The Folsom Corner

Distressed Homeowners Helping Banks?

I was reading an article from the Mortgage News Daily, reporting on a survey that the University of Michigan conducted about homeowners. Of the homeowners, 75% viewed home buying conditions favorably due to low interest rates and attractive home prices. The survey also showed that 9 out of 10 home owners viewed conditions for the sale of their own home as unfavorable, not because of a lack of buyers, but because of home price declines. I didn't need the survey (and I doubt anyone else did) to figure that out. With so many homeowners underwater on their mortgage, and those that want to hold on to their home price from 2005, there are not that many homeowners willing to take the plunge, even with all the buyers looking. This is one of the reasons, here in Folsom, we have a low inventory. And I believe, as do others, that this will continue for a while because it will be some time before pricing rises enough for those homeowners underwater to at least break even.

What was even more interesting in the article, was a comment from Adam Quinones "To reduce the cost of maintaining the condition of the foreclosed properties, banks have delayed the liquidation process and allowed delinquent borrowers to remain in their home. By delaying the liquidation of foreclosed properties, banks have avoided large asset value write-downs."

This (in my opinion) makes some sense as to what I am seeing. I know that when a borrower stops making their mortgage payments, the bank is sending someone by to take a look at the property and determining whether it is being lived in or abandoned. If no one is living in the home, the bank sends a letter to the borrower stating that they will have someone take care of the property and charge the borrower for it. (I think that is the blood from turnip program). 

This is probably why, even after almost three years of significant distressed properties, (and the banks should have streamlined the process by now) the banks are not churning through the foreclosure process with borrowers.  I think this is one more reason we will probably never see a wave from the 'shadow inventory".

Busy as a Bee!

As you know I held an open house this past Sunday. It was my first one since the beginning of the year. While a lot of Realtors do not like to hold open houses, I love to. I get to spend a few hours showing off a great home, talking to people about real estate. Helping them learn more about the real estate market and how to make the right decisions when it comes to buying or selling a home.

This past Sunday was crazy busy. I was at the open house for three hours and it was non-stop people. Depending on the price range, the lower the price, more activity you tend to get. The home for sale in Folsom priced at $599,000 would be considered a bit higher than average.  There were people following me in from putting my open house signs out!  I was talking about real estate for the whole three hours(and loved it). 

I met a lot of people who are looking for the right home and are having a difficult time of it because of our low inventory. Some have offers on short-sales and of course, don't know if it will be successful or not.

If you are thinking of selling your home anytime in the next year, I believe you should be on the market now. There is low inventory, we have the first time (and repeat buyer's) tax credit and interest rates are low. And lots of buyers looking for that perfect home.

Open House This Sunday

If you are out and about this Sunday, come by and say hi! I will be holding an open house this Sunday from 1-4 at 868 Fieldstone Court, here in Folsom. This is a new on the market. Gorgeous 4,212 square foot home in Empire Ranch. The home has 5 bedrooms, 4 baths. Upstairs bonus room. Built in 2002. It has lovely views of the greenbelt. List price is $599,000.

For more info and to see pictures, click here.

Fannie Mae Offers Closing Cost Assistance and/or Appliance Incentive

HomePath by Fannie Mae, is offering a 3.5% incentive(check with your lender to make sure they allow it) for buyers who close on a Fannie Mae home between January 28 and April 30, 2010. Buyers purchasing properties that are listed on their site that are closed between the stated period may receive up to 3.5% of the final sales price for; closing costs, purchase of new Whirlpool appliances by Fannie Mae, or a mix of closing costs and appliances at the buyers discretion, up to the maximum of 3.5%.

To be eligible for this incentive; offers must be accepted on or after January 28, 2010, property sale must close before May 1, 2010, purchase must be owner-occupied, no investors.

To see what homes are available on their site please click here. If you see a home that you might be interested in or want to see, call me, so you can take advantage of the incentive!

1099 Kinnerly Lane in Lincoln

I have a new listing I wanted to share with you. You might know of someone who would like a lovely home in Lincoln. The home is single story, with four bedrooms and two bathrooms. Hardwood floors throughout the main areas of the home. Granite countertops in the kitchen, baths and laundry room. Beautiful kitchen. Plantation shutters throughout. Upgraded lighting. Three-car garage. And a pool! Built in 2007. Offered at $250,000.

If you know of someone that might be interested, let me know!

Checking Systems

I am writing this quick post, just to test some new systems I have in place. If you remember, my full time job (which I love) is guiding buyers and sellers through the real estate market.

I also like to blog, as you can tell. What I am not so great at is getting the blogging to work like I would like.

So if got this far in my blog post, thanks, and next blog post will be back to real estate!

U.S. Department of Housing and Urban Development (HUD)

WASHINGTON - In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan today announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure. Just yesterday, Secretary Donovan announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes.

"As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers," said Donovan. "FHA has an unprecedented opportunity to fulfill its mission by helping many homebuyers find affordable housing while contributing to neighborhood stabilization."

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.

"This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed," Donovan said.

In today's market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

"FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties," said FHA Commissioner David H. Stevens. "This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity."

The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:

• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
• In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.
• The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Specific conditions and other details of this new temporary policy are in the text of the waiver, available on HUD's website.

via portal.hud.gov

This is great news for buyers!

Posted via web from Mechelle Gooch's Real Estate Bits

Folsom Home Inventory

As you have been reading, the inventory of homes available for sale here in Folsom is low. I thought I would break it out in the three segments of our market. There are equity sales, which are traditional home sales. There are REO, which are foreclosed on homes. Then there are the short sales, where the owner owes more than the home is worth.

Chart 1 shows the inventory for equity sales here in Folsom. Chart 2 shows the REO inventory. And with Chart 3 I am showing the inventory on short sales.

While pendings and sales are consistent in equity sales, and a little bumpy in REO's, take a look at short sales.

The short sales are trending up in both pendings and solds. That is telling me that more banks are coming to terms (at least for the moment) with the situation and are agreeing to the short sales.

What does this mean for buyers? If you are not concerned about the First Time Buyer's Tax Credit, and you find a short sale that fits your needs, it might be worth trying to buy.

It still requires some questions asked, such as how many loans on the property, which lenders are involved, and how upside down is the seller. But if those answers are the right ones, and you have patience, you might consider it.

And if you are considering selling, and might be in a short sale situation, more of them are getting sold and it might be time to put your home on the market.

Want to know how the market will impact your situation, give me a call!