Jennifer Young Homes BLOG

Mortgage Rates Take a Dive - But Will More Buyers Take Advantage?

Jennifer Young (Keller Williams Realty) — Tue, 25 May 2010 13:31:21 -0700

Here is some mortgage rate news that is catching a lot of people by surprise – mortgage rates have dropped below the 5 percent level. Now the mortgage companies, and the entire real estate industry, are waiting to see if these historically low mortgage rates will convert into more people buying homes and refinancing their existing mortgages. The Wall Street Journal is reporting that the low mortgage rates are happening as a result of the financial trouble that is unfolding in Europe. As the European financial markets continue to become more unstable, international investors are pushing their money into the U.S. in an attempt to seek safer grounds for their investments. The international in flow of investors has pushed mortgage rates here in the US to the lowest levels of the year – and back near 50-year lows, according to the Wall Street Journal. The housing industry had been bracing for a period of rising mortgage rates, triggered by the end of the Federal Reserve’s $1.25 trillion mortgage-securities purchase program. Instead, the WSJ writes, many in the industry now say rates could drift as low as 4.5 percent this summer from 4.86 percent now, instead of rising to 6 percent as some economists projected. That makes for significantly lower payments for buying homes or refinancing mortgages. Mortgage Rates prime for refinance The drop in mortgage rates creates a perfect environment for refinance your existing mortgages. With mortgage rates creeping down to near 50 year lows, you are sure to be able to find some great mortgage rates for your next refinance. CURRENT RATES from First Savings Mortgage Corp. Conforming 30 year is 4.75% and 0 total points 4.5% is 1 pt Conforming 7 year ARM is 4% and 0 pts Conforming 5 year ARM is 3,625% and 0 pts Conforming Jumbo (over $417k to 729,750) is 4.875% and 0 total and 4.625% is 1pt FHA 30 year is 4.625% and 0 pts and 4.375% and 1 pt FHA Jumbo (over $417k- $729,750) 4.75% and 0 pts and 4.375% and 1.5 pts The ability to get loans is most flexible in the loan amount cap of $729,750. You can buy a house for $756,000 and go FHA with 3.5% in this area. You can do conventional with PMI with 5% down up to $417,000 and with 10% down up to $729,750 loan. That means if you don't want to go FHA you can still put 10% down on a $800,000 house. The quickest way to get your loan approved is to Apply Online at www.kenbyrne.net (Free and No Obligation!)

FHA Short Sale Approved – Pre-Foreclosure Sale Approved by JP Morgan Chase in Sterling, VA (Loudoun County)

Jennifer Young (Keller Williams Realty) — Thu, 13 May 2010 11:26:46 -0700

Homeowner owes more than his home is worth, and since it is an FHA loan, this short sale took a little longer than others to get approved. This homewoner needed to avoid foreclosure on his home on Colonial Avenue in Sterling, VA. Chase has agreed to do a short sale with proceeds paid out to HUD, but with stipulations you can read below. One very positive highlight is, they’ve agreed to pay an incentive to the homeowner for closing the deal quickly – $1,000 at closing payable to the seller. The letter can be hard to read, so if you have any questions, feel free to call me at 703-400-6757 or email me at jennifer@jyhteam.com . If you know anyone I can help, let me know!

Great investment property in Woodbridge-Take a look!

Jennifer Young (Keller Williams Realty) — Tue, 27 Apr 2010 10:40:57 -0700

Investor Alert! Here is an Indymac foreclosure that we just put on the market for 116K last night. We already have cash offers and I think it will take 120-125K to get the property. It has some nice updates-kitchen, roof, etc.. but has a small area of mold in the basement and the bathroom has to be remodeled. It is a great price though, and it would be cash flow positive if you got an investor loan on it. See how the #s break down below: Purchase price of 125K with 25% down = $31,250 down, $93,750 loan amount. $93,750 @ 5.75 interest rate, 30 year fixed = $547 monthly taxes = $120 Hazard insurance = $50 Total Monthly outlay = $717 Average monthly rent = $1300/mo Total positive cash flow = $583 a month. *I think it would take about 5-7K to get it to average condition and able to be rented for this. Could be less but I think this is pretty accurate. Click the following URL to see the listing: http://mrislistings.mris.com/Matrix/Public/Portal.aspx?ID=36530881318 Let me know if you need more info or would like to see it. Thanks and have a great day!

Government Offers Incentives to Lenders to HELP Underwater Homeowners

Jennifer Young (Keller Williams Realty) — Fri, 26 Mar 2010 12:30:16 -0700

After months of criticism that it hasn't done enough to prevent foreclosures, the Obama administration is announcing a plan to reduce the amount some troubled borrowers owe on their home loans. The effort would allow people who owe more on their mortgages than their properties are worth get new loans backed by the Federal Housing Administration, a government agency that insures home loans against default.

