Happy Thanksgiving for Whom?

By
Mortgage and Lending with Canopy Mortgage, LLC NMLS 124492

On Thursday, November 20th, Fannie Mae (FNM) and Freddie Mac (FRE) made a landmark announcement in regards to a temporary hiatus on foreclosure sales and evictions for a six week period beginning the day before Thanksgiving until January 9, 2009. At first read, politicians and consumer advocacy groups heralded the announcement as a win for troubled homeowners.

James Lockhart who is the director of the Federal Housing Finance Agency (FHFA) was quoted that the suspension would allow "delinquent borrowers...an opportunity to avoid foreclosure and work out terms." It should be noted that this temporary suspension is an addition to the normal time-line required during the foreclosure process which is estimated by U.S. Department of Housing and Urban Development to be 3 - 6 months (subject to state foreclosure laws and processes).

For the homeowners on the brink of losing their home to the foreclosure process, the holidays will be a festive occasion removed from the reality of the housing crisis. This should bring a smile to their faces. FHFA, FNM & FRE look as if they are the champions to the financially strapped homeowners when they have been greatly criticized for the lack of proactive response to the housing debacle. The attorneys, law enforcement agencies and the judicial system who facilitate the foreclosure process also receive a reprieve from the gluttony of evicted homeowners during the holiday season.

To all of those mentioned, Happy Thanksgiving & Holiday Season!

For those on the other side of the foreclosure process, it is going to be an extended holiday stretch of dwindling business not of our own will. The professionals that will be negatively impacted from this action will be Realtors, appraisers, home inspectors, title companies, escrow companies, mortgage companies, insurance agents & real estate attorneys. This will be extremely hard on states in which stability of the housing market has been on the back side of foreclosure sales such as California, Florida, Nevada & Arizona.

No matter where you look, foreclosures have become a norm of the real estate landscape. The unilateral moratorium will only delay the inevitable flood of foreclosed homes to hit the market. It has taken the real estate industry more than 18 months to adapt to the new reality of the housing market.

Life is not like a video game. We can not press pause and wait for a better opportunity. In the eyes of this Certified Mortgage Planner, we must continuously move forward...good or bad. That's Life! Happy Thanksgiving.

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Larry Bettag
Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001 - Saint Charles, IL
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Wow....good as well as harsh news coming this day of thanksgiving.....THANKS!

Nov 27, 2008 03:34 PM #1
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Katerina Gasset
Get It Done For Me Virtual Services - Wellington, FL
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James- You make some great points. All they are doing is putting off the inevitable. Nice that the folks get to stay in their houses for the holidays however what about all the other years and all the other foreclosures for the past 100 years or so? Did they always give homeowners a break during the holidays? Somehow, it does not seem fair to me at all. We work in short sales, a lot of them. We close our short sales. We still run across people who will not even put a dime towards saving themselves from foreclosure, contributing to their short sale even if they have the money.

Nov 27, 2008 03:38 PM #2
Rainer
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James K Barath, CMPS
Canopy Mortgage, LLC - Crown Point, IN
FICO Pro, Certified Military Housing Specialist

Nestor & Katerina,

How will this impact your year end push on sales? I know personally for many in the Florida market that this action by Fannie Mae and Freddie Mac has completely put a brake on their business, especially the ones that specialized in foreclosures. This applies not only to the listing agents (won't be able to accept any offers), but also would be buyers (won't have their offers looked at until after January 9th).

As they say, for every action there is an equal reaction. Happy Thanksgiving.

Nov 27, 2008 03:49 PM #3
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
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James,

I guess I am the lucky one as I managed to miss this important infomation. I did not even understand at first that it can affect us.

What about the rest of the lenders out there? They will be working with short sales as they were before. What happens with those who are already in the process? Would be there a stop for closings?

Thanks for the information

Happy Thanksgiving

Nov 27, 2008 03:56 PM #4
Rainer
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James K Barath, CMPS
Canopy Mortgage, LLC - Crown Point, IN
FICO Pro, Certified Military Housing Specialist

Jon,

If the subject property of a foreclosure real estate transaction is owned by Fannie Mae (FNM) or Freddie Mac (FRE), there will be no activity until Saturday, January 10, 2009. Considering that FNM & FRE own over 60% of the mortgages on the market, the ripple effect can be very encompassing. If you have buyers in the market you will need to educate them on the potential delay. Happy Thanksgiving.

