10 priciest cities for owning a home

10 priciest cities for owning a home
Monte Carlo tops list of world’s most expensive housing markets

1. Monte Carlo, Monaco
2. Moscow
3. London
4. Tokyo
5. Hong Kong
6. New York
7. Paris
8. Singapore
9. Rome
10. Mumbai, India

Those living in Monte Carlo may enjoy the Côte d’Azur's beaches, glamorous nightlife and status as a tax haven, but they pay for it.

For the second consecutive year, the resort area tops a list of the world's most expensive housing markets, boasting average prices of $4,420 per square foot.

"Monte Carlo is a city of the rich, small and concentrated," says Matthew Montagu-Pollock, publisher of Globalpropertyguide.com, the online real estate research firm that released the report Monday. "The primary reasons for such high prices are related to a shortage of space and tax havens."

Moscow ($1,937 per square foot) and London ($1,928 per square foot) ranked second and third. Moscow's one-spot jump to the top three was propelled by strong economic growth, partly a result of recent high oil prices, and a rise in residential real estate prices in the first three quarters of the year. Last year, the country experienced gross domestic product growth of 6 percent, according to the CIA's World Factbook.

The report appears to support this notion. Gross rental yields, the ratio of yearly rents to purchase price and a measure of value used in the U.K., are between 4 percent and 5 percent in major cities such as Brussels, Belgium; Tokyo; Moscow; New York; and London. The lower the gross rental yield, the more overvalued the property. This is compared with an historical average of 5.5 percent to 8 percent, which Montagu-Pollock deemed "more reasonable."

Only six cities currently have rental yields of more than 10 percent. Topping the list is Chisinau, Moldova, with a 14.17 percent gross rental yield, and Cairo, Egypt, the least expensive property market, with an average price per square feet of $574 and gross rental yield of 12 percent.

This suggests that it will take much more time to close the gap and return to normal averages.

"We're in a correcting market, and we're still moving down," says Field. "While transfers are at a 15-year low, we're still seeing values in New York and other major international cities steady, because we have a lot of situational sellers in the upper tier who don't need to sell and are therefore not negotiating prices."

Bottom line: It will take far more economic pain to bring these boom cities, the beneficiaries of tremendous economic growth, back to real estate reality.

A surprising turn was New York's drop to No. 6, from No. 2, as growth in Asian markets pushed Hong Kong and Tokyo to the top five. Residential apartment prices in Hong Kong and Tokyo were as high as $1,373 and $1,103 per square foot, respectively, in last year's survey. In New York, the average price per square foot was $1,384.

Mumbai, India, rounds out the top 10, with prices averaging $851 per square feet.

Such high property values are surprising during this global economic crisis, but they are a sign of historically high real wealth and global growth.

fact file 10 priciest housing markets

"Even in these trying economic times, there is still tremendous wealth out there," says Nikki Field, senior vice president of Sotheby's International in New York. What drove down New York's rank was, in part, a "hesitancy for conspicuous consumption. The need and ability still exists to buy at the upper tier, but people are scared to publicly spend."

This pullback in spending, coupled with historically high property values, is expected to cause further correction.

"Across the board, we still see property values are too high in terms of gross rental yields," says Montagu-Pollock. "Markets got ahead of themselves and eventually will collapse."

The report appears to support this notion. Gross rental yields, the ratio of yearly rents to purchase price and a measure of value used in the U.K., are between 4 percent and 5 percent in major cities such as Brussels, Belgium; Tokyo; Moscow; New York; and London. The lower the gross rental yield, the more overvalued the property. This is compared with an historical average of 5.5 percent to 8 percent, which Montagu-Pollock deemed "more reasonable."

Only six cities currently have rental yields of more than 10 percent. Topping the list is Chisinau, Moldova, with a 14.17 percent gross rental yield, and Cairo, Egypt, the least expensive property market, with an average price per square feet of $574 and gross rental yield of 12 percent.

This suggests that it will take much more time to close the gap and return to normal averages.

"We're in a correcting market, and we're still moving down," says Field. "While transfers are at a 15-year low, we're still seeing values in New York and other major international cities steady, because we have a lot of situational sellers in the upper tier who don't need to sell and are therefore not negotiating prices."

