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“We are likely seeing the beginning of the end of the unprecedented wave of mortgage delinquencies and foreclosures that started with the subprime defaults in early 2007,” said Jay Brinkmann, chief economist of the Mortgage Bankers Association, in a written statement.

The delinquency rate for mortgages on one- to four-unit residential properties was a seasonally adjusted 9.47% of all mortgages outstanding in the fourth quarter, down from 9.64% in the third quarter and up from 7.88% in the fourth quarter of 2008, according to the MBA’s quarterly delinquency survey.

Delinquencies include mortgages that are at least one payment or more past due but not yet in foreclosure.

Meanwhile, 1.2% of outstanding mortgages entered the foreclosure process in the fourth quarter, down from 1.42% in the third quarter and up from 1.08% in the fourth quarter of 2008. The percentage of mortgages at some point in the foreclosure process at the end of the fourth quarter was 4.58%, up from 4.47% in the third quarter and 3.3% in the fourth quarter of 2008.

The MBA survey covers about 44.4 million loans on one- to four-unit residential properties, or about 85% of all first-lien residential mortgage loans that are outstanding in the country. No doubt, the foreclosure nightmare isn’t over yet.

The percentages of loans 90 days or more past due and loans in foreclosure process set record highs in the fourth quarter, according to the report. Many of those loans more than 90 days past due are in loan modification programs, and some of them have been seriously delinquent for months waiting for modifications to get finalized.

But the good news is there are fewer problem loans actually entering delinquency—likely a result of fewer layoffs, Brinkmann said. “We normally see a large spike in short-term mortgage delinquencies at the end of the year due to heating bills, Christmas expenditures and other seasonal factors. Not only did we not see that spike but the 30-day delinquencies actually fell by 16 basis points from 3.79% to 3.63%,” he said. He added that the non-seasonally adjusted 30-day delinquency rate has only dropped three times in the past between the third and fourth quarter—”and never by this magnitude.”

Depending on the fate of seriously delinquent mortgages—whether they are cured with modifications or ultimately enter foreclosure—the percentage of mortgages somewhere in the foreclosure process could start to see a gradual decline in the second half of the year, he said during a conference call with reporters.

If normal seasonal patterns hold, there could be a bigger drop in the 30-day delinquency rate in the first quarter of 2010, Brinkmann said. That would be a positive sign for the months and years ahead. “The continued and sizable drop in the 30-day delinquency rate is a concrete sign that the end may be in sight,” he said. “With fewer new loans going bad, the pool of seriously delinquent loans and foreclosures will eventually begin to shrink once the rate at which these problems are resolved exceeds the rate at which new problems come in. “It also gives us growing confidence that the size of the problem now is about as bad as it will get,” he said.

According to the MBA data, Florida was the most problematic state, in terms of delinquencies. Twenty-six percent of Florida mortgages were one payment or more past due at the end of the year, and 20.4% of mortgages in the state were 90 days or more past due or already in the foreclosure process.

Speaking from Henderson, Nev., Obama spoke about the nation’s fiscal difficulties, and the many homeowners who have been hit by unemployment and foreclosure. According to the White House, the $1.5 billion will be doled out to state housing finance agencies who will in turn take the lead in developing programs that will be most helpful to homeowners in their states. Possible programs will assist homeowners currently in negative equity, help unemployed homeowners or address issues with second mortgages.

There aren’t a lot of details about the additional aid yet. The Department of the Treasury will announce the rules of the program and how much each state will receive in the next two weeks.

What’s certain is that homeowners in cities like Henderson certainly face challenges. Henderson is the second-largest city in Nevada and is part of the Las Vegas metropolitan statistical area. According to Zillow’s Real Estate Market Reports, home values in Henderson have fallen 52.5% since the market peaked in May 2006. The median home value then was $353,000. At the end of 2009, it was $167,800. This graph of Henderson’s Zillow Home Value Index gives you an idea of how home values within the area have changed over time.

