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azcats_01
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Posted: Sun Jul 26th, 2009 07:10 pm |
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Refinancing is not as easy as it should be, 07/16/2009
By HOLDEN LEWIS, bankrate.com
Do you want to refinance your mortgage under the Home Affordable Refinance program? Good luck. The plan is confusing and confounding.
For example, under the program, lenders are supposed to refinance loans with mortgage insurance. But they are evasive about whether they will.
Another example: Last month, Fannie Mae and Freddie Mac announced that they would refinance mortgages at up to 125 percent of current market value. Sounds great -- but borrowers will have to wait.
Background: In February, the Obama administration announced the Making Home Affordable initiative to prevent foreclosures. A major part of the plan is the Home Affordable Refinance program, or HARP. It's designed to let homeowners refinance, even if they owe more than the house is currently worth because of a decline in property value.
Initially, the Home Affordable Refinance program was set to allow people to refinance for an amount up to 105 percent of the current value of the home, as long as the mortgage was owned or guaranteed by Fannie Mae or Freddie Mac. (See Bankrate's loan-to-value calculator.)
Last month, that upper limit was raised to 125 percent, meaning that someone could refinance for $125,000 on a house whose appraised value has plunged to $100,000.
But things haven't turned out as planned. The Obama administration had expected up to two million homeowners to take advantage of the refinancing program by its expiration date of June 10, 2010. But four months into the 16-month program, about 13,000 refinances had been completed, meaning that it was on track to help 52,000 homeowners, or about 1,950,000 homeowners shy of the administration's goal.
With that as a backdrop, the following is a list of misconceptions that homeowners have about the refinancing program and what's really going on.
Misconception: If your mortgage is owned or guaranteed by Freddie Mac, you have to refinance with the current servicer.
The reality: From the outset, Fannie Mae's policy was to let homeowners switch to another lender if they wanted to. But Freddie Mac required borrowers to stick with the current servicer.
Now Freddie has quietly changed its policy. Homeowners with Freddie-owned mortgages will be able to refinance with the lender of their choice. Freddie will begin taking delivery of these switched-lender refis beginning Sept. 1.
Misconception: All mortgage servicers are required to participate in the Home Affordable Refinance program.
The reality: Mortgage companies don't have to participate. One holdout is Provident Funding. The Burlingame, Calif., lender was the eighth-largest mortgage originator in the first quarter of 2009, according to National Mortgage News.
Provident's no-refi policy has been problematic for customers with Freddie-owned loans because of Freddie's initial ban on refinancing with another lender. Searching for a loophole, one Bankrate reader found a section of the Making Home Affordable Web site that read, "In addition, all servicers for loans owned by Fannie Mae and Freddie Mac are required to participate." But that sentence referred to the mortgage modification program, not the refinance program.
Misconception: Fannie and Freddie now allow refinances for up to 125 percent of loan to value.
The reality: Not yet. Both companies allow refinances right now of mortgages of up to 105 percent of the home's value. Here's where it gets complicated: Fannie and Freddie have different start dates for when they'll begin buying mortgages with loan-to-value ratios between 105 percent and 125 percent.
Fannie Mae says it will start buying those higher-LTV loans beginning Sept. 1. Freddie Mac says it will start buying them Oct. 1. Lenders could process and close those loans now if they wanted to, but they don't want to. They'll wait until Fannie and Freddie are buying those loans.
Misconception: Under the Home Affordable Refinance program, lenders are refinancing loans with mortgage insurance.
The reality: If major lenders are doing refis of loans with mortgage insurance, they're being discreet about it. Bank of America, Chase and CitiMortgage did not respond to inquiries, but if e-mails from Bankrate readers are to be believed, none of those big lenders is refinancing loans with mortgage insurance.
A Wells Fargo spokesman replied: "We are not offering HARP refinances to borrowers who have mortgage insurance on their existing loans at this time. Unfortunately, I'm not able to provide any insight as to when we may be able to do so."
Bank of America has implied that it will refi insured loans "as systems become operational."
Other lenders have been tight-lipped about whether they will refinance loans with mortgage insurance at all.
When the Obama administration promised to let people refinance their home loans but keep the same mortgage insurance policy, it was telling the insurance industry to do something that it's not set up to do. It's akin to selling your old car and buying a new one, and expecting the auto insurer to transfer the policy without changing one word of it.
The mortgage insurance companies say they have the procedures in place. The lenders are saying almost nothing. Neither side is pointing fingers at the other. Without a blamefest, it's hard to discern what's going on.
Misconception: All mortgage insurance is the same. Once lenders start refinancing insured loans, those homeowners are good to go.
The reality: Most mortgage insurance covers individual loans. These are called "flow" policies. But sometimes investors buy "pool" or "portfolio" policies that cover a batch of loans. A few readers have e-mailed Bankrate complaining that their lenders have told them that they can't refinance under the Home Affordable program because their loan is covered by pool insurance.
This one rests with Fannie and Freddie, who say they are working on the pool insurance issue.
Misconception: All of the above is straightforward enough. Someone with a Fannie-owned loan and mortgage insurance will be able to refi the loan with another lender at, say, 120 percent loan-to-value, as of Sept. 1.
The reality: Nope, the borrower in the above situation will have to stay with the current servicer. Fannie allows you to refinance with another lender, as long as the loan-to-value ratio is 105 percent or less. But when Fannie allows refis above 105 percent LTV beginning in September, it will require borrowers to refinance with their existing servicer.
Freddie, on the other hand, says it will allow borrowers to switch lenders regardless of the loan-to-value ratio, whether the loan has mortgage insurance or not.
The mortgage industry torpedoed the economy by persuading consumers to get loans that they didn't understand. Now the industry is coming up with rescue plans that consumers don't understand.
http://www.bankrate.com/finance/mortgages/want-to-refinance-know-the-details-1.aspx
http://www.scrippsnews.com/node/44653
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Bambi
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Posted: Sun Jul 26th, 2009 04:55 pm |
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Fri, Jul 24
As a direct result of NAR's recent meetings with the New York Attorney General’s office, the Federal Housing Finance Agency, and Fannie Mae, both Freddie Mac and Fannie Mae this week issued new guidance to all lenders on the Home Valuation Code of Conduct. The alert clarifies two very important points that we raised in our meetings with officials. First, it states that lenders should use appraisers who have clear experience in the geographic area. Second, it clarifies that appraisers are not prohibited from talking to real estate agents.http://www.fhfa.gov/webfiles/14611/hvcc_NOTICE_7_22_09F.pdf In addition to this guidance, both Fannie Mae and Freddie Mac re...
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Bambi
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Posted: Sun Jul 26th, 2009 02:16 pm |
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LTA. I am so sorry that you are encountering this burden. We just have to evaluate our situations as your family is doing, and do what's best for our families. You need to get an appraised value on your home that is accurate. And it changes every day, depending on the offers being accepted, so don't settle on what you hear today. Some realtors are not that familiar with pricing homes out here, so be sure they have short sale skills and training in that market, otherwise they might price it very low, just to guarantee a sale. That's what brings the prices down.
It will go back up, trust me, and it won't take 10 years. The return of public confidence is what brings us back to spending our money. I've seen it happen before where many were feeling as yourself, then "something" kicked into our psyche, and we were back up on top of things again. Maybe we were just tired of being depressed. Just as quickly as our confidence left us, it returned with great zeal. Remember in 2007, when everyone seemed to just stop being engaged in buying and selling? I do. It's like someone turned off the spigot over night. Look for it to return that way. Keep your hope alive and well as without it despair will rein over your decisions.
Competition and innovation will bring those prices back up. Competition for the same buyer is what motivates us and that's healthy. It will kick back in soon.
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Lovethisarea
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Posted: Sun Jul 26th, 2009 10:51 am |
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Bambi wrote:
Lovethisarea wrote: Bambi wrote:
I just put a relatively new 1400 sq.ft. home in excellent condition under contract, on behalf of a buyer, for $63,000. It is located in Skyline Ranch. It just came on the market, and my buyer's offer was first in line, with 7 others following. First offer gets the deal. Let's hope our short sales continue to dwindle down in numbers and sell quickly, so we can get back to business as usual as these prices can't be competitive in a normal market.
Wow $63,000 huh... thats really depressing. Whoever buys it is sure lucky Skyline Ranch is really nice... I live there. I love the neighborhood... just hate how much we owe.
It's very distressing, but this too will pass. Many are like yourself, and are just waiting for the values to catch up with the amounts owed. Same thing is going on in the stock market. Many of those people's values were completely wiped out....not just half, but all. Now the stock market is climbing. So shall the real estate market. Let's get rid of these short sales as quickly as we can. I wish a whole group would just come in and buy them all up at those prices. Then we could start climbing again. Some are buying them at these low prices, then raising the price up another $10k or $20k, to make a quick profit. They still sell at that higher price as it is still below market, and many many people are waiting in line for a sale with the word DEAL in front of it.
