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.

February Real Estate Update

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Patrick James http://www.anchoragehomedeals.com info@anchoragehomedeals.com 907-865-6594 (Office) Keller Williams Alaska Group 101 West Benson Blvd., Suite 503 Anchorage, AK 99503	February 2012 Market Update 2012 is off to a promising start. Mortgage rates continue to drop and have remained under 4% for nearly two months. Home sales are strengthening and pending home sales, a measure to gauge future sales, are at their highest levels since March 2010. Job growth has been increasing for most of 2011, with unemployment dropping to 8.4%. As more people are getting jobs, consumer confidence has also been increasing. However, underemployment continues to be a problem for a stronger recovery. The underemployment rate is 18.1%, and there are still a significant number of people working part time, who would like to have full-time work. Even with substantial national improvements, this continues to be a "one neighborhood at a time" recovery. Payroll jobs were up in 25 states, but down in 24, demonstrating the delicate state of the U.S. economy. Global factors such as the European debt crisis are also complicating a more robust recovery. Strong guidance is needed from local and global leaders to continue this growth, as well as allow for business to maintain momentum toward building and expanding upon the opportunities that exist. Sources: Bureau of Labor Statistics, National Association of Realtors
This Month's Video	Interest Rates
	Another slight drop for mortgage rates as they continue to set historically low records. With homes being so affordable and the economy continuing its recovery, home prices are stabilizing, as increased sales are expected. NAR President Moe Veissi stated, "The American dream of home ownership is alive and well. We have a large pent-up demand, and household formation is likely to return to normal as the job market steadily improves. More buyers coming into the market mean additional benefits for the overall economy. When people buy homes, they stimulate a lot of related goods and services."
Home Sales
Existing home sales continued their rise, up 5% in December, to a seasonally adjusted rate of 4.61 million. Lawrence Yun, chief economist for NAR, said, "The pattern of home sales in recent months demonstrates a market in recovery. Record-low mortgage interest rates, job growth, and bargain home prices are giving more consumers the confidence they need to enter the market."
Home Price
Homes prices for December were down 2.6% from a year ago, at a median price of $164,500. One factor contributing to lower prices has been the high level of distressed properties being sold. In December, these properties began to show signs of price stabilization and increase. Foreclosures were selling at 22%, a 2% increase from a year ago, and average prices for short sales prices had risen by 3%.
Inventory
The housing inventory dropped 9.2% in December to a 6.2-month supply, or 2.38 million homes, at the current level of sales. These are the lowest inventory levels of homes for sale since March of 2005. Lawrence Yun, chief economist for NAR, said, "The inventory supply suggests many markets will see prices stabilize or grow moderately in the near future."
7 Tips for Buyers
Interest rates at favorable levels and a good selection of homes provide an opportunity for buyers. Here are a few things to for buyers to keep in mind: 1. Know what you can afford before you fall in love with your dream home. 2. Consider additional expenses that come with owning a home like property tax, insurance, and repairs. 3. Be flexible on the little things. It would be wonderful to find a home with everything you want, but those are hard to come by – distinguish nice-to-haves and must-haves early. 4. Have imagination and look beyond paint colors, wallpaper, or other easy and affordable things you can change. 5. Don't compromise on the big things, such as enough bedrooms to accommodate additions to the family or space for an office if you work from home. 6. Always inspect even if the surface looks great; it's important to know if anything major is wrong and what it will cost to fix. 7. Think about the future in regard to the neighborhoods, surroundings, schools, and developments.
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Brought to you by KW Research. For additional graphs and details, please see the This Month in Real Estate PowerPoint Report. The opinions expressed in This Month in Real Estate are intended to supplement opinions on real estate expressed by local and national media, local real estate agents and other expert sources. You should not treat any opinion expressed on This Month in Real Estate as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Keller Williams Realty, Inc., does not guarantee and is not responsible for the accuracy or completeness of information, and provides said information without warranties of any kind. All information presented herein is intended and should be used for educational purposes only. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. All investments involve some degree of risk. Keller Williams Realty, Inc., will not be liable for any loss or damage caused by your reliance on information contained in This Month in Real Estate.

Foreclosure Settlement

According to CNNMoney.com report, States have until the close of the business day to agree to the foreclosure deal.

According to Reuters' report, a proposed $25 billion foreclosure settlement to resolve mortgage abuses by top U.S. banks will give states broad authority to punish firms that mistreat borrowers in the future.

Banks have been accused of robo-signing documents and other sloppy paperwork in unlawfully rushing to deal with all the foreclosures during the 2007-2009 financial crisis.

The 5 banks that are involved in the settlement talks are Bank of America Corp, Wells Fargo & Co., JPMorgan Chase & Co, Citigroup Inc. and Ally Financial Inc.

The settlement would set requirements for how the banks conduct foreclosures, provide mortgage refinancing for underwater borrowers -- people who owe more on their mortgages than their homes are worth, fund loan principal reductions and make payments to states and borrowers who lost their homes to foreclosure.

Under the latest draft, about 1 million US homeowners who are "underwater" on their mortgages -- with principal exceeding the home's value -- could be eligible for as much as $20,000 in relief of principal owed, according to US Housing and Urban Development Secretary Shaun Donovan.

In exchange of up to $25B, mortgage servicers in states that agree to the deal would get immunity from future state servicing and originating claims -- although homeowners could pursue claims against banks and states could still pursue criminal investigations, according to reports.

The settlement also states that banks will set up internal quality control groups to assess their mortgage servicing units' compliance with the terms of the agreement. The banks must also turn over quarterly reports to the monitor about servicing complaints.

If the monitor concludes that a servicer is engaged in a pattern of noncompliance, he can undertake a more thorough review, and impose even tougher standards.

If the servicer continues to violate any of the terms, any of the states or a monitoring committee can go to court and seek penalties of up to $1M for the first "uncurred" violation and up to $5 million for a second.

The monitoring committee is comprised of representatives of state attorneys general, the US Justice Department, and the U.S. Department of Housing and Urban Development, who will review the work of the monitor.

The big question is -- how much money would be available to help homeowners, but that depends on how many states agree to the deal. If all 50 states sign on, the mortgage servicing settlement has the potential to offer as much as $25 billion. But without California, the nation's largest state, the value may sink to $17 billion.

For best foreclosure deals in Alaska, please go to http://www.flexmls.com/link.html?wvlu947m27e%2C2%2C1. If you have any questions, please feel free to contact me.

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.