Undisclosed payments in short sale transactions, especially those paid outside of escrow, may violate the law, including RESPA, laws against loan fraud, and licensing laws. Short sale agents have increasingly reported to C.A.R. about requests for agents and their clients to pay junior lienholders and others, oftentimes outside of escrow.
One common scenario is when a short sale seller's senior lender authorizes a payment of $3,000, for example, to extinguish a junior lien, but the junior lender demands that the buyer pays an additional $9,000 outside of escrow. Not only would it be risky for a buyer to pay outside of escrow, but concealing this additional payment from a federally-insured senior lender may constitute loan fraud, which is a crime punishable by 30 years imprisonment plus a $1 million fine (18 U.S.C. section 1014).
Furthermore, omitting from the HUD-1 Statement any charges paid at settlement by either a buyer or seller may violate the Real Estate Settlement Procedures Act (RESPA) (Appendix A to 24 C.F.R. Part 3500). Depending on the specific circumstances, carrying out these payment requests may also violate other laws and regulations, and an agent's participation in the scheme may be subject to license revocation by the Department of Real Estate or other disciplinary action.
Credit and more information:
- Attorney General's Office
California Department of Justice
800-952-5225 Phone
http://takeaction.realtoractioncenter.com/ct/3pA7IIY1ATxl/
- Department of Housing and Urban Development (HUD)
HUD Office of Inspector General Hotline (GFI)
800-347-3735 Phone
http://takeaction.realtoractioncenter.com/ct/edA7IIY1ATxp/
- Federal Bureau of Investigation (FBI)
202-324-3000 Phone
http://takeaction.realtoractioncenter.com/ct/e7A7IIY1ATxP/
Tuesday, March 16, 2010
Thursday, March 11, 2010
Who qualifies for HAMP
In very few words:
- Has to be your primary residence
- Current loan to value ratio is 75% or greater.
- Loans that are ARM, pay option or hybrids are elegible
- Loan originated before 2009
- Unpaid balance not higher than $729,750
- You have to qualify for your payment not being more than 31% of your gross documented income.
- You don't need to be delinquent.
- Bank can initiate foreclosure process but not sale.
- Must be "arms length" (not to your family)
- Buyers cannot resell in less than 90 days.
- Debt forgiven will not be taxed (under law expiring in 2012) (Check tax advisor)
(some of these conditions are particular to specific Banks, for more detail, please contact me and request more information)
GOOD LUCK.
If you don't qualify, your bank should give you a letter of approval to short sale the house at an approved price (with minimum net proceeds requirement), then you call your realtor (hope you consider me) and he will do the rest.
The seller will receive an incentive of $1,500 (relocation assistance.
Call me 619-517-6791 or email henry@houseinsandiego.com
I will provide you with more detailed information about the HAFA and HAMP programs.
Wednesday, March 10, 2010
Free Analysis of your home value and debt alternatives
As a way of giving back to our community, houseINsandiego is working hard, putting together a very complete and personalized package that includes:
- Property profile of your home
- Debt analysis
- Debt to value ratio (based on Current assessed value)
- Calculation of time it will take to break even, if you are upside down.
- What are your options (Description, advantages and disadvantages of each: Loan Mod. Short sale, Deed in lieu, Foreclosure, Bankruptcy)
- When is the market going to recover
- Other interesting and important information.
We are delivering initially to certain areas of East Chula Vista, but if you call or email us, and let us know your home address, we will taylor one of these profiles for your particular case and deliver it to you right away.
Contact: houseINsandiego at (888)454-5888 x30
or email: henry@houseinsandiego.com
**Hablamos Espanol, si usted no habla Ingles, o prefiere comunicarse en Espanol, le atenderemos con la misma calidad de servicio.
Monday, March 8, 2010
SHORT SALES will become the next big trend in Real Estate
In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave.
This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions.
More than five million households are behind on their mortgages and risk foreclosure. The government’s $75 billion mortgage modification plan has helped only a small slice of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done.
For the administration, there is also the concern that millions of foreclosures could delay or even reverse the economy’s tentative recovery — the last thing it wants in an election year.
Taking effect on April 5, the program could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.
“We want to streamline and standardize the short sale process to make it much easier on the borrower and much easier on the lender,” said Seth Wheeler, a Treasury senior adviser.
