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Tuesday
May282013

Home Prices Highest Since April 2006

Creatas/Thinkstock(NEW YORK) -- Home prices in cities around the country surged 10 percent in the past year to highs that haven't been seen since the end of the housing bubble.

Prices around the country rose the most since April 2006, though in most places they are still well below their 2006 peak, according to the Case-Shiller house price index, which includes data through March 2013.

Phoenix, San Francisco and Las Vegas had the biggest jump in home prices, with increases of more than 20 percent compared with a year ago.

The housing market, while apparently on the road to recovery, is not yet fully healed.  A large number of homes are still in some stage of foreclosure and investors rather than first-time home buyers make up an outsized chunk of the housing market.

Many economists though are still confident that we are on the way to a healthy market. 

“This is not a bubble,” says economist Diane Swonk.  ”We are regaining lost ground which is a game-changer for most households since their home is what they rely on for wealth.”

Still the rise in home prices could be among the factors contributing to resilience in consumer spending despite a tax hike at the beginning of the year.  As home prices rise consumers feel confident to spend on other items like a new car.

The housing market in cities, including Seattle and Charlotte, is pushing back into positive territory after a couple of months in decline.  Prices were up 3 percent in Seattle compared with a month ago, and 2.4 percent in Charlotte.

Copyright 2013 ABC News Radio

Saturday
Sep082012

Wells Fargo Mistakenly Cleans Out Retired Couple's Home Twice

Courtesy Pat Tjosaas(NEW YORK) -- Alvin and Pat Tjosaas, a retired couple in Woodland Hills, Calif., had the bad luck of having their home mistaken for a neighboring foreclosed home and being cleared by contractors hired by Wells Fargo -- not once but twice.

A retired bricklayer, Alvin Tjosaas, 77, was the caretaker of his late parents' two-bedroom home in Twentynine Palms, about 200 miles east of his home in Woodland Hills, north of Los Angeles. He is a part owner of the home with his sisters.

Alvin Tjosaas visited the home every four to five months, he said, for maintenance and to work on hobbies in the garage.

"He just loves it up there," Pat Tjosaas, 75, said. "He was in the process of getting ready to re-plumb the house, so he had lots of his tools up there – just a garage full of tools that any man would die for."

But on June 1, a neighbor in Twentynine Palms called the Tjosaas family, asking if they had authorized people to clear out their home.

"We assumed it was a break-in and, really, it was a break-in," Tjosaas said. "They weren't legally supposed to be there."

Tom Goyda, vice president of corporate communications for Wells Fargo Home Mortgage, told ABC News the company had foreclosed appropriately on another property near the Tjosaas house and the error was made when a contractor mistakenly went to the Tjosaas house instead of the correct house.

The Tjosaas home had actually never had a mortgage or lien on it because it was paid for in cash as it was being built about 50 years ago.

"We are deeply sorry for the very personal losses the Tjosaas family suffered as a result of their home being mistakenly secured and entered by a contractor hired to address a different nearby property," the company said in a statement. "We moved quickly and have been in contact with the Tjosaas family to resolve this unfortunate situation and right this wrong."

Once the neighbor called, the Tjosaases called the police but were not able to drive to the property immediately because they were attending their granddaughter's wedding.

When her husband drove to the property three days later, she said the workers said they were authorized to clear out a foreclosed home. Finally, the sheriff came and escorted the workers to the intended location, 10 acres away, she said.

"Alvin was left to sit among the ruins of the house," Tjosaas said of her husband.

She later learned the contractors had used a satellite photo and an address given to them by Wells Fargo.

"They simply were at the wrong location," she said, "not even on our road.

The Tjosaases contacted an attorney and Wells Fargo, but Pat Tjosaas said her attorney "was having trouble getting a contact to return his calls" at the company.

The couple did their best to clean up the mess and asked Wells Fargo to have another subcontractor replace the locks on their home.

However, over Labor Day weekend, Alvin Tjosaas, went to check on the home and saw that it had been broken into and "vandalized" again.

"They had taken things like propane tanks, tires, rims that belonged to vintage cars, and put them on the lawn," his wife said.

The Tjosaases later learned Wells Fargo had hired another contractor who made the same mistake as the first.

Frustrated again, the Tjosaases called their son-in-law, a captain with the Los Angeles Fire Department, who contacted the local media.

"He said, 'Enough is enough'," Pat Tjosaas said.

The Tjosaases said a representative from Wells Fargo came Thursday morning to issue an official apology in person.

"The representative was very apologetic and we appreciated that," Pat Tjosaas said, "and that they would initiate discussions on settlement issues and that's where we are right now."

However, Tjosaas said antiques (including her late father-in-law's World War I uniform), the American flag that had previously hung in the yard, and appliances had been taken.

"The items are gone and are irreplaceable," she said. "We have to ask for monetary compensation for items that we lost. We will have to see how that plays out with Wells Fargo."

