White Bear Lake, Hugo, Forest Lake Area Real Estate Blog

August Foreclosure Statistics are in.

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Fri, 02 Oct 2009 10:06:21 -0500

Looks like the number of foreclosures is going up again. The reports from RealtyTrac has shown that 358,000 foreclosure notices were received by homes, Nationwide in August 2009. They are reporting a 18 percent increase over last August 2008. It is also the fifth straight month that the number of foreclosure notices were over 300,000.

Here in Minnesota the report is that 3688 homes received notice of foreclosure in August 2009 making the new year to date total 25235. The number of Bank Owned Properties for August 2009 was 551 for a total of 4373 year to date. That is giving us a total of 1 house in every 625 that are in foreclosure. Even though it foreclosure rate dropped from July 2009 it is still a 70 percent increase over August of 2008.

There is also starting to be a increase of defaults on the commercial market as well. I was out showing commercial properties on Tuesday to one of my clients and there are a ton of empty lease units out there. Lease rates are declining and incentives are increasing. I was also supprised by the number of commercial properties that are willing to sell units on a Contract For Deed. I think this is because of the lack of available credit. It is difficult for most commercial property owners to qualify for a mortgage, which is impacting the current market just like it is for residential properties.

If you have questions regarding foreclosures or any other realestate matters please contact us today.

The Janos Group
Real Estate Affiliate Services, Inc.
White Bear Lake, MN 55110
651-407-7803

The statistic numbers listed above were obtained by RealtyTrac and are not gauranteed by The Janos Group.

Are you still sitting on the fence? The $8000 First Time Homebuyer Tax Credit Ending Soon

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Thu, 10 Sep 2009 09:43:02 -0500

Are you still sitting on the Fence?

As many of you know the $8000 tax credit ends on December 1st, 2009 which means you MUST be fully closed on your home by November 30th, 2009, so if your still sitting on the fence waiting to buy a home you need to get busy and buy now.

I am sorry to say that I would recommend that you DO NOT waste your time looking at Short Sale Properties, if you wish to get the tax credit, as many of them can take up to two or even three months just for the banks to decide if they will accept your offer. This may not give you enough time to get everything completed in time for you to close on your house prior to the December 1st deadline.

Remember there are many items that need to be completed in order for any closing to be completed on time, IE... all mortgage paperwork, appraisal, inspections, underwriting of mortgage, title searches, updated credit and employment checks, title work, etc. All these items can often take 30 days or more to complete, and must be finalized in order for the closing to take place.

Homebuyers looking to get the tax credit can still look at Bank Owned Properties and "Normal Listings", and often still get those closed in time for the tax credit but you need to act NOW!

There are still rumors floating around that Congress MAY extend the tax credit but as usual with the Government, you never know, and can you afford to hold out and hope for the best?

So get busy and get off the fence and call us today.

The Janos Group
ReMax Specialists
4910 Highway 61
White Bear Lake, MN 55110
651-407-7803 Office
651-407-7804 Fax
Tom@TheJanosGroup.com
www.TheJanosGroup.com

Hugo Minnesota will be having a 2nd Good Neighbordays this weekend.

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Wed, 10 Jun 2009 13:11:19 -0500

For those that live in our area and missed the yearly Hugo Good Neighbor Days last weekend or had a great time there like the rest of us... Well, they are doing it again this weekend, June 12th and 13th.

Due to weather conditions last weekend they decide to play it again so be sure to come out and support the community and have a good time.

Looking to Modify Your Mortgage?

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Wed, 10 Jun 2009 12:54:12 -0500

I have had two people contact me this week asking about modifying their mortgage. The reason I decided to bring this to my blog was because both were mislead by past advice and luckily they thought to look into it more before committing. One was going to work with a company from another state and pay them before they did any work. I am not an expert in this area of real estate but here are a few points that I have ran across in the past.

There are a few points I would like to make for homeowners in trouble trying to get a modification of mortgage.

DON"T pay anyone in advance to assist you in the modification because they have not performed yet and I do beleive it is illegal for them to do so.
DON'T work with a company that is in a different state as their laws may differ then ours.
If you are low on cash and living paycheck to paycheck, find a part-time job.
DON'T put off calling your lender when you discover you will have difficulty making your monthly payments.
If your credit is not up to par, try and repair it before you refinance your loan. Seek assistance if needed.
If your loan is modified, your interest rate may be a little higher due to your poor credit.
DO talk to an attorney if you feel that there is a need to do so.

Once you have received a modification, make your payments on time to improve your credit.

You can also get the modification completed on your own but it will take a lot of work on your behalf and you MUST keep calling the mortgage company over and over and over again even if they refuse you the first time.

Prior to calling for a modification you need to do your homework and have a workable plan that you can afford to live on and your lender would be willing to accept. You must PROVE to them that your plan will keep your loan as a performing loan as it is a commodity for them.

You should work on your finances BEFORE contacting your lender. This means you need to know how much income you have coming in every month, what the total amount of your monthly bills and if they can be adjusted. I recommend creating a full financial report with all your assets, and debts listed. This includes your fun and enjoyment expences ie... cable, internet, cell phone, etc.

There are many nonprofit counseling services that you can contact to help you put together this financial report at no cost. Many of these counseling services will be willing to work with you and your lender.

You will need to devise a plan to submit to the lender on how you propose to pay off the loan, again the counseling service may be able to assist you with this plan.

Now your finally ready to contact the lender and tell them what your financial situation is and what your plan to repay the mortgage is. When you submit this plan the negotiation can begin.

A few sites that can assist you are listed below.

Consumer Credit Counseling: http://www.cccsstl.org

National Foundation for Credit Counseling: www.nfcc.org

US Dept of Housing and Urban Development: http://www.hud.gov/offices/hsg/sfh/nsc/faqlm.cfm

Home Buyers Love our ListingBook Home Search Program

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Tue, 02 Jun 2009 10:46:23 -0500

Well we are coming up to a year now that we have offered our Home Buyers and Sellers the ability to search for homes and competition homes with the ListingBook Program and they love it.

If you have never tried ListingBook for your property searches you are missing the boat. It has many features that most websites do not have that makes the home search easier and more efficient.

ListingBook is a free account and loaded with powerful and helpful tools you will not find in any
other service. It is extremely easy to use. There is PDF Files and Web Seminars for training if needed.

