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Category: Alejandro Lazo

Real Estate | Autos | Consumer | Economy

Five-month supply of distressed homes casts shadow on market

A bank-owned home for sale in Las Vegas

A “shadow” supply of 1.6 million homes facing foreclosure or already owned by banks is estimated to hang over the U.S real estate market -- these are properties that typically go uncounted by most real estate listing services.

The estimate represents about five months of supply as of October 2011, and was published Wednesday by the Santa Ana real estate data firm CoreLogic. This compares with a shadow supply of about 1.9 million units in October 2010, representing about seven months' supply then.

Florida, California and Illinois account for more than one-third of these properties, which can stand in the way of a housing recovery as most will end up as either foreclosures or so-called short sales, where a bank allows a home to be sold for less than the debt on the property.

RELATED:

Banks' foreclosure activity picks up

Many Americans expect to work until they're 80

Victims of improper foreclosure practices can submit claims

Photo: A bank-owned home for sale in Las Vegas. Credit: Robyn Beck / AFP/Getty Images

 

 

Realtors group says it overestimated home sales from 2007 to 2010

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A national real estate group sharply revised downward the number of homes it calculated were sold from 2007 to 2010, revealing a much weaker housing market than had been previously estimated.

In 2010, for instance, the National Assn. of Realtors revised its estimate of home sales 14.6% lower than what it had previously reported -- to about 4.2 million homes sold that year.

From 2007 to 2010, sales and inventory as reported by the group were downwardly revised by 14.3%, the group said on Wednesday. The group overstated sales during that period by about 3.5 million units, according to the Associated Press.

The drop was due to changes in the way the U.S. Census Bureau collects data and some sales being counted twice. Roughly half the revisions resulted from a decrease in people selling their own homes and instead turning to real estate agents as the housing market turned bleak in 2007, the group said.

Homes sold by owners are typically not counted by the local listing services tracked by the national real estate group. So when a greater share of home sellers than usual began using agents who use those listing services, that artificially increased the final home sale numbers, Lawrence Yun, chief economist for the group, said in a statement.

The revisions underscore a lack of data on the housing market. There is no government tally of home sales nationally, instead officials rely on private real estate groups to provide sales numbers. The government does publish an estimate of new home sales and starts.

The revised figures were checked by government agencies and by the Santa Ana firm CoreLogic, which first discovered the discrepancies in the real estate group’s figures earlier this year.

RELATED:

Banks' foreclosure activity picks up

Many Americans expect to work until they're 80

Victims of improper foreclosure practices can submit claims

-- Alejandro Lazo

Twitter.com/alejandrolazo

Photo: For-sale signs in Palo Alto. Credit: Paul Sakuma / Associated Press

KB Home earnings fall, but orders increase

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Los Angeles home builder KB Home posted lower earnings in the fiscal fourth quarter compared with a year earlier as the company sold fewer homes in higher cost areas. But another development signaled some cause for optimism: New orders for homes from the company grew.

The company reported net income of $13.9 million, or 18 cents a share, for the three months ending Nov. 30. That compared with $17.4 million, or 23 cents, during the same period a year earlier.

"We believe these results demonstrate our success in adapting to current market realities and positioning our business for the future,” Chief Executive Jeffrey Mezger said in a statement.

Revenues in the fourth quarter grew 6% over the previous year to $479.9 million, and net orders increased 38% to 1,494. For all of 2011, the company widened its net loss to $178.8 million. That compared with a 2010 loss of $69.4 million.

RELATED:

Banks' foreclosure activity picks up

Many Americans expect to work until they're 80

Victims of improper foreclosure practices can submit claims

-- Alejandro Lazo
Twitter.com/alejandrolazo

Photo: Associated Press

California sues Fannie Mae and Freddie Mac

California Atty. Gen. Kamala D. Harris in L.A.

California Atty. Gen. Kamala D. Harris has filed suit against mortgage titans Fannie Mae and Freddie Mac for refusing to answer subpoenas issued to the companies this year.

The suits, filed Tuesday in San Francisco County Superior Court, comes after investigators with the state attorney general's office presented the two firms with questions regarding their foreclosure, lending and mortgage-related practices in the state.

