Mortgage Assistance Relief Services Act

Frascona on MARS

Prominent real estate attorney Oliver Frascona doesn't think the MARS rule regarding short sale transactions is as onerous as many think.

Prominent real estate attorney Oliver Frascona has heard all of the wailing from real estate brokers regarding the six-month-old rule known as MARS, but he doesn’t buy it.

Any real estate broker who does short sales, in which a lender accepts less then the mortgage amount, is surely familiar with MARS.

MARS, an acronym for Mortgage Assistance Relief Services Act, went into effect on Jan. 1. A 54-page, single-spaced document such as the Federal Trade Commission’s MARS, addresses a number of topics, of course. But the most significant change is that it makes it illegal for real estate brokers to charge sellers an upfront fee or to pass along a short sale coordinator’s fee on any short sale prior to receiving a written offer from a lender or servicer that the homeowner decides is acceptable.

This is what FTC Chairman Jon Leibowitz had to say about this portion of MARS in February: “Banning the collection of up-front fees will protect homeowners from being victimized. This is especially important at a time when so many people are behind on their mortgages or facing foreclosure.”

Penalties for breaking the rules are stiff – up to fine of $11,000 a day.

But Frascona, a shareholder of the Boulder-based firm Frascona, Joiner, Goodman and Greenstein, PC, said that he does not believe the intent of MARS is to go after brokers who pay small upfront fees to reputable short-sale assistant firms. Studies have shown that brokers who use these short-sale facilitators have a much greater likelihood of completing a short-sale quickly.

Culprits: Out-of-state firms that charge upfront fees

“They’re not going to go after the broker who pays a couple of hundred bucks upfront to a short-sale company that needs the money to cover its overhead,” Frascona told me. “They’re going after the out-of-state guys who charges a bunch of money and didn’t do anything. And they should be going after those guys.” He also said that the FTC rule would apply to real estate brokers who are giving short-sale work to unqualified family members, who are not helping the distressed homeowners.

“They’re not going after Joe Broker who has got a short-sale listing and says I’ll pay a reputable firm to get the process started,” Frascona said. “Unless, I’m missing something, I just don’t see it. The public is not being harmed. The consumer is actually being helped. There is no kickback involved.”

The reality, even if the FTC decided to go after real estate brokers who are paying legitimate firms upfront fees, they couldn’t, he said. “The FTC has the same budget constraints as everybody else,” Frascona said. “There is no way they have the financial resources to go after a reputable broker working with a reputable company, especially when they are helping people at a reasonable cost.”

Not that he is a fan of MARS.

“i don’t think the FTC knew what it was doing,” Frascona said. “It’s like it’s left hand didn’t know what it’s right hand was doing. MARS is a mess.”

To contact or learn more about Oliver Frascona’s law firm, please visit this link to his law firm.

Good news for the Denver housing market

DENVER - There is some good news on the housing front. Sales of single-family homes and condos in the Denver-metro area were up in May from April, but down from a year ago, according to Metrolist Inc. Data.

The sale of 3,700 properties in May is 9 percent higher than April, but off 15 percent from 2010.

The median sales price for a single-family was more than 3.5 percent higher from April - coming in at $230,000.

Real estate analyst Gary Bauer is encourage by these numbers, saying we're getting back to a more normal market with numbers not skewed by 2010's homebuyer tax credit.

(KUSA-TV © 2011 Multimedia Holdings Corporation)

REOs and Shorts Accounted for 39% of Q1 Existing-Home Sales

REOs and Shorts Accounted for 39% of Q1 Existing-Home Sales

Data released by the National Association of Realtors (NAR) Tuesday show that distressed properties – including bank-owned homes and pre-foreclosure short sales – made up 39 percent of the first quarter’s existing-home sales. That’s up from 36 percent a year earlier.

Overall, sales of previously owned homes rose to an annual rate of 5.14 million units during the first three months of this year, the trade group reported. That pace is 8.3 percent higher than during the previous quarter and essentially flat – down just 0.8 percent – compared to the same period last year.

NAR says existing-home sales continued to recover in Q1 with quarter-over-quarter gains recorded in 49 states and the District of Columbia. Vermont was the only state to post a decline. There, existing-home sales dropped 7.1 percent.

