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Arizona Underwater Homeowners To Get Refinance Help Revamped Program Eases Eligibility Rules

2011-10-25T16:09:00.000-07:00

The Arizona Republic, by Catherine Reagor - Oct. 25, 2011 12:00 AM

More Arizona homeowners may soon be able to refinance to current low mortgage-interest rates, no matter how far underwater they are in their homes. The Obama administration on Monday announced long-awaited details of an expansion of a program that helps homeowners refinance to reduce their payments.
Mortgage rates have fallen to record lows, and many homeowners would save hundreds of dollars a month if they could reduce the amount of interest they pay. But the housing crash has created a huge barrier.
A refinanced loan typically requires the home have enough value to cover the entire amount of the new loan. But plunging home values means many owners owe far more on their loans than their homes are worth. An estimated 40 percent of metro Phoenix homeowners are currently underwater.
The federal Home Affordable Refinancing Program has allowed certain loans to be refinanced if the borrower owed up to 125 percent of the home's value. But many underwater borrowers in Arizona owe more.
The plan announced Monday would lift the value requirement completely; allowing some borrowers to refinance no matter how much their home's value has dropped, if their mortgage is backed by one of the two largest federal mortgage agencies and they meet other requirements.
Borrowers can start to apply as soon as December, according to the few details released Monday, and the program would run through the end of 2013.
Speaking on a temporary stage in a Las Vegas neighborhood, Obama touted the plan as a way to allow struggling homeowners to save money. "Probably the single greatest cause of the financial crisis and this brutal recession has been the housing bubble that burst four years ago," he said. "And as long as this goes on, our recovery can't take off as quickly as it would after a normal recession."

The plan
The HARP program has helped about 900,000 homeowners nationally to refinance. Arizona figures aren't available.
The plan described by Obama and the Federal Housing Finance Agency on Monday would expand HARP by changing the rules and costs associated and extending the time period in which borrowers can apply. Among the key elements:

- Refinancing will be available to homeowners with loans backed by Fannie Mae or Freddie Mac in 2009 or earlier.

As with the current refinancing program, the option would be open only to borrowers with mortgages backed by the two largest federal mortgage agencies. Borrowers whose banks hold their loans privately would not qualify. Still, federally backed loans make up a majority of the existing mortgages in the state and the country.
The federal government did not give an official count of how many people will be able to refinance, but U.S. Housing and Urban Development head Shaun Donovan estimated 4 million families could be eligible.
Current federal programs have encouraged lenders to refinance such loans or modify loan-payment amounts for borrowers in financial trouble, but the banks that handle the payments in many cases have been slow to respond. Obama said the new program will allow other lenders to compete to make the new loans.
"Some lenders, frankly, just refuse to refinance," he said Monday. "So, these changes are going to encourage other lenders to compete for that business by offering better terms and rates, and eligible homeowners are going to be able to shop around."
The program is designed to help borrowers who took loans before the housing crash, and only applies to loans backed by the federal agencies on or before May 31, 2009. Market-watchers say the key will be to see whether banks and the mortgage giants actually follow through.
"The new refinancing program sounds like a good idea, but it has to have teeth," said John Smith, president of the Mesa-based non-profit Housing Our Communities, which counsels homeowners on avoiding foreclosure. "The government has to make Fannie and Freddie go through with these deals."

- Refinancing will be available to homeowners who are current on their mortgage payments.

To qualify, homeowners must not have missed more than one payment in the past year.
The plan differs from other programs that were meant to help borrowers who could no longer afford their mortgages. The federal loan-modification program was open only to borrowers who were already late on making their payments.
Instead, the refinancing is open to borrowers who have made their payments. Although it could help some people who have struggled to make those payments avoid foreclosure, it also could simply help other homeowners free up more money each month.

- Refinancing will be available no matter how much the home is currently worth.

The loan simply must be backed by Fannie or Freddie and be within standard sizes - for example, oversize "jumbo" loans will not qualify.
Borrowers who meet the financial requirements could refinance no matter how much the amount of the loan exceeds the home's current value, known as the loan-to-value ratio.
The previous HARP plan called for a 105 percent loan-to-value ratio, meaning homeowners who owed 5 percent more than their houses were worth could refinance under the plan. That ratio was quickly criticized for helping few in the hardest-hit housing markets of Arizona, California, Nevada, Florida and Michigan. It was raised to 125 percent but still wasn't enough for many homeowners who bought during the past decade in metro Phoenix.
"If the limit is lifted completely, then that will make a big difference for Arizona," said housing analyst Michael Orr, who publishes an online daily analysis of metro Phoenix's housing market called the "Cromford Report." "Many people have a loan-to-value of over 200 percent."

- Refinancing will cost less.

The changes announced Monday would also limit fees associated with refinancing, in hopes of making the move more affordable. Homeowners who qualify don't have to pay additional excessive fees for an appraisal or processing.
Jay Luber, president of Phoenix-based Galaxy Lending, knows many homeowners who will qualify for this program. He believes it could "accelerate the stabilization of values in metro Phoenix by decreasing foreclosures and short sales."

The doubts
Housing advocates point to past programs that have garnered bad reputations. The Housing Affordable Modification Program, HAMP, was announced in conjunction with the original refinancing program two years ago.
Tens of thousands of homeowners in Arizona alone were promised loan modifications and put in trial programs. These borrowers made the trial payments for more than a year in some cases only later to be denied a permanent modification.
Overall, the federal housing plan called for helping 7 million to 9 million homeowners. Fewer than 2.5 million have been helped with all of the plan's programs.
Phoenix real-estate agent Kevin Kaufman is skeptical of the new plan. "I'm honestly very, very pessimistic about any government program actually helping people," he said. "Having been in the trenches for four years now and seen so many empty promises. I don't believe the government will actually help."

Too late?
When Obama unveiled federal efforts to stem foreclosures two years ago, he traveled to Mesa to make the announcement. At the time, foreclosures were surging.
Today, foreclosures have been steadily slowing in metro Phoenix. So the latest move has been criticized as coming too late.
Also, many market observers note that for many homeowners, the real problem is not just their monthly payment but the fact that they will still owe so much more than their houses are worth, making them unable to sell or move.
The Obama administration is hinting about more aid for people who have lost homes to foreclosure and neighborhoods with many empty foreclosure homes.
But this expansion of HARP does help the homeowners who continued to pay as others walked away. Tom Schroder was turned down for a refinance last year because he owes at least 40 percent more than his Scottsdale home is worth. He said he is angry because he feels like he's being penalized for other people's foreclosures and bad decisions.
"I keep paying my mortgage on time and watching others buy homes at 5 or now even 4 percent (interest rates)," he said. "The changes to the refinancing program sound good. I just want to see some action on it from lenders and fast."
Patricia Garcia Duarte, president of the Phoenix-based non-profit homeownership counseling service Neighborhood Housing Services, said the new refinancing plan rewards homeowners with good credit who have not missed many payments.
"Owing more on a property than it is worth is still problematic for many in Arizona," she said. "Revamping HARP is a good thing, not the entire solution."

Read more: http://www.azcentral.com/business/realestate/articles/2011/10/25/20111025arizona-homeowners-underwater-help-obama.html#ixzz1boN5j8yf

Tracking The Market And Economic Trends That Shape Your Finances

2011-08-13T11:50:00.000-07:00

The typical rate on a 30-year fixed mortgage fell this week to 4.39%, the lowest level since November, according to home finance giant Freddie Mac, while other popular loans were at all-time lows in Freddie's weekly survey of lenders.

While that's welcome news for anyone willing and able to buy or refinance a home, the cause is the sputtering economy, which had investors bailing out of stocks and seeking protection in U.S. Treasury securities.

That trend drove the yield on the 10-year Treasury note to 2.58% Thursday morning -- it had been above 3.7% in February -- and home lending rates followed suit.

FRE-sign-AP-Pablo Martinez Monsivais "The first half of this year was the worst six-month period since the economic recovery began in June 2009," Freddie Mac economist Frank Nothaft said.

He noted that consumer spending fell 0.2% in June, the first decline since September 2009.

The record lows were for 15-year fixed mortgages, a popular option for people refinancing their homes, and for loans with a fixed rate for five years that then become variable. The previous records for these mortgages also were set in November.

Lenders were offering the 15-year loan at an average of 3.54%, down from last week's 3.66% and eclipsing the previous low of 3.57% in the Freddie Mac survey.

The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.18% this week, down from 3.25% a week earlier, which had tied the previous low.

The average offering rate for 30-year fixed-rate mortgages had briefly dropped below 4.2% in the survey last fall. The 4.39% rate that Freddie reported Thursday was sharply below last week's 4.55%.

Borrowers would have paid less than 1% of the loan amount in upfront lender fees to obtain the rates, Freddie Mac said. Solid borrowers often can find slightly better rates by shopping around, and it's also possible to lower mortgage rates by paying more upfront.

Indeed, experts said this week that it was possible for the lowest-risk borrowers to obtain 30-year home loans with rates fixed at less than 4% -- as long as they were willing to fork over 3% or more of the loan amount in upfront fees and discount points to certain lenders.

The Freddie Mac survey asks lenders what terms they are offering to borrowers with good credit ratings who have 20% down payments or 20% equity in their homes.

The above article is from the LA Times written on August 4, 2011

Since this article was written, Standard & Poors downgraded the U.S. Economy to A++ and now the current administration says that rates will be low for the next 2 years. Nothing makes sense any more!

Real-estate expert sees disconnect in lending

2011-08-03T07:25:00.000-07:00

by J. Craig Anderson - Jul. 31, 2011 12:00 AM
The Arizona Republic

Read more: http://www.azcentral.com/business/articles/2011/07/31/20110731real-estate-disconnect-lending.html#ixzz1TyZd8t4H

Arizona State University professor and real-estate development veteran Mark Stapp sees a troubling disconnect between local efforts to build sustainable communities and the globalized mechanisms through which those efforts are funded.

The Phoenix-area commercial real-estate market's problems, which include but are not limited to $3.5 billion of securitized commercial mortgage loans currently in default, are largely the result of that disconnect, he said.

Stapp, still active as a developer, is executive director of the Master of Real Estate Development program at ASU's W. P. Carey School of Business.

He said communities need to get away from relying on massive, corporate lending institutions to fund the development of local real-estate projects. In other words, go back to the way things used to work: local investors funding local development.

Stapp explained the problem this way:

"Real estate is location-specific, unique and small, which makes it really hard to trade and value on a significant scale. Still, the financial world took properties with fundamental differences and bundled them together, in order to create a larger scale, offset transaction costs and trade a bunch of properties together (as commercial mortgage-backed securities)."

Each pool of disparate real-estate assets then was assigned a single investment rating, Stapp said.

"This overlooked the nuances of the individual properties," he said.

Stapp said it's not too late for areas such as metro Phoenix to turn back the clock by setting up local real-estate funds that would finance local development on a project-by-project basis. Everyone involved would benefit, he said, because investors would have more control over where their money was being spent, and developers would know that a project was being financed on its merits, not some financial algorithm devised hundreds of miles away.

Housing and Economic Forecast Points to Rising Activity

2011-07-19T13:39:00.000-07:00

Walter Molony

WASHINGTON, May 12, 2011

Home sales are expected to stay on an uptrend through 2012, although the performance will be uneven with mortgage constraints weighing on the market, according to experts at a residential real estate forum today at the Realtors® Midyear Legislative Meetings & Trade Expo here.

Lawrence Yun, NAR chief economist, said existing-home sales have been underperforming by historical standards and will rise gradually but unevenly. “If we just hold at the first-quarter sales pace of 5.1 million, sales this year would rise 4 percent, but the remainder of the year looks better,” Yun said. “We expect 5.3 million existing-home sales this year, up from 4.9 million in 2010, with additional gains in 2012 to about 5.6 million – that’s a sustainable level given the size of our population.”

Mortgage interest rates should rise gradually to 5.5 percent by the end of the year and average 6.0 percent in 2012 – still relatively affordable by historic standards.

“A huge volume of cash sales, supported by the recovery in the stock market, show that smart money is chasing real estate. This implies that there could be a sizeable pent-up demand if mortgages become more readily accessible for qualified buyers,” Yun said. “The problem isn’t with interest rates, but with the continuation of unnecessarily tight credit standards that are keeping many creditworthy buyers from getting a loan despite extraordinarily low default rates over the past two years.”

Yun said that if credit requirements returned to normal, safe standards, home sales would be 15 to 20 percent higher. He added that some parents are buying homes with cash for their children, and offering them loans which provide better returns than bank accounts or CDs.

Yun projects the Gross Domestic Product to grow 2.5 percent this year and 2.7 percent in 2012, adding 1.5 million to 2 million jobs yearly over the next two years. The unemployment rate should decline to 8.8 percent by the end of 2011 and average 8.6 percent next year, returning to a normal level of 6 percent around 2015.

Housing starts are forecast to rise but remain below long-term trends, reaching 603,000 in 2011, up from 595,000 last year, and continue growing to 908,000 in 2012. New-home sales are seen at a record low 320,000 this year, rising to 487,000 in 2012. “A recovery in new homes will be slow because of the extra price discount in the existing home market,” Yun noted. In March, the typical new single-family home cost $53,300 more than an existing home.
Inflation appears to be relatively modest for now, with the Consumer Price Index rising 2.9 percent this year. “We’ll be closely watching the impact of fuel costs on consumer spending and inflation – that would slow economic growth, job creation and home sales,” Yun said.

Apartment rents are trending up, and are likely to rise at faster rates as vacancies decline. Following the correction in home prices, it has now become more affordable to buy in most of the country. “Twice as many renters had enough income to buy a home in 2010 in comparison with 2005, so we have a much larger pool of financially qualified renters,” Yun said. “Rising rents and excellent housing affordability conditions will encourage potential buyers who’ve been on the sidelines.”

Yun expects the median existing-home price to remain near $170,000 over the next two years, which would mark four consecutive years of essentially no meaningful price change.

Frank Nothaft, chief economist at Freddie Mac, holds similar views on the outlook. “Economic activity will accelerate this year – there will be no double dip in the economy,” he said. Nothaft is more optimistic on job growth, expecting 2.0 million to 2.5 million jobs created in 2011 with unemployment dropping to 8.4 percent by the end of the year.

Nothaft expects the 30-year fixed-rate mortgage to trend up to 5.25 percent by the end of the year, and for home sales to rise 5 percent. “National home price indices are close to a bottom and prices are likely to bottom sometime this year,” he said.

Refinancing activity in 2011 will be only half of what it was last year. “As a result, banks may become more willing to lend to home buyers,” Nothaft said.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

ARIZONA DEPARTMENT OF REAL ESTATE-INFORMATIONAL ALERT

2011-07-16T05:56:00.000-07:00

July 15, 2011

COMMISSIONER LOWE ANNOUNCES CHANGES TO MARS RULING-

The Department has been monitoring closely the Federal Trade Commission (FTC) Mortgage Assistance Relief Services (MARS) Rule and its affect on the real estate licensees. Today, the FTC issued a press release- FTC WILL NOT ENFORCE MANY OF THE PROVISIONS OF MARS RULE AGAINST REAL ESTATE PROFESSIONALS HELPING CONSUMERS OBTAIN SHORT SALES”.

The direct link to the FTC Press release/enforcement policy: http://www.ftc.gov/opa/2011/07/mars.shtm

Remember- the Arizona “Short Sale Negotiator Regulations” issued by the ADRE on February 15, 2011 remains in effect, as well as the requirements of A.R.S. §32-2155 which states: Restriction on employment or compensation of person as broker or salesperson

C. A real estate broker or real estate salesperson shall not collect compensation for rendering services in negotiating loans secured by real property unless all of the following apply:

1. The broker or salesperson is licensed pursuant to title 6, chapter 9 or is an employee, officer or partner of a corporation or partnership licensed pursuant to title 6, chapter 9.

2. The broker or salesperson has disclosed to the person from whom the compensation is collected that the broker or salesperson is receiving compensation both for real estate brokerage, when applicable, and for mortgage broker services.

3. The compensation does not violate any other state or federal law.

To review these Regulations, the direct link is: http://www.azre.gov/PublicInfo/Documents/Short_Sale_Negotiator_Regulations.pdf

HUD To Give Away $1 Billion To Struggling Homeowners

2011-07-05T12:40:00.000-07:00

From the Washington Post
By Cezary Podkul, Published: July 4

Sandra Allwine has been pleading with her bank for more than two years to modify the mortgage on her Arlington County home. Despite exhausting all her savings and having her daughter move in to help with her $3,000 mortgage payment, Allwine, 65 and unable to find work, is struggling to save her home from foreclosure.

In June, a potential lifeline opened up. The newly launched $1 billion Emergency Homeowners’ Loan Program, or EHLP, is targeting homeowners who are among the most difficult to help: those who fell behind on their payments because of job loss or unexpected medical bills. For many of them, it might be the last chance to save their homes.

