You’ve probably heard or read it: foreclosure rates have declined for the last quarter and compared to last year’s. But what do those numbers really mean? Below is a straightforward article from one of our title companies. Please feel free to pass this along to your friends and family.
Please note: these statistics are national averages. The numbers for the Las Vegas area are not typical of the national rate. Feel free to call our office for up-to-date reports for foreclosures and sales in our local market and we would be happy to send you the latest figures.
The number of foreclosure filings for the second quarter of this year was the lowest reported since the fourth quarter of 2007, according to RealtyTrac’s Midyear 2011 Foreclosure Market Report released Thursday.
All categories of foreclosures showed decreases on both a quarterly and annual basis. Totaling 608,235 for the quarter, foreclosure filings showed an 11 percent decrease from the first quarter of the year and a 32 percent decrease from the second quarter of 2010.
The total number of foreclosure filings for the first half of 2011 was 1,170,402, demonstrating a 25 percent decrease from the previous six months and a 29 percent decrease from the first half of 2010.
According to RealtyTrac, 0.9 percent of all U.S. housing units received at least one foreclosure filing in the first six months of 2011. Monthly foreclosure filings for the month of June totaled 222,740, a 4 percent increase from May and a 29 percent decrease from June 2010.
June marked the ninth consecutive month in which foreclosure activity declined on a year-over-year basis. However, June showed month-over-month increases in default notices, scheduled auctions, and REOs.
While declining foreclosure filings might ignite encouragement, RealtyTrac CEO James J. Saccacio warns these numbers might not point to improvements in the market. “Unfortunately, with unemployment rates inching back up, consumer confidence weak and home sales and prices continuing to languish, this doesn’t appear to be the case,” Saccacio says.
Saccacio estimates that due to processing and procedural delays, up to 1 million foreclosure actions that should have taken place this year, will be delayed until 2012 or later. “This casts an ominous shadow over the housing market, where recovery is unlikely to happen until the current and forthcoming inventory of distressed properties can be whittled down to a manageable number” Saccacio says.
While Nevada, at 5 percent, ranked highest in the nation in terms of foreclosure rate, California showed the highest total number of filings at 263,500. Arizona ranked second in states with highest foreclosure rates at 2.82 percent, while also ranking third in terms of total foreclosure filings with 77,525 for the first half of the year. Florida had the second-highest number of foreclosure filings at 113,641. Other states ranking in the top 10 for total foreclosure filings included Michigan (61,005), Georgia (60,870), Illinois (60,636), Texas (55,442), Nevada (53,217), Ohio (44,419), and Colorado (25,744).
In addition to Nevada and Arizona, states ranking in the top 10 for foreclosure rates were California (1.96 percent), Utah (1.65 percent), Georgia (1.50 percent), Idaho (1.49 percent), Michigan (1.34 percent), Florida (1.28 percent), Colorado (1.19 percent), and Illinois (1.15 percent).
The average number of days a U.S. property spent in the foreclosure process in the second quarter of 2011 was 318, showing an increase from both the first-quarter average of 298 days, and from the average reported for the second quarter of 2010, 227 days.
The foreclosure process spanned the highest number of days in New York at 966 days on average, followed by New Jersey with 944 days and Florida with 676 days. Foreclosures took the least amount of time in Texas, only 92 days on average, and Virginia, where foreclosures averaged 106 days.
The average number of days from foreclosure to sale for REOs sold in the second quarter of 2011 was 178, a slight increase from the first-quarter average of 176 and from the average in the second quarter of 2010, which was 164 days.
U.S. properties in foreclosure that sold in the second quarter of 2011 averaged 213 days from the start of the foreclosure process to the sale, a decrease from the 228 day average in the first quarter of 2011 and increase from the 195 day average in the second quarter of 2010.
But wait! Foreclosure doesn’t have to be your only recourse! Have you thought about short sale? The Dulcie Crawford Group is conducting a FREE educational seminar that will discuss this and other possible strategies, on Saturday, August 27th, 1:30 PM. More information can be found at our website.
