FHA Trims Waiting Period for Borrowers Who Experienced Foreclosure

By: Esther Cho, DSNews.com

The Federal Housing Administration (FHA) is allowing borrowers who went through a bankruptcy, foreclosure, deed-in-lieu, or short sale to reenter the market in as little as 12 months, according to a mortgage letter released Friday.

Borrowers who experienced a foreclosure must wait at least three years before getting a chance to get approved for an FHA loan, but with the new guideline, certain borrowers who lost their home as a result of an economic hardship may be considered even earlier.

For borrowers who went through a recession-related financial event, FHA stated it realizes “their credit histories may not fully reflect their true ability or propensity to repay a mortgage.”

Read More . . .

California's Foreclosure Inventory Continues to Dry Up

By: Esther Cho, DSNews.com

Foreclosure inventory in California continued its steady decline in November, according to data from ForeclosureRadar.

The total number of preforeclosures, foreclosures scheduled for sale, and REOs fell 7.6 percent from October to November and declined by 31.8 percent from a year ago.

ForeclosureRadar said, “the significant decline in foreclosure inventory over the past year has contributed to what some are calling an ‘inventory crisis’ of total homes for sale.”

The company attributes foreclosure cancellations as part of the reason for the decline.

Cancellations rose 4.7 percent from October and spiked 69.9 percent in the past two months. Compared to last year, cancellations are up 34.7 percent.

ForeclosureRadar believes short sales and successful modifications are likely leading to cancellations rather than statutory time frames or filing errors.

Foreclosure starts and sales were also down in California. Starts fell by 19.9 percent month-over-month, and foreclosure sales decreased by 14.8 percent from October.

The company also tracks foreclosure activity in four other states located west: Arizona, Nevada, Oregon, and Washington.

Most states also experienced monthly declines in foreclosure starts and sales. In Arizona, foreclosure starts fell month-over-month by 23.5 percent, and sales were down by 16.8 percent.

Nevada experienced a 19 percent drop in foreclosure starts and 9.8 percent decline in foreclosure sales.

While Oregon experienced the biggest drop in terms of percentage, a closer look at the numbers explains the dramatic declines. In Oregon, foreclosure starts fell by 45.9 percent, but the actual number of foreclosures went from 85 to 46. In California, foreclosure starts totaled 11,533 in November after dropping from 14,398 the month before.

Foreclosure sales in Oregon decreased by 36.7 percent, but were reduced to 112, a small number compared to sales in California, which totaled 7,494.

In Washington, foreclosure starts fell by 2.9 percent, but sales increased by 81.8 percent to 1,367.

A Stronger Year for Short-sales Forecasted for 2013

More banks are using short-sales as their prevalent loss mitigation tool to keep houses from going into foreclosure. The ratings agency, DBRS, is hoping that short-sales will be an effective tool for curbing the shadow inventory backlog of bank held properties.

To find out more read the article at DSNews.com . . .

New Realty TV Show Focuses on Foreclosures

By: Tory Barringer - DSNews.com

It’s a short jump from “realty” to “reality.”

Next 1 Interactive, Inc., a media company focused on travel and real estate, announced Tuesday that the pilot episode of a new home improvement reality show focused on foreclosure renovation saw some success in a test market in New York.

The show, titled “Foreclosure 2 Fabulous,” follows host Patrick Colville and his family and friends as they help participants buy, renovate, and refurnish foreclosed vacation properties within a five-day period. The program is designed to show participants and viewers how they can “own and enjoy their own little piece of paradise.”

The pilot episode was aired as a test in the New York area to a potential viewing audience of 700,000 over the last two weeks. As a result of the airings, Next 1 reports receiving hundreds of inquiries from people wanting to purchase foreclosed properties.

The first 13-episode season of “Foreclosure 2 Fabulous” is set to launch in October, with a broadcasting audience of approximately 100 million households across the country. The show’s website will also feature live streaming episodes.

Next 1 Realty, a subsidiary of Next 1 Interactive, is the real estate agent of record and will handle all leads for real estate and foreclosure transactions and referrals stemming from the show’s airings. Viewers will be able to access a list of home inventory through a section of Next 1 Realty’s website.

Bill Kerby, CEO of Next 1 Interactive, said he expects the “Foreclosure 2 Fabulous” will motivate viewers to participant in the recovering market, especially in the hard-hit states where Colville plans to focus his efforts.