We will come back and your prices will rise once again, even higher than your present mortgage as supply and demand will govern those prices, instead of deals.
Remember LTA. Your screen name is Love This Area. Don't give up hope on this area. We'll come back even stronger. Watch. Be encouraged.
Someone bought a home on my street and then put it on the market and its been sitting on the market for a pretty long time... flipping a house doesn't seem to always work in this market with prices still falling. Another house on my street has been up for rent for quite a long time (I assume by an investor that bought low)... really nice house, granite counter, 2,000 sq ft... but in this market I guess people don't think its worth the $875 for rent. 
The assessor said my 2500 sq ft/ 3 car garage home was estimated to be worth $125,000 the beginning of this year... a realtor told me $110,000 a few months ago and now another realtor told me $90,000 this month (and we have quite a few upgrades). My husband is done... he has been since shortly after he found out how much our home was worth and that was Several months ago. I am the one that has a problem with leaving, I love my neighborhood and the area, thinking about it hurts a lot but sooner or later if things continue on this route I'm going to have to suck it up and go through with it. He likes our neighborhood and area too but not enough to destroy his future... at $90,000 we now owe $170,000 more then its worth.
I would like to believe values are going to climb to what they were, but I just don't anymore... maybe in 10+ yrs. I think there may be another wave of foreclosures... this time mostly investors... next time homeowners.
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Bambi
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Posted: Sat Jul 25th, 2009 03:56 pm |
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Early in the week, we were primed for rates to continue to improve…and they did…until Thursday when the Feds announced that they would be auctioning off roughly $115 Billion in Notes next week. This is in addition to the $90 Billion in Treasury Bills that is usually auctioned off on a weekly basis. As we’ve mentioned several times since the inception (January 2009) of the Fed’s program to keep rates low, any time we have an auction with a low turnout of foreign and private investors, rates deteriorate. But the few times we’ve had a healthy turnout, rates have improved.
With so much paper up for auction next week, investors went ahead and assumed its best to move their mortgage backed security investment money to stocks yesterday, which is why we watched the Dow close above 9,000 for the first time since January 6th. In turn, we watched mortgage backed securities (rates) lose all the ground gained earlier in the week but all in all we just went back to the same rates we had on Monday.
What Does Next Week Have in Store?
With much of the “shock” of the Fed’s announcement priced into rates yesterday, I think we can expect to go on another roller coaster ride next week heading into the auction. Initially, traders will be selling their mortgage backed securities in order to buy at a lower price which will hurt mortgage rates early in the week. However, once the auction gets under way, we can expect it to go well given the weak economic and employment reports that are expected to follow which will improve mortgage pricing again towards the end of the week.
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Bambi
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Posted: Fri Jul 24th, 2009 07:12 pm |
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Lovethisarea wrote: Bambi wrote:
I just put a relatively new 1400 sq.ft. home in excellent condition under contract, on behalf of a buyer, for $63,000. It is located in Skyline Ranch. It just came on the market, and my buyer's offer was first in line, with 7 others following. First offer gets the deal. Let's hope our short sales continue to dwindle down in numbers and sell quickly, so we can get back to business as usual as these prices can't be competitive in a normal market.
Wow $63,000 huh... thats really depressing. Whoever buys it is sure lucky Skyline Ranch is really nice... I live there. I love the neighborhood... just hate how much we owe.
It's very distressing, but this too will pass. Many are like yourself, and are just waiting for the values to catch up with the amounts owed. Same thing is going on in the stock market. Many of those people's values were completely wiped out....not just half, but all. Now the stock market is climbing. So shall the real estate market. Let's get rid of these short sales as quickly as we can. I wish a whole group would just come in and buy them all up at those prices. Then we could start climbing again. Some are buying them at these low prices, then raising the price up another $10k or $20k, to make a quick profit. They still sell at that higher price as it is still below market, and many many people are waiting in line for a sale with the word DEAL in front of it.
We will come back and your prices will rise once again, even higher than your present mortgage as supply and demand will govern those prices, instead of deals.
Remember LTA. Your screen name is Love This Area. Don't give up hope on this area. We'll come back even stronger. Watch. Be encouraged.
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Lovethisarea
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Posted: Fri Jul 24th, 2009 06:54 pm |
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Bambi wrote:
I just put a relatively new 1400 sq.ft. home in excellent condition under contract, on behalf of a buyer, for $63,000. It is located in Skyline Ranch. It just came on the market, and my buyer's offer was first in line, with 7 others following. First offer gets the deal. Let's hope our short sales continue to dwindle down in numbers and sell quickly, so we can get back to business as usual as these prices can't be competitive in a normal market.
Wow $63,000 huh... thats really depressing. Whoever buys it is sure lucky Skyline Ranch is really nice... I live there. I love the neighborhood... just hate how much we owe.
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Bambi
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Posted: Fri Jul 24th, 2009 05:34 pm |
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starleen wrote: Bambi wrote: I just put a relatively new 1400 sq.ft. home in excellent condition under contract, on behalf of a buyer, for $63,000. It is located in Skyline Ranch. It just came on the market, and my buyer's offer was first in line, with 7 others following. First offer gets the deal. Let's hope our short sales continue to dwindle down in numbers and sell quickly, so we can get back to business as usual as these prices can't be competitive in a normal market.
Great, this is turning into a re-do of the first fiasco - investors from out of town in line to snatch up perceived bargains. Neighborhoods suffer, first time buyers lose out in the competition and investors drive up prices artificially, and here we go again. One born every minute.
Good work for realtors and loan sharks, they just keep reaping over and over off the same properties.
Good work for realtors and loan sharks, they just keep reaping over and over off the same properties.
That's an unfair statement about my profession imo. It's also untrue. This is not happening the same as it did before. You are making wrong assumptions and stating them as fact. Revise your assessment please, by doing some research, then come back and make your factual assessment for what's happening in the real estate market in the San Tans.....a place you don't live in. Or preface your posts by stating it's speculation on your part, so people reading this won't go away with the wrong idea about realtors and lenders as a profession.
Laws are being put in place to prevent history from repeating itself. Read up on those why don't you, and bring them back to the rest of us to look at, instead of condemning those who want to generate sales to bring us out of this economic real estate slump. We have to get rid of the existing inventory, and I don't care who buys it. Just that they buy it and remove those depressed prices from the marketplace.
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starleen
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Posted: Fri Jul 24th, 2009 07:59 am |
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Bambi wrote: I just put a relatively new 1400 sq.ft. home in excellent condition under contract, on behalf of a buyer, for $63,000. It is located in Skyline Ranch. It just came on the market, and my buyer's offer was first in line, with 7 others following. First offer gets the deal. Let's hope our short sales continue to dwindle down in numbers and sell quickly, so we can get back to business as usual as these prices can't be competitive in a normal market.
Great, this is turning into a re-do of the first fiasco - investors from out of town in line to snatch up perceived bargains. Neighborhoods suffer, first time buyers lose out in the competition and investors drive up prices artificially, and here we go again. One born every minute.
Good work for realtors and loan sharks, they just keep reaping over and over off the same properties.
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Bambi
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Posted: Thu Jul 23rd, 2009 11:06 pm |
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| I just put a relatively new 1400 sq.ft. home in excellent condition under contract, on behalf of a buyer, for $63,000. It is located in Skyline Ranch. It just came on the market, and my buyer's offer was first in line, with 7 others following. First offer gets the deal. Let's hope our short sales continue to dwindle down in numbers and sell quickly, so we can get back to business as usual as these prices can't be competitive in a normal market.
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Bambi
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Posted: Thu Jul 23rd, 2009 10:59 pm |
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Revised TILA Disclosure Requirements Take Effect on July 30, 2009
Lenders will be subject to new disclosure requirements for mortgage loans under the Federal Reserve Board Truth in Lending Regulation (Reg Z). The new requirements apply to loan applications filed on or after July 30, 2009. The new rules are complex and compliance will be a challenge for lenders. Here are key highlights of the changes:
-- The new requirements apply to all mortgages secured by a borrower’s home, including primary and second homes and refinancings. Investor loans continue to be exempt.
--Lenders must give good faith estimates of mortgage loan costs within 3 business days after the consumer applies for a loan (early disclosure). The lender may not collect any fees before the disclosure is provided, except for a reasonable fee for obtaining a credit report.
--The closing may not take place until expiration of a 7 day waiting period after the consumer receives the early disclosure.
--If the annual percentage rate (APR) increases by more than 0.125 percent, the lender must provide a corrected disclosure to the borrower and wait an additional 3 business days before closing the loan. The APR includes not only the interest rate on the loan but certain other costs related to settlement, so it will be important for any fees that affect the APR to be as accurate as possible, as early as possible, to minimize the need for a corrected TILA disclosure.
--The consumer may modify or waive both waiting periods for a documented personal financial emergency, but must receive the disclosures no later than the time of the modification or waiver.
