Tag: Realtytrac

DO FORECLOSURES INCREASE DURING A HOUSING RECOVERY?

I’m told by my government keepers the economy is booming, jobs are being added by the millions, home prices are rising, and consumers are spending. Then why did foreclosures in the country jump by 6% over the prior year, marking the first increase in 26 months? This real data doesn’t match the government storyline. RealtyTrac reports the hard truth. And this is just the beginning. The next leg down in housing is upon us.

A total of 55,906 U.S. properties started the foreclosure process in November, a decrease of 1 percent from the previous month but a 6 percent increase from a year ago, the first year-over-year increase following 27 consecutive months of year-over-year decreases. 50,102 U.S. properties were scheduled for foreclosure auction during the month, down 16 percent from an 18-month high in the previous month but up 5 percent from a year ago.

“Foreclosure rates on 2014-originated loans are actually higher than 2013-originated loans nationwide and in many markets, indicating that lenders are open to a slightly higher level of risk than we’ve seen over the past five years of extremely tight lending standards,” Blomquist continued.

Scheduled foreclosure auctions increased from a year ago in 30 states, including Kentucky (up 163 percent), Tennessee (up 159 percent), North Carolina (up 157 percent), New Jersey (up 117 percent), Oregon (up 114 percent), New York (up 76 percent), Texas (up 34 percent), Pennsylvania (up 13 percent), Georgia (up 8 percent), and Washington (up 7 percent).

REOs increased from a year ago in 15 states, including Maryland (up 93 percent), North Carolina (up 66 percent), New York (up 64 percent), Kentucky (up 56 percent), New Jersey (up 54 percent), Iowa (up 29 percent), and Massachusetts (up 29 percent).

Five of the nation’s 20 largest metro areas posted year-over-year increases in foreclosure activity: New York (up 71 percent), Houston (up 70 percent), Philadelphia (up 43 percent), Boston (up 27 percent) and Baltimore (up 22 percent).

Among the nation’s 20 largest metros, those with the five highest foreclosure rates were Miami (one in every 394 housing units with a foreclosure filing), Tampa (one in every 432 housing units), Baltimore (one in every 576 housing units), Philadelphia (one in every 625 housing units), Chicago (one in every 716 housing units) and Riverside-San Bernardino-Ontario in Southern California (one in every 725 housing units).

LET’S BORROW AGAINST OUR HOMES LIKE IT’S 2006

Here we go again. After a two year Wall Street engineered fraudulent boost in home prices in the exact markets that led the bubble in 2003 through 2007, the delusional dolts are now acting like the increase in home equity is real. Do delusional idiots congregate in California, Nevada, Florida, Arizona and Ohio for a reason? The morons in these markets are ramping up new home equity lines of credit at a 60% to 90% pace over the prior year.

It’s as if the lesson of the previous bubble was completely forgotten in a couple years. Are these people really that dumb? The housing market started rolling over six months ago. Prices peaked, new single family home sales peaked, existing home sales peaked and the Wall Street investors are exiting stage left. Now the very same Wall Street hucksters want you to borrow against the artificially inflated value of your house and spend that money on more shit you don’t need, or to lease a brand new Escalade. It’s called the American Way. So it goes.

Via RealtyTrac

HELOC Share of Total Loans at Highest Level Since 2008

Biggest Jumps in Inland California, Las Vegas, Cincinnati, Phoenix

RVINE, Calif. – Oct. 9, 2014 — RealtyTrac® (www.realtytrac.com), the nation’s leading source for comprehensive housing data, today released its first-ever U.S. Home Equity Line of Credit Trends Report, which found that in the 12 months ending in June 2014 a total of 797,865 Home Equity Lines of Credit (HELOCs) were originated nationwide, up 20.6 percent from a year ago and the highest level since the 12 months ending in June 2009.

The report also shows HELOC originations accounted for 15.4 percent of all loan originations nationwide during the first eight months of 2014, the highest percentage since 2008.

