By Breaking Legal News, Breaking Legal News.

Construction of new homes fell in October, fresh evidence that the housing industry remains under duress.

Construction of new homes and apartments sank 11.7 percent last month to a seasonally adjusted annual rate of 519,000 units, the Commerce Department said Wednesday. But that was mainly because apartment construction, which represents less than 20 percent of the housing market, fell by more than 40 percent. The much larger single-family home category fell 1.1 percent.

The overall drop marked the poorest showing since April 2009, when construction dropped to 477,000 units -- the lowest level on records dating back to 1959. Construction of new homes and apartments is 77 percent below its peak during the housing boom of 2.27 million units in January 2006.

The weakness last month reflected a small decline in construction of single-family homes and big decrease in construction of apartments and other multifamily units.

Separately, the Labor Department said inflation was essentially tame last month. A steep rise in gasoline prices drove the consumer price index up 0.2 percent in October, the fourth straight monthly increase. But excluding volatile food and energy costs, core consumer prices were unchanged for the third straight month. In the past year, the core index has risen only 0.6 percent, the smallest increase since the index began in 1957.

The weak housing market has been a major drag on the broader economy, which is struggling to add enough jobs to lower the 9.6 percent unemployment rate. A huge backlog of foreclosed properties has lowered home prices and made it difficult for builders to compete.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.

By Breaking Legal News, Breaking Legal News.

For some Florida residents, the price of getting out of foreclosure will include taking on a second mortgage — payable this time to their lawyers.

The new mortgage, which takes effect only if the foreclosure is dismissed and the homeowner’s debt to the bank is reduced, is controversial among defense lawyers, some of whom call it “creepy” and “crass.” Yet even they acknowledge it offers a solution to a vexing question: How do they get paid?

After recent revelations that banks were sloppy in processing many foreclosures and in some cases lack standing to seize a house, potential clients seeking to challenge their lenders are flocking to lawyers. But while these distressed homeowners might have a case, they generally lack the resources to pay legal fees. Being in foreclosure usually means being broke.

“We thought, ‘Why don’t we use a bit of ingenuity to find an affordable way to represent them?’ ” said Peter Ticktin of the Ticktin Law Group in Deerfield Beach, Fla. “It’s a new model, a new paradigm.”

Foreclosure defense is a new legal specialty whose strategies and techniques are still being worked out. Mr. Ticktin, who has some 3,000 foreclosure clients, says his plan to collect fees by taking another mortgage on his clients’ properties has already been copied by other firms.

The Ticktin mortgages resemble the loans that the clients originally got from Countrywide, GMAC and other lenders. Each will be a contractual obligation with the law firm, labeled as a mortgage and structured like one, too, with the client paying a certain sum every month and using the house as collateral.

Unconventional payment structures are becoming popular in the foreclosure hotbed of Florida. Whether they yet have caught on elsewhere is unclear. Certainly, Mr. Ticktin is far from the only lawyer being forced to innovate.

fine them.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.

By Breaking Legal News, Breaking Legal News.

Sales of previously occupied homes rose last month after the worst summer for the housing market in more than a decade. And fears over flawed foreclosure documents could keep buyers on the sidelines in the final months of the year.

Sales grew 10 percent in September to a seasonally adjusted annual rate of 4.53 million, the National Association of Realtors said Monday.

Home sales have declined 37.5 percent from their peak annual rate of 7.25 million in September 2005. They have risen from July's rate of 3.84 million, which was the lowest in 15 years.

Most experts expect roughly 5 million homes to be sold through the entire year. That would be in line with last year's totals and just above sales for 2008, the worst since 1997.

Still, sales could fall further if potential lawsuits from former homeowners claiming that banks made errors when seizing their homes make consumers fearful of buying foreclosed properties.

The Federal Reserve on Monday become the latest government regulator to announce it would be looking into whether mortgage companies cut corners on their own procedures when seizing homes.

Chairman Ben Bernanke said the Fed would look intensively to see if policies, procedures or internal controls led lenders to improperly foreclosure on homeowners. Preliminary results of an in-depth report are expected to be released next month.

"We take violation of proper procedures very seriously," Bernanke said.

In a survey taken by the Realtors group this month, about 23 percent of the 2,000 agents surveyed said they have a client who is no longer interested in purchasing a foreclosed property due to the foreclosure-document mess.

"You're going to see uncertainty on the part of homebuyers," said Quinn Eddins, director of research at Radar Logic Inc., which tracks the housing market.

Mortgage applications to purchase homes last week were 29 percent below the same week a year ago, according to the Mortgage Bankers Association. At that time, buyers were rushing to purchase homes to qualify for federal tax credits.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.

By Breaking Legal News, Breaking Legal News.

The number of homes taken over by banks topped 100,000 for the first time in September, though foreclosures are expected to slow in coming months as lenders work through questionable paperwork, real estate data company RealtyTrac said on Thursday.

Banks foreclosed on 102,134 properties in September, the first single month above the century mark, RealtyTrac said. There were 347,420 total foreclosure filings in September, 3 percent higher than August and 1 percent higher than a year earlier.

"We expect to see a dip in those bank repossessions -- and possibly earlier stages of the foreclosure process -- in the fourth quarter as several major lenders have halted foreclosure sales in some states while they review irregularities in foreclosure-processing documentation that has been called into question in recent weeks," said James J. Saccacio, chief executive officer of RealtyTrac.

On Wednesday, all 50 states launched a joint investigation of the mortgage industry after widespread reports of mortgage industry officials signing foreclosure documents without knowing their contents.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.

By Breaking Legal News, Breaking Legal News.

The number of buyers who signed contracts to purchase homes dropped in June, as the weak economy and tight lending standards kept consumers away from the housing market.

The National Association of Realtors said Tuesday that its seasonally adjusted index of sales agreements for previously occupied homes dipped 2.6 percent to a reading of 75.7.

That was the lowest on records dating back to 2001 and down nearly 19 percent from the same month a year earlier. The index has fallen by more than 40 percent from its peak in April 2005. May's reading was revised slightly downward to 77.7.

High unemployment, weak job growth and tight credit have hurt the housing market. Sales picked up in the spring when the government was offering tax credits of up to $8,000. However, once the tax credits expired on April 30, sales plunged.

Economists say the government incentives prompted many buyers who might have signed contracts during May and June to move their purchases up. That's one reason for the sharp decline.

But they also point to the growing inventory of unsold homes on the market. It has risen to almost 4 million. That's nearly a nine-month supply at the current sales pace, the highest level since August. It compares with a healthy level of about six months. And that doesn't include millions of foreclosed homes that have yet to go onto the market.

Originally posted at Breaking Legal News. Please visit http://www.breakinglegalnews.com/.