This was earlier this week on Inman’s website:
“Nearly half of the 1.3 million homeowners who have accepted loan modifications under the Home Affordable Modification Program have washed out of the program, according to the latest report from the Treasury Department. At the end of July, there were 421,804 homeowners enrolled in permanent HAMP loan modifications, and another 255,934 borrowers in active trial loan modifications.All told, a total of 677,738 homeowners were in permanent or trial HAMP modifications. But almost as many borrowers had already washed out of the program — 629,751.
Many analysts expect that more than half of HAMP loan mods will end up redefaulting. With fewer homeowners entering the HAMP pipeline — only 24,577 new trial modifications were reported in July — it’s considered unlikely that the program will meet its initial goal of helping up to 3 million borrowers avoid foreclosure.
In releasing its “Housing Scorecard” for August, the Obama administration nevertheless offered a positive outlook on the overall housing picture, saying the HAMP program represented “just one, targeted piece of the administration’s larger efforts on housing.”
From April 2009 through the end of June 2010, the Federal Housing Administration (FHA) has also entered into 472,000 loss mitigation and early delinquency interventions, and loan servicers modified 1.4 million mortgages outside of the HAMP process, the scorecard noted.
The 3.15 million mortgages modifications started during the period was more than double the 1.24 million completed foreclosures.”
Time will tell, right now I see longer times with the trial payments. It is of utmost importance to keep your trial payment, you miss one, you are out.
When BofA started with their loan modifications 2 years ago, they had an 80% default rate. As it looks right now, the default rate will stay high, around 50%. On the bright side, the other 50% is able to stay in their house and they would have lost their house otherwise.
Usually when I sit down with my clients I can pretty much tell whether a loan modification is doable or just an extension in staying in the house. For some people, going through the loan modification process means that they can stay longer in their house and that was what they wanted. As a whole I see that as part of a ’strategic short sale’. My website has a link with more information about short sales.
Have a great day!
Mirjam
With all the focus in the news about Short Sales, foreclosures, bankruptcy, it might feel that these are the only properties out there.
Just sharing with you the local sales numbers in Sonoma County as of 5 minutes ago, all the properties that sold since January 1, 2010:
Total sold properties: 3131. Of these, 1538 were either foreclosure of shortsale. Bottom line, this year so far 50% of all the sales were distressed sales. This is not saying anything about the future but just the plain numbers as of the moment I am writing this.
With the current interest rates at a historic low, the numbers mean that it is a great time to sell property and a great time to buy property.
On a side note: despite what you might think: foreclosures are not always the best deal in town.
Have a great day, enjoy this sunny afternoon!
Mirjam on August 14th 2010 in Short Sale, Foreclosure, Sellers, Buyers
Alex Charfen made a great blog posting this morning.Everyone keeps talking about strategic foreclosures… I don’t think there is anything strategic about a foreclosure, you just let it happen. Some articles mention that it takes 3 years to be foreclosed on… yes, in some states, not in CA. Our official time line for the foreclosure process is 3 months and 3 weeks. First the notice of default, then after minimal 3 months the notice of trustee sale which will take place 3 weeks after that.Of course with the overload, it takes the banks longer to take action. I know quite a few homeowners living in their home without paying their mortgage, some for a long time now. Must feel strange… However, the bank will take action. A more dignified option to foreclosure is a short sale. The Making Home Affordable program has forced banks to accept short sales.And… even better, plan your short sale. As mentioned, the foreclosure process takes time and there is plenty of time to strategically plan your short sale. The million plus market has the highest deficiency rate: 1 in 7 is 30 days or more late on their mortgage.For those who for some reason might have some savings set aside: retirement accounts are not affected by a short sale. You might allocate some savings to a retirement account.An other benefit from a short sale: you can negotiate the deficiency judgement, this is lot harder with a foreclosure.Have a great day!Mirjam
Jamie Lee More wrote a great blog today. Should a home owner who is underwater on their house walk away/do a strategic foreclosure. This means a homeowners is able to keep up their payments however doesn’t want to because their house is worth less than what they own on it. Apparently it is becoming a trend, and interesting one.Interestingly historically homeowners who bought their house for say $150,000 and sold it 10 years later for $450,000 did not offer the bank to share that equity. Now because it is the other way around, all of a sudden the bank has to share a loss, not because homeowners need to sell but because they feel it wrong to live in a house that has lost so much value.I know the current mortgage crisis has many different faces. One would say that the value of a house only matters when you buy and when you sell. So bottomline this would mean that the value if a house while you live in it and are not planning to move is irrelevant.What do you think? Is walking away from a legally binding financial obligation the right thing to do?By the way, home owners who are not able to make their mortgage payments and need to sell have great alternatives, HAMP, HARP, HAFA are options mentioned in the Making Home Affordable program. As CDPE certified Realtor I am also available to discuss your options.Don’t forget to smell the roses outside,Mirjam
Just wanted to share this information… great info for buyers!
