8:30am | A federal refinancing program was extended on Monday, the U.S. and Japan will likely lead the world in distressed asset sales, nearly seven in 10 who sold their home in 2009 did so to avert financial catastrophe and Realty Bites is tackling the Grand Prix (see the bottom of this column for details on that last bit).
The White House announced on Monday that the Home Affordable Refinance Program, which was set to expire in June, will be extended for another year. That will give borrowers with little or no equity in their homes another year to take advantage of a refinancing program, according to a story in the Washington Post. So far the program has reached fewer than 200,000 of the up to 5 million borrowers federal regulators hoped it would help, the Post story states.
The United States and Japan are expected to see the biggest rise in distressed property sales in the first quarter as the fallout from the global property downturn intensifies, according to a Reuters story on Monday on the release of a quarterly report issued by the Royal Institution of Chartered Surveyors. Brazil, India, Hong Kong and Australia are more optimistic and expect fewer distressed property listings, according to the report.
Authors of the report define distressed properties “as those with a foreclosure order or are advertised for sale by their mortgagee, and which tend to fetch a lower price than their market value,” according to the Reuters story.
The report shows 85% more respondents in the U.S. polled during the fourth quarter expect distressed property sales to rise in the first three months of 2010, compared with about 68% in the third quarter. In Japan, the number of respondents predicting an increase in distressed sales rose from 12% in the third quarter to 80% this quarter. Rounding out the top five markets expected to be worst hit by distressed sales this quarter are Ireland, Scandinavia, and Spain, the report shows.
Long Beach Press-Telegram staff writer Greg Mellen actually wrote a cover story for me in Real Estate Southern California on the much-anticipated run on distressed assets waiting to take shape nearly a year-and-a-half ago—it may be old, but the story is still pertinent today.
Put this in the kind of old news category, but I stumbled across this report form the California Associations of Realtors issued last week that bears mentioning: 67% of all sellers in California in 2009 did so as a result of difficulties related to meeting their mortgage obligation.
“Tighter underwriting standards and a decline in equity continued to impact the market in 2009,” CAR President Steve Goddard said in a statement. “Many homeowners chose to sell last year because their adjustable-rate mortgage reset at the same time home prices were experiencing an unprecedented decline, leaving them with little equity and difficulty in qualifying for a refinance.”
On average, homes sold for nearly $21,000 less than the original asking price in 2009, and the median difference between the selling and listing price was over $32,000, the report shows. Reasons listed at prime selling motivators in the survey for 2009 were: difficulty meeting the monthly mortgage obligations (30%); job loss (18%); and “mortgage payment increased” (15%).
And lastly, I’m looking for a little help from lbpost.com readers. I am writing a column on how people use their properties during the Toyota Grand Prix of Long Beach. I know, for example, that people in the International Tower hold extravagant parties during the event each April. There are others with stellar Grand Prix views, who have purposely purchased their property just for a view of the Grand Prix.
If you know of anyone who is doing something Grand Prix related with their residential or commercial properties, please e-mail me at [email protected].