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February 29, 2012

Moving! Follow the Real Estate Wonk to new home

The Real Estate Wonk has moved -- fitting, for a blog about housing. You can tag along to the new location by going to baltimoresun.com/realestatewonk.

The new home is more fully integrated into the Baltimore Sun's main site. What I write from now on will be searchable there, something that wasn't possible before. Let me know what you like or don't like about the design so I can pass your thoughts on to the folks who will make blog nips and tucks in the future.

For the time being, at least, this former home will continue to exist as an archive so you can find and read old posts. I plan to keep linking back here. (Direct address, in case you'd like to save it: weblogs.baltimoresun.com/business/realestate/blog.)

Thanks for reading!

Posted by Jamie Smith Hopkins at 8:37 AM | | Comments (3)
        

February 28, 2012

Realtors to rally against proposed change affecting Md. mortgage-interest deduction

Realtors have kicked off a campaign to keep legislators from approving a budget proposal that would reduce the amount of itemized deductions higher-income Marylanders could claim on their state taxes, a move they say would effectively cap the mortgage-interest deduction.

They're running ads, posting pieces online and organizing a rally in Annapolis Wednesday -- with transportation provided from locations across the state -- that they hope will draw homeowners as well as agents.

The proposal, part of the consolidated budget bill submitted on behalf of Gov. Martin O'Malley, would reduce by 10 percent the amount of itemized deductions that individuals and couples can take if they have adjusted gross income of more than $100,000 but no more than $200,000. Those with adjusted gross income of more than $200,000 would see their itemized deductions reduced by 20 percent.

The Maryland Association of Realtors says this would effectively limit the mortgage-interest deduction, a big piece of what people typically itemize, as well as deductions for property taxes.

"We think it makes it harder for homeowners to own their homes and to stay in their homes," said Mark Feinroth, director of regulatory affairs with the trade group. "It's very bad tax policy."

But Raquel Guillory, a spokeswoman for O'Malley, said 10 states -- including Pennsylvania and West Virginia -- have no itemized deductions for personal income taxes. Five others, plus D.C., limit them for some filers, she said.

"Under this plan, 8 out of 10 Marylanders will see no change in their deductions," she said in an email.

A taxpayer with an adjusted gross income of $150,000 and $24,000 in itemized deductions would pay $191 extra in Maryland taxes under the proposal, Guillory said. For the $275,000-income taxpayer with $33,000 in itemized deductions, it would come to $541 extra.

The budget proposal doesn't specifically target the mortgage-interest deduction, but that deduction has been the target of national discussions about changing tax policy to help plug the deficit. Here's an example of the back-and-forth last year. And in late 2010.

Some think the deduction is a bad idea, period.

"If someone proposed a tax 'reform' designed to push house prices up and encourage buyers to borrow to the limit of their ability at taxpayers’ expense, it is unlikely that they would get much support. Yet that is precisely what the home mortgage interest deduction does," Alan Mallach, a senior fellow at the Center for Community Progress, wrote in a Reuters opinion piece last year.

He added: "No matter what real estate agents say, there is no evidence it encourages home ownership overall. When it comes to home ownership rates in developed countries, the United States is roughly in the middle of the pack, about the same as Australia and Canada, which don’t have a similar deduction. Italy abolished its deduction in 1992, and still has a much higher home ownership rate than the U.S."

Thirty-eight percent of Marylanders claimed the mortgage-interest deduction in 2008, according to the Tax Foundation -- the highest share in the nation.

The head of the Tax Foundation testified last year that almost two-thirds of the benefits of the mortgage-interest deduction go to taxpayers earning more than $100,000, along with even more of the benefits of deductions for state and local taxes.

"Many rightfully argue that these provisions effectively subsidize high-tax communities at the expense of low-tax communities or subsidize homeowners at the expense of renters," Scott A. Hodge, president of the group, said in his written testimony.

The Obama administration is also proposing a reduction to itemized deductions for higher-income taxpayers. The National Association of Realtors said it doesn't think the idea has a chance in Congress.

"The nation's homeowners already pay 80 to 90 percent of U.S. federal income taxes," Moe Veissi, president of the trade group, said in a statement. "Raising taxes on them, now or in the future, could critically erode home values at all price levels."

Thumbs up, down or sideways to the mortgage-interest deduction?

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (16)
Categories: Mortgages
        

February 27, 2012

Who's representing you?

If you're buying or selling a house, did your real estate agent explain the difference between a buyer's agent, a seller's agent, a cooperating agent and a dual agent?

No? Maybe?

It's the sort of thing that might sound like WSIGAC -- why should I give a carp -- but consumer advocates suggest paying attention. Agents in Maryland are supposed to give you a disclosure form to sign at your first appointment with them so you understand who they (and their bosses) are actually representing at the negotiating table.

Are they a seller's agent or a cooperating agent in the transaction? Then their "duty of loyalty" is to the seller alone, the state says. They can help someone else buy the house, but they're not representing that buyer -- surprising the heck out of some buyers.

If they're a buyer's agent in the transaction, they're representing the buyer and have a signed agreement from the buyer to show for it. A "presumed buyer's agent" is representing the buyer without a signed agreement and will need to get one before submitting any offers on property.

