Shorter Processing Time for Short Sale Transactions

FHFA (Federal Housing Finance Agency) released last April 17, 2012 the new timelines for short sale process for Fannie Mae and Freddie Mac backed loans.  The new timelines will help home owners avoid foreclosure. 


The FHFA's new directive requires the servicers of Fannie and Freddie loans to: (Source: www.fhfa.gov)


- Review and respond to borrower requests for short sales within 30 days after receipt of a short sale offer and a complete borrower request.
- If the review is still under way after 30 days, give the borrower weekly status updates.  (This allows more time where necessary, such as where subordinate lenders and/or mortgage insurance is involved.)
- Advise the borrower of the final decision within 60 days after receipt of a short sale offer and a complete borrower request. 


In cases where the servicer makes a counteroffer, the borrower must respond within 5 business days. The servicer in return, must give its reply within 10 business days of receiving the borrower's response.


According to CNBC report, the long response time have been the no. 1 complaint in the short sale sector. It usually takes up to a year or more for a buyer to get a response which results to buyers dropping out of the transaction.  Fannie and Freddie hold hundreds of thousands of distressed loans and with the new FHFA directive, the process will be expedited. The new timelines will take effect in June.


If you have any questions about real estate, please don't hesitate to contact any of our team.  You may reach  James Team Real Estate on (907)-865-6594 or email us at patrickjameshomes@gmail.com. If you are looking for your new home, you may check out our listings at www.anchoragehomedeals.com.

According to CNNMoney, starting April 1, borrowers with ongoing disputes with creditors over debts of $1,000 or more may no longer qualify for FHA insured loans.  The new rule also applies even if the borrower has a perfect credit score.

Borrowers with ongoing debt disputes of over $1,000, would have to pay the remaining balance or enter into a payment plan with at least 3 payments on it.  Payments made must be documented and submitted to FHA, before they can secure FHA mortgages.

FHA will not include the disputed credit accounts from more than 2 years ago or any credits related to reported identity theft.

In FHA study, they found out that many borrowers that are unable to pay their current mortgages had prior credit deficiencies including unpaid collections and other unresolved credit disputes.

Tiffany Thomas Smith, Deputy Press Secretary for the U.S. Department of Housing and Urban Development said, "It's a way of protecting consumers from getting into loans they ultimately can't afford.

For more information, you can check out http://money.cnn.com/2012/03/30/real_estate/FHA-loans/index.htm.  Or you can contact me for any real estate information.

FHA to Decrease Refinance Fees

FHA (Federal Housing Administration) will lower the mortgage insurance premiums and annual fees for borrowers who refinance their loans as part of President Obama's plan to improve the housing market.

Borrowers who refinance their existing FHA loans will pay an upfront insurance premium equal to 0.01%, the lowest allowable rate, of the mortgage amount. For example, $100 for a $100,000 loan - plus an annual fee of 0.55% (down from 1.15%).  This is effective June 11, 2012.

Qualifying borrowers must be current on an existing FHA-insured mortgage signed on or before May 31, 2009.  An estimated of 2 to 3 million borrowers will benefit from this new program.  The program doesn't require verification of income and employment, and it doesn't mandate a new appraisal of the property.  A typical borrower would save about $1,000 a year in premiums and $3,000 a year including savings from lower rates, the FHA said.

The new plan is in contrast with the new increase in upfront fee and annual fee for the new borrowers.  A borrower making a 3.5% down payment on a home purchase as of April 1 will pay a 1.75% upfront fee and a 1.25% annual fee. 

If you have any questions, don't hesitate to contact me. For more fantastic housing deals, please visit www.anchoragehomedeals.com.

Is Housing Crisis Going to End by End of 2012?

According to a recent report released by Capital Economics, the housing crisis is expected to end this year. The reason behind this theory is due to banks finally loosing up their credit standards.     

Since the 2008 housing market bubble popped, credit standards have increased leaving many people with little to no chance of obtaining a loan to buy a home.  Before the crisis began, a potential home owner only needs to obtain a credit score of mid to upper 500's.  

Now, many economists home that the housing market crisis will come to an end with the easing of banks’ lending standards and a loosening of credit.

As current sign of improvement is that the banks are loosening their LTV's (loan-to-value ratios). A loan-to-value ratio or LTV ratio shows the amount of a mortgage lien as a percentage of the total appraised value of the home. For instance, if a borrower takes out a loan of $140,000 to buy a home worth $160,000, the LTV ratio is $140,000/$160,000 or 87.5%. Today, banks are showing higher LTV's.

In addition to that, the employment statistics showed continued growth for the third straight month in February as employers added 227,000 new jobs for the whole country.  Unemployment rate in Alaska was last reported at 6.9% - according to the US Federal Reserve. The unemployment rate averaged at 8.0501% from previous years. The national unemployment average is at 8.3%.  This illustrates that the Alaskan economy is outshining other economies impacted by negative housing markets.

With the current job market situation, Americans are beginning to rethink their attitudes about jumping back to the housing market.  With near record low mortgage rates and low current home prices, now is a good time to both buy and sell.  You can check out www.anchoragehomedeals.com for the best deals in Alaska.

FHA to Increase in Up-Front Mortgage Insurance - Again!