We have clients that are not Tech Savy when it comes to computers and they are usually up and searching with in 15 minutes or so.

With Listingbook buyers can easily:

Find any home in the Multiple Listing Service- just like we do!
Make an informed decision and find your dream home quickly.
Receive automatic notification of price reductions and new listings.
Use Post-It Note or IM features with me that saves time on phone calls and emails.
Updated listings every 10 minutes instead of once a day like all other websites.
Full photo and virtual tours viewing.
Full property information.
Daily Morning Report that you will get via email every morning that will notify you of all new listings, price reductions, weather, and more. (A true time saver).

With Listingbook sellers can easily:

Stay informed about new listings and price changes in your neighborhood.
See how many people are interested in your home, and get measurable results of my marketing efforts to get your home sold.
Daily Morning Report that you will get via email every morning that will notify you of all new listings and price reductions in your neighborhood, weather, and more

For your free account please contact us and we can get you set up. Again there is NEVER any cost to you for this great program and it only takes us about 5 minutes to get your free account set up.

The Janos Group
Remax Specialists
4910 Highway 61
White Bear Lake, MN 55110
651-407-7803
Email: Tom@TheJanosGroup.com
Website: www.TheJanosGroup.com

Many Home Buyers are having a hard time finding homes.

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Tue, 02 Jun 2009 10:25:29 -0500

Good Morning Everyone,

I just wanted to take a moment and give you all an update on what is currently happening in the market today. The last two months have been a bit frustrating in the real estate market for Realtors and Buyers.

As many of you buyers can see in your property searches, there has been many Sold and Pending homes which is good for Sellers, but, the number of new listings has dropped dramatically in the last few months, which is bad for Buyers. The last two weeks especially. I am not sure why that is unless it is because of the Holiday. Normally Holidays are slow the week before and the week after. Hopefully it will pick up this week and we will get more new listings.

The bad thing is most homes priced below $150,000 are selling in multiple offers. I do not mean 2 or 3 offers per property... They are going with 15 or more offers per property.

Last week we lost an offer that I wrote $25k over asking price and we were still not the highest offer. There were 22 offers plus ours on this property. This can be frustrating for me and for our home buyers.

Just to give you an idea... We have written 19 offers last month many over asking price, and all were bank owned properties, and we only won 2 of those offers. The frustrating thing is that many of the good bank owned properties are sold prior to coming on the MLS and many still in multiple offers from investors coming in with Cash offers.

What does this mean for you as a home buyer? It means if you find a house you like we need to act on it right away and get our offer submitted and we need to write our best offer the first time because we are not getting a chance to do so later.

We work for you so if you want to still try and get a good deal on a home and submit a low offer that is fine with us as our job is to keep you happy (and get invited to your house warming party), but I want you know that low offers are having a hard time getting accepted in multiple offers.

Also go back in your search results and look at some of the properties that have been on the market a while. Some of these are still going in multiple offers but the ones that are not can still be taken with lower offers and the banks are dropping the prices on them.

The good thing is that rumor has it, that there is supposed to be two more waves of Foreclosure properties hitting the market over the summer so we will get more homes to look at.

I wish I had better news for you all but please keep looking and try not to get to frustrated if you can't find a house or if you have submitted offers and lost. You WILL eventually find the right house for you, it just may take longer then planned.

Possible Changes to the $8000 First Time Home Buyer Program

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Tue, 02 Jun 2009 09:49:22 -0500

Hello again everyone.

I forgot to mention in my last blog entry about a few changes that are in the works in Washington DC that MAY effect this program. Our representatives for the Government Affairs Committee at the St Paul Association of Realtors brought these possible updates back from the National Realtors Capital Hill visit in Washington DC last month.

Remember these items are not Voted on yet but have been presented only. They may or may not pass.

Congress it thinking of extending the date from December 31st, 2009 but no definite date has been recommended as of yet.
They are considering making this program available to ALL home buyers not only first time buyers.
There is even talk of raising the dollar amount.
One of the proposals is to also include 2nd homes for Snow Birds and Cabin Owners.

These would be great add amendments to add to the current program and hopefully Congress will pass them.

$8,000 for First Time Home Buyers

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Tue, 02 Jun 2009 09:36:51 -0500

If you are one of the first time home buyers sitting on a fence right now, this program may bump you off the fence and into your new home. Could you use $7,500? Well, guess what? If you qualify, it's yours! And it's not tough to qualify!

The government is offering this $8000 to any first time home buyer that purchases a new home until Devember 31,2009. To qualify you must be a US citizen (or qualified "nonresident alien") and make less than $75,000 a year. ($150,000 for married couples filing jointly). You also have to be a legitimate 1st time home buyer OR you can't have owned a home in the last 3 years… This means if you owned a home before and then became a renter again for 3 years or more you qualify again as a first time buyer. That's it! Your tax person can go into more detail for you.

How does it work?

If you owe less than the $8.000.00 for taxes, the IRS cuts you a check for the difference. If you were owed a refund, add the $8.000.00 to your refund amount and that's what you'll receive. So, for example, let's say you owe $1,500 at tax time and your 1st time home buyer credit is $8.000.00 . (8000-1500=6500) You will get a refund check in the amount of $6,500.

If, for another example, you are owed a refund of $1,500 and your 1st time home buyer credit is $8.000.00 (8000+1500=9,500), you will get a check in the mail for $9,500. How cool is that?

There are no restrictions on the type of home: single family home, townhome, condo, new construction, or resale AND if you are a married couple filing separately, your credit will be split - $4,000 to each spouse.

Home Buyer Tax Credit: The 2008 tax credit provision has been amended as follows:

a. Tax credit is increased to $8,000

b. The income limits remain the same: ($75,000 for an individual; $150,000 for a couple).

c. First-time homebuyers and principal residences only. First time home buyer is defined as the purchaser (and the purchasers spouse) may not have owned a home in the three years prior to the purchase date of the home.

d. Tax credit is available until December 1st (previously it expired on July 1st).

e. Waiver of recapture (i.e. no repayment requirement) for properties purchased in 2009 prior to December 1^st

Ø The provision is retroactive to purchases made on or after January 1, 2009.