"Dual agency" happens when the buyer and seller in a single transaction end up being represented by agents working for the same real estate broker. Maryland law bars a single agent from representing both parties, but the agent's broker can do so, according to the Maryland Real Estate Commission.

John F. Sullivan, a Maryland agent who works only for buyers and thinks dual agency is fraught with conflicts of interest, is hoping the General Assembly passes a bill that would make the disclosure form disclose more -- bringing the state into a tug-of-war between a trade group for Realtors and the trade group for brokerages that represent buyers only.

He's planning to testify this week that "chronic misunderstandings about agent fiduciary responsibility have contributed to the foreclosure crisis both in Maryland and across the nation" -- namely that buyers weren't given good advice by agents about what they could actually afford, and thus did not have their best interests protected.

Senate Bill 644 would add the terms "exclusive buyer agent" and "exclusive seller agent" -- the intent is that only agents working for brokerages that just represent buyers could call themselves the former, and only agents at brokerages that just represent sellers could call themselves the latter, Sullivan said.

The bill would also require that consumers be given an explanation of what "single agency" means (the opposite of dual -- representing only the buyer or the seller in the same transaction) and what a "subagent" is (someone assisting the buyer but employed by the brokerage being used by the seller).

Oh, and the consent form a buyer and seller are supposed to sign if they end up with same real estate broker? It would be changed to say that "there will likely be a conflict of interest because the interests of the seller and the buyer are different or adverse" -- rather than the current "may be a conflict of interest" and "may be different or adverse." 

"If passed, these changes to the Real Estate Brokers Act ... would provide the consumer with all of their agency choices when selling or buying their home," Sullivan, an exclusive buyer agent who is vice president of Buyer's Edge Co. Inc., wrote in an email. "It would be the first of the 50 State agency disclosure statements in the country to provide the consumer with all their agency options including exclusive buyer, exclusive seller and most importantly single agency."

The Maryland Association of Realtors says thanks but no thanks. Mark Feinroth, director of regulatory affairs with the trade group, said the National Association of Exclusive Buyer Agents asked the state real estate commission to change the disclosure form last year. The commission declined. This bill seems to grow out of that request and "makes a big change in agency law that's really unwarranted," he said.

"We think this is an effort by the exclusive buyers' agents to have their business model shown as a preference in the process and in the form," Feinroth said. "They're certainly entitled to their business model ... but we don't think it's appropriate for any business model to be preferred in the statute. And we think that's really what they're asking."

Agency -- who's representing whom -- "is already the most difficult concept to train licensees in, and it's a very difficult concept to explain to consumers," Feinroth said. "I think this will make it even harder to understand."

The Maryland Real Estate Commission voted to oppose the bill. The executive director said through a spokeswoman last week that the commission wouldn't comment on the reasons until the hearing, which is scheduled for Wednesday at 1 p.m. in Annapolis.

Sullivan, the exclusive buyer agent, said it doesn't surprise him that the commission opposes it because a majority of the members are industry players, and the industry likes the disclosure form as is.

He is trying to get consumers to think twice about what type of agent to hire. He was president of the National Association of Exclusive Buyer Agents in 2009, when the group surveyed members about their transactions in the previous three years and then determined how many ended in foreclosure. It was 0.8 percent, less than half the rate of foreclosure nationwide, the trade group said.

Sullivan says clear disclosure would be better for sellers, not just buyers -- and for agents, too. This piece delves into the legal implications for agents when they purposely or accidentally breach their fiduciary duty.

What do you think?

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (11)
        

February 24, 2012

'Severely' overburdened homeowners, renters

How many people spend more than half their income on housing costs? More than you might think.

In the Baltimore area, one in five households with workers pulling down middle-income or lower-income wages fell into that pinched group in 2010, according to a new report by the Center for Housing Policy. That's nearly 85,000 households "severely burdened by their housing costs."

But it's not quite as bad as the nation overall, with nearly one in four of what the center dubs "working households" falling into that category.

The center, which looked at regions and states across the country, considered all renter and owner households with adults who made no more than 20 percent over their area's median income and worked at least 20 hours a week on average in 2010. That means retirees weren't part of the calculation -- and neither were those who were out of work or had their weekly hours cut below 20, a situation that plenty of Americans were stuck in that year.

"Had they been included, the number and share of low- and moderate-income households with severe housing cost burdens would have been higher: overall, 27 percent of low- and moderate income households in the United States — or 18.2 million of the more than 67 million households — had a severe housing cost burden in 2010, up from 25 percent in 2008," wrote the report's author, Laura Williams.

The share of severely burdened working households in the Baltimore area has fluctuated a bit the last few years. It was 19 percent in 2008 and 21 percent in 2009 before dipping to 20 percent in 2010.

The United States, by contrast, has steadily inched upward: 22 percent, 23 percent, 24 percent.

The report looked at both homeowners and renters, finding that tenants were hit with rising rents (up 4 percent) and declining income (down 4 percent) while homeowners' income fell faster than their housing costs (down 5 percent and 2 percent, respectively).  

"Median housing costs for working homeowners declined modestly between 2008 and 2010," the center noted. "Meanwhile, the incomes of working homeowners declined even more, driven in large part by a decrease in the median number of hours worked per week."

Where do you stand?