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Lovethisarea
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Posted: Mon Jul 20th, 2009 09:31 pm |
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azsunshine wrote:
Lovethisarea wrote: Maybe people shouldn't be able to take out large home equity loans when value skyrockets under a certain time period (or maybe not at all!) and maybe people buying 2nd homes should be putting 50% + down on their 2nd homes.
Guess who's buying most of these short sales? Glad that investors are getting great deals! Investors played a big role in driving up prices, then many walked away driving prices down and now many are buying the home you owe $300,000 on, for $150,000 or less.
To pay off the extra $150,000+ the homeowner owes I'm guessing it would take 15-20 yrs... if your 35 you will only be 50-55 and then you can start over right? I feel so bad for those in this situation with children... I hope prices go back up but it's just hard to believe they will ever be what they were.
Things have definitely changed thats for sure.
I like that idea. 50% down if its your second home if your first is not paid off. What really gets me is that I hope its not the same investors that walked away from Home A and washed their hands of it, to only pick up House B a short time later. I have heard stories of that happening.
I'm sure it has and it sickens me.
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Lovethisarea
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Posted: Mon Jul 20th, 2009 09:23 pm |
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Bambi wrote:
The investors already have to put more down and their loans are known as investor loans. 25% in most cases, with a strong credit history. 50% down restricts their ability to leverage their money, and they will find another source to put their money into. Removing them from the playing field doesn't necessarily mean it will help matters. Many of those "investors" buying these homes are parents, buying for their children's future. They rent it until the kids are at an age to benefit by the proceeds realized, therefore either selling it, or they move into it and either pay their parents, or refinance it. A home is still considered a good overall investment, regardless of your status.
Prices on homes have gone up and down over my lifetime, as have the interest rates. It will hurt us for a short period, and some will fail, and some will succeed. It all comes out in the wash in time, as it always had, with a different group of players implementing different rules. Causing the Boom/Bust. We have to look to reforming many of our policies in the real estate world and banking industries, as so much of our economy is tied to the housing market. And now we have our legislature considering once again, taxing the sale of a property.....another "sales tax." The R.E. industry is fighting it.
Just ride out this storm as long as you can, and you will be right back up there in value again....trust me. Supply and Demand will once again rule the decisions and raise the anty, once our fears begin to subside. In the meantime, that market has to have assistance as it attempts to recover from over indulgence.....once again. I went thru this with the Savings and Loan companies. We all thought our mortgage resources had dried up with that fiasco. But not so. We bounced back.....only to go thru it again and again, and here we are, once again, loosing equity. Now, waiting for it to bounce back is the problem as our anxiety levels rise to high levels of discomfort. 
Just hang in there.
With as many investors that walked away I can't see how they put down 25%... unless this is something new that they have to do now, they must have found ways around it. I believe values will go up, prices are too low right now... but I don't believe that they will go up to what they were during the boom.... not for a very long time anyway. I know prices have gone up and down in the past but I don't think it was like this. Comparing values to what they were the year before the boom I'm guessing my home should be worth around $170,000 ... if and when values go back up thats probably around the price they will go back up to.... better then the $110,000 it is going for now but still not the $260,000 I owe.
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Bambi
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Posted: Sun Jul 19th, 2009 06:47 pm |
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Loan Workout Hierarchy
Home Affordable Modification Program
For Fannie Mae Conventional Loans
https://www.efanniemae.com/sf/servicing/pdf/loanworkoutfactsheet.pdf
https://www.efanniemae.com/sf/mha/mhamod/pdf/hampsummary.pdf
https://www.efanniemae.com/sf/mha/mhamod/
Check to see if you qualify.....
Last edited on Sun Jul 19th, 2009 06:49 pm by Bambi
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Bambi
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Posted: Sun Jul 19th, 2009 05:55 pm |
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The investors already have to put more down and their loans are known as investor loans. 25% in most cases, with a strong credit history. 50% down restricts their ability to leverage their money, and they will find another source to put their money into. Removing them from the playing field doesn't necessarily mean it will help matters. Many of those "investors" buying these homes are parents, buying for their children's future. They rent it until the kids are at an age to benefit by the proceeds realized, therefore either selling it, or they move into it and either pay their parents, or refinance it. A home is still considered a good overall investment, regardless of your status.
Prices on homes have gone up and down over my lifetime, as have the interest rates. It will hurt us for a short period, and some will fail, and some will succeed. It all comes out in the wash in time, as it always had, with a different group of players implementing different rules. Causing the Boom/Bust. We have to look to reforming many of our policies in the real estate world and banking industries, as so much of our economy is tied to the housing market. And now we have our legislature considering once again, taxing the sale of a property.....another "sales tax." The R.E. industry is fighting it.
Just ride out this storm as long as you can, and you will be right back up there in value again....trust me. Supply and Demand will once again rule the decisions and raise the anty, once our fears begin to subside. In the meantime, that market has to have assistance as it attempts to recover from over indulgence.....once again. I went thru this with the Savings and Loan companies. We all thought our mortgage resources had dried up with that fiasco. But not so. We bounced back.....only to go thru it again and again, and here we are, once again, loosing equity. Now, waiting for it to bounce back is the problem as our anxiety levels rise to high levels of discomfort.
Just hang in there.
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azsunshine
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Posted: Sun Jul 19th, 2009 04:41 pm |
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Lovethisarea wrote: Maybe people shouldn't be able to take out large home equity loans when value skyrockets under a certain time period (or maybe not at all!) and maybe people buying 2nd homes should be putting 50% + down on their 2nd homes.
Guess who's buying most of these short sales? Glad that investors are getting great deals! Investors played a big role in driving up prices, then many walked away driving prices down and now many are buying the home you owe $300,000 on, for $150,000 or less.
To pay off the extra $150,000+ the homeowner owes I'm guessing it would take 15-20 yrs... if your 35 you will only be 50-55 and then you can start over right? I feel so bad for those in this situation with children... I hope prices go back up but it's just hard to believe they will ever be what they were.
Things have definitely changed thats for sure.
I like that idea. 50% down if its your second home if your first is not paid off. What really gets me is that I hope its not the same investors that walked away from Home A and washed their hands of it, to only pick up House B a short time later. I have heard stories of that happening.
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Lovethisarea
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Posted: Sun Jul 19th, 2009 02:32 pm |
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Maybe people shouldn't be able to take out large home equity loans when value skyrockets under a certain time period (or maybe not at all!) and maybe people buying 2nd homes should be putting 50% + down on their 2nd homes.
Guess who's buying most of these short sales? Glad that investors are getting great deals! Investors played a big role in driving up prices, then many walked away driving prices down and now many are buying the home you owe $300,000 on, for $150,000 or less.
To pay off the extra $150,000+ the homeowner owes I'm guessing it would take 15-20 yrs... if your 35 you will only be 50-55 and then you can start over right? I feel so bad for those in this situation with children... I hope prices go back up but it's just hard to believe they will ever be what they were.
Things have definitely changed thats for sure.
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Lovethisarea
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Posted: Sun Jul 19th, 2009 01:52 pm |
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bobthebuilder wrote:
Maybe they don't cover this in high school anymore but if you aren't buying a house to hold on to it for a while, then maybe you should have rented instead. People who are mobile should keep related investments liquid and put their long term money into things that aren't affected by their lifestyle.
It's pretty basic stuff.
Someone should have let the investors know. Maybe the banks should go after the investors that walked away to get their losses back.... I've heard more investors have been walking away then homeowners.
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Lovethisarea
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Posted: Sun Jul 19th, 2009 05:43 am |
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Bambi wrote:
Just a quick insert here az. We used to view our homes as long term investments. Meaning, we rode out these ups and downs as we stayed in our homes longer...30 years or more and at least for the economic life of the loan. Now, we're a much more mobile society, living only short term in most places. So, it's kind of like the stock market. You invest long term, you stay in and go with the ups and downs. You invest short term, the risks are higher and so are the consequences.
But.....since the majority of our population operates from the short term perspective, and our population is so enormous now, perhaps assistance is needed to keep us afloat, as we ride this out. The banks are cutting their losses by selling for alot less than the original mtg....cashing out. Why not allow their investors to stay in, modifying that mortgage for the person who has a proven track record? The current owner. That's not government intervention. That's the lender intervening on behalf of the consumer. And the payoff is greater, as it didn't sell for $45k, but continued at $90k. with the original owner.
That's the perspective I look at it from.
I would be very surprised if the banks would do that. I tried to get the current interest rate for my loan and they wouldn't even do that. As for their "programs" we have a Conventional loan and they are only for FHA loans. I was actually told by my bank that people in my situation that owe more then their homes are worth and have conventional loans usually just Short Sale! How nice is that? My bank actually telling me I should short sale! I don't get it... why would they WANT me to do that?