Nov 27, 2008 04:04 PM #5
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Katerina Gasset
Get It Done For Me Virtual Services - Wellington, FL
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James- We are stricktly listing agents and don't list REOs. We list short sales and luxury homes. The luxury homes here are not as short as they are in California because of where we are located. Our short sales, we take those all over the state of Florida- have slowed just a bit. We used to get 2 to 3 listings per week from our blog here on Active Rain and now we are getting 1 listing per week from our blog. That started happening about 3 to 4 weeks ago as more people are trying to go for the loan modifications first. The bad part of the loan mods, the banks are telling the homeowners that they need to be 90 behind in their mortgage payments. We had 2 short sale listings just call us this week and change their minds and try to do loan mods,. But they won't qualify,. When you make 12k a year and your house even with the bank reducing principle, which they are not going to do, even reducing rate, this person still won't get loan mod, because even selling short, we will get 300K for the house! Do the math! I try to tell them but the bank telephone call center are SO STUPID, they can't do math. We like it when there are not as many foreclosures on the market here because then we can sell our non shorts easier. This is Katerina who does the blogging, Thanks! Katerina

Nov 27, 2008 04:04 PM #6
Rainer
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James K Barath, CMPS
Canopy Mortgage, LLC - Crown Point, IN
FICO Pro, Certified Military Housing Specialist

Katerina,

I know that loan modifications are a huge business in Floriday right now. You must really be disenchanted with the streamlined modification program that FHFA, FNM, FRE, HOPE NOW and the big banks announced on Veterans Day. At this stage of the game with Obama pushing the foreclosure agenda to the top of his list, pray that he does not legislate judicial modification. You can read more at http://mycmps.wordpress.com/2008/11/13/the-obama-mortgage-effect/ .

Gobble! Gobble!

 

Nov 27, 2008 04:14 PM #7
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Maggie Baumbach
Search Homes for Sale in Maryland at HelpShop.com - Reisterstown, MD

Unintended consequences can be pretty scary. What will happen when the moratorium is lifted, will there be a flood of distressed properties and how will the market handle it? Markets seem to work best when things occur naturally and adjustments can be made more smoothly. Will their processors be even more swamped? What else that we just have not thought of yet?

Nov 27, 2008 04:26 PM #8
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
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I think the idea behind it not to stop the foreclosures, and 6 weeks would not help the overwhelming majority of foreclosure candidates, but to give them this time so that being thrown out of the property was not on their minds during the Holiday season.

And this  may be a right move. It won;t help financially, but would tremendously help emotionally.

We are people after all...

But I might be deal wrong.

Nov 27, 2008 05:04 PM #9
Rainmaker
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Kristin Johnston - REALTOR®
RE/MAX Realty Center - Waukesha, WI
Giving Back With Each Home Sold!

That is life!  Hopefully when the resume buttom is pushed, it will be a brighter picture for everyone!

Nov 27, 2008 06:44 PM #10
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

WHAT A CROCK!!!

Fannie and Freddie and mortgage companies give lip service to mortgage work-outs and loan modifications.  Then give folks about 6 weeks longer to accrue interest. 

This typical of what our institutions do these days.  Publish what they believe will make them look good as long as they can make sure that nothing is really changed.

 

Nov 27, 2008 09:26 PM #11
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Katerina Gasset
Get It Done For Me Virtual Services - Wellington, FL
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James- They make these people stop paying their mortgage that want to do loan mods even if they are not behind. CW says you have to be 90 days delinquent, so what about the people with good credit, they are making bad choices just to TRY for the loan mod, with the answer that usually comes, NO don't qualify. We try to tell people but who are we compared to the FEDs? They believe the banks, the Feds before they believe the people that are really trying to help them, like us.

Nov 28, 2008 12:37 PM #12
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James K Barath, CMPS

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