Fannie Mae and Freddie Mac are offering financing incentives for buyers of foreclosed homes owned by Fannie and Freddie. Home buyers have until Oct. 30 to apply for Freddie Mac’s SmartBuy program, which started in July, and offers up to 3.5 percent of a home’s sale price to help cover closing costs.
To qualify, the home must be a principal residence and must be selected from Freddie Mac’s HomeSteps Web site (www.homesteps.com/homeshoppers.htm) for its foreclosed properties. Loans must close by year’s end. The HomeSteps properties also include two-year warranties on major appliances and electrical, plumbing, and air-conditioning and heating systems.
Fannie Mae’s HomePath program (www.homepath.com) is an ongoing program and offers more incentives than Freddie Mac’s. Through participating lenders, Fannie will offer mortgages to buyers who make a down payment of 3 percent. The buyers do not have to secure private mortgage insurance, a common practice with nearly all lenders. Home buyers also can negotiate for Fannie Mae to offer closing-cost assistance. Unlike Freddie Mac’s program, Fannie’s assistance level is not capped. Under the HomePath program, the average participating homeowner has received payments equivalent to 3.75 percent of the loan’s value.
The homepath program is also a good option for investors to consider.No matter what the media tells us, today is a great time to buy property in Sonoma County!
This came in my email news feed today:
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®
The State Bar of California has recently launched numerous investigations against attorneys for misconduct related to loan modifications. In a rare move, the State Bar has released the names of 16 attorneys under investigation, by opting to waive investigation confidentiality in favor of public protection. These attorneys have allegedly taken fees for promised services, but failed to perform those services or even communicate with their clients who face the possible loss of their homes. Their non-attorney staff may also be under investigation for unlawfully practicing law.
Not all attorneys engaged in loan modifications are unscrupulous. However, this announcement from the State Bar serves as a good reminder for REALTORS® and their clients to be careful when dealing with attorneys and others for loan modifications. Scam artists may intentionally associate or affiliate themselves with attorneys in an attempt to lend credence to their fraudulent schemes. The list of attorneys currently under investigation is available at http://calbar.ca.gov/state/calbar/calbar_generic.jsp?cid=10144&n=96395.
Your Realtor will be a great source of information and help to look at your options. Recently I finished the CPDE training: a training for Realtors to help distressed homeowners with options to avoid foreclosure. Foreclosure has serious consequences and for some it might mean not only loosing a home but also loosing a job… There are many options out there, contact your Realtor for help.
Have a great day!
Mirjam
Yesterday we received a ‘Red Alert’ email from our local MLS board about the Rental Scam on Listed properties. The PressDemocrat had an interesting article about the subject earlier this week.
There is a rental scam taking place in which listed properties are advertised on Craigslist and other online classified services for rent, when the property is not for rent at all. The ads run for a very brief period of time.
How can you protect your listings from being a part of the scam?
Some brokers have removed the address of their listings on the internet. While this hides the address from the scammers, both the buying public and the seller could be disadvantaged.