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Lovethisarea
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Posted: Sun Jul 19th, 2009 04:52 am |
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azsunshine wrote:
Lovethisarea wrote: If it is our responsibility to stick with our mortgages, it is the banks responsibility to come to a compromise! It may be our fault for buying a home for more then it was worth but, it is also the banks fault for lending us more then our homes are worth. They made a bad investment just as much as we did. Maybe they should have done more research before lending so many people twice as much as what they would have 1 year prior, to buy a home. We're not going to suffer in this alone.... we aren't the only ones to blame.
Those who bought during the boom are stuck paying a mortgage from when things were good, things are bad now...... wages are down (and unemployment is up), 401k's are way down, etc.
IMO The banks are to blame for lending money to people who couldn't afford the payment at that time. The banks didn't lend for more than it was worth (at the time). Everything is timing. Should you be able to go back to the grocery store for the steak you ate last year just because the prices are down now--no! Say you had a used vehicle you sold to your neighbor last year and you graciously let him pay by the month--should he be able to come back to you now and say he wants your car at 50% less than what you agreed to?
Also if the economy were to come back say next year full boom again prices are at 400 K for a house--should the bank that graciously lowered your principal be out that money when you sell it for 400K? Reducing mortgages is way better than foreclosure IMO just put some restrictions if the economy comes back and they sell within a certain time period.
A House is the biggest investment that most will ever make in their lives... a steak and a car is not.
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bobthebuilder
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Posted: Sat Jul 18th, 2009 08:39 pm |
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Maybe they don't cover this in high school anymore but if you aren't buying a house to hold on to it for a while, then maybe you should have rented instead. People who are mobile should keep related investments liquid and put their long term money into things that aren't affected by their lifestyle.
It's pretty basic stuff.
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Bambi
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Posted: Sat Jul 18th, 2009 07:31 pm |
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Just a quick insert here az. We used to view our homes as long term investments. Meaning, we rode out these ups and downs as we stayed in our homes longer...30 years or more and at least for the economic life of the loan. Now, we're a much more mobile society, living only short term in most places. So, it's kind of like the stock market. You invest long term, you stay in and go with the ups and downs. You invest short term, the risks are higher and so are the consequences.
But.....since the majority of our population operates from the short term perspective, and our population is so enormous now, perhaps assistance is needed to keep us afloat, as we ride this out. The banks are cutting their losses by selling for alot less than the original mtg....cashing out. Why not allow their investors to stay in, modifying that mortgage for the person who has a proven track record? The current owner. That's not government intervention. That's the lender intervening on behalf of the consumer. And the payoff is greater, as it didn't sell for $45k, but continued at $90k. with the original owner.
That's the perspective I look at it from.
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azsunshine
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Posted: Sat Jul 18th, 2009 07:09 pm |
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Lovethisarea wrote: If it is our responsibility to stick with our mortgages, it is the banks responsibility to come to a compromise! It may be our fault for buying a home for more then it was worth but, it is also the banks fault for lending us more then our homes are worth. They made a bad investment just as much as we did. Maybe they should have done more research before lending so many people twice as much as what they would have 1 year prior, to buy a home. We're not going to suffer in this alone.... we aren't the only ones to blame.
Those who bought during the boom are stuck paying a mortgage from when things were good, things are bad now...... wages are down (and unemployment is up), 401k's are way down, etc.
IMO The banks are to blame for lending money to people who couldn't afford the payment at that time. The banks didn't lend for more than it was worth (at the time). Everything is timing. Should you be able to go back to the grocery store for the steak you ate last year just because the prices are down now--no! Say you had a used vehicle you sold to your neighbor last year and you graciously let him pay by the month--should he be able to come back to you now and say he wants your car at 50% less than what you agreed to?
Also if the economy were to come back say next year full boom again prices are at 400 K for a house--should the bank that graciously lowered your principal be out that money when you sell it for 400K? Reducing mortgages is way better than foreclosure IMO just put some restrictions if the economy comes back and they sell within a certain time period.
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Lovethisarea
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Posted: Sat Jul 18th, 2009 06:07 am |
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If it is our responsibility to stick with our mortgages, it is the banks responsibility to come to a compromise! It may be our fault for buying a home for more then it was worth but, it is also the banks fault for lending us more then our homes are worth. They made a bad investment just as much as we did. Maybe they should have done more research before lending so many people twice as much as what they would have 1 year prior, to buy a home. We're not going to suffer in this alone.... we aren't the only ones to blame.
Those who bought during the boom are stuck paying a mortgage from when things were good, things are bad now...... wages are down (and unemployment is up), 401k's are way down, etc.
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azsunshine
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Posted: Sat Jul 18th, 2009 01:21 am |
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Lovethisarea wrote: Do you think there will be a second wave of Foreclosures?
I did some research through the assessor, there are 21 homes on my street. 4 are new owners who bought in 08' and 09', the other 17 are original owners. Out of the 4 new owners 3 paid more then their home is worth... between 10,000 and 55,000. The 17 original owners paid between 101,000-165,000 more then their homes are worth. This is according to assessor values. Only 3 homes are currently for sale on my street.
I am not so worried about the 3 of 21 who paid 10-55 thousand more then their homes are worth... it is the 17 of 21 who paid 101-165 thousand more then their homes are worth. I am one of them and I have to say it doesn't seem to make much sense that I pay $2,000 a month for my mortgage when rent for my home would be about $1,000
It sucks that the only people that will get a break is the ones that either walk away or somehow get the bank to lower their principal. Why shouldn't everyone get a lower principal? IN MY OPINION ONLY the ones that just walk away or get a lower principal should have the original principal back again if they sell say within 7 years. The ones that walk away should have a floating lein placed with the amount of shortage placed on their new home -time period say 7 years. That may stop the people that just get a different home because "hey the neighbors are only paying 700 to my 1500" when they could and should keep their obligation AND the ones that really can't pay well guess they need to rent for 7 years.
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Bambi
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Posted: Fri Jul 17th, 2009 11:23 pm |
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Lovethisarea wrote: Do you think there will be a second wave of Foreclosures?
I did some research through the assessor, there are 21 homes on my street. 4 are new owners who bought in 08' and 09', the other 17 are original owners. Out of the 4 new owners 3 paid more then their home is worth... between 10,000 and 55,000. The 17 original owners paid between 101,000-165,000 more then their homes are worth. This is according to assessor values. Only 3 homes are currently for sale on my street.
I am not so worried about the 3 of 21 who paid 10-55 thousand more then their homes are worth... it is the 17 of 21 who paid 101-165 thousand more then their homes are worth. I am one of them and I have to say it doesn't seem to make much sense that I pay $2,000 a month for my mortgage when rent for my home would be about $1,000.
Here's your culprit. The foreclosures and the banks lack of ability to modify loans. The main risk to our growth outlook is that the home loan modification process is still not as streamlined as hoped. Unless it improves, the number of foreclosures will exceed the 3.6 million anticipated foreclosure sales this year and next, and the housing correction will be longer and more painful than projected.
We have homes in short sale escrows now because the lenders qualified them according to their own old standards for loan modifications, forcing the owners to sell their homes via short sales. For the price these lenders are getting for these short sales, they could have qualified the previous owners for that amount and modify it. The banks and lenders are still not following the rules. I think they are looking for the shortest and easiest way out and that is to bring in a cash sale, rack up the losses and walk. That's killing our values. And we out here in our area are suffering loss of equity more than any other area in the State.
We still have a 1400 sq. ft. nearly new home in Magic Ranch in escrow. It originally sold for $175k. It's under contract now for $45k. That original owner couple could have stayed in that home if the bank had agreed to modify it down tos even $90k, much less $45k. But they refused and went the easy way....look for a cash buyer by short saling it, and take it off the books. They are still going by the old rules and standards. So people are tired of dealing with them, so they "walk" hoping to start over in another time and place. It's getting to be a pattern now; walk if the bank won't modify it. We're in a Anti deficiency state so no harm done. That rule is changing and so is the criteria, so it won't be that easy to do after September.
That may force the banks to modify instead, reducing the debt, and the payment, allowing the present owner to stay in their home at half the payment, which they can now afford. However, these modifications need to be substantive to be effective. A large share of loan modifications, nearly 46%, left the monthly loan payment unchanged or higher. There has to be a higher share of modifications with reduced monthly payments for it to work, and it isn't happening. Less than 2% of modifications saw a reduction in principal. Yet, to take it to the next step and short sale it, the principal is reduced close to 50% for the new buyers.
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starleen
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Posted: Fri Jul 17th, 2009 06:41 am |
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Bambi wrote: Now; this one's for Sarah Palin..... 
Sarah Palin is not quitting. As a result of the relentless and frivolous ethics suits against her, which have been costing the State of Alaska money and time and costing her personally to the tune of half a million, she is removing herself from the formal Alaska political scene to distract her enemies from the nest, much like a sandpiper.
