Investors are now exempt from the 90-day seasoning rule. The datailed rules can be found here:
90 DAY FLIP RULE WAIVED
This will allow investors that have purchased FHA repos to put them on the MLS or By Owner networks much sooner. This should offer some good properties much sooner, move in ready as compared to Short Sales and Bank Owned - providing the investor cleans up the properties after his purchase.
The incentive for the investor is a quick return on his investment and increases the rate at which foreclosed homes are returned to the market in move in condition.
Let's hope it works as intended!
Monday, January 18, 2010
Friday, January 15, 2010
Short Sales a More Usable Tool
By Paul Owers in Lowe's Daily Real Estate News [newsletter@rismedia.com] of 1/15/10
New Guidelines Meant to Make Short Sales a More Usable Tool
Posted By susanne On January 14, 2010 @ 4:47 pm In Homeowner's Toolkit, Real Estate, Today's Marketplace, Today's Top Story
[1]RISMEDIA, January 15, 2010—(MCT)—Financially-stressed homeowners left hanging while their banks consider whether to approve the short sales of their properties may benefit from new federal guidelines that give lenders a 10-day limit in which to respond to purchase offers.
The rules from the U.S. Treasury, which also allow financial incentives for both sellers and lenders, could figure prominently in Florida’s housing market, where about one in every five existing-home purchases involves a short sale.
Gary Balanoff, a real-estate agent with RE/MAX Select in Oviedo, Fla., tells his clients to expect at least a 60-day wait when they try to buy or sell a home via a short sale. And as Treasury’s expedited short sale process emerges between now and April, he said, he’s not going to tell his clients any differently. “It’s a very tough process to get some degree of standards,” Balanoff said of short sales. “I think this will help—it will put more pressure to comply and get quicker results. Three or four months of waiting for an answer is not doing anyone any good—even lenders.”
The effect of the new rules will likely be somewhat limited because only banks that owe the federal government TARP bailout funds must comply. And according to Balanoff, even when certain banks do push for faster short sales, there is so little consistency among mortgage negotiators that he doesn’t expect the new deadline measures to be applied or enforced evenly.
In a short sale, the homeowner sells the property for less than what is owed on the mortgage, and the lender forgives the difference. Many of the single-family mortgage holders in Central Florida are “under water,” meaning they owe more than their homes are currently worth.
According to the Orlando Regional Realtor Association, 20% of its members’ existing-home sales in December 2009 were short sales. An additional 43% were bank-owned properties, and the remaining 37% were “normal” resales. While short sales are considered an ideal solution for banks and for “under water” homeowners on the verge of foreclosure, the deals often drag on as lenders take weeks or months to decide what to do. Frustrated buyers sometimes walk away during the delays. In some cases, lenders insist that the borrowers share in the financial loss, which holds up the transactions even longer. As a result, homes stay on the market, prolonging the housing downturn.
The Treasury rules, in addition to imposing a 10-day deadline for bank decisions, call for sellers to receive $1,500 moving allowances—and for the sellers to not have to repay any of the debt. Also, lenders will get $1,000 to cover administrative and processing costs, while investors owning the mortgages will receive a maximum $1,000 for allowing as much as $3,000 of a short sale’s proceeds to be distributed to less senior lenders.
The 83 loan servicers participating in the Obama administration’s Making Home Affordable loan modification program are required to follow the guidelines for all borrowers who have requested short sales or who did not complete loan modifications. The rules do not specifically apply to loans guaranteed by Fannie Mae or Freddie Mac, which constitute about half of all U.S. mortgage debt. The two government-run mortgage companies are working on their own guidelines.
The Treasury plan, which must be implemented by lenders no later than April 2010, is meant to help sellers like Dawn Sclafani, who has been waiting since October for her lender to approve a short sale offer on her South Florida home. A buyer has offered $155,000, and she owes $233,000. Sclafani, a psychologist who lives in Margate, Fla., said she is eager for her bank to approve the deal so she can put the experience behind her. “I want to move on, but I can’t until somebody gives me permission to,” she said. “I’ve heard that this is a horrendous process. The banks are just not very cooperative. I do believe these new rules will help.”
