Tag Archives: tallahassee loan mods

When Do Americans Think Housing Market Will Recover?

Posted on December 8, 2010 by admin

Trulia.com (www.trulia.com), a top site for homebuyers, sellers and renters, and RealtyTrac (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released the latest results of an ongoing survey tracking homebuyers’ attitudes toward foreclosed homes. Results of the survey conducted online from November 2-4, 2010 by Harris Interactive® on behalf on Trulia and RealtyTrac showed that Americans continue to grapple with uncertainty about the housing market, with 58 percent of U.S. adults expecting recovery to take at least another two years.

As a result of the recent robo-signing debacle, half of U.S. adults expressed that they now have less faith in mortgage lenders, banks and the government. Another 35 percent believe the robo-signing issue will delay the housing market’s recovery, while only 6 percent of U.S. adults think the robo-signing issue will have no effect on the recovery of the housing market.

When do Americans think the housing market will recover:

Year % of American adults who believe housing will recover
Already recovered 4%
2010 1%
2011 10%
2012 27%
2013 24%
2014 12%
2015 or later 22%

“More and more, American homeowners, -sellers and -buyers are tamping down their expectations for a swift recovery in the housing market and bracing themselves for a long, slow climb back to a healthy real estate market. Fifty-eight percent believe recovery will happen after 2012 and more than one in five U.S. adults believe recovery won’t happen until 2015 or later,” said Pete Flint, co-founder and CEO, Trulia.

“Government incentives have come and gone and historic lows in interest rates have done little to spur recovery. Then, as if prospective buyers and sellers needed more to be concerned about, the robo-signing issue caused a ‘what’s next?’ fear to surface in the minds of consumers who, frankly, have lost faith in banks and their government to make good decisions.”

Under Water and Out of Options
Nearly half (48 percent) of homeowners with a mortgage admitted that they would consider walking away if their mortgage was under water, an increase compared with May 2010, when only 41 percent said they would consider walking away if their mortgage was under water. Interestingly, men (57 percent) are more likely than women (40 percent) to consider strategic default as an option for dealing with negative equity.

If they became unable to pay the mortgage payments on their current primary residence, two-thirds of U.S. adults with mortgages said they would consider calling the lender and trying to modify the terms of the loan as their first option. The next most popular solution is to have a tenant move in to contribute to the mortgage, but only 10 percent of U.S. adults would do this.

Interest in Buying a Foreclosure
Nearly half (49 percent) of U.S. adults are at least somewhat likely to consider purchasing a foreclosed property, up from 45 percent in May 2010. Despite the rising interest in buying a foreclosed home, an increasing number of U.S. adults also recognize negative aspects to buying a foreclosure. Over the past six months, the number of U.S. adults who believe there are downsides to buying foreclosed properties has increased to 81 percent, from 78 percent in May 2010. Among those who think there are negative aspects to purchasing a foreclosed home, the top concerns about purchasing a foreclosed property between November 2010 and May 2010 include:

Top Concerns Among Those with Negative Sentiment toward Buying a Foreclosure
November 2010 May 2010
Hidden costs 66% 68%
Process is risky 54% 49%
Home may lose value 33% 35%

Expected Discount on Foreclosure Purchase
Two-thirds (67 percent) of U.S. adults would expect to pay at least 30 percent less for a foreclosed home than a similar home that was not inforeclosure, and one-third of U.S. adults (35 percent) would expect to pay at least 50 percent less for a foreclosed home. Overall 97 percent of U.S. adults would expect at least some discount on a foreclosed home.

“It seems like consumer expectations and market realities are beginning to align when it comes to foreclosure discounts,” said Rick Sharga, senior vice president, RealtyTrac. “During the third quarter, foreclosure homes sold for an average of 32 percent less than homes not in foreclosure. It’s also not surprising that we’ve seen an increase in negative sentiment toward foreclosure purchases, where the recent robo-signing controversy has added more confusion to an already complicated process.”

Trulia.com is the most comprehensive real estate site focused on empowering you with smarter tools to help you find the right home. Whether you are an active buyer, seller or real estate enthusiast, Trulia gives you all the information you care about from rich property data to a personalized search experience. We are focused on helping you find the home that truly meets your needs, and delivers on what’s most important for you. Ultimately, we built a smart real estate search experience bringing together local information, community insights, market data and national listings all in one place, all for you.

About RealtyTrac Inc.
RealtyTrac is the leading online marketplace of foreclosure properties, with more than 1.5 million default, auction and bank-owned listings from over 2,200 U.S. counties, along with detailed property, loan and home sales data. Hosting more than 3 million unique monthly visitors, RealtyTrac provides innovative technology solutions and practical education resources to facilitate buying, selling and investing in real estate. RealtyTrac’s foreclosure data has also been used by the Federal Reserve, FBI, U.S. Senate Joint Economic Committee and Banking Committee, U.S. Treasury Department, and numerous state housing and banking departments to help evaluate foreclosure trends and address policy issues related to foreclosures.

