Top real estate market news of 2011
COMMENTARY The holidays are over, the decorations have been taken down and New Year's Eve has come and gone. We're onto a new chapter of the real estate story, and everyone is hoping it's better than the last one. There were some positive signs last year, but overall the market remained oversaturated and underperforming.
Before we get too far into 2012, let's take a look back at some of the top real estate market news of 2011:
January 2011. The biggest news at the beginning of 2011 was what happened in 2010: It was a record year for foreclosures. RealtyTrac's 2010 Year-End U.S. Foreclosure Report showed roughly 1 million homes - that's one in every 45 - were foreclosed on in 2010.
March 2011. CoreLogic released data indicating U.S. homeowners had a massive $750 billion in negative equity. The top five states for underwater mortgages included Nevada, Arizona, Michigan, California and Florida. These states still continue to struggle, with high foreclosure rates resulting in lower home sale prices across the board.
April 2011. The Office of the Comptroller of the Currency (OCC) announced it would proceed with mandatory enforcement actions against eight mortgage servicers including Citibank, HSBC, JP Morgan Chase, MetLife Bank, PNC, U.S. Bank, Wells Fargo and Bank of America.
The measures required banks to engage an independent auditing firm to review foreclosure actions, and to prove to these auditors they complied with federal and state laws during proceedings. Some of these banks - such as Bank of America - are still fighting legal battles in court over foreclosure proceedings.
June 2011. Bank of America's mortgage legal issues intensified when New York Attorney General Eric Schneiderman launched a formal probe into the bank's mortgage securitization practices. The probe was part of a larger investigation to determine whether mortgage companies followed New York state law when creating and selling mortgage backed securities, but it had major fallout for Bank of America in particular.
July 2011. The fun continued for Bank of America when the Federal Trade Commission (FTC) announced it would return nearly $108 million to more than 450,000 homeowners who were overcharged by Countrywide Financial, a unit of Bank of America. Though the settlement was part of an investigation that began before Bank of America acquired Countrywide, it raised more red flags for consumers.
October 2011. Mortgage interest rates fell to new lows through the fall of 2011, but reached a record low in October with rates under 4 percent for the first time in history. Even with those rates, would-be homebuyers found it difficult to jump into the mortgage market due to the tight credit market. Federal Reserve Chairman Ben Bernanke was less than enthused about the low rates, saying the recovery was close to "faltering."
November 2011. Remember those enforcement actions the OCC called for back in April, which included foreclosure reviews? The Independent Foreclosure Review finally started in November, giving homeowners the opportunity to request a review of how the lender conducted the foreclosure of their primary residence. Homeowners interested in a review can still apply until April 2012, but be prepared to wait a few months for the results of the review.
December 2011. Bank of America came under more fire towards the close of 2011, once again due to problems with Countrywide Financial.
In late December, federal officials announced a $335 million settlement stemming from an investigation into Countrywide's lending procedures. The lawsuit alleged Countrywide discriminated against African American and Hispanic borrowers, charging them more than similarly qualified white buyers and steering them towards subprime loans based solely on their race or national origin.
With the low housing prices, long market times and legal issues which plagued the housing market last year, it's probably a good thing we can put the 2011 real estate market behind us. Here's hoping 2012 brings a robust housing market and new opportunities for economic growth.
