America's largest servicer, Bank of America, has suspended foreclosures cases in 23 states in order to amend any faulty affidavits, Richard Simon, a spokesman for the country's largest lender told HousingWire.
It is the third bank to officially suspend foreclosures and admit to signing affidavits without a knowledge of the documents or a notary present. The personnel who signed these documents quickly are now referred to as "robo-signers." Ally Financial, formerly GMAC Mortgage and JPMorgan Chase are believed to have already suspended foreclosures for similar reasons.
"We have been assessing our existing processes. To be certain affidavits have followed the correct procedures, Bank of America will delay the process in order to amend all affidavits in foreclosure cases that have not yet gone to judgment in the 23 states where courts have jurisdiction over foreclosures," Simon said.
Regulators and state attorneys general offices have demanded meetings, reviews and even moratoriums on foreclosures from both Ally Financial and JPMorgan Chase. The same reaction can be expected for Bank of America.
As of March, BofA's servicing portfolio totaled 13.7 million mortgages for an unpaid principal balance of roughly of $2.1 trillion, according to Moody's Investors Service.
An executive at a third-party mortgage company told HousingWire that the threat of these faulty affidavits would go beyond foreclosures and even the disqualification of the homebuyer tax credit for some, according to a HousingWire report earlier. The entire recovery in the housing market could be at risk. The unnamed source requested not to be identified because of the sensitivity of the issue.
"The entire economy will be hurt by these extensions. I can understand that they appear to be in the best interest of the consumer, but we continue to delay the impact of the financial restabilizing or the finanicial rebalancing of our economy. We're putting borrowers in homes without making mortgage payments, and at the end of the day the taxpayers are the ones picking up the tabs for this stuff," the executive said.
Neither Wells Fargo or Citigroup have confirmed a foreclosure suspension as they review their documents.
Friday, October 1st, 2010, 4:09 pm
by JON PRIOR
View original article: http://www.housingwire.com/2010/10/01/bank-of-america-to-delay-foreclosures
Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.
Wednesday, October 6, 2010
Zillow: 30-year FRMs hit record low at 4.16%
by CHRISTINE RICCIARDI
The 30-year, fixed-mortgage rate decreased from a week earlier, setting a new record low at 4.16%, according to the Zillow Mortgage Marketplace weekly update.
The national average ticked up slightly throughout September after 11 consecutive weeks of decline. Zillow said the current 15-year, fixed average rate is 3.67% and the rate for a 5-1 adjustable rate mortgage is 3.01%. That type of mortgage maintains a steady rate for five years and then is adjusted annually thereafter.
Regionally, 30-year rates vary, but the majority of states witnessed a deflation. Rates in Florida fell to 4.09% from 4.23% the previous week, New York's average rate was 4.04% last week, down from 4.17%, California's rate decreased to 4.18% from 4.21%, and Texas saw its average rate disintegrate to 4.15% from 4.22%.
Meanwhile Pennsylvania's current rate of 4.17% is up from 4.16% last week. Massachusetts' average rate for a 30-year fixed mortgage grew to 4.22% from 4.19% at Sept. 27.
Washington's 30-year FRM remained constant at 4.16%.
Zillow bases its averages on real-time mortgage quotes from lenders registered with the company. The national average comes from thousands of daily quotes by anonymous borrowers through the Seattle-based company's website.
View original article: http://www.housingwire.com/2010/10/05/zillow-30-year-frms-hit-record-low-at-4-16
Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.
The 30-year, fixed-mortgage rate decreased from a week earlier, setting a new record low at 4.16%, according to the Zillow Mortgage Marketplace weekly update.
The national average ticked up slightly throughout September after 11 consecutive weeks of decline. Zillow said the current 15-year, fixed average rate is 3.67% and the rate for a 5-1 adjustable rate mortgage is 3.01%. That type of mortgage maintains a steady rate for five years and then is adjusted annually thereafter.
