REO News Article 2011-2012 snapshot in REO by Sandra Healy

1. Park Avenue Title Agency Newsletter
Helping Clients Stay Informed
November 2011
Greetings! Home Purchase Activity Holds at
Since the REO market has been Last Year’s Level
a hot topic these days, I thought
After rising during the early summer a recent pace over the past 2 quarters that
it would be timely to get an
months, the pace of home sales in New was 42% slower than earlier in the year. The
update from the front lines on Jersey has receded back to last year’s present US unemployment rate stands at
the state of the market. This pace. The slowdown, although modest, 9.1%, unchanged over the last 3 months and
is attributable to the combined effects of higher than the 8.8% rate in March 2011. It
month our feature article is by
slower job creation and mounting consumer is estimated that the US economy needs to
Sandi Healy, Broker of Record, at pessimism about the economic recovery. create a minimum of 200,000 jobs monthly
Healy Realtors who specializes in Still, home sales have not fallen below last to reduce the unemployment rate in order
year’s pace suggesting the housing market is to account for the expansion of the labor
REO’s. I’ve asked her to share her
attempting to stabilize. force as young workers enter the job market
insights and knowledge as to seeking employment.
Another trend supporting this theory
what she’s seeing in the market is that the number of unsold homes being In New Jersey, Non-Farm job growth
right now and her outlook for offered for sale in New Jersey fell for the 4th has turned negative for the last 2 months
the future. Jeff Otteau, in his consecutive month in September, recording continuing a trend whereby the state has
an 8% decline which equates to 6,000 homes. been consistently lagging the national pace
article this month, focuses on The reasons for falling inventory include of recovery. Based upon the average pace of
how the weak employment increased sales pace during the early summer Non-Farm job creation since March 2010, the
picture continues to be a drag months coupled with the lingering effects of US economy is on pace to recover the jobs
the foreclosure moratoriums. A closer look at lost during the recession by 2016, or 5 years
on the market and it’s recovery. the inventory decline indicates it is primarily from now. The slower pace of job recovery
I’ve also included a spotlight concentrated in more expensive homes priced in New Jersey however puts the state on pace
on our contest winner, Michael over $400,000. for full job recovery in 2032, more than 2
While inventory is expected to rise decades into the future. Focusing on Private
Kurak, Esq. along with another Sector job growth, the state is presently
significantly once the pace of foreclosure
“Prize & Plug Contest” on the filings resumes, that increase is likely to be on course for full recovery in 2019. Given
back page. Wishing all of you a concentrated in more rural and urban areas that these are all straight-line projections
which could spare most suburban markets they could change significantly if monthy
Happy & Healthy Thanksgiving! job creation improves or worsens. They are
from the market deterioration they will bring.
Also, recent news that US GDP increased by however based upon the long-term average
2.5% in the 3rd quarter may set the stage for of jobs created over the past 19 months
To your success,
indicating that it would take a sharp change
Jennifer a more positive mood which could lift home
sales in 2012. in direction to improve the recovery forecast.
Reprinted with permission
Job Recovery Slows Dramatically MarketNEWS by OTTEAU.com
www.otteau.com
While the US economy has continued
to recover jobs that were lost during the
recession, the pace of that recovery has
Jennifer Cassels slowed noticeably over the past 2 quarters.
Non-farm jobs in the US increased in the 3rd Jeffrey Otteau
President
quarter by 287,000 which equates to 95,667 President
monthly, about the same as the 290,000 Otteau Valuation
(96,667 monthly) gain in Q2. Non-farm Group, Inc.
job creation in Q1 however was 497,000
jobs (165,667 monthly). This works out to

2. Park Avenue Title Agency Newsletter
Housing News Briefs Meet the Winner
C
Freddie clamps down on short sale fraud ongratulations to Michael Kurak, Esq.
He’s our winner from last month’s crossword
Freddie Mac will force parties involved in a short sale to sign
puzzle contest. Here’s his opportunity to tell us
affidavits making them liable for their negligent or intentional
about the importance of having a Will and the consequences
misrepresentations in the deal, an effort to be sure it’s an arms-
if you don’t.
length transaction, according to guidance released Friday.
T
The new affidavit will go into effect Jan. 1, but Freddie is
asking servicers to implement the change immediately to fight HE STORY OF ONE
fraud. However this, and other changes, are meant to expedite the LUCKY GUY...
process of getting borrowers in default relocated.
