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It will take 46 months to clear the market’s supply of distressed homes, or the shadow inventory, according to estimates from Standard & Poor’s Rating Services based on first-quarter 2012 data.

The agency’s latest estimate came in one month shy of the liquidation timeline determined in the fourth quarter of 2011.

While national residential mortgage liquidation rates appeared stable over the first three months of this year, these rates varied widely between local markets, which prevented any significant reduction in S&P’s months-to-clear estimate, the agency explained in its report.

Regional variations in how quickly servicers can clear the backlog of nonperforming loans are primarily due to differences in foreclosure procedures, judicial vs. non-judicial.

As of first-quarter 2012, S&P says its months-to-clear estimate in judicial states was almost 2.5x as long as non-judicial states.

S&P includes in the shadow inventory all outstanding properties on which the mortgage payments are 90 or more days delinquent, properties in foreclosure, and properties that are REO. The agency also includes 70 percent of the loans that became current, or “cured,” from 90-day delinquency within the past 12 months because S&P says these loans are more likely to re-default.

With home prices down 34% nationally since 2006 and mortgage rates at historic lows, homes have never been more affordable — but it won’t stay this way for much longer.

Stuart Hoffman, chief economist for PNC Financial Services, said he expects home prices to flatten out by the third quarter and start climbing by next year.

A number of factors will help bolster the housing market, he said, including a decline in the number of foreclosures and continued job growth. In addition, homebuyers will have better access to mortgages as they get their finances in order and improve their credit scores.

“This is a strong indicator that we will start seeing home price indexes, like the S&P/Case-Shiller, start to report home price increases this summer,” he said.

Prospective homebuyers who’ve been sitting on the fence shouldn’t worry if they aren’t quite ready to make the leap. Analysts are predicting that the initial price gains will be modest, at least, in most markets.

By Les Christie

4212 Tee Shot Drive – ., Colorado Springs, CO 80922

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Single family rentals are $3 trillion business today and growing as investors turn to real estate and opt to rent out the bargains they buy until prices improve. Today the single family rental market accounts for 21 million rental units or 52 percent of the entire residential rental market, according to a new study by CoreLogic economist Sam Khater.

Yet the single family rental market is poorly understood and almost invisible to economists and journalists because virtually all rental market data tracks multifamily properties and either ignores the single family segment or lumps it together with multifamily.

“Single family rentals are very distinct from multifamily and they behave very differently,” said Khater in an interview with Real Estate Economy Watch. For example, on a per unit basis, rents for single family rentals run 1.5 to 1.6 times higher than multifamily. Unlike multifamily, millions of single family rentals are listed on MLSs by real estate brokers, many of who represent new owners in acquiring investment properties. As the for-sale inventory has trended down since 2005, the rental share rose 13.3 percent last year alone. As of the end of last year rental closings were up 11.5 percent year-over-year while prices fell 9.8 percent during the year. Demand is strong. The national average months’ supply for single family rentals was 4.5 months in December compared to 6.2 months for homes listed for sale.”

Another important difference is the nature of the tenants. Single family rentals, usually stand-alone properties in ownership settings, appeal more to families. In fact, the typical SFR tenant is a family that has just left a foreclosure and can afford to pay the rent on a former foreclosure but could not make the mortgage payment on their old home, perhaps because they bought with alternative financing or purchased at the peak and could not get a modification when their home lost value. Over the past five years, foreclosures have turned more than 3 million homeowners into renters. Typical multifamily tenants, however, are younger, generally single and more mobile, and have never owned a home.

Khater found a strong relationship between distress sales markets and single family rentals. Census data shows a correlation between single family rentals and the hardest hit areas of the so-called “sand states”-Arizona, California, Florida and Nevada. Investors buying REOs and short sales in foreclosure markets convert them to rental units and homeowners in the same locale who have lost their homes to foreclosure rent homes that until recently were owned by other families who suffered the same ill fortune.

Written by: Steve Cook Mon, April 23, 2012

Make sure you meet code
Banisters and balcony railings are two places where children can meet deadly accidents. Check the code in your area to make sure that the banisters and railings on your property are an acceptable distance apart.

The EPA Residential Lead-Based Paint Hazard Reduction Act of 1992 requires disclosure of lead-based paint in all residential property built before 1978, whether purchased or leased. Besides the legal requirement, it is nice to be able to tell a prospective family that the paint on your property is lead-free. (If you need to remediate, be sure to contact a professional who will follow EPA guidelines.)

Outside the property
To help keep little runners safe, exterior stairs and walkways — foot-bridges especially — will be safer with the addition of non-slip strips.

Take care of large areas of darkness around the house, especially on walkways, with adequate lighting, perhaps with motion-sensitive activation.

If your property has a garage door, ensure the door will “bounce back” to keep a child from being crushed. (This is a fairly typical garage door feature.)

Make sure that any playground equipment is properly constructed with adequate padding and proper drainage.

If your property has a pool, make you know that the pool itself (including the drain) and the surrounding fence meet all local requirements.

Indoor safety
In bathrooms, install non-slip strips to the shower and bathtub. Also, to protect children from being scalded, adjust the water heater so that it is at 120 degrees, or below.

Though most housing laws are local, property owners are universally required to install working smoke detectors. Put them on the ceiling outside of bedrooms, the main living area and kitchen. Carbon monoxide detectors should also be installed, though all states or cities don’t yet require them.