Regionally, 30-year rates vary, but the majority of states witnessed a deflation. Rates in Florida fell to 4.09% from 4.23% the previous week, New York's average rate was 4.04% last week, down from 4.17%, California's rate decreased to 4.18% from 4.21%, and Texas saw its average rate disintegrate to 4.15% from 4.22%.
Meanwhile Pennsylvania's current rate of 4.17% is up from 4.16% last week. Massachusetts' average rate for a 30-year fixed mortgage grew to 4.22% from 4.19% at Sept. 27.
Washington's 30-year FRM remained constant at 4.16%.
Zillow bases its averages on real-time mortgage quotes from lenders registered with the company. The national average comes from thousands of daily quotes by anonymous borrowers through the Seattle-based company's website.
View original article: http://www.housingwire.com/2010/10/05/zillow-30-year-frms-hit-record-low-at-4-16
Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.
Friday, October 1, 2010
Student Housing Offers Some Stability For Real Estate Investors
One thing we do have in Historic Downtown Savannah is plenty of student housing. Let me know if you or anyone you know is looking, because there are some good deals for units with solid rental history.
RISMEDIA, October 1, 2010--(MCT)--The housing market is still in the tank and doesn't seem likely to emerge anytime soon, but there are investment opportunities in one segment: student housing.
It's not a risk-free proposition, and it's far more management-intensive than conventional multifamily properties. But student housing has a long history of growth and stability and promises to repeat the pattern as college enrollment stays on its upward trajectory.
"Demand and supply conditions for housing are bad," said David Stiff, chief economist with Fiserv, which publishes the Case-Shiller Home Price Index. "But in college towns, demand conditions are slightly better. There's a stable source of new demand every year."
There are at least three paths to investment in college towns: individually; in a partnership, or as a shareholder in one of two publicly traded real estate investment trusts, American Campus Communities Inc. and Education Realty Trust Inc.
An initial public offering is on deck for a third, Campus Crest Communities Inc., which expects to list on the New York Stock Exchange under the symbol "CCG."
REITs focused on student housing have become investment magnets for large pension funds. Some bigger syndicates have partnerships with larger funds. Campus Advantage Inc., one of the nation's largest private student-housing companies, is managing and helping to develop properties for the California Public Employees Retirement System.
"Comparable to other similar product-type investment opportunities, student housing is a really good investment," said Michael Orsak, vice president at Campus Advantage, which manages and owns 50 properties across the U.S., mostly in the Southeast, Midwest and Texas. The industry measures its size based on beds. For Campus Advantage, that translates into 30,000 beds.
"These investments return pretty stable cash-on-cash yields going in and should continue to hold up in the long term vs. other similar product types that might have larger peaks and troughs in occupancy and rental-rate growth," he said.
Orsak said most institutions can expect a cash-on-cash yield in the first year at 8 percent to 9 percent. "I don't know where a pension fund can find that today in the stock market or bonds," he said.
Though markets differ by campus — large public universities have steady enrollment; smaller schools are growing exponentially — the national statistics on enrollment are strong.
In 2010, a record 19.1 million students were enrolled in two-year and four-year colleges and universities, a 25 percent jump since 2000, according to the National Center for Education Statistics. That underscores a consistent uptick in enrollment that is expected to continue — albeit at a slower pace — until at least 2018, as the last of the baby boomers' children reach college age.
Coupled with the recession, which has prompted many to go back to school for second and advanced degrees, enrollment in post-secondary schools has rarely been so robust.
Moreover, today's students aren't living in the kind of housing their parents once inhabited. Many are leaving a home where they had their own bedroom and bathroom, a separate family or media room and amenities either at home or nearby. They expect the same when they leave campus — and parents appear willing to pay for it.
Campus Crest, which owns and manages 27 properties, or 13,580 beds, boasts of its amenities in its initial public offering prospectus. All of its properties — which, like Campus Advantage and ACC, are considered Class A — offer what Campus Crest calls "bed-bath parity," or a private bathroom for each student.
The Campus Crest properties all have Internet access, a full kitchen with up-to-date appliances, washers and dryers inside each unit, ample parking and a broad array of other on-site amenities, such as "resort-style swimming pools, tanning booths, basketball and volleyball courts, game rooms, coffee bars and community clubhouses with regularly planned social activities." Plus they're all fully furnished.