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (2)
Categories: Affordable housing, Housing stats, Renting, The economy
        

February 23, 2012

Water billing delay means bigger sum due

Micah Cohen got a nasty surprise recently when he opened the water bills for several of the Baltimore properties he rents out: They weren't for the usual three months. The charges stretched over half a year in some cases and nearly a year in others.

That meant much bigger payments than he and his tenants -- who reimburse him -- are used to making in one fell swoop. He sent as an example a bill for one of the homes, which came to $1,300 for eight months.

"How is anyone supposed to pay this?" Cohen wrote. "Are any other normal working people in the city being billed out-of-cycle like this (months and months of non-billing, then BAM! a huge multi-quarter bill!)?"

Yes -- along with other problems. Auditors looking at bills issued to 70,000 customers of the city's water system found that 65,000 were likely overcharged over the past three years, most of whom had not been made whole. The city said Wednesday that it is issuing refunds to 38,000 households in the city and Baltimore County, averaging more than $110 apiece.

More on that in this story by colleagues Julie Scharper and Luke Broadwater. (And check out @WaterBillWoman, the Twitter account of a city resident who's been insisting for quite some time that the system was in trouble.)

But what happened in Cohen's case? The city Department of Public Works looked into the bill he sent me -- covering nearly three full quarters rather than one -- when I inquired.

Kurt Kocher, a spokesman for the agency, said the meter reading on that property failed "tolerance" (meaning it was either unusually high or low), so it was supposed to be immediately kicked back to a meter reader to see if an error had been made or if the meter was faulty. Only afterward would a bill be sent out.

"What happened in this case was, reads were going in quarterly but the reads kept failing tolerance and for this particular property for some reason, a new read was not ordered," Kocher said. "And that caused the delays."

He said a payment plan might be possible to ease the pain of a larger-than-normal bill. But he added that property owners have a responsibility to know when their water bills should come and to call the city if nothing arrives. Homeowners can email water@baltimorecity.gov, he said.

"Always remember you've got bills to pay," Kocher said.

Cohen, who says with only slight exaggeration that property owners have about 80 bills to keep track of, isn't wild about Kocher's suggestion. "Billing me shouldn't be my responsibility. You want my money, bill me!" he wrote, adding: "If the cable company can manage to bill me regularly, I don't see why Baltimore City can't."

But he's very enthusiastic about the staffers in the water department who handle calls about billing. One employee in particular has spent so much time trying to resolve his problem that he declares her an "angel." She's set in motion new bills on two of his properties, saying the amounts weren't just high because they were for more than one quarter, they were actually incorrect, he told me Wednesday.

"I was actually told that the reason for the jumbled billing cycles and huge bills was because of a scheduling glitch (a freezing cold reading date) that affected meters and readings all over the city," Cohen said.

As I was starting to write this piece, I heard from another Baltimore homeowner that she too got a water bill for more than three months -- May through October for a property she purchased in November. Lisa Potteiger's understanding is that the previous owner will be on the hook for that bill, but she's upset about the delay because she thinks it would have made clear before she settled on the home that there's a leak.

"Right now I am looking at a minimum of $2,500 for this repair," she wrote me. "NOW they are back on top of billing on time and my current water bill is over $1,200 and counting until I get it fixed."

When I inquired about her case Wednesday, a city staffer immediately contacted her to try to resolve the problem.

Kocher said the public works agency is working to overhaul the system so it functions better in the future. (Here's an announcement about that from last year, and a follow-up here.) "We are moving very rapidly toward getting the new metering and billing system going," he said.

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (3)
Categories: Utility bills
        

February 22, 2012

A 'responsible homeowner' reward

You may have heard homeowners underwater on their mortgages but not behind on the payments ask, "So where's my bailout?" (You may in fact have said it yourself.)

Some companies are answering, "Right here."

About 20,000 homeowners nationwide, including 500 in Maryland, are enrolled in the Responsible Homeowner Reward program, which pays borrowers incentives to stay current on their mortgage. The homeowners were offered the future cash payments by their mortgage servicer, mortgage owner or private mortgage insurer -- about a dozen companies are participating all told.

Frank Pallotta, managing partner of the Rumson, N.J.-based Loan Value Group, which created and administers the Responsible Homeowner Reward program, says participants include the PMI Group and GMAC Mortgage.

The dollar amounts vary, but the basic idea is this: Stay current on your mortgage, get a cash payment at an agreed-upon time -- when you refinance or sell, for instance. The program aims to prevent "strategic default" -- where borrowers who can afford the payments decide they're throwing good money after bad and simply walk away -- by offsetting some of the lost value.

"For years and years, the mindset was, people pay their mortgage because it was the moral thing to do," Pallotta said. "Well, it might have been, people pay their mortgage because they have equity. Once that equity is gone, you need to replace it or you will experience a higher default rate."

A borrower who's never missed a payment but owes 50 percent more on his mortgage than the home is worth "is as much a risk to the owner of that loan" as a more modestly underwater borrower who's two months behind, he contends. "The question becomes, 'Why am I going to make this payment? I'm so far underwater,'" he said.

The Responsible Homeowner Reward program isn't principal reduction -- it doesn't alter the terms of the mortgage -- but a New York Times piece said it amounts to the same thing. Pallotta said the incentives have allowed some homeowners to refinance into a lower rate because it reduced the amount of money they had to bring to the table to pay down the original loan enough to qualify.