SEE THE DOCUMENTS:

California Sues Fannie Mae

California Sues Freddie Mac

The subpoenas ask the government-controlled finance companies to answer questions about their activities in California, including their roles as landlords that own thousands of foreclosed properties, The Times previously reported. The attorney general's office is also seeking details of Fannie and Freddie's mortgage-servicing and home-repossession practices.

In addition, investigators want to learn more about the companies' purchases and sponsorship of mortgage-backed securities in the Golden State. According to separate suits filed by Harris against Fannie and Freddie, the two companies refused to answer the questions. The filing of the suits was reported earlier by the Wall Street Journal.

RELATED:

Banks' foreclosure activity picks up

Many Americans say they will have to work until they're 80

Victims of improper foreclosure practices can submit claims

— Alejandro Lazo

Twitter.com/alejandrolazo

Photo: Atty. Gen. Kamala D. Harris in downtown Los Angeles. Credit: Al Seib / Los Angeles Times

New construction up sharply in November

New construction on homes and apartments increased sharply in November, a bright spot for the beleaguered U.S. real estate market
New construction on homes and apartments increased sharply in November, a bright spot for the beleaguered U.S. real estate market.

New housing starts last month rose 9.3% over a revised October estimate and were up 20.1% above November 2010. Homes and apartments were built at a rate last month that would produce 685,000 new units this year, when adjusted for seasonal variations, according to the Commerce Department.

The gains were largely driven by the volatile apartment sector, meaning the uptick could reverse itself. Single-family housing starts in November were up 2.3% over October, though down 1.5% over November 2010. Homes were built last month at a seasonally adjusted annual rate of 447,000 units.

"This was a good report," wrote economists Patrick Newport and Michelle Valverde of the consultancy IHS Global Insight. "The single-family market is finally getting off the mat and ... the multi-family segment is continuing to make small strides. ... [W]e should expect good housing start numbers in the upcoming months."

Starts were at their highest level in 19 months. Month over month, starts were up 22.6% in the West, 3.15 in the South and 53.8% in the Northeast. Starts were down 18.2% in the Midwest.

The number of building permits issued to builders also showed improvement, with new permits up 5.7% over October and 20.7% above the November 2010 rate. Permits were issued at a seasonally adjusted annual rate of 681,000 units.

"By historical standards, home-building activity is still very depressed, but at least it appears to be on an established upward trend,” Paul Diggle, property economist with Capital Economics, wrote in a note.

The new-home market this year has suffered worse than the one for previously owned homes as foreclosures continue to provide stiff competition for newly built properties.

New-home builders have turned to developing models for multi-generational families and touting their green credentials to distinguish themselves from foreclosure properties –- often competing against the very models they built during the boom years as little as four years ago.

RELATED:

Banks' foreclosure activity picks up

Many Americans say they will have to work until they're 80

Victims of improper foreclosure practices can submit claims

-- Alejandro Lazo
Twitter.com/alejandrolazo

Photo: A home under construction in Buckingham, Pa. Credit: William Thomas Cain / Getty Images

Nevada sues major foreclosure processing firm

A bank-owned home for sale in Las Vegas

This post has been updated. See below for details.

Nevada has filed suit against a major player in the foreclosure business, Lender Processing Services, claiming the company is responsible for perpetrating widespread consumer fraud in the Silver State.

The lawsuit against Florida-based LPS and several of its subsidiaries alleges that the company falsified, forged or fraudulently filed “countless” documents in foreclosure cases across the Silver State, requiring employees to execute or notarize as many as 4,000 foreclosure documents a day. The company is used by many major banks to process foreclosures, and the suit said the company is responsible for more than 50% of foreclosures annually.

“The robo-signing crisis in Nevada has been fueled by two main problems: chaos and speed,” Atty. Gen. Catherine Cortez Masto said in a statement. “We will protect the integrity of the foreclosure process. This lawsuit is the next, logical step in holding the key players in the foreclosure fraud crisis accountable.”

The suit also alleges that the company fraudulently notarized documents and forged signatures and hid the scope of the problem by “misrepresenting” that the problems were clerical errors. The suit also alleges that LPS imposed “inappropriate and arbitrary” deadlines on foreclosure attorneys working for them, leading to errors in the foreclosure process.

The suit also alleges the company blocked communication between those attorneys and their clients and demanded improper referral fees from those attorneys.

[Updated at 1:25 p.m., Dec.16: LPS, in a statement, said it had been cooperating with Masto’s office for more than 14 months, and that it would defend itself against the suit “vigorously.”