This proposal would be funded by $14 billion from the administration's existing $75 billion foreclosure-prevention program. In addition, the homeowner's existing mortgage company can get incentives to lower the principal balances on underwater loans. The program also includes assistance to help unemployed homeowners keep paying their mortgages.

Here's how it would work...Under the plan, lenders would grant three months forbearance to homeowners who are out of work, according to two administration officials. To help borrowers who have been hurt by falling home prices, the government also will require mortgage servicers to consider cutting a loan's principal if it is up to 15% more than the home is worth, officials said. The principal would be reduced over three years as long as the borrower stays current on payments. In addition, servicers will get more incentives - double the amount the government now pays to lenders - if they reduce the unpaid balance of second loans.

The changes reflect a new attack by the Obama administration to address the foreclosure crisis, which at first was driven by subprime mortgages going delinquent, and now is being fueled by unemployment. The current program provides modified mortgages to homeowners who show proof of income. "The cost is going to depend on the participation rate. In terms of the cost to taxpayers, the cost of not doing something is greater than doing something," says Scott Talbott, senior vice president for government affairs at the Financial Services Roundtable. "Up to now, there was no government program to help the unemployed, and that was the biggest problem."

The current federal program, known as the Home Affordable Modification Program (HAMP), is aimed at helping up to 4 million Americans avoid foreclosure. So far, about 170,000 homeowners have been granted permanent modifications with lower monthly payments through the plan.

Also Thursday, the Treasury Department announced new measures that buy time for some borrowers to avoid losing their homes to foreclosure. Lenders soon will be unable to start foreclosures unless they've determined borrowers aren't eligible for a modification.

Other changes announced Thursday will provide other protections for troubled homeowners. They include:

•Ensuring servicers intervene once two or more mortgage payments are missed and actively solicit borrowers for the federal program.

•Setting a 30-day deadline for lenders to decide applications for trial modifications.

•Requiring servicers to consider borrowers who file for bankruptcy-court protection for the HAMP program if the borrower, their lawyer or bankruptcy trustee make a request.

The four big holders of second mortgages -Citigroup, Bank of America , Wells Fargo and JPMorgan Chase - have now joined the government's program to modify second mortgages. That program was delayed for months but with Citi on board, the major players in the industry are now participating.

Critics have complained that the Obama administration has done little until now to encourage banks to cut borrowers' principal balances on their primary loans. Nearly one in every three homeowners with a mortgage are "under water" - they owe more than their property is worth - according to Moody's Economy.com.

Government Offers Incentives to Lenders to HELP Underwater Homeowners

Jennifer Young (Keller Williams Realty) — Fri, 26 Mar 2010 12:29:33 -0700

Other changes announced Thursday will provide other protections for troubled homeowners. They include:

•Ensuring servicers intervene once two or more mortgage payments are missed and actively solicit borrowers for the federal program.

•Setting a 30-day deadline for lenders to decide applications for trial modifications.

•Requiring servicers to consider borrowers who file for bankruptcy-court protection for the HAMP program if the borrower, their lawyer or bankruptcy trustee make a request.

Government Offers Incentives to Lenders to HELP Underwater Homeowners

Jennifer Young (Keller Williams Realty) — Fri, 26 Mar 2010 12:29:24 -0700

Other changes announced Thursday will provide other protections for troubled homeowners. They include:

•Ensuring servicers intervene once two or more mortgage payments are missed and actively solicit borrowers for the federal program.

•Setting a 30-day deadline for lenders to decide applications for trial modifications.

•Requiring servicers to consider borrowers who file for bankruptcy-court protection for the HAMP program if the borrower, their lawyer or bankruptcy trustee make a request.

Manassas Short Sale Approval from Bank of America

Jennifer Young (Keller Williams Realty) — Tue, 09 Mar 2010 11:57:15 -0800

Bank of America Short Sale Approval for Manassas, Virginia home. Home owner is upside down but will walk away from mortgage owing nothing to her lender! Call Jennifer Young today if you need help anywhere in Virginia…703-400-6757. Jennifer Young Homes closes, on average, 4-5 short sales per month!

Another Loudoun County Short Sale Approval from Wells Fargo

Jennifer Young (Keller Williams Realty) — Mon, 08 Mar 2010 11:56:38 -0800

Home owner is upside down by $125,000 and will walk away from mortgage owing nothing to their lender! Call Jennifer Young today if you need help anywhere in Virginia…703-400-6757.

FHA TO TIGHTEN REGS

Jennifer Young (Keller Williams Realty) — Thu, 28 Jan 2010 08:22:21 -0800

The Federal Housing Administration, which is supporting the housing market by insuring thousands of new mortgages every day, is expected to announce on Wednesday that it is tightening standards. Borrowers who get an F.H.A.-insured loan will soon have to pay a higher initial insurance premium. The new premium will be 2.25 percent of the value of the loan, up from 1.75 percent. Starting this summer, sellers will not be able to offer as much help to buyers to pay their closing costs. The maximum amount of assistance will drop to 3 percent of the value of the property, from the current 6 percent. While most borrowers will still be able to make a down payment of 3.5%, lower scores will require higher down payment.