"When predators or humans are close to the nest, many sandpipers will exhibit a distraction display, calling vociferously, running nearby on the ground, and sometimes feigning a broken wing, all the while attempting to lure the intruder safely away from the nest."
http://science.jrank.org/pages/5957/Sandpipers.html
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starleen
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Posted: Fri Jul 17th, 2009 06:19 am |
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2 cents wrote: Think about it a little further and you will see that WE are at fault for electing those buffoons and allowing them to stay in office when they did not do our bidding.
Agreed. Elections have consequences, blah blah blah.
As for predicting foreclosure rates, can we look to the rising unemployment rate as a factor? It is a "lagging indicator" and many dominoes will fall as people are laid off.
Last edited on Fri Jul 17th, 2009 06:21 am by starleen
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Lovethisarea
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Posted: Fri Jul 17th, 2009 06:05 am |
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Do you think there will be a second wave of Foreclosures?
I did some research through the assessor, there are 21 homes on my street. 4 are new owners who bought in 08' and 09', the other 17 are original owners. Out of the 4 new owners 3 paid more then their home is worth... between 10,000 and 55,000. The 17 original owners paid between 101,000-165,000 more then their homes are worth. This is according to assessor values. Only 3 homes are currently for sale on my street.
I am not so worried about the 3 of 21 who paid 10-55 thousand more then their homes are worth... it is the 17 of 21 who paid 101-165 thousand more then their homes are worth. I am one of them and I have to say it doesn't seem to make much sense that I pay $2,000 a month for my mortgage when rent for my home would be about $1,000.
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Bambi
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Posted: Thu Jul 16th, 2009 10:26 pm |
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Anyone considering filing for foreclosure should read this.
SB 1271 - Anti-Deficiency Law Change
One of over 200 bills pushed through the legislature in less than a month was a big change to an existing law that provided protection to borrowers in some cases against a deficiency judgment when their property went through foreclosure. Below is some background information on the legislation that has the lending and real estate industries a buzz with its intended and unintended consequences.
SB 1271 - Serious Changes to Arizona's Anti-Deficiency Statute
SB 1271 was sponsored by Senator Sylvia Allen, a REALTOR® from the White Mountains area of our state. The legislation started out in January as a bill dealing with jail districts and property tax limits. In June a strike-everything amendment gutted the original bill and changed its direction entirely. The Arizona Bankers Association argued successfully that the changes provided in the legislation were necessary because abuses in the current law were costing Arizona-based banks millions in losses. There was significant sympathy for the Arizona community banks in making the changes provided by this legislation. In other words, the legislators found it very easy to hold property investors liable for their debts while arguing that homeowners would still retain their deficiency protection if they lived in the home for six consecutive months. The legislation sailed out of the Senate by a unanimous vote but just barely received enough votes to pass the Arizona House of Representatives. The Governor signed the bill on the last day to sign or veto the legislation.
The current law - Arizona Revised Statutes (A.R.S.) § 33-814 currently states that within 90 days after the date of sale of a trust property under a trust deed, a legal action may be brought to recover a deficiency judgment against the borrower (trustor) who has now had their property foreclosed. The deficiency judgment must be for an amount equal to the sum of the total amount owed as of the date of the sale either by the fair market value of the trust property as determined by the court or the sale price at the trustee's sale, whichever is higher. The current law prohibits a lender from seeking a deficiency judgment against the trustor (foreclosed property owner) if the trust property is 2.5 acres or less and is used as a single one-family or single two-family dwelling.
The law effective September 30, 2009 - SB 1271 amended A.R.S. § 33-814 (G) to require that the trustor must have "utilized" the property for six consecutive months and a certificate of occupancy must have been issued. What does this likely mean? Various attorneys are opining different theories. My interpretation of the statute is that after September 30, 2009, properties sold at trustee's sale likely will not qualify for the anti-deficiency exemption unless the trustor lived in the single one-family or single two-family dwelling for at least six consecutive months. The legislative Fact Sheet, as transmitted to the Governor, states that SB 1271: Prohibits a deficiency judgment against a trustor pursuant to a trustee's sale of a trust property that is 2.5 acres or less and is used as a single one-family or single two-family dwelling if both of the following apply:
- The trustor has lived in the trust property for at least six consecutive months.
- A certificate of occupancy has been issued for the property.
Places the burden of proof on the trustor to demonstrate that the statutory requirements to prohibit a deficiency judgment are met.
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Bambi
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Posted: Thu Jul 16th, 2009 08:31 pm |
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Could it be the beginning of an upward mobility?
Southern California median home sales price surges in June
By Peter Y. Hong - Los Angeles Times
Southern California home prices may have finally hit bottom, with median values rising last month for the first significant increase in two years, new data show.
Along with the 6.4% rise in prices from May, fewer than half of the sales were foreclosures -- the first time that has happened in nine months.
"I think we can now say with fair degree of confidence the pace of real home price declines has slowed dramatically," said Los Angeles economist Christopher Thornberg, who was an early predictor of the housing bubble.
But Thornberg and other analysts cautioned that the housing market remained wobbly and prices wouldn't rise substantially in many neighborhoods for months or even years. The median price of $265,000 is far below the 2007 peak of $505,000.
What's more, California is struggling with one of the highest unemployment rates in the nationand mortgage defaults are continuing to rise. A surge in new foreclosures could squelch any potential recovery in the housing market.
Foreclosures have dominated the Southland residential market for months, with most of the activity centered in distressed areas such as the Inland Empire. By contrast, last month's gain was driven by sales of higher-end homes in the six-county region, which pulled up median prices.
That presents a mixed picture. Although prices have firmed at the low end of the market, they are still falling in affluent communities, the home sales data released by MDA DataQuick on Wednesday show.
The high-end market did not suffer the rapid shock of subprime mortgage defaults and foreclosures that hammered the housing market's lower end. Sales stagnated as wealthier sellers held out for higher prices.
Now, however, some sellers "are realizing the market's not going to just bounce back" and are starting to sell homes for less than they had recently hoped to get, said T.J. Culbertson, a Beverly Hills real estate broker.
That has drawn buyers to the leafy suburbs, looking for deals.
"Sales in many higher-cost neighborhoods couldn't have gotten much lower, so this recent uptick in activity should come as no surprise," MDA DataQuick President John Walsh said. "The recession and problem mortgages are fueling more high-end distress, hence more high-end bargains."
The percentage of homes that sold in June for more than $500,000 rose to about 20% of all homes purchased, up from 18% in May.
The median home sales price has been leveling off all year, hovering around $250,000 for five months before June's 6.4% increase over May's $249,000 median price.
June's median, though, was 26% below that of June 2008, and prices remain at 2002 levels. The median is the point at which half the homes sold for more and half for less.
In a positive sign, only 45% of the homes sold had been foreclosed upon, DataQuick said, the lowest percentage since July 2008. Foreclosures peaked at 57% of total sales in February, and in May still accounted for half of home sales.
That trend of declining foreclosure sales could be reversed if a large backlog of Southern California homes in the foreclosure process end up being repossessed.
In May, 9.5% of California mortgages were in default, up sharply from 5.8% in May 2008, according to First American CoreLogic Inc. The actual number of foreclosures has been slowed thanks to government moratoriums and voluntary efforts by lenders, but that could change if banks are overwhelmed by escalating defaults.
But Culbertson, the real estate broker, said the freeze in mortgage financing for so-called jumbo loans was starting to thaw. Banks also appear more willing than they were last year to complete short sales, in which a home is sold for less than its mortgage amount.
The share of Southland home purchase loans above $417,000 rose to 14.8% in June, the highest since 15.6% last August and up from 12% in May, DataQuick reported.
The typical monthly mortgage payment for Southern California buyers last month was $1,193, up from $1,052 in May. Adjusted for inflation, current payments are 46% below typical payments in the spring of 1989, the peak of the prior real estate cycle.
Escrow closed on a total of 23,262 new and resale houses and condominiums in Los Angeles, Orange, Riverside, San Bernardino, Ventura and San Diego counties last month. That was up 12% from 20,775 in May and up 29% from a year earlier.
Los Angeles County's median home price in June was $320,000, up from $300,000 in May but down about 23% from a year earlier.
In Orange County, the median price went from $410,000 in May to $418,000 in June, DataQuick said. That's 11% below year-earlier levels.
The median price in San Diego County rose from $295,000 in May to $314,000 in June, or about 15% below year-earlier levels.
Year over year, the biggest price drop in June was in San Bernardino County, where the $140,000 median price was off almost 42% from a year earlier. That was still a slight increase over May's $137,000.
Elsewhere, the June median in Riverside County fell 33% from a year earlier to $185,000. In Ventura County, the median dropped 13% to $365,000.
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Bambi
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Posted: Thu Jul 16th, 2009 04:50 pm |
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Good points.
