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Short Sale Timeline Requirements Set By GSEs
Sunday, April 22nd, 2012 | Bank owned, Foreclosures, Real Estate Investing | No Comments
This is big news for real estate investors, specifically anyone who does short sales. As of June 15, real estate agents working on short sale offers with loans backed by Freddie Mac or Fannie Mae should expect to receive a decision on the short sale within 15-30 days. This is part of the overall process to incorporate more transparency in the short sale process and speed things up.
If more than 30 days will be necessary, the servicers must provide weekly status updates, and reach a decision within 60 days from the offer. In turn, the borrower has some timelines to contend with, too. If the servicer provides a counteroffer, they will need to respond within five days.
Read the complete article here.
Foreclosure Starts Down, Loan Performance Up
Sunday, April 15th, 2012 | Bank owned, Foreclosures, Real Estate Investing | No Comments
According to a report released by LPS Applied Analytics, loan performance was up and foreclosure starts down compared to the previous month. Despite this, foreclosure rates are near historic high rates but delinquency rates are at the lowest point since August 2008.
Foreclosure starts are down over 15%, with foreclosure inventory at 4%. That may seem low, but compare it to December 2005, when the rate was only .5%. “The national pipeline ratios – 90-plus delinquencies and foreclosures divided by the 6-month average of foreclosure sales – continued to decline.” These rations are higher in the Northeast, specifically New York and New Jersey. Foreclosure sales dropped in both judicial and non-judicial states. The average foreclosure pipeline in judicial states is 84 months, while New York is 846 months and New Jersey 772 months. “Cure rates for all types of loans, including one-month delinquencies to foreclosure initiated loans, were higher. Additionally, repeat foreclosures decreased 8%on a month-over-month basis.”
To read more, click here.
FHFA Director Supports HAMP Principal Reductions
Sunday, April 15th, 2012 | Bank owned, Foreclosures, Real Estate Investing | No Comments
Acting Director of the Federal Housing Finance Agency Edward DeMarco released preliminary findings from an FHFA analysis earlier this week, and stated, “principal reductions done under large incentive payments from the Treasury Department would save Fannie Mae and Freddie Mac enough money to begin an umbrella write-down program,” – up to $1.7 billion.
Despite this, DeMarco stressed that strategic defaults could quickly erase any benefit. When looking at 700,000 borrowers, it’s predicted that Freddie and Fannie could lose $63.7 billion if the loans aren’t modified. “With the tripled incentive payments to reduce principal under HAMP, the losses would be $53.7 billion if some principal is forgiven.” Reducing the principal would save the GSE’s $1.7 billion, at a cost of $2.1 billion to taxpayers for the program.
Read the complete article here.
Housing Prices Expected To Rise by 2013
Friday, April 6th, 2012 | Bank owned, Foreclosures, Real Estate Investing | No Comments
According to the recent Real Estate Consensus Forecast conducted by the Urban Land Institute, home prices are expected to increase in 2013, with housing starts nearly doubling by 2014. Housing prices are expected to stabilize his year, and then increase by 2% next year, followed by 3.5% in 2014.
The rate of unemployment is expected to continue falling, with the GDP growing. Inflation and interest rates will continue to rise, which will increase costs for investors. Survey results do not anticipate substantial increases in real estate capitalization rates for institutional-quality investments, expected to hold at 6%. While this steady growth is encouraging, we can’t take our eyes off some impending global and national events which could provide influence, including the upcoming presidential election, Europe’s debt crisis, major international elections and tightening financial regulations.
Read the complete article here.
Short Sales Making a Comeback With Investors
Sunday, April 1st, 2012 | Bank owned, Foreclosures, Real Estate Investing, Real estate short sales, Short Sales | No Comments
This is good news for real estate investors, but honestly, something we at SREC never stopped doing, even when things got really tough. Short sales are once again are becoming popular with investors. According to a recent survey by HousingPulse, the percentage of investors pursuing short sales rose by nearly 3.5% in a six-month period.
During the same time frame, investor share of all short sales rose by nearly 5%. By contrast, the percentage of homeowners pursuing short sales fell. This can be attributed to the long approval times from mortgage servicers and the unknown closing dates. The average homeowner does not have the resources to wait it out like an informed, experienced investor can. To date, nearly 50% of all the homes on the market are distressed properties, which represents an amazing opportunity for investors.
To read more, click here.
