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February 3, 2010, at 7:45 pm
CNNMoney had a very thought provoking article today that should be a must read for any home owner, particularly those pursuing a short-sale or deed-in-lieu end to their troubles:
“Former homeowners may still be on the hook if there’s a difference between what they owed on their mortgage and what the bank could sell it for at auction. And these “deficiency judgments” are ticking time bombs that can explode years after borrowers lose their homes.
Lenders may release property liens in order to facilitate short sales without releasing borrowers from their obligations to pay under the promissory notes. The secured debt can convert to an unsecured one after the sale.
Zaretsky had one client who was so relieved to have arranged a short sale that he signed every paper his real estate agent shoved at him, even a confession that clearly stated he still owed the debt.
“He had no idea what he was doing,” said Zaretsky. “All the lender had to do was go to court to convert the confession into a deficiency judgment.”
Those facing foreclosure, including homeowners considering a short- sale or deed-in-lieu solution to their problems would be very wise to seek the services of an independent, competent real estate attorney during this process.
The full article –
http://money.cnn.com/2010/02/03/real_estate/foreclosure_deficiency_judgement/
January 26, 2010, at 8:14 pm
With wages dropping, unemployment rising and a shift towards sales of lower priced homes, among other factors, December sales took a big hit:
“Sales of previously owned homes took their biggest tumble in at least 40 years last month as the impact of a buying spree spurred by a tax credit for first-time buyers waned, according to industry data released Monday.
Those who rushed to meet the original November deadline to take advantage of an $8,000 tax credit for first-time home buyers caused a surge in sales earlier in 2009, but left the market wobbly by the end of the year. First-time buyers, who made up more than 50 percent of sales earlier last year, represented just 43 percent of the market in December. The shift also resulted in fewer sales of lower-cost homes, which first-time buyers typically seek.
After three months of increases, sales of existing homes, including condos and single-family residences, fell 16.7 percent to a seasonally adjusted annual rate of 5.45 million in December compared with the previous month, according to National Association of Realtors data.
It was also the biggest monthly decrease on records that date to 1968, according to the industry group.“(Emphasis added.)
The full article -
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/25/AR2010012502164.html
January 23, 2010, at 10:21 pm
The Maryland Coast Dispatch had an article yesterday on the effects of the popping of the housing bubble on Worcester County Maryland property tax assessment values and tax revenues:
“Worcester County can expect $10.4 million less in property tax revenue in the next fiscal year compared to the current, according to recent land reassessment numbers.
The just completed reassessments in the Berlin and Ocean Pines areas, roughly the north end of Worcester County, excluding Ocean City, show a 36-percent decline in property market value.
Much of the decline can be attributed to falling property values in the Glen Riddle development, (Worcester County Chief Financial Officer Harold) Higgins noted. Homes in the $300,000 to $800,000 range are at the greatest risk for value reductions.
Worcester County, with a 20-percent reduction overall, lost more value in the recent reassessments than any other county in Maryland except Frederick, which lost 22 percent of its cash value.
House values in Ocean Pines declined 12 percent to 39 percent on average, Commissioner Judy Boggs noted. Overall, the greater Ocean Pines area shows a 20-percent decline.”
The full article -
http://www.mdcoastdispatch.com/article.php?cid=30&id=7969
January 17, 2010, at 4:07 pm
Michael David White at NewObservations.net had an interesting piece last week arguing that defaulting on one’s mortgage is a patriotic duty:
“The government is dropping nuclear bombs on the mortgage market and nobody is dying. They can’t move the product. What has been taking off are foreclosures. They are soaring. The general feeling is that foreclosures are terrible and should be stopped because of the distress they bring both to a family and a neighborhood. The more important truth, widely ignored, is that foreclosures promise to bring back cheap prices.
In our post-bubble world, foreclosures are the surest mechanism for creating affordable housing. Consumer advocates should now welcome this method of price correction. Those true to their mission will embrace a mass-foreclosure remedy.
