bailout
Hard Hit Neighborhoods Get $1B From HUD
Monday, September 13th, 2010 | Bank owned, Foreclosures, Real Estate Investing | No Comments
With foreclosures on the rise, communities are often left with properties that turn into eyesores – vacant, not maintained, falling apart. Last week, HUD awarded an additional $1 billion to state and county governments to help communities clean up the effects vacant homes. This is the third round of the Neighborhood Stabilization Program funding, designed to allow communities to earmark the money for acquiring, redeveloping or demolishing foreclosed properties. Every state, including Washington DC and Puerto Rico, has received funding. This latest round follows $6 billion already dedicated to this program since 2008. “State and local governments can use their neighborhood stabilization grants to acquire land and property; to demolish or rehabilitate abandoned homes; and to offer downpayment and closing cost assistance to low- to moderate-income homebuyers. In addition, the grantees can create “land banks” to assemble, temporarily manage, and dispose of vacant properties.”
Plan to Help Underwater Homeowners Launched
Friday, September 10th, 2010 | Bank owned, Foreclosures, Real Estate Investing | No Comments
Will this program finally make a difference? The government is trying to jump-start its so-far weak attempts to tackle the foreclosure crisis by trying to help homeowners who owe more on their homes than they are worth. The Federal Housing Administration will allow lenders to give these borrowers refinanced loans if the lender agrees to forgive at least 10% of the original mortgage amount. The plan, which was announced in March, is being made available starting today. The FHA estimates that between 500,000 and 1.5 million homeowners are projected to be helped. However, the government’s previous efforts to stem foreclosures have fallen far short of expectations. Analysts at Barclays Capital estimated last month that the refinancing program would only benefit 200,000-300,000 homeowners. As of the end of June, there were 11 million U.S. homes, or 23% of those with a mortgage with underwater mortgages, according to real estate data provider CoreLogic.
Banks Give Local Groups First Shot at Foreclosures
Thursday, September 9th, 2010 | Bank owned, Foreclosures, Real Estate Investing | No Comments
Major banks, including Bank of America and Wells Fargo, are agreeing to give local governments and nonprofit groups the ability to buy foreclosed homes before they are sold to private investors. The Obama administration says local officials could benefit from acquiring these properties and using the land for redevelopment projects. Congress has provided $7 billion in money to buy the homes. These groups have been outbid by speculators who are snapping up foreclosures. The administration says the largest ortgage lenders in the country have agreed to let the groups purchase the properties ahead of private speculators.
What’s the Real Number of Homes in Shadow Inventory?
Monday, August 23rd, 2010 | Bank owned, Foreclosures, Real Estate Investing | No Comments
The housing market’s shadow inventory continues to be the real unknown, and the real threat to recovery. It’s a scary thing, and helps paint the true picture of what is going on with real estate. Listen to this. The government doesn’t report on how many homes are held by the banks on their books or in private label securities. Since they are in control of Freddie Mac and Fannie Mae, we can at least find out what’s the true amount there. Together, Freddie and Fannie and FHA hold 236,338 homes. But big banks report their REOs in quarterly earnings reports, and only as value of properties, not actual number of properties. That said, Thomas Lawler, economist and housing consultant, estimates that banks own $14.5 billion worth of REOs, or about 97,000 properties. Add that to private label possessions and the total number climbs to almost 600,000. That’s a far cry from the 546,000 homes the NAR reported sold in June. There’s a four month supply of foreclosed homes alone.
Nearly 50% Bail on Mortgage Aid Program
Monday, August 23rd, 2010 | Bank owned, Foreclosures, Real Estate Investing | No Comments
We’ve seen it before and here is proof again that the government-sponsored mortgage aid programs are not working.
Late last week, the Treasury announced that about 48% of the 1.3 million homeowners who enrolled in the flagship mortgage-relief program since March 2009 are no longer in the program. That represents about 630,000 homeowners who have tried to get their monthly mortgage payments lowered. The Treasury also suggested that the number of foreclosures could rise in the second half of the year. Not exactly a good outlook for the housing market. Just over 32% of homeowners enrolled in the program have received permanent loan modifications and have been able to stick to their payment schedule. One thing the homeowners seem to agree on is that the program is a red-tape nightmare. Complaints of lost paperwork or documents not being received are commonplace. Some of the larger mortgage companies in the program have been trying to offer alternative programs to those who dropped out of the government-backed program.
New Rule May Ban GSEs from Investing in Mortgages with Transfer Fees
Wednesday, August 18th, 2010 | Bank owned, Foreclosures, Real Estate Investing, Real estate short sales | No Comments
More restrictions coming for Freddie and Fannie, if the FHFA has anything to say about it!
