While incidences of mortgage fraud have remained steady over the past six quarters overall, submissions of fraudulent employment/income information are on the rise, according to the latest Mortgage Fraud Risk Index by Interthinx.

Employment/income fraud on mortgage applications increased 8.8 percent during the third quarter of 2011.

California housing production increased for the third consecutive month in October as builders pulled permits for 17 percent more housing units when compared to October 2010, the California Building Industry Association recently announced.

According to statistics compiled by the Construction Industry Research Board (CIRB), permits were pulled for 2,782 total housing units in October, up 17 percent from the same month a year ago but down 26 percent from September. Permits for single-family homes totaled 1,444, down 4 percent from October 2010 and down 8 percent from the previous month, while multifamily permits totaled 1,338, up 54 percent from a year ago but down 38 percent from September.

For the first ten months of the year, permits were pulled for 37,274 total units, up 7 percent when compared to the first ten months of 2010, when 34,745 permits were issued. Permits for single-family homes were down 14 percent, while permits for multifamily units were up 38 percent.

More info

A report by CoreLogic shows that 22.1 percent of all residential properties with a mortgage were in a negative equity position at the end of the third quarter.  This is down slightly from 22.5 percent in the second quarter. An additional 2.4 million borrowers had less than 5 percent equity, referred to as near-negative equity, in the third quarter. Together, negative equity and near-negative equity mortgages accounted for 27.1 percent of all residential properties with a mortgage nationwide in the third quarter, down from 27.5 in the previous quarter.

“Although slightly down, negative equity remains very high and renders many borrowers vulnerable when negative economic shocks occur, such as job loss or illness. The nearly $700 billion mortgage debt overhang has touched many corners of the market, and this overhang is holding back the recovery of the housing market and broader economy,” said Mark Fleming, chief economist with CoreLogic.

Nevada has the highest negative equity percentage with 58 percent of all of its mortgaged properties underwater, followed by Arizona, 47 percent; Florida, 44 percent; Michigan, 35 percent; and Georgia, 30 percent. This is the first quarter that Georgia entered the top five, surpassing California which had been in the top five since tracking began in 2009.

The top five states combined have an average negative equity ratio of 41.4 percent, while the remaining states have a combined average negative equity ratio of 17.6 percent.

More info

On Nov. 18, 2011, at the request of NAR and the American Land Title Association (ALTA), Freddie Mac amended its policy regarding its mandatory short sale affidavits.  The purpose of the affidavits is to prevent fraud by requiring the buyer, the seller, the real estate brokers, the escrow/closing agent, and any transaction facilitator to make various certifications (including that the short sale is an arm’s length transaction and the buyer will not resell within 120 days unless there are substantial improvements).  Servicers are required to implement the changes by January 1, 2012, but are encouraged to do so immediately.  Each servicer covered by the policy must update its forms to comply with the revised policy.  REALTORS® are encouraged to make sure they are signing an updated form and, if presented with an old form, are well-advised to request the servicer to update or allow amendments to the form before they sign, to avoid potential liability issues.

Key changes to Freddie affidavit policy include:

• The certification is made based on “the best of each signatory’s knowledge and belief.”  Freddie has retained the statement that a signatory making “a negligent or intentional misrepresentation” agrees to indemnify the servicer and Freddie Mac for losses.  The addition of the knowledge standard significantly reduces this liability. 
• Only a signatory who makes a negligent or intentional misrepresentation, based on the best of his or her knowledge and belief, is responsible for indemnifying the servicer and Freddie Mac for any loss.  No signatory is responsible for the certification of any other signatory.
• Although Freddie Mac is requiring all signatories to sign one affidavit, the amended policy no longer allows the affidavit to be an addendum to the sales contract.  NAR members are advised not to sign a document implying they are parties to the sales contract.

More info

The Conference Board Consumer Confidence Index, which had declined in October, improved in November. The Index now stands at 56.0 (1985=100), up from 40.9 in October. The Present Situation Index increased to 38.3 from 27.1. The Expectations Index rose to 67.8 from 50.0.

Consumers’ appraisal of present-day conditions improved in November. Those stating business conditions are “good” increased to 13.3 percent from 11.2 percent, while those stating business conditions are “bad” declined to 38.2 percent from 43.7 percent. Consumers’ appraisal of the labor market was also more upbeat. Those claiming jobs are “plentiful” increased to 5.8 percent from 3.6 percent, while those saying jobs are “hard to get” decreased to 42.1 percent from 46.9 percent.

More info

Data through September 2011, released yesterday by S&P Indices for its S&P/Case-Shiller Home Price Indices show that nationally home prices did not register a significant change in the third quarter of 2011, with the U.S. National Home Price Index up by only 0.1 percent from its second quarter level. The national index posted an annual decline of 3.9 percent, an improvement over the 5.8 percent decline posted in the second quarter. Nationally, home prices are back to their first quarter 2003 levels.