Especially as I listen to the news and discover that these big lending institutions are making record breaking profits again, in the billions. Chase, AIG. All used our money to loan out at a higher interest rate, resulting in huge profits. Which is ok, as long as we are paid back with interest and that money is filtered down to main street. That still isn't happening like it should. We're back to the lack of balance again, where the rich get richer and the poor get poorer. There's a "kink" in the system imo, and it needs to be worked out as our population is growing and growing and growing....309,000,000. I personally feel a great deal of reform is necessary for us to continue running a capitalist society, which I am for. And arguments are ensuing everywhere, for and against. And as I observe and listen to these arguments, I see what appears to be a generation gap. A new generation attempting to take over the old generation of thought and policy. And the Present belongs to that new generation, as we (old timers) will die off, taking our values and moralities with us.
Regarding the announcement today of foreclosures up 33% from last year. Foreclosures, unlike short sales, can take up to a year to go to sale. So, if a person turns over the keys to the lender, responsibility does not end there. If the home sits for a year, and the bank does nothing to maintain it, you are still responsible to the HOA for the fees to "keep it up" on the exterior. Lenders seldom pay HOA's., even though a trustee has been appointed. And, some sales don't even occur. The lender may be out shopping for another lender to take it over. At that juncture, no amount of the sale is recorded....it will show $0 in the records. Protecting values? Maybe...maybe not.
Point being, the couple who lost their job last year, had a home in foreclosure for a year because they couldn't make the payments. In the meantime, they are both gainfully employed again and renting, leaving the baggage behind for another to work out. So when we read about these foreclosures today, it does not necessarily represent a continuum of job losses. But.....if the foreclosure left other debt such as HOA fees and second mortgages that were not purchase money loans, you will probably have a knock on your door by a process server with a summons to appear in Justice Court, to defend your actions. IF you don't show up, then judgment by default may be rendered against you for the relief demanded in the complaint.
Best route to take, to make sure all debts are addressed and resolved is a short sale. And those are still happening in our area.
Now; this one's for Sarah Palin.....
Last edited on Thu Jul 16th, 2009 04:50 pm by Bambi
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2 cents
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Posted: Thu Jul 16th, 2009 03:13 pm |
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Ummmm, on who's watch did the meltdown happen and which of the parties professes that if we would just put all of our faith and trust in big business and let big business run everything that they will self-regulate and everyone will prosper and everything will be just the best hunky-dory that the world has ever seen? Perhaps one would better use a broad brush when painting the guilt graffitti on the wall and include the majority of the wizards in DC starting back to Reagan and perhaps beyond. Think about it a little further and you will see that WE are at fault for electing those buffoons and allowing them to stay in office when they did not do our bidding.
jmo, 2
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starleen
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Posted: Thu Jul 16th, 2009 06:01 am |
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Bambi wrote: We've said all along that the Credit Rating Agencies were the cause of the meltdown.
The cause of the meltdown was a democratic congress mandanting loose lending requirements for Freddie and Fannie. If anything, the Credit Rating Agencies (who are the devil's spawn) would have reduced the housing meltdown, but the banks were all about loose lending and no doc loans.
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Bambi
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Posted: Wed Jul 15th, 2009 04:53 pm |
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Tighter Mortgage Rules Driving Down Sales
Sales of foreclosed properties are driving home sales in some areas.
But mortgage lending rules have tightened to the point that qualified buyers are being turned away in droves.
“The credit pendulum is stuck at ‘stupid,’” said Lou S. Barnes, an owner of
Boulder West Financial Services, a Colorado mortgage bank.
“I am turning down loans every day that my grandfather in his Ponca City, Okla., savings and loan in 1935 would have been happy to make,” Barnes told The New York Times. “And he was tough.”
Mortgage loan denials, analysts say, are occurring for several reasons.
First, Fannie Mae dominates the lending market to the extent that its rules set lending standards. And recently, Fannie toughened its policies, reducing the amount of value of a borrower’s stocks and bonds to 70 percent when figuring the borrower’s assets.
Previously, Fannie Mae calculated these at 100 percent.
Secondly, banks now want down payments of at least 20 percent.
Thirdly, the credit score required to obtain a home mortgage has been drastically raised, blocking those with income adequate to pay the loan but who have a few problems in their credit history.
Finally, the self-employed, including medical and dental professionals, often take so many deductions that their taxable income doesn’t meet the new standards.
Chris George, president of CMG Mortgage, predicted that no-docs and other non-traditional loans will be back within the next six months as lenders gain confidence.
“As with injuries, as with your credit, as with the economy, time heals all wounds,” George told the Market Ticker.
© 2009 Newsmax. All rights reserved.
Last edited on Wed Jul 15th, 2009 04:54 pm by Bambi
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Bambi
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Posted: Tue Jul 14th, 2009 10:30 pm |
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Another Goodie that just came across the air. I checked it out and it's interesting information.
HUD Allows Buyers to "Work Off" Down Payment - 07.14.09
Watch Video
We've said all along that the Credit Rating Agencies were the cause of the meltdown. HUD has a cool Sweat Equity Program
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Bambi
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Posted: Tue Jul 14th, 2009 09:39 pm |
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Talking about Real Estate......... I just came back from dropping my grand daughter off at the Brunswick Bowling Alley in Gilbert. First time I've been there. They don't build bowling alleys like they used to. That place is huge.
Anyway, my point is this. I am going to contact them and see if they would be interested in doing one of two things.
1. Take over one of the huge vacant stores in Q.C.'s marketplace. Costs to change it and per sq. ft. amount will have to be factored in to see if it's worth it to them.
2. Find a spot out here in Pinal for them. That would benefit all of us. There are grants available for bowling alleys, but not sure if grants are available in unincorporated areas.
If you have contacts, information, or anything to help me locate a site, pass it on. Our area needs one of these in a very bad way. Indoor entertainment for the whole family. Bowling leagues for various groups. Games, food, pool tables etc., are all available. In my youth, I wasn't allowed in a Bowling alley. My parent's thought of it as a place of ill repute where alcohol was served. And no one could bowl on Sundays, as the blue laws were in full operation back then. Times have sure changed. What was wrong then is right today.
Brunswick Zone XL
http://www.bowlbrunswick.com
Although you aren't likely to find any Lebowski-types in this shiny new "recreational center," what you will find is the latest in technology and amenities. Gone is the endless waiting in lines - get your lane assignment (or pager if there's a wait) and an attendant comes to you for shoes and anything else your heart desires. Instead of hard plastic chairs, 16 of the 44 lanes have cushy couches. The bar is huge, with six pool tables, televisions, karaoke and DJ s. There's even a real-life kitchen, not just a fryer, where you can get everything from the usual pizza and a burger to a healthy salad. One of the coolest features is the one-touch bumper control, which lets you decide who needs some gutter assistance. And there are coupons on the Web site.
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Bambi
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Posted: Tue Jul 14th, 2009 09:26 pm |
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Hi boys. Good to hear from a couple of my best buds on here.
Gypsy? Sounds kind of like an interesting profession to me at my age. Beats being a Walmart Greeter.
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2 cents
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Posted: Tue Jul 14th, 2009 08:47 pm |
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Hi B! I thought the gypsies had carried you away. I'm glad they brought you back if even for just a little bit here and there.
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pipeman
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Posted: Tue Jul 14th, 2009 06:59 pm |
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Thank you Bambi for keeping us current on the latest mortgage news.
I always enjoy reading your encouraging words.
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Bambi
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Posted: Tue Jul 14th, 2009 06:21 pm |
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Some people have asked if I would at least continue sending feeds to the Real Estate topic I started. I'd be more than happy to do this. I am appreciative and would love to share the knowledge about my area of expertise. I'm grateful that many are reading and educating themselves on the ongoing changes in policies and issues that concern us all. There are some great opportunities awaiting us out there.
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How to Finance a Fixer Upper House With an FHA 203(K) Program
The astronomical housing prices in many areas can make home buying a frustrating experience. Buyers on a budget may find they have a choice between houses that are too small for their needs or rundown dumps. Among the latter, however, are a great many housing nightmares that could be turned into dream homes with a bit of work. Even if you don't do any of the work yourself, you can often buy a fixer-upper and rehabilitate it for quite a bit less than you would spend on a comparable house in "perfect" condition. Paying for the house and the repairs, however, can be a bit tricky, as many lenders won't finance a house that needs a lot of work. Fortunately, the U.S. Federal Housing Administration (FHA)--a division of the Department of Housing and Urban Development (HUD)--has the Section 203(k) program, a mortgage insurance program specially tailored for this situation. While this article focuses on how to use the program to purchase a home, 203(k) loans can also be used to refinance your existing mortgage in order to rehabilitate a house you already own.
Steps
- Determine how much house you can afford. Talk to a lender to see what loan amount you can be approved for based on your income and expenses. Most importantly, figure out yourself how much you can realistically afford. It's not uncommon to be approved for a loan that will stretch your budget to the point of foreclosure.