Other borrowers have been told that their bank will partially -- or fully -- match every dollar above the minimum payment that they make on their second mortgage. "Second liens are almost all underwater," he said, calling them a tremendous ticking time bomb for the financial institutions that hold big numbers of them.

He said the Responsible Homeowner Reward program has lowered delinquency rates on first and second mortgages compared with control groups. 

The number of borrowers who have been offered one of these incentives are a tiny percentage of the underwater crowd. Maryland alone has more than 300,000 borrowers who owe more than their homes are worth, according to estimates from real estate data firm CoreLogic.

Pallotta, who would obviously like to see participation rise, says it's up to financial companies with a stake in the loans. If a homeowner wants an incentive, "they should call up their servicer."

"Bill-paying online is something that only a few banks started to do early on," but then the rest felt the pressure as consumers called up to demand it, he noted.

Of course, it's easier to take your business elsewhere if you're moving your savings account than if you're upside down on your mortgage. But Pallotta's contention is that companies ignore underwater borrowers at their own risk.

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (0)
Categories: Mortgages, The foreclosure mess, Underwater
        

February 21, 2012

Consumer advocates decry lending proposal

Industry players are calling it a technical clarification. Consumer advocates contend it's a much bigger and badder deal, weakening protections for mortgage borrowers.

What they're arguing over is legislation in the General Assembly about "table funding," a little-known -- and in Maryland, little-used -- type of mortgage lending.

Table-funded loans are made by mortgage-broker companies in their own name, rather than in the name of a lender, but are immediately sold to a lender who will provide the actual funding, according to HUD. That's different than typical mortgage brokering, where the loan is closed in the lender's name, and from cases where borrowers work directly with lenders that fund the loans themselves but sell them on the secondary market to Fannie Mae, Freddie Mac or others in the mortgage-backed securities business.

Marceline White, executive director of the Maryland Consumer Rights Coalition, said the state has long banned the practice of getting a mortgage broker "finder's fee" for table-funded loans. But legislation proposed in both the House and Senate would change that, she said.

Here's the Senate version, SB 451, and the House version, HB 674

"As a broker, you get a certain fee for finding a lender for the loan," White said. "But in this case, you're the lender. You shouldn't get a fee for finding yourself. ... There's an inherent conflict of interest if you're acting both as a broker and a lender. But the more alarming part is that it opens Maryland back up to table-funded mortgages, which really have not been happening as much in Maryland and have been really strongly linked to predatory lending."

She contends that table funding allows companies to "skirt" Real Estate Settlement Procedures Act and Truth in Lending Act protections for borrowers, meaning less disclosure and potentially worse loans.

The proposed legislation would also reduce the statute of limitations for suits from 12 years to three and make all the changes retroactive, affecting current lawsuits, White said.

Tom Shaner, executive director of the Maryland Association of Mortgage Professionals, a trade group that includes mortgage brokers and others in the industry, said mortgage firms simply wanted clarification in the law about what exactly constitutes table funding and how they should be compensated if they do it.

"Part of the concern was back to the questions of law and how it should be interpreted -- and how some plaintiff attorneys are seeking cases where nobody feels there was anything wrong, but there's a technical glitch in the law," Shaner said. "So we'd like to get it resolved." 

His group asked for the legislation last year, but this year the request came from the Maryland Bankers Association.

As of Monday afternoon, the legislation's future was uncertain. Shaner's group heard from the Senate finance committee that officials want an AOK from the state commissioner of financial regulation before passing such a bill, and he's not sure whether that could be done in time. Shaner was also getting signals that the Maryland Bankers Association would ask to have the bill withdrawn, possibly to try again next year.

Kathleen Murphy, president and chief executive of the bankers association, said by email that withdrawal would be up to legislators.

"The MBA requested that these bills be introduced to make it clear that a person who originates a mortgage loan in a 'table funded transaction' does not violate the Finder's Fee law when the person collects a fee for services rendered," she wrote. "The Finders Fee law says that you can only receive a fee as a lender or a broker -- not both -- in the same transaction. The bill would clarify what we believe is the law -- that a person who originates a 'table funded transaction' may collect a fee (not two fees, but one fee) for the work involved with originating a loan. The bill addresses what we believe was an incorrect court decision."

Shaner said table funding has been used to make predatory loans, just like other types of lending, but he said that's not its purpose.

"The use of the table funding was really to help expedite mortgages, expedite the whole process," he said. "It just has to get interpreted so everybody's clear on 'this is what you can do.' Many, many brokers are no longer involved in table funding. Look, why take a risk if it's not clear on how this law is going to be interpreted?"

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (5)
Categories: Mortgages
        

February 20, 2012

9 months of housing-market supply -- for now

It would take nine months to sell all the homes on the market in the Baltimore region at the pace people are buying these days, in case you were wondering.

That's simple math. What's trickier -- naturally -- is knowing how long it will take to sell a particular house. Or whether the months' supply is headed up or down.

Six months of supply is usually the rule of thumb for a market balanced between buyers and sellers. Not surprising that it would be higher than that (advantage, buyers) in January, part of the slow season.

But the other factor at play is the temporary slump in foreclosures for sale -- something that's expected to reverse in the not-too-distant future, now that the bank settlement over robo-signing is done. The Mortgage Bankers Association says foreclosure processing could initially slow further as big mortgage servicers put settlement requirements into place, but that it should speed up afterward.

