Townsend Appraisal Commentary

The percentage of distressed first-lien subprime loans among residential borrowers in the states that make up the sixth district of the Federal Reserve fell in the third quarter from a year earlier, according to the Federal Reserve Bank of Atlanta.

The district consists of Alabama, Florida, Georgia, Louisiana, Mississippi and Tennessee.

The percentage of loans that were distressed for 90 days or more had the largest drop.

Georgia experienced the steepest annual decline in distressed first-lien subprime loans, falling 18 points from 54% to 36%. The state was followed by Tennessee, Florida and Alabama. Louisiana and Mississippi tied for last with a 5-point decline.

Georgia has benefited from the more than $339 million distributed through the Hardest Hit Fund to help the area deal with mortgage defaults and other issues stemming from financial problems facing homeowners. Seven jurisdictions in Georgia received a total of $91.2 million from the Neighborhood Stabilization Fund, while the state received another $97 million to help the state stabilize foreclosure–riddled areas.

But while the latest Housing Scorecard from the Obama administration says government home preservation programs have saved more than 135,000 Atlanta families from foreclosure, the city is still facing a high percentage of distressed home loans, REOs with record low prices and severely underwater mortgages. The scorecard states that the share of distressed mortgages in and around Atlanta that are either delinquent, in foreclosure or bank-owned is above the national average and has been so since mid-2000.

Florida saw the third steepest decline, according to the Atlanta Fed's report, but remains the state with the highest rate of distressed first-lien subprime loans in the district. At the end of the third quarter, 53% of said loans were distressed, down 11 points from a year earlier.

The percentage of distressed first-lien prime loans in each state in the sixth district remained constant, except for Georgia and Florida. Both states had slight declines.

The information in the Atlanta Fed's report is based on data provided by Lender Processing Services (LPS: 19.15 -0.88%) and covers approximately 82% of the active residential mortgages in the  district, including agency, nonagency and portfolio products.

Write to Justin T. Hilley.

Members of Hope Now, a private-sector alliance of mortgage servicers, investors and counselors, completed about 79,000 loan modifications in October, according to a Wednesday release.

Of the October total, about 26,000 were completed under the Home Affordable Modification Program and the rest were private-sector modifications. Principal and interest payments were reduced in about 79% of all propriety modifications.

The voluntary group announced last month that it had modified 5 million mortgages since 2007. Modifications from October brought the year-to-date total to about 885,000.

Foreclosure sales declined to 64,000 from 68,000 in September, while foreclosure starts increased 7% from the previous month.

Delinquencies of more than 60 days fell as well, down to 2.65 million from 2.81 million in September.

Write to Andrew Scoggin.

Looking for a niche to fill next year? These trends are likely to influence how consumers live for much longer than the next 12 months.

Community Gardens

Credit: Claire Easley

A darling of both organic advocates and the local-food movement, community gardening is a trend that’s bound to grow. "[Shared gardens] fulfill a lot of wants for people—a desire for fresh food that’s affordable, for activities that help create a community, for a place that can bring people in a neighborhood together," says Gayle Berens, a senior vice president at the Urban Land Institute. "In addition, they’ve proven to be an effective use of vacant land—if only temporarily." Not only is the trend a haven for foodies and consumers looking for a bit of pastoral simplicity in hectic times, but also for builders and developers looking for shelter from the hefty costs of expensive community amenities, such as golf courses. An inexpensive feature in their own right, community gardens also help cut down on landscaping costs

To read the remaining trends click here: 2012 Trends

Homebuilders are retooling, rightsizing and hoarding cash as they weather the country's prolonged housing slump. They've discovered new ways to get homes built during the downturn, like turning to private equity firms to provide project funding.

And they are innovating in other ways: adding technology, rethinking design, going green and investing more in market research to build a home that consumers will buy, builders said.

To read full artical, click here: Builders

AMC AppraiserLoft Closes its Doors

Almost 1 million more homeowners over the next two years might be able to refinance their mortgages and save hundreds of dollars a month under the Obama Administration's latest fix to one of its underused foreclosure prevention programs.

The changes announced Monday are intended to benefit homeowners who have continued to make mortgage payments, even as home values have sunk, but lack at least 20% equity to refinance and take advantage of today's low interest rates. The revisions could also help some owners who are underwater, owing more than their homes are worth.

to read the FULL story, click here: Click Here

Appraiser Independence - Where Do We Go From Here?

And a fresh drop in home prices is likely to result.

Banks have stepped up the pace of home seizures after a year-long slowdown brought on by the "robo-signing" scandal in which banks were accused of seizing properties without a proper review of loan documents.

The number of foreclosure filings -- which include default notices, scheduled auctions and bank repossessions -- edged up 0.3 percent in the third quarter, reversing a trend of three straight quarterly declines, according to real estate data firm RealtyTrac.

The increase was driven by a 14 percent jump in default notices, the first gain in five quarters and a sign lenders were preparing to step up repossessions of homes.

To read the FULL story, click here: Mounting Foreclosures

EcoHome's Rick Schwolsky is his own case study on the frustrations of trying to get appraisers to add value for energy-saving features homeowners and home builders put in their houses.

Special energy-saving items should be recognized in the appraisal process. The appraiser should compare the energy-efficient features of the subject property to those of the comparable properties in the ‘sales comparison analysis’ grid to ensure that the overall contribution of these items is reflected in the market value of the subject property. (Source: Fannie Mae 2011 Selling Guide)

Schwolsky wrotes, "It’s been years since I had a good argument with an appraiser. So when I found myself engaged yet again a few weeks ago, making the case for my new 4.2-kW PV system, it felt frustratingly familiar. I’ve been arguing the value equation of energy improvements with appraisers since back in the 70s, when I was building super-insulated, passive solar, PV-powered homes that passed comfortably through Vermont winters on the BTUs generated by a large dog."

It was futile then, and apparently not much has changed. But then again, how can builders expect to win an argument against appraisers who see our world through a checklist, let alone a checklist and valuation system that hasn’t kept pace with our own progress as a value-oriented industry?

To read the FULL article, click here: Source: EcoHome