As is typical in cities and towns where home values decline rapidly, many of the homeowners in and around Henderson also owe more on their mortgage than their home is worth. In the greater Las Vegas metropolitan statistical area, Zillow data shows 81.3% of all owners of single-family homes with mortgages were underwater at the end of 2009.

More details on these programs are sure to emerge in the coming weeks, and we’ll be sure to stay on top of them. To see how cities and towns near you have fared, check out local home values in Zillow’s Real Estate Market Reports

Federal Reserve Chairman Ben Bernanke told Congress recently that he expected the U.S. economic recovery to continue at a moderate pace, but he expressed concerns about weakness in residential and commercial construction as well as the “quite weak” labor situation that has lifted chronic unemployment to very high levels.

“Of particular concern, because of its long-term implications for workers’ skills and wages, is the increasing incidence of long-term unemployment,” Bernanke said in prepared remarks as he delivered the Fed chairman’s semiannual report to the House Financial Services Committee. He noted that more than 40% of the unemployed workers have been jobless for six months or more, nearly double the share of a year ago.

Bernanke, in addressing Congress for the first time since his reappointment to a second four-year term as chairman last month, said the U.S. economy had expanded at an annual rate of about 4% in the second half of last year, with big help from temporary factors related to business inventory levels and stimulative fiscal and monetary policies. “A sustained recovery will depend on continued growth in private-sector final demand for goods and services,” he said.

With the early economic recovery and inflation remaining subdued, Bernanke reiterated that central bank policymakers expected to keep short-term interest rates at near zero for an “extended period,” which most analysts view as at least several months.

Bernanke also said again that the Fed had the tools to gradually siphon out of the economy the billions of dollars in emergency aid that the central bank pumped out to keep the economy from plunging into a depression. The so-called exit strategy is crucial, in both economic and political terms. If the Fed pulls back too fast, it could stifle recovery. If it moves too slowly, an outbreak of inflation could wreak havoc at home and damage confidence abroad.

Lawmakers questioning Bernanke were focused on jobs and the record federal deficits that are becoming a major political challenge for Bernanke and for the Obama administration. In statements before Bernanke’s testimony, Democratic members blamed the previous, Republican administration for the unemployment troubles and the bank bailouts that have fanned public ire at Bernanke and the political establishment.

Pressed by lawmakers, Bernanke said that the current pace of federal deficits was unsustainable and that the Obama administration’s economic stimulus plan—which Republican opponents have criticized as ineffective—had created jobs, though he didn’t cite any figures.

Courtesy of RIS Media

RISMEDIA, February 23, 2010—There we were, a whole generation with the brass ring in sight. Flush with equity in stocks and real estate, portfolios of blue chips, bolstered by ERISA protected pensions, insured by the Pension Benefit Guarantee Corporation and maybe even a little Social Security. We were going to rock retirement like only boomers can do.

But, the financial intermediaries beat us to it. Now they’re skiing in Gstaad and eating Caspian Beluga roe on toast points while we clip coupons and postpone our golden years indefinitely.

Many who had pension funds will discover that the money owed to retirees exceeds what is available to pay them. The PBGC, created to make sure retirees would get their money, reports that as of September 30, 2009, they had only $68.7 billion in assets to cover an estimated $89.8 billion in liabilities. The PBGC reports that “potential exposure to future pension losses from financially weak companies” is approximately $168 billion.

Homeward Bound

More and more households are starting to look like the Walton’s with three or four generations living under one roof. Aging parents and underemployed adult children with children of their own are squeezing boomer households.

Now, we need to bridge the gap between expectations of an idyllic retirement and the new reality that we may live a very long time and have to work for most of it, if we can.

A Much Longer Life to Plan For

It’s a whole new ball game. In 1900, average life expectancy was 47 years. There wasn’t any retirement to plan for. Staying ahead of the grim reaper was a dead sprint and a very short race. Those who lived longer kept working until they were unable to. Few people lived long enough to develop dementia.