Please sign-up here.
Showing posts with label foreclosure help. Show all posts
Showing posts with label foreclosure help. Show all posts
Monday, August 8, 2011
Friday, June 10, 2011
80% of Las Vegas Homeowners are Underwater. What can you do to protect yourself and your assets?
Find out at the next FREE power-packed educational seminar that The Dulcie Crawford Group is hosting on Saturday, June 18, 10:30 AM. The seminar will also look into what the future holds for Las Vegas’ real estate market. As a Nevada property owner, you’re probably in the same situation as 80% of the population. Is Bankruptcy the safest and only option for you to dispose of a poor real estate investment? Are you thinking of walking away because you think there is no other way out? There are other options! You need the right strategies that give you all the alternatives available to you to get rid of an inopportune investment. Before you do anything, give us a chance to show you how WE CAN HELP.
Perhaps, finding out more about these other topics will benefit you too:
This is an event you don’t want to miss. Please mark your calendars:
RSVP by June16 to reserve your seat at: http://dulciecrawford.com/ShortSaleSeminar.ubr.
Remember: It doesn’t cost you anything to attend but it can very well give you the much needed professional guidance you need so you can make the best decision. Please feel free to pass along this information to a family, friend or neighbor who you think can also benefit from it. If you have any questions or need help signing up for the seminar, please contact us at: 702.588.6842, 702.285.1990, or dulciecrawford@gmail.com.
Perhaps, finding out more about these other topics will benefit you too:
- Loan Modification — Solution or Myth?
- Short Sale Strategies that Lead to a Deficiency Release
- How to Walk Away from Debt But Still Protect Your Assets
- Asset Trust Protection—why you need to have one to protect your family
- 2011 Changes to the Government Aid Programs like HAMP and HAFA
- Do you need legal representation? We have partnered with a leading short sale attorney to offer you consultation fee for as little as $200
- Dulcie Crawford—Realtor, 13 years professional experience, Las Vegas native, Short Sale/Foreclosure Resource Specialist, Top Producer in Short Sale & Distressed Properties
- Atty. Carlos McDade, ESQ, Black & Lobello – One of NV’s Foremost Law Firms in Real Estate Short Sale Negotiation and Asset Protection Laws
- Atty. Martin Prybylski, ESQ, Robertson & Benevento – One of NV’s Highly Experienced Bankruptcy Attorneys
This is an event you don’t want to miss. Please mark your calendars:
Saturday, June 18th, 10:30 AM – 12:30 PM
Realty One Group Seminar Room
9089 S. Pecos Road Suite 3400, Henderson.
RSVP by June16 to reserve your seat at: http://dulciecrawford.com/ShortSaleSeminar.ubr.
Remember: It doesn’t cost you anything to attend but it can very well give you the much needed professional guidance you need so you can make the best decision. Please feel free to pass along this information to a family, friend or neighbor who you think can also benefit from it. If you have any questions or need help signing up for the seminar, please contact us at: 702.588.6842, 702.285.1990, or dulciecrawford@gmail.com.
Monday, November 1, 2010
NAR MEETS WITH BIG BANKS TO DISCUSS FORECLOSURES PROBLEMS
With all the recent issues surfacing related to foreclosures, it is good to note that the National Association of Realtors (NAR) is taking a highly proactive stance to address the current market struggle with housing and mortgage. Recently, the NAR Leadership Team has held several meetings during the past two months with the heads of major national banks, i.e. Bank of America Home Loans, Wells Fargo Home Mortgage, Chase Home Mortgage, and CitiMortgage, to discuss problems with short sales and the availability of credit to potential buyers. NAR’s position has always been that “we want to help homeowners avoid foreclosure, whenever possible.”
These meetings give NAR an opportunity to discuss with the four largest lenders the problems Realtors face every day when working to get deals to the closing table. All the banks acknowledge the difficulties that realtors, lenders and homeowners are facing and have given their commitment to work with all concerned.
