Naperville Foreclosure Report – August 2011

Is Foreclosure Activity in Naperville About to Accelerate?

If you have been listening to the housing news the last few days, there has been a number of reports on increasing activity in the foreclosure market. According to RealtyTrac, “nationally, 228,098 homes received a foreclosure notice in August, up 7 percent from July but down 33 percent from August 2010.” In the Chicago metropolitan area 11,226 homes received a foreclosure filing during the month of August. That’s a 19.5 percent increase from July. But it’s also a 28.2 percent drop from August 2010.” If you remember last summer, banks across the country where being taken to task for “robo-signing” of mortgage documents and other questionable practices in the handling of loans. Judicial involvement in many states also put a damper on foreclosure activity. As a result we saw a sharp decrease in the number of foreclosed homes on the market. Now that processes have been reviewed and revamped, lenders seem to be renewing their efforts.

First Business Network interviewed Mabel Guzman, past President Chicago Association of Realtors, and Eric Westberg, Mortgage Banker, on their views of this trend.

August numbers for foreclosed homes in Naperville looked like this:

Foreclosed single family homes in Naperville are down from a year ago, as are prices for those under contract and available for sale. Months Supply of Inventory is down again to under 4 months after an upturn the last 2 months. Our experience lately has shown that the banks are negotiating harder and tighter in holding out for a higher List/Sale ratio. Couple that with currently lower inventory and you have essentially a sellers market. Should inventory increase we would expect to see a little for flexibility in their prices.

Naperville Home Sales Activity Report June 2011

Naperville Foreclosure Report – June 2011

The foreclosure market in Naperville, especially for single family homes, continues to be tight. While we continue to hear reports of large numbers of new properties coming to the market, as of yet we are not seeing it, at least hear in Naperville.

In comparison to June 2010, activity is increasing with a smaller inventory base to chose from. Solds increased year over year by 25% – from 12 to 15. Under Contract doubled from 10 to 20. And properties For Sale dropped 19% from 152 to 123.

Here is a quick look at the numbers:

You can see that we have had a dramatic reduction in Months Supply of Inventory. A year ago it was almost 13 months. June 2011 it was down to 4.1 months. A balanced market, favoring neither buyer or sellers is considered to be six months. At the current rate, the market has tilted towards the banks. Properties they are bringing on the market are priced to sell and are moving quickly.

If you are an investor or buyer looking for a foreclosed home in Naperville, be prepared to act quickly. These properties are not staying on the market long.

If you want more detailed information or would like to discuss opportunities, please give me a call @ 630.542.7732. Want to see what is available in the foreclosure market? Sign up for our FREE Foreclosure Report.

Naperville Home Sales Activity Report April 2011

Naperville Foreclosure Report – April 2011

The available pool of foreclosed homes in Naperville continues to shrink. Many industry observers are predicting a significant increase in the number of properties available in the coming months. For now, we continue to look at what is now available and what is moving.

In comparison to April 2010, activity is up. Properties Sold are up 64.3%, from 14 to 23. Properties Under Contract jumped from 17 to 24, an increase of 41.2%. An interesting comparison is that while Sold totals rose for the 3rd consecutive month, Under Contract dropped to a 3 month low. And properties For Sale? They dropped from 146 to 102, down 30.1%.

Here is a quick look at the numbers:

Again this month the MSI (Months Supply of Inventory) dropped. A balanced market, favoring neither buyers or sellers is 6 months. At 2.1 months, demand clearly is swinging towards sellers (banks). If you are an investor or buyer looking for a foreclosed home in Naperville, be prepared to act quickly. These properties are not staying on the market long.

If you want more detailed information or would like to discuss opportunities, please give me a call @ 630.542.7732. Want to see what is available in the foreclosure market? Sign up for our Foreclosure Report.

Next Up – Naperville Single Family Homes – Non Bank Owned

Naperville Home Sales Activity Report February 2011

Naperville Home Sales Activity Report

Over the next few weeks we will be breaking down the Naperville housing market in a little more detail than we have in the past. We will be looking at

• Single Family homes and Attached Homes (Condos & Townhomes)
• Bank Owned (Foreclosure) properties
• Non-Bank Owned homes

Our goal is to be able to see the trends in each market segment and what if any impact one segment has on another. Why is this important? If you are contemplating selling, price trends and inventories as well as market volatility will impact or influence how and where you list your home. If you are buying, supply of available properties definitely influences what you may have to pay or want to pay for any given property.