The problem is highlighted by a routine case in Phoenix. Chris Paul, a real estate agent, has a house he is trying to sell on behalf of its owner, who owes $150,000. Mr. Paul has an offer for $48,000, but the bank holding the mortgage says it wants at least $90,000. The frustrated owner is now contemplating foreclosure.
To bring the various parties to the table — the homeowner, the lender that services the loan, the investor that owns the loan, the bank that owns the second mortgage on the property — the government intends to spread its cash around.
Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in “relocation assistance.”
Should the incentives prove successful, the short sales program could have multiple benefits. For the investment pools that own many home loans, there is the prospect of getting more money with a sale than with a foreclosure.
For the borrowers, there is the likelihood of suffering less damage to credit ratings. And as part of the transaction, they will get the lender’s assurance that they will not later be sued for an unpaid mortgage balance.
For communities, the plan will mean fewer empty foreclosed houses waiting to be sold by banks. By some estimates, as many as half of all foreclosed properties are ransacked by either the former owners or vandals, which depresses the value of the property further and pulls down the value of neighboring homes.
If short sales are about to have their moment, it has been a long time coming. At the beginning of the foreclosure crisis, lenders shunned short sales. They were not equipped to deal with the labor-intensive process and were suspicious of it.
The lenders’ thinking, said the economist Thomas Lawler, went like this: “I lend someone $200,000 to buy a house. Then he says, ‘Look, I have someone willing to pay $150,000 for it; otherwise I think I’m going to default.’ Do I really believe the borrower can’t pay it back? And is $150,000 a reasonable offer for the property?”
Short sales are “tailor-made for fraud,” said Mr. Lawler, a former executive at the mortgage finance company Fannie Mae.
Last year, short sales started to increase, although they remain relatively uncommon. Fannie Mae said preforeclosure deals on loans in its portfolio more than tripled in 2009, to 36,968. But real estate agents say many lenders still seem to disapprove of short sales.
Under the new federal program, a lender will use real estate agents to determine the value of a home and thus the minimum to accept. This figure will not be shared with the owner, but if an offer comes in that is equal to or higher than this amount, the lender must take it.
Mr. Paul, the Phoenix agent, was skeptical. “In a perfect world, this would work,” he said. “But because estimates of value are inherently subjective, it won’t. The banks don’t want to sell at a discount.”
There are myriad other potential conflicts over short sales that may not be solved by the program, which was announced on Nov. 30 but whose details are still being fine-tuned. Many would-be short sellers have second and even third mortgages on their houses. Banks that own these loans are in a position to block any sale unless they get a piece of the deal.
“You have one loan, it’s no sweat to get a short sale,” said Howard Chase, a Miami Beach agent who says he does around 20 short sales a month. “But the second mortgage often is the obstacle.”
Major lenders seem to be taking a cautious approach to the new initiative. In many cases, big banks do not actually own the mortgages; they simply administer them and collect payments. J. K. Huey, a Wells Fargo vice president, said a short sale, like a loan modification, would have to meet the requirements of the investor who owns the loan.
“This is not an opportunity for the customer to just walk away,” Ms. Huey said. “If someone doesn’t come to us saying, ‘I’ve done everything I can, I used all my savings, I borrowed money and, by the way, I’m losing my job and moving to another city, and have all the documentation,’ we’re not going to do a short sale.”
But even if lenders want to treat short sales as a last resort for desperate borrowers, in reality the standards seem to be looser.
Sree Reddy, a lawyer and commercial real estate investor who lives in Miami Beach, bought a one-bedroom condominium in 2005, spent about $30,000 on improvements and ended up owing $540,000. Three years later, the value had fallen by 40 percent.
Mr. Reddy wanted to get out from under his crushing monthly payments. He lost a lot of money in the crash but was not in default. Nevertheless, his bank let him sell the place for $360,000 last summer.
“A short sale provides peace of mind,” said Mr. Reddy, 32. “If you’re in foreclosure, you don’t know when they’re ultimately going to take the place away from you.”
Mr. Reddy still lives in the apartment complex where he bought that condo, but is now a renter paying about half of his old mortgage payment. Another benefit, he said: “The place I’m in now is nicer and a little bigger.”