Ø Recapture section does apply to properties sold in first three years.

f. Waiver of prohibition on financing by mortgage revenue bonds is included.

For more info visit:

http://www.federalhousingtaxcredit.com/

Woodbury First Time Home Buyer Program

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Wed, 22 Apr 2009 06:21:24 -0500

Woodbury First-time Home Ownership Program

Woodbury now has a First-time Home Ownership Program that is designed to encourage home ownership in the City of Woodbury by providing financing to low and moderate income first-time purchasers.

This program is a low-interest, deferred loan of up to $25,000 to qualified families who earn no more then 80% of the area mediam income. The current amount of $64,000 for a family of four.

Any person or household that has never owned a home or has not owned a home in the last three years, qualify as a first time home buyer.

The purchase price of the property may not exceed $236,500.

All single-family detached houses, townhomes and condo units are eligible for this program.

Many cities now are creating new programs for 1st time home buyers.

For more information please contact our office.

The Janos Group

651-407-7803

New homebuyer program in Woodbury on foreclosure properties.

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Wed, 22 Apr 2009 06:14:49 -0500

Woodbury Foreclosure Purchase Program

Are you looking to buy a home in Woodbury? Are you looking at foreclosures?

Well I have good news for you... Woodbury has a new program that many Realtors and Loan Officers are not aware of. If you buy a foreclosure property in Woodbury you can get a low interest loan for your 2nd mortgage.

How does the program work?

The Woodbury Foreclosure Purchase Program is designed to get homebuyers to purchase foreclosed properties in the City of Woodbury. To do that they are providing financing to low and moderate income homebuyers.

This is a low interest, deferred loan of up to $25,000. It is focused on qualified families who earn no more than 115 percent of area median income, capped at $90,000 per household.

The maximum purchase price of the property can not exceed $236,500.

Single-family detached houses, townhomes or condo units are eligible for this program.

For more information on this program please contact us.

The Janos Group
651-407-7803

Which is better for you? Short Sale or Foreclosure?

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Wed, 25 Mar 2009 22:40:38 -0500

Many homeowners that are in Pre-Foreclosure have no idea what the difference is between a foreclosure and short sale and how they will effect their FICO score.

The initial credit hit of a foreclosure and a shortsale are virtually the same. Mortgage experts tell us that there will be up to a 300 point credit hit when you do a foreclosure or a short sale.

So why would you bother to do a Short Sale and not just walk away from your home and let the bank deal with it?

The difference is how long your credit will be effected and if there will be any deficiency judgments filed against you.

There are definite advantages to going through the Short Sale process and it has nothing to do with your credit score.

Fannie Mae recently established a 2-year elapsed time period for reestablishing credit for homeowners that chose the Short Sale option over the foreclosure option. 2-years may feel like a long time to become a homeowner again but compared to what will happen if the homeowner goes through a foreclosure. Fannie Mae's guidelines effective May 31st, 2008 state that a homeowner who has filed a foreclosure will be ineligible for a mortgage loan for 5-years.

Another benefit of doing a short sale is that when a house is sold at auction (foreclosure), the chances of the lender filing a deficiency judgment increases. What is a deficiency judgment? It is a debt that has to be paid. They are a debt that can only be removed by paying them off or by filing bankruptcy. They often will earn interest over time and can effect your employment wages.

A judgment will be base on many factors such as the amount owed on the loan and what the property sells for, REO (Real Estate Owned) fees, handling fees, attorney fees, etc. This amount can become very large, very fast and can often keep you from buying a new car, new home, and can even cause your insurance premiums to go up. This debt will effect you much longer then the 2-years from the short sale.

Did you know Realtors have lives outside the Real Estate Market?

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Fri, 06 Mar 2009 14:22:04 -0600

Did you know Realtors have lives outside the Real Estate Market?

I thought I would take a moment to make a few comments regarding one of the current events in the Stillwater area last night. I hope you all don't mind.

There were over 50 members of the Minnesota Patriot Guard Riders that showed up with our flags waving on a drizzling night, to help support the troops of the 34th Military Police Company and their families as the members of the company said their goodbyes to their families and friends and loaded the buses for deployment.

We had Patriot Guard Rider Members from near and far. Many of us are also members of other riding clubs. we had a few members of my group from the Hugo Legion Riders, and a few of the Leathernecks Motorcycle Club members. Many of the Patriot Guard Riders are Vets.

A few of our members were even sending off their own loved ones. One of the young ladies (Christina) that stands with us also had to watch as her boyfriend prepared to head out for Iraq. And Jim watched as his son also mounted into the buses.

We always donate a Patriot Guard Riders flag to the Company that is signed by us all, Just a small token of our thanks to them. We decided to have Jim the father of one of the troops make the flag presentation.

Below is a copy of an email that I got this morning from one of our PG members that was sending off his family.

From the other side of the Flag Line....
by wingleader

Since April of 2006 I have been to Honor Missions, Welcome Home Missions and Send Off Missions. Like all of you I did it because It was and is the right thing to do. Tonight I had the chance to see what the PGR does from the other side of the flag line. The sight of all of the flags coming around the corner and filling the sidewalk in front of the Stillwater Armory, lining the inside of the armory during the final formation and presenting the signed PGR flag and then, once again lining the sidewalk again as our Soldiers boarded the buses, leaves me with feelings that I can't describe. To everyone that gave up part of their evening to support the families and the Soldiers of the 34th MP Company...Thank You! I want to extend a special Thank You to Kingpin for the flag, to Jeff for organizing the mission and to Woody for making the speach that I never could have. Thank You

Thanks for your indulgence as I rambled on.

If your interested in becoming a member and helping to support our troops please let me know. You do not have to own or ride a motorcycle to become a member as many members attend in their cars.

Just a few photos from a few past Honor Missions that we attended in 2008.

Oh ya I forgot to mention I am the Big Ugly Guy in the bottom photo 2nd from the left. The bottom is a Honor Mission (Funeral) for a young man from North St Paul that lost his life in Iraq last year. These are the toughest missions to attend but in my opinion the most important ones and we usually have around a 100 members in attendance and they are usually two full day events.

To all my fellow past and current Vets.... Thank you

What if the property your renting goes into foreclosure?

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Thu, 26 Feb 2009 15:46:37 -0600

What you should know if your landlord lets the property your renting go into foreclosure.

