Real Estate Information

In a move that could make foreclosed properties more attractive to investors and increase the number of homes available to first-time buyers, the federal government is temporarily lifting a prohibition against providing FHA mortgage insurance for homes that are resold within 90 days.  The waiver on the purchase of flipped houses with FHA mortgages, which begins February 1 and is effective for one year, “will give FHA borrowers access to a broader array of recently foreclosed properties,” HUD said Friday in announcing the change.  Conditions attached to the waiver are expected to prevent what HUD called “predatory practices” by investors. 

Freddie Mac Chief Economist, Amy Cutts predicts interest rates will increase to 6% by end of 2010. Her predictions are bearing fruit, this week interest rates creeped over 5% from a 4.75% low just weeks ago.

She statest that "extraordinary resources have been put into keeping rates down and it's hard to imagine they can go lower than they are now. Anything you get under 5% now is a gift at this point."

USA Todayreports that 1.7 million homeowners are on the verge of losing their homes. This inventory, referred to as "shadow" inventory will continue to weigh down prices in the upcoming years. One year ago this number was 1.1 million and this shows that lenders are not stemming the tide of foreclosures through modifications and workout programs. Economists expect the 1.7M number to rise in the next year.

Markets are getting pounded with homeowners walking away from their homes due to unemployment, hardships, or extreme negative equity. It's a mixed bag of good and bad news with home prices showing stablizing or minimally gaining to understanding that we are in the eye of the hurricane and still need to come out the other side.

If you have questions on foreclosure, loan modification or short sales please visit my site at www.ishortsaleaz.com for all the information you could want and more.

While we have seen temporary loan modifications (90-day loan modifications or trial modifications) soar there has been little permanent relief for troubled homeowners. Only 4% of troubled homeowners have been approved for a permanent loan modification per the Treasury Department this week. This news has prompted the Obama administration to start pressuring servicers to do more for stuggling homeowners. Bank of America has only converted 98 homeowners into permanent loan modifications versus 4,000 from JP Morgan Chase. However, those are only a small fraction of applicants who are trying to get moved from trial loan modification to permanent.

Although foreclosures dropped from October to November housing experts expect foreclosures to ramp back up in the coming months. Even if the Treasury succeeds in getting more homeowners into permanent modifications a larger question remains. How many modified borrowers will go delinquent after being modified? More than 50% have defaulted on their modified loans so the success rates have been dismal. Why? Because negative equity is not being addressed. The programs implemented are addressing the wrong issue. The issue is the historic NEGATIVE equity people have in their homes. Negative equity is very tempting for homeowners to just walk away even if they can afford their home. Twenty percent of homeowners are underwater and no servicer is reducing principle to address the "real" issue. Most experts agree the foreclosure program rolled out by the administration is destined to fail because it does not address negative equity.

Gone are the days when you all you had to do to get a home loan was be able to fog a mirror. However, I speak with potential buyers each day who don't get the reality that you truly have to qualify financially for a new home loan. We are getting back to the basics folks and here is a new guideline that will obviously make some buyers unqualified to buy a home.

Effective December 12th, 2009 Fannie Mae will require a minimum credit score of 620 regardless of other loan factors and your debt to income ratios (mortgage payment + auto payment + student loans + monthly credit card payments divided by your monthly pre-tax income) to be no higher than 45%. Currently your debt ratio can be 55% of your gross income.

Fannie Mae is government owned and one of the largest investment backer of loans being originated today. This will affect lots of homebuyers. In addition, lots of other lenders follow Fannie Mae's guidelines so expect other investors/lenders to follow suit.

If your credit score is too low then start paying off credit balances to get your credit lines under 50% of the max. Don't be late on payments. You can also contact me and I can put you in touch with a company who will help you repair your credit. Remember, if you want to buy a home, DON'T rack up other bills and credit card debt. One last thing, do not let a bunch of creditors run your credit. That too will reduce your credit score.

Home prices rose slightly in September for the fourth consecutive month. The Standard & Poor's/Case-Shiller home price index of 20 major cities indicate an increase of 0.3 percent. Experts continue to worry that high unemployment and foreclosures could stifle any rebound.