We are including below the key agreement points provided by NAR, as a result of this meeting. As an active member of the NAR, my group supports the initiatives and will closely monitor the progress that will enable us to provide you with the best service.
SUMMARY OF BANK MEETINGS
In each meeting, lenders and REALTORS® have agreed to work in the following areas:
Transparency
REALTORS® need to understand each lender’s policies for underwriting loans, valuing property, selecting brokers for REO listings, and deciding whether to approve a short sale.
Service
Having a single point of contact is extremely important to improve service to the borrower, short seller, and the real estate agent. NAR is urging all lenders to adopt this approach.
Balance
FHA and the government sponsored enterprises (GSEs: Fannie Mae and Freddie Mac) have become over-focused on safety at the expense of their mission. NAR urges lenders to advocate a return to a reasonable center, now that credit policies have over-corrected.
Speed
When a borrower applies for a loan and receives a conditional approval, the conditions are often impossible to meet. It would be better to decline the loan and allow all parties to move on. Short sale approvals often take months. HAFA and other short sales programs should be implemented quickly.
Accuracy
Lenders are aware that problems related to the application of new appraisal guidelines have skewed some appraisals. NAR continues to raise these issues with the lenders, regulators, FHA, and the GSEs and seek solutions.
Performance/Compensation
Real estate professionals work extremely hard and for many months on a successful short sale. NAR urges lenders to make commissions policies more transparent and to agree not to reduce commissions at or shortly before closing. At the same time, NAR acknowledges that lenders waste time processing short sales that are not real offers, and we urge our members not to participate in this practice.
Lenders also are monitoring performance of REO listing brokers and will take steps to resolve problems.
These meetings give NAR an opportunity to discuss with the four largest lenders the problems Realtors face every day when working to get deals to the closing table. All the banks acknowledge the difficulties that realtors, lenders and homeowners are facing and have given their commitment to work with all concerned.
We are including below the key agreement points provided by NAR, as a result of this meeting. As an active member of the NAR, my group supports the initiatives and will closely monitor the progress that will enable us to provide you with the best service.
SUMMARY OF BANK MEETINGS
In each meeting, lenders and REALTORS® have agreed to work in the following areas:
Transparency
REALTORS® need to understand each lender’s policies for underwriting loans, valuing property, selecting brokers for REO listings, and deciding whether to approve a short sale.
Service
Having a single point of contact is extremely important to improve service to the borrower, short seller, and the real estate agent. NAR is urging all lenders to adopt this approach.
Balance
FHA and the government sponsored enterprises (GSEs: Fannie Mae and Freddie Mac) have become over-focused on safety at the expense of their mission. NAR urges lenders to advocate a return to a reasonable center, now that credit policies have over-corrected.
Speed
When a borrower applies for a loan and receives a conditional approval, the conditions are often impossible to meet. It would be better to decline the loan and allow all parties to move on. Short sale approvals often take months. HAFA and other short sales programs should be implemented quickly.
Accuracy
Lenders are aware that problems related to the application of new appraisal guidelines have skewed some appraisals. NAR continues to raise these issues with the lenders, regulators, FHA, and the GSEs and seek solutions.
Performance/Compensation
Real estate professionals work extremely hard and for many months on a successful short sale. NAR urges lenders to make commissions policies more transparent and to agree not to reduce commissions at or shortly before closing. At the same time, NAR acknowledges that lenders waste time processing short sales that are not real offers, and we urge our members not to participate in this practice.
Lenders also are monitoring performance of REO listing brokers and will take steps to resolve problems.
Tuesday, December 15, 2009
RECENT RULING MAY HELP HOMEOWENERS TRYING TO AVOID FORECLOSURE / LV HOME PRICES RISE AS SALES TAKE SEASONAL FALL
In a recent report from the Las Vegas Review Journal by reporter John G. Edwards, homeowners fighting back foreclosure may have some hope to delay the process. This ruling made by U. S. District Judge Kent Dawson “makes it harder for lenders to foreclose on home mortgages” as it challenges the electronic system of recording the ownership of residential mortgages for the mortgage banking industry.
