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Foreclosure predictions and dwindling sales

Posted by Stacey Myers August 26, 2008 10:36 AM

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Existing-home sales in the Northeast were down nearly 12 percent last month when compared with July 2007, according to the latest figures from the National Association of Realtors. At the same time, the median sale price, or midpoint price, was $278,700, which is about 5 percent lower than the year-ago period.

The regional numbers were slightly better than the national numbers, which showed existing-home sales fell just over 13 percent from July 2007. The national median sale price fell about 7 percent, to $212,400, from a year ago.

In releasing the latest figures, NAR officials said they hope the recent federal housing bailout bill will provide the “tools” needed to help some buyers get into the market.

“We hope the new tools in the hands of home buyers from the recently enacted housing stimulus package will spark a sustained sales uptrend in the months ahead,” stated NAR president Richard F. Gaylord, a California broker. “Buyers who’ve been on the sidelines should take a closer look at what’s available to them now in terms of financing and incentives. Given some of the inventory on the market, we also strongly encourage buyers to get a professional home inspection.”

Foreclosure foresight
And did you see the story in yesterday’s Los Angeles Times reporting that FBI officials predicted a rise in mortgage fraud –- in September 2004?

The paper reported:

“It has the potential to be an epidemic,” Chris Swecker, the FBI official in charge of criminal investigations, told reporters in September 2004. But, he added reassuringly, the FBI was on the case. “We think we can prevent a problem that could have as much impact as the S&L crisis,” he said.

Well, apparently FBI investigators didn’t get additional help they requested because many of the agency’s resources were focused on fighting the war on terror. So, only about 100 agents delved into mortgage fraud. The Times reported that the agency had about 1,000 agents working on the S&L failure in the 1980s.

It was a little disconcerting to read that news the same day the Mortgage Asset Research Institute –- which sells services aimed at preventing mortgage fraud to mortgage lenders –- said that incidents of mortgage fraud reported by its subscribers were up 42 percent in the first quarter.

Florida was the state with the highest number of fraud cases and “general application misrepresentation” seemed to be the most popular type of fraud, according to MARI.

However, the report didn’t indicate whether borrowers or loan officers perpetrated the frauds.

There’s lots to think about today, like whether the “housing stimulus package,” as the NAR dubs it, will really jump-start sales, or whether the FBI could have prevented the total meltdown of the mortgage market if it had just had a few more resources? What do you think?


This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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