U.S. Rep Ron Klein, D-Fla., said the guidelines are meant to make short sales “a more usable tool.” Klein notes that the rules provide standardized paperwork for all short sales, and give buyers and sellers a more reasonable time frame for finding out whether or not the sales will happen. But Klein and others say the government may have to increase the financial incentives. The $3,000 cap on short-sale proceeds to less-senior lenders is not sitting well with second-lien holders, who have been demanding more money from sellers, the first lenders and real estate agents in exchange for releasing their claims and allowing the short sales to proceed. “This is a great program if all these mortgages had only one lien holder,” said Travis Hamel Olsen, chief operating officer for Loan Resolution Corp., an Arizona company that helps lenders complete short sales. “But many of these properties have two liens.”
Some Florida real estate agents remain skeptical of the guidelines. Broward County agent Ron Rosen, who urged Klein last summer to push for new regulations, said he thinks “the banks will still play their little games with people and make life difficult for everyone.”
A spokeswoman for the Treasury says it will hand down “substantial” penalties to lenders that don’t comply. The agency said it can fine lenders, withhold or reduce incentive payments, or require improperly rejected loans to be modified. Lenders have blamed short sale delays on the complicated nature of the transactions, sheer numbers of deals and on borrowers who don’t submit proper paperwork in a timely manner.
Because short sales involve so many moving parts, lenders will be hard-pressed to meet the 10-day deadline, said Anthony DiMarco, executive vice president of government affairs for the Florida Bankers Association. “That will be a challenge,” he said.
In many cases, the banks are not to blame for the delays, said Ward Kellogg, chief executive of Boca Raton-based Paradise Bank. But he thinks the guidelines are necessary to help clear the market of so many distressed properties. “I think the pressure on the banks is a good thing,” Kellogg said.
(c) 2010, Sun Sentinel
Distributed by McClatchy-Tribune Information Services.
© 2010 by Lowe's®. All rights reserved. Lowe's and the gable design are registered trademarks of LF, LLC.
As noted in the article, there are skeptics re how the banks will actually respond.
New Guidelines Meant to Make Short Sales a More Usable Tool
Posted By susanne On January 14, 2010 @ 4:47 pm In Homeowner's Toolkit, Real Estate, Today's Marketplace, Today's Top Story
[1]RISMEDIA, January 15, 2010—(MCT)—Financially-stressed homeowners left hanging while their banks consider whether to approve the short sales of their properties may benefit from new federal guidelines that give lenders a 10-day limit in which to respond to purchase offers.
The rules from the U.S. Treasury, which also allow financial incentives for both sellers and lenders, could figure prominently in Florida’s housing market, where about one in every five existing-home purchases involves a short sale.
Gary Balanoff, a real-estate agent with RE/MAX Select in Oviedo, Fla., tells his clients to expect at least a 60-day wait when they try to buy or sell a home via a short sale. And as Treasury’s expedited short sale process emerges between now and April, he said, he’s not going to tell his clients any differently. “It’s a very tough process to get some degree of standards,” Balanoff said of short sales. “I think this will help—it will put more pressure to comply and get quicker results. Three or four months of waiting for an answer is not doing anyone any good—even lenders.”
The effect of the new rules will likely be somewhat limited because only banks that owe the federal government TARP bailout funds must comply. And according to Balanoff, even when certain banks do push for faster short sales, there is so little consistency among mortgage negotiators that he doesn’t expect the new deadline measures to be applied or enforced evenly.
In a short sale, the homeowner sells the property for less than what is owed on the mortgage, and the lender forgives the difference. Many of the single-family mortgage holders in Central Florida are “under water,” meaning they owe more than their homes are currently worth.
According to the Orlando Regional Realtor Association, 20% of its members’ existing-home sales in December 2009 were short sales. An additional 43% were bank-owned properties, and the remaining 37% were “normal” resales. While short sales are considered an ideal solution for banks and for “under water” homeowners on the verge of foreclosure, the deals often drag on as lenders take weeks or months to decide what to do. Frustrated buyers sometimes walk away during the delays. In some cases, lenders insist that the borrowers share in the financial loss, which holds up the transactions even longer. As a result, homes stay on the market, prolonging the housing downturn.
