Oct 20, 2011 | Uncategorized
A Massachusetts man lost something he never had – his home. The Masachusetts Supreme Judicial Court ruled this week that when Francis Bevilacqua purchased the home from U.S. Bank in 2006, the bank did not actually hold the home’s title.
The court ruled that because U.S. bank did not hold the mortgage note when it foreclosed on the property, it did not obtain the title in the foreclosure. Therefore, Bevilacqua did not purchase a legal title when he made the purchase.
In its ruling in Bevilacqua v. Rodriguez, the court referenced a case tried in the same court last January, U.S. Bank, N.A. v. Ibanez, in which the court ruled that if a bank cannot provide proof it owns the mortgage note, any foreclosure filings it initiates are void.
The Ibanez case, however, simply involved a foreclosure action. Bevilacqua extends that ruling to instances when a new homeowner has already purchased the property. (more…)
Oct 20, 2011 | Housing Analysis
Headlines in newspapers can be misleading — especially with respect to housing figures. Media coverage of the most recent Housing Starts data serves as an excellent illustration.
Wednesday, the Census Bureau released its September Housing Starts report. In it, the government said that national Housing Starts rose 15 percent in September as compared to August 2011, tallying 658,000 units on a seasonally-adjusted annualized basis.
The September reading is the highest monthly reading since April 2010, the last month of last year’s home buyer tax credit.
The sudden surge in starts is big news for a housing market that has struggled of late, and the press was eager to carry the story. Here is a sampling of some headlines:
- U.S. Housing Starts Rise 15%, Hit 17-Month High (MarketWatch)
- Home Building Jumps 15% in September (ABC)
- New Construction Surges In September (LA Times)
These headlines are each accurate. However, they’re also misleading.
Yes, Housing Starts did surge in September, but if we remove the “5 or more units” grouping from the Census Bureau data — the catgory that includes apartment buildings and condominium structures — we’re left with Single-Family Housing Starts and Single-Family Housing Starts rose just 1.7 percent last month. (more…)
Oct 19, 2011 | Housing Analysis
Homebuilder confidence is rebounding sharply.
Just one month after falling to a multi-month low, the Housing Market Index rebounded four points to 18 for October. It’s the highest reading for the HMI since May 2010 — the month after last year’s homebuyer tax credit expiration.
The Housing Market Index is published monthly by the National Association of Homebuilders and is scored on a scale of 1-100. Readings above 50 indicate favorable conditions for homebuilders. Readings below 50 indicate unfavorable conditions.
The index has been below 50 since May 2006 — a 66-month streak.
The Housing Market Index is a composite reading; the result of three separate surveys sent to home builders each month. Builders are asked about current single-family home sales volume; projected single-family home sales volume over the next 6 months; and current “foot traffic”.
In October, builder responses were stronger in all 3 categories :
- Current single-family sales : 18 (+4 from September)
- Projected single-family sales : 24 (+7 from September)
- Buyer foot traffic : 14 (+3 from September)
Meanwhile, of particular interest to today’s Fitchburg home buyers is that builders expect volume to surge over the next two seasons. And, with current sales volume rising and foot traffic strengthening, the fall and winter months could be strong ones in the new homes market.
In addition, the builder trade group press release states that rising costs for materials are squeezing building profit margins.
For buyers, it all adds up higher home prices ahead. As builders grow more confident about the housing market, they’re less likely to make concessions on pricing or upgrades. Rising building costs fortify that argument. The “great deal” will be tougher to negotiate.
At least mortgage rates are low.
Low mortgage rates are keeping homes affordable in Massachusetts and nationwide. If you’re looking for the right time to buy new construction, therefore, this month may be it.
Oct 18, 2011 | Housing Analysis
Foreclosure activity continues to slow throughout the United States.
According to data from RealtyTrac, a national foreclosure-tracking firm, the number of foreclosure filings dipped below 215,000 in September 2011, a 6 percent decrease from August.
A “foreclosure filing” is defined as any foreclosure-related action including Notice of Default, Scheduled Auction, or Bank Repossession.
September marks the 12th straight month in which foreclosure filings fell year-over-year.
There are several reasons why foreclosure filings are down, including an increase in the amount of time it takes banks to move a foreclosure through its pipeline. It now takes a nationwide average of 336 days from the date of initial default notice to bank repossession.
Some states work quicker than others, however, because of a combination of state law and personnel. (more…)
Oct 14, 2011 | Federal Reserve
Wednesday, the Federal Reserve released the minutes from its 2-day meeting September 20-21, 2011.
The release shows a divided Fed in disagreement about the current U.S. monetary policy. The group reached compromise for new economic stimulus, however, and maintained its commitment to accommodative interest rates.
Wall Street reacted tepidly to the minutes. Mortgage rates in Leominster worsened slightly post-release.
The Fed Minutes gets less press than the FOMC’s post-meeting press release, but it’s every bit as important. Because it details the conversations that take place among voting and non-voting Fed members at FOMC meetings, the Fed Minutes is an inside-look at the debates and discussion that lead to new monetary policy.
As examples, here are some of the topics covered at the September FOMC meeting :
- On growth : Economic growth was slow, but “did not suggest a contraction”
- On housing : The market continues to be “depressed by weak demand”
- On rates : The Fed Funds Rate will remain low until mid-2013
Then, with Fed members divided on whether the central bank should add new stimulus, it reached a compromise instead, launching the $400 billion “Operation Twist” program. Operation Twist is meant to lower longer-term interest rates, including mortgage rates.
Since Operation Twist began, mortgage rates are higher by nearly 0.375%.
Also noteworthy within the Fed Minutes was concern for an economic slowdown and how the Federal Reserve may react. According to the record, a slowdown may prompt the Fed to introduce its third round of qualitative easing, or QE3. An out-sized stimulus plan would likely lead rates higher.
Nothing will happen until the Fed’s next meeting, however. Chairman Ben Bernanke & Co meet next November 1-2 for a 2-day meeting..
