US Government to Expand and Extend Foreclosure Program

According to CNBC report, the Obama administration will expand its signature foreclosure-prevention program to try to help with heavy debt home owners avoid losing their homes. Home owners can have more time to seek a mortgage modification under the Home Affordable Modification Program or HAMP.

The Treasury Department has announced last January 27, Friday, that the Home Affordable Modification Program (HAMP) will also be extended through 2013. The program was initially set to expire by the end of 2012. The following changes are to take effect too:

- Treasury will triple the incentives it pays to private lenders. They'll be reimbursed from 18% - 63% of the amount they take off the mortgage principal.

- Currently, Fannie Mae and Freddie Mac do not offer principal reduction plans as part of their HAMP modifications. To encourage the assistance, Treasury said it will pay the same principal reduction incentives to Fannie Mae or Freddie Mac if they allow servicers to forgive principal reduction in conjunction with a HAMP modification.

- Modification guidelines will be relaxed to take into account debt such as medical bills and home equity loans.

- Houses occupied by renters will also be eligible for HAMP modification.

No new funds are allocated for HAMP's expansion, since less than $10B of the $29B of the program has been spent so far. If you need more information on Home Affordable Modification Program or HAMP, please don't hesitate to contact me.

Freddie Mac Now Extends Up To 12 Months Forbearance To Unemployed Borrowers

According to Bloomberg report, to help unemployed borrowers keep their homes, Freddie Mac has announced on 6th of January that it is giving mortgage servicers authority to give unemployed borrowers with Freddie Mac owned or guaranteed mortgages six month of forbearance without prior approval from the giant mortgage lender. And an additional up to six months, or a full year, with Freddie mac's prior approval.

Previously, Freddie mac allowed servicers to grant only up to three months of forbearance with no payment and without prior approval, or six months at a reduced payment with prior approval. And the only reasons acceptable for the longer forbearance are natural disasters, permanent disability or long-term medical emergencies.

Under the new Freddie Mac's deal, delinquent borrowers in an existing short term forbearance plan can be considered for an extended forbearance under the new policy. According to the latest statistics, nearly 10% of delinquencies of Freddie Mac mortgages were tied to unemployment.

The new forbearance relief options were designed to effectively assist struggling borrowers through a period of unemployment, giving them more time to get back on their feet without worrying about losing their homes. 

The expanded forbearance is set to take effect on February 1, 2012.

New Administration Plan to Save the Housing Market

According to CNBC Report, the Obama administration, together with federal regulators led by Fannie Mae and Freddie Mac is planning to announce a pilot program to sell government-owned foreclosures in bulk to investors who intend to use them as rental properties, according to administration officials. The goal of the program is to reduce supply by converting foreclosed homes into rental units. "Less supply - even less fear about a flood of foreclosed homes hitting the market could stabilize home prices", according to Jaret Seiberg of Guggenheim Securities.

The government is still working on what the pricing would be, how they can partner with private investors, and who will be managing the properties.

There are a number of institutional investors who have already shown their interest in bulk REO deals.  However, the new plan has to incorporate ways to help facilitate financing.

"Larger investors want to put their hands into 50, 100, 500 properties per deal, or $ 1 billion-plus in assets", says official close to the plan.

Families who have lost their homes to foreclosure tend to move to single-family rentals, so the proposal to convert foreclosures to rentals is justifiable.

Will this plan of the administration help the recovery of the housing market? If this plan pushes through, it will be good news for the new investors, as homeowners who have foreclosed properties prefer to rent, not to mention, the rentals are increasing.

2012 New Year - New Options!

HAPPY NEW YEAR! The old year has gone... what is in store for us in 2012 in terms of Real Estate?  In the year 2011, the Real Estate market has experienced lowest mortgage interest rates in decades.  This has played a major role in a homebuyer's decision in purchasing a home. In the latest study released by Mortgage Bankers Association or MBA entitled, "The Great Recession and Attitudes Toward Homebuying" reveals that home buyers still think that now is a good time to buy.  According to Gary V. Engelhardt, Professor at Syracuse University, "Despite high unemployment and slow economic growth, the bulk of American households believe that now is a good time to buy a home." He also says that the profile of homebuyers is young, educated, white and Hispanic households.

Lawrence Yun, Chief Economist of National Association of Realtors (NAR) predicts, "with housing inventory down significantly in 2011 as compared to 2010, home prices could easily turn up in 2012."  This is good news for the home sellers. Lots of buyers in the current market with low inventory creates high demand.  Waiting to sell will allow supply to build and more competing homes to go on the market.

One area where home buyers can look for homes are the Inventory in Expired Listings.  Searching in Expired Listings may prove beneficial to a potential home buyer. But, they also have to understand the details why a property did not do well in the market.

Why Listings Do Not Sell...

Nearly 15% to 25% of all listings do not sell.  The market did not accept market effort, the price, the condition, the location or a mix of all.  The seller has control over two of these things: Price and Condition. While the Realtors control one: Marketing Efforts.

Location:

No one can do a thing about the home's location, except accent the positive and minimize the negatives within the various marketing strategies to be implemented.

If your listings have expired, you have a decision to make:

- Decide not to sell.

- Work with a top producing agent who knows the market.

- Lower the price to the current market.

Condition:

First impressions are lasting impressions. Homes that are not prepared first won't show well as compared to other properties.  Getting a home in good condition does not make it worth more, but being in poor condition makes it less desirable.

Some tips to make your Home  in Showing Condition:

a. Remove all items and furniture that you can live without.

b. Have all rooms painted in neutral color. The kitchen and bathrooms are reference points and must be in excellent condition. They show age, wear and tear more than any other room in your house.

Price:

Overpricing a home is responsible for most expired listings. The wrong price attracts the wrong buyers. It creates a bad reputation for the house in the market place and makes properly priced homes look even better. If the property is priced right the first time - it will sell.

Marketing Efforts:

As a Realtor, online marketing is our first priority.  The internet is the first place more and more homebuyers are beginning their search for a home. As per National Association of Realtors, 88% of the home buyers used the internet in home search. These numbers will only increase with the Internet reaching more and more households.  Nearly 70,000 new people are getting Internet access every day.  Studies also show that the average home buyer is also getting younger and increasingly grew up with the Internet.

In addition to the huge audience of excellent prospective clients, the Internet offers both convenience and cost effectiveness that traditional media cannot.  Web sites are more engaging and informative than even the best brochures. Emails make it easier and cheaper to keep in touch with existing clients. 

When listing your home, it is very important to work with an experienced Realtor who would be able to share his professional expertise; get you the best price for your home; who can provide you would endless contacts and network; and take out the headache of doing the paperwork for you. And of course, he should be able to close the deal at the least possible time.

If you want to work with a Realtor who has a proven track record in selling homes, please don't hesitate to contact me.