The Treasury rules, in addition to imposing a 10-day deadline for bank decisions, call for sellers to receive $1,500 moving allowances—and for the sellers to not have to repay any of the debt. Also, lenders will get $1,000 to cover administrative and processing costs, while investors owning the mortgages will receive a maximum $1,000 for allowing as much as $3,000 of a short sale’s proceeds to be distributed to less senior lenders.
The 83 loan servicers participating in the Obama administration’s Making Home Affordable loan modification program are required to follow the guidelines for all borrowers who have requested short sales or who did not complete loan modifications. The rules do not specifically apply to loans guaranteed by Fannie Mae or Freddie Mac, which constitute about half of all U.S. mortgage debt. The two government-run mortgage companies are working on their own guidelines.
The Treasury plan, which must be implemented by lenders no later than April 2010, is meant to help sellers like Dawn Sclafani, who has been waiting since October for her lender to approve a short sale offer on her South Florida home. A buyer has offered $155,000, and she owes $233,000. Sclafani, a psychologist who lives in Margate, Fla., said she is eager for her bank to approve the deal so she can put the experience behind her. “I want to move on, but I can’t until somebody gives me permission to,” she said. “I’ve heard that this is a horrendous process. The banks are just not very cooperative. I do believe these new rules will help.”
U.S. Rep Ron Klein, D-Fla., said the guidelines are meant to make short sales “a more usable tool.” Klein notes that the rules provide standardized paperwork for all short sales, and give buyers and sellers a more reasonable time frame for finding out whether or not the sales will happen. But Klein and others say the government may have to increase the financial incentives. The $3,000 cap on short-sale proceeds to less-senior lenders is not sitting well with second-lien holders, who have been demanding more money from sellers, the first lenders and real estate agents in exchange for releasing their claims and allowing the short sales to proceed. “This is a great program if all these mortgages had only one lien holder,” said Travis Hamel Olsen, chief operating officer for Loan Resolution Corp., an Arizona company that helps lenders complete short sales. “But many of these properties have two liens.”
Some Florida real estate agents remain skeptical of the guidelines. Broward County agent Ron Rosen, who urged Klein last summer to push for new regulations, said he thinks “the banks will still play their little games with people and make life difficult for everyone.”
A spokeswoman for the Treasury says it will hand down “substantial” penalties to lenders that don’t comply. The agency said it can fine lenders, withhold or reduce incentive payments, or require improperly rejected loans to be modified. Lenders have blamed short sale delays on the complicated nature of the transactions, sheer numbers of deals and on borrowers who don’t submit proper paperwork in a timely manner.
Because short sales involve so many moving parts, lenders will be hard-pressed to meet the 10-day deadline, said Anthony DiMarco, executive vice president of government affairs for the Florida Bankers Association. “That will be a challenge,” he said.
In many cases, the banks are not to blame for the delays, said Ward Kellogg, chief executive of Boca Raton-based Paradise Bank. But he thinks the guidelines are necessary to help clear the market of so many distressed properties. “I think the pressure on the banks is a good thing,” Kellogg said.
(c) 2010, Sun Sentinel
Distributed by McClatchy-Tribune Information Services.
© 2010 by Lowe's®. All rights reserved. Lowe's and the gable design are registered trademarks of LF, LLC.
As noted in the article, there are skeptics re how the banks will actually respond.
Tuesday, January 12, 2010
Real Estate Outlook
Realty Times of January 12, 2010
Real Estate Outlook: The Numbers Are In by Kenneth R. Harney
The drop in the latest pending home sales index got a lot of press attention, but that blip downward shouldn't be your guide on what to expect for real estate in 2010.
The 16 percent decline in November pending sales from October's unusually high index was due almost entirely to buyers' behavior confronting what they thought was an expiring tax credit.
In October the pending sales index went off the charts. Buyers were scrambling to sign contracts before the $8,000 credit program expired at the end of the month.
In November, buyer behavior was just the opposite. When Congress extended the credit through next April 30, the pressure was off. Nobody needed to rush to sign contracts.
Not surprisingly, the November index hit the skids.
