Homeowners seek class-action status in suits against banks
CHARLOTTE, N.C. – Feb. 26, 2010 – More frustrated homeowners turned to federal court this week for help with their mortgages, saying Bank of America and Wells Fargo failed to provide promised payment modifications.
The two cases, filed Tuesday in Massachusetts, seek class-action status.
Three specific families are identified, one with a loan serviced by Bank of America and two by Wells Fargo – the nation’s two largest mortgage servicers. They were granted trial modifications, according to court documents, but haven’t received long-term modifications despite having submitted all required documents and made timely payments for more than three months.
The claims are simple, the two filings say: “When a large financial institution promises to modify an eligible loan to prevent foreclosure, homeowners who live up to their end of the bargain expect that promise to be kept.”
The Home Affordable Modification Program (HAMP) is the main federal plan for reducing mortgage payments, part of a $75 billion plan to stem the national foreclosure crisis. The program calls for a three-month trial period, intended to give time for the homeowner to demonstrate an ability to keep up with the lower payments. However, there are growing reports of homeowners in trial plans ultimately being rejected for modifications despite making their trial payments or even being foreclosed on during the process.
The modification process has generated so many complaints that regulators and lawmakers are pressuring lenders to improve.
The Massachusetts cases, which are not open to borrowers in other states, say homeowners are “living in limbo” and spending scarce resources on payments that might ultimately not save their homes.
“Some are in fact continuing to receive foreclosure notices,” said Stuart Rossman, a lawyer with the National Consumer Law Center in Boston, which brought the lawsuit, along with a law firm and another advocacy group.
Bank of America said it couldn’t comment on the lawsuit because it hadn’t yet been served. The Charlotte bank has said its “extraordinary measures” include sending workers to borrowers’ homes to help them fulfill requirements for long-term modifications.
A Wells Fargo spokeswoman said the company “will respond to the lawsuit once we have a chance to review it.”
The San Francisco bank, which bought Wachovia late in 2008, has been “diligently working to convert – from trial to completed modifications – customers who meet the HAMP guidelines,” Debora Blume said in an e-mail. “Unfortunately, not all customers who enter a HAMP trial do ultimately qualify for the program. In these instances, we work to determine if another foreclosure prevention option is available to them.”
Earlier this month, 10 Ohio homeowners filed a civil case in federal court against Bank of America, also saying the bank broke promises to modify their payments.
The circumstances differ, in that the Ohio homeowners say they were promised modifications during a federally sponsored event last year. As of the filing date, they hadn’t received documents or had their payments reduced, meaning they are not as far along in the process as the Massachusetts families.
© 2010 The Charlotte Observer
Friday, February 26, 2010
Thursday, February 25, 2010
Fraud didn’t cause housing meltdown
WASHINGTON – Feb. 25, 2010 – The financial crisis was the result of homebuyers’ rational reactions to misaligned incentives – not fraud, argues Todd Zywicki, a George Mason University law professor and a Mercatus Center senior scholar.
Zywicki, who has studied the financial meltdown, argues that taking out a risky bank loan looks like a foolish choice today, but at the height of the housing boom was actually a smart decision for many people.
He says the crisis began when the Federal Reserve pushed interest rates to extreme lows from 2001 to 2004, making adjustable rate loans very attractive. It wasn’t until the Fed pushed rates back up that people walked away from their loans.
In the next phase of the crisis, Zywicki says, the availability of foreclosed properties pushed down home prices, which led to more homeowners walking away from their properties. Now in the current phase of the decline, unemployment has led to even more foreclosures.
Zywicki writes: “The problem isn’t consumer gullibility or ignorance. Borrowers have shown they understand, and act on, the incentives they face all too well.”
Source: The Wall Street Journal
WASHINGTON – Feb. 25, 2010 – The financial crisis was the result of homebuyers’ rational reactions to misaligned incentives – not fraud, argues Todd Zywicki, a George Mason University law professor and a Mercatus Center senior scholar.
Zywicki, who has studied the financial meltdown, argues that taking out a risky bank loan looks like a foolish choice today, but at the height of the housing boom was actually a smart decision for many people.
He says the crisis began when the Federal Reserve pushed interest rates to extreme lows from 2001 to 2004, making adjustable rate loans very attractive. It wasn’t until the Fed pushed rates back up that people walked away from their loans.
In the next phase of the crisis, Zywicki says, the availability of foreclosed properties pushed down home prices, which led to more homeowners walking away from their properties. Now in the current phase of the decline, unemployment has led to even more foreclosures.
