While the volume of REO continues to grow, the type of real estate being taken back has changed. According to SNL Financial data, 40% of the total amount of REO in the US is construction and land development properties, up from 24.3% in Q108. One-to-four family REO fell to 28.45, compared to 44.5% in Q108.

Commercial REO made up 18%, while multifamily properties accounted for 6.1% of all REO.

BREAKING NEWS!

 FREDDIE MAC is stepping up with the FREDDIE HAFA like program…on the footsteps of It’s “sister” Fannie Mae who released it’s guidelines last night.

The highlights:

• Sellers get $3,000.00 for Moving Expenses
• Servicers get $2,200.00 for “playing along” with a Short Sale.
• Servicers are also givin $1,500.00 for successful DIL.
• Subordinate Liens are to share up to $6,000 …that’s your HELOCS and 2nd lien holders
• And it begins August 1st

Details below for your entertainment:)

*******************************************************************************

In a mortgage seller/servicer bulletin released Tuesday, Freddie outlined the guidelines for HAFA, a subset of the Making Home Affordable Modification Program (HAMP). It provides financial incentives to servicers and borrowers who pursue a short sale or a deed-in-lieu of foreclosure. The program, along with Fannie Mae’s version, mirrors the main HAFA program, which the Treasury Department rolled out in April.

The GSE HAFA programs take effect Aug. 1, 2010, but servicers are allowed to use HAFA immediately, Freddie said. Under the guidelines, servicers must first consider a borrower for a HAMP workout plan and conduct other home retention workout options before considering the borrower for HAFA.

According to the bulletin, once all other home retention workout options have been exhausted, eligible borrowers must be considered for a HAFA short sale. If the borrower is eligible for and agrees to a HAFA short sale, but the mortgaged property does not sell within the HAFA marketing period, the servicer may offer the borrower a HAFA deed-in-lieu of foreclosure, with Freddie Mac authorization.

Servicers are eligible for a $2,200 cash incentive for each completed short sale and $1,500 for each completed deed-in-lieu. Borrowers are also eligible for $3,000 to assist with relocation costs.

In addition, Freddie said it does not require or accept cash contributions or promissory notes from the borrower. Subordinate lien holders must also agree to release all liens without promissory notes or contributions from the borrower.

The Soldiers’ and Sailors’ Civil Relief Act of 1940 (SSCRA) was updated and amended in 2003 by President  Bush.  This Act was created to protect our Fellows in Arms during their “Active Service”.

Many of our soldiers we’re non-active in the National Gaurd or Reserves. When called to duty, they leave jobs behind.  T

What does the SSCRA accomplish? read Below…We are featured in this article:

LASplash.com: Home

Military Family Homes Foreclosed?

By Brian Standly

(Los Angeles, CA) May 4, 2010

Men and women serving in the United States military have protection against foreclose on their homes.

When we think of our men and women serving in today’s military, we may think of that young person who has just graduated high school or college. Enduring basic military training, and learning a demanding skill to take to the battle field. Those individuals have dedicated a part of their lives to protect us from the threats of our enemy’s.

Needless to say these brave individuals have met the demands made of them, and are committed to becoming a successful soldier in the United States military.

There is however an often overlooked area of concern among these homeland protectors. Quite often these soldiers have families and a mortgage to deal with. Not only is a soldier concerned about returning home safely to their families, the soldier is also concerned about the roof over their heads while they are on active duty or deployed overseas.

Kim Darney, Platinum Real Estate, dedicates her efforts on assisting Military Personnel in their housing needs: “With many of today’s active members in a role of Reserves or National Guard, the thought of making their mortgage payments on military personnel’s wages may leave our servicemen or women a little short each month. Many members of our Active military have secured mortgages based on the income of their “non-active” military careers such as business executives, Attorneys, Doctor’s, etc…”

Under the little known provision of the Soldiers’ and Sailors’ Civil Relief Act of 1940 or SSCRA, our fighting men and women are protected

from many of these stressful concerns. One area that is prevalent today is that of mortgage foreclosure on trust deeds that were secured prior to active duty.

The SSCRA explicitly states (50 U.S.C. App. § 532 P.3) that:
• “No sale, foreclosure, or seizure of property for nonpayment of any sum due under any such obligation, or for any other breach of the terms thereof, whether under a power of sale, under a judgment entered upon warrant of attorney to confess judgment contained therein, or otherwise, shall be valid if made during the period of military service or within three months thereafter, except pursuant to an agreement as provided in section 107 [App. § 517], unless upon order previously granted by the court and a return thereto made and approved by the court.”

What does this mean?

Darney explains:
1. “Military personnel are protected under the regulation enacted by the SSCRA from any and all foreclosure activity on their homes that were owned prior to their “active” status in the military.”
2. “Any legal action taken against an “Active” serviceman or woman as it pertains to foreclosure is not allowed during, and up to 3 months after military service is completed.”

