Wells Fargo, Citigroup Halt Foreclosure Sales

Daily Real Estate News | Monday, May 20, 2013

Wells Fargo and Citigroup have temporarily halted foreclosure sales in several states, taking precautions after a federal regulator released new guidance on minimum standards for foreclosure sales.

The Office of the Comptroller of the Currency (OCC) recently released the new standards. The OCC’s directive mostly consists of 13 questions banks need to ask themselves before selling a home in foreclosure, such as whether the borrower is protected from foreclosure by bankruptcy or if the borrower is in an active loan modification plan.

JPMorgan had also mostly stopped its foreclosure sales after the OCC’s standards were released, but has since resumed sales.

Wells Fargo, the nation’s largest mortgage originator, has seen a dramatic drop in foreclosure sales while significantly decreasing the number of sales it’s processing. For example, foreclosure sales by Wells Fargo in California, Nevada, Arizona, Oregon, and Washington plummeted from 349 a day in April to less than 10 a day, according to Foreclosure Radar, a real estate monitoring firm based in California.

"Wells Fargo has temporarily postponed certain foreclosure sales while we study the revised guidance from the OCC," a Wells Fargo spokeswoman confirmed for American Banker. Citibank officials also confirmed the reason behind their halt in sales was to carefully review the new guidance.

"The OCC did not direct a slowdown or pausing," says OCC spokesman Bryan Hubbard. "However, if servicers are not certain they are meeting these standards, pausing foreclosures is a responsible and productive step."

Rising Housing Market Likely to Lift Job Mobility

DAILY REAL ESTATE NEWS | TUESDAY, MAY 14, 2013

Home owners are starting to feel freer to move where the jobs are, Reuters reports, as worries about homes that won't sell or will sell at a loss begin to fade.  

Since early 2012, home prices in the major metro areas have been rising. Homes are also selling faster: It took 62 days, on average, to sell a home, compared with 91 days one year prior, according to March data from the National Association of REALTORS®.

The increase in mobility from the recovering housing market is expected to have a hand in lowering the jobless rate.

"Until the real estate market picked up, people wouldn't even consider a move without the certainty that they could sell their homes," Jerry Funaro, vice president of global marketing for TRC Global Solutions, a Milwaukee-based relocation service, told Reuters. "Companies are now more inclined to make offers since we're seeing real estate markets across the country coming back.” 

The number of people who moved last year increased to 35.6 million, with the mover rate climbing to 12 percent, according to the U.S. Census Bureau. That marked an increase over the 11.6 percent low set in 2011. 

"It's not a huge gain, but when you consider that for two years, we've had the lowest migration rates since World War II, any move up is good news," William Frey, a demographer at the Brookings Institution in Washington, told Reuters.

Meanwhile, in April, the jobless rate dropped to its lowest point in more than four years, reaching 7.5 percent, due to an increase in hiring among employers.

4 Threats That Remain in Housing Recovery

DAILY REAL ESTATE NEWS | MONDAY, MAY 06, 2013

The housing recovery appears to be on track and growing stronger. Home sales and prices are up after reaching bottom in 2010, foreclosures and mortgage delinquencies are dropping, yet housing affordability still remains high. 

So why are some analysts and economists concerned? 

At a recent Milken Institute Global Conference in Beverly Hills, Calif., panelists said that threats to the housing recovery still remain. The biggest threats they pointed to included:

1. Land scarcity: Real estate developers are struggling to find desirable land to start new projects, which is limiting the supply of new homes. A few years ago, banks took ownership of land after developers had foreclosed on some projects. The land is worth less than its original price so banks are reluctant to write off additional losses by selling it too cheaply. Plus, lenders remain cautious about issuing loans for new land purchases. 
2. House flippers should be cautious: Housing affordability is high mostly due to super low mortgage rates, and investors are taking advantage with intentions of flipping homes for profit. "No doubt you can buy a house today and get a really good price and a low-interest loan,” says Jeff Greene, president of Florida Sunshine Investments. “But if you want to sell that house to somebody two or three years later and rates go up to 5 or 6 percent, how much is he going to pay for that house?"
3. Foreign buyers potentially inflating prices: In some markets, strong demand by foreign buyers has helped home prices recover, which has made homes more expensive for Americans in some areas. Some analysts fear that it could even lead to another housing bubble if interest rates started rising quickly as well. Markets like Miami, Los Angeles, and New York are seeing strong demand among foreign buyers. Some say this is a good thing, because it reflects a strong faith in the U.S. market. 
4. A ‘patchy’ recovery: Some markets are seeing rapid increases with bidding wars, rising prices, and low inventories, while other markets are still at a standstill. For example, Miami’s housing market is “on fire” while 80 miles north in Palm Beach County there’s a “huge glut of housing,” says Greene.