FHA Has Waived their 90 Day Flipping Rule!

Jennifer Young (Keller Williams Realty) — Wed, 20 Jan 2010 09:14:10 -0800

HUD TAKES ACTION TO SPEED RESALE OF FORECLOSED PROPERTIES TO NEW OWNERS Measure to help bring stability to home values and accelerate sale of vacant properties WASHINGTON - In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan today announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions: * All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction. * In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions. * The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program. Click the link below to access the announcement from the FHA web site: FHA 90 Day Flipping Waiver The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions: * All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction. * In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions. * The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

New Guidelines on Short Sales Meant to Speed System

Jennifer Young (Keller Williams Realty) — Mon, 18 Jan 2010 07:43:20 -0800

Financially-stressed homeowners left hanging while their banks consider whether to approve the short sales of their properties may benefit from new federal guidelines that give lenders a 10-day limit in which to respond to purchase offers. The rules from the U.S. Treasury, which also allow financial incentives for both sellers and lenders, could figure prominently in struggling housing markets all over the country. There are, however, limitations which include the stipulation that only banks that owe the federal government TARP bailout funds must comply. The Treasury rules, in addition to imposing a 10-day deadline for bank decisions, call for sellers to receive $1,500 moving allowances—and for the sellers to not have to repay any of the debt. Also, lenders will get $1,000 to cover administrative and processing costs, while investors owning the mortgages will receive a maximum $1,000 for allowing as much as $3,000 of a short sale’s proceeds to be distributed to less senior lenders. The 83 loan servicers participating in the Obama administration’s Making Home Affordable loan modification program are required to follow the guidelines for all borrowers who have requested short sales or who did not complete loan modifications. The rules do not specifically apply to loans guaranteed by Fannie Mae or Freddie Mac, which constitute about half of all U.S. mortgage debt. The two government-run mortgage companies are working on their own guidelines. In a short sale, the homeowner sells the property for less than what is owed on the mortgage, and the lender forgives the difference. Many single-family mortgage holders in Virginia are “under water,” meaning they owe more than their homes are currently worth if they were to be listed for sale in today’s market. The Treasury’s new plan is aimed at helping homeowners like the ones we help everyday must be implemented by lenders no later than April 2010.

Fannie Mae Adopts New REO Policy

Jennifer Young (Keller Williams Realty) — Mon, 11 Jan 2010 09:54:30 -0800

January 11, 2010 - In an effort to expedite REO sales, Fannie Mae has adopted a new policy. As part of this policy, Fannie Mae may accept offers to purchase homes it has repossessed without notifying loan servicers, and loan servicers may be required to reimburse Fannie Mae for a loss if it turns out the original mortgage on the home did not meet its eligibility or underwriting requirements.. Previously, if there was a question over whether a mortgage on a repossessed property met Fannie Mae’s requirements, servicers were given 15 days to turn over loan files for review. Rather than reimburse Fannie Mae for an incurred loss, loan servicers had the opportunity to try and find a better offer for the property or buy it themselves. The rules have changed, though. In a recent announcement to loan servicers, Fannie Mae said it has implemented a change regarding assurance reviews. When the company is notified that a property has been acquired, it will begin the disposition process by obtaining opinions on the market value of a repossessed home and list it with a real estate broker. “When Fannie Mae receives an offer to purchase a property that is also subject to an underwriting or servicing review, Fannie Mae may accept the purchase offer without first notifying the servicer, whether or not a final decision has been reached with respect to the review,” Fannie Mae said in its announcement. “If, after completion of the review, Fannie Mae determines that the mortgage loan did not meet its eligibility or underwriting requirements and Fannie Mae has incurred a loss by selling the property, the lender will be required to fully reimburse Fannie Mae for its loss.” These changes come after recent reports from Fannie Mae showing an increase in the acquisition of foreclosed properties and an escalating rate of seriously delinquent single-family home loans. According to its most recent quarterly report, Fannie Mae acquired 98,428 homes through foreclosure during the first nine months of last year and sold 89,691 REO properties during the same period. However, at the end of September 2009, Fannie Mae still had 72,275 REO properties on its books, marking a 7% increase year-over-year. Furthermore, Fannie Mae’s monthly summary for November 2009 showed notable growth in seriously delinquent single-family home loans held or guaranteed by the company. Up from 1.89% in November 2008, loans three or more months behind in payments or in the foreclosure process soared to 4.98% in November 2009. Article by RISMEDIA

ATTENTION! Mortgage insurance companies are adapting a similar rule as FHA in regards to flipping properties.