With distressed homes grabbing such a large share of the market, the median home price in most areas continues to slide. NAR says distressed properties typically sold at a discount of about 20% during the first quarter. According to the trade group’s study, the national median existing single-family home price was $158,700 in the first quarter, down 4.6 percent from $166,400 in the first quarter of 2010.

Lawrence Yun, NAR’s chief economist, says lower priced homes have seen the best sales performance. “The biggest sales increase has been in the lower price ranges, which are popular with investors and cash buyers,” he said. “The preponderance of sales activity at the lower end is bringing down the median price, so what we’re seeing is the result of a change in the composition of home sales.”

Yun also noted, “When buyers principally purchase distressed properties in a given market, the recorded prices will be very low, which is what we’re seeing now in much of the country.”

According to NAR’s latest findings 118 of the 153 metropolitan statistical areas included in the study showed price declines in the first quarter when comparing figures from a year earlier.

Although sales nationally are slightly below a year ago, the volume of homes sold for $100,000 or less in the first quarter was 8.9 percent higher than the first quarter of 2010, creating a downward skew on the overall median price, NAR explained in its report.

The share of all-cash home purchases rose to 33 percent in the first quarter from 27 percent in the first quarter of 2010.

NAR says investors accounted for 21 percent of first quarter transactions, while first-time buyers purchased 32 percent of homes, and repeat buyers claimed a 47 percent market share.

Foreclosure rate slows as repossession timeline lengthens

Big banks are taking longer to push borrowers into foreclosure and through each stage of the process amid increased scrutiny.

By Alejandro Lazo, Los Angeles Times

May 12, 2011

Increased scrutiny of how lenders foreclose on Americans has dragged the repossession process out to unprecedented lengths, driving down the pace at which banks are taking back homes.

Big banks are taking longer not only to push borrowers into foreclosure, but also to move homeowners through each stage of the process than in previous years, according to a report by Irvine-based RealtyTrac.

The extended timelines have meant a reprieve for troubled borrowers. But economists said the delays could hold back a national housing rebound if foreclosures remain a significant part of the market for years to come.

In April, U.S. foreclosure activity fell for the seventh month in a row on a year-over-year basis to the lowest point in more than three years, RealtyTrac said. The sharp April drop was the result of the foreclosure-processing slowdown and not an indication of a housing rebound lifting people out of default, experts said.

"The banks have had to slow down and get more lawyers involved because of all of the fuss over the robo-signing scandal," said Christopher Thornberg, principal of Beacon Economics, referring to the revelations last year that banks foreclosed on properties using faulty paperwork.

Foreclosure filings— notices of default, scheduled auctions and bank repossessions — dropped 9% in April from March and plunged 34% from April 2010 as 219,258 U.S. properties received new filings in April. The number of bank repossessions fell 5% from the prior month and 25% from April 2010, with lenders taking back 69,532 U.S. properties. In all, 239,795 foreclosure filings were made, with some properties receiving multiple filings.

Read More: http://www.latimes.com/business/realestate/la-fi-foreclosures-20110512,0,5524709.story

Denver-area million-dollar home sales soar in April

Denver Business Journal

Date: Tuesday, May 10, 2011, 12:57pm MDT

The market for million-dollar homes in the metro Denver area continues to improve, judging by April sales figures from Metrolist Inc. released Tuesday.

Fifty-five percent more million-dollar-plus homes — and 100 percent more condominiums in that price category — sold in April than in March, according to Gary Bauer, an independent Littleton-based real estate broker and Metrolist analyst.

There were 57 homes, six of which were condominiums, sold or closed on in April, which was down seven percent from the same month in 2010. The lowest-priced home in that category was $1 million and the highest was $3.2 million. The total sales volume for those 57 properties was $84.2 million.

Read more: Denver-area million-dollar home sales soar in April | Denver Business Journal

Why did my property value drop so much this year?

