Lenders, GSEs Promote REO Repurchase Loans With a Kick

Incentive-based efforts to sell foreclosed properties especially if the homes are vacant or abandoned are accelerating this year. A bank-owned property for sale in a blighted neighborhood is most people’s nightmare as much as a low-interest, no-downpayment mortgage is everyone’s dream. It may take an incentive-based financing option to marry the two.
In Detroit it is also taking a megabank, the collaboration of the city, the building power of community development corporations and the willingness of some very unique citizens to make that happen.
JPMorgan Chase will grant $1 million in downpayment assistance as an incentive to police officers and city employees in Detroit who agree to purchase vacant homes and return to the city over the next two years.
The effort aims to address neighborhood revitalization issues around the city by simultaneously assisting its workforce and eliminating blight.
The incentive is especially significant for the first 10 Detroit police officers willing to purchase a vacant home. These first buyers will receive $25,000 in downpayment assistance, while an additional 60 police officers and city employees will receive up to $15,000 or equal to up to 20% of the home’s purchase price.
The downpayment grant will be forgiven within five years at 20% every year the homebuyer uses the property as a primary residence.
Qualifying criteria include earnings that do not surpass 120%-150% of the area median income, complete homeownership counseling through a partner of the Community Development Corp., a vacant home in the designated neighborhoods and a   closed mortgage.
The city is supporting the initiative through its Detroit Works Project. The grant is earmarked for properties located in the neighborhoods that participate in the Project 14 and Detroit Works Project’s demonstration neighborhoods of North End, Boston Edison, Virginia Park, Southwest and Hubbard Farms. An information hotline will provide detailed information to all interested buyers.
A Chase spokesperson told this publication the first interested buyer from the police department came forward as the initiative was launched in the Boston Edison neighborhood. It involves a historic property that will be rehabilitated by Central Detroit Christian, one of the participating Community Development Corporations that may receive additional funding to complete the renovation.
Once most renovations are completed the CCC will assess related costs and determine the selling price of the property, which will be announced after the property has been completely rehabilitated and is ready for use.The quality of the renovation is key to the sale since—up to that point and until the future homeowner closes on the loan—the buyer does not have any final obligations toward the property.
The large inventory is a pressing incentive for most lenders and servicers to create vehicles that help liquidate REOs--including Fannie Mae and Freddie Mac.
By year-end 2010 Fannie was authorizing lenders to offer the HomePath program designed to solely sell Fannie Mae REOs. To qualify buyers do not need to have perfect credit, can put down as little as 3% of the property price, which can be personal savings, grants from family, friends, nonprofits and even an employer, and may have a loan to value of 97%. The program is available to both individual buyers and investors.
Also, HUD’s National Community Stabilization Trust “First Look” program gives participating buyers priority access to REO properties before they are more broadly listed for sale. It offers a streamline acquisition process, funding in accordance to HUD guidelines and a competitive price.
Recently, the Obama administration suggested a plan that facilitates the sale of vacant or abandoned properties owned by Fannie and Freddie, and rental options on Federal Housing Administration REOs promoting a pro-con debate.
The National Association of Customer Bankruptcy Attorneys opposed the idea and introduced another program that may be more helpful to those who lose their home.
NACBA’s “Principal Paydown Plan” is an innovative solution because it offers the opportunity to restructure the mortgage based on bankruptcy leniency benefits.
The Principal Paydown Plan would enable a distressed homeowner to use a Chapter 13 bankruptcy to restructure the mortgage by allowing the borrower to “immediately start paying down the loan principal and reduce negative equity” by reducing the interest rate to zero for five years.
At the end of the five-year period the borrower would be able to originate a new 25-year loan at the current Freddie Mac survey rate and “amortize the remaining balance of the principal.”

Sindy Tennes
Keller Williams Realty - Hollywood Hills
310-502-4872
Sindy@SindyTennesRealty.com
www.SindyTennesRealty.com 
Lic #01781191

Rents going up ! Time to buy !!!

With rents going up and rates down, this is a great times to buy.

contact me for more info, and let make your home owner dream a reality !! 