Jennifer Young (Keller Williams Realty) — Wed, 06 Jan 2010 13:41:38 -0800

ATTENTION! Mortgage insurance companies are adapting a similar rule as FHA in regards to flipping properties. This will impact the mortgage market starting 10/12/2009, not leaving us with much time. If you have Conventional buyers above 80% loan to value, please make sure the mortgage insurance has been ordered prior to this date. This is coming out at rapid speed 3 out of 5 mortgage insurance companies have adopted this rule. The other two are in the process and have strict requirements to do a loan under 90 days and I believe they will be changing their rules as well within the next couple of weeks. Also, ALL are requiring restrictions up to 180 days much like FHA does with requiring improvement details, appraisal reviews & extra underwriting requirements. Please prepare your buyers and sellers, this is something that will impact all of us. If you have sellers/investors, make sure they are making sound upgrades and keeping ALL receipts of services performed. Fannie Mae & Freddie Mac have not adapted this rule YET, but there are talks of doing so. Please be prepared. Below are a few guidelines of what is NOT a flip. •· A lender, mortgage investor or a mortgage insurance company that acquired the property as a result of a foreclosure or deed in lieu of foreclosure •· A spouse who acquired the property through a divorce settlement •· An employer that acquired the property through its relocation program •· An administrator, executor, or personal representative selling property of an estate

FHA Qualifying AFTER Short Sale

Jennifer Young (Keller Williams Realty) — Wed, 30 Dec 2009 07:59:56 -0800

FHA released underwriting guidance regarding handling transactions in which the borrower has experienced a short sale or will require a short payoff in order to refinance their existing mortgage. The guidelines reflect current market conditions due to the deterioration in property values in most areas of the country. An overview of the guidelines for short sales and short payoffs follow: When are borrowers eligible for a new FHA mortgage if they have experienced a short sale? - The short sale was for their primary residence, and - The mortgage payments on the prior mortgage were 0 X 30 days late preceding the short sale, and - All installment debts were 0 X 30 days late preceding the short sale. When are borrowers not eligible for a new FHA mortgage if they have experienced a short sale? - The short sale property was not their primary residence, or - The borrower took advantage of the declining market conditions to purchase a reduced price similar or superior property within a reasonable commuting distance, or - The short sale was a pre-foreclosure sale. (Borrowers may be eligible for FHA financing three years after the pre-foreclosure, unless the borrower can document extenuating circumstances and satisfactory credit prior to the circumstances beyond the borrower's control.)

First Time Home Buyers – FHA Tax Credit

Jennifer Young (Keller Williams Realty) — Tue, 29 Dec 2009 09:54:05 -0800

The latest from the FHA website shows that first time home buyers are those who are purchasing a “primary residence” for the first time. Are you trying to get an FHA loan and interested in this tax credit? FHA loans require you to live in the property you buy, so if you are approved for an FHA loan you meet the “primary residence” requirement for the tax credit. But this tax break is not just for those who have never purchased a home before. If you have not owned a home in the three years prior to the purchase of your new primary residence, you also qualify if you buy your home between January 1st, 2009 and December 1st, 2009. The 2009 Federal Tax credit requires borrowers to make no more than $75,000 per year for single borrowers and $150,000 for married couples filing a joint tax return. Married couples filing separately get more leeway with their incomes—you have a higher income limit in these cases. There’s just one catch; married couples who want the 2009 tax credit must BOTH be purchasing their first home. If either spouse has purchased a primary residence in the last three years, the couple cannot qualify for the $8,000 tax break. It’s important to know that simply having purchased property does not automatically disqualify you from this tax credit. If you have purchased a summer home or any other building that is not considered a primary residence—the place where you live most of the year—you may still qualify for the $8,000 tax credit.

More Foreclosures Slated to Hit in 2010

Jennifer Young (Keller Williams Realty) — Thu, 24 Dec 2009 09:53:22 -0800

Loan Modifications are Up, but so are Foreclosures. The estimated number of homes heading toward foreclosure reached 1.7 million units nationally, up from 1.1 million this same time last year. This data comes from third quarter numbers published this week by First American CoreLogic data. The increase is clearly affecting home sale rates, but at the same time, homes are selling at a faster rate this year than last. The visible inventory supply fell to 7.8 months in September 2009, down from 10.1 in 2008. But the supply of REO home estimates, also referred to as "shadow housing inventory" by mortgage lenders, is at 3.3 months, up from 2.4 months a year ago. Combined, the total unsold inventory by September 2009 reached 5.5 million units, down from 5.7 million in 2008. Shadow housing inventory is comprised of mortgages that are 90 days or more delinquent and that are not included in unsold inventory. This basically means that more homeowners are slated to be foreclosed on this year than last. If you or someone you know is behind on their mortgage and want to avoid foreclosure, call me today at 703-400-6757. I can give you real answers quickly. Don’t wait!

First Time Homebuyers can actually claim the tax credit on their 2009 return even if they purchase after the New Year!