Meanwhile, even November's pending sales number was a solid 16 percent above November 2008. That suggests that even without the extra incentive provided by the credit, the home sale market is gaining strength for its own fundamental reasons: huge pent-up demand, low prices and great financing.
But keep this in mind: Those fundamentals are dynamic - and buyers and sellers need to stay on top of them as they change in the weeks ahead.
For example, as we've noted before here at Realty Times, with the economy climbing slowly out of recession, and the Federal Reserve expected to throttle back on its mortgage securities purchases , interest rates are now trending upwards.
Last week's thirty year average fixed rate for new mortgages hit 5.2 percent, according to the Mortgage Bankers Association. That's still very low by historical standards, but it's up nearly a quarter of a percentage point just since mid December.
Fifteen year fixed rates averaged 4.6 percent -- a rise of one third of a point in the past few weeks.
Home prices are also beginning to trend upward in key markets, according to the latest Case-Shiller home price index. In San Francisco and Minneapolis, the index is up by about 15 percent since the low point earlier in 2009, according to an analysis by Bespoke Investment Group.
The same analysis found the Case-Shiller index up 8.3 percent from last year's low point to the latest month in metropolitan Washington DC, 7.6 percent in San Diego, 7.2 percent in Denver, 6.9 percent in Chicago and Phoenix, 6.8 percent in Dallas and 6.1 percent in Boston.
With reports of fewer layoffs plus significant new gains in manufacturing outplut and retail sales don't be surprised to see prices-and mortgage rates -- continue to rise in the months ahead.
Copyright © 2010 Realty Times. All Rights Reserved.
Real Estate Outlook: The Numbers Are In by Kenneth R. Harney
The drop in the latest pending home sales index got a lot of press attention, but that blip downward shouldn't be your guide on what to expect for real estate in 2010.
The 16 percent decline in November pending sales from October's unusually high index was due almost entirely to buyers' behavior confronting what they thought was an expiring tax credit.
In October the pending sales index went off the charts. Buyers were scrambling to sign contracts before the $8,000 credit program expired at the end of the month.
In November, buyer behavior was just the opposite. When Congress extended the credit through next April 30, the pressure was off. Nobody needed to rush to sign contracts.
Not surprisingly, the November index hit the skids.
Meanwhile, even November's pending sales number was a solid 16 percent above November 2008. That suggests that even without the extra incentive provided by the credit, the home sale market is gaining strength for its own fundamental reasons: huge pent-up demand, low prices and great financing.
But keep this in mind: Those fundamentals are dynamic - and buyers and sellers need to stay on top of them as they change in the weeks ahead.
For example, as we've noted before here at Realty Times, with the economy climbing slowly out of recession, and the Federal Reserve expected to throttle back on its mortgage securities purchases , interest rates are now trending upwards.
Last week's thirty year average fixed rate for new mortgages hit 5.2 percent, according to the Mortgage Bankers Association. That's still very low by historical standards, but it's up nearly a quarter of a percentage point just since mid December.
Fifteen year fixed rates averaged 4.6 percent -- a rise of one third of a point in the past few weeks.
Home prices are also beginning to trend upward in key markets, according to the latest Case-Shiller home price index. In San Francisco and Minneapolis, the index is up by about 15 percent since the low point earlier in 2009, according to an analysis by Bespoke Investment Group.
The same analysis found the Case-Shiller index up 8.3 percent from last year's low point to the latest month in metropolitan Washington DC, 7.6 percent in San Diego, 7.2 percent in Denver, 6.9 percent in Chicago and Phoenix, 6.8 percent in Dallas and 6.1 percent in Boston.
With reports of fewer layoffs plus significant new gains in manufacturing outplut and retail sales don't be surprised to see prices-and mortgage rates -- continue to rise in the months ahead.
Copyright © 2010 Realty Times. All Rights Reserved.
Monday, January 11, 2010
REO Discontent
Note - A REO is Real Estate Owned - Banks don't want REO's. Bank owned/Lender owned properties are not Short Sales, they move much quicker!
Realty Times of January 11, 2010
Washington Report: REO Discontent
by Kenneth R. Harney
Mortgage giant Fannie Mae is unhappy about the mounting thousands of REO houses it's stuck with, but now it's moving to sell off that inventory faster than it has in the past, potentially opening up some interesting opportunities for home buyers and their agents.
