Survey Shows Lenders Still Cautious Release date: 07/22/09
Nearly three out of four major U.S. banks tightened their underwriting standards for residential mortgage loans in the 12 months ending March 31, and one in five discontinued or planned to discontinue one or more retail mortgage products.
While not unexpected, those and other findings of an annual survey by the U.S. Office of the Comptroller of the Currency demonstrate the extent of a second consecutive year of tightened lending standards following four years of eased underwriting.
The survey included the 59 largest national banks and $3.6 trillion in commercial residential loans of all types, or more than 84 percent of all outstanding loans in the national banking system.
Among the 52 banks engaged in retail mortgage lending during the survey period, 73 percent reported tightening standards and six said they have exited or plan to exit the business altogether.
That compares with 56 percent of banks that reported tightening underwriting standards for residential mortgages the year before and 14 percent two years ago.
For the second year in a row, no banks reported easing underwriting standards on residential mortgage loans, although 27 percent left them unchanged.
One in five banks had discontinued or planned to discontinue one or more retail mortgage products -- a sign of a diminished appetite for risk, OCC said. None of the banks surveyed offered payment-option adjustable-rate mortgage (ARM) loans.
In addition to residential first mortgages, the survey examined practices in six other categories, including home-equity loans, high-loan-to-value (LTV) home-equity loans, credit cards, and affordable housing.
Taken as a whole, the survey showed tightened standards for 71 percent of retail loan products, no change in the standards for 29 percent, and easing of standards for less than 1 percent of retail loan products.
Banks tightening their retail lending standards cited more stringent collateral requirements, pricing and loan fees, and debt-service requirements, OCC examiners said.
Despite the additional tightening of standards, examiners still expect retail credit risk to continue to increase over the next 12 months at 87 percent of the banks -- particularly in home-equity and credit-card portfolios.
During the survey period, all but one of the 14 banks still making high-LTV home-equity loans said they tightened their standards, and all of the banks had either exited that business in the last 12 months or planned to do so.
Of the 51 major banks making conventional home-equity loans, 78 percent said they tightened their standards during the survey period, and 94 percent said their level of credit risk from such loans had increased.
Source: Inman News
Wednesday, July 22, 2009
Interesting Numbers Presentation...
In our office meeting this morning we were presented with some very interesting statistics as to where the market is heading, where we have been and the new definition of "normal" that we are all going to have to learn to live with.
Overall, Forsyth county in particular seems to be faring well compared to it's closest counterparts, especially Alamance and Guilford counties. I am going to focus on the numbers from the WS MLS because that is where I hold my membership, that is what covers the majority of Forsyth county and what effects most of you readers.
As of right now, based on Winston-Salem MLS stats, the following holds true:
Average Active Days on the Market-----148 days
Average Active Listing Price------------$236,839
Average Closed Price-------------------$172,888
Total Active Units-----------------------2,995
Total 2009 Closed Units-----------------1275
List Price to Close Price Ratio for 2009---95.63%
2009 Current Inventory Supply----------10.5 months
The most interesting part of this presentation was that homes listed over $600,000 in our area have a 36 month average time on the market!! By contrast, under $599,900 the time is cut in 1/2 at just 18 months! Attributed to difficultly in obtaining jumbo mortgages, foreclosures, conservation of resources and influx of inventory, the message is that pricing does matter.
More numbers to follow as the report is emailed to us...these are just from my notes...amazing stuff...recovery of pricing and stabilization not expected until 2012...let's settle in, get used to these numbers, familiarize ourselves with our market and make the best of our situation, as it is more fortunate than others across the nation!
Ciao!
Brooke
Overall, Forsyth county in particular seems to be faring well compared to it's closest counterparts, especially Alamance and Guilford counties. I am going to focus on the numbers from the WS MLS because that is where I hold my membership, that is what covers the majority of Forsyth county and what effects most of you readers.