“This recent rise in HELOC originations indicates that an increasing number of homeowners are gaining confidence in the strength of the housing recovery and, more importantly, have regained much of their home equity lost during the housing crisis,” said Daren Blomquist. “Nearly 10 million homeowners nationwide, representing 19 percent of all homeowners with a mortgage, now have at least 50 percent equity in their homes, according to RealtyTrac data. Meanwhile the percentage of homeowners with severe negative equity has decreased from 29 percent in the second quarter of 2012 to 17 percent in the second quarter of this year.

“The rise in HELOCs also reflects a natural evolution for a lending industry looking for products they can offer to homeowners who have already refinanced their first position loan into a low fixed rate,” Blomquist added. “A HELOC enables homeowners to leverage additional equity they may have gained since refinancing while still preserving the rock-bottom interest rate on their first position loan.”

Inland California, Las Vegas, Cincinnati, Phoenix post biggest annual increases
Among the nation’s 50 largest metropolitan statistical areas with HELOC data available, 49 posted year-over-year increases in HELOC originations in the 12 months ending in June 2014. The only metro area with a decrease was Rochester, N.Y., where HELOC originations decreased 1 percent.

Metro areas with the biggest year-over-year increase in HELOC originations were Riverside-San Bernardino in Southern California (87.7% increase), Las Vegas (85.1% increase), Cincinnati (81.0% increase), Sacramento (65.1% increase), and Phoenix (60.1% increase).

Major metros with the smallest increases in HELOC originations from a year ago were Minneapolis-St. Paul (0.2 percent increase), Louisville, Ky., (3.3 percent increase), Philadelphia (3.6 percent increase), Virginia Beach (4.3 percent increase), and St. Louis (5.6 percent increase).

U.S. HELOC originations 76 percent below 2005-2006 peaks
Despite the year-over-year increases, HELOC originations were well below their peaks from the previous housing boom. Nationwide, the 797,865 HELOC originations in the 12 months ending in June 2014 were 76 percent below the previous peak of 3,299,007 in the 12 months ending in June 2006. The 15.4 percent share of HELOCs year-to-date nationwide was also below the 24.7 percent share in 2005.

HELOC originations were below their previous peaks in 49 out of the nation’s 50 largest metro areas. The only exception was Pittsburgh, where HELOC originations reached a new peak in the 12 months ending in June 2014.

Major metro areas with the biggest decrease in HELOC originations in 2014 compared to their previous peaks were Riverside-San Bernardino (down 93 percent), Las Vegas (down 92.9 percent), Miami (down 92.5 percent), Tucson, Ariz., (down 92.4 percent), and Orlando (down 92.2 percent).

HELOCs biggest share of originations in Honolulu, Upstate NY, Cleveland, Milwaukee
Among the nation’s 50 largest metro areas, those with the highest share of HELOC originations as a percentage of all loan originations year-to-date in 2014 were Honolulu (43.5 percent), Rochester, N.Y., (38.7 percent), Buffalo, N.Y., (32.1 percent), Cleveland (28.5 percent), and Milwaukee (27.5 percent).

Major metro areas with the lowest share of HELOC originations as a share of all loan originations year-to-date in 2014 were Las Vegas (5.8 percent), Dallas (6.5 percent), Riverside-San Bernardino (7.7 percent), Houston (7.9 percent), and Tucson, Ariz. (8.0 percent).

Other markets where HELOC originations represented less than 10 percent of all loan originations year-to-date in 2014 were Atlanta (8.1 percent), San Antonio (8.6 percent), Oklahoma City (9.2 percent), and Austin (9.9 percent).

Report methodology
The RealtyTrac U.S. Home Equity Line of Credit Trends Report provides counts of HELOC loans originated and the HELOC share of total loans originated using mortgage and deed of trust records collected in more than 900 counties nationwide with a combined population of more than 240 million, representing 78 percent of the U.S. population. Home Equity Lines of Credit are non-purchase loans that are secured by the equity (the appraised market value of that property minus any other loans secured by that property) and can be used by homeowners to fund home improvement projects or other purchases.