Monitor classified advertising internet sites like Craigslist to watch for ads using your listing information “for rent”.
Put a “NOT FOR RENT” rider on your signs.
The FBI’s guidelines for the general public to avoid being victimized.
- Only deal with landlords or renters who are local.
- Be suspicious if you’re asked to only use a wire transfer service.
- Beware of e-mail correspondence from the “landlord” that’s written in poor or broken English.
- Research the average rental rates in that area and be suspicious if the rate is significantly lower.
- Don’t give out personal information, like social security, bank account, or credit card numbers.
Should you have your property listed, please follow the advise your Realtor gives you. He/She is made aware of the problem and knows how to handle this. So far we do not know of people being victimized in Sonoma County and right now it is a major nuisance.
Enjoy the rest of this wonderful weekend, it’s a bit breezy still sunny and warm.
Mirjam
With so much said in the news about foreclosures and short sales just some facts.
At this moment the bank owned properties are selling well, the lower price range of our market is selling, some bank owned properties were priced so low that they had more than 20 offers on them and I know of one property ( NW Santa Rosa) that went into escrow $100,000 over asking. It will be interesting to see the numbers when these transactions close.
Financial Title did sent me enclosed stat, an overview of the sub prime ARM’s that will mature the coming months/are maturing now. Sorry to say that quite a bit of these will end up as foreclosure. Banks are only interested to sell these properties as fast as they can.
While you have to be careful buying these (use a good Realtor), they are excellent opportunities for investors and buyers. Should you like to be on my ‘opportunities watch list’, just send me and email with your contact info so I can set you up. By the way, not only bank owned properties are great deals, sometimes a regular sale might be a better deal.
We are going to have a wonderful weekend, great for touring around Sonoma County an enjoy some wines. I did meet Pat Maier at the Chamber Expo this week, she was pouring an excellent 2005 Cabernet. Check out their website, you have to make an appointment to taste their wines, they are also available at some great restaurants in town (one was Willi’s Wine bar in Larkfield).
Have a wonderful weekend!
Mirjam (mirjam@C21alliance.com)
Yesterday we had what most likely will be the last in a series of the Smart Home Choices Workshop. It was a great success, I counted about 80 home owners and great feedback.
It was great to see that banks have ramped up their assistance for troubled homeowners but it was clear that if you need help from your lender you do need to do a lot of homework -> banks are not social security. Should you like a copy of the handouts given, please let me know.
Data from Harvard University’s Joint Center of Housing Studies illustrate not only that the median net wealth of homeowners is 34 times greater than that of renters, but also that over half of that wealth is generated from home equity.
The website Housing Markets Facts mentions :The Department of Commerce reports that between 1995 and 2004, the average renter accumulated a little over $4,000 in net worth. The average homeowner accumulated $184,400. That translates into $180,000 more, or $1,500 per month. In other words, each month that the average first-time buyer continues to rent, it costs them $1,500 in lost wealth accumulation. Furthermore, renters are subject to rent increases as well as higher tax rates because they cannot take a mortgage deduction.
So no matter how difficult it is: if you can, hold on to your house.
Have a great day!
Mirjam de Rijk
On the bottom of this page (scroll down) you will find the announcement for the Smart Home Choices Workshop. If you are interested in real estate and want to know more about the financial aspect, you are cordially invited to come. The program is going to be great! You can register online.
Somewhere I read the 70% of all the people that went into foreclosure never talked to their lender to see whether they could arrange a solution. It’s the fear, the shame, name it. Whatever it is, I think it’s also because of lack of knowledge. - The Smart Home Choices Seminar will be educational! However, there is a company that is there to help home owners to keep their homes. Lowering the interest rates is not the only solution.
This company is called HOPE, it stands for Homeownership Preservation. It’s good to know about companies like these. In our area, Redwood Credit Union will alway refer you to HOPE.
Foreclosure is not a good solution, it’s the last solution. There are many alternatives that should be tried first.
Of course, should you have any questions, don’t hesitate to contact Denise or me.
Have a great day!
Mirjam