“‘Foreclosure 2 Fabulous’ provides the entertainment value desired by viewers that can cause the necessary interest in real estate transactions. The possibilities continue to expand as Next 1 Realty advances in exposing video on demand to viewers in unique ways,” Kerby said.

Top 10 Cities to buy Foreclosures: RealtyTrac

With foreclosure starts up in the second quarter of 2012, RealtyTrac listed the top 10 metros to buy or invest in foreclosures for the remainder of 2012.

Overall, 132 out of 212 metropolitan areas with a population of 200,000 or more posted increases in foreclosure starts from the previous quarter, according to RealtyTrac. The bump in starts marks a 60 percent gain and means more foreclosure inventory for those markets.

RealtyTrac’s list includes metros where the average foreclosure sales price is increasing on an annual basis, average foreclosure sale discounts are still 15 percent or higher, and the unsold inventory of REOs represents a supply of 20 months or fewer.

Top 10 Places to Buy Foreclosures (FC)

1. Durham, North Carolina
Increase in FC starts from Q1 2012 – 62%
Ave. FC sales price – $154,951
FC discount in Q1 2012 – 25%
FC sales price increase from Q1 2011 – 19%

2. Springfield, Massachusetts
Increase in FC starts from Q1 2012 – 60%
Ave. FC sales price – $99,293
FC discount in Q1 2012 – 47%
FC sales price increase from Q1 2011 – 12%

3. Olympia, Washington
Increase in FC starts from Q1 2012 – 59%
Ave. FC sales price – $183,806
FC discount in Q1 2012 – 16%
FC sales price increase from Q1 2011 – 10%

4. Boston, Massachusetts
Increase in FC starts from Q1 2012 – 52%
Ave. FC sales price – $204,702
FC discount in Q1 2012 – 45%
FC sales price increase from Q1 2011 – 7%

5. Providence, Rhode Island
Increase in FC starts from Q1 2012 – 43%
Ave. FC sales price – $136,901
FC discount in Q1 2012 – 36%
FC sales price increase from Q1 2011 – 7%

6. Worcester, Massachusetts
Increase in FC starts from Q1 2012 – 39%
Ave. FC sales price – $138,911
FC discount in Q1 2012 – 38%
FC sales price increase from Q1 2011 – 13%

7. Montgomery, Alabama
Increase in FC starts from Q1 2012 – 37%
Ave. FC sales price – $95,092
FC discount in Q1 2012 – 35%
FC sales price increase from Q1 2011 – 11%

8. Cleveland, Ohio
Increase in FC starts from Q1 2012 – 34%
Ave. FC sales price – $69,468
FC discount in Q1 2012 – 37%
FC sales price increase from Q1 2011 – 9%

9. San Luis Obispo, California
Increase in FC starts from Q1 2012 – 8%
Ave. FC sales price – $322,812
FC discount in Q1 2012 – 23%
FC sales price increase from Q1 2011 – 6%

10. Phoenix, Arizona
Increase in FC starts from Q1 2012 – 8%
Ave. FC sales price – $130,763
FC discount in Q1 2012 – 22%
FC sales price increase from Q1 2011 – 7%

By: Esther Cho

Looking to Refinance? Look into a HARP refinance for mortgages owned by Fannie Mae or Freddie Mac. Even if you're underwater, there's help.

FHA 203(k) Program Offers Way to Finance Repairs for Foreclosures

Purchasing foreclosures also means discounts, but with the markdown is the price of repairs. According to RealtyTrac, foreclosures or REOs sold at an average discount of 27 percent compared to non-distressed properties in the first quarter of 2012. Through an FHA 203(k) loan, potential buyers who want to purchase a discounted foreclosure but don’t have cash for the repairs may find a way to receive financing.
According to HUD, the 203(k) program is the department’s main program for rehabilitating and repairing single family properties, and it’s viewed as an important tool to revitalize neighborhoods.

In order to be eligible, the property must be purchased as a primary residence or it can be for a HUD approved nonprofit. Also, the property must be a one-to four-family residence that has been completed for at least one year.

Dan Green, loan officer with Waterstone Mortgage and author of themortgagereports.com, explained that FHA 203(k) program can be used on any 1-4 unit residential property, and is not limited to just HUD properties or foreclosures.

