Housing’s new worry: Repeat foreclosures return

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After the worst national housing crash in history, the picture of distress continues to improve, but now with one worrisome aberration. For the first time in more than two years, the number of repeat foreclosures took a U-turn and was higher in January compared to a year ago.

Repeat foreclosures are when a home has been in the foreclosure process once, was somehow saved by either a loan modification or payment program, but then goes back into foreclosure. This can happen when the borrower either can’t or won’t keep up with the new payments. New repeat foreclosures rose 11 percent in January from December and accounted for more than half of all new foreclosures, according to Black Knight Financial Services.

The problem is worst in states where a judge is required in the foreclosure process. These so-called “judicial” states have a far longer time horizon for processing foreclosures and therefore have huge backlogs of troubled loans in limbo.

Analysts at Black Knight say they are unsure what’s driving the numbers. They point to some seasonal factors and do not believe the problem is due to the government’s mortgage bailout program (the Home Affordable Modification Program), which has a five-year term. Some of those first modifications from 2009 are turning into pumpkins. As such, they do report a slight uptick in resets under the program but say those would not materialize into new foreclosures until May at the earliest. The problem may in fact be far more basic.

“It’s not surprising because so much tinkering was done with defaulted borrowers over the last five or six years. It’s not surprising they’re running into problems again,” said Guy Cecala, CEO and publisher of Inside Mortgage Finance.

 

 

During the worst of the crisis, banks were put under increased pressure to modify loans even outside the government bailout program. They lowered interest rates, but in the end, many of their borrowers simply didn’t have the basic cash flow to pay, whatever the rate. Re-default rates were expected to be high, with some calling even 40 percent conservative.

In the meantime, completed foreclosures have been decreasing more rapidly than the backlog of seriously delinquent loans. The hope had been for the opposite and a quick return to a more normal level of distress. There are still more than twice as many troubled loans than normal, despite rising home values and an improving economy. In other words, the mortgage mess isn’t all cleaned up just yet.

SATURDAY March 14 Events!

SATURDAY, MARCH 14, 2015
Ongoing Tours at Leilani Farm Sanctuary in Haiku
12:00 AM Nature Conservancy of Hawaii
7:00 AM Maui Filipino Chamber of Commerce’s Annual Scholarship Golf Tournament
07:00 AM – 01:00 PM Maui Girlz Shave Ice to Donate 100% of Sales to Aloha Backpack Buddies Program 
07:00 AM – 01:00 PM Maui Swap Meet 
07:00 AM – 12:00 PM Upcountry Farmer’s Market 
 08:00 AM – 01:30 PM  Bocce Ball Tournament
08:00 AM – 02:00 PM Fundraising Garage Sale for Feline Foundation of Maui
08:00 AM – 05:00 PM Maui Nui Farm Farmers Market in Kula every Thurs, Fri, Sat, Sunday from 8am to 5pm
08:00 AM – 01:00 PM Maui Puerto Rican Association Food Drive to Benefit Maui Food Bank
08:00 AM – 02:00 PM Trail of the Whale
09:00 AM – 04:00 PM 2-night service trip in Haleakala Crater
09:00 AM – 01:00 PM Community Exchange Event
09:00 AM – 02:30 PM Malama Honokowai – Maui Cultural Lands, Inc.
10:00 AM – 02:00 PM 24th Annual Lu’au of Keawala’i Congregational Church
10:00 AM – 03:00 PM Easter Mini Photography Session
10:00 AM – 05:00 PM Exhibit: Schaefer Portrait Challenge 2015
10:00 AM – 11:00 AM Leilani Farm Sanctuary Tour
01:30 PM – 10:00 PM GO FOR THE GREEN 1st Annual St. Patrick’s Day Shindig
02:00 PM – 08:00 PM Lomi Lomi Nui • Kahuna Bodywork Training Retreat
04:15 PM – 06:30 PM #KaiCapische-A Taste of Sardinia Sunset Cruise
05:30 PM – 09:00 PM 3rd Annual Book Trust Extravaganza: Casino Royale
05:30 PM – 09:00 PM 3rd ANNUAL BOOK TRUST HAWAII FUNDRAISER 2015 BOOK TRUST EXTRAVAGANZA: CASINO ROYALE
06:00 PM – 08:00 PM Maui Miracle Prophetic Service 

QUESTION OF THE DAY- TOPIC FSBO ( For Sale By Owner)

We are thinking about selling our home on our own. If a buyer comes in with a Realtor do we still have to pay their agent the 3% commission?

That depends on whether you choose to “cooperate” with agents or not. If you do not, agents will not bring buyers to your house. If you do cooperate, some agents will bring buyers, but if their client makes an offer and closes the deal, they will expect to earn a commission. A three percent commission is customary, but you can attempt to negotiate, too.

Before an agent brings a client to your house, they will probably stop by and ask you to sign a “one time show” agreement. This prevents you and the buyer from negotiating directly in an attempt to not pay the agent’s commission.