About half of all U.S. mortgages “whose loans have been securitized, sliced and diced are now held" by Mortgage Electronic Registration Systems Inc., or MERS, according to a blog posted by securities analyst Barry Ritholtz.
According to the article, “The case, heard by a panel of federal judges in November, concerned whether Mortgage Electronic Registration Systems Inc. could foreclose on residences on behalf of lenders.”
The electronic system records the ownership of residential mortgages for the mortgage banking industry.
Dawson said the company could not foreclose on a home, because it did not provide evidence that it held the note on the residence and didn’t show that it was an agent of the lender.
The case started in bankruptcy court two years ago.
MERS officials asked bankruptcy Judge Linda Riegle for permission to start foreclosure proceedings against a property owned by Lisa Marie Chong. Bankruptcy trustee Lenard Schwartzer objected, saying the electronic system was not a “real party in interest” in the mortgage loan.
Like many mortgages, Chong’s loan had been securitized, meaning it had been pooled or packaged into a security held by investors.
Mortgage Electronic Registration Systems Inc. was unable to show that it had possession of the note. The bankruptcy judge ruled in Schwartzer’s favor. The decision was appealed to federal court.
In his decision Tuesday, Dawson said "the registration system does not lose money when borrowers fail to make payments on home mortgages." Dawson found that the Mortgage Electronic Registration must at least provide evidence that it was a representative of the mortgage loan holder, which it failed to do.
“Since MERS provided no evidence that it was the agent or nominee for the current owner of the beneficial interest in the note, it has failed to meet its burden of establishing that it is a real party in interest with standing,” Dawson said, affirming the bankruptcy court ruling.
Real estate attorney Tisha Black Chernine said the ruling is good news for struggling borrowers and homeowners in general.
“It will have a dramatic effect on lenders being able to foreclose,” she said.
Because the decision makes it more difficult to foreclose, she hopes lenders will be more willing to negotiate with homeowners struggling to meet mortgage payments by approving short sales or making other concessions.
In a short sale, a lender agrees to allow a homeowner to sell his home for less than is owed.
This is particularly helpful, because many homeowners owe far more than their homes are worth since home prices have fallen. Houses sold in short sales typically go for 30 percent more than homes sold after foreclosure, Black Chernine said.
Appraisers looking at the short sale price will use it in determining the market value. Thus, avoiding foreclosure results in higher market values for other houses, she said.
“It should help buoy home prices,” Black Chernine said.
Bill Uffelman, chief executive officer of the Nevada Bankers Association, predicted that most foreclosures will be able to proceed, because the real mortgage owners and notes will be able to be identified in most cases.
However, he said, many homeowners facing foreclosure may be able to stay in their homes longer because of the delay.
“In the end in 99.9 percent of the cases, ownership of the note will be proved,” he said.
While the decision is believed to be the first of its kind in Nevada, the Kansas Supreme Court made a similar finding in a similar case.
LV MEDIAN PRICE RISE, SALES SLOW DOWN TYPICAL OF HOLIDAY SEASON
On another front, the recent statistics released by the Greater Las Vegas Association of Realtors show that Las Vegas’ median price of homes sold in November was $140,000, about $900 higher than October. The median price was $138,000 in September.
The traditional holiday sales slowdown of homes and condos took place in November while prices edged up slightly again, according to the report.
Analysts say the increase is a further reflection that home prices have stabilized for now. Overall, home prices are down 25 percent from November 2008.
Condo prices fell 2.9 percent in November to $68,000. Prices are 25 percent below where they were in November 2008.
Demand for homes and condos tend to soften in November, December and January because of the holidays, but sales last month eclipsed November 2008.
The GLVAR reported 3,117 sales of new homes in November, a 43 percent increase over November 2008. The 726 sales of condos and town homes was 85 percent higher than November 2008.