In a credit bubble, the smart economist makes the highest goal a true reckoning with phony debt. The common man now has a chance to play the smart economist.
Let the house go back to the lenders. The bank will throw the mortgage in the garbage. Reality will return. Prices will fall – perhaps dramatically from our current 30% loss. Systemic mortgage debt in the United States should be reduced in amounts equal to the losses in real estate values. It’s trillions in the plural.
The government has screwed up management of the financial crisis by granting debt assets special status. It’s time for the owners of debt assets to take losses. It’s time for the people to fix the financial crisis. Give the debt investors the losses they bargained for.”
The full article -
http://newobservations.net/2010/01/12/default-is-a-patriotic-duty/
January 16, 2010, at 10:11 pm
I’ve often thought that many homebuyers seem way too comfortable with way too little due diligence prior to making an offer on a property. I recently came across this article which addresses some of the other considerations Ocean City Maryland area home buyers should concern themselves with:
“Before you move, take a few minutes to make sure you’re well-acquainted with your new city and neighborhood.
Learn how to evaluate your new home’s vulnerability to thieves, research the history of your house…
Look up sex offenders to find the safest neighborhood and zip code for your kids.
If you suspect your… (prospective) neighbor… of suspicious activity, run a criminal background check…
Check your old home’s value or the general neighborhood value of your future community…
Compare school districts and find public school rankings…
Run local crime reports so you know which neighborhoods and cities are safest.
Beyond safety, you’ll want to make sure your new community has lots to offer in terms of social activities, grocery stores and more. Use… local guides…”
These tools are worth a bookmark and a careful review with your buyer agent–
http://www.criminaljusticeusa.com/blog/2009/50-tools-to-research-your-new-home-neighborhood-and-community/
January 13, 2010, at 10:46 pm
DSNews.com is reporting an increased shift by lenders towards Short Sales as a solution to their problems:
“Nearly 2 million housing units in the United States are in foreclosure or are bank-owned, and more are expected to follow, RealtyTrac said. Citigroup experts say the government’s current solutions have been ineffective at keeping people in their homes, and they anticipate lenders could foreclose on another 8 million loans as the economy worsens.
With foreclosures on the rise, homeowners are looking for a viable solution to their problems.
Banks are beginning to go along with short sales in increasing numbers, three years into a U.S. housing slump that pushed the economy into a recession and cut resale values by 30 percent from the peak in July 2006,…”
This trend will only pick up momentum, given the alternative.
The full article -
http://www.dsnews.com/articles/homeowners-turn-to-short-sales-as-an-alternative-foreclosure-2010-01-12
January 6, 2010, at 6:23 pm
Well it’s 2010, and the New York Times has a piece worth a read about the current 2010 version of The Housing Crises.
“The financial crisis and Great Recession have their roots in the housing bust. When it comes, a lasting recovery will be evident in a housing rebound. Unfortunately, housing appears to be weakening anew.
The situation, we fear, will only get worse in months to come. Rates already are starting to rise as lenders brace for the Fed to curtail support for mortgage lending as early as the end of March. The home buyer’s tax credit is scheduled to expire at the end of April. And a new flood of foreclosed homes is ready to hit the market.”
The solution, according the Times, is “principal reductions”:
“The best way to modify an underwater loan is to reduce the principal balance, lowering the monthly payment and restoring equity. But for the most part, lenders have refused to reduce principal because it would force them to take an immediate loss on the loan. Lenders also have vehemently — and successfully — resisted Congressional efforts to change the law so that bankruptcy courts could reduce the mortgage balances for bankrupt borrowers.
To avert the worst, the White House should alter its loan-modification effort to emphasize principal reduction.”
That sounds good on paper, but how about those who paid cash for their home, or those who prudently bought less home then they could afford and are not living as “large” as their neighbors? Where is their “bailout”?