By Jon Prior ...or that is how he perceived his
circumstances when we met to prepare
For full article, please visit his first Will. You see, Joe had not
http://www.housingwire.com/2011/11/18/freddie-clamps- done any estate planning over the past
down-on-short-sale-fraud 20 years, but reasoned that since he
was still alive he did not need a Will.
Economists expect moderate growth in 2012: NABE
The nation’s gross domestic product will grow at a modest However, until we spoke, Joe was not aware of how
2.5% in the final quarter of this year and by 2.4% in 2012, unprotected he had left his family. Under Joe’s situation,
according to economists responding to the latest National his wife would not have received his entire estate. Not at all
Association of Business Economics survey, which managed to find what Joe had intended. In fact, Joe was LUCKY – for living
some bright spots concerning next year’s economic outlook. long enough to finally begin serious estate planning.
“Business spending remains a strong positive and housing starts If Joe dies without a Will, New Jersey rules would
are expected to continue to rise from the bottom seen in 2010,” the determine the beneficiaries of his estate and the result
report said. Corporate profits and stocks are predicted to strengthen. would depend on factors such as, whether his surviving
Economists surveyed expect housing starts to reach 600,000 spouse was from a first or second marriage and whether any
units in 2011, just slightly above the 2010 total. children were surviving. In addition, any assets passing to
Joe’s children would be held and managed by the Surrogate
Housing starts are expected to increase 10% in 2012. The 2012 until the child attained age 18 when all of the assets would
figure was revised downward slightly from the September estimate be distributed to the child, neither of which would be in
of 700,000 units to 660,000 units. the best interest of Joe’s children. Most importantly, the
By Kerry Curry Surrogate would make the final decision in selecting the
guardians to raise Joe’s children.
For full article, please visit
http://www.housingwire.com/2011/11/21/economists-expect- Instead of relying on New Jersey law, Joe’s new Will
moderate-growth-in-2012-with-recession-unlikely-nabe sets forth the beneficiaries that Joe has selected, including
Fannie Mae forecasts slightly higher home sales terms for a trust holding the funds otherwise passing to his
children, and designates the guardian that Joe desires to care
in 2012
for his children. With his Will, Joe was able to control all of
The improving but still vulnerable economy looks more likely these decisions, instead of leaving them in the hands of the
to avoid recession but may only push home sales slightly higher in government. Joe truly is one Lucky Guy.
2012, Fannie Mae economists said Friday.
The group added that by the end of 2011, home sales will have The author, Michael Kurak, has law offices located
shown little improvement from 2010. on Route 22 in Green Brook, New Jersey. His firm
According to the National Association of Realtors, existing concentrates in estate planning, taxation, business planning
home sales December 2010 closed at an annualized rate of 5.28 and estate administration. He has been practicing law for
million units. over 25 years and has a Masters in Taxation from NYU Law
School. Please visit his website at www.mkurak.com or call
By Jon Prior
for an appointment at 732-752-1800. Take action now to
For full article, please visit protect your family; don’t leave it to LUCK!
http://www.housingwire.com/2011/11/18/fannie-mae-forecasts-
slightly-higher-home-sales-in-2012

3. Park Avenue Title Agency Newsletter
REO Market Sector Snapshot
There is no doubt that in the next segments of the housing market to recover, see our roles changing to accommodate this
decade we are going to experience a market along with those other areas bearing a large unique market and help drive our housing
we have not yet seen before; nor can we amount of secondary residences. market back on track.
predict what the White House will propose
in the wake of a housing crisis big enough The majority of distressed homes can Rates should stay low for the next
to create a possible REO (real estate owned) only be purchased with cash or renovation twelve months up until election 2012. After
pipeline of an estimated 10.66 million bank financing. This is a type of mortgage product that I believe we will start to experience
owned homes to the retail market. It is which allows a purchaser to include all inflation. First time homebuyers and
predicted that 1 out of every 5 mortgages repairs costs within their mortgage, thus investors should understand that right now
may default without some form of federal repairing the property after closing. The bulk is a great time to buy. I encourage any
government intervention. To add to the of financing in REO is renovation financing. buyer to take advantage of this market in
already dampened real estate market, as of It is always rewarding to see a purchaser the next 12 months, take advantage of those
October this year, RealtyTrac, Inc. reported able to buy their home at an affordable price renovation loans and discounted properties.
