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Distressed Sales Amount to Over 30% of the Market

January 11, 2010

Approximately 38% of existing home sales in 2009 were distressed sales and 12% were short sales, according to the National Association of Realtors. Foreclosure sales accounted for two-out-of-three distressed sales and the rest were short sales, NAR spokesman Walter Maloney said. The NAR began tracking short sales in October 2008 and by February and March short sales peaked at 18% of sales. Lately, short sales have been averaging 12% to 13% of sales on a monthly basis. In a short sale, the lender or servicer allows the defaulted homeowner to sell the property to avoid a foreclosure. Fannie Mae and Freddie Mac completed 17,400 short sale transactions in the third quarter, up from 4,900 in the same period a year ago. Fannie alone completed 11,100 short sales in the third quarter, compared to 10,400 for all of 2008.

Statistics coming from the NAR

For First Time Home Buyers who are looking at doing a FHA Home Loan, there is a new change that will impact the up front mortgage insurance premium that will be added to the loan amount. These changes will take place after April 5th, 2010.

FHA increases UFMIP from 1.75/1.5% to 2.25%:

Effective for FHA loans for which the case number is assigned on or after April 5, 2010, FHA will collect an upfront mortgage insurance premium of 2.25 percent. This policy change will increase premiums for purchase money and refinance transactions, including FHA-to-FHA credit qualifying and non-credit qualifying streamlined refinance transactions.

FHA Spot Condo Approval must have case# by Jan 31^st:

Hud has extended the deadline for spot condo approvals to loans with case #’s pulled by January 31^st, 2010.

After this deadline spot approvals will no longer be available.

What does this mean?

The whole condo project must be approved on Hud’s website. If it is not approved, Lenders must submit documentation to the local FHA center (Santa Ana, CA) for the entire project to be approved before you can secure an FHA mortgage in the complex.

This will cost money for the condo project and some time going through the process... but in the long run it will be well worth it, as it is becoming harder to find high LTV ( Loan to Value ) financing.

HAMP Can’t Keep Pace With Foreclosures Says NCRC

As Wall Street bonus season begins, the foreclosure crisis continues into its fourth year largely unabated. Last year saw 10 straight months of over 300,000 foreclosure filings, and 2.8 million homes went into foreclosure, according to Realty Trac.

The news that only 66,000 borrowers have received permanent loan modifications under the Home Affordable Modification Program confirm that the existing responses to the foreclosure crisis can not keep pace with the number of Americans losing their homes.

Meanwhile, financial lobbyists continue to fight against strong measures to provide strong oversight of the financial system and mitigate the damage caused by reckless and irresponsible lending and securitization practices, even as their CEOs told the Financial Crisis Inquiry Commission that they support financial regulation.

“The response to the foreclosure crisis has been like that Marx Brothers movie where in the heat of a battle they shout that ‘help is the way’ over and over again, but the response is humorously small. Except that there’s nothing humorous about foreclosure,” said John Taylor, president and CEO of the National Community Reinvestment Coalition.

“Serious people inside and outside the administration have thought this through, and we all understand that a more substantial response is needed. The question is: Does the political will exist to force the banks to modify loans? Tough talk and action on bonuses and repayment of bailout funds should be accompanied by a stronger response on foreclosure prevention. This is an important pocketbook and a political issue for millions of Americans, and failure now means growing disillusionment.”

Mr. Taylor said the financial services lobby has so far successfully staved off serious reforms.

“They killed bankruptcy reform twice, indefinitely stalled action on predatory lending, weakened the Consumer Financial Protection Agency in the House and appear to be getting their way in the Senate, and have refused to put the required resources into making the HAMP program work,” he said.

“It’s time to take the gloves off and pass some measures that actually help Americans. If it takes a prime time address or other extraordinary measures by the president to pop the bubble of denial about responding to the financial crisis that seems to be hovering over the Capitol, then so be it.”

Several needed measures should be considered to address the foreclosure crisis. Congress and the administration are clearly moving to address unemployment, the fastest growing contributor to the foreclosure crisis, according to Mr. Taylor. The Treasury Department should also considering purchasing loans at a discount and mandating their modification as NCRC has proposed. This does not require legislative approval, and could be done tomorrow. Bankruptcy reform, which would provide additional relief for homeowners facing foreclosure, should be re-enacted in Congress with a push from the administration, he said.

Provided by ManangingREO

Wondering how much your bank received in TARP money from the government to keep them up right or possibly afloat?

This link will show you in millions or billions how much... http://www.lendingonrealestate.com/Content.aspx?URL=bailout.uslaw.com/?page_id=353&LinkProp=4&FileName=CustomPage2.x 

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.

FHA Property Flipping

“This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed,” Donovan said.

In today’s market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

“FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties,” said FHA Commissioner David H. Stevens. “This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity.”

The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:

•All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.

•In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.

•The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Specific conditions and other details of this new temporary policy are in the text of the waiver, available on HUD’s website here.

Talk about great news!!!!

Some Lenders are implementing new requirements for approvals on condo projects. Ones that are approved will remain so as long as they are in good standing....

VA CONDOMINIUM APPROVAL Effective December 7, 2009, VA will no longer accept HUD/FHA condominium project approvals in lieu of a VA project approval. HUD/FHA condominium project approvals previously accepted by VA will remain on VA’s approved project list.