A foreclosure does not change your lease terms. You must continue to follow the terms of your lease. You must keep paying rent unless you have a legal reason to withhold it and you should have an attorney representing you in this case. Your landlord must also follow the terms of your lease and they must also keep the property in good repair as indicated in your lease and Minnesota Law. You must also keep you utilities paid current.

If you move out early it may be a voilation of your lease. Both you and your landlord must give legal notice to end your lease. I would also recommend reading your lease to see if there is anything about your rights if the property is in foreclosure.

Your landlord still has a six month redemption period after the Sheriff's Sale to pay off the property and redeem it. After the six month redemption period if your landlord does not redeem the property the property will be turned over to the holder of the Sheriffs Certificate or the Lender. The new owner may have the legal right to ask you to move even if your lease is not over, but they still need to give you written notice stating that you must move out of the property.

For more assistance contact:

HOME Line
(866) 866-3546
http://www.homelinemn.org

Law Help Minnesota
http://www.lawhelpmn.org

Home Ownership Center
(866) 462-6466
http://www.hocmn.org/renters.cfm

Choosing a Realtor when your in foreclosure

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Wed, 11 Feb 2009 15:31:34 -0600

If your decision is to market your property when your in foreclosure, then choosing the right Real Estate Professional to assist you is very important. The average Realtor does not have the experience in foreclosure properties and that could make matters worse. There is a lot of work involved in listing a normal property, but there is a lot more work and legal issues involved with listing a foreclosure property. The Real Estate Company and the Realtor you choose will have to be a full sercie company that has a marketing strategy to sell your property quickly in the time remaining. The Realtor will have to know which person at the Mortgage Company, their attorneys office and other lien holder's offices to contact with problems or negotiations. They will have to contact the city and county to verify and liens for taxes and assessments.

They will need to be a Foreclosure Specialist and know exactly wha tthe mortgage company will need and look at when making a decision on your property.

Most "discount brokers" will not do this. The discount brokers will only list your property in the Multiple Listing Service (MLS) and maybe run a few advertisements and put a sign in the yard. This will not sell your property in the time allotted. It needs to be marketed propertly, networked with all real estate companies in the area and most importantly priced correctly.

If you need to sell your home as a Short Sale (Less then what is owed) your Realtor will need to be on top of everything during the listing and again know what the mortage company will require from them and from you to close the sale. Only 45% of Short Sales ever make it to closing. We at The Janos Group average 75%. We just sucessfully sold and closed a property in Isanti on January 30th that we co-listed with another Realtor from a different company because they did not have experience in doing Short Sales and wanted someone to handle the bank negotiations for them.

Most Realtors will send the Mortgage Company a Short Sale Package of only 45 to 50 pages (This means they are not sending EVERYTHING the Mortgage Company needs to make the decision on your home. We at The Janos Group usually send 80 - 150+ pages depending on the property. This means we have few call backs from the Mortgage Company asking for additonal information and costing YOU valuble time.

The same goes for selling your property yourself (For Sale By Owner, FSBO). Most homeowners do not know where to begin in order to market their property quickly let alone know how to negotiate with big mortgage lenders for a short slae or even how to find out detailed information about their property in the legal system.

We know how to do all of this and can show you step by step how we will market your property.

Should you sell even if there is no equity in your home?

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Wed, 04 Feb 2009 13:13:04 -0600

Sometimes because of the condition of the property, property values declining (like todays market), or lenders giving 125% equity loans, the homeowner will owe more than the property will sell for in the current market. This situation usually occurs when there is more than one mortgage on the property or a declining real estate market. When you mortgage a property there is both the mortgage agreement and a promissory note. Even though the property is the collateral, the lenders can obtain deficiency judgments because of the promissory note. Junior lien holders will often accept "short sales" otherwise they are faced with paying off larger mortgages to protect their smaller ones.

In today's market many of the first mortgages are accepting "Short Sales" because they would not be able to sell the property for what is owed on it and they have high fees that would be attached to the property if they take it back, causing even more of a loss.

Many homeowners qualify for the Mortgage Debt Cancellation Relief (H.R. 3648-Public Law 110 - 142 Signed December 20th, 2007). Speak with your tax adviser or Real Estate attorney regarding receiving a Tax Form 1099 from the mortgage company and if you qualify for the Mortgage Debt Cancellation Relief or the possibility of having to pay taxes on the amount the mortgage company writes off. The IRS will consider the write off as a taxable income. If you do qualify you will need to attach a Tax Form 982 and your Tax Form 1099 to your Tax Returns. Again speak with you tax adviser as we can not give tax or legal advise.

Even though the homeowner would not receive anything at closing it is important to satisfy all liens on the property to avoid possible deficiency judgments and to help in re-establishing credit to become a future homeowner again.

Again to get a copy of our foreclosure handbook please contact us or visit our website to download a copy.

Selling properties in Foreclosure

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Mon, 02 Feb 2009 10:59:36 -0600

Hello again everyone, Today I will cover what needs to be done when selling a home in foreclosure.

When listing and marketing homes in foreclosure there are specific time limits in getting the property sold and closed before the end of the redemption period. The homeowner needs to understand they do not have the luxury of overpricing in hopes of getting more money because it may take longer to sell. They need to understand that when they are not making payments on the mortgage, the amount they owe keeps increasing every day. It is very important to price the home competitively for a faster sale to preserve as much equity as possible.

The homeowners will be charged a daily interest that will eat up any equity very quickly. You will also have the banks attorney fees added to the payoff amount.

It is important that a title seach is done right away on your property in order to know about all liens on the property. This gives us time to address any problems that may arise. With the time restrictions you can not afford to have delayed closings because of title problems. Time is NOT on your side during a foreclosure.

Don't forget to look for our future articles that will cover:

If you should sell even if there is no equity.
Choosing a Realtor
Our philosophy and Goals for our foreclosure clients

What are your options when going into foreclosure?

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Fri, 30 Jan 2009 08:20:24 -0600

Good morning everyone and thank you for takikng the time to visit our blog. Today I will go over part 2 of our foreclosure handbook that covers what a homeowners options are during a foreclosure. If you should have any questions don't hesitate to call us at 651-407-7803.