Compared to October, however, sales of homes fell by 12 percent and sales of condos and town homes fells by 15 percent.
Despite the slowdown, GLVAR President Sue Naumann said the extension of an $8,000 tax credit for first-time homebuyers and creation of $6,500 tax credit for other buyers should spur sales in 2010.
Investors and first-time buyers continue to dominate the sales market, according to the GLVAR.
The percentage of homes purchased with cash in November was 41 percent, nearly matching October, Naumann said. Many investors rely on cash deals.
The number of sales of foreclosed upon homes continued to drop in a reflection of limited supply that’s on the market, analysts said. The GLVAR reported 61 percent of all sales in November were bank-owned properties, down from 64.5 percent in October.
About half of all U.S. mortgages “whose loans have been securitized, sliced and diced are now held" by Mortgage Electronic Registration Systems Inc., or MERS, according to a blog posted by securities analyst Barry Ritholtz.
According to the article, “The case, heard by a panel of federal judges in November, concerned whether Mortgage Electronic Registration Systems Inc. could foreclose on residences on behalf of lenders.”
The electronic system records the ownership of residential mortgages for the mortgage banking industry.
Dawson said the company could not foreclose on a home, because it did not provide evidence that it held the note on the residence and didn’t show that it was an agent of the lender.
The case started in bankruptcy court two years ago.
MERS officials asked bankruptcy Judge Linda Riegle for permission to start foreclosure proceedings against a property owned by Lisa Marie Chong. Bankruptcy trustee Lenard Schwartzer objected, saying the electronic system was not a “real party in interest” in the mortgage loan.
Like many mortgages, Chong’s loan had been securitized, meaning it had been pooled or packaged into a security held by investors.
Mortgage Electronic Registration Systems Inc. was unable to show that it had possession of the note. The bankruptcy judge ruled in Schwartzer’s favor. The decision was appealed to federal court.
In his decision Tuesday, Dawson said "the registration system does not lose money when borrowers fail to make payments on home mortgages." Dawson found that the Mortgage Electronic Registration must at least provide evidence that it was a representative of the mortgage loan holder, which it failed to do.
“Since MERS provided no evidence that it was the agent or nominee for the current owner of the beneficial interest in the note, it has failed to meet its burden of establishing that it is a real party in interest with standing,” Dawson said, affirming the bankruptcy court ruling.
Real estate attorney Tisha Black Chernine said the ruling is good news for struggling borrowers and homeowners in general.
“It will have a dramatic effect on lenders being able to foreclose,” she said.
Because the decision makes it more difficult to foreclose, she hopes lenders will be more willing to negotiate with homeowners struggling to meet mortgage payments by approving short sales or making other concessions.
In a short sale, a lender agrees to allow a homeowner to sell his home for less than is owed.
This is particularly helpful, because many homeowners owe far more than their homes are worth since home prices have fallen. Houses sold in short sales typically go for 30 percent more than homes sold after foreclosure, Black Chernine said.
Appraisers looking at the short sale price will use it in determining the market value. Thus, avoiding foreclosure results in higher market values for other houses, she said.
“It should help buoy home prices,” Black Chernine said.
Bill Uffelman, chief executive officer of the Nevada Bankers Association, predicted that most foreclosures will be able to proceed, because the real mortgage owners and notes will be able to be identified in most cases.
However, he said, many homeowners facing foreclosure may be able to stay in their homes longer because of the delay.
“In the end in 99.9 percent of the cases, ownership of the note will be proved,” he said.
While the decision is believed to be the first of its kind in Nevada, the Kansas Supreme Court made a similar finding in a similar case.
LV MEDIAN PRICE RISE, SALES SLOW DOWN TYPICAL OF HOLIDAY SEASON
On another front, the recent statistics released by the Greater Las Vegas Association of Realtors show that Las Vegas’ median price of homes sold in November was $140,000, about $900 higher than October. The median price was $138,000 in September.