Zywicki writes: “The problem isn’t consumer gullibility or ignorance. Borrowers have shown they understand, and act on, the incentives they face all too well.”
Source: The Wall Street Journal
Wednesday, February 24, 2010
What you should know about home foreclosure
WEST PALM BEACH, Fla. – Feb. 24, 2010 – After more than six months of wrangling with her bank to get a reduced mortgage payment through a federal loan modification program, Debra Jacobs has had enough.
The West Palm Beach resident is walking away from her home of 14 years.
“I’m just going to wait here until they put a padlock on the door,” said Jacobs, 58. “I’m so over it, I have to let it go. It’s too painful.”
As homeowners grow increasingly frustrated by the nation’s struggling foreclosure prevention programs, more may consider walking away as a viable alternative.
But there’s more to it than just stopping your mortgage payments and handing over the keys.
Boca Raton real estate attorney Marlyn Wiener says there’s no “right way” to walk away from a home.
Knowing the consequences, however, will at least help the borrower make an informed decision, she said.
“There is an analysis that each homeowner should do to find the best way for them to proceed,” Wiener said. “There isn’t a speed lane.”
The biggest gamble in walking away is whether a lender will try to seize a borrower’s assets to pay for its losses, Wiener said. Lenders have up to 20 years in Florida to collect a deficiency judgment.
But banks are more likely to go after borrowers who strategically default – a term meaning the homeowner can afford the mortgage but decides to stop paying because the home is no longer a good investment.
Moral dilemmas aside, Wiener said it can make financial sense in some situations to “pull the plug and regroup” if the mortgage is underwater.
Scott Haft, who oversees the mortgage modification and foreclosure defense division at the law firm LaBovick & LaBovick, said some lenders are willing to forgive a mortgage debt if a borrower voluntarily turns over the home without going through a lengthy court foreclosure.
“We say, ‘We’ll give you the keys on Monday, but you have to waive your right to pursue my client in the future for deficiencies,’ “ said Haft, whose company has offices in West Palm Beach, Boynton Beach and Palm Beach Gardens. “Many times, the lender is only interested in regaining the property.”
Another concern is whether the homeowner will have to claim forgiveness of debt on tax returns for the amount of money owed the lender.
The Mortgage Debt Relief Act of 2007 temporarily exempts people who lose their primary residence from having to claim the canceled debt, but the act is scheduled to sunset Dec. 31, 2012, and can’t be applied to investment properties.
“Everybody’s relationship with their properties and their loans is different,” Wiener said. “People need to take a look at where they are in life before they decide to walk away.”
One thing Wiener asks clients is whether they will need good credit in the near future to secure a car or student loan. A foreclosure can knock up to 300 points off a credit score – damage that can take years to repair and will stay on your report for seven years.
Lenders have recently stepped up efforts to ease the foreclosure process and avoid the complications when a homeowner walks away.
Citigroup launched a program this month that allows some borrowers to stay in their homes for six months without paying. In return, the homeowner turns in the keys at the end of the time period and keeps the home in good shape.
The federal Home Affordable Foreclosure Alternatives Program, announced in November, gives lenders incentives for offering deed-in-lieu of foreclosure and for approving short sales.
But for Jacobs, the alternatives are “too little too late.”
“Not only do I not know the options, I don’t care anymore,” she said. “It’s really sad it’s come to this.”
Copyright © 2010 The Palm Beach Post
WEST PALM BEACH, Fla. – Feb. 24, 2010 – After more than six months of wrangling with her bank to get a reduced mortgage payment through a federal loan modification program, Debra Jacobs has had enough.
The West Palm Beach resident is walking away from her home of 14 years.
“I’m just going to wait here until they put a padlock on the door,” said Jacobs, 58. “I’m so over it, I have to let it go. It’s too painful.”
As homeowners grow increasingly frustrated by the nation’s struggling foreclosure prevention programs, more may consider walking away as a viable alternative.
But there’s more to it than just stopping your mortgage payments and handing over the keys.
Boca Raton real estate attorney Marlyn Wiener says there’s no “right way” to walk away from a home.
Knowing the consequences, however, will at least help the borrower make an informed decision, she said.
“There is an analysis that each homeowner should do to find the best way for them to proceed,” Wiener said. “There isn’t a speed lane.”
The biggest gamble in walking away is whether a lender will try to seize a borrower’s assets to pay for its losses, Wiener said. Lenders have up to 20 years in Florida to collect a deficiency judgment.