The company also accused Masto’s office of violating Nevada law by using a Washington firm, Cohen Milstein Sellers & Toll, to investigate the company. The company said that it has discovered problems with its past document practices, but added, "The company is not aware of any person who was wrongfully foreclosed upon as a result of a potential error in the processes used by our employees."]

RELATED:

Banks' foreclosure activity picks up

Many Americans say they will have to work until they're 80

Victims of improper foreclosure practices can submit claims

— Alejandro Lazo
Twitter.com/alejandrolazo

Photo: A bank-owned home for sale in Las Vegas. Credit: Robyn Beck / AFP/Getty Images

 

 

 

Southern California home sales increase in November with low prices

Home prices in the nation's largest cities fell from August to September, according to Standard & Poor's/Case-Shiller index of 20 American cities

Low prices for starter homes spurred some bargain hunting among home shoppers in Southern California last month, sending sales up slightly over last year. But higher-priced neighborhoods did not fare as well.

Overall, November sales were up 0.3% from October and 4.3% from November 2010 with 16,884 homes bought across the region, according to real estate research firm DataQuick of San Diego. Sales of newly built homes continued to suffer, declining 15.2% from the same period a year earlier, falling to the lowest level on record for a November.

The median home price for the region was $275,000 in November, up 1.9% from October but down 4.2% from November. The median is the price at which half the homes sold for more and half for less. It is heavily influenced by changes in the type of homes selling.

Short sales and foreclosures accounted for 51.3% of the market last month, DataQuick said.

RELATED:

Banks' foreclosure activity picks up

Many Americans say they will have to work until they're 80

Victims of improper foreclosure practices can submit claims

-- Alejandro Lazo
Twitter.com/alejandrolazo

Photo: A sign showing a property for sale. Credit: Images_of_Money via Flickr 

California, Nevada team up to investigate foreclosure fraud

Atty. Gen. Kamala Harris to join California's foreclosure probe with Nevada's investigation
California and Nevada, two states at the heart of the nation’s housing crisis, will join forces to investigate allegations of foreclosure fraud and other types of mortgage improprieties.

The agreement to share resources and work jointly is the latest sign that the nation’s state attorneys general want to be out front in cracking down on bank practices the housing crisis — from the selling of mortgage-backed securities to the handling of foreclosures.

At a joint news conference in Los Angeles on Tuesday, California Atty. Gen. Kamala D. Harris and Nevada Atty Gen. Catherine Cortez Masto said their offices would share litigation strategies and evidence would link their offices' civil and criminal teams.

The announcement comes less than a week after Massachusetts said it was suing the nation’s five largest mortgage servicers over alleged foreclosure illegalities. The move marked the first such litigation to be filed by a state.

Harris' office has opened a number of its own probes of the mortgage business. Investigators have subpoenaed information from Fannie Mae and Freddie Mac as part of a wide-ranging inquiry into lending and foreclosure practices in the state, The Times has previously reported. Her office also is investigating Bank of America and its mortgage arm Countrywide Financial, along with Citibank, seeking information on their sale of mortgaged-backed securities in California.

The new alliance between Harris and Masto comes as banks are working to strike a deal with a coalition of attorneys general who are working to seek relief for consumers allegedly wronged by faulty mortgage servicing and foreclosure practices.

Harris formally withdrew from those talks earlier this year. Masto has said Nevada officials would evaluate any proposal the talks might produce but would also push ahead with their own work. New York, Delaware, Kentucky and Minnesota also have signaled they are unhappy with the direction of the talks with the banks. All of those states have expressed concern that the banks could be let off too easily.

ALSO:

Banks' foreclosure activity picks up

California AG subpoenas Freddie, Fannie

BofA settles mortgage suit for $315 million

-- Alejandro Lazo

Photo: California Atty. Gen. Kamala D. Harris. Credit: Brian van der Brug/Los Angeles Times

Occupy movement's next stop? Foreclosed homes.

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After being evicted from parks and public spaces, the Occupy movement is set to move into foreclosed homes.

Organizers said Tuesday that they plan to help families across America fight foreclosure and eviction next week by "occupying" those properties. Some of the families will be moving back into their vacant properties, while others will resist eviction, said Peter Kuhns, an organizer with the Alliance of Californians for Community Empowerment, which is organizing some of the actions in Southern California.