"We strive to offer not just an apartment but an entire lifestyle and community experience designed to appeal to the modern-day college student," according to the IPO documents.
Education Realty Trust takes a similar, resort-like approach to its owned and managed properties, which consist of more than 37,800 beds in 22 states, with a high concentration in Florida and Georgia.
All of these perks cost money, of course, and the monthly price on a student apartment is generally about 10 percent to 20 percent higher than a traditional apartment.
"The tenants are not constrained by real-life economics because, of course, they're not footing the bill," said Joung Park, an analyst who covers ACC for investment researcher Morningstar Inc. "Typically the parents are back-stopping the lease too, so there are fewer defaults."
The key difference for student-housing landlords is that they charge by the bed, not by the unit, Park said. "That allows them to get a little more on rents because they can put multiple beds in one unit."
In many cases, charging higher rent is the only way for an owner to turn a profit. Student housing can be a management nightmare, and costs considerably more to operate than conventional multi-family housing. The expense ratio on conventional apartments will run anywhere from 35 percent to 38 percent of revenues, according to Orsak. Student-housing sites have expenses that are at least 45 percent of revenues.
Utility costs are usually higher, as are maintenance costs. A property can get banged up pretty quickly. Holes in the walls need frequent repair, drains are often clogged, landscaping is rarely maintained, and the overall cleanliness of the place is often questionable.
"These are young adults who have newfound freedom," said David Arthur of Varsity Capital Advisors LLC, which has 1,000 beds split between the campuses at the University of New Hampshire in Durham and Marshall University in Huntington, W. Va. "We constantly have to remind them that they are now young adults and not children in various ways."
Varsity Capital's portfolios consist of B-grade property, which are more traditional apartments with four beds that share a bathroom. The locations are close to campus and tend to be anywhere from $50 to $175 a month per bed cheaper than Class A sites.
Occupancy averages about 98 percent, Arthur said, and rents have seen a steady increase of 3 percent to 5 percent over the last four years. Varsity Capital's biggest competitors are the REITS or larger privately owned groups, he noted.
Accordingly, he advised a smaller syndicate or an individual player to focus on properties around larger public universities.
"We pick state schools because they have a hard time finding funding for new housing," he said. "They tend to spend more money on their plants and their labs vs. trying to pay for new dorms."
Smaller schools tend to have more private money available for student housing and could build a dorm and require all students to live in it. At larger state schools like the University of Wisconsin-Madison, roughly 25 percent of the student population lives on campus.
On the other hand, Miami University of Ohio, which has around one-third the student population of UW-Madison, owns all of its dorms and requires both freshmen and sophomores to live on campus.
Orsak of Campus Advantage said investors should shy away from states where budgets are strained, like in California and Florida. He also advised avoiding schools in rural areas or in states with plenty of open land, like Michigan.
Multi-family housing real estate investment trusts have struggled during the recession while their student-housing peers have done well, according to Morningstar. American Campus Communities' stock, for example, produced a 44 percent return in 2009 and year-to-date is up almost 9 percent. It has outperformed its REIT peers since 2007 and the S&P 500 in three of the past four years.
Still, Morningstar analyst Park warns that valuations may have peaked. American Campus Communities stock, for example, is near the top of its 52-week high.
"The business conditions and the whole industry dynamic of student housing is healthier than your run-of-the-mill REIT," Park said. "But you also have to look at valuations. These guys have had a good run, and we have them now fairly valued." By Morningstar's definition, that's neither a buy nor a sell.
By Campus Advantage's reckoning, the window for growth is still wide open.
"Right now is probably the most intense time in student housing acquisitions," Orsak said, noting that there's about $41.3 billion in student-housing properties actively on the market. "I've never seen that large of an available pipeline. This is an exciting time to be in student housing."
By Jennifer Waters
(c) 2010, MarketWatch.com Inc.