Credit for this article goes to: DAVID STREITFELD
This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions.
More than five million households are behind on their mortgages and risk foreclosure. The government’s $75 billion mortgage modification plan has helped only a small slice of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done.
For the administration, there is also the concern that millions of foreclosures could delay or even reverse the economy’s tentative recovery — the last thing it wants in an election year.
Taking effect on April 5, the program could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.
“We want to streamline and standardize the short sale process to make it much easier on the borrower and much easier on the lender,” said Seth Wheeler, a Treasury senior adviser.
The problem is highlighted by a routine case in Phoenix. Chris Paul, a real estate agent, has a house he is trying to sell on behalf of its owner, who owes $150,000. Mr. Paul has an offer for $48,000, but the bank holding the mortgage says it wants at least $90,000. The frustrated owner is now contemplating foreclosure.
To bring the various parties to the table — the homeowner, the lender that services the loan, the investor that owns the loan, the bank that owns the second mortgage on the property — the government intends to spread its cash around.
Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in “relocation assistance.”
Should the incentives prove successful, the short sales program could have multiple benefits. For the investment pools that own many home loans, there is the prospect of getting more money with a sale than with a foreclosure.
For the borrowers, there is the likelihood of suffering less damage to credit ratings. And as part of the transaction, they will get the lender’s assurance that they will not later be sued for an unpaid mortgage balance.
For communities, the plan will mean fewer empty foreclosed houses waiting to be sold by banks. By some estimates, as many as half of all foreclosed properties are ransacked by either the former owners or vandals, which depresses the value of the property further and pulls down the value of neighboring homes.
If short sales are about to have their moment, it has been a long time coming. At the beginning of the foreclosure crisis, lenders shunned short sales. They were not equipped to deal with the labor-intensive process and were suspicious of it.
The lenders’ thinking, said the economist Thomas Lawler, went like this: “I lend someone $200,000 to buy a house. Then he says, ‘Look, I have someone willing to pay $150,000 for it; otherwise I think I’m going to default.’ Do I really believe the borrower can’t pay it back? And is $150,000 a reasonable offer for the property?”
Short sales are “tailor-made for fraud,” said Mr. Lawler, a former executive at the mortgage finance company Fannie Mae.
Last year, short sales started to increase, although they remain relatively uncommon. Fannie Mae said preforeclosure deals on loans in its portfolio more than tripled in 2009, to 36,968. But real estate agents say many lenders still seem to disapprove of short sales.
Under the new federal program, a lender will use real estate agents to determine the value of a home and thus the minimum to accept. This figure will not be shared with the owner, but if an offer comes in that is equal to or higher than this amount, the lender must take it.
Mr. Paul, the Phoenix agent, was skeptical. “In a perfect world, this would work,” he said. “But because estimates of value are inherently subjective, it won’t. The banks don’t want to sell at a discount.”
There are myriad other potential conflicts over short sales that may not be solved by the program, which was announced on Nov. 30 but whose details are still being fine-tuned. Many would-be short sellers have second and even third mortgages on their houses. Banks that own these loans are in a position to block any sale unless they get a piece of the deal.
“You have one loan, it’s no sweat to get a short sale,” said Howard Chase, a Miami Beach agent who says he does around 20 short sales a month. “But the second mortgage often is the obstacle.”
Major lenders seem to be taking a cautious approach to the new initiative. In many cases, big banks do not actually own the mortgages; they simply administer them and collect payments. J. K. Huey, a Wells Fargo vice president, said a short sale, like a loan modification, would have to meet the requirements of the investor who owns the loan.
“This is not an opportunity for the customer to just walk away,” Ms. Huey said. “If someone doesn’t come to us saying, ‘I’ve done everything I can, I used all my savings, I borrowed money and, by the way, I’m losing my job and moving to another city, and have all the documentation,’ we’re not going to do a short sale.”
But even if lenders want to treat short sales as a last resort for desperate borrowers, in reality the standards seem to be looser.
Sree Reddy, a lawyer and commercial real estate investor who lives in Miami Beach, bought a one-bedroom condominium in 2005, spent about $30,000 on improvements and ended up owing $540,000. Three years later, the value had fallen by 40 percent.