And on top of that, you've got both would-be buyers and would-be sellers sitting things out for now. When they choose to get off the sidelines will affect the months of supply figure, too.

Some homeowners are waiting for prices to go up before they sell, either because they can't or don't want to accept today's prices. A lot of possibly-future buyers seem to fall into one of two groups, too: Can't afford it now or not willing to pay today's prices.

Among renters who weighed in on a recent poll, just over a quarter said they're renting because they can't afford to buy a house and just under a quarter said it's because they don't want to buy right now. (Another quarter of participants said the No. 1 reason they rent is flexibility -- you can pick up and leave more easily.)

Where do you stand? Are you on the sidelines of buying, selling or both -- and if so, why?

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (3)
Categories: Housing stats
        

February 17, 2012

What the robo-signing settlement means for all borrowers

If you're not in trouble on a mortgage and didn't lose your home to foreclosure in the last few years, you might think the national settlement between state attorneys general and big mortgage servicers has nothing to do with you.

But the settlement includes a 42-page directive intended to broadly improve mortgage-servicing practices, which critics contend are the pits.

Though the settlement applies only to the big players that signed on (Wells Fargo, Bank of America, Citigroup, JPMorgan Chase and Ally Financial/GMAC), the Maryland attorney general's office says the federal government could eventually make all federal institutions play by these servicing rules.

Here's a taste of what they require:

o Better handling of borrowers' payments. Servicers must "promptly" record payments and post them within two days. If a borrower makes almost all of a scheduled payment -- within $50 of the amount due -- then the servicer must apply it and at least one more such payment to the mortgage, rather than shunting it to a "suspense account" and letting interest and late fees mount.

o More rules about suspense accounts. When payments are put in such accounts, servicers must tell the borrower and apply money from the account to the mortgage as soon as there's enough there for a full payment. They must not sap the money with their own fees until all principal, interest and escrow amounts are paid.

o More disclosure to borrowers. Monthly bills must note not only the amount due but how payments have been allocated, how much principal is left, what fees and charges have been added and how much is left in escrow. If payments are due to change, servicers must give the reason three weeks in advance.

o "Force-placed" insurance reform. This type of insurance, purchased by the servicer and charged to the homeowner, is supposed to protect the asset when the borrower's own policy has lapsed. But it's far more expensive than a regular policy. Homeowners have complained that their servicers stuck them with it when their normal policy was already in place and refused to remove it, putting them behind or digging the hole deeper.

The new force-placed rules state that servicers cannot get force-placed insurance unless they have actual cause to believe there's no policy protecting the home. If homeowners make escrow payments to cover the insurance policy, servicers must forward them to the insurer even if the borrowers are behind on their mortgage payments. Servicers must accept as proof of insurance "any reasonable form of written confirmation of coverage," and if they do force-place, the cost itself must be reasonable.

No fee shenanigans. Servicers can't collect late fees while they're considering a loan modification or short sale or when borrowers are making prompt trial payments toward a modification. They can't charge unreasonable default fees, including pass-throughs from attorneys, and they must disclose everything in detail. And they can’t keep repeatedly dinging homeowners for "inspection fees," broker price opinions and the like.

o Better loan-modification efforts. The agreement includes a requirement for an "easily accessible" single point of contact for borrowers seeking help so they're not starting over with someone new every time they call, as has happened for years. The rules are also designed to avoid the so-called "dual track" of one division working with a homeowner on loan modification while another simultaneously pushes toward auction at the courthouse steps.

o No blight. Servicers have to keep repossessed properties from falling apart and hurting neighborhoods. They have also agreed to "enhance" participation in local efforts such as land banks and community redevelopment.

o No more robo-signing -- of course, since that touched off the entire inquiry. The term refers to people signing court affidavits to allow foreclosure without even reading the documents, let alone having any idea whether the information is right. Faked signatures (Joe Schmoe signing as John Q. Public) and false notarizations were common, according to court depositions.

The new rules say servicers may not use inaccurate affidavits to get the OK to foreclose, must require their signers to review the records before putting ink to paper, must give staffers enough time to do the job properly and cannot pay incentives to anyone -- including contractors -- to reward affidavit-processing speed.

David Paulson, a spokesman for the Maryland attorney general, call the servicing rules "the unsung section" of the settlement agreement. "I know the AGs are very proud of this," he said.

Here's a summary of all the rules. I'm quoting from that. (The full 42 pages probably won't be public until the settlement is given the OK in federal court.)

The Maryland attorney general's office has details for borrowers here, including general information and a Q&A. The staff's suggestion to homeowners hoping they might qualify for help: Contact a nonprofit housing counselor.

Paulson says former homeowners who were foreclosed on might want to touch base with their servicer. "Finding you might be difficult," he said. "We’re kind of encouraging everybody to start this process by contacting the bank and letting them know where you are, at least."

Oh, and one more link: Here's the national site about the settlement.

What do you think?

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (5)
Categories: Mortgage servicing, Mortgages, The foreclosure mess
        

February 15, 2012

Crime, school and amenities data paired with real estate

Real estate search site Trulia now has neighborhood data on crime, schools and other things that aren't real estate but that homebuyers and prospective renters might like to know about before moving in.