To prevent fires or electrocution, be sure that rooms have adequate outlets so that a single outlet doesn’t get overloaded. All switch plates and outlet covers should be secure and without cracks or chips that little fingers could jam themselves or something else into. Ideally, parents will install socket safety plugs to keep children from playing with them.

Windows and doors
If there are blinds on the windows, be sure they don’t have looped cords, which can easily choke a child. Use cord wraps next to each window to keep cords out of children’s reach.

All the windows in your property should have screens, with child safety latches on the inside, as well as latches on the windows themselves. Window bars should swing open or break away.

Check that property doors open and close well and that locks work on entry doors. If you have a multi-unit property, make sure that any public doors require a key for entry or are otherwise monitored.

These are just a few of the things you might do to prepare your rental property for greater child safety. Think how impressed your prospective tenants will be to know that you thought  ahead with a child’s well-being in mind.

Rentals.com

Starting Saturday, April 14, real estate professionals working with BofA will be required to submit five documents for short sales initiated with an offer:

• Purchase Contract including Buyer’s Acknowledgment and Disclosure
• HUD-1
• IRS Form 4506-T
• Bank of America Short Sale Addendum, which includes the Agent Certification form
• Bank of America Third-Party Authorization Form

The acknowledgement and disclosure form, short sale addendum, and the form for third-party authorization are available through the company’s online Agent Resource Center.

The third-party authorization form is a new standardized document developed specifically for BofA. Previously, the lender accepted third-party authorization forms in differing formats and from a variety of sources when transacting a short sale.

Bank of America says it recognized a need for greater compliance and consistency with this important document and has now created its own form to standardize the third-party authorization process. The two-page document requires signed acknowledgments from all borrowers and designated representatives in a short sale. Beginning April 14, BofA will accept only the official Bank of America Third-Party Authorization Form for short sales.

The bank’s new short sale process will enable real estate agents, brokers, attorneys, and other short sale specialists involved in pre-foreclosure transactions to complete tasks such as document collection, valuations, and underwriting simultaneously.

With these steps running concurrently, the timeline from initiation to closing is reduced. In fact, Bank of America says it will now be able to provide a decision on a short sale offer in 20 days. Typically, BofA’s short sale process has taken anywhere from 45 days upwards.

In continuing to streamline the decision process, should the buyer walk away from the sale, Bank of America is giving agents five days to submit a backup offer. Previously, the backup offer window was 14 days. Interested buyers are limited to two counteroffers and will receive a response from the lender within three days.

BofA notes that all email messaging between designated selling agents and their Bank of America short sale specialist will continue to occur within the Equator system. Agents will receive a standard notice via email to log into the system and retrieve their messages.

In order to implement the myriad of changes, BofA’s Equator platform will be down for 10-12 hours the night of Friday, April 13 into the early morning of Saturday, April 14.

Real estate agents and other short sale professionals are invited to review a Bank of America webinar outlining the coming changes. BofA is also offering task-by-task training on the new Equator process via a webinar to be aired on Thursday, April 19 from 4-5 p.m. (EST). Additional information can be found through the company’s onlineAgent Resource Center.

Bank of America’s short sale and REO executive Bob Hora says the company expects short sales to continue to increase and is taking steps to ensure it is providing decisions quickly and real estate agents are alerted of status as soon as possible.

BY: CARRIE BAY, DSNEWS.COM

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While asking prices for homes declined 0.7% over the past 12 months through March, rents rose 5%, according to a report released Thursday by real estate listing site Trulia.

“Buying a home is more affordable than renting now in almost every part of the United States,” said Jed Kolko, chief economist for Trulia.

Several metro areas recorded double-digit percentage increases in rental rates.

In Sarasota, Fla., the average rent jumped 12.9% year-over-year, the biggest increase of any of the 100 largest metro areas Trulia surveyed.Miami and San Francisco saw the next biggest increases, with rent hikes of 12.1% and 11.1%, respectively.

The metro areas that sustained the highest rent increases were a decidedly mixed bag, but obviously shared one factor: rising demand for a limited supply of rental units.

The national vacancy rate for apartments fell 0.3 percentage points during the first quarter to 4.9%, its lowest point since late 2001, according to a separate report from Reis Inc., a real estate research firm. With such limited availability, it has put pressure on rentals of all types.

In cities like Miami that were hit hard by the housing bust and recorded a high number of foreclosures, all of the displaced residents have to live somewhere.

Other cities have put constraints on the construction of new multi-family housing, thereby limiting supply. For example, in San Francisco, where the median rent is a whopping $2,625, there are few tracts of land available to develop, raising demand for housing and pushing rents there higher.

Several Rust-Belt cities also saw large rent increases in the past year, including Indianapolis, where rents went up 9.7%, and Columbus, Ohio, where they jumped 9.3%.

These cities have seen big gains in the industrial sector, which have led to a growing number of jobs and higher rents, said Kolko. As hiring levels off, he does not expect the big rent increases to continue.

Meanwhile, asking prices for homes nationwide crept lower over the past 12 months, according to Trulia.

That, along with record low mortgage rates, has made buying a home more affordable than it’s ever been and a bargain compared to renting. However, many Americans will not be able to seize this historic opportunity to become homeowners, said Kolko.

Unemployed, too broke to come up with a down payment or with credit scores too battered to qualify for a mortgage, many people simply cannot qualify to buy a home right now, according to Kolko

With fewer consumers able to make the leap into homeownership, rents could continue to climb higher, he said.