Mr. Reddy wanted to get out from under his crushing monthly payments. He lost a lot of money in the crash but was not in default. Nevertheless, his bank let him sell the place for $360,000 last summer.
“A short sale provides peace of mind,” said Mr. Reddy, 32. “If you’re in foreclosure, you don’t know when they’re ultimately going to take the place away from you.”
Mr. Reddy still lives in the apartment complex where he bought that condo, but is now a renter paying about half of his old mortgage payment. Another benefit, he said: “The place I’m in now is nicer and a little bigger.”
Credit for this article goes to: DAVID STREITFELD
Monday, March 1, 2010
EQUATOR AND BANK OF AMERICA....Agents, get ready to do somebody elses work too!! AND PAY TO GET WORK AS WELL!!!
Short sales for Bank of America and some other banks will now be handled through Equator, a privately owned company that will profit from selling subscriptions, areas of influence, certifications, and other services to the Real Estate Agents, (that is if they are interested in working with this banks....they could also find a different job).
The following are some of the goodies that we will be looking at:
EQUATOR requires the Borrower/seller to describe their hardship, if the seller has an undue hardship like military relocation or death, there is no way to input that information into the system...hardships are all the same to the system.
SELLER needs to upload their financial docuements (statements, etc...) Equator doesn't care if the seller does not have a scanner. Each of the documents have to be scanned and cataloged for Equator, so the bank has everything served at the table when they decide to consider it. Obviously this job will have to be done by the Agents.
AGENT needs to all input all the figures in the HUD statement and spend time figuring out all numbers, just to be asked to UPLOAD THE HUD sheet at the end, meaning: more work for the agent and complete disregard for his/her time;
There is no information for the agent as to what is expected to be input in different fields, for example: "SETTLEMENT FEES" do they mean ESCROW CHARGES OR THE SETTLEMENT CHARGES TO SELLER? OR SETTLEMENT COSTS, What does it mean (all costs??)
Asks for closing date. (if only we knew when they will approve??), we have an offer with BofA in my office that has been negotiated for ONE YEAR, vice-presidents come and go, I have lost 3 or 4 buyers, and still these guys cannot approve or reject the short sale.....closing date, yeah right!
IN THEIR "hud" There is not a field for NHD that is required by law.
Why is the commission is always 5% when the industry standard is 6%, and recent legislation HAMP and HAFA has determined that if the loan belongs to Fannie Mae or Freddie mac the Commission shouldn't be reduced. Why should we reduce our commission when we need to wait 4 to 12 months for the short sale to be approved??? We should reduce their salaries instead, they are the ones that are incompetent, bureaucratic and ineficient.
AGENt is required to know the first 5 digits of the Buyer's Social Security; phone number; address and Birthdate. Who gives that information??, the buyer is not the negotiating agent's client, tell me if you would give a stranger these numbers? doesn't it scream like identity theft?
AGENT is asked to upload photo and MLS# and in the same window is asked to upload the MLS Sheet that includes photo and MLS#. (Just for the sake of making agents work a little more, who cares)
When a message is sent to us through equator, and we try to reply, we get the e-mail back undelivered = GENERIC.BACI@BANKOFAMERICA.COM. Meaning: This system does not work yet, or nobody is looking at your answers!
The assigned tasks are supposed to triger an e-mail to the Agent to login to equator, but it doesn't, we need to check it every day, to see when someone decided to give us a break.
Equator sells registration to each zipcode so if an agent wants his client to be able to pick him out of the agents that are "suggested" or authorized by Equator, he HAS to pay for that zipcode, then better pay extra to get your photo in there, or even more if you want to be certified so the banks pick you, and even more if you want the banks to see your resume and be in a "prime" position..... and this is just the beginning of what will be the way banks work, doesn't this look unfair for the agents?, where is our Department of Real Estate, or our Boards of Realtors to protect us from this huge plan to extract money from us, in order to be able to work?
The following are some of the goodies that we will be looking at:
EQUATOR requires the Borrower/seller to describe their hardship, if the seller has an undue hardship like military relocation or death, there is no way to input that information into the system...hardships are all the same to the system.
SELLER needs to upload their financial docuements (statements, etc...) Equator doesn't care if the seller does not have a scanner. Each of the documents have to be scanned and cataloged for Equator, so the bank has everything served at the table when they decide to consider it. Obviously this job will have to be done by the Agents.