Today, according to a United Nations Report, Japan leads all countries with an average life expectancy of 82.6. Men live an average of 79 years and women outlive them by 7.1 years to a ripe old age of 86.1.

The U.S. ranks 38th with an average life expectancy of 78.2. Men live to an average of 75.6 years, and ladies, you’ll get 5.2 more years and live to be 80.8.

Our immediate neighbors to the north, where we generally assume that things there are pretty much like they are here, are on to something. Canada ranked 11th with an average of 80.7, and note the unusually narrow gap between men and women, 78.3 to 82.9.

Canadian men live longer because there is more equitable access to health care, and because they don’t get killed in gun battles either foreign or domestic. Not getting killed is the key to longevity.

This helps illustrate an important point, the longer we live the further out our expectancy reaches. A man who has already sprinted to 65 can look forward to 16 more years.

Research by the late Dr. Roy Walford of UCLA suggested that maximum life expectancy for humans is between 120 and 140. Only one person has been verified to have lived past 120, so it is definitely the outer edge.

Walford’s theory of why we do not reach maximum life expectancy is simple, we eat too much. He believed that optimal caloric consumption, in his case 1,600 calories per day, was the key to retarding the aging process.

Walford himself lived to the age of 79, finally succumbing to Lou Gehrig’s disease, which he believes was brought about during his time in Biosphere 2, where he was subjected to long periods of oxygen deprivation.

Despite his illness, he believed that his restricted diet allowed him to do better, longer in managing his symptoms, but in the end, the perils of living finally caught up with him.

Rethinking Diet

I’m a country boy from the Midwest and I am a recovering meat-aholic. I firmly believe that the amount of bacon I could eat is limited only by the supply available. Vegetables in January in the Midwest? That would be potatoes—boiled, mashed, baked, escalloped, steamed, creamed, fried and au gratin.

My point is, I couldn’t live on a bowl of dried lemon grass and the steam from weak tea, but we can be certain that a healthy diet plays a very important role not only in terms of longevity, but in terms of how we feel in those extended years.

We know things about the affect of what we eat that we did not know even two decades ago.

We know that exercise gives us energy and optimism. We are going to need strength and energy. This is starting to feel less like an economic hiccup; welcome to the New America, the land of downward mobility.

More and more economists are starting to acknowledge that there will not be enough job creation to improve things anytime soon, and they are suggesting that things will remain as they are for two years. In government years, that is a decade.

The need for health insurance alone will keep many people working, not just to get it, but to pay for it.

So here we are, just where we didn’t want to be, well past our middle-earlies and racked with anxiety. What do we do? Acknowledge the reality of our situation, make a new plan, and get going.

The Traditional Retirement Model Never Really Worked Anyway

Retirement as a prolonged period of leisure spawned the Del Webb’s and the leisure villages. Endless days of golf and sunshine, and not a care in the world, or anything else to give purpose to life. Fun isn’t fun if that’s all you’re having.

As a matter of fact, it leads to boredom, alcoholism and death by television.

Some of the realities for us are that we will live longer and, in most ways, be more fully functioning. Even if we could afford to retire, we would need something challenging, rewarding and important to give purpose and meaning to our lives.

Depending on how we respond, for some this will be an opportunity unanticipated even 25 years ago. It may very well be different than what we envisioned and even planned, but life is full of surprises and blessings, we just have to have faith.

Options

Many workers will simply stay longer in their current jobs. Ageism continues to be a problem for older workers, and one can understand some generational resentment that we aren’t getting out of the way and ceding the reins of power.

Some will have to leave jobs that have become too physically demanding, and the bridge to less physical work could be additional education and training. I expect most campuses, both technical and academic, will see enrollment increase among older adults.

The world of work has changed substantially during our working lives. There could be unimagined ways to apply the talents we have honed and the experience we have amassed.

We can still make a difference. A lot of the idealism of the sixties was the by-product of raging hormones and too much LSD, but it’s not too late to get behind something important and reap the emotional rewards. If we couldn’t make the world a better place for ourselves and our children, maybe we can make it better for our grandkids.