- Find a house with potential. Look for a house you like in a neighborhood you like. The 203(k) program currently cannot be used by investors, so you'll need to live in the house (or be a qualified non-profit agency). Together with your real estate agent, perform a preliminary feasibility analysis, in which you identify the repairs necessary, estimate the cost of these repairs, and estimate the market value of the home after the repairs. You can save yourself some money by doing this before you order appraisals or estimates, since you may determine that the cost of repairs is too high.
- Execute a contract for the sale of the home. In order to proceed with the 203(k) application process, you'll need a sales contract with a clause stating that the sale is contingent on your ability to obtain financing through the program.
- Apply for the loan. Contact a HUD-approved lender to apply for the loan. You can obtain a list of approved lenders at the nearest HUD field office or on HUD's website.
- Get an estimate of how much the work will cost. The amount of a 203(k) loan cannot be increased during construction, so it's essential to get an accurate estimate of how much the work will cost. For fastest results, get an estimate from a HUD-approved contractor or fee consultant. You can find approved consultants on HUD's website.
- Get an appraisal. Actually, you'll generally need two appraisals: one for the current value of the home and another to estimate the value after the repairs. The loan amount may not exceed the lesser of either the value of the home in its existing condition plus the cost of repairs and 6 months' worth of mortgage payments; or 110% of the estimated value of the home after repairs. The amount of the loan is also subject to maximum FHA mortgage limits, which vary from place to place.
- Find a contractor. The 203(k) program requires that the repairs be performed by a qualified contractor. Most people opt to hire a licensed contractor (typically the one from which they got the estimate), but if you're qualified to do the work you can save yourself some money by doing it yourself. Keep in mind, however that you can only be paid for materials if you're doing the work yourself. If this ends up costing less than the contractor's estimate, the excess money can be used for additional improvements or it will be applied to the principal of the loan. Also make sure that you'll be able to complete the repairs within the maximum allotted 6 months after the purchase. If you won't be able to complete the repairs yourself, hire a HUD-approved contractor.
- Close on the home. If everything is approved, you can purchase the home with as little as 3% down. If you're unable to occupy the home immediately, you can use the extra six months of mortgage payments which may be included in your loan to pay the mortgage while you're also paying to live elsewhere.
- Make sure to get the work done on time. You have six months after the purchase in which to complete the repairs. The repair fund is held in escrow and is disbursed in installments to the contractor (or to you, if you're doing the work yourself). A HUD-approved inspector must review the progress before each disbursement is made.
- Get a final inspection. Once work is completed according to the initial plans, get the final inspection. If there is money left over, it must be applied toward the principal of the loan.
Tips
- The 203(k) program is not for everybody. For example, if you're solely looking to invest in the home and then "flip" it, you won't qualify, and you also won't qualify if the cost of the house plus repairs exceeds HUD's maximum mortgage limit in your area. If this is the case, there are some other options, including Fannie Mae's Homestyle loan and home equity loans on your existing home. A few private lenders also offer programs for these "handyman specials," but they have their own, often stringent, qualifying standards.
- The minimum repair amount necessary is $5,000. Beyond this, a wide variety of repairs are eligible for the loan, including energy conservation and renewable energy upgrades and even moving an existing house onto the foundation of a home you intend to demolish.
- Even with the best planning and estimates, major home remodeling or rehab almost always costs more than you expect. As a rule of thumb, add 10% to whatever your estimated cost is. 203(k) loans require at least a 10% contingency reserve for such unexpected expenses.
- The program allows borrowers who are qualified to do the work themselves to provide their own cost estimate for the repairs. The estimate must be the same as one you would get from a contractor, however, and the HUD process for doing the estimate yourself takes several months (as opposed to a couple weeks for an independent consultant), so you're better off having a fee consultant or contractor provide the estimate, even if you plan on doing the work yourself.
- Once work is completed the 203(k) mortgage is eligible to be refinanced as an FHA 203(b) loan, which may result in lower payments.
- The market value of a home depends largely on its location, so it's usually best to find a fixer-upper home in a desirable location, rather than one in an area with a depressed housing market.
More good information: http://az.gov/webapp/portal/
Last edited on Tue Jul 14th, 2009 06:38 pm by Bambi
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2 cents
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Posted: Thu Jun 25th, 2009 12:51 am |
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Bambi2 wrote: Harney: Will tough mortgage rules hurt real estate recovery?
By Kenneth Harney - Washington Post
WASHINGTON - Real estate may be showing signs of a turnaround in many local markets but the nation's largest mortgage players continue to ratchet up their underwriting rules, making home purchases more difficult for some buyers.
Mortgage giant Fannie Mae, for example, issued a laundry list of tougher policies June 8 that could directly affect thousands of buyers in the coming months, especially those involved in job-related transfers.
Reversing a long-standing policy, Fannie no longer will permit mortgage applicants to count the income of so-called "trailing spouses" toward the household income needed to qualify for a loan. A trailing spouse is one who joins his or her spouse or partner in a job-related move, but who has yet to obtain employment in the new location.
If the main breadwinner's income isn't sufficient to handle the mortgage, the loan application will be rejected; only when the trailing spouse has documented income in the new location will it be counted.
Brian Faith, a spokesman for Fannie Mae, said "given the current economic and job market instability, the company has opted to discontinue consideration of trailing secondary wage-earner income in the interest of safer underwriting, since this income would only be anticipated and undocumented."
Jan Hatfield-Goldman, a vice president for Worldwide ERC, the international trade association representing the employee relocation industry, said Fannie's decision
"makes the current challenging relocation environment even more so. Some transfers will either have to qualify on the basis of one income" - forcing couples to "buy less house than they wanted" - or "they may be required to rent for an extended period of time until the spouse or couple is re-employed. If a couple must wait to purchase a new home until the spouse can find a new job, it could well cause some to reconsider" whether they want to make the job shift at all.
Worldwide ERC estimates that about 800,000 households in the United States move in a typical year because of job transfers.
Freddie Mac, which with Fannie Mae accounts for 70 percent-plus of all new mortgage volume, still counts trailing spouse or co-borrower income for loan applications, but under strict guidelines:
? The amount of the trailing co-borrower income cannot exceed 33 percent of the total qualifying income for the mortgage application.
? That income cannot be from self-employment.
? The trailing spouse must have been continuously employed in the same occupation for at least two years preceding the relocation.
? And the co-borrower must provide a statement of intent to find employment in the new location. The loan officer or lender must also analyze that local employment market and verify that there are adequate opportunities and earnings potential for the co-borrower.
As part of its June 8 tightening of underwriting rules, Fannie Mae also announced that it plans to discount the values of all borrowers' stock, bond, mutual fund and retirement fund holdings that are claimed toward the applicants' financial reserves needed to qualify for a mortgage. While Fannie previously counted 100 percent of the claimed or documented value of stocks, bonds and mutual funds toward reserves, under its revised policy it will discount them by 30 percent.
Good info Bambi. It's about time!
imo, 2
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bobthebuilder
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Posted: Wed Jun 24th, 2009 11:12 pm |
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Good old Barney Frank asking to make it easier to make bad loans...here we go again.
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Bambi2
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Posted: Wed Jun 24th, 2009 07:28 pm |
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Harney: Will tough mortgage rules hurt real estate recovery?
By Kenneth Harney - Washington Post
WASHINGTON - Real estate may be showing signs of a turnaround in many local markets but the nation's largest mortgage players continue to ratchet up their underwriting rules, making home purchases more difficult for some buyers.
Mortgage giant Fannie Mae, for example, issued a laundry list of tougher policies June 8 that could directly affect thousands of buyers in the coming months, especially those involved in job-related transfers.
Reversing a long-standing policy, Fannie no longer will permit mortgage applicants to count the income of so-called "trailing spouses" toward the household income needed to qualify for a loan. A trailing spouse is one who joins his or her spouse or partner in a job-related move, but who has yet to obtain employment in the new location.
If the main breadwinner's income isn't sufficient to handle the mortgage, the loan application will be rejected; only when the trailing spouse has documented income in the new location will it be counted.
Brian Faith, a spokesman for Fannie Mae, said "given the current economic and job market instability, the company has opted to discontinue consideration of trailing secondary wage-earner income in the interest of safer underwriting, since this income would only be anticipated and undocumented."
Jan Hatfield-Goldman, a vice president for Worldwide ERC, the international trade association representing the employee relocation industry, said Fannie's decision
"makes the current challenging relocation environment even more so. Some transfers will either have to qualify on the basis of one income" - forcing couples to "buy less house than they wanted" - or "they may be required to rent for an extended period of time until the spouse or couple is re-employed. If a couple must wait to purchase a new home until the spouse can find a new job, it could well cause some to reconsider" whether they want to make the job shift at all.
Worldwide ERC estimates that about 800,000 households in the United States move in a typical year because of job transfers.