But banks are more likely to go after borrowers who strategically default – a term meaning the homeowner can afford the mortgage but decides to stop paying because the home is no longer a good investment.
Moral dilemmas aside, Wiener said it can make financial sense in some situations to “pull the plug and regroup” if the mortgage is underwater.
Scott Haft, who oversees the mortgage modification and foreclosure defense division at the law firm LaBovick & LaBovick, said some lenders are willing to forgive a mortgage debt if a borrower voluntarily turns over the home without going through a lengthy court foreclosure.
“We say, ‘We’ll give you the keys on Monday, but you have to waive your right to pursue my client in the future for deficiencies,’ “ said Haft, whose company has offices in West Palm Beach, Boynton Beach and Palm Beach Gardens. “Many times, the lender is only interested in regaining the property.”
Another concern is whether the homeowner will have to claim forgiveness of debt on tax returns for the amount of money owed the lender.
The Mortgage Debt Relief Act of 2007 temporarily exempts people who lose their primary residence from having to claim the canceled debt, but the act is scheduled to sunset Dec. 31, 2012, and can’t be applied to investment properties.
“Everybody’s relationship with their properties and their loans is different,” Wiener said. “People need to take a look at where they are in life before they decide to walk away.”
One thing Wiener asks clients is whether they will need good credit in the near future to secure a car or student loan. A foreclosure can knock up to 300 points off a credit score – damage that can take years to repair and will stay on your report for seven years.
Lenders have recently stepped up efforts to ease the foreclosure process and avoid the complications when a homeowner walks away.
Citigroup launched a program this month that allows some borrowers to stay in their homes for six months without paying. In return, the homeowner turns in the keys at the end of the time period and keeps the home in good shape.
The federal Home Affordable Foreclosure Alternatives Program, announced in November, gives lenders incentives for offering deed-in-lieu of foreclosure and for approving short sales.
But for Jacobs, the alternatives are “too little too late.”
“Not only do I not know the options, I don’t care anymore,” she said. “It’s really sad it’s come to this.”
Copyright © 2010 The Palm Beach Post
Tuesday, February 23, 2010
Read the fine print in a short sale
TAMPA, Fla. – Feb. 23, 2010 – With so many distressed homeowners owing more than their homes are worth, short sales have become lifelines.
These types of sales make up more than half of the homes on the market in the Tampa Bay area. Generally, this means the mortgage lender has agreed to allow the home to sell for market value. The lender writes off the rest of the debt, and the homeowner walks away.
But is it really this simple?
Lenders are increasingly adding language to the approval package, reserving the right to pursue the deficiency later – that is, the difference between what you owed on the house and what it sold for.
Some homeowners, so anxious to get out of a pending foreclosure, skip right over that part of the letter. Some understand but opt to take their chances, betting they won’t hear from the lender again.
For some lucky buyers, this has been the case – so far. They’ve sold their home as a short sale, moved on, and haven’t had any problems. But other lenders require the seller to agree upfront to pay back a set amount.
‘It seems fair’
Realtor Paul De La Torre, of Keller Williams, said lenders almost always ask his clients to agree to pay at least some of the debt back. Lenders’ requests, he said, range from 15 percent of the balance to agreeing to a payment plan – such as $80 a month for 15 years.
“It’s seems fair,” De La Torre said. “Some of these people are walking away from a huge amount. More folks need to consider it could be much worse if the lender comes back for the full deficiency later.”
Lenders don’t always go after short sale homeowners. But in Florida, lenders can wait up to five years to file for a court judgment to make the borrower pay. After the judgment is granted, the lender has 20 years to collect the cash.
This is particularly frightening because lenders could wait until the debtor is back on their feet to act. The homeowner could recover financially only to discover years later that they owe the bank tens of thousands of dollars.
Insurance companies
De La Torre said homeowners are even more likely to be required to pay a deficiency if they have mortgage insurance. (Borrowers who have less than 20 percent equity in their homes typically are required by their lenders to cover this insurance in case they default.)
Mortgage insurance companies “are getting pretty strict about short sales,” he said. “They have to sign off on the short sale, too, and many are not only asking for promissory notes but are ordering their own appraisals.”
Deficiency judgments aren’t only a problem in short sale cases. They can happen following a foreclosure, too.
A lender can take back the home, sell it and then come back after the borrower for the difference between that amount and the balance on the old mortgage. This is allowed in Florida and most other states.
So what can a homeowner do?
