Stop Foreclosure

Better days are ahead for Hampton Roads’ economy, ODU economists say

But there’s still a ways to go before the region and the nation regain all the jobs lost during the recession, the economists said during their annual economic forecast. About 300 people attended the event at the Norfolk Waterside Marriott.

Hampton Roads’ gross regional product is anticipated to grow by 3.1 percent — nearly its half-century average of 3.2 percent — but a slower pace than the 3.4 percent growth expected nationally. Driving the growth will be a 3 percent increase in Department of Defense spending, port activity, health services and tourism spending, economics professor Vinod Agarwal said.

Job growth will be slow, as employers have learned to do more with less, Agarwal said. In 2011, the region will likely gain 9,600 jobs, mostly in professional and business services, education, leisure and hospitality and health care services. The unemployment rate will linger at about 7 percent.

In Hampton Roads, private-sector earnings, including wages, salaries and fringe benefits, jumped by nearly 50 percent between 2000 and 2009, outpacing the 30 percent increase across the U.S.

Hampton Roads military saw a 75 percent increase.

Retail sales fell by 8.6 percent between 2007 and 2009 and continued to decline for the first seven months of 2010. But growth the second half of the year more than offset the losses. Taxable sales will likely increase 2.5 percent this year, Agarwal said.

Hotel room revenue, reflecting tourism and business travel, was up 1 percent for 2010. It’s expected to tick up 2.4 percent for 2011.

The value of single-family housing permits is projected to increase 2 percent. Building surged in early 2010 due to federal home-buying tax credits, but has since trailed off due to an oversupply of residential inventory. Existing-home sales dropped to their lowest point in at least 10 years, while inventory is at its highest level in at least 15 years.

That vast inventory, coupled with tight home loan requirements and foreclosures, will likely depress prices 3 percent to 5 percent through 2011. They’ve already fallen about 15.6 percent since peaking in 2007, Agarwal said.

The price decline is a correction of the escalating home prices of the mid-2000s.

“If there’s excess supply, prices have nowhere to go but down. How long it’ll take, nobody knows,” Agarwal said.

Comparing the cost of renting to the cost of a mortgage, buying a house is more affordable today than it has been in years, he said.

“It is time to buy,” Agarwal said.

General cargo tonnage at the region’s ports is expected to grow by 3.2 percent. The port will become more competitive when vying for Midwest ocean cargo due to Norfolk Southern’s new Heartland Corridor, which became fully operational in September. It cuts about a day and a half off the trip to Chicago. Plus, the Virginia Port Authority’s leasing of the Portsmouth APM terminal will improve its competitive position. The new facility is roughly 10 percent more efficient in cargo movement.

Nationally, about 2 million jobs will be created this year, but the unemployment rate is expected to stay high, reflecting the high number of discouraged workers who have stopped looking for work, economist Gilbert Yochum said.

As real estate values take a hit, so will local government budgets. Local government job losses will continue for a year or two after real estate prices bottom out, Yochum said.

He predicts foreclosures peaked last year, will remain high this year and begin to decline in 2012. That will keep banks from lending.

“They’re using their extra money to pay off the bad loans,” Yochum said. “We’re in a stasis situation paying off this bad stuff that’s literally choking the financial situation.”

Corporate profits are at all-time highs. Businesses are spurring growth in the economy with investments in software and equipment.

“The economy is turning around, but not like a speed boat,” Yochum said. “More like an ocean liner.”

Stop Foreclosure

Discover Why Short Sales Are Becoming Popular Choice To Stop Foreclosure

Homeowners who are facing foreclosure will use the short sale method to stop it from occurring and ruining their credit entirely. This especially true of homeowners where interest rates on their loans skyrocket, either doubling and/or tripling their house payment with them unable to afford the home any longer. Real estate investors also like short sales because of the deep discounts they receive from them.

Sellers will negotiate a short sale with their lender, who may require the seller to explain why they are unable to make the normal monthly payments. Not too long ago, home foreclosures rose because the 2004-2005 adjustable rate mortgages that were written were resetting. The problem with short sales is that they are complicated and are likely to stay complicated with lenders having to deal with them. Those homeowners who used the equity in their home while the real estate prices were inflated are now feeling the pain.

How Lenders Work In Short Sales

Lenders understand that home repossession is costly; after all, they have to spend tens of thousands of dollars to deal with the home including the maintenance, refurbishing, marketing and selling the home. The only issue is that there are no guarantees that they’ll be able to recoup their losses, not like they can from a short sale.

Lenders want physical proof that the homeowner is unable to pay their monthly bills and actually needs relief from the home payment. Homeowners and lenders see short sales as the last resort before the foreclosure or bankruptcy processes.

While lenders don’t want to hold onto problem properties, they certainly don’t want to lose the home for very low prices.

How Sellers See Short Sales

What seller wouldn’t want to get the most out of their house? They certainly don’t desire to sell their home for a lot less than the home’s market value or less than what they initially purchased it for. This situation could turn dire if an unforeseen event takes place that generates a financial hardship for the homeowner. For instance, they lost a job, are diagnosed with long-term illness or have a sudden rise in living expenses. These are just three of the reasons that homeowners see themselves in a cash-strapped situation.

Some sellers are lucky enough to convince the lender to do a short sale as the best way to handle the problem but there is a downside they must understand. That is… some lenders may claim the forgiven debt as a loss on the company’s taxes and give the seller a 1099 form for that amount.

A Look At Foreclosures

Remember that in 2004-2005, there were millions of loans written for adjustable rate mortgages, many of them resetting in 2007,2008 & 2009. As a direct result, short sales also rose. Lenders have differing views on how to handle foreclosures and short sales workouts.

More and more short sales are taking place and anybody who has completed short sales understands, it’s rough ride for the sellers who are already feeling topsy turvy. However, if you understand what short sales are all about, you can opt to go this route to avoid foreclosure.

About The Author:

EJ Harris is one Managing Partners at Community HomeSolver, which is a home buying company for “Sell House”.  Harris has many interesting articles written on this very topic. People expect to find all kinds of interesting data when they are trying to find out how to sell their home or sell their house. Yet, it’s not always what they are searching for even when they type in “How To Sell Your Home”, “Privately Sell Your Home” or “Sell Homes Online”.  You may not get everything you want from this article but you’ll be surprised by what you do learn about “Sell House”, “Sale Home” even if you made a mistake in spelling while searching for a particular topic such as “hpw to sale your hom fast” or “seling yur home quicly”.

Community HomeSolvers buy homes and houses in and around areas of Williamsburg, VA. We Buy Houses in Newport News, Hampton, Norfolk, Virginia Beach, Portsmouth and Chesapeake! We are also now seeking homes in and around Richmond, Henrico, Chester, Chesterfield,  Highland Springs, Colonial Heights