About Harris Interactive
Harris Interactive is one of the world’s leading custom market research firms, leveraging research, technology, and business acumen to transform relevant insight into actionable foresight. Known widely for the Harris Poll and for pioneering innovative research methodologies, Harris offers expertise in a wide range of industries including healthcare, technology, public affairs, energy, telecommunications, financial services, insurance, media, retail, restaurant, and consumer package goods. Serving clients in over 215 countries and territories through our North American, European, and Asian offices and a network of independent market research firms, Harris specializes in delivering research solutions that help us — and our clients — stay ahead of what’s next. For more information, please visit www.harrisinteractive.com.

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Some Good Real Estate News! Pending Home Sales are Up!

Posted on December 6, 2010 by admin

Great news for the real estate industry…pending home sales increase an unexpected 10%!

The big question is…how many will close?

Here are a few things to consider:

1. If rates go up (which they are) how many of these pendings will fall out?
2. How many of these pending home sales are….short sales? If the listing agent is not educated on how to get their short sale listing closed…another pending home sale drops off.

With all of that said, there is NO QUESTION that an increase is GOOD NEWS for the real estate market and we really need that right now!

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Fannie Mae will Start Allowing 5% Down Payment to be a Gift

Posted on November 22, 2010 by admin

Soon to be a new year…time for new Fannie Mae lending standards:

NEW lending guidelines being rolled out by Fannie Mae will make securing a mortgage a lot easier for some borrowers but harder for others.

The rules, effective on Dec. 13, will allow buyers to use gifts and grants from nonprofit groups for their minimum 5 percent down payment, which is the threshold set by Fannie Mae, the government-owned company that sets lending standards and buys mortgages from lenders. (Freddie Mac is considering similar new guidelines, said Brad German, a spokesman.)

Previously, borrowers had to contribute a minimum 5 percent down payment from their own funds, but additional down payment money could be from a gift (though never from a home seller). The exception was for borrowers who put 20 percent down: all that money could come as a gift.

Because many lenders now require a down payment of 10 percent or more, the new rules mean that borrowers will still have to come up with extra funds — either their own or gifts.

I read that passage several times to be clear ….here is my translation: 10% down payment is required by most lenders. Half of that 10% can come from a gift, grant etc. In essence this is allowing buyers to buy with 5% of their own money down. For those downpayment challenged buyers the trick will be finding someone to give them 5% or being timely with the release of any grant money. Generally speaking, the grant money goes to certain buyers…in specific areas (read teachers, firefighters, police etc who are buying primary homes in areas deemed to need more stable homeowners.)

Still, “this is definitely going to help upgrade buyers and young couples who for whatever reason don’t have enough money and are getting some from their families,” said Edward Ades, the owner of Universal Mortgage, a broker in Brooklyn.

The gift rules apply only to single-family principal residences, including town houses, co-ops and condominiums, and covers mortgage amounts in excess of 80 percent of the property’s value. Also, there is a limit on the loan balance — $729,000 in high-cost areas like New York City, and $417,000 in other areas.

Now, the not-so-good news.

Fannie Mae is getting tougher on debt-to-income ratios, or the amount of a borrower’s gross monthly income that goes toward paying off all debts. The maximum ratio for those seeking a conventional mortgage will drop to 45 percent from 55 percent under the new guidelines.

The agency is also taking a harder look at payment histories on revolving debt. In the past, if a borrower missed a monthly payment, Fannie Mae ignored it, or required that lenders add a few percentage points to the total balance when calculating the debt-to-income ratio. Now, buyers who have missed a payment will have 5 percent of the total balance added to their ratios.

Mr. Ades said that new hurdle could sink many potential borrowers with student-loan debt that has been deferred.

Susan A. Kreyer, the president of the New York Association of Mortgage Brokers, added that buyers who had bought big-ticket items through financing with delayed payments would also be affected.

In addition, Fannie Mae is scrutinizing people who are at the end of their mortgages, with 10 or fewer payments left. It will now count those remaining balances in the debt-to-income ratios — another departure. Mortgage experts say that older buyers near the end of their loans may now have a tougher time securing a loan for a second home..

OK, so far their changes seem to make sense…now for the aspect of the new guidelines which should strongly encourage strategic walk aways to list their homes with a Short Sale Agent….

But perhaps the toughest news from Fannie Mae concerns borrowers who have gone through foreclosure. They will be excluded from obtaining a Fannie-backed loan for seven years, up from four. “That’s a long time in this economy,” Ms. Kreyer said. That change was announced separately from the gift and debt rules, but will also take effect in Fannie Mae’s automated underwriting systems next month.

SO, if you decide to walk away, you could be out of the housing market for SEVEN years….if you don’t do a short sale. Remember, short sales only take you out of the market for 24 months!