In a new policy announcement, Fannie says it will now accept purchase offers for its REO immediately after listing, without notifying lenders or mortgage servicers whose loan files are under review.
Under its previous policy, Fannie gave lenders and servicers fifteen days to find a better purchase offer for new REO they sent to the company following foreclosure.
That policy affected all repossessions where Fannie demanded the loan file on the house - potentially exposing errors in underwriting or servicing, and requiring reimbursement for losses by the lender.
But that policy also had a negative impact on Fannie's ability to move its REO out the door quickly. The fifteen day time-out slowed down the works - and sometimes kept properties out of reach of ready and willing buyers.
Partly as a result, Fannie's portfolio of unsold acquired real estate has been ballooning lately. According to its most recent securities filing, the company, now under federal control, took in more than 98,000 properties following foreclosures during the first three quarters of 2009.
During the same time, it sold about 90,000 houses.
But because of a widening imbalance of REO in and out the door dating to prior years, Fannie was sitting with 72,000 unsold houses -- about a 7 percent jump from the same period the year before.
Fannie's response to this REO bloat? Sell off the houses faster by accepting purchase offers through its network of real estate listing agents earlier.
In the company's memo to lenders and servicers, it basically said this: We're now going to market houses as soon as they come in the door and we've established a current value.
No more fifteen day time out period for lenders whose REO we've selected for loan file reviews.
As soon as Fannie lists an REO property, it will be fair game for home buyers. And if Fannie ultimately sells for a loss -- and the loan file review turns up bad underwriting or other problems -- Fannie plans to stick the lender with the loss.
Bottom line for home buyers and agents under the policy change: Look for earlier access to REO properties, and earlier decisions on purchase offers.
Fannie is determined to slim down its REO portfolio in 2010, and that just might provide opportunities for heads-up buyers and agents looking for deals.
Copyright © 2010 Realty Times. All Rights Reserved.
Realty Times of January 11, 2010
Washington Report: REO Discontent
by Kenneth R. Harney
Mortgage giant Fannie Mae is unhappy about the mounting thousands of REO houses it's stuck with, but now it's moving to sell off that inventory faster than it has in the past, potentially opening up some interesting opportunities for home buyers and their agents.
In a new policy announcement, Fannie says it will now accept purchase offers for its REO immediately after listing, without notifying lenders or mortgage servicers whose loan files are under review.
Under its previous policy, Fannie gave lenders and servicers fifteen days to find a better purchase offer for new REO they sent to the company following foreclosure.
That policy affected all repossessions where Fannie demanded the loan file on the house - potentially exposing errors in underwriting or servicing, and requiring reimbursement for losses by the lender.
But that policy also had a negative impact on Fannie's ability to move its REO out the door quickly. The fifteen day time-out slowed down the works - and sometimes kept properties out of reach of ready and willing buyers.
Partly as a result, Fannie's portfolio of unsold acquired real estate has been ballooning lately. According to its most recent securities filing, the company, now under federal control, took in more than 98,000 properties following foreclosures during the first three quarters of 2009.
During the same time, it sold about 90,000 houses.
But because of a widening imbalance of REO in and out the door dating to prior years, Fannie was sitting with 72,000 unsold houses -- about a 7 percent jump from the same period the year before.
Fannie's response to this REO bloat? Sell off the houses faster by accepting purchase offers through its network of real estate listing agents earlier.
In the company's memo to lenders and servicers, it basically said this: We're now going to market houses as soon as they come in the door and we've established a current value.
No more fifteen day time out period for lenders whose REO we've selected for loan file reviews.
As soon as Fannie lists an REO property, it will be fair game for home buyers. And if Fannie ultimately sells for a loss -- and the loan file review turns up bad underwriting or other problems -- Fannie plans to stick the lender with the loss.
Bottom line for home buyers and agents under the policy change: Look for earlier access to REO properties, and earlier decisions on purchase offers.
Fannie is determined to slim down its REO portfolio in 2010, and that just might provide opportunities for heads-up buyers and agents looking for deals.
Copyright © 2010 Realty Times. All Rights Reserved.
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