Bottom line: It will take far more economic pain to bring these boom cities, the beneficiaries of tremendous economic growth, back to real estate reality.

House OKs bill to let judges rewrite mortgages!

Controversial measure faces a tougher road in the Senate

WASHINGTON - The House has passed legislation to give debt-strapped homeowners a chance to win lower mortgage payments through bankruptcy courts.

The vote was 234-191 to approve the measure. It faces a tough road in the Senate, where Republicans and some Democrats oppose the idea.

The bill gives bankruptcy judges new power to reduce the interest rate and principal on a home mortgage. It's part of President Obama's housing rescue plan.

Supporters see it as a crucial tool to prod banks to negotiate with homeowners for more affordable terms. Critics say it will create a flood of bankruptcy filings that will drive up mortgage rates and further destabilize the battered housing market.

On Wednesday, Obama’s team announced details of his broader $75 billion housing plan, which features cash incentives for mortgage holders — known as loan servicers — who cut deals with borrowers for new, more affordable terms.

The legislation has been the subject of an intense lobbying campaign by the financial services industry, which has worked hard to kill it. It has exposed rifts among liberal Democrats who regard it as the only real way to help debt-strapped homeowners avoid foreclosures and moderates who want to give voluntary efforts a chance to work before resorting to the courts.

The same divisions are at work in the Senate, which is expected to consider its own version of the legislation in the coming weeks.

The industry already won several concessions from Democrats in the House, who agreed to limit the measure to existing loans, to homeowners who sought a loan modification from their lenders before filing for bankruptcy, and to people who can no longer afford to pay their mortgages.

Democrats were forced to put off action on the measure when moderates voiced concerns last week that the bill was still overly broad. They wrote a compromise that requires bankruptcy judges to consider whether banks offered homeowners reasonable loan restructuring deals before they weigh in with their own rewrites.

Borrowers also would have a responsibility to prove that they tried to modify their mortgages with their lenders before seeking help in bankruptcy court.

The deal would require judges to consider whether homeowners were offered a “qualified” loan workout consistent with Obama’s plan. That program would let eligible homeowners rework their mortgages to bring their monthly payments down to no more than about one-third of their incomes.

The mortgage industry has argued that unfettered access to bankruptcy court mortgage modifications would impose steep and unpredictable costs on its companies that would be passed along to borrowers as higher fees and interest rates.

Although it calls the new compromise a good step, the industry is still opposed to the measure it brands the “cramdown.” Lobbyists pressed lawmakers to limit the measure to subprime mortgages and to block homeowners who had been offered a mortgage workout by their lenders from getting one through a bankruptcy judge.

Backers and a wide range of economists say that because the measure is limited to existing loans, banks would have no reason to raise future rates to factor in the cost of forced loan rewrites.

The measure is part of a broader housing package that would raise the Federal Deposit Insurance Corporation’s borrowing authority and boost incentives for lenders to rework mortgages. The legislation takes $2 billion out of the $700 billion Wall Street bailout fund to bolster an existing program to allow homeowners rework or refinance their mortgages.

The bill is H.R. 1106.

Foreclosure scam artists rarely face jail time

Rising fraud being dealt with in civil court not seen as much of a deterrent

LAS VEGAS - They call themselves loan modification consultants, negotiators or specialists. Some are legitimate, but many are simple con artists looking for desperate marks facing foreclosure amid the wreckage of the nation's housing market.

It's a good business, too, since in most states, there's not much of a chance they'll ever end up before a judge facing any time in jail.

"It's difficult for us to get prosecutors to do the investigations on misdemeanors," said North Carolina Attorney General Roy Cooper.

While some states have recently toughened penalties for perpetrating the booming business of foreclosure scams, and some prosecutors have used existing fraud statutes to bring criminal charges, the reaction of many state prosecutors in places where foreclosure scams are common are civil actions designed to recover a victim's money.

Only in a few states are attorneys general offices — which tend to be a focal point of consumer protection efforts — willing and able to seek criminal charges and jail time against such con artists. While consumers might be helped financially by the civil cases, advocates say criminal prosecutions would do more to stop these scams.

