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Posts Tagged ‘Housing’

No Deficiency Due With New Shortsales Guidelines

August 22, 2012 Leave a comment
— Photo Courtesy of http://www.milwaukeeshortsale.com/

The new Shortsale guidelines from Fannie Mae and Freddie Mac will make it easier for sellers who previously did not qualify and eliminate previous problems in the past including remedy for the 2nd lienholder and  not having to prove hardships.

“Short sales have become an increasingly important tool in preventing foreclosures and stabilizing communities,” said Leslie Peeler, senior vice president, National Servicing Organization, Fannie Mae. “We want to help as many homeowners avoid foreclosure as possible. It is vital that servicers, junior lien holders and mortgage insurers step up to the plate with us. These new guidelines will open doors to help more homeowners qualify for short sales, remove barriers to completing short sales, and make the process more efficient for homeowners and servicers.”

Shortsale process is now open to non default borrowers who may face hardship death of a borrower or co-borrower, divorce or legal separation, illness or disability or a distant employment transfer starting November 1, 2012 when the  new short sale guidelines making it easier for eligibility.

“The streamlined short sales process will definitely help homeowners,” says David Liniger, Re/Max International chairman and co-founder.

“A lot of sellers and their Realtors have not been able to sort out the problems with short sales and have given up on the process because, even after sending in the correct paperwork, they have sometimes waited three or four months for their lender to respond,” Liniger says.

Servicemembers who need to relocate qualify for a shortsale.  They no longer have to pay remaining deficiency after a short sale and will automatically be qualified for short sale even if they are current in payments.  Provisions were also created for military personnel with Permanent Change of Station (PCS) orders.

One major barrier that is also being addressed is the issue with second lien holders. The second lien holder have caused  a substantial percentage of short sales failures.   To prevent second lien holders from stalling the short sale process, the GSEs will offer up to $6,000.

In addition, all servicers will have the authority to approve and complete short sales that follow the requirements without first going to the GSEs for approval. And the  GSEs will also waive their right to pursue deficiency judgments.

“These new guidelines demonstrate FHFA’s and Fannie Mae’s and Freddie Mac’s commitment to enhancing and streamlining processes to avoid foreclosure and stabilize communities,” said  FHFA Acting Director Edward J. DeMarco in a statement. “The new standard short sale program will also provide relief to those underwater borrowers who need to relocate more than 50 miles for a job.”

References:

Equities.com
DSNews.com
Bankrate.com

Additional Relating Reading:

How to Make Money in Real Estate in the New Economy
Investing in Real Estate
Cash Flow Notes 2012

Buffet Ready For the Next Housing and Mortgage Trend

August 2, 2012 Leave a comment
— Photo Courtesy of CNN.com —

The U.S. housing market has seen four years of  lack of new homes.  Since 2008 new homes construction declined  steadily and it was  only up until this  past June 2012 we began to see reports of  new housing  construction applications  increase.

Four years of lack of  new homes coupled with the shadow and REO  inventory held by the banks  and the  foreclosure homes many stuck in limbo because of the robo signing issues only recently starting to move again;   the  shortage of  available housing has been substantial.

These issue skew the reports of increase of home prices as a barometer for uptrend in the housing market. The demand for homes because of loss of inventory  may not reflect as much of an  uptrend in   the housing market, rather  leaning more towards  competitive bidding  for the minimum inventory on market.

What  may be  added  to that demand is  the normal new   families demographic  but those numbers are balanced out by the number of young adults remaining at home because of the unemployment.  When the unemployment numbers decrease there will added factor in housing demand.

Warren Buffet’s Berkshire Hathaways   increased his holdings in Wells Fargo, the largest U.S. Homelender, and the assets of the bankrupt Residential Captial LLC.

A turn in the housing market will benefit Berkshire’s businesses tied to home building and repair, said Josh Brown, who helps oversee $350 million at Fusion Analytics Investment Partners LLC in New York, including Berkshire shares.

“Buffett has spent the past decade amassing a portfolio of companies that are involved with home remodeling,” he said in a phone interview. “It’s got the right drivers if this housing trend continues.”

Berkshire Hathaway  has added approximately 36% or  104.1 million shares of Wells Fargo to its portfolio since  2008-2009.   And his choice in a regional bank is a less riskier  one  with current big bank problems.

“Wells is seen as a supersize regional bank,” reports Wall Street Journal.”More telling, it isn’t a player in over-the-counter derivatives markets. Wells had derivatives with a face value of about $3.2 trillion at the end of last year. J.P. Morgan had $71 trillion and BofA, $68 trillion.”

When the real estate market is back on the move Warren Buffet will in the right position, again.

 

ADDITIONAL READING

Investing in Real Estate

Home Buying Kit For Dummies

Cash Flow Notes 2012

Finally! Strongest Housing Starts Since 2008

— Photo Courtesy of http://www.yc.edu



Outlook for residential real estate is on the uptrend and will push the economy in the right direction  as data indicates that  U.S. home starts in June was one of the fastest pace in almost 4 years according to economists.

Seventy-nine economist surveyed by Bloomberg News  provided the data that indicates housing starts moved up 5.2 percent last month to 745,000 estimated annual which is the  strongest since 2008   according to the median estimates, and building permits.

“The long-awaited housing market recovery is definitely under way as demand is improving,” said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh. “Continued growth in the number of households, pent-up demand, very low prices and mortgage rates that have resulted in record- high affordability” are underpinning demand, he said.

Confidence among U.S. homebuilders climbed in July by the most since September 2002.
Index of sentiment increased by 6 points to 35 this month as sales and buyer traffic improved according to a report from the  National Association of Home Builders/Wells Fargo.

“As we start to move prices up, it starts to draw people off the sidelines who are potential homebuyers, people that are at the age they should be buying a house, but they’ve been concerned about a further decline in prices,” Daniel Fulton, chairman and chief executive officer of forest-products company Weyerhaeuser Co. (WY), said at a June 13 conference. “So we’re starting to see some increase in activity.”

The housing supply is moving as record low mortgage rates and lower property values attract buyers reducing the inventory.  This will cause the home builders to boost construction which will create jobs and stimulate the economy.

The Standard & Poor’s Supercomposite Homebuilding Index, which includes D.R. Horton Inc. and PulteGroup Inc., has climbed 52 percent this year, outpacing an 8.4 percent gain in the broader S&P 500 Index.

“Evidence from the field suggests that the ‘for sale’ housing market has, in fact, bottomed and that we have commenced a slow and steady recovery process,” Stuart Miller, chief executive officer at Lennar Corp., the third-largest U.S. homebuilder by revenue, said in a June 27 statement.

ADDITIONAL READING

Investing in Real Estate

Home Buying Kit For Dummies

Cash Flow Notes 2012