Thursday, October 27, 2011

Underwater Refinance Program Expanded


by Dean Hartman on October 27, 2011

At a campaign stop in Nevada on Monday, President Obama announced an expansion of the HARP (Home Affordable Refinance Program) which would eliminate the current maximum LTV of 125%. The initiative is being looked at as a way to reward those homeowners who have been good payers of their mortgages but, because of declining home values, they could not take advantage of today’s lower interest rates.
While the actual details on the program will not be released until next month, here’s the buzz:

  • It will only pertain to loans currently being serviced by Fannie Mae or Freddie Mac
  • Because of the removal of the LTV cap, appraisals may not be required
  • With the only qualifying criteria announced being that the last six payments be on time, it is possible that income documentation may be streamlined and credit scores might be more forgiving
  • Fees allegedly will be reduced
  • Incentives may be offered to people who shorten their repayment time
  • It also sounds that the banks may be given some incentive by not holding them liable for the underwater portion of the new loan (a major incentive for sure).
The government is on the hook for these loans already. By lowering the payments (by offering lower rates), they will likely help these loans to continue to perform and make it less likely for the underwater homeowner to walk away.
The original HARP was expected to help 5 million families.  After two years, it has yet to reach 900,000; therefore, estimates ranging from 800,000 to 1.6 million borrowers who may benefit need to be taken with a grain of salt.
Whether the Administration is looking for purely political rhetoric points or not, my advice to underwater homeowners is too keep an eye out for the final guidelines because you just might be able to lower your payments.



Joe Naccarato, Broker, Realtor
Top Performer Award Recipient 
Allen Tate Realtors
Tel. 704.953.0183
Do you know someone buying or selling anywhere? I can help them! Please give them my phone number!

 

Monday, October 17, 2011

Wall Street Journal & Forbes: It’s Time to Buy A Home


by The KCM Crew on October 17, 2011

We believe very strongly that now is the time to buy a home. Some will say we are just saying this to create real estate transactions and commissions. Because of that, today we will quote what those outside the real estate profession are saying to the people who look to them for financial advice.

The Wall Street Journal

Last week, in an article entitled It’s Time to Buy That House, the WSJ told their subscribers:
“It’s an excellent time to buy a house, either to live in for the long term or for investment income…Houses aren’t the magic wealth creators they were made out to be during the bubble. But when prices are low, loans are cheap and plump investment yields are scarce, buyers should jump.”
In an article two weeks ago, MarketWatch.com (the on-line blog for WSJ) told their readers:
“Now could be the best time in history to buy a home.”

Forbes.com

In a report to their subscribers, Capital Economics reported that:
“The previous declines in house prices and the more recent drop in mortgage rates to record lows have created an unusual situation in which the median monthly mortgage payment is more or less the same as the median rental payment.”
Why is this important? Last week, Forbes explained to their readers:
“If rents simply kept up with inflation at a 3.2% annual increase, a $1,500 rent payment would cost that renter nearly $900,000 over the next 30 years. The same $1,500 payment made to their mortgage would be only $540,000 (because the payments don’t increase with inflation).”
They went on to explain the advantages of homeownership during retirement:
“Even with a dismal 1% growth rate over 30 years, a $300,000 property would appreciate well over $100,000 giving the homeowner an additional nest egg for retirement…
At a time when retirement is becoming much more challenging, an extra $400,000 (or likely more) can make a major difference not to mention the impact of NOT having to pay a mortgage.  How much less would you have to save for retirement if you didn’t pay the mortgage?

Bottom Line

When the iconic financial newspaper and the iconic financial magazine say that it now makes financial sense to purchase a house, perhaps it’s time to buy a home.


Joe Naccarato, Broker, Realtor
Top Performer Award Recipient 
Allen Tate Realtors
Tel. 704.953.0183
Do you know someone buying or selling anywhere? I can help them! Please give them my phone number!

Monday, October 3, 2011

Short Sales Picking Up Steam


by The KCM Crew on October 3, 2011

The Office of the Comptroller of the Currency released their Second Quarter 2011 Mortgage Metrics Report last week. In the report, they covered the success the banking industry is having in each of several categories regarding the current housing crisis. Here is what they found:

Loan modifications

These are “actions that contractually change the terms of mortgages with respect to interest rates, maturity, principal, or other terms of the loan.”
Down 18.1% from the first quarter and down 19.5% from last year.

Completed foreclosures

Where “ownership of properties transferred to servicers or investors. The ultimate result is the loss of borrowers’ homes because of nonpayment.”
Up 1.2% from the first quarter but down 30.7% from last year.

Newly initiated foreclosures

“Mortgages for which the servicers initiate formal foreclosure proceedings during the month. Many newly initiated foreclosures do not result in the loss of borrowers’ homes because servicers simultaneously pursue other loss mitigation actions, and borrowers may act to return their mortgages to current and performing status.”
Down 8% from the first quarter and down 1.7% from last year.

Short sales

“Sales of the mortgaged properties at prices that net less than the total amount due on the mortgages. Servicers and borrowers negotiate repayment programs, forbearance, or forgiveness for any remaining deficiency on the debt. Short sales typically have a less adverse impact than foreclosures on borrowers’ credit records.”
Up 12.6% from the first quarter and up 1.7% from last year.

Bottom Line

The only category which is up month-over-month and year-over-year is short sales. And the rate of increase in short sales is accelerating.


Joe Naccarato, Broker, Realtor
Top Performer Award Recipient 
Allen Tate Realtors
Tel. 704.953.0183
Do you know someone buying or selling anywhere? I can help them! Please give them my phone number!

Sunday, October 2, 2011

The Vicious Cycle of Foreclosures

by The KCM Crew on September 30, 2011


 


Joe Naccarato, Broker, Realtor
Top Performer Award Recipient 
Allen Tate Realtors
Tel. 704.953.0183
Do you know someone buying or selling anywhere? I can help them! Please give them my phone number!