I believe the thinking of many Ocean City Maryland property owners is similar to those of Diana Olick at CNBC, who wrote today:
“I would honestly rather see my home’s value go down than see the guy next door … who made a poor/negligent financial decision get a mulligan at my expense.”
The full articles–
http://www.nytimes.com/2010/01/05/opinion/05tue1.html
http://www.cnbc.com/id/34729477
January 1, 2010, at 1:48 pm
This has to be a super hot topic on the minds of the 1/3 of Maryland real property owners who will be receiving their Maryland real property assessment notices in the days ahead. The Baltimore Sun reported on December 29th that statewide Maryland real estate tax assessments were to fall an average of 19.7 percent:
“Nearly all Maryland homeowners due to receive new property assessment notices being mailed today will see a lower assessed value on their houses, reflecting what officials say is the largest decline in the state assessment office’s history. On average, residential property values dropped 19.7 percent over three years, according to C. John Sullivan, director of the state Department of Assessments and Taxation.
I’ve never witnessed anything like it. It’s unprecedented,” said Sullivan, who has worked in the state’s assessment agency since the mid-1960s.”
The article goes on the address the decline in values in the northern Ocean City Maryland area:
“Worcester County revalued the northern portion of the county just west of Ocean City, where supervisor Robert L. Smith said 78 percent of homes are not owner-occupied. “There are hundreds of [vacation] condos,” he said, and property values are heavily influenced by the tourist market in Ocean City itself. Residential values there declined 23.9 percent.”
The full article-
http://www.baltimoresun.com/news/maryland/bal-md.assessments29dec29,0,2033099.story?page=2
If you are an Ocean City Maryland area home owner who has received their new property assessment and still feels that their assessment is too high, we can help. We will be pleased to assist by preparing an assessment appeal package to help obtain an Ocean City area condominium or single family home property tax reduction. If you wish, we will represent you before the State of Maryland Department of Assessments & Taxation appealing your Ocean City area property real estate tax assessment. Contact us today.
December 31, 2009, at 9:09 pm
Well, there’s no doubt how CNNMoney feels about the upcoming 2010 housing market:
“After four months of gains, home prices flattened in October. Worse yet, industry insiders think that they’ll soon start to fall.
… most forecasts predict price declines in 2010, with possible losses ranging from anywhere from 3% on up. Fiserv Lending Solutions, a financial analytics firm, forecasts that prices will fall in all but 39 of the 381 markets it covers, with an average drop of 11.3%.
We’ve seen recent price stabilization because of low mortgage interest rates and the impact of the first-time homebuyers tax credit,” said Pat Newport of IHS Global Research. “But there are really good reasons to think prices will now start going down.”
The full article–
http://money.cnn.com/2009/12/31/real_estate/home_price_drop/index.htm
December 29, 2009, at 12:01 am
Here’s a blockbuster. Fasten your seatbelts.
“The Treasury announced Dec. 24 that the two mortgage- finance companies, which were seized by the U.S. almost 16 months ago, could tap an unlimited amount of capital for three years, up from as much as $200 billion each.”
That’s right. On Christmas Eve, while everyone else in America was busy thinking about anything but insolvent GFEs, Fannie and Freddie both got blank checks.
It gets better.
“Given this outlook, we believe that the main driver of this significant change is the flexibility it gives the government to take more aggressive action to support the housing market, including potentially going down the road of allowing some form of principal writedown,” the analysts wrote.”
That’s right. Principal loan forgiveness is on the table. So begins the next phase of this journey. Does anyone want to opine as to where it leads?
The full article–
http://www.bloomberg.com/apps/news?pid=20601087&sid=aeXf1lYN2HgY&pos=6
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Contact Us 
Joe Warth, President & Broker
Email: Joe Warth
Voice: 410.524.5000
HomeBuyerPower, Ltd.
7800 Coastal Hwy., 2nd Floor
Ocean City, MD 21843-0677
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