The traditional holiday sales slowdown of homes and condos took place in November while prices edged up slightly again, according to the report.
Analysts say the increase is a further reflection that home prices have stabilized for now. Overall, home prices are down 25 percent from November 2008.
Condo prices fell 2.9 percent in November to $68,000. Prices are 25 percent below where they were in November 2008.
Demand for homes and condos tend to soften in November, December and January because of the holidays, but sales last month eclipsed November 2008.
The GLVAR reported 3,117 sales of new homes in November, a 43 percent increase over November 2008. The 726 sales of condos and town homes was 85 percent higher than November 2008.
Compared to October, however, sales of homes fell by 12 percent and sales of condos and town homes fells by 15 percent.
Despite the slowdown, GLVAR President Sue Naumann said the extension of an $8,000 tax credit for first-time homebuyers and creation of $6,500 tax credit for other buyers should spur sales in 2010.
Investors and first-time buyers continue to dominate the sales market, according to the GLVAR.
The percentage of homes purchased with cash in November was 41 percent, nearly matching October, Naumann said. Many investors rely on cash deals.
The number of sales of foreclosed upon homes continued to drop in a reflection of limited supply that’s on the market, analysts said. The GLVAR reported 61 percent of all sales in November were bank-owned properties, down from 64.5 percent in October.
Friday, February 20, 2009
STIMULUS PACKAGE AND OBAMA MORTGAGE PLAN ....SIMPLIFIED
Here is a very straightforward article with regard to the Obama Stimulus Package signed into law this week and how it could affect you as a homeowner or buyer, courtesy of my preferred lender Aaron Gordon of Countrywide Home Loans. His contact information is below for your reference should you need to contact him. We at the Dulcie Crawford Group will also be happy to answer any questions you may have. We have also included some links to the Stimulus Package if you are interested to learn more.
There has been a lot of activity this week attempting to solve the historic economic problems. No one expects this to cure the problem overnight but it could reduce the damage.These two plans have a dramatic effect on our business. Let me try and make them easy to understand.
The $787 billion Economic Stimulus Package
Here is how the Economic Stimulus Package affects our business:
The Fannie and Freddie loan limits will be raised to $727,000 in high cost areas.
Although this doesn't affect Las Vegas, which will stay at $417,000, it does our neighbors in Southern California. Market recovery in California is nearly as important to our local economy as theirs. Keep in mind most of our tourists come from their and many of our transplants.
The first-time homebuyer tax credit will be raised to $8,000 with no payback. Many were hoping this would be $15,000 as first passed through the Senate but it's settled at $8,000. You have to buy a home between January 1, 2009 (yes, it's retroactive) and December 31, 2009. You have to be a first-time homebuyer or have not owned a home in the last three years. To get the full benefit, you have to make less than $75,000 as a single tax payer or $150,000 as married taxpayers.
If you sell the home before you have been there three years, you have to forfeit the credit or pay it back if you already wrote it off. This credit is different than the $7,500 one first-time buyers got in 2008. Right now, that credit has to be paid back. However, there is some discussion that it may not have to be repaid. If the repayment provision in the new home buyer tax credit is made retroactive back to April 9th 2008, when that planfirst took place. This detail is still to be finalized.
Interest rates should stay low
Rates have been driven down to historic lows since late November. This is a direct result of the Government buying hundreds of billions of dollars in mortgage-backed securities.The Economic Stimulus package calls for the Government to buy another $200-300 billion of mortgage paper from Fannie and Freddie. We could see historically low rates through the end of the year.
The Homeowner Affordability and Stability Plan (Obama Plan)
You can read the plan here:
www.treas.gov/initiatives/eesa/homeowner-affordability-plan/FactSheet.pdf
The complete details will be announced on March 4th.
The plan seeks to help as many as 9 million Americans avoid foreclosure by restructuring or refinancing their mortgages. The program is intended to help responsible homeowners who are experiencing financial hardship and may be at risk of losing their homes to foreclosure. Lenders will not be forced to participate. It’s voluntary.