Not much, in the case of a foreclosure. But when negotiating a short sale, the homeowner must sign off on the paperwork, too, said Jim Davis, a real estate agent with Century 21 A&M Realty.
Borrowers can ask to be released from the debt, and sometimes that works. In the past three to six months, though, Davis said he’s seen many lenders require some form of payment.
That’s where negotiation can kick in.
Some lenders detail how much money they might come after later. Others don’t specify, and that may mean the full amount. Davis recommends anyone signing a short sale agreement insist the lenders be specific about deficiency plans. Read the fine print, he said, and ask lots of questions.
If they don’t, it may haunt them later.
Copyright © 2010 Tampa Tribune, Fla
TAMPA, Fla. – Feb. 23, 2010 – With so many distressed homeowners owing more than their homes are worth, short sales have become lifelines.
These types of sales make up more than half of the homes on the market in the Tampa Bay area. Generally, this means the mortgage lender has agreed to allow the home to sell for market value. The lender writes off the rest of the debt, and the homeowner walks away.
But is it really this simple?
Lenders are increasingly adding language to the approval package, reserving the right to pursue the deficiency later – that is, the difference between what you owed on the house and what it sold for.
Some homeowners, so anxious to get out of a pending foreclosure, skip right over that part of the letter. Some understand but opt to take their chances, betting they won’t hear from the lender again.
For some lucky buyers, this has been the case – so far. They’ve sold their home as a short sale, moved on, and haven’t had any problems. But other lenders require the seller to agree upfront to pay back a set amount.
‘It seems fair’
Realtor Paul De La Torre, of Keller Williams, said lenders almost always ask his clients to agree to pay at least some of the debt back. Lenders’ requests, he said, range from 15 percent of the balance to agreeing to a payment plan – such as $80 a month for 15 years.
“It’s seems fair,” De La Torre said. “Some of these people are walking away from a huge amount. More folks need to consider it could be much worse if the lender comes back for the full deficiency later.”
Lenders don’t always go after short sale homeowners. But in Florida, lenders can wait up to five years to file for a court judgment to make the borrower pay. After the judgment is granted, the lender has 20 years to collect the cash.
This is particularly frightening because lenders could wait until the debtor is back on their feet to act. The homeowner could recover financially only to discover years later that they owe the bank tens of thousands of dollars.
Insurance companies
De La Torre said homeowners are even more likely to be required to pay a deficiency if they have mortgage insurance. (Borrowers who have less than 20 percent equity in their homes typically are required by their lenders to cover this insurance in case they default.)
Mortgage insurance companies “are getting pretty strict about short sales,” he said. “They have to sign off on the short sale, too, and many are not only asking for promissory notes but are ordering their own appraisals.”
Deficiency judgments aren’t only a problem in short sale cases. They can happen following a foreclosure, too.
A lender can take back the home, sell it and then come back after the borrower for the difference between that amount and the balance on the old mortgage. This is allowed in Florida and most other states.
So what can a homeowner do?
Not much, in the case of a foreclosure. But when negotiating a short sale, the homeowner must sign off on the paperwork, too, said Jim Davis, a real estate agent with Century 21 A&M Realty.
Borrowers can ask to be released from the debt, and sometimes that works. In the past three to six months, though, Davis said he’s seen many lenders require some form of payment.
That’s where negotiation can kick in.
Some lenders detail how much money they might come after later. Others don’t specify, and that may mean the full amount. Davis recommends anyone signing a short sale agreement insist the lenders be specific about deficiency plans. Read the fine print, he said, and ask lots of questions.
If they don’t, it may haunt them later.
Copyright © 2010 Tampa Tribune, Fla
Monday, February 22, 2010
President announces $1.5 billion plan to help struggling homeowners
LAS VEGAS – Feb. 22, 2010 – A plan to channel $1.5 billion to housing agencies in five states hit hardest by the real estate crash has Florida officials hopeful they can keep more people in their homes and out of foreclosure.
President Obama announced the program Friday while in Nevada for a town hall meeting and campaign push for Senate Majority Leader Harry Reid. The states included in the new program are Nevada, California, Arizona, Florida and Michigan, all of which consistently rank high on any measure of mortgage woe.
But with more than 20 percent of its home loans seriously delinquent or in foreclosure, Florida tops the nation for defaults, according to a Mortgage Bankers Association report also released Friday.
Obama administration officials called the $1.5 billion “modest” considering the depth of the nation’s housing crisis but said they hope it will lead states to come up with innovative solutions tailored to their own needs.