Housing Comes Out of Hibernation
Sunday, April 1st, 2012 | Foreclosures, Pre-foreclosure, Real Estate Investing, Short Sales | No Comments
Spring is officially here, and that signals an awakening of all sorts, including the housing market. The numbers indicate an upswing not just due to the season, but compared to the slump of the previous few years.
Housing starts are up 19% over the past year. Not only that, but they are up 34% in February 2012 vs. February 2011. Add to that an increase in the National Association of Home Builders confidence survey, reaching the highest level since mid-2007. So what is contributing to this shift? Reduced unemployment, new rental construction and stabilizing home values in neighborhoods, to name a few.
Read the complete article here.
Short Sales to Rise Again
Sunday, April 1st, 2012 | Bank owned, Foreclosures, Pre-foreclosure, Real Estate Investing | No Comments
This is a sort of continuation of the article I shared with you last week indicating good news about short sales for real estate investors. The government has reached a $25 billion settlement with the five biggest mortgagers over robo-signing practices. This move is expected to increase the amount of completed short sales.
With this new settlement, “loan servicers will receive credit when they approve sales that include forgiveness of a portion of underwater homeowners’ debt.” While not a huge portion of homeowners will be helped directly, it does remove some of the daunting barriers that have kept homes in the foreclosure pipeline for long periods of time. Of the total $25 billion, $5 billion will go to paying fines, $17 billion is ear-marked for homeowner relief and $3 billion will help underwater borrowers refinance.
To read the complete article, click here.
Incentive Payments to Mortgage Investors Could Triple
Monday, March 26th, 2012 | Bank owned, Foreclosures, Real Estate Investing | No Comments
I just got this article from Jerry Kayser, my broker at Sharp Concepts Realty and one of my SREC coaches, and I had to pass it along to you – this is really big news!
Right now, Freddie Mac and Fannie Mae own 3.3 million of the 11.1 million mortgages where borrowers own more than the house is worth. Worried about the unintended, secondary consequence of homeowners entering into strategic default to get a principle reduction, the GSEs and their regulator, the Federal Housing Finance Agency, have long avoided any sort of principle reduction. New reports are showing that, in actuality, such a move could work for the GSEs under a new version of HAMP – the Home Affordable Modification program. The Treasury said it would “triple incentive payments to investors who allow principle reduction in HAMP workouts.” Freddie Mac’s CEO, Ed Haldeman, said, “The Treasury sweetened the program and tremendously increased the incentive payments in their offer to us. We will reevaluate that to see what may be in our economic best interest. If there are very large incentive payments — which could be 50% of what you could write down — it may be in our economic self-interest to participate in that.”
Bottom line: the Treasury is willing to triple incentive payments to investors, now between 18-63% to the investor behind a loan for a principle write down, instead of 6-21%. For investors, that’s tremendous news.
To read the entire article, click here.
Time to Get into the Rental Game?
Sunday, March 25th, 2012 | Foreclosures, Pre-foreclosure, Real Estate Investing | No Comments
This is good news for anyone who is looking to get into the rental property business. Zillow recently released their Zillow Rent Index which examines the home rental markets around the country. Despite falling home values, the median rent rate increased 3% from January 2011 to January 2012.
That 3% number is much higher in many markets, in some cases matching the home value decline rate. For instance, in the Minneapolis-St. Paul market, home values fell just over 8%, but rent rates rose 11%. We’re seeing similar numbers in Chicago, with values dropping over 10% but rent increasing by 9%. According to Zillow Chief Economist Dr. Stan Humphries, “A thriving rental market will stimulate home sales as investors snap up low-priced inventory to convert to rentals. That, in turn, will lower the number of homes on the market, which will eventually help put a floor under the values of all homes.”
To read more, click here.
BOA Settles, Brings Mortgage Relief to 200,000 Homeowners
Sunday, March 18th, 2012 | Bank owned, Foreclosures, Pre-foreclosure, Real Estate Investing | No Comments
Last week, Bank of America announced that they were reducing the amount owed for 200,000 underwater homeowners. This is huge for the homeowners, because it means a chance to eliminate the underwater portion of their mortgages. The anticipated average reduction is $100,000.
Homeowners are eligible for the reduction if they were at least 60 days delinquent on their mortgages serviced by BOA, as of January 31, 2012. This $1 billion deal is part of a recently announced government foreclosure settlement with top service providers. This move will reduce the overall amount BOA owes in penalties from its $3.25 billion foreclosure settlement.
This arrangement will only apply to loans owned by BOA or private investors, but not ones owned or backed by the GSEs, FHA or Dept. of Veteran’s Affairs.
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