BluegrassForeclosure.com

Integra Bank 4Q:  The net loss available to common shareholders for the fourth quarter of 2009 was $96.1 million, or $4.64 per diluted share, compared to $20.9 million, or $1.01 per diluted share for the third quarter of 2009. The provision for loan losses was $30.5 million, up $11.6 million from $18.9 million during the third quarter of 2009, while net charge-offs totaled $21.2 million, or 3.86% of total loans on an annualized basis, a $0.7 million decrease from $21.9 million, or 3.74% of total loans annualized for the third quarter of 2009.

. . . . “Our fourth quarter results were significantly impacted by current economic conditions and continued weakness in commercial real estate,” stated Mike Alley, Chairman and CEO. “We are executing a plan to return to profitability on a long term basis by stabilizing and then reducing our level of non-performing assets, enhancing our capital and liquidity and increasing the operating income of our core community banking franchise.”

. . . . “We are in the process of completely exiting the commercial real estate line of business established during 2003 in Cincinnati, Ohio and will continue to gradually wind down the existing portfolio, either through paydowns or sales to other parties,” stated John Key, Chief Credit and Risk Officer.”

Check out this report from the Lexington Bluegrass Area Realtors.  It’s a good visual to follow along all of the changes over the past couple of years.

Hopefully we won’t see another year like the end of 2007 and into 2008.  But with the unemployment rate still hovering above 10%, it’s hard to predict what this year will end up like.  One prediction though, it’s still a great buyer’s market and rentals will continue to be in high demand throughout the year.

February real estate statistics for the Bluegrass contain many positive indicators. Sales saw a sharp rise in February 2010, increasing 20% for the year-to-date over 2009 and 19% over February 2009.  Existing Home Sales increased 24% over February 2009 from 330 to 412. For the year to date 2010, Existing Home Sales increased 28%, from a total of 578 sales closed in January-February 2009 to 742 sales closed in January- February 2010.

From LBAR.com

From LBAR.com: Kentucky existing home sales and construction growth is much higher than a year ago and growing at 37 percent compared for 2009 Q4 vs. 2008 Q4 and is outpacing the U.S. at 27.2 percent according to the National Association of Realtors® Local Market Report, Fourth Quarter 2009 for the Lexington Area.

The Central Kentucky real estate market continues to outpace several important national trends which illustrates that all real estate markets are local. In terms of price activity, Lexington enjoyed a 1.8 percent one-year appreciation (2009 Q4) while the U.S. saw a 4.0 percent decline.

. . . . And Lexington is cited as 23rd Healthiest Builder Market in U.S. according to the Builder Market Health Index computed by Hanley Wood Market Intelligence by comparing 2009 actuals to 2010 projections for key housing drivers–employment, income, home values, and population.

From WAVE3.com:  “Jason and Melissa Mattingly are finding out that mortgage modifications can become nightmares. Two years ago they fell behind on a couple of mortgage payments and received a mortgage modification through their lender, Countrywide Homes. Shortly thereafter, Countrywide was acquired by Bank of America and the Mattingly’s had to file the paperwork again - but now Bank of America is taking steps to foreclose on the home.

“We’ve never gotten anything like this, we’ve made our payments, they’ve accepted (them),” said Melissa Mattingly. “So I just don’t see how they can foreclose on us if we’ve honored our payments every month.”

The Mattingly’s receive up to a dozen phone calls a day from Bank of America saying they are only making ‘partial’ payments on their home mortgage. When Melissa or Jason bring up the home mortgage modification they sent in, bank representatives say there’s no reference to a modification in their computer records. The bank admits they’re receiving the Mattingly’s payments, but refuses to recognize the modification.”

To see if you qualify for home loan modification, click here.

Kentucky’s seasonally adjusted preliminary unemployment rate rose to 10.9 percent in February 2010 from a revised 10.7 percent in January 2010, according to the Office of Employment and Training (OET), an agency of the Kentucky Education and Workforce Development Cabinet.