Naperville Foreclosures February 2011 vs February 2010

If you are working with banks as sellers, or investor type buyers, you have noticed a shift in this market lately in Naperville. It has become very active! As you can see from the table below, inventory over the same month last year has dropped by over 15%! And months supply of inventory (MSI) has plummeted to 2.7 months. The “neutral” market level is typically considered 6 months, so to be at this level, the leverage has moved to the seller. Total of Sold and Under Contract  has climbed by 50% over February 2010.

This is a significant change in the market and should have a positive impact on pricing as well as moving buyers into more traditional properties. If you want more detailed information or would like to discuss opportunities, please give me a call @ 630.542.7732. Want to see what is available in the foreclosure market? Sign up for our Foreclosure Report.

Next Up – Naperville Single Family Homes- Non-Bank Owned

New Short Sale guidelines going into effect

New federal guidelines for Short Sales go in to effect on April 5, 2010. As I understand it, the goal is to streamline the process so that once an approved home is listed and receives an offer, the loan servicer will be required to respond yea or nay on the offer within a brief time period. This is a welcome change as I have had clients wait for over 6 months to receive approval. (Thankfully he was patient and received a great home at a great price.)

The Homes Affordable Foreclosure Alternative (HAFA) short sale process employs standard form documents and defined performance timeframes to facilitate clear communication between the parties to the listing and sale transaction. Servicers must adhere to the following guidelines in connection with the issuance of an SSA (Short Sale Agreement).

1. The rules do not apply to loans that are backed by Freddie Mac or Fannie Mae. Ask your agent to find out from the sellers agent who is holding the note. This may be different than who is servicing the loan. Banks are often servicers, not note holders (investor).
2. Allows borrowers (current sellers) to receive pre-approved short sales terms before listing the property
3. Requires each servicer to have a written policy, consistent with investor guidelines, that describes the basis on which the minimum net will be determined.
4. The minimum net proceeds must be equal to or less than the list price minus the sum of allowable costs that may be deducted from the gross sales price.
5. This amount must be documented in the seller’s file and may not be increased until the initial SSA termination date is reached (not less than 120 days).
6. Upon successful closing, the borrower will be entitled to a relocation incentive of $3,000 which will be deducted from the gross sales price at closing.
7. The amount of the monthly mortgage payment the borrower will be required to to pay during the term of the SSA – not to exceed 31% of the borrower’s gross monthly income.
8. Requires borrowers to be fully released from future liability for the first mortgage debt and if the second receives an incentive under HAFA, that debt will also be released.
9. There are other requirements for the borrower in regards to executing the SSA agreement and listing the home
10. Takes effect April 5, 2010 and sunsets December 31, 2012.

Key Timeframes:

• Notification from the servicer (bank)
  • If the borrower doesn’t qualify for HAMP (Homes Affordable Modification Program) the bank must consider borrower within 30 days after one of the following has been met:
    • Doesn’t qualify for trial period plan
    • Doesn’t successfully complete a HAMP trial period plan
    • Misses at least 2 consecutive payments
    • or Requests a short sale
• Borrower has 14 calendar days from the date of the short sale agreement to sign and return it to the bank.
  • The bank must give the borrower 120 days to sell the house (extensions permitted up to 12 months).
• Within 3 business days of receiving a fully executed offer from a purchaser the Agent/Borrower must submit a complete Request Approval of Short Sale to the bank.
• Ten business days after the bank has received the complete RASS they must approve or deny the request.
• The first mortgage lien must release the lien within 10 business days or earlier after receipt of sale. The investor (lender) must waive rights to see deficiency judgments and not require a promissory note for the deficiency.

If you have ever wondered whether a Short Sale is a possibility for you, give me a call and we can confidentially review the situation and procedures. If you are interested in purchasing a short sale, we can help there too.

Thanks to Amy Cesario for her great post on the subject