Distributed by McClatchy-Tribune Information Services.
RISMEDIA, October 1, 2010--(MCT)--The housing market is still in the tank and doesn't seem likely to emerge anytime soon, but there are investment opportunities in one segment: student housing.
It's not a risk-free proposition, and it's far more management-intensive than conventional multifamily properties. But student housing has a long history of growth and stability and promises to repeat the pattern as college enrollment stays on its upward trajectory.
"Demand and supply conditions for housing are bad," said David Stiff, chief economist with Fiserv, which publishes the Case-Shiller Home Price Index. "But in college towns, demand conditions are slightly better. There's a stable source of new demand every year."
There are at least three paths to investment in college towns: individually; in a partnership, or as a shareholder in one of two publicly traded real estate investment trusts, American Campus Communities Inc. and Education Realty Trust Inc.
An initial public offering is on deck for a third, Campus Crest Communities Inc., which expects to list on the New York Stock Exchange under the symbol "CCG."
REITs focused on student housing have become investment magnets for large pension funds. Some bigger syndicates have partnerships with larger funds. Campus Advantage Inc., one of the nation's largest private student-housing companies, is managing and helping to develop properties for the California Public Employees Retirement System.
"Comparable to other similar product-type investment opportunities, student housing is a really good investment," said Michael Orsak, vice president at Campus Advantage, which manages and owns 50 properties across the U.S., mostly in the Southeast, Midwest and Texas. The industry measures its size based on beds. For Campus Advantage, that translates into 30,000 beds.
"These investments return pretty stable cash-on-cash yields going in and should continue to hold up in the long term vs. other similar product types that might have larger peaks and troughs in occupancy and rental-rate growth," he said.
Orsak said most institutions can expect a cash-on-cash yield in the first year at 8 percent to 9 percent. "I don't know where a pension fund can find that today in the stock market or bonds," he said.
Though markets differ by campus — large public universities have steady enrollment; smaller schools are growing exponentially — the national statistics on enrollment are strong.
In 2010, a record 19.1 million students were enrolled in two-year and four-year colleges and universities, a 25 percent jump since 2000, according to the National Center for Education Statistics. That underscores a consistent uptick in enrollment that is expected to continue — albeit at a slower pace — until at least 2018, as the last of the baby boomers' children reach college age.
Coupled with the recession, which has prompted many to go back to school for second and advanced degrees, enrollment in post-secondary schools has rarely been so robust.
Moreover, today's students aren't living in the kind of housing their parents once inhabited. Many are leaving a home where they had their own bedroom and bathroom, a separate family or media room and amenities either at home or nearby. They expect the same when they leave campus — and parents appear willing to pay for it.
Campus Crest, which owns and manages 27 properties, or 13,580 beds, boasts of its amenities in its initial public offering prospectus. All of its properties — which, like Campus Advantage and ACC, are considered Class A — offer what Campus Crest calls "bed-bath parity," or a private bathroom for each student.
The Campus Crest properties all have Internet access, a full kitchen with up-to-date appliances, washers and dryers inside each unit, ample parking and a broad array of other on-site amenities, such as "resort-style swimming pools, tanning booths, basketball and volleyball courts, game rooms, coffee bars and community clubhouses with regularly planned social activities." Plus they're all fully furnished.
"We strive to offer not just an apartment but an entire lifestyle and community experience designed to appeal to the modern-day college student," according to the IPO documents.
Education Realty Trust takes a similar, resort-like approach to its owned and managed properties, which consist of more than 37,800 beds in 22 states, with a high concentration in Florida and Georgia.
All of these perks cost money, of course, and the monthly price on a student apartment is generally about 10 percent to 20 percent higher than a traditional apartment.
"The tenants are not constrained by real-life economics because, of course, they're not footing the bill," said Joung Park, an analyst who covers ACC for investment researcher Morningstar Inc. "Typically the parents are back-stopping the lease too, so there are fewer defaults."
The key difference for student-housing landlords is that they charge by the bed, not by the unit, Park said. "That allows them to get a little more on rents because they can put multiple beds in one unit."