The National Association of Realtors® (NAR) announced the launch of HouseLogic, a new, comprehensive consumer website about all aspects of homeownership. HouseLogic helps homeowners make smart decisions and take responsible actions to maintain, protect and increase the value of their homes.

“Backed by the resources and industry insights of NAR and its Realtor members, HouseLogic will engage and involve consumers throughout the lifecycle of homeownership,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz. “It makes sense that, as the first, best source for real estate information, NAR should collaborate with today’s consumers to help them make the most out of owning a home. HouseLogic will help us do that.”

The free website helps homeowners plan and organize their home projects and provides timely articles and news; home improvement advice and how-tos; and information about taxes, home finances and insurance.

“Unlike other homeownership websites, HouseLogic helps consumers view their home through a financial lens and make smart, informed home improvement investment decisions,” said Golder. “Families can set goals for saving money on their home or increasing its value, and easily track the progress they are making on those goals.”

Registered users can save relevant information, create to-do lists and set project reminders. The website can also be customized for individual homeowners depending on how handy or ambitious they are regarding home projects; how much money they want to spend or save; where they live; and their priorities, such as increasing the value of their home or improving their neighborhood.

HouseLogic also empowers homeowners who want to get more actively engaged in shaping community life and advocate neighborhood and homeownership issues that matter most to them. The site provides users with the tools and know-how to effect change and address concerns, like establishing a neighborhood watch program, building a community playground, or participating in city or county planning efforts.

“For more than 100 years, Realtors have been bringing America home,” said Golder. “HouseLogic takes owning a home to the next level, partnering with consumers to truly help people build their futures through homeownership.”

If you are buying a home or thinking about it, be sure to not the quality of the stucco job on a home.  Recently, many houses have had major problems with the workmanship which has led to leaks, moisture, and sometimes mold.  If this has to be re-done it could cost as much as $100,000 to fix.  Be wise and get a stucco inspection during your home inspection period.  If you are my client, I have a great stucco inspector that will give you an analysis.  Contact me for further details.

Everybody please be safe during the snow storm on the way!

Current # Month's Inventory Levels for Resales as of 01-26-10.  (6 Months = Balanced Market, >6 tilts towards a Buyers Market, <6 tilts towards a Sellers Market).  Total # of Homes / Monthly absorption-calculated based on # of settled properties in 2008 per Trend MLS = # of total months current inv.

School District                # of Months Current Inventory

Tredyffrin Easttown                                 3.90

West Chester                                         5.07

Phoenixville                                           5.17

Downingtown                                          5.67

Springford                                             5.95

--------------------------BALANCED MARKET LINE--------------------------------------------

Great Valley                                            6.84

Kennett                                                  7.03

Twin Valley                                              7.29

Coatesville                                              7.51

Avon Grove                                           8.34

Owen J. Roberts                                      8.74

Octorara                                                8.80

Unionville-Chadds Ford                            9.19

Oxford                                                 9.22

This is the first time in a few years that every district is under 10 months inventory in Chester County.  Inventory levels are shrinking and as we creep towards 6 months inventory county wide, the market will be further stabilizing.  This has been evident over the past year and half as there were times where inventory levels were up to 14 months in some places.  This data is good to know, especially when negotiating a home sale.  Whether buying or selling, you will have a better perspective on the state of the market in your district and can negotiate appropriately.  Follow up or contact me for further details.

As of 1-26-10, current resale inventory by school district in Chester County (per Trend MLS):

School District                # of Homes Active

West Chester                                398

Coatesville                                    344

Downingtown                                 308

Spring-Ford                                   250

Owen J. Roberts                            172

Phoenixville                                  164

Great Valley                                  162

Tredyffrin-Easttown                        160

Avon Grove                                   139

Unionville-Chadds Ford                  134

Kennett                                        130

Oxford                                         126

Twin Valley                                    99

Octorara                                        77