As of right now, based on Winston-Salem MLS stats, the following holds true:
Average Active Days on the Market-----148 days
Average Active Listing Price------------$236,839
Average Closed Price-------------------$172,888
Total Active Units-----------------------2,995
Total 2009 Closed Units-----------------1275
List Price to Close Price Ratio for 2009---95.63%
2009 Current Inventory Supply----------10.5 months
The most interesting part of this presentation was that homes listed over $600,000 in our area have a 36 month average time on the market!! By contrast, under $599,900 the time is cut in 1/2 at just 18 months! Attributed to difficultly in obtaining jumbo mortgages, foreclosures, conservation of resources and influx of inventory, the message is that pricing does matter.
More numbers to follow as the report is emailed to us...these are just from my notes...amazing stuff...recovery of pricing and stabilization not expected until 2012...let's settle in, get used to these numbers, familiarize ourselves with our market and make the best of our situation, as it is more fortunate than others across the nation!
Ciao!
Brooke
Sunday, July 19, 2009
What about foreclosures?
After the interview the other night on WXII 12, http://www.wxii12.com/money/20083045/detail.html
I have been getting some questions about how to find foreclosures. Folks are hearing that the numbers of foreclosures are up in NC and our area and when they hear that, they hear "deal." There are also credits out there for purchasing foreclosures but the details can be sketchy and may vary from bank to bank. I have just responded to an email from a client and thought I would share it with you.
Dear ________,
There is not a central search engine for foreclosures, so we have to look at the basic criteria in MLS which fits your needs (price, size, location, etc.) and then review each set of comments, as that is the only place it is disclosed to us (Realtors).
My word of caution is grant/assistance money or no, you most always get what you pay for. Keep in mind the foreclosures are purchased as-is, where-is, and if the area has a foreclosure, it usually is not the only foreclosure in the area, which could drive your price down regardless of the amount you paid or the improvements you make. You have no idea when you purchase these homes what the maintenance history has been or any additional background on the home. Now, this isn’t to say that you know everything about owner-occupied, existing homes either, but at a minimum you are dealing with a person, not a bank.
I used to do about 30-40% of my business in foreclosures and found that by the time the bank got them back into their asset management, paid everyone and everything off and got the home up to showing standards, that sometimes it wasn’t anymore of a "deal" than other homes in the area—it just happened to say “foreclosure.” Sometimes, finding a "distressed-seller" prior to bank possession is a better deal if you can get a home at or below “market value”. We do this by finding a home that meets your spatial and financial needs and then looking at the comps to establish value.
In regards to the credit, there are several government or charitable grants/credits out there floating around and I am not familiar with the specifics of the one you are asking about regarding foreclosures. Even though the credit may exist, keep in mind that if you are going with an FHA loan, which I believe you were, that the home you put under contract has to meet the minimum condition standards of FHA and be able to pass their appraisal condition and value standards. This alone may rule out the purchase of foreclosures for folks trying to use FHA or VA loans.
I hope this helps a bit and if you have any info on this matter, please post and share your experiences with us!
Brooke
I have been getting some questions about how to find foreclosures. Folks are hearing that the numbers of foreclosures are up in NC and our area and when they hear that, they hear "deal." There are also credits out there for purchasing foreclosures but the details can be sketchy and may vary from bank to bank. I have just responded to an email from a client and thought I would share it with you.
Dear ________,
There is not a central search engine for foreclosures, so we have to look at the basic criteria in MLS which fits your needs (price, size, location, etc.) and then review each set of comments, as that is the only place it is disclosed to us (Realtors).
My word of caution is grant/assistance money or no, you most always get what you pay for. Keep in mind the foreclosures are purchased as-is, where-is, and if the area has a foreclosure, it usually is not the only foreclosure in the area, which could drive your price down regardless of the amount you paid or the improvements you make. You have no idea when you purchase these homes what the maintenance history has been or any additional background on the home. Now, this isn’t to say that you know everything about owner-occupied, existing homes either, but at a minimum you are dealing with a person, not a bank.
I used to do about 30-40% of my business in foreclosures and found that by the time the bank got them back into their asset management, paid everyone and everything off and got the home up to showing standards, that sometimes it wasn’t anymore of a "deal" than other homes in the area—it just happened to say “foreclosure.” Sometimes, finding a "distressed-seller" prior to bank possession is a better deal if you can get a home at or below “market value”. We do this by finding a home that meets your spatial and financial needs and then looking at the comps to establish value.