"You've got to do something to get their attention," said Tom Bartholemy, president of a Better Business Bureau office in southern North Carolina. "Because what's being done — these civil actions — isn't."

The fake foreclosure fixers are operating in a target-rich environment. More than 2 million homeowners faced foreclosure proceedings last year, and the number is expected to rise this year.

That's the audience for roadside billboards around places like Las Vegas that scream "Save my property!" and radio ads that promise "expert help." Some companies comb property records and send mail designed to look like it's from the homeowner's lender: "We have reviewed your property information and determined that you may be eligible for a loan modification."

After Hugo Malara lost his job at a neon sign company and fell behind on his home loan, he called Derric Robinson, a loan modification specialist who advertises a "money back guarantee."

Malara and his fiancee Maria Sorto paid Robinson an $800 fee, but say they rarely heard from Robinson again. In fact, the bank had already sold their neat stucco bungalow when they handed Robinson the check.

"He was recommended by a friend. He said he could fix the problem," said Malara, a 48-year-old immigrant from El Salvador, who said he does not plan file a lawsuit.

Robinson said he made calls to the home's new owners on Malara's behalf. And he blamed Malara for not cooperating and said the fee was compensation for his time.


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Housing plan details who gets help

"That's how much my time was worth," he said, adding that the work was done outside his job as a loan modification specialist for a California company.

Some of those making the offers to help are former brokers, agents and appraisers who've seen their previous business evaporate. But it's difficult to gauge if even the legitimate offers to help are more effective than nonprofit credit counselors who also work with lenders at no charge.

"There are plenty of HUD-approved nonprofits who will do this work for free and that's what we recommend," said Rick Simon, a spokesman for Calabasas, Calif.-based Countrywide Financial Corp., once the nation's largest mortgage lender.

But federal loan modification programs, as well as lender-designed programs, are complicated and time consuming. The Obama administration's new housing recovery plan aims to change this by standardizing the process for modifying loans and offering lenders financial incentives. Cooperation remains voluntary on the part of lenders.

Homeowners who have gotten mixed up with scammers are flooding Better Business Bureau chapters, state attorney generals and consumer protection offices with complaints. Bartholemy said his office in Charlotte, N.C., received about 1,700 last year, while the Bureau of Consumer Protection in Nevada takes in more than 100 a month.

The response from state prosecutors so far, according to a national Associated Press survey, has largely come on the civil side of the court docket. Florida Attorney General Bill McCollum has filed several civil lawsuits, including one against a company with an estimated 600 clients. So have attorneys general in at least a dozen states.

In Maryland, state criminal prosecutors have filed no charges under that state's new foreclosure rescue statute. Ditto in Massachusetts, which recently barred for-profit mortgage foreclosure rescues entirely.

"We found these cases are more appropriately brought in civil court, where we can get better remedies for the victims," said Amie Breton, a spokeswoman for Massachusetts Attorney General Martha Coakley.

Officials in North Carolina say just one person has been convicted since 2004 for such a crime.

In Alabama, the attorney general's office usually reaches out to the foreclosure relief firms first to find out if there is any money to recover before seeking criminal charges, said Rushing Payne, chief of the office's Consumer Protection Division.

"It depends on the nature (of the allegations) and what we're able to prove," Payne said, adding there had been no convictions for foreclosure rescue scams in the past year.

In several states, attorneys general can only bring a criminal case when asked by a local district attorney. In others, they lack the jurisdiction entirely.

"We set out to try to shut these companies down so they can't harm anyone else, and we try to get people's money back as much as we can," said Ben Wogsland, a spokesman for the Minnesota Attorney General.

There are some attorneys general making criminal cases. In Arizona, Attorney General Terry Goddard has brought three cases this year on felony theft, fraud or money laundering charges. Two defendants pleaded guilty, and the third case is pending.

In California, the attorney general's office busted a fraud ring last November that had collected upfront fees ranging from $1,500 to $5,000, stealing more than $700,000 from homeowners in all. Three people have pleaded guilty to grand theft charges and received sentences ranging from probation to 6 years in prison.

Foreclosures continued to rise in February

Up 30 percent from same month last year despite lenders’ moratoriums

WASHINGTON - Despite halts on new foreclosures by several major lenders, the number of households threatened with losing their homes rose 30 percent from last year's levels, RealtyTrac reported Thursday.