During the housing boom, millions of homeowners got easy access to mortgages. Now, some mortgage lenders and government officials have taken action after discovering that many mortgage documents were mishandled.

“We were normal middle-class Americans who had saved and lived very carefully and frugally . . . and still wound up getting kicked in the teeth,” Allwine said. She applied as soon as she heard about the program.

If she is approved, the government will subsidize Allwine’s mortgage payments for a maximum of $50,000 over two years. After that, the interest-free loan will be forgiven over five years if she stays in her home and stays current on her payments.

EHLP is the latest government program targeting the nearly 1.8 million homeowners like Allwine facing foreclosure. It is going to have to move fast: The program was supposed to start last year, but implementation delays mean that the Department of Housing and Urban Development must spend all its $1 billion by the end of the federal government’s fiscal year, Sept. 30.

That gives homeowners in 27 states, including Virginia, until July 22 to complete their applications. If demand outstrips available funds, HUD will run a lottery to pick successful applicants. Five additional states, including Maryland, are subject to slightly different rules, which gave them more time to spend the funds, because they started taking EHLP applications earlier under similar state-run programs.

Terri Ware of Greenbelt applied for the program in May after she was unable to get her bank to modify the $238,000 mortgage on her condominium. Her daughter Micah was born last year with a heart defect that requires around-the-clock care. So Ware, 43 and a single mom, left her job as an emergency room nurse at Prince George’s Hospital Center in Cheverly so she could care for her. But with her income shrinking and medical expenses escalating, she quickly burned through all her savings and her 401(k) and fell five months behind on her mortgage. Foreclosure loomed.

“I said, ‘I can’t be homeless — my baby needs help,’ ” Ware recalled.

Within a month, Ware was approved for $29,608 in aid through EHLP. The interest-free loan will repay $8,636 worth of mortgage payments that she owes in arrears to J.P. Morgan Chase and then pay about half her $1,727 mortgage payment for the next 24 months.

Ware was ecstatic when she found out. “I picked my daughter up and said, ‘We’re going to keep our home,’ ” she said with tears in her eyes. She plans to resume working and making mortgage payments on her own as soon as her daughter’s health improves.

Maryland has committed $4.2 million in EHLP loans to 121 homeowners, Maryland Department of Housing and Community Development Deputy Secretary Clarence Snuggs said, and “we’re going to be working up until the last minute” to spend the $40 million that the state has been allocated under EHLP.

Nationwide, HUD is hoping to help 30,000 homeowners through the program, including 1,120 in Maryland and 1,223 in Virginia, which received $46.6 million in funding. The District is hoping to assist as many as 1,000 homeowners under a separate program for which it has $20 million, said D.C. Housing Finance Agency Executive Director Harry Sewell.

But not everyone sees the merits of programs such as these during lean fiscal times.

“The best foreclosure mitigation program in America is a job. It’s not a government check, it’s a paycheck,” Rep. Jeb Hensarling (R-Tex.) said in a statement. In February, Hensarling sponsored a bill to kill the EHLP, calling the program “an act of fiscal child abuse.” By a vote of 242 to 177, the House agreed. But the Senate didn’t act on it.

Rep. Barney Frank (D-Mass.) fought to include the program in the 2010 financial reform bill. “If you took out a reasonable mortgage in the first place and the only reason you can’t pay it is because you became unemployed, there’s reason to help,” he said in an interview.

Frank proposed taxing large financial firms to fund EHLP, but House Republicans opposed that proposal. Some analysts say that leaves Congress with difficult moral questions.

“What’s the moral superiority of the borrower who did nothing wrong versus the taxpayer who did nothing wrong?” said Mark Calabria, director of financial regulation studies at the Cato Institute, a free-market think tank. In the end, he thinks EHLP will amount to “a drop in the bucket” for America’s foreclosure problem, while future generations will have to pick up its $1 billion tab.

California Investors To Plead Guilty In Bid-Rigging

2011-07-03T09:00:00.000-07:00

June 30, 2011

(06-30) 16:55 PDT Sacramento, Calif. (AP) --

Eight California real estate investors have agreed to plead guilty in a bid-rigging scheme to buy foreclosed real estate at public auctions in two San Francisco Bay area counties, the U.S. Department of Justice said Thursday.

The men were charged with bid-rigging and conspiracy to commit mail fraud as part of a joint investigation by the FBI and the antitrust division of the Justice Department.

Investigators say the men conspired or made payoffs from 2008 through 2011 so they would not bid against each other for properties sold at foreclosure auctions in Alameda and Contra Costa counties. After one bought a property at an artificially low price, they would hold a private auction among themselves to resell it and split the extra money paid by the winning bidder.
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"While the country faces unprecedented home foreclosure rates, the collusion taking place at these auctions is artificially driving down foreclosed home prices and is lining the pockets of the colluding real estate investors," said Christine Varney, assistant attorney general in charge of the antitrust division, in a prepared statement.

The felony charges were filed in U.S. District Court for the Northern District of California, in Oakland. Court records did not list attorneys for the defendants or indicate whether they were in custody; court personnel said the cases were newly filed and they could not provide any information about them.

The men charged were:

_ Thomas Franciose, of San Francisco

_ William Freeborn, of Alamo

_ Robert Kramer, of Oakland

_ Thomas Legault, of Clayton

_ David Margen, of Berkeley

_ Brian McKinzie, of Hayward

_ Jaime Wong, of Dublin

_ Jorge Wong, of San Leandro

No Justice Department spokesperson could be reached to clarify whether the men were in custody, when they might enter a plea, their ages or other details. An FBI spokeswoman referred questions to the Justice Department.

Investigators said in a prepared statement that the charges were part of an ongoing investigation into collusion by real estate investors in foreclosure sales, both in Northern California and elsewhere.

In March, federal prosecutors said Yama Marifat of Pleasanton had pleaded guilty to conspiring to rig bids at foreclosure auctions in San Joaquin County, about 50 miles east of the Bay Area and one of the areas hardest hit by the housing bust. The scheme described was similar to that cited in the charges filed Thursday.

At the time, investigators said Marifat was the fifth person to plead guilty in connection with the probe, and he faced up to 10 years in prison for bid rigging and 30 years for conspiracy to commit mail fraud, plus fines of as much as $2 million.

It was unclear whether the new case was related to the earlier investigation.

Freddie Mac: Better Days Ahead in Housing

2011-06-28T12:40:00.000-07:00

Freddie Mac’s chief economist is optimistic that the housing market and economy will improve in the second half of 2011.

Freddie Mac Chief Economist Frank Nothaft said mortgage rates will likely remain historical lows of between 4.5 percent and 5 percent for the remainder of the year. Also, he expects more buyers to stop waiting on the sidelines as recent price drops in home prices have improved affordability.

Nothaft said consumers’ uncertainty about the economy has caused them to delay home purchases and other “big-ticket items.”

"Some potential buyers who have the means to buy are awaiting clearer signs that home values have firmed," Nothaft says.

But Nothaft says they should be getting their signs in the second half of the year, with projected job gains, and a growing, improved economy.

"Even though near-term concerns over income and sales growth are restraining consumer spending, business hiring, and new building, a number of positive signs in the economy indicate that growth will continue and is likely to accelerate in the second half of this year," Nothaft said. "Look for a gradual improvement in housing activity in the coming year.”

Source: “Freddie Mac Economist Sees Sunny Economy in Second Half,” HousingWire (June 27, 2011)

Existing-Home Sales Decline in May with Market Constraints, Temporary Conditions

2011-06-21T14:15:00.001-07:00

Article from NAR (National Association of Realtors)

Washington, DC, June 21, 2011

Existing-home sales were down in May as temporary factors and financing problems weighed on the market, according to the National Association of Realtors®.

Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, fell 3.8 percent to a seasonally adjusted annual rate of 4.81 million in May from a downwardly revised 5.00 million in April, and are 15.3 percent below a 5.68 million pace in May 2010 when sales were surging to beat the deadline for the home buyer tax credit.

Lawrence Yun, NAR chief economist, said temporary factors held back the market in May, as implied from prior data on contract signings. “Spiking gasoline prices along with widespread severe weather hurt house shopping in April, leading to soft figures for actual closings in May,” he said. “Current housing market activity indicates a very slow pace of broader economic activity, but recent reversals in oil prices are likely to mitigate the impact going forward. The pace of sales activity in the second half of the year is expected to be stronger than the first half, and will be much stronger than the second half of last year.”

Yun said the market also is being constrained by the lending community. “Even with recent economic softness, this is a disappointing performance with home sales being held back by overly restrictive loan underwriting standards,” he said. “There’s been a pendulum swing from very loose standards which led to the housing boom to unnecessarily restrictive practices as an overreaction to the housing correction – this overreaction is clearly holding back the recovery.”

There were notable regional differences in home sales. “A large decline in Midwestern existing-home sales can be attributed partly to the flooding and other severe weather patterns that occurred, but this also implies a temporary nature of soft market activity,” Yun explained.

The national median existing-home price2 for all housing types was $166,500 in May, down 4.6 percent from May 2010. Distressed homes3 – typically sold at a discount of about 20 percent – accounted for 31 percent of sales in May, down from 37 percent in April; they were 31 percent in May 2010.

“The price decline could be diminishing, as buyers recognize great bargain prices and the highest affordability conditions in 40 years; this will help mitigate further price drops,” Yun said.

“Home prices are rising or very stable in local markets with improved employment conditions, such as in North Dakota, Alaska, Washington, D.C., and many parts of Texas,” Yun noted.

NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said a number of proposals being considered in Washington could further jeopardize the housing recovery. “We’re concerned about the flow of available capital, including a possible rule that would effectively raise minimum downpayment requirements to 20 percent,” he said. “We don’t need to throw the baby out with the bath water – increasing downpayment requirements would effectively shut many qualified families out of the market. What we critically need is a return to the basics of providing safe mortgages to creditworthy buyers willing to stay well within their budget.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 4.64 percent in May, down from 4.84 percent in April; the rate was 4.89 percent in May 2010. “Although low mortgage interest rates are welcome, they are less meaningful compared to the tightness of loan underwriting standards,” Yun noted.

Total housing inventory at the end of May fell 1.0 percent to 3.72 million existing homes available for sale, which represents a 9.3-month supply4 at the current sales pace, up from a 9.0-month supply in April.

All-cash transactions stood at 30 percent in May, down from 31 percent in April; they were 25 percent in May 2010; investors account for the bulk of cash purchases.

First-time buyers purchased 35 percent of homes in May, down from 36 percent in April; they were 46 percent in May 2010 when the tax credit was in place. Investors accounted for 19 percent of purchase activity in May compared with 20 percent in April; they were 14 percent in May 2010.

Single-family home sales declined 3.2 percent to a seasonally adjusted annual rate of 4.24 million in May from 4.38 million in April, and are 15.4 percent below a surge to 5.01 million one year ago. The median existing single-family home price was $166,700 in May, down 4.5 percent from May 2010.

Existing condominium and co-op sales fell 8.1 percent to a seasonally adjusted annual rate of 570,000 in May from 620,000 in April, and are 14.7 percent below the 668,000-unit pace in May 2010. The median existing condo price5 was $165,400 in May, which is 5.8 percent below a year ago.

Regionally, existing-home sales in the Northeast declined 2.5 percent to an annual level of 770,000 in May and are 13.5 percent below May 2010. The median price in the Northeast was $241,500, up 6.1 percent from a year ago.

Existing-home sales in the Midwest dropped 6.4 percent in May to a pace of 1.02 million and are 22.7 percent below a year ago. The median price in the Midwest was $136,400, which is 8.5 percent below May 2010.

In the South, existing-home sales fell 5.1 percent to an annual level of 1.85 million in May and are 14.4 percent below May 2010. The median price in the South was $149,200, down 3.1 percent from a year ago.

Existing-home sales in the West were unchanged at an annual pace of 1.17 million in May but are 10.0 percent lower than a year ago. The median price in the West was $192,300, which is 12.6 percent below May 2010.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

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NOTE: NAR also tracks monthly comparisons of existing single-family home sales and median prices for select metropolitan statistical areas, which is posted with other tables at: www.realtor.org/research/research/ehsdata. For information on areas not included in the report, please contact the local association of Realtors®.

1Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 to 90 percent of total home sales, are based on a much larger sample – more than 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

Benchmark Revisions: All major statistical data series go through periodic reviews and revisions to ensure that sampling and methodology keep up with changes in the market, such as population changes in sampled areas, to ensure accuracy. NAR began its normal process for benchmarking sales earlier this year; there will be no change to median prices. In the past we’ve benchmarked to the decennial Census, most recently to the 2000 Census, because it included home sales data. However, the data are no longer included in the Census, so we’re looking at more frequent benchmarking using a new approach with independent sources to improve our process and modeling. As always, we are consulting with various outside housing economists, government agencies and academic experts for a consensus on the methodology; NAR is committed to providing accurate, reliable data. Publication of the revisions is expected this summer; we will notify a month in advance of the publication date.

2The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.

3Distressed sales, first-time buyers, investors, contract cancellations and all-cash transactions are from a survey for the Realtors® Confidence Index, posted at Realtor.org.

4Total inventory and month’s supply data are available back through 1999, while single-family inventory and month's supply are available back to 1982 (prior to 1999, condos were measured quarterly while single-family sales accounted for more than 90 percent of transactions).

5Because there is a concentration of condos in high-cost metro areas, the national median condo price often is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.

The Pending Home Sales Index for May will be released June 29, and existing-home sales for June is scheduled for July 20; release times are 10:00 a.m. EDT.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data in this release, other tables and surveys also may be found by clicking on Research.

REALTOR® is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS® and subscribe to its strict Code of Ethics. Not all real estate agents are REALTORS®. All REALTORS® are members of NAR.

Investors Moving Foreclosures Faster Than Banks Along West Coast

2011-06-16T08:04:00.000-07:00

From: DSNews.com
Written by: Carrie Bay

Third-party investors are reselling foreclosure properties they’ve scooped up at auction at a rapid pace in states along the country’s Western seaboard. In fact, they’re moving distressed homes faster than lenders, according to a local tracking firm.

ForeclosureRadar, based out of Discovery Bay, California, keeps tabs on every foreclosure and provides daily auction updates for its coverage area, which encompasses Arizona, California, Nevada, Oregon, and Washington.

The company says the one consistent market statistic in all five states during the month of May was a drop in how long it’s taking foreclosure auction investors to offload properties.

“While we believe this is partially due to finally seeing some spring selling activity, we think it has more to do with an overall lack of quality, affordable homes for sale,” said Sean O’Toole, CEO of ForeclosureRadar.

Based on the firm’s market data, the average number of days between an investor’s purchase of the property at foreclosure auction in Arizona, and when the property was resold, was 95 days in May. That’s a drop of more than 10 percent from the month before, and contrasts with the average resell timeline of 150 days for banks.

In California, investors are offloading foreclosed homes in 134 days on average, versus 227 for banks.

In the foreclosure hotbed of Nevada, it’s taking investors an average of 102 days to resell homes, while banks are holding onto a property for 177 days before it sells.

In Oregon, time-to-resell is 122 days for foreclosure investors, compared to 208 days for banks.

Washington saw a similar divergence, though its investor timeline was the longest of all five states. There, investors are able to turn around and sell foreclosure properties in 164 days on average, versus 212 days for banks.

Looking at ForeclosureRadar’s historical data, the resell timelines for investors and banks were separated by fewer than 8 days as recently as February in Washington and Oregon, and fewer than 20 days in Nevada as recently as January.

According to O’Toole, investors have become better at turning a foreclosure into a marketable property that attracts buyer interest. He also points to the fact that delays in the foreclosure process from recent robo-signing reviews and moratoriums have left fewer affordable homes available for sale.

“Foreclosure investors may be the only winner so far,” O’Toole said, “benefitting by being able to resell homes purchased at foreclosure auction a little more quickly.”

Overall foreclosure filing activity along the West Coast was down in May, according to ForeclosureRadar.

The company tracked fewer filings in all states except California, where there was an increase in notices of trustee sale and likely signals more foreclosure sales in the state in the months ahead.

Activity on the courthouse steps was mixed, with California the only state to have increases in foreclosure sales both back to the bank and sold to third-party investors.

After recording a jump in foreclosure cancellations across the board in April, ForeclosureRadar says there was a reversal of this trend in May. Cancellations dropped significantly last month in California, Nevada, and Washington. They declined moderately declined in Arizona, and increased in Oregon.

Time-to-foreclose set a record in California last month, taking an average of 344 days. However the length of the foreclosure process declined in Nevada, Oregon, and Washington, and was up just two days in Arizona.

Short Sales and TALL Lies!

2011-06-13T08:29:00.000-07:00

One of the biggest problems we run into, as Realtors, is other Realtors listing homes at ridiculously low prices with the appearance that someone can actually purchase the home at an extremely LOW price. This creates many problems that hurt the market:

1. Price expectations in neighborhoods are lowered causing lower offers and drives the market down even further.

2. Buyers are afraid to buy homes listed at value because of 1 short sale home in the area that is advertising an unrealistic low price.