Here are the highlights:
Right now if you want to refinance, and your loan amount is over $287,500, you need around 20% equity in your home. The new plan allows homeowners who are current on their mortgage to refinance through Fannie and Freddie up to 105% of the value of their home.
This means if you owe $200,000 on your home and it's only worth $190,000 youcan now refinance. The 105% financing includes your closing costs up to 4%.Most Las Vegans are more than 5% upside down. There is not much relief for them in this plan.
If you are late on your mortgage, the Government is now introducing a new standardized form of note modification. This is NOT a principal reduction. Your loan amount will not change. This is modifying your existing loan. If you currently owe $250,000 on your mortgage and your home is worth $175,000 you would be modifying your $250,000. Not getting a new mortgage for less.
The Government will be financially incentivizing homeowners and loan servicers who modify mortgages successfully. If you modify your loan under this plan and make your payment on time for five years, you may be eligible for up to $5,000 in reduction of your mortgage debt.
The lenders who participate in the plan will be agreeing to let you modify your loan to 38% of your gross income. This means if you make $4000 per month, they will be agreeing to lower your payment to $1520. Then the Government will step in and help you lower your payment to 31% or $1240. They will pay the lender the difference out of the $75 billion in the fund.
You need to be able to document your income. This will be challenging for some self-employed borrowers.
The government is also investing hundreds of billions in Fannie and Freddie to keep them solvent and aggressive in making loans, while keeping mortgage rates low.
If you seek relief under the plan, the home must be your primary residence. Investment properties and second (vacation) homes are not eligible.The loan must be a conforming loan. That's $417,000 or under in Las Vegas. The homeowner must be able to qualify for a 30-year fixed mortgage payment with their current income.You must be employed to take advantage of the refinance. If you are not, you may be eligible for the modification still.
You may be eligible for a loan modification in this plan even if you have not been late yet or missed a payment. Let's say you have a first and second mortgage. Under this plan, you may be eligible to modify the first lien so long as the second agrees to re-subordinate the second if necessary.
The plan also calls for changes to personal bankruptcy provisions. This plan will allow bankruptcy judges to modify mortgages written in the past few years.If you have any questions, please don't hesitate to contact me.
Aaron Gordon
Home Loan Consultant/Sales Manager
Countrywide Bank, FSB
Cell: (702) 283-2333 Office: (702) 304-8900
Secure eFax: 1-866-905-7922
10190 Covington Cross Drive #190Las Vegas, NV 89144
email: aaron_gordon@countrywide.com
web: http://countrywidelocal.com/aarongordon
More on the Stimulus Bill on the web:
http://news.yahoo.com/s/ap/20090214/ap_on_go_co/stimulus_stakes_who_gets_what
http://news.yahoo.com/s/ap/20090215/ap_on_go_pr_wh/obama
There has been a lot of activity this week attempting to solve the historic economic problems. No one expects this to cure the problem overnight but it could reduce the damage.These two plans have a dramatic effect on our business. Let me try and make them easy to understand.
The $787 billion Economic Stimulus Package
Here is how the Economic Stimulus Package affects our business:
The Fannie and Freddie loan limits will be raised to $727,000 in high cost areas.
Although this doesn't affect Las Vegas, which will stay at $417,000, it does our neighbors in Southern California. Market recovery in California is nearly as important to our local economy as theirs. Keep in mind most of our tourists come from their and many of our transplants.
The first-time homebuyer tax credit will be raised to $8,000 with no payback. Many were hoping this would be $15,000 as first passed through the Senate but it's settled at $8,000. You have to buy a home between January 1, 2009 (yes, it's retroactive) and December 31, 2009. You have to be a first-time homebuyer or have not owned a home in the last three years. To get the full benefit, you have to make less than $75,000 as a single tax payer or $150,000 as married taxpayers.