February 2010’s jobless rate is 1.3 percentage points higher than the 9.6 percent rate recorded in February 2009 for Kentucky. The 10.9 percent rate recorded in February 2010 matches the 10.9 percent rate in Kentucky in August 1982, and is the highest since September 1983 when the rate reached 11.1 percent.

“Kentucky’s economy continued to show signs of economic hardship in February 2010. The unemployment rate increased to 10.9 percent, and nonfarm employment dropped to its lowest level since April 1998. However, discouraged workers are starting to return to the labor force. This contributed to a surge in the civilian labor force, which compounded the rise in the unemployment rate,” said Dr. Justine Detzel, OET chief labor market analyst.

Read the full press release.

• Keep track of the states that have returned their census forms: http://2010.census.gov/2010census/take10map/ #

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Yahoo Finance hits the nail on the head.  “Negative equity–what you have when you owe more on your home loan than the property is worth–is one of the defining features of the still-unfolding mortgage crisis. It’s a particularly nasty problem because it can lead to all sorts of unpleasant outcomes for the real estate market and the economy as a whole.

Having negative equity, which is also known as being “underwater” on a mortgage, makes homeowners more likely to end up in foreclosure. It restricts a borrower’s ability to refinance or buy another home, which in turn stifles demand for housing. It even reduces the flexibility of the labor market, since underwater homeowners are less willing to leave town to take a different job, says Stan Humphries, the chief economist at Zillow.”

Here’s the top ten cities with the most underwater home values across the country.  Some of these are expected, some are not. . .

1. Las Vegas

2. Merced, CA (close to San Fran . . .)

3. Phoenix

4. Orlando

5. Greeley, Colo. (huh?)

6. Bend, Ore. (double huh?)

7. Minneapolis-St. Paul

8. Memphis

9. Cleveland

10. Grand Rapids, Mich.

As you can see, it doesn’t matter where the community is located, there were lots of bad loans made all over the country.

The parent company of Danville-based Central Kentucky Federal Savings Bank reported a loss this week for the fourth quarter but a profit overall for 2009.

The fourth-quarter loss was $130,844, or 10 cents a share, compared with a loss of $203,512, or 16 cents a share, for the same period a year earlier. The bank attributed the losses to provisions for loan losses.  Read more at Kentucky.com.

Is your home underwater or upside down?  Not literally of course, but figuratively.  Your house is upside down if you owe more on it than it is worth.  So, let’s say you owe the bank $200,000.00, but the house is only worth $150,000.00.  All of a sudden you have to sell your home, you have to move, or for some other reason, you have to unload it quickly.  What do you do?

“Deutsche Bank (Stock symbol: DB) made a big splash last month when it predicted that 50% of U.S. homes would be underwater – what banks call “negative equity” – by 2011.”  Read more.
It certainly seems that many home owners in this situation are just letting their home go back to the bank in foreclosure.  However, while this may be a short term fix, there are significant problems.  First and foremost is the glut of foreclosed properties on the market.  All of these homes just sitting there cause more home values to fall.  It becomes harder to sell the house later.  Your neighbor’s home value will drop.  Take a look at Detroit.
Then there is the problem with your own credit.  A foreclosure on your credit report lasts for quite some time, thereby affecting you for many years to come.  In addition, you may have to go ahead and file bankruptcy, which is another black mark against your credit.

From the New Jersey News Room: “If your lender forecloses on your home and sells it for a price that’s insufficient for the lender to recoup the unpaid balance of your loan, the uncollected amount or “deficiency” can haunt you. If you’re located in one of the many states that allow lenders to collect deficiency judgments, debt collectors can pursue you for years, perhaps getting garnishments on your employment income or attaching bank accounts for your unpaid debt. And, of course, your credit rating is negatively impacted, making credit more expensive and difficult to get.”

So what’s the answer?  Well, if you are making enough to continue paying for your mortgage, then do so.  No reason to let it go back at this point. If you can ride out the downturn of home prices, it is most likely that your house’s value will rise again.

If you lose your job, or something else happens that prevents you from making your mortgage payment, then contact your bank immediately.  It may have a program that you qualify for to get assistance.  Or they may even be able to lower your mortgage payment.

You never know until you ask.