The "Trulia Local" option -- here's Baltimore -- offers up a map showing you where violent and non-violent crimes happened, where the schools are (and how parents have rated them) and where you can find restaurants, banks, gas stations and grocery stores. Oh yeah, and the homes for sale along with the recently sold stuff.

What do you think? Does the information look useful? Accurate?

What do you really want to know before you buy or rent?

If you've seen other examples of neighborhood-level data, with or without housing details, please share in the comments.

Here's a link-fest of local resources for crime and school data, if you're in the market for more.

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (5)
Categories: Real estate online
        

February 14, 2012

Company town

Pete from Highlandtown, one of my favorite commenters here (though I love you all), touched on a subject this week that everyone in the region should be giving some hard thought about: Are we a company town? And if so, are we going to go the way that all company towns eventually do?

"In my opinion, much of the 1995-2008 gentrification in Canton/Fed Hill/etc., was due to our proximity to DC," said Pete, who sees neighborhood change at an up-close-and-personal level doing interior demolition and basement excavations for rehabbers. "Im sure that most of your readers know people that commute to DC (or its suburbs) every day. In many ways we have become a suburb of DC. There is nothing wrong with using our proximity to DC to our advantage. But we are very vulnerable to gas price increases, and Federal Budget cuts."

He's sure that if Washington wasn't carved out of Maryland and Virginia in the 18th century, Baltimore's situation would be much more dire, and he's worried about the outcome when the spiraling federal deficit is finally attacked in a real way. He's hardly alone.

Some local economists warned for years that the rapidly increasing amount of federal contracting dollars flowing to Maryland would inevitably have to stop growing, at the very least, taking the accelerator off a prime source of new jobs in the area. (Local officials say they're hopeful that the big federal agencies in Woodlawn, the Social Security Administration and the Centers for Medicare and Medicaid Services, will be A-OK thanks to the aging baby boom generation.)

So much of the I-95 corridor is tied up in some way with Uncle Sam, whether directly (more than 56,000 people work at Fort Meade, enough to populate a small city) or indirectly (think federal research grants to Johns Hopkins, No. 1 recipient of federal science and engineering bucks).

The Johns Hopkins institutions are themselves big players in Baltimore, with more workers than any other private employer in Maryland.

"Baltimore has become a 'two industry town,'" Pete wrote. "We seem to survive solely on Johns Hopkins and the Federal Government. We need to diversify our economy. Or we will suffer the same fate that Detroit did, when its main (and pretty much only) industry ran into trouble."

This matters to housing because people usually need jobs to buy or rent. A healthy economy keeps a region from bleeding population.

There's some talk about more diversification. Coping with tighter federal budgets is the raison d'etre of Blueprint Maryland, launched by a banker now running for Congress. (Here's a Q&A from last year.)

What would you suggest?

How hard do you think your neighborhood would be hit if budget cuts come and there aren't non-government-related jobs to take the place of the ones that disappear?

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (0)
Categories: The economy
        

February 13, 2012

Few bedrooms, big price

You'd be forgiven for thinking that pricey homes always have a lot of bedrooms. They so often do.

Take this seven-bedroom spread in Annapolis. Or this 12-bedroom, 19-bathroom mansion (who's using all these bathrooms?) in New Jersey. Or, heck, this 30-bedroom house near Orlando with an entrance designed to look like the opulent Palace of Versailles. Thirty bedrooms!

But one house selling in the Baltimore region last month in the $600,000 to $799,999 category has two bedrooms at most, according to the newest sales statistics from Metropolitan Regional Information Systems.

I don't know much about this place, except that it's in Anne Arundel County and so is probably well-above-average in price thanks to waterfront. To give you an idea of how unusual this is, there wasn't another one- or two-bedroom single-family house in the entire Baltimore region that sold for more than $400,000 last month.

Average price of a two-bed-or-less house in the Baltimore area last month: $148,000. Almost half sold for less than $100,000.

When it comes down to it, though, how many bedrooms does a mansion really need? I mean, is anyone entertaining enough to make 30 bedrooms a must-have? Also ... 19 bathrooms?

Most buyers are opting for three or four bedrooms. But most buyers aren't rolling in dough. If you were, would you drop some of it on a place with bedrooms in the double digits? (If not, what would you have in your ideal digs?)

On the flip side: Lots of bedrooms does not always an expensive house make. Here's a place with 10 of 'em in Northwest Baltimore currently on the market for $39,000. So if you really need a bunch ...

Thanks, by the way, to colleague Gus Sentementes for handling last week's January home sales story while I was on vacation!

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (2)
Categories: Housing stats
        

February 9, 2012

Md. foreclosures since 2006: Almost 50,000

Mortgage firms have foreclosed on about 49,600 homes in Maryland since the final days of the inflating housing bubble in January 2006, real estate data firm CoreLogic says. That's about 23 homes per day.

Just over 20,000 of those completed foreclosures were on homes in the Baltimore metro area, the company says. (National numbers here.)

It's difficult to get good statistics on the number of done-deal foreclosures. The Mortgage Bankers Association's quarterly survey of delinquent mortgages tracks most of the market, but only to the point of the foreclosure process pre-auction. Not every homeowner who starts down the road to foreclosure ends up losing his or her property. And sometimes homes go in and out of that process several times.