This Act has teeth. It even goes a step further, holding any party or parties responsible for attempting to foreclose or seize the home from an active military soldier.  The punishment is severe. These cases will cost the “plaintiff” or proceeding party heavy fines, and may even be punishable by up to 1 year in prison.

When you leave to fight for your country, you need assurance you will have your home to return to.

The SSCRA is here to protect the individuals that protect us, and secures the America way.

Actress Uma Thurman is reportedly selling her Greenwich Village townhouse for $14.2 million and only the fit and energetic should apply as new owners.

Thurman’s townhouse is 25 feet wide and five stories tall — with no elevator in sight. It is now apparent how Uma keeps in such great shape — her home is like a built-in stairmaster!

Located on lower Fifth Avenue in  Greenwich Village’s “Gold Coast” (Gothamist explains the gold coast mention), this townhome has 7 bedrooms and 6.5 baths. The “garden level” has a media room, plus guest bedroom with access to the back patio. The first floor has an elegant parlor (photo above), with an oversized bay window at the front and southern exposure in the back. At the back is the kitchen and dining area, which overlooks the south garden. On the entire third floor is the master suite, which contains a sitting area and huge closets. The fourth and fifth floors contain additional bedrooms and a stairway to the rooftop deck.

Thanks Diane Tuman…Zillow.

This question is designed to force you to think, challenge you and then get you into action.

Yes, I know that this question will generate mixed responses. A few of you will remark with negative comments…and..that’s OK. Please don’t let your immediate emotional reaction influence your long term results.

Here is the question:

What if you knew FOR SURE..without a doubt…that in the next 6 months the real estate markets would be much worse than they are now.

(Of course, much worse means different things to different people. For example, If you are listing and selling short sales…and/ or REO’s….a market dominated by the so-called distressed sales…is music to your ears.)

OK, stay with me on this…

Again, you have some ability to see 6 months into the future…and you are now reading the newspaper headlines for Novemeber 2010.

The headlines read:

“Real Estate Market Crashes…Again”, “Home Depreciation For 2011 Expected To Be Much Worse”….you get the idea.

Now, back to today. May 12th 2010.

My question for you is this:…what 3 things would you be doing differently now? What would you be learning…what actions would you be taking?

Go ahead now and actually write down the first 3 things that come to your mind:

1)

2)

3)

Lets get back to those questions and your answers in a second….

Moment of truth….does this topic excite you or depress you? Do you think that I am being too doomy and gloomy? (as I am sure I will be accused of being).

If you are feeling anger or perhaps frustration by my question..please ask yourself, why?

Why are you feeling that way? Perhaps, those feelings are an indication that you know that you are not ready for what might be coming next. If the very thought of the markets regressing…getting worse….scares you…then treat this post as your wake up call.

Before its too late, decide what actions you need to be taking now.

Lets look at the facts. Are there any reasons to believe that things may get much worse 6 months from now?

Well, lets talk about it…here are 3 articles and a couple videos for you to check out. Watch and read…then let me know what your thoughts are. What you think matters…what you DO matters more.

Interesting…eh? Interest rates increasing…supply of homes increasing…more underwater homeowners…I guess if you don’t know how to list and sell Short Sales you may indeed have a reason to be depressed.

Now, lets look at a study that our friends over at Zillow released this week:

Zillow recently released its first quarter Real Estate Market Reports for the nation and 135 metropolitan areas. The reports show that home values continued to decline nationwide in the first quarter, amid encouraging signs in California. However, growing negative equity and record foreclosures will likely delay a broader recovery.

The full national report, in its new, interactive format, is available at www.zillow.com/local-info or by emailing press@zillow.com. Additionally, in most areas data is available at the state, metro, county, city, ZIP and neighborhood level.

Topline National Results:

* U.S. home values fell 3.8 percent year-over-year, and declined 1 percent quarter-over-quarter, marking the 13th consecutive quarter of year-over-year declines. Home values declined year-over-year in 106 of the 135 metropolitan statistical areas (MSAs) tracked by Zillow.
* Home values in several large California markets have stabilized significantly, and show tentative signs of reaching a bottom.
* Negative equity remains high with 23.3 percent of all single family homes with mortgages underwater, up from 21.4 percent in fourth quarter.
* Foreclosures reached a new peak in March, with more than one out of every thousand homes (0.11 percent) being foreclosed.

Additional resources available for media:

* First Quarter Real Estate Market Reports press release
* FAQ’s on key metrics included in Zillow Real Estate Market Reports
* Explanation of Data Source: Analysis of Zillow’s home value data compared to OFHEO and Case-Shiller Indexes and NAR/Median Sale Price reports

Still on the fence about what the markets will be like 6 months from now….here is a repost fromTimandJulieHarris.com:

As promised, here is the 60 minutes video about strategic default.
Agents, this consumer lead movement is mainstream now. You must be ready to answer questions and help homeowners who are making the financial decision to walk away. The simple fact is, doing a strategic default IS the smartest financial move for millions of Americans.