Nationwide, nearly 291,000 homes received at least one foreclosure-related notice last month, up 6 percent from January, according to the Irvine, Calif-based company. While foreclosures are highly concentrated in the Western states and Florida, the problem is spreading to states like Idaho, Illinois and Oregon as the U.S. economy worsens.

"It doesn't bode well," for the embattled U.S. housing market, said Rick Sharga, vice president for marketing at RealtyTrac, a foreclosure listing firm. "At least for the foreseeable future, it's going to continue to be pretty ugly."

The rise in foreclosure filings came despite temporary halts to foreclosures by Fannie Mae and Freddie Mac, and major banks JPMorgan Chase, Morgan Stanley, Citigroup and Bank of America. Those companies pledged to do so in advance of President Barack Obama's plan to stem the foreclosure crisis, which was launched last week.

Two states that contributing to the increase were Florida and New York, where temporary bans on foreclosures ended.

But other states are moving to enact similar measures. On Wednesday the Michigan House approved legislation that would give homeowners facing foreclosure a 90-day reprieve. The legislation now goes to Michigan's Republican-led Senate, where its future is unclear.

While the number of foreclosures continue to soar nationwide, banks have held off listing properties for sale, Sharga said. There were around 700,000 such properties nationwide at the end of last year, making up a "shadow inventory" of unsold homes that could drag the housing crisis out even longer.

"It's going to take us longer than you might anticipate to burn through he inventory of distressed properties," he said.

The results highlight the challenge ahead for Obama and his economic advisers. The Obama administration is aiming to help up to 9 million borrowers stay in their homes through refinanced mortgages or loans that are modified to lower monthly payments.

Still, the faltering economy, driven down by the collapse of the housing bubble, is causing the housing crisis to spread. Nearly 12 percent of all Americans with a mortgage — a record 5.4 million homeowners — were at least one month late or in foreclosure at the end of last year, according to the Mortgage Bankers Association. That's up from 10 percent at the end of the third quarter, and up from 8 percent at the end of 2007.

Will Obama’s housing plan help me?

Homeowners must be have good standing loans backed by Fannie, Freddie

President Barack Obama’s new mortgage relief plan, launched Wednesday, aims to help up to 9 million borrowers qualify for more affordable mortgages and stay in their homes.

Are you one of them?

Obama’s “Making Home Affordable” program is designed to work with lenders to modify the loan terms for up to 4 million homeowners and to refinance up to 5 million homeowners into more affordable fixed-rate loans.

Here are some questions and answers about the latest round of aid for homeowners.

A: How do I know if I qualify for the refinancing plan?

Q: Only homeowners in good standing whose loans are held by Fannie Mae or Freddie Mac qualify.

The property must be owner-occupied and the borrower must have enough income to make payments on the new mortgage debt.

Borrowers can’t owe more than 105 percent of their home’s current value on their first mortgage. For example, if your home is worth $200,000, your first mortgage can’t exceed $210,000. Borrowers with a second mortgage still can qualify as long as their first mortgage isn’t more than 105 percent of their home’s value.

Homeowners can’t take cash out during the refinancing to pay other debt.

Borrowers have until June 2010 to apply for the program.

Q: How do I know if my mortgage is owned by Fannie Mae or Freddie Mac?

A: Call your current lender or mortgage servicer. You can find the phone number on your monthly mortgage statement or coupon book.

You can also contact Fannie Mae at 1-800-7FANNIE and Freddie Mac at 1-800-FREDDIE from 8 a.m. to 8 p.m. EST. Or, go to http://www.fanniemae.com/homeaffordable and http://www.freddiemac.com/avoidforeclosure and fill out the online request forms.

Q: What borrowers qualify for the modification program?

A: You don’t have to be behind on your mortgage payments to qualify. Delinquent borrowers and current borrowers who are at risk of imminent default are both eligible.

The program applies to mortgages made on Jan. 1 or earlier. The mortgage payment including taxes, insurance and homeowners association dues must exceed 31 percent of the borrowers’ gross monthly income.