In many cases, charging higher rent is the only way for an owner to turn a profit. Student housing can be a management nightmare, and costs considerably more to operate than conventional multi-family housing. The expense ratio on conventional apartments will run anywhere from 35 percent to 38 percent of revenues, according to Orsak. Student-housing sites have expenses that are at least 45 percent of revenues.
Utility costs are usually higher, as are maintenance costs. A property can get banged up pretty quickly. Holes in the walls need frequent repair, drains are often clogged, landscaping is rarely maintained, and the overall cleanliness of the place is often questionable.
"These are young adults who have newfound freedom," said David Arthur of Varsity Capital Advisors LLC, which has 1,000 beds split between the campuses at the University of New Hampshire in Durham and Marshall University in Huntington, W. Va. "We constantly have to remind them that they are now young adults and not children in various ways."
Varsity Capital's portfolios consist of B-grade property, which are more traditional apartments with four beds that share a bathroom. The locations are close to campus and tend to be anywhere from $50 to $175 a month per bed cheaper than Class A sites.
Occupancy averages about 98 percent, Arthur said, and rents have seen a steady increase of 3 percent to 5 percent over the last four years. Varsity Capital's biggest competitors are the REITS or larger privately owned groups, he noted.
Accordingly, he advised a smaller syndicate or an individual player to focus on properties around larger public universities.
"We pick state schools because they have a hard time finding funding for new housing," he said. "They tend to spend more money on their plants and their labs vs. trying to pay for new dorms."
Smaller schools tend to have more private money available for student housing and could build a dorm and require all students to live in it. At larger state schools like the University of Wisconsin-Madison, roughly 25 percent of the student population lives on campus.
On the other hand, Miami University of Ohio, which has around one-third the student population of UW-Madison, owns all of its dorms and requires both freshmen and sophomores to live on campus.
Orsak of Campus Advantage said investors should shy away from states where budgets are strained, like in California and Florida. He also advised avoiding schools in rural areas or in states with plenty of open land, like Michigan.
Multi-family housing real estate investment trusts have struggled during the recession while their student-housing peers have done well, according to Morningstar. American Campus Communities' stock, for example, produced a 44 percent return in 2009 and year-to-date is up almost 9 percent. It has outperformed its REIT peers since 2007 and the S&P 500 in three of the past four years.
Still, Morningstar analyst Park warns that valuations may have peaked. American Campus Communities stock, for example, is near the top of its 52-week high.
"The business conditions and the whole industry dynamic of student housing is healthier than your run-of-the-mill REIT," Park said. "But you also have to look at valuations. These guys have had a good run, and we have them now fairly valued." By Morningstar's definition, that's neither a buy nor a sell.
By Campus Advantage's reckoning, the window for growth is still wide open.
"Right now is probably the most intense time in student housing acquisitions," Orsak said, noting that there's about $41.3 billion in student-housing properties actively on the market. "I've never seen that large of an available pipeline. This is an exciting time to be in student housing."
By Jennifer Waters
(c) 2010, MarketWatch.com Inc.
Distributed by McClatchy-Tribune Information Services.
Foreclosures Sell at 26%
More foreclosure news from CNNMoney.com this morning. Georgia, not mentioned in the article, has a 41% foreclosure savings and has the 7th-highest number of foreclosures nationally, with about 1 in every 246 households receiving a foreclosure filing in August, 2010.
NEW YORK (CNNMoney.com) -- Homes lost to foreclosure now make up a quarter of the real estate market -- and they're selling at big bargains. Nearly 250,000 residential properties in some stage of foreclosure changed hands during the second quarter, RealtyTrac reported Thursday, September 30. They sold for about 26% less than non-foreclosed homes, compared to 35% less in the first quarter.
A little more than half of these deals were of properties repossessed by banks, the remainder came from the ranks of short sales -- where banks allow homeowners to sell for less than they owe on the mortgage.
There was much regional variation in the foreclosure sales data. Rust Belt states such as Ohio and Michigan had moderately or high levels of foreclosure sales, but the former bubble states is where foreclosures continue to dominate.