Jennifer Young (Keller Williams Realty) — Mon, 21 Dec 2009 10:40:36 -0800

Homebuyer Credit Expanded and Extended The Worker, Homeownership and Business Assistance Act of 2009, signed into law on Nov. 6, 2009, extends and expands the first-time homebuyer credit allowed by previous Acts. Under the new law, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return. The new law also: * Authorizes the credit for long-time homeowners buying a replacement principal residence. * Raises the income limitations for homeowners claiming the credit. News release 2009-108 has the details, as do two new IRS videos in English and Spanish. Members of the military, Foreign Service and intelligence community serving outside the U.S. should also be aware of new benefits in the law that apply particularly to them. Following is general information for first-time homebuyers who settled on a new home on or before Nov. 6, 2009. For 2008 Home Purchases The Housing and Economic Recovery Act of 2008 established a tax credit for first-time homebuyers that can be worth up to $7,500. For homes purchased in 2008, the credit is similar to a no-interest loan and must be repaid in 15 equal, annual installments beginning with the 2010 income tax year. For 2009 Home Purchases The American Recovery and Reinvestment Act of 2009 expanded the first-time homebuyer credit by increasing the credit amount to $8,000 for purchases made in 2009 before Dec. 1. However, the new Worker, Homeownership and Business Assistance Act of 2009 has extended the deadline. Now, taxpayers who have a binding contract to purchase a home before May 1, 2010, are eligible for the credit. Buyers must close on the home before July 1, 2010. [Added Nov. 12, 2009] For home purchased in 2009, the credit does not have to be paid back unless the home ceases to be the taxpayer's main residence within a three-year period following the purchase. First-time homebuyers who purchase a home in 2009 can claim the credit on either a 2008 tax return, due April 15, 2009, or a 2009 tax return, due April 15, 2010. The credit may not be claimed before the closing date. But, if the closing occurs after April 15, 2009, a taxpayer can still claim it on a 2008 tax return by requesting an extension of time to file or by filing an amended return. News release 2009-27 has more information on these options. General Information Homebuyers who purchased a home in 2008, 2009 or 2010 may be able to take advantage of the first-time homebuyer credit. The credit: * Applies only to homes used as a taxpayer's principal residence. * Reduces a taxpayer's tax bill or increases his or her refund, dollar for dollar. * Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed. The credit is claimed using Form 5405, which you file with your original or amended tax return.

Foreclosures Slow – Short Sales Rise

Jennifer Young (Keller Williams Realty) — Fri, 11 Dec 2009 09:43:07 -0800

The foreclosure tide appears to be subsiding, according to the latest numbers from RealtyTrac. The company said Thursday that foreclosure activity fell 8 percent in November, compared to October – it’s the fourth consecutive month that data has shown a decrease in foreclosure filings. The numbers show foreclosure filings – default notices, scheduled foreclosure auctions, and bank repossessions – were reported on 306,627 U.S. properties during the month. That figure represents one in every 417 homes in the United States. Although the month-to-month tallies are showing improvement, the number of homeowners facing the loss of their home still equates to an ocean, and is 18 percent higher than in November 2008. However, last month’s foreclosure numbers are down 15 percent from the all-time high hit in July, and at their lowest mark since February of this year. James J. Saccacio, CEO of RealtyTrac, says the industry’s efforts to keep people in their homes are paying off. According to RealtyTrac’s data, default notices nationwide in November were down 8 percent from the previous month, while scheduled foreclosure auctions were down 12 percent and bank repossessions were flat. At the state level, the same usual suspects are still leading the nation in foreclosure activity, but even these hard-hit housing markets are beginning to show signs of improvement. Here in our neck of the woods, we’re seeing a major increase in calls from homeowners looking to Short Sale their homes. Many have contacted their banks over and over again to find relief from mortgage payments they simply can’t afford anymore. Here’s one recent scenario of a call I had recently: A homeowner in Woodbridge, VA was upside down on their home-they owed 425K on a property that was now worth only 150K. They also had financial troubles because their ARM had adjusted and increased in payment while their hours had been cut at work and they weren’t able to keep up with the payments. They even were foregoing their medicine to try to stay current with their mortgage and just couldn’t do it any longer. They had contacted a loan modification company who they paid $2500 up-front to help them and they hadn’t heard anything back from them in 5 months! Unfortunately this money is long gone and the loan modification just wasn’t going to happen. We worked with them to list their home as a short sale and they will soon be able to walk away from their home , owe their bank nothing and start over fresh. We expect their short sale to be officially approved by the year. If you know anyone in a similar situation, we can help! Please contact us before you or your friends spend money up-front to do a loan modification that may never actually happen. We are Certified Home Rescue Experts© and we can help you explore your options in this market. Call me anytime at 703-400-6757.