The maximum amount that can be taken out for the property is based on the value or the purchase price of the property before rehabilitation (whichever is less), plus the estimated cost of rehabilitation or 110 percent of the property after improvements, according to HUD.

A down payment is required, and the minimal amount for a down payment is 3.5 percent of the accepted bid price plus the cost of financing additional repairs.

Since there is more “file” to underwrite for an FHA 203(k) loan, Green said the approval process takes longer than a standard FHA mortgage.

“FHA 203k approvals take more time, but are no more difficult than any other mortgage type,” said Green. “Borrowers should expect to provide the documentation required, and should respond to loan officer requests in a timely manner."

By: Esther Cho

Market News Update - Incredibly Low Mortgage Rates!

Imagine walking into a room full of all your bosses and announcing that you just lost 2 billion dollars for the company and it was all because of taking financial risks that you had no busy taking….CEO Jamie Dimon of J.P. Morgan Chase announced on Thursday that the company lost this extraordinary amount of money because there Chief Investment Officer Ina Drew took “flawed positions” on certain investments.  Simply put, Drew bet on things that the company had no business betting on. Additionally, there are expectations that another 1 billion will be lost in the next quarter.

The biggest irony of the story is that J.P. Morgan Chase is one of the companies lobbying to have a federal law loosened that bans these types of companies from  making bets with their own money.  Mr. Dimon, when my child used to come home later than he was supposed to, he would then argue that he needed to be allowed to come home later.  However since he couldn’t follow the first rule, why in the world would I give him even more freedom?  (Good luck getting the Fed’s to allow you to “lose”, I mean” bet” even more money).

Mortgage rates continue to remain at record lows and buyers seem to be responding to it.  The Mortgage Bankers Association reported this week a nice increase of 3.4% in purchase activity.  Refinances increased a smaller 1.3%.

Sentiment in many real estate markets around the country is that the combination of low home prices with incredibly affordable mortgage rates is making the time perfect to act on purchasing.  In addition, many markets around the country are beginning to see housing inventories drop which is creating upward pressure on home prices in certain areas.  Ever since the banks had to revamp their foreclosure practices, the amount of foreclosed homes coming on the market has dropped significantly which can further impact home prices: Less inventory creates more demand.

The stock market has been taking it hard this week in that many investors are becoming more concerned about more financial trouble in Europe.  The stock averages have been declining throughout the week, however the losses have not been overwhelming, indicating that although there is concern, panic has not set in.

Gas prices have dropped approximately 20 cents in the last 30 days giving drivers a reprieve at the pumps.  What is exceptionally gratifying is that typically gas prices will peak in late May just as the country is heading into the summer driving season.

Inflation on the wholesale level remained unchanged this past month indicating that inflation remains completely in control.  The financial uncertainty in Europe combined with concerns about corporate profits here in the U.S. continue to keep many investors on the sidelines and others putting their money into government bonds which is what is keeping mortgage rates amazingly low.

This week was a quiet week for economic data.  Next week we may see more volatility as we begin to receive the first of many housing reports to be released in the next week and a half.  I have predicted in the past that we would see housing numbers improve; however, I am giving up my predictions for the time being.  Simple reason is because my predictions have not been all that accurate, and I can find so many other ways to embarrass myself, I don’t need to do it by making bad predictions or bets.  (Hmm, maybe there is a job opening at J.P. Morgan chase for me).

Reports for next week are:

• Tuesday May 15^th – Consumer Price Index and Retail Sales
• Wednesday May 16^th  - MBA Applications, Housing Starts, Industrial Production and FOMC Minutes
• Thursday May 10^th - First Time Jobless Claims

Call Me Today for More Information About:

·         Purchasing w/Low Down

·         FHA Loans

·         VA Loans

·         USDA 100% Financing

·         203k Rehabilitation Loans

·         Fannie Mae Homepath

·         Refinancing for: Cash Out, Debt Consolidation, Remodeling, etc.

·         Reverse Mortgages for Seniors

·         Home Equity Line of Credit

·         Construction Loans

·         Commercial Property Loan

I appreciate your business! Have a great day!!!

Sincerely,

Cindy Tomlinson
Loan Officer

USLending Company

DRE Lic # 01520422
NMLS # 214851   

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