The White House is stepping up pressure on lenders or servicers to help stem the tide of foreclosures. Although the Obama administration has issued guidelines and programs since early this year, main street is finding no help when calling lenders to modify their loan. The White House has come up with a new plan....publish a list of servicers who are not doing enough. Now that ought to do the trick right?

If shame was a determent then banks would not be giving out huge bonuses. Those banks were publicized and guess what? Banks are on track to give out record bonuses again this year! Why? Because Wall Street was bailed out and is has gone up over 35%! All this while main street has suffered the consequences of the risky investments of the banks.

That's the solution? SHAME???? What about penalties on the banks who took our tax money? Or strings attached to them using it to help main street? Does any of this occur to those better educated than me? What about threatening their tax reductions? They went to Ivy League schools and the best they come up with is....Shame the Servicer/Lender? Everyone knows that money talks.

Come on....who exactly is coming up with ideas? You may need some help with alternatives to foreclosure because this new IDEA is not going to work. Visit www.ishortsaleaz.com to see how we can help you navigate a possible loan modification, short sale or foreclosure.

The New York Times reports that nearly one in 10 homeowners are behind on their mortgage. That is about five million households. As I stated on previous post many banks are doing TEMPORARY 90-day loan modifications and not making a true effort in helping homeowners who need it. Many analysts believe it is highly unlikely that permanent loan modifications will be overly successful.

The overall third quarter delinquency rate is the highest ever. It is up from one in 14 mortgage homeowners in 3rd quarter of 2008. The combined percentage of foreclosed and delinquent homeowners is 14.41 percent. The top four concentrated areas with problem mortgages is California, Nevada, Arizona and Florida. The percentage of loans in foreclosure in September was 4.47 percent compared with last year at 2.97 percent.

The subprime foreclosure market has receded and majority of loans foreclosing now are traditional mortgages that were deemed the safest. Due to unemployment many homeowners are struggling to retain their home. There will be a lot more distressed supply moving in the market and it will go up the food chain to middle and high priced homes.

If you are struggling with your mortgage please go to www.ishortsaleaz.com to read about your foreclosure alternatives.

Many homeowners ask themselves and me, for that matter, this question almost every day. Short selling is a responsible alternative to walking away and can have less negative impact on you than foreclosure. However, not all homeowners are a good candidate and that is based on the type of loan you have, who your lender is, and what kind of assets you own.

With that being said, most homeowners are prime candidates for a short sale and can relieve or minimize their liability for a large sum of debt owed to a lender, even after foreclosure, or HOA or other liens on against the property. In a short sale we can typically get your liens paid by the lender.

If you want more information on what is a short sale, how to do a short sale, legal or tax possible implications, credit implications, resources for assistance, go to www.ishortsaleaz.com and read the FAQ's and other resources that will help you answer your questions.

The pace at which people fell behind on their mortgages slowed during the summer for the third consecutive quarter, but the overall delinquency rate hit another record, a new report shows.

For the three months ended Sept. 30, 6.25 percent of U.S. mortgage loans were 60 or more days past due, according to credit reporting agency TransUnion. That's up 58 percent from 3.96 percent a year ago.

Being two months behind is considered a first step toward foreclosure, because it's so hard to catch up with payments at that point.

The rate was up 7.6 percent from the second quarter. That's a much smaller jump than the 11.3 percent rise in the second quarter from the first, and the 14 percent leap seen in the quarter before that.

The statistics, which are culled from TransUnion's database of 27 million consumer records, show that mortgage delinquencies remain highest in the four states where the crisis has hit the worst.

- In Nevada, the rate reached 14.5 percent, up from 7.7 percent a year ago.

- In Florida, the rate was 13.3 percent, up from 7.8 percent last year.

- In Arizona, the rate hit 10.4 percent, up from 5.5 percent in 2008.

- In California, the rate jumped to 10.2 percent, from 5.8 percent last year.

North Dakota remained the state where mortgage holders most often paid on time, with just 1.7 percent delinquency, up from 1.4 percent last year.

TransUnion expects delinquency to rise to just short of 7 percent for the fourth quarter, compared with 4.6 percent for the 2008 fourth quarter. The rate may reach 16 percent in Nevada. Those states with the highest delinquency and foreclosure rates will likely continue to see depressed housing prices.