In regards to the credit, there are several government or charitable grants/credits out there floating around and I am not familiar with the specifics of the one you are asking about regarding foreclosures. Even though the credit may exist, keep in mind that if you are going with an FHA loan, which I believe you were, that the home you put under contract has to meet the minimum condition standards of FHA and be able to pass their appraisal condition and value standards. This alone may rule out the purchase of foreclosures for folks trying to use FHA or VA loans.
I hope this helps a bit and if you have any info on this matter, please post and share your experiences with us!
Brooke
Thursday, July 16, 2009
Foreclosure Numbers Up--Why You Ask?
Just finished up an interview with WXII 12. The topic was the fact that foreclosure numbers are up 23% since last month here in the Triad. No one is giving any concrete reason for the change but there are some issues to speculate on and that's where I come in.
1-ARMs may be adjusting. May, June and July are pretty busy months and typical months to close real estate in due to the weather, school is out and folks are trying to relocate and register kids in schools elsewhere. If someone purchased a home 3-5 years ago when the market was booming and ARMs were all the rage and everyone was banking on having their job AND making more money, NOW they are dealing with that ARM adjusting. This adjustment could just be enough to send someone into foreclosure especially if margins and ratios were thin to begin with when originally qualified.
2-Unemployment benefits may be running out. Anyone who lost a job within the past year is probably on the verge of losing their benefits. Without new jobs to be had this will put folks in a pickle, especially if they had cut their family budgets and were just eeaking by with these monies.
3-Reserves have ran out. Even responsible buyers who saved 6-8 months of liquid reserves are coming on those funds drying up. Whereas family budget cuts were made and funds were skimpy, they were making it by with a little subsidy from the family's "rainy day fund"--that same fund may now be all dried up.
Those are three possibilities and of course each situation varies greatly. Though the foreclosures may be up the market overall is CERTAINLY NOT DOWN. We have been swamped with folks wanting to purchase and first time buyers wanting to take advantage of tax credits, inventory and low rates.
As we speak I am still here at the office after writing and having two of three offers accepted. We are still waiting on word from the last one submitted.
If you have input on why these numbers are up or want to share your experience with the current real estate market, by all means, POST!
Brooke
1-ARMs may be adjusting. May, June and July are pretty busy months and typical months to close real estate in due to the weather, school is out and folks are trying to relocate and register kids in schools elsewhere. If someone purchased a home 3-5 years ago when the market was booming and ARMs were all the rage and everyone was banking on having their job AND making more money, NOW they are dealing with that ARM adjusting. This adjustment could just be enough to send someone into foreclosure especially if margins and ratios were thin to begin with when originally qualified.
2-Unemployment benefits may be running out. Anyone who lost a job within the past year is probably on the verge of losing their benefits. Without new jobs to be had this will put folks in a pickle, especially if they had cut their family budgets and were just eeaking by with these monies.
3-Reserves have ran out. Even responsible buyers who saved 6-8 months of liquid reserves are coming on those funds drying up. Whereas family budget cuts were made and funds were skimpy, they were making it by with a little subsidy from the family's "rainy day fund"--that same fund may now be all dried up.
Those are three possibilities and of course each situation varies greatly. Though the foreclosures may be up the market overall is CERTAINLY NOT DOWN. We have been swamped with folks wanting to purchase and first time buyers wanting to take advantage of tax credits, inventory and low rates.
As we speak I am still here at the office after writing and having two of three offers accepted. We are still waiting on word from the last one submitted.
If you have input on why these numbers are up or want to share your experience with the current real estate market, by all means, POST!
Brooke
Wednesday, July 15, 2009
Movin' Up and On...
I know it's been a while since I last posted, but my Nanny passed away last week...more about that in a later post.
I am playing catch up this week and have now worked two back to back 12 hour days...and that, my friends, is what I want to catch you up on.
We have been BUSY! Regardless of what you may hear in the general media, our local real estate market has really seen a pick up. Now it's not what it was 3-5 years ago, but some of the numbers are comparable...I have 8 closings on the books for the next 3o days and that is definitely what I consider to be a strong month.
There are several factors that I attribute this increase in business to...