3. Buyers have the impression that they can buy a home for a price advertised on the MLS. Many buyers don't realize that the price listed on a short sale is a "pie in the sky" hope that maybe the bank will accept the offer. In reality, when an offer is placed on a short sale, the bank may take several months to respond to the offer. Once the bank responds, many times the banks demand a higher price. For example, an agent lists a home in a neighborhood for $200,000 (even though similar homes are selling for $300,000). A buyer makes an offer of $200,000 and waits 6 months for the bank to respond to the offer. The bank comes back with a counter offer of $300,000. The buyer has wasted 6 months waiting for a response and then the bank responds with a price more in line with the market. The disappointed buyer can start the process all over on another short sale home or chose to buy a home that is not a short sale with a "real" price.

3. Listing Agents are so tired of spending months trying to sell a short sale home and then the deal falls through because the buyer is tired of waiting for a response from the bank. Many listing agents are now requiring a non-refundable earnest money to be deposited for 90 days in case the buyer chooses to buy a different home than the home they put an offer on. This ties up the buyer so if a really good deal (not a short sale) comes on the market, they cannot put an offer on it without losing their earnest money.

To be honest, I think the best way to make an offer on a home is by putting an offer on a home with a real price! Buy a new home or a resale home or a foreclosed home that you know the price is realistic. Don't waste your time playing games with the banks that they might actually be reasonable (well... what you think is reasonable). Banks are in business to make money- not help you get a screaming deal on a home. Go with something real and enjoy the home buying process!

Matt Carter did a great job explaining in his article below about some of the false appearances some real estate agents give in selling real estate.

Washington short-sale brokers could lose licenses

Real estate team accused of false advertising, underpricing listings

Matt Carter
Inman News™

A prominent short-sale broker and his wife could be barred from practicing real estate for 10 years, after an administrative law judge affirmed six of 10 alleged license violations filed against them by the state of Washington's Department of Licensing.

Washington regulators suspended the licenses of designated broker Michael Hellickson, his wife Tara Hellickson, also a broker, and their Pierce County-based brokerage, Hellickson.com Inc., without a hearing in September after receiving more than two dozen complaints about their practices.

A superior court judge reinstated all three licenses in October, pending the outcome of a hearing by an administrative law judge.

After a 10-day hearing in February and March in which the Department of Licensing called more than two dozen witnesses, Administrative Law Judge Terry A. Schuh affirmed six of the 10 alleged violations filed against the Hellicksons, and half of the 10 alleged violations lodged against their firm.

An attorney for the Hellicksons has filed a petition for review of Schuh's May 11 initial order. The Hellicksons' licenses remain in force while Schuh considers the issues raised in the petition and the Department of Licensing's response.

If the Hellicksons' petition is unsuccessful, the Department of Licensing will have 90 days from the May 11 initial order to revoke their licenses.

Michael and Tara Hellickson would then have the option of going back to Superior Court to challenge their license suspensions.

Schuh found that the Hellicksons and their firm engaged in a "pattern and practice" of listing homes at artificially reduced prices that didn't accurately reflect what the owner was willing to accept, in the hopes of generating multiple offers.

The Hellicksons misrepresented that they would buy homes listed with them that did not sell within 30 days, and that Michael Hellickson engaged in false advertising when he claimed to be the No. 1 agent in Washington, Oregon and Hawaii, Schuh ruled.

The Hellickson Team also "engaged in a pattern and practice of negligent and dilatory communications with homeowners, potential buyers, and lenders" by not responding to phone calls and e-mails in a timely fashion, resulting in unreasonable risk of harm to their clients, according to the ruling.

The administrative law judge also affirmed findings that Michael and Tara Hellickson drafted addendums to purchase and sale agreements requiring that buyers prequalify with one of two or three specific lenders, even though their clients had not requested or authorized such a requirement. Although the agreements were signed or initialed by sellers, Schuh found that such authorization was "uninformed," because the addendums were not requested by homeowners or discussed with them.

On the other hand, Schuh found that the Department of Licensing had not proved allegations that the Hellicksons encouraged homeowners to stop making their mortgage payments, or told them they were required to vacate their homes before they were legally required to do so.

The Department of Licensing also failed to prove allegations that the Hellicksons instituted automatic price reductions without authorization by the sellers, Schuh said in a May 11 initial order, setting those findings aside.

Although Schuh ruled that the Hellicksons had, in fact, failed to provide copies of executed listing agreements to homeowners as alleged, he set aside charges that the couple engaged in a "pattern and practice" of misrepresenting the contents of listing agreements, such as their term.

Hellickson, who's also known for the short-sale and REO (bank-owned property) coaching seminars he offers nationwide through another company, Club Wealth Inc., said he expects to prevail in his two-year battle with the Department of Licensing.

His refusal to turn over records sought by the Department of Licensing, he said, "stirred up the hornet's nest," and department staff seemed determined "to dig up anything I'd done wrong."

Clients, agents testify at hearings

To make its case against the Hellicksons, the Department of Licensing filed 296 exhibits and called 27 witnesses to testify, including former Hellickson Team employees and nearly a dozen past clients. Also testifying were several real estate agents who represented prospective buyers, and a Wells Fargo liquidation manager.

When the department brought charges against the Hellicksons and suspended their licenses in September, they had 400-500 listings, more than 200 of which were pending, Michael Hellickson testified.

In 2009 and 2010, about half the listings represented by the Hellicksons -- who conducted their business as "The Hellickson Team" -- were short sales, and the other half REOs.

The department received 37 complaints about the Hellicksons -- about 10 of which were filed after the department filed charges. The complaints referenced either Michael Hellickson or his team, but the Department of Licensing said it also sought to revoke Tara Hellickson's license because she was the co-listing agent on all of the listing agreements.

The department stopped communicating with the Hellicksons after receiving a Dec. 2, 2009, letter from their attorney, Douglas Tingvall, informing the department that the couple would no longer provide information or documents to the department because such requests allegedly violated their Fourth Amendment protections against unlawful search and seizure.

In his petition for review of Schuh's initial order, Tingvall said Michael Hellickson is "an innovator and a leader" in the short-sale business, and that innovators "become targets for competitors and regulators, who often do not understand or lag behind a rapidly changing environment." In the past, license revocations of five years or more have been the result of "criminal acts, serious moral turpitude, fraud, theft or other intentional mishandling of client funds," he said. The Hellicksons "were not found to have done any of these things."

A "disinterested observer" could conclude that regulators went on a "witch hunt" only to retaliate for the Hellicksons' refusal to provide records without a warrant or determination of probable cause, Tingvall argued.

The Department of Licensing, meanwhile, maintained that a 10-year license suspension, although "severe" and "rare," was justified because the Hellicksons allegedly committed a large number of violations, many violations were repeated, and they did not cooperate with the investigation or acknowledge or attempt to correct their conduct. Listing homes at artificially low prices was a serious enough violation that it, alone, might have resulted in a 10-year revocation, the administrator of the department's real estate unit, Jerry McDonald, testified.

30-day sale program

The Hellicksons' radio advertisements, for-sale signs, and website promised that they would purchase their clients' homes or sell them at no commission if they did not sell within 30 days. Although the ads noted that some restrictions applied, no ad said the 30-day program did not apply to short sales, Schuh found.

Schuh found that the purpose of the ads was to generate leads and listing agreements. The Hellickson Team, he determined, "had no intention of buying homes at anything close to market price."

Two agents employed by the Hellickson Team, Joe Toner and Jon Ryan Geersten, testified that they used a script when scheduling listing appointments that mentioned the 30-day offer. Geersten testified that when he expressed reservations about the offer, Michael Hellickson told him that the offer was contingent on the seller accepting a sale price that was 50 percent of market value.

Hellickson testified that the 30-day offer could not apply to short sales, because lenders would not accept such a low offer. He also testified that he had not purchased any homes under the 30-day sale program since 2008.

In his petition for review, Tingvall argued that there was "nothing false, deceptive or misleading" about the Hellicksons' 30-day sale program. The Department of Licensing offered no evidence that any consumers relied on it, Tingvall said, or that the Hellicksons refused to purchase any eligible homes.

The Hellicksons were under no legal obligation to post the restrictions that applied to the program on their website or in their newsletter, their lawyer maintained. "Obviously, (the Hellicksons) hoped that prospective clients would call them to ask about their services," the Hellicksons' lawyer argued in the petition for review. "The purpose of any advertising by a real estate broker is to generate calls and personal appointments."

False advertising

Tingvall noted that the Department of Licensing offered no evidence to refute Michael Hellickson's claim that no other agent did more business in Washington, Oregon or Hawaii in 2009 or 2010, or that he was not the leading expert on short sales in those states.

But Schuh found that the Hellickson was never licensed in Oregon or Hawaii, and would simply refer business in those states to someone who was. The Hellickson Team also advertised a loan company that "was not functional," and Michael Hellickson's license to originate loans and the license of the mortgage firm it was associated with had both expired.

Listing prices

Schuh said it was undisputed that the Hellicksons obtained authorization from their clients to make "substantial, arbitrary price reductions, usually every two weeks, simply because the home had not generated offers." The price reductions were "aggressive and frequent," and "apparently the prices were below what the lender would accept," Schuh wrote. "The implication is that (the defendants) were more interested in generating offers than they were in realistic pricing."

In November 2008, for example, The Hellickson Team listed the home of Dan and Kathleen Streight for $275,000. The asking price was then reduced at two-week intervals in increments of $25,000, to $175,000 by the week before Christmas.

"When Dan Streight learned from a real estate agent that the price on his home had dropped to $175,000, he and his wife were shocked because the lien holder had told Mr. Streight that (the lender) would not accept less than $240,000," Schuh wrote, citing Streight's testimony at the hearing.

Schuh found that the Hellicksons "engaged in a pattern and practice of listing homes at artificially reduced prices" in order to generate "multiple lowball offers." But he also determined that the preponderance of the evidence showed that the Hellicksons were authorized to do so by sellers through signed, preauthorized, price-reduction forms.

The Streights testified that they had verbally agreed to a series of $20,000 price reductions every two weeks. Although they did not discuss a bottom price, the Streights said they understood they would be notified in advance of any price reduction. They also claimed a price-reduction authorization form they signed was blank. The form, introduced as evidence at the hearing, called for price reductions of $25,000 every two weeks.

Michael Hellickson testified that the price-reduction authorizations he provided to short-sale clients were always completed at listing appointments. The Streights did not ask him to provide advance notice of price reductions, he testified, and he had not offered to do so. Schuh said he found Hellickson's testimony credible.

In another instance, the asking price on a condo the Hellicksons listed at $175,000 in September 2008 was reduced several times in two months, to $75,000, before bouncing back to $117,000 by the following February. The owner, Richard Smith, testified that he had agreed to lesser price reductions, that the form he signed authorizing price reductions was blank, and that his calls to the Hellickson Team office about price reductions were not returned.

Toner, the former Hellickson Team agent, testified that he was instructed to convince sellers to sign price-reduction forms with reductions of at least $25,000 every two weeks, but said he was never told to have clients sign blank price-reduction forms. Toner testified that when he started working with the Hellicksons in August 2009, listing prices were determined using comparative market analyses (CMAs) produced by Tara Hellickson.

But after a few months, Toner testified at the hearing, he was told to list homes for the amount owed to the lender. He said he continued to prepare his own CMAs to fulfill his responsibilities to the seller. Toner said no additional market research was done before preapproved price reductions were applied.

Michael Hellickson testified that he took a comparative market analysis (CMA) with him to each listing appointment, but that it was not his practice to perform a CMA before every price reduction.

An expert witness for the Department of Licensing, real estate agent Allison Ybarra, said preapproved price-reduction agreements are not, in themselves, violations of state licensing law.

The Hellicksons' pricing practices generated a number of complaints to their multiple listing service, Northwest Multiple Listing Service (NWMLS), most alleging that the asking price of a listing was not a good faith reflection of what the seller would accept, or that the lender would approve.

Justin Haag, NWMLS' director of policy and forms, testified that the MLS did not add the term "good faith" to rules governing the pricing of listings until the summer of 2009.

Haag testified that NWMLS had received 40 complaints about the Hellickson Team since 2004, most of them regarding pricing. A total of 18 complaints resulted in disciplinary action by the MLS against the Hellickson Team in 2009 and 2010 -- or about 3 percent of the Hellickson Team's sales in those years.

In his petition for review of Schuh's initial order, Tingvall said nothing in real estate licensing law prohibits preapproval for price reductions, and the department "has no business interfering with private contracts between brokers and competent adults." He also argued, "Short sales are different than typical retail sales … The department is out of touch with current trends and practices. Doing things differently is not the same as doing things negligently," he argued.

Listing agreements

The Hellickson Team office "was disorganized and inefficient," Schuh said in explaining how he was "persuaded that it repeatedly failed to provide clients with copies of the executed listing agreement" -- a breach of reasonable skill and care.

In his petition for review, Tingvall said evidence presented by the Department of Licensing on whether the Hellicksons failed to provide copies of listing agreements to sellers was "equivocal and unpersuasive."

And Schuh was not convinced that the Hellickson Team engaged in a pattern and practice of misrepresenting the terms of the listing agreement to clients, as alleged by the Department of Licensing.

One couple who had originally wanted a three- to six-month listing agreement, William and Kathleen Cody, said they were later surprised when a buyer's agent informed them that the listing agreement they signed in March 2009 would not expire until Dec. 31, 2013. William Cody said he did not read the listing agreement before signing it, but that parts were left blank -- a claim also made by other clients.

Michael Hellickson testified that any handwritten additions to listing agreements were added at the time of the listing appointment, and that nothing was added later. Hellickson said his listing agreements were typically for three to four years, to give him enough time to complete a short sale. Hellickson testified that he didn't want to make an investment in marketing a house only to have the seller relist with another agent.

In an audio recording advertising Hellickson's coaching seminars, which was introduced as evidence at the hearing, Hellickson said his listing appointments typically lasted 32 to 37 minutes, and that by the end of each appointment he had obtained a signed listing agreement, preapproved price-reduction form, and disclosure and other documents.

In the recording, Hellickson said he was able to obtain 50 to 75 listings a month, exercising "dominance" over clients using an approach he compared to "a trainer whacking a dog as hard as possible." Hellickson said he would bring four pens to listing appointments, because that would save eight minutes.

Michael Hellickson's former personal assistant, Theresa Jenkins, testified at the hearing that listing agreements and price-reduction authorizations were not always completed at appointments. Jenkins said she regularly saw signed listing agreements with blanks that had not been filled in.

There were several agents working for the Hellickson Team, she said, and she did not know which agents were not having clients complete documents at listing appointments.

Schuh found that while it was the Hellickson Team's "best practice" to complete listing agreements before obtaining clients' signatures, "compliance with this practice was not 100 percent."

Explanations of what was in the listing agreements was "likely sparse because Michael Hellickson had neither the time nor the inclination to volunteer to do so," Schuh wrote. "However, the sellers must take some responsibility to review a document for blanks before signing and to ask to be shown where provisions of particular concern to them were addressed."

Communication with clients

Schuh also found that the Hellickson Team's poor communications with clients, potential buyers, and lenders placed their clients "at unreasonable risk of harm or prejudice."

Toner testified that the Hellickson Team office was disorganized and hectic, causing delays in response to purchase offers and complaints from clients that office staff members were rude and nonresponsive.

Jenkins testified that files would go missing and that documents were not properly maintained, labeled and stored.

Joyce Watts, a real estate agent formerly employed by the Hellicksons, testified that she was under the impression that the Hellickson Team's office was understaffed and overwhelmed by the volume of business it did.

Monika Peltz, a Wells Fargo liquidations manager who was involved in the attempted short sale of the Streight's home, testified that the lender did not get offers on the home until they were nearly two months old, and never received all of the documents it needed.

Kathleen Streight testified that she was told by other Realtors that there were five or six offers on her home, but that buyer's agents could not get any information from the Hellickson Team on the status of their offers. Streight said that at one point, she left 10 voice mail messages with the Hellickson Team but did not receive a callback. Condo owner Richard Smith, too, testified that communication was spotty and his frequent calls were not returned.

Washington's real estate licensing law requires that real estate brokers "present all written offers, written notices and other written communications" between parties "in a timely manner."

But Tingvall noted that the Hellicksons were not accused of violating that provision of the licensing law. Instead, the Hellicksons were accused of violating more general statutes that address incompetence and negligence over their alleged failure to return phone calls in a timely fashion.

Returning phone calls might be a courtesy to the client, as Ybarra testified, "but it is not a legal requirement of real estate licensing law," Tingvall argued.

Wells Fargo could have lost or misplaced the short-sale packet they were originally sent, Tingvall said in his petition for review. The Streights, he said, ultimately elected to pursue a loan modification and "were not harmed by any alleged delay in presenting offers" to the bank, he said.

For short-sale specialists, communications with sellers and banks are among the biggest challenges, Tingvall said, as banks are backlogged with files and may take months to respond to an offer, and homeowners may themselves be unresponsive.