AGENT needs to all input all the figures in the HUD statement and spend time figuring out all numbers, just to be asked to UPLOAD THE HUD sheet at the end, meaning: more work for the agent and complete disregard for his/her time;
There is no information for the agent as to what is expected to be input in different fields, for example: "SETTLEMENT FEES" do they mean ESCROW CHARGES OR THE SETTLEMENT CHARGES TO SELLER? OR SETTLEMENT COSTS, What does it mean (all costs??)
Asks for closing date. (if only we knew when they will approve??), we have an offer with BofA in my office that has been negotiated for ONE YEAR, vice-presidents come and go, I have lost 3 or 4 buyers, and still these guys cannot approve or reject the short sale.....closing date, yeah right!
IN THEIR "hud" There is not a field for NHD that is required by law.
Why is the commission is always 5% when the industry standard is 6%, and recent legislation HAMP and HAFA has determined that if the loan belongs to Fannie Mae or Freddie mac the Commission shouldn't be reduced. Why should we reduce our commission when we need to wait 4 to 12 months for the short sale to be approved??? We should reduce their salaries instead, they are the ones that are incompetent, bureaucratic and ineficient.
AGENt is required to know the first 5 digits of the Buyer's Social Security; phone number; address and Birthdate. Who gives that information??, the buyer is not the negotiating agent's client, tell me if you would give a stranger these numbers? doesn't it scream like identity theft?
AGENT is asked to upload photo and MLS# and in the same window is asked to upload the MLS Sheet that includes photo and MLS#. (Just for the sake of making agents work a little more, who cares)
When a message is sent to us through equator, and we try to reply, we get the e-mail back undelivered = GENERIC.BACI@BANKOFAMERICA.COM. Meaning: This system does not work yet, or nobody is looking at your answers!
The assigned tasks are supposed to triger an e-mail to the Agent to login to equator, but it doesn't, we need to check it every day, to see when someone decided to give us a break.
Equator sells registration to each zipcode so if an agent wants his client to be able to pick him out of the agents that are "suggested" or authorized by Equator, he HAS to pay for that zipcode, then better pay extra to get your photo in there, or even more if you want to be certified so the banks pick you, and even more if you want the banks to see your resume and be in a "prime" position..... and this is just the beginning of what will be the way banks work, doesn't this look unfair for the agents?, where is our Department of Real Estate, or our Boards of Realtors to protect us from this huge plan to extract money from us, in order to be able to work?
Wednesday, February 24, 2010
Investors offering to negotiate the short sales for free??? Be aware!
I have been approached by a ton of these "Investors", and have given a lot of thought to this, trying to figure out if it is the right thing to do, here is my personal opinion:As a Real Estate agent representing a seller in a short sale, it is your fiduciary duty to best represent your client's interests. What these investors in general do, is they formalize a contract with the seller (directly), this contract authorizes the investor to record an irrevocable option to sell the property, meaning that they are the only ones authorized to sell the property, even if the investor will continue dealing with the agent, at a given point, he has the right to sell even beyond your listing agreement expiring. This is not the best part, if the bank wants to the property to sell before foreclosure, they don't have a choice but to deal with the investor, even if this investor is offering a ridiculous amount for the property, it is either take it or foreclose it.The investor does not give a crap if the offer is unreasonable, the only thing he will care about is the profit he is getting, so he forces the purchase price to insure a hefty profit.If the bank decides to foreclose, the investor does not care, he has other properties.What happens with your client and your fiduciary duties? they went down the drain.What happens if the seller had refinanced or had a HELOC or a recourse loan? He probably will be hit with a 1099 and deficiency judgements at some point in the future and guess what.....He will see the records that the property sold NOT FOR THE AMOUNT THEY SIGNED but maybe $100,000 more!!!! Guess what they will be thinking then?..........LAWSUIT, MAYBE?
Sunday, February 21, 2010
Bank tapes ----Urban legend?
Is this for real?, I have been chasing "Bank Tapes" for my investors for many months....Everybody talks a lot about them, nobody really "has" anything, everybody wants proof of funds, letters of intent, non disclosure and confidentiality agreements and in the end, they have nothing, everybody is trying to resell something that somebody else told them they have....To me, these bank tapes are URBAN LEGEND.
