Properties, which are called assets by the bank, are increasing in numbers on the banks books. This shows that we are still a ways from climbing out of this type of housing market and all the government programs to curb foreclosures are failing.

Unfortunately, all government sponsored programs have very strict criteria to be eligible and are all voluntary by the banks to participate. This does not make for a winning combination to help main street America.

According to Moody, the biggest factors in the low conversion rate is failure to provide documentation to the lender and negative equity in the home. The payments offered to homeowners are not motivating enough for most homeowners to remain in their home while it is severely upside down.

Most critics have called HAMP a failure. There is a high percentage of default on the permanent loan modifications within the first six months. With high unemployment, severe negative equity, and less to be desired loan modifications, most critics don't expect it to get any better. As a matter of fact, most think the loan modification craze is running its course now that the Administration has focused on short sales as an alternative to foreclosure.

On April 5th, 2010 the HAFA program was rolled out but is voluntary by banks to participate. HAFA is a streamlined short sale process. Due to restrictions and qualification standards most homeowners will find they don't qualify for this program either.

"The angst of investors around the globe about European debt, slower growth in China, and saber-rattling on the Korean Peninsula all feed into what is known as the ‘fear trade,’” Bankrate said in its report. “That fear trade has helped bring yields on U.S. Treasury securities considerably lower and mortgage shoppers have been direct beneficiaries.”

This could be a extraordinary time to purchase a home and get an interest rate of five percent or lower! Rule of thumb, each time interest rates rise or fall one percent, then payment adjusts one 19 percent! Interest rates are expected to reach six percent this year or by end of year. So jump in now or pay 19 percent higher payment when you do decide to buy.

April 30th, 2010 was the deadline for the TAX CREDIT folks! To receive the tax credit you have to LIVE in the home. You had to have a signed and official purchase contract on a home by midnight on 4/30/2010 to receive the tax credit. Do you think this would contribute to an uptick in primary home buyers for the month of April?

Now, I don't want to be a Debbie Downer on the housing market. There are some remarkable positives going on. Loan rates are so low that most will be kicking themselves for not buying now when they see rates 6% and higher. Guess what folks, that will happen. Why? Because it has to.....that is another blog subject though.

Another positive? Prices are LOW!!!! Housing is so undervalued right now, it is not even funny. Most people can own a home cheaper than what they pay in rent. Who doesn't want that?

Did I mention the tax breaks associated with owning a home? No, I didn't...but there are some! Just talk to your accountant!

I don't have a problem with positive housing articles, I'm a Realtor. I want positive news on housing! However, I also want you to have a clear and true picture of what is happening in the market. Don't let one month be your guide. All growth needs to be sustainable and not have government intervention. Give us a few quarters of pending home sales and all the great housing news. That will be something to tell all your friends about!

Banks cite high unemployment as a major factor in their inability to modify mortgages. That makes sense, if you don't have the income, how can you pay a mortgage?

Please remember that most economist project on a national level. Real estate is regional and local. Unfortunately, this news is not good news for us. Nationally the real estate numbers are better than what regionally and locally our real estate numbers are. For example, Arizona leads with Nevada, California and Florida for most foreclosures and price declines. So when researching your real estate news make sure your facts and figures are local and not based off national projections.

Click here to read full article: http://www.reuters.com/article/idUSN1923337220100519?type=marketsNews

Despite kicking the can down the road, not much has changed. Very little homeowners have permanent loan modifications, 2nd lien holders and PMI companies continue to hold the short sale process hostage, and our recovery has been delayed with all the stall tactics mentioned above.

Is is bad that all these foreclosures are happening? Yes and no. Itis unfortunate that people are losing their homes, neighorhoods are being blighted, prices are declining. However the bright side is, once they are worked through then the market can really recover. We HAVE to work through the foreclosures. Shutting our eyes and pretending they are not there does not make it so.

A few weeks ago Bank of America was reported to start reducing principle on mortgages. However, read a little further. They reported only on a small number of loans, sub-prime loans, and they have already targeted those homeowners.

Unfortunately, many Americans still feel like some fairy godmother is going to swoop in and rescue them from this mortgage nightmare. However, you need the facts, the real facts to make a good financial decision.

If you want a REAL understanding of what is going on and if help is on it's way to you, contact me and let's discuss your situation.

It is estimated that one million homeowners will be aided by the loan modification program, however, the program had estimated four million when implemented. It is falling way short of that goal. In addition, lots of loan modifcations are only for five years and critics complain that the program is just kicking the foreclosure can down the road for most homeowners.

For every one homeowner saved, using $50 billion in TARP funds, 10 homeowners have gone into foreclosure. Strict guidelines that most people do not meet and lack of lender motivation is blamed for the failure.

As with all government intervention certain criteria applies. Please call me to discuss if you are seeking alternatives to foreclosure.

Consultant at Oliver Wyman calculated that in 2008 17 percent of owners were defaulting. Some chose to default despite that they could afford the mortgage. This trend is increasing as homeowners realize it will take ten to twenty years, sometimes more to break even on their homes. For those close to retirement, they are thinking walking away is their best option.

First American estimates that it would take $745 billion, the same amount as the first stimulus pacakge, to restore all underwater homeowners to the break even point.

A big complaint about "bailing" out homeowners are from the homeowners who are current on their mortgage and are not likely to walk away. They feel this is unfair to them. However, according to Michael Barr, Assistant Treasury Secretary for financial institutions, doing nothing would be another blow to the already fragile economy.

Source: The New York Times, David Streitfeld (02/022010)

Government programs aimed at helping homeowners stay in their home have failed. Only one percent of the four million loans have been targeted for loan modification. It appears the government has all but given up on trying to get banks to modify loans. Starting April 2010 the Treasury has implemented timeframes to expediate short sale approvals for select banks.

Please visit www.ishortsaleaz.com to read about avoiding foreclosure and helping you answer your questions on what's best for your family.

However, home prices are still dropping to some degree, according to ASU. The year-to-year declines have been going on for a record 32 consecutive months. Home prices peaked in mid-2006.

Of course, this is good news but is all depending on the economy and job market. If employment continues to slide then home values could continue to decline.

Without new jobs to draw more residents to fill almost 80,000 area homes left empty by the recession, home prices will remain depressed. The State is not expected to see pre-recession employment levels for another four to five years.

To read the full article click here:http://www.azcentral.com/business/realestate/articles/2010/01/21/20100121urbanlandonline0122.html

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."

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.

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.

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.