WARPED, DISTORTED, MANIPULATED, FLIPPED HOUSING MARKET

The report from RealtyTrac last week proves beyond the shadow of a doubt the supposed housing market recovery is a complete and utter fraud. The corporate mainstream media did their usual spin job on the report by focusing on the fact foreclosure starts in 2013 were the lowest since 2007. Focusing on this meaningless fact (because the Too Big To Trust Wall Street Criminal Banks have delayed foreclosure starts as part of their conspiracy to keep prices rising) is supposed to convince the willfully ignorant masses the housing market is back to normal. It’s always the best time to buy!!!

The talking heads reading their teleprompter propaganda machines failed to mention that distressed sales (short sales & foreclosure sales) rose to a three year high of 16.2% of all U.S. residential sales, up from 14.5% in 2012. The economy has been supposedly advancing for over four years and sales of distressed homes are at 16.2% and rising. The bubble headed bimbos on CNBC don’t find it worthwhile to mention that prior to 2007 the normal percentage of distressed home sales was less than 3%. Yeah, we’re back to normal alright. We are five years into a supposed economic recovery and distressed home sales account for 1 out of 6 all home sales and is still 500% higher than normal.

The distressed sales aren’t even close to the biggest distortion of this housing market. The RealtyTrac report reveals that all-cash purchases accounted for 42% of all U.S. residential sales in December, up from 38% in November, and up from 18% in December 2012. Does that sound like a trend of normalization? There were five states where all-cash transactions accounted for more than 50% of sales in December – Florida (62.5%), Wisconsin (59.8%), Alabama (55.7%), South Carolina (51.3%), and Georgia (51.3%). In the pre-crisis days before 2008, all-cash sales NEVER accounted for more than 10% of all home sales. NEVER. This is all being driven by hot Wall Street money, aided and abetted by Bernanke, Yellen and the rest of the Fed fiat heroine dealers.

Source: Realty Trac

The fact that Wall Street is running this housing show is borne out by mortgage applications languishing at 1997 levels, down 65% from the 2005 highs. Real people in the real world need a mortgage to buy a house. If mortgage applications are near 16 year lows, how could home prices be ascending as if there is a frenzy of demand? Besides enriching the financial class, the contrived elevation of home prices and the QE induced mortgage rate increase has driven housing affordability into the ground. First time home buyers account for a record low percentage of 27%. In a normal non-manipulated market, first time home buyers account for 40% of home purchases.     

Price increases that rival the peak insanity of 2005 have been manufactured by Wall Street shysters and the Federal Reserve commissars. Doctor Housing Bubble sums up the absurdity of this housing market quite well.

The all-cash segment of buyers has typically been a tiny portion of the overall sales pool.  The fact that so many sales are occurring off the typical radar suggests that the Fed’s easy money eco-system has created a ravenous hunger with investors to buy up real estate.  Why?  The rentier class is chasing yields in every nook and cranny of the economy.  This helps to explain why we have such a twisted system where home ownership is declining yet prices are soaring.  What do we expect when nearly half of sales are going to investors?  The all-cash locusts flood is still ravaging the housing market.

The Case-Shiller Index has shown price surges over the last two years that exceed the Fed induced bubble years of 2001 through 2006. Does that make sense, when new homes sales are at levels seen during recessions over the last 50 years, and down 70% from the 2005 highs? Even with this Fed/Wall Street induced levitation, existing home sales are at 1999 levels and down 30% from the 2005 highs. So how and why have national home prices skyrocketed by 14% in 2013 after a 9% rise in 2012? Why are the former bubble markets of Las Vegas, Los Angeles, San Diego, San Francisco and Phoenix seeing 17% to 27% one year price increases? How could the bankrupt paradise of Detroit see a 17.3% increase in prices in one year? In a normal free market where individuals buy houses from other individuals, this does not happen. Over the long term, home prices rise at the rate of inflation. According to the government drones at the BLS, inflation has risen by 3.6% over the last two years. Looks like we have a slight disconnect.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/01-overflow/Case%20Shiller%20NSA.jpg

This entire contrived episode has been designed to lure dupes back into the market, artificially inflate the insolvent balance sheets of the Too Big To Trust banks, enrich the feudal overlords who have easy preferred access to the Federal Reserve easy money, and provide the propaganda peddling legacy media with a recovery storyline to flog to the willingly ignorant public. The masses desperately want a feel good story they can believe. The ruling class has a thorough understanding of Edward Bernays’ propaganda techniques.