Have a great day, Sindy

sindy@sindytennesrealty.com

Rental Vacancies at Lowest Level Since 2003

With fewer rentals available across the country but strong demand, rents are expected to rise rapidly, experts say. Rents are expected to rise faster than the 2 percent to 3 percent average annual increase that was predicted earlier this year, RISMedia reports. 
Vacancies for rental housing was 9.2 percent for the second quarter — 1.4 percent lower than a year ago — and a level that hasn’t been reached since 2003, according to the Census Bureau.  
The multifamily sector is poised for growth. The National Association of Home Builders recently reported its Multifamily Production Index rising to 41.7 in the first quarter — its highest level since 2006. The index serves as an indicator for whether more multifamily developers and property owners believe conditions are improving. 
Source:  RISMedia

Pending Home Sales Rise in June, We can all use some good news!! Best Sindy

Good News !!!
There are still great deal out there, and rates are the lowest ever !!
Give me a call and let get you going on buying or selling your home.

Pending home sales increased in June following a wide swing down in April and then up in May, according to the National Association of REALTORS®.  Activity increased in the West and South but declined in the Midwest and Northeast; all regions show strong double-digit gains from a year ago.
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, rose 2.4 percent to 90.9 in June from 88.8 in May and is 19.8 percent above the 75.9 reading in June 2010, which was the low point immediately following expiration of the home buyer tax credit.  The data reflects contracts but not closings.
Lawrence Yun, NAR chief economist, said there may be some increase in closed existing-home sales.  “For the majority of transactions, the lag time between pending contacts to actual closings is one to two months.  Therefore, the two consecutive months of rising activity should lead to overall improvement in closed sales in upcoming months,” he said.  “Though a higher than normal cancellation rate can hold back final closing figures, it could well be that some past cancellations are nothing more than delayed buying decisions rather than outright cancellations.”
Yun said tight credit and economic uncertainty have been constricting the market.  “The best way to ensure a more solid recovery in housing is to simply return to normal, sound credit standards so more creditworthy home buyers can get a mortgage,” he said.
“Washington also should not rock the boat with policy changes that would negatively impact affordable credit or otherwise increase the cost of buying or owning a home,” Yun added.
Breakdown by region: 
Northeast: The PHSI slipped 0.4 percent to 68.9 in June, but is 19.4 percent higher than June 2010.
Midwest: The index fell 3.7 percent to 79.7 in June, but is 26.4 percent above a year ago.
South: Pending home sales increased 4.4 percent to an index of 99.2 and are 19.1 percent higher than June 2010.
West: The index rose 6.4 percent to 107.0 in June and is 16.4 percent above a year ago.
Existing-home sales this year are expected to total 5 million, slightly higher than 2010.  Similarly, little change is forecast for aggregate home prices with several indicators, including NAR’s median prices, showing recent signs of stabilization.
Source: NAR

Mortgage Rates Reach Record Lows

If you're thinking of buying a home, this is the time...

Mortgage rates dropped sharply this week, possibly improving the purchasing power of many home buyers. The 30-year fixed-rate mortgage, the most popular choice among buyers, averaged 4.39 percent this week, its lowest average for 2011, Freddie Mac reported in its weekly mortgage market survey. The 15-year fixed-rate mortgage and the 5-year adjustable rate-mortgage also both reached new historical record lows
Here’s a closer look at rates for the week ending Aug. 4:
30-year fixed-rate mortgages: averaged 4.39 percent, down from last week’s 4.55 percent average. A year ago at this time, 30-year rates averaged 4.49 percent.
15-year fixed-rate mortgages: averaged 3.54 percent, dropping from last week’s 3.66 percent average.Last year at this time, 15-year rates averaged 3.95 percent.
5-year adjustable-rate mortgages: averaged 3.18 percent this week, falling from last week’s 3.25 percent average. Last year at this time, 5-year ARMs averaged 3.63 percent.
1-year adjustable-rate mortgages: were the only ones on the rise last week, averaging 3.02 percent this week, which is up from last week’s 2.95 percent average. Last year at the time, 1-year ARMs averaged 3.55 percent. 

Please contact me if you have any questions.
Have a great day, Sindy