Preferred lenders

Schuh also affirmed the Department of Licensing's findings that without being asked to do so or authorized by their clients, the Hellicksons, through addendums to purchase and sale agreements, required that buyers prequalify with one of two or three specific lenders.

Michael Hellickson testified that the purpose of the requirement was to get a quick determination from a reliable lender that the buyer would qualify for a loan, before investing resources in a transaction that would only fall through. Hellickson said his brokerage did not receive any compensation for referring buyers to certain lenders for prequalification. Hellickson said the prequalification of buyers by preferred lenders was explained at listing appointments. But several clients said they had not discussed the requirement with Hellickson and did not read prequalification addendums they signed or initialed.

Failing to discuss any addendum with the client -- or representing that a requirement has been requested by the seller, when it has not -- is a violation of "reasonable skill and care" provisions of state licensing law, Ybarra and another real estate agent, Rebecca Beaty, testified.

But the federal Real Estate Settlement Procedures Act (RESPA) doesn't bar sellers or brokers from asking borrowers to prequalify with a preferred lender, Tingvall noted, as long as buyers aren't required to obtain loans from those lenders, and pay no fee for prequalification. Sellers or brokers can even require such prequalification by lenders that they have an affiliated business arrangement with, Tingvall said.

The Hellicksons would simply recommend that sellers request buyers to prequalify with one of the Hellicksons' preferred lenders, "a perfectly lawful and prudent request," Tingvall said.

In the Hellicksons' view, Tingvall said, prequalification by a known lender was "was more reliable and provided better security for their sellers."

40% of Underwater Borrowers Took Cash Out of Homes

2011-06-09T10:10:00.000-07:00

DAILY REAL ESTATE NEWS
Produced by Inman News
June 9, 2011
Sponsored by Lowe's
40% of underwater borrowers took cash out of homes
CoreLogic: Owners with home equity loans more than twice as likely to be upside down

By Inman News
Inman News™
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Homeowners with home equity loans are more than twice as likely to be "underwater" as those who didn't take cash out of their homes, according to statistics compiled by real estate and loan data aggregator CoreLogic.

CoreLogic estimates that at the end of March, 22.7 percent of homeowners with mortgages -- about 10.9 million borrowers -- owed more on their mortgage than their home was worth. That's down slightly from an estimated 11.1 million underwater borrowers at the end of December.

Falling home prices can put borrowers who have little equity in their homes underwater. By allowing homeowners to convert equity they have in their homes into cash, home equity loans reduce the cushion borrowers have against price declines.

CoreLogic said that 38 percent of borrowers with home equity loans were underwater at the end of March, compared with 18 percent of homeowners who had no home equity loan. More than 40 percent of all underwater homeowners (4.5 million) have home equity loans, CoreLogic said.

As might be expected, CoreLogic found that the presence of a home equity loan also increased the amount of negative equity. Underwater homeowners who had taken out home equity loans owed $83,000 more than their home was worth, on average, compared with $52,000 for those who hadn't taken cash out of their home.

Past studies have shown that the higher a borrower's combined loan-to-value ratio (CLTV), the more likely they are to stop making payments on their loan. In many cases, borrowers will opt for a "strategic default" -- not because they can't afford the monthly payments, but because they don't believe their home will regain its value anytime soon.

CoreLogic found that borrowers with home equity loans were slightly more likely to default at "moderate" levels of negative equity, up to 115 percent CLTV. Beyond that point, the relationship reverses, and default rates were slightly higher among homeowners without home equity loans.

Among all underwater borrowers nationwide, the average amount of negative equity was $65,000. In states with higher-cost housing, the average was considerably higher. In New York, underwater borrowers had an average of $129,000 in negative equity, followed by Massachusetts ($120,000), Connecticut ($111,000), Hawaii ($98,000), and California ($93,000).

At the other end of the scale, underwater borrowers in Ohio had the lowest negative equity -- $31,000, on average -- followed by Indiana ($34,000), and Minnesota ($38,000).

Nevada led all states in the proportion of underwater borrowers -- 63 percent of Silver State homeowners with mortgages owed more than their home was worth -- followed by Arizona (50 percent), Florida (46 percent), Michigan (36 percent), and California (31 percent).

At the metro level, Las Vegas led the nation, with 66 percent of mortgaged properties underwater, followed by Stockton (56 percent), Phoenix and Modesto (55 percent), and Reno (54 percent).

Metropolitan markets located outside of the five states with the highest negative equity shares include Greeley, Colo. (38 percent); Boise (36 percent); and Atlanta (35 percent).

Mortgage Rates Down Again

2011-06-06T09:41:00.000-07:00

Typically this time of year, we see mortgage rates climb higher during the peak time of the season to buy (April through August). With the crisis in Japan and our economy in the U.S. growing at a snails pace, mortgage rates which spiked in early Spring are falling again.

The massive earthquake and subsequent tsunami in Japan and violent uprising in Libya might seem a world away from U.S. home loans, but in fact, these international events have a significant though circuitous and indirect effect on mortgage interest rates, says Jim Pomposelli, a mortgage banker at Mortgage Direct in Chicago.

Here's how it works: Negative events trigger fears about adverse impacts on the global and U.S. economies. Those fears prompt investors to leave the stock market and move their money into U.S. Treasuries and mortgage-backed securities. This behavior, called a "flight to quality," increases the demand for Treasuries, which results in higher prices and lower yields, or rates.

This week, investors behaved exactly that way. Then seemingly realizing their fears might have been overblown, they ditched the safer investments and returned to equities, only to regroup again and start the cycle over.

Meanwhile, lenders lowered and raised rates, sometimes within the course of a single day.

"It's all event-driven," Pomposelli says. "It's all a flight to quality and then it's unwinding that flight to quality as investors start to realize that the long-term economic impact, when they really look at it all, is not as bad."
Fed wants more jobs

In related news, the Federal Reserve this week announced that it will keep its target range for the federal funds rate between zero percent to 0.25 percent and stick with its plan, known as quantitative easing, or "QE2," to purchase $600 billion of longer-term Treasury securities by the end of June.

This stay-the-course mentality might have more to do with job creation than inflation, Pomposelli says. That has given investors, rather than the Fed, a greater influence over longer-term interest rates such as those on mortgage loans.

"I would argue that it's investors who are driving the 10-year Treasury, and subsequently, mortgage-backed securities because they are more concerned about inflation than the Fed is," he says. "But all this goes out the window when -- just think of the events that we've had -- (you have) something in Saudi Arabia, something in Bahrain, and then, you have Tokyo now. There's a lot of knee-jerk reaction and tremendous volatility."

Low rates help housing

Housing, which depends largely on employment, also may be on the Fed's mind, says Don Frommeyer, senior vice president of Amtrust Mortgage Funding in Indianapolis.

"The federal government understands that part of the (economic) recovery is housing and to keep things rolling, they have to keep housing affordable," he says. "Remember, every time that rates go up half a point, you just lost a huge percentage of the people who can buy a house."

Indeed, the Fed's statement noted that "the housing sector continues to be depressed."

Taken together, the global crises, jobless recovery and weak home sales hint that lower mortgage interest rates may stick around for a while, though the strengthening U.S. economy augers exactly the opposite.

Marcie Geffner supplied most of the information for this article.

Track Crime Through Trulia!

2011-06-04T08:02:00.000-07:00

This is great news from Trulia on Crime Maps...

TRULIA LAUNCHES CRIME MAPS TO ADD INSIGHTS AND MORE COMPLETE DATA TO AMERICAN NEIGHBORHOODS
Crime Maps Launch Provides Data on Neighborhoods Block-by-Block and adds Social Commenting to Aid Buying and Renting Decisions

SAN FRANCISCO, June 2, 2011 – Trulia, a top resource for homebuyers, sellers and renters, today expanded its product suite with the launch of Crime Maps, a innovative and proprietary social crime mapping technology that allows consumers to view, explore, compare, interact and comment on crime data across the US. With Crime Maps, Trulia gives consumers hyper-local visibility into the good, bad and ugly dynamics of neighborhoods, enabling them to make better decisions about where to buy or rent a home.

Crime Maps leverages geodata from multiple partners, including CrimeReports.com, EveryBlock.com and SpotCrime.com, who work with hundreds of police agencies, crime feeds and news outlets to create a curated map of criminal activity in many metropolitan areas. Users can view crimes in a specific area, toggle between multiple neighborhoods, and directly compare the crime statistics of two different regions. Trulia also enables users to add insights, comments, and advice via Facebook’s Social Comments for additional context and information on top of the geodata.

“Historically, detailed and easy-to-decipher crime reports haven’t been easily accessible to the average citizen, and Trulia aims to bring that data to light at the most important moment – when people are deciding where they should live,” said Pete Flint, co-founder and CEO, Trulia. “As a business, Trulia continues to move beyond public record data to in order to add more depth and details about what it’s like to live in a neighborhood. We’re leveraging the acquisition of the Movity team to build visual and innovative mapping platforms and integrate social features into the core of our user experience.”

Upon launch, Trulia’s Crime Maps will be available in 50 counties, with plans to quickly expand nationwide. Trulia provides a visual heat map analysis of historical data. To ensure that the crime-related information on each map is as accurate as possible, Crime Maps automatically displays the last 2,500 crimes committed in a given area.

“With the democratization of data, now we are capable of building a product like Crime Maps,” said Eric Wu, Head of Geo/Social Products at Trulia. “We’ll continue to not only aggregate this valuable geodata, but help users understand and consume it through beautiful products. Ultimately, we want to help paint a complete picture of location on a hyper-local basis, and we believe coupling data with social comments is a very powerful combination.”

In creating Crime Maps, Trulia has unearthed some interesting statistics about crime in America based on the 50 metros that are available at launch. Some highlights include:

Crime in America

* The top 5 most common crimes reported are (in order from most to least):

· Theft

· Assault

· Burglary

· Arrest

· Vandalism

* Time of day and type of crime are linked:

o Thieves typically strike while people are at work. Most thefts and burglaries are reported once people go home at noon around lunchtime or after work around 5pm.
o Vandalism is typically reported in the morning around 9-10am when it’s easier for people to see criminals in the act.
o Violent crimes such as assault and robberies typically happen at night around 9-10pm while people are out on the town or on their way home from an event.

TRULIA CRIMEMAPS:

* Neighborhood Crime Insights: Learn more about a neighborhood’s crime statistics using large interactive maps to view where and what types of crimes occur in neighborhoods across America. Compare time-of-day data, stack statistics of one neighborhood against another and dig in deeper to the details of crimes.
* Heatmaps – shows historical crime during the past twelve months
* Social Commenting: Via Facebook’s social plug-in, users can leave detailed comments about areas, providing local, personal and relevant context to the Crime Maps data.

ADDITIONAL ASSETS

· To view and explore Crime Maps

· To view a video about Crime Maps

· To view a slideshow of the findings

· To view Crime Maps methodology

· To download high-resolution screenshots of Trulia’s Crime Maps

About Trulia, Inc.
Trulia is the fastest growing online real estate resource, empowering buyers, sellers and renters with smarter tools to help them find the right home. Trulia helps you find the home that best meets your specific needs. Our smart and personalized real estate search experience brings together local information, community insights, market data and national listings all in one place. Trulia is headquartered in downtown San Francisco and is backed by Accel Partners and Sequoia Capital.

NAR Ignores Members To Promote Political Agenda

2011-05-21T09:36:00.000-07:00

It is a sad day when the people are once again ignored. Despite the overwhelming number of Realtor's that do NOT agree with NAR raising their dues by 50% to support NAR's political agenda; NAR is not listening to its' members and raising dues. See partial article from Inman News here...

NAR to hike dues by $40
Board of directors approves 'Realtor Political Party Survival Initiative'
By Matt Carter, Monday, May 16, 2011.

Inman News™

The National Association of Realtors board of directors has approved a $40-a-year dues increase to boost political activities, despite polls showing members overwhelmingly opposed it, and warnings from local association executives that a dues increase would accelerate membership declines.

In march, NAR floated the idea of raising the national association's dues by 50 percent, from $80 to $120, in order to increase spending on political advocacy in light of last year's U.S. Supreme Court decision striking down restrictions on independent campaign expenditures by corporations.

An advisory group formed by NAR's then-president, Vicki Cox Golder, concluded in a November report that the Supreme Court's decision in Citizens United v. FEC would open the floodgates for independent campaign expenditures, requiring NAR to step up spending to maintain its voice.

The dues increase approved Saturday "will allow NAR to provide millions of dollars in additional support to state and local boards, which are facing a cadre of policy proposals that would restrict private property rights and drain homeowners' pocketbooks," NAR President Ron Phipps said in a statement.

Find Your Dream Home

2011-05-17T11:09:00.000-07:00

What are the most important issues in finding your dream home?

1. Neighborhood: Finding which neighborhood you desire is tricky. You should consider your wants and needs. Do you have children and need to live within the boundaries of a specific school district? You might want a short commute, a neighborhood with historic homes, or homes that are near night life and restaurants.

2. Square footage: What size of home fits your needs? The average home in the United States is 2,195 square feet. Thirty years ago the average size was just 1,645. The trend has been for larger and larger homes, with special purpose spaces, such as exercise rooms, offices, studies, and media rooms. This trend is now receding.

3. Floor Plan: Architectural styles offer a wide range of choices! Open floor plans might appeal to you, with their great flow for entertaining. Or you may have a more traditional aesthetic, preferring cozy rooms. Think about how you live your life and what style best fits your needs.

4. Finishes: There are different grades of homes. Take your kitchen, for example. You can find a wide range of beautiful laminate counters, just as you can find a wide range of beautiful granite ones. These choices dramatically affect price. Think carefully about what you want in your dream home. Do you want stone floors or will ceramic suffice?

5. Amenities: Our homes extend past the borders of our property. We live in the parks, shopping, and restaurants that surround us. Be sure to think outside the "box" of your house when you buy.

6. Landscaping: A large yard can mean lots of entertaining potential, but it can also mean a lot of work. Be sure to consider your needs now and down the road when it comes to yard maintenance. Many buyers prefer a townhouse or condo as their "dream home". These options afford buyers with much less responsibility when it comes to upkeep! Just be careful to buy in an area where 30% of the units or less are owned by investors or it might be hard to sell when you need to move. If more than 30% of the units are owned by investors, a new buyer may not be able to get a loan and you will have to hold out for a cash buyer.

Be sure to visit our website when searching for your dream home at www.DreamHomesInAZ.com You can sign up to receive MLS listings within 24 hours of homes being listed on the MLS absolutely FREE! You can also get coupons from over 100 vendors that will help you save lots of money on purchases for your new home.

Why Do Canadians Like To Buy Homes In Phoenix?

2011-05-11T20:45:00.000-07:00

The collapse in housing prices and a strong Canadian dollar are luring north-of-the-border buyers to Arizona and other states where the weather is warm and the housing cheap.

Canadians surpassed Californians in 2010 as top out-of-state buyers of Phoenix-area real estate. The Canadian dollar gained, up from an average of 80 cents on the U.S. dollar in 2005. At the same time, home prices in the Phoenix area have dropped 50-60 percent from their peak in early 2007.

Some U.S. lenders who will work with Canadians, but most of those buyers still pay cash. About half buy for investment, capitalizing on soaring demand for rental housing in Arizona because many families are lost their homes to foreclosures. Other Canadian buyers want vacation homes.

Many Canadian buyers like Arizona because they don't worry about earthquakes, tornado's, hurricanes and harsh winter weather. Florida has hurricanes, which have jacked up homeowners' insurance rates. In California, where earthquakes are a threat, areas that offer the greatest housing bargains are not vacation spots.

Currently homes priced under $150,000 are selling quickly in the Phoenix market. Things are tightening up which is good news for homeowners. It is a great time to buy homes with low interest rates.

2011 Housing Shortage?

2011-04-09T11:09:00.000-07:00

From what I see, we have a housing surplus but I hope this guy is right so the housing market can recover and we see home prices rising instead of falling...

Economist: Housing shortage coming in 2011
He says that if new houses aren't built soon in the U.S., there won't be enough next year.

By Alexandra Zendrian of Forbes

Economist: Housing shortage coming in 2011 (© Kevin Cooley/Getty Images)

more on Forbes.com

* America's new housing crisis capitals
* 10 cities to go from renting to buying
* Cities with the fastest-falling home prices

The focus of the U.S. real-estate market lately has been the number of foreclosures and people trying to purchase cheap housing. But Brian Wesbury, chief economist at First Trust Advisors, says that if Americans don’t start focusing on building new houses, the market will have a much bigger problem on its hands.

“We need one and a half million houses per year just to keep up with population growth,” Wesbury said in an interview with Steve Forbes. “And then if you throw in, you know, fires and tear-downs and just worn-out properties, we need 1.6 million or more per year. Right now, we’re down to about six and a half, seven months’ inventory whether you look at new homes or existing homes.”

