The News: Feb. 24

Million-dollar foreclosures are on the rise

The 1 percenters aren't immune to losing their houses. This CNNMoney report details how wealthy homeowners are actually losing homes to foreclosure at a faster rate than the rest of the country.

Over 36,000 homes valued at $1 million or more were foreclosed on—or at least served with a notice of default—in 2011, according to data compiled by RealtyTrac, which tracks foreclosures. While that's less than 2% of all foreclosures nationwide, it represents a much bigger share of foreclosure activity than in previous years.

Many of those foreclosures were of the strategic variety. The owners could have afforded to continue making payments, but made a business decision and walked away.

"In the lower-priced houses you'll see more people defaulting because they can't afford the payments and it's a choice between feeding their family and paying the mortgage on a home that's under water," said Stuart Vener, a national real estate and mortgage expert with the Florida-based Wilshire Holding Group.

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Escaping the penalty box

With four million homes lost to foreclosure in the last six years, there are plenty of would-be buyers out there with foreclosures on their records. Here's a good Chicago Tribune article on how long a buyer will typically have to wait after a foreclosure before getting approval for another loan.

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Short sale, short wait

A new bill could speed up the time it takes for a lender to respond to a request for a short sale. And here's an interesting wrinkle: lenders would be fined $1,000—paid to the homeowner—for each missed deadline.

The bill, introduced late last week by Sen. Lisa Murkowski, R-Alaska, gives the servicer 75 days to reply to a homeowner's written request, which must include a copy of a contract with a prospective buyer.

The servicer would have to answer with an approval, denial or request to extend the response period up to 21 days. The companies could also approve the short sale subject to certain changes.

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Get some help at home

Is your spouse a source of business referrals? If yes, great! If not, here's a column from Realty Times' Jennifer Allan-Hagedorn that explores how you can get your spouse more involved in your real estate career.

In my SOI (Sphere of Influence) writings, I urge agents to prove to their friends that they are an RCHB, which stands for a "Reasonably Competent Human Being." If your friends perceive you as an RCHB, they'll be happy to hire you, or to refer business your way. If they don't perceive you as such, they probably won't. Makes sense, doesn't it? I mean, referring business to a friend is a risky thing to do - no one wants to be responsible for a referral that goes badly, so we're all a little circumspect about who we have on our personal referral lists.

Here's the thing ... the cold hard fact is that your spouse is no different.

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Flying off the shelves

Finally, here's a link from MSNBC on how previously-owned homes are selling at the fastest rate since May 2010. That's nearly two years ago! Good news, huh? We're not all the way back by any means, but we're certainly making progress!

The National Association of Realtors, an industry trade group, reported Wednesday that existing-home sales—the lion's share of the housing market—rose 4.3 percent in January. The equates to a seasonally adjusted annual rate of 4.57 million homes, which is still well below the 6 million pace that economists say is needed for a healthy housing market.

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