Copyright 2012 ABC News Radio

Tuesday
May312011

Rent or Buy? Six Tips to Help You Make the Right Decision

Stockbyte/Thinkstock(NEW YORK) -- Stan Humphries, chief economist at Zillow, and Celia Chen, senior director at Moody's Analytics, spoke with ABC News about what potential homeowners need to consider before deciding whether to buy or rent. Here are their tips:

1. Time

On average, if you are planning on living in a home for five years or more, you should consider buying. If not, renting is usually the best option.

Chen: "The first question you want to think about is how long you're going to live in a place. When you purchase a home there are a lot of transaction costs related to the home purchase, and these are sunk costs that will be difficult to make back."

2. Income Stability

If you do not have a sustained and stable income, you should look to rent because it is easier to change your living situation depending on how much money you are earning.

3. Percent of Income

You don't want to spend more than a third of your income on all housing-related expenses. That includes mortgage payments, property taxes, insurance and any other housing-related costs.

4. Price-to-Rent Ratio

The price-to-rent ratio is the real estate price divided by the annual rent. If a house has a price-to-rent ratio of 15, that means the price of the house is 15 times the annual rent that home would earn. The New York Times has an easy-to-use calculator that will help you crunch the numbers.

Humphries: "The higher that ratio is, the more renting is going to become favorable. Typically, the break point there is something in the 15 to 20 range. So if that ratio is 15 to 20, meaning that buying a home is 15 to 20 times more expensive than the annual rent, you would spend on the same house. Then that's a range in which renting is more advantageous....The higher that ratio is the less attractive buying looks, and the more attractive renting looks."

5. Quality and Inventory

The rental and for sale markets vary in the quality and inventory they offer. It is important to compare the markets and see where you are able to find the place that fits you the best. In a normal market, it is usually easier to find what you are a looking for in the for sale market. However, with the increased number of people looking to rent, many investors are converting single family homes that were once for sale into rentals. The quality and inventory vary greatly by the market you are looking in.

6. Research

Research the overall economic health of the neighborhood. Chen recommends using websites such as RealtyTrac and Foreclosure.com to see the number of foreclosed and distressed homes in the area. She says there is a likelihood that in communities with more foreclosures that price corrections will be much more severe.

Copyright 2011 ABC News Radio

Thursday
Mar312011

California Home Sells for a Record $100 Million

Stockbyte/Thinkstock(LOS ALTOS HILLS, Calif.) -- Russian investor Yuri Milner is now the proud owner of a 25,500-square foot palatial mansion in Los Altos Hills, California that went for a whopping $100 million -- the most ever paid for a home in the U.S.

But Milner can surely afford it.  He runs international investment firm Digital Sky Technologies and his investments include Facebook Inc., Groupon Inc. and Zynga Inc.

The home was sold by Fred and Annie Chan.  Fred Chan started ESS Technology, which designs and markets audio and video products for consumer markets.

Reports are that Milner is in no rush to move into the 18th-century French chateau-style home, which features a ballroom, home theater, wine cellar and indoor pool.

Copyright 2011 ABC News Radio

Sunday
Mar062011

Save Big: Buy a Foreclosed Home

ABC News(NEW YORK) -- How would you like to knock tens of thousands of dollars off the price when you buy a home? You can do just that if you buy a foreclosed property.

Last year, across the country, houses that had been through foreclosure sold for an average of 28 percent less than other houses. The median home price in America is about $160,000, so if you get that 28 percent discount, that's a savings of nearly $45,000.

There are two main junctures at which you can purchase a foreclosed property: on the courthouse steps when it is being auctioned off to satisfy the debt owed to the mortgage company. Or after that same bank has bought the property back itself in order to recoup its investment.

This second is known as a bank-owned or "real estate owned" property. You can also buy a property before the bank forecloses, usually in a short sale situation, where the homeowner is trying to sell it at a discount to avoid foreclosure. Since the bank has not yet foreclosed, this is really a different sort of transaction, with lots of messy complications as the homeowner tries to save -- and possibly stay in -- their home.

Auctions On Courthouse Steps


You hear the phrase "auctioned on the courthouse steps" frequently, but the truth is, not all of these auctions are conducted at courthouses. Some states hire professional auctioneers and ask that the auctions be held at the auctioneer's office. Others allow them to be held on the premises of the property being sold. Some of these auctions are conducted by professional auctioneers, while others are run by the local sheriff's office and some are handled by attorneys.

If you are hoping to buy a property at one of these initial auctions, where the bank is repossessing the home from the mortgagees, it's a good idea to attend several and get a feel for how they work before you actually bid. Keep in mind that many of these auctions are canceled at the last minute when the homeowners somehow work out a deal with the bank. Re-check listings before heading to the auction site.

Typically you cannot get inside to see the property, but here is one helpful hint: if the property changed hands in recent years, there may still be photos and details archived in the Multiple Listing Service that real estate agents have access to. Ask licensed agents if they can conduct a search for you.