Privately owned housing starts in December 2009 were at a seasonally adjusted annual rate of 557,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development. This is 4% less than where it was in November, which had 580,000 housing starts.

* Video: Is stimulus enough? Real-estate trends

Housing completion numbers also contribute to this dire picture, with privately owned housing completions reaching a seasonally adjusted annualized rate of 768,000 in December 2009. That was down 11.2% from the 865,000 completions in November and down 25.3% from the 1.03 million completions in December 2008.

* MSN Money: Find a mortgage under 5%

Some people might shrug these statistics off, considering the number of foreclosures on the market. “Yes there’s foreclosures coming into the market, but we’re only starting right now,” Wesbury says. “... We’re starting one-third of the houses we need just to keep up with population growth, and that can’t last.”

* On our blog, 'Listed': Rent is cheap now, but a shortage looms

There were 315,716 properties last month with foreclosure filings, according to RealtyTrac. These filings include default notices, scheduled auctions and bank repossessions. Though last month’s filings were 15% more than a year ago, they were 10% less than in December.
More Real Estate Deals Ahead?
View more MSN videosGo to CNBC

Jason Thomas, chief investment officer for Aspiriant, a California wealth-management firm, says he doesn’t see the foreclosure situation getting better until the labor market picks up. “So many people are getting to a point where they just can’t hold on anymore, and we may see another wave of that if we don’t see a pretty robust turnaround in the labor market,” he says.

The unemployment rate is currently 9.7%, down from 10% at the end of 2009, according to the Bureau of Labor Statistics.

Thesis Fund Management portfolio manager Stephen Roseman says the likelihood of a housing shortage is slim to none. “You need to have an accurate housing turnover number, and right now we have anything but that,” he says.

There is some demand, though, from companies that are scooping up whole floors or housing developments because they have the cash on hand, Roseman says.

And for those people who can get a mortgage, homes are very affordable. The median price for U.S. existing single-family homes in metropolitan areas was $173,200 in 2009, according to the National Association of Realtors, compared with $198,100 in 2008.

* Find foreclosures in your area

Mortgage rates are also very low. For instance, both JPMorgan Chase and Wells Fargo are offering 30-year fixed mortgages at 5%, and some can be found for a hair less.

“A mortgage is not difficult to get if you have the right income stream,” says Margaret Starner, senior vice president for the financial services firm Raymond James.

But even if you can get a mortgage, maintaining the income to pay for that mortgage isn’t easy. “There’s a lot of potential problems that can come out if unemployment continues to drag; people deplete their savings and their credit card,” says Michael Ervolini, head of behavioral finance at Cabot Research. “It appears to be more of an income issue than a housing issue that we’re going to be looking at for the next couple of years.”

MORTGAGE RATES DECLINE

2010-05-24T12:29:00.000-07:00

Crazy!! Home Buyers Get Surprise Boost From Europe Crisis as Loans Drop to Below 5%

Home Buyers Get Surprise Boost From Europe Crisis as Loans Drop to Below 5%
By NICK TIMIRAOS, Wall Street Journal

The financial turmoil in Europe is providing an unexpected windfall for American home buyers, as international money seeking a safe haven is flowing into the U.S., pushing domestic mortgage rates to the lowest levels of the year and back near 50-year lows.

The housing industry had been bracing for months for a period of rising mortgage rates, triggered by the end of the Federal Reserve's $1.25 trillion mortgage-securities purchase program. Conventional wisdom held that mortgage rates would rise as the Fed pulled back from propping up the market.

Instead, many in the industry now say rates could drift as low as 4.5% this summer from 4.86% now, instead of rising to 6% as some economists projected, making for significantly lower payments for Americans buying homes or refinancing their mortgages.

Refinance business "exploded" last week, says Jeff Lazerson, chief executive of Mortgage Grader, a brokerage in Laguna Niguel, Calif. "It's schizophrenic. We all had this expectation of higher interest rates and no more refinances." He says he helped a borrower lock in a 30-year loan with a 4.25% fixed rate last week, the lowest in his 24 years in the business.

Rates on 30-year mortgages averaged 4.84% last week, according to a survey by mortgage-insurance titan Freddie Mac. Rates were quoted late Friday at 4.86%, the lowest since December 2009, according to a survey by financial publisher HSH Associates, and down from a high of 5.27% for the week ended April 9. Rates on 15-year mortgages averaged 4.24% last week—the lowest since Freddie began its survey in 1991.

Economists largely attribute the decline in mortgage rates to the European debt crisis and new concerns about the global economy, which unleashed a massive wave of cash into U.S. bonds from investors around the world.

This buying pushed down yields on Treasury bonds. Because mortgage rates are closely pegged to yields on 10-year Treasury notes, which fell to 3.2% Friday, the decline in Treasurys pulled down mortgage yields. Typically, mortgage yields remain around 1.5 percentage points above yields on 10-year Treasury notes.

Falling mortgage rates can give a powerful lift to the housing market. A general rule of thumb holds that every one percentage point decline in mortgage rates is the equivalent of roughly a 10% reduction in the home price for the buyer. So, if the current rates hold, say economists, that could help stabilize prices and allow current homeowners to sell existing homes without substantial price cuts.

It isn't clear how much home-buying the lower rates will spur. Demand had fallen in recent weeks after buyers raced to close sales ahead of last month's expiration of an $8,000 federal tax credit for home purchases. Applications for new-purchase loans hit a 13-year low in the week ending May 14, according to the Mortgage Bankers Association.

Borrowers do face roadblocks. Underwriting standards are their strictest in a decade, and record numbers of borrowers are "underwater," owing more to the bank than their homes are worth. That has excluded large swaths of borrowers from getting loans at the new lower rates.

Still, lower rates could widen the pool of people who qualify for a mortgage, while others may find they qualify for a slightly larger loan. "They can buy the place with the extra bedroom or the swimming pool," says Jay Brinkmann, chief economist at the Mortgage Bankers Association.

Falling rates have encouraged some Americans to consider refinancing their existing mortgages to save money. A one-percentage-point decline in mortgage rates can cut $250 off the monthly payment on a $400,000 30-year fixed-rate mortgage, giving consumers cash they can use to spend.

Richard Hunsinger plans to refinance two loans on his Potomac, Md., home into a new 15-year mortgage this week with a 4.37% rate. The 55-year-old dentist is worried that interest rates will eventually rise sharply, boosting the payment on his home-equity line of credit. His first mortgage, also a 15-year loan, currently has a fixed rate of 5.25%. And while the rate on his $240,000 home-equity loan is just 3.25%, it has risen as high as 8% in the past.

Rates "can't stay low forever," says Dr. Hunsinger. If they go up over the next year, "this will look like a really bright decision."

By historical standards, rates are incredibly low. Until 2003, rates on 30-year fixed-rate loans hadn't dipped below 5% since the 1960s. Rates fell to similar points throughout much of the past year as the government was helping to hold down costs for borrowers.

Nearly half of all borrowers with 30-year conforming fixed-rate mortgages have mortgage rates of 5.75% or higher and could reduce their rates by a full percentage point if they refinanced at current rates, according to investment bank Credit Suisse.

Many of those borrowers may have tried to refinance last year, only to find that they couldn't qualify. When rates fell to similar lows in 2003, refinance activity hit a record $2.9 trillion, compared to $1.2 trillion last year, according to Inside Mortgage Finance, a trade publication.

Now, more private investors are coming into the market for loans, offering better prices for securities containing mortgages with low rates than they were one year ago. That could lead banks and brokers to cut upfront origination fees, and borrowers who are able to refinance could find it cheaper to do so than last year.

"I'm calling people back and saying, 'Now it's worth it,'" says Michael Menatian, a mortgage banker in West Hartford, Conn.

—Prabha Natarajan contributed to this article

Savings Tips

2009-09-21T19:38:00.000-07:00

Subject: 7 Easy Tips...

Did you know that the Personal Savings Rate in 2009 is at the highest point of the decade?

Clearly, people are more aware of being ready for "a rainy day" than ever. Here are seven easy ways to grow your savings:

1) Establish an emergency savings account. A good rule of thumb is to set aside money equal to two or more month's worth of expenses.

2) Save money for your long-term goals.

3) Make savings automatic.

4) Start small, if necessary. Something IS better than nothing.

5) Comparison shop for the best rate.

6) Turn a payment into savings. If you've recently paid off a credit card or loan, add that payment to a monthly savings account.

7) Save your windfall! Don't spend money you weren't planning (or expecting) on having.

Tips For A Smooth Loan Approval

2009-09-03T19:45:00.000-07:00

Here is a list of helpful tips to ensure an effortless loan process.
These DO’s and DON’Ts will help avoid any delays with your loan approval

- DO continue making your mortgage or rent payments
- DO stay current on all existing accounts
- DO keep working at your current employer
- DO keep your same insurance company
- DO continue living at your current residence
- DO continue to use your credit as normal
- DO call us if you have any questions
- DON’T make a major purchase (car, boat, jewelry, etc.)
- DON’T apply for new credit (even if you seem pre-approved)
- DON’T transfer any balances from one account to another
- DON’T pay off charge offs without a discussion with us first
- DON’T pay off collections without a discussion with us first
- DON’T buy any furniture
- DON’T close any credit card accounts
- DON’T change bank accounts
- DON’T max out or over-charge on your credit card accounts
- DON’T consolidate your debt onto 1 or 2 credit cards
- DON’T take out a new loan
- DON’T start any home improvement projects
- DON’T finance any elective medical procedure
- DON’T open a new cellular phone account
- DON’T join a new fitness club
- DON’T pay off any loans or credit cards without a discussion with a good lender

Purchase Assistance Money To Buy A Home

2009-07-02T18:44:00.000-07:00

Limited amount of funds available!!
The Arizona Department of Housing (ADOH) will offer 22 percent in purchase assistance to qualified home buyers purchasing an eligible foreclosed home in the State. ADOH provides help in the form of a deferred second mortgage loan for purchase assistance. All loans are zero percent interest with no monthly payment.
QUALIFICATIONS
Eligibility for the purchase assistance is based on a variety of factors
1.) The household must have a gross income (the total income before taxes, health care costs, social security, etc.) of no greater than 120 percent of the average median income for the county they want to purchase a foreclosed house in.
2.) If you own a residence, you must be leasing your primary residence at least 12 months before applying for the program.
3.) Attend and complete an eight-hour Home buyer Education Class.
4.) MUST be your primary residence.
5.) Maximum debt-to-ratio is 31/43.
6.) Foreclosed properties only. One unit detached single family homes, condos and town homes.
7.) Minimum of 3% down payment, 1% must come from borrower's own funds.
HOW DO I START?
Once you have determined you may be eligible for the ADOH program, contact me at 480-813-0970.

Report: Sunbelt States Likely To Lead A Slow Recovery

2009-06-26T10:04:00.000-07:00

Phoenix Business Journal

Six Sunbelt states, including Arizona, are poised to recover from the recession faster than other regions of the country, but the pace of recovery will be slow, according to BBVA Compass’ quarterly economic report.

The report says that “the worst is behind us,” but each state’s recovery will hinge on factors including how well it is able to assimilate its portion of the federal stimulus package.

“At the moment, the economy is still contracting, so we expect to see negative GDP growth in the second quarter, but at a slower pace than in (the first quarter),” said Nathaniel Karp, the bank’s U.S. chief economist.

In Arizona, GDP is expected to contract by 2.8 percent this year, more than the Sunbelt average of minus 1 percent and the national average of minus 2 percent. A move back to positive territory is expected for 2010 — a .9 percent gain for Arizona, 1.5 for the region and 1.1 percent for the nation, according to the report.

“Consumption, however, is expected to lead the resurgence in economic activity in the second half of the year, but the high unemployment rate, the greater propensity to save and the high degree of uncertainty regarding the impact of the fiscal stimulus package could present risks to this scenario,” Karp said.

The report points to the Sunbelt’s unemployment rate hovering a percent under national figures and notes that it fell slightly in Arizona, Colorado, Florida and New Mexico during April. Initial unemployment insurance claims have fallen throughout the region, except in Arizona, according to BBVA.

Employment is expected to decline 6.4 percent in Arizona this year, compared to a 3.8 percent drop across the U.S.

Arizona home sales have increased for three consecutive quarters, a trend in states hit hardest by the real estate crash. Prices here, however, are expected to end the year with a 6.2 percent decline, the report says. That compares with BBVA’s predicted drops of 6.3 percent for Sunbelt states and 4.3 percent nationally. In 2010, the bank is looking for a 1.3 percent gain in Arizona, compared with 0.1 percent in the region and 1.7 percent nationally.

The report also notes that Arizona led the pack among the small number of states seeing a rise in building permits during April.

The study covered economic activity in Texas, Arizona, Colorado, Florida, Alabama and New Mexico, the six states in which BBVA Compass operates.

DONOVAN ANNOUNCES RECOVERY ACT'S HOMEBUYER TAX CREDIT CAN IMMEDIATELY HELP THOUSANDS OF FIRST-TIME HOMEBUYERS TO BUY A HOME

2009-05-29T16:17:00.001-07:00

News Release
HUD No. 09-072
Lemar Wooley
(202) 708-0685
www.hud.gov/news/index.cfm For Release
Friday
May 29, 2009

----------
DONOVAN ANNOUNCES RECOVERY ACT'S HOMEBUYER TAX CREDIT CAN IMMEDIATELY HELP THOUSANDS OF FIRST-TIME HOMEBUYERS TO BUY A HOME
FHA plan will stimulate new home sales and help stabilize housing market

WASHINGTON - Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration's new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today's action will help stabilize the nation's housing market by stimulating home sales across the country.

The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today's announcement details FHA's rules allowing state Housing Finance Agencies and certain non-profits to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA's new mortgagee letter, visit HUD's website.

"We believe this is a real win for everyone," said Donovan. "Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation's housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away. At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders. What we're doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing."

Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today's announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower's own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. Today's action permits the first-time homebuyer's anticipated tax credit under the Recovery Act to be applied toward the family's home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit.

According to estimates by the National Association of Home Builders, the Administration's homebuyer tax credit will stimulate 160,000 home sales across the nation - 101,000 of which will be first-time buyers who will receive the credit. Another 59,000 existing homeowners will be able to buy another home because a first-time buyer purchased their home. Given FHA's current market share, it's estimated that thousands of families will be able to purchase a home by allowing the anticipated tax credit to be applied toward their purchase together with an FHA-insured mortgage.

Homebuyers should beware of mortgage scams and carefully compare benefits and costs when seeking out tax credit monetization services. Programs will vary from organization to organization and borrowers should consider whether the services make sense for them, as well as what company offers the most suitable and affordable option.

For every FHA borrower who is assisted through the tax credit program, FHA will collect the name and employer identification number of the organization providing the service as well as associated fees and charges. FHA will use this information to track the business closely and will refer any questionable practices to the appropriate regulatory agencies, as necessary.

Home Price Declines May Be Slowing

2009-05-19T11:40:00.001-07:00

Monday, May 18, 2009, 11:43am MST
Phoenix Business Journal - by Matt Culbertson

The decline in Phoenix-area home prices is slowing down, following a record annual drop in values in February, according to a new study by Arizona State University.

The ASU-Repeat Sales Index, which measures changes in year-to-year average home prices, shows a record drop of 37 percent in the index from February 2008 to February 2009.

But the declining values appear to be slowing, with a March-to-March drop of 36 percent and a predicted 34 fall for April 2008 to April 2009.

Karl Guntermann, Fred E. Taylor professor of real estate at ASU W. P. Carey School of Business, said in a news release that the figures suggest a slower rate of decline than previous months.

“In this market, this would be considered good news,” he said. “Before this reversal, we were seeing the index drop another 1 or 2 percent every month.”

According to the ASU-RSI report, declining prices from February 2008 to February 2009 were ranged from 40 percent in Glendale to 16 percent in Tempe.

The index shows declines in home prices for every month in the last two years, eclipsing the previous record set in the early 1990s of 17 months. Guntermann’s initial estimate for median Phoenix-area home prices in April is $117,500, which would be equivalent to November 1998 levels.

The ASU-RSI is based on repeat sales — comparing prices of a single house against itself at different times — which according to the report is the most reliable way to gauge price fluctuations in the housing market.

HUD Announces Plan To Offer Bridge Loans For $8000 First Time Homebuyer Tax Credit

2009-05-13T08:19:00.000-07:00

by Ben Martin, blogmaster emeritus on May 12, 2009

Today at NAR’s Midyear Legislative meetings, HUD Secretary Donovan announced that the housing agency is planning to offer bridge loans to allow first time homebuyers to use the $8000 tax credit towards their down payment. As an aside, we have also heard — unconfirmed rumor at this point — that VHDA is planning a similar program. We’ll announce details as they become available.

NAR’s Speaking of Real Estate blog says details will be announced during Secretary Donovan’s keynote address.

UPDATE: Here is the text of Secretary Donovan’s prepared remarks, given during his keynote address this afternoon:

We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a downpayment. So FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to “monetize” the tax credit through short-term bridge loans. We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit. FHA will be publishing the details shortly.