Rules that all these "contacts" should consider:
Who would sell houses at 50 or 60 cents on the dollar, when the market right now is hurting for more inventory?, when houses can be sold at 1 dollar per dollar?
If this was real, don't you think it would already be in Wallstreet? returns on this kind of investment are astronomical.
Why don't you see these deals closing?
Rules that all these "contacts" should consider:
Who would sell houses at 50 or 60 cents on the dollar, when the market right now is hurting for more inventory?, when houses can be sold at 1 dollar per dollar?
If this was real, don't you think it would already be in Wallstreet? returns on this kind of investment are astronomical.
Why don't you see these deals closing?
Thursday, February 4, 2010
NEW WAVE OF FORECLOSURES?? I don't think so.
I personally think that REOs will not be coming back in a huge volume, inventory will continue to trickle while the Banks concentrate in the big new trend with HAMP and HAFA, which basically means "short refi"; what they should have done from day one. They didn't because they are huge entities and cannot react fast enough to the problem.We will see an increased volume of short sales, because most people will try to short refinance their home that now is worth 50 cents on the dollar. If they don't qualify, they will be issued a payoff approval to short sell their home. All this will bring tremendous liquidity to the market.On the other hand, we need the job market to improve, and I think it will, (at a huge cost to taxpayers) sooner or later.We cannot, as a country, tolerate a huge foreclosure wave as you and I selfishly would like, I know we would make a ton of money, but our economy cannot tolerate it, it is about National Security, and Government priorities.You can rest assured that the wave you are waiting for will not happen. Not in this cycle.I recommend you continue to take advantage of the trickled REOs that will continue to be available for a couple of years, but get yourself focused on the areas that make sense, THEY HAVE MOVED OUR CHEESE AGAIN.The only thing you will find in the REO market, is people wanting to squeeze money out of you, vultures that will promise to deliver "THE SECRET" in exchange of "A FEW DOLLARS"Conventions are only trade shows, Certifications are just tags that are worthless, if you want to learn something, buy a book, talk to other agents, don't pay for people to BLOW SMOKE UP YOUR.....
Friday, December 18, 2009
GOOD NEWS FOR THOSE THAT ARE FACING FORECLOSURE SOON!
Fannie Mae and Freddie Mac will suspend foreclosure evictions
from December 19, 2009 through January 3, 2010. To help
struggling families over the holidays, both owner-occupants and
tenants living in properties foreclosed upon by Fannie Mae will
not be evicted. Freddie Mac's suspension of evictions will be
limited to properties up to four units.
In a similar move, Citigroup Inc. will suspend foreclosure sales
and evictions for 30 days through January 17, 2010 for loans it
owns. Citigroup's foreclosure moratorium, however, does not
extend to loans it services on behalf of other investors. Given
these developments, other lenders may follow suit, so check with
the lender if appropriate.
Call me or email me if you are facing Foreclosure soon, or if you have
received a Notice of Default, I can really help you avoid it.
from December 19, 2009 through January 3, 2010. To help
struggling families over the holidays, both owner-occupants and
tenants living in properties foreclosed upon by Fannie Mae will
not be evicted. Freddie Mac's suspension of evictions will be
limited to properties up to four units.
In a similar move, Citigroup Inc. will suspend foreclosure sales
and evictions for 30 days through January 17, 2010 for loans it
owns. Citigroup's foreclosure moratorium, however, does not
extend to loans it services on behalf of other investors. Given
these developments, other lenders may follow suit, so check with
the lender if appropriate.
Call me or email me if you are facing Foreclosure soon, or if you have
received a Notice of Default, I can really help you avoid it.
Monday, December 14, 2009
It's getting better all the time!! BETTER, BETTER!!
“It's getting better all the time” is the key refrain to the Beatles' song Getting Better. That sentiment would have been foolish if it had been sung this time last year. Today, though, it appears to hold true, particularly now that we have finally received the break we have all been anticipating – a drop in unemployment.
On that front, the nation’s employers have stopped eliminating jobs en mass. The unemployment rate dipped to 10% in November. Many forecasters – and forecasting is a perilous endeavor, to be sure – believe hiring will hit stride late in the first quarter of 2010. If they are right, the employment recovery will come quicker compared to the previous two recessions (1991 and 2001) despite the greater severity of the current downturn.