1: I didn't stop working when things slowed down. No, this isn't a pat on my back, but I am a full-time Realtor. Meaning that while some folks took it easy at the beach/mtns., got a second job, etc. I spent my time with my assistant working on new marketing techniques, tracking successful and not so successful marketing practices, keeping up databases, writing to you folks, etc. This is important and separates the "wheat from the chaff" as my dad would say. Thanks Barry!
2: I continue to market my listings, call my buyers and stay on top of new legislation and how it effects the real estate industry. I know you folks in other sectors don't have time to do it, that's why I do. Thanks Jake!
3: Referrals!!! Wow! I have been in the business 10 years this year December and folks who have worked with me know my style, know my work ethic and know that I am detail-oriented not to mention a "straight-shooter". This is no time for blowin' smoke...my previous clients know I can get the job done...from contract to closing. Thanks to all of my clients who refer business to me...your confidence in my ability means so much!
4: Hard work. It pays off. I have a great team of associates, a supportive family and fabulous clients...what more could a gal ask for?
5: Location. The Triad is a premier location for businesses relocating due to its proximity and the investment in infrastructure of the surrounding counties and municipalities. i.e aerotropolis, Fed/Ex, Honda Jet, Triad Business Park, medical industry and research, etc. What a great place to live!
6: Experience. I don't know it all by a long shot, but I do stay abreast of recent real estate trends, have a good deal of knowledge in negotiating offers and inspections, equity preservation, contracts, financing, legislative issues, etc. All of these experiences mean a virtually seamless transaction for my buyers and sellers. We use past experiences to anticipate issues and hurdles so that your transaction is as pleasant an experience as possible.
That's it...enough already. Point being, real estate is good, you need an experienced, dedicated agent who isn't scared to work and represent you. Visit www.BrookeCashion.com to learn more and to see my featured listings.
Brooke
I am playing catch up this week and have now worked two back to back 12 hour days...and that, my friends, is what I want to catch you up on.
We have been BUSY! Regardless of what you may hear in the general media, our local real estate market has really seen a pick up. Now it's not what it was 3-5 years ago, but some of the numbers are comparable...I have 8 closings on the books for the next 3o days and that is definitely what I consider to be a strong month.
There are several factors that I attribute this increase in business to...
1: I didn't stop working when things slowed down. No, this isn't a pat on my back, but I am a full-time Realtor. Meaning that while some folks took it easy at the beach/mtns., got a second job, etc. I spent my time with my assistant working on new marketing techniques, tracking successful and not so successful marketing practices, keeping up databases, writing to you folks, etc. This is important and separates the "wheat from the chaff" as my dad would say. Thanks Barry!
2: I continue to market my listings, call my buyers and stay on top of new legislation and how it effects the real estate industry. I know you folks in other sectors don't have time to do it, that's why I do. Thanks Jake!
3: Referrals!!! Wow! I have been in the business 10 years this year December and folks who have worked with me know my style, know my work ethic and know that I am detail-oriented not to mention a "straight-shooter". This is no time for blowin' smoke...my previous clients know I can get the job done...from contract to closing. Thanks to all of my clients who refer business to me...your confidence in my ability means so much!
4: Hard work. It pays off. I have a great team of associates, a supportive family and fabulous clients...what more could a gal ask for?
5: Location. The Triad is a premier location for businesses relocating due to its proximity and the investment in infrastructure of the surrounding counties and municipalities. i.e aerotropolis, Fed/Ex, Honda Jet, Triad Business Park, medical industry and research, etc. What a great place to live!
6: Experience. I don't know it all by a long shot, but I do stay abreast of recent real estate trends, have a good deal of knowledge in negotiating offers and inspections, equity preservation, contracts, financing, legislative issues, etc. All of these experiences mean a virtually seamless transaction for my buyers and sellers. We use past experiences to anticipate issues and hurdles so that your transaction is as pleasant an experience as possible.
That's it...enough already. Point being, real estate is good, you need an experienced, dedicated agent who isn't scared to work and represent you. Visit www.BrookeCashion.com to learn more and to see my featured listings.
Brooke
Subscribe to:
Posts (Atom)