What are the option for a homeowner in foreclosure:

Prior to the Sheriff's Sale you can still bring the mortgage current. Once the lender has startedthe foreclosure process they will not accept partial payments on the amount past due. The borrower must pay in one lump sum all the back payments, accrued penalties and attorney fees. This lump sum is usually several thousand dollars. Of they have a resource to pay this lump sum (maybe relatives or friends would help) it must be done prior to the Sheriff's Sale. Once the Sheriff's Sale occurs this is no longer an option. The mortgage can no longer be reinstated.

Here are a few options that my work for your personal situation.

Reinstatement of Loan (Cure): This option is paying the lender everything that is owed in one lumb sum to include missed payments, any late fees associated with these payments, foreclosure fees, legal fees and the principal owed during the delinquency. A cure may inbolve the seller curing or deeding it to the investor "subject to" the existing loans, who will cure. Therer is a risk to the homeowner that the lender may accelerate the loan because of the due-on-sle, and the homeowner no longer owns the property and has no recourse if the investor doesn't pay the loans. (There are many scams out there based on this option so please BEWARE and I would recommend you hire a Real Estate Attorney BEFORE signing any agreements involving a cure. I personally never recommend this option to any of my clients."
Repayment Plan: This is a written agreement between the lender and the seller. These plans require higher payments then the regular monthly mortgage amount for a period of time until the loan is brought up-to-date.
Loan Modification: A loan modification involves changing one or more terms of a mortgage. Modifications can be considered to reduce the interest rate of the mortgage, change the mortgage product (from an adjustable rate to a rixed rate, for example), extend the term of the mortgage or capitalize delinquent payments (add delinqquent payments to the mortgage balance-only available in extreme hardship situations). Modifications are NOT easily granted and there must be strong,justifiable reasons for the request. We have an outside company that performs all our modifications for our clients. This is not something I would recommend a homeowner try to negotiate themselves.
forbearance Agreement: The lender will allow you a period of time (3-6 months typically) of either low payments or no payments at all. Unless the loan term is extended (which happens rarely), the later pauments generally will have to be higher than the original monthly mortgage payments until the loan is up-to-date.
Special Forbearance (FHA Loans only): Allows eligible borrowers to postpone monthly mortgage payments for a minimim of four monts. While there is no limit on the maximum number of months, at no time may the agreement allow the delinquency to exceed the equivalent of 12 monthly PITI installments.
Deed-in-Lieu: A Deed in Lieu is an option in which a borrower voluntarily deed collateral property in exchange for a release from all obligations under the mortgage. A DIL may not be accepted from borrowers who can financially make their payments. If a borrower qualifies for a DIL program they may be eligible for cash back from the lender as in the "Cash for Keys" program. Most mortgage companies prefer homeowners to sell the property in a Short Sale over a DIL.
Cash Sale: The borrower sells the property, pays off his loan, and, depending on the equity, may net some cash out of the deal. The challenge, of course, is being able to sell it quickly enough, which most ofter requires a substantial drop in the price.
Short Sale: The borrower makes an agreement with the investor to sell it for less then is actually owned, subject to approval of the lien holders. This generally results in no cash to the homeowner, but will be better credit wise then a completed foreclosure. In the current real estate market about 90% of the foreclosures we see must be handled as a short sale.
Refinace: The borrower may be able to refinance and get a new loan, but generally this is difficult because the borrower has little equity and poor credit. The new loan likely will have higher payments than the old loan.
Do Nothing: The worst choice for the seller, whose credit will be ruined, but he can stay in the house for several months for nothing, save up some cash, and move when the lender or the high bidder from the auction eventually evicts the homeowner.

We at The Janos Group have an outside Mitigator on our team that will negotiate with your mortgage company to restructure your loan and assist you in keeping your home if you so choose, and if you qualify to do so.

I hope this helps some of you in making the correct choice regarding the option best suited for your personal situation. If you have any questions or would like a FREE no obligation consultation with us please don't hesitate to contact us at 651-407-7803.

Please watch for the next few issues of our blog where we will discuss:

Selling a property in foreclosure
What to do if you have no equity
How to choose a Real Estate Consultant to sell your foreclosure property

The Janos Group
ReMax Specialists
4910 Highway 61
White Bear Lake, MN 55110
651-407-7803 Office
651-407-7804 Fax
Tom@TheJanosGroup.com
www.TheJanosGroup.com

Help for homeowners in foreclosure

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Thu, 29 Jan 2009 16:08:00 -0600

Mortgage foreclosure is a complex process. Some people may approach you about "Saving" you home. You should be careful of such promises.

The state encourages you to become informed about your options in foreclosure before entering into an agreement with anyone in connection with the foreclosure of your home. There are government agencies and non-profit organizations that you may contact for helpful information about the foreclosure process. For the name and telephone number of an organization near you please call the Minnesota Housing Finance Agency (MHFA) at 651-296-8215. 1-800-710-8871, TTY 651-297-2361 or the MHFA website at: http://www.hocmn.org/ForeclosurePrevention-map.cfm The state does not guarantee the advice of the agencies so if in doubt please contact a Real Estate Attorney for legal advise as we are not attorneys and can not give legal advice.

Do not delay in dealing with the foreclosure because your options may become more limited as time passes.

We have included some other Government Agencies that help people in foreclosure in the back of our handbook "What you need to know about foreclosures" if you would like a hard copy.

The Minnesota Foreclosure Process

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Thu, 29 Jan 2009 15:56:16 -0600

For those of you that are having trouble paying your mortgage this information is for you. This is the Minnesota Foreclosure Process and what you can expect. This article is taken from our handbook "What you need to know about foreclosures", we distribute this handbook to all our clients that are facing foreclosure and to other Realtors that take our Foreclosure Classes for their required Continuing Education.

The Foreclosure Process:

There are two ways for a lender to foreclose on a mortgage. The judicial process and the non-judicial process. The process used by the lender depends on the laws in each state. Some states are judicial only and some states allow both judicial and non-judicial.

The judicial process is a court directed action and like many things through the courts it becomes complicated and expensive. When a state allows non-judicial, which is foreclosure by advertisement, the lenders will use this process because it is simpler and less expensive. Minnesota allows foreclosure by advertisement and almost all mortgage foreclosures here are done this way.