According to Bloomberg report, FHA is set to raise its mortgage insurance premiums again for the fourth time in 3 years.  Beginning April 1, the cost of up-front mortgage insurance premiums will increase by 75 basis points for new 30-year loans.  The change applies to new loans registered on, or after, April 1, 2012. “The  75 basis point increase will be in addition to a 35 basis point increase in the annual premium on loans up to $729,750 that was announced earlier last month as part of the agency’s 2013 budget”, said FHA Acting Commissioner Carol Galante. 

“For loans up to $625,000, the increase will be on top of a 10 basis point increase on annual premiums for smaller loans.   The increase will add about $5 per month to the cost of a typical FHA loan, which is about $150,000”, Galante said.

When buyers are approved for FHA loans, they are required to carry mortgage insurance.  That includes both a Mortgage Insurance Premium (MIP) and an Up Front Mortgage Insurance Premium payment into an escrow account set up by the US Treasury Department and the funds are used to protect the government in case the borrower defaults on the FHA loan.

Because the FHA backs many first-time and lower-income borrowers, the premium increases could have a negative effect on the housing market, particularly on homebuilders, according to Jaret Seiberg, senior policy analyst at Guggenheim Securities’ Washington Research Group.

“We believe this is a negative for housing as it will make it that much more expensive for first-time homebuyers to enter the market,” Seiberg said in a note to clients.

If you are planning to use FHA for your next home mortgage, get your loan application today.  If you wait, you’ll be subject to the FHA’S new premiums.  For a list of great deals in Alaska area, you may check out http://www.anchoragehomedeals.com/.

GAS PRICES ARE EXPECTED TO KEEP RISING! QUIT BURNING $$$ IN THE TANK AND LET THE HOUSING MARKET BE A POSITIVE INVESTMENT!

Why Gas Prices Are So High?

High gas prices are usually caused by high prices for crude oil, which accounts for 55% of the price of gasoline. Distribution and taxes influence the remaining 45% of gas prices. Usually, distribution and taxes are stable, so that the daily change in the price of gasoline directly reflects oil price fluctuations.


In February 2012, concerns about a potential military action by either Israel or even US against Iran caused high oil prices. Second, some oil refineries in the US were closing. Third, oil and gas prices tend to rise every spring, in anticipation of increased demand during the summer driving season. As a result, gas prices hit $3.50 a gallon by February 15.


LOOKING AT REAL ESTATE AS A POSITIVE INVESTMENT!


Oil prices are expected to continue rising so outside of selling or trying to trade in your vehicle for less than market value, especially our favorite gas guzzler vehicles, what can WE do?? Coincidentally, RENT prices are also rising so why not make the most of your hard earned money work for you and look into purchasing a home/property in the Anchorage area. Interest rates are LOW and housing market is coming into the "busy" season with spring approaching. Your primary residence, as well as an investment property (like a condo or crash pad for the work week), can have mortgage interest deducted from taxes and can be a positive investment. Not to mention we are very fortunate that our housing market in the Anchorage Bowl and surrounding areas have not taken a dive in property values. On the contrary, a vehicle is not a positive investment and depreciates quickly in value, with accelerated maintenance expenses, and to top it off (no pun intended!) the rising cost of fuel!!


Let’s say for example, your place of work is in Anchorage, and you are living in Wasilla. Your minimum monthly fuel cost may take up to $500 per month out of your monthly budget. While if you live in Anchorage, your monthly fuel cost would only take you up to over $100 per month. There is a huge savings and of course, you do not have to travel so long just to get to work. Gas prices may continue to rise up to as much as $5/gallon this summer. This may increase your gas expenses by 25% per month.  See table below for comparison.


Fuel Expenses at Current Prices

Summer Fuel Expenses at Forecasted $5/gallon

***If you want to reduce the impact of increasing gas prices and live closer to your work place, here is a resource to view the active Homes in Anchorage & Surrounding Area.  All or email JAMES TEAM REAL ESTATE for more information at 907-865-6594 or you may call me directly at 907-242-7653.***

Foreclosure Settlement to Flood the Market with More Foreclosures!

According to CNNMoney report, as the $26 billion foreclosure settlement deal helps the hundreds of thousands of troubled homeowners, it will also flood the market with new foreclosures.

Many lenders held off foreclosure procedures as they wait for the final decision of the complex negotiation between 49 state attorney generals and federal officials.

Daren Blomquist, Vice President of RealtyTrac, online marketer of foreclosed properties, estimates that new filings will climb from 1.9 million in 2011 to between 2.2 million and 2.5 million this year. A surge of home seizures may drive down values, at least for a while, in a fragile market.

Rich Sharga, Executive Vice President for Carrington Holdings, a real estate firm says, "The market needs to clear out a lot of the distressed inventory before prices start to come back."

According to the S&P/Case Shiller index of values taken in 20 U.S. metropolitan areas, home prices have dropped 33% from their July 2006 peak. In CoreLogic Inc report, a real estate data provider, about 11 million U.S. homeowners have negative equity, which means that they owe more on their mortgages than their homes are worth.

Investors are likely to buy many of the foreclosed homes that come on the market to take advantage of low prices and demand for rentals, said Mark Zandi, Chief Economist for Moody's Analytics Inc. According to National Association of Realtors (NAR), about 21%of home sales in December were investor purchases.

With the continuous falling of housing prices, the all-time low mortgage interest rates and the government programs that make it easier for the US citizens to own their home. Now, is definitely, the right time to buy!

If you want to discuss foreclosure deals, you may contact me for more information.