Quarter of Loan Mods in Default AGAIN

Jennifer Young (Keller Williams Realty) — Wed, 09 Dec 2009 10:41:21 -0800

More than 25 percent of homeowners who have received assistance under the administration’s Home Affordable Modification Program (HAMP) have fallen behind on their new payments – a harrowing statistic that has stirred up more doubt about the effectiveness of the government’s $75 billion foreclosure prevention campaign. Citing data from a Treasury Department survey of the nation’s largest mortgage servicers, Assistant Treasury Secretary Herbert Allison told a congressional oversight panel that only “73 percent of borrowers are current in their trial plan payments,” according to a written Q&A document obtained by Reuters. The Washington Post also noted that Allison’s comments to the panel included a redefault forecast of 40 percent for HAMP restructurings, which in all actuality would be an improvement over the track record for non-program modifications. Data from the Office of the Comptroller of the Currency shows that 52 percent of mortgage modifications made in early 2008 had become delinquent again after one year. Converting borrowers from the trial phase to permanent modifications has become HAMP’s latest sticking point. Last week, the administration announced a new push to pressure servicers into converting more trial mods to “permanent” status, threatening to impose fines, withhold incentive payments, and resort to public humiliation of those companies that don’t pick up the pace. According to DS News’ Washington Bureau, the Treasury summoned representatives from the 10 largest servicers for a closed-door meeting Monday morning, presumably to ensure each is pulling their weight to meet the Department’s year-end deadline for permanent modifications. The Treasury is expected to release new numbers outlining servicers’ performance under HAMP later this week, but based on the November report, 650,994 trial mods were underway as of the end of October. Administration officials say 375,000 of those are scheduled to convert to permanent modifications by the end of the year, and they’re pressing servicers to get the paperwork moving and ensure this number is met. Banks say they are working overtime to fulfill the Treasury’s request, but the biggest obstacle is getting borrowers to submit the additional documentation for conversion to permanent status. According to Bloomberg, Bank of America is trying to make 65,000 trial mods permanent by December 31, but roughly 20 percent of those borrowers haven’t returned the paperwork required. By Carrie Bay DSNews.com

Foreclosures Still Outpacing Loan Mods

Jennifer Young (Keller Williams Realty) — Mon, 07 Dec 2009 12:20:56 -0800

The mortgage servicing industry completed 271,563 total loan workouts in October, according to Hope Now, the private sector alliance of mortgage servicers, investors, insurers and non-profit counselors.

Workouts included 198,373 repayment plans and 73,190 modifications. At the same time, the industry completed 94,450 foreclosure sales and initiated another 222,107 foreclosure starts.

Total 316,557 foreclosure sales and starts outnumbered modifications more than 4 to 1 and repayment plans about 1.6 to 1. Hope Now attributes some of the slow-down in modifications to the Home Affordable Modification Program (HAMP) sponsored by the US Treasury Department.

Under HAMP, the Treasury allocates capped incentives to servicers for the modification of loans on the verge of foreclosure. Hope Now’s reported modifications have slowed as servicers began implementing HAMP, which requires a three month trial period to ensure borrower affordability of modified payments before a HAMP modification is considered permanent.

Servicers are pursuing HAMP modifications before repayment plans — slowing down reported repayment plans — and have to wait through HAMP trials before reporting permanent modifications — slowing reported modifications. Despite the slow reporting of permanent HAMP modifications, the Treasury has said more than 650,000 trial modifications are underway, putting HAMP on track to reach a target 3m to 4m homeowners in three years.

“Our number one priority is to convert HAMP modifications, but also do our best to help borrowers with all solutions available,” said executive director Faith Schwartz in a statement. “This sometimes means a graceful exit via short sale or deed in lieu if a borrower has no other options.”

Short sales might become more prevalent among servicers, now that Treasury will offer incentives through the Home Affordable Forelclosure Alternatives (HAFA) program. HAFA will complement HAMP by providing financial incentives to servicers, borrowers and investors that go forward with short sales or deeds-in-lieu of foreclosure, according to a Treasury announcement late Monday.

Currently, Hope Now only reports HAMP activity when trial mods become permanent, creating the appearance of a slow start to HAMP. It remains unclear how many trial mods have become permanent, although the Treasury said HAMP is on track to boast 375,000 permanent modifications by year-end.

Hope Now expects to change its reporting of industry workouts soon to account for activities outside of HAMP. More comprehensive reporting of industry efforts would likely begin in Q110.

By DIANA GOLOBAY of www.HousingWire.com

Fannie Raises Minimum Credit Score to 620!

Jennifer Young (Keller Williams Realty) — Fri, 04 Dec 2009 08:45:40 -0800

Here is an article I found this morning - It's one more hurdle for buyers to jump through. Of course, now that there are better "conventional" loan rates and plans available out there (98% funding without MI), the decision might not have as huge an impact as it might have this time last year. We seeing that with so many cash investors buying up everything they can find in our market, sellers are typically reaching to the buyers with conventional loans as their #2 contract choice, not FHA funded buyers. Here's what Jon Prior of www.HousingWire.com wrote in his article...