that foreclosures in New Jersey take an point and fix that home to their liking after
average of 974 days, or more than 2 1/2 the fact. In the meantime, these products also
assist in supporting our smaller construction About Healy Realtors
years. That’s the second-longest process
in the nation, just behind New York at 986 companies within the area. Healy Realtors (www.healyrealtors.
days, further elongating the road to recovery com) was founded in 2008 with its main
So the question remains…how are
here in New Jersey. It may take more office located at 1466 Hooper Ave., Ste. 2,
we going to control the shadow inventory?
than 50 years at the current pace to clear Toms River, NJ 08753, and serves all of
pipelines of homes currently in default. The newest proposal by our New Jersey’s 21 counties as a full-service
administration brings one promising real estate company. As a family-owned
The much talked about shadow and operated office with a reputation for
approach: REO to Rental. This proposal
inventory has doubled from 2010 to 2011. integrity, service and follow-through, Healy
includes fixing up and converting
Barclays Capital, the investment banking Realtors is one of New Jersey’s fastest
REO inventory to affordable rentals,
division of Barclays Bank PLC, reported, growing real estate companies. In addition
especially in those areas most glutted with
by end of July, 476,000 bank-owned to traditional, residential marketing and
inventory. The aim will be to improve
properties in inventory. Currently, there sales, Healy Realtors provides management
the government’s recovery of losses, help
are approximately 1.57 million homes that and disposition services to banks and
stabilize neighborhoods and local home
are 90+ days delinquent but still not in investors. Sandra Healy specializes in REO
values, and where appropriate, increase the
foreclosure. A reported 1.91 million homes disposition, preservation, management
supply of affordable rental housing. Should
are currently in foreclosure equaling an & sales. Healy Realtors is known as
this concept be accepted, we can expect to
almost staggering 4 million future bank an outsourcing resource for foreclosed
see more local market and national auction
foreclosed properties. properties.
like sales of non-performing assets. This
There will be an uptick in REO will mean that REOs may be sold in bulk
inventory starting second quarter of to investors with a 5 year or longer rental
2012 and throughout the coming year as period provision, including programs for
distressed sales will make up 50% of all previous homeowners to rent properties or
closings. Already we are seeing some of for renters to become owners through lease-
that inventory slowly coming to market. to-own plans. But there are potential pitfalls
This leaves great opportunity for Buyers to to this proposal as well. Sometimes investor
purchase homes at discounted prices along ownership of single-family homes has been
with record low interest rates. a detriment to communities and broadly
located rental housing has proven difficult
My goal is to list the homes in my to do at such a large scale. Our jobs as REO
Sandi Healy
portfolio at a value which will generate brokers will not only be utilized for retail Benham REO Affiliate
multiple offers. Our office works with marketing but rental property management Broker of Record®
a lot of cash investors, especially in the as well. Cell: (848) 992-2255
single and multi-family market. Adult Main: (732) 557-0971
community, seasonal, condominium and I believe that the real estate agents of Office Fax: (732) 557-0975
small commercial seem to be the slowest the next two decades will need to become shealy@healyrealtors.com
even more adaptable as we should expect to www.healyrealtors.com

4. 326 Route 22 West | Suite 14B
Green Brook, NJ 08812
Inside this issue
• Home Purchase Activity Holds
at Last Year’s Level
• Housing News Briefs
• Meet The Winner
• REO Market Sector Snapshot
dir 732-752-7005 | tel 888-847-0003
www.parkavetitle.com
Win “A Prize & A Plug”
The first person to guess the answers correctly wins “A Prize & A Plug”
Please email J.Cassels@parkavetitle.com or fax to 732-752-7115.
Instructions: Unscramble each jumbled arrangement of letters to form words connected to Thanksgiving Day.
Have Fun!
MIGRILP __ __ __ __ __ __ __
YEKRUT __ __ __ __ __ __
HAvREST __ __ __ __ __ __ __
LOTYMUPH __ __ __ __ __ __ __ __
RYGAv __ __ __ __ __
BEMNOREv __ __ __ __ __ __ __ __
RONC __ __ __ __
PNIMPUK __ __ __ __ __ __ __
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