In Nevada, they accounted for 56% of all transactions, the highest percentage in the nation. Arizona (47%) and California (43%) also had very high levels.Foreclosure sales were much rarer in Iowa (4.4%), the District of Columbia (5.6%), Montana (6.4%) and New York (7.5%).
The sharpest foreclosure deals were to be found in Ohio, where foreclosure properties sold for 43% less than non-foreclosed homes. Kentucky's discount was 41%, and California's 39%.Original Article: http://money.cnn.com/2010/09/30/real_estate/foreclosure_sales_grow/index.htm
Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.
America's Smartest Cities
NEW YORK (CNNMoney.com) -- Ever wonder what happened to your high school valedictorian? He or she might just have wound up in Washington, D.C. That metro area has the nation's highest percentage of residents with college degrees.
Call it America's brainiest place to live.
In the District and surrounding suburbs, 47.3% of people 25 years or older have bachelor's, master's, professional school or doctorate degrees, according to new Census Bureau data released Tuesday. The national average barely tips 25%.
The figures don't surprise John Schmidt, senior economist with the Center for Economic and Policy Research in D.C. The city is built on jobs that require degrees.
"There's a very high share of federal government employees here," he said, "and people dealing with the federal government, including defense contractors, lobbyists, businesses that want to influence the regulatory process; there's lots of lawyers."
"Clearly, the biggest factor is still the presence of federal government jobs," he added. "But a lot of people in the 20s and 30s come here interested in public policy. There's an excitement about being in Washington, especially among young people who want to make a difference in the world."
In second-place San Francisco, 43.5% of residents have college degrees or better; San Jose, Calif., the hub of Silicon Valley, ranked third at 43.2%; and Raleigh, N.C., one of the points in that state's "Research Triangle," came in fourth at 42.2%.
Boston, where so many great universities are located, also boasts 42.2% of its population having a degree.
Of course, salaries in those towns are also higher than the national average. That's because a highly educated population is a key to growth and prosperity. Washington, D.C., for example, has the highest median household income of any metro area of more than 1 million residents.
"There's a very high correlation between earnings and educational attainment," said Todd Gabe, an economics professor at the University of Maine. .
Cities also tend to specialize in the kinds of educated residents they attract. San Jose, for example, has a high percentage of residents whose degrees are in computer science or information technology.
That works great for those cities where degrees lead to high-paying jobs. But other areas may have just as many college-educated but salaries can be lower than you'd expect because the degrees are in lower paying fields like teaching or journalism.
"Some types of knowledge are much more highly compensated than others," said Gabe.
Many other "creative class" types -- the artists, web designers, innovative business entrepreneurs and other thinkers -- also tend to coalesce around cities with an educated population.
Places like New York, where 35.6% of over-25 population have degrees, exemplify that kind of city, as does Los Angeles (30.2%) and San Diego (30.6%).
The metro areas with the lowest levels of educational attainment tend to be the "Building or Comforting Regions," as coined by a Rotman School of Management at the University of Toronto study.
Comforting Regions include resorts areas such as Las Vegas, which cater to vacationers, and where the percentage of residents with degrees is only 21.5%.
One good example of a Building city is Riverside, Calif., where only 19.2% of the population has degrees. When residential development was in full flower, there were good paying jobs available to construction workers and others without degrees.
Since the bust, however, the unemployment rate there has jumped to nearly 15% and income has declined. The median household income dropped more than 6% in 2009 to $53,815.
Other less educated populations are in Memphis, Tenn. (24.2%), Tampa, Fla. (24.6%), and San Antonio (24.8%).View original article: http://money.cnn.com/2010/10/01/pf/college/Americas_brainiest_cities/index.htm?hpt=T2
Blogger Matthew Allan is a specialist in Savannah Real Estate, focusing on Savannah's downtown historic districts, including the Landmark Historic District, Victorian Historic District, Thomas Square Historic District, Starland Historic District, Baldwin Park, and Ardsley Park Historic District.
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