Bank-Owned Properties

Industry experts say bank-owned properties are already marked down 20 to 30 percent compared with other homes in the neighborhood, so you may not have much luck making a lowball offer of even less. However, if the home has been on the market a long time, your chances are better of talking the price down. It helps to know if there are other liens against the property for homeowner's association dues, property taxes and so on, because then you can calculate how much the bank needs to get out of the property to break even.

Banks are not required to disclose defects in the property in the same detail that regular sellers are because they have not lived in the home. It's important to get an expert home inspection to look for expensive flaws. If you are in a competitive bidding situation, you may be able to get a "pre-inspection." This inspection is conducted before you make your offer, and will help you decide if the place is in good enough shape to make an offer at all.

Nearly all bank-owned properties are listed on an as-is basis. That means the bank is stating it will not repair defects to the property. If you find flaws, you should mark your offer down accordingly. Alternatively, if the property has been sitting around for awhile, even though the bank has listed it "as is," it may be able to pay for repairs in order to get the home off of its books.

It's best to approach any home purchase with your own pre-approved financing in place, but since you are dealing with a bank, it is quite possible that they will want you to get pre-approved by their own mortgage department as well. Some banks selling properties will actually offer to provide you a mortgage for a property. It's a fine idea, as long as you have shopped around elsewhere and know you are getting a good rate and fees.

Copyright 2011 ABC News Radio

Thursday
Feb172011

Philadelphia Man Moves to Foreclose on Wells Fargo Over Mortgage

Photo Courtesy - Justin Sullivan/Getty Images(PHILADELPHIA) -- When a Philadelphia man became fed up with his bank for failing to respond to his mortgage questions, he took them to court and won.  Now, he has moved to foreclose on Wells Fargo's local office.

The saga began in 2009, when Patrick Rodgers first wrote to Wells Fargo, requesting itemized information about the mortgage on his home in Philadelphia.  The bank was forcing him to take out a $1 million homeowners policy on his home, which he maintains is worth far less than that.

Over the next year he sent at least four letters to Wells Fargo from June to September and got exactly no replies.

The bank, he said, insisted on what's known as forced-place home insurance, which cost $2,400 a year.

But Rodgers said the market value of the home is not $1 million because his neighborhood is "not too far from the wrong side of the tracks" in West Philadelphia.  He bought his three-story Victorian home for $180,000 in 2002.

Rodgers did some research and learned that the Real Estate Settlement Procedures Act, or RESPA, passed in 1974, requires that a mortgage company acknowledge written requests within 20 business days, or face damages or penalties.

So he went to court, citing the law, and received a $1,173 judgment against Wells Fargo.  The bank did not respond to his action and he won a default judgment.  Then Rodgers placed a sheriff's levy against Wells Fargo's local mortgage office for the judgment, plus interest.

He said he was surprised that Wells Fargo had not responded despite media attention about his story, as first reported in the Philadelphia Inquirer.

Wells Fargo finally responded with two checks -- $1,078 on Jan. 14 and $95 on Jan. 26 -- but he said he still had not received a response to his letters.  So he turned to the Philadelphia sheriff's office to initiate a sale of the Wells Fargo Home Mortgage office in Philadelphia.

On Tuesday, the court placed a temporary stay on the sale, and ordered a hearing on Feb. 23 to determine the final status.

Rodgers said he is now awaiting $50 from Wells Fargo for the cost of initiating that sale.  He said the sheriff's sale can continue until then, barring an unfavorable judgment from the hearing, which he does not expect.

Copyright 2011 ABC News Radio

Tuesday
Jan182011

Foreclosed Homes: One in Five Vandalized Before Lenders Can Sell

Photo Courtesy - ABC News(HUNTINGTON BEACH, Calif.) -- At a time of record foreclosures, vandalized lender-owned homes are causing big headaches for banks and agents across the country.

Vandals have caused over $250,000 in damage to a foreclosed home in Huntington Beach, Calif. The two-story home was previously valued at over $1.7 million, but is currently undergoing extensive renovation before the bank that owns the home tries to sell it again.

Vandals poured cement and chemicals down drains and left water running in the bathtub to flood the property. All the drainage pipes had been clogged, which led to the pool to turn green. Mold and decay had spread around the home.

The home was at a foreclosure auction in August, listed for $1,782,214 in cash, but it returned to the bank when no one had bid on it. The police had no witnesses when the property vandalism was discovered in September, so they have not pressed charges.

Repairs to return the house to its original value are estimated at over $250,000. Work should be complete by the end of January.

Huntington Beach, Calif. is not the only city dealing with vandalism in distressed properties.

About 13.9 percent of all real estate properties owned by a bank or agency were so badly damaged that they did not qualify for standard mortgage financing, according to data collected from real estate agents across the country for November 2010.

Copyright 2011 ABC News Radio







ABC News Radio