If you sell the home before you have been there three years, you have to forfeit the credit or pay it back if you already wrote it off. This credit is different than the $7,500 one first-time buyers got in 2008. Right now, that credit has to be paid back. However, there is some discussion that it may not have to be repaid. If the repayment provision in the new home buyer tax credit is made retroactive back to April 9th 2008, when that planfirst took place. This detail is still to be finalized.
Interest rates should stay low
Rates have been driven down to historic lows since late November. This is a direct result of the Government buying hundreds of billions of dollars in mortgage-backed securities.The Economic Stimulus package calls for the Government to buy another $200-300 billion of mortgage paper from Fannie and Freddie. We could see historically low rates through the end of the year.
The Homeowner Affordability and Stability Plan (Obama Plan)
You can read the plan here:
www.treas.gov/initiatives/eesa/homeowner-affordability-plan/FactSheet.pdf
The complete details will be announced on March 4th.
The plan seeks to help as many as 9 million Americans avoid foreclosure by restructuring or refinancing their mortgages. The program is intended to help responsible homeowners who are experiencing financial hardship and may be at risk of losing their homes to foreclosure. Lenders will not be forced to participate. It’s voluntary.
Here are the highlights:
Right now if you want to refinance, and your loan amount is over $287,500, you need around 20% equity in your home. The new plan allows homeowners who are current on their mortgage to refinance through Fannie and Freddie up to 105% of the value of their home.
This means if you owe $200,000 on your home and it's only worth $190,000 youcan now refinance. The 105% financing includes your closing costs up to 4%.Most Las Vegans are more than 5% upside down. There is not much relief for them in this plan.
If you are late on your mortgage, the Government is now introducing a new standardized form of note modification. This is NOT a principal reduction. Your loan amount will not change. This is modifying your existing loan. If you currently owe $250,000 on your mortgage and your home is worth $175,000 you would be modifying your $250,000. Not getting a new mortgage for less.
The Government will be financially incentivizing homeowners and loan servicers who modify mortgages successfully. If you modify your loan under this plan and make your payment on time for five years, you may be eligible for up to $5,000 in reduction of your mortgage debt.
The lenders who participate in the plan will be agreeing to let you modify your loan to 38% of your gross income. This means if you make $4000 per month, they will be agreeing to lower your payment to $1520. Then the Government will step in and help you lower your payment to 31% or $1240. They will pay the lender the difference out of the $75 billion in the fund.
You need to be able to document your income. This will be challenging for some self-employed borrowers.
The government is also investing hundreds of billions in Fannie and Freddie to keep them solvent and aggressive in making loans, while keeping mortgage rates low.
If you seek relief under the plan, the home must be your primary residence. Investment properties and second (vacation) homes are not eligible.The loan must be a conforming loan. That's $417,000 or under in Las Vegas. The homeowner must be able to qualify for a 30-year fixed mortgage payment with their current income.You must be employed to take advantage of the refinance. If you are not, you may be eligible for the modification still.
You may be eligible for a loan modification in this plan even if you have not been late yet or missed a payment. Let's say you have a first and second mortgage. Under this plan, you may be eligible to modify the first lien so long as the second agrees to re-subordinate the second if necessary.
The plan also calls for changes to personal bankruptcy provisions. This plan will allow bankruptcy judges to modify mortgages written in the past few years.If you have any questions, please don't hesitate to contact me.
Aaron Gordon
Home Loan Consultant/Sales Manager
Countrywide Bank, FSB
Cell: (702) 283-2333 Office: (702) 304-8900
Secure eFax: 1-866-905-7922
10190 Covington Cross Drive #190Las Vegas, NV 89144
email: aaron_gordon@countrywide.com
web: http://countrywidelocal.com/aarongordon
More on the Stimulus Bill on the web:
http://news.yahoo.com/s/ap/20090214/ap_on_go_co/stimulus_stakes_who_gets_what
http://news.yahoo.com/s/ap/20090215/ap_on_go_pr_wh/obama
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