“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. …We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of.”  

Ben Bernanke increased his balance sheet by $3.2 trillion (450%) since 2008, and it had to go somewhere. We know it didn’t trickle down to the 99%. It was placed in the firm clutches of the .1% billionaire club. Bernanke sold his QE schemes as methods to benefit Main Street Americans, when his true purpose was to benefit Wall Street crooks. 30 year mortgage rates were 4.25% before QE2. 30 year mortgage rates were 3.5% before QE3. Today they stand at 4.5%. QE has not benefited average Americans. They are getting 0% on their savings, mortgage rates are higher, and their real household income has fallen and continues to fall.

But you’ll be happy to know banking profits are at all-time highs, Blackrock and the rest of the Wall Street Fed front running crowd have made a killing in the buy and rent ruse, and record bonuses are being doled out to the men who have wrecked our financial system in their gluttonous plundering of the once prosperous nation. Their felonious machinations have added zero value to society, while impoverishing a wide swath of America. Bernanke, Yellen and their owners have used their control of the currency, interest rates, and regulatory agencies to create the widest wealth disparity between the haves and have-nots in world history. Their depraved actions on behalf of the .1% will mean blood.

 

Just as Greenspan’s easy money policies of the early 2000’s created a housing bubble, inspiring low IQ wannabes to play flip that house, Bernanke’s mal-investment inducing QEternity has lured the get rich quick crowd back into the flipping business. The re-propagation of Flip that House shows on cable is like a rerun of the pre-bubble bursting frenzy in 2005. RealtyTrac’s recent report details the disturbing lemming like trend among greedy institutions and dullard brother-in-laws across the land.

  • 156,862 single family home flips — where a home is purchased and subsequently sold again within six months — in 2013, up 16% from 2012 and up 114% from 2011.
  • Homes flipped in 2013 accounted for 4.6% of all U.S. single family home sales during the year, up from 4.2% in 2012 and up from 2.6% in 2011     

Source: Realty Trac

The easy profits just keep flowing when the Fed provides the easy money. What could possibly go wrong? Home prices never fall. A brilliant Ivy League economist said so in 2005. The easy profits have been reaped by the early players. Wall Street hedge funds don’t really want to be landlords. Flippers need to make a quick buck or their creditors pull the plug. Home prices peaked in mid-2013. They have begun to fall. The 35% increase in mortgage rates has removed the punchbowl from the party. Anyone who claims housing will improve in 2014 is either talking their book, owns a boatload of vacant rental properties, teaches at Princeton, or gets paid to peddle the Wall Street propaganda on CNBC.

Reality will reassert itself in 2014, with lemmings, flippers, and hedgies getting slaughtered as the housing market comes back to earth with a thud. The continued tapering by the Fed will remove the marginal dollars used by Wall Street to fund this housing Ponzi. The Wall Street lemmings all follow the same MBA created financial models. They will all attempt to exit the market simultaneously when their models all say sell. If the economy improves, interest rates will rise and kill the housing market. If the economy tanks, the stock market will plunge, creating fear and killing the housing market. Once it becomes clear that prices have begun to fall, the flippers will panic and start dumping, exacerbating the price declines. This scenario never grows old.

Real household income continues to fall and nearly 25% of all households with a mortgage are still underwater. Young people are saddled with $1 trillion of government peddled student loan debt and will not be buying homes in the foreseeable future. Dodd-Frank rules will result in fewer people qualifying for mortgages. Mortgage insurance is increasing. Obamacare premium increases are sucking the life out of potential middle class home buyers. Retailers have begun firing thousands. The financial class had a good run. They were able to re-inflate the bubble for two years, but the third year won’t be a charm. In a normal housing market 85% of home sales would be between individuals using a mortgage, 10% would be all cash transactions, less than 5% of sales would be distressed, and 40% would be first time buyers. In this warped market only 40% of home sales are between individuals using a mortgage, 42% are all cash transactions, 16% are distressed sales, 5% are flipped, and only 27% are first time buyers. The return to normalcy will be painful for shysters, gamblers, believers, paid off economists, Larry Yun, and CNBC bimbos.