DS News

60 FEWER DISTRESSED HOMES FOR SALE IN HARDEST HIT AREAS A decline in the glut of distressed homes for sale in the hardest hit areas will mean good news for the housing market, according to the National Association of Realtors (NAR). On a recent blog post, NAR pointed out that the wave of foreclosures has driven down prices in many major U.S. cities, leading investors to snap up homes for sale in cities such as Las Vegas, Miami, Tampa, Detroit, and New York. While investors buying up distressed inventory, often at substantial discounts, tends to pull down prices, it also reduces the amount of distressed inventory for sale— which is good news for long-term home price appreciation. "at's reducing prices in the short run," NAR wrote. "Yet it is also thinning the supply of homes, which must happen to clear the way for higher prices in the long run." NAR noted that half of the homes in Tampa listed for sale are going for less than $100,000. In its existing-home sales report for May 2016, NAR reported that all-cash sales comprised 22 percent of all residential home sales in May, down 2 percentage points both over-the-month and over-the-year, while individual investors (who account for a large portion of the cash sales share) accounted for 13 percent of purchases in May—unchanged over-the-month and down by 1 percentage point over-the-year. Meanwhile, the distressed sales share— percentage of foreclosures, REO properties, and short sales—declined by 4 percentage points over-the-year in May down to 6 percent, and foreclosures sold at an average discount of 12 percent in May—down from 17 percent in April. Short sales were discounted at a higher rate in May than in April (11 percent compared to 10 percent), according to NAR. e decline in distressed inventory for sale has created more demand, which has led to more home price appreciation among non- distressed inventory. "Overall, the homes-for-sale inventory remains relatively lean, while demand to buy homes has increased because of an improving labor market, more optimistic levels of consumer confidence, and continuing low mortgage rates," CoreLogic Chief Economist Frank Nothaft said. "Increased demand in the face of lean for-sale inventory has prompted further value appreciation for non-distressed homes." MERSCORP IS VICTORIOUS IN APPELLATE COURTS MERSCORP was victorious in two recent appellate court decisions: one in the Tenth Circuit Court of Appeals in a Wyoming bankruptcy court that rejected the "split the note" theory and one in the Appellate Division of the Fourth Judicial Department in New York that rules a MERS mortgage was valid. In the Wyoming case, Barney v. Bank of America, a bankruptcy trustee argued that a mortgage once assigned to MERS and subsequently assigned to BAC Home Loans was unenforceable because neither MERS nor BAC Home Loans held the note at the time each entity was the mortgagee identified in the local land records, according to MERS. e Tenth Circuit Court cited a ruling in a previous case which held that "e Trustee has pointed to no Wyoming authority that prohibits the loan originator from agreeing to have someone other than the beneficial owner of the debt hold the mortgage and enforce the debt as its agent. We note that Wyoming has a statute that contemplates conveying real estate to a mortgagee in a representative capacity, which suggests that Wyoming allows original parties to a note and mortgage to name someone other than the noteholder as the mortgagee." "We are pleased that the U.S. Court of Appeals for the Tenth District affirmed the Wyoming bankruptcy court's order," said MERSCORP Holdings Vice President for Corporate Communications Janis Smith. "is holding is consistent with prior rulings and is another example of unsuccessful reliance on the 'split the note' theory." e New York Appellate Court overturned a previous decision by a trial court which had declared a MERS mortgage invalid. In the case of JP Morgan Chase Bank v. Kobee, a trial court in New York originally denied Chase's motion for summary judgment to its foreclosure complaint, ruling that the bank lacked standing to foreclose as the assignee of a mortgage for which MERS was the original mortgagee. Citing an earlier case, the appellate court ruled that the trial court erred in declaring the mortgage invalid and granted the bank's summary judgment in its foreclosure action. "We are pleased that the Appellate Court re-affirmed the validity of a MERS mortgage under New York law," Smith said. "e appellate courts in New York routinely recognize MERS' role as a valid mortgagee as a nominee for the lender, and also recognize that MERS has legal authority to act on behalf of the lender." The number of modifications with extend-term out of all loan modifica- tions in the first quarter. This was due to improved house prices and a declining HAMP eligible population. Source: FHFA STAT INSIGHT 48%

• Cover