8 Signs of Hope for the Economy

2009-05-07T20:46:00.000-07:00

by Beth Kowitt
Tuesday, May 5, 2009

Are we on the brink of a rebound, or is it a false Spring? Fortune looks at the evidence for an imminent recovery.

Is the economy looking up, or at least bottoming out? Lately there has been much talk about "glimmers of hope," in President Obama's words, and "green shoots," a phrase du jour used by the likes of Fed Chairman Ben Bernanke.

Meanwhile, many economists have warned about a false spring, pointing to numbers that are still getting worse, like the unemployment rate. Fortune takes a closer look at the upbeat news to assess whether how strong a case they make for an imminent recovery.

1. Housing Starts

The government reported that the overall number of housing starts fell in March, but those for single-family homes during the month came in unchanged from the February figure of 358,000.

IHS Global Insight noted that this suggests single-family home construction may be stabilizing and is "testing the bottom."

2. The Stock Market

The S&P 500 was up 9.4% in April, its biggest monthly rally since March 2000. The Wilshire 5000 Total Market Index ended the month at 8,962.96, up 849.85, or 10.48%. This is the best monthly return since December 1991, when the index was up 10.72%.

"The initiatives of the federal government and some of the improvements in the credit markets are making investors more confident," said Thomas Cowhey, chief investment strategist at Hirtle Callaghan.

3. Consumer Confidence

Preliminary figures for the Conference Board's Consumer Confidence Index showed a jump of more than 12 points during April, to 39.2. The reading, which measures consumer views on the economy, beat analyst expectations and was the highest so far in 2009.

Lynn Franco, director of the organization's research center, attributed the rise in confidence to "significant improvement in the short-term outlook."

4. Single-Family Home Prices

The S&P/Case-Shiller Home Price Indices showed that while 20-city and 10-city Composite Home Price figures declined through February 2009 (down 18.6% and 18.8%, respectively, from a year ago), for the first time in 16 months the annual decline did not set a new record.

While it signals that the market may be showing some stabilization, or at least what Chairman of the Index Committee David Blitzer called "deceleration in the rate of decline," Blitzer warned that we "need a few more months of data before we can determine if home prices are finally turning around."

Meanwhile, the Pending Home Sales Index rose for the second straight month in March and was up more than 1% over the year-ago figure. The index from the National Association of Realtors (NAR) increased 3.2% during the month, to 84.6%.

"This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit," wrote Lawrence Yun, the NAR chief economist.

5. Earnings

The collapse in profits may be nearly played out. As of the last day in April, the 341 S&P 500 companies that had reported earnings for the first quarter were on average about 2% below estimates, according to Howard Silverblatt, senior index analyst at Standard & Poor's. Silverblatt says the results are overall "not good but definitely not bad" and show that "deterioration has slowed down."

Financial companies reported surprisingly strong numbers. But we can't count on an earnings turnaround for many months, says Silverblatt, who won't consider the numbers to show definitive proof of improvement until fourth-quarter results are in.

6. Jobless Benefit Claims

While unemployment figures are expected to rise still further, there was a signs of hope in the Unemployment Insurance Weekly Claims Report for the week ending April 25. The Department of Labor reported that seasonally adjusted initial claims for unemployment aid fell by 14,000 to 631,000.

"The past few weeks' claims data are beginning to look increasingly like a peak," wrote Ian Shepherdson of High Frequency Economics.

7. New Orders and Exports

Orders are starting to pick up. While reports from the Institute for Supply Management showed that the manufacturing sector failed to grow for the 15th straight month in April, its New Orders Index increased six percentage points to 47.2%, the highest level since August. The New Exports Orders Index increased 5 percentage points, to 44%.

"While this is a big step forward, there is still a large gap that must be closed before manufacturing begins to grow once again," said Norbert Ore, chair of the institute's survey committee, in a statement. "This is definitely a good start for the second quarter."

8. Credit Markets

Banks are starting to trust one another again. In May, the three-month London interbank offered rate (Libor), a benchmark for interbank loans, fell below 1% for the first time on record. That was down from 1.16% a month ago and 2.51% six months prior.

John Ewan, director of the British Bankers' Association, which sets the rate, told Fortune in an email that "the continued easing of the rates demonstrates that liquidity and confidence are returning to the wholesale markets."

Copyrighted, CNNMoney. All Rights Reserved

Mortgage applications up 5.3% last week: MBA

2009-04-24T13:13:00.000-07:00

CHICAGO (MarketWatch) -- Mortgage applications rose a seasonally adjusted 5.3% last week, compared with the week before, due to an uptick in refinance applications, the Mortgage Bankers Association reported on Wednesday.
Applications were up 76.9% for the week ended April 17, compared with the same week in 2008, the MBA said. The weekly MBA survey covers about half of all U.S. retail residential mortgage applications.
Refinance applications were up an unadjusted 7.7% last week, compared with the week before. Applications for mortgages to purchase a home were down a seasonally adjusted 4.2%, compared with the week before.
The four-week moving average for all mortgages was up 0.3%.
The share of applications for refinance mortgages was 79.7% of total applications, up from 77.8% the previous week. The share of adjustable-rate mortgages was 1.4% of all applications last week, down slightly from 1.5% the previous week.
Thirty-year fixed-rate mortgages averaged 4.73% last week, up from 4.70% the week before.
Fifteen-year fixed-rate mortgages averaged 4.46%, unchanged from the previous week. And one-year ARMs averaged 6.19%, down from 6.21%. End of Story
Amy Hoak is a MarketWatch reporter based in Chicago.

Bernanke: 'Fundamentally Optimistic' About Economy

2009-04-14T12:35:00.000-07:00

By BRIAN BLACKSTONE
WASHINGTON -- Federal Reserve Chairman Ben Bernanke on Tuesday offered some hope that the 16-month-old recession may be losing some of its severity and he is "fundamentally optimistic" about the economy's longer term prospects.

"Recently we have seen tentative signs that the sharp decline in economic activity may be slowing," Mr. Bernanke said in remarks prepared for delivery later Tuesday in Atlanta.

He specifically cited recent figures on housing, consumer spending, and new vehicle sales as some of those signs that the recession is slowing.

"A leveling out of economic activity is the first step toward recovery," Mr. Bernanke said.

"Today's economic conditions are difficult, but the foundations of our economy are strong, and we face no problems that cannot be overcome with insight, patience, and persistence, "he said. (See the full text of Bernanke's prepared remarks.)

Excerpts of Mr. Bernanke's speech to students at Morehouse College were released in USA Today.

Mr. Bernanke also stressed that despite the extraordinary efforts the Fed is taking to support financial markets and the economy, it hasn't taken its eye off of inflation. The Fed "treats its obligation to ensure price stability extremely seriously," Mr. Bernanke said.

Price stability doesn't necessarily mean that inflation is zero, and Mr. Bernanke noted that most Fed officials would like to see annual inflation of around 2% over the long term. "Right now, because of the weakness in economic conditions here and around the world, inflation has been running less than that, and our best forecast is that inflation will remain quite low for some time."

Still he warned that as the economy strengthens, financial markets heal and the demand for goods and services rebounds, liquidity the Fed has pumped into the system could pose an inflationary threat unless key interest rates rise and some liquidity is drawn back out of the system.

Mr. Bernanke signaled that officials are mindful of the need for an exit strategy once the economy improves. Fed officials, he said, "are fully committed to acting as needed to withdraw on a timely basis the extraordinary support now being provided to the economy and we are confident in our ability to do so."

Mr. Bernanke expressed confidence in the Fed's ability to promote economic stability through a variety of efforts including credit programs and open market securities purchases, saying "the Fed's toolkit remains potent, even though the federal funds rate is close to zero and thus cannot be reduced further."

He again defended the federal government's decision to rescue American International Group Inc., saying "preventing the failure of AIG was the best of the very bad options available." He acknowledged that many Americans see the AIG rescue as unfair because other companies, including nonfinancial and smaller financial firms, haven't been treated in the same manner. "Allowing AIG to at least partly avoid the discipline of the marketplace also sets a bad precedent," he said.

Betting On A Housing Recovery

2009-03-25T16:22:00.000-07:00

Hopes are rising that the housing market has finally hit bottom. In addition to better-than-expected home sales reports, many homebuilder stocks are surging.

NEW YORK (CNNMoney.com) -- Has the housing market finally hit bottom? It's probably too soon to say -- but Wall Street sure seems to think so.

The Commerce Department reported Wednesday that new-home sales rose almost 5% last month after hitting their lowest point ever in January. Economists were expecting a decline of about 3%

This comes on the heels of two reports showing a better-than-expected gain in existing-home sales and the first increase in construction of new homes since June.

Investors have taken notice. The SPDR S&P Homebuilders (XHB) exchange-traded fund spiked about 8% higher Wednesday morning. The ETF includes several leading homebuilders, as well as companies with strong ties to the housing market like Home Depot (HD, Fortune 500) and Lowe's (LOW, Fortune 500) and paint maker Sherwin Williams (SHW, Fortune 500).

Talkback: Do you think housing has finally hit bottom?

Over the past two and a half weeks, a period when the entire market has surged, the homebuilders ETF has been one of the big leaders -- it is up more than 40% compared to about 20% for the S&P 500.

In fact, even though the broader stock market is still down sharply this year, several homebuilding stocks are actually in the black, including D.R. Horton (DHI, Fortune 500), Lennar (LEN, Fortune 500) and Pulte Homes (PHM, Fortune 500).

Now what does all this mean? Are savvy investors declaring that the worst is over for housing and that it's time to start plowing back into homebuilders? Perhaps. Still, it's hard to get overly excited about the recent housing data.

Investors have to be cautious.

Even though some of the February numbers suggest that the that the credit markets may be finally thawing after the Lehman Brothers collapse-induced freeze, many experts warn that isn't the same thing as a healthy housing market -- especially since home prices continue to fall.

In addition, the unemployment rate has risen sharply in the past few months and many economists expect that trend to continue.

So even though mortgage rates have been falling and banks may be more willing to lend now that the Treasury Department has a plan to help them unload some of their most troubled assets, that may not be enough to counter the growing ranks of unemployed who can't buy under any circumstances.

0:00 /0:53Mortgage affordability

Nonetheless, one fund manager who owns several homebuilder stocks said that even though it's premature to predict a housing recovery, the group has been beaten down so far that it won't take a significant real estate upturn for more share-price gains.

"One month does not a trend make. We're hopefully bouncing along the bottom but happy days are not here again," said John Buckingham, manager of the Al Frank fund. "Still, many of the stocks have been priced for the Great Depression 2. Lots of homebuilders have been generating cash during the downturn and their balance sheets, believe it or not, are in good shape."

Buckingham said he's a little concerned by the sharp recent run-up in the stocks. But he said he still likes shares of several of the larger builders, including MDC Holdings (MDC), Ryland (RYL), D.R. Horton and KB Home (KBH, Fortune 500), for the long-term.

At the end of the day, stabilization in the market is what is needed before a recovery. It's the classic case of learning to crawl before you can walk, let alone run.

Buckingham said that as long as the housing numbers are "getting less worse" that should be treated as encouraging news by investors. He added that even though some may dismiss February's surprising sales strength as a byproduct of more demand for foreclosed homes, any boost to sales is a good sign.

"Clearly there is interest in homes. Whether it's in foreclosure or not, there's still a buyer. That helps put in a floor on prices and could boost confidence," he said.

Another investor in several housing-related stocks agreed that the housing picture looks less bleak. But he added that investors will need to be patient. Just as the housing market didn't collapse overnight, a rebound won't take place quickly either.

"It's exciting that the numbers are perking up and the government's efforts to bring mortgage rates down are helping," said Doug Ober, chairman and CEO of Adams Express (ADX), a closed-end fund that invests mainly in U.S. stocks and owns Ryland, Lowe's and cabinet and plumbing fixtures maker Masco (MAS, Fortune 500). "But I think that probably the market is a little early on this. This is going to be a recovery that will take several years."

Shameless plug alert: Before I started writing The Buzz, I covered the media business for several years at CNNMoney.com. Some of this reporting is the basis of a book I've written about News Corp. CEO Rupert Murdoch called Inside Rupert's Brain, which was published on March 19 by Portfolio, an imprint of Penguin Group (USA).

Richard Russell: Bernanke Wants Mortgage Rates at 3-4%; "Massive Assault"

2009-03-20T08:25:00.000-07:00

Friday, March 20, 2009

From Dow Theory Letters:

Russell Comment -- They're calling it "The Rambo Fed." Bernanke is not fooling around any longer. He's playing all his cards. He's going to put a floor under housing and boost asset prices in an all-out attack on the bear market. Bernanke wants to drive mortgage rates down and refinance housing at 3-4%. On the news, the dollar swooned, the Euro surged, the long T-bond exploded higher by six points, and the yield on the ten-year Treasury bond sank to 1.51%. Whew, what a day and what an announcement.

The Bernanke plan -- smother deflation with money and put a floor under housing. Bernanke will in no way accept deflation. The Fed will go all-out in printing Federal Reserve Notes in its massive assault on deflation. Bernanke will accept a collapsing dollar rather than a repeat of the Great Depression. Actually, the Fed would like a lower (not a crashing) dollar. A lower dollar would be inflationary, which is what the Fed wants.

Good News On Credit Scores for People Involved in Foreclosure!

2009-03-16T12:31:00.000-07:00

Good news!!! Looks like FICO has figured out that they may need to adjust their scoring guidelines. Could 650 be the new 850? Don't give up on those that have a foreclosure during 2008-2009, the government must figure out a way to get these hundreds of thousands of people back into the market, our economy depends on it.....

Source: The New York Times, Ron Lieber (03/14/2009)

How Will Foreclosure Effect Credit Scores?
The amount of damage to a credit score caused by foreclosure, deed in lieu or a short sale during 2008 and 2009 may be mitigated by the slower economic times, say some credit and legal experts.

FICO may have to adjust its credit scores to lessen the impact of a foreclosure in the last two years, says Todd J. Zywicki, a professor of law at George Mason University.

''It just seems obvious that a foreclosure in 2008 or 2009 doesn't have as much information value as a foreclosure five years ago,'' he says. ''To the extent that foreclosure doesn't predict future behavior as much as it did in the past, you'd expect that the FICO algorithm would change to adjust for that.''

One of the country’s largest credit unions Golden 1 has already figured out a way to lend to people with a foreclosure on their record by offering a mortgage repair loan specifically for those who have lost a home to foreclosure and who want to buy a new one.

BECU, another large credit union based in Washington State, is about to present a program to fellow lenders, ''How to Lend to the Newly Credit Impaired.”

Foreclosure Tally: Good News, Bad News

2009-03-11T15:50:00.000-07:00

Phoenix Business Journal

The number of foreclosure filings in February jumped 83 percent from last year’s total, but has abated from the peak six months ago, according to Default Research.

The Pennsylvania provider of foreclosure lists reported 5,624 filings of Notice of Trustee Sales in Maricopa County in February. That’s up sharply from February 2008’s 3,066, but well below the August 2008 tally of 8,685 filings.

Default Research founder Serdar Bankaci had some encouraging words: “After a steep increase in foreclosures in 2007 and 2008, market indicators in the Phoenix area show that median home values have remained relatively constant for the past 90 days. We expect to see much of the same for the next six months, but the market should begin to recover by the end of this year.”

On the flip side, the company reports that the number of nonresidential foreclosures is on the rise, representing 3.6 percent of all properties entering the process in February.

“It is no surprise that the commercial and retail businesses have suffered with the decline in consumer spending,” said Bankaci. “To further complicate the foreclosure situation, many commercial properties are now unable to refinance their loans due the credit crunch.”

Regardless Of How Religious You Are (Or Are Not), The Following Is Inspiring...

2009-02-21T17:03:00.000-08:00

Here's a great interview with Rick Warren. He wrote the Purpose Driven Life, A highly recommended book. (and by the way, it is the book that the woman who was kidnapped by an escaped killer/prisoner used to convince her captor to turn himself in a couple of years ago.)

You will enjoy the new insights that Rick Warren has, with his wife now having cancer and him having 'wealth' from the book sales. This is an absolutely incredible short interview with Rick Warren,

'Purpose Driven Life ' author and pastor of Saddleback Church in California

In the interview by Paul Bradshaw with Rick Warren, Rick said:

People ask me, What is the purpose of life?

And I respond: In a nutshell, life is preparation for eternity. We were not made to last forever, and God wants us to be with Him in Heaven.

One day my heart is going to stop, and that will be the end of my body-- but not the end of me.

I may live 60 to 100 years on earth, but I am going to spend trillions of years in eternity. This is the warm-up act - the dress rehearsal. God wants us to practice on earth what we will do forever in eternity.

We were made by God and for God, and until you figure that out, life isn't going to make sense.

Life is a series of problems: Either you are in one now, you're just coming out of one, or you're getting ready to go into another one.