If a new rule goes into effect and FHFA (Federal Housing Finance Agency) gets their way, GSEs will be banned from purchasing mortgages with private transfer fee covenants. These fees are sometimes worked into the home purchase contracts and require a percentage of the sale price be paid to the original owner of the property, every time the property is sold – for a period of 99 years. Edward DeMarco, FHFA’s acting director, said “The private transfer fee covenants appear to run counter to the important mission of the housing GSEs to increase liquidity, affordability, and stability in the nation’s housing finance system. Encumbering housing transactions with fees that may not be properly disclosed may impede the marketability and the valuation of properties and adversely affect the liquidity of securities backed by mortgages on those properties.” FHFA has issued a notice of proposed guidance to the Federal Register that would ban Fannie and Freddie from purchasing or guaranteeing mortgages and securities that have the controversial home resale fees attached to them. The guidance would also extend to home loans and securities purchased by the Federal Home Loan Banks or acquired as collateral for advances.
“Buy and Bail” Homeowners Get Around Loan Restrictions
Wednesday, August 18th, 2010 | Bank owned, Foreclosures, Pre-foreclosure, Real Estate Investing | No Comments
Wow, we still have a long way to go before this whole housing crisis is striaghtened out. Homeowners are getting desparate, and getting more creative in how they deal with their underwater homes…
Even after Freddie Mac and Fannie Mae increased their standards against mortgage fraud, a practice known as “buy and bail” is taking hold. A “buy and bail” is when a homeowner acquires a new house before their credit rating is ruined by walking away from their old house that is underwater. It’s an attempt to walk away from payments on a home whose value may never recover, while securing a new property, often at a lower price with a more affordable loan. Make no mistake – this practice is fraud. Most likely to walk away? Borrowers with great credit scores and jumbo loans, that exceed the caps set for mortgages bought by Freddie Mac and Fannie Mae. They have typically lost $100,000 or more in property value. Buy and bail is most often tried by those with big enough pay checks and low enough debt to qualify for two homes. If they have the means, they’re going to make sure they have some place to live before they let their home go into foreclosure.
Treasury Announces Who’s On the Guest List
Monday, August 16th, 2010 | Foreclosures, Real Estate Investing | No Comments
Next week’s housing finance forum is sure to be closely watched, and surely the model for home financing will change.
Of course, Freddie Mac and Fannie Mae will be the center of attention during the conference. The goal behind the conference is to gather input from industry stakeholders that will guide the Administration’s decisions in forming the new housing finance system. Ideas for what to do with Freddie and Fannie range from putting the mortgage market in the hands of private lenders to turning them into official government agencies. So, who’s invited to this meeting of the minds? The “father of the mortgage-backed securities market” Lewis Ranieri, Co-CIO of PIMCO Bill Gross, which runs the world’s largest mutual fund, Barbara Desoer, president of Bank of America Home Loans, Mike Heid, co-president of Wells Fargo Home Mortgage, Mark Zandi, chief economist at Moody’s Analytics, among others. Also on the guest list are representatives from the National Urban League, the MacArthur Foundation, the nonprofit Center for Financial Services Innovation, and the American Enterprise Institute think tank, and two university professors.
The Most Important Chart for the Next 5 Years.
Tuesday, May 4th, 2010 | Commercial Real Estate Investing | No Comments
This is a Credit Suisse Chart of all of the mortgage resets starting with the Sub Prime mess in 2007. There are an estimated 19 million homes that are empty in the United States. An estimated 2/3 of all the homes foreclosed are not even on the market yet.The crazy thing is we have not even begun to clean up the Sub Prime mess and now three more waves of bad mortgages are just now starting to hit. The Option Arm, Alt-A and something that is not even on this scary chart is the Commercial Real Estate resets. 
The Commercial foreclosure market offers some unique opportunities to the savvy investors. To learn how you can position yourself to profit from this latest mortgage crisis, CLICK HERE.
Fannie Mae Extends Suspension of Foreclosure Sales
Friday, January 16th, 2009 | Uncategorized | 3 Comments
In an effort to provide mortgage servicers more time to implement that Streamlined Modification Program (SMP), Fannie Mae will extend the suspension of foreclosure sales and evictions until Jan. 31. This initiative applies to loans owned or securitized by Fannie Mae.
During the extension, Fannie Mae hopes that attorneys and loan servicers contact borrowers and pursue workout options.
Last November, Fannie Mae announced the SMP and initiated this program on December 15th. The SMP will target distressed homeowners who have missed three payments or more, who own and occupy their primary residence, and who have not filed for bankruptcy. The goal of the program is to keep owners in their houses through a combination of reducing the mortgage, interest rate, extending the life of the loan, and possibly even deferring payment on part of the principal –– all with the intention of providing the distressed homeowner with a lower monthly payment.
Also, don’t forget to check out my most recent HubPages article talking about Fannie Mae and Short Sales by clicking here!
Have a great weekend!
- Josh Cantwell
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