More jobs, in turn, will help reduce the number of homeowners on the brink of foreclosure, which, by the way, has dropped for a fourth-straight month. One in every 417 homes received a foreclosure-related notice in November, but that is down 8% from October, according to numbers released by RealtyTrac.
We are not out of the woods yet. RealtyTrac expects foreclosure filings will post a second-consecutive record in 2009, with 3.9 million notices sent to homeowners in default, compared to 2008's 3.2 million. However, if employment continues to improve, chances are good we will see a substantial reversal of that trend in 2010.
The drop in home values is another trend we expect to see reversed in 2010. According to real estate Web site Zillow, total home values in the U.S. declined by $489 billion in the first 11 months of 2009. That sounds like an astronomical figure, but it is actually an 87% improvement over the $3.6 trillion in lost homeowner value suffered in 2008.
More jobs could also reverse the trend in mortgage rates, pressuring rates to rise as loan demand increases. Though not showing signs of rising yet, mortgage rates have been at a plateau. Bankrate.com's recent lender surveys suggest the downtrend is abating, with its most recent survey posting marginally higher rates than the previous week's survey.
Economic Indicator
Release Date and Time
Consensus Estimate
Analysis
Producer Price Index(November)
Tues, Dec. 15,8:30 am, et
Finished Goods: 0.7% (Increase)Core: 0.2% (Increase)
Important. Rising producer prices will raise inflation concerns.
Industrial Production(November)
Tues, Dec. 15,9:15 am, et
0.3% (Increase)
Moderately Important. Production is increasing to meet renewed consumer demand.
Housing Market Index (December)
Tues, Dec. 15,1:00 pm, et
19 Index
Important. Confidence is expected to receive a boost from extension of the homebuyer's tax credit.
Mortgage Applications
Wed, Dec. 16,7:00 am, et
None
Important. Purchase and refinance applications rise as the decrease in rates slows.
Consumer Price Index(November)
Wed, Dec. 16,8:30 am, et
Finished Goods: 0.3% (Increase)Core: 0.1% (Increase)
Important. Consumer prices remain subdued but could be pushed higher on rising producer prices.
Housing Starts(November)
Wed, Dec. 16,8:30 am, et
560,000 (Annualized)
Important. Starts should rebound strongly after October's decline.
Federal Reserve FOMC Meeting
Wed, Dec. 16,2:15 pm, et
Federal Funds Rate: 0.0% to 0.25%
Very Important. The Fed is expected to hold short-term rates steady through the first quarter of 2010.
Leading Indicators(November)
Thurs, Dec. 17,8:30 am, et
0.6% (Increase)
Moderately Important. The indicators suggest the recovery remains on track.
Are We There Yet?
We cannot say for sure, but we think we are darn close. Of course, we are speaking of the bottom in mortgage rates. Last week we explained how the Federal Reserve has influenced the market with its massive purchases of mortgage-backed securities. This week we offer statistical support for our contention that rates are at least close to bottoming, if not likely to reverse soon.
Calculated Risk, an insightful Web site that tracks the comings and goings of the housing and mortgage markets, supplied the evidence. Calculated Risk has noted (as have we) the close relationship between the 30-year conventional fixed-rate mortgage and the yield on the 10-year Treasury note. Based on statistical analysis reprinted on Calculated Risk's Web site, the 30-year conventional fixed-rate mortgage is expected to rise to 5.4% based on the current 10-year Treasury yield of 3.45%.
We must be careful; statistics imply a certitude that does not always exist, but it is worth noting that the aforementioned model has a determination coefficient (statistic-speak for predictive value) of 0.97, which is very high. Today's 30-year fixed-rate loan is lower than 5.4%, but Calculated Risk opines that the difference is due to prepayment speed and randomness and to the Federal Reserve's purchases of mortgage-backed securities, which we expect to taper off considerably in coming months – and that's key. When the Fed starts throttling back on theses purchases, look for mortgage rates to throttle higher.