The reason for this is that God is more interested in your character than your comfort; God is more interested in making your life holy than He is in making your life happy.

We can be reasonably happy here on earth, but that's not the goal of life. The goal is to grow in character, in Christ likeness.

This past year has been the greatest year of my life but also the toughest, with my wife, Kay, getting cancer.

I used to think that life was hills and valleys - you go through a dark time, then you go to the mountaintop, back and forth. I don't believe that anymore.

Rather than life being hills and valleys, I believe that it's kind of like two rails on a railroad track, and at all times you have something good and something bad in your life.

No matter how good things are in your life, there is always something bad that needs to be worked on.

And no matter how bad things are in your life, there is always something good you can thank God for..

You can focus on your purposes, or you can focus on your problems:

If you focus on your problems, you're going into self-centeredness, which is my problem, my issues, my pain.' But one of the easiest ways to get rid of pain is to get your focus off yourself and onto God and others.

We discovered quickly that in spite of the prayers of hundreds of thousands of people, God was not going to heal Kay or make it easy for her- It has been very difficult for her, and yet God has strengthened her character, given her a ministry of helping other people, given her a testimony, drawn her closer to Him and to people.

You have to learn to deal with both the good and the bad of life.

Actually, sometimes learning to deal with the good is harder. For instance, this past year, all of a sudden, when the book sold 15 million copies, it made me instantly very wealthy.

It also brought a lot of notoriety that I had never had to deal with before. I don't think God gives you money or notoriety for your own ego or for you to live a life of ease..

So I began to ask God what He wanted me to do with this money, notoriety and influence. He gave me two different passages that helped me decide what to do, II Corinthians 9 and Psalm 72.

First, in spite of all the money coming in, we would not change our lifestyle one bit.. We made no major purchases.

Second, about midway through last year, I stopped taking a salary from the church.

Third, we set up foundations to fund an initiative we call The Peace Plan to plant churches, equip leaders, assist the poor, care for the sick, and educate the next generation.

Fourth, I added up all that the church had paid me in the 24 years since I started the church, and I gave it all back. It was liberating to be able to serve God for free.

We need to ask ourselves: Am I going to live for possessions? Popularity?

Am I going to be driven by pressures? Guilt? Bitterness? Materialism? Or am I going to be driven by God's purposes (for my life)?

When I get up in the morning, I sit on the side of my bed and say, God, if I don't get anything else done today, I want to know You more and love You better. God didn't put me on earth just to fulfill a to-do list. He's more interested in what I am than what I do.

That's why we're called human beings, not human doings.

Happy moments, PRAISE GOD.

Difficult moments, SEEK GOD.

Quiet moments, WORSHIP GOD.

Painful moments, TRUST GOD.

Every moment, THANK GOD.

If you do not pass it on, nothing will happen. But it will just be nice to pass it on to a friend....just like I have done.

God's Blessings…

Mortgage help: Do you qualify?

2009-02-19T06:49:00.000-08:00

President Obama's new real estate rescue plan offers two key possible benefits: More refinancing opportunities and greater chance for a loan modification.

By Les Christie, CNNMoney.com staff writer
Last Updated: February 18, 2009: 7:11 PM ET

NEW YORK (CNNMoney.com) -- The eagerly anticipated foreclosure prevention program unveiled Wednesday by President Obama targets 9 million borrowers for help - are you one of them?

The $75 billion effort, dubbed the Homeowner Affordability and Stability Plan, boils down to two basic solutions:

First, the government is aiming to help more homeowners refinance to take advantage of new low interest rates.

Second, it provides incentives to lenders and servicers to restructure your mortgage to more affordable levels.

Official guidelines won't be unveiled until March 4, but here's how to know whether you'll likely be able to take advantage of either of these options.
Help for those seeking refinancing

This part of the program targets borrowers who have kept current on their mortgages. Many of the homeowners in this group have been unable to lower their housing costs through refinancings because of falling home prices.

Right now, if you're underwater on your mortgage, owing more than the home's market value, forget about qualifying for a refi. In fact, at least 20% equity in your home is now a must.

The new guidelines should help. Even homeowners with debt that exceeds home value by 5% could be eligible. And there will be no prepayment penalties.

The Administration estimates that this will enable up to 5 million homeowners to obtain lower interest rate mortgages.

Who's not eligible. Homeowners whose property values have dipped severely, putting them underwater by more than 5% are out of luck.

Those with "jumbo" mortgages also don't qualify - only those with "conforming' mortgages do. To be absolutely sure what kind of loan you have, you need to check with your servicer or lender after March 4. But in general, until the past year, loans above $417,000 were considered jumbo mortgages, and Fannie Mae and Freddie Mac were not allowed to buy and guarantee them.

All borrowers will have to prove they have sufficient income to be able to keep up their loan payments, though what would be sufficient proof wasn't yet clear.
Mortgage modification help for at-risk borrowers

Homeowners in default or at risk of default may qualify for loan modifications, which restructure the terms of loans.

Anyone with high combined mortgage debt compared to income or who is underwater may be eligible for a loan modification.

Borrowers with high levels of other debt, such as car loans and credit card debt exceeding 55% of their incomes, may still qualify for a modification but they'll be required to accept debt counseling in a HUD-certified program.

If you qualify, your servicer or lender will reduce your monthly mortgage payments to 31% of your gross income.

The payment would stay there for five years and then gradually revert back to the conforming loan rates in place at the time.

The reduction would come mostly through interest-rate reductions, though in some cases, principal reduction also would be an option.

Borrowers would also receive incentive bonuses of up to $1,000 a year for five years for making payments on time.

President Obama estimated 3 to 4 million homeowners could benefit from the new modification procedures.

Who's not eligible. Speculators, those who bought homes for investment purposes, do not qualify for help -- all homes must be owner/occupied.

The program will also not reward homebuyers who were irresponsible in their borrowing. All applicants will be closely examined by lenders and those who acted unscrupulously by, for example, misrepresenting their incomes in no-doc loan applications, would not qualify.

And, in order to protect taxpayers from excessive expenses, no loans will be modified unless it results in a net savings compared with the costs of foreclosing. Finally, rates would not be lowered below 2%.

That will disqualify many borrowers who simply can't afford any reasonable mortgage payment because of illness, for example, or job loss.

"[The plan] will not reward folks who bought homes they knew from the beginning they would never be able to afford," said Obama. "In short, this plan will not save every home."

No mortgages for amounts above comforming loan limits would be eligible. To top of page
First Published: February 18, 2009: 6:57 PM ET

Obama Announces $75 Billion Foreclosure Prevention Plan

2009-02-18T11:47:00.000-08:00

The plan to stem the housing crisis, which President Obama released Wednesday, is more ambitious than initially expected -- and more expensive.

FOXNews.com

Wednesday, February 18, 2009

President Obama, calling the housing meltdown a "crisis unlike we've ever known," rolled out a $75 billion plan Wednesday that his administration hopes will keep as many as 9 million families in their homes.

The announcement in Phoenix comes a day after he signed a $787 billion economic rescue package that combines spending and tax cuts aimed at saving and creating millions of jobs.

The foreclosure prevention plan is more ambitious than initially expected -- and more expensive. It aims to aid borrowers who owe more on their mortgages than their homes are currently worth, and borrowers who are on the verge of foreclosure.

Obama said the plan is a critical component in his administration's efforts to pull the nation out of recession.

"In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to continue to deepen -- a crisis which is unraveling homeownership, the middle class, and the American dream itself," Obama said. "But if we act boldly and swiftly to arrest this downward spiral, then every American will benefit."

The plan would draw $50 billion from existing financial bailout money, as well as $25 billion from government-backed entities like Fannie Mae and Freddie Mac.

Part of the program would instruct Fannie and Freddie to automatically approve refinancing at current rates. That change is expected to give 4-5 million people an immediate reduction in their mortgage payments, according to a senior administration official.

Another component would provide government incentives to modify at-risk mortgages to drive down payments. Lenders would be asked to reduce monthly payments to 38 percent of the borrower's income, and then the government would split the cost of reducing that to 31 percent.

Obama said the funding would not reward "unscrupulous or irresponsible" speculators.

"This plan will not save every home," he said. "But it will give millions of families resigned to financial ruin a chance to rebuild."

Obama said the goal is to target families who are "underwater or close to it" and help those who "played by the rules and acted responsibly."

The goal of the overall plan is to save 7 to 9 million mortgages.

Announcing his plan in a state hard hit by the housing crunch, Obama said that stemming the tide of foreclosures is key to turning around the recession-bound economy.

FOX News' Wendell Goler and The Associated Press contributed to this report.

Economic Stimulus Plan Benefits the Housing and Mortgage Industries

2009-02-17T16:35:00.000-08:00

Economic Stimulus Plan Benefits the Housing and Mortgage Industries

Revised February 17, 2009

Just signed and sealed…a $787 Billion Stimulus Plan made up of tax cuts and spending programs aims at reviving the US economy. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II.

Home owners and potential homebuyers stand to gain from key provisions in this stimulus plan. Here is what we know as of today...

The following discussions are intended for you to use directly with your client either in writing or verbally.

Tax Credit for Homebuyers

First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.

Additional Housing-Related Provisions

Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing—This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs.Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.

Expanding Housing Assistance—This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.

More Help for Homeowners in the Future

Another thing to keep an eye on in the coming weeks is President Obama’s plan to help struggling borrowers before they are faced with a default on their mortgage.

According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.

While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That’s because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices.

Fannie Mae and Freddie Mac Follow Banks with Foreclosure Moratorium!

2009-02-17T16:31:00.000-08:00

Phoenix Business Journal

Fannie Mae and Freddie Mac said they will suspend foreclosure sales involving occupied single-family and two- to four-unit residential properties through March 6.

The announcement from McLean, Va.-based Freddie (NYSE:FRE) and Washington D.C.-based Fannie (NYSE:FNM), which own or guarantee almost half of the nation’s mortgages, comes after some of the largest U.S. banks with Arizona operations last week agreed to a similar measures while the government works out a plan to stabilize the banking industry.

Moratoriums from JPMorgan Chase, Wells Fargo, Bank of America Corp. and Citigroup Inc. also will remain in effect until March 6.

Fannie Mae and Freddie Mac said the temporary suspension should give give loan servicers more time to help troubled borrowers find an alternative to foreclosure. The latest suspension does not apply to vacant properties in foreclosure.

In addition, the moratorium gives lenders servicing Freddie Mac mortgages broad authority to provide forbearance to borrowers who are not yet delinquent, the lender said. Lenders also can provide permanent rate reductions, mortgage term extensions, forbearance of principal or other modifications to borrowers who are delinquent.

Stimulus Plan Benefits Home Sellers and Buyers in 3 Ways

2009-02-17T13:01:00.000-08:00

The Recovery Bill was passed today which includes provisions to benefit home owners and home buyers.

First Time Homebuyer Tax Credit has been amended. The Tax Credit has been increased to $8,000 for homes purchased between 1/1/09 and 12/1/09. Additionally, the credit will not be required to be paid back if the home is purchased between 1/1/09 and 12/1/09 and the buyers remain in the home without selling it for at least 3 years. The credit can be claimed on 2008 taxes with an amended return or on 2009 tax returns. It should be noted that if the home was purchased in 2008 the credit remains $7,500 and it still needs to be paid back over a 15-year time frame beginning in 2011.

FHA Loan Limits will temporarily be reverted back to the 2008 loan limits.
This would mean that the current FHA loan limits for Maricopa county of $271,050 would increase back to $346,250. Effective date for these loan limits is not yet known as Fannie Mae, Freddie Mac and FHA must determine pricing, policy and delivery requirements. We are anticipating a March 1st effective date, but will let you know as more details become available.

Home Improvement Tax Credit has been expanded.
Tax credit for making energy efficient home improvements is now 30% of the cost of the improvements, or a maximum amount of $1,500. Eligible improvements include energy efficient exterior doors and windows, insulation, heat pumps, furnaces, central air conditioners and water heaters.

6 Ingredients of Strong Housing Markets

2009-02-16T14:10:00.000-08:00

Luke Mullins wrote a great article below about buying in the "right" neighborhoods but I would like to add that buying in Arizona is an obvious plus because of our attractive Winter weather. Why not get the best of both worlds?

By Luke Mullins, US News

Feb 2009

Community elements essential to supporting favorable home prices over the long haul

With lower home prices and attractive mortgage rates, 2009 will present plenty of bargains for real estate shoppers. But as the historic bust continues, Americans everywhere are learning a painful lesson about home buying: property values don't always increase. As such, anyone looking to purchase a home this year should make sure they're buying into a community that can support long-term value. With the help of housing experts, U.S. News compiled a list of the top 6 ingredients of strong housing markets:

Please note that although the following factors will help support a home's value over the long term, they can't prevent short-term declines in a given market—especially in light of the ongoing real estate crash. "These would be forces that are going to impact [your home] over the next five to ten years, as opposed to next year," says Mike Larson of Weiss Research.

1. A well-groomed neighborhood: Well-maintained homes and landscaping have a positive effect on property values in that community, says Joshua Dorkin, founder and CEO of BiggerPockets.com, a real estate networking and information site. By caring for the appearance of their homes, residents help to create a more aesthetically-pleasing environment that future real-estate hunters will want to buy into. So when you're eyeing a home, make sure to take a drive through the entire neighborhood. Take note of how the neighbors care for their homes, lawns and gardens. "Run-down houses and abandoned cars are big red flags," Dorkin says.

2. Good schools: Given the importance of education, communities located within strong school districts tend to support higher home prices. Parents, after all, will want to move into the communities with the best educational opportunities. "The school district is important in terms of increasing demand for that particular area," says Richard Moody, chief economist at Mission Residential. Would-be home buyers can determine the strength of a local school system by accessing online information from local governments or community websites, Moody says.

3. Low Crime: Low crime rates also support strong home values. Since nobody wants to live in a neighborhood where they feel unsafe, crime limits housing demand in a given community. As a result, it's important to obtain crime statistics for the neighborhood you're considering moving into. The best way to do that, says Steve Dexter, a foreclosure expert and author of the book Beat the Banks, is to contact the local police department. "The police department is a public utility," Dexter says. "Most medium- to large-sized [communities] have a public information [officer] that is dedicated to interacting with the public." By contacting this office, home shoppers can get their hands on all the information they'll need to determine a community's level of safety.

4. Close to public transportation: Proximity to public transportation or commuter rails can also help boost home values, says Ron Phipps, a broker with Phipps Realty in Warwick, R.I. He argues that Americans are increasingly willing to pay a premium for properties that allow them to be less dependent on cars. "Access to bus lines and commuter rail lines is of huge value," Phipps says. "The price of fuel is going to go up again and a lot of my clients are saying, 'O.K., how do we position ourselves to minimize that impact?'" Phipps says.

5. Favorable population trends: It's also important to look at the population trends in the city you're considering moving to, Moody says. "You want to see a track record of steady population growth, which supports growing demand for housing, which will in turn support rising home values," Moody says. Such data can be found online at the U.S. Census Bureau, or though local county or township web sites, he says.

6. Healthy employment landscape: Employment plays a key role in population trends, as workers migrate to locations where they can find jobs. Thus, a healthy employment outlook is a key component of a strong housing market. "If you are in one of these upper Midwest cities and you've got layoffs, especially in a sector like automotives where the jobs are disappearing and they are not coming back, that is a huge problem," Larson says. Home shoppers can obtain economic data from the local government or chamber of commerce, Larson says. Pay special attention to the unemployment trends and find out if any new companies are slated to move into—or out of—the area. "A lot of communities have been trying to attract the sort of economically insensitive industries like biotech and [pharmaceutical companies]," Larson says. "If you've got an area where that kind of business is being brought in—through tax incentives or other efforts—that would be a positive for your local area."

Selling A Home Is Like Selling A Stock

2009-02-14T08:29:00.000-08:00

In today's market, if you sell your home, you will sell at tens of thousands below what you would have sold for 2 years ago. Yet many homeowners who bought during those years of price appreciation have earned positive equity in their home. Some homeowners who did not need to sell at the market peak, but need to sell now are remembering those peak prices and feeling that they are losing money by selling at today’s market-influenced prices.

One way to look at this is to compare a similar situation with another commodity. What if someone bought stock in a company at $70 per share and then watched it rise to $130 per share and then fall to $100 at the time they needed to sell it. Did that person lose $30 per share or gain $30? If they focus on the peak price, they lost an imaginary $30. However, since they paid only $70 and sold it at $100, they actually gained $30 per share, an excellent return. Today’s sellers need to see their situation in a similar light.

What about those sellers with negative equity – owing more than their property is worth? There are many reasons – refinancing or taking out a home equity loan on equity valued during the peak, or buying at the peak. If they don’t need to sell for a while, they know that commodities that go down will come up as real estate always has. If they do need to sell now, there are multiple ways to get to the settlement table with a buyer depending on the situation.