Factoid: Mortgage servicers foreclosed on 3,400 homes statewide last year, about 1,400 of them in the Baltimore region. That's well under the six-year average -- not surprising. We've seen the effects of slowdowns in the wake of the robo-signing revelations in a variety of different measures. This is just the latest.

Speaking of robo-signing: Maryland Attorney General Douglas F. Gansler decided to sign on to the settlement with banks over such practices, a deal that gives Maryland nearly $1 billion for various purposes -- including principal reduction -- but means his office cannot pursue civil liability claims involving mortgage origination or servicing misconduct.

More in Hanah Cho's story here. (Many thanks to Hanah for handling this while I'm out.)

Posted by Jamie Smith Hopkins at 8:05 AM | | Comments (0)
Categories: The foreclosure mess
        

February 7, 2012

Renting by default or by choice

As the homeownership rate drops, the renter ranks swell. Some are renting because it's the only option, except possibly crashing with family, but others could buy and have decided against it -- either for now or indefinitely.

So, tenants, which group are you in? 

Take a quick poll to share the top reason (realizing you might have a bunch) that you're renting:

I'm taking a much-needed week off, by the way. So please forgive the short posts.

Talk amongst yourselves, OK?

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (1)
Categories: Renting
        

February 6, 2012

Proposal would help state keep banks from getting homeowner tax breaks

A reader wrote in the other day because she discovered that her former neighbor's house, foreclosed on several years ago, is still listed in public records as if he owns it and lives there. She wondered whether the foreclosing bank has been reaping property tax breaks all this time because the home is on the books as owner-occupied.

This is not an unusual problem. State officials say mortgage servicers are taking months, sometimes years, to take title to foreclosed property, leaving it in a sort of limbo that makes it difficult for neighbors and officials to determine who's actually responsible for the property.

But I don't think anyone knows just how many times this has happened -- or how much money local jurisdictions have lost as a result of Homestead Property Tax Credits doled out after the homeowner who qualified became a former homeowner. The state Department of Assessments and Taxation relies on title transfers to strip the credits from properties.

State Sen. Richard F. Colburn, an Eastern Shore Republican, tried last year to require deed recordation within 60 days after a foreclosure is ratified by the court, but the bill died in committee.

Now legislation before the Senate judicial proceedings committee would give the assessments agency another way to figure out which homes aren't homestead-eligible because they've been foreclosed on.

Robert E. Young, director of the assessments agency, said the department-requested SB 123 would require that foreclosing firms forward a copy of the court ratification order within 30 days so his staff can change their records -- and any tax breaks.

"If a bank forecloses on something ... and they don't transfer it until somebody ... buys it two years later, that bank has been improperly receiving a homestead credit that the former owner who was foreclosed was entitled to receive," Young said. The proposed requirement would supply "a trigger to catch those kinds of accounts."

He thinks it's a simple rule. "We're not saying you've got to file a special form or anything, just give us a copy."

If mortgage servicers handling foreclosures don't do so, they'd be on the hook to pay back any homestead credits plus interest and penalties once transfer finally occurs and the jig is up.

Young doesn't know how many banks have benefited from homestead credits they shouldn't have received. Because there's better tracking of mortgages before foreclosure than at the point of no return, it's not even clear how many homes in the state have been repossessed in recent years.

"No one really has a good handle on the number," Young said.

On a related note: A state foreclosure task force recommended a foreclosure registry to give local officials, neighbors and homeowners' associations a point of contact for every foreclosed home. More here.

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (3)
Categories: Property taxes, The foreclosure mess
        

February 3, 2012

Where Baltimore-area residents would rather be

Real estate search site Trulia says the Baltimore region is seventh on the list of metro areas with the weakest demand among the online search crowd -- specifically, more renters and homeowners looking to move out than in.

For every search on Trulia by someone outside the region checking out places for sale or rent here, there are two (or more specifically 2.2) searches by people in our area looking somewhere else. The company, which ranked the 100 largest metro areas on search demand, says big regions tend to have more people looking to leave than to arrive.

Maryland overall has seen more going than coming in recent years, starting at the height of the housing boom and continuing in a bigger way afterward, according to the state Department of Planning's analysis of IRS migration data.

That doesn't mean the population dropped, though -- it grew. As a planning agency chart in an earlier analysis shows, births outnumber deaths and international migration is also adding to the mix, even as state-to-state migration subtracts.

Trulia says Baltimore-area residents searching online for apartments and homes outside the region are most frequently checking out these places:

1. The Washington area

2. The Bethesda-Rockville-Frederick mini-metro area (usually lumped in with the D.C. area, but not always)

3. The York-Hanover area in Pennsylvania

4. New York City and environs (an area that reaches New Jersey)

5. The Philadelphia area

But what about the people who live elsewhere and are checking us out? Trulia's list made me go "whaa?" -- here's why:

It's an eerily similar list.

1. The Washington area

2. The Bethesda-Rockville-Frederick area

3. The NYC area

4. The Philadelphia area

5. The Salisbury area

A case of the grass is always greener? 

All that's missing in this list compared with the first one is York -- York County tends to draw Baltimore-area workers looking for cheaper housing, and I don't think York County-to-Baltimore moves are as common. (Certainly Maryland sends more people to Pennsylvania than the other way around.)