Credit to Brian Brinkley for this posting, www.brinkleycommercialcapital.com
On that front, the nation’s employers have stopped eliminating jobs en mass. The unemployment rate dipped to 10% in November. Many forecasters – and forecasting is a perilous endeavor, to be sure – believe hiring will hit stride late in the first quarter of 2010. If they are right, the employment recovery will come quicker compared to the previous two recessions (1991 and 2001) despite the greater severity of the current downturn.
More jobs, in turn, will help reduce the number of homeowners on the brink of foreclosure, which, by the way, has dropped for a fourth-straight month. One in every 417 homes received a foreclosure-related notice in November, but that is down 8% from October, according to numbers released by RealtyTrac.
We are not out of the woods yet. RealtyTrac expects foreclosure filings will post a second-consecutive record in 2009, with 3.9 million notices sent to homeowners in default, compared to 2008's 3.2 million. However, if employment continues to improve, chances are good we will see a substantial reversal of that trend in 2010.
The drop in home values is another trend we expect to see reversed in 2010. According to real estate Web site Zillow, total home values in the U.S. declined by $489 billion in the first 11 months of 2009. That sounds like an astronomical figure, but it is actually an 87% improvement over the $3.6 trillion in lost homeowner value suffered in 2008.
More jobs could also reverse the trend in mortgage rates, pressuring rates to rise as loan demand increases. Though not showing signs of rising yet, mortgage rates have been at a plateau. Bankrate.com's recent lender surveys suggest the downtrend is abating, with its most recent survey posting marginally higher rates than the previous week's survey.
Economic Indicator
Release Date and Time
Consensus Estimate
Analysis
Producer Price Index(November)
Tues, Dec. 15,8:30 am, et
Finished Goods: 0.7% (Increase)Core: 0.2% (Increase)
Important. Rising producer prices will raise inflation concerns.
Industrial Production(November)
Tues, Dec. 15,9:15 am, et
0.3% (Increase)
Moderately Important. Production is increasing to meet renewed consumer demand.
Housing Market Index (December)
Tues, Dec. 15,1:00 pm, et
19 Index
Important. Confidence is expected to receive a boost from extension of the homebuyer's tax credit.
Mortgage Applications
Wed, Dec. 16,7:00 am, et
None
Important. Purchase and refinance applications rise as the decrease in rates slows.
Consumer Price Index(November)
Wed, Dec. 16,8:30 am, et
Finished Goods: 0.3% (Increase)Core: 0.1% (Increase)
Important. Consumer prices remain subdued but could be pushed higher on rising producer prices.
Housing Starts(November)
Wed, Dec. 16,8:30 am, et
560,000 (Annualized)
Important. Starts should rebound strongly after October's decline.
Federal Reserve FOMC Meeting
Wed, Dec. 16,2:15 pm, et
Federal Funds Rate: 0.0% to 0.25%
Very Important. The Fed is expected to hold short-term rates steady through the first quarter of 2010.
Leading Indicators(November)
Thurs, Dec. 17,8:30 am, et
0.6% (Increase)
Moderately Important. The indicators suggest the recovery remains on track.
Are We There Yet?
We cannot say for sure, but we think we are darn close. Of course, we are speaking of the bottom in mortgage rates. Last week we explained how the Federal Reserve has influenced the market with its massive purchases of mortgage-backed securities. This week we offer statistical support for our contention that rates are at least close to bottoming, if not likely to reverse soon.
Calculated Risk, an insightful Web site that tracks the comings and goings of the housing and mortgage markets, supplied the evidence. Calculated Risk has noted (as have we) the close relationship between the 30-year conventional fixed-rate mortgage and the yield on the 10-year Treasury note. Based on statistical analysis reprinted on Calculated Risk's Web site, the 30-year conventional fixed-rate mortgage is expected to rise to 5.4% based on the current 10-year Treasury yield of 3.45%.
We must be careful; statistics imply a certitude that does not always exist, but it is worth noting that the aforementioned model has a determination coefficient (statistic-speak for predictive value) of 0.97, which is very high. Today's 30-year fixed-rate loan is lower than 5.4%, but Calculated Risk opines that the difference is due to prepayment speed and randomness and to the Federal Reserve's purchases of mortgage-backed securities, which we expect to taper off considerably in coming months – and that's key. When the Fed starts throttling back on theses purchases, look for mortgage rates to throttle higher.
Credit to Brian Brinkley for this posting, www.brinkleycommercialcapital.com
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