The property must be the homeowner’s primary residence. It can’t be investor-owned, vacant or condemned. Home loans for single-family properties that are worth more than $759,750 don’t qualify.

The program is voluntary, relying on a $75 billion subsidy to encourage mortgage companies to participate. Lenders must agree to reduce the loan payments to 38 percent of a borrower’s monthly income. After that, the government and lender split the cost of bringing the payment down to 31 percent.

Eligible borrowers will have to provide their most recent tax return and two pay stubs, as well as an “affidavit of financial hardship” to qualify for the loan modification program. In the affidavit, applicants will have to cite the reasons behind their financial woes, such as job loss or a drop in income. The government will then take steps to verify the information.

Borrowers are only allowed to have their loans modified once. The program runs through Dec. 31, 2012.

Q: What if I’m in bankruptcy or in active litigation over my mortgage?

A: That doesn’t necessarily keep you from qualifying for the modification program. And borrowers in active litigation can modify their home loans without waiving their legal rights.

Q: What do I do to get help?

A: For the modification program, call your lender or mortgage servicer to see if you’re eligible. For the refinance program, first find out if your mortgage is held by Fannie Mae or Freddie Mac. Then contact your lender, mortgage servicer or a mortgage broker for refinancing options.

Q: How soon can I get help?

A: Both the modification and refinancing programs start immediately.

Q: What if I don’t qualify for either program — is there any other way to get help with a mortgage?

A: Contact your lender or mortgage servicer regarding other modification programs or refinance options. Alternatively, contact a local housing counselor to negotiate with your lender or servicer, to help locate other local resources like rescue grants or loans, or to facilitate a short sale or deed-in-lieu of foreclosure if staying in the home isn’t possible.

A short sale is where homeowners sell houses for less than the amount owed on them, and the lender then considers the debt paid off. A deed-in-lieu of foreclosure is where the borrower gives the property to the lender to satisfy a delinquent loan and to avoid foreclosure proceedings.


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Local housing counselors can be found at the U.S. Department of Housing and Urban Development’s Web site at http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm.

Q: Do FHA, VA or USDA home loans qualify for modifications under Obama’s plan?

A: Mortgages backed by the Federal Housing Administration, Veterans Administration or the U.S. Department of Agriculture are being modified under other programs. The Obama Administration and Congress are working on legislation that would allow modifications of these home loans consistent with the Making Home Affordable program.

Housing plan details which borrowers get help

The Obama administration’s plan to help head off millions of foreclosures came into clearer focus Wednesday when the government issued detailed guidelines governing which homeowners will qualify and how lenders will go about refinancing their mortgages. But Treasury officials conceded it may not know for some time just how many of the estimated 9 million borrowers targeted by the $75 billion plan will be able to stay in their homes.

“It is imperative that we continue to move with speed to help make housing more affordable and help arrest the damaging spiral in our housing markets,” Treasury Secretary Timothy Geithner said in a statement.

Since the housing market began to unwind nearly two years ago, the process of refinancing troubled loans has been mired in a legal thicket created by Wall Street packaging trillions of dollars worth of home mortgages, chopping them up into pieces and selling them to investors.

Mortgage servicers — originally hired to funnel payments from homeowners to investors — have been swamped by an avalanche of calls from borrowers trying to refinance loans, many of which were unsustainable from the day they were issued. Automatic rate increases and a rising wave of layoffs have put millions more homeowners at risk of default.

Under the plan, mortgage servicers will first apply a standard test to decide if investors would lose more money by foreclosing than they would by issuing a new loan with more affordable terms. Because servicers have been using a wide range of methods to make this calculation, a standard formula is expected to speed the approval of more affordable loans. The government is also hoping to speed the process by letting servicers use an automated system to value a home in place of individual appraisals.

The Treasury’s program, announced Feb. 18, aims to reduce monthly payments to no more than 31 percent of a borrower's gross monthly income. The plan is also designed to determine more quickly which borrowers can be helped — and which ones can’t.

"This is about doing the foreclosures that should be done,” said Susan Wachter, a professor of real estate at the University of Pennsylvania's Wharton School of Business. “The foreclosure mitigation that's going to happen here, these modifications are in the interest of the banks.”