Foreclosure By Advertisement:

When a lender forecloses a mortgage by advertisement they engage an attorney to act on their behalf. the attorney in essence becomes a third party debt collector for the lender. The attorney will file the necessary documents in the county where the property is located and begin the advertisement period. In the state of Minnesota the minimum advertisement period is once per week for six consecutive weeks. Once the advertisement period is completed a mortgage foreclosure sale is held.

The Sale:

the mortgage foreclosure sale, more commonly known as the Sheriff's Sale, is a public auction conducted by the Sheriff's department at the county courthouse. Although it is a public auction most of the time only the attorney for the lender submits a bid. The successful bidder at the sale received title to the property in the form of a Sheriff's Certificate; however they do not receive possession of the property until after the redemption period.

The Redemption Period:

In the state of Minnesota, the homeowner's redemption period is for six months after the Sheriff's Sale; There are special circumstances that allow up to twelve months for some properties; but most residential properties only get six months. during this six-month period the homeowner keeps possession of the property and has the right to redeem title by paying off the grantee of the Sheriff's Certificate. During the redemption period the homeowner has full rights to the property. They may live in it, rent it, refinance (even though most lenders will not choose to give loans at this point in the foreclosure and if they do the monthly payment will be greater then the previous payments that the homeowner was having difficulty in paying) or sell the property. If they do not redeem title within the six-month period they then lose all rights to the property and must vacate the premises.

What Usually Happens:

The biggest difficulty most people in foreclosure face is lack of knowledge about the foreclosure process. Many do not understand te process, they don't know what the redemption period means and they don't know what their options and rights are before the sale or after the sale, and ultimately they loose their home and any chance to help save their credit. Unfortunately their lenders and the lenders attorney will not assist the homeowner's or educate the homeowner as to their rights and in most cases the homeowner can not afford an attorney of their own to help them create a strategy for dealing with their foreclosure or educate them.

This is where we come in. We will take the time to inform the homeowner as to their rights and options at NO COST or obligation for this information. If the only option the homeowner has or wants is to sell their property, then we hope that the homeowner will see the benefits of using The Janos Group and Remax Specialists to market their property quickly and for as much equity in the allotted time.

Please watch for the next few issues of our blog where we will discuss:

What are the homeowners options
Selling a property in foreclosure
What to do if you have no equity
How to choose a Real Estate Consultant to sell your foreclosure property

If you would like a copy of our handbook "What you need to know about foreclosures" mailed or emailed to you please visit us at www.TheJanosGroup.com and click the link for "The Janos Group's Foreclosure Handbook" or feel free to contact us with any questions you may have.

Or handbook has a list of Government Agencies that help people in foreclosure.

The Janos Group
ReMax Specialists
4910 Highway 61
White Bear Lake, MN 55110

651-407-7803 Office
651-407-7804 Fax
Tom@TheJanosGroup.com
www.TheJanosGroup.com

1st time home buyer $7500 tax credit

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Tue, 27 Jan 2009 14:22:18 -0600

Have you been hearing a lot about this new $7,500 tax credit for first-time home buyers, which is part of the newly passed 2008 American Housing Rescue and Foreclosure Act? Is it as great as it sounds?

A new website has been put up with more information about this tax credit. Curiously, the fact that this “credit” has to be paid back over the next 15 years (or when you sell) is conveniently left out of the “At A Glance” section, and you have to scroll down to question #15 in their Frequently Asked Questions to learn about the repayment terms. Did I mention the site was created by the National Association of Home Builders? No way would they want to mislead potential home buyers, right?

To qualify, you must close on your new house between April 9, 2008 and July 1, 2009. A good summary of this tax credit interest-free loan is in this Fortune article:

The “first-time home buyer credit” is a temporary refundable, repayable tax credit equal to 10% of the purchase price of a home, up to $7,500 for singles and married couples filing jointly. (Singles who buy a house together get only $3,750 each, as do married couples filing their tax returns separately.) [...]

But the way the credit works, it’s actually more like an interest-free loan. Two years after you claim this credit, you have to start paying it back. The payback comes over 15 years in 15 equal installments–meaning you owe an extra $500 on your tax return each year. Sell your house, and you have to pay the rest back that year from your profits. (No profits, no pay back. Also, if you die, your heirs are off the hook.)

The allowed credit starts being reduced once a single has $75,000 of modified adjusted gross income, or once a couple has $150,000 of income. The credit goes away entirely at $95,000 for singles and $170,000 for couples.

The justification behind a $7,500 interest-free loan is that it is supposed to ease the “pain” of having to come up with closing costs and a downpayment. But wait… Wasn’t the housing bubble caused in part by people being tempted into buying houses they couldn’t really afford because they didn’t need to first save up for closing costs or a downpayment? I find it ironic that our choice of “buyer assistance” is even more easy lending.

Now, of course I would still grab this tax “credit” if I was going to buy a house anyway. I’d happily take a 0% interest loan on $7,500 for any period. But why not just give us something simple and straightforward, like a check for $1,000? My guess is that the phrase “$7,500 tax credit” works better to pacify angry citizens.

I would always recommend you speak with your tax professional or a real estate attorney with any questions you may have about the credit.

So if you're looking for Townhomes, Single Family Homes, Lake Property, Commercial Properties, Foreclosures, New Construction, or Investment Properties please give us a call today.

WWW.TheJanosGroup.com

The Janos Group
Remax Specialists
4910 Highway 61
White Bear Lake, MN 55110
651-407-7803
Email: Tom@TheJanosGroup.com
Website: www.TheJanosGroup.com

Now is one of the best times to buy a home

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Tue, 27 Jan 2009 13:56:20 -0600

NOW IS ONE OF THE BEST TIMES TO BUY A HOUSE IN THE LAST 30 YEARS!

Why?

Because it is a Buyers Market with great deals & Interest Rates are still the lowest in the last 30 years.

We specialize in all types of home buyers from first time home buyers to experienced home buyers up to multi-million dollar properties. Visit our website for important buyer tips and perform your own property search. Our site offers many ways to find your dream home. Check out our Find A Home option and select all the different areas that you may want to live in. Search by area, municipality, zip code, county, etc. It’s that easy! Or contact us and we will set up an account for you in our NEW VIP Buyer software that will do the above listed items and more. Our buyers love this program.