The ideal scenerio for a seller would be to rent out their current home if they can get a positive cash flow and purchase a foreclosure or pre-foreclosure. Buyer's are getting homes at fire sale prices and will profit nicely once the market turns around. Frank and I specialize in helping buyers find incredible deals in this volatile market. Please contact us an we can send you the latest foreclosure lists.

Arizona Sales Up As U.S. Home Values Fall

2009-02-12T20:46:00.000-08:00

Arizona sales up as U.S. home values fall
Thursday, February 12, 2009, 9:41am MST
Phoenix Business Journal - by Adam Kress

The National Association of Realtors reports a record drop in home values around the country, but home sales are up in Arizona.

Nationwide home prices fell 12.4 percent during 2008, according to NAR. That’s the largest yearly decline since the group began tracking the numbers in 1979. The median price for a U.S. home sold during the fourth quarter of 2008 fell to $180,100, down from $205,700 during the last quarter of 2007.

The vast majority of metropolitan areas -- 134 out of 153 -- recorded price declines compared with the last quarter of 2007.

Foreclosures and short sales accounted for 45 percent of all deals. That has driven sales volume up in states like Arizona, Nevada, Florida and California.

The largest sales gain in the fourth quarter from a year earlier was in Nevada, up 134 percent, followed by California at 84.7 percent, Arizona, up 42.6 percent, and Florida with a 12.5 percent increase.

“Once again, we see a pattern of strong sales gains, particularly in lower-price homes, in areas with price declines resulting from foreclosures,” said Lawrence Yun, NAR chief economist, in a statement.

Despite the record drop in home values last year, Yun said there is hope in the form of government help.

“Assuming housing provisions in the economic stimulus package are quickly enacted and provide enough encouragement for home buyers, we could see a quick lift in home sales for the critical spring home-buying season,” he said. “If that occurs, we could see home prices begin to stabilize in many metro areas later this year as supply and demand begin to return to balance, which would greatly benefit the overall economy,” Yun said.

Cape Coral-Ft. Myers, Fla., saw home prices fall nearly 51 percent for the year -- the steepest drop in the nation. The Beaumont-Port Arthur area of Texas saw median home prices increase almost 17 percent -- the highest increase in the nation.

$15,000 Tax Credit to Homebuyers!

2009-02-05T09:43:00.000-08:00

New Law could make it possible for buyers to pocket an additional $15,000 with the Home Buyer Tax Credit. Not only are buyers able to buy real estate at record low prices and get the lowest interest rates since the depression of 1929 but now they can make an additional $15,000 dollars by purchasing a home! Unbelievable!!

Below is a snipit from a Bloomberg article explaining some of the negotiations going on in Washington.

"Feb. 5 (Bloomberg) -- The U.S. Senate voted to cut taxes on homebuyers and weaken “Buy American” provisions in an economic stimulus package that tops $900 billion and could come to a vote as soon as today.

Lawmakers, aiming to boost the ailing housing industry, yesterday unanimously approved a Republican amendment that would temporarily offer home buyers a tax credit worth $15,000 or 10 percent of a home’s purchase price, whichever is less. The plan would cost $18 billion.

Senator Johnny Isakson, a Georgia Republican who sponsored the amendment, said it was critical to pulling the economy out of the worst recession in decades. “If we don’t fix housing first, it doesn’t matter what else we fix,” Isakson said."

While this is clearly GREAT news, my concern is that there are some of you that will wait for the approval of the credit with plans of pairing "savings" with the current low interest rates. I'm concerned because by the time this measure is fully passed and enacted the rate train may have left the station."

For anyone in a position to buy a home- there is no better time than right now!

If you'd love to purchase a new house but you're sitting on the fence, what exactly would it take to get you to buy?

2009-02-03T13:53:00.000-08:00

Nation's Housing

* What will it to take to get you to buy a house? 02.01.09
* Stimulus package gives credit to new home buyers 01.25.09
* FTC's warning to foreclosure fix-it firms 01.18.09
* New rules making appraisers angry 01.11.09

More Nation's Housing »

Mortgage rates lower than 5 percent? Smaller down payments? Below-market value pricing? Special amenity packages? Or a big tax credit?

What's the magic mix that will get you motivated? Or is it unlikely you'll get off the fence as long as you're worried about the economy and further drops in real estate values?

Questions like these are at the core of the housing industry's dilemma: Builders are stuck with bulging inventories of homes - most of them priced lower than six months or a year ago - that are still not selling. Strategies to bring buyers back into the market dominated the recent weeklong annual convention of the National Association of Home Builders. It was also the key subject of an eye-opening new consumer opinion survey conducted by the association's research subsidiary.

The study, conducted in early January, polled more than 700 self-described "on-the-fence" buyers, segmented to represent consumers in all areas of the country at varying price levels. Asked why they hadn't yet committed to a purchase, 44 percent said they're holding out for lower mortgage rates, 41 percent said they weren't sure they could qualify for financing and 38 percent said they expect to see lower house prices.

Concerns about falling property values were most prevalent among consumers in the Western region, while buyers in the Northeastern and Midwestern states were more likely to be waiting for lower interest rates. Buyers in the South tended to be more concerned about their ability to qualify for a new mortgage.

Researchers asked what individual enticements - financial or otherwise - would motivate them most to get past their worries and buy. Some of the results were surprising to builders at the convention session where the study was introduced. A few of the findings even appeared to conflict with the builders association's policy positions.

For example, although the association is vigorously lobbying the Obama administration and Congress for a 10 percent federal tax credit with a cap of $22,000 in the most expensive markets, the survey results suggested that a tax credit alone is not sufficient to motivate buyers to sign purchase contracts.

The study examined the effectiveness of a credit roughly the size the association is seeking from Congress, but it ranked sixth on a list of 10 features that would pull buyers off the fence - well behind mortgage and price concessions.

The mortgage rate that consumers said would be most effective in persuading them to buy now: a 30-year loan with a fixed 3 percent interest rate. Whether by coincidence or design, one of the country's largest home builders for high-end buyers, Toll Brothers Inc., announced a 3.99 percent 30-year fixed rate on new houses nationwide during the convention, through Jan. 25.

A 30-year fixed-rate loan at 3 percent was ranked twice as effective an enticement as a 3 percent loan fixed for five years, with an adjustment to 5 1/4 percent, fixed for the remainder of the loan term. Not surprisingly, at a time when Fannie Mae and Freddie Mac require substantial down payments for the best interest rates, the study found that a zero-down option would be highly attractive to potential buyers - more than twice as effective as 10 percent down.

Guarantees by builders that loan applications will be accepted if buyers verify their income and have a "fair" credit score ranked high in the survey. Such a guarantee was rated six times more effective than standard application procedures, where applicants can be rejected at the underwriting, appraisal review or other stages.

Price concessions also are compelling to would-be buyers. Most effective of all: a 10 percent discount below true market value - in other words, instant equity for the purchaser up-front.

Among other findings in the study that some builders found sobering: Their traditional approach of offering incentive packages of free upgrades and amenities may not be all that effective. The same may be true for heavily marketed green features - energy efficiency certifications and environmentally sensitive designs. If a new house comes with a green certification but costs $2,000 more than a standard model, this doesn't motivate shoppers to buy, researchers found. Even if the house is green-certified and costs the same as a standard house, that alone won't do the trick.

Bottom line: Look for builders to offer combination packages of special financing, price concessions, lower down payments and perhaps application guarantees. They'll still push for tax credits on Capitol Hill, but financing concessions appear to have more clout with their potential customers.

This article appeared on page N - 3 of the San Francisco Chronicle

2009-01-28T13:00:00.000-08:00

HAS THE HOUSING MARKET REALLY HIT BOTTOM?

We keep hearing how the housing market took the economy down, now we are finally seeing some positive numbers showing that the housing market is improving nationally- but especially in the Western States!!

Finally, Positive News For Arizona Home Sellers!

As you can see from this chart, existing home sales in December shot to the upside. In fact, compared to November, home sales were up 4% in the Midwest, 7.4% in the South and up to 13.6% in the West. Although the Northeast took a bit of a hit, overall home sales in the U.S. rose a full 6.5%!

Great news for sellers because rising home sales mean that buyers are coming back into the market! One of the biggest investments out there for most people is finally showing signs of health. This spurs the banking business, contractor activity and a boost in tons of home-related products and services... and the news gets even better.

The latest report from the National Association of Realtors also shows that the supply of existing homes is falling. With about 3.7 million units on hand, current existing home inventory amounts to 9.3 months of supply. That's the lowest supply level in a year and is significantly off last year's high of 11.2 months booked in April.

Why are we seeing such a big change? Tumbling home prices. In fact, during December the average home in the United States averaged $175,400, down 15% from the year-ago period's $207,000. And while that's painful for home sellers, it's also the sign of a sector beginning to shift in the right direction.

Fed Cuts Rate to Zero-0.25%

2008-12-16T16:26:00.000-08:00

By Scott Lanman and Craig Torres

Dec. 16 (Bloomberg) -- The Federal Reserve cut the main U.S. interest rate to "a target range" of between zero and 0.25 percent and said it will do whatever is needed to end the longest recession in a quarter-century and revive credit.

The Fed "will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability," the Federal Open Market Committee said today in a statement in Washington. "Weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time."

Treasury notes rallied in anticipation the Fed will buy the securities to force borrowing costs for consumers and companies lower. Nine rate cuts in the prior 14 months and $1.4 trillion in emergency lending have failed to reverse the economic downturn.

"The focus of the committee's policy going forward will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve's balance sheet at a high level," the FOMC said.

The statement noted that the Fed has already announced it will purchase agency debt and mortgage-backed securities, and said the Fed is ready to expand the program. The central bank said it continues to weigh the potential benefits of buying longer-term Treasury securities.

Printing Money

"The Fed is sending a message that it will print money to an unlimited extent until it starts to see the economy expanding," William Poole, former president of the St. Louis Fed and now a senior fellow at the Cato Institute in Washington, said in an interview with Bloomberg Television. Poole is also a contributor to Bloomberg News.

The deepening economic slump pushed unemployment to 6.7 percent last month, the highest level since 1993, while builders broke ground on the fewest new homes since record-keeping began in 1947. Deflation is also emerging as a risk: consumer prices fell the most on record in November, the Labor Department said earlier today.

The vote was unanimous. In a related move, the Fed lowered the rate on direct loans to banks and securities dealers to 0.5 percent.

The Fed twice pared the federal funds rate, or overnight lending rate, to 1 percent since adopting it as the main tool of monetary policy in the late 1980s. The 1 percent rate held from June 2003 to June 2004. The Fed staged a half-point reduction to 1 percent on Oct. 29.

Japanese Experience

The Bank of Japan has been the only major central bank in modern times to mix a policy of steep rate reductions with quantitative easing, or the strategy of injecting more reserves into the banking system than needed to keep the target interest rate at zero.

Japan's central bank kept its main rate at zero from 2001 to 2006 while flooding the banking system with extra cash to encourage lending, spur growth and overcome deflation. The abundant funds failed to prompt lending by commercial banks, which expanded their reserves at the central bank almost nine times by early 2004.

Bernanke, acting with New York Fed President Timothy Geithner, has set up emergency loan programs aimed at averting a collapse of the nation's credit markets. Geithner is President- elect Barack Obama's pick for Treasury secretary and didn't attend today's meeting.

The Fed has enlarged bank reserves, supported issuance of commercial paper and provided liquidity to government bond dealers. It is also swapping dollars with the European Central Bank and its other counterparts to supply banks in other countries.

Swelled Balance Sheet

The moves have swelled the Fed's balance sheet to $2.26 trillion from $868 billion in July 2007. That's in addition to the $700 billion Troubled Asset Relief Program, which the U.S. Treasury has used since October to channel about $335 billion of capital injections into banks and other financial companies.

Still, the economy has crumbled, with employers cutting 533,000 jobs from payrolls in November for a total loss this year of 1.9 million, which more than erases the 2007 gain of 1.1 million.

Credit remains scarce in many markets and major financial institutions worldwide continue to report losses and writedowns totaling $994 billion.

Shrinking Economy

Macroeconomic Advisers LLC, a St. Louis-based consultant, says the economy is probably shrinking at a 6.5 percent annual pace this quarter, which would be the biggest drop since 1980.

The firm forecasts a 4.2 percent annual contraction rate in the first quarter, returning to no growth in the second quarter and a 2.3 percent expansion rate in the second half of 2009.

Early this month, as a panel of leading U.S. economists declared the recession began in December 2007, Bernanke signaled he was ready to dig deeper into the central bank's toolkit. He said he may use less conventional policies, such as buying Treasury securities, because his room to lower the main U.S. rate from the current 1 percent level was "obviously limited."

Obama said at a press conference today that he won't "second-guess" the Fed, adding that with "traditional ammunition" running low, "it is critical that the other branches of government step up." Obama has called for a stimulus package including spending to rebuild U.S. roads, bridges and other infrastructure.

The federal funds target rate has weakened as a monetary policy tool because the Fed's flood of funds has caused the average daily rate to trade below the policy goal every day since Oct. 10.

The gap between the target and the effective rate, or average daily market rate, has averaged about a half point since Sept. 12. The gap averaged just above zero from the start of this year through Sept. 2.

Lower Rates

The central bank is trying to lower mortgage rates by purchasing up to $100 billion of debt issued by housing-finance providers Fannie Mae and Freddie Mac and $500 billion of mortgage-backed securities guaranteed by the companies.

The Fed's counterparts around the world have staged their own interest-rate cuts. The ECB has lowered its main rate to 2.5 percent this month from 4.25 percent in July, while the Bank of England reduced its rate to 2 percent this month from 5.75 percent in July.

ECB President Jean-Claude Trichet said yesterday there's a limit to how far the bank can cut interest rates and signaled policy makers may pause in January. "Do we have a feeling there is a limit to the decrease in rates? At this stage certainly yes," Trichet told journalists in Frankfurt.

While the Fed can't push interest rates below zero, "the second arrow in the Federal Reserve's quiver -- the provision of liquidity -- remains effective," Bernanke said in a Dec. 1 speech.

Exclusive Val Vista Lakes Virtual Tour

2008-09-23T11:48:00.000-07:00

Exclusive Val Vista Lakes Virtual Tour

N.C. lawmakers weigh in on financial crisis

2008-09-23T10:57:00.000-07:00

N.C. lawmakers weigh in on financial crisis

A Good First Impression Can Help Sell Your Home

2008-09-23T10:28:00.000-07:00

A Good First Impression Can Help Sell Your Home

Your major role as a seller will be to make your home as attractive as possible to potential buyers. The time, effort and limited financial investment involved can give you the competitive edge needed to sell your home when you want- at the price you want.

Your Home’s Exterior Creates The Prospective Buyer’s First Impression

Since the prospective buyer sees the exterior of your home first- it is worth spending a little time and effort to make sure that a good first impression is made.

Here is a recommended checklist:

__ Lawn is well cut and neatly trimmed around the walks and drive.

__ Flower garden is weeded.

__ Shrubs are trimmed and dead trees and branches eliminated.

__ All debris is disposed of and toys and lawn equipment are neatly stored.

__ Fences and gates are repaired and repainted, if necessary.

__ The roof, gutters and downspout are in good repair.

__ Driveways and sidewalks are washed down and checked for cracking and crumbling.

__ Cracked windows and torn screens are replaced. Screens, windows and window sills

are washed. Doorknobs are polished.

__ Doorbell and front lights are in good working order.

If you were planning on painting your home within the next year- it is a good idea to go ahead and paint before showing it. A new paint job, well done, will normally enhance the sale value a good deal more than the cost of the paint.

If your home’s exterior looks clean, orderly and in good repair, that’s the impression your house will first convey.

Pam Stevenson, ABR, GRI, CRS is a Realtor for Liberty Properties Real Estate Services Professionals. She received her real estate licence in 1988 and has written several real estate publications for different newspapers.

How Do You Make Big Money in Real Estate Today?

2007-10-16T20:23:00.000-07:00

As we have heard all over the media, the real estate market is down in most areas and so many investors are going after the distressed foreclosure properties in their local markets. There are many good deals on the horizon for the savvy investor but there is another market that is even more lucrative in the short run.

There are investment groups that cater to the investors that don't want to buy distressed properties, rent them out until who knows when the market gets better, paying thousands of dollars in mortgage payments patiently waiting for the profits.

The place to make the big profits is to follow the baby boomers. The vacation markets and second home buyer markets are thriving . Baby boomers just started retiring in 2007 and have another 18 years to jump in the arena. Contact me for information on how to join the groups that are offering amazing deals. For example, In one resort town in America, a developer is offering condo's for sale. The investor does not close on the property until the condo's are completed toward the year 2008. Once the property is purchased, the developer hires a leasing company to rent out the units until 2015 creating a $20,000 per year guaranteed positive cash flow until 2015. Just think, if you purchase 3 units, you have a $60,000 guaranteed cash flow until 2015 and then you can hold onto the unit or sell it.

Please contact me at my toll free number 1-800-672-2165 if you would like to know more about this opportunity or any other great real estate deals.