Fannie Mae buys or guarantees around $3.2 trillion in residential loans, about 28 percent of the entire residential mortgage market in the United States. Lenders typically issue loans based on the agency’s guidelines.

Buyers who do not meet the new Fannie Mae requirements may have to consider a nonconforming loan from the Federal Housing Administration. These loans, which do not follow Fannie Mae underwriting guidelines, require mortgage insurance premiums and, for those with low credit scores, higher interest rates and steeper down-payment requirements.

Source: NYTimes.

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Quantitative Easing- What Does It Really Mean?

Posted on November 19, 2010 by admin

If you ever wanted to fire anyone as bad as we want to fire Ben Bernanke you will get a kick out of this video. I am sure this is all over the internet now but just in case you have not watched it… here it is. This video has had 1,900,871 views so far!

They really know how to take something serious like this horrifying move of the Fed printing money and still get you to laugh. Actually you have to laugh! What other choice do you have when you realize how stupid and idiotic it is to print more money that you don’t have. I mean, if you or I did this, we would be in jail?  I am not an economist but Ben Bernanke has never owned his own business. I think that Donald Trump or Steve Jobs would be better in that job than Ben Bernanke is. And when you really get it- it just really amazes me that this is even allowed to go on and on and on…  The only one who benefits from any of this seems to be Goldman Sachs. Hmmmm, …

Feel free to reblog, I got this from Katerina Gasset & Tim Harris, and I don’t have my signature on here so you can blast it out to all your friends and their friends, etc.  Warning, there are a few curse words in the audio.

Quantative Easing Explained

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Strategic Defaults Gaining Momentum

Posted on May 11, 2010 by admin
Did you see the story about Walking Away from your Mortgage on 60 Minutes? What is a strategic default?  This occurs when the current homeowner is able to pay their mortgage but because they feel they are too underwater or simply are sick of the mortgage albatross, decide to stop paying.  So much for that pride of ownership.

According to a study conducted by the Kellogg School of Management. When the study was released it was estimated that 26 percent of current defaults were strategic in nature.

This is a trend that is picking up speed. The more negative equity you have the more likely you are to strategically default. According to the study by Kellogg School of Management, about $100,000. in negative equity is the tipping point where people will start to strategically default.

Is it tempting for you to just leave the keys on the table and get out from underwater? Does the option of renting for the next 4 to 5 years look pretty appealing to you right now?

  • Have you discussed your situation open and honestly with your real estate attorney who really understands the mortgage default law in your state?
  • Have you discussed the ramifications of your decision to walk away with your certified accountant who understands the IRS code regarding foreclosures?
  • Have you discussed your goals of what you want to accomplish with your strategic default with your Realtor® who actually closes on short sales that are strategic defaults?

If you have not looked at all your options- then please explore them before making a fast decision just because everyone else is doing it or just because you may have been sold some bad information.

A strategic short sale may be an option for you.

You may be able to negotiate down the balance you owe to a very small amount on which you can then execute a small promissory note for. Some homeowners have been able to get strategic defaults approved by offering pennies on the dollar of what they owed.

Strategic short sales on first loans are most often easy to get negotiated to approval.

HELOCS are another story- that is when you took out a home equity line of credit after you bought your house and then you used that money to buy cars or trips or pay for college tuition or to buy other properties. HELOCs are held in secondary position and there is not much benefit for them to foreclose on you.

So they most often will charge your loan off after you don’t make payments and then sell that debt to collection agencies who will seek to collect from you for a very long time.

Different states have different rules but in general the credit reporting agencies will leave that charged off debt on your credit report for 7 to 10 years. But the kicker is that when the time is near to get it released the collection agency sells the debt to another collection agency who then starts the process all over again.

How long can you hide from them? What state do you live in and how do your credit laws protect your assets or not in your state? Something to think about.

But you can negotiate a settlement with your HELOC and then that will wipe out the major part and the only part you will be now paying on and be liable for is the part you negotiated the debt down to. You are going to be asked to do that very same thing when the collection agency takes you to court to get a judgment against you. Why not take care of it now to avoid all of that hassle and stress later on down the road?

If you do a short sale and you are late on your payments only because your lender told you to be late in order to complete your short sale and you are doing the short sale because you are moving to another area for a job- FHA may allow you to buy a home right away.

Most homeowners who go into foreclosure will be able to buy another home in about 5 to 7 years but FHA will not approve your loan until you take care of your judgments. Have you thought about that?

If you do a short sale you can get an FHA loan or a Fannie Mae loan within about 2 to 3 years conservatively speaking. There are a lot of other differences in getting a future home loan after a foreclosure and after a short sale. You may want to visit the Fannie Mae website to find out more.

Nothing in this article is to be construed as legal advice. Please seek the advice of your attorney. I am not an attorney and I am not giving you legal advice.
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