Foreclosure sales take steep discount in Louisiana BusinessWeek
A national tracking firm says second-quarter sales of Louisiana homes in some stage of foreclosure went for about a third less than homes not in trouble.
Irvine, Calif.-based RealtyTrac said 930 foreclosed homes were sold in the state in the April-through-June period at an average price of $121,506. That represented a 34.1 percent discount from homes that were not in foreclosure and 14.8 percent of all second-quarter home sales in Louisiana.
The number of foreclosed home sales rose 13.6 percent from the first quarter of 2011 in Louisiana, but fell 3.9 percent from the second quarter of 2010.
Nationally, the second quarter saw 265,087 foreclosure sales at an average price of $164,217. That represented 32 percent discount and accounted for 31 percent of all U.S. home sales.
On Wednesday, the Federal Housing Finance Agency said home second-quarter home prices were down 5.9 percent from the second quarter of 2010.
Derenda Grubb, president of the Louisiana Realtors Association, said home sale strength in Louisiana varied from region to region, largely depending upon the job picture. Grubb said foreclosures were mostly affecting the sale price of nearby comparable homes -- and often making accurate appraisals of a non-foreclosed home's value difficult.
Home Improvements Loans Are a Bad Idea
Article by Lawrence Roberts
Most homeowners do not save money for major improvements and required maintenance, and these homeowners often take out home equity lines of credit as a method of mortgage equity withdrawal to fund home improvement projects. The logic here is that renovations improve the property so an increase in property value offsets the additional debt. This is a bad idea.
Mortgage Equity Withdrawal or MEW is the process of obtaining cash through refinancing residential real estate using the accumulated equity as collateral for the loan. Before MEW homeowners would have to wait until the property was sold to get their equity converted to cash. Apparently, this was deemed an inefficient use of capital, so lenders found ways to “liberate” this equity with home equity lines of credit or cash-out mortgage refinancing. Home equity lines of credit are popular with lenders despite the additional risk of being in the second or third lien position because borrowers are less likely to default or prepay than non-cash-out refinancing.
Home improvement projects rarely add value on a dollar-for-dollar basis, particularly with exterior enhancements which often only return 50 cents on the dollar in value. Even interior improvements only add about 70 cents on the dollar. The home-improvement craze was so common during the Great Housing Bubble that the term “pergraniteel” was coined to describe the Pergo fake wood floors, granite countertops, and steel appliances that defined the Great Housing Bubble era in much the same way as shag carpeting and wood wall paneling defined the interior decorating of the 1970s.
MEW has been utilized by homeowners for home improvement for decades, but the widespread use of this money for consumer spending was largely an innovation of the Great Housing Bubble. Since consumer spending is almost 70% of the US economy, mortgage equity withdrawal was the primary mechanism of economic growth after the recession of 2001, a recession caused by the deflation of another asset bubble, the NASDAQ technology stock bubble.
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US Housing Plan to Fund Interest-Rate Reductions
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Homeowners refinance at lower mortgage rates - The News-Press Homeowners refinance at lower mortgage rates Almost nine in 10 homeowners of ZIP code 95742 in Rancho Cordova, Calif., fit into that category, said Irvine, Calif.-based First American CoreLogic. |
California home foreclosures top 236000 in 2008 - Los Angeles Times
Los Angeles TimesCalifornia home foreclosures top 236000 in 2008 30 over the same period in 2007, according to the latest data from the Mortgage Bankers Assn. California was last hit by massive foreclosures in the early
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Highest Rates in Generation Confront Everyone Without Fed Funds Maxine Waters, a California Representative and the No. 3- ranked Democrat on the House Banking Committee, also wants banks to lower mortgage expenses. |
US weighs strategies to stem home foreclosures - Los Angeles Times
Los Angeles TimesUS weighs strategies to stem home foreclosures For worthy borrowers, he favors government-sponsored mortgage refinancing at an interest rate of 4.5%. To encourage home purchases, he proposes a tax credit Foreclosure aid likely to help 4 states most
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