As the Federal Housing Administration (FHA) considers raising the minimum credit score requirement for new borrowers to reduce risks to the single-family insurance fund, Fannie Mae has now jumped ahead, increasing the minimum borrower credit score from 580 to 620.
Brian Faith, a spokesperson at Fannie, confirmed the minimum hike to HousingWire, adding that the adjustment reflects a careful analysis of borrowers' ability to repay their mortgage obligations over the life of the loan.
"Our experience with recently delivered loans with credit scores below 620 is that they reached a level of serious delinquency at a rate approximately nine times higher than other acquisitions during the same period," Faith said in a statement.
Fannie also reduced the allowable debt-to-income (DTI) ratio to 45% when executing loss mitigation efforts under the Home Affordable Modification Program (HAMP). Under HAMP, the US Treasury Department provides allocated capped incentives to servicers for the modification of loans on the verge of foreclosure.
Faith said that high DTI ratio loans also have higher levels of serious delinquency.
"It's not enough to help borrowers buy a home - we must also ensure that they can stay in the home over the long term," Faith said.

Treasury Works to Simplify Short Sales - We're Seeing More Success Already!

Jennifer Young (Keller Williams Realty) — Wed, 02 Dec 2009 07:44:46 -0800

NEW YORK (Reuters) - The U.S. Treasury on Monday set long-awaited guidance on a plan for mortgage companies to speed "short sales" of homes and other loan modification alternatives to stem a rising tide of foreclosures.

The Home Affordable Foreclosure Alternatives Program provides financial incentives and simplifies the procedures for completing short sales, a growing practice in which a lender agrees to accept the sale price of a home to pay off a mortgage even if the price falls short of the amount owed, according to an announcement on the Treasury's website.

Guidelines address barriers that have often sidelined short sales by setting limits on the time it takes a bank to approve an offer, freeing borrowers from debt and capping claims of subordinate lenders.

The incentives, first announced in May, expand on the government's Home Affordable Modification Program, known as HAMP, that has seen limited success in lowering payments for distressed homeowners. The Treasury earlier on Monday stepped up pressure on mortgage companies to make permanent the 650,000 trial modifications they have started.

"While HAMP program guidelines are intended to reach a broad range of at-risk borrowers, it is expected that servicers will encounter situations where they are unable to approve" or offer a modification, the Treasury said in its announcement.

Financial incentives for completing short sales or similar deed-in-lieu transactions -- in which the deed is simply transferred to the lender -- include a $1,000 payment to servicers, and a maximum of $1,000 to go to investors who sign off on payments to subordinate lien holders, the Treasury said. Borrowers would receive $1,500 in relocation expenses.

Short sales are favored by real estate agents and community groups over foreclosure because they can preserve the borrower's credit rating and leave the property in better condition than when a homeowner is evicted. While primary lenders typically realize steep losses, their recovery is typically far better than under foreclosure.

But short sales have been frustrating for borrowers and real estate agents, often hung up by negotiations with multiple lien holders and mortgage insurance companies. Real estate agents have complained that sales fall through as lenders bicker over the sales price, what they should receive from the proceeds, and whether the borrower will be held accountable for the debt in the future.

Among requirements, mortgage servicers have 10 days to approve or disapprove a request for short sale, and when done the transaction must fully release the borrower from the debt.

It also prohibits mortgage servicing companies from reducing real estate commissions on the sale, a practice that has dissuaded many agents from taking short sale listings.

In one of the most contentious issues gumming up negotiations between lenders, the guidance caps the aggregate proceeds to subordinate lien holders at $3,000.

Second lien holders in recent months have begun demanding more money from the first lender, seller, buyer or agent in exchange for releasing their claim, agents have said. Because primary lenders would face larger losses in a foreclosure, some subordinate lenders have felt empowered, the agents said.

The largest second-lien holders are Bank of America Corp, Wells Fargo & Co, JPMorgan Chase & Co and Citigroup Inc.

Second lien holders may proceed with a short sale outside of the Treasury program, if they felt the cap was too low, a Treasury official said in October.

"If there was a short sale program that didn't recognize the second lien holder position, it could have pretty damaging consequences for the industry," Sanjiv Das, chief executive officer of CitiMortgage, said in an interview last week.

Are There Any Foreclosure Deals Left?

Jennifer Young (Keller Williams Realty) — Fri, 13 Nov 2009 12:40:53 -0800

For the eighth straight consecutive month, national foreclosure activity in the U.S. was dominated by a small set of states.
As reported by RealtyTrac.com, more than half of October's foreclosure-related activity came from just 4 states:
1. California
2. Florida
3. Illinois
4. Michigan
The remaining Top 10 states in terms of total foreclosure activity included Arizona, Georgia, Texas, Ohio, New Jersey, and Maryland.
Foreclosures are up 19 percent from last October, but a deeper look at the RealtyTrac report revealed two positive developments for the housing market.
1. Foreclosure activity is down 3 percent from last month
2. Foreclosures per Household decreased in 9 of the 10 most heavily concentrated states
Furthermore, Nevada's foreclosure pace is down 4% from last year. This is a big deal because Nevada has long led the nation in foreclosure-related activity. Until last month, Nevada's year-to-year foreclosure rate hadn't fallen in more than 4 years.