Fellow Realtors, learn how to do short sales using the new 2010 Short Sale HAFA Guidelines.Watch the updated Agent Short Sale Secrets video and download the FREE Short Sale Book.

Watch CBS News Videos Online

]]> http://shortsalesellit.com/re-blog-realtors-is-it-too-late-for-you-are-you-ready-for-what-is-coming-next/feed/ 0 http://shortsalesellit.com/60-minutes-video-on-strategic-defaults-and-short-sales/ http://shortsalesellit.com/60-minutes-video-on-strategic-defaults-and-short-sales/#comments Wed, 12 May 2010 01:18:11 +0000 Admin http://shortsalesellit.com/?p=1106 CBS 60 Minutes Talks Strategic Defaults.

Watch CBS News Videos Online

]]> http://shortsalesellit.com/60-minutes-video-on-strategic-defaults-and-short-sales/feed/ 0 http://shortsalesellit.com/bank-of-america-increases-notice-of-auction-notifications-to-increase-short-sales/ http://shortsalesellit.com/bank-of-america-increases-notice-of-auction-notifications-to-increase-short-sales/#comments Tue, 11 May 2010 23:50:47 +0000 Admin http://shortsalesellit.com/?p=1102 Even as defaults and foreclosure sales fell in April, lenders kept the pressure on borrowers by pushing delinquent borrowers through the foreclosure process, data from analyst ForeclosureRadar showed Tuesday.

After a record-setting number of defaults and foreclosures in 2009, the number of both in North San Diego and Southwest Riverside counties have been on the wane. But while defaults and foreclosure auctions represent the beginning and end of the foreclosure process in California, the middle step, called a “notice of auction,” has been more heavily used in recent months, especially by Bank of America.

In April in North County, 870 borrowers received notices of default, down 2.8 percent from March and 37 percent from April 2009. Lenders sold 133 homes at foreclosure auction, down 47 percent from March and 70 percent from April of last year.

Southwest County saw similar trends, as 853 borrowers defaulted, down 9.7 percent from March and 36 percent from April 2009. Lenders auctioned off 190 homes in April, down 60 percent from March and 70 percent from April 2009.

“Banks are trying to modify loans a lot because of pressure from the administration (of President Barack Obama), or short-sale them,” said Leonard Baron, a professor of real estate at San Diego State University. “It’s a lot less costly.”

Overall, homeowners appear to be making headway against the fundamental problem of properties worth less than the amount on them, according to data from market analyst CoreLogic.

Added all together, borrowers from San Bernardino and Riverside counties are cumulatively underwater: The total value of properties, at $199 billion, was worth $5.6 billion less than the total debt on those properties at the end of March —- an improvement from the $8.3 billion in negative equity at the end of December. San Diego County home owners had $73 billion more in property value than they had in total debt at the end of March, up slightly from $72.2 billion at the end of 2009.

But homeowners already in default found themselves pushed further through the foreclosure process, as lenders sent out 1,438 notices of auction in the North San Diego and Southwest Riverside counties, up 27 percent from March and more than double the number sent the previous April.

Those notices alert homeowners already in behind on their payments that their homes could be sold at foreclosure auction in as little as three weeks. Much of the increase was driven by Bank of America, whose foreclosure division ReconTrust N.A. sent out 39 percent of the notices across the region.

The rise in notices of auction doesn’t mean lenders are about to foreclose, just that they’re keeping their bases covered, Baron said.

“It’s a precaution,” he said. “It’s giving them the ability to foreclose if they need to.”

article byEric Wolff

]]> http://shortsalesellit.com/bank-of-america-increases-notice-of-auction-notifications-to-increase-short-sales/feed/ 0 http://shortsalesellit.com/kanye-west-selling-his-hollywood-hills-jetson-pad/ http://shortsalesellit.com/kanye-west-selling-his-hollywood-hills-jetson-pad/#comments Tue, 11 May 2010 23:17:11 +0000 Admin http://shortsalesellit.com/?p=1096 Kanye West Selling Home for $3,995,000

Hip-hop producer/rapper Kanye West is selling his Hollywood Hills home for $3,995,000. And, no — that sale price is not a typo, missing an extra digit.

There are a couple of surprises in this listing: #1 is that West, who is #46 on Forbes’ Celebrity 100 list, has a home with a price tag of “only” $4 million; and #2, that the controversial and outspoken rapper has a home with such minimalist tastes. And, therein lies the contradiction of West.

Take a look at the photos of West’s home on this post — they are the work of Italian designer Claudio Silvestrin, whose style is described as “… austere but not extreme, contemporary yet timeless, calming but not ascetic, strong but not intimidating, elegant but not ostentatious, simple but not soulless.” Claudio has a pretty cool website, too.

Built in 2002, the home has 3 bedrooms, 3.5 baths, built-in computers in every room, a theater, and room for a pool. What? No pool?

> See more Hollywood Hills real estate

> See Hollywood Hills home values

Thanks Zillow and Diane Tuman

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