Check out our "Get New Listings By E-Mail" feature, this is the ultimate tool for people looking to buy a home. Create an account, then set up your search. The information is refreshed every day by our Multiple Listing Service and all new listings are emailed directly to you. All new properties are listed at the top, so you won’t have to go through listings you have already seen. Once you have found a listing you love, save it for later review and contact us for a private showing.

So if you're looking for Townhomes, Single Family Homes, Lake Property, Commercial Properties, Foreclosures, New Construction, or Investment Properties please give us a call today.

WWW.TheJanosGroup.com

The Janos Group
Remax Specialists
4910 Highway 61
White Bear Lake, MN 55110
651-407-7803
Email: Tom@TheJanosGroup.com
Website: www.TheJanosGroup.com

The difference between a Short Sale and a Foreclosure.

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Tue, 27 Jan 2009 13:06:05 -0600

One of the most common questions I get when helping home owners that are facing foreclosure and from other Realtors when I am training them in the foreclosure process is "What is the difference between a Short Sale and a Foreclosure and how does it effect the Seller?"

Homeowners who have the option of completing a short sale in order to avoid foreclosure may be better served by saving their home in this manner. Although there are a few drawbacks of a short sale, it is almost always better just to resolve the mortgage entirely and move on with fewer financial worries.

First of all, when homeowners complete the short sale, they usually will not have to pay the difference between what they owed originally and what the bank accepts. This counts as forgiven debt and is the main reason for doing the short sale. When property values decline, selling at a high price is almost impossible, and families in foreclosure have no other option for selling their home than to convince the bank to accept less.

However, borrowers may have to pay taxes on the difference, because the IRS treats any forgiven debt as income. But this sometimes does not count if the amount forgiven is higher than the market value of the home (when the property is underwater). If a family owes $125,000, but the bank accepts $100,000, and the home is now only worth $100,000, the borrowers will not have to pay taxes on the $25,000 forgiven debt. I would recommend you speak with a tax professional or a Real Estate Attorney to verify this for your personal transaction.

The special tax form homeowners will receive from the bank at the end of the year is a 1099, which will list how much income the banks counts that the foreclosure victims received from the short sale and forgiven debt. To determine how to report this to the government, homeowners should talk to their tax preparer about how to count it in income, or read the IRS website for more information on how to treat it.

Another benefit of a short sale is that homeowners can not be sued or have wages garnished by using this method to stop foreclosure. The bank forgives the debt, meaning it is agreeing to release the lien on the house for less than the total amount owed. So the lender is unable from that point to sue the clients for a deficiency on a debt that the bank itself accepted and agreed to a deficiency on.

However, if the property went through a normal foreclosure, the bank may be able to sue the borrowers again after the sheriff sale, depending on the circumstances and the state foreclosure laws. Almost no banks, though, do this, as they figure there is little chance they will be able to collect on any future deficiency judgment against foreclosure victims.

Nor can the bank, as a result of the short sale, put a lien on any other home the borrowers might own. Any part of the debt that is forgiven is no longer owed to the bank -- it accepts the lower amount in return for releasing the lien and not pursuing foreclosure. So homeowners do not even owe the mortgage company any more money once the bank accepts the short sale.

Although banks may not be willing to work enthusiastically with homeowners during a short sale process, persistence pays off. This option will allow more people to escape from a house without the threat of a foreclosure on their credit or the fear of the bank hounding them for a deficiency judgment for years to come. If saving the home some other way is not an option, and market values have declined to make selling difficult, a short sale may be a good compromise for borrowers and lenders.

Here in Minnesota our Foreclosure Law is different from other states so I am including a link to: http://www.foreclosurelaw.org/Minnesota_Foreclosure_Law.htm that will explain the basics of what you will be facing. For more information please contact us for a FREE consultation.

The Janos Group
ReMax Specialists
4910 Highway 61
White Bear Lake, MN 55110
651-407-7803 Office
651-407-7804 Fax
Tom@TheJanosGroup.com
www.TheJanosGroup.com

The Typical Foreclosure Notice Requirements

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Tue, 27 Jan 2009 12:47:04 -0600

When lenders begin to foreclose on a mortgage in default, there are typically a number of notices requirements that they must meet for the process to be legal. Otherwise, the homeowners may be able to contest the foreclosure in court for inadequacy of process, and the bank's lawsuit or ability to sell the house may be thrown out and it will have to restart at the beginning.

In most states, homeowners are required to be notified of many aspects of the legal process of foreclosure. Usually this is accomplished by posting the applicable notice on the property itself, which a sheriff's deputy will do. Certified mail may also be used for some documents, such as the complaint and summons or copies of other court documents.

However, banks foreclosing on a property are also required to post legal notices elsewhere, in case the borrowers are no longer living in the home and to notify any other interested parties of the legal action. State foreclosure laws may state that notices of default or sale must be listed in local newspapers for a period of weeks or even posted right on the door or a bulletin board in the county courthouse.

The first notice most homeowners will receive is the notice of default. This will come from the lender and indicate how long the owners have to reinstate their mortgage before the home will be sold. If the borrowers are able to pay back the amounts listed on the notice of default, they will be able to stop foreclosure from going forward and keep their home. But this is the first official notice they will receive that the home is in danger.

The bank will also have to record this notice of default with the county clerk or recorder's office. This will make the foreclosure proceedings a matter of public record and alert any other parties thinking of buying the house or refinancing the loan that payments on the mortgage or deed of trust are currently in default.

In states that require a lawsuit to bring a foreclosure (also known as judicial foreclosure states), banks may be required to inform homeowners that foreclosure proceedings may be brought into court soon. This usually gives borrowers a few week's notice if they wish to try and negotiate a mortgage modification or other other arrangement with the bank before the lawsuit is filed.

Homeowners, if they are unable to reinstate the loan by the end of the period on the notice of default, will then be sent a notice of sale of the property. This indicates when and where the house will be sold by the county at an auction to satisfy the delinquent mortgage. In most cases, the sheriff sale will be conducted at the county courthouse and there will be few other bidders besides the bank itself.

This information is also usually listed in local newspapers for a number of weeks. The exact number of times a sale is listed depends entirely on the state foreclosure law. Too often, this has been the first indication homeowners receive that they are in foreclosure at all, if they have not been opening mail from the bank or ignoring certified mail and other documents sent to them by the lender.