The plan pays loan servicers up to $4,500 for each loan they modify. Those who participate have to follow a common set of guidelines.

Struggling homeowners also will have to leap several hurdles to be eligible to a new loan under the “Making Home Affordable” initiative. The program runs through 2012.

Borrowers are only allowed to have their loans modified once, and the program only applies to first-lien loans made Jan. 1, 2009, or earlier. Up to 4 million borrowers are expected to qualify. Another 5 million borrowers who have mortgages held by government-controlled mortgage finance giants Fannie Mae and Freddie Mac should be eligible to refinance through June 2010.

Treasury officials said Wednesday they are still ironing out key details. One involves a major sticking point for many servicers who have tried to modify mortgages to more affordable terms: How to handle the millions of homeowners with second mortgages or home equity loans. Lenders or investors holding those second liens typically suffer the biggest losses when primary mortgages are modified, so winning their approval to modify loan terms has been difficult. The Treasury is working on a plan to let primary mortgage servicers compensate second lien holders, but those details have not been worked out.

Mortgage rates drop to record low!

Mortgage rates drop to record low
30-year-fixed average at 4.85 percent, falling from 4.98 last week

Rates on 30-year mortgages fell this week to the lowest level on record after the Federal Reserve launched a new effort to assist the staggering U.S. housing market.
Mortgage finance giant Freddie Mac said Thursday that average rates on 30-year fixed-rate mortgages dropped to 4.85 percent this week, from 4.98 percent last week. It was the lowest in the history of Freddie Mac’s survey, which dates back to 1971 and was down a full percentage point from a year ago.
The previous record low of 4.96 percent was set in the week of Jan. 15. Rates fell after the Fed last week said it will pump $1.2 trillion into the economy in an effort to lower rates on mortgages and loosen credit.

Rates on 30-year mortgages traditionally track yields on long-term government debt.
Though the yield on the benchmark 10-year Treasury note initially plunged by about 0.5 percentage points after the Fed’s move, lenders did not pass the entire drop on to borrowers. Bond yields rose after worries about what some saw as lackluster demand at a government debt auction Wednesday.

“There was a honeymoon effect initially” after the central bank’s announcement, said Greg McBride, senior financial analyst with Bankrate.com. “The reality of large government deficits and the need for substantial government borrowing is setting in with investors.”
Mortgage applications surged last week, mostly from borrowers looking to refinance and save money on their monthly payment. The Mortgage Bankers Association said Wednesday its weekly application index climbed more than 30 percent for the week ended March 20.
Nearly 80 percent of applications came from borrowers seeking to refinance home loans at lower rates, rather than purchase homes.

In Freddie Mac’s survey, the average rate on a 15-year fixed-rate mortgage dropped to 4.58 percent this week, down from 4.61 percent last week.
Rates on five-year, adjustable-rate mortgages fell to 4.96 percent, compared with 4.98 percent last week. Rates on one-year, adjustable-rate mortgages rose fell to 4.85 percent, from 4.91 percent.

The rates do not include add-on fees known as points. The nationwide fee averaged 0.7 point last week for all mortgages in Freddie Mac’s survey except for one-year adjustable mortgages, which had an average fee of 0.6 point.

WALL STREET JOURNAL FEATURES ByTig Real Estate on FRONT PAGE!

James R. Hagerty with the Wall Street Journal Real Estate Section Quotes;

Maricopa, Arizona

"Along a nearby highway, young men hired by a local real estate brokerage wave red signs touting Homes From $69.9 K."

By Tig Real Estate Comment:

"Touting". To sell or promote in a brazen way.

"Brazen". Brazen out or through, to face boldly or shamelessly: He prefers to brazen it out rather than admit defeat.

By Tig Real Estate is proud of Maricopa, AZ regardless of the challenges we all have faced. By Tig will continue to do its best and crank through the undervalued inventory that has challenged Maricopa residents.

By Tig Real Estate Corporation will continue to help bring the justified value back to Maricopa that we all know is there!

Ryan M. Aubrey

ceo/founder & Resident

Welcome To The News Blog ByTig!

Welcome To The News Blog ByTig!

This Blog will streamline news ByTig Real Estate Corporation and the real estate market!

Ryan Aubrey

ceo/founder