According to an industry trade group, distressed homes account for nearly one-third of home resale activity. Distressed homes range from foreclosures, foreclosure auctions and short sales, etc. We're seeing numerous short sale listings go to closing within 2-5 months now, and for great prices - call me anytime for more info. And if you know someone else who's upside down in the mortgage and needs help...tell them not to wait for their bank to decide their fate - Take Back Control! Call 703-400-6757 today. Thanks to Ken Byrne, Vice President for Residential Lending of First Savings Mortgage Corp (703-883-9582 ) for some of the content in this posting.

Bill Introduced to EXTEND $8,000 First-Time Buyer Tax Credit to June 2010!

Jennifer Young (Keller Williams Realty) — Thu, 24 Sep 2009 08:55:22 -0700

On Wednesday afternoon, Senator Ben Cardin introduced S. 1678, extending the $8,000 first time homebuyer tax credit for another 6 months to June 1, 2010. The current tax credit is set to expire on December 1, 2009. The bill has 4 co-sponsors: Ensign, Reid, Isakson, and Stabenow.

First Time Buyers Are Scrambling - Sellers Reap Rewards!

Jennifer Young (Keller Williams Realty) — Thu, 24 Sep 2009 08:47:57 -0700

This market is unlike any that I have seen over the past 8 years. Buyer activity is SOARING and inventory is down, which has buyers racing to get their contracts noticed and accepted, all while the first-time home buyers tax credit quickly ticks away. The number of contracts written (offers) versus the number actually accepted and pushed to closing is the biggest indicator of this shifting market, as that ratio is at its highest level in years. My team recently sold a property at 13854 Laura Ratcliffe Ct. in Centreville, VA, which was listed for $235,868, but which actually closed on August 28^th for well above asking price. The terms of the various offers made on that property exemplify these shifting trends:

Buyers were given one week to get their highest and best offers in and 8 were registered. The

highest offer was for 265K w/ FHA financing, almost $30K above asking price. However, by the

end of the week, the seller had accepted an offer of only 240K, the difference being that that

contract had conventional financing and an EMD of 1% of the offer price.

This is a prime example of what prospective buyers are currently facing in this market, and with the obvious exception of the significantly depressed prices, it actually harkens back to the market we experienced in 2005-2006, at the ‘peak' of the last up-cycle. The obvious difference is the lower prices, but with the $8,000 tax credit expiring soon, frantic buyers are scrambling and multiple contract ‘bidding war' situations are slowly beginning to elevate prices. There are more qualified first-time home buyers now than ever before, and there simply are not enough affordable listings to satisfy that demand. Therefore, so-called "hot properties" (those which show well and which are priced at, or just below, current market value) are creating multiple offer bidding-war situations, and are often commanding premiums above current market value, particularly those priced below the critical $200K price point. Take for example a 3 bed/3.5 bath townhouse listing we currently have in Herndon: it was priced just below current market value at $202K, and we received 18 contracts within 6 days of listing! Although demand is particularly high for properties priced below $200K, due to the overall current low inventory across ALL price ranges, we are seeing similar ‘bidding wars' even for "hot properties" in the luxury home markets. The low inventory can be attributed to the bank foreclosure moratoriums and a dearth of ‘retail' or regular listings - since prices are lower, many potential sellers are simply holding off, hoping to see the market bounce back up before listing their homes. Thus, current ‘retail' or regular listings consist primarily of only those sellers who really want and need to sell now - those who can afford to wait are generally doing so. That being said, I highly recommend to those who have to sell their home within the next year to do so NOW so as to take advantage of this enhanced buyer demand caused by the low inventory and the soon-to-expire first time home buyer tax credit. You will get maximum exposure and maximum contracts by listing now, again, the key being to make your property a "hot property" - that is, a property which is reasonably priced (ideally just below current market value), which is aggressively marketed, and which shows well so that it appraises under many different financing scenarios. While I don't think we will find ourselves anywhere close to the 2005-2006 prices anytime in the near future, we are seeing positive signs in the current market, and it will be interesting to see how things shake out over the next year, as additional foreclosures will inevitably hit our market, and after the $8K first-time buyer tax credit expires on December 1^st.

Finally, good luck to those first-time buyers out there. Remember, in order to compete with those cash investors who are swooping in and picking up many of the good deals, be sure to investigate all your funding options, to include 1) conventional whenever possible, 2) as much cash down as possible, 2) higher EMD amounts and 4) low or no concessions whenever possible. Cash buyers simply avoid a lot of the issues that buyers with FHA and other financing options engender, such as appraisal and underwriting requirements. Therefore, first time buyers should be sure to work with a competent lender and should discuss the multitude of creative ways to make your offer look stronger than the others!