Your friendly (and busy) real estate blogger ran across a couple of relatively promising national housing reports today that were worth noting (in brief):
In a story in the Thursday paper I told you that foreclosures in the Twin Cities had fallen to the lowest level since 2006, according to a recent report from the Minnesota Homeownership Center. A new report released Thursday afternoon by RealtyTrac said the same thing is happening across the country. The group said that in January foreclosure starts across the country fell 7 percent from the previous month to a six-year low. While that's good news, foreclosure auctions increased in 26 states - a symptom of broad variations in the way foreclosures are processed, and a sign that the economic recovery isn't happening evenly across the country.
RealtyTrac said that during January one in every 869 U.S. housing units received a foreclosure filing during the month compared with one in every 1,244 housing units in Minnesota. Here's a link to the full report.
- Jim Buchta
Minneapolis is offering $3.25 million in construction loans and grants to developers who are willing to build “green” homes on city-owned vacant lots on the city’s North Side.
The offer is part of a long-term program called Green Homes North, which aims to fund 100 new homes during the next five years in struggling north Minneapolis neighborhoods. Goals include building sustainable homes to green standards, employing local minority and women contractors and workers, and using local green products.
The project is part of a broader effort to mitigate the damage done by the foreclosure crisis. Buyers of houses built through the program will be able to take part in existing incentive programs. Proposals for the project are due by Feb. 15; you can find more information at the city's website.
Much of the $8.5 billion mortgage settlement announced this week is intended to compensate homeowners who either went through foreclosure, or were unable to qualify for a loan modification. My colleague, Jennifer Bjorhus, took a closer look at how to find out if you might be eligible. Here's what she found:
The settlement between banking regulators and 10 major mortgage servicers announced Monday came with scant instructions for the millions of homeowners who could be affected and eligible for compensation. A yet-to-be-appointed “payment agent” will be contacting some 3.8 million homeowners directly about the settlement by the end of March, regulators said. “Eligible borrowers will receive compensation whether or not they filed a request for review form, and borrowers do not need to take further action to be eligible for compensation,” federal bank regulators said in the joint release.
On Wednesday, a spokesman for the Office of the Comptroller of the Currency (OCC) said people can find out if they are in the pool of 3.8 million eligible borrowers by calling the independent foreclosure review number at 888-952-9105. Also, information about the settlement posted at www.independentforeclosurereview.com will be updated often to address frequently asked questions, said OCC spokesman Bryan Hubbard.
A Federal Reserve spokeswoman on Wednesday also suggested that homeowners can contact the company that serviced their mortgage to make certain the company has their full current contact information. The settlement covers more than 3.8 million borrowers who were in some stage of foreclosure in 2009 and 2010 with 10 mortgage servicing companies: Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank and Wells Fargo. Four banks who were originally part of the process did not sign on to the settlement: Ally Financial, HSBC, OneWest Bank and EverBank. Of the $8.5 billion, $3.3 billion is for direct payments to borrowers and $5.2 billion is for other help such as loan modifications.
Eligible homeowners are expected to receive payments ranging from hundreds of dollars up to $125,000, depending on potential errors or abuse, although it’s not clear how that will be determined for many people since the settlements stops the independent foreclosure review process that had been underway. The settlement aims at resolving the problematic reviews and speed compensation to borrowers. Only a fraction of the 3.8 million people had submitted claims for a review.
Since the reviews have been stopped, the extent of the wrong-doing during the foreclosures will likely never be known. Critics have called the settlement a victory for banks. The settlement does not require borrowers to waive any legal claims they may have against their servicer.
The foreclosure auction on Twin Cities-based pianist, Lori Line's Lake Minnetonka house didn't happen as scheduled on December 12 at the Hennepin County Sheriff's office. Line, who has been on the road performing on her annual holiday tour, posted a "personal note" on her website saying that the sale was cancelled, and that she was grateful for the outpouring of love and support from her fans.
Line's nearly 10,000 square-foot house is still listed for nearly $4 million; Tim Line said that the recession has been tough for the performer and that family is downsizing because their two kids are grown and no longer at home.
Late last month, the custom builder that built Line's home and several other upper-bracket suburban houses, Keith Waters, filed for Chapter 7 protection. That filing listed between 100 and 199 creditors, assets of of $0 to $50,000 and liabilities of $1 to $10 million.
Foreclosure activity in Minnesota and most states across the U.S. fell slightly last month, a sign that an improvements in the economy and a stabilizing housing market are starting to ease stresses on homeowners. Across the country, foreclosure filings, including default notices, scheduled auctions and bank repossessions, fell three percent from October and 19 percent from last year. That was the 26th consecutive month of annual declines.
At the same, bank reposessions increased in Minnesota and across the country as lenders worked through their back-log of properties that have already been through the process.
In Minnesota, early-stage foreclosure activity was down only slightly compared with last year, falling almost 2 percent. Compared with October, however, those early notices rose more than 20 percent. RealtyTrac’s vice president, Daren Blomquist, told JustListed that what’s happening in Minnesota isn’t alarming, nor was it unique. Several states showed a double-digit increase compared with last year, a phenomenon that’s largely a reflection of differences in the way foreclosures are processed and volatility in the data.
What’s more important to note, he said, is that the foreclosure rate in Minnesota is lower than the national average. Nationwide, one in every 728 housing units received a notice compared with one in 918 housing units in Minnesota. And, he said, foreclosure discounts in Minnesota are much smaller than the national average, signaling strong demand and a sense of confidence that doesn't exist in all states.
You can see the full report here, and stay tuned for a complete story in the Friday paper.