Those solutions are expected to plug holes in the administration’s earlier Making Home Affordable Program, which has struggled to help unemployed homeowners who don’t have the income to qualify for a loan modification.
It also attempts to tackle one of the thorniest issues to come out of the market meltdown – how to cope with upside-down loans where the homeowner owes more than what the property is worth.
About 41 percent of South Florida borrowers, and 55 percent of Treasure Coast borrowers were underwater in December, according to analysts at Zillow.com.
The $1.5 billion in taxpayer money, which is coming from the federal Troubled Asset Relief Program, can be used to help negotiate with lenders to write down mortgages on underwater loans.
“This really could be extraordinary relief that will be very welcome in Florida,” said Jaimie Ross, president of the Florida Housing Coalition. “It’s pretty clear this is a program designed to keep homeowners from losing their homes.”
The money will be doled out to states based on a formula that considers home price declines and unemployment. Officials couldn’t say Friday how many people it might help.
There was some optimism Friday that the national housing market has begun to make a turn for the better.
The Mortgage Bankers Association survey showed that despite continued record foreclosures, there was a small decrease in the number of loans 30-days late in the last quarter of 2009.
That means fewer homes entered the foreclosure pipeline.
“We are likely seeing the beginning of the end of the unprecedented wave of mortgage delinquencies and foreclosures,” said Jay Brinkman, chief economist for the association.
Brinkman said he usually sees an increase in 30-day delinquencies in the last quarter of the year because of holiday spending and home heating costs.
Instead, national 30-day delinquencies fell from 3.79 percent to 3.63 percent. In Florida, the 30-day delinquencies fell from 4 percent to 3.67 percent.
The drop off may also be attributed, in part, to foreclosure rescue plans such as the Making Home Affordable Program.
The program offers incentives to banks to reduce mortgage payments by cutting interest rates or principal amounts, but has been panned by critics for not reaching enough people.
A year into the program, 116,297 permanent loan modifications, including 14,598 in Florida, have been completed. But that’s only a fraction of the estimated 3.4 million loans nationwide that are 60 or more days delinquent.
Boynton Beach resident Lenore Cohen, 81, said she’s been overwhelmed by the loan modification process, which she said has included harassing letters from her bank and notices of non-payment, even when she paid.
“They said it could take eight months,” Cohen said. “I have two huge folders filled with paperwork. It’s been very disturbing.”
Copyright © 2010 The Palm Beach Post
LAS VEGAS – Feb. 22, 2010 – A plan to channel $1.5 billion to housing agencies in five states hit hardest by the real estate crash has Florida officials hopeful they can keep more people in their homes and out of foreclosure.
President Obama announced the program Friday while in Nevada for a town hall meeting and campaign push for Senate Majority Leader Harry Reid. The states included in the new program are Nevada, California, Arizona, Florida and Michigan, all of which consistently rank high on any measure of mortgage woe.
But with more than 20 percent of its home loans seriously delinquent or in foreclosure, Florida tops the nation for defaults, according to a Mortgage Bankers Association report also released Friday.
Obama administration officials called the $1.5 billion “modest” considering the depth of the nation’s housing crisis but said they hope it will lead states to come up with innovative solutions tailored to their own needs.
Those solutions are expected to plug holes in the administration’s earlier Making Home Affordable Program, which has struggled to help unemployed homeowners who don’t have the income to qualify for a loan modification.
It also attempts to tackle one of the thorniest issues to come out of the market meltdown – how to cope with upside-down loans where the homeowner owes more than what the property is worth.
About 41 percent of South Florida borrowers, and 55 percent of Treasure Coast borrowers were underwater in December, according to analysts at Zillow.com.
The $1.5 billion in taxpayer money, which is coming from the federal Troubled Asset Relief Program, can be used to help negotiate with lenders to write down mortgages on underwater loans.
“This really could be extraordinary relief that will be very welcome in Florida,” said Jaimie Ross, president of the Florida Housing Coalition. “It’s pretty clear this is a program designed to keep homeowners from losing their homes.”
The money will be doled out to states based on a formula that considers home price declines and unemployment. Officials couldn’t say Friday how many people it might help.
There was some optimism Friday that the national housing market has begun to make a turn for the better.
The Mortgage Bankers Association survey showed that despite continued record foreclosures, there was a small decrease in the number of loans 30-days late in the last quarter of 2009.
That means fewer homes entered the foreclosure pipeline.