If the state has a redemption period after the sheriff sale has been conducted, homeowners will receive another notice informing them of their right to redeem and how long they have to do so. Some states have no redemption period, while others have from just a few months to a year for borrowers to attempt to save their home.

Banks must follow all of these notice requirements for the foreclosure process to be valid and legal. If it or the attorneys miss one or another notice, the homeowners may be able to contest the foreclosure for inadequacy of process and have the lawsuit thrown out or the sale halted. This would then require the mortgage company to begin the entire process all over again from the beginning.

To find the value of your home with a free, over-the-net home evaluation, please visit our website: www.TheJanosGroup.com or contact our office at 651-407-7803.

If you would like a free list of homes for sale in your area/neighborhood, would like more information about White Bear Lake or would like to be the first to know about hot new listings before other buyers do, then give us a call at: 651-407-7803

The Janos Group
ReMax Specialists
4910 Highway 61
White Bear Lake, MN 55110
651-407-7803 Office
651-407-7910 Fax
Email: Tom@TheJanosGroup.com
Website: www.TheJanosGroup.com

White Bear Lake September 2008 Housing Statistics

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Thu, 11 Sep 2008 12:58:55 -0500

We here at The Janos Group continuously monitor local real estate statistics to keep our clients and neighbors informed and ahead of the real estate trends. Below you will find the White Bear Lake Real Estate statistics for the month of August 2007 compared to August 2008 as well as the year to date comparison.

White Bear Lake	August			Year to Date
	2007	2008	Change	2007	2008	Change
New Listings	65	51	-21.5%	508	442	-13.0%
Closed Sales	24	23	-4.2%	203	161	-20.7%
Average Sale Price	$367,795	$219,663	-40.3%	$277,804	$216,286	-22.1%
% of Orig List Price *	95.1%	94.5%	-0.6%	95.5%	92.6%	-3.0%
Average Days on Market **	135	134	-0.6%	131	157	+20.3%
Single-Family Detached Inventory	171	138	-19.3%	-	-	-
Townhouse-Condo Inventory	78	70	+10.3%	-	-	-

Information obtained by the Minneapolis Area Association of Realtors.
*Does not account for list prices from any previous listing contracts
**City market time figures are based on Cumulative Days on Market, which does account for previous listing contracts

Below you will find White Bear Lake Real Estate statisics so far for the month of September 11th, 2008.

Homes currently on the market (Active Listings): 445
Number of homes entering escrow (Pending): 51
Number of homes closing escrow (Sold): 9
Number of homes expired or cancelled (Listing contracts expired or were cancelled): 23
Average days on market for Sold properties: 92

To find the value of your home with a free, over-the-net home evaluation, please visit our website: www.TheJanosGroup.com or contact our office at 651-407-7803.

The Janos Group
ReMax Specialists
4910 Highway 61
White Bear Lake, MN 55110
651-407-7803 Office
651-407-7910 Fax
Email: Tom@TheJanosGroup.com
Website: www.TheJanosGroup.com

Fannie Mae And Freddie Mac Takeover: What Does It Mean?

Thomas Janos (The Janos Group / Real Estate Affiliates Services, Inc.) — Thu, 11 Sep 2008 12:34:26 -0500

Fannie Mae And Freddie Mac Takeover: What Does It Mean?
By: Kimbrough Gray

So on Friday it was leaked that the government is taking over Freddie Mac and Fannie Mae. On Sunday it was official. Freddie Mac and Fannie Mae have now been taken over by the federal government. But what does it mean for the real estate market, mortgage interest rates, and the US economy.

First let's look at what it means for mortgage rates. I would expect that the government takeover will result in lower mortgage rates, possibly a full point lower. Why? Basically the Fed has been struggling to lower mortgage rates for the last year in an attempt to assist the troubled real estate market. The Fed has lowered prime rates several times in an attempt to pull down mortgage interest rates. In spite of this over the last 8 months mortgage interest rates have mostly risen. Now with full control of Freddie Mac and Fannie Mae (which provides insurance for most mortgages in the US) they will have much more control over the mortgage market and mortgage rates. As long as their objective stays the same, we can expect lower rates.

What does the takeover say about the current situation in the real estate market? This should have been obvious from all the events that preceded this but the takeover shows that the real estate market is in serious trouble. The federal government doesn't just take over large companies on a whim, especially an administration with a Republican president that believes strongly in free markets. This is not simply a government takeover. This is the largest takeover in US history. Basically the takeover happened because it was believed if nothing was done we were headed for economic catastrophe.

How is this going to effect the real estate market? Although the takeover is a bad sign about our current situation it should have a positive effect on the real estate markets moving forward. First lowering mortgage interest rates should be quite a boon for the real estate market. Lowering rates lowers the effective cost of a house. And historically lowering rates has a positive effect on real estate values.

Additionally, if the Fed is smart they will reduce some of the mortgage restrictions Freddie Mac and Fannie Mae have created in the last year. While I would not like to see the mortgage market return to the free-wheeling lending of a few years ago, some of the current rules are bizarrely restrictive. The lending environment typically works like a pendulum moving from one extreme to another. Currently lending restrictions are not just stricter than what we saw during the real estate boom a few years ago but they are more restrictive than anything we have seen in the last 15 - 20 years. Hopefully a federally controlled Fannie Mae and Freddie Mac can help return us to normal as far as lending restrictions.

Lastly the government takeover could put taxpayers in the lurch for billions in loan losses. In the short term the government is going to have to infuse money into Freddie Mac and Fannie Mae. They have been losing money for quite some time and that is not going to change overnight. The government will have to around 20 to 30 billion into Fannie Mae and Freddie Mac to get them back to financial solvency.

Does this mean the federal government is insane? It depends on how you look at the issue. While taking over Fannie Mae and Freddie Mac will be very costly for the government and taxpayers, allowing them to fail could have led the US economy into a depression. In a depression those that keep their jobs have to make up for all the lost tax revenues for the large number of people that lose their jobs. So taxpayers could have been in a lurch if the Feds had decided to stay on the sidelines. So in summary the federal government found itself in a tight spot and decided to bet that they can fix the real estate market. We will find out if they were correct over the next several months.