People also tend to move in greater numbers from the pricier Washington area to Baltimore than vice versa, though the gap narrowed as the recession set in. I suppose we'll find out down the road whether the Trulia search results suggest a change or if it's just wishful lookylooing.

Oh, and No. 3 on the weakest search-demand list, with 2.5 outbound searches for every inbound one? That's D.C. (No. 1 is Newark, N.J.)

The top 10 at the other end -- places getting more lookers-in than lookers-out -- is filled with Florida communities. Trulia looked at searches in October, November and December, so weather might have helped there.

Where are you looking to move, if you're looking?

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (7)
Categories: Housing stats
        

February 2, 2012

Having trouble finding a Baltimore foreclosure to buy? Here's why

If you're trying to buy a foreclosure in the city and feel like your choices aren't what they were a year ago, it's not your imagination. While there were more short sales on the market last year than in 2010, bank-owned homes for sale (the purple line in the graph below) took a steep drop:

 

Distress%20listings%20balt.png

 

The data comes from Metropolitan Regional Information Systems' stats arm, RealEstate Business Intelligence. Though it probably won't come as a complete shock to anyone following the news about robo-signing, it's a striking chart nonetheless.

Here's the change in actual sales of distress properties:

Distress%20sales%20balt.png

 

As short-sale deals crept upward, foreclosure sales slumped, narrowing the gap. But if you compare the two charts, you'll see that there are still way more city homeowners hoping to sell short than those actually managing to do it. The odds of a bank-owned property listed for sale last year getting to settlement were much higher. (I am hearing some agents say the short-sale process seems to be getting better, but it depends on the bank.)

Are you trying to buy or sell in the "distress" category? What are you seeing out there?

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (2)
Categories: Distress sales, The foreclosure mess
        

February 1, 2012

Deadline to appeal new property assessments: Feb. 10

If your home or other Maryland property was recently reassessed, your deadline to appeal is fast approaching.

Paperwork must be in by Feb. 10 for the one-third of property owners whose reassessment notices were mailed in late December. The state Department of Assessments and Taxation lays out a brief how-to here, noting that you can request your assessment worksheet to check it for accuracy and suggesting you find sales of comparable properties to make your case for a different valuation. (Here's the state's property look-up site, which gives you an option to search for sales.)

If you weren't just reassessed but are buying a home in the first six months of this year, you too can appeal to try to change the bill you'll get in July. That's called an "appeal upon purchase," and you have 60 days to file after settlement.

It's too late to appeal for the upcoming tax year if you aren't in one of those two groups. You can send in a "petition for review" anytime between now and Jan. 1 (or the first business day after Jan. 1, generally), but it won't have a chance of affecting your bill until July 1, 2013.

But some Baltimore homeowners might get a lowered bill this July without appealing -- because someone else did it for them.

Rockville-based Property Tax Pros, which offers an online appeal service for owners of houses, townhouses and rowhouses in large Maryland jurisdictions, filed pro-bono, out-of-the-blue appeals of 100 city homes' property assessments in January.

Larry Giammo, the company's co-founder and a former Rockville mayor, said he and his team picked modest homes -- assessed at about $70,000 to $120,000 -- that they believe are far overvalued now, about a year after they were last assessed. (Each property in the state is reassessed once every three years.)

"Some parts of Baltimore, the prices have just collapsed in the last several years," Giammo said. "We're looking at some properties where we have five, six, seven comps in the $20-$30,000 range and nothing higher. So these folks are potentially paying $1 [thousand], $2,000 or more per year than they should. ... These are the people least able to afford paying too much in property taxes."

So how could his company appeal for people who didn't ask for the help? Turns out the owner and/or someone the owner hired aren't the only ones who can argue the assessment is off.

"It's called a third-party appeal," Giammo said. "Hardly anybody knows this, but in Maryland, anybody can appeal anybody else's property [assessment]. ... We haven't gotten hearing dates or anything yet, but when we do, we’ll go in and give it our best shot."

The one limitation on third-party appeals: Local governments can't ask for a review of homes last reassessed a year or two ago. They can only appeal newly reassessed properties, said Henry J. Sikorski, state supervisor of assessments.

Back story: Montgomery County officials used to aggressively appeal in the off-years when properties changed hands for a lot more than their assessments, angering the new owners and not winning any fans in the assessments agency, either. A 2002 Sun story quoted the then-head of the state assessments agency as calling the practice "the Welcome Wagon from hell."

The General Assembly unanimously voted to ban it during that legislative session. "The actions of local governments to appeal real property assessments by use of the petition for review process are contrary to the triennial assessment system and uniformity of taxation," legislators wrote in the Senate bill.

But nothing prevents an individual from appealing someone else's assessment out of cycle, as Giammo did. Of course, he's trying to get them lowered, not raised.

The ZIP code where many of those appealed homes are located: 21224, which includes a wide swath of southeastern Baltimore. Property Tax Pros appealed the assessments of 43 homes there. Here's the breakdown of the rest: 21213 (17 homes), 21216 (15 homes), 21215 (11 homes), 21207 (eight homes), 21218 (four homes) and 21217 (two homes).

Giammo said he's hoping the homeowners "will have a pleasant surprise later in the year, and less of a property tax bill that they have to pay."

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (6)
Categories: Property taxes
        
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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
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