Freddie Mac, which with Fannie Mae accounts for 70 percent-plus of all new mortgage volume, still counts trailing spouse or co-borrower income for loan applications, but under strict guidelines:
? The amount of the trailing co-borrower income cannot exceed 33 percent of the total qualifying income for the mortgage application.
? That income cannot be from self-employment.
? The trailing spouse must have been continuously employed in the same occupation for at least two years preceding the relocation.
? And the co-borrower must provide a statement of intent to find employment in the new location. The loan officer or lender must also analyze that local employment market and verify that there are adequate opportunities and earnings potential for the co-borrower.
As part of its June 8 tightening of underwriting rules, Fannie Mae also announced that it plans to discount the values of all borrowers' stock, bond, mutual fund and retirement fund holdings that are claimed toward the applicants' financial reserves needed to qualify for a mortgage. While Fannie previously counted 100 percent of the claimed or documented value of stocks, bonds and mutual funds toward reserves, under its revised policy it will discount them by 30 percent.
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Bambi2
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Posted: Mon Jun 22nd, 2009 07:51 pm |
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Neighbors are forcing neighbors into foreclosure
By Paul J. Weber - Associated Press
IRVING, Texas - Thousands of Americans who have generally kept up with their mortgages are still in danger of losing their homes because they made a fateful trade-off in this shaky economy - they let their homeowner association dues slide.
Many homeowners are learning to their surprise that condo and neighborhood associations that oversee security patrols, mow lawns, plant flowers and clean the community swimming pool may have the right to foreclose when dues aren't paid. That right is often written into the purchase agreement signed by the homeowner.
Among those who have been threatened with foreclosure is Lacey Pilat, who lost her job catering lavish corporate parties and nearly lost her two-story house in this Dallas suburb.
"Basically, our landscaper was foreclosing on the house," said Steve Pilat, her husband. "That's the way we looked at it."
These foreclosure actions do not necessarily pit neighbor against neighbor. Many homeowner associations have turned the job of collecting member dues over to outside management companies. And to them, it's strictly business, not personal.
Homeowner association boards and their management companies defend the practice, saying maintaining the neighborhood preserves everyone's property values.
"We have compassion for those folks. At the same time, we feel for the rest of the homeowners who are paying their dues," said Andrew Schlegel, executive vice president for Merit Property Management, which manages more than 140,000 California homes in community associations.
In California, associations can foreclose only after 12 months of missed fees or $1,800 in back dues.
"No one wants to do this," Schlegel said. "It's only coming up when people are completely obstinate about it."
In fact, most people end up saving their homes. Homeowner association boards - particularly those that have lost many of their dues-paying members to the housing collapse and the slumping economy - often work with down-on-their-luck neighbors to come up with some sort of compromise. That's what happened with the Pilats.
Gauging the number of foreclosures nationwide by homeowner association is difficult. But in Texas, foreclosure attempts initiated by homeowner associations in 19 counties are up 30 percent from two years ago, according to Dallas-based Foreclosure Listing Services.
In the San Antonio area alone, foreclosure actions by homeowner associations jumped to 170 in April from 21 in April 2008, according to RexReport.com.
In Florida, attorney Bob Tankel, who represents hundreds of homeowner and condo associations, said he has increased his staff from three to 16 in the past 18 months to handle a mounting caseload of 3,500 open collections. About one-fifth of those cases have reached foreclosure, he said.
In California, Schlegel said more than 6 percent of the homes that his company manages are in some stage of delinquency with regard to membership dues, up from around 1 percent in previous years.
More than 59 million people live in more than 300,000 association-governed communities nationwide, according to the Community Associations Institute, the nation's largest group for homeowners and condo boards.
Near Sacramento unemployed state employee Pam Spanier was served with a foreclosure notice after falling more than seven months behind on her $115 monthly dues, which pay for Internet access and a golf-cart security patrol. She owes a total of $2,100, including attorney fees and fines. She is still in her home.
"I'm going to continue to look for a job and hope for a miracle," she said. "If it forecloses, it forecloses."
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Bambi2
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Posted: Sun Jun 21st, 2009 06:43 pm |
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I received this from my Legislation newsletter from my Realtor Association. I thought it had some good information for the consumer also, so I'll share this part with you. Be sure to click on the new FEMA maps.
And Now for a Little Bit of Good News!
We are happy to report that our efforts are having a positive impact on the discussions to expand the sales tax base to include services. The Governor's office, and now House and Senate Republican leadership have stated their opposition to the sales tax being extended to included services. We are now working with the Democratic side of the legislature on their latest budget proposal to bring about bipartisan oppostion to the service tax issue.
Senate Bill 1148 - For Sale Signs
SB1148 passed out of the Senate 27-0 yesterday. This bill applies to non HOA subdivisions that have CCRs or other community rules that restrict or prohibit For Sale sign usage. This bill compliments the gains made by SB 1062 that went into effect in the Fall of 2007. As a result of SB 1062, a homeowner living in an HOA governed by these statutes will be permitted to display an industry-standard size for sale sign on the owner's property, even if such signs are prohibited in the HOA governing documents.
FEMA Unveils New Digital Flood Maps
The Federal Emergency Management Agency, FEMA, will unveil some of its new digital flood maps this week. The preliminary flood maps were designed as part of a nationwide flood map modernization program that should provide greater detail and make it easier for property owners to view the information. The flood elevations are used by FEMA to set rates for the National Flood Insurance Program. For additional information or to find a flood map for your area, please Click Here.
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Bambi2
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Posted: Sun Jun 21st, 2009 05:17 pm |
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Sarah sent this to me. I thought I'd share it with you to update your understanding of what is transpiring in the marketplace.
Here are the mid-month Inventory Graphs… Active Inventory is DOWN over allJ . Pendings and Solds are DOWN, ever so slightly, in Maricopa/QC, Peoria/Glendale, Central Corridor, AJ/QC and Fountain Hills. Otherwise, they are slightly UP.
Enjoy!
Sarah
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[size=
]Sarah Boelter
Business Development Manager
Equity Title Agency, Inc.
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starleen
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Posted: Wed Jun 17th, 2009 04:33 am |
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Bambi2 wrote: Housing starts jumped by 17% to 532,000 in May.
Compared to what? It's all relative. But a false sense of hope is better than no hope at all, I suppose.
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Bambi2
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Posted: Wed Jun 17th, 2009 03:09 am |
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Housing starts jumped by 17% to 532,000 in May and crushed estimates of 485,000. Building permits also popped up to 518,000 above expectations of 508,000. All in all, both point in a positive direction for the overall housing market.
Housing Starts are used in the United States as an indicator of the state of the economy. Housing Starts are the number of privately owned new homes (technically housing units) on which construction has been started over some period. Housing starts are an important economic indicator because they show how much money the general public has. If there is a rise in housing starts it likely means there is more money in the economy.
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Bambi2
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Posted: Sat Jun 6th, 2009 03:15 pm |
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Bambi2 wrote: Another piece of good information to make us become more confident.
Many REALTORS business's are booming! Sales are Way UP and listings are Way DOWN! Sure, we have a long ways to go with all the foreclosures that are still coming onto the market but they seem to be absorbed as quickly. It wasn't too long ago listings were at 58,000+ and now they're at 34,000+. That is a HUGE drop, even with the foreclosures. Buyers are out there. Let's continue moving those homes!!
FYI:
1. HVCC is here in full force. All conventional loans must now have appraisals done through a third party system. The costs have gone up and it looks like the appraisal quality has gone down. Don't be surprised if this program flows over to the FHA loans down the road.
2. $8,000 tax credit refund for 1st time home buyers can now be used for the down payment! The mortgagee letter form HUD just came out at the beginning of the week and so far no one has really figured out exactly what they are allowing. There are a lot of restrictions on this but it is possible to get the buyer's a down payment loan against this tax credit refund. As soon as we figure it out I'll let you know. In the mean time, please be cautious about what you might hear about this program.
Bud Levy. Mortgage consultant.
Correction on the above post from Bud Levy........
Rates have been under a lot of pressure lately for several reasons. The debt load has gotten to be tremendous, the stock market is doing much better and foreign countries are unsure about our economic future and our ability to make good on the bonds we're selling. Some people believe this will turn around shortly however the trend doesn't look promising for lower rates. We might have seen the bottom of the rate scale already and should consider that 5.5% to 6.0% range is really Pretty Darn Good!
I always want to bring you the most accurate information and I need to clarify what I stated the other day about the tax credit refund being used for a down payment. A long time REALTOR, good friend and loyal follower of the Mortgage Market Update quickly notified me that the tax credit refund could not be used for FHA's 3.5% initial down payment. And he is Correct! The mortgagee letter that came out states that at the bottom of the letter, obviously changed at the last minute. The refund can be used for closing costs or for an ADDITIONAL down payment over and above the initial 3.5%. Honestly, this program has so many stipulations in order to use this money ahead of time I'm afraid that this will not work. Anyway, that's the clarification and thanks, good friend for setting me straight!
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