As of September 2011, the annual rate of change in 14 of the 20 MSAs and both Composites, covered by S&P/Case-Shiller Home Price Indices, improved versus August. Atlanta, Las Vegas, Los Angeles, San Francisco, Seattle, and Tampa recorded lower annual declines in September compared with August. Detroit and Washington, DC were the only two MSAs to post positive annual rates of 3.7 percent and 1.0 percent, respectively.

More info

Beginning Dec. 7, Fannie Mae will launch the HomePath Online Offers Program to collect offers and manage the offer-submission process on properties listed on HomePath.com. Agents and brokers representing buyers are now required to submit offers exclusively on HomePath.com. All properties listed in California and Florida are eligible on the designated launch date.

The HomePath Online Offers Program is designed to ease and create transparency during the offer submission process with the following features:

• An easy to use, self-service offer submission system that can be assessed through HomePath.com
• A transparent offer process that keeps Selling Agents informed of the status of their clients’ offers on HomePath properties listed on HomePath.com
• Improved communication between the Selling Agent and the Listing Agent regarding offers on HomePath properties listed on HomePath.com

More info

For those of you who use our MLS service offered on this site, you need to read the following as status information is going to be changed.

Effective January 4, 2012, the San Francisco Association of REALTORS® MLS is revising the listing status options in the MLS. The revised statuses are designed to help practitioners better serve their clients and are reflective of both current market conditions and practices in the field. 

The new status definitions were developed after an evaluation of what surrounding MLSs in Northern California are doing, as well as an exploration of the needs in our local market(s). Recommended by the MLS committee and authorized by the SFAR Board of Directors, the new MLS statuses appear in the status list below, indicated by an asterisk.

MLS Statuses as of January 4, 2012

  *New MLS status as of January 4, 2012

Automatic MLS Status Conversions

Upon implementation of the new statuses, listings under two current MLS statuses will be converted to one of the new statuses. Below is a guide indicating which statuses will be converted to a new status.

If your listing has been converted from Active Contingent to Active Contingent – Show, and you need to change the status to one of the other active contingent statuses, you can do so by clicking on Status Information in the Revise Listing menu for your listing. Please be aware that per SFAR MLS Rules, MLS listings must be updated to reflect the correct status within 72 hours of the change.

If your listing has been converted from Withdrawn to Withdrawn – Cancel, but your listing is only temporarily off the market, you will need to contact MLS staff to change the listing to the new Temp. Off  Market status. Please send a request in writing by email to mls@sfrealtors.com or by fax to 415-553-3968 to have this change made.

Additional Information

Within 3 days of accepting any offer on a listing in the MLS, the listing agent must report the sale, by marking the listing as Pending or choosing one of the four Active-Contingent statuses. Adding the new Active-Contingent statuses allows listing agents to comply with MLS rules requiring them to change the status from Active while still clearly indicating that the property is available for backup offers or overbid at a court confirmation hearing. The Active Contingent – Show status remains to allow listing agents to solicit backup offers while Buyer contingencies are still in effect. In addition to Active listings, all Active Contingent statuses are available in all IDX/VOW feeds and on Realtor.com – provided the listing agent indicates that the Seller wishes the listing to be included in the IDX and VOW program(s).

The addition of Temporarily Off Market will allow listings agents to accurately communicate to cooperating brokers and agents that the listing agreement is still in effect, but the property is not being shown or marketed for a period of time. Further, the new Withdrawn-Duplicate status should be used if the listing has been entered into more than one property type, such as a 3-unit building listed as both a TIC and a multi-unit building. At the time a pending sale is reported for one of the listings, the additional listings should be reported as a Withdrawn-Duplicate listing.

SFAR hopes you find the changes useful in your business.

The U.S. Congress late last week passed an appropriations bill that will continue to fund the government and includes a provision to reinstate the Federal Housing Administration (FHA) loan limit in high-cost areas for two years.  President Obama signed the measure into law yesterday.

The bill increases the FHA loan limit to the lower of $729,750 or 125 percent of the highest median home price in each metropolitan statistical area (MSA), effective the date of enactment of the bill through December 31, 2013.  The loan limits for FHA and Fannie Mae and Freddie Mac all fell to the lower of $625,500 or 115 percent of the highest median home price in each MSA on October 1, 2011.  The provision does not affect the loan limits for Fannie Mae or Freddie Mac.

A continued government role in housing financing will ensure stability in mortgage markets and that home buyers in high-cost areas will be able to refinance and obtain FHA financing for new home purchases more easily.  However, it will cost these home buyers more to finance their homes either through jumbo mortgages or with FHA than it would have through Fannie Mae or Freddie Mac.

The conforming loan limit determines the maximum size of a mortgage that government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac can buy or “guarantee.” Non-conforming or “jumbo loans” typically carry higher mortgage interest rates than conforming loans, increasing monthly payments and hampering the ability of families in California to purchase homes by making them less affordable.