Property holds its value

Written by News Release

Wednesday, 04 May 2011 00:00

Property owners in western Colorado may be expecting to see their 2011 Notice of Valuation showing a lower value than their 2009 value, given the ongoing national economic woes. Delta County assessor Debbie Griffith reports that generally the Western Slope market remained relatively stable with pockets of neighborhoods that experienced a decline or increase in value. These neighborhoods were influenced by local economic drivers, such as the oil and gas industry, resulting in values that have decreased more substantially, or increased. As was seen in the 2009 reappraisal, the sales volume, or number of sales occurring, has remained very low. Griffith provided the following breakdown for the four major categories of real property, while stressing that the values are not yet final. She explains, "We have just started our appeal period and have county Board of Equalization ahead that may change value significantly. We have not even set values for the natural resources (coal mine), oil and gas or state assessed properties at this time." Under Colorado law, county assessor's offices throughout the state conduct a complete reassessment of all property in their county every two years. The 2011 reappraisal reflects the real estate market as of the appraisal date on June 30, 2010. Property sales are analyzed in the 18-60 months prior to the appraisal date, and adjusted to match the market conditions as of June 30, 2010. Sales occurring beyond June 30, 2010 cannot be used to set the 2011 value, nor can listing prices or length of time a property has been on the market. Only valid, arms length transactions can be considered in establishing value. Many transactions in the past two years involved foreclosures, Griffith noted. A foreclosure is not a sale; it is a transfer of ownership to the lending agent. When this lending agent (usually a bank or mortgage company) puts the property on the market and it sells, this sale is one that can be considered by assessors. This new valuation is mailed to taxpayers on May 1, 2011 and is used as a basis for 2011 and 2012 property taxes (payable in 2012 and 2013). Because the volume of sales has dramatically decreased in the past four years, the perception of property owners, especially those who have had their property on the market for a length of time, is that values are dropping. However, in general, that is not the case. The assessor's values are not based on the number of sales but on the prices of the properties that have sold during the statutorily required sales data collection period that ended on June 30, 2010. The accompanying graph indicates that the median sales prices have generally shown modest to no declines in Western Slope counties, while the number of sales has been quite low. The value established by assessors is the base from which property taxes are determined. Each property owner shares in providing revenue for local services which includes schools, police and fire protection, local government and public health. The Colorado property tax system is designed to fairly and equitably distribute taxes according to the value of the property. Colorado county assessors are also subject to an independent audit of assessor's valuation methodologies that is one of the most rigorous statistical and procedural audits found in any state. ASSESSED VALUATIONS 2010 2011 Residential $164,998,336 $147,013,579 Commercial $72,599,206 $60, 059,577 Industrial $4,893,847 $4,340,087 Agricultural $44,198,099 $41,988,422

Treasury: Nearly 4,5Short Sales and 00 HAFA Deeds-in-Lieu Completed

Treasury: Nearly 4,500 HAFA Short Sales and Deeds-in-Lieu Completed

04/01/2011BY: CARRIE BAY

Enter your email to receive Daily Email Updates:

The Treasury Department released a new report on the government’s foreclosure prevention efforts Friday. In addition to the Home Affordable Modification Program (HAMP) numbers that are regularly recounted, new this month are details on short sales and deeds-in-lieu, as well as second lien modifications.

Treasury reports that as of the end of February, 4,488 homeowners completed a short sale or deed-in-lieu (DIL) under the Home Affordable Foreclosure Alternatives (HAFA) program. The federal program provides up to $3,000 for relocation assistance after a homeowner exits the home.

Another 10,177 homeowners have agreements in place with their servicers for HAFA short sale and DILtransactions. Treasury notes in its report that the HAFAshort sale timeline “lasts at least 120 days,” and requires the cooperation of junior lien holders in order to complete the transaction.

This report also marked the department’s first reporting on its Second Lien Modification Program (2MP), which provides assistance to homeowners in a first lien HAMPmod who have an eligible second lien with a participating servicer.

Red More Here: http://www.linkedin.com/news?actionBar=&articleID=457366806&ids=0UejAQc3wMdzgIc38TcPwVc3oQb3cSczcOcz0Sd2MMdz8MdzoMdzgIdz0UdzoPdPkQ&aag=true&freq=weekly&trk=eml-tod-b-ttle-44