“The original intent of Occupy Wall Street was to protest the excess of the big banks and Wall Street banks, so it seems like a pretty natural step for people to protest foreclosed properties,” Kuhns said. “Foreclosures are one of the biggest aspects of the economic crisis created by Wall Street bankers.”

Protesters also plan to disrupt foreclosure auctions across the country, where troubled homes are sold to investors and other cash buyers or repossessed by lenders. A website for the actions has been created, detailing in videos the histories of some homeowners facing foreclosure.

More than 30 foreclosed properties will be declared as "occupied" Tuesday, Kuhns said.

At least two of the homes will be in Southern California -- one in Los Angeles County and another in the Inland Empire, Kuhns said.

This is not the first incident of homeowners resisting foreclosure led by the group. Rose Gudiel, a homeowner in La Puente, refused to leave her property in September despite an eviction order, insisting she qualified for a loan modification. She ultimately won that modification.

RELATED:

Banks' foreclosure activity picks up

Many Americans say they will have to work until they're 80

Victims of improper foreclosure practices can submit claims

— Alejandro Lazo
Twitter.com/alejandrolazo

Photo: Rose Gudiel, who purchased a home in 2005 in La Puente, fought eviction with family members. Credit: Michael Robinson Chavez / Los Angeles Times

Notary in Las Vegas foreclosure fraud case found dead

A bank-owned home for sale in Las Vegas

A notary who was set to be sentenced for her part in a massive foreclosure fraud investigation was found dead in her Las Vegas home Monday.

Tracy Lawrence, 43, had pleaded guilty to one count of notarizing the signature of an individual not in her presence, a misdemeanor with a potential prison sentence of up to one year, as well as a fine of up to $2,000.

Lawrence had pleaded guilty to participating in an alleged scheme being investigated by the Nevada attorney general’s office in which tens of thousands of fraudulent documents were filed between 2005 and 2008 with the Clark County Recorder's Office. Two Orange County residents have been indicted in that investigation, accused of directing the operation.

Lawrence was scheduled to appear before a judge at 8:30 a.m. Monday. When she did not appear, investigators with the attorney general's office visited her home and found her dead, said Jennifer Lopez, a spokeswoman with the office of Nevada Atty. Gen. Catherine Cortez Masto.

Officer Jacinto Rivera, a Las Vegas Metropolitan Police Department spokesman, said that Lawrence's death was not being investigated as a homicide.

RELATED:

Banks' foreclosure activity picks up

Many Americans say they will have to work until they're 80

Victims of improper foreclosure practices can submit claims

— Alejandro Lazo
Twitter.com/alejandrolazo

Photo: A bank-owned home for sale in Las Vegas. Credit: Robyn Beck / AFP / Getty Images

 

One in five American homes 'underwater'

A bank-owned home for sale in Las Vegas

More than one in five American home mortgages are underwater.

An estimated 10.7-million households, or 22.1% of all homes with mortgages, had more debt on the properties than they were worth in the third quarter, according to Santa Ana research firm CoreLogic. This is a slight decline from the 10.9 million properties that were underwater in the second quarter.

"Although slightly down, negative equity remains very high and renders many borrowers vulnerable when negative economic shocks occur, such as job loss or illness,” CoreLogic chief economist Mark Fleming said in a statement. “The nearly $700-billion mortgage debt overhang has touched many corners of the market, and this overhang is holding back the recovery of the housing market and broader economy."

Nevada had the highest negative-equity percentage with 58% of mortgaged homes underwater, followed by Arizona, 47%; Florida, 44%; Michigan, 35% and Georgia, 30%. This was the first quarter that Georgia made the top five, ousting from the group California, which had been among the top spots since the firm began tracking the data in 2009.

In the Los Angeles Metro area, 353,427 homes, or 23% of all mortgaged properties, were in negative equity at the end of the third quarter, a decline from 356,677. Negative equity can decline when foreclosures increase as the repossession process extinguishes underwater loans.

RELATED:

Banks' foreclosure activity picks up

Many Americans say they will have to work until they're 80

Victims of improper foreclosure practices can submit claims

— Alejandro Lazo
Twitter.com/alejandrolazo

Photo: A bank-owned home for sale in Las Vegas. Credit: Robyn Beck / AFP / Getty Image 

 

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