“We are likely seeing the beginning of the end of the unprecedented wave of mortgage delinquencies and foreclosures,” said Jay Brinkman, chief economist for the association.
Brinkman said he usually sees an increase in 30-day delinquencies in the last quarter of the year because of holiday spending and home heating costs.
Instead, national 30-day delinquencies fell from 3.79 percent to 3.63 percent. In Florida, the 30-day delinquencies fell from 4 percent to 3.67 percent.
The drop off may also be attributed, in part, to foreclosure rescue plans such as the Making Home Affordable Program.
The program offers incentives to banks to reduce mortgage payments by cutting interest rates or principal amounts, but has been panned by critics for not reaching enough people.
A year into the program, 116,297 permanent loan modifications, including 14,598 in Florida, have been completed. But that’s only a fraction of the estimated 3.4 million loans nationwide that are 60 or more days delinquent.
Boynton Beach resident Lenore Cohen, 81, said she’s been overwhelmed by the loan modification process, which she said has included harassing letters from her bank and notices of non-payment, even when she paid.
“They said it could take eight months,” Cohen said. “I have two huge folders filled with paperwork. It’s been very disturbing.”
Copyright © 2010 The Palm Beach Post
Thursday, February 18, 2010
Homes worth more than owners think
SEATTLE – Feb. 18, 2010 – American homeowners’ confidence in their own homes’ value during the fourth quarter fell to its lowest level in seven quarters, with just one in five (20 percent) believing their own homes’ values increased during 2009, according to the Zillow Q4 Homeowner Confidence Survey.
However, the survey finds that 28 percent of homes increased in value during 2009. The disconnect between rising values and lower homeowner expectations led a Home Value Misperception Index of negative two (-2).
A Misperception Index of zero would mean homeowners’ perceptions were in line with their homes’ actual values. A positive index means homes are worth less than owners think; a negative index indicates that homeowners are overly cynical about their own homes’ value.
One year ago, nearly half (47 percent) of homeowners believed values in their local market would decrease in the next six months. However, when asked about their own home, fewer than one in three (30 percent) believed that their own home’s value would decrease.
Today 22 percent of homeowners believe their local market will lose value over the next six months and 14 percent believing their own home will lose value.
“Homeowners are finally succumbing to the notion that, in most areas, declining home values over the past year are no longer the exception, they are the rule,” said Dr. Stan Humphries, Zillow chief economist. “Almost three times as many people believe their home’s value will increase over the next six months as believe it will decrease in value, a level of optimism that is likely to outpace actual performance in the near-term. Given recent news about the stabilization of home values in some markets, I can see why homeowners are so optimistic. However, home values in many markets are still under substantial downward pressure from high levels of foreclosures, and we don’t believe we’ll see a definitive bottom nationally until the second quarter of this year.”
Top read the complete survey, visit Zillow’s website.
© 2010 Florida Realtors®
SEATTLE – Feb. 18, 2010 – American homeowners’ confidence in their own homes’ value during the fourth quarter fell to its lowest level in seven quarters, with just one in five (20 percent) believing their own homes’ values increased during 2009, according to the Zillow Q4 Homeowner Confidence Survey.
However, the survey finds that 28 percent of homes increased in value during 2009. The disconnect between rising values and lower homeowner expectations led a Home Value Misperception Index of negative two (-2).
A Misperception Index of zero would mean homeowners’ perceptions were in line with their homes’ actual values. A positive index means homes are worth less than owners think; a negative index indicates that homeowners are overly cynical about their own homes’ value.
One year ago, nearly half (47 percent) of homeowners believed values in their local market would decrease in the next six months. However, when asked about their own home, fewer than one in three (30 percent) believed that their own home’s value would decrease.
Today 22 percent of homeowners believe their local market will lose value over the next six months and 14 percent believing their own home will lose value.
“Homeowners are finally succumbing to the notion that, in most areas, declining home values over the past year are no longer the exception, they are the rule,” said Dr. Stan Humphries, Zillow chief economist. “Almost three times as many people believe their home’s value will increase over the next six months as believe it will decrease in value, a level of optimism that is likely to outpace actual performance in the near-term. Given recent news about the stabilization of home values in some markets, I can see why homeowners are so optimistic. However, home values in many markets are still under substantial downward pressure from high levels of foreclosures, and we don’t believe we’ll see a definitive bottom nationally until the second quarter